/raid1/www/Hosts/bankrupt/TCR_Public/121107.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Wednesday, November 7, 2012, Vol. 16, No. 310
Headlines
9439 LLC: Chapter 11 Case Summary & 3 Unsecured Creditors
A123 SYSTEMS: Has Interim Approval of Wanxiang DIP Loan
A123 SYSTEMS: Creditor Proposes Ethical Wall to Continue Trading
A123 SYSTEMS: Keeps Bonus Program Participants A Secret
A123 SYSTEMS: Has 7-Member Official Creditors Committee
A123 SYSTEMS: Senators Seek Review of Wanxiang Bid
AFA FOODS: Resisting Liquidation Sought by Workers
AHERN RENTALS: Court Extend Plan Filing Deadline to November 30
ALLIED SYSTEMS: Creditors Object to Yucaipa's Role in Ch. 11
ALTSOURCE PORTFOLIO: S&P Assigns 'B+' Counterparty Credit Rating
AMERICAN AIRLINES: Closer to Labor Contract With Pilots
AMERICAN AIRLINES: TWU Blocking Bid to Reject Dispatchers' Deal
AMERICAN AIRLINES: Opposes Marathon Bid for Examiner
AMERICAN AIRLINES: Wants Embraer Settlement Objections Overruled
AMERICAN DINING: Plans to Sell Hickory Restaurant for $250,000
AMERICAN REALTY: Lenders Want Case Dismissed or Transferred
AMERICAN SUZUKI: Files for Chapter 11, To Wind Down Operations
AMERICAN SUZUKI: Case Summary & 30 Largest Unsecured Creditors
APX GROUP: S&P Assigns 'B' Corp. Credit Rating; Outlook Stable
ASSET RESOLUTION: Case Summary & 20 Largest Unsecured Creditors
ATP OIL: Committee Files Motion for Standing Order to Sue
AVIS BUDGET: Moody's Rates $250-Mil. Senior Unsecured Notes 'B2'
AVIS BUDGET: S&P Gives 'B' Rating on $250MM Senior Unsecured Notes
BALL GROUND: Commission Discusses Bankruptcy, Forensic Audit
BERMUDA & THE BOULEVARD: Case Summary & Unsecured Creditor
BLUEJAY PROPERTIES: Wants to Resolve Civil Suit With Bank
BORDERS GROUP: Creditors to Receive $75 Million Distribution
BUFFETS INC: District Court Affirms Ruling on Calif. Tax Claims
CENTENE CORP: S&P Keeps 'BB' Rating on $250MM Sr. Unsecured Notes
CIRCUIT CITY STORES: Resolves Price-Fixing Claims Against LG
CITRUS VALLEY: Moody's Affirms 'Ba2' Bond Rating; Outlook Stable
CLEAN HARBORS: S&P Puts 'BB+' Corp. Credit Rating on Watch Neg
COLONIAL BANK: FDIC Hits Auditors With $1-Bil. Negligence Suit
CONTEC HOLDINGS: Emerges From Chapter 11 With Lower Debt
CORDILLERA GOLF CLUB: Auction Set for Dec. 10
CRYSTAL CATHEDRAL: Founder Seeks $5-Mil. in Bankruptcy Court Claim
D & J PROPERTIES: Voluntary Chapter 11 Case Summary
DA LYN INVESTMENTS: Case Summary & 8 Unsecured Creditors
DAVID SYRE: Semiahmoo Hotel to Close Dec. 1; Warnick Mulls Buyout
DELTA PETROLEUM: Van Guilder Pleads Not Guilty of Insider Trading
DEWEY & LEBOEUF: Begins Review of Claims
DON SEALS: Voluntary Chapter 11 Case Summary
EASTMAN KODAK: Court Approves Deal to End Retiree Health Benefits
FENDER MUSICAL: Moody's Rates $245MM Sr. Secured Term Loan 'B2'
FENDER MUSICAL: S&P Affirms 'B' Corporate Credit Rating
FIRST PLACE: Seeks Approval to Sell Talmer Share for $45 Million
GARLOCK SEALING: Asbestos Committee Can Join Personal Injury Case
GENERAL MOTORS: Moody's Affirms 'Ba1' CFR/PDR; Outlook Positive
GENERAL MOTORS: S&P Assigns 'BB+' Corporate Credit Rating
HARPER BRUSH: To Auction Assets on November 19
HEMCON MEDICAL: Court Wants Plan Outline Amended by Nov. 30
HIGHLANDS GROUP: Court Rejects Bank's Case Dismissal Bid
HOVNANIAN ENTERPRISES: S&P Ups CCR to 'CCC+' on Stronger Liquidity
INDIANA STEEL: Gets Court OK to Sell Assets; Panel to File Plan
INSPIRATION BIOPHARMACEUTICALS: Case Summary & Creditors' List
JEFF HOULIK: 10th Cir. BAP Tackles Post-Confirmation Jurisdiction
JOHN HENRY: Moody's Affirms 'B2' Corp. Family Rating
LAND O'LAKES: Moody's Rates $250-Mil. Sr. Unsecured Notes 'Ba2'
LIGHTHOUSE IMPORTS: Selects DSI's Joseph Luzinski as CRO
LIGHTSQUARED INC: Hearing on LP Lenders' Motion to Resume Nov. 28
MERVYN'S LLC: $166 Million LBO Settlement Approved by Court
METROGAS SA: Court Wants US to Weigh in on Arbitrators' Authority
MF GLOBAL: To File Mass Claim Objections
MF GLOBAL: Customers Add PwC to Securities Class Action
MF GLOBAL: Customers File Consolidated Amended Class Action Suit
MICHAEL WOOD: Bankr. Court Has Jurisdiction to Issue Remand Order
MIDWEST MARKET: Market Square Shopping Center on Auction Block
MMM SO GOOD: Case Summary & 20 Largest Unsecured Creditors
NEW KENT COURTHOUSE: Colonial Virginia Bank Cancels Tenancy
NEWPAGE CORP: Wants to Access $850MM Financing From Goldman Sachs
NXA INC: Subject to TSX Continued Listing Review
ORIENTAL TRADING: Berkshire Deal No Impact on Moody's B2 Rating
PATRIOT COAL: To Shut Down Kentucky Mine by End of 2012
PATRIOT COAL: Notice of Transfer of Claim Entered Nov. 5
PETER PETER: Case Summary & 6 Unsecured Creditors
PETTINGILL ENTERPRISES: Claim Against Blackstone Still Alive
PLUM TV: To Halt Operations in 2013; Shuts Signal for Sun Valley
RANDANGO LLC: Case Summary & 7 Unsecured Creditors
RG STEEL: ArcelorMittal Pays $5.6 Million for Ore Pellets
RG STEEL: Secures $4.4-Mil. Bid for West Virginia Plant
ROYAL CARIBBEAN: S&P Keeps 'BB' Rating on $650M Senior Notes
SAN BERNARDINO, CA: Skips Payments to Calpers, Suppliers
SATCON TECHNOLOGY: Hires Greenberg Traurig, Milner Casgrain
SELECT MEDICAL: Dividend No Impact Impact on Moody's 'B1' CFR
SERVICE CORP: Moody's Rates $200MM Senior Unsecured Notes 'Ba3'
SERVICE CORP: S&P Keeps 'BB' Corp. Credit Rating & Stable Outlook
SERVICEMASTER CO: Disaster Recovery No Impact on Moody's B2 CFR
SMF ENERGY: Hearing to Confirm Amended Liquidation Plan on Dec. 14
SOLYNDRA LLC: District Court Won't Stay Implementation of Plan
SUPERMEDIA INC: Updates Creditors on Credit Situation
TEMPUR-PEDIC INT'L: Moody's Assigns 'B1' CFR; Outlook Stable
TERRESTAR CORP: Wins OK of 100% Plan for Unsecured Creditors
TEXAS RANGERS: Partners Want Ex-Owner to Unveil Capital Sources
TG INVESTMENTS: Case Summary & 5 Largest Unsecured Creditors
THQ INC: Hiring Centerview Partners to Explore Financing Options
ULTIMATE TRANSPORT: Files for Chapter 11 Bankruptcy Protection
VANN'S INC: Business Sold for $4.5 Million
VERTIS HOLDINGS: Court Approves Sale Procedures
WASHINGTON MUTUAL: Deutsche Says Noteholders Don't Belong in Suit
WASHINGTON MUTUAL: To Make Distribution to Trust Beneficiaries
WINNER, LLC: Case Summary & 4 Unsecured Creditors
WOLVERINE PLASTICS: Case Summary & 11 Largest Unsecured Creditors
* Moody's Says Tax Hike Credit Neg. for Cigarette Manufacturers
* Bankrupt's Misconduct Is No Bar to Suit by Trustee
* Nontraditional Families Lose Benefits in Missouri
* Social Security Benefits Not for Creditor Payments
* Undistributed Money in Ch. 13 Goes to Bankrupt in Ch. 7
* Bankruptcies Continue Downward Trend in October
* Money Coming Back From Distressed Debt Trading
* Two Bank Failures Bring Year's Total to 49
* Z Capital Promotes 4 to Senior Managing Director & Partner
* Upcoming Meetings, Conferences and Seminars
*********
9439 LLC: Chapter 11 Case Summary & 3 Unsecured Creditors
---------------------------------------------------------
Debtor: 9439, LLC
9201 Colesville Road
Silver Spring, MD 20910
Bankruptcy Case No.: 12-29627
Chapter 11 Petition Date: October 29, 2012
Court: U.S. Bankruptcy Court
District of Maryland (Greenbelt)
Judge: Thomas J. Catliota
Debtor's Counsel: Richard H. Gins, Esq.
THE LAW OFFICE OF RICHARD H. GINS, LLC
3 Bethesda Metro Center, Suite 530
Bethesda, MD 20814
Tel: (301) 718-1078
Fax: (301) 718-8359
E-mail: richard@ginslaw.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 three unsecured creditors is
available for free at:
http://bankrupt.com/misc/mdb12-29627.pdf
The petition was signed by Helene Athena Gioldasia, managing
member.
A123 SYSTEMS: Has Interim Approval of Wanxiang DIP Loan
-------------------------------------------------------
A123 Systems Inc. and its debtor-affiliates on Monday won interim
Court authority to obtain up to $50 million in postpetition
secured financing from Wanxiang America Corporation, acting as
agent for itself as lender.
A portion of the loan proceeds will be used to pay the funds
advanced under A123's DIP loan with Johnson Controls Inc.
The Interim DIP Order provides Wanxiang with unqualified right to
credit bid the amount relating to principal and accrued interest
under the DIP Loan pursuant to 11 U.S.C. Sec. 363; a plan of
reorganization or plan of liquidation; or a sale or disposition by
a Chapter 7 trustee.
Wanxiang provided a $22.5 million loan before bankruptcy. Under
the DIP loan, A123 is required to reimburse legal fees and
expenses of Wanxiang, as prepetition lender, including to its
counsel, Sidley Austin LLP, Young Conaway Stargatt & Taylor LLP,
and AllBright Law Offices, the lender's Chinese counsel; and
Carnegie Hudson Resources LLC, the lender's financial advisor.
The fees and disbursements will be equal to $250,000.
A final hearing on the Wanxiang DIP facility is set for Nov. 26.
Johnson Controls had been given interim approval by the bankruptcy
court on Oct. 18 to loan $15.5 million for what was to have been a
$72.5 million loan. Johnson Controls has said it decided to
withdraw as lender so there wouldn't be a fight over financing.
Meanwhile, there's a hearing Nov. 8 at 9:00 a.m. on the Debtors'
proposed bidding procedures. The Debtors want competing bids to
be submitted by Nov. 16, followed by an auction on Nov. 19 and a
hearing to approve the sale on Nov. 26. If there no other offers,
Johnson Controls will buy the business for $125 million in cash,
plus the cost of curing defaults on contracts.
The U.S. Trustee, Fisker Automotive Inc., Massachusetts Clean
Energy Technology Center, the Official Committee of Unsecured
Creditors, and Wanxiang America Corp. have filed limited
objections to the proposed sale and bidding procedures. Smith
Electric Vehicles US Corp. also has filed a joinder to Fisker's
objection. Informal responses also have been filed by the
Department of Energy, Welsh Romulus, Boston Properties and a
prospective purchaser.
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. JCI is represented in the case by Josh Feltman, Esq., at
Wachtell Lipton Rosen & Katz LLP.
An official committee of unsecured creditors has been appointed in
the case. The Committee is represented by:
William R. Baldiga, Esq.
BROWN RUDNICK LLP
Seven Times Square
New York, NY 10036
- and -
Mark Minuti, Esq.
SAUL EWING LLP
222 Delaware Avenue, Suite 1200
PO Box 1266
Wilmington, DE 19899
A123 SYSTEMS: Creditor Proposes Ethical Wall to Continue Trading
----------------------------------------------------------------
Aristeia Master LP , which has recently been appointed to the
official committee of unsecured creditors in the Chapter 11 cases
of A123 Systems Inc. and its debtor-affiliates, has filed papers
in Court seeking permission to continue trading in certain
securities of the Debtors, subject to the establishment of so-
called ethical wall, or information blocking policies and
procedures.
Aristeia said that, although members of the Committee owe
fiduciary duties to the Debtors' creditors, it also has fiduciary
duties to its customers and equity holders to maximize returns
through trading securities and other financial interests.
Aristeia will ask the Court at a hearing on Nov. 8 at 10:00 a.m.
to hold that it will neither violate its duties as committee
member nor subject its claims against or interests in the Debtors
to possible disallowance, subordination or othr adverse treatment
or incur any liabilitiy to the Debtors or their estates by trading
in, buying, selling or otherwise engaging in transactions
involving A123's 2011 3.75% Convertible Subordinate Notes, 2012
Senior Convertible Notes and 2012 Senior Note Warrants or A123's
preferred or common stock during the duration of the Chapter 11
cases.
Aristeia is represented in the case by:
Mark E. Felger, Esq
COZEN O'CONNOR
1201 N. Market St., Ste. 1001
Wilmington, DE 19801
Tel: 302-295-2000
Fax: 302-295-2013
- and -
Jeffrey W. Levitan, Esq.
PROSKAUER ROSE LLP
Eleven Times Square
New York, NY 10036-8299
Tel: 212-969-3000
Fax: 212-969-2900
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. JCI is represented in the case by Josh Feltman, Esq., at
Wachtell Lipton Rosen & Katz LLP.
An official committee of unsecured creditors has been appointed in
the case. The Committee is represented by:
William R. Baldiga, Esq.
BROWN RUDNICK LLP
Seven Times Square
New York, NY 10036
- and -
Mark Minuti, Esq.
SAUL EWING LLP
222 Delaware Avenue, Suite 1200
PO Box 1266
Wilmington, DE 19899
A123 SYSTEMS: Keeps Bonus Program Participants A Secret
-------------------------------------------------------
Two days before the Nov. 8 hearing on its proposed bonus program,
A123 Systems Inc. is seeking Court permission to file under seal
the list of the participants in the key employee incentive plan
and key employee retention plan. A123 said it intends to protect
the privacy of the participants and avoid any impact on employee
morale.
The KEIP intends to provide incentives to certain key employees to
work towards successful sales of the Debtors' assets at a
specified level and to preserve and enhance the Debtors' financial
condition through the course of the sales process. The KERP is
intended to assist the Debtors in retaining employees necessary to
maintain business operations and fulfill their obligations as they
endeavor to maximize value through a successful sale process.
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. JCI is represented in the case by Josh Feltman, Esq., at
Wachtell Lipton Rosen & Katz LLP.
An official committee of unsecured creditors has been appointed in
the case. The Committee is represented by:
William R. Baldiga, Esq.
BROWN RUDNICK LLP
Seven Times Square
New York, NY 10036
- and -
Mark Minuti, Esq.
SAUL EWING LLP
222 Delaware Avenue, Suite 1200
PO Box 1266
Wilmington, DE 19899
A123 SYSTEMS: Has 7-Member Official Creditors Committee
-------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that A123 Systems Inc. has an official committee of seven
unsecured creditors appointed on Nov. 2 by the U.S. Trustee in
Delaware. Members include an indenture trustee and investors
Hudson Bay Capital Management LLC and Aristeia Master Fund LP.
Customer Fisher Automotive Inc. is on the panel along with three
suppliers, including BAE Systems Controls Inc.
According to the report, Chinese auto-parts maker Wanxiang Group
Corp. is vying to displace Johnson Controls Inc. as the buyer of
A123 in an auction that may take place as soon as Nov. 19. The
bankruptcy judge was scheduled to hold a hearing Nov. 5 to settle
on sale procedures. JCI is already under contract to buy A123 for
$125 million in cash plus the cost of curing defaults on
contracts. Wanxiang says it may pay more and purchase additional
assets. Wanxiang already has displaced JCI as the provider of a
loan supporting the Chapter 11 effort. Monday's hearing will
consider approval of the $50 million loan from Wanxiang, which
made a $22.5 million loan before bankruptcy.
The report relates that the convertible subordinated notes last
traded on Nov. 2 for 48.5 cents on the dollar, according to Trace,
the bond-price reporting system of the Financial Industry
Regulatory Authority. The notes have more than doubled in value
compared with trades on the day of bankruptcy.
The Committee is represented by:
William R. Baldiga, Esq.
BROWN RUDNICK LLP
Seven Times Square
New York, NY 10036
- and -
Mark Minuti, Esq.
SAUL EWING LLP
222 Delaware Avenue, Suite 1200
PO Box 1266
Wilmington, DE 19899
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. JCI is represented in the case by Josh Feltman, Esq., at
Wachtell Lipton Rosen & Katz LLP.
A123 SYSTEMS: Senators Seek Review of Wanxiang Bid
--------------------------------------------------
Brian Mahoney at Bankruptcy Law360 reports that two Republican
senators asked U.S. Treasury Secretary Timothy Geithner to review
China's Wanxiang Group Corp.'s proposed acquisition of the
bankrupt government-funded battery maker A123 Systems Inc., saying
Wanxiang's interest in the company raises national security
concerns and may shortchange American taxpayers.
Wanxiang's bid to become the stalking horse bidder in A123's
bankruptcy and its recent offer of a $50 million debtor-in-
possession loan to the company should raise flags in the
Treasury's Committee on Foreign Investment in the United States,
Bankruptcy Law360 relates.
Lance Duroni at Bankruptcy Law360 reports that Wanxiang Group has
won court approval Monday to fund A123 Systems' bankruptcy with a
$50 million loan as the Chinese auto parts giant prepares a
controversial bid for the government-funded battery maker's
assets.
At a hearing in Wilmington, Del., U.S. Bankruptcy Judge Kevin J.
Carey cleared the debtor-in-possession loan, which replaces
financing from Johnson Controls Inc., the stalking horse bidder
that has offered $125 million for A123's core electric car battery
business, Bankruptcy Law360 relates.
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. JCI is represented in the case by Josh Feltman, Esq., at
Wachtell Lipton Rosen & Katz LLP.
An official committee of unsecured creditors has been appointed in
the case. The Committee is represented by:
William R. Baldiga, Esq.
BROWN RUDNICK LLP
Seven Times Square
New York, NY 10036
- and -
Mark Minuti, Esq.
SAUL EWING LLP
222 Delaware Avenue, Suite 1200
PO Box 1266
Wilmington, DE 19899
AFA FOODS: Resisting Liquidation Sought by Workers
--------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that AFA Foods Inc. will know at the conclusion of a
Nov. 20 hearing whether the company will have three more months to
craft a liquidating plan or the Chapter 11 reorganization will be
converted to Chapter 7 where a trustee is appointed automatically.
The report recounts that last month the bankruptcy court in
Delaware refused to approve a settlement that would have given
releases to Yucaipa Cos. LLC, the owner and junior lender. AFA
said in a court filing last week that it is "on the verge of a
revised global settlement that will afford an enhanced return to
its administrative and priority creditors."
Meanwhile, former workers who were fired without required notice
filed a motion requesting conversion to a Chapter 7 liquidation.
The conversion motion is set for hearing on Nov. 20, the same day
as AFA's motion for a three-month expansion of exclusive plan-
filing rights. AFA contends the workers seek conversion as a
litigation tactic to force settlement of their claims for being
fired without notice. The workers say they have more than $4
million in claims against AFA and Yucaipa for violation of so-
called WARN laws.
AFA described how the official unsecured creditors' committee
"leveraged meaningful concessions" from second-lien lenders.
About AFA Foods
King of Prussia, Pennsylvania-based AFA Foods Inc. was one of the
largest processors of ground beef products in the United States.
The Company had five processing facilities and two ancillary
facilities across the country with annual processing capacity of
800 million pounds. AFA had seven facilities capable of producing
800 million pound of ground beef annually. Revenue in 2011 was
$958 million.
Yucaipa Cos. acquired the business in 2008 and currently owns 92%
of the common stock and all of the preferred stock.
AFA Foods, AFA Investment Inc. and other affiliates filed for
Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-11127) on
April 2, 2012, after recent changes in the market for its ground
beef products and the impact of negative media coverage related to
boneless lean beef trimmings -- BLBT -- affected sales.
Judge Mary Walrath presides over the case. Lawyers at Jones Day
and Pachulski Stang Ziehl & Jones LLP serve as the Debtors'
counsel. FTI Consulting Inc. serves as financial advisors and
Imperial Capital LLC serves as marketing consultants. Kurtzman
Carson Consultants LLC serves as noticing and claims agent.
As of Feb. 29, 2012, on a consolidated basis, the Debtors' books
and records reflected approximately $219 million in assets and
$197 million in liabilities. AFA Foods, Inc., disclosed
$615,859,574 in assets and $544,499,689 in liabilities as of the
Petition Date.
Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed seven
members to the official committee of unsecured creditors in the
Chapter 11 cases of AFA Investment Inc., AFA Foods and their
debtor-affiliates. The Committee has obtained approval to hire
McDonald Hopkins LLC as lead counsel and Potter Anderson &
Corroon LLP serves as co-counsel. The Committee also obtained
approval to retain J.H. Cohn LLP as its financial advisor, nunc
pro tunc to April 13, 2012.
AFA, in its Chapter 11 case, sold plants and paid off the first-
lien lenders and the loan financing the Chapter 11 effort.
Remaining assets are $14 million cash and the right to file
lawsuits.
General Electric Capital Corp. and Bank of America Corp. provided
about $60 million in DIP financing. The loan was paid off in
July.
Yucaipa, the owner and junior lender, has agreed to a settlement
that would generate cash for unsecured creditors under a
liquidating Chapter 11 plan. Under the deal, Yucaipa will receive
$11.2 million from the $14 million, with the remainder earmarked
for unsecured creditors. Asset recoveries above $14 million will
be split with Yucaipa receiving 90% and creditors 10%. Proceeds
from lawsuits will be divided roughly 50-50.
In return, Yucaipa will receive release from claims and lawsuits
the creditors might otherwise bring. An affiliate of Yucaipa has
a $71.6 million second lien and would claim the remaining assets
absent settlement.
AHERN RENTALS: Court Extend Plan Filing Deadline to November 30
---------------------------------------------------------------
Tim O'Reiley at Las Vegas Review-Journal reports U.S. Bankruptcy
Court Judge Bruce Beesley extended the deadline for Ahern Rentals
Inc. to file a plan of reorganization to Nov. 30, 2012. The
Company was set to file its plan on Oct. 31, 2012.
According to the report, Ahern attorney William Noall said the
company had spent much of this year selecting and installing a new
performance management software system that is key to predicting
how the company will perform in the future.
The report notes that a critical part of emerging from Chapter 11
is convincing the bankruptcy court that Ahern has the financial
resources to fulfill the promises in a plan and not revert to
defaults.
The report relates the software work was finished on Oct. 15 and
now the company is testing it to ensure it cranks out accurate
numbers.
The report says the company has operated profitably, with the
earnings before interest, taxes, depreciation and amortization, a
standard benchmark, running at $101.4 million for the year through
September, 11.7% ahead of budget.
According to the report, three groups of lenders holding about
$335 million in debt complained that Ahern's strategy has been to
drag out the case as long as possible, hoping that improved
results will allow it to force losses on the lenders and keep Don
Ahern as the 97% owner.
About Ahern Rentals
Founded in 1953 with one location in Las Vegas, Nevada, Ahern
Rentals Inc. -- http://www.ahern.com/-- now offers rental
equipment to customers through its 74 locations in Arizona,
Arkansas, California, Colorado, Georgia, Kansas, Maryland,
Nebraska, Nevada, New Jersey, New Mexico, North Carolina, North
Dakota, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee,
Texas, Utah, Virginia and Washington.
Ahern Rentals filed a voluntary Chapter 11 petition (Bankr. D.
Nev. Case No. 11-53860) on Dec. 22, 2011, after failing to obtain
an extension of the Aug. 21, 2011 maturity of its revolving credit
facility. Judge Bruce T. Beesley presides over the case. Lawyers
at Gordon Silver serve as the Debtor's counsel. The Debtor's
financial advisors are Oppenheimer & Co. and The Seaport Group.
Kurtzman Carson Consultants LLC serves as claims and notice agent.
Counsel to Bank of America, as the DIP Agent and First Lien Agent,
are Albert M. Fenster, Esq., and Marc D. Rosenberg, Esq., at Kaye
Scholer LLP, and Robert R. Kinas, Esq., at Snell & Wilmer.
Attorneys for the Majority Term Lenders are Paul Aronzon, Esq.,
and Robert Jay Moore, Esq., at Milbank, Tweed, Hadley & McCloy
LLP. Counsel for the Majority Second Lienholder are Paul V.
Shalhoub, Esq., Joseph G. Minias, Esq., and Ana M. Alfonso, Esq.,
at Willkie Farr & Gallagher LLP. Attorney for GE Capital is James
E. Van Horn, Esq., at McGuirewoods LLP. Wells Fargo Bank is
represented by Andrew M. Kramer, Esq., at Otterbourg, Steindler,
Houston & Rosen, P.C. Allan S. Brilliant, Esq., and Glenn E.
Siegel, Esq., at Dechert LLP argue for certain revolving lenders.
Attorneys for U.S. Bank National Association, as successor to
Wells Fargo Bank, as collateral agent and trustee for the benefit
of holders of the 9-1/4% Senior Secured Notes Due 2013 under the
Indenture dated Aug. 18, 2005, is Kyle Mathews, Esq., at Sheppard,
Mullin, Richter & Hampton LLP and Timothy Lukas, Esq., at Holland
& Hart.
In its schedules, the Debtor disclosed $485.8 million in assets
and $649.9 million in liabilities.
The Official Committee of Unsecured Creditors has tapped Covington
& Burling LLP as counsel, Downey Brand LLP as local counsel, and
FTI Consulting as financial advisor.
ALLIED SYSTEMS: Creditors Object to Yucaipa's Role in Ch. 11
------------------------------------------------------------
Jamie Santo at Bankruptcy Law360 reports that creditors of Allied
Systems Holdings Inc. launched an omnibus objection in Delaware
bankruptcy court Thursday claiming a trifecta of the debtors'
recent pleadings are part of a continued attempt by private equity
firm Yucaipa Cos. LLC to manipulate the car hauler's fate.
About Allied Systems
BDCM Opportunity Fund II, LP, Spectrum Investment Partners LP, and
Black Diamond CLO 2005-1 Adviser L.L.C., filed involuntary
petitions for Allied Systems Holdings Inc. and Allied Systems Ltd.
(Bankr. D. Del. Case Nos. 12-11564 and 12-11565) on May 17, 2012.
The signatories of the involuntary petitions assert claims of at
least $52.8 million for loan defaults by the two companies.
Allied Systems, through its subsidiaries, provides logistics,
distribution, and transportation services for the automotive
industry in North America.
Allied Holdings Inc. previously filed for chapter 11 protection
(Bankr. N.D. Ga. Case Nos. 05-12515 through 05-12537) on July 31,
2005. Jeffrey W. Kelley, Esq., at Troutman Sanders, LLP,
represented the Debtors in the 2005 case. Allied won confirmation
of a reorganization plan and emerged from bankruptcy in May 2007
with $265 million in first-lien debt and $50 million in second-
lien debt.
The petitioning creditors said Allied has defaulted on payments of
$57.4 million on the first lien debt and $9.6 million on the
second. They hold $47.9 million, or about 20% of the first-lien
debt, and about $5 million, or 17%, of the second-lien obligation.
They are represented by Adam G. Landis, Esq., and Kerri K.
Mumford, Esq., at Landis Rath & Cobb LLP; and Adam C. Harris,
Esq., and Robert J. Ward, Esq., at Schulte Roth & Zabel LLP.
Allied Systems Holdings Inc. formally put itself and 18
subsidiaries into bankruptcy reorganization June 10, 2012,
following the filing of the involuntary Chapter 11 petition.
The Company is being advised by the law firms of Troutman Sanders,
Gowling Lafleur Henderson, and Richards Layton & Finger.
The bankruptcy court process does not include captive insurance
company Haul Insurance Limited or any of the Company's Mexican or
Bermudan subsidiaries. The Company also announced that it intends
to seek foreign recognition of its Chapter 11 cases in Canada.
An official committee of unsecured creditors has been appointed in
the case. The Committee consists of Pension Benefit Guaranty
Corporation, Central States Pension Fund, Teamsters National
Automobile Transporters Industry Negotiating Committee, and
General Motors LLC. The Committee is represented by Sidley Austin
LLP.
ALTSOURCE PORTFOLIO: S&P Assigns 'B+' Counterparty Credit Rating
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' long-term
counterparty credit rating to Altisource Portfolio Solutions S.A.
(Altisource; NASDAQ: ASPS). The outlook is stable.
"At the same time, we assigned an issue-level rating of 'BB-',
with a recovery rating of '2', to Altisource Solutions S.a.r.l.'s
$200 million senior secured debt issue. The debt is guaranteed by
Altisource Portfolio Solutions S.A.," S&P said
"Our ratings on Altisource Portfolio Solutions reflect the firm's
concentration in serving the cyclical mortgage industry and
customer concentration with respect to the firm's former parent,
Ocwen Financial Corp. (B/Stable/--)," S&P said.
"We believe management's investment in expanding three business
lines while divesting two subsidiaries could temper earnings and
entail operational risks," said Standard & Poor's credit analyst
Jeffrey Zaun. "Positive rating factors include strong, high-
quality earnings, a strategy of operating with minimal balance
sheet risk, and a solid funding base."
Altisource provides services that are typically outsourced by
mortgage originators and mortgage servicers.
AMERICAN AIRLINES: Closer to Labor Contract With Pilots
-------------------------------------------------------
American Airlines Inc. and its pilots may be close to an
agreement on a new labor contract, according to a November 6
report by ABC 4.
A message Sunday to Allied Pilots Association members says
negotiators recently finalized contract language to the point
that there are only a handful of open paragraphs. The issues
include pay raises, furlough protection and limits on American
Airlines' ability to use smaller planes, ABC 4 reported.
Negotiators for the pilots' union said they hope to present a
deal to the union's board of directors this week, according to
the report.
Last week, APA said a labor deal could be close if American
Airlines is willing to make certain key concessions. The union
also said it wants a contract on par with other major carriers,
namely Delta Air Lines, on issues such as pay, Reuters reported.
On October 21, the union announced that AMR Corp., the parent of
American Airlines, had agreed to certain concessions including
improvements to disability plans and a one-year moratorium on
closing pilot bases. Major items, however, remain unresolved,
most notably pay rates and outsourcing work to pilots not
represented by the union.
APA also said getting a deal would guarantee the pilots' group a
13.5% equity stake in a reorganized AMR, and that labor peace
would give the union more influence in talks between AMR and its
creditors over how the company would emerge from bankruptcy,
Reuters reported.
The sides have been in talks on a labor deal since 2006. The
union voted down a tentative agreement in August but its board
went back to the negotiating table earlier this month after
September flight cancellations and delays that American Airlines
blamed on a slowdown campaign by pilots.
In another development, American Airlines' passenger service
agents will vote December 4 to January 15 on union representation
by the Communications Workers of America, according to a report
by The Dallas Morning News.
About American Airlines
AMR Corp. and its subsidiaries including American Airlines, the
third largest airline in the United States, filed for bankruptcy
protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan
on Nov. 29, 2011, after failing to secure cost-cutting labor
agreements.
AMR, previously the world's largest airline prior to mergers by
other airlines, is the last of the so-called U.S. legacy airlines
to seek court protection from creditors.
American Airlines, American Eagle and the AmericanConnection
carrier serve 260 airports in more than 50 countries and
territories with, on average, more than 3,300 daily flights. The
combined network fleet numbers more than 900 aircraft.
The Company reported a net loss of $884 million on $18.02 billion
of total operating revenues for the nine months ended Sept. 30,
2011. AMR recorded a net loss of $471 million in the year 2010, a
net loss of $1.5 billion in 2009, and a net loss of $2.1 billion
in 2008.
AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion
in total assets, $29.55 billion in total liabilities, and a
$4.83 billion stockholders' deficit.
Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the
Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law
Group, Chartered, are on board as special counsel. Rothschild
Inc., is the financial advisor. Garden City Group Inc. is the
claims and notice agent.
Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and
Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP
serve as counsel to the Official Committee of Unsecured Creditors
in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the
co-counsel for conflicts and other matters; Moelis & Company LLC
is the investment banker, and Mesirow Financial Consulting, LLC,
is the financial advisor.
Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by AMR Corp. and its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000).
AMERICAN AIRLINES: TWU Blocking Bid to Reject Dispatchers' Deal
---------------------------------------------------------------
The Transport Workers Union of America is blocking efforts by
American Eagle Airlines Inc. and Executive Airlines Inc. to have
their current labor contract with dispatchers cancelled.
In a court filing, the union said the concessions sought by the
companies' June 22 proposal are not necessary for restructuring.
The companies have "significantly and improperly overstated" the
amount of concessions, which they require to eliminate the
alleged labor cost gap of about $700,000 they attribute to
dispatchers, according to TWUA's lawyer, Sharon Levine, Esq., at
Lowenstein Sandler PC, in Roseland, New Jersey.
"The company's continued insistence on asking for wage reductions
and other items is simply not necessary to meet the company's
stated goal of eliminating its purported dispatch labor cost
gap," Ms. Levine said.
In a related development, the companies withdrew their motion to
cancel their labor contracts covering mechanics and ground school
instructors. The move comes after the groups agreed for the
ratification of the labor contracts with the companies.
The motion was filed in September after the mechanics voted to
reject an agreement proposed by American Eagle and after the
company failed to reach an agreement with the ground school
instructors.
About American Airlines
AMR Corp. and its subsidiaries including American Airlines, the
third largest airline in the United States, filed for bankruptcy
protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan
on Nov. 29, 2011, after failing to secure cost-cutting labor
agreements.
AMR, previously the world's largest airline prior to mergers by
other airlines, is the last of the so-called U.S. legacy airlines
to seek court protection from creditors.
American Airlines, American Eagle and the AmericanConnection
carrier serve 260 airports in more than 50 countries and
territories with, on average, more than 3,300 daily flights. The
combined network fleet numbers more than 900 aircraft.
The Company reported a net loss of $884 million on $18.02 billion
of total operating revenues for the nine months ended Sept. 30,
2011. AMR recorded a net loss of $471 million in the year 2010, a
net loss of $1.5 billion in 2009, and a net loss of $2.1 billion
in 2008.
AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion
in total assets, $29.55 billion in total liabilities, and a
$4.83 billion stockholders' deficit.
Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the
Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law
Group, Chartered, are on board as special counsel. Rothschild
Inc., is the financial advisor. Garden City Group Inc. is the
claims and notice agent.
Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and
Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP
serve as counsel to the Official Committee of Unsecured Creditors
in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the
co-counsel for conflicts and other matters; Moelis & Company LLC
is the investment banker, and Mesirow Financial Consulting, LLC,
is the financial advisor.
Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by AMR Corp. and its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000).
AMERICAN AIRLINES: Opposes Marathon Bid for Examiner
----------------------------------------------------
AMR Corp. asked the U.S. Bankruptcy Court in Manhattan to deny
Marathon Asset Management LP's motion to appoint a bankruptcy
examiner who will investigate a deal between its two regional
carriers that took place in the weeks leading up to their
Chapter 11 filing.
Last month, the hedge fund manager sought the appointment of an
examiner who will look into American Airlines Inc.'s assumption
of $2.26 billion in debt. It was part of a deal the company made
with American Eagle Airlines Inc. to turn over Embraer jets
reportedly valued at $1.8 billion or $426 million lower than the
amount of debt assumed.
Marathon said the company may have received less in value than it
gave up when it assumed the $2.26 billion in liability on the
planes, and that there may be fraudulent transfer claims to bring
against the Brazilian lenders, Agencia Especial de Financiamento
Industrial and Banco Nacional de Desenvolvimento Economico e
Social.
AMR's lawyer, Alfredo Perez, Esq., at Weil Gotshal & Manges LLP,
in New York, argued that the motion is a "litigation tactic" by
Marathon to delay the approval of AMR's proposed settlement with
lenders.
The settlement was hammered out in connection with the
restructuring of the financing or the transfer of the Embraer
jets. The agreement, if approved by the bankruptcy court, would
cut the costs of operating the planes.
Mr. Perez said there are no "fraudulent transfer causes of
action" in connection with the pre-bankruptcy deal between the
regional airlines.
"Marathon has not carried its burden to prove that appointing an
examiner is in the best interests of creditors," Mr. Perez
further said. He also said that an outside examiner is not
necessary since the company as well as the committee representing
AMR unsecured creditors has conducted its own investigation of
the deal in question.
The appointment of an examiner also drew flak from the lenders
and groups representing AMR creditors, including the Official
Committee of Unsecured Creditors. They argued the request is
premature and that the hedge fund manager failed to support its
claim that there is a need for the appointment of an examiner.
Marathon Responds
In a court filing, Marathon stressed that an independent examiner
is appropriate even if U.S. bankruptcy law does not make it
mandatory.
The hedge fund manager said AMR and the committee "represent the
estates on both sides of the prepetition transaction."
"It is impossible for an investigation on behalf of both sides of
a transaction to arrive at an impartial determination of whether
one side or the other got the short end of the stick," Marathon
said.
Marathon also pointed out that the committee's investigation,
while not independent, arrived at the same conclusion reached by
the hedge fund manager in its objection to the proposed
settlement.
"Both the committee and Marathon believe that if the settlement
is approved, the order approving the settlement must create a
mechanism for American Airlines to seek redress among the debtors
for losses potentially suffered by American Airlines and its
creditors arising out of the prepetition transaction," the hedge
fund manager said in court papers.
A court hearing to consider approval of the request is scheduled
for November 8.
About American Airlines
AMR Corp. and its subsidiaries including American Airlines, the
third largest airline in the United States, filed for bankruptcy
protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan
on Nov. 29, 2011, after failing to secure cost-cutting labor
agreements.
AMR, previously the world's largest airline prior to mergers by
other airlines, is the last of the so-called U.S. legacy airlines
to seek court protection from creditors.
American Airlines, American Eagle and the AmericanConnection
carrier serve 260 airports in more than 50 countries and
territories with, on average, more than 3,300 daily flights. The
combined network fleet numbers more than 900 aircraft.
The Company reported a net loss of $884 million on $18.02 billion
of total operating revenues for the nine months ended Sept. 30,
2011. AMR recorded a net loss of $471 million in the year 2010, a
net loss of $1.5 billion in 2009, and a net loss of $2.1 billion
in 2008.
AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion
in total assets, $29.55 billion in total liabilities, and a
$4.83 billion stockholders' deficit.
Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the
Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law
Group, Chartered, are on board as special counsel. Rothschild
Inc., is the financial advisor. Garden City Group Inc. is the
claims and notice agent.
Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and
Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP
serve as counsel to the Official Committee of Unsecured Creditors
in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the
co-counsel for conflicts and other matters; Moelis & Company LLC
is the investment banker, and Mesirow Financial Consulting, LLC,
is the financial advisor.
Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by AMR Corp. and its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000).
AMERICAN AIRLINES: Wants Embraer Settlement Objections Overruled
----------------------------------------------------------------
AMR Corp. asked the U.S. Bankruptcy Court in Manhattan to
overrule objections to the settlement agreement related to the
restructuring of the financing or the transfer of Embraer jets
owned by American Airlines Inc.
Earlier, Marathon and the committee representing AMR's unsecured
creditors complained about the releases granted to Agencia
Especial de Financiamento Industrial and Banco Nacional de
Desenvolvimento, which financed the planes.
Alfredo Perez, Esq., at Weil Gotshal & Manges LLP, in New York,
clarified that the releases will be limited to fraudulent
transfer and similar claims against the Brazilian banks.
Mr. Perez also pointed out that the proposed settlement does not
provide for the release or waiver of inter-company claims among
AMR and its affiliated debtors.
"Marathon and the creditors' committee cannot establish that the
release against the financing parties is effectively a release of
inter-company claims," he said.
About American Airlines
AMR Corp. and its subsidiaries including American Airlines, the
third largest airline in the United States, filed for bankruptcy
protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan
on Nov. 29, 2011, after failing to secure cost-cutting labor
agreements.
AMR, previously the world's largest airline prior to mergers by
other airlines, is the last of the so-called U.S. legacy airlines
to seek court protection from creditors.
American Airlines, American Eagle and the AmericanConnection
carrier serve 260 airports in more than 50 countries and
territories with, on average, more than 3,300 daily flights. The
combined network fleet numbers more than 900 aircraft.
The Company reported a net loss of $884 million on $18.02 billion
of total operating revenues for the nine months ended Sept. 30,
2011. AMR recorded a net loss of $471 million in the year 2010, a
net loss of $1.5 billion in 2009, and a net loss of $2.1 billion
in 2008.
AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion
in total assets, $29.55 billion in total liabilities, and a
$4.83 billion stockholders' deficit.
Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the
Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law
Group, Chartered, are on board as special counsel. Rothschild
Inc., is the financial advisor. Garden City Group Inc. is the
claims and notice agent.
Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and
Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP
serve as counsel to the Official Committee of Unsecured Creditors
in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the
co-counsel for conflicts and other matters; Moelis & Company LLC
is the investment banker, and Mesirow Financial Consulting, LLC,
is the financial advisor.
Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by AMR Corp. and its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000).
AMERICAN DINING: Plans to Sell Hickory Restaurant for $250,000
--------------------------------------------------------------
Jamie Mason, writing for The Deal, reports that American Dining
Corp. said it intends to sell its assets to Hickory Restaurants
LLC and Pine Restaurants LLC for $250,000.
The report relates that Chief Judge Stephen Raslavich of the U.S.
Bankruptcy Court for the Eastern District of Pennsylvania in
Philadelphia will consider approval of bidding procedures for the
sale, but a hearing hasn't been scheduled.
According to the report, the proposed stalking-horse bidders have
offered $250,000 for the company's five Burger King restaurants,
two of which are in New Jersey and three in Pennsylvania. The
company's two Cosi restaurants are not included in the sale.
The report says, under the proposed bidding procedures, the
stalking-horse bidders would receive up to $25,000 in expense
reimbursement if they won't be the winning bidders at the auction.
Competing bidders would have to provide the company with a $25,000
deposit and initially bid $285,000. The initial overbid consists
of the stalking horse bid, the expense reimbursement and a $10,000
overbid. If American Dining receives at least one rival bid, it
will hold an auction, at which bids would first increase in
increments of at least $25,000. Subsequent bids would have to
increase in $10,000 increments.
The report, citing court documents, relates the stalking-horse
bidders are the landlords for four of the company's five Burger
King locations. The chairman of the proposed purchasers, James
Nasuti, is also a former business partner of the Debtor's sole
shareholder. Court papers did not specify which restaurants each
of the vehicles would purchase or a proposed timeline for the sale
process.
The report adds several parties have filed objections to the
bidding procedures. First Franchise Capital Corp., owed $1.38
million, asserted the Debtor's sale motion filed Oct. 25 was
premature since the Debtor filed for bankruptcy protection only
two days earlier.
The report relates American Dining filed for Chapter 11 with
Heritage Co. LP. Judge Raslavich on Oct. 26 approved joint
administration of the cases. The Debtor received interim approval
to use its cash collateral the same day. A final cash collateral
hearing is scheduled for Nov. 21. During its bankruptcy case,
American Dining will sell its assets, while Heritage will
reorganize.
Based in Penns Park, Pennsylvania, American Dining Corporation
filed for Chapter 11 protection on Oct. 23, 2012 (Bankr. E.D. Pa.
Case No. 12-19948). Myron A. Bloom at Myron A. Bloom LLC,
represents the Debtor. The Debtor listed assets between $100,000
and $500,000, and debts of between $1 million and $10 million.
AMERICAN REALTY: Lenders Want Case Dismissed or Transferred
-----------------------------------------------------------
Hayley Kaplan, writing for The Deal, reports that Atlantic XIII
LLC, Atlantic Midwest LLC, David M. Clapper, Atlantic Limited
Partnership XII and Regional Properties LP asked Judge Barbara
Ellis-Monro of the U.S. Bankruptcy Court for the Northern District
of Georgia to dismiss American Realty Trust's Chapter 11 case,
asserting that the case was a filed in bad faith.
According to the report, the lender group said American Realty
Trust's case was filed as a litigation tactic in a long-running
dispute with the Debtor's many equity holders and subsidiaries
pending in the federal courts for the Northern District of Texas,
which has been ongoing for more than 14 years. The lawsuits
involve numerous bankruptcies and collateral lawsuits between the
parties.
The lender group also said American Realty Trust had no assets and
no business that requires bankruptcy protection, therefore, there
is no prospect for reorganization.
The report notes Judge Ellis-Monro will weigh the dismissal motion
for the Dallas real estate company on Dec. 19, 2012.
The report relates, if the case is not dismissed, the creditors
want the Court to transfer American Realty Trust's case to the
U.S. Bankruptcy Court for the Northern District of Texas, where
the lawsuit is pending on appeal.
The report recounts a $73 million judgment resulted from
litigation with American Reality Trust subsidiary Art Midwest Inc.
that began in 1998. The litigation arose from Art Midwest's
alleged breach of a series of contracts related to the sale of
certain real estate from the lenders to the debtor. An initial
judgment in favor of Art Midwest was reversed by the Fifth Circuit
Court of Appeals and a second jury trial on Oct. 11, 2011,
resulted in the judgment.
The report says American Trust Realty has yet to respond to the
dismissal motion, but former equity holder American Reality
Investors said, "[the debtor] believes there were serious errors
in the judge's ruling and has filed an appeal of the judge's
ruling," in an Aug. 14 SEC filing. The status of the appeal is
unclear.
The report also notes Art Midwest sought Chapter 11 protection on
Jan. 27 in the U.S. Bankruptcy Court for the District of Nevada in
Las Vegas, but the lender group succeeded in dismissing the case
on Aug. 1. The lenders said American Realty Trust's parent
companies have put eight of its entities into bankruptcy
protection throughout the 14-year dispute. Four of the companies'
cases have been dismissed with motions filed by the lenders.
Dallas, Texas-based American Realty Trust, Inc., is a subsidiary
of the real estate giant American Realty Investors Inc. Coping
with a $73 million legal judgment from an apartment purchase that
collapsed more than a decade ago, American Realty Trust, Inc.,
filed for Chapter 11 protection (Bankr. D. Nev. Case No. 12-10883)
in Las Vegas on Jan. 26, 2012. The case was later dismissed on
Aug. 1 by Judge Mike K. Nakagawa. Creditors David M. Clapper,
Atlantic XIII, LLC, and Atlantic Midwest, LLC, sought the
dismissal, citing, among other things, the Debtor has been
stripped of assets prepetition and its ownership structure changed
10 days before the bankruptcy filing in an admitted effort to
avoid disclosures to the Securities and Exchange Commission.
American Realty Trust then filed for Chapter 11 protection (Bankr.
N.D. Ga. Case No. 12-71453) on Aug. 29, 2012. Bankruptcy Judge
Barbara Ellis-Monro presides over the case. Bryan E. Bates, Esq.,
and Gary W. Marsh, Esq. at McKenna Long & Aldridge, LLP represent
the Debtor in its restructuring effort. The petition was signed
by Steven A. Shelley, vice president.
AMERICAN SUZUKI: Files for Chapter 11, To Wind Down Operations
--------------------------------------------------------------
American Suzuki Motor Corporation plans to realign its business to
focus on the long-term growth of its Motorcycles/ATV and Marine
divisions. Following a thorough review of its current position
and future opportunities in the U.S. automotive market, ASMC will
wind down and discontinue new automobile sales in the continental
U.S. The Company has determined the best path to achieve this
realignment in an efficient and orderly manner is to restructure
its operations under chapter 11. The case will be filed in the
United States Bankruptcy Court, Central District of California in
Santa Ana.
Consistent with ASMC's long history of standing by its products,
owners of Suzuki automobiles will be protected. All warranties
will continue to be fully honored and automobile parts and service
will be provided to consumers without interruption through ASMC's
parts and service dealer network.
ASMC remains firmly committed to Motorcycles/ATV and Marine
products, and these divisions are competitively positioned in
their respective markets, allowing for long-term growth as
economic conditions improve. The realignment is intended to
better position ASMC for long-term success and is a return to the
Company's roots in the U.S. market, which began with motorcycles
and has grown to include ATV and marine products. ASMC remains
very proud of its high quality, high performance motorcycle, ATV
and Marine products. The Company will continue to bring ASMC
products to market, including its full lineup of sportbike,
cruiser, touring, scooter, dualsport, motocross, off-road
motorcycles and KingQuad ATV line, as well as its flagship
DF300AP, state-of-the-art DF20A, and DF15A, among other models.
Additionally, ASMC is working to further build its market share
through continued investment in additional support for dealers
through marketing and advertising activities and sales promotion.
Suzuki will continue to have a strong presence as a sponsor of
teams in supercross, outdoor motocross and road racing.
In evaluating its position in the highly regulated and competitive
U.S. automotive industry, ASMC determined that its Automotive
division was facing a number of serious challenges. These
challenges include low sales volumes, a limited number of models
in its line-up, unfavorable foreign exchange rates, the high costs
associated with growing and maintaining an automotive distribution
system in the continental U.S. and the disproportionally high and
increasing costs associated with stringent state and federal
regulatory requirements unique to the U.S. market. While the
decision to discontinue new automobile sales in the U.S. was
difficult to make, the actions were inevitable under these
circumstances. ASMC is dedicated to honoring its commitments to
Automotive customers through and after the wind down of new
automobile sales in the continental U.S.
An Orderly Process to Serve Consumers
ASMC intends to work within its current U.S. Automotive dealer
network to help structure a smooth transition from new automobile
sales to exclusively parts and service operations, or, in some
instances, an orderly wind down of dealership operations. ASMC
intends to market and sell its remaining U.S. automobile inventory
through its Automotive dealer network. Through and after the
restructuring, all warranties will be fully honored and automobile
parts and services will be provided to consumers through the
dealer network. ASMC intends to honor any automobile buyback
agreements that are currently in place with financial
institutions.
As part of its chapter 11 filings, ASMC will submit a proposed
Plan of Reorganization and Disclosure Statement that specifies how
the Motorcycle, ATV and Marine divisions will be maintained and
enhanced, and how its relationship with Automotive dealers will be
largely transitioned to support consumers and dealers through
continued parts and service operations. SMC or its nominee
intends to purchase ASMC's Motorcycle, ATV and Marine businesses,
as well as the Automotive service operation responsible for parts
and warranties, through a new U.S. subsidiary that will retain the
ASMC brand name.
ASMC believes it has sufficient cash on hand to operate its
businesses during the restructuring. If necessary, ASMC will
request permission from the Court to borrow additional funds from
SMC needed during the restructuring.
Honoring Commitments
ASMC intends to operate its Motorcycles/ATV and Marine businesses
as usual and is dedicated to completing the realignment process as
smoothly and efficiently as possible. ASMC will continue to fully
stand behind all of its products and honor all warranties from
these divisions. ASMC is working with GE Capital's Retail Finance
and Commercial Distribution Finance businesses to continue
providing motorcycles and ATV consumer financing programs and
motorcycle, ATV and marine dealer inventory financing
respectively. The Company expects existing agreements with other
dealer and consumer financing providers to continue as well.
ASMC has filed a series of first day motions requesting approval
to continue paying employee wages and benefits in the ordinary
course, offering dealer incentives and payments under customer
warranties. ASMC also expects to pay vendors in the normal course
of business for goods and services delivered on or after its
Nov. 5, 2012 filing. Payments for goods received before ASMC's
Nov. 5, 2012 filing will be made in accordance with the chapter 11
procedure.
SMC, the 100 percent interest holder in ASMC, is not a debtor in
the chapter 11 filing.
ASMC's legal advisor on the restructuring is Pachulski Stang Ziehl
& Jones LLP, and its financial advisor is FTI Consulting, Inc.
Nelson Mullins Riley & Scarborough LLP is serving as special
counsel on automobile dealer and industry issues. Further, ASMC
has proposed the appointment of M. Freddie Reiss, Senior Managing
Director at FTI Consulting, as Chief Restructuring Officer, and
has also added two independent Board members to assist it through
this period.
AMERICAN SUZUKI: Case Summary & 30 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: American Suzuki Motor Corporation
3251 East Imperial Highway
Brea, CA 92821
Bankruptcy Case No.: 12-22808
Type of Business: American Suzuki Motor Corporation is the
sole distributor of Suzuki vehicles in
the United States.
Chapter 11 Petition Date: Nov. 5, 2012
Court: U.S. Bankruptcy Court
Central District of California (Santa Ana)
Judge: Catherine E. Bauer
Debtor's
Counsel: Debra I. Grassgreen, Esq.
John W Lucas, Esq.
PACHULSKI STANG ZIEHL & JONES LLP
150 California St 15th Flr
San Francisco, CA 94111-4500
Tel: (415) 263-7000
Fax: (415) 263-7010
E-mail: dgrassgreen@pszyjw.com
jlucas@pszjlaw.com
Linda F Cantor, Esq.
PACHULSKI STANG ZIEHL & JONES LLP
10100 Santa Monica Blvd 13th Flr
Los Angeles, CA 90067
Tel: (310) 277-6910
Fax: (310) 201-0760
E-mail: lcantor@pszjlaw.com
Debtor's
Crisis
Manager
and
Financial
Advisor: FTI CONSULTING, INC.
Debtor's
Dealership
Counsel: NELSON MULLINS RILEY & SCARBOROUGH, LLP
Estimated Assets: $100 million to $500 million
Estimated Debts: $100 million to $500 million
The petition was signed by Takashi Iwatsuki, chairman of the
board.
American Suzuki's List of Its 30 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
AMERICAN SUZUKI Financing $891,000
FINANCIAL SERVICES
ATTN: Lee Ann Leduc
P.O. BOX 200, MC 482-
B15-B36
DETROIT, MI 48265-2000
Tel: (248) 373-7303
E-mail: LeeAnn.Leduc@ally.com
SHEFFIELD FINANCIAL, LLC Financing $841,835
ATTN: C. Edward Dobbs
c/o Parker Hudson Rainer &
Dobbs LLP 285 Peachtree
Center Avenue, NE, 1500
Marquis Two
ATLANTA, GA 30303
Tel: 4044205529
E-mail: ced@phrd.com
-and-
SHEFFIELD FINANCIAL, LLC
ATTN: James S. Rankin
c/o Parker Hudson Rainer &
Dobbs LLP 285 Peachtree
Center Avenue, NE, 1500
Marquis Two
ATLANTA, GA 30303
Tel: 4044205560
E-mail: jsr@phrd.com
-and-
SHEFFIELD FINANCIAL, LLC
ATTN: Russell S. Bogue, III
c/o Branch Banking and Trust
Company 271 17th Street, Suite
900
ATLANTA, GA 30363
Tel: 4044425175
E-mail: rbogue@bbandt.com
GE MONEY BANK Financing $299,998
ATTN: Larry J. Nyhan
c/o Sidley Austin LLP One South
Dearborn
CHICAGO, IL 60603
Tel: 312.853.7710
Fax: 312.853.7036
E-mail: lnyhan@sidley.com
-and
GE MONEY BANK
ATTN: Gabriel R. MacConaill
c/o Sidley Austin LLP 555 West
Fifth Street
LOS ANGELES, CA 90013
Tel: Gabriel R.
MacConaill2138966125
E-mail: gmacconaill@sidley.com
SILTANEN & PARTNERS Trade $214,918
ADVERTISING
ATTN: Todd Busch
353 CORAL CIRCLE
EL SEGUNDO, CA 90245
Tel: 310-321-5200
Fax: 310-986-6214
E-mail: todd.busch@siltanen.com
UNITED PARCEL SERVICE Trade $182,390
ATTN: Doreen Kim
25201 Paseo de Alicia
Laguna Hills , CA 92653
Tel: 310-673-7661
E-mail: kim.doreen@ups-scs.com
OGIO INTERNATIONAL Trade $134,585
ATTN: Sarah Alvarez
14926 SO PONY EXPRES
BLUFFDALE, UT 84065
Tel: 801-619-4100
Fax: 801-619-4190
E-mail: salvarez@ogio.com
GE COMMERCIAL Financing $97,609
DISTRIBUTION FINANCE
ATTN: Larry J. Nyhan
c/o Sidley Austin LLP One South
Dearborn
CHICAGO, IL 60603
Tel: 312.853.7710
Fax: 312.853.7036
E-mail: lnyhan@sidley.com
-and-
GE COMMERCIAL
DISTRIBUTION FINANCE
ATTN: Gabriel R. MacConaill
c/o Sidley Austin LLP 555 West
Fifth Street
LOS ANGELES, CA 90013
Tel: 2138966125
E-mail: gmacconaill@sidley.com
AMPORTS Trade $73,290
ATTN: Shelly Turner
2700 BROENING HIGHWAY
BALTIMORE, MD 21222
Tel: 904-751-4391
Fax: 904-751-1712
E-mail: STurner@amports.com
WACHOVIA MANAGEMENT Trade $57,142
CORPORATION
ATTN: Nancy Perry
MAIL CODE CA 6221 15750
ALTON PARKWAY
IRVINE, CA 92618
Tel: 3039875520
E-mail: nancy.perry@wachovia.com
ATC DRIVETRAIN, LLC. Trade $51,360
ATTN: Ava Ahhaitty
4690 SOLUTIONS CENTER
CHICAGO, IL 60677-4006
Tel: 405-577-9936
Fax: 405-577-9899
E-mail: aahhaitt@atcdrivetrain.com
ANSIRA Trade $43,421
ATTN: Mark Timann
8396 SOLUTIONS CENTER
CHICAGO, IL 60677-8003
Tel: 314-783-2499
Email: mark.tiemann@ansira.com
CORNERSTONE USA Trade $38,580
ATTN: Richard Swartzel
1899 TATE BLVD SE, SUITE
2110
HICKORY, NC 28602
Tel: 8284491144
Fax: 8284491144
Email: rswartzel@cornerstoneunited.com
SPX SERVICE SOLUTIONS Trade $33,280
ATTN: Mary Sabatini
P.O. BOX 406513
ATLANTA, GA 30384-6513
Tel: 714-597-8400
Fax: (800) 578-7375
Email: spx_inquiry@servicesolutions.spx.com
PACIFIC VEHICLE PROCESSORS Trade $24,874
ATTN: Jean Warren, accountant
5601 EDISON DR
OXNARD, CA 93033
Tel: 805-986-5733
Fax: 805-488-0656
E-mail: jean.warren@2wglobal.com
DIGITAL MOTORWORKS, INC Trade $23,000
ATTN: Justin Sanchez
24381 NETWORK PLACE
CHICAGO, IL 60661
Tel: 512-692-2451
Fax: 512-349-9366
E-mail: support@digitalmotorworks.com
CB RICHARD ELLIS, INC Trade $19,242
ATTN: Sandra Salvan
2125 EAST KATELLA AV
ANAHEIM, CA 92806
Tel: 949-725-8572
E-mail: sandra.salvan@cbre.com
COMERICA BANK Trade $18,775
ATTN: Aime Donlay
11155 GARLAND ROAD
DALLAS, TX 75218
Tel: 214-328-8555
Fax: 214-321-1475
BAKER BOTTS LLP Trade $18,417
ATTN: R. Stan Mortenson
1299 Pennsylvania Ave., NW
Washington, D.C. 20004-2400
Tel: 2026397979
Fax: 2025851092
E-mail: rstanmortenson@bakerbotts.com
AVAYA INC Trade $18,289
ATTN: Brad Jeffries
119 MARKET RIDGE DRI
RIDGELAND, MS 39157
Tel: 800-852-2436 x22203
E-mail: jeffries@Avaya.com
AUTO WAREHOUSING CO Trade $18,262
ATTN: Dianne Cooper
2810 MARSHALL AVE
TACOMA, WA 98421-3135
Tel: 253-719-1603
Fax: 523-922-7798
E-mail: dianec@autowc.com
NATIONAL CYCLE INC Trade $17,972
ATTN: Jeff Hall
37781 EAGLE WAY
CHICAGO, IL 60678-1377
Tel: 708-343-0400 ext 119
Fax: 708-343-0625
E-mail: jeffh@nationalcycle.com
IPSOS LOYALTY, INC. Trade $15,835
ATTN: Aleida Martinez
MORRIS CORPORATE CENTER 2
ONE UPPER POND ROAD BLDG D
PARSIPPANY, NJ 07054
CROSS COUNTRY MOTOR Trade $15,657
CLUB INC
ATTN: Michael Volpone
ONE CABOT ROAD
MEDFORD, MA 02155
Tel: 718-306-3393
Fax: 718-395-6706
E-mail: mvolpone@agero.com
PRECISION PROPELLER Trade $14,096
INDUSTRIES, INC
ATTN: Jennifer Booe
DEPT CH 14331
PALATINE, IL 60055-4331
Tel: 317-545-9080
Fax: 317-542-1176
E-mail: jennifer_booe@yamahamotor.com
RANDSTAD STAFFING Trade $12,941
SERVICES INC
ATTN: Jeanine Morgan
PO BOX 894217
LOS ANGELES, CA 90189-4217
Tel: 781-213-1542
Fax: 781-213-1520
E-mail: jeanine.morgan@randstadusa.com
EGR, INC Trade $11,033
ATTN: Kelly Lyons
4000 E GREYSTONE DRIVE
ONTARIO, CA 91761
Tel: 909-923-7075
Fax: 909-923-0945
E-mail: klyons@egrusa.com
SPECIALTY TRANSPORT, INC. Trade $10,614
ATTN: Aaron Hanson
6709 176TH AVE N.E.
REDMOND, WA 98052
Tel: 425-869-8519
Fax: 425-869-8450
E-mail: Ahanson@drivesti.com
RACER-X Trade $10,000
ATTN: Bryan Stealey
122 VISTA DEL RIO DR
MORGANTOWN, WV 26508
Tel: 3042840080 ext. 108
Email: bryan@racerxill.com /
bryan@racerxonline.com
ARIZONA UNCLAIMED Trade $9,800
PROPERTY SECTION
ATTN: Reporting Unit
1600 WEST MONROE
PHOENIX, AZ 85007-2650
Tel: 602-716-6031
Fax: 602-542-2089
E-mail: ReportingUnclaimedProperty@azdor.gov
THE PLASTICS GROUP, INC. Trade $9,118
ATTN: Misty Gomez
PO BOX 83049
CHICAGO, IL 60691-3010
Tel: 630-325-1210
E-mail: rellis@theplasticsgroup.net
APX GROUP: S&P Assigns 'B' Corp. Credit Rating; Outlook Stable
--------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' corporate
credit rating to Provo, Utah-based APX Group Holdings Inc. (a/k/a
Vivint). The outlook is stable.
"At the same time, we assigned a 'B' issue rating with a recovery
rating of '4' to the company's $925 million senior secured notes,
which indicates our expectation for 30% to 50% recovery for
lenders in the event of default," S&P said.
"We also assigned a 'CCC+' issue rating with a recovery rating of
'6' to the company's $380 million of senior unsecured notes, which
indicates our expectation for 0% to 10% recovery for lenders in
the event of default," S&P said.
"The company also plans to issue a $200 million superpriority
revolving facility, which we did not rate ($10 million of this
revolver will be funded at closing)," S&P said.
The rating on Vivint reflects the company's "weak" business risk
profile.
"The company has a second-tier position in a highly competitive
market with low barriers to entry," said Standard & Poor's credit
analyst Katarzyna Nolan. "Positive factors include a highly
recurring and rapidly growing revenue base, as well as below-
industry-average attrition rates."
The company's "highly leveraged" financial risk profile reflects
pro forma debt to EBITDA in the 8x area. "We adjust EBITDA
downward to reflect costs that the company has to incur to offset
attrition," S&P said.
"The stable outlook reflects Vivint's recurring and predictable
revenue base. It also reflects our expectation that the company
will maintain its competitive position in the residential alarm
monitoring industry and has the ability to reduce account creation
if needed," S&P said.
"An upgrade in the next 12 months is unlikely, given the company's
highly leveraged financial profile and our view that it will
continue using debt to finance growth rather than repay debt. We
could lower the rating if industry conditions cause the company's
cash flow and liquidity to deteriorate and the firm's financial
covenants under the revolving facility are stressed," S&P said.
Ratings List
New Ratings
APX Group Holdings Inc.
Corporate Credit Rating B/Stable/--
APX Group Inc.
Senior Secured
$925 mil notes B
Recovery Rating 4
Senior Unsecured
$380 mil notes CCC+
Recovery Rating 6
ASSET RESOLUTION: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Asset Resolution Corp
fka Ringside, Inc.
8507 Barstow
Lenexa, KS 66219
Bankruptcy Case No.: 12-22932
Chapter 11 Petition Date: October 29, 2012
Court: U.S. Bankruptcy Court
District of Kansas (Kansas City)
Judge: Robert D. Berger
Debtor's Counsel: Jeffrey A. Deines, Esq.
LENTZ CLARK DEINES, P.A.
9260 Glenwood
Overland Park, KS 66212
Tel: (913) 648-0600
Fax: (913) 648-0664
E-mail: jdeines@lcdlaw.com
Estimated Assets: $0 to $50,000
Estimated Debts: $1,000,001 to $10,000,000
A copy of the Company's list of its 20 largest unsecured creditors
filed with the petition is available for free at:
http://bankrupt.com/misc/ksb12-22932.pdf
The petition was signed by John Brown, CEO.
ATP OIL: Committee Files Motion for Standing Order to Sue
---------------------------------------------------------
BankruptcyData.com reports that ATP Oil & Gas' official committee
of unsecured creditors filed with the U.S. Bankruptcy Court a
motion for an order granting leave, standing and exclusive
authority to prosecute certain meritorious fraudulent transfer
causes of action under federal and applicable state law and
revocatory actions under state law, relating to certain overriding
royalty interests and net profit interests against persons that
purportedly received conveyances pre-petition.
The committee asserts, "The Court should grant the Committee such
standing because (a) the Avoidance Claims are colorable and
valuable to the Debtor's estate, and (b) the Debtor has declined
to prosecute them, but has consented to the relief sought in the
Motion. Furthermore, the Court should grant the Motion because
efficient prosecution of the Avoidance Claims by the Committee is
in the best interests of the Debtor's estate and its creditors,
and will ensure a fair and efficient administration of the
Debtor's estate."
The Court scheduled a Nov. 15, 2012 hearing on the matter.
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.
AVIS BUDGET: Moody's Rates $250-Mil. Senior Unsecured Notes 'B2'
----------------------------------------------------------------
Moody's Investors Service assigned a B2 rating to the $250 million
of senior unsecured notes of Avis Budget Car Rental LLC and Avis
Budget Finance, Inc. Moody's also affirmed the B1 Corporate Family
and Probability of Default ratings (CFR and PDR) of Avis Budget
Group Inc. (Avis), which is a guarantor of the notes. Avis'
Speculative Grade Liquidity Rating is unchanged at SGL-3. The
rating outlook is stable.
Proceeds of the notes will be used to repay outstanding senior
unsecured debt issued by Avis Budget Car Rental.
Ratings Rationale
Avis' B1 CFR is supported by the company's competitive position in
the North American car rental sector, the long-term benefits that
will likely result from its acquisition of Avis Europe and the
related expansion of its global footprint, and the progress it is
making in both improving domestic operating efficiencies and in
integrating Avis Europe. Notwithstanding these positive factors,
Avis faces a number of challenges. In North America these include
the gradual rise in fleet costs, and a competitive environment
that constrains price increases. In Europe, Avis must contend with
weakness in the region's economy, and the dampening impact this
will have on the previously-expected pace of growth provided by
Avis Europe.
Despite these operational challenges, Moody's expects that Avis
will be able to maintain credit metrics that support the B1 CFR.
For the last twelve months through June 2012 the company's key
metrics (reflecting Moody's standard adjustments) were:
EBIT/interest of 1.4x and debt/EBITDA of 4.7x.
There could be positive movement in the rating if Avis is
successful in expanding its margins through cost reductions and
capitalizing on potential Avis Europe synergies. Metrics that
could point toward upward rating action include EBIT/interest
sustained in the area of 2x and debt /EBITDA that can remain below
3.5x. An additional consideration in any upward movement in Avis'
rating will be the company's liquidity profile. Avis currently has
a cash position of $550 million and an undrawn $1.5 billion credit
facility that matures in 2016. This affords the company adequate
liquidity. Nevertheless, over the long-term the company will
remain dependent on continued annual access to the ABS market in
order to fund its domestic fleet purchases and the bank market to
support the Avis Europe fleet.
A final consideration for any rating upgrade will be Avis'
significant amount of corporate debt. Avis recognizes the
financial burden posed by its approximately $3 billion in
corporate debt (compared with $8.3 billion in fleet debt), and the
company has cited corporate-debt reductions as one of its ongoing
objectives.
The rating could come under pressure as a result of worsening
economic outlook for Europe or a significant slowdown in the US
economy. Credit metrics that could indicate downward rating
pressure include EBIT/interest remaining near 1x or debt/EBITDA
exceeding 4.5x.
The principal methodology used in rating Avis was the Global
Equipment and Automobile Rental Industry Methodology published in
December 2010. Other methodologies used include Loss Given Default
for Speculative-Grade Non-Financial Companies in the U.S., Canada
and EMEA published in June 2009.
AVIS BUDGET: S&P Gives 'B' Rating on $250MM Senior Unsecured Notes
------------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' issue-level
rating to Avis Budget Car Rental LLC's $250 million senior
unsecured notes due 2017. "We also assigned a '5' recovery rating
to this issue to indicate our expectation that lenders would
receive a modest (10%-30%) recovery of principal in the event of a
payment default. Avis Budget Finance Inc. is a co-issuer of the
notes. Avis Budget Car Rental LLC is the major operating
subsidiary of Avis Budget Group Inc. (B+/Stable/--). The company
will use proceeds to repay existing corporate debt," S&P said.
"The ratings on U.S.-based Avis Budget Group Inc. (parent of the
Avis and Budget car rental brands and the Budget consumer truck
rental brand) reflect the company's substantial debt, the price-
competitive and cyclical nature of on-airport car rentals, and its
significant amount of secured assets. The ratings also incorporate
the company's position as one of the largest global car rental
companies, the relatively stable cash flow the business generates,
and Standard & Poor's expectation that Avis Budget's operating
performance will continue to improve. We classify the company's
business risk profile as 'fair' and its financial profile as
'aggressive,' under our criteria," S&P said.
"The outlook is stable. We expect Avis Budget's credit metrics to
improve from 2011 levels, which included transaction costs and
incremental debt related to the Avis Europe acquisition. Over the
next year, we expect EBITDA interest coverage to increase to the
low-4x area from 3.3x in 2011, funds from operation (FFO) to debt
to approach 20% from 17%, and debt to EBITDA to decline to the
mid-4x area from 5.6x because of stronger revenues and cash flow
offsetting the incremental debt. We could raise the ratings if
benefits from the Avis Europe integration exceed expectations or
operating performance in Europe is stronger than we expect,
resulting in the adjusted EBIT margin improving to greater than
15% over a sustained period. However, we consider this scenario
unlikely until at least early 2013. We also believe a downgrade
is unlikely, but we could take such an action if industry
conditions weaken and integration benefits are not realized, or
economic conditions in Europe are weaker than we expect, causing
the adjusted EBIT margin to decline to below 10% and FFO to debt
to fall below the mid-teens percent area on a sustained basis,"
S&P said.
Ratings List
Avis Budget Car Rental LLC
Corporate credit rating B+/Stable/--
New Rating
Avis Budget Car Rental LLC
Avis Budget Finance Inc.
$250 mil sr unsecd notes due 2017 B
Recovery Rating 5
BALL GROUND: Commission Discusses Bankruptcy, Forensic Audit
------------------------------------------------------------
Cherokee Tribune reports that a special joint called meeting of
the Cherokee County Board of Commissioners and Cherokee County
Resource Recovery Development Authority was set for November 1 to
discuss the bankruptcy involving Ball Ground Recycling LLC and
possible new appointees for the authority.
According to the report, five county commissioners serve as the
members of the RRDA. The commission on Oct. 4 voted to place
three new members on the county-created authority that was
responsible for financing the failed recycling operation.
The report relates the meeting was called to discuss the status of
proposals from accounting firms for a forensic audit, according to
Commission Chairman Buzz Ahrens. The commission is planning to go
into a closed executive session to discuss potential litigation
and the bankruptcy with its attorney.
The report says bids for the forensic audit were received by the
commission on October 29.
The report says commissioners voted 5-0 in October to reconfigure
the Resource Recovery Development Authority board with a total of
five members appointed by the commission by July 1. Three of the
members are to be non-elected officials.
The report notes, in the meantime, the board will appoint the new
members initially as advisory members in January or when the
county has a new lease agreement for a new operator on the site
occupied by Ball Ground Recycling, whichever happens first, they
said at the meeting where the decision was reached.
About Ball Ground
Based in Canton, Georgia, Ball Ground Recycling, LLC, a wood
recycling company, filed for Chapter 11 protection (Bankr. N.D.
Ga. Case No. 12-63101) on May 25, 2012. Judge Margaret Murphy
presides over the case. Ragsdale, Beals, Seigler, Patterson &
Gray LLP serves as the Debtor's counsel. The Debtor scheduled $0
in assets and $2,422,921 in liabilities. It initially estimated
assets and debts of $10 million to $50 million in the Chapter 11
petition.
BERMUDA & THE BOULEVARD: Case Summary & Unsecured Creditor
----------------------------------------------------------
Debtor: Bermuda & The Boulevard, LLC
10777 W. Twain Avenue, Suite 225
Las Vegas, NV 89135
Bankruptcy Case No.: 12-23579
Chapter 11 Petition Date: October 29, 2012
Court: U.S. Bankruptcy Court
District of Arizona (Phoenix)
Judge: George B. Nielsen, Jr.
Debtor's Counsel: Michael W. Carmel, Esq.
MICHAEL W. CARMEL, LTD.
80 E. Columbus Avenue
Phoenix, AZ 85012-4965
Tel: (602) 264-4965
Fax: (602) 277-0144
E-mail: michael@mcarmellaw.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The petition was signed by Randy Black, Jr., manager.
The Company's list of its largest unsecured creditors filed with
the petition contains only one entry:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Arenoso Valle, II -- $5,700
BLUEJAY PROPERTIES: Wants to Resolve Civil Suit With Bank
---------------------------------------------------------
Pat Holohan, writing for The Deal, reports that apartment complex
owner Bluejay Properties LLC will head to a Dec. 19 hearing to
determine whether it can resolve a civil suit while it's in
Chapter 11.
The report says Judge Robert D. Berger of the U.S. Bankruptcy
Court for the District of Kansas will preside over the hearing,
which addresses a suit in the District Court of Douglas County,
Kan., between Bluejay and secured creditor University National
Bank.
According to the report, Bluejay filed a motion on Oct. 9 seeking
relief from the automatic Chapter 11 stay to allow the action to
continue. The hearing had been set for Oct. 26 before being
continued on Monday, Oct. 29, to December for unspecified reasons.
The report notes UNB on Sept. 23, 2011, sued Bluejay and John W.
and Mary S. Duncan, who own 82% of the Debtor via their company,
JMD LLC. UNB said the Duncans entered into a $1.76 million loan
agreement with the bank on Dec. 30, 2009, but defaulted on an
undetermined date. According to court documents, UNB seeks to
foreclose on some of Bluejay's property to satisfy its claim. The
Debtor owns the Quinton Point apartment complex in Junction City.
According to the report, complicating matters, however, is the
presence of two other secured creditors. Bankers' Bank of Kansas
NA is owed $13.1 million on a $15.2 million mortgage as successor
to UNB. Kaw Valley Bank, another secured creditor, has alleged
UNB made various fraudulent transfers when it held the loan,
including contributing funds to another bankrupt company, Big D
Development, to keep that company solvent.
The report adds KVB filed a declaration on Oct. 3 asserting UNB
has not complied with discovery requests. As the case is ongoing
and in dispute, the report says it is unclear what KVB, BBK or UNB
are owed. The companies dispute what claims they have against the
debtor and what the priority of those claims would be.
The report says KVB has alleged BBK and UNB have sought to
prohibit Bluejay's use of rents, as well as prevent it from
performing necessary maintenance on the property, forcing it to
file for bankruptcy and attempt to sell its assets despite having
90% of its apartment complex occupied.
According to the report, Bluejay said in its Oct. 1 cash
collateral motion that PHM Acquisition LLC has agreed to purchase
the complex for $16.95 million and that the Debtor seeks to
resolve its nonbankruptcy conflicts so it can sell the property.
About Bluejay Properties
Based in Junction City, Kansas, Bluejay Properties, LLC, doing
business as Quinton Point, filed a bare-bones Chapter 11 petition
(Bankr. D. Kan. Case No. 12-22680) in Kansas City on Sept. 28,
2012. Bankruptcy Judge Robert D. Berger presides over the case.
Todd A. Luckman, Esq., at Stumbo Hanson, LLP in Topeka.
The Debtor owns the Quinton Point Apartment Complex in Kansas City
valued at $17 million. The Debtor scheduled liabilities of
$13,112,325. Bankers' Bank of Kansas is owed $13.08 million,
secured by a first mortgage on the property. The petition was
signed by Michael L. Thomas of TICC Prop., managing member.
BORDERS GROUP: Creditors to Receive $75 Million Distribution
------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that unsecured creditors of liquidated bookseller Borders
Group Inc. in short order will be receiving a $75 million
distribution approved on Nov. 2 by the U.S. Bankruptcy Court in
New York.
According to the report, U.S. Bankruptcy Judge Martin Glenn
rebuffed an attempt by holders of unredeemed gift cards to hold up
the distribution. In August, Judge Glenn ruled that he couldn't
permit representatives of gift cards holders to file claims months
after the deadline. Last week he refused to hold up the
distribution while gift card holders appeal his August decision.
Judge Glenn characterized the card holders' attempt at holding up
the distribution as an effort at modifying the confirmed Chapter
11 plan which requires a distribution by year's end. He said the
card holders could only achieve that objective by filing papers to
set aside confirmation. The deadline for modifying the plan after
confirmation has elapsed, Judge Glenn said.
About Borders Group
Borders Group operated book, music and movie superstores and mall
based bookstores under the Borders, Waldenbooks, Borders Express
and Borders Outlet names, as well as Borders-branded airport
stores in the United States. At Jan. 29, 2011, the Company
operated 639 stores in the United States and 3 in Puerto Rico.
The Company also operated a proprietary e-commerce Web site --
http://www.Borders.com/-- launched in May 2008, which included
both in-store and online e-commerce components. As of Feb. 11,
2011, Borders employed a total of 6,100 full-time employees,
11,400 part-time employees, and roughly 600 contingent employees.
Borders Group Inc. and its affiliates filed for Chapter 11
protection (Bankr. S.D.N.Y. Case No. Lead Case No. 11-10614) in
Manhattan on Feb. 16, 2011. David M. Friedman, Esq., David S.
Rosner, Esq., Andrew K. Glenn, Esq., and Jeffrey R. Gleit, Esq.,
at Kasowitz, Benson, Torres & Friedman LLP, in New York, served as
counsel to the Debtors. Jefferies & Company's Inc. served as the
financial advisor. DJM Property Management is the lease and real
estate services provider. AP Services LLC served as the interim
management and restructuring services provider. The Garden City
Group, Inc., acted as the claims and notice agent.
Attorneys at Morgan, Lewis & Bockius LLP, and Riemer & Braunstein
LLP, served as counsel to the DIP Agents. Lowenstein Sandler
represented the official unsecured creditors committee for Borders
Group.
The Debtor disclosed $1.28 billion in assets and $1.29 billion in
liabilities as of Dec. 25, 2010.
Borders selected proposals by Hilco and Gordon Brothers to conduct
going out of business sales for all stores after no going concern
offers of higher value were submitted by the deadline.
In January 2012, Borders' First Amended Joint Chapter 11 Plan of
Liquidation became effective, and the Company emerged from Chapter
11 protection. The Court confirmed the Plan filed by the Debtors
and the Official Committee of Unsecured Creditors at a Dec. 20,
2011 hearing.
The Debtors have been renamed BGI Inc.
BUFFETS INC: District Court Affirms Ruling on Calif. Tax Claims
---------------------------------------------------------------
Delaware District Judge Sue L. Robinson upheld a bankruptcy court
order granting a motion for summary judgment filed by the
California Franchise Tax Board with respect to the proofs of claim
it filed against Buffets Inc. The Franchise Tax Board alleges
Buffets Inc. underpaid the taxes owed to California in years 1997,
1998, 1999, 2000, 2002, 2005 and 2006.
A copy of the Court's BUFFETS, INC., et al., Appellants, v.
CALIFORNIA FRANCHISE TAX BOARD, Appellee, Civ. No. 11-859-SLR
(D. Del.). A copy of the District Court's Oct. 31, 2012
Memorandum Order is available at http://is.gd/KHvn6dfrom
Leagle.com.
About Buffets Inc.
Buffets Inc., the nation's largest steak-buffet restaurant
company, operates 494 restaurants in 38 states, comprised of 483
steak-buffet restaurants and 11 Tahoe Joe's Famous Steakhouse(R)
restaurants, and franchises 3 steak-buffet restaurants in two
states. The restaurants are principally operated under the Old
Country Buffet(R), HomeTown(R) Buffet, Ryan's(R) and Fire
Mountain(R) brands. Buffets employs 28,000 team members and
serves 140 million customers annually.
Buffets Inc. and all of its subsidiaries filed Chapter 11
petitions (Bankr. D. Del. Lead Case No. 12-10237) on Jan. 18,
2012, after it reached a restructuring support agreement with 83%
of its lenders to eliminate virtually all of the Company's roughly
$245 million of outstanding debt. In its schedules, Buffets Inc.
disclosed $384,810,974 in assets and $353,498,404 in liabilities.
The Debtors are seeking to reject leases for 83 underperforming
restaurants.
Buffets had 626 restaurants when it began its prior bankruptcy
case (Bankr. D. Del. Case Nos. 08-10141 to 08-10158). It emerged
from bankruptcy in April 2009.
Higher gasoline and energy costs, along with a decline in guest
count, have hampered the Debtors' ability to service their long-
term debt and caused a liquidity strain, forcing the Company to
return to Chapter 11 bankruptcy.
In the new Chapter 11 case, Buffets Inc.'s legal advisors are
Paul, Weiss, Rifkind, Wharton & Garrison LLP and Young, Conaway,
Stargatt & Taylor, LLP. The Company's financial advisor is
Moelis, Inc. Epiq Bankruptcy Solutions LLC serves as claims,
noticing and balloting agent.
An ad hoc committee of secured lenders is represented by Willkie
Far & Gallagher LLP and Blank Rome LLP as counsel and Conway, Del
Genio, Gries & Co. as financial advisors. Credit Suisse, as DIP
Agent and Prepetition First Lien Agent, is represented by Skadden
Arps Slate Meagher & Flom as counsel.
The U.S. Trustee has appointed a five-member Official Committee of
Unsecured Creditors in the Debtors' cases.
In July 2012, Buffets Inc. emerged from Chapter 11 bankruptcy
after shedding $255 million in debt and $35 million in annual
interest payments. The bankruptcy judge signed on June 27 an
order confirming Buffets Inc.'s amended plan. All voting classes
were in favor of the plan.
In April 2012, Buffets Inc. filed an amended plan that proposes to
pay $4 million to a pool of unsecured creditors owed more than $44
million. Unsecured creditors were expected to recover 6% to 9% of
their claims. A prior version of the plan provided that unsecured
creditors were to receive nothing. The amended plan would create
a trust to pursue lawsuits on behalf of unsecured creditors.
First-lien lenders were to receive new stock in return for $251.8
million owing on the existing first-lien facility and $34.8
million in outstanding letters of credit.
CENTENE CORP: S&P Keeps 'BB' Rating on $250MM Sr. Unsecured Notes
-----------------------------------------------------------------
As Standard & Poor's Ratings Services previously announced, 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.
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
CIRCUIT CITY STORES: Resolves Price-Fixing Claims Against LG
------------------------------------------------------------
Django Gold at Bankruptcy Law360 reports that the trustee for
Circuit City Stores Inc. on Thursday asked the Virginia bankruptcy
court to sign off on a settlement reached with LG Display Co. Ltd.
in a wide-ranging multidistrict litigation over price-fixing in
the market for liquid crystal display screens.
Bankruptcy Law360 says that though the terms of settlement were
not disclosed, the motion for entry of an order approving the
agreement notes that Circuit City's liquidation plan mandates that
settlements of causes of action with damage claims over
$10 million must be approved by the bankruptcy court.
About Circuit City
Headquartered in Richmond, Virginia, Circuit City Stores Inc.
(NYSE: CC) -- http://www.circuitcity.com/-- was a specialty
retailer of consumer electronics, home office products,
entertainment software and related services in the U.S. and
Canada.
Circuit City Stores together with 17 affiliates filed a voluntary
petition for relief under Chapter 11 of the Bankruptcy Code
(Bankr. E.D. Va. Lead Case No. 08-35653) on Nov. 10, 2008.
InterTAN Canada, Ltd., which runs Circuit City's Canadian
operations, also sought protection under the Companies' Creditors
Arrangement Act in Canada.
Gregg M. Galardi, Esq., and Ian S. Fredericks, Esq., at Skadden,
Arps, Slate, Meagher & Flom, LLP, served as the Debtors' general
restructuring counsel. Dion W. Hayes, Esq., and Douglas M. Foley,
Esq., at McGuireWoods LLP, acted as the Debtors' local counsel.
The Debtors also tapped Kirkland & Ellis LLP as special financing
counsel; Wilmer, Cutler, Pickering, Hale and Dorr, LLP, as special
securities counsel; and FTI Consulting, Inc., and Rotschild Inc.
as financial advisors. The Debtors' Canadian general
restructuring counsel was Osler, Hoskin & Harcourt LLP. Kurtzman
Carson Consultants LLC served as the Debtors' claims and voting
agent. The Debtors disclosed total assets of $3,400,080,000 and
debts of $2,323,328,000 as of Aug. 31, 2008.
Circuit City opted to liquidate its 721 stores and obtained the
Bankruptcy Court's approval to pursue going-out-of-business sales,
and sell its store leases in January 2009.
In May 2009, Systemax Inc., a multi-channel retailer of computers,
electronics, and industrial products, acquired certain assets,
including the name Circuit City, from the Debtors through a Court-
approved auction.
On Sept. 14, 2010, the Court entered an order confirming the
Debtors' Plan of Liquidation, which created the Circuit City
Stores, Inc. Liquidating Trust and appointed Alfred H. Siegel as
Trustee. The Plan became effective Nov. 1, 2010.
CITRUS VALLEY: Moody's Affirms 'Ba2' Bond Rating; Outlook Stable
----------------------------------------------------------------
Moody's Investors Service affirms Citrus Valley Health Partners'
(CVHP) Ba2 revenue bond rating affecting $69.3 million of rated
outstanding Series 1998 fixed rate and auction rate certificates
of participation (COP) issued through the California Statewide
Communities Development Authority. The outlook is revised to
stable from negative.
Summary Rating Rationale:
The rating affirmation and revision in outlook to stable from
negative reflects continued strengthening of the balance sheet due
to revenue cycle improvements, receipts from the California State
provider fee program, and a low, manageable debt position.
Operating performance through nine months of FY 2012 (excluding
net proceeds under state provider fee program) shows notable
improvement in part due to sustainable labor cost reductions and
receipt of meaningful use funding. Additionally, under a newly
developed and reenergized board and senior management team, CHVP
has outlined a strategy focused on financial sustainability
through continued cost management, reducing losses on Medi-Cal,
and growth opportunities. This renewed strategy, coupled with a
further expected boost in unrestricted liquidity under the
extension of state provider fee program, further supports the
stable outlook.
Strengths
* Sizable regional health system (with nearly $400 million
revenue base, 32,000 admissions, and 107,000 outpatient
visits) consisting of three acute care hospitals located in
contiguous service areas in East San Gabriel Valley of Los
Angeles County (serving a population of nearly one million);
maintains leading and relatively stable 37% market share in
its primary services area in eastern Los Angeles County (based
on management provided data)
* A significant beneficiary under the California provider fee
program as a large Medi-Cal provider (Medi-Cal accounts for
24% of gross revenues), which has bolstered its cash position
since FY 2010; CVHP has received a combined $52 million of net
proceeds under the initial phase (21-month program) and second
phase (6-month program); under the third phase (30-month
program) CVHP expects to receive approximately $62 million by
December 31, 2013
* Following a large operating loss in FY 2011 (excluding net
proceeds under state provider fee program), CVHP has posted
improved operating results through nine months of FY 2012
(1.4% operating margin and 6.3% operating cash flow margin)
due in part to receipt of electronic health record incentive
payments, improved managed care contracts and sizable
permanent labor cost reductions implemented in late 2011;
further expense reductions are expected under the second phase
of planned voluntary workforce reductions
* As of September 30, 2012, unrestricted cash balance increased
by a large 33% to $133 million, equating to an improved 134
days cash on hand, 181% cash-to-direct debt and 136% cash-to-
comprehensive debt; the increase in cash is largely due to
revenue cycle improvements measured by reduced days in
accounts receivable; provider fee proceeds contributed to $5
million of the increase
* Largely fixed rate debt structure (68%) and no swaps
outstanding; modest amount of operating leases
* Highly liquid and conservative investments with 76% allocated
to fixed income securities and cash; defined contribution
pension plan limits demands on liquidity
* Low debt level measured by debt-to-operating revenues of 19%;
due to improved cash flow generation, Moody's adjusted maximum
annual debt service coverage improved to 4.4 times and
adjusted debt-to-cash flow declined to 2.5 times based on
annualized nine months of FY 2012 results; management has
plans to refinance all outstanding debt and issue new debt by
the end of 2013 to finance capital projects
Challenges
* A history of inconsistent and weak operating performance
reflective of a challenging payer mix and unfavorable service
area demographics with high unemployment and a growing aging
population; combined government (Medicare 43% and Medi-Cal 24%
of gross revenues) and self pay (6.6% of gross revenues) grew
to nearly 74% of gross revenues through nine months FY 2012;
payer mix is an ongoing concern given continued federal and
state budget deficits, expected downward pressure on
reimbursement across all payers and unfavorable economic
conditions with very high unemployment
* Reliant on supplemental government disproportionate share
funding to maintain positive operating cash flow; CHVP
received a total of$23.3 million of Medicare DSH payments and
$7.4 million of Medi-Cal DSH payments in FY 2011
* Very high average age of plant (has increased to19 years) due
to accumulated deferred maintenance; the system was approved
for the extension of the seismic retrofit deadline to 2030;
capital spending is expected to increase over the next two
years for an estimated $35 million modernization project
(discussed below) expected to be fully funded with HUD 242
financing; financing is currently scheduled for late 2013; the
current analysis does not incorporate any additional debt
* Nearly 30% of employees unionized; although overall labor
environment currently remains stable with low nursing turnover
and vacancy rates; in FY 2010, CVHP entered into a four year
renewed contract with California Nurses Association
Outlook
The revision in outlook to stable reflects continued strengthening
of the balance sheet, a manageable and low debt position, and a
favorable turnaround in operating performance through nine months
of FY 2012 due to sustainable cost cuts and improved productivity.
Furthermore, CHVP's renewed strategy focused on long-term
financial sustainability coupled with further growth in
unrestricted cash under the continuation of the state provider fee
program also support the stable outlook.
What Could Make The Rating Go Up
Growth in volumes contributing to favorable revenue growth;
continued improvement in operating performance and ability to
sustain improved levels for multiple years; growth in unrestricted
cash and investments; improved liquidity and debt measures
What Could Make The Rating Go Down
Deterioration of operating performance; decline in liquidity;
weakening of debt coverage and liquidity measures; increase in
debt without commensurate growth in operating cash flow and cash;
loss in market share due to competitive pressures; cuts in
reimbursement
Rating Methodology
The principal methodology used in this rating was Not-For-Profit
Healthcare Rating Methodology published in March 2012.
CLEAN HARBORS: S&P Puts 'BB+' Corp. Credit Rating on Watch Neg
--------------------------------------------------------------
As Standard & Poor's Ratings Services previously announced, it
placed its 'BB+' corporate credit rating and all other ratings on
Norwell, Mass.-based Clean Harbors Inc. on CreditWatch with
negative implications. "At the same time, we placed our ratings,
including our 'B+' corporate credit rating, on Plano, Texas-based
Safety-Kleen Systems Inc. on CreditWatch with positive
implications," S&P said.
"The CreditWatch placement reflects the likelihood that Clean
Harbors Inc.'s financial risk profile could weaken beyond
expectations at the current rating, given our expectation that the
company will primarily fund the Safety-Kleen acquisition with
debt," said credit analyst James Siahaan.
"We placed the ratings on Clean Harbors on CreditWatch with
negative implications and placed the ratings on Safety-Kleen on
CreditWatch with positive implications. We will monitor
developments relating to this transaction and will resolve the
CreditWatch listings once further details related to the
transaction become available. We intend to meet with management
to discuss a variety of topics related to the transaction, such as
integration risks, the pro forma capital structure, and
management's strategic objectives and financial policies. The
CreditWatch placements indicate the heightened risk that we will
lower Clean Harbors' ratings and raise Safety-Kleen's ratings
following our review of the transaction and implications for
credit quality," S&P said.
COLONIAL BANK: FDIC Hits Auditors With $1-Bil. Negligence Suit
--------------------------------------------------------------
Carolina Bolado at Bankruptcy Law360 reports that the Federal
Deposit Insurance Corp. on October 31 sued Colonial Bank's former
auditors PricewaterhouseCoopers LLP and Crowe Horwath LLP for the
$1 billion that the now-defunct bank lost in the Taylor Bean &
Whitaker Mortgage Corp. mortgage fraud scheme.
Bankruptcy Law360 relates that the FDIC, as receiver for Colonial
Bank, claims external auditor PwC and internal auditor Crowe
should have learned of the fraud perpetrated by Taylor Bean, the
bank's largest client, by 2007 or early 2008, well before the
August 2009 federal raid on Taylor Bean's headquarters.
About The Colonial BancGroup
Headquartered in Montgomery, Alabama, The Colonial BancGroup,
Inc., (NYSE: CNB) owned Colonial Bank, N.A, its banking
subsidiary. Colonial Bank -- http://www.colonialbank.com/--
operated 354 branches in Florida, Alabama, Georgia, Nevada and
Texas with over $26 billion in assets. On Aug. 14, 2009, Colonial
Bank was seized by regulators and the Federal Deposit Insurance
Corporation was named receiver. The FDIC sold most of the assets
to Branch Banking and Trust, Winston-Salem, North Carolina. BB&T
acquired $22 billion in assets and assumed $20 billion in deposits
of the Bank.
The Colonial BancGroup filed for Chapter 11 bankruptcy protection
(Bankr. M.D. Ala. Case No. 09-32303) on Aug. 25, 2009. W. Clark
Watson, Esq., at Balch & Bingham LLP, and Rufus T. Dorsey IV,
Esq., at Parker Hudson Rainer & Dobbs LLP, serve as counsel to the
Debtor. The Debtor disclosed $45 million in total assets and $380
million in total liabilities as of the Petition Date.
In September 2009, an Official Committee of Unsecured Creditors
was formed consisting of three members, Fine Geddie & Associates,
The Bank of New York Trust Company, N.A., and U.S. Bank National
Association. Burr & Forman LLP and Schulte Roth & Zabel LLP serve
as co-counsel for the Committee.
Colonial Brokerage, a wholly owned subsidiary of Colonial
BancGroup, filed for Chapter 7 protection with the U.S. Bankruptcy
Court in the Middle District of Alabama in June 2010. Susan S.
DePaola serves as Chapter 7 trustee.
CONTEC HOLDINGS: Emerges From Chapter 11 With Lower Debt
--------------------------------------------------------
Contec Holdings, LTD, has successfully completed its restructuring
and has emerged from chapter 11 effective Nov. 2, 2012, with
significantly reduced long term debt and incremental liquidity.
"We entered into this court process with a specific set of goals.
Most importantly, continuing to serve our customers on an
uninterrupted basis while we restructured our debt," said Larry
Young, Interim Chief Executive Officer of Contec. "In an
extremely short period of time, we were able to reduce our long
term debt and position Contec for expansion over the coming
years," continued Young. "All of this, in approximately 60 days,
without impacting the relationships we have with our customers,
vendors or employees. Contec has a lot to be proud of and on
behalf of our management team, we'd like to thank our dedicated
employees for helping to make this a seamless process."
Through the Plan, the Company reduced the debt on their balance
sheet by approximately $250 million and obtained an incremental
$25 million in financing.
"Our message going forward is simple," said Wesley Hoffman, Chief
Operating Officer of Contec. "We are strong company and we are
getting stronger. We are closely looking at opportunities to
expand our business and better serve our cable industry
customers."
On Aug. 29, 2012, the Company entered chapter 11 by filing a pre-
packaged plan of reorganization in the U.S. Bankruptcy Court for
the District of Delaware. The Honorable Kevin J. Carey of the
U.S. Bankruptcy Court for the District of Delaware confirmed the
Company's Plan of Reorganization (the "Plan") on October 4, 2012.
The Plan became effective on Nov. 2, 2012.
About Contec Holdings
Headquartered in Schenectady, New York, Contec Holdings Ltd. --
http://www.gocontec.com/-- is the market leader in the repair and
refurbishment of customer premise equipment for the cable
industry. The Company repairs more than 2 million cable set top
boxes annually, while also providing logistical support services
for over 12 million units of cable equipment annually.
With substantial operations in the United States and Mexico, the
Debtors earned revenues of approximately $153.6 million in 2011,
and as of July 28, 2012, the Debtors directly employed over 2,300
people in North America, 72% of which are unionized.
Contec Holdings, Ltd., and its affiliates on Aug. 29, 2012 sought
Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-12437) with
a plan of reorganization that has the support of senior lenders
and noteholders.
Ropes & Gray LLP, serves as bankruptcy counsel to the Debtors;
Pepper Hamilton LLP is the local counsel; AP Services LLC, is the
restructuring advisor; Moelis & Company is the investment banker;
and Garden City Group is the claims agent.
CORDILLERA GOLF CLUB: Auction Set for Dec. 10
---------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the four-course golf club at the Cordillera resort
community in Edwards, Colorado, goes up for auction on Dec. 10
under sale procedures approved last week by the U.S. Bankruptcy
Court in Denver. Bids are due initially by Dec. 3. A hearing for
approval of the sale is set for Dec. 17.
According to the report, the auction is part of the proposed
Chapter 11 reorganization plan jointly sponsored with the official
creditors' committee. The plan effectuates a settlement announced
in September designed to conclude both the bankruptcy and
accompanying class lawsuits by club members against owner David
Wilhelm.
The settlement requires selling the club, with proceeds
distributed in the order of priority specified in bankruptcy law.
Club members will have unsecured claims.
About Cordillera Golf
Cordillera Golf Club, LLC, owns an exclusive 730-acre four-course
golf club at the Cordillera resort community in Edwards, Colorado.
The club is located at the 7,000-acre Cordillera development,
which has 1,087 residential lots. Non-equity club membership is
open to community residents. The club has three golf courses, a
Dave Pelz designed short course, five swimming pools, and tennis
courts. The membership plan provides that there will be no more
than 1,085 golf memberships and up to 100 social memberships.
Half of all property owners within Cordillera are club members.
Cordillera Golf Club filed for Chapter 11 bankruptcy protection
(Bankr. D. Del. Case No. 12-11893) on June 26, 2012, the same day
a $12.7 million loan was due to Alpine Bank of Colorado. The club
blamed lower membership rates and tensions with current members
for the bankruptcy.
David A. Wilhelm, manager of CGH Manager LLC, manager, signed the
Chapter 11 petition. Mr. Wilhelm acquired 100% interest in the
Debtor in 2009 following an arbitration that stemmed from
revelations that the then owners of the 70% interests had diverted
funds away from the Debtor's operations.
In the petition, the Debtor estimated $10 million to $50 million
in assets and debts, including secured debt of $12.7 million owed
to Alpine Bank and a $7.5 million secured claim by Mr. Wilhelm.
Delaware Bankruptcy Judge Christopher S. Sontchi presided over the
case. Lawyers at Young, Conaway, Stargatt & Taylor and Foley &
Lardner LLP serve as the Debtor's counsel. Omni Management Group
LLC serves as the Debtor's claims agent.
On July 16, 2012, the Delaware Court granted the request of
certain club members to transfer the venue of the case to the
Bankruptcy Court in Colorado. The case was endorsed to Hon.
A. Bruce Campbell in Denver (Bankr. D. Colo. Case No. 12-24882).
An official committee of unsecured creditors has been appointed in
the case. The Committee members consist of various homeowner and
trade creditors of the Debtor. All members have Colorado
addresses. The Committee is represented by Munsch Hardt Kopf &
Harr PC as counsel.
Certain homeowners also have retained separate counsel, Michael S.
Kogan, Esq., at Kogan Law Firm, APC.
Secured lender, Alpine Bank in Vail, Colo., is represented by
lawyers at Ballard Spahr LLP.
CRYSTAL CATHEDRAL: Founder Seeks $5-Mil. in Bankruptcy Court Claim
------------------------------------------------------------------
Matthew Heller at Bankruptcy Law360 reports that in a high-stakes
bankruptcy court trial, the Rev. Robert Schuller is battling the
megachurch he created, claiming Crystal Cathedral Ministries owes
him about $5 million under an agreement that was written before he
left as senior pastor in 2005.
Testimony is scheduled to resume today, November 7, in the trial
of the claims for breach of contract and copyright infringement
that Schuller and members of his family filed against Crystal
Cathedral Ministries, Bankruptcy Law360 says.
About Crystal Cathedral
Crystal Cathedral filed for Chapter 11 bankruptcy protection
(Bankr. C.D. Calif. 10-24771) on Oct. 18, 2010. The Debtor
disclosed $72,872,165 in assets and $48,460,826 in liabilities as
of the Chapter 11 filing. Marc J. Winthrop, Esq., at Winthrop
Couchot P.C. represents the Debtor.
Todd C. Ringstad, Esq., at Ringstad & Sanders, LLP, represents the
Official Committee of Unsecured Creditors.
In November 2011, Crystal Cathedral won Court permission to sell
its property to the Roman Catholic Diocese of Orange for $57.5
million. The Diocese beat a rival bid from Chapman University.
The sale agreement provides that the congregation will have three
years to find new premises.
Chapman University, the secular bidder, was the preferred buyer as
far as the church members are concerned, because Chapman would
allow the ministry to continue to use the main buildings on the
premises. It also offered the option of allowing church
administrators to buy the property back at a later point. Chapman
raised its bid to $59 million, but the Crystal Cathedral board
still chose the Diocese.
D & J PROPERTIES: Voluntary Chapter 11 Case Summary
---------------------------------------------------
Debtor: D & J Properties, LLC
5645 Campbell Road
Las Vegas, NV 89149
Bankruptcy Case No.: 12-23581
Chapter 11 Petition Date: October 29, 2012
Court: U.S. Bankruptcy Court
District of Arizona (Phoenix)
Judge: James M. Marlar
Debtor's Counsel: Michael W. Carmel, Esq.
MICHAEL W. CARMEL, LTD.
80 E. Columbus Avenue
Phoenix, AZ 85012-4965
Tel: (602) 264-4965
Fax: (602) 277-0144
E-mail: michael@mcarmellaw.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Company's list of its largest unsecured creditors filed with
the petition does not contain any entry.
The petition was signed by Douglas R. Malan, president of DRM,
Inc., manager.
DA LYN INVESTMENTS: Case Summary & 8 Unsecured Creditors
--------------------------------------------------------
Debtor: Da Lyn Investments LLC
6051 Arthur Street
Hollywood, FL 33024
Bankruptcy Case No.: 12-35749
Chapter 11 Petition Date: October 29, 2012
Court: U.S. Bankruptcy Court
Southern District of Florida (Fort Lauderdale)
Judge: John K. Olson
Debtor's Counsel: Mary Jo Rivero, Esq.
MARY JO RIVERO, P.A.
1806 N. Flamingo Road, #355
Pembroke Pines, FL 33028
Tel: (954) 704-9332
Fax: (954) 704-2388
E-mail: ecf@maryjorivero.com
Scheduled Assets: $1,097,440
Scheduled Liabilities: $1,468,887
A copy of the Company's list of its eight unsecured creditors
filed with the petition is available for free at:
http://bankrupt.com/misc/flsb12-35749.pdf
The petition was signed by Damion A. Lyn, manager.
Affiliate that filed separate Chapter 11 petition:
Entity Case No. Petition Date
------ -------- -------------
Lyn, Damion Ambrose 10-30574 07/19/10
DAVID SYRE: Semiahmoo Hotel to Close Dec. 1; Warnick Mulls Buyout
-----------------------------------------------------------------
John Stark at The Bellingham Herald reports that Richard Warnick,
president and founder of Warnick + Co., confirmed on Oct. 31,
2012, that he is still in negotiations for possible purchase of
Semiahmoo Hotel.
The report notes the hotel is set to shut down on Dec. 1, 2012.
According to the report, Mr. Warnick's interest in the property
was revealed in August 2012 in legal documents filed as a part of
the bankruptcy reorganization of Bellingham developer David Syre,
who launched the Semiahmoo development in the 1980s. Mr. Syre's
Trillium Corp. still has a partial ownership interest in the
hotel, although the Upper Skagit Tribe is majority owner.
The report relates a deal may not be complete before the Dec. 1
closing date announced on Oct. 30 by the present ownership group.
That means the hotel may be closed for some period of time. Mr.
Warnick said his firm played no role in the current ownership
group's decision to announce the Dec. 1 closure and the potential
loss of 224 jobs.
The report adds, in announcing the Dec. 1 shutdown, a press
release from Semiahmoo Resort Co. LLC acknowledged that the
financial condition of Trillium Corp. and the bankruptcy of Mr.
Syre, Trillium's founder and owner, "has complicated the financial
condition" of the resort company.
Mr. Syre filed for Chapter 11 protection on Dec. 8, 2011, listing
debts of about $70 million and assets of $170 million.
According to The Bellingham Herald, Mr. Syre filed for bankruptcy,
seeking time to sell some of his assets to pay his creditors. In
filings in U.S. Bankruptcy Court in Seattle, Washington Federal
attorneys contend that Mr. Syre had personally guaranteed about
$15.5 million in loans and related expenses to the hotel company.
Now-defunct Horizon Bank made those loans. The money is now owed
to Washington Federal, which took over Horizon's loan portfolio
after bank regulators shut Horizon down in 2010.
DELTA PETROLEUM: Van Guilder Pleads Not Guilty of Insider Trading
-----------------------------------------------------------------
Heather Draper at Denver Business Journal reports that former Van
Gilder Insurance Corp. CEO Michael Van Gilder pleaded not guilty
to all counts of insider trading in his arraignment hearing in
U.S. District Court on Oct. 31, 2012.
The report, according to the U.S. Attorney for Colorado John
Walsh's office, says Mr. Van Gilder waived formal reading of the
indictment.
The report notes the case is now in the discovery and motions
phase. A tentative trial date has been set for Jan. 2, and the
jury trial is scheduled to go five days.
According to the report, Mr. Van Gilder was indicted by a federal
grand jury on five counts of insider trading. The U.S. Securities
and Exchange Commission also filed a complaint against Mr. Van
Gilder, accusing him with insider trading violations.
The report notes the indictment alleges that Mr. Van Gilder in
2007-08 profited on trades based on inside information provided by
an unnamed friend who was an executive at the former Delta
Petroleum Corp., an energy company that was based in Denver at
that time. Delta Petroleum filed for Chapter 11 bankruptcy
protection in December 2011, reorganized and emerged from
bankruptcy as Par Petroleum. The company moved its headquarters
to Houston in September.
The report, citing the Denver Business Journal, says a federal
investigation of was underway into alleged insider trading. Mr.
Van Gilder stepped down as Van Gilder Insurance's CEO that day for
what the company said at the time were personal reasons, but
remains with the company. Van Gilder Insurance has denied any
involvement in the charges against Mr. Van Gilder.
About Delta Petroleum
Delta Petroleum Corporation (NASDAQ: DPTR) is an independent oil
and gas company engaged primarily in the exploration for, and the
acquisition, development, production, and sale of, natural gas and
crude oil. Natural gas comprises over 90% of Delta's production
services. The core area of its operations is the Rocky Mountain
Region of the United States, where the majority of the proved
reserves, production and long-term growth prospects are located.
Delta and seven of its subsidiaries sought Chapter 11 bankruptcy
protection (Bankr. D. Del. Case Nos. 11-14006 to 11-14013,
inclusive) on Dec. 16, 2011, roughly six weeks before the Jan. 31,
2012 scheduled maturity of its $38.5 million secured credit
facility with Macquarie Bank Limited and after several months of
unsuccessful attempts to sell the business. Delta disclosed
$375,498,248 in assets and $310,679,157 in liabilities, which also
include $152,187,500 in outstanding obligations on account of the
7% senior unsecured notes issued in March 2005 with US Bank
National Association indenture trustee; and $115,527,083 in
outstanding obligations on account of 3-3/4% Senior Convertible
Notes due 2037 issued in April 2007. In its amended schedules,
the Delta Petroleum disclosed $373,836,358 in assets and
$312,864,788 in liabilities.
W. Peter Beardsley, Esq., Christopher Gartman, Esq., Kathryn A.
Coleman, Esq., and Ashley J. Laurie, Esq., at Hughes Hubbard &
Reed LLP, in New York, N.Y., represent the Debtors as counsel.
Derek C. Abbott, Esq., Ann C. Cordo, Esq., and Chad A. Fights,
Esq., at Morris, Nichols, Arsht & Tunnel LLP, in Wilmington, Del.,
represent the Debtors as co-counsel. Conway Mackenzie is the
Debtors' restructuring advisor. Evercore Group L.L.C. is the
financial advisor and investment banker. The Debtors selected
Epiq Bankruptcy Solutions, LLC as claims and noticing agent. The
petition was signed by Carl E. Lakey, chief executive officer and
president.
Delta Petroleum won confirmation of its reorganization plan at a
hearing on Aug. 15. Laramie Energy II LLC is the plan sponsor.
Delta Petroleum emerged from bankruptcy as Par Petroleum
Corporation. At closing, Laramie and Par Petroleum contributed
their respective assets in Mesa and Garfield counties, Colorado,
to form a new joint venture called Piceance Energy, LLC. Laramie
and Par Petroleum hold 66.66% and 33.34% ownership interests in
Piceance Energy, respectively
The Company reported a net loss of $470.04 in 2011, a net loss of
$194.01 million in 2010, and a net loss of $349.68 million in
2009.
DEWEY & LEBOEUF: Begins Review of Claims
----------------------------------------
Sara Randazzo at The Am Law Daily reports that the estate of Dewey
& LeBoeuf said it seeks to invalidate several dozen claims that
they say are duplicative or were submitted after the September 7
deadline.
According to the report, to date, more than 2,100 proofs of claim
have been filed against Dewey. Those submitting the claims --
which range from a low of $10 up to several million dollars --
include vendors, former firm staffers, and landlords. Dewey's
advisers have said they believe that all told, the estate owes
creditors $260 million in secured debt and $300 million to $500
million more in unsecured claims.
According to the report, among the sums the defunct firm hopes to
shed are:
-- $30.15 million in claims the estate says were filed twice by
the same party;
-- $2.39 million in claims that were subsequently amended; and
-- a total of $237,000 in priority, unsecured, and secured
claims filed after September 7.
The report notes about $136,000 of that amount is attributed to
Bradford Badke, a New York-based Ropes & Gray partner who was once
with Dewey predecessor firm Dewey Ballantine.
The report previously noted that scores of former partners have
also lined up to collect what they maintain is their cut of
whatever is available to the firm's unsecured creditors. Those
claims -- which are likely to be paid in sums as modest as 10 to
20 cents on the dollar -- would be negated, however, if the
partners asserting them signed on to the $71.5 million settlement
plan that releases participants from some Dewey-related liability
and bars them from pressing grievances against the Dewey estate.
The report says the estate's October 26 filings do not mention the
former partners' claims among those it hopes to strike, and Dewey
attorney Scott Ratner did not immediately respond to a request for
comment on whether the estate will ultimately object to them as
well.
According to the report, the pace of what had been the fast-moving
Dewey bankruptcy case has slowed considerably since October 9,
when U.S. Bankruptcy Judge Martin Glenn approved the so-called
partner contribution plan that would represent the first major
recovery for creditors if the broader Chapter 11 plan the estate
expects to file within the next few months receives Judge Glenn's
blessing.
Until that happens, the report continues, the estate has a few
lingering issues to resolve, including an ongoing dispute over
whether a group of retirees should continue to have an official
role in the Dewey bankruptcy.
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.
DON SEALS: Voluntary Chapter 11 Case Summary
--------------------------------------------
Debtor: Don Seals Enterprises, Inc.
dba Ray's Liquoir
Big Horn Travel Plaza
Duffy's Bluff Restaurant
P.O. Box 669
Buffalo, WY 82834
Bankruptcy Case No.: 12-21079
Chapter 11 Petition Date: October 29, 2012
Court: U.S. Bankruptcy Court
District of Wyoming (Cheyenne)
Judge: Peter J. McNiff
Debtor's Counsel: Paul Hunter, Esq.
2616 Central Avenue
Cheyenne, WY 82001
Tel: (307) 637-0212
Fax: (307) 637-0262
E-mail: attypaulhunter@prodigy.net
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $0 to $50,000
The Company did not file a list of creditors together with its
petition.
The petition was signed by Don Seals, president.
EASTMAN KODAK: Court Approves Deal to End Retiree Health Benefits
-----------------------------------------------------------------
The Associated Press reports that U.S. Bankruptcy Court Judge
Allan Gropper on Monday allowed Eastman Kodak Co. to end retiree
health benefits at the end of the year as part of its
restructuring, calling the move fair and reasonable.
Kodak last month reached an agreement with a court-appointed
committee of retirees to eliminate its current $1.2 billion
liability for medical, life insurance and survivor benefits. In
exchange, Kodak will pay a total of $650 million in claims and
$7.5 million in cash into a fund to be used for future payments.
The AP reports a statement from Kodak on Monday says the agreement
will reduce one of the company's biggest legacy liabilities and
marks a major and necessary step toward its emergence from Chapter
11 bankruptcy protection.
Sandy Postponed Hearing
HenriettaPost.com reported a bankruptcy judge was expected to
decide Nov. 1 whether to approve an agreement between Kodak and
the committee of retired employees. If approved, healthcare
benefits for retirees not eligible for Medicare will stop at the
end of this year in return for a cash payout. The amount of that
payout depends on Kodak's successful emergence from bankruptcy.
HenriettaPost.com said the hearing involving the health benefits
was originally scheduled for Oct. 29, but was postponed because of
superstorm Sandy.
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.
FENDER MUSICAL: Moody's Rates $245MM Sr. Secured Term Loan 'B2'
---------------------------------------------------------------
Moody's Investors Service assigned a B2 rating to Fender Musical
Instruments Corporation's new $245 million senior secured term
loan. Moody's also affirmed the B2 Corporate Family Rating and
Probability of Default Ratings. The ratings outlook is stable.
The proceeds of the new facility will be used to refinance the
company's existing $300 million term loan ($241 million
outstanding), and pay transaction fees and expenses. The B2 rating
on the existing term loan is affirmed, but will be withdrawn at
close.
"The refinancing improves Fender's debt maturity profile and
financial flexibility," said Kevin Cassidy, Senior Credit Officer
at Moody's Investors Service. "This will enable the company to
focus on its business without being distracted by potential
liquidity concerns," he noted.
The following rating was assigned:
$245 million senior secured term loan due 2018 at B2 (LGD 4,
56%);
The following ratings were affirmed:
Corporate Family Rating at B2;
Probability of Default Rating at B2;
The following rating was affirmed, but will be withdrawn at the
close of the transaction:
$300M senior secured term loan ($241 million outstanding) due
2014 at B2 (LGD4, 56% from 58%)
Ratings Rationale
Fender's B2 Corporate Family Rating reflects its high financial
leverage approaching 6 times, but modest interest coverage of over
2 times, lack of significant product diversification outside of
musical instruments (principally guitars) and relatively small
size with revenue around $700 million. The rating also reflects
the continued uncertainty in the macro economy, including weak
discretionary consumer spending and risks in Europe where the
company generates more than 20% of its revenue. Having a
significant amount of business with Guitar Center (Caa2 Corporate
Family Rating), which is experiencing financial distress, is also
a risk. The company's well known brand names, good liquidity
profile, good geographic diversification throughout the United
States and internationally and leading market share in guitars
support the rating.
The stable outlook reflects Moody's expectation of modest earnings
and revenue growth over the next 12 to 18 months. Moody's
expectation that Fender will deploy its free cash flow to reduce
debt and that it will maintain a good liquidity profile is also
reflected in the outlook.
The rating could be downgraded if Fender's operating performance
were to unexpectedly deteriorate. Key credit metrics driving a
potential downgrade would be debt to EBITDA sustained over 7 times
(presently 5.8 times and 5.9 times proforma), low single digit
EBITA margins (currently 5.7%) and EBITA to interest sustained
under 1.5 times (now 1.8 times and 2.2 times proforma).
There is little upward rating pressure in the near term given the
macro economic uncertainty and high financial leverage. Over the
longer term, the rating could be upgraded if debt to EBITDA falls
to around 4.5 times for a sustained period and operating margins
return to previous levels of high single digits or low double
digits. An improvement in the macro economy is also necessary for
an upgrade to be considered.
The B2 rating (LGD 4, 56%) on the term loan reflects its second
lien position with respect to the collateral securing the $100
million ABL revolving credit facility, its first lien position in
certain other assets and its upstream guarantees from operating
subsidiaries. The term loan has a first lien on PP&E, intangibles
and substantially all other assets, except the ABL collateral, and
a second lien on the ABL collateral.
The principal methodologies used in this rating were Global
Consumer Durables published in October 2010. Other methodologies
used include Loss Given Default for Speculative-Grade Non-
Financial Companies in the U.S., Canada and EMEA published in June
2009.
Fender Musical Instruments Corporation, based in Scottsdale,
Arizona, develops, manufactures and distributes musical
instruments, principally guitars, to wholesale and retail outlets
throughout the world. The company's revenue for the last twelve
months ending July 1, 2012 approximated $700 million.
FENDER MUSICAL: S&P Affirms 'B' Corporate Credit Rating
-------------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings on Fender
Musical Instruments Corp., including its corporate credit rating
at 'B'. The affirmation follows Fender's announcement that it will
refinance its existing term loan.
"At the same time, we assigned our 'B' issue-level rating to
Fender's proposed $245 million term loan due 2018. The recovery
rating is '3', indicating our expectation for meaningful (50% to
70%) recovery for lenders in the event of a payment default. The
new issue-level rating for the proposed term loan is subject to a
review of final documentation by Standard & Poor's. We understand
that Fender will use the net proceeds from the notes offering to
repay the existing balances on its $200 million term loan and $100
million delayed draw facility, both due 2014. We will withdraw the
issue-level ratings on the company's existing senior secured term
loan upon completion of this transaction and after the existing
balances have been repaid," S&P said.
"The outlook is stable. Pro forma for this transaction, we
estimate the company will have about $255 million reported debt
outstanding, a $4 million increase from current balances," S&P
said.
"We continue to view Fender's financial risk profile as 'highly
leveraged' given its significant debt obligations. Key credit
factors in our assessment of Fender's 'weak' business risk profile
include its narrow business focus, customer concentration, the
discretionary nature of its products, and the highly competitive
musical instruments industry in which it operates. Additionally,
we considered the company's good market positions, its well-
recognized brand names, and the geographic diversity of its
sales," S&P said.
"We estimate that following this refinancing, Fender's credit
protection measures will remain unchanged. We continue to view
Fender's financial risk profile as highly leveraged. Pro forma for
this transaction, Fender's estimated ratio of adjusted debt to
EBITDA is about 5.4x for the 12 months ended July 1, 2012, which
remains near the indicative leverage ratio for a highly leveraged
financial risk profile of greater than 5x. We also estimate that
the pro forma ratio of adjusted funds from operations (FFO) to
total debt is about 15% and slightly better than the indicative
ratio of less than 12% for a highly leveraged financial risk
profile," S&P said.
"Operating performance has modestly improved during the past year.
Revenues grew 3.4% for the 12 months ended July 1, 2012, over the
prior-year period. Performance improvement resulted from Fender's
ability to resolve its backlog and supply disruption issues.
EBITDA improved by almost 10%, and we estimate adjusted EBITDA
margins have remained flat near 8%, reflecting pricing actions
and improved operating efficiencies as production normalized,
partly offset by elevated raw material costs. Free operating cash
flow has also improved, primarily owing to improved working
capital levels as the company recovered from its backlog issues,
offset by raw material cost pressures, and increased capital
expenditures over the last year," S&P said.
S&P believes Fender's credit metrics will continue to improve but
remain constrained by the weak economy, particularly in Europe,
and continuing margin pressure from high input costs. Key
assumptions in Standard & Poor's 2013 forecast include:
-- Revenue growth in 2013 in the low single-digits and adjusted
EBITDA margin near 8%, reflecting a greater portion of sales
coming from higher-margin products, offset by continued input
cost pressures, including raw material costs such as
hardwoods, and rising labor costs.
-- S&P estimates about $12 million of capital expenditures in
2013.
-- S&P anticipates free-operating cash flow for the year will
approach $20 million in 2013 as working capital levels
normalize.
Based on its forecast, S&P expects Fender's adjusted leverage will
remain near 5x through the remainder of 2012, but to improve
closer to below 5x in 2013 from debt prepayment on the term loan.
S&P expects the ration of FFO to total debt to remain near 15%
over the next 12 months.
"Fender's sales are concentrated in guitars, with 72% of its
fiscal 2011 gross sales represented by fretted instruments and
guitar amplifiers. The company also has some sales concentration
with its largest customer, Guitar Center Inc., accounting for an
estimated 16% of 2011 sales. Although Fender maintains strong
brand recognition through its key Fender and related brand names,
we believe sales will remain vulnerable to economic cycles because
of the discretionary nature of its products. We believe the
musical instruments and accessories industry is highly fragmented
and very competitive, based on such factors as name recognition,
sound quality, style, and price. Fender's primary competitors
include Gibson Guitar Corp., Yamaha Corp. and Marshall
Amplification PLC. Fender believes it had the leading market share
by revenue in the U.S. in 2011 in electric, acoustic, and bass
guitars and amplifiers (as measured by MI Sales Trak), as well as
being one of the largest independent distributors of musical
instrument accessories in the U.S. The company has diversified its
geographic reach through acquisitions, and now has about 47% of
its sales outside of the U.S., a large portion of which are in
Europe," S&P said.
S&P believes liquidity is adequate to cover Fender's needs for the
next 12 months. This is based on these information and
assumptions:
-- S&P estimates liquidity sources will exceed uses in excess of
1.2x for the next 12 months.
-- S&P estimates net sources would continue to be positive, even
with a 15% decline in EBITDA from current levels.
-- The Company's existing term loan credit agreements does not
contain financial covenants. However, the proposed term loan
credit agreement contains a maximum senior secured leverage
covenant. S&P expects cushion under this covenant test to
remain above 15% in order to maintain adequate liquidity.
-- The Company is also required to to maintain a fixed-charge
coverage test of 1.0x in the event availability of funds
under its $100 million asset-backed revolving credit facility
(ABL) due 2016 declines below $12.5 million, which S&P does
not expect to occur over the next 12 to 24 months.
-- The company has manageable debt maturities, and annual
amortization on the proposed term loan is at about
$2.5 million.
-- As of July 1, 2012, Fender reported about $13 million of cash
on hand and $85 million of availability under its ABL, net of
outstanding letters of credit.
-- S&P believes Fender will generate sufficient cash flow from
operations to fund its capital expenditures that it expects
to be about $12 million over the near term.
"The company's proposed $245 million term loan due 2018 is rated
'B', the same as the corporate credit rating, with a recovery of
'3', indicating our expectation for meaningful (50% to 70%)
recovery for lenders in the event of a payment default," S&P said.
"The stable outlook reflects our expectation that the company will
maintain adequate liquidity and will continue to reduce leverage
over the next 12 months," S&P said.
"We could consider an upgrade if Fender sustains operating
performance at improved levels and applies excess cash flow toward
debt reduction, resulting in credit measures in line with
indicative ratios for an aggressive financial risk profile,
including an adjusted total debt to EBITDA ratio between 4x and
5x, and a ratio of FFO to total debt in the range of 12% to 20%.
We estimate Fender could achieve these metrics in a scenario of
mid-single-digit revenue growth and an upper-single-digit EBITDA
margin," S&P said.
"We could consider a downgrade if the company's operating
performance deteriorates significantly or its financial policies
become more aggressive (including a large debt-financed
acquisition or dividend), causing covenant cushion on the proposed
term loan to fall below 10%," S&P said.
RATINGS LIST
Ratings Affirmed
Fender Musical Instruments Corp.
Corporate credit rating B/Stable/--
Senior secured B
Recovery rating 3
Ratings Assigned
Fender Musical Instruments Corp.
Senior secured
$245 mil. term loan due 2018 B
Recovery rating 3
FIRST PLACE: Seeks Approval to Sell Talmer Share for $45 Million
----------------------------------------------------------------
BankruptcyData.com reports that First Place Financial filed with
the Court a motion for approval to sell the remaining share of
First Place Financial to Talmer Bancorp for $45 million.
The Debtors explain, "If effectuated, the Sale will recapitalize
the Bank, ensure the Bank's regulatory compliance, maximize the
value available for First Place's creditors, preserve hundreds of
jobs, and save banking regulators millions of dollars, while
simultaneously allowing the Bank to continue serving the needs of
thousands of individuals and businesses in the Bank's market
areas. Specifically, the Purchaser is prepared to proceed with a
transaction that would recapitalize the Bank with the amount
needed to satisfy regulatory requirements - anticipated to be $205
million - and concurrently allow the Purchaser to acquire the Bank
from First Place for $45,000,000. Accordingly, the total
commitment of Talmer under the terms of the [asset purchase
agreement] is $250 million."
First Place Financial Corp. filed a bare-bones Chapter 11 petition
(Bankr. D. Del. Case No. 12-12961) in Delaware on Oct. 28 to sell
its bank unit to Talmer Bancorp, Inc., absent higher and better
offers. The Debtor declared $175 million in total assets and
$65.6 million in total liabilities as of Oct. 26, 2012. The
Debtor has tapped Patton Boggs LLP and The Bayard Firm, PA as
legal counsel.
GARLOCK SEALING: Asbestos Committee Can Join Personal Injury Case
-----------------------------------------------------------------
Stewart Bishop at Bankruptcy Law360 reports that U.S. Bankruptcy
Judge George R. Hodges on Friday gave the go-ahead for a committee
of asbestos claimants to intervene in Garlock Sealing Technologies
LLC's suit challenging a woman's $1.5 million Kentucky state court
win against the company over her late husband's asbestos exposure.
Bankruptcy Law360 relates that Judge Hodges granted the official
committee of asbestos personal injury claimants' motion for leave
from the court to apply to a Kentucky state court for an order
allowing the committee to wade into Garlock's suit against Dolores
Ann Robertson.
About Garlock Sealing
Headquartered in Palmyra, New York, Garlock Sealing Technologies
LLC is a unit of EnPro Industries, Inc. (NYSE: NPO). For more
than a century, Garlock has been helping customers efficiently
seal the toughest process fluids in the most demanding
applications.
On June 5, 2010, Garlock filed a voluntary Chapter 11 petition
(Bankr. W.D. N.C. Case No. 10-31607) in Charlotte, North Carolina,
to establish a trust to resolve all current and future asbestos
claims against Garlock under Section 524(g) of the U.S. Bankruptcy
Code. The Debtor estimated $500 million to $1 billion in assets
and up to $500 million in debts as of the Petition Date.
Affiliates The Anchor Packing Company and Garrison Litigation
Management Group, Ltd., also filed for bankruptcy.
Albert F. Durham, Esq., at Rayburn Cooper & Durham, P.A.,
represents the Debtor in their Chapter 11 effort. Garland S.
Cassada, Esq., at Robinson Bradshaw & Hinson, serves as counsel
for asbestos matters.
The Official Committee of Asbestos Personal Injury Claimants in
the Chapter 11 cases is represented by Travis W. Moon, Esq., at
Hamilton Moon Stephens Steele & Martin, PLLC, in Charlotte, NC,
Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, in New
York, and Trevor W. Swett III, Esq., Leslie M. Kelleher, Esq., and
Jeanna Rickards Koski, Esq., in Washington, D.C. 20005.
Joseph W. Grier, III, the Court-appointed legal representative for
future asbestos claimants, has retained A. Cotten Wright, Esq., at
Grier Furr & Crisp, PA, and Richard H. Wyron, Esq., and Jonathan
P. Guy, Esq., at Orrick, Herrington & Sutcliffe LLP, as his co-
counsel.
About 124,000 asbestos claims are pending against Garlock in state
and federal courts across the country. The Company says majority
of pending asbestos actions against it is stale and dormant --
almost 110,000 or 88% were filed more than four years ago and more
than 44,000 or 35% were filed more than 10 years ago.
Garlock said in the Disclosure Statement that all asbestos claims
must be paid in full. Full payment enables the plan to allow
continued ownership by parent EnPro Industries Inc.
The Plan will create a trust to fund payment to present and future
asbestos claimants. For currently existing claims, the trust will
have insurance proceeds plus cash from Garlock together with a
promise from EnPro to provide up to $30 million over time. For
future claims, the trust will receive $60 million from Garlock
plus a secured promise by Garlock to supply an additional
$140 million. The promise will be secured by 51% of Garlock's
stock.
GENERAL MOTORS: Moody's Affirms 'Ba1' CFR/PDR; Outlook Positive
---------------------------------------------------------------
Moody's Investors Service assigned a Baa2 (LGD 2, 12%) rating to
the $11 billion secured revolving credit facility of General
Motors Corporation (GM) and also affirmed the company's Ba1
Corporate Family Rating (CFR) and Probability of Default Rating
(PDR). GM's Speculative Grade Liquidity rating is unchanged at
SGL-1. The rating outlook remains positive.
The $11 billion facility replaces GM's existing $5 billion
revolver, but retains the same security package. This includes
substantial domestic assets of GM and the stock of certain foreign
subsidiaries. The new facility also includes a GM Financial
borrowing sub-limit of $4.0 billion, which would be guaranteed by
GM.
Ratings Rationale
GM's long-term ratings and positive outlook reflect the highly
competitive North American business model that Moody's expects the
company to maintain as it leverages its improved cost structure
with a steady cadence of new product introductions. GM's credit
profile is also supported by its strong position in high-growth
Asian markets -- particularly China. These strengths should enable
GM to remain on track for generating credit metrics that could
support an investment grade rating over time. Key operating
challenges incorporated in the current Ba1 rating include the
execution risks associated with maintaining a globally competitive
product portfolio, increasing the use of global platforms, and
improving the competitive position of its European operations.
Important considerations relating to GM's financial strategy
include: the eventual disposition of the US Government's 27%
fully-diluted ownership in the company and any possible purchase
of these shares by GM; the long-term growth strategy of GM
Financial and its potential acquisition of Ally Financial's
international operations; and the potential implications of GM's
stated objective to de-risk its pension exposure. Finally, the
rating considers the potential for volatility in GM's performance
in the event of economic pressure in the US and the possible
fallout from the European financial crisis.
The new $11 billion facility enhances GM's already strong
liquidity position, which at September 2013 consisted of $32
billion in cash. Moody's notes, however, that the $4 billion
borrowing sub-limit for GM Financial moderates the degree of
additional liquidity benefit that accrues to GM.
Upward movement in GM's rating could be supported by
progress/positive developments in the following areas: the company
continues to execute its operating and financial plan; there is
moderation in the economic and financial uncertainty in Europe;
there is greater clarity surrounding GM's long-term strategy for
its financial services operations; and the pension de-risking
strategy and resulting impact on liquidity become better defined.
These factors, combined with credit metrics of the following
levels, could contribute to upward movement in the rating:
EBITA/interest approximating 4.0x, debt/EBITDA below 3.0x, and
EBITA margin approximating 6.0%. For the last twelve months
through June 2012 these metrics were: coverage of 2.6x; leverage
of 3.1x; and margins of 4.7%. All metrics reflect Moody's standard
adjustments.
Downward pressure on the rating could result from a significant
erosion in the company's ability to execute its operating plan.
This includes maintaining vehicle quality standards, sustaining a
competitive new product roll-out cadence, and continuing to
capitalize on growth opportunities in Asia and Latin America. The
company is highly committed to these initiatives and is allocating
considerable resources to support them. An alternative source of
pressure would result from GM retreating from its focus on de-
leveraging its balance sheet and maintaining a healthy liquidity
position. Moody's thinks that an erosion in strategy
implementation or financial policies are unlikely. Nevertheless,
credit metric levels that could reflect stress on the Ba1 rating
level include: EBITA/interest below 2.5x or debt/EBITDA above 4x.
The principal methodology used in rating General Motors was the
Global Automobile Manufacture Industry Methodology published in
June 2011. Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.
GENERAL MOTORS: S&P Assigns 'BB+' Corporate Credit Rating
---------------------------------------------------------
Standard & Poor's Ratings Services assigned its '1' recovery
rating and 'BBB' issue rating to General Motors Co.'s (GM;
BB+/Stable/--) $11 billion revolving credit facilities, each of
which are $5.5 billion and which expire in 2015 and 2017. "The '1'
recovery rating indicates our expectation of very high recovery
(90%-100%) in a default scenario. General Motors Holdings LLC, a
subsidiary of General Motors Co., is issuing the debt. The new
facility replaces GM's existing $5.0 billion credit facility
maturing in 2015. The larger facility increases GM's already
substantial liquidity. We view this positively in light of several
calls on cash--including European restructuring, GM Financial's
bid for financial services assets, and the use of some cash for
the reduction in GM's salaried pension plan. As we noted
previously, we view this reduction as equivalent to debt reduction
and a modest positive," S&P said.
"GM's third-quarter 2012 results did not affect our rating or
outlook on the company. Automotive free operating cash generation
was $1.2 billion, well above the same period in 2011, despite
lower earnings and higher capital spending. Liquidity of $37.5
billion (before the larger revolving credit facility) remains
comfortably above our assumption of more than $30 billion. GM's
North American operations have been able to significantly offset
very weak conditions in Europe, and we expect North America to
generate the bulk of GM's profits and cash flow in 2012 and 2013,"
S&P said.
RATINGS LIST
General Motors Co.
Corporate Credit Rating BB+/Stable/--
New Rating
General Motors Holdings LLC
$5.5 bil rev credit fac due 2015 BBB
Recovery Rating 1
$5.5 bil rev credit fac due 2017 BBB
Recovery Rating 1
HARPER BRUSH: To Auction Assets on November 19
----------------------------------------------
Aviva Gat, writing for The Deal, reports that Harper Brush Works
Inc. is headed to a November 19 auction of its assets despite
allegations that the sale will not generate more money than
liquidation.
According to the report, Judge Anita L. Shodeen of the U.S.
Bankruptcy Court for the Southern District of Iowa in Des Moines
on Oct. 31 approved the cleaning products maker's bidding
procedures for the sale.
Hearing on Dismissal Motion Continued Sine Die
The report notes Judge Shodeen's approval comes about a week after
U.S. Trustee Daniel M. McDermott requested the court to dismiss
Harper's bankruptcy case on the grounds that the sale would not
generate enough cash to cover the Debtor's secured debt, which
exceeds $5 million. Mr. McDermott said the proposed sale would
not provide any return for unsecured creditors and would yield no
tangible benefit for the estate. Mr. McDermott said the sale
could be accomplished outside of bankruptcy and continuing in
Chapter 11 would only increase fees and expenses associated with
the deal.
The report relates Judge Shodeen was scheduled to consider
dismissing Harper's bankruptcy case on Nov. 9, but Harper asked
the Court to continue the hearing pending its auction. Judge
Shodeen complied but has yet to schedule a new hearing on the
dismissal motion.
Bidding Protocol
According to the report, Q.E.P. Co. will lead the Nov. 19 auction
with a $2.2 million stalking-horse bid for all of the Debtor's
assets. Competing bids, due Nov. 14, may be for all of Harper's
assets or for just its operational assets or its real estate.
Should competing bidders wish to only purchase either the
operational assets or the real estate, Q.E.P.'s bid would be
broken into $1.74 million for the operational assets and $460,000
for the real estate assets. Competing bids for the operational
assets must be at least $1.815 million, and competing bids for the
real estate assets must be at least $485,000. Competing bids for
all of Harper's assets must be at least $2.3 million.
The report adds, during the auction, if bidders are competing for
all of the assets or for just the operational assets, bids would
have to increase in increments of at least $50,000. If bidders
are competing for the real estate, bids would have to increase in
increments of at least $25,000.
The report relates a sale hearing would follow right after the
auction on Nov. 19. Q.E.P. would be entitled to a $66,000 breakup
fee if it lost the auction.
According to the report, under the original bidding procedures,
filed Oct. 11, bidders could not choose just to bid for the real
estate or operational assets. Secured creditor Iowa State Bank
and Trust Co., however, objected to the sale, asserting it wanted
to credit bid for the real estate. ISBTC is owed $486,061.
Harper's other secured creditor, UMB Bank NA, said it supports the
auction. UMB Bank is owed on claims of $728,861 and $4.3 million.
Liquidation Plan
The report notes Harper on Oct. 28 filed a liquidation plan and
disclosure statement that project completing its bankruptcy by
Dec. 20. No hearing on the plan's disclosure statement has been
scheduled as of Thursday afternoon.
Under the plan, most administrative fees would be paid in full on
the plan's effective date, the report says. Professionals, owed
$140,000, however, would only be paid 80% of their fees. Priority
tax and priority nontax claims would be paid in full. Secured
creditors would receive the value of their collateral. If the
value of their collateral were less than the value of their
claims, the secured creditors would receive deficiency claims.
General unsecured creditors, collectively owed $3.9 million, would
receive any leftover funds, while equity interests would be
canceled, the report notes.
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.
HEMCON MEDICAL: Court Wants Plan Outline Amended by Nov. 30
-----------------------------------------------------------
Hayley Kaplan, writing for The Deal, reports that Judge Elizabeth
L. Perris of the U.S. Bankruptcy Court for the District of Oregon
in Portland ordered HemCon Medical Technologies Inc. to file an
amended disclosure statement by Nov. 30 for unspecified reasons
following an Oct. 18 hearing.
The report relates Judge Perris wrote in the minutes that a new
reorganization plan and outline were needed but only ordered the
manufacturer of medical bandages to file an amended disclosure
statement. A new hearing has not yet been scheduled.
According to the report, under HemCon's most recent disclosure
statement and related reorganization plan, filed July 2, HemCon
would fund its emergence through the issuance of new stock to
unspecified private equity funds or other institutional investors.
Administrative and priority claims, totaling approximately
$65,000, would be paid in full in cash on the effective date.
The report says the claim of secured lenders Bank of America NA,
Bank of the West and Silicon Valley Bank would be fixed at
$5 million, the estimated current value of the lenders'
collateral. The remainder of the lenders' claim would be treated
as unsecured. The secured claim would be paid in full on the
effective date with 4.5% per annum interest. The lenders, led by
BofA, are owed $22.72 million for three notes totaling $37 million
issued on Feb. 21, 2008. HemCon used the funds to acquire
Alltracel Pharmaceuticals plc in May 2008.
The report adds general unsecured creditors, with claims totaling
$39 million, would receive one share of common stock in the
reorganized HemCon for every $50 of allowed claims. The creditors
would also have the right to acquire, under certain conditions,
shares of the company's Series A preferred stock. Included in the
general unsecured claims is Marine Polymer Technologies Inc.'s
unsecured claim of $34.2 million for a patent infringement
judgment.
The report notes small unsecured claims of up to $5,000 would be
paid in cash for a 50% recovery within 60 days of the effective
date. Equity interests would be canceled.
According to the report, HemCon seeks to raise roughly $8 million
through the sale of Series A preferred stock. The company would
have 10 million authorized shares of preferred stock, 4.5 million
of which would be designated as Series A preferred stock. In
addition, the company would also have 40 million shares of
authorized common stock, of which approximately 1.1 million shares
would be issued to unsecured creditors. An additional 1 million
shares of common stock would be reserved for employees and
directors as stock options, restricted stock and other stock-based
grants.
According to the report, HemCon plans to sell between 1 million
and 1.5 million shares of Series A preferred stock to Angel
Investors LP. Another 2 million to 3 million shares of Series A
preferred stock would be sold to private equity funds or other
institutional investors. Therefore, a total of 3 million to 4.5
million shares would be sold in the offering. Court documents did
not identify the PE funds and institutional investors. HemCon
said it "has already engaged in substantial discussion with
various parties and received a written indication of interest from
a private equity [firm]."
The report adds the Series A preferred stock would accrue
cumulative dividends at a rate of 5% per annum and be payable only
when declared. The stock would be issued to accredited investors
only and require a $25,000 minimum investment. Holders of Series
A preferred stock would have the option to convert the shares into
common stock at any time. The conversion price of the common
stock would initially be equal to the Series A price.
The report relates the proceeds from the sale of the preferred
stock could fund up to $4 million in Phase 2 clinical, data and
case studies to support HemCon's promotion of its GuardaCareXR
Surgical product.
About HemCon Medical Technologies
Portland, Oregon-based HemCon Medical Technologies Inc., fdba
HemCon, Inc. filed a Chapter 11 bankruptcy petition (Bankr. D.
Ore. Case No. 12-32652) on April 10, 2012, estimating up to
$50 million in assets and liabilities. Founded in 2001, HemCon --
http://www.hemcon.com/-- is a diversified medical technology
company that develops, manufactures and markets innovative wound
care, anti-microbial and oral care products for the military,
emergency medical, surgical, dental and over-the-counter markets.
HemCon has subsidiaries in the United Kingdom and Europe.
The bankruptcy filing comes after an en banc decision by the U.S.
Court of Appeals for the Federal Circuit on March 15, 2012, which
affirmed an award of $34.2 million in damages to Marine Polymer
Technologies Inc. in a patent infringement case initiated in 2006.
HemCon's European subsidiary is not subject to the Chapter 11
proceedings.
Judge Elizabeth L. Perris presides over the case. Attorneys at
Tonkon Torp LLP represent the Debtor. The petition was signed by
Nick Hart, CFO.
Robert D. Miller Jr., U.S. Trustee for Region 18 appointed three
unsecured creditors to serve on the Official Committee of
Unsecured Creditors of HemCon Medical Technologies, Inc. The
Committee has appointed Marine Polymer as its chair.
HIGHLANDS GROUP: Court Rejects Bank's Case Dismissal Bid
--------------------------------------------------------
Highlands Group of Brunswick LLC dodged a bullet after the
Bankruptcy Court in Raleigh, North Carolina, denied Park Sterling
Bank's motion to dismiss or convert the Chapter 11 case. The
Court also held that the classification scheme proposed by the
Debtor in its plan of reorganization is legitimate, reasonable and
nondiscriminatory. Park Sterling also had asked the Court to
determine the Debtor's claims classification to be improper. The
Court also held it will determine the value of Park Sterling's
collateral and set the confirmation hearing.
On July 31, 2007, the Debtor executed a promissory note in favor
of Park Sterling in the amount of $4,344,000, which is secured by
a lien on all of the Debtor's property. A number of individuals
executed Commercial Guaranty Agreements, pursuant to which each
guarantor unconditionally guaranteed repayment of the Debtor's
obligations to Park Sterling.
The Debtor defaulted under the Note, and Park Sterling instituted
foreclosure proceedings in Brunswick County. On Aug. 3, 2011,
Park Sterling filed a civil action on the Note and Guaranties
against the Debtor and the individual guarantors in Mecklenburg
County Superior Court. On May 16, 2012, the state court entered a
judgment in favor of Park Sterling and against each of the
guarantors -- Harry W. Stovall, III; Alexander O. McCarley; Harry
W. Stovall, IV; and Lori C. Stovall -- in the amount of
$2,511,698.61 (the debt plus 15% attorneys' fees). The guarantors
filed a notice of appeal.
The Debtor filed a plan on Dec. 30, 2011, in which it proposed to
surrender to Park Sterling all of its property, with the exception
of one of the completed townhomes, in full satisfaction of Park
Sterling's claim. The Debtor sought to retain the townhome (Lot
#2) to be liquidated, with the proceeds distributed in payment of
the allowed non-insider general unsecured claims, which totaled
$80,370.08 on the Debtor's schedules.
A copy of Bankruptcy Judge Stephani W. Humrickhouse's Nov. 1, 2012
Order is available at http://is.gd/WFk0hsfrom Leagle.com.
About Highlands Group of Brunswick
The Highlands Group of Brunswick, LLC, owns a parcel of real
property known as the Highlands Forest Townhomes in Brunswick
County, North Carolina. The parcel consists of nine completed
residential townhomes, 58 townhome pads, common areas and a pool
with pool house.
Highlands Group filed a Chapter 11 bankruptcy petition (Bankr.
E.D.N.C. Case No. 11-07628) on Oct. 5, 2011. George M. Oliver,
Esq., at Oliver Friesen Cheek, PLLC, serves as the Debtor's
counsel. The Debtor scheduled $2,489,187 in assets and $3,485,025
in liabilities. The petition was signed by Harry Stovall,
member/manager.
HOVNANIAN ENTERPRISES: S&P Ups CCR to 'CCC+' on Stronger Liquidity
------------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on Hovnanian Enterprises Inc. to 'CCC+' from 'CCC-' and
removed it from CreditWatch positive. "We also raised our issue
rating on the company's existing senior secured debt (due 2021) to
'CCC' from 'CCC-' and removed it from CreditWatch positive. The
recovery rating remains unchanged at a '5' indicating our
expectation for a modest (10%-30%) recovery in the event of a
payment default. We also raised our issue rating on the company's
existing senior secured debt (due 2021) to 'CCC' from 'CCC-' and
removed it from CreditWatch positive. The recovery rating remains
unchanged at a '6' indicating our expectation for a negligible
(0%-10%) recovery in the event of a payment default. Lastly, we
withdrew our rating on the existing $797 million senior secured
notes that the company will fully redeem by Nov. 1, 2012. The
outlook is stable," S&P said.
"We raised our corporate credit rating to reflect operating
performance that is better than we expected, resulting in
narrowing pretax losses," said credit analyst George Skoufis. "It
also reflects improved liquidity following the recent debt
issuances that will extend the bulk of the company's 2016
maturities to 2020 and reduce its overall interest burden."
"The stable outlook reflects our view that Hovnanian has
sufficient liquidity to meet near-term capital needs. We would
raise our ratings if Hovnanian can sustain recently improved
operating trends and support a return to consistent profitability
and maintain adequate liquidity to fund its capital needs
including land investments to support growth. We would lower our
ratings if housing operations deteriorate and the company
aggressively invests in land resulting in a cash position below
the low end of the company's cash target or we believe a
distressed debt exchange or debt restructuring is likely," S&P
said.
INDIANA STEEL: Gets Court OK to Sell Assets; Panel to File Plan
---------------------------------------------------------------
Hayley Kaplan, writing for The Deal, reports that Judge Basil H.
Lorch III of the U.S. Bankruptcy Court for the Southern District
of Indiana authorized Indiana Steel and Tube Inc. to sell
substantially all its assets to unsecured creditor MS Tube LLC for
over $5 million.
According to the report, MS Tube, an affiliate of Mill Steel Co.,
paid $5.925 million for the assets. The deal is subject to
adjustments, said debtor counsel Jerald I. Ancel of Taft
Stettinius & Hollister LLP. The sale will close by Nov. 21, he
added.
The report relates MS Tube beat out seven other bidders at an
Oct. 26 open auction of Indiana Steel's assets, Mr. Ancel noted.
Two of the bidders, including Mill Steel, engaged in active
bidding at one point during the auction, he said.
The report notes Indiana Steel initially received 11 bids, but
four were for the Debtor's equipment only, so the company chose
not to go forward with those bids at the auction. There were
seven rounds of overbidding during the approximately three-and-a-
half to four-hour action.
The report, citing court documents, relates Mill Steel is Indiana
Tube's largest general unsecured creditor with a claim totaling
approximately $2.6 million.
According to the report, the official committee of unsecured
creditors will file a liquidation plan sometime after the sale
closes.
Indiana Steel and its prepetition secured lender Indiana Bank &
Trust Co. didn't believe it was in the best interest of the
company's estate to negotiate a stalking-horse offer for Indiana
Steel's assets because several parties indicated a willingness to
purchase the assets. Innisbrook Equity Group had been handling
the marketing effort, the report relates.
The report adds Indiana Steel has been operating with an $8.5
million new-money debtor-in-possession loan from Indiana Bank. The
steel mill operator owes the lender $7.8 million under a
prepetition revolver and $2.23 million on a prepetition term loan.
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.
INSPIRATION BIOPHARMACEUTICALS: Case Summary & Creditors' List
--------------------------------------------------------------
Debtor: Inspiration Biopharmaceuticals, Inc.
One Kendall Square
Building 1400 East
Cambridge, MA 02139
Bankruptcy Case No.: 12-18687
Type of Business: Inspiration Biopharmaceuticals develops
recombinant blood coagulation factor
products for the treatment of hemophilia.
Chapter 11 Petition Date: Oct. 30, 2012
Court: U.S. Bankruptcy Court
District of Massachusetts (Boston)
Judge: William C. Hillman
Debtor's
Counsel: Andrew G. Lizotte, Esq.
Charles R. Bennett, Jr., Esq.
Harold B. Murphy, Esq.
MURPHY & KING, P.C.
One Beacon Street
21st floor
Boston, MA 02108
Tel: (617) 423-0400
Fax: (617)556-8985
E-mail: agl@murphyking.com
crb@murphyking.com
hbm@murphyking.com
Debtor's
Chief
Restructuring
Officers: Mark Weinstein
Michael Nolan
FTI CONSULTING, INC.
Estimated Assets: $100 million to $500 million
Estimated Debts: $100 million to $500 million
The petition was signed by John P. Butler, chief executive
officer.
Inspiration Biopharmaceuticals, Inc.'s List of Its 20 Largest
Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Biomeasure Incorporated $15,341,559
27 Maple Street
Milford, MA 01757
CMC ICOS Biologics Inc. $6,328,189
PO Box 13858
Mill Creek, WA 98082
Ipsen Pharma S.A.S. $2,585,510
65, quai George Gorse
92100 Boulogne
Billancourt
France
Haemologic Technologies Inc. $990,116
57 River Road
Unit 1021
Essex Junction, VT 05452
European Medicines Agency $549,654
7 Westferry Circus
Canary Wharf
London E14 4HB
Rho, Inc. $377,002
6330 Quadrangle Drive
Suite 500
Chapel Hill, NC 27517
Cato Research Ltd. $273,656
PO Box 890127
Durham, NC
Voisin Consulting $242,284
3 rue des Longs Pres
92100 Boulogne France
Edwards Wildman Palmer $237,929
LLC
PO Box 416395
Boston, MA
Sanquin Blood Supply $202,725
Ropes & Gray, LLP $173,362
Cambridge Biomarketing $154,351
Patheon UK Limited $152,454
Max Neeman International $145,542
Sintesi Research Inc. $137,712
Global Experience $131,852
Specialists, Inc.
Novella Clinical Ltd. $117,789
Indiana Hemophilia and $115,504
Thombosis Center
HMR Hospital Maisonneuve $103,381
Rosemont
University of North $85,025
Carolina-Pat Extp
Chappel Hill Office of
Technology Devel.
JEFF HOULIK: 10th Cir. BAP Tackles Post-Confirmation Jurisdiction
-----------------------------------------------------------------
The United States Bankruptcy Appellate Panel for the Tenth Circuit
vacated a bankruptcy court order that awarded debtors Jeffrey P.
Houlik and Charla L. Houlik actual damages of $474.86 and punitive
damages of $25,000 as a sanction for Santander Consumer USA Inc.'s
repossession of their vehicle. Believing the Debtors had missed
two monthly payments, Santander Consumer USA repossessed the
vehicle approximately one year after the confirmed Chapter 11 plan
revested the vehicle in the Debtors subject to creditor's rights
in the collateral, and approximately two months after the Debtors'
case had been voluntarily closed without discharge.
A three-judge panel of the BAP, comprising of Bankruptcy Judges
Tom R. Cornish, Elizabeth E. Brown, and Dana L. Rasure, held that
the bankruptcy court did not have the authority to award damages
to the Debtors.
Judge Cornish, who wrote the opinion, said the bankruptcy court
did not have post-confirmation "related to" jurisdiction over the
wrongful repossession action. Even though it is brought by the
Debtors, the action affects neither an integral aspect of the
bankruptcy process, nor the interpretation, implementation,
consummation, execution, or administration of the confirmed plan.
Judge Cornish said Houliks' remedy in this situation is "a state
court remedy and not a bankruptcy court remedy."
"When asked at oral argument why he opted to reopen the bankruptcy
case and file a motion for stay violation instead of filing an
action against Santander in state court, counsel for the Houliks
responded that it would be easier to get Santander's attention if
filed in bankruptcy court. Perhaps so, but that does not alter
the scope of the bankruptcy court's jurisdiction following
confirmation, which is reserved for matters that impact the
bankruptcy process directly or involve interpretation or execution
of the plan of reorganization," Judge Cornish said.
"Our decision should in no way be interpreted as exonerating
Santander for its conduct in repossessing the Truck on such
sketchy information of delinquent payments. Should the Houliks
elect to bring a claim in some other court, they could conceivably
achieve a better result," Judge Cornish also said.
Judge Brown concurred with the decision but issued a separate
opinion to express her concerns with the majority's analysis of
post-confirmation jurisdiction. Judge Brown noted that the
underlying premise of the majority's analysis is that the
bankruptcy court's post-confirmation jurisdiction is limited to
"related to" jurisdiction. It fails to acknowledge a bankruptcy
court's core jurisdiction to interpret or enforce plan
confirmation orders in the post-confirmation context.
Judge Brown noted that the Debtors' claim did not require
interpretation or enforcement of the Plan because Santander was
merely exercising its lien rights, which is expressly allowed by
the Plan.
"But imagine if Santander had been an unsecured pre-petition
creditor that brought an action to collect its pre-petition debt,
in violation of the Plan. The majority would apparently send the
Debtors back to state court to initiate a breach of contract
claim. The state court would have concurrent jurisdiction to
enforce the Plan as a contract between Debtors and Santander. But
what if twenty unsecured creditors were to ignore the bankruptcy
process and file state court collection actions in twenty
different state courts? Would the Debtors have no option except to
fight off these efforts in twenty different courts? No. The
bankruptcy court clearly would have authority to prevent such
collection efforts as an enforcement of its order confirming the
plan under [11 U.S.C. Sections] 1141(a), 1142 and 105(a), whether
its jurisdiction is labeled as core or ancillary. Similarly, if
Santander refused to accept payments or to credit payments in the
manner specified by the Plan, the bankruptcy court would have the
ability to sanction such conduct under [Sections] 1141(a), 1142
and 105(a)," Judge Brown explained.
"Such is not the case here. Santander is a secured creditor, whose
lien rights were specifically retained in the Plan. Its ability to
enforce its lien rights in the event of a default in payment was
thus preserved in the Plan. Admittedly, a dispute arose over
whether the Debtors had missed payments and, in fact, the
bankruptcy court found the Debtors to be current on their
payments. The Debtors were entitled to be heard on this issue,
but not in the bankruptcy court," Judge Brown added.
The case is, SANTANDER CONSUMER, USA, INC., Appellant, v. JEFFREY
P. HOULIK and CHARLA L. HOULIK, Appellees, BAP No. KS-11-096 (10th
Cir. BAP). A copy of the BAP's Oct. 29, 2012 opinion is available
at http://is.gd/pp5tl3from Leagle.com.
Jeffrey P. Houlik and Charla L. Houlik, who do business as Jeff
Houlik Construction Inc., filed for Chapter 11 bankruptcy (Bankr.
D. Kan. Case No. 09-12159) in July 2009. They filed a chapter 11
plan that October, in which they proposed to allow Citi's secured
claim in the amount of $17,305 and to repay that amount in monthly
payments of $343. Citi did not object to the plan and it was
confirmed on Dec. 29, 2009.
JOHN HENRY: Moody's Affirms 'B2' Corp. Family Rating
----------------------------------------------------
Moody's Investors Service affirmed the B2 Corporate Family Rating
and Probability of Default Rating of John Henry Holdings, Inc.
("JHH"), a wholly-owned subsidiary of Multi Packaging Solutions,
Inc ("MPS"). The ratings outlook was revised to stable from
positive. Concurrently, Moody's assigned a B1 rating to the
company's proposed $360 million first lien credit facility and a
Caa1 rating to the proposed $60 million second lien credit
facility.
Proceeds from the proposed credit facilities will be used to repay
existing debt, redeem $173 million of preferred stock and pay a
$37 million shareholder dividend.
The outlook revision to stable from positive reflects JHH's
increased leverage following the recapitalization transaction.
According to Moody's analyst Raya Sokolyanska, "the incurrence of
a significant amount of debt to fund shareholder returns dampens
rating upside."
Ratings actions for John Henry Holdings, Inc.:
Corporate Family Rating, Affirmed at B2
Probability of Default Rating, Affirmed at B2
$30 million first lien revolving credit facility due 2017,
Assigned B1 (LGD3, 44%)
$330 million first lien term loan due 2019, Assigned B1 (LGD3,
44%)
$60 million second lien term loan due 2020, Assigned Caa1
(LGD6, 90%)
Outlook, Revised to Stable from Positive
The ratings are subject to the conclusion of the proposed
transaction and Moody's review of final documentation. Upon
completion of the recapitalization, the ratings on the existing
credit facilities will be withdrawn.
Ratings Rationale
The B2 Corporate Family Rating ("CFR") reflects MPS' small scale,
relatively high leverage at over 5 times (Moody's adjusted) pro-
forma for the 2012 recapitalization transaction, operations in the
highly competitive packaging industry, and an acquisitive and
aggressive financial philosophy. At the same time, the rating
considers favorably the company's long-term customer
relationships, relatively recession-resistant end markets, a track
record of successfully integrating acquired businesses, and good
liquidity.
Debt capital will be comprised of a $30 million first lien
revolving credit facility, a $330 million first lien term loan, a
$60 million second lien term loan, and $22 million of assumed
foreign debt. The absence of financial maintenance covenants will
provide the company with considerable flexibility to incur
additional debt.
The stable rating outlook incorporates Moody's expectations that
MPS will generate low- to mid-single digit earnings growth and
solid free cash flow in the near term and that Moody's adjusted
leverage will decline to 5 times by the end of the fiscal 2013
year ended June 30, 2013.
Moody's could consider a negative rating action if liquidity
deteriorates, profitability declines or management increases debt
levels such that leverage is sustained above 5 times or interest
coverage falls below 1.5 times.
The ratings could be upgraded if Moody's comes to expect the
company to maintain leverage below 4 times, interest coverage
above 2 times, more conservative financial policies, and a good
liquidity position.
The principal methodology used in rating John Henry Holdings 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.
John Henry Holdings, Inc. ("JHH"), a wholly-owned subsidiary of
Multi Packaging Solutions, Inc. ("MPS") is a print and packaging
company for the consumer, healthcare and multimedia end markets.
The company produces products such as folding cartons, blister
cards, labels, inserts/outserts, pixie tags, and other packaging.
Headquartered in New York, NY, the company is controlled by Irving
Place Capital and reported revenues of approximately $596 million
for the twelve months ended June 30, 2012.
LAND O'LAKES: Moody's Rates $250-Mil. Sr. Unsecured Notes 'Ba2'
---------------------------------------------------------------
Moody's Investors Service assigned a rating of Ba2 on Land
O'Lakes' $250 million senior unsecured notes issuance and affirmed
all other ratings.
Rating Assigned:
Land O'Lakes Inc.
$250 million senior unsecured notes due November 2022 at Ba2.
Ratings Affirmed:
Land O'Lakes, Inc.
Corporate Family Rating at Ba1;
Probability of Default Rating at Ba1;
Speculative Grade Liquidity Rating at SGL-3
$475 million senior secured revolving credit facility expiring
April 2016 at Ba1;
$150 million senior secured term loan due August 2021 at Ba1;
$155 million of 6.24% senior secured notes due December 2016 at
Ba1;
$85 million of 6.67% senior secured notes due December 2019 at
Ba1;
$85 million of 6.77% senior secured notes due 2021 at Ba1.
Land O'Lakes Capital Trust I
$191 million of 7.45% subordinated capital securities at Ba3.
Outlook stable.
The rating reflects the unsecured position of the notes within the
capital structure. Accordingly, the new notes are ranked below the
secured debt in LGD and are rated one notch below the secured
debt.
Ratings Rationale
The Ba2 senior unsecured rating reflects Land O'Lakes' strong
brands that hold leading market positions in their respective
categories, and the cooperative's high market shares in crop
inputs, shell and specialty eggs and animal feed. However, the
rating is limited by a relatively aggressive financial policy and
significant earnings volatility in the cooperative's agricultural
commodity businesses. Moody's expects that leverage will remain
relatively high over the forecast period due to debt incurred to
finance recent acquisitions, significant working capital
requirements and continuing capital investments. Moody's believes
that the cooperative will be heavily reliant on its securitization
program and its bank revolver to help fund its capital needs.
The stable outlook reflects Moody's expectation that, though
leverage will remain elevated in the near to intermediate term,
modest incremental EBITDA from recent acquisitions will provide
adequate cash flow to support operations and debt service. The
stable outlook also reflects that a challenging commodity pricing
environment may be buffered somewhat by its feed and crop services
businesses which may be slightly more insulated from commodity
prices.
Given Moody's expectation for modest earnings growth and minimal
near term delevering, an upgrade in the near to intermediate term
is unlikely. However, if Land O'Lakes is able to materially reduce
financial leverage, improve the diversity and stability of its
product portfolio, successfully integrate its new acquisitions,
and adopt a more conservative financial posture, an upgrade could
occur.
Land O'Lakes' leverage has increased meaningfully over the last
twelve months in an effort to fund its growth efforts. Additional
debt financed acquisitions, a deterioration in operating
performance, or a weakening of liquidity could contribute to a
downgrade. Specifically, should Land O'Lakes be unable to reduce
leverage to levels more appropriate to the rating category,
including debt/EBITDA (incorporating Moody's adjustments) to below
3.5 times over the next year, ratings could be downgraded.
The principal methodology used in rating Land O'Lakes was the
Global Agricultural Cooperatives Industry Methodology published in
August 2010.
Land O'Lakes, Inc., based in Arden Hills, Minnesota, is an
agricultural cooperative focusing on dairy food, animal feed, and
agricultural crop inputs. Moody's-adjusted revenues, EBITDA and
Debt-to-EBITDA for the twelve months ending June 30, 2012 were
approximately $13.4 billion, $518 million, and 4.3 times,
respectively.
LIGHTHOUSE IMPORTS: Selects DSI's Joseph Luzinski as CRO
--------------------------------------------------------
Paul Brinkmann at South Florida Business Journal reports that
Joseph Luzinski, senior vice president in the Miami office of
Development Specialists Inc., has been appointed chief
restructuring officer for Lighthouse Imports.
Based in St. Augustine, Florida, Lighthouse Imports, LLC, dba
Toyota of St. Augustine, filed for Chapter 11 protection on Oct.
24, 2012 (Bankr. M.D. Fla. Case No. 12-14459). Judge Karen S.
Jennemann presides over the case. R. Scott Shuker, Esq., at
Latham Shuker Eden & Beaudine, LLP, represents the Debtor. The
Debtor listed both assets and debts of between $10 million and
$50 million.
LIGHTSQUARED INC: Hearing on LP Lenders' Motion to Resume Nov. 28
-----------------------------------------------------------------
The hearing on the motion of the Ad Hoc Secured Group of
LightSquared LP Lenders for entry of an order granting it leave,
standing and authority to commence, prosecute and/or settle
certain claims of behalf of the estates of LightSquared, Inc., et
al., previously scheduled for Nov. 5, 2012, at 10:00 a.m., has
been adjourned. The hearing on the Standing Motion will now be
held before the Honorable Shelley C. Chapman, Judge of the United
States Bankruptcy Court for the Southern District of New York on
Nov. 28, 2012, at 10:00 a.m.
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.
MERVYN'S LLC: $166 Million LBO Settlement Approved by Court
-----------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the creditors of Mervyn's LLC were authorized by the
bankruptcy court on Nov. 2 to take $166 million in settlement of
a lawsuit begun in September 2008 by the official committee
against discount retailer Target Corp. and about 40 other
defendants. The settlement will enable filing a Chapter 11 plan
entailing a "meaningful distribution" to unsecured creditors,
according to the committee's court filing.
According to the report, the official creditors' committee
contended in the suit that the $1.175 billion leveraged buyout in
2004 included fraudulent transfers. In addition to Target,
defendants included Cerberus Capital Management LP, Lubert-Adler &
Klaff Partners LP, and Sun Capital Partners Inc., the leader of
the investor group that bought the Mervyn's chain.
The report recount that going-out-of-business sales paid secured
debt fully. Nonetheless, the price didn't produce enough cash to
pay expenses incurred in the Chapter 11 case, leaving Mervyn's
"severely administratively insolvent" since late 2008, court
papers stated.
Settlement papers said there is $93 million in expenses arising
during the Chapter 11 case, not including professional claims.
Unsecured claims amount to some $400 million, the papers state.
The committee was represented in the lawsuit by Cooley LP.
The firm was retained to prosecute the lawsuit on a contingency
basis. The settlement followed a decision in March 2010 by U.S.
Bankruptcy Judge Kevin Gross, who declined to dismiss the suit and
collapsed multiple transactions into one. By collapsing, Judge
Gross said that a safe harbor in federal bankruptcy law didn't
apply to protect Target.
In his opinion, Judge Gross described the LBO as having
"devastating" effects on Mervyn's creditors, "including the
stripping of debtor's real estate assets." Target isn't a party to
the settlement agreement, although it receives and grants
releases.
The lawsuit is Official Committee of Unsecured Creditors of
Mervyn's Holdings LLC v. SCSF Mervyn's (Offshore) Inc. (In re
Mervyn's Holdings LLC), 08-51402, U.S. Bankruptcy Court, District
of Delaware (Wilmington).
About Mervyn's LLC
Headquartered in the San Francisco Bay Area, Mervyn's LLC --
http://www.mervyns.com/-- provided a mix of top national brands
and exclusive private labels. Mervyn's had 176 locations in seven
states. Mervyn's stores had an average of 80,000 retail square
feet, smaller than most other mid-tier retailers and easier to
shop, and were located primarily in regional malls, community
shopping centers, and freestanding sites.
The Company and its affiliates filed for Chapter 11 protection
(Bankr. D. Del. Case No. 08-11586) on July 29, 2008. Howard
S. Beltzer, Esq., and Wendy S. Walker, Esq., at Morgan Lewis &
Bockius LLP, and Mark D. Collins, Esq., Daniel J. DeFranceschi,
Esq., Christopher M. Samis, Esq. and L. Katherine Good, Esq., at
Richards Layton & Finger P.A., represent the Debtors in their
restructuring efforts. Kurtzman Carson Consultants LLC is the
Debtors' claims agent. The Debtors' financial advisor is Miller
Buckfire & Co. LLC. Mervyn's LLC's balance sheet at Aug. 30,
2008, showed $665,493,000 in total assets and $717,160,000 in
total liabilities resulting in a $51,667,000 total stockholders'
deficit.
METROGAS SA: Court Wants US to Weigh in on Arbitrators' Authority
-----------------------------------------------------------------
Daniel Wilson at Bankruptcy Law360 reports that the U.S. Supreme
Court on Monday asked the federal government to weigh in on the
extent of arbitrators' authority to take on disputes, in a case
involving BG Group PLC's bid to reinstate a $185 million
arbitration award over an investment in now-bankrupt Argentine gas
distributor MetroGas SA.
In a brief order, the high court invited the U.S. solicitor
general's office to express its views on the dispute, after the
D.C. Circuit overturned the British natural gas exploration
company's arbitration award in January, according to Bankruptcy
Law360.
About MetroGas
Buenos Aires, Argentina-based MetroGAS S.A., a gas distribution
company, was incorporated on Nov. 24, 1992, and began operations
on Dec. 29, 1992, when the privatization of Gas del Estado S.E.
("GdE") (an Argentine Government-owned enterprise) was completed.
Through Executive Decree No. 2,459/92 dated Dec. 21, 1992, the
Argentine Government granted MetroGAS an exclusive license to
provide the public service of natural gas distribution in the area
of the Federal Capital and southern and eastern Greater Buenos
Aires, by operating the assets allocated to the Company by GdE for
a 35 year period from the Takeover Date (Dec. 28, 1992). This
period can be extended for an additional 10 year period under
certain conditions.
MetroGAS' controlling shareholder is Gas Argentino S.A. ("Gas
Argentino") who holds 70% of the Common Stock of the Company. The
20%, which was originally owned by the National Government, was
offered in public offering and the remaining 10% is under the
Employee Stock Ownership Plan.
Going Concern Doubt
Price Waterhouse & Co. S.R.L., in Buenos Aires, Argentina,
expressed substantial doubt about MetroGas S.A.'s ability to
continue as a going concern, following the Company's 2011 results.
The independent auditors noted of the uncertainties related to the
suspension of the original regime for tariff adjustments and the
Company's petition for voluntary reorganization in an Argentine
Court on June 17, 2010.
MF GLOBAL: To File Mass Claim Objections
----------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the MF Global Holdings Ltd. Chapter 11 trustee
proposed procedures for streamlining the reduction of $11.3
billion in 1,800 claims asserted against the holding company for
the liquidating commodity broker.
According to the report, Louis Freeh, the holding company trustee,
proposed in papers filed last week that he be permitted to settle
claims without court approval so long as the reduction is less
than $50,000 from the amount claimed. If the claim was more than
$500,000, Mr. Freeh said he will give notice of the proposed
settlement to James Giddens, the trustee liquidating the brokerage
subsidiary. For a larger claim, Mr. Freeh wants the ability to
settle if no one objects after notice is given. The claim-
settlement process wouldn't apply to claims by other MF Global
companies.
The report relates that the proposal, if approved by the
bankruptcy judge at a Nov. 15 hearing, would permit Mr. Freeh to
file omnibus objections seeking to reduce 200 claims at a time.
Last week, Mr. Giddens lost the first round in a lawsuit in the
U.K. on a claim he has against the liquidators of the U.K.
subsidiary.
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: Customers Add PwC to Securities Class Action
-------------------------------------------------------
Stewart Bishop at Bankruptcy Law360 reports that customers of MF
Global Holdings Ltd. on Monday added PricewaterhouseCoopers LLP to
the fraud class action over MF Global's collapse, accusing the
accounting company of failing to properly evaluate safeguards for
protecting the securities company's customer funds.
Bankruptcy Law360 relates that the investors brought the
consolidated amended complaint in New York federal court,
restating allegations against former MF Global CEO Jon S. Corzine,
along with other former executives at MF Global and its MF Global
Inc. unit, but adding London-based professional services giant PwC
to the mix.
About MF Global
New York-based MF Global (NYSE: MF) -- http://www.mfglobal.com/
-- is one of the world's leading brokers of commodities and
listed derivatives. MF Global provides access to more than 70
exchanges around the world. The firm is also one of 22 primary
dealers authorized to trade U.S. government securities with the
Federal Reserve Bank of New York. MF Global's roots go back
nearly 230 years to a sugar brokerage on the banks of the Thames
River in London.
MF Global Holdings Ltd. and MF Global Finance USA Inc. filed
voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-
15059 and 11-5058) on Oct. 31, 2011, after a planned sale to
Interactive Brokers Group collapsed. As of Sept. 30, 2011, MF
Global had $41,046,594,000 in total assets and $39,683,915,000 in
total liabilities. It is easily the largest bankruptcy filing so
far this year.
Judge Honorable Martin Glenn presides over the Chapter 11 case.
J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric
Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve
as bankruptcy counsel. The Garden City Group, Inc., serves as
claims and noticing agent. The petition was signed by Bradley I.
Abelow, Executive Vice President and Chief Executive Officer of
MF Global Finance USA Inc.
The Securities Investor Protection Corporation commenced
liquidation proceedings against MF Global Inc. to protect
customers. James W. Giddens was appointed as trustee pursuant to
the Securities Investor Protection Act. He is a partner at
Hughes Hubbard & Reed LLP in New York.
Jon Corzine, the former New Jersey governor and co-CEO of
Goldman Sachs Group Inc., stepped down as chairman and chief
executive officer of MF Global just days after the bankruptcy
filing.
U.S. regulators are investigating about $633 million missing from
MF Global customer accounts, a person briefed on the matter said
Nov. 3, according to Bloomberg News.
MF GLOBAL: Customers File Consolidated Amended Class Action Suit
----------------------------------------------------------------
Law firms and class plaintiffs -- former MF Global Inc. Customers
-- representing the former commodity customers of MF Global Inc.
and others filed a consolidated amended class action lawsuit in
the United States District Court for the Southern District of New
York against former MF Global Chief Executive Officer Jon Corzine,
other former MF Global directors and officers,
PricewaterhouseCoopers (PwC), and CME Group.
The complaint, filed by the Court-appointed interim co-lead
counsel for the class and the Court-appointed executive committee
consisting of counsel from Berger & Montague, Entwistle &
Cappucci, Susman Godfrey, Nisen & Elliot, Grant & Eisenhofer, and
Fleischman Law Firm, includes allegations of: violations of the
Commodity Exchange Act, breach of fiduciary duty, negligence,
tortious interference of contract and business advantage, and
conversion, among other causes of action.
"The defendants in this lawsuit acted wrongfully by not fulfilling
their common law and statutory duties to protect property and
segregate funds owned by the former customers of MF Global Inc.,"
said interim co-lead counsel Merrill Davidoff. "Through this
lawsuit, we aim to recover hundreds of millions of dollars in
damages from those who are responsible for this atrocity to return
to the victims of their actions, MF Global's former customers.
Our suit also seeks recoveries on behalf of the general creditors
of MF Global Inc., who were also injured as a result of the
misconduct of the defendants."
The consolidated amended class action complaint alleges causes of
action against Corzine, former CFO Henri Steenkamp, former COO
Bradley Abelow, former General Counsel Laurie Ferber, former
Assistant Treasurer Edith O'Brien, former CFO Christine Serwinski,
former Global Treasurer David Dunne, former Global Treasurer Vinay
Mahajan, MF Global's former independent auditor PwC, and MF
Global's former regulator CME Group.
"We are pleased that our lawsuit is moving forward with the filing
of this consolidated amended complaint," said interim co-lead
counsel Andrew Entwistle. "Over a year ago, the management of MF
Global employed recklessly permissive procedures and directed,
caused, authorized or allowed transfers of over $900 million in
customer property for use by the firm, while PwC and CME Group
enabled this behavior. It is time that these parties pay for
their improper behavior."
In addition to detailing the unlawful actions of Corzine and other
former directors and officers of MF Global, which led to an
unprecedented invasion of customer property, the complaint details
how PwC failed to adequately audit the internal controls over
customer funds as required by law and CME Group failed to
adequately regulate and supervise MF Global Inc. while knowing it
was not complying with obligations regarding customer funds
segregation.
Plaintiffs' counsel has entered into a cooperation agreement with
James W. Giddens, the Trustee for the liquidation of MF Global
Inc., approved by the Bankruptcy Court and the District Court for
the Southern District of New York. Under the cooperation
agreement, the Trustee assigned to plaintiffs' counsel and Class
Plaintiffs -- on behalf of customers and creditors of MF Global
Inc. -- certain claims against MF Global's former directors and
officers and PwC, which plaintiffs' counsel are pursuing along
with class action claims. Plaintiffs' counsel are continuing to
cooperate with the Trustee, and any recoveries will be distributed
through the Trustee's claims process.
About MF Global
New York-based MF Global (NYSE: MF) -- http://www.mfglobal.com/
-- is one of the world's leading brokers of commodities and
listed derivatives. MF Global provides access to more than 70
exchanges around the world. The firm is also one of 22 primary
dealers authorized to trade U.S. government securities with the
Federal Reserve Bank of New York. MF Global's roots go back
nearly 230 years to a sugar brokerage on the banks of the Thames
River in London.
MF Global Holdings Ltd. and MF Global Finance USA Inc. filed
voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-
15059 and 11-5058) on Oct. 31, 2011, after a planned sale to
Interactive Brokers Group collapsed. As of Sept. 30, 2011, MF
Global had $41,046,594,000 in total assets and $39,683,915,000 in
total liabilities. It is easily the largest bankruptcy filing so
far this year.
Judge Honorable Martin Glenn presides over the Chapter 11 case.
J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric
Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve
as bankruptcy counsel. The Garden City Group, Inc., serves as
claims and noticing agent. The petition was signed by Bradley I.
Abelow, Executive Vice President and Chief Executive Officer of
MF Global Finance USA Inc.
The Securities Investor Protection Corporation commenced
liquidation proceedings against MF Global Inc. to protect
customers. James W. Giddens was appointed as trustee pursuant to
the Securities Investor Protection Act. He is a partner at
Hughes Hubbard & Reed LLP in New York.
Jon Corzine, the former New Jersey governor and co-CEO of
Goldman Sachs Group Inc., stepped down as chairman and chief
executive officer of MF Global just days after the bankruptcy
filing.
U.S. regulators are investigating about $633 million missing from
MF Global customer accounts, a person briefed on the matter said
Nov. 3, according to Bloomberg News.
MICHAEL WOOD: Bankr. Court Has Jurisdiction to Issue Remand Order
-----------------------------------------------------------------
The U.S. Bankruptcy Appellate Panel for the Ninth Circuit affirmed
a bankruptcy court's order remanding to state court an unlawful
detainer action filed by Jose and Maria Goulart against Michael
Wood. The Goularts filed the unlawful detainer action on Nov. 10,
2011, in the California Superior Court, County of San Joaquin
(Cal. Sup. Ct. Case No. 272261).
Mr. Wood is a party to an October 2010 residential lease with
Corral Hollow Property Management as landlord/agent for the
Goularts, for real property located in Tracy, California. The
lease was month to month with a monthly rental rate of $1,175.
Mr. Wood sought bankruptcy protection, his second, by filing a pro
se Chapter 11 petition (Bankr. E.D. Calif. Case No. 10-49032) on
Nov. 1, 2010. The Bankruptcy Court entered a minute order Dec. 3,
2010, dismissing Mr. Wood's case. Mr. Wood appealed the order
dismissing his case, along with other orders, to the Bankruptcy
Appellate Panel, which affirmed the bankruptcy court's decision to
dismiss his case in Wood v. Johnson (In re Wood), 2011 WL 7145617
(9th Cir. BAP 2011). Mr. Wood appealed the Panel's decision to
the Ninth Circuit.
On Aug. 27, 2011, over eight months after Mr. Wood's second
bankruptcy case was dismissed, the Goularts served Mr. Wood with a
30-day notice to quit.
Over a year after his chapter 11 case was dismissed, on Dec. 15,
2011, Mr. Wood removed the unlawful detainer action to the
bankruptcy court (Adv. Case No. 11-02775). On Feb. 15, 2012, Mr.
Wood filed a status conference report with respect to the
adversary, asserting that the bankruptcy court had jurisdiction
over the matter because he was a party to all claims that were
removed and, therefore, the adversary related to his bankruptcy
case that was "pending."
On Feb. 16, 2012, the bankruptcy court held a status conference on
the matter. At the hearing, the bankruptcy court observed that
there was no stay pending appeal regarding the Dismissal Order.
On Feb. 17, 2012, the bankruptcy court issued the Remand Order
finding that it did not have jurisdiction over the removed case
because the underlying chapter 11 case was dismissed prior to the
removal.
On appeal, Mr. Wood contends that the Remand Order is void as a
matter of law because his appeal of the Dismissal Order divested
the bankruptcy court of jurisdiction over all matters regardless
of whether they pertain to the order on appeal.
The BAP said Mr. Wood is mistaken. Citing the ruling in Sherman
v. SEC (In re Sherman), 491 F.3d 948, 967 (9th Cir. 2007), the BAP
ruled that a timely filed notice of appeal divests a bankruptcy
court of jurisdiction "over those aspects of the case involved in
the appeal." The bankruptcy court retains jurisdiction over all
other matters in the case. The only caveat is that the court
"`may not alter or expand upon the judgment.'"
"If a party wants to stay all of the proceedings in bankruptcy
court while an appeal is pending, it must file a motion for a
stay," the BAP said. Mr. Wood neither sought nor obtained a stay
under Rule 8005 of the bankruptcy court's Dismissal Order.
Therefore, the bankruptcy court had jurisdiction to consider
whether the removed case was properly before it.
The case befor the BAP is, MICHAEL WOOD, Appellant, v. JOSE
GOULART; MARIA GOULART; UNITED STATES TRUSTEE, Appellees, BAP No.
12-1108-JuKiD (9th Cir. BAP). A copy of the BAP's Oct. 31
Memorandum is available at http://is.gd/cGwFIffrom Leagle.com.
MIDWEST MARKET: Market Square Shopping Center on Auction Block
--------------------------------------------------------------
Hayleigh Colombo at the Journal & Courier reports that sealed bids
to buy Market Square Shopping Center, a 27-acre property owned by
Midwest Commercial Investments VI LLC, were due Oct. 24, 2012.
The report relates the property went up for auction in September.
According to the report, Indianapolis-based auctioneer Bob Getts
of Cassidy Turley Auction Services said he couldn't comment on the
sale of the property or how many bidders wanted to purchase the
nearly 238,000-square-foot shopping center. Mr. Getts told the
Journal & Courier last month that about 10 private investors had
expressed interest.
The report says the successful bidder is required to make an
initial deposit of 10% of the bid price within five days of being
notified, along with the required $100,000 earnest money deposit
for all bidders.
The report adds the projected closing date is Nov. 23, 2012.
Mortgage lender Charter One Bank could foreclose on the center if
no party closes by the deadline, Tippecanoe County tax sale
coordinator Kelly Morehouse said in September.
An open house for interested bidders in September, hosted by
Cassidy Turley Auction Services, did not draw a big crowd, the
report says.
Midwest Commercial Investments X LLC, based in Indianapolis,
Indiana, filed for Chapter 11 bankruptcy (Bankr. S.D. Ind. Case
No. 10-03544) on March 18, 2010. Judge James K. Coachys oversees
the case. KC Cohen, Esq., serves as Midwest's counsel. In its
petition, Midwest estimated $1 million to $10 million in both
assets and debts. The petition was signed by Peter Dvorak,
managing member of the Company.
Affiliate Midwest Commercial Investments VI LLC sought Chapter 11
protection (Bankr. S.D. Ind. 09-16788) on Nov. 16, 2009.
MMM SO GOOD: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Mmm So Good, Ltd.
1611 Pavillion Place
Wilmington, NC 28403
Bankruptcy Case No.: 12-07694
Chapter 11 Petition Date: October 29, 2012
Court: U.S. Bankruptcy Court
Eastern District of North Carolina (Wilson)
Judge: J. Rich Leonard
Debtor's Counsel: J.M. Cook, Esq.
J.M. COOK, P.A.
5886 Faringdon Place, Suite 100
Raleigh, NC 27609
Tel: (919) 675-2411
E-mail: J.M.Cook@jmcookesq.com
Estimated Assets: $100,001 to $500,000
Estimated Debts: $1,000,001 to $10,000,000
A copy of the Company's list of its 20 largest unsecured creditors
filed with the petition is available for free at:
http://bankrupt.com/misc/nceb12-07694.pdf
The petition was signed by Robert Shapiro, president.
NEW KENT COURTHOUSE: Colonial Virginia Bank Cancels Tenancy
-----------------------------------------------------------
New Kent Courthouse Village is losing a tenant after Colonial
Virginia Bank closed its branch there, according to Richmond
BizSense.
The report notes New Kent Courthouse Village, a 21-acre mixed-use
development, has been in and out of bankruptcy and foreclosure.
The report relates the New Kent Courthouse Village project was
conceived as a $30 million development broken into two sections:
Preservation Park, the commercial center of the village, which had
seen some success in luring businesses, and Maidstone, which was
to consist of about 70 homes.
The report notes, after spending about $9 million on construction
of the first phase of the village, developer Grosjean Crump put
the project in Chapter 11 in September 2011 to prevent a
foreclosure by Essex Bank, one of three lenders owed money on the
development. Essex was looking to foreclose on its portion of the
Maidstone section.
The report adds the project stalled after it ran out of money.
The report relates Mr. Crump eventually requested to have the
bankruptcy dismissed, saying at the time that he was looking to
work out new terms with lenders and keep the project alive. But
in March, EVB began foreclosure proceeding on three acres at
Preservation Park, which included nine commercial development
parcels.
Based in New Kent, Virginia, New Kent Courthouse Village LLC filed
for Chapter 11 protection on Sept. 29, 2011 (Bankr. E.D. Va. Case
No. 11-36177). Judge Kevin R. Huennekens presides over the case.
Roy M. Terry, Jr., Esq., at Durrettecrump PLC represents the
Debtor. The Debtor estimated both assets of $1 million and
$10 million, and debts of between $10 million and $50 million.
NEWPAGE CORP: Wants to Access $850MM Financing From Goldman Sachs
-----------------------------------------------------------------
Jamie Mason, writing for The Deal, reports NewPage Corp. is
seeking approval of $850 million in exit financing from Goldman
Sachs Lending Partners LLC, JPMorgan Chase Bank NA, Barclays PLC,
Wells Fargo Bank NA, UBS Loan Finance LLC and J.P. Morgan
Securities LLC.
The report relates the Debtor's reorganization plan would be
funded by $850 million in exit financing, comprising of a $500
million secured term loan facility and a $350 million asset-based
revolving credit facility. The term loan would mature six years
from the closing of the loan and would be priced at a base rate
plus 600 basis points or a Eurodollar rate plus 700 basis points.
There is a 1.25% floor on the Eurodollar rate and a 2.25% floor on
the base rate. If the company defaults, the interest rate would
increase by 200 basis points, the report says.
The report notes Goldman Sachs Lending Partners, JPMorgan and
Barclays are the lenders on the term loan.
The report relates the revolver, which is being provided by
lenders led by J.P. Morgan Securities, Goldman Sachs Lending
Partners, Wells Fargo Bank and Barclays, would mature in five
years and be priced at an alternative base rate plus 75 to 125
basis points or LIBOR plus 175 to 225 basis points. If the
company defaults, the interest rate would increase by 200 basis
points. The revolver carries a 0.375% commitment fee and a 0.125%
letter of credit fee.
The report adds the Debtor is also looking to pay certain fees in
connection with the exit loan. The fees were not disclosed in
court filings.
According to the report, Judge Kevin Gross of the U.S. Bankruptcy
Court for the District of Delaware in Wilmington will consider
approval of the loan on Nov. 6. NewPage will also seek approval
of the disclosure statement explaining its amended reorganization
plan on the same day.
The report notes that, under the amended plan filed Oct. 5,
NewPage's first-lien noteholders would receive 100% of the
reorganized equity. The second-lien noteholders and certain
unsecured creditors would receive a pro rata share of $30 million
in cash and the first $50 million in proceeds from a litigation
trust. After the first $50 million, any additional proceeds from
the litigation trust would be shared between the first-lien and
second-lien noteholders and unsecured creditors. Trade creditors
are expected to recover 15% of their claims over a two-year
period.
About NewPage Corp
Headquartered in Miamisburg, Ohio, NewPage Corporation was the
leading producer of printing and specialty papers in North
America, based on production capacity, with $3.6 billion in net
sales for the year ended Dec. 31, 2010. NewPage owns paper mills
in Kentucky, Maine, Maryland, Michigan, Minnesota, Wisconsin and
Nova Scotia, Canada.
NewPage Group, NewPage Holding, NewPage, and certain of their U.S.
subsidiaries commenced Chapter 11 voluntary cases (Bankr. D. Del.
Case Nos. 11-12804 through 11-12817) on Sept. 7, 2011. Its
subsidiary, Consolidated Water Power Company, is not a part of the
Chapter 11 proceedings.
Separately, on Sept. 6, 2011, its Canadian subsidiary, NewPage
Port Hawkesbury Corp., brought a motion before the Supreme Court
of Nova Scotia to commence proceedings to seek creditor protection
under the Companies' Creditors Arrangement Act of Canada. NPPH is
under the jurisdiction of the Canadian court and the court-
appointed Monitor, Ernst & Young in the CCAA Proceedings.
Initial orders were issued by the Supreme Court of Nova Scotia on
Sept. 9, 2011 commencing the CCAA Proceedings and approving a
settlement and transition agreement transferring certain current
assets to NewPage against a settlement payment of $25 million and
in exchange for being relieved of all liability associated with
NPPH. On Sept. 16, 2011, production ceased at NPPH.
NewPage originally engaged Dewey & LeBoeuf LLP as general
bankruptcy counsel. In May 2012, Dewey dissolved and commenced
its own Chapter 11 case. Dewey's restructuring group led by
Martin J. Bienenstock, Esq., Judy G.Z. Liu, Esq., and Philip M.
Abelson, Esq., moved to Proskauer Rose LLP. In June, NewPage
sought to hire Proskauer as replacement counsel.
NewPage is also represented by Laura Davis Jones, Esq., at
Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, as
co-counsel. Lazard Freres & Co. LLC is the investment banker, and
FTI Consulting Inc. is the financial advisor. Kurtzman Carson
Consultants LLC is the claims and notice agent.
In its balance sheet, NewPage disclosed $3.4 billion in assets and
$4.2 billion in total liabilities as of June 30, 2011.
The Official Committee of Unsecured Creditors selected Paul
Hastings LLP as its bankruptcy counsel and Young Conaway Stargatt
& Taylor, LLP to act as its Delaware and conflicts counsel.
NXA INC: Subject to TSX Continued Listing Review
------------------------------------------------
NXA INC. has received correspondence from the Compliance &
Disclosure Department of the TSX Venture Exchange (the "TSXV")
indicating that the TSXV has determined that the Company has more
than one Tier 2 continued listing requirement ("CLR") deficiency.
The deficiencies identified relate to the Activity and Assets &
Operations Requirements for an issuer classified under the Mining
Industry Segment. If the Company has not provided the TSXV with a
submission on or before January 22, 2013 and/or has not satisfied
the TSXV that it meets all Tier 2 CLR, the TSXV will proceed to
transfer the Company's listing to the NEX board of the TSXV,
without further notice. The Issuer intends to respond to the TSXV
in connection with this correspondence.
ORIENTAL TRADING: Berkshire Deal No Impact on Moody's B2 Rating
---------------------------------------------------------------
Moody's Investors Service said Oriental Trading Company, Inc.'s
("OTC" - B2 positive) announcement that it has agreed to be
acquired by Berkshire Hathaway (LT Issuer Rating - Aa2/Prime-
1/stable) is a credit positive for OTC, though there is no
immediate rating impact. Moody's thinks that OTC will benefit from
ownership by the higher rated Berkshire Hathaway, and that this
transaction should provide OTC with stable long term ownership.
This transaction, when concluded, is expected to trigger the
change of control provisions in OTC's existing debt, at which time
this debt is expected to be repaid in full. Assuming the
transaction concludes on the terms currently announced, Moody's
anticipates that it will withdraw all of OTC's ratings upon
closing of the transaction.
The principal methodology used in rating Oriental Trading was the
Global Retail Industry Methodology published in June 2011. Other
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the U.S., Canada and EMEA
published in June 2009.
Headquartered in Omaha Nebraska, Oriental Trading is a catalog
retailer of party goods and novelty items.
PATRIOT COAL: To Shut Down Kentucky Mine by End of 2012
-------------------------------------------------------
Liz Hoffman at Bankruptcy Law360 reports that Patriot Coal Corp.
said Friday it will shutter a Kentucky mine by the end of the
year, becoming the latest in a string of companies to cut back as
cheap natural gas and new environmental regulations dampen demand
from power plants.
Bankruptcy Law360 says the Bluegrass Mine Complex, which produced
1.2 million tons of coal last year, joins more than three dozen
coal mines that have been closed this year.
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: Notice of Transfer of Claim Entered Nov. 5
--------------------------------------------------------
A notice of transfer of claim was made Monday in the Chapter
11 cases of Patriot Coal Corporation, et al., to wit:
Debtor Catenary Coal Company, LLC
Transferee Sierra Liquidity Fund, LLC
Transferor Summersville Glass Inc.
Scheduled Amount of Claim $627.50
Claim # Not Disclosed
Transfer Date Sept. 25, 2012
Docket Entry 1515 (11/05/12)
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.
PETER PETER: Case Summary & 6 Unsecured Creditors
-------------------------------------------------
Debtor: Peter Peter Cottontail, LLC
10777 West Twain Avenue, Suite 225
Las Vegas, NV 89135
Bankruptcy Case No.: 12-23574
Chapter 11 Petition Date: October 29, 2012
Court: U.S. Bankruptcy Court
District of Arizona (Phoenix)
Judge: Randolph J. Haines
Debtor's Counsel: Michael W. Carmel, Esq.
MICHAEL W. CARMEL, LTD.
80 E. Columbus Avenue
Phoenix, AZ 85012-4965
Tel: (602) 264-4965
Fax: (602) 277-0144
E-mail: michael@mcarmellaw.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 six unsecured creditors filed
with the petition is available for free at:
http://bankrupt.com/misc/azb12-23574.pdf
The petition was signed by Randy Black, Jr., manager.
PETTINGILL ENTERPRISES: Claim Against Blackstone Still Alive
------------------------------------------------------------
Bankruptcy Judge Robert H. Jacobvitz denied the request of
Blackstone Equipment Leasing, L.P. f/k/a Blackstone Equipment
Financing, L.P., to dismiss a complaint filed by Pettingill
Enterprises, Inc.
Blackstone asserts that a prior ruling by Judge James Starzynski
forecloses PEI from asserting a fraudulent transfer claim.
Blackstone requests the Court to dismiss PEI's complaint under
Fed.R.Civ.P. 12(b)(6) for failure to state a claim, arguing that
res judicata and collateral estoppel bar PEI's claims.
The Court, however, held neither res judicata nor collateral
estoppel apply to PEI's claims raised in the adversary proceeding.
On May 31, 2011, and within two years prior to the filing of PEI's
bankruptcy petition, PEI sought to borrow funds from Blackstone.
To provide funding to PEI, Blackstone arranged an 'equipment
lease' which required PEI to first assign to Blackstone, as a
'sale' specific equipment then owned by PEI, which equipment is
listed on the Blackstone 'lease,' and then for PEI to 'lease' such
listed equipment back from Blackstone. PEI has asserted that the
'lease' referred to with Blackstone is actually a financing
arrangement whereby Blackstone loaned the Debtor funds, and took a
security interest in certain of PEI's assets, but Blackstone
asserts that such arrangement is a 'true lease,' and the Court has
not determined that the arrangement is a true lease.
On March 26, 2012, Blackstone filed a Motion for Relief from the
Automatic Stay as to Leased Equipment, or in the Alternative, for
Adequate Protection pursuant to 11 U.S.C. Sec. 365(D)(1). After
hearing oral arguments and testimony from all parties, in an oral
ruling on June 20, 2012, Judge Starzynski ordered that PEI
commence making monthly adequate protection payments to Blackstone
in the amount of $23,559.55, plus tax, for a total of $25,380.58,
with the first payment being due on July 2, 2012, and all
subsequent payments being due on the first of the month.
Blackstone asserts that Judge Starzynski's prior determination as
part of the stay litigation that the transaction constitutes a
true lease bars PEI under the doctrines of res judicata or
collateral estoppel from asserting a claim to avoid the
transaction as a fraudulent transfer.
Judge Jacobvitz disagrees with Blackstone. Even though PEI's
fraudulent transfer claim arises from the same transaction that
was the subject of the Stay Motion, the issue previously decided
is not identical to the issues now raised in the adversary
proceeding. Nor did PEI have a full and fair opportunity to
litigate its fraudulent transfer claim as part of the contested
Stay Motion litigation, Judge Jacobvitz pointed out.
The lawsuit is, PETTINGILL ENTERPRISES, INC., A New Mexico
corporation, Plaintiff, v. BLACKSTONE EQUIPMENT FINANCING, L.P., A
California Limited Partnership, Defendant, Adv. Proc. No. 12-1217
(Bankr. D. N.M.). A copy of Judge Jacobvitz's Nov. 2, 2012 order
is available at http://is.gd/2099B4from Leagle.com.
About Pettingill Enterprises
Based in Mountainair, New Mexico, Pettingill Enterprises, Inc. --
dba Mountainair Gravel Products and Mountainair Gravel Products,
LLC -- filed for Chapter 11 bankruptcy (Bankr. D. N.M. Case No.
12-10515) on Feb. 14, 2012. Judge James S. Starzynski oversees
the case. Arin Elizabeth Berkson, Esq., and George M. Moore,
Esq., at Moore, Berkson & Gandarilla, P.C., serve as the Debtor's
counsel.
In the petition, Pettingill Enterprises estimated $500,001 to
$1 million in assets, and $1 million to $10 million in debts. A
list of its 18 largest unsecured creditors is available for free
at http://bankrupt.com/misc/nmb12-10515.pdf The petition was
signed by David Ross Pettingill, Sr., president.
David Pettingill filed a Chapter 11 petition (Bankr. D. N.M. Case
No. 12-10549) on Feb. 16, 2012. The two cases are jointly
administered.
PLUM TV: To Halt Operations in 2013; Shuts Signal for Sun Valley
----------------------------------------------------------------
Brennan Rego at Idaho Mountain Express and Guide reports that Plum
TV has taken down the signal for its Sun Valley station on Cox
Communications' Channels 13 and 14.
The report notes Plum TV is a New York-based network of local
cable channels serving upscale resorts from Aspen to Miami. The
network suspended production of local content and closed
operations at its Sun Valley station (among others) in September
2011. The company laid off five employees when it closed the
Sun Valley station. However, the network continued to air
preprogrammed material on Cox's Channels 13 and 14 until Oct. 18.
"[Plum TV] had notified Cox their plans to cease operations in
2013," the report quotes Cox spokeswoman Gail Graeve as stating.
"Unfortunately, that was not the case. We were not given advance
notice of their plans to take down their signal on Oct. 18, 2012."
Plum TV, Inc., fdba Plum TV LLC, owner of television stations in
Colorado, eastern Long Island, New York; Martha's Vineyard and
Nantucket, Massachusetts; Miami and Idaho, filed a Chapter 11
petition (Bankr. S.D.N.Y. Case No. 12-10017) on Jan. 3, 2011, in
Manhattan. Adam L. Rosen, Esq., at Silverman Acampora LLP, in
Jericho, New York, serves as counsel to the Debtor. The Debtor
estimated up to $10 million in assets and up to $50 million in
liabilities as of Chapter 11 filing.
RANDANGO LLC: Case Summary & 7 Unsecured Creditors
--------------------------------------------------
Debtor: Randango, LLC
10777 W. Twain Avenue, Suite 255
Las Vegas, NV 89135
Bankruptcy Case No.: 12-23577
Chapter 11 Petition Date: October 29, 2012
Court: U.S. Bankruptcy Court
District of Arizona (Phoenix)
Judge: Sarah Sharer Curley
Debtor's Counsel: Michael W. Carmel, Esq.
MICHAEL W. CARMEL, LTD.
80 E. Columbus Avenue
Phoenix, AZ 85012-4965
Tel: (602) 264-4965
Fax: (602) 277-0144
E-mail: michael@mcarmellaw.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 seven largest unsecured
creditors filed with the petition is available for free at:
http://bankrupt.com/misc/azb12-23577.pdf
The petition was signed by Randy Black, Jr., manager.
RG STEEL: ArcelorMittal Pays $5.6 Million for Ore Pellets
---------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that RG Steel LLC was authorized last week to sell some
100 tons of iron ore pellets at the plant in Warren, Ohio, to
ArcelorMittal for about $5.6 million. CJ Betters Enterprises Inc.
paid $16 million for the Ohio plant itself. The iron ore wasn't
included in the sale.
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: Secures $4.4-Mil. Bid for West Virginia Plant
-------------------------------------------------------
Lance Duroni at Bankruptcy Law360 reports that RG Steel LLC has
received a $4.4 million offer for its facility in Wellsburg,
W.Va., one of the defunct steelmaker's last remaining assets,
according to a motion filed Friday in Delaware bankruptcy court.
Bankruptcy Law360 relates that the company asked U.S. Bankruptcy
Judge Kevin J. Carey to approve the sale of the RG Steel's Beech
Bottom Plant and surrounding 617 acres of land to State Route 2
LLC, which was forced to increase its initial $2.1 million bid
after several competing offers emerged.
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.
ROYAL CARIBBEAN: S&P Keeps 'BB' Rating on $650M Senior Notes
------------------------------------------------------------
Standard & Poor's Ratings Services said its ratings on Royal
Caribbean Cruises Ltd. remain unchanged following the $150 million
increase to the company's senior notes due 2022. The issue level
rating on the company's now $650 million notes remains 'BB'. "The
recovery rating remains '3', indicating our expectation of
meaningful recovery (50%-70%) in the event of a default," S&P
said.
Rating List
Royal Caribbean Cruises Ltd.
Corporate credit rating BB/Stable/--
Senior unsecured BB
Recovery rating 3
SAN BERNARDINO, CA: Skips Payments to Calpers, Suppliers
--------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that San Bernardino, California, reported to the
bankruptcy court that it was forced to delay payments to trade
suppliers and skip payment to the California Public Employees'
Retirement System so there would be enough cash to pay city
workers and maintain essential services. The report was filed on
Nov. 2 in U.S. Bankruptcy Court in Riverside, California, in
advance of the hearing to work out a schedule for litigation to
decide if the city is eligible for Chapter 9 municipal bankruptcy.
According the report, Calpers and municipal workers both contend
the city isn't eligible for municipal bankruptcy for multiple
reasons. The city wants litigation put on hold until another
status conference on Dec. 21.
The report relates that in the meantime, the city proposes that it
file papers on Nov. 30 laying out issues to be decided at the
eligibility hearing. Calpers and city workers could file their
papers on Dec. 14.
San Bernardino says it has eliminated $29.8 million of the
$45.8 million budget deficit that existed when the bankruptcy
began. The city council will hold another meeting on Nov. 19 to
adopt a proposal that would "improve" the cash flow crisis, the
city said in the court filing.
About San Bernardino
San Bernardino, California, filed an emergency petition for
municipal bankruptcy under Chapter 9 of the U.S. Bankruptcy Code
(Bankr. C.D. Calif. Case No. 12-28006) on Aug. 1, 2012. San
Bernardino, a city of about 210,000 residents roughly 65 miles
(104 km) east of Los Angeles, estimated assets and debts of more
than $1 billion in the bare-bones bankruptcy petition.
The city council voted on July 10, 2012, to file for bankruptcy.
The move lets San Bernardino bypass state-required mediation with
creditors and proceed directly to U.S. Bankruptcy Court.
The city is represented that Paul R. Glassman, Esq., at Stradling
Yocca Carlson & Rauth.
San Bernardino joins two other California cities in bankruptcy:
Stockton, an agricultural center of 292,000 east of San Francisco,
and Mammoth Lakes, a mountain resort town of 8,200 south of
Yosemite National Park.
SATCON TECHNOLOGY: Hires Greenberg Traurig, Milner Casgrain
-----------------------------------------------------------
BankruptcyData.com reports that Satcon Technology filed with the
U.S. Bankruptcy Court motions to retain Greenberg Traurig
(Contact: Jonathan Bell) as counsel at hourly rates ranging from
$245 to $955 and Milner Casgrain (Contact: Neil Rabinovitch) as
Canadian counsel for these hourly rates: partner at C$340 to
C$925, counsel at C$360 to C$1,000, associate at C$200 to C$520
and legal assistant/paralegal at C$100 to C$335.
About SatCon Technology
Based in Boston, SatCon Technology Corporation (NasdaqCM: SATC) --
http://www.satcon.com/-- and its wholly owned subsidiaries
provide utility-grade power conversion solutions for the renewable
energy market, primarily for large-scale commercial and utility-
scale solar photovoltaic markets.
Satcon Technology Corporation, along with six related entities,
filed Chapter 11 petitions (Bankr. D. Del. Case No. 12-12869) on
Oct. 17, 2012.
Satcon disclosed assets of $92.3 million and liabilities totaling
$121.9 million. Liabilities include $13.5 million in secured debt
owing to Silicon Valley Bank. There is another $6.5 million in
secured subordinated debt. Unsecured liabilities include $16
million on subordinated notes.
The Hon. Kevin Gross presides over the case. Dennis A. Meloro,
Esq., at Greenberg Traurig serves as the Debtors' counsel. Fraser
Milner Casgrain LLP acts as the general Canadian counsel. Lazard
Middle Market LLC serves as the Debtors' financial advisor and
investment banker. Epiq Bankruptcy Solutions, LLC, serves as the
Debtors' claims and noticing agent.
An official committee of unsecured creditors has not yet been
appointed in these cases by the Office of the United States
Trustee.
SELECT MEDICAL: Dividend No Impact Impact on Moody's 'B1' CFR
-------------------------------------------------------------
Moody's Investors Service commented that the announcement that
Select Medical Holdings Corporation (parent company of Select
Medical Corporation (collectively Select) will pay a special
dividend approximating $210 million is a credit negative. However,
the anticipated impact of the announcement has no immediate effect
on the ratings of the company, including the B1 Corporate Family
and Probability of Default Ratings.
The principal methodology used in rating Select was the Global
Healthcare Service Provider 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.
Select, headquartered in Mechanicsburg, PA, provides long-term
acute care hospital services and inpatient acute rehabilitative
care through its specialty hospital segment. The company also
provides physical, occupational, and speech rehabilitation
services through its outpatient rehabilitation segment. Select
recognized in excess of $2.9 billion in revenue, before
considering the provision for bad debt, in the twelve months ended
September 30, 2012.
SERVICE CORP: Moody's Rates $200MM Senior Unsecured Notes 'Ba3'
---------------------------------------------------------------
Moody's Investors Service assigned a Ba3 rating to Service
Corporation International's ("SCI") proposed issuance of $200
million of senior unsecured notes due 2020. The proceeds, along
with revolver borrowings, will be used to redeem the approximately
$180 million of 7.375% senior unsecured notes due in 2014, and pay
the associated call premium and transaction expenses. The Ba2
Corporate Family and Probability of Default ratings, as well as
all existing instrument ratings, remain unchanged. The ratings
outlook remains stable.
The refinancing enhances SCI's liquidity profile as it reduces
near-term maturity risk. The next material debt maturity is in
2015.
Ratings Rationale
The Ba2 Corporate Family Rating reflects SCI's leading market
position in the death care services industry and the stable cash
flows generated by its geographically diverse, difficult to
replicate portfolio of funeral and cemetery properties. The stable
ratings outlook anticipates continued near term cash flow
stability and modest revenue and profitability growth. The ratings
could be lowered if deteriorating operating results, increased
litigation exposure or an increase in debt leads Moody's to expect
debt to EBITDA to be sustained above 4 times and free cash flow to
debt to remain below 8%. Upward rating momentum could develop if
SCI achieves steady growth in comparable funeral and cemetery
volumes and sustains debt to EBITDA and free cash flow to debt at
about 3.0 times and 15%, respectively.
Rating (assessment) assigned:
$200 million senior unsecured notes due 2020 at Ba3 (LGD4 -- 63%)
The principal methodologies used in rating Service Corporation
International were the Global Business & Consumer Service Industry
Rating Methodology published in October 2010, and Loss Given
Default for Speculative-Grade Non-Financial Companies in the U.S.,
Canada and EMEA published in June 2009.
SCI is North America's largest provider of funeral, cemetery and
cremation products and services. The company operates an industry-
leading network of 1,429 funeral service locations and 374
cemeteries, which includes 215 funeral service/cemetery
combination locations. Moody's anticipates free cash flow in 2013
of about $250 million on revenue of about $2.5 billion.
SERVICE CORP: S&P Keeps 'BB' Corp. Credit Rating & Stable Outlook
-----------------------------------------------------------------
Standard & Poor's Ratings Services said its 'BB' corporate credit
rating on Service Corp. International remains unchanged. The
outlook is stable.
"At the same time, we assigned SCI's proposed $200 million senior
unsecured notes our 'BB-' (one notch below the 'BB' corporate
credit rating) issue-level rating with a recovery rating of '5',
indicating our expectation for modest (10% to 30%) recovery for
noteholders in the event of a payment default," S&P said.
"Our ratings on SCI incorporate the company's 'fair' business risk
profile, characterized by a narrow focus in the mature,
competitive death-care industry, as well as the company's
'significant' financial risk profile that reflects our expectation
for leverage of about 3.7x in 2012 and 2013. We expect low-single-
digit revenue growth and EBITDA margins above 23% in 2012 and
2013. SCI is the largest provider of death-care products and
services in North America," S&P said.
"Our 2012 and 2013 base-case assumptions incorporate limited
volume-driven opportunities within the company's at-need funeral
business, primarily due to enhancing product offerings in
cremation. SCI's cremation rate is over 40% of total funeral
revenues; we expect it to increase 1% annually. Cremation provides
substantially lower revenue per contract, but produces higher
margins. We expect flat revenues in its traditional funeral
business because of ongoing death-rate trends. We expect revenue
growth primarily will come from market-share gains through
acquisitions and from accelerated delivery of cemetery merchandise
from the growing preneed cemetery backlog. For the same reasons,
we expect higher EBITDA margins of 23% to be maintained. We expect
SCI's preneed backlog of about $7 billion to continue benefiting
from its sales force investment," S&P said.
"We also expect SCI to continue generating well over $200 million
of free operating cash flow in both 2012 and 2013. We expect SCI
will continue using free cash flow to fund both acquisitions and
share repurchases. We do not expect debt repayment to be a
priority during this period," S&P said.
"SCI's 'significant' financial risk profile reflects our
expectation for moderate EBITDA expansion, primarily stemming from
acquisitive growth. Absent any debt repayment or additional debt
needs, we believe debt outstanding will remain level. In our view,
this would result in leverage between 3.5x and 4x and funds from
operations to debt between 15% and 20% in 2012 and 2013," S&P
said.
SCI's "fair" business risk profile reflects the company's leading
position in a fragmented competitive field, demonstrated by its
large size (over 1,400 funeral homes and 380 cemeteries throughout
North America), which affords it scale efficiencies. With more
than $2 billion in annual sales (68% from funeral services and
merchandise and the rest related to cemetery properties), SCI is
by far the nation's largest cemetery and funeral home operator.
However, it currently captures only about 13% of the funeral and
cemetery market and faces a few smaller national and many smaller
regional competitors. The second largest competitor, Stewart
Enterprises Inc., is less than one-quarter of SCI's size.
"While SCI's business risk profile reflects its leading position,
it also reflects the inherent risks of operating in the mature
death-care industry, which holds limited growth prospects.
Currently, death rates have declined, attributable to a mild
winter and better preventive care. Lack of organic growth
increases pressure to pursue acquisitions. Additionally, there is
an industry shift in consumer preference for lower-cost cremation
services compared with traditional burials, pressuring revenue
expansion. However, over the longer term, the industry benefits
from an aging baby boomer population, which should eventually
support higher death rates," S&P said.
S&P views SCI's liquidity as adequate, with sources of cash
exceeding mandatory uses over the next year. S&P's assessment of
SCI's liquidity profile incorporates these expectations and
assumptions:
-- S&P expects sources of liquidity over the next 12 months to
exceed uses by at least 3x.
-- Sources of liquidity are supported by S&P's expectation of
about $350 million of operating cash flow, $152 million of
cash on hand, and $390 million available under its $500
million revolver as of Sept. 30, 2012.
-- Uses include about $115 million of capital expenditures and
annual dividend of about $45 million.
-- S&P expects liquidity sources to exceed uses even if EBITDA
declines by 15%, but there may be limited ability to absorb a
high-impact, low-probability event.
-- S&P expects the absence of covenant step-downs to keep SCI's
cushion on its debt covenants adequate at above 20%.
-- SCI's sizable investments in trust funds derived from
customer receipts for preneed funeral and cemetery services
and merchandise remain subject to market volatility and can
affect overall liquidity.
-- SCI's ability to accelerate delivery of some preneed
services/merchandise to release cash from its trusts is
included in our assessment of liquidity.
-- There are no significant debt maturities until 2015.
SERVICEMASTER CO: Disaster Recovery No Impact on Moody's B2 CFR
---------------------------------------------------------------
Moody's Investors Service said that ServiceMaster Clean
franchisees in regions affected by Hurricane Sandy should see
increased disaster recovery mitigation, construction and product
sales over the next two fiscal quarters. However, Moody's noted
that the higher expected revenue does not affect ServiceMaster's
B2 corporate family rating.
The ServiceMaster Company, based in Memphis, TN, is a national
provider of lawn care, termite and pest control, home service
contracts, cleaning and disaster restoration, house cleaning,
furniture repair and home inspection products and services through
company-owned operations and franchise licenses. Brands include:
TruGreen, Terminix, American Home Shield (AHS), ServiceMaster
Clean, Merry Maids, Furniture Medic and AmeriSpec.
SMF ENERGY: Hearing to Confirm Amended Liquidation Plan on Dec. 14
------------------------------------------------------------------
Hayley Kaplan, writing for The Deal, reports that Judge Raymond B.
Ray of the U.S. Bankruptcy Court for the Southern District of
Florida will consider confirmation of SMF Energy Corp.'s
liquidation plan on Dec. 14, 2012.
Under the company's first amended plan filed Oct. 16, a
liquidation trust would be created and a liquidating trustee would
distribute the proceeds to its creditors. Through the liquidation
plan, administrative and priority claims would be paid in full in
cash on the plan's effective date.
According to the amended plan, priority tax claims, totaling
approximately $2.2 million, would be paid either in installments
or in full in cash from the cash available in the liquidation
trust on the plan's effective date.
The report says secured lender Wells Fargo Bank NA has already
received $11.09 million in total payments from the company during
its bankruptcy case, including over $10 million from the proceeds
of SMF Energy's sale its assets. The remaining portion of Wells
Fargo's claim, which is roughly $125,000, remains unpaid and
disputed, court documents said.
The report adds other secured creditors would receive the proceeds
of the collateral securing its claims or the collateral would be
returned to the lender.
The report says allowed convenience claims, totaling approximately
$100,000, would receive a 100% recovery on the plan's effective
date from the cash available in the liquidation trust after all
other creditors have been paid in full.
The report further says general unsecured creditors, owed
approximately $7.3 million, would receive a pro rata distribution
of its claims on the effective date from the cash available in the
liquidation trust after all other creditors have been paid in
full.
The report adds equity interests would be wiped out, however,
equity holders would receive distributions on a pro rata basis
from the liquidation trust after all other creditors have been
paid.
The report notes the plan's disclosure statement was approved on
Oct. 22, 2012.
The report says SMF Energy's chief restructuring officer Soneet R.
Kapila of Kapila & Co. would be the company's liquidating trustee.
About SMF Energy
SMF Energy Corporation, a provider of fuel and lubricants for the
trucking, manufacturing and construction industries, and three of
its subsidiaries filed for Chapter 11 bankruptcy (Bankr. S.D. Fla.
Lead Case No. 12-19084) on April 15, 2012. The affiliates are SMF
Services, Inc., H&W Petroleum Company, Inc., and Streicher Realty,
Inc. Fort Lauderdale, Florida-based SMF Energy -- dba Streicher
Mobile Fueling and SMF Generator Fueling Services -- disclosed
$37.0 million in assets and $25.17 million in liabilities as of
Dec. 31, 2011.
SMF sought bankruptcy protection after Wells Fargo Bank, N.A.,
shut off access to a revolving credit loan and declared a default.
The bank is owed $11.2 million, including $8 million on a
revolving credit secured by all assets. SMF Energy disclosed
$16,387,456 in assets and $31,160,009 in liabilities as of the
Chapter 11 filing.
On March 22, 2012, the Company appointed Soneet Kapila of Kapila &
Company, Ft. Lauderdale, Florida, as its chief restructuring
officer.
Judge Raymond B. Ray oversees the case. Lawyers at Genovese
Joblove & Battista, P.A., serves as the Debtors' counsel. Trustee
Services Inc. serves as claims agent. Bayshore Partners, LLC,
serves as their investment banker. The petition was signed by
Soneet R. Kapila, the CRO.
The Debtors tapped Harry Stampler and Stampler Auctions for the
sale and liquidation of the assets of the Debtors located at 200
West Cypress Creek Road, Suite 400, Fort Lauderdale, Florida
through an auction sale scheduled for July 19, 2012, at the
Property.
Steven R. Turner, the Assistant U.S. Trustee 21, appointed three
members to the Official Committee of Unsecured Creditors. Robert
Paul Charbonneau and the law firm of Ehrenstein Charbonneau
Calderin represent the creditors.
The Debtors entered into an agreement for Sun Coast Resources to
acquire assets associated with the Debtors' business in their
various operating locations in the State of Texas for $4 million,
absent higher and better offers. The Texas assets yielded no
competing bids from other parties. Competing bids were submitted
with respect to the assets and vehicle outside Texas, under which
Sun Coast was also the stalking horse bidder with a total offer of
$5 million. The auction raised the value of the assets by $1.75
million. The sales, which closed in June, generated $10.75
million.
The Debtors in August filed a Plan of liquidation. Wells Fargo
Bank N.A., the secured lender, has been partly paid from the sale
proceeds, pursuant to the cash collateral order. Holders of
unsecured claims estimated to total $5.7 million will recover up
to 70%. Each holder of an unsecured claim not more than $1,000 or
who elect to reduce the claim to $1,000 will recover 100% in cash
on the effective date. Holders of equity interests will only
receive distributions after claimants are paid in full.
SOLYNDRA LLC: District Court Won't Stay Implementation of Plan
--------------------------------------------------------------
Peg Brickley, writing for Dow Jones' Daily Bankruptcy Review,
reports that Chief District Judge Gregory Sleet on Monday refused
to bar Solyndra LLC from putting its Chapter 11 plan into effect
while the Internal Revenue Service appeals a decision confirming
the plan.
"I'm going to deny the government's motion to stay" Solyndra 's
Chapter 11 plan, Judge Sleet said at a hearing in the U.S.
District Court in Wilmington, Del. He said the U.S. produced "no
proof to support its contention" that Solyndra 's Chapter 11 plan
was, in essence, a tax dodge.
Dow Jones notes Judge Sleet's ruling allows the failed solar-power
company that got caught up in presidential campaign politics to
wrap up its final affairs on the eve of the election.
Dow Jones relates Judge Sleet's refusal to hold Solyndra in
bankruptcy leaves for another day an IRS attack on tax breaks
keyed to Solyndra's losses. Those breaks could potentially
translate into more than $300 million in future savings for
Solyndra's private equity backers, including a fund connected to
George Kaiser, a fundraiser for President Barack Obama.
"The government is entitled to two bites at the apple," Judge
Sleet said, according to the report.
Dow Jones notes Judge Sleet said Monday he saw no errors in
Bankruptcy Judge Mary Walrath's evaluation of Solyndra 's course
out of bankruptcy and no reason to overturn confirmation of the
plan.
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the U.S. District Court scheduled a hearing Nov. 5 at
3:00 p.m. to consider the IRS's bid to stop former solar-panel
maker from implementing the reorganization plan approved by the
bankruptcy court in an Oct. 22 confirmation order.
According to the Bloomberg report, the IRS appealed on Nov. 1,
contending the plan never should have been confirmed because the
"principal purpose is tax avoidance." In papers seeking a stay
pending appeal, the IRS said Solyndra will emerge from bankruptcy
with no employees, no tangible assets, and no business aside from
utilizing $1 billion in net operating-loss tax carryforwards.
The report relates the IRS wanted Judge Sleet to prevent
implementation of the plan, known technically as a stay pending
appeal, to assure that the appeal won't be dismissed later under a
theory know as equitable mootness. The doctrine allows an
appellate court to dismiss an appeal if the plan has been
implemented and it would be unfair to unravel the transactions.
Judge Sleet will consider the IRS's request for an interim stay
while he decides whether to give a longer stay as the appeal goes
forward. If Judge Sleet doesn't interpose a stay, the interim
stay imposed by the bankruptcy judge and extended by the parties
was to expire Nov. 4.
According to the Bloomberg report, Solyndra's corporate owner 360
Degree Solar Holdings Inc. and the official creditors' committee
filed papers opposing a stay. They claim there will be prejudice
from holding up the plan because unsecured creditors won't receive
the promised 3% recovery on their claims. About 800 employees
also won't receive severance payments under the plan.
The IRS contends that U.S. Bankruptcy Judge Mary Walrath committed
legal error in confirming the plan because she only ruled that the
plan had a legitimate purpose. The IRS says she should have
weighed the various purposes of the plan to determine the
"principal purpose." The committee and 360 Degree say the
principal purpose is payment to creditors, who might receive
nothing were there no plan confirmation.
The appeal is U.S. v. Solyndra LLC (In re Solyndra LLC), 12-01380,
U.S. District Court, District of Delaware (Wilmington).
About Solyndra LLC
Founded in 2005, Solyndra LLC was a U.S. manufacturer of solar
photovoltaic solar power systems specifically designed for large
commercial and industrial rooftops and for certain shaded
agriculture applications. The Company had 968 full time employees
and 211 temporary employees. Solyndra has sold more than 500,000
of its panels since 2008 and generated cumulative sales of over
$250 million.
Fremont, California-based Solyndra and affiliate 360 Degree Solar
Holdings Inc. sought Chapter 11 bankruptcy protection (Bankr. D.
Del. Lead Case No. 11-12799) on Sept. 6, 2011. Solyndra is at
least the third solar company to seek court protection from
creditors since August 2011.
Judge Mary F. Walrath presides over the Debtors' cases. The
Debtors are represented by Pachulski Stang Ziehl & Jones LLP as
legal adviser. AlixPartners LLP serves as noticing claims and
balloting agent. Imperial Capital LLC serves as the company's
investment banker and financial adviser. The Debtors also tapped
former Massachusetts Governor William F. Weld, now with the law
firm McDermott Will & Emery, to represent the company in
government investigations and related litigation. BDO Consulting,
a division of BDO USA, LLP, as financial advisor and BDO Capital
Advisors, LLC, serves as investment banker for the creditors'
panel.
The Official Committee of Unsecured Creditors of Solyndra LLC has
tapped Blank Rome LLP as counsel and BDO Consulting as financial
advisors.
In October 2011, the Debtors hired Berkeley Research Group, LLC,
and designated R. Todd Neilson as Chief Restructuring Officer.
Solyndra owed secured lenders $783.8 million, including
$527.8 million to the U.S. government pursuant to a federal loan
guarantee, and held assets valued at $859 million as of the
Petition date. The U.S. Federal Financing Bank, owned by the U.S.
Treasury Department, is the Company's biggest lender.
When they filed for Chapter 11, the Debtors pursued a two-pronged
strategy to effectuate either a sale of their business to a
"turnkey" buyer who may acquire substantially all of Solyndra's
assets or, if the Debtors were unable to identify any potential
buyers, an orderly liquidation of the assets for the benefit of
their creditors.
Solyndra did not receive acceptable offers to buy the business as
a going concern. Two auctions late last year brought in a total
of $8 million. A three-day auction in February generated another
$3.8 million. An auction in June generated $1.79 million from the
sale of 7,200 lots of equipment.
Solyndra filed a liquidating plan at the end of July and scheduled
a hearing on Sept. 7 for approval of the explanatory disclosure
statement. The Plan is designed to pay 2.5% to 6% to unsecured
creditors with claims totaling as much as $120 million. Unsecured
creditors with $27 million in claims against the holding company
are projected to have a 3% dividend.
SUPERMEDIA INC: Updates Creditors on Credit Situation
-----------------------------------------------------
Lauren K. Ohnesorge, staff Writer at Triangle Business Journal,
reports that SuperMedia has updated its shareholders on the credit
situation that could terminate the deal.
According to the report, in its third quarter results, SuperMedia
executives reiterated what DexOne executives have already said to
their investors -- that a joint steering committee has rejected
deal terms based on credit.
The report notes both companies are considering alternatives to
the deal structure in response, including refinancing through
Chapter 11 bankruptcy. SuperMedia offered no update on how those
considerations are proceeding, but did offer new details of its
own financing.
The report adds SuperMedia has an operating income of $125
million. Operating revenue was reported at $330 million, a decline
of $69 million from the same quarter last year. Net income was
$52 million, as advertising sales declined by 19.1%.
The report says the company's total indebtedness, as of Sept. 30,
was $1.475 billion.
The report relates, should the merger go through, the combined
company's headquarters would be in Dallas, Texas.
About Idearc Inc.
Headquartered in D/FW Airport, Texas, Idearc, Inc., now known as
SuperMedia Inc., is the second largest U.S. yellow pages
publisher. Idearc was spun off from Verizon Communications, Inc.
Idearc and its affiliates filed for Chapter 11 protection (Bankr.
N.D. Tex. Lead Case No. 09-31828) on March 31, 2009. The Debtors'
financial condition as of Dec. 31, 2008, showed total assets of
$1,815,000,000 and total debts of $9,515,000,000. Toby L. Gerber,
Esq., at Fulbright & Jaworski, LLP, represented the Debtors in
their restructuring efforts. The Debtors tapped Moelis & Company
as their investment banker; Kurtzman Carson Consultants LLC as
their claims agent.
William T. Neary, the United States Trustee for Region 6,
appointed six creditors to serve on the official committee of
unsecured creditors. The Committee selected Mark Milbank, Tweed,
Hadley & McCloy LLP, as counsel, and Haynes and Boone, LLP, co-
counsel.
Idearc completed its debt restructuring and its plan of
reorganization became effective as of Dec. 31, 2009. In
connection with its emergence from bankruptcy, Idearc changed its
name to SuperMedia Inc. Under its reorganization, Idearc reduced
its total debt from more than $9 billion to $2.75 billion of
secured bank debt.
Less than two years since leaving bankruptcy protection,
SuperMedia remains in quandary. Early in October 2011, Moody's
Investors Service slashed its corporate family rating for
SuperMedia to Caa1 from B3 prior. The downgrade reflects Moody's
belief that revenues will continue to decline at a double digit
rate for the foreseeable future, leading to a steady decline in
free cash flow. SuperMedia's sales were down 17% for the second
quarter of 2011 in a generally improving advertising sector.
Moody's ratings outlook for SuperMedia remains negative.
While SuperMedia is attempting to transition the business away
from its reliance on print advertising through development of
online and mobile directory service applications, Moody's is
increasingly concerned that the company will not be able to make
this change quickly enough to stabilize the revenue base over the
intermediate term. Further, the high fixed cost nature of
SuperMedia's business could lead to steep margin compression,
notwithstanding continued aggressive cost management.
TEMPUR-PEDIC INT'L: Moody's Assigns 'B1' CFR; Outlook Stable
------------------------------------------------------------
Moody's Investors Service assigned a B1 Corporate Family Rating to
Tempur-Pedic International and a Ba3 to its $1.77 billion senior
secured credit facility and a B1 to its senior unsecured notes.
The rating outlook is stable.
On September 27, 2012, Tempur-Pedic International signed an
agreement to purchase Sealy Mattress Company in a deal valued at
around $1.3 billion.
Proceeds from the transaction will be used to refinance Tempur-
Pedic's revolving credit facility borrowings, purchase the fully
diluted equity of Sealy Mattress Company and repay Sealy's senior
secured and subordinated notes. Sealy's B2 Corporate Family Rating
and the ratings on both notes will be withdrawn when the
acquisition, which is subject to standard regulatory reviews,
closes.
"In addition to potential cost and revenue synergies, we think the
transaction makes strategic sense because it broadens the product
offering across all price points for Tempur-Pedic, notably in the
specialty/premium brands, but it also enables the combined entity
to capture the pent up demand we think is building with middle
income consumers," said Kevin Cassidy, Senior Credit Officer at
Moody's Investors Service. Revenue and earnings have been
contracting at both Tempur-Pedic and Sealy owing partially to
increased competition for Tempur-Pedic and weak demand for Sealy's
mid-tier mattresses. "However, debt to EBITDA is likely to remain
around 4.5 times (currently 4.6 times proforma) through 2013 as
the company is committed to repaying debt with free cash flow," he
noted. "The continuing signs of stability in the housing market
and in consumer confidence should help offset accelerated
competitive pressures," he added.
The following ratings were assigned for Tempur-Pedic:
Corporate Family Rating at B1;
Probability-of-Default Rating at B1;
$650 million Senior Secured Term Loan A due 2017 at Ba3 (LGD 3,
41%);
$770 million Senior Secured Term Loan B due 2018 at Ba3 (LGD 3,
41%);
$350 million Senior Secured Revolving Credit Facility expiring
2017 at Ba3 (LGD 3, 41%);
$350 million Senior Unsecured Notes due 2020 at B3 (LGD 6, 91%);
Speculative grade liquidity rating at SGL 2;
The following ratings for Sealy remain under review for upgrade,
but will be withdrawn when the acquisition closes:
Corporate Family Rating at B2;
Probability of Default Rating at B2;
$350 million senior secured notes due 2016 at Ba3 (LGD 2, 23%);
$390 million senior subordinated notes due 2014 at Caa1 (LGD 5,
85%)
Ratings Rationale
Tempur-Pedic's B1 Corporate Family Rating is well positioned and
reflects its strength in specialty and premium mattresses, but
also the volatility in revenue, earnings and cash flow and the
continuing weakness in middle income discretionary consumer
spending -- a key driver of its Sealy subsidiaries volumes.
Earnings are sluggish due to increased competition, more
advertising costs for new brand launches, high raw material costs
and weak consumer demand for mid-price-point mattresses. The
rating also considers Tempur-Pedic's relatively high leverage with
proforma debt to EBITDA of 4.6 times, but also its strong proforma
interest coverage of around 3.5 times and mid-teen proforma EBITA
margins. Leverage is likely to remain around 4.5 times through the
end of 2013 as weak earnings will be offset by debt repayments
with free cash flow. The company's strong market position and
brand names for both Tempur-Pedic and Sealy, and the mattress
industry's historically strong fundamentals, anchor the rating.
While the company's limited exposure to the European southern
periphery countries minimizes its risk, its overall European
revenue mix at around 10%-15% constrains the rating as does the
possibility of sudden and sharp fiscal tightening in the United
States in 2013.
The stable outlook reflects Moody's view that Tempur-Pedic will
continue to reduce debt with free cash flow and maintain moderate
credit metrics. The lack of meaningful growth for the next 12 -18
months is consistent with a stable outlook.
Ratings could be downgraded if Tempur-Pedic's operating
performance meaningfully decreases. Key credit metrics driving a
downgrade would be debt to EBITDA sustained above 6 times (4.6
times proforma), interest coverage below 2 times (3.5 times
proforma) or single digit EBITA margins (14.6% proforma).
Tempur-Pedic's ratings could be upgraded if its operating
performance improves on a sustained basis and it continues to
reduce debt with free cash flow. Key credit metrics necessary for
an upgrade would be debt to EBITDA sustained around 4 times and
EBITA margins remaining in the mid teens.
Subscribers can find further details in the Tempur-Pedic Credit
Opinion published on Moodys.com.
The principal methodologies used in this rating were Global
Consumer Durables published in October 2010. Other methodologies
used include Loss Given Default for Speculative-Grade Non-
Financial Companies in the U.S., Canada and EMEA published in June
2009.
Tempur-Pedic manufacturers, distributes and sells specialty
bedding products which include visco-elastic mattresses as well as
conventional bedding products, including mattresses and box
springs. Proforma net sales for the twelve months ended September
2012 approximated $2.7 billion.
TERRESTAR CORP: Wins OK of 100% Plan for Unsecured Creditors
------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that TerreStar Corp. has a confirmed Chapter 11 plan about
nine months after subsidiary TerreStar Networks Inc. won approval
of its reorganization.
The report recounts that TerreStar Corp. filed for bankruptcy in
February 2011 after indirect subsidiary TerreStar Networks
abandoned a proposed reorganization plan that would have worked
out financial problems for both.
According to the report, unhooked from TerreStar Networks,
TerreStar Corp.'s primary asset is indirect ownership of 64
licenses from the Federal Communications Commission in the
1.4 gigahertz spectrum. The licenses had been leased to an
affiliate of LightSquared Inc. until April, when the license was
terminated following LightSquared's default. LightSquared
initiated its own bankruptcy reorganization in May.
The report relates that on emerging from bankruptcy, TerreStar
Corp. intends either to sell or lease the FCC licenses. In either
event, unsecured creditors are to be paid in full with three-year
notes equal to the amount of their claims, plus post-bankruptcy
interest. The notes will accrue interest at 10.5% to be paid with
more notes. The maturity of the notes can be extended for a year
by raising the interest rate.
TerreStar Corp.'s preferred shareholders will receive all the
new common stock. Existing common shareholders receive nothing.
The bankruptcy judge in New York signed a confirmation order on
Oct. 24 approving the plan.
TerreStar Network's plan was based on a sale of the business to
Dish Network Corp. for $1.38 billion. Unsecured creditors, the
only class entitled to vote, were almost unanimous in support.
About TerreStar Corp.
TerreStar Corporation and TerreStar Holdings, Inc., filed
voluntary Chapter 11 petitions with the U.S. Bankruptcy Court for
the Southern District of New York on Feb. 16, 2011.
TSC's Chapter 11 filing joins the bankruptcy proceedings of
TerreStar Networks Inc. and 12 other affiliates, which filed on
Oct. 19, 2010. The October Chapter 11 cases are procedurally
consolidated under TSN's Case No. 10-15446 under Judge Sean H.
Lane.
TSC is the parent company of each of the October Debtors. TSC has
four wholly owned direct subsidiaries: TerreStar Holdings, Inc.,
TerreStar New York Inc., Motient Holdings Inc., and MVH Holdings
Inc.
TSC's case is jointly administered with the cases of seven of the
October Debtors under the caption In re TerreStar Corporation, et
al., Case No. 11-10612 (SHL). The seven Debtor entities who
sought joint administration with TSC are TerreStar New York Inc.,
Motient Communications Inc., Motient Holdings Inc., Motient
License Inc., Motient Services Inc., Motient Ventures Holdings
Inc., and MVH Holdings Inc.
TSC is a Delaware corporation whose main asset is the equity in
non-Debtor TerreStar 1.4 Holdings LLC, which has the right to use
a "1.4 GHz terrestrial spectrum" pursuant to 64 licenses issued by
the Federal Communication Commission. TSC also has an indirect
89.3% ownership interest in TerreStar Network, Inc., which
operates a separate and distinct mobile communications business.
TerreStar Holdings is a Delaware corporation that directly holds
100% of the interests in 1.4 Holdings LLC.
TerreStar Networks -- TSN -- the principal operating entity of
TSC, developed an innovative wireless communications system to
provide mobile coverage throughout the United States and Canada
using satellite-terrestrial smartphones. The system, however,
required an enormous amount of capital expenditures and initially
produced very little in the way of revenue. TSN's available cash
and borrowing capacity were insufficient to cover its funding;
thus, forcing TSN to seek bankruptcy protection in October 2010.
TSC estimated assets and debts of $100 million to $500 million in
its Chapter 11 petition.
Ira S. Dizengoff, Esq., at Akin, Gump, Strauss, Hauer & Feld, LLP,
in New York, serves as counsel for the TSC and TSN Debtors.
Garden City Group is the claims and notice agent. Blackstone
Advisory Partners LP is the financial advisor. The Garden City
Group, Inc., is the claims and noticing agent in the Chapter 11
cases.
Otterbourg Steindler Houston & Rosen P.C. is the counsel to the
Official Committee of Unsecured Creditors formed in TSN's Chapter
11 cases. FTI Consulting, Inc., is the Committee's financial
advisor.
TerreStar Networks sold its business to Dish Network Corp. for
$1.38 billion. It canceled a June 2011 auction because there were
no competing bids submitted by the deadline.
TerreStar Networks previously filed a reorganization plan that
called for secured noteholders to swap more than $850 million in
debt for nearly all the equity in reorganized TerreStar. Junior
creditors, however, would see little recovery under that plan
while existing equity holders would be wiped out. TerreStar
Networks scrapped that plan in 2011 in favor of the auction.
In November 2011, TerreStar Networks filed a liquidating
Chapter 11 plan after striking a settlement with creditors. The
creditors' committee initiated lawsuits in July to enhance the
recovery by unsecured creditors.
Judge Lane approved on Feb. 14, 2012, TerreStar Networks Inc.'s
Chapter 11 plan to divvy up the proceeds from the sale to Dish
Network.
TEXAS RANGERS: Partners Want Ex-Owner to Unveil Capital Sources
---------------------------------------------------------------
Linda Chiem at Bankruptcy Law360 reports that Texas Rangers
Baseball Partners urged a state judge Friday to force former team
owner Tom Hicks to reveal how he got the money that he contributed
to capital improvement and operations of the baseball club he
purportedly steered into bankruptcy in 2010.
In filing a motion to compel in the 116th District Court in Dallas
County, the Rangers and court-approved administrator Alan M.
Jacobs are seeking a court order forcing Hicks to respond to their
written inquiries and to cough up documents, Bankruptcy Law360
relates.
About Texas Rangers
Texas Rangers Baseball Partners owned and operated the Texas
Rangers Major League Baseball Club, a professional baseball club
in the Dallas/Fort Worth Metroplex. TRBP is a Texas general
partnership, in which subsidiaries of HSG Sports Group LLC own a
100% stake. Controlled by Thomas O. Hicks, HSG also indirectly
wholly-owns Dallas Stars, L.P., which owns and operates the Dallas
Stars National Hockey League franchise. The Texas Rangers have
had five owners since the club moved to Arlington in 1972. Mr.
Hicks became the fifth owner in the history of the Texas Rangers
on June 16, 1998.
Texas Rangers Baseball Partners filed a Chapter 11 petition
(Bankr. N.D. Tex. Case No. 10-43400) on May 24, 2010. The
partnership filed simultaneously with the bankruptcy petition a
Chapter 11 plan that contemplated the sale of the club to an
entity formed by a group that includes the President of the Texas
Rangers, Nolan Ryan, and Chuck Greenberg, a sports lawyer and
minor league club owner. In its petition, Texas Rangers Baseball
Partners said it had both assets and debt of less than $500
million.
Martin A. Sosland, Esq., at Weil, Gotshal & Manges LLP, served as
bankruptcy counsel to the Debtor. Forshey & Prostok LLP acted as
conflicts counsel. Parella Weinberg Partners LP served as
financial advisor. Major League Baseball was represented by Sandy
Esserman, Esq., at Stutzman, Bromberg, Esserman & Plifka PC.
Lenders to the Texas Rangers sought to force the baseball team's
equity owners -- Rangers Equity Holdings, L.P. and Rangers Equity
Holdings GP, LLC -- into bankruptcy court protection (Bankr. N.D.
Tex. Case No. 10-43624 and 10-43625). The lenders, a group that
includes investment funds Monarch Alternative Capital and
Kingsland Capital Management, filed an involuntary bankruptcy
petition on May 28, 2010 against the two companies. The two
companies were not included in the May 24 Chapter 11 filing of
TRBP.
U.S. Bankruptcy Judge Stacey G. C. Jernigan on Aug. 5, 2010
confirmed the Debtor's fourth amended version of the Prepackaged
Plan of Reorganization. The judge's confirmation order cleared
the way for a group of Hall of Fame pitcher Nolan Ryan, and
Pittsburgh sports attorney and minor-league team owner Charles
Greenberg to purchase the Texas Rangers. The Ryan group paid
$385 million in cash and assumed $208 million in liabilities. The
Ryan group outbid Dallas Mavericks owner Mark Cuban at an auction.
TG INVESTMENTS: Case Summary & 5 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: TG Investments, Inc.
c/o George Shipman
3000 Green Mountain Drive, Suite 107-216
Branson, MO 65616
Bankruptcy Case No.: 12-50430
Chapter 11 Petition Date: October 29, 2012
Court: U.S. Bankruptcy Court
Eastern District of Missouri (St. Louis)
Judge: Kathy A. Surratt-States
Debtor's Counsel: Diana P. Brazeale, Esq.
BRAZEALE LAW FIRM LLC
500 West Main Street, Suite 203D
Branson, MO 65616
Tel: (417) 334-7494
Fax: (417) 334-7405
E-mail: diana@brazealelaw.com
Estimated Assets: $0 to $50,000
Estimated Debts: $1,000,001 to $10,000,000
A copy of the Company's list of its five unsecured creditors filed
with the petition is available for free at:
http://bankrupt.com/misc/moeb12-50430.pdf
The petition was signed by George Shipman, shareholder.
THQ INC: Hiring Centerview Partners to Explore Financing Options
----------------------------------------------------------------
Ian Sherr, writing for The Wall Stret Journal, reports that Agoura
Hills, Calif., game maker THQ Inc. said it has hired Centerview
Partners Holdings LLC to help it evaluate strategic financing
options after it announced delays for its games and a loss equal
to more than half of the cash left in its coffers.
According to the report, THQ said its current cash and debt were
within its internal projections, but it was still "exploring
strategic alternatives" for additional capital. The company said
it is working with Centerview Partners Holdings to both come up
with ways to raise capital and prepare for the $100 million notes.
THQ acknowledged that it hired Centerview Partners because its
cost cuts alone wouldn't create enough liquidity to allow it to
continue functioning.
The report also notes THQ said it was delaying the release of
"South Park: The Stick of Truth," a game based on the cult
favorite cartoon show about the adventures of children in a
fictional Colorado town. THQ said the game, originally planned for
March 5 next year, would now be released in "early fiscal 2014,"
sometime after March.
The report relates THQ said it recorded a loss of $21 million
during its second quarter on sales of $107.4 million. The company
has about $36.3 million of cash and equivalents, down nearly half
from the $76 million it had a year ago.
The report notes Michael Pachter, an analyst at Wedbush Securities
said that with debt considered, the company's cash reserves are
closer to $15 million. He added there are also roughly $100
million in convertible senior notes due in August 2014.
"Clearly, THQ faces a number of opportunities and challenges,"
Brian Farrell, THQ's chief executive, said in a statement. On a
conference call, he said that even though the company has
successfully cut costs, the delay of games like "South Park" will
contribute to THQ's cash crunch, according to the report.
ULTIMATE TRANSPORT: Files for Chapter 11 Bankruptcy Protection
--------------------------------------------------------------
Hayley Kaplan, writing for The Deal, reports Ultimate Transport
LLC has filed for Chapter 11 bankruptcy protection with
postpetition financing and cash collateral from its prepetition
lenders.
According to the report, Judge Jim D. Pappas of the U.S.
Bankruptcy Court for the District of Idaho in Boise would consider
the interim cash collateral and debtor-in-possession financing use
on Nov. 2, 2012. The DIP loan is in the form an accounts
receivable purchase and security agreement. The agreement would
continue Ultimate Transport's prepetition agreement with lender
England Carrier Services, a division of C.R. England Inc.
The report relates Ultimate Transport has sold its prepetition
accounts receivable to ECS through the accounts receivable
purchase agreement and would continue to do so postpetition.
Under the terms, Ultimate Transport would sell all of its
postpetition accounts receivable to ECS and receive 97.75% of the
receivables. The agreement would initially run for one year.
The report adds a monthly minimum of $90,000 must be maintained in
the Debtor's accounts. A maximum would be determined at the
discretion of ECS.
The report relates Ultimate Transport said its expenses exceed
$4,000 daily for fuel, maintenance, tires and compensation of
contract drivers. The Debtor funds its daily operations through
the sale of its accounts receivable. Ultimate Transport is
reliant on the agreement to provide it operating capital. Without
the funding, the company said it would not have "timely cash flow"
to pay its expenses.
The report notes, as of the petition date, ECS had purchased about
$291,000 of the debtor's accounts, which ECS has not yet
collected.
According to the report, without the agreement, Ultimate Transport
said it would be forced to cease operations immediately, which
would put its approximately 20 contract drivers out of work,
leaving the debtor to potentially incur liabilities for breach of
contract to deliver the loads its drivers are currently hauling.
The report, citing court documents, without the postpetition
financing, the company would be unable to propose a plan that
would allow it to reorganize its business. Ultimate Transport is
also seeking cash collateral use from ECS and a variety of other
secured creditors, the report adds.
The company's secured creditors include Mountain West Bank (owed
$140,642), Multi-Service Corp. ($58,348), Continental Bank NA
($307,000), the Internal Revenue Service ($53,595) and the Idaho
Department of Labor ($12,582).
The report says Continental is seeking to prohibit Ultimate
Transport from using its cash collateral because the Debtor is in
default on the $288,464 note it provided the company with, because
it hasn't made payments since Jan. 25.
The report says, according to court documents filed by
Continental, Ultimate Transport has entered into a sale agreement
for at least three pieces of the bank's collateral. It was
unspecified in court documents what the collateral was or whom it
was being sold to.
The report adds the company listed $360,522 in assets and $731,914
in liabilities in court documents.
Randal J. French of Bauer & French represents the Company as its
counsel. Jared M. Harris of Baked & Harris represents
Continental.
Ultimate Transport LLC -- http://www.ultimateidaho.net/--
licensed in 48 states and Canada where it hauls refrigerated and
dry cargo including nursery stock, produce, dairy products, frozen
desserts, fresh and frozen meat products, water and soda and dry
goods.
VANN'S INC: Business Sold for $4.5 Million
------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the assets of Vann's Inc., a six-store appliance and
consumer electronics retailer in Montana, will be sold for
$4.5 million under authorization given on Nov. 2 by the U.S.
Bankruptcy Court in Butte. The buyer is McMagic Partners LP.
A trustee for Vann's was appointed on Oct. 3, followed by
conversion to a liquidation in Chapter 7 on Oct. 26. Three days
later, the trustee sought approval for the sale, after negotiating
with several potential buyers.
About Vann's Inc.
Vann's Inc. -- http://www.vanns.com/-- a retailer of appliances
and consumer electronics with five stores in Montana, filed for
Chapter 11 protection (Bankr. D. Mont. Case No. 12-61281) in
Butte, Montana, on Aug. 5, 2012. The Debtor also owns outdoor
clothing and sports products at http://www.bigskycountry.com/
Vann's is owned by an employee stock ownership plan trust.
Vann's Inc. disclosed assets of $17.6 million and liabilities of
$14.4 million. Assets include $12.2 million cost-value of
inventory plus $1 million in current accounts receivable. The
Company owes $4 million to First Interstate Bank. It also owes
$4.8 million on an inventory loan from GE Commercial Distribution
Finance Corp.
Bankruptcy Judge John L. Peterson presides over the case. Vann's
hired Perkins Coie LLP's Alan D. Smith, Esq., and Brian A.
Jennings, Esq., as counsel; and Hamstreet & Associates, LLC, as
turnaround and restructuring advisors.
GE Commercial Distribution Finance Corporation is represented by
Gary Vincent, Esq., at Husch Blackwell LLP, and the Law Offices of
John P. Paul, PLLC. First Interstate Bank, the DIP Lender, is
represented by Benjamin P. Hursh, Esq., at Crowley Fleck PLLP.
The U.S. Trustee has formed a seven-member creditors committee.
The Committee is represented by Halperin Battagia Raicht, LLP, and
Ross Richardson.
The Court appointed Montana lawyer Richard J. Samson as Chapter 11
trustee.
VERTIS HOLDINGS: Court Approves Sale Procedures
-----------------------------------------------
BankruptcyData.com reports that Vertis Holdings announced that the
U.S. Bankruptcy Court approved its motion for procedures through
which the Company will evaluate any competing offers for its
businesses to ensure it receives the highest and best offer.
"We are confident we are on the right path and look forward to
efficiently completing these next key milestones to establish
continuity, financial stability and continued business investment
for our clients and employees." "We are very pleased with the
continued momentum of our Chapter 11 case, which has given us all
of the tools we need to provide our clients with consistently high
levels of quality and service - and meet all of our delivery
deadlines - as we work to achieve our financial and operational
objectives," said Vertis Holdings' C.E.O., Gerald Sokol, Jr. "We
are confident we are on the right path and look forward to
efficiently completing these next key milestones to establish
continuity, financial stability and continued business investment
for our clients and employees."
Vertis Holdings announced on October 10, 2012 that it had signed
an agreement with Quad/Graphics through which Quad/Graphics will
acquire substantially all of the assets comprising its businesses
for $258.5 million, which includes the payment of approximately
$88.5 million for current assets that are in excess of normalized
working capital requirements.
The Court scheduled a Nov. 30, 2012, auction, if necessary.
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.
WASHINGTON MUTUAL: Deutsche Says Noteholders Don't Belong in Suit
-----------------------------------------------------------------
Brian Mahoney at Bankruptcy Law360 reports that Deutsche Bank AG,
JPMorgan Chase Bank NA and the Federal Deposit Insurance Corp.
asked the D.C. Circuit on Friday to deny a bid by Washington
Mutual Bank NA noteholders to intervene in Deutsche Bank's
$10 billion suit over WaMu's allegedly shoddy mortgages.
Deutsche Bank and defendants JPMorgan and FDIC lodged separate
briefs arguing that the intervenors had not timely filed their
motion to intervene in the suit and had no immediate interest in
the case, according to Bankruptcy Law360.
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.
WASHINGTON MUTUAL: To Make Distribution to Trust Beneficiaries
--------------------------------------------------------------
BankruptcyData.com reports that WMI Liquidating Trust, formed
pursuant to the confirmed Seventh Amended Joint Plan of Affiliated
Debtors under Chapter 11 of the United States Bankruptcy Code of
Washington Mutual, announced that it will make a distribution, as
required under the Plan, of approximately $88 million to
beneficiaries of the Liquidating Trust in a manner consistent with
the Plan.
In accordance with the priority of payments described in Exhibit H
to the Plan, the distribution will be allocated to claimants in
"Tranche 2" and "Tranche 3" in these amounts: $9 million to
holders of allowed senior notes claims; $37 million to holders of
allowed senior subordinated notes claims; $3 million to holders of
general unsecured claims; and $39 million to holders of CCB
guarantees claims.
After the distribution, senior notes claims and senior
subordinated notes claims will have been paid entirely. For
purposes of the Plan, the distribution date will be November 1,
2012; however, due to factors including potential systemic
disruptions attributable to Hurricane Sandy, actual payments on
account of the distribution will not be initiated until November
5, 2012. Additionally, the Liquidating Trust is cognizant that
finalizing the distribution also could be subject to delay as a
result of such disruptions.
The distribution is possible primarily as a result of orders
entered by the U.S. Bankruptcy Court disallowing certain claims,
and thereby, permitting the release of a claim reserve of
approximately $78 million that has been established in conjunction
with various disputed claims, as well as approximately $10 million
for amounts received on account of other activities, including the
Liquidating Trust's interest in certain debt securities issued by
WMI Holdings Corp. and remaining cash amounts held at
subsidiaries.
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.
WINNER, LLC: Case Summary & 4 Unsecured Creditors
-------------------------------------------------
Debtor: Winner, LLC
P.O. Box 1069
Carolina Beach, NC 28428
Bankruptcy Case No.: 12-07706
Chapter 11 Petition Date: October 29, 2012
Court: U.S. Bankruptcy Court
Eastern District of North Carolina (Wilson)
Judge: Randy D. Doub
Debtor's Counsel: Trawick H. Stubbs, Jr., Esq.
STUBBS & PERDUE, P.A.
P.O. Drawer 1654
New Bern, NC 28563
Tel: (252) 633-2700
Fax: (252) 633-9600
E-mail: efile@stubbsperdue.com
Estimated Assets: $0 to $50,000
Estimated Debts: $1,000,001 to $10,000,000
A copy of the Company's list of its four unsecured creditors filed
with the petition is available for free at:
http://bankrupt.com/misc/nceb12-07706.pdf
The petition was signed by Walter W. Winner, president.
WOLVERINE PLASTICS: Case Summary & 11 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Wolverine Plastics, Inc.
1707 Heather Heights Drive
Crescent, PA 15046-3805
Bankruptcy Case No.: 12-25322
Chapter 11 Petition Date: October 29, 2012
Court: U.S. Bankruptcy Court
Western District of Pennsylvania (Pittsburgh)
Judge: Judith K. Fitzgerald
Debtor's Counsel: Gary H. Simone, Esq.
RISHOR SIMONE
101 E. Diamond Streetm, Suite 208
Butler, PA 16001
Tel: (724) 283-7215
Fax: (724) 283-0229
E-mail: rishor.simone1@1stcounsel.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 11 unsecured creditors is
available for free at http://bankrupt.com/misc/pawb12-25322.pdf
The petition was signed by Gordon Adam Hall.
Affiliate that filed separate Chapter 11 petition:
Entity Case No. Petition Date
------ -------- -------------
Wolverine Acquisition Company 12-24562 09/11/12
* Moody's Says Tax Hike Credit Neg. for Cigarette Manufacturers
---------------------------------------------------------------
Passage of Proposition B, which would substantially raise the tax
on a pack of cigarettes in Missouri, would be credit negative for
cigarette manufacturers, Moody's Investors Service says in a new
report, "US Tobacco Industry: Showdown in the Show-Me State: Big
Tobacco Faces an Excise-Tax Hike." The ballot initiative will come
before the public on November 6.
"The passage of the ballot, which would raise the tax on
cigarettes to $0.90 from $0.17 per pack, would likely lead to
lower cigarette sales as manufacturers pass the tax on to
Missouri's approximately 1.1 million smokers," says Senior Vice
President and author of the report Janice Hofferber. "All
cigarette manufacturers would be affected, including the "Big
Three" -- Altria Group, Reynolds American and Lorillard Tobacco
Co."
Missouri currently has the lowest tobacco tax in the US, Hofferber
says. And that is largely because the tobacco industry has spent
heavily to defeat tobacco-tax referendums in the past. This time,
however, they are holding off, because Proposition B would also
close a legal loophole that has allowed generic manufacturers to
avoid making payments under the 1998 Master Settlement Agreement.
"In addition to the higher state excise tax, Proposition B would
slap a 0.57-per-pack payment on generic and deep-discount
manufacturers, removing their price advantage over the largest
manufacturers," Ms. Hofferber says.
The financial impact, however, would be manageable for cigarette
manufacturers, since Missouri represents less than 3% of total US
cigarette sales. Further, the Big Three would gain pricing power
once their generic counterparts are forced to make payments under
the Master Settlement Agreement.
Proposition B has a good chance of passing, Ms. Hofferber says,
primarily because the major manufacturers are not spending
millions to defeat it. In addition, the measure devotes a large
percentage of the tax to school districts and higher education,
uses that are popular with the public. Missouri would also gain
increased funding for healthcare costs associated with smoking-
related illness by closing the Master Settlement Agreement
loophole.
And public opinion in the state may be shifting against smoking.
Hofferber notes that since the 2006 referendum failed, large
municipalities including St. Louis, Kansas City and Springfield
have passed strict smoking bans. Nonetheless, if the proposition
passes, other states are unlikely to follow suit, since Missouri
is one of just three states that has not had an excise tax
increase since 1999.
* Bankrupt's Misconduct Is No Bar to Suit by Trustee
----------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the U.S. Court of Appeals in Cincinnati adopted the
same policy as the sister appeals court in New Orleans by ruling
that a bankruptcy trustee can continue a lawsuit the bankrupt
hadn't formally disclosed as being among the assets. The case is
Stephenson v. Malloy, 11-1671, U.S. Court of Appeals for the Sixth
Circuit (Cincinnati).
* Nontraditional Families Lose Benefits in Missouri
---------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that nontraditional families don't have the same benefits
in bankruptcy as traditional families, at least in Missouri.
The U.S. Bankruptcy Appellate Panel in St. Louis was confronted
with a case where a bankrupt man was claiming a $350 exemption
under Missouri law for each of three minors who weren't his
natural children.
The man lived in a home with his two natural children and with a
woman who wasn't his wife and her three children. After he filed
Chapter 7 bankruptcy, the bankruptcy court denied him the $350
exemption for each of her children because the Missouri statute
made the exemption applicable to "each of such person's unmarried
dependent children."
U.S. Bankruptcy Judge Robert J. Kressel upheld the bankruptcy
court in ruling that the statute on its face applies only if the
minors are his children.
The case is Turpen v. Rouse (In re Turpen), 12-6039, U.S. 8th
Circuit Bankruptcy Appellate Panel.
* Social Security Benefits Not for Creditor Payments
----------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the federal courts of appeal are consistently coming
down on the side of bankrupt individuals in deciding that Social
Security benefits aren't included in the calculation of how much
someone must pay creditors to confirm a Chapter 13 plan. In the
space of one week, two U.S. circuit courts ruled in favor of the
bankrupts in rejecting arguments proffered by Chapter 13 trustees.
The newest decision was handed down Oct. 29 by the U.S. Court of
Appeals in New Orleans. Five days earlier, the Court of Appeals
in Denver reached the same conclusion. The newest case is
Beaulieu v. Ragos (In re Ragos), 11-31046, U.S. Court of Appeals
for the Fifth Circuit (New Orleans).
* Undistributed Money in Ch. 13 Goes to Bankrupt in Ch. 7
---------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that a divided U.S. Court of Appeals in Philadelphia ruled
on Oct. 26 that undistributed money held by a Chapter 13 trustee
on conversion of a case to Chapter 7 goes back to the bankrupt and
isn't distributed to creditors. The 2-1 decision for the Third
Circuit in Philadelphia, upholding the lower courts, was written
by Judge Thomas L. Ambro, who was a bankruptcy lawyer before
appointment to the circuit court bench. Judge Ambro said the
Bankruptcy Code by itself provided no "clear answer." He said
that "separate provisions seemingly lead to divergent results."
The case is Dehart v. Michael (In re Michael), 11-1992, U.S. Court
of Appeals for the Third Circuit (Philadelphia).
* Bankruptcies Continue Downward Trend in October
-------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that bankruptcies continued trending down with 101,300
filings in October, virtually unchanged at a daily rate from
September. Bankruptcies last month were the third-fewest this
year.
According to the report, for the first 10 months, bankruptcies are
off 14% compared with the same period last year, according to data
compiled from court records by Epiq Systems Inc. In 2011, there
were about 1.38 million total bankruptcies. The 700 Chapter 11
filings last month were the second-fewest this year and 23% below
the same month in 2011. October Chapter 11s were near the four-
year low set in September. Chapter 11 is where larger companies
sell assets or reorganize.
The report relates that commercial bankruptcies of all types in
October fell 16.9 percent from the same month in 2011.
Bankruptcies are down this year in 49 states, with filings
unchanged in South Carolina.
The report notes that states with the most bankruptcies per capita
are Tennessee, Nevada and Georgia, the same ranking for the last
three months. Last year's 1.38 million bankruptcies were 11.7
percent fewer than the 1.56 million in 2010, which recorded the
most bankruptcies since the all-time record of 2.1 million set in
2005.
In 2005, Americans were filing bankruptcy in advance of new laws
making it more difficult for individuals to cancel debt. In the
last two weeks before the law changed, 630,000 American sought
bankruptcy protection.
* Money Coming Back From Distressed Debt Trading
------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that paying 97.5 cents on the dollar for claims against
MF Global Inc. is "better than putting cash under the mattress,"
claims trader Brian Coppola said in explaining why someone would
buy a claim against the liquidating commodity broker when there is
so little room for appreciation.
According to the report, Mr. Coppola, from Fulcrum Capital in
Austin, Texas, said he's currently paying 97.5 cents for so-called
4d claims for MF Global commodity futures and options accounts.
In an interview he said he would pay more for a "very large" 4d
claim. So-called 30.7 customers with accounts for trading
futures or options on foreign exchanges are currently fetching
about 92 cents for their claims, he said.
No one is expecting the MF Global broker to pay more than
100 cents for customer claims, Mr. Coppola said, according to the
report. At 85 cents, it was a "great trade," according to Mr.
Coppola. Prices for MF Global claims are being pushed up, Coppola
said, because traders are "receiving distributions from Lehman and
Madoff and need somewhere to put it."
Today, the "fundamental underlying premise in distress debt
trading," according to Kevin Starke from CRT Capital Group LLC, is
that "there's a lot of money coming back now." The alternative,
"returning cash to investors, does not increase your longevity as
a hedge fund manager," Mr. Starke said in an interview, according
to the report.
The situation could change, Mr. Coppola warned. "If there were a
dozen mega bankruptcies, buyers would not be paying high 90s for
these claims. The market could easily drop if better opportunities
emerged," Mr. Coppola said.
Right now, paying 97.5 cents for an MF Global claim "fits the
bill" because it's better than investing in U.S. Treasury
securities, Mr. Starke said, according to the report.
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.
* Two Bank Failures Bring Year's Total to 49
--------------------------------------------
Banks in Illinois and Florida were shuttered by regulators on
Nov. 2, bringing the year's total to 49.
Twenty-one-branch Citizens First National Bank of Princeton,
Illinois had deposits of $869.4 million. The failure of First
National is estimated to cost the Federal Deposit Insurance Corp.
$45.2 million.
The three-branch Heritage Bank of Florida, from Lutz, Florida, had
$223 million in deposits. Its failure will cost $65.5 million to
the FDIC's insurance fund.
The two failures brought the total for the year to 49. In 2011,
there were 92 bank failures, compared with 157 in 2010. The
failures in 2010 were the most since 1992, when 179 institutions
were taken over by regulators.
2012 Failed Banks List
The FDIC was appointed as receiver for the closed banks. To
protect the depositors, the FDIC entered into a purchase and
assumption agreement with various banks that agreed to assume the
deposits of most of the closed banks. The FDIC also entered into
loss-share transactions on assets bought by the banks.
For this year, the failed banks are:
Loss-Share
Transaction Party FDIC Cost
Assets of Bank That Assumed to Insurance
Closed Bank Deposits & Bought Fund
Closed Bank (millions) Certain Assets (millions)
----------- ----------- ----------------- ------------
Citizens First $924.0 Heartland Bank and Trust $45.2
Heritage Bank of Fla. $225.5 Centennial Bank $65.5
NOVA Bank $483.0 No Acquirer $91.2
Excel Bank $200.6 Simmons First National $187.4
First East Side $67.2 Stearns Bank N.A. $9.1
GulfSouth Private $159.1 SmartBank $36.1
First United Bank $328.4 Old Plank Trail $48.6
Truman Bank $282.3 Simmons First National $34.0
First Commercial Bank $215.9 Republic Bank & Trust $63.9
Waukegan Savings Bank $88.9 First Midwest Bank $19.8
Jasper Banking Company $216.7 Stearns Bank, N.A. $58.1
Second Federal Savings $199.1 Hinsdale Bank & Trust $76.9
Heartland Bank $110.0 Metcalf Bank $3.1
Georgia Trust Bank $119.8 Community & Southern $20.9
The Royal Palm Bank $87.0 First National Bank $13.5
First Cherokee State $222.7 Community & Southern $36.9
Glasgow Savings Bank $24.8 Regional Missouri $0.1
Montgomery Bank & Trust $173.6 Ameris Bank $75.2
The Farmers Bank $163.9 Clayton Bank and Trust $28.3
Security Exchange Bank $151.0 Fidelity Bank $34.3
Putnam State Bank $169.5 Harbor Community Bank $37.4
Waccamaw Bank $533.1 First Community Bank $51.1
Farmers' and Traders' $43.1 First State Bank $8.9
First Capital Bank $46.1 F & M Bank $5.6
Carolina Federal $54.4 Bank of North Carolina $15.2
Alabama Trust Bank $51.6 Southern States Bank $8.9
Security Bank, N.A. $101.0 Banesco USA $10.8
Plantation Federal $486.4 First Federal Bank $76.0
Inter Savings Bank $473.0 Great Southern Bank $117.5
Bank of the Est. Shore $166.7 [No Acquirer] $41.8
Palm Desert Nat'l $125.8 Pacific Premier Bank $20.1
HarVest Bank of Md. $164.3 Sonabank $17.2
Fort Lee Federal $51.9 Alma Bank $14.0
Fidelity Bank $818.2 The Huntington Nat'l $92.8
Premier Bank $268.7 Int'l Bank of Chi. $64.1
Covenant Bank $95.7 Stearns Bank, N.A. $31.5
New City Bank $71.2 [No Acquirer] $17.4
Global Commerce Bank $143.7 Metro City Bank $17.9
Central Bank of Georgia $278.9 Ameris Bank $67.5
Home Savings of Amer. $434.1 [No Acquirer] $38.8
Charter National Bank $93.9 Barrington Bank $17.4
SCB Bank $182.6 First Merchants Bank $33.9
Patriot Bank $111.3 First Resource Bank $32.6
BankEast $272.6 U.S. Bank N.A. $75.6
Tennessee Commerce $1,185.0 Republic Bank & Trust $416.8
First Guaranty Bank $377.9 CenterState Bank $82.0
American Eagle $19.6 Capital Bank, N.A. $3.2
The First State Bank $416.8 Hamilton State Bank $416.8
Central Florida $79.1 CenterState Bank $24.4
In 2011 there were 92 failed banks, compared with 157 in 2010, 140
in 2009 and just 25 for 2008.
The failures in 2010 were the most since 1992, when 179
institutions were taken over by regulators.
A complete list of banks that failed since 2000 is available at:
http://www.fdic.gov/bank/individual/failed/banklist.html
813 Banks in Problem List
The FDIC's Quarterly Banking Profile for Dec. 31, 2011, says that
The number of institutions on the FDIC's "Problem List" declined
from 844 to 813 during the quarter, and total assets of "problem"
institutions fell from $339 billion to $319.4 billion. The number
of institutions in the "problem list" has decreased for the third
consecutive quarter.
The FDIC defines "problem" institutions as those with financial,
operational or managerial weaknesses that threaten their
viability.
The deposit insurance fund, which protects customer holdings up to
$250,000 per account in the event of a failure, saw its balance
increase in the fourth quarter to $9.2 billion (unaudited) from
$7.8 billion in the third quarter, the eighth consecutive
quarterly increase.
Problem Institutions Failed Institutions
-------------------- -------------------
Year Number Assets (Mil) Number Assets (Mil)
---- ------ ------------ ------ ------------
2011 813 $319,432 92 $34,923
2010 884 $390,017 157 $92,085
2009 702 $402,800 140 $169,700
2008 252 $159,405 25 $371,945
2007 76 $22,189 3 $2,615
2006 50 $8,265 0 $0
2005 52 $6,607 0 $0
2004 80 $28,250 4 $170
Federal regulators assign a composite rating to each financial
institution, based upon an evaluation of financial and operational
criteria. The rating is based on a scale of 1 to 5 in ascending
order of supervisory concern. "Problem" institutions are those
institutions with financial, operational, or managerial weaknesses
that threaten their continued financial viability. Depending upon
the degree of risk and supervisory concern, they are rated either
a "4" or "5." The number and assets of "problem" institutions are
based on FDIC composite ratings. Prior to March 31, 2008, for
institutions whose primary federal regulator was the OTS, the OTS
composite rating was used.
* Z Capital Promotes 4 to Senior Managing Director & Partner
------------------------------------------------------------
Z Capital Partners, L.L.C., a private equity firm focused on
revitalizing businesses, disclosed that four members of its team -
- Martin J. Auerbach, Esq., Christopher J. Kipley, Rahul Sawhney
and Jonathan Schmugge -- have been promoted to Senior Managing
Director and Partner. All four individuals were previously
Managing Directors.
James Zenni, President and CEO of Z Capital Partners, said, "We
are pleased to recognize the achievements and hard work of these
outstanding professionals. Our new Senior Managing Directors have
made outstanding contributions during their tenure with Z Capital
Partners and we look forward to their continued success."
Senior Managing Directors
Martin AuerbachMartin Auerbach is Senior Managing Director and
General Counsel to Z Capital, and was previously consulting
general counsel to Black Diamond Capital Management, L.L.C.
("BDCM"). Mr. Auerbach has established a distinguished career
spanning over thirty years. He is an attorney specializing in the
representation of financial institutions and their management, and
large international companies and their officers and directors,
principally in crisis management, regulatory and governmental
proceedings and internal inquiries.
Some of Mr. Auerbach's recent assignments include: consulting
special counsel to the board and corporation of United Rentals
Inc.; counsel to Paul Volcker in connection with Arthur Andersen;
counsel to the Vice Chair of Cendant; counsel to the President of
Global Crossing; counsel to senior Enron bankers; counsel to
significant participants in the crises at Computer Associates,
Adelphia and Imclone; SEC and NYAG investigations of market
timing, research analysts, and insurance industry practices, and
internal investigations for Citigroup, Jefferies and in connection
with Royal Ahold.
Prior to entering private practice, Mr. Auerbach served as an
Assistant United States Attorney responsible for large-scale tax
prosecutions, served as a law clerk for a Senior United States
District Judge and served on the Professional Staff of the Energy
and Commerce Committee of the United States House of
Representatives. Mr. Auerbach has developed wide-ranging
experience with complex financial, accounting and regulatory
issues in his over thirty years as an attorney and counselor at
law.
Mr. Auerbach holds a Juris Doctor degree with honors from Harvard
Law School and a B.A. with high honors from Harvard College.
Christopher Kipley Christopher Kipley is a Senior Managing
Director of Z Capital and is a member of the Investment Team. Mr.
Kipley is a member of the Board of Directors for Mrs. Fields
Famous Brands, LLC and Real Mex Restaurants, and was previously on
the boards of Automotive Aftermarket Group, LLC, Smarte Carte
Corporation and Sun World International, LLC.
Prior to joining Z Capital, Mr. Kipley was a Managing Director
with Black Diamond Capital Management, L.L.C. ("BDCM") where he
was responsible for managing distressed debt/private equity
investments. During his tenure with BDCM, Mr. Kipley managed
investments in debt securities ranging from par credits to deeply
distressed credits, was responsible for the ongoing monitoring of
portfolio investments, actively participated in all aspects of the
workout process for both in-court and out-of-court restructurings,
executed acquisitions and sales of portfolio companies, and
spearheaded the recruitment, hiring and retention of senior
management at portfolio companies.
Prior to joining BDCM in May 1998, Mr. Kipley was an Associate in
Bank of America NT&SA's corporate finance department, where he was
responsible for performing comprehensive credit analysis on
existing and prospective borrowers. Prior to joining Bank of
America NT&SA in August 1996, Mr. Kipley was a Senior Financial
Analyst in The Chase Manhattan Bank, N.A.'s corporate finance
department.
Over his career Mr. Kipley has participated on the steering
committees for or has been actively involved in the restructurings
of the following companies: ARI Holdings, Inc.; American Safety
Razor Company; Carmike Cinemas, Inc.; Classic Cable, Inc.; Diamond
Brands Operating Corp.; Fleming Companies, Inc.; Imperial Sugar
Company; Interstate Bakeries Corporation; Mrs. Field's Famous
Brands, LLC; New World Pasta Company; Sleepmaster, L.L.C.; Real
Mex Restaurants, Smarte Carte Corporation; Sun World
International, LLC; Waddington North America, Inc.; and WinsLoew
Furniture, Inc.
Mr. Kipley received his B.A. in Psychology from the University of
Michigan, where he graduated with distinction. Mr. Kipley is a CFA
charterholder.
Rahul Sawhney Rahul Sawhney is a Senior Managing Director of Z
Capital and is a member of the Investment Team. Mr. Sawhney is
currently on the board of directors of Neways Holdings, Ltd. and
previously was a member of the Board of Directors of Thomas
Nelson, Inc. Mr. Sawhney was actively involved in the
restructurings or recapitalizations of Thomas Nelson, Inc., Neways
Holdings, Ltd., and Focus Products Group, LLC. Mr. Sawhney has led
various operational and value creation initiatives including
guiding the strategic direction, affecting recapitalizations and
non-core asset sales and spearheading the recruitment, hiring and
retention of executive management for portfolio companies.
Prior to joining Z Capital, Mr. Sawhney was a member of the
investment team at Black Diamond Capital Management, L.L.C. where
he made and managed investments in non-investment grade companies
across a number of industries including Automotive, Consumer
Products, Containers & Packaging, Metals & Mining and Technology.
Mr. Sawhney joined BDCM from JPMorgan Chase & Co., with
significant credit and restructuring experience. During his nine-
year tenure at JPM, Mr. Sawhney had senior roles within Corporate
Risk Management, Debt Capital Markets and the Managed Assets
(distressed debt) group. At JPM, Mr. Sawhney had substantial
success in middle-market turnarounds and restructurings.
Mr. Sawhney received a Master of Business Administration degree
with honors from the University of Chicago and a Bachelor of
Technology in Electronics & Communications Engineering degree from
the National Institute of Technology, India. He is a member of
the CFA Institute and the Turnaround Management Association.
Jonathan Schmugge Jonathan Schmugge is a Senior Managing Director
and the Chief Financial Officer of Z Capital, and is responsible
for all aspects of Z Capital's accounting and financial reporting.
Prior to joining Z Capital, Mr. Schmugge was the former Chief
Financial Officer and Chief Accounting Officer of Black Diamond
Capital Management, L.L.C. ("BDCM") where he was responsible for
all aspects of BDCM's financial reporting, tax filings and
accounting.
During his ten-year tenure with BDCM, Mr. Schmugge managed an
accounting department of substantial size with responsibility for
all of BDCM's hedge fund and distressed debt/private equity
investments. Mr. Schmugge has extensive experience in the
accounting, finance and operations of privately-held investment
management companies.
Prior to joining BDCM in March 1997, Mr. Schmugge was a fund
accountant with Oppenheimer & Co., Inc.'s ("Oppenheimer") hedge
fund accounting department where he was responsible for daily
valuation and monthly reporting for several of Oppenheimer's hedge
funds. Prior to joining Oppenheimer in May 1996, Mr. Schmugge was
a fund accountant for Appaloosa Management, L.P. ("Appaloosa"),
where he was also responsible for accounting for Appaloosa's
management company.
Mr. Schmugge received his B.B.A. in Public Accounting from Hofstra
University. Mr. Schmugge received his CPA in 1995.
About Z Capital Partners
Z Capital Partners, L.L.C. -- http://www.zcap.net/-- is a leading
Chicago-based private equity firm that specializes in making
investments in distressed middle market companies utilizing the
restructuring and/or bankruptcy process, opportunistic
acquisitions and special situations. Z Capital utilizes its
operational and restructuring expertise to work with management on
enhancing enterprise value and achieving superior risk-adjusted
returns for its investors.
* Upcoming Meetings, Conferences and Seminars
---------------------------------------------
Nov. 7, 2012
AMERICAN BANKRUPTCY INSTITUTE
U.S./Mexico Restructuring Symposium
The Four Seasons, Mexico City, D.F.
Contact: 1-703-739-0800; http://www.abiworld.org/
Nov. 12, 2012
AMERICAN BANKRUPTCY INSTITUTE
Detroit Consumer Bankruptcy Conference
MGM Grand, Detroit, Mich.
Contact: 1-703-739-0800; http://www.abiworld.org/
Nov. 26, 2012
BEARD GROUP, INC.
19th Annual Distressed Investing Conference
The Helmsley Park Lane Hotel, New York, N.Y.
Contact: 240-629-3300 or http://bankrupt.com/
Nov. 29-30, 2012
MID-SOUTH COMMERCIAL LAW INSTITUTE
33rd Annual Bankruptcy & Commercial Law Seminar
Nashville Marriott at Vanderbilt, Nashville, Tenn.
Contact: 1-703-739-0800; http://www.abiworld.org/
Nov. 29 - Dec. 1, 2012
AMERICAN BANKRUPTCY INSTITUTE
Winter Leadership Conference
JW Marriott Starr Pass Resort & Spa, Tucson, Ariz.
Contact: 1-703-739-0800; http://www.abiworld.org/
Dec. 4-8, 2012
AMERICAN BANKRUPTCY INSTITUTE
ABI/SJUSL Mediation Training Symposium
St. John's University, Queens, N.Y.
Contact: 1-703-739-0800; http://www.abiworld.org/
Jan. 24-25, 2013
AMERICAN BANKRUPTCY INSTITUTE
Rocky Mountain Bankruptcy Conference
Four Seasons Hotel Denver, Denver, Colo.
Contact: 1-703-739-0800; http://www.abiworld.org/
Feb. 7-9, 2013
AMERICAN BANKRUPTCY INSTITUTE
Caribbean Involvency Symposium
Eden Roc Renaissance, Miami Beach, Fla.
Contact: 1-703-739-0800; http://www.abiworld.org/
Feb. 17-19, 2013
AMERICAN BANKRUPTCY INSTITUTE
Advanced Consumer Bankruptcy Practice Institute
Charles Evans Whittaker Courthouse, Kansas City, Mo.
Contact: 1-703-739-0800; http://www.abiworld.org/
Feb. 20-22, 2013
AMERICAN BANKRUPTCY INSTITUTE
VALCON
Four Seasons Las Vegas, Las Vegas, Nev.
Contact: 1-703-739-0800; http://www.abiworld.org/
Apr. 10-12, 2013
TURNAROUND MANAGEMENT ASSOCIATION
TMA Spring Conference
JW Marriott Chicago, Chicago, Ill.
Contact: http://www.turnaround.org/
Apr. 18-21, 2013
AMERICAN BANKRUPTCY INSTITUTE
Annual Spring Meeting
Gaylord National Resort & Convention Center,
National Harbor, Md.
Contact: 1-703-739-0800; http://www.abiworld.org/
June 13-16, 2013
AMERICAN BANKRUPTCY INSTITUTE
Central States Bankruptcy Workshop
Grand Traverse Resort, Traverse City, Mich.
Contact: 1-703-739-0800; http://www.abiworld.org/
July 11-13, 2013
AMERICAN BANKRUPTCY INSTITUTE
Northeast Bankruptcy Conference
Hyatt Regency Newport, Newport, R.I.
Contact: 1-703-739-0800; http://www.abiworld.org/
July 18-21, 2013
AMERICAN BANKRUPTCY INSTITUTE
Southeast Bankruptcy Workshop
The Ritz-Carlton Amelia Island, Amelia Island, Fla.
Contact: 1-703-739-0800; http://www.abiworld.org/
Aug. 8-10, 2013
AMERICAN BANKRUPTCY INSTITUTE
Mid-Atlantic Bankruptcy Workshop
Hotel Hershey, Hershey, Pa.
Contact: 1-703-739-0800; http://www.abiworld.org/
Aug. 22-24, 2013
AMERICAN BANKRUPTCY INSTITUTE
Southwest Bankruptcy Conference
Hyatt Regency Lake Tahoe, Incline Village, Nev.
Contact: 1-703-739-0800; http://www.abiworld.org/
Oct. 3-5, 2013
TURNAROUND MANAGEMENT ASSOCIATION
TMA Annual Convention
Marriott Wardman Park, Washington, D.C.
Contact: http://www.turnaround.org/
Nov. 1, 2013
AMERICAN BANKRUPTCY INSTITUTE
NCBJ/ABI Educational Program
Atlanta Marriott Marquis, Atlanta, Ga.
Contact: 1-703-739-0800; http://www.abiworld.org/
Dec. 2, 2013
BEARD GROUP, INC.
19th Annual Distressed Investing Conference
The Helmsley Park Lane Hotel, New York, N.Y.
Contact: 240-629-3300 or http://bankrupt.com/
Dec. 5-7, 2013
AMERICAN BANKRUPTCY INSTITUTE
Winter Leadership Conference
Terranea Resort, Rancho Palos Verdes, Calif.
Contact: 1-703-739-0800; http://www.abiworld.org/
The Meetings, Conferences and Seminars column appears in the
Troubled Company Reporter each Wednesday. Submissions via
e-mail to conferences@bankrupt.com are encouraged.
Last Updated: Sept. 15, 2012
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers"
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com/
On Thursdays, the TCR delivers a list of recently filed
Chapter 11 cases involving less than $1,000,000 in assets and
liabilities delivered to nation's bankruptcy courts. The list
includes links to freely downloadable images of these small-dollar
petitions in Acrobat PDF format.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
The Sunday TCR delivers securitization rating news from the week
then-ending.
For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911. For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors" Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland,
USA. Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine
Tumanda, Howard C. Tolentino, Joseph Medel C. Martirez, 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 ***