/raid1/www/Hosts/bankrupt/TCR_Public/130304.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Monday, March 4, 2013, Vol. 17, No. 62
Headlines
2279-2283 THIRD AVENUE: Delbello Okayed as Substitute Counsel
710 LONG RIDGE: Meeting to Form Creditors' Panel Set for March 6
710 LONG RIDGE: Union Opposes Centers' CBA Change
ABOUND SOLAR: Rival Offers to Recycle Discarded Solar Panels
ADVANCED SASH: Voluntary Chapter 11 Case Summary
AHP PLAZA: Voluntary Chapter 11 Case Summary
ALL STAR HOLDINGS: Voluntary Chapter 11 Case Summary
ALT HOTEL: DiamondRock to Record Interest Payments in 2013
AMBAC FINANCIAL: Report $143.6-Mil. Net Profit in 4th Qtr. 2012
AMERICAN AIRLINES: US Airways Flight Attendants Ratify Contract
AMERICAN AIRLINES: Guggenheim Sale Lease-Back Approved
AMERICAN AIRLINES: Seeks More Time to Decide on 17 Contracts
AMERICAN AIRLINES: WTC Asks for Dismissal of AMR Defense
AMERICAN SUZUKI: Bankruptcy Court Approves Chapter 11 Plan
AMPAL-AMERICAN: Creditors' Disclosure Materials Are Approved
AQUILEX LLC: S&P Puts 'B' CCR on CreditWatch Negative
ARCAPITA BANK: Court Lifts Stay for District Court Action
ARCAPITA BANK: Balks at Committee's Motion to Obtain Discovery
ATP OIL & GAS: Committee Supports Shut-In of Gomez Properties
BUTTE CREEK: Case Summary & 6 Largest Unsecured Creditors
CAMPUS POINTE: Voluntary Chapter 11 Case Summary
CCO HOLDINGS: Fitch Rates $1-Bil. Senior Unsecured Notes 'BB-'
CCO HOLDINGS: Moody's Rates New $1-Bil. Bond Issuance 'B1'
CEDAR FAIR: Moody's Assigns 'B1' Rating to New $500MM Sr. Notes
CEDAR FAIR: S&P Assigns 'B' Rating on $500MM Notes Due 2021
CENGAGE LEARNING: Moody's Changes PDR to Caa3-PD/LD
CENTRAL EUROPEAN DISTRIBUTION: Exchange Prompts Moody's Ca Rating
CHARTER COMMUNICATIONS: S&P Rates $1BB Sr. Unsecured Notes 'BB-'
CLAIRE'S STORES: Commences Cash Tender Offer for Senior Notes
COCOPAH NURSERIES: Plan Offers At Least 21.4% for Unsec. Creditors
COCOPAH INDUSTRIES: Can Employ Dr. Elaine Joyal as Expert Witness
COLUMBUS EXPLORATION: Involuntary Chapter 11 Case Summary
COMBAT SPORTS: Chapter 15 Case Summary
CONDOR TRANSCONTINENTAL: Case Summary & 20 Top Unsec. Creditors
CONEXANT SYSTEMS: Files for Chapter 11 with Pre-Arranged Plan
CONEXANT SYSTEMS: Meeting to Form Creditors Committee March 8
CONEXANT SYSTEMS: Case Summary & 30 Largest Unsecured Creditors
CONTESSA PREMIUM: Closes Chapter 11 Cases After Creditor Payments
DATAPIPE INC: Moody's Gives B3 Corp Family Rating; Outlook Stable
DELTA AIR: Moody's Retains B2 Corp. Family Rating, Outlook Stable
DETROIT, MI: Gov. Declares Fiscal Emergency; State Takeover Looms
DETROIT WEST: S&P Assigns 'BB-' Rating to $5.9MM Series 2013 Bonds
DEWEY & LEBOEUF: Failure Won't Dampen Partner Paydays
DEWEY & LEBOEUF: Can Access Cash Collateral Until March 17
DK AGGREGATES: Court Dismisses Chapter 11 Case
DOWLING ENTERPRISES: Ruling in Lawsuit Against Owner Reversed
DREIER LLP: NY Appeals Court Clears 2 Attorneys of Malpractice
DRYSHIPS INC: To Release Fourth Quarter Results on March 6
DSE CANTINA: Court Examines Security Interest in Firm's Retainer
EAST END: Court OKs Klestadt as Attorneys, Edifice as Consultant
EASTMAN KODAK: Finalizes Terms of Exit Financing Deal
EDENHURST GALLERY: Dickstein Shapiro Sued Over $30M in Paintings
EDINBORO UNIVERSITY: S&P Cuts Rating on 2008 & 2010 Bonds to 'BB+'
EDISON MISSION: Court Allows Hiring of GCG as Information Agent
ELITE PHC: Case Summary & 5 Largest Unsecured Creditors
ELPIDA MEMORY: Tokyo Court Approves Reorganization Plan
ENERGY FUTURE: Might Be Helped by Another Heat Wave
EQUINIX INC: Moody's Rates New US$1-Bil. Senior Notes 'Ba3'
EQUINIX INC: S&P Raises CCR to 'BB-' & Rates $1BB Notes 'BB'
EXIDE TECHNOLOGIES: S&P Lowers CCR to 'B-'; Outlook Negative
FOXCO ACQUISITION: S&P Lowers CCR to 'B'; Outlook Stable
FREDDIE MAC: Posts Its Largest Profit Ever Last Quarter
FTLL ROBOVAULT: Amends List of Largest Unsecured Creditors
FTLL ROBOVAULT: Files Schedules of Assets and Liabilities
FULL SERVICE: Chapter 11 Case Summary & 2 Unsecured Creditors
GENERAL MOTORS: Judge Sides With JPM in Fight Over $1.5BB Loan
GEORGES MARCIANO: Non-Final Judgment Suffices for Involuntary
GGW BRANDS: Girls Gone Wild Files for Bankruptcy
GGW BRANDS: Chapter 11 Case Summary & Unsecured Creditors
GLOBAL CASH: S&P Revises Outlook to Positive & Affirms 'BB-' CCR
GO AND GO MD: Case Summary & Unsecured Creditor
GREAT ATLANTIC: S&P Lowers CCR to 'CCC'; Outlook Negative
HAWKER BEECHCRAFT: Loses Out on $428-Mil. Afghan Aircraft Contract
HOST HOTELS: Fitch Affirms 'BB+' Issuer Default Rating
HOSTESS BRANDS: Sells Bread Biz. to Flowers, Bimbo for $392MM
HOSTESS BRANDS: Campbell Mithun Solicits Brand Engagement Ideas
HUNTSMAN INTERNATIONAL: Moody's Rates New $250MM Add-on Notes 'B1'
HUNTSMAN INETRNATIONAL: S&P Rates $250 Million Notes Add-on 'B-'
INLAND EMPIRE: Biodiesel Producer Files Chapter 7
INNOVIDA HOLDINGS: Miami Businessman Cops to $40M Investment Scam
ISLE OF CAPRI: Moody's Rates New $350-Mil. Senior Notes 'B2'
ISLE OF CAPRI: S&P Assigns B+ Rating to $350MM Sr. Notes Due 2021
J.C. PENNEY: Fitch Cuts Issuer Default Rating to B-; Outlook Neg
J.C. PENNEY: Moody's Keeps B3 CFR Following 2012 Earnings Release
J.C. PENNEY: S&P Lowers Corporate Credit Rating to 'CCC+'
JMC STEEL: S&P Revises Outlook to Negative & Affirms 'B+' CCR
JOURNAL REGISTER: Sale Not Approved, Debtor Seeks Exclusivity
K-V PHARMACEUTICAL: Creditors Seek to Slow Restructuring
LEHMAN BROTHERS: Brokerage Arm Finalizes Settlements
LEHMAN BROTHERS: JPMorgan Balks at Bid to Question London Whale
LEHMAN BROTHERS: Sells Office Building to RXR, Walton for $820M
LEWIS BROTHERS: Case Summary & 20 Largest Unsecured Creditors
LODGENET INTERACTIVE: Receives Final Access to Bankruptcy Loan
MBIA INSURANCE: S&P Lowers Rating to 'CCC'; Outlook Negative
MBIA INSURANCE: May be Placed in Rehabilitation or Liquidation
MEDIACOM LLC: Fitch Affirms 'B+' Issuer Default Ratings
MEDICAL CARD: S&P Retains 'CCC' Rating on CreditWatch Developing
MESSER CONSTRUCTION: Case Summary & 20 Largest Unsecured Creditors
MF GLOBAL: JPMorgan Faces Pivotal Hearing Over Plan
MICROVISION INC: Gets Nasdaq Listing Non-Compliance Notice
MONITOR GROUP: Carl Marks Completes Advisory Role in Sale
MRB L.L.C.: Voluntary Chapter 11 Case Summary
MSP HOSPITALITY: Updated Case Summary & Creditors' Lists
NAVISTAR INTERNATIONAL: Web Cast on March 7 to Discuss Q1 Results
NATIVE WHOLESALE: Can Post Collateral to Secure Custom Bonds
NEW ENERGY CORP: Ethanol Plant Sale Approved for $2.5 Million
NOVASTAR MORTGAGE: 2nd Cir. Reverses MBS Class Action Ruling
NUTWOOD AVENUE: Case Summary & Unsecured Creditor
NUVEEN INVESTMENTS: S&P Rates $2.6BB Tranche A Loan Due 2017 'B'
ON SEMICONDUCTOR: S&P Raises CCR to 'BB+'; Outlook Stable
ORMET CORPORATION: Meeting to Form Creditors' Panel on March 7
OVERSEAS SHIPHOLDING: Taps PwC as Accountant and Tax Advisor
OVERSEAS SHIPHOLDING: Seeks Worker Bonuses, CEO Raise
OVERSEAS SHIPHOLDING: Keeps Lease of 3 Capital Product Tankers
OXFORD PROPERTY: Case Summary & 20 Largest Unsecured Creditors
PARKWAY PROPERTIES: Section 341(a) Meeting Scheduled for March 22
PATRIOT COAL: Court OKs Appointment of Non-Union Retiree Committee
PEAK RESORTS: Ski Resort to Auction Assets March 19
PENSON WORLDWIDE: Creditors' Panel Gets OK to Retain Professionals
PENSON WORLDWIDE: Authorized to Honor Severance Plan & PTO Policy
PETAL VENTURES-ACADIAN: Voluntary Chapter 11 Case Summary
PHIL'S CAKE: Files Cash Collateral Budget Through March 31
PROVO GATEWAY: Court Confirms Trustee's Chapter 11 Plan
RADIAN GROUP: S&P Assigns 'CCC+' Rating to $350MM Sr. Notes
REGENCY ENERGY: Fitch Affirms 'BB' IDR over Southern Union Deal
REGENCY ENERGY: Moody's Affirms Ba3 CFR and B1 Sr. Notes Rating
REPUBLIC LTD: TPG Sells Off Flagging Clothing Chain
RESIDENTIAL CAPITAL: Ocwen to Subservice $9BB Private Label Loans
RESIDENTIAL CAPITAL: Lawmakers Grill Treasury on Executive Pay
RESIDENTIAL CAPITAL: Looks to Escape From FDIC-FRB Consent Order
RR DONNELLEY: Moody's Assigns Ba3 Rating to New $350MM Notes
RR DONNELLEY: S&P Rates $350MM Unsecured Notes Due 2021 'BB'
SALT VERDE: Moody's Lowers Rating on Gas Revenue Bonds to 'Caa1'
SAN FERNANDO: S&P Lowers Rating on Project No. 3 TABs to 'BB+'
SANTERA REHABILITATION: Case Summary & Creditors List
SCHOOL SPECIALTY: Replacement Financing Approved
SIGNATURE STATION: Can Use Regions Cash Collateral Until March 31
SIGNATURE STATION: Can Employ Howick Westfall as Counsel
SK FOODS: District Court Affirms Compromise With BMO Lenders
ST. CLAIR: Moody's Lowers General Obligation Rating to 'Ba1'
SUPPLY HARDWARE: Voluntary Chapter 11 Case Summary
SYNOVUS FINANCIAL: S&P Raises Rating to 'B+'; Outlook Positive
THQ INC: WWE Reserves $1.7-Mil. Bad Debt Following Bankruptcy
TRINITY COAL: Lender Agree on Executive to Lead Company
TRONOX LTD: New $1.3-Bil. Term Loan Gets Moody's 'Ba2' Rating
VITRO SAB: Confirms Settlement With Bondholders
VOLOS LLC: Case Summary & 4 Largest Unsecured Creditors
VWP INC: Voluntary Chapter 11 Case Summary
W.R. GRACE: ART Enters Into CLG Hydrocracking Catalysts Agreement
WAKE PARTNERS: Case Summary & 5 Unsecured Creditors
WESTERN UTAH COPPER: Default Judgment Entered v Davis Accounting
WESTON INSURANCE: A.M. Best Assigns 'B' Financial Strength Rating
WINDSORMEADE OF WILLIAMSBURG: Case Summary & Top Unsec. Creditors
WJO INC: Court Says Ciardi Ciardi Conversion Motion Not Actionable
WORKMEN'S AUTO: A.M. Best Cuts Financial Strength Rating to 'C+'
YPCRENTAL LLC: Case Summary & 4 Largest Unsecured Creditors
ZACKY FARMS: Plan Filing Period Extended Until April 5
ZACKY FARMS: Dreisbach Replacement Lien to Include Cash Deposit
* Moody's Revises Outlook on Global Paper Market to Positive
* Non-Financial Corp. Debt Ratings Are Doing Well, Says Moody's
* New Internet Gaming Law Good for New Jersey Casino Industry
* Delinquencies, Foreclosures Down in January, LPS Report Shows
* CFO Economic, Business Optimism Improve, FEI/Baruch Survey Shows
* CoreLogic Reports 61,000 Completed Foreclosures in January
* Amendments to Consent Orders Memorialize Foreclosure Agreement
* Foreclosure Files Detail Error Gap
* Foreclosure-Related Sales Down 23% in Q42012, RealtyTrac Says
* New Ohio Law Hurts Mesothelioma Victims, Says Sokolove Law Firm
* Las Vegas Robo-Signing Case Derailed
* Student Loan Delinquencies Soar Among the Young
* Lew Confirmed as Treasury Secretary
* Bernanke Says Higher Rates May Signal Stronger Economy
* SEC Nominee Tries to Allay Skepticism
* Libyan Fund Helping SEC in Goldman Probe
* Bank of America Probed by New York Over Mortgage Securities
* BOND PRICING: For Week From Feb. 25 to March 1, 2013
*********
2279-2283 THIRD AVENUE: Delbello Okayed as Substitute Counsel
-------------------------------------------------------------
2279-2283 Third Avenue Associates LLC and 2279-2283 Third Avenue
Development LLC sought and obtained Bankruptcy Court approval to
employ Delbello Donnellan Weingarten Wise & Wiedekehr, LLP as
substitute counsel nunc pro tunc to Jan. 1, 2013.
The Debtors earlier obtained permission to employ Rattet
Pasternak, LLP, in Harrison, New York, as their bankruptcy
attorneys, nunc pro tunc to the Petition Date.
Effective Jan. 1, 2013, Rattet Pasternak merged with DDWWW.
The Debtors elected to employ DDWWW because:
i) Jonathan S. Pasternak has served as Debtors' counsel since
the inception of these cases and has knowledge related to
the case that is valuable to the Debtors and would be costly
and time-consuming to duplicate;
ii) the billing rates for Jonathan S. Pasternak and the other
DDWWW attorneys and paraprofessionals are equal to RP's 2012
billing rates; and
iii) the knowledge and experience of the other partners,
associates and paraprofessionals at DDWWW make it an ideal
fit for the case.
DDWWW intends to work closely with the Debtors and any other
professionals employed by the estate to ensure that there is no
unnecessary duplication of services performed or charged to the
Debtors' estates.
To the best of the Debtors' knowledge, DDWWW is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
About 2279-2273 Third Avenue
2279-2283 Third Avenue Associates LLC and 2279-2283 Third Avenue
Development LLC sought Chapter 11 bankruptcy protection (Bankr.
S.D.N.Y. Case Nos. 12-13092 and 12-13093) on July 17, 2012. Third
Avenue Associates owns two contiguous multi residential buildings
located at 2279-2283 Third Avenue, in New York. Third Avenue
Development is the sole member of Associates. The Property is
Associate's primary asset, while Development's membership
interests in Associates is its sole asset. Debtor 2279-2283 Third
Avenue disclosed $14,839,697 in assets and $16,973,992 in
liabilities as of the Chapter 11 filing.
The managing member of each of the Debtors is Michael Waldman. He
is also the managing member of 3210 Riverdale Associates LLC and
the managing member of the sole member of 3210 Riverdale
Development LLC, other Chapter 11 proceedings currently pending
before the SDNY Court under Case Nos. 12-11286 and 12-11109.
Third Avenue Associates obtained financing from commerce bank of
$14 million and Development obtained mezzanine financing from HSBC
Capital (USA) Inc. in the amount of $6 million. HSBC refused to
grant additional $700,000 in financing requested by the Debtor to
fund build-outs required by the Internal Revenue Service.
The Commerce note -- which was assigned to TD Bank and then to
LSV-JCR 124th LLC -- was secured by a mortgage on the Properties,
and the HSBC obligation is secured by a mortgage on Associates'
membership interest owned by Development.
The HSBC note matured in 2011 and HSBC called the loan into
default and commenced foreclosure action. The state court entered
an order appointing Steven Weiss as receiver of rents. THSBC has
assigned its mezzanine note to LCP-GC LLC.
On July 3, 2012, the Debtors and their two secured lenders, LSV-
JCR 124th LLC and LCP-GC LLC entered into a settlement that
requires the Debtors to transfer ownership of the buildings to the
secured lenders through a Chapter 11 plan.
Judge James Peck oversees the case. No trustee, examiner or
official committee has been appointed in the cases.
710 LONG RIDGE: Meeting to Form Creditors' Panel Set for March 6
----------------------------------------------------------------
Roberta A. DeAngelis, the United States Trustee for Region 3, will
hold an organizational meeting on March 6, 2013, at 1:00 p.m. in
the bankruptcy cases of 710 Long Ridge Road Operating Company II,
LLC, dba Long Ridge of Stamford, et al. The meeting will be held
at:
United States Trustee's Office
One Newark Center
1085 Raymond Blvd.
14th Floor, Room 1401
Newark, NJ 07102
The sole purpose of the meeting will be to form a committee or
committees of unsecured creditors in the Debtors' cases.
The organizational meeting is not the meeting of creditors
pursuant to Section 341 of the Bankruptcy Code. A representative
of the Debtor, however, may attend the Organizational Meeting, and
provide background information regarding the bankruptcy cases.
To increase participation in the Chapter 11 proceeding, Section
1102 of the Bankruptcy Code requires that the United States
Trustee appoint a committee of unsecured creditors as soon as
practicable. The Committee ordinarily consists of the persons,
willing to serve, that hold the seven largest unsecured claims
against the debtor of the kinds represented on the committee.
Section 1103 of the Bankruptcy Code provides that the Committee
may consult with the debtor, investigate the debtor and its
business operations and participate in the formulation of a plan
of reorganization. The Committee may also perform other services
as are in the interests of the unsecured creditors whom it
represents.
About 710 Long Ridge
710 Long Ridge Road Operating Company II, LLC and four affiliates
own sub-acute and long-term nursing care facilities for the
elderly in Connecticut. The facilities are Long Ridge of
Stamford, Newington Health Care Center, Westport Health Care
Center, West River Health Care Center, and Danbury Health Care
Center.
710 Long Ridge and its affiliates sought Chapter 11 protection
(Bankr. D.N.J. Case Nos. 13-13653 to 13-13657) on Feb. 24, 2013.
The Debtors owe $18.9 million to M&T Bank and $7.99 million on
loans from the U.S. Department of Housing and Urban Development
Federal Housing Administration.
Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman &
Leonard, serve as counsel to the Debtors. Logan & Company, Inc.
is the claims and notice agent.
710 LONG RIDGE: Union Opposes Centers' CBA Change
-------------------------------------------------
Ama Sarfo of BankruptcyLaw360 reported that a health care workers
union told a New Jersey bankruptcy judge Thursday that five
HealthBridge Management LLC-managed health care centers can't
modify expired collective bargaining agreements with their
workers, saying the court doesn't have authority to hear the
dispute.
The report said that HealthBridge, which neither owns the centers
nor itself entered into bankruptcy, said the modifications were
necessary to prevent the Connecticut facilities, which filed for
Chapter 11 on Sunday, from losing millions, but the New England
Health Care Employees Union, District 1199, argued to the
contrary.
About 710 Long Ridge
710 Long Ridge Road Operating Company II, LLC and four affiliates
own sub-acute and long-term nursing care facilities for the
elderly in Connecticut. The facilities, which are managed by
HealthBridge Management LLC, are Long Ridge of Stamford, Newington
Health Care Center, Westport Health Care Center, West River Health
Care Center, and Danbury Health Care Center.
710 Long Ridge and its affiliates sought Chapter 11 protection
(Bankr. D.N.J. Case Nos. 13-13653 to 13-13657) on Feb. 24, 2013.
The Debtors owe $18.9 million to M&T Bank and $7.99 million on
loans from the U.S. Department of Housing and Urban Development
Federal Housing Administration.
Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman &
Leonard, serve as counsel to the Debtors. Logan & Company, Inc.
is the claims and notice agent.
ABOUND SOLAR: Rival Offers to Recycle Discarded Solar Panels
------------------------------------------------------------
David Migoya, writing for The Denver Post, reports that First
Solar in Tempe, Ariz., said it has approached its one-time
opponent and the trustee overseeing Abound Solar's bankruptcy case
with the offer to recover materials from the solar panels. First
Solar said it would recycle about 100,000 of Abound Solar's
discarded panels. According to the report, Alan Bernheimer,
public relations director for First Solar's Americas division said
the offer as-yet has no parameters or money attached, and that
details are still being worked out.
The report notes Colorado health and environment officials in
January ordered Loveland-based Abound to clean up hazardous waste
at four Front Range locations, citing thousands of "unsellable"
solar panels and thousands of gallons of toxic liquids. The
panels contain cadmium telluride, of which cadmium is considered a
toxic substance and a known carcinogen by federal health agencies.
The report relates U.S. Bankruptcy Court-appointed trustee Adam
Singer estimated the cost of the whole cleanup to be $2.2 million.
About Abound Solar
Abound Solar Inc. filed for Chapter 7 bankruptcy liquidation
(Bankr. D. Del. Case No. 12-11972) on July 2, 2012. The company
disclosed assets of $136.1 million and debt totaling $82 million.
Abound Solar was awarded a $400 million loan guarantee from the
U.S. Department of Energy in July 2010 to build a facility in
Indiana and expand its Longmont facility. Abound borrowed about
$70 million from the DOE loan guarantee.
Abound halted production in February from the one plant in
Colorado. A second was planned in Indiana.
Abound Solar joined fellow panel makers Solyndra LLC and Evergreen
Solar Inc. in the Delaware bankruptcy court.
Adam Singer serves as bankruptcy trustee.
ADVANCED SASH: Voluntary Chapter 11 Case Summary
------------------------------------------------
Debtor: Advanced Sash & Door, Inc.
dba PA Sunlight By Advanced Sash & Door
6108 Carlisle Pike
Mechanicsburg, PA 17050
Bankruptcy Case No.: 13-00910
Chapter 11 Petition Date: February 25, 2013
Court: United States Bankruptcy Court
Middle District of Pennsylvania (Harrisburg)
Judge: Mary D. France
Debtor's Counsel: Robert E. Chernicoff, Esq.
CUNNINGHAM AND CHERNICOFF PC
2320 North Second Street
Harrisburg, PA 17110
Tel: (717) 238-6570
Fax: (717) 238-4809
E-mail: rec@cclawpc.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Debtor did not file a list of its largest unsecured creditors
together with its petition.
The petition was signed by Michael Sheely, president.
AHP PLAZA: Voluntary Chapter 11 Case Summary
--------------------------------------------
Debtor: AHP Plaza, LLC
7595 E. Mcdonald Drive, Suite 130
Scottsdale, AZ 85250
Bankruptcy Case No.: 13-02747
Chapter 11 Petition Date: February 27, 2013
Court: U.S. Bankruptcy Court
District of Arizona (Phoenix)
Judge: Eileen W. Hollowell
Debtor's Counsel: Paul Sala, Esq.
ALLEN, SALA & BAYNE, PLC
Viad Corporate Center
1850 N. Central Avenue, #1150
Phoenix, AZ 85004
Tel: (602) 256-6000
Fax: (602) 252-4712
E-mail: psala@asbazlaw.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Company did not file a list of creditors together with its
petition.
The petition was signed by Michael Merriman, operating manager of
Xanadu Investments, LLC, member.
ALL STAR HOLDINGS: Voluntary Chapter 11 Case Summary
----------------------------------------------------
Debtor: All Star Holdings, LLC
aka Merchandise Outlet
9445 Ala Highway 69
Arab, AL 35016
Bankruptcy Case No.: 13-40359
Chapter 11 Petition Date: February 26, 2013
Court: U.S. Bankruptcy Court
Northern District of Alabama (Anniston)
Debtor's Counsel: Tameria S. Driskill, Esq.
TAMERIA S. DRISKILL, LLC
P.O. Box 8505
Gadsden, AL 35902
Tel: (256) 546-5591
Fax: (256) 546-6557
E-mail: tamerialaw@bellsouth.net
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Company did not file a list of creditors together with its
petition.
The petition was signed by Roger T. Isom, sole/managing member.
ALT HOTEL: DiamondRock to Record Interest Payments in 2013
----------------------------------------------------------
ALT Hotel LLC last year obtained confirmation of its Chapter 11
plan after reaching a settlement with DiamondRock Hospitality
Company.
The settlement allowed DiamondRock to receive a meaningful return
on its original distressed debt investment in the Allerton Hotel
with a combination of a cash payment and restructured mortgage
loan totaling $71 million.
DiamondRock Hospitality said in an earnings release for the fourth
quarter and full year 2012 results that beginning in 2013, the
Company will begin to record interest income on the loan as a
result of the settlement of the bankruptcy proceedings, which will
be included in the calculation of EBITDA and FFO. The Company
will reduce Adjusted EBITDA and Adjusted FFO for the cash payments
previously recognized in 2010 and 2011, which will be amortized
over the term of the new loan.
A copy of the earnings release is available for free at
http://is.gd/ZY7OVB
About ALT Hotel LLC
ALT Hotel, LLC's sole asset is the Allerton Hotel located in the
"Magnificent Mile" area of Chicago. The Hotel is managed by Kokua
Hospitality, LLC, pursuant to a Hotel Management Agreement, dated
Nov. 9, 2006. Kokua is the exclusive manager and operator of the
Hotel, and receives management fees for its services, with the
amount of such fees directly linked to the annual performance of
the Hotel. Hotel Allerton Mezz, LLC, is the sole member of ALT
Hotel.
ALT Hotel filed for Chapter 11 bankruptcy (Bankr. N.D. Ill. Case
No. 11-19401) on May 5, 2011. Judge A. Benjamin Goldgar presides
over the case. Neal L. Wolf, Esq., Dean C. Gramlich, Esq., and
Jordan M. Litwin, Esq., at Neal Wolf & Associates, LLC, in
Chicago, Illinois, serve as bankruptcy counsel to the Debtor. In
its petition, the Debtor estimated $100 million to $500 million in
assets and $50 million to $100 million in debts. FTI Consulting
serves as the Debtor's financial advisors.
Affiliate PETRA Fund REIT Corp. sought Chapter 11 protection
(Bankr. S.D.N.Y. Case No. 10-15500) on Oct. 20, 2010.
AMBAC FINANCIAL: Report $143.6-Mil. Net Profit in 4th Qtr. 2012
---------------------------------------------------------------
Ambac Financial Group, Inc. on Feb. 28 reported a fourth quarter
2012 net profit of $143.6 million, or a net profit of $0.47 per
share. This compares to a fourth quarter 2011 net loss of $963.2
million, or a net loss of $3.18 per share. Relative to fourth
quarter 2011, the improved fourth quarter 2012 results were
primarily driven by lower loss and loss expenses and higher income
on variable interest entities ("VIEs"), partially offset by fair
value losses on credit derivatives.
Reorganization Items, Net
For purposes of presenting an entity's financial evolution during
a Chapter 11 reorganization, the financial statements for periods
including and after filing the Chapter 11 petition distinguish
transactions and events that are directly associated with the
reorganization from the ongoing operations of the business.
Reorganization items during the three months ended December 31,
2012 were $2.7 million as compared to $10.1 million for the three
months ending December 31, 2011. The decrease was due to lower
professional fees incurred following the confirmation of the
bankruptcy plan of reorganization in March 2012.
Balance Sheet and Liquidity
Total assets increased during the fourth quarter of 2012 to $27.0
billion from $26.9 billion at September 30, 2012. The increase in
total assets was due to an increase in VIE assets to $17.8 billion
from $17.4 billion, partially offset by declines in the
consolidated non-VIE investment portfolio to $6.3 billion from
$6.4 billion and premium receivables to $1.6 billion from $1.8
billion.
Liabilities subject to compromise totaled approximately $1.7
billion at December 31, 2012. The amount of liabilities subject to
compromise represents Ambac's estimate of known or potential pre-
petition claims to be addressed in connection with the Chapter 11
reorganization.
A copy of the Company's financial results for the fourth quarter
ended December 31, 2012 is available for free at
http://is.gd/TgeTjx
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).
AMERICAN AIRLINES: US Airways Flight Attendants Ratify Contract
---------------------------------------------------------------
US Airways flight attendants, represented by the Association of
Flight Attendants - CWA (AFA), ratified a new contract on Feb. 28
that provides immediate pay increases and includes support for the
merger of US Airways and American Airlines. The new contract
opens four-party negotiations with American's flight attendant
union and airline representatives, an initial step in reaching a
combined collective bargaining agreement. Eighty percent of
flight attendants voting approved the agreement, which covers the
airline's 6,800 flight attendants who are based in US Airways'
four hub cities of Phoenix, Philadelphia, Charlotte, N.C., and
Washington, D.C.
"We are very pleased that our flight attendants have ratified this
new contract. I want to recognize our AFA leadership team at US
Airways, especially Roger Holmin and Deborah Volpe, for their hard
work and perseverance on behalf of US Airways' flight attendants,"
said Doug Parker, US Airways' chairman and CEO. "We would also
like to express our appreciation to the National Mediation Board,
Board Member Linda Puchala and Mediator Jim Mackenzie for their
assistance in reaching this agreement."
Following ratification on Feb. 28, the new contract specifies
negotiations to begin within thirty days between airline officials
at US Airways and American Airlines, AFA and the union
representing American Airlines flight attendants, the Association
of Professional Flight Attendants (APFA). The talks would
establish protocols for reaching a combined collective bargaining
agreement once the merger of US Airways and American Airlines,
announced on Feb. 14, is closed. The merger is expected to close
by the third quarter of this year following regulatory agency and
bankruptcy court approvals.
"This merger will create a stronger company, with the path to
improved compensation and benefits and greater long-term
opportunities for all our employees. We are grateful to have the
support of both companies' unions and thank them and their leaders
for their hard work and vision. With today's ratification our
flight attendants start the process to become one team and one
great new airline," said Parker.
Double-Digit Pay Hikes
The Wall Street Journal's Susan Carey reports that the new labor
contract will provide "double-digit" pay increases, job
protections and "a seat at the table" in the planned merger of
their company with American Airlines parent AMR Corp., the
Association of Flight Attendants union said Thursday.
According to the report, the new US Airways contract, which goes
into effect later this week, requires the group to negotiate with
the American union and the managements of both carriers so the
four can agree on a transition framework that would govern the
attendants until the merger closes and a single union is selected
to represent the combined group. Then the attendants would enter
into negotiations for a new, joint contract and agree on a single
seniority list -- or submit to binding arbitration if they can't
reach accord on the latter.
According to WSJ, the new deal, which was ratified by 80% of the
votes cast, according to the Association of Flight Attendants
union, was reached with the assistance of federal mediators, and
sets the stage for future improvements should the US Airways-
American merger be approved by antitrust regulators and the U.S.
Bankruptcy Court judge overseeing AMR's restructuring, the union
said.
About US Airways
US Airways, along with US Airways Shuttle and US Airways Express,
operates more than 3,000 flights per day and serves 198
communities in the U.S., Canada, Mexico, Europe, the Middle East,
the Caribbean, Central and South America. The airline employs
more than 32,000 aviation professionals worldwide, operates the
world's largest fleet of Airbus aircraft and is a member of the
Star Alliance network, which offers its customers more than 21,900
daily flights to 1,329 airports in 194 countries. Together with
its US Airways Express partners, the airline serves approximately
80 million passengers each year and operates hubs in Charlotte,
N.C., Philadelphia, Phoenix and Washington, D.C.
About American Airlines
AMR Corp. and its subsidiaries including American Airlines, the
third largest airline in the United States, filed for bankruptcy
protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan
on Nov. 29, 2011, after failing to secure cost-cutting labor
agreements. AMR, previously the world's largest airline prior to
mergers by other airlines, is the last of the so-called U.S.
legacy airlines to seek court protection from creditors.
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.
AMR and US Airways Group, Inc., on Feb. 14, 2013 announced a
definitive merger agreement under which the companies will combine
to create a premier global carrier, which will have an implied
combined equity value of approximately $11 billion. The deal is
subject to clearance by U.S. and foreign regulators and by the
bankruptcy judge overseeing AMR's bankruptcy case.
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: Guggenheim Sale Lease-Back Approved
------------------------------------------------------
American Airlines Inc. received a go-signal to enter into a sale
leaseback transaction with Guggenheim Corporate Funding, LLC, for
up to two Boeing 777-300ER aircraft. American Airlines did not
disclose the financial terms of the deal in court papers.
American filed the documents under seal to protect confidential
information.
About American Airlines
AMR Corp. and its subsidiaries including American Airlines, the
third largest airline in the United States, filed for bankruptcy
protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan
on Nov. 29, 2011, after failing to secure cost-cutting labor
agreements. AMR, previously the world's largest airline prior to
mergers by other airlines, is the last of the so-called U.S.
legacy airlines to seek court protection from creditors.
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.
AMR and US Airways Group, Inc., on Feb. 14, 2013 announced a
definitive merger agreement under which the companies will combine
to create a premier global carrier, which will have an implied
combined equity value of approximately $11 billion. The deal is
subject to clearance by U.S. and foreign regulators and by the
bankruptcy judge overseeing AMR's bankruptcy case.
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 More Time to Decide on 17 Contracts
------------------------------------------------------------
AMR Corp. asked the U.S. Bankruptcy Court in Manhattan to give the
company additional time to decide whether to assume or reject 17
contracts.
The contracts are leases of non-residential real properties
located at the John F. Kennedy International Airport, Chicago
O'Hare International Airport, and San Francisco International
Airport. The contracts are listed at http://is.gd/DXMxJ6
About American Airlines
AMR Corp. and its subsidiaries including American Airlines, the
third largest airline in the United States, filed for bankruptcy
protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan
on Nov. 29, 2011, after failing to secure cost-cutting labor
agreements. AMR, previously the world's largest airline prior to
mergers by other airlines, is the last of the so-called U.S.
legacy airlines to seek court protection from creditors.
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.
AMR and US Airways Group, Inc., on Feb. 14, 2013 announced a
definitive merger agreement under which the companies will combine
to create a premier global carrier, which will have an implied
combined equity value of approximately $11 billion. The deal is
subject to clearance by U.S. and foreign regulators and by the
bankruptcy judge overseeing AMR's bankruptcy case.
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: WTC Asks for Dismissal of AMR Defense
--------------------------------------------------------
World Trade Center Properties LLC asked a federal judge to reject
a defense asserted by American Airlines Inc. that it was the
victim of an "act of war" in the Sept. 11, 2001 attacks, Bloomberg
News reported.
WTC Properties, which owned the twin skyscrapers in Manhattan
destroyed in the attacks, sued the airline and United Continental
Holdings Inc. in 2008, seeking $8.4 billion or the estimated cost
of replacing the two towers as well as claims of negligence. The
company is an affiliate of Silverstein Properties.
Lawyers for Silverstein said the defendants "repeatedly and
explicitly promised Congress, regulators and the American people
that they would not use act of war to avoid paying claims,"
Bloomberg News reported.
"Those promises, widely praised at the time but since broken, led
to a massive federal bailout of the aviation industry and a huge
taxpayer-funded financial windfall for the defendants' insurers,"
Silverstein said.
Silverstein said that, after the attacks, the defendants obtained
a liability cap that limited the amount of their insurance
coverage and created a victims' compensation fund using taxpayer
money to pay claims for deaths and injuries, according to the
report.
American Airlines spokesman Sean Collins said that the motion by
Silverstein "has no factual or legal support."
"American Airlines has defended itself with all defenses
available at law against the baseless attempt by the Silverstein
entities to hold American responsible for the terrorist attacks
of Sept. 11," Mr. Collins said by e-mail.
The case is In Re September 11 Litigation, 21-MC-101, U.S.
District Court, Southern District of New York (Manhattan).
About American Airlines
AMR Corp. and its subsidiaries including American Airlines, the
third largest airline in the United States, filed for bankruptcy
protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan
on Nov. 29, 2011, after failing to secure cost-cutting labor
agreements. AMR, previously the world's largest airline prior to
mergers by other airlines, is the last of the so-called U.S.
legacy airlines to seek court protection from creditors.
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.
AMR and US Airways Group, Inc., on Feb. 14, 2013 announced a
definitive merger agreement under which the companies will combine
to create a premier global carrier, which will have an implied
combined equity value of approximately $11 billion. The deal is
subject to clearance by U.S. and foreign regulators and by the
bankruptcy judge overseeing AMR's bankruptcy case.
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 SUZUKI: Bankruptcy Court Approves Chapter 11 Plan
----------------------------------------------------------
American Suzuki Motor Corporation on March 1 disclosed that the
Honorable Scott C. Clarkson of the U.S. Bankruptcy Court for the
Central District of California in Santa Ana approved the
confirmation of the Company's Chapter 11 Plan, which creditors
overwhelmingly accepted. Confirmation of the Plan clears the way
for the Company to complete its restructuring process, which is
expected to occur on March 31, 2013.
As previously announced, the Plan approved the Company's sale of
its Motorcycles/ATV and Marine divisions and Automotive parts and
service operation to a newly organized, wholly-owned subsidiary of
Suzuki Motor Corporation. The subsidiary will operate in the
continental U.S. as Suzuki Motor of America, Inc. and will use the
Suzuki products brand name
"[Fri]day's confirmation is a significant milestone and is one of
the last remaining steps in our realignment and restructuring
process," said M. Freddie Reiss, the Company's Chief Restructuring
Officer. "During the next few weeks, we will take final steps to
implement the Plan, which will allow the Company to sell its
Motorcycles/ATV, Marine, Automotive parts and service divisions.
This will promote the long-term growth of the Motorcycles/ATV and
Marine divisions, as well as providing automotive parts and
service through the dealer network."
A copy of the Plan is available at http://www.omnimgt.com
Additional information regarding Company's business realignment
can be found at the following Web site -- http://www.suzuki.com--
or via an information hotline at 1-877-465-4819.
About American Suzuki
Established in 1986, American Suzuki Motor Corporation is the sole
distributor of Suzuki automobiles and vehicles in the United
States. American Suzuki wholesales virtually all of its inventory
through a network of independently owned and unaffiliated
dealerships located throughout the continental United States.
The dealers then market and sell the Suzuki Products to retail
customers. Suzuki Motor Corp., the 100% interest holder in the
Debtor, manufacturers substantially all of the Suzuki products.
American Suzuki has 295 employees. There are approximately 220
automotive dealerships, over 900 motorcycle/ATV dealerships, and
over 780 outboard marine dealerships.
American Suzuki filed a Chapter 11 petition (Bankr. C.D. Cal.
Case No. 12-22808) on Nov. 5, 2012, to sell the business to SMC,
absent higher and better offers. SMC is not included in the
Chapter 11 filing. The Debtor disclosed assets of $233 million
and liabilities totaling $346 million. Debt includes $32 million
owing to the parent on a revolving credit and $120 million for
inventory financing. There is about $4 million owing to trade
suppliers.
The Court approved the amended Chapter 11 Plan. Under the
Company's amended Plan, its Motorcycles/ATV and Marine divisions,
along with its continued Automotive parts and service operation,
will be sold to a newly organized, wholly-owned subsidiary of
Suzuki Motor Corporation, enabling those operations to continue
uninterrupted. The new entity will use the ASMC brand name and
operate in the continental U.S.
ASMC's legal advisor on the restructuring is Pachulski Stang Ziehl
& Jones LLP, and its financial advisor is FTI Consulting, Inc.
Nelson Mullins Riley & Scarborough LLP is serving as special
counsel on automobile dealer and industry issues. Further, ASMC
has proposed the appointment of Freddie Reiss, Senior Managing
Director at FTI Consulting, as chief restructuring officer, and
has also added two independent Board members to assist it through
this period. Rust Consulting Omni Bankruptcy, a division of Rust
Consulting, Inc., is the claims and notice agent. The Debtor has
retained Imperial Capital, LLC as investment banker.
SMC is represented by lawyers at Klee, Tuchin, Bogdanoff & Stern
LLP.
The Official Committee of Unsecured Creditors is represented by
Irell & Manella LLP. AlixPartners, LLC serves as its financial
advisor.
AMPAL-AMERICAN: Creditors' Disclosure Materials Are Approved
------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the official creditors' committee for Ampal-American
Israel Corp. received approval on Feb. 27 of disclosure materials
explaining the reorganization promulgated by the committee.
According to the report, the bankruptcy judge in New York ended
Ampal's exclusive plan-filing rights in January. Although there
was an agreement on the outlines of plan between Ampal and the
committee, the two sides couldn't agree on the details.
The report relates that the bankruptcy court can't yet schedule a
confirmation hearing for approval of the creditors' plan because
Israeli securities regulators also must approve the solicitation.
The plan pays unsecured creditors with new dividend-paying
preferred stock having an aggregate stated value equal to all
unsecured claims. Shareholders are to retain existing common
stock. Creditors would have the option of requiring the company
to purchase the preferred stock at varying discounts to face
value. The company would have the right to buy the preferred
stock at the same prices.
About Ampal-American
Ampal-American Israel Corporation -- http://www.ampal.com/--
acquired interests primarily in businesses located in Israel or
that are Israel-related. Ampal-American filed a Chapter 11
petition (Bankr. S.D.N.Y. Case No. 12-13689) on Aug. 29, 2012, to
restructure the Company's Series A, Series B and Series C
debentures. Bankruptcy Judge Stuart M. Bernstein presides over
the case. Ampal-American sought bankruptcy protection in the U.S.
because bankruptcy laws in Israel would lead to the Company's
liquidation.
Michelle McMahon, Esq., at Bryan Cave LLP, serves as the Debtor's
counsel. Houlihan Lokey serves as investment banker.
The petition was signed by Irit Eluz, chief financial officer,
senior vice president. The Company scheduled $290,664,095 in
total assets and $349,413,858 in total liabilities.
A three-member official committee of unsecured creditors is
represented by Brown Rudnick as counsel.
AQUILEX LLC: S&P Puts 'B' CCR on CreditWatch Negative
-----------------------------------------------------
Standard & Poor's Ratings Services said it placed its ratings on
Aquilex LLC, including the 'B' corporate credit rating, on
CreditWatch with negative implications.
"The CreditWatch placement follows the news that Norcross, Ga.-
based Aquilex will sell its specialty repair and overhaul division
for roughly $250 million in cash to Fort Worth, Texas-based AZZ
Inc.," said Standard & Poor's credit analyst James Siahaan.
AZZ manufactures electrical equipment and provides galvanizing
services. Completion of the transaction is subject to customary
closing conditions, including the expiration of the waiting period
under the Hart-Scott-Rodino Antitrust Improvements Act.
While the proceeds from the divestiture may be used to repay
Aquilex's term loan balance immediately following the completion
of the transaction, this may not lead to permanent improvement in
Aquilex's financial risk profile, as S&P recognizes the potential
for equity holders Centerbridge Partners L.P. to increase debt in
the near future. S&P also anticipates that the company's business
risk profile will weaken. If completed, the divestiture would
reduce Aquilex's overall earnings by roughly half and render the
company reliant solely on the earnings from its industrial
cleaning business.
The ratings are on CreditWatch with negative implications. S&P
expects to resolve the CreditWatch within the next several weeks
by either lowering or affirming the ratings after evaluating the
new capital structure, the equity owners' financial policies, and
management's business strategies. If Aquilex's long-term capital
structure appears likely to involve high debt leverage, i.e.
adjusted debt (including the value of its preferred class B
shares) to EBITDA of greater than 6x, then S&P could lower the
ratings.
ARCAPITA BANK: Court Lifts Stay for District Court Action
---------------------------------------------------------
On Friday, the Bankruptcy Court granted the motion of Tide Natural
Gas Storage I, LP, and Tide Natural Gas Storage II, LP, for the
lifting of the automatic stay to allow the continuance of the
District Court Action, under which the District Court will
determine:
1. the relevant rights of Tide, Falcon, and the Hopper Parties,
to the Escrow Funds; and
2. the merits of Tide's claims in the District Court Action.
The Bankruptcy Court retains jurisdiction to hear and determine
any bankruptcy related issues, including the distribution of any
Escrow Funds that Falcon may have a right to, and the status of
Tide?s claim for purposes of the Bankruptcy Code, specifically
whether that claim is subordinated under section 510.
As reported in the TCR on Oct. 9, 2012, prior to the petition date
in the Debtors' Chapter 11 cases, Tide filed an action in the U.S.
District Court for the Southern District of New York against
Falcon Gas Storage Company, Inc., Arcapita Bank B.S.C.(c), and
Arcapita Inc., alleging breach of contract and "fraud in the
inducement," among other things in relation to the 2010 sale of a
natural gas storage business. Tide Natural Gas Storage I, L.P. v.
Falcon Gas Storage Co., Inc., Case No. 10-cv-05821-KMW (S.D.N.Y.)
(before Judge Kimba Wood). At issue in the District Court Action
is the ownership of all of the escrow funds placed in escrow with
HSBC Bank USA, N.A., in connection with Tide's purchase of all of
Falcon's interest in NorTex Gas Storage Company, LLC.
On June 25, 2012, Tide filed a motion for an order lifting the
automatic stay pursuant to 11 U.S.C. Section 362(d) so that it may
liquidate its claims against Falcon Gas and Arcapita Bank in the
District Court Action.
About Arcapita Bank
Arcapita Bank B.S.C., also known as First Islamic Investment Bank
B.S.C., along with affiliates, filed for Chapter 11 protection
(Bankr. S.D.N.Y. Lead Case No. 12-11076) in Manhattan on March 19,
2012. The Debtors said they do not have the liquidity necessary
to repay a US$1.1 billion syndicated unsecured facility when it
comes due on March 28, 2012.
Falcon Gas Storage Company, Inc., filed a Chapter 11 petition
(Bankr. S.D.N.Y. Case No. 12-11790) on April 30, 2012. Falcon Gas
is an indirect wholly owned subsidiary of Arcapita that previously
owned the natural gas storage business NorTex Gas Storage Company
LLC. In early 2010, Alinda Natural Gas Storage I, L.P. (n/k/a
Tide Natural Gas Storage I, L.P.), Alinda Natural Gas Storage II,
L.P. (n/k/a Tide Natural Gas Storage II, L.P.) acquired the stock
of NorTex from Falcon Gas for $515 million. Arcapita guaranteed
certain of Falcon Gas' obligations under the NorTex Purchase
Agreement.
The Debtors tapped Gibson, Dunn & Crutcher LLP as bankruptcy
counsel, Linklaters LLP as corporate counsel, Towers & Hamlins LLP
as international counsel on Bahrain matters, Hatim S Zu'bi &
Partners as Bahrain counsel, KPMG LLP as accountants, Rothschild
Inc. and financial advisor, and GCG Inc. as notice and claims
agent.
Milbank, Tweed, Hadley & McCloy LLP represents the Official
Committee of Unsecured Creditors. Houlihan Lokey Capital, Inc.,
serves as its financial advisor and investment banker.
Founded in 1996, Arcapita is a global manager of Shari'ah-
compliant alternative investments and operates as an investment
bank. Arcapita is not a domestic bank licensed in the United
States. Arcapita is headquartered in Bahrain and is regulated
under an Islamic wholesale banking license issued by the Central
Bank of Bahrain. The Arcapita Group employs 268 people and has
offices in Atlanta, London, Hong Kong and Singapore in addition to
its Bahrain headquarters. The Arcapita Group's principal
activities include investing on its own account and providing
investment opportunities to third-party investors in conformity
with Islamic Shari'ah rules and principles.
The Arcapita Group had roughly US$7 billion in assets under
management. On a consolidated basis, the Arcapita Group owns
assets valued at roughly US$3.06 billion and has liabilities of
roughly US$2.55 billion. The Debtors owe US$96.7 million under
two secured facilities made available by Standard Chartered Bank.
Arcapita explored out-of-court restructuring scenarios but was
unable to achieve 100% lender consent required to effectuate the
terms of an out-of-court restructuring.
Subsequent to the Chapter 11 filing, Arcapita Investment Holdings
Limited, a wholly owned Debtor subsidiary of Arcapita in the
Cayman Islands, issued a summons seeking ancillary relief from the
Grand Court of the Cayman Islands with a view to facilitating the
Chapter 11 cases. AIHL sought the appointment of Zolfo Cooper as
provisional liquidator.
ARCAPITA BANK: Balks at Committee's Motion to Obtain Discovery
--------------------------------------------------------------
Arcapita Bank B.S.C.(c), et al., oppose the motion of the Official
Committee of Unsecured Creditors for authority to obtain discovery
from the Debtors regarding the corporate and control rights for
their portfolio investments.
According to the Debtors, the Committee fully understands the
"control risks the Debtors face," and that the Committee already
has a copy of all documents, including the administration and
management agreements, a form of proxy and other materials through
which the Debtors directly and indirectly administer the Portfolio
Company investments and the Committee well knows the terms upon
which the proxies (entered into between the Investors and
AIML) may be revoked and the other agreements terminated.
The Debtors state that what the Committee specifically seeks is:
i. All proxies executed with respect to any company in the
holding structure (which will identify the investors in the
Syndication Companies);
ii. All documents evidencing a revocation of the Proxies; and
iii. A current share register for each entity in the holding
structure (which will also identify the investors in the
Syndication Companies and SIP Investors).
According to papers filed with the Court, the professionals for
the Committee have informed the Debtors' professionals that the
Committee intends to first (i) disseminate the identity of all Co-
Investors and SIP Investors to the full Committee, including the
Debtors' competitors on the Committee, and then (ii) contact the
Investors directly and solicit their support for the terms of a
post confirmation governance system different from the Debtor's
proposed Plan that excludes the personnel and management with whom
the Investors are familiar.
The Committee's motion for an order pursuant to Rule 2004 should
be denied because it:
* Is outside of an order that may be entered pursuant to by Rule
2004 and the Committee has failed to meet its affirmative burden
establishing "cause";
* Violates the Debtors? exclusive right to operate its business
as a debtor in possession;
* Will greatly interfere with and disrupt the economic and
contractual relationships between the Debtors and the Investors
and may well cause the very problem the Committee claims it needs
to understand;
* Will disrupt the Debtors' business and will cause harm to the
value of the Debtors' assets in the event of the revocation of the
Proxies and the resulting breach in lending agreements due to a
"change of control";
* Violates the Debtors' exclusive right to solicit the
acceptance of the proposed Chapter 11 plan now on file;
* Amounts to the Committee's attempt to solicit support of a
Plan outside of an approved disclosure statement; and
* Would require Arcapita Bank to violate Bahraini law and expose
Arcapita Bank and its agents to civil and criminal liability in
Bahrain.
As reported in the TCR on Feb. 26, 2013, the Committee seeks
information on the so-called Co-Investors and SIP Investors who
hold the economic and/or voting interests in the Portfolio
Investments alongside the Debtors to understand who the
stakeholders in the Portfolio Investments are and what control
risks the Debtors face.
The Committee says it has not been provided any information
regarding the identity of the Co-Investors, the SIP Investors or
their holdings.
About Arcapita Bank
Arcapita Bank B.S.C., also known as First Islamic Investment Bank
B.S.C., along with affiliates, filed for Chapter 11 protection
(Bankr. S.D.N.Y. Lead Case No. 12-11076) in Manhattan on March 19,
2012. The Debtors said they do not have the liquidity necessary
to repay a US$1.1 billion syndicated unsecured facility when it
comes due on March 28, 2012.
Falcon Gas Storage Company, Inc., filed a Chapter 11 petition
(Bankr. S.D.N.Y. Case No. 12-11790) on April 30, 2012. Falcon Gas
is an indirect wholly owned subsidiary of Arcapita that previously
owned the natural gas storage business NorTex Gas Storage Company
LLC. In early 2010, Alinda Natural Gas Storage I, L.P. (n/k/a
Tide Natural Gas Storage I, L.P.), Alinda Natural Gas Storage II,
L.P. (n/k/a Tide Natural Gas Storage II, L.P.) acquired the stock
of NorTex from Falcon Gas for $515 million. Arcapita guaranteed
certain of Falcon Gas' obligations under the NorTex Purchase
Agreement.
The Debtors tapped Gibson, Dunn & Crutcher LLP as bankruptcy
counsel, Linklaters LLP as corporate counsel, Towers & Hamlins LLP
as international counsel on Bahrain matters, Hatim S Zu'bi &
Partners as Bahrain counsel, KPMG LLP as accountants, Rothschild
Inc. and financial advisor, and GCG Inc. as notice and claims
agent.
Milbank, Tweed, Hadley & McCloy LLP represents the Official
Committee of Unsecured Creditors. Houlihan Lokey Capital, Inc.,
serves as its financial advisor and investment banker.
Founded in 1996, Arcapita is a global manager of Shari'ah-
compliant alternative investments and operates as an investment
bank. Arcapita is not a domestic bank licensed in the United
States. Arcapita is headquartered in Bahrain and is regulated
under an Islamic wholesale banking license issued by the Central
Bank of Bahrain. The Arcapita Group employs 268 people and has
offices in Atlanta, London, Hong Kong and Singapore in addition to
its Bahrain headquarters. The Arcapita Group's principal
activities include investing on its own account and providing
investment opportunities to third-party investors in conformity
with Islamic Shari'ah rules and principles.
The Arcapita Group had roughly US$7 billion in assets under
management. On a consolidated basis, the Arcapita Group owns
assets valued at roughly US$3.06 billion and has liabilities of
roughly US$2.55 billion. The Debtors owe US$96.7 million under
two secured facilities made available by Standard Chartered Bank.
Arcapita explored out-of-court restructuring scenarios but was
unable to achieve 100% lender consent required to effectuate the
terms of an out-of-court restructuring.
Subsequent to the Chapter 11 filing, Arcapita Investment Holdings
Limited, a wholly owned Debtor subsidiary of Arcapita in the
Cayman Islands, issued a summons seeking ancillary relief from the
Grand Court of the Cayman Islands with a view to facilitating the
Chapter 11 cases. AIHL sought the appointment of Zolfo Cooper as
provisional liquidator.
ATP OIL & GAS: Committee Supports Shut-In of Gomez Properties
-------------------------------------------------------------
ATP Oil & Gas' official committee of unsecured creditors is
supporting ATP Oil's request for formal approval to shut in
deepwater leases known as the "the Gomez Properties."
According to BankruptcyData, the committee explains, "More
broadly, all stakeholders must confront the reality that the
Debtor's current path is unsustainable. If the Debtor is to
emerge as a going concern, all stakeholders will need to make
concessions. Having reviewed the Motion and related analysis
performed by the Debtor, the Committee believes that the relief
requested represents an important first step in confronting this
reality. The Committee urges the Debtor to take additional steps
to not only conserve liquidity, but to foster an environment
designed to lead to a successful recapitalization of its
business."
The Gomez Properties are deepwater leases involving all or parts
of five offshore blocks, including Mississippi Canyon (MC) 667,
668, 711, 754 and 755. The Debtor owns a 75% working interest in
block MC 754 and a 100% working interests in the other four
blocks.
The Debtor estimates cash losses from the continued production at
the Gomez Properties to exceed $5 million per month by March 2013.
Such operation, the Debtor says, will not only deplete millions in
estate cash but will also needlessly endanger its ability to
reorganize.
About ATP Oil
Houston, Tex.-based ATP Oil & Gas Corporation is an international
offshore oil and gas development and production company focused
in the Gulf of Mexico, Mediterranean Sea and North Sea.
ATP Oil & Gas filed a Chapter 11 petition (Bankr. S.D. Tex. Case
No. 12-36187) on Aug. 17, 2012. Attorneys at Mayer Brown LLP,
serve as bankruptcy counsel. Munsch Hardt Kopf & Harr, P.C., is
the conflicts counsel. Opportune LLP is the financial advisor
and Jefferies & Company is the investment banker. Kurtzman
Carson Consultants LLC is the claims and notice agent.
ATP disclosed assets of $3.6 billion and $3.5 billion of
liabilities as of March 31, 2012. Debt includes $365 million on a
first-lien loan where Credit Suisse AG serves as agent. There is
$1.5 billion on second-lien notes with Bank of New York Mellon
Trust Co. as agent. ATP's other debt includes $35 million on
convertible notes and $23.4 million owing to third parties for
their shares of production revenue. Trade suppliers have claims
for $147 million, ATP said in a court filing.
An official committee of unsecured creditors has been appointed in
the case. Evan R. Fleck, Esq., at Milbank, Tweed, Hadley &
McCloy, in New York, represents the Creditors Committee as
counsel.
BUTTE CREEK: Case Summary & 6 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: Butte Creek Park, LLC a California LLC
635 Paseo Comparenos
Chico, CA 95928
Bankruptcy Case No.: 13-22530
Chapter 11 Petition Date: February 27, 2013
Court: U.S. Bankruptcy Court
Eastern District of California (Sacramento)
Judge: Thomas Holman
Debtor's Counsel: Scott J. Sagaria, Esq.
SAGARIA LAW, P.C.
333 W. San Carlos Street, #620
San Jose, CA 95110
Tel: (408) 279-2288
Estimated Assets: $0 to $50,000
Estimated Debts: $10,000,001 to $50,000,000
A copy of the Company's list of its six largest unsecured
creditors filed with the petition is available for free at:
http://bankrupt.com/misc/caeb13-22530.pdf
The petition was signed by Gary Phillips.
CAMPUS POINTE: Voluntary Chapter 11 Case Summary
------------------------------------------------
Debtor: Campus Pointe, LLC
9769 Lamar Street
Spring Valley, CA 91977
Bankruptcy Case No.: 13-02610
Chapter 11 Petition Date: February 26, 2013
Court: U.S. Bankruptcy Court
District of Arizona (Phoenix)
Debtor's Counsel: Patrick A. Clisham, Esq.
ENGELMAN BERGER, P.C.
3636 N. Central Avenue, #700
Phoenix, AZ 85012
Tel: (602) 271-9090
Fax: (602) 222-4999
E-mail: pac@eblawyers.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Company did not file a list of creditors together with its
petition.
The petition was signed by Deyan V. Ptakovich, manager.
CCO HOLDINGS: Fitch Rates $1-Bil. Senior Unsecured Notes 'BB-'
--------------------------------------------------------------
Fitch Ratings has assigned a 'BB-' rating to CCO Holdings, LLC's
$1 billion issuance of senior unsecured notes consisting of a
tranche due 2021 and a tranche due 2023. Proceeds from the
offering are expected to be used for general corporate purposes
including repayment of existing bank debt outstanding at Charter
Communications Operating, LLC. CCOH and CCO are indirect wholly
owned subsidiaries of Charter Communications, Inc. As of Dec. 31,
2012, Charter had approximately $12.9 billion of debt (principal
value) outstanding including $3.3 billion of senior secured debt.
Key Rating Drivers:
-- Issuance is in line with Charter's strategy to simplify its
debt structure and extend its maturity profile while reducing
leverage to its target range of 4x to 4.5x.
-- The issuance will not result in any material improvement of
the company's credit profile but reduces refinancing risk
related to 2016 scheduled maturities.
-- Acquisition of Bresnan Broadband Holdings, LLC (Bresnan) is
neutral to Charter's ratings.
-- Bresnan acquisition fits strategically and will not generate
meaningful cost synergies or present integration risks.
-- Expected improvement in Charter's credit profile likely to be
delayed by Bresnan acquisition.
Fitch's ratings incorporate Charter's pending acquisition of
Bresnan for $1.625 billion in cash. Fitch anticipates the debt-
funded acquisition will modestly increase Charter's leverage;
however, leverage will remain within Fitch's expectations for the
rating. Charter's leverage will increase to approximately 5.1x on
a pro forma basis as of the latest 12 months (LTM) ending Dec. 31,
2012 after giving consideration for the incremental debt
associated with the proposed transaction and Bresnan's EBITDA
generation.
Charter's capital structure and financial strategy remains
consistent and centers on simplifying its debt structure, and
extending its maturity profile while reducing leverage to its
target range of 4x to 4.5x. Pro forma leverage remains outside the
company's target at 5.1x for the LTM period ended Dec. 31, 2012.
The incremental debt associated with the acquisition will slow the
pace of expected improvement of Charter's credit profile during
2013. Fitch now anticipates Charter's leverage will remain close
to 5x at the end of 2013 before declining somewhat to 4.6x by the
end of 2014.
Bresnan operates cable systems in Montana, Wyoming, Colorado and
Utah passing approximately 666,000 homes. The acquisition is in
line with Charter's strategy to provide service in largely
secondary and rural markets. However, Bresnan's cable service area
does not complement Charter's existing service footprint so the
acquisition will not generate any meaningful operational synergies
(outside of programming cost savings) or create integration risks.
From Fitch's perspective Bresnan has a relatively strong operating
profile. Bresnan's service penetration rates, revenue and EBITDA
growth metrics are stronger than Charter's.
Fitch believes that Charter has sufficient capacity within the
current ratings to accommodate changes to the company's operating
strategy and plans to maintain a higher level of capital
expenditures (relative to historical norms and peer comparisons).
In Fitch's opinion, the strategy shift along with higher level of
capital expenditures will lead to a stronger overall competitive
position. The changes to Charter's operating strategy support the
company's overall strategic objectives, and set the foundation for
sustainable growth while creating more efficient operating
profile. However, Fitch expects the strategy will hinder free cash
flow (FCF) generation and strain EBITDA margins during 2013,
limiting overall financial flexibility and slowing the company's
progress toward achieving its leverage target. During the short
term, Fitch believes that customer connections, revenue, and
expense metrics will be negatively affected.
Charter generated approximately $131 million of FCF during the
year ended 2012, down markedly from the $426 million of FCF
produced during the year ended 2011. Charter's more viable capital
structure has positioned the company to generate positive FCF.
However, Fitch expects FCF generation during 2013 will suffer from
the effects of lower operating margin and higher capital
intensity. Capital expenditures during 2012 increased 33% relative
to 2011 to approximately $1.8 billion, representing 23% of
revenues. Fitch believes capital intensity will remain elevated
during 2013 and 2014. Fitch anticipates Charter will generate
between $250 million and $300 million of FCF during 2013 and
produce between $450 million to $500 million during 2014 when
stronger margins return.
Rating concerns center on Charter's elevated financial leverage
(relative to other large cable MSOs), and a comparatively weaker
subscriber clustering and operating profile. Moreover, Charter's
ability to adapt to the evolving operating environment while
maintaining its relative competitive position given the
challenging competitive environment and weak housing and
employment trends remains a key consideration.
Charter's liquidity position is adequate given the current rating
and is supported by cash on hand, borrowing capacity from CCO's
$1.15 billion revolver (approximately $960 million was available
as of Dec. 31, 2012) and expected FCF generation. Charter's
revolver commitment expires on April 11, 2017.
Charter has successfully extended its maturity profile with only
5.9% of outstanding debt as of Dec. 31, 2012 is scheduled to
mature before 2016, including $260 million and $411 million during
2013 and 2014, respectively. The current issuance reduces the
refinancing risk related to 2016 scheduled maturities. Pro forma
for the current issuance, 2016 scheduled maturity is reduced to
approximately $591 million from $1.6 billion as of Dec. 31, 2012.
Rating Sensitivities:
-- Positive rating actions possible if leverage declines below
4.5x;
-- Company demonstrates progress in closing gaps relative to
industry peers on service penetration rates and strategic
bandwidth initiatives;
-- Operating profile strengthens as company captures sustainable
revenue and cash flow growth envisioned when implementing the
current operating strategy.
-- Negative rating actions would likely coincide with leveraging
transaction that increases leverage beyond 5.5x in the absence
of a credible deleveraging plan;
-- Adoption of a more aggressive financial strategy;
-- Perceived weakening of Charter's competitive position or
failure of the current operating strategy to produce
sustainable revenue and cash flow growth along with
strengthening operating margins.
CCO HOLDINGS: Moody's Rates New $1-Bil. Bond Issuance 'B1'
----------------------------------------------------------
Moody's Investors Service assigned a B1 rating to the proposed
$1 billion bond issuance of CCO Holdings, LLC. The company plans
to use proceeds primarily to repay first lien bank debt of Charter
Communications Operating LLC, as well as for general corporate
purposes.
The proposed transaction does not meaningfully change the mix of
first lien bank debt and bonds, particularly given the $1.5
billion of committed bank financing which Charter will likely draw
to fund the Bresnan acquisition, so Moody's did not change
instrument ratings.
Following the redemption of all the CCH II 13.5% senior notes in
the December 2012 quarter, Moody's does not rate any debt at CCH
II. As a resulting administrative action, Moody's withdrew the Ba3
corporate family rating, Ba3-PD probability of default rating,
SGL-2 speculative grade liquidity rating and stable outlook of CCH
II, LLC (CCH II), an indirect intermediate holding company of
Charter Communications, Inc. (Charter). Moody's concurrently
assigned a Ba3 corporate family rating, Ba3-PD probability of
default rating, SGL-2 speculative grade liquidity rating and
stable outlook to Charter.
CCO Holdings, LLC
Senior Unsecured Bonds, Assigned B1, LGD4, 68%
Charter Communications Inc.
Probability of Default Rating, Assigned Ba3-PD
Speculative Grade Liquidity Rating, Assigned SGL-2
Corporate Family Rating, Assigned Ba3
Outlook, Stable
CCH II, LLC
Probability of Default Rating, Withdrawn, previously rated Ba3-PD
Speculative Grade Liquidity Rating, Withdrawn, previously rated
SGL-2
Corporate Family Rating, Withdrawn, previously rated Ba3
The proposed funding for the Bresnan transaction is in line with
Moody's expectations. Pro forma for the acquisition, Moody's
estimates leverage would increase to about 5.2 times debt-to-
EBITDA from 4.9 times for the year ended December 31, 2012.
Moody's believes the acquisition would favorably expand Charter's
scale, increasing total revenue to about $7.9 billion from about
$7.5 billion. Bresnan subscriber penetration and revenue per homes
passed metrics are better than Charter's, and over the past year,
Bresnan has added high speed data and phone subscribers at a
faster rate than most peers, including Charter, and kept video
subscribers about flat, also better than most peers including
Charter. Moody's estimates minimal cost synergies since Bresnan
currently benefits from the scale of its existing owner,
Cablevision Systems Corporation, for program and equipment
purchasing and corporate costs. However, Moody's also considers
integration risk modest, given the positive momentum of the
Bresnan operations and that Charter's chief executive officer Tom
Rutledge has familiarity with the Bresnan asset from his
experience as chief operating officer of Cablevision.
Charter's Ba3 corporate family rating reflects its moderately high
financial risk, with leverage of 4.9 times debt-to-EBITDA and
likely to increase slightly with the Bresnan acquisition. This
leverage poses risk considering the pressure on revenue from its
increasingly mature core video offering (which represents about
half of total revenue) and the intensely competitive environment
in which it operates. Moody's expects Charter's initiatives to
enhance its product set, especially the video offering, and to
implement changes to its selling strategy and organizational
structure will keep operating and capital expenditures elevated,
pressuring both EBITDA and free cash flow over the next several
quarters, but greater penetration of all products and continued
expansion of the commercial business should yield more EBITDA.
Also, capital intensity will likely moderate, albeit at a level
higher than peers, facilitating growing free cash flow. The
company's substantial scale and Moody's expectations for
operational improvements and growth in high speed data and
commercial phone customers, along with the meaningful perceived
asset value associated with its sizeable (over 5 million) customer
base, support the rating, as does the company's good liquidity.
The stable outlook incorporates expectations for leverage below
5.5 times debt-to-EBITDA, positive free cash flow and maintenance
of good liquidity.
Moody's would consider an upgrade with continued improvements in
both financial and operating metrics and a commitment to a better
credit profile. Specifically, Moody's could upgrade the CFR based
on expectations for sustained leverage below 4.5 times debt-to-
EBITDA and free cash flow-to-debt in excess of 5%, along with
maintenance of good liquidity. A higher rating would require
clarity on fiscal policy, as well as product penetration levels
more in line with industry averages and growth in revenue and
EBITDA per homes passed.
Moody's would likely downgrade ratings if ongoing basic subscriber
losses, declining penetration rates, and/or a reversion to more
aggressive financial policies contributed to expectations for
leverage above 6 times debt-to-EBITDA and / or low single digit or
worse free cash flow-to-debt.
The principal methodology used in this rating was the Global Cable
Television Industry Methodology published in July 2009. Other
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the U.S., Canada and EMEA
published in June 2009.
One of the largest domestic cable multiple system operators
serving approximately 4 million residential video customers (5.3
million customers in total), Charter Communications, Inc.
maintains its headquarters in Stamford, Connecticut. Its annual
revenue is approximately $7.5 billion.
CEDAR FAIR: Moody's Assigns 'B1' Rating to New $500MM Sr. Notes
---------------------------------------------------------------
Moody's Investors Service assigned a B1 rating to Cedar Fair,
L.P.'s proposed $500 million guaranteed senior unsecured notes due
2021. Cedar Fair plans to utilize the proceeds from the notes as
well as a proposed new credit facility to refinance its existing
$1.13 billion term loan. Moody's also upgraded Cedar Fair's
existing $405 million senior unsecured notes due 2018 to B1 from
B2, and affirmed Cedar Fair's Ba3 Corporate Family Rating (CFR),
Ba3-PD Probability of Default Rating (PDR), SGL-2 speculative-
grade liquidity rating and stable rating outlook.
The proposed refinancing is credit positive as it will extend the
overall maturity profile at a modest increase in cash interest
expense (less than $5 million) that is manageable within the
company's projected cash flow. Cedar Fair plans to fund
transaction fees from its existing cash balance and, therefore,
total debt should not change meaningfully.
Moody's assumes in the B1 rating assignment that Cedar Fair
refinances its existing term loan with the proposed notes and
proposed $630 million term loan. If the notes are downsized
significantly or Cedar Fair does not proceed with its plan to
issue the notes, Moody's may adjust the note ratings to B2 from B1
and the proposed credit facility rating to Ba2 from Ba1. The notes
are a joint and several obligation of Cedar Fair, Canada's
Wonderland Company, which holds the Toronto park, and Magnum
Management (Magnum; a non-operating holding company).
Assignments:
Issuer: Cedar Fair, L.P.
Senior Unsecured Regular Bond/Debenture, Assigned a B1, LGD5 - 75%
Upgrades:
Issuer: Cedar Fair, L.P.
Senior Unsecured Regular Bond/Debenture, Upgraded to B1, LGD5 -
75% from B2, LGD6 - 90%
Affirmations:
Issuer: Cedar Fair, L.P.
Corporate Family Rating, Affirmed Ba3
Probability of Default Rating, Affirmed Ba3-PD
Speculative Grade Liquidity Rating, Affirmed SGL-2
Senior Secured Bank Credit Facility, Affirmed Ba1
Ratings Rationale:
Cedar Fair's Ba3 Corporate Family Rating reflects the good
operating cash flow and strong EBITDA margins generated from its
portfolio of regional amusement parks, high leverage and
distribution payout, and exposure to discretionary consumer
spending. Operations and substantial attendance (23.3 million in
2012) are supported by experienced park management teams, good
entertainment value to consumers from the rides and attractions,
and high entry barriers. Sizable re-investment is necessary to
maintain a competitive service offering as attendance is exposed
to competition from a wide variety of other leisure and
entertainment activities as well as cyclical discretionary
consumer spending. Debt-to-EBITDA leverage (4.1x FY 2012
incorporating Moody's standard adjustments) is high, but has
declined from 5.2x in 2009. Moody's projects debt-to-EBITDA
leverage in a low 4x range or lower in 2013 and 2014 and this
would more comfortably position the company within the rating
category. Distributions to unit holders under the MLP structure
(Cedar Fair previously announced it is increasing its annual per
unit distribution to $2.50 in 2013 from $1.60) consume a majority
of cash flow and are aggressive, but Moody's believes management's
target of sustaining debt-to-EBITDA leverage at less than 4x
(excluding Moody's standard adjustments) is designed to provide
flexibility to support the distribution in a range of economic
environments.
Cedar Fair's SGL-2 speculative-grade liquidity rating reflects
good liquidity over the next 12 months supported by modest
projected free cash flow (after distributions) that is sufficient
to meet the required annual term loan amortization (expected to be
$6.3 million pro forma for the proposed refinancing), and good
covenant headroom.
The stable rating outlook incorporates Moody's Macroeconomic Board
projection for 1.5% to 2.5% U.S. real GDP growth in 2013 and
reflects Moody's view that Cedar Fair will maintain a good
liquidity position and continue to generate meaningful cash flow.
Moody's expects modest annual increases in the distribution based
on earnings growth. Debt reduction is expected to be modest, and
debt-to-EBITDA is projected in a low 4x range or lower in 2013 and
2014.
The MLP structure and likelihood that management will direct cash
to unit holders over time constrains the ratings. Material
voluntary debt reduction such that debt-to-EBITDA is sustained
below 3.5x, EBITDA less capex-to-interest is sustained above 3.0x,
and CFO less capex-to-debt is sustained above 10% could result in
an upgrade. Performance ahead of plan by itself will not likely
warrant positive rating movement given expectations that a
majority of excess cash flow after capital expenditures and
required debt service would benefit unit holders through increased
distributions, rather than creditors.
Weak operating performance, acquisitions, or unit holder
distributions or repurchases leading to CFO less capex-to-debt to
a level below 7%, EBITDA less capex to interest below 2.0x, or
debt-to-EBITDA above 4.5x could result in a downgrade. A
deterioration in liquidity due to increasing revolver usage (above
seasonal draw downs), failure to maintain sufficient EBITDA
cushion under financial covenants, or anticipated difficulty
addressing maturities could also result in a downgrade.
Cedar Fair's ratings were assigned by evaluating factors that
Moody's considers relevant to the credit profile of the issuer,
such as the company's (i) business risk and competitive position
compared with others within the industry; (ii) capital structure
and financial risk; (iii) projected performance over the near to
intermediate term; and (iv) management's track record and
tolerance for risk. Moody's compared these attributes against
other issuers both within and outside Cedar Fair's core industry
and believes Cedar Fair's ratings are comparable to those of other
issuers with similar credit risk. Other methodologies used include
Loss Given Default for Speculative-Grade Non-Financial Companies
in the U.S., Canada and EMEA published in June 2009.
Cedar Fair, headquartered in Sandusky, Ohio, is a publicly traded
Delaware master limited partnership formed in 1987 that owns and
operates 11 amusement parks, five water parks (four outdoor and
one indoor) and hotels in North America. Properties are located in
the U.S. and Canada and include Cedar Point (OH), Kings Island
(OH), Knott's Berry Farm (CA), and Canada's Wonderland (Toronto).
In June 2006, Cedar Fair, L.P. completed the acquisition of
Paramount Parks, Inc. from a subsidiary of CBS Corporation for a
purchase price of $1.24 billion. Cedar Fair's revenue for its
fiscal year ended December 2012 was approximately $1.07 billion.
CEDAR FAIR: S&P Assigns 'B' Rating on $500MM Notes Due 2021
-----------------------------------------------------------
Standard & Poor's Ratings Services assigned Sandusky, Ohio-based
theme park operator Cedar Fair L.P.'s proposed $500 million senior
unsecured notes due 2021 its 'B' issue-level rating (two notches
lower than its 'BB-' corporate credit rating on the company), with
a recovery rating of '6', indicating S&P's expectation for
negligible (0% to 10%) recovery for lenders in the event of a
payment default. The company plans to use the proceeds, along
with its proposed $630 million term loan, to repay approximately
$1.1 billion in outstanding balances under Cedar Fair's existing
term loan.
S&P's 'BB-' corporate credit rating on Cedar Fair reflects S&P's
assessment of the company's business risk profile as "fair," and
its assessment of the company's financial risk profile as
"aggressive," according to its criteria.
"Our assessment of Cedar Fair's business risk profile as fair
reflects our belief that management will continue to control costs
and EBITDA margin will be maintained in the mid-30% area over the
next few years. The assessment also reflects Cedar Fair's good
geographic diversity, operating 11 amusement parks and four water
parks in eight states and Canada, as well as the relatively high
barriers to entry in the industry. We believe these factors are
offset, however, by the vulnerability of operations to adverse
weather conditions, a risk that is exacerbated by the seasonal
nature of the business (the majority of EBITDA is generated in the
second and third quarters). The company's reliance on consumer
discretionary spending, the competition Cedar Fair faces with
other leisure activities for consumers' discretionary income, and
high capital expenditure requirements also weigh on our business
risk assessment," S&P said.
"Our assessment of Cedar Fair's financial risk profile as
aggressive reflects our belief that over the next few years
adjusted leverage will be maintained below 4.5x, on average, that
interest coverage will remain good for the rating at above 3.0x,
and that adjusted funds from operations to total debt will be
maintained in the mid- to high-teens percent area. While adjusted
leverage could temporarily spike slightly above 4.5x, particularly
in the first quarter to fund seasonal uses of cash, we believe
Cedar Fair will be able to consistently repay revolver balances by
year end. Our financial risk profile assessment also reflects our
expectation that while the company's sizable distributions will
remain less than free cash flow generation, they will likely grow
over time in line with free cash flow," S&P added.
RATINGS LIST
Cedar Fair L.P.
Corporate Credit Rating BB-/Stable/--
New Ratings
Cedar Fair L.P.
Canada's Wonderland Company
Magnum Management Corporation
$500M sr unscrd nts due 2021 B
Recovery Rating 6
CENGAGE LEARNING: Moody's Changes PDR to Caa3-PD/LD
---------------------------------------------------
Moody's Investors Service revised Cengage Learning Acquisitions,
Inc.'s Probability of Default Rating to Caa3-PD/LD from Caa3-PD in
response to the company's cumulative discounted debt repurchases.
The PDR revision reflects Moody's view that the debt repurchases
completed at significant discounts to par constitute a distressed
exchange. Moody's will remove the LD modifier in approximately
three days. Moody's also affirmed Cengage's Caa3 Corporate Family
Rating and the rating outlook remains negative. Loss given default
assessments are revised to reflect the updated debt mix.
Affirmations:
Issuer: Cengage Learning Acquisitions, Inc.
Corporate Family Rating, Affirmed Caa3
Probability of Default Rating, Affirmed Caa3-PD /LD (/LD appended)
Speculative Grade Liquidity Rating, Affirmed SGL-4
Senior Secured Bank Credit Facility, Affirmed Caa2, LGD3 - 39%
(from LGD3 - 37%)
Senior Secured Regular Bond/Debenture (1st lien notes due Apr 15,
2020), Affirmed Caa2, LGD3 - 39% (from LGD3 - 37%)
Senior Secured Regular Bond/Debenture (2nd lien notes due June 30,
2019), Affirmed Ca, LGD5 - 87% (from LGD5 - 85%)
Senior Unsecured Regular Bond/Debenture Jan 15, 2015, Affirmed Ca,
LGD6 - 93% (from (LGD6 - 92%)
Senior Subordinated Regular Bond/Debenture July 15, 2015, Affirmed
Ca, LGD6 - 96% (from LGD6 - 95%)
Ratings Rationale:
The debt repurchases have not offset earnings deterioration and
Cengage's leverage has increased to an unsustainable level. As a
result of this and continued negative free cash flow generation,
Moody's is affirming the Caa3 CFR. However, the debt repurchases
potentially provide additional flexibility for Cengage to address
its debt maturities. By reducing the amount of remaining 10.5%
senior unsecured notes due 2015 below $350 million (approximately
$292 million outstanding as of 2/12/13), Cengage no longer faces
an early maturity trigger in October 2014 on its 2017 term loan
and revolver. In addition, by reducing the combined amount of
13.25% senior subordinated notes due 2015 and 13.75% senior PIK
notes due 2015 below $250 million (approximately $196 million
combined outstanding as of 2/12/13), Cengage no longer faces an
early maturity trigger in April 2015 on its 2017 term loan and
revolver.
The benefit of such actions will depend on the company's ability
to address its earlier $2.1 billion July 2014 term loan maturity.
In addition, the maturity on Cengage's $300 million 2017 revolver
will still spring to April 2014 if more than $400 million of the
2014 term loans are outstanding as of that date. Losing access to
the revolver would further elevate default risk given the cash
used for recent debt repurchases, and Cengage's reliance on the
facility to cover its highly seasonal cash needs. Moody's believes
refinancing the July 2014 term loans and the remaining $527
million of unsecured notes due in 2015 will be challenging without
a principal reduction. Cengage's equity sponsors hold an
undisclosed amount of the company's debt.
Cengage's Caa3 CFR reflects Moody's view of the company's elevated
future default risk due to its very high debt-to-EBITDA leverage
(11.5x LTM 12/31/12 incorporating Moody's standard adjustments and
cash pre-publication costs as an expense), limited to negative
free cash flow generation and significant refinancing risk
associated with its $2.7 billion of remaining 2014/2015
maturities. Cengage has a good market position and broad range of
product offerings in higher education publishing. Moody's believes
the company is reasonably positioned to transition its revenue as
higher education publishing continues to shift to digital from
print formats. Cengage nevertheless faces multiple near-term
operating headwinds from market and company-specific issues.
The negative rating outlook reflects the elevated risk of default
unless the company can reverse its weak operating performance and
refinance maturities.
Heightened near-term risk of default including through distressed
exchange transactions, or a reduction in the recovery assumption
could lead to downward pressure on the CFR, instrument ratings
and/or the PDR rating. Cengage's ratings could also be downgraded
if the company is unable to make de-leveraging progress or
generate and sustain comfortably positive free cash flow. A
weakening of liquidity would also pressure Cengage's ratings
including through such factors as significant revolver usage, lost
revolver access, continued negative free cash flow, erosion of the
covenant cushion, or changes in the likely cost of refinancing.
An upgrade or a shift to a stable rating outlook is unlikely
unless the company is able to address its 2014/2015 maturities at
a manageable cost. If that were to occur, Cengage could be
upgraded if good operating execution leads to revenue and earnings
growth, consistent free cash flow generation and reduced leverage,
or the company de-levers through asset sales, an equity offering
or acquisitions.
The principal methodology used in this rating was the Global
Publishing 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.
Cengage, headquartered in Stamford, CT, is a provider of learning
solutions to colleges, universities, professors, students,
libraries, reference centers, government agencies, corporations
and professionals. Cengage publishes college textbooks and
reference materials, and supplements its print publications with
digital solutions. The company was acquired by funds managed by
Apax Partners and OMERS Capital Partners in a $7.3 billion
leveraged buy-out from Thomson Reuters Corporation in July 2007.
Revenue for the 12 months ended December 2012 was approximately
$1.8 billion.
CENTRAL EUROPEAN DISTRIBUTION: Exchange Prompts Moody's Ca Rating
-----------------------------------------------------------------
Moody's Investors Service downgraded the corporate family rating
(CFR) of Central European Distribution Corporation to Ca and its
probability of default rating to Ca-PD. Concurrently, Moody's has
downgraded to Ca from Caa2 the rating on the senior secured notes
due in 2016 issued by CEDC Finance Corporation International. The
outlook on the ratings is negative.
Ratings Rationale:
"Today's rating action follows the company's announcement on 25
February 2013 of its offer to existing bondholders to exchange
part of their stakes into common equity and part into a reduced
amount of new notes bearing a lower coupon, and Moody's view that
the debt exchange offer -- if it is approved by bondholders --
will represent a distressed exchange", says Paolo Leschiutta, a
Moody's Vice President - Senior Credit Officer and lead analyst
for CEDC. "The offer follows CEDC's failure to secure adequate
financing to repay its $310 million convertible notes due 15 March
2013 and the unsustainable capital structure given the currently
depressed profitability of the company", continued Mr. Leschiutta.
The PDR of Ca-PD reflects Moody's expectation that there will be a
transaction, either in line with the proposed offer or under other
conditions, which is going to represent a distressed exchange. The
CFR of Ca reflects the relatively low recovery rate for notes
holders that will accept the offer and the fact that these
represent most of the liability structure of the company.
The company's proposed offer, which expires on 22 March, includes
the following: (1) holders of the $380 million 9.125% senior
secured notes due 2016 will receive $508.21 principal amount of
6.5% new senior secured notes due 2020 and 16.52 new shares of
CEDC common stock in exchange for each $1,000 principal amount of
their notes; (2) holders of the ca. EUR430 million 8.875% senior
secured notes due 2016 will receive $682.37 principal amount of
6.5% senior secured notes due 2020 and 22.18 new shares of CEDC in
exchange for each EUR1,000 principal amount of their notes; and
(3) holders of the $310 million 3% convertible senior notes due
2013 will receive 8.86 new shares of CEDC common stock for each
$1,000 principal amount of the notes.
The negative outlook recognizes that further downward pressure
could be exerted on the ratings in the coming weeks if the company
failed to reach an agreement with its bondholders or if other form
of debt restructuring takes place resulting in a greater loss for
bondholders or in a default.
What Could Change the Rating Up/Down
Downward pressure on the rating could develop if (1) the
convertible notes were not re-paid on time or (2) CEDC were to
pursue a debt restructuring through a bankruptcy procedure.
Ratings might be repositioned upwards once the company completes
its restructuring process and manages to reduce its debt burden.
Principal Methodology
The principal methodology used in these ratings was the Global
Alcoholic Beverage Rating Methodology published in September 2009.
Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.
Headquartered in Warsaw, Poland, CEDC is one of the largest vodka
producers in the world, with annual sales of around 33.2 million
nine-litre cases, mainly in Russia and Poland. Following
investments in Russia over the past two years and the
consolidation since February 2011 of Whitehall Group, an importer
and distributor of premium spirits and wine, CEDC generated net
revenues of around $830 million during financial year-end December
2011.
CHARTER COMMUNICATIONS: S&P Rates $1BB Sr. Unsecured Notes 'BB-'
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned 'BB-' issue-level
ratings to an aggregate $1 billion of senior unsecured notes to be
issued by CCO Holdings LLC and CCO Holdings Capital Corp. The
recovery rating on this debt is '3', indicating meaningful (50% to
70%) recovery of principal. The notes will consist of two
tranches: $500 million due 2021 and $500 million due 2023. The
co-issuers are subsidiaries of St. Louis, Mo.-based cable operator
Charter Communications Inc. (Charter).
S&P's ratings on Charter and subsidiaries, including the 'BB-'
corporate credit rating and the stable outlook, are not affected
by the transaction.
Charter has agreed to purchase Bresnan Broadband Holdings LLC from
Cablevision Systems Corp. for $1.625 billion, expected to close in
the third quarter. The Bresnan cable properties serve about
366,000 customer relationships, including around 300,000 basic
video customers in Colorado, Montana, Wyoming and Utah. Charter
has indicated it will finance that transaction with a new
$1.5 billion secured bank loan. When the Bresnan acquisition was
announced on Feb. 7, S&P said that the small increase in debt
leverage would not affect the 'BB-' corporate credit rating but
that, based on the originally contemplated $1.5 billion increase
in secured debt, recovery prospects for unsecured debt at CCO
Holdings would weaken. However, because Charter will use the new
$1 billion of unsecured notes to repay bank debt (thus net secured
debt will rise by only $500 million) it is S&P's current view that
and the recovery rating on unsecured debt at CCO Holdings will
remain at '3'.
RATINGS LIST
Charter Communications Inc.
Corporate Credit Rating BB-/Stable/--
New Rating
CCO Holdings LLC
CCO Holdings Capital Corp.
$500 Mil. Senior Unsecured Notes Due 2021 BB-
Recovery Rating 3
$500 Mil. Senior Unsecured Notes Due 2023 BB-
Recovery Rating 3
CLAIRE'S STORES: Commences Cash Tender Offer for Senior Notes
-------------------------------------------------------------
Claire's Stores, Inc. on March 1 announced the commencement of a
cash tender offer for up to $210 million aggregate principal
amount of its outstanding debt securities from two series.
The tender offer is being made pursuant to an Offer to Purchase,
dated March 1, 2013, and a related Letter of Transmittal, dated
March 1, 2013, which set forth a more detailed description of the
tender offer.
Upon the terms and subject to the conditions described in the
Offer to Purchase, the Letter of Transmittal and any amendments or
supplements to the foregoing, the Company is offering to purchase
for cash up to $210 million aggregate principal amount of its
9.25% Senior Notes due 2015 and 9.625%/10.375% Senior Toggle Notes
due 2015.
Holders must validly tender their Notes at or prior to 5:00 p.m.,
New York City time, on March 14, 2013 to be eligible to receive
the Total Consideration. The tender offer will expire at 11:59
p.m., New York City time, on March 28, 2013, unless extended or
earlier terminated.
Title of Security
9.25% Senior Notes due 2015
9.625%/10.375% Senior Toggle Notes due 2015
CUSIP
Number
179584 AC1
79584 AF4
Principal
Amount
Outstanding
$220,270,000
$302,189,620
Dollars per $1,000 Principal
Amount of Securities
Tender Offer
Consideration
$988.00
$988.75
Early
Participation
Payment
$30.00
$30.00
Total
Consideration
$1,018.00
$1,018.75
The Company's obligation to accept for purchase any of the Notes
in the tender offer is subject to the satisfaction or waiver of a
number of conditions, including the completion by the Company of a
private placement of new debt on terms satisfactory to the
Company. The tender offer is not contingent upon the tender of
any minimum principal amount of the Notes. The Company reserves
the right to waive any one or more of the conditions at any time.
In the event that less than $210 million aggregate principal
amount of Notes is tendered and accepted for purchase, the Company
currently intends to redeem, at its option, Senior Notes and/or
Senior Toggle Notes, on or after June 1, 2013, in an aggregate
principal amount of at least $210 million less the principal
aggregate amount of Notes purchased in the tender offer, at a
redemption price of 100% of the principal amount plus accrued but
unpaid interest.
The tender offer consideration for each $1,000 principal amount of
each series of the Notes validly tendered and accepted for
purchase pursuant to the tender offer will be the applicable
tender offer consideration for such series of Notes. Notes that
are validly tendered and not validly withdrawn at or prior to the
Early Participation Date and accepted for purchase by the Company
will receive the Total Consideration which is equal to the Tender
Offer Consideration for the applicable Notes plus the Early
Participation Payment, payable on the Initial Payment Date. To
the extent the tender offer is not fully subscribed as of the
Early Participation Date, Notes validly tendered after the Early
Participation Date but before the Expiration Date and accepted for
purchase by the Company will receive the applicable Tender Offer
Consideration, payable on the Final Payment Date, but will not
receive the Early Participation Payment.
Notes that are tendered and accepted for purchase at or prior to
the Early Participation Date will be settled on the date that we
refer to as the "Initial Payment Date," which will promptly follow
the Early Participation Date. The Company anticipates that the
Initial Payment Date for the Notes will be the first business day
after the Early Participation Date. Notes that are tendered and
accepted for purchase after the Early Participation Date but
before the Expiration Date will be settled on the date that we
refer to as the "Final Payment Date," which will promptly follow
the applicable Expiration Date. The Company anticipates that the
Final Payment Date for the Notes, if any, will be the first
business day after the Expiration Date. If no additional Notes
are tendered after the Early Participation Date and/or if the
tender offer is fully subscribed as of the Early Participation
Date, there will be no Final Payment Date.
In addition to the applicable Total Consideration or Tender Offer
Consideration, as the case may be, all Notes accepted for purchase
will also receive accrued and unpaid interest on those Notes from
the last interest payment date to, but not including, the Initial
Payment Date or the Final Payment Date, as applicable.
Subject to the terms and conditions of the Offer to Purchase (and
any amendments or supplements thereto), the Company will accept
for payment only such portions of validly tendered Notes that do
not result in an aggregate principal amount of Notes purchased
that exceeds $210 million. If the amount tendered is sufficient
to allow the Company to accept some, but not all of the validly
tendered Notes, the amount of Notes purchased will be prorated
based on the aggregate principal amount of Notes validly tendered
in the tender offer, rounded down for each series of Notes to the
nearest integral multiple of $1,000, but not less than the minimum
principal amount to be accepted.
The Company intends to accept for purchase all Notes validly
tendered at or prior to the Early Participation Date, and will
only prorate such Notes if the aggregate principal amount of Notes
validly tendered and not withdrawn exceeds $210 million. If the
aggregate principal amount of Notes tendered is less than $210
million as of the Early Participation Date, holders who validly
tender Notes after the Early Participation Date may be subject to
proration, whereas holders who validly tender Notes at or prior to
the Early Participation Date will not be subject to proration.
Furthermore, if the aggregate principal amount of tendered Notes
equals or exceeds $210 million as of the Early Participation Date,
the Company will not accept any Notes for purchase after the Early
Participation Date and there will be no Final Payment Date.
Tendered Notes may be withdrawn from the tender offer at or prior
to, but not after, 5:00 p.m., New York City time, on March 14,
2013.
The Company has retained Credit Suisse Securities (USA) LLC to
serve as dealer manager for the tender offer. D.F. King & Co.,
Inc. has been retained to serve as the information agent and
tender agent for the tender offer.
For additional information regarding the terms of the tender
offer, please contact: Credit Suisse Securities (USA) LLC at (800)
820-1653 (U.S. toll-free) or (212) 325-2476 (collect).
The Offer to Purchase and the related Letter of Transmittal are
expected to be distributed to holders of Notes beginning today.
Copies of the Offer to Purchase and the Letter of Transmittal
related to the tender offer may also be obtained at no charge from
D.F. King & Co., at (800) 697-6975 (toll-free) or (212) 269-5550
(collect).
Neither the Company, its board of directors, the information agent
and tender agent nor the dealer manager make any recommendation as
to whether holders of the Notes should tender or refrain from
tendering the Notes.
This announcement does not constitute an offer to purchase or a
solicitation of an offer to sell securities. The tender offer is
being made solely by means of the Offer to Purchase and the
related Letter of Transmittal. In any jurisdiction where the laws
require a tender offer to be made by a licensed broker or dealer,
the tender offer will be deemed to be made on behalf of the
Company by the dealer manager, or one or more registered brokers
or dealers under the laws of such jurisdiction.
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.
* * *
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.
COCOPAH NURSERIES: Plan Offers At Least 21.4% for Unsec. Creditors
------------------------------------------------------------------
Cocopah Nurseries of Arizona, Inc., et al., has filed a Disclosure
statement explaining the Debtors' First Amended Joint Chapter 11
Plan of Reorganization filed Feb. 7, 2013. The Plan supersedes
the previous plan filed by the Debtors on Dec. 18, 2012.
The Debtors' First Amended Joint Chapter 11 Plan reflects
implementation of the Transition Agreement, which generally
provides for the sale of substantial portions of the Debtors'
assets (referred to as "Transferred Property" under the Transition
Agreement) for the benefit of the Secured Lenders.
The Debtors' remaining assets (referred to as "Excluded Property"
under the Transition Agreement) will serve as the basis to
reorganize and reconstitute the Debtors and provide distributions
to creditors other than the Secured Lenders.
With respect to any Transferred Property that remains as of the
Effective Date: (1) such Transferred Property will be nominally
owned by the Debtor's Estates and will not be owned by TreeCo; and
(2) such property will be subject to disposition under the
Transition Agreement.
Under the Plan, and consistent with the Transition Agreement,
TreeCo will issue: (i) a promissory note (defined in the
Plan as the "GUC Note") for the benefit of holders of Allowed
General Unsecured Claims in Class 6; and (ii) the Lender Notes and
Deficiency Notes for the benefit of holders of Allowed Wells Fargo
General Unsecured Deficiency Claims in Class 3.B and holders of
Allowed Rabobank General Unsecured Deficiency Claims in Class 4.B.
Holders of Allowed Equity Interests in the Debtors will retain the
equity interests in TreeCo in consideration for the Affiliate New
Equity Funding.
Specifically, the Plan provides that:
* The Allowed Wells Fargo Secured Claims in Class 3.A
will be deemed satisfied by the transfer of the Transferred
Property pursuant to the Asset Sales and the Transition Agreement.
The Allowed Wells Fargo General Unsecured Deficiency Claims in
Class 3.B will be deemed satisfied in exchange for the Lender
Notes and Deficiency Notes to be issued by TreeCo pursuant to the
Transition Agreement.
* The Allowed Rabobank Secured Claims in Class 4.A
will be deemed satisfied by the transfer of the Transferred
Property pursuant to the Asset Sales and the Transition Agreement.
The Allowed Rabobank General Unsecured Deficiency Claims in
Class 4.B will be deemed satisfied in exchange for the Lender
Notes and Deficiency Notes to be issued by TreeCo pursuant to the
Transition Agreement.
* On the Effective Date, each holder of an Allowed General
Unsecured Claim in Class 6 will receive a Pro Rata beneficial
interest in the Unsecured Creditors' Trust, which will be vested
with the Trust Assets, including the GUC Note.
The Debtors estimate that the amount of Allowed General Unsecured
Claims will total approximately $4 to $7 million. Based on such
estimate, recovery percentages for Allowed General Unsecured
Claims are estimated between 37.5% and 21.4%.
* On the Effective Date, the holders of an Allowed Equity
Interests om Class 7 will provide or cause their Affiliates to
provide, the Affiliate New Equity Funding. In consideration
therefor, the holders of Allowed Equity Interests will receive or
retain, as applicable, the TreeCo Equity Interests, subject to the
terms of the Restated Governance Documents.
A copy of the Disclosure Statement is available at:
http://bankrupt.com/misc/cocopah.doc464.pdf
About Cocopah Nurseries
Cocopah Nurseries of Arizona, Inc., and three affiliates sought
Chapter 11 protection (Bankr. D. Ariz. Lead Case No. 12-15292) on
July 9, 2012. The affiliates are Wm. D. Young & Sons, Inc.;
Cocopah Nurseries, Inc.; and William Dale Young & Sons Trucking
and Nursery.
Cocopah Nurseries is a Young-family owned agricultural enterprise
with operations in Arizona and California. The core business
involves the cultivation of palm trees and other trees used for
landscaping purposes, as well as the associated farming of citrus,
dates, and other crops. The Debtors presently own more than
250,000 palm trees in various stages of the tree-growth cycle.
Cocopah has 250 full-time salaried employees, and taps an
additional 50 to 250 contract laborers depending on the season.
Revenue in 2010 was $23 million, down from $57 million in 2006.
Judge Eileen W. Hollowell presides over the case. The Debtors'
counsel are Craig D. Hansen, Esq., and Bradley A. Cosman, Esq., at
Squire Sanders (US) LLP.
The petitions were signed by Darl E. Young, authorized
representative.
Attorneys for Rabobank, N.A., are Robbin L. Itkin, Esq., and Emily
C. Ma, Esq., at Steptoe & Johnson LLP, and S. Cary Forrester,
Esq., at Forrester & Worth, PLLC.
Non-debtor affiliate Jewel Date Company, Inc., is represented by
Michael W. Carmel, Ltd., as counsel.
The Debtors' First Amended Joint Chapter 11 Plan of Reorganization
filed Feb. 7, 2013, reflects implementation of the Transition
Agreement, approved Jan. 29, 2013. The Transition Agreement
generally provides for the sale of substantial portions of the
Debtors' assets for the benefit of the Secured Lenders.
COCOPAH INDUSTRIES: Can Employ Dr. Elaine Joyal as Expert Witness
-----------------------------------------------------------------
The Bankruptcy Court has authorized Cocopah Nurseries of Arizona,
Inc., et al., to employ Elaine Joyal, Ph.D., as their expert
witness in connection with the Tax Dispute, effective as of
Dec. 4, 2012.
All fees and costs incurred by Dr. Joyal on behalf of the Debtors,
from and after Dec. 4, 2012, will be subject to Bankruptcy Court
approval pursuant to 11 U.S.C. Sections 330 and 331.
About Cocopah Nurseries
Cocopah Nurseries of Arizona, Inc., and three affiliates sought
Chapter 11 protection (Bankr. D. Ariz. Lead Case No. 12-15292) on
July 9, 2012. The affiliates are Wm. D. Young & Sons, Inc.;
Cocopah Nurseries, Inc.; and William Dale Young & Sons Trucking
and Nursery.
Cocopah Nurseries is a Young-family owned agricultural enterprise
with operations in Arizona and California. The core business
involves the cultivation of palm trees and other trees used for
landscaping purposes, as well as the associated farming of citrus,
dates, and other crops. The Debtors presently own more than
250,000 palm trees in various stages of the tree-growth cycle.
Cocopah has 250 full-time salaried employees, and taps an
additional 50 to 250 contract laborers depending on the season.
Revenue in 2010 was $23 million, down from $57 million in 2006.
Judge Eileen W. Hollowell presides over the case. The Debtors'
counsel are Craig D. Hansen, Esq., and Bradley A. Cosman, Esq., at
Squire Sanders (US) LLP.
The petitions were signed by Darl E. Young, authorized
representative.
Attorneys for Rabobank, N.A., are Robbin L. Itkin, Esq., and Emily
C. Ma, Esq., at Steptoe & Johnson LLP, and S. Cary Forrester,
Esq., at Forrester & Worth, PLLC.
Non-debtor affiliate Jewel Date Company, Inc., is represented by
Michael W. Carmel, Ltd., as counsel.
The Debtors' First Amended Joint Chapter 11 Plan of Reorganization
filed Feb. 7, 2013, reflects implementation of the Transition
Agreement, approved Jan. 29, 2013. The Transition Agreement
generally provides for the sale of substantial portions of the
Debtors' assets for the benefit of the Secured Lenders.
COLUMBUS EXPLORATION: Involuntary Chapter 11 Case Summary
---------------------------------------------------------
Alleged Debtor: Columbus Exploration LLC
c/o The Corporation Trust Company
Corporation Trust Center
1209 Orange Street
Wilmington, DE 19801
Case Number: 13-10347
Involuntary Chapter 11 Petition Date: February 26, 2013
Court: District of Delaware (Delaware)
Judge: Peter J. Walsh
Petitioner's Counsel: James E. Huggett, Esq.
MARGOLIS EDELSTEIN
750 Shipyard Drive, Suite 102
Wilmington, DE 19801
Tel: (302) 888-1112
Fax: (302) 888-1119
E-mail: jhuggett@margolisedelstein.com
Alleged creditors who signed the involuntary petition:
Petitioner Nature of Claim Claim Amount
---------- --------------- ------------
Debbie Burley Unpaid Wages $14,588
2125 Ackley Place
Columbus, OH 43219
Robol Law Office, LLC Legal Services $2,092,882
433 West Sixth Avenue
Columbus, OH 43201
Lorz Communications, Professional $14,900
Inc. Services
1331 South High Street
Columbus, OH 43207
Richard T. Robol Unpaid Rent $54,499
60 Kenyon Brook Drive
Columbus, OH 43085
Stephen Alexander CPA, Accounting Services $69,845
Inc.
113 East Court Street
PO Box 538
Urbana, OH 43078
COMBAT SPORTS: Chapter 15 Case Summary
--------------------------------------
Chapter 15 Debtor: Combat Sports Inc.
BDO Canada Limited
c/o Dickinson Wright PLLC
Dawn R Copley
500 Woodward Ave., Suite 4000
Detroit, MI 48226
Chapter 15 Case No.: 13-11632
Chapter 15 Petition Date: February 26, 2013
Court: Western District of Washington (Seattle)
Judge: Marc Barreca
Chapter 15 Debtor's Counsel: Merrilee A. MacLean, Esq.
HANSON BAKER LUDLOW DRUMHELLER, P.S.
2229 - 112th Avenue NE
Bellevue, WA 98004
Tel: (425) 454-3374
Fax: (425) 454-0087
E-mail: mmaclean@hansonbaker.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
Affiliate that simultaneously filed Chapter 15 petition:
Debtor Case No.
------ --------
Combat Sports Inc 13-11634
CONDOR TRANSCONTINENTAL: Case Summary & 20 Top Unsec. Creditors
---------------------------------------------------------------
Debtor: Condor Transcontinental Industries Inc.
dba I Luv Video
dba I Love Video
2915 Guadalupe St. - Suite B
Austin, TX 78705
Bankruptcy Case No.: 13-10334
Chapter 11 Petition Date: February 25, 2013
Court: United States Bankruptcy Court
Western District of Texas (Austin)
Judge: Craig A. Gargotta
Debtor's Counsel: Frank B. Lyon, Esq.
3508 Far West Blvd., Suite 170
Austin, TX 78731
Tel: (512) 345-8964
Fax: (512) 697-0047
E-mail: franklyon@me.com
Estimated Assets: $50,001 to $100,000
Estimated Debts: $1,000,001 to $10,000,000
A copy of the Company's list of its 20 largest unsecured
creditors, filed together with the petition, is available for free
at http://bankrupt.com/misc/txwb13-10334.pdf
The petition was signed by Conrad Bejarano, president.
Affiliates that filed separate Chapter 11 petitions:
Petition
Debtor Case No. Date
------ -------- ----
2915 Guadalupe LP, 12-12706 12/3/2012
500 W 29th St Ptnrshp 12-12707 12/3/2012
CONEXANT SYSTEMS: Files for Chapter 11 with Pre-Arranged Plan
-------------------------------------------------------------
Conexant Systems, Inc. filed a Chapter 11 petition (Bankr. D. Del.
Case No. 13-10367) on Feb. 28, 2013, with an agreement for a
balance sheet restructuring with equity sponsors and sole secured
lender, QP SFM Capital Holdings Limited, an entity managed by
Soros Fund Management LLC.
A day after the bankruptcy filing, the Debtor won interim court
approval to draw against a $15 million bankruptcy loan from
billionaire George Soros's hedge fund, Peg Brickley at Dow Jones'
DBR Small Cap reports.
As part of the restructuring, the secured lender will exchange
approximately $195 million of secured debt into equity in the
reorganized Company. In addition, the Secured Lender will receive
$76 million of unsecured notes issued by a holding company, which
can elect to either pay interest in cash or accrue interest in
kind. The new unsecured notes will be non-recourse to the
reorganized Conexant operating company. Upon implementation, this
restructuring will (i) eliminate debt at the operating company,
(ii) reduce annual cash payment of interest by approximately $19.7
million and (iii) cut excess real estate expenses by approximately
$7 million annually. To effectuate the restructuring, the Secured
Lender will provide $15 million through a debtor-in-possession
financing facility that will convert into equity in the
reorganized Company. The Company expects that the restructuring
will create a stronger capital structure, significantly reduce its
break-even revenue level and enable it to generate significant
positive cash flow. The restructured Conexant will be well-
positioned for long-term growth and improved profitability.
To implement the restructuring agreement, Conexant voluntarily
commenced cases under Chapter 11 of the United States Bankruptcy
Code in the United States Bankruptcy Court for the District of
Delaware. The Company expects to receive Court approval for its
"Pre-Arranged" plan of reorganization in less than 85 days. The
Company expects that operations will continue in the ordinary
course throughout the financial restructuring process, and none of
Conexant's foreign operating subsidiaries are expected to be
directly impacted by the filing.
"Following a comprehensive strategic and financial review of the
business, we are pleased to have reached an agreement that will
allow Conexant to expeditiously complete our financial
restructuring initiatives and ensure that we are able to continue
serving our customers for many years to come," said Sailesh
Chittipeddi, President and Chief Executive Officer of Conexant.
"Our Pre-Arranged financial restructuring provides for a clear
path to renewed growth and success, and upon emergence, Conexant
will be a leaner company with a stronger balance sheet that allows
for a more focused and consistent investment in product lines. We
thank our employees for their focus and commitment and appreciate
the support of our lenders, equity partners, customers, suppliers
and stakeholders."
In conjunction with the Feb. 28 filing, the Company filed a number
of customary motions and expects to receive immediate authority to
continue to support its employees, customers and suppliers during
the financial restructuring process. As part of these motions,
the Company has asked the Court for permission to continue paying
employee wages and salaries and to provide employee benefits
without interruption. The Company has also asked to continue
honoring certain customer policies and programs to ensure that the
restructuring process will have minimal effect on its customers.
Additionally, during the Chapter 11 process, suppliers will be
paid in full for all goods and services provided after the filing
date as required by applicable law.
The implementation of the Pre-Arranged Plan is dependent upon a
number of factors, including the approval of a disclosure
statement and confirmation and consummation of the Pre-Arranged
Plan in accordance with applicable law.
About Conexant
Newport Beach, California-based Conexant Systems, Inc. (NASDAQ:
CNXT) -- http://www.conexant.com/-- is a fabless semiconductor
company. Conexant's comprehensive portfolio of innovative
semiconductor solutions includes products for imaging, audio,
embedded-modem, and video applications. Outside the United
States, the Company has subsidiaries in Northern Ireland, China,
Barbados, Korea, Mauritius, Hong Kong, France, Germany, the United
Kingdom, Iceland, India, Israel, Japan, Netherlands, Singapore,
and Israel.
Kirkland & Ellis LLP and Klehr Harrison Harvey Branzburg LLP are
serving as legal counsel and Alvarez & Marsal is acting as
restructuring advisor to Conexant. Akin Gump Strauss Hauer & Feld
LLP and Pepper Hamilton LLP are serving as legal counsel and
Blackstone Advisory Partners L.P. as restructuring advisor to the
secured lender.
CONEXANT SYSTEMS: Meeting to Form Creditors Committee March 8
-------------------------------------------------------------
Roberta A. DeAngelis, United States Trustee for Region 3, will
hold an organizational meeting on March 8, 2013, at 10:30 a.m. in
the bankruptcy cases of Conexant Systems, Inc., et al. The
meeting will be held at:
J. Caleb Boggs Federal Building
844 King Street, Room 5209
Wilmington, DE 19801
The sole purpose of the meeting will be to form a committee or
committees of unsecured creditors in the Debtors' cases.
The organizational meeting is not the meeting of creditors
pursuant to Section 341 of the Bankruptcy Code. A representative
of the Debtor, however, may attend the Organizational Meeting, and
provide background information regarding the bankruptcy cases.
To increase participation in the Chapter 11 proceeding, Section
1102 of the Bankruptcy Code requires that the United States
Trustee appoint a committee of unsecured creditors as soon as
practicable. The Committee ordinarily consists of the persons,
willing to serve, that hold the seven largest unsecured claims
against the debtor of the kinds represented on the committee.
Section 1103 of the Bankruptcy Code provides that the Committee
may consult with the debtor, investigate the debtor and its
business operations and participate in the formulation of a plan
of reorganization. The Committee may also perform other services
as are in the interests of the unsecured creditors whom it
represents.
About Conexant
Newport Beach, California-based Conexant Systems, Inc. (NASDAQ:
CNXT) -- http://www.conexant.com/-- is a fabless semiconductor
company. Conexant's comprehensive portfolio of innovative
semiconductor solutions includes products for imaging, audio,
embedded-modem, and video applications. Outside the United
States, the Company has subsidiaries in Northern Ireland, China,
Barbados, Korea, Mauritius, Hong Kong, France, Germany, the United
Kingdom, Iceland, India, Israel, Japan, Netherlands, Singapore,
and Israel.
Conexant Systems, Inc. filed a Chapter 11 petition (Bankr. D. Del.
Case No. 13-10367) on Feb. 28, 2013, with an agreement for a
balance sheet restructuring with equity sponsors and sole secured
lender, QP SFM Capital Holdings Limited, an entity managed by
Soros Fund Management LLC.
Kirkland & Ellis LLP and Klehr Harrison Harvey Branzburg LLP are
serving as legal counsel and Alvarez & Marsal is acting as
restructuring advisor to Conexant. Akin Gump Strauss Hauer & Feld
LLP and Pepper Hamilton LLP are serving as legal counsel and
Blackstone Advisory Partners L.P. as restructuring advisor to the
secured lender.
CONEXANT SYSTEMS: Case Summary & 30 Largest Unsecured Creditors
---------------------------------------------------------------
Entities that separately filed Chapter 11 petitions:
Debtor-Entity Case No.
------------- --------
Conexant Systems, Inc. 13-10367
4000 MacArthur Blvd.
Newport Beach, CA 92660
Conexant CF, LLC 13-10368
Brooktree Broadband Holdings, Inc. 13-10369
Conexant, Inc. 13-10370
Conexant System Worldwide, Inc. 13-10371
Chapter 11 Petition Date: February 28, 2013
Court: U.S. Bankruptcy Court
District of Delaware
Judge: Hon. Mary F. Walrath
Debtors' Counsel: Joshua Sussberg, Esq.
Stephen C. Hackney, Esq.
Christopher T. Greco, Esq.
KIRLAND & ELLIS LLP
601 Lexington Avenue
New York, NY 10022-4611
Tel: 212-446-4829
E-mail: joshua.sussberg@kirkland.com
stephen.hackney@kirkland.com
christopher.greco@kirkland.com
- and -
Domenic E. Pacitti, Esq.
Michael W. Yurkewicz, Esq.
KLEHR HARRISON HARVEY BRANZBURG LLP
919 Market Street, Suite 1000
Wilmington, DE 19801
Tel: 302-552-5511
Fax: 302-426-9193
E-mail: dpacitti@klehr.com
myurkewicz@klehr.com
Debtors'
Restructuring
Advisors: ALVAREZ & MARSAL NORTH AMERICA LLC
Debtors' Claims
& Noticing Agent: BMC GROUP, INC.
Estimated Assets: $100,000,001 to $500,000,000
Estimated Debts: $100,000,001 to $500,000,000
Conexant last filed consolidated financial reports with the U.S.
Securities and Exchange Commission in August 2012 for the
quarterly period ended June 29, 2012. Conexant disclosed $304.6
million in total assets and $278.1 million in total liabilities as
of June 29.
The petition was signed by Sailesh Chittipeddi, president and
chief executive officer.
Consolidated List of Debtors' 30 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Eastman Kodak $2,830,090
Swee Teo
151 Loron Chuan #05-01, Lobby A,
New Tech Park
Singapore 556741
CA 92127
Tel: 65-6371-3474
Silterra Malaysia Sdn Bhd $1,981,253
Sheryl Kung Chui Chen
Lot 8, Phase 2
Kulim Hi-Tech Park
Kulim, Kedah 9000
Tel: 60-12-476-0013
ELPF Scranton Road LP $1,225,269
Linda Wise
PO Box 31001-1524
Pasadena, CA 91110-1524
Tel: 856-556-5694
Verifone $939,535
Stacie Chua
11 Kepell Road,
#06-00 RCL Centre
Singapore, SG 89057
Tel: 65-6390-6200
Samsung Electronics Co. Ltd. $822,820
Sung Hun Moon
(Maetan Dong) 129
Samsung-ro Yeongtong-gu
Suwon-si Gyeonggi-do 443-742
Korea
Tel: 82-32-277-1465
Powertech Technology Inc. $629,589
Patrick Yao
Hsinchu Industrial Park
Hukou, Hsinchu
TW 30352
Advanced Semiconductor Engineering $613,110
Mike MacKenzie
PO Box 742715
Los Angeles, CA 90074-2715
Tel: 949-725-2313
UMC Group (USA) $432,381
May Cruz
488 Deguigne Drive
Sunnyvale, CA 94085
Tel: 408-523-7800
4000 MacArthur LP $418,320
William O. Bond
PO Box 601177
Pasadena, CA 91189-1177
Tel: 212-293-8866
Sigurd Microelectronics Corp $415,405
Brian Chen
No. 436, SEC 1
Chu-Tung, Hsin-Chu, TW 310
Tel: 886-3-5824501 x2665
Pres-4340 Von Karman LP $393,482
David Bonaparte
PO Box 511438
Los Angeles, CA 90051-8438
Tel: 949 442 5965
Statschippac (BVI) Ltd. $382,684
Velia Alonzo
Dept 33030 PO Box 39000
San Francisco, CA 94139-3030
Tel: 480-222-1703
Freebox $365,434
Hughes Flock
8 Rue de la Ville L'Eveque
Paris 75008
Tel: 33 1 73 50 20 00
TSMC North America $292,590
Monica Lin
File 30141 PO Box 60000
San Francisco, CA 94160
Tel: 408-382-7928
Dell Computer Corp $231,721
Logitech Europe SA $141,135
Amkor Technology Inc $116,454
Stats Chippac Ltd $102,481
Test Advantage Capital $95,110
Zoom Telephonics Inc. $85,351
Grace Semiconductor $76,500
Synopsys Inc $75,954
ARM Ltd $68,920
San Diego Gas & Electric Company $64,791
Crown Building Maintenance Co. $43,839
CenterPointe Contractors $42,580
Global Testing Corporation $40,666
ABM Engineering Services $34,518
Plantronics $33,600
CONTESSA PREMIUM: Closes Chapter 11 Cases After Creditor Payments
-----------------------------------------------------------------
Contessa Premium Foods, Inc. on Feb. 28 announced the recent
conclusion of its highly successful Chapter 11 bankruptcy
proceedings. On Dec. 21, 2012, the United States Bankruptcy Court
for the Central District of California entered a final decree that
marked the conclusion of Contessa's two-year bankruptcy process
that resulted in the sale of its operating businesses and the
payment of Contessa's creditors in full.
The 2008 global economic downturn stressed Contessa's sales and
eventually led its President and CEO, John Z. Blazevich, to put
Contessa into bankruptcy on Jan. 26, 2011. With his primary focus
on protecting Contessa's creditors, Mr. Blazevich oversaw an
extensive marketing effort that culminated in a spirited auction
of Contessa's businesses. The results were positive. On July 15,
2011, Contessa closed on the sale of its business to the high
bidder, a portfolio company of Sun Capital Partners, in a
transaction valued at over $50 million. The buyer continues to
operate the businesses as Contessa Premium Foods, Inc. Contessa
was renamed Contessa Liquidating Co., Inc., and Mr. Blazevich
shifted focus to ensure that Contessa's creditors were paid in
full.
Mr. Blazevich's efforts paid off, and Contessa's liquidation
process was a resounding success and a paradigm against which
other bankruptcy cases should be measured. Contessa's creative
Chapter 11 plan permitted qualified creditors to stipulate their
claim amounts in exchange for early distributions in December
2011. This process, combined with Mr. Blazevich's exhaustive
efforts to reconcile claims, led to the remaining general
unsecured creditors receiving 100 percent distributions in the
first calendar quarter of 2012.
"I created a company from nothing and within 27 years I generated
nearly $4 billion in aggregate sales. I also built the world's
first 'green' LEED certified frozen food manufacturing plant,
reducing daily energy use and CO2 emissions by 65 percent
(relative to 1990 Kyoto Protocol baseline standards),"
Mr. Blazevich stated. "As President/CEO and founder, it was my
risk, my reward and ultimately my decision to place Contessa into
bankruptcy protection. I am very proud to say that my creditors
have been paid in full."
Mr. Blazevich is the President and CEO of ViVA! Food Group, a
direct manufacturer and supplier of farm-raised shrimp from
Southeast Asia. Combining exceptional product, low overhead and
an experienced staff, ViVA! produces private label products to
customer specifications at a competitive price.
"My shrimp operations in Southeast Asia were separate entities.
They are still thriving today and continue to produce quality
farm-raised shrimp products for customers who want to eliminate
the middle man and buy directly from the source. After 30 years,
I am still in the game, and I look forward to continuing my
extensive relationships in the industry through my new company,
ViVA! Food Group," Mr. Blazevich added.
Contessa's successful bankruptcy has not gone unrecognized. In
the second half of 2012, the professionals in the case, including
Kelley Drye & Warren as Contessa's bankruptcy counsel, were
honored with three important awards for their work on Contessa:
The Turnaround Management Association Transaction of the Year
Award, The Association for Corporate Growth New York Champion's
Award and The Turnaround Atlas Award for Food & Beverage
Turnaround of the Year.
Much of this recognition is attributable to the efforts of
Mr. Blazevich, whose disciplined management, attention to detail
and exemplary stewardship of the claims reconciliation process
made his goal to pay creditors in full a remarkable reality.
About Contessa Premium
San Pedro, California-based Contessa Premium Foods, Inc., fka ZB
Industries, Inc., and Contessa Food Products, Inc., provided farm-
raised shrimp, convenience meals, stir-fry vegetables, and other
frozen food products that were marketed and sold primarily in the
United States and to a lesser extent in Canada, Europe, Asia, and
Mexico.
Contessa Premium filed for Chapter 11 bankruptcy protection
(Bankr. C.D. Calif. Case No. 11-13454) on Jan. 26, 2011. Craig A.
Wolfe, Esq., and Jason R. Alderson, Esq., at Kelley Drye & Warren
LLP, in New York, represented the Debtor as counsel. Jeffrey N.
Pomerantz, Esq., and Jeffrey W. Dulberg, Esq., at Pachulski Stang
Ziehl & Jones LLP, in Los Angeles, served as conflicts counsel for
the Debtor. Scouler & Company, LLC, served as financial advisors.
Imperial Capital, LLC, acted as investment banker. Holthouse
Carlin & Van Trigt LLP served as auditors and accountants. The
Debtor scheduled $49,370,438 in total assets and $35,305,907 in
total liabilities.
The Official Committee of Unsecured Creditors in the Debtor's
Chapter 11 case was represented by Arent Fox LLP. FTI Consulting
Inc. served as its financial consultants.
Contessa Premium obtained authority from the Bankruptcy Court to
change its name to "Contessa Liquidating Co., Inc." following the
sale of substantially all of its assets to Premium Foods
Acquisition, Inc., for roughly $51,000,000 on Jul. 15, 2011.
As reported by the Troubled Company Reporter on March 9, 2012, the
Court confirmed Contessa's Second Amended Chapter 11 Plan of
Liquidation.
DATAPIPE INC: Moody's Gives B3 Corp Family Rating; Outlook Stable
-----------------------------------------------------------------
Moody's Investors Service assigned a first-time B3 Corporate
Family Rating and B3-PD Probability of Default Rating to Datapipe,
Inc. Moody's has also assigned B2 (LGD3, 34%) ratings to the
company's proposed $40 million senior secured revolver due 2018
and $202 million senior secured 1st lien term loan due 2019 and a
Caa2 (LGD5-85%) rating to the proposed $85 million senior secured
2nd lien term loan due 2019.
The proceeds from the new term loans will be used primarily to
finance a recapitalization that results in existing equity
investor ABRY Partners in having a majority ownership interest of
the company acquisition. The ratings are contingent on Moody's
review of final documentation and no material change in the terms
and conditions of the debt as advised to Moody's. The outlook is
stable.
Issuer: Datapipe, Inc.
Assignments:
Corporate Family Rating, Assigned B3
Probability of Default Rating, Assigned B3-PD
US$202M Senior Secured 1st Lien Term Loan, Assigned B2 (LGD3, 34%)
US$40M Senior Secured Revolving Credit Facility, Assigned B2
(LGD3, 34%)
US$85M Senior Secured 2nd Lien Term Loan, Assigned Caa2 (LGD5,
85%)
Outlook, Stable
Ratings Rationale:
Datapipe's B3 rating reflects its small scale, high leverage and
the competitive pressure within the datacenter space. These
limiting factors are offset by Datapipe's stable base of
contracted recurring revenues and Datapipe's established position
within the high-growth, niche market segment of complex, auditable
managed services offerings.
Datapipe has established a strong position in the managed hosting
market by providing complex IT solutions that cater to companies
who must comply with industry, regulatory or other mandated IT
requirements. Given Datapipe's narrow target market, its small
scale is less of a disadvantage than it would be in other, more
mature segments of the communications industry. In some respects,
Datapipe's scale is a competitive advantage that allows for more
agility with custom applications and more rapid service delivery
than its larger peers can accommodate. However, scale remains a
key credit risk, as companies with small scale are more
susceptible to market pressure, exogenous shocks and operational
or strategic missteps than larger firms.
Datapipe's strong operating record and decade of experience are
important factors in its ability to attract and retain customers.
However, Moody's believes that Datapipe must continually reinvest
in personnel and assets to maintain its market advantage as
competition increases in this segment. Over time, larger peers may
focus on this growth segment and increase investment into
developing or acquiring these capabilities.
The ratings for the debt instruments reflect both the overall
probability of default of Datapipe, to which Moody's assigns a
probability of default rating of B3-PD, the average family loss
given default assessment and the composition of the debt
instruments in the capital structure. Moody's assumes a 50% family
recovery rate given the capital structure of 1st lien and 2nd lien
bank debt. The proposed $202 million senior secured 1st lien term
loan and $40 million senior secured revolver are rated B2 (LGD3,
34%), one notch above the CFR given the support from 2nd lien
debt. The $85 million senior secured 2nd lien term loan is rated
Caa2 (LGD5, 85%) to reflect its junior ranking within the capital
structure.
Moody's expects Datapipe to have good liquidity over the next
twelve months and estimates the company will have $2 million of
cash on hand and an undrawn $40 million revolver at the close of
the transaction. Moody's expects the company to generate slightly
positive free cash flow over the next 12-18 months given the
company's forecast of lower capital expenditures.
The stable outlook reflects Moody's view that Datapipe will
continue to produce strong revenue and EBITDA growth that will
allow the company to delever towards or below 6x (Moody's
adjusted) by year end 2014. Moody's standard adjustment to
capitalize operating leases adds approximately 0.5x to leverage.
Downward rating pressure could develop if liquidity becomes
strained or Moody's adjusted leverage increases above 7x. Moody's
could consider a rating upgrade if free cash flow approaches 5% of
debt and leverage were to trend towards 4.5x (both on a Moody's
adjusted basis).
The principal methodology used in rating Datapipe was the Global
Communications Infrastructure Industry Methodology published in
June 2011. Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.
Headquartered in Jersey City, NJ, Datapipe, Inc. provides data
center, managed hosting and cloud services. The company currently
operates nine data centers in the US and internationally.
DELTA AIR: Moody's Retains B2 Corp. Family Rating, Outlook Stable
-----------------------------------------------------------------
Moody's Investors Service affirmed the B2 Corporate Family and B2-
PD Probability of Default ratings assigned to Delta Air Lines,
Inc. Moody's also affirmed its ratings assigned to certain other
debt instruments or Enhanced Equipment Trust Certificates of Delta
and the SGL-2 Speculative Grade Liquidity rating. The outlook is
stable.
Moody's downgraded the rating of the G-tranche of the Series 2000-
1 EETC originally issued by Northwest Airlines, Inc. to B1 from
Ba3. Delta has been the legal obligor of this and of the other
obligations of Northwest Airlines, Inc. since the completion of
the legal entity merger that these two companies completed on
December 31, 2010.
Downgrades:
Issuer: Northwest Airlines, Inc.
Senior Secured Enhanced Equipment Trust, Series 2000-1 G-
tranche, Downgraded to B1 from Ba3
LGD Assessments:
Issuer: Clayton County Development Authority, GA
Senior Unsecured Revenue Bonds, Changed to LGD5, 71 % from
LGD5, 73 %
Senior Unsecured Revenue Bonds, Changed to LGD5, 71 % from
LGD5, 73 %
Issuer: Delta Air Lines, Inc.
Senior Secured Bank Credit Facilities, Changed to LGD2, 16 %
from LGD2, 18 %
Ratings Rationale:
The lowering of the rating on the NWA 2000-1 EETC reflects the
erosion of all of the equity cushion in this financing based on
Moody's current opinion of the market values of the thirteen 2000
and 2001 vintage A319-100 aircraft that comprise the collateral of
this transaction. The aircraft represent 23% of the 56 total A319s
in Delta's fleet and are slightly older than the 11 year average
age for this aircraft type in its fleet. Moody's believes that the
values of mid-life A319s will remain under pressure as these
aircraft age in upcoming years. Up-gauging by operators and a
shrinking pool of potential operators because of order books at
operators that in years past would have been prospective acquirers
of used aircraft are likely to crimp demand and thus values for
these aircraft. The introduction of the A320Neo and B737MAX
derivatives of the existing narrowbody line-ups of Airbus and
Boeing can also sustain pressure on values of the incumbent
models; particularly in later years after these aircraft begin to
deliver in numbers. The ratings consider the credit quality of
Delta as obligor under the related equipment notes; the weak
collateral protection of the Notes; the credit support provided by
the liquidity facility and the applicability of Section 1110 of
Title 11 of the United States Code.
Any combination of future changes in the underlying credit quality
or ratings of Delta and or an unexpected material change in the
value of the A319-100 could cause Moody's' to change its ratings
of the Certificates.
The B2 corporate family rating reflects Delta's leading position
in the global passenger airline sector and key credit metrics that
approximate the medians of the B2 rating category. Moody's
believes that Delta will achieve supportive earnings and free cash
flow in excess of $1.0 billion in 2013, notwithstanding potential
pressure on demand because of increasing uncertainty in the global
economy and the still elevated cost of jet fuel. Steady demand in
premium cabins, ongoing industry capacity discipline and further
progress on the New York strategy should support modest growth in
yields during a period of mid-single digit growth un unit costs,
mainly from higher wages and fewer available seat miles. Good
liquidity, in excess of $5 billion including revolving credit
facilities that impose no conditions for drawings and a manageable
maturity profile, supports the B2 rating. The ratings also
consider the benefits the global route network should provide in
periods of improving demand, anticipated free cash flow as annual
capital expenditures for aircraft are modest and that pressure on
labor costs will remain manageable.
The principal methodology used in this rating was the Global
Passenger Airlines Industry Methodology published in May 2012 and
Enhanced Equipment Trust And Equipment Trust Certificates 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.
Delta Air Lines, Inc., headquartered in Atlanta, Georgia, is one
of the world's largest airlines, providing scheduled air
transportation for passengers and cargo throughout the U.S. and
around the world.
DETROIT, MI: Gov. Declares Fiscal Emergency; State Takeover Looms
-----------------------------------------------------------------
Reuters' Steve Neavling reports that Michigan Governor Rick Snyder
on March 1 officially declared Detroit in a fiscal emergency,
setting the stage for a state takeover of the city's financial
management and ultimately the possibility of the largest municipal
bankruptcy in U.S. history. According to the report, Gov. Snyder
said he agreed with a Feb. 19 report by a six-member team of
experts that concluded Michigan's largest city is in dire
financial shape and a plan put in place last April to aid Detroit
was not sufficiently working. The report notes the expert team
Gov. Snyder assembled in December did not officially recommend the
appointment of an emergency financial manager, leaving that
decision up to the governor.
According to Reuters, Detroit officials now have 10 days to
request a hearing with the governor about his determination.
After the hearing or the expiration of the 10 days in the case of
no hearing, the governor confirms or revokes his determination.
The report also says Gov. Snyder said he had identified a top
candidate to be the emergency manager but declined to identify the
person.
Mike Shortridge, writing for The Washington Times, relates a state
review team led by treasurer Andy Dillon reported that Detroit is
saddled with more than $14 billion in long-term debt and
expectations of an additional $100 million deficit this year.
DETROIT WEST: S&P Assigns 'BB-' Rating to $5.9MM Series 2013 Bonds
------------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB-' long-term
rating to Detroit West Preparatory Academy (DWPA), Mich.'s
$5.9 million series 2013 public school academy revenue bonds. The
outlook is stable. Standard & Poor's also withdrew its 'BB' long-
term rating on DWPA's series 2012 bonds, which were not issued as
planned in November 2012.
"The 'BB-' rating reflects our view of the risks related to the
school's impending move into a facility that is being renovated
and its aggressive growth plans to generate 1x coverage," said
Standard & Poor's credit analyst Avanti Paul.
The stable outlook reflects S&P's view that the school's recent
academic improvements will continue and result in a growing
enrollment trend that will translate to a stronger general fund
balance during the next few years.
DEWEY & LEBOEUF: Failure Won't Dampen Partner Paydays
-----------------------------------------------------
Maria Chutchian of BankruptcyLaw360 reported that Dewey & LeBoeuf
LLP struggled to pay its partners their sky-high salaries and
bonuses for many months -- possibly even years -- before it filed
for bankruptcy, but experts say Dewey's fate won't scare other big
law firms into scaling back their partner compensation.
The report related that the defunct firm, which got the final go-
ahead from a bankruptcy judge Wednesday to liquidate and repay its
creditors, found itself in hot water in the months leading up to
its May 2012 Chapter 11 filing when its revenues were down.
About Dewey & LeBoeuf
Dewey & LeBoeuf LLP sought Chapter 11 bankruptcy (Bankr. S.D.N.Y.
Case No. 12-12321) to complete the wind-down of its operations.
The firm had struggled with high debt and partner defections.
Dewey disclosed debt of $245 million and assets of $193 million in
its chapter 11 filing late evening on May 29, 2012.
Dewey & LeBoeuf LLP operated as a prestigious, New York City-
based, law firm that traced its roots to the 2007 merger of Dewey
Ballantine LLP -- originally founded in 1909 as Root, Clark & Bird
-- and LeBoeuf, Lamb, Green & MacCrae LLP -- originally founded in
1929. In recent years, more than 1,400 lawyers worked at the firm
in numerous domestic and foreign offices.
At its peak, Dewey employed about 2,000 people with 1,300 lawyers
in 25 offices across the globe. When it filed for bankruptcy,
only 150 employees were left to complete the wind-down of the
business.
Dewey's offices in Hong Kong and Beijing are being wound down.
The partners of the separate partnership in England are in process
of winding down the business in London and Paris, and
administration proceedings in England were commenced May 28. All
lawyers in the Madrid and Brussels offices have departed. Nearly
all of the lawyers and staff of the Frankfurt office have
departed, and the remaining personnel are preparing for the
closure. The firm's office in Sao Paulo, Brazil, is being
prepared for closure and the liquidation of the firm's local
affiliate. The partners of the firm in the Johannesburg office,
South Africa, are planning to wind down the practice.
The firm's ownership interest in its practice in Warsaw, Poland,
was sold to the firm of Greenberg Traurig PA on May 11 for
$6 million. The Pension Benefit Guaranty Corp. took $2 million of
the proceeds as part of a settlement.
Judge Martin Glenn oversees the case. Albert Togut, Esq., at
Togut, Segal & Segal LLP, represents the Debtor. Epiq Bankruptcy
Solutions LLC serves as claims and notice agent. The petition was
signed by Jonathan A. Mitchell, chief restructuring officer.
JPMorgan Chase Bank, N.A., as Revolver Agent on behalf of the
lenders under the Revolver Agreement, hired Kramer Levin Naftalis
& Frankel LLP. JPMorgan, as Collateral Agent for the Revolver
Lenders and the Noteholders, hired FTI Consulting and Gulf
Atlantic Capital, as financial advisors. The Noteholders hired
Bingham McCutchen LLP as counsel.
The U.S. Trustee formed two committees -- one to represent
unsecured creditors and the second to represent former Dewey
partners. The creditors committee hired Brown Rudnick LLP led by
Edward S. Weisfelner, Esq., as counsel. The Former Partners hired
Tracy L. Klestadt, Esq., and Sean C. Southard, Esq., at Klestadt &
Winters, LLP, as counsel.
Dewey filed a Chapter 11 Plan of Liquidation and an accompanying
Disclosure Statement on Nov. 21, 2012. It filed amended plan
documents on Dec. 31, in an attempt to address objections lodged
by various parties. A second iteration was filed Jan. 7, 2013.
The plan is based on a proposed settlement between secured lenders
and Dewey's official unsecured creditors' committee, as well as a
settlement with former partners.
DEWEY & LEBOEUF: Can Access Cash Collateral Until March 17
----------------------------------------------------------
In a ninth supplemental order dated Feb. 28, 2013, the U.S.
Bankruptcy Court for the Southern District of New York further
extended and modified the final order, dated June 13, 2012,
authorizing Dewey & LeBoeuf LLP to use cash collateral of the
collateral agent, revolving lenders and noteholders, through the
earlier to occur of (a) 11:59 p.m. on the fifth day following the
"termination declaration date", or (b) 11:59 p.m. on March 17,
2013.
The "challenge period" as defined in the final cash collateral
order is extended for an additional 30 days without prejudice.
A copy of the Final Cash Collateral Order is available at:
http://bankrupt.com/misc/dewey.doc91.pdf
About Dewey & LeBoeuf
Dewey & LeBoeuf LLP sought Chapter 11 bankruptcy (Bankr. S.D.N.Y.
Case No. 12-12321) to complete the wind-down of its operations.
The firm had struggled with high debt and partner defections.
Dewey disclosed debt of $245 million and assets of $193 million in
its chapter 11 filing late evening on May 29, 2012.
Dewey & LeBoeuf LLP operated as a prestigious, New York City-
based, law firm that traced its roots to the 2007 merger of Dewey
Ballantine LLP -- originally founded in 1909 as Root, Clark & Bird
-- and LeBoeuf, Lamb, Green & MacCrae LLP -- originally founded in
1929. In recent years, more than 1,400 lawyers worked at the firm
in numerous domestic and foreign offices.
At its peak, Dewey employed about 2,000 people with 1,300 lawyers
in 25 offices across the globe. When it filed for bankruptcy,
only 150 employees were left to complete the wind-down of the
business.
Dewey's offices in Hong Kong and Beijing are being wound down.
The partners of the separate partnership in England are in process
of winding down the business in London and Paris, and
administration proceedings in England were commenced May 28. All
lawyers in the Madrid and Brussels offices have departed. Nearly
all of the lawyers and staff of the Frankfurt office have
departed, and the remaining personnel are preparing for the
closure. The firm's office in Sao Paulo, Brazil, is being
prepared for closure and the liquidation of the firm's local
affiliate. The partners of the firm in the Johannesburg office,
South Africa, are planning to wind down the practice.
The firm's ownership interest in its practice in Warsaw, Poland,
was sold to the firm of Greenberg Traurig PA on May 11 for
$6 million. The Pension Benefit Guaranty Corp. took $2 million of
the proceeds as part of a settlement.
Judge Martin Glenn oversees the case. Albert Togut, Esq., at
Togut, Segal & Segal LLP, represents the Debtor. Epiq Bankruptcy
Solutions LLC serves as claims and notice agent. The petition was
signed by Jonathan A. Mitchell, chief restructuring officer.
JPMorgan Chase Bank, N.A., as Revolver Agent on behalf of the
lenders under the Revolver Agreement, hired Kramer Levin Naftalis
& Frankel LLP. JPMorgan, as Collateral Agent for the Revolver
Lenders and the Noteholders, hired FTI Consulting and Gulf
Atlantic Capital, as financial advisors. The Noteholders hired
Bingham McCutchen LLP as counsel.
The U.S. Trustee formed two committees -- one to represent
unsecured creditors and the second to represent former Dewey
partners. The creditors committee hired Brown Rudnick LLP led by
Edward S. Weisfelner, Esq., as counsel. The Former Partners hired
Tracy L. Klestadt, Esq., and Sean C. Southard, Esq., at Klestadt &
Winters, LLP, as counsel.
Dewey filed a Chapter 11 Plan of Liquidation and an accompanying
Disclosure Statement on Nov. 21, 2012. It filed amended plan
documents on Dec. 31, in an attempt to address objections lodged
by various parties. A second iteration was filed Jan. 7, 2013.
The plan is based on a proposed settlement between secured lenders
and Dewey's official unsecured creditors' committee, as well as a
settlement with former partners.
On Feb. 27, 2013, the Bankruptcy Court confirmed Dewey & Leboeuf's
Second Amended Chapter 11 Plan of Liquidation dated Jan. 7, 2013,
As of the Effective Date of the Plan, the Debtor will be
dissolved.
DK AGGREGATES: Court Dismisses Chapter 11 Case
----------------------------------------------
A bankruptcy judge on Jan. 28 signed off on an agreed order
dismissing the Chapter 11 case of DK Aggregates LLC.
The U.S. Trustee sought dismissal of the case, pointing out that
the Court approved the sale of the Debtor's assets on April 4,
2012, and approved payment of several claims on Aug. 28, 2012.
The U.S. Trustee said the Debtor has not filed monthly operating
reports for August 2012, September 2012 and October 2012.
The agreed order was inked by the Debtor and the U.S. Trustee.
The order dismissing the case provides that the Debtor is required
to pay within 30 days the fees payable to the office of the U.S.
Trustee as required under 28 U.S.C. Sec. 1930(a)(6) for each
calendar quarter up to and including the calendar quarter up to
and including the calendar quarter containing the date of
dismissal.
About DK Aggregates LLC
Pearlington, Mississippi-based DK Aggregates LLC was formed in
2003. The managing member is Murray J. Moran. The members and
their respective interests are: Murray J. Moran, 57.5%; Murray
Lucas Moran, 22.5%; Richard Anthony, 10%; and Donald Rafferty,
10%. The Company was formed for the purposed of acquiring the
1,700 acre tract of land that the Debtor presently owns in Hancock
County, Mississippi, for the purpose of engaging in sand and
gravel mining operations.
The Company filed for Chapter 11 bankruptcy protection (Bankr.
S.D. Miss. Case No. 10-51823) on Aug. 9, 2010. Robert Alan Byrd,
Esq., at Byrd & Wiser, in Biloxi, Mississippi, assists the Debtor
in its restructuring effort. H. Kenneth Lefoldt, Jr., of Lefoldt
& Company P.A. serves as accountant. In its amended schedules,
the Debtor disclosed $18.5 million in assets and $7.11 million in
liabilities as of the Petition Date.
DOWLING ENTERPRISES: Ruling in Lawsuit Against Owner Reversed
-------------------------------------------------------------
District Judge Norman K. Moon reversed an opinion of the
bankruptcy court and entered judgment in favor of Robert M.
Johnson, who appealed the decision of the U.S. Bankruptcy Court
for the Western District of Virginia in an adversary proceeding in
which Mr. Johnson sought to have a debt owed to him by John Thomas
Dowling declared non-dischargeable.
Mr. Johnson is a semi-retired homebuilder who spent 30 years in
that business. He met Mr. Dowling in 2004 and they became
friends. In early 2008, Mr. Dowling approached Mr. Johnson and
asked him to make a loan to Dowling Enterprises, LLC, in the
amount of $150,000. At the time, Mr. Dowling and his wife owned
66.239% of Dowling Enterprises, which was a real estate
development company that owned land in Chesterfield County on
which a carwash was located and operated by Chesterfield Car Wash
Company, LLC. Mr. Dowling was member of Chesterfield Car Wash,
which leased the land from Dowling Enterprises. In January 2008,
Temecula Valley Bank held a security interest in the land securing
a debt owed by Dowling Enterprises in the approximate amount of
$2,000,000.
When Mr. Dowling requested the loan from Johnson, he represented
that the loan proceeds would be used to make a down payment on a
certain parcel of real estate that Dowling Enterprises wished to
purchase for the construction of a second car wash. He also
represented that Dowling Enterprises would be able to repay the
loan within 60 days because a lender, Alpha Omega Financial Corp.,
had agreed to refinance the note held by TVB in a transaction that
would result in a cash payment to Dowling Enterprises.
Relying on Mr. Dowling's representations, Mr. Johnson made the
requested $150,000 loan on Feb. 1, 2008. The resulting debt was
evidenced by a "Deed of Trust Note" and was secured by a lien on
the original car wash land. Dowling signed the Deed of Trust Note
on behalf of Dowling Enterprises and also as guarantor. The terms
of the note provided that Dowling Enterprises was to repay the
loan in full, plus interest of $15,000, on April 2, 2008. If the
debt was unpaid as of that date, Dowling Enterprises was to make
the interest payment of $15,000, and interest would accrue at an
annual rate of 18% and be payable monthly, with principal and
interest payable on demand.
On the same day that Mr. Johnson made the loan, Dowling
Enterprises paid $21,500 to H&B Associates, Inc., to pay down a
pre-existing debt secured by a second-priority lien on the
original car wash land. Shortly thereafter, Mr. Dowling purchased
a $50,000 equity interest in Dowling Enterprises held by Bruce
Griggs. Mr. Dowling also used $15,000 to pay a pre-existing debt
Dowling Enterprises owed to American Express. Finally, the
balance of the loan proceeds?approximately $64,000 -- was
transferred to Chesterfield Car Wash for "operational purposes."
The Alpha Omega loan never closed, and Dowling Enterprises never
received any money from Alpha Omega. Nor did Dowling Enterprises
purchase the real estate parcel that Mr. Dowling had represented
the company intended to buy in order to operate a new car wash.
Mr. Dowling stated that the purchase did not occur because a
bidding war drove up the price of the parcel and because he
learned of problems with road access to the site.
Ultimately, Mr. Dowling was unable to timely pay the debt arising
under the Deed of Trust Note. As of April 2, 2008, Mr. Johnson
had received no payments towards the loan. On May 1, 2008,
Mr. Dowling made a $15,000 payment, and he made additional
payments in May, July, August, and December 2008, and a final
payment in January 2009. The total amount of these payments was
$28,950.
Although Dowling Enterprises defaulted on the Deed of Trust Note,
Johnson did not foreclose on the original car wash land because he
could not afford to pay the TVB debt. Mr. Dowling ceased
operating Dowling Enterprises in August 2010, and he transferred
his interest in the entity to his wife in February 2011. Dowling
Enterprises entered Chapter 11 bankruptcy, and the original car
wash land was sold for an amount that was insufficient to pay off
the TVB first deed of trust. Consequently, Mr. Johnson did not
receive any money from the sale of that land.
On Nov. 13, 2009, Mr. Johnson obtained a state court judgment in
the Virginia Beach Circuit Court against Mr. Dowling and Dowling
Enterprises in the amount of $175,987.50 plus costs and interest
at the rate of 18% per annum. Mr. Dowling filed a bankruptcy
petition initiating a Chapter 7 case on Jan. 6, 2012. Mr. Johnson
then filed an adversary complaint seeking to have the debt arising
under the Deed of Trust Note declared non-dischargeable, and the
U.S. Bankruptcy Court entered judgment in favor of Mr. Dowling.
Mr. Johnson appealed.
The case is, ROBERT M. JOHNSON, Appellant, v. JOHN THOMAS DOWLING,
Appellee, Case No. 6:12-CV-00065 (W.D. Va.). A copy of the
District Court's Feb. 25, 2013 Memorandum Opinion is available at
http://is.gd/YTUzwafrom Leagle.com.
Dowling Enterprises, LLC, in Richmond, Virginia, filed for Chapter
11 bankruptcy (Bankr. E.D. Va. Case No. 09-34501) on July 15,
2009. Robert S. Westermann, Esq. -- rwestermann@hf-law.com -- at
Hirschler Fleischer, P.C., serves as the Debtor's counsel. In its
petition, Dowling Enterprises estimated $1 million to $10 million
in both assets and debts. A full-text copy of the Debtor's
petition, including a list of its 5 largest unsecured creditors,
is available for free at http://bankrupt.com/misc/vaeb09-34501.pdf
The petition was signed by John T. Dowling, president of the
Company.
DREIER LLP: NY Appeals Court Clears 2 Attorneys of Malpractice
--------------------------------------------------------------
Pete Brush of BankruptcyLaw360 reported that a New York appeals
court on Thursday tossed malpractice claims against two lawyers
who struggled to pay a bankrupt business part of an insurance
settlement tied to the 9/11 terrorist attacks, after the money got
caught up in the infamous Dreier LLP meltdown.
The report said a five-judge panel sitting in the First Department
of the state's Appellate Division affirmed trial court Judge
Judith J. Gische's August 2011 dismissal of Cosmetics Plus Group
Ltd.'s malpractice claims against attorneys Paul Traub and Steven
Fox.
About Marc Dreier and Dreier LLP
Marc Dreier founded New York-based law firm Dreier LLP --
http://www.dreierllp.com/-- in 1996. On Dec. 8, 2008, the U.S.
Securities and Exchange Commission filed a suit, alleging that Mr.
Dreier made fraudulent offers and sales of securities in several
cities, selling fake promissory notes to hedge and other private
investment funds. The SEC asserted that Mr. Dreier also
distributed phony financial statements and audit opinions, and
recruited accomplices in connection with that scheme. Mr. Dreier,
currently in prison, was charged by the U.S. government for
conspiracy, securities fraud and wire fraud (S.D.N.Y. Case No.
09-cr-00085).
Dreier LLP sought Chapter 11 protection (Bankr. S.D.N.Y. Case No.
08-15051) on Dec. 16, 2008. Stephen J. Shimshak, Esq., at Paul,
Weiss, Rifkind, Wharton & Garrison LLP, was tapped as counsel.
The Debtor estimated assets of $100 million to $500 million, and
debts between $10 million and $50 million in its Chapter 11
petition.
Sheila M. Gowan, a partner with Diamond McCarthy, was appointed
Chapter 11 trustee for the Dreier law firm. Ms. Gowan is
represented by Jason Porter, Esq., at Diamond McCarthy LLP.
Wachovia Bank National Association, the Dreier LLP Chapter 11
trustee, and Steven J. Reisman as post-confirmation representative
of the bankruptcy estate of 360networks (USA) Inc. signed a
petition that put Mr. Dreier into bankruptcy under Chapter 7 on
Jan. 26, 2009 (Bankr. S.D.N.Y. Case No. 09-10371). Mr. Dreier,
60, pleaded guilty to fraud and other charges in May 2009. The
scheme to sell $700 million in fake notes unraveled in late 2008.
Mr. Dreier is serving a 20-year sentence in a federal prison in
Minneapolis.
DRYSHIPS INC: To Release Fourth Quarter Results on March 6
----------------------------------------------------------
DryShips Inc. on Feb. 28 disclosed that it will release its
results for the fourth quarter ended December 31, 2012 after the
market closes in New York on Wednesday, March 6, 2013.
DryShips management team will host a conference call the following
day on Thursday, March 7, 2013, at 9:00 a.m. EST to discuss the
Company's financial results.
Conference Call details: Participants should dial into the call 10
minutes before the scheduled time using the following numbers:
1(866) 819-7111 (from the US), 0(800) 953-0329 (from the UK) or
+(44) (0) 1452 542 301 (from outside the US). Please quote
"DryShips."
A replay of the conference call will be available until March 14,
2013. The United States replay number is 1(866) 247-4222; from
the UK 0(800) 953-1533; the standard international replay number
is (+44) (0) 1452 550 000 and the access code required for the
replay is: 2133051#.
Slides and audio webcast: There will also be a simultaneous live
webcast over the Internet, through the DryShips Inc. website
(www.dryships.com). Participants to the live webcast should
register on the website approximately 10 minutes prior to the
start of the webcast.
About DryShips Inc.
Based in Greece, DryShips Inc. -- http://www.dryships.com/--
-- owns and operates drybulk carriers and offshore oil
deep water drilling units that operate worldwide. As of
Sept. 10, 2010, DryShips owns a fleet of 40 drybulk carriers
(including newbuildings), comprising 7 Capesize, 31 Panamax and 2
Supramax, with a combined deadweight tonnage of over 3.6 million
tons and 6 offshore oil deep water drilling units, comprising of
2 ultra deep water semisubmersible drilling rigs and 4 ultra deep
water newbuilding drillships.
DryShips's common stock is listed on the NASDAQ Global Select
Market where it trades under the symbol "DRYS".
On Nov. 25, 2010, DryShips Inc. entered into a waiver letter
for its US$230.0 million credit facility dated Sept. 10, 2007,
as amended, extending the waiver of certain covenants through
Dec. 31, 2010.
The Company reported a net loss of US$47.28 million in 2011,
compared with net income of US$190.45 million during the prior
year.
The Company's balance sheet at Dec. 31, 2011, showed
US$8.62 billion in total assets, US$4.68 billion in total
liabilities, and US$3.93 billion in total equity., Inc.
DSE CANTINA: Court Examines Security Interest in Firm's Retainer
----------------------------------------------------------------
Bankruptcy Judge William J. Lafferty, III, slowed down the process
of hiring counsel for debtors DSE Cantina, LLC, and Maria Maria
Danville, LLC. Having reviewed all of the papers filed in
connection with the Debtors' Application to Employ Counsel, and
having seen no additional filing from the Office of the United
States Trustee, the Court raised an issue with respect to the
question of whether proposed counsel to the Debtor has a security
interest in the retainer. The Court noted that while the law
firm, Levene, Neale, Bender, Yoo and Brill LLP, asserts that
taking a retainer creates a security interest in the retainer, the
Court cannot locate language within the client retention agreement
that expressly grants a security interest. If a security interest
is granted, it may be that it can be perfected by holding the
funds pursuant to Cal. Comm. Code Sec. 9-305. However, it is not
clear that a security interest has, in fact, been granted.
According to Judge Lafferty, the Debtors' counsel, and anyone
wishing to comment upon the issue, should be prepared to discuss
whether a security interest was granted in favor of the law firm
at the Hearing Regarding Application to Employ set for Feb. 27,
2013 at 10:30 a.m.
A copy of the Court's Feb. 26, 2013 Memorandum is available at
http://is.gd/tR8VJgfrom Leagle.com.
DSE Cantina, LLC, and Maria Maria Danville, LLC, filed Chapter 11
petitions (Bankr. N.D. Cal. Case No. 12-49966) last year.
EAST END: Court OKs Klestadt as Attorneys, Edifice as Consultant
----------------------------------------------------------------
East End Development, LLC sought and obtained permission from the
U.S. Bankruptcy Court for the Eastern District of New York to
employ Klestadt & Winters LLP as Chapter 11 Attorney. The Debtor
also obtained approval to employ Edifice Real Estate Partners, LLC
as its construction consultant.
East End Development, LLC, the owner of a 90% completed
condominium in Sag Harbor, New York, filed a Chapter 11 petition
(Bankr. E.D.N.Y. Case No. 12-76181) in Central Islip, New York, on
Oct. 12, 2012. The Debtor disclosed $27,300,207 in assets and
$35,344,416 in liabilities in its schedules.
EASTMAN KODAK: Finalizes Terms of Exit Financing Deal
-----------------------------------------------------
Eastman Kodak said Friday it has reached an agreement with the
Steering Committee of the Second Lien Noteholders to amend the
terms for a previously-announced interim and exit financing
package. The amendments provide Kodak with additional flexibility
to successfully execute its reorganization objectives and emerge
from Chapter 11 in mid-2013.
"We are establishing a clear path for our emergence as a stronger,
focused Commercial Imaging company," said Antonio M. Perez,
Chairman and Chief Executive Officer. "As we move toward
finalizing our Plan of Reorganization, we are pleased to have
reached an agreement with our lenders that gives Kodak additional
financial flexibility in how we reach our ultimate goal of a
successful emergence with a sustainable business model."
As part of the agreement, certain terms of the financing have been
amended. Kodak now is committed to achieving at least $600
million in cash proceeds through the disposition of any
combination of specified non-Commercial Imaging assets, which
include its Document Imaging and Personalized Imaging businesses,
and trademarks and related rights.
Additionally, in anticipation of a Plan of Reorganization to be
filed by the company in April 2013, Kodak, along with the Steering
Committee of the Second Lien Noteholders and the Unsecured
Creditors Committee, will jointly hire a search firm to begin
identifying potential new directors for the Board of Directors who
will lead the reorganized Kodak following emergence. The existing
Board also expects to appoint an additional independent director
following closing of the financing. This director would be
available to continue to serve on the Board following Kodak's
emergence.
Kodak anticipates closing the financing in mid to late March,
subject to the prior approval of the Bankruptcy Court.
The Wall Street Journal's Ben Fox Rubin notes that in a
presentation to creditors made in a public filing this January,
Kodak provided an outline of its now-core commercial-imaging
business. That business will be split into two main segments:
graphics, entertainment and commercial film; and digital printing
and enterprise.
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.
Kodak completed the $527 million sale of digital-imaging
technology on Feb. 1, 2013. Kodak intends to reorganize by
focusing on the commercial printing business.
EDENHURST GALLERY: Dickstein Shapiro Sued Over $30M in Paintings
----------------------------------------------------------------
Jamie Santo of BankruptcyLaw360 reported that a Beverly Hills
pawnbroker launched a suit in California state court Tuesday
alleging law firm Dickstein Shapiro LLP had provided faulty advice
and representation that led to the loss of more than $30 million
in paintings which a now-bankrupt art gallery pledged as
collateral.
The report related that Yossi Dina, owner of Ben Jewelry Inc.,
claims attorneys at the firm's Los Angeles office drafted a faulty
agreement meant to resolve a suit brought against his company by
the Edenhurst Gallery, then failed to help defend the settlement.
Edenhurst Gallery filed a Chapter 11 petition (Bankr. C.D. Calif.
Case No. 12-21311) on May 7, 2012.
EDINBORO UNIVERSITY: S&P Cuts Rating on 2008 & 2010 Bonds to 'BB+'
------------------------------------------------------------------
Standard & Poor's Ratings Services said that it lowered its long-
term rating to 'BB+' from 'BBB-' on the Pennsylvania Higher
Education Facility Authority's series 2008 and 2010 revenue bonds
issued for Edinboro University Foundation (EUF). At the same
time, Standard & Poor's removed the rating from CreditWatch, where
it had been placed with negative implications in January 2013.
The outlook is stable.
"The downgrade reflects our view of EUF's projected fiscal year-
end 2013 (June 30) operating results for its housing system, with
weakened debt service coverage," said Standard & Poor's credit
analyst Jonathan Volkmann. The weak projected operating
performance is due to both a flat housing fee rate from fiscal
2012 to fiscal 2013 and occupancy levels below management's
projections.
"In addition," added Mr. Volkmann, "the downgrade reflects our
view of decreasing enrollment and applications at the university,
which have resulted in a decrease in dormitory occupancy for the
2012-2013 academic year."
Edinboro University is in Edinboro, Pa. and has an enrollment of
7,462.
EDISON MISSION: Court Allows Hiring of GCG as Information Agent
---------------------------------------------------------------
The Bankruptcy Court has authorized the Official Committee of
Unsecured Creditors of Edison Mission Energy, et al., to employ
Garden City Group, Inc., as information agent nunc pro tunc to
Jan. 7, 2013.
The Court also issued an order clarifying and implementing an
information protocol regarding the dissemination of information to
the Debtors' unsecured creditors, which Information Protocol does
not require the Committee to disseminate confidential, proprietary
or non-public information concerning the Debtors or the Committee,
or any other information if the effect of such disclosure would
constitute a waiver of any privilege or confidentiality agreement
between the Committee or any other party, including the Debtors.
This will help ensure that confidential, privileged, proprietary
and/or material non-public information regarding the Debtors or
the Committee will not be disseminated to the detriment of the
Debtors' estates or their unsecured creditors and will aid the
Committee in performing its statutory functions and acquitting its
fiduciary duties.
Specifically, pursuant to the Information Protocol, the Committee
will, among other things:
a) Establish and maintain an Internet-accessible website, to
be maintained by and through GCG;
b) Distribute updates by and through GCG regarding the
Chapter 11 Cases via electronic mail for creditors that
have registered for such service on the Committee Website;
c) Establish and maintain a telephone number and electronic
mail address by and through GCG for creditors to submit
questions and comments.
GCG is a company that specializes in assisting creditors'
committees in fulfilling their statutory obligations to a debtor's
unsecured creditor body. GCG will create the Committee Website,
which website will be designed to provide a formatted, organized
and comprehensive system to provide access to information about
these Chapter 11 Cases, consistent with the Information Protocol,
to the Debtors' unsecured creditor body.
The Court also orders that fees and expenses of GCG for
professional services rendered on behalf of the Committee in
connection with these Chapter 11 Cases will be paid by the
Debtors' estates in accordance with the terms of the GCG Agreement
for Services, dated February 6, 2013.
To the best of the Committee's knowledge, GCG is a "disinterested
person," as that phrase is defined in Bankruptcy Code Sec.
101(14), as modified by Bankruptcy Code Sec. 1107(b), and does not
hold or represent an interest adverse to the estates.
About Edison Mission
Santa Ana, California-based Edison Mission Energy is a holding
company whose subsidiaries and affiliates are engaged in the
business of developing, acquiring, owning or leasing, operating
and selling energy and capacity from independent power production
facilities. EME also engages in hedging and energy trading
activities in power markets through its subsidiary Edison Mission
Marketing & Trading, Inc.
EME was formed in 1986 and is an indirect subsidiary of Edison
International. Edison International also owns Southern California
Edison Company, one of the largest electric utilities in the
United States.
EME and its affiliates sought Chapter 11 protection (Bankr. N.D.
Ill. Lead Case No. 12-49219) on Dec. 17, 2012.
EME has reached an agreement with the holders of a majority of
EME's $3.7 billion of outstanding public indebtedness and its
parent company, Edison International EIX, that, pursuant to a plan
of reorganization and pending court approval, would transition
Edison International's equity interest to EME's creditors, retire
existing public debt and enhance EME's access to liquidity.
The Company's balance sheet at Sept. 30, 2012, showed
$8.17 billion in total assets, $6.68 billion in total liabilities
and $1.48 billion in total equity.
In its schedules, Edison Mission Energy disclosed total assets of
assets of $5,721,559,170 and total liabilities of $6,202,215,094
as of the Petition Date.
Kirkland & Ellis LLP is serving as legal counsel to EME, Perella
Weinberg Partners, LP is acting as financial advisor and McKinsey
Recovery & Transformation Services U.S., LLC is acting as
restructuring advisor. GCG, Inc., is the claims and notice agent.
An official committee of unsecured creditors has been appointed in
the case and is represented by the law firms Akin Gump and Perkins
Coie. The Committee also has tapped Blackstone Advisory Partners
as investment banker and FTI Consulting as financial advisor.
ELITE PHC: Case Summary & 5 Largest Unsecured Creditors
-------------------------------------------------------
Debtor: Elite PHC Corporation
220 E. Ocean Blvd.
Los Fresnos, TX 78566
Bankruptcy Case No.: 13-10062
Chapter 11 Petition Date: February 25, 2013
Court: United States Bankruptcy Court
Southern District of Texas (Brownsville)
Judge: Richard S. Schmidt
Debtor's Counsel: Enrique Jeb Solana, Esq.
914 E. Van Buren St
Brownsville, TX 78520
Tel: (956) 544-2345
Fax: (956) 550-0641
E-mail: solanalaw@hotmail.com
Scheduled Assets: $777,321
Scheduled Liabilities: $2,286,752
A list of the Company's five largest unsecured creditors, filed
together with the petition, is available for free at
http://bankrupt.com/misc/txsb13-10062.pdf
The petition was signed by Gaines L. Burns Sr., CEO.
ELPIDA MEMORY: Tokyo Court Approves Reorganization Plan
-------------------------------------------------------
Micron Technology, Inc. on Feb. 28 announced the Tokyo District
Court's issuance of an order approving Elpida Memory Inc.'s plan
of reorganization. Elpida's plan of reorganization calls for
Micron to sponsor Elpida's reorganization under which Elpida will
become a wholly owned subsidiary of Micron. The Tokyo District
Court's approval follows an Elpida creditor vote, concluded on
Feb. 26, in which the creditors voted to approve the
reorganization plan.
"We are very pleased with the Tokyo District Court's approval of
Elpida's plan of reorganization. This is an important milestone
that brings us a significant step closer to Micron and Elpida
becoming the world's second largest memory company with the
strongest product portfolio in the industry," said Micron CEO Mark
Durcan.
The closing of the transaction remains subject to the satisfaction
or waiver of certain conditions -- including finalization of the
Tokyo District Court's approval order under Japanese bankruptcy
rules that could occur as early as four weeks from today presuming
no appeal is filed, and recognition of Elpida's reorganization
plan by the United States Bankruptcy Court for the District of
Delaware (or the completion or implementation of alternative
actions providing a substantially similar effect). Elpida and
Micron continue to target completion of the transaction in the
first half of calendar 2013. Elpida's proposed reorganization
plan was submitted to the Tokyo District Court on Aug. 21, 2012,
and the Tokyo District Court approved the submission of Elpida's
proposed reorganization plan to creditors on Oct. 31, 2012.
About Elpida Memory
Elpida Memory Inc. (TYO:6665) -- http://www.elpida.com/ja/-- is
a Japan-based company principally engaged in the development,
design, manufacture and sale of semiconductor products, with a
focus on dynamic random access memory (DRAM) silicon chips. The
main products are DDR3 SDRAM, DDR2 SDRAM, DDR SDRAM, SDRAM,
Mobile RAM and XDR DRAM, among others. The Company distributes
its products to both domestic and overseas markets, including the
United States, Europe, Singapore, Taiwan, Hong Kong and others.
The company has eight subsidiaries and two associated companies.
After semiconductor prices plunged, Japan's largest maker of DRAM
chips filed for bankruptcy in February with liabilities of 448
billion yen ($5.6 billion) after losing money for five quarters.
Elpida Memory and its subsidiary, Akita Elpida Memory, Inc.,
filed for corporate reorganization proceedings in Tokyo District
Court on Feb. 27, 2012. The Tokyo District Court immediately
rendered a temporary restraining order to restrain creditors from
demanding repayment of debt or exercising their rights with
respect to the company's assets absent prior court order.
Atsushi Toki, Attorney-at-Law, has been appointed by the Tokyo
Court as Supervisor and Examiner in the case.
Elpida Memory Inc. sought the U.S. bankruptcy court's recognition
of its reorganization proceedings currently pending in Tokyo
District Court, Eight Civil Division. Yuko Sakamoto, as foreign
representative, filed a Chapter 15 petition (Bankr. D. Del. Case
No. 12-10947) for Elpida on March 19, 2012.
ENERGY FUTURE: Might Be Helped by Another Heat Wave
---------------------------------------------------
Richard Bravo and Mary Childs at Bloomberg News report that the
deteriorating finances of the largest leveraged buyout in history
is exposing the increasingly diverging interests of its private-
equity owners led by KKR & Co. and TPG Capital and the secured
lenders who helped finance the $48 billion deal in 2007.
According to the report, while the owners of Dallas-based Energy
Future Holdings Corp. have an incentive to delay a debt
restructuring in order to recoup any of the $8.3 billion they
invested, secured lenders are likely to push for a resolution
before the assets backing their claims dwindle further. First-
lien creditors, who will ultimately control the power producer in
a bankruptcy, hired Millstein & Co. to advise them.
"At some point in these negotiations, a major first-lien creditor
is going to insist that there be no more leakage of value to
subordinated creditors in the form of cash interest payments,"
Peter Thornton, an analyst at Montpelier, Vermont-based KDP
Investment Advisors Inc., said in a telephone interview. "The
first-lien creditors are already looking at severe impairment
based on where the loans are trading."
The power producer faces a "material restructuring" within 12
months, Moody's Investors Service said in a Feb. 26 note, at which
point the management's fiduciary responsibility shifts to the
company's senior lenders, erasing the investment firms' equity
stake. Energy Future pays about $4 billion a year in interest,
cash that would otherwise go to the top-tier lenders in a
bankruptcy reorganization.
The report notes that KKR, TPG and Goldman Sachs Capital Partners'
buyout of Energy Future was a bet that would have paid off had
natural gas prices increased. Instead prices, which set the cost
of electricity in the Texas market, have fallen 75% since mid-
2008. Natural gas futures traded at $3.43 per million British
thermal units Feb. 27, down from $6.88 on the day of the
acquisition.
The Bloomberg report discloses that the equity sponsors may want
to wait until the summer in Texas, where state officials have
warned generation reserves have fallen to a level that increases
the risk of blackouts. That could cause gas prices to increase,
boosting earnings.
A record heat wave may push Texas regulators to provide additional
financial incentives to generators, said Andy DeVries, an analyst
at CreditSights Inc. Those changes, designed to increase supply
and avoid shortages, could include so-called capacity payments, in
which generators are paid to make sure their units are available
to meet peak demand.
Energy Future, along with other generator owners in the state, has
lobbied regulators to change market rules to include the capacity
payments. Such alterations could take a year or more to be
finalized, John Young, the company's chief executive officer, said
in a Feb. 19 conference call with investors.
About Energy Future
Energy Future Holdings Corp., formerly known as TXU Corp., is a
privately held diversified energy holding company with a portfolio
of competitive and regulated energy businesses in Texas. Oncor,
an 80%-owned entity within the EFH group, is the largest regulated
transmission and distribution utility in Texas.
The Company delivers electricity to roughly three million delivery
points in and around Dallas-Fort Worth. EFH Corp. was created in
October 2007 in a $45 billion leverage buyout of Texas power
company TXU in a deal led by private-equity companies Kohlberg
Kravis Roberts & Co. and TPG Inc.
Energy Future had a net loss of $1.91 billion on $7.04 billion of
operating revenues for the year ended Dec. 31, 2011, compared with
a net loss of $2.81 billion on $8.23 billion of operating revenues
during the prior year.
The Company's balance sheet at Sept. 30, 2012, showed
$42.73 billion in total assets, $51.90 billion in total
liabilities and a $9.16 billion total deficit.
* * *
On Feb. 1, 2013 ratings release, Standard & Poor's Ratings
Services raised its corporate credit ratings on Energy Future to
'CCC' from 'D' following the completion of several debt exchanges,
each of which were consider distressed.
"The 'CCC' rating reflects a credit profile that has an
unsustainable capital structure over the long term, but a lack of
near-term maturities, along with the likelihood of additional
distressed exchange over the near term," said Standard & Poor's
credit analyst Terry Pratt.
EQUINIX INC: Moody's Rates New US$1-Bil. Senior Notes 'Ba3'
-----------------------------------------------------------
Moody's Investors Service assigned a Ba3 rating to Equinix, Inc.'s
proposed $1.0 billion senior unsecured notes in seven and ten-year
tenors. In connection with this rating action, Moody's downgraded
the rating on the company's 7% senior unsecured notes due 2021 to
Ba3 from Ba2. Moody's also affirmed Equinix's Ba3 Corporate Family
Rating, Ba3-PD Probability of Default Rating (PDR) and the SGL-1
Speculative Grade Liquidity Rating. The rating outlook is
positive.
New issue proceeds will be used to redeem the 8.125% senior notes
due 2018 (approximately $750 million outstanding), pay associated
redemption fees and for general corporate purposes, including
enhancing cash balances. Moody's views the transaction favorably
due to the extension of the debt maturity structure with the
elimination of the 2018 notes and comparatively lower annual
interest expense. Since the transaction is neutral to Equinix's
credit profile, the company's CFR, PDR and SGL remain unchanged.
However, this debt financing will increase the proportion of
senior debt relative to the amount of structurally subordinated
(junior) convertible debt in Equinix's capital structure. As a
result, Equinix's senior unsecured creditor class will now absorb
a higher proportion of losses in a distressed scenario under
Moody's Loss Given Default (LGD) Methodology, which is captured in
the downgrade of Equinix's 7% senior notes to Ba3.
Rating Assigned:
$1.0 Billion Senior Unsecured Notes -- Ba3 (LGD-4, 55%)
Rating Downgraded:
$750 Million 7% Senior Unsecured Notes due 2021 to Ba3 (LGD-4,
55%) from Ba2 (LGD-3, 41%)
Ratings Affirmed:
Corporate Family Rating -- Ba3
Probability of Default Rating -- Ba3-PD
Speculative Grade Liquidity Rating -- SGL-1
The assigned rating is subject to review of final documentation
and no material change in the terms and conditions of the
transaction as advised to Moody's. Equinix intends to use the debt
offering proceeds to retire the existing 8.125% notes due 2018.
Moody's will withdraw the rating on the 2018 notes upon full
repayment.
Ratings Rationale:
Equinix's Ba3 Corporate Family Rating reflects the company's
position as the leading global independent data center operator
offering carrier-neutral data center and interconnection services
to large enterprises, content distributors and global Internet
companies. Moody's notes that the over 900 network service
providers that terminate in Equinix's data centers represent about
90% of global Internet routes. The rating also recognizes the
favorable near-term growth trends for data center services across
the world, driven by rapid growth in Internet penetration and
usage, and the ongoing migration of corporate information
technology to IP standards.
At the same time, the ratings are tempered by significant industry
risks, intensifying competition, relatively high capital intensity
inherent in the company's business plans, and the ongoing capital
expansion which will likely continue to consume cash resources
over the next two to three years. However, in Moody's opinion,
Equinix is close to reaching the inflection point where its growth
can effectively be self-financed as it continues to execute its
announced business strategy. The rating also incorporates the
possibility that if Equinix undertakes additional expansion
projects, the expected deleveraging may be delayed.
The SGL-1 liquidity rating reflects Moody's expectation that
Equinix will maintain very good liquidity over the next twelve
months. At December 31, 2012, the company had approximately $547
million in cash, equivalents and long-term investments and an
undrawn $550 million revolving credit facility maturing 2017.
Moody's projects Equinix will generate around $100 million in free
cash flow this year after funding its capital expenditures and
working capital needs. The SGL-1 liquidity rating is also
supported by the expectation of sufficient cushion under the bank
covenants over the coming year.
In rating Equinix's debt instruments, Moody's has taken a forward
look with respect to the composition and relative amounts of the
different classes of debt in the company's capital structure.
Given the net increase in senior unsecured debt as a result of
this capital raise relative to the existing subordinated (junior)
debt, the one-notch downgrade to Ba3 on the existing 7% senior
notes reflects the greater loss absorption that the senior
unsecured creditor class will now sustain in a distressed scenario
under Moody's LGD Methodology. As Moody's previously articulated
in Moody's July 2012 Equinix rating action, Moody's had expected
that future debt issuances would likely occur on a senior
unsecured basis, and as a result, there would be further downward
pressure on the senior unsecured debt ratings, which would likely
converge with the CFR.
Rating Outlook
The positive rating outlook reflects Equinix's consistent revenue
and EBITDA growth, which has allowed the company to de-lever and
move closer towards its target of generating sustainable positive
free cash flow beginning in 2013.
What Could Change the Rating - Up
The path to a rating upgrade could occur if Equinix successfully
carries out the staged buildout of its planned expansion and
successfully leases up the capacity in its data centers, such that
adjusted total debt to EBITDA leverage trends to below 4.0x
(Moody's adjusted) on a sustainable basis, and Moody's expects the
company to consistently generate positive free cash flow.
What Could Change the Rating - Down
Given the high project finance nature of Equinix's expansion
plans, debt-financed buildouts that are incremental to the current
schedule may pressure the ratings. Ratings may also come under
downward pressure, if industry pricing weakens as a result of
overcapacity trends that initiate a new period of hyper-
competition. These factors may be evidenced in Equinix's
performance, such that churn increases from current levels, the
company is unable to grow operating cash flow from the new
capacity it brings online, Equinix continues to burn cash and
adjusted leverage remains above 5.0x total debt to EBITDA (Moody's
adjusted).
The principal methodology used in rating Equinix, Inc. was Global
Communications Infrastructure Industry Methodology published in
June 2011. Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.
Headquartered in Redwood City, CA, Equinix is a data center
provider with over 7 million square feet of gross data center
space. The company operates 97 domestic and international data
centers in 31 markets across the Americas, EMEA and Asia-Pacific
and is the largest publicly traded carrier-neutral data center
hosting provider in the world. In September 2012, Equinix
announced that its board of directors approved a plan for the
company to convert to a REIT beginning January 1, 2015. Revenue
for the twelve months ended December 31, 2012 totaled $1.9
billion.
EQUINIX INC: S&P Raises CCR to 'BB-' & Rates $1BB Notes 'BB'
------------------------------------------------------------
Standard & Poor's Ratings Services said it raised its corporate
credit rating on Redwood City, Calif.-based Equinix to 'BB' from
'BB-'. S&P also raised its issue-level ratings on the company's
senior unsecured debt to 'BB' from 'BB-' and S&P's rating on the
company's subordinated debt to 'B+' from 'B'. At the same time,
S&P assigned a 'BB' issue level rating to the company's proposed
$1 billion unsecured notes issue, which will consist of seven-year
and 10-year maturities. The recovery rating is '3', indicating
S&P's expectation for meaningful (50% to 70%) recovery in the
event of a payment default. S&P's rating outlook on Equinix is
stable.
"The upgrades reflect the company's continued achievement of
strong revenue and EBITDA growth, which has caused us to revise
our base-case assumptions for leverage improvement and free
operating cash flow (FOCF) generation," said Standard & Poor's
credit analyst Cathy Cosentino.
Standard & Poor's now expects that Equinix will attain leverage of
under 4x by the end of 2013 under S&P's base case. Accordingly,
S&P has revised its financial risk assessment to "significant"
from "aggressive."
S&P's base-case scenario includes growth of 12% in revenues and
growth of 15% in reported EBITDA, adjusted for stock compensation.
S&P also expects that the company will generate in excess of
$800 million of funds from operations. S&P's previous assumptions
included about $600 million in common stock repurchases by Equinix
over the 2013-2014 period, which S&P no longer anticipates, given
its intention to convert to a real estate investment trust (REIT)
by 2015. S&P expects that future REIT distributions will be
largely funded from FOCF, coupled with some additional borrowing.
The ratings on Equinix continue to reflect a highly competitive
operating environment for data center operators, Standard & Poor's
expectation for significant near-term capital requirements, and
accompanying aggressive leverage, which was approximately 4x for
2012 including S&P's adjustments. S&P anticipates that continued
double-digit revenue growth will contribute to ongoing improvement
in the company's EBITDA and cash flow from operations. However,
S&P also expects Equinix to continue to invest heavily in the
business, both through facility expansions as well as
acquisitions, resulting in S&P's expectations for very limited
generation of positive FOCF over the next few years.
The outlook is stable. S&P expects leverage to remain around the
mid- to low-3x area over the next few years, even with some
assumed debt funding of Equinix's REIT distributions beginning in
2015. S&P could raise the rating if the company were to fund
these distributions largely with common equity, since S&P expects
that EBITDA growth will contribute to leverage of under 3x by
2015, absent these distributions.
Conversely, if the sector becomes subject to substantial contract
repricing pressures and significantly higher churn associated with
an adverse shift in supply and demand conditions over the next
year, this would bode for a weaker business risk profile and
potential downgrade. The factors would likely result in lower
profit margins and heightened leverage to the 5x or higher area,
with little prospect for improvement. Alternatively, if the
company debt funded a substantial acquisition that had much lower
growth and profitability prospects than its existing base of
business, this could also result in a downgrade, especially if it
resulted in a re-leveraging of the company to 5x or higher.
EXIDE TECHNOLOGIES: S&P Lowers CCR to 'B-'; Outlook Negative
------------------------------------------------------------
Standard & Poor's Ratings Services lowered its long-term corporate
credit rating on Exide Technologies to 'B-' from 'B'. The outlook
is negative.
At the same time, S&P lowered its issue rating on Exide's
$675 million senior secured notes (due 2018) to 'B-' (same as
S&P's corporate credit rating on the company) from 'B'. The
recovery rating on this debt is '4', indicating S&P's expectation
that lenders would receive average (30% to 50%) recovery in the
event of a payment default. S&P also lowered the rating on
Exide's $60 million convertible senior subordinated debt due 2013
to 'CCC' (two notches lower than S&P's corporate credit rating)
and the recovery rating is '6', indicating S&P's expectation of
negligible (0 to 10%) recovery.
The ratings on Exide reflect S&P's assessment of its leverage of
6.0x-7.0x over the next two years, and its cash generation
prospects, which are volatile because of Exide's exposure to lead
prices, the inherent seasonality in its businesses, and capital
intensity. The ratings also reflect the tough competition in the
automotive and industrial battery businesses, Exide's high fixed
costs, and the company's need to improve execution.
"In our view, difficult conditions in these end markets are likely
to continue in the year ahead, making it challenging for Exide to
reduce debt despite restructuring efforts it announced earlier in
fiscal 2013," said Standard & Poor's credit analyst Nishit
Madlani.
The negative rating outlook on Exide reflects S&P's view that
there is at least a one-in-three likelihood of a downgrade over
the next 12 months because of S&P's expectation for year-over-year
tightness in liquidity.
FOXCO ACQUISITION: S&P Lowers CCR to 'B'; Outlook Stable
--------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Newport, Ky.-based FoxCo Acquisition LLC and operating
subsidiary FoxCo Acquisition Sub LLC (which S&P analyze on a
consolidated basis) to 'B' from 'B+'. The outlook is stable.
At the same time, S&P is lowering its issue-level rating on the
upsized term loan due 2017 to 'B' (the same as the corporate
credit rating) from 'B+'. The recovery rating on this debt is
'3', indicating S&P's expectation for meaningful (50% to 70%)
recovery for lenders in the event of a payment default.
S&P is also lowering the issue-level rating on the revolving
credit facility to 'B' from 'B+'. The recovery rating on the
senior secured debt remains '3' (50% to 70% recovery expectation).
As a result of the debt financed dividend, pro forma debt to
trailing-eight-quarter average EBITDA increases to 6.8x based on
2012 preliminary and unaudited results. S&P expects leverage will
remain above its 6x leverage threshold for the 'B+' rating over
the next 12 to 18 months. S&P also expects that future dividends
are likely and that the company will remain highly leveraged.
"The corporate credit rating on FoxCo is based on our expectation
that the company will be able to maintain adequate liquidity
despite its ongoing high leverage," said Standard & Poor's credit
analyst Jeanne Shoesmith.
S&P considers the company's business risk profile "fair" (as per
S&P's criteria), based on its portfolio of TV stations in mostly
top-50 markets and a healthy EBITDA margin (44% in 2012), that
compares favorably with those of most peers. FoxCo's pro forma
ratio of lease-adjusted debt to trailing-eight-quarter average
EBITDA of 6.8x as of Dec. 31, 2012, and S&P's expectation that
leverage will remain high over the long term, underpin S&P's view
of the company's financial risk profile as "highly leveraged."
All but one of FoxCo's stations are affiliated with the Fox
network. This leaves the company vulnerable to any declines in
the network's audience ratings, including the decline in ratings
of Fox's important "American Idol" show. Additional risks include
TV broadcasting's mature growth prospects, and intensifying
competition for audiences and advertisers from traditional and
nontraditional media. FoxCo's advertising revenue is highly
vulnerable to economic downturns and election cycles. Key
strengths are the company's Fox-affiliated and CBS-affiliated
stations' No. 1 or No. 2 morning and late news ranking, which are
important to the stations' profitability and to their ability to
attract political advertising. The company's EBITDA margin, at
44%, compares favorably with those of most peers.
FREDDIE MAC: Posts Its Largest Profit Ever Last Quarter
-------------------------------------------------------
Nick Timiraos and Andrew R. Johnson, writing for The Wall Street
Journal, reported that Freddie Mac, buoyed by the housing market's
rebound and an improving economy, reported an $11 billion annual
profit for 2012 on Thursday -- its largest ever annual gain and
first profitable year since 2006.
WSJ related that Freddie's profit compares with a year-earlier
loss of $5.3 billion. The fortunes of Freddie and its larger
sibling, Fannie Mae, have turned around as home prices have
stabilized and mortgage delinquencies slowed, according to the WSJ
report. That has allowed the government-controlled companies to
set aside less money for loan losses, WSJ said.
Fannie Mae, which has yet to post its annual results, reported
$9.6 billion in profit during the first three quarters of 2012,
WSJ related.
About Freddie Mac
Based in McLean, Virginia, the Federal Home Loan Mortgage
Corporation, known as Freddie Mac (OTCBB: FMCC) --
http://www.FreddieMac.com/-- was established by Congress in
1970 to provide liquidity, stability and affordability to the
nation's residential mortgage markets. Freddie Mac supports
communities across the nation by providing mortgage capital to
lenders. Over the years, Freddie Mac has made home possible for
one in six homebuyers and more than five million renters.
Freddie Mac is under conservatorship and is dependent upon the
continued support of Treasury and the Federal Housing Finance
Agency acting as conservator to continue operating its
business.
FTLL ROBOVAULT: Amends List of Largest Unsecured Creditors
----------------------------------------------------------
FTLL Robovault LLC filed with the U.S. Bankruptcy Court for the
Southern District of Florida a list of its largest unsecured
creditors. The prior version didn't identify the amounts owed to
each creditor.
Name of Creditor Nature of Claim Claim Amount
--------------- --------------- ------------
Florida Asset Resolution
Group LLC $21,568,775
BBT fka Bank Atlantic (15,000,000
2850 N. Andrews Ave. Unsecured)
Wilton Manors, FL
Westfalia Technologies
Inc $242,843
c/o Ackerman Senterfitt
350 E. Las Olas Blvd., Suite 1600
Fort Laudedale, FL 33301
First Insurance Funding
Corp. $10,922
PO Box 666488
Chicago, IL 60666-0468
US Bank Trade $9,062
American Express $5,200
Mutli-Dimensional Inc $1,690
AT&T Trade $1,020
Alberto Cartalatin $460
City of Lauderdale Trade $355
Comcast Trade $157
Green Earth Beverage
Systems $174
YP $442
About FTLL RoboVault
Based in Fort Lauderdale, Florida, FTLL RoboVault LLC, aka Robo
Vault, filed for Chapter 11 bankruptcy (Bankr. S.D. Fla. Case No.
12-33090) on Sept. 27, 2012. Developer Marvin Chaney signed
Chapter 11 petitions for Robo Vault and affiliate Off Broward
Storage. The companies own modern storage warehouses in Fort
Lauderdale. The petition scheduled $18,665,069 in assets and
$21,528,776 in liabilities.
The U.S. Trustee for Region 21 notified the U.S. Bankruptcy Court
for the Southern District of Florida that until further notice, it
will not appoint a committee of creditors pursuant to Section 1102
of the Bankruptcy Code.
Bankruptcy Judge Raymond B. Ray initially presided over the case.
On Nov. 19, the case was transferred to Judge John K. Olson.
Lawrence B. Wrenn, Esq., served as the Debtor's counsel. In
November, Donald F. Walton, the U.S. Trustee for Region 21, sought
and obtained approval from the U.S. Bankruptcy Court to appoint
Barry E. Mukamal as Chapter 11 Trustee. Following the Chapter 11
Trustee's appointment, Mr. Wren voluntarily dismissed himself in
the Debtor's bankruptcy case.
FTLL ROBOVAULT: Files Schedules of Assets and Liabilities
---------------------------------------------------------
FTLL RoboVault LLC filed with the Bankruptcy Court for the
Southern District of Florida its schedules of assets and
liabilities. The schedules, as amended Jan. 31, disclose:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $15,000,000
B. Personal Property $289,150
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $22,662,623
E. Creditors Holding
Unsecured Priority
Claims $0
F. Creditors Holding
Unsecured Non-priority
Claims $1,272,329
----------- -----------
TOTAL $15,289,150 $23,934,952
About FTLL RoboVault
Based in Fort Lauderdale, Florida, FTLL RoboVault LLC, aka Robo
Vault, filed for Chapter 11 bankruptcy (Bankr. S.D. Fla. Case No.
12-33090) on Sept. 27, 2012. Developer Marvin Chaney signed
Chapter 11 petitions for Robo Vault and affiliate Off Broward
Storage. The companies own modern storage warehouses in Fort
Lauderdale. The petition scheduled $18,665,069 in assets and
$21,528,776 in liabilities.
The U.S. Trustee for Region 21 notified the U.S. Bankruptcy Court
for the Southern District of Florida that until further notice, it
will not appoint a committee of creditors pursuant to Section 1102
of the Bankruptcy Code.
Bankruptcy Judge Raymond B. Ray initially presided over the case.
On Nov. 19, the case was transferred to Judge John K. Olson.
Lawrence B. Wrenn, Esq., served as the Debtor's counsel. In
November, Donald F. Walton, the U.S. Trustee for Region 21, sought
and obtained approval from the U.S. Bankruptcy Court to appoint
Barry E. Mukamal as Chapter 11 Trustee. Following the Chapter 11
Trustee's appointment, Mr. Wren voluntarily dismissed himself in
the Debtor's bankruptcy case.
FULL SERVICE: Chapter 11 Case Summary & 2 Unsecured Creditors
-------------------------------------------------------------
Debtor: Full Service Self Storage, LLC
306 W. El Norte Parkway, #417
Escondido, CA 92026
Bankruptcy Case No.: 13-01858
Chapter 11 Petition Date: February 27, 2013
Court: U.S. Bankruptcy Court
Southern District of California (San Diego)
Judge: Louise DeCarl Adler
Debtor's Counsel: Bruce A. Wilson, Esq.
BRUCE A. WILSON, APLC
2031 Fort Stockton Drive
San Diego, CA 92103
Tel: (619) 497-0627
Fax: (619) 497-0628
E-mail: Brucewils@aol.com
Scheduled Assets: $1,804,500
Scheduled Liabilities: $2,382,044
A copy of the Company's list of its two largest unsecured
creditors filed with the petition is available for free at:
http://bankrupt.com/misc/casb13-01858.pdf
The petition was signed by Susan Smith, manager.
GENERAL MOTORS: Judge Sides With JPM in Fight Over $1.5BB Loan
--------------------------------------------------------------
Patrick Fitzgerald and Peg Brickley at Daily Bankruptcy Review
report that a New York bankruptcy judge Friday ruled a filing
mistake won't cost J.P. Morgan Chase & Co. $1.5 billion that it
loaned to General Motors prior to the auto maker's 2009 Chapter 11
filing.
About General Motors
With its global headquarters in Detroit, Michigan, General Motors
Company (NYSE:GM, TSX: GMM) -- http://www.gm.com/-- is one of
the world's largest automakers, traces its roots back to 1908.
GM employs 208,000 people in every major region of the world and
does business in more than 120 countries. GM and its strategic
partners produce cars and trucks in 30 countries, and sell and
service these vehicles through the following brands: Baojun,
Buick, Cadillac, Chevrolet, GMC, Daewoo, Holden, Isuzu, Jiefang,
Opel, Vauxhall, and Wuling. GM's largest national market is
China, followed by the United States, Brazil, the United Kingdom,
Germany, Canada, and Italy. GM's OnStar subsidiary is the
industry leader in vehicle safety, security and information
services.
General Motors Co. was formed to acquire the operations of
General Motors Corp. through a sale under 11 U.S.C. Sec. 363
following Old GM's bankruptcy filing. The U.S. government once
owned as much as 60.8% stake in New GM on account of the
financing it provided to the bankrupt entity. The deal was
closed July 10, 2009, and Old GM changed its name to Motors
Liquidation Co.
General Motors Corp. and three of its affiliates filed for
Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 09-50026) on
June 1, 2009. The Honorable Robert E. Gerber presides over the
Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin,
Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges
LLP, assist the Debtors in their restructuring efforts. Al Koch
at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as
the Chief Executive Officer for Motors Liquidation Company. GM
is also represented by Jenner & Block LLP and Honigman Miller
Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP
is providing legal advice to the GM Board of Directors. GM's
financial advisors are Morgan Stanley, Evercore Partners and the
Blackstone Group LLP. Garden City Group is the claims and notice
agent of the Debtors.
The U.S. Trustee appointed an Official Committee of Unsecured
Creditors and a separate Official Committee of Unsecured
Creditors Holding Asbestos-Related Claims. Lawyers at Kramer
Levin Naftalis & Frankel LLP served as bankruptcy counsel to the
Creditors Committee. Attorneys at Butzel Long served as counsel
on supplier contract matters. FTI Consulting Inc. served as
financial advisors to the Creditors Committee. Elihu Inselbuch,
Esq., at Caplin & Drysdale, Chartered, represented the Asbestos
Committee. Legal Analysis Systems, Inc., served as asbestos
valuation analyst.
The Bankruptcy Court entered an order confirming the Debtors'
Second Amended Joint Chapter 11 Plan on March 29, 2011. The Plan
was declared effect on March 31, 2011.
GEORGES MARCIANO: Non-Final Judgment Suffices for Involuntary
-------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that a divided panel of the U.S. Court of Appeals in San
Francisco ruled on Feb. 27 that a judgment, although on appeal,
represents an undisputed debt justifying the filing of an
involuntary bankruptcy petition.
The report relates that the case involved Georges Marciano, who
was tagged with $190 million in state-court judgments. Although
Marciano was appealing, he didn't obtain stays pending appeal, so
creditors began trying to enforce the judgments.
Creditors filed an involuntary petition. Mr. Marciano objected,
saying the non-final judgments didn't represent undisputed,
noncontingent debt under Section 303(b) of the Bankruptcy Code.
Both the bankruptcy court and the Bankruptcy Appellate Panel
rejected the argument and upheld the involuntary petitions.
Writing for a divided panel, U.S. Circuit Judge Andrew D. Hurwitz
agreed with the lower courts and disagreed with the U.S. Court of
Appeals in Richmond, Virginia, which ruled that a nonfinal
judgment won't support an involuntary petition.
Among other arguments, Judge Hurwitz said that the Fourth
Circuit's approach "runs counter to the principles of federalism."
Lower courts are divided on the issue, Judge Hurwitz said. The
U.S. Court of Appeals in New Orleans is the only other circuit
court to decide the issue, and it too came down on the side of
using an unstayed, non-final judgment to file an involuntary
petition.
U.S. Circuit Judge Sandra S. Ikuta dissented. The case is
Marciano v. Chapnick (In re Marciano), 11-60070, U.S. Court of
Appeals for the Ninth Circuit (San Francisco).
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.
GGW BRANDS: Girls Gone Wild Files for Bankruptcy
------------------------------------------------
Steven Church & Sophia Pearson, writing for Bloomberg News,
reported that the company behind the "Girls Gone Wild" videos
filed for bankruptcy to protect itself from a $10.3 million debt
claimed by Steve Wynn's Wynn Las Vegas LLC and a $5.8 million
award won by a woman who says the company used naked images of her
without permission.
Bloomberg related that last year, Wynn and his company won a
slander lawsuit against Joe Francis, founder of the "Girls Gone
Wild" franchise, which features college-age women in reality TV-
style shows focused on drinking, stripping and sex.
"The court finds that Francis made a knowing and intentional false
and defamatory statement," a Nevada judge ruled in April in
awarding $7.5 million to Wynn and Wynn Las Vegas, Bloomberg
related. Francis lied when he claimed he had proof that Wynn
tricked high-end gamblers, the judge ruled.
According to Bloomberg, GGW Brands LLC said it had about $16.3
million in debt and less than $50,000 in assets. Affiliates GGW
Magazine, LLC and GGW Events LLC also sought Chapter 11 protection
yesterday in U.S. Bankruptcy Court in Los Angeles. The bankruptcy
case doesn't mention Francis or the lawsuit, Bloomberg said. It
was signed by a company manager, Chris Dale, and listed its
biggest debt as $10.3 million to Wynn Las Vegas. The company said
it disputes the validity of that debt and a $5.8 million claim by
Tamara Favazza.
GGW Brands filed for bankruptcy "to restructure its frivolous and
burdensome legal affairs," Francis's executive assistant, Heather
Brook, said in an e-mailed statement to Bloomberg. She said
Francis hasn't owned the company for two years.
The petition disclosed assets as being worth less than $50,000.
GGW BRANDS: Chapter 11 Case Summary & Unsecured Creditors
---------------------------------------------------------
Debtor: GGW Brands, LLC
1601 Cloverfield Boulevard
Santa Monica, CA 90404
Bankruptcy Case No.: 13-15130
Chapter 11 Petition Date: February 27, 2013
Court: U.S. Bankruptcy Court
Central District of California (Los Angeles)
Judge: Sandra R. Klein
About the Debtor: GGW Brands is the company behind the "Girls Gone
Wild" videos.
Debtors' Counsel: Robert M. Yaspan, Esq.
LAW OFFICES OF ROBERT M. YASPAN
21700 Oxnard Street, Suite 1750
Woodland Hills, CA 91367
Tel: (818) 905-7711
Fax: (818) 501-7711
E-mail: court@yaspanlaw.com
GGW Brands'
Estimated Assets: $0 to $50,000
GGW Brands'
Estimated Debts: $10,000,001 to $50,000,000
Affiliates that simultaneously filed for Chapter 11 protection:
Debtor Case No.
------ --------
GGW Direct, LLC 13-15132
Assets: $0 to $50,000
Debts: $10,000,001 to $50,000,000
GGW Events, LLC 13-15134
Assets: $0 to $50,000
Debts: $10,000,001 to $50,000,000
GGW Magazine, LLC 13-15137
Assets: $0 to $50,000
Debts: $10,000,001 to $50,000,000
The petitions were signed by Chris Dale, manager.
A. A copy of GGW Brands' list of its four largest unsecured
creditors filed with the petition is available for free at:
http://bankrupt.com/misc/cacb13-15130.pdf
B. A copy of GGW Direct's list of its 16 largest unsecured
creditors filed with the petition is available for free at:
http://bankrupt.com/misc/cacb13-15132.pdf
C. A copy of GGW Events' list of its three largest unsecured
creditors filed with the petition is available for free at:
http://bankrupt.com/misc/cacb13-15134.pdf
D. A copy of GGW Magazine's list of its four largest unsecured
creditors filed with the petition is available for free at:
http://bankrupt.com/misc/cacb13-15137.pdf
GLOBAL CASH: S&P Revises Outlook to Positive & Affirms 'BB-' CCR
----------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on Global
Cash Access Inc. (GCA) to positive from stable and affirmed the
'BB-' corporate credit rating.
In addition, S&P raised the issue-level rating on the company's
$245 million senior secured first-lien credit facility (consisting
of a $35 million revolving credit facility and a $210 million term
loan) to 'BB+' (one notch higher than the corporate credit rating)
from 'BB', and revised S&P's recovery ratings on this debt to '1'
from '2'. The '1' recovery rating indicates S&P's expectation for
very high (90% to 100%) recovery in the event of a payment
default. The action reflects the reduced amount of first-lien
debt in the capital structure.
"The outlook revision to positive is chiefly the result of our
reassessment of the company's financial risk profile to
'intermediate' from 'significant' based on the company's reduction
of leverage to under 2x and improved free operating cash flow
[FOCF] to debt to more than 50% through both moderate EBITDA
growth and debt repayment," said Standard & Poor's credit analyst
Alfred Bonfantini. A reversal in year-over-year quarterly revenue
declines was also an impetus for the outlook revision.
The ratings on GCA reflect its "weak" business risk, characterized
by high customer concentration (top five contracts account for
over 30% of revenue), lack of international diversification, niche
product focus, and an increasingly competitive atmosphere and
evolving gaming landscape. However, GCA's intermediate financial
profile provides a cushion within its existing rating to absorb
the potential impact from a persistently weak operational
environment. The company's clear market leadership position in
its niche, a solid base of recurring revenues stemming from long-
term contracts, and a high contract renewal rate are also offsets.
GCA is the gaming industry's leading provider of transaction-
processing services and technology products that dispense cash to
customers on the casino floor. The company's ATMs and cash access
services distribute cash and cash advances through ATM, debit, and
credit card transactions. Its software platforms, gaming patron
database, and workstations for casino cashiers help casinos manage
credit risk and marketing efforts. The company's ATM and cash
access services account for about 90% of revenues.
The outlook is positive, reflecting S&P's expectation that GCA
will maintain its intermediate financial risk profile over the
coming year despite limited growth prospects and the likelihood
for a slight degradation in profitability. The company's
consistent positive FOCF and clear market leadership position in
the U.S. also support the positive outlook.
"We could raise the rating to 'BB' if the company adheres to
current financial policies and sustains credit metrics at around
2x. The company has not made any significant acquisitions or
share repurchases in recent years, and we don't expect the company
to partake in aggressive inorganic growth or shareholder return
activities over the intermediate term that would measurably alter
its financial risk profile. Conversely, we could revise the
outlook back to stable if the company encounters a significant
increase in competitive pricing pressure, fails to resign major
contracts that are up for renewal, or if the gaming industry
unexpectedly experiences another sharp drop in traffic, and
revenue and margins decline by more than 500 bps and leverage
approaches 3x," S&P said.
GO AND GO MD: Case Summary & Unsecured Creditor
-----------------------------------------------
Debtor: Go and Go, M.D., P.A.
3452 West Boynton Beach Boulevard, Suite 4
Boynton Beach, FL 33436
Bankruptcy Case No.: 13-14292
Chapter 11 Petition Date: February 26, 2013
Court: U.S. Bankruptcy Court
Southern District of Florida (West Palm Beach)
Judge: Paul G. Hyman, Jr.
Debtor's Counsel: Brett A. Elam, Esq.
THE LAW OFFICES OF BRETT A. ELAM, P.A.
105 S. Narcissus Avenue, #802
West Palm Beach, FL 33401
Tel: (561) 833-1113
E-mail: belam@brettelamlaw.com
Estimated Assets: $0 to $50,000
Estimated Debts: $10,000,001 to $50,000,000
The petition was signed by Ka-Hock Go, director.
Affiliate that filed separate Chapter 11 petition:
Entity Case No. Petition Date
------ -------- -------------
Jeanna Go, M.D. 13-13373 02/14/13
Go and Go, M.D.'s list of its largest unsecured creditors filed
with the petition contains only one entry:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Fedeline Normil -- $12,337,579
c/o Armando T. Lauritano
One Tampa City Center
201 N. Franklin Street, 7th Floor
Tampa, FL 33602
GREAT ATLANTIC: S&P Lowers CCR to 'CCC'; Outlook Negative
---------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on
Montvale, N.J.-based The Great Atlantic & Pacific Tea Co. (A&P),
including the corporate credit rating to 'CCC' from 'B-'. The
outlook is negative.
"The rating action reflects the company's weaker-than-expected
sales and operating performance over the past year," said Standard
& Poor's credit analyst Charles Pinson-Rose. Accordingly, the
company has used more liquidity sources than forecast, as it has
funded required capital spending. There was some improvement in
operating trends in the company's third quarter of fiscal 2012,
but even if those trends are annualized, S&P would still expect
the company to be cash flow negative given cash interest costs and
necessary capital spending. Moreover, the low levels of profits
make a breach of current financial covenants a distinct
possibility.
"The ratings on A&P reflect our expectation of the company's
financial risk profile to remain "highly leveraged" and our view
of the company's liquidity as "weak". This incorporates the
supermarket company's subpar profitability and considerable amount
of debt and debt-like obligations. We anticipate that A&P will
have weaker operating metrics than much industry peers and be
susceptible to the weak economic conditions and industry
competition. Thus, sales declines could offset possible
operational improvements. As a result of these factors, we assess
the company's business risk profile as vulnerable," S&P said.
The outlook is negative. S&P expects some improvement in
operating trends but not to the extent that the company would be
cash flow neutral over the next year. Failure to improve
profitability will put more pressure on the company's liquidity
absent asset sales. If a payment default or any restructuring
activity that is tantamount to a default is likely, S&P would
lower the rating.
While S&P do not expect a positive rating action in the near term,
it would do so if it believes the company could generate
sufficient cash flow from operations to fund its capital spending.
S&P estimates that this would happen if the sales trends
stabilized and the company was able to enhance EBITDA margins
to approximately 2.5%.
HAWKER BEECHCRAFT: Loses Out on $428-Mil. Afghan Aircraft Contract
------------------------------------------------------------------
Brian Mahoney of BankruptcyLaw360 reported that the U.S. Air Force
Wednesday awarded a $427.5 million contract to a Sierra Nevada
Corp. venture to provide light air support aircraft to the Afghan
Air Force, in a blow to Beechcraft Corp., which had banked on the
contract to boost company revenue as it emerges from Chapter 11.
The report said the Air Force said it had selected a joint venture
led by Sierra Nevada and Embraer Aircraft Holding Inc. to provide
20 of the company's A-29 Super Tucano light air support aircraft
for the Afghan air force.
About Hawker Beechcraft
Hawker Beechcraft Acquisition Company, LLC, headquartered in
Wichita, Kansas, manufactures business jets, turboprops and piston
aircraft for corporations, governments and individuals worldwide.
Hawker Beechcraft reported a net loss of $631.90 million on
$2.43 billion of sales in 2011, compared with a net loss of
$304.30 million on $2.80 billion of sales in 2010.
Hawker Beechcraft Inc. and 17 affiliates filed for Chapter 11
reorganization (Bankr. S.D.N.Y. Lead Case No. 12-11873) on May 3,
2012, having already negotiated a plan that eliminates $2.5
billion in debt and $125 million of annual cash interest expense.
The plan will give 81.9% of the new stock to holders of $1.83
billion of secured debt, while 18.9% of the new shares are for
unsecured creditors. The proposal has support from 68% of secured
creditors and holders of 72.5% of the senior unsecured notes.
Hawker is 49%-owned by affiliates of Goldman Sachs Group Inc. and
49%-owned by Onex Corp. The Company's balance sheet at Dec. 31,
2011, showed $2.77 billion in total assets, $3.73 billion in total
liabilities and a $956.90 million total deficit. Other claims
include pensions underfunded by $493 million.
Hawker's legal representative is Kirkland & Ellis LLP, its
financial advisor is Perella Weinberg Partners LP and its
restructuring advisor is Alvarez & Marsal. Epiq Bankruptcy
Solutions LLC is the claims and notice agent.
The Official Committee of Unsecured Creditors selected Daniel H.
Golden, Esq., and the law firm of Akin Gump Strauss Hauer & Feld
LLP as legal counsel. The Committee's financial advisor is FTI
Consulting, Inc.
HOST HOTELS: Fitch Affirms 'BB+' Issuer Default Rating
------------------------------------------------------
Fitch Ratings has upgraded the credit ratings of Host Hotels &
Resorts (NYSE: HST) and its operating partnership, Host Hotels &
Resorts Limited Partnership as follows:
Host Hotels & Resorts, Inc.
-- Issuer Default Rating (IDR) to 'BB+' from 'BB'.
Host Hotels & Resorts, L.P.
-- IDR to 'BB+' from 'BB';
-- Unsecured revolving credit facility to 'BB+' from 'BB';
-- Senior unsecured notes to 'BB+' from 'BB';
-- Senior unsecured exchangeable notes to 'BB+' from 'BB'.
The Rating Outlook is Stable.
Key Rating Drivers
The upgrade reflects Fitch's view that Host's credit metrics will
remain appropriate for the 'BB+' rating through the lodging cycle.
The upgrade reflects Host's high-quality portfolio of
geographically diversified upper tier hotel properties, its large
and liquid unencumbered asset pool and the company's progress and
commitment to sustaining lower leverage.
Positive Hotel Industry Outlook
Fitch has a positive view towards U.S. lodging industry
fundamentals owing to healthy demand from corporate transient and
inbound international visitation trends. Combined with limited new
supply, the increase in demand has lifted occupancy rates to
levels that support pricing flexibility. Fitch's base case
incorporates revenue per available room (RevPAR) for U.S. hotels
of 4.5% in 2013, which at the low end of the 4%-6% range of
forecasts from the leading industry forecasting services.
Diversified Portfolio
Host maintains a high-quality, geographically diversified
portfolio of 118 consolidated Luxury and upscale hotel properties
across the U.S. including 15 international hotels located in,
Australia, Brazil, Canada, Chile, Mexico, and New Zealand. The
company's portfolio provides significant financial flexibility and
geographically diverse cash flows, which Fitch views positively.
Expectations for Sustained Lower Leverage
Host has reduced its leverage from its down cycle peak of 5.5x to
4.4x for the trailing 12 month period ending Dec. 31, 2012. Fitch
defines leverage as net debt to recurring operating EBITDA,
including cash distributions from joint ventures. Fitch's base
case scenario projects Host's leverage to decrease to 3.7x in 2013
and 3.2x in 2014.
Large and Liquid Unencumbered Asset Pool
Along with having $737 million (or 73.7%) of availability under
its revolving credit facility and $417 million of cash on its
balance sheet at Dec. 31, 2012, Host's large unencumbered asset
pool provides an excellent source of contingent liquidity. The
company's unencumbered assets to unsecured debt (UA/UD) ratio
ended 2012 at 385%. Host's unencumbered asset profile has several
attractive features that should enhance their appeal as
collateral. The company's hotels are principally located in key
'gateway' markets that balance sheet lenders tend to favor.
Moreover, its hotels are generally aligned with the strongest
brands in the industry. Finally, Host owns some of the largest and
most valuable hotels in the U.S., which should allow it to raise
secured debt capital quickly and in size, if needed.
Fitch projects that Host's fixed charge coverage ratio, which
declined to 1.7x in 2009 from 2.6x in 2008 and rose to 2.2x in
2012, to improve to 3.2x in 2013 and 3.7x in 2014. In a more
adverse case than anticipated by Fitch, coverage could decline to
2.0x over the next 12-to-24 months, which would be commensurate
with a rating lower than 'BB+'. Fitch defines fixed charge
coverage as recurring operating EBITDA less renewal and
replacement capital expenditures, divided by cash interest expense
and capitalized interest.
Industry Cyclicality Reduces Cash Flow Stability
The cyclical nature of the hotel industry is Fitch's primary
credit concern related to Host. Hotels re-price their inventory
daily and, therefore, have the shortest lease terms and least
stable cash flows of any commercial property type. Economic
cycles, as well as exogenous events (i.e. acts of terrorism), have
historically caused material declines in revenues and
profitability for hotels..
The Stable Outlook centers on Fitch's expectation that Host's
credit profile will remain appropriate for the 'BB+' rating
through the economic cycles, barring any significant changes in
the company's capital structure plans. The Stable Outlook also
reflects the quality of Host's portfolio and unencumbered asset
coverage that provides good downside protection to bondholders.
Host has access to various sources of capital and maintains a
solid liquidity profile, moderate leverage, consistent coverage of
fixed charges, and solid unencumbered asset coverage.
Rating Sensitivities
The following factors may result in positive momentum in the
ratings and/or Rating Outlook:
-- Achieving leverage of roughly 3x, which Fitch views as
adequate cushion to maintain leverage below 5x during a
lodging cycle downturn.
-- Host maintaining a significant pool of unencumbered assets;
-- Sustaining fixed charge coverage above roughly 3x, which Fitch
views as adequate cushion to maintain coverage above 2x during
a lodging cycle downturn.
The following factors may result in negative momentum on the
ratings and/or Rating Outlook:
-- Fitch's expectation for leverage to sustain above 5.0x;
-- Fitch's expectation for fixed charge coverage sustaining
below 1.5x.
HOSTESS BRANDS: Sells Bread Biz. to Flowers, Bimbo for $392MM
-------------------------------------------------------------
Hostess Brands Inc. on Thursday auctioned most of its bread
business to Georgia-based bakery food maker Flowers Foods Inc. for
$360 million, while Mexico's baking giant Grupo Bimbo SAB de CV
edged out Flowers for the Hostess Beefsteak bread business with a
$31.9 million bid.
Flowers Foods' stalking horse bid for Hostess Brands, Inc.'s
Wonder, Nature's Pride, Merita, Home Pride, and Butternut bread
brands; 20 bakeries; and approximately 38 depots for $360 million
was declared the highest and best bid for such assets, eliminating
the need for the auction that had been scheduled for February 28.
Flowers' stalking horse bid for Hostess' Beefsteak brand for a
purchase price of $30 million was topped by another bidder. That
auction was scheduled for Feb. 28, but Flowers chose not to
increase its bid as would have been necessary to win the Beefsteak
auction.
"We are pleased Flowers won the bid for Hostess' primary bread
brands and bakeries without the need for an auction," said George
E. Deese, Flowers Foods' chairman of the board and CEO. "Now we
move forward with the next step, which is the bankruptcy court
review. Following that, the transaction will continue through the
regulatory process before it can be finalized. We expect it could
be several months yet before it's finalized."
Flowers has agreed to pay $360 million for the majority of the
bread business assets. The agreement includes, in addition to the
brands, 20 bakeries, 38 depots and other assets.
In a separate transaction, Grupo Bimbo, S.A.B. de C.V. was
selected as the winning bidder for the assets related to the
Company's Beefsteak(R) bread business at the conclusion of today's
auction. Grupo Bimbo has agreed to pay $31.9 million for the
Beefsteak(R) assets. Grupo Bimbo SAB raised the bid by $1.9
million to beat Flowers' stalking horse offer.
The Company will ask the U.S. Bankruptcy Court for the Southern
District of New York to approve both transactions at a hearing on
March 19.
"The proposed sales will result in significant proceeds for the
benefit of the Company's stakeholders and ensure the beloved bread
brands can continue to be enjoyed for years to come," said Hostess
Brands Chairman and Chief Executive Officer Gregory F. Rayburn.
Hostess Brands is also pursuing the sale of its remaining brands,
including Hostess(R), Dolly Madison(R), Drake's(R), Sweetheart(R),
Eddy's(R), Standish Farms(R) and Grandma Emilie's(R).
Following Hostess' exit from the market in November 2012 and the
initiation of the sale of its assets, Flowers announced on January
11, 2013, its agreement with Hostess to be the stalking horse
bidder for certain Hostess bread bakeries and bread brands.
If Flowers is ultimately successful in its acquisition of these
assets, they will fit with the company's long-term growth
objective to reach more of the U.S. population with its fresh
breads, buns, and rolls.
"Since 2004, our company has expanded the reach of our fresh
bakery products from about 38% of the U.S. population to more than
70% today," Mr. Deese noted. "We accomplished this by expanding
into new markets from our existing bakeries, building new
bakeries, and through strategic acquisitions. We have proven
experience in integrating acquisitions, having completed more than
100 since 1968 and three significant ones in just the last three
years - Tasty Baking, Lepage Bakeries, and the Sara Lee and
Earthgrains brands in California."
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. Hostess 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 2012 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 was expected to be completed in one year.
The first auction will take place Feb. 28, 2013, where the initial
bid of $390 million for most of the bread business will be made by
Flowers Foods Inc. March 13 will be the auction for the snack
cake business where the opening bid of $410 million cash will come
from affiliates of Apollo Global Management LLC and C. Dean
Metropoulos & Co. The major sales will close out on March 15 with
an auction to learn if $56.35 million is the most to be earned
from selling some of the remaining bread businesses and the Drakes
cakes operation.
An auction is slated March 13 for the snack cake business where
the opening bid of $410 million cash will come from affiliates of
Apollo Global Management LLC and C. Dean Metropoulos & Co. The
major sales will close out on March 15 with an auction to learn if
$56.35 million is the most to be earned from selling some of the
remaining bread businesses and the Drakes cakes operation.
HOSTESS BRANDS: Campbell Mithun Solicits Brand Engagement Ideas
---------------------------------------------------------------
Minneapolis ad agency Campbell Mithun will hire its summer Lucky
13 interns via an online application soliciting brand-engagement
ideas for taking the iconic Twinkies brand into the future.
Applicants must submit an idea and "Dear new owners of Twinkies"
statement; Twinkies is scheduled to be auctioned due to bankruptcy
to a new owner on March 13.
Twinkies and Campbell Mithun go way back: Campbell Mithun
originated the "Where's the cream filling?" tagline when Twinkies
was a client nearly 20 years ago. The "Dear new Twinkies owners .
. ." application occurs during Campbell Mithun's 80th anniversary
year (and Twinkies were born in the '30s too).
Twinkies' parent company, Hostess Brands Inc., recently declared
bankruptcy and received approval from U.S. Bankruptcy Judge Robert
Drain to auction off assets including the Twinkies brand. (Flowers
Foods announced on Feb. 28 that it was declared highest bidder for
Wonder and other bread brands.) The Twinkies auction is scheduled
for March 13; bids will likely be approved at a March 19th sale
hearing. Updates are posted at http://www.hostessbrands.info
"So many factors aligned to bring Twinkies into our application
process," said Debbie Fischer, director of human resources at
Campbell Mithun, which used a Twitter-based application for hiring
interns the past two years. "We wanted our process to go beyond
Twitter, this marketing case study is unfolding in real time, and
the new Twinkies owner will likely be named at a March 13th
auction -- we take the number 13 very seriously around here."
Campbell Mithun will share publicly the Twinkies recommendations
submitted by the thirteen finalists selected to interview for the
final 2013 Lucky 13 internship positions.
Details about the application can be found at
http://www.lucky13internship.comand via #L13 on Twitter.
The application process
The Lucky 13 Internship application process opens March 1 on
http://www.lucky13internship.com
Applicants must be a college student with a graduation date
between fall 2012 and summer 2014. Deadline is 11:59 pm (CDT) on
March 29.
In 2013, interns will be hired in the following discipline areas -
account leadership, media strategy and media negotiations.
Creative interns will be provided via the agency's partnership
with Miami Ad School, which selects students to place on site at
Campbell Mithun quarterly.
To apply, applicants submit the following via online application:
-- URL address for their Twinkies recommendation (presented via
blog, YouTube, SlideShare, etc. - wherever it lives on the
Internet)
-- A "Dear new owners of Twinkies" statement
-- A "Dear Campbell Mithun, hire me because . . ." note
-- Resume
Finalists will be invited to the agency for in-person interviews
or interviewed via Skype (for out-of-market applicants), and
intern selections will be announced in April 2013 - Campbell
Mithun's 80th anniversary.
About Campbell Mithun's Lucky 13 Internship
Some believe that 13 is an unlucky number. But as Ray Mithun, co-
founder of Campbell Mithun once said, "If thirteen is unlucky for
some people, it must be lucky for someone else." The Lucky 13
internship program seeks those individuals who can be someone else
-- those who have the courage to go against the grain and to
believe in original ideas and creative solutions. The interns do
real work for real clients, alongside real professionals, earning
a real chance to start their careers as full-time members of the
advertising community.
About Campbell Mithun
Since its founding in 1933, Campbell Mithun --
http://www.cmithun.com-- has established a national brand-
building reputation in the consumer packaged goods, retail,
healthcare, financial services and telecommunications sectors and
serves clients including General Mills, Land O'Lakes, SuperValu,
Chipotle, Great Clips, Schwan's, Popeyes and Toro. Its Compass
Point Media unit, established in 1976, makes connections in all
the right places with strategists and negotiators who maximize
media impact and minimize costs for both media-only and shared
Campbell Mithun clients.
Campbell Mithun has created client marketplace success for 80
years guided by Ray Mithun's founding philosophy: create client
success by making Everything Talk at each point of customer
contact.
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. Hostess 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 2012 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 was expected to be completed in one year.
The first auction will take place Feb. 28 where the initial bid of
$390 million for most of the bread business will be made by
Flowers Foods Inc. March 13 will be the auction for the snack cake
business where the opening bid of $410 million cash will
come from affiliates of Apollo Global Management LLC and C. Dean
Metropoulos & Co. The major sales will close out on March 15 with
an auction to learn if $56.35 million is the most to be earned
from selling some of the remaining bread businesses and the Drakes
cakes operation.
HUNTSMAN INTERNATIONAL: Moody's Rates New $250MM Add-on Notes 'B1'
------------------------------------------------------------------
Moody's Investors Service assigned a B1 rating to Huntsman
International LLC's (HI, - Ba3 Corporate Family Rating), proposed
$250 million of add-on senior unsecured notes due 2020 and a Ba1
rating to its proposed $200 million add-on Term Loan B due 2017.
The proceeds of the proposed add-on senior unsecured notes will be
used to redeem the company's remaining 5.5% notes due 2016 and for
general corporate purposes, while the proposed add-on Term-Loan
will be used to refinance the existing Term Loan due 2014. HI is a
primary wholly owned operating subsidiary of Huntsman Corporation
(Huntsman -- Ba3 Corporate Family Rating). HI's existing ratings
are being maintained. The outlook is stable.
"We view the proposed refinancing as a credit positive as Huntsman
continues to diligently extend its maturity profile," said Moody's
analyst Bill Reed.
The following list summarizes the existing ratings to be
maintained, the proposed add-ons and changes in LGD percentages:
Huntsman Corporation
CFR -- Ba3
PDR -- Ba3(-PD)
Outlook -- Stable
Huntsman International LLC
CFR -- Ba3
PDR -- Ba3-PD
Speculative Grade Liquidity Rating -- SGL - 2
Proposed $250 million add-on Senior Unsecured Notes due 2020 --
B1 (LGD5, 70%) to be added to
4.875% Senior notes due 2020 -- B1 (LGD5, 70%) from B1 (LGD5,
71%)
Proposed $200 million add-on Term Loan B due 2017-- Ba1 (LGD2,
25%) to be added to
Senior Secured Term Loan B2 due 2017 -- Ba1 (LGD2, 25%) from Ba1
(LGD2, 27%)
$400 million Senior Secured revolver -- Ba1 (LGD2, 25%) from Ba1
(LGD2, 27%)
Senior Secured Term Loan B due 2014 -- Ba1 (LGD2, 25%) from Ba1
(LGD2, 27%)*
Senior Secured Term Loan C due 2016 -- Ba1 (LGD2, 25%) from Ba1
(LGD2, 27%)
5.5% Senior notes due 2016 -- B1 (LGD5, 70%) from B1 (LGD5,
71%)*
8.625% Senior Sub notes due 2020 -- B2 (LGD6, 93%)
8.625% Senior Sub notes due 2021 -- B2 (LGD6, 93%)
Outlook -- Stable
* Ratings to be withdrawn upon completion of the transaction
Ratings Rationale:
The Ba3 CFR takes into account HI's strong competitive position in
key businesses and significant competitive barriers, including
process know-how and the benefits of integrated world scale
production capabilities. The ratings nevertheless have been
tempered by relatively high leverage and historically modest free
cash flow generation even after record EBITDA generation. In 2012,
however, free cash flow of $362 million was the highest it has
been in the last four years.
Other credit concerns include the company's ongoing exposure to
rising prices in some feedstock and ores, and ongoing weakness in
key end markets, notably housing and geographically in Europe and
Asia. Any improvement in the housing or additional strength in the
automobile markets would result in further cash flow improvement.
In 2012, Huntsman at the parent level, generated over $1.4 billion
in EBITDA, resulting in debt/EBITDA of 3.4x, (adjusted for
intercompany loans), a significant improvement when compared to
the 5.8x at the end of December 2010.
HI's liquidity profile is good reflecting strong cash balances
($387 million at the end of December 2012 for Huntsman and HI
combined). Liquidity is further supported by the prospect of
stable cash flow, the size of HI's revolver at $400 million, the
extension of its bank credit facility maturity to 2017 and the
goal of management to maintain liquidity at close to $1 billion in
the form of cash, accounts receivable securitization and revolver
availability. The B1 rating on the notes reflects their unsecured
position in the capital structure.
The stable outlook reflects HI's improved credit metrics and good
liquidity profile. The outlook incorporates the expectations that
the company will continue to improve its credit metrics without
materially increasing its leverage. In the company's 2012 annual
report letter to shareholders from management it was indicated
that reducing debt remains a focus and priority of the board and
management team. This was echoed in a "Special Note to
Shareholders" dated February 15, 2013 where the Executive Chairman
also stated that "We will also aggressively seek opportunities to
further reduce our indebtedness." Still, Moody's notes that if the
share price were to drop unexpectedly for an extended period of
time, it could increase the chances for event risk.
Should the company amortize between $400-500 million of additional
debt from free cash flow over the next two years, Moody's could
consider a higher rating. Moody's would consider a negative rating
action if EBITDA on a quarterly basis is not sustained above $100
million level. Finally, there would be negative pressure on the
rating if a large acquisition or a significant shareholder
friendly action were to meaningfully reduce cash balances and
increase debt levels.
The principal methodology used in rating Huntsman was the Global
Chemical Industry Methodology published in December 2009. Other
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the U.S., Canada and EMEA
published in June 2009.
Huntsman Corporation is a global manufacturer of differentiated
and commodity chemical products. Huntsman's products are used in a
wide range of applications, including those in the adhesives,
aerospace, automotive, construction products, durable and non-
durable consumer products, electronics, medical, packaging, paints
and coatings, power generation, refining and synthetic fiber
industries. Huntsman had revenues of $11.2 billion for the twelve
months ending December 31, 2012.
HUNTSMAN INETRNATIONAL: S&P Rates $250 Million Notes Add-on 'B-'
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Standard & Poor's Ratings Services said that its ratings on Salt
Lake City, Utah-based Huntsman Corp. (Huntsman) and its wholly
owned subsidiary Huntsman International LLC (Huntsman
International), including the 'BB' corporate credit ratings and
all issue and recovery ratings, remain unchanged following the
announcement of plans to refinance certain debt. The outlook is
stable.
Huntsman International plans to add $200 million to its existing
senior secured term loan maturing in 2017 and will use the
proceeds to fully repay the $193 million outstanding under its
senior secured term loan maturing in 2014. The senior secured
debt rating is 'BB+' (one notch above the corporate credit rating)
with a recovery rating of '2', indicating prospects for
substantial (70%-90%) recovery in the event of a payment default.
Huntsman International also plans to add $250 million to its
$400 million 4.875% senior unsecured notes due 2020 and use
proceeds to repay $200 million of senior unsecured notes due 2016
and for general corporate purposes. The senior unsecured debt
rating is 'BB-' (one notch below the corporate credit rating) with
a recovery rating of '5', indicating prospects for modest (10%-
30%) recovery in the event of a payment default.
Standard & Poor's ratings on Huntsman reflect what S&P considers
to be its "satisfactory" business risk profile as a diversified
chemical manufacturer and its "aggressive" financial risk profile.
As of Dec. 31, 2012, the key funds from operations to total
adjusted debt ratio was 23%, in line with S&P's expectation that
it exceed 20% at the current ratings. This ratio is likely to dip
below 20% in 2013 in tandem with a cyclical trough in titanium
dioxide, before recovering in 2014. Other important assumptions
include S&P's expectation that polyurethane results will remain
strong, the company will realize significant restructuring
benefits in 2013 and 2014, and it will continue to incrementally
reduce debt.
RATINGS LIST
Ratings Unchanged
Huntsman Corp.
Corporate credit rating BB/Stable/--
Huntsman International LLC
Corporate credit rating BB/Stable/--
$650 mil sr unsecured nts due 2020 BB-
Recovery rating 5
Extended term loan due 2017* BB+
Recovery rating 2
* Includes the $200 million add-on
INLAND EMPIRE: Biodiesel Producer Files Chapter 7
-------------------------------------------------
Tom Sowa, writing for The Spokesman-Review, reports that Inland
Empire Oilseeds LLC, which began producing biodiesel in 2009 in
Odessa Wash., closed its doors in December and filed for Chapter 7
reorganization in the Eastern District of Washington bankruptcy
court. Inland Empire is the region's first producers of biodiesel
from canola.
According to the report, the bankruptcy documents list assets of
about $1.67?million. The $3.8 million in liabilities consists of
debts of $2.6 million to unsecured creditors and $1.2 million to
secured creditors such as the co-ops.
The report says the venture was funded in part with a $1 million
Energy Freedom Loan through the state of Washington. That loan
was managed by the Odessa Public Development Authority, which owns
the production facility. The operation also received more than $2
million in loans from the U.S. Department of Agriculture.
The report relates that as the plant began operations, the federal
government provided a $1 per gallon subsidy to spur the production
of crop-based fuels. In mid-2010 that subsidy was eliminated, and
Inland Empire Oilseeds closed its doors. In 2011, the government
restored that subsidy and the company was restructured, with the
two co-ops moving to a minority stake.
According to the report, the majority stake -- roughly 75% -- was
taken by two new Inland Empire Oilseeds managers, Joel Edmonds and
Wally Kempe. The co-ops and other investors, including Avista
Corp., own the remaining 25%.
According to the report, Keith Bailey -- the manager of two
agriculture cooperatives that were majority investors in the
company: Odessa Union Warehouse Cooperative and Reardan Grain
Growers -- said there's a possibility the plant can be reopened,
as the Odessa Public Development Authority has issued a request
for proposals to reopen it.
According to reporting by the Troubled Company Reporter, Odessa,
Wash.-based Inland Empire Oilseeds, LLC, was placed by creditors
in bankruptcy by filing an involuntary Chapter 11 petition (Bankr.
E.D. Wash. Case No. 12-05395) on Dec. 21, 2012. Judge Patricia C.
Williams was assigned to the involuntary case. Kevin O'Rourke,
Esq., at Southwell & O'Rourke, serves a counsel to the petitioning
creditors. The five creditors who signed the Chapter 11 petition
are AgVentures NW, LLC, allegedly owed $1,199,176; Columbia Grain,
Inc., allegedly $320,308; Holbrook Elevator Services, Inc.,
purportedly owed $191,565; Norm Leatha, who asserts $17,876 in
claims; and Grange Supply Company of Odessa, allegedly owed
$3,075.
INNOVIDA HOLDINGS: Miami Businessman Cops to $40M Investment Scam
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Carolina Bolado of BankruptcyLaw360 reported that a top executive
of bankrupt Miami Beach-based manufacturing company InnoVida
Holdings LLC on Thursday pled guilty to charges that he conned
investors out of $40 million.
The report related that in a hearing before U.S. District Judge
William Dimitrouleas, Claudio Osorio, of Aventura, Fla., pled
guilty to two counts of conspiracy to commit wire fraud and to one
count of conspiracy to commit money laundering.
The 54-year-old Venezuela native, who was named "entrepreneur of
the year" by Ernst &Young in 1997 for his former company CHS
Electronics, stood in court and pled guilty to the charges, the
report added.
About InnoVida and Osorio
Receiver Mark S. Meland, at Meland Russin & Budwick, PA, filed a
Chapter 11 petition for InnoVida Holdings, LLC, fdba COEG, LLC
(Bankr. S.D. Fla. Case No. 11-17702) on March 24, 2011. Separate
Chapter 11 petitions were filed for these affiliates: InnoVida
MRD, LLC (Case No. 11-17704), InnoVida Services, Inc. (Case No.
11-17705), and InnoVida Southeast, LLC (Case No. 11-17706). Peter
D. Russin, Esq., at Meland Russin & Budwick, P.A., serves as
bankruptcy counsel. InnoVida Holdings has under $50,000 in assets
and $10 million to $50 million in debts, according to the
petition.
Founder Claudio Eleazar and Amarilis Osorio filed a separate
Chapter 11 petition (Bankr. S.D. Fla. Case No. 11-17075) on
March 17, 2011. Mr. Osorios is being accused of fraud and
mismanagement.
Bankruptcy Judge Robert A. Mark in Miami authorized the
appointment of Mark S. Meland as trustee for InnoVida.
Mr. Meland, who had been serving as a receiver for the business in
the wake of the allegations against Mr. Osorio, was the one who
ushered InnoVida into bankruptcy. Soneet Kapila, Fort Lauderdale
accountant and court-appointed fiduciary, was named new Chapter 7
trustee for the case of Claudio Osorio, replacing Chapter 11
trustee Mark Meland. The appointment came after Mr. Osorio's
Chapter 11 cases was converted to Chapter 7 liquidations.
ISLE OF CAPRI: Moody's Rates New $350-Mil. Senior Notes 'B2'
------------------------------------------------------------
Moody's Investors Service assigned a B2 to Isle of Capri Casinos,
Inc.'s $350 million senior unsecured notes due 2023. At the same
time, Moody's raised the ratings on the company's existing senior
unsecured notes to B2 from B3, in addition to upgrading the
ratings on the company's senior secured credit facility to Ba2
from Ba3. Isle's B2 Corporate Family Rating and B2-PD Probability
of Default Rating were affirmed along with the Caa1 rating on the
company's senior subordinated notes. The rating outlook is stable.
Isle intends to use the net proceeds from this senior unsecured
offering, together with cash on hand, to fund the repayment of a
portion of the secured term loans outstanding under its senior
secured credit facility. Any remaining proceeds will be used for
general corporate purposes. The notes will rank pari passu with
Isle's existing senior unsecured notes.
The assignment of a B2 to Isle's proposed senior unsecured note
issue along with the one-notch increase in the company's secured
bank loan rating to Ba2 and existing senior unsecured notes to B2,
reflects the change in debt composition resulting from the
proposed transaction -- higher amount of senior unsecured debt and
lower amount of senior secured debt. Pro forma for the proposed
offering, senior unsecured debt will now comprise a majority of
Isle's debt, at about 56%. The affirmation of Isle's senior
subordinated notes at Caa1 considers that despite the shift in
debt composition between senior unsecured and senior secured debt,
there will be no change in the total amount of debt that ranks
senior to the subordinated notes. That amount will remain
substantial.
These issue-level upgrades also incorporate Isle's announced plan
to replace its existing credit facility with a new credit facility
that will mature in 2018. Isle's new credit facility, if executed,
will have a $300 million revolving credit facility, the same as
the current limit, but will not include a term loan facility. The
proposed senior unsecured note issuance and the issue-level
upgrades, however, are not contingent upon Isle successfully
closing on this new credit facility.
New rating assigned:
$350 million senior unsecured notes due 2023 at B2 (LGD 4, 53%)
Ratings upgraded:
$300 million revolver expiring 2016 to Ba2 (LGD 2, 10%) from
Ba3 (LGD 2, 24%)
$500 million term loan due 2017 to Ba2 (LGD 2, 10%) from Ba3
(LGD 2, 24%)
$300 million 7.75% senior unsecured notes due 2019 to B2 (LGD
4, 53%) from B3 (LGD 4, 67%)
Ratings affirmed:
Corporate Family Rating at B2
Probability of Default Rating at B2-PD
$350 million 8.875% senior subordinated notes due 2020 at Caa1
(LGD 5, 89%)
Ratings Rationale:
Isle's B2 Corporate Family Rating considers the company's high
leverage. Moody's expects Isle's lease-adjusted debt/EBITDA will
remain above 5.5 times during the next 12 to 18 month period.
Lease-adjusted debt/EBITDA for the latest 12-month period ended
January 27, 2013 was about 6.1 times (5.9 times on an unadjusted
basis), a level characteristic of a mid-to-low 'B' category
Corporate Family Rating, according to Moody's Global Gaming
methodology. Although Moody's believes that Isle's recently opened
Cape Girardeau casino in Missouri will provide an annual EBITDA-
based return on assets that will contribute to a reduction in the
company's leverage over the longer-term, debt/EBITDA is not
expected to materially improve until Cape Girardeau begins to
generate a full year of earnings.
The ratings are supported by Isle's geographic diversification.
The company's wholly-owned subsidiaries own and operate 14 gaming
entertainment facilities throughout the U.S. Moody's believes
Isle's diversification provides the company with a greater level
of overall protection against regional downturns, legislative
risk, and competitive risk than less diversified gaming operators.
The stable rating outlook considers Moody's view that despite the
weakness in the gaming industry in recent years, Isle has pushed
out its debt maturities and positioned itself for increased free
cash flow. It now has the opportunity to reduce leverage even as
it ramps up new gaming facilities. Ratings could improve if Isle
demonstrates an ability to achieve and sustain debt/EBITDA at or
below 5 times. Ratings could be lowered if it appears that Isle
will not be able to achieve and sustain debt/EBITDA of 6 times --
a key assumption supporting the B2 Corporate Family Rating -- over
the longer-term for any reason.
The principal methodology used in this rating was the Global
Gaming Industry Methodology published in December 2009. Other
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the U.S., Canada and EMEA
published in June 2009.
Isle owns and operates regional gaming entertainment facilities in
Louisiana, Mississippi, Missouri, Iowa, Colorado and Florida. Net
revenue for latest 12-month period ended January 27, 2013 was
about $988 million.
ISLE OF CAPRI: S&P Assigns B+ Rating to $350MM Sr. Notes Due 2021
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned St. Louis-based Isle
of Capri Casino Inc.'s planned $350 million senior notes due 2021
a 'B+' issue-level rating, with a recovery rating of '2',
indicating S&P's expectation for substantial (70%-90%) recovery
for noteholders in the event of a payment default.
At the same time, S&P placed its issue-level rating on Isle of
Capri's 7.75% senior notes due 2019 on CreditWatch with positive
implications. S&P's recovery rating on this debt is '4' (30% to
50% recovery expectation), different from its recovery rating on
the planned senior notes of '2' (70%-90% recovery expectation).
Proceeds from the planned senior notes, combined with cash on hand
and borrowings under the company's secured revolving credit
facility, will be used to repay the company's secured term loan
($491 million outstanding at Jan. 27, 2013). This would result in
a lower amount of secured debt outstanding at default under S&P's
simulated default scenario and improve the recovery prospects for
the senior notes issues sufficiently enough to warrant a recovery
rating of '2'. Upon closing of the planned senior notes and
repayment of the term loan, S&P expects to revise its recovery
rating on the 7.75% senior notes to '2' from '4' and raise its
issue-level rating to 'B+' from 'B', in accordance with S&P's
notching criteria.
RATINGS LIST
Isle of Capri Casinos Inc.
Corporate Credit Rating B/Stable/--
New Ratings
Isle of Capri Casinos Inc.
$350M sr notes due 2021 B+
Recovery Rating 2
CreditWatch Placement
Isle of Capri Casinos Inc.
To From
7.75% sr notes due 2019 B/Watch Pos B
Recovery Rating 4 4
J.C. PENNEY: Fitch Cuts Issuer Default Rating to B-; Outlook Neg
----------------------------------------------------------------
Fitch Ratings has downgraded the Issuer Default Ratings (IDRs) on
J.C. Penney Co., Inc. and J.C. Penney Corporation, Inc. to 'B-'
from 'B'. The Rating Outlook is Negative.
Key Rating Drivers
The rating downgrades reflect Fitch's concerns that there is a
lack of visibility in terms of the company's ability to stabilize
its business in 2013 and beyond after a precipitous decline in
revenues leading to negative EBITDA of $270 million in 2012 (this
figure excludes noncash pension expense, stock-based compensation,
and restructuring charges). J.C. Penney will need to tap into
additional funding to cover a projected FCF shortfall of $1.3
billion - $1.5 billion in 2013, which could begin to strain its
existing sources of liquidity.
J.C. Penney's 25.2% decline in comparable store sales (comps) in
2012 reflects the challenges of moving toward a more everyday
value strategy with significantly reduced promotions. The jury
remains out on whether J.C. Penney has done some irrevocable
damage or whether it can begin to stabilize its core revenue base
and sustainably improve profitability of its business beginning
the first quarter of 2013. It remains unclear whether the new
shops and merchandise offerings can offset any continued declines
in the non-shops business, which currently accounts for 92% of its
square footage, in the second-half 2013.
Fitch expects that sales trends could remain in the negative low
single digit range in 2013, with gross margin in the mid-30
percentage range relative to 32.5% for 2012. (This is still well
below the 39% - 40% range the company should realize if inventory
is appropriately aligned to sales expectations.) This would result
in EBITDA of $150 million - $200 million, well below the minimum
$1.2 billion - $1.3 billion levels needed to be FCF neutral.
More negative assumptions, including sales declines in the mid-
single digit range with the gross margin at 2012 levels would
result in negative EBITDA of over $300 million. On the upside,
however, a stabilization in sales trends and the gross margin
recovering strongly to the 38 - 39% range could see EBITDA improve
to the positive $600 million to $700 million. First quarter 2013
results will provide a first glimpse at where underlying sales
start levelling off.
The company would have to generate EBITDA of $1.2 billion - $1.3
billion to fund interest expense of $250 million and higher capex
needs to support accelerated shop roll-outs in 2013 to be FCF
even, assuming no adverse swings in working capital. This would
require a comps increase of 10% and gross margins to return to
39% - 40%, which Fitch views as a highly unlikely scenario.
J.C. Penney ended 2012 with $930 million in cash and $1.2 billion
available on its recently upsized $1.85 billion revolver. Free
cash flow (after dividend) was negative $906 million, in spite of
working capital being a more than $700 million source of cash
(mostly on inventory reduction and improved vendor payables).
Free cash flow is projected at negative $1.3 billion - $1.5
billion in 2013, and is expected to remain materially negative in
2014 based on current projected EBITDA levels and higher capex
needs. As a result, Fitch expects the company will have to start
drawing down on its revolver and look to other financing sources
(secured, convertible debt or preferred shares) to fund operations
and peak seasonal working capital needs.
Under its newly amended facility, J.C. Penney is permitted to
issue up to $1.75 billion in debt to be secured by a second lien
on the ABL collateral and a first lien on other assets. The
company owns 426 stores (including 121 located on ground leases),
12.2 million square feet of distribution center, regional
warehouse and fulfillment center space, and its Plano Texas
headquarters with 240 acres (or 10.5 million square feet) of
adjacent land which are all currently unencumbered. To the extent
that the 1982 indenture governing the 7.125% debentures due 2023
(under which the company has to maintain a ratio of net tangible
assets to senior funded indebtedness of 2.0x and above) proves to
be too restrictive, JCP could potentially use any new debt
proceeds to repay the $255 million in outstanding debt under this
indenture.
The company has no debt maturities prior to October 2015 (and
maturities between 2015 and 2018 are $200 million - $300 million
annually). J.C. Penney's pension fund remains well funded, and
Fitch does not expect the company will need to make any cash
contributions in 2013.
For issuers with IDRs at 'B+' and below, Fitch performs a recovery
analysis for each class of obligations of the issuer. The issue
ratings are derived from the IDR and the relevant Recovery Rating
and notching, based on Fitch's recovery analysis that places a
liquidation value under a distressed scenario of approximately
$4.4 billion as of Feb. 2, 2013 for J.C. Penney.
J.C. Penney's senior secured credit facility that matures in April
2016, which the company recently upsized to $1.85 billion from
$1.5 billion, is rated 'BB-/RR1', indicating outstanding recovery
prospects (91% - 100%) in a distressed scenario. The facility is
secured by inventory and receivables with borrowings subject to a
borrowing base. The company is subject to a springing covenant of
maintaining a fixed charge coverage of 1.0x-1.1x if availability
falls below a certain threshold or the company undertakes certain
actions such as making restricted payments.
The $2.9 billion senior unsecured notes and debentures have been
downgraded to 'B-/RR4' from 'BB-/RR2', indicating average recovery
prospects (31% - 50%). The lowered ratings on the notes reflect
Fitch's expectation that the company will need to incur additional
secured debt to fund operations in the near term, which would
jeopardize the longer-term recovery prospects of the unsecured
notes.
Rating Sensitivities
A negative rating action could occur if comps and margin trends
continue to erode, indicating J.C Penney is not stabilizing its
core business, leading to concerns around the company's liquidity
position.
A Positive Rating action could occur if top line starts to
stabilize and the company realizes more normalized gross margin
levels. Leverage would need to be closer to 6x which on current
debt levels would imply EBITDA of around $625 million.
Fitch has downgraded the ratings on J.C. Penney as follows:
J.C. Penney Co., Inc.
-- IDR to 'B-' from 'B'.
J.C. Penney Corporation, Inc.
-- IDR to 'B-' from 'B';
-- $1.85 billion senior secured bank credit facility to
'BB-/RR1' from 'BB/RR1'';
-- $2.9 billion senior unsecured notes and debentures to
'B-/RR4' from ''BB-/RR2'.
The Rating Outlook is Negative.
J.C. PENNEY: Moody's Keeps B3 CFR Following 2012 Earnings Release
-----------------------------------------------------------------
Moody's Investors Service stated that J.C. Penney Company, Inc.'s
B3 Corporate Family Rating and negative outlook remain unchanged
following its announcement of fourth quarter and full year 2012
operating results. JCP announced its fourth quarter and 2012 full
year operating results which continued to reflect a significant
decline in both sales and earnings. Overall, the results largely
met Moody's low expectations and support the Corporate Family
Rating of B3 and the senior unsecured notes rating of Caa1 with a
negative outlook. Moody's belief that the fourth quarter of 2012
would show a severe decline in JCP's earnings was a key driver of
its downgrade of the Corporate Family Rating to B3 in November
2012.
The principal methodology used in this rating 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.
J.C. Penney Company, Inc. is one of the U.S.'s largest department
store operators with about 1,100 locations in the United States
and Puerto Rico. It also operates a website, www.jcp.com. Revenues
are about $13 billion.
J.C. PENNEY: S&P Lowers Corporate Credit Rating to 'CCC+'
---------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Plano, Texas-based J.C. Penney Co. Inc. to 'CCC+' from
'B-'. The outlook is negative.
At the same time, S&P lowered the issue-level rating on the
company's unsecured debt to 'CCC+' from 'B-' and maintained its
'3' recovery rating on this debt, indicating S&P's expectation of
meaningful (50% to 70%) recovery for debtholders in the event of a
payment default.
"The downgrade reflects the performance erosion that has
accelerated throughout the previous year and seems likely to
persist over the next 12 months," explained Standard & Poor's
credit analyst David Kuntz.
As a result, the company's credit protection measures have eroded
meaningfully because of the decline in EBITDA. It also reflects
S&P's assessment that the company's liquidity position is "less
than adequate" and that J.C. Penney will need to seek additional
financing or borrow substantially on its revolving credit facility
to continue its transformation. In S&P's opinion, the company is
likely to experience further operational disruptions over the next
several quarters as it further refines its new pricing and
merchandising strategy.
The rating on Penney reflects Standard & Poor's assessment that
the company's business risk profile is "vulnerable" and its
financial risk profile is "highly leveraged." S&P's business risk
assessment incorporates its analysis that the department store
industry is highly competitive, with large, well-established
participants. Based on this environment, it is S&P's view that
further performance difficulties may result in the loss of market
share to other players, such as Macy's, Kohl's Corp., Sears, other
department stores, or off-price retailers.
Over the next 12 months, S&P expects Penney to experience further
operational disruptions as it refines its strategy. S&P believes
that customer traffic is likely to remain negative, thus resulting
in weaker revenue performance.
S&P assesses Penney's financial risk profile as "highly
leveraged," as credit protection measures have deteriorated over
the past year because of performance declines. Debt to EBITDA
increased to about 23x at Feb. 2, 2013, from 3.9x for the prior
period in 2012. Interest coverage fell to 0.6x from 3.7x, and
funds from operations (FFO) to total debt slid to about (12)% from
17%. S&P expects that credit protection measures are likely to
remain in line with current levels over the next 12 months.
JMC STEEL: S&P Revises Outlook to Negative & Affirms 'B+' CCR
-------------------------------------------------------------
Standard & Poor's Ratings Services said it revised its outlook on
Chicago, Il.-based JMC Steel Group Inc. (JMC) to negative from
stable and affirmed its ratings on the company, including the 'B+'
corporate credit rating.
"The outlook revision acknowledges weaker credit measures, which
we attribute to lower than anticipated returns from a 2012
leveraged acquisition," said Standard & Poor's credit analyst
Gayle B. Podurgiel. "Although credit measures may deteriorate
further over the next couple of quarters, we affirmed our ratings
because the company's chairman has recently returned to the CEO
role and has taken steps that we expect will more efficiently
align its manufacturing operations, eventually leading to reduced
costs and resulting in improved EBITDA and credit measures toward
the end of fiscal 2013 and into fiscal 2014."
S&P's rating reflects its view of the JMC Steel's business risk as
"weak" and its financial risk as "aggressive". Weaknesses include
the company's dependence on cyclical energy- and construction-
related end markets, its exposure to volatile steel prices, and
leverage that is currently high relative to levels typically
associated with the rating. That said, S&P views the company's
liquidity as strong and S&P expects leverage to drop below 5x
EBITDA next year.
JMC Steel is one of North America's largest producers of steel
pipe and tubular products. The company maintains a good
competitive position in structural tube, standard pipe, and
electrical conduit products, despite competing in highly cyclical
end markets. Prices for the company's main raw material--flat
rolled steel, which S&P believes comprises more than 60% of the
cost of goods sold--are volatile. Although JMC Steel has
historically been somewhat successful at passing higher steel
prices through to its customers, it remains vulnerable to steel
price movements. In addition, its standard pipe and OCTG products
have at times been susceptible to imports, although this risk has
been mitigated somewhat by antidumping and countervailing duties
on products from China.
The negative outlook reflects credit measures, including expected
fiscal 2013 leverage near 6x EBITDA, that are weak relative to
S&P's aggressive financial risk assessment. S&P expects these
measures to remain weak for the next couple of quarters, but that
meaningful improvements will occur if the company successfully
executes its strategy.
S&P will lower its rating on JMC Steel if leverage remains above
5x EBITDA for a sustained period. This could occur if efforts to
more fully integrate the 2012 Lakeside Steel acquisition and to
lower overall costs are not successful. Alternatively, S&P would
revise its outlook back to stable if it appears that EBITDA will
improve to $310 million or higher and that leverage will drop
below 5x in fiscal 2014.
JOURNAL REGISTER: Sale Not Approved, Debtor Seeks Exclusivity
-------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Journal Register Co. for a second time is asking for
an expansion of the exclusive right to propose a Chapter 11 plan.
Journal Register wants the judge at a March 19 hearing to give
another 90 days of exclusive plan-filing rights. If approved, the
new deadline would be July 2.
According to Mr. Rochelle, the papers could be read as hedging the
newspaper publisher's bets on whether it will be possible to
confirm even a liquidating plan once sale is completed.
The New York-based company received no bids to compete with the
proposal for the business to be reacquired by current lender and
owner Alden Global Capital Ltd., mostly in exchange for
$117.5 million in secured debt and $1.75 million in cash to pay
the costs of winding down the bankruptcy. The auction was
canceled.
The report notes that there was to have been a Feb. 21 hearing for
approval of the sale. That hearing was treated as a status
conference, according to court records. A new approval hearing
date was to be set.
Discussions have begun with the official creditors' committee on a
Chapter 11 plan, according to court papers. In another statement,
the company says there are talks with the committee on the "most
efficient means for bringing these cases to conclusion." Another
says there are talks on "an appropriate manner in which to resolve
these cases."
About Journal Register
Journal Register Company -- http://www.JournalRegister.com/-- is
the publisher of the New Haven Register and other papers in 10
states, including Philadelphia, Detroit and Cleveland, and in
upstate New York. The Company's more than 350 multi-platform
products reach an audience of 21 million people each month. JRC
is managed by Digital First Media and is affiliated with MediaNews
Group, Inc., the nation's second largest newspaper company as
measured by circulation.
Journal Register, along with its affiliates, first filed for
Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No.
09-10769) on Feb. 21, 2009. Attorneys at Willkie Farr & Gallagher
LLP, served as counsel to the Debtors. Attorneys at Otterbourg,
Steindler, Houston & Rosen, P.C., represented the official
committee of unsecured creditors. Journal Register emerged from
Chapter 11 protection under the terms of a pre-negotiated plan.
Journal Register returned to bankruptcy (Bankr. S.D.N.Y. Lead Case
No. 12-13774) on Sept. 5, 2012, to sell the business to 21st CMH
Acquisition Co., an affiliate of funds managed by Alden Global
Capital LLC. The deal is subject to higher and better offers.
Journal Register exited the 2009 restructuring with $225 million
in debt and with a legacy cost structure, which includes leases,
defined benefit pensions and other liabilities that have become
unsustainable and threatened the Company's efforts for a
successful digital transformation. Journal Register managed to
reduce the debt by 28% with the Company servicing in excess of
$160 million of debt.
Alden Global is the holder of two terms loans totaling $152.3
million. Alden Global acquired the stock and the term loans from
lenders in Journal Register's prior bankruptcy.
Journal Register disclosed total assets of $235 million and
liabilities totaling $268.6 million as of July 29, 2012. This
includes $13.2 million owing on a revolving credit to Wells Fargo
Bank NA.
Bankruptcy Judge Stuart M. Bernstein presides over the 2012 case.
Neil E. Herman, Esq., Rachel Jaffe Mauceri, Esq., and Patrick D.
Fleming, Esq., at Morgan, Lewis & Bockius, LLP; and Michael R.
Nestor, Esq., Kenneth J. Enos, Esq., and Andrew L. Magaziner,
Esq., at Young Conaway Stargatt & Taylor LLP, serve as the 2012
Debtors' counsel. SSG Capital Advisors, LLC, serves as financial
advisors. American Legal Claims Services LLC acts as claims
agent. The petition was signed by William Higginson, executive
vice president of operations.
Otterbourg, Steindler, Houston & Rosen, P.C., represents Wells
Fargo. Akin, Gump, Strauss, Hauer & Feld LLP, represents the
Debtors' Tranche A Lenders and Tranche B Lenders. Emmet, Marvin &
Martin LLP, serves as counsel to Wells Fargo, in its capacity as
Tranche A Agent and the Tranche B Agent.
The Official Committee of Unsecured Creditors appointed in the
case has retained Lowenstein Sandler PC as counsel and FTI
Consulting, Inc. as financial advisor.
K-V PHARMACEUTICAL: Creditors Seek to Slow Restructuring
--------------------------------------------------------
Joseph Checkler at Daily Bankruptcy Review reports creditors of K-
V Pharmaceutical Co. think business at the company is great -- so
great, in fact, that they think K-V should scrap its current
reorganization plan and work out a more favorable proposal.
The U.S. Bankruptcy Court for the Southern District of New York
will convene a hearing on March 19, 2013 at 11:00 a.m., to
consider adequacy of the information in K-V Discovery Solutions,
Inc., et al.'s proposed Chapter 11 Plan. Objections, if any, are
due 4 p.m. on March 7.
The Debtors filed a Chapter 11 reorganization plan where first-
lien lenders will receive 82% of the stock along with a $50
million second-lien term loan. A group of the lenders making a
$85 million loan to finance the plan will receive 15% of
the new stock.
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, 2012, 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 employed 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 tapped
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. Kristopher M. Hansen, Esq.,
Erez E. Gilad, Esq., and Matthew G. Garofalo, Esq., at Stroock &
Stroock & Lavan LLP, represent the Creditors Committee.
Weil, Gotshal & Manges LLP's Robert J. Lemons, Esq., and Lori R.
Fife, Esq., represent an Ad Hoc Senior Noteholders Group.
The Plan provides that in full satisfaction, settlement, release.
LEHMAN BROTHERS: Brokerage Arm Finalizes Settlements
----------------------------------------------------
The trustee overseeing the liquidation of Lehman Brothers Inc.
under the Securities Investor Protection Act signed two separate
agreements, resolving nearly $44 billion in customer claims by
the brokerage's parent and the liquidators for Lehman Brothers
International (Europe).
The settlements reduce Lehman Brothers Holdings Inc.'s customer
claim from $19.9 billion to $2.3 billion. Lehman's European unit
will receive a $9 billion customer claim, down from the $24
billion it originally wanted. The holding company will also have
an unsecured claim of about $14 billion against the brokerage
while the European unit will receive a $4 billion unsecured
claim.
The settlements pave the way for full repayment to former
customers of the Lehman brokerage, according to James Giddens,
the court-appointed trustee.
"If judicially approved and implemented, securities customers
should receive full satisfaction of their claims and
distributions from the general estate will be facilitated," Mr.
Giddens said in a statement.
Leftover money would be paid to other classes of unsecured
creditors. Mr. Giddens can make distributions to unsecured
creditors without a restructuring plan since the Lehman brokerage
is being liquidated under the SIPA.
In a February 26 statement, the Securities Investor Protection
Corp. commended the trustee, saying the settlements "avoid time
consuming and costly litigation that would have held up the
return of customer property."
Tony Lomas, one of the administrators liquidating the European
unit, called the agreements "the most complex inter affiliate
settlement" completed in Lehman's insolvency.
The settlements are subject to approval by the U.S. Bankruptcy
Court in Manhattan, which will convene a hearing on April 16.
The trustee's agreement with the U.K. liquidators also needs
approval by an English court.
Mr. Giddens has now settled the three largest claims against the
Lehman brokerage. Last year, he won court approval to settle the
$6 billion claim by Lehman Brothers Finance AG. Under the deal,
Lehman's Swiss affiliate can assert a claim of more than $549
million.
The trustee will keep $777 million in reserve to pay any claims
by Barclays, which acquired the brokerage from Lehman in
September 2008, according to court papers.
The settlement agreements are available without charge at:
http://bankrupt.com/misc/LBHI_SettlementLehman&Trustee.pdf
http://bankrupt.com/misc/LBHI_SettlementLBIE&Trustee.pdf
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was
the fourth largest investment bank in the United States. For
more than 150 years, Lehman Brothers has been a leader in the
global financial markets by serving the financial needs of
corporations, governmental units, institutional clients and
individuals worldwide.
Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008
(Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy
petition disclosed US$639 billion in assets and US$613 billion in
debts, effectively making the firm's bankruptcy filing the
largest in U.S. history. Several other affiliates followed
thereafter.
Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset
LLC sought for bankruptcy protection in December 2009.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at
Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell,
Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve
as counsel to the Official Committee of Unsecured Creditors.
Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's
investment banker.
On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S.
District Court for the Southern District of New York, entered an
order commencing liquidation of Lehman Brothers, Inc., pursuant
to the provisions of the Securities Investor Protection Act (Case
No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI.
The Bankruptcy Court approved Barclays Bank Plc's purchase of
Lehman Brothers' North American investment banking and capital
markets operations and supporting infrastructure for US$1.75
billion. Nomura Holdings Inc., the largest brokerage house in
Japan, purchased LBHI's operations in Europe for US$2 plus the
retention of most of employees. Nomura also bought Lehman's
operations in the Asia Pacific for US$225 million.
Lehman emerged from bankruptcy protection on March 6, 2012, more
than three years after it filed the largest bankruptcy in U.S.
history. The Chapter 11 plan for the Lehman companies other than
the broker was confirmed in December 2011.
Lehman made its first payment of $22.5 billion to creditors in
April 2012 and a second payment of $10.2 billion on Oct. 1. A
third distribution is set for around March 30, 2013. The
brokerage is yet to make a first distribution to non-customers.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other
insolvency and bankruptcy proceedings undertaken by its
affiliates.
LEHMAN BROTHERS: JPMorgan Balks at Bid to Question London Whale
---------------------------------------------------------------
JPMorgan Chase & Co. opposed Lehman Brothers Holdings Inc.'s bid
to drag the bank's trader known as the "London Whale" into their
$8.6 billion fight, saying he was not responsible for the
company's bankruptcy.
Lehman asked for approval from a bankruptcy court to ask French
authorities to force Bruno Iksil to testify. The company said Mr.
Iksil's "practice of intentional mismarking" of trades forced it
to post $273.3 million of collateral in September 2008.
JPMorgan said Mr. Iksil had nothing to do with alleged mismarked
derivative trades, and that Lehman was unable to prove that the
bank's Chief Investment Office had any role in collateral requests
at the centre of the $8.6 billion lawsuit.
"It is readily apparent that the only real reason for plaintiffs
interest in taking Mr. Iksil's deposition is that he has been in
the news," JPMorgan said.
Mr. Iksil, who had worked in London for JPMorgan, gained notoriety
after his activities were linked to $6.2 billion of trading losses
at the bank's CIO. A September 10, 2008 internal JPMorgan email
linked Mr. Iksil to two trades by the CIO that were then
"significantly contributing" to a dispute with Lehman, Reuters
reported.
In a statement on Thursday, Andy Rossman, a partner at Quinn
Emanuel Urquhart & Sullivan representing Lehman, said JPMorgan's
"extraordinary effort" to block Mr. Iksil's testimony is
"revealing."
Lehman sued JPMorgan in early 2010 to recover billions of dollars
that the bank allegedly seized as collateral. The excessive
collateral demanded by JPMorgan, which served as Lehman's main
clearing bank in the 2008 financial crisis, allegedly drove the
company into bankruptcy.
The case is Lehman Brothers Holdings Inc. v. JPMorgan Chase Bank
NA, 12-01874, U.S. Bankruptcy Court, Southern District of New
York (Manhattan).
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was
the fourth largest investment bank in the United States. For
more than 150 years, Lehman Brothers has been a leader in the
global financial markets by serving the financial needs of
corporations, governmental units, institutional clients and
individuals worldwide.
Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008
(Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy
petition disclosed US$639 billion in assets and US$613 billion in
debts, effectively making the firm's bankruptcy filing the
largest in U.S. history. Several other affiliates followed
thereafter.
Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset
LLC sought for bankruptcy protection in December 2009.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at
Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell,
Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve
as counsel to the Official Committee of Unsecured Creditors.
Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's
investment banker.
On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S.
District Court for the Southern District of New York, entered an
order commencing liquidation of Lehman Brothers, Inc., pursuant
to the provisions of the Securities Investor Protection Act (Case
No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI.
The Bankruptcy Court approved Barclays Bank Plc's purchase of
Lehman Brothers' North American investment banking and capital
markets operations and supporting infrastructure for US$1.75
billion. Nomura Holdings Inc., the largest brokerage house in
Japan, purchased LBHI's operations in Europe for US$2 plus the
retention of most of employees. Nomura also bought Lehman's
operations in the Asia Pacific for US$225 million.
Lehman emerged from bankruptcy protection on March 6, 2012, more
than three years after it filed the largest bankruptcy in U.S.
history. The Chapter 11 plan for the Lehman companies other than
the broker was confirmed in December 2011.
Lehman made its first payment of $22.5 billion to creditors in
April 2012 and a second payment of $10.2 billion on Oct. 1. A
third distribution is set for around March 30, 2013. The
brokerage is yet to make a first distribution to non-customers.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other
insolvency and bankruptcy proceedings undertaken by its
affiliates.
LEHMAN BROTHERS: Sells Office Building to RXR, Walton for $820M
---------------------------------------------------------------
Lehman Brothers Holdings Inc. has agreed to sell a 21-storey
office building to RXR Realty and Walton Street Capital LLC for
$820 million, Reuters reported.
The company originally was the lender to Broadway Partners, which
used the $1.23 billion loan in 2007 to buy the building.
When Broadway defaulted on part of the mortgage, Lehman was
allowed by a bankruptcy court in 2010 to buy a junior part of the
mortgage for up to $255.4 million. Lehman paid roughly 85% of
the face value of that and took control of the property,
according to the report.
The 1.25-million square foot building is located at 237 Park
Avenue in New York.
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was
the fourth largest investment bank in the United States. For
more than 150 years, Lehman Brothers has been a leader in the
global financial markets by serving the financial needs of
corporations, governmental units, institutional clients and
individuals worldwide.
Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008
(Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy
petition disclosed US$639 billion in assets and US$613 billion in
debts, effectively making the firm's bankruptcy filing the
largest in U.S. history. Several other affiliates followed
thereafter.
Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset
LLC sought for bankruptcy protection in December 2009.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at
Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell,
Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve
as counsel to the Official Committee of Unsecured Creditors.
Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's
investment banker.
On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S.
District Court for the Southern District of New York, entered an
order commencing liquidation of Lehman Brothers, Inc., pursuant
to the provisions of the Securities Investor Protection Act (Case
No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI.
The Bankruptcy Court approved Barclays Bank Plc's purchase of
Lehman Brothers' North American investment banking and capital
markets operations and supporting infrastructure for US$1.75
billion. Nomura Holdings Inc., the largest brokerage house in
Japan, purchased LBHI's operations in Europe for US$2 plus the
retention of most of employees. Nomura also bought Lehman's
operations in the Asia Pacific for US$225 million.
Lehman emerged from bankruptcy protection on March 6, 2012, more
than three years after it filed the largest bankruptcy in U.S.
history. The Chapter 11 plan for the Lehman companies other than
the broker was confirmed in December 2011.
Lehman made its first payment of $22.5 billion to creditors in
April 2012 and a second payment of $10.2 billion on Oct. 1. A
third distribution is set for around March 30, 2013. The
brokerage is yet to make a first distribution to non-customers.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other
insolvency and bankruptcy proceedings undertaken by its
affiliates.
LEWIS BROTHERS: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Lewis Brothers Properties, Inc.
6101 Orange Avenue
Fort Pierce, FL 34947
Bankruptcy Case No.: 13-14193
Chapter 11 Petition Date: February 25, 2013
Court: United States Bankruptcy Court
Southern District of Florida (West Palm Beach)
Judge: Erik P. Kimball
Debtor's Counsel: Craig I. Kelley, Esq.
KELLEY & FULTON, PL
1665 Palm Beach Lakes Blvd #1000
West Palm Beach, FL 33401
Tel: (561) 491-1200
E-mail: cik@kelleylawoffice.com
Scheduled Assets: $942,470
Scheduled Liabilities: $1,493,762
A copy of the Company's list of its 20 largest unsecured
creditors, filed together with the petition, is available for free
at http://bankrupt.com/misc/flsb13-14193.pdf
The petition was signed by Edward A. Lewis, Jr., president.
Affiliate that filed separate Chapter 11 petition:
Petition
Debtor Case No. Date
------ -------- ----
Hickman's Brake & Alignment 13-14189 02/25/13
Services, Inc.
LODGENET INTERACTIVE: Receives Final Access to Bankruptcy Loan
--------------------------------------------------------------
LodgeNet Interactive Corp. (LNETQ) received final bankruptcy
court-approval on its $30 million in bankruptcy financing, which
includes $15 million in new funding that will keep the company
running as it restructures.
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the bankruptcy judge in New York gave final approval
on Feb. 27 for so-called debtor-in-possession financing providing
the company with $15 million in fresh cash. There were no
objections at the hearing, according to court papers. Gleacher &
Co. is agent for the lenders.
Stephanie Gleason, writing for Dow Jones Newswires, recounts that
LodgeNet received interim approval of the loan, provided by a
group of lenders, in late January. That approval gave it access to
$5 million worth of new funding. This approval gives it access to
the other $10 million.
According to the Dow Jones report, included in the full amount of
the loan, bringing the total to $30 million, is a $15 million
rollup -- a refinancing of prepetition debt that gives it priority
for repayment in bankruptcy.
About LodgeNet
Sioux Falls, South Dakota-based LodgeNet Interactive Corporation
(Nasdaq: LNET) -- http://www.lodgenet.com/-- provides interactive
media and connectivity services to hospitality and healthcare
businesses and the consumers they serve. Recently named by
Advertising Age as one of the Leading 100 US Media Companies,
LodgeNet Interactive serves roughly 1.5 million hotel rooms
worldwide in addition to healthcare facilities throughout the
United States.
As of Sept. 30, 2012, LodgeNet, on a consolidated basis, reported
$292 million in assets and $449 million in liabilities.
LodgeNet Interactive and its affiliates sought Chapter 11
protection (Bankr. S.D.N.Y. Lead Case No. 13-10238) on Jan. 27,
2013, with a prepackaged Chapter 11 plan of reorganization.
The plan extends the maturity date and modifies a $332.6 million
term loan and $21.5 million revolver. Colony Capital, LLC, is
acquiring 100% of the new shares of the reorganized company for
$60 million.
Weil, Gotshal & Manges LLP serves as counsel to the Debtors;
Leonard Street and Deinard is the co-counsel; Miller Buckfire &
Co., LLC and Moorgate Bankers are the investment banker; FTI
Consulting, Inc. is the financial advisor; and Kurtzman Carson
Consultants is the claims and notice agent.
MBIA INSURANCE: S&P Lowers Rating to 'CCC'; Outlook Negative
------------------------------------------------------------
Standard & Poor's Ratings Services said that it has lowered its
financial strength rating on MBIA Insurance Corp. (MBIA Corp.) to
'CCC' from 'B' and lowered its financial strength rating on
National Public Finance Guarantee Corp. (National) to 'BB' from
'BBB'. The outlook on MBIA Corp. remains negative and on National
remains developing. At the same time, S&P affirmed its 'B-'
rating on MBIA Inc. with a negative outlook.
"Our rating action on MBIA Corp. reflects our view that the
company will likely come under regulatory control over the next 12
months," said Standard & Poor's credit analyst David Veno. "MBIA
Corp.'s commercial mortgage-backed securities portfolio has
experienced significant deterioration in recent months, leading to
the probability that claim payments could begin in the near term.
The remaining deductible for certain of these exposures provides
limited protection from claim payments by the company. These
potential claim payments would place stress on MBIA Corp.'s
already weak liquidity position which could lead to regulatory
intervention."
"Our rating action on National reflects our view of the company's
weakened capital adequacy position and financial risk profile. It
appears unlikely that our expectation, as stated in National's
outlook of June 21, 2012, that the secured intercompany loan from
National to MBIA Corp. will be repaid within 12 months, or that
the loan is repaid before MBIA Corp. potentially falls under
regulatory control. If MBIA Corp. does fall under regulatory
control, National's ability to claim the perfected security
interest is uncertain, in our view. We have, therefore, included
a 100% charge for the intercompany loan in our analysis of
National's capital adequacy," S&P added.
S&P's rating on MBIA Inc. reflects the operating companies'
limited dividend capacity and the holding company's weak liquidity
position. S&P's rating also reflects MBIA Corp.'s run-off state
and National's limited near-term growth opportunities. S&P
expects MBIA Inc.'s cash and short-term investments will cover its
debt-servicing needs and operating-expense obligations through
2013 -- an important factor for the rating. The estimated tax
escrow release in January 2014 related to the tax-sharing
agreement could also provide additional liquidity.
"The negative outlook for MBIA Corp. reflects our view of the
potential for regulatory intervention without an unforeseen
positive development within the next 12 months," Mr. Veno
continued. "We expect adverse loss development in the structured-
finance exposure could continue, diminishing liquidity and
weakening capital. Given the size of the insured portfolio
relative to MBIA Corp.'s capital base, along with limited
opportunity to improve its capital position, we expect capital and
liquidity to remain under stress."
The outlook on National is developing reflecting the uncertainties
surrounding the timing and outcome of litigation, loan repayment,
and market acceptance. S&P expects that if the company receives a
favorable litigation resolution--recognizing it as a separate
legal entity and allowing it to maintain the assumed book of
business and capital--and is able to replenish the capital used
for the intercompany loan, it would begin writing business and
demonstrate favorable market acceptance and competitive
characteristics. National will have adequate short-term liquidity
since it faces minimal near-term needs. S&P expects the company
to be able to demonstrate financial flexibility independent of
MBIA Inc. If these expectations are met, and the intercompany
loan is repaid or capital otherwise replenished, S&P could upgrade
its rating National. S&P could lower the rating closer to its
rating on MBIA Corp. if adverse litigation resolution forces the
sister entities back together.
"The negative outlook for MBIA Inc. reflects our view that the
operating companies will continue to have limited dividend
capacity and the holding company's weak liquidity position," Mr.
Veno added. "We expect MBIA Inc.'s cash flow, cash, and short-
term investments to cover its debt-service and operating-expense
obligations through 2013, which is an important factor for
the rating. We could lower the rating if adverse litigation
resolution forces MBIA Corp. and National back together or if
dividends from National are restricted."
MBIA INSURANCE: May be Placed in Rehabilitation or Liquidation
--------------------------------------------------------------
MBIA Inc. filed on Feb. 27, 2013, its annual report on Form 10-K
for the year ended Dec. 31, 2012.
The Company said MBIA Insurance Corporation may be placed in a
rehabilitation or liquidation proceeding as a result of, among
other things, a lack of liquid assets available to pay claims due
to the failure by RMBS sellers/servicers to honor their
contractual obligation to repurchase ineligible mortgage loans,
combined with the substantial RMBS claims payments and other
claims and commutation payments to date, as well as the increased
probability that MBIA Insurance Corporation will experience claims
payments on certain of its CMBS exposures in the near future.
The Company reported net income of $1.234 billion for the twelve
months ended Dec. 31, 2012, compared with a net loss of
$1.318 billion for the twelve months ended Dec. 31, 2011.
Consolidated total revenues (losses) of $2.435 billion for the
year ended Dec. 31, 2012, included $1.5 billion of net gains on
insured derivatives compared with $2.8 billion of net losses for
2011. The net gains on insured derivatives in 2012 were
principally associated with the reversal of unrealized losses from
commutations, the effects of MBIA's nonperformance risk on its
derivative liabilities and the result of favorable movements in
spreads and pricing on collateral, partially offset by settlements
and claim payments.
Consolidated total revenues (losses) of $(1.557) million for the
year ended Dec. 31, 2011, included $2.8 billion of net losses on
insured derivatives compared with $769 million of net losses for
2010. The net losses on insured derivatives in 2011 principally
resulted from favorable changes in the market perception of MBIA
Corp.'s credit risk on its derivative liabilities, reduced
collateral pricing and collateral erosion, partially offset by the
reversal of unrealized losses from settlements prior to maturity
and terminations.
The Company's balance sheet at Dec. 31, 2012, showed
$21.724 billion in total assets, $18.530 billion in total
liabilities, and stockholders' equity of $3.194 billion.
A copy of the Form 10-K is available at http://is.gd/1LnLAW
* * *
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that MBIA Inc. conceded there is a "significant risk" that
insurance subsidiary MBIA Insurance Corp. will be placed in
rehabilitation or liquidation by New York insurance regulators.
The cost of credit-default swaps for the insurance company rose
3.4 percentage points to 43.8% upfront.
About MBIA Inc.
MBIA Inc.(NYSE: MBI), headquartered in Armonk, N.Y., is a holding
company whose subsidiaries provide financial guarantee insurance,
as well as related reinsurance, advisory and portfolio services,
for the public and structured finance markets, and asset
management advisory services. The Company services its clients
around the globe with offices in New York, Denver, San Francisco,
Paris, London, Madrid and Mexico City.
MEDIACOM LLC: Fitch Affirms 'B+' Issuer Default Ratings
-------------------------------------------------------
Fitch Ratings has affirmed the 'B+' Issuer Default Ratings (IDRs)
assigned to Mediacom LLC and Mediacom Broadband LLC. Both LLC and
Broadband are wholly owned subsidiaries of Mediacom Communications
Corporation. The Rating Outlook is Stable. As of Dec. 31, 2012,
Mediacom had approximately $3.5 billion of debt outstanding
including $1.5 billion at LLC and $1.9 billion at Broadband.
Key Rating Drivers
-- High leverage relative to peer group;
-- Sustainable free cash flow generation expected to reduce debt;
-- Looming 2015 scheduled maturities elevate refinancing risks;
-- Ratings accommodate weaker operating metrics.
Fitch believes that Mediacom's capital structure strategy remains
unchanged and focused on debt reduction and extending its maturity
profile. Total debt outstanding was approximately $3.5 billion
reflecting a modest 2.8% reduction when compared with year-end
2011 debt levels. Year-end 2012 leverage was 5.6x and 5.5x for LLC
and Broadband respectively on an LTM basis, which remains outside
of management's long-term leverage target of 5x. Fitch believes
that improvement of Mediacom's credit protection metrics will be
predicated on the amount of debt reduction achieved by the company
over the ratings horizon. Absent anticipated debt reduction,
leverage by year-end 2013 will not vary significantly from year-
end 2012 measures. However, Fitch expects LLC's leverage to drop
below 5.4x and Broadband's leverage to approach 5.2x by year-end
2013 based on Fitch's debt reduction assumptions.
$153 million of free cash flow (defined as cash flow from
operations less capital expenditures and dividends) during the
year-ended 2012 which is in line with last year. Based on stable
EBITDA margins and capital intensity going forward, Fitch
anticipates that both LLC and Broadband's free cash flow
generation will approximate 9% of revenues during the ratings
horizon.
Mediacom's liquidity position is sufficient given the current
rating and is primarily supported by expected free cash flow
generation and the aggregate available borrowing capacity from
subsidiary revolving credit facilities, which totaled
approximately $231.4 million as of year-end 2012. LLC's revolver
is scheduled to expire in December 2014 while Broadband's revolver
will expire in December 2016 (subject to certain exceptions).
The combined maturity schedule is favorable during 2013 and 2014
totaling $25 million and $92.25 million respectively. The 2014
maturity includes amounts currently outstanding on LLC's revolver
($67.25 million). However, over $1.3 billion of consolidated debt,
representing 38% of total debt, is scheduled to mature during
2015, elevating the refinancing risk inherent in the company's
credit profile. The refinancing risk is mitigated somewhat by the
company's demonstrated ability to access capital and bank markets.
Rating concerns center on the company's high leverage relative to
its peer group and other larger cable multiple system operators
(MSOs), a comparatively weaker subscriber clustering profile and
service penetration rates that lag behind industry leaders, and
Medicom's ability to maintain its competitive position relative to
the threat posed by the direct broadcast satellite (DBS)
operators. Fitch acknowledges potential growth and operating
profile enhancements that can be captured by increasing service
penetration levels as well as capitalizing on commercial revenue
growth potential. Business Services revenues expanded 17.3% and
28.7% at LLC and Broadband respectively during 2012. Business
Services revenues constitute 8.4% and 9.3% of LLC's and
Broadband's consolidated revenues, which is on par with other
cable MSOs.
Rating Sensitivities
Positive rating actions would be contemplated if leverage declines
below 5x, free cash flow generation strengthens, and the company
demonstrates progress in closing gaps relative to its industry
peers on service penetration rates and strategic bandwidth
initiatives. Fitch believes that negative rating actions would
likely coincide with a leveraging or shareholder-friendly
transaction that increases leverage beyond 6.5x without a clear
path to de-leverage, the adoption of a more aggressive financial
strategy, or a perceived weakening of Mediacom's competitive
position.
Fitch has affirmed the following ratings with a Stable Rating
Outlook:
Mediacom Broadband LLC
-- IDR at 'B+';
-- Senior unsecured 'B/RR5'.
Mediacom LLC
-- IDR at 'B+';
-- Senior unsecured at 'B/RR5'.
Mediacom Illinois LLC
Mediacom Arizona LLC
Mediacom Indiana LLC
Mediacom California LLC
Mediacom Minnesota LLC
Mediacom Delaware LLC
Mediacom Wisconsin LLC
Mediacom Southeast LLC
Mediacom Iowa LLC
Zylstra Communications Corporation
-- IDR at 'B+';
-- Senior secured at 'BB+/RR1'.
MCC Georgia, LLC
MCC Illinois, LLC
MCC Iowa, LLC
MCC Missouri, LLC
-- IDR at 'B+';
-- Senior secured at 'BB+/RR1'.
MEDICAL CARD: S&P Retains 'CCC' Rating on CreditWatch Developing
----------------------------------------------------------------
Standard & Poor's Ratings Services said that its 'CCC' long-term
counterparty credit rating on Medical Card System Inc. (MCS)
remains on CreditWatch with developing implications, where S&P
initially placed it on July 26, 2012. The 'B' long-term financial
strength and counterparty credit ratings on MCS' operating
companies, MCS Advantage Inc., MCS Life Insurance Co., and MCS
Health Management Options Inc., also remain on CreditWatch with
developing implications.
"The continuing CreditWatch reflects that improvement MCS has seen
in its financial profile through positive operating results in
2012, versus losses in 2011 and first-quarter 2012," said Standard
& Poor's credit analyst Neal Freedman. "This improvement resulted
from various corrective actions taken by the company's new senior
management team, which joined the company in December 2011 and
includes enhanced medical-management capabilities and an improved
financial infrastructure. Per our discussions with management, we
expect the company to conclude its negotiations with the lending
group regarding potential waivers or revisions to the credit
agreeement to avoid a liquidity event and to have audited year-end
2011 audited financial statements within the next 30 days."
"We could raise or lower the ratings on MCS and its operating
companies in connection with its lender negotiations,"
Mr. Freedman continued. "Improved operating performance and a
near-term successful lender negotiation could result in a one-
notch or more upgrade. Conversely, if lender negotiations prove
unsuccessful beyond the near term, we could lower the ratings by
one or more notches."
MESSER CONSTRUCTION: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------------
Debtor: Messer Construction Co., Inc.
P.O. Box 2211
Hereford, TX 79045
Bankruptcy Case No.: 13-20062
Chapter 11 Petition Date: February 26, 2013
Court: U.S. Bankruptcy Court
Northern District of Texas (Amarillo)
Judge: Robert L. Jones
Debtor's Counsel: Patrick Alan Swindell, Esq.
SWINDELL & ASSOCIATES, P.C.
1105 S. Taylor
Amarillo, TX 79101
Tel: (806) 374-7979
Fax: (806)374-1991
E-mail: amacourt@borenswindell.com
Scheduled Assets: $495,233
Scheduled Liabilities: $2,252,174
A copy of the Company's list of its 20 largest unsecured creditors
filed with the petition is available for free at:
http://bankrupt.com/misc/txnb13-20062.pdf
The petition was signed by Jacky Messer, owner.
MF GLOBAL: JPMorgan Faces Pivotal Hearing Over Plan
---------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that whether JPMorgan Chase Bank NA will be a fly in the
ointment on April 5 when the reorganization plan for MF Global
Holdings Ltd. comes up for approval may be largely decided at a
March 6 hearing in New York bankruptcy court.
According to the report, JPMorgan, as agent for lenders owed $1.2
billion, raised objections that resulted in modifications to the
disclosure statement explaining how the recovery by creditors of
subsidiary MF Global Finance USA Inc. could be increased as much
as 26 percentage points if some parent company claims against the
finance company were knocked out.
The report relates that JPMorgan wants to attack the validity of
$928 million in claims the parent company has against the finance
subsidiary. If the claims were eliminated, the recovery on the
bank's own claims against the finance company would be increased
because the universe of claims against the subsidiary would be
reduced by almost $1 billion.
The bank, the report relates, filed papers in February seeking the
right to prosecute the claims on behalf of the finance company.
JPMorgan says Louis Freeh, the MF Global parent's trustee,
consented. Mr. Freeh now says it's up the court to decide whether
JPMorgan or some other creditor should pursue the claims, or
whether they should be pursued at all.
Meanwhile, creditors who proposed the plan along with Mr. Freeh
arranged a March 6 hearing where they will ask the judge not to
decide whether JPMorgan can sue until after the plan is either
confirmed or not confirmed at an April 5 hearing. They say the
issue of a suit by the finance company will become moot because
the plan contains a settlement of the very same claims.
The report notes that the March 6 hearing may shed light on
whether the judge in some manner may allow prosecution of the
finance company's claims even if the plan is confirmed in April.
JPMorgan bases the potential claims on the idea that a loan
transaction two days before bankruptcy could have been structured
so the parent wouldn't have the $928 million claim against the
finance subsidiary.
The creditors' disclosure statement predicts a recovery of
13.4% to 39.1% for holders of $1.134 billion in unsecured claims
against the parent holding company. Bank lenders would have the
same recovery on their $1.15 billion claim against the holding
company. The predicted recovery is 14.7% to 34% for holders of
$1.19 billion in unsecured claims against the finance subsidiary,
one of the companies under the umbrella of the holding company
trustee. Bank lenders' claims against the finance subsidiary are
scheduled for the same percentage recovery on their $1.15 billion
claim.
The plan deals only with creditors of the MF Global holding
company, not with customers and creditors of the brokerage.
MICROVISION INC: Gets Nasdaq Listing Non-Compliance Notice
----------------------------------------------------------
MicroVision, Inc. on March 1 disclosed that it received a notice
on February 26, 2013, from The Nasdaq Stock Market advising the
company that for 30 consecutive business days preceding the date
of the notice the company was not in compliance with the
$50,000,000 minimum market value of listed securities required for
continued listing on The Nasdaq Global Market pursuant to Nasdaq's
listing requirements. In accordance with Nasdaq's listing rules,
the company has 180 calendar days, or until August 26, 2013, to
regain compliance with this requirement. This notification is
simply a notice of deficiency, not of imminent delisting, and has
no current effect on the listing or trading of MicroVision's
common stock on The Nasdaq Global Market.
During the 180 day compliance period, MicroVision can regain
compliance if the market value of its listed securities closes at
$50,000,000 or more for a minimum of 10 consecutive business days.
The company could also regain compliance with Nasdaq's continued
listing requirements by reporting stockholders' equity of $10
million or more. If the company does not regain compliance by
August 26, 2013, Nasdaq will notify the company that its
securities are subject to delisting.
The company outlined its business objectives for 2013 and 2012
business results in its recent earnings press release and related
conference call. The key objectives for the year included:
securing customer commitments under the company's licensing
business model, strengthening its supply chain to enable customers
to bring products to market and aggressively managing cash used in
operations. The company believes the best way to regain
compliance is to successfully execute on its strategy.
Redmond, Washington-based MicroVision, Inc., provides the PicoP(R)
display technology platform designed to enable next-generation
display and imaging products for consumer devices, vehicle
displays and wearable displays. The Company's patented PicoP
display technology combines a Micro-Electrical Mechanical Systems
(MEMS) scanning mirror with highly efficient laser light sources
to create vivid images with high contrast and brightness.
MONITOR GROUP: Carl Marks Completes Advisory Role in Sale
---------------------------------------------------------
Carl Marks Advisory Group LLC, a consulting and investment banking
advisor to middle market companies, has completed its advisory
role in Monitor Group LP's sale to Deloitte Consulting LLP.
Deloitte Consulting LLP acquired Monitor Group's U.S. practice,
and Monitor Group's practices in 14 countries outside the U.S.
were acquired by member firms of Deloitte Touche Tohmatsu Limited.
The transaction was completed in January following approval by the
U.S. Bankruptcy Court for the District of Delaware.
Carl Marks served as Monitor Group's financial, restructuring and
investment banking services advisor throughout the bankruptcy
process. The investment banking practice advised on all aspects
of the 363 sale auction and the restructuring practice advised on
other areas including preparing Debtor-in-Possession budgets,
monitoring cash flow, reporting to constituents, and assisting in
resolving contractual, employee and vendor-related issues. Ropes
& Gray LLP partners Ross Martin, James Wilton and Paul Van Houten
served as counsel to the debtor; their expertise and leadership
were instrumental to the successful completion of the sale.
"Combining two influential and globally-recognized professional
services companies is a complex and sensitive assignment under
normal circumstances," said Marc Pfefferle, Partner at Carl Marks
Advisory Group. "This particular deal highlights Carl Marks'
combined strengths of providing integrated transaction and
advisory services in complex and dynamic situations."
"We are hugely motivated by the opportunity to service clients
with our newly combined strengths," stated Bansi Nagji, President
of Monitor. "Together we are an effective force with distinctive
capabilities, and are deeply committed to helping our clients
create new value and achieve transformational growth."
Christopher Wu and Charles Boguslaski led the Carl Marks
investment banking team while Marc Pfefferle led its operational
restructuring team.
About Carl Marks
With offices in New York, Bedminster, N.J., and Charlotte, N.C.,
Carl Marks Advisory Group LLC -- http://www.carlmarks.com--
provides a wide array of investment banking and financial,
operational, real estate and healthcare advisory services to the
middle market, including mergers and acquisitions advice, sourcing
of capital, financial restructuring plans, strategic business
assessments, improvement plans and interim management.
Carl Marks Securities LLC, based in New York, assists its clients
in executing private placements of debt and equity. The firm is a
member of FINRA and SIPC.
About Monitor Company
Monitor Company Group LP -- http://www.monitor.com/-- is a global
consulting firm with 1,200 personnel in offices across 17
countries worldwide. Founded in 1983 by six entrepreneurs, and
headquartered in Cambridge, Massachusetts, Monitor advises for-
profit, sovereign, and non-profit clients on growing their
businesses and economies and furthering their charitable purposes.
Monitor and several affiliates filed for Chapter 11 bankruptcy
(Bankr. D. Del. Case Nos. 12-13042 to 12-13062) on Nov. 7, 2012.
Judge Hon. Christopher S. Sontchi presides over the case. Pepper
Hamilton LLP and Ropes & Gray LLP serve as the Debtors' counsel.
The financial advisor is Carl Marks Advisory Group LLC. Epiq
Bankruptcy Solutions, LLC is the claims and noticing agent.
The petitions were signed by Bansi Nagji, president.
Cole, Schotz, Meisel, Forman & Leonard, P.A., represents the
Committee of Unsecured Creditors as counsel.
Bank of America is represented in the case by Jinsoo Kim, Esq.,
and Timothy Graulich, Esq., at Davis Polk & Wardwell LLP; and Mark
D. Collins, Esq., at Richards Layton & Finger PA.
J. Gregory Milmoe, Esq., and Shana A. Elberg, Esq., at Skadden
Arps Slate Meagher & Flom LLP in New York; and Mark Chehi, Esq.,
and Christopher DiVirgilio, Esq., at Skadden Arps in Delaware,
represent Deloitte Consulting LLP.
Caltius Partners IV LP; Caltius Partners Executive IV, LP; and CP
IV Pass-Through (Monitor) LP are represented by John Sieger, Esq.,
at Katten Muchin Rosenman LLP.
Monitor's consolidated unaudited financial statements as of
June 30, 2012, which include the assets and liabilities of non-
Debtor foreign subsidiaries, reflected total assets of roughly
$202 million (including $93 million in current assets) and total
liabilities of roughly $200 million.
Monitor filed for bankruptcy to sell substantially all of their
businesses and assets to Deloitte Consulting LLP, a Delaware
registered limited liability partnership and DCSH Limited, a UK
company limited by shares, subject to higher or otherwise better
offers. The base purchase price set forth in the Stalking Horse
Agreement is $116.2 million, plus (i) assumption of certain
liabilities and (ii) certain cure costs for assumed contracts.
The Stalking Horse Agreement provides for the Stalking Horse
Bidder to receive a combined breakup fee and expense reimbursement
of $4 million.
The Debtors propose to hold an auction on Nov. 28, 2012, at the
offices of the Sellers' counsel, Ropes & Gray LLP in New York.
Closing of the deal must occur by the earlier of (i) 30 days
following entry of the Sale Order and (ii) Feb. 28, 2013.
MRB L.L.C.: Voluntary Chapter 11 Case Summary
---------------------------------------------
Debtor: MRB, L.L.C.
2030 West McNab Road
Fort Lauderdale, FL 33309
Bankruptcy Case No.: 13-14310
Chapter 11 Petition Date: February 26, 2013
Court: U.S. Bankruptcy Court
Southern District of Florida (Fort Lauderdale)
Judge: Raymond B. Ray
Debtor's Counsel: Brett M. Amron, Esq.
BAST AMRON, LLP
1 SE 3 Avenue #1440
Miami, FL 33131
Tel: (305) 379-7904
Fax: (305) 379-7905
E-mail: bamron@bastamron.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Company did not file a list of creditors together with its
petition.
The petition was signed by Ricki Robinson, managing director.
MSP HOSPITALITY: Updated Case Summary & Creditors' Lists
--------------------------------------------------------
Lead Debtor: MSP Hospitality, LLC
dba Days Inn Morgan City
11 Cobalt Drive
Dana Point, CA 92629
Bankruptcy Case No.: 13-11700
Chapter 11 Petition Date: February 25, 2013
Court: United States Bankruptcy Court
Central District Of California (Santa Ana)
Judge: Catherine E. Bauer
Debtor's Counsel: Robert P. Goe, Esq.
GOE & FORSYTHE, LLP
18101 Von Karman, Ste 510
Irvine, CA 92612
Tel: (949) 798-2460
Fax: (949) 955-9437
E-mail: kmurphy@goeforlaw.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
Affiliates that simultaneously filed separate Chapter 11
petitions:
Debtor Case No.
------ --------
Nederland Hospitality, LLC 13-11701
dba Candlewood Suites
Assets: $1,000,001 to $10,000,000
Debts: $1,000,001 to $10,000,000
MAP Hospitality, LLC
The petitions were signed by Kevin Prendiville, managing member.
A. A copy of MSP Hospitality's list of its six largest
unsecured creditors filed together with the petition is available
for free at http://bankrupt.com/misc/cacb13-11700.pdf
B. A copy of Nederland Hospitality's list of its six largest
unsecured creditors filed together with the petition is available
for free at http://bankrupt.com/misc/cacb13-11701.pdf
NAVISTAR INTERNATIONAL: Web Cast on March 7 to Discuss Q1 Results
-----------------------------------------------------------------
Navistar International Corporation will present via live web cast
its fiscal 2013 first quarter financial results on Thursday,
March 7th. A live web cast is scheduled at approximately 9:00
a.m. Speakers on the web cast will include Lewis Campbell,
executive chairman and chief executive officer, A. J. Cederoth,
executive vice president and chief financial officer, and other
company leaders.
The web cast can be accessed through a link on the investor
relations page of Company's Web site at
http://www.navistar.com/navistar/investors/webcasts. Investors
are advised to log on to the Web site at least 15 minutes prior to
the start of the web cast to allow sufficient time for downloading
any necessary software. The web cast will be available for replay
at the same address approximately three hours following its
conclusion, and will remain available for a period of 10 days.
About Navistar International
Navistar International Corporation (NYSE: NAV) --
http://www.Navistar.com/-- is a holding company whose
subsidiaries and affiliates subsidiaries produce International(R)
brand commercial and military trucks, MaxxForce(R) brand diesel
engines, IC Bus(TM) brand school and commercial buses, Monaco RV
brands of recreational vehicles, and Workhorse(R) brand chassis
for motor homes and step vans. It also is a private-label
designer and manufacturer of diesel engines for the pickup truck,
van and SUV markets. The Company also provides truck and diesel
engine parts and service. Another affiliate offers financing
services.
Navistar incurred a net loss attributable to the Company of $3.01
billion for the year ended Oct. 31, 2012, compared with net income
attributable to the Company of $1.72 billion during the prior
year.
The Company's balance sheet at Oct. 31, 2012, showed $9.10 billion
in total assets, $12.36 billion in total liabilities and a $3.26
billion total stockholders' deficit.
* * *
In the Aug. 3, 2012, edition of the TCR, Moody's Investors Service
lowered Navistar International Corporation's Corporate Family
Rating (CFR), Probability of Default Rating (PDR), and senior note
rating to B2 from B1. The downgrade of Navistar's ratings
reflects the significant challenges the company will face during
the next eighteen months in re-establishing the profitability and
competitiveness of its US and Canadian truck operations in light
of the failure to achieve EPA certification of its EGR emissions
technology, the significant reductions in military revenues and
substantially higher engine warranty reserves.
As reported by the TCR on June 13, 2012, Standard & Poor's Ratings
Services lowered its ratings on Navistar International Corp.,
including the corporate credit rating to 'B+', from 'BB-'. "The
downgrade and CreditWatch placement reflect the company's
operational and financial setbacks in recent months," said
Standard & Poor's credit analyst Sol Samson.
As reported by the TCR on Jan. 24, 2013, Fitch Ratings has
affirmed the Issuer Default Ratings (IDR) for Navistar
International Corporation and Navistar Financial Corporation at
'CCC' and removed the Negative Outlook on the ratings. The
removal reflects Fitch's view that immediate concerns about
liquidity have lessened, although liquidity remains an important
rating consideration as NAV implements its selective catalytic
reduction (SCR) engine strategy. Other rating concerns are already
incorporated in the 'CCC' rating.
NATIVE WHOLESALE: Can Post Collateral to Secure Custom Bonds
------------------------------------------------------------
The Bankruptcy Court has granted Native Wholesale Supply Company
authorization to post the released collateral to secure the Letter
of Credits to be issued by the financial institutions to the new
surety replacing Capital Indemnity Corporation, or alternatively
to post the released collateral directly to the new surety that
will be replacing CIC.
As reported in the TCR on Jan. 3, 2013, the new customs bond is to
be issued by Avalon Risk Management which replaces the customs
bond issued by CIC which expired on Dec. 9, 2012. The Debtor
intends to secure the new customs bond obligations with the
collateral securing its obligations under the CIC customs bonds.
According to papers filed with the Court, with its Chapter 11 case
poised for dismissal due to the Debtor having negotiated an
acceptable settlement with its largest creditor, the U.S.
Department of Agriculture, the Debtor must now insure a seamless
transition from one bonding company (CIC) to the other
(Avalon) and obtain Court authority to fully collateralize its new
bond.
Capitol currently holds $11.3 million of collateral to secure the
Debtor's indemnity obligations. The collateral consists of: (i)
Debtor's cash collateral of $1.1 million pursuant to a Security
Agreement between CIC and the Debtor dated April 23, 2010;
(ii) a Clean Irrevocable Letter of Credit No. 10117/S24622, issued
by Royal Bank of Canada on Dec. 16, 2009, in the principal amount
of $8.2 million which was established in favor of Capital; and
(iii) a Letter of Credit issued by M&T in the principal amount of
$2,000,000 secured by NWS funds. As ordered by the Court on
November 2, upon termination of Capitol's liabilities under its
customs bonds, it is required to release the collateral to NWS.
About Native Wholesale
Native Wholesale Supply Company is engaged in the business of
importing cigarettes and other tobacco products from Canada and
selling them to third parties within the United States. It
purchases the products from Grand River Enterprises Six Nations,
Ltd., a Canadian corporation and the Debtor's only secured
creditor. Native is an entity organized under the Sac and Fox
Nation and has its principal place of business at 10955 Logan Road
in Perrysburg, New York.
Native filed for Chapter 11 bankruptcy (Bankr. W.D.N.Y. Case No.
11-14009) on Nov. 21, 2011. The Chapter 11 filing was triggered
to resolve an ongoing dispute with the United States government
regarding up to $43 million in assessments made by the government
against the Debtor pursuant to the Fair and Equitable Tobacco
Reform Act of 2004 and the Tobacco Transition Payment Program and
to restructure the terms of payment of any obligation determined
to be owing by the Debtor to the U.S. under the Disputed
Assessment. The issues pertaining to the Disputed Assessment
resulted in two lawsuits, subsequently consolidated, now pending
in the Federal District Court.
Robert J. Feldman, Esq., and Janet G. Burhyte, Esq., at Gross,
Shuman, Brizdle & Gilfillan, P.C., in Buffalo, N.Y., represent the
Debtor as counsel.
The Company disclosed $30,022,315 in assets and $70,590,564 in
liabilities as of the Chapter 11 filing.
The States of California, New Mexico, Oklahoma and Idaho have
appeared in the case and are represented by Garry M. Graber, Esq.,
at Hodgson Russ LLP.
No trustee, examiner or creditors' committee has been appointed in
the case.
NEW ENERGY CORP: Ethanol Plant Sale Approved for $2.5 Million
-------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that U.S. Bankruptcy Judge Harry C. Dees Jr. ruled on
Feb. 27 that at the auction where New Energy Corp. sold its 100
million gallon-a-year ethanol plant near South Bend, Indiana,
there was no collusive bidding when two buyers joined together to
bid on the facility.
According to the report, the successful bid of $2.5 million was
made by a joint venture between Maynards Industries (1991) Inc.
and Biditup Auctions Worldwide Inc. A competing bidder, Natural
Chem Holdings LLC, contended that the two winners initially bid
separately and against everyone else. By joining, the auction was
tainted, Natural Chem said.
The report relates that Judge Dees rejected the argument, taking
testimony from witnesses and finding there "was nothing improper
or collusive" in the auction. The auction was "transparent" and
the combination was "announced to all," Dees said.
Judge Dees formally approved the sale in his Feb. 27 ruling.
The plant has $40.4 million in secured debt, with $33.3 million
owing to the U.S. Energy Department on a term loan. The Energy
Department demanded a Chapter 11 sale after violation of a
forbearance agreement.
About New Energy Corp.
New Energy Corp. filed a Chapter 11 petition (Bankr. N.D. Ind.
Case No. 12-33866) in South Bend, Indiana, on Nov. 9, 2012.
The Debtor's ethanol facility is the first large-scale Greenfield
ethanol plant constructed in the U.S. and is capable of producing
100 million gallons of ethanol per year. The Debtors has operated
continuously, without interruption since 1984. The Debtor's
operations generated over $280 million in revenue in 2011.
At historical production rates, the Company employs 85 to 90
people to run operations, power the plant and to administer the
business operations of the Debtor.
Jeffrey J. Graham, Esq., at Taft Stettinius & Hollister LLP, in
Indianapolis, serves as counsel. The Debtor estimated assets of
at least $10 million and liabilities of at least $50 million.
NOVASTAR MORTGAGE: 2nd Cir. Reverses MBS Class Action Ruling
------------------------------------------------------------
Cohen Milstein Sellers & Toll PLLC disclosed that the Second
Circuit Court of Appeals on March 1 reversed a lower court's
dismissal of securities claims brought by investors who purchased
in a $1.32 billion offering of mortgage-backed securities sold by
investment banking defendants RBS Greenwich Capital, Wachovia
Capital Markets Inc. and Deustche Bank Securities Inc., according
to Cohen Milstein Sellers & Toll PLLC, attorneys for the lead
plaintiff in New Jersey Carpenters Health Fund v. NovaStar
Mortgage, Inc., et al.
The ruling also paves the way for the potential prosecution of
claims arising from five other mortgage-backed securities
offerings sold by the same investment banking defendants totaling
an additional $6.4 billion.
"We are gratified that the Second Circuit agreed with us that the
dismissal of the case against the investment banking and other
defendants should be reversed and that the case should be allowed
to proceed on behalf of the investors," said plaintiffs lead
counsel Joel P. Laitman, of Cohen Milstein Sellers & Toll PLLC.
The investment banking defendants underwrote and sold to the lead
plaintiff and the Class over $7.75 billion in mortgage-backed
securities in six offerings between June 22, 2006 and May 25, 2007
where the underlying mortgages were originated by NovaStar. Soon
after issuance of the certificates, and as a result of massive
increases borrower delinquency, foreclosure, repossession and
bankruptcy involving the mortgage loans underlying the
certificates, the value of the certificates collapsed. The
lawsuit alleges that the offering documents contained numerous
misstatements and omissions of fact in violation of the Securities
Act.
In overturning the March 2011 U.S. District Court, Southern
District Court of New York, dismissal of the case against
NovaStar, judges for the Second Court wrote: "We hold that the
allegations in the complaint -- principally, that a
disproportionately high number of the mortgages in a security
defaulted, that rating agencies downgraded the security's ratings
after changing their methodologies to account for lax
underwriting, and that prior employees of the relevant underwriter
had attested to systematic disregard of underwriting standards--
state a plausible claim that the offering documents for the
security misstated the applicable underwriting standards in
violation of . . . the Securities Act of 1933."
In addition to the investment banking defendants RBS Securities,
Inc., and Greenwich Capital Markets, Inc., (dba RBS Greenwich
Capital), Deutsche Bank Securities, Inc., and Wachovia Securities
LLC, the defendants also include NovaStar Mortgage, Inc.("NMI's"),
NMI's wholly-owned subsidiary NovaStar Mortgage Funding
Corporation (NMFC); and certain officers and directors of NMFC.
In addition to Joel P. Laitman, the plaintiffs are represented by
Christopher Lometti, Michael Eisenkraft, and Daniel B. Rehns, of
Cohen Milstein Sellers & Toll PLLC.
For more information about New Jersey Carpenters Health Fund v.
NovaStar Mortgage, Inc., et al. or a copy of the Second Court
decision, visit:
http://www.cohenmilstein.com/cases/171/novastar-mbs-litigation
Kansas City, Missouri-based NovaStar Mortgage, Inc. --
http://www.novastarmortgage.com/-- is a finance company that
originates, purchases, securitizes, sells and invests in loans and
mortgage-backed securities.
NUTWOOD AVENUE: Case Summary & Unsecured Creditor
-------------------------------------------------
Debtor: Nutwood Avenue, LLC
10100 Empyrean Way, Suite 202
Los Angeles, CA 90067
Bankruptcy Case No.: 13-14865
Chapter 11 Petition Date: February 25, 2013
Court: United States Bankruptcy Court
Central District of California (Los Angeles)
Debtor's Counsel: John Habashy, Esq.
THE HABASHY LAW FIRM
300 S Grand Ave., Ste. 3900
Los Angeles, CA 90071
Tel: (213) 223-5900
Fax: (888) 373-2107
E-mail: calendar.hlf@gmail.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
In its list of 20 largest unsecured creditors, the Company placed
only one entry:
Entity Nature of Claim Claim Amount
------ --------------- ------------
TomatoBank, N.A. $2,425,228
1420 E. Valley Blvd.
Alhambra, CA 91801
The petition was signed by Atabak Youssefzadeh, manager.
NUVEEN INVESTMENTS: S&P Rates $2.6BB Tranche A Loan Due 2017 'B'
----------------------------------------------------------------
Standard & Poor's Ratings Services said it has assigned its 'B'
senior secured debt rating to Nuveen Investments Inc.'s
$2.6 billion tranche A first-lien term loan due 2017.
Nuveen will use the proceeds from the new term loan to repay all
of the existing first-lien term loans. Although the transaction
will reduce the company's debt expense and improve its cash flows,
Nuveen's extremely heavy debt burden and weak credit metrics
remain the key negative factor for the ratings. As of Dec. 31,
2012, the company had $4.5 billion of debt outstanding, including
$2.6 billion of senior secured loans and $1.9 billion of senior
unsecured debt. S&P's 'B-' issuer credit rating reflects its
opinion that the company has a favorable business risk profile
that its very weak financial condition counterbalances.
RATINGS LIST
Nuveen Investments Inc.
Issuer Credit Rating B-/Stable/--
New Rating
Nuveen Investments Inc.
Senior Secured
$2.6 bil. notes due 2017 B
Recovery Rating 2
ON SEMICONDUCTOR: S&P Raises CCR to 'BB+'; Outlook Stable
---------------------------------------------------------
Standard & Poor's Rating Services said it raised its corporate
credit rating on Phoenix-based ON Semiconductor Corp. to 'BB+'
from 'BB'. The outlook is stable.
At the same time, S&P raised the corporate credit rating on
subsidiary Semiconductor Components Industries, LLC to 'BB+' from
'BB'. The outlook is stable.
In addition, S&P raised its issue-level rating on the company's
$484 million convertible senior subordinated notes due Dec. 15,
2026 to 'BB+' from 'BB' as a result of the upgrade of the
corporate credit rating. S&P also revised the recovery rating, to
'3' from '4', indicating its expectation of meaningful (50% to
70%) recovery for the note holders in the event of a payment
default. This reflects the lower amount of debt in the capital
structure, improving recovery prospect on the subordinated notes
significantly. However, for issuers in the 'BB' category, the
recovery rating on unsecured debt is capped at a '3' to reflect
the risk of impairment in recovery due to issuance of additional
senior or pari-passu debt prior to default.
The rating action reflects S&P's revision of ON's financial risk
profile to "intermediate" from "significant". "We believe ON is
committed to a moderate financial policy, as evidenced by
continued debt reduction and maintenance of "adequate" liquidity,"
said Standard & Poor's credit analyst Andrew Chang.
The current rating incorporates S&P's assumption that tepid end-
market demand and SANYO-related headwinds are likely to reduce
revenues in fiscal 2013. Despite this, S&P anticipates that ON
will be able to sustain adjusted leverage at or below the mid-2x
area through the cycle while generating positive cash flow. S&P
considers ON's business risk profile "fair" and its financial risk
profile "intermediate."
Standard & Poor's views ON's business risk profile as "fair." The
company is a vertically integrated manufacturer of logic, power,
and analog integrated circuits and discrete semiconductors, with
nearly 40,000 products and 37 billion units shipped in 2012. The
analog and discrete markets remain highly fragmented, but ON
maintains leadership in certain submarkets, especially in high
performance, energy-efficient products.
ON faced significant operational challenges in fiscal 2012. The
confluence of weak end-market demand, the tsunami in Japan, and
flooding in Thailand severely hurt top line growth and overall
profitability in 2012 and delayed ON's profitability goals for the
SANYO division in particular. Coupled with above-average capital
spending, ON generated nominal free operating cash flow. In 2013,
S&P expects revenues to decline low- to mid-single digits as
continued weak end-market demand in the first half of 2013 is
partly offset by good growth in the automotive and wireless
segments and a gradual end-market recovery in the second half of
2013.
The outlook is stable, supported by ON's intermediate financial
risk profile and adequate liquidity profile. The operating
environment will likely remain challenged through the first half
of 2013, but S&P expects gradual improvement in the second half of
2013, resulting in improved profitability, and coupled with lower
capital spending, good free cash flow generation for the full
year. S&P also anticipates that the ratio of debt to adjusted
EBITDA will be maintained at or below mid-2x through a more
typical industry cycle.
S&P would consider a lower rating if a prolonged industry downturn
leads to reduced profitability, or if the company pursues a more
aggressive financial policy via a sizable debt-financed
acquisition or shareholder returns, such that leverage exceeds the
mid-2x level on a sustained basis. An upgrade is unlikely in the
intermediate term given our current assessment of ON's business
risk profile.
ORMET CORPORATION: Meeting to Form Creditors' Panel on March 7
--------------------------------------------------------------
Roberta A. DeAngelis, United States Trustee for Region 3, will
hold an organizational meeting on March 7, 2013, at 1:00 p.m. in
the bankruptcy case of Ormet Corporation. The meeting will be
held at:
J. Caleb Boggs Federal Building
844 King Street, Room 5209
Wilmington, DE 19801
The sole purpose of the meeting will be to form a committee or
committees of unsecured creditors in the Debtors' cases.
The organizational meeting is not the meeting of creditors
pursuant to Section 341 of the Bankruptcy Code. A representative
of the Debtor, however, may attend the Organizational Meeting, and
provide background information regarding the bankruptcy cases.
To increase participation in the Chapter 11 proceeding, Section
1102 of the Bankruptcy Code requires that the United States
Trustee appoint a committee of unsecured creditors as soon as
practicable. The Committee ordinarily consists of the persons,
willing to serve, that hold the seven largest unsecured claims
against the debtor of the kinds represented on the committee.
Section 1103 of the Bankruptcy Code provides that the Committee
may consult with the debtor, investigate the debtor and its
business operations and participate in the formulation of a plan
of reorganization. The Committee may also perform other services
as are in the interests of the unsecured creditors whom it
represents.
About Ormet Corporation
Headquartered in Wheeling, West Virginia, Ormet Corporation --
http://www.ormet.com/-- is a fully integrated aluminum
manufacturer, providing primary metal, extrusion and thixotropic
billet, foil and flat rolled sheet and other products. The
Company and its debtor-affiliates filed for chapter 11 protection
on January 30, 2004 (Bankr. S.D. Ohio Case No. 04-51255). Adam C.
Harris, Esq., in New York, represents the Debtors in their
restructuring efforts. When the Company filed for bankruptcy
protection, it listed $50 million to $100 million in estimated
assets and more than $100 million in total debts. The Company's
chapter 11 plan was confirmed by the Court in April 2005. Under
the confirmed Plan, Ormet was authorized to break labor contracts,
which resulted in conflicts with the United Steelworkers of
America.
OVERSEAS SHIPHOLDING: Taps PwC as Accountant and Tax Advisor
------------------------------------------------------------
Overseas Shipholding Group, Inc., et al., ask the U.S. Bankruptcy
Court for the District of Delaware for permission to employ
PricewaterhouseCoopers LLP as independent auditor, accountant and
tax advisor.
The Debtors relate that in addition to the application, they
intend to file a separate application for the retention of
Deloitte Tax LLP to provide certain tax services to the Debtors.
The Debtors face a considerable array of tax issues in the Chapter
11 cases, including the International Tax Issues, in addition to
the other burdens placed upon their internal accounting staff, and
the Debtors have minimal internal staff who are able to be
dedicated to tax issues.
The Debtors concluded that with the primary role to be played by
PwC in its role as auditor and accountant to the Debtors to
address the restatement issues and other accounting projects,
Deloitte will be retained to provide certain tax compliance and
other services to the Debtors, with PwC providing certain tax
transition services in light of its familiarity with the Debtors'
business. PwC and Deloitte intend to work cooperatively to
provide effective and cost-efficient representation for the
Debtors in the Chapter 11 cases without duplication of effort.
PwC has been providing auditing services in connection with the
consolidated financial statements of the Debtors at Dec. 31, 2012,
and for the year then ending, including reviews of the unaudited
consolidated quarterly financial information for each of the first
three quarters in the year ending Dec. 31, 2012. PwC intends to
continue to provide the services.
The 2012 Audit Services are not compensated on an hourly basis.
Rather, PwC provides the services on a fixed-fee basis, including
the $950,000 fixed fee under the Initial Audit Engagement Letter,
of which approximately $300,000 has yet to be paid by the
Debtors.
Subject to the provisions and Court orders, PwC will seek payment
of $300,000 for the 2012 Audit Services on these basis pursuant to
the fee structure:
Date Fee Amount
---- ----------
Jan. 31, 2013 $150,000
Feb. 28, 2013 $150,000
The hourly rates of PwC professionals are:
Incremental Services ? Hourly Billing Rate
------------------------------------------
Tax Tax
Level Fresh Start Accounting Consulting Compliance
---- ----------- ---------- ---------- ----------
National Office N/A $850-$995 $885-$950 N/A
Partner/Principal $820-$850 $810-$870 $640-$700 $576-$630
Managing Director N/A n/a $550-$610 $495-$550
Director $575-$630 $575-$725 $520-$590 $465-$530
Manager $450-$495 $400-$575 $405-$470 $365-$425
Senior Associate $350-$400 $260-$440 $315-$375 $280-$340
Associate N/A $150-$400 $220-$255 $195-$230
To the best of the Debtors' knowledge, PwC is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
A hearing on March 5, 2013 at 9:30 a.m., has been set.
About Overseas Shipholding
Overseas Shipholding Group, Inc., headquartered in New York, 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 owns or operates 111 vessels that
transport oil and petroleum products throughout the world.
Overseas Shipholding Group and 180 affiliates filed voluntary
Chapter 11 petitions (Bankr. D. Del. Lead Case No. 12-20000) on
Nov. 14, 2012, disclosing $4.15 billion in assets and $2.67
billion in liabilities. 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. Kurtzman
Carson Consultants LLC is the claims and notice agent.
The Export-Import Bank of China, owed $312 million used for the
construction of five tankers, is represented by Louis R. Strubeck,
Jr., Esq., and Kristian W. Gluck, Esq., at Fulbright & Jaworski
LLP in Dallas; David L. Barrack, Esq., and Beret Flom, Esq., at
Fulbright & Jaworski in New York; and John Knight, Esq., and
Christopher Samis, Esq., at Richards Layton & Finger PA. Chilmark
Partners, LLC serves as financial and restructuring advisor.
Akin Gump Strauss Hauer & Feld LLP, and Pepper Hamilton LLP, serve
as co-counsel to the official committee of unsecured creditors.
FTI Consulting, Inc., is the financial advisor and Houlihan Lokey
Capital, Inc., is the investment banker.
OVERSEAS SHIPHOLDING: Seeks Worker Bonuses, CEO Raise
-----------------------------------------------------
Jacqueline Palank at Daily Bankruptcy Review reports Overseas
Shipholding Group Inc. wants to pay up to $12.2 million in special
bonuses to about 200 workers who will help it reorganize, and it
expects to pay another $18 million this year to workers and
executives alike under its normal annual-bonus plan.
About Overseas Shipholding
Overseas Shipholding Group, Inc., headquartered in New York, 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 owns or operates 111 vessels that
transport oil and petroleum products throughout the world.
Overseas Shipholding Group and 180 affiliates filed voluntary
Chapter 11 petitions (Bankr. D. Del. Lead Case No. 12-20000) on
Nov. 14, 2012, disclosing $4.15 billion in assets and $2.67
billion in liabilities. 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. Kurtzman
Carson Consultants LLC is the claims and notice agent.
The Export-Import Bank of China, owed $312 million used for the
construction of five tankers, is represented by Louis R. Strubeck,
Jr., Esq., and Kristian W. Gluck, Esq., at Fulbright & Jaworski
LLP in Dallas; David L. Barrack, Esq., and Beret Flom, Esq., at
Fulbright & Jaworski in New York; and John Knight, Esq., and
Christopher Samis, Esq., at Richards Layton & Finger PA. Chilmark
Partners, LLC serves as financial and restructuring advisor.
Akin Gump Strauss Hauer & Feld LLP, and Pepper Hamilton LLP, serve
as co-counsel to the official committee of unsecured creditors.
FTI Consulting, Inc., is the financial advisor and Houlihan Lokey
Capital, Inc., is the investment banker.
OVERSEAS SHIPHOLDING: Keeps Lease of 3 Capital Product Tankers
--------------------------------------------------------------
Capital Product Partners L.P. has reached a conditional agreement
with Overseas Shipholding Group Inc. and certain of OSG's
subsidiaries regarding the long term bareboat charters of three of
its product tanker vessels.
On November 14, 2012, OSG made a voluntary filing for relief under
Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy
Court for the District of Delaware, and it is currently subject to
bankruptcy proceedings. CPLP had three IMO II/III
Chemical/Product tankers (M/T Alexandros II, M/T Aristotelis II
and M/T Aris II, all built in 2008 by STX Offshore & Shipbuilding
Co. Ltd.) with long term bareboat charters to subsidiaries of OSG.
These bareboat charters had scheduled terminations in February,
July and September of 2018, respectively, and had rates ($13,000
per day) that are substantially above current market rates.
CPLP has conditionally agreed to enter into new charters with OSG
on substantially the same terms as the prior charters but at a
bareboat rate of $6,250 per day. OSG has the option of extending
the employment of each vessel following the completion of the
bareboat charters for an additional two years on a time chartered
basis at a rate of $16,500 per day. The new charters remain
subject to approval by OSG's board of directors. As part of its
bankruptcy proceedings, OSG has also filed a motion seeking court
approval of the new charters and court approval to "reject" the
existing bareboat charters pursuant to the Bankruptcy Code. OSG's
motion is scheduled to be heard by the Bankruptcy Court on
March 21, 2013. Under the terms of the agreement between CPLP and
OSG, the new charters, if approved, will be effective
retroactively as of March 1, 2013 (provided that in the case of
the M/T Alexandros II, which was delivered back to CPLP on January
22, 2013, no payment and guarantee obligations shall arise prior
to the completion of its drydock and re-delivery to OSG, which is
expected to take place between March 1 and May 15, 2013). If OSG
and its subsidiaries receive court approval to reject the existing
charters, the existing charters will be deemed "rejected" as of
March 1, 2013. Rejection of each charter constitutes a material
breach of such charter, and CPLP is reserving its rights to make
claims as a result of this breach for the difference between the
reduced amount of the new charters and the amount due under each
of the existing charters. No assurance can be given that OSG's
board of directors will approve the new charters, that the
Bankruptcy Court will approve any agreement or arrangement entered
into between us and OSG, or that we will be successful in pursuing
our claims in the bankruptcy proceedings.
About Capital Product Partners
Capital Product Partners L.P. -- http://www.capitalpplp.com-- is
a Marshall Islands master limited partnership. It is an
international owner of a modern tanker, container and dry bulk
vessels. The Partnership currently owns 25 vessels, including
four Suezmax crude oil tankers, 18 modern MR (Medium Range)
product tankers, two post panamax container vessels and one
Capesize bulk carrier. All of its vessels are under period
charters to BP Shipping Limited, Overseas Shipholding Group,
Petrobras, A.P. Moller-Maersk A.S., Arrendadora Ocean Mexicana,
S.A. de C.V., Subtec S.A. de C.V., Cosco Bulk Carrier Co. Ltd. and
Capital Maritime & Trading Corp.
About Overseas Shipholding
Overseas Shipholding Group, Inc., headquartered in New York, 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 owns or operates 111 vessels that
transport oil and petroleum products throughout the world.
Overseas Shipholding Group and 180 affiliates filed voluntary
Chapter 11 petitions (Bankr. D. Del. Lead Case No. 12-20000) on
Nov. 14, 2012, disclosing $4.15 billion in assets and $2.67
billion in liabilities. 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. Kurtzman
Carson Consultants LLC is the claims and notice agent.
The Export-Import Bank of China, owed $312 million used for the
construction of five tankers, is represented by Louis R. Strubeck,
Jr., Esq., and Kristian W. Gluck, Esq., at Fulbright & Jaworski
LLP in Dallas; David L. Barrack, Esq., and Beret Flom, Esq., at
Fulbright & Jaworski in New York; and John Knight, Esq., and
Christopher Samis, Esq., at Richards Layton & Finger PA. Chilmark
Partners, LLC serves as financial and restructuring advisor.
Akin Gump Strauss Hauer & Feld LLP, and Pepper Hamilton LLP, serve
as co-counsel to the official committee of unsecured creditors.
FTI Consulting, Inc., is the financial advisor and Houlihan Lokey
Capital, Inc., is the investment banker.
OXFORD PROPERTY: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Oxford Property Services, Inc.
333 Meadowlands Parkway, 1st Floor
Secaucus, NJ 07094
Bankruptcy Case No.: 13-13820
Chapter 11 Petition Date: February 26, 2013
Court: U.S. Bankruptcy Court
District of New Jersey (Newark)
Judge: Morris Stern
Debtor's Counsel: Warren A. Usatine, Esq.
COLE, SCHOTZ, MEISEL, FORMAN & LEONARD, P.A.
25 Main Street
P.O. Box 800
Hackensack, NJ 07602-0800
Tel: (201) 489-3000
E-mail: wusatine@coleschotz.com
Estimated Assets: $10,000,001 to $50,000,000
Estimated Debts: $10,000,001 to $50,000,000
The petition was signed by Kenneth P. Martin, treasurer
Affiliates that simultaneously filed for Chapter 11:
Debtor Case No.
------ --------
Oxford Building Services, Inc. 13-13821
Assets: $1,000,001 to $10,000,000
Debts: $1,000,001 to $10,000,000
Origin PR LLC 13-13824
A. A copy of Oxford Building Services' list of its 20 largest
unsecured creditors filed with the petition is available for free
at http://bankrupt.com/misc/njb13-13821.pdf
B. Oxford Property Services' List of Its 20 Largest Unsecured
Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
IPC International Corporation -- $419,739
2111 Waukegan Road
Bannockburn, IL 60015
Brown Brothers Asphalt & Concrete -- $417,268
23 Inverness Way East, Suite 120
Englewood, CO 80112
Cunningham Paving -- $285,000
20814 Aurora Road
Cleveland, OH 44146
Valley Crest Landscape - GA/AL -- $267,983
24151 Ventura Boulevard
Calabasas, CA 91302
Barone Enterprise, Inc. -- $248,669
Interstate Cleaning Corporation -- $223,859
Garden State Sealing -- $214,096
All Sweep, Inc. -- $214,046
Professional Paving & -- $202,491
Concrete Co Inc.
Twin City Outdoor Services -- $199,675
Girard Environmental Services -- $193,016
Kai Total Pavement Management -- $183,772
Property Maintenance Solutions, LLC-- $168,680
Ace Asphalt of Arizona -- $162,500
Rodriguez Painting & Carpentry -- $156,930
Elite Sweeping ? NC -- $140,238
Greenscape Landscape ? PA -- $131,867
Universal Protection Service -- $127,839
Allied Construction, Inc. -- $127,807
Allied Barton Security -- $121,604
PARKWAY PROPERTIES: Section 341(a) Meeting Scheduled for March 22
-----------------------------------------------------------------
A meeting of creditors in the bankruptcy case of Parkway
Properties, LLC, will be held on March 22, 2013, at 9:00 a.m. at
341 Meeting of Creditors (Rm 105), FMJ Fed. The Company's
creditors have until May 21, 2013, to file their proofs of claim.
This is the first meeting of creditors required under Section
341(a) of the Bankruptcy Code in all bankruptcy cases.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Parkway Properties, LLC, filed a Chapter 11 petition (Bankr. M.D.
Ala. Case No. 13-30461) on Feb. 22, 2013. The petition was signed
by Joe B. Crosby as manager. Judge Dwight H. Williams, Jr.,
presides over the case. The Debtor's scheduled assets were
$11,255,845 and scheduled liabilities were $9,222,364. The Debtor
is represented by Lorren B. Jackson, Esq., at Wilson & Jackson,
LLC, in Montgomery, Alabama.
PATRIOT COAL: Court OKs Appointment of Non-Union Retiree Committee
------------------------------------------------------------------
The Bankruptcy Court has approved the motion of Patriot Coal
Corporation's non-union retiree and creditor Harold's motion for
the appointment of an official non-union retiree committee.
The scope of the Retiree Committee (and its counsel) will be
limited to addressing the Debtors' factual and legal assertions
with respect to the Debtors' purported right, under contract and
applicable non-bankruptcy law, of unilateral termination with
respect to some or all of the Covered Benefits.
Unless and until the Bankruptcy Court orders otherwise, the
Debtors will not discontinue or modify any Covered Benefits during
the Debtors' Chapter 11 cases.
In his motion, Harold Racer, on behalf of himself and others
similarly situated Non-Union Retirees of Patriot Coal Corporation
and its affiliated Debtors, asked the Bankruptcy Court to
authorize and instruct the U.S. Trustee for the Eastern District
of Missouri to appoint an Official Non-Union Retiree Committee.
According to Mr. Racer, without previously notifying the Court, on
Dec. 17, 2012, Debtors sent a mass mailing to all non-union
retirees informing them that Debtors would be seeking to
unilaterally terminate all retiree benefits.
According to papers filed with the Court, now that the Debtors
have publicly announced their intent to terminate retiree
benefits, a Retiree Committee must be formed as required by
Section 1114 of the Bankruptcy Code without delay. Section 1114
requires a Debtor to continue to pay "retiree benefits" under
certain circumstances after a bankruptcy filing.
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.
Kramer Levin Naftalis & Frankel LLP serves as its counsel.
Houlihan Lokey Capital, Inc., serves as its financial advisor and
investment banker. Epiq Bankruptcy Solutions, LLC, serves as its
information agent.
On Nov. 27, 2012, the New York bankruptcy judge moved Patriot's
bankruptcy case to St. Louis. The order formally sending the
reorganization to Missouri was signed December 19 by the
bankruptcy judge. The New York Judge in a Jan. 23, 2013 order
denied motions to transfer the venue to the U.S. Bankruptcy Court
for the Southern District of West Virginia.
PEAK RESORTS: Ski Resort to Auction Assets March 19
---------------------------------------------------
Marie Beaudette at Dow Jones' DBR Small Cap reports that a
bankruptcy judge has cleared Upstate New York ski resort Greek
Peak to put its assets on the auction block later this month.
About Peak Resorts
Peak Resorts, Inc., dba Greek Peak Mountain Resort, and four
affiliates filed for Chapter 11 bankruptcy (Bankr. N.D.N.Y. Case
Nos. 12-31471 to 12-31473, 12-31475 and 12-31476) in Syracuse on
Aug. 1, 2012. The affiliates are Hope Lake Investors LLC,
V.R.P.D. II L.P., REDI LLC, and A.R.K. Enterprises Inc.
Peak Resorts owns 888.5 acres of real estate, including the "Greek
Peak Mountain Resort", a four-season resort development located in
Virgil, New York. The 888.5-acre property is located 8 miles from
Cortland, New York and has the largest day trip area in Central
New York state. REDI LLC owns 402.7 acres of adjacent property.
Hope Lake Investors owns the Hope Lake Lodge & Cascades Indoor
Water Park, a 151-room hotel and resort facility in Virgil,
Cortland County. The Debtors have a total of 264 employees.
Chief Bankruptcy Judge Robert E. Littlefield Jr. presides over the
case. Lawyers at Harris Beach PLLC serve as the Debtors' counsel.
The Debtors scheduled these assets and debts:
Scheduled Assets Scheduled Liabilities
---------------- ---------------------
Hope Lake $27,180,635 $48,800,528
Peak Resorts $12,991,230 $26,558,438
REDI, LLC $1,298,401 $3,851,808
The petitions were signed by Allen R. Kryger, president.
PENSON WORLDWIDE: Creditors' Panel Gets OK to Retain Professionals
------------------------------------------------------------------
Judge Peter Walsh signed orders on February 26, 2013, authorizing
the Official Committee of Unsecured Creditors appointed in the
Chapter 11 cases of Penson Worldwide, Inc., and its debtor-
affiliates to retain:
-- Cousins Chipman & Brown, LLP as its Delaware counsel, nunc
pro tunc to January 24, 2013;
-- Hahn & Hessen LLP as its co-counsel effective as of
January 24, 2013; and
-- Kurtzman Carson Consultants LLC as its information agent.
The fee charged for Hahn & Hessen senior partner Mark T. Power is
capped at $650 per hour.
The Court also granted the Committee's request to limit creditor
access to confidential and privileged information, and
corresponding procedures.
About Penson Worldwide
Plano, Texas-based Penson Worldwide Inc. and its affiliates filed
for Chapter 11 bankruptcy (Bankr. D. Del. Lead Case No. 13-10061)
on Jan. 11, 2013.
Founded in 1995, Penson Worldwide is provider of a range of
critical securities and futures processing infrastructure products
and services to the global financial services industry. The
company's products and services include securities and futures
clearing and execution, financing and cash management technology
and other related offerings, and it provides tools and services to
support trading in multiple markets, asset classes and currencies.
Penson was one of the top two clearing brokers overall in the
United States. Its foreign-based subsidiaries were some of the
largest independent clearing brokers in Canada and Australia and
the second largest independent clearing broker in the United
Kingdom as of Dec. 31, 2010.
In 2012, the company sold its futures division to Knight Capital
Group Inc. and its broker-deal subsidiary to Apex Clearing Corp.
But the company was unable to successfully streamline is business
after the asset sales.
Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP, and
Young, Conaway, Stargatt & Taylor serve as counsel to the Debtors.
Kurtzman Carson Consultants LLC is the claims and notice agent.
The U.S. Trustee for Region 3 appointed three members to the
Official Committee of Unsecured Creditors: (i) Schonfeld Group
Holdings LLC; (ii) SunGard Financial Systems LLC; and (iii) Wells
Fargo Bank, N.A., as Indenture Trustee. The Committee selected
Hahn & Hessen LLP and Cousins Chipman & Brown, LLP to serve as its
co-counsel, and Capstone Advisory Group, LLC, as its financial
advisor. Kurtzman Carson Consultants LLC serves as its
information agent.
The company estimated $100 million to $500 million in assets and
liabilities in its Chapter 11 petition. The last publicly filed
financial statements as of June 30 showed assets of $1.17 billion
and liabilities totaling $1.227 billion.
PENSON WORLDWIDE: Authorized to Honor Severance Plan & PTO Policy
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
Penson Worldwide, Inc., and its debtor-affiliates to pay amounts
owing to non-insiders under their Severance Plan, and cash
payments to their employees with respect to unpaid Paid Time Off
upon termination.
Judge Peter Walsh held that to the extent the successful purchaser
of Nexa Technologies, Inc., offers an employee a position with
substantially the same or better salary, title, and
responsibilities, and assumed tenure for purposes of its severance
policy, that employee's claims under the Severance Policy are
deemed satisfied regardless of whether it accepts the purchaser's
employment offer.
About Penson Worldwide
Plano, Texas-based Penson Worldwide Inc. and its affiliates filed
for Chapter 11 bankruptcy (Bankr. D. Del. Lead Case No. 13-10061)
on Jan. 11, 2013.
Founded in 1995, Penson Worldwide is provider of a range of
critical securities and futures processing infrastructure products
and services to the global financial services industry. The
company's products and services include securities and futures
clearing and execution, financing and cash management technology
and other related offerings, and it provides tools and services to
support trading in multiple markets, asset classes and currencies.
Penson was one of the top two clearing brokers overall in the
United States. Its foreign-based subsidiaries were some of the
largest independent clearing brokers in Canada and Australia and
the second largest independent clearing broker in the United
Kingdom as of Dec. 31, 2010.
In 2012, the company sold its futures division to Knight Capital
Group Inc. and its broker-deal subsidiary to Apex Clearing Corp.
But the company was unable to successfully streamline is business
after the asset sales.
Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP, and
Young, Conaway, Stargatt & Taylor serve as counsel to the Debtors.
Kurtzman Carson Consultants LLC is the claims and notice agent.
The U.S. Trustee for Region 3 appointed three members to the
Official Committee of Unsecured Creditors: (i) Schonfeld Group
Holdings LLC; (ii) SunGard Financial Systems LLC; and (iii) Wells
Fargo Bank, N.A., as Indenture Trustee. The Committee selected
Hahn & Hessen LLP and Cousins Chipman & Brown, LLP to serve as its
co-counsel, and Capstone Advisory Group, LLC, as its financial
advisor. Kurtzman Carson Consultants LLC serves as its
information agent.
The company estimated $100 million to $500 million in assets and
liabilities in its Chapter 11 petition. The last publicly filed
financial statements as of June 30 showed assets of $1.17 billion
and liabilities totaling $1.227 billion.
PETAL VENTURES-ACADIAN: Voluntary Chapter 11 Case Summary
---------------------------------------------------------
Debtor: Petal Ventures-Acadian Square, LLC
141 Arrowhead Trail
Brandon, MS 39047
Bankruptcy Case No.: 13-00607
Chapter 11 Petition Date: February 26, 2013
Court: U.S. Bankruptcy Court
Southern District of Mississippi (Jackson Divisional
Office)
Judge: Edward Ellington
Debtor's Counsel: Jeffrey K. Tyree, Esq.
TYREE & VARDAMAN, PLLC
P.O. Box 813
Brandon, MS 39043
Tel: (601) 613-9565
E-mail: jktyree26@gmail.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Company did not file a list of creditors together with its
petition.
The petition was signed by David L. Kelly, managing member.
PHIL'S CAKE: Files Cash Collateral Budget Through March 31
----------------------------------------------------------
In connection with its motion to use cash collateral, Phil's Cake
Box Bakeries, Inc., filed on Feb. 20 a cash collateral budget for
the period Feb. 9 to March 30, 2013. The Debtor projects its cash
balance to be $218,000 for the week ended March 2, 2013, and
$185,000 for the week ended March 30, 2013. A copy of the
document is available for free at:
http://bankrupt.com/misc/Phils_Cake_CashBudget_033013.pdf
The bankruptcy judge entered an interim order allowing use of cash
collateral on Feb. 12. The fifth interim order said that use of
cash won't exceed amounts listed in the budget by 10%, no payments
would be made to insiders, and there would be no prepayments
except in the ordinary course of business. As additional adequate
protection, Southern Commerce Bank, N.A. will receive payment of
accrued interest on a monthly basis.
About Alessi's Bakeries
Phil's Cake Box Bakeries, Inc., dba Alessi's Bakeries, Inc., is a
family-owned bakery and catering business owned and operated in
Tampa, Fla., by four generations of the Alessi family. The
operations have grown from a small bakery delivering bread by
horse and wagon, to the current 100,000 square foot manufacturing
facility serving retail customers nationwide, with a retail
location maintaining and continuing its historic traditions in
Tampa.
Alessi's operates from two locations: a manufacturing facility and
a retail bakery. The Eagle Trail manufacturing facility is located
at 5202 Eagle Trail Drive, Tampa. The Eagle Trail Facility is a
100,000 sq. ft. building which houses various production lines
including five ovens, 40,000 sq. ft. of refrigerated space with
four walk-in freezers and two coolers, and 20,000 sq. ft. of raw
material and packing supplies warehouse space. Alessi's also
operates a retail bakery facility, located at 2909 West Cypress
Street, Tampa. Alessi's owns both locations.
As of the Petition Date, Alessi's estimates that it has assets of
roughly $14.5 million and liabilities of roughly $14.7 million.
Liabilities include $5.9 million owing to Zions. There is another
$3 million owing to the Small Business Administration and $820,000
to trade suppliers.
Alessi's filed for bankruptcy to address the over-leveraging due
to the Eagle Trail Facility acquisition and the inability fully
and timely to service debt during the period in which sales
dropped.
Alessi's filed for Chapter 11 bankruptcy (Bankr. M.D. Fla. Case
No. 12-13635) on Sept. 5, 2012. Bankruptcy Judge K. Rodney May
oversees the case. Harley E. Riedel, Esq., at Stichter Riedel
Blain & Prosser, P.A., serves as the Debtor's counsel. The
petition was signed by Philip Alessi, Jr., president.
PROVO GATEWAY: Court Confirms Trustee's Chapter 11 Plan
-------------------------------------------------------
Bankruptcy Judge Joel T. Marker confirmed the Plan of
Reorganization dated Jan. 17, 2013, filed by the trustee for Provo
Gateway, LLC. The Court held a hearing on the Plan on Feb. 26. A
copy of the Court's Feb. 26 Findings of Fact, Conclusions of Law
and Order is available at http://is.gd/jxabTafrom Leagle.com.
Provo Gateway, LLC, filed for Chapter 11 bankruptcy (Bankr. D.
Utah Case No. 11-31259) in 2011.
RADIAN GROUP: S&P Assigns 'CCC+' Rating to $350MM Sr. Notes
-----------------------------------------------------------
Standard & Poor's Ratings Services said that it has affirmed all
of its ratings on Radian Group Inc. At the same time, S&P revised
the outlook to stable from negative. S&P also assigned its 'CCC+'
senior unsecured debt rating to the company's proposed
$350 million convertible senior notes.
Radian has announced a plan to issue 34 million shares of common
equity and $350 million of convertible senior notes due in 2019.
The combined offering will provide about $620 million of
additional resources to the company.
"We view this offering as having minimal equity content as
reflected in the offering's call feature that is effective upon
issuance," said Standard & Poor's credit analyst Patrick Wong.
"We believe this capital injection will provide further financial
flexibility to the holding company in meeting its obligations, as
well as additional capital in financing new business while
maintaining a risk-to-capital ratio of about 20x. Although the
mortgage insurance segment's operating performance was negative in
2012, S&P has recently seen signs of incremental improvements,
including better notice of default, NOD, statistics and cure
ratio, as well as profitable business written. This leads S&P to
believe that Radian is on track to meet its target of returning to
profitability by 2014. If this offering is successful and the
company meets this goal, S&P expects Radian's financial
flexibility and ability to refinance to improve even further."
S&P is affirming its 'B+' and 'B-' financial strength ratings on
the operating companies, because it remains sensitive to Radian's
potential adverse reserve development, but recognize that the
newly raised capital and improving NOD should at least partially
address S&P's concerns. Economic growth continues to be slow and
the U.S. budget sequestration may slow growth further, potentially
leading to higher unemployment rates, which may increase NODs.
These factors will affect Radian's ability to meet its operating
performance target by 2014 and capitalization of its operating
companies.
The outlook revision reflects the additional financial flexibility
that will be available to Radian after the additional cash
resources from the note issuance and common shares. However, S&P
believes the company's financial profile remains under pressure
and significant risks remain due to potential adverse development
in reserves and ongoing losses from new NODs. S&P expects Radian
to be able to meet all of its financial obligations in the coming
months. S&P also expects the company's operating performance to
improve over the next 12 to 18 months, and for its risk-to-capital
ratio to remain at about 20x for the foreseeable future. S&P
anticipates that Radian will downstream capital if necessary to
support business growth.
"We could lower the ratings if Radian does not make a profit in 12
to 18 months on potential adverse reserve development, slower-
than-expected improvement in ongoing losses from NODs, more
sluggish economic growth, or a combination of these," Mr. Wong
continued. "We could also take a negative rating action if Radian
cannot meet any of its obligations due in the next 12 months. We
expect risk-to-capital to remain below 25x, satisfying any
regulatory capital requirement in order to continue writing new
business."
REGENCY ENERGY: Fitch Affirms 'BB' IDR over Southern Union Deal
---------------------------------------------------------------
Fitch Ratings has affirmed Regency Energy Partners, LP's Issuer
Default Rating (IDR) and senior unsecured debt ratings at 'BB'
following RGP's announced acquisition of Southern Union Gathering
Company, LLC.
RGP announced on Feb. 28, 2013, that it will be acquiring SUGS
from Southern Union Company, a jointly owned affiliate of Energy
Transfer Equity, L.P. (ETE; IDR 'BB-') and Energy Transfer
Partners, L.P. (ETP; IDR 'BBB-') for $1.5 billion. The transaction
will be financed with $900 million in new Regency units issued to
Southern Union Company comprised of $750 million of new common
units and $150 million of new class F common units. The class F
common units will be equivalent to common units except will not
receive distributions for the equivalent of eight consecutive
quarters post-closing. The remaining $600 million will be paid in
cash funded from long-term borrowings.
Key Ratings Drivers
Increased Size/Scale: The acquisition of the SUGS assets helps RGP
to increase the size and scale of its gathering and processing
operations, with a beneficial focus on the Permian basin. SUGS's
operations are generally moderate risk and will increase RGP's
presence in the Permian basin where production and the need for
gathering and processing services is expected grow. Additionally,
SUGS provides decent organic growth opportunities for RGP with two
large scale projects currently under construction.
Balanced Funding/Owner Support: The balanced financing of the
acquisition (60% equity/40% debt) and the support that ETE is
providing by forgoing some of their incentive distribution rights
(IDRs) and their $10 million management fee for two years, helps
the deal be accretive to earnings.
Increased Commodity Price Exposure: The affirmation considers that
RGP will be increasing its commodity price exposure as a result of
the transaction. With SUGS, RGP will be increasing both the size
of its gathering and processing operations and its contribution to
EBITDA, which should raise its sensitivity to changes in commodity
prices. However, Fitch expects RGP will hedge its open commodity
exposure, consistent with current practices.
Increased Initial Leverage: At deal close, Fitch expects RGP's
leverage to move higher relative to Fitch's prior expectations but
remain within expectations for the ratings category and comparable
to similarly rated peers. Fitch expects RGP's debt-to-adjusted
EBITDA to be roughly 5.9x for 2013 (assuming a second quarter
close and a 50% equity credit for RGP's preferreds) pro forma for
the transaction, and 4.0x-4.5x for 2014. This is compared to
Fitch's prior expectations of between 4.0x-4.25x and below 4.0x
for 2013 and 2014 respectively. Should leverage remain elevated
above 4.5x for a sustained time period Fitch would consider a
negative ratings action. Fitch typically adjusts EBITDA to exclude
nonrecurring extraordinary items, and noncash mark-to-market
earnings. Adjusted EBITDA excludes equity in earnings and includes
dividends from unconsolidated affiliates.
JV/Structural Subordination: RGP is the owner of several joint
venture (JV) interests some of which have external debt. RGP is
structurally subordinate to the cash operating and debt service
needs of these JVs and reliant on JV distributions to fund its
capital spending and its own distributions. This transaction
should help to reduce the percentage of cash flow RGP receives
from non-consolidated JVs on an overall basis.
General Partner Relationship: While Fitch's ratings are largely
reflective of RGP's credit profile on a stand-alone basis, they
also consider the company's relationship with ETE, the owner of
its general partner interest. ETE's general partner interest gives
it significant control over the MLP's operations, including most
major strategic decisions such as investment plans, and management
of daily operations. The relationship has also provided investment
opportunities that might otherwise be unavailable to RGP, such as
this current transaction.
Adequate Liquidity: RGP's liquidity is adequate with roughly $1
billion in availability under its $1.15 billion revolving credit
facility at Dec. 31, 2012. The revolving credit facility contains
financial covenants requiring RGP and its subsidiaries to maintain
a debt to consolidated EBITDA ratio (as defined in the credit
agreement - includes JV and material projects pro forma EBITDA)of
less than 5.25x, consolidated EBITDA to consolidated interest
expense ratio greater than 2.75x and a secured debt to
consolidated EBITDA ratio of less than 3.0x.
Rating Sensitivities
Negative: Future developments that may, individually or
collectively, lead to a negative rating action include:
-- Continued large-scale capital expenditures funded by higher
than expected debt borrowings;
-- A failure to hedge open commodity price exposure.
-- Significant and prolonged decline in prices for NGLs, crude
and natural gas;
-- Aggressive growth of distributions at RGP.
-- Debt/Adj. EBITDA above the 4.5x to 5.0x range and distribution
coverage below 1.0x on a sustained basis.
Positive: Future developments that may, individually or
collectively, lead to a positive rating action include:
-- A material improvement in credit metrics with sustained
leverage at 4.0x or below.
Fitch has affirmed the following ratings:
-- Long-term IDR 'BB';
-- Senior secured revolver 'BB+';
-- Senior unsecured notes 'BB';
-- Series A preferred units 'B+'.
REGENCY ENERGY: Moody's Affirms Ba3 CFR and B1 Sr. Notes Rating
---------------------------------------------------------------
Moody's Investors Service affirmed Regency Energy Partners LP's
Ba3 Corporate Family Rating and its B1 senior unsecured notes
rating. The outlook was changed to positive from stable. Moody's
also affirmed Southern Union Company's Baa3 rating and stable
outlook.
These actions are in response to Regency's announcement that it
will acquire Southern Union Gathering Company, LLC, owner of
Southern Union Gas Services, Ltd., from SUG in a $1.5 billion cash
and units transaction. SUG is jointly owned through the
intermediate holding company ETP Holdco Corporation (Holdco,
unrated) by Energy Transfer Partners, L.P. (Baa3 stable) and
Energy Transfer Equity, L.P. (Ba2 stable). ETE also owns the 1.6%
General Partnership (GP) interest in Regency and 15% of its
Limited Partnership (LP) units.
Issuer: Regency Energy Partners, LP
Affirmations:
Corporate Family Rating, Affirmed, Ba3
Senior Unsecured Rating, Affirmed, B1
Probability of Default Rating, Affirmed, Ba3-PD
Outlook Action:
Outlook, Changed to Positive from Stable
Issuer: Southern Union Company
Affirmations:
Senior Unsecured Rating, Affirmed, Baa3
Subordinated Debt Rating, Affirmed, Ba1
Outlook, Affirmed, Stable
Ratings Rationale:
"The SUGS acquisition, while representing a high EBITDA multiple
for natural gas gathering and processing (G&P), will be 60%
equity-financed by Regency, and is highly complementary with
Regency's existing Permian Basin G&P operations. Moreover, the
acquisition will further enlarge the already sizable scope and
scale of Regency's midstream footprint," commented Andrew Brooks,
Moody's Vice President. "We understand that SUG will use the
transaction's cash proceeds to reduce debt commensurate with the
reduction in assets and EBITDA represented by the sale of SUGS,
leaving its credit profile reasonably intact."
Regency's positive outlook reflects Moody's expectation that
elevated debt leverage will subside as the integration of SUGS and
new growth projects begin to generate incremental EBITDA.
Presuming Regency successfully integrates SUGS into its existing
G&P asset base and executes on its growth initiatives, its rating
could be upgraded. At the same time Moody's would expect Regency
to restore debt to EBITDA to below 5x while maintaining operating
margins from fee-based sources in the 70% range. Ratings could be
downgraded should peak leverage not begin to trend down.
Additionally, should the credit of ETE or ETP materially weaken,
or should ETE or ETP aggressively pressure Regency for higher
distribution payouts, a negative rating action could be
considered.
Regency is a publicly traded master limited partnership (MLP)
whose midstream operations consist of natural gas G&P, gas
pipeline transmission and natural gas liquids (NGLs)
transportation, processing and fractionation. SUGS consists of a
5,600 mile natural gas gathering system together with associated
processing and treating plants located in West Texas' Permian
Basin. It was originally acquired by SUG in March 2006 for $1.6
billion. Regency plans to fully integrate SUGS into its existing
Permian Basin G&P system, generating potentially significant
upside to EBITDA through synergies, efficiencies and ongoing
organic growth.
The $1.5 billion acquisition will be funded by Regency with $600
million of debt and $900 million in Regency units issued to SUG,
giving SUG an approximate 18% ownership position in Regency.
Consequently, Regency's debt leverage, 5.03x at September 30
(reflecting Moody's standard adjustments), is expected to rise
nominally to about 5.2x in 2013 before declining below 5x as a
result of anticipated EBITDA growth and capital spending declines.
Through growth capital spending and acquisitions, Moody's expects
Regency to more than double its EBITDA over the period 2010 to
2013.
Moody's expects SUG to use the cash proceeds from the sale of SUGS
to repay debt at SUG or its wholly-owned subsidiary, Panhandle
Eastern Pipe Line Company, LP (PEPL, Baa3 stable), maintaining its
debt leverage roughly equivalent to pre-sale levels that
approached 5x. Following the previously announced sale of its two
local gas distribution companies (LDCs) for $1.035 billion,
expected to close in the second-half of 2013, SUG will essentially
be an owner of interstate gas pipelines.
Regency should have adequate liquidity through 2013, which is
captured in its SGL-3 Speculative Grade Liquidity (SGL) rating. At
December 31, Regency reported $53 million of cash and $192 million
of borrowings outstanding under its $1.15 billion secured
revolving credit facility. The revolver is scheduled to expire in
June 2014. Regency should have sufficient cushion under its three
financial covenants over the next 12 months. Its leverage ratio
(debt/EBITDA) is limited to 5.25x, with secured debt/EBITDA
limited to 3.0x. Covenant language is such that it permits Regency
to employ an adjusted EBITDA for projects in construction to
account for the lag in EBITDA attributable to debt-financed
growth. The minimum interest coverage ratio is set at 2.75x
EBITDA. The $1.15 billion revolving credit facility is secured by
all assets, although Regency has an asset base significantly in
excess of the $1.15 billion revolver, which could afford it the
ability to raise additional liquidity through asset sales.
SUG maintains a $700 million unsecured revolving credit facility
that is scheduled to mature in May 2016; at September 30, SUG had
$251 million of borrowings outstanding under the revolver. The
pending sale of its two LDCs later in 2013 should generate
additional proceeds for debt reduction. SUG's capital spending is
declining and expected to be within cash flow over the course of
the year.
Regency's Ba3 CFR reflects its large size and scale, its business
and geographic diversification and high level of fee-based income
derived from recent expansions and acquisitions. The ratings also
recognize Regency's rapid growth and evolving business mix
profile, the execution risks associated with its growth projects,
increased structural complexity and its elevated leverage. Growth
capital spending and the acquisition of SUGS will cause leverage
to exceed 5.0x EBITDA in 2013, although leverage is expected to
decline as growth projects reach completion and integration
efficiencies are achieved at SUGS. The rating is further supported
by Regency's track record of issuing equity and its commitment to
the balanced funding of growth capital spending. Moody's also
takes into account ETE's control of Regency through its GP
interest, recognizing that ETE also looks to Regency to help fund
its own distributions and debt service obligations.
SUG's stable outlook reflects the low relative business risk of
its regulated interstate pipeline assets, offset by its high debt
leverage and the overhang of a complex ownership and
organizational structure. While a ratings upgrade is considered
unlikely given the operating control ETP exercises over SUG,
material de-leveraging could warrant an upgrade. Conversely,
should leverage metrics deteriorate from current 5x levels, or
should its business mix expand away from its interstate pipeline
asset base, a downgrade could be considered. Furthermore, a
downgrade of ETP or ETE would likely result in a downgrade of
SUG's ratings.
Regency's B1 senior unsecured note rating reflects its overall
probability of default, to which Moody's assigns a PDR of Ba3-PD,
and a loss given default of LGD4-63%. The size of the $1.15
billion secured revolving credit results in a single notching of
the senior unsecured notes below the Ba3 CFR under Moody's Loss
Given Default Methodology.
The principal methodology used in this rating was the Global
Midstream Energy Industry Methodology published in December 2010
and Natural Gas Pipelines Industry Methodology published in
November 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.
Regency Energy Partners LP is a midstream MLP headquartered in
Dallas, Texas. Its general partner is Energy Transfer Equity,
L.P., also headquartered in Dallas, Texas. Southern Union Company
is midstream pipeline company headquartered in Houston, Texas,
controlled by Energy Transfer Partners, L.P.
REPUBLIC LTD: TPG Sells Off Flagging Clothing Chain
---------------------------------------------------
Karlee Weinmann of BankruptcyLaw360 reported that beleaguered U.K.
fashion retailer Republic on Thursday found a new owner in
sportswear company Sports Direct International PLC, closing out a
brief period of insolvency that put a black mark on its former
private equity owner, TPG Capital.
The report said financial terms were not disclosed, but the sale
dealt a sharp blow to Texas-based TPG, which spent a reported
GBP300 million (US$450 million) to acquire the company less than
three years ago. Sports Direct is one of the U.K.'s top
sportswear retailers, the report related.
RESIDENTIAL CAPITAL: Ocwen to Subservice $9BB Private Label Loans
-----------------------------------------------------------------
Ocwen Financial Corporation on Feb. 28 disclosed that on February
15, 2013 Ocwen completed the acquisition of certain assets of
Residential Capital, LLC ("ResCap") in a Chapter 11 bankruptcy
sale. The Company purchased UPB of $107.3 billion of mortgage
servicing rights ("MSRs") to "private label," Freddie Mac and
Ginnie Mae loans, $42.1 billion of master servicing agreements,
and $25.9 billion of subservicing contracts. In addition, Ocwen
assumed the subservicing on behalf of ResCap for approximately
$91.4 billion of Fannie Mae loans and $31.5 billion of Freddie Mac
loans.
The aggregate purchase price, which included $1.5 billion of
related servicing advances, was approximately $2.1 billion,
subject to post-closing adjustments. In addition, until certain
consents and court approvals are obtained, Ocwen will subservice
approximately $9.0 billion of "private label" loans on behalf of
ResCap. When such consents and approvals are obtained, the Company
will purchase those MSRs as well.
To finance the ResCap acquisition, Ocwen deployed approximately
$840 million of net additional capital raised through the term
loan market plus approximately $1.3 billion borrowed pursuant to
three servicing advance facilities. Ocwen did not raise any
additional equity capital to fund the ResCap acquisition.
"With the closing of Homeward and ResCap, Ocwen's servicing
portfolio will have increased by 270% to almost $470 billion,
excluding master servicing," said Ron Faris President and CEO.
"The fifty-percent plus growth rate in revenue and earnings we
have produced over the past two years should accelerate in the
coming years as a result of these transactions. Moreover, we
continue to build a robust pipeline of new opportunities that
should result in additional growth in cash flow and earnings."
The disclosure was made in Ocwen Financial's earnings release for
the year ended Dec. 31, 2012, a copy of which is available for
free at http://is.gd/n4hqiW
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.
The Bankruptcy Court in November 2012 approved ResCap's sale of
its mortgage servicing and origination platform assets to Ocwen
Loan Servicing, LLC and Walter Investment Management Corporation
for $3 billion; and its portfolio of roughly 50,000 whole loans to
Berkshire Hathaway for $1.5 billion. The sale of the assets,
subject to satisfaction of customary closing conditions including
certain third party consents, is expected to close in the first
quarter of 2013.
The partnership of Ocwen and Walter defeated the last bid of $2.91
billion from Fortress Investment Group's Nationstar Mortgage
Holdings Inc., which acted as stalking horse bidder, at an auction
that began Oct. 23, 2012. The $1.5 billion offer from Warren
Buffett's Berkshire Hathaway Inc. was declared the winning bid for
a portfolio of loans at the auction on Oct. 25.
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: Lawmakers Grill Treasury on Executive Pay
--------------------------------------------------------------
Patrick Fitzgerald, writing for The Wall Street Journal's
Bankruptcy Beat, reported that Republican lawmakers Tuesday
grilled the Treasury Department official in charge of reining in
excessive pay at bailed out companies who signed off on $8 million
in compensation last year for the chief executive of bankrupt
subprime mortgage lender Residential Capital LLC.
According to Bankruptcy Beat, at the hearing before a House of
Representatives oversight panel, Rep. Jim Jordan (R., Ohio) took
aim at special paymaster Patricia Geoghegan who approved $8
million in compensation for ResCap Chief Executive Tom Marano just
weeks before the company filed for Chapter 11.
"The salary was at the request of ResCap board of directors," Ms.
Geoghegan, told the panel, WSJ related. WSJ also said that Ally
spokeswoman Gina Proia told Bankruptcy Beat that "Tom Marano's
compensation for periods following ResCap filing for bankruptcy is
the responsibility of ResCap, not Ally." She added that Mr.
Marano, a former Bear Stearns executive, is seeking compensation
for 2013 of $2 million.
The Bankruptcy Beat related that the hearing comes on the heels of
a report by the special inspector general for the Troubled Asset
Relief Program, Christy Romero, which was highly critical of the
government to keep a lid on executives' pay at Ally, AIG and
General Motors. AIG repaid its bailout last year, leaving GM and
Ally the only two companies still subject to pay oversight.
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.
The Bankruptcy Court in November 2012 approved ResCap's sale of
its mortgage servicing and origination platform assets to Ocwen
Loan Servicing, LLC and Walter Investment Management Corporation
for $3 billion; and its portfolio of roughly 50,000 whole loans to
Berkshire Hathaway for $1.5 billion. The sale of the assets,
subject to satisfaction of customary closing conditions including
certain third party consents, is expected to close in the first
quarter of 2013.
The partnership of Ocwen and Walter defeated the last bid of $2.91
billion from Fortress Investment Group's Nationstar Mortgage
Holdings Inc., which acted as stalking horse bidder, at an auction
that began Oct. 23, 2012. The $1.5 billion offer from Warren
Buffett's Berkshire Hathaway Inc. was declared the winning bid for
a portfolio of loans at the auction on Oct. 25.
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: Looks to Escape From FDIC-FRB Consent Order
----------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Residential Capital LLC, the mortgage-servicing
subsidiary of non-bankrupt Ally Financial Inc., sees bankruptcy as
a way to escape from an agreement with the Federal Reserve Board
and the Federal Deposit Insurance Corp. that's costing $300,000 a
day.
The issue comes up for discussion at a March 21 hearing in U.S.
Bankruptcy Court in Manhattan, according to the report.
The report recounts that in April 2011, ResCap and other mortgage
servicers signed a consent order with the FDIC and the FRB
requiring an extensive review of past foreclosures to find those
that were improper and compensate homeowners who suffered as a
result. In January, 10 of the lenders reached a settlement where
they agreed to pay billions of dollars to end the review process.
According to the report, ResCap argued in papers filed last week
that the consent order therefore is nothing more than an
unsecured, pre-bankruptcy claim because the liability can be
quantified in dollars. Consequently, ResCap wants the judge to
rule on March 21 that the review process may cease, stopping the
expense of $300,000 a day. The review cost is ResCap's single
largest administrative expense while in Chapter 11.
Responding to criticism from some creditors, ResCap terminated the
pre-bankruptcy agreement with Ally that was to be the foundation
for a Chapter 11 plan. ResCap is also giving creditors the right
to sue Ally if there isn't agreement on a consensual plan by May,
when an examiner will be issuing a report. Currently, plan
discussions are "stalled," according to an indenture trustee.
ResCap sold the bulk of the business to two buyers for a combined
$4.5 billion. The remaining assets are worth $1 billion, the
company said in a court filing.
ResCap's $2.1 billion in third-lien 9.625% secured notes due in
2015 last traded Feb. 28 for 109.5 cents on the dollar, according
to Trace, the bond-price reporting system of the Financial
Industry Regulatory Authority. The $473.4 million of ResCap
senior unsecured notes due in April last traded Feb. 28 for
31 cents on the dollar, a 32% increase since Dec. 19, according to
Trace.
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.
The Bankruptcy Court in November 2012 approved ResCap's sale of
its mortgage servicing and origination platform assets to Ocwen
Loan Servicing, LLC and Walter Investment Management Corporation
for $3 billion; and its portfolio of roughly 50,000 whole loans to
Berkshire Hathaway for $1.5 billion. The sale of the assets,
subject to satisfaction of customary closing conditions including
certain third party consents, is expected to close in the first
quarter of 2013.
The partnership of Ocwen and Walter defeated the last bid of $2.91
billion from Fortress Investment Group's Nationstar Mortgage
Holdings Inc., which acted as stalking horse bidder, at an auction
that began Oct. 23, 2012. The $1.5 billion offer from Warren
Buffett's Berkshire Hathaway Inc. was declared the winning bid for
a portfolio of loans at the auction on Oct. 25.
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).
RR DONNELLEY: Moody's Assigns Ba3 Rating to New $350MM Notes
------------------------------------------------------------
Moody's Investors Service rated RR Donnelley & Sons Company's new
$350 million senior unsecured notes Ba3. RR Donnelley's corporate
family rating and probably of default ratings were affirmed and
remain unchanged at Ba2 and Ba2-PD, respectively. Ratings of the
company's senior secured credit facility and senior unsecured
notes were affirmed at Baa2 and Ba3, respectively, and RR
Donnelley's speculative grade liquidity rating remains unchanged
at SGL-2 (good). The outlook remains negative.
Proceeds from the new notes, together with drawings under the
company's $1.15 billion senior secured revolving credit facility
that matures in September 2017 (fully undrawn at 31 December,
2012), will be used to fund tender offers for $400 million of
outstanding notes drawn from issues with maturity dates in 2017
and 2018. Accordingly, the transaction has no immediate ratings
implications and all ratings remain unchanged.
In its February 26, 2013 earnings release, RR Donnelley announced
a more conservative, 2.25x-to-2.75x, target range for leverage of
Debt-to-EBITDA (revised from 2.5x-to-3.0x). The company-defined
measure for 2012, which excludes some $101 million of
restructuring expenses from EBITDA, was 2.8x. The equivalent
Moody's figure, which counts $75 million of restructuring expenses
as regular operating expenses and also adjusts for under-funded
pension amounts and recurring operating leases, was 4.4x (a
difference of 1.6x). By converting term debt into easily pre-
payable revolving debt, the transaction sets the stage for future
de-levering as RR Donnelley gradually establishes a more
conservative credit profile in light of continually deteriorating
industry fundamentals. The target leverage range revision and
stage setting for de-levering are both credit-positive, however,
pending Moody's adjusted Debt-to-EBITDA reaching 3.75x, a likely
three year process, RR Donnelley will be weakly positioned at the
Ba2 rating level.
Issuer: R.R. Donnelley & Sons Company
Assignments:
Senior Unsecured Regular Bond/Debenture, Assigned Ba3 (LGD4 - 65%)
Senior Unsecured Shelf, assigned at (P)Ba3
Ratings/Outlook Actions:
Corporate Family Rating, affirmed at Ba2
Probability of Default Rating, affirmed at Ba2-PD
Speculative Grade Liquidity Rating, affirmed at SGL-2
Senior Secured Credit Facility, affirmed at Baa2 with the LGD
Assessment revised to (LGD1, 6%) from (LGD1, 7%)
Senior Unsecured Regular Bond/Debenture, affirmed at Ba3 with the
LGD Assessment revised to (LGD4 - 65%) from (LGD4 - 67%)
Outlook, Unchanged at Negative
Ratings Rationale:
RR Donnelley is weakly positioned at the Ba2 level because of
elevated leverage and very weak industry fundamentals evidenced by
stalled revenue growth and a recent sequence of asset impairment
charges. With organic revenue growth having recently stalled and
given the implication that EBITDA will stagnate, management is
belatedly implementing more conservative Debt-to-EBITDA policies,
and the rating assumes commitment to significant debt repayment as
efforts to restore financial flexibility unfold. Moody's believes
that management is committed to applying virtually all of the
company's nearly $300 million of annual free cash flow (Moody's
estimated) towards debt reduction for the foreseeable future. The
rating continues to benefit from the company's resilient cash flow
profile. During the 2008/2009 recession, despite 2009 revenue
being 15% less than in 2008 and despite a 34% EBITDA decline, the
company remained cash flow positive in 2009.
Rating Outlook
Given the potential of accelerating secular decline in the
broadly-defined commercial printing industry or a change in
management's de-leveraging commitment, the outlook is negative.
What Could Change the Rating - Up
Presuming stronger industry fundamentals and solid liquidity,
positive outlook or ratings actions could result from Moody's-
adjusted free cash flow-to-Debt (FCF/TD) to increasing on a
sustainable basis into the 10%-to- 15% range. At that level of
FCF, Moody's-adjusted Debt-to-EBITDA would likely be in the 3.0x-
to-3.5x range. Given adverse systemic influences, the negative
ratings outlook, and with recent measures at a significant
discount to the upgrade guidance measures (estimated 2012 FCF/TD
is 5.9%; Debt-to-EBITDA is 4.4x), an upgrade over the next couple
of years is unlikely.
What Could Change the Rating - Down
Interruption of delivering towards 3.75x Moody's-adjusted Debt-to-
EBITDA by 2015 could result in a CFR downgrade, as would adverse
liquidity developments, a downwards revision in existing financial
guidance or a more than 2.5% decrease in annual organic revenue.
The principal methodology used in this rating was the Global
Publishing Industry 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.
RR DONNELLEY: S&P Rates $350MM Unsecured Notes Due 2021 'BB'
------------------------------------------------------------
Standard & Poor's Ratings Services assigned R.R. Donnelley & Sons
Co.'s proposed $350 million unsecured notes due 2021 an issue-
level rating of 'BB' (the same as the 'BB' corporate credit rating
on R.R. Donnelley), with a recovery rating of '4', indicating
S&P's expectation for average (30%-50%) recovery in the event of a
payment default.
The company will use proceeds of the new notes to partly fund
tender offers for up to $400 million principal amount of the
company's 8.6% notes due 2016, its 6.125% notes due 2017 notes,
and its 7.25% notes due 2018, and to pay any premiums associated
with the tender offers. If there are any remaining proceeds, the
company will use the proceeds to repay borrowings outstanding
under its revolving credit facility.
"Our ratings on RRD are predicated on the company's positive cash
flow generation (despite revenue declines), and the assumption
that leverage will decline as a result of debt repayment, provided
that economic, structural, and pricing pressures do not worsen.
We regard the company's financial risk profile as "significant"
(based on S&P's criteria). Our "fair" business risk profile
reflects RRD's market position and efficiencies associated with
its critical mass. The company faces secular declines in several
of its products and pricing pressure because of industry
overcapacity. We believe that these trends could cause RRD's
organic revenue to decline over the near and intermediate term,"
S&P said.
"Our base-case scenario incorporates our expectation that revenue
could decline at a low-single-digit percent rate for 2013. We
believe EBITDA will decline at a high-single-digit to low-double-
digit percent rate in 2013. This would cause the company's EBITDA
margin, according to our calculation of EBITDA which includes
restructuring charges, to decline to under 10.5% from 11.1% at
Dec. 31, 2012. We believe that the EBITDA margin will decline
sharply because of revenue pressure and because the company's
ability to cut costs in line with revenue declines is limited as a
result of its high fixed costs. Additional factors in 2013 are
the comparison with a benefit in 2012 from a customer rebate
reversal adjustment, an acquisition last year that has high pass
through revenue, and likely lower pension-related returns in
2013," S&P added.
On Dec. 31, 2012, the company's leverage adjusted principally for
operating leases, pension obligations, other post-retirement
obligations, and restructuring charges was roughly 4.2x.
Management revised its financial policy stating that it plans to
manage leverage to a range of 2.25x to 2.75x from its previous
policy of between 2.5x and 3x. Assuming that management executes
this policy, it would correspond to a 3.6x to 4.1x leverage range
based on S&P's methodologies. On Dec. 31, 2012, leverage,
according to management's calculation, was 2.8x, compared with
S&P's 4.2x calculation. A key rating assumption is that, given
S&P's expectation of an EBITDA decline this year, the company will
use a portion of its discretionary cash flow to repay debt in
order to maintain leverage within its new target range.
The negative rating outlook reflects S&P's concern that revenue
declines could accelerate from the historical 2%-2.5% rate,
resulting in leverage remaining high. S&P could lower the rating
if it concludes that secular risks facing the company have
increased and could cause organic revenue to decline at a brisker
pace or the company does not reduce leverage through debt
repayment. This could occur if revenue were to decline at a mid-
single-digit percent rate and if the company's EBITDA margin were
to decline to 10.5% or below.
RATINGS LIST
R.R. Donnelley & Sons Co.
Corporate Credit Rating BB/Negative/--
New Ratings
R.R. Donnelley & Sons Co.
$350m unsecrd notes due 2021 BB
Recovery Rating 4
SALT VERDE: Moody's Lowers Rating on Gas Revenue Bonds to 'Caa1'
----------------------------------------------------------------
Moody's Investors Service downgraded the rating of Salt Verde
Financial Corporation Subordinate Gas Revenue Bonds, Series 2007
to Caa1 from B2 (under review for downgrade). Moody's placed the
Bonds under review for downgrade on November 21, 2012. This action
resolved the review for downgrade.
The downgrade results from the presence of a guaranteed investment
agreement provided by MBIA Inc. (Caa1) that is also insured by
MBIA Insurance Corporation (Caa2). The rating of the Senior Gas
Revenue Bond, Series 2007 is currently Baa2 and is not affected by
the action on the subordinate bonds.
The principal methodology used in this rating was Gas Prepayment
Bonds published in December 2008.
SAN FERNANDO: S&P Lowers Rating on Project No. 3 TABs to 'BB+'
--------------------------------------------------------------
Standard & Poor's Ratings Services has lowered its rating its
rating on San Fernando Redevelopment Agency (RDA), Calif.'s series
2006 Civic Center Redevelopment Project (Project No. 3) tax
allocation bonds (TABs) to 'BB+' from 'BBB+'. At the same time,
Standard & Poor's removed the rating from CreditWatch with
negative implications, where it had been placed July 6, 2012. The
outlook is negative.
"The downgrade reflects our view of the diversion to the city of a
portion of tax override revenues, which had previously been
calculated as part of pledged revenue," said Standard & Poor's
credit analyst Michael Stock. This has lowered revenue available
in the redevelopment property tax trust fund to pay debt service
on the TABs. The negative outlook reflects the successor agency's
lack of a contingency plan to deal with the potential shortfall of
tax increment revenue in the spring of 2013 and the potential for
a draw on the debt service reserve.
The rating reflects S&P's view of the agency's:
-- High concentrated tax, based at 56% of incremental assessed
value (AV), around industrial manufacturing;
-- Below-average income indicators, as measured by per capita
effective buying income at 55%; and
-- Thin maximum annual debt service (MADS) coverage of 1.03x.
The bonds are secured by tax increment revenue collected from the
agency's Project Area No. 3, which consists of a 150-acre original
area created in 1973 and a 214-acre amendment area added in 1986,
net of the 20% set-aside for low- and moderate-income housing and
contractual pass-through payments. The combined project area
covers 364 acres that are primarily industrial (48% of total AV),
followed by commercial (19%) and residential (14%). There is a
cash funded debt service reserve fund.
The negative outlook reflects S&P's view of the successor agency's
recent weak debt management and S&P's uncertainty over the
successor agency's ability to successfully manage cash. Should
the successor agency fail to manage its cash in order to make
timely semiannual debt service payments or should declining AV
trends continue, S&P could further lower the rating. Should the
successor agency successfully and consistently work out their
disputes with the county and reserve for future annual debt
service as allowed under AB 1484, S&P could raise the rating.
SANTERA REHABILITATION: Case Summary & Creditors List
-----------------------------------------------------
Debtor: Santera Rehabilitation, Inc.
105 Meadow View Road, Suite 105
Bristol, TN 37620
Tel: (276) 356-1907
Bankruptcy Case No.: 13-50293
Chapter 11 Petition Date: February 26, 2013
Court: U.S. Bankruptcy Court
Eastern District of Tennessee (Greeneville)
Judge: Marcia Phillips Parsons
Debtor's Counsel: Dean B. Farmer, Esq.
HODGES, DOUGHTY & CARSON, PLLC
P.O. Box 869
Knoxville, TN 37901
Tel: (865) 292-2307
Fax: (865) 292-2252
E-mail: dfarmer@hdclaw.com
Scheduled Assets: $1,401,497
Scheduled Liabilities: $701,685
The Company's list of its 11 largest unsecured creditors filed
with the petition is available for free at:
http://bankrupt.com/misc/tneb13-50293.pdf
The petition was signed by Jim Daugherty, president.
SCHOOL SPECIALTY: Replacement Financing Approved
------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that School Specialty Inc. has interim approval to borrow
$130 million in replacement financing provided by junior lenders
to forestall a quick sale of the business, which might have wiped
out their claims.
According to the report, the company entered bankruptcy with
financing from Bayside Financial LLC, which included a commitment
for an auction that would have taken place March 25. When
ultimately approved by the bankruptcy court in Delaware at a final
financing hearing on March 25, the junior lenders, not Bayside,
will lend a total of $155 million.
The report relates that in the short term, the initial advance
will pay off about $116.4 million in existing secured debt. The
obligations to be repaid up front include $67.8 million owing on a
senior credit facility, $22.6 million on the interim bankruptcy
loan from Bayside, and $25 million to fund an escrow account in
case the senior lenders are entitled to a so-called make-whole
premium for early repayment of the debt.
The report notes that when the financing receives final approval,
it will provide School Specialty with $60 million in fresh cash.
The interim financing was formally approved on Feb. 26. The
junior lenders' loan has a customary provision allowing no more
than $100,000 to be used for attacking or investigating the
validity of secured claims. The limitation doesn't apply to
expenses in fighting senior lenders' entitlement to a make-whole
premium. The financing comes from an ad hoc group of holders of
the $157.5 million in 3.75% convertible subordinated notes.
Without the new loan, Bayside might have taken over in exchange
for $95 million in secured debt. Bayside is agent for lenders on
a term loan.
About School Specialty
Based in Greenville, Wisconsin, School Specialty is a supplier of
educational products for kindergarten through 12th grade. Revenue
in 2012 was $731.9 million through sales to 70% of the
country's 130,000 schools.
School Specialty and certain of its subsidiaries filed voluntary
petitions for reorganization under Chapter 11 (Bankr. D. Del. Lead
Case No. 13-10125) on Jan. 28, 2013, to facilitate a sale to
lenders led by Bayside Financial LLC, absent higher and better
offers.
Attorneys at Young Conaway Stargatt & Taylor, LLP, serve as
counsel to the Debtors. Alvarez & Marsal North America LLC is the
restructuring advisor and Perella Weinberg Partners LP is the
investment banker. Kurtzman Carson Consultants LLC is the claims
and notice agent.
The petition estimated assets of $494.5 million and debt of $394.6
million.
SIGNATURE STATION: Can Use Regions Cash Collateral Until March 31
-----------------------------------------------------------------
The Bankruptcy Court has granted Signature Station, LP, interim
authorization to access cash collateral in which Regions Bank
asserts an interest through March 31, 2013, at 5:00 p.m.
The tenants of Alexander at Stonecrest are directed to pay all
rents and all other fees due under the respective leases, if any,
to the Debtor until further order of the Court.
Debtor is authorized to pay $280,000 to Regions as a capital
reduction payment.
As additional adequate protection for Debtor's use of the Cash
Collateral, from the Petition Date forward, on a monthly basis,
the Debtor will pay Regions $52,718.60 for each 31-day monthly
period and $51,018.00 for each 30-day monthly period.
As additional adequate protection, Regions is granted a first
priority lien to the same extent, validity and priority as its
pre-petition liens, upon all post-petition property of the Debtor.
The Replacement Lien granted in this Order will not include any
rights or claims arising under Chapter 5 of the Bankruptcy Code.
Signature Station, LP, filed a Chapter 11 petition (Bankr. N.D.
Ga. Case No. 12-75646) in Atlanta on Oct. 11, 2012. The Debtor is
a Single Asset Real Estate as defined in 11 U.S. Sec. 101(51B).
The Debtor said that as of March 6, 2012, its property was
appraised for $18.8 million.
Bankruptcy Judge Margaret Murphy presides over the case. Howick,
Westfall, McBryan & Kaplan, LLP, serves as counsel.
In its schedules, the Debtor disclosed $20,743,936 in total assets
and $14,420,265 in total liabilities as of the Petition Date.
Counsel for Regions Bank may be reached at:
Ron C. Bingham, II
STITES & HARBISON, PLLC
303 Peachtree Street, N.E., Suite 2800
Atlanta, GA 30308
Tel: (404) 739-8836
Fax: (404) 332-0235
E-mail: rbingham@stites.com
SIGNATURE STATION: Can Employ Howick Westfall as Counsel
--------------------------------------------------------
The Bankruptcy Court authorized Signature Station, LP, to employ
Howick, Westfall, McBryan & Kaplan, LLP, as the Debtor's
attorneys.
The hourly rate for attorneys and other professionals expected to
be involved in representing the Debtor are:
Professional Rates
------------ -----
Partners $225 to $450
Associates $150 to $270
Paralegal $75 to $150
Signature Station, LP, filed a Chapter 11 petition (Bankr. N.D.
Ga. Case No. 12-75646) in Atlanta on Oct. 11, 2012. The Debtor is
a Single Asset Real Estate as defined in 11 U.S. Sec. 101(51B).
The Debtor said that as of March 6, 2012, its property was
appraised for $18.8 million.
Bankruptcy Judge Margaret Murphy presides over the case. Howick,
Westfall, McBryan & Kaplan, LLP, serves as counsel.
In its schedules, the Debtor disclosed $20,743,936 in total assets
and $14,420,265 in total liabilities as of the Petition Date.
SK FOODS: District Court Affirms Compromise With BMO Lenders
------------------------------------------------------------
District Judge Lawrence K. Karlton affirmed a bankruptcy court
order approved a compromise between the Trustee for SK Foods L.P.,
and the secured lenders. Judge Karlton thumbed down an appeal by
Scott Salyer et al.
On Sept. 27, 2008, the Bank or Montreal and other secured lenders
loaned the Debtors $193 million. The loan was secured by all of
the Debtors' assets, including their cash and cash proceeds.
During the course of the Debtors' bankruptcy, the Debtors filed a
motion for an order authorizing them to use BMO's cash collateral
so that (1) they could continue to operate the business, as well
as (2) prepare for the "Section 363" (11 U.S.C. Sec. 363) sale of
the Debtors' assets.
The Debtors proposed to conduct a "sale of the Debtors' operations
as a going concern prior to commencement of the tomato packing
season on July 1st." The Debtors' stated plan was to sell
"substantially all of the Debtors' assets in late June." The
Debtors' stated goal was to close the sale and transfer control
and possession of the operations to a buyer with the financial
wherewithal to fund operations at the Lemoore and Colusa plants
throughout the tomato packing season.
On June 22, 2009, The Bankruptcy Court granted the Debtors' motion
to "enable the Debtors to continue operating," and to avoid harm
to the estate. To protect BMO from any "diminution in the value"
of its prepetition collateral that might result from the use of
the cash collateral, the Bankruptcy Court granted BMO "adequate
protection" in the form of (1) "replacement liens" against all
property of the Debtors, prepetition and postpetition; and (2) a
$2 million monthly payment by debtors for the account of the
secured lenders.
Prior to the sale, the Debtors' financial advisor estimated that
the total value of the collateral, if sold by June 2009, was $102
million to $129 million. This amount was broken down into three
components: (1) $60 million to $80 million, which was the
valuation of the "fixed assets" which were to be sold in the
"going-concern" sale, plus (2) $48 million to $55 million, which
was the "liquidation" valuation of the Debtors' accounts
receivable and inventory; less (3) $6 million, which was the
amount of the fixed assets belonging to other parties.
The sale realized only $67 million in proceeds.
BMO, after taking into account $3 million to $13 million it
expects to receive as a result of a compromise, which is under
appeal, therefore asserts that it received (or will receive) $70
million to $80 million in proceeds from the sale of its collateral
plus the compromise proceeds. BMO asserts that the difference
between its asserted value and the amount it actually received (or
will receive) is $22 million to $59 million, the amount BMO
asserts as its super-priority claim.
After negotiations, BMO and the Trustee agreed to compromise the
super-priority claim at $27.66 million. The Bankruptcy Court
approved the compromise, over Salyer et al's objections.
Salyer et al seek to overturn the Bankruptcy Court's approval of
the compromise on the sole ground that the Bankruptcy Court erred,
as a matter of law, in relying on a $102 million to $159 million
valuation of BMO's collateral. This valuation was the starting
point that eventually led to the $22 million to $59 million value
of the super-priority claim, and the $27.66 million compromise of
that claim. Salyer et al assert that the valuation of the
collateral was based upon its "going-concern" value, when, they
assert, the law is crystal clear that its "liquidation" value
should have been used. Salyer et al assert that if the
liquidation value had been used, it would be clear that BMO
suffered no diminution in the value of its collateral, and thus it
was not fair and equitable to compromise this zero-value claim at
$27.66 million.
Judge Karlton, however, held that Salyer et al have no factual or
legal basis for their appeal. Judge Karlton said the Bankruptcy
Court considered all the pertinent material relating to the
compromise reached between the Trustee and the secured lenders.
The Bankruptcy Court determined that the compromise was fair and
reasonable. Salyer et al's sole basis for arguing that the
compromise was not fair and reasonable is that the estate's assets
should have been evaluated for their "liquidation" value rather
than their "going-concern" value. Judge Karlton said the
Bankruptcy Court properly relied upon the "liquidation" value for
those assets which were to be liquidated, and properly relied upon
the "going-concern" value for those assets which were to be sold
as part of the business as a going concern.
The case before Judge Karlton is, SCOTT SALYER, et al.,
Appellants, v. SK FOODS, L.P., et al., Appellees, No. CIV. S-11-
2987 LKK (E.D. Cal.). A copy of the Court's Feb. 25, 2013 Order
is available at http://is.gd/uiOuHPfrom Leagle.com.
About SK Foods
SK Foods LP ran a tomato processing facility. It filed for
Chapter 11 bankruptcy protection after being dropped by its
lending group. Creditors filed an involuntary Chapter 11 petition
against SK Foods LP and affiliate RHM Supply/ Specialty Foods Inc.
(Bankr. E.D. Cal. Case No. 09-29161) on May 8, 2009. SK Foods
had said it was preparing to file a voluntary Chapter 11 petition
when the creditors initiated the involuntary case. The Company
later put itself into Chapter 11 and Bradley D. Sharp was
appointed as Chapter 11 trustee. The Debtors were authorized on
June 26, 2009, to sell the business for $39 million cash to a U.S.
arm of Singapore food processor Olam International Ltd. The
replacement cost for the assets is $139 million, according to
Olam.
As reported by the Troubled Company Reporter on Feb. 19, 2010, a
federal grand jury returned a seven-count indictment charging
Frederick Scott Salyer, former owner and CEO of SK Foods, with
violations of the Racketeer Influenced and Corrupt Organizations
Act, in connection with his direction of various schemes to
defraud SK Foods' corporate customers through bribery and food
misbranding and adulteration, and with wire fraud and obstruction
of justice.
Salyer supporters launched a Web site which can be accessed from
two addresses: http://www.operationrottentomato.com/and
http://www.scott-salyer.com/
ST. CLAIR: Moody's Lowers General Obligation Rating to 'Ba1'
------------------------------------------------------------
Moody's Investors Service downgraded St. Clair County School
District's #189 (East St. Louis, IL) General Obligation rating to
Ba1 from Baa1. Concurrently, the ratings are placed under review
for possible downgrade.
Ratings Rationale:
The district's general obligation unlimited tax pledge provides
for a property tax levy that is unlimited as to rate or amount to
be used for repayment of the district's outstanding bonds. The
downgrade to a Ba1 rating reflects the district's projected
operating budget deficit in the current fiscal year, as its
restructuring plan has not resulted in expected savings during
fiscal 2013. The downgrade is also based on a projected negative
cash balance, which could occur as soon as May 2013, necessitating
a $9.0 million supplemental appropriation from the State of
Illinois (GO rated A2/negative outlook). The rating also
incorporates a declining tax base in St. Clair County (GO rated
Aa2) with a weak economy and low socio-economic characteristics,
as well as above average debt burden with a below average
amortization schedule.
The rating remains under review for possible downgrade pending the
resolution of a number of contingencies that could impact the
district's immediate cash flow as well as longer term ability to
regain structural balance and rebuild reserves. The timing of
receipt of the supplemental aid is unclear. Further, the district
is working to develop a potential state aid intercept bond
issuance for cash flow needs, which may occur as soon as May 2013
without additional revenues. This would reduce state aid necessary
for operations and debt service in fiscal year 2014. Additionally,
the district is working to finalize its fiscal 2012 audit.
Strengths:
- State oversight and attempts to institute adequate internal
controls
Challenges:
- Projected operating budget deficit leading to a projected
negative cash flow during the current fiscal year
- Reductions and delays in general and categorical state aid
payments, further pressuring financial operations
- Shrinking tax base with well below average socioeconomic
characteristics
- Above average debt burden with below average amortization
schedule
What Could Change the Rating - Up?
- The development and continued implementation of an achievable
financial recovery plan that positions the district for long-
term stability, independent of state oversight
- Significant growth in taxable valuation and improvement in
socio-economic profile
- Stable financial position that includes satisfactory cash
reserves
What Could Change the Rating - Down?
- Failure to implement a sufficient deficit elimination plan or
adequate internal controls leading to General Fund reserve
levels consistent with lower rated entities
- Deficit cash position resulting in delayed and/or reduced debt
service payments
- Further deterioration in the district's tax base and economy
The principal methodology used in this rating was General
Obligation Bonds Issued by U.S. Local Governments published in
October 2009.
SUPPLY HARDWARE: Voluntary Chapter 11 Case Summary
--------------------------------------------------
Debtor: Supply Hardware, Inc.
7115 Watt Avenue, Suite 100
North Highlands, CA 95660
Bankruptcy Case No.: 13-22534
Chapter 11 Petition Date: February 27, 2013
Court: U.S. Bankruptcy Court
Eastern District of California (Sacramento)
Judge: Michael S. McManus
Debtor's Counsel: Marlon H. Bateman
LAW OFFICE OF MARLON H. BATEMAN, II
5701 Lonetree Boulevard, #102
Rocklin, CA 95765
Tel: (916) 677-6800
Estimated Assets: $500,001 to $1,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Company did not file a list of creditors together with its
petition.
The petition was signed by Tom Carpenter, president and CEO.
SYNOVUS FINANCIAL: S&P Raises Rating to 'B+'; Outlook Positive
--------------------------------------------------------------
Standard & Poor's Ratings Services said it raised its counterparty
credit rating on Synovus Financial Corp. to 'B+' from 'B'. At the
same time, S&P raised its long-term rating on Synovus Bank, its
primary banking subsidiary, to 'BB' from 'BB-'. The outlook on
both ratings is positive.
The upgrade reflects S&P's view that Synovus has improved both its
financial performance and business position, and S&P expects
further improvement in 2013. S&P thinks the recapture of the
deferred tax asset and bulk loan sale in the fourth quarter better
position the company for the potential redemption of its Troubled
Asset Relief Program (TARP) preferred shares and a lifting of the
Memorandum of Understanding (MOU) by regulators. Specifically,
the company recovered substantially all of its deferred tax asset
valuation allowance, resulting in an income tax benefit of
approximately $800 million. Synovus Bank entered an MOU with the
Federal Deposit Insurance Corp. and the Georgia Division of
Banking and Finance in 2009.
S&P raised its assessment of Synovus' business position to
"moderate" from "weak," as S&P's criteria describe the terms.
"Based on progress achieved in recent quarters, we think the
company's business position has improved modestly, benefiting from
a substantial reduction in our concerns related to its business
stability," said Standard & Poor's credit analyst Robert Hansen.
"We also believe that management has been successful in executing
its strategic plan."
"We think asset quality has improved in recent quarters, aided by
the fourth-quarter bulk loan sale, but remains weak," said
Mr. Hansen. "Specifically, adjusted NPAs to customer loans and
other real estate owned declined to just less than 7.0% as of
Dec. 31, 2012, from approximately 8.8% at Dec. 31, 2011, aided by
the sale of about $545 million of primarily distressed assets in
the fourth quarter."
S&P views the sequential rise in NPA inflows in the fourth quarter
as nonrecurring and expect them to resume their downward
trajectory throughout 2013. Although nonaccrual loans have
declined in recent years, restructured loan balances have
increased substantially. S&P expects loan performance to
improve in 2013 given lower criticized loans and classified
assets, as well as smaller exposures to commercial real estate and
construction loans, but substantial concentrations in the
southeast could temper our expectations.
THQ INC: WWE Reserves $1.7-Mil. Bad Debt Following Bankruptcy
-------------------------------------------------------------
WWE disclosed that the Company reserved $1.7 million as bad debt
for amounts that were due the Company from THQ Inc. at December
31, 2012.
On December 19, 2012, WWE's video game licensee THQ declared
bankruptcy. The amounts reserved primarily related to sponsorship
agreements and various services WWE provided to THQ in support of
WWE '13. In connection with the termination of its license
agreement with THQ, the Company will recognize approximately $8.0
million of revenue during the first quarter of 2013 relating to
the unrecognized portion of an advance received when the Company
entered into the license agreement with THQ in 2009.
Additionally, upon termination of the agreement with THQ, the
Company entered into a multi-year agreement with Take-Two
Interactive Software, Inc. (Take-Two) to be the Company's video
game licensee. As a result of THQ's bankruptcy, the Company will
not collect royalties due in the first quarter. The Company has
estimated the amount of this economic loss at between $4.0 million
to $5.0 million.
The disclosure was made in WWE's earnings release for the year
ended Dec. 31, 2012, a copy of which is available for free at
http://is.gd/sMPK0K
About THQ Inc.
THQ Inc. (NASDAQ: THQI) -- http://www.thq.com/-- is a worldwide
developer and publisher of interactive entertainment software.
The Company develops its products for all popular game systems,
personal computers, wireless devices and the Internet.
Headquartered in Los Angeles County, California, THQ sells product
through its network of offices located throughout North America
and Europe.
THQ Inc. and its affiliates sought Chapter 11 protection (Bankr.
D. Del. Lead Case No. 12-13398) on Dec. 19, 2012.
Attorneys at Young Conaway Stargatt & Taylor, LLP and Gibson, Dunn
& Crutcher LLP serve as counsel to the Debtors. FTI Consulting
and Centerview Partners LLC are the financial advisors. Kurtzman
Carson Consultants is the claims and notice agent.
Before bankruptcy, Clearlake signed a contract to buy Agoura THQ
for a price said to be worth $60 million. After a 22-hour auction
with 10 bidders, the top offers brought a combined $72 million
from several buyers who will split up the company. Judge Walrath
approved the sales in January 2013. Some of the assets didn't
sell, including properties the company said could be worth about
$29 million.
Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed five
persons to serve in the Official Committee of Unsecured Creditors.
The Committee tapped Houlihan Lokey Capital as its financial
advisor and investment banker, Landis Rath & Cobb as co-counsel
and Andrews Kurth as counsel.
TRINITY COAL: Lender Agree on Executive to Lead Company
-------------------------------------------------------
Katy Stech at Dow Jones' DBR Small Cap reports that executives at
Trinity Coal Corp. agreed with lenders trying to force the West
Virginia coal miner into bankruptcy that the company should bring
back a former leader to stabilize its operations.
About Trinity Coal
Trinity Coal Corp. is a coal mining company that owns coal
deposits located in the Appalachian region of the eastern United
States, specifically, in Breathitt, Floyd, Knott Magoffin, and
Perry Counties in eastern Kentucky and in Boone, Fayette, Mingo,
McDowell and Wyoming Counties in West Virginia.
Trinity's coal mining operations are organized into six distinct
coal mining complexes. Three complexes are located in Kentucky and
are referred to as Prater Branch Resources, Little Elk Mining and
Levisa Fork. The Kentucky Operations produced compliance and low
sulfur steam coal. Three complexes are located in West Virginia
and are referred to as Deep Water Resources, North Springs
Resources and Falcon Resources.
Trinity is a wholly owned subsidiary of privately held
multinational conglomerate Essar Global Limited.
Credit Agricole Corporate & Investment Bank, ING Capital LLC and
Natixis, New York Branch filed an involuntary petition for relief
under Chapter 11 against Trinity Coal Corporation and 15
affiliates (Bankr. E.D. Ky. Lead Case No. 13-50364). The three
entities say they are owed a total of $104 million on account
loans provided to Trinity.
On Feb. 14, 2013, Austin Powder Company, Whayne Supply Company and
Cecil I. Walker Machinery Co. filed an involuntary petition for
relief under Chapter 11 (Bankr. E.D. Ky. Case No. 13-50335)
against Frasure Creek Mining, LLC. On Feb. 19, 2013, Credit
Agricole, ING Capital and Natixis joined as petitioning creditors.
TRONOX LTD: New $1.3-Bil. Term Loan Gets Moody's 'Ba2' Rating
-------------------------------------------------------------
Moody's Investors Service affirmed Tronox Limited's Ba3 Corporate
Family Rating, assigned a Ba2 rating to its proposed $1.3 billion
term loan B due 2020, and downgraded its senior unsecured notes
due 2020 to B2 from B1. Moody's also affirmed the SGL-1
Speculative Grade Liquidity Rating reflecting the firm's very good
liquidity. The proceeds from the loan will be used to prepay the
existing term loan B ($691 million balance as of December 31,
2012), for general corporate purposes and/or strategic
alternatives. The ratings outlook is stable.
The following summarizes the ratings:
Ratings affirmed
Tronox Limited
Corporate Family Rating -- Ba3
Probability of Default Rating -- Ba3-PD
$700mm sr sec term loan B -- Ba2 (LGD3, 34%) from Ba2 (LGD3,
30%) **
Speculative Grade Liquidity Rating - SGL-1
Ratings assigned
Tronox Pigments (Netherlands) BV
$1.3 billion sr sec term loan B due 2020-- Ba2 (LGD3, 34%)
Rating Downgraded:
Tronox Finance LLC
$900mm sr unsec notes due 2020 -- B2 (LGD5, 82%) from B1 (LGD5,
79%)
Outlook - Stable
** The ratings on the refinanced term loan will be withdrawn upon
completion of the refinancing
Ratings Rationale:
The affirmation of Tronox's Ba3 CFR reflects the company's net
debt position that will be unchanged after the proposed financing,
Moody's expectation the firm will invest a large portion of its
$1.3 billion of cash after the proposed transaction (approximately
$600 million of cash raised with the proposed term loan plus
existing cash balances of $716 million as of December 31) such
that it will have a positive impact on earnings and Moody's
expectations for improvements in the titanium dioxide (TiO2)
industry's conditions. The Ba2 rating on the term loan was
assigned in accordance with Moody's loss-given-default (LGD)
rating methodology and is one notch higher than the CFR,
reflecting the secured nature of the debt and the presence of
unsecured debt and unsecured non-debt liabilities. The unsecured
notes were downgraded to B2 from B1 because the new term loan
increases the amount of secured debt that is senior to the
unsecured notes. The proposed term loan will increase leverage to
4.4x (including Moody's standard analytical adjustments and
balance sheet debt of $2.4 billion as of December 31 on a pro
forma basis), weakly placing Tronox in the Ba3 rating category.
Net Debt / EBITDA on a pro forma basis will be 2.1x as of December
31. The firm will enhance its liquidity, until such time as it
invests its considerable cash balances.
Tronox indicated that it intends to use the loan proceeds for
general corporate purposes and/or potential strategic
alternatives, which Moody's expects will result in higher earnings
and cash flow for the firm. Moody's notes that the terms of the
proposed term loan will restrict the company from making share
repurchases, special dividends or materially increasing the
regular dividend. Once Moody's has better clarity on the use of
funds, it will reassess the appropriateness of the CFR in light of
the current TiO2 industry conditions. Moody's believes the TiO2
industry is currently in a state of flux, coming off of peak
cyclical market conditions realized in mid 2012, that resulted
from more than two years of improving pricing and strong demand.
The drop in demand and resulting softer prices experienced in the
second half of 2012 are expected to continue for the first half of
2013 and producers expect to see a pickup in demand by the second
half of 2013 with pricing coming back slowly.
Tronox's Ba3 CFR is supported by Tronox's position as the fifth
largest titanium dioxide global producer, geographically diverse
production assets, a global sales base, long-standing TiO2
customer relationships, economies of scale at its Hamilton plant,
access to its own chloride production technology and backward
vertical integration into the production of titanium ore following
the June 2012 acquisition of the Exxaro Mineral Sands business.
The ratings are limited by the cyclical nature of the TiO2
industry and narrow commodity product portfolio. The rating
reflects its strong operating performance, liquidity and credit
metrics, along with Moody's expectation that it will maintain
relatively high profit margins during 2013 compared to long-term
historical averages.
The rating outlook is stable, however the firm's credit metrics
(pro forma for the proposed term loan) will position it weakly in
the Ba3 rating category. The outlook incorporates Moody's
expectation that Tronox will grow earnings substantially after
investing its cash or, if it does not find investment
opportunities, repay debt such that its leverage metrics would be
supportive of the Ba3 CFR. Furthermore, the stable outlook also
incorporates Moody's expectations for a recovery in the TiO2
industry margins and TiO2 demand in the second half of 2013.
The ratings could be downgraded if there is further deterioration
in credit metrics due to worsening industry conditions, the firm
does not use its cash to make investments or repay debt and / or
Tronox's investments are expected to depress credit metrics for an
extended period. The rating is unlikely to be upgraded at this
time, however should the company decrease balance sheet debt to
less than $1.3 billion, continue to generate high margins and are
able to generate robust free cash flow Moody's would consider the
appropriateness of an upgrade.
The principal methodology used in this rating was the Global
Chemical Industry Methodology published in December 2009. Other
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the U.S., Canada and EMEA
published in June 2009.
Tronox Limited, headquartered in Stamford, CT, is the world's
fifth largest producer of titanium dioxide and a producer of
titanium ore feedstock through the recently acquired Exxaro
Mineral Sands business. It operates three plants in Hamilton, MS,
Botlek, The Netherlands, and Kwinana, Australia. Tronox's revenues
were $2.1 billion for the year ended December 31, 2012 (pro forma
for the Exxaro Mineral Sands acquisition).
VITRO SAB: Confirms Settlement With Bondholders
-----------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Vitro SAB and its U.S. bondholders told a bankruptcy
judge that they expect to sign a settlement March 1 ending
disputes that began when the Mexican glassmaker defaulted on $1.2
billion of bonds in May 2009.
The report relates that objections from government agencies have
held up the settlement. Allan Brilliant, Esq., a bondholder
lawyer, told the U.S. Bankruptcy Judge Harlin "Cooter" Hale Feb.
28 in Dallas that his clients were "very close" to an agreement
with the second of two agencies. Mr. Brilliant didn't say whether
the agencies were from the U.S. or Mexico.
According to the report, Vitro won Mexican court approval of a
reorganization plan opposed by some bondholders. Settlement talks
began after U.S. courts decided that the Mexican plan wouldn't be
enforced in the U.S. If papers for settlement approval are filed
by March 6, Judge Hale said he could hold an approval hearing on
March 14. The U.S. Trustee has been shown the draft agreement,
according to Vitro lawyer Andrew Leblanc. The U.S. Trustee told
Hale the agreement makes "economic sense."
"Major issues have been resolved," leaving only "drafting issues,"
Mr. Brilliant said.
The prospect of a settlement appeared in late January when Vitro
agreed to an injunction prohibiting the company and subsidiaries
from transferring assets outside of the ordinary course of
business.
After Vitro won Mexican court approval of a reorganization plan,
first Hale and then the U.S. Court of Appeals in New Orleans ruled
that the Mexican reorganization wasn't worthy of enforcement in
the U.S.
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.
In November, the U.S. Court of Appeals Judge Carolyn King ruled
that Vitro SAB won't be permitted to enforce its bankruptcy
reorganization plan in the U.S. She said that Vitro "has not
shown that there exist truly unusual circumstances necessitating
the release" preventing bondholders from suing subsidiaries.
VOLOS LLC: Case Summary & 4 Largest Unsecured Creditors
-------------------------------------------------------
Debtor: VOLOS, LLC
P.O. Box 2324
Branson, MO 65615
Bankruptcy Case No.: 13-60257
Chapter 11 Petition Date: February 25, 2013
Court: United States Bankruptcy Court
Western District of Missouri (Springfield)
Judge: Arthur B. Federman
Debtor's Counsel: Eric A. Farris, Esq.
FARRIS & ASSOCIATES
P.O. Box 490
Branson, MO 65616
Tel: (417) 334-7278
Fax: (417) 334-7503
E-mail: eric@farrislawgroup.com
Scheduled Assets: $2,750,000
Scheduled Liabilities: $1,773,963
A copy of the company's list of its four largest unsecured
creditors, filed together with the petition, is available for free
at http://bankrupt.com/misc/mowb13-60257.pdf
The petition was signed by Dimitrios Tsahiridis, managing member.
VWP INC: Voluntary Chapter 11 Case Summary
------------------------------------------
Debtor: VWP, Inc.
86 Old Rt 28
Fleishmanns, NY 12430
Bankruptcy Case No.: 13-60282
Chapter 11 Petition Date: February 26, 2013
Court: U.S. Bankruptcy Court
Northern District of New York (Utica)
Debtor's Counsel: Richard Croak, Esq.
314 Great Oaks Boulevard
Albany, NY 12203
Tel: (518) 690-4410
Fax: (518) 690-4435
E-mail: rcroak@richardcroak.com
Scheduled Assets: $1,573,600
Scheduled Liabilities: $895,500
The Company's list of its largest unsecured creditors filed with
the petition does not contain any entry.
The petition was signed by William Hrazanek, president.
W.R. GRACE: ART Enters Into CLG Hydrocracking Catalysts Agreement
-----------------------------------------------------------------
Advanced Refining Technologies LLC on Feb. 28 disclosed that it
has signed an agreement with Chevron Lummus Global (CLG) regarding
hydrocracking and lubes hydroprocessing catalysts. Under this
agreement, ART will have the exclusive right to sell CLG's
hydrocracking and lubes hydroprocessing catalysts to CLG's
licensees and other petroleum refiners for unit refills. The
agreement will streamline hydroprocessing catalyst supply and
improve technical service for refining customers by establishing
ART as the single point of contact for all their hydroprocessing
catalyst needs.
ART is a joint venture between subsidiaries of W. R. Grace & Co.
and Chevron Corporation. CLG is a joint venture between a
subsidiary of Chevron and CB&I's Lummus Technology group.
ART is a leading supplier of hydroprocessing catalysts, with a
portfolio of distillate hydrotreating, fixed bed resid
hydrotreating, and ebullated bed resid hydrocracking catalysts.
CLG is a world leader in hydroprocessing technology development
and commercialization, with licensing, engineering, and petroleum
refining expertise. Its portfolio includes hydrocracking
(ISOCRACKING), lubes hydroprocessing (ISODEWAXING and
ISOFINISHING), ebullating bed resid hydrocracking (LC-FINING), and
hydrotreating (ISOTREATING) technologies.
Scott Purnell, managing director of ART, commented, "We are
pleased to add hydrocracking and lubes hydroprocessing catalysts
to our current product portfolio. CLG's ISOCRACKING(R),
ISOTREATING(R), ISODEWAXING(R), and ISOFINISHING(R) catalysts are
proven products that will help our refining customers improve
quality and yield. With this new agreement, all of our customers'
hydroprocessing catalyst needs can be provided through a single
point of contact."
Leon de Bruyn, managing director of CLG, added, "We continually
invest to provide our licensees with world-class process
technology, catalysts and support services. This agreement
represents a unique combination of ART's well-established
portfolio of hydrotreating catalysts, extensive sales network and
manufacturing expertise, together with our hydrocracking and lubes
hydroprocessing catalyst technologies, and engineering and
technical know-how. It will allow our customers to receive
broader service and more advanced catalyst materials, and will
improve the competitiveness and profitability of their
refineries."
Under the agreement, ART will be the worldwide provider for
hydrocracking and lubes hydroprocessing catalysts. CLG will
continue to focus on its world-class technology development,
licensing, design, and revamp of hydrocracking, lubricant base
oil, resid hydrotreating, and resid hydrocracking plants globally.
Both ART and CLG customers will continue to have access to the
broad depth of Chevron technical service and hydroprocessing
operating expertise.
About Chevron Lummus Global
CLG -- http://www.chevronlummus.com-- licenses refining
hydroprocessing technologies and catalyst systems worldwide, and
is a 50-50 joint venture between Chevron U.S.A. INC. and CB&I's
Lummus Technology group. CLG's research and development staff is
continuously seeking advancements in catalyst and technology that
will improve operating economics. CLG is the leading process
technology licensor for alternate sources of fuels including: oil
sands bitumen, shale oil, biofuels, and extra heavy oils.
About W.R. Grace
Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA)
-- http://www.grace.com/-- supplies catalysts and silica
products, especially construction chemicals and building
materials, and container products globally.
The company and its debtor-affiliates filed for chapter 11
protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139).
David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura
Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP,
represent the Debtors in their restructuring efforts. The Debtors
hired Blackstone Group, L.P., for financial advice.
PricewaterhouseCoopers LLP is the Debtors' accountant.
Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent
the Official Committee of Unsecured Creditors. The Creditors
Committee tapped Capstone Corporate Recovery LLC for financial
advice. David T. Austern, the legal representative of future
asbestos personal injury claimants, is represented by Orrick
Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA.
Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla
R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official
Committee of Asbestos Personal Injury Claimants. The Asbestos
Committee of Property Damage Claimants tapped Scott Baena, Esq.,
and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod,
LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin
Naftalis & Frankel, LLP, represents the Official Committee of
Equity Security Holders.
W.R. Grace obtained confirmation of a plan co-proposed with the
Official Committee of Asbestos Personal Injury Claimants, the
Official Committee of Equity Security Holders, and the Asbestos
Future Claimants Representative. The Chapter 11 plan is built
around an April 2008 settlement for all present and future
asbestos personal injury claims, and a subsequent settlement for
asbestos property damage claims. Implementation of the Plan has
been held up by appeals in District Court from various parties,
including a group of prepetition bank lenders and the Official
Committee of Unsecured Creditors.
District Judge Ronald Buckwalter on Jan. 31, 2012, entered an
order affirming the bankruptcy court's confirmation of the Plan.
Bankruptcy Judge Judith Fitzgerald had approved the Plan on
Jan. 31, 2011.
On April 20, 2012, the company filed a motion with the Bankruptcy
Court to approve definitive agreements among itself, co-proponents
of the Plan, BNSF railroad, several insurance companies and the
representatives of Libby asbestos personal injury claimants, to
settle objections to the Plan. Pursuant to the agreements, the
Libby claimants and BNSF would forego any further appeals to the
Plan.
Grace is still awaiting the effective date of the Plan.
Bankruptcy Creditors' Service, Inc., publishes W.R. Grace
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
WAKE PARTNERS: Case Summary & 5 Unsecured Creditors
---------------------------------------------------
Debtor: Wake Partners, LLC
P.O. Box 53441
Fayetteville, NC 28305
Bankruptcy Case No.: 13-01161
Chapter 11 Petition Date: February 25, 2013
Court: United States Bankruptcy Court
Eastern District of North Carolina (Wilson)
Judge: Stephani W. Humrickhouse
Debtor's Counsel: George M. Oliver, Esq.
OLIVER FRIESEN CHEEK, PLLC
P.O. Box 1548
New Bern, NC 28563
Tel: (252) 633-1930
Fax: (252) 633-1950
E-mail: efile@ofc-law.com
Scheduled Assets: $1,966,432
Scheduled Liabilities: $1,911,333
A copy of the company's list of its five unsecured creditors,
filed together with the petition, is available for free at
http://bankrupt.com/misc/nceb13-01161.pdf
The petition was signed by James H. Smith, member manager.
Affiliate that filed separate Chapter 11 petition:
Petition
Debtor Case No. Date
------ -------- ----
William K. Hardin, III 12-00439 01/18/12
WESTERN UTAH COPPER: Default Judgment Entered v Davis Accounting
----------------------------------------------------------------
Bankruptcy Judge William T. Thurman granted the Motion for Entry
of Default Judgment filed by Western Utah Copper Company and
Copper King Mining Corporation in their clawback lawsuit against
Davis Accounting Group, P.C., a Utah entity; and Edwin Reese
Davis, an individual. The Defendants were served with the Summons
and Complaint, but have failed to appear, answer or otherwise
defend in the adversary proceeding, and the time allowed by law
for doing so has passed.
Judge Thurman ruled that the Pre-petition Transfers received by
the Defendants from June 30, 2009 to March 4, 2010 in the total
amount of $150,500 are each an avoidable preferential transfer
under 11 U.S.C. Sec. 547 and each a fraudulent transfer within the
meaning of 11 U.S.C. Sec. 548(a)(1)(B) and 544(b), and Utah Code
Ann. Sections 25-6-5(1)(b), 25-6-6(1), and 25-6-6(2). Each of the
preferential and fraudulent transfers are recoverable under 11
U.S.C. Sec. 550.
After the filing of the Plaintiffs' bankruptcy cases, the
Defendants deposited $53,036.43 of the Debtors' funds and refused
to return them. Judge Thurman said the Post-petition Transfer is
avoidance under 11 U.S.C. Sec. 549, and a violation of 11 U.S.C.
Sec. 362, and is recoverable under 11 U.S.C. Sec. 551.
The Court directed the Defendants to return $203,536.43, plus
interest at the legal rate from and after May 18, 2013, until paid
in full. The Court also said that any proofs of claims of the
Defendants filed against the bankruptcy estates of the Plaintiffs,
if any, are disallowed until the time as all amounts awarded under
the judgment are paid in full.
The lawsuit is, WESTERN UTAH COPPER COMPANY, and COPPER KING
MINING CORPORATION, Plaintiffs, v. DAVIS ACCOUNTING GROUP, P.C., a
Utah entity, et al., Defendants, Adv. Proc. No. 12-02204 (Bankr.
D. Utah.). A copy of the Court's Feb. 26 Default Judgment is
available at http://is.gd/zOQX7dfrom Leagle.com.
About Western Utah Copper
and Copper King
Milford, Utah-based Copper King Mining Corporation, aka Western
Utah Copper Company, filed for Chapter 11 bankruptcy protection on
May 18, 2010 (Bankr. D. Nev. Case No. 10-51912). The Company
estimated assets and debts at $100 million to $500 million in its
Chapter 11 petition.
The Company's affiliate, Western Utah Copper Company, filed a
separate Chapter 11 petition (Bankr. D. Nev. Case No. 10-51913) on
May 18, 2010. Western Utah Copper estimated assets at $50 million
to $100 million in assets and $500 million to $1 billion in debts.
The U.S. Bankruptcy Court for the District of Nevada approved in
August 2011 the intra-district transfer of the Chapter 11 case
of Copper King to the District of Utah (Case Nos. 10-29159 and 10-
30002).
Attorneys at Lewis and Roca LLP and Levene, Neale, Bender, Yoo &
Brill L.L.P. serve as counsel to the Debtors. McGuireWoods LLP
serves as counsel to the Official Committee of Unsecured
Creditors.
Reorganization Counsel for the Reorganized Debtors are Martin J.
Brill, Esq. -- mjb@lnbyb.com -- David B. Golubchik, Esq. --
dbg@lnbyb.com -- Krikor J. Meshefejian, Esq. -- kjm@lnbyb.com --
at Levene, Neale, Bender, Yoo & Brill L.L.P., in Los Angeles,
California.
Local Counsel for the Reorganized Debtors is Steven R. Skirvin,
Esq. -- srs@dkclaw.com -- at Law Offices of William E. Crockett,
in South Jordan, Utah.
WESTON INSURANCE: A.M. Best Assigns 'B' Financial Strength Rating
-----------------------------------------------------------------
A.M. Best Co. has assigned a financial strength rating of B (Fair)
and an issuer credit rating of "bb" to Weston Insurance Company
(Weston) (Tallahassee, FL). The outlook assigned to both ratings
is stable.
The assigned ratings of Weston reflect its start-up status as a
Florida wind-only writer of both personal and commercial property
lines of business and corresponding risk concentration. In
addition, the ratings recognize the company's high dependence on
reinsurance, resulting in elevated credit risk exposure. Given
the structure of Weston's initial take-out of policies from
Citizens Property Insurance Corporation, during its initial five
months of operation, 100% of the business written will be
reinsured via a quota-share agreement. While subsequently Weston
will migrate toward an extensive catastrophe reinsurance program,
overall reinsurance dependence is expected to remain elevated in
future years given the company's considerable exposure to
potential catastrophic events in its operating territory. In
addition, Weston faces certain execution risks, including the
effectiveness of its highly automated underwriting selection
process, the future availability and affordability of its planned
reinsurance program and the implementation of adequate rate levels
for the exposures being written.
Partially offsetting these negative rating factors are Weston's
underwriting guidelines that target a specific market and its
sophisticated rating segmentation process. In addition, the
allocation of the company's invested assets is highly
conservative, which reduces its investment risk. Furthermore, the
company's current and projected risk-adjusted capitalization is
adequate for its current rating level.
Negative rating actions would occur if Weston's planned financial
results materially deviate from its projections, the reinsurance
protection outlined does not materialize and/or the risk-adjusted
capitalization were to decline below an acceptable level required
by A.M. Best. In addition, material changes in the capital
structure or management of the company also could result in
negative rating actions.
WINDSORMEADE OF WILLIAMSBURG: Case Summary & Top Unsec. Creditors
-----------------------------------------------------------------
Debtor: Virginia United Methodist Homes of Williamsburg, Inc.
dba WindsorMeade of Williamsburg
7113 Three Chopt Road, Suite 300
Richmond, VA 23226
Bankruptcy Case No.: 13-31098
Chapter 11 Petition Date: March 1, 2013
Court: U.S. Bankruptcy Court
Eastern District of Virginia (Richmond)
Judge: Hon. Kevin R. Huennekens
Debtor's Counsel: DLA PIPER LLP (US)
- and -
HIRSCHLER FLEISCHER, P.C.
Robert S. Westermann, Esq.
2100 East Cary Street
The Edgeworth Building
Richmond, VA 23223
Tel: 804-771-5610
Fax: 804-644-0957
E-mail: rwestermann@hf-law.com
rmcburney@hf-law.com
Debtor's
Restructuring
Advisor: DELOITTE FINANCIAL ADVISORY SERVICES LLP
Debtor's Special
Bond Counsel: McGUIRE WOODS LLP
Debtor's Claims,
Noticing and
Solicitation
Agent: BMC GROUP, INC
Counsel to
UMB Bank, NA: Jennifer McLain McLemore, Esq.
CHRISTIAN & BARTON, LLP
909 East Main Street, Suite 1200
Richmond, VA 23219-3095
Tel: 804-697-4129
Fax: 804-697-6129
E-mail: jmclemore@cblaw.com
Estimated Assets: $100,000,001 to $500,000,000
Estimated Debts: $100,000,001 to $500,000,000
The petition was signed by Christopher P. Henderson, the Debtor's
president.
List of Debtors' 9 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Spectrum Communications, Inc. Vendor $2,900
Attn: Laurie Walters
1349 East Garrison Blvd, Suite B
Gastonia, NC 28054
Tel: 704-865-6300
Michel Tyler Ragan Vendor $1,523
1605 McDaniel Street
Portsmouth, VA 23704
Tel: 757-749-2186
Home Depot Credit Services Vendor $1,256
Dept 32 - 2139134054
P.O. Box 183175
Columbus, OH 43218-3175
Tel: 800-685-6691
Cerner Corporation Vendor $908
Sam Rust Seafood, Inc. Vendor $872
Kiwanis Club of Williamsburg Vendor $250
Harry Jeavons Vendor $125
Riverside Regional Vendor $85
Medical Center
Hampton Roads Urology- Vendor $7
Williamsburg
WJO INC: Court Says Ciardi Ciardi Conversion Motion Not Actionable
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Pennsylvania
declared as "moot" the motion of Ciardi Ciardi & Astin, counsel to
WJO, Inc., for the conversion of the Debtor's case to a case under
Chapter 7 of the Bankruptcy Code.
As reported in the TCR on Feb. 15, 2013, Albert A. Ciardi, III,
Esq., recounts that since Alfred T. Giuliano's appointment as
Chapter 11 trustee, and the firing of the Debtor's 100%
shareholder, Dr. William J. O'Brien, III, by the Trustee, the
Debtor has experienced negative accounts receivable, increased
costs, expenses, and legal fees, and has failed to put forth a
plan of reorganization. Additionally, the Debtor has failed to
conclude a sale which could permit a plan of reorganization to be
confirmed.
About WJO Inc.
Bristol, Pennsylvania-based WJO, Inc., operates six family
practices located in Newtown, Bristol, Bensalem, Bustleton, South
Philadelphia, and Bethlehem, Pennsylvania and consists of Board
Certified Osteopathic Physicians specializing in Family Medicine.
Prior to the petition date, and to allow the Company to
restructure effectively, HyperOx Inc., HyperOx I, LP, HyperOx
III, LP, and East Coast TMR, Inc., were merged into WJO.
WJO filed for Chapter 11 bankruptcy protection (Bankr. E.D. Pa.
Case No. 10-19894) on Nov. 15, 2010. The Debtor disclosed
$19,923,802 in assets and $6,805,255 in liabilities as of the
Chapter 11 filing.
Holly Elizabeth Smith, Esq., and Thomas Daniel Bielli, Esq., at
Ciardi Ciardi & Astin, P.C., serve as the Debtor's bankruptcy
counsel. Pond Lehocky Stern Giordano serves as the Debtor's
special counsel to represent it in worker's compensation
proceedings pertaining to the Therapeutic Magnetic Resonance
treatments. Patrick Yun serves as the Debtor's financial advisor.
Attorneys at Keifer & Tsarouhis LLP serve as counsel to the
official committee of unsecured creditors. ParenteBeard LLC
serves as the Committee's accountant and financial advisor.
The United States Trustee has appointed David Knowlton as patient
care ombudsman in the case. The Ombudsman is represented in the
case by Karen Lee Turner, Esq., at Eckert Seamans Cherin &
Mellott, LLC, as counsel.
Tristate Capital Bank, the cash collateral lender, is represented
in the case by lawyers at Benesch Friedlander Coplan & Aronoff
LLP.
On July 3, 2012, Roberta A. DeAngelis, U.S. Trustee for Region 3,
obtained permission from the Hon. Jean K. Fitzsimon of the U.S.
Bankruptcy Court for the Eastern District of Pennsylvania to
appoint Alfred T. Giuliano as Chapter 11 trustee of the bankruptcy
estate of WJO, Inc. Maschmeyer Karalis P.C. serves as the Chapter
11 Trustee's general bankruptcy counsel.
WORKMEN'S AUTO: A.M. Best Cuts Financial Strength Rating to 'C+'
----------------------------------------------------------------
A.M. Best Co. has downgraded the financial strength rating to C+
(Marginal) from B- (Fair) and issuer credit rating to "b-" from
"bb-" of Workmen's Auto Insurance Company (WAIC) (Los Angeles,
CA). The outlook for both ratings is negative.
The rating actions reflect WAIC's rapid decline in policyholder
surplus caused by the increased frequency and severity of Florida
personal injury protection (PIP) and California physical damage
claims that have resulted in significant adverse loss reserve
development. Consequently, these heightened underwriting losses
along with elevated PIP losses in Oregon, have led to a
significant decline in WAIC's capitalization in recent years, well
below the company's originally projected levels.
These negative rating actions are partially offset by WAIC's
strategic downsizing of its written premium through multiple rate
increases, cancellation of unprofitable agents, stricter
underwriting and internal controls, and actions to reduce
expenses. In addition, the ratings reflect the continued
financial support provided by the company's owners.
Further downward movement in the ratings as indicated by the
negative outlook could occur should there be continued
deterioration in WAIC's risk-adjusted capitalization.
YPCRENTAL LLC: Case Summary & 4 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: YPCRental LLC
1953 Mahre Dr
Park City, UT 84098
Bankruptcy Case No.: 13-21715
Chapter 11 Petition Date: February 25, 2013
Court: United States Bankruptcy Court
District of Utah (Salt Lake City)
Judge: William T. Thurman
Debtor's Counsel: Spencer Park, Esq.
OLSEN & OLSEN
8142 South St.
Midvale, UT 84047
Tel: (801) 255-7176
Fax: (801) 255-8067
E-mail: spencer@olsenfamilylaw.net
Scheduled Assets: $1,460,100
Scheduled Liabilities: $1,293,500
A copy of the Company's list of its four unsecured creditors,
filed together with the petition, is available for free at
http://bankrupt.com/misc/utb13-21715.pdf
The petition was signed by William Gayler, manager.
Affiliate that filed separate Chapter 11 petition:
Petition
Debtor Case No. Date
------ -------- ----
William Gayler 09031603 11-16-2009
ZACKY FARMS: Plan Filing Period Extended Until April 5
------------------------------------------------------
The U.S. Bankruptcy Court has extended Zacky Farms LLC's exclusive
period to file a Chapter 11 Plan until April 5, 2013, and its
exclusive period to solicit acceptances for that plan until
June 8, 2013. The Debtor said that while progress has been made
with respect to negotiations with the Official Committee of
Unsecured Creditors and the DIP Facility Lender, those
negotiations require additional time to complete, "especially
because the sale of the Debtor's business is not yet complete."
About Zacky Farms
Fresno, California-based Zacky Farms LLC, whose operations include
the raising, processing and marketing of poultry products, filed
for Chapter 11 bankruptcy protection (Bankr. E.D. Calif. Case No.
12-37961) on Oct. 8, 2012 in Sacramento. The company has roughly
1,000 employees and operates in multiple plants, farms and offices
in California, including operations in Los Angeles, Fresno,
Tulare, Kings, San Joaquin and San Bernardino Counties. The
company blames high feed prices for losses in recent years.
The Company has plans to sell itself to pay creditors.
Bankruptcy Judge Thomas Holman presides over the case. The
petition was signed by Keith F. Cooper, the Debtor's sole manager.
An official committee of unsecured creditors has been appointed in
the case. Lowenstein Sandler represents the Committee. The
Lowenstein team includes Kenneth A. Rosen, Bruce S. Nathan,
Jeffrey D. Prol, Wojciech F. Jung and Keara Waldron.
The Debtor's DIP lender, The Robert D. Zacky and Lillian D. Zacky
Trust U/D/T dated July 26, 1988, is represented by Thomas Walper,
Esq., at Munger Tolles & Olson LLP; and McKool Smith LLP.
ZACKY FARMS: Dreisbach Replacement Lien to Include Cash Deposit
---------------------------------------------------------------
Zacky Farms, LLC, and Dreisbach Enterprises, Inc., have entered
into a stipulation modifying Paragraph 4(e) of the Final Cash
Collateral Order filed on Nov. 13, 2012, such that:
* The replacement lien granted to Dreisbach pursuant to
Paragraph 4(e) will include a cash deposit provided to Dreisbach
by Zacky in the amount of $168,176.76 as well as the post-petition
goods held by Dreisbach;
* Dreisbach will retain the Deposit and not apply the Deposit to
the payment of its Invoices without further order of the Court.
* Dreisbach will release the Deposit back to Zacky once the
value of the post=petition inventory that Dreisbach would be able
to obtain through a lien sale is sufficient to fully cover its
Pre-Petition Warehouse Lien.
As reported in the TCR on Dec. 4, 2012, the Bankruptcy Court
granted Zacky final authority to obtain up to $71 million in DIP
financing from the Robert D. Zacky and Lillian D. Zacky Trust to
finance its reorganization. The DIP Order also permits Zacky
Farms to use cash tied to a pre-bankruptcy loan with the Trust, as
successor by assignment to Wells Fargo Bank N.A.
As security for unpaid invoices totaling $168,176.76 owing to
Dreisbach with respect to the 45,675 cases of "chicken frank" and
"beef frank" product it received prior to the Petition Date at its
warehouse facility for the account of Zacky, the Final Cash
Collateral Order had provided Dreisbach a replacement lien on all
post-petition inventory of the Debtor.
A copy of the Final Cash Collateral Order is available at:
http://bankrupt.com/misc/zacky.doc292.pdf
About Zacky Farms
Fresno, California-based Zacky Farms LLC, whose operations include
the raising, processing and marketing of poultry products, filed
for Chapter 11 bankruptcy protection (Bankr. E.D. Calif. Case No.
12-37961) on Oct. 8, 2012 in Sacramento. The company has roughly
1,000 employees and operates in multiple plants, farms and offices
in California, including operations in Los Angeles, Fresno,
Tulare, Kings, San Joaquin and San Bernardino Counties. The
company blames high feed prices for losses in recent years.
The Company has plans to sell itself to pay creditors.
Bankruptcy Judge Thomas Holman presides over the case. The
petition was signed by Keith F. Cooper, the Debtor's sole manager.
An official committee of unsecured creditors has been appointed in
the case. Lowenstein Sandler represents the Committee. The
Lowenstein team includes Kenneth A. Rosen, Bruce S. Nathan,
Jeffrey D. Prol, Wojciech F. Jung and Keara Waldron.
The Debtor's DIP lender, The Robert D. Zacky and Lillian D. Zacky
Trust U/D/T dated July 26, 1988, is represented by Thomas Walper,
Esq., at Munger Tolles & Olson LLP; and McKool Smith LLP.
* Moody's Revises Outlook on Global Paper Market to Positive
------------------------------------------------------------
Moody's Investors Service revised its outlook for the Global Paper
and Forest Products Industry to positive from negative. The
outlook change is based on the expectation that the industry's
global operating income will increase by about 6% over the next 12
to 18 months, the rating agency says in its industry outlook
update on the sector.
"Earnings from North American paper packaging and wood product
companies will drive most of the growth for the industry in the
next year or so," says Moody's Vice President and Senior Credit
Officer Ed Sustar, in "Outlook for Global Paper and Forest
Products Revised to Positive." "Paper packaging and wood products
is the primary output for about 75% of Moody's-rated paper and
forest products companies, and pricing and/or demand improvements
in those two segments will make up for the declining earnings in
other segments."
Operating income growth from North American paper packaging and
wood product companies will offset the weaker earnings facing
European and Latin American producers, as well as the ongoing
decline in paper consumption in most developed markets, Sustar
says. "The operating earnings of most of our rated North American
paper packaging producers will improve as a result of higher
pricing, modest demand increases, synergies from recent
acquisitions and productivity and expansion projects." North
American paper packaging companies account for almost 60% of the
rated global industry's operating profit.
But conditions will remain challenging for most Moody's-rated
European paper producers, which are likely to see their operating
income decline in the next year or so due to lower prices and
demand for paper. European paper volumes should decline because of
persistent euro area macroeconomic weakness and the structural
decline in demand for paper. Similarly, Latin American pulp
producers' operating income will decline due to weakening prices
for market pulp. In addition, the ramping-up of three significant
eucalyptus pulp mills in Brazil and Uruguay will test the global
market's ability to absorb a significant spike in supply in the
coming 12 to 18 months.
* Non-Financial Corp. Debt Ratings Are Doing Well, Says Moody's
---------------------------------------------------------------
Moody's global non-financial corporate debt ratings performed
solidly in 2012, the rating agency says in a new report.
Additionally, the five-year performance of Moody's ratings from
January 2008 through December 2012 was strong, a period that
included the Great Recession.
The report, "A Solid Performance in 2012 for Moody's Non-Financial
Corporate Debt Ratings," looks at how Moody's non-financial
corporate ratings performed in meeting the objectives of rank-
ordering credit risk and assigning low ratings to defaulters well
in advance of default.
"We examined the one-year performance of our non-financial
corporate debt ratings as they were positioned in January 2012, as
well as the five-year performance of these ratings as they were
positioned in January 2008," says Moody's Senior Vice President
Kenneth Emery. "Given the record high default rates reached in
2009, the 2008-12 period was especially useful for assessing the
value of our ratings in meeting their objectives."
Among the rating agency's main findings were that one-year
cumulative default rates through December 2012 sequentially
increased moving down the rating scale, demonstrating that the
ratings provided a strong rank-ordering of credit risk.
"Fifty of the 57, or 88%, of defaulters in 2012 were rated B3 or
lower one year prior to default, while six were rated B2 and one
was unrated, indicating that our ratings provided strong advance
warning of default," Emery says. Moody's B2 and B3 ratings are
deeply speculative grade, being five and six rating levels,
respectively, below investment grade.
The five-year performance of Moody's January 2008 corporate debt
ratings likewise was found to be strong. Five-year cumulative
default rates through December 2012 also sequentially increased
moving down the rating scale. Of the 421 issuers that defaulted
during the 2008-12 period, 399, or 95%, had speculative grade
ratings of B1 or lower a year before default.
* New Internet Gaming Law Good for New Jersey Casino Industry
-------------------------------------------------------------
Legalization of Internet gaming in New Jersey is credit positive
for the Atlantic City casino industry because licenses to offer
Internet gaming are limited to the city's existing casino
operators and their partners, says Moody's Investors Service.
The new law is also likely to expand the pool of potential
gamblers in the state, says the Moody's report entitled, "Approval
of Internet Gaming in New Jersey Is Credit Positive for Atlantic
City Operators." New Jersey is the third state in the nation after
Nevada and Delaware to legalize online gaming.
"The new law has several features that stand to attract more
players to Atlantic City," said Moody's VP -- Senior Credit
Officer Peggy Holloway, author of the report. "It goes well beyond
online poker by allowing casino operators to offer any game that
has been approved for use in a casino, such as slots and blackjack
and other table games, subject to a suitability determination."
The determination will be made by the New Jersey Division of
Gaming Enforcement, which will also offer directives on a
provision of the law that permits non-residents of New Jersey to
gamble online, as long as they are physically present in the
state. The law also allows NJDGE to reach agreements with other
states to expand the pool of players.
"Online gaming will not start immediately, given the need for
NJDGE rulings," said Holloway. "While there is also a risk of
legal challenges from the racing industry or others, which could
slow adoption, the law is a shot in the arm for Atlantic City's 12
struggling operators, who have experienced weak gaming revenue
trends amid new competition from neighboring jurisdictions."
Caesars Entertainment Corp. (Caa1 negative) is likely to be the
biggest beneficiary. It already has approximately a 40% market
share in Atlantic City, strong brands and experience operating
online gaming internationally. Borgata, owned equally by Boyd
Gaming Corp. (B2 stable) and MGM Resorts International (B2
stable), will also benefit.
"Other operators in Atlantic City will face more of a challenge as
they will need to partner with existing online operators or
independently secure their own expertise, software and
technology," said Holloway. "These factors, an early presence and
strong branding are keys to success online."
* Delinquencies, Foreclosures Down in January, LPS Report Shows
---------------------------------------------------------------
Lender Processing Services, Inc., a provider of integrated
technology, data and analytics to the mortgage and real estate
industries, reports the following "first look" at January 2013
month-end mortgage performance statistics derived from its loan-
level database representing approximately 70 percent of the
overall market.
Total U.S. loan delinquency rate (loans 30 or more days past due,
but not in foreclosure): 7.03%
Month-over-month change in delinquency rate: -2.03%
Year-over-year change in delinquency rate: -8.35%
Total U.S. foreclosure pre-sale inventory rate: 3.41%
Month-over-month change in foreclosure presale inventory rate: -
0.82%
Year-over-year change in foreclosure presale inventory rate:
-19.39%
Number of properties that are 30 or more days past due, but not in
foreclosure: (A) 3,506,000
Number of properties that are 90 or more days delinquent, but not
in foreclosure: 1,531,000
Number of properties in foreclosure pre-sale inventory:
(B) 1,703,000
Number of properties that are 30 or more days delinquent or in
foreclosure: (A+B) 5,208,000
States with highest percentage of non-current* loans:
FL, MS, NJ, NV, NY
States with the lowest percentage of non-current* loans:
MT, AK, WY, SD, ND
*Non-current totals combine foreclosures and delinquencies as a
percent of active loans in that state.
Notes:
(1) Totals are extrapolated based on LPS Applied Analytics' loan-
level database of mortgage assets.
(2) All whole numbers are rounded to the nearest thousand.
The company will provide a more in-depth review of this data in
its monthly Mortgage Monitor report, which includes an analysis of
data supplemented by in-depth charts and graphs that reflect trend
and point-in-time observations.
* CFO Economic, Business Optimism Improve, FEI/Baruch Survey Shows
------------------------------------------------------------------
According to the most recent quarterly survey conducted by
Financial Executives International (FEI) and Baruch College's
Zicklin School of Business, Chief Financial Officers entered 2013
with improved optimism toward the global and U.S. economies and
their businesses, though most still believe a recovery is over a
year out. While they still carry the burden of concerns around
increasing revenue and controlling expenses, their capital
spending is at a normal rate and they are not making drastic cuts
to their workforce.
The "CFO Outlook Survey," which polls CFOs of public and private
businesses in the U.S. and Europe (Italy and France) on their
economic and business confidence and expectations, found that CFOs
were more confident than where they stood last quarter. The
quarterly optimism index for U.S. CFOs toward their own businesses
increased to 69.50 (from 62.7 in the third quarter). Their
confidence in the global economy jumped eight points to 52.2, from
its near survey low in November 2012 (44.2). U.S. CFOs also
reported increased optimism in the U.S. economy this quarter,
moving five points to 56.7 (from 51.6 in Q3).This quarter, CFOs in
the EU demonstrated improved optimism in these areas from last
quarter as well -- their confidence in the global economy rose six
points to 51.30 (from 45.2 in Q3), and confidence in their own
businesses saw a slight increase (57.50 from 55.70 in Q3). U.S.
CFOs continued to forecast higher projections for their business
than did their European counterparts, with the highest increases
in the areas of capital spending (17%) and technology spending
(11%) over the next 12 months. In the U.S., CFOs are also
anticipating a nearly 10 percent rise in net earnings and revenue.
European CFOs on average expect more subtle increases in these
areas, with the highest increases in revenue (4%) and net earnings
(3%).
Similar to previous years, revenue growth remains the top business
challenge that U.S. CFOs are facing for the first half of 2013
(23% of CFOs in the U.S.; 21% of CFOs in Europe). European CFOs
see expense control as their biggest challenge, and it was also
high on the list for U.S. CFOs (28% in Europe; 14% in the U.S.).
While competition was the third most common choice for EU CFOs
(18%); regulatory issues was the third top choice for U.S. CFOs
(14%). In terms of economic worries, U.S. CFOs were most
concerned about government regulation and consumer
spending/demand. In the EU, CFOs' concerns over falling economic
production or recession were slightly higher than their concern
over consumer spending.
CFOs addressed their expectations about the fate of the Eurozone,
which has been a moderate concern over the past few quarters.
When asked to rate their concern on a scale of one (not concerned)
to five (very concerned), more than half of all European CFOs
(72%) selected a "three or higher," and the large majority of U.S.
CFOs selected a "three or higher" (86%). CFOs also believe that a
recovery in the European economy is more than a year out, with 71
percent of U.S. CFOs and 65 percent of EU CFOs predicting that a
recovery would not begin to take place until 2014 or beyond. When
asked about the timeframe that a U.S. economic recovery would take
place, this quarter, nearly half (43%) of U.S. CFOs believed a
recovery would be delayed until at least 2014. About a fifth
(22%) think the U.S. would recover at some point in 2013, and over
a third (35%) believe the U.S. is already in the midst of a
recovery.
"CFO optimism has understandably fluctuated over the past several
years, but the fact that optimism levels are near or surpassed
where they stood a year ago is an encouraging indicator for the
start of 2013," said Linda Allen, Professor of Economics and
Finance for the Zicklin School of Business at Baruch College.
"While CFOs appear to be more confident this quarter, they remain
realistic -- most have some serious concerns about keeping their
companies profitable. On a macro -- level, most believe that the
instability of the U.S. and European economies is a longer-term
issue that will take more than a year to resolve."
CFOs Believe Congress Will Reach U.S. Debt Crisis Outcome
CFOs in both the U.S. and abroad are closely watching Congress'
actions surrounding the U.S. debt crisis and critical deadlines
for sequestration by the start of March. By and large, they are
hoping that Congress will avoid a default on the Government debt,
followed by a deficit reduction agreement and U.S. debt downgrade,
as more than half of respondents (59% in the U.S., 51% in the EU)
indicated that this outcome would have the most negative impact on
their business. When asked to predict the most likely outcome by
Congress, at the time of polling, the majority of U.S. CFOs (67%)
believe that Congress will implement short term increases in the
debt ceiling, followed by incremental deficit reduction
agreements. CFOs in Europe also offered their predictions on the
outcome, and comparably, the majority (59%) believes the most
likely outcome will be a long-term agreement to reduce the
deficit. About 13 percent of CFOs in the U.S. three percent in
Europe anticipate that sequestration will be triggered, with no
government shutdowns.
"Congress' ability to control the U.S. debt and deficits will
continue to be front and center in the minds of CFOs in the next
few months," said Marie Hollein, President and CEO of Financial
Executives International. "CFOs in both regions trust that
Congress will ultimately come to an agreement, but U.S. CFOs
believe that these actions will take place incrementally as we
reach key deadlines. With the potential threat of sequestration
now looming, the way in which Congress ultimately responds will
likely have a significant impact on their optimism this year."
U.S. CFO respondents were also asked about the impact of proposed
recommendations by the Financial Stability Oversight Council
regarding money market mutual fund reform. Fifty-eight percent of
U.S. CFOs felt that that proposed recommendations would not make
them less inclined to use money market funds as a liquidity
instrument, but the remaining 42 percent stated this would impact
their use of these funds.
CFOs Continue to Maintain Workforce; U.S. Still Planning to Hire
CFOs in the U.S expect little change in the unemployment rate in
the next six to 12 months. On average, they anticipate it may
increase slightly, but will remain below eight percent. European
CFOs also expect the unemployment rate to remain around 10 percent
within the year. This quarter, most CFOs (83% in the U.S. and 70%
in Europe) stated that they have not been forced to reduce
headcount over the past 12 months. Forward looking hiring among
European respondents was split: 42 percent of European CFOs plan
to hire additional employees within the next six months, but a
similar number (46%) indicated they will not be hiring. In
comparison, the majority of U.S. CFOs (63%) are planning to hire
in the next six months, while only 29 percent do not have hiring
plans.
Other findings from the CFO Outlook Survey include a CFOs' level
of activity in capital spending, their cash positions and access
to credit:
-- Capital Spending: CFOs in Europe (57%) continue to spend
cautiously in the current climate, along with just over one third
(34%) of U.S. CFOs. This quarter however, more than half (57%) of
CFOs in the U.S. stated that they are now spending at a normal
rate or making ambitious investments in capital expenditures.
Only 7 to 8 percent of CFOs in the U.S. and Europe are holding on
all investments. Of those CFOs in the U.S. that are making a
capital expenditure, they are primarily directing investments
toward technology (62%), followed by machinery (30%) and
property/land (20%). In Europe, more than half (52%) of those
making a capital expenditure are investing in technology, followed
by expansion into new and emerging markets (31%) and machinery
(30%).
-- Capital and Equity: CFO respondents this quarter were not cash-
constrained and were currently holding an average 13 percent of
their company's assets in cash (14% for U.S. CFOs and 12% for
European CFOs). U.S. CFOs on average held 61 percent of their
company's balance sheets in equity, compared with 29 percent in
long-term debt obligations. In contrast, CFOs in Europe had
approximately 29 percent in long term debt, but about 48 percent
in equity. CFOs were most commonly using banks to access capital,
followed by equity. The majority of CFOs did not feel that their
company is capital constrained in terms of access to funds either
from banks or capital markets (81% in the U.S. and 68% in Europe).
Nearly a third of CFOs in Europe (32%) feel capital constrained,
compared with a small fraction (19%) of those in the U.S.
-- Access to Credit: Eighty-one percent of U.S. CFOs and 66
percent of European CFOs are anticipating no change in their
credit situation in the next six months. Fourteen percent of U.S.
CFOs believe that it will be easier to access credit six months
from now. In Europe, nearly a third of respondents (29%) believe
access to credit will be more difficult. This is an improvement
from one year ago, when 54 percent of respondents in Europe felt
credit would worsen.
Additional Findings: More U.S. CFOs Considering Increasing Budgets
and Taking Steps Toward Cyber security
While the large majority of CFOs in both regions have not
experienced a cyber-attack on their IT systems within the past 12
months (84% of U.S. CFOs and 96% of EU CFOs), respondents varied
by region in their actions toward improving their cyber security.
Sixty-nine percent of U.S. CFOs have considered increasing their
security budgets in light of the increasing number of major
companies that have faced cyber-attacks in the past few years,
compared with close to a third (32%) of EU CFOs planning to do so.
Similarly, over three-quarters (76%) of U.S. CFOs stated that they
are taking specific steps to protect against cyber-attacks -- the
most common actions include establishing off-site backup
systems/plans (62%) and implementing a cyber-security/IT plan
(51%). Among European CFO respondents, only 40 percent stated
that they were taking steps to combat cyber-attacks.
Additional findings include detail cyber-attacks CFOs have faced,
as well as CFOs plans to retain talent.
Full survey results and historical data comparisons are available
at http://www.financialexecutives.orgor from Nicole Madison at
nicole.madison@fticonsulting.com
The study is also available online at the Financial Executives
Research Foundation bookstore and on the Baruch College home page
at http://www.baruch.cuny.edu
Overview of the Survey:
This quarter, the CFO Outlook Survey, conducted by Financial
Executives International and Baruch College's Zicklin School of
Business, interviewed 143 corporate CFOs from the United States
and 89 corporate CFOs from Italy and France electronically from
January 25th -- February 12th. CFOs from both public and private
companies and from a broad range of industries, revenues and
geographic areas, including some off-shore companies, are
represented. The U.S. survey respondents are members of Financial
Executives International; France survey respondents are members of
Association Nationale Des Directeurs Financiers Et Du Controle De
Gestion (DFCG) and Italy survey respondents are members of
Associazione Nazionale Direttori Amministrativi E Finanziari
(ANDAF). Financial Executives International has been conducting
surveys gauging the country's economic outlook from the
perspective of CFOs for more than 12 years.
About FEI
Financial Executives International --
http://www.financialexecutives.org-- is an advocate for the views
of corporate financial management. Its 15,000 members hold
policy-making positions as chief financial officers, treasurers
and controllers at companies from every major industry. FEI
enhances member professional development through peer networking,
career management services, conferences, teleconferences and
publications. Members participate in the activities of 86
chapters, 74 in the U.S., 11 in Canada and 1 in Japan. FEI is
headquartered in Morristown, NJ, with additional offices in
Washington, D.C. and Toronto.
About Baruch
Baruch College -- http://www.baruch.cuny.edu-- is a senior
college of the City University of New York. The Zicklin School of
Business at Baruch College is the largest and most diverse AACSB
accredited collegiate school of business in the nation. Baruch
has a long tradition of producing accounting and finance graduates
who become leaders as CPAs and CFOs.
* CoreLogic Reports 61,000 Completed Foreclosures in January
------------------------------------------------------------
CoreLogic(R), a residential property information, analytics and
services provider, on Feb. 28 released its National Foreclosure
Report, which provides data on completed U.S. foreclosures and the
overall foreclosure inventory. According to CoreLogic, there were
61,000 completed foreclosures in the U.S. in January 2013, down
from 75,000 in January 2012, a year-over-year decrease of 17.8
percent. On a month-over-month basis, completed foreclosures rose
from 56,000* in December 2012 to the January level of 61,000, an
increase of 10.5 percent. As a basis of comparison, prior to the
decline in the housing market in 2007, completed foreclosures
averaged 21,000 per month between 2000 and 2006. Completed
foreclosures are an indication of the total number of homes
actually lost to foreclosure. Since the financial crisis began in
September 2008, there have been approximately 4.2 million
completed foreclosures across the country.
Approximately 1.2 million homes were in some stage of foreclosure
in the U.S., known as the foreclosure inventory, as of January
2013 compared to 1.5 million in January 2012, a 21 percent year-
over-year decrease. This was the 15th consecutive month with a
year-over-year decline. Month over month, the foreclosure
inventory was down 3.3 percent from December 2012 to January 2013.
The foreclosure inventory as of January 2013 represented 2.9
percent of all homes with a mortgage compared to 3.5 percent in
January 2012.
"The backlog of distressed assets continues to fade as the
foreclosure inventory has fallen to a level not seen since mid-
2009, with less than 3 percent of all mortgages in foreclosure,"
said Mark Fleming, chief economist for CoreLogic. "The
improvement is widespread as only six states and 13 of the largest
100 metro areas had an increase in the foreclosure rate year over
year."
"We still have over a million homes in some stage of foreclosure
which is too high, but the continuing downward trend in completed
foreclosures is a very positive signal that there is a light at
the end of the tunnel," said Anand Nallathambi, president and CEO
of CoreLogic. "We expect this trend will continue in 2013 as the
housing market stabilizes and purchase activity picks up."
Highlights as of January 2013:
-- The five states with the highest number of completed
foreclosures for the 12 months ending in January 2013 were:
California (96,000), Florida (95,000), Michigan (74,000), Texas
(59,000) and Georgia (50,000). These five states account for
almost half of all completed foreclosures nationally.
-- The five states with the lowest number of completed
foreclosures for the 12 months ending in January 2013 were:
District of Columbia (96), Hawaii (458), North Dakota (508), Maine
(538) and West Virginia (602).
-- The five states with the highest foreclosure inventory as a
percentage of all mortgaged homes were: Florida (10.0 percent),
New Jersey (7.2 percent), New York (5.1 percent), Nevada (4.7
percent) and Illinois (4.6 percent).
-- The five states with the lowest foreclosure inventory as a
percentage of all mortgaged homes were: Wyoming (0.4 percent),
Alaska (0.6 percent), North Dakota (0.7 percent), Nebraska (0.8
percent) and Colorado (0.9 percent).
*December data was revised. Revisions are standard, and to ensure
accuracy, CoreLogic incorporates newly released data to provide
updated results.
Table 1: Judicial Foreclosure States Foreclosure Ranking (Sorted
by Completed Foreclosures)
Table 2: Non-Judicial Foreclosure States Foreclosure Ranking
(Sorted by Completed Foreclosures)
Table 3: Foreclosure Data for Select Large Core Based Statistical
Areas (CBSAs) (Sorted by Completed Foreclosures)
Figure 1: Number of Mortgaged Homes per Completed
ForeclosureJudicial Foreclosure States vs. Non-Judicial
Foreclosure States (3-month moving average)
Figure 2: Foreclosure Inventory as of January 2013Judicial
Foreclosure States vs. Non-Judicial Foreclosure States
Figure 3 - Foreclosure Inventory by State Map
Methodology The data in this report represent foreclosure activity
reported through January 2013.
This report separates state data into judicial vs. non-judicial
foreclosure state categories. In judicial foreclosure states,
lenders must provide evidence to the courts of delinquency in
order to move a borrower into foreclosure. In non-judicial
foreclosure states, lenders can issue notices of default directly
to the borrower without court intervention. This is an important
distinction since judicial states, as a rule, have longer
foreclosure timelines, thus affecting foreclosure statistics.
A completed foreclosure occurs when a property is auctioned and
results in the purchase of the home at auction by either a third
party, such as an investor, or by the lender. If the home is
purchased by the lender, it is moved into the lender's real estate
owned (REO) inventory. In "foreclosure by advertisement" states,
a redemption period begins after the auction and runs for a
statutory period, e.g., six months. During that period, the
borrower may regain the foreclosed home by paying all amounts due
as calculated under the statute. For purposes of this Foreclosure
Report, because so few homes are actually redeemed following an
auction, it is assumed that the foreclosure process ends in
"foreclosure by advertisement" states at the completion of the
auction.
The foreclosure inventory represents the number and share of
mortgaged homes that have been placed into the process of
foreclosure by the mortgage servicer. Mortgage servicers start
the foreclosure process when the mortgage reaches a specific level
of serious delinquency as dictated by the investor for the
mortgage loan. Once a foreclosure is "started," and absent the
borrower paying all amounts necessary to halt the foreclosure, the
home remains in foreclosure until the completed foreclosure
results in the sale to a third party at auction or the home enters
the lender's REO inventory. The data in this report accounts for
only first liens against a property and does not include secondary
liens. The foreclosure inventory is measured only against homes
that have an outstanding mortgage. Homes with no mortgage liens
can never be in foreclosure and are therefore excluded from the
analysis. Approximately one-third of homes nationally are owned
outright and do not have a mortgage. CoreLogic has approximately
85 percent coverage of U.S. foreclosure data.
About CoreLogic
CoreLogic -- http://www.corelogic.com-- is a property
information, analytics and services provider in the United States
and Australia. The Company's combined data from public,
contributory, and proprietary sources includes over 3.3 billion
records spanning more than 40 years, providing detailed coverage
of property, mortgages and other encumbrances, consumer credit,
tenancy, location, hazard risk and related performance
information. The markets CoreLogic serves include real estate and
mortgage finance, insurance, capital markets, transportation and
government. CoreLogic delivers value to clients through unique
data, analytics, workflow technology, advisory and managed
services. Headquartered in Irvine, Calif., CoreLogic operates in
seven countries.
* Amendments to Consent Orders Memorialize Foreclosure Agreement
----------------------------------------------------------------
The Office of the Comptroller of the Currency (OCC) and the
Federal Reserve Board on Feb. 28 released amendments to their
enforcement actions against 13 mortgage servicers for deficient
practices in mortgage loan servicing and foreclosure processing.
The amendments require the servicers to provide $9.3 billion in
payments and other assistance to borrowers.
The amendments memorialize agreements in principle announced in
January with Aurora, Bank of America, Citibank, Goldman Sachs,
HSBC, JPMorgan Chase, MetLife Bank, Morgan Stanley, PNC,
Sovereign, SunTrust, U.S. Bank, and Wells Fargo. The amount
includes $3.6 billion in cash payments and $5.7 billion in other
assistance to borrowers such as loan modifications and forgiveness
of deficiency judgments.
Borrowers covered by the amendments include 4.2 million people
whose homes were in any stage of the foreclosure process in 2009
or 2010 and whose mortgages were serviced by one of the companies
listed above. These borrowers are expected to be contacted by the
Paying Agent--Rust Consulting, Inc.--by the end of March 2013 with
payment details. The Paying Agent will send payments and
correspondence.
Borrowers covered by the amendments are expected to receive
compensation ranging from hundreds of dollars up to $125,000.
Borrowers are not required to take any additional steps to receive
the payments. In addition, borrowers will not be required to
execute a waiver of any legal claims they may have against their
servicer as a condition for receiving payment.
Borrowers can call the Paying Agent at 1-888-952-9105 to update
their contact information or to verify that they are covered by
the amendments.
In providing the $5.7 billion in assistance, the 13 servicers are
expected to undertake well-structured loss mitigation efforts
focused on foreclosure prevention, with preference given to
activities designed to keep borrowers in their homes through
affordable, sustainable, and meaningful home preservation actions.
Borrowers seeking assistance should work directly with their
servicer or a counselor approved by the U.S. Department of Housing
and Urban Development (HUD). Borrowers can reach HUD-approved
counselors by calling 888-995-HOPE (4673).
OCC and Federal Reserve examiners continue to monitor the
servicers' implementation of corrective actions required by the
original enforcement actions to address unsafe and unsound
mortgage servicing and foreclosure practices.
For the 13 servicers, these amendments to the enforcement actions
replace the requirements related to the Independent Foreclosure
Review. For GMAC Mortgage, Everbank, and OneWest, which did not
enter agreements in principle with federal regulators, the
Independent Foreclosure Review process continues. Regulators
expect the reviews for these servicers to be completed over the
course of the coming year. These companies service 457,000
mortgages that were in some stage of foreclosure in 2009 or 2010.
* Foreclosure Files Detail Error Gap
------------------------------------
Dan Fitzpatrick and Alan Zibel, writing for The Wall Street
Journal, reported that some of the country's biggest banks were on
pace to find a higher rate of past foreclosure mistakes than
regulators disclosed in January when they halted a review in favor
of a $9.3 billion settlement for homeowners.
WSJ said the figures show wide discrepancies in how banks
performed in the review and raise questions among some observers
about how the process was conducted, according to people who have
reviewed figures provided to a federal bank regulator.
According to WSJ, the banks were ordered in 2011 to hire
consultants to review foreclosures in search of possible errors
that could result in compensation for borrowers.
WSJ related that some 6.5% of files reviewed unveiled errors
requiring compensation, officials at the Office of the Comptroller
of the Currency said in January. They later revised the error rate
to 4.2% after requesting new data, raising the total number
reviewed to roughly 100,000 files but a breakdown of the
information provided to the regulator shows that more than 11% of
files examined for Wells Fargo & Co. and 9% of those for Bank of
America Corp. had errors that would have required compensation for
homeowners, said people who have reviewed the figures, WSJ further
related. A narrower sample of files -- representing cases
selected by outside consultants -- showed error ratios of 21% for
Wells Fargo and 16% for Bank of America, the people said, WSJ
added.
* Foreclosure-Related Sales Down 23% in Q42012, RealtyTrac Says
---------------------------------------------------------------
RealtyTrac(R) on Feb. 28 released its Year-End and Q4 2012 U.S.
Foreclosure & Short Sales Report(TM), which shows a total of
947,995 U.S. properties in some stage of foreclosure or bank-owned
(REO) were sold during the year, a decrease of 6 percent from 2011
and down 11 percent from 2010.
These foreclosure-related sales accounted for 21 percent of all
U.S. residential sales during the year, down from 23 percent of
all sales in 2011 and down from 28 percent of all sales in 2010.
Properties not in foreclosure that sold as short sales in 2012
accounted for an estimated 22 percent of all residential sales --
bringing the total share of distressed sales to 43 percent
including both foreclosure-related sales and non-foreclosure short
sales.
Other high-level findings from the report:
-- U.S. pre-foreclosure sales in 2012 increased 6 percent
from the previous year while sales of bank-owned homes (REO)
decreased 15 percent.
-- Pre-foreclosure sales in 2012 increased from the
previous year in 28 states and outnumbered REO sales in 12 states,
including Arizona, California, Colorado, Florida, Maryland, New
Jersey and New York.
-- Despite the decrease nationwide, REO sales in 2012
increased from the previous year in 26 states and still
outnumbered pre-foreclosure sales in 38 states, including Georgia,
Illinois, Indiana, Massachusetts, Michigan, Minnesota and Nevada.
-- In the fourth quarter of 2012, residential properties
in foreclosure or bank-owned sold for an average price of
$171,704, an increase of 2 percent from the third quarter and an
increase of 4 percent from the fourth quarter of 2011.
-- Non-foreclosure short sales in 2012 sold short of the
loan amount by an average of $81,621, down from an average of
$87,809 short in 2011.
-- Non-foreclosure short sales accelerated toward the end
of the year, with the fourth quarter total the highest quarterly
total of the year and up 17 percent from the fourth quarter of
2011.
-- In the fourth quarter of 2012, a total of 219,084 U.S.
properties in some stage of foreclosure or bank-owned sold
nationwide, down 10 percent from the previous quarter and down 1
percent from the fourth quarter of 2011.
"Although foreclosure-related sales represent a shrinking share of
total sales, primarily because of fewer bank-owned purchases,
distressed sales are still a disproportionately high portion of
the overall housing market," said Daren Blomquist, vice president
of RealtyTrac. "And while distressed properties -- whether bank-
owned, pre-foreclosure or short sales not in foreclosure -- are
still selling at a significant discount compared to non-distressed
properties, average distressed property prices are increasing in
many markets thanks to strong demand and limited inventory."
Pre-foreclosure sales increase from 2011, nearly match record
level in 2010 Third parties purchased a total of 449,873 pre-
foreclosure residential properties -- in default or scheduled for
auction -- in 2012, up 6 percent from 2011 and just 1 percent
below the 2010 total of 454,111 pre-foreclosure sales -- the
highest annual total since RealtyTrac began tracking in 2005.
Pre-foreclosure sales in 2012 increased annually in 28 states and
outnumbered REO sales in 12 states, including Arizona, California,
Colorado, Florida, Maryland, New Jersey and New York. Pre-
foreclosure sales hit record annual highs in nine states,
including California, Georgia, Illinois, Ohio and Texas.
In the fourth quarter of 2012, pre-foreclosure properties sold for
an average price of $190,031, up 2 percent from the previous
quarter and up 2 percent from the fourth quarter of 2011. The
average price of a pre-foreclosure residential property in the
fourth quarter was 23 percent below the average price of a non-
foreclosure residential property, down from a 26 percent discount
in the third quarter but up from a 17 percent discount in the
fourth quarter of 2011.
Pre-foreclosure homes that sold in the fourth quarter took an
average of 336 days to sell after starting the foreclosure
process, down from an average of 359 days in the previous quarter
but still up from an average of 308 days in the fourth quarter of
2011.
REO sales decrease nationwide but increase in 26 states Third
parties purchased a total of 498,122 bank-owned (REO) residential
properties in 2012, down 15 percent from 2011 and down 19 percent
from 2010. REO sales accounted for 11 percent of all residential
sales during the year, down from 13 percent in 2011 and 16 percent
in 2010.
Despite the decrease nationwide, REO sales in 2012 increased from
2011 in 26 states, including Illinois (19 percent increase),
Pennsylvania (12 percent increase), Massachusetts (12 percent
increase), Texas (11 percent increase), and Wisconsin (10 percent
increase).
In the fourth quarter of 2012, REO properties sold for an average
price of $151,998, up 1 percent from the previous quarter and up 3
percent from the fourth quarter of 2011. The average price of an
REO residential property in the fourth quarter was 39 percent
below the average price of a non-foreclosure residential property,
down from a 40 percent discount in the third quarter but up from a
34 percent discount in the fourth quarter of 2011.
REOs that sold in the fourth quarter took an average of 178 days
to sell after being foreclosed, down from 186 days in the third
quarter but up slightly from 175 days in the fourth quarter of
2011.
Non-foreclosure short sales accelerate in second half of 2012
Short sales (where the sales price was below the estimated amount
of all outstanding loans for a given property) of properties not
in foreclosure accounted for an estimated 22 percent of all U.S.
residential sales in 2012 and increased 4 percent from 2011.
Some of the states with the biggest increases in non-foreclosure
short sales were Nevada (86 percent increase), Wisconsin (45
percent increase), Washington (28 percent increase), North
Carolina (24 percent increase), and Illinois (18 percent
increase).
Some of the states with the biggest share of non-foreclosure short
sales in 2012 were Michigan (33 percent), Florida (33 percent),
Nevada (33 percent), Maryland (28 percent), and Ohio (27 percent).
Non-foreclosure short sales nationwide accelerated throughout the
year, increasing from the previous quarter in each quarter.
Fourth quarter non-foreclosure short sales increased 2 percent
from the third quarter and were up 17 percent from the fourth
quarter of 2011, reaching a seven-quarter high.
Non-foreclosure short sales in 2012 were on average $81,621
"short" of the loan amount owed on the property being sold, down
from an average of $87,809 short in 2011. Properties in the
foreclosure process that sold as short sales in 2012 were $129,817
"short" of the loan amount.
California, Georgia, Nevada post highest percentage of foreclosure
sales in 2012 Foreclosure sales accounted for more than 38 percent
of all residential sales in California in 2012, the highest
percentage of any state but down from 44 percent of all sales in
2011 and down from 49 percent of all sales in 2010. California
pre-foreclosure sales in 2012 increased 12 percent from 2011 while
California REO sales decreased 27 percent over the same time
period.
Georgia foreclosure-related sales increased 12 percent in 2012
compared to 2011 and accounted for nearly 38 percent of all
residential sales in the state during the year. Georgia pre-
foreclosure sales in 2012 increased 16 percent from 2011 while
Georgia REO sales increased 9 percent during the same time period.
Foreclosure-related sales accounted for nearly 38 percent of all
residential sales in Nevada in 2012 despite a 36 percent decrease
from 2011. Nevada pre-foreclosure sales in 2012 decreased 20
percent from 2011 while Nevada REO sales decreased 46 percent
during the same time period. Foreclosure-related sales had
accounted for 55 percent of all Nevada residential sales in 2011
and 60 percent of all Nevada residential sales in 2010.
Other states where foreclosure-related sales accounted for at
least 20 percent of all residential sales in 2012 were Arizona (34
percent), Michigan (31 percent), Illinois (27 percent), Florida
(25 percent), Colorado (23 percent), Wisconsin (22 percent), and
New Hampshire (21 percent).
Foreclosure sales in 20 largest metro areas Foreclosure-related
sales accounted for 46 percent of all residential sales in the
Riverside-San Bernardino-Ontario metro area in Southern California
in 2012, the highest percentage among the nation's 20 largest
metropolitan statistical areas in terms of population.
Other metros where foreclosure-related sales accounted for at
least 30 percent of all residential sales in 2012 were Atlanta (41
percent), Los Angeles (36 percent), Phoenix (34 percent), San
Diego (34 percent), Detroit (32 percent), San Francisco (31
percent) and Chicago (31 percent).
The RealtyTrac U.S. Foreclosure Sales Report is produced by
matching national address-level arms-length sales deed data
against RealtyTrac's foreclosure database of pre-foreclosure (NOD,
LIS), auction (NTS, NFS) and bank-owned (REO) properties. A
property is considered a foreclosure sale if a sales deed is
recorded for the property while it was actively in some stage of
foreclosure or bank-owned. Previous quarterly numbers may be
revised upon the issuance of a new quarterly foreclosure sales
report because of new sales deed data received by RealtyTrac. The
foreclosure discount is calculated by comparing the percentage
difference between the average sales price of properties not in
foreclosure to the average sales price of properties in some stage
of foreclosure or bank-owned. States without sufficient
foreclosure sales data to calculate average prices are not
included in the report.
About RealtyTrac Inc.
RealtyTrac -- http://www.realtytrac.com-- is a supplier of U.S.
real estate data, with more than 1.5 million active default,
foreclosure auction and bank-owned properties, and more than 1
million active for-sale listings on its Web site, which also
provides essential housing information for more than 100 million
homes nationwide. This information includes property
characteristics, tax assessor records, bankruptcy status and sales
history, along with 20 categories of key housing-related facts
provided by RealtyTrac's wholly-owned subsidiary, Homefacts(R).
RealtyTrac's foreclosure reports and other housing data are relied
on by the Federal Reserve, U.S. Treasury Department, HUD, numerous
state housing and banking departments, investment funds as well as
millions of real estate professionals and consumers, to help
evaluate housing trends and make informed decisions about real
estate.
* New Ohio Law Hurts Mesothelioma Victims, Says Sokolove Law Firm
-----------------------------------------------------------------
Sokolove Law on Feb. 28 disclosed that a disturbing trend in
asbestos legislation is potentially harmful to the rights of
mesothelioma victims everywhere.
A new Ohio law signed by the governor on December 20, 2012,
provides an unfair advantage to corporate defendants in asbestos
lawsuits. Effective March 2013, the law, HB 380, requires
mesothelioma victims and other plaintiffs who file an asbestos
lawsuit in Ohio to disclose information on all existing and prior
asbestos claims they have made with asbestos bankruptcy trusts,
including any mesothelioma settlements they have been awarded.
Corporate defendants, however, will continue to be allowed to keep
their asbestos and mesothelioma settlements private.
In addition, if a corporate defendant asserts that a plaintiff has
not filed claims against all possible other defendants, court
proceedings can be delayed. Ricky LeBlanc, Managing Asbestos
Attorney at Sokolove Law, says, "The delay provision is
particularly disturbing, because defendants have a long history of
using delaying tactics against their weak victims."
The law's disclosure requirements apply only to asbestos cases.
LeBlanc notes, "This contravenes the standard process of American
jurisprudence. In every jurisdiction, the majority of U.S. civil
claims are resolved by a negotiated settlement that both parties
agree to keep private. Likewise, records of asbestos bankruptcy
trust negotiations and mesothelioma settlements have long been
protected by confidentiality."
Attorney LeBlanc also adds that "As part of their misinformation
campaign, corporate defendants and their lobby frequently claim
that mesothelioma victims engage in "double-dipping" to receive
multiple compensations for the same injury." LeBlanc stresses
that, "this is conspicuously untrue." If an asbestos lawsuit
results in a jury award to the plaintiff, the judge is informed
about previous settlements and awards received by the victim. The
judge deducts the amount of prior compensation from the jury's
award, which ensures the victim does not receive duplicate
payments.
Ohio is the first state to enact such legislation, but bills with
provisions similar to Ohio's new law have been introduced in
Oklahoma, Texas, Louisiana, and West Virginia. On the national
level, the U.S. House of Representatives' Committee on the
Judiciary passed the Furthering Asbestos Claims Transparency
(FACT) Act (H.R. 4369) in July of 2012. The FACT Act was
championed by the U.S. Chamber Institute for Legal Reform, an
organization created to promote the interests of big business.
Sokolove Law urges legislators and the public to remember that
asbestos bankruptcy trusts were created to limit the liability of
manufacturers of asbestos-containing products. Assessing extra
burdens on asbestos victims through legislation benefitting
asbestos manufacturers is a travesty of justice.
About Sokolove Law
Sokolove Law, LLC provides legal services that help people obtain
access to the civil justice system. With over 30 years of
service, Sokolove Law has helped thousands of injured parties
obtain the compensation they deserved from their legal claims.
The cases include birth injury, mesothelioma, cerebral palsy,
nursing home abuse, dangerous drugs, disability insurance denial,
and medical malpractice. Sokolove Law is nationwide, with local
offices in 47 states.
* Las Vegas Robo-Signing Case Derailed
--------------------------------------
Tate South of CBS Las Vegas reported that an ambitious robosigning
prosecution against two employees of a mortgage loan processing
service has been derailed, after a judge dismissed all 306 counts
against the defendants.
The report related that the attorney for one of the defendants
reeled of a litany of actions by the Nevada Attorney General's
office which he characterized to KXNT as misconduct. John Heuston
accused Catherine Cortez Masto and her staff of misreprenting
facts, and of presenting inadmissible and inflammatory testimony
to the grand jury, according to the report.
Prosecutors included testimony about foreclosures that had no
connection to the crimes alleged here or the defendants in the
case, Heuston told KXNT on Wednesday, the report said. "The case
was infected with misconduct," Heuston said.
The report further related that Masto's office has said it did not
attempt to mislead, and expressed confidence that Judge Carolyn
Ellsworth realizes that. A written statement from the office also
suggests the judge left the door open for the case to be refilled,
the report said.
The defendants were Gary Trafford and Geraldine Sheppard, who both
worked as middle manangers in a firm that participated in
thousands of foreclosures in Southern Nevada, the report said.
They were accused of being part of a massive robosigning scheme.
* Student Loan Delinquencies Soar Among the Young
-------------------------------------------------
Ruth Simon and Rachel Louise Ensign, writing for The Wall Street
Journal, reported that the number of young borrowers who have
fallen behind on their student loan payments has soared over the
past four years, the Federal Reserve Bank of New York said in a
report released Thursday.
WSJ, citing the report, said 35% of people under 30 who have
student loans were at least 90 days late on their payments at the
end of last year, up from 26% in 2008 and 21% at the end of 2004.
The new figures, which exclude borrowers who are still in school
or aren't yet required to make payments, show that young Americans
are having a tougher time repaying college loans as debt loads
increase and job prospects remain shaky, WSJ added.
Amplifying the burden: a growing number of young adults have
become student borrowers, according to WSJ. All told, 43% of 25-
year-olds had student debt in the fourth quarter of 2012, up from
about 33% in the fourth quarter of 2008, WSJ noted.
WSJ said concerns about higher debt loads and rising delinquencies
are leading government officials and families to focus more on the
payoff from a college degree. Meanwhile, colleges and universities
are facing increased pressure to limit tuition increases, while
some are even freezing or cutting their charges, WSJ added.
* Lew Confirmed as Treasury Secretary
-------------------------------------
Kasia Klimasinska, writing for Bloomberg News, reported that Jacob
J. Lew's confirmation as the next U.S. Treasury secretary plunges
him into the budget battle between the Obama administration and
Congress with automatic government spending cuts.
According to the Bloomberg report, approved on a 71-26 Senate
vote, Lew won support from 20 Republicans, overcoming criticism of
a bonus payment he received while working at Citigroup Inc. during
the financial crisis. The tally compares with the 60-34 vote in
favor of his predecessor Timothy F. Geithner four years ago, the
closest for a Treasury secretary in the post-World War II era,
Bloomberg said.
Bloomberg noted that Lew takes office amid $85 billion in across-
the-board cuts for the current fiscal year, followed by the March
27 expiration of a funding measure for U.S. agencies. Less than
two months later, a temporary suspension of the country's
borrowing limit expires, possibly requiring him to take
extraordinary steps to avoid breaching the debt ceiling, Bloomberg
further noted.
"He has the most difficult domestic job in the administration,"
Steve Bell, senior director of economic policy for Washington-
based Bipartisan Policy Center, said in an interview with
Bloomberg. "He is a tough negotiator and will have a tremendous
impact on budget negotiations next month."
Lew, 57, most recently served as President Barack Obama's chief of
staff, Bloomberg related. As Treasury secretary, Lew will oversee
a department with more than 100,000 employees and his looping
signature will appear on the nation's currency.
* Bernanke Says Higher Rates May Signal Stronger Economy
--------------------------------------------------------
Jeff Kearns & Caroline Salas Gage, writing for Bloomberg News,
reported that Federal Reserve Chairman Ben S. Bernanke said recent
increases in some interest rates may signal the economy is gaining
vigor.
"The fact that interest rates have gone up a bit is actually
indicative of a stronger economy," Bernanke said in Washington in
response to questions from members of the House Financial Services
Committee, the Bloomberg report cited. That indicates the Fed's
stimulus is working, he said.
Bernanke, according to Bloomberg, also said the central bank's
easing policies are helping to improve demand for homes and cars,
and that the housing market is recovering. He was continuing his
semi-annual testimony to Congress after speaking yesterday in the
Senate.
The world's largest economy has shown signs that it will resume
growth after gross domestic product unexpectedly shrank 0.1
percent in the fourth quarter, according to Bloomberg. Reports
showed that orders for U.S. durable goods excluding transportation
gear jumped in January by the most in a year and contracts to buy
previously owned homes climbed more than forecast, Bloomberg
noted.
"We are getting some traction in the housing market, in
automobiles and other durable goods" and to "some extent in
investment" and commercial real estate, Bernanke said, according
to Bloomberg.
Job growth in autos and housing has been a bright spot as car- and
home-loan availability benefited from the central bank's strategy
of holding its benchmark interest rate low and pressing on with
bond purchases of $85 billion a month, Bloomberg noted. The U.S.
added 603,000 jobs in the fourth quarter, the fastest pace since
the first quarter of last year, Labor Department data show.
* SEC Nominee Tries to Allay Skepticism
---------------------------------------
Ben Protess of The New York Times' DealBook blog reported that
Mary Jo White's path to the Securities and Exchange Commission has
reached a crucial juncture: the Congressional charm campaign.
The DealBook article said lawmakers are scrutinizing Ms. White
ahead of her Senate confirmation hearing, raising questions about
the former prosecutor's lack of regulatory experience and the
challenge of policing Wall Street firms she recently defended in
private practice but Ms. White is seeking to quell concerns about
potential conflicts of interest.
The DealBook noted that she recently scheduled meetings with
Senate Banking Committee members, who must clear her nomination,
and answered a 20-page boilerplate questionnaire detailing her
qualifications, according to a copy provided to The New York
Times. The document sheds new light on her list of Wall Street
clients, including little-known work performed for HSBC's former
chief executive. It also describes her ties to New York Democratic
causes and laurels she earned both as a defense lawyer and federal
prosecutor.
The questionnaire, created by the banking committee, focused
significant attention on her movement through the revolving door
between government service and private practice, a concern that
has loomed since President Obama nominated Ms. White in January,
the DealBook said.
"As a government official, I believe I have an established track
record and the reputation of being tough, but fair," she said in
the document, according to the DealBook.
* Libyan Fund Helping SEC in Goldman Probe
------------------------------------------
Liz Rappaport and Giovanni Legorano, writing for The Wall Street
Journal, reported that Goldman Sachs Group Inc.'s headache in
Libya didn't go to the grave with Col. Moammar Gadhafi as Libya's
sovereign-wealth fund said it is cooperating with the U.S.
Securities and Exchange Commission in its continuing investigation
into Goldman Sachs over the securities firm's dealings with the
fund when Col. Gadhafi was in power.
According to the WSJ report, the Libyan Investment Authority said
in a statement that it also hired a law firm to discuss possible
actions to recover losses it suffered from investments made in
structured-finance products. Before the financial crisis, Goldman
and other financial firms sold complex investments to Libya as
officials there looked for ways to put some of the fund's $60
billion in assets to work, WSJ related. Many of the investments
plunged in value during the crisis, according to WSJ.
WSJ said an SEC spokesman and Goldman declined to comment. The
identity of the London-based law firm couldn't be determined, WSJ
added.
The Wall Street Journal reported in May 2011 that the Libyan
Investment Authority had lost 98% of a $1.3 billion bet on
currency movements and other complex trades done with Goldman in
2008. The losses were devastating to the Libyan sovereign-wealth
fund, and some of its executives demanded that Goldman find a way
to recoup the fund's losses.
* Bank of America Probed by New York Over Mortgage Securities
-------------------------------------------------------------
David McLaughlin, writing for Bloomberg News, reported that Bank
of America Corp., the second- biggest U.S. bank by assets, is
under investigation by the New York Attorney General's Office over
the bundling of mortgage loans into securities.
The Bloomberg report related that New York Attorney General Eric
Schneiderman, who sued JPMorgan Chase & Co. (JPM) last year over
losses on mortgage bonds, is probing the purchase, securitization
and underwriting of home loans and mortgage securities, the bank
said yesterday in a regulatory filing.
The bank, based in Charlotte, North Carolina, said it "continues
to cooperate fully" with the investigation, according to
Bloomberg. The U.S. Securities and Exchange Commission is
investigating practices by the bank's Merrill Lynch unit related
to collateralized debt obligations, including valuation and
marketing, according to the filing.
Schneiderman is the co-chairman of a state and federal group
established last year to investigate misconduct in the mortgage-
securities market, Bloomberg noted. The group includes the U.S.
Justice Department and the SEC. New York sued JPMorgan in
October, claiming Bear Stearns, the investment bank acquired by
JPMorgan, defrauded investors, the report said. Schneiderman, who
also sued Credit Suisse Group AG (CSGN), said the JPMorgan case
would be a template for other actions against banks.
* BOND PRICING: For Week From Feb. 25 to March 1, 2013
------------------------------------------------------
Company Coupon Maturity Bid Price
------- ------ -------- ---------
AES EASTERN ENER 9.00 1/2/2017 1.75
AES EASTERN ENER 9.67 1/2/2029 4.13
AGY HOLDING COR 11.00 11/15/2014 49.38
AHERN RENTALS 9.25 8/15/2013 68.00
ALION SCIENCE 10.25 2/1/2015 55.00
AMBAC INC 6.15 2/7/2087 11.00
ATP OIL & GAS 11.88 5/1/2015 4.50
ATP OIL & GAS 11.88 5/1/2015 4.38
ATP OIL & GAS 11.88 5/1/2015 4.38
BUFFALO THUNDER 9.38 12/15/2014 31.00
CENGAGE LEARN 12.00 6/30/2019 34.38
CHAMPION ENTERPR 2.75 11/1/2037 0.50
DOWNEY FINANCIAL 6.50 7/1/2014 64.25
DYN-RSTN/DNKM PT 7.67 11/8/2016 4.50
EASTMAN KODAK CO 7.00 4/1/2017 12.90
EASTMAN KODAK CO 7.25 11/15/2013 13.25
EASTMAN KODAK CO 9.20 6/1/2021 10.13
EASTMAN KODAK CO 9.95 7/1/2018 11.00
EDISON MISSION 7.50 6/15/2013 50.50
FIBERTOWER CORP 9.00 11/15/2012 3.00
FIBERTOWER CORP 9.00 1/1/2016 28.00
FORD MOTOR CRED 6.52 3/10/2013 99.88
FULL GOSPEL FAM 8.40 6/17/2031 10.07
GEOKINETICS HLDG 9.75 12/15/2014 49.75
GEOKINETICS HLDG 9.75 12/15/2014 55.63
GLB AVTN HLDG IN 14.00 8/15/2013 21.00
GLOBALSTAR INC 5.75 4/1/2028 63.00
GMX RESOURCES 4.50 5/1/2015 51.00
HAWKER BEECHCRAF 8.50 4/1/2015 9.00
HAWKER BEECHCRAF 8.88 4/1/2015 16.00
HORIZON LINES 6.00 4/15/2017 30.00
JAMES RIVER COAL 4.50 12/1/2015 37.00
KELLOGG CO 4.25 3/6/2013 100.01
LAS VEGAS MONO 5.50 7/15/2019 21.00
LBI MEDIA INC 8.50 8/1/2017 26.63
LEHMAN BROS HLDG 0.25 12/12/2013 21.75
LEHMAN BROS HLDG 0.25 1/26/2014 21.75
LEHMAN BROS HLDG 1.00 10/17/2013 21.75
LEHMAN BROS HLDG 1.00 3/29/2014 21.75
LEHMAN BROS HLDG 1.00 8/17/2014 21.75
LEHMAN BROS HLDG 1.00 8/17/2014 21.75
LEHMAN BROS HLDG 1.25 2/6/2014 21.75
MASHANTUCKET PEQ 8.50 11/15/2015 7.25
MASHANTUCKET PEQ 8.50 11/15/2015 7.25
MASHANTUCKET TRB 5.91 9/1/2021 7.50
MF GLOBAL LTD 9.00 6/20/2038 80.00
OVERSEAS SHIPHLD 8.75 12/1/2013 42.50
PENSON WORLDWIDE 12.50 5/15/2017 24.38
PENSON WORLDWIDE 12.50 5/15/2017 41.50
PLATINUM ENERGY 14.25 3/1/2015 51.50
PLATINUM ENERGY 14.25 3/1/2015 51.50
PMI CAPITAL I 8.31 2/1/2027 0.13
PMI GROUP INC 6.00 9/15/2016 32.25
POWERWAVE TECH 1.88 11/15/2024 3.25
POWERWAVE TECH 1.88 11/15/2024 3.25
POWERWAVE TECH 2.75 7/15/2041 3.25
POWERWAVE TECH 3.88 10/1/2027 3.38
POWERWAVE TECH 3.88 10/1/2027 3.15
RESIDENTIAL CAP 6.88 6/30/2015 29.50
RLGY-CALL03/13 12.38 4/15/2015 101.13
SAVIENT PHARMA 4.75 2/1/2018 27.00
SCHOOL SPECIALTY 3.75 11/30/2026 44.00
TERRESTAR NETWOR 6.50 6/15/2014 10.00
TEXAS COMP/TCEH 10.25 11/1/2015 16.00
TEXAS COMP/TCEH 10.25 11/1/2015 17.91
TEXAS COMP/TCEH 10.25 11/1/2015 15.38
TEXAS COMP/TCEH 15.00 4/1/2021 23.50
TEXAS COMP/TCEH 15.00 4/1/2021 26.25
THQ INC 5.00 8/15/2014 45.50
TL ACQUISITIONS 10.50 1/15/2015 35.00
TL ACQUISITIONS 10.50 1/15/2015 24.88
USEC INC 3.00 10/1/2014 36.00
VERSO PAPER 11.38 8/1/2016 45.75
WCI COMMUNITIES 4.00 8/5/2023 0.38
WCI COMMUNITIES 4.00 8/5/2023 0.38
*********
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., Washington, D.C., 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 2013. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
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re-mailing and photocopying) is strictly prohibited without prior
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 $975 for 6 months delivered via
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are $25 each. For subscription information, contact Peter A.
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*** End of Transmission ***