/raid1/www/Hosts/bankrupt/TCR_Public/121130.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Friday, November 30, 2012, Vol. 16, No. 333
Headlines
1555 WABASH: Plan Outline Okayed; Confirmation Hearing on Dec. 24
30DC INC: Medi7 Owner H. Pinskier Appointed Director
30DC INC: Delays Form 10-Q for Sept. 30 Quarter
77 GOLDEN GAMING: S&P Assigns 'B' Corp. Credit Rating
A123 SYSTEMS: US Government Expresses Concern Over Sale
ADAMIS PHARMACEUTICALS: Had $857,000 Net Loss in Sept. 30 Qtr.
AFFIRMATIVE INSURANCE: Incurs $29.5-Mil. Net Loss in Third Quarter
AIR MEDICAL: S&P Gives 'B' Rating on 2 New Senior Secured Issues
ALETHEIA RESEARCH: CIBC Wants to Terminate Firm as Subadviser
ALION SCIENCE: Board Adopts 2012 Code of Ethics and Conduct
AMBAC FINANCIAL: Reports $157.4 Million Net Gain in 3rd Quarter
AMBAC FINANCIAL: Restores Telephone System at NY Headquarters
AMERICAN AIRLINES: Pilots Set to Vote on Labor Deal
AMERICAN AIRLINES: Seeks Pilot Retirement Plan Amendment
AMERICAN AIRLINES: USAPA Seeks Access to Merger Related Info
AMERICAN AIRLINES: Bondholders Want Management Overhauled
AMERICAN APPAREL: Incurs $19 Million Net Loss in Third Quarter
AMERICAN MEDIA: Incurs $1.9 Million Net Loss in Sept. 30 Quarter
AMERICAN NATURAL: Incurs $1.2-Mil. Net Loss in Third Quarter
AMNON SHREIBMAN: Files Reorganization Plan
ANDERSON NEWS: Delaware Court Dismisses Downtown Newsstand Appeal
APPLIED MINERALS: Four Directors Elected to Board
ARMSTRONG ENERGY: Moody's Assigns 'B3' CFR/PDR; Outlook Stable
BAJA MINING: Incurs $151.8-Mil. Net Loss in Third Quarter
BERKELEY COFFEE: Inks Licensing Agreement with Coffee Holding
BIOFUEL ENERGY: Incurs $11.3 Million Net Loss in Third Quarter
BLACKBOARD INC: S&P Rates $500 Million Term Loan 'B+'
BLUEGREEN CORP: Reports $11.6-Mil. Net Income in Third Quarter
BROADCAST INTERNATIONAL: Incurs $711,000 Net Loss in 3rd Quarter
BROWNIE'S MARINE: Incurs $431,800 Net Loss in Third Quarter
CAPITOL BANCORP: Incurs $6.1-Mil. Net Loss in Third Quarter
CASCADE BANCORP: Posts $1.82 Million Net Income in Third Quarter
CECIL BANCORP: Incurs $15.8 Million Net Loss in Third Quarter
CHATTAHOOCHEE VALLEY: S&P Alters BB- Bond Rating Outlook to Stable
CHINA GREEN: Delays Form 10-Q for Third Quarter
CHINA TEL GROUP: Sells Shares to Kenneth Hobbs, et al.
CHINA TEL GROUP: Buys MVNO China Motion Telecom for $5.8 Million
CHRYSLER LLC: Product Liability Suit Goes Back to State Court
CLAIRE'S STORES: Expects to $363-Mil. in Third Quarter Sales
COMMONWEALTH BIOTECHNOLOGIES: Delays Form 10-Q for Third Quarter
COMMUNITY FIRST: Files Form 10-Q, Incurs 1.4MM Net Loss in Q3
COMMUNITY WEST: Files Form 10-Q, Posts $613,000 Net Income in Q3
CONFORCE INTERNATIONAL: Incurs $626,000 Net Loss in Sept. 30 Qtr.
COTTONWOOD CORNERS: Bankr. Court Won't Hear Jefferson-Pilot Suit
CUI GLOBAL: Incurs $463,000 Net Loss in Third Quarter
D.C. DEVELOPMENT: Wisp Resort's Exclusivity Periods Expire Dec. 9
DCB FINANCIAL: Posts $306,000 Net Income in Third Quarter
DETROIT, MI: Chapter 9 Bankruptcy "Messy Option"
DETROIT, MI: Moody's Cuts Rating on GOULT Bonds to 'Caa1'
DIAL GLOBAL: Incurs $71.2-Mil. Net Loss in Third Quarter
DIAL GLOBAL: Voluntarily Delists Common Stock on NASDAQ
DIGITAL ANGEL: Incurs $1.0-Mil. Net Loss in Third Quarter
DIGITAL DOMAIN: Delays Remaining Asset Auction Until December
DOLPHIN DIGITAL: Delays Form 10-Q for Third Quarter
DRUMM CORP: S&P Cuts Corp. Credit Rating to 'B' on Lower Earnings
DYCOM INDUSTRIES: S&P Affirms 'BB' CCR on Quanta Acquisition
E-DEBIT GLOBAL: Commences 1st Stage of Corporate Re-Organization
EAST COAST DIVERSIFIED: Asher Enterprises Owns 9.9% Equity Stake
EASTMAN KODAK: Accepts $830-Mil. Financing from Noteholders
EC DEVELOPMENT: Incurs $459,000 Net Loss in Third Quarter
ENERGY FOCUS: Incurs $928,000 Net Loss in Third Quarter
ENOVA SYSTEMS: Incurs $749,000 Net Loss in Third Quarter
ENVIRONMENTAL SOLUTIONS: Incurs $118,200 Net Loss in Third Quarter
EPAZZ INC: Delays Form 10-Q for Third Quarter
ERA GROUP: S&P Assigns 'B' Corporate Credit Rating; Outlook Stable
ESP RESOURCES: Incurs $1.1-Mil. Net Loss in Third Quarter
EXCO RESOURCES: Moody's Affirms 'B1' CFR/PDR; Outlook Stable
FIRST FINANCIAL: Incurs $751,000 Net Loss in Third Quarter
FIRST MARINER: Withdraws from Priam Capital Agreement
FOREST CITY: S&P Raises Senior Unsecured Debt Rating to 'B'
GENERAL MOTORS: Fitch Puts BB Issuer Default Rating on Watch Pos.
GEORGES MARCIANO: Dist. Court Rejects Guess? Co-Founder's Appeal
GREAT BASIN GOLD: Incurs C$89.6-Mil. Net Loss in Third Quarter
GREAT CHINA INT'L: Incurs $423,000 Net Loss in 3rd Quarter
GROWLIFE INC: Reports $28,700 Net Income in Third Quarter
GUIDED THERAPEUTICS: Incurs $986,000 Net Loss in Third Quarter
GUITAR CENTER: Incurs $25.6 Million Net Loss in Third Quarter
HAMPTON ROADS: Taps M. Sykes as Head of Real Estate Lending Unit
HARRISBURG, PA: Bar on Bankruptcy Filing Expires Today
HOSTESS BRANDS: Has Final Approval of Wind-Down Plan, Bonuses
HOSTESS BRANDS: Objects to Expedited Hearing on Trustee Bid
HUDSON PRODUCTS: Capital Structure No Impact on Moody's 'B2' CFR
iGLOBAL STRATEGIC: Perlman, Firm to Pay Over $2MM for Ponzi Scheme
INTEGRATED BIOPHARMA: Three Directors Elected to Board
INTERNATIONAL BARRIER: Incurs $161,000 Net Loss in 3rd Quarter
INTERNATIONAL STORYTELLING: To Name Three Members to Board
IOWORLDMEDIA INC: Incurs $204,000 Net Loss in Third Quarter
ISTAR FINANCIAL: Inks Underwriting Pacts for $500-Mil. Offering
JEFFERSON COUNTY: Settles Bessemer Courthouse Dispute
JOSEPH DETWEILER: Court Rejects Discharge Upon Plan Confirmation
K-V PHARMACEUTICAL: Has Access to Cash Collateral Until Jan. 9
KIWIBOX.COM INC: Incurs $1.21 Million Net Loss in 3rd Quarter
LBI MEDIA: Majority of Lenders Consent to Exchange Offers
LKA INTERNATIONAL: Reports $76,400 Net Income in Third Quarter
MEDIA GENERAL: GAMCO Owns 18.6% of Class A Shares
MERCATOR MINERALS: Incurs $15.1-Mil. Net Loss in Third Quarter
MERITOR INC: S&P Gives 'B-' Rating on $150MM Sr. Convertible Notes
MERRIMAN HOLDINGS: Incurs $1.1-Mil. Net Loss in Third Quarter
MISSION NEWENERGY: All Resolutions Passed at General Meeting
MISSION NEWENERGY: Convertible Note Exchange Offer Launched
MISSION NEWENERGY: Subsidiary Receives Winding up Petition
MOMENTIVE PERFORMANCE: Incurs $81-Mil. Net Loss in 3rd Quarter
MOMENTIVE SPECIALTY: Reports $364-Mil. Third Quarter Profit
MON VIEW: Pa. Revenue Department Has Green Light for Appeal
MONEYGRAM INT'L: Moody's Affirms 'B1' CFR/PDR; Outlook Stable
MORGANS HOTEL: David Hamamoto Discloses 11.1% Equity Stake
MUSCLEPHARM CORP: Effects a 1-for-850 Reverse Stock Split
MORGANS HOTEL: David Hamamoto Discloses 11.1% Equity Stake
NEXSTAR BROADCASTING: Announces New Cash Dividend Policy
NEXSTAR BROADCASTING: ABRY Funds to Resell 8MM Class A Shares
OAKDALE, CA: Moody's Confirms 'B1' Rating on Revenue Bonds
OVERSEAS SHIPHOLDING: Delays Second Quarter Form 10-Q
PACIFIC ETHANOL: Incurs $9.7-Mil. Net Loss in Third Quarter
PALATIN TECHNOLOGIES: Incurs $10.5-Mil. Net Loss in Sept. 30 Qtr.
PARKERVISION INC: Incurs $5.0-Mil. Net Loss in Third Quarter
PATRIOT COAL: Shows Futility of Wresting Cases Away From NY
PATRIOT COAL: Seeks Approval of Selenium Cleanup Accord
PINNACLE AIRLINES: OKs Extension of Plan Filing Until Dec. 30
PORTER BANCORP: Files Form 10-Q, Incurs $27.7MM Net Loss in Q3
PROGEN PHARMACEUTICALS: Incurs A$3.4-Mil. Net Loss in Fiscal 2012
POWIN CORPORATION: Incurs $1.4-Mil. Net Loss in Third Quarter
QUANTUM CORP: To Eliminate 180 Positions to Cut Expenses
RAKHRA MUSHROOM: Employees Have Yet to Receive Paychecks
RESIDENTIAL CAPITAL: Committee Has SilvermanAcampora as Counsel
RESIDENTIAL CAPITAL: Examiner Proposes Wolf as Conflicts Counsel
RESIDENTIAL CAPITAL: Ally Ordered to Produce Loan Info to FHFA
RESIDENTIAL CAPITAL: Professional Fees Reach $43.4 Million
RESPONSE BIOMEDICAL: Incurs C$2.7-Mil. Net Loss in Third Quarter
SAGAMORE PARTNERS: Art Hotel Owner Amends Plan; Lender Objects
SAN BERNARDINO: Calpers Seeks Stay Relief to Pursue Unpaid Pension
SANUWAVE HEALTH: President and CEO C. Cashman Quits
SB PARTNERS: Incurs $318,000 Net Loss in Third Quarter
SILVER II BORROWER: Moody's Assigns 'B2' CFR; Outlook Stable
SIMON WORLDWIDE: Incurs $307,000 Net Loss in Third Quarter
SIRIUS COMPUTER: Moody's Affirms 'B1' CFR; Outlook Stable
SPECTRUM HEALTHCARE: Laurel Hill Healthcare to Close by Jan. 14
SYNCHRONOUS AEROSPACE: Precision Deal No Effect on Moody's Rating
SYNCREON HOLDINGS: Moody's Affirms 'B2' CFR/PDR; Outlook Negative
SYNCREON HOLDINGS: S&P Keeps 'B+' Notes Rating Over $100MM Add-On
THOMPSON CREEK: Plans to Offer $350 Million Senior Secured Notes
THOMPSON CREEK: Moody's Maintains 'Caa1' CFR/PDR
TRAFFIC CONTROL: Committee Wins Approval of Liquidation Plan
TRIBUNE COMPANY: Moody's Assigns 'Ba3' CFR; Rates Sr. Loan 'Ba3'
TRIDENT MICROSYSTEMS: Mark Wehrly Discloses 11.6% Equity Stake
TRIDENT USA: S&P Keeps 'B' Rating on $35MM Second-Lien Term Loan
TXCO RESOURCES: Reorganized TXCO, Peregrine Want Judgment Vacated
UNIGENE LABORATORIES: Signs Licensing Agreement with Tarix
UNIGENE LABORATORIES: Defaults Under Victory Park Agreement
UNIVERSAL SOLAR: Incurs $268,800 Net Loss in Third Quarter
UROLOGIX INC: Incurs $1.1-Mil. Net Loss in Sept. 30 Quarter
US FOODS: Moody's Affirms 'B3' CFR; Rates Credit Facility 'B3'
VALENCE TECHNOLOGY: CEO Resigns; Former Contour Chief Takes Over
VANITY EVENTS: Inks $200,000 Debenture With Monroe Milstein
VERTIS HOLDINGS: Has Bonus-Plan Approval; Auction Canceled
VESTA CORP: S&P Keeps 'B' CCR on Proposed Financing Restructuring
VISION INDUSTRIES: Incurs $1.4-Mil. Net Loss in Third Quarter
VISUALANT INC: Incurs $2.7 Million Net Loss in Fiscal 2012
VITRO SAB: U.S. Court of Appeals Rejects Mexican Plan
VM ASC: Can Access $203K Financing From Jersey Shore Bank
YOU ON DEMAND: Incurs $4.4-Mil. Net Loss in Third Quarter
YRC WORLDWIDE: 100% of Outstanding 2023 Notes Validly Tendered
Z TRIM HOLDINGS: Incurs $14.2 Million Net Loss in Third Quarter
* Bill to End Gift Card Expiration Dates Introduced
* Moody's Says EBITDA Add-Backs Can Weaken Covenant Protection
* Grant Thornton Names James Peko as Managing Principal
* MF Global Again Beats Out Lehman in Claim Trading
* BOOK REVIEW: Corporate Venturing -- Creating New Businesses
*********
1555 WABASH: Plan Outline Okayed; Confirmation Hearing on Dec. 24
-----------------------------------------------------------------
Judge Jacqueline P. Cox of U.S. Bankruptcy Court for the Northern
District of Illinois has approved the First Amended Disclosure
Statement explaining 1555 Wabash LLC's proposed First Amended Plan
of Liquidation dated Sept. 27, 2012.
The confirmation hearing on the Plan is scheduled for Dec. 24,
2012, at 10:30 a.m.
According to the First Amended Disclosure Statement, the Plan
implements the principal terms of the settlement agreement dated
as of Sept. 19, 2012, among (i) the Debtor; (ii) New West Realty
Development Corp; (iii) Theodore Mazola; (iv) August Mauro; and
lender AmT CADC Venture, LLC.
The settlement agreement provides, among other things, that:
a) title to the property will be unconditionally transferred
from the Debtor to the lender on the Effective Date;
b) all cash remaining in the Debtor's bank accounts on the
Effective Date will be transferred to the lender; and
c) the Debtor will assume and assign to the lender the
executory contracts and unexpired leases as the lender may
designate in writing no later than five business days prior
to the confirmation hearing.
In accordance with the terms of the settlement agreement, the Plan
provides for the irrevocable sale and transfer of the property and
all other assets of the Debtor's estate, including all cash held
in the Debtor's bank accounts on the Effective Date.
Payments to creditors under the Plan will be made from funds
realized from continued business operations of the Debtor up to
the Effective Date and from existing cash deposits and cash
resources of the debtor, well as from the cash resources of the
lender.
A copy of the Disclosure Statement is available for free at
http://bankrupt.com/misc/1555_WABASH_ds_1amended.pdf
About 1555 Wabash
1555 Wabash LLC owns and operates a 14-story mixed use building
located at 1555 South Wabash, in Chicago, Illinois. The property
is comprised of 176 residential units plus 11,000 square feet of
commercial space located on the first floor of the building. The
property was originally developed as condominium units to be sold
at designated sale prices to qualified buyers. Construction was
generally completed as of the middle of 2009. Only 36 of the 100
sale contracts closed. As of the Petition Date, 1555 Wabash
leased 115 of the remaining 140 residential apartment units --
roughly 82% -- to qualified tenants, while the commercial space is
presently vacant.
1555 Wabash LLC filed for Chapter 11 protection (Bankr. N.D. Ill.
Case No. 11-51502) on Dec. 27, 2011, to halt foreclosure of the
property. Judge Jacqueline P. Cox oversees the case. David K.
Welch, Esq., at Crane Heyman Simon Welch & Clar, serves as the
Debtor's counsel. The Debtor scheduled $90,055 in personal
property and said the current value if its condo building is
unknown. The Debtor disclosed $51.6 million in liabilities. The
petition was signed by Theodore Mazola, president of New West
Realty Development Corp., sole member and manager of the Debtor.
30DC INC: Medi7 Owner H. Pinskier Appointed Director
----------------------------------------------------
30DC, Inc.'s Board of Directors accepted the resignation of
Clinton Carey as a director. The Board as a result appointed
Henry Pinskier as director.
Mr. Pinskier, age 52, serves as Chair and Joint Owner (1993-
current) of Medi7 Pty Ltd., a General Practice medical services
company with 70 Doctors and staff across multiple clinics in
Melbourne, Australia. Mr. Pinskier also currently serves as Chair
for RivusTV P/L an unlisted Public Company, which provides
syndicated, secure easy to use video on demand system utilizing
Pay Per View with a multi-level payment distribution process.
He has previously served on the boards of 3 publicly listed
companies in Australia related to Health technology in the area of
Medical devices and services as well as having served as a
Director of a Private US company with an Australian subsidiary
delivering safety surveillance services.
Mr. Pinskier has been involved in the Health Sector and IT/IM
sector as well as having served as a Director in the past on a
number of Victorian public sector organizations, VMIA the State
Government of Victoria's Insurance Company from 2005-2011, Yarra
Valley Water from 2008-2011 and The Alfred Group of Hospitals from
2000-2009. From 1985 until 2000, he practiced medicine.
Across the different organizations he Chaired Strategy
subcommittees, Risk and Audit Committees, Nomination Committees
and been part of Finance Committees
Mr. Pinskier attended and graduated MBBS from Monash University in
1984.
As part of his appointment, the Company has issued Mr. Pinskier an
option exercisable for 1,500,000 shares of the Company's common
stock, under the Company's 2012 Stock Option and Award Plan. The
option has a term of 10 years and an exercise price of $0.08 per
share. The option will vest at a rate of 1/3 of the shares at
Jan. 1, 2013, 2014, and 2015.
Separately, the Board authorized the issuance of an option
exercisable for 1,500,000 shares of common stock to Theodore A.
Greenberg, chief financial officer and director of the Company.
GHL Consulting Pact
Effective July 15, 2012, the Company entered into a Consulting
Services Agreement with GHL Group, Ltd., who's President, Gregory
H. Laborde, is a member of the Company's Board of Directors. The
Agreement has a term of six months. Pursuant to the Consulting
Agreement, GHL Group is to receive 500,000 shares of the
restricted common stock of 30DC and payments of $3,000 monthly,
payable on the 15th of each month beginning July 15, 2012. The
last payment will occur on Dec. 15, 2012.
Pursuant to the Consulting Services Agreement, GHL Group will
provide the Company with financial consulting services including
but not limited to evaluation of financial forecasts, assist in
the development of business and financial plans and assist in the
identification of potential acquisitions and financial sources.
About 30DC Inc.
New York-based 30DC, Inc., provides Internet marketing services
and related training to help Internet companies in operating their
businesses. It operates in two divisions, 30 Day Challenge and
Immediate Edge.
The Company reported a net loss of $1.44 million for the fiscal
year ended June 30, 2011, following a net loss of $1.06 million in
fiscal 2010.
As reported in the TCR on Dec. 19, 2011, Marcum LLP, in New York,
expressed substantial doubt about 30DC's ability to continue as a
going concern, following the Company's results for the fiscal year
ended June 30, 2011. The independent auditors noted that the
Company has had recurring losses, and has a working capital and
stockholders' deficiency as of June 30, 2011.
The Company's balance sheet at March 31, 2012, showed
$1.82 million in total assets, $2.21 million in total liabilities
and a $394,450 total stockholders' deficiency.
The Company said in its quarterly report for the period ending
March 31, 2012, that if it is unable to raise additional capital
or encounters unforeseen circumstances, it may be required to take
additional measures to conserve liquidity, which could include,
but not necessarily be limited to, issuance of additional shares
of the Company's stock to settle operating liabilities which would
dilute existing shareholders, curtailing its operations,
suspending the pursuit of its business plan and controlling
overhead expenses. The Company cannot provide any assurance that
new financing will be available to it on commercially acceptable
terms, if at all. These conditions raise substantial doubt about
the Company's ability to continue as a going concern.
30DC INC: Delays Form 10-Q for Sept. 30 Quarter
-----------------------------------------------
30DC, Inc., was unable to prepare its accounting records and
schedules in sufficient time to allow its accountants to complete
their review of the Company's financial statements for the period
ended Sept. 30, 2012, before the required filing date for the
subject quarterly report on Form 10-Q. The Company intends to
file the subject Quarterly Report on Form 10-Q on or before the
fifth calendar day following the prescribed due date.
About 30DC Inc.
New York-based 30DC, Inc., provides Internet marketing services
and related training to help Internet companies in operating their
businesses. It operates in two divisions, 30 Day Challenge and
Immediate Edge.
The Company reported a net loss of $1.44 million for the fiscal
year ended June 30, 2011, following a net loss of $1.06 million in
fiscal 2010.
As reported in the TCR on Dec. 19, 2011, Marcum LLP, in New York,
expressed substantial doubt about 30DC's ability to continue as a
going concern, following the Company's results for the fiscal year
ended June 30, 2011. The independent auditors noted that the
Company has had recurring losses, and has a working capital and
stockholders' deficiency as of June 30, 2011.
The Company's balance sheet at March 31, 2012, showed $1.82
million in total assets, $2.21 million in total liabilities and a
$394,450 total stockholders' deficiency.
The Company said in its quarterly report for the period ending
March 31, 2012, that if it is unable to raise additional capital
or encounters unforeseen circumstances, it may be required to take
additional measures to conserve liquidity, which could include,
but not necessarily be limited to, issuance of additional shares
of the Company's stock to settle operating liabilities which would
dilute existing shareholders, curtailing its operations,
suspending the pursuit of its business plan and controlling
overhead expenses. The Company cannot provide any assurance that
new financing will be available to it on commercially acceptable
terms, if at all. These conditions raise substantial doubt about
the Company's ability to continue as a going concern.
77 GOLDEN GAMING: S&P Assigns 'B' Corp. Credit Rating
-----------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' corporate
credit rating to 77 Golden Gaming LLC. The outlook is stable.
"At the same time, we assigned the company's proposed $205 million
first-lien term loan, which will be issued by wholly owned
subsidiary Golden Gaming LLC, a 'B' issue-level rating (the same
as our corporate credit rating), with a recovery rating of '3',
indicating our expectation for meaningful (50% to 70%) recovery
for lenders in the event of a payment default. The proposed
facilities consist of a $5 million senior secured revolving credit
facility due 2017 and a $200 million senior secured term loan due
2018. The company plans to use proceeds from the credit facility
to refinance existing debt, fund working capital, and pay a $10
million dividend to the owner," S&P said.
"Our 'B' corporate credit rating on Golden reflects our assessment
of the company's financial risk profile as 'highly leveraged,' and
our assessment of its business risk profile as 'vulnerable,'
according to our criteria," S&P said.
"Our assessment of Golden's financial risk profile as 'highly
leveraged,' reflects the company's high level of funded debt,
modest EBITDA base, and the high fixed cost structure of the route
and tavern businesses. Our assessment of Golden's business risk
profile as vulnerable reflects the minimal barriers to entry given
Nevada's unlimited license jurisdiction, Golden's limited
geographic diversity across its portfolio of assets, and
integration risk following the acquisition of a significant new
portfolio of assets. (In the first quarter of 2012, Golden
acquired Affinity Gaming's Terrible's Town Casino and Lakeside
Casino & RV Park, both located in Pahrump, Nev., along with a
portion of its route operations. Affinity also purchased three of
Golden's casinos: Golden Mardi Gras Casino, Golden Gates Casino,
and Golden Gulch Casino, all in Black Hawk, Colo.)," S&P said.
"While we recognize the potential for cost savings as a result of
Golden's increased scale in the route and casino business
following these transactions, which may improve EBITDA margins,
any improvement in our assessment of the company's business risk
profile would require a longer track record running the new
portfolio of properties," said Standard & Poor's credit analyst
Michael Halchak.
"Golden operates three business segments: routes, casinos, and
taverns. For 2013, we anticipate modest growth in revenue and more
robust EBITDA growth, which should lead to some deleveraging. As
Golden does not publicly disclose its financial performance, we do
not provide specific financial numbers in the rationale. We expect
the majority of Golden's EBITDA growth to come from cost savings
in the route and casino businesses. We believe the annualized
costs savings achieved to date since the acquisition, along with
some additional cost cutting in 2013, should drive this growth.
Although we believe that the Las Vegas Strip will realize growth
in gaming revenue in 2013, we expect this growth will be modest,
in the low-single-digit percentage area. Similarly, we do not
expect a return to meaningful growth in the locals market over at
least the next few years. Consequently, we expect Golden's
business segments will continue to face a challenging operating
environment as its assets compete with the vast array of
entertainment options offered by the Las Vegas Locals and Las
Vegas Strip operators," S&P said.
A123 SYSTEMS: US Government Expresses Concern Over Sale
-------------------------------------------------------
Patrick Fitzgerald, writing for Dow Jones' Daily Bankruptcy
Review, reports the U.S. government, which provided nearly $250
million in grants to A123 Systems Inc ., on Tuesday raised some
objections to the sale of the Company's assets at a bankruptcy
auction. Government lawyers said they were concerned that the
proposed sale of A123's assets could "impermissibly extinguish the
United States' interests."
According to DBR, while the potential for a bidding war is good
news for A123 and its creditors, the United States, which is still
on the hook for $116 million to A123 under the Energy Department
grant, is worried it could be left holding the bag. While the
government conditionally supports an A123 sale, Justice Department
lawyers said the U.S. has rights "under federal law in property
purchased with its funds that can't be extinguished through a
bankruptcy sale or otherwise."
DBR notes that, since A123's October bankruptcy filing, lawyers
for electronics makers Siemens AG , of Germany, and NEC Corp . of
Japan, have also indicated they were interested in bidding on the
Waltham, Mass., company's assets. But Wanxiang, a unit of China's
Wanxiang Group , is the only foreign company with a qualified bid
on the table. Wanxiang has offered about $131 million for A123's
assets, according to a person familiar with the proposal. Johnson
Controls Inc., which will lead the bidding, has offered $125
million for A123's assets.
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 lawyers at Brown
Rudnick LLP and Saul Ewing LLP.
ADAMIS PHARMACEUTICALS: Had $857,000 Net Loss in Sept. 30 Qtr.
--------------------------------------------------------------
Adamis Pharmaceuticals Corporation filed with the U.S. Securities
and Exchange Commission its quarterly report on Form 10-Q
disclosing a net loss of $857,475 on $0 of revenue for the three
months ended Sept. 30, 2012, compared with a net loss of
$1.47 million on $0 of revenue for the same period during the
prior year.
The Company reported a net loss of $3.58 million on $0 of revenue
for the six months ended Sept. 30, 2012, compared with a net loss
of $2.71 million on $0 of revenue for the same period a year ago.
The Company's balance sheet at Sept. 30, 2012, showed $764,007 in
total assets, $5.83 million in total liabilities and a
$5.07 million total stockholders' deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/ER7RU9
About Adamis
San Diego, Calif.-based Adamis Pharmaceuticals Corporation is an
emerging pharmaceutical company engaged in the development and
commercialization of a variety of specialty pharmaceutical
products. Its products are concentrated in major therapeutic
areas including oncology (cancer), immunology and infectious
diseases (viruses) and allergy and respiratory.
As of June 30, 2012, the Company had approximately $720,000 in
cash and equivalents, an accumulated deficit of approximately
$33.5 million and substantial liabilities and obligations.
"If we did not have sufficient funds to continue operations, we
could be required to seek bankruptcy protection or other
alternatives that could result in our stockholders losing some or
all of their investment in us."
Mayer Hoffman McCann P.C., in Boca Raton, Fla., expressed
substantial doubt about Adamis' ability to continue as a going
concern, following the Company's results for the year ended March
31, 2012. The independent auditors noted that the Company has
incurred recurring losses from operations and has limited working
capital to pursue its business alternatives.
AFFIRMATIVE INSURANCE: Incurs $29.5-Mil. Net Loss in Third Quarter
------------------------------------------------------------------
Affirmative Insurance Holdings, Inc., filed its quarterly report
on Form 10-Q, reporting a net loss of $29.5 million on
$51.2 million of total revenues for the three months ended
Sept. 30, 2012, compared with a net loss of $7.6 million on
$59.3 million of total revenues for the comparable period last
year.
For the nine months ended Sept. 30, 2012, the Company had a net
loss of $43.6 million on $154.4 million of total revenues,
compared with a net loss of $17.4 million on $197.1 million of
revenues for the same period of 2012.
The Company completed its annual goodwill and indefinite lived
intangible asset impairment analyses as of Sept. 30, 2012.
Based upon the results of the assessment, the Company concluded
that the carrying value of goodwill was fully impaired as of
Sept. 30, 2012. The resulting implied fair value of goodwill was
compared to the carrying value of goodwill, resulting in the
write-off of the remaining goodwill balance of $23.4 million.
"Indefinite-lived intangible assets primarily consist of trade
names. In measuring the fair value of these intangible assets,
the Company utilizes the relief-from-royalty method. This method
assumes that trade names have value to the extent that their owner
is relieved of the obligation to pay royalties for the benefits
received from them. This method requires an estimate of future
revenue for the related brands, the appropriate royalty rate and
the weighted average cost of capital. This analysis indicated an
impairment of indefinite-lived intangible assets of $0.2 million
as of Sept. 30, 2012."
The Company's balance sheet at Sept. 30, 2012, showed
$349.9 million in total assets, $474.9 million in total
liabilities, and a stockholders' deficit of $125.0 million.
A copy of the Form 10-Q is available at http://is.gd/EheWTQ
Addison, Tex.-based Affirmative Insurance Holdings, Inc., is a
distributor and producer of non-standard personal automobile
insurance policies for individual consumers in targeted geographic
markets. Non-standard personal automobile insurance policies
provide coverage to drivers who find it difficult to obtain
insurance from standard automobile insurance companies due to
their lack of prior insurance, age, driving record, limited
financial resources or other factors. Non-standard personal
automobile insurance policies generally require higher premiums
than standard automobile insurance policies for comparable
coverage.
AIR MEDICAL: S&P Gives 'B' Rating on 2 New Senior Secured Issues
----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B' corporate
credit and senior secured ratings on Lewisville, Texas-based Air
Medical Group Holdings. "At the same time, we assigned our 'B'
senior secured rating to two new senior secured issues, a $205
million term loan B maturing 2018 and a $40 million term loan
maturing 2015. The outlook is stable," S&P said.
"The ratings on Lewisville, Texas-based Air Medical Group Holdings
continues to reflect a 'highly leveraged' financial profile
following the Reach transaction, primarily because of a sustained
debt-to-EBITDA metric of about 5x, and modest expectations of free
cash flow. The company's 'weak' business profile is unchanged,
despite the expansion of geographic presence provided by the Reach
transaction, as its portfolio is dominated by its narrow focus on
emergency air transport," S&P said.
"We expect reported revenue growth will slow to the mid-single
digits in 2013; like 2012, we expect organic growth to be about
flat, and growth to stem from increased volume from new community
bases," said Standard & Poor's credit analyst Lucy Patricola. "We
expect neutral-to-positive third-party reimbursement rates.
Reflecting a stronger payor mix from recent expansion, EBITDA
margins have strengthened recently, and we expect Air Medical to
largely sustain these higher margins. Still, transport volumes can
suffer from factors beyond the company's control, specifically
weather, and given the emergency nature of the service, the
company is subject to varying levels of uncompensated care.
Expenses are largely fixed in nature and are rising as Air
Medical opens new bases, introducing a measure of volatility to
quarterly EBITDA generation. Year-to-date, revenues increased 25%
as of September 2012, reflecting volume growth from new bases as
same-base transports were about flat. Adjusted EBITDA margins are
about 30% for the past nine months. Air Medical expanded rapidly
through 2012, increasing its bases by 19 to a total of 182,
requiring high levels of capital spending on aircraft, which
absorbed free cash flow. Even though we expect the company to slow
the rate of base expansion in 2013, we believe Air Medical remains
committed to growing its geographic presence. Capital spending,
which has been at levels that absorbed most free cash flow, will
remain elevated in 2013, but we expect EBITDA expansion to result
in modest levels of free cash flow. We expect the company to
deploy cash to support its growth strategies rather than reduce
debt. Debt leverage will gradually decrease in our view, primarily
as a result of stronger EBITDA generation, and could drop below 5x
by the end of 2013. However, fluctuations in earnings could
disrupt this leverage reduction trajectory, supporting our
financial profile assessment of highly leveraged," S&P said.
ALETHEIA RESEARCH: CIBC Wants to Terminate Firm as Subadviser
-------------------------------------------------------------
Randy Diamond at Pension&Investment reports that CIBC Asset
Management, one of money manager Aletheia Research & Management's
last large remaining clients, is seeking court permission to
terminate the firm as subadviser for more than $600 million in
four mutual funds.
According to the report, CIBC has asked U.S. Bankruptcy Court
Judge Barry Russell in Los Angeles for permission to terminate
Aletheia as subadviser for its Imperial U.S. Equity Pool,
Frontiers U.S. Equity Pool, Renaissance U.S. Equity Growth and
Renaissance Global Focus funds, saying it no longer has confidence
in the firm.
The report notes the assets are more than half of Aletheia's
estimated $1.2 billion in assets.
The report relates Gary Grad, CIBC director of investment
management research, said in the court papers his firm has lost
"all confidence" in Aletheia because of the events of the last few
months, including learning of the departure of Aletheia's general
counsel, Jorge DeNeve, through a Google alert and Aletheia failing
to disclose declines in its assets under management, despite
CIBC's request for transparency on both matters.
The report relates Mr. Grad said Aletheia had estimated it has
lost $300 million since the Chapter 11 bankruptcy filing on
Nov. 11, with some of the loss due to retail clients switching
managers. The retail clients had chosen Aletheia as a subadviser
through the CIBC Woody Gundy Investment Consulting Service.
According to the report, CIBC attorney Frederick Hyman said in the
court papers that CIBC believes it has the right to terminate
Aletheia without court permission, but "out of abundance of
caution, and for purposes of full disclosure" CIBC is seeking a
court order.
Aletheia Research and Management, Inc., filed a bare-bones
Chapter 11 petition (Bankr. C.D. Calif. Case No. 12-47718) on
Nov. 11, 2012. Attorneys at Greenberg Glusker represent the
Debtor. The board voted in favor of a bankruptcy filing due to
the company's financial situation and ongoing litigation.
According to the list of top largest unsecured creditors, Proctor
Investments has unliquidated and disputed claims of $16 million on
account of pending litigation.
ALION SCIENCE: Board Adopts 2012 Code of Ethics and Conduct
-----------------------------------------------------------
The Corporate Governance and Compliance Committee of the Board of
Directors of Alion Science and Technology Corporation adopted the
2012 edition of the Alion Code of Ethics, Conduct, and
Responsibility. The 2012 edition was updated from the 2011
edition to provide greater emphasis and clarity in light of
evolving legal and regulatory requirements.
A copy of the 2012 edition of the Code is available at:
http://is.gd/NLG2NW
About Alion Science
Alion Science and Technology Corporation, based in McLean,
Virginia, is an employee-owned company that provides scientific
research, development, and engineering services related to
national defense, homeland security, and energy and environmental
analysis. Particular areas of expertise include communications,
wireless technology, netcentric warfare, modeling and simulation,
chemical and biological warfare, program management.
The Company reported a net loss of $44.38 million for the year
ended Sept. 30, 2011, compared with a net loss of $15.23 million
during the prior year.
The balance sheet at June 30, 2012, showed $640.23 million in
total assets, $779.47 million in total liabilities,
$112.70 million in redeemable common stock, $20.78 million in
common stock warrants, $123,000 in accumulated other comprehensive
loss, and a $272.61 million accumulated deficit.
* * *
As reported by the TCR on Sept. 8, 2011, Standard & Poor's Ratings
Services lowered its corporate credit rating on McLean, Va.-based
Alion Science and Technology Corp. to 'CCC+' from 'B-'. The
rating outlook is negative.
"The downgrade of Alion is a result of the company's recent
operational weakness," said Standard & Poor's credit analyst
Alfred Bonfantini, "and the prospect of further pressure on
revenues, which stem from the continuing resolution on the 2011
Federal government budget that wasn't settled until April 2011,
the subsequent specter of a U.S. government default during the
debt ceiling debate, and the ongoing uncertainty over future
budget cuts and levels."
In the Sept. 26, 2012, edition of the TCR, Moody's Investors
Service has lowered the ratings of Alion Science and Technology
Corporation including its Corporate Family Rating ("CFR") to Caa2
from Caa1 due to the high likelihood that the company will need do
a debt refinancing over the next twelve to eighteen months.
AMBAC FINANCIAL: Reports $157.4 Million Net Gain in 3rd Quarter
---------------------------------------------------------------
Ambac Financial Group, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing
net gain of $157.37 million on $113.07 million of net premiums
earned for the three months ended Sept. 30, 2012, compared with a
net loss of $75.51 million on $102.05 million of net premiums
earned for the same period during the prior year.
For the nine months ended Sept. 30, 2012, the Company reported a
net loss of $402.65 million on $311.06 million of net premiums
earned, as compared to a net loss of $997.17 million on $293.12
million of net premiums earned for the same period a year ago.
The Company's balance sheet at Sept. 30, 2012, showed $26.94
billion in total assets, $30.43 billion in total liabilities and a
$3.48 billion total stockholders' deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/1NHWEO
About Ambac Financial
Ambac Financial Group, Inc., headquartered in New York City, is a
holding company whose affiliates provided financial guarantees and
financial services to clients in both the public and private
sectors around the world.
Ambac Financial filed a voluntary petition for relief under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No.
10-15973) in Manhattan on Nov. 8, 2010. Ambac said it will
continue to operate in the ordinary course of business as "debtor-
in-possession" under the jurisdiction of the Bankruptcy Court and
in accordance with the applicable provisions of the Bankruptcy
Code and the orders of the Bankruptcy Court.
Ambac's bond insurance unit, Ambac Assurance Corp., did not file
for bankruptcy. AAC is being restructured by state regulators in
Wisconsin. AAC is domiciled in Wisconsin and regulated by the
Office of the Commissioner of Insurance of the State of Wisconsin.
The parent company is not regulated by the OCI.
Ambac's consolidated balance sheet -- which includes non-debtor
Ambac Assurance Corp -- showed US$30.05 billion in total assets,
US$31.47 billion in total liabilities, and a US$1.42 billion
stockholders' deficit, at June 30, 2010.
On an unconsolidated basis, Ambac said in a court filing that
it has assets of (US$394.5 million) and total liabilities of
US$1.6826 billion as of June 30, 2010.
Bank of New York Mellon Corp., as trustee to seven different types
of notes, is listed as the largest unsecured creditor, with claims
totaling about US$1.62 billion.
The Blackstone Group LP is the Debtor's financial advisor.
Kurtzman Carson Consultants LLC is the claims and notice agent.
KPMG LLP is tax consultant to the Debtor.
Anthony Princi, Esq., Gary S. Lee, Esq., and Brett H. Miller,
Esq., at Morrison & Foerster LLP, in New York, serve as counsel
to the Official Committee of Unsecured Creditors. Lazard Freres
& Co. LLC is the Committee's financial advisor.
Bankruptcy Judge Shelley C. Chapman entered an order confirming
the Fifth Amended Plan of Reorganization of Ambac Financial Group,
Inc. on March 14, 2012. The Plan provides for the full payment of
secured claims and 8.5% to 13.2% recovery for general unsecured
claims.
Bankruptcy Creditors' Service, Inc., publishes AMBAC BANKRUPTCY
NEWS. The newsletter tracks the Chapter 11 proceeding undertaken
by Ambac Financial Group and the restructuring proceedings of
Ambac Assurance Corp. (http://bankrupt.com/newsstand/or 215/945-
7000).
AMBAC FINANCIAL: Restores Telephone System at NY Headquarters
-------------------------------------------------------------
Ambac Financial Group, Inc. and Ambac Assurance Corporation have
restored the telephone system at their headquarters in New York
City. Telephone inquiries may be made directly to staff at their
respective direct-dial extensions, which are unchanged. General
inquiries may be directed to the Companies via a new temporary
main number, (212) 658-7470. Any future changes to the main
number will be posted on the Companies' Web site, upon becoming
effective.
About Ambac Financial
Ambac Financial Group, Inc., headquartered in New York City, is a
holding company whose affiliates provided financial guarantees and
financial services to clients in both the public and private
sectors around the world.
Ambac Financial filed a voluntary petition for relief under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No.
10-15973) in Manhattan on Nov. 8, 2010. Ambac said it will
continue to operate in the ordinary course of business as "debtor-
in-possession" under the jurisdiction of the Bankruptcy Court and
in accordance with the applicable provisions of the Bankruptcy
Code and the orders of the Bankruptcy Court.
Ambac's bond insurance unit, Ambac Assurance Corp., did not file
for bankruptcy. AAC is being restructured by state regulators in
Wisconsin. AAC is domiciled in Wisconsin and regulated by the
Office of the Commissioner of Insurance of the State of Wisconsin.
The parent company is not regulated by the OCI.
Ambac's consolidated balance sheet -- which includes non-debtor
Ambac Assurance Corp -- showed US$30.05 billion in total assets,
US$31.47 billion in total liabilities, and a US$1.42 billion
stockholders' deficit, at June 30, 2010.
On an unconsolidated basis, Ambac said in a court filing that
it has assets of (US$394.5 million) and total liabilities of
US$1.6826 billion as of June 30, 2010.
Bank of New York Mellon Corp., as trustee to seven different types
of notes, is listed as the largest unsecured creditor, with claims
totaling about US$1.62 billion.
The Blackstone Group LP is the Debtor's financial advisor.
Kurtzman Carson Consultants LLC is the claims and notice agent.
KPMG LLP is tax consultant to the Debtor.
Anthony Princi, Esq., Gary S. Lee, Esq., and Brett H. Miller,
Esq., at Morrison & Foerster LLP, in New York, serve as counsel
to the Official Committee of Unsecured Creditors. Lazard Freres
& Co. LLC is the Committee's financial advisor.
Bankruptcy Judge Shelley C. Chapman entered an order confirming
the Fifth Amended Plan of Reorganization of Ambac Financial Group,
Inc. on March 14, 2012. The Plan provides for the full payment of
secured claims and 8.5% to 13.2% recovery for general unsecured
claims.
Bankruptcy Creditors' Service, Inc., publishes AMBAC BANKRUPTCY
NEWS. The newsletter tracks the Chapter 11 proceeding undertaken
by Ambac Financial Group and the restructuring proceedings of
Ambac Assurance Corp. (http://bankrupt.com/newsstand/or 215/945-
7000).
The Company's balance sheet at June 30, 2012, showed $26.61
billion in total assets, $30.36 billion in total liabilities and a
$3.75 billion total stockholders' deficit.
AMERICAN AIRLINES: Pilots Set to Vote on Labor Deal
---------------------------------------------------
Allied Pilots Association will vote on a tentative contract with
American Airlines Inc. by early December, Reuters reported.
Dennis Tajer, spokesman for the pilots' union, said the voting
will be completed by December 7 and the results are expected to
be announced the same day.
Keith Wilson, APA president, said the tentative deal would
eventually boost pay to industry standards and that it is much
better than the airline's offer in August, according to a report
by Bloomberg News.
In August, pilots rejected the offer from American Airlines by a
61-to-39-percent margin. The airline responded by cutting pay
and benefits, which was followed by a surge in delayed and
canceled flights that it blamed on an illegal work slowdown by
pilots.
The latest deal would eventually raise pay in line with pilots at
United Airlines and Delta Air Lines and give pilots 13.5% of AMR
stock after bankruptcy. In exchange, American Airlines would get
more flexibility to outsource flying to other airlines, Bloomberg
News said.
Mr. Wilson revealed that some opponents of the tentative deal are
intent on punishing airline management and not helping American
exit from bankruptcy protection as a successful company, the
report said.
Mr. Wilson, however, said he does not believe that the majority
of the pilots "would prefer to embark upon a path of self-
destruction in order to make a political point or poke management
in the eye."
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: Seeks Pilot Retirement Plan Amendment
--------------------------------------------------------
AMR Corp. filed a motion seeking determination from Judge Sean
Lane that an amendment to American Airlines Inc.'s retirement
plan for its pilots, which eliminates the lump sum and
installment options, is necessary to avoid termination of the
plan prior to its exit from bankruptcy.
The plan permits an American Airlines pilot to choose from among
several forms of benefit such as a lump sum payout. Following
the airline's bankruptcy filing, the plan was prohibited from
paying lump sums unless its Adjusted Funding Target Attainment
Percentage is at least 100%.
AMR foresees a "massive wave of pilot retirements" unless the
lump sum payments and optional forms of benefit currently
provided under the retirement plan are eliminated.
"If American cannot eliminate the principal motivation for this
wave of retirements and preserve its ability to meet its business
plan by enacting the amendment, it will have no choice but to
terminate the pilot plan," Stephen Karotkin, Esq., at Weil
Gotshal & Manges LLP, in New York, said in a court filing.
The Dallas Morning News pointed out that the actual financial
impact of keeping the lump-sum option is not known because most
of the court documents in support of the motion were redacted.
The report, however, noted that David Ebenstein, a senior vice
president at McKinsey Recovery & Transformation Services U.S.,
LLC, who estimated the impact of keeping the lump-sum option said
it is assumed that American expects to emerge from bankruptcy in
March 2013.
The report added that Dan Herring, director of American's crew
resources department, said in a declaration that American has to
train pilots to replace retiring pilots and hiring more reserve
pilots would be "prohibitively expensive, at a cost of about
$25,000 per year in salary and benefits per active pilot."
The U.S. Bankruptcy Court in Manhattan will hold a hearing on
December 19 to consider approval of the request. Objections are
due by December 12.
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: USAPA Seeks Access to Merger Related Info
------------------------------------------------------------
The union representing US Airways Group Inc.'s pilots seeks
permission from the U.S. Bankruptcy Court in Manhattan to gain
access to information tied to a possible merger between the
company and American Airlines Inc.
US Airline Pilots Association said it needs to obtain information
from American Airlines and from US Airways to evaluate their
possible merger.
"USAPA has not been provided critical information about the terms
of the proposed combination," said the union's lawyer, James
Wehner, Esq., at Caplin & Drysdale Chartered, in Washington, D.C.
"USAPA needs such information to ensure a fair and effective
merger."
A court hearing is scheduled for December 11. Objections are due
by December 4.
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: Bondholders Want Management Overhauled
---------------------------------------------------------
Reuters' Nick Brown reports that a group of some of American
Airlines' most significant bondholders said it will not support a
standalone restructuring unless a new board is brought in. The
12-member bondholder group includes JPMorgan Chase & Co, Pentwater
Capital Management and York Capital Management. Reuters says the
group has expressed an interest in funding an independent exit for
the airline's parent company AMR Corp.
According to Reuters, the bondholders, who hold more than $700
million in AMR debt, said in the letter to Keith Wilson, president
of American's pilots' union, its support for an independent exit
was "conditioned, among other things, on that plan providing for
the naming of a new board of directors." It added that the new
board would be selected with input from other shareholders.
Reuters notes AMR's current management team, led by Chief
Executive Tom Horton who is also chairman of the board, has lost
the confidence of the company's unions, which support a takeover
bid by smaller competitor US Airways Group.
The letter, sent on Nov. 15, was not public, but the Allied
Pilots' Association made it available to its 8,000 members on
Wednesday and a copy was obtained by Reuters.
The report says a spokesman for AMR declined to comment on
Wednesday.
According to Reuters, the circulation of the letter may also
signal an attempt by the union to nudge its members toward
ratifying the new labor contract proposed by AMR. A vote on the
proposed contract is set for Dec. 7.
The bondholders' commitment to work cooperatively with
shareholders "shows that APA's 13.5 percent equity claim is of
critical importance in shaping what the new American Airlines will
look like and who will lead it," the union said in a statement
circulated to its members along with the letter, according to
Reuters.
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 APPAREL: Incurs $19 Million Net Loss in Third Quarter
--------------------------------------------------------------
American Apparel, Inc., reported a net loss of $19.01 million on
$162.16 million of net sales for the three months ended Sept. 30,
2012, compared with a net loss of $7.19 million on $140.88 million
of net sales for the same period during the prior year.
For the nine months ended Sept. 30, 2012, the Company incurred a
net loss of $42.17 million on $444.28 million of net sales, as
compared to a net loss of $28.15 million on $389.76 million of net
sales for the same period a year ago.
The Company reported a net loss of $39.31 million in 2011 and a
net loss of $86.31 million in 2010.
The Company's balance sheet at Sept. 30, 2012, showed
$333.64 million in total assets, $319.76 million in total
liabilities and $13.87 million in total stockholders' equity.
Dov Charney, Chairman and CEO of American Apparel, Inc. stated,
"We are pleased with our third quarter results that again show
solid growth and continuing momentum in all business segments and
major geographies. Significant sales growth allowed us to more
than double our EBITDA performance to $13 million for the third
quarter of 2012 from $6 million for the third quarter of 2011.
Year-to-date our EBITDA performance has improved to $19 million
from $5 million for the corresponding period last year... EBITDA
performance for the twelve months ended September 30, 2012 was $28
million or double that reported for the full year in 2011... As
we improve store productivity and aggressively grow our online and
wholesale businesses we expect operating expense leverage will
allow us to continue to significantly grow EBITDA performance."
A copy of the press release is available for free at:
http://is.gd/kTxc6X
About American Apparel
Los Angeles, Calif.-based American Apparel, Inc. (NYSE Amex: APP)
-- http://www.americanapparel.com/-- is a vertically integrated
manufacturer, distributor, and retailer of branded fashion basic
apparel. As of September 2010, American Apparel employed over
10,000 people and operated 278 retail stores in 20 countries,
including the United States, Canada, Mexico, Brazil, United
Kingdom, Ireland, Austria, Belgium, France, Germany, Italy, the
Netherlands, Spain, Sweden, Switzerland, Israel, Australia, Japan,
South Korea and China.
Amid liquidity problems and declining sales, American Apparel in
early 2011 reportedly tapped law firm Skadden, Arps, Slate,
Meagher & Flom and investment bank Rothschild Inc. for advice on a
restructuring.
In April 2011, American Apparel said it raised $14.9 million in
rescue financing from a group of investors led by Canadian
financier Michael Serruya and private equity firm Delavaco Capital
Corp., allowing the casual clothing retailer to meet obligations
to its lenders for the time being. Under the deal, the investors
were buying 15.8 million shares of common stock at 90 cents
apiece. The deal allows the investors to purchase additional
27.4 million shares at the same price.
AMERICAN MEDIA: Incurs $1.9 Million Net Loss in Sept. 30 Quarter
----------------------------------------------------------------
American Media, Inc., filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $1.96 million on $89.88 million of total operating revenues for
the three months ended Sept. 30, 2012, compared with net income of
$2.51 million on $104.93 million of total operating revenues for
the same period a year ago.
For the six months ended Sept. 30, 2012, the Company incurred a
net loss of $3.21 million on $177.11 million of total operating
revenues, in comparison with net income of $1.77 million on
$198.12 million of total operating revenues for the same period
during the prior year.
The Company's balance sheet at Sept. 30, 2012, showed
$632.80 million in total assets, $654.44 million in total
liabilities, $3.78 million in redeemable noncontrolling interest,
and a $25.41 million total stockholders' deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/aZbLbV
About American Media
Based in New York, American Media, Inc., publishes celebrity
journalism and health and fitness magazines in the U.S. These
include Star, Shape, Men's Fitness, Fit Pregnancy, Natural Health,
and The National Enquirer. In addition to print properties, AMI
manages 14 different Web sites. The company also owns
Distribution Services, Inc., the country's #1 in-store magazine
merchandising company.
American Media, Inc., and 15 units, including American Media
Operations, Inc., filed for Chapter 11 protection in Manhattan
(Bankr. S.D.N.Y. Case No. 10-16140) on Nov. 17, 2010. Judge
Martin Glenn presided over the case. Ira S. Dizengoff, Esq., Arik
Preis, Esq., Meredith A. Lahaie, Esq., Stefanie L. Kurlanzik,
Esq., and Kevin M. Eide, Esq., at Akin, Gump, Strauss, Hauer &
Feld, LLP, in New York, served as the Debtors' bankruptcy counsel.
Moelis & Company was the Debtors' financial advisors and
investment bankers. Kurtzman Carson Consultants LLC was the
claims and notice agent.
AMI estimated assets of $0 to $50,000 and debts of $500 million to
$1 billion in its Chapter 11 petition. AMO, AMI's operating unit,
estimated assets of $100 million to $500 million and debts of
$500 million to $1 billion in its Chapter 11 petition.
American Media filed a pre-packaged Chapter 11 plan where holders
of notes and bank debt would receive either cash, new notes or
stock. Judge Glenn confirmed the Debtors' Amended Joint
Prepackaged Plan of Reorganization on Dec. 20, 2010. The Debtors
emerged from Chapter 11 reorganization two days later, handing
ownership to former bondholders. The new owners include hedge
funds Avenue Capital Group and Angelo Gordon & Co.
* * *
As reported by the TCR on Sept. 17, 2012, Standard & Poor's
Ratings Services lowered its corporate credit rating on Boca
Raton, Fla.-based American Media Inc. to 'B-' from 'B'.
"The downgrade conveys our expectation that continued declines in
revenues will outweigh the company's cost-reduction measures,
resulting in rising debt leverage, thinning discretionary cash
flow, and a narrowing margin of compliance with financial
covenants," said Standard & Poor's credit analyst Hal Diamond.
American Media has total debt of $494 million on June 30, 2012.
AMERICAN NATURAL: Incurs $1.2-Mil. Net Loss in Third Quarter
------------------------------------------------------------
American Natural Energy Corporation filed its quarterly report on
Form 10-Q, reporting a net loss of $1.2 million on $515,952 of
revenues, compared with net income of $474,022 on $607,107 of
revenues for the same period last year.
Total expenses were $1.8 million for the three months ended
Sept. 30, 2012m compared to total expenses of $133,085 for the
three months ended Sept. 30, 2011.
"During the three months ended Sept. 30, 2012, we had a foreign
exchange loss of $546,000, compared to a $697,000 foreign exchange
gain for the three months ended Sept. 30, 2011. Our foreign
exchange gains and losses arise out of the debt payable to Leede
Financial and an inter-company indebtedness we owe to our wholly-
owned subsidiary, Gothic, which are payable in Canadian dollars.
The foreign exchange loss for the three months ended Sept. 30,
2012, was caused by the weakening of the US dollar against the
Canadian dollar.
For the nine months ended Sept. 30, 2012, the Company had a net
loss of $2.6 million on $1.5 million of revenues, compared with a
net loss of $168,698 on $1.9 million of revenues for the same
period of 2011.
The Company's balance sheet at Sept. 30, 2012, showed
$20.2 million in total assets, $13.3 million in total liabilities,
and stockholders' equity of $6.9 million.
According to the regulatory filing, the Company currently has a
severe shortage of working capital and funds to pay its
liabilities. "The Company has no current borrowing capacity with
any lender. The Company incurred a net loss of $2,566,288 for the
nine months ended Sept. 30, 2012. The Company has a working
capital deficit of $8,463,712 and an accumulated deficit of
$22,794,669 at Sept. 30, 2012, which leads to substantial doubt
concerning the ability of the Company to meet its obligations as
they come due. The Company also has a need for substantial funds
to develop its oil and gas properties and repay borrowings as well
as to meet its other current liabilities."
As reported in the TCR on April 3, 2012, MaloneBailey, LLP, in
Houston, Texas, expressed substantial doubt about American Natural
Energy's ability to continue as a going concern. The
independent auditors noted that the Company incurred a net loss in
2011 and has a working capital deficiency and an accumulated
deficit at Dec. 31, 2011.
A copy of the Form 10-Q is available at http://is.gd/H35G3c
American Natural Energy Corporation is a Tulsa, Oklahoma based
independent exploration and production company with operations in
St. Charles Parish, Louisiana.
AMNON SHREIBMAN: Files Reorganization Plan
------------------------------------------
Brian Reisinger, senior staff reporter at Nashville Business
Journal, reports that real estate developer Amnon Shreibman has
submitted a reorganization plan under which he would give up major
chunks of "non-income producing" property to various banks that he
owes money to in the wake of the recession.
According to the report, Mr. Shreibman will mainly give up
property that hasn't been developed -- empty plats, devoid of
homes or businesses to generate any cash. The report relates Mr.
Shreibman will hold on to properties that generate income, with
stated intentions of putting the cash toward repaying his debts
over the next 10 years. The report notes one key property not
currently producing any money that Mr. Shreibman is holding on to
is a site near the Hickory Hollow Mall. That's a potentially
valuable plot that could create value -- boosting his business
and/or ability to pay off his debts -- in the future.
"We think we have filed a plan that is fair to all creditors,
and should be confirmable by the court," the report quotes Mr.
Shreibman's attorney, Craig Gabbert, Esq., of Harwell Howard Hyne
Gabbert & Manner of Nashville, Tennessee, as saying.
Amnon Shreibman and Ruth Shreibman filed for Chapter 11 protection
(Bankr. M.D. Tenn. Case No. 12-05272) on June 7, 2012.
ANDERSON NEWS: Delaware Court Dismisses Downtown Newsstand Appeal
-----------------------------------------------------------------
Delaware District Judge Leonard P. Stark dismissed an appeal filed
by Linda Gail Franklin, owner of Downtown Newsstand in Clearwater,
Florida, from the Bankruptcy Court's denying of her motion for
censure and penalty against Anderson News LLC. Judge Stark said
that, because the Notice of Appeal was untimely, the Court lacks
subject matter jurisdiction over the appeal from the Bankruptcy
Court. The case is LINDA GAIL FRANKLIN, D/B/A DOWNTOWN NEWSSTAND,
Appellant, v. ANDERSON NEWS, LLC, Appellee, Adv. Pro. No.
09-53275-CSS, Civ. No. 10-664-LPS (D. Del.). A copy of the
Court's Nov. 26, 2012 Memorandum Order is available at
http://is.gd/sB3028from Leagle.com.
About Anderson News
Anderson News LLC was a sales and marketing company for books and
magazines. Anderson News ceased doing business in February 2009,
and was the subject of an involuntary Chapter 7 petition filed by
certain of its creditors (Bankr. D. Del. Case No. 09-10695) on
March 2, 2009. The publishing companies claimed that Anderson
News owes them a combined $37.5 million. An order for relief was
entered on Dec. 30, 2009, and the bankruptcy case was converted
from one under Chapter 7 to one under Chapter 11 on the same day.
APPLIED MINERALS: Four Directors Elected to Board
-------------------------------------------------
The annual meeting of stockholders of Applied Minerals Inc. was
held on Nov. 20, 2012, at which the stockholders:
(1) elected John Levy, Evan Stone, David Taft and Andre Zeitoun
as directors;
(2) approved the amendment of the Certificate of incorporation
to increase the number of authorized shares from
130,000,000 to 210,000,000 and the number of authorized
shares of common stock from 120,000,000 to 200,000,000;
(3) approved an advisory, non-binding vote on executive
compensation;
(4) voted for annual advisory votes on executive compensation;
(5) approved the Applied Minerals, Inc. 2012 Long-Term
Incentive Plan and the performance criteria used in setting
performance goals for awards intended to be performance-
based under Code Section 162(m);
(6) approved the Applied Minerals, Inc. 2012 Short-Term
Incentive Plan and the performance criteria used in setting
performance goals for awards intended to be performance-
based under Code Section 162(m); and
(7) ratified the appointment of EisnerAmper LLP as the
Company's independent registered public accounting firm.
A complete copy of the Form 8-K is available for free at:
http://is.gd/EiRWyX
About Applied Minerals
New York City-based Applied Minerals, Inc. (OTC BB: AMNL) is a
leading global producer of halloysite clay used in the development
of advanced polymer, catalytic, environmental remediation, and
controlled release applications. The Company operates the Dragon
Mine located in Juab County, Utah, the only commercial source of
halloysite clay in the western hemisphere. Halloysite is an
aluminosilicate clay that forms naturally occurring nanotubes.
The Company reported a net loss attributable to the Company of
$7.48 million in 2011, a net loss attributable to the Company of
$4.76 million in 2010, and a net loss attributable to the Company
of $6.76 million in 2009.
The Company's balance sheet at Sept. 30, 2012, showed $9.53
million in total assets, $2.32 million in total liabilities and
$7.21 million in total stockholders' equity.
Going Concern
The Company has incurred material recurring losses from
operations. At March 31, 2012, the Company had a total
accumulated deficit of approximately $43,084,500. For the three
months ended March 31, 2012, and 2011, the Company sustained net
losses from exploration stage before discontinued operations of
approximately $4,056,700 and $1,695,100, respectively. The
Company said that these factors indicate that it may be unable to
continue as a going concern for a reasonable period of time. The
Company's continuation as a going concern is contingent upon its
ability to generate revenue and cash flow to meet its obligations
on a timely basis and management's ability to raise financing or
dispose of certain non-core assets as required. If successful,
this will mitigate the factors that raise substantial doubt about
the Company's ability to continue as a going concern.
Bankruptcy Warning
At Dec. 31, 2011, and 2010, the Company had accumulated deficits
of $39,183,632 and $31,543,411, respectively, in addition to
limited cash and unprofitable operations. For the year ended
Dec. 31, 2011, and 2010, the Company sustained net losses before
discontinued operations of $7,476,864 and $4,891,525,
respectively. As of March 15, 2012, the Company has not
commercialized the Dragon Mine and has had to rely on cash flow
generated from the sale of stock and convertible debt to fund its
operations. If the Company is unable to fund its operations
through the commercialization of the Dragon Mine, the sale of
equity or debt or a combination of both, it may have to file
bankruptcy.
ARMSTRONG ENERGY: Moody's Assigns 'B3' CFR/PDR; Outlook Stable
--------------------------------------------------------------
Moody's Investors Service assigned a B3 corporate family rating
(CFR) and probability of default rating (PDR) to Armstrong Energy
Inc. and a B3 rating to the company's proposed $200 million senior
secured notes due 2019. The rating outlook is stable.
The proceeds from the proposed note offering will be used to repay
certain indebtedness, fund capital expenditures for mine
development and to support potential reserve acquisitions. The
company plans to pay down the outstanding balance on its term loan
and revolving credit facility and to establish a new credit
facility with a borrowing limit of $50 million.
Rating Assignments:
Issuer: Armstrong Energy Inc.
Corporate Family Rating, Assigned B3
Probability of Default Rating, Assigned B3
Senior Secured Regular Bond/Debenture, Assigned B3 (LGD3, 47%)
Outlook, Stable
This is a newly initiated rating and is Moody's first press
release on this issuer.
RATING RATIONALE
The B3 corporate family and probability of default ratings reflect
Armstrong's elevated leverage, small scale and lack of operating
diversification, weak profitability, short corporate history, high
degree of customer concentration, and the inherent geologic and
operating risks associated with coal mining. Additionally, the
company's growth plans and the possibility of further debt
financed reserve acquisitions are limitations for the rating.
Armstrong's strengths include its substantive reserve base in the
Illinois Basin, large percentage of sales to investment grade
utility customers located near its mining operations and its
expected pro forma liquidity after this transaction. Armstrong is
expected to have approximately $70 million of cash and equivalents
and full availability under the new $50 million revolving credit
facility.
The stable outlook reflects the company's good contract position
with high quality utilities with scrubber systems in place that
are permitted to burn high sulfur coal as well as the company's
reasonable cost position and adequate liquidity.
The ratings could be revised upward if Armstrong successfully
ramps up production and achieves the scale and profitability that
enables the company to deleverage, secures favorably priced sales
contracts, and maintains adequate liquidity.
The ratings could come under downward pressure if the company's
liquidity and cash flow expectations are threatened by
significantly lower than expected coal production, substantially
higher operating costs, materially delayed expansion plans or the
need for significantly greater amounts of capital to support those
plans.
The principal methodology used in rating Armstrong was the Global
Mining Industry Methodology published in May 2009. Other
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the U.S., Canada and EMEA
published in June 2009.
Based in Madisonville, Kentucky, Armstrong is engaged in coal
mining in western Kentucky and sells coal to electric utilities
across the southeastern United States. For the twelve months ended
September 30, 2012 Armstrong generated revenues of $357 million.
BAJA MINING: Incurs $151.8-Mil. Net Loss in Third Quarter
---------------------------------------------------------
Baja Mining Corp. reported a net loss of US$151.8 million for the
three months ended Sept. 30, 2012, compared with net income of
US$78.4 million for the corresponding period last year.
The net loss in Q3 2012 was primarily driven by a losses of (i)
US$115.8 million relating to the loss of control of MMB upon
completion of the Stage I interim funding and (ii) US$15.2 million
representing the Company's share of results in associate (MMB),
while in the three month period ended Sept. 30, 2011, the
Company's income was primarily driven by the fair value gain of
US$66.2 million on the Company's zero cost collar hedge contract
and US$18.0 million in foreign exchange gains.
For the nine months ended Sept. 30, 2012, the net loss was
US$322.5 million as compared to net income of US$30.1 million for
the corresponding nine month period of 2011.
The loss in the first nine months of 2012 was primarily driven by:
(i) impairment losses totaling US$190.3 million, including a
US$188.1 million impairment following the announcement of the
forecasted cost overrun of the Project during the quarter ended
June 30, 2012; (ii) a loss of US$115.8 million relating to the
deconsolidation of MMB upon completion of the Stage I interim
funding in the quarter end Sept. 30, 2012; and (iii) a loss of
US$15.2 million representing the Company's share of results in
associate in the current quarter. The effect of the impairment
was partially offset by fair value adjustments to the Company's
derivative instruments. In the 2011 comparable period, the income
was primarily driven by the fair value gain on the Company's zero
cost collar hedge contracts of US$39.4 million and US$10.1 million
in foreign exchange gains.
The Company's balance sheet at Sept. 30, 2012, showed
US$47.3 million in total assets, US$15.7 million in total
liabilities, and stockholders' equity of US$31.6 million.
Going Concern Uncertainty
"During the nine-month period ended Sept. 30, 2012, the Company
incurred a loss of US$322.5 million and as at Sept. 30, 2012, the
accumulated deficit attributable to shareholders amounted to
US$406.8 million. As at Sept. 30, 2012, the Company's
consolidated working capital deficit was US$3.0 million."
"The availability of funding from Minera y Metalurgica del Boleo
S.A. de C.V. ("MMB")'s senior debt is subject to numerous
conditions and requirements, among others, that the forecast
Project capital cost overruns not exceed the existing cost overrun
facilities. As a result of MMB's cost overruns and resulting
funding shortfall, no further funds will be available from the
MMB's senior loan facilities unless an acceptable funding solution
is provided to MMB's primary lenders. The Consortium may elect to
finance the complete funding shortfall by completing Stage II of
the Consortium Financing. However, this remains subject to the
completion of further due diligence and approvals by the boards of
directors and/or of the respective members of the Consortium.
Discussions between the Consortium, the senior lenders and the
Company are ongoing but a positive resolution cannot be assured.
Should MMB continue not to be permitted to draw on its loans, the
resources available to continue with the development of the
Project would be inadequate and the Project might be required to
shut down."
"Should the Company and MMB be forced to shut down the Project
and/or the senior lenders choose to exercise remedies available to
the lender group, the Company may be ultimately held accountable
for the settlement of its proportionate obligation under the
current senior facilities completion guarantee. Regardless of any
changes in the Company's interest in MMB, the Company remains
liable for 70% of MMB's senior borrowings under the current terms
of the guarantee agreement. In addition, the Company has provided
an economic completion guarantee but shall not be required to
contribute more than 70% of any such amounts required. As at
Sept. 30, 2012, MMB had drawn US$360.8 million against its senior
facilities."
"Critical factors, amongst others, impacting the likelihood of any
demand arising under the senior borrowing guarantee and,
therefore, the Company's ability to continue as a going concern,
include the following: (i) the continued interim funding of MMB by
the Consortium; (ii) the continued support of the senior lenders
in choosing not to exercise any remedies available to them under
the Event of Default in the event of the expiration on Nov. 20,
2012, of the latest standstill agreement, (iii) an election by the
Consortium to complete the Stage II of the proposed funding
solution; (iv) approval by the senior lenders of the proposed
funding solution and reinstatement of the remaining senior debt
facilities and cost overrun facilities; (v) completion of
development of the Boleo Project; and (vii) establishing
profitable operations."
"In addition, should the Company be required to repay the
refundable manganese deposit liability, it currently has
insufficient funds available to settle this liability."
"The success of these factors above cannot be assured, and
accordingly there is substantial doubt about the Company's ability
to continue as a going concern."
A copy of the Condensed Interim Consolidated Financial Statements
dated Sept. 30, 2012, is available at http://is.gd/WcAB6si
A copy of the Managements Discussion and Analysis for the quarter
ended Sept. 30, 2012, is available at http://is.gd/xvBHYL
About Baja Mining
Baja Mining Corp. was incorporated on July 15, 1985, under the
Company Act of British Columbia. The Company's principal asset is
its investment in the Boleo Project, which is a copper-cobalt-
zinc-manganese deposit located near Santa Rosalia, Baja California
Sur, Mexico. The Project is currently under construction and
surface and underground mining activities have commenced.
The Company now owns a 49% interest in the Project through its
wholly owned Luxembourg subsidiary, Baja International S.a r.l.,
which owns 100% of a Luxembourg subsidiary, Boleo International
S.a r.l., which in turn owns 49% of the shares of MMB. MMB holds
all mineral and property rights in the Project. The remaining 51%
of MMB is owned by the Consortium, the members of which acquired
an initial 30% interest in June 2008.
BERKELEY COFFEE: Inks Licensing Agreement with Coffee Holding
-------------------------------------------------------------
Berkeley Coffee & Tea, Inc., and, its wholly-owned China
subsidiary, DTS8 Coffee (Shanghai) Co., Ltd, entered into a
licensing agreement with Coffee Holding Company, Inc., effective
Nov. 8, 2012. Pursuant to the license agreement the Company has
been granted an exclusive use of the Don Manuel Brand to roast,
market and sell coffee in the territory; which includes the People
Republic of China, Taiwan, Thailand, Vietnam, Cambodia, Laos,
Philippines, Myanmar, Indonesia, East Timor, Hong Kong, Macau,
Malaysia, Singapore and Brunei. The Company will pay a license
fee for all coffee sold under the Don Manuel Brand. The license
is valid for 5 years and will expire Nov. 1, 2017.
About Berkeley Coffee
Shanghai, China-based Berkeley Coffee & Tea Inc. was incorporated
on March 27, 2009, in the State of Nevada. Berkeley Coffee
expects to generate revenue from the marketing and sale of green
coffee beans from Yunnan, China, into the United States. It plans
to sell green bean coffee grown in China directly to coffee
wholesalers, coffee brokers and coffee roasters in the United
States.
The Company's balance sheet at July 31, 2012, showed
$4.68 million in total assets, $4.72 million in total liabilities,
and a shareholders' deficit of $39,087.
As reported in the TCR on Aug. 14, 2012, MaloneBailey, LLP, in
Houston, Texas, expressed substantial doubt about Berkeley Coffee
& Tea Inc.'s ability to continue as a going concern, following the
Company's results for the fiscal year ended April 30, 2012. The
independent auditors noted that the Company has suffered recurring
losses from operations.
BIOFUEL ENERGY: Incurs $11.3 Million Net Loss in Third Quarter
--------------------------------------------------------------
Biofuel Energy Corp. filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $11.32 million on $116.14 million of net sales for the three
months ended Sept. 30, 2012, compared with net income of $2.54
million on $162.54 million of net sales for the same period during
the prior year.
For the nine months ended Sept. 30, 2012, the Company incurred a
net loss of $34.83 million on $378.38 million of net sales, in
comparison with a net loss of $14.81 million on $489.08 million of
net sales for the same period a year ago.
The Company reported a net loss of $10.36 million in 2011,
compared with a net loss of $25.22 million during the prior year.
The Company's balance sheet at Sept. 30, 2012, showed $263.16
million in total assets, $196.94 million in total liabilities and
$66.22 million in total equity.
Bankruptcy Warning
"Drought conditions in the American Midwest have significantly
impacted this year's corn crop and caused a significant reduction
in the corn yield. Since the end of the second quarter, this has
led to a significant increase in the price of corn and a
corresponding narrowing in the crush spread. The crush spread has
narrowed as ethanol prices have not risen correspondingly with
rising corn prices, due to an oversupply of ethanol. As a result,
the Company announced on September 24, 2012 that it had decided to
idle its Fairmont facility until the crush spread improves. In
the event crush spreads narrow further, we may choose to curtail
operations at our Wood River facility or idle the facility and
cease operations altogether until such time as crush spreads
improve. We expect fluctuations in the crush spread to continue.
"Due to our limited and declining liquidity, during the third
quarter the Company determined that the two operating subsidiaries
of the LLC (the "Operating Subsidiaries") would not make the
regularly-scheduled payments of principal and interest that were
due under the outstanding Senior Debt Facility on September 28,
2012, in an aggregate amount of $3.6 million. As a result, the
Operating Subsidiaries received a Notice of Default on September
28, 2012 from First National Bank of Omaha, as Administrative
Agent for the Senior Debt Facility, concerning the failure to make
the regularly-scheduled payments of principal and interest. On
November 5, 2012, the Operating Subsidiaries and its lenders
entered into a Forbearance Agreement whereby its lenders agreed to
forbear from exercising their remedies under the Senior Debt
Facility until November 15, 2012. The Company is engaged in
active and continuing discussions with its lenders and their
advisors regarding the terms of a potential capital infusion into
the Operating Subsidiaries. This capital may take the form of a
capital contribution from the Company, additional loans, a long-
term forbearance or restructuring under the Senior Debt Facility,
some combination of the foregoing, or another form yet to be
determined. While the Company intends to reach resolution with its
lenders with respect to this matter, there can be no assurance it
will be able to do so on terms that are favorable or acceptable to
the Company, or at all.
"As of September 30, 2012, the Operating Subsidiaries had $170.5
million of indebtedness outstanding under the Senior Debt
Facility. The entire amount outstanding under the Senior Debt
Facility has been classified as a current liability in the
September 30, 2012 consolidated balance sheet. If the Company is
unable to reach an agreement with its lenders under the Senior
Debt Facility, and if its lenders successfully exercise their
remedies under the Senior Debt Facility, the Company may be unable
to continue as a going concern, and could be forced to seek relief
from creditors through a filing under the U.S. Bankruptcy Code."
A copy of the Form 10-Q is available for free at:
http://is.gd/t2OLMx
About Biofuel Energy
Denver, Colo.-based BioFuel Energy Corp. (Nasdaq: BIOF) --
http://www.bfenergy.com/-- aims to become a leading ethanol
producer in the United States by acquiring, developing, owning and
operating ethanol production facilities. It currently has two
115 million gallons per year ethanol plants in the Midwestern corn
belt.
BLACKBOARD INC: S&P Rates $500 Million Term Loan 'B+'
-----------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' issue-level
rating (one notch higher than the corporate credit rating) to
Washington, D.C.-based Blackboard Inc.'s $500 million term loan.
The recovery rating on this debt is '2', indicating expectations
of substantial (70% to 90%) recovery of principal in the event of
a payment default.
"We also affirmed our 'B' corporate credit rating on Blackboard.
The outlook is stable," S&P said.
"We believe Blackboard's 'highly leveraged' financial risk profile
more than offsets the company's 'fair' business risk profile,"
said Standard & Poor's credit analyst Jacob Schlanger. "We
estimate the pro forma year-end 2012 adjusted debt leverage to be
about 7.5x due to improved margins following integration of
recently acquired Moodlerooms and NetSpot. The company raised
incremental debt of $60 million to help finance the acquisition
and now is partial refinancing its first-lien term loan. We expect
leverage to decline over the coming year, given likely continued
revenue growth and the benefit from implementation of cost
savings."
"The company has a leading position in the educational technology
market, with its products allowing users to deliver Web-based
teaching, course and content management, community collaboration,
rapid communication, and on- and off-campus e-commerce
facilitation. The company derives more than half of its revenues
from the higher education market, and the combination with Edline
has enabled it to solidify its position and cross-sell its
products in the K-12 market as well. In addition, the recent
purchase of Moodlerooms and NetSpot will enable the company to
further its offerings in the open source market. The acquired
companies, now a part of Blackboard's new Education Open Source
Services group, are complementary to the company's existing
product portfolio and support their own open source efforts to
service a more value oriented customer segment," S&P said.
"We expect leverage to decline somewhat over the coming year due
to growth in both EBITDA and revenues. This would reflect the
growing product offering, and cash generation for debt reduction.
We consider an upgrade to be unlikely over the near term given the
company's highly leveraged debt structure. We could lower the
rating if increased competition lead to a deteriorating business
profile or further debt-financed acquisitions cause leverage to
deteriorate beyond the high-7x level over the next year," S&P
said.
BLUEGREEN CORP: Reports $11.6-Mil. Net Income in Third Quarter
--------------------------------------------------------------
Bluegreen Corporation filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing net income
attributable to the Company of $11.66 million on $126.03 million
of revenue for the three months ended Sept. 30, 2012, compared
with net income attributable to the Company of $7.05 million on
$111.71 million of revenue for the same period during the prior
year.
For the nine months ended Sept. 30, 2012, the Company reported net
income attributable to the Company of $30.57 million on
$340.71 million of revenue, as compared to a net loss attributable
to the Company of $17.11 million on $305.43 million of revenue for
the same period a year ago.
The Company reported a net loss of $17.25 million in 2011,
compared with a net loss of $43.96 million in 2010.
The Company's balance sheet at Sept. 30, 2012, showed
$1.06 billion in total assets, $720.24 million in total
liabilities and $340.77 million in total shareholders' equity.
A copy of the Form 10-Q is available for free at:
http://is.gd/ziDjrf
About Bluegreen Corp.
Bluegreen Corporation -- http://www.bluegreencorp.com/-- provides
places to live and play through its resorts and residential
community businesses.
* * *
In December 2010, Standard & Poor's Rating Services raised its
corporate credit rating on Bluegreen Corp to 'B-' from 'CCC'.
BROADCAST INTERNATIONAL: Incurs $711,000 Net Loss in 3rd Quarter
----------------------------------------------------------------
Broadcast International, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing
a net loss of $711,072 on $2.04 million of net sales for the three
months ended Sept. 30, 2012, compared with net profit of
$4.03 million on $2.27 million of net sales for the same period
during the prior year.
The Company reported a net loss of $49,357 on $5.79 million of net
sales for the nine months ended Sept. 30, 2012, compared with net
profit of $3.72 million on $6.32 million of net sales for the same
period a year ago.
The Company reported net income of $1.30 million in 2011, compared
with a net loss of $18.66 million in 2010.
The Company's balance sheet at Sept. 30, 2012, showed
$3.15 million in total assets, $9.45 million in total liabilities,
and a $6.30 million total stockholders' deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/b1Nakx
About Broadcast International
Based in Salt Lake City, Broadcast International, Inc., installs,
manages and supports private communication networks for large
organizations that have widely-dispersed locations or operations.
The Company owns CodecSys, a video compression technology to
convert video content into a digital data stream for transmission
over satellite, cable, Internet, or wireless networks, as well as
offers audio and video production services. The Company's
enterprise clients use its networks to deliver training programs,
product announcements, entertainment, and other communications to
their employees and customers.
BROWNIE'S MARINE: Incurs $431,800 Net Loss in Third Quarter
-----------------------------------------------------------
Brownie's Marine Group, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing a
net loss of $431,898 on $990,388 of total net revenues for the
three months ended Sept. 30, 2012, compared with a net loss of
$409,669 on $659,261 of total net revenues for the same period
during the prior year.
The Company reported a net loss of $1.17 million on $2.34 million
of total net revenues for the nine months ended Sept. 30, 2012,
compared with a net loss of $3.14 million on $1.61 million of
total net revenues for the same period a year ago.
The Company's balance sheet at Sept. 30, 2012, showed
$1.06 million in total assets, $1.83 million in total liabilities
and a $769,974 total stockholders' deficit.
Bankruptcy Warning
"If we fail to raise additional funds when needed, or do not have
sufficient cash flows from sales, we may be required to scale back
or cease operations, liquidate our assets and possibly seek
bankruptcy protection," the Company said in the Quarterly Report.
As reported in the TCR on April 2, 2012, L.L. Bradford & Company,
LLC, in Las Vegas, Nevada, expressed substantial doubt about
Brownie's Marine Group's ability to continue as a going concern,
following the Company's results for the fiscal year ended Dec. 31,
2011. The independent auditors noted that the Company has a
working capital deficiency and recurring losses and will need to
secure new financing or additional capital in order to pay its
obligations.
A copy of the Form 10-Q is available for free at:
http://is.gd/Nn3qzG
Unregistered Sales
Effective Nov. 2, 2012, the Company issued 25,000,000 shares of
restricted common stock to Mikkel Pitzner, a member of its board
of directors in satisfaction of a $22,500 fee payable to the board
member for serving on the Company's board of directors for the
nine month period ended Sept. 30, 2012. The shares were valued at
$0.0009 per share, which equals the closing price of the Company's
common stock on Nov. 2, 2012, as reported on the OTCBB.
In addition, effective Nov. 2, 2012, the Company issued restricted
stock grants to acquire up to 105,000,000 shares of restricted
common stock to thirteen employees and consultants in
consideration of incentive bonuses in the aggregate amount of
$97,650. The shares were valued at $0.0009 per share, which
equals the closing price of the Company's common stock on Nov. 2,
2012, as reported on the OTCBB.
The Company relied upon exemption provided under Section 4(2) of
the Securities Act of 1933, as amended, for the issuance of the
common stock. The certificates representing the common stock
contain legends restricting transferability absent registration or
applicable exemption.
The Company agreed to pay an aggregate bonus of $97,650 to certain
employees and consultants of the Company, including Robert
Carmichael, Mikkel Pitzner, such bonus payable in restricted stock
grants which vest on May 2, 2013. The shares were valued at
$0.0009 per share, which equals the closing price of the Company's
common stock on Nov0. 2, 2012, as reported on the OTCBB. The
Company issued 105,000,000 restricted stock grants to thirteen
employees and consultants, including 50,000,000 shares of
restricted common stock issuable to Robert Carmichael, the
Company's chief executive officer, and 25,000,000 shares to Mikkel
Pitzner its consultant and director, a related party. The grants
are subject to vesting on May 2, 2013. The grants will be
forfeited by the recipient in the event such person ceases to
perform services for the Company on or before May 2, 2013. The
bonuses and grants were approved by the Company's board of
directors.
About Brownie's Marine
Brownie's Marine Group, Inc., does business through its wholly
owned subsidiary, Trebor Industries, Inc., d/b/a Brownie's Third
Lung, a Florida corporation. The Company designs, tests,
manufactures and distributes recreational hookah diving, yacht
based scuba air compressor and nitrox generation systems, and
scuba and water safety products. BWMG sells its products both on
a wholesale and retail basis, and does so from its headquarters
and manufacturing facility in Fort Lauderdale, Florida. The
Company's common stock is quoted on the OTC BB under the symbol
"BWMG". The Company's website is www.browniesmarinegroup.com.
CAPITOL BANCORP: Incurs $6.1-Mil. Net Loss in Third Quarter
-----------------------------------------------------------
Capitol Bancorp Ltd. filed its quarterly report on Form 10-Q,
reporting a net loss of $6.1 million for the three months ended
Sept. 30, 2012, compared with a net loss of $24.8 million for the
same period last year. Total revenues from continuing operations
totaled $24.8 million for the three months ended Sept. 30, 2012.
compared to $28.1 million for the same period last year.
Provision for loan losses was $462,000 for the three months ended
Sept. 30, 2012, compared to a provision for loan losses of
$15.5 million for the corresponding period of 2011. Total
noninterest expense was $23.7 million for the three months ended
Sept. 30, 2012, compared to $28.7 million for the corresponding
period of 2011.
For the nine months ended Sept. 30, 2012, the Company had a net
loss of $25.8 million, compared with a net loss of $45.0 million
for the same period of 2011. Total revenues from continuing
operations totaled $73.0 million for the nine months ended
Sept. 30, 2012, compared to $104.8 million for the same period
last year. Total revenues from continuing operations for the nine
months ended Sept. 30, 2011, included a $16.9 million gain related
to an exchange of trust-preferred securities.
The net loss for the nine months ended Sept. 30, 2012, showed
significant improvement compared to the corresponding 2011 interim
period, exclusive of the one-time gain related to an exchange of
trust-preferred securities. There was a significant reduction in
the provision for loan losses from $31.1 million to $1.6 million
for the nine months ended Sept. 30, 2012, compared to a provision
of $32.7 million for the corresponding period of 2011 (excluding
discontinued operations), as well as a reduction in total
noninterest expense of $17.6 million, or 18.5%, in the 2012 period
as compared to the corresponding 2011 period.
The Company's balance sheet at Sept. 30, 2012, showed
$1.749 billion in total assets, $1.891 billion in total
liabilities, and a stockholders' deficit of $141.8 million.
A copy of the Form 10-Q is available at http://is.gd/eTAIVu
About Capitol Bancorp
Capitol Bancorp Ltd. and Financial Commerce Corporation filed
voluntary Chapter 11 bankruptcy petitions (Bankr. E.D. Mich. Case
Nos. 12-58409 and 12-58406) on Aug. 9, 2012.
Capitol Bancorp -- http://www.capitolbancorp.com/-- is a
community banking company with a network of individual banks and
bank operations in 10 states and total consolidated assets of
roughly $2.0 billion as of June 30, 2012. CBC owns roughly 97% of
FCC, with a number of CBC affiliates owning the remainder. FCC,
in turn, is the holding company for five of the banks in CBC's
network. CBC is registered as a bank holding company under the
Bank Holding Company Act of 1956, as amended, 12 U.S.C. Sec. 1841,
et seq., and trades on the OTCQB under the symbol "CBCR."
Lawyers at Honigman Miller Schwartz and Cohn LLP represent the
Debtors as counsel.
In its petition, Capitol Bancorp scheduled $112,634,112 in total
assets and $195,644,527 in total liabilities. The petitions were
signed by Cristin K. Reid, corporate president.
CASCADE BANCORP: Posts $1.82 Million Net Income in Third Quarter
----------------------------------------------------------------
Cascade Bancorp filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing net income
of $1.82 million on $13.46 million of total interest income for
the three months ended Sept. 30, 2012, compared with a net loss of
$54.42 million on $16.17 million of total interest income for the
same period during the prior year.
For the nine months ended Sept. 30, 2012, the Company reported net
income of $4.64 million on $41.85 million of total interest
income, compared to a net loss of $21.36 million on $52.18 million
of total interest income for the same period a year ago.
Cascade reported a net loss of $47.27 million in 2011, a net loss
of $13.65 million in 2010, and a net loss of $114.83 million in
2009.
The Company's balance sheet at Sept. 30, 2012, showed $1.29
billion in total assets, $1.15 billion in total liabilities and
$139.27 million in total stockholders' equity.
A copy of the Form 10-Q is available for free at:
http://is.gd/Ej4vNX
About Cascade Bancorp
Bend, Ore.-based Cascade Bancorp (Nasdaq: CACB) through its
wholly-owned subsidiary, Bank of the Cascades, offers full-service
community banking through 32 branches in Central Oregon, Southern
Oregon, Portland/Salem Oregon and Boise/Treasure Valley Idaho.
Cascade Bancorp has no significant assets or operations other than
the Bank.
Weiss Ratings has assigned its E- rating to Bend, Ore.-based Bank
of The Cascades. The rating company says that the institution
currently demonstrates what it considers to be significant
weaknesses and has also failed some of the basic tests it uses to
identify fiscal stability. "Even in a favorable economic
environment," Weiss says, "it is our opinion that depositors or
creditors could incur significant risks."
CECIL BANCORP: Incurs $15.8 Million Net Loss in Third Quarter
-------------------------------------------------------------
Cecil Bancorp Inc. filed its quarterly report on Form 10-Q,
reporting a net loss of $15.76 million for the three months ended
Sept. 30, 2012, compared with a net loss of $748,000 for the same
period last year. Total revenues totaled $3.52 million for the
three months ended Sept. 30, 2012, compared to $3.63 million for
the same period last year.
Provision for loan losses was $2.85 million for the three months
ended Sept. 30, 2012, compared to a provision for loan losses of
$958,000 for the corresponding period of 2011. Total non-interest
expense was $7.44 million for the three months ended Sept. 30,
2012, compared to $3.95 million for the corresponding period of
2011.
Income tax expense for the three-month period ended Sept. 30,
2012, was $9.08 million as compared to an income tax benefit of
$537,000 for the same period in 2011.
For the nine months ended Sept. 30, 2012, the Company had a net
loss of $17.64 million, compared with a net loss of $3.40 million
for the same period of 2011. Total revenues totaled
$11.53 million for the months ended Sept. 30, 2012, compared to
$11.57 million for the same period last year.
Provision for loan losses was $5.91 million for the nine months
ended Sept. 30, 2012, compared to a provision for loan losses of
$5.96 for the corresponding period of 2011. Total non-interest
expense was $15.40 million for the three months ended Sept. 30,
2012, compared to $11.38 million for the corresponding period of
2011.
Income tax expense for the nine month period ended Sept. 30, 2012,
was $7.87 million as compared to an income tax benefit of
$2.37 million for the same period in 2011.
The Company's balance sheet at Sept. 30, 2012, showed
$442.98 million in total assets, $425.92 million in total
liabilities, and stockholders' equity of $17.06 million.
The Company said in the regulatory filing: "Due to our elevated
level of nonperforming assets and recurring operating losses,
there is substantial doubt regarding our ability to continue as a
going concern."
A copy of the Form 10-Q is available at http://is.gd/RpaoFf
Cecil Bancorp, Inc., is the holding company for Cecil Bank. The
Bank is a community-oriented Maryland chartered commercial bank,
is a member of the Federal Reserve System and the Federal Home
Loan Bank ("FHLB") of Atlanta, and is an Equal Housing Lender.
The Bank commenced operations in 1959 as a Federal savings and
loan association. On Oct. 1, 2002, the Bank converted from a
stock federal savings bank to a commercial bank.
The Bank conducts its business through its main office in Elkton,
Maryland, and branches in Elkton, North East, Fair Hill, Rising
Sun, Cecilton, Aberdeen, Conowingo, and Havre de Grace, Maryland.
CHATTAHOOCHEE VALLEY: S&P Alters BB- Bond Rating Outlook to Stable
------------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook to stable
from positive and affirmed its 'BB-' long-term rating on Lanier
Health Services, Ala.'s $10.28 million series 1997A bonds, issued
for Chattahoochee Valley Hospital Society Inc.
"The outlook revision reflects our view of the decline in
operating income levels in fiscal 2012, very weak maximum annual
debt service coverage, very light operational liquidity, flat
year-over-year patient activity, and competitive marketplace,"
said Standard & Poor's credit analyst Kevin Holloran.
CHINA GREEN: Delays Form 10-Q for Third Quarter
-----------------------------------------------
China Green Creative, Inc., is in the process of preparing its
consolidated financial statements as of and for the three months
ended Sept. 30, 2012. The process of compiling and disseminating
the information required to be included in its Form 10-Q interim
report for the three months ended Sept. 30, 2012, as well as the
completion of the required review of the Company's financial
information, was not be completed by Nov. 14, 2012, without
incurring undue hardship and expense. The Company undertakes the
responsibility to file that quarterly report no later than five
calendar days after its original due date.
About China Green
China Green Creative, Inc., located in Shenzhen, Guangdong
Province, People's Republic of China, is principally engaged in
the distribution of consumer goods and electronic products in the
PRC.
After auditing the 2011 results, Madsen & Associates CPA's, Inc.,
in Salt Lake City, Utah, expressed substantial doubt about China
Green Creative's ability to continue as a going concern. The
independent auditor noted that the Company does not have the
necessary working capital to service its debt and for its planned
activity.
The Company reported a net loss of $344,901 on $1.93 million of
revenues for 2011, compared with a net loss of $3.35 million on
$2.78 million of revenues for 2010.
The Company's balance sheet at June 30, 2012, showed $5.43 million
in total assets, $7.43 million in total liabilities, and a
$2 million total stockholders' deficit.
CHINA TEL GROUP: Sells Shares to Kenneth Hobbs, et al.
------------------------------------------------------
Since its most recent report filed on any of Forms 8-K, 10-K or
10-Q, VelaTel Global Communications, Inc., formerly known as China
Tel Group Inc., has made sales of unregistered securities, namely
shares of the Company's Series A common stock and warrants
granting the holder a right to acquire one Series A Share for each
warrant. The aggregate number of Series A Shares sold exceeds 5%
of the total number of those shares issued and outstanding as of
the Company's latest filed Report in which the Sale of Series A
Shares was first reported, on Form 8-K filed on Nov. 15, 2012.
On Nov. 21, 2012, the Company issued 2,129,520 Series A Shares and
2,129,520 Warrants to Kenneth Hobbs IRA in payment of a promissory
note in the amount of $48,421 in favor of Kenneth Hobbs IRA. Each
Warrant has an exercise price of $0.02442 and an exercise term of
three years. This sale of Shares resulted in a principal
reduction of $48,421 in notes payable of the Company, and payment
of $3,581 of accrued interest.
On Nov. 21, 2012, the Company issued 1,526,792 Series A Shares and
1,526,792 Warrants to Kenneth Hobbs in payment of accrued
compensation owed to Kenneth Hobbs as an independent contractor.
Each Warrant has an exercise price of $0.03053 and an exercise
term of three years. This sale of Shares resulted in a reduction
of $46,612 in accounts payable of the Company.
On Nov. 21, 2012, the Company issued 2,047,502 Series A Shares and
2,047,502 Warrants to Nathan Alvarez, as partial assignee of Weal
Group, Inc., in partial payment of a line of credit promissory
note of up to $1,052,631 in favor of Weal Group, Inc. Each
Warrant has an exercise price of $0.02442 and an exercise term of
three years. This sale of Shares resulted in a principal
reduction of $50,000 in notes payable of the Company, and payment
of $0 of accrued interest.
On Nov. 21, 2012, the Company issued 4,570,651 Series A Shares and
4,570,651 Warrants to Isidoro Gutierrez in payment of accrued
compensation owed to Isidoro Gutierrez as an independent
contractor. Each Warrant has an exercise price of $0.03053 and an
exercise term of three years. This sale of Shares resulted in a
reduction of $139,541 in accounts payable of the Company.
On Nov. 21, 2012, the Company issued 4,392,411 Series A Shares and
4,392,411 Warrants to Carlos Trujillo in payment of accrued
compensation owed to Carlos Trujillo as an independent contractor.
Each Warrant has an exercise price of $0.03053 and an exercise
term of three years. This sale of Shares resulted in a reduction
of $134,100 in accounts payable of the Company.
As of Nov. 21, 2012, and immediately following the issuances, the
Company has 91,713,683 shares of its Series A common stock
outstanding, with a par value of $0.001, and 20,000,000 shares of
its Series B common stock outstanding, with a par value of $0.001.
About China Tel
Based in San Diego, California, and Shenzhen, China, China Tel
Group, Inc. (OTC BB: CHTL) -- http://www.ChinaTelGroup.com/--
provides high speed wireless broadband and telecommunications
infrastructure engineering and construction services. Through its
controlled subsidiaries, the Company provides fixed telephony,
conventional long distance, high-speed wireless broadband and
telecommunications infrastructure engineering and construction
services. ChinaTel is presently building, operating and deploying
networks in Asia and South America: a 3.5GHz wireless broadband
system in 29 cities across the People's Republic of China with and
for CECT-Chinacomm Communications Co., Ltd., a PRC company that
holds a license to build the high speed wireless broadband system;
and a 2.5GHz wireless broadband system in cities across Peru with
and for Perusat, S.A., a Peruvian company that holds a license to
build high speed wireless broadband systems.
After auditing the 2011 results, Kabani & Company, Inc., in Los
Angeles, California, expressed substantial doubt as to the
Company's ability to continue as a going concern. The independent
auditors noted that the Company has incurred a net loss for the
year ended Dec. 31, 2011, cumulative losses of $254 million since
inception, a negative working capital of $16.4 million and a
stockholders' deficiency of $9.93 million.
The Company reported a net loss of $21.79 million in 2011,
compared with a net loss of $66.62 million in 2010.
The Company's balance sheet at Sept. 30, 2012, showed $21.55
million in total assets, $26.54 million in total liabilities and a
$4.99 million total stockholders' deficiency.
CHINA TEL GROUP: Buys MVNO China Motion Telecom for $5.8 Million
----------------------------------------------------------------
VelaTel Global Communications, formerly known as China Tel
Group Inc., is paying HK$45 million (US$5.8 million) to acquire
100% of the capital stock of China Motion Telecom (HK) Limited.
China Motion, http://www.cmmobile.com.hk/eng/,is the leading
mobile virtual network operator (MVNO) in Hong Kong, with more
than 100,000 customers, generating $12 million in revenue and $2
million in EBITDA (net of certain intercompany charges) during its
fiscal year completed March 31, 2012. As an MVNO, China Motion
partners with leading mobile carriers in Greater China region to
provide mobile wireless network services to retail customers using
its own billing support systems, customer service and sales
personnel. China Motion's business model focusses on frequent
travelers who conduct cross-border business between Hong Kong,
Taiwan and mainland China. China Motion offers customers a single
cell phone SIM chip with dual number capability for use in both
Hong Kong and China.
The acquisition of China Motion furthers several of VelaTel's long
term strategic goals. First, China Motion's access to wholesale
voice and data services using the wireless network resources of
incumbent carriers will allow VelaTel to begin deployment of its
projects in mainland China for state owned companies NGSN and
China Aerospace with a fraction of the capital expenditures
originally budgeted. Second, China Motion's experience and
personnel in sales and marketing, customer service and billing
solutions provides a platform to serve not only the NGSN and China
Aerospace projects, but also VelaTel's expanding networks in Peru,
Croatia, and Montenegro. Third, the acquisition creates
tremendous synergies with VelaTel's Europe based subsidiary Zapna,
which also focusses on long distance and roaming solutions that
cater particularly to the frequent international traveler.
"Our management and our investors are very pleased with the China
Motion acquisition," stated VelaTel's President, Colin Tay. "Not
only are the financial terms very favorable from the standpoint of
purchase price compared to enterprise value; the real value comes
from the synergies with our other divisions and the operational
experience China Motion provides."
A copy of the Agreement is available for free at:
http://is.gd/oaQGMj
About China Tel
Based in San Diego, California, and Shenzhen, China, China Tel
Group, Inc. (OTC BB: CHTL) -- http://www.ChinaTelGroup.com/--
provides high speed wireless broadband and telecommunications
infrastructure engineering and construction services. Through its
controlled subsidiaries, the Company provides fixed telephony,
conventional long distance, high-speed wireless broadband and
telecommunications infrastructure engineering and construction
services. ChinaTel is presently building, operating and deploying
networks in Asia and South America: a 3.5GHz wireless broadband
system in 29 cities across the People's Republic of China with and
for CECT-Chinacomm Communications Co., Ltd., a PRC company that
holds a license to build the high speed wireless broadband system;
and a 2.5GHz wireless broadband system in cities across Peru with
and for Perusat, S.A., a Peruvian company that holds a license to
build high speed wireless broadband systems.
After auditing the 2011 results, Kabani & Company, Inc., in Los
Angeles, California, expressed substantial doubt as to the
Company's ability to continue as a going concern. The independent
auditors noted that the Company has incurred a net loss for the
year ended Dec. 31, 2011, cumulative losses of $254 million since
inception, a negative working capital of $16.4 million and a
stockholders' deficiency of $9.93 million.
The Company reported a net loss of $21.79 million in 2011,
compared with a net loss of $66.62 million in 2010.
The Company's balance sheet at Sept. 30, 2012, showed $21.55
million in total assets, $26.54 million in total liabilities and a
$4.99 million total stockholders' deficiency.
CHRYSLER LLC: Product Liability Suit Goes Back to State Court
-------------------------------------------------------------
Senior District Judge E. Richard Webber remanded to state court
the product liability lawsuit captioned as, TOT PRATT, III, and
KAREN PRATT Plaintiffs, v. SOUTH COUNTY MOTOR SALES, INC., d/b/a
DON FLIER MOTORS, Defendant/Third-Party Plaintiff, v. CHRYSLER
GROUP, LLC, Third-Party Defendant, Case No. 4:12CV01492 (E.D.
Mo.), pursuant to a Nov. 26, 2012 Memorandum and Order available
at http://is.gd/u7WI3Qfrom Leagle.com.
The Pratts filed a complaint in September 2010 in the Circuit
Court of the 23rd Judicial Circuit of Missouri against South
County Motor Sales, Inc., d/b/a Don Flier Motors. The complaint
alleged strict liability and negligence against Don Flier in
connection with its sale and service of an allegedly defective
2006 Jeep Commander. The Pratts sought recovery for personal
injuries and loss of consortium as the result of an accident that
occurred in May 2009. On July 19, 2012, Don Flier filed a Third-
Party Petition seeking contribution against Chrysler Group, LLC.
Chrysler Group filed a Notice of Removal on Aug. 20, 2012, on
account of Chrysler LLC's 2009 bankruptcy.
About Chrysler
Chrysler Group LLC, formed in 2009 from a global strategic
alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge, Ram
Truck, Mopar(R) and Global Electric Motorcars (GEM) brand
vehicles and products. Headquartered in Auburn Hills, Michigan,
Chrysler Group LLC's product lineup features some of the world's
most recognizable vehicles, including the Chrysler 300, Jeep
Wrangler and Ram Truck. Fiat will contribute world-class
technology, platforms and powertrains for small- and medium-sized
cars, allowing Chrysler Group to offer an expanded product line
including environmentally friendly vehicles.
Chrysler LLC and 24 affiliates on April 30, 2009, sought Chapter
11 protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead
Case No. 09-50002). Chrysler hired Jones Day, as lead counsel;
Togut Segal & Segal LLP, as conflicts counsel; Capstone Advisory
Group LLC, and Greenhill & Co. LLC, for financial advisory
services; and Epiq Bankruptcy Solutions LLC, as its claims agent.
As of Dec. 31, 2008, Chrysler had $39,336,000,000 in assets and
$55,233,000,000 in debts. Chrysler had $1.9 billion in cash at
that time.
In connection with the bankruptcy filing, Chrysler reached an
agreement with Fiat SpA, the U.S. and Canadian governments and
other key constituents regarding a transaction under Section 363
of the Bankruptcy Code that would effect an alliance between
Chrysler and Italian automobile manufacturer Fiat. Under the
terms approved by the Bankruptcy Court, the company formerly
known as Chrysler LLC on June 10, 2009, formally sold
substantially all of its assets, without certain debts and
liabilities, to a new company that will operate as Chrysler Group
LLC. Fiat acquired a 20% equity interest in Chrysler Group as
part of the deal.
The U.S. and Canadian governments provided Chrysler with
$4.5 billion to finance its bankruptcy case. Those loans were
repaid with the proceeds of the bankruptcy estate's liquidation.
In April 2010, the Bankruptcy Court confirmed Chrysler's
Liquidating Plan. That Plan was declared effective April 30,
2010.
The Debtor changed its corporate name to Old CarCo following the
sale.
CLAIRE'S STORES: Expects to $363-Mil. in Third Quarter Sales
------------------------------------------------------------
Claire's Stores, Inc., expects to report net sales of $363 million
for the 2012 third quarter, an increase of $7 million, or 2.1%,
compared to the 2011 third quarter. The increase was attributable
to new store sales and same store sales, partially offset by the
effect of store closures and foreign currency translation effect
of our foreign locations' sales. Net sales would have increased
4.4% excluding the impact from foreign currency rate changes.
Adjusted EBITDA in the 2012 third quarter is expected to be
between $65 million and $67 million, compared to $62.6 million in
the 2011 third quarter. The Company defines Adjusted EBITDA as
earnings before provision for income taxes, gain (loss) on early
debt extinguishment, net interest expense, depreciation and
amortization. Adjusted EBITDA, excludes severance, management
fees, the impact of transaction-related costs and other non-
recurring or non-cash expenses, and normalizing occupancy costs
for certain rent-related adjustments. The Company expects to
report operating income for the fiscal 2012 third quarter in the
range of $49 million to $51 million, compared to $44.6 million in
the fiscal 2011 third quarter.
At Oct. 27, 2012, cash and cash equivalents were $63 million, and
the Company's recently amended $115 million Revolving Credit
Facility was undrawn. In the 2012 third quarter, the Company paid
in full $664.6 million of indebtedness under the Company's senior
secured term loan with the net proceeds of additional Senior
Secured First Lien Notes together with cash on hand. In addition,
the Company replaced its existing senior secured revolving credit
facility with the amended and restated $115 million five-year
senior secured revolving credit facility.
A copy of the press release is available for free at:
http://is.gd/eUR9dU
About Claire's Stores
Claire's Stores, Inc. -- http://www.clairestores.com/-- operates
as a specialty retailer of fashion accessories and jewelry for
preteens and teenagers, as well as for young adults in North
America and internationally. It offers jewelry products that
comprise costume jewelry, earrings, and ear piercing services; and
accessories, including fashion accessories, hair ornaments,
handbags, and novelty items.
Based in Pembroke Pines, Florida, Claire's Stores operates under
two brands: Claire's(R), which operates worldwide and Icing(R),
which operates only in North America. As of Jan. 31, 2009,
Claire's Stores, Inc., operated 2,969 stores in North America and
Europe. Claire's Stores also operates through its subsidiary,
Claire's Nippon, Co., Ltd., 213 stores in Japan as a 50:50 joint
venture with AEON, Co., Ltd. The Company also franchises 198
stores in the Middle East, Turkey, Russia, South Africa, Poland
and Guatemala.
The Company's balance sheet at July 28, 2012, showed $2.72 billion
in total assets, $2.78 billion in total liabilities, and a
$61.01 million stockholders' deficit.
* * *
As reported by the TCR on Oct. 1, 2012, Moody's Investors Service
upgraded Claire's Stores, Inc.'s Corporate Family and Probability
of Default ratings to Caa1 from Caa2. The upgrade of Claire's
Corporate Family Rating to Caa1 reflects its ability to address
its substantial term loan maturity in 2014 by refinancing it with
a $625 million add-on to its existing senior secured first lien
notes due 2019.
Claire's Stores, Inc., carries a 'B-' Corporate Credit Rating from
Standard & Poor's Ratings Services.
COMMONWEALTH BIOTECHNOLOGIES: Delays Form 10-Q for Third Quarter
----------------------------------------------------------------
Commonwealth Biotechnologies, Inc., notified the U.S. Securities
and Exchange Commission it will be delayed in filing its quarterly
report on Form 10-Q for the period ended Sept. 30, 2012.
As a result of the Acting Principal Financial Officer working on a
part-time basis and to allow adequate time for the Company's
Independent Public Accountants to complete their review of the
quarter-to-date and year-to-date periods ending Sept. 30, 2012,
the Company needs an extension of the prescribed time period to
file its Form 10-Q for the quarter. The Company will file its
Form 10-Q within the time constraints provided by Rule 12b-25
promulgated under the Securities Exchange Act of 1934, as amended.
About Commonwealth Biotechnologies
Based in Midlothian, Virginia, Commonwealth Biotechnologies, Inc.,
was a specialized life sciences outsourcing business that offered
cutting-edge expertise and a complete array of Peptide-based
discovery chemistry and biology products and services through its
wholly owned subsidiary Mimotopes Pty Limited.
Commonwealth Biotechnologies Inc. filed for Chapter 11 bankruptcy
protection (Bankr. E.D. Va. Case No. 11-30381) on Jan. 20, 2011.
Judge Kevin R. Huennekens presides over the case. Paula S. Beran,
Esq., at Tavenner & Beran, PLC, represents the Debtor. The Debtor
estimated both assets and debts of between $1 million and
$10 million.
On April 7, 2011, the Bankruptcy Court approved the private sale
of Mimotopes for a gross sales price of $850,000. The sale closed
on April 29, 2011. Mimotopes was deconsolidated during the second
quarter of 2011.
In the auditors' report accompanying the consolidated financial
statements for the year ended Dec. 31, 2011, Witt Mares, PLC, in
Richmond, Virginia, noted that the Company's recurring losses from
operations and inability to generate sufficient cash flow to meet
its obligations and sustain its operations raise substantial doubt
about its ability to continue as a going concern.
The Company's balance sheet at June 30, 2012, showed $1.20 million
in total assets, $1.79 million in total liabilities, and a
$598,484 total stockholders' deficit.
COMMUNITY FIRST: Files Form 10-Q, Incurs 1.4MM Net Loss in Q3
-------------------------------------------------------------
Community First, Inc., filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $1.39 million on $5.49 million of total interest income for the
three months ended Sept. 30, 2012, compared with a net loss of
$3.75 million on $6.87 million of total interest income for the
same period during the prior year.
For the nine months ended Sept. 30, 2012, Community First recorded
net income of $725,000 on $17.71 million of total interest income,
as compared to a net loss of $8.62 million on $21.92 million of
total interest income for the same period a year ago.
The Company's balance sheet at Sept. 30, 2012, showed
$560.15 million in total assets, $551.51 million in total
liabilities, and $8.64 million in total shareholders' equity.
A copy of the Form 10-Q is available for free at:
http://is.gd/gzLG1A
About Community First
Columbia, Tennessee-based Community First, Inc., is a registered
bank holding company under the Bank Holding Company Act of 1956,
as amended, and became so upon the acquisition of all the voting
shares of Community First Bank & Trust on Aug. 30, 2002. An
application for the bank holding company was approved by the
Federal Reserve Bank of Atlanta (the "FRB") on Aug. 6, 2002. The
Company was incorporated under the laws of the State of Tennessee
as a Tennessee corporation on April 9, 2002.
After auditing the Company's 2011 results, Crowe Horwath LLP, in
Brentwood, Tennessee, expressed substantial doubt about Community
First's ability to continue as a going concern. The independent
auditors noted that the Company's bank subsidiary, Community First
Bank & Trust, is not in compliance with a regulatory enforcement
action issued by its primary federal regulator requiring, among
other things, a minimum Tier 1 Leverage capital ratio at the Bank
of not less than 8.5%, a minimum Tier 1 capital to risk-weighted
assets ratio of not less than 10.0% and a minimum Total capital to
risk-weighted assets ratio of not less than 12.0%. "The Bank's
Tier 1 Leverage capital ratio was 4.92%, its Tier 1 capital to
risk-weighted assets ratio was 7.22% and its Total-capital to risk
weighted assets ratio was 8.51% at Dec. 31, 2011. Continued
failure to comply with the regulatory enforcement action may
result in additional adverse regulatory action."
The Company reported a net loss of $15.0 million on $19.6 million
of net interest income (before provision for loan losses) in 2011,
compared with a net loss of $18.2 million on $21.0 million of net
interest income (before provision for loan losses) in 2010. Total
non-interest income was $3.4 million for 2011, compared with
$4.7 million for 2010.
COMMUNITY WEST: Files Form 10-Q, Posts $613,000 Net Income in Q3
----------------------------------------------------------------
Community West Bancshares filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing
net income of $613,000 on $7.51 million of total interest income
for the three months ended Sept. 30, 2012, compared with a net
loss of $2.30 million on $8.76 million of total interest income
for the same period during the prior year.
For the nine months ended Sept. 30, 2012, the Company reported net
income of $841,000 on $23.86 million of total interest income, as
compared to a net loss of $1.93 million on $27.23 million of total
interest income for the same period a year ago.
Community West's balance sheet at Sept. 30, 2012, showed
$556.79 million in total assets, $505.98 million in total
liabilities and $50.81 million in total stockholders' equity.
A copy of the Form 10-Q is available for free at:
http://is.gd/lyL2MZ
About Community West
Goleta, Calif.-based Community West Bancshares ("CWBC") was
incorporated in the State of California on Nov. 26, 1996, for the
purpose of forming a bank holding company. On Dec. 31, 1997, CWBC
acquired a 100% interest in Community West Bank, National
Association. Effective that date, shareholders of CWB became
shareholders of CWBC in a one-for-one exchange. The acquisition
was accounted at historical cost in a manner similar to pooling-
of-interests.
Community West Bancshares is a bank holding company. CWB is the
sole bank subsidiary of CWBC. CWBC provides management and
shareholder services to CWB.
Consent Agreement
According to the regulatory filing for the quarter ended June 30,
2012, the Bank entered into a consent agreement with the
Comptroller of the Currency ("OCC"), the Bank's primary banking
regulator, which requires the Bank to take certain corrective
actions to address certain deficiencies in the operations of the
Bank, as identified by the OCC (the "OCC Agreement").
"Article III of the OCC Agreement requires a capital plan and
requires that the Bank achieve and maintain a Tier 1 Leverage
Capital ratio of 9% and Total Risk-Based Capital ratio of 12% on
or before May 25, 2012. The Bank's Board of Directors has
incorporated a three-year capital plan into the Bank's strategic
plan. The Bank successfully met the minimum capital requirements
as of May 25, 2012. Notwithstanding that the Bank has achieved
the required minimum capital ratios required by the OCC Agreement,
the existence of a requirement to maintain a specific capital
level in the OCC Agreement means that the Bank may not be deemed
"well capitalized" under applicable banking regulations."
CONFORCE INTERNATIONAL: Incurs $626,000 Net Loss in Sept. 30 Qtr.
-----------------------------------------------------------------
Conforce International, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing
a net loss of US$626,915 on US$32,705 of product revenue for the
three months ended Sept. 30, 2012, compared with a net loss of
US$995,152 on US$54,801 of product revenue for the same period
during the prior year.
For the six months ended Sept. 30, 2012, the Company reported a
net loss of US$1.11 million on US$32,705 of product revenue, as
compared to a net loss of US$1.65 million on US$54,801 of product
revenue for the same period a year ago.
The Company's balance sheet at Sept. 30, 2012, showed US$3.76
million in total assets, US$2 million in total liabilities and
US$1.76 million in shareholders' equity.
A copy of the Form 10-Q is available for free at:
http://is.gd/54sauY
About Conforce International
Headquartered in Concord, Ontario, Canada, Conforce International,
Inc., has been in the shipping container business repairing,
selling or storing containers for over 25 years. The Company has
been engaged in the research and development of a polymer based
composite shipping container and highway trailer flooring product.
As a result, the Company has developed EKO-FLOR. The Company is
now outfitting its new manufacturing facility in Peru, Indiana for
the production of EKO-FLOR for the North American highway trailer
market.
BDO Canada, LLP, issued a going concern qualification on the
consolidated financial statements for the fiscal year ended
March 31, 2012. The independent auditors noted that the Company
has incurred recurring losses and its ability to continue as a
going concern will depend on its ability to generate positive cash
flows from operations or secure additional financing. The Company
said there can be no assurance that its activities will be
successful or sufficient and these conditions raise substantial
doubt about the Company's ability to continue as a going concern.
Conforce reported a net loss of US$3.81 million for the fiscal
year ended March 31, 2012, compared with a net loss of
US$2.11 million during the prior fiscal year.
COTTONWOOD CORNERS: Bankr. Court Won't Hear Jefferson-Pilot Suit
----------------------------------------------------------------
Bankruptcy Judge Robert H. Jacobvitz granted the request of
Cottonwood Corners Phase V, LLC, for the Bankruptcy Court to
abstain from hearing a lawsuit commenced by Jefferson-Pilot
Investments, Inc.
Prior to the commencement of Cottonwood's Chapter 11 case, JPI
commenced an action to foreclose its lien against Cottonwood's
interest in real property located at 10490 Coors Boulevard Bypass
Northwest, Albuquerque, New Mexico, in the Second Judicial
District Court for Bernalillo County, New Mexico. The bankruptcy
filing stayed the state court action. By an order entered on May
18, 2012, the Court modified the automatic stay to permit JPI to
pursue all its remedies against Cottonwood, including prosecution
of the State Court Action to completion.
On July 10, 2012, JPI commenced an adversary proceeding seeking a
determination that its claim is secured by (i) the Real Estate;
and (ii) Cottonwood's claims against Circuit City's bankruptcy
estate and the related proceeds. JPI also seeks a determination
of the value of its collateral and the extent of any deficiency
claim. JPI alleges Cottonwood filed a general unsecured claim
against Circuit City's bankruptcy estate for rejection damages
under 11 U.S.C. Sec. 502(b)(6) in the amount of $892,465. JPI
further alleges that the Circuit City Claim is based on unpaid
rents and that JPI has a lien against or other interest in the
Circuit City Claim, and proceeds thereof, based on an assignment
of rents.
Cottonwood contends the Bankruptcy Court must abstain from hearing
the adversary proceeding based on the doctrine of mandatory
abstention. Alternatively, Cottonwood requests abstention under
the doctrine of permissive abstention.
No discovery has taken place in the adversary proceeding, the
Court has not yet fixed any pretrial deadlines, and the Court has
made no prior rulings.
According to Judge Jacobvitz, the lien issue, although it involves
application of bankruptcy law, ultimately is an issue of state law
because it requires the court to interpret the scope of the
assignment of rents. The judge said resolution of that issue has
no connection with the commencement of the Bankruptcy Case, nor
does it relate to anything that transpired while the Bankruptcy
Case was pending. In fact, the issue existed prior to the
commencement of the Bankruptcy Case. Accordingly, the Court held
that Cottonwood's Motion for Abstention should be granted and the
adversary proceeding will be dismissed without prejudice.
The case is, JEFFERSON PILOT INVESTMENTS, INC., Plaintiff, v.
COTTONWOOD CORNERS PHASE V, LLC, Defendant, Adv. Proc. No. 12-1237
(Bankr. D. N.M.). A copy of the Bankruptcy Court's Nov. 26, 2012
Memorandum Opinion is available at http://is.gd/iWYq6jfrom
Leagle.com.
About Cottonwood
Cottonwood Corners Phase V LLC is a New Mexico limited liability
company owned 83% by RSF Land & Cattle Company LLC and 17% by SED
CAP. Its main asset is a pad within a larger shopping center in
Albuquerque, New Mexico.
Cottonwood filed for Chapter 11 bankruptcy (Bankr. D. N.M. Case
No. 11-12663) on June 8, 2011. Daniel J. Behles, Esq., at Moore,
Berkson & Gandarilla, P.C., serves as the Debtor's counsel. In
its petition, the Debtor estimated $1 million to $10 million in
assets and debts. The petition was signed by David S. Smoak,
president.
Faye B. Feinstein, Esq., and Lauren Nachinson, Esq., at Quarles &
Brady LLP, in Chicago, argue for Jefferson-Pilot Investments, Inc.
William R. Keleher, Esq., serves as JPI's local counsel.
On Oct. 23, 2012, pursuant to the terms of an order entered Aug.
14, 2012, the Bankruptcy Court dismissed the Debtor's case.
CUI GLOBAL: Incurs $463,000 Net Loss in Third Quarter
-----------------------------------------------------
CUI Global, Inc., filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
allocable to common stockholders of $462,999 on $10.71 million of
total revenue for the three months ended Sept. 30, 2012, compared
with net profit allocable to common stockholders of $424,323 on
$10.72 million of total revenue for the same period during the
prior year.
For the nine months ended Sept. 30, 2012, the Company reported a
net loss allocable to common stockholders of $2.24 million on
$29.19 million of total revenue, as compared to net profit
allocable to common stockholders of $110,089 on $30.14 million of
total revenue for the same period a year ago.
The Company's balance sheet at Sept. 30, 2012, showed
$36.61 million in total assets, $11.79 million in total
liabilities and $24.82 million in total stockholders' equity.
A copy of the Form 10-Q is available for free at:
http://is.gd/qLedb3
About CUI Global
Tualatin, Ore.-based CUI Global, Inc., formerly known as Waytronx,
Inc., is a platform company dedicated to maximizing shareholder
value through the acquisition, development and commercialization
of new, innovative technologies.
CUI Global reported a net loss allocable to common stockholders of
$48,763 in 2011, compared with a net loss allocable to common
stockholders of $7.01 million in 2010.
As reported by the TCR on April 8, 2011, Webb & Company, in
Boynton Beach, Florida, expressed substantial doubt about CUI
Global's ability to continue as a going concern. The independent
auditors noted that the Company has a net loss of $7,015,896, a
working capital deficiency of $675,936 and an accumulated deficit
of $73,596,738 at Dec. 31, 2010. Webb & Company did not include a
"going cocern qualification" in its report on the Company's 2011
financial results.
D.C. DEVELOPMENT: Wisp Resort's Exclusivity Periods Expire Dec. 9
-----------------------------------------------------------------
Bankruptcy Judge Wendelin I. Lipp signed off on a Stipulation and
Consent Order authorizing a third extension of the periods within
which D.C. Development, LLC, Recreational Industries, Inc., Wisp
Resort Development, Inc., and The Clubs at Wisp, LLC, have the
exclusive right to file a plan of reorganization and obtain
acceptances of the plan.
First United Bank and Trust, which had objected to the Debtors'
request for extension, agrees the Debtors' exclusive plan period
is extended until Nov. 9, 2012, and the solicitation period is
extended to Dec. 9. During the Extension Period, FUB, Branch
Banking and Trust Company and the Official Committee of Unsecured
Creditors will each have the right to, among other things, (i)
exchange information with third parties concerning the financial
affairs of the Debtors, (ii) negotiate with third parties with
respect to the terms of a plan of reorganization for the Debtors,
(iii) work on the terms of a plan of reorganization that would be
acceptable to them, and (iv) enter into an agreement with one or
more third parties for the proposal of a plan of reorganization
that would be acceptable to FUB.
FUB's objection was reported in the Nov. 22 edition of the
Troubled Company Reporter.
A copy of the Stipulation and Consent Order signed on Nov. 27,
2012, is available at http://is.gd/8lQDcjfrom Leagle.com.
About Wisp Resort et al.
Recreational Industries, Inc., D.C. Development, LLC, Wisp Resort
Development, Inc., and The Clubs at Wisp, LLC, operate a ski
resort and real estate development companies located in Garrett
County, Maryland generally known as Wisp Resort. The Wisp Resort
comprises approximately 2,200 acres of master planned and fully
entitled land, 32 ski trails covering 132 acres of skiable terrain
with 12 lifts and two highly-rated golf courses.
Financial problems were caused by a guarantee given to Branch
Banking & Trust Co. to secure a $29.6 million judgment the bank
obtained on a real estate development within the property.
Recreational Industries, D.C. Development, Wisp Resort Development
and The Clubs at Wisp filed for Chapter 11 bankruptcy (Bankr. D.
Md. Lead Case No. 11-30548) on Oct. 15, 2011. D.C. Development
disclosed $91,155,814 in assets and $46,141,245 in liabilities as
of the Chapter 111 filing.
The Debtors engaged Logan, Yumkas, Vidmar & Sweeney LLC as counsel
and tapped Invotex Group as financial restructuring consultant.
SSG Capital Advisors, LLC, serves as exclusive investment banker
to the Debtors. The Official Committee of Unsecured Creditors has
tapped Cole, Schotz, Meisel, Forman & Leonard, P.A. as counsel.
Joel I. Sher, Esq., at Shapiro Sher Guinot & Sandler, in
Baltimore, Maryland, represents First United Bank and Trust.
Louis J. Ebert, Esq. -- lebert@rosenbergmartin.com -- at Rosenberg
Martin Greenberg, LLP, in Baltimore, argues for Branch Banking and
Trust Company.
DCB FINANCIAL: Posts $306,000 Net Income in Third Quarter
---------------------------------------------------------
DCB Financial Corp filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing net income
of $306,000 on $4.57 million of total interest income for the
three months ended Sept. 30, 2012, compared with net income of
$276,000 on $5.59 million of total interest income for the same
period during the prior year.
For the nine months ended Sept. 30, 2012, DCB Financial recorded
net income of $748,000 on $14.34 million of total interest income,
in comparison with a net loss of $1.54 million on $17.31 million
of total interest income for the same period a year ago.
The Company's balance sheet at Sept. 30, 2012, showed $494.19
million in total assets, $458.44 million in total liabilities and
$35.75 million in total stockholders' equity.
A copy of the Form 10-Q is available for free at:
http://is.gd/qzTy5U
About DCB Financial
DCB Financial Corp. is a financial holding company headquartered
in Lewis Center, Ohio. The Corporation has one wholly-owned
subsidiary bank, The Delaware County Bank and Trust Company (the
"Bank"). The Corporation also has two additional wholly owned
subsidiaries, DCB Title and DCB Insurance Services LLC. DCB Title
provides standard real estate title services, while DCB Insurance
Services LLC provides a variety of insurance products. However,
neither nonbank subsidiary is material to the financial results of
the Corporation. The Bank has one wholly-owned subsidiary, ORECO,
which is used to process other real estate owned.
The Corporation was incorporated under the laws of the State of
Ohio in 1997, as a financial holding company under the Bank
Holding Company Act of 1956, as amended, by acquiring all
outstanding shares of the Bank. The Corporation acquired all such
shares of the Bank after an interim bank merger, consummated on
March 14, 1997. The Bank is a commercial bank, chartered under
the laws of the State of Ohio, and was organized in 1950.
The Bank provides customary retail and commercial banking services
to its customers, including checking and savings accounts, time
deposits, IRAs, safe deposit facilities, personal loans,
commercial loans, real estate mortgage loans, installment loans,
trust and other wealth management services. The Bank also
provides cash management, bond registrar and paying agent services
for commercial and public unit entities. Through its subsidiary
Datatasx, the Bank provided data processing and other bank
operational services to other financial institutions. Those
services were discontinued in September 2011, and were not a
significant part of operations or revenue.
In October 2010, the Corporation's wholly-owned bank subsidiary
entered into a Consent Agreement with the FDIC which requires that
Tier-1 and Total Risk Based Capital percentages reach 9.0% and
13.0% respectively. As of March 31, 2012, the Bank's capital
ratios, as previously noted, were not at these levels.
The Corporation and its subsidiaries meet all published regulatory
capital requirements. The ratio of total capital to risk-weighted
assets was 10.3% at March 31, 2012, while the Tier 1 risk-based
capital ratio was 6.7%.
As reported in the TCR on April 5, 2012, Plante & Moran PLLC, in
Columbus, Ohio, said DCB's bank subsidiary is not in compliance
with revised minimum regulatory capital requirements under a
formal regulatory agreement with the banking regulators. "Failure
to comply with the regulatory agreement may result in additional
regulatory enforcement actions."
DETROIT, MI: Chapter 9 Bankruptcy "Messy Option"
------------------------------------------------
Leonard N. Fleming at The Detroit News reports that financial and
legal experts warn that Detroit, Mich., which would be the biggest
city ever to file for bankruptcy protection in American history,
should steel itself for a long, costly process involving a litany
of unknowns if the state allows it to proceed.
"The way the laws are now, it's a really messy option," said
Kenneth Whipple, a retired businessman and member of the city's
Financial Advisory Board created by Gov. Rick Snyder to help
monitor Detroit's finances, according to the report. "There
aren't any cities as big as Detroit in as complicated a legal
structure that have gone that way."
According to the report, city program manager William "Kriss"
Andrews, who is overseeing the city's compliance to the consent
agreement, said city officials can manage in the short term with
more cuts and restructuring. But a projected $46 million deficit
by next May without state bond money poses the most serious
threat, Mr. Andrews said.
"We do intend to be successful working our way out of our
problems, all of our issues, outside of bankruptcy," Mr. Andrews
said, the report notes.
The report relates the the city and state have been at an impasse
over specific reforms Detroit must meet as part of a "milestone
agreement" to claim $30 million in state bond funding currently
being held in escrow. Detroit needs the funds to get through yet
another short-term cash crunch, but the Snyder administration
seems unwilling to budge.
The report also notes discussions are under way in the state
Legislature to change the law to make it easier for cities to deal
with financial issues following the defeat of Public Act 4 in
November. That law allowed the state to send in an emergency
manager who could throw out union contracts, sell off assets and
take other measures to repair the city's finances. In the wake of
P.A. 4's defeat, the state has reverted to the previous, weaker
law, Public Act 72.
The report also relates Doug Bernstein, managing partner of the
banking, bankruptcy and creditors' rights group at the Plunkett
Cooney law firm of Bloomfield Hills, warned the worst thing the
city can do is be "forced to file (for bankruptcy) in response to
a crisis."
But given the lack of progress on the consent agreement, "it's not
the end of the world," Mr. Berstein added. If Detroit were to
file bankruptcy protection, he said, at least creditors and
investors would know the city has a plan to recover. "If I were a
creditor or being the state, I'd certainly be out of patience," he
said.
"This is the stigma that filing bankruptcy you've gone under. You
haven't gone under," the report quotes Mr. Bernstein as saying.
"You're trying to reorganize your debts. Detroit's already there.
"They just haven't filed. You have to get over the stigma of
actually pulling the trigger and moving through the process."
According to the report, a presiding judge for a potential Detroit
bankrupty would be chosen by the Sixth U.S. Circuit Court of
Appeals in Cincinnati. The chief judge could assign the case to
any bankruptcy judge within the circuit, which includes Michigan,
Ohio, Kentucky and Tennessee. The report relates Mr. Bernstein
noted it is unclear who would file the official bankruptcy
petition for the city -- and author a financial restructuring plan
-- given the deep political divide between city leaders over the
consent agreement.
DETROIT, MI: Moody's Cuts Rating on GOULT Bonds to 'Caa1'
---------------------------------------------------------
Moody's Investors Service has downgraded the City of Detroit's
(MI) General Obligation Unlimited Tax (GOULT) and Certificates of
Participation (COPs) ratings to Caa1 from B3, and has also
downgraded the city's General Obligation Limited Tax (GOLT) rating
to Caa2 from Caa1. These downgrades reflect the city's ongoing
precariously narrow cash position and a weakened state oversight
framework following the repeal of Public Act 4 (PA 4). The city's
GO, COPs and GOLT ratings have been removed from review for
possible downgrade and the outlook has been revised to negative.
The negative outlook on the GO, COPS and GOLT ratings is based on
the rising possibility that the city could file for bankruptcy or
default on an obligation over the next 12 to 24 months, the
general uncertainty of state oversight as challenges to Public Act
72 (PA 72) persist following the repeal of PA 4, and the city's
ongoing inability to implement reforms necessary to regain
financial stability.
Concurrently, Moody's has downgraded the ratings for the Detroit
Water and Sewage Enterprise Revenue debt one notch to Baa3 (Senior
Lien) and Ba1 (Second Lien) as the rising risk of a city
bankruptcy filing brings ongoing uncertainty regarding the
treatment of these securities in the event of a filing. Ratings
for the Detroit Water and Sewage Enterprise Revenue Bonds have
been removed from review for possible downgrade and the outlook
has been revised to negative. The negative outlook for the water
and sewer debt is based on the increasing possibility that the
city could file for bankruptcy over the next 12 to 24 months.
Strengths
- Focused and dedicated executive management team supported by a
strong working relationship with the Governor's office
- State oversight provided by Michigan Public Act 72 and FSA
- Escrowed bond proceeds available following successful
completion of the MFA financing deal
Challenges
- Weak liquidity profile, requiring active cash flow management
techniques, including debt refinancing, to meet operating
needs
- Ongoing state oversight of the city's finances which may
result in appointment of an emergency financial manager, which
is the first step to filing for bankruptcy
- Challenges to timely implementation of restructuring
provisions outlined in the Financial Stability Agreement;
ongoing political instability
- Potential termination payment due for swap agreements issued
in conjunction with Certificates of Participation
Outlooks
The negative outlook on the GO, COPS and GOLT ratings is based on
the increasing possibility that the city could file for bankruptcy
or default on an obligation over the next 12 to 24 months, the
general uncertainty of state oversight as challenges to PA 72
persist following the repeal of PA 4, and the city's ongoing
inability to implement reforms necessary to regain financial
stability. The negative outlook for the water and sewer debt is
based on the rising possibility that the city could file for
bankruptcy on an obligation over the next 12 to 24 months.
What Could Change the GO, GOLT and COPs Ratings -- UP (or removal
of the negative outlook)
- Material operating surpluses, achieved through structurally
balanced financial results that will carry forward to future
fiscal years
- A material improvement in the city's unrestricted cash and
investment position such that the city continues to be less
dependent on cash flow borrowing
- Improved liquidity and cash management such that the city's
ability to ensure timely debt service payments are not in
question
- Removal of uncertainty surrounding state oversight legislative
authority
What Could Change the GO, GOLT and COPs Ratings -- DOWN
- Revenue challenges that continue to exceed expenditure (and
alternate revenue) solutions
- Continued operating deficits leading to heightened cash-flow
weakness
- Further increase of the city's debt leverage
- Increase in likelihood of either a bankruptcy filing or plan
to default on debt obligations
- Elimination of legislative authority for state
oversight/assistance
What Could Change the Water Rating -- UP (or removal of the
negative outlook)
- Statutory or other legal action to definitively remove the
system's assets from the estate of the city
- Stabilization or reversal of the city's trajectory towards
bankruptcy
- Removal of statutory authority for the city to file for
bankruptcy
What Could Change the Water Rating -- DOWN
- Bankruptcy filing, or increasing likelihood of a filing, by
the City of Detroit
- Weak operating performance resulting in decreased debt service
coverage levels
- Further increased debt ratio
- Weakening of the service area through economic forces or
wholesale contract changes
What Could Change the Sewage Rating -- UP (or removal of the
negative outlook)
- Statutory or other legal action to definitively remove the
system's assets from the estate of the city
- Stabilization or reversal of the city's trajectory towards
bankruptcy
- Removal of statutory authority for the city to file for
bankruptcy
What Could Change the Sewage Rating - DOWN
- Bankruptcy filing, or increasing likelihood of a filing, by
the City of Detroit
- Weak operating performance resulting in decreased debt service
coverage levels
- Further increased debt ratio
- Weakening of the service area through economic forces or
wholesale contract changes
principal methodologies used
The principal methodology used in this rating was General
Obligation Bonds Issued by U.S. Local Governments published in
October 2009.
DIAL GLOBAL: Incurs $71.2-Mil. Net Loss in Third Quarter
--------------------------------------------------------
Dial Global, Inc., filed its quarterly report on Form 10-Q,
reporting a net loss of $71.2 million on $58.2 million of revenue
for the three months ended Sept. 30, 2012, compared with a net
loss of $5.2 million on $25.0 million of revenue for the same
period last year.
For the nine months ended Sept. 30, 2012, the Company had a net
loss of $98.7 million on $181.1 million of revenue, compared with
a net loss of $17.2 million on $66.4 million of revenue for the
same period in 2011.
The Company has recorded an estimated goodwill impairment charge
of $67.2 million for the three and nine months ended Sept. 30,
2012.
The Company's balance sheet at Sept. 30, 2012, showed
$380.9 million in total assets, $385.2 million in total
liabilities, $10.5 million of Series A Preferred Stock, and a
stockholders' deficit of $14.8 million.
"Based on our current financial projections, absent additional
debt or equity capital from third parties, we anticipate that we
will breach our debt leverage and interest coverage covenants for
the quarters ended Dec. 31, 2012, and beyond. Such expected non-
compliance is a result of several factors. We believe our 2012
results were adversely impacted by, among other things, late
cancellations in ad buys (which we believe was a by-product of the
election and renewed economic uncertainty), competitive factors,
such as a greater diversity of digital ad platforms (into which ad
budgets have flowed) and increased competition from our major
competitors, and advertisers' response to controversial statements
by a certain nationally syndicated talk radio personality in
March 2012."
"... it is possible that we will not be in compliance with the
terms of the Credit Facilities in future periods, which would
result in an event of default under the Credit Facilities. If
such an event of default occurs, there can be no assurance that
the lenders under the Credit Facilities will grant us a waiver on
terms acceptable to us, or at all."
"... if an event of default under the Credit Facilities occurs and
results in an acceleration of the Credit Facilities, a material
adverse effect on us and our results of operations would likely
result or we may be forced to (1) attempt to restructure our
indebtedness, (2) cease our operations or (3) seek protection
under applicable state or federal laws, including but not limited
to, bankruptcy laws. If one or more of foregoing events were to
occur, this would raise substantial doubt about the Company's
ability to continue as a going concern."
A copy of the Form 10-Q is available at http://is.gd/2dElrn
Dial Global, Inc., headquartered in New York City, is an
independent, full-service network radio company that distributes,
produces, and/or syndicates programming and services to more than
8,500 radio stations nationwide. The Company produces and/or
distributes over 200 news, sports, music, talk and entertainment
radio programs, services and digital applications, as well as
audio content from live events, turn-key music formats (the 24/7
Radio Formats), prep services, jingles and imaging. In addition,
the Company is the largest sales representative for independent
third party providers of audio content. The Company has no
operations outside the United States, but sells to customers
outside of the United States.
DIAL GLOBAL: Voluntarily Delists Common Stock on NASDAQ
-------------------------------------------------------
Dial Global, Inc., filed a Form 25 with the U.S. Securities and
Exchange Commission to voluntarily remove from listing or
registration its common stock under the ASDAQ Stock Market LLC.
About Dial Global
Dial Global, Inc., headquartered in New York City, is an
independent, full-service network radio company that distributes,
produces, and/or syndicates programming and services to more than
8,500 radio stations nationwide including representing/selling
audio content of third-party producers. The Company produces
and/or distribute over 200 news, sports, music, talk and
entertainment radio programs, services, and digital applications,
as well as audio content from live events, turn-key music formats,
prep services, jingles and imaging. The Company has no operations
outside the United States, but sells to customers outside the
United States.
The Company's balance sheet at June 30, 2012, showed
$439.1 million in total assets, $374.1 million in total
liabilities, $10.3 million of Series A Preferred Stock, and
stockholders' equity of $54.7 million.
For the six months ended June 30, 2012, the Company had a net loss
of $27.5 million on $122.9 million of revenue, compared with a net
loss of $12.0 million on $41.4 million of revenue for the same
period in 2011.
DIGITAL ANGEL: Incurs $1.0-Mil. Net Loss in Third Quarter
---------------------------------------------------------
Digital Angel Corporation filed its quarterly report on Form 10-Q,
reporting a net loss of $1.0 million on $1.0 million of revenue
for the three months ended Sept. 30, 2012, compared with a net
loss of $4.8 million on $920,000 of revenue for the same period a
year earlier.
For the nine months ended Sept. 30, 2012, the Company had a net
loss of $5.7 million on $2.7 million of revenue, compared with a
net loss of $8.0 million on $2.8 million of revenue for the
corresponding period in 2011.
The Company's balance sheet at Sept. 30, 2012, showed $5.7 million
in total assets, $7.5 million in total liabilities, and a
stockholders' deficit of $1.8 million.
The Company said in the regulatory filing: "Our historical sources
of liquidity have included proceeds from the sale of businesses,
the sale of common stock and preferred shares and proceeds from
the issuance of debt. In addition to these sources, other sources
of liquidity may include the raising of capital through additional
private placements or public offerings of debt or equity
securities, as well as joint ventures. However, going forward
some of these sources may not be available, or if available, they
may not be on favorable terms. In addition, our factoring line
may also be amended or terminated at any time by the lender with
six months' notice. These conditions indicate that there is
substantial doubt about our ability to continue operations as a
going concern, as we may be unable to generate the funds necessary
to pay our obligations in the ordinary course of business."
A copy of the Form 10-Q is available at http://is.gd/qMOjjQ
Headquartered in New London, Connecticut, Digital Angel
Corporation in two business segments, Digital Games and Signature
Communications. Digital Games designs, develops and plans to
publish consumer applications and mobile games for tablets,
smartphones and other mobile devices. Signature Communications is
a distributor of two-way communications equipment in the U.K.
Products offered range from conventional radio systems used by the
majority of SigComm's customers, for example, for safety and
security uses and construction and manufacturing site monitoring,
to trunked radio systems for large scale users, such as local
authorities and public utilities.
DIGITAL DOMAIN: Delays Remaining Asset Auction Until December
-------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Digital Domain Media Group Inc. is slowing down the
sale of much of the remainder of its intellectual property assets.
Bids were due Nov. 26. To afford buyers more time, the initial
bid deadline was pushed back to Dec. 5. The auction will be
Dec. 7.
The report recounts that Digital Domain's primary business was
purchased for $36.7 million by a joint venture between Galloping
Horse America LLC, an affiliate of Beijing Galloping Horse Co.,
and an affiliate of Reliance Capital Ltd., based in Mumbai.
According to the report, as the result of a settlement negotiated
by the unsecured creditors' committee with secured lenders, there
will be some recovery for the committee's constituency.
After the primary sale, principal remaining assets included four
unfinished movie projects; the animation studio in Port St. Lucie,
Florida; and intellectual property for the conversion of
conventional movies into three dimensional videos.
About Digital Domain
Port St. Lucie, Florida-based Digital Domain Media Group, Inc. --
http://www.digitaldomain.com/-- engaged in the creation of
original content animation feature films, and development of
computer-generated imagery for feature films and transmedia
advertising primarily in the United States.
Digital Domain Media Group, Inc. and 13 affiliates sought Chapter
11 protection (Bankr. D. Del. Lead Case No. 12-12568) on Sept. 11,
2012, to sell its business for $15 million to Searchlight Capital
Partners LP, subject to higher and better offers.
At the auction on Sept. 21, the principal part of the business was
purchased by a joint venture between Galloping Horse America LLC,
an affiliate of Beijing Galloping Horse Co., and an affiliate of
Reliance Capital Ltd., based in Mumbai. The $36.7 million total
value of the contact includes $3.6 million to cure defaults on
contracts and $2.9 million in reimbursement of payroll costs.
Attorneys at Pachulski Stang Ziehl & Jones serve as counsel to the
Debtors. FTI Consulting, Inc.'s Michael Katzenstein is the chief
restructuring officer. Kurtzman Carson Consultants LLC is the
claims and notice agent.
An official committee of unsecured creditors appointed in the case
is represented by lawyers at Sullivan Hazeltine Allinson LLC and
Brown Rudnick LLP. MDT Executive Management Co., LLC as its
financial advisor.
The company disclosed assets of $205 million and liabilities
totaling $214 million. Debt includes $40 million on senior
secured convertible notes plus $24.7 million in interest. There
is another issue of $8 million in subordinated secured convertible
notes.
The Debtors also have sought ancillary relief in Canada, pursuant
to the Companies' Creditors Arrangement Act in the Supreme Court
of British Columbia, Vancouver Registry. Cassels Brock and
Blackwell LLP serves as Canadian counsel.
DOLPHIN DIGITAL: Delays Form 10-Q for Third Quarter
---------------------------------------------------
Dolphin Digital Media, Inc., informed the U.S. Securities and
Exchange Commission that its quarterly report on Form 10-Q for the
period ended Sept. 30, 2012, could not be filed within the
prescribed time because additional time is required by Company's
management and auditors to prepare certain financial information
to be included in that report in connection with the exercise of
certain anti-dilution rights by the Company's Chief Executive
Officer.
About Dolphin Digital
Coral Gables, Florida-based Dolphin Digital Media, Inc., is
dedicated to the twin causes of online safety for children and
high quality digital entertainment. By creating and managing
child-friendly social networking websites utilizing state-of the-
art fingerprint identification technology, Dolphin Digital Media,
Inc. has taken an industry-leading position with respect to
internet safety, as well as digital entertainment.
The Company reported a net loss of $1.23 million in 2011, compared
with a net loss of $5.63 million in 2010.
The Company's balance sheet at June 30, 2012, showed $2.55 million
in total assets, $5.92 million in total liabilities, all current,
and a $3.37 million total stockholders' deficit.
DRUMM CORP: S&P Cuts Corp. Credit Rating to 'B' on Lower Earnings
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Plano, Texas-based Drumm Corp. to 'B' from 'B+'. The
rating outlook is stable.
"We lowered our 'B+' senior secured rating on the company's term
loan and revolving credit facility to 'B', which remains at the
same level as the corporate credit rating; the recovery rating on
this debt remains '3', indicating our expectation of meaningful
(50% to 70%) recovery for lenders in case of default," said
Standard & Poor's credit analyst David Peknay.
"The ratings on Drumm are based on our assessment of the company's
business risk profile as 'weak,' reflecting significant ongoing
reimbursement risk such as the late-2011 Medicare payment cut to
nursing homes and adverse changes to the reimbursement rules for
group therapy services. We have revised our view of the financial
risk profile to 'highly leveraged' from 'aggressive,' reflecting
our lowered earnings expectation and lease-adjusted debt-to-EBITDA
that we now believe will remain above 5x. We expect Drumm's total
revenue to decline 3% in 2012 primarily because of the full-year
impact of the late 2011 Medicare rate cut. This assumption
includes lowered expectations for Drumm's therapy business. We
expect on average Medicaid rates to be flat for all the states
where Drumm operates. We also expect for the rest of 2012 and into
2013 that total patient days will be about 4% lower as an
extension of this recent trend," S&P said.
DYCOM INDUSTRIES: S&P Affirms 'BB' CCR on Quanta Acquisition
------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB' corporate
credit rating on Dycom Industries Corp. The outlook is stable.
"At the same time, we affirmed our 'BB-' issue-level ratings (with
a '5' recovery rating) on the company's 7.125% senior subordinated
notes due 2021 after a proposed $90 million add-on to the existing
$187.5 million 7.125% senior subordinated notes. The '5' recovery
rating indicates our expectation of modest (10%-30%) recovery in a
payment default scenario. The borrower under the notes is Dycom's
wholly owned subsidiary Dycom Investment Inc. All ratings are
subject to review of final documentation," S&P said.
The affirmation follows Dycom's announcement to acquire
substantially all of Quanta Services Inc.'s domestic
telecommunications infrastructure services subsidiaries. "In our
view, the acquired entity is likely to bolster the company's
exposure to rural customers, including broadband stimulus
recipients; provide increased scale; and enhance profitability and
cash flows," said Standard & Poor's credit analyst Nishit Madlani.
"The ratings reflect our assessment of Dycom's 'fair' business
risk profile, as a provider of engineering and construction
services, and its 'significant' financial risk profile,
highlighted by share repurchases and some midsize acquisitions
that the company completed in the past few years," S&P said.
"Following the debt-financed acquisition, we estimate total debt
to EBITDA (including our adjustments) to be about 2.8x at close of
transaction. We expect contributions from this acquisition and our
assumption for debt reduction to result in some improvement in
credit metrics during 2013 and into 2014. Over the next 12-18
months we estimate that leverage would remain at 2.5x or less,
with funds from operations (FFO) to debt approaching 30%. For
the ratings, we expect Dycom to maintain FFO to total debt well
above 20% with modest free cash flow generation (free operating
cash flow [FOCF] to total debt of about 10% or more)," S&P said.
"Our business risk assessment incorporates our view that Dycom
will continue to compete in large, highly fragmented, cyclical
markets. Competition in this industry is based on price, service
breadth, and geographic reach. In our view, telecommunications
companies' spending on wireless and wireline networks and
stimulus-driven broadband network development have benefitted the
company. We expect increased demand in these markets to offset the
continued weakness in residential construction. In the long term,
larger industry participants, including Dycom, are likely to
benefit from the gradual outsourcing and vendor consolidation,"
S&P said.
"After the proposed acquisition, roughly 90% of Dycom's expected
annual sales will likely continue to come from specialty
contracting services, including installation and maintenance,
which the company provides primarily to cable and
telecommunications companies. The company is likely to continue to
also provide utility-line locating services to those industries
and certain electric utilities, but at lower-than-historical
levels following a planned termination of technician-intensive
customer contracts last year. Dycom also provides electric and
other construction and maintenance services to electric
utilities," S&P said.
"Dycom's credit quality is marked by high customer concentration,
exposure to highly cyclical end markets, and somewhat limited
revenue visibility. The company's geographic reach (which is
broader than that of most of its peers in North America), fair
risk management (which includes over 80% of revenue from multiyear
master service agreements and other long-term contracts), limited
maintenance capital expenditure requirements, and long-term
relationships with stable customers partially mitigate company
weaknesses. Key company profitability measures such as EBITDA
margins and returns on permanent capital have typically been
comparable with those of peers such as MasTec Inc. (BB/Stable/--).
EBITDA margins and returns on permanent capital were roughly
11.6% and 10.8%, respectively, as of Oct. 27, 2012," S&P said.
S&P's base-case scenario assumptions for Dycom include:
-- Flat to minimal organic revenue growth over the next 12
months;
-- EBITDA margins remaining above 10% over the next two years;
-- Credit measures trending toward preacquisition levels by 2014
fiscal year-end; and
-- $40 million to $50 million annual free cash flow generation
over the next two years to be directed toward debt repayment.
"Dycom's financial risk profile is significant, and it had about
$100 million in share repurchases over the past three years and
recent midsized acquisitions. Although credit measures can
significantly weaken during downturns, as the company's declining
profitability during the telecom bust in the early 2000s
indicates, we expect Dycom's FFO to total debt to continue to
significantly exceed 20%. We also expect Dycom to scale back on
share repurchases in light of the recent debt-financed acquisition
and that it would direct any excess cash flow toward debt
repayment," S&P said.
"The stable outlook reflects our expectation that the debt-
financed acquisition will cause credit metrics to weaken year over
year over the next two quarters but that these metrics will remain
in line with our expectations for the rating. A sluggish overall
recovery in construction activity is likely to continue to weigh
on specialty contractors' operations. However, we expect Dycom to
manage discretionary spending and debt repayment from excess cash
flow, and contributions from the proposed acquisition should
improve credit measures more toward fiscal 2014," S&P said.
"We could lower the ratings if the acquisition integration risk
and growth initiatives result in sustained negative free cash
flow," S&P said.
"A higher rating is unlikely over the next 12 months. Over the
long term, however, we could raise our ratings if Dycom's
operating prospects remain positive and it successfully integrates
recent acquisitions to strengthen and diversify its business
profile further, resulting in sustained positive free cash flow.
At the same time, we would expect Dycom to demonstrate financial
policies in line with a higher rating, notably by continuing to
pursue a disciplined acquisition and share repurchase strategy,"
S&P said.
E-DEBIT GLOBAL: Commences 1st Stage of Corporate Re-Organization
----------------------------------------------------------------
E-Debit Global Corporation announced the establishment of its
exclusive sales and marketing agency of products and services
supplied through E-Debits national and international business
relationships - Group - Link Financial Ltd.
"Further to our previous announcements as outlined in my letter to
the shareholders of August 28, 2012 and at our AGM on Sept. 12,
2012 E-Debit is undertaking the first stages of its corporate
reorganization," said Douglas Mac Donald, E-Debit's President and
CEO.
"Over the past three months we have continued with consolidation
of our regional ATM estates in the Canadian marketplace through
agreements and sales within those regions with strategic sales
agreements in order to move our business focus to the re-
establishment and renewal of our traditional marketing and sales
organization which has been rebranded GROUP-LINK."
GROUP LINK will initially focus on three business segments
starting nationally in Canada. Business Segment 1 - Merchant
Service Segment - Merchant acquiring. Business Segment 2 - Card
Issuing Services providing debit, credit and private label, smart
and stored value card and debit network issuing and processing
services. Business Segment 3 - Payment Services providing
Consumer-to-Consumer, Consumer-to-Business and Business-to-
Business payment processing, transfers and settlements.
"While we continue to work strategically within the payments
business to further consolidate our National ATM network our focus
will be the establishment of the GROUP-LINK national consolidated
Marketing and Distribution Network. As the GROUP-LINK
distribution group roles out, the product and services offerings
will expand not only nationally but internationally."
About E-Debit Global
E-Debit Global Corporation (WSHE) is a financial holding company
in Canada at the forefront of debit, credit and online computer
banking. Currently, the Company has established a strong presence
in the privately owned Canadian banking sector including Automated
Banking Machines (ABM), Point of Sale Machines (POS), Online
Computer Banking (OCB) and E-Commerce Transaction security and
payment. E-Debit maintains and services a national ABM network
across Canada and is a full participating member of the Canadian
INTERAC Banking System.
Following the 2011 results, Schumacher & Associates, Inc., in
Littleton, Colorado, noted that the Company has incurred net
losses for the years ended Dec. 31, 2011, and 2010, and had a
working capital deficit and a stockholders' deficit at Dec. 31,
2011, and 2010, which raise substantial doubt about its ability to
continue as a going concern.
The Company reported a net loss of $1.09 million in 2011, compared
with a net loss of $1.15 million in 2010.
The Company's balance sheet at Sept. 30, 2012, showed
$1.82 million in total assets, $3.52 million in total liabilities,
and a $1.70 million total stockholders' deficit.
EAST COAST DIVERSIFIED: Asher Enterprises Owns 9.9% Equity Stake
----------------------------------------------------------------
In a Schedule 13G filing with the U.S. Securities and Exchange
Commission, Asher Enterprises, Inc., disclosed that, as of
Nov. 12, 2012, it beneficially owns 150,156,869 shares of common
stock of East Coast Diversified Corporation representing 9.99% of
the shares outstanding (based on the total of 1,503,071,766
outstanding shares of Common Stock). A copy of the filing is
available at http://is.gd/qoWD7e
About East Coast Diversified
East Coast Diversified Corporation, headquartered in Marietta,
Georgia, through its majority owned subsidiary, EarthSearch
Communications International, Inc., offers a portfolio of GPS
devices, RFID interrogators, integrated GPS/RFID technologies and
Tag designs.
As reported in the TCR on April 20, 2012, Drake & Klein CPAs, in
Clearwater, Fla., expressed substantial doubt about East Coast
Diversified's ability to continue as a going concern, following
the Company's results for the fiscal year ended Dec. 31, 2011.
The independent auditors noted that the Company has not generated
revenue and has not established operations.
The Company's balance sheet at June 30, 2012, showed $2.49 million
in total assets, $3.15 million in total liabilities, $1.10 million
in contingent acquisition liabilities, $709,122 in amounts payable
in common stock, $381,835 in derivative liability, and a
$2.85 million total stockholders' deficit.
EASTMAN KODAK: Accepts $830-Mil. Financing from Noteholders
-----------------------------------------------------------
Eastman Kodak Company has received and accepted an offer from the
Steering Committee of the Second Lien Noteholders Committee for
interim and exit financing totaling $830 million in loans. The
commitment is superior to - and therefore replaces - the $793
million commitment announced by the company on November 12.
This financing strengthens Kodak's position to successfully
execute its remaining reorganization objectives and emerge from
Chapter 11 in the first half of 2013.
Each of the ten institutional investors that comprise the Steering
Committee holds senior secured notes of the company. The improved
financing will be open to participation by all other holders of
the notes, including the investors that extended the November 12
commitment.
"As we continue to progress toward successful emergence, we remain
focused on doing what is best for the company's creditors and
other stakeholders, including our customers, suppliers, and
employees. We are pleased that these existing creditors have come
forward with a new proposal that offers better terms and enables
Kodak to further accelerate its momentum to emergence in the first
half of 2013," said Antonio M. Perez, Chairman and Chief Executive
Officer. "The improved financing commitment provides a longer
maturity, lower fees and pricing, and greater liquidity than our
previously announced commitment. This is a vote of confidence in
the future of our company. We are particularly pleased that the
financing allows for participation by all of our pre-petition
second lien noteholders in a manner that is cost-effective for the
company."
The financing includes new money term loans of $455 million, as
well as term loans of up to $375 million issued to holders of
senior secured notes participating in the new money loans in a
dollar-for-dollar exchange for amounts outstanding under the
company's pre-petition second lien notes.
The financing is predicated on certain conditions, including the
successful completion of the sale of Kodak's digital imaging
patent portfolio for no less than $500 million.
The commitment letter also contains provisions allowing for a
conversion of up to $630 million of the loans upon emergence into
permanent exit financing due five years after emergence, provided
Kodak meets certain conditions, including the consummation of a
Plan of Reorganization by Sept. 30, 2013, the resolution of the
company's U.K. pension obligations, and the completion of all or a
portion of the sales of Kodak's Document Imaging and Personalized
Imaging businesses.
The financing is subject to completion of definitive financing
documentation and Bankruptcy Court approval at a hearing that will
be scheduled in the near future.
Centerbridge Deal Dropped
Eastman Kodak previously announced that it entered into a
commitment letter to secure $793 million in Junior Debtor-in-
Possession Financing with Centerbridge Partners, L.P., GSO Capital
Partners LP, UBS and JPMorgan Chase & Co. to provide the company
with additional case financing and establishes the ability to
convert a substantial part of the facility into exit financing,
enhancing its liquidity and securing a major component of the
Company's exit capital structure.
The Centerbridge financing is composed of new term loans of $476
million, as well as term loans of $317 million issued in a dollar-
for-dollar exchange for amounts outstanding under the company's
pre-petition second lien notes. The financing is predicated on
certain conditions and Kodak's achievement of certain milestones,
including the successful completion of the sale of Kodak's digital
imaging patent portfolio for no less than $500 million, which the
company is confident it will achieve.
The commitment letter also contains provisions allowing for the
conversion of up to $567 million of the loans into exit financing
provided that Kodak meets certain conditions including the
consummation of a Plan of Reorganization by Sept. 30, 2013, the
resolution of all of Kodak's UK pension obligations and the
completion of all or a portion of the sales of Kodak's Document
Imaging and Personalized Imaging businesses.
Confidentiality Pact
On Oct. 15, 2012, and Oct. 16, 2012, Eastman Kodak entered into
confidentiality agreements with D.E. Shaw Laminar Portfolios,
L.L.C., Litespeed Master Fund Ltd., Bennett Management Corporation
and Archview Investment Group LP. The Second Lien Bond Holders
are holders of the Company's 9.75% senior secured notes due
March 1, 2018, and/or 10.625% secured notes due March 15, 2019.
Pursuant to the Confidentiality Agreements, the Company has agreed
to disclose certain non-public information to the Second Lien Bond
Holders. Under the terms of the Confidentiality Agreements, the
Company is further required to disclose publicly certain
information disclosed to the Second Lien Bond Holders.
Pursuant to the terms of the Confidentiality Agreements, the
Company is disclosing the Information, solely to comply with the
Company's obligations to the Second Lien Bond Holders under the
Confidentiality Agreements. The Information provided by the
Company to the Second Lien Bond Holders has been provided solely
in connection with discussions with the Second Lien Bond Holders.
The Information is qualified in all its aspects by the dates below
and does not necessarily represent the status of the relevant
occurrences as of this date. The Information is as follows:
1. As of Oct. 17, 2012, the Company was working toward
completion of a sale of certain intellectual property assets
that the Company expected would yield approximately $525
million in cash proceeds, all of which was expected to be
used to repay the Company's existing DIP facility. The
transaction was being negotiated and, if signed, would close
in 2012. The transaction would be subject to conditions
precedent and the resolution of any objections by creditors
and other parties in interest.
2. As of Oct. 17, 2012, the Company was in discussions with
four holders of second lien notes -- Centerbridge Advisors
II, LLC, GSO Capital Partners LP, J.P., Morgan Securities
LLC and UBS Securities LLC -- with respect to a financing
proposal involving $450 million of new money loans, the
proceeds of which would be used to refinance the Company's
existing DIP facility and pay case expenses, emergence costs
and operations post-financing. The financing terms would
include a roll-up of second lien notes held by the four
holders of second lien notes, as well as a right of the
Company to convert the substantial portion of the new money
loans and roll-up loans into term financing at emergence.
The right to convert the loans to term loans at emergence
would be subject to various conditions, including minimum
financial metrics for the reorganized business and the sale
of one or more of the Company's Personalized Imaging and
Digital Imaging businesses for aggregate proceeds in excess
of $700 million.
3. As of Oct. 17, 2012, the Company believed the financing was
prudent, although the Company might have other sources of
available liquidity should the financing not occur.
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.
The Retirees Committee has hired Haskell Slaughter Young &
Rediker, LLC, and Arent Fox, LLC as Co-Counsel; Zolfo Cooper, LLC,
as Bankruptcy Consultants and Financial Advisors; and the Segal
Company, as Actuarial Advisors.
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.
EC DEVELOPMENT: Incurs $459,000 Net Loss in Third Quarter
---------------------------------------------------------
EC Development, Inc., filed its quarterly report on Form 10-Q,
reporting a net loss of $458,961 on $79,017 of revenues for the
three months ended Sept. 30, 2012, compared with a net loss of
$419,357 on $153,657 of revenues for the same period last year.
For the nine months ended Sept. 30, 2012, the Company had a net
loss $1.33 million on $530,060 of revenues, compared with a net
loss of $1.36 million on $268,291 of revenues for the same period
of 2011.
The balance sheet at Sept. 30, 2012, showed $5.44 million in total
assets, $1.87 million in total liabilities, and stockholders'
equity of $3.57 million.
The Company had incurred cumulative losses of $10.50 million and
has negative working capital of $952,359 as Sept. 30, 2012.
A copy of the Form 10-Q is available at http://is.gd/SqMuyc
About EC Development
Shawnee, Oklahoma-based EC Development, Inc.'s business is the
development and marketing, sales and support of casino gaming
management software systems, which include the complete (or full)
Tahoe Casino Management Systems as well as Tahoe TITO (ticket-
in/ticket-out) system, Tahoe Table Tracking system (software
packages available on a standalone basis) and other related
software all under the brand name of "the Tahoe Suite of Software"
to companies in the gaming industry.
* * *
As reported in the TCR on April 11, 2012, Schulman Wolfson &
Abruzzo, LLP, in New York, New York, expressed substantial doubt
about EC Development's ability to continue as a going concern,
following the Company's results for the fiscal year ended Dec. 31,
2011. The independent auditors noted that the Company has
operating losses, negative working capital, no operating cash
flow and future losses are anticipated. "The Company's plan of
operations, even if successful, may not result in cash flow
sufficient to finance and expand its business which raises
substantial doubt about its ability to continue as a going
concern."
ENERGY FOCUS: Incurs $928,000 Net Loss in Third Quarter
-------------------------------------------------------
Energy Focus, Inc., filed its quarterly report on Form 10-Q,
reporting a net loss of $928,000 on $7.9 million of revenue for
the three months ended Sept. 30, 2012, compared with a net loss of
$1.5 million on $6.0 million of revenue for the same period last
year.
For the nine months ended Sept. 30, 2012, the Company had a net
loss of $3.7 million on $20.9 million of revenue, compared with a
net loss of $5.4 million on $19.7 million of revenue for the
comparable period in 2011.
The Company's balance sheet at Sept. 30, 2012, showed
$12.6 million in total assets, $9.8 million in total liabilities,
and stockholders' equity of $2.8 million.
As reported in the TCR on April 11, 2012, Plante & Moran, PLLC, in
Cleveland, Ohio, expressed substantial doubt about Energy Focus's
ability to continue as a going concern, following the Company's
results for the fiscal year ended Dec. 31, 2011. The independent
auditors noted that the Company incurred net losses of $6,055,000,
$8,517,000, and $11,015,000 during the years ended Dec. 31, 2011,
2010, and 2009.
A copy of the Form 10-Q is available at http://is.gd/5VjeAf
Solon, Ohio-based Energy Focus, Inc., and its subsidiaries engage
in the design, development, manufacturing, marketing, and
installation of energy-efficient lighting systems and solutions.
ENOVA SYSTEMS: Incurs $749,000 Net Loss in Third Quarter
--------------------------------------------------------
Enova Systems, Inc., filed its quarterly report on Form 10-Q,
reporting a net loss of $749,000 on $152,000 of revenues for the
three months ended Sept. 30, 2012, compared with a net loss of
$1.65 million on $508,000 of revenues for the same period last
year.
For the nine months ended Sept. 30, 2012, the Company had a net
loss of $4.75 million on $1.06 million of revenues, compared with
a net loss of $4.80 million on $5.98 million of revenues for the
comparable period in 2011.
According to the Company, revenues in the current year were
negatively affected by continued uncertainty over battery
performance and non-recoverable engineering costs associated with
battery development. "As a result, OEM and other customers have
delayed major all-electric vehicle marketing initiatives,
resulting in decreased demand for our systems. The decrease in
revenue for the three and nine months ended September 30, 2012
compared to the same period in 2011 was mainly due to a decrease
in deliveries to our core customer base in the United States."
The decrease in the net loss for the three and nine months ended
Sept. 30, 2012, compared to the same period in the prior year was
mainly due to the reduction in the Company's workforce in the
second quarter of 2012 which resulted in lower operating costs in
2012.
The Company's balance sheet at Sept. 30, 2012, showed
$4.24 million in total assets, $3.39 million in total liabilities,
and stockholders' equity of $848,000.
To date, the Company has incurred recurring net losses and
negative cash flows from operations. At Sept. 30, 2012, the
Company had an accumulated deficit of $155.8 million, working
capital of $2.8 million and shareholders' equity of $848,000.
A copy of the Form 10-Q is available at http://is.gd/DAaeu5
About Enova Systems
Torrance, California-based Enova Systems, Inc. (OTC QB: ENVS and
AIM: ENV and ENVS) supplies efficient, environmentally friendly
digital power components and systems products. The Company
develops, designs and produces non-invasive drive systems and
related components for electric, hybrid-electric, and fuel cell
powered vehicles in both the "new" and "retrofit" vehicle sales
market.
* * *
As reported in the TCR on April 4, 2012, PMB Helin Donovan, LLP,
in San Francisco, California, expressed substantial doubt about
Enova Systems' ability to continue as a going concern, following
their audit of the Company's financial statements for the year
ended Dec. 31, 2011. The independent auditors noted that the
Company has suffered recurring losses from operations, decline in
sales, and has a need for a substantial additional capital
investment.
ENVIRONMENTAL SOLUTIONS: Incurs $118,200 Net Loss in Third Quarter
------------------------------------------------------------------
Environmental Solutions Worldwide, Inc., filed its quarterly
report on Form 10-Q, reporting a net loss of $118,226 on
$2.8 million of revenue for the three months ended Sept. 30, 2012,
compared with a net loss of $1.3 million on $3.2 million of
revenue for the same period last year.
The Company incurred $0 and $624,809 as restructuring charges for
the three month periods ended Sept. 30, 2012 and 2011,
respectively. The restructuring costs for the three months ended
September of 2011 consisted primarily of severance, vacation
payouts, operations relocation expenses and other restructuring
related agreements.
Loss from operations for the three month period ended Sept. 30,
2011, decreased by $1.2 million, or 90.9%, to $118,226 from
$1.3 million for the three month period ended Sept. 30, 2011.
For the nine months ended Sept. 30, 2012, the Company had a net
loss of $802,494 on $7.7 million of revenue, compared with a net
loss of $8.3 million on $8.3 million of revenue for the same
period of 2011.
The Company incurred $0 and $1.1 million as restructuring charges
for the nine month periods ended Sept. 30, 2012, and 2011,
respectively.
Loss from operations for the nine month period ended Sept. 30,
2012, decreased by $3.5 million, or 73.9%, to $1.3 million from
$4.8 million for the nine month period ended Sept. 30, 2011.
Effective Feb. 3, 2012, ESW's wholly-owned non-operational
subsidiary BBL Technologies Inc., filed for bankruptcy in the
Province of Ontario, Canada. Due to the insolvency of BBL, the
redeemable Class A special shares were canceled and the Company
recorded a $453,900 gain on deconsolidation of subsidiary for the
nine months ended Sept. 30, 2012.
In the nine month period ended Sept. 30, 2011, the Company
incurred the following costs related to various financing and debt
transactions:
-- $578,739 - Change in fair value of exchange feature
liability
-- $126,850 - Interest on notes payable to related party
-- $3,506,074 - Interest accretion expense
-- $485,101 - Financing charge on embedded derivative
liability
-- ($1,336,445) - Gain on convertible derivative
-- $154,205 - Bank fees related to credit facility covenant
waivers
No costs related to financing and debt transactions were incurred
in the nine month period ended September 30, 2012.
The Company's balance sheet at Sept. 30, 2012, showed $5.5 million
in total assets, $2.2 million in total liabilities, and
stockholders' equity of $3.3 million.
The Company said in the regulatory filing, "The Company has
sustained recurring operating losses. As of Sept. 30, 2012, the
Company had an accumulated deficit of $53,556,420 and cash and
cash equivalents of $559,109. During the fiscal year 2011 there
were significant changes made to ESW's business. These changes in
operations, the relocation of the Company?s operations, and the
prevailing economic conditions all create uncertainty in the
operating results and, accordingly, there is no assurance that the
Company will be successful in generating sufficient cash flow from
operations or achieving profitability in the near future. As a
result, there is substantial doubt regarding the Company's ability
to continue as a going concern.
A copy of the Form 10-Q is available at http://is.gd/S2UEsp
About Environmental Solutions
Montgomerville, Pa.-based Environmental Solutions Worldwide,
Inc., is a publicly traded company engaged through its wholly-
owned subsidiaries ESW Canada Inc. ("ESWC"), ESW America Inc.
("ESWA"), Technology Fabricators Inc. ("TFI") and ESW Technologies
Inc. ("ESWT"), in the design, development, manufacture and sale of
emission technologies and services. ESW is currently focused on
the international medium duty and heavy duty diesel engine market
for on-road and off-road vehicles as well as the utility engine,
mining, marine, locomotive and military industries. ESW also
offers engine and after treatment emissions verification testing
and certification services.
* * *
As reported in the TCR on April 5, 2012, MSCM LLP, in Toronto,
Canada, expressed substantial doubt about Environmental Solutions'
ability to continue as a going concern, following the Company's
results for the fiscal year ended Dec. 31, 2011. The independent
auditors noted that of the Company's experience of negative cash
flows from operations and its dependency upon future financing.
EPAZZ INC: Delays Form 10-Q for Third Quarter
---------------------------------------------
Epazz, Inc., has experienced delays in completing its financial
statements for the quarter ended Sept. 30, 2012, as its auditor
has not had sufficient time to review the financial statements for
the quarter. As a result, the Company is delayed in filing its
Form 10-Q for the quarter ended Sept. 30, 2012.
About EPAZZ Inc.
Chicago, Ill.-based EPAZZ, Inc., was incorporated in the State of
Illinois on March 23, 2000, to create software to help college
students organize their college information and resources. The
idea behind the Company was that if the information and resources
provided by colleges and universities was better organized and
targeted toward each individual, the students would encounter a
personal experience with the college or university that could lead
to a lifetime relationship with the institution. This concept is
already used by business software designed to retain relationships
with clients, employees, vendors and partners.
In its report on the financial statements for 2011, Lake &
Associates CPA's LLC, in Schaumburg, Illinois, expressed
substantial doubt as to the Company's ability to continue as a
going concern. The independent auditors noted that the Company
has a significant accumulated deficit and continues to incur
losses. The Company's viability is dependent upon its ability to
obtain future financing and the success of its future operations.
The Company reported a net loss of $336,862 in 2011, compared with
net income of $120,785 in 2010.
The Company's balance sheet at June 30, 2012, showed $1.60 million
in total assets, $2.22 million in total liabilities and a $624,881
total stockholders' deficit.
Bankruptcy Warning
The Company said in its 2011 annual report that it cannot be
certain that any financing will be available on acceptable terms,
or at all, and the Company's failure to raise capital when needed
could limit its ability to continue and expand its business. The
Company intends to overcome the circumstances that impact its
ability to remain a going concern through a combination of the
commencement of additional revenues, of which there can be no
assurance, with interim cash flow deficiencies being addressed
through additional equity and debt financing. The Company's
ability to obtain additional funding for the remainder of the 2012
year and thereafter will determine its ability to continue as a
going concern. There can be no assurances that these plans for
additional financing will be successful. Failure to secure
additional financing in a timely manner to repay the Company's
obligations and supply the Company sufficient funds to continue
its business operations and on favorable terms if and when needed
in the future could have a material adverse effect on its
financial performance, results of operations and stock price and
require the Company to implement cost reduction initiatives and
curtail operations. Furthermore, additional equity financing may
be dilutive to the holders of the Company's common stock, and debt
financing, if available, may involve restrictive covenants, and
strategic relationships, if necessary to raise additional funds,
and may require that the Company relinquish valuable rights. In
the event that the Company is unable to repay its current and
long-term obligations as they come due, the Company could be
forced to curtail or abandon its business operations, or file for
bankruptcy protection; the result of which would likely be that
the Company's securities would decline in value or become
worthless.
ERA GROUP: S&P Assigns 'B' Corporate Credit Rating; Outlook Stable
------------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' corporate
credit rating to Houston-based Era Group Inc. (Era). The outlook
is stable.
"At the same time, we assigned our 'B' senior unsecured debt
rating (the same as the corporate credit rating) and '4' recovery
rating to the company's planned $200 million unsecured note
issuance due 2022. The '4' recovery rating indicates our
expectation of average (30% to 50%) recovery in the event of a
default," S&P said.
"The company is using proceeds from the offering to repay
borrowings under its revolving credit facility (which will reduce
to $200 million from $350 million, pro forma for the notes
offering). Era is concurrently pursuing a spin-off from its
parent, Seacor Holdings Inc., in which Era will become an
independent public company and existing Seacor shareholders will
receive shares of Era on a pro rata basis. We expect this spin-off
to close by year-end," S&P said.
"The ratings on Era Group Inc. reflect the company's participation
in the competitive aviation industry, limited size and scale of
operations, concentrated geographic position, and very aggressive
credit protection measures," said Standard & Poor's credit analyst
Marc D. Bromberg. "The ratings also reflect Era's high-margin
leasing business, a revenue base tied primarily to stable
production and pipeline activities, and a high percentage of fixed
contract payments. We characterize the company's business risk
profile as 'vulnerable' and the financial profile as 'highly
leveraged.' We consider liquidity 'adequate,'" S&P said.
"Era's primary business segment is mobilizing personnel to
offshore oil and gas drilling platforms via its helicopter fleet.
The company's fleet of more than 160 helicopters (based on those
either wholly owned or through joint ventures) is smaller relative
to some of its rated peers, such as PHI Inc. (roughly 220 owned
aircraft) and Bristow Group Inc. (more than 300 owned aircraft).
Moreover, Era Group's business is weighted to lower margin and
more commoditized light aircraft, which represent slightly more
than half of its fleet, than to higher margin medium and heavy
aircraft, which are characterized by greater passenger capacity
and ability to fly longer distances. Given the capital intensive
and long lead time for the medium and heavy aircraft, we expect
that Era will remain levered to smaller aircraft for the
foreseeable future," S&P said.
"In addition to its oil and gas end-markets, Era leases out
aircraft to international operators, primarily in Brazil and
Spain. The leasing business, which generated 20% of revenues and
approximately a quarter of cash flows through the first nine
months of this year, benefits Era's margins since the customer
pays labor and other operating costs. Era also participates in a
variety of other services, including air medical, firefighting,
Alaska tours, and various joint ventures that collectively
contribute roughly 15% of revenues but minimal profitability due
to their lower margins," S&P said.
"The stable outlook reflects our view that we are unlikely either
to raise or lower Era's corporate credit rating over the next 12
months. We expect that credit quality will remain stable due to
the mostly fixed payment nature of its contracts, its focus on
less volatile production activities, and its stable customer base.
However, we could lower the rating if run rate leverage is likely
to breach 5x, which we could foresee if E&P spending in the U.S.
GOM weakens or if Era is unable to land contracts for new builds.
An upgrade will depend upon Era's ability to expand its helicopter
fleet while increasing its weighting to higher margin medium and
heavy aircraft. An upgrade will also require run rate leverage
below 3.5x," S&P said.
ESP RESOURCES: Incurs $1.1-Mil. Net Loss in Third Quarter
---------------------------------------------------------
ESP Resources, Inc., filed its quarterly report on Form 10-Q,
reporting a net loss of $1.1 million on $4.5 million of sales for
the three months ended Sept. 30, 2012, compared with a net loss of
$706,109 on $3.4 million of sales for the same period last year.
For the nine months ended Sept. 30, 2012, the Company had a net
loss of $2.1 million on $14.4 million of sales, compared with a
net loss of $2.8 million on $7.5 million of sales for the same
period of 2011.
The Company's balance sheet at Sept. 30, 2012, showed
$8.7 million in total assets, $7.7 million in total liabilities,
and stockholders' equity of $1.0 million.
Since inception, the Company has incurred losses and through
Sept. 30, 2012, totaling $16.6 million.
As reported in the TCR on March 29, 2012, MaloneBailey, LLP, in
Houston, Tex., expressed substantial doubt about the Company's
ability to continue as a going concern, following the ESP's
results for the year ended Dec. 31, 2011. The independent
auditors noted that the Company has incurred losses and negative
cash from operations through Dec. 31, 2011.
A copy of the Form 10-Q is available at http://is.gd/72Wbi5
The Woodlands, Tex.-based ESP Resources, Inc., is a custom
formulator of specialty chemicals for the oil and gas industry.
EXCO RESOURCES: Moody's Affirms 'B1' CFR/PDR; Outlook Stable
------------------------------------------------------------
Moody's Investors Service affirmed EXCO Resources, Inc.'s (XCO)
Corporate Family Rating (CFR) and its Probability of Default
Rating (PDR) at B1, and affirmed its B3 senior unsecured notes
rating. The rating affirmation follows XCO's announcement that it
will drop certain of its E&P assets into a newly formed
partnership (MLP) to be jointly owned with the Harbinger Group,
Inc. (HRG, B3 negative), using drop-down proceeds for debt
reduction. The outlook is stable.
"While ongoing spending declines are now better aligned with XCO's
reduced cash flow, a function of its exposure to weak US natural
gas markets, the impact on reserves and production growth will be
negative," commented Andrew Brooks, Moody's Vice President.
"However, the proposed MLP transaction will allow XCO to
participate in future growth at this entity while raising much
needed funds for liquidity and debt reduction at the XCO level."
Ratings Affirmed:
* Corporate Family Rating, B1
* Probability of Default Rating, B1
* US$750 Million Senior Unsecured Notes due 2018, B3 (LGD5, 83%)
* Speculative Grade Liquidity Rating, SGL-3
Ratings Rationale
XCO's B1 CFR reflects its significant exposure to price weakness
in the US natural gas market, and resultant weak cash margins and
pressured liquidity countered by the efforts currently underway to
reduce debt through asset sales and spending reductions. XCO's
strong growth in production and reserves in 2010 and 2011 was
accompanied by large increases in debt outstanding, with funding
needs augmented by proceeds from the sale of non-core assets, as
well as up-front payments and drilling carry from affiliates of BG
Energy Holdings Ltd (BG Group, A2 negative), its upstream joint
upstream partner in its core Haynesville and Marcellus acreage.
Reflecting strong production growth, up 63% in 2011, relative debt
leverage has remained at modest levels compared to XCO's B1 rated
peers. However, with drilling carry effectively used up, declining
cash flow has prompted XCO to cut spending and drop its rig count,
with production levels flattening and likely to decline into 2013.
Weak natural gas prices are expected to continue to pressure XCO's
cash flow and margins, prompting the company to focus on debt
reduction and liquidity enhancement, which is supportive of the
rating.
On November 5, XCO announced that it would contribute certain of
its conventional E&P assets into a newly formed MLP whose limited
partnership (LP) interests would be owned 73.5% by HRG and 24.5%
by XCO. The 2% general partner (GP) interest will be owned equally
between HRG and XCO. In exchange for its asset contribution, XCO
will receive the LP interest and cash proceeds approximating $580
million, $225 million of which will be funded by a new proposed
$400 million revolving credit to be entered into by the MLP. XCO
will use the cash proceeds to reduce outstandings under its
revolving credit, which at September 30 totaled $1.1 billion.
Production associated with the divested assets approximates 100
Mmcfe per day (about 16.7 mBoe per day), or the equivalent of
about 20% of total third quarter production, and roughly 40% of
its proved reserves. In addition to cash distributions received
through its ownership of the LP units, holding incentive
distribution rights (IDRs) through its GP interest will allow XCO
to participate in the MLP's future growth. The transaction will
have an effective date as of July 1, 2012, and is expected to
close in early 2013. The debt reduction provided by this
transaction is an important factor in Moody's affirmation of the
rating.
XCO's SGL-3 Speculative Grade Liquidity rating reflects an
adequate liquidity position through 2013, substantially assisted
by the MLP proceeds, and spending reductions. In April 2012, the
borrowing base under XCO's secured borrowing base revolving credit
facility was reduced to $1.4 billion from $1.6 billion following
its semi-annual redetermination, and it was redetermined downward
again on October 30 to $1.3 billion. The company had $140 million
of balance sheet cash at September 30, giving it pro forma
liquidity of approximately $326 million. Following completion of
the MLP transaction, XCO's borrowing base will be reduced to $900
million under which on a pro forma basis, borrowings will be
reduced to approximately $510 million, resulting in total
liquidity improving to over $500 million. With the company
budgeting to operate within 2013 cash flow (in fact having already
achieved that balance over the first nine-months of 2012), this
liquidity cushion should prove adequate. Moreover, a possible
monetization of XCO's 50% stake in its midstream gas gathering
joint venture with BG Group could add additional asset sale
proceeds for debt reduction. XCO's credit facility matures in
April 2016. In April 2012, revolving credit lenders provided
covenant relief, increasing XCO's debt to EBITDAX covenant to 4.5x
from 4.0x. We expect that XCO will remain in compliance with its
financial covenants through 2013.
The rating outlook is stable reflecting the actions XCO is
undertaking to cut costs and reduce debt to more appropriately
align its spending with cash flow. We could downgrade the ratings
should liquidity fall below $200 million, or if debt leverage
approaches $14 per Boe of proved developed reserves or $25,000 per
Boe of average daily production. Additionally, if the MLP
transaction fails to close as proposed, the rating would likely be
downgraded. A rating upgrade in the near term is unlikely.
However, should XCO restore growth in its reserves and production
while reducing debt leverage to $8 per Boe of proved developed
reserves and $15,000 per Boe of average daily production, and
increase cash margins sufficient to sustain a 1.5x leverage full-
cycle ratio, an upgrade could be considered.
The B3 rating on its senior unsecured notes reflects both the
overall probability of default of XCO, to which Moody's assigns a
PDR of B1, and a loss given default of LGD5 (83%). XCO's senior
unsecured notes are subordinate to its $1.3 billion secured
borrowing base revolving credit's potential priority claim to the
company's assets. The size of the potential senior secured claims
relative to XCO's outstanding senior unsecured notes results in
the notes being rated two notches below the B1 CFR under Moody's
Loss Given Default Methodology.
The principal methodology used in rating EXCO was the Global
Independent Exploration and Production Industry Methodology
published in December 2011. Other methodologies used include Loss
Given Default for Speculative-Grade Non-Financial Companies in the
U.S., Canada and EMEA published in June 2009.
EXCO Resources, Inc. is an independent exploration and production
company headquartered in Dallas, Texas.
FIRST FINANCIAL: Incurs $751,000 Net Loss in Third Quarter
----------------------------------------------------------
First Financial Corporation filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing a
net loss of $751,000 on $9.82 million of total interest income for
the three months ended Sept. 30, 2012, compared with a net loss of
$7.43 million on $12.92 million of total interest income for the
same period during the prior year.
The Company reported a net loss of $5.18 million on $32.44 million
of total interest income for the nine months ended Sept. 30, 2012,
compared with a net loss of $21.41 million on $40.75 million of
total interest income for the same period a year ago.
The Company's balance sheet at Sept. 30, 2012, showed
$1.02 billion in total assets, $972.11 million in total
liabilities and $47.99 million in total stockholders' equity.
A copy of the Form 10-Q is available for free at:
http://is.gd/CbEAA2
About First Financial
Elizabethtown, Kentucky-based First Financial Service Corporation
is the parent bank holding company of First Federal Savings Bank
of Elizabethtown, which was chartered in 1923. The Bank serves
six contiguous counties encompassing central Kentucky and the
Louisville metropolitan area, through its 17 full-service banking
centers and a commercial private banking center.
As reported in the TCR on April 9, 2012, Crowe Horwath LLP, in
Louisville, Ky., audited the Company's financial statements for
2011. The independent auditors said that the Company has recently
incurred substantial losses, largely as a result of elevated
provisions for loan losses and other credit related costs. "In
addition, both the Company and its bank subsidiary, First Federal
Savings Bank, are under regulatory enforcement orders issued by
their primary regulators. First Federal Savings Bank is not in
compliance with its regulatory enforcement order which requires,
among other things, increased minimum regulatory capital ratios.
First Federal Savings Bank's continued non-compliance with its
regulatory enforcement order may result in additional adverse
regulatory action."
In its 2012 Consent Order with the FDIC and KDFI, the Bank agreed
to achieve and maintain a Tier 1 capital ratio of 9.0% and a total
risk-based capital ratio of 12.0% by June 30, 2012. "At June 30,
2012, we were not in compliance with the Tier 1 and total risk-
based capital requirements. We notified the bank regulatory
agencies that the increased capital levels would not be achieved
and anticipate that the FDIC and KDFI will reevaluate our progress
toward achieving the higher capital ratios at Sept. 30, 2012."
FIRST MARINER: Withdraws from Priam Capital Agreement
-----------------------------------------------------
1st Mariner Bancorp has withdrawn from its securities purchase
agreement with Priam Capital Fund I, LP, a New York-based
investment firm.
Mark A. Keidel, 1st Mariner's chief executive officer, said,
"Circumstances of the bank have changed considerably since we
entered into the agreement over a year and a half ago, and the
Board of Directors believed it was in the best interest of the
Company to withdraw from the agreement at this time." Either
party to the securities purchase agreement was permitted to
terminate the agreement at any time for any reason if the
transaction was not completed by Nov. 30, 2011.
Mr. Keidel continued, "Over the last nine months, 1st Mariner has
steadily improved its capital position with positive earnings.
While our capital ratios remain below the levels required by
regulatory orders, we are making progress and will continue to
work diligently to increase capital to levels required by
regulatory agreements."
"We have tremendous respect for Priam and its managing director,
Howard Feinglass, and deeply appreciate the support Priam gave the
Company over the past eighteen months," Mr. Keidel concluded.
1st Mariner entered into the securities purchase agreement with
Priam on April 19, 2011. Under the agreement, Priam agreed to
invest, subject to certain conditions, approximately $36.4 million
of capital in the Company. Among other conditions, the closing of
Priam's investment was contingent on 1st Mariner raising an
additional $123.6 million from other investors.
About First Mariner
Headquartered in Baltimore, Maryland, First Mariner Bancorp
-- http://www.1stmarinerbancorp.com/-- is a bank holding company
whose business is conducted primarily through its wholly owned
operating subsidiary, First Mariner Bank, which is engaged in the
general general commercial banking business. First Mariner was
established in 1995 and has total assets in excess of $1.3 billion
as of Dec. 31, 2010.
"Quantitative measures established by regulation to ensure capital
adequacy require the [First Mariner] Bank to maintain minimum
amounts and ratios of total and Tier I capital to risk-weighted
assets, and of Tier I capital to average quarterly assets," the
Company said in the filing. "As of March 31, 2011, the Bank was
"under-capitalized" under the regulatory framework for prompt
corrective action."
For the year ended Dec. 31, 2011, Stegman & Company, in Baltimore,
Maryland, expressed substantial doubt about the Company's ability
to continue as a going concern. The independent auditors noted
that the Company continued to incur significant net losses in
2011, primarily from loan losses and costs associated with real
estate acquired through foreclosure. The Company has insufficient
capital per regulatory guidelines and has failed to reach capital
levels required in the Cease and Desist Order issued by the
Federal Deposit Insurance Corporation in September 2009.
The Company's balance sheet at Sept. 30, 2012, showed
$1.29 billion in total assets, $1.30 billion in total liabilities,
and a $8.76 million total stockholders' deficit.
Bankruptcy Warning
As of Dec. 31, 2011, the Bank's and the Company's capital levels
were not sufficient to achieve compliance with the higher capital
requirements the Company was required to have met by June 30,
2010. The failure to meet and maintain these capital requirements
could result in further action by the Company's regulators.
In the September Order, the FDIC and the Commissioner directed the
Bank to raise its leverage and total risk-based capital ratios to
6.5% and 10%, respectively, by March 31, 2010 and to 7.5% and 11%,
respectively, by June 30, 2010. The Company did not meet these
requirements. The Company has been in regular communication with
the staffs of the FDIC and the Commissioner regarding efforts to
satisfy the higher capital requirements.
First Mariner currently does not have any material amounts of
capital available to invest in the Bank and any further increases
to the Company's allowance for loan losses and operating losses
would negatively impact the Company's capital levels and make it
more difficult to achieve the capital levels directed by the FDIC
and the Commissioner.
Because the Company has not met all of the capital requirements
set forth in the September Order within the prescribed timeframes,
the FDIC and the Commissioner could take additional enforcement
action against the Company, including the imposition of monetary
penalties, as well as further operating restrictions. The FDIC or
the Commissioner could direct us to seek a merger partner or
possibly place the Bank in receivership. If the Bank is placed
into receivership, the Company would cease operations and
liquidate or seek bankruptcy protection. If the Company were to
liquidate or seek bankruptcy protection, First Mariner does not
believe that there would be assets available to holders of the
capital stock of the Company.
FOREST CITY: S&P Raises Senior Unsecured Debt Rating to 'B'
-----------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B+' corporate
credit rating and stable outlook on Forest City Enterprises Inc.
"At the same time, we revised our recovery rating on the rated
senior unsecured notes to '5' from '6', indicating that lenders
can expect a modest recovery (10%-30%) in the event of a payment
default. This improvement resulted in the upgrade of the company's
senior unsecured notes to 'B' from 'B-'. We also affirmed our
'CCC+' rating on the company's convertible preferred stock," S&P
said.
"We revised our recovery rating on Forest City's senior unsecured
debt to '5' from '6', which prompted us to upgrade Forest City's
senior unsecured notes to 'B' from 'B-', said credit analyst
Elizabeth Campbell. "Our ratings on Forest City Enterprises Inc.
reflect a 'highly leveraged' financial risk profile and a 'fair'
business risk profile."
"Portfolio performance trends have been strengthening, and we
expect same-property net operating income to remain positive
through 2013. Forest City has also modestly reduced leverage,
leading to improved, albeit still slim, fixed-charge coverage. We
believe that coverage measures will continue to improve as
development projects stabilize and begin to contribute to cash
flow over the next one-to-two years," S&P said.
GENERAL MOTORS: Fitch Puts BB Issuer Default Rating on Watch Pos.
-----------------------------------------------------------------
Fitch Ratings has placed General Motors Financial Company, Inc.'s
(GMF) 'BB' long-term Issuer Default Rating (IDR) on Rating Watch
Positive, following the company's announcement on Nov. 21, 2012,
that it has entered into an agreement with Ally Financial Inc.
(Ally) to acquire Ally's international operations (IO) in Latin
American, Europe, and China for $4.2 billion in order to provide
an alternative source of financing to General Motors Company's
(GM) consumers and dealers on a global basis.
The Rating Watch Positive reflects Fitch's view that, following
the successful close of the Ally IO acquisition, GMF will be a
core subsidiary to its parent, GM, as defined in Fitch's criteria
'Rating FI Subsidiaries and Holding Companies,' dated Aug. 10,
2012. As a result of being viewed as core subsidiary, Fitch would
expect to resolve the Rating Watch and align GMF's ratings with
those of GM (LT IDR: 'BB+', Rating Outlook Stable), subject to
regulatory approval and anticipated transaction closing, which is
expected to be in stages through mid-2013.
The acquisition will increase GM sales coverage, as defined as the
percentage of GM unit sales in markets where GMF has presence
compared to total GM unit sales, to approximately 80% compared to
the current 30%.
Fitch believes the acquisition will be funded through cash on the
balance sheet, drawings on the new inter-company bank facility and
unsecured debt issuances. Additionally, GM is expected to inject
approximately $2 billion of cash into GMF to increase its equity
and maintain an appropriate pro forma capital structure. The
acquisition is expected to double GMF's assets to approximately
$33 billion while its liabilities, including consolidated debt,
will increase to approximately $27 billion.
Historically, GMF has had an articulated long-term leverage
target, as defined as earning assets to tangible equity, of 6.0
times (x) - 8.0x. While the company has been operating below its
target, Fitch believes leverage will be within the articulated
range following the Ally purchase.
Rating Drivers and Sensitivities
Resolution of the Rating Watch Positive will be evaluated in the
context of the success of the closing and integration of the Ally
IO assets (expected to close in stages through mid-2013) and GM's
$2 billion cash injection into GMF. The ratings could be upgraded
and equalized to those of its parent, based on Fitch's belief that
the acquisition makes GMF a core subsidiary to GM. The
equalization of the ratings would be supported by GM assets
accounting for a larger portion of GMF's total portfolio, an
increase in GM-related earnings at GMF, the $2 billion cash
injection from the parent, and GMF's ability to borrow on the new
GM bank facility.
Conversely, the ratings could be affirmed in the event GMF is
unable to successfully close and integrate the Ally assets, the
parent does not provide additional equity to maintain adequate
capitalization at GMF, and/or GMF is unable to tap the GM revolver
for additional liquidity.
Fitch has placed the following ratings on Rating Watch Positive:
General Motors Financial Company
-- Long-term IDR of 'BB';
-- Senior Unsecured of 'BB'.
GEORGES MARCIANO: Dist. Court Rejects Guess? Co-Founder's Appeal
----------------------------------------------------------------
California District Judge A. Howard Matz affirmed a bankruptcy
court order denying Hill, Farrer & Burrill, LLP's request for
retroactive approval of its representation of Georges Marciano
when he was a Chapter 11 debtor-in-possession; and a subsequent
order ordering HFB to disgorge the compensation it received for
its representation of Mr. Marciano during that period. Mr.
Marciano and HFB took an appeal from the bankruptcy court orders.
Judg Matz held that bankruptcy law charges counsel for a debtor-
in-possession with a fiduciary duty to the estate. By its own
admission, HFB violated this duty while it was representing
Marciano as the debtor-in-possession. For this reason, the judge
said, the bankruptcy court did not abuse its discretion in denying
HFB's retroactive application and ordering it to disgorge its
fees.
The case before the District Court is, Case No. 02353-AHM*,
Consolidated with No. CV12-02890-AHM, No. CV12-05042-AHM, Case No.
1:11-BK-10426-VK (C.D. Calif.). A copy of the District Court's
Nov. 26, 2012 ruling is available at http://is.gd/tqpaDffrom
Leagle.com.
About Georges Marciano
Georges Marciano is the co-founder of the apparel company Guess?,
Inc. and an investor in various companies and real estate
ventures. Three of the five former employees of Mr. Marciano,
who won a $370 million libel judgment against him in July 2009,
filed an involuntary chapter 11 bankruptcy petition (Bankr. C.D.
Calif. Case No. 09-39630) against the Guess? Inc. co-founder on
Oct. 27 2009. Mr. Marciano challenged the involuntary petition
for 14 months, and Judge Victoria S. Kaufman entered an order for
relief against Mr. Marciano on Dec. 29, 2010. David K. Gottlieb
has been appointed as bankruptcy trustee in the case.
GREAT BASIN GOLD: Incurs C$89.6-Mil. Net Loss in Third Quarter
--------------------------------------------------------------
Great Basin Gold Ltd. filed with the United States Securities and
Exchange Commission on Nov. 14, 2012, its consolidated financial
statements for the period ended Sept. 30, 2012.
The Company reported a net loss of C$89.6 million on
C$38.4 million of revenue for the three months ended Sept. 30,
2012, compared with a net loss of C$34.0 million on C$46.7 million
of revenue for the same period last year.
For the nine months ended Sept. 30, 2012, the Company had a net
loss of C$129.4 million on C$104.2 million of revenue, compared
with a net loss of C$55.4 million on C$129.8 million of revenue
for the same period of 2011.
The Company's balance sheet at Sept. 30, 2012, showed
C$827.3 million in total assets, C$463.8 million in total
liabilities, and stockholders' equity of $363.5 million.
"The working capital deficit at Sept. 30, 2012, as well as the
insolvency filings in South Africa and Canada, indicates an
uncertainty which may cast substantial doubt about the Company's
ability to continue as a going concern."
A copy of the consolidated financial statements for the three and
nine months ended Sept. 30, 2012, is available at:
http://is.gd/NHNiUu
A copy of the Management Discussion and Analysis for the period
ended Sept. 30, 2012, is available at http://is.gd/KdgqRi
About Great Basin Gold
Great Basin Gold Ltd. is incorporated under the laws of the
Province of British Columbia and its registered address is 1108-
1030 West Georgia Street, in Vancouver BC, Canada. Great Basin
Gold Ltd., including its subsidiaries is a mineral exploration and
development company with two operating assets, both in the
production build-up phase, the Hollister Project on the Carlin
Trend in Nevada, U.S.A, and the Burnstone Project in the
Witwatersrand Goldfields in South Africa. Over and above the
exploration being conducted at the above mentioned properties,
greenfields exploration is being undertaken in Tanzania and
Mozambique.
On Sept. 18, 2012, Great Basin Gold Ltd. announced that its
principal South African subsidiary, Southgold Exploration (Pty)
Ltd., owner of the Burnstone mine, filed for protection under the
South African business rescue ("BR") procedures.
On Sept. 19, 2012, the Company made a Companies Creditors
Arrangement Act (Vancouver Registry 126583) following the business
rescue proceedings for the Burnstone mine that commenced Sept. 14,
2012, as a result of the termination of all development and
production activities at the mine on Sept. 11, 2012. CCAA is a
Canadian insolvency statute which will allow the Company a period
of time to seek buyers and partners for its two gold mining
projects and/or corporate level financiers in an effort to
restructure the Company.
Operating and development activities were suspended at the
Burnstone mine in early September 2012 which created a default
under the loan agreement. Term loan 1 will be restructured or
settled under the Business rescue proceedings of the South African
subsidiary owing title to the Burnstone mine as well as the CCAA
filing by the Company. As a result of the default the outstanding
amounts have been disclosed as current.
GREAT CHINA INT'L: Incurs $423,000 Net Loss in 3rd Quarter
----------------------------------------------------------
Great China International Holdings, Inc., filed its quarterly
report on Form 10-Q, reporting a net loss of $423,263 on
$2.0 million of revenues for the three months ended Sept. 30,
2012, compared with a net loss of $92,662 on $1.8 million of
revenues for the comparable period last year.
For the nine months ended Sept. 30, 2012, the Company had a net
loss of $1.7 million on $5.8 million of revenues, compared with a
net loss of $1.4 million on $5.4 million of revenues for the same
period of 2011.
The Company earned $828,038 income from disposal of parking lots
in the first nine months of 2011, but there is was no such
disposal of assets in the first nine months of 2012.
The Company's balance sheet at Sept. 30, 2012, showed
$59.6 million in total assets, $34.1 million in total
liabilities, and stockholders' equity of $25.5 million.
The Company has a working capital deficit of $12.1 million and
$27.6 million as of Sept. 30, 2012, and Dec. 31, 2011,
respectively.
A copy of the Form 10-Q is available at http://is.gd/aaBlue
Shenyang, China-based Great China International, through its
various subsidiaries, is or has been engaged in commercial and
residential real estate leasing, management, consulting,
investment, development and sales. The Company conducts all its
operation in the People's Republic of China through its direct and
indirect wholly owned subsidiaries; Shenyang Maryland
International Industry Company Limited and Silverstrand
International Holdings Company Limited.
* * *
Kabani & Company, Inc., in Los Angeles, California, expressed
substantial doubt about Great China International's ability to
continue as a going concern, following the Company's results for
the fiscal year ended Dec. 31, 2011. The independent auditors
noted that the Company has a working capital deficit of
$27,643,655 as of Dec. 31, 2011. "In addition, the Company has
negative cash flow for each of the two years in the period ended
Dec. 31, 2011, of $3,289,571 and $349,200 respectively."
GROWLIFE INC: Reports $28,700 Net Income in Third Quarter
---------------------------------------------------------
Growlife, Inc., formerly Phototron Holdings, Inc., filed its
quarterly report on Form 10-Q, reporting net income of $28,699 on
$475,870 of revenue for the three months ended Sept. 30, 2012,
compared with net income of $6,114 on $215,654 of revenue for the
corresponding period last year.
"During the three months ended Sept. 30, 2012, our general and
administrative expenses were $534,176 compared to $108,419 during
the three months ended Sept. 30, 2011, an increase of $425,757.
During 2011, we were a privately held company and did not incur
any of the expense of being a public company. Those expenses
include stock compensation, professional fees for legal,
accounting, consultants and directors and officers insurance.
Additionally, we hired most of Phototron's general, administrative
and sales staff; thereby incurring higher wage expense during the
current quarter. We expect that our general and administrative
expenses will remain at, or near, the current level for the
foreseeable future.
During the quarter ended Sept. 30, 2012, the Company incurred
$403,195 of other income (expenses), including $473,152 change in
derivative liability and ($69,957) of interest expense related to
the amortization of discount on the Company's subordinated notes
payable. During the quarter ended Sept. 30, 2011, the Company
incurred interest expense of ($7,584).
For the nine months ended Sept. 30, 2012, the Company had a net
loss of $849,707 on $776,125 of revenue, compared with a net loss
of $95,545 on $732,896 of revenue for the same period of 2011.
"During the nine months ended Sept. 30, 2012, our general and
administrative expenses were $1,068,510 compared to $344,360
during the nine months ended Sept. 30, 2011, an increase of
$724,150."
During the nine months ended Sept. 30, 2012, the Company
recognized a $97,153 gain resulting from a change in derivatives
and $138,189 of interest expense related to the amortization of
discount on the Company's subordinated notes payable. During the
nine months ended Sept. 30, 2011, the Company incurred interest
expense of $15,297.
The Company's balance sheet at Sept. 30, 2012, showed $1.9 million
in total assets, $1.7 million in total liabilities,a nd
stockholders' equity of $163,029.
The Company has experienced recurring operating losses and
negative operating cash flows since inception, and has financed
its working capital requirements during this period primarily
through the recurring issuance of notes payable and advances from
a related party. "These raise substantial doubt of the Company's
continuation as a going concern."
A copy of the Form 10-Q is available at http://is.gd/6xDgWY
* * *
Gardena, Calif.-based Growlife, Inc., designs and manufactures
indoor mini-greenhouses capable of growing almost any herb,
vegetable, flower, fruit or terrestrial plant better, stronger and
faster than traditional farming methods. Phototron Holdings Inc.
vWeinberg & Company, P.A., in Los Angeles, Calif., expressed
substantial doubt about Phototron Holdings Inc., now known as
Growlife, Inc., following their audit of the Company's financial
statements for the fiscal year ended Dec. 31, 2011. The
independent auditors noted that the Company has experienced
recurring operating losses and negative operating cash flows since
inception.
GUIDED THERAPEUTICS: Incurs $986,000 Net Loss in Third Quarter
--------------------------------------------------------------
Guided Therapeutics, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing
a net loss attributable to common stockholders of $986,000 on
$693,000 of contract and grant revenue for the three months ended
Sept. 30, 2012, compared with a net loss attributable to common
stockholders of $2.66 million on $1.02 million of contract and
grant revenue for the same period during the prior year.
For the nine months ended Sept. 30, 2012, the Company reported a
net loss attributable to common stockholders of $3.16 million on
$2.32 million of contract and grant revenue, as compared to a net
loss attributable to common stockholders of $3.88 million on
$2.70 million of contract and grant revenue for the same period a
year ago.
The Company reported a net loss of $6.64 million in 2011, compared
with a net loss of $2.84 million in 2010.
The Company's balance sheet at Sept. 30, 2012, showed
$4.77 million in total assets, $2.64 million in total liabilities
and $2.12 million in total stockholders' equity.
In its report on the Company's 2011 Form 10-K, UHY LLP, in
Sterling Heights, Michigan, noted that the Company's recurring
losses from operations and accumulated deficit raise substantial
doubt about its ability to continue as a going concern.
Bankruptcy Warning
"At September 30, 2012, the Company had working capital of
approximately $607,000 and it had stockholders' equity of
approximately $2.0 million, primarily due to the recurring losses,
offset in part by the recognition of the warrants exchanged as
part of the Warrant Exchange Program. As of September 30, 2012,
the Company was past due on payments due under its notes payable
in the amount of approximately $406,000.
"The Company's capital-raising efforts are ongoing. If sufficient
capital cannot be raised during the first quarter of 2013, the
Company has plans to curtail operations by reducing discretionary
spending and staffing levels, and attempting to operate by only
pursuing activities for which it has external financial support,
such as under its development agreement with Konica Minolta and
additional NCI or other grant funding. However, there can be no
assurance that such external financial support will be sufficient
to maintain even limited operations or that the Company will be
able to raise additional funds on acceptable terms, or at all. In
such a case, the Company might be required to enter into
unfavorable agreements or, if that is not possible, be unable to
continue operations, and to the extent practicable, liquidate
and/or file for bankruptcy protection."
A copy of the Form 10-Q is available for free at:
http://is.gd/0wQfAD
About Guided Therapeutics
Guided Therapeutics, Inc. (OTC BB and OTC QB: GTHP)
-- http://www.guidedinc.com/-- is developing a rapid and painless
test for the early detection of disease that leads to cervical
cancer. The technology is designed to provide an objective result
at the point of care, thereby improving the management of cervical
disease. Unlike Pap and HPV tests, the device does not require a
painful tissue sample and results are known immediately. GT has
also entered into a partnership with Konica Minolta Opto to
develop a non-invasive test for Barrett's Esophagus using the
LightTouch technology platform.
GUITAR CENTER: Incurs $25.6 Million Net Loss in Third Quarter
-------------------------------------------------------------
Guitar Center Holdings, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing
a net loss of $25.65 million on $496.23 million of net sales for
the three months ended Sept. 30, 2012, compared with a net loss of
$27.38 million on $488.12 million of net sales for the same period
during the prior year.
The Company reported a net loss of $70.63 million on $1.51 billion
of net sales for the nine months ended Sept. 30, 2012, compared
with a net loss of $64.78 million on $1.46 billion of net sales
for the same period a year ago.
The Company reported a net loss of $236.94 million in 2011, a net
loss of $56.37 million in 2010, and a net loss of $189.85 million
in 2009.
The Company's balance sheet at Sept. 30, 2012, showed $1.84
billion in total assets, $1.99 billion in total liabilities and a
$147.86 million total stockholders' deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/Qup61z
Director Quits
Warren Valdmanis resigned from the board of directors of each of
Guitar Center, Inc., and Guitar Center Holdings, Inc., effective
as of Nov. 7, 2012. Mr. Valdmanis's resignation was not due to
any disagreement with the companies.
About Guitar Center
Guitar Center, Inc., headquartered in Westlake Village, Calif., is
the largest musical instrument retailer with 312 stores and a
direct response segment, which operates its Web sites. It
operates three distinct musical retail business - Guitar Center
(about 70% of revenue), Music & Arts (about 7% of revenue), and
Musician's Friend (its direct response subsidiary with 24% of
revenue). Total revenue is about $2 billion.
Bankruptcy Warning
The Company said in its annual report for the year ended
Dec. 31, 2011, that its ability to make scheduled payments or to
refinance its debt obligations depends on the Company and
Holdings' financial and operating performance, which is subject to
prevailing economic and competitive conditions and to certain
financial, business and other factors beyond its control. The
Company cannot provide any assurance that it will maintain a level
of cash flows from operating activities sufficient to permit it to
pay the principal, premium, if any, and interest on its
indebtedness.
If the Company cannot make scheduled payments on its debt, the
Company will be in default and, as a result:
* its debt holders could declare all outstanding principal and
interest to be due and payable;
* the lenders under the Company's senior secured credit
facilities could terminate their commitments to lend the
Company money and foreclose against the assets securing their
borrowings; and
* the Company could be forced into bankruptcy or liquidation.
* * *
As reported in the Troubled Company Reporter on Feb. 28, 2011,
Moody's Investors Service affirmed Guitar Center, Inc.'s Caa2
Corporate Family Rating and the $622 million existing term loan
rating of Caa1 due October 2014. The Probability of Default
Rating was revised to Caa2/LD from Caa2 while the Speculative
Grade Liquidity assessment was changed to SGL-2 from SGL-3. The
rating outlook remains stable.
The Caa2/LD Probability of Default rating reflects Moody's view
that the extended deferral of interest on the Holdco notes
constitutes a distressed exchange under Moody's definition and
also anticipates that additional exchanges of this nature are
possible over the near term. The Limited Default designation was
prompted by the company's executed amendment of the HoldCo notes,
which allows for a deferral of 50% of the interest payments for 18
months. Moody's views this as a distressed exchange that provides
default avoidance. This LD designation applies to the proposed
follow-on amendment to defer the HoldCo note interest payments by
another six months. Subsequent to the actions, Moody's will
remove the LD designation and the PDR will be Caa2 going forward.
HAMPTON ROADS: Taps M. Sykes as Head of Real Estate Lending Unit
----------------------------------------------------------------
Hampton Roads Bankshares, Inc., the holding company for The Bank
of Hampton Roads and Shore Bank, announced that Michael J. Sykes
has been appointed to head BHR's newly-formed Commercial Real
Estate Lending Unit as a Senior Vice President, reporting to
Thomas Mears, President of Commercial Banking. Previously, Mr.
Sykes reported to Edward Putney, Jr., BHR's Director of Real
Estate Lending. Mr. Putney will continue in this role with a
specific focus on construction and development lending.
Douglas J. Glenn, president and chief executive officer of the
Company and chief executive officer of BHR, said, "Mike has an
unparalleled reputation as a commercial real estate lender
throughout the Mid-Atlantic region and his depth of understanding
and experience are uncommon for a community bank. He has helped
us build relationships with some very sophisticated borrowers,
which will greatly benefit our Company over the long term. Based
on this success, it makes sense for us to create a Commercial Real
Estate Lending Unit focused on income property lending under his
leadership and staff it with talented bankers."
Mr. Sykes joined BHR in 2009. Prior to joining the Real Estate
Lending unit, he served as Senior Vice President and Team Leader
in the Special Assets unit. Previously, he served for over three
decades in real estate finance positions with Sovran Bank, First
American Bank of Georgia and Bank of America, primarily in the
Richmond and Norfolk markets. Mr. Sykes is a director of the
Hampton Roads Association for Commercial Real Estate, a member of
the Advisory Board of the Center for Real Estate and Economic
Development at Old Dominion University, and has also been active
in the Urban Land Institute - Hampton Roads Chapter and the
Greater Richmond Association for Commercial Real Estate.
About Hampton Roads Bankshares
Hampton Roads Bankshares, Inc. (NASDAQ: HMPR) --
http://www.hamptonroadsbanksharesinc.com/-- is a bank holding
company that was formed in 2001 and is headquartered in Norfolk,
Virginia. The Company's primary subsidiaries are Bank of Hampton
Roads, which opened for business in 1987, and Shore Bank, which
opened in 1961. Currently, Bank of Hampton Roads operates twenty-
eight banking offices in the Hampton Roads region of southeastern
Virginia and twenty-four offices in Virginia and North Carolina
doing business as Gateway Bank & Trust Co. Shore Bank serves the
Eastern Shore of Maryland and Virginia through eight banking
offices and 15 ATMs.
Effective June 17, 2010, the Company and its banking subsidiary,
Bank of Hampton Roads ("BOHR"), entered into a written agreement
with the Federal Reserve Bank of Richmond and the Bureau of
Financial Institutions of the Virginia State Corporation
Commission. The Company's other banking subsidiary, Shore Bank,
is not a party to the Written Agreement.
Under the terms of the Written Agreement, among other things, BOHR
agreed to develop and submit for approval plans to (a) strengthen
board oversight of management and BOHR's operations, (b)
strengthen credit risk management policies, (c) improve BOHR's
position with respect to loans, relationships, or other assets in
excess of $2.5 million which are now, or may in the future become,
past due more than 90 days, are on BOHR's problem loan list, or
adversely classified in any report of examination of BOHR, (d)
review and revise, as appropriate, current policy and maintain
sound processes for determining, documenting, and recording an
adequate allowance for loan and lease losses, (e) improve
management of BOHR's liquidity position and funds management
policies, (f) provide contingency planning that accounts for
adverse scenarios and identifies and quantifies available sources
of liquidity for each scenario, (g) reduce the Bank's reliance on
brokered deposits, and (h) improve BOHR's earnings and overall
condition.
The Company reported a net loss of $98 million in 2011, compared
with a net loss of $210.35 million in 2010.
The Company's balance sheet at Sept. 30, 2012, showed
$2.07 billion in total assets, $1.88 billion in total liabilities,
and $187.96 million in total shareholders' equity.
HARRISBURG, PA: Bar on Bankruptcy Filing Expires Today
------------------------------------------------------
Mark Shade at Reuters reports that Pennsylvania's capital city
Harrisburg, neck-deep in more than $340 million debt, is on the
verge of getting a powerful negotiating tool with creditors: the
threat of bankruptcy.
The report relates a state ban that prevented Harrisburg from
filing for municipal bankruptcy protection is set to expire after
Nov. 30. A year has passed since Harrisburg first tried filing
for bankruptcy in October 2011. The city is now deeper in debt
and there is no guarantee that it will not seek court protection
once again.
"They're still having a problem bridging the revenues and the
liabilities they have to pay," Reuters quotes Emanuel Grillo,
chair of the financial restructuring group at the law firm Goodwin
Procter, as saying. "They haven't gotten bondholders or other
constituencies to take a big enough hit," he said. "Waving the
bankruptcy option out there is really an important tool, even if
[the state-appointed receiver] never uses it."
According to Reuters, when Harrisburg first attempted bankruptcy
protection, the cash-starved city became a poster child for U.S.
cities still trying to recover from years of lower, recession-hit
property tax revenues while faced with growing pension
obligations, healthcare costs, salaries and other expenses.
The report notes Harrisburg, like some other cities, took out
significant debt to finance a project -- an incinerator -- that
later failed to make enough money, bringing it to the verge of
financial collapse. Since last October, Harrisburg's debt has
swelled from $300 million to $340 million.
The report adds the receiver, William Lynch, had to skip a $3.4
million general obligation debt service payment in September in
order to pay city employees. Harrisburg still faces a projected
cumulative deficit of $14.8 million by the end of fiscal 2012.
The report relates Harrisburg is closer to selling some assets
such as its trash incinerator and public parking system to raise
money as a key component of its recovery plan. Still, any
potential agreement with buyers must still be approved by the
state court overseeing the plan.
Bankruptcy "is an option that needs to be on the table," said Cory
Angell, a spokesman for Mr. Lynch, who was unavailable for
comment, according to the report.
Reuters recounts that a federal judge blocked the city council's
Chapter 9 petition after state lawmakers banned it. Urged on by
veteran Republican state lawmaker Jeff Piccola, the Pennsylvania
legislature later extended the ban. Mr. Piccola represented
Dauphin County, which guaranteed some of Harrisburg's incinerator
debt and is now one of the city's creditors.
According to Reuters, with Mr. Piccola retiring and a Democrat
taking his place, many city and state officials believe state
lawmakers won't extend the ban a second time -- especially since
state lawmakers are not scheduled to consider any new legislation
until January.
HOSTESS BRANDS: Has Final Approval of Wind-Down Plan, Bonuses
-------------------------------------------------------------
Dow Jones Newswires' Rachel Feintzeig reports that Judge Robert D.
Drain on Thursday gave Hostess Brands Inc. final approval to shut
down its 85-year-old baking business and start selling off the
pieces with up to $1.8 million earmarked as bonuses for managers
overseeing the liquidation.
According to the report, Judge Drain cautioned those in his
courtroom not to view the bonuses, which require the managers to
hit certain milestones and goals, as a matter of management
"feathering its nest."
"That is clearly not the case," Judge Drain said. "This is
difficult work that is well compensated, not as a handout," as
Congress intended when crafting laws to give companies in
bankruptcy the greatest chance of success, he said.
According to the report, Joshua Scherer, an investment banker at
Perella Weinberg Partners, said he was surprised to find some
interest in buying a majority of the company's assets and likened
the flood of inquiries to drinking from a fire hose. Mr. Scherer
said Hostess' professionals are in talks with 110 parties, some of
whom are looking at "a substantial majority of all of our plants,
all of our facilities." At least six of the parties with which
Hostess is in talks have brought on large investment banks to help
them in their pursuit of the assets. Mr. Scherer also said there
are at least five national supermarket chains interested in the
assets, as well as parties from overseas that are interested in
distribution rights for India "and several other regions around
the globe."
The report notes potential buyers have until Dec. 10 to submit
letters of interest. Hostess is aiming to secure firm commitments
by January.
According to the report, Heather Lennox, Esq., an attorney for
Hostess, stressed that the company was distributing bonuses to
other workers too. "This is not a case where we're only looking
out for senior management," said Ms. Lennox, who is with the law
firm Jones Day.
The report also notes Judge Drain denied the request of the
company's second-biggest union, the Bakery, Confectionery, Tobacco
Workers and Grain Millers International Union, to slow down the
sale process and refrain from giving the company total clearance.
"I have to wonder again, and I repeat, again, what your client's
basis for whatever they're doing here is," he told an attorney for
the union. "I just don't get it."
The report recounts Judge Drain had previously said he didn't
understand why the bakers union didn't fight in court against the
labor concessions that ultimately prompted it to strike. He called
the bakers' largely silent approach to the bankruptcy case and
subsequent strike, "unusual" and "perhaps illogical."
About Hostess Brands
Founded in 1930, Irving, Texas-based Hostess Brands Inc., is known
for iconic brands such as Butternut, Ding Dongs, Dolly Madison,
Drake's, Home Pride, Ho Hos, Hostess, Merita, Nature's Pride,
Twinkies and Wonder. Hostess has 36 bakeries, 565 distribution
centers and 570 outlets in 49 states.
Hostess filed for Chapter 11 bankruptcy protection early morning
on Jan. 11, 2011 (Bankr. S.D.N.Y. Case Nos. 12-22051 through
12-22056) in White Plains, New York. DHostess Brands disclosed
assets of $982 million and liabilities of $1.43 billion as of the
Chapter 11 filing.
The bankruptcy filing was made two years after predecessors
Interstate Bakeries Corp. and its affiliates emerged from
bankruptcy (Bankr. W.D. Mo. Case No. 04-45814).
In the new Chapter 11 case, Hostess has hired Jones Day as
bankruptcy counsel; Stinson Morrison Hecker LLP as general
corporate counsel and conflicts counsel; Perella Weinberg Partners
LP as investment bankers, FTI Consulting, Inc. to provide an
interim treasurer and additional personnel for the Debtors, and
Kurtzman Carson Consultants LLC as administrative agent.
Matthew Feldman, Esq., at Willkie Farr & Gallagher, and Harry
Wilson, the head of turnaround and restructuring firm MAEVA
Advisors, are representing the Teamsters union.
Attorneys for The Bakery, Confectionery, Tobacco Workers and Grain
Millers International Union and Bakery & Confectionery Union &
Industry International Pension Fund are Jeffrey R. Freund, Esq.,
at Bredhoff & Kaiser, P.L.L.C.; and Ancela R. Nastasi, Esq., David
A. Rosenzweig, Esq., and Camisha L. Simmons, Esq., at Fulbright &
Jaworski L.L.P.
The official committee of unsecured creditors selected New York
law firm Kramer Levin Naftalis & Frankel LLP as its counsel. Tom
Mayer and Ken Eckstein head the legal team for the committee.
Hostess Brands in mid-November opted to pursue the orderly wind
down of its business and sale of its assets after the Bakery,
Confectionery, Tobacco and Grain Millers Union (BCTGM) commenced a
nationwide strike. The Debtor failed to reach an agreement with
BCTGM on contract changes. Hostess Brands said it intends to
retain approximately 3,200 employees to assist with the initial
phase of the wind down. Employee headcount is expected to decrease
by 94% within the first 16 weeks of the wind down. The entire
process is expected to be completed in one year.
HOSTESS BRANDS: Objects to Expedited Hearing on Trustee Bid
-----------------------------------------------------------
Unions representing certain employees of Hostess Brands Inc.
have asked the judge overseeing the company's case to appoint a
Chapter 11 trustee to ensure an orderly wind-down.
Reuters reports that lawyers for Hostess filed papers opposing the
motion for an expedited decision of the unions' request. The
Hostess lawyers said they believed there were "serious legal
deficiencies" in the union's motion for a trustee. Judge Robert
D. Drain has already rejected a request to convert the case into a
Chapter 7 liquidation that would be overseen by a trustee, calling
it a "disaster" because of the potential delay in selling the
company's assets, the report says.
About Hostess Brands
Founded in 1930, Irving, Texas-based Hostess Brands Inc., is known
for iconic brands such as Butternut, Ding Dongs, Dolly Madison,
Drake's, Home Pride, Ho Hos, Hostess, Merita, Nature's Pride,
Twinkies and Wonder. Hostess has 36 bakeries, 565 distribution
centers and 570 outlets in 49 states.
Hostess filed for Chapter 11 bankruptcy protection early morning
on Jan. 11, 2011 (Bankr. S.D.N.Y. Case Nos. 12-22051 through
12-22056) in White Plains, New York. DHostess Brands disclosed
assets of $982 million and liabilities of $1.43 billion as of the
Chapter 11 filing.
The bankruptcy filing was made two years after predecessors
Interstate Bakeries Corp. and its affiliates emerged from
bankruptcy (Bankr. W.D. Mo. Case No. 04-45814).
In the new Chapter 11 case, Hostess has hired Jones Day as
bankruptcy counsel; Stinson Morrison Hecker LLP as general
corporate counsel and conflicts counsel; Perella Weinberg Partners
LP as investment bankers, FTI Consulting, Inc. to provide an
interim treasurer and additional personnel for the Debtors, and
Kurtzman Carson Consultants LLC as administrative agent.
Matthew Feldman, Esq., at Willkie Farr & Gallagher, and Harry
Wilson, the head of turnaround and restructuring firm MAEVA
Advisors, are representing the Teamsters union.
Attorneys for The Bakery, Confectionery, Tobacco Workers and Grain
Millers International Union and Bakery & Confectionery Union &
Industry International Pension Fund are Jeffrey R. Freund, Esq.,
at Bredhoff & Kaiser, P.L.L.C.; and Ancela R. Nastasi, Esq., David
A. Rosenzweig, Esq., and Camisha L. Simmons, Esq., at Fulbright &
Jaworski L.L.P.
The official committee of unsecured creditors selected New York
law firm Kramer Levin Naftalis & Frankel LLP as its counsel. Tom
Mayer and Ken Eckstein head the legal team for the committee.
Hostess Brands in mid-November opted to pursue the orderly wind
down of its business and sale of its assets after the Bakery,
Confectionery, Tobacco and Grain Millers Union (BCTGM) commenced a
nationwide strike. The Debtor failed to reach an agreement with
BCTGM on contract changes. Hostess Brands said it intends to
retain approximately 3,200 employees to assist with the initial
phase of the wind down. Employee headcount is expected to decrease
by 94% within the first 16 weeks of the wind down. The entire
process is expected to be completed in one year.
HUDSON PRODUCTS: Capital Structure No Impact on Moody's 'B2' CFR
----------------------------------------------------------------
Moody's Investors Service said that Hudson Products' change in its
proposed capital structure does not affect the company's B2
corporate family rating. In addition, the B2 rating on the
company's proposed $190 million 1st lien term loan remains
unchanged.
Hudson Products Holdings, Inc., headquartered in Beasley, TX, is
one of the world's leading heat transfer solutions companies
providing air-cooled heat exchangers (ACHEs), axial-flow fans and
related aftermarket hardware and support predominantly to North
American oil & gas, power and petrochemical end-markets. Hudson
was purchased by Riverstone Holdings LLC (the Sponsor) in 2008
from the prior sponsor. Upon completion of the anticipated
refinancing, the Sponsor will have converted all of its currently
held subordinated debt into common equity. Hudson generated
revenues in excess of $200 million for the twelve month period
ended September 30, 2012.
iGLOBAL STRATEGIC: Perlman, Firm to Pay Over $2MM for Ponzi Scheme
------------------------------------------------------------------
Judge Barbara S. Jones of the U.S. District Court for the Southern
District of New York entered a default judgment and permanent
injunction order against defendants Marc Perlman of Rancho
Cucamonga, Calif., and his firm, iGlobal Strategic Management,
LLC. The order stems from a complaint filed by the U.S. Commodity
Futures Trading Commission on August 28, 2012, charging the
defendants with operating a commodity pool Ponzi scheme that
fraudulently solicited and accepted at least $670,000 from at
least 17 people -- largely persons from the deaf community.
The order requires Perlman and iGlobal to jointly pay a civil
monetary penalty of $1,794,537 and restitution of $598,179. The
order finds that Perlman and iGlobal violated anti-fraud
provisions of the Commodity Exchange Act and imposes permanent
trading and registration bans against the defendants.
The order further finds that Perlman, directly and on behalf of
iGlobal, made material misrepresentations and deceptive statements
regarding the profitability of iGlobal?s trading. Perlman made a
number of statements in which he claimed that profits had been
earned when, in fact, the iGlobal trading accounts had losses or
had some profits but of a significantly lower magnitude than those
claimed, the order finds.
Specifically, the order finds that Perlman, directly and on behalf
of iGlobal, solicited members of the public to trade leveraged
off-exchange foreign currency contracts (forex). Although Perlman
represented to certain iGlobal investors that their funds would be
and were invested in forex, no more than about $305,000, or less
than half of the funds invested, were transferred to trading
accounts and of the funds transferred to trading accounts, nearly
all of the funds were lost trading, the order finds.
In addition, the order finds that at least $365,000 of iGlobal
investor funds were misappropriated to make payments of fictitious
profits, for cash withdrawals and payment of expenses, including
charges at department, electronic, grocery stores, and
restaurants, and to pay rent for Perlman?s personal residence and
utility costs, among others.
The CFTC appreciates the assistance of the National Futures
Association and the U.K. Financial Services Authority.
CFTC staff members responsible for this case are Laura Martin,
Christopher Giglio, Manal Sultan, Lenel Hickson, William Tylinski,
Stephen Obie, and Vincent McGonagle.
INTEGRATED BIOPHARMA: Three Directors Elected to Board
------------------------------------------------------
Integrated Biopharma, Inc., held its 2012 Annual Meeting of
Shareholders on Nov. 26, 2012. The Company's shareholders elected
Gerald Kay, Riva Sheppard and Carl DeSantis to serve as Class II
directors for a three year term expiring at the 2015 Annual
Meeting of Shareholders. The Company's shareholders also voted in
favor of ratifying the appointment of Friedman, LLP, as the
Company's independent auditors for the fiscal year ending June 30,
2013.
About Integrated BioPharma
Based in Hillside, N.J., Integrated BioPharma, Inc. (INBP.OB) --
-- http://www.healthproductscorp.us/ -- is engaged primarily in
manufacturing, distributing, marketing and sales of vitamins,
nutritional supplements and herbal products. The Company's
customers are located primarily in the United States. The Company
was previously known as Integrated Health Technologies, Inc., and,
prior to that, as Chem International, Inc. The Company was
reincorporated in its current form in Delaware in 1995. The
Company continues to do business as Chem International, Inc., with
certain of its customers and certain vendors.
The Company incurred a net loss of $2.71 million for the
year ended June 30, 2012, compared with a net loss of $2.28
million during the prior year.
"The Company has incurred recurring operating losses for six
consecutive years including an operating loss of $506 and a net
loss of $2.7 million for the year ended June 30, 2012.
Additionally, at June 30, 2011, and through the fourth quarter of
the fiscal year ended June 30, 2012, the Notes Payable in the
amount of $7.8 million, which matured on Nov. 15, 2009, were in
default and the Company's Original CD Note of $4.5 million, which
matured in February 2011, was also in default. These factors
raised substantial doubt as to the Company's ability to continue
as a going concern at June 30, 2011, and through the third quarter
of the fiscal year ended June 30, 2012," the Company said in its
annual report for the year ended June 30, 2012.
The Company's balance sheet at Sept. 30, 2012, showed $12.17
million in total assets, $23.52 million in total liabilities and a
$11.35 million total stockholders' deficiency.
INTERNATIONAL BARRIER: Incurs $161,000 Net Loss in 3rd Quarter
--------------------------------------------------------------
International Barrier Technology Inc. filed its quarterly report
on Form 10-Q, reporting a net loss of US$160,765 on US$896,533 of
sales for the three months ended Sept. 30, 2012, compared with net
income of US$249,539 on US$1.1 million of sales for the prior
fiscal period.
During the prior year quarter ending Sept. 30, 2011, the Company
reported a fair value gain of US$379,581 associated with a change
in fair value of derivative liability.
The Company's balance sheet at Sept. 30, 2012, showed
US$3.5 million in total assets, US$1.3 million in total
liabilities, and stockholders' equity of US$2.2 million.
"At Sept. 30, 2012, the Company had an accumulated deficit of
US$14,891,119 (June 30, 2012 - US$14,730,354) since its inception
and expects to incur further losses in the development of its
business, all of which casts substantial doubt about the Company's
ability to continue as a going concern."
As reported in the TCR on Oct. 3, 2012, BDO Canada LLP, in
Vancouver, Canada, expressed substantial doubt about International
Barrier's ability to continue as a going concern. The independent
auditors noted that the Company had an accumulated deficit of
US$14,730,354 at June 30, 2012, and had a working capital deficit
of US$153,932.
A copy of the Form 10-Q is available at http://is.gd/1yqjFv
Watkins, Minnesota-based International Barrier Technology Inc.
develops, manufactures and markets proprietary fire resistant
building materials branded as Blazeguard in the United States of
America. The Company also owns the exclusive U.S. and
international rights to the Pyrotite fire retardant technology.
The Company was incorporated under the British Columbia Company
Act and is publicly traded on the TSX Venture Exchange in Canada
("TSX-V") and the OTC Bulletin Board in the United States of
America.
INTERNATIONAL STORYTELLING: To Name Three Members to Board
----------------------------------------------------------
Lynn J. Richardson at Herald & Tribune reports that, when the
Board of Governors of the International Storytelling Center meets
in Jonesborough, Tennessee, in December, it will welcome three new
members.
According to the report, ISC Board Chairman Jim Reel says now that
the ISC has emerged from Chapter 11 bankruptcy, the board will
move forward with its search for a new president and CEO for the
organization.
"That is something the ISC Board of Governors will work on at
their next meeting on Dec. 17," the report quotes Mr. Reel as
saying. "It's on the agenda. We will be deciding on what we're
looking for, what characteristics."
The report adds there is no time frame in place for the hiring
process at this point.
The report relates the ISC has been without a president or CEO
since Jan. 1, when Jimmy Neil Smith, who founded the organization
and formerly served in that capacity, was given a new role as
founder and president emeritus.
The report says the change in Mr. Smith's status was part of the
ISC's strategic plan to emerge from Chapter 11 bankruptcy, the
report quotes Mr. Reel as saying.
The report adds three new board members will join the Board of
Governors next month, one of which is Jonesborough Vice Mayor
Terry Countermine.
Based in Jonesborough, Tennessee, International Storytelling
Center filed for Chapter 11 protection (Bankr. E.D. Tenn. Case No.
10-53299) on Dec. 31, 2010. Judge Marcia Phillips Parsons
presides over the case. Mark S. Dessauer, Esq., at Hunter, Smith
& Davis, represents the Debtor. The Debtor both estimated assets
and debts between $1 million and $10 million.
IOWORLDMEDIA INC: Incurs $204,000 Net Loss in Third Quarter
-----------------------------------------------------------
IOWorldMedia, Incorporated, filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing
a net loss of $204,229 on $397,644 of sales for the three months
ended Sept. 30, 2012, compared with a net loss of $185,821 on
$445,658 of sales for the same period during the prior year.
The Company reported a net loss of $539,920 on $1.20 million of
sales for the nine months ended Sept. 30, 2012, compared with a
net loss of $764,617 on $1.21 million of sales for the same period
a year ago.
The Company's balance sheet at Sept. 30, 2012, showed $1.99
million in total assets, $1.49 million in total liabilities,
$5.77 million in total temporary equity, and a $5.26 million total
stockholders' deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/mzGLqu
About ioWorldMedia
Tampa, Fla.-based ioWorldMedia, Incorporated, operates three
primary internet media subsidiaries: Radioio, ioBusinessMusic, and
RadioioLive.
As reported in the TCR on April 20, 2012, Patrick Rodgers, CPA,
PA, in Altamonte Springs, Fla., expressed substantial doubt about
ioWorldMedia's ability to continue as a going concern, following
the Company's results for the fiscal year ended Dec. 31, 2011.
The independent auditor noted that the Company has suffered
recurring losses from operations and negative cash flows
from operations the past two years.
ISTAR FINANCIAL: Inks Underwriting Pacts for $500-Mil. Offering
---------------------------------------------------------------
iStar Financial Inc. entered into separate underwriting agreements
with the several underwriters with respect to the issuance and
sale, in concurrent public offerings, of (i) $300 million
aggregate principal amount of the Company's 7.125% Senior Notes
due 2018; and (ii) $200 million aggregate principal amount of the
Company's 3.00% Convertible Senior Notes due 2016.
Both transactions were completed on Nov. 13, 2012. The Company
intends to use the net proceeds from the issuance and sale of the
Notes to redeem the remaining $67 million aggregate principal
amount of its 6.5% Senior Notes due 2013 and the remainder of the
net proceeds to redeem approximately $405 million aggregate
principal amount of its 8.625% Senior Notes due 2013.
The Notes were registered with the Securities and Exchange
Commission pursuant to the Company's shelf registration statement
on Form S-3 (File No. 333-181470).
Copies of the Underwriting Agreements are available at:
http://is.gd/Ch6Ea6
http://is.gd/pZn3HN
About iStar Financial
New York-based iStar Financial Inc. (NYSE: SFI) provides custom-
tailored investment capital to high-end private and corporate
owners of real estate, including senior and mezzanine real estate
debt, senior and mezzanine corporate capital, as well as corporate
net lease financing and equity. The Company, which is taxed as a
real estate investment trust, provides innovative and value added
financing solutions to its customers.
The Company reported a net loss of $25.69 million in 2011,
compared with net income of $80.20 million in 2010.
iStar Financial's balance sheet at Sept. 30, 2012, showed $6.94
billion in total assets, $5.52 billion in total liabilities,
$14.20 million in redeemable noncontrolling interests, and $1.40
billion in total equity.
* * *
In March 2012, Fitch affirmed the company's 'B-' issuer default
rating. The IDR affirmation is based on a manageable debt
maturity profile of the company, pro forma for the recently-
consummated secured financing that extends certain of the
company's debt maturities, relieving the overhang of significant
unsecured debt maturities in 2012 and 2013. While this 2012
financing does not reduce the amount of total debt outstanding,
the company's debt maturity profile is more manageable over the
next two years, with only 48% of debt maturing pro forma, down
from 61%. Given the mild improvement in commercial real estate
fundamentals and value stabilization, the company's loan and real
estate owned portfolio performance will likely improve going
forward, which should increase the company's ability to repay
upcoming indebtedness.
As reported by the TCR on Oct. 5, 2012, Standard & Poor's Ratings
Services affirmed its 'B+' long-term issuer credit rating on iStar
Financial Inc.
In October 2012, Moody's Investors Service upgraded the corporate
family rating to B2 from B3. The current rating reflects the
REIT's success in extending near term debt maturities and
improving fundamentals in commercial real estate. The ratings on
the October 2012 senior secured credit facility takes into account
the asset coverage, the size and quality of the collateral pool,
and the term of facility.
JEFFERSON COUNTY: Settles Bessemer Courthouse Dispute
-----------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Jefferson County, Alabama, settled disputes with
bondholders and the bond insurer over a newly built courthouse and
jail in Bessemer, 15 miles (24 kilometers) to the southwest. The
settlement allows the county to continue using the courthouse
under reduced rent.
The report notes that in August the county said it had sufficient
courthouse facilities in Birmingham and didn't need the Bessemer
facility. Consequently, the county filed papers asking the
bankruptcy judge to authorize abandoning the courthouse and
terminating various financing agreements. The settlement comes to
court for approval on Dec. 6.
According to the report, assuming Ambac Assurance Corp. lives up
to its guarantee obligations and the county pays under the revised
lease, holders of $87 million in bonds will be fully paid. The
Jefferson County Public Building Authority and Ambac are required
to make a new lease with the county and in return will have an
unsecured claims for damages. The new lease will run through
2037.
The settlement, the report relates, removes the necessity for the
bankruptcy judge to rule on numerous thorny issues. The county
leases the Bessemer facility from the authority. The bondholders'
security includes the income stream from the county. Otherwise,
the authority isn't liable to pay the bonds if the county doesn't
pay rent.
About Jefferson County
Jefferson County has its seat in Birmingham, Alabama. It has a
population of 660,000.
Jefferson County filed a bankruptcy petition under Chapter 9
(Bankr. N.D. Ala. Case No. 11-05736) on Nov. 9, 2011, after an
agreement among elected officials and investors to refinance
$3.1 billion in sewer bonds fell apart.
John S. Young Jr. LLC was appointed as receiver by Alabama Circuit
Court Judge Albert Johnson in September 2010.
Jefferson County's bankruptcy represents the largest municipal
debt adjustment of all time. The county said that long-term debt
is $4.23 billion, including about $3.1 billion in defaulted sewer
bonds where the debt holders can look only to the sewer system for
payment.
The county said it would use the bankruptcy court to put a value
on the sewer system, in the process fixing the amount bondholders
should be paid through Chapter 9.
Judge Thomas B. Bennett presides over the Chapter 9 case. Lawyers
at Bradley Arant Boult Cummings LLP and Klee, Tuchin, Bogdanoff &
Stern LLP, led by Kenneth Klee, represent the Debtor as counsel.
Kurtzman Carson Consultants LLC serves as claims and noticing
agent. Jefferson estimated more than $1 billion in assets. The
petition was signed by David Carrington, president.
The bankruptcy judge in January 2012 ruled that the state court-
appointed receiver for the sewer system largely lost control as a
result of the bankruptcy. Before deciding whether Jefferson County
is eligible for Chapter 9, the bankruptcy judge will allow the
Alabama Supreme Court to decide whether sewer warrants are the
equivalent of "funding or refunding bonds" required under state
law before a municipality can be in bankruptcy.
U.S. District Judge Thomas B. Bennett ruled in March 2012 that
Jefferson County is eligible under state law to pursue a debt
restructuring under Chapter 9. Holders of more than $3 billion in
defaulted sewer debt had challenged the county's right to be in
Chapter 9.
JOSEPH DETWEILER: Court Rejects Discharge Upon Plan Confirmation
----------------------------------------------------------------
Bankruptcy Judge Russ Kendig declined Joseph J. Detweiler's
request for a discharge upon confirmation of his Chapter 11 plan,
saying the Debtor has not demonstrated cause for entry of an early
discharge. The judge said the plan may be confirmed without the
discharge provision, and the Debtor may renew his request for an
early discharge by separate motion.
According to Judge Kendig, Mr. Detweiler's case is "particularly
troubling" because the Debtor provided for his discharge at
confirmation without any foundation in the plan specifying cause
for discharge prior to completion of payments. The judge said
Sec. 1141(d)(5)(A) places a burden on debtor to demonstrate cause.
For this reason, the court cannot accept that conspicuous notice
in a disclosure statement and notice of a confirmation hearing
meets the Debtor's obligations. Any notice must include some
identification of the cause. Only then can a creditor credibly
assess whether an objection is warranted.
On July 26, 2012, the Debtor filed an amended chapter 11 plan that
contains the following provision: "Except as provided in this Plan
or the Confirmation Order, Confirmation will (a) discharge the
Debtor from all Claims or other debts that arose before the
Confirmation Date . . . ."
The United States Trustee and FirstMerit Bank have objected to the
plan. The U.S. Trustee argues that this plan provision violates
11 U.S.C. Sec. 1141(d)(5)(A).
FirstMerit's objection was resolved by agreement without hearing.
"The court cannot support discharge by stealth," Judge Kendig
said.
A copy of the Court's Nov. 27, 2012 Memorandum of Opinion is
available at http://is.gd/3jvlWPfrom Leagle.com.
Joseph J. Detweiler filed a chapter 11 petition (Bankr. N.D. Ohio
Case No. 09-63377) on Aug. 17, 2009.
K-V PHARMACEUTICAL: Has Access to Cash Collateral Until Jan. 9
--------------------------------------------------------------
The Bankruptcy Court entered a stipulation and order further
extending K-V Pharmaceutical Company and its affiliates'
authorization to use their cash collateral through and including
Jan. 9, 2013.
The Bankruptcy Court entered an agreed interim order on Aug. 10,
2012, which, among other things, authorized the Debtors to use of
their cash collateral.
On Sept. 14, 2012, the Bankruptcy Court entered an Order which,
among other things, authorized the Debtors to use their cash
collateral through and including Oct. 18, 2012.
On Oct. 16, 2012, the Bankruptcy Court "so ordered" a stipulation
extending the Debtors' authorization to use their cash collateral
through and including Nov. 21, 2012.
Subordinated Notes Trustee
On Nov. 21, 2012, Deutsche Bank Trust Company Americas, as Trustee
of the $200 million aggregate principal amount of convertible
subordinated notes issued by the Company, filed a motion with the
Bankruptcy Court for entry of an order, pursuant to Rule 2004 of
the Federal Rules of Bankruptcy Procedure, directing the
examination of the Company and certain other parties. Based upon
the information available to it, the Trustee alleges that the
Indenture governing the Subordinated Notes may not be the actual
indenture under which the Subordinated Notes were issued. In
particular, the Trustee alleges that, in relevant part, the
Indenture should require that indebtedness which ranks senior to
the Subordinated Notes receive "payment in full" before any
distribution to holders of the Subordinated Notes, rather than
"payment in full in cash or cash equivalent" which is provided for
in the Indenture filed by the Company on Form 8-K. This provision
could have implications relative to the application of the
subordination provisions of the Indenture with respect to the
relative rights of holders of senior debt and the Subordinated
Notes. The Company believes that the Indenture filed on Form 8-K
is the correct version, however there can be no assurance that the
Company will prevail in its assertion.
About K-V Pharmaceutical
K-V Pharmaceutical Company (NYSE: KVa/KVb) --
http://www.kvpharmaceutical.com/-- is a fully integrated
specialty pharmaceutical company that develops, manufactures,
markets, and acquires technology-distinguished branded and
generic/non-branded prescription pharmaceutical products. The
Company markets its technology distinguished products through
ETHEX Corporation, a subsidiary that competes with branded
products, and Ther-Rx Corporation, the company's branded drug
subsidiary.
K-V Pharmaceutical Company and certain domestic subsidiaries on
Aug. 4 filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Lead
Case No. 12-13346, under K-V Discovery Solutions Inc.) to
restructure their financial obligations.
K-V has retained the services of Willkie Farr & Gallagher LLP as
bankruptcy counsel, Williams & Connolly LLP as special litigation
counsel, and SNR Denton as special litigation counsel. In
addition, K-V has retained Jefferies & Co., Inc., as financial
advisor and investment banker. Epiq Bankruptcy Solutions LLC is
the claims and notice agent.
The U.S. Trustee appointed five members to serve in the Official
Committee of Unsecured Creditors.
K-V's main business now is the sale of Makena, a drug reducing the
risk of premature birth. Hologic Inc. sold the Makena business to
K-V in 2008 and is owed about $95 million plus royalties. Hologic
has a lien on the right to distribute the product to recover the
remaining payments. Hologic wants the bankruptcy judge to grant
permission to foreclose rights to Makena.
K-V is operating with use of cash representing collateral for
$225 million in senior notes.
KIWIBOX.COM INC: Incurs $1.21 Million Net Loss in 3rd Quarter
-------------------------------------------------------------
Kiwibox.com, Inc., filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $1.21 million on $269,263 of total revenues for the three
months ended Sept. 30, 2012, compared with a net loss of
$4.14 million on $1,500 of total revenues for the same period
during the preceding year.
For the nine months ended Sept. 30, 2012, Kiwibox.com incurred a
net loss of $8.11 million on $1.11 million of total revenues,
compared with a net loss of $4.78 million on $2,272 of total
revenues for the same period a year ago.
The Company reported a net loss of $5.90 million in 2011, compared
with a net loss of $3.97 million in 2010.
The Company's balance sheet at Sept. 30, 2012, showed
$7.99 million in total assets, $21.09 million in total
liabilities, all current, and a $13.09 million total stockholders'
impairment.
"The ability of the Company to continue its operations is
dependent on increasing sales and obtaining additional capital and
financing. Our revenues during the foreseeable future are
insufficient to finance our business and we are entirely dependent
on the willingness of existing investors to continue supporting
the Company with working capital loans and equity investments, and
our ability to find new investors should the financial support
from existing investors prove to be insufficient. If we were
unable to obtain a steady flow of new debt or equity-based working
capital we would be forced to cease operations."
In their report on the 2011 financial statements, Rosenberg Rich
Baker Berman & Company, in Somerset, New Jersey, expressed
substantial doubt about the Company's ability to continue as a
going concern. The independent auditors noted that the Company
has suffered losses from operations and has a working capital
deficiency as of Dec. 31, 2011.
A copy of the Form 10-Q is available for free at:
http://is.gd/CI27PW
About Kiwibox.com
New York-based Kiwibox.com, Inc., acquired in the beginning of
2011 Pixunity.de, a photoblog community and launched a U.S.
version of this community in the summer of 2011. Effective July
1, 2011, Kiwibox.com, Inc., became the owner of Kwick! --a top
social network community based in Germany. Kiwibox.com shares are
freely traded on the bulletin board under the symbol KIWB.OB.
LBI MEDIA: Majority of Lenders Consent to Exchange Offers
---------------------------------------------------------
LBI Media, Inc., LBI Media Holdings, Inc., and Liberman
Broadcasting, Inc., amended certain terms of their private
exchange offers with respect to Media's 8 1/2% senior subordinated
notes due 2017 and Holdings' 11% senior discount notes due 2013
and solicitation of consents with respect to the Discount Notes,
and extended the expiration date for the Exchange Offers and
solicitation of Discount Notes Consents to midnight, New York City
time, on Dec. 3, 2012. Concurrently with the Exchange Offers,
Media is also soliciting consents from holders of Media's 9 1/4%
Senior Secured Notes due 2019 to certain amendments to the
indenture governing the First Priority Senior Secured Notes, which
is also set to expire on Dec. 3, 2012.
The Exchange Offers for the Old Notes and the Consent
Solicitations with respect to the Discount Notes and First
Priority Senior Secured Notes are conditioned on obtaining the
consent of the lenders of a majority of the loans, commitments and
letters of credit exposure under Media's Amended and Restated
Credit Agreement, dated as of March 18, 2011, by and among Media,
the guarantors party thereto, the lenders party thereto, Credit
Suisse Securities (USA) LLC, as lead arranger, Credit Suisse AG,
Cayman Islands Branch, as collateral trustee, and Credit Suisse
AG, Cayman Islands Branch, as administrative agent to certain
amendments to the Credit Agreement.
The Company has received the consent of the lenders of a majority
of the loans, commitments and letters of credit exposure under the
Credit Agreement to certain amendments to the Credit Agreement,
including amendments to permit the Exchange Offers. The
amendments will only become effective if the Exchange Offers are
consummated.
Those amendments will include, among other things, modifications
to the covenants to permit the Exchange Offers. The amendments
will also make certain changes to the covenant package and events
of default which conform to the modifications that will be made to
the indenture governing the First Priority Senior Secured Notes as
part of the First Priority Senior Secured Notes Consent
Solicitation, such as adding certain real property collateral as
security for the Credit Agreement, modifying provisions related to
Media's subsidiary, Empire Burbank, LLC, and modifying the debt,
lien, investment and restricted payment negative covenants.
Additional changes to the Credit Agreement will also be
effectuated by the amendments including a reduction in the
required revolving facility leverage ratio from 3.50: 1.00 to 3.00
to 1.00, reductions in debt, lien, investment, asset sale and
restricted payment baskets the addition of certain restrictions
related to permitted acquisitions and certain modifications to the
events of default.
A copy of the Consent Agreement is available for free at:
http://is.gd/dtHvDl
Headquartered in Burbank, CA, LBI Media, Inc., operates Spanish-
language broadcasting properties including 21 radio stations (15
FM and 6 AM generating 47% of 2011 revenue) and 9 television
stations plus the EstrellaTV Network (53% of 2011 revenue).
EstrellaTV is a Spanish-language television broadcast network that
was launched in the fall of 2009. Through EstrellaTV, the company
is affiliated with television stations in 39 DMAs comprising 78%
of U.S. Hispanic television households. Jose Liberman founded the
company in 1987, together with his son, Lenard Liberman.
Shareholders include Jose Liberman (20%), Lenard Liberman (41%),
Oaktree Capital (26%) and Tinicum Capital (13%). The dual class
equity structure provides the Liberman's with 94% of voting
control between Jose Liberman (31%) and Lenard Liberman (63%).
Revenues for FY2011 totaled $117.5 million.
LBI Media's balance sheet at Sept. 30, 2012, showed $311.61
million in total assets, $561.02 million in total liabilities and
a $249.40 million total stockholders' deficiency.
"The condensed consolidated financial statements have been
prepared assuming that the Company will continue as a going
concern," the Company said in its quarterly report for the period
ended Sept. 30, 2012. "However, as a result of uncertainties
related to future sources and sufficiency of liquidity required by
the Company to satisfy its outstanding debt and debt service
obligations... there is substantial doubt about the Company's
ability to continue as a going concern."
* * *
As reported by the TCR on Oct. 31, 2012, Standard & Poor's Ratings
Services lowered its corporate credit rating on Burbank, Calif.-
based LBI Media Inc. (LBI) to 'D' from 'CC'.
"The rating actions stem from LBI Media Holdings' disclosure that
it did not make the interest payment (about $3.8 million) on its
11% senior discount notes due Oct. 15, 2012, and after LBI
announced its eighth extension of its subpar debt exchange offer
for the 8.5% senior subordinated notes due 2017 and 11% senior
discount notes due 2013," S&P said.
In the April 5, 2012, edition of the TCR, Moody's Investors
Service downgraded LBI Media, Inc.'s Corporate Family Rating (CFR)
and Probability-of-Default Rating (PDR) each to Caa2 from Caa1 and
downgraded debt instruments accordingly. The downgrades follow
the company's earnings release for the 4th quarter of 2011 and
reflect weakened liquidity, revenue and EBITDA declines for radio
stations compounded by EBITDA declines for television operations,
and Moody's view that LBI's capital structure is unsustainable.
The rating outlook was changed to Negative from Stable.
LKA INTERNATIONAL: Reports $76,400 Net Income in Third Quarter
--------------------------------------------------------------
LKA International, Inc., filed its quarterly report on Form 10-Q,
reporting net income of $76,404 on $714,990 of revenues for the
three months ended Sept. 30, 2012, compared with net income of
$41,050 on $364,286 of revenues for the same period last year.
For the nine months ended Sept. 30, 2012, the Company had a net
loss of $100,989 on $1.6 million of revenues, compared with a net
loss of $589,923 on $651,808 of revenues for the same period of
2011.
The Company's balance sheet at Sept. 30, 2012, showed $1.1 million
in total assets, $2.1 million in total liabilities, and a
stockholders' deficit of $1.0 million.
A copy of the Form 10-Q is available at http://is.gd/HKCNt3
About LKA International
Gig Harbor, Washington-based LKA International, Inc., is currently
engaged in an intensive exploration program at the Golden Wonder
mine with the objective of returning the mine to a commercial
producing status.
* * *
MaloneBailey, LLP, in Houston, Texas, expressed substantial doubt
about LKA's ability to continue as a going concern, following
their audit of the Company's financial statements for the fiscal
year ended Dec. 31, 2011. The independent auditors noted that the
Company suffered losses from operations and has a working capital
deficit, which raises substantial doubt about its ability to
continue as a going concern.
MEDIA GENERAL: GAMCO Owns 18.6% of Class A Shares
-------------------------------------------------
In an amended Schedule 13D filing with the U.S. Securities and
Exchange Commission, GAMCO Asset Management Inc. and its
affiliates disclosed that, as of Nov. 2, 2012, they beneficially
own 5,096,074 shares of Class A common stock of Media General,
Inc., representing 18.61% of the shares outstanding. GAMCO Asset
previously reported beneficial ownership of 5,094,924 Class A
shares. A copy of the filing is available for free at:
http://is.gd/URKn8b
About Media General
Richmond, Virginia-based Media General Inc. (NYSE: MEG) --
http://www.mediageneral.com/-- is an independent communications
company with interests in newspapers, television stations and
interactive media in the United States.
The Company reported a net loss of $74.32 million for the fiscal
year ended Dec. 25, 2011, a net loss of $22.64 million for the
fiscal year ended Dec. 26, 2010, and a net loss of $35.76 million
for the fiscal year ended Dec. 27, 2009.
The Company's balance sheet at Sept. 23, 2012, showed
$773.96 million in total assets, $933.87 million in total
liabilities and a $159.91 million stockholders' deficit.
* * *
As reported by the Troubled Company Reporter on April 12, 2012,
Moody's Investors Service downgraded, among other things, Media
General's Corporate Family Rating (CFR) and Probability of Default
Rating (PDR) to Caa1 from B3, concluding the review for downgrade
initiated on Feb. 13, 2012. The downgrade reflects the
significant increase in interest expense associated with the
company's credit facility amend and extend transaction and an
assumed issuance of at least $225 million of new notes, which will
result in limited free cash flow generation and constrain Media
General's capacity to reduce its very high leverage. The weak
free cash flow and high leverage create vulnerability to changes
in the company's highly cyclical revenue and EBITDA generation.
In the Oct. 10, 2012, edition of the TCR, Standard & Poor's
Ratings Services raised its rating on Richmond, Va.-based Media
General Inc. to 'B-' from 'CCC+' and removed it from CreditWatch,
where it was placed with positive implications on May 18, 2012.
"The corporate credit rating on Media General is based on our
expectation that the company will be able to maintain adequate
liquidity despite its very high leverage," noted Standard & Poor's
credit analyst Jeanne Shoesmith.
MERCATOR MINERALS: Incurs $15.1-Mil. Net Loss in Third Quarter
--------------------------------------------------------------
Mercator Minerals Ltd. filed its quarterly report on Form 10-Q,
reporting a net loss of US$15.1 million on US$58.5 million of
revenue for the three months ended Sept. 30, 2012, compared with a
net income of US$106.8 million on US$64.0 million of revenue for
the comparable period last year.
For the nine months ended Sept. 30, 2012, the Company had a net
loss of US$13.5 million on US$185.1 million of revenue, compared
with net income of US$124.6 million on US$192.3 million of revenue
for the same period of 2011.
Unrealized gain/(loss) on derivative instruments totaled
($14.5) million and $89.5 million during the three months ended
Sept. 30, 2012, and 2011, respectively, while for the nine months
ended Sept. 30, 2012, and 2011, the unrealized gain/(loss) on
derivative instruments totaled ($13.6) million and $90.2 million,
respectively.
Unrealized gain/(loss) on share purchase warrants totaled
($455,000) and $20.3 million during the three months ended
Sept. 30, 2012, and 2011, respectively, while for the nine months
ended Sept. 30, 2012, and 2011, the unrealized gain(loss) on share
purchase warrants totaled $6.5 million and $34.6 million,
respectively.
The Company's balance sheet at Sept. 30, 2012, showed
US$588.1 million in total assets, US$305.8 million in total
liabilities, and equity of US$282.3 million.
Going Concern Uncertainty
At Sept. 30, 2012, the Company had an an accumulated deficit of
$138.1 million (Dec. 31, 2011 - $133.3 million) and a working
capital deficiency of $63.8 million (Dec. 31, 2011 -
$116.3 million).
At Sept. 30, 2012, the Company's overdue accounts payable totaled
$21.1 million. Subsequent to Sept. 30, 2012, on October 23,
Mineral Park executed an amendment to its Credit Facility and
closed a bought deal private placement of 55,775,000 common shares
of Mercator at a price of $0.52 per common share for gross
proceeds of approximately CDN$29.0 million through a syndicate of
underwriters. The proceeds from the Private Placement should
allow the company to become current with all vendors by year end
2012.
The Company said that the uncertainty with respect to the
Company's ability to meet its operating objectives and settle the
Company's liabilities including the overdue accounts payable casts
substantial doubt about the Company's ability to continue as a
going concern.
A copy of the Condensed Consolidated Interim Financial Statements
for the period ended Sept. 30, 2012, is available for free at:
http://is.gd/h06hJt
Based in Vancouver, B.C., Mercator Minerals Ltd. is a natural
resource company engaged in the mining, development and
exploration of its mineral properties in the United States of
America and Mexico. The Company's principal assets are its 100%
owned Mineral Park mine, a producing copper/molybdenum mine
located near Kingman, Arizona, its 100% owned El Pilar copper
exploration and development project located in northern Mexico and
its 100% owned El Creston molybdenum exploration and development
project located in northern Mexico. The Company acquired 100% of
the shares of Mineral Park Inc., which owns Mineral Park mine,
from Equatorial Mining North America, Inc. in 2003.
MERITOR INC: S&P Gives 'B-' Rating on $150MM Sr. Convertible Notes
------------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B-' issue rating
and '5' recovery rating to Troy, Mich.-based commercial truck part
supplier Meritor Inc.'s proposed $150 million senior unsecured
convertible notes due 2026, issued under Rule 144A without
registration rights. "The '5' recovery rating indicates our
expectation of modest (10% to 30%) recovery in the event of a
payment default. Meritor has ndicated that it will use the net
proceeds from the proposed note offering to repay outstanding
debt," S&P said.
"The 'B' corporate credit rating on Meritor reflects our
assessment of the company's financial risk profile as 'highly
leveraged' with debt to EBITDA of 5.9x and the business risk
profile as 'weak' with exposure to the highly cyclical commercial-
vehicle markets. Although the company has improved its operational
performance, we expect that economic activity will remain weak in
Europe and Latin America in 2013," S&P said.
RATINGS LIST
Meritor Inc.
Corporate Credit Rating B/Stable/--
Meritor Inc.
$150 mil sr unsecd convertible notes due 2026 B-
Recovery Rating 5
MERRIMAN HOLDINGS: Incurs $1.1-Mil. Net Loss in Third Quarter
-------------------------------------------------------------
Merriman Holdings, Inc., filed its quarterly report on Form 10-Q,
reporting a net loss of $1.1 million on $2.5 million of total
revenues for the three months ended Sept. 30, 2012, compared with
a net loss of $1.8 million on $4.1 million of total revenues for
the same period last year.
For the nine months ended Sept. 30, 2012, the Company had a net
loss of $5.5 million on $10.4 million of total revenues, compared
with a net loss of $4.4 million on $19.0 million of total revenues
for the same period of 2011.
The Company's balance sheet at Sept. 30, 2012, showed $4.8 million
in total assets, $4.1 million in total liabilities, and a
stockholders' equity of $697,505.
"For the nine months ended Sept. 30, 2012, the Company had
negative cash flows from operations of approximately $3,585,000.
The Company incurred substantial loss during the first nine months
of 2012, having a net loss of approximately $5,521,000. As of
Sept. 30, 2012, the Company had an accumulated deficit of
approximately $143,569,000. These facts raise substantial doubt
as to our ability to continue as a going concern.
A copy of the Form 10-Q is available at http://is.gd/z6R95U
Merriman Holdings, Inc. and subsidiaries, is a financial services
holding company that provides investment banking, capital markets
services, corporate services, and investment banking through its
primary operating subsidiary, Merriman Capital, Inc. (MC). MC is
registered with the Securities and Exchange Commission as a
broker-dealer and is a member of the Financial Industry Regulatory
Authority (FINRA) and Securities Investor Protection Corporation.
MC is an investment bank and securities broker-dealer focused on
fast-growing companies and institutional investors. Its mission
is to be the leader in advising, financing, trading and investing
in fast-growing companies under $1 billion in market
capitalization.
The Company is headquartered in San Francisco, with an additional
office in New York City. As of Sept. 30, 2012, the Company had 29
employees.
MISSION NEWENERGY: All Resolutions Passed at General Meeting
------------------------------------------------------------
Mission NewEnergy Limited advised that at the annual general
meeting held on Nov. 23, 2012, all the resolutions put to vote to
the members were passed on a show of hands, namely the:
(1) adoption of remuneration report;
(2) re-election of Director Arun Bhatnagar;
(3) re-election of Director Admiral (Ret) Tan Sri Dato' Sri
Mohd Anwar Bin Haji Mohd Nor;
(4) the appointment of auditor;
(5) the ratification of prior issue of shares; and
(6) the approval of 10% placement facility.
The following resolutions were also passed at the general meeting:
-- issuance of new notes under the exhange offer;
-- acquisition of shares by SLWI;
-- acquisition of shares by Westcliff Trust;
-- acquisition of shares by Eatswood Trust; and
-- acquisition of shares by NHA.
About Mission NewEnergy
Based in Subiaco, Western Australia, Mission NewEnergy Limited is
a producer of biodiesel that integrates sustainable biodiesel
feedstock cultivation, biodiesel production and wholesale
biodiesel distribution focused on the government mandated markets
of the United States and Europe.
The Company is not operating its biodiesel refining segment. The
refineries are being held in care and maintenance either awaiting
a return to positive operating conditions or the sale of assets.
The Company has materially diminished its Jatropha contract
farming operation and the company is now focused on divesting the
remaining Indian assets. The Company intends to cease all Indian
operations.
The Company's balance sheet at June 30, 2012, showed
A$10.7 million in total assets, A$35.1 million in total
liabilities, resulting in an equity deficiency of A$24.4 million.
Grant Thornton Audit Pty Ltd, in Perth, Australia, expressed
substantial doubt about the Company's ability to continue as a
going concern. The independent auditors noted that the Company
incurred operating cash outflows of A$4.9 million during the year
ended June 30, 2012, and, as of that date, the consolidated
entity's total liabilities exceeded its total assets by
A$24.4 million.
The Company reported a net loss of A$6.1 million on A$38.3 million
of revenue in fiscal 2012, compared with a net loss of
$21.7 million on A$16.4 million of revenue in fiscal 2011.
MISSION NEWENERGY: Convertible Note Exchange Offer Launched
-----------------------------------------------------------
Mission NewEnergy Limited announced it has launched an exchange
offer for all of its outstanding convertible notes. The
completion of the exchange offer is subject to approval of
shareholders.
The New Notes will be on substantially the same terms as the
Existing Notes with the following key differences:
* The New Notes will have no coupon payment;
* Each New Note will convert into 433 ordinary shares in the
Company at a conversion price of $A0.15 per share, to more
closely reflect the current market price of the Company's
shares;
* The New Notes will be forced to convert upon the conversion
of a Significant Noteholing (where Significant Noteholding is
defined as being greater than 50% of outstanding notes); and
* The New Notes will be subject to default upon the sale of a
Material Asset by the Company (where Material Asset is
defined as being greater than US$1 million).
A copy of the announcement is available for free at:
http://is.gd/nrjmoU
About Mission NewEnergy
Based in Subiaco, Western Australia, Mission NewEnergy Limited is
a producer of biodiesel that integrates sustainable biodiesel
feedstock cultivation, biodiesel production and wholesale
biodiesel distribution focused on the government mandated markets
of the United States and Europe.
The Company is not operating its biodiesel refining segment. The
refineries are being held in care and maintenance either awaiting
a return to positive operating conditions or the sale of assets.
The Company has materially diminished its Jatropha contract
farming operation and the company is now focused on divesting the
remaining Indian assets. The Company intends to cease all Indian
operations.
At this point in time, due to failure of material obligations by
PTPN111, the Joint Venture in Indonesia has been terminated. The
Company is reviewing its position in the Joint Venture in
Indonesia and expects that this will result in either the
continuation of the project of the sale of its equity interests.
The Company reported a net loss of A$6.1 million on A$38.3 million
of revenue in fiscal 2012, compared with a net loss of
$21.7 million on A$16.4 million of revenue in fiscal 2011.
The Company's balance sheet at June 30, 2012, showed
A$10.7 million in total assets, A$35.1 million in total
liabilities, resulting in an equity deficiency of A$24.4 million.
Grant Thornton Audit Pty Ltd, in Perth, Australia, expressed
substantial doubt about the Company's ability to continue as a
going concern. The independent auditors noted that the Company
incurred operating cash outflows of A$4.9 million during the year
ended June 30, 2012, and, as of that date, the consolidated
entity's total liabilities exceeded its total assets by
A$24.4 million.
MISSION NEWENERGY: Subsidiary Receives Winding up Petition
----------------------------------------------------------
Mission NewEnergy Limited's wholly owned Malaysian subsidiary
Mission Biofuels Sdn Bhd has been served with a winding up
petition under Section 218(1)(e) & (i) and Section 218(2)(c) of
the Malaysian Companies Act 1965 by KNM Process Systems Sdn Bhd,
the contractor for its second 250,000 tpa biodisel refinery.
The Petition dated Nov. 1, 2012, claims that MBSB is indebted to
KNM for a disputed sum of around A$16.1 million for goods sold and
delivered and works carried out by KNM for MBSB. The winding up
Petition is fixed for hearing on Feb. 4, 2012.
MSBS's solicitors have advised that KNM's Petition is highly
unlikely to succeed. MBSB said it will take all necessary steps
to oppose and set aside the said Petition and is reviewing its
legal options in the light of this Petition.
About Mission NewEnergy
Based in Subiaco, Western Australia, Mission NewEnergy Limited is
a producer of biodiesel that integrates sustainable biodiesel
feedstock cultivation, biodiesel production and wholesale
biodiesel distribution focused on the government mandated markets
of the United States and Europe.
The Company is not operating its biodiesel refining segment. The
refineries are being held in care and maintenance either awaiting
a return to positive operating conditions or the sale of assets.
The Company has materially diminished its Jatropha contract
farming operation and the company is now focused on divesting the
remaining Indian assets. The Company intends to cease all Indian
operations.
At this point in time, due to failure of material obligations by
PTPN111, the Joint Venture in Indonesia has been terminated. The
Company is reviewing its position in the Joint Venture in
Indonesia and expects that this will result in either the
continuation of the project of the sale of its equity interests.
The Company reported a net loss of A$6.1 million on A$38.3 million
of revenue in fiscal 2012, compared with a net loss of
$21.7 million on A$16.4 million of revenue in fiscal 2011.
The Company's balance sheet at June 30, 2012, showed
A$10.7 million in total assets, A$35.1 million in total
liabilities, resulting in an equity deficiency of A$24.4 million.
Grant Thornton Audit Pty Ltd, in Perth, Australia, expressed
substantial doubt about the Company's ability to continue as a
going concern. The independent auditors noted that the Company
incurred operating cash outflows of A$4.9 million during the year
ended June 30, 2012, and, as of that date, the consolidated
entity's total liabilities exceeded its total assets by
A$24.4 million.
MOMENTIVE PERFORMANCE: Incurs $81-Mil. Net Loss in 3rd Quarter
--------------------------------------------------------------
Momentive Performance Materials Inc. filed with the U.S.
Securities and Exchange Commission its quarterly report on Form
10-Q disclosing a net loss of $81 million on $571 million of net
sales for the fiscal three-month period ended Sept. 30, 2012,
compared with a net loss of $32 million on $653 million of net
sales for the same period a year ago.
For the nine months ended Sept. 30, 2012, the Company incurred a
net loss of $234 million on $1.79 billion of net sales, as
compared to a net loss of $45 million on $2.04 billion of net
sales for the same period a year ago.
The Company's balance sheet at Sept. 30, 2012, showed
$2.98 billion in total assets, $3.94 billion in total liabilities,
and a $960 million in total deficit.
"Our third quarter 2012 results reflected continued weak economic
conditions, excess capacity in the silicones industry and
seasonality," said Craig O. Morrison, Chairman, President and CEO.
"Soft demand in Europe and the Asia Pacific region for some of our
higher-margin products, such as those serving the electronics,
semiconductor and commercial construction markets, also negatively
impacted our third quarter 2012 results. In addition, our quartz
business continued to experience a downturn in demand for
semiconductor-related products, which we anticipate to continue
into the fourth quarter of 2012 as quartz customers further reduce
their inventory levels."
"To address the ongoing market volatility, we continue to focus on
the cost and cash actions that we can directly control. Through
September 30, 2012, we have realized approximately $59 million in
cost savings as a result of the Shared Services Agreement with
Momentive Specialty Chemicals Inc. on a run-rate basis since the
program began in late 2010. In addition, in the second quarter of
2012, we announced an incremental $30 million in restructuring
actions, of which we achieved $7 million in the third quarter of
2012. We anticipate fully realizing $43 million of total pro
forma savings that are remaining from the Shared Services
Agreement and the incremental restructuring actions over the next
nine to 15 months."
A copy of the Form 10-Q is available for free at:
http://is.gd/9sEkm6
About Momentive Performance
Momentive Performance Materials, Inc., is a producer of silicones
and silicone derivatives, and is engaged in the development and
manufacture of products derived from quartz and specialty
ceramics. As of Dec. 31, 2008, the Company had 25 production
sites located worldwide, which allows it to produce the majority
of its products locally in the Americas, Europe and Asia.
Momentive's customers include companies in industries, such as
Procter & Gamble, 3M, Goodyear, Unilever, Saint Gobain, Motorola,
L'Oreal, BASF, The Home Depot and Lowe's.
The Company had a net loss of $140 million in 2011, following a
net loss of $63 million in 2010. Net loss in 2009 was
$42 million.
* * *
As reported by the TCR on May 14, 2012, Moody's Investors Service
lowered Momentive Performance Materials Inc.'s Corporate Family
Rating (CFR) and Probability of Default Rating (PDR) to Caa1 from
B3. The action follows the company's weak first quarter results
and expectations for a slower than expected recovery in volumes in
2012.
In the Aug. 15, 2012, edition of the TCR, Standard & Poor's
Ratings Services lowered all of its ratings on MPM by two notches,
including the corporate credit rating to 'CCC' from 'B-'. The
outlook is negative.
"The likelihood that earnings and cash flow will remain very weak
for the next several quarters prompted the downgrade," explained
credit analyst Cynthia Werneth. "In our view, leverage is
unsustainably high, with total adjusted debt to EBITDA above 15x
as of June 30, 2012."
MOMENTIVE SPECIALTY: Reports $364-Mil. Third Quarter Profit
-----------------------------------------------------------
Momentive Specialty Chemicals Inc. filed with the U.S. Securities
and Exchange Commission its quarterly report on Form 10-Q
disclosing net income of $364 million on $1.17 billion of net
sales for the three months ended Sept. 30, 2012, compared with net
income of $39 million on $1.32 billion of net sales for the same
period during the prior year.
For the nine months ended Sept. 30, 2012, the Company reported net
income of $376 million on $3.67 billion of net sales, in
comparison with net income of $165 million on $4.05 billion of net
sales for the same period a year ago.
The Company's balance sheet at Sept. 30, 2012, showed
$3.44 billion in total assets, $4.60 billion in total liabilities
and a $1.16 billion total deficit.
"Our overall results reflected the economic volatility we
experienced in the third quarter of 2012," said Craig O. Morrison,
Chairman, President and CEO. "Our Forest Products business
continues to reflect the improving North American housing climate,
continued year-over-year growth in our formaldehyde business and
strong demand in Latin America. However, declines in our base
epoxy resins and oilfield businesses negatively impacted our
Epoxy, Phenolic and Coatings Division. Our specialty product
portfolio and end market diversity continues to support our long-
term growth plans."
"We continue to make steady progress achieving savings from the
shared services agreement with Momentive Performance Materials
Inc. During the first nine months of 2012, we realized
approximately $19 million in cost savings as a result of the
Shared Services Agreement, bringing our total cumulative savings
to $49 million since the program was initiated in late 2010. We
have also identified $30 million of additional MSC savings from
both the shared services agreement and cost reduction initiatives
that we expect to achieve over the next 12 to 15 months as we
further optimize our manufacturing footprint and enhance our cost
structure."
"We were also pleased to generate $27 million in cash flow from
operations in the first nine months of 2012, a $55 million
improvement compared to the prior year. Going forward, we
continue to focus aggressively on working capital improvements and
expect further improvements for the remainder of 2012."
A copy of the Form 10-Q is available for free at:
http://is.gd/mkOPEp
About Momentive Specialty
Momentive Specialty Chemicals, Inc., headquartered in Columbus,
Ohio, is a leading producer of thermoset resins (epoxy,
formaldehyde and acrylic). The company is also a supplier of
specialty resins for inks and specialty coatings sold to a diverse
customer base as well as a producer of commodities such as
formaldehyde, bisphenol A, epichlorohydrin, versatic acid and
related derivatives.
Momentive Specialty reported net income of $118 million on $5.20
billion of net sales in 2011, compared with net income of $214
million on $4.59 billion of net sales in 2010.
* * *
Momentive Specialty carries a 'B-' issuer credit rating from
Standard & Poor's Ratings Services. It has 'B3' corporate family
and probability of default ratings from Moody's Investors Service.
corporate credit rating from Standard & Poor's.
As reported in the Oct. 27, 2010 edition of TCR, Moody's Investors
Service assigned a 'Caa1' rating to the guaranteed senior secured
second lien notes due 2020 of Momentive Specialty (formerly known
as Hexion Specialty Chemicals Inc.). Proceeds from the notes were
allocated for the repayment of $533 million of guaranteed senior
secured second lien notes due 2014. "With this refinancing Hexion
will have refinanced or extended the maturities on the vast
majority of the debt that was originally slated to mature prior to
2015. There is less than $600 million of this debt remaining,
which should be much easier to for the company to refinance as its
credit metrics improve further," stated John Rogers, Senior Vice
President at Moody's.
MON VIEW: Pa. Revenue Department Has Green Light for Appeal
-----------------------------------------------------------
District Judge Cathy Bissoon granted the Pennsylvania Department
of Revenue's motion for leave to appeal from the Bankruptcy
Court's order denying its motion for judgment on pleadings in a
dispute with Mon View Mining Company.
As reported by the Troubled Company Reporter on Oct. 4, 2012,
Bankruptcy Judge Jeffery A. Deller denied a Motion for Judgment on
the Pleadings filed by the Pennsylvania Department of Revenue in a
Complaint to Determine Tax Liability filed by Mon View Mining.
The judge said Mon View is entitled to produce evidence to the
Court to support its argument that personal property was
transferred in a 2008 asset sale and the realty transfer tax
assessment should not be based on a real property value of
$25,000,000.
The case before the District Court is PENNSYLVANIA DEPARTMENT of
REVENUE, Appellant, v. MON VIEW MINING COMPANY, Appellee, Civil
Action No. 12-1578 (W.D. Pa.). A copy of the District Court's
Nov. 26, 2012 Order is available at http://is.gd/xjcENCfrom
Leagle.com.
About Mon View Mining
Headquartered in Finleyville, Pennsylvania, Mon View Mining
Company filed for Chapter 11 protection (Bankr. W.D. Pa. Case No.
05-50219) on Nov. 22, 2005. Donald R. Calaiaro, Esq., at Calaiaro
& Corbett, P.C., in Pittsburgh, Pennsylvania, serves as the
Debtor's counsel. When the Debtor filed for protection from its
creditors, it estimated $24,001,883 in assets and $10,545,140 in
debts.
On Jan. 3, 2012, the official Committee of Unsecured Creditors
filed its Second Amended Chapter 11 Plan and Second Amended
Disclosure Statement. The Court entered an Order Confirming the
Chapter 11 Plan of the Official Committee of Unsecured Creditors
on April 25, 2012.
MONEYGRAM INT'L: Moody's Affirms 'B1' CFR/PDR; Outlook Stable
-------------------------------------------------------------
Moody's Investors Service affirmed the B1 corporate family and
probability of default ratings ("CFR" and "PDR", respectively) for
MoneyGram International, Inc. and the Ba2 senior secured debt
ratings (issued by MoneyGram Payment Systems Worldwide Inc., a
wholly-owned subsidiary of MoneyGram). The rating outlook was
revised to stable from positive.
Ratings Rationale
The outlook revision to stable reflects Moody's view that the
recent momentum of the money transfer business (up 10% during the
nine months ended September 30, 2012 on a year-over-year basis)
will be tempered over the next year by significant pricing cuts in
key corridors by the industry leader, The Western Union Company.
This competitive pricing pressure combined with the recent $100
million settlement with the U.S. Attorney's Office for the Middle
District of Pennsylvania over consumer fraud scams will likely
prevent a meaningful reduction of financial leverage over the next
year.
Moody's expects that adjusted debt to EBITDA will remain in the 4
times range through the end of 2013, which is consistent with
peers in the B1 rating category. The stable outlook also reflects
Moody's view that even with likely price reductions, MoneyGram
should be able to generate at least low single digit annual
revenue and profit growth in 2013 given its solid market position,
expanding global presence, and growing migrant population. Moody's
projects mid to high single digit annual growth of global
remittance flows to developing countries over the next several
years.
The B1 CFR could be upgraded if it becomes apparent that MoneyGram
will achieve and maintain debt to EBITDA at or below 3.5 times for
an extended period of time, with solid and growing free cash flow
from the core money transfer business producing retained cash flow
to net debt of at least 20%. The ratings could be lowered with
declines in the core money transfer business revenue or
profitability, or if adjusted debt to EBITDA exceeds 5 times on a
sustained basis.
The following ratings were affirmed:
Corporate Family Rating -- B1
Probability of Default Rating -- B1
$150 Million Senior Secured Revolving Credit Facility due 2016
-- Ba2 (LGD 2 -- 24%)
$340 Million Senior Secured Term Loan due 2017 -- Ba2 (LGD 2 -
24%)
The principal methodology used in rating MoneyGram International
was the Global Business & Consumer Service Industry Methodology
published in October 2010. Other methodologies used include Loss
Given Default for Speculative-Grade Non-Financial Companies in the
U.S., Canada and EMEA published in June 2009.
MORGANS HOTEL: David Hamamoto Discloses 11.1% Equity Stake
----------------------------------------------------------
In an amended Schedule 13D filing with the U.S. Securities and
Exchange Commission, David T. Hamamoto disclosed that, as of
Nov. 20, 2012, he beneficially owns 3,638,619 shares of common
stock of Morgans Hotel Group Co. representing 11.1% of the shares
outstanding. Mr. Hamamoto previously reported beneficial
ownership of 3,315,402 common shares or a 10.7% equity stake as of
March 15, 2011. A copy of the amended filing is available for
free at http://is.gd/OEvbS3
About Morgans Hotel Group
Based in New York, Morgans Hotel Group Co. (Nasdaq: MHGC) --
http://www.morganshotelgroup.com/-- is widely credited as the
creator of the first "boutique" hotel and a continuing leader of
the hotel industry's boutique sector. Morgans Hotel Group
operates and owns, or has an ownership interest in, Morgans,
Royalton and Hudson in New York, Delano and Shore Club in South
Beach, Mondrian in Los Angeles and South Beach, Clift in San
Francisco, Ames in Boston, and Sanderson and St Martins Lane in
London. Morgans Hotel Group and an equity partner also own the
Hard Rock Hotel & Casino in Las Vegas and related assets. Morgans
Hotel Group also manages hotels in Isla Verde, Puerto Rico and
Playa del Carmen, Mexico. Morgans Hotel Group has other property
transactions in various stages of completion, including projects
in SoHo, New York and Palm Springs, California.
The Company reported a net loss of $87.95 million in 2011, a net
loss of $83.64 million in 2010, and a net loss of $101.60 million
in 2009.
The Company's balance sheet at Sept. 30, 2012, showed $577.02
million in total assets, $702.21 million in total liabilities,
$6.39 million in redeemable noncontrolling interest, and a
$131.58 million total deficit.
MUSCLEPHARM CORP: Effects a 1-for-850 Reverse Stock Split
---------------------------------------------------------
MusclePharm Corporation announced a 1-for-850 reverse split of the
Company's issued and outstanding common stock and a decrease in
the number of its authorized shares of common stock. The reverse
stock split is effective prior to the market open on Nov. 26,
2012.
"We have elected to effect a reverse stock split to help
MusclePharm seek to meet the listing requirements of a stock
exchange," said Brad J. Pyatt, chief executive officer and
president of MusclePharm. "We believe that a stock exchange
listing and the reverse stock split can broaden our stockholder
base and increase the appeal of our common stock to institutional
investors. Further, these actions should provide benefits to our
stockholders by improving trading liquidity in the stock, thereby
enhancing long-term stockholder value."
Each stockholder's relative percentage ownership interest in
MusclePharm and the proportional voting power remains unchanged
after the reverse stock split. In addition, the rights and
privileges of the holders of the Company's common stock are
unaffected by the reverse stock split. This reverse stock split
will be made pursuant to a Certificate of Change filed with the
State of Nevada.
As of the effective date, every 850 shares of issued and
outstanding common stock will be converted into one share of
common stock, with all fractional shares being rounded up to the
nearest whole share. The reverse stock split will reduce the
number of shares of issued and outstanding common stock from
approximately 2,360 million pre-split to approximately 2.8 million
post-split. Proportional adjustments will be made to
MusclePharm's warrants, stock options, and equity-compensation
plans. Additionally, the number of authorized shares of common
stock will be reduced from 2.5 billion to 100 million. The
reverse stock split will have no effect on the Company's
authorized shares of preferred stock.
The Company's common stock will trade under a new CUSIP number
(627335201). The Company's ticker symbol will remain unchanged,
although a "D" will be placed on the MSLP ticker symbol (MSLPD)
for 20 business days to alert the public about the reverse stock
split.
It is not necessary for stockholders of the Company to exchange
their existing stock certificates for new stock certificates of
the Company in connection with the reverse stock split, although
stockholders may do so if they wish. Please direct any questions
you might have concerning the reverse stock split to your broker
or the Company's transfer agent, Corporate Stock Transfer at (303)
282-4800.
About MusclePharm
Headquartered in Denver, Colorado, MusclePharm Corporation
(OTC BB: MSLP) -- http://www.muslepharm.com/-- is a healthy life-
style company that develops and manufactures a full line of
National Science Foundation approved nutritional supplements that
are 100% free of banned substances. MusclePharm is sold in over
120 countries and available in over 5,000 U.S. retail outlets,
including GNC and Vitamin Shoppe. MusclePharm products are also
sold in over 100 online stores, including bodybuilding.com,
Amazon.com and Vitacost.com.
The Company reported a net loss of $23.28 million in 2011,
compared with a net loss of $19.56 million in 2010.
The Company's balance sheet at Sept. 30, 2012, showed
$7.81 million in total assets, $15.10 million in total
liabilities, and a $7.29 million total stockholders' deficit.
In the auditors' report accompanying the consolidated financial
statements for the year ended Dec. 31, 2011, Berman & Company,
P.A., in Boca Raton, Florida, expressed substantial doubt about
the Company's ability to continue as a going concern. The
independent auditors noted that the Company has a net loss of
$23,280,950 and net cash used in operations of $5,801,761 for the
year ended Dec. 31, 2011; and has a working capital deficit of
$13,693,267, and a stockholders' deficit of $12,971,212 at
Dec. 31, 2011.
MORGANS HOTEL: David Hamamoto Discloses 11.1% Equity Stake
----------------------------------------------------------
In an amended Schedule 13D filing with the U.S. Securities and
Exchange Commission, David T. Hamamoto disclosed that, as of
Nov. 20, 2012, he beneficially owns 3,638,619 shares of common
stock of Morgans Hotel Group Co. representing 11.1% of the shares
outstanding. Mr. Hamamoto previously reported beneficial
ownership of 3,315,402 common shares or a 10.7% equity stake as of
March 15, 2011. A copy of the amended filing is available for
free at http://is.gd/OEvbS3
About Morgans Hotel Group
Based in New York, Morgans Hotel Group Co. (Nasdaq: MHGC) --
http://www.morganshotelgroup.com/-- is widely credited as the
creator of the first "boutique" hotel and a continuing leader of
the hotel industry's boutique sector. Morgans Hotel Group
operates and owns, or has an ownership interest in, Morgans,
Royalton and Hudson in New York, Delano and Shore Club in South
Beach, Mondrian in Los Angeles and South Beach, Clift in San
Francisco, Ames in Boston, and Sanderson and St Martins Lane in
London. Morgans Hotel Group and an equity partner also own the
Hard Rock Hotel & Casino in Las Vegas and related assets. Morgans
Hotel Group also manages hotels in Isla Verde, Puerto Rico and
Playa del Carmen, Mexico. Morgans Hotel Group has other property
transactions in various stages of completion, including projects
in SoHo, New York and Palm Springs, California.
The Company reported a net loss of $87.95 million in 2011, a net
loss of $83.64 million in 2010, and a net loss of $101.60 million
in 2009.
The Company's balance sheet at Sept. 30, 2012, showed $577.02
million in total assets, $702.21 million in total liabilities,
$6.39 million in redeemable noncontrolling interest and a
$131.58 million total deficit.
NEXSTAR BROADCASTING: Announces New Cash Dividend Policy
--------------------------------------------------------
Nexstar Broadcasting Group, Inc., announced a new dividend policy
pursuant to which the Company's board of directors has authorized
the Company to declare a total annual cash dividend with respect
to its shares of Class A common stock and Class B common stock of
$0.48 per share in equal quarterly installments of $0.12 per
share, concurrent with the closing of the acquisition of the
assets being acquired by Nexstar Broadcasting as part of the
Newport Acquisition and entry into the new senior secured credit
facilities in connection with the Newport Acquisition. The
acquisition of the assets being acquired by Nexstar Broadcasting
as part of the Newport Acquisition is expected to close in
December 2012.
Future cash dividends, if any, will be at the discretion of the
Company's board of directors, can be changed or discontinued at
any time and will be subject to limitations in any then existing
debt agreements applicable to the Company. Dividend
determinations (including the record date and date of payment)
will depend upon, among other things, the Company's future
operations and earnings, capital requirements and surplus, general
financial condition, contractual restrictions and other factors as
the board of directors may deem relevant. The first quarterly
cash dividend is expected to be paid, subject to declaration by
the board of directors, in the first quarter of 2013.
About Nexstar Broadcasting Group
Irving, Texas-based Nexstar Broadcasting Group Inc. currently
owns, operates, programs or provides sales and other services to
62 television stations in 34 markets in the states of Illinois,
Indiana, Maryland, Missouri, Montana, Texas, Pennsylvania,
Louisiana, Arkansas, Alabama, New York, Rhode Island, Utah and
Florida. Nexstar's television station group includes affiliates
of NBC, CBS, ABC, FOX, MyNetworkTV and The CW and reaches
approximately 13 million viewers or approximately 11.5% of all
U.S. television households.
The Company reported a net loss of $11.89 million in 2011, a net
loss of $1.81 million in 2010, and a net loss of $12.61 million
in 2009.
The Company's balance sheet at Sept. 30, 2012, showed
$611.35 million in total assets, $771.63 million in total
liabilities and a $160.27 million total stockholders' deficit.
* * *
As reported by the TCR on Oct. 26, 2012, Standard & Poor's Ratings
Services raised its corporate credit rating on Irving, Texas-based
Nexstar Broadcasting Group Inc. and on certain subsidiaries to
'B+' from 'B'. "The rating action reflects our view that the
stations that Nexstar will acquire from Newport will improve the
company's business risk profile and that trailing-eight-quarter
leverage will improve to 6x or less over the intermediate term,"
said Standard & Poor's credit analyst Daniel Haines.
In the Oct. 26, 2012, edition of the TCR, Moody's Investors
Service upgraded the corporate family and probability of default
ratings of Nexstar Broadcasting, Inc. (Nexstar) to B2 from B3.
The upgrade and positive outlook incorporate expectations for
continued improvement in the credit profile resulting from both
the transaction and Nexstar's operating performance.
NEXSTAR BROADCASTING: ABRY Funds to Resell 8MM Class A Shares
-------------------------------------------------------------
Nexstar Broadcasting Group, Inc., announced that selling
stockholders, funds affiliated with ABRY Partners, LLC, intend to
offer for sale in an underwritten offering 8 million shares of
Class A common stock of the Company. In addition, the selling
stockholders have granted the underwriters a 30-day option to
purchase up to an additional 1.2 million shares of Class A common
stock on the same terms and conditions. Credit Suisse Securities
(USA) LLC, Wells Fargo Securities, LLC, and UBS Securities LLC are
the joint book-running managers of the offering. RBC Capital
Markets, LLC, and Evercore Group L.L.C. are acting as co-managers
of the offering.
The offering consists entirely of secondary shares to be sold by
the selling stockholders. The Company will not sell any shares in
the offering and will not receive any proceeds from the offering.
The offering is subject to market conditions, and there can be no
assurance as to whether or when the offering may be completed, or
as to the actual size or terms of the offering.
A shelf registration statement (including prospectus) relating to
the shares has been declared effective by the Securities and
Exchange Commission.
About Nexstar Broadcasting Group
Irving, Texas-based Nexstar Broadcasting Group Inc. currently
owns, operates, programs or provides sales and other services to
62 television stations in 34 markets in the states of Illinois,
Indiana, Maryland, Missouri, Montana, Texas, Pennsylvania,
Louisiana, Arkansas, Alabama, New York, Rhode Island, Utah and
Florida. Nexstar's television station group includes affiliates
of NBC, CBS, ABC, FOX, MyNetworkTV and The CW and reaches
approximately 13 million viewers or approximately 11.5% of all
U.S. television households.
The Company reported a net loss of $11.89 million in 2011, a net
loss of $1.81 million in 2010, and a net loss of $12.61 million in
2009.
The Company's balance sheet at Sept. 30, 2012, showed
$611.35 million in total assets, $771.63 million in total
liabilities and a $160.27 million total stockholders' deficit.
* * *
As reported by the TCR on Oct. 26, 2012, Standard & Poor's Ratings
Services raised its corporate credit rating on Irving, Texas-based
Nexstar Broadcasting Group Inc. and on certain subsidiaries to
'B+' from 'B'. "The rating action reflects our view that the
stations that Nexstar will acquire from Newport will improve the
company's business risk profile and that trailing-eight-quarter
leverage will improve to 6x or less over the intermediate term,"
said Standard & Poor's credit analyst Daniel Haines.
In the Oct. 26, 2012, edition of the TCR, Moody's Investors
Service upgraded the corporate family and probability of default
ratings of Nexstar Broadcasting, Inc. (Nexstar) to B2 from B3.
The upgrade and positive outlook incorporate expectations for
continued improvement in the credit profile resulting from both
the transaction and Nexstar's operating performance.
OAKDALE, CA: Moody's Confirms 'B1' Rating on Revenue Bonds
----------------------------------------------------------
Moody's Investors Service has confirmed the B1 rating on the City
of Oakdale's (CA) 2002A Sewer Enterprise Revenue bonds and
assigned a negative rating outlook. The rating on the bonds was
previously under review for downgrade. The bonds are secured by
the installment payments made by the City pursuant to the
Installment Sale Agreement between the Oakdale Public Financing
Authority and the City of Oakdale, California. The net revenues of
the City's sewer system are pledged to the payment of the
installment payments.
Rating Rationale
On September 7, 2012, the rating was placed under review for
downgrade following the system's August 2012 default on the
principal portion of the first debt service payment on a $13
million unrated state revolving fund (SRF) loan from the
California State Water Resources Control Board (SWRCB). The loan
is secured on a parity basis with the Installment Sale Agreement
which payments are pledged to pay the Moody's rated Oakdale Public
Financing Authority's 2002A Revenue Bonds.
The B1 rating incorporates the system's weak debt service
coverage, the August 2012 default on the parity SRF loan, narrow
reserves, history of management missteps, and the continued
uncertainty surrounding future rate increases and the outcome of
negotiations with the SWRCB on the restructuring of the SRF loan.
Additionally the rating takes into account the city's failure to
comply with certain provisions of governing debt documents.
The negative outlook reflects the myriad of challenges and
uncertainties facing the system in achieving healthy operating
performance as well as the likely longer than previously expected
timeframe for this to occur.
Strengths
- History of rate increases
- Low customer concentration
- Commencement of rate study to determine appropriate rates
Challenges
- Currently unmanageable debt burden absent a restructuring of
the SRF loan and increase in rates
- Weak but improving reserves and system liquidity
- Weak management
- Poor rate implementation and collection processes
- Customers' slightly below average socioeconomic profile and
high unemployment in service area
Outlook
The negative outlook for the B1 rating, in addition to the reasons
cited earlier in the report, has been assigned based upon the
uncertain recovery rate that will result from restructuring the
State Loan, and the possibility that rate increases in will be
insufficient to return the sewer enterprise to a healthy financial
performance. An obligation rated B1 is considered speculative and
the rating implies an expected recovery rate of approximately 99%
to 100%. Likely recovery rates below 99% would result in further
downward pressure on the rating.
What Could Make the Rating Go UP:
- Ability of system to implement rate increases and restructure
State Loans in order to reach rate covenant
- Significantly bolstered reserve position
- Significant rebound in usage and revenues
What Could Make the Rating Go DOWN:
- Inability of system to implement rate increases sufficient to
pay total debt service
- Erosion of liquidity and reserves
- Inability to negotiate State Loan obligations at less than a
99% recovery rate
Rating Methodology
The principal methodology used in this rating was Analytical
Framework For Water And Sewer System Ratings published in August
1999.
OVERSEAS SHIPHOLDING: Delays Second Quarter Form 10-Q
-----------------------------------------------------
Overseas Shipholding Group, Inc., informed the U.S. Securities and
Exchange Commission that it will be late in filing its quarterly
report on Form 10-Q for the period ended Sept. 30, 2012.
The Audit Committee of the Board of Directors of Overseas
Shipholding, on the recommendation of management, has concluded
that the Company's previously issued financial statements for at
least the three years ended Dec. 31, 2011, and associated interim
periods, and for the fiscal quarters ended March 31 and June 30,
2012, should no longer be relied upon. The Company is continuing
its review processes, including determining whether a restatement
of those financial statements may be required, and the nature and
amount of any potential restatement. The time frame for
completing this review is not currently known. However, it is
anticipated to be beyond the Nov. 14, 2012, permitted extension of
the prescribed due date for the Form 10-Q.
About Overseas Shipholding
Overseas Shipholding Group, Inc., and 180 affiliates filed
voluntary Chapter 11 petitions (Bankr. D. Del. Lead Case No.
12-20000) on Nov. 14, 2012.
OSG, headquartered in New York City, NY, is one of the largest
publicly traded tanker companies in the world, engaged primarily
in the ocean transportation of crude oil and petroleum products.
OSG, owner or operator of 111 vessels that transport oil and
petroleum products throughout the world, said in a statement that
it intends to use the Chapter 11 process to significantly reduce
its debt profile, reorganize other financial obligations and
create a strong financial foundation for the Company's future.
Greylock Partners LLC Chief Executive John Ray serves as chief
reorganization officer. Cleary Gottlieb Steen & Hamilton LLP
serves as OSG's Chapter 11 counsel, while Chilmark Partners LLC
serves as financial adviser.
The Debtors disclosed $4.15 billion in assets and $2.67 billion in
liabilities as of June 30, 2012. Liabilities include $1.49
billion on an unsecured credit agreement with DNB Bank ASA as
agent. In addition to the secured Chinese loan, there is $518
million in unsecured notes and debentures plus $267 million on
ship mortgages taken down to finance nine vessels.
PACIFIC ETHANOL: Incurs $9.7-Mil. Net Loss in Third Quarter
-----------------------------------------------------------
Pacific Ethanol, Inc., filed its quarterly report on Form 10-Q,
reporting a net loss of $9.7 million on $215.9 million of net
sales for the three months ended Sept. 30, 2012, compared with net
income of $4.6 million on $271.6 million of net sales for the same
period last year.
For the nine months ended Sept. 30, 2012, the Company reported a
net loss of $33.7 million on $619.0 million of net sales, compared
with a net loss of $4.8 million on $659.4 million of net sales for
the same period of 2011.
Up to $49.5 Million in Debt
According to the regulatory filing, in July 2012, the Company
extended to June 30, 2016, the maturity date in respect of
$46.8 million of the Plant Owners [the four Pacific Ethanol plants
and their holding Company, PEHC]'S term and revolving debt. The
Plant Owners' remaining $39.5 million in debt, plus up to an
additional $10.0 million in revolving debt, is due on June 25,
2013. The Plant Owners do not and will likely not have sufficient
funds to repay the up to $49.5 million in debt on or prior to its
maturity.
"We are therefore attempting to restructure the debt or raise
additional capital. If we are unable to timely restructure the
debt or raise sufficient capital to repay the debt, we will be in
default on that debt and in cross-default on the $46.8 million in
debt extended to June 30, 2016, all of which totaling
$91.3 million plus up to an additional $10.0 million in revolving
debt, will be accelerated and immediately due and payable on
June 25, 2013.
"Our inability to restructure or repay the debt prior to its
maturity will likely have a material adverse effect on us and our
direct and indirect subsidiaries, including Kinergy and the Plant
Owners, and on each Plant Owner's ability to continue as a going
concern. For example, the Plant Owners may be forced to suspend
or curtail their operations and possibly seek protection under the
United States Bankruptcy Code. A material adverse effect on the
Plant Owners would likewise materially and adversely harm our
business, results of operations and future prospects."
A copy of the Form 10-Q is available at http://is.gd/KlxwWr
Sacramento, Calif.-based Pacific Ethanol, Inc. (NASDAQ: PEIX)
markets and produces low-carbon renewable fuels in the Western
United States. Pacific Ethanol also sells co-products, including
wet distillers grain ("WDG"), a nutritional animal feed.
PALATIN TECHNOLOGIES: Incurs $10.5-Mil. Net Loss in Sept. 30 Qtr.
-----------------------------------------------------------------
Palatin Technologies, Inc., filed its quarterly report on Form 10-
Q, reporting a net loss of $10.5 million for the three months
ended Sept. 30, 2012, compared with a net loss of $3.4 million for
the prior fiscal period.
For the three months ended Sept. 30, 2012, the Company recognized
$3,806 in revenue compared to $27,217 for the three months ended
Sept. 30, 2011, pursuant to the Company's license agreement with
AstraZeneca. Revenue for the three months ended Sept. 30, 2012,
and 2011 consisted entirely of reimbursement of development costs
and per-employee compensation, earned at the contractual rate.
Results for the 2012 quarter include a non-operating expense of
$7,069,165 associated with the increase in fair value of warrants.
According to the regulatory filing, because there were not
sufficient authorized shares to cover all the outstanding Series B
2012 warrants in the private placement offering as of closing,
under ASC 815, "Derivatives and Hedging," the portion of the
warrants above the then authorized level of common stock was
required to be classified as a liability and carried at fair value
on the Company's balance sheet. The fair value was calculated by
multiplying the number of shares underlying the Series B 2012
warrants above the then authorized level of the Company's common
stock by the closing price of its common stock less the exercise
price of $0.01 per share. The warrants were liability classified
through Sept. 27, 2012, at which time the then fair value of the
warrant liability was reclassified into stockholders' equity upon
stockholder approval of the increase in authorized common stock.
The increase in fair value, as a result of the Company's common
stock increasing from $0.50 per share at date of issuance to $0.71
per share upon shareholder approval, of $7,069,165 has been
recorded as a non-operating expense.
The Company's balance sheet at Sept. 30, 2012, showed
$34.7 million in total assets, $1.7 million in total liabilities,
and stockholders' equity of $33.0 million.
A copy of the Form 10-Q is available at http://is.gd/RTAwJq
About Palatin Technologies
Palatin Technologies, Inc., headquartered in Cranbury, New Jersey,
is a biopharmaceutical company developing targeted, receptor-
specific peptide therapeutics for the treatment of diseases with
significant unmet medical need and commercial potential. The
Company's primary product in clinical development is bremelanotide
for the treatment of female sexual dysfunction (FSD). In
addition, the Company has drug candidates or development programs
for obesity, erectile dysfunction, pulmonary diseases,
cardiovascular diseases and inflammatory diseases.
On July 3, 2012, the Company closed on a private placement of
3,873,000 shares of its common stock, Series A 2012 warrants to
purchase up to 31,988,151 shares of its common stock, and Series B
2012 warrants to purchase up to 35,488,380 shares of its common
stock. Aggregate gross proceeds to the Company were $35,000,000,
with net proceeds, after deducting offering expenses, of
$34,407,446.
On Sept. 7, 2012, at a special meeting the Company's stockholders
voted to increase the Company's authorized common stock from
100,000,000 to 200,000,000 shares, and the Company filed a
certificate of amendment with the Secretary of State of Delaware
the same day. This satisfied certain contractual obligations
relating to the Series B 2012 warrants in the Company's 2012
private placement, so that interest will not be payable on the
value of the Series B 2012 warrants and the Company will not be
required to redeem the Series B 2012 warrants for failure to
increase the number of authorized shares.
* * *
As reported in the TCR on Sept. 13, 2012, KPMG LLP, in
Philadelphia, Pennsylvania, expressed substantial doubt about
Palatin's ability to continue as a going concern. The independent
auditors noted that he Company has incurred recurring net losses
and negative cash flows from operations and will require
substantial additional financing to continue to fund
its planned development activities. "In July 2012 the Company
closed on a $35,000,000 private placement. In connection
therewith, the Company has certain contractual obligations in the
event that the number of its authorized shares of common stock is
not increased by June 30, 2013, including an obligation to redeem
certain warrants upon request by the investors at the then fair
value of the underlying common stock. These conditions raise
substantial doubt about its ability to continue as a going
concern."
PARKERVISION INC: Incurs $5.0-Mil. Net Loss in Third Quarter
------------------------------------------------------------
ParkerVision, Inc., filed its quarterly report on Form 10-Q,
reporting a net loss of $5.0 million for the three months ended
Sept. 30, 2012, compared with a net loss of $3.8 million for the
same period last year.
For the nine months ended Sept. 30, 2012, the Company had a net
loss of $14.1 million, compared with a net loss of $10.7 million
for the same period of 2011.
The Company had no product or royalty revenue for the three or
nine months ended Sept. 30, 2012, or 2011.
The Company's balance sheet at Sept. 30, 2012, showed
$23.8 million in total assets, $2.3 million in total liabilities,
and stockholders' equity of $21.5 million.
The Company does not expect to generate revenue for 2012. The
Company expects that its continued losses and use of cash will be
funded from the Company's cash, cash equivalents and available for
sale securities of $13.4 million at Sept. 30, 2012. "These
resources will be sufficient to support our liquidity requirements
through 2012; however, these resources may not be sufficient to
support our liquidity requirements for the next twelve months and
beyond without further cost containment measures that, if
implemented, may jeopardize our future growth plans."
A copy of the Form 10-Q is available at http://is.gd/QgYL9I
About ParkerVision Inc.
Jacksonville, Florida-based ParkerVision, Inc., is in the business
of innovating fundamental wireless technologies. The Company
designs, develops and market its proprietary radio frequency
("RF") technologies and products for use in semiconductor circuits
for wireless communication products. Since 2005, the Company has
generated no product or royalty revenue from its wireless
technologies. The Company is heavily reliant on its relationship
with VIA Telecom, Inc., since its RF transmit product interfaces
directly to VIA's CDMA baseband processors. The Company has been
working with one of VIA's largest original equipment manufacturer
("OEM") mobile handset customers on the design and test of a
handset solution incorporating the Company's technology, the
successful completion of which, the Company believes, will lead to
the incorporation of its technology into one or more of this OEM's
commercial products.
* * *
As reported in the TCR on April 10, 2012, PricewaterhouseCoopers
LLP, in Jacksonville, Florida, expressed substantial doubt about
ParkerVision's ability to continue as a going concern, following
the Company's results for the fiscal year ended Dec. 31, 2011.
The independent auditors noted that the Company has suffered
recurring losses from operations.
PATRIOT COAL: Shows Futility of Wresting Cases Away From NY
-----------------------------------------------------------
Bankruptcy Judge Shelley Chapman in New York transferred venue of
the Patriot Coal Corp. reorganization to St. Louis this week.
Bill Rochelle, the bankruptcy columnist for Bloomberg News, noted
that Judge Chapman, saying she had "considerable regret" about the
move, really had no choice.
Patriot incorporated two subsidiaries in New York on the eve of
bankruptcy. Otherwise, there were no venue "hooks" in New York.
The Bloomberg report relates that venue in New York was
technically correct because the state of incorporation for even a
small subsidiary is a sufficient basis for an entire corporate
enterprise to file bankruptcy. Had Judge Chapman retained the
case because venue was technically correct, there might have been
an outcry of protest from lawyers and judges elsewhere who are
jealous of New York and Delaware for their ability to attract and
retain the largest bankruptcies. There even might have been a
response by Congress in the long-simmering debate about whether
liberal bankruptcy venue rules are being abused.
The report notes that if Judge Chapman kept the Patriot case, any
company on earth would have been able to manufacture venue in New
York, Delaware, or any other seemingly favorable forum by simply
incorporating a tiny subsidiary on the eve of bankruptcy.
According to the report, reading the opinion leaves the impression
that longstanding incorporation of a small subsidiary in New York
would have led to a different result, even though there were no
substantial assets and no operations in Manhattan. Judge Chapman
was impressed with how most creditors aside from the mine workers'
union preferred having the bankruptcy in New York.
The report relates that Judge Chapman's opinion plays into the
hands of those who believe venue rules in bankruptcy should be
tightened because it demonstrates the near impossibility of having
venue transferred away from New York. In June, Bankruptcy Judge
Robert E. Gerber in Manhattan "reluctantly" moved the prepackaged
Houghton Mifflin Harcourt Publishing Co. reorganization to Boston,
saying he had no discretion to retain the case. Judge Gerber even
said he was "perplexed" why the U.S. Trustee sought to transfer
venue.
The two cases together show the virtual futility of trying to move
a case when creditors support venue in New York or Delaware. The
results in Patriot and Houghton Mifflin are good news for the
inner circle of bankruptcy professionals and ammunition for those
who believe major companies should undergo reorganization closer
to home.
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 U.S. Trustee appointed a seven-member creditors committee.
PATRIOT COAL: Seeks Approval of Selenium Cleanup Accord
-------------------------------------------------------
Joseph Checkler, writing for Dow Jones' Daily Bankruptcy Review,
reports that Patriot Coal Corp. on Tuesday sought bankruptcy-court
approval of a deal with environmental groups that gives the
company more time to comply with West Virginia court orders to
clean up water pollution caused by mountain removal mining.
According to DBR, Patriot said in a filing with U.S. Bankruptcy
Court in Manhattan that the deal pushes back a key deadline to
clean up one of its facilities to Aug. 1, 2014, from May 1, 2013.
Another part of the settlement will "systematically reduce"
Patriot's large-scale surface mining activities, which can cause
large discharges of selenium that creates groundwater pollution.
The settlement was reached earlier this month, but Patriot needs
bankruptcy-court approval before it can move on with asking a West
Virginia court to approve the deal.
The report notes the environmental groups suing Patriot -- Ohio
Valley Environmental Coalition, Inc., West Virginia Highlands
Conservancy Inc. and Sierra Club -- had previously accused Patriot
of trying to shirk its environmental obligations. Patriot, which
will pay the groups' legal fees as part of the settlement, has
spent $70 million on its selenium-treatment obligations and denied
the groups' charges.
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 U.S. Trustee appointed a seven-member creditors committee.
On Nov. 27, 2012, the New York bankruptcy judge moved Patriot's
bankruptcy case to St. Louis.
PINNACLE AIRLINES: OKs Extension of Plan Filing Until Dec. 30
-------------------------------------------------------------
Pinnacle Airlines Corp., and Delta Air Lines, Inc., entered into a
Third Amendment to Senior Secured Super-Priority Debtor-in-
Possession Credit Agreement pursuant to which the Credit Agreement
was modified to extend the date by which the Company must file a
Plan of Reorganization and disclosure statement that are
reasonably acceptable to Delta from Nov. 12, 2012, (225 days after
the commencement of the Company's bankruptcy proceeding) to a date
which is no later than the earlier of (i) thirty (30) days after
entry of a final order by the Bankruptcy Court granting the
Company's Section 1113 motions or (ii) Dec. 30, 2012.
About Pinnacle Airlines
Pinnacle Airlines Corp. (NASDAQ: PNCL) -- http://www.pncl.com/--
a $1 billion airline holding company with 7,800 employees, is the
parent company of Pinnacle Airlines, Inc.; Mesaba Aviation, Inc.;
and Colgan Air, Inc. Flying as Delta Connection, United Express
and US Airways Express, Pinnacle Airlines Corp. operating
subsidiaries operate 199 regional jets and 80 turboprops on more
than 1,540 daily flights to 188 cities and towns in the United
States, Canada, Mexico and Belize. Corporate offices are located
in Memphis, Tenn., and hub operations are located at 11 major U.S.
airports.
Pinnacle Airlines Inc. and its affiliates, including Colgan Air,
Mesaba Aviation Inc., Pinnacle Airlines Corp., and Pinnacle East
Coast Operations Inc. filed for Chapter 11 bankruptcy (Bankr.
S.D.N.Y. Lead Case No. 12-11343) on April 1, 2012.
Judge Robert E. Gerber presides over the case. Lawyers at Davis
Polk & Wardwell LLP, and Akin Gump Strauss Hauer & Feld LLP serve
as the Debtors' counsel. Barclays Capital and Seabury Group LLC
serve as the Debtors' financial advisors. Epiq Systems Bankruptcy
Solutions serves as the claims and noticing agent. The petition
was signed by John Spanjers, executive vice president and chief
operating officer.
Pinnacle Airlines' balance sheet at Sept. 30, 2011, showed $1.53
billion in total assets, $1.42 billion in total liabilities and
$112.31 million in total stockholders' equity. Debtor-affiliate
Colgan Air, Inc. disclosed $574,482,867 in assets and $479,708,060
in liabilities as of the Chapter 11 filing.
Delta Air Lines, Inc., the Debtors' major customer and post-
petition lender, is represented by David R. Seligman, Esq., at
Kirkland & Ellis LLP.
The official committee of unsecured creditors tapped Morrison &
Foerster LLP as its counsel, and Imperial Capital, LLC, as
financial advisors.
Pinnacle has the exclusive right to propose a reorganization plan
until Jan. 25.
PORTER BANCORP: Files Form 10-Q, Incurs $27.7MM Net Loss in Q3
--------------------------------------------------------------
Porter Bancorp, Inc., filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $27.73 million on $10.13 million of net interest income for the
three months ended Sept. 30, 2012, compared with a net loss of
$12.16 million on $12.65 million of net interest income for the
same period during the prior year.
For the nine months ended Sept. 30, 2012, the Company reported a
net loss of $26.07 million on $32.38 million of net interest
income, as compared to a net loss of 51.35 million on $39.86
million of net interest income for the same period a year ago.
The Company reported a net loss of $107.31 million in 2011,
compared with a net loss of $4.38 million in 2010.
The Company's balance sheet at Sept. 30, 2012, showed $1.28
billion in total assets, $1.23 billion in total liabilities and
$54.98 million in total stockholders' equity.
A copy of the Form 10-Q is available for free at:
http://is.gd/QoChbX
About Porter Bancorp
Porter Bancorp, Inc., is a bank holding company headquartered in
Louisville, Kentucky. Through its wholly-owned subsidiary PBI
Bank, the Company operates 18 full-service banking offices in
twelve counties in Kentucky.
Crowe Horwath, LLP, in Louisville, Kentucky, audited Porter
Bancorp's financial statements for 2011. The independent auditors
said that the Company has incurred substantial losses in 2011,
largely as a result of asset impairments. "In addition, the
Company's bank subsidiary is not in compliance with a regulatory
enforcement order issued by its primary federal regulator
requiring, among other things, increased minimum regulatory
capital ratios. Additional significant asset impairments or
continued failure to comply with the regulatory enforcement order
may result in additional adverse regulatory action."
PROGEN PHARMACEUTICALS: Incurs A$3.4-Mil. Net Loss in Fiscal 2012
-----------------------------------------------------------------
PKF O'Connor Davies, in New York, expressed substantial doubt
about Progen Pharmaceuticals Limited's ability to continue as a
going concern following their audit of the Company's financial
statements for the fiscal year ended June 30, 2012.
As described in Note 2 to the financial statements, current cash
inflows are not sufficient to continue to fund operations and
based on current and projected expenditure levels required to meet
minimum commitments and operating expenses management anticipates
that a capital raising may be required to continue to fund
operations.
The Company reported a net loss of A$3.4 million on A$2.8 million
of total revenue from continuing operations in fiscal 2012,
compared with a net loss of A$6.1 million on A$3.6 million of
total revenue from continuing operations in fiscal 2011.
The Company's balance sheet at June 30, 2012, showed A$7.4 million
in total assets, A$1.7 million in total liabilities, and equity of
A$5.7 million.
A copy of the Form 20-F is available at http://is.gd/GVZJ8T
A copy of the Consolidated Financial Statements for the fiscal
year ended June 30, 2012, is available at http://is.gd/zLQiLS
About Progen Pharmaceuticals
Headquartered in Brisbane, Australia, Progen Pharmaceuticals
Limited (ASX: PGL; OTC: PGLA) -- http://www.progen-pharma.com/--
is a biotechnology company committed to the discovery, development
and commercialization of small molecule pharmaceuticals primarily
for the treatment of cancer. Progen has built a focus and
strength in anti-cancer drug discovery and development.
The Company operates the Research and Development business segment
primarily in Australia following the closure of the U.S. office in
October 2010.
POWIN CORPORATION: Incurs $1.4-Mil. Net Loss in Third Quarter
-------------------------------------------------------------
Powin Corporation filed its quarterly report on Form 10-Q,
reporting a net loss of $1.39 million on $9.37 million of revenue
for the three months ended Sept. 30, 2012, compared with a net
loss of $412,966 on $10.37 million of revenue for the same period
a year earlier.
For the nine months ended Sept. 30, 2012, the Company had a net
loss of $2.35 million on $36.18 million of revenue, compared with
a net loss of $333,481 on $34.05 million of revenue for the same
period of 2011.
The balance sheet at Sept. 30, 2012, showed $13.67 million in
total assets, $7.32 million in total liabilities, and
stockholders' equity of $6.35 million.
"The Company sustained operating losses during the three and nine
months ended Sept. 30, 2012. The Company's continuation as a
going concern is dependent on its ability to generate sufficient
cash flows from operations to meet its obligations and/or
obtaining additional financing from its shareholders or other
sources, as may be required."
According to the regulatory filing, the above condition raises
substantial doubt about the Company's ability to continue as a
going concern.
A copy of the Form 10-Q is available at http://is.gd/P6xRJf
Tualatin, Oregon-based Powin Corporation provides manufacturing
coordination and distribution support for original equipment
manufacturers throughout the United States. In addition, the
Companysells its own proprietary products through its wholly owned
subsidiaries, Channel Partner Program and Powin Renewable Energy
Resources, Inc. Powin Energy is working to develop and
commercialize energy storage systems based on lithium battery
technology for the transportation, utility and commercial building
markets.
QUANTUM CORP: To Eliminate 180 Positions to Cut Expenses
--------------------------------------------------------
The officers of Quantum Corporation approved a plan to eliminate
approximately 180 positions and reduce other expenses to improve
the Company's cost structure. These actions reflect the changes
the Company said it would be making in its fiscal Q2 earnings call
to align spending with revenue expectations while enabling
continued investment in driving growth. These actions are
expected to be completed by March 31, 2013, with the majority
occurring by Dec. 31, 2012. The Company expects these actions to
result in annual savings of approximately $25 million. The costs
associated with these actions consist of one-time termination
benefits. The Company's preliminary estimate of these costs is
approximately $6 million, and substantially all of these charges
will result in future cash expenditures.
About Quantum Corp.
Based in San Jose, California, Quantum Corp. (NYSE:QTM) --
http://www.quantum.com/-- is a storage company specializing in
backup, recovery and archive. Quantum provides a comprehensive,
integrated range of disk, tape, and software solutions supported
by a world-class sales and service organization.
The Company reported a net loss of $8.81 million for the fiscal
year ended March 31, 2012, compared with net income of
$4.54 million during the prior year.
The Company's balance sheet at Sept. 30, 2012, showed
$345.76 million in total assets, $413.45 million in total
liabilities and a $67.68 million total stockholders' deficit.
RAKHRA MUSHROOM: Employees Have Yet to Receive Paychecks
--------------------------------------------------------
Ruth Heide at Valley Courier reports that Rakhra Mushroom Farm
employees did not receive their paychecks on Nov. 26, 2012.
According to the report, a less-than-bare-bones management staff,
who are in the same boat with no paychecks coming in, encouraged
workers to continue filling their shifts because with no product
to sell, there would be no future paychecks. They said the farm
was current on payroll earlier this fall but hit a revenue lull in
the last couple of weeks.
Based in Alamosa, Colorado, Rakhra Mushroom Farm Corporation filed
for Chapter 11 protection on Jan. 12, 2012 (Bankr. D. Col. Case
No. 12-10560). Judge Howard R. Tallman presides over the case.
Harvey Sender, Esq., Matthew T. Faga, Esq., and Regina Ries, Esq.,
at Sender & Wasserman, P.C., represent the Debtor. The Debtor
disclosed assets of $7,803,880, and liabilities of $8,201,297.
RESIDENTIAL CAPITAL: Committee Has SilvermanAcampora as Counsel
---------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in the
Chapter 11 case of Residential Capital LLC seeks the Court's
authority to retain SilvermanAcampora LLC as special counsel, nunc
pro tunc to Oct. 25, 2012.
The firm will represent the Committee with respect to issues and
matters that may arise relating to former and current borrowers
of the Debtors. SilvermanAcampora will assist individual
borrowers regarding the Chapter 11 process and developments in
the Chapter 11 cases. The firm will also communicate with
borrowers and their counsel about borrower-specific issues.
SilvermanAcampora will be paid in accordance with its customer
hourly rates: $95 to $195 for paraprofessionals and $295 to $650
for attorneys. SilvermanAcampora will also be reimbursed for any
necessary out-of-pocket expenses.
Ronald J. Friedman, Esq., a member of the firm SilvermanAcampora
LLP, in New York, assures the Court that his firm is a
"disinterested person" as the term is defined in Section 101(14)
of the Bankruptcy Code and does not represent any interest
adverse to the Committee's.
About Residential Capital
Residential Capital LLC, the unprofitable mortgage subsidiary of
Ally Financial Inc., filed for bankruptcy protection (Bankr.
S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012.
Neither Ally Financial nor Ally Bank is included in the bankruptcy
filings.
ResCap, one of the country's largest mortgage originators and
servicers, was sent to Chapter 11 with 50 subsidiaries amid
"continuing industry challenges, rising litigation costs and
claims, and regulatory uncertainty," according to a company
statement.
ResCap disclosed $15.68 billion in assets and $15.28 billion in
liabilities as of March 31, 2012.
Centerview Partners LLC and FTI Consulting are acting as financial
advisers to ResCap. Morrison & Foerster LLP is acting as legal
adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is
the conflicts counsel. Rubenstein Associates, Inc., is the public
relations consultants to the Company in the Chapter 11 case.
Morrison Cohen LLP is advising ResCap's independent directors.
Kurtzman Carson Consultants LLP is the claims and notice agent.
Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves
as counsel to Ally Financial.
Nationstar was to make the first bid for the mortgage-servicing
business, while Berkshire Hathaway Inc. would serve as stalking-
horse bidder for the remaining portfolio of mortgages.
The Court extended the general bar date for claims against the
Debtors to Nov. 16, 2012, at 5:00 p.m., due to the events
precipitated by hurricane Sandy.
Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by affiliates of Residential Capital LLC and its
affiliates (http://bankrupt.com/newsstand/or 215/945-7000).
RESIDENTIAL CAPITAL: Examiner Proposes Wolf as Conflicts Counsel
----------------------------------------------------------------
Arthur J. Gonzalez, the Court-appointed Chapter 11 Examiner,
seeks the Court's authority to retain Wolf Haldenstein Adler
Freeman & Herz LLP as conflicts counsel, nunc pro tunc to
Oct. 15, 2012.
The current limited scope of Wolf Haldenstein's engagement will
be to represent the Examiner in connection with aspects of his
investigation involving J.P. Morgan Securities, LLC, Morgan
Stanley & Co. LLC, Goldman Sachs & Co., Citibank, N.A., and their
affiliates, each of whom appear only to be subjects of discovery
needed to complete the Investigation. The Conflict Parties are
clients of the Examiner's primary counsel, Chadbourne & Parke
LLP, as to which Chadbourne has a potential conflict of interest.
In the event that the Examiner learns, through future document
discovery or witness interviews, of the need to investigate other
parties as to which Chadbourne has potential conflicts, Wolf
Haldenstein may represent the Examiner in the discharge of his
duties with respect to those entities.
Wolf Haldenstein will be paid according to its customary hourly
rates as follows: $390 to $865 for partners, $350 to $605 for
counsel, $200 to $530 for associates, and $110 to $290 for
paraprofessionals. The firm will also be reimbursed for
necessary out-of-pocket expenses.
Eric B. Levine, Esq., a member of the firm of Wolf Haldenstein
Adler Freeman & Herz LLP, in New York, assures the Court that his
firm is a "disinterested person" as the term is defined in
Section 101(14) of the Bankruptcy Code; and does not represent any
interest adverse to the Examiner's. Mr. Levine, however,
disclosed that his firm represents or has represented the Police
and Fireman Retirement System of the City of Detroit, Wachovia
Bank, and Oppenheimer & Co., Inc.
About Residential Capital
Residential Capital LLC, the unprofitable mortgage subsidiary of
Ally Financial Inc., filed for bankruptcy protection (Bankr.
S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012.
Neither Ally Financial nor Ally Bank is included in the bankruptcy
filings.
ResCap, one of the country's largest mortgage originators and
servicers, was sent to Chapter 11 with 50 subsidiaries amid
"continuing industry challenges, rising litigation costs and
claims, and regulatory uncertainty," according to a company
statement.
ResCap disclosed $15.68 billion in assets and $15.28 billion in
liabilities as of March 31, 2012.
Centerview Partners LLC and FTI Consulting are acting as financial
advisers to ResCap. Morrison & Foerster LLP is acting as legal
adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is
the conflicts counsel. Rubenstein Associates, Inc., is the public
relations consultants to the Company in the Chapter 11 case.
Morrison Cohen LLP is advising ResCap's independent directors.
Kurtzman Carson Consultants LLP is the claims and notice agent.
Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves
as counsel to Ally Financial.
Nationstar was to make the first bid for the mortgage-servicing
business, while Berkshire Hathaway Inc. would serve as stalking-
horse bidder for the remaining portfolio of mortgages.
The Court extended the general bar date for claims against the
Debtors to Nov. 16, 2012, at 5:00 p.m., due to the events
precipitated by hurricane Sandy.
Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by affiliates of Residential Capital LLC and its
affiliates (http://bankrupt.com/newsstand/or 215/945-7000).
RESIDENTIAL CAPITAL: Ally Ordered to Produce Loan Info to FHFA
--------------------------------------------------------------
Judge Denise L. Cote of the U.S. District Court for the Southern
District of New York and Judge Martin Glenn of the U.S.
Bankruptcy Court for the Southern District of New York ordered
Ally Financial Inc. and debtors Residential Capital LLC and its
affiliates to produce the loan files to Federal Housing Finance
Agency no later than Jan. 31, 2013. The Judges also directed Ally
to pay for the production.
Meanwhile, for reasons stated in open court, the Bankruptcy Court
denied Residential Capital's request for certification of the
Federal Housing Finance Agency's appeal from the Bankruptcy
Court's order denying the agency motion to compel document
discovery from the Debtors. Approval of the request would have
let the U.S. Court of Appeals for the Second Circuit directly hear
the appeal, effectively bypassing the District Court.
The FHFA, as conservator for the Federal Home Loan Mortgage
Corporation, is taking an appeal from Bankruptcy Judge Martin
Glenn's order denying its motion to compel document discovery from
the Debtors.
The FHFA sought permission from Bankruptcy Court to obtain loan
files relevant to the action styled FHFA v. Ally Financial Inc.
f/k/a GMAC, LLC et al. pending in the United States District Court
for the Southern District of New York as Case No. 11- Civ. 7010
In a memorandum opinion and order dated Oct. 12, 2012, Judge
Glenn denied the motion filed by FHFA and the underwriter
defendants to compel document discovery from the Debtors, holding
that Section 105 of the Bankruptcy Code provides the Court with
the necessary authority to extend the protection of the automatic
stay to discovery from the Debtors. Based on evidentiary record,
the Court concluded that the Debtors have established that
Section 105 should be applied to limit or restrict third-party
discovery from them absent further Court order.
Judge Glenn clarified that he is not issuing an injunction
against FHFA; rather, the Court is extending the protection of
the stay pursuant to Section 105(a) to anyone seeking discovery
from the Debtors absent further Court order.
Counsel for FHFA, Andrew Glenn, Esq., at Kasowitz, Benson, Torres
& Friedman LLP, in New York, informed Judge Glenn that the Court
of Appeals for the Second Circuit denied, on a final basis, a
stay of FHFA's actions against several defendants, including
Ally. Accordingly, FHFA's action against Ally will proceed, the
counsel said.
About Residential Capital
Residential Capital LLC, the unprofitable mortgage subsidiary of
Ally Financial Inc., filed for bankruptcy protection (Bankr.
S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012.
Neither Ally Financial nor Ally Bank is included in the bankruptcy
filings.
ResCap, one of the country's largest mortgage originators and
servicers, was sent to Chapter 11 with 50 subsidiaries amid
"continuing industry challenges, rising litigation costs and
claims, and regulatory uncertainty," according to a company
statement.
ResCap disclosed $15.68 billion in assets and $15.28 billion in
liabilities as of March 31, 2012.
Centerview Partners LLC and FTI Consulting are acting as financial
advisers to ResCap. Morrison & Foerster LLP is acting as legal
adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is
the conflicts counsel. Rubenstein Associates, Inc., is the public
relations consultants to the Company in the Chapter 11 case.
Morrison Cohen LLP is advising ResCap's independent directors.
Kurtzman Carson Consultants LLP is the claims and notice agent.
Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves
as counsel to Ally Financial.
Nationstar was to make the first bid for the mortgage-servicing
business, while Berkshire Hathaway Inc. would serve as stalking-
horse bidder for the remaining portfolio of mortgages.
The Court extended the general bar date for claims against the
Debtors to Nov. 16, 2012, at 5:00 p.m., due to the events
precipitated by hurricane Sandy.
Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by affiliates of Residential Capital LLC and its
affiliates (http://bankrupt.com/newsstand/or 215/945-7000).
RESIDENTIAL CAPITAL: Professional Fees Reach $43.4 Million
----------------------------------------------------------
Professionals employed and retained in Residential Capital LLC's
bankruptcy cases filed interim applications seeking payment of
fees and reimbursement of expenses incurred while rendering
services to the Debtors.
As of October 31, 2012, the Debtors have paid a total of
$18,764,330. The bankruptcy professionals billed a total of
$43,413,167 in unpaid fees as of Oct. 31:
Total Incurred
Professional Total Paid & Unpaid
------------ ---------- --------------
AlixPartners LLP $692,400 $1,547,336
Arthur J. Gonzalez, Examiner - 86,138
Bradley Arant Boult Cummings LLP - 3,143,495
Carpenter Lipps & Leland LLP 396,954 612,815
Centerview Partners LLC 480,000 721,778
Chadbourne & Parke LLP - 3,422,853
Curtis, Mallet-Prevost, Colt & Mosle LLP - 502,853
Deloitte & Touche LLP 236,693 874,783
Dorsey & Whitney LLP - 418,835
Fortace, LLC 389,425 239,556
FTI Consulting, Inc. - 6,535,758
Hudson Cook, LLP - 584,607
KPMG LLP - 702,839
Kramer Levin Naftalis & Frankel 4,238,461 6,742,502
Kurtzman Carson Consultants LLC 6,895,467 1,295,586
Kurtzman Carson Consultants LLC - 94,074
Mercer (US) Inc. - 49,738
Mesirow Financial Consulting, LLC - 3,037,323
Moelis & Company LLC 470,258 941,066
Morrison & Foerster LLP 4,303,400 9,419,987
Orrick, Herrington & Sutcliffe LLP - 573,206
Pepper Hamilton LLP - 1,094,901
Rubenstein Associates, Inc. 25,444 5,322
Towers Watson 15,628 18,727
Severson & Werson, P.C. 620,199 747,092
About Residential Capital
Residential Capital LLC, the unprofitable mortgage subsidiary of
Ally Financial Inc., filed for bankruptcy protection (Bankr.
S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012.
Neither Ally Financial nor Ally Bank is included in the bankruptcy
filings.
ResCap, one of the country's largest mortgage originators and
servicers, was sent to Chapter 11 with 50 subsidiaries amid
"continuing industry challenges, rising litigation costs and
claims, and regulatory uncertainty," according to a company
statement.
ResCap disclosed $15.68 billion in assets and $15.28 billion in
liabilities as of March 31, 2012.
Centerview Partners LLC and FTI Consulting are acting as financial
advisers to ResCap. Morrison & Foerster LLP is acting as legal
adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is
the conflicts counsel. Rubenstein Associates, Inc., is the public
relations consultants to the Company in the Chapter 11 case.
Morrison Cohen LLP is advising ResCap's independent directors.
Kurtzman Carson Consultants LLP is the claims and notice agent.
Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves
as counsel to Ally Financial.
Nationstar was to make the first bid for the mortgage-servicing
business, while Berkshire Hathaway Inc. would serve as stalking-
horse bidder for the remaining portfolio of mortgages.
The Court extended the general bar date for claims against the
Debtors to Nov. 16, 2012, at 5:00 p.m., due to the events
precipitated by hurricane Sandy.
Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by affiliates of Residential Capital LLC and its
affiliates (http://bankrupt.com/newsstand/or 215/945-7000).
RESPONSE BIOMEDICAL: Incurs C$2.7-Mil. Net Loss in Third Quarter
----------------------------------------------------------------
Response Biomedical Corporation filed its quarterly report on Form
10-Q, reporting of C$2.7 million on C$2.7 million of revenue for
the three months ended Sept. 30, 2012, compared with a net loss of
C$1.8 million on C$1.6 million of revenue for the same period last
year.
The increase in the loss for the three month period ended
Sept. 30, 2012, is primarily attributed to the C$854,475
unrealized loss on the revaluation of the warrant liability.
For the nine months ended Sept. 30, 2012, the Company had a net
loss of C$6.0 million on C$8.7 million of revenue, compared with a
net loss of C$4.2 million on C$6.3 million of revenue for the same
period in 2011.
The increase in the loss for the nine month period ended
Sept. 30, 2012, is primarily attributed to the C$1.9 million
unrealized loss on the revaluation of the warrant liability.
The Company's balance sheet at Sept. 30, 2012, showed
C$15.4 million in total assets, C$15.9 million in total
liabilities, and a stockholders' deficit of C$494,962.
The Company has sustained continuing losses since its formation
and at Sept. 30, 2012, had a deficit of C$112.9 million and for
the nine month period ended Sept. 30, 2012, incurred negative cash
flows from operations of C$4.1 million compared to C$2.3 million
in the same period in 2011. Also, the Company had a C$3.4 million
decrease in working capital, net of the warrant liability. "These
conditions raise substantial doubt about the Company's ability to
continue as a going concern."
A copy of the Form 10-Q is available at http://is.gd/CP38vg
About Response Biomedical
Based in Vancouver, Canada, Response Biomedical Corporation
develops, manufactures and sells diagnostic tests for use with its
proprietary RAMP(R) System, a portable fluorescence immunoassay-
based diagnostic testing platform. The RAMP(R) technology
utilizes a unique method to account for sources of error inherent
in conventional lateral flow immunoassay technologies, thereby
providing the ability to quickly and accurately detect and
quantify an analyte present in a liquid sample. Consequently, an
end-user on-site or in a point-of-care setting can rapidly obtain
important diagnostic information. Response Biomedical currently
has thirteen tests available for clinical and environmental
testing applications and the Company has plans to commercialize
additional tests.
* * *
As reported in the TCR on April 4, 2012, Ernst & Young LLP, in
Vancouver, Canada, expressed substantial doubt about Response
Biomedical's ability to continue as a going concern, following the
Company's results for the fiscal year ended Dec. 31, 2011. The
independent auditors noted of the Company's recurring losses from
operations.
SAGAMORE PARTNERS: Art Hotel Owner Amends Plan; Lender Objects
--------------------------------------------------------------
Sagamore Partners, Ltd., has filed a modification to its amended
plan of reorganization to revise the treatment of insider general
unsecured claims:
"Allowed Insider General Unsecured Claims (Class 5): Class 5
consists of all of the Allowed Insider General Unsecured
Claims. Currently, claims scheduled and filed total
approximately $18,054,000. The Allowed Insider General
Unsecured Claims of Christine J. Taplin ($50,000.04) and
Harbour Realty Advisors, Inc. ($95,000) shall be paid only
upon such time as (1) the non-insider unsecured creditors
have been paid in full under the Plan of Reorganization, (2)
all operational expenses at the Property are being met to the
satisfaction of the Debtor, and (3) as long as the Debtor is
timely making its debt service payments, unless otherwise
provided by Court Order pursuant to the Motion to Approve
Assumption of Executory Contracts and Unexpired Leases. The
interest rate shall be the minimum variable rate required by
the Internal Revenue Service. Class 5 Claims shall not be
paid until all Allowed Class 4 Claims are paid in full."
"The Allowed Insider General Unsecured Claims of Martin W.
Taplin, 14th Brickell West, Ltd., 1177 Kane Concourse Pshp,
Ltd., and The Taplin Company, Ltd. shall be recharacterized
as equity and shall not receive any distribution until the
Class 2 Allowed Claim is paid in full."
Despite the amendment, JPMCC 2006-LDP7 Miami Beach Lodging, LLC,
as secured creditor and first-mortgage holder still objected to
confirmation of the Debtor's Amended Plan of Reorganization.
A prior iteration of the Debtor's plan proposes to cure and
reinstate its loan obligation to the Secured Lender by only paying
non-default rate interest, fees, and costs. The Court rejected
that plan at the disclosure statement stage as unconfirmable as a
matter of law.
Scott L. Baena, Esq., at Bilzin Sumberg Baena Price & Axelrod LLP,
representing the Secured Lender, says the revised Plan is likewise
fatally flawed and unconfirmable on its face. Although the Plan
again purports to be a reinstatement plan that treats the Secured
Lender as unimpaired in accordance with section 1124(2) of the
Bankruptcy Code, the Plan impairs the Secured Lender's interests.
Instead of choosing to abide by the Court's prior ruling regarding
the need to pay pre-petition default interest or, alternatively,
pursuing an appeal rather than proposing a new reinstatement plan,
the Debtor improperly attempts to preserve for itself the best of
both worlds leaving one to wonder what will be accomplished by
confirmation of the Plan.
Mr. Baena notes that the Plan purports to reinstate the Loan
while, at the same time, retaining a platform for the Debtor to
continue to dispute the requirements for reinstatement. The
Debtor wishes to preserve its challenges to the Secured Lender's
standing, security interests, and contractual rights including
both the already-adjudicated right to pre-petition default
interest as well as entitlements to post-petition default
interest, fees, and costs that presumably will be determined at
confirmation or will have been adjudicated at the trial in the
adversary proceeding. The Debtor must likewise live with the
Court's determinations in respect of these items or, if it cannot
do so, it may withdraw its Plan and pursue appellate remedies. It
cannot, however, choose to make payments into an escrow account
rather than to the Secured Lender and claim at the same time to
have reinstated the Loan.
Mr. Baena contends that all that is pertinent is that anything
short of a cure of all pre- and post-petition defaults and
complete compliance with the Loan Agreement and related loan
documents from and after the Effective Date fails to comport with
the requirement of section 1124(2) that the Debtor cure all
defaults and not alter the Secured Lender's legal, equitable, or
contractual rights. Alternatively, withholding payments from
Secured Lender and failing to defend the validity and priority of
Secured Lender's liens are breaches of the Loan Agreement that
would become Events of Default on or shortly after the Effective
Date of the Plan.
Mr. Baena adds that the Plan fails to cure all pre- and post-
petition defaults on the Effective Date of the Plan and alters the
Secured Lender's legal, equitable, and contractual rights by,
among other things, (a) seeking to defer payment of pre- and post-
petition default interest, fees, and costs until maturity, (b)
failing to provide for the appointment and payment of a Qualified
Manager as required under the applicable Loan Agreement, and (c)
failing to provide for the FF&E Reserve required by the Loan
Agreement.
Moreover, Mr. Baena points out that the Plan is not feasible. Even
at this late stage the Debtor has refused to provide proof to the
Secured Lender of the ability of the Plan sponsor, Martin W.
Taplin, to fund the Distribution Fund on the Effective Date of the
Plan. To the extent that Taplin seeks to borrow money or raise
equity through a transaction, Taplin has refused to share the
terms of any proposed transaction including any conditions
precedent or other constraints affecting the availability of the
funds.
Even if the Debtor could accomplish all pre-conditions to the
Effective Date consistent with the dictates of section 1124(2),
Mr. Baena states that the Plan is utterly silent as to how the
Debtor proposes to retire its debt obligation to the Secured
Lender on the reinstated maturity date of April 13, 2016, despite
the fact that the Debtor's recently-updated Financial Projections
make it abundantly clear that the Debtor cannot do so from
operations. By its own forecast, the Debtor's operations are
substantially cash-flow negative notwithstanding the Debtor's
failure to include needed capital expenditures, funding for an
FF&E reserve, or sufficient provision for a market-rate fee to a
third-party management company, among other things. Even with
these exclusions and the alleged injection of $450,000 of new
capital, the Debtor's Financial Projections leave little room for
error, coming within $20,000 of requiring additional capital by
November 2013. The fact that the Property may be worth more than
the value of the Loan is not enough as the issue is the Debtor's
ability to perform, not the Secured Lender's right to foreclose
and be paid from the value of its collateral. The Debtor has yet
to demonstrate that the Plan is not likely to be followed by the
liquidation or further reorganization of the Debtor and thus, the
Plan cannot be confirmed pursuant to section 1129(a)(11) of the
Bankruptcy Code.
Mr. Baena believes that the Plan ignores the Debtor's inability to
sustain a profitable operation and service its existing debt
burden even when the Debtor's own Financial Projections make this
plain. After over three years of foreclosure litigation to-date,
the Plan now seeks to shift the risk of the Debtor's future
prospects to the Secured Lender. There are no assurances that can
be provided that when the cash runs out or the maturity date rolls
around, the Debtor will not do it all over again with a new
lawsuit followed by a second sojourn into bankruptcy. If all the
Debtor offers as assurances of future payment is the value of the
Property, the Secured Lender is compelled to assume that Secured
Lender will have to foreclose to be repaid which is the antithesis
of feasibility. Absent clear and concrete proof of a path to
profitability and an ability to retire Secured Lender's debt when
due, confirmation of the Plan must be denied.
The secured lender is represented by:
Scott L. Baena, Esq.
Jay M. Sakalo, Esq.
BILZIN SUMBERG BAENA PRICE & AXELROD LLP
1450 Brickell Avenue, Suite 2300
Miami, FL 33131
Tel: (305) 374-7580
Fax: (305) 374-7593
About Sagamore Partners
Bay Harbor, Florida-based Sagamore Partners, Ltd., owns and
operates the oceanfront Sagamore Hotel, also known as The Art
Hotel due to its captivating art collection from recognized
artists and its contemporary design. The all-suite boutique hotel
is situated within Miami's Art Deco Historic District on South
Beach. Sagamore Partners is owned by Martin Taplin.
Sagamore Partners filed for Chapter 11 bankruptcy (Bankr. S.D.
Fla. Case No. 11-37867) on Oct. 6, 2011. Judge A. Jay Cristol
presides over the case. Joshua W. Dobin, Esq., and Peter D.
Russin, Esq., at Meland Russin & Budwick, P.A., in Miami, Fla.,
serve as the Debtor's counsel. The Debtor disclosed $71,099,556
in assets and $52,132,849 in liabilities as of the Chapter 11
filing. In its latest schedules, the Debtor disclosed $67,963,210
in assets and $52,060,862 in liabilities. The petition was signed
by Martin W. Taplin, president of Miami Beach Vacation Resorts,
Inc., manager of Sagamore GP, LLC, general partner.
The Debtor has requested for an extension in its solicitation
period. In July 2012, Bankruptcy Judge A. Jay Cristol denied
approval of the disclosure statement explaining its Plan of
Reorganization. Pursuant to the Plan, the Debtor proposes to
reinstate the maturity date of its loan with JPMCC 2006-LDP7 Miami
Beach Lodging, with interest from the Effective Date of the Plan
at the loan's non-default interest rate; and cure monetary
defaults under the Loan by paying the Secured Lender unpaid
interest which has accrued on the Loan at the Interest Rate, but
not interest which has accrued on the Loan at the Default Rate.
According to Judge Cristol, to cure the Loan, the Debtor must
provide for the payment of all amounts due the Secured Lender
under the Loan Documents, including default interest. Absent such
payment, the Debtor may not treat the Secured Lender's claim as
unimpaired under the Plan. Because, as presently structured, the
Plan does not provide for the payment of default interest to the
Secured Lender, the Plan is facially unconfirmable over the
objection of the Secured Lender and approval of the Disclosure
Statement is denied.
The U.S. Trustee has not appointed an official committee in the
case.
SAN BERNARDINO: Calpers Seeks Stay Relief to Pursue Unpaid Pension
------------------------------------------------------------------
Reuters' Tim Reid and Peter Henderson report that the California
Public Employees' Retirement System has filed a motion in
Bankruptcy Court asking for the stay to be lifted so it could sue
the city of San Bernardino for millions of dollars in pension
arrears in a state court. CalPERS also said even if the stay was
not lifted, it would still seek redress in a state court.
The report notes that, since filing for bankruptcy, San Bernardino
has halted its bi-weekly, $1.2 million payment to CalPERS, saying
it wants to defer any payments to the fund until fiscal year 2013-
2014. CalPERS says the city is already $6.9 million in arrears
since Aug. 1.
According to Reuters, San Bernardino's decision to halt its
payments, and its move on Monday night to include in a new budget
an attempt to renegotiate the terms of its debt with CalPERS, is
uncharted territory for the pension fund. Wall Street bondholders
and insurers, Reuters says, have already indicated their intention
to test CalPERS's primacy as a creditor in the San Bernardino
case.
CalPERS is San Bernardino's biggest creditor. According to the
Reuters report, the city, which has a nearly $46 million deficit
for the current fiscal year, lists its unfunded pension
obligations to CalPERS at $143.3 million. CalPERS says if the
city halted its relationship with the fund immediately, the debt
would be $319.5 million.
According to Reuters, Robert Glazier, a CalPERS official, said:
"This legal action would allow us to collect the employer
contributions from San Bernardino which are required by state law,
to maintain the integrity of the San Bernardino pension plan for
its public employees and retirees and to avoid needless procedural
disputes and additional legal costs."
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.
SANUWAVE HEALTH: President and CEO C. Cashman Quits
---------------------------------------------------
SANUWAVE Health, Inc., announced that Christopher M. Cashman will
be leaving as President, Chief Executive Officer and Director.
Mr. Cashman will continue to serve the Company in an advisory
role. Barry J. Jenkins, the Company's chief financial officer,
has been named Chief Operating Officer, and Kevin A. Richardson,
II, Chairman of the Company's Board of Directors, has been named
Active Chairman of the Board, effective immediately.
Kevin Richardson stated, "On behalf of the Board, management and
employees of SANUWAVE, I would like to thank Chris for his
dedication, passion and contributions to SANUWAVE over the past
seven years. He has been instrumental in helping the Company
persevere through the challenges of establishing our regenerative
medicine platform. It is from his leadership alongside the
SANUWAVE team that we are now well-positioned to continue our
dermaPACE diabetic foot ulcer clinical trial here in the U.S. and
to succeed in expanding the treatment options for wound and
orthopedic indications worldwide. We wish him all the best in his
future endeavors."
"We are highly committed to the execution of our strategic
initiatives at SANUWAVE. I will work alongside the management
team to carry out the strategic, clinical and operational
priorities of the Company. The Company is working with select
accredited investors to raise up to $1.25 million in capital in a
private placement. The accredited investors will receive a
convertible promissory note that will convert, at the Company's
option, at the completion of a larger funding that is expected to
close no later than the first quarter of 2013," concluded Mr.
Richardson.
Mr. Cashman commented, "I am extremely proud of the progress and
results we achieved in my years with the Company, which is now
well positioned for a strong future. SANUWAVE has a very talented
executive leadership team supported by dedicated and loyal
employees. I wish them all the best. I strongly believe in the
potential for PACE technology to positively impact patients whose
lives suffer from debilitating wounds and injuries, and I look
forward to the day dermaPACE and the other PACE products are
approved for use on the U.S. market."
On Nov. 6, 2012, the Company entered into a Severance and Advisory
Agreement with Mr. Cashman.
A complete copy of the Form 8-K is available for free at:
http://is.gd/aYHU3D
About SANUWAVE Health
Alpharetta, Ga.-based SANUWAVE Health, Inc., is an emerging global
regenerative medicine company focused on the development and
commercialization of noninvasive, biological response activating
devices for the repair and regeneration of tissue, musculoskeletal
and vascular structures.
BDO USA, LLP, in Atlanta, Georgia, expressed substantial doubt
about SANUWAVE's ability to continue as a going concern, following
the Company's results for the fiscal year ended Dec. 31, 2011.
The independent auditors noted that the Company has suffered
recurring losses from operations and is economically dependent
upon future issuances of equity or other financing to fund ongoing
operations.
The Company's balance sheet at June 30, 2012, showed $3.40 million
in total assets, $7.70 million in total liabilities and a
$4.29 million total stockholders' deficit.
Bankruptcy Warning
The Company said in its quarterly report for the period ended
June 30, 2012, that the continuation of its business is dependent
upon raising additional capital. The Company expects to devote
substantial resources to continue its research and development
efforts, including clinical trials. Because of the significant
time it will take for the Company's products to complete the
clinical trial process, and for the Company to obtain approval
from regulatory authorities and successfully commercialize its
products, the Company will require substantial additional capital.
The operating losses create uncertainty about the Company's
ability to continue as a going concern.
As of June 30, 2012, the Company had cash and cash equivalents of
$1,400,875. The Company may be able to raise additional capital
through the issuance of common or preferred stock, securities
convertible into common stock, or secured or unsecured debt, or
the Company may seek an investment by a strategic partner in a
specific clinical indication or market opportunity, or the Company
may sell all or a portion of the Company's assets. If these
efforts are unsuccessful, the Company may be forced to seek relief
through a filing under the U.S. Bankruptcy Code.
SB PARTNERS: Incurs $318,000 Net Loss in Third Quarter
------------------------------------------------------
SB Partners filed with the U.S. Securities and Exchange Commission
its quarterly report on Form 10-Q disclosing a net loss of
$318,227 on $567,187 of total revenues for the three months ended
Sept. 30, 2012, compared with a net loss of $325,459 on $623,272
of total revenues for the same period during the prior year.
For the nine months ended Sept. 30, 2012, the Company reported
a net loss of $859,902 on $1.84 million of total revenues, in
comparison with a net loss of $750,526 on $1.89 million of total
revenues for the same period a year ago.
The Company's balance sheet at Sept. 30, 2012, showed
$17.75 million in total assets, $21.30 million in total
liabilities and a $3.55 million total partners' deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/p3F6xD
About SB Partners
Milford, Conn.-based SB Partners is a New York limited partnership
engaged in acquiring, operating and holding for investment a
varying portfolio of real estate interests. As of June 30,
2010, the partnership owns an industrial flex property in Maple
Grove, Minnesota and warehouse distribution centers in Lino Lakes,
Minnesota and Naperville, Illinois.
The Company has a 30% interest in Sentinel Omaha, LLC. Sentinel
Omaha is a real estate investment company which currently owns 24
multifamily properties and 1 industrial property in 17 markets.
Sentinel Omaha is an affiliate of the partnership's general
partner.
SILVER II BORROWER: Moody's Assigns 'B2' CFR; Outlook Stable
------------------------------------------------------------
Moody's Investors Service has assigned a B2 corporate family
rating to Silver II Borrower S.C.A., which together with Silver II
US Holdings, LLC (co-borrowers), have been formed to fund the
$3.44 billion acquisition of Hamilton Sundstrand Industrial (HSI)
by BC Partners and The Carlyle Group. Concurrently, Moody's
assigned a B1 rating to the proposed $1.85 billion senior secured
credit facilities and a Caa1 rating to the proposed $775 million
senior unsecured notes. The rating outlook is stable.
HSI consists of the Milton Roy, Sundyne and Sullair industrial
product businesses of United Technologies Corporation (UTC).
Moody's views the acquisition of HSI as expensive at approximately
10.2x trailing EBITDA, before fees and expenses, and the pro forma
capital structure as aggressive with roughly $2.3 billion of debt,
7.0x initial debt-to-EBITDA, and $1.3 billion of sponsor equity.
The following ratings have been assigned (subject to review of
final documentation):
B2 corporate family rating (CFR);
B2 probability of default rating;
B1 (LGD 3, 34%) to the proposed $300 million first lien revolver
due 2017;
B1 (LGD 3, 34%) to the proposed $1,550 million first lien term
loan due 2019; and
Caa1 (LGD5, 87%) to the proposed $775 million senior unsecured
notes due 2020.
Ratings Rationale
The B2 CFR reflects HSI's aggressive leverage profile and reduced
financial flexibility relative to many of its larger competitors
in the globally fragmented pump and industrial air compressor
markets. These factors are balanced against HSI's high margins,
leadership position of its niche products, well-recognized brands,
dependable aftermarket revenue base, and solid cash generating
capabilities through the industrial cycle.
HSI's businesses are positioned to benefit from its solid end-
market and geographic diversification, a global distribution
network and manufacturing footprint and limited customer
concentrations. HSI's pump and compressor products are primarily
sold into oil and gas production, chemical and hydrocarbon
processing, general industrial, construction, mining and
water/wastewater treatment end-markets and should benefit from
modest growth prospects and varying long-term investment needs
across these sectors. However, these sectors are cyclical in
nature and will result in earnings volatility over time.
Underpinning the B2 rating is Moody's expectation that HSI will
generate substantial free cash flow during the up-cycle, which
will initially be used to repay debt, and sufficient free cash
flow through the downturn, in part due to the unwind of working
capital, to meet debt service requirements.
HSI has steadily improved margins through the last downturn
benefitting from growing demand trends following the trough of the
last recession, restructuring efforts completed in Europe, growth
in emerging markets and a flexible cost structure. HSI's margins
benefit from outsourcing of key component part manufacturing and
sub-assemblies and its ongoing focus on low cost country sourcing
for raw materials and component parts. Moody's expects HSI to
maintain low-single digit sales growth in 2013 which should allow
for margins to remain at high levels despite heightened risks
associated with its separation from UTC.
The B2 CFR benefits from a good post acquisition liquidity profile
bolstered by an expectation for meaningful cash generation, a $300
million undrawn revolver, and minimal financial covenant
restrictions. Moody's expects HSI to generate cash flows well in
excess of its heavy interest burden (roughly $140M-$150M), term
loan amortization requirements ($15.5M) and capital spending needs
thus allowing for discretionary debt reduction. Financial
covenants are expected to be limited to a net first lien leverage
test, only if revolver borrowings exceed 25% of availability.
The B1 rating on the revolver and term loan reflect their
seniority in the capital structure relative to the notes and a
first lien security interest in the assets of the guarantors
(roughly 50% of total assets). The Caa1 rating on the notes
reflects their junior position in the capital structure relative
to the first lien facilities.
The stable rating outlook reflects Moody's expectation for modest
earnings growth, solid cash generation and debt reduction to
result in a reduction in financial leverage and an overall
improvement in credit protection metrics over the next year.
The ratings are unlikely to be upgraded prior to meaningful debt
reduction such that leverage is reduced and can be expected to be
maintained around 5.0x through the industrial cycle. Conversely,
ratings would likely be downgraded if free cash flows were used to
fund meaningful acquisitions or shareholder returns prior to debt
reduction. Moody's would view leverage maintained above 6.5x for
an extended period to be inconsistent with the B2 rating. Further,
any meaningful reliance on the revolver would increase the
likelihood of a negative rating action.
The principal methodology used in rating Silver II Borrower
S.C.A.was the Global Manufacturing 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.
Silver II Borrower S.C.A., together with Silver II US Holdings,
LLC (co-borrowers), is comprised of the former Hamilton Sundstrand
Industrial business of United Technologies Corporation. The
business designs, manufactures, sells and services the aftermarket
for a broad portfolio of sealed and sealless pumps, metering
pumps, gas compressors, stationary and portable compressors and
air ends. The company is owned by private equity sponsors BC
Partners and The Carlyle Group. Sales for the twelve months ending
September 30, 2012 were approximately $1.4 billion.
SIMON WORLDWIDE: Incurs $307,000 Net Loss in Third Quarter
----------------------------------------------------------
Simon Worldwide, Inc., filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $307,000 on $0 of revenue for the three months ended Sept. 30,
2012, compared with a net loss of $534,000 on $0 of revenue for
the same period during the prior year.
The Company incurred a net loss of $1.14 million on $0 of revenue
for the nine months ended Sept. 30, 2012, compared to a net loss
of $1.43 million on $0 of revenue for the same period a year ago.
The Company's balance sheet at Sept. 30, 2012, showed
$8.03 million in total assets, $60,000 in total liabilities, all
current, and $7.97 million in total stockholders' equity.
"With no revenues from operations, the Company closely monitors
and controls its expenditures within a reasonably predictable
range. Cash used by operating activities was $1.9 million and
$2.3 million in the years ended December 31, 2011 and 2010,
respectively. Cash used by operating activities was $1.1 million
and $1.2 million for the nine months ended September 30, 2012 and
2011, respectively. The Company incurred losses within its
continuing operations in 2011 and continues to incur losses in
2012 for the general and administrative expenses incurred to
manage the affairs of the Company. By utilizing cash available at
September 30, 2012 to maintain its scaled back operations,
management believes it has sufficient capital resources and
liquidity to operate the Company for at least one year."
A copy of the Form 10-Q is available for free at:
http://is.gd/urxcIl
About Simon Worldwide
Based in Los Angeles, Simon Worldwide, Inc. (OTC: SWWI) no longer
has any operating business. Prior to August 2001, the Company
operated as a multi-national full-service promotional marketing
company, specializing in the design and development of high-impact
promotional products and sales promotions. At Dec. 31, 2009,
the Company held an investment in Yucaipa AEC Associates, LLC, a
limited liability company that is controlled by the Yucaipa
Companies, a Los Angeles, California based investment firm.
Yucaipa AEC in turn principally held an investment in the common
stock of Source Interlink Companies, a direct-to-retail magazine
distribution and fulfillment company in North America, and a
provider of magazine information and front-end management services
for retailers and a publisher of approximately 75 magazine titles.
Yucaipa AEC held this investment in Source until April 28, 2009,
when Source filed a pre-packaged plan of reorganization under
Chapter 11 of the U.S. Bankruptcy Code.
SIRIUS COMPUTER: Moody's Affirms 'B1' CFR; Outlook Stable
---------------------------------------------------------
Moody's Investors Service upgraded Sirius Computer Solutions, Inc.
proposed $20 million Senior Secured Revolving Credit Facility and
$260 Million Senior Secured Term Loan to Ba3 from B1, the proceeds
of which will be used primarily to repay existing debt and to
partially redeem outstanding preferred shares of SCS Holdings. The
rating action reflects the smaller than previously contemplated
senior secured refinancing. In addition the roughly $90 million of
preferred stock that will remain on the balance sheet following
the refinancing, which Moody's treats as 100% debt, provides
junior capital to the senior secured credit facilities. Moody's
notes that if the company raises additional senior secured debt to
redeem the remaining preferred stock, the ratings on the senior
secured debt will be under downward pressure. Moody's also
affirmed the B1 corporate family and probability of default
ratings ("CFR" and "PDR", respectively) . The rating outlook is
stable. The assigned ratings are subject to review of final
documentation and no material change in the terms and conditions
of the transaction as advised to Moody's.
Summary of Rating Actions:
$20 Million Senior Secured Revolving Credit Facility -
Upgraded to Ba3 (LGD 3 -- 33%) from B1 (LGD 3 -- 42%)
$260 Million Senior Secured Term Loan -- Upgraded to Ba3 (LGD 3
-- 33%) from B1 (LGD 3 -- 42%)
Ratings Rationale
The B1 CFR reflects Sirius Computer's moderately high financial
leverage with debt to EBITDA at about 3.3 times (Moody's adjusted,
pro-forma for the proposed financing), smaller scale compared to
competing technology value-added resellers and managed services
firms, and reliance on acquisitions to drive revenue growth. The
rating is also tempered by its high vendor concentration, although
Moody's recognizes that Sirius Computer is the largest IBM value-
added-reseller of IT solutions. The company has also made progress
to diversify its vendor base to include products from Cisco, Dell,
HP and NetApp. The rating is also supported by the company's track
record in generating consistent positive free cash flow and its
good track record of paying down debt, even throughout the
economic recession.
Moody's expects Sirius to maintain a good liquidity profile over
the next four quarters, supported by at least $20 million of cash
and anticipated annual free cash flow generation of $30 million or
more. The strong free cash flow is buttressed by low capital
expenditures, with annual capital expenditures at less than 2% of
revenues. Working capital needs are expected to be modest and
consistent with seasonality trends.
The stable outlook reflects Moody's expectation that Sirius
Computer will maintain its leading market position as a value-
added reseller of IT products and services to the mid-tier market
in the US, and produce consistent levels of operating profits and
cash flows to enable it to delever.
The rating could be upgraded if the company diversifies its vendor
base, maintains revenue and cash flow growth and improves its
credit metrics, such as adjusted debt to EBITDA falls below 3.0
times on a sustained basis, and EBITDA to Interest coverage rises
above 4.0 times. The rating could be downgraded if a significant
decline in revenue or cash flows lead to adjusted debt to EBITDA
rising in excess of 5.0 times or with the expectation of weakened
liquidity which could arise from changed payment terms to its
vendors, operating losses, dividend payments, or cash acquisitions
without a proportionate increase in EBITDA. A deteriorating
relationship with key supplier -- IBM, or failure to further
diversify its vendor base, could also place downward pressure on
the rating.
The principal methodology used in this rating was Moody's Global
Business and Consumer Service Industry rating methodology
published in October 2010. Other methodologies used include Loss
Given Default for Speculative-Grade Non-Financial Companies in the
U.S., Canada and EMEA published in June 2009.
SPECTRUM HEALTHCARE: Laurel Hill Healthcare to Close by Jan. 14
---------------------------------------------------------------
Jason Siedzik at Litchfield County Times, citing a filing with
the Connecticut Department of Labor, reports that, as part of a
settlement between Spectrum Healthcare and Nationwide Health
Properties, Laurel Hill Healthcare will shut its doors no sooner
than Jan. 14, 2013.
The report relates the department received the notice that
Spectrum Healthcare would shut down Laurel Hill Health Care on
Nov. 13, and 117 employees would lose their jobs.
The report notes the agreement, which would settle a combined
$2.325 million in debts owed to Nationwide Health Properties by
Spectrum Healthcare and its homes in Winsted, Torrington and
Hartford, calls for Spectrum Healthcare to close Laurel Hill
Healthcare through the bankruptcy process. Nationwide Health
Properties will negotiate a new lease for the Torrington and
Hartford facilities, while the two homes will pay down an
$825,000 secured loan using 75% of the profits.
The report says Sean Murphy, the chief financial officer for
Spectrum Healthcare, did not respond to multiple calls. However,
despite the company's long-documented battle with SEIU 1199, which
represents the majority of the employees at Spectrum Healthcare's
six facilities in the state, labor costs were not cited as the
reason to close Laurel Hill Healthcare. Instead, the home's high
percentage of Medicaid-funded patients, as well as the state's
"Money Follows the Person" program -- which allows seniors to stay
in their private homes longer -- are implicated in the motion to
close Laurel Hill Healthcare.
The report notes that, according to Deborah Chernoff, the
communications director for Service Employees International Union
District 1199, shutting down Laurel Hill Healthcare would deal a
massive blow to Winsted.
The report relates Ms. Chernoff said their employees are working
on gathering signatures on petitions to save the home. The U.S.
Bankruptcy Court in Hartford was scheduled to hold a hearing on
Laurel Hill Healthcare's fate Nov. 29, where the home could be
removed from the equation entirely. Ms. Chernoff said that the
motion to close Laurel Hill Healthcare would "essentially (carve)
it out of the Chapter 11 bankruptcy," but although the facility is
relatively small -- Laurel Hill Healthcare has 75 beds, compared
to a state average of 120 -- it serves an essential purpose in the
area.
The report relates Spectrum Healthcare has argued that Laurel Hill
Healthcare is "not financially viable and that it would be in the
best interests of the Debtors and their estates to close Winsted."
A large proportion of the 68 patients at Laurel Hill Healthcare
pay for their stay through Medicaid -- 70%, according to the
filing, compared to 14% paying through Medicare and 16% paying
through private payments and insurance -- which Ms. Chernoff said
pays the least.
According to the report, Laurel Hill Healthcare has reported a net
loss of $709,391, from October 1, 2010 to September 30, 2011, to
Medicaid, and that a net loss of at least $468,776 is anticipated
in 2012. That number is lower than the true expected deficit, the
filing continues, because management fees, rent and vendor
obligations were deferred. Additionally, Spectrum Healthcare has
argued that over $1 million in renovations and repairs are
necessary to Laurel Hill Healthcare.
The report relates Spectrum Healthcare stated that there is excess
capacity in Connecticut's nursing home bed population, and that
the large majority of patients could be housed in Torrington. The
filing claims that 18 facilities in Litchfield County -- all
within 15 miles of Torrington or Winsted -- have 143 available
beds. But Ms. Chernoff argued that the 68 patients at Laurel Hill
Healthcare cannot simply be moved just due to available beds
elsewhere.
Spectrum Healthcare has six nursing facilities that have 716 beds
and employ 725 employees. About 420 employees are part of a
union. The Company and its affiliates filed for Chapter 11
protection on Sept. 10, 2012 (Bankr. D. Conn. Case No. 12-22206).
Judge Albert S. Dabrowski presides over the case. Elizabeth J.
Austin, Esq., at Pullman and Comley, represents the case. The
Debtor estimated assets of $100,000 and $500,000, and debts of
between $1 million and $10 million.
SYNCHRONOUS AEROSPACE: Precision Deal No Effect on Moody's Rating
-----------------------------------------------------------------
Moody's Investors Service said that the announcement that
Precision Castparts Corp. (A2/stable) has entered into a
definitive agreement to acquire Synchronous Aerospace Group
(Caa1/stable) for an undisclosed amount is credit positive, but
has no impact on the company's ratings.
Ratings Rationale
The transaction is expected to close by the end of 2012. If the
transaction closes as planned, it is expected that Synchronous'
debt will be repaid upon closing. The acquisition does not affect
Synchronous' existing ratings but Moody's will withdraw all of the
company's ratings at the close of the transaction.
The following summarizes the current ratings:
Corporate family rating at Caa1;
Probability of default rating at Caa1.
$10 million senior secured revolving credit facility due 2013
rating at Caa1 (LGD-3, 49%)
$75 million senior secured term loan due 2014 rating at Caa1
(LGD-3, 49%)
The principal methodology used in rating Synchronous Aerospace
Group was the Global Aerospace and Defense Industry Methodology
published in June 2010. Other methodologies used include Loss
Given Default for Speculative-Grade Non-Financial Companies in the
U.S., Canada and EMEA published in June 2009.
Synchronous Aerospace Group is a manufacturer of structural
components for several aircraft platforms, including the B737 and
other Boeing legacy models, and military aerospace and space
industries. Over 70% of sales are to the commercial aerospace
sector with the remainder primarily to the defense industry.
Synchronous is majority owned by the private equity firm
Littlejohn & Co., LLC.
SYNCREON HOLDINGS: Moody's Affirms 'B2' CFR/PDR; Outlook Negative
-----------------------------------------------------------------
Moody's Investors Service has affirmed the B2 corporate family
rating of syncreon Holdings Ltd., and changed the ratings outlook
to negative from stable. At the same time, Moody's has assigned a
B3 rating to syncreon's proposed $100 million senior unsecured
notes due 2018. The rating actions are in consideration of
increasing leverage that will result from the company's planned
use of a substantial portion of the proceeds from the contemplated
notes offering to fund a distribution to its shareholders.
Rating Rationale
Syncreon's ratings outlook was changed to negative from stable,
reflecting the material increase in debt that the company will
undertake to fund a sizeable cash distribution to shareholders. On
November 28, 2012, syncreon announced its plans to issue $100
million in senior unsecured notes, with approximately $80 million
of the proceeds to be used to fund a distribution to shareholders
and vested management option holders. Moody's believes this
transaction, which raises total debt (including Moody's standard
adjustments) by approximately 15%, represents a willingness by the
company to undertake an aggressive shareholder return policy.
Credit metrics, which are currently well positioned for the B2
rating, will deteriorate as a result of this transaction to levels
more closely associated with B3-rated companies. Debt to EBITDA is
estimated to increase from approximately 5.2 times (LTM September
2012) to almost 6 times. EBIT to Interest will decline, from
approximately 1.4 times to under 1.0 time. While these metrics are
considerably weaker relative to other B2 rated companies, Moody's
notes that syncreon's EBITDA is influenced by a substantial amount
of losses that the company has reported in foreign currency
exchange translation. Such losses should be considered in the
company's financial profile, as they are indicative of the long
term exposure that companies with broad international corporate
structures and operations such as syncreon face in terms of long
term currency risk. However, over the near term, such adjustments
to the company's earnings have little impact on syncreon's cash
flow and liquidity. In this context, leverage remains appropriate
for the B2 rating: Funds from Operations to Debt, which was
approximately 13% LTM September 2012, decreases to an estimated
11.5% as a result of this transaction. Nonetheless, Moody's views
the planned debt-funded distribution as an aggressive shareholder
return initiative that removes capital from the company that could
otherwise be used for growth or protection against a potential
business downturn.
Offsetting the aggressive financial policy implied by the proposed
transaction, the B2 corporate family rating positively considers
syncreon's ability to achieve solid returns and operating margins
that are superior to those typical of many of the company's
competitors in the global supply chain logistics sector. This is a
key differentiating factor between syncreon and many of its
competitors. Solid margins, along with expectations for modest
revenue and earnings growth in its core businesses, will be
important factors in Syncreon's ability to restore credit metrics
to levels appropriate for B2-rated companies over the next year or
two.
Ratings could be revised downward if the company fails to meet its
operating plans, possibly due to unexpected weakness in economic
conditions affecting its key markets, or if it aggressively
pursues large levered acquisitions that prove difficult to
integrate, resulting in deteriorating profitability and weaker
credit metrics.
Specifically, a downgrade could be warranted if: operating margins
were to fall below 8% for an extended period, EBIT to Interest
were sustained below 1.2 times, FFO to Debt were to fall below
10%, or Debt to EBITDA remains above 5.5 times. A weakened
liquidity condition, possibly characterized by increased reliance
on use of the credit facility to make up for cash shortfalls or
tightness to prescribed financial covenants, could also result in
a ratings downgrade
Since debt is not likely to be reduced materially over the medium
term, ratings are not expected to be upgraded over the near term.
However, over the longer term, operating improvements or de-
leveraging that would result in Debt to EBITDA of less than 4
times and EBIT to Interest of over 2 times along with positive
free cash flow generation to bolster liquidity would be factors
that could lead to upward rating consideration.
Assignments:
Issuer: syncreon Holdings
Senior Unsecured Regular Bond/Debenture, Assigned B3 (LGD4,
59%)
Affirmations:
Issuer: syncreon Holdings
Corporate Family Rating, Affirmed at B2
Probability of Default Rating, Affirmed at B2
Senior Unsecured Regular Bond/Debenture, Affirmed at B3 (LGD4,
59%)
Outlook Actions:
Issuer: syncreon Holdings
Outlook, Changed To Negative From Stable
Syncreon Holdings Ltd., an Irish public limited company with
headquarters in Auburn Hills, MI, is provider of logistics and
supply chains solutions.
SYNCREON HOLDINGS: S&P Keeps 'B+' Notes Rating Over $100MM Add-On
-----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B+' corporate
credit rating on syncreon Holdings Ltd. The outlook is stable. "At
the same time, we affirmed our 'B' issue-level rating on the
company's senior unsecured notes after a proposed $100 million
add-on, to total $400 million. The '5' recovery rating indicates
our expectation for a modest (10%-30%) recovery in a default
scenario," S&P said.
"The rating on syncreon's unsecured notes reflects the increased
amount of outstanding notes after the transaction. The company
will use the proceeds from the notes issuance for a capital
distribution, payments to vested management option holders and
general corporate purposes. The affirmation on the corporate
credit rating reflects syncreon's 'weak' business risk profile
as a global specialized contract logistics and supply chain
provider, as well as its 'aggressive' financial risk profile,"
said Standard & Poor's credit analyst Carol Hom. "For 2013, we
expect the company's revenues to continue to increase gradually,
by 5%-6%, reflecting moderate growth in its end markets as the
global economy continues it slow recovery. We also expect the
company's credit measures to improve slightly in 2013, primarily
because of organic growth and improvement in operating
performance. We believe the company's cash balance, adequate
availability under its revolver, and our expectation of good
free cash flow will continue to support its 'adequate' liquidity.
We view syncreon's management and governance to be 'fair,'" S&P
said.
"Our assessment of the company's weak business risk profile
primarily reflects its continuing participation in the highly
fragmented and competitive logistics industry and its improved but
still meaningful customer and end-market concentration. We expect
that its services will remain for companies in the technology and
automotive industries, with its top five customers likely to
account for more than 40% of its revenue in 2012. It has a low
market penetration rate, but we expect that its underlying
industry fundamentals will remain favorable. In addition, we
believe syncreon should continue to benefit from its long-standing
customer relationships and longer-term contracts. We believe the
company will still operate under a flexible, asset-light model and
enjoy relatively good geographic diversity. We estimate that more
than 60% of its revenues will come from outside the U.S.," S&P
said.
"We expect demand for syncreon's services to continue to gradually
improve in 2013--a continuation of trends that began in 2010
because of continued recovery in end markets. For its technology
segment, we expect revenue growth to be similar to our economists'
current forecast for high-tech growth of 6% to 7%. For the
automotive segment, we estimate that revenue growth will be
roughly 5%, similar to our expectation of growth for this industry
for the year. We project the company's EBITDA margins to be about
12%-13%, reflecting the effects of increased selling, general, and
administrative costs associated with a continued increase in
demand," S&P said.
S&P continues to view the company's financial risk profile as
"aggressive." "Pro forma for the transaction, we expect the ratio
of total debt to EBITDA to be roughly 5x as of Sept. 30, 2012.
Although this is at the higher end of our expectations, it is
within our expectations for the rating. We believe credit measures
will improve through 2013 with total debt to EBITDA at about 4.5x.
At the current rating, we expect syncreon to continue to maintain
debt to EBITDA of 4x to 5x. Our rating allows syncreon some
capacity for small acquisitions, but we don't incorporate the
possibility of a significant acquisition or other meaningful
shareholder initiatives in 2012 into our analysis. The company is
majority-owned by private equity firm GenNx360 Capital Partners,"
S&P said.
"The outlook is stable. We believe the company will continue to
operate with credit measures commensurate for the ratings.
However, we could lower the ratings if a worse-than-expected
market downturn or loss of contracts with key customers cause
revenue and margins to contract by more than 10% and 100 basis
points, respectively, or if additional debt hurts liquidity or
causes meaningful deterioration of credit measures--for example,
if debt to EBITDA exceeds 5x for an extended period. The company's
weak business profile, coupled with its majority ownership by a
private-equity firm, limits any potential for an upgrade," S&P
said.
Syncreon does not release its financial results publicly.
THOMPSON CREEK: Plans to Offer $350 Million Senior Secured Notes
----------------------------------------------------------------
Thompson Creek Metals Company Inc. intends to offer, subject to
market and other conditions, $350,000,000 of its Senior Secured
First Priority Notes due 2018.
The Company intends to use the proceeds from the offering for
general corporate purposes, including capital expenditures
relating to the development of its Mt. Milligan copper-gold mine.
In connection with the closing of this offering, the Company
intends to terminate its revolving credit facility, under which no
debt is outstanding.
The Senior Secured Notes will be fully and unconditionally
guaranteed by certain wholly-owned subsidiaries of the Company.
The Senior Secured Notes and the related guarantees will be
secured by a first-priority lien subject to permitted liens on
substantially all of the Company's and the guarantors' property
and assets. The Senior Secured Notes are not convertible into
equity of Thompson Creek.
The offering is being made in the United States pursuant to an
effective shelf registration statement that has been filed with
the Securities and Exchange Commission. A preliminary prospectus
supplement related to the offering will be filed with the SEC and
will be available on the SEC's Web site at http://www.sec.gov
The offering is being made in Canada pursuant to an effective
Canadian base shelf prospectus that has been filed on SEDAR. A
preliminary prospectus supplement related to the offering will be
filed with, and be available on, SEDAR at http://www.sedar.com
Copies of the preliminary prospectus supplement and the
accompanying prospectus relating to the Senior Secured Notes may
be obtained from the Sole Book-Running Manager, Deutsche Bank
Securities Inc., by telephone at 1-800-503-4611, by e-mail to
prospectus.CPDG@db.com or by mail to Deutsche Bank Securities
Inc., Attention: Prospectus Group, 60 Wall Street, New York, NY
10005-2836.
About Thompson Creek Metals
Thompson Creek Metals Company Inc. is a growing, diversified North
American mining company. The Company produces molybdenum at its
100%-owned Thompson Creek Mine in Idaho and Langeloth
Metallurgical Facility in Pennsylvania and its 75%-owned Endako
Mine in northern British Columbia. The Company is also in the
process of constructing the Mt. Milligan copper-gold mine in
central British Columbia, which is expected to commence production
in 2013. The Company's development projects include the Berg
copper-molybdenum-silver property and the Davidson molybdenum
property, both located in central British Columbia. Its principal
executive office is in Denver, Colorado and its Canadian
administrative office is in Vancouver, British Columbia. More
information is available at http://www.thompsoncreekmetals.com
The Company's balance sheet at June 30, 2012, showed $3.45 billion
in total assets, $1.56 billion in total liabilities and $1.88
billion in shareholders' equity.
* * *
As reported by the TCR on Aug. 14, 2012, Standard & Poor's Ratings
Services lowered its long-term corporate credit rating on Denver-
based molybdenum miner Thompson Creek Metals Co. to 'CCC+' from
'B-'. "These rating actions follow Thompson Creek's announcement
of weaker production and higher cost expectations through next
year," said Standard & Poor's credit analyst Donald Marleau.
In the May 9, 2012, edition of the TCR, Moody's Investors Service
downgraded Thompson Creek Metals Company Inc.'s Corporate Family
Rating (CFR) and probability of default rating to Caa1 from B3.
Thompson Creek's Caa1 CFR reflects its concentration in
molybdenum, relatively small size, heavy reliance currently on two
mines, and the need for favorable volume and price trends in order
to meet its increasingly aggressive capital expenditure
requirements over the next several years.
THOMPSON CREEK: Moody's Maintains 'Caa1' CFR/PDR
------------------------------------------------
Moody's Investors Service raised Thompson Creek Metals Company
Inc.'s speculative grade liquidity rating to SGL-3 from SGL-4 as
the company has closed its previously announced $350 million
senior secured notes issue, strengthening its liquidity. The
company's Caa1 corporate family and probability of default
ratings, B1 senior secured notes rating, Caa2 senior unsecured
notes ratings, and Caa2 (hyb) rating of the debt component of
tangible common equity units are unchanged. The company's rating
outlook is stable.
Rating Upgrade:
Speculative Grade Liquidity Rating, to SGL-3 from SGL-4
Ratings Unchanged:
Corporate Family Rating, Caa1
Probability of Default Rating, Caa1
$350 million senior secured notes due 2017, B1 (LGD2, 16%)
$350 million senior unsecured notes due 2018, Caa2 (LGD5, 75%)
$200 million senior unsecured notes due 2019, Caa2 (LGD5, 75%)
$35 million debt component of tangible common equity units,
Caa2 (hyb) (LGD5, 75%)
Outlook, Stable
Ratings Rationale
Thompson Creek's Caa1 corporate family rating primarily reflects
its concentration in molybdenum production, small size and
dependence on two mines, and substantial risks associated with its
construction of the Mt. Milligan copper-gold mine. The rating also
reflects the company's high pro forma adjusted leverage (Debt/
EBITDA above 10x) and Moody's expectation that continuing weak
molybdenum prices and substantial capital expenditure requirements
will cause free cash flow to remain negative through 2013. The
rating acknowledges the long operating history of Thompson Creek's
mines, low political risk, ample reserve base at its molybdenum
mines (about 14 years) and at Mt Milligan (22 years), and sizeable
cash balances. In addition, the rating reflects Moody's
expectation that the company's adjusted Debt/ EBITDA has the
potential to fall below 6x in 2014 after Mt. Milligan comes on
stream (currently expected to occur in the fourth quarter 2013).
The company's SGL-3 liquidity rating considers that its cash
balances of about $710 million, combined with $207 million of
proceeds from the Royal Gold streaming transaction to be received
through the second quarter of 2013 will be sufficient to cover
anticipated negative free cash flow of $700 million through 2013.
As well, the company has limited near-term debt maturities ($29
million), and no financial maintenance covenants. Tempering these
factors are the absence of a committed revolving credit facility
and the need for Thompson Creek to cash collateralize its letters
of credit (about $25 million). The company has limited flexibility
to sell assets to augment its liquidity should the need arise.
The stable outlook reflects Moody's expectation that Thompson
Creek's earnings will not improve meaningfully through the next 12
to 18 months as molybdenum prices are expected to remain soft, but
the company will have sufficient liquidity to fund its operations
and expansion project.
Thompson Creek's ratings could be upgraded if it successfully
completes the Mt. Milligan mine and appears poised to generate
positive free cash flow on a sustained basis and maintain adjusted
Debt/EBITDA below 5x. The company's ratings could be downgraded if
molybdenum prices decline sharply, or if development costs at Mt.
Milligan escalate such that the company appears likely to sustain
adjusted Debt/EBITDA above 7x. The ratings could also be
downgraded if the company fails to maintain sufficient liquidity
to fund its requirements over the next year.
The principal methodology used in rating Thompson Creek was the
Global Mining Industry Methodology published in May 2009. Other
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the U.S., Canada and EMEA
published in June 2009.
Thompson Creek Metals Company Inc., one of the world's largest
molybdenum producers, operates through two open pit mines and two
processing centers in the United States and Canada. The company is
currently constructing the Mt. Milligan copper-gold mine in
northern British Columbia, whose operations are expected to
commence in late 2013. Revenue from the last twelve months ended
September 30, 2012 was $419 million with about 19 million pounds
of molybdenum produced. Thompson Creek is headquartered in Denver,
Colorado with an administrative office in Vancouver, British
Columbia, Canada.
TRAFFIC CONTROL: Committee Wins Approval of Liquidation Plan
------------------------------------------------------------
The Hon. Kevin J. Carey of the U.S. Bankruptcy Court for the
District of Delaware has confirmed the plan of liquidation filed
by the Committee of Unsecured Creditors for Traffic Control and
Safety Corporation and its affiliates, pursuant to a TCSC
Liquidating Agreement.
Under the plan of liquidation, GlassRatner Advisory and Capital
Group LLC will be the liquidating trustee.
About Traffic Control
Traffic Control and Safety Corporation and six subsidiaries filed
Chapter 11 petitions (Bankr. D. Del. Lead Case No. 12-11287) on
April 20, 2012. TCSC is the largest independent provider of
safety services and products in California and Hawaii. Formed by
Marwit Capital Partners II, L.P., in June 2007, TCSC has 430 full-
time employees and serves state and local agencies, public works
organizations, general contractors, the motion picture industry,
and provide services at special events.
TCSC estimated assets of up to $50 million and debts of up to
$100 million as of the Chapter 11 filing. Toomey Industries, Inc.
disclosed $10,322,077 in assets and $67,844,144 in liabilities as
of the Chapter 11 filing.
Judge Kevin J. Carey presides over the case. Latham & Watkins LLP
serves as the Debtors' bankruptcy counsel and Young Conaway
Stargatt & Taylor LLP as Delaware counsel. Broadway Advisors, LLC
serves as financial advisors, and Epiq Bankruptcy Solutions LLC as
the claims and notice agent.
The Debtors have won authority to (i) use cash collateral in which
the First Lien Lender has an interest, and (ii) obtain
postpetition financing from Fifth Street Finance Corp. and other
entities in the maximum amount of $12,775,000.
The Debtors have canceled an auction with only their biggest
lender bidding for the assets.
Roberta A. DeAngelis, the U.S. Trustee for Region 3, appointed
five unsecured creditors to the Official Committee of Unsecured
Creditors. The Committee tapped Potter Anderson & Corroon LLP as
its counsel and GlassRatner Advisory & Capital Group LLP as its
financial advisor.
TRIBUNE COMPANY: Moody's Assigns 'Ba3' CFR; Rates Sr. Loan 'Ba3'
----------------------------------------------------------------
Moody's Investors Service assigned a Ba3 rating to Tribune
Company's proposed $1,100 million 1st lien senior secured term
loan as well as a Ba3 Corporate Family Rating and Probability of
Default Rating. Net proceeds from the new term loan plus balance
sheet cash will fund roughly $4.2 billion of cash payments for
creditor settlements and expenses including transaction fees. The
rating outlook is stable.
Assigned:
Issuer: Tribune Company
Corporate Family Rating (CFR): Assigned Ba3
Probability of Default Rating (PDR): Assigned Ba3
$1,100 million 1st Lien Sr Secured Term Loan (matures in 7
years): Assigned Ba3, LGD4 -- 51%
Outlook Actions:
Issuer: Tribune Company
Outlook is Stable.
Ratings Rationale
The Ba3 Corporate Family Rating reflects moderate pro forma
debt-to-EBITDA of 3.0x (including Moody's standard adjustments)
and the national scale of Tribune's media assets. These properties
generate $700 million or more of cash flow from broadcasting and
publishing operations including cash distributions from
investments in faster growing cable network and online media
assets. Adjusted EBITDA is more than sufficient to cover capital
spending, debt service, as well as income tax and non-operating
tax payments resulting in a minimum 13% free cash flow-to-debt
ratios in 2013 and increasing thereafter, despite being a full tax
payer. Tribune owns one of the largest television broadcasting
groups including 23 television stations in large markets with 35%
coverage of US households. Tribune's superstation, WGN America,
generates meaningful carriage fees and management's focus on
growing retransmission fees for remaining stations is expected to
result in more than approximately 20% of broadcasting revenues
being generated from recurring fees and copyright royalties by
2015 compared to 10% currently. Moody's expects growth in EBITDA
from the broadcasting segment over the 2-year cycle plus cash
distributions from media investments will offset continued EBITDA
declines from publishing operations. Extensive cost-cutting
initiatives under Chapter 11 protection have kept publishing
assets cash flow positive with a 14% cash flow contribution
margin, despite a 50% revenue drop since 2006 to $2 billion
currently. Exposure to publishing currently stands at 33% of
consolidated adjusted EBITDA.
Moody's believes cash flow contributions from newspaper operations
will continue to decline and, combined with lower margins, will be
a drag on performance. Tribune's earnings will continue to shift
toward better-positioned local broadcast properties supplemented
by cash dividends from equity investments. Proposed terms permit
Tribune to fund dividends from the sale of publishing and real
estate assets subject to certain conditions. The potential leakage
of real estate value and the loss of EBITDA contribution from
publishing with no reduction in debt would be credit negative,
only partially offset by potentially reduced exposure to
publishing.
The Ba3 CFR incorporates Moody's expectation that, excluding the
impact of potential divestitures, Tribune's total revenues will
decline in the mid single-digit percentage range in 2013. The
decline will be driven by the lack of significant political
television ad revenues, continued declines in publishing revenues,
and the absence of non-recurring gains related to copyright
royalties booked in the first half of 2012 partially offset by low
single-digit percentage growth in core broadcasting revenues.
"Moody's believes competitive pressures, media fragmentation, and
tepid economic growth create a soft advertising environment which
will lead to low single-digit percentage growth for core
broadcasting revenues and continued publishing revenue erosion,"
stated Carl Salas, Moody's Vice President and Senior Analyst.
Revenue concentration with CW affiliates and the typical #5 market
ranking of Tribune's stations behind the Big Four networks weigh
on debt ratings, as advertisers typically seek stations ranked #1
or #2. This weakness is notable in the largest markets where
the company faces stiff competition from the owned and operated
stations of the Big Four. Tribune experienced an approximate 5%
decrease in revenues for its 10 television stations in markets
ranked #1 through #12 for the nine months ended September 30, 2012
compared to last year, excluding the negative impact from the
temporary blackout with Cablevision. The proposed credit
facilities include an asset-backed $300 million revolver
commitment (unrated) and a covenant-lite $1.1 billion term loan.
Moody's expects Tribune to have good liquidity over the next 12 to
18 months with at least $300 million in cash balances plus a
minimum of $150 million of borrowing capacity under the $300
million ABL revolver.
The stable outlook reflects Moody's expectation that EBITDA growth
in the broadcasting segment over a 2-year cycle, augmented by cash
distributions from media investments, will offset continued EBITDA
declines in the publishing segment. For 2013, Moody's expects
total revenues to decline in the mid-single digit percentage range
followed by a rebound in 2014 given election year demand for
political advertising and meaningful growth in retransmission
fees. The outlook also reflects Moody's expectation that 2-year
average debt-to-EBITDA leverage will remain below 3.50x (including
Moody's standard adjustments) and Tribune will maintain at least
good liquidity over the next 12-18 months providing the company
flexibility to execute its operating strategies and manage
unforeseen capital needs. The outlook incorporates the potential
for the sale of publishing and real estate assets with proceeds
used to fund dividends, as permitted under the proposed credit
agreement, accompanied by partial debt reduction. In November
2012, the FCC approved a permanent waiver for Tribune's cross
ownership in Chicago, and approved temporary waivers for the
remaining four markets (Los Angeles, New York, South Florida, and
Hartford). Moody's notes Tribune has consistently been approved
for cross-ownership waivers in these markets.
Ratings could be downgraded if revenue declines in the publishing
segment accelerate or if overall operating weakness, acquisitions,
cash distributions to shareholders, or other leveraging events
lead to 2-year average debt-to-EBITDA ratios being sustained above
3.75x (including Moody's standard adjustments) or 2-year average
free cash flow-to-debt ratios being sustained below 7%. Failure to
maintain at least good liquidity to absorb a cyclical downturn in
advertising demand could also result in a downgrade. Ratings could
be upgraded if publishing revenues stabilize, broadcasting
stations demonstrate consistent growth in core advertising
revenue, and Moody's comes to expect that financial policies will
remain conservative such that 2-year average debt-to-EBITDA ratios
are expected to be sustained below 2.50x (including Moody's
standard adjustments) and 2-year average free cash flow-to-debt
ratios are expected to be sustained in the low double digit
percentage range or above.
Tribune Company is headquartered in Chicago, IL, and operates
broadcasting assets including 23 television stations and one radio
station (36% of estimated 2012 revenue, 48% adjusted EBITDA) in 19
markets ranked #1 to #52, including the top five markets and seven
of the top ten markets reaching 35% of U.S. households. The
company also operates the third largest newspaper group in the
U.S. within its publishing segment (64% of estimated 2012 revenue,
33% adjusted EBITDA). The Chicago Tribune, Los Angeles Times and
six other metropolitan dailies have a combined daily and Sunday
circulation of 1.8 million and 2.9 million, respectively. In
addition, Tribune holds minority equity interests in several media
enterprises including TV Food Network, Classified Ventures, and
CareerBuilder which contribute quarterly cash distributions (19%
of estimated 2012 adjusted EBITDA). The company filed for Chapter
11 bankruptcy protection in December 2008 and is expected to
emerge in the very near future with a significantly lower debt
load. As proposed, Tribune is expected to exit with $1.1 billion
of funded debt, significantly reduced from $12.9 billion related
to the take private transaction led by Sam Zell. Certain creditors
will become owners with funds of Oaktree Capital Management (23%
ownership), Angelo, Gordon & Company (9%), and JPMorgan Chase (9%)
becoming the largest shareholders and controlling the board of
directors. Revenues for the 12 months ended September 30,
2012 totaled roughly $3.1 billion.
The principal methodology used in rating Tribune Company was the
Global Broadcast and Advertising Related Industries Methodology
published in May 2012. Other methodologies used include Loss Given
Default for Speculative-Grade Non-Financial Companies in the U.S.,
Canada and EMEA published in June 2009.
TRIDENT MICROSYSTEMS: Mark Wehrly Discloses 11.6% Equity Stake
--------------------------------------------------------------
In an amended Schedule 13G filing with the U.S. Securities and
Exchange Commission, Mark C. Wehrly and his affiliates disclosed
that, as of Nov. 14, 2012, they beneficially own 21,384,973 shares
of common stock of Trident Microsystems, Inc., representing 11.7%
of the shares outstanding. Mr. Wehrly previously reported
beneficial ownership of 10,267,973 common shares or a 5.6% equity
stake as of Oct. 16, 2012. A copy of the amended filing is
available for free at http://is.gd/5VDTYB
About Trident Microsystems
Sunnyvale, California-based Trident Microsystems, Inc., currently
designs, develops, and markets integrated circuits and related
software for processing, displaying, and transmitting high quality
audio, graphics, and images in home consumer electronics
applications such as digital TVs, PC-TV, and analog TVs, and set-
top boxes. The Company has research and development facilities in
Beijing and Shanghai, China; Freiburg, Germany; Eindhoven and
Nijmegen, The Netherlands; Belfast, United Kingdom; Bangalore and
Hyderabad, India; Austin, Texas; and Sunnyvale, California. The
Company has sales offices in Seoul, South Korea; Tokyo, Japan;
Hong Kong and Shenzhen, China; Taipei, Taiwan; San Diego,
California; Mumbai, India; and Suresnes, France. The Company also
has operations facilities in Taipei and Kaoshiung, Taiwan; and
Hong Kong, China.
Trident Microsystems and its Cayman subsidiary, Trident
Microsystems (Far East) Ltd. filed for Chapter 11 bankruptcy
protection (Bankr. D. Del. Lead Case No. 12-10069) on Jan. 4,
2011. Trident said it expects to shortly file for protection in
the Cayman Islands.
Judge Christopher S. Sontchi presides over the case. Lawyers at
DLA Piper LLP (US) serve as the Debtors' counsel. FTI Consulting,
Inc., is the financial advisor. Union Square Advisors LLC serves
as the Debtors' investment banker. PricewaterhouseCoopers LLP
serves as the Debtors' tax advisor and independent auditor.
Kurtzman Carson Consultants is the claims and notice agent.
Trident had $310 million in assets and $39.6 million in
liabilities as of Oct. 31, 2011. The petition was signed by David
L. Teichmann, executive VP, general counsel & corporate secretary.
Pachulski Stang Ziehl & Jones LLP represents the Official
Committee of Unsecured Creditors. The Committee tapped to retain
Fenwick & West LLP as its special tax and claims counsel, Imperial
Capital, LLC, as its investment banker and financial advisor.
Dewey & LeBoeuf initially represented the statutory committee of
equity security holders. After Dewey's own bankruptcy filing,
Proskauer Rose LLP took over as lead counsel. The equity
committee also has tapped Campbells as Cayman Islands counsel, and
Quinn Emanuel Urquhart & Sullivan, LLP as conflicts counsel.
As of Sept. 30, 2012, the Debtor had total assets of
$274.34 million, total liabilities of $37.34 million and total
stockholders' equity of $237 million.
TRIDENT USA: S&P Keeps 'B' Rating on $35MM Second-Lien Term Loan
----------------------------------------------------------------
The ratings on Trident USA Health Services LLC remain unchanged
with the company's intention to issue an incremental $35 million
second-lien term loan facility to fund acquisition activity and
repay outstanding revolver debt. MX USA Inc. and Kan-Di-Ki LLC
are the borrowers of this debt.
"Our rating on Trident reflects our assessment of the company's
business risk profile as 'weak' and the financial risk profile as
'highly leveraged.' We expect revenue to increase by approximately
10% per year, primarily reflecting continued acquisitions and the
expansion of service offerings to existing and acquired customers,
along with steady reimbursement rates on both the federal and
state levels," S&P said.
RATINGS LIST
Trident USA Health Services, LLC
Corporate Credit Rating B/Stable/--
MX USA Inc
Kan-Di-Ki, LLC
$124M second-lien term loan due 2017* CCC+
Recovery Rating 6
* Includes the $35M add-on.
TXCO RESOURCES: Reorganized TXCO, Peregrine Want Judgment Vacated
-----------------------------------------------------------------
As reported by the Troubled Company Reporter on July 31, 2012,
Reorganized TXCO Resources, Inc., won a $15,873,383 judgment
against Peregrine Petroleum, L.L.C., in a lawsuit that accused
Peregrine of misappropriating TXCO's confidential and trade secret
information that Peregrine obtained when the parties engaged in
acquisition talks. Thereafter, Peregrine and Reorganized TXCO, as
successor in interest to TXCO Resources, Inc., filed a joint
motion to vacate the Bankruptcy Court's judgment and opinion.
In a Nov. 27, 2012 Order available at http://is.gd/gPO76Ofrom
Leagle.com, Bankruptcy Judge Ronald B. King noted that as
indicated in the Joint Motion to Vacate, the Court presently lacks
jurisdiction to grant the FED. R. CIV. P. 60(b) relief sought
therein, due to the pendency of the parties' Appeal and Cross-
Appeal in the United States District Court for the Western
District of Texas. However, pursuant to well-established
procedures approved by the United States Court of Appeals for the
Fifth Circuit and nearly all other circuit courts of appeals, and
as set out in the Joint Motion to Vacate and the authorities cited
therein, the Bankruptcy Court does have authority to indicate that
it would grant the Joint Motion to Vacate if the District Court
were to remand Cause No. 5:12-cv-01058-OLG for the limited purpose
of re-vesting the Court with jurisdiction to consider and rule on
such motion.
About TXCO Resources
TXCO Resources, Inc., was a publicly traded oil and gas
exploration and production company based in San Antonio, Texas,
which, along with its subsidiaries, filed a voluntary Chapter 11
case (Bankr. W.D. Tex. Case No. 09-51807) on May 17, 2009. Prior
to confirmation, TXCO agreed to sell most of its oil and gas
assets to Newfield Exploration Company and Anadarko E&P Company
L.P. The sale was included in TXCO's Second Amended Plan of
Reorganization. On Jan. 27, 2010, the Court entered an order
confirming the Plan. On Feb. 11, 2010, the Plan became effective
and Reorganized TXCO emerged from Chapter 11. All creditors were
paid in full, including interest and attorney's fees, and equity
holders received a distribution. The remaining oil and gas assets
that were not transferred to Newfield or Anadarko were transferred
to the TXCO Liquidating Trust. Newfield is the only shareholder
of record in Reorganized TXCO and the sole beneficiary of the
Liquidating Trust.
UNIGENE LABORATORIES: Signs Licensing Agreement with Tarix
----------------------------------------------------------
Unigene Laboratories, Inc., and Tarix Pharmaceuticals have entered
into a definitive licensing agreement to develop an oral
formulation of TXA127, Tarix's lead peptide drug candidate. The
oral formulation of TXA127 is being developed jointly by Unigene
and Tarix under a previously agreed upon feasibility program
whereby the companies leveraged Unigene's Peptelligence technology
platform to enable enhanced oral delivery of TXA127.
According to terms of the licensing agreement, Tarix will have an
exclusive worldwide license to Unigene's Peptelligence technology
covering the use of that technology with Angiotensin (1-7), the
pharmaceutical ingredient in TXA127, as well as its functional
equivalents, analogues or derivatives. In return for the license,
Tarix will pay Unigene a percentage of revenues, if any, derived
from the direct sales of any oral dose form of an approved
Angiotensin (1-7) product by Tarix or from any up-front, milestone
or royalties received by Tarix from a third-party sub-licensee of
Unigene's Peptelligence technology with respect to any Angiotensin
(1-7) product. There is no upfront payment being made by Tarix to
Unigene in connection with the execution of the license.
Ashleigh Palmer, Unigene's chief executive officer, commented,
"Our licensing agreement with Tarix is further validation of the
strength of Unigene's Peptelligence platform and the tremendous
value that our feasibility program offers to innovators in the
therapeutic peptide field. We are very excited to extend our
feasibility partnership with Tarix into a fully-fledged licensing
agreement and to work with Dr. Franklin and his company's
scientific team to advance the development of what we all agree is
a potentially groundbreaking drug."
Rick Franklin, M.D., Ph.D., chief executive officer of Tarix,
commented, "TXA127 has always been a high-value opportunity, given
its potential to treat multiple therapeutic conditions. However,
our ability to potentially deliver TXA127 orally will
significantly enhance its transactability with prospective
advanced-stage development partners and serves to greatly
differentiate it from other peptide-based drugs. Based on our
experience, Unigene's Peptelligence technology and feasibility
program offer the potential to truly transform the therapeutic
peptide market."
In September, data from a feasibility study of TXA127 demonstrated
that the oral formulation produced extremely high exposure in the
blood that resulted in a several-fold increase in bioavailability
as compared to the oral delivery of the unformulated drug, and was
equal to or greater than that achieved by the current subcutaneous
formulation.
About Unigene
Unigene Laboratories, Inc. OTCBB: UGNE) -- http://www.unigene.com/
-- is a biopharmaceutical company focusing on the oral and nasal
delivery of large-market peptide drugs.
Unigene reported a net loss of $17.92 million in 2011, a net loss
of $27.86 million in 2010, and a net loss of $13.38 million in
2009.
The Company's balance sheet at June 30, 2012, showed $11.69
million in total assets, $77.56 million in total liabilities and a
$65.87 million total stockholders' deficit.
Grant Thornton LLP, in New York, expressed substantial doubt about
the Company's ability to continue as a going concern following the
2011 financial results. The independent auditors noted that the
Company has incurred a net loss of $17,900,000 during the year
ended Dec. 31, 2011, and, as of that date, has an accumulated
deficit of approximately $189,000,000 and the Company's total
liabilities exceeded total assets by $55,138,000.
Bankruptcy Warning
Under the Company's amended and restated March 2010 financing
agreement with Victory Park Management, LLC, so long as the
Company's outstanding note balance is at least $5,000,000, the
Company must maintain a minimum cash balance equal to at least
$2,500,000 and its cash flow must be at least $2,000,000 in any
fiscal quarter or $7,000,000 in any three consecutive quarters.
"Without additional financing, we will not be able to maintain a
minimum cash balance of $2,500,000, or maintain an adequate cash
flow, in order to avoid default in periods subsequent to
September 30, 2012," the Company said in its quarterly report for
the period ended June 30, 2012. "As a result, we will be in
default under the financing agreement, which would result in the
full amount of our debt owed to Victory Park becoming immediately
due and payable. Even if we are able to raise cash and maintain a
minimum cash balance of at least $2,500,000 through the March 2013
maturity date, there is no assurance that the notes will be
converted into common stock, in which case, we may not have
sufficient cash from operations or from new financings to repay
the Victory Park debt when it comes due. There can be no
assurance that new financings will be available on acceptable
terms, if at all. In the event that we default, Victory Park
could retain control of the Company and will have the ability to
force us into involuntary bankruptcy and liquidate our assets."
UNIGENE LABORATORIES: Defaults Under Victory Park Agreement
-----------------------------------------------------------
Unigene Laboratories, Inc., is in default under its forbearance
agreement with Victory Park Management, LLC, as administrative
agent and collateral agent, and Victory Park Credit Opportunities
Master Fund, Ltd. The Forbearance Agreement relates to the
Amended and Restated Financing Agreement the parties entered into
on March 16, 2010. The default resulted from the Company's
failure to timely file its quarterly report on Form 10-Q for the
period ended Sept. 30, 2012.
While reviewing its draft Form 10-Q for the third quarter, the
Company identified a potential issue in its historic methodology
of accounting for a non-cash embedded derivative liability related
to the senior secured convertible notes issued under the Original
Agreement. As a result, the Company was unable to finalize and
file its Form 10-Q by the SEC's extended filing deadline of
Nov. 21, 2012.
For so long as this event of default is continuing, the unpaid
principal amount of the Notes will bear interest at the default
interest rate, which is the current interest rate under the
Agreement plus 3%. In addition, the Lenders have the right,
following written notice to the Company, to cause the Company to
redeem all or any portion of the Notes.
Errors Found on Annual Reports
On Nov. 21, 2012, the Company's management, in consultation with
its Board of Directors, determined that the Company's financial
statements and other financial information contained in its annual
Form 10-K for the years ended Dec. 31, 2010, and Dec. 31, 2011,
and the condensed financial statements presented in its quarterly
reports on Form 10-Q for the quarterly periods ended March 31,
2010, through June 30, 2012, should no longer be relied upon.
The Company identified a potential issue in its historic
methodology of accounting for a non-cash embedded derivative
liability related to the senior secured convertible notes issued
under the Original Agreement.
Because the Company has engaged independent valuation experts to
assist with the determination of the historical fair value of the
non-cash embedded derivative liability, the Company will require
additional time to complete its analysis and to determine the
extent of the corrections that may be required to properly present
its historical financial statements. Other effects on previously
issued financial statements are also possible. The Company cannot
currently quantify the potential impact of the restatement.
Authorized officers of the Company as well as the Chairman of the
Company's Board of Directors and the Chairman of the Audit
Committee of the Board of Directors have discussed the matters
with Grant Thornton LLP, the Company's independent registered
public accounting firm.
About Unigene
Unigene Laboratories, Inc. OTCBB: UGNE) -- http://www.unigene.com/
-- is a biopharmaceutical company focusing on the oral and nasal
delivery of large-market peptide drugs.
Unigene reported a net loss of $17.92 million in 2011, a net loss
of $27.86 million in 2010, and a net loss of $13.38 million in
2009.
The Company's balance sheet at June 30, 2012, showed
$11.69 million in total assets, $77.56 million in total
liabilities and a $65.87 million total stockholders' deficit.
Grant Thornton LLP, in New York, expressed substantial doubt about
the Company's ability to continue as a going concern following the
2011 financial results. The independent auditors noted that the
Company has incurred a net loss of $17,900,000 during the year
ended Dec. 31, 2011, and, as of that date, has an accumulated
deficit of $189,000,000 and the Company's total liabilities
exceeded total assets by $55,138,000.
Bankruptcy Warning
Under the Company's amended and restated March 2010 financing
agreement with Victory Park Management, LLC, so long as the
Company's outstanding note balance is at least $5,000,000, the
Company must maintain a minimum cash balance equal to at least
$2,500,000 and its cash flow must be at least $2,000,000 in any
fiscal quarter or $7,000,000 in any three consecutive quarters.
"Without additional financing, we will not be able to maintain a
minimum cash balance of $2,500,000, or maintain an adequate cash
flow, in order to avoid default in periods subsequent to
September 30, 2012," the Company said in its quarterly report for
the period ended June 30, 2012. "As a result, we will be in
default under the financing agreement, which would result in the
full amount of our debt owed to Victory Park becoming immediately
due and payable. Even if we are able to raise cash and maintain a
minimum cash balance of at least $2,500,000 through the March 2013
maturity date, there is no assurance that the notes will be
converted into common stock, in which case, we may not have
sufficient cash from operations or from new financings to repay
the Victory Park debt when it comes due. There can be no
assurance that new financings will be available on acceptable
terms, if at all. In the event that we default, Victory Park
could retain control of the Company and will have the ability to
force us into involuntary bankruptcy and liquidate our assets."
UNIVERSAL SOLAR: Incurs $268,800 Net Loss in Third Quarter
----------------------------------------------------------
Universal Solar Technology, Inc., filed with the U.S. Securities
and Exchange Commission its quarterly report on Form 10-Q
disclosing a net loss of $268,820 on $19,770 of sales for the
three months ended Sept. 30, 2012, compared with a net loss of
$631,750 on $1.07 million of sales for the same period a year ago.
The Company reported a net loss of $1.05 million on $618,200 of
sales for the nine months ended Sept. 30, 2012, compared with a
net loss of $1.88 million on $2.80 million of sales for the same
period during the prior year.
The Company's balance sheet at Sept. 30, 2012, showed $11.46
million in total assets, $16.03 million in total liabilities and a
$4.56 million total stockholders' deficiency.
A copy of the Form 10-Q is available for free at:
http://is.gd/OwzgDT
About Universal Solar
Headquartered in Zhuhai City, Guangdong Province, in the People's
Republic of China, Universal Solar Technology, Inc., was
incorporated in the State of Nevada on July 24, 2007. It operates
through its wholly owned subsidiary, Kuong U Science & Technology
(Group) Ltd., a company incorporated in Macau, the People's
Republic of China on May 10, 2007, and its subsidiary, Nanyang
Universal Solar Technology Co., Ltd., a wholly foreign owned
enterprise registered on Sept. 8, 2008 under the wholly foreign-
owned enterprises laws of the PRC.
The Company primarily manufactures, markets and sells silicon
wafers to manufacturers of solar cells. In addition, the Company
manufactures photovoltaic modules with solar cells purchased from
third parties.
After auditing the 2011 results, Paritz & Company, P.A., in
Hackensack, New Jersey, expressed substantial doubt about the
Company's ability to continue as a going concern. The independent
auditors noted that the Company has not generated cash from its
operation, has stockholders' deficiency of $3.50 million and has
incurred net loss of $4.22 million since inception.
UROLOGIX INC: Incurs $1.1-Mil. Net Loss in Sept. 30 Quarter
-----------------------------------------------------------
Urologix, Inc., filed its quarterly report on Form 10-Q, reporting
a net loss of $1.1 million on $4.0 million of sales for the three
months ended Sept. 30, 2012, compared with a net loss of
$1.4 million on $3.1 million of sales for the prior fiscal period.
The Company's balance sheet at Sept. 30, 2012, showed
$16.6 million in total assets, $13.1 million in total liabilities,
and stockholders' equity of $3.5 million.
According to the regulatory filing, the Company's cash and cash
equivalents may not be sufficient to sustain day-to-day operations
for the next 12 months.
"If the Company is unable to generate sufficient liquidity to meet
its needs and in a timely manner, the Company may be required to
further reduce expenses and curtail capital expenditures, sell
assets, or suspend or discontinue operations. If the Company is
unable to make the required payments to Medtronic with respect to
the Prostiva acquisition, it would give Medtronic the right to
terminate the Company's rights to sell the Prostiva product."
A copy of the Form 10-Q is available at http://is.gd/63iM4M
About Urologix, Inc.
Minneapolis, Minnesota-based Urologix, Inc., develops,
manufactures, and markets non-surgical, office-based therapies for
the treatment of the symptoms and obstruction resulting from non-
cancerous prostate enlargement also known as benign prostatic
hyperplasia (BPH). These therapies use proprietary technology in
the treatment of BPH, a disease that affects more than 30 million
men worldwide and is the most common urologic problem for men over
50. The Company markets both the Cooled ThermoTherapy(TM) (CTT)
product line and the Prostiva(R) Radio Frequency (RF) Therapy
System. The Company acquired the exclusive worldwide license to
the Prostiva(R) RF Therapy System in September 2011. These two
technologies are designed to be used by urologists in their
offices without placing their patients under general anesthesia.
* * *
As reported in the TCR on Sept. 28, 2012, KPMG LLP, in
Minneapolis, Minnesota, expressed substantial doubt
about Urologix, Inc.'s ability to continue as a going concern.
The independent auditors noted that the Company has suffered
recurring losses from operations and negative operating cash flows
and has significant current obligations related to the Sept. 6,
2011 acquisition of the Prostiva(R) Radio Frequency (RF) Therapy
System from Medtronic, Inc.
US FOODS: Moody's Affirms 'B3' CFR; Rates Credit Facility 'B3'
--------------------------------------------------------------
Moody's Investors Service assigned a B3 rating to US Foods, Inc.'s
proposed upsized senior secured term loan and affirmed all other
ratings, including the B3 corporate family rating, and continued
the stable outlook. Upon closing, the $350 million in proposed
proceeds will be utilized to partially repay a $702.5 million term
loan set to mature in July 2014.
New ratings assigned:
$1.584 billion ($350 million in new money) senior secured term
loan due 2017 at B3 (LGD3, 47%)
Ratings affirmed include:
Corporate family rating at B3
Probability of default at B3
$425 million senior secured term loan due 2017 at B3 (LGD3,
47%)
$521 million senior subordinated notes due 2017 at Caa2 (LGD6,
93%)
$702.5 million senior secured term loan due 2014 at B3 (LGD3,
47%), which will be reduced by the proposed $350 million in new
proceeds
$400 million senior unsecured notes due 2019 at Caa2 (LGD5,
85%)
Ratings Rationale
"The proposed facility aids liquidity by extending $350 million of
the $702.5 million maturity from 2014 to 2017, however it should
be noted that interest costs rise such that coverage is negatively
impacted, and there remains $350 million still due in 2014,"
stated Moody's Senior Analyst Charlie O'Shea.
US Foods' B3 Corporate Family and Probability of Default ratings
continue to reflect the company's highly leveraged capital
structure and weak credit metrics, positive factors such as its
execution ability and formidable market position as a solid and
defensible number two behind market-leader Sysco in an
increasingly competitive environment led by specialized niche
operators such as Restaurant Depot. The ratings also reflect
Moody's assumption that credit metrics will continue to show only
modest incremental improvement over the next 12 months given an
aggressive financial policy and the fact that much of the
company's cash flows go to service debt and fund capital
expenditures. US Foods' liquidity profile, which is a key ratings
consideration for the company, continues to improve and become
more manageable from a debt maturity perspective with the proposed
effective extension of the maturity of $350 million of the $700
million term loan that is due to mature in July 2014. In the event
the proposed facility is not executed, or the remaining $350
million is not refinanced in a timely manner, liquidity would be
impaired.
The stable rating outlook is based on Moody's expectation that US
Foods' credit metrics will continue to incrementally improve to a
level that is more representative of the current B3 rating and
that the company will execute the proposed new credit facility
that will refinance $350 million of the $700 million term loan
maturing in July 2014, and that the remaining $350 million will be
refinanced in a timely fashion. The stable outlook also reflects
Moody's view that the company's qualitative factors -- a solid
franchise and market position, growing private label percentage,
and stable, though low, margins -- help to balance out its weak
quantitative profile.
At present, there is minimal upward pressure on the company's
ratings given its highly leveraged profile and the aggressive
financial policy mandated by its sponsors. Absent a significant
improvement in operations, Moody's expects only modest
improvements in credit metrics. Quantitatively, an upgrade could
occur if debt/EBITDA sustains at 6 times, EBITA/interest remains
above 1.75 times, and financial policy remains tempered. In the
event the company's overall liquidity profile deteriorates, which
includes the failure to execute the pending refinance of $350
million of the $700 million term loan, and the remaining $350
million in a timely fashion, the ratings could be downgraded.
Also, if credit metrics do not improve such that debt/EBITDA
begins making tangible progress towards 7 times, or if
EBITA/interest falls below 1.25 time, ratings could be downgraded.
The principal methodology used in rating US Foods 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.
US Foods, Inc. is a leading North American food service marketing
and distribution company, with annual revenues of around $20
billion. The company operates as a national, broad-line
distributor, providing a complete range of products -- from fresh
farm produce, frozen food, and specialty meat products to paper
products, restaurant equipment, and machinery.
VALENCE TECHNOLOGY: CEO Resigns; Former Contour Chief Takes Over
----------------------------------------------------------------
Robert Kanode resigned from his roles as Chief Executive Officer,
President and as a member of the Board of Directors of Valence
Technology, Inc., and all other officer positions and
directorships with Valence and each of its affiliated entities
effective Nov. 26, 2012.
Effective Nov. 26, 2012, the Board appointed Joseph Fisher III, a
member of the Board, as Chief Executive Officer and President of
Valence. Mr. Fisher has been a director of the Company since
July 31, 2012. From 2008 to 2012, Mr. Fisher served as CEO and
President of Contour Energy Systems, Inc., a privately held
advanced battery company based in Azusa, CA. From 2007 to
present, Mr. Fisher served as owner and president of JCF
International, LLC, an international consulting firm focused on
the battery market. Prior to that, Mr. Fisher was a Vice
President for Energizer Holdings, Inc., in the areas of Business
Development and Global Rechargeables. Additionally, Mr. Fisher
was employed by Union Carbide Corporation in their strategic
planning group. Mr. Fisher earned a Bachelor of Science from the
University of Cincinnati, a Masters of Business Administration
from West Virginia College of Graduate Studies - Marshall
University, and completed an Executive Financial Management
Program at the Wharton School of the University of Pennsylvania.
Mr. Fisher is 60 years old.
On Nov. 26, 2012, in connection with Mr. Fisher's appointment as
CEO and President, the Company entered into an employment
agreement with Mr. Fisher which provides for:
(i) an annual base salary of $280,000;
(ii) an annual bonus of up to 40% of his base salary based on
financial and other goals set by the Board;
(iii) a grant of 3% of the Company's outstanding stock (vesting
over 4 years) in the event the Company's Chapter 11
reorganization results in stock being offered as part of a
financing transaction for the Company;
(iv) health care and other benefits;
(v) reimbursement for up to $150,000 of relocation expenses;
and
(vi) in the event of an involuntary separation from the
Company, a separation payment equal to six months of base
salary.
During the term of his employment as CEO and President, Mr. Fisher
is to be nominated to serve on the Board and he agreed to resign
from the Board at that time as he is no longer serving as the
Company's CEO and President.
A copy of the employment agreement is available for free at:
http://is.gd/dPzpI3
About Valence Technology
Valence Technology, Inc., filed a Chapter 11 petition (Bankr. W.D.
Tex. Case No. 12-11580) on July 12, 2012, in its home-town in
Austin. Founded in 1989, Valence develops lithium iron magnesium
phosphate rechargeable batteries. Its products are used in hybrid
and electric vehicles, as well as hybrid boats and Segway personal
transporters.
The Debtor disclosed debt of $82.6 million and assets of
$31.5 million as of March 31, 2012. Chairman Carl E. Berg and
related entities own 44.4% of the shares. ClearBridge Advisors,
LLC owns 5.5%.
Valence expects to complete its restructuring during 2012.
Judge Craig A. Gargotta presides over the case. The Company is
being advised by Streusand, Landon & Ozburn, LLP with respect to
bankruptcy matters. The petition was signed by Robert Kanode,
CEO.
On Aug. 8, 2012, the United States Trustee for Region 7 appointed
five creditors to serve on the Official Committee of Unsecured
Creditors of the Debtor.
VANITY EVENTS: Inks $200,000 Debenture With Monroe Milstein
-----------------------------------------------------------
Vanity Events Holding, Inc., on Oct. 26, 2012, entered into a
Securities Purchase Agreement with Monroe Milstein, an accredited
investor, providing for the sale by the Company to the Investor of
a 10% convertible debenture in the principal amount of $200,000.
The Debenture matures on the second anniversary of the date of
issuance and bears interest a rate of 10% per annum, payable on
the Maturity Date. The Investor may convert, at any time, the
outstanding principal and accrued interest on the Debenture into
shares of the Company's common stock, par value $0.001 per share
at a conversion price that is a 50% discount of the lowest closing
price of the Common Stock during the 10 trading days immediately
preceding the date of conversion as quoted by Bloomberg, LP, or
such other quotation service as mutually agreed to by the parties.
With the exception of the shares the Company is obligated to issue
to previous investors, for as long as the Debenture is
outstanding, the Conversion Price of the Debenture will be subject
to adjustment for issuances of Common Stock or securities
convertible into common stock or exercisable for shares of Common
Stock at a purchase price of less than the then-effective
Conversion Price, on any unconverted amounts, such that the then
applicable Conversion Price will be adjusted using full-ratchet
anti-dilution on such new issuances subject, to customary carve
outs, including restricted shares granted to officers, and
directors and consultants.
The Investor has contractually agreed to restrict its ability to
convert the Debenture such that the number of shares of the
Company common stock held by each of the Investor and its
affiliates after that conversion does not exceed 4.99% of the
Company's then issued and outstanding shares of Common Stock.
Employment Pact with Chairman, CEO & CFO
On Nov. 7, 2012, the Company entered into an employment agreement
with Philip Ellett to serve as chairman, chief executive officer,
chief financial officer and director of the Company. The
Agreement will begin as of the Effective Date and will continue on
a month-to-month basis until terminated by either party upon
providing the other party with 30 days prior written notice. The
base salary under the Agreement is a monthly gross salary of
$7,000. In addition, the Company will issue to Mr. Ellett
2,000,000 shares of common stock provided however that Mr. Ellett
cannot transfer the shares and must return all shares to the
Company if he terminates employment within two years from date of
issuance. Mr. Ellett is entitled to participate in any and all
benefit plans, from time to time, in effect for senior management,
along with vacation, sick and holiday pay in accordance with the
Company's policies established and in effect from time to time.
About Vanity Events
Based in New York, Vanity Events Holding, Inc. (OTC BB: VAEV)
-- http://www.vanityeventsholding.com/-- is a holding company
with two primary subsidiary companies. The subsidiaries are
Vanity Events, Inc. and America's Cleaning Company. America's
Cleaning Company(TM) is the Company's flagship division which
provides cleaning services to residential and commercial clients.
Vanity Events, Inc. seeks out, Licenses, develops, promotes, and
brings to market various innovative consumer and commercial
products.
The Company reported net income of $330,705 in 2011 compared with
a net loss of $544,831 in 2010.
The Company's balance sheet at June 30, 2012, showed $3.29 million
in total assets, $17.97 million in total liabilities, all current,
and a $14.68 million total stockholders' deficit.
RBSM LLPk, in New York, issued a "going concern" qualification on
the consolidated financial statements for the year ended Dec. 31,
2011. The independent auditors noted that the Company has
suffered losses since inception and is experiencing difficulty in
generating sufficient cash flows to meet its obligations and
sustain its operations, which raises substantial doubt about its
ability to continue as a going concern.
Bankruptcy Warning
The Company said in its quarterly report on Form 10-Q for the
period ended June 30, 2012, that its ability to implement its
current business plan and continue as a going concern ultimately
is dependent upon the Company's ability to obtain additional
equity or debt financing, attain further operating efficiencies
and to achieve profitable operations.
"There can be no assurances that funds will be available to the
Company when needed or, if available, that such funds would be
available under favorable terms. In the event that the Company is
unable to generate adequate revenues to cover expenses and cannot
obtain additional funds in the near future, the Company may seek
protection under bankruptcy laws. To date, management has not
considered this alternative, nor does management view it as a
likely occurrence, since the Company is progressing with various
potential sources of new capital and we anticipate a successful
outcome from these activities. However, capital markets remain
difficult and there can be no certainty of a successful outcome
from these activities."
VERTIS HOLDINGS: Has Bonus-Plan Approval; Auction Canceled
----------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Vertis Inc. overcame objection from the U.S. Trustee
and persuaded the bankruptcy judge to give approval Nov. 28 for an
incentive bonus program for 92 executives and lower-ranking
mangers that could cost $4.3 million.
According to the report, the advertising and marketing services
provider filed for bankruptcy reorganization after nailing down
agreement for Quad/Graphics Inc. to buy the business for
$258.5 million. The purchase agreement required Vertis to adopt a
bonus program incentivizing management to avoid further customer
losses.
The report relates that full bonuses will be paid if lost business
is $71 million or less. If customer losses are more than $71
million but less than $106.5 million, half of bonuses will be
paid.
The report also notes no bids to compete with Quag/Graphics were
submitted by the Nov. 23 deadline. Consequently, the Nov. 30
auction was canceled. There will be a Dec. 6 hearing for approval
of the sale.
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.
The Official Committee of Unsecured Creditors tapped Cooley LLP as
its lead counsel, BDO Consulting, a division of BDO USA, LLP as
its financial advisor.
VESTA CORP: S&P Keeps 'B' CCR on Proposed Financing Restructuring
-----------------------------------------------------------------
Standard & Poor's Ratings Services said its preliminary 'B'
corporate credit rating on Vesta Corp. remains unchanged
following the company's announcement of the restructuring of its
proposed financing. The outlook is stable. "At the same time, our
preliminary 'B+' issue-level and preliminary '2' recovery ratings
on Vesta Corp.'s proposed $200 million first lien term loan due
2017 also remain unchanged. The '2' recovery rating indicates our
expectation of substantial recovery (70% to 90%) in the event of
payment default. Finally, we are withdrawing our preliminary
'CCC+' issue-level and preliminary '6' recovery ratings on the $95
million second lien term loan, which the company dropped from the
proposed financing," S&P said.
"Vesta also announced that the transaction will be structured as a
dividend rather than a tender offer, that pricing will increase to
LIBOR plus 700 basis points (bps) from LIBOR plus 500bps, and that
the first lien amortization will increase to 10% per annum from
1%. The changes result in pro forma leverage of about 4x for the
12 months ended Sept. 30, 2012 (which includes preferred stock as
debt), down from the low-5x area prior to the downsizing. While we
view the changes as a net positive for creditors, the corporate
credit rating is limited by our view of the company's 'vulnerable'
business risk profile and three significant contracts up for
renewal in late 2013 and 2014," S&P said.
"The preliminary ratings on Vesta reflect the company's vulnerable
business risk profile, which derives from its narrow market focus,
concentrated customer base, and exposure to potential pricing
pressure on upcoming contract renewals in late 2013 and 2014. The
ratings also reflect its 'aggressive' financial risk profile with
pro forma leverage of about 4x. Nevertheless, we expect that good
industry trends, highly predictable revenue, and a recent new
customer win will allow it to deliver revenue growth in excess of
10% with consistent EBITDA margins, resulting in leverage in the
low-3x area and positive free cash flow in 2013," S&P said.
Vesta provides payment processing services to wireless carriers
that allow prepaid mobile subscribers to replenish their accounts
through branded call center, online, and mobile channels.
RATINGS LIST
Ratings Unchanged
Vesta Corp.
Corporate credit rating B (prelim)/Stable
$200 mil first lien term
loan due 2017 B+ (prelim)
Recovery rating 2 (prelim)
Ratings Withdrawn
To From
Vesta Corp.
$95-mil. 2nd lien term loan N.R. CCC+ (prelim)
Recovery rating N.R. 6 (prelim)
VISION INDUSTRIES: Incurs $1.4-Mil. Net Loss in Third Quarter
-------------------------------------------------------------
Vision Industries Corp. filed its quarterly report on Form 10-Q,
reporting a net loss of $1.4 million on $16,045 of total revenue
for the three months ended Sept. 30, 2012, compared with a net
loss of $1.8 million on $294,240 of total revenue for the same
period last year.
For the nine months ended Sept. 30, 2012, the Company had a net
loss of $4.1 million on $26,545 of total revenue, compared with a
net loss of $5.1 million on $764,157 of total revenue for the same
period of 2011.
The Company's balance sheet at Sept. 30, 2012, showed
$1.1 million in total assets, $1.5 million in total liabilities,
and a stockholders' deficit of $395,543.
A copy of the Form 10-Q is available at http://is.gd/hAJqYq
Torrance, Calif.-based Vision Industries Corp. is focused on
marketing zero-emission vehicles to a variety of alternative
energy and green-minded individuals, OEM dealer networks, as well
as for sale to end-user consumers.
* * *
Drake & Klein CPAs, in Clearwater, Florida, expressed substantial
doubt about Vision Industries' ability to continue as a going
concern, following the Company's results for the fiscal year ended
Dec. 31, 2011. The independent auditors noted that the Company's
cash and available credit are not sufficient to support its
operations for the next year.
VISUALANT INC: Incurs $2.7 Million Net Loss in Fiscal 2012
----------------------------------------------------------
Visualant, Incorporated, filed with the U.S. Securities and
Exchange Commission its annual report on Form 10-K disclosing a
net loss of $2.72 million on $7.92 million of revenue for the year
ended Sept. 30, 2012, compared with a net loss of $2.39 million on
$9.13 million of revenue for the same period during the prior
year.
The Company's balance sheet at Sept. 30, 2012, showed $5.31
million in total assets, $5.11 million in total liabilities,
$170,616 in total stockholders' equity, and $31,807 in
noncontrolling interest.
PMB Helin Donovan, LLP, in Nov. 10, 2012, issued a "going concern"
qualification on the consolidated financial statements for the
year ended Sept. 30, 2012. The independent auditors noted that
the Company has sustained a net loss from operations and has an
accumulated deficit since inception which raise substantial doubt
about the Company's ability to continue as a going concern.
A copy of the Form 10-K is available for free at:
http://is.gd/7xCPLH
About Visualant Inc.
Seattle, Wash.-based Visualant, Inc., was incorporated under the
laws of the State of Nevada on Oct. 8, 1998. The Company
develops low-cost, high speed, light-based security and quality
control solutions for use in homeland security, anti-
counterfeiting, forgery/fraud prevention, brand protection and
process control applications.
The Company anticipates that it will record losses from operations
for the foreseeable future. As of June 30, 2012, the Company's
accumulated deficit was $13.1 million. The Company has limited
capital resources, and operations to date have been funded with
the proceeds from private equity and debt financings. These
conditions raise substantial doubt about the Company's ability to
continue as a going concern. The audit report prepared by the
Company's independent registered public accounting firm relating
to the Company's financial statements for the year ended Sept. 30,
2011, includes an explanatory paragraph expressing the substantial
doubt about the Company's ability to continue as a going concern.
Bankruptcy Warning
The Securities Purchase Agreement dated June 17, 2011, with
Ascendiant Capital Partners, LLC, will terminate if the Company's
common stock is not listed on one of several specified trading
markets (which include the OTCBB and Pink Sheets, among others),
if the Company files protection from its creditors, or if a
Registration Statement on Form S-1 or S-3 is not effective.
If the price or the trading volume of the Company's common stock
does not reach certain levels, the Company will be unable to draw
down all or substantially all of its $3,000,000 equity line of
credit with Ascendiant.
The maximum draw down amount every 8 trading days under the
Company's equity line of credit facility is the lesser of $100,000
or 20% of the total trading volume of the Company's common stock
for the 10-trading-day period prior to the draw down multiplied by
the volume-weighted average price of the Company's common stock
for that period. If the Company stock price and trading volume
decline from current levels, the Company will not be able to draw
down all $3,000,000 available under the equity line of credit.
"If we are not able to draw down all $3,000,000 available under
the equity line of credit or if the Securities Purchase Agreement
is terminated, we may need to restructure our operations, divest
all or a portion of our business, or file for bankruptcy," the
Company said in its quarterly report for the period ended June 30,
2012.
VITRO SAB: U.S. Court of Appeals Rejects Mexican Plan
-----------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the U.S. Court of Appeals in New Orleans ruled
Nov. 28 that Vitro SAB won't be permitted to enforce the
bankruptcy reorganization plan in the U.S. that was approved by a
court in Mexico.
According to the report, the appeal came directly to a three-judge
panel of Fifth Circuit in New Orleans following a victory in
bankruptcy court by Elliott Management Corp. and other holders of
60 percent of Vitro's $1.2 billion in defaulted bonds. The
bankruptcy judge in Dallas ruled in June that the Mexican plan was
"manifestly contrary" to U.S. policy because it reduced the
liability of non-bankrupt Vitro units on the bonds even though the
subsidiaries weren't in bankruptcy in any country.
The report relates that in a 60-page opinion Nov. 28, Circuit
Judge Carolyn King reached the same result, although on slightly
different grounds. She said that Vitro "has not shown that there
exist truly unusual circumstances necessitating the release"
preventing bondholders from suing subsidiaries. Judge King, who
was a bankruptcy expert before appointment to the circuit court,
refused to enforce Vitro's Mexican plan in part because "creditors
also did not receive a distribution close to what they were
originally owed."
Bondholders, the report notes, have been obtaining judgments in
New York courts against Vitro subsidiaries that guaranteed the
defaulted bonds. The appeals court had precluded bondholders from
attempting to collect on the judgments while the appeal was
pending. The circuit court terminated the injunction Nov. 28,
allowing bondholders to commence collecting judgments if they can
find assets in the U.S.
Mr. Rochelle notes that if Vitro decides to attempt an appeal to
the U.S. Supreme Court, it can ask the high court to hold up
collection on judgments in the meantime. Vitro issued a statement
Nov. 28 saying it was "disappointed" by the appeals court
decision. Judge King's opinion is an historical exegesis on
Chapter 15, the part of U.S. bankruptcy law governing the role
U.S. courts play in bankruptcies principally pending abroad.
Mr. Rochelle also notes that for technicians, the significance of
the opinion lies in Judge King's analysis of how a court decides
whether a foreign-approved reorganization should be enforced in
the U.S. First, she says the court should look to Section 1521 of
Chapter 15, then to whether the relief would have been granted
under former law known as Section 304, and finally to Section
1507. Judge King's opinion focuses on how Vitro subsidiaries are
being released from debt even though most of them weren't in
bankruptcy anywhere. In the U.S., it's called a third-party
release when a company, like a Vitro subsidiary, is given a
release without being in bankruptcy itself. Judge King based her
decision on Section 1507, where she said a third-party release
"may theoretically be available," so long as circumstances are
"comparable to those that would make possible such a release in
the U.S."
The opinion, according to the report, notes that U.S. courts
differ on whether third-party releases are permissible in U.S.
bankruptcies. Judge King said the Fifth Circuit is near the end
of the spectrum barring third-party releases entirely. In other
circuits, they are permitted in tightly controlled circumstances.
Judge King therefore needed to craft a rule where third-party
releases might be possible in Chapter 15 cases although perhaps
impermissible were the case principally in the U.S. where they
are barred. As a result, Judge King devised a rule where a
foreign company's third-party releases would be enforced if there
were "truly unusual circumstances justifying" the releases. She
rejected Vitro's argument that the Mexican plan should be enforced
in the U.S. to prevent "financial chaos." Judge King said "Virto
cannot propose a plan that fails to substantially comply with our
order of distribution and then defend such a plan by arguing that
it would suffer were it not enforced." She said that "Vitro's
two-wrongs-make-a-right reasoning is unpersuasive."
Mr. Rochelle points out that because Judge King found Vitro's plan
unenforceable under Section 1507, she didn't reach Section 1506
where the bankruptcy judge found the plan defective for being
manifestly contrary to U.S. policy.
The appeal in the Circuit Court is Vitro SAB de CV v. Ad
Hoc Group of Vitro Noteholders (In re Vitro SAB de CV),
12-10689, 5th U.S. Circuit Court of Appeals (New Orleans).
About Vitro SAB
Headquartered in Monterrey, Mexico, Vitro, S.A.B. de C.V. (BMV:
VITROA; NYSE: VTO), through its two subsidiaries, Vitro Envases
Norteamerica, SA de C.V. and Vimexico, S.A. de C.V., is a global
glass producer, serving the construction and automotive glass
markets and glass containers needs of the food, beverage, wine,
liquor, cosmetics and pharmaceutical industries.
Vitro is the largest manufacturer of glass containers and flat
glass in Mexico, with consolidated net sales in 2009 of MXN23,991
million (US$1.837 billion).
Vitro defaulted on its debt in 2009, and sought to restructure
around US$1.5 billion in debt, including US$1.2 billion in notes.
Vitro launched an offer to buy back or swap US$1.2 billion in
debt from bondholders. The tender offer would be consummated
with a bankruptcy filing in Mexico and Chapter 15 filing in the
United States. Vitro said noteholders would recover as much as
73% by exchanging existing debt for cash, new debt or convertible
bonds.
Concurso Mercantil & Chapter 15 Proceedings
Vitro SAB on Dec. 13, 2010, filed its voluntary petition for a
pre-packaged Concurso Plan in the Federal District Court for
Civil and Labor Matters for the State of Nuevo Leon, commencing
its voluntary concurso mercantil proceedings -- the Mexican
equivalent of a prepackaged Chapter 11 reorganization. Vitro SAB
also commenced parallel proceedings under Chapter 15 of the U.S.
Bankruptcy Code (Bankr. S.D.N.Y. Case No. 10-16619) in Manhattan
on Dec. 13, 2010, to seek U.S. recognition and deference to its
bankruptcy proceedings in Mexico.
Early in January 2011, the Mexican Court dismissed the Concurso
Mercantil proceedings. But an appellate court in Mexico
reinstated the reorganization in April 2011. Following the
reinstatement, Vitro SAB on April 14, 2011, re-filed a petition
for recognition of its Mexican reorganization in U.S. Bankruptcy
Court in Manhattan (Bankr. S.D.N.Y. Case No. 11-11754).
The Vitro parent received sufficient acceptances of its
reorganization by using the US$1.9 billion in debt owing to
subsidiaries to vote down opposition by bondholders. The holders
of US$1.2 billion in defaulted bonds opposed the Mexican
reorganization plan because shareholders could retain ownership
while bondholders aren't being paid in full.
Vitro announced in March 2012 that it has implemented the
reorganization plan approved by a judge in Monterrey, Mexico.
In the present Chapter 15 case, the Debtor seeks to block any
creditor suits in the U.S. pending the reorganization in Mexico.
Chapter 11 Proceedings
A group of noteholders opposed the exchange -- namely Knighthead
Master Fund, L.P., Lord Abbett Bond-Debenture Fund, Inc.,
Davidson Kempner Distressed Opportunities Fund LP, and Brookville
Horizons Fund, L.P. Together, they held US$75 million, or
approximately 6% of the outstanding bond debt. The Noteholder
group commenced involuntary bankruptcy cases under Chapter 11 of
the U.S. Bankruptcy Code against Vitro Asset Corp. (Bankr. N.D.
Tex. Case No. 10-47470) and 15 other affiliates on Nov. 17, 2010.
Vitro engaged Susman Godfrey, L.L.P. as U.S. special litigation
counsel to analyze the potential rights that Vitro may exercise
in the United States against the ad hoc group of dissident
bondholders and its advisors.
A larger group of noteholders, known as the Ad Hoc Group of Vitro
Noteholders -- comprised of holders, or investment advisors to
holders, which represent approximately US$650 million of the
Senior Notes due 2012, 2013 and 2017 issued by Vitro -- was not
among the Chapter 11 petitioners, although the group has
expressed concerns over the exchange offer. The group says the
exchange offer exposes Noteholders who consent to potential
adverse consequences that have not been disclosed by Vitro. The
group is represented by John Cunningham, Esq., and Richard
Kebrdle, Esq. at White & Case LLP.
A bankruptcy judge in Fort Worth, Texas, denied involuntary
Chapter 11 petitions filed against four U.S. subsidiaries. On
April 6, 2011, Vitro SAB agreed to put Vitro units -- Vitro
America LLC and three other U.S. subsidiaries -- that were
subject to the involuntary petitions into voluntary Chapter 11.
The Texas Court on April 21 denied involuntary petitions against
the eight U.S. subsidiaries that didn't consent to being in
Chapter 11.
Kurtzman Carson Consultants is the claims and notice agent to
Vitro America, et al. Alvarez & Marsal North America LLC, is the
Debtors' operations and financial advisor.
The official committee of unsecured creditors appointed in the
Chapter 11 cases of Vitro America, et al., has selected Sarah
Link Schultz, Esq., at Akin Gump Strauss Hauer & Feld LLP, in
Dallas, Texas, and Michael S. Stamer, Esq., Abid Qureshi, Esq.,
and Alexis Freeman, Esq., at Akin Gump Strauss Hauer & Feld LLP,
in New York, as counsel. Blackstone Advisory Partners L.P.
serves as financial advisor to the Committee.
The U.S. Vitro companies sold their assets to American Glass
Enterprises LLC, an affiliate of Sun Capital Partners Inc., for
US$55 million.
U.S. subsidiaries of Vitro SAB are having their cases converted
to liquidations in Chapter 7, court records in January 2012 show.
In December, the U.S. Trustee in Dallas filed a motion to convert
the subsidiaries' cases to liquidations in Chapter 7. The
Justice Department's bankruptcy watchdog said US$5.1 million in
bills were run up in bankruptcy and hadn't been paid.
On June 13, 2012, U.S. Bankruptcy Judge Harlin "Cooter" Hale in
Dallas entered a ruling that precluded Vitro from enforcing
its Mexican reorganization plan in the U.S. Vitro's appeal is
pending.
VM ASC: Can Access $203K Financing From Jersey Shore Bank
---------------------------------------------------------
U.S. Bankruptcy Court Judge Jeffery Deller has authorized Lisa M.
Swope, as the Chapter 11 Trustee for VM ASC Partnership, to access
postpetition financing from Jersey Shore Bank up to $203,603.87.
The Debtor and the Bank had entered into a Construction Loan
Agreement dated August 15, 2006, for which the Debtor could borrow
up to $9,265,000, to use for construction and improvements of
Debtor's business to attract potential tenants, as well as comply
with existing Tenant's needs. Pursuant to the Loan Agreement,
the Debtor did not borrow the full amount and there remains
$350,439.04, to draw upon for future construction costs.
The Debtor would like to pay for its expenses by drawing on the
Loan Agreement in the amount of $203,603.87. The Bank has agreed
to the draw of the additional funds.
The Trustee believes that the proposed borrowing is fair and
reasonable in that the current interest rate is 215 basis points
over the five-year Treasury Constant Maturities Index, which for
the months of August and September averaged roughly 2% to 3%.
About VM ASC Partnership
Altoona, Pennsylvania-based VM ASC, Partnership, owns commercial
real property located at 1650 N. Atherton Street in State College,
Pennsylvania. The real property has an approximate fair market
value of $11,000,000. VM ASC leases portions of its real estate
to Best Buy and Staples.
The Company filed for Chapter 11 bankruptcy protection (Bankr.
W.D. Pa. Case No. 10-71330) on Nov. 12, 2010. Robert O. Lampl,
Esq., who has an office in Pittsburgh, Pennsylvania, serves as the
Debtor's bankruptcy counsel. The Debtor estimated its assets at
$10 million to $50 million and debts at $1 million to $10 million.
Affiliates 200 East Plank Road, L.P. (Bankr. W.D. Pa. 10-70679),
et al., filed separate Chapter 11 petitions.
YOU ON DEMAND: Incurs $4.4-Mil. Net Loss in Third Quarter
---------------------------------------------------------
YOU On Demand Holdings, Inc., filed its quarterly report on Form
10-Q, reporting a net loss of $4.4 million on $1.2 million of
revenue for the three months ended Sept. 30, 2012, compared net
income of $125,730 on $2.0 million of revenue for the same period
last year.
For the nine months ended Sept. 30, 2012, the Company had a net
loss of $13.5 million on $5.5 million of revenue, compared with a
net loss of $8.3 million on $5.6 million of revenue for the same
period in 2011.
The Company's balance sheet at Sept. 30, 2012, showed
$22.0 million in total assets, $13.0 million in total liabilities,
$4.7 million of convertible redeemable preferred stock, and
stockholders' equity of $4.3 million.
"For the nine months ended Sept. 30, 2012, we had a net loss
[attributable to YOU On Demand shareholders] of approximately
$11,990,000 and we used cash for operations of approximately
$8,259,000. We had a working capital deficit at Sept. 30, 2012,
of approximately $5,040,000."
UHY LLP, in Albany, New York, expressed substantial doubt about
YOU On Demand's ability to continue as a going concern, following
the Company's results for the fiscal year ended Dec. 31, 2011.
The independent auditors noted that the Company has incurred
significant losses during 2011 and 2010 and has relied on debt and
equity financings to fund their operations.
A copy of the Form 10-Q is available at http://is.gd/wN6Xcn
New York, N.Y.-based YOU On Demand Holdings, Inc., operates in the
Chinese media segment, through its Chinese subsidiaries and VIEs,
(1) a business which provides integrated value-added service
solutions for the delivery of PPV, VOD, and enhanced premium
content for cable providers and (2) a cable broadband business
based in the Jinan region of China.
YRC WORLDWIDE: 100% of Outstanding 2023 Notes Validly Tendered
--------------------------------------------------------------
YRC Worldwide Inc. filed an amendment no. 1 to the Tender Offer
Statement on Schedule TO with respect to the right of each holder
of the Company's 3.375% Net Share Settled Contingent Convertible
Senior Notes due 2023 to sell and the obligation of the Company to
repurchase the Notes dated Oct. 11, 2012.
The right of Holders to surrender their Notes for purchase by the
Company expired at 5:00 p.m., New York City time, on Nov. 23,
2012. The Company has been advised by Deutsche Bank Trust Company
Americas, as paying agent, that $1,601,000 in aggregate principal
amount of the Notes were tendered and not withdrawn, representing
100% of the total aggregate principal amount of the Notes
outstanding. All Notes validly tendered (and not withdrawn) prior
to the expiration of the Put Option have been accepted in exchange
for the consideration set forth in the Option Documents.
A copy of the filing is available for free at:
http://is.gd/9DwyLc
About YRC Worldwide
Headquartered in Overland Park, Kan., YRC Worldwide Inc. (NASDAQ:
YRCW) -- http://www.yrcw.com/-- is a holding company that offers
its customers a wide range of transportation services. These
services include global, national and regional transportation as
well as logistics.
The Company reported a net loss of $354.41 million in 2011, a
net loss of $327.77 million in 2010, and a net loss of
$619.47 million in 2009.
The Company's balance sheet at Sept. 30, 2012, showed $2.36
billion in total assets, $2.79 billion in total liabilities and a
$429.9 million total shareholders' deficit.
After auditing the 2011 results, the Company's independent
auditors expressed substantial doubt about the Company's ability
to continue as a going concern. KPMG LLP, in Kansas City,
Missouri, noted that the Company has experienced recurring net
losses from continuing operations and operating cash flow deficits
and forecasts that it will not be able to comply with certain debt
covenants through 2012.
* * *
As reported in the Aug. 2, 2011 edition of the TCR, Moody's
Investors Service revised YRC Worldwide Inc.'s Probability of
Default Rating ("PDR") to Caa2\LD ("Limited Default") from Caa3 in
recognition of the agreed debt restructuring which will result in
losses for certain existing debt holders. In a related action
Moody's has raised YRCW's Corporate Family Rating to Caa3 from Ca
to reflect modest but critical improvements in the company's
credit profile that should result from its recently-completed
financial restructuring. The positioning of YRCW's PDR at Caa2\LD
reflects the completion of an offer to exchange a substantial
majority of the company's outstanding credit facility debt for new
senior secured credit facilities, convertible unsecured notes, and
preferred equity, which was completed on July 22, 2011.
In August 2011, Standard & Poor's Ratings Services raised its
corporate credit rating on YRC Worldwide Inc. to 'CCC' from 'SD'
(selective default), after YRC completed a financial
restructuring. Outlook is stable.
"The ratings on Overland Park, Kan.-based YRCW reflect its
participation in the competitive, capital-intensive, and cyclical
trucking industry," said Ms. Ogbara, "as well as its meaningful
off-balance-sheet contingent obligations related to multiemployer
pension plans." "YRCW's substantial market position in the less-
than-truckload (LTL) sector, which has fairly high barriers to
entry, partially offsets these risk factors. We categorize YRCW's
business profile as vulnerable, financial profile as highly
leveraged, and liquidity as less than adequate."
Z TRIM HOLDINGS: Incurs $14.2 Million Net Loss in Third Quarter
---------------------------------------------------------------
Z Trim Holdings, Inc., filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $14.18 million on $411,941 of total revenues for the three
months ended Sept. 30, 2012, compared with a net loss of $54,662
on $220,025 of total revenues for the same period during the prior
year.
The Company reported a net loss of $19.70 million on $1.05 million
of total revenues for the nine months ended Sept. 30, 2012,
compared with a net loss of $5.74 million on $674,951 of total
revenues for the same period a year ago.
The Company's balance sheet at Sept. 30, 2012, showed $4.41
million in total assets, $24.99 million in total liabilities ,
$6.36 million in total commitment and contingencies, and a $26.93
million total stockholders' deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/nqGlKL
About Z Trim
Mundelein, Ill.-based Z Trim Holdings, Inc., is a functional food
ingredient company which provides custom product solutions that
help answer the food industry's problems. Z Trim's revolutionary
technology provides value-added ingredients across virtually all
food industry categories. Z Trim's all-natural products, among
other things, help to reduce fat and calories, add fiber, provide
shelf-stability, prevent oil migration, and add binding capacity
-- all without degrading the taste and texture of the final food
products.
M&K CPAs,PLLC, in Houston, Texas, expressed substantial doubt
about the Company's ability to continue as a going concern
following the 2011 financial results. The independent auditors
noted that the Company had a working capital deficit and
reoccurring losses as of Dec. 31, 2011.
The Company reported a net loss of $6.94 million in 2011, compared
with a net loss of $10.91 million in 2010.
* Bill to End Gift Card Expiration Dates Introduced
---------------------------------------------------
U.S. Senator Richard Blumenthal (D-Conn.) on Nov. 23 announced the
Gift Card Consumer Protection Act, a legislative measure that
would completely ban gift cards with expiration dates and non-use
fees.
These protections would significantly strengthen present law,
which permits expiration of cards after five years, and non-use
fees after one year. The new measure would bar such deadlines and
dormancy fees at any time.
Blumenthal said, "This bill bars absolutely draconian deadlines
and abusive fees and charges that unfairly confiscate consumer
gift card cash. Gift card companies fatten their profits and
shrink consumer wallets with exploitative expiration dates and
petty, underhanded junk fees. Gift cards should not be the gift
that keeps on taking. This measure assures that consumers get
their money's worth, no matter when they use the gift card."
"Gift cards are a popular holiday gift that help make sure
everyone gets what they want for the holidays," Chuck Bell,
Director of Programs at Consumer Reports, said. "Unfortunately,
they may also get things not on their list, like fees and
expiration dates on gift cards that limit how and when you use
them. Consumers deserve to receive the full value of the gift card
and be able to use it whenever they want without fear that the
card has expired or is no longer accepted. This bill makes certain
that consumers are not short changed when giving or receiving gift
cards, even if the issuer files for bankruptcy."
In addition, the Gift Card Consumer Protection Act would prevent
companies that file for bankruptcy from selling gift cards and
require them to accept and honor unredeemed gift cards. This
provision would prevent consumers from buying or being stuck with
a worthless gift card after a company goes out of business. In
2008, the electronics company Sharper Image required customers to
spend double the amount on their unredeemed gift cards and then it
stopped accepting gift cards altogether after it filed for
bankruptcy. In addition, Circuit City and Linen 'n Things allowed
customers to buy gift cards from its stores after it filed for
bankruptcy, according to reports.
The Gift Card Consumer Protection Act would also prevent loyalty,
promotion, and award cards from expiring. These are cards
consumers receive by redeeming credit card points or buying a
certain product. Currently, most of these cards have very short
expiration dates -- sometimes as short as 30 days, which confuses
customers who assume these cards have the same protections as gift
cards. Under the Gift Card Consumer Protection Act, these cards
would have the same protections as gift cards.
* Moody's Says EBITDA Add-Backs Can Weaken Covenant Protection
--------------------------------------------------------------
EBITDA add-backs can increase a company's financial flexibility
and weaken investor protections in high-yield bond covenants,
Moody's Investors Service says in a new report, "Arcane EBITDA
Adjustments Can Loosen Covenant Protection." US and private
equity-sponsored bond issuance tends to have these add-backs
structured into covenants more often.
"Given the significance of EBITDA to overall covenant quality, it
is important that investors understand the ways companies can
calculate it," says Vice President -- Senior Accounting Analyst
Jason Cuomo. "There is no limit to the number or nature of EBITDA
adjustments."
EBITDA add-backs allow companies to adjust their reported EBITDA
when calculating covenant compliance, determining restricted
payments, and considering other important covenant elements. These
add-backs are negotiated between debtors and the agents of
bondholders, and can be permitted for such things as projected
merger synergies or the effects of hedging, Mr. Cuomo says. While
not all adjustments necessarily boost EBITDA, the majority do. By
increasing EBITDA, add-backs can improve leverage or interest
coverage ratios, giving companies more flexibility to assume debt
or take other actions that could increase their credit risk
without breaching their covenants.
According to Moody's, two companies with identical leverage can
issue bonds with the same leverage limits in their covenants, yet
bear different credit risk. If one company has negotiated a more
aggressive set of EBITDA add-backs, the company is likely to have
substantially more covenant flexibility. This may translate into a
greater capacity to incur debt, distribute more cash to
shareholders, or take other actions that are not advantageous to
bond holders.
Moody's evaluation of EBITDA add-backs is one sub-component of six
risk areas analyzed in coming to an overall Covenant Quality score
for a bond covenant package. On a five-point scale, 1 represents
the strongest investor protection and 5 the weakest. Of 150 global
bonds drawn from Moody's High-Yield Covenant Database, one third
were assigned Covenant Quality scores of 4 or 5 for EBITDA add-
backs.
"US and private equity-sponsored companies were found to have more
EBITDA add-backs than those without private equity involvement or
issued outside the US," Cuomo says. "More than 80% of the bonds
that scored the weakest for EBITDA add-backs were sponsored by
private equity and 88% of deals originated in the US."
Deals with a private equity sponsors had an average EBITDA add-
back score of 3.2, compared with 2.2 for bonds that did not.
Similarly, deals that originated in the US had an average EBITDA
add-back score of 3.0, compared with 1.9 for non-US deals.
* Grant Thornton Names James Peko as Managing Principal
-------------------------------------------------------
Grant Thornton LLP disclosed the appointment of James A. Peko as
the new national managing principal of the Corporate Advisory &
Restructuring Services practice.
"Jim has been an integral part of the transition of our business
model to one that best serves the needs of the complex and global
marketplace," said Steve Lukens, national managing principal of
Grant Thornton's Advisory Services. "His combined expertise with
restructuring and the structuring of investments made by financial
services and private equity organizations allows him to assist
clients of the firm--both in the United States and
internationally--with highly unique and challenging situations."
Peko has played an instrumental role in a number of significant
restructurings, including having served as financial advisor for
AMBAC Assurance as insurer of a large company securitization,
several transactions associated with the holdings of a large,
international investment management firm based in New York, The
Educational Resources Institute, Inc. in its reorganization and
emergence from Chapter 11, and the Official Committee of Unsecured
Creditors in the Chapter 11 bankruptcy of Hancock Fabrics. He also
assisted an international team serving as financial advisor to the
United Kingdom-based pension plan of Eastman Kodak Co. (Kodak) in
its U.S. Chapter 11 reorganization. Peko has advised a diverse
spectrum of clients in industries ranging from airline,
automotive, engineering and construction, financial services,
gaming, hospitality, manufacturing, media, real estate, retail,
technology and utility.
Peko has more than 24 years' experience in capital markets and
restructuring serving companies in transition for the last 12
years. He has been a principal with Grant Thornton for more than
six years and currently serves as a principal in the Corporate
Advisory & Restructuring Services practice. His previous
experience includes serving as a first vice president in the
corporate finance group at The Nikko Securities Co. International
Inc., where he managed more than 100 financings for issuers,
including Disney, Hewlett Packard, the entity formerly known as
General Motors Acceptance Corporation, Ford Motor Credit
Corporation, Intel Corporation, Argentina, Columbia, Mexico and
Uruguay.
In addition, Peko is a member of the Association of Insolvency &
Restructuring Advisors, CFA Institute, Turnaround Management
Association, and the American Bankruptcy Institute for which he
also serves as an editor of its Financial Advisor and Investment
Banking Committee Newsletter. He holds a bachelor's degree in
accounting from St. Peter's College and a master's in business
administration from Fordham University.
Peko is also a chartered financial analyst, certified insolvency
and restructuring advisor, holds a certification in distressed
business valuation, and is a FINRA general securities registered
representative - Series 7.
About Grant Thornton
Grant Thornton LLP's Corporate Advisory & Restructuring Services
(CARS) group includes more than 60 professionals in the U.S. and
over 1,000 restructuring professionals around the world. The
group's professionals possess extensive experience with both
bankruptcy and out-of-court restructuring, spanning many
industries, including automotive, financial services, gaming and
hospitality, healthcare, manufacturing, real estate and retail.
* MF Global Again Beats Out Lehman in Claim Trading
---------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that MF Global Inc., the liquidating commodity broker, for
a second month beat out Lehman Brothers Holdings Inc. by having
the largest number of traded claims.
The report relates that in October 565 MF Global claims traded
hands, compared with 302 for the Lehman holding company, according
to data compiled from court records by SecondMarket Inc. In face
amount of claims, Lehman came out on top with $2.15 billion, where
MF Global's claims amounted to $1.64 billion.
In total last month, $4.4 billion in more than 1,100 claim were
reported being traded to U.S. bankruptcy courts. MF Global
and Lehman together were responsible for 85% of trade volume. In
the last two months, MF Global produced 30% of all trading volume,
SecondMarket said.
Since Lehman went bankrupt four years ago, more than $90 billion
in face amount of Lehman claims were traded, SecondMarket
previously said. Lehman filed for Chapter 11 protection in
September 2008 and confirmed a reorganization plan in December.
The plan was implemented in March. Two distributions have been
made since then.
* BOOK REVIEW: Corporate Venturing -- Creating New Businesses
-------------------------------------------------------------
Authors: Zenas Block and Ian C. MacMillan
Publisher: Beard Books, Washington, D.C. 2003
(reprint of 1993 book published by the President and Fellows of
Harvard College).
List Price: 371 pages. $34.95 trade paper, ISBN 1-58798-211-0.
Creating new businesses within a firm is a way for a company to
try to tap into its potential while at the same time minimizing
risks. A new business within a firm is like an entrepreneurial
venture in that it would have greater flexibility to
opportunistically pursue profits apart from the normal corporate
structure and decision-making processes. Such a business is
different from a true entrepreneurial venture however in that the
business has corporate resources at its disposal. Such a company
business venture has to answer to the company management too.
Corporate venturing--to use the authors' term--offers innovative
and stimulating business opportunities. Though venturing is in a
somewhat symbiotic relationship with the parent firm, the venture
would never threaten to ruin the parent firm as a entrepreneur
might be financially devastated by failure.
Block and MacMillan contrast an entrepreneurial enterprise with
their subject of corporate venturing, "When a new entrepreneurial
venture is created outside an existing organization, a wide
variety of environmental factors determine the fledgling
business's survival. Inside an organization . . . senior
management is the most critical environmental factor." This
circumstance is the basis for both the strengths and limitations
of a corporate venture. In their book, the authors discuss how
senior management working with the leadership of a corporate
venture can work in consideration of these strengths and
weaknesses to give the venture the best chances for success. If
the venture succeeds beyond the prospects and goals going into
its formation, it can always be integrated into the parent
company as a new division or subsidiary modeled after the regular
parts of a company with the open-ended commitment, regular hiring
practices, and reporting and coordination, etc., going with this.
As covered by the authors, done properly with the right
commitment, sense of realism and practicality, and preliminary
research and ongoing analysis, corporate venturing offers a firm
new paths of growth and a way to reach out to new markets, engage
in fruitful business research, and adapt to changing market and
industry conditions. The principle of corporate venturing is the
familiar adage, "nothing ventured, nothing gained." While it is
improbable that a corporate venture can save a dying firm, a
characteristic of every dying firm is a blindness about
venturing. Just thinking about corporate ventures alone can
bring to a firm a vibrancy and imagination needed for business
longevity.
Ideas, insights, and vision are the essence of corporate
venturing. But these are not enough by themselves. Corporate
venturing is based as much on the right personnel, especially the
top leaders. The authors advise to select current employees of a
firm to lead a corporate venture whenever feasible because they
already have relationships with senior management who are the
ultimate overseers of a venture and they understand the corporate
culture. In one of their several references to the corporate
consultant and motivational speaker Peter Drucker, the authors
quote him as identifying only half-jokingly the most promising
employees to lead the corporate venture as "the troublemakers."
These are the ones who will be given the "great freedom and a
high level of empowerment" required to make the venture workable
and who also are most suited to "adapt rapidly to new
information." Such employees for top management of a venture are
not entirely on their own. The other side of this, as Brock and
MacMillan go into, is for such venture management to earn and
hold the trust and confidence of the firm's top management and
work within the framework and follow the guidelines set for the
venture.
Corporate venturing is an operation which is a hybrid of the
standard corporate interests and operations and an independent
business with entrepreneurial flexibility mainly from focus on
one product or service or at most a few interrelated ones,
simplified operations, and streamlined decision-making. From
identifying opportunities and getting starting through the
business plan and corporate politics, Brock and MacMillan guide
the readers into all of the areas of corporate venturing.
Zenas Block is a former adjunct professor with the Executive MBA
Program at the NYU Stern School of Business. Ian C. MacMillan is
associated with Wharton as a professor and a director of a center
for entrepreneurial studies.
*********
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 ***