/raid1/www/Hosts/bankrupt/TCR_Public/130724.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Wednesday, July 24, 2013, Vol. 17, No. 203
Headlines
11504 WEST: Case Summary & 2 Unsecured Creditors
ABERDEEN LAND II: Files Schedules of Assets and Liabilities
AMERICAN AIRLINES: Parent AMR Gets Lift in Bankruptcy
AMERICANWEST BANCORPORATION: Revised Plan Disclosure Order Issued
ARCAPITA BANK: Makes Push for $365-Mil. Subsidiary Sale
ARCAPITA BANK: Tide Gas Wins Bid to Halt $120MM Claim Fight
ARROW ALUMINUM: U.S. Trustee Objects to Disclosure Statement
ARTE SENIOR: Chapter 11 Reorganization Case Closed
AVENTINE RENEWABLE: Sues 3 Ethanol Producers Over Soured Contracts
BEALL CORP: Confirmation Hearing Set for Sept. 5
BELLWEST HOLDINGS: Secured Creditor May Foreclose Ariz. Property
BENJAMIN-PAUL PROPERTIES: Case Summary & 4 Unsecured Creditors
BLOCKBUSTER INC: Chapter 7 Conversion Approved
BOUNDARY BAY: Gets Discharge from Personal Liability for Debts
BRIGHTSTAR CORP: Moody's Rates $250MM Sr. Unsecured Note 'B1'
BRIGHTSTAR CORP: S&P Rates $250MM Senior Unsecured Notes 'B+'
CARMIKE CINEMAS: Moody's Says Share Offering is Credit Positive
CASA CASUARINA: Files Schedules of Assets and Liabilities
CCC ATLANTIC: Cross & Simon Attorney Accused of Malpractice
CENGAGE LEARNING: DRC Retained as Claims & Noticing Agent
CENTURY PLAZA: Cash Collateral Use Bid Mooted by Plan Confirmation
CHARLES CASH: Case Summary & 20 Largest Unsecured Creditors
CHEMTURA CORP: Commences Offering of $400-Mil. Senior Notes
CHEYENNE HOTELS: Stipulates for Cash Collateral Use Thru July 31
CITIZENS CORP: Financial Data's Chapter 11 Plan Declared Effective
COLOREP INC: Section 341(a) Meeting Scheduled for Aug. 12
COMMERCIAL VEHICLE: S&P Alters Outlook to Stable & Affirms 'B' CCR
COMMUNITY MEMORIAL: Ronald Rose Named as Claims Mediator
CONERGY AG: Plans to Sell Brand to Fla.-Based Kawa Capital
CROSSOVER FINANCIAL: Files 3rd Amended Plan & Disclosure Statement
DAMES POINT: May Hire CYA Accounting to Assist in Bookkeeping
DEAN FOODS: Proposed $750MM Debt Facility Gets Moody's Ba2 Rating
DEEP PHOTONICS: Court to Hear nLight's 2nd Dismissal Bid on Aug. 5
DEMCO INC: Sec. 341 Creditors' Meeting Adjourned Until Nov. 13
DETROIT, MI: Bankruptcy Will Trump State Law Challenge
DETROIT, MI: Residents Wary as City Faces Uncertain Future
DETROIT, MI: Judge Steven Rhodes Chosen to Handle Chapter 9 Case
DETROIT, MI: Bankruptcy Likely to Spark a Pension Brawl
DETROIT, MI: Urban Caucus Leader Calls for Government Support
DETROIT, MI: Water, Sewer Bonds May Still Face Downgrade
DEWEY & LEBOEUF: Liquidating Trustee Collects $100MM Since March
EASTMAN KODAK: US Not Sold on Environmental Cleanup Deal With NY
EASTMAN KODAK: Defends Move to Estimate Claims for Voting Purposes
EASTMAN KODAK: Challenges Trust Fund for Eastman Business Park
EASTMAN KODAK: Wins Court Approval to Estimate Claims
ECLIPSE AVIATION: Trustee May Recoup $653K From Prudential
EMERITO ESTRADA: Files Schedules of Assets and Liabilities
ENDICOTT INTERCONNECT: Section 341(a) Meeting Set on Aug. 15
FRIENDSHIP DAIRIES: AgStar's Lift Stay Bid Set for Sept. Hearing
FRIENDSHIP DAIRIES: Court to Hear Exclusivity Motion on July 25
FRIENDSHIP DAIRIES: Court to Consider Plan Confirmation Sept. 10
GIBSON GUITAR: Moody's Rates New $200MM 2nd Lien Notes 'B2'
GMX RESOURCES: Plan Filing Deadline Extended to Oct. 28
GMX RESOURCES: Claims Bar Date Set at Sept. 16
GORDON PROPERTIES: Examiner Taps Leach Travell as Counsel
HI-WAY EQUIPMENT: Disclosure Statement Hearing Set for Aug. 19
HOSTESS BRANDS: Flowers Foods Completes Acquisition of Assets
IGPS COMPANY: Defends $39-Mil. Sale Deal with PE Firms
IN THE PLAY: Court Approves Morris James as Counsel
JACUZZI BRANDS: S&P Raises CCR to 'B-'; Outlook Stable
JAG CONSTRUCTION: J&B Boat Rental Allowed $48K in Claims
JEMANYA CORP: Chapter 11 Case Reassigned to Elizabeth S. Stong
JOURNAL REGISTER: Seeks Approval of Disclosure Statement
K-V PHARMACEUTICAL: Sixth Amended Plan Filed
K-V PHARMACEUTICAL: Confirmation Hearing Set for Aug. 28
KEHE DISTRIBUTORS: Moody's Rates $200MM Second Lien Notes 'B3'
KIDSPEACE CORP: Files Schedules of Assets and Liabilities
LCI HOLDING: Patient Care Ombudsman Seeks Discharge From Duties
LEHMAN BROTHERS: OFG Recovers $2.1 Mil. From Sale of Claim
LEHMAN BROTHERS: Deal With Luxembourg Unit Over $13B Wins Nod
LHC LLC: Court Declines to Appoint Trustee for Ice-Skating Rink
LIGHTSQUARED INC: Foresees Competing Plans for Reorganization
LIGHTSQUARED INC: Wins Court Approval to Hire Pillsbury as Counsel
LIONS GATE: S&P Retains 'B+' CCR Following Debt Upsize
MAHALO ENERGY: 10th Circ. Won't Let Directors Skirt Suit
MF GLOBAL: Trustee to Boost Distributions to Former Customers
MULTIPLAN INC: Moody's Keeps B2 Corp Family Rating, Outlook Stable
MULTIPLAN INC: S&P Affirms 'B' Corp. Credit Rating; Outlook Stable
NATIONAL ENVELOPE: $68MM DIP Loan, Lender Deal Get OK
NEW ENGLAND COMPOUNDING: Victims Seek to Sue Others for Outbreak
NEW YORK DOUBLE: Voluntary Chapter 11 Case Summary
NMP-GROUP: Section 341(a) Meeting Scheduled for August 9
NORTHLAND RESOURCES: CFO Eva Kaijser to Step Down by Year-End
ONCURE HOLDINGS: US Trustee Knocks Ex-CEO's Severance in Ch. 11
ORMET CORP: Can Seek Better Power Deal, Court Says
PARKER DRILLING: Moody's Rates New $225MM Senior Notes 'B1'
PARKER DRILLING: S&P Assigns 'B+' Rating to $225MM Notes Due 2020
PIONEER FREIGHT: Files for Chapter 15 in New York
PMI GROUP: Judge Boots U.S. Objections to Ch. 11 Plan
PMI GROUP: Plan Not Proposed in Good Faith, U.S. Trustee Complains
PMI GROUP: Gets Final Court Nod for CEO and VP Appointments
PMI GROUP: Has Final Approval to Employ Goldin Associates
POINT CENTER: Committee Seeks Chapter 11 Trustee Appointment
POINT CENTER: Has Access to Cash Collateral Thru September
READER'S DIGEST: Parent Reaches $5-Mil. Settlement With Mosaic
REVSTONE INDUSTRIES: $54MM Nondebtor Unit Sale Won't Involve Court
ROBERT SCHROEDER: Bankruptcy Trustee Calls for Politician's Arrest
ROTECH HEALTHCARE: Equity Panel Taps Berenson as Valuation Expert
SAKS INC: S&P Puts 'BB' Corp. Credit Rating on CreditWatch Neg.
SAN BERNARDINO, CA: Bankruptcy Judge Pushes Back Against CalPERS
SAND SPRING: Files Plan Outline for Second Amended Joint Plan
SATNAM LODGING: Non-Disclosure Costs Lawyer $16,033
SAVE MOST: Can Access JPMC Cash Collateral Until Aug. 31
SCOLR PHARMA: RedHill Takes Steps to Safeguard RHB-102 Rights
SEVEN COUNTIES: Can Employ Peritus under Sec. 1108
SEVEN COUNTIES: Seeks to Employ CCRE as Realtor
SEVEN COUNTIES: Employs Wyatt Tarrant as Special Counsel
SHAMROCK-HOSTMARK: Can Access GECC's Cash Collateral Until July 31
SHILO INN: California Bank Opposes Cash Collateral Use
SHOTWELL LANDFILL: Files Schedules of Assets and Liabilities
SIEGMUND STRAUSS: Windsor Brands' Claim Pegged at $496K
SOLIMAR ENERGY: Takes Steps to Rectify Event of Default
SOUND SHORE: Daniel T. McMurray Named Patient Care Ombudsman
SOUTH LAKES: Creditors Committee Oppose Approval of Plan
SOUTHERN MONTANA ELECTRIC: Trustee Blasts Chapter 7 Bid
STOOL AND DINETTE: Voluntary Chapter 11 Case Summary
STREAM GLOBAL: Moody's Retains 'B1' Corp. Family Rating
SYNAGRO TECHNOLOGIES: Can Seek Votes for Plan to Tweak $465MM Deal
SYNOVUS FINANCIAL: S&P Raises Counterparty Credit Rating to 'BB-'
TELEFLEX INC: S&P Assigns 'BB-' Rating to Subordinated Debt
THOR INDUSTRIES: Chapter 11 Reorganization Case Dismissed
TLO LLC: Genovese Joblove Okayed as Creditors Committee Counsel
TLO LLC: Committee Taps Hire GlassRatner as Financial Advisor
TLO LLC: Furr and Cohen Approved as Bankruptcy Counsel
TLO LLC: Wants Founder's $40MM Pruco Life Insurance Policy
TMT GROUP: Dodges Creditors' Bad Faith Complaints
TOMSTEN INC: Faegre Baker Approved as Committee Counsel
TOMSTEN INC: M Squared Approved as Marketing Consultant
TU DEVELOPMENT: Case Summary & Unsecured Creditor
UNITEK GLOBAL: Extends Forbearance Agreement with Term Lenders
UPH HOLDINGS: Committee Taps QSI Consulting as Financial Advisor
UPH HOLDINGS: Creditors Committee Taps Kelley Drye as Counsel
USA BROADMOOR: Files Schedules of Assets and Liabilities
VAIL LAKE: Files Schedules of Assets and Liabilities
VALENCE TECHNOLOGY: Employment of KPMG and Roth Capital Extended
WEST AIRPORT: July 24 Hearing on First-Citizens' Dismissal Motion
WEST AIRPORT: Has Interim Nod to Employ Luis Perez as Accountant
WEST AIRPORT: Has Interim OK to Employ James Schwitalla as Counsel
WOMEN IN SUPPORT: Embattled Newark Nonprofit Files for Bankruptcy
WOODSIDE HOMES: Moody's Gives B3 CFR & Rates New $200MM Notes Caa1
WOODSIDE HOMES: S&P Gives 'B' CCR & Rates $200MM Notes 'B'
WOOTEN GROUP: U.S. Trustee Seeks Dismissal of Chapter 11 Case
YOSHI'S SF: Hearing on FDC Motion to Dismiss Continued to Sept. 4
ZUERCHER TRUST: Ch. 11 Trustee Taps GTFAS as Financial Advisors
* Barclays, Traders Fined $487.9 Million by U.S. Regulator
* Credit Suisse Sued by Highland Capital over Resort Loans
* U.S. Trustee Settles w/ Citigroup to Protect Personal Info
* Prudential Said to Get DeMarco's Backing to Avoid SIFI
* SEC Sues Cohen, Seeks Lifetime Ban from Managing Investor Funds
* Silverstein Can't Get $3.5 Billion from Airlines for 9/11
* UBS Settles With U.S. Mortgage Regulator
* Greenberg Says Bernanke Testimony Key in AIG Bailout Suit
* Bernanke Sees Need for Backstop for Mortgage Market
* Eminent Domain Housing Relief Plan Receives Renewed Push
* FINRA Scrutinizes High-Speed Trading Firms
* Fitch: Banks' Capital Market Revenues Solid, but Rate Risks Loom
* Fitch Says U.S. Mortgage New Delinquencies Slowing Down
* Moody's Notes Dip in Liquidity Stress Index for Mid-July
* Too-Big-to-Fail Insurers to Face Tougher Capital Standards
* Senate to Look at Banks' Control of Commodity Storage
* Dorsey's Lawyers Among List of Super Lawyers Rising Stars
* Steven Notinger to Chair Cleveland, Waters' Bankruptcy Practice
* Upcoming Meetings, Conferences and Seminars
*********
11504 WEST: Case Summary & 2 Unsecured Creditors
------------------------------------------------
Debtor: 11504 West 183 Street, LLC.
11504 West 183rd Street, Suite SW/NW
Orland Park, IL 60467
Bankruptcy Case No.: 13-28375
Chapter 11 Petition Date: July 16, 2013
Court: U.S. Bankruptcy Court
Northern District of Illinois (Chicago)
Judge: A. Benjamin Goldgar
Debtor's Counsel: Chester H. Foster, Jr., Esq.
FOSTER LEGAL SERVICES, PLLC
3825 W. 192nd Street
Homewood, IL 60430
Tel: (708) 799-6300
Fax: (708) 799-6339
E-mail: chf@fosterlegalsvcs.com
Scheduled Assets: $1,300,000
Scheduled Liabilities: $1,010,565
A copy of the Company's list of its largest unsecured creditors
filed with the petition is available for free at:
http://bankrupt.com/misc/ilnb13-28375.pdf
The petition was signed by John J. Mayher, Jr., manager.
ABERDEEN LAND II: Files Schedules of Assets and Liabilities
-----------------------------------------------------------
Aberdeen Land II, LLC filed with the U.S. Bankruptcy Court for
the Southern District of Florida its schedules of assets and
liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $41,027,052
B. Personal Property $138,809
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $29,955,995
E. Creditors Holding
Unsecured Priority
Claims $306,201
F. Creditors Holding
Unsecured Non-priority
Claims $1,249,681
----------- -----------
TOTAL $41,165,861 $30,605,713
A copy of the schedules is available for free at
http://bankrupt.com/misc/ABERDEEN_LAND_sal.pdf
About Aberdeen Land
Aberdeen Land II, LLC, doing business as Aberdeen, filed a
Chapter 11 petition (Bankr. M.D. Fla. Case No. 13-04103) on
July 1, 2013, in Jacksonville, Florida. The Debtor has tapped
Genovese Joblove & Battista, P.A., as counsel, Kapila & Company as
accountant, Kellerhals Ferguson Fletcher Kroblin, PLLC, as special
counsel, and Fishkind & Associates as expert consultants. The
Debtor estimated assets of $10 million to $50 million, and debts
of $50 million to $100 million.
AMERICAN AIRLINES: Parent AMR Gets Lift in Bankruptcy
-----------------------------------------------------
Susan Carey, writing for The Wall Street Journal, reported that
American Airlines parent AMR Corp., nearing the end of its
bankruptcy restructuring, is benefiting from cost savings but also
is getting a boost to revenue from its fleet and product upgrades
and international expansion, Chief Executive Tom Horton said.
In an interview after AMR posted its first second-quarter profit
since 2007, Mr. Horton said further cost savings and revenue
improvements will kick in over the coming months based on expected
labor productivity gains, new vendor and supplier contracts and
the introduction of larger regional jets, the report related. So
far, the company has extracted about 80% of the cost savings it
expected to capture in bankruptcy, where it landed in late 2011,
Mr. Horton said.
In the most recent quarter, AMR's unit costs, or the cost to fly a
seat a mile, declined by 5.8%, excluding fuel and special items,
WSJ noted.
U.S. Bankruptcy Court Judge Sean Lane is expected to hold a
hearing on Aug. 15 to approve the Fort Worth, Texas, company's
reorganization plan, which is essentially is a merger with US
Airways Group Inc., the report said. AMR creditors are now voting
on the plan.
The two carriers in February announced their plan to combine in a
$12.8 billion stock deal to create the world's largest airline by
traffic, the report added. US Airways shareholders last week
overwhelmingly approved the merger, which would give them a 28%
stake in the new American Airlines Group Inc.
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.
The Retiree Committee is represented by Jenner & Block LLP's
Catherine L. Steege, Esq., Charles B. Sklarsky, Esq., and Marc B.
Hankin, Esq.
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.
In April 2013, AMR filed a Chapter 11 plan of reorganization that
will carry out the merger. By distributing stock in the merged
airlines, the plan is designed to pay all creditors in full, with
interest. The hearing before the Court to consider confirmation of
the Plan is scheduled for Aug. 15, 2013.
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
AMERICANWEST BANCORPORATION: Revised Plan Disclosure Order Issued
-----------------------------------------------------------------
BankruptcyData reported that the U.S. Bankruptcy Court issued a
revised order approving HoldCo Advisors' Third Amended Disclosure
Statement regarding the Second Amended Chapter 11 Plan filed on
behalf of AmericanWest Bancorporation.
According to the report, the revised order relates to a clerical
error and documents filed with the Court assert, "...the Plan
Proponent desires to ensure that all creditors entitled to vote on
the Plan receive the solicitation materials and have a meaningful
opportunity to review such materials and submit their votes to
accept or reject the Plan."
The revised Disclosure Statement order establishes the following
dates and deadlines in connection with Plan voting and
confirmation: The supplemental solicitation date is July 15, 2013;
new voting deadline is Aug. 14, 2013; new deadline to file
objections to confirmation of the Plan is Aug. 16, 2013 and
hearing on Plan confirmation is Aug. 20, 2013, the report added.
About AmericanWest Bancorporation
Headquartered in Spokane, Washington, AmericanWest Bancorporation
(OTC BB: AWBC) -- http://www.awbank.net/-- was a bank holding
company whose principal subsidiary was AmericanWest Bank, which
included Far West Bank in Utah operating as an integrated
division of AmericanWest Bank. AmericanWest Bank was a community
bank with 58 financial centers located in Washington, Northern
Idaho and Utah.
AmericanWest Bancorporation filed for Chapter 11 protection
(Bankr. E.D. Wash. Case No. 10-06097) on Oct. 28, 2010. The
banking subsidiary was not included in the Chapter 11 filing.
Christopher M. Alston, Esq., and Dillon E. Jackson, Esq., at
Foster Pepper Shefelman PLLC, in Seattle, Washington, serve as
bankruptcy counsel. G. Larry Engel, Esq., at Morrison & Foerster
LLP, also serves as counsel.
The Debtor estimated assets of $1 million to $10 million and
debts of $10 million to $50 million in its Chapter 11 petition.
AmericanWest Bancorporation's estimates exclude its banking
unit's assets and debts. In its Form 10-Q filed with the
Securities and Exchange Commission before the Petition Date,
AmericanWest Bancorporation reported consolidated assets --
including its bank unit's -- of $1.536 billion and consolidated
debts of $1.538 billion as of Sept. 30, 2010.
In December 2010, AmericanWest completed the sale of all
outstanding shares of AmericanWest Bank to a wholly owned
subsidiary of SKBHC Holdings LLC, in a transaction approved by
the U.S. Bankruptcy Court. The bank subsidiary was sold to SKBHC
Holdings Inc. for $6.5 million cash.
ARCAPITA BANK: Makes Push for $365-Mil. Subsidiary Sale
-------------------------------------------------------
Jeff Sistrunk of BankruptcyLaw360 reported that bankrupt Arcapita
Bank BSC asked a New York bankruptcy judge to allow its nondebtor
subsidiary 3PD Inc. to enter into an agreement to sell itself to a
logistics provider in a deal valued at $365 million.
According to the report, Arcapita, whose Chapter 11 bankruptcy
plan was greenlighted in June, asked U.S. Bankruptcy Judge Sean H.
Lane to approve the sale of Atlanta, Ga.-based logistics company
3PD to Greenwich, Conn.-based XPO Logistics. Under the deal, XPO
will buy all remaining 3PD common stock for $365 million, the
report said.
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.
As reported in the TCR on Jun 19, 2013, the Bankruptcy Court for
the Southern District of New York entered its Findings of Fact,
Conclusions of Law, and Order confirming the Second Amended Joint
Chapter 11 Plan of Reorganization of Arcapita Bank B.S.C.(c) and
Related Debtors with respect to teach Debtor other than Falcon Gas
Storage Company, Inc.
A copy of the Confirmed Second Amended Joint Plan (With First
Technical Modifications) is available at:
http://bankrupt.com/misc/arcapita.doc1265.pdf
ARCAPITA BANK: Tide Gas Wins Bid to Halt $120MM Claim Fight
-----------------------------------------------------------
Maria Chutchian of BankruptcyLaw360 reported that a New York
bankruptcy judge put aside litigation between Tide Natural Gas
Storage I LP and a group of former investors of an Arcapita Bank
BSC affiliate over the subordination of claims until a related
district court matter is settled.
According to the report, U.S. Bankruptcy Judge Sean H. Lane sided
with Tide and its contention that the court should wait for a
ruling in the district court lawsuit that Tide launched over
whether it can sue Arcapita's Falcon Gas Storage Co. Inc. for $120
million in fraud.
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.
As reported in the TCR on Jun 19, 2013, the Bankruptcy Court for
the Southern District of New York entered its Findings of Fact,
Conclusions of Law, and Order confirming the Second Amended Joint
Chapter 11 Plan of Reorganization of Arcapita Bank B.S.C.(c) and
Related Debtors with respect to teach Debtor other than Falcon Gas
Storage Company, Inc.
A copy of the Confirmed Second Amended Joint Plan (With First
Technical Modifications) is available at:
http://bankrupt.com/misc/arcapita.doc1265.pdf
ARROW ALUMINUM: U.S. Trustee Objects to Disclosure Statement
------------------------------------------------------------
Samuel K. Crocker, the U.S. Trustee for the Western District of
Tennessee, objects to the disclosure statement explaining Arrow
Aluminum Industries, Inc., et al.'s Chapter 11 Plan of
Reorganization, complaining that the papers do not contain
"adequate information," such as the Debtors' historic financial
operating information, statement of operations for the entire
postpetition period of operations, tables of projected income and
expenses sufficient to allow creditors to determine the
reasonableness of the Plan, the dollar amount of all contracts
outstanding at the time the Disclosure Statement was filed, a
liquidation analysis, and, as it pertains to Ricka Blackwell and
Edna Elaine Blackwell, information as to whether once their
reverse mortgages are obtained if they will dismiss their Chapter
11 cases.
The U.S. Trustee argues that the Court should not approve the
Disclosure Statement until or unless the issues raised are
resolved.
The Plan
The Debtor's Plan provides for Arrow's primary creditor, First
Citizens National Bank, to receive a secured claim for the
equipment and the insider principals obtaining reverse mortgages
on their homes and properties to pay Citizens Bank.
Individual debtors Ricka Blackwell and Edna Elaine Blackwell join
the Disclosure Statement explaining the Plan but their Chapter 11
cases are not substantively consolidated. The individual debtors
intend to seek dismissal of their cases in order to effectuate a
reverse mortgage. They have no other assets for distribution to
creditors.
The Claims against the Debtor consist of:
* Administrative Expense Claims, to be paid in full as soon as
practicable after the Effective Date.
* The secured claim of the First Citizens National Bank (Class
1) in the amount of $2,000,000, which will be paid 180 equal
monthly installments from the Effective Date.
* The Internal Revenue Service and State of Tennessee unsecured
priority claims (Class 2), which total $315,498, to be paid
in 60 months, with interest.
* IRS Secured Claim (Class 3), which total $285,378, will be
treated as fully undersecured in Class 2 and 5.
* The Allowed FCNB Undersecured Claim (Class 4) will be
determined after receipt of funds from the reverse mortgages
obtained by the Debtor's principals and paid to FCNB.
* General Unsecured Claims (Class 5) -- all unsecured claims
FCNB and including potential Claims from the Rejected
Contracts. Allowed Claims will receive general limited
liability company membership interests in the Reorganized
Debtor consistent with the proportion of their interests in
the Property prior to the Effective Date. It is divided into
Class 3A and 3B.
* Ownership Claims (Class 6) -- the allowed Claims and
Interests of the owners of the Debtor.
The monthly payments due on account of the allowed Claims will be
made from the net operational profits (positive cash flow) of the
operations, after allowance for operational expenses (vendor
costs, taxes) and reserves (to cover extraordinary repairs). The
Reorganized Debtor will remain in the current premises for 180
days after the Effective Date.
About Arrow Aluminum
Arrow Aluminum Industries, Inc., filed a Chapter 11 petition
(Bankr. W.D. Tenn. Case No. 13-21470) in Memphis on Feb. 11, 2013.
The petition was signed by William Ted Blackwell as president.
The Debtor has scheduled assets of $126,246,137 and scheduled
liabilities of $3,130,103. The Debtor is represented by
Harris Shelton Hanover Walsh, PLLC.
Arrow Aluminum previously sought Chapter 11 protection (Case No.
12-1348) in December but the case was promptly dismissed. In
that case, the U.S. Trustee sought dismissal or conversion to
Chapter 7, while Citizens National Bank sought appointment of a
Chapter 11 trustee to take over management of the Debtor's
properties.
ARTE SENIOR: Chapter 11 Reorganization Case Closed
--------------------------------------------------
The Hon. Eileen W. Hollowell of the Bankruptcy Court for the
District of Arizona entered an order dated June 27 closing the
Chapter 11 case of Arte Senior Living LLC.
As reported by the Troubled Company Reporter on May 28, 2013,
at the request of the Debtor, the Court entered an order approving
a settlement between the Debtor and SMA Issuer I, LLC, and an
order conditionally dismissing the Debtor's bankruptcy case.
The Court has authorized the Debtor to enter into, and to take all
actions necessary and appropriate to consummate and implement the
terms of, the settlement agreement, including but not limited to
entering into, and taking all actions necessary and appropriate to
consummate and implement, a purchase and sale agreement whereby
the Debtor shall sell its property to The Reliant Group or its
nominee as contemplated in and provided for under the settlement
agreement.
Both the Debtor and SMA Issuer filed competing Chapter 11 plans
for the Debtor. In April, the parties reached a settlement.
Accordingly, the Debtor asked the Court to:
a) approve a Compromise and Settlement Agreement dated
April 12, 2013, between, among others, the Debtor and
SMA Issuer I, LLC; and
b) conditionally dismiss the bankruptcy case in conjunction
with the closing of the sale transaction contemplated in
the Settlement Agreement.
The Settlement Agreement provides for, among other things: (a) the
sale of the Debtor's property to The Reliant Group for a cash
payment of $30,000,000 and (b) the payment of a total of
$31,000,000 (from the sale proceeds and other, non-Debtor sources)
to SMA in full and final satisfaction of its claims against the
Debtor, the Debtor's property and the alleged guarantors of SMA's
claim against the Debtor.
The Settlement Agreement provides for certain time limits to
accomplish the consummation of the sale and the settlement payment
to SMA, including (a) the execution of a purchase agreement by
April 18, 2013, (b) the payment of certain non-refundable deposits
to SMA by May 14, and (c) the closing of the sale no later than
June 18.
Pursuant to 11 U.S.C. Sec. 305(a), and as contemplated in the
approved settlement agreement, the bankruptcy case will be deemed
dismissed immediately upon the Debtor's and the buyer's full and
complete satisfaction of any and all conditions to closing the
sale of the Debtor's property.
If the sale transaction contemplated in the Settlement Agreement
does not close, for any reason, or if the Settlement is terminated
for any reason, the case will not be dismissed and the Court's
Order will be deemed null and void.
About Arte Senior Living
Arte Senior Living L.L.C. owns and operates an independent and
assisted living facility, known generally as the Arte Resort
retirement community, located at 11415 North 114th Street, in
Scottsdale, Arizona. The Property consists of 128,514 square feet
of rentable living space. The Property is managed by Encore
Senior Living.
Arte Senior Living filed a Chapter 11 petition (Bankr. D. Ariz.
Case No. 12-14993) in Phoenix on July 5, 2012. The Debtor
estimated assets and liabilities of $10 million to $50 million.
Judge George B. Nielsen Jr. oversees the case. John J. Hebert,
Esq., at Polsinelli Shughart, P.C., serves as counsel to the
Debtor. Syble Oliver appointed as patient care ombudsman.
SMA Portfolio Owner L.L.C. is represented by lawyers at Greenberg
Traurig, LLP.
The Debtor disclosed $52,317,766 in assets and $34,411,296 in
liabilities as of the Chapter 11 filing.
AVENTINE RENEWABLE: Sues 3 Ethanol Producers Over Soured Contracts
------------------------------------------------------------------
Kathryn Brenzel of BankruptcyLaw360 reported that Aventine
Renewable Energy Inc. lodged three lawsuits accusing ethanol
producers of shirking contracts inked before the Illinois company
entered Chapter 11 bankruptcy in 2009, claiming they together owe
more than $8.7 million in claims over unpaid train rentals.
According to the report, the trio of complaints follows the
dismissal of similar adversarial suits in Delaware bankruptcy
court, after the judge found that the court lacked jurisdiction.
Just as in the tossed complaints, Aventine is accusing three
companies -- Glacial Lakes Energy LLC, Aberdeen Energy LLC and
Redfield Energy.
The case is Aventine Renewable Energy, Inc. v. Aberdeen Energy,
LLC, Case No. 1:13-cv-01320 (C.D. Ill.), before Chief Judge James
E. Shadid.
About Aventine Renewable
Pekin, Illinois-based Aventine Renewable Energy Holdings, Inc.
(OTC BB: AVRW) -- http://www.aventinerei.com/-- markets and
distributes ethanol to many of the leading energy companies in the
U.S. In addition to producing ethanol, its facilities also
produce several by-products, such as distillers grain, corn gluten
meal and feed, corn germ and grain distillers dried yeast, which
generate revenue and allow the Company to help offset a
significant portion of its corn costs.
The Company and all of its direct and indirect subsidiaries
filed for Chapter 11 (Bankr. D. Del. Lead Case No. 09-11214) on
April 7, 2009. The Debtors filed their First Amended Joint Plan
of Reorganization under Chapter 11 of the Bankruptcy Code on
Jan. 13, 201. The Plan was confirmed by order entered by the
Bankruptcy Court on Feb. 24, 2010, and became effective on
March 15, 2010.
The Company reported a net loss of $43.39 million for the year
ended Dec. 31, 2011, compared with a net loss of $25.46 million
for the ten months ended Dec. 31, 2010.
The Company's balance sheet at March 31, 2012, showed
$384.90 million in total assets, $248.91 million in total
liabilities and $135.98 million in total stockholders' equity.
BEALL CORP: Confirmation Hearing Set for Sept. 5
------------------------------------------------
The U.S. Bankruptcy Court for the District of Oregon will convene
a confirmation hearing on September 5, 2013 at 1:30 p.m. for the
Second Amended Plan of Liquidation of Beall Corporation.
Objections to the Plan must be filed no later than Aug. 29, 2013,
by 4 p.m. Pacific time.
Ballots for the Plan must be received by the proponent of the
Plan, Michael W. Flectcher, Esq., at service address Tonkon Torp,
888 SW Fifth Ave., Ste 1600 Portland, OR 97204, no less than seven
days before the Confirmation Hearing Date.
Judge Elizabeth Perris entered the order approving the Second
Amended Disclosure Statement on July 19, 2013.
The Second Amended Disclosure Statement reveals that the Plan is
premised on the assumption that the Settlement Agreement with
KeyBank National Association, which was approved by the Court at a
July 17, 2013 hearing, has become effective. One condition of
effectiveness of the Keybank Settlement Agreement is that KeyBank
and the Affiliates have executed a forbearance agreement.
The Settlement Agreement allowed the Debtor to preserve
significant cash, approximately $700,000, for the benefit of the
Debtor's estate that KeyBank had asserted should be delivered to
KeyBank. Under the Settlement, the Debtor distributed $1,300,000
of the Remaining Sale Proceeds to KeyBank, which KeyBank applied
to reduce the obligations owed by the Affiliates to KeyBank (which
were guaranteed by Debtor). As a result of such payment, the
Debtor is subrogated to $1,300,000 of the Affiliate Obligations.
The Settlement requires the Affiliates to repay to the Debtor
within five years the $1,300,000 paid by Debtor toward the
Affiliate Obligations. Any Affiliate payments received by Debtor
will be utilized by Debtor to fund amounts owing to holders of
Allowed General Unsecured Claims, after paying (or reserving for)
any then-outstanding or expected administrative expenses.
As reported in the June 28, 2013 edition of The Troubled Company
Reporter, under the Plan of Liquidation, nearly all of the
Debtor's assets have been sold by Debtor, and the proceeds from
the sales have been distributed to its secured creditor, KeyBank
National Association, or retained by Debtor. The Plan provides
that all Allowed Administrative Expense Claims, Priority Tax
Claims and Other Priority Claims will be paid in full.
Administrative Expense Claims and Other Priority Claims will be
paid in full on the Effective Date, and Priority Tax Claims will
be paid in full with interest no later than five years after the
Effective Date. The Plan further provides that holders of Allowed
General Unsecured Claims will receive on account of such Claims
one or more Pro Rata Distributions of Available Cash when the Plan
Agent, after consultation with the Committee, determines
sufficient funds are available for the Plan Agent to make
meaningful distributions to holders of Allowed General Unsecured
Claims. All Equity Interests will be cancelled on the Effective
Date.
A copy of the Second Amended Disclosure Statement dated July 18,
2013 is available at:
http://bankrupt.com/misc/BEALL_2ndAmdDSJul18.PDF
About Beall Corporation
Portland, Oregon-based Beall Corporation, a manufacturer of
lightweight, efficient, and durable tanker trucks, trailers and
related products, filed a Chapter 11 bankruptcy petition (Bankr.
D. Ore. Case No. 12-37291) on Sept. 24, 2012, estimating at least
$10 million in assets and liabilities. Founded in 1905, Beall has
four factories and nine sale branches across the U.S. The Debtor
has 285 employees, with an average weekly payroll of $300,000.
Judge Elizabeth L. Perris presides over the case. Albert N.
Kennedy, Esq. at Tonkon Torp LLP represents the Debtor in its
restructuring effort. The Debtor disclosed, in an amended
schedules $14,015,232 in assets and $29,187,325 in liabilities as
of the Chapter 11 filing.
Wabash National Corporation on Feb. 4 successfully closed on its
acquisition of certain assets of Beall's tank and trailer business
for $15 million.
Robert D. Miller Jr., the U.S. Trustee for Region 18, appointed
six members to the official committee of unsecured creditors.
Ball Janik LLP represents the Committee.
BELLWEST HOLDINGS: Secured Creditor May Foreclose Ariz. Property
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Arizona approved a
settlement agreement among Bellwest Holdings, LLC, et al., Paul
Grasser; and secured creditor MLCFC 2007-9 Surprise Retail, LLC,
lender.
Pursuant to the settlement, among other things:
1. the automatic stay is lifted in favor of the lender to
foreclose real and personal property lien rights relating to
property located at 15455-15459 West Bell Road, Suprise,
Maricopa County, Arizona and proceeds thereof;
2. the Debtor's response in opposition to the motion for relief
from stay regarding the property and the Debtor's proposed
plan of reorganization are deemed withdrawn;
3. the hearing scheduled for May 23, 2013, for the relief
motion is vacated.
As reported by the Troubled Company Reporter on April 2, 2013, the
Debtors' proposed Plan of Reorganization dated Feb. 18, 2013,
provides that due to the current economic situation it is possible
that all secured creditors may not be paid according to their
contract with the Debtor but will be paid the amount of their
allowed claim over an extended period of time.
According to the explanatory Disclosure Statement, the infusion of
monies into the reorganized Debtor through capital contributions
may be required in order for Debtor to continue in business. In
order for the Debtor to continue in business, potential investors
of the Debtor may also infuse new capital, if required.
A copy of the Disclosure Statement is available for free at
http://bankrupt.com/misc/BELLWEST_HOLDINGS_ds.pdf
About Bellwest Holdings LLC
Bellwest Holdings LLC, owner of a property in Surprise, Arizona,
filed a Chapter 11 petition (Bankr. D. Ariz. Case No. 12-20126) on
Sept. 10, 2012, in Tucson. The Debtor, a single asset real estate
under 11 U.S.C. Sec. 101 (51B), estimated assets and debts of $10
million to $50 million in the petition.
Bankruptcy Judge Eileen W. Hollowell presides over the case. Eric
Slocum Sparks, Esq., at Eric Slocum Sparks PC, in Tucson, Ariz.,
serves as counsel.
BENJAMIN-PAUL PROPERTIES: Case Summary & 4 Unsecured Creditors
--------------------------------------------------------------
Debtor: Benjamin-Paul Properties LLC
aka Olympic Apartments
Paradise Point Apartments
300 E. Whidbey Avenue, #A1
Oak Harbor, WA 98277
Bankruptcy Case No.: 13-16488
Chapter 11 Petition Date: July 16, 2013
Court: U.S. Bankruptcy Court
Western District of Washington (Seattle)
Judge: Karen A. Overstreet
Debtor's Counsel: Darrel B. Carter, Esq.
CBG LAW GROUP, PLLC
11100 NE 8th Street, Suite 380
Bellevue, WA 98004
Tel: (425) 283-0432
E-mail: Darrel@cbglaw.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A copy of the Company's list of its largest unsecured creditors
filed with the petition is available for free at:
http://bankrupt.com/misc/wawb13-16488.pdf
The petition was signed by Clinett Glazis, member.
BLOCKBUSTER INC: Chapter 7 Conversion Approved
----------------------------------------------
BankruptcyData reported that the U.S. Bankruptcy Court approved
Blockbuster's motion to convert its Chapter 11 reorganization
cases to liquidation under Chapter 7.
As previously reported, "Conversion of the chapter 11 cases to
cases under chapter 7 will provide a mechanism to reconcile any
remaining claims, make final distributions, and close the
administration of these cases....Upon conversion, the chapter 7
trustee can determine how he wishes to allocate estate assets to
respond to requests from taxing authorities and other entities,"
the report said.
About Blockbuster Inc.
Blockbuster Inc., the movie rental chain with a library of
more than 125,000 titles, along with 12 U.S. affiliates,
initiated Chapter 11 bankruptcy proceedings with a pre-arranged
reorganization plan in Manhattan (Bankr. S.D.N.Y. Case No.
10-14997) on Sept. 23, 2010. It disclosed assets of $1 billion
and debts of $1.4 billion at the time of the filing.
Martin A. Sosland, Esq., and Stephen Karotkin, Esq., at Weil,
Gotshal & Manges, serve as counsel to the U.S. Debtors.
Rothschild Inc. is the financial advisor. Alvarez & Marsal is the
restructuring advisor with A&M managing director Jeffery J.
Stegenga as chief restructuring officer. Kurtzman Carson
Consultants LLC is the claims and notice agent. The Official
Committee of Unsecured Creditors retained Cooley LLP as its
counsel.
In April 2011, Blockbuster conducted a bankruptcy court-sanctioned
auction for all the assets. Dish Network Corp. won with an offer
having a gross value of $320 million. The Debtor changed its name
from Blockbuster Inc. to BB Liquidating Inc. after Dish purchased
all assets, including the trade name.
BOUNDARY BAY: Gets Discharge from Personal Liability for Debts
--------------------------------------------------------------
On July 15, 2013, the U.S. Bankruptcy Court for the Central
District of California entered an order releasing Boundary Bay
Capital, LLC, from personal liability for debts discharged under
11 U.S.C. Section 727 (or) 1141 (or) 1228 (or) 1328, except those
debts determined by order of a court with competent jurisdiction
not to be discharged pursuant to 11 U.S.C. Section 523.
All creditors whose debts are discharged by this order and all
creditors whose judgments are declared null and void by
this order are enjoined from instituting or continuing any action
or employing any process or engaging in any act to collect such
debts as personal liabilities of the Debtor.
As reported in the TCR on June 27, 2013, the Bankruptcy Court
confirmed Boundary Bay Capital, LLC's Third Amended Chapter 11
Plan which provides that creditors holding unsecured claims will
become the new owners of the Debtor and all the equity interests
of the current owners will be terminated. Secured creditors will
be paid through the surrender or sale of their collateral or
through payments over time, in some cases on a restructured basis.
Payments under the Plan will be funded through the proceeds of a
postpetition loan obtained by NewCo, a new company in which
the Debtor will have a membership interest, sales of assets, and
funds generated through operations. The Debtor will make periodic
distributions to creditors (as equity holders of the Reorganized
Debtor) as net proceeds become available.
About Boundary Bay
Boundary Bay Capital, LLC, is a California limited liability
company with its headquarters in Irvine, California. The Company
was in the business of making loans secured by liens on real
property and notes secured by other secured notes (which, in turn,
are secured by liens or real property). The Company also owns
some real property through foreclosure.
Boundary Bay Capital filed for Chapter 11 bankruptcy protection
(Bankr. C.D. Cal. Case No. 11-14298) on March 28, 2011. Beth
Gaschen, Esq., Hutchison B. Meltzer, Esq., and Evan D. Smiley,
Esq., at Weiland, Golden, Smiley, Wang Ekvall & Strok, LLP, in
Costa Mesa, Calif., serve as the Debtor's bankruptcy counsel.
Affiliate Cartwright Properties, LLC, filed a separate Chapter 11
petition (Bankr. C.D. Cal. Case No. 10-17823) on June 9, 2010.
In its schedules, the Debtor disclosed $15.88 million in assets
and $54.45 million in liabilities.
Melissa Davis Lowe, Esq., and Leonard M. Shulman, Esq., at Shulman
Hodges & Bastian LLP, in Irvine, Calif., represent the Official
Committee of Unsecured Creditors of Boundary Bay Capital, LLC, as
counsel.
BRIGHTSTAR CORP: Moody's Rates $250MM Sr. Unsecured Note 'B1'
-------------------------------------------------------------
Moody's Investors Service assigned a B1 rating to Brightstar
Corp.'s new senior unsecured note offering. The proceeds from the
notes will be used for general corporate purposes, including
repaying the outstandings under its asset backed revolver. The
rating outlook remains negative.
Issuer: Brightstar Corp.
$250M Senior Unsecured Regular Bond/Debenture, Assigned B1 (LGD4-
63%)
Ratings Rationale:
Moody's believes that while Brightstar's strategy to broaden its
product and services is prudent, the necessary investments,
greater staffing requirements and added execution risks stand to
pressure the credit metrics in the near term. Moreover, the low
operating margins, between 2% to 4% over time, provide limited
flexibility for operational missteps as Brightstar tries to build
market share in the rapidly growing, but highly competitive,
service of complete life cycle management of smartphones. Moody's
is also concerned about Brightstar's sizable working capital needs
and reliance on external financing during periods of significant
revenue growth. But, if the company's profitability does not
improve, and growth is funded entirely through asset backed
revolver borrowings which are eventually replaced with long-term
debt financing, the more permanent debt levels will pressure
Brightstar's ratings. Brightstar's new senior unsecured notes
offering is favorable from a liquidity standpoint to free up ABL
availability, but bonding out the ABL drawings indicates the need
for more longer- term financing.
The outlook may be stabilized if management shows tangible
progress in margin improvement towards steady 4% adjusted
operating margin range, and retained cash flow to debt (Moody's
adjusted) is maintained in the middle of the 10% to 20% range,
while maintaining good liquidity.
While not expected in the near term, ratings could be upgraded if
Brightstar's revenue and operating profits continue to grow. These
positive results could be demonstrated if Brightstar expands
operating margins above 4.5% (Moody's adjusted) on a sustained
basis, reduces operating and free cash flow margin volatility,
generates consistently positive free cash flow leading to improved
internal liquidity and sustains leverage below 2.5x total debt to
EBITDA (Moody's adjusted).
Ratings could be downgraded if Brightstar witnessed material
vendor losses or intense competition from distributors and
vendors/OEMs causing market share losses, pricing pressure and/or
substantial margin erosion as well as a significant decline in
internal liquidity, or if the company is unable to demonstrate
progress towards a 4% operating margin. Additionally, if the
company incurs a disproportionate amount of debt relative to
additive EBITDA growth to pursue an acquisition or investment
expected to result in total debt to EBITDA (Moody's adjusted)
sustained above 4x, the rating could be downgraded.
The principal methodology used in this rating was Global
Distribution & Supply Chain Services published in November 2011.
Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.
BRIGHTSTAR CORP: S&P Rates $250MM Senior Unsecured Notes 'B+'
-------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' issue-level
rating with a recovery rating of '5' to Miami-based Brightstar
Corp.'s $250 million senior unsecured notes. The company will use
the proceeds to pay down its credit facilities, which were
recently drawn to fund the company's working capital needs.
In addition, S&P lowered its issue-level rating on the company's
existing senior unsecured notes to 'B+' from 'BB-' and revised the
recovery rating to '5' from '4', resulting from the additional
senior unsecured debt in the capital structure. The '5' recovery
rating indicates S&P's expectation for modest (10% to 30%)
recovery for lenders in the event of default.
The 'BB-' corporate credit rating is unchanged. The outlook
remains negative. The refinancing transaction will not result in
any change in S&P's expected total adjusted leverage, which it
anticipates to be about 4.8x as of June 2013, giving half equity
credit to the preferred stock. S&P also expects that the
company's adjusted leverage will decrease to the mid-4x area in
fiscal 2013 and further improve to the 4x area in 2014, primarily
reflecting EBITDA expansion rather than debt repayment.
The ratings on Brightstar reflects S&P's assessment of the
company's "weak" business risk profile and "aggressive" financial
risk profile. S&P's business risk assessment reflects
Brightstar's highly competitive and fragmented global distribution
market, low distributor-like operating margins, narrow end-market
focus, and its complex operations across multiple geographies.
The company's expanding portfolio of services for the wireless
industry, improving year-over-year EBITDA margins, broad market
reach, and strong secular wireless device growth trends provide
support to S&P's business evaluation. Brightstar's aggressive
financial profile reflects its negative free operating cash flow
and increased leverage during periods of rapid expansion due to
the need to fund working capital.
RATINGS LIST
Brightstar Corp.
Corporate Credit Rating BB-/Negative/--
New Rating
Brightstar Corp.
$250 Mil. Senior Unsecured Notes B+
Recovery Rating 5
Ratings Lowered; Recovery Ratings Revised
To From
Brightstar Corp.
Senior Unsecured Notes B+ BB-
Recovery Rating 5 4
CARMIKE CINEMAS: Moody's Says Share Offering is Credit Positive
---------------------------------------------------------------
Moody's Investors Service said that the proposed offering of 4.5
million shares by Carmike Cinemas, Inc. would improve its credit
profile by boosting cash available for acquisitions or investments
in organic growth. The transaction could raise about $75 million
of cash, depending on the fees and offering price.
Headquartered in Columbus, Georgia, Carmike Cinemas, Inc. operates
245 cinema theaters with 2,476 screens located in 35 states,
primarily in small to mid-sized communities. Its revenue for the
twelve months ended June 30 was approximately $573 million, but
would likely be about $670 million pro forma for a full year of
its recent acquisitions.
CASA CASUARINA: Files Schedules of Assets and Liabilities
---------------------------------------------------------
Casa Casuarina LLC filed with the U.S. Bankruptcy Court for
the Southern District of Florida its schedules of assets and
liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $75,000,000
B. Personal Property $3,005,976
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $30 396,094
E. Creditors Holding
Unsecured Priority
Claims $0
F. Creditors Holding
Unsecured Non-priority
Claims $1,249,681
----------- -----------
TOTAL $78,005,976 $31,645,775
A copy of the schedules is available for free at
http://bankrupt.com/misc/CASA_CASUARINA_sal.pdf
About Casa Casuarina
Casa Casuarina, LLC, filed a Chapter 11 petition (Bankr. S.D. Fla.
Case No. 13-25645) in Miami on July 1, 2013. Peter Loftin signed
the petition as manager. Judge Laurel M. Isicoff presides over
the case. The Debtor estimated assets of at least $50 million and
debts of at lease $10 million. Joe M. Grant, Esq., at Marshall
Socarras Grant, P.L., serves as the Debtor's counsel.
CCC ATLANTIC: Cross & Simon Attorney Accused of Malpractice
-----------------------------------------------------------
Matt Chiappardi of BankruptcyLaw360 reported that an attorney at
Delaware law firm Cross & Simon LLC was accused of legal
malpractice by a real estate firm that claims the lawyer's
handling of its bankruptcy proceedings resulted in the case being
dismissed and led to it being placed in receivership.
According to the report, CCC Atlantic LLC filed its complaint in
the Delaware Court of Chancery accusing attorney Joseph Grey of
legal malpractice and breach of fiduciary duty, and alleging his
firm refused to release the bulk of a $125,000 settlement held in
escrow.
About CCC Atlantic
Based in Linwood, New Jersey, CCC Atlantic, LLC, filed for Chapter
11 protection (Bankr. D. Del. Case No. 12-13290) on Dec. 6, 2012.
The Debtor owns and maintains two commercial office condominiums
in Linwood, New Jersey. The Debtor has scheduled assets totaling
$48,890,617 and liabilities of $41,568,640 as of the Petition
Date.
The Debtor won approval to hire Cross & Simon, LLC, as Delaware
counsel and Silverang & Donohoe, LLC, as general bankruptcy
counsel, nunc pro tunc to the Petition Date.
CENGAGE LEARNING: DRC Retained as Claims & Noticing Agent
---------------------------------------------------------
Donlin, Recano & Company, Inc. on July 23 disclosed that it has
been retained to provide claims and noticing agent services in the
Cengage Learning, Inc. Chapter 11 cases.
Based in Stamford, Connecticut, Cengage is a leading provider of
both print and digital instructional and reference materials for
the higher education and library reference markets worldwide.
Cengage filed Chapter 11 in the United States Bankruptcy Court for
the Eastern District of New York on July 2, 2013. To date,
Cengage is the largest company in terms of assets and liabilities
to file Chapter 11 in 2013.
Counsel for debtor is Kirkland & Ellis LLP, New York, New York.
Case information can be found by visiting DRC's website at
http://www.donlinrecano.org/cl/home?dataDir=cl
About Donlin Recano
Donlin Recano -- http://www.donlinrecano.com-- is a division of
DF King Worldwide and a provider of claims, noticing, balloting,
solicitation and technology solutions.
About Cengage Learning
Stamford, Connecticut-based Cengage Learning --
http://www.cengage.com/-- provides innovative teaching, learning
and research solutions for the academic, professional and library
markets worldwide. Cengage Learning's brands include
Brooks/Cole, Course Technology, Delmar, Gale, Heinle, South
Western and Wadsworth, among others. Apax Partners LLP bought
Cengage in 2007 from Thomson Reuters Corp. in a $7.75 billion
transaction. The acquisition was funded in part with $5.6 billion
in new debt financing.
Cengage Learning Inc. filed a petition for Chapter 11
reorganization (Bankr. E.D.N.Y. Case No. 13-bk-44106) on July 2,
2013, in Brooklyn, New York, after signing an agreement where
holders of $2 billion in first-lien debt agree to support a
reorganization plan. The plan will eliminate more than $4 billion
of $5.8 billion in debt.
First-lien lenders who signed the so-called plan-support agreement
include funds affiliated with BlackRock Inc., Franklin Mutual
Adviser LLC, KKR & Co. and Oaktree Capital Management LP. Second-
lien creditors and holders of unsecured notes aren't part of the
agreement.
The Debtors have tapped Kirkland & Ellis LLP as counsel, Lazard
Freres & CO. LLC as financial advisor, Alvarez & Marsal North
America, LLC, as restructuring advisor, and Donlin, Recano &
Company, Inc., as claims and notice agent.
A nine-member official committee of unsecured creditors has been
appointed in the Debtors' Chapter 11 cases.
CENTURY PLAZA: Cash Collateral Use Bid Mooted by Plan Confirmation
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Indiana
held that Century Plaza LLC's Motion for further extension of cash
collateral use is mooted by the assumed confirmation of the
Debtor's Plan.
About Century Plaza
Based in Merrillville, Indiana, Century Plaza LLC owns and
operates a commercial shopping center known as "Century Plaza".
It filed for Chapter 11 bankruptcy (Bankr. N.D. Ind. Case No.
11-24075) on Oct. 18, 2011. Judge J. Philip Klingeberger presides
over the case. Crane, Heyman, Simon, Welch & Clar serves as the
Debtor's counsel. Anderson & Anderson P.C. serves as local
bankruptcy counsel. The Debtor estimated assets and debts at $10
million to $50 million. The petition was signed by Richard Dube,
president of Tri-Land Properties, Inc., manager.
The Plan provides for distributions to the holders of Allowed
Claims from funds realized by the Debtor from the continued
operation of the Debtor's business by the Debtor as well as from
existing cash deposits and cash resources of the Debtor.
CHARLES CASH: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Charles Cash, Inc.
4410-B Tamiami Trail
Charlotte Harbor, FL 33980-2124
Bankruptcy Case No.: 13-09289
Chapter 11 Petition Date: July 16, 2013
Court: U.S. Bankruptcy Court
Middle District of Florida (Ft. Myers)
Judge: Caryl E. Delano
Debtor's Counsel: Leon A. Williamson, Jr., Esq.
LEON A. WILLIAMSON, JR., P.A.
306 S. Plant Avenue, Suite B
Tampa, FL 33606
Tel: (813) 253-3109
Fax: (813) 253-3215
E-mail: leon@lwilliamsonlaw.com
Estimated Assets: $0 to $50,000
Estimated Debts: $1,000,001 to $10,000,000
A copy of the Company's list of its 20 largest unsecured creditors
is available for free at http://bankrupt.com/misc/flmb13-09289.pdf
The petition was signed by Charles Cash, president.
CHEMTURA CORP: Commences Offering of $400-Mil. Senior Notes
-----------------------------------------------------------
Chemtura Corporation on July 18 disclosed that it is commencing,
subject to market conditions, an offering of $400 million of
senior notes due 2021. The offering is being made pursuant to the
Company's automatic shelf registration statement on Form S-3 filed
with the Securities and Exchange Commission on June 10, 2013 and
pursuant to a preliminary prospectus supplement, which will also
be filed with the SEC.
The Company intends to use the net proceeds from the sale of the
notes to pay the consideration in its previously announced cash
tender offer and consent solicitation with respect to any and all
of its outstanding $455 million aggregate principal amount of
7.875% Senior Notes due 2018 and to pay related fees and expenses,
including tender premiums and accrued and unpaid interest.
Citigroup, BofA Merrill Lynch, Wells Fargo Securities, Barclays
and Goldman, Sachs & Co. will serve as joint book-running managers
for the notes offering. A prospectus and prospectus supplement
concerning the notes offering may be obtained by contacting
Citigroup, Brooklyn Army Terminal, 140 58th Street, Brooklyn, New
York 11220 or by Telephone: (800) 831-9146 or by e-mail at
batprospectusdept@citigroup.com
About Chemtura Corp.
Based in Middlebury, Connecticut, Chemtura Corporation --
http://www.chemtura.com/-- with 2008 sales of $3.5 billion, is a
global manufacturer and marketer of specialty chemicals, crop
protection products, and pool, spa and home care products.
Chemtura Corporation and 26 of its U.S. affiliates filed voluntary
petitions for relief under Chapter 11 (Bankr. S.D.N.Y. Case No.
09-11233) on March 18, 2009. The Debtors disclosed total assets
of $3.06 billion and total debts of $1.02 billion as of the
Chapter 11 filing.
M. Natasha Labovitz, Esq., at Kirkland & Ellis LLP, in New York,
served as bankruptcy counsel for the Debtors. Wolfblock LLP was
the Debtors' special counsel. The Debtors' auditors and
accountant were KPMG LLP; their investment bankers are Lazard
Freres & Co.; their strategic communications advisors were Joele
Frank, Wilkinson Brimmer Katcher; their business advisors were
Alvarez & Marsal LLC and Ray Dombrowski served as their chief
restructuring officer; and their claims and noticing agent was
Kurtzman Carson Consultants LLC.
The Official Committee of Equity Security Holders tapped
Jay Goffman, Esq., and David Turetsky, Esq., at Skadden Arps Slate
Meagher & Flom LLP, in New York, as counsel. the Official
Committee of Unsecured Creditors retained Daniel H. Golden, Esq.,
Philip C. Dublin, Esq., and Meredith A. Lahaie, Esq., at Akin Gump
Strauss Hauer & Feld LLP, in New York, as counsel.
Chemtura completed its financial restructuring and emerged from
protection under Chapter 11 in November 2010. In connection with
the emergence, reorganized Chemtura is now listed on the New York
Stock Exchange under the ticker "CHMT".
CHEYENNE HOTELS: Stipulates for Cash Collateral Use Thru July 31
----------------------------------------------------------------
Cheyenne Hotels, LLC, negotiated with Colorado East Bank & Trust a
third extension of cash collateral access through July 31, 2013.
The parties agree that the Debtor may use the Cash Collateral in
the ordinary course of business through July 31 in accordance with
a prepared budget. During the Third Extension Period, the Debtor
will continue to make adequate protection payments to the Bank.
Thomas F. Quinn, Esq. -- tquinn@tfqlaw.com -- of Thomas F. Quinn,
P.C., serves as counsel to the Debtor.
Beverly L. Edwards, Esq. -- bedwards@rmlawgrp.com -- of The Rocky
Law Mountain Law Group, LLC, in Aurora, Colorado, serves as
counsel to Colorado East Bank & Trust.
About Cheyenne Hotels
Cheyenne Hotels LLC, which owns and operates the Hampton Inn &
Suites in Colorado Springs, Colorado, filed for Chapter 11
bankruptcy (Bankr. D. Colo. Case No. 11-37518) on Nov. 25, 2011.
Judge A. Bruce Campbell presides over the case, taking over from
Judge Michael E. Romero. Thomas F. Quinn PC, serves as the
Debtor's counsel. The Debtor estimated $10 million to $50 million
in both assets and debts. The petition was signed by Tanveer
Khan, manager.
Affiliate Cheyenne Hotel Investments LLC filed for Chapter 11
bankruptcy protection (Bankr. D. Colo. Case No. 11-25379) on
June 28, 2011, disclosing assets of $12,912,702 and liabilities of
$8,074,325 as of the Petition Date. Thomas F. Quinn, Esq.,
represents the Debtor as counsel. The Debtor owns a property
consisting of a 104 room hotel located in Colorado Springs, and
known as Homewood Suites by Hilton.
CITIZENS CORP: Financial Data's Chapter 11 Plan Declared Effective
------------------------------------------------------------------
Citizens Corporation and Financial Data Technology Corporation
notified the U.S. Bankruptcy Court for the Middle District of
Tennessee that the Effective Date of Fi-Data's Plan of Liquidation
dated Feb. 1, 2013, occurred on June 3, 2013.
Fi-Data's Plan was confirmed on May 17.
As reported by the Troubled Company Reporter on April 23, 2013,
Fi-Data's Plan proposes a liquidation of all of the Debtor's
assets, and the remaining cash distributed to creditors. The
Debtor proposes paying all administrative, secured, and priority
claims in full, that all general Unsecured Creditors -- not
including the claims of Community South Bank and Decatur County
Bank -- receive a pro rata amount of remaining cash. A copy of
the Disclosure Statement is available for free at
http://bankrupt.com/misc/CITIZENS_CORPORATION_ds.pdf
About Citizens Corp.
Franklin, Tennessee-based Citizens Corp. operates a mortgage
brokerage business. Citizens Corp. filed for Chapter 11
bankruptcy (Bankr. M.D. Tenn. Case No. 11-11792) on Nov. 28, 2011.
Judge George C. Paine, II, presides over the case. The Debtor
employed Robert J. Mendes, Esq., at MGLAW, PLLC, as its counsel.
Citizens, in its amended schedules disclosed $53,971,951 in assets
and $17,885,280 in liabilities as of the Chapter 11 filing.
Glenn B. Rose, Esq. at Harwell Howard Hyne Gabbert & Manner, P.C.
represents Fi-Data.
Lenders Tennessee Commerce Bank is represented by David W.
Houston, IV, Esq., at Burr & Forman LLP.
Citizens filed a reorganization plan offering to pay all
creditors in full over time, including Tennessee Commerce Bank and
other secured lenders owed $17.3 million. Unsecured creditors,
owed a combined $81,000, would be paid off in equal installments
over five years.
On Feb. 27, 2012, the Court granted the request of lender Legends
Bank for appointment of a Chapter 11 trustee. The Court held that
an independent person must review many of the transactions
involving CEO Ed Lowery, and its wholly owned subsidiary,
Financial Data Technology Corporation. Gary M. Murphey, the
Chapter 11 trustee is represented by Harwell, Howard, Hyne,
Gabbert & Manner, P.C.
Marion Ed Lowery, a former owner of Peoples State Bank of Commerce
of Nolensville and various other entities, is the subject of
federal investigation and his ventures have ties throughout the
Middle Tennessee banking community. He signed the Chapter 11
petition.
COLOREP INC: Section 341(a) Meeting Scheduled for Aug. 12
---------------------------------------------------------
A meeting of creditors in the bankruptcy case of Colorep, Inc.,
will be held on Aug. 12, 2013, at 10:00 a.m. at RM 2612, 725 S
Figueroa St., Los Angeles, CA.
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.
Colorep Inc., an industrial printer from Harrisonburg, Virginia,
filed for Chapter 11 protection (Bankr. C.D. Cal. Case No. 13-
27689) on July 10 in Los Angeles, owing $17 million to secured
lender Meserole LLC. The company licenses a fabric-dyeing
process known as AirDye. Colorep's subsidiary Transprint USA Inc.
also filed in Chapter 11. Transprint produces transfer-printing
paper.
COMMERCIAL VEHICLE: S&P Alters Outlook to Stable & Affirms 'B' CCR
------------------------------------------------------------------
Standard & Poor's Ratings Services revised its rating outlook on
New Albany, Ohio-based Commercial Vehicle Group Inc. (CVG) to
stable from positive. S&P affirmed its 'B' corporate credit
rating on the company and the 'B' issue rating and '4' recovery
rating on the company's senior secured debt.
The ratings on CVG reflect the company's "highly leveraged"
financial risk profile and "vulnerable" business risk profile.
"We are revising CVG's financial risk profile to "highly
leveraged" from "aggressive" because we now expect the company's
debt-to-EBITDA to remain near 6x at year-end 2013, and a reduction
in debt leverage depends largely on improved EBITDA through market
demand improvements because the company's debt is not prepayable,"
said credit analyst Nancy Messer. The company's trailing 12-month
lease-adjusted debt leverage was 6.2x as of March 31, 2013
(compared with 3.8x in the prior period) and EBITDA interest
coverage was 2.1x (compared with 3.3x). Free operating cash flow
(FOCF) to debt was 0.9% (compared with 2.9% in the prior period)
for the 12 months ended March 31, 2013, and may improve somewhat
by year-end because of expected operating and working capital
efficiencies.
The company's vulnerable business risk profile reflects in large
part its exposure to highly cyclical end markets, which are often
more cyclical than a region's overall economy. In addition, CVG
has geographic, market, and customer concentration, and exposure
to changes in commodity costs. CVG is also vulnerable to the
incurrence of premium costs when production volumes increase as
markets recover. Favorably, CVG's labor force is highly variable
and can be temporarily flexed down when production volumes falter.
As CVG has grown through acquisitions in recent years, its end
market diversity has somewhat improved. Still, it remains
dependent on the economically sensitive heavy duty truck (45% of
its revenues are from sales to the North American Class 8 truck
market) and off-highway construction equipment industries (25% of
revenues). Sales to the aftermarket and vehicle maker services
(14%) are less volatile, and the remainder of sales (16%) is to
the bus, military, agriculture, and other truck markets. Despite
this growth, CVG's business remains concentrated in North America,
where it generated 78% of its 2012 revenues; S&P expects
incremental but not material diversification of its footprint in
the year ahead. The company generated the balance of sales from
its operations in Europe, Asia, Australia, and Mexico. Longer
term, CVG could benefit in Asian markets from continuing economic
growth that exceeds that of mature markets such as the U.S. and
Europe.
Other business risk factors that could pressure profits include
limits on credit availability for truck buyers and potential price
concessions to customers.
Construction equipment market sales, remaining weak globally,
failed to mitigate the weak Class 8 truck market in North America
in the first half of 2013. Still, S&P expects modestly stronger
Class 8 volumes in the second half of 2013, due in part to the
aging of the heavy duty truck population, and these higher volumes
should enable CVG to maintain EBITDA of about $50 million over
the next 12 months.
CVG supplies a concentrated group of large, price-sensitive
commercial-truck original equipment manufacturers. The company's
top five customers accounted for 66% of its 2012 sales, and S&P do
not expect that exposure to change materially through 2013. If
the weakness in the North American Class-8 market that S&P expects
throughout 2013 were to become a full down-cycle, CVG's customers
could in-source cab assembly to use excess capacity. S&P believes
CVG will continue pricing products to incorporate incremental raw
material cost increases, as it has historically.
In North America, S&P believes the Class 8 build rate may decrease
as much as 10% year over year in 2013 because of the weak economy
and housing market. North American heavy-duty truck production
more than doubled in 2011 from the 2009 trough, but 2012 builds
increased only 9% to 279,000 units, far below the 2006 production
peak of 376,000 units. Growth in Europe, China, and the U.S.
medium-duty truck market has decelerated, and S&P expects this
trend to continue in 2013. In S&P's opinion, a long-term
replacement trend of 220,000-230,000 trucks per year is
sustainable in North America. The up-cycle that began in 2009 is
a result of the relatively high average age of the U.S. Class 8
truck fleet, combined with improving truck tonnage, among other
factors.
CVG designs, engineers, and produces structural components of
truck cabs, including frame sleeper boxes and cab-related interior
products for the commercial-truck markets. The company's products
include seating, electronic wire harness assemblies, and interior
trim systems. S&P expects CVG to continue to diversify its
product offerings and global footprint in the year ahead through
relatively small, timely, specific acquisitions, as it has done
throughout its existence as a public company.
The rating outlook on CVG is stable. S&P believes that
commercial-truck production in North America will continue to
expand in 2013 and into 2014, likely reaching a plateau in 2014
for the current up-cycle. Modestly expanding production volumes
in North America Class 8 market and construction markets abroad
should improve CVG's operating efficiencies in the year ahead.
This should allow the company's EBITDA to rise sufficiently to
reduce debt leverage to below 5x by mid-year 2014. Moreover, S&P
expects positive FOCF in 2013 and 2014, with FOCF to debt of 2.5%
or better. CVG's leverage rose to 6.2x for the 12 months ended
March 31, 2013, and FOCF to total debt fell to 0.9%.
"While unlikely during the next 12 months, we could raise the
rating if CVG reduces leverage -- as measured by debt to EBITDA,
including our adjustments -- to significantly below 4x and
produces consistent FOCF in 2014. This could occur if EBITDA,
including our adjustments, were to increase to $80 million or
better and improve from that point. To raise the rating, we would
need to believe that the company would not undertake transforming
acquisitions or acquisitions requiring leverage. We would also
need to believe that the company's market position and operating
execution are sufficiently robust to withstand a possible downturn
in North American commercial-vehicle production beginning in 2014,
or continuing weak global demand for construction equipment,
without turning free cash flow negative," S&P said.
"We could lower our ratings if CVG's markets do not begin to
improve in the year ahead, raising the possibility of liquidity
concerns. This could occur if the company were required to use a
material amount of its cash on hand for working capital or if it
were to use a meaningful amount of liquidity for acquisitions or
capacity expansion, exceeding our estimate of about $20 million
for capital spending, in the year ahead. We could also lower the
ratings if EBITDA for the year ahead is weaker than our estimate
of at least $50 million, leading to continuing debt leverage above
6x," S&P added.
COMMUNITY MEMORIAL: Ronald Rose Named as Claims Mediator
--------------------------------------------------------
The Hon. Daniel S. Opperman of the U.S. Bankruptcy Court appointed
Ronald Rose as mediator as to all claims raised by Citizens
National Bank of Cheboygan and the United States of America, on
behalf of its agency, the United States Department of
Agriculture's Rural Development Agency, regarding distribution of
proceeds from sale of Community Memorial Hospital's assets.
At a June 7, 2013, status conference, the Court determined that
the claims between Citizens National and the U.S. Department of
Agriculture's Rural Development Agency must be mediated.
About Community Memorial Hospital
Community Memorial Hospital, operator of the Cheboygan Memorial
Hospital, filed for Chapter 11 bankruptcy (Bankr. E.D. Mich. Case
No. 12-20666) on March 1, 2012. Judge Daniel S. Opperman oversees
the case. Paul W. Linehan, Esq., and Shawn M. Riley, Esq., at
McDonald Hopkins LLC, in Cleveland, Ohio; and Jayson Ruff, Esq.,
at McDonald Hopkins LLC, in Bloomfield Hills, Michigan, represent
the Debtor as counsel. The Debtor's financial advisor is Conway
Mackenzie Inc. The Debtor disclosed $23,085,273 in assets and
$26,329,103 in liabilities.
Opened in 1942, the Debtor is an independent, not-for-profit
entity, organized exclusively for charitable, scientific and
educational purposes, and holds tax exempt status in accordance
with Section 501(c)(3) of the Internal Revenue Code. The
Cheboygan Memorial Hospital is a 25-bed critical access hospital
located in Cheboygan, Cheboygan County, a community on the Lake
Huron coast. The Debtor has 395 employees.
McLaren Health Care Corporation proposed to acquire substantially
all of the Debtor's operating assets at its primary hospital
campus, for $5,000,000, plus (2) all amounts required for the
Debtor to cure and assume the assigned Assumed Contracts and
Leases.
Daniel M. McDermott, the U.S. Trustee for Region 9, appointed a
five-member official committee of unsecured creditors in the
Chapter 11 case of Community Memorial Hospital.
Michael S. McElwee, Esq., at Varnum LP, in Grand Rapids, Michigan,
represents the Unsecured Creditors' Committee as counsel.
The Official Committee of Unsecured Creditors'Combined Plan of
Liquidation and Disclosure Statement for Community Memorial, as
first amended, provides that among other things, the treatment for
Class 3 Citizens Bank Secured Claim and Class 4 USDA Secured Claim
were clarified; some definitions of terms were added and amended;
and some plan exhibits were updated.
As reported by The Troubled Company Reporter on May 2, 2013, the
Committee Plan, contemplates that a Liquidating Trustee will seek
a full and final resolution of any and all security interests
asserted or associated with the Accounts Receivable and the
Accounts Receivable Proceeds.
CONERGY AG: Plans to Sell Brand to Fla.-Based Kawa Capital
----------------------------------------------------------
Ama Sarfo of BankruptcyLaw360 reported that German solar panel
maker Conergy AG intends to sell its global sales units and brand
name to Florida-based asset manager Kawa Capital Management Inc.,
it announced two weeks after it filed for insolvency in Germany.
According to the report, Conergy's management board, its
preliminary insolvency administrator and Kawa signed a letter of
intent, and Conergy said the parties will finalize the
transaction's details and their purchase agreement in the next
four weeks. A Conergy spokeswoman told Law360 that a deal price
cannot be disclosed, the report said.
Conergy AG is a Hamburg-based solar panel manufacturer.
CROSSOVER FINANCIAL: Files 3rd Amended Plan & Disclosure Statement
------------------------------------------------------------------
Crossover Financial I, LLC, filed with the U.S. Bankruptcy Court
for the District of Colorado a Third Amended Plan of
Reorganization and Disclosure Statement.
The Third Amended Disclosure Statement, among other things,
reveals more details on the real property sales intended to
provide funding for the Plan, updates the list of claims against
the Debtors, and includes an updated liquidation analysis. A
full-text copy of the latest version of the Disclosure Statement
dated June 12, 2013 is available at:
http://bankrupt.com/misc/CROSSOVER_DSJun12.PDF
The Debtor intends to fund the Plan through the sale of several
real property lots for a minimum purchase price of $12.67 million
(based on a sales price of $15,000 per lot X 845 lots).
Currently, the Debtor's planned development consists of 623 single
family lots plus parcels for up to another 222 multifamily units.
The sale contracts provide for multiple closings, with the initial
closing to occur within 18 months of the Plan confirmation for a
minimum of 150 lots.
As previously reported by The Troubled Company Reporter, Crossover
Financial I failed to obtain approval of its Second Amended
Disclosure Statement dated March 8, 2013 as the Bankruptcy Court
held it lacked adequate information required by the Bankruptcy
Code.
About Crossover Financial I
Crossover Financial I, LLC, based in Elizabeth, Colorado, was
formed on Aug. 12, 2005. Mitchell B. Yellen is the manager and
sole member. The Company was formed for the purpose of raising
funds through a Private Placement Memorandum to be loaned to an
entity known as HPR, LLC, in connection with the acquisition and
development of 440 acres of real property located near Monument,
Colorado.
HPR consisted of three members: Colorado Commercial Builders, Inc.
(37.5%); DJT, LLC (20.0%); and Yellen Family Partnership, LLLP
(42.5%). Mitchell Yellen held an interest in the Yellen Family
Partnership, LLLP.
The project stalled primarily as a result of a collapse in the
residential real estate development market in 2007 and potential
developers pulled out of the project. There has been no
further development activity on the Real Property since 2007.
Faced with the prospect of a lengthy foreclosure proceeding, the
Debtor entered into to an agreement with HPR whereby the Real
Property was transferred to the Debtor by way of a deed-in-lieu
of foreclosure. Upon acquiring the Real Property, the Debtor
attempted to bring in additional developers to continue the
project but those efforts were unsuccessful.
The Company filed for Chapter 11 bankruptcy (Bankr. D. Colo. Case
No. 11-24257) on June 15, 2011. Judge Sidney B. Brooks presides
over the case.
Stephen C. Nicholls, Esq., at Nicholls & Associates, P.C., in
Denver, serves as bankruptcy counsel. In its petition, the Debtor
estimated assets and debts of $10 million to $50 million. The
petition was signed by Mitchell B. Yellen. Karen McClaflin of
Home Source Realty, LLC, Colorado acts as real estate broker for
the Estate.
An official unsecured creditors committee has not been appointed.
DAMES POINT: May Hire CYA Accounting to Assist in Bookkeeping
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida
authorized Dames Point Holdings LLC to employ CYA Accounting
Services LLC as accountant to assist the Debtor in preparing its
monthly operating statements and in bookkeeping duties.
As reported by the Troubled Company Reporter on May 10, 2013, the
Debtor related that prepetition, it had a computer crash losing
almost all of its electronic records. The Debtor said CYA
Accounting will be able to recreate the previous years that were
lost, well as maintain record current as required by the
bankruptcy rules.
Lisa Ann McKrell, owner of the CYA, will be responsible in
providing services to the Debtor at a rate of $35 per hour. Mr.
McKrell assures the Court that CYA is a "disinterested person" as
that term is defined in Section 101(14) of the Bankruptcy Code.
About Dames Point Holdings
P & B Marina Development, LLC filed an involuntary chapter 11 case
against Jacksonville, Florida-based Dames Point Holdings, LLC
(Bankr. M.D. Fla. Case No. 13-00501) on Jan. 29, 2013. Scott A.
Underwood, Esq., at Fowler White Boggs, P.A. represented the
petitioners.
On March 12, 2013, the Court entered an order vacating the
Feb. 28, 2013, order for relief in involuntary Chapter 11 case.
Gust G. Sarris is the counsel for the Debtor.
The Court has consolidated the involuntary Chapter 11 case for all
purposes with the voluntary case of William F. Snafnacker.
The U.S. Trustee for Region 21 has informed the Bankruptcy Court
that until further notice, it will not appoint a committee of
creditors in the Chapter 11 case of Dames Point Holdings because
of an insufficient number of unsecured creditors willing or able
to serve on an unsecured creditors committee.
DEAN FOODS: Proposed $750MM Debt Facility Gets Moody's Ba2 Rating
-----------------------------------------------------------------
Moody's Investors Service assigned a Ba2 senior secured rating to
Dean Foods' new $750 million revolving credit facility expiring in
July 2018, which replaces the company's previous $1 billion
revolver expiring in April 2014. The company's other ratings,
including its B1 Corporate Family Rating, remain unchanged. The
outlook is stable.
Rating assigned:
$750 million senior secured revolver expiring in July 2018 at Ba2
(LGD 2, 26%,)
Rating withdrawn:
$1.275 billion senior secured revolver expiring in April 2014 at
Ba2 (LGD 2, 23%)
Ratings unchanged:
Corporate Family Rating at B1;
Probability of Default Rating at PD-B1;
Speculative Grade Liquidity Rating of SGL-2
Ratings Rationale:
Dean's B1 Corporate Family Rating reflects its business and
financial position post the completion of the planned spinoff of
most of its remaining interest in WhiteWave to shareholders, as
well as the sale of Morningstar which closed on January 3, 2012.
Ratings reflect its narrow pro-forma margins and the commodity
oriented nature of the fluid milk business. It also reflects the
company's more limited product, geographic and customer
diversification than several of its food and agriculture company
peers, and the potential for high earnings volatility due to
fluctuating milk prices and low pricing power. It also reflects
certain challenges facing the category including declining US milk
consumption and dependence on government farm policy as regards
milk subsidies. The rating is supported by the company's leading
market share, national scale in the US dairy industry, and strong
distribution network with comprehensive refrigerated direct store
delivery systems, all of which have allowed Dean to gain market
share versus competitors. The rating also reflects improving
leverage expected following the completion of the White Wave spin
off as well as the potential for further cost
efficiencies/productivity improvements as management focuses on
internal integration, streamlining of operations and cost
reduction initiatives.
The stable outlook reflects Moody's assumption that Dean will
pursue a conservative financial policy, but will continue to
maintain relatively high financial leverage.
Ratings could be upgraded over time if Dean can demonstrate that
it is able to sustain less volatility than it has in the past in
its fluid milk business, achieve greater cost efficiencies,
permanently reduce leverage below 3.5 times, and improve interest
coverage.
A downgrade could result from declining cash flow, deterioration
in liquidity, volume declines that are not offset by pricing and
efficiency gains, leverage sustained above 5 times, or any large
debt funded shareholder returns or acquisitions.
The principal methodology used in this rating was the Global
Protein and Agriculture Industry Methodology published in May
2013. Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.
Dean Foods is the largest processor and distributor of milk and
various other dairy products in the United States. Headquartered
in Dallas, Texas, Dean Foods has sales of approximately $9 billion
(pro forma for the spin-off of WhiteWave and sale of its
Morningstar subsidiary).
DEEP PHOTONICS: Court to Hear nLight's 2nd Dismissal Bid on Aug. 5
------------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Oregon is set to
convene a hearing on Aug. 5, 2013, at 11:00 a.m. at Courtroom #3,
in Portland, to consider nLight Photonics Corporation and Cary
Kiest's Second Motion to Dismiss, or Convert, the case of Deep
Photonics Corporation.
About Deep Photonics
Deep Photonics Corporation filed a Chapter 11 petition (Bankr. D.
Ore. Case No. 12-35626) on July 20, 2012. Deep Photonics designs
and manufactures innovative solid-state fiber lasers. The Debtor
scheduled $75,111,128 in assets and $4,917,393 in liabilities.
Bankruptcy Judge Trish M. Brown presides over the case. Timothy
J. Conway, Esq., at Tonkon Torp LLP, serves as the Debtor's
counsel. The petition was signed by Theodore Alekel, president.
Raytex Corporation and Raytex USA Corporation filed a joinder to
the Second Motion to Dismiss. The Raytex Entities relate that
they made a good faith effort through telephone conferences to
resolve the dispute, but have been unable to do so.
S. Ward Greene, Esq., of Greene & Markley, P.C., represents the
Raytex Entities.
DEMCO INC: Sec. 341 Creditors' Meeting Adjourned Until Nov. 13
--------------------------------------------------------------
Asst. U.S. Trustee Joseph Allen adjourned the meeting of creditors
in the Chapter 11 cases of Demco, Inc., to Nov. 13, 2013, at 1
p.m. The meeting will be held at Buffalo UST - Olympic Towers.
Demco, Inc., aka Decommissioning & Environmental Management
Company, is a specialty trade contractor based in West Seneca, New
About Demco Inc.
Demco, Inc., aka Decommissioning & Environmental Management
Company, is a specialty trade contractor based in West Seneca, New
York, which provides demolition services, nuclear work,
environmental clean-up, disaster response and a variety of other
services throughout the United States and, on a project-by-project
basis, internationally. Some of Demco's better known demolition
projects in the past have included the Rocky Flats Nuclear Power
Plant, Yankee Stadium, the Orange Bowl, Buffalo Memorial
Auditorium, and the Sunflower Army Ammunition Plant.
Demco filed for Chapter 11 protection (Bankr. W.D.N.Y. Case No.
12-12465) on Aug. 6, 2012. Bankruptcy Judge Michael J. Kaplan
presides over the case. Daniel F. Brown, Esq., at Andreozzi,
Bluestein, Fickess, Muhlbauer Weber, Brown, LLP, represents the
Debtor in its restructuring effort. The Debtor estimated assets
and debts at $10 million to $50 million. The petition was signed
by Michael J. Morin, controller.
Tracy Hope Davis, the U.S. Trustee for Region 2, appointed three
creditors to serve on the Official Committee of Unsecured
Creditors.
First Niagara Bank, the cash collateral lender, is represented by
William F. Savino, Esq., at Damon Morey.
DETROIT, MI: Bankruptcy Will Trump State Law Challenge
------------------------------------------------------
Law360 reported that Detroit's unprecedented bankruptcy filing hit
a speed bump when a state judge ruled it violates Michigan
constitutional provisions protecting government pension benefits,
but experts say the Chapter 9 case will inevitably move forward
because federal bankruptcy laws have a supremacy clause that
trumps state rules protecting retirees.
According to the report, a day after Detroit emergency manager
Kevyn Orr received authorization from Gov. Rick Snyder to submit
the bankruptcy filing, Ingham County Circuit Judge Rosemarie E.
Aquilina ruled that it unlawfully threatened retirees' accrued
pension benefits. Judge Aquilina said Snyder is prohibited by the
Michigan Constitution from authorizing Orr to proceed in a manner
that threatens to diminish or impair accrued pension benefits, the
report related.
The Law360 also pointed out that as Detroit navigates its way
through a bankruptcy of unprecedented proportions, the city is
going to find itself facing challenges surrounding angry retirees
who want to keep their benefits, bondholders being asked for
massive concessions and its own ability to fix its financial
infrastructure.
The cash-strapped city's ability to maneuver its way out of
Chapter 9 bankruptcy -- a process that could take years, experts
say -- will lie in its responses to the major challenges it is
bound to face from creditors, the report noted.
With Detroit's historic bankruptcy filing, other financially
strapped cities, towns and counties across the country will be
watching closely to how the once vibrant city addresses its
pension obligations and bond debt, among other issues, before they
dive into Chapter 9, experts said, Law360 related.
If Detroit is able to take control of its staggering debt -- at
least $18 billion, according to the city's emergency financial
manager Kevyn Orr -- it will be a watershed moment for municipal
bankruptcies, the report said.
The financially embattled city on June 18 filed for bankruptcy
protection in the largest-ever Chapter 9 case for a city in U.S.
history, potentially gutting the pensions of municipal retirees
and costing bondholders nearly everything, Law360 further related.
Gov. Snyder said in a statement that he authorized emergency
financial manager Orr to seek federal bankruptcy protection for
the city of 700,000 residents earlier in the day.
"The simple fact is, Detroit is broke," Gov. Snyder said, the
report cited. "This is a difficult, painful step. . ."
The City of Detroit, Michigan, filed its Chapter 9 petition on
July 18, 2013, with the U.S. Bankruptcy Court for the Eastern
District of Michigan. The case is assigned Case No. 13-53846.
The Debtor is represented by David G. Heiman, Esq., and Heather
Lennox, Esq., at JONES DAY, in Cleveland, Ohio; Bruce Bennett,
Esq., at JONES DAY, in Los Angeles, California; and Jonathan S.
Green, Esq., and Stephen S. LaPlante, Esq., at MILLER CANFIELD
PADDOCK AND STONE PLC, in Detroit, Michigan.
DETROIT, MI: Residents Wary as City Faces Uncertain Future
----------------------------------------------------------
Steve Neavling, writing for Reuters, reported that some Detroit
residents voiced skepticism that the former U.S. manufacturing
powerhouse would emerge in better shape from its historic
bankruptcy filing designed to fix the city's financial crisis.
According to the report, hours after learning Detroit filed the
largest municipal bankruptcy in U.S. history, residents spoke of
the stark realities that come with living in a financially broken
city.
"It was like putting a thumb in a dam," Jodie Holmes, 55, told
Reuters, as he leaned against an abandoned restaurant marked with
graffiti, waiting for a bus to take him to his temporary job. "I
don't know if bankruptcy will help us or drop us to our knees," he
added.
The bankruptcy, if approved by a federal judge, would force
Detroit's thousands of creditors into negotiations with the city's
emergency manager, Kevyn Orr, to resolve an estimated $18.5
billion in debt that has crippled Michigan's largest city, the
report said.
Detroit was once synonymous with U.S. manufacturing prowess, the
report noted. Its automotive giants switched production to planes,
tanks and munitions during World War Two, earning the city the
nickname of the "Arsenal of Democracy."
The City of Detroit, Michigan, filed its Chapter 9 petition on
July 18, 2013, with the U.S. Bankruptcy Court for the Eastern
District of Michigan. The case is assigned Case No. 13-53846.
The Debtor is represented by David G. Heiman, Esq., and Heather
Lennox, Esq., at JONES DAY, in Cleveland, Ohio; Bruce Bennett,
Esq., at JONES DAY, in Los Angeles, California; and Jonathan S.
Green, Esq., and Stephen S. LaPlante, Esq., at MILLER CANFIELD
PADDOCK AND STONE PLC, in Detroit, Michigan.
DETROIT, MI: Judge Steven Rhodes Chosen to Handle Chapter 9 Case
----------------------------------------------------------------
Katy Stech, writing for The Wall Street Journal, reported that
Detroit's historic bankruptcy case has been assigned to Judge
Steven W. Rhodes?a man who's respected by colleagues and known for
his no-nonsense style in the courtroom.
According to the report, Judge Rhodes, who was poised to retire at
the end of the year, has been put in charge of the 686,000-
resident city's case after handling one of the state's rare cases
of Chapter 9, which is used by cities, counties and municipal
authorities.
Judge Rhodes, 64 years old, was tapped to handle the massive
Chapter 9 case by Judge Alice M. Batchelder, the chief judge of
the U.S. Court of Appeals for the Sixth Circuit, the report said.
In court papers, she said she chose Judge Rhodes after "having
reviewed the levels of experience and the respective caseloads of
the judges" within the Eastern District.
In a letter filed with the U.S. Bankruptcy Court in Detroit,
fellow Bankruptcy Judge Phillip Shefferly called his colleague
"one of the most accomplished bankruptcy judges in the country,"
the report cited.
Initial Hearing in Bankruptcy Case
Andrew Dunn, writing for Bloomberg News, reported that Detroit,
which filed the biggest U.S. municipal bankruptcy, asked a federal
judge to set an initial hearing in the case as soon as July 23 to
confirm that the city is entitled to routine protections from
creditors.
According to the report, under the protection of Chapter 9 of the
U.S. Bankruptcy Code, most lawsuits against a city are temporarily
barred so the municipality can reorganize its operations and debt
without distraction.
Detroit filed for bankruptcy after decades of decline left it too
poor to pay billions of dollars owed bondholders, retired cops and
current city workers, the report related. The city faces about
$18 billion of debt it must restructure.
The city asked U.S. Bankruptcy Judge Steven W. Rhodes to confirm
those and other rights routinely granted in bankruptcy, the report
said. The request comes after a state court judge ordered
Governor Rick Snyder to withdraw the bankruptcy petition, claiming
the case violates Michigan's constitution.
Circuit Court Judge Rosemarie E. Aquilina is overseeing cases
brought by current and retired city workers who asked for a
temporary restraining order to keep the city out of bankruptcy,
the report noted. Detroit's Chapter 9 petition was filed minutes
before the judge was able to rule.
About Detroit, Michigan
The city of Detroit, Michigan, weighed down by more than $18
billion in accrued obligations, sought municipal bankruptcy
protection on July 18, 2013, by filing a voluntary Chapter
9 petition (Bankr. E.D. Mich. Case No. 13-53846). Detroit listed
more than $1 billion in both assets and debts.
Kevyn Orr, who was appointed in March 2013 as Detroit's emergency
manager, signed the petition. Detroit is represented by
lawyers at Jones Day and Miller Canfield Paddock and Stone PLC.
Michigan Governor Rick Snyder authorized the bankruptcy filing.
The filing makes Detroit the largest American city to seek
bankruptcy, in terms of population and the size of the debts and
liabilities involved.
The Debtor is represented by David G. Heiman, Esq., and Heather
Lennox, Esq., at JONES DAY, in Cleveland, Ohio; Bruce Bennett,
Esq., at JONES DAY, in Los Angeles, California; and Jonathan S.
Green, Esq., and Stephen S. LaPlante, Esq., at MILLER CANFIELD
PADDOCK AND STONE PLC, in Detroit, Michigan.
DETROIT, MI: Bankruptcy Likely to Spark a Pension Brawl
-------------------------------------------------------
Michael Corkery and Matthew Dolan, writing for Bloomberg News,
reported that Detroit's historic bankruptcy filing will be a test
case for how far a major U.S. city can go in dealing with a
chronic problem facing many local and state governments:
unsustainable pension costs.
According to WSJ, emergency manager Kevyn Orr has said all city
workers, both current and retired, could see pensions cut to help
resize Detroit's finances.
It is a scary prospect not only for Detroit workers who have been
counting on these guaranteed benefits, but for workers in cities
across the U.S. who have assumed that their pensions were
untouchable, even in bankruptcy, the report said.
Almost every state in the U.S. has made cuts to its public-
employee pensions, seeking to dig out from the economic downturn,
the report noted. But many of these changes apply only to newly
hired workers, not to retirees.
States aren't allowed to file for bankruptcy protection, WSJ said.
But in a few cities -- including Central Falls, R.I., and
Prichard, Ala., that like Detroit have filed under Chapter 9 of
U.S. Bankruptcy Code -- bankruptcy has led to big cuts to retired
city workers.
About Detroit, Michigan
The city of Detroit, Michigan, weighed down by more than $18
billion in accrued obligations, sought municipal bankruptcy
protection on July 18, 2013, by filing a voluntary Chapter
9 petition (Bankr. E.D. Mich. Case No. 13-53846). Detroit listed
more than $1 billion in both assets and debts.
Kevyn Orr, who was appointed in March 2013 as Detroit's emergency
manager, signed the petition. Detroit is represented by
lawyers at Jones Day and Miller Canfield Paddock and Stone PLC.
Michigan Governor Rick Snyder authorized the bankruptcy filing.
The filing makes Detroit the largest American city to seek
bankruptcy, in terms of population and the size of the debts and
liabilities involved.
The Debtor is represented by David G. Heiman, Esq., and Heather
Lennox, Esq., at JONES DAY, in Cleveland, Ohio; Bruce Bennett,
Esq., at JONES DAY, in Los Angeles, California; and Jonathan S.
Green, Esq., and Stephen S. LaPlante, Esq., at MILLER CANFIELD
PADDOCK AND STONE PLC, in Detroit, Michigan.
DETROIT, MI: Urban Caucus Leader Calls for Government Support
-------------------------------------------------------------
The Office of Congressman Chaka Fattah on July 18 disclosed that
Congressman Fattah asked the President to act immediately to help
the City of Detroit.
Representative Chaka Fattah (D-PA), a leader of the Congressional
Urban Caucus, sent a letter to President Obama on July 18 calling
on the Administration to lend a helping hand to Detroit, Michigan
following the news that the city has filed for bankruptcy.
In the correspondence, Mr. Fattah requests the Administration
intercede to make certain that Detroit's future is secure and
hopeful. He asks the President to bring together members of his
cabinet and members of the White House Council on Strong Cities,
Strong Communities to work together to analyze Detroit's fiscal
situation and intervene on the city's behalf.
Mr. Fattah said in his letter, "I understand the important role
cities play in the economic vitality of metropolitan regions and
our nation as a whole. Our cities serve as economic engines
leading to innovations, job creation and growth. Moreover, cities
like Detroit are strategically aligned, within their respective
regions, to attract economic opportunities for their surrounding
areas. As such, we must do all we can to protect these cities and
work toward their prosperity."
Mr. Fattah stands ready to work with John Conyers and the rest of
the Michigan delegation on this important issue.
About Detroit, Michigan
The city of Detroit, Michigan, weighed down by more than $18
billion in accrued obligations, sought municipal bankruptcy
protection on July 18, 2013, by filing a voluntary Chapter
9 petition (Bankr. E.D. Mich. Case No. 13-53846). Detroit listed
more than $1 billion in both assets and debts.
Kevyn Orr, who was appointed in March 2013 as Detroit's emergency
manager, signed the petition. Detroit is represented by
lawyers at Jones Day and Miller Canfield Paddock and Stone PLC.
Michigan Governor Rick Snyder authorized the bankruptcy filing.
The filing makes Detroit the largest American city to seek
bankruptcy, in terms of population and the size of the debts and
liabilities involved.
The Debtor is represented by David G. Heiman, Esq., and Heather
Lennox, Esq., at JONES DAY, in Cleveland, Ohio; Bruce Bennett,
Esq., at JONES DAY, in Los Angeles, California; and Jonathan S.
Green, Esq., and Stephen S. LaPlante, Esq., at MILLER CANFIELD
PADDOCK AND STONE PLC, in Detroit, Michigan.
DETROIT, MI: Water, Sewer Bonds May Still Face Downgrade
--------------------------------------------------------
Reuters reported that Fitch Ratings said it is keeping Detroit's
water and sewerage revenue bonds on a watch list for potential
ratings downgrades amid ongoing uncertainty about the city's
unfolding restructuring process.
A proposal to creditors by the city's emergency manager last month
called for a potential debt exchange that could shortchange some
bondholders, although Fitch said there is no apparent legal basis
to compel such an exchange, the report related.
It added that the debt would have "substantial protection" now
that Detroit filed the biggest Chapter 9 municipal bankruptcy
ever, the report said.
"Fitch sees no apparent reason for bondholders to accept any
impairment given the very strong legal position of this debt in a
Chapter 9 bankruptcy proceeding," the ratings agency said in a
statement, the report further related.
It added that the BBB-plus and BBB ratings on $1.78 billion of
sewerage bonds and $1.66 billion of water bonds could fall to C or
D, denoting default, should bondholders be impaired, the report
said.
DEWEY & LEBOEUF: Liquidating Trustee Collects $100MM Since March
----------------------------------------------------------------
Maria Chutchian of BankruptcyLaw360 reported that the trustee
charged with winding down Dewey & LeBoeuf LLP's estate brought in
$99.6 million in settlements and recoveries since March and
resolved more than half of the claims brought by creditors to
date, according to a court filing.
Some of the cash Trustee Alan M. Jacobs collected between March 22
and June 30 includes $62.3 million in unfinished business and
initial partner contributions, $17.5 million in funding from the
estate's liquidation trust and $19 million in mismanagement claim
proceeds, according to a status report, the report related.
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.
Alan Jacobs of AMJ Advisors LLC, has been named Dewey's
liquidation trustee. Scott E. Ratner, Esq., Frank A. Oswald,
Esq., David A. Paul, Esq., Steven S. Flores, Esq., at Togut, Segal
& Segal LLP, serve as counsel to the Liquidation Trustee.
EASTMAN KODAK: US Not Sold on Environmental Cleanup Deal With NY
----------------------------------------------------------------
Maria Chutchian of BankruptcyLaw360 reported that Eastman Kodak
Co. is facing pushback from the U.S. over its deal with the New
York Department of Environmental Conservation that would protect
it against environmental liabilities related to the $8.5 million
industrial complex it is selling, according to court papers.
The report related that U.S. Attorney Preet Bharara said in a
court filing that the federal government would not comply with a
provision of the settlement that calls on the U.S. to pledge that
it will not sue over any potential liabilities related to the
1,200-acre park.
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.
At the end of April 2013, Kodak filed a proposed reorganization
plan offering 85 percent of the stock to holders of the remaining
$375 million in second-lien notes. The other 15 percent is for
unsecured creditors with $2.7 billion in claims and retirees who
have a $635 million claim from the loss of retirement benefits.
EASTMAN KODAK: Defends Move to Estimate Claims for Voting Purposes
------------------------------------------------------------------
Eastman Kodak Co. defended its motion to estimate the claims of
some creditors for purposes of voting on its proposed Chapter 11
reorganization plan.
The move came after STWB Inc. and Bayer Corp. objected to the
company's request to estimate each of their claims at $1 dollar.
The two creditors filed four claims against Kodak on account of
alleged environmental remediation at 25 different sites.
Together, the claimants assert more than $250.6 million.
Pauline Morgan, Esq., at Young Conaway Stargatt & Taylor LLP, in
New York, said Kodak does not owe any amounts to the claims for
most of the sites.
At the few sites where some obligation may exist, the potential
liability that may be assessed against Kodak is "wildly
overstated," according to Kodak's lawyer.
"It would be inappropriate to allow the claimants to vote four
redundant claims in such large amounts when there has been no
determination that the debtors are liable for these claims at
all," Ms. Morgan said.
Ms. Morgan also expressed concern that permitting both creditors
to vote in the full amount of their claims could distort the
results of voting by some unsecured creditors and make them
eligible for a "disproportionate number" of shares in the rights
offering.
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.
At the end of April 2013, Kodak filed a proposed reorganization
plan offering 85 percent of the stock to holders of the remaining
$375 million in second-lien notes. The other 15 percent is for
unsecured creditors with $2.7 billion in claims and retirees who
have a $635 million claim from the loss of retirement benefits.
EASTMAN KODAK: Challenges Trust Fund for Eastman Business Park
--------------------------------------------------------------
The U.S. Environmental Protection Agency is questioning a major
component of a settlement agreement made in June between Eastman
Kodak Co. and the State of New York to maintain the Eastman
Business Park.
In a July 16 filing, EPA said it is not confident the $49 million
trust fund that will be established under the agreement for
environmental remediation at the park will be enough to do the
job.
"There has not been sufficient characterization of the nature and
extent of contamination to provide a basis for confidence that the
$49 million allocated to EBP environmental response actions
through the EBP settlement agreement will be sufficient," EPA
said.
"It has been EPA's experience that sites of this size and
complexity, especially ones that include river sediment
contamination, can be very costly," the agency said in the court
filing.
As reported by TCR on June 21, Kodak and the State of New York
agreed on a partnership to drive several key initiatives at
Eastman Business Park to enhance regional economic development
opportunities at the site. As one major component, the State and
Kodak agreed to establish the $49 million trust fund for the park
to ensure continued environmental oversight while addressing
environmental obligations.
Eastman Business Park is a 1,200 acre technology center and
industrial complex located near Lake Ontario in Rochester, New
York. It is home to 6,000 employees working for Kodak and
approximately 40 tenants and property owners.
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.
At the end of April 2013, Kodak filed a proposed reorganization
plan offering 85 percent of the stock to holders of the remaining
$375 million in second-lien notes. The other 15 percent is for
unsecured creditors with $2.7 billion in claims and retirees who
have a $635 million claim from the loss of retirement benefits.
EASTMAN KODAK: Wins Court Approval to Estimate Claims
-----------------------------------------------------
Eastman Kodak Co. received the green light from U.S. Bankruptcy
Judge Allan Gropper to estimate certain claims filed against the
company for purposes of voting on its Chapter 11 reorganization
plan.
Pursuant to the July 19 order, Claim No. 6175 filed by STWB Inc.,
one of Kodak's largest creditors, is allowed in the amount of $125
million for voting purposes.
Meanwhile, Claim No. 5023 of Media Technologies Licensing LLC, and
Claim No. 4387 of Joseph Pinzone, the administrator of Vicenzo
Pinzone's estate, are allowed in the amount of $2.5 million and $1
million, respectively.
The bankruptcy judge also allowed each of the claims filed by
Papst Licensing GmbH & Co. KG and 15 other creditors in the amount
of $1 solely for purposes of voting. The claims are listed at
http://is.gd/IiKJvI
With respect to the $50 million unsecured claim asserted by a
group of ERISA plan participants led by Dale Toal, Judge Gropper
ordered its classification as Class 10 claim.
The $50 million claim, assigned as Claim No. 498, stemmed from the
purchase or sale of securities that is required to be subordinated
pursuant to section 510(b) of the Bankruptcy Code, according to
Kodak's lawyer, Pauline Morgan, Esq., at Young Conaway Stargatt &
Taylor LLP, in New York.
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.
At the end of April 2013, Kodak filed a proposed reorganization
plan offering 85 percent of the stock to holders of the remaining
$375 million in second-lien notes. The other 15 percent is for
unsecured creditors with $2.7 billion in claims and retirees who
have a $635 million claim from the loss of retirement benefits.
ECLIPSE AVIATION: Trustee May Recoup $653K From Prudential
----------------------------------------------------------
Bankruptcy Judge Mary F. Walrath ruled that $653,323 of the
$781,702 that Prudential Real Estate and Relocation Services,
Inc., and Prudential Relocation, Inc., received from the estates
of Eclipse Aviation Corporation and Eclipse IRB Sunport, LLC, a
wholly owned subsidiary of Eclipse Aviation, were preferential and
avoidable under section 547(b) of the Bankruptcy Code. Jeoffrey
L. Burtch, the chapter 7 trustee of the Debtors, sued Prudential.
Prudential provides relocation benefits to its clients' employees.
Beginning in 2001, Prudential began providing relocation benefits
to Eclipse's employees.
The case is, JEOFFREY L. BURTCH, CHAPTER 7 TRUSTEE, Plaintiff, v.
PRUDENTIAL REAL ESTATE AND RELOCATION SERVICES, INC., AND
PRUDENTIAL RELOCATION, INC., Defendants, Adv. Proc. No. 10-55543
(Bankr. D. Del.). A copy of the Court's July 17, 2013 Opinion is
available at http://is.gd/hnaBcWfrom Leagle.com.
About Eclipse Aviation
Albuquerque, New Mexico-based Eclipse Aviation Corporation --
http://www.eclipseaviation.com/-- manufactured six-passenger
planes powered by two Pratt & Whitney turbofan engines. The
Company and Eclipse IRB Sunport, LLC sought chapter 11
protection (Bankr. D. Del. Case No. 08-13031) on Nov. 25, 2008,
represented by lawyers at Allen & Overy LLP, and estimating
assets of less than $500 $500 million and debts of more than
$1 billion.
The Debtor sought to sell all of its assets pursuant to proposed
bid procedures. The Court approved the bid procedures, with
substantial modification, on Dec. 23, 2008. On Jan. 15, 2009,
Over and Out, Inc., and other customers, commenced an adversary
proceeding (Bankr. D. Del. Adv. Pro. No. 09-50029) asserting that
the Debtor breached its Aircraft Deposit Agreements, converted
their deposits, and breached its fiduciary duty. On Jan. 23,
2009, the Court entered an order authorizing the sale of
substantially all of the Debtor's assets to EclipseJet Aviation
International, Inc., finding it had presented the highest and best
offer. In conjunction with that sale, the Court directed that
$3.2 million of the sale proceeds be set held in escrow pending
resolution of the adversary proceeding. Despite approval, the
sale to EclipseJet was never consummated.
As a result, on Mar. 5, 2009, the case was converted to a chapter
7 liquidation proceeding and Jeoffrey L. Burtch was appointed
trustee. The Trustee renewed efforts to sell the Debtor's assets.
On Aug. 28, 2009, the Court authorized the Trustee to sell the
Debtor's assets to Eclipse Aerospace, Inc., for $20 million in
cash and a $20 million note. Once again, as a result of the
Customers' objection to the sale, the Court directed that $3.2
million of the sale proceeds be set aside pending resolution of
the adversary proceeding. The sale to Eclipse Aerospace, Inc.,
closed on Sept. 4, 2009.
Following the sale, the Debtors change their names to AE
Liquidation, Inc., for Eclipse Aviation Corporation) and EIRB
Liquidation, Inc., for Eclipse IRB Sunport, LLC).
EMERITO ESTRADA: Files Schedules of Assets and Liabilities
----------------------------------------------------------
Emerito Estrada Rivera Isuzu De P.R. Inc. filed with the U.S.
Bankruptcy Court for the District of Puerto Rico its schedules of
assets and liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $17,540,000
B. Personal Property $6,320,000
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $14,100,000
E. Creditors Holding
Unsecured Priority
Claims $1,586,023
F. Creditors Holding
Unsecured Non-priority
Claims $599,163
----------- -----------
TOTAL $23,860,000 $16,285,186
A copy of the schedules is available for free at
http://bankrupt.com/misc/EMERITO_ESTRADA_sal.pdf
About Emerito Estrada
Emerito Estrada Rivera Isuzu De PR Inc., a car dealer in Puerto
Rico, filed a bare-bones Chapter 11 petition (Bankr. D.P.R. Case
No. 13-04608) in Old San Juan, on June 4, 2013. Alexis Fuentes
Hernandez, Esq., at Fuentes Law Offices, serves as counsel. The
Debtor says its sole asset is a real property is worth $16.5
million. It has $8.68 million in liabilities, of which $8.1
million is secured.
ENDICOTT INTERCONNECT: Section 341(a) Meeting Set on Aug. 15
------------------------------------------------------------
A meeting of creditors in the bankruptcy case of Endicott
Interconnect Technologies Inc. will be held on Aug. 15, 2013, at
10:00 a.m. at First Meeting Utica. Creditors have until Jan. 6,
2014, to submit their proofs of claim. For governmental units,
the claims bar date will also be on January 6.
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.
About Endicott Interconnect
Endicott Interconnect Technologies Inc., filed a Chapter 11
petition (Bankr. N.D.N.Y. Case No. 13-bk-61156) in Utica, New
York, on July 10, 2013, to sell the business before cash runs out
by the end of September.
Based in Endicott, New York, and formed in 2002, EIT is the
successor to the microelectronics division of IBM Corp. The
products are used in aerospace, defense and medication
applications, among others.
The company sought Chapter 11 bankruptcy protection after
suffering $100 million in operating losses in the last four years.
In addition to $16 million in secured claims, trade suppliers are
owed $34 million. There is another $32 million owing for loans
made by shareholders. The company said the book value of property
is $36 million.
FRIENDSHIP DAIRIES: AgStar's Lift Stay Bid Set for Sept. Hearing
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas will
conduct hearings on Sept. 10 and 11, 2013, at 9:00 a.m. to
consider creditor AgStar Financial Services, FLCA's motions to
grant relief from stay, or alternatively, order conversion of the
case from Chapter 11 to Chapter 7; or dismissal of the case.
On June 21, 2013, AgStar Financial Service, FLCA, as loan servicer
and attorney in fact for McFinney Agri-Finance, filed documents
asking the Bankruptcy Court for relief from the automatic stay,
citing that the Debtor has no material equity in the Collateral
and the Collateral is not necessary for an effective
reorganization in this case because the Debtor cannot effectively
reorganize and for cause, including lack of adequate protection.
According to AgStar, as of June 19, 2013, the Debtor owed it
$19,350,176.67, secured by Collateral with a current gross value
of approximately $19,563,466.73. As such, based on the amounts
due to it as of June 19, 2013, the Debtor's equity cushion at best
is only $46,761.28 or less than 1% and is decreasing daily.
AgStar adds that alternatively, the case should be converted to
Chapter 7 or dismissed entirely, citing that there is no sound
business justification for the Debtor to continue operating in
light of the fact that the Debtor continues to accrue losses, has
made no viable effort to pay its creditors, and there is no
reasonable likelihood of reorganization.
Frienship Dairies objects to the motion, asserting that AgStar is
adequately protected for the continuation of the automatic stay
and that the equity cushion continues to be sufficient adequate
protection for both the Debtor's use of cash collateral and the
imposition of the automatic stay. Alternatively, the Debtor says,
in the event the Court determines that AgStar's equity cushion has
eroded, AgStar's interest in its Collateral may be protected by
periodic payments.
Counsel for the Debtor may be reached at:
J. Bennett White, Esq.
J. BENNETT WHITE, P.C.
1011 Pruitt Place
P.O. Box 6250
Tyler, TX 75711
Tel: (903) 597-4300
Fax: (903) 597-4330
E-mail: jbw@jbwlawfirm.com
Counsel for AgStar may be reached at:
John O'Brien, Esq.
Brian P. Gaffney, Esq.
SNELL & WILMER L.L.P.
1200 Seventeenth Street, Suite 1900
Denver, CO 80202
Tel: (303) 634-2000
Fax: (303) 634-2020
E-mail: jobrien@swlaw.com
bgaffney@bgaffney@swlaw.com
About Friendship Dairies
Friendship Dairies filed a Chapter 11 petition (Bankr. N.D. Tex.
Case No. 12-20405) in Amarillo, Texas, on Aug. 6, 2012. The
Debtor operates a dairy near Hereford, Deaf Smith County, Texas.
The dairy consists of 11,000 head of cattle, fixtures and
equipment. The Debtor also farms 5,000 acres of land for
production of various crops used in feeding for the cattle.
The Debtor owes McFinney Agri-Finance, LLC, $16 million secured
by the Debtor's property, which is appraised at more than
$24 million. The Debtor disclosed $44,421,851 in assets and
$45,554,951 in liabilities as of the Chapter 11 filing.
Bankruptcy Judge Robert L. Jones oversees the case. J. Bennett
White, P.C., serves as the Debtor's counsel. The petition was
signed by Patrick Van Adrichem, partner.
The U.S. Trustee appointed a six-member creditors committee in the
Debtor's case. The Committee tapped Levenfeld Pearlstein
as lead counsel, and Mullin, Hoard & Brown as local counsel.
FRIENDSHIP DAIRIES: Court to Hear Exclusivity Motion on July 25
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas has
continued to July 25, 2013, at 10:00 a.m. the hearing to consider
the motion of Friendship Dairies to extend its exclusive period to
solicit acceptances of its proposed Chapter 11 Plan.
As reported in the TCR on June 20, 2013, Friendship Dairies asks
the Bankruptcy Court to extend, for the third time, its exclusive
period to solicit acceptances for its proposed Chapter 11 Plan
until July 31, 2013.
The Court has rescheduled to June 20 the hearing to consider
adequacy of information in the Disclosure Statement.
According to the Debtor, presuming the Disclosure Statement is
approved, the earliest a confirmation hearing could be scheduled
would be July 2013.
About Friendship Dairies
Friendship Dairies filed a Chapter 11 petition (Bankr. N.D. Tex.
Case No. 12-20405) in Amarillo, Texas, on Aug. 6, 2012. The
Debtor operates a dairy near Hereford, Deaf Smith County, Texas.
The dairy consists of 11,000 head of cattle, fixtures and
equipment. The Debtor also farms 5,000 acres of land for
production of various crops used in feeding for the cattle.
The Debtor owes McFinney Agri-Finance, LLC, $16 million secured
by the Debtor's property, which is appraised at more than
$24 million. The Debtor disclosed $44,421,851 in assets and
$45,554,951 in liabilities as of the Chapter 11 filing.
Bankruptcy Judge Robert L. Jones oversees the case. J. Bennett
White, P.C., serves as the Debtor's counsel. The petition was
signed by Patrick Van Adrichem, partner.
The U.S. Trustee appointed a six-member creditors committee in the
Debtor's case. The Committee tapped Levenfeld Pearlstein
as lead counsel, and Mullin, Hoard & Brown as local counsel.
FRIENDSHIP DAIRIES: Court to Consider Plan Confirmation Sept. 10
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas early
this month approved the adequacy of the Third Amended Disclosure
Statement for Friendship Dairies' amended Chapter 11 plan filed
July 2, 2013.
The Court fixed Sept. 4, 2013, as the last day for filing written
acceptances or rejections of the plan.
The Court will consider confirmation of the Plan at a hearing on
Sept. 10, 2013, at 9:00 a.m. The last day for filing and serving
written objections to confirmation is on Sept. 4, 2013.
In summary, the Plan contemplates the payment of all
administrative claimants, secured creditors, and trade creditors
in full.
The Plan provides for payments to secured creditors on an
amortized basis corresponding to either: (a) agreements negotiated
between Friendship Dairies and the claimant or (b) terms and
conditions currently available in the financial marketplace for
loans of similar size, collateral type, and valuation ratios.
Administrative Claims, priority Claims, and unsecured Claims are
paid from cash flow as funds become available from Friendship
Dairies' operations. Provisions are made for the payment of
contingent Claims if, or when, any such Claims materialize.
Equity holders retain their current interests in Friendship
Dairies.
The Plan contemplates reducing the number of total livestock and
increasing the portion of the herd represented by milk cows.
Increasing the number of milk cows will produce a greater volume
of milk and increase the dairy's monthly revenue. Similarly,
reducing the overall number of livestock will reduce the feed cost
currently incurred by the Debtor. Increasing revenue and lowering
feed cost should increase overall average profit from operations
in comparison to the past few years, according to the Debtor.
The primary trade-off will be that instead of raising its own
replacement heifers from birth to maturity, Friendship Dairies
will be selling most of its calves immediately after birth and
then purchasing its replacement heifers during the seventh month
of pregnancy. Thus, Friendship Dairies will be exposed to an
element of risk in the market price for replacement heifers that
it currently avoids.
In its June 25, 2013 objection to the Debtor's Second Amended
Disclosure Statement, filed June 23, 2013, AgStar Financial
Services, FLCA, said that the Second Amended Disclosure Statement
is identical to the First Amended Disclosure Statement in that it
did not address any of AgStar's 37 concerns.
A copy of AgStar' objection is available at:
http://bankrupt.com/misc/friendshipdairies.doc458.pdf
About Friendship Dairies
Friendship Dairies filed a Chapter 11 petition (Bankr. N.D. Tex.
Case No. 12-20405) in Amarillo, Texas, on Aug. 6, 2012. The
Debtor operates a dairy near Hereford, Deaf Smith County, Texas.
The dairy consists of 11,000 head of cattle, fixtures and
equipment. The Debtor also farms 5,000 acres of land for
production of various crops used in feeding for the cattle.
The Debtor owes McFinney Agri-Finance, LLC, $16 million secured
by the Debtor's property, which is appraised at more than
$24 million. The Debtor disclosed $44,421,851 in assets and
$45,554,951 in liabilities as of the Chapter 11 filing.
Bankruptcy Judge Robert L. Jones oversees the case. J. Bennett
White, P.C., serves as the Debtor's counsel. The petition was
signed by Patrick Van Adrichem, partner.
The U.S. Trustee appointed a six-member creditors committee in the
Debtor's case. The Committee tapped Levenfeld Pearlstein
as lead counsel, and Mullin, Hoard & Brown as local counsel.
GIBSON GUITAR: Moody's Rates New $200MM 2nd Lien Notes 'B2'
-----------------------------------------------------------
Moody's Investors Service assigned a B2 rating to Gibson Guitar
Corp.'s proposed $200 million senior secured notes due 2018. The
company's B2 Corporate Family Rating and B2-PD Probability of
Default Rating were affirmed.
Proceeds from the proposed notes will be used to fully refinance
the company's current debt capital consisting of an $80 million
senior secured revolving credit facility expiring 2016, $80
million term loan due 2016, and $60 million of junior debt. In
conjunction with the proposed 2nd lien note offering, Gibson will
arrange for a new, unrated, $75 million ABL facility. The Ba3
ratings on the existing revolver and term loan were also affirmed
but will be withdrawn once the transaction closes. Gibson's junior
debt is not rated.
The B2 rating assigned to Gibson's proposed 2nd lien notes, the
same as the company's Corporate Family rating, considers that
despite the presence of an ABL facility (not rated) that will rank
senior to the notes, the notes will still account for a
significant majority of Gibson's pro forma debt capital. The ABL
will be secured on a first lien basis by inventory and accounts
receivable and on a second lien basis with respect to the
collateral securing the notes. The proposed notes will have a 1st
lien on property, plant and equipment, and intangibles other than
intellectual property and substantially all other assets and a
second lien position with respect to the collateral securing the
$75 million ABL revolving credit facility.
The affirmation of Gibson's B2 Corporate Family Rating considers
the liquidity improvements afforded by the refinancing which
extends the company's nearest debt maturity out by two years, to
2018. It also incorporates the expected positive impact on the
company's annual interest expenses as the refinancing replaces its
relatively high cost junior debt with lower cost secured notes.
Pro forma EBITA/interest is 3 times, slightly higher than the 2.7
times for the latest 12-month period ended March 31, 2013 pro
forma for the junior debt used to acquire TEAC.
New ratings assigned:
$200 million senior secured notes due July 2018, at B2 (LGD 3,
44%)
Ratings affirmed:
Corporate Family Rating, at B2
Probability of Default Rating at, B2-PD
Ratings affirmed and to be withdrawn upon transaction closing:
$80 million senior secured revolver expiring 2016, at Ba3 (LGD 2,
23%);
$80 million term loan due 2016, at Ba3 (LGD 2, 23%)
Rating Rationale:
Gibson's B2 Corporate Family Rating reflects the company's high
leverage. Pro Forma debt/EBITDA is about 5.5 times. Moody's
considers this leverage to be significant given Gibson's small
relative size in terms of revenue (less than $1 billion), highly
discretionary nature of its product line, and significant customer
concentration with Guitar Center Holdings, Inc. (Caa2 stable). The
rating is supported by Gibson's strong brand recognition,
prominent market share in guitars, and diversified product line
within guitars and related music areas.
The stable outlook reflects Moody's expectation that debt/EBITDA
will remain above 4.5 times in the foreseeable future as earnings
are expected to increase only modestly and the company has no
prepayable debt in its capital structure.
Ratings could be lowered if Gibson pursues further acquisitions
that cause debt/EBITDA to rise and remain at or above 6.0 times
and/or cause EBITA margins to decline below the current level of
about 5%. A higher rating would require lower leverage with a
target debt/EBITDA level of about 4.0 times, and an with an
improvement in EBITA margins with a targeted level of about 10%.
The principal methodologies used in this rating were Global
Consumer Durables published in October 2010. Other methodologies
used include Loss Given Default for Speculative-Grade Non-
Financial Companies in the U.S., Canada and EMEA published in June
2009.
Headquartered in Nashville, Tennessee, Gibson Guitar Corp.
manufactures and markets acoustic and electric guitars under the
Gibson and Epiphone brand names and pianos under the Baldwin brand
name. The company also sells other stringed instruments and
instrument-related accessories such as amplifiers, speakers, picks
and straps. Reported revenue for the twelve months ended March 31,
2013 was about $500 million.
GMX RESOURCES: Plan Filing Deadline Extended to Oct. 28
-------------------------------------------------------
Judge Sarah A. Hall of the U.S. Bankruptcy Court for the Western
District of Oklahoma extended the exclusive periods within which
GMX Resources Inc., et al., may propose and file a plan of
reorganization and solicit acceptances thereof until Oct. 28, 2013
and Dec. 30, 2013, respectively.
Judge Hall said nothing in her order will prejudice the Official
Committee of Unsecured Creditors' right to seek to limit or
terminate the Exclusive Periods for cause shown at any time, nor
will it prejudice the Debtors' right to seek a further extension
of the Exclusive Periods for cause shown.
William H. Hoch, Esq. -- will.hoch@crowedunlevy.com -- Regan S.
Beatty, Esq. -- regan.beatty@crowedunlevy.com -- Christopher M.
Staine, Esq. -- christopher.staine@crowedunlevy.com -- and Andre
B. Caldwell, Esq. -- andre.caldwell@crowedunlevy.com -- at CROWE &
DUNLEVY, P.C., in Oklahoma City, Oklahoma, serve as the Debtors'
special local counsel, conflicts counsel, and litigation counsel.
David A. Zdunkewicz, Esq. -- dzdunkewicz@andrewskurth.com --
Timothy A. Davidson II, Esq. -- taddavidson@andrewskurth.com --
and Joseph Rovira, Esq. -- josephrovira@andrewskurth.com -- at
ANDREWS KURTH LLP, in Houston, Texas, serve as attorneys for the
Debtors.
About GMX Resources
GMX Resources Inc. -- http://www.gmxresources.com/-- is an
independent natural gas production company headquartered in
Oklahoma City, Oklahoma. GMXR has 53 producing wells in Texas &
Louisiana, 24 proved developed non-producing reservoirs, 48 proved
undeveloped locations and several hundred other development
locations. GMXR has 9,000 net acres on the Sabine Uplift of East
Texas. GMXR has 7 producing wells in New Mexico. The Company's
strategy is to significantly increase production, revenues and
reinvest in increasing production. GMXR's goal is to grow and
build shareholder value every day.
The Company reported net losses of $206.44 million in 2011,
$138.29 million in 2010, and $181.08 million in 2009.
GMX Resources filed a Chapter 11 petition in its hometown (Bankr.
W.D. Okla. Case No. 13-11456) on April 1, 2013, so secured lenders
can buy the business in exchange for $324.3 million in first-lien
notes.
GMX missed a payment due in March 2013 on $51.5 million in second-
lien notes. Other principal liabilities include $48.3 million in
unsecured convertible senior notes.
The DIP financing provided by senior noteholders requires court
approval of a sale within 75 days following approval of sale
procedures. The lenders and principal senior noteholders include
Chatham Asset Management LLC, GSO Capital Partners, Omega Advisors
Inc. and Whitebox Advisors LLC.
The Official Committee of Unsecured Creditors tapped Winston &
Strawn LLP as its counsel.
GMX RESOURCES: Claims Bar Date Set at Sept. 16
----------------------------------------------
Judge Sarah A. Hall of the U.S. Bankruptcy Court for the Western
District of Oklahoma sets Monday, Sept. 16, 2013, at 5:00 p.m.,
Eastern Time, as the deadline for all persons or entities to file
proofs of claim or interest against the Debtors for any and all
claims against or interests in the Debtors arising prior to the
Petition Date.
Judge Hall also sets Friday, Nov. 15, 2013, at 5:00 p.m., Eastern
Time, as the deadline for filing of proofs of claim by
governmental units as defined in Section 101(27) of the Bankruptcy
Code for any and all claims against or interests in the Debtors
arising prior to the Petition Date.
All proofs of claim must be filed so as to be received on or
before the applicable Bar Date at the following address:
If by First-Class Mail:
GMX Resources Inc. Claims Processing Center
c/o Epiq Bankruptcy Solutions, LLC
FDR Station, P.O. Box 5269
New York, NY 10150-5269
If by Hand Delivery or Overnight Mail:
GMX Resources Inc. Claims Processing Center
c/o Epiq Bankruptcy Solutions, LLC
757 Third Avenue, 3rd Floor
New York, NY 10017
Toll Free U.S. #: (877) 854-0023
Non U.S. #: (503) 597-7711
William H. Hoch, Esq. -- will.hoch@crowedunlevy.com -- Regan S.
Beatty, Esq. -- regan.beatty@crowedunlevy.com -- Christopher M.
Staine, Esq. -- christopher.staine@crowedunlevy.com -- and Andre
B. Caldwell, Esq. -- at andre.caldwell@crowedunlevy.com -- at
CROWE & DUNLEVY, P.C., in Oklahoma City, Oklahoma, serve as the
Debtors' special local counsel, conflicts counsel, and litigation
counsel.
David A. Zdunkewicz, Esq. -- dzdunkewicz@andrewskurth.com --
Timothy A. Davidson II, Esq. -- taddavidson@andrewskurth.com --
and Joseph Rovira, Esq. -- josephrovira@andrewskurth.com -- at
ANDREWS KURTH LLP, serve as attorneys for the Debtors.
About GMX Resources
GMX Resources Inc. -- http://www.gmxresources.com/-- is an
independent natural gas production company headquartered in
Oklahoma City, Oklahoma. GMXR has 53 producing wells in Texas &
Louisiana, 24 proved developed non-producing reservoirs, 48 proved
undeveloped locations and several hundred other development
locations. GMXR has 9,000 net acres on the Sabine Uplift of East
Texas. GMXR has 7 producing wells in New Mexico. The Company's
strategy is to significantly increase production, revenues and
reinvest in increasing production. GMXR's goal is to grow and
build shareholder value every day.
The Company reported net losses of $206.44 million in 2011,
$138.29 million in 2010, and $181.08 million in 2009.
GMX Resources filed a Chapter 11 petition in its hometown (Bankr.
W.D. Okla. Case No. 13-11456) on April 1, 2013, so secured lenders
can buy the business in exchange for $324.3 million in first-lien
notes.
GMX missed a payment due in March 2013 on $51.5 million in second-
lien notes. Other principal liabilities include $48.3 million in
unsecured convertible senior notes.
The DIP financing provided by senior noteholders requires court
approval of a sale within 75 days following approval of sale
procedures. The lenders and principal senior noteholders include
Chatham Asset Management LLC, GSO Capital Partners, Omega Advisors
Inc. and Whitebox Advisors LLC.
The Official Committee of Unsecured Creditors tapped Winston &
Strawn LLP as its counsel.
GORDON PROPERTIES: Examiner Taps Leach Travell as Counsel
---------------------------------------------------------
Stephen E. Leach -- the court-appointed examiner in the Chapter 11
cases of Gordon Properties, LLC and Condominium Services, Inc. --
asks the U.S. Bankruptcy Court for the Eastern District of
Virginia for permission to employ Leach Travell Britt, PC, as his
counsel.
LTB will, among other things, assist the examiner in the conduct
of his duties as examiner.
To the best of the examiner's knowledge, LTB is a "disinterested
person" as the term is defined in Section 101(14) of the
Bankruptcy Code.
LTB and the examiner have agreed that LTB will be compensated at a
reduced rate from its customary hourly rates for bankruptcy work.
The reduced hourly rates for persons likely to perform work in
these cases are:
Stephen E. Leach -- sleach@ltblaw.com $400
All other bankruptcy partners $350
Senior Associates $300
Associates $250
Paralegals $100
About Gordon Properties
Alexandria, Va.-based Gordon Properties, LLC, owns 40 condominium
units in a high-rise apartment building with both residential and
commercial units and two commercial units adjacent to the high-
rise building. Gordon Properties' ownership of these condos
represents about a 20% interest in the Forty Six Hundred
Condominium project -- http://foa4600.org/-- in Alexandria.
Gordon Properties also owns one of the adjacent commercial units,
a restaurant. Gordon Properties sought Chapter 11 protection
(Bankr. E.D. Va. Case No. 09-18086) on Oct. 2, 2009, and is
represented by Donald F. King, Esq., at Odin, Feldman & Pittleman
PC in Fairfax, Va. Gordon Properties disclosed $11,149,458 in
assets and $1,546,344 in liabilities.
Condominium Services filed its chapter 11 petition (Bankr. E.D.
Va. 10-10581) on Jan. 26, 2010. It scheduled one creditor, the
condominium association, with a disputed claim of $436,802.00.
The association filed a proof of claim asserting a claim of
$453,533.12. A second proof of claim was filed by the Internal
Revenue Service for $1,955.45. According to its schedules, if
both claims are allowed, it has a net deficit of about $426,900.
CSI is wholly owned by Gordon Properties.
In February 2012, Judge Mayer denied the motion of the association
to substantively consolidate the chapter 11 bankruptcy cases of
Gordon Properties and Condominium Services, Inc., the condominium
management company.
Gordon Properties and CSI opposed the motion. The two cases were
previously administratively consolidated.
Stephen E. Leach is appointed as examiner in the Debtor's case.
HI-WAY EQUIPMENT: Disclosure Statement Hearing Set for Aug. 19
--------------------------------------------------------------
Hi-Way Equipment Company, LLC, Hi-Way Holdings LLC, and HWE Real
Estate LLC filed with the U.S. Bankruptcy Court for the Northern
District of Texas, Fort Worth Division, file a Chapter 11
liquidation plan and accompanying disclosure statement.
The Plan contemplates the resolution of certain claims through a
series of mechanisms. The Debtors have sold substantially all of
their assets. While the distribution of proceeds and credits from
the sale resulted in approximately $30,058,051 in debt reduction,
the proceeds from the sale were insufficient to provide a
distribution to holders of General Unsecured Claims (Class 5). In
exchange for approval of the release provided by each holder of
Allowed Class 5 Claim, secured creditor Comvest Investment
Partners III, LLC, will provide a contribution in the amount of
$100,000 to be shared ratably among holders of Allowed Class 5
Claims. The Debtors do not anticipate that a Distribution will be
made to holders of Class 5 Claims who do not consent to the
Comvest Release. Additionally, the Disbursing Agent will pursue
any causes of action that belong to the Debtors that may result in
additional recoveries; however, the Debtors do not believe that
there are any meaningful Causes of Action.
The Comvest Release is effective if and only if 66-2/3% in dollar
amount of all holders of Allowed Class 5 General Unsecured Claims
who vote on the Plan vote to accept the Comvest Release.
A full-text copy of the Disclosure Statement, dated July 9, 2013,
is available at http://bankrupt.com/misc/HIWAYEQUIPMENTds0709.pdf
The Court set a hearing on the Disclosure Statement for Aug. 19,
2013, at 9:30 a.m. (CDT), after refusing the Debtors' motion for
expedited hearings on the Disclosure Statement and Plan.
Holland N. O'Neil, Esq., and Virgil Ochoa, Esq., at GARDERE WYNNE
SEWELL LLP, in Dallas, Texas, represent the Debtors.
Hi-Way Equipment has been providing rental and sales of equipment
since 1948. In 2008, Hi-Way Equipment acquired Equipment Support
Services, Inc. As part of that acquisition, Hi-Way Equipment
expanded to become a dealer of Case and Case IH equipment through
CNH America LLC. With the acquisition of ESS, Hi-Way Equipment
acquired ESS' subsidiaries: CDI Equipment, Ltd., Carruth-Doggett
Industries Partners Acquisition, LLC, Future Equipment Holdings,
LLC, Future Equipment Partners, LLC, Equipment Support Services,
Inc., ESS Acquisition LLC, Carruth-Doggett Industries Holdings
Acquisition, LLC, and Southern Power Acquisition, Inc. In 2011,
Hi-Way Equipment merged with the Subsidiaries and Hi-Way Equipment
was the sole surviving entity. Hi-Way Equipment serves as the
non-exclusive dealer of Case and Case IH equipment in numerous
counties across Texas.
HOSTESS BRANDS: Flowers Foods Completes Acquisition of Assets
-------------------------------------------------------------
Flowers Foods on July 22 announced the completion of its
acquisition of bread assets, including 20 bakeries; the Wonder,
Merita, Home Pride, Butternut, and Nature's Pride brands; and 36
depots from Old HB, Inc. (formerly Hostess Brands). The adjusted
purchase price was $355 million.
The acquisition of the Hostess bread assets strengthens Flowers
Foods' position as the second-largest baker in the U.S. by adding
brands and bakeries that will enhance the company's ability to
steadily expand the geographic reach of its fresh breads, buns,
rolls, and snack cakes into new markets. Flowers has experience
integrating acquisitions, having completed more than 100 since
listing publicly in 1968, including 12 in the past decade.
"These assets fit very well with our strategy to grow our fresh
baked foods through market expansion and acquisitions," said
Allen L. Shiver, president and chief executive officer.
"Consumers across much of the country can expect to see these
well-known and loved bread brands returning to store shelves over
time."
Flowers' direct-store-delivery system reaches from Maine to
Florida and extends throughout the South, Southwest, and west to
California. Over the last decade, Flowers has more than doubled
the reach of its fresh bread brands -- from 38% of the U.S.
population in 2003 to 77% of the population today. "We will
continue our methodical market expansion, re-introducing the newly
acquired brands into markets we currently serve and into new
markets as we steadily expand into new regions of the country,"
Shiver explained.
Earlier this year, the company announced its bid to purchase the
assets for $360 million, and the bankruptcy court approved the
sale in March. On July 8, Flowers received regulatory approval
pursuant to the Hart-Scott-Rodino Act. The final acquisition
price was adjusted to $355 million as a result of a contemplated
purchase price adjustment related to the Butternut trademark.
Mr. Shiver said, "Our team has been keenly focused on serving the
needs of our customers and the marketplace, and we are seeing the
results of our efforts. First quarter sales were up 25.9%, driven
primarily by new business gained following Hostess' exit from the
market in November 2012 and by incremental sales from previous
acquisitions."
A document addressing frequently asked questions on the
acquisition has been posted on the Newsroom page of the Flowers
Foods Website -- http://www.flowersfoods.com
Flowers Foods will announce second quarter 2013 earnings on August
13, and management will host a conference call the same day.
Management is expected to discuss the company's outlook for second
half of 2013 during the call.
About Flowers Foods
Headquartered in Thomasville, Ga., Flowers Foods, Inc. --
http://www.flowersfoods.com-- is one of the largest producers of
packaged bakery foods for retail and foodservice customers in the
United States. Flowers currently operates 44 bakeries that
produce a wide range of bakery products. Among the company's top
brands are Nature's Own and Tastykake.
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 sold its businesses and most of the plants to five
different buyers for an aggregate of $860 million. Hostess still
has some plants, depots and other facilities the buyers didn't
acquire.
The bankruptcy estate has changed its name to Old HB Inc.
IGPS COMPANY: Defends $39-Mil. Sale Deal with PE Firms
------------------------------------------------------
Jamie Santo of BankruptcyLaw360 reported that a leaser of
trackable plastic pallets tried to convince a Delaware bankruptcy
judge that its planned $39 million sale to a consortium of private
equity firms and other investors is a fair deal, while critics
countered the plastic pallet company was squandering valuable
assets.
According to the report, at a sale hearing in Wilmington, Del.,
iGPS Co. argued that while roughly $750 million had been invested
in the company, $39 million was now all the market would bear.
The contention was opposed by the U.S. trustee and iGPS' founder
and former chief executive officer, arguing that the $36 million
auction floor is too low for a debtor they say could have more
than $500 million in assets.
U.S. Trustee Roberta A. DeAngelis and former iGPS CEO Bobby L.
Moore argue that when the value of all of the company's pallets is
factored, the debtor has assets of between $400 million and $590
million.
About iGPS Co.
iGPS Company LLC filed a Chapter 11 bankruptcy petition (Bankr. D.
Del. Case No. 13-11459) on June 4, 2013, to sell its assets to a
group led by Balmoral Funds LLC, absent higher and better offers.
iGPS Company -- http://www.igps.net-- is the first and only
plastic pallet pooling rental and leasing company in the U.S. It
offers plastic pallets with embedded radio frequency
identification (RFID) tags. Founded in 2006, the company is
headquartered in Orlando, Florida, and has a sales and innovation
center in Bentonville, Arkansas.
The Debtor estimated $100 million to $500 million in assets and
liabilities in its Chapter 11 petition.
According to the board resolution authorizing the bankruptcy,
Pegasus IGPS LLC owns 12.55% of the company; iGPS Co-Investment
LLC owns 18.75%; Kia VIII (iGPS Sub), LLC owns 30.74%; and KIA
VIII iGPS Blocker, LLC, owns 12.27%.
IN THE PLAY: Court Approves Morris James as Counsel
---------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Pennsylvania
authorized In The Play Inc. to employ Morris James, LLP as
counsel.
The hourly rates of the firm's personnel are:
Jeffrey R. Waxman, partner $480
Eric J. Monzo, associate $360
William W. Weller, paralegal $220
Jamie L. Dawson, paralegal $205
To the best of the Debtor's knowledge, Morris James is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
About In The Play
Three alleged creditors filed an involuntary Chapter 11 petition
for Lansdale, Pennsylvania-based In The Play, Inc., (Bankr. E.D.
Pa. Case No. 13-11666) in Philadelphia on Feb. 27, 2013. The
petitioners are Richard Strauss (with $479,443 in claims), JAAZ,
LLC ($409,166) and Andrew Michelin ($157,522). Garabed Kendikian,
Esq., at the Law Offices of Charles Kendikian, LLC, serves as
counsel to the petitioners.
On May 10, 2013, the Court entered an order for relief placing In
the Play under bankruptcy protection. The Debtor tapped Jeffrey
R. Waxman, Esq., at Morris James LLP as counsel. Gavin/Salmonese,
LLC's Edward T. Gavin serves as chief restructuring officer.
JACUZZI BRANDS: S&P Raises CCR to 'B-'; Outlook Stable
------------------------------------------------------
Standard & Poor's Ratings Services said it raised its corporate
credit rating on Chino, Calif.-based bath and spa manufacturer
Jacuzzi Brands Corp. to 'B-' from 'SD' (selective default). The
outlook was stable. S&P subsequently withdrew its rating at the
company's request because the rating is no longer required by the
new credit agreements.
The rating actions follows the successful exchange of about
$230 million of debt for new debt and equity. Before being
withdrawn, S&P's rating reflected its view of the company's
financial risk as "highly leveraged" and its business risk as
"vulnerable".
Jacuzzi is privately held and does not publicly file its financial
statements. The company is based in Chino, Calif. and
manufactures hot tubs, spas, whirlpool baths, showers, toilets and
sinks. It sells these products to commercial and residential
customers in North America, Europe, and South America.
JAG CONSTRUCTION: J&B Boat Rental Allowed $48K in Claims
--------------------------------------------------------
JAG Construction Services, Inc., won partial victory in its
challenge to J&B Boat Rental, LLC's proof of claim. Bankruptcy
Judge Robert Summerhays allowed J&B's claim in the amount of
$48,046.86 against JAG. In all other respects, J&B's claim is
disallowed.
JAG was a sub-contractor on the Morganza Gulf Hurricane Protection
Project and, in that role, contracted with various parties to
provide barges, tugboats, and other equipment and services to the
project. On May 1, 2011, JAG and J&B entered into an oral
agreement to provide tugboat services in connection with the
Morganza Project. It is undisputed that J&B provided a tugboat and
crew to JAG for approximately 13 days from May 12, 2011, through
July 28, 2011 pursuant to this agreement. However, the parties
dispute how J&B was to be compensated.
J&B filed a collection suit in the Eastern District of Louisiana
under the Miller Act, 40 U.S.C. Sec. 3133. This suit was stayed
when JAG filed for relief under Chapter 11. J&B filed a proof
claim and an amended claim asserting a claim for $66,300.00 for
the June 6, 2011 and August 3, 2011 invoices.
A copy of the Court's July 16, 2013 Memorandum Ruling is available
at http://is.gd/qVg7mPfrom Leagle.com.
JAG Construction Services, Inc., filed a Chapter 11 petition
(Bankr. W.D. La. Case No. 12-51014) on Aug. 13, 2012, listing
under $1 million in both assets and debts. A copy of the petition
is available at http://bankrupt.com/misc/lawb12-51014.pdf The
Debtor is represented by Adam G. Young, Esq. --
adam@adamyounglaw.com
JEMANYA CORP: Chapter 11 Case Reassigned to Elizabeth S. Stong
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of New York has
notified that the Chapter 11 case of, and any related adversary
proceeding in the involuntary case against, Jemanya Corp. has been
reassigned to the Hon. Elizabeth S. Stong effective June 14, 2013.
The case was previously assigned to Bankruptcy Judge Jerome
Feller.
About Jemanya Corp.
Augusto Hernandez, Charan Singh, Har Ji, Pablo Castro, Yali Omar
Perez, Alfredo Villatoro, Marvin Matute, Kerwin Santos filed for
an involuntary Chapter 11 protection for Brooklyn, New York-based
Jemanya Corp. (Bankr. E.D.N.Y. Case No. 11-48762) on Oct. 16,
2011. Bankruptcy Judge Jerome Feller presides over the case. The
petitioners were represented by Lawrence Morrison, Esq.
The Debtor is represented by Marc A. Samuel, Esq., as counsel.
JOURNAL REGISTER: Seeks Approval of Disclosure Statement
--------------------------------------------------------
Pulp Finish 1 Company, f/k/a Journal Register Company, and its
debtor affiliates ask the U.S. Bankruptcy Court for the Southern
District of New York to approve the disclosure statement
explaining the Joint Plan of Liquidation co-proposed by the
Official Committee of Unsecured Creditors. The Debtors also ask
the Court to approve solicitation procedures to govern the
confirmation of the Plan.
According to the Debtors' counsel, Neil E. Herman, Esq., at Morgan
Lewis & Bockius LLP, in New York, the Disclosure Statement should
be approved because it contains "adequate information" as defined
in Section 1125(a)(1) of the Bankruptcy Code, pointing out that,
among other things, it contains information of a kind and in
sufficient detail for a hypothetical holder of a claim in Class 6
(General Unsecured Claims), which is the only class of creditors
or interest holders entitled to vote on the Plan, to make an
informed judgment about the Plan.
The Plan Proponents estimate that each Holder of an Allowed
General Unsecured Claim will receive a Distribution under the Plan
of approximately 0 to 5% of its Allowed General Unsecured Claim.
A hearing on the motion will be on Aug. 27, 2013, at 10:00 a.m.
Eastern Time. Objections are due Aug. 20.
Neil E. Herman, Esq., and Patrick D. Fleming, Esq., at MORGAN
LEWIS & BOCKIUS LLP, in New York; and Michael R. Nestor, Esq.,
Kenneth J. Enos, Esq., and Andrew L. Magaziner, Esq., at YOUNG
CONAWAY STARGATT & TAYLOR, LLP, in New York, also represent the
Debtors.
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. 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.
Bloomberg News recounts that Journal Register, now named Pulp
Finish I Co., sold the newspaper business to lender and owner
Alden Global Capital Ltd., mostly in exchange for $114.15 million
in secured debt and $6 million cash. After debts with higher
priority are paid, what's left from the cash and a $630,000 tax
refund represents most of unsecured creditors' recovery. There
were no bids to compete with Alden's offer. It paid off financing
for the bankruptcy and assumed up to $22.8 million in liabilities,
thus taking care of most trade suppliers who otherwise would have
ended up as unsecured creditors. In addition, the lenders waived
their deficiency claims, so recoveries by unsecured creditors
won't be diluted.
K-V PHARMACEUTICAL: Sixth Amended Plan Filed
--------------------------------------------
BankruptcyData reported that K-V Pharmaceutical filed with the
U.S. Bankruptcy Court a Sixth Amended Joint Chapter 11 Plan of
Reorganization and related Disclosure Statement.
According to the Disclosure Statement, "The overall purpose of the
Plan is to provide for the restructuring of the Debtors'
liabilities in a manner designed to maximize recovery to
stakeholders and to enhance the financial viability of the
Reorganized Debtors. The Plan reflects an agreement and compromise
(the 'Global Settlement') among the Debtors, the Creditors'
Committee, the holders of at least 75% in dollar amount of the
Class 3 Senior Secured Notes Claims, and the holders of
approximately 97% in dollar amount of Class 6 Convertible
Subordinated Notes Claims. Under this agreement and compromise:
(a) each holder of an Allowed Senior Secured Notes Claim will
receive its pro rata share of a Cash distribution in the amount of
(i) $231,409,850 (i.e., the total amount of Senior Secured Notes
Claims for prepetition principal and interest owing under the
Senior Secured Notes less unamortized original issue discount);
plus (ii) the amount of any postpetition interest and accreted
original issue discount amount determined by the Bankruptcy Court
to be owed to the holders of Senior Secured Notes under the
subordination provisions of the Convertible Subordinated Notes
Indenture (which amounts, if any, shall be determined by the
Bankruptcy Court in connection with confirmation of the Plan); (b)
the Debtors' existing indebtedness under the DIP Credit Agreement
will be paid in full in Cash; (c) the Debtors' existing
indebtedness in respect of Convertible Subordinated Notes Claims
will be cancelled and exchanged for 7% of the New Common Stock of
Reorganized KV; and (d) each holder of an Allowed General
Unsecured Claim against any Debtor shall receive Cash in an amount
equal its Pro Rata Share of $10,250,000."
The Court Scheduled an August 28, 2013 hearing to confirm the
Plan.
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.
K-V PHARMACEUTICAL: Confirmation Hearing Set for Aug. 28
--------------------------------------------------------
Judge Allan L. Gropper of the U.S. Bankruptcy Court for the
Southern District of New York has approved K-V Pharmaceutical
Company and its debtor affiliates' disclosure statement explaining
their Sixth Amended Joint Chapter 11 Plan of Reorganization and
scheduled a hearing to consider confirmation of the Plan for
Aug. 28, 2013 at 11:00 a.m. (prevailing Eastern Time). Objections
to the confirmation of the Plan are due Aug. 19.
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.
KEHE DISTRIBUTORS: Moody's Rates $200MM Second Lien Notes 'B3'
--------------------------------------------------------------
Moody's Investors Service assigned a B2 Corporate Family Rating
and a B2-PD Probability of Default Rating to KeHE Distributors,
LLC. Concurrently, Moody's assigned a B3 rating to the company's
proposed $200 million second lien notes due 2021. The ratings
outlook is stable. The ratings are subject to completion of the
transaction and review of final documentation.
"Although KeHE has a good market position in a growing and
attractive market niche for specialty, organic and natural foods,
it is a relatively small player in the overall food distribution
business segment and could be vulnerable if larger broadline food
distributors enter its niche market," Mickey Chadha Senior Analyst
at Moody's said. "Moreover, being a distributor the company has
thin margins and the loss of a big customer could have a
significant negative impact on profitability and credit metrics,"
Chadha further stated.
The following ratings are assigned:
Corporate Family Rating at B2
Probability of Default Rating at B2-PD
$200 million second lien notes due 2021 at B3 (LGD4, 69%)
Ratings Rationale:
KeHE's B2 corporate family rating reflects the company's high
leverage -- Moody's estimates debt/EBITDA (with Moody's standard
adjustments) for the fiscal year ending April 2014 to be about 5.0
times. Improvement in credit metrics in the next 12-18 months is
expected to be modest and will be primarily dependent on EBITDA
growth as debt reduction is expected to be minimal. The rating
also reflects KeHE's customer concentration with two of its top
customers accounting for about 25% of total revenues, its thin
margins with a fixed cost structure and its limited pricing power
in a highly competitive market. Ratings are supported by the
company's good position in a growing and attractive market niche,
its geographic diversification and its adequate liquidity.
The stable rating outlook reflects Moody's expectation that KeHE
will reduce leverage through EBITDA growth while maintaining
adequate liquidity and balanced financial policies including but
not limited to acquisitions.
Ratings could be upgraded if the company demonstrates sustained
growth in sales, and profitability and has good liquidity.
Quantitatively, ratings could be upgraded if debt/EBITDA is
sustained below 4.5 times and EBITA/interest expense is sustained
above 2.25 times.
Ratings could be downgraded if operating performance deteriorates
such that debt/EBITDA is sustained above 5.5 times or
EBITA/interest is sustained below 1.5 times. Ratings could also be
downgraded if liquidity deteriorates or if acquisition activity
causes deterioration in cash flow or credit metrics.
KeHE Distributors, LLC'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) scale, (ii) business profile
including business risk and competitive position compared with
others within the industry; (iii) capital structure and financial
risk; (iv) projected performance over the near to intermediate
term; and (v) management's track record and tolerance for risk.
Moody's compared these attributes against other issuers both
within and outside KeHE Distributors, LLC's core industry and
believes KeHE Distributors, LLC'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.
KeHE Distributors, LLC is a majority employee owned specialty and
natural & organic food distributor in the U.S. and Canada. It
operates 12 distribution centers (2 owned and 10 leased) with nine
facilities in the United States and three in Canada. The company's
customers include large chain grocery stores, regional grocery
chain stores, independent natural product retailers, mass and
retail club stores and independent grocery stores. Total revenues
for fiscal year ended April 27, 2013 were $1.9 billion.
KIDSPEACE CORP: Files Schedules of Assets and Liabilities
---------------------------------------------------------
KidsPeace Corporation filed with the U.S. Bankruptcy Court for the
Eastern District of Pennsylvania its schedules of assets and
liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $29,850,000
B. Personal Property $128,080,467
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $166,634,372
E. Creditors Holding
Unsecured Priority
Claims $0
F. Creditors Holding
Unsecured Non-priority
Claims $2,133,834
----------- -----------
TOTAL $157,930,467 $168,768,207
A copy of the schedules is available for free at
http://bankrupt.com/misc/KIDSPEACE_CORP_sal.pdf
About KidsPeace Corp.
KidsPeace Corp., a provider of behavioral services for children,
filed a petition for Chapter 11 reorganization (Bankr. E.D. Pa.
Case No. 13-14508) on May 21, 2013, in Reading, Pennsylvania.
KidsPeace operates a 96-bed pediatric psychiatric hospital in
Orefield, Pennsylvania. Assets are $86.7 million, and debt on the
books is $158.6 million, according to a court filing.
The Debtor, which sought bankruptcy protection with eight
affiliates, tapped Norris McLaughlin & Marcus, P.A. as counsel;
EisnerAmper LLP as financial advisor, and Rust Omni as claims and
notice agent.
Assets total $158,587,999 at the end of 2012. The Debtors owe
approximately $56,206,821 in bond debt, and they have been told
that their pension liability is allegedly about $100,000,000 of
which the Debtors currently reflect $83,049,412 on their books.
KidsPeace sought Chapter 11 (i) as a means to implement a
negotiated restructuring of bond debt currently aggregating
approximately $51,310,000 plus accrued interest to a reduced
amount of approximately $24 million in new 30-year bonds with
interest at 7.5 percent, and (ii) to continue on-going
negotiations with the Pension Benefit Guaranty Corporation in
hopes of reducing the PBGC asserted obligation of $100+ million to
an amount that the Debtors can reasonably expect to satisfy.
Since March 2012, MK has been exploring possible affiliation or
acquisition opportunities; however, no offer of an affiliation or
acquisition has been presented to the Debtors.
Gemino Healthcare Finance, LLC, the prepetition revolving lender,
is represented by James S. Rankin, Jr., Esq., at Parker, Hudson,
Rainer & Dobbs LLP; and Weir & Partners LLP's Walter Weir, Jr.,
Esq.
UMB Bank, N.A., on behalf of bondholders, Performance Food Group
d/b/a AFI, W.B. Mason Co., Inc., Pension Benefit Guaranty
Corporation, and Teresa Laudenslager were appointed to an official
committee of unsecured creditors in the Debtors' cases.
LCI HOLDING: Patient Care Ombudsman Seeks Discharge From Duties
---------------------------------------------------------------
Suzanne Koenig, the patient care ombudsman in the Chapter 11 cases
of ICL Holding Company, Inc., formerly known as LCI Holding
Company, Inc., et al., asks the U.S. Bankruptcy Court for the
District of Delaware to be discharged from her duties as
ombudsman.
According to the ombudsman, the Debtors closed asset sales on
May 31, 2013. Accordingly, as of May 31, the Debtors no longer
owned any health care businesses. Given that the closings have
been consummated and the Debtors are no longer operating any
hospitals or other healthcare businesses, there is no further need
for the ombudsman after the filing of her final report.
An Aug. 1, 2013, hearing at 10 a.m. has been set.
Ms. Koenig is represented by Dennis A. Meloro, Esq., and Nancy A.
Peterman, Esq., at Greenberg Traurig, LLP, as counsel.
About LifeCare
LCI Holding Company, Inc., and its affiliates, doing business as
LifeCare Hospitals, operate eight "hospital within hospital"
facilities and 19 freestanding facilities in 10 states. The
hospitals have about 1,400 beds at facilities in Louisiana, Texas,
Pennsylvania, Ohio and Nevada. LifeCare is controlled by Carlyle
Group, which holds 93.4% of the stock following a
$570 million acquisition in August 2005.
LCI Holding Company, Inc., and its affiliates, including LifeCare
Holdings Inc., sought Chapter 11 protection (Bankr. D. Del. Lead
Case No. 12-13319) on Dec. 11, 2012, with plans to sell assets to
secured lenders.
Ken Ziman, Esq., and Felicia Perlman, Esq., at Skadden, Arps,
Slate Meagher & Flom LLP, serve as counsel to the Debtors.
Rothschild Inc. is the financial advisor. Huron Management
Services LLC will provide the Debtors an interim chief financial
officer and certain additional personnel; and (ii) designate
Stuart Walker as interim chief financial officer.
The steering committee of lenders is represented by attorneys at
Akin Gump Strauss Hauer & Feld LLP and Blank Rome LLP. The agent
under the prepetition and postpetition secured credit facility is
represented by Simpson Thacher & Barlett LLP.
The Debtors disclosed assets of $422 million and liabilities
totaling $575.9 million as of Sept. 30, 2012. As of the
bankruptcy filing, total long-term obligations were $482.2 million
consisting of, among other things, institutional loans and
unsecured subordinated loans. A total of $353.4 million is owing
under the prepetition secured credit facility. A total of
$128.4 million is owing on senior subordinated notes. LifeCare
Hospitals of Pittsburgh, LLC, a debtor-affiliate disclosed
$24,028,730 in assets and $484,372,539 in liabilities as of the
Chapter 11 filing.
The Official Committee of Unsecured Creditors is represented by
Pachulski Stang Ziehl & Jones LLP. FTI Consulting, Inc., serves
as its financial advisor.
LEHMAN BROTHERS: OFG Recovers $2.1 Mil. From Sale of Claim
----------------------------------------------------------
OFG Bancorp on July 22 reported results for the second quarter
ended June 30, 2013.
OFG disclosed that its second quarter results reflect the positive
impact of a $37.0 million reduction in tax provisions stemming
from the increase in deferred tax assets as a result of enactment
during the quarter of amendments to the Puerto Rico Income Tax
Code, and a $2.1 million recovery from the sale of a claim in the
Lehman Brothers bankruptcy.
The disclosure was made in OFG's earnings release for the second
quarter ended June 30, 2013, a copy of which is available for free
at http://is.gd/UoGLSm
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: Deal With Luxembourg Unit Over $13B Wins Nod
-------------------------------------------------------------
Maria Chutchian of BankruptcyLaw360 reported that a New York
bankruptcy judge signed off on two settlements between Lehman
Brothers Holdings Inc.'s brokerage and its Luxembourg affiliates
resolving a $13 billion intercompany dispute as well as a deal
that shaves $8.5 million off a Curacao-based affiliate's customer
claim.
U.S. Bankruptcy Judge James M. Peck's approval of the settlements
advances Lehman Brothers Inc. trustee James W. Giddens' goal of
"maximizing assets available for distribution to customers and
general creditors," according to Giddens' spokesman Jake Sargent,
the report related.
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 was set for 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.
LHC LLC: Court Declines to Appoint Trustee for Ice-Skating Rink
---------------------------------------------------------------
When the owner of a Chapter 11 debtor is also the chief customer
of that debtor, does the owner's dual role automatically
constitute "cause" for appointing a Chapter 11 trustee under 11
U.S.C. Sec. 1104(a)(1)? LHC LLC's largest secured creditor, Wells
Fargo Bank, N.A., urges the Bankruptcy Court in Wheaton, Ill., to
answer that question in the affirmative. Wells Fargo also insists
that even if the Court's answer is no, the owner should still be
replaced with a Chapter 11 trustee because the owner has allegedly
(1) proven itself incompetent to operate or reorganize the debtor,
(2) flouted the orders of this Court, and (3) forfeited the trust
and confidence of Wells Fargo.
Bankruptcy Judge Donald R. Cassling on July 16 rejected Wells
Fargo's primary argument both as a general legal proposition and
under the particular facts of this case. In addition, the Court
finds that Wells Fargo failed to establish by clear and convincing
evidence that there either is "cause" to appoint a Chapter 11
trustee under 11 U.S.C. Sec. 1104(a)(1) or that it is in the
interests of all creditors, equity security holders, and other
interests of the estate to appoint a trustee under Sec.
1104(a)(2).
A copy of the Court's July 16, 2013 Memorandum Opinion is
available at http://is.gd/WPrAhWfrom Leagle.com.
About LHC LLC
LHC, LLC, was formed as an Illinois limited liability company on
November 8, 2006. LHC LLC is a not-for-profit enterprise that
owns and operates a three-sheet ice-skating rink in West Dundee,
Illinois, known as the "Leafs Ice Centre". The Rink sells ice
time to various skating organizations in Illinois as well as to
the general public. The sole member of LHC LLC and largest
customer of the Rink is the Leafs Hockey Club, an amateur hockey
organization. Although LHC LLC is a taxable limited liability
company, its income is passed through to the Club. The Club does
not pay tax on the income received from LHC LLC because LHC LLC is
a non-profit company.
The facility was constructed in 2007 using proceeds from the sale
of sports facility revenue bonds by the Illinois Finance
Authority. LHC LLC owes $20 million to bondholders represented by
Wells Fargo, the indenture trustee for the bondholders. The Club
has guaranteed repayment of that debt.
LHC LLC filed for Chapter 11 petition (Bank. N.D. Ill. Case No.
13-07001) on Feb. 25, 2013. Peter A. Buh signed the petition as
president. The Debtor estimated assets and debts of at least
$10 million. Judge Donald R. Cassling presides over the case.
The Debtor is represented by Crane Heyman Simon Welch & Clar.
LIGHTSQUARED INC: Foresees Competing Plans for Reorganization
-------------------------------------------------------------
Tiffany Kary, writing for Bloomberg News, reported that Philip A.
Falcone's bankrupt LightSquared Inc., said it foresees competing
proposals to reorganize its assets and asked the court for a
deadline of Sept. 4 to take proposals.
According to the report, the broadband network services provider,
also facing a $2 billion cash offer for its assets from an entity
owned by Dish Network Corp. Chairman Charlie Ergen, lost the
exclusive right to control its reorganization July 15. It hasn't
been able to get creditor support for a reorganization timeline
and is proposing a streamlined process, it said today in court
papers.
LightSquared asked the U.S. Bankruptcy Court in New York for
permission to have outlines of all competing plans filed by Sept.
4, with a Dec. 16 confirmation hearing to approve the best offer,
the report said.
"As LightSquared continues to work towards a successful resolution
of its Chapter 11 cases, it anticipates the submission of multiple
competing plans of reorganization and potential litigation"
arising from them, company lawyers wrote, the report related.
The company has delayed a hearing on control of its assets without
disclosing specifics of a dispute with Ergen's entity, the report
further related.
Falcone's Harbinger Capital Partners LLC is "trying desperately"
to keep ownership of LightSquared in the face of debt-buying by
Ergen's SP Special Opportunities LLC fund, at the expense of
creditors, lenders have said, the report added. The Ergen fund
joined the lender group on June 13.
About LightSquared Inc.
LightSquared Inc. and 19 of its affiliates filed Chapter 11
bankruptcy petitions (Bankr. S.D.N.Y. Lead Case No. 12-12080) on
May 14, 2012, to resolve regulatory issues that have prevented it
from building its coast-to-coast integrated satellite 4G wireless
network.
LightSquared had invested more than $4 billion to deploy an
integrated satellite-terrestrial network. In February 2012,
however, the U.S. Federal Communications Commission told
LightSquared the agency would revoke a license to build out the
network as it would interfere with global positioning systems used
by the military and various industries. In March 2012, the
Company's partner, Sprint, canceled a master services agreement.
LightSquared's lenders deemed the termination of the Sprint
agreement would trigger cross-defaults under LightSquared's
prepetition credit agreements.
LightSquared and its prepetition lenders attempted to negotiate a
global restructuring that would provide LightSquared with
liquidity and runway necessary to resolve its issues with the FCC.
Despite working diligently and in good faith, however,
LightSquared and the lenders were not able to consummate a global
restructuring on terms acceptable to all interested parties.
Lawyers at Milbank, Tweed, Hadley & McCloy LLP serve as counsel to
the Debtors. Alvarez & Marsal North America, LLC, is the
financial advisor. Kurtzman Carson Consultants LLC serves as
claims and notice agent.
LIGHTSQUARED INC: Wins Court Approval to Hire Pillsbury as Counsel
------------------------------------------------------------------
LightSquared Inc. received the green light from U.S. Bankruptcy
Judge Shelley Chapman to hire Pillsbury Winthrop Shaw Pittman LLP
as its special counsel.
As special counsel, Pillsbury will provide legal services to the
company, which include negotiations with satellite operators in
connection with international frequency coordination;
participation in standards development; discussions with federal
government agencies concerning spectrum management; and regulatory
compliance for existing and proposed operations, including export
control.
About LightSquared Inc.
LightSquared Inc. and 19 of its affiliates filed Chapter 11
bankruptcy petitions (Bankr. S.D.N.Y. Lead Case No. 12-12080) on
May 14, 2012, to resolve regulatory issues that have prevented it
from building its coast-to-coast integrated satellite 4G wireless
network.
LightSquared had invested more than $4 billion to deploy an
integrated satellite-terrestrial network. In February 2012,
however, the U.S. Federal Communications Commission told
LightSquared the agency would revoke a license to build out the
network as it would interfere with global positioning systems used
by the military and various industries. In March 2012, the
Company's partner, Sprint, canceled a master services agreement.
LightSquared's lenders deemed the termination of the Sprint
agreement would trigger cross-defaults under LightSquared's
prepetition credit agreements.
LightSquared and its prepetition lenders attempted to negotiate a
global restructuring that would provide LightSquared with
liquidity and runway necessary to resolve its issues with the FCC.
Despite working diligently and in good faith, however,
LightSquared and the lenders were not able to consummate a global
restructuring on terms acceptable to all interested parties.
Lawyers at Milbank, Tweed, Hadley & McCloy LLP serve as counsel to
the Debtors. Alvarez & Marsal North America, LLC, is the
financial advisor. Kurtzman Carson Consultants LLC serves as
claims and notice agent.
LIONS GATE: S&P Retains 'B+' CCR Following Debt Upsize
------------------------------------------------------
Standard & Poor's Ratings Services said its ratings on Santa
Monica, Calif.-based independent film and television studio Lions
Gate Entertainment Corp. are unaffected by the upsizing of the
company's two senior secured second-lien debt issues to
$450 million, in aggregate, from $300 million, in aggregate. This
includes the 'B+' corporate credit rating as well as the 'B+'
issue-level ratings on the senior secured second-priority notes
due 2018 and senior secured second-lien term loan due 2020. The
recovery rating on this debt is '4', indicating S&P's expectation
for average (30% to 50%) recovery in a default. The company is
upsizing the 2018 notes to $225 million from $100 million and the
2020 term loan to $225 million from $200 million. The company
used the proceeds from the debt issuance, along with cash and
revolver borrowings, to fund the discharge of its 10.25% senior
secured second-priority notes due 2016. As a result of the
upsizing, S&P expects a lower revolver balance, pro forma for the
transaction, than it had originally anticipated. The outlook is
stable.
RATINGS LIST
Lions Gate Entertainment Corp.
Corporate Credit Rating B+/Stable/--
Ratings Unchanged
Lions Gate Entertainment Corp.
Senior Secured
$225M* second-lien notes due 2018 B+
Recovery Rating 4
$225M* second-lien term loan due 2020 B+
Recovery Rating 4
* Notes upsized from $100 million; Term loan upsized from $200
million.
MAHALO ENERGY: 10th Circ. Won't Let Directors Skirt Suit
--------------------------------------------------------
Jeff Sistrunk of BankruptcyLaw360 reported that the Tenth Circuit
ruled that Mahalo Energy Ltd.'s Canadian officers and directors
must face claims that they schemed to line their pockets by
saddling an Oklahoma-based subsidiary with debt, saying the
officials had enough ties to the now-bankrupt subsidiary to
justify Oklahoma jurisdiction.
According to the report, in a published decision, the three-judge
panel said an Oklahoma federal court had erred in granting a
motion by Mahalo's Canadian officers and directors to dismiss the
case for lack of jurisdiction.
The case is Newsome et al v. Gallacher et al, Case No. 4:11-cv-
00140 (N.D. Okla.), before Judge Gregory K. Frizzell.
About Mahalo Energy (USA) Inc.
Mahalo Energy (USA) Inc. has 300 producing wells in Oklahoma and
60,000 acres of gas-bearing shale formations. Tulsa, Oklahoma-
based Mahalo Energy filed for Chapter 11 on May 21, 2009 (Bankr.
E.D. Okla. Case No. 09-80795). The Debtor filed for Chapter 11
following a default in its secured debt, resulting from increasing
commodity prices and failure to meet targets to overall production
levels.
Stephen W. Elliott, Esq., at Kline, Kline, Elliot & Bryant, PC,
represents the Debtor in its restructuring efforts. The Debtor
listed $10 million to $50 million in assets and $100 million to
$500 million in debts.
MF GLOBAL: Trustee to Boost Distributions to Former Customers
-------------------------------------------------------------
Tiffany Kary, writing for Bloomberg News, reported that MF Global
Inc.'s former customers should get "significantly" increased
distributions in coming months, and the goal is still 100 percent
recoveries, the failed brokerage's trustee said.
According to the report, customers who traded on U.S. exchanges
may get distributions starting in early September that would bring
their percentage recoveries into "the high nineties" while
customers who traded on foreign exchanges may get "in the
sixties," trustee James Giddens said in a statement.
"These further distributions are dependent on final approval of a
motion by the trustee to confirm the allocation of property
already received," Giddens said, the report related. His
projections assume that agreements with MF Global's U.K. unit and
JPMorgan Chase & Co. (JPM) take effect in mid-August.
A prior projection in June estimated customers would get 94 cents
on their dollar, the report said. Giddens said at the time that
disputes including a lawsuit against directors and officers
delayed the potential for full recovery.
Most customers have already recovered 89 percent of what they were
owed, Giddens said in a report covering his progress from Dec. 5
to June 4, the report added. He said he eventually expects to
file a motion with the bankruptcy court in Manhattan that may
allow a final distribution of 100 cents on the dollar to all of MF
Global's commodities futures customers.
About MF Global
New York-based MF Global -- http://www.mfglobal.com/-- was one of
the world's leading brokers of commodities and listed derivatives.
MF Global provides access to more than 70 exchanges around the
world. The firm also was one of 22 primary dealers authorized to
trade U.S. government securities with the Federal Reserve Bank of
New York. MF Global's roots go back nearly 230 years to a sugar
brokerage on the banks of the Thames River in London.
On Oct. 31, 2011, MF Global Holdings Ltd. and MF Global Finance
USA Inc. filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y.
Case Nos. 11-15059 and 11-5058), after a planned sale to
Interactive Brokers Group collapsed. As of Sept. 30, 2011, MF
Global had $41,046,594,000 in total assets and $39,683,915,000 in
total liabilities.
On Nov. 7, 2011, the United States Trustee appointed the statutory
creditors' committee in the Debtors' cases. At the behest of the
Statutory Creditor's Committee, the Court directed the U.S.
Trustee to appoint a chapter 11 trustee. On Nov. 28, 2011, the
Bankruptcy Court entered an order approving the appointment of
Louis J. Freeh, Esq., of Freeh Group International Solutions, LLC,
as Chapter 11 trustee.
On Dec. 19, 2011, MF Global Capital LLC, MF Global Market Services
LLC and MF Global FX Clear LLC filed voluntary Chapter 11
petitions (Bankr. S.D.N.Y. Case Nos. 11-15808, 11-15809 and
11-15810). On Dec. 27, the Court entered an order installing Mr.
Freeh as Chapter 11 Trustee of the New Debtors.
On March 2, 2012, MF Global Holdings USA Inc. filed a voluntary
Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-10863), and Mr.
Freeh also was installed as its Chapter 11 Trustee.
Judge Honorable Martin Glenn presides over the Chapter 11 case.
J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric
Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve
as bankruptcy counsel. The Garden City Group, Inc., serves as
claims and noticing agent. The petition was signed by Bradley I.
Abelow, Executive Vice President and Chief Executive Officer of MF
Global Finance USA Inc.
The Chapter 11 Trustee has tapped (i) Freeh Sporkin & Sullivan
LLP, as investigative counsel; (ii) FTI Consulting Inc., as
restructuring advisors; (iii) Morrison & Foerster LLP, as
bankruptcy counsel; and (iv) Pepper Hamilton as special counsel.
The Official Committee of Unsecured Creditors has retained
Capstone Advisory Group LLC as financial advisor, while lawyers at
Proskauer Rose LLP serve as counsel.
The Securities Investor Protection Corporation commenced
liquidation proceedings against MF Global Inc. to protect
customers. James W. Giddens was appointed as trustee pursuant to
the Securities Investor Protection Act. He is a partner at Hughes
Hubbard & Reed LLP in New York.
Jon Corzine, the former New Jersey governor and co-CEO of
Goldman Sachs Group Inc., stepped down as chairman and chief
executive officer of MF Global just days after the bankruptcy
filing.
In April 2013, the Bankruptcy Court approved MF Global Holdings'
plan to liquidate its assets. Bloomberg News reported that the
court-approved disclosure statement initially told
creditors with $1.134 billion in unsecured claims against the
parent holding company why they could expect a recovery of 13.4%
to 39.1% from the plan. As a consequence of a settlement with
JPMorgan, supplemental materials informed unsecured creditors
their recovery was reduced to the range of 11.4% to 34.4%. Bank
lenders will have the same recovery on their $1.174 billion claim
against the holding company. As a consequence of the settlement,
the predicted recovery became 18% to 41.5% 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. Previously, the predicted recovery was 14.7% to 34% on
bank lenders' claims against the finance subsidiary.
MULTIPLAN INC: Moody's Keeps B2 Corp Family Rating, Outlook Stable
------------------------------------------------------------------
Moody's Investors Service affirmed the B2 Corporate Family Rating
and B2-PD Probability of Default Rating of MultiPlan, Inc. At the
same time, Moody's assigned a Caa1 rating to the proposed $750
million senior PIK toggle notes ("HoldCo notes") which will be
issued by MPH Intermediate Holding Company 2, MultiPlan's indirect
parent holding company. Moody's also upgraded the ratings on the
existing senior secured credit facilities to Ba2 from Ba3 and the
existing rating on the 9.875% senior notes due 2018 to B3 from
Caa1 in accordance with Moody's Loss Given Default methodology.
Proceeds from the HoldCo notes, incremental term loan borrowings
of $100 million, and balance sheet cash, will be used to fund a
one-time dividend distribution to shareholders of approximately
$838 million and pay transaction fees and expenses. The rating
outlook is stable.
The Caa1 assigned to the Senior PIK Toggle Notes issued by MPH
Intermediate Holding Company 2 considers its structural
subordination to all liabilities at MultiPlan, Inc., including a
$75 million revolver, $1,130 million term loan B-1 (to be upsized
from $1,030 million as part of the dividend recapitalization), and
$675 million 9.875% senior notes. The Senior PIK Toggle Notes will
be a senior unsecured obligation of MPH Intermediate Holding
Company 2, and will not be guaranteed by MultiPlan, Inc. or any of
its subsidiaries. The company will be required to pay interest in
cash so long as there is restricted payment capacity available
under the credit agreement. If not, the company will have the
option to pay interest in kind (PIK) at a rate of 0.75% higher
than the cash interest rate.
The affirmation of MultiPlan's B2 Corporate Family Rating and
stable rating outlook reflects Moody's view that despite the
increase in financial leverage that will occur as a result of the
recapitalization -- pro forma debt/EBITDA of roughly 6.3 times
compared to 4.3 times for the twelve month period ended March 31,
2013 -- Moody's expects debt repayment and continued earnings
growth over the next several quarters to result in steady
improvement over the next 12 to 18 months. However, at these
levels, there is no cushion within the B2 rating category for
additional debt-financed acquisitions or shareholder initiatives,
and the rating reflects Moody's expectation that the company will
reduce financial leverage to the mid-5x range by the end of 2013.
Rating assigned:
MPH Intermediate Holding Company 2:
$750 million Senior PIK Toggle Notes due 2018 at Caa1 (LGD 5, 88%)
Ratings affirmed:
MultiPlan, Inc.
Corporate Family Rating at B2
Probability of Default Rating at B2-PD
Ratings upgraded:
$75 million senior secured revolving credit facility due 2017, to
Ba2 (LGD 2, 19%) from Ba3 (LGD 2, 29%)
$1,130 million (to be upsized from $1,030 million) senior secured
B-1 term loan due 2017, to Ba2 (LGD 2, 19%) from Ba3 (LGD 2, 29%)
$675 million 9.875% senior notes due 2018, to B3 (LGD 4, 61%) from
Caa1 (LGD 5, 84%)
The outlook is stable.
The ratings are subject to review of final documentation. Upon
completion of the transaction, the Corporate Family and
Probability of Default ratings will be moved to MPH Intermediate
Holding Company 2 from MultiPlan, Inc.
Ratings Rationale:
MultiPlan's B2 Corporate Family Rating reflects the company's
small absolute size based on revenue, high financial leverage, and
aggressive financial policy and shareholder-oriented strategy,
evidenced by the recent decision to pay an $838 million debt-
financed special dividend. The ratings are further constrained by
the company's high customer concentration and lack of organic
growth within the company's Primary PPO Network segment. However,
MultiPlan's ratings are supported by the company's leading scale
and market position in the PPO industry, solid and improving
operating margins, and stable free cash flow generation. In
addition, Moody's favorably views the PPO industry's high barriers
to entry, solid organic growth within MultiPlan's Complementary
PPO Network business, and the company's solid track record of debt
reduction.
The stable rating outlook reflects Moody's expectation that
financial leverage and free cash flow to debt will steadily
improve due to debt repayment and continued earnings growth over
the next several quarters. That said, the stable outlook also
reflects constraints related to the company's small absolute size,
high customer concentration and aggressive financial policies.
An upgrade is unlikely over the near-term due to the company's
high financial leverage, small size, high customer concentration,
and aggressive financial policies. However, the ratings could be
upgraded if adjusted financial leverage declines to below 4.5
times, and Moody's gains confidence that the company's financial
policies are consistent with maintaining leverage below this
level.
A downgrade could occur if Moody's comes to believe that the
company is unlikely to reduce leverage to below 6.0 times by the
end of 2013 on a Moody's adjusted basis, or if the company engages
in any additional debt financed shareholder initiatives. In
addition, the ratings could be lowered if the company's
availability under external liquidity sources deteriorates.
The principal methodology used in this rating was the Global
Business & Consumer Service Industry Rating Methodology published
in October 2010. Other methodologies used include Loss Given
Default for Speculative-Grade Non-Financial Companies in the U.S.,
Canada and EMEA published in June 2009.
Based in New York, New York, MultiPlan, Inc. operates principally
in the health care benefits field as an independent Preferred
Provider Organization (PPO) in the U.S. The company provides
health care cost management services via contract arrangements
between health insurance companies, national and regional health
plans, third party administrators, self-insured employers, Taft-
Hartley sponsored plans and federal and state government agencies.
MultiPlan directly negotiates contracts with healthcare providers
(such as hospitals and practitioners) to achieve significant
discounts compared to the providers' fee-for-service rates. The
company's revenues are generated from discounts provided for
payors that access the company's provider network. The company,
privately-held by BC Partners and Silver Lake, generated revenues
of approximately $648 million for the twelve months ended March
31, 2013.
MULTIPLAN INC: S&P Affirms 'B' Corp. Credit Rating; Outlook Stable
------------------------------------------------------------------
Standard & Poor's Rating Services said it affirmed its 'B'
corporate credit rating on New York City-based MultiPlan Inc. The
outlook is stable.
"At the same time, we assigned our 'CCC+' issue-level rating to
the $750 million senior unsecured PIK toggle notes due 2018.
These notes will be issued out of an intermediate holding company
called MPH Intermediate Holding Co. 2 and they are structurally
subordinated to the debt issues of MultiPlan Inc., the primary
operating entity within the organization. The recovery rating on
these notes is '6', indicating our expectation for a negligible
(0%-10%) recovery for lenders in the event of a payment default,"
S&P said.
In conjunction with the transaction, S&P also raised its issue-
level ratings on MultiPlan's senior secured facilities to 'B+'
from 'B' and revised its recovery ratings on these debt issues to
'2' from '3'. The senior secured credit facilities consist of
MultiPlan's $75 million revolver due 2015, the existing
$1.03 billion term loan due 2017, and the new $100 million
fungible add-on incremental term loan due 2017.
At the same time, S&P also affirmed its issue-level rating of
'CCC+' on MultiPlan's existing $675 million 9.875% senior
unsecured notes due 2018. The recovery rating on these notes is
'6'.
"We based our ratings on MultiPlan Inc. on our assessment of its
business risk profile as "fair", reflecting a stable but
relatively narrow competitive position in the niche preferred
provider organization (PPO) market. Our assessment of its
financial risk profile as "highly leveraged" reflects the
company's high debt leverage and weak funds from operations (FFO)
to debt and EBITDA interest coverage," said credit analyst James
Sung. "The rating incorporates the potential for further
releveraging prospectively, given the company's private equity
ownership structure, the risks associated with the company's
ongoing acquisition strategy, and remaining healthcare reform
uncertainty. Health care reform, particularly in its insurance
coverage expansion aspects, could open up potential business
opportunities for MultiPlan. But it also has the potential to
disrupt the fee-for-service provider payment model, on which
MultiPlan's business model is based. We view this risk as
relatively long term in nature and unlikely to occur abruptly."
"Our stable rating outlook reflects our expectation that
MultiPlan's steady earnings, supported by very healthy EBITDA
margins, should support the company's deleveraging plan over the
next several years. In our base case scenario, we expect
MultiPlan to generate mid-single-digit revenue growth for both
2013 and 2014 with EBITDA margins remaining strong and consistent
with historical levels. We expect debt leverage to decrease to
close to 6x by year-end 2013 and closer to 5.5x by year-end 2014.
At the same time, EBITDA interest coverage will remain weak at 2x-
3x and FFO to debt will remain below 10%," S&P added.
S&P could consider lowering the rating if leverage increases to
6.5x-7.0x or more. A downside scenario could include some or all
of the following: negative revenue growth (caused by the loss or
reduction in business of one or two key accounts); significant
margin contraction; another substantial dividend recapitalization;
and merger and acquisition activity.
Rating upside over the next 12 months is limited. But S&P would
consider a rating upgrade beyond 12 months if the company is able
to generate stronger and more diversified revenue growth, while
generating strong EBITDA margins, and maintaining a less
aggressive financial policy (such as leverage of below 5x of a
sustained basis).
NATIONAL ENVELOPE: $68MM DIP Loan, Lender Deal Get OK
-----------------------------------------------------
Matt Chiappardi of BankruptcyLaw360 reported that a Delaware
bankruptcy judge gave the nod to both a global settlement between
private equity-owned NE Opco Inc., which does business as National
Envelope, and some of its lenders, as well as the $67.5 million
debtor-in-possession loan for which the agreement paves the way.
According to the report, U.S. Bankruptcy Judge Christopher S.
Sontchi said he was satisfied the evidence pointed to a greater
likelihood than not that the settlement terms will allow certain
administrative claims to be paid in full.
About National Envelope
National Envelope is the largest privately-help manufacturer of
envelopes in North America. Headquartered in Frisco, Texas,
National Envelope has eight plants and 15 percent of the envelope
market. Revenue of $427 million in 2012 resulted in a $60.1
million net loss, continuing an unbroken string of losses since
2007.
NE OPCO, Inc., doing business as National Envelope, along with
affiliate NEV Credit Holdings, Inc., filed petitions seeking
relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Del.
Lead Case No. 13-11483) on June 10, 2013.
The company disclosed liabilities including $148.4 million in
secured debt, with $37.5 million owing on a revolving credit and
$15.6 million on a secured term loan. There is a $55.7 million
second-lien debt 82 percent held by a Gores Group LLC affiliate.
National Envelope, then known as NEC Holdings Corp., first sought
Chapter 11 protection (Bankr. D. Del. Lead Case No. 10-11890) on
June 10, 2010. The business was bought by Gores Group LLC for
$208 million in a bankruptcy sale.
National Envelope, through NE OPCO, has returned to bankruptcy to
pursue a plan of reorganization or sell the assets as a going
concern via 11 U.S.C. Sec. 363. The Debtor plans to facilitate a
sale of the business with publicly traded competitor Cenveo Inc.
In the new Chapter 11 case, the company has tapped the law firm
Richards, Layton & Finger as counsel, PricewaterhouseCoopers LLP
as financial adviser, and Epiq Bankruptcy Solutions as claims and
notice agent.
The Gores Group is represented by Weil, Gotshal and Manges LLP and
Lowenstein Landler LLP. Salus Capital Partners, the DIP agent, is
represented by Choate, Hall & Stewart LLP and Morris Nichols Arsht
& Tunnell LLP. Wells Fargo Capital Finance, LLC, the prepetition
senior agent, is represented by Goldberg Kohn Ltd and DLA Piper.
NEW ENGLAND COMPOUNDING: Victims Seek to Sue Others for Outbreak
----------------------------------------------------------------
Erica Teichert of BankruptcyLaw360 reported that a committee
representing the victims of a nationwide meningitis outbreak
trailed back to the New England Compounding Center asked a
Massachusetts bankruptcy court to declare the company insolvent
and pave the way for new liability and wrongful death suits
against third parties connected to the outbreak.
According to the report, under many states' laws, NECC must be
declared insolvent before victims can begin pursuing health care
providers and others who distributed the tainted NECC products in
individual suits or a currently pending multidistrict litigation.
New England Compounding Pharmacy Inc., filed a Chapter 11 petition
(Bankr. D. Mass. Case No. 12-19882) in Boston on Dec. 21, 2012,
after a meningitis outbreak linked to an injectable steroid,
methylprednisolone acetate ("MPA"), manufactured by NECC, killed
39 people and sickened 656 in 19 states, though no illnesses have
been reported in Massachusetts. The Debtor owns and operates the
New England Compounding Center is located in Framingham, Mass. In
October 2012, the company recalled all its products, not just
those associated with the outbreak.
NEW YORK DOUBLE: Voluntary Chapter 11 Case Summary
--------------------------------------------------
Debtor: New York Double Inc.
1759 East 10th Street
Brooklyn, NY 11230
Bankruptcy Case No.: 13-44343
Chapter 11 Petition Date: July 16, 2013
Court: U.S. Bankruptcy Court
Eastern District of New York (Brooklyn)
Judge: Elizabeth S. Stong
Debtor's Counsel: David Carlebach, Esq.
LAW OFFICES OF DAVID CARLEBACH, ESQ.
40 Exchange Place, Suite 1306
New York, NY 10005
Tel: (212) 785-3041
Fax: (646) 355-1916
E-mail: david@carlebachlaw.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $10,000,001 to $50,000,000
The Company did not file a list of creditors together with its
petition.
The petition was signed by Yahuda Nelkenbaum, president.
Affiliates that filed separate Chapter 11 petition:
Entity Case No. Petition Date
------ -------- -------------
East Fourteen Gardens Inc. 09-47792 09/09/09
New York Spot, Inc. 12-48530 12/18/12
NMP-GROUP: Section 341(a) Meeting Scheduled for August 9
--------------------------------------------------------
A meeting of creditors in the bankruptcy case of NMP-Group LLC
will be held on Aug. 9, 2013, at 3:00 p.m. at 80 Broad St., 4th
Floor, USTM.
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.
NMP-Group LLC, the owner of 21 East 33rd Street in Manhattan,
filed a petition for Chapter 11 protection (Bankr. S.D.N.Y. Case
No. 13-bk-12269) on July 10 in New York to prevent a
foreclosure sale.
NORTHLAND RESOURCES: CFO Eva Kaijser to Step Down by Year-End
-------------------------------------------------------------
Northland Resources S.A. on July 18 disclosed that CFO Eva Kaijser
is leaving the Company at year-end 2013.
As a consequence of the closure of its Stockholm office, Northland
will recruit a new CFO located in Lulea. Eva Kaijser will
continue as CFO until the end of 2013/beginning of 2014.
"We regret that Eva has chosen to leave, but we are grateful for
both the contributions she has made to the Company and for those
she will continue to make during the time she remains working with
us. It is beneficial to Northland that we without urgency are
able to recruit a replacement," says Acting CEO Peter Pernlof.
About Northland
Headquartered in Luxembourg, Northland Resources S.A. is a
producer of iron ore concentrate, with a portfolio of production,
development and exploration mines and projects in northern Sweden
and Finland. The first construction phase of the Kaunisvaara
project is complete and production ramp-up started in November
2012. The Company expects to produce high-grade, high-quality
magnetite iron concentrate in Kaunisvaara, Sweden, where the
Company expects to exploit two magnetite iron ore deposits,
Tapuli and Sahavaara. Northland has entered into off-take
contracts with three partners for the entire production from the
Kaunisvaara project over the next seven to ten years. The
Company is also preparing a Definitive Feasibility Study for its
Hannukainen Iron Oxide Copper Gold project in Kolari, northern
Finland and for the Pellivuoma deposit, which is located 15 km
from the Kaunisvaara processing plant.
As reported by the Troubled Company Reporter on July 15, 2013,
Peter Pernlof, Acting CEO and COO of Northland Resources S.A.,
disclosed that the Lulea District Court approved on July 12 the
reorganization plan for the Company's Swedish subsidiaries.
As previously disclosed, the Lulea District Court held
composition proceedings on July 12 in connection with the
reorganization of companies Northland Resources AB (publ),
Northland Sweden AB and Northland Logistics AB. During the
proceedings the companies' creditors approved the terms of the
proposed composition. The District Court held in accordance with
this and approved the reorganization plan and composition.
Norwegian subsidiary Northland Logistics AS is not going through
formal reorganization, but has previously agreed with all of its
creditors on a payment plan identical to that of the other
subsidiaries.
* * *
As reported by the Troubled Company Reporter-Europe on April 1,
2013, Moody's Investors Service affirmed the Caa3 corporate
family rating and bond rating of Northland Resources AB.
Concurrently, Moody's has applied the 'limited default' ('/LD')
indicator to the company's Ca-PD probability of default rating
(PDR), to reflect the recently missed interest payment on its
outstanding notes, which the rating agency considers a default
according to its definition of default. As a result, Moody's PDR
for Northland has been affirmed at Ca-PD/LD. In addition, the
outlook on all ratings remains negative.
ONCURE HOLDINGS: US Trustee Knocks Ex-CEO's Severance in Ch. 11
---------------------------------------------------------------
Lance Duroni of BankruptcyLaw360 reported that a U.S. trustee
objected to a $270,000 severance payment that private equity-owned
OnCure Holdings Inc. wants to pay to its former CEO, saying such a
payment would need to be part of a broader program for all the
bankrupt company's employees.
The report related that the cancer center operator conceded in its
motion to approve the payment that it does not have a formal
severance policy -- a fact that dooms the motion under the
Bankruptcy Code, according to an objection filed in Delaware
bankruptcy court by U.S. Trustee.
About OnCure Holdings
Headquartered in Englewood, Colorado, OnCure Holdings, Inc. --
http://www.oncure.com/-- provides management services and
facilities to oncology physician groups throughout the country.
OnCure Holdings and its affiliates filed Chapter 11 bankruptcy
petitions (Bankr. D. Del. Case Nos. 13-11540 to 13-11562) in
Wilmington on June 14, 2013. Bradford C. Burkett signed the
petition as CEO.
On the Petition Date, the Debtors disclosed total assets of
$179,327,000 and total debts of $250,379,000. There's at least
$15 million owing on a first-lien term loan facility, as well as
$210 million on prepetition secured notes.
Paul E. Harner, Esq., and Keith A. Simon, Esq., at Latham &
Watkins LLP, in New York, serve as the Debtors' lead bankruptcy
counsel. Daniel J. DeFranceschi, Esq., at Richards, Layton &
Finger P.A., in Wilmington, Delaware, serves as the Debtors' local
Delaware counsel. Kurtzman Carson Consultants is the claims and
notice agent. Match Point Partners LLC provides management
services to OnCure.
The Debtors have signed a deal to sell the business to Radiation
Therapy Services Holdings Inc. for $125 million, absent higher and
better offers. RTS's offer comprises $42.5 million in cash (plus
covering certain expenses and subject to certain working capital
adjustments) and up to $82.5 million in assumed debt. Secured
noteholders are supporting the RTS deal.
Millstein & Co., Kirkland & Ellis LLP, Alvarez & Marsal and
Deloitte advised Radiation Therapy in connection with the
transaction.
Promptly before the bankruptcy filing, the Debtors entered into a
restructuring support agreement with the members of an ad hoc
committee of its secured notes, constituting 100% of the lenders
under the first lien term loan credit agreement and approximately
73% of the secured notes, pursuant to which they have agreed to
support a stand-alone restructuring of the Debtors, subject to an
auction process for a sale of substantially all of the Debtors'
assets or the equity of the reorganized Debtors pursuant to a
chapter 11 plan.
ORMET CORP: Can Seek Better Power Deal, Court Says
--------------------------------------------------
Jamie Santo of BankruptcyLaw360 reported that aluminum smelter
Ormet Corp. can continue its bid to modify an existing power
agreement to enable its sale to a private equity firm after a
Delaware bankruptcy judge rejected an Ohio utility's contention
that the debtor must first either accept or reject the deal as
written.
According to the report, with its sale to private equity firm
Wayzata Investment Partners LLC contingent on securing cheaper
electricity, Ormet is seeking to have the Public Utilities
Commission of Ohio modify its energy-supply arrangement.
As previously reported, rather than simply transfer the utility
agreement to private-equity buyer Wayzata, Ormet is seeking to
modify what it says was a regulatory order from the Public
Utilities Commission of Ohio.
Ohio Power Co., doing business as AEP Ohio, launched a suit in
Delaware bankruptcy court seeking to block Ormet's bid to have a
state commission modify the power agreement before transferring it
to the private equity buyer. Ohio Power sought a preliminary
injunction stopping Ormet from going forward with a bid to have
the Public Utilities Commission of Ohio amend its energy agreement
until the Delaware court rules on AEP's May 8 objection to the
contract's assignment and assumption.
Ormet argued that the Ohio utility is off base because the deal is
not actually a contract, but a state-mandated arrangement.
About Ormet Corp.
Aluminum producer Ormet Corporation, along with affiliates, filed
for Chapter 11 protection (Bankr. D. Del. Case No. 13-10334) on
Feb. 25, 2013, with a deal to sell the business to a portfolio
company owned by private investment funds managed by Wayzata
Investment Partners LLC.
Headquartered in Wheeling, West Virginia, Ormet --
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.
Ormet disclosed assets of $406.8 million and liabilities totaling
$416 million. Secured debt of about $180 million includes $139.5
million on a secured term loan and $39.3 million on a revolving
credit.
Attorneys at Dinsmore & Shohl LLP and Morris, Nichols, Arsht &
Tunnell LLP serve as counsel to the Debtors. Kurtzman Carson
Consultants is the claims and notice agent. Evercore's Lloyd
Sprung and Paul Billyard serve as investment bankers to the
Debtor.
PARKER DRILLING: Moody's Rates New $225MM Senior Notes 'B1'
-----------------------------------------------------------
Moody's assigned a B1 rating to Parker Drilling Company's (Parker)
proposed $225 million senior notes due 2020. The B1 Corporate
Family Rating (CFR) and the stable outlook remain unchanged.
Parker plans to use the proceeds from the offering to repay in
full its $125 million term loan undertaken in April 2013 to fund
the acquisition of ITS Tubular Services Limited, to repay $45
million drawn under its senior secured term loan facility, and for
general corporate purposes.
"Parker's B1 CFR reflects its small scale and exposure to the
cyclical contract drilling market, tempered by improving prospects
for meaningful revenue growth and free cash flow generation as it
accelerates efforts to expand its Rental Tools business and
international diversification," stated Michael Somogyi, Moody's
Vice President -- Senior Analyst.
Issuer: Parker Drilling Company
Rating Assignments:
$225 million Senior Unsecured Regular Bond/Debenture (Notes),
assigned B1, LGD4 (57%)
Ratings Rationale:
The proposed notes are rated B1 (LGD4-57%), in line with the CFR.
While the notes are contractually subordinated to the company's
secured bank credit facility, they will benefit from guarantees
from all of Parker's domestic operating subsidiaries, including
its Alaska rigs. However, Moody's notes that the notes are not
guaranteed by Parker's subsidiaries generating revenue primarily
outside of the U.S., and as such, the notes will be effectively
subordinated to the liabilities of these subsidiaries. The non-
guarantor subsidiaries house Parker's international rigs and
currently have no debt obligations.
Parker's B1 CFR reflects the company's small scale and exposure to
the cyclical contract drilling market. US land drilling and the
demand for rental tools have faced a challenging market
environment over the past several quarters as price discounting
and declining utilization rates are evidence of slowing demand and
excess equipment. As a relatively small player in the drilling rig
business, Parker has historically carved out a niche position as a
provider of specialized drilling rigs along with a willingness to
work on complex wells or in remote and harsh locations worldwide.
Parker's drilling rigs are used under relatively short term
customer commitments that generate little backlog which causes
variability in rig utilization rates and day rates for the
company. In addition, as a result of operating in developing and
undeveloped countries, Parker is often exposed to political risk.
The CFR is positively influenced by the strong financial
performance of Parker's rental tools business. Having built a
reputation as a reliable source for high-quality drilling-related
services and rental tools, Parker has been able to generate
significant levels of cash flow in this business segment. Rental
tools contributed about 60% of the company's EBITDA in 2012 and
64% in the first quarter of 2013, and the addition of ITS should
lead to higher levels of cash flow from this business line.
Additionally, after many delays, Parker has completed the launch
of its two, state-of-the-art, Arctic-class drilling rigs currently
deployed on the Alaskan North Slope under five-year contracts.
These rigs are operational and will generate cash flow for the
first full quarter ending June 30, 2013.
The rating outlook is stable and assumes that Parker will maintain
conservative financial metrics. Parker's ratings are constrained
by the company's relatively small size, the volatility and capital
intensity of the contract drilling sector, and the inherent
business and political risks from its international operations.
However, should the company's ratio of debt to EBITDA fall below
2.0x, a positive action could be considered. Conversely, a
negative rating action could result from materially increased
leverage, tightening liquidity, or weakening results in the rental
tools business. Sustained Debt to EBITDA in excess of 3.5x would
signal a change in financial policies that could lead to a
downgrade. Should the amount of senior secured debt increase to be
a greater portion of the company's capital structure, it could
lead to a downgrade of the senior notes.
The principal methodology used in this rating was the Global
Oilfield Services Rating 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.
Parker Drilling Company is headquartered in Houston, Texas.
PARKER DRILLING: S&P Assigns 'B+' Rating to $225MM Notes Due 2020
-----------------------------------------------------------------
Standard & Poor's Ratings Services said it assigned its 'B+'
issue-level rating (the same as the corporate credit rating on the
company) to Parker Drilling Co.'s proposed $225 million senior
unsecured notes due 2020. In addition, S&P assigned a recovery
rating of '3' to this debt, indicating expectations of meaningful
(50%-70%) recovery in a payment default. Parker Drilling will use
proceeds from the new notes to repay the balance of its existing
$125 million term loan from Goldman Sachs, repay outstanding debt
under the first-lien term loan due 2017, and for general corporate
purposes.
The corporate credit rating on Parker Drilling is 'B+', and the
outlook is stable. The ratings on Parker incorporate S&P's
assessment of a "weak" business profile, an "aggressive" financial
policy, and an "adequate" liquidity. The ratings also reflect the
company's participation in a highly competitive, cyclical
industry; its large capital spending program; its operations in
international markets and areas that can expose it to geopolitical
risks, and currently soft industry conditions, given weak gas
prices. The ratings also account for the company's business and
geographic diversity, its decent cash flows, and satisfactory
credit measures.
Rating List
Parker Drilling Co.
Corporate credit rating B+/Stable/--
Parker Drilling Co.
$225 mil. sr. unsecured nts. due 2020 B+
Recovery rating 3
PIONEER FREIGHT: Files for Chapter 15 in New York
-------------------------------------------------
Lance Duroni of BankruptcyLaw360 reported that Pioneer Freight
Futures Co. Ltd., a defunct British Virgin Islands-based firm that
traded shipping futures, filed for Chapter 15 bankruptcy to help
further its liquidation by tracking down any assets that it may
have in the U.S.
According to the report, in a petition filed in New York
bankruptcy court, Mark Richard Byers and Mark McDonald, the two
liquidators charged with winding down Pioneer Freight, asked the
U.S. court to recognize the company's liquidation proceeding in
the British Virgin Islands, which has been underway for three
years.
PMI GROUP: Judge Boots U.S. Objections to Ch. 11 Plan
-----------------------------------------------------
Matt Chiappardi of BankruptcyLaw360 reported that a Delaware
bankruptcy judge overruled the federal government's objections to
mortgage insurance holding company PMI Group Inc.'s Chapter 11
plan, but its final confirmation remains in limbo with the judge
wanting some loose ends tied up before making a ruling.
According to the report, U.S. Bankruptcy Judge Brendan L. Shannon
said from the bench that the U.S. Attorney's Office did not
convince him that the plan's primary purpose was to avoid paying
taxes.
About The PMI Group
The PMI Group, Inc., is an insurance holding company whose stock
had, until Oct. 21, 2011, been publicly-traded on the New York
Stock Exchange. Through its principal regulated subsidiary, PMI
Mortgage Insurance Co., and its affiliated companies, the Debtor
provides residential mortgage insurance in the United States.
The PMI Group filed for Chapter 11 bankruptcy (Bankr. D. Del. Case
No. 11-13730) on Nov. 23, 2011. In its schedules, the Debtor
disclosed $167,963,354 in assets and $770,362,195 in liabilities.
Stephen Smith signed the petition as chairman, chief executive
officer, president and chief operating officer.
The Debtor said in the filing that it does not have the financial
resources to pay the outstanding principal amount of the 4.50%
Convertible Senior Notes, 6.000% Senior Notes and the 6.625%
Senior Notes if those amounts were to become due and payable.
The Debtor is represented by James L. Patton, Esq., Pauline K.
Morgan, Esq., Kara Hammond Coyle, Esq., and Joseph M. Barry, Esq.,
at Young Conaway Stargatt & Taylor LLP.
The Official Committee of Unsecured Creditors appointed in the
case retained Morrison & Foerster LLP and Womble Carlyle Sandridge
& Rice, LLP, as bankruptcy co-counsel. Peter J. Solomon Company
serves as the Committee's financial advisor.
The Plan provides that, generally, each holder of an allowed
secured claim will be paid in full in cash. The Debtor did not
schedule any claims as secured claims, but notes that
approximately $129,000 in fixed amount has been asserted on an
aggregate basis in proofs of claim filed against it, all subject
to review and possible objection.
As reported by the TCR on June 12, 2013, the Court has approved
the disclosure statement explaining PMI Group, Inc.'s plan of
reorganization and scheduled the confirmation hearing for July 18,
2013, at 11:00 a.m. (Prevailing Eastern Time).
PMI GROUP: Plan Not Proposed in Good Faith, U.S. Trustee Complains
------------------------------------------------------------------
Roberta A. Angelis, the U.S. Trustee for Region 3, objects to the,
and asks the Bankruptcy Court to deny, confirmation of the First
Amended Plan of Reorganization of PMI Group, Inc.
On behalf of the U.S. Trustee, David L. Buchbinder, Esq., trial
attorney, asserts that the Plan has not been proposed in good
faith citing that:
-- The Plan does not comply with the applicable provisions of
Chapter 11;
-- A liquidating non-individual Chapter 11 debtor is not
entitled to a discharge; and
-- The third party release provisions are improper.
"The Plan is not feasible," Mr. Buchbinder contends, "because the
Debtor's plan to acquire an unknown business, raise investment
capital and then operate this unknown business successfully is
nothing more than conjecture and speculation."
The proposed third party and other release provisions under the
Plan are improper, he continues, in that it would effectively
result in a discharge of the Debtor.
The confirmation hearing on the proposed Plan was set for July 18,
2013. No order has been entered in the Court's dockets as of
presstime.
About The PMI Group
The PMI Group, Inc., is an insurance holding company whose stock
had, until Oct. 21, 2011, been publicly-traded on the New York
Stock Exchange. Through its principal regulated subsidiary, PMI
Mortgage Insurance Co., and its affiliated companies, the Debtor
provides residential mortgage insurance in the United States.
The PMI Group filed for Chapter 11 bankruptcy (Bankr. D. Del. Case
No. 11-13730) on Nov. 23, 2011. In its schedules, the Debtor
disclosed $167,963,354 in assets and $770,362,195 in liabilities.
Stephen Smith signed the petition as chairman, chief executive
officer, president and chief operating officer.
The Debtor said in the filing that it does not have the financial
resources to pay the outstanding principal amount of the 4.50%
Convertible Senior Notes, 6.000% Senior Notes and the 6.625%
Senior Notes if those amounts were to become due and payable.
The Debtor is represented by James L. Patton, Esq., Pauline K.
Morgan, Esq., Kara Hammond Coyle, Esq., and Joseph M. Barry, Esq.,
at Young Conaway Stargatt & Taylor LLP.
The Official Committee of Unsecured Creditors appointed in the
case retained Morrison & Foerster LLP and Womble Carlyle Sandridge
& Rice, LLP, as bankruptcy co-counsel. Peter J. Solomon Company
serves as the Committee's financial advisor.
The Plan provides that, generally, each holder of an allowed
secured claim will be paid in full in cash. The Debtor did not
schedule any claims as secured claims, but notes that
approximately $129,000 in fixed amount has been asserted on an
aggregate basis in proofs of claim filed against it, all subject
to review and possible objection.
As reported by the TCR on June 12, 2013, the Court has approved
the disclosure statement explaining PMI Group, Inc.'s plan of
reorganization and scheduled the confirmation hearing for July 18,
2013, at 11:00 a.m. (Prevailing Eastern Time).
PMI GROUP: Gets Final Court Nod for CEO and VP Appointments
-----------------------------------------------------------
Judge Brendan L. Shannon issued a final order allowing the
appointment of of David W. Prager as chief executive officer and
Matthew R. Flynn as vice president of The PMI Group, Inc.
About The PMI Group
The PMI Group, Inc., is an insurance holding company whose stock
had, until Oct. 21, 2011, been publicly-traded on the New York
Stock Exchange. Through its principal regulated subsidiary, PMI
Mortgage Insurance Co., and its affiliated companies, the Debtor
provides residential mortgage insurance in the United States.
The PMI Group filed for Chapter 11 bankruptcy (Bankr. D. Del. Case
No. 11-13730) on Nov. 23, 2011. In its schedules, the Debtor
disclosed $167,963,354 in assets and $770,362,195 in liabilities.
Stephen Smith signed the petition as chairman, chief executive
officer, president and chief operating officer.
The Debtor said in the filing that it does not have the financial
resources to pay the outstanding principal amount of the 4.50%
Convertible Senior Notes, 6.000% Senior Notes and the 6.625%
Senior Notes if those amounts were to become due and payable.
The Debtor is represented by James L. Patton, Esq., Pauline K.
Morgan, Esq., Kara Hammond Coyle, Esq., and Joseph M. Barry, Esq.,
at Young Conaway Stargatt & Taylor LLP.
The Official Committee of Unsecured Creditors appointed in the
case retained Morrison & Foerster LLP and Womble Carlyle Sandridge
& Rice, LLP, as bankruptcy co-counsel. Peter J. Solomon Company
serves as the Committee's financial advisor.
The Plan provides that, generally, each holder of an allowed
secured claim will be paid in full in cash. The Debtor did not
schedule any claims as secured claims, but notes that
approximately $129,000 in fixed amount has been asserted on an
aggregate basis in proofs of claim filed against it, all subject
to review and possible objection.
As reported by the TCR on June 12, 2013, the Court has approved
the disclosure statement explaining PMI Group, Inc.'s plan of
reorganization and scheduled the confirmation hearing for July 18,
2013, at 11:00 a.m. (Prevailing Eastern Time).
PMI GROUP: Has Final Approval to Employ Goldin Associates
---------------------------------------------------------
The Hon. Brendan L. Shannon of the U.S. Bankruptcy Court for the
District of Delaware entered a final order modifying the order
authorizing The PMI Group, Inc., to employ Goldin Associates, LLC;
and appointing David W. Prager as the Debtor's chief executive
officer and Mathew R. Flynn as vice president.
On June 23, the Court entered an interim order for the employment
of Goldin Associates.
As reported by the Troubled Company Reporter on July 5, 2013,
Mr. Prager and Mr. Flynn are financial and restructuring
professionals at Goldin Associates, a transaction and
restructuring advisory firm that has been providing restructuring
consulting services to TPG during its bankruptcy proceeding. The
engagement letter between TPG and Goldin, dated Oct. 28, 2011,
continues to control the relationship between TPG and Goldin, and
Mr. Prager and Mr. Flynn will not receive new or additional
compensation from TPG in connection with their service as
officers. Mr. Prager and Mr. Flynn will serve as officers at the
pleasure, and under the direction, of TPG's board of directors.
Mr. Prager, 35, is a managing director at Goldin, which he joined
in March 2002. Since October 2011, Mr. Prager has served as TPG's
lead restructuring consultant. From November 2008 to May 2010,
Mr. Prager served as interim principal financial officer and
restructuring advisor to Syncora Holdings Ltd., a monoline
financial guarantor. There have been no related party
transactions between TPG and Mr. Prager, nor are there any family
relationships between TPG's directors or officers and Mr. Prager.
Mr. Flynn, 35, is a director at Goldin, which he joined in
December 2008. From February 2009 to June 2010, Mr. Flynn served
as an interim manager at Young Broadcasting Inc., a television
broadcaster, during that company's bankruptcy proceedings and was
responsible for managing its business operations and restructuring
process. Immediately preceding his employment at Goldin, Mr.
Flynn was employed as an investment banker at Barclays Capital
Inc. There have been no related party transactions between TPG
and Mr. Flynn, nor are there any family relationships between
TPG's directors or officers and Mr. Flynn.
About The PMI Group
The PMI Group, Inc., is an insurance holding company whose stock
had, until Oct. 21, 2011, been publicly-traded on the New York
Stock Exchange. Through its principal regulated subsidiary, PMI
Mortgage Insurance Co., and its affiliated companies, the Debtor
provides residential mortgage insurance in the United States.
The PMI Group filed for Chapter 11 bankruptcy (Bankr. D. Del. Case
No. 11-13730) on Nov. 23, 2011. In its schedules, the Debtor
disclosed $167,963,354 in assets and $770,362,195 in liabilities.
Stephen Smith signed the petition as chairman, chief executive
officer, president and chief operating officer.
The Debtor said in the filing that it does not have the financial
resources to pay the outstanding principal amount of the 4.50%
Convertible Senior Notes, 6.000% Senior Notes and the 6.625%
Senior Notes if those amounts were to become due and payable.
The Debtor is represented by James L. Patton, Esq., Pauline K.
Morgan, Esq., Kara Hammond Coyle, Esq., and Joseph M. Barry, Esq.,
at Young Conaway Stargatt & Taylor LLP.
The Official Committee of Unsecured Creditors appointed in the
case retained Morrison & Foerster LLP and Womble Carlyle Sandridge
& Rice, LLP, as bankruptcy co-counsel. Peter J. Solomon Company
serves as the Committee's financial advisor.
The Plan filed in the Debtor's case provides that, generally, each
holder of an allowed secured claim will be paid in full in cash.
The Debtor did not schedule any claims as secured claims, but
notes that approximately $129,000 in fixed amount has been
asserted on an aggregate basis in proofs of claim filed against
it, all subject to review and possible objection.
POINT CENTER: Committee Seeks Chapter 11 Trustee Appointment
------------------------------------------------------------
The Official Committee of Unsecured Creditors of Point Center
Financial, Inc., asks the U.S. Bankruptcy Court for the Central
District of California to appoint a Chapter 11 trustee in the case
of Point Center or convert the case into a Chapter 7 proceeding.
The Committee complains that Danny Joe Harkey, the Debtor's sole
shareholder and president, has proven to be wholly incapable of
exercising the duties of a proper judiciary.
Counsel to the Committee, Kristine A. Thagard, Esq., of Marshack
Hays LLP, relates that in a civil action by certain of the
Debtor's investors, the jury recently entered a verdict finding by
clear and convincing evidence that the Debtor and Mr. Harkey
breached their fiduciary duties to their investors acting with
malice, oppression or fraud. The jury further found that Mr.
Harkey committed elder abuse and appropriated the plaintiff's
property for a wrongful use, with the intent to defraud, or by
undue influence. In addition to an award of actual damages of $9
million, the jury imposed punitive damages against Mr. Harkey in
the amount of $1,001,763. The jury also awarded punitive damages
against the Debtor in the amount of $1,001,763.
"This jury verdict alone, and without more, constitutes sufficient
cause for a trustee to be appointed immediately," the Committee
contends.
Ms. Thagard adds that the Debtor -- at Mr. Harkey's direction --
has engaged in a systematic liquidation of the Debtor's assets for
Mr. Harkey's beneft and to the Estate's detriment. She relates
that a Court-appointed examiner recently found that Mr. Harkey had
created an entity to succeed the Debtor, known as CalComm Capital,
Inc., and the examiner's report expressed as a concern that the
Debtor's business opportunities were being diverted to CalComm.
"At a bare minimum, it is obvious the Debtor does not have the
Estate's best interests in mind as it liquidates its assets and
winds down its affairs," the Committee argues.
The Committee adds that the Estate holds several bona-fide claims
to recover fraudulent and preferential transfers from Mr. Harkey
and his insiders, but that the Debtor is unlikely to prosecute
those actions.
Richard A. Marshack, Esq., of Marshack Hays LLP, also serve as
attorney to the Creditors Committee.
The Court will convene a hearing on Aug. 7, 2013, at 10:00 a.m.,
to consider the Committee's request.
About Point Center
Point Center Financial, Inc., a hard money lender, filed a
Chapter 11 petition (Bankr. C.D. Cal. Case No. 13-11495) in Santa
Ana, California, on Feb. 19, 2013. The Debtor disclosed
$109,257,545 in assets and $54,566,116 in liabilities as of the
Chapter 11 filing.
The Company claims to have a long track record of success in
originating and servicing loans from hundreds of investors.
Unfortunately, due to the historic collapse of the economy
beginning in about 2007, the Debtor, no different than many other
similar enterprises in real estate, has fallen on hard times.
From a high of about 130 performing loans with a total combined
face value of over $450 million in 2006, only 8 loans are now
performing. There were a total of only four foreclosed properties
("REOs") as of 2006. In comparison, between 2007 and 2012, there
were 60 foreclosure sales.
The result left the Debtor saddled with large secured liabilities
to PMB, which has a blanket lien on all of the Debtor's assets in
excess of $9 million, secured by the Debtor's primary asset of
loan servicing and management fees received from secured loans and
properties that have been taken back through foreclosure.
The MA Creditors are represented by Mary L. Fickel, Esq., at
Fickel & Davis.
The Official Committee of Unsecured Creditors is represented by
Marshack Hays LLP.
POINT CENTER: Has Access to Cash Collateral Thru September
----------------------------------------------------------
Judge Theodor C. Albert entered an interim order approving the
Cash Collateral Stipulation between Point Center Financial, Inc.
and Pacific Mercantile Bank through September 2013.
Provisions in the Stipulation and Budget providing for payment of
fees to the Debtor's counsel is clarified so that funds are
available to all professionals employed and to be paid from the
estate.
The Stipulation will not waive any claim against PMB by any party
other than the Debtor. It is also amended to delete the
appointment of an examiner as an event of default.
Objections filed by the Official Committee of Unsecured Creditors
and Brewer Corporation, et al., were overruled.
Robert P. Goe, Esq., of Goe & Forsythe, LLP, appeared on behalf of
the Debtor at the cash collateral hearing.
About Point Center
Point Center Financial, Inc., a hard money lender, filed a
Chapter 11 petition (Bankr. C.D. Cal. Case No. 13-11495) in Santa
Ana, California, on Feb. 19, 2013. The Debtor disclosed
$109,257,545 in assets and $54,566,116 in liabilities as of the
Chapter 11 filing.
The Company claims to have a long track record of success in
originating and servicing loans from hundreds of investors.
Unfortunately, due to the historic collapse of the economy
beginning in about 2007, the Debtor, no different than many other
similar enterprises in real estate, has fallen on hard times.
From a high of about 130 performing loans with a total combined
face value of over $450 million in 2006, only 8 loans are now
performing. There were a total of only four foreclosed properties
("REOs") as of 2006. In comparison, between 2007 and 2012, there
were 60 foreclosure sales.
The result left the Debtor saddled with large secured liabilities
to PMB, which has a blanket lien on all of the Debtor's assets in
excess of $9 million, secured by the Debtor's primary asset of
loan servicing and management fees received from secured loans and
properties that have been taken back through foreclosure.
The MA Creditors are represented by Mary L. Fickel, Esq., at
Fickel & Davis.
The Official Committee of Unsecured Creditors is represented by
Marshack Hays LLP.
READER'S DIGEST: Parent Reaches $5-Mil. Settlement With Mosaic
--------------------------------------------------------------
Kathryn Brenzel of BankruptcyLaw360 reported that Reader's Digest
Association Inc.'s parent told a New York bankruptcy court that it
had reached a $5 million settlement with Mosaic Media Investment
Partners LLC, potentially resolving more than $31 million in
claims over allegedly deceptive marketing and a related $27
million Federal Trade Commission settlement.
According to the report, the agreement is the latest step for RDA
Holdings Co. as it moves toward reorganizing Reader's Digest and
filing a separate Chapter 11 plan for another subsidiary, Direct
Entertainment Media Group Inc.
About Reader's Digest
Reader's Digest is a global media and direct marketing company
that educates, entertains and connects consumers around the world
with products and services from trusted brands. For more than 90
years, the flagship brand and the world's most read magazine,
Reader's Digest, has simplified and enriched consumers' lives by
discovering and expertly selecting the most interesting ideas,
stories, experiences and products in health, home, family,
food, finance and humor.
RDA Holding Co. and 30 affiliates (Bankr. S.D.N.Y. Lead Case No.
13-22233) filed for Chapter 11 protection on Feb. 17, 2013,
with an agreement with major stakeholders for a pre-negotiated
chapter 11 restructuring. Under the plan, the Debtor will issue
the new stock to holders of senior secured notes.
RDA Holding Co. listed total assets of $1,118,400,000 and total
liabilities of $1,184,500,000 as of the Petition Date.
Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the
Debtors. Evercore Group LLC is the investment banker. Epiq
Bankruptcy Solutions LLC is the claims and notice agent.
Reader's Digest, together with its 47 affiliates, first sought
Chapter 11 protection (Bankr. S.D.N.Y. Case No. 09-23529) Aug. 24,
2009 and exited bankruptcy Feb. 19, 2010.
The plan in the new Chapter 11 case provides that holders of
allowed general unsecured claims in such sub-class will receive
their pro rata share of the GUC distribution; holders of allowed
general unsecured claims of Reader's Digest will also receive
their pro rata share of the RDA GUC distribution and the senior
noteholder deficiency claims in such sub-class will be deemed
waived solely for purposes of participating in the GUC
distribution and the RDA GUC distribution.
The Official Committee of Unsecured Creditors is represented by
Otterbourg, Steindler, Houston & Rosen, P.C. The Committee tapped
Alvarez & Marsal North America, LLC, as financial advisors.
REVSTONE INDUSTRIES: $54MM Nondebtor Unit Sale Won't Involve Court
------------------------------------------------------------------
Matt Chiappardi of BankruptcyLaw360 reported that, for the second
time, a Delaware bankruptcy judge refused to put his stamp on a
plan for Revstone Industries LLC to sell two of its nondebtor
assets for $54 million, but this time the sale will go forward
without court approval.
According to the report, Revstone was not able to reach an
agreement with secured creditor Boston Finance Group LLC and the
official committee of unsecured creditors for a scaled-down
version of the proposed sale order the company presented to U.S.
Bankruptcy Judge Brendan L. Shannon in June.
About Revstone Industries, Greenwood Forgings,
& US Tool & Engineering
Lexington, Kentucky-based Revstone Industries LLC, a maker of
truck parts, filed for Chapter 11 bankruptcy (Bankr. D. Del. Case
No. 12-13262) on Dec. 3, 2012. Judge Brendan Linehan Shannon
oversees the case. In its petition, Revstone estimated under
$50 million in assets and debts.
Affiliate Spara LLC filed its Chapter 11 petition (Bankr. D. Del.
Case No. 12-13263) on Dec. 3, 2012.
Lexington-based Greenwood Forgings, LLC (Bankr. D. Del. Case No.
13-10027) and US Tool & Engineering LLC (Bankr. D. Del. Case No.
13-10028) filed separate Chapter 11 petitions on Jan. 7, 2013.
Judge Shannon also oversees the cases.
A motion for joint administration of the cases has been filed.
Duane David Werb, Esq., at Werb & Sullivan, serves as bankruptcy
counsel to Greenwood and US Tool. Greenwood estimated $1 million
to $10 million in assets and $10 million to $50 million in debts.
US Tool & Engineering estimated under $1 million in assets and
$1 million to $10 million in debts. The petitions were signed by
George S. Homeister, chairman.
ROBERT SCHROEDER: Bankruptcy Trustee Calls for Politician's Arrest
------------------------------------------------------------------
Joshua Alston of BankruptcyLaw360 reported that the trustee
assigned to New Jersey Assemblyman Robert Schroeder's bankruptcy
asked a judge to order Schroeder's arrest after the assemblyman,
who was previously indicted for writing bad checks totaling $3.4
million, missed a deadline for producing documents and conferring
with creditors.
According to the report, Donald V. Biase, the trustee handling the
embattled lawmaker's case, asked U.S. Bankruptcy Judge Novalyn L.
Winfield to hold Schroeder, R-Bergen, in contempt of court and
impose monetary sanctions against him after he allegedly failed to
comply with a July 2 order.
ROTECH HEALTHCARE: Equity Panel Taps Berenson as Valuation Expert
-----------------------------------------------------------------
The Official Committee of Equity Security Holders of Rotech
Healthcare Inc., et al., asks the U.S. Bankruptcy Court for the
District of Delaware for permission to retain Berenson & Company,
LLC as its valuation expert.
According to the Equity Committee, for it to prepare a valuation
report amidst a changing regulatory landscape, it is essential
that it retain a qualified valuation expert familiar with the
healthcare industry and with experience providing valuation
services in large and complex Chapter 11 cases.
Berenson will provide advisory services to the Equity Committee,
including:
i) research, analysis, and gathering of data, including review
of valuation due diligence as necessary to assist to Equity
Committee in valuing the Company's business and delivering a
summary presentation;
ii) being available to meet with the Equity Committee, the
Company's management, the Company's board of directors,
creditor groups and other interested parties; and
iii) review sale process efforts undertaken by the Debtor as they
relate to valuation issues.
In consideration for the services to be rendered, Berenson will
earn a fee of $400,000 upon the conclusion of the Company's
Chapter 11 cases.
To the best of the Committee's knowledge, Berenson does not hold
or represent interest adverse to the Equity Committee, the Debtors
or their estates, and is a "disinterested person" as that term is
defined in Section 101(14) of the Bankruptcy Code.
About Rotech Healthcare
Based in Orlando, Florida, Rotech Healthcare Inc. (NASDAQ: ROHI)
-- http://www.rotech.com/-- provides home medical equipment and
related products and services in the United States, with a
comprehensive offering of respiratory therapy and durable home
medical equipment and related services. The company provides
equipment and services in 48 states through approximately 500
operating centers located primarily in non-urban markets.
The Company reported a net loss of $14.76 million in 2011, a net
loss of $4.20 million in 2010, and a net loss of $21.08 million
in 2009.
The Company's balance sheet at Sept. 30, 2012, showed
$255.76 million in total assets, $601.98 million in total
liabilities, and a $346.22 million total stockholders' deficiency.
On April 8, 2013, Rotech Healthcare and 114 subsidiary companies
filed petitions seeking relief under chapter 11 of the Bankruptcy
Code (Bankr. D. Del. Lead Case No. 13-10741) to implement a pre-
arranged plan negotiated with secured lenders.
Attorneys at Proskauer Rose LLP, and Young, Conaway, Stargatt &
Taylor serve as counsel to the Debtors; Foley & Lardner LLP is the
healthcare regulatory counsel; Akin Gump Strauss Hauer & Feld LLP
is the special healthcare regulatory counsel; Barclays Capital
Inc. is the financial advisor; Alix Partners, LLP is the
restructuring advisor; and Epiq Bankruptcy Solutions LLC is the
claims agent.
Prepetition term loan lender and DIP lender Silver Point Capital
and other consenting noteholders are represented by Wachtell,
Lipton, Rosen & Katz, and Richards Layton & Finger PA.
The U.S. Trustee at the end of April appointed an official
committee of equity holders. Members include Alden Global
Recovery Master Fund LP, Varana Capital Master LP, Wynnefield
Partners Small Cap Value LP I, Bastogne Capital Partners, LP, and
Kenneth S. Grossman P.C. Pension Plan.
The plan is supported by holders of a majority of the first- and
second-lien secured notes. The $290 million in 10.5 percent
second-lien notes are to be exchanged for the new equity. Trade
suppliers are to be paid in full, if they agree to continue
providing credit. The existing $23.5 million term loan would be
paid in full, and the $230 million in 10.75 percent first-lien
notes will be amended.
The Official Committee of Unsecured Creditors tapped Otterbourg,
Steindler, Houston & Rosen, P.C., as counsel; Buchanan Ingersoll &
Rooney PC as Delaware counsel; and Grant Thornton LLP as financial
advisor.
SAKS INC: S&P Puts 'BB' Corp. Credit Rating on CreditWatch Neg.
---------------------------------------------------------------
Standard & Poor's Ratings Services said it placed all ratings,
including the 'BB' corporate credit rating, on New York City-based
Saks Inc. on CreditWatch with negative implications.
"The CreditWatch placement reflects our view that there is a high
likelihood that the company could be acquired by either a
financial or strategic sponsor," said credit analyst David Kuntz.
"In our opinion, such a transaction could add a substantial amount
of debt to the company. As a result, the company's credit
metrics, which are currently commensurate with the company's
"intermediate" financial risk profile, would weaken. As of first
quarter 2013, leverage was 2.2x, interest coverage was 4.9x, and
funds from operations to total debt was 46.0%."
S&P expects to resolve the CreditWatch listing in the next three
months, subject to a proposed transaction, if any. If no
transaction occurs within this time frame, S&P would expect to
resolve the CreditWatch placement based on the current management
team's business strategy, financial policies, and capital
structure.
SAN BERNARDINO, CA: Bankruptcy Judge Pushes Back Against CalPERS
----------------------------------------------------------------
Ryan Hagen, writing for The San Bernardino Sun, reported that in a
bankruptcy hearing in which both San Bernardino and its main
creditor accused the other of misrepresenting important facts, the
judge overseeing the case pushed back against CalPERS on several
points.
According to the report, U.S. Bankruptcy Judge Meredith Jury said
she continued to think much of the information the California
Public Employees' Retirement System was asking the city to produce
was irrelevant to her upcoming decision on whether the city
qualifies for bankruptcy protection.
Jury said she hadn't made up her mind on the issue, but she wanted
a specific list of information the CalPERS thinks would help it
show the city didn't have a desire to effect a plan to adjust its
debts or hadn't filed for bankruptcy in good faith, the report
related.
In a tentative ruling, Jury said she viewed those requirements --
the basis of CalPERS' argument that San Bernardino isn't eligible
for bankruptcy protection -- as unrelated to what individual
officials may have thought because the city as a body has declared
that it does have that desire and did act in good faith, the
report further related.
And in multiple instances, Jury said the implication behind
something CalPERS' attorneys said was misleading, the report
added.
The lawsuit is City of San Bernardino v. State of California
(In re City of San Bernardino), 13-01127, U.S. Bankruptcy Court,
Central District of California (San Bernardino).
About San Bernardino, Calif.
San Bernardino, California, filed an emergency petition for
municipal bankruptcy under Chapter 9 of the U.S. Bankruptcy Code
(Bankr. C.D. Cal. Case No. 12-28006) on Aug. 1, 2012. San
Bernardino, a city of about 210,000 residents roughly 65 miles
(104 km) east of Los Angeles, estimated assets and debts of more
than $1 billion in the bare-bones bankruptcy petition.
The city council voted on July 10, 2012, to file for bankruptcy.
The move lets San Bernardino bypass state-required mediation with
creditors and proceed directly to U.S. Bankruptcy Court.
The city is represented that Paul R. Glassman, Esq., at Stradling
Yocca Carlson & Rauth.
San Bernardino joined two other California cities in bankruptcy:
Stockton, an agricultural center of 292,000 east of San Francisco,
and Mammoth Lakes, a mountain resort town of 8,200 south of
Yosemite National Park.
SAND SPRING: Files Plan Outline for Second Amended Joint Plan
-------------------------------------------------------------
Sand Spring Capital III, LLC, et al., filed on July 15, 2013, a
disclosure statement for the Debtors' Second Amended Joint Plan of
Reorganization, dated July 15, 2013.
The Plan implements a settlement with Cantor Fitzgerald & Co. and
related entities, referred to as the "Cantor Chapter 11
Settlement," which the Bankruptcy Court approved on May 28, 2013.
The Cantor Chapter 11 Settlement provides the roadmap for the
Plan, by which, among other things:
a. claims that the Debtors may have against the Cantor Group or
claims against the Cantor Group that are the property of the
Debtors, which are referred to in this Disclosure Statement
and the Plan as "derivative" claims, will be settled for a
cash payment for the benefit of all Investors;
b. with respect to any potential claims belonging to individual
Investors against Cantor, referred to in this Disclosure
Statement and the Plan as "direct" claims, the Cantor
Chapter 11 Settlement is structured to allow Investors to
make a decision to (1) participate in the settlement and
release their potential individual direct claims against
Cantor, or (2) decline to participate and retain their
rights to pursue any claims they may have against Cantor for
greater recovery if the litigation is successful;
c. each Investor will have the option to receive an additional
cash settlement in exchange for releasing Cantor from any
potential direct claims;
d. each Investor releasing Cantor from any potential direct
claims will be entitled to any distributions otherwise
permitted on account of the Investor's Interests in the
Debtors free of Cantor Indemnification Claims;
e. the Debtors will not need to bear the expenses of the
Investors that elect to bring or continue the Direct Claim
Action against Cantor or of defending the Cantor
Indemnification Claims; and
f. the Cantor Indemnification Claims will be resolved in the
forum in which Cantor has currently asserted such
indemnification claim rather than in the Bankruptcy Court.
The Cantor Chapter 11 Settlement and the Plan generally, do not
waive or release any claims that the Debtors or investors may have
against, among other parties, Commonwealth Advisors, Inc., and
Walter Morales.
Under the Cantor Chapter 11 Settlement, in exchange for Cantor's
payment of $1 million to the Debtors (the "Cantor Derivative Claim
Settlement Amount"), the Debtors are releasing the claims against
the Cantor Group.
In addition to the Cantor Derivative Settlement Amount, Cantor has
agreed to pay up to a total of $1 million to Investors who vote in
favor of the Plan and elect to release their direct claims and
causes of action against the members of the Cantor Group.
Alternatively, Investors may elect to retain any potential direct
claims and causes of action against members of the Cantor Group.
A copy of the disclosure statement for the Debtors' Second Amended
Joint Plan of Reorganization dated July 15, 2013, is available at:
http://bankrupt.com/misc/sandspring.doc921.pdf
About Sand Spring
Nine funds advised by Commonwealth Advisors Inc. of Baton Rouge,
Louisiana, sought Chapter 11 protection on Oct. 25, 2011, after
failing to work out a reorganization plan acceptable to all
investors. Lead Debtor is Sand Spring Capital III, LLC (Bankr. D.
Del. Case No. 11-13393).
Kenneth J. Enos, Esq., and Michael R. Nestor, Esq., at Young,
Conaway, Stargatt & Taylor, in Wilmington, Delaware, serve as
counsel to the Debtors. Epiq Bankruptcy Solutions LLC serves as
claims and notice agent.
The funds were formed from 2005 to 2007 under Walter Morales,
president and chief investment manager, and attracted 456
investors, according to filings in U.S. Bankruptcy Court in
Wilmington, Delaware. Last year, investors filed class-action
and derivative suits alleging mismanagement, misrepresentation,
and breach of fiduciary duty.
According to Bloomberg News, the U.S. Securities and Exchange
Commission initiated a formal investigation in July 2009. The
funds were unable or unwilling to satisfy investors' redemption
demands, which would have required liquidation of "their
holdings in an illiquid market and at depressed prices."
The funds, Commonwealth and Morales negotiated a prepackaged
Chapter 11 plan, which was accepted by all classes of creditors
except one. Because third-party contributions required unanimous
approval, the funds said they filed in Chapter 11 so they could
have "further discussions with their investors with the oversight
of this court."
Robert S. Brady, Esq., at Young Conaway Stargatt & Taylor, LLP,
represents the Debtor.
SATNAM LODGING: Non-Disclosure Costs Lawyer $16,033
---------------------------------------------------
Bankruptcy Judge Arthur B. Federman directed attorney Lydia Carson
-- who filed the voluntary Chapter 11 Petition on behalf of Satnam
Lodging, L.L.C. in January 2013, and who represented Satnam in its
previous bankruptcy case in 2012 -- to disgorge and pay into the
trust account of the Debtor's current counsel, Bradley McCormack,
the sum of $16,033 within 14 days. The Court finds that Ms.
Carson failed to comply with the disclosure requirements of 11
U.S.C. Sec. 329, Fed.R.Bankr.P. Rules 2014 and 2016, and Local
Rule 2016-1.
The Court finds that disgorgement of fees paid in both cases is an
appropriate sanction for such failure, particularly considering
Ms. Carson's response that the lack of disclosure was intentional
due to the source of the fees, and her continued failure to fully
disclose her compensation, even after she had been ordered to
disgorge the first $5,000. In sum, based on her intentional
misrepresentations to the Court concerning her compensation, Ms.
Carson will be ordered to disgorge $10,746 from the 2012 case,
plus $5,287 from the 2013 case.
The Court also directed Mr. McCormack to hold the funds in trust
pending a determination as to who may be entitled to them, and to
certify to the Court whether they are received as ordered.
A copy of the Court's July 16 Amended Order is available at
http://is.gd/bIvG97from Leagle.com.
Satnam Lodging, L.L.C., operates a Country Hearth Inn hotel in
Kansas City, Missouri. Satnam Lodging sought Chapter 11
protection (Bankr. W.D. Mo. Case No. 13-40100) on Jan. 10, 2013,
represented by Lydia M. Carson, Esq. -- lydiacarsonlaw@yahoo.com
-- at Carson Law Center, P.C. Judge Dennis R. Dow was originally
assigned to the case. In its 2013 petition, Satnam scheduled
assets of $2,148,267 and liabilities of $3,142,037. A list of the
Company's 20 largest unsecured creditors filed with the petition
is available for free at http://bankrupt.com/misc/mowb13-40100.pdf
The petition was signed by Daljeet Mann.
Satnam first filed for bankruptcy (Bankr. W.D. Mo. Case No.
12-42607) on June 26, 2012. Judge Arthur B. Federman oversaw this
case. Ms. Carson, Esq., also served as counsel in the 2012 case.
In the 2012 petition, Satnam scheduled assets of $5,958,378 and
liabilities of $4,306,534. A list of the Company's 20 largest
unsecured creditors filed together with the petition is available
for free at http://bankrupt.com/misc/mowb12-42607.pdf The
petition was signed by Daljeet Mann.
The 2012 case was dismissed on Dec. 4, 2012, on the Debtor's
motion. The U.S. Trustee and Zion's First National Bank also had
Motions to Dismiss or Convert pending in the first case.
SAVE MOST: Can Access JPMC Cash Collateral Until Aug. 31
--------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California
has authorized Save Most Desert Rancho, Ltd., to use cash
collateral of JPMorgan Chase Bank, N.A., until Aug. 31, 2013.
As reported in the TCR on Feb. 7, 2013, the Court approved the
stipulation regarding cash collateral and adequate protection
entered into by and between the Debtor and JPMC. The stipulation
authorized the Debtor to use cash collateral of JPMC until
June 30, 2013, with respect to JPMC's claim secured by the
Debtor's Laguna Hills, California property.
As stipulated, on the first day of each month, commencing
effective Feb. 1, 2012, the Debtor will pay to JPMC an amount
equal to interest on the Loan calculated at the non-default rate
of interest as well as any impounded amounts due under the loan
documents.
JPMC, will, to the extent of the amount of cash collateral used by
the Debtor pursuant to this Order, a first priority replacement
lien in (a) all prepetition and postpetition rents; (b) all leases
and occupancy agreements affecting the Debtor's Laguna Hills
property; and (c) all associated proceeds and products.
About Save Most Desert Rancho
Save Most Desert Rancho, Ltd., filed a Chapter 11 petition (Bankr.
C.D. Cal. Case No. 12-23173) in Santa Ana, California on Nov. 15,
2012. The Laguna Hills-based company disclosed $10,134,997 in
assets and $14,874,770 in liabilities as of the Chapter 11 filing.
The petition was signed by Charles Kaminskas for Brighton Park,
LP, general partner. Michael G. Spector, Esq., and Vicki L.
Schennum, Esq., at The Law Offices of Michael G. Spector, in Santa
Ana, Calif., represent the Debtor as Chapter 11 insolvency
counsel.
SCOLR PHARMA: RedHill Takes Steps to Safeguard RHB-102 Rights
-------------------------------------------------------------
RedHill Biopharma Ltd. on July 22 disclosed that it is currently
assessing the possible implications of SCOLR Pharma, Inc.'s
decision to cease its operations and is taking active steps to
further safeguard its rights under the RHB-102 license agreement.
The Company continues the development program of RHB-102 as
planned, and is not expecting any delays in such program resulting
from SCOLR's decision to cease its operations.
SCOLR, a U.S.- publicly traded company from whom the Company
licenses its rights to its RHB-102 anti-emetic drug, recently
announced that it ceased business operations. It should be noted
that under the terms of the license agreement between RedHill and
SCOLR, should SCOLR file for bankruptcy, RedHill has the
protection afforded to the licensee under the United States
Bankruptcy Code.
Moreover, RedHill independently filed with the USPTO, on March 14,
2013, a provisional patent application, owned by RedHill, covering
the formulation of RHB-102.
The disclosure was made in RedHill's earnings release for the
second quarter ended June 30, 2013, a copy of which is available
for free at http://is.gd/h9mvs9
Bothell, Wash.-based SCOLR Pharma, Inc. OTC BB: SCLR) --
http://www.scolr.com/-- is a specialty pharmaceutical company
focused on applying its formulation expertise and patented
Controlled Delivery Technology (CDT) platforms to develop novel
prescription pharmaceutical, over-the-counter (OTC), and
nutritional products.
SEVEN COUNTIES: Can Employ Peritus under Sec. 1108
--------------------------------------------------
Judge Joan A. Lloyd of the U.S. Bankruptcy Court for the Western
District of Kentucky, Louisville Division, granted Seven Counties
Services, LLC's application to employ Peritus Public Relations,
LLC, pursuant to Section 1108 of the Bankruptcy Code, over the
objection raised by Kentucky Employers Retirement Systems and
Kentucky Retirement Systems who complained that the firm is not a
"disinterested person."
Judge Lloyd found that Peritus is not a "professional" as the term
is used in Section 327(a), noting that the firm's work for the
Debtor will not involve any part in negotiating the plan,
adjusting debtor/creditor relationships, disposing or acquiring
assets or performing any duty required of the Debtor under the
Code. Because Peritus is not a "professional," Judge Lloyd said
the Court need not consider the issue of "disinterestedness" under
the statute and Peritus may negotiate the payment of more than 100
prepetition checks, the payment of which are necessary to the
Debtor's business operations.
About Seven Counties
Seven Counties Services Inc., a not-for-profit behavioral
services provider from Louisville, Kentucky, filed for Chapter 11
protection (Bankr. W.D. Ky. Case No. 13-31442) in the hometown
on April 4, 2013. The petition was signed by Anthony M. Zipple as
president/CEO. The Debtor scheduled assets of $45,603,716 and
scheduled liabilities of $232,598,880. Seiller Waterman LLC
serves as the Debtor's counsel. Judge Joan A. Lloyd presides over
the case.
The agency generates more than $100 million a year in revenue and
employs a staff of 1,400 providing services at 21 locations and
120 schools and community centers.
SEVEN COUNTIES: Seeks to Employ CCRE as Realtor
-----------------------------------------------
Seven Counties Services, Inc., seeks authority from the U.S.
Bankruptcy Court for the Western District of Kentucky, Louisville
Division, to employ Commonwealth Commercial, Inc., d/b/a
Commonwealth Commercial Real Estate, as their realtor.
As realtor, CCRE will list and market properties that the Debtor
identifies for sale or lease during the pendency of their Chapter
11 cases. The Debtor says it needs the services of a realtor to
enable the estate to obtain maximum value for its real estate.
The Debtor assures the Court that CCRE is a "disinterested person"
as defined in the Bankruptcy Code and does not represent any
interest adverse to the Debtor's and their estates'.
The Debtor is represented by David M. Cantor, Esq. --
cantor@derbycitylaw.com -- Neil C. Bordy, Esq. --
bordy@derbycitylaw.com -- Charity B. Neukomm, Esq. --
neukomm@derbycitylaw.com -- Tyler R. Yeager, Esq. --
yeager@derbycitylaw.com -- and James E. McGhee III, Esq. --
mcghee@derbycitylaw.com -- at SEILLER WATERMAN LLC, in Louisville,
Kentucky.
About Seven Counties
Seven Counties Services Inc., a not-for-profit behavioral
services provider from Louisville, Kentucky, filed for Chapter 11
protection (Bankr. W.D. Ky. Case No. 13-31442) in the hometown
on April 4, 2013. The petition was signed by Anthony M. Zipple as
president/CEO. The Debtor scheduled assets of $45,603,716 and
scheduled liabilities of $232,598,880. Seiller Waterman LLC
serves as the Debtor's counsel. Judge Joan A. Lloyd presides over
the case.
The agency generates more than $100 million a year in revenue and
employs a staff of 1,400 providing services at 21 locations and
120 schools and community centers.
SEVEN COUNTIES: Employs Wyatt Tarrant as Special Counsel
--------------------------------------------------------
PSYCHE JULY 22 (07/15)
Seven Counties Services, Inc., received authority from the U.S.
Bankruptcy Court for the Western District of Kentucky, Louisville
Division, to employ Theodore W. Myre, Jr., and the law firm of
Wyatt, Tarrant & Combs LLP as special counsel.
About Seven Counties
Seven Counties Services Inc., a not-for-profit behavioral
services provider from Louisville, Kentucky, filed for Chapter 11
protection (Bankr. W.D. Ky. Case No. 13-31442) in the hometown
on April 4, 2013. The petition was signed by Anthony M. Zipple as
president/CEO. The Debtor scheduled assets of $45,603,716 and
scheduled liabilities of $232,598,880. Seiller Waterman LLC
serves as the Debtor's counsel. Judge Joan A. Lloyd presides over
the case.
The agency generates more than $100 million a year in revenue and
employs a staff of 1,400 providing services at 21 locations and
120 schools and community centers.
SHAMROCK-HOSTMARK: Can Access GECC's Cash Collateral Until July 31
------------------------------------------------------------------
In a seventh interim order, the U.S. Bankruptcy Court for the
Northern District of Illinois authorized Shamrock-Hostmark
Princeton Hotel, LLC, to continue using cash collateral of General
Electric Capital Corporation until July 31, 2013, to pay expenses
of the Hotel, including the Hotel's employees, Hostmark Investors,
LP, under its Management Agreement for postpetition services
thereunder, postpetition vendors, insurance and taxes, pursuant to
a budget.
As adequate protection, Lender is granted replacement liens upon
all of the current owned or hereafter acquired property and assets
of the Debtor, and all proceeds, products, rents, and profits,
provide that Lender will not be granted a lien on or against
Debtor's Chapter 5 causes of action.
A status hearing on Debtor's request to use Lenders' cash
collateral will be held on July 30, 2013, at 10:00 a.m.
About Shamrock-Hostmark
Schaumburg, Ill.-based Shamrock-Hostmark Princeton Hotel,
LLC, filed for Chapter 11 protection (Bank. N.D. Ill. Case No.
12-25860) on June 27, 2012. William Gingrich signed the petition
as vice president-CFO, of Hostmark Hospitality Group. Shamrock-
Hostmark Princeton Hotel disclosed $522,413 in assets and
$15,457,812 in liabilities as of the Chapter 11 filing. Judge
Jacqueline P. Cox presides over the case.
Shamrock-Hostmark Andover and four affiliates are units of
investment fund Shamrock-Hostmark Hotel Fund that own hotels.
Shamrock-Hostmark Princeton owns the DoubleTree by Hilton Hotel
Princeton located in Princeton, New Jersey. Shamrock-Hostmark
Texas owns Crowne Plaza Hotel in San Antonio, Texas. Shamrock-
Hostmark Palm owns Embassy Suites Palm Desert in Palm Desert,
Calif. Shamrock-Hostmark Andover owns the Wyndham Boston Andover
in Andover, Mass. Shamrock-Hostmark Tampa owns the DoubleTree by
Hilton Hotel Tampa Airport - Westshore in Tampa, Florida.
Brian A. Audette, Esq., David J. Gold, Esq., David M. Neff, Esq.,
and Eric E. Walker, Esq., at Perkins Coie LLP, in Chicago,
Illinois, represent the Debtor as counsel.
SHILO INN: California Bank Opposes Cash Collateral Use
------------------------------------------------------
California Bank & Trust asks the Bankruptcy Court to deny use of
its cash collateral at this time by Shilo Inn, Twin Falls, LLC, et
al., based on the Debtors' inadequate showing of valuation,
adequate protection to the Bank and other requirements necessary
for such cash collateral use.
The Bank complains that the Debtors seek to continue to use its
cash collateral, but unjustifiably seek to cut off all adequate
protection payment to the Bank.
The Bank also contends that the Cash Collateral Motion again
illustrates the Debtors' fundamental misrepresentation of their
existing defaults.
The Court is set to hear the Motion for Cash Collateral Use on
July 30, 2013.
Hal Mark Mersel, Esq. -- mark.mersel@bryancave.com -- Sharon Z.
Weiss, Esq. -- Sharon.weiss@bryancave.com -- and Kerry Moynihan,
Esq. -- kerry.moynihan@bryancave.com -- of Bryan Cave LLP,
represent California Bank & Trust.
About Shilo Inn, Twin Falls
Shilo Inn, Twin Falls, LLC, and six affiliates filed a Chapter 11
petition (Bankr. C.D. Cal. Case No. 13-21601) on May 1, 2013.
Judge Richard M. Neiter presides over the case. Shilo Inn, Twin
Falls estimated assets of at least $10 million and debts of at
least $1 million.
Shilo Inn, Twin Falls; Shilo Inn, Nampa Blvd, LLC; Shilo Inn,
Newberg, LLC; Shilo Inn, Seaside East, LLC, Shilo Inn, Moses Lake,
Inc.; and Shilo Inn, Rose Garden, LLC each operates and owns a
hotel. California Bank and Trust is the primary, senior secured
lender for each of the Debtors.
The Debtors sought Chapter 11 protection after CBT on May 1, 2013,
filed for receiverships in district court.
David B. Golubchick, Esq., at Levene, Neale, Bender, Yoo & Brill
LLP, represents the Debtor in its restructuring effort.
SHOTWELL LANDFILL: Files Schedules of Assets and Liabilities
------------------------------------------------------------
Shotwell Landfill, Inc., filed with the U.S. Bankruptcy Court for
the Eastern District of North Carolina its schedules of assets and
liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $2,900,000
B. Personal Property $20,127,736
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $9,675,268
E. Creditors Holding
Unsecured Priority
Claims $0
F. Creditors Holding
Unsecured Non-priority
Claims $364,039
----------- -----------
TOTAL $23,027,736 $10,039,308
A copy of the schedules is available for free at
http://bankrupt.com/misc/SHOTWELL_LANDFILL_sal_amended.pdf
About Shotwell Landfill, Inc.
Raleigh, North Carolina-based Shotwell Landfill, Inc., filed a
Chapter 11 petition (Bankr. E.D.N.C. Case No. 13-02590) in
Wilson on April 19, 2013. The Debtor estimated $10 million to
$50 million in assets and liabilities. William P. Janvier, Esq.
at the Janvier Law Firm, PLLC, represents the Debtor as counsel.
SIEGMUND STRAUSS: Windsor Brands' Claim Pegged at $496K
-------------------------------------------------------
Bankruptcy Judge Martin Glenn ruled that the letter agreements
between Siegmund Strauss, Inc., and Windsor Brands, Ltd.; and
between Strauss and Twinkle Import Co., Inc., constituted a valid
enforceable contract that was breached by Strauss. As a result,
for voting and distribution purposes pursuant to 11 U.S.C. Section
502(c), the Court estimates the value of Claim No. 33 filed by
Roberto Rodriguez and Teresa Rodriguez on behalf of Twinkle and
its parent company, Windsor, at $496,265.60, consisting of:
(i) $381,265.60 for Strauss's failure to purchase Twinkle's
inventory,
(ii) $12,000 for Strauss's failure to pay for the Rodriguez
Parties' warehouse equipment,
(iii) $88,000 for Strauss's failure to pay for the fixtures
and leasehold improvements, and
(iv) $15,000 for sales commissions for May 2006.
The claim asserted by the Rodriguez Parties has been the subject
of more than seven years of litigation in New York state courts
including: in the Commercial Division in Manhattan, two trips to
the Appellate Division, First Department, and one trip to the New
York Court of Appeals. Despite these protracted proceedings in
state court, the parties acknowledge, and it is clear to the
Court, that allowing the litigation to proceed to judgment in
state court would unduly delay administration of the case.
Therefore, the Court determined that estimation of the claim for
purposes of voting and distribution is appropriate. Counsel for
the parties agreed with this conclusion and cooperated in
establishing the procedures for the July 8 estimation hearing.
A copy of Judge Glenn's July 17 Findings of Fact and Conclusions
of Law estimating claim no. 33 is available at http://is.gd/2ZfwF4
from Leagle.com.
Jaspan Schlesinger LLP's Shannon Anne Scott, Esq. --
sscott@jaspanllp.com -- represents Roberto Rodriguez, Teresa
Rodriguez, Twinkle Import Co., Inc. and Windsor Brands, Ltd.
Siegmund Strauss, Inc., based in Bronx, New York, filed for
Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 13-10887) on
March 25, 2013. Marc E. Richards, Esq., at Blank Rome, LLP,
serves as the Debtor's counsel. Siegmund Strauss scheduled
$232,292 in assets, and liabilities of $1,067,847. A list of the
Company's 20 largest unsecured creditors filed with the petition
is available for free at http://bankrupt.com/misc/nysb13-10887.pdf
The petition was signed by Stanley Mayer, president.
Seyfarth Shaw LLP's Adrian Zuckerman, Esq., and Ralph Berman, Esq.
-- azuckerman@seyfarth.com and rberman@seyfarth.com -- serve as
Special Litigation Counsel to Siegmund Strauss.
SOLIMAR ENERGY: Takes Steps to Rectify Event of Default
-------------------------------------------------------
Solimar Energy Limited on July 22 disclosed that the Kreyenhagen
Ranch 2-33 well (K 2-33) successfully reached TD at 1,472 feet
measured depth on July 20 and electric logs were run on July 21.
The well was directionally drilled at a 48 degree angle and
encountered over 600' of the Temblor formation heavy oil sands.
Oil was present throughout the logged interval.
Logs are currently being analyzed by Schlumberger to determine
rock and fluid properties including the percentage of oil and
water in the rock. The results of the analysis are expected
within a week. K 2-33 will be completed and placed on production,
using a completion rig in due course, to obtain reservoir fluid
samples and to evaluate the production performance of a deviated
well on primary production. Solimar plans to include the well in
an upcoming thermal (steam) pilot test scheduled for early 2014.
The Company has been informed that SCCP Solimar Holdings LP
("Second City") has issued a "Notice & Request" to Computershare
Trust Company of Canada in its capacity as the Trustee under the
Convertible Debenture Indenture dated June 26, 2012 providing for
the issuance of convertible debentures by the Company. Under the
notice of default they have requested the payment of their
outstanding interest and principal. Solimar has made arrangements
to rectify this event of default through the payment of the
interest owing of approximately C$110,000 to the holders of the
June Debentures. Second City holds an aggregate of C$3.1 million
of the June Debentures.
The Company has received the resignation of Ryan Dunfield as a
Director of the Company effective immediately. The Company wishes
Mr. Dunfield the best in his future endeavors.
The Company intends to complete a private placement of up to
C$500,000 of Units (each Unit is comprised of one Common Share and
up to one Warrant) at a price of C$0.015 on the TSXV which price
is reserved for the Offering.
The Offering is subject to TSXV regulatory approval.
Headquartered in Melbourne, Solimar Energy Limited --
http://www.solimarenergy.com.au/-- is engaged in the evaluation,
development of onshore oil and gas prospects and production of oil
and gas in California.
SOUND SHORE: Daniel T. McMurray Named Patient Care Ombudsman
------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
approved the appointment of:
Daniel T. McMurray
Focus Management Group USA, Inc.
5001 Lemon Street
Tampa, FL 33609
Tel: (813) 281-0062
E-mail: d.mcmurray@focusmg.com
as patient care ombudsman for Sound Shore Medical Center Inc. of
Westchester, et al.
Tracy Hope Davis, Acting U.S. Trustee for Region 2, appointed Mr.
McMurray. His role includes:
1) monitoring the quality of patient care provided to patients
of the debtor, to the extent necessary under the
circumstances, including interviewing patients and
physicians;
2) not later than 60 days after the date of the appointment,
and not less frequently than at 60 day intervals thereafter,
report to the court after notice to the parties in interest,
at a hearing or in writing, regarding the quality of patient
care provided to patients of the debtor; and
(3) if such ombudsman determines that the quality of patient
care provided to patients of the debtor is declining
significantly or is otherwise being materially compromised,
file with the court a motion or written report, with notice
to the parties in interest immediately upon making such
determination.
Mr. McMurray has filed papers in court seeking to employ the law
firm of Neubert, Pepe & Monteith, P.C., as counsel. Neubert
Pepe's lead partner, Mark I. Fishman, Esq., charges $425 per hour.
Neubert Pepe's hourly rates for other attorneys and paralegals are
equal to or less than $400.
About Sound Shore Medical
Sound Shore Medical Center of Westchester, Mount Vernon Hospital
Inc., Howe Avenue Nursing Home and related entities sought
Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 13-22840) on
May 29, 2013, in White Plains, New York.
The Debtors are the largest "safety net" providers for Southern
Westchester County in New York. Affiliated with New York Medical
College, Sound Shore is a not-for-profit 242-bed, community based-
teaching hospital located in New Rochelle, New York. Mountain
Vernon Hospital is a voluntary, not-for-profit 176-bed hospital
located in Mount Vernon, New York. Howe Avenue Nursing Home is a
150-bed, comprehensive facility.
The Debtors tapped Burton S. Weston, Esq., at Garfunkel Wild, P.C.
as counsel; Alvarez & Marsal Healthcare Industry Group, LLC, as
financial advisors; and GCG Inc., as claims agent.
The Debtors are seeking to sell their assets to the Montefiore
health system. In June 2013, Montefiore added $4.75 million to
its purchase offer for Sound Shore Medical Center and Mount Vernon
Hospital to speed up the sale. Montefiore raised its bid to
$58.75 million plus furniture and equipment as part of a request
for a private sale of the bankrupt New Rochelle and Mount Vernon
hospitals, which the Bronx-based health system would like to buy
by August 2. Montefiore is represented by Togut, Segal & Segal
LLP.
Alston & Bird LLP represents the Official Committee of Unsecured
Creditors.
Sound Shore disclosed assets of $159.6 million and liabilities
totaling $200 million. Liabilities include a $16.2 million
revolving credit and a $5.8 million term loan with Midcap
Financial LLC. There is $9 million in mortgages with Sun Life
Assurance Co. of Canada (US) and $11.5 million owing to the New
York State Dormitory Authority.
SOUTH LAKES: Creditors Committee Oppose Approval of Plan
--------------------------------------------------------
The Official Committee of Unsecured Creditors of South Lakes Dairy
Farm objects to the approval of the Debtor's Plan of
Reorganization dated March 20, 2013, citing:
A. The Plan Violates the Absolute Priority Rule.
B. The Plan Improperly Vests Unanticipated Profits In The
Debtor
C. The Plan Does Not Meet The Best Interest Of Creditors Test.
D. The Plan Does Not Disclose The Timing And Identification Of
Targets Of Avoidance Actions That Are To Be Filed By The Debtor.
E. There Are A Number Of Inconsistencies And Instances Of Non-
Disclosure Regarding The Real Property Lease.
F. The Plan Is Not Feasible On Its Face.
A copy of the Committee's Objection is available at:
http://bankrupt.com/misc/southlakes.doc378.pdf
Counsel for the Unsecured Creditors Committee can be reached at:
Scott E. Blakeley, Esq.,
Ronald A. Clifford, Esq.
BLAKELEY & BLAKELEY LLP
2 Park Plaza, Suite 400
Irvine, CA 92614
Tel: (949) 260-0611
(949) 260-0613
E-mail: seb@blakeleyllp.com
rclifford@blakeleyllp.com
According to the Disclosure Statement dated May 9, 2013,
describing the Plan of Reorganization dated March 20, 2013, the
Debtor believes that the income from current operations will be
sufficient to repay about 14% of its unsecured claims. Payments
on the convenience class of general unsecured claims will be paid
a pro rata share of $4,000 within thirty days of the Effective
Date of the Plan. The general unsecured claimants in excess of
$3,500 will be paid $1,200,000 pro-rata over a period of five
years trough pro-rata disbursements of $20,000 per month. The
general unsecured claims in excess of $3,500 will receive net
proceeds, if any, of any preference or fraudulent conveyance
recoveries in addition to the $1,200,000.
A full-text copy of the Disclosure Statement dated May 9, 2013, is
available for free at:
http://bankrupt.com/misc/SOUTHLAKES_DSMay9.PDF
About South Lakes Dairy
South Lakes Dairy Farm is a California partnership engaged in the
dairy cattle and milking business. The partnership filed a bare-
bones Chapter 11 petition (Bankr. E.D. Calif. Case No. 12-17458)
in Fresno, California on Aug. 30, 2012, disclosing $19.5 million
in assets and $25.4 million in liabilities in its schedules. The
Debtor said it has $1.97 million in accounts receivable charged to
Dairy Farmers of America on account of milk proceeds, and that it
has cattle worth $12.06 million. The farm owes $12.7 million to
Wells Fargo Bank on a secured note.
Bankruptcy Judge W. Richard Lee presides over the case. Jacob L.
Eaton, Esq., at Klein, DeNatale, Goldner, Cooper, Rosenlieb
& Kimball, LLP, in Bakersfield, Calif., represents the Debtor as
counsel. The Debtor tapped A&M Livestock Auction, Inc., to
auction livestock.
August B. Landis, the Acting U.S. Trustee for Region 17, appointed
seven creditors to serve in the Official Committee of Unsecured
Creditors. Ronald A. Clifford, Esq., at Blakley & Blakeley LLP,
represents the Official Committee of Unsecured Creditors as
counsel.
SOUTHERN MONTANA ELECTRIC: Trustee Blasts Chapter 7 Bid
-------------------------------------------------------
Kat Greene of BankruptcyLaw360 reported that the trustee and
noteholders of a bankrupt Montana power co-op accused its
creditors committee of seeking to force it into Chapter 7
liquidation too soon after it was paid $3.9 million from its
largest customer, saying the committee was using the co-op's
estate as a source of income.
The creditors committee in June filed to move Southern Montana
Electric Generation & Transmission Cooperative Inc. from Chapter
11 reorganization to Chapter 7 liquidation, according to motions
filed in Montana bankruptcy court, the report related.
About Southern Montana Electric
Based in Billings, Montana, Southern Montana Electric Generation
and Transmission Cooperative, Inc., was formed to serve five
other electric cooperatives. The city of Great Falls later joined
as the sixth member. Including the city, the co-op serves a
population of 122,000. In addition to Great Falls, the service
area includes suburbs of Billings, Montana.
Southern Montana filed for Chapter 11 bankruptcy (Bankr. D.
Mont. Case No. 11-62031) on Oct. 21, 2011. Southern Montana
estimated assets of $100 million to $500 million and estimated
debts of $100 million to $500 million. Timothy Gregori signed the
petition as general manager.
Malcolm H. Goodrich, Esq., at Goodrich Law Firm, P.C., in
Billings, Montana, serves as the Debtor's counsel.
After filing for reorganization in October, the co-op agreed to a
request for appointment of a Chapter 11 trustee. Lee A. Freeman
was appointed as the Chapter 11 trustee in December 2011. He is
represented by Joseph V. Womack, Esq., at Waller & Womack, and
John Cardinal Parks, Esq., Bart B. Burnett, Esq., Robert M.
Horowitz, Esq., and Kevin S. Neiman, Esq., at Horowitz & Burnett,
P.C.
Harold V. Dye, Esq., at Dye & Moe, P.L.L.P., in Missoula, Montana,
represents the Unsecured Creditors' Committee as counsel.
STOOL AND DINETTE: Voluntary Chapter 11 Case Summary
----------------------------------------------------
Debtor: Stool and Dinette Factory, Inc.
4848 East Cactus Road, Suite 900
Scottsdale, AZ 85254-4164
Bankruptcy Case No.: 13-12170
Chapter 11 Petition Date: July 16, 2013
Court: U.S. Bankruptcy Court
District of Arizona (Phoenix)
Judge: Eddward P. Ballinger, Jr.
Debtor's Counsel: James F. Kahn, Esq.
JAMES F. KAHN, P.C.
301 E. Bethany Home Road, #C-195
Phoenix, AZ 85012
Tel: (602) 266-1717
Fax: (602) 266-2484
E-mail: james.kahn@azbar.org
Estimated Assets: $100,001 to $500,000
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 Kenneth L. Felder, president.
STREAM GLOBAL: Moody's Retains 'B1' Corp. Family Rating
-------------------------------------------------------
Moody's Investors Service lowered the Speculative Grade Liquidity
rating of Stream Global Services, Inc. to SGL-4 from SGL-3. All
other ratings and stable outlook of the company are unchanged.
The downgrade of the Speculative Grade Liquidity rating to SGL-4
reflects the company's weak liquidity profile, due largely to the
increased risk of acceleration of maturity of the $125 million ABL
revolver to as early as June 2014, unless the $230 million secured
notes due October 1, 2014 are refinanced.
The ABL facility matures on the earlier of (1) 120 days prior to
the maturity date of the senior secured notes (including any
refinancing or extension of the notes) or (2) December 27, 2017.
The SGL-4 rating also considers the upcoming maturity of the 2014
secured notes in October 2014.
That said, given the company's solid operating performance,
Moody's expects the company to be able to refinance the secured
notes to preclude the ABL's maturity advance. However, the SGL
analysis treats all debt maturities coming due within the next 12
months as current cash obligations and does not assume capital
market access during this period. Consequently, Moody's believes
that the company's projected liquidity position (including balance
sheet cash and free cash flow) over the next twelve to eighteen
months does not afford enough capacity to repay both the
outstanding amounts under the ABL revolver and the 2014 secured
notes.
To the extent the company is able to successfully refinance the
2014 secured notes, Moody's would view this as a restoration of
the company's liquidity profile and would expect to raise the
company's liquidity rating.
The following rating was downgraded:
Speculative Grade Liquidity Rating to SGL-4 from SGL-3
The following ratings are unchanged:
Corporate family rating at B1
Probability of Default rating at B1-PD
$230 million senior secured notes due 2014 at B1 (LGD4, 57%)
The rating outlook is stable.
Ratings Rationale:
Stream's B1 corporate family rating reflects expectation that debt
to EBITDA (Moody's adjusted) will sustain below 3.5 times and
EBITDA less capex to interest will be close to 2.0 times over the
next 12 to 18 months based on EBITDA growth and some debt
reduction. The rating also considers Stream's demonstrated ability
to expand its EBITDA margins, expectations for further margin
improvement, its business position as a leading player among a
handful of top providers specializing in the customer relationship
management("CRM") segment of the highly fragmented business
process outsourcing ("BPO") industry, and long-standing
relationships with leading technology companies like Dell,
Hewlett-Packard and Microsoft. The rating, however, is constrained
by the company's relatively small scale within the fragmented
business process outsourcing industry, expectations for only
modest free cash flow generation and material customer
concentration. The rating also captures the potential for debt
funded bolt-on acquisitions as the company seeks to expand into
new geographies and industry verticals.
The stable outlook reflects Moody's expectation that Stream will
continue to improve its operating performance, maintain its
existing customer base, and win new business by leveraging its
increased scale and geographic reach. The stable outlook also
reflects Moody's expectation that the company will address the
refinancing of the October 2014 secured notes in a timely manner.
Moody's could upgrade Stream's ratings if the company reduces debt
to EBITDA on a sustained basis below 3.0 times, EBITDA less capex
to interest approaches 2.5 times, and free cash flow as a
percentage of debt increases above 8%. An upgrade would also
require that Stream successfully refinances the 2014 secured
notes, reduce its customer concentration and continue to expand
its top-line and operating margin through client expansion and
operating efficiencies.
Moody's could downgrade Stream's ratings if the company is unable
to successfully refinance its 2014 secured notes well in advance
of the maturity date. The ratings could also be lowered if the
company incurs customer losses leading to sustained margin
compression or if operating performance deteriorates such that
debt to EBITDA increases above 4.5 times and/or if EBITDA less
capex to interest expense falls below 1.5 times on a sustained
basis. A material debt-financed acquisition could also pressure
the ratings.
The principal methodology used in this rating/analysis was the
Global Business & Consumer Service Industry Rating Methodology
published in October 2010. Other methodologies used include Loss
Given Default for Speculative-Grade Non-Financial Companies in the
U.S., Canada and EMEA published in June 2009.
Stream Global Services, Inc., headquartered in Eagan, Minnesota,
is a global provider of CRM and other BPO services to companies in
the technology, telecommunications, software, networking and media
industries. The company reported revenues of approximately $890
million for the LTM period ended March 31, 2013. The company is
private and is owned by Ares Management LLC, Ayala Corporation and
Providence Equity Partners, LLC.
SYNAGRO TECHNOLOGIES: Can Seek Votes for Plan to Tweak $465MM Deal
------------------------------------------------------------------
Jamie Santo of BankruptcyLaw360 reported that a Delaware
bankruptcy judge signed off on Synagro Technologies Inc.'s
disclosure statement, allowing the biosolids recycling company to
solicit support for a plan that would rework its $465 million sale
to Swedish private equity firm EQT Holdings as a Chapter 11
reorganization.
According to the report, essentially a restructuring of the
original purchase agreement, the Chapter 11 plan recasts the
intended asset sale as a stock deal in which EQT would acquire the
stock of a reorganized Synagro instead, debtors attorney George N.
Panagakis told the court.
About Synagro
Synagro Technologies, Inc., based in Houston, Texas, is the
recycler of bio-solids and other organic residuals in the U.S. and
is one of the largest national companies focused exclusivity on
biosolids recycling, which has a market size of $2 billion. The
Company was formed in 1986, under the name RPM Marketing, Inc.
Synagro's corporate headquarters is currently located in Houston,
Texas but is in the process of being transferred to White Marsh,
Maryland. The Company also has offices in Lansdale, Pennsylvania,
Rayne, Louisiana, and Watertown, Connecticut.
Synagro Technologies and 29 affiliates sought Chapter 11
protection (Bankr. D. Del. Case no. 13-11041) on April 24, 2013.
Synagro was owned by The Carlyle Group at the time of the
bankruptcy filing. It was acquired in April 2007 by Carlyle in a
$741 million transaction.
Synagro is being advised by the law firm of Skadden Arps Slate
Meagher & Flom, along with financial adviser AlixPartners and
investment bankers Evercore Partners. Kurtzman Carson &
Consultants serves as notice and claims agent.
SYNOVUS FINANCIAL: S&P Raises Counterparty Credit Rating to 'BB-'
-----------------------------------------------------------------
Standard & Poor's Ratings Services said that it raised its
counterparty credit rating on Synovus Financial Corp. to 'BB-'
from 'B+'. At the same time, S&P raised its long-term rating on
Synovus Bank, its primary banking subsidiary, to 'BB+' from 'BB'
and affirmed the short-term rating at 'B'. The outlook on both
ratings is positive. S&P also raised its Synovus Financial Corp.
senior unsecured and subordinated debt ratings by one notch.
"The upgrade is primarily based on the company's recent
announcement that it plans to issue roughly $315 million in common
and preferred equity to partially fund the redemption of its
nearly $968 million in Troubled Asset Relief Program preferred
shares," said Standard & Poor's credit analyst Robert Hansen. "As
a result of the completed $185 million equity issuance and planned
$130 million preferred issuance, we project that Synovus' risk-
adjusted capital (RAC) ratio will rise to about 9% by the end of
2014. Although we view earnings capacity as moderate and foresee
a potentially higher payout ratio, the projected RAC ratio is well
within the 7% to 10% range that we typically deem as adequate. We
also view the lifting of the Memorandum of Understanding by
regulators in May 2013 positively. As such, we are raising our
assessment of Synovus' capital and earnings to "adequate" from
"moderate," as our criteria describe the terms. "
S&P expects that Synovus will remain profitable throughout 2013
and 2014, partly because of further improvement in loan
performance, but S&P expects the still-weak economy in the
southeast to constrain profits. Net income available to common
shareholders increased to $30.7 million for the second quarter of
2013, compared with $14.8 million for the first quarter of 2013.
S&P also thinks profitability will remain somewhat dependent on
continued reserve releases and further cost reductions. S&P
projects that the net interest margin could decline somewhat
throughout 2013 after falling by four basis points from the first
quarter to 3.39% in the second quarter of 2013.
"We think asset quality has improved in recent years but remains
weak. Specifically, adjusted nonperforming assets (NPAs) to
customer loans and other real estate owned have declined
substantially in recent quarters to just more than 6%, by our
calculation, but they remain relatively high compared with most
other regional banks that we rate. The annualized net charge-off
(NCO) ratio was 0.61% in the second quarter, down from 1.18% in
the previous quarter and 1.99% in the second quarter of 2012. We
expect loan performance to improve further throughout 2013 and
2014 given lower criticized and classified loan balances, but we
think NCOs could be somewhat volatile. In addition, large
commercial real estate and construction loan concentrations, as
well as the bank's geographic concentration in the southeast,
weigh heavily on our risk position assessment," S&P added.
"The positive outlook is largely based on our view that the
company could further improve its financial position. We expect
loan performance to improve over the next year, and a faster-than-
expected improvement could lead us to raise the rating.
Specifically, we would view a decline in NPAs, including
restructured loans, to less than 5% of total loans and sustainably
lower NCOs positively in our risk position assessment. However,
substantial commercial real estate and construction loan exposures
would likely temper any improvement in our risk assessment. In
addition, we are unlikely to revise our business position
assessment substantially higher given our belief that the company
still faces challenges, including strong competition and
concentration issues," S&P noted.
TELEFLEX INC: S&P Assigns 'BB-' Rating to Subordinated Debt
-----------------------------------------------------------
Standard & Poor's Ratings Services said it assigned a 'BBB-'
issue-level rating and '1' recovery rating to Teleflex Inc.'s
$850 million senior secured revolving credit facility. The '1'
recovery rating reflects S&P's expectation of very high recovery
(90%-100%) of principal in the event of a default. At close, S&P
expects about $380 million on the facility to be drawn to repay
the company's outstanding term loan. S&P rates the company's
subordinated debt 'BB-' with a recovery rating of '5', indicating
prospects of modest recovery (10%-30%) of principal in the event
of a default. The corporate credit rating is 'BB' with a stable
outlook.
Teleflex manufactures and supplies medical devices for critical
care and surgical applications, segmented in four areas: critical
care (67% of 2012 revenues), surgical (19%), cardiac care (5%),
and original equipment manufacturers (OEMs), and development
services (9%). The company's "fair" business risk profile
reflects some concentration in anti-infective, catheter-based
technologies, and competitive threats, which moderate product and
geographic diversity and a recurring revenue stream of consumables
products offset. Adjusted debt to EBITDA of 3.6x and funds from
operations to adjusted debt of about 18% for the 12 months ended
March 31, 2013, are consistent with a "significant" financial risk
profile.
RATINGS LIST
Teleflex Inc.
Corporate Credit Rating BB/Stable/--
New Rating
Teleflex Inc.
$850M snr scrd revolving BBB-
credit facility
Recovery Rating 1
THOR INDUSTRIES: Chapter 11 Reorganization Case Dismissed
---------------------------------------------------------
The Hon. Marcia Phillips Parsons of the U.S. Bankruptcy Court for
the Eastern District of Tennessee dismissed the Chapter 11 case of
Thor Industries, LLC, pursuant to a June 26 order.
As reported by the Troubled Company Reporter on June 4, 2013, the
U.S. Trustee of Region 8, Samuel K. Crocker, sought dismissal of
the Debtor's Chapter 11 case. Patricia C. Foster, counsel for the
U.S. Trustee, said the principal assets in the case are lakeside
lots and a marina. No Plan of Reorganization has been proposed.
The Debtor has made several attempts to obtain Court approval of
the sale of the lots but the motions have consistently been
opposed successfully by the Debtor's primary lender, Tennessee
State Bank. TSB obtained relief from the automatic stay by orders
entered on February 27, 2013, and has subsequently taken
possession of the Debtor's real property.
Ms. Foster also said the Debtor is delinquent in the payment of
U.S. Trustee fees in the amount of $1,301.
About Thor Industries
Lake City, Tennessee-based Thor Industries, LLC, filed a Chapter
11 petition (Bankr. E.D. Tenn. Case No. 12-50625) in Greenville on
March 30, 2012. The Debtor disclosed $11.97 million in assets and
$10.0 million in liabilities as of the Chapter 11 filing. The
Debtor owns the property in Mountain Lake Marina & RV Resort in
Campground Road, Lake City, Tennessee, worth $11 million and
securing an $8.52 million debt. The Debtor also owns a property
Hickory Bluff Marina, in Camden County, Georgia, worth $875,000
and securing a $375,000 loan.
Judge Marcia Phillips Parsons oversees the case. Dean B. Farmer,
Esq., at Hodges, Doughty & Carson PLLC represents the Debtor in
its restructuring efforts. The petition was signed by R. Steven
Williams, Sr., chief manager.
Samuel K. Crocker, the U.S. Trustee for Region 8, was unable to
form a committee of unsecured creditors because there was an
insufficient number of unsecured creditors interested in forming a
committee.
TLO LLC: Genovese Joblove Okayed as Creditors Committee Counsel
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Florida
authorized the Official Committee of Unsecured Creditors in the
Chapter 11 case of TLO, LLC, to retain Paul J. Battista, Esq., and
the law firm of Genovese, Joblove & Battista, P.A., as its
counsel.
As reported by the Troubled Company Reporter on July 17, 2013, in
addition to acting as primary spokesman for the Committee, GJB
will provide, among others, these services:
a. advise the Committee with respect to its rights, powers, and
duties in this Chapter 11 case;
b. assist and advise the Committee in its consultations with
the Debtor relative to the administration of this Chapter 11
case;
c. assist the Committee in analyzing the claims of the Debtor's
creditors and in negotiation with such creditors; and
d. assist with the Committee's investigation of the acts,
conduct, assets, liabilities, and financial condition of the
Debtor and of the operation of the Debtor's business.
GJB's professionals bill at these hourly rates:
Paul J. Battista, Esq., Partner $595
Mariaelena Gayo-Guitian, Esq., Partner $435
Associate Attorneys $250-$350
Legal Assistants/Paralegals $75-$200
To the best of the Committee's knowledge, GJB is "disinterested"
as such term is defined in Section 101(14) of the Bankruptcy Code.
The Unsecured Creditors Committee presently consists of:
1. James Griggs, vice-president-finance
Equifax Information Services LLC
1550 Peachtree Street
Atlanta, GA 30309
Tel: (404) 885-8964
Fax: (404) 885-8800
E-mail: jim.griggs@equifax.com
2. Christopher Cavalier
Experian North America
475 Anton Blvd.
Costa Mesa, CA 92629
Tel: (714) 830-5840
Fax: (972) 370-5721
E-mail: christopher.cavalier@experian.com
3. Terry Kilburn, chief operation officer
Tracers Information Specialists, Inc.
15470 Flight Path Drive
Brooksville, FL 34604
Tel: (877) 723-2689
Fax: (877) 723-2691
E-mail: terry@tracersinfo.com
4. Steven D. Sass
Dun & Bradstreet
307 International Circle, Suite 270
Hunt Valley, MD 21030
Tel: (410) 773-4040
Fax: (410) 773-4057
E-mail: steven.sass@rms-iqor.com
5. Charles Simpson, bankruptcy manager
Dell Financial Services, LLC
2300 Greenlawn Blvd., MS RR3-52
Round Rock, Texas 78682
Tel: (512) 728-7855
Fax: (512) 723-6859
E-mail: charles_simpson@dell.com
6. Gary Steck
LSSiDATA
One Sentry Parkway, Suite 7000
Blue Bell, PA 19422
Tel: (610) 276-4327
E-mail: gsteck@lssidata.com
7. Daniel Merchant
SMA Communications
6901 S.W. 18th Street, Suite E202
Boca Raton, FL 33433
Tel: (561) 367-5129 extn. 106
Fax: (561) 910-1530
E-mail: dmerchant@smacomm.com
James Griggs has been appointed as temporary chairperson of the
Committee.
In a separate court filing, Mary N. Price, as personal
representative of the estate of William H. Price, and Green Cook
Management LLC have withdrawn their motion to substitute the Price
Estate and Green Cook Management to the Creditor's Committee or,
alternatively, to add them as members.
About TLO LLC
TLO LLC, a provider of risk-mitigation services, filed a petition
for Chapter 11 reorganization (Bankr. S.D. Fla. Case No.
13-bk20853) on May 9, 2013, in West Palm Beach, Florida, near the
company's headquarters in Boca Raton. The petition was signed by
E. Desiree Asher as CEO. Judge Paul G. Hyman, Jr., presides over
the case. Robert C Furr, Esq., and Alvin S. Goldstein, Esq. at
Furr & Cohen serve as the Debtor's counsel.
The Debtor disclosed assets of $46.6 million and liabilities of
$109.9 million, including $93.4 million in secured claims. The
principal lender is Technology Investors Inc., owed $89 million.
TII is owned by the estate of Hank Asher, the company's primary
owner who died this year. There is $4.6 million secured by
computer equipment.
Paul J. Battista, Esq., and Mariaelena Gayo-Guitian, Esq., at
Genovese, Joblove & Battista, P.A., represent the Official
Committee of Unsecured Creditors as counsel.
TLO LLC: Committee Taps Hire GlassRatner as Financial Advisor
-------------------------------------------------------------
The Official Committee of Unsecured Creditors in the Chapter 11
case of TLO, LLC, asks the Bankruptcy Court for permission to
retain Thomas Santoro and GlassRatner Advisory & Capital Group,
LLC as its financial advisors.
Mr. Santoro and GlassRatner will, among other things:
a. assist and advise the Committee with respect to the
Debtor's proposed disposition of assets and/or the sale of
business units;
b. assist in the review of financial information distributed
by the Debtor to creditors and others, including, but not
limited to, cash flow projections, budgets, cash receipts
and disbursements, analyses of various asset and liability
accounts, analysis of intercompany accounts and transactions
and analyses of proposed transactions for which Court
approval is sought; and
c. assist in the review of the Debtor's corporate ownership
and capital structure as it impacts potential claims or
various entities and creditor recoveries.
The hourly rates for GlassRatner personnel are:
Mr. Santoro $425
William King $350
Other Professionals $150 - $295
To the best of the Committee's knowledge, GlassRatner does not
hold or represent an interest adverse to the estates with respect
to the matter GlassRatner will be employed.
About TLO LLC
TLO LLC, a provider of risk-mitigation services, filed a petition
for Chapter 11 reorganization (Bankr. S.D. Fla. Case No.
13-bk20853) on May 9, 2013, in West Palm Beach, Florida, near the
company's headquarters in Boca Raton. The petition was signed by
E. Desiree Asher as CEO. Judge Paul G. Hyman, Jr., presides over
the case. Robert C Furr, Esq., and Alvin S. Goldstein, Esq. at
Furr & Cohen serve as the Debtor's counsel.
The Debtor disclosed assets of $46.6 million and liabilities of
$109.9 million, including $93.4 million in secured claims. The
principal lender is Technology Investors Inc., owed $89 million.
TII is owned by the estate of Hank Asher, the company's primary
owner who died this year. There is $4.6 million secured by
computer equipment.
Paul J. Battista, Esq., and Mariaelena Gayo-Guitian, Esq., at
Genovese, Joblove & Battista, P.A., represent the Official
Committee of Unsecured Creditors as counsel. GlassRatner Advisory
& Capital Group, LLC, serves as the Committee's financial
advisors.
TLO LLC: Furr and Cohen Approved as Bankruptcy Counsel
------------------------------------------------------
The Bankruptcy Court authorized, on a final basis, TLO LLC to
employ Robert C. Furr, Esq., and The Law Firm of Furr and Cohen,
P.A., as counsel.
As reported by the Troubled Company Reporter on May 29, 2013, the
firm will, among other things, give advice to the Debtor with
respect to its powers and duties as debtor-in-possession and will
represent the Debtor in negotiations with creditors in the
preparation of a plan.
Neither the firm nor its attorneys represent any interest adverse
to the Debtor.
The firm will apply for compensation and reimbursement of costs at
its ordinary rates and charges. There are no prepetition fees
owed to the firm.
In a separate filing, the Court also authorized the employment of
James F. Carroll, Esq., as special counsel.
About TLO LLC
TLO LLC, a provider of risk-mitigation services, filed a petition
for Chapter 11 reorganization (Bankr. S.D. Fla. Case No.
13-bk20853) on May 9, 2013, in West Palm Beach, Florida, near the
company's headquarters in Boca Raton. The petition was signed by
E. Desiree Asher as CEO. Judge Paul G. Hyman, Jr., presides over
the case. Robert C Furr, Esq., and Alvin S. Goldstein, Esq. at
Furr & Cohen serve as the Debtor's counsel.
The Debtor disclosed assets of $46.6 million and liabilities of
$109.9 million, including $93.4 million in secured claims. The
principal lender is Technology Investors Inc., owed $89 million.
TII is owned by the estate of Hank Asher, the company's primary
owner who died this year. There is $4.6 million secured by
computer equipment.
Paul J. Battista, Esq., and Mariaelena Gayo-Guitian, Esq., at
Genovese, Joblove & Battista, P.A., represent the Official
Committee of Unsecured Creditors as counsel. GlassRatner Advisory
& Capital Group, LLC, serves as the Committee's financial
advisors.
TLO LLC: Wants Founder's $40MM Pruco Life Insurance Policy
----------------------------------------------------------
Ama Sarfo of BankruptcyLaw360 reported that bankrupt data systems
provider TLO LLC has sued a Prudential Insurance Co. of America
unit in Florida federal court, alleging the insurer is refusing to
pay TLO benefits from a $40 million life insurance policy that was
held by its deceased founder, Hank Asher.
According to the report, TLO says Pruco Life Insurance Co. sought
to rescind its obligation by saying that Asher's life insurance
application failed to disclose medical conditions that would have
blocked him from receiving the policy, such as major depressive
disorder, histrionic disorder and sleep apnea.
The case is TLO, LLC v. Pruco Life Insurance Company, Case No.
9:13-cv-80674 (S.D. Fla.) before Judge Kenneth L. Ryskamp.
About TLO LLC
TLO LLC, a provider of risk-mitigation services, filed a petition
for Chapter 11 reorganization (Bankr. S.D. Fla. Case No.
13-bk20853) on May 9, 2013, in West Palm Beach, Florida, near the
company's headquarters in Boca Raton. The petition was signed by
E. Desiree Asher as CEO. Judge Paul G. Hyman, Jr., presides over
the case. Robert C Furr, Esq., and Alvin S. Goldstein, Esq. at
Furr & Cohen serve as the Debtor's counsel.
The Debtor disclosed assets of $46.6 million and liabilities of
$109.9 million, including $93.4 million in secured claims. The
principal lender is Technology Investors Inc., owed $89 million.
TII is owned by the estate of Hank Asher, the company's primary
owner who died this year. There is $4.6 million secured by
computer equipment.
Paul J. Battista, Esq., and Mariaelena Gayo-Guitian, Esq., at
Genovese, Joblove & Battista, P.A., represent the Official
Committee of Unsecured Creditors as counsel.
TMT GROUP: Dodges Creditors' Bad Faith Complaints
-------------------------------------------------
Jeremy Heallen of BankruptcyLaw360 reported that a Texas
bankruptcy judge said that TMT Group could pursue Ch. 11
proceedings and charted the course for the global shipping company
to access cash collateral, sinking a complaint by creditors that
the case had been filed in bad faith.
According to the report, U.S. District Judge Marvin Isgur ruled
that all but two of TMT's 23 affiliates seeking bankruptcy
protection properly filed Ch. 11 petitions that landed in his
court and that he would consider granting the shipper's request to
spend cash held in frozen bank accounts.
About TMT Group
Known in the industry as TMT Group, TMT USA Shipmanagement LLC and
its affiliates own 17 vessels. Vessels range in size from
approximately 27,000 dead weight tons (dwt) to approximately
320,000 dwt.
TMT USA and 22 affiliates, including C. Ladybug Corporation,
sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 13-
33740) in Houston, Texas, on June 20, 2013 after lenders seized
seven vessels.
TMT has tapped attorneys from Bracewell & Giuliani LLP and
AlixPartners as financial advisors.
On a consolidated basis, the Debtors have $1.52 billion in assets
and $1.46 billion in liabilities.
TMT already filed a lawsuit in U.S. bankruptcy court aimed at
forcing creditors to release the vessels so they can return to
generating income.
TOMSTEN INC: Faegre Baker Approved as Committee Counsel
-------------------------------------------------------
The U.S. Bankruptcy Court for the District of Minnesota has
authorized the Official Committee of Unsecured Creditors in the
Chapter 11 case of Tomsten, Inc., to retain Faegre Baker Daniels
LLP as its counsel, retroactive to May 13, 2013.
As reported by the Troubled Company Reporter on June 20, 2013,
Faegre Baker will, among other things, assist the Committee in its
investigation of the acts, conduct, assets, liabilities and
financial condition of the Debtors, the operation of the Debtor's
business and any other matter relevant to this case, at these
hourly rates:
a. Stephen Mertz, Partner $605
b. Jay Jaffe, Partner $550
c. Wendy Ponader, Counsel $435
d. Colin Dougherty, Associate $315
e. Kayla Britton, Associate $260
f. Sarah Herendeen, Paralegal $230
Stephen M. Mertz, Esq., a partner at Faegre Baker, attests to the
Court that the firm is a "disinterested person" as that term is
defined in Section 101(14) of the Bankruptcy Code.
About Tomsten
Hennepin, Minnesota-based Tomsten, Inc., doing business as
Archiver's, filed a bare-bones Chapter 11 petition (Bankr. D.
Minn. Case No. 13-42153) in Minneapolis on April 29, 2013. The
Debtor estimated assets of at least $10 million and liabilities of
at least $1 million as of the Chapter 11 filing. The Debtor has
tapped and Michael L. Meyer, Esq., and the firm of Ravich Meyer
Kirkman McGrath Nauman & Tansey as counsel. Judge Gregory F.
Kishel presides over the case.
The Official Unsecured Creditors' Committee is represented by Jay
Jaffe, Esq., at Faegre Baker Daniels LLP.
TOMSTEN INC: M Squared Approved as Marketing Consultant
-------------------------------------------------------
The U.S. Bankruptcy Court for the District of Minnesota has
authorized Tomsten, Inc., to employ M Squared Group, Inc., as
marketing consultant, providing services including marketing
management and tactical support.
The hourly rates for M Squared employees range from $165 to $250.
The engagement is expected to extend from June through November
2013 at a total estimated cost of $132,500. That cost is
justified not only by the value of the services to be rendered by
M Squared, but also by the fact that the Debtor has lost its vice
president of marketing and another key employee in that
department.
M Squared has received no compensation from any party in
connection with the case except the payment of prior invoices.
To the best of the Debtor's knowledge, M Squared is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
About Tomsten
Hennepin, Minnesota-based Tomsten, Inc., doing business as
Archiver's, filed a bare-bones Chapter 11 petition (Bankr. D.
Minn. Case No. 13-42153) in Minneapolis on April 29, 2013. The
Debtor estimated assets of at least $10 million and liabilities of
at least $1 million as of the Chapter 11 filing. The Debtor has
tapped and Michael L. Meyer, Esq., and the firm of Ravich Meyer
Kirkman McGrath Nauman & Tansey as counsel. Judge Gregory F.
Kishel presides over the case.
The Official Unsecured Creditors' Committee is represented by Jay
Jaffe, Esq., at Faegre Baker Daniels LLP.
TU DEVELOPMENT: Case Summary & Unsecured Creditor
-------------------------------------------------
Debtor: Tu Development Corp.
Galeria Paseos, Suite 112 227
Gran Bulevar Paseos
San Juan, PR 00926
Bankruptcy Case No.: 13-05776
Chapter 11 Petition Date: July 16, 2013
Court: U.S. Bankruptcy Court
District of Puerto Rico (Old San Juan)
Judge: Brian K. Tester
Debtor's Counsel: Charles Alfred Cuprill, Esq.
CHARLES A. CURPILL, PSC LAW OFFICES
356 Calle Fortaleza, Second Floor
San Juan, PR 00901
Tel: (787) 977-0515
E-mail: cacuprill@cuprill.com
Scheduled Assets: $0
Scheduled Liabilities: $12,794,171
The petition was signed by Gerard Gil Bonard, president.
The Company's list of its largest unsecured creditors filed with
the petition contains only one entry:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Banco Popular De Puerto Rico -- $12,794,171
P.O. Box 362708
San Juan, PR 00936-2708
UNITEK GLOBAL: Extends Forbearance Agreement with Term Lenders
--------------------------------------------------------------
UniTek Global Services, Inc. on July 18 disclosed that it has
entered into a further amendment to its previously-disclosed
Forbearance Agreement with the Company's lenders under its Term
Credit Agreement, and that it has also agreed with the Term
Lenders to negotiate definitive loan documentation and enter into
amendments to the Term Credit Agreement to waive existing defaults
and revise loan covenants.
The standstill period contained in the original April 30, 2013
Forbearance Agreement has been further extended, through July 26,
2013. The Company and the Term Lenders have agreed to prepare and
execute, prior to that date, an amendment to the Term Credit
Agreement upon terms and conditions set forth in a term sheet
attached to the Forbearance Amendment. The Term Amendment will
contain a waiver by the Term Lenders of all existing defaults and
will also include revised financial covenants. The amended term
loans will continue to mature in 2018 and will bear monthly
interest payable in cash at a rate equal either to LIBOR (with a
1.5% floor) plus 9.50% or the prime rate plus 8.50%, plus, in
either case, an amount to be added to the principal balance of the
term loan at an annual rate equal to 4.0% of the outstanding
balance. The lenders will receive warrants, exercisable at $0.01
per share, for shares of the Company's common stock equal to 19.9%
of the shares outstanding prior to the date of the Term Amendment.
The lenders will receive a waiver and amendment fee, to be added
to the principal balance of the term loan, equal to 2.0% of the
outstanding loan balance, of which 0.50% has accrued upon the
signing of the Forbearance Amendment.
The term loan is prepayable by the Company at any time without
penalty. The Term Amendment is subject to customary closing
conditions.
"We appreciate that our Term Lenders are willing to work with us
and continue to support our Company," said Rocky Romanella, Chief
Executive Officer of UniTek Global Services. "This agreement
represents another important step in our efforts to return the
focus of the entire organization to executing our growth strategy.
We have made significant progress on our financing issues and will
continue to work toward the completion of our audit and the
remaining key initiatives."
About UniTek Global Services
UniTek Global Services, Inc., based in Blue Bell, Pennsylvania,
provides fulfillment and infrastructure services to media and
telecommunication companies in the United States and Canada.
As reported by the TCR on June 11, 2013, Standard & Poor's Ratings
Services lowered its corporate credit rating on Blue Bell, Pa.-
based UniTek Global Services Inc. to 'D' from 'CCC'. "The
downgrade follows UniTek's announcement that it did not make
a scheduled interest payment on May 29, 2013, on its senior
secured term loan due 2018, which we consider to be a default
under our timeliness of payments criteria," said Standard & Poor's
credit analyst Michael Weinstein.
In the June 11, 2013, edition of the TCR, Moody's Investors
Service lowered UniTek Global Services, Inc.'s probability of
default and corporate family ratings to Ca-PD/LD and Ca,
respectively. The Ca corporate family rating reflects UniTek's
missed interest payment on the term loan which is considered a
default under Moody's definition, the heightened possibility of
another default event, continued delays in the filing of restated
financials including the last two audits, management turnover, the
potential loss of the company's largest customer and other
business and legal risks stemming from issues at the company's
Pinnacle subsidiary.
UPH HOLDINGS: Committee Taps QSI Consulting as Financial Advisor
----------------------------------------------------------------
The Official Committee of Unsecured Creditors in the Chapter 11
cases of UPH Holdings, Inc., et al., asks the U.S. Bankruptcy
Court for the Western District of Texas for permission to retain
QSI Consulting, Inc., as its financial advisor.
QSI Consulting will, among other things:
a) prepare an initial written assessment of the Debtors'
inter-carrier receivables and payables;
b) perform a more detailed analysis of the Carrier Compensation
and billing issues or particular carrier accounts if
requested by the Committee; and
c) advise the Committee on carrier compensation and billing
issues that may arise during the Debtors' Chapter 11 cases,
including in connection with the sale process, any proposed
chapter 11 plan for the Debtors or other disposition of
these cases or actions to enforce, collect, settle or setoff
inter-carrier claims.
The hourly rates the QSI professionals who will render services to
the Committee are:
Michael Starkey $280
August Ankum, Ph.D. $280
Warren Fischer, CPA $250
James Webber $250
Support $125 - $180
If a QSI professional is required to appear or testify before this
Court or other forum, the rates above will be increased by 20
percent for all time spent testifying and preparing to testify.
Non-working travel time will be billed at one-half the normal
hourly rate.
To the best of the Committee's knowledge, QSI Consulting is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
About UPH Holdings Inc.
UPH Holdings Inc. and several affiliates filed Chapter 11
petitions (Bankr. W.D. Tex. Lead Case No. 13-bk-10570) on
March 28, 2013. Judge Tony M. Davis oversees the case. Jennifer
Francine Wertz, Esq., and Patricia Baron Tomasco, Esq., at Jackson
Walker, L.L.P., serve as the Debtors' counsel. Q Advisors, LLC
serves as financial advisors. UPH Holdings disclosed $26,917,341
in assets and $19,705,805 in liabilities as of the Chapter 11
filing.
Other affiliates that sought Chapter 11 protection are: Pac-West
Telecomm, Inc.; Tex-Link Communications, Inc.; Unipoint Holdings,
Inc.; Unipoint Enhanced Services, Inc.; Unipoint Services, Inc.;
Nwire LLC; and Peering Partners Communications LLC (Case Nos.
13-10571 to 13-10577).
Judy A. Robbins, the United States Trustee for Region 7, has
appointed a five-member Official Committee of Unsecured Creditors
in the Chapter 11 cases of UPH Holdings, Inc., Pac-West Telecomm
Inc., and their affiliated debtors.
The Committee tapped Kelley Drye & Warren LLP as its counsel, and
QSI Consulting, Inc. as its financial advisor.
UPH HOLDINGS: Creditors Committee Taps Kelley Drye as Counsel
-------------------------------------------------------------
The Official Committee of Unsecured Creditors in the Chapter 11
cases of UPH Holdings, Inc., et al., asks the U.S. Bankruptcy
Court for the Western District of Texas for permission to retain
Kelley Drye & Warren LLP as its counsel.
Craig A. Wolfe, a partner at Kelley Drye, tells the Court that
Kelley Drye's standard hourly rates for 2013 are:
Partners $550 - $875
Counsel $415 - $645
Associates $325 - $575
Paraprofessionals $200 - $275
By special agreement with the Committee, Kelley Drye has agreed to
(i) cap the rates of the three Kelley Drye bankruptcy attorneys
primarily assigned to work on these cases (Mr. Wolfe at $585/hour,
Benjamin Blaustein at $485/hour and Catherine L. Thompson at
$295/hour); and (ii) reduce the rates of all of its other
attorneys by 10%, subject to a blended hourly rate not to exceed
$450/hour. Kelley Drye also agreed not to bill the estates for
non-working travel time. It may be necessary for Kelley Drye
professionals other than the three attorneys primarily assigned to
the cases to provide services to the Committee as needed.
To the best of the Committee's knowledge, neither Kelley Drye nor
any of its attorneys represent any interest adverse to the
Committee in the matters on which they are to be retained.
About UPH Holdings Inc.
UPH Holdings Inc. and several affiliates filed Chapter 11
petitions (Bankr. W.D. Tex. Lead Case No. 13-bk-10570) on
March 28, 2013. Judge Tony M. Davis oversees the case. Jennifer
Francine Wertz, Esq., and Patricia Baron Tomasco, Esq., at Jackson
Walker, L.L.P., serve as the Debtors' counsel. Q Advisors, LLC
serves as financial advisors. UPH Holdings disclosed $26,917,341
in assets and $19,705,805 in liabilities as of the Chapter 11
filing.
Other affiliates that sought Chapter 11 protection are: Pac-West
Telecomm, Inc.; Tex-Link Communications, Inc.; Unipoint Holdings,
Inc.; Unipoint Enhanced Services, Inc.; Unipoint Services, Inc.;
Nwire LLC; and Peering Partners Communications LLC (Case Nos.
13-10571 to 13-10577).
Judy A. Robbins, the United States Trustee for Region 7, has
appointed a five-member Official Committee of Unsecured Creditors
in the Chapter 11 cases of UPH Holdings, Inc., Pac-West Telecomm
Inc., and their affiliated debtors.
The Committee tapped Kelley Drye & Warren LLP as its counsel, and
QSI Consulting, Inc. as its financial advisor.
USA BROADMOOR: Files Schedules of Assets and Liabilities
--------------------------------------------------------
USA Broadmoor, LLC, filed with the U.S. Bankruptcy Court for the
Middle District of Florida Tampa Division its schedules of assets
and liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $10,753,600
B. Personal Property $363,491
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $10,755,951
E. Creditors Holding
Unsecured Priority
Claims $5,028
F. Creditors Holding
Unsecured Non-priority
Claims $360,394
----------- -----------
TOTAL $11,117,091 $11,121,374
A copy of the schedules is available for free at
http://bankrupt.com/misc/USA_BROADMOOR_sal_amended.pdf
About USA Broadmoor
USA Broadmoor, LLC, filed a Chapter 11 petition (Bankr. M.D. Fla.
Case No. 13-04880) on April 16, 2013. The petition was signed by
Hugh L. Caraway, chief executive officer of Internacional Realty,
Inc., member. The Debtor estimated assets and debts of at least
$10 million, respectively. Judge Michael G. Williamson presides
over the case. The Debtor is represented Stichter Riedel Blain &
Prosser, P.A.
VAIL LAKE: Files Schedules of Assets and Liabilities
----------------------------------------------------
Vail Lake Rancho California, LLC, filed with the U.S. Bankruptcy
Court for the Southern District of California its schedules of
assets and liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $90,032,500
B. Personal Property $500
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $3,740,363
E. Creditors Holding
Unsecured Priority
Claims $0
F. Creditors Holding
Unsecured Non-priority
Claims $2,788,761
----------- -----------
TOTAL $90,033,000 $6,529,124
A copy of the schedules is available for free at
http://bankrupt.com/misc/VAIL_LAKE_sal.pdf
About Vail Lake
Vail Lake Rancho California, LLC and its affiliates own the
California campground Vail Lake Resort. Vail Lake is a large
reservoir in western Riverside County, California, located on
Temecula Creek in the Santa Margarita River watershed,
approximately 15 miles east of Temecula, California. Properties
cover approximately 9,000 acres and have an estimated water
storage capacity of approximately 51,000 acre-feet.
On Dec. 26, 2012, creditors of Vail Lake filed an involuntary
Chapter 11 petition (Bankr. S.D. Cal. Case No. 12-16684) for Vail
Lake. In a filing on June 6, 2013, the Debtor said it consents to
the entry of an order for relief and does not contest the
involuntary Chapter 11 petition.
On June 5, 2013, the company sent 5 related entities -- Vail Lake
USA, LLC ("VLU"), Vail Lake Village & Resort, LLC ("VLRC"), Vail
Lake Groves, LLC, Agua Tibia Ranch, LLC, and Outdoor Recreational
Management, LLC -- to Chapter 11 bankruptcy.
The new debtors have sought and obtained an order for joint
administration of their Chapter 11 cases with Vail Lake Rancho
(Case No. 12-16684).
The Debtors are represented by attorneys at Cooley LLP and
Phillips, Haskett & Ingwalson, A.P.C.
According to the Chapter 11 petition, the Debtors' consolidated
assets, as of May 31, 2013, total approximately $291,016,000 and
liabilities total $52,796,846.
VALENCE TECHNOLOGY: Employment of KPMG and Roth Capital Extended
----------------------------------------------------------------
The Hon. Craig A. Gargotta of the Bankruptcy Court for the Western
District of Texas authorized Valence Technology, Inc., to extend
the terms of employment of KPMG Corporate Finance, LLC and Roth
Capital Partners, LLC as investment bankers to the Debtor.
According to the Debtor, both KPMGCF and Roth have been working
diligently with the Debtor to obtain exit financing. The terms of
both the KPMGCF and Roth letter agreements are time limited and
have expired as of May 6, 2013.
The agreement will commence as of the date of the agreement and
will continue until the first to occur of (i) confirmation of a
chapter 11 plan of reorganization by the Debtor; or (ii)
expiration of thirty days after either party gives written notice
of termination to the other party.
All terms previously agreed to by KPMGCF, Roth and the Debtor will
remain in effect.
As reported by the Troubled Company Reporter on April 10, 2013,
the firms are expected to:
a) familiarize themselves with the financial condition and
business of the Debtor and advise and assist the Debtor in
considering the desirability of effecting a Private
Placement;
b) assist the Debtor in preparing a management presentation
describing the Debtor, its operations, its historical
performance and future prospects;
c) assist the Debtor in identifying and contacting selected
potential investors in the Debtor, and deliver the
Memorandum or other data to such parties;
d) assist the Debtor in arranging for potential investors to
conduct investigations in connection with their potential
investment in the Debtor; and
e) assist the Debtor in negotiating the financial aspects of
any proposed Private Placement.
As compensation for the services to be provided by Roth and KPMG
CF, the Debtor agrees to pay each firm:
a) a nonrefundable engagement fee of $15,000, payable promptly
upon approval by the Bankruptcy Court;
b) an initial retainer fee of $15,000, payable in advance one
month after the execution of the Agreement; and
c) an additional fee in an amount equal to 2.5% of the Private
Placement Value less the amount of the previously paid
Engagement Fee and Retainer Fee, but in no event less than a
minimum success fee of $500,000.
The Debtor agrees to indemnify or provide contribution to KPMGCF
and Roth from and against any and all losses, claims, damages,
expenses and liabilities related to or arising out of activities
performed on the Debtor's behalf.
To the best of Debtor's knowledge and information, KPMGCF and all
of its employees, and Roth and all of its employees are
"disinterested persons" as that term is defined in section 101(14)
of the Bankruptcy Code.
About Valence Technology
Valence Technology, Inc., filed a Chapter 11 petition (Bankr. W.D.
Tex. Case No. 12-11580) on July 12, 2012, in its home-town in
Austin. Founded in 1989, Valence develops lithium iron magnesium
phosphate rechargeable batteries. Its products are used in hybrid
and electric vehicles, as well as hybrid boats and Segway personal
transporters.
The Debtor disclosed debt of $82.6 million and assets of
$31.5 million as of March 31, 2012. The Debtor disclosed
$24,858,325 in assets and $78,520,831 in liabilities as of the
Chapter 11 filing. Chairman Carl E. Berg and related entities own
44.4% of the shares. ClearBridge Advisors LLC owns 5.5%.
Judge Craig A. Gargotta presides over the case. The Company is
being advised by Sabrina L. Streusand at Streusand, Landon &
Ozburn, LLP with respect to bankruptcy matters. The petition was
signed by Robert Kanode, CEO.
On Aug. 8, 2012, the U.S. Trustee for Region 7 appointed five
creditors to serve on the Official Committee of Unsecured
Creditors of the Debtor. Brinkman Portillo Ronk, PC, serves as
its counsel.
WEST AIRPORT: July 24 Hearing on First-Citizens' Dismissal Motion
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Florida has
scheduled a hearing for July 24, 2013, at 3:00 p.m. on the motion
of First-Citizens Bank & Trust Company for the entry of an order
dismissing the Chapter 11 case of West Palms Business Park, LLC.
The Bank is the holder of a loan secured by a first priority lien
on substantially all of the assets of the Debtor, including the
real property consisting of industrial condominiums located at
2355-2385 N.W. 70th Avenue in Miami, Florida.
According to the Bank, the Debtor's case was filed less than two
hours before a hearing that was scheduled in state court for entry
of an Agreed Summary Judgment of Foreclosure pursuant to the
parties' written stipulation in the case styled, First-Citizens
Bank & Trust Co. v. West Airport Palms Business Park, LLC, et al.,
Case No. 10-39220 CA 22. Thus, the Debtor's Chapter 11 case
represents the Debtor's attempt to avoid its own stipulation,
avoid foreclosure and avoid performance of its obligations
relating to a $12 million loan made by First-Citizens Bank's
predecessor-in-interest in 2007.
The Debtor, the Bank says, is a single-purpose entity whose sole
purpose is to own the Real Property, which is comprised of
industrial condominiums near Miami International Airport and
serves as the collateral securing the Bank's loan.
According to the Bank, all of the factors for bad-faith filing are
present in the Debtor's case. "This is a two-party dispute which
is on the verge of resolution in a state court foreclosure
proceeding. The Debtor has few employees and no assets other than
the Real Property, and any other claims are small in comparison to
First-Citizens Bank's secured claim. Finally, the filing of this
petition only two hours before the hearing on the Joint
Stipulation of Foreclosure manifests clear intent to delay the
underlying state court proceeding."
Counsel for the Bank may be reached at:
James N. Robinson, Esq.
Rudolph F. Aragon, Esq.
Kevin M. McGill, Esq.
WHITE & CASE LLP
Southeast Financial Center, Suite 4900
200 South Biscayne Boulevard
Miami, FL 33131-2352
Tel: (305) 371-2700
Fax: (305) 358-5744
E-mail: jrobinson@whitecase.com
raragon@whitecase.com
kmcgill@whitecase.com
Headquartered in Miami, Florida, West Airport Palms Business Park,
LLC, filed for Chapter 11 (Bankr. S.D. Fla. Case No. 13-25728) on
July 2, 2013. Judge Robert A. Mark presides over the case. James
Schwitalla, Esq., represents the Debtor as counsel. In its
petition, the Debtor scheduled assets of $14,440,419 and
liabilities of $9,284,422. The petition was signed by Alexander
Montero, managing member.
WEST AIRPORT: Has Interim Nod to Employ Luis Perez as Accountant
----------------------------------------------------------------
On July 15, 2013, the U.S. Bankruptcy Court for the Southern
District of Florida approved, on an interim basis through and
including July 24, 2013, at 3:00 p.m., the employment by West
Airport Palms Business Park, LLC, of Luis Perez and BPA Accounting
Services, Inc., as accountant in the Debtor's Chapter 11 case,
nunc pro tunc to the Petition Date.
The Court will conduct a final hearing on the application on
July 24, 2013, at 3:00 p.m.
Headquartered in Miami, Florida, West Airport Palms Business Park,
LLC, filed for Chapter 11 (Bankr. S.D. Fla. Case No. 13-25728) on
July 2, 2013. Judge Robert A. Mark presides over the case. James
Schwitalla, Esq., represents the Debtor as counsel. In its
petition, the Debtor scheduled assets of $14,440,419 and
liabilities of $9,284,422. The petition was signed by Alexander
Montero, managing member.
WEST AIRPORT: Has Interim OK to Employ James Schwitalla as Counsel
------------------------------------------------------------------
On July 15, 2013, the U.S. Bankruptcy Court for the Southern
District of Florida approved, on an interim basis through and
including July 24, 2013, at 3:00 p.m., the employment by West
Airport Palms Business Park, LLC, of James Schwitalla, Esq., and
the Bankruptcy Law Offices of James Schwitalla, as general counsel
for the Debtor, nunc pro tunc to the Petition Date.
The Court will conduct a final hearing on the application on
July 24, 2013, at 3:00 p.m.
Mr. Schwitalla can be reached at:
James Schwitalla, Esq.
The Bankruptcy Law Offices of James Schwitalla, P.A.
12954 SW 133 Court
Miami, FL 33186
Tel: (305) 278-0811
Fax: (305) 278-0812
E-mail jws@MiamiBKC.net
Headquartered in Miami, Florida, West Airport Palms Business Park,
LLC, filed for Chapter 11 (Bankr. S.D. Fla. Case No. 13-25728) on
July 2, 2013. Judge Robert A. Mark presides over the case. James
Schwitalla, Esq., represents the Debtor as counsel. In its
petition, the Debtor scheduled assets of $14,440,419 and
liabilities of $9,284,422. The petition was signed by Alexander
Montero, managing member.
WOMEN IN SUPPORT: Embattled Newark Nonprofit Files for Bankruptcy
-----------------------------------------------------------------
Katy Stech, writing for The Wall Street Journal, reported that the
controversial Women In Support of the Million Man March Inc.
nonprofit in Newark, N.J., has filed for bankruptcy after federal
authorities accused its leader of misspending a $345,325 federal
grant.
According to the report, the organization filed for Chapter 11
bankruptcy protection Sunday under the name of its affiliate, Ace
Alliance Inc., in the U.S. Bankruptcy Court in Newark, where
Executive Director Fredrica Bey and others proposed to help at-
risk youth stay out of trouble after school using the 2005 grant.
Last year, attorneys for the U.S. Department of Justice sued Ms.
Bey and the nonprofit, accusing them of fraud, of improperly
spending the money and then of attempting to "cover up their
actions" during a subsequent investigation, according to court
papers, the report related.
Nonprofit officials have denied the allegations in court papers,
the report said. The nonprofit's bankruptcy is expected to halt
the dispute before its trial can begin.
The organization's bankruptcy attorney, Donald Bonomo, said that
the group is having "financial difficulties," the report related.
Bankruptcy-court papers listed an $8.2 million debt to Wells Fargo
related to a piece of real estate but gave few other details about
the group's finances, the report also related. The bankruptcy
petition was signed by Ms. Bey's daughter, Amina Bey, who
identified herself as president of the group.
WOODSIDE HOMES: Moody's Gives B3 CFR & Rates New $200MM Notes Caa1
------------------------------------------------------------------
Moody's Investors Service assigned a B3 corporate family rating, a
B3-PD probability of default rating, and a Caa1 rating to the
proposed $200 million senior unsecured notes due 2021 of Woodside
Homes Company, LLC and its co-issuer, Woodside Homes Finance Inc.
The rating outlook is stable. This is the first time Moody's has
assigned ratings to this issuer.
The following rating actions were taken:
Corporate family rating, assigned B3;
Probability of default rating, assigned B3-PD;
$200 million senior unsecured notes due 2021, assigned Caa1, LGD4-
61%;
The rating outlook is stable.
The proceeds from the note offering will be used to redeem the
company's existing $127.7 million of 9.75% senior secured notes
due 2017, and the remainder will be used for general corporate
purposes. Following the completion of the notes offering, the
company is expects to put in place a $45 million senior secured
borrowing base revolving credit facility due 2016.
Ratings Rationale:
The B3 corporate family rating reflects the company's relatively
small size and scale and limited diversity in terms of product
offering and price points compared to many of its peers with
national presence. In addition, the ratings incorporate the
company's relatively aggressive land investment plans given its
short land supply, limited time in its current configuration post
the emergence from bankruptcy, and modest liquidity profile.
The rating is supported by solid demand and pricing fundamentals
in the homebuilding industry and Moody's expectation of strong
growth for the company. The rating also reflects the equity
support from the sponsors, stable profitability, long presence in
one of the better performing master planned communities in the
nation (i.e., Summerlin), clean balance sheet post emergence from
bankruptcy, lack of recourse off-balance sheet arrangements,
modest speculative building percentage, and low cancellation
rates.
The stable outlook reflects Moody's expectation of continued
improvement in financial results.
Woodside has a satisfactory liquidity profile, supported by a pro
forma cash balance of $106 million at closing of the transaction,
$45 million borrowing base revolving credit facility expected to
be entered into following the notes offering, and lack of
maturities until 2016 when the expected credit facility is due and
2021 when the senior notes are due. Liquidity is constrained by
the need to maintain compliance with three financial covenants
based on the expected terms of the credit agreement that will
govern the credit facility, including maximum consolidated
leverage, minimum tangible net worth, and minimum consolidated
interest coverage, and by Moody's expectation of negative cash
flow generation as the company has an immediate need to invest in
land to meet future demand given its relatively short land supply.
The rating could benefit if the company continues to realize
significant top line growth, improves its geographic and product
line diversity, maintains its gross margins above 20%, and retains
a conservative approach to debt leverage.
The rating could be lowered if the company's debt leverage
increases above 60%, profitability and debt servicing metrics
deteriorate, or if liquidity weakens materially.
The principal methodology used in this rating was the Global
Homebuilding Industry Methodology published in March 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.
Woodside Homes Company, LLC, headquartered in North Salt Lake,
Utah, is a private homebuilder and a land developer, with a
presence in five states and a focus on entry and move-up
homebuyers. The company emerged from bankruptcy in 2009 and is
currently majority-owned by the sponsors Oaktree Capital
Management and Stonehill Capital Management. In the last twelve
months ended March 31, 2013, Woodside generated $357 million in
revenues and $22 million in net income.
WOODSIDE HOMES: S&P Gives 'B' CCR & Rates $200MM Notes 'B'
----------------------------------------------------------
Standard & Poor's Ratings Services said it assigned its 'B-'
corporate credit rating to Woodside Homes Co. LLC and its
subsidiary Woodside Homes Finance Inc. (together Woodside). The
outlook is stable. At the same time, S&P assigned a 'B' issue-
level rating and a '2' recovery rating to the homebuilder's
proposed offering of $200 million of senior notes due 2021. The
'2' recovery rating indicates prospects for a substantial (70% to
90%) recovery of principal for senior unsecured note holders in
the event of payment default. The company will use proceeds from
the proposed offering to repay $127.7 million of outstanding
senior secured notes. Woodside will use the remaining proceeds of
approximately $61 million, net of fees for general corporate
purposes including investment in land and inventory.
"The ratings on Woodside reflect the company's "vulnerable"
business profile. The company's homebuilding operations are
relatively small and more geographically concentrated than many of
its rated peers. We view the company's financial risk profile as
"aggressive". Book leverage and EBITDA-based credit metrics
compare favorably with some similarly rated peers," said credit
analyst Susan Madison. "However liquidity, which we currently
view as "adequate", could weaken if Woodside's growth trajectory
exceeds our current estimate and the company is not able to
significantly increase capacity under its proposed $45 million
secured revolver or find additional sources of capital to fund
required land and inventory investment."
"The stable outlook reflects our expectation that Woodside will
grow revenues and EBITDA significantly over the next 12 to 18
months driven by higher home sales volumes, sales price
appreciation and a 150-bp to 200-bp improvement in adjusted gross
margins. As a result, we expect credit metrics to improve, with
debt to EBITDA declining below 5x and EBITDA interest coverage
exceeding 3x. We would consider raising the rating if improved
operating profitability enables the company to largely fund
working capital requirements related to its strong growth
trajectory internally, or Woodside is able to bolster its
liquidity position through an expansion of its revolving credit
facility commitment or demonstrated access to other sources of
capital besides debt to fund its growth. We could lower the
rating if Woodside's liquidity becomes constrained, which could
happen if declining revenue and EBITDA and net operating losses
cause headroom under covenants contained in its senior secured
credit facility to erode significantly, and the company is unable
to repay outstanding borrowings under the facility with cash on
hand or inventory liquidation," S&P noted.
WOOTEN GROUP: U.S. Trustee Seeks Dismissal of Chapter 11 Case
-------------------------------------------------------------
Peter C. Anderson, U.S. Trustee for Region 16, filed a motion
asking the U.S. Bankruptcy Court for the Central District of
California, Los Angeles Division, to dismiss or convert the
Chapter 11 case of Wooten Group, L.L.C., for failing to comply
with certain requirements of the U.S. Trustee Guidelines.
A hearing on the request is set for Aug. 21, 2013, at 10:00 AM.
The U.S. Trustee is represented by Queenie K. Ng, Esq. --
queenie.k.ng@usdoj.gov -- trial attorney, in Los Angeles,
California.
Beverly Hills, Calif.-based Wooten Group, LLC, filed a bare-
bones Chapter 11 petition (Bankr. C.D. Calif. Case No. 12-31323)
in Los Angeles on June 19, 2012. Judge Thomas B. Donovan oversees
the case. M. Jonathan Hayes, Esq., represents the Debtor as
counsel. When it filed for bankruptcy, the Debtor estimated
assets of between $10 million and $50 million and debts of between
$1 million and $10 million. The petition was signed by Mark
Slotkin, managing member.
YOSHI'S SF: Hearing on FDC Motion to Dismiss Continued to Sept. 4
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of California
continued to Sept. 4, 2013, at 2:00 p.m., the hearing to consider
creditor Fillmore Development Commercial, LLC's motion to dismiss
the involuntary Chapter 11 case of Yoshi's San Francisco.
About Yoshi's San Francisco
An involuntary Chapter 11 bankruptcy petition (Bankr. N.D. Calif.
Case No. 12-49432) filed on Nov. 28, 2012, against Yoshi's San
Francisco, aka Yoshi's San Francisco LLC, an upscale nightclub,
music venue, and Japanese restaurant located in Oakland. The
alleged creditors are Yoshi's Japanese Restaurant, allegedly owed
$1.28 million; Apex Refrigeration Corp., owed $504; and East Bay
Restaurant Supply Inc., owed $2,707.
Judge Roger L. Efremsky oversees the case, taking over from Judge
M. Elaine Hammond. Scott H. McNutt, Esq., and Shane J. Moses,
Esq., at McNutt Law Group, represent the Debtor as counsel.
YSF opened its doors in December 2007. The project was part of a
partnership involving the City and County of San Francisco and a
real estate developer, Fillmore Development Commercial, LLC. YSF
is a California limited liability company with two members, both
of which are corporate entities. The majority member is Yoshi's
Fillmore, LLC, of which Yoshi's Japanese Restaurant in Oakland is
the principal member and manager. The minority member is Fillmore
Jazz Club, LLC, a group of investors managed by Michael Johnson,
who also manages the developer, FDC.
There is a provision in the YSF operating agreement that requires
unanimous agreement to take certain actions that have a permanent
effect on the company such as the filing of a voluntary Chapter 11
restructuring. This predictably led to acrimony and gridlock, and
prevented YSF management from taking what it believed were the
those actions necessary in the face of the company's continued
financial situation.
On Oct. 29, 2012, FDC filed a lawsuit in state court seeking
appointment of a receiver to take over control of YSF. YSF
recognized that this would be ultimately unproductive, because
it would be highly disruptive and potentially lead to loss of the
Yoshi's name, as well as the manager who has been the driving
force behind Yoshi's for 40 years.
YSF determined that the only option to allow the continued
operation of Yoshi's and protect the interests of all creditors
was for creditors of Yoshi's to file an involuntary bankruptcy
petition against YSF.
FDC is represented by Sara L. Chenetz, Esq., at Blank Rome LLP.
ZUERCHER TRUST: Ch. 11 Trustee Taps GTFAS as Financial Advisors
---------------------------------------------------------------
Peter S. Kravitz, the duly appointed and acting Chapter 11 Trustee
of The Zuercher Trust of 1999, asks the U.S. Bankruptcy Court for
the Northern District of California for authorization to employ
Grobstein Teeple Financial Services, LLP ("GTFAS") as his
financial advisors, nunc pro tunc to March 5, 2013.
Specifically, GTFAS will perform these specified acts:
a. Obtain and evaluate financial records;
b. Evaluate assets and liabilities of Debtor;
c. Reconstruct accounting and financial records related to the
Debtor;
d. Assist with compiling information for United States Trustee
and Court compliance;
e. Provide litigation consulting if required; and
f. Provide accounting and consulting services requested by the
Trustee and his counsel.
GTFAS professionals' hourly rates are:
Partners $325-$400
Senior Consultants $150-$200
Consultant $125
Para-professionals $95
To the best of the Trustee's knowledge, information and belief,
GTFAS and its members and its associates are "disinterested
persons" as defined in 11 U.S.C. Sec. 101(14).
About The Zuercher Trust of 1999
San Mateo, California-based The Zuercher Trust of 1999 filed for
Chapter 11 bankruptcy (Bankr. N.D. Cal. Case No. 12-32747) on
Sept. 26, 2012. Bankruptcy Judge Hannah L. Blumenstiel presides
over the case. Derrick F. Coleman, Esq., at Coleman Frost LLP,
serves as the Debtor's counsel.
The Debtor, a business trust, estimated assets and debts of
$10 million to $50 million. The Debtor owns property in
621 S. Union Avenue, in Los Angeles. The property is currently in
REAP for alleged city health code violations.
In its schedules, the Debtor disclosed $28,450,000 in total assets
and $12,084,015 in total liabilities.
The petition was signed by Monica H. Hujazi, trustee.
As reported in the TCR on March 22, 2013, August B. Landis, Acting
U.S. Trustee for Region 17, obtained authorization from the U.S.
Bankruptcy Court to appoint Peter S. Kravitz as Chapter 11 Trustee
for The Zuercher Trust of 1999.
Steven T. Gubner, Esq., and Richard D. Burstein, Esq., at Ezra
Brutzkus Gubner LLP, represent Peter S. Kravitz, Chapter 11
Trustee for The Zuercher Trust of 1999, as bankruptcy counsel.
* Barclays, Traders Fined $487.9 Million by U.S. Regulator
----------------------------------------------------------
Brian Wingfield & Donal Griffin, writing for Bloomberg News,
reported that Barclays Plc and four former traders were ordered to
pay a combined $487.9 million in fines and penalties by the U.S.
Federal Energy Regulatory Commission for engaging in what the
agency said was a scheme to manipulate energy markets in the
Western U.S. from 2006 to 2008.
The agency directed the company and traders to pay $453 million in
civil penalties to the U.S. Treasury within 30 days, according to
the order, the report related. The London-based bank also must
surrender $34.9 million in profits, to be distributed to programs
that help low-income homeowners pay energy bills in California,
Arizona, Oregon and Washington, the FERC said.
According to the report, Barclays said it would "vigorously" fight
the penalties, which can be appealed to U.S. courts.
"Manipulating energy markets comes at a steep cost," said U.S.
Senator Ron Wyden, an Oregon Democrat and chairman of the Energy
Committee, the report cited. "Consumers have the right to heat
and power their homes without fear that traders are stacking the
deck against them to rack up unjust profits."
The electric-energy fine surpasses the 290 million pounds ($438
million) Barclays paid for manipulating the London interbank
offered rate and is a setback to Chief Executive Officer Antony
Jenkins's attempts to rebuild regulators' confidence in the bank,
the report said. FERC's move is part of a crackdown by global
regulators on alleged rigging of benchmarks used in markets from
crude oil to currencies.
* Credit Suisse Sued by Highland Capital over Resort Loans
----------------------------------------------------------
Chris Dolmetsch, writing for Bloomberg News, reported that Credit
Suisse Group AG was sued for more than $350 million by entities of
Highland Capital Management LP who claim it marketed loans for
high-end residential communities including the Yellowstone Club in
Montana based on unreasonable and deceptive appraisals.
The report related that dispute stems from dividend capitalization
loans for Yellowstone, the Turtle Bay Resort in Hawaii, the Park
Highlands Master Planned Community in North Las Vegas, Ginn Clubs
& Resorts and Rhodes Homes, according to a court filing July 16 in
New York State Supreme Court in Manhattan.
The plaintiffs, Allenby LLC and Haygood LLC, were assigned the
claims by managed investment funds that participated as lenders to
the loans, according to the suit, the report said. They accused
Zurich-based Credit Suisse of using "compliant stooges in two
global appraisal firms" to overvalue the communities that secured
the loans to persuade the lenders to invest.
"Armed with these bogus appraisals, Credit Suisse duped the
lenders into investing hundreds of millions of dollars in under-
collateralized loans that eventually imploded," according to the
plaintiffs, the report cited.
Highland Capital Management, the Dallas-based debt manager, and
entities connected to it are behind the lawsuit, Drew Benson, a
spokesman for Credit Suisse in New York, said in an e-mail to
Bloomberg. Benson called the claims an "unfounded attempt by a
sophisticated investor to misuse the legal system to recover
losses" and said the bank will fight the lawsuit.
The cases are Allenby LLC v. Credit Suisse AG, 652491/2013; and
Credit Suisse Loan Funding LLC v. Highland Crusader Offshore
Partners LLP, 652492/2013, New York State Supreme Court, New York
County (Manhattan).
* U.S. Trustee Settles w/ Citigroup to Protect Personal Info
------------------------------------------------------------
The U.S. Trustee Program announced the unsealing of a settlement
with Citigroup Inc. that protects the personal information of
nearly 150,000 consumers in 85 jurisdictions around the country.
Citi agreed to redact proofs of claimfiled in bankruptcy cases
nationwide in which the personal information of consumer debtors
and third parties, including Social Security numbers and
birthdates, had not been properly redacted as required by the
bankruptcy rules. Citi also agreed to notify all affected
consumers and offer them one year of free credit monitoring. An
independent auditor appointed under the settlement is reviewing
the accuracy of the correction process.
The settlement, approved by the U.S. Bankruptcy Court for the
Southern District of New York on March 13, 2012, had been sealed
to prevent potential wrongdoers from learning of the breach and
seeking to victimize the affected consumers. On July 11, 2013, the
bankruptcy court granted the parties' motion to unseal the
proceedings.
"Under this unprecedented settlement, nearly 150,000 consumers
whose personal information was placed at risk through no fault of
their own have received notice of the improper disclosure and can
further protect their information through free credit monitoring,"
stated Clifford J. White III, Director of the Executive Office for
U.S. Trustees. "Creditors in bankruptcy cases have a legal duty to
protect certain personal information of their customers. This
settlement should remind all major financial institutions and
other creditors that violations cannot be tolerated."
The settlement resolved the objection of the U.S. Trustee for
Region 2, Tracy Hope Davis, to a motion Citi filed under seal in
September 2011. Citi's motion disclosed that between 2007 and 2011
its subsidiaries, including CitiMortgage Inc., Citibank N.A. and
CitiFinancial Inc., filed proofs of claim in thousands of consumer
bankruptcy cases seeking payment of amounts alleged to be owed by
debtors. In April 2011, Citi discovered that certain personal
information that should have been redacted under bankruptcy court
rules, including consumers' Social Security numbers and birth
dates, had not been properly redacted.
The U.S. Trustee agreed that the information should be redacted,
but objected to Citi's motion because it did not disclose the
nationwide scope of the breach. In addition, Citi did not propose
a verifiable solution to correct the problem or provide assurance
that the matter would be made public and the seal lifted once the
information was redacted and affected consumers received notice.
On March 13, 2012, the bankruptcy court approved the settlement
calling for the redaction and electronic filing of replacement
claims at Citi's expense. The settlement also included specific
consumer protections, including: assurance that the original
claims would not be overwritten or altered in the replacement
process; notification to the affected debtors and third parties
that their personal information was not properly redacted and of
its correction; and an offer of one year of free credit
monitoring.
Under the settlement, the court also appointed an independent
auditor to review and file certifications with the court
confirming that Citi's investigation to determine the scope of the
breach was adequate, that Citi filed properly redacted claims and
did not overwrite or replace the original claims in the process,
and that Citi's policies and procedures for future filings are
reasonably calculated to prevent recurrence of the redaction
error.
On July 19, 2012, Citi certified to the bankruptcy court the
successful redaction and replacement of the filingsin the Southern
District of New York. During that process, Citi discovered
additional redaction issues and, in accordance with the
settlement, filed a plan of corrective action expanding the scope
of the settlement to include the redaction of approximately 50,000
additional bankruptcy filings.
Courts in 60 other jurisdictions served by the USTP have entered
the settlement under seal and accepted the redacted replacement
filings. Courts in the remaining jurisdictions handled the
correction of the filings according to their local rules and
orders, and Citi is otherwise following the terms of the
settlement in those jurisdictions.
On June 4, 2013, the independent auditor certified to the U.S.
Bankruptcy Court for the Southern District of New York and the 60
other participating courts that Citi had mailed letters notifying
affected consumers of the privacy breach, its correction and the
availability of one year of free credit monitoring at Citi's
expense. The independent auditor is reviewing Citi's redaction and
replacement process and is expected to issue its certification on
that process by the end of the year.
Consumer debtors who believe they were affected may contact
Citigroup Customer Service at 1-866-613-5636.
The U.S. Trustee Program is the component of the Justice
Department that protects the integrity of the bankruptcy system by
overseeing case administration and litigating to enforce the
bankruptcy laws.
The settlement is filed in In re Matter of Citi Replacement
Filings, No. 11-00405 (Bankr. S.D.N.Y.).
* Prudential Said to Get DeMarco's Backing to Avoid SIFI
--------------------------------------------------------
Ian Katz & Zachary Tracer, writing for Bloomberg News, reported
that Prudential Financial Inc., the insurer contesting a decision
deeming it systemically important, won the support of the Federal
Housing Finance Agency during a vote of U.S. regulators last
month, two people familiar with the matter said.
The report related that the Financial Stability Oversight Council
voted 7-2 to designate an unidentified company as systemically
important, meaning the firm could endanger the financial system if
it were to fail, according to minutes of the June 3 meeting
released by the Treasury Department. The company was Prudential,
said the people, who asked not to be identified because the
information wasn't officially released.
The FHFA's acting director, Edward DeMarco, voted "no," as did Roy
Woodall, a former Kentucky state insurance commissioner who is the
council's independent member with insurance expertise, the panel
said, the report said.
Prudential is the only one of three companies appealing the FSOC's
ruling subjecting them to heightened Federal Reserve oversight,
the report noted. The Newark, New Jersey-based insurer said on
July 2 that it requested a hearing to explain why it shouldn't be
designated.
The Fed could impose stricter capital and liquidity standards on
systemically important firms, the report pointed out. Bob
DeFillippo, a Prudential spokesman, declined to comment, the news
agency said.
* SEC Sues Cohen, Seeks Lifetime Ban from Managing Investor Funds
-----------------------------------------------------------------
Jordan Maglich, writing for Forbes, reported that the Securities
and Exchange Commission has announced the institution of
administrative proceedings against Steven A. Cohen, the founder of
SAC Capital Advisors, alleging that he ignored various "red flags"
that should have alerted him to insider trading by several
employees. The charges come just days before the expiration of a
statute of limitations on the majority of the conduct alleged by
authorities, including the realization of collective profits of
nearly $300 million from a favorable trade involving
pharmaceutical giants Wyeth and Elan Corporation in July 2008. In
a press release announcing the charges, the SEC indicated that it
will be seeking an order prohibiting Mr. Cohen from overseeing
investor funds -- a potentially fatal blow to Cohen's efforts to
downplay concerns by SAC Capital investors.
According to the report, notably, the SEC chose to pursue
administrative proceedings against Mr. Cohen rather than file
civil charges -- the route that has been typically pursued for the
vast majority of individuals accused of insider trading. The use
of administrative proceedings has several benefits for the SEC.
This includes the ability to have the case heard before an
administrative law judge, rather than a jury, and the requirement
that normal rules of evidence are not applicable. Additionally,
as a result of the Dodd-Frank Act, the SEC is able to pursue an
expanded array of civil penalties. Administrative proceedings are
also typically done on a more expedited basis than a civil case.
In the Order Instituting Administrative Proceedings, the SEC
outlined a series of trades by two former SAC traders, Matthew
Martoma and Michael Steinberg, who have each been criminally
charged, the report said. On at least two occasions in 2008,
Martoma and Steinberg are alleged to have traded on the basis of
material nonpublic information they received about three publicly
traded companies: Dell, Wyeth, and Elan. The SEC alleged that, in
each case,
Cohen received highly suspicious information that should have
caused any reasonable hedge fund manager in Cohen's position to
take prompt action to determine whether employees under his
supervision were engaged in unlawful conduct and to prevent
violations of the federal securities laws, the report noted. Cohen
failed to take reasonable steps to investigate and prevent such
violations. Instead, faced with red flags of potentially unlawful
conduct by employees under his supervision, Cohen allowed his
traders to execute the recommended trades and stood by while the
portfolio managers traded in the portfolios they managed.
* Silverstein Can't Get $3.5 Billion from Airlines for 9/11
-----------------------------------------------------------
Erik Larson, writing for Bloomberg News, reported that real estate
developer Larry Silverstein can't seek $3.5 billion from airlines
whose planes were hijacked by terrorists and flown into the World
Trade Center's twin towers on Sept. 11, 2001, a judge ruled.
According to the report, Silverstein, who leased the skyscrapers
about two months before they were destroyed, already collected
$4.1 billion from insurers and can't collect twice under New York
law, U.S. District Judge Alvin K. Hellerstein ruled in a courtroom
less than a mile and a half from the World Trade Center site.
"If this case were to go forward, the WTC companies would not be
able to recover anything against the airlines," said Hellerstein,
the report cited. The judge rejected any suggestion that
Silverstein had sought a windfall, saying he was among the
"heroes" who sought to "create beauty out of the destruction."
The report related that Silverstein's World Trade Center
Properties LLC in 2008 sued United Continental Holdings Inc.,
American Airlines and its parent AMR Corp., claiming their
negligence led to the destruction of the towers.
The company, which rebuilt the destroyed 7 World Trade Center and
is rebuilding three other towers on the site, argued that the
insurance accord didn't bar it from seeking additional damages in
civil cases because the payout didn't correspond to specific types
of economic losses, such as replacement costs for the buildings or
lost rent from tenants, the report related. Hellerstein disagreed.
The case is In Re September 11 Litigation, 21-mc-00101, U.S.
District Court, Southern District of New York (Manhattan).
* UBS Settles With U.S. Mortgage Regulator
------------------------------------------
John Letzing, writing for The Wall Street Journal, reported that
UBS AG agreed to pay a heavy fine to settle with U.S. regulators
for allegedly misrepresenting mortgage-backed bonds sold during
the American housing bubble, potentially resolving a lingering
issue stemming from the Swiss lender's once-aggressive investment
bank.
According to the report, UBS said it has agreed to a settlement
with the Federal Housing Finance Agency, the U.S. regulator for
mortgage-finance giants Fannie Mae and Freddie Mac, over
allegations that the Swiss banking giant sold defective mortgage-
backed securities in the lead-up to the U.S. financial crisis
between 2004 and 2007.
The report said UBS didn't disclose the size of the fine, but the
Zurich-based lender said its second-quarter results, which are
expected in full later this month, will now include pretax charges
for litigation matters totaling about 865 million Swiss francs
($919 million). About 700 million francs of that total is being
booked to the bank's so-called corporate center, which houses
legacy investment banking businesses that helped run UBS off the
rails and contributed to it requiring a Swiss government bailout
in 2008.
UBS is just one of a number of banks that have been pursued by the
FHFA for allegedly selling defective mortgage-backed securities,
according to WSJ. In May, Citigroup Inc. also reached a related
settlement with the regulator.
UBS plans to dramatically scale back its investment banking
operation, which it now aims to use to bolster its core business
of managing wealth for private banking clients, the report added.
* Greenberg Says Bernanke Testimony Key in AIG Bailout Suit
-----------------------------------------------------------
Andrew Zajac, writing for Bloomberg News, reported that U.S.
Federal Reserve Chairman Ben Bernanke should be required to
testify in Maurice "Hank" Greenberg's lawsuit over the bailout of
American International Group Inc. (AIG), Greenberg's lawyers said.
Bernanke made key decisions about the government takeover of the
insurer during the financial crisis, according to a filing by
Greenberg's Starr International Co. in the U.S. Court of Federal
Claims in Washington, the report related.
Starr sued the U.S. for $25 billion in 2011, the report recalled.
Greenberg called the assumption of 80 percent of AIG's stock by
the Federal Reserve Bank of New York in September 2008 a taking of
property in violation of shareholders' constitutional rights to
due process and equal protection of the law. Starr urged Judge
Thomas Wheeler to deny a government request to quash a deposition
subpoena of Bernanke.
"No other witness can serve as a substitute for Mr. Bernanke's
testimony," according the filing, the report said. By Bernanke's
own admission, "the decision to take over AIG was his."
The case is Starr International Co. v. U.S., 11-cv-00779, U.S.
Court of Federal Claims (Washington).
* Bernanke Sees Need for Backstop for Mortgage Market
-----------------------------------------------------
Margaret Chadbourn, writing for Reuters, reported that Federal
Reserve Chairman Ben Bernanke weighed into the contentious debate
over the future of the U.S. housing finance system, saying some
sort of backstop for mortgages was needed to protect the financial
system in times of stress. However, he stopped short of
explicitly endorsing a government role, which many Democrats see
as the best approach.
"I think a key issue is going to be ... making sure that there is
some kind of backstop or protection for situations where the
financial markets are in distress," Bernanke told the Senate
Banking Committee, the report related.
A bipartisan group of senators has proposed winding down
government-controlled mortgage financiers Fannie Mae and Freddie
Mac over five years as part of an effort to reduce taxpayer
support for the market, the report said.
The two companies, which were seized by the government in 2008 as
bad loans threatened their solvency, currently back nearly half of
all new U.S. home loans, the report further related.
To fill the role they have played in ensuring a flow of housing
credit in good times and bad, the senators would create a
government backstop that would kick in times of stress after
private creditors had absorbed large losses, the report added.
* Eminent Domain Housing Relief Plan Receives Renewed Push
----------------------------------------------------------
Nick Timiraos, writing for The Wall Street Journal, reported that
five months after three California municipalities spurned a plan
to seize mortgages through eminent domain, a number of other
communities still struggling to recover from the housing slump are
revisiting the gambit.
According to the report, the renewed push again pits the mortgage
industry against Mortgage Resolution Partners, a San Francisco
firm that has been pushing the novel plan as a means to help
borrowers reduce loan balances in cases where the remaining
mortgage payments are more than the homes are worth.
The fight is beginning to spill into the hands of politicians and
federal housing officials, with proponents lobbying the White
House for support and opponents pressing the Department of Housing
and Urban Development for rules to restrict the ability to seize
mortgages via eminent domain, the report said.
Six California cities have signed or agreed to sign pacts in
recent months to explore the use of eminent domain, though none
has yet taken steps to condemn any property, the report added.
The largest of those cities -- Richmond, a suburb on the northeast
of the San Francisco Bay, and El Monte, a suburb 15 miles east of
Los Angeles -- are the closest to moving ahead, said MRP Chairman
Steven Gluckstern.
The report said the city council of North Las Vegas, Nev., became
the latest community to explore the tactic. The council voted to
sign an "advisory services" agreement with MRP to explore
potential loan seizures. The pact doesn't require the city to do
anything for now, but it represents a step toward seizing loans,
possibly later this summer.
* FINRA Scrutinizes High-Speed Trading Firms
--------------------------------------------
Reuters reported that U.S. regulators are taking a deep look at
automated trading firms to determine whether adequate risk
controls are in place to prevent major technology glitches or at
least minimize their impact.
According to the report, The Financial Industry Regulatory
Authority said it sent out targeted examination letters to 10
high-frequency trading firms this week asking for detailed
information on the testing and supervision of trading algorithms
and other software.
The report related that FINRA also asked the firms to describe any
instances in which they had a malfunction with an algorithm or
trading engine that had a major financial impact to the firm or
caused a market disruption.
"This sweep is part of our effort to take a deeper dive into the
area of technology controls given the increased reliance on
technology," said FINRA spokeswoman Nancy Condon, the report
cited.
FINRA said in January that it planned to take a closer look at
high-frequency trading practices this year following a software
glitch at automated trading firm Knight Capital Group last year,
the report recalled.
* Fitch: Banks' Capital Market Revenues Solid, but Rate Risks Loom
------------------------------------------------------------------
The largest U.S. trading banks turned in strong capital markets
revenues in the second quarter, despite a tough June market
environment hurt by rising interest rates and widening credit
spreads. Better investment banking results were a major
contributor, but Fitch Ratings sees the potential for continuing
rate and spread pressure to weaken issuance activity and slow
capital markets revenue growth in upcoming quarters.
Increased market volatility in June and a slowdown in debt
issuance activity late in the quarter underscored potential risks
to top-line results should the arrival of QE tapering by the Fed
induce more rate pressure and general market volatility in the
latter part of the year.
Fixed income, currencies and commodities (FICC) revenues for the
largest U.S. banks also came under pressure in June, although FICC
continues to drive 49% of aggregate capital markets revenue for
U.S. global trading and universal banks (GTUBs).
Currency revenues were a relative bright spot, as market
volatility picked up, especially in Asia. Credit products, on the
other hand, were a source of weakness as the June rate increases
reduced client activity and negative inventory marks affected
results.
Still, trading losses are being contained more effectively as a
result of leaner inventories, which have been cut as banks face
higher Basel III capital charges and the need to comply with the
upcoming Volcker Rule.
Aggregate capital markets revenue again served as a key driver of
overall second-quarter revenue results for U.S. GTUBs, accounting
for 32% of total revenues. Solid growth in investment banking (6%
revenue growth sequentially and 30% year over year) helped offset
the mixed trading results in the quarter.
For a complete rundown of second-quarter capital markets revenue
results for the largest U.S. trading banks, see "U.S. Banking
Capital Market Update: 2Q13," dated July 22, 2013, at
www.fitchratings.com.
* Fitch Says U.S. Mortgage New Delinquencies Slowing Down
---------------------------------------------------------
U.S. mortgage performance continues to improve as the rate of new
delinquencies across all sectors trend down, according to Fitch
Ratings in its latest mortgage market index.
Fitch's Delinquency (DQ) Roll Rate index declined again, to 2% for
second-quarter 2013 (2Q'13). This rate is down from 2.4% in 1Q'13
and 2.2% in 2Q'12. In aggregate, non-agency roll rates from
current to delinquent have improved to their lowest levels since
early 2007.
'The improved roll rates are driven most notably by home price
increases, steady job growth and positive selection among
borrowers remaining in the mortgage pools,' said Sean Nelson,
Director at Fitch. One area of concern remains prime mortgage
loans originated before 2005, which continue to struggle due to
concentrations of adversely selected borrowers.
Rates of new mortgage delinquencies are seasonal. Second quarter
delinquency rates typically post the lowest levels as a result of
borrowers receiving tax refunds. That said, Fitch still sees long-
term improvement even when taking seasonality into account. 'Since
2010, second-quarter roll rates have improved year-over-year,'
said Nelson.
Fitch's index is published quarterly and highlights performance
trends in legacy and new issue RMBS, house price conditions and
mortgage market developments. Fitch's DQ Roll Rate index measures
the percentage of previously performing loans that become
delinquent among U.S. private label, securitized mortgage loans.
* Moody's Notes Dip in Liquidity Stress Index for Mid-July
----------------------------------------------------------
Moody's Liquidity Stress Index has fallen slightly, to 3.5% as of
mid-July from 3.7% at the end of June, despite recent volatility
in the credit markets, Moody's Investors Service says in its
latest edition of SGL Monitor. The LSI remains well below its
historical average of 7.2%, though it is up from its record low of
2.8% at the end of April.
Moody's Liquidity-Stress Index rises when corporate liquidity
appears to weaken and falls when it appears to improve.
"The LSI appears to be on a modest upswing, with spreads moving
higher and the credit markets tightening lately," says Vice
President -- Senior Credit Officer John Puchalla. "But it is not
signaling a significant weakening of corporate liquidity."
The index has generally been declining since the end of 2011,
Puchalla says, and remains well below its record high of 20.9%,
with continued low readings suggesting that few US speculative-
grade companies are experiencing liquidity problems.
Recent market volatility does however raise risk for companies
that will need to refinance debt maturities in the coming months.
Bond issuance has pulled back and high-yield bond spreads and
yields have widened significantly since the Fed indicated it may
begin to reduce its bond-buying program later this year.
"Capital markets have been very receptive to high-yield debt
issues in recent years, allowing most companies to push out
maturities, reduce borrowing costs and bolster liquidity,"
Puchalla says. "As such, the recent falloff in issuance and rise
of bond yields and spreads has not been meaningful enough to have
a material negative effect on corporate liquidity."
Despite strong liquidity readings, the two-year-old negative trend
of liquidity rating downgrades outnumbering upgrades has continued
thus far in July, with downgrades outnumbering upgrades by 5-3.
Although this would seem to suggest a modest weakening of
corporate liquidity, Moody's notes that generally low levels for
the LSI have been a better indicator of a benign default
environment than the trend in downgrades and upgrades.
Moody's Covenant Stress Index, which measures the extent to which
speculative-grade companies are at risk of violating their debt
covenants, rose to 2.2% in June from 2.1% in May, but also remains
well below its record high of 17.3% and its historical average of
6.6%. The index indicates a low risk of covenant violations over
the next 12-15 months for most companies.
* Too-Big-to-Fail Insurers to Face Tougher Capital Standards
------------------------------------------------------------
Carolyn Bandel, writing for Bloomberg News, reported that global
insurers identified as too big to fail will have to hold higher
reserves and draw up recovery and resolution plans to limit the
economic fallout should they go bust, the industry's watchdog
said.
According to the report, the International Association of
Insurance Supervisors, which collected data from 50 insurers in 14
jurisdictions, including the U.S., to help the Financial Stability
Board draw up a list of systemically important firms, released its
assessment methodology and policy measures. The list of insurers
will be announced by the Basel, Switzerland-based FSB in coming
days.
The FSB, led by Bank of England Governor Mark Carney, is
coordinating global regulators' response to the worst financial
crisis since the Great Depression to prevent a repeat of the
turmoil that followed the collapse of Lehman Brothers Holdings
Inc. and bailout of American International Group Inc., the report
said.
"Since the financial crisis, supervisors across the sector have
worked diligently to address risks to the global financial system
from systemically important financial institutions," Peter
Braumueller, chair of the IAIS executive committee, said in a
statement, the report cited. "The measures and framework put
forward by the IAIS complete a major piece of this reform in a
manner specifically designed for the insurance sector."
The companies on the FSB insurer list will be included based on
criteria such as size, global activity and the amount of non-
insurance businesses they have, the report said. The designation
of systemically important means the failure of the company could
threaten the financial system.
* Senate to Look at Banks' Control of Commodity Storage
-------------------------------------------------------
Reuters reported that a U.S. Senate committee will hold a hearing
on whether banks should control physical storage of commodities,
the HuffingtonPost reported, a signal that lawmakers may toughen
their stance on this controversial but lucrative business for Wall
Street firms.
According to the report, Goldman Sachs Group Inc, JP Morgan Chase
& Co and Morgan Stanley all have business units involved in the
storage of physical commodities such as metals and oil, as well as
being involved in commodities trading.
The report related that the Senate hearing will take place as a
five-year grace period from the U.S. Federal Reserve that allows
banks to hold physical commodities assets is set to expire before
the end of the year.
The panel will hear on July 23 from beer and can maker MillerCoors
and two experts who are critical of the banks' involvement in
physical commodities and infrastructure, including businesses such
as storage and transportation, the report said.
"When Wall Street banks control the supply of both commodities and
financial products, there's a potential for anti-competitive
behavior and manipulation," Sen. Sherrod Brown (D-Ohio), a member
of the banking committee, was reported as saying in the
HuffingtonPost.
* Dorsey's Lawyers Among List of Super Lawyers Rising Stars
-----------------------------------------------------------
International law firm Dorsey & Whitney LLP on July 22 disclosed
that eight lawyers in the Firm's Palo Alto, California office have
been selected for inclusion in the 2013 Super Lawyers(TM) and
Rising Stars(TM) lists for California.
Selected to the 2013 California Super Lawyers(TM) List
-- Craig S. Ritchey Business Litigation, General Litigation,
Franchise/Dealership
-- David J. Murphy Labor and Employment
-- John Walshe Murray Bankruptcy & Creditor/Debtor Rights
-- Stephen O'Neill Bankruptcy & Creditor/Debtor Rights
-- Robert A. Franklin Bankruptcy & Creditor/Debtor Rights,
Business Litigation
Selected to the 2013 Rising Stars(TM) List
-- Evan Y. Ng Business/Corporate, Corporate Governance &
Compliance
-- Adrian M. Rich Securities & Corporate Finance,
Business/Corporate
-- Thomas T. Hwang Bankruptcy & Creditor/Debtor Rights
Dorsey's Palo Alto office serves a wide variety of clients, from
start-ups to established regional, national and international
businesses. The Palo Alto office includes specialists in multiple
practice areas, including mergers and acquisitions, venture
capital, corporate law, fund formation, business and commercial
litigation, labor and employment, life sciences and healthcare,
medical devices, patent, bankruptcy and tax.
"This is well deserved recognition for the incredible talent that
Dorsey has in Palo Alto," noted Dorsey & Whitney Managing Partner,
Ken Cutler. "We have Super Lawyers and Rising Stars across all
our major practices that bring great strength to the entire Firm."
Super Lawyers is a rating service of outstanding lawyers from more
than 70 practice areas who have attained a high-degree of peer
recognition and professional achievement. The selection process
is multi-phased and includes independent research, peer
nominations and peer evaluations.
About Dorsey & Whitney LLP
Clients have relied on Dorsey since 1912 as a valued business
partner. With locations across the United States and in Canada,
Europe and the Asia-Pacific region, Dorsey provides an integrated,
proactive approach to its clients' legal and business needs.
Dorsey represents a number of the world's most successful
companies from a wide range of industries, including leaders in
the financial services, life sciences, technology, agribusiness
and energy sectors, as well as major non-profit and government
entities.
* Steven Notinger to Chair Cleveland, Waters' Bankruptcy Practice
-----------------------------------------------------------------
Cleveland, Waters and Bass, P.A., on July 22 disclosed that
Steven M. Notinger will join the firm on August 1, 2013, as a
shareholder and director and will chair its newly-created Business
Bankruptcy Practice Group.
Mr. Notinger is recognized as one of New Hampshire's top attorneys
in business bankruptcy matters, including Chapter 11
reorganizations, debtor/creditor matters and insolvency-related
tax issues. In addition to representing debtors and creditors in
distressed situations, Steve represents trustees in bankruptcy and
serves as a trustee himself in bankruptcy cases. He has been
listed in The Best Lawyers in America(C) since 2009.
Mr. Notinger is a frequent speaker on bankruptcy and tax matters
at legal education programs for the New Hampshire Bar Association,
American Bankruptcy Institute and the Federal Practice Institute.
He is also an international guest lecturer at the Northern Arctic
Federal University Law School and the St. Petersburg University
Law School, both in the Russian Federation.
Mr. Notinger is a member of the New Hampshire and Massachusetts
bars and is admitted to practice before the United States Tax
Court and the United States District Courts for the Districts of
New Hampshire and Massachusetts. He earned a B.A. (magna cum
laude) from State University of New York at Albany in 1986 and a
J.D. from Boston University in 1990. Prior to joining Cleveland,
Waters and Bass, P.A., Steve was a founding partner of Donchess &
Notinger in Nashua, New Hampshire.
"We are delighted Steve is joining our firm," said Philip M.
Hastings, president of Cleveland, Waters and Bass. "With his top-
notch bankruptcy expertise and depth of experience, we can offer a
broader range of legal services to our business clients. Our
Business Bankruptcy Practice Group will help our clients navigate
a myriad of difficult and uncertain economic circumstances."
Founded in 1959, Cleveland, Waters and Bass, P.A., focuses on
representing privately-held businesses and their owners throughout
New Hampshire and northern New England. The firm's attorneys
practice in the areas of business and business tax, real estate,
trusts and estates, litigation and bankruptcy. Cleveland, Waters
and Bass is a member of the Legal Netlink Alliance, an
international alliance of independent law firms.
* Upcoming Meetings, Conferences and Seminars
---------------------------------------------
Aug. 8-10, 2013
AMERICAN BANKRUPTCY INSTITUTE
Mid-Atlantic Bankruptcy Workshop
Hotel Hershey, Hershey, Pa.
Contact: 1-703-739-0800; http://www.abiworld.org/
Aug. 22-24, 2013
AMERICAN BANKRUPTCY INSTITUTE
Southwest Bankruptcy Conference
Hyatt Regency Lake Tahoe, Incline Village, Nev.
Contact: 1-703-739-0800; http://www.abiworld.org/
Oct. 3-5, 2013
TURNAROUND MANAGEMENT ASSOCIATION
TMA Annual Convention
Marriott Wardman Park, Washington, D.C.
Contact: http://www.turnaround.org/
Nov. 1, 2013
AMERICAN BANKRUPTCY INSTITUTE
NCBJ/ABI Educational Program
Atlanta Marriott Marquis, Atlanta, Ga.
Contact: 1-703-739-0800; http://www.abiworld.org/
Dec. 2, 2013
BEARD GROUP, INC.
20th Annual Distressed Investing Conference
The Helmsley Park Lane Hotel, New York, N.Y.
Contact: 240-629-3300 or http://bankrupt.com/
Dec. 5-7, 2013
AMERICAN BANKRUPTCY INSTITUTE
Winter Leadership Conference
Terranea Resort, Rancho Palos Verdes, Calif.
Contact: 1-703-739-0800; http://www.abiworld.org/
The Meetings, Conferences and Seminars column appears in the
Troubled Company Reporter each Wednesday. Submissions via
e-mail to conferences@bankrupt.com are encouraged.
*********
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, Valerie Udtuhan, Howard C. Tolentino, 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
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers. Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.
The TCR subscription rate is $975 for 6 months delivered via
e-mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance thereof
are $25 each. For subscription information, contact Peter A.
Chapman at 215-945-7000 or Nina Novak at 202-241-8200.
*** End of Transmission ***