/raid1/www/Hosts/bankrupt/TCR_Public/130913.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Friday, September 13, 2013, Vol. 17, No. 254
Headlines
1ST FINANCIAL: Amends Second Quarter Form 10-Q
250 AZ: Does Not Have Ownership Rights to $65-Mil. TICs Loan
ALLEGION US: Moody's Assigns 'Ba1' CFR & Rates $1.3BB Debt 'Ba1'
ALLEGION PLC: S&P Assigns BB+ CCR & Rates $500MM Unsec. Notes BB+
ALLEN FEINGOLD: Says Assessed Fees Should Be Dischargeable
AMERICAN AIRLINES: Judge Confirms Plan to Merge with US Airways
AMERICAN AIRLINES: AMR, US Airways File Answer to Antitrust Suit
AMERICAN AMEX: Updates Plan Outline, Adequacy Hearing on Oct. 1
AMERICAN CAPITAL: Fitch to Rate $350MM Sr. Unsecured Notes 'BB-'
AMERICAN CAPITAL: Moody's Rates Proposed $350MM Senior Notes 'B3'
AMERICAN CAPITAL: S&P Rates $350MM Sr. Unsecured Notes 'B+'
AMERICAN ROADS: Detroit Tunnel Owner Implements Chapter 11 Plan
ARI-RC 2 LLC: Updated Case Summary & Creditors' Lists
ARMORWORKS ENTERPRISES: Creditors Urge Court to Appoint Trustee
ASP HHI: Moody's Affirms 'B2' CFR; Outlook Stable
ASP HHI: S&P Retains 'B+' Rating Following Proposed $100MM Add-On
ASTORIA GENERATING: S&P Puts 'B-' CCR on CreditWatch Positive
ATP OIL: Strikes Deal for Anadarko to Take Gomez Wells
AXESSTEL INC: Chief Technology Officer Stephen Sek Resigns
B & H VENTURES: Voluntary Chapter 11 Case Summary
BERGENFIELD SENIOR: Files Disclosure Statement in Support of Plan
BERKLINE/BENCHCRAFT: Bid to Dismiss Suit v. Evergreen Line Denied
BI-LO HOLDING: Proposed $400MM Sr. Notes Get Moody's Caa1 Rating
BIOZONE PHARMACEUTICALS: Settles with Former EVP for $1.1-Mil.
BLUEJAY PROPERTIES: BBOK & UNB Object to Extend Cash Use
BURBANK VICTORY: Voluntary Chapter 11 Case Summary
CARL'S PATIO: Plan Outline Okayed, Confirmation Hearing on Oct. 15
CENGAGE LEARNING: Apax Sues to Ensure Payment Under Ch. 11 Plan
CENGAGE LEARNING: Creditors Oppose Plan-Approval Scheduling
CHINA CEETOP.COM: Weiliang Liu Elected to Board
CITY HOMES: Facing Lead Paint Suits, Co. Files for Bankruptcy
COOL SHEET: Case Summary & 20 Largest Unsecured Creditors
COMPETITIVE TECHNOLOGIES: To Issue 1MM Shares to Lawyers
CORAL DYEING: Case Summary & 20 Largest Unsecured Creditors
CRYOPORT INC: Richard Rathmann Appointed Board Chairman
DELL INC: S&P Lowers Corporate Credit Rating to 'BB-'
DELL INT'L: Moody's Assigns Ba2, Ba3 Ratings to New Secured Debt
DESIGNLINE CORP: Sec. 341 Meeting Adjourned to Oct. 9
DETROIT, MI: Retirees, Unions Say Bankruptcy Law Unconstitutional
DETROIT, MI: Retirees Want Eligibility Dispute in District Court
DEWEY & LEBOEUF: Trustee Sues Legal Staffing Co. for $1.5-Mil.
DIAMONDBACK ENERGY: S&P Assigns 'B-' CCR & Rates New Notes 'CCC+'
DOGWOOD PROPERTIES: Files Second Amended Plan Outline
DTF CORP: Oct. 7 Hearing on Sale of Property to Grupo Angeles
EASTMAN KODAK: Emerges From Chapter 11
ELDORADO RESORTS: Moody's Says MTR Merger a Credit Positive
ENDURANCE INT'L: Moody's Retains 'B2' Rating Over IPO Plans
EXIDE TECHNOLOGIES: Ends Supplier Relationship With BMW NA
FAIRMONT GENERAL: Can Use Cash Collateral Until Oct. 2
FAIRMONT GENERAL: Has Interim Court OK to Hire Hammond Hanlon
FAIRMONT GENERAL: Has Interim Authority to Employ Epiq
FAIRMONT GENERAL: Schedules Filing Deadline Extended to Oct. 17
FINJAN HOLDINGS: Presented at 2013 Gateway Conference
FURNITURE BRANDS: Seeks Okay of Oaktree-Led Auction; KPS to Bid
FURNITURE BRANDS: Wins Approval of First Day Motions
FURNITURE BRANDS: Oaktree Sweetens Bid after KPS Makes Offer
GENERAL MOTORS: Told to Selectively Fund Pensions
GMG CAPITAL PARTNERS: Files for Chapter 11 in Manhattan
HOWREY LLP: Judge Approves Settlements with Citibank, Baker
IDERA PHARMACEUTICALS: To Sell $75 Million of Securities
INSPIREMD INC: Presented at Rodman & Renshaw Conference
HD SUPPLY: Files Form 10-Q, Incurs $72MM Net Loss in 2nd Quarter
IBAHN CORP: Has Interim Approval for $1.5 Million Revolving Credit
INTERFAITH MEDICAL: State Delays Brooklyn Hospital Closing
JOHN CLEMENTE: NJ High Court Won't Nix Fees in Doc's Divorce Case
KINGSBURY CORP: Nov. 7 Hearing on Bid to Convert or Dismiss Case
LANDAUER HEALTHCARE: Panel Retains Landis Rath as Counsel
LANDAUER HEALTHCARE: Slams Creditors' Objections to Sale Process
LEHMAN BROTHERS: Bankruptcy Nears Fifth Anniversary
LEXARIA CORP: Incurs $58K Net Loss in July 31 Quarter
LIFE UNIFORM: Taps Brown Smith Wallace as Wind-Down Accountants
LIFE UNIFORM: Hires Crowe Horwath to Prepare Tax Returns
LONE PINE: Enters Into Forbearance Agreement with Senior Lenders
MERCANTILE BANCORP: Securities Holders Object to Bank & Logo Sale
MERCANTILE BANCORP: Securities Holders Committee Hires PrinceRidge
MERCANTILE BANCORP: Securities Holders Tap Griffin as Advisor
METROPOLITAN NAT'L: Bankruptcy Court OKs Stock Purchase Agreement
MOSS FAMILY: Plan Provides Full Payment to Unsecured Creditors
MSD PERFORMANCE: To Operate With Lenders' Cash
MTR GAMING: Moody's Lifts CFR to B3 on News of Eldorado Merger
NATIONAL ENVELOPE: Wins Approval to Sell Assets for $70 Million
NATIONAL ENVELOPE: Bankruptcy Court OKs Sale of Assets to Cenveo
NEIMAN MARCUS: Fitch Puts 'B' IDR on Rating Watch Negative
NEONODE INC: Wellington Held 7.6% Equity Stake at Aug. 31
NESBITT PORTLAND: U.S. Trustee Balks at Plan Confirmation
NET TALK.COM: Incurs $14.7 Million Net Loss in 2012
NETBANK INC: FDIC Wins Another Appeal Over Tax-Sharing Agreements
NET ELEMENT: Intends to Buy 10% Minority Interest in TOT Group
ORCHARD SUPPLY: Changes Name to "OSH 1 Liquidating Corporation"
NUVERRA ENVIRONMENTAL: Curtis V. Trink Law Firm Files Class Action
OVERSEAS SHIPHOLDING: Execs Dodge Suit Claiming They Hid Tax Debt
PATRIOT COAL: Delays Filing of Plan Disclosures Until Oct. 2
PATRIOT COAL: Wants to Speed Up Ex-Parent's Discovery
PATRIOT COAL: DIP Financing Extended to December 31
PHILS CAKE: Sutherland Acquires Southern Commerce Bank's Claim
PROSPECT HOLDING: S&P Assigns 'B+' ICR; Outlook Stable
QUICKSILVER RESOURCES: Southeastern Asset Holds 5.3% Equity Stake
REVOLUTION DAIRY: Can Use Cash Collateral Thru Oct. 31
RHYTHM AND HUES: Deadline to File Plan Extended to Sept. 20
RICHMOND, CA: Eminent Domain Plan Heads to Court Showdown
ROSETTA GENOMICS: To Issue 853,700 Ordinary Shares Under Plan
RURAL/METRO CORP: Has Final Authority to Obtain $105MM Loans
RURAL/METRO CORP: Can Continue Using Cash Collateral
RURAL/METRO CORP: Creditors' Panel Taps Brown Rudnick as Counsel
RURAL/METRO CORP: $5.53MM Sale of Scottsdale Property Okayed
SEANERGY MARITIME: Shareholders Elect Two Directors
SEGA BIOFUELS: Wood Pellet Maker Files Ch.11 in Waycross, Georgia
SIGNATURE APPAREL: Iconix Loses Bid to Disqualify Olshan Firm
SINCLAIR BROADCAST: FMR LLC Owns 10.4% of Class A Shares
SHAMROCK-HOSTMARK: Can Use Cash Collateral Thru Sept. 30
SCICOM DATA: Gets OK to Hire Lighthouse Mgmt. and Shenehon Co.
SMIC LTD: Bankr. Court Issues Findings in Corral Group Suit
SPRINT CORP: Lenders Waive Default of Leverage Compliance Test
STEREOTAXIS INC: Franklin Resources Holds 4.6% Equity Stake
SYNTAX-BRILLIAN: Sharp Resolves LCD Price-Fixing Claims
T SORRENTO: Fourth Amended Chapter 11 Plan Declared Effective
T.M. REAL ESTATE: TD Bank Seeks Dismissal of Chapter 11 Case
THQ INC: Tattoo Artist Appeals Slashed IP Claim in Bankruptcy
THQ INC: Assets Put Up for Live Auction; Sept. 17 Bid Deadline Set
TITAN CRUISE: Insurer Didn't Act in Bad Faith on Lender Claims
TOPPS COMPANY: Moody's Assigns 'B2' CFR; Outlook Stable
TRAINOR GLASS: To Liquidate Remaining Assets Under Plan
TUNICA-BILOXI GAMING: Low Earnings Cue Moody's to Cut CFR to Caa2
UNITED SILVER: Secured Lender Commences Legal Action Over Debt
VAIL LAKE: Seeks Order Striking Motion to Dismiss Chapter 11 Case
VISUALANT INC: Board Ratifies Resignations of Directors
WENDY'S CO: S&P Retains 'B+' CCR Following $225MM Upsize
WESTERN CAPITAL: Has Exclusive Right to File Plan Thru Dec. 6
WESTERN CAPITAL: Can Hire Sean Nelson as Special Counsel
WESTERN FUNDING: BMO Does Not Consent to Cash Collateral Use
WILSHIRE COURTYARD: Bankr. Court Jurisdiction in Tax Disputes
XZERES CORP: Incurs $1.6 Million Net Loss in May 31 Quarter
YELLOWSTONE MOUNTAIN: Founder Seeks $3.3MM in Legal Fees
YRC WORLDWIDE: Solus Held 11.7% Equity Stake at Aug. 31
YSC INC: Seeks Cash Collateral Use to Continue Hotel Operations
* August Closes With Only Two Corporate Bond Defaults
* Triple Five Strikes Deal to Keep Control of Vegas Land
* Morgan Drexen Responds to Article on CFB Use of Trustee Program
* Moody's Sees Recovery Ahead for Mohawk and Steelcase
* Moody's Notes Stable Financial Medians for Toll Roads in 2012
* Ohio Foreclosure Filings Up 19% in August 2013, Report Shows
* U.S. Foreclosure Filings Down 2% in August 2013, Report Shows
* Bankruptcy Courts Approve Prime Clerk as Noticing Agent
* Crowe Horwath Elects 16 Partners & Three New Directors
* Texas Super Lawyers Recognizes SRW's Three Founding Partners
* BOOK REVIEW: Bankruptcy Crimes
*********
1ST FINANCIAL: Amends Second Quarter Form 10-Q
----------------------------------------------
1st Financial Services Corporation has amended its quarterly
report on Form 10-Q for the period ended June 30, 2013, to reflect
an adjustment to the Company's financial statements, specifically
the carrying value of held-to-maturity investment securities, in
accordance with a directive issued by the Federal Deposit
Insurance Corporation, requiring the Company's subsidiary,
Mountain 1st Bank & Trust Company (the Bank) to amend its June
2013 Call Report.
As previously reported in the Company's Form 10-Q filed with the
U.S. Securities and Exchange Commission on Aug. 14, 2013, during
the quarter ended June 30, 2013, the Company transferred certain
available-for-sale securities to a held-to-maturity position.
Following consultation with the FDIC and the Company's independent
registered accounting firm, management determined the appropriate
date upon which to record the transfer was April 30, 2013. On
Aug. 20, 2013, after the filing dates of both the Bank's June 2013
Call Report and the Company's Form 10-Q, the FDIC directed the
Bank to amend its Call Report to reflect the fair value of those
transferred securities as of June 21, 2013. The Call Report was
amended and resubmitted by the Bank on Aug. 28, 2013. This
Amendment reflects those changes to the amended Call Report.
The management has reevaluated its conclusion on the effectiveness
of the Company's disclosure controls and procedures in light of
this Amendment and has concluded the disclosure controls and
procedures are effective. Reevaluation noted the cause for this
Amendment is the consideration of information not available until
after the initial filing date of the Form 10-Q, not a lapse in
control. The established disclosure controls and procedures
facilitated the timely identification, evaluation and reporting
necessary to ensure the Company's financial statements and related
disclosures are reliable.
A copy of the amended Form 10-Q is available for free at:
http://is.gd/x2QON6
About First Financial
Elizabethtown, Kentucky-based First Financial Service Corporation
is the parent bank holding company of First Federal Savings Bank
of Elizabethtown, which was chartered in 1923. The Bank serves
six contiguous counties encompassing central Kentucky and the
Louisville metropolitan area, through its 17 full-service banking
centers and a commercial private banking center.
In its 2012 Consent Order, the Bank agreed to achieve and maintain
a Tier 1 capital ratio of 9.0 percent and a total risk-based
capital ratio of 12.0 percent by June 30, 2012.
"At December 31, 2012, the Bank's Tier 1 capital ratio was 6.53%
and the total risk-based capital ratio was 12.21%. We notified
the bank regulatory agencies that one of the two capital ratios
would not be achieved and are continuing our efforts to meet and
maintain the required regulatory capital levels and all of the
other consent order issues for the Bank," the Company said in its
annual report for the year ended Dec. 31, 2012.
First Financial disclosed a net loss attributable to common
shareholders of $9.44 million in 2012, a net loss attributable to
common shareholders of $24.21 million in 2011 and a net loss
attributable to common shareholders of $10.45 million in 2010.
The Company's balance sheet at June 30, 2013, showed $692.08
million in total assets, $673.09 million in total liabilities and
$18.98 million in total stockholders' equity.
Crowe Horwath LLP, in Louisville, Kentucky, said in its report on
the consolidated financial statements for the year ended Dec. 31,
2012, "[T]he Company has recently incurred substantial losses,
largely as a result of elevated provisions for loan losses and
other credit related costs. In addition, both the Company and its
bank subsidiary, First Federal Savings Bank, are under regulatory
enforcement orders issued by their primary regulators. First
Federal Savings Bank is not in compliance with its regulatory
enforcement order which requires, among other things, increased
minimum regulatory capital ratios. First Federal Savings Bank's
continued non-compliance with its regulatory enforcement order may
result in additional adverse regulatory action."
250 AZ: Does Not Have Ownership Rights to $65-Mil. TICs Loan
------------------------------------------------------------
Bankruptcy Judge Eileen W. Hollowell concluded that 250 AZ, LLC,
has no tenancy-in-common interests in a 29-story office building
known as the Chiquita Center and, therefore, the Center is not
property of the Debtor's bankruptcy estate. As a result, the $65
million loan extended to the TICs in October 2006 cannot be
restructured in the Debtor's Chapter 11, the judge held.
The Loan was extended by Wachovia Bank, National Association. It
was later assigned to Wells Fargo as trustee of a securitized
trust. Some, but not all, of the TICs subsequently assigned their
TIC interests to the Debtor shortly after its formation in
November 2012.
A copy of Judge Hollowell's Aug. 6, 2013 Memorandum Decision is
available at http://is.gd/QkxEJ6from Leagle.com.
About 250 AZ, LLC
250 AZ, LLC, filed a Chapter 11 petition (Bankr. D. Ariz. Case No.
13-00851) in Tucson, Arizona, on Jan. 22, 2013. In its schedules,
the Debtor disclosed $25 million in assets and $70.8 million in
liabilities. 250 AZ owns an 84.70818% tenant in common interest
in a 29-story office building located at 250 East Fifth Street, in
Cincinnati, Ohio.
The Debtor is represented by Dennis M. Breen, III, Esq., at
Breen Olson & Trenton, LLP as counsel.
The U.S. Trustee said an official committee of unsecured creditors
has not been appointed because an insufficient number of persons
holding unsecured claims against the company have expressed
interest in serving on a committee.
ALLEGION US: Moody's Assigns 'Ba1' CFR & Rates $1.3BB Debt 'Ba1'
----------------------------------------------------------------
Moody's Investors Service assigned a Ba1 Corporate Family Rating
and Ba1-PD Probability of Default Rating to Allegion U.S. Holding
Company Inc. Concurrently, Moody's assigned Ba1 ratings to the
company's $500 million senior secured revolving credit facility,
$500 million term loan A, and $300 million term loan B. Moody's
also assigned a Speculative-Grade Liquidity (SGL) Rating of SGL-2.
The ratings outlook is stable.
Moody's anticipates that the proceeds from the proposed $500
million term loan A, due 2018 and $300 million term loan B, due
2021 will be used execute the spin-off from Ingersoll Rand.
The Ba1 Corporate Family Rating reflects Allegion's modest
adjusted debt leverage at 3.6 times at the close of the
transaction, ample free cash flow generation, respectable interest
coverage, and industry leading EBITDA margins. Additionally, the
Ba1 Corporate Family Rating considers expected conservative
balance sheet management. Moreover, the rating benefits from
positive industry dynamics and somewhat diversified revenue
streams by end-market as the company caters to residential,
commercial, and institutional (including government) segments. At
the same time, the rating is constrained by Allegion's anticipated
negative tangible net worth, adjusted debt to capitalization of
above 100%, and weak asset coverage of debt instruments. Also, as
a newly formed entity, the company does not have any stand-alone
operating history. Furthermore, the rating is negatively impacted
by Allegion's customer concentration as Moody's believes the U.S.
residential segment relies heavily on sales from big box stores.
The following rating actions were taken (LGD point estimates are
subject to change and all ratings are subject to the execution of
the transaction as currently proposed and Moody's review of final
documentation):
Corporate Family Rating, assigned Ba1;
Probability of Default Rating, assigned Ba1-PD;
$500 million Senior Secured Revolving Credit Facility, due 2018,
assigned Ba1 (LGD3, 38%);
$500 million Senior Secured Term Loan A, due 2018, assigned Ba1
(LGD3, 38%);
$300 million Senior Secured Term Loan B, due 2021, assigned Ba1
(LGD3, 38%);
Speculative-Grade Liquidity Rating, assigned SGL-2.
Ratings Rationale:
The Ba1 Corporate Family Rating reflects Moody's expectation for
conservative balance sheet management such that adjusted debt to
EBITDA declines below 3.6 times. Additionally, Moody's projects
that Allegion's adjusted free cash flow to debt will be maintained
above 9% and adjusted EBITA to interest expense above 5 times.
Additionally, the rating considers Allegion's size and market
position as the second largest security products and solution
provider in the world. Allegion has embedded itself into the new
commercial and residential construction market by working with
architects, end user representatives, and homebuilders. The
company's financial performance is expected to benefit from
positive industry dynamics including the rebound in the U.S.
residential and commercial construction markets, school safety
initiatives, and urbanization across the world that leads to
increase in demand for security products.
However, pockets of economic weakness are expected to continue,
especially in Western Europe including Italy and France -- the
company's leading European markets. Europe represents about 18% of
the company's revenues. Additional constraints to the rating are
Allegion's tangible net worth that Moody's projects will remain
negative at least through 2016 and debt to capitalization that is
anticipated to be above 100% in 2013 but slightly below 100% in
2014. Moreover, the rating is negatively impacted by the company's
product concentration as all of its products are related to the
security industry.
The Speculative-Grade Liquidity Rating of SGL-2 indicates a good
liquidity profile over the next 12-18 months. During this period,
Allegion is projected to generate good free cash flow, have no
outstandings under its proposed $500 million revolving credit
facility, and have comfortable headroom under the proposed
financial covenants.
The stable outlook is based on Moody's expectation of steady
revenue growth in the 2-4% range over the next 12-18 months,
conservative balance sheet management, and a good liquidity
profile.
The company is comfortably positioned in the Ba1 rating category
and a near-term upgrade is unlikely. However, the ratings could be
upgraded if the company continues to grow its revenue base, market
presence, as well as product offerings. Additionally, for the
ratings to be upgraded, adjusted debt to EBITDA would have to
decline and be maintained below 3 times and free cash flow to debt
above 10%.
The ratings could be downgraded if the company's adjusted debt
leverage increases and is maintained above 4 times and free cash
flow to debt declines below 7%. Additionally, deterioration in
competitive position, EBITDA margins, revenue, or liquidity could
lead to a ratings downgrade.
The principal methodology used in this rating was the Global
Manufacturing Industry Methodology published in December 2010.
Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.
Allegion plc -- parent of Allegion U.S. Holding Company Inc. -- is
headquartered in Dublin, Ireland. The company is a global provider
of security products and solutions serving the residential,
commercial, government, and institutional markets. Moody's
projects revenues for 2013 of $2.1 billion.
ALLEGION PLC: S&P Assigns BB+ CCR & Rates $500MM Unsec. Notes BB+
-----------------------------------------------------------------
Standard & Poor's Ratings Services said that it assigned its 'BB+'
corporate credit rating to Ireland-based Allegion PLC. The
outlook is stable.
At the same time, S&P assigned a 'BBB' issue-level rating to the
company's $1.3 million secured bank facilities, consisting of a
$500 million five-year revolving credit facility, a $500 million
five-year term loan A, and seven-year $300 million term loan B.
S&P also assigned a 'BB+' issue-level rating to the company's
proposed $500 million of senior unsecured notes. Allegion US
Holding Co. is the issuer of the bank facility and the unsecured
notes.
S&P believes Allegion will maintain credit measures over the next
several years in a relatively narrow range of 3x to 3.5x debt to
EBITDA and FFO to debt of about 20% while maintaining strong
profitability and adequate liquidity. S&P expects debt leverage
will range toward the higher end of the range immediately after
the company completes small bolt-on acquisitions or at the trough
of a business cycle.
"We view the company's not fully developed financial policy as a
constraint to an investment grade rating at this time. An upgrade
could occur if management demonstrated its commitment (i.e.,
through debt repayment) to maintaining debt leverage of 2.75x or
lower and FFO to debt of 30% or more throughout the cycle," said
Standard & Poor's credit analyst Thomas Nadramia.
S&P also views a downgrade as unlikely in the next year unless
Allegion adopts a more aggressive financial policy than expected,
resulting in sustained leverage of greater than 3.75x on a
sustained basis due to debt financed acquisitions, aggressive
dividends, or shareholder friendly buybacks.
ALLEN FEINGOLD: Says Assessed Fees Should Be Dischargeable
----------------------------------------------------------
Law360 reported that a disbarred Pennsylvania attorney, who once
choked a judge, asked the Eleventh Circuit on Sept. 11 to
determine that the money requested by the Disciplinary Board of
the Supreme Court of Pennsylvania to cover the cost of the
proceedings against him is debt that is dischargeable in his
Chapter 7 bankruptcy.
According to the report, Allen Feingold, who represented himself
before the appeals court, said that the $45,000 requested by the
disciplinary board should not be considered sanctions, which are
not dischargeable under the bankruptcy code.
The case is The Disciplinary Board of the v. Allen Feingold, 12-
13817 (11th Cir.).
AMERICAN AIRLINES: Judge Confirms Plan to Merge with US Airways
---------------------------------------------------------------
Joseph Checkler, writing for The Wall Street Journal, reported
that a judge on Sept. 12 confirmed AMR Corp.'s plan to exit
bankruptcy through a merger with US Airways Group Inc., leaving a
U.S. antitrust lawsuit as the final, if formidable, barrier to the
deal.
According to the report, Judge Sean H. Lane of U.S. Bankruptcy
Court in Manhattan's approval means that if AMR and US Airways win
the Justice Department suit or settle with the government, the
merger plan can go into effect.
"The broad support of this plan could be put at unnecessary risk
if confirmation is delayed," Judge Lane said, citing that most
parties involved in the case support the merger, the report
related.
The Justice Department says the merger, which would create the
world's largest airline, would stifle airline competition and
create higher fares and fees for customers, as well as fewer
flying options, the report added.
The judge did reject a proposed $19.9 million severance payment to
outgoing AMR Chief Executive Tom Horton, calling it an
"impermissible" provision to the plan, the report related. A
federal bankruptcy watchdog had objected to the payment.
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 U.S. U.S. Department of Justice, however, has launched an
antitrust challenge to the proposed merger.
Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by AMR Corp. and its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
AMERICAN AIRLINES: AMR, US Airways File Answer to Antitrust Suit
----------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that AMR Corp. and US Airways Group Inc. filed their
answers Sept. 10 to the antitrust complaint filed Aug. 13 by the
U.S. Justice Department to block the two airlines from merging
under AMR's bankruptcy reorganization plan. As an affirmative
defense, AMR argues that the merger is in the public interest
because it will bestow $500 million in benefits on the flying
public while creating a merged airline to compete effectively with
the country's two other major hub-and-spoke airlines.
DOJ Merger Suit Ignores Reality
Law360 reported that AMR and US Airways on Sept. 10 accused the
U.S. Department of Justice of ignoring the reality of the
difficulties facing the airline industry in its bid to block the
carriers' proposed $11 billion merger. The airlines hit back at
the DOJ's challenge at the same time they told AMR's unsecured
creditors that they intended to ask their boards to extend the
termination date beyond its current Dec. 17 expiration, the Wall
Street Journal reported, citing two unnamed sources.
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 U.S. U.S. Department of Justice, however, has launched an
antitrust challenge to the proposed merger.
Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by AMR Corp. and its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
AMERICAN AMEX: Updates Plan Outline, Adequacy Hearing on Oct. 1
---------------------------------------------------------------
American Amex, Inc. filed a Disclosure Statement dated Sept. 2,
2013, in support to its Plan of Reorganization to the U.S.
Bankruptcy Court for the District of Oregon. Ray Weilage signed
the Plan document.
The updated Disclosure Statement includes more details on (i) the
Debtor's dispute with Sable Palm Development and (ii) an agreement
with Erwin Singh Braich, among other things.
The Debtor and Sable Palm are involved in a litigation for the
entitlement and ownership of the Buffalo Mine in the Grant County
Circuit Court. The Debtor formerly borrowed money from Sable
Palm, and the parties stipulated a settlement which gave Sable
Palm rights of possession upon default of the Debtor. The Debtor
however complained that Sable Palm started pursuit of that
ownership prior to the Debtor's default on its obligation. After
a trial, Judge Willaim Cramer, Jr., held that the claim of Sable
Palm is determined to an equitable mortage only and the Debtor is
the legal owner of the Buffalo Mine.
The Debtor now reveals that Sable Palm has retained new counsel,
who has obtained substantial discovery from it. The Debtor adds
that Sable Palm has previously filed a motion to dismiss in the
case, and may do so again in an attempt to manipulate its attempts
to reorganize. Regardless, Sable Palm will be paid in full under
the Plan, the Debtor specifies. Sable Palm's claim is $3.5
million, more or less.
The Debtor also discloses that it allegedly had an agreement with
Erwin Singh Braich, whereby Braich would purchase the entire mine
property. The terms of the so-called "agreement" were nebulous,
according to Debtor. The litigation was pending in the Grant
County Court, and Judge Dunn vacated the stay to allow that suit
to conclude. Mr. Braich and Debtor subsequently resolved the
litigation and Braich's contract is the basis of the Plan
proposed. If Braich decides not to purchase the mine, however,
the Debtor reveal that it has several "backup bidders" who would
be willing to do so.
A full-text copy of the Disclosure Statement dated Sept. 2 is
available for free at:
http://bankrupt.com/misc/AMERICANAMEX_DSSept2.PDF
As previously reported by The Troubled Company Reporter, American
Amex earlier filed a Disclosure Statement dated Jan. 30, 2013. It
essentially reveals that payments and distributions under the Plan
will be funded by the sale of the Buffalo Mine, and that the Plan
provides for payment of 100% of all allowed claims.
A further hearing on the adequacy of the Disclosure Statement has
been scheduled for Oct. 1, 2013, at 10:00 a.m.
About American Amex
American Amex, Inc., filed for Chapter 11 protection petition
(Bankr. D. Ore. Case No. 12-30656) on Feb. 1, 2012. The Law
Offices of D. Blair Clark PLLC has been tapped as counsel.
The Debtor disclosed $30 million in assets and $10.5 million in
liabilities as of the Chapter 11 filing.
According to the Debtor, it is the legal owner of a mine in Grant
County, Oregon, known historically as the "Buffalo Mine."
AMERICAN CAPITAL: Fitch to Rate $350MM Sr. Unsecured Notes 'BB-'
----------------------------------------------------------------
Fitch Ratings expects to rate American Capital, Ltd's (ACAS)
$350 million senior unsecured notes due September 2018 'BB-'.
Proceeds from the issuance are expected to be used for general
corporate purposes, including new portfolio investments.
Fitch expects the issuance to have minimal impact on leverage due
to the $150 million scheduled amortization payment on ACAS'
secured term loan which took place in August 2013. Leverage is
expected to increase from 0.11x at June 30, 2013 to approximately
0.15x on a pro forma basis, all else equal. A full list of rating
actions is at the end of this press release.
Key Rating Drivers
The equalization of the unsecured ratings with ACAS' long-term
Issuer Default Rating (IDR) reflects ACAS' relatively low leverage
and the increasing amount of unsecured funding in the capital
structure. Taking into account the scheduled amortization payment,
unsecured debt is expected to be about 40% of total debt following
the new issuance. Fitch believes the unsecured component will
improve ACAS' funding flexibility and expects unsecured debt as a
percentage of total debt to increase in the future as ACAS'
secured credit facilities amortize over time.
ACAS' long-term IDR has a Stable Rating Outlook reflecting its
improved operating performance, driven by increased income from
its asset management strategies, appropriate leverage relative to
equity investment exposure, improved debt maturity profile, and
stronger liquidity, given the addition of bank revolver capacity.
Rating Sensitivities
Positive rating action for ACAS would be driven by its ability to
further improve its funding flexibility, through equity raises and
unsecured debt issuance through economic cycles. Positive rating
action could also result from stronger asset quality trends and a
decline in the proportion of equity investments in the portfolio,
which yield more valuation volatility, particularly in periods of
stress. That said, ACAS' leverage is currently well below the peer
average, which does provide for some cushion against valuation
declines. Lastly, Fitch will monitor ACAS' on-going movement
towards increased management revenues as opposed to traditional
balance sheet investments.
Conversely, negative rating action for ACAS could be driven by
deterioration in asset quality or core operating performance,
increases in portfolio concentrations or equity holdings without
commensurate reductions in leverage, an inability to access the
unsecured markets, and/or the recognition of sizeable realized
losses or unrealized portfolio depreciation which forces leverage
above management targets for extended periods.
ACAS is an internally managed BDC, headquartered in Bethesda, MD,
and completed its initial public offering in August 1997. ACAS had
$6.3 billion of assets as of June 30, 2013. The company's stock is
listed on Nasdaq under the ticker ACAS.
Fitch expects to assign the following ratings:
American Capital, Ltd.:
-- Senior unsecured notes 'BB-'.
Fitch currently rates ACAS as follows:
-- Long-term IDR 'BB-';
-- Secured debt 'BB+';
The Rating Outlook is Stable.
AMERICAN CAPITAL: Moody's Rates Proposed $350MM Senior Notes 'B3'
-----------------------------------------------------------------
Moody's Investors Service assigned a B3 rating to American
Capital, Ltd.'s proposed $350 million senior unsecured notes due
2018. American Capital's B2 corporate family and B2 senior secured
ratings were affirmed and the firm's rating outlook remains
stable.
Ratings Rationale:
The B3 rating of the unsecured notes is based upon their terms and
priority in American Capital's capital profile. The unsecured
notes are structurally subordinated to the firm's secured and
subsidiary indebtedness, but note holders benefit from high asset
coverage that strengthens recovery prospects in a default
scenario.
American Capital's ratings are supported by its expertise and
scale in investing in private middle market companies and its
diverse (both by geography and business sector) investment
portfolio. American Capital benefits from its substantial equity
base as mandated by business development company ("BDC")
regulations. The firm has reduced leverage in the last few years,
resulting in a high asset/debt coverage ratio that provides
significant support to its ability to repay debt obligations, even
considering the new debt issuance. American Capital has also
diversified its revenue sources by growing its asset management
business, which Moody's views has having a less volatile earnings
profile.
Credit concerns include the inherent risks of the BDC business
model. Similar to other BDCs, American Capital's portfolio
investments are highly levered and illiquid and are fair valued
each quarter, which can heighten risks to earnings and capital
during periods of economic stress. A majority of American
Capital's control investments are subordinated debt and equity
securities whose valuations are more volatile and less liquid than
those of other BDCs that invest primarily in senior debt
securities.
The stable rating outlook reflects American Capital's strong asset
coverage and moderate medium term debt maturity profile.
American Capital's ratings could be upgraded if the firm further
diversifies revenues and reduces the potential volatility of
earnings while maintaining low leverage. Ratings could be
downgraded if the company writes-down investments, substantially
reducing capital and violating covenants.
American Capital Ltd. is an investor in middle market businesses
and manager of alternative asset funds.
The principal methodology used in this rating was Finance Company
Global Rating Methodology published in March 2012.
AMERICAN CAPITAL: S&P Rates $350MM Sr. Unsecured Notes 'B+'
-----------------------------------------------------------
Standard & Poor's Ratings Services said it assigned its 'B+'
senior unsecured debt rating on American Capital Ltd.'s (ACAS)
proposed $350 million notes due in 2018. The long-term issuer
credit rating on ACAS remains 'BB-'. The one notch differential
represents the structural subordination of the senior unsecured
notes relative to the company's outstanding $450 million senior
secured term loan.
Although total debt would increase to $800 million with the
proposed notes, the company's capital ratios on a pro forma basis
-- with 0.14x reported debt to equity and 0.16x debt to adjusted
equity -- would remain stronger than those of most business
development companies S&P rates. ACAS intends to use the proceeds
of the senior unsecured notes for general corporate purposes,
including growing its portfolio.
S&P raised its counterparty credit and senior secured debt ratings
on ACAS to 'BB-' from 'B+' on Aug. 7, 2013, reflecting its view
that the firm will continue to improve its business risk profile
as a hybrid with both on-balance-sheet investments and increasing
fee income from managing third-party funds. S&P's upgrade also
reflected the company's improved financial risk profile following
a recent amendment to its credit facility. For the six months
ended June 30, 2013, ACAS generated approximately $67 million of
revenue from funds management (which primarily is in the form of
dividends or fee income), which represented 26% of its total
revenue. This percentage is up significantly from 15.9% in 2012
and 8.6% in 2011.
S&P's rating on ACAS reflects the company's hybrid business
profile, low leverage compared with its business development
company peers', improving earnings and cash flow, and adequate
liquidity and funding profile. ACAS' high level of nonaccrual
loans; exposure to equity investments, especially in finance
companies and structured securities; concentration within the top
10 investments; and predominantly illiquid investments within its
private finance investment portfolio offset these strengths.
RATINGS LIST
American Capital Ltd.
Issuer Credit Rating BB-/Stable/--
New Rating
American Capital Ltd.
Senior Unsecured
$350 mil. notes due 2018 B+
AMERICAN ROADS: Detroit Tunnel Owner Implements Chapter 11 Plan
---------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that American Roads LLC, the owner of four toll bridges in
Alabama and the mile-long Detroit Windsor Tunnel, implemented a
Chapter 11 reorganization plan on Sept. 9 after getting a
bankruptcy judge's signed confirmation order on Aug. 30.
According to the report, the plan gave ownership to bond insurer
Syncora Guarantee Inc. under a deal worked out before the July 25
bankruptcy filing. Syncora, the only creditor entitled to vote on
the plan, took ownership in exchange for $334 million in swap
liability. The bankruptcy judge ruled just before confirmation
that an ad hoc group of bondholders had no right to appear or be
heard in bankruptcy court objecting to the plan. The plan
extinguished $496 million in bonds without giving anything to the
holders.
About American Roads
American Roads LLC, aka Alinda Roads LLC, which operates highways
including the mile-long Detroit Windsor Tunnel linking the U.S.
with Canada, sought bankruptcy court protection (Bankr. S.D.N.Y.
Case No. 13-12412) in the Southern District of New York on
July 25, 2013, citing $830 million in debt related to swaps and
bonds. The case is assigned to Judge Burton R. Lifland.
Sean A. O'Neal, Esq., and Louis A. Lipner, Esq., at Cleary
Gottlieb Steen & Hamilton, LLP, represent the Debtors. Greenhill
& Co., LLC, and Protiviti, Inc., serve as the Debtors' financial
advisor.
An Hoc Committee of Bondholders, consisting of certain holders of
Series G-1 Senior Secured Bonds and Series G-2 Senior Secured
Bonds issued by American Roads LLC, is represented by Bojan
Guzina, Esq., Andrew F. O'Neill, Esq., Allison Ross Stromberg,
Esq., Larry J. Nyhan, Esq., Nicholas K. Lagemann, Esq., and Brian
J. Lohan, Esq., at Sidley Austin LLP.
ARI-RC 2 LLC: Updated Case Summary & Creditors' Lists
-----------------------------------------------------
Lead Debtor: ARI-RC 2, LLC
2940 Luna Ave
San Diego, CA 92117
Bankruptcy Case No.: 13-15868
Chapter 11 Petition Date: September 9, 2013
Court: United States Bankruptcy Court
Central District of California (San Fernando Valley)
Debtors' Counsel: John-Patrick M. Fritz, Esq.
Daniel H. Reiss, Esq.
LEVENE NEALE BENDER RANKIN ET AL
10250 Constellation Blvd., Ste. 1700
Los Angeles, CA 90067
Tel: (310) 229-1234
Fax: (310) 229-1244
E-mail: jpf@lnbrb.com
dhr@lnbyb.com
Estimated Assets: $10,000,001 to $50,000,000
Estimated Debts: $10,000,001 to $50,000,000
Affiliates that simultaneously filed separate Chapter 11
petitions:
Debtor Case No.
------ --------
ARI-RC 5, LLC 13-15869
Assets: $10,000,001 to $50,000,000
Debts: $10,000,001 to $50,000,000
ARI-RC 8, LLC 13-15871
Assets: $10,000,001 to $50,000,000
Debts: $10,000,001 to $50,000,000
ARI-RC 10, LLC 13-15872
Assets: $10,000,001 to $50,000,000
Debts: $10,000,001 to $50,000,000
ARI-RC 19, LLC 13-15873
ARI-RC 20, LLC 13-15875
Assets: $10,000,001 to $50,000,000
Debts: $10,000,001 to $50,000,000
ARI-RC 22, LLC 13-15876
Assets: $10,000,001 to $50,000,000
Debts: $10,000,001 to $50,000,000
ARI-RC 26, LLC 13-15877
ARI-RC 31, LLC 13-15878
ARI-RC 34, LLC 13-15879
ARI-RC 35, LLC 13-15881
Assets: $10,000,001 to $50,000,000
Debts: $10,000,001 to $50,000,000
ARI-RC 30, LLC 13-15883
Assets: $10,000,001 to $50,000,000
Debts: $10,000,001 to $50,000,000
The petitions were signed by Kathleen Guerrero, trustee.
A. ARI-RC 2, LLC's List of 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Patriot Air Systems $13,600
5251 Verdugo Way, Ste H
Camarillo, CA 93012
Southern Cal Edison $10,073
P.O. Box 6109-Credit
Covina, CA 91722
Jemm Investments $10,000
3636 Nobel Drive, #350
San Diego, CA 92122
California American $7,000
Water
TNP Property Manager $4,977
LLC
Empire Building $4,928
Services
Support Services of $4,720
America, Inc.
CAM Services $4,704
City of Thousand $1,955
Oaks Water
Red Hawk Fire & $680
Security
Inland Pacific $650
Roofing
Lighting Technology $581
Services
Arcadia Property $524
Services Inc.
Amtech Elevator $500
Services
Waste Management- $389
GI Industries
Skyline Pest $255
Control
Mr. Plant $195
Protection One $85
Verizon California $80
AT & T $20
B. A copy of ARI-RC 5's list of its 20 largest unsecured creditors
filed together with the petition is available for free at
http://bankrupt.com/misc/cacb13-15869.pdf
C. A copy of ARI-RC 8's list of its 20 largest unsecured creditors
filed together with the petition is available for free at
http://bankrupt.com/misc/cacb13-15871.pdf
D. A copy of ARI-RC 10's list of its 10 largest unsecured
creditors filed together with the petition is available for free
at http://bankrupt.com/misc/cacb13-15872.pdf
E. A copy of ARI-RC 20's list of its nine largest unsecured
creditors filed together with the petition is available for free
at http://bankrupt.com/misc/cacb13-15875.pdf
F. A copy of ARI-RC 22's list of its 20 largest unsecured
creditors filed together with the petition is available for free
at http://bankrupt.com/misc/cacb13-15876.pdf
G. A copy of ARI-RC 35's list of its nine largest unsecured
creditors filed together with the petition is available for free
at http://bankrupt.com/misc/cacb13-15881.pdf
H. A copy of ARI-RC 30's list of its 20 largest unsecured
creditors filed together with the petition is available for free
at http://bankrupt.com/misc/cacb13-15883.pdf
ARMORWORKS ENTERPRISES: Creditors Urge Court to Appoint Trustee
---------------------------------------------------------------
Law360 reported that creditors of ArmorWorks Enterprises LLC urged
an Arizona bankruptcy judge on Sept. 9 to appoint a Chapter 11
trustee amid a longtime feud over control of the company, offering
in exchange to withdraw their motion to dismiss the military
contractor's petition.
C Squared Partners LLC and affiliate Anchor Management LLC claim
that a neutral voice is needed in ArmorWorks' bankruptcy
proceedings, given the allegations of mismanagement and other
ongoing disputes surrounding the company, according to the motion,
the report related.
About ArmorWorks Enterprises
Military armor systems provider ArmorWorks Enterprises, LLC, and
affiliate TechFiber LLC sought Chapter 11 protection (Bankr. D.
Ariz. Case Nos. 13-10332 and 13-10333) in Phoenix on June 17,
2013, along with a plan that resolves a dispute with a minority
shareholder and $3.5 million of financing that would save the
company from running out of cash.
ArmorWorks develops advanced survivability technology and designs
and manufactures armor and protective products. ArmorWorks has
produced over 1.25 million ceramic armor and composite armor
protection components for a variety of personnel armor, aircraft,
and vehicle applications.
The Debtors have tapped Todd A. Burgess, Esq., at Gallagher &
Kennedy, as counsel; and MCA Financial Group, Ltd., as financial
advisor. ArmorWorks estimated $10 million to $50 million in
assets and liabilities.
As of May 26, 2012, ArmorWorks had total assets of $30.9 million
and total liabilities of $12.04 million.
The Plan would resolve the ongoing dispute with C Squared by
allowing ArmorWorks to redeem C Squared's 40% minority interest,
or alternatively, allow C Squared to purchase the 60% majority
interest of AWI.
ArmorWorks and TechFiber sought and obtained an order (i)
transferring the In re TechFiber, LLC chapter 11 case to the
Honorable Brenda Moody Whinery, the judge assigned to the
ArmorWorks Chapter 11 case, and (ii) authorizing the joint
administration of the Debtors' cases.
ASP HHI: Moody's Affirms 'B2' CFR; Outlook Stable
-------------------------------------------------
Moody's Investors Service affirmed the ratings of ASP HHI
Acquisition Co., Inc. - Corporate Family Rating and Probability of
Default Rating at B2, and B3-PD, respectively. In a related action
Moody's affirmed the ratings of the company's senior secured
credit facilities at B2, comprised of a $75 million senior secured
revolver and an upsized $553.7 million senior secured term loan.
Proceeds from the incremental term loan are expected to be used to
fund a dividend to the company's shareholders, and pay related
fees and expenses. The rating outlook is stable.
The following ratings were affirmed:
Corporate Family Rating, B2;
Probability of Default, B3-PD;
B2 (LGD3, 35%), for the $75 million senior secured revolver due
2017;
B2 (LGD3, 35%), for the upsized $553.7 million senior secured
term loan due 2018.
Ratings Rationale:
The affirmation of HHI's B2 Corporate Family Rating incorporates
Moody's belief that the company's credit metrics will remain
consistent with the assigned rating following the shareholder
dividend and the company will continue to maintain a strong
competitive position as a North American supplier of forged auto
parts. The shareholder dividend will return a significant portion
of the sponsor's equity investment contributed in connection with
the 2012 leveraged buyout. Moody's estimates that HHI's pro forma
LTM debt/EBITDA for the period ending June 30, 2013 (inclusive of
Moody's standard adjustments) to be 4.4x.
HHI's operating performance since its acquisition by American
Securities has met Moody's expectations to date. This performance
is anticipated to strengthen in the second half 2013 as Moody's
has raised its expectation for U.S. automotive unit sales, where
HHI's revenues are concentrated, to about 15.8 million units from
15.2 million units earlier in the year. HHI's management also
anticipates a decrease in certain incremental product launch costs
experienced in the first half of 2013, supporting stronger second-
half 2013 margins. While HHI continues to demonstrate the ability
to generate free cash flow, the ratings also reflect an
expectation for debt financed dividends to shareholders after
periods of de-leveraging.
HHI is expected to have an adequate liquidity profile over the
near-term supported by a $75 million revolving credit facility and
expected free cash flow generation over the next twelve months.
Pro forma for the transaction, the revolving credit facility is
expected to be modestly funded with a negligible amount of letters
of credit outstanding. HHI is anticipated to generate positive
free cash flow after nominal amortization requirements under the
term loan, consistent with historical trends. However, the company
has maintained lower levels of cash balances on hand than
previously anticipated due to voluntary debt paydowns on its term
loan, which is expected to continue. The financial maintenance
covenants under the amended senior secured credit facilities are
expected to remain unchanged and includes a total maximum leverage
ratio test. Alternate liquidity is limited as essentially all of
the company's assets secure the bank credit facilities.
HHI's stable rating outlook continues to reflect the company's
strong market position in the forged parts segment of the North
American automotive parts supplier industry, balanced by the
company's high end-market customer concentrations. Following the
debt funded shareholder dividend HHI's credit metrics are expected
to remain consistent with the assigned rating.
The rating could improve if HHI continues to maintain its strong
niche market position, and participate in a continued recovery in
the automotive and commercial vehicle industries such that EBIT
margins are expected to be maintained above 14%, Debt/EBITDA
approaching 3.0x, and EBIT/Interest above 3.0x. Further customer
and industry diversification could also result in positive ratings
momentum.
The outlook or rating could be lowered if North American
automotive production levels decline, resulting in weaker
profitability or deterioration in liquidity. If operations weaken
or additional shareholder distributions result in Debt/EBITDA
expecting to be to sustained at 4.5x or higher, or if free cash
flow generation is not realized, the company's rating and/or
outlook could be lowered.
The principal methodology used in this rating was the Global
Automotive Supplier 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.
ASP HHI Acquisition Co., Inc. headquartered in Royal Oak, MI is a
full service supplier of highly engineered metal forging and
machined components, wheel bearings, and powdered metal engine and
transmission components for automotive and industrial customers.
Operations are conducted through three subsidiaries: Forging
Holdings, LLC, Bearing Holdings, LLC, and Gearing Holdings, LLC.
Revenues for LTM June 30, 2013 were approximately $861 million.
ASP HHI: S&P Retains 'B+' Rating Following Proposed $100MM Add-On
-----------------------------------------------------------------
Standard & Poor's Ratings Services said that its 'B+' issue level
and '3' recovery ratings on ASP HHI Acquisition Co. Inc.'s term
loan B due 2018 are unchanged following the proposed $100 million
add-on to the loan to fund a distribution to sponsors. The '3'
recovery rating indicates meaningful (50%-70%) recovery
expectations in the event of a payment default. At this level,
the debt issues are rated the same as the corporate credit rating
on the rated entity, ASP HHI Intermediate Holdings Inc. (HHI).
Pro forma for the transaction, the debt leverage is about 4.1x
(based on EBITDA for the 12 months ended Aug. 31, 2013), and S&P
estimates that it will improve and remain in the 3.5x-4.0x range
over the next two years. Despite the higher debt level, S&P
believes that an improvement in HHI's credit metrics is likely to
stem from improved profitability on the company's new business
wins amid the industry recovery in North America, increased
pricing on its long-term contracts with vital customers, and
operational cost reductions.
The stable outlook reflects S&P's view that HHI can maintain
positive free operating cash flow generation in the year ahead,
with leverage of about 4.0x or less. S&P expects HHI's production
in North America to improve to a level higher than its estimate
for GDP growth in 2013 and 2014 because of the rebounding U.S.
housing market and other mixed macroeconomic indicators.
RATINGS LIST
ASP HHI Intermediate Holdings Inc.
Corporate Credit Rating B+/Stable/--
ASP HHI Acquisition Co. Inc.
$605 mil term loan B due 2018 B+
Recovery rating 3
ASTORIA GENERATING: S&P Puts 'B-' CCR on CreditWatch Positive
-------------------------------------------------------------
Standard & Poor's Ratings Services said it placed its 'B-'
corporate credit rating on Astoria Generating Co. Acquisitions LLC
on CreditWatch with positive implications. At the same time, S&P
placed its 'B' issue rating on the $580.1 million first-lien
credit facility consisting of a $550 million (including the
$125 million upsize) term loan due October 2017 and a
$30.1 million revolving facility due April 2017 on CreditWatch
with positive implications. The recovery rating on the first-lien
credit facility is '2', indicating a substantial recovery (70% to
90%) if a default occurs.
The CreditWatch placements reflect parent US Power Generating
Co.'s (USPG) announcement that it has signed an agreement to merge
with affiliates of Tenaska Capital Management LLC (TCM). Under
the agreement's terms, USPG will become a wholly owned, indirect
subsidiary of TCM. The transaction price is not finalized;
however, the company has upsized its $425 million term loan
facility at Astoria Gen by $125 million in conjunction with the
merger. The transaction is subject to various regulatory
approvals, including those of the Federal Energy Regulatory
Commission and the New York Public Service Commission. TCM, an
affiliate of Omaha, Neb. based Tenaska Inc., has about
$3.5 billion in assets under management.
"We rate Astoria Gen based on the consolidated credit profile of
USPG. The rating on Astoria Gen reflects a "vulnerable" business
risk profile and a "highly leveraged" financial risk profile,"
said Standard & Poor's credit analyst Trevor D'Olier-Lees.
Before the merger announcement, S&P had a positive outlook on
Astoria Gen's ratings, which reflected its expectation of an
improved financial profile if management can achieve the level of
cost savings assumed under S&P's base case following an increase
in locational capacity requirement to 86% from 83%.
The CreditWatch placement reflects the downward pressure from the
additional debt burden resulting from the merger. Before the
merger, S&P's rated base case expected that the company's credit
measures will improve to levels commensurate with an "aggressive"
financial risk profile, with adjusted debt to EBITDA of about 4.5x
for 2013 and below 3.5x for 2014, and adjusted funds from
operations (FFO) to debt of about 10% in 2013 and above 17% for
2014. However, following the inclusion of the additional debt,
S&P currently thinks that the adjusted debt to EBITDA could be
4.5x in 2014, which is still commensurate with an aggressive
financial risk profile expectation; whereas, adjusted FFO to debt
will be less than 12% or below S&P's expectation for an aggressive
financial risk profile.
At this time, S&P needs more information about the transaction
regarding the new ownership and strategic importance of Astoria
Gen to its new owner, the capital structure of the resulting
merged entity, TCM's strategy about operating Astoria Gen's
assets, and great certainty over the new demand curve and
resultant capacity prices. S&P expects to resolve the CreditWatch
when the merger consummates and the demand curve is finalized,
which could extend beyond S&P's usual three-month resolution
horizon.
ATP OIL: Strikes Deal for Anadarko to Take Gomez Wells
------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that ATP Oil & Gas Corp. negotiated a settlement with
federal regulators and Anadarko Petroleum Corp. to shut down wells
and decommission a production platform in the Gulf of Mexico.
The report recounts that the controversy came to a head in June
when U.S. Bankruptcy Judge Marvin Isgur in Houston authorized ATP
to abandon nonproducing wells in the Gulf known as the Gomez
properties. At the time, the theory was that the federal
government would take possession and pursue third parties who
might be liable for decommissioning expenses, such as an Anadarko
affiliate that was a former owner of the Gomez properties.
Anadarko appealed, while agreeing in the meantime to assume
responsibilities for the wells as though ATP had abandoned them.
According to the report, the settlement set out in a Sept. 10
court filing calls for Anadarko to decommission the wells and the
platform. To help pay the cost, Anadarko will get proceeds from a
$3 million bond. ATP won't have any liability for the
decommissioning and won't be required to perform any work.
The settlement comes up for approval at an Oct. 10 hearing
in bankruptcy court.
Meanwhile, ATP is winding its way toward selling the other
offshore oil and gas properties to secured lenders largely in
exchange for $580 million of the $792.5 million in debt they
hold. The total value of the transaction is more than $1.2
billion, taking into consideration liabilities the lenders
assume such as plugging wells.
ATP was compelled to sell the assets following violations of
covenants in the loan agreement financing the Chapter 11
reorganization begun in August.
About ATP Oil
Houston, Tex.-based ATP Oil & Gas Corporation is an international
offshore oil and gas development and production company focused
in the Gulf of Mexico, Mediterranean Sea and North Sea.
ATP Oil & Gas filed a Chapter 11 petition (Bankr. S.D. Tex. Case
No. 12-36187) on Aug. 17, 2012. Attorneys at Mayer Brown LLP,
serve as bankruptcy counsel. Munsch Hardt Kopf & Harr, P.C., is
the conflicts counsel. Motley Rice LLC and Fayard & Honeycutt,
APC serve as special counsel. Opportune LLP is the financial
advisor and Jefferies & Company is the investment banker.
Kurtzman Carson Consultants LLC is the claims and notice agent.
ATP disclosed assets of $3.6 billion and $3.5 billion of
liabilities as of March 31, 2012. Debt includes $365 million on a
first-lien loan where Credit Suisse AG serves as agent. There is
$1.5 billion on second-lien notes with Bank of New York Mellon
Trust Co. as agent. ATP's other debt includes $35 million on
convertible notes and $23.4 million owing to third parties for
their shares of production revenue. Trade suppliers have claims
for $147 million, ATP said in a court filing.
An official committee of unsecured creditors has been appointed in
the case. Evan R. Fleck, Esq., at Milbank, Tweed, Hadley &
McCloy, in New York, represents the Creditors Committee as
counsel.
A 7-member panel of equity security holders has also been
appointed in the case. Kyung S. Lee, Esq., and Charles M. Rubio,
Esq. of Diamond McCarthy LLP, in Houston, Texas, serve as counsel
to the Equity Committee.
ATP is seeking court approval to sell substantially all of its
Deepwater Assets and Shelf Property Assets.
AXESSTEL INC: Chief Technology Officer Stephen Sek Resigns
----------------------------------------------------------
Stephen Sek tendered his resignation as chief technology officer,
effective Sept. 30, 2013. Mr. Sek is leaving to accept a position
with a company he worked with prior to joining Axesstel, Inc., in
2006.
About Axesstel
Axesstel Inc., based in San Diego, Calif., develops fixed wireless
voice and broadband access solutions for the worldwide
telecommunications market. The Company's product portfolio
includes fixed wireless phones, wire-line replacement terminals,
and 3G and 4G broadband gateway devices used to access voice
calling and high-speed data services.
Axesstel disclosed net income of $4.31 million for the year ended
Dec. 31, 2012, as compared with net income of $1.09 million during
the prior year. As of June 30, 2013, the Company had $16.36
million in total assets, $25.39 million in total liabilities and a
$9.02 million total stockholders' deficit.
B & H VENTURES: Voluntary Chapter 11 Case Summary
-------------------------------------------------
Debtor: B & H Ventures, Limited Liability Company
7645 Franford Ave
a/k/a 7681 Frankford Ave.
Philadelphia, PA 19136
Bankruptcy Case No.: 13-17873
Chapter 11 Petition Date: September 9, 2013
Court: United States Bankruptcy Court
Eastern District of Pennsylvania (Philadelphia)
Judge: Bruce I. Fox
Debtor's Counsel: Thomas Daniel Bielli, Esq.
O'KELLY ERNST & BIELLI, LLC
1600 Market Street, 25th Floor
Philadelphia, PA 19103
Tel: (215) 543-7182
Fax: (215) 391-4350
E-mail: tbielli@oeblegal.com
Estimated Assets: $500,001 to $1,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Debtor did not file a list of its largest unsecured creditors
together with its petition.
The petition was signed by Brian Haughton, managing member.
BERGENFIELD SENIOR: Files Disclosure Statement in Support of Plan
-----------------------------------------------------------------
Bergenfield Senior Housing, LLC, submitted to the U.S. Bankruptcy
Court for the District of New Jersey a Disclosure Statement dated
Sept. 6, 2013 in support of its Plan of Liquidation.
The Plan is premised on the satisfaction of Claims through
distribution of the proceeds raised from the sale and liquidation
of the Debtor's assets, claims and causes of action.
As reported by The Troubled Company Reporter on Sept. 3, 2013, the
Debtor intends to sell its apartment building and all related
assets located at 47 Legion Drive in Bergenfield, New Jersey, to
the highest bidder in accordance with a bankruptcy-court-approved
bidding process. The proceeds from the sale of property will be
used to fund payments under the Plan.
The Disclosure Statement reveals that 100% recovery is expected
for Class 1 Priority Non-Tax Claims. Recovery is unknown for the
Secured Claims of Boiling Springs Savings Bank, Gene Rotonda,
Nicholas Rotonda, and Rosemarie Hebner. Recovery for General
Unsecured Claims, estimated to aggregate $1.92 million -- which
includes a $1.86 million proof of claim filed by SM Global, is
also unknown.
A full-text copy of the Disclosure Statement dated Sept. 6 is
available for free at:
http://bankrupt.com/misc/BERGENFIELDSENIOR_DSSept6.PDF
About Bergenfield Senior Housing
Bergenfield Senior Housing, LLC, filed a Chapter 11 bankruptcy
petition (Bankr. D.N.J. Case No. 13-19703) in Newark, New Jersey,
on May 2, 2013. Nicholas Rotonda signed the petition as
member/manager. Judge Morris Stern presides over the case.
Aaron Solomon Applebaum, Esq., and Barry D. Kleban, Esq., at
McElroy, Deutsch, Mulvaney & Carpenter, LLP, represent the Debtor
as counsel.
In its schedules, the Debtor disclosed $14,061,100 in assets and
$19,957,026 in liabilities as of the Petition Date.
The Bergenfield, New Jersey-based debtor is a single asset real
estate under 11 U.S.C. Sec. 101(51B) and said total assets and
debts exceed $10 million. The Debtor operates and wholly owns a
90-unit residential apartment building located at 47 Legion Drive,
Bergenfield, New Jersey.
The Debtor's primary secured creditor is Boiling Springs Savings
Bank. The Debtor is indebted to Boiling Springs on account of two
promissory notes, both of which are secured by mortgages on the
Property. Boiling Springs' first-position mortgage secures
indebtedness in the total amount of $12.02 million and the second-
position mortgage secures indebtedness of $575,000.
BERKLINE/BENCHCRAFT: Bid to Dismiss Suit v. Evergreen Line Denied
-----------------------------------------------------------------
A Delaware bankruptcy court denied a motion to dismiss filed by
the defendant an amended complaint captioned ROBERT S. BERNSTEIN,
AS PLAN ADMINISTRATOR FOR THE BANKRUPTCY ESTATES BERKLINE/
BENCHCRAFT HOLDINGS, LLC, et al. Plaintiff, v. EVERGREEN LINE,
Defendant, Adv. Proc. No. 13-50947 (Bankr. D. Del.).
Under the Complaint, the Plaintiff is seeking to avoid and recover
certain transfers made within 90 days of the Petition Date to
Evergreen Shipping Line Agency and its U.S. Agent, Evergreen Line.
The Defendant asserted that the Amended Complaint should be
dismissed for defective service of process and as being time-
barred by the relevant statute of limitations.
Judge Mary Walrath finds that taken together, all of the
Plaintiff's efforts demonstrate that he exhibited substantial
diligence and a good faith effort to effectuate proper service,
even though it was technically improper. In line with her
findings, the judge gave the Plaintiff time to effectuate proper
service on the Defendant.
A copy of Judge Walrath's Aug. 6, 2013 Memorandum Opinion is
available at http://is.gd/g1afnQfrom Leagle.com.
About Berkline/Benchcraft
Berkline/BenchCraft Holdings LLC, along with five subsidiaries,
filed for Chapter 11 bankruptcy (Bankr. D. Del. Case No. 11-11369)
on May 2, 2011, so the couch maker that specializes in home
theaters can liquidate.
Berkline/Benchcraft is a unit of turnaround specialist Sun Capital
Partners Inc. Until their decision to liquidate, the Debtors,
with their "Berkline" and "Benchcraft" brands, held a number five
market share and had a growing presence in home theater seating
including reclining sofas, love seats, and sectionals.
In February, Berkline hired FTI Consulting Inc. to help it
restructure and find a buyer. When Berkline was unable to sell
itself, the Company decided to liquidate and file for bankruptcy.
Berkline has a $140 million second-lien loan that is mostly owed
to its parent, SCSF Furniture LLC, which isn't in bankruptcy. A
total of $15 million is owed on a first lien term loan and
revolver from lenders led by Wells Fargo Capital Finance, LLC, as
administrative agent. The Debtors also owe $12.5 million under
unsecured subordinated notes.
Kenneth J. Enos, Esq., and Michael R. Nestor, Esq., at Young,
Conaway, Stargatt & Taylor, represent the Debtors in the
Chapter 11 case. Attorneys at Morgan, Lewis & Bockius LLP serve
as co-counsel. FTI Consulting is the advisor. Epiq Bankruptcy
Solutions is the claims and notice agent.
BI-LO HOLDING: Proposed $400MM Sr. Notes Get Moody's Caa1 Rating
----------------------------------------------------------------
Moody's Investors Service assigned a Caa1 rating to BI-LO Holding
Finance, LLC's proposed $400 million senior unsecured PIK toggle
notes due 2018. Moody's also affirmed the B2 Corporate Family
rating and B2-PD Probability of Default Rating of BI-LO, LLC (BI-
LO) and affirmed the B3 rating of BI-LO's $425 million senior
secured notes. The proceeds of the proposed transaction will be
used to pay a dividend to shareholders. The rating outlook is
stable. The Proposed Notes will be unsecured and will not be
guaranteed by any direct and indirect subsidiaries of BI-LO.
Additionally, BI-LO has entered into a definitive agreement with
Delhaize Group to acquire 155 stores under the Sweetbay, Harveys
and Reid's banners for $265 million in cash and the assumption of
about $92 million in capital leases. The acquisition will be
financed through borrowings under its $700 million ABL revolving
credit facility and cash on hand.
All ratings are subject to receipt and review of final
documentation.
"Proforma for the transactions, cash distributions to Lone Star in
the last 18 months will total $695 million and are primarily
funded through debt, which is credit negative", Moody's Senior
Analyst Mickey Chadha stated. "However, the company continues to
execute well, and the integration of Winn-Dixie has proceeded as
planned resulting in improved operating performance of the
combined company and sufficient cushion for the incremental debt
within the B2 rating category," Chadha further stated.
The following ratings are affirmed:
Corporate Family Rating at B2
Probability of Default Rating at B2-PD
The following ratings are affirmed and point estimates updated:
$425 million senior secured notes maturing 2019 at B3 (LGD 4,
60%) from (LGD 5, 76%)
The following ratings are assigned:
BI-LO Holding Finance, LLC
$400 million HoldCo Senior PIK Toggle Notes maturing 2018 at
Caa1 (LGD 6, 92%)
Upon completion of the transaction, the Corporate Family and
Probability of Default ratings will be moved from BI-LO, LLC to
BI-LO Holding Finance, LLC.
Rating Rationale:
The B2 Corporate Family Rating reflects the company's aggressive
financial policy and high leverage. The ratings also reflect the
execution and integration risks associated with the proposed
acquisition of the Sweetbay, Harveys and Reid's supermarket chains
from Delhaize. The ratings are supported by the company's good
franchise position in a market well penetrated by competitors, the
improved scale and geographic footprint resulting from recent
acquisitions, a strong track record of operating performance and
integration of acquisitions, and good liquidity.
The rating outlook is stable and incorporates Moody's expectation
that same store sales growth will remain positive and margins will
not meaningfully deteriorate resulting in improved profits and
credit metrics in the near to medium term.
Ratings could be upgraded if the company demonstrates the ability
and willingness to achieve and maintain debt to EBITDA below 4.5
times and maintain EBITA to interest over 2.25 times, liquidity
remains good and financial policies are benign.
Ratings could be downgraded if the company's cash flow and
liquidity declines, same store sales growth and operating margins
deteriorate or financial policies become more aggressive such that
debt to EBITDA is sustained above 5.5 times or EBITA to interest
is sustained below 1.5 times.
The principal methodology used in this rating was the Global
Retail Industry Methodology published in June 2011. Other
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the U.S., Canada and EMEA
published in June 2009.
BI-LO, LLC is headquartered in Jacksonville, Florida and is owned
by private equity firm Lone Star. The company operates has 685
supermarkets in eight states concentrated in the Southeastern U.S.
and has about $10 billion in revenues.
BIOZONE PHARMACEUTICALS: Settles with Former EVP for $1.1-Mil.
--------------------------------------------------------------
BioZone Pharmaceuticals, Inc., consummated a settlement of
competing claims with its former executive vice president, Mr.
Daniel Fisher by entering into a Settlement Agreement and Mutual
Release among Mr. Fisher, the Company, BioZone Laboratories, Inc.,
The Frost Group LLC, BrauserHonig Frost Group, Phillip Frost,
Michael Brauser, Barry Honig, Elliot Maza, Brian Keller and
Roberto Prego-Novo dated as of Sept. 5, 2013.
Pursuant to the Settlement Agreement, Mr. Fisher dismissed all of
his claims contained in the action entitled, Daniel Fisher v.
BioZone Pharmaceuticals, Inc., et al., No. 12-CV-03450 (WHA) (LB)
United States District Court, Northern District of California, No.
12-03716, in consideration of the Company's payment to him of the
sum of $1,050,000 and the dismissal of the Company's claims
contained in the action entitled, BioZone Pharmaceuticals, Inc. v.
Daniel Fisher and 580 Garcia Properties, LLC, Supreme Court of the
State of New York, County of New York, No. 652489/2012.
Also, pursuant to the Settlement Agreement, Mr. Fisher sold his
entire holdings of 6,650,000 shares of the Company's common stock
to various private accredited investors. The purchase of Mr.
Fisher's shares, which was a condition to the effectiveness of the
Settlement Agreement, was completed on Sept. 10, 2013.
The Settlement Agreement provides for complete mutual general
releases of all claims between the Parties, including but not
limited to, all claims arising out of or related to Mr. Fisher's
sale of his interest in BZL and related companies to the Company,
compensation purportedly owed to Mr. Fisher under his terminated
employment agreement with the Company and all amounts purportedly
owed by the Company, as of the effective date of the Settlement
Agreement, to Mr. Fisher's wholly-owned limited liability company,
580 Garcia Properties, LLC, for rent and other amounts due under a
written lease between the Company and 580 Garcia. In addition,
Mr. Fisher agreed to seek the dismissal of all administrative
claims and investigations he had instituted with state or Federal
agencies against the Company and to remain bound by the non-
competition terms contained in his former employment agreement
with the Company. None of the Parties admitted to any wrong-doing
and the Parties agreed not to disparage one another.
About Biozone Pharmaceuticals
Biozone Pharmaceuticals, Inc., formerly, International Surf
Resorts, Inc., was incorporated under the laws of the State of
Nevada on Dec. 4, 2006, to operate as an internet-based provider
of international surf resorts, camps and guided surf tours. The
Company proposed to engage in the business of vacation real estate
and rentals related to its surf business and it owns the Web site
isurfresorts.com. During late February 2011, the Company began to
explore alternatives to its original business plan. On Feb. 22,
2011, the prior officers and directors resigned from their
positions and the Company appointed a new President, Director,
principal accounting officer and treasurer and began to pursue
opportunities in medical and pharmaceutical technologies and
products. On March 1, 2011, the Company changed its name to
Biozone Pharmaceuticals, Inc.
Since March 2011, the Company has been engaged primarily in
seeking opportunities related to its intention to engage in
medical and pharmaceutical businesses. On May 16, 2011, the
Company acquired substantially all of the assets and assumed all
of the liabilities of Aero Pharmaceuticals, Inc., pursuant to an
Asset Purchase Agreement dated as of that date. Aero manufactures
markets and distributes a line of dermatological products under
the trade name of Baker Cummins Dermatologicals.
On June 30, 2011, the Company acquired the Biozone Labs Group
which operates as a developer, manufacturer, and marketer of over-
the-counter drugs and preparations, cosmetics, and nutritional
supplements on behalf of health care product marketing companies
and national retailers.
Biozone incurred a net loss of $7.96 million in 2012, as compared
with a net loss of $5.45 million in 2011. The Company's balance
sheet at June 30, 2013, showed $7.70 million in total assets,
$13.00 million in total liabilities and a $5.30 million total
shareholders' deficiency.
Paritz and Company. P.A., in Hackensack, New Jersey, issued a
"going concern" qualification on the consolidated financial
statements for the year ended Dec. 31, 2012. The independent
auditors noted that the Company has incurred operating losses for
its last two fiscal years, has a working capital deficiency of
$5,255,220, and an accumulated deficit of $14,128,079. These
factors, among others, raise substantial doubt about the Company's
ability to continue as a going concern.
BLUEJAY PROPERTIES: BBOK & UNB Object to Extend Cash Use
--------------------------------------------------------
Bankers' Bank of Kansas, N.A. and University National Bank filed
an objection to the second motion for extension of order
authorizing the use of cash collateral and granting adequate
protection.
On Nov. 28, 2012, over the objection of BBOK and UNB, the Court
entered the Final Order Authorizing the Use of Cash Collateral and
Granting Adequate Protection. That order expired on Jan. 31,
2013.
Then, on March 5, 2013, the Court entered its Second Order
Granting Extension of Final Order Authorizing Use of Cash
Collateral and Granting Adequate Protection. By the provision
of that Order, the authority to use Cash Collateral expired on
July 31, 2013.
By its motion, the Debtor seeks to extend the Final Order a second
time for six months or until that time as a Chapter 11 Plan --
which still has not been proposed -- is confirmed and consummated
according to the Bankruptcy Code.
In its Limited Response to the Emergency Motion and Motion for:
(A) Order Authorizing Use of Cash Collateral;
(B) Order Requiring Turnover/Preservation of Property of
the Estate;
(C) Granting Related Relief Determining Adequate Protection;
and
(D) Scheduling a Final Hearing on the Motion Pursuant to
Bankruptcy Rule 4001 (C),
BBOK asserted that the Debtor should be denied use of BBOK's cash
collateral as it has failed to provide BBOK adequate protection
and has otherwise failed to provide sufficient parameters
regarding the expenditures from such cash collateral.
UNB, meanwhile, asserted that giving the Debtor unlimited use of
cash collateral was improper.
BBOK and UNB ask the Court to deny Bluejay's motion, and otherwise
prohibit the use of cash collateral without provision of adequate
protection, and order that the rents be sequestered pending the
filing of a motion for relief from stay and/or adequate
protection, and for such other and further relief.
BBOK and UNB are represented by:
Arthur S. Chalmers, Esq.
Scott M. Hill, Esq.
Linda S. Parks, Esq.
HITE, FANNING & HONEYMAN L.L.P.
100 North Broadway, Suite 950
Wichita, KS 67202
Tel: (316) 265-7741
Fax: (316) 267-7803
E-mail: hill@hitefanning.com
parks@hitefanning.com
About Bluejay Properties
Based in Junction City, Kansas, Bluejay Properties, LLC, doing
business as Quinton Point, filed a bare-bones Chapter 11 petition
(Bankr. D. Kan. Case No. 12-22680) in Kansas City on Sept. 28,
2012. Bankruptcy Judge Robert D. Berger presides over the case.
Todd A. Luckman, Esq., and Kathryn E. Sheedy, Esq., at Stumbo
Hanson LLP, in Topeka.
The Debtor owns the Quinton Point Apartment Complex in Kansas City
valued at $17 million. The Debtor scheduled liabilities of
$13,112,325. The petition was signed by Michael L. Thomas of TICC
Prop., managing member.
Bankers' Bank of Kansas, owed approximately $13.08 million, is
represented by Arthur S. Chalmers of Hite, Fanning & Honeyman,
LLP. The University National Bank, owed approximately
$1.2 million, is represented by Edward J. Nazar of Redmond &
Nazar, L.L.P., and Todd Thompson of Thompson Ramsdell & Qualseth,
P.A.
BURBANK VICTORY: Voluntary Chapter 11 Case Summary
--------------------------------------------------
Debtor: Burbank Victory Property LLC
302 N Victory Blvd.
Burbank, CA 91502
Bankruptcy Case No.: 13-32519
Chapter 11 Petition Date: September 9, 2013
Court: United States Bankruptcy Court
Central District of California (Los Angeles)
Debtor's Counsel: David Seror, Esq.
EZRA BRUTZKUS GUBNER LLP
21650 Oxnard St., Ste 500
Woodland Hills, CA 91367
Tel: (818) 827-9000
Fax: (818) 827-9099
E-mail: dseror@ebg-law.com
Estimated Assets: $0 to $50,000
Estimated Debts: $1,000,001 to $10,000,000
The Debtor did not file a list of its largest unsecured creditors
together with its petition.
The petition was signed by Maurice Rozo, managing member.
CARL'S PATIO: Plan Outline Okayed, Confirmation Hearing on Oct. 15
------------------------------------------------------------------
The Hon. Kevin Gross approved the adequacy of the Second Amended
Disclosure Statement filed by the Official Committee of Unsecured
Creditors in support of its Second Amended Liquidation Plan for CP
Liquidating, Inc., et al., fka Carl's Patio, Inc., et al.
Ballots for the Plan can now be solicited. Ballots need to be
received no later than 5:00 p.m. prevailing Eastern Time on Oct.
8, 2013 for them to be counted.
A confirmation hearing on the Plan is scheduled to be convened on
Oct. 15, 2013 at 2:00 p.m. Prevailing Eastern Time in Delaware.
Formal written objections to the confirmation may be filed no
later than 4:00 p.m on Oct. 8.
As previously reported by The Troubled Company Reporter, the
Second Amended Plan provides for up to 4.7% recovery on allowed
claims. Moreover, the Amended Plan embodies a Stipulation of
Settlement negotiated among the Debtors, the Creditors Committee,
the Buyer of substantially all of the Debtors' assets and the
Debtors' Lender. The Settlement provides for a pool of three
particular "assets" to be set aside fro the benefit of unsecured
claims and the administrative claims of the Committee's
professionals -- (1) cash totaling $140,000, consisting of the sum
of $25,000 received from the Lender and the sum of $115,000
received from the Buyer; (2) all claims that may be asserted
against the Debtors' directors' and officers' liability insurance
policy and any other insurance policies; and (3) all avoidance
action claims. A full-text copy of the Second Amended Disclosure
Statement dated Aug. 30, 2013, is available for free at:
http://bankrupt.com/misc/CARLSPATIO_2ndAmdDSAug30.PDF
About Carl's Patio
Founded in 1993, Carl's Patio claims to be a leading retailer of
upscale outdoor furniture and accessories. The company operates
10 retail locations and a warehouse in South Florida. The company
had 68 employees. The company leases all its locations and does
not own any real property.
Carl's Patio, Inc. and its affiliates sought Chapter 11 protection
(Bankr. D. Del. 13-10102) on Jan. 21, 2013, and immediately
conveyed plans to sell the business to Weinberg Capital, absent
higher and better offers. Bayard, P.A., represents the Debtor in
its restructuring efforts. BGA Management, LLC, doing business as
Alliance Management, serves as financial advisor, and Epiq
Bankruptcy Solutions LLC serves as claims and noticing agent.
Carl's Patio disclosed $6,228,725 in assets and $13,054,583 in
liabilities as of the Chapter 11 filing. The Debtor owes $2.19
million on a secured revolver, and $3.01 million on a term loan
from Fifth Third. The Debtor also has $600,000 of subordinated
debt.
The Official Committee of Unsecured Creditors filed a Plan of
Liquidation for the Debtors in July 2013. The panel is
represented Cross & Simon, LLC's Christopher P. Simon, Esq. and
Kevin S. Mann, Esq., as well as Platzer, Swergold, Karlin, Levine,
Goldberg & Jaslow, LLP's Henry G. Swergold, Esq. and Clifford A.
Katz, Esq. CBIZ Accounting Tax and Advisory of New York, LLC and
CBIZ, Inc., are the panel's financial advisors.
CENGAGE LEARNING: Apax Sues to Ensure Payment Under Ch. 11 Plan
---------------------------------------------------------------
Law360 reported that private equity firm Apax Partners LP on Sept.
10 sued bankrupt textbook publisher Cengage Learning Inc. in New
York bankruptcy court to ensure that it will receive its share of
distributions to first-lien secured debt holders.
According to the report, Apax, a controlling shareholder of
Cengage, voiced concern over a provision of Cengage's proposed
reorganization plan that delays distribution to Apax if anyone
objects to any of its claims until the objection is resolved. Apax
says it holds $850 million in first-lien obligations, the report
related.
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. Arent Fox LLP is the
proposed counsel for the Committee. FTI Consulting, Inc., serves
as financial advisor to the Committee. Moelis & Company LLC
serves as investment banker to the Committee.
CENGAGE LEARNING: Creditors Oppose Plan-Approval Scheduling
-----------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that creditors almost always applaud the appointment of
a mediator to bring peace to warring factions in a contested
Chapter 11. The reorganization of Cengage Learning Inc. is an
exception.
According to the report, the company filed a proposed Chapter 11
plan in mid-August. The creditors' committee sought a one-month
postponement of the hearing to approve accompanying disclosure
materials because the documents didn't supply required
information.
Initially, Cengage lobbied against a delay in the disclosure
approval hearing set for Sept. 27.
Cengage changed its approach by filing papers setting up a hearing
Sept. 11 asking the judge to appoint a mediator. A major bone of
contention is whether secured creditors have valid liens on 15,500
copyrights.
At a hearing slated for Sept. 11, Cengage wants the bankruptcy
judge in Brooklyn, New York, to lay down a schedule for plan
approval. Second-lien creditors and unsecured bondholders are
opposed. Cengage wants mediation sessions held Sept. 20, Oct. 4
and Oct. 11. Meanwhile, the company says it will file a revised
plan and disclosure materials Oct. 11. Although a liquidation
analysis won't be filed until Oct. 15, Cengage wants objections to
the disclosure filed by Oct. 22, in advance of an Oct. 25
disclosure-approval hearing. The creditors say the schedule
doesn't give them sufficient time for analyzing and responding to
the revised plan and disclosure statement. The company wants the
confirmation hearing for plan approval held Dec. 10.
The hearing will also deal with the creditors' committee's request
for filing suit to determine the validity of liens on 15,500
copyrights.
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. It is the second-largest college textbook
publisher in the U.S. 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. Arent Fox LLP is the
proposed counsel for the Committee. FTI Consulting, Inc., serves
as financial advisor to the Committee. Moelis & Company LLC
serves as investment banker to the Committee.
CHINA CEETOP.COM: Weiliang Liu Elected to Board
-----------------------------------------------
China Ceetop.com, Inc., held its 2013 Annual Meeting of its
Shareholders on Sept. 6, 2013, at which the shareholders: (1)
elected Weiliang Liu as director, (2) approved an amendment to the
Articles of Incorporation to change name to Ceetop, Inc., (3)
ratified the appointment of Clement C. W. Chan & Co., as the
Company's independent registered public accounting firm, (4)
authorized the Company's 2013 Equity Incentive Plan, (5)
approved, on an advisory basis, the compensation of the Company's
named executive officers, and (6) indicated "Every Three Years" as
the desired frequency of future advisory vote on executive
compensation.
The Company has decided, in light of that vote, that the Company
will include a shareholder vote on the compensation of executives
in its proxy materials every three years.
About China Ceetop.com
Shenzhen, China-based China Ceetop.com, Inc., is an Oregon-
registered corporation. Before 2013 the company owned and
operated the online retail platform, http://www.ceetop.com/
Due to excessive competition in online retail, the Company has
transformed itself into an integrated supply chain services
provider, and focuses on Business to Business "B to B" supply
chain management and related value-added services among
enterprises.
The Company' balance sheet at June 30, 2013, showed $3.5 million
in total assets, $4.0 million in total liabilities, and a
stockholders' deficit of $463,482.
Going Concern Uncertainty
"For the year ended Dec. 31, 2012, our independent auditors, in
their report on the financial statements, have indicated that the
Company has experienced recurring losses from operations and may
not have enough cash and working capital to fund its operations
beyond the very near term, which raises substantial doubt about
our ability to continue as a going concern. Management has made a
similar note in the financial statements. As indicated herein, we
must raise capital for the implementation of our business plan,
and we will need additional capital for continuing our operations.
We do not have sufficient revenues to pay our expenses of
operations. Unless the Company is able to raise working capital,
it is likely that the Company either will have to cease operations
or substantially change its methods of operations or change its
business plan," the Company said in its quarterly report for the
period ended June 30, 2013.
CITY HOMES: Facing Lead Paint Suits, Co. Files for Bankruptcy
-------------------------------------------------------------
City Homes Inc., the non-profit owner of 327 affordable housing
units in Baltimore, filed a petition for Chapter 11 reorganization
(Bankr. D. Md. Case 13-25371) to deal with 70 lead-paint lawsuits.
Jacqueline Palank, writing for The Wall Street Journal, reported
that City Homes rents more than 300 Baltimore apartment units to
low-income tenants and faces a wave of lead paint lawsuits.
According to the WSJ report, facing legal judgments worth several
million dollars in prior lead paint lawsuits and more litigation
on the horizon, the Baltimore company is hoping to take advantage
of the breathing room offered in Chapter 11. Bankruptcy not only
prevents creditors from collecting unpaid bills, including legal
judgments, but also shields companies from ongoing and future
litigation.
"As a result of the 70 pending lead paint lawsuits and the many
more anticipated, the companies must stabilize their affairs and
consider all options going forward," City Homes President Barry
Mankowitz said in court papers filed on Sept. 10, the report
related.
Past legal judgments against City Homes include $2.5 million
awarded to two siblings in November 2009, the report said. Their
mother moved to a City Homes rowhouse after finding out one of the
children was exposed to lead in a previous rental unit; she said
City Homes assured her the home was safe. Another case resulted in
a $5.1 million judgment against City Homes that was later reduced
to $1.25 million.
Exposure to lead paint, of special concern in homes built before
1978, can cause permanent damage to the brain and nervous system,
including behavior and learning problems, the report added. Young
children are most susceptible.
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the tax-exempt company said in a court filing that it
started the first project in 1987. Although tenants are "very low
income," the vacancy rate ranges from 2 percent to 6 percent in
"troubled neighborhoods," a court filing shows. The losses in
2011 and 2012 were $783,000 and $431,000, respectively. Litigation
expense contributed to the losses.
COOL SHEET: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: Cool Sheet Metal, Inc.
10 Fleetwood Court
Ronkonkoma, NY 11779
Bankruptcy Case No.: 13-74652
Chapter 11 Petition Date: September 9, 2013
Court: United States Bankruptcy Court
Eastern District of New York (Central Islip)
Judge: Robert E. Grossman
Debtor's Counsel: Gary C. Fischoff, Esq.
BERGER, FISCHOFF & SHUMER, LLP
40 Crossways Park Drive
Woodbury, NY 11797
Tel: (516) 747-1136
E-mail: gfischoff@sfbblaw.com
Scheduled Assets: $1,156,846
Scheduled Liabilities: $5,217,068
A list of the Company's 20 largest unsecured creditors, filed
together with the petition, is available for free at
http://bankrupt.com/misc/nyeb13-74652.pdf
The petition was signed by Richard Kern, president.
Affiliate that filed separate Chapter 11 petition:
Petition
Debtor Case No. Date
------ -------- ----
Richard Kern 13-71700 04/03/13
COMPETITIVE TECHNOLOGIES: To Issue 1MM Shares to Lawyers
--------------------------------------------------------
Competitive Technologies, Inc., registered with the U.S.
Securities and Exchange Commission 1 million shares of common
stock issuable for legal services. The proposed maximum aggregate
offering price is $180,000. A copy of the Form S-8 prospectus is
available for free at http://is.gd/Cn6Em8
About Competitive Technologies
Fairfield, Conn.-based Competitive Technologies, Inc. (OTC QX:
CTTC) -- http://www.competitivetech.net/-- was established in
1968. The Company provides distribution, patent and technology
transfer, sales and licensing services focused on the needs of its
customers and matching those requirements with commercially viable
product or technology solutions. Sales of the Company's
Calmare(R) pain therapy medical device continue to be the major
source of revenue for the Company.
Competitive Technologies incurred a net loss of $3 million on
$546,139 of gross profit from product sales in 2012, as compared
with a net loss of $3.59 million on $1.86 million of gross profit
from product sales in 2011. As of June 30, 2013, the Company had
$4.47 million in total assets, $9.78 million in total liabilities
and a $5.31 million total shareholders' deficit.
Mayer Hoffman McCann CPAs (The New York Practice of Mayer Hoffman
McCann P.C.), in New York, issued a "going concern" qualification
on the consolidated financial statements for the year ended
Dec. 31, 2012. The independent auditors noted that at Dec. 31,
2012, the Company has incurred operating losses since fiscal year
2006. These conditions raise substantial doubt about the
Company's ability to continue as a going concern.
CORAL DYEING: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Coral Dyeing & Finishing Corp.
555 East 31st Street
Paterson, NJ 07509
Bankruptcy Case No.: 13-29792
Chapter 11 Petition Date: September 9, 2013
Court: United States Bankruptcy Court
District of New Jersey (Newark)
Judge: Morris Stern
Debtor's Counsel: Richard D. Trenk, Esq.
Thomas Michael Walsh, Esq.
TRENK, DIPASQUALE ET. AL.
347 Mt. Pleasant Avenue, Suite 300
West Orange, NJ 07052
Tel: (973) 243-8600
Fax: (973) 243-8677
E-mail: rtrenk@trenklawfirm.com
twalsh@trenklawfirm.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 20 largest unsecured
creditors, filed together with the petition, is available for free
at http://bankrupt.com/misc/njb13-29792.pdf
The petition was signed by Frederick Dombrow, Jr., chief executive
officer.
CRYOPORT INC: Richard Rathmann Appointed Board Chairman
-------------------------------------------------------
Cryoport, Inc., held its 2013 Annual Meeting of Stockholders on
Sept. 6, 2013, at which Richard G. Rathmann, Jerrell W. Shelton
and Stephen E. Wasserman were elected as directors to serve until
the Company's 2014 Annual Meeting of Stockholders. The
stockholders ratified the Audit Committee's selection of KMJ
Corbin & Company LLP as the Company's independent registered
public accounting firm for the fiscal year ending March 31, 2014.
The stockholders approved an amendment to the Company's 2011 Stock
Incentive Plan to increase the number of shares of the Company's
common stock available for issuance thereunder by 7,100,000 shares
and to increase the annual limitation of the number of shares
granted to a Covered Employee in any fiscal year to 1,500,000
shares. The stockholders approved, on an advisory basis, the
compensation of the named executive officers and indicated "Every
Year" as the desired frequency of future advisory votes on
executive compensation.
On Sept. 6, 2013, the Board of Directors of Cryoport named Mr.
Rathmann Chairman of the Board of Directors. Stephen E.
Wasserman, former Chairman of the Board of Directors, will
continue to serve as a director.
A copy of the Form 8-K filing is available for free at:
http://is.gd/UIqRRw
About Cryoport
Lake Forest, Calif.-based CryoPort, Inc. (OTC BB: CYRX) provides
comprehensive solutions for frozen cold chain logistics, primarily
in the life science industries. Its solutions afford new and
reliable alternatives to currently existing products and services
utilized for bio-pharmaceuticals and biologics, including in-vitro
fertilization, cell lines, vaccines, tissue and other commodities
requiring a reliable frozen solution.
KMJ Corbin & Company LLP, in Costa Mesa, California, issued a
"going concern" qualification on the consolidated financial
statements for the year ended March 31, 2013. The independent
auditors noted that the Company has incurred recurring operating
losses and has had negative cash flows from operations since
inception. Although the Company has cash and cash equivalents of
$563,104 at March 31, 2013, management has estimated that cash on
hand, which include proceeds from convertible bridge notes
received in the fourth quarter of fiscal 2013, will only be
sufficient to allow the Company to continue its operations into
the second quarter of fiscal 2014. These matters raise
substantial doubt about the Company's ability to continue as a
going concern.
Cryoport incurred a net loss of $6.38 million for the year ended
March 31, 2013, as compared with a net loss of $7.83 million for
the year ended March 31, 2012. The Company's balance sheet at
June 30, 2013, showed $1.66 million in total assets, $4.68 million
in total liabilities and a $3.02 million total stockholders'
deficit.
DELL INC: S&P Lowers Corporate Credit Rating to 'BB-'
-----------------------------------------------------
Standard & Poor's Ratings Services said it lowered the corporate
credit rating on Round Rock, Tex.-based Dell Inc. to 'BB-' from
'BBB', and the commercial paper rating to 'B' from 'A-2'. S&P
removed all ratings from CreditWatch, where it had placed them
with negative implications on Feb. 5, 2013. The outlook is
stable.
S&P also lowered its issue-level ratings on Dell's senior
unsecured debt to 'B+' from 'BBB', and assigned a '5' recovery
rating, indicating its expectations for modest (10% to 30%)
recovery of principal in the event of a payment default.
At the same time, S&P assigned its 'BB+' issue rating to Dell's
proposed first-lien secured debt (which includes a $4 billion term
loan B due 2020, $1.5 billion term loan C due 2018, and $2 billion
first-lien notes due 2020) with a recovery rating of '1',
indicating S&P's expectation for very high (90% to 100%) recovery
of principal in the event of a payment default. S&P also assigned
its 'BB' issue rating to the company's proposed $1.25 billion
second-lien notes due 2021 with recovery rating of '2', indicating
its expectation for substantial (70% to 90%) recovery of principal
in the event of a payment default.
"The downgrade incorporates our revision of Dell's business risk
profile to fair from satisfactory, reflecting ongoing pricing
pressures and volume declines in PCs, which is still Dell's
largest business by revenue, and also our revision of its
financial risk profile to aggressive from modest, pro forma for
the significantly higher leverage resulting from the proposed
LBO," said Standard & Poor's credit analyst Martha Toll-Reed.
The stable outlook reflects S&P's expectation that Dell will use
cash on the balance sheet and free operating cash flow to repay
debt on an ongoing basis. Specifically, S&P expects Dell to repay
about $2 billion of debt following the LBO transaction close, such
that adjusted total debt to EBITDA is below 5x as of Jan. 31,
2014. In addition, S&P expects the benefits from ongoing cost
reduction and restructuring initiatives will largely offset
pricing pressure across Dell's primary business segments.
The potential for higher ratings is currently constrained by
Dell's aggressive financial risk profile, weak demand and
profitability conditions in Dell's end user and enterprise
solutions segments, and lack of revenue and operating performance
visibility. Although not likely in the near term, S&P could lower
ratings if a material shortfall in expected revenue and EBITDA
levels, or insufficient debt repayments, results in adjusted
leverage in excess of 5x.
DELL INT'L: Moody's Assigns Ba2, Ba3 Ratings to New Secured Debt
----------------------------------------------------------------
Moody's Investors Service assigned Ba3 Corporate Family and Ba3-PD
Probability of Default ratings to Dell Inc., the parent company of
Dell International LLC. In addition, Moody's assigned Ba2 ratings
to Dell International LLC's senior secured term loans and first
lien notes, and a Ba3 rating to the second lien notes. The Prime-2
short-term commercial paper rating was withdrawn. Upon closing of
the debt financing, the existing unsecured notes held at Dell Inc.
will be downgraded to B1 from Baa1. For the unsecured notes that
are paid off in connection with the financing, the ratings will be
withdrawn. The rating outlook is stable.
These rating actions will conclude the review for downgrade
initiated on February 5, 2013 following the announcement of a
definitive agreement with founder Michael Dell (75% owner) and
Silver Lake (25% owner) to acquire Dell in a leveraged buyout
(LBO) with the equity valued at over $24 billion.
Ratings Rationale:
The Ba3 CFR reflects the high initial debt (gross reported debt of
over $18 billion; 6 times debt to EBITDA) arising from the LBO
debt combined with the challenges of the declining personal
computer (PC) industry, which still accounts for nearly half of
Dell's revenues. Moody's expects Dell's PC revenues to continue
eroding in 2014 in the low single digits as the decrease in
mobility products is partly offset by slight growth of commercial
desktops.
The increased debt burden will limit Dell's financial flexibility,
potentially hindering the company's ability to transition more of
its business to the faster growing and potentially more profitable
enterprise solutions from its core hardware business. While
Moody's believes that Dell is building sufficient sales, product,
and R&D scale in its enterprise segments following a series of
acquisitions ($11.8 billion on acquisitions since January 2010),
Dell will have to complete the transition mostly organically. The
risk exists that additional funding will be required for Dell to
expand its technology footprint to remain competitive against
peers with superior liquidity and credit profile.
The Ba3 rating incorporates Moody's expectation of significant
debt pay down over the next several years which will likely limit
annual M&A spending to the $500 million to $1 billion range.
Moody's anticipates significant cost savings (more than $2.5
billion), although those savings will likely be reinvested in the
business through R&D or marketing incentives, so margins are
expected to remain relatively flat. Moody's expects Dell to reduce
debt, which should arise from solid free cash flow (about $2
billion annually, adjusted for non-recurring items) along with
cash now on hand. Without share buybacks or dividends (which has
averaged about $1.4 billion per year since the beginning of fiscal
2009) and a more tempered approach to M&A activity, Dell will have
ample cash flow that can be used for debt service. Moody's
anticipates gross reported debt being less than $16 billion by
January 31, 2015 (less than 5 times gross debt to EBITDA; or mid-3
times including the adjustment for the finance operations).
There is considerable key man risk associated with Michael Dell's
majority stake, including relatively little ability of the board
of directors to exert effective oversight over the controlling
owner and to make strategic course corrections if necessary.
Further, if Mr. Dell is unable to serve as CEO for an extended
period, this could have a substantial effect on the company's
strategic direction. Moody's does expect, however, that Silver
Lake Partners will have certain consent rights for significant
cash outlays.
Moody's could upgrade Dell's ratings if the company were to show
sustained revenue growth in the low single digits, operating
margins greater than 6%, free cash flow in excess of $2.5 billion,
and gross debt to EBITDA below 3.5 times. The rating could be
lowered with sustained erosion of market share, reported operating
profit margins lower than 2.5%, or contraction of the PC market
faster than anticipated. Also, any indications of any change from
Dell's intent to use the majority of free cash flow to reduce
debt, or that gross debt to EBITDA remains above 5 times beyond
fiscal 2015 could also pressure the rating down.
Ratings assigned:
Dell Inc.
Corporate Family Rating of Ba3
Probability of Default Rating of Ba3-PD
Rating to be downgraded (upon close):
Senior unsecured rating to B1 (LGD5, 73%) from Baa1
Rating withdrawn:
Commercial Paper short-term rating, Prime-2
The rating outlook is stable.
Dell International LLC
Term Loans at Ba2 (LGD2, 27%)
First lien notes at Ba2 (LGD2, 27%)
Second lien notes at Ba3 (LGD3, 44%)
The principal methodology used in this rating was the Global
Technology Hardware Industry Methodology published in October
2010. Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.
Dell Inc. is one of the world's leading providers of personal
computers, servers, and related devices.
DESIGNLINE CORP: Sec. 341 Meeting Adjourned to Oct. 9
-----------------------------------------------------
The meeting of creditors in the bankruptcy case of DesignLine
Corporation and DesignLine USA LLC has been adjourned to Oct. 9,
2013, at 2:00 p.m.
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.
DesignLine Corporation and DesignLine USA LLC sought Chapter 11
protection (Bankr. D. Del. Lead Case Nos. 13-12089 and 13-12090)
on Aug. 15, 2013. Katie Goodman signed the petitions as chief
restructuring officer. Mark D. Collins, Esq., and Michael Joseph
Merchant, Esq., at Richards, Layton & Finger, P.A., serve as the
Debtors' counsel. Nelson Mullins Riley & Scarborough, LLP, is the
Debtors' general bankruptcy counsel. The Debtors' financial
advisor is GGG Partners LLC. The Debtors estimated assets and
debts of at least $10 million.
DETROIT, MI: Retirees, Unions Say Bankruptcy Law Unconstitutional
-----------------------------------------------------------------
Steven Church & Sophia Pearson, writing for Bloomberg News,
reported that Detroit's retired workers joined city unions in
attacking the city's record-setting $18 billion bankruptcy,
claiming the law that lets cities seek court protection from
creditors violates the U.S. Constitution.
According to the report, a court-approved committee for retired
workers filed papers in U.S. Bankruptcy Court in Detroit on the
night of Sept. 11 saying Emergency Manager Kevyn Orr filed the
case in July with the intention of cutting pensions for retired
city workers.
Those workers aren't eligible for federal Social Security
benefits, "rendering their entire economic existence dependent
upon retirement compensation promised by the city," the committee
said in its objection, the report related.
In an effort to have the case thrown out at a hearing next month,
the retirees and unions plan to question Michigan Governor Rick
Snyder under oath about his role in authorizing the bankruptcy,
the report said. The groups point to a line in the Michigan
Constitution that says public worker pensions are a contractual
right that cannot be undone.
They argue that Chapter 9 of the U.S. Bankruptcy Code cannot
overrule a state constitution, the report further related. The
groups asked U.S. Bankruptcy Judge Steven Rhodes to find either
that the filing doesn't meet the tests set out in Chapter 9, or
that Chapter 9 itself violates the U.S. Constitution because it
interferes with "Michigan's sovereignty and the right of the
people of Michigan to define and control the acts of their elected
and appointed officials."
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 city's $18 billion in debt includes $5.85 billion in special
revenue obligations, $6.4 billion in post-employment benefits,
$3.5 billion for underfunded pensions, $1.13 billion on secured
and unsecured general obligations, and $1.43 billion on pension-
related debt, according to a court filing. Debt service consumes
42.5 percent of revenue. The city has 100,000 creditors and
20,000 retirees.
Detroit 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.
Sharon Levine, Esq., at Lowenstein Sandler LLP, is representing
the American Federation of State, County and Municipal Employees
and the International Union.
Babette Ceccotti, Esq., at Cohen, Weiss & Simon LLP, is
representing the United Automobile, Aerospace and Agricultural
Implement Workers of America.
A nine-member official committee of retired workers was appointed
in the case. The Retirees' Committee is represented by Dentons US
LLP.
DETROIT, MI: Retirees Want Eligibility Dispute in District Court
----------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that whether Detroit is eligible for municipal bankruptcy
is a question that must be decided by a life-tenured federal
district judge, not by a bankruptcy judge, in the opinion of the
official retirees' committee.
The report relates that early Sept. 12, the former workers'
representative in bankruptcy court filed what is known as a motion
to withdraw the reference. In plain English, the retirees'
committee contends that issues entailed in a determination of
eligibility for Chapter 9 municipal bankrupt involve questions of
state law and U.S. constitutional law that cannot be answered by a
bankruptcy judge.
According to the report, the committee's arguments center around a
provision in the Michigan Constitution saying that municipal
workers' pension rights have the status of contractual rights.
They elaborate the state constitution to mean that the state is
prohibited from using federal bankruptcy law to circumvent pension
rights the state can't impair directly.
The retiree committee also says that the appointment of Detroit's
city manager violated state law, making his actions void. In
their view, federal law prohibits bankruptcy judges from issuing
rulings on state-law based issues. The committee's arguments are
founded on a 2011 decision from the U.S. Supreme Court in a case
called Stern v. Marshall. That case stands for the proposition
that bankruptcy judges cannot make final decisions on some types
of state-law issues. The committee says that state law and
federal constitutional law questions cannot be resolved in
bankruptcy court, requiring the dispute over bankruptcy
eligibility to be kicked upstairs to a federal district judge.
At a hearing Sept. 11, Michigan Governor Rick Snyder agreed to
submit to three hours of examination under oath by labor unions
and other groups contending the city isn't eligible for
bankruptcy.
In other developments, Syncora Guarantee Inc. filed an appeal
Sept. 11 from the bankruptcy court's Aug. 28 decision giving
Detroit continued access to casino tax revenue. Unlike corporate
bankruptcies, in municipal bankruptcy the court must make a
threshold determination of whether the city is eligible for
bankruptcy under both state and federal law.
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 city's $18 billion in debt includes $5.85 billion in special
revenue obligations, $6.4 billion in post-employment benefits,
$3.5 billion for underfunded pensions, $1.13 billion on secured
and unsecured general obligations, and $1.43 billion on pension-
related debt, according to a court filing. Debt service consumes
42.5 percent of revenue. The city has 100,000 creditors and
20,000 retirees.
Detroit 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.
Sharon Levine, Esq., at Lowenstein Sandler LLP, is representing
the American Federation of State, County and Municipal Employees
and the International Union.
Babette Ceccotti, Esq., at Cohen, Weiss & Simon LLP, is
representing the United Automobile, Aerospace and Agricultural
Implement Workers of America.
A nine-member official committee of retired workers was appointed
in the case. The Retirees' Committee is represented by Dentons US
LLP.
DEWEY & LEBOEUF: Trustee Sues Legal Staffing Co. for $1.5-Mil.
--------------------------------------------------------------
Law360 reported that the liquidating trustee for Dewey & LeBoeuf
LLP on Sept. 11 fired off eight lawsuits against various companies
that provided legal, real estate brokerage, collection and other
services, including AdamsGrayson Corp., from which the trustee
seeks $1.5 million.
According to the report, Alan M. Jacobs says in a host of
adversary proceedings that AdamsGrayson, Befimmo SCA, Blaqwell
Inc., CBRE Inc., Commercial Collection Consultants Inc.,
Corporation Service Co., CT Corporation System and Dial Car Inc.
all received payments from Dewey in the 90 days before it filed
its bankruptcy petition in May.
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.
FTI Consulting, Inc. was appointed secured lender trustee for the
Secured Lender Trust. Alan Jacobs of AMJ Advisors LLC, was 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.
Dewey's liquidating Chapter 11 plan was approved by the bankruptcy
court in February 2013 and implemented in March. The plan created
a trust to collect and distribute remaining assets. The firm
estimated that midpoint recoveries for secured and unsecured
creditors under the plan would be 58.4 percent and 9.1 percent,
respectively.
DIAMONDBACK ENERGY: S&P Assigns 'B-' CCR & Rates New Notes 'CCC+'
-----------------------------------------------------------------
Standard & Poor's Ratings Services said it assigned its 'B-'
corporate credit rating to Midland, Texas-based oil and gas E&P
company Diamondback Energy Inc. The outlook is positive.
At the same time, S&P assigned its 'CCC+' issue-level rating to
Diamondback's proposed $450 million senior unsecured notes due
2021. The recovery rating is '5', indicating S&P's expectation of
modest (10% to 30%) recovery in the event of a payment default.
The company is planning to use proceeds from the proposed notes to
fund its acquisition of mineral interests in the Permian basin.
The ratings assume that the company will secure commitments for a
$225 million borrowing base at its next redetermination, which is
scheduled for early October. The rating also incorporates S&P's
expectation that the company will extend the maturity of its
credit facility beyond the current date of Oct. 15, 2014.
"The positive outlook reflects the potential for an upgrade over
the next 12 months. An upgrade will depend upon Diamondback's
successful execution of its horizontal drilling program, including
production and costs within our current expectations. If this
occurs, we believe the company could achieve production of at
least 10,000 boe/d for a sustained period a level that we consider
a minimum for the 'B' rating category. An upgrade will also
require leverage of less than 5x and adequate liquidity," said
Standard & Poor's credit analyst Marc Bromberg.
S&P could stabilize the rating if Diamondback's drilling program
failed to meet its current expectation or if debt leverage
breached 5x. S&P could also stabilize the rating if liquidity
were to fall to less than $100 million.
DOGWOOD PROPERTIES: Files Second Amended Plan Outline
-----------------------------------------------------
Dogwood Properties, G.P., on Sept. 6 submitted to the U.S.
Bankruptcy Court for the Western District of Tennessee a Second
Amended Disclosure Statement explaining the Chapter 11 Plan.
According to the Second Amended Disclosure Statement, the Plan
provides that the Debtor continue operating under existing
management. The Plan provides that claims will be paid from
future operations and the collection of rents.
The Plan provides for the payment of claims. Certain Secured
Creditors have indicated that they may make an election to be
treated as fully secured pursuant to Section 1111(b)(2) of the
Bankruptcy Code. The Plan provides for two alternative treatments
for these classes, one that assumes that the election is not made
and one assuming the election is made. The Tennessee Department
of Revenue filed a priority claim relating to Dogwood Properties,
LLC, and the Debtor is reviewing the claim to determine if it is
disputed. The Debtor is currently not aware of any other material
claims which it disputes or intends to dispute.
Brad Rainey, individually, will remain the president of the
Debtor. The Debtor's property will be managed by Reed &
Associates and members of the Debtor's staff.
A copy of the Second Amended Disclosure Statement is available for
free at http://bankrupt.com/misc/DOGWOOD_PROPERTIES_2ds.pdf
About Dogwood
Dogwood Properties, G.P., owns and operates 110 single-family
rental homes, all located in Shelby and DeSoto counties in
Tennessee. The total value of its real estate holdings is
estimated to be $9,985,000. Dogwood has nine secured lenders who
are owed a total of approximately $14,486,000.
Dogwood Properties filed a Chapter 11 petition (Bankr. W.D. Tenn.
Case No. 13-21712) on Feb. 16, 2013. Judge Jennie D. Latta
presides over the case. Russell W. Savory, Esq. at Gotten,
Wilson, Savory & Beard, PLLC, serves as the Debtor's counsel.
DTF CORP: Oct. 7 Hearing on Sale of Property to Grupo Angeles
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas will
convene a hearing on Oct. 7, 2013, at 2:30 p.m., to consider DTF
Corporation's motion to sell certain of its property to Grupo
Angeles Servicios De Salud, S.A. De C.V. Objections, if any, are
due Sept. 30.
The Debtor is 100 percent owned by International Hospital
Corporation Holding, N.V., a Netherlands limited liability
corporation that is directly or indirectly owned by a number of
individuals or entities. Gary B. Wood is a director and the Chief
Executive Officer of both the Debtor and IHC Holding Company.
IHC Holding has negotiated a transaction with Grupo Angeles
Servicios de Salud, S.A. de C.V., a Mexican corporation, which
will acquire all of the equity interests owned directly or
indirectly by IHC Holding Company of Consorcio International
Hospital, S.A. de C.V., a Mexican company that is the holding
company for numerous Mexican subsidiaries that own and operate
hospitals, clinics, and health care facilities in Mexico.
The CIMA Mexico Operations to be included in the proposed
transaction consist of the healthcare facilities and businesses in
Monterrey, Hermosillo, and Chihuahua, Mexico, which are owned or
operated by Consorcio Mexico's affiliates. The proposed
transaction does not include Consorcio Mexico's healthcare
operations in Puebla, Mexico. As noted above, Privado Monterrey
leases real estate owned by Privado Monterrey to Hospital CIMA in
Monterrey. As part of the acquisition, the Privado Monterrey
Stock will also be acquired by the purchaser.
The Purchaser and IHC Holding Company have negotiated, but have
not yet executed, a written acquisition agreement to memorialize
the terms, provisions, and conditions of the proposed
transactions. The parties would like to close the Acquisition
Transactions on or before Sept. 30, 2013.
The Purchaser will pay an aggregate purchase price of
$72.5 million in exchange for the various assets it is receiving
in the acquisition transactions, including the stock of Consorcio
Mexico and the Privado Monterrey Stock.
A copy of the terms of the sale is available for free at
http://bankrupt.com/misc/DTFCORP-sale.pdf
About DTF Corporation
DTF Corporation, f/k/a International Hospital Corporation, filed
for Chapter 11 bankruptcy (Bankr. N.D. Tex. Case No. 11-37362) on
Nov. 21, 2011. In its schedules, the Debtor disclosed $28,692,980
in assets and $38,947,695 in liabilities. The petition was signed
by Gary B. Wood, CEO and director. Judge Stacey G. Jernigan
presides the case. John P. Lewis, Jr., Esq., at the Law Office of
John P. Lewis, Jr., in Dallas, represents the Debtor as counsel.
The Debtor proposed a Plan that depends entirely on the
consummation of a recapitalization transaction involving its
parents and its corporation group.
The Estate of Michael H. Jordan filed an alternative plan of
reorganization to the plan of reorganization which provide a
resolution to the Debtor's bankruptcy case even if the proposed
recapitalization transaction does not close. Under the Jordan
Estate Plan, if the refinancing transactions close and fund as
expected, the Parent Company will use a portion of the proceeds
of those transactions to fund the Jordan Estate Plan in an amount
sufficient to pay all Allowed Claims in full, including the claims
filed by Minerva Partners, Ltd.; Walter O'Cheskey, as Trustee of
the AHF Liquidating Trust; the Jordan Estate; ViewPoint Bank, NA;
Plains Capital Bank, BOKF, N.A. d/b/a Bank of Texas, NA; and all
creditors holding Allowed Priority Claims.
No trustee or creditors committee has been appointed in the case.
EASTMAN KODAK: Emerges From Chapter 11
--------------------------------------
Eastman Kodak Company and certain of its subsidiaries have
emerged from their Chapter 11 cases, as disclosed in a regulatory
filing with the U.S. Securities and Exchange Commission. The
Debtors' First Amended Joint Chapter 11 Plan of Reorganization
became effective on Sept. 3, 2013.
On Jan. 19, 2012, the Debtors filed voluntary petitions for relief
under Chapter 11 of title 11 of the United States Code in the
United States Bankruptcy Court for the Southern District of New
York, Case No. 12-10202 (ALG). On Aug. 23, 2013, the Bankruptcy
Court entered an order confirming the Plan.
Upon effectiveness of the Plan, the Company issued shares of a new
class of common stock to participants in the 1145 Rights Offering
and the 4(2) Rights Offering, including the Backstop Parties, at a
purchase price of $11.94 per share. In satisfaction of its
obligation to pay the Backstop Fees as required under the Backstop
Commitment Agreement, the Company also issued shares of new common
stock to the Backstop Parties. Additional shares of the new
common stock, and net-share settled Warrants to purchase new
common stock, are to be issued as distributions to unsecured
creditors on account of their unsecured claims against the
Debtors.
As of the Effective Date and in connection with the Plan, the
following directors ceased to serve on the board of directors:
Richard S. Braddock, Timothy M. Donahue, Michael J. Hawley,
William H. Hernandez, Douglas R. Lebda, Kyle P. Legg, Delano E.
Lewis, Joel Seligman and Dennis F. Strigl.
Pursuant to the Plan and the Confirmation Order, Mark S. Burgess,
Matt Doheny, John A. Janitz, George Karfunkel, Jason New and Derek
Smith became members of the Company's new board of directors as of
the Effective Date. Existing directors James V. Continenza,
William G. Parrett and Antonio M. Perez will continue their
service as members of the New Board.
Disposition of Assets
On the Effective Date, the Company consummated the sale of
substantially all its assets constituting the Company's
Personalized Imaging and Document Imaging businesses to KPP Holdco
Limited, a wholly owned subsidiary of KPP Trustees Limited,
trustee for the Kodak Pension Plan of the United Kingdom, and
certain direct and indirect subsidiaries of KPP Holdco, pursuant
to the Stock and Asset Purchase Agreement, dated as of April 26,
2013, and amended and restated as of Aug. 30, 2013, between the
Company, the KPP, and the other parties thereto, and the
Settlement Agreement between the Company and the KPP, dated
April 26, 2013, for a total purchase price, exclusive of the
assumption of liabilities, of $650 million, $525 million of which
was paid in cash and the balance of which was settled by a $125
million note issued by the KPP. Pursuant to the KPP Purchase
Agreement, the KPP Note was cancelled after being assigned by the
Company to Kodak Limited, a non-Debtor subsidiary of the Company
and the primary sponsor of the U.K. Pension Plan, and subsequently
assigned by KL to KPP as settlement, by way of setoff, of an equal
amount of outstanding pension liabilities of KL to KPP.
Additional information is available for free at:
http://is.gd/OaBoTV
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.
ELDORADO RESORTS: Moody's Says MTR Merger a Credit Positive
-----------------------------------------------------------
Moody's Investors Services said Eldorado Resorts, LLC has entered
into a definitive agreement pursuant to which MTR Gaming Group
(B3/Stable) will combine with the parent company of Eldorado
Resorts, LLC (B2, stable) in a stock merger valued at $5.15 per
share is credit positive.
The principal methodology used in rating Eldorado Resorts LLC was
the Global Gaming Industry Methodology, published December 2009.
Other methodologies used include Loss Given Default for
Speculative Grade Issuers in the US, Canada, and EMEA, published
June 2009.
Eldorado Resorts LLC owns and operates the Eldorado Shreveport
Hotel and Casino located in Shreveport, Louisiana and the Eldorado
Hotel and Casino in Reno, Nevada.
ENDURANCE INT'L: Moody's Retains 'B2' Rating Over IPO Plans
-----------------------------------------------------------
Moody's Investors Service said that Endurance International Group
Holdings, Inc.'s plans to offer shares of common stock in an
Initial Public Offering are credit positive for its wholly-owned
subsidiary, EIG Investors Corp's. However, EIG's B2 corporate
family rating, the ratings for its existing credit facilities and
the negative outlook for EIG's ratings are not affected at the
present time.
Headquartered in Burlington, MA, EIG is a leading provider of web
hosting and other online services primarily to small and medium-
sized businesses.
EXIDE TECHNOLOGIES: Ends Supplier Relationship With BMW NA
----------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Exide Technologies, the maker of lead-acid batteries,
agreed to end a supplier relationship with BMW of North America
LLC dating from 2006. BMW, claiming to exercise a right in the
contract, gave notice of termination in July. Milton, Georgia-
based Exide contended BMW was compelled by the contract to buy
branded inventory on hand. The two sides reached a settlement
that comes to bankruptcy court in Delaware for approval on
Sept. 17. BMW will pay $3 million for three months of inventory.
In the process, the contract will be terminated and the car
company will have no claim in the Exide bankruptcy.
About Exide Technologies
Headquartered in Princeton, New Jersey, Exide Technologies
(NASDAQ: XIDE) -- http://www.exide.com/-- manufactures and
distributes lead acid batteries and other related electrical
energy storage products.
Exide first sought Chapter 11 protection (Bankr. Del. Case No.
02-11125) on April 14, 2002 and exited bankruptcy two years after.
Matthew N. Kleiman, Esq., and Kirk A. Kennedy, Esq., at Kirkland &
Ellis, and James E. O'Neill, Esq., at Pachulski Stang Ziehl &
Jones LLP represented the Debtors in their successful
restructuring.
Exide returned to Chapter 11 bankruptcy (Bankr. D. Del. Case No.
13-11482) on June 10, 2013.
For the new case, Exide has tapped Anthony W. Clark, Esq., at
Skadden, Arps, Slate, Meagher & Flom LLP, and Pachulski Stang
Ziehl & Jones LLP as counsel; Alvarez & Marsal as financial
advisor; Sitrick and Company Inc. as public relations consultant
and GCG as claims agent.
The Debtor disclosed $1.89 billion in assets and $1.14 billion in
liabilities as of March 31, 2013.
Exide's international operations were not included in the filing
and will continue their business operations without supervision
from the U.S. courts.
The Official Committee of Unsecured Creditors is represented by
Lowenstein Sandler LLP and Morris, Nichols, Arsht & Tunnell LLP as
co counsel. Zolfo Cooper, LLC serves as its bankruptcy
consultants and financial advisors.
FAIRMONT GENERAL: Can Use Cash Collateral Until Oct. 2
------------------------------------------------------
Judge Patrick M. Flatley of the U.S. Bankruptcy Court for the
Northern District of West Virginia, Clarksburg Division, gave
interim authority for Fairmont General Hospital, Inc., and
Fairmont Physicians, Inc., to use cash collateral securing their
prepetition indebtedness.
As security for any diminution in the value of the Cash
Collateral, UMB Bank, N.A., as successor trustee to a prepetition
indenture trust, is granted senior priority replacement liens on
all of the Debtors' assets, excluding claims and causes of action
and their proceeds, and a superpriority administrative claim.
The replacement liens and the superpriority administrative claim
will be junior and subordinate to (a) all accrued but unpaid fees
and expenses of professionals incurred prior to the delivery of a
termination notice, (b) professional fees and expenses in the
amount of $50,000 incurred after delivery of a termination notice,
and (c) the payment of fees pursuant to 28 U.S.C. Sec. 1930.
A final hearing on the Cash Collateral Motion is scheduled for
Oct. 2, 2013, at 9:30 a.m. (EST). Objections are due Sept. 26.
A full-text copy of the Interim Cash Collateral Order with
accompanying 13-Week Budget is available for free at:
http://bankrupt.com/misc/FAIRMONTcashcolord0906.pdf
About Fairmont General
Fairmont General Hospital Inc. and Fairmont Physicians, Inc.,
which operate a 207-bed acute-care facility in Fairmont, West
Virginia, sought Chapter 11 bankruptcy protection (Bankr. N.D.
W.Va. Case No. 13-01054) on Sept. 3, 2013, listing between $10
million and $50 million in both assets and debt.
The fourth-largest employer in Marion County, West Virginia, filed
for bankruptcy as it looks to partner with another hospital or
health system.
The Debtors are represented by Rayford K. Adams, III, Esq., at
Spilman Thomas & Battle, PLLC, in Winston-Salem, North Carolina;
David R. Croft, Esq., at Spilman Thomas & Battle, PLLC, in
Wheeling, West Virginia, and Michael S. Garrison, Esq., at Spilman
Thomas & Battle, PLLC, in Morgantown, West Virginia. The Debtors'
financial analyst is Gleason & Associates, P.C. The Debtors'
claims and noticing agent is Epiq Bankruptcy Solutions.
FAIRMONT GENERAL: Has Interim Court OK to Hire Hammond Hanlon
-------------------------------------------------------------
Fairmont General Hospital, Inc., and Fairmont Physicians, Inc.,
sought and obtained interim authority from Judge Patrick M.
Flatley of the U.S. Bankruptcy Court for the Northern District of
West Virginia, Clarksburg Division, to employ Hammond Hanlon Camp,
LLC, as their financial advisors.
The Debtors have agreed to pay $50,000 per month for the first
four months, and $25,000 per month thereafter to H2C for its
advisory services. In addition, the Debtors have agreed to pay
H2C a success fee of $400,000 upon the successful reorganization
of the Debtor. Further, the Debtor has agreed to pay H2C a fee
equal to the greater of 1.0% of the gross amount obtained or
$100,000 if H2C successfully obtains debtor-in-possession
financing from a third party other than MidCap Financial, LLC. In
the event the Debtor obtains debtor-in-possession financing from
Midcap Financial, LLC, the fee due to H2C will be 0.5% of the
gross amount obtained.
The Debtors have also agreed to reimburse H2C for all actual and
out-of-pocket expenses incurred by it on the Debtors' behalf.
Thomas M. Barry assured the Court that his firm is a
"disinterested person" as the term is defined in Section 101(14)
of the Bankruptcy Code and does not represent any interest adverse
to the Debtors and their estates. Since the inception of the
relationship, the Debtor has paid H2C $100,000 in an initial
retainer fee.
If no written objection to the entry of the Interim Order is filed
by Sept. 26, 2013, the Interim Order will immediately and
automatically become a final order without need for further action
from any party or the Court. Any objection to the entry of the
Interim Order, timely filed with notice provided to counsel to the
Debtors, will be heard at 9:30 a.m. on Oct. 2.
About Fairmont General
Fairmont General Hospital Inc. and Fairmont Physicians, Inc.,
which operate a 207-bed acute-care facility in Fairmont, West
Virginia, sought Chapter 11 bankruptcy protection (Bankr. N.D.
W.Va. Case No. 13-01054) on Sept. 3, 2013, listing between $10
million and $50 million in both assets and debts.
The fourth-largest employer in Marion County, West Virginia, filed
for bankruptcy as it looks to partner with another hospital or
health system.
The Debtors are represented by Rayford K. Adams, III, Esq., at
Spilman Thomas & Battle, PLLC, in Winston-Salem, North Carolina;
David R. Croft, Esq., at Spilman Thomas & Battle, PLLC, in
Wheeling, West Virginia, and Michael S. Garrison, Esq., at Spilman
Thomas & Battle, PLLC, in Morgantown, West Virginia. The Debtors'
financial analyst is Gleason & Associates, P.C. The Debtors'
claims and noticing agent is Epiq Bankruptcy Solutions.
FAIRMONT GENERAL: Has Interim Authority to Employ Epiq
------------------------------------------------------
Judge Patrick M. Flatley of the U.S. Bankruptcy Court for the
Northern District of West Virginia, Clarksburg Division, gave
interim authority for Fairmont General Hospital, Inc., and
Fairmont Physicians, Inc., to employ Epiq Bankruptcy Solutions,
LLC, as notice, claims, and solicitation agent.
If no written objection to the entry of the Interim Order is filed
by Sept. 26, 2013, the Interim Order will immediately and
automatically become a final order without need for further action
from any party or the Court. Any objection to the entry of the
Interim Order, timely filed with notice provided to counsel to the
Debtors, will be heard at 9:30 a.m. on Oct. 2.
About Fairmont General
Fairmont General Hospital Inc. and Fairmont Physicians, Inc.,
which operate a 207-bed acute-care facility in Fairmont, West
Virginia, sought Chapter 11 bankruptcy protection (Bankr. N.D.
W.Va. Case No. 13-01054) on Sept. 3, 2013, listing between $10
million and $50 million in both assets and debts.
The fourth-largest employer in Marion County, West Virginia, filed
for bankruptcy as it looks to partner with another hospital or
health system.
The Debtors are represented by Rayford K. Adams, III, Esq., at
Spilman Thomas & Battle, PLLC, in Winston-Salem, North Carolina;
David R. Croft, Esq., at Spilman Thomas & Battle, PLLC, in
Wheeling, West Virginia, and Michael S. Garrison, Esq., at Spilman
Thomas & Battle, PLLC, in Morgantown, West Virginia. The Debtors'
financial analyst is Gleason & Associates, P.C. The Debtors'
claims and noticing agent is Epiq Bankruptcy Solutions.
FAIRMONT GENERAL: Schedules Filing Deadline Extended to Oct. 17
---------------------------------------------------------------
The time within which Fairmont General Hospital, Inc., and
Fairmont Physicians, Inc., must file their schedules of assets and
liabilities and statements of affairs is extended to and including
Oct. 17, 2013, according to an order signed by Judge Patrick M.
Flatley of the U.S. Bankruptcy Court for the Northern District of
West Virginia, Clarksburg Division.
About Fairmont General
Fairmont General Hospital Inc. and Fairmont Physicians, Inc.,
which operate a 207-bed acute-care facility in Fairmont, West
Virginia, sought Chapter 11 bankruptcy protection (Bankr. N.D.
W.Va. Case No. 13-01054) on Sept. 3, 2013, listing between $10
million and $50 million in both assets and debts.
The fourth-largest employer in Marion County, West Virginia, filed
for bankruptcy as it looks to partner with another hospital or
health system.
The Debtors are represented by Rayford K. Adams, III, Esq., at
Spilman Thomas & Battle, PLLC, in Winston-Salem, North Carolina;
David R. Croft, Esq., at Spilman Thomas & Battle, PLLC, in
Wheeling, West Virginia, and Michael S. Garrison, Esq., at Spilman
Thomas & Battle, PLLC, in Morgantown, West Virginia. The Debtors'
financial analyst is Gleason & Associates, P.C. The Debtors'
claims and noticing agent is Epiq Bankruptcy Solutions.
FINJAN HOLDINGS: Presented at 2013 Gateway Conference
-----------------------------------------------------
Finjan Holdings, Inc.'s President Phil Hartstein presented at the
2013 Gateway Conference on Sept. 10, 2013, at the Palace Hotel in
San Francisco.
The presentation was webcast live and available for replay at
www.gateway-conference.com under the Presenting Companies tab or
at http://public.viavid.com/index.php?id=106037. The Company's
investor presentation will be made available for download at
http://finjan.com/investor-presentation/after the close of market
on Monday, Sept. 9, 2013. A copy of the Investor Presentation is
available for free at http://is.gd/Z6Mxly
About Finjan
Finjan, formerly known as Converted Organics, is a leading online
security and technology company which owns a portfolio of patents,
related to software that proactively detects malicious code and
thereby protects end-users from identity and data theft, spyware,
malware, phishing, trojans and other online threats. Founded in
1997, Finjan is one of the first companies to develop and patent
technology and software that is capable of detecting previously
unknown and emerging threats on a real-time, behavior-based basis,
in contrast to signature-based methods of intercepting only known
threats to computers, which were previously standard in the online
security industry.
Converted Organics disclosed a net loss of $8.42 million in 2012,
as compared with a net loss of $17.98 million in 2011. The
Company's balance sheet at June 30, 2013, showed $31.84 million in
total assets, $1.16 million in total liabilities and $30.67
million total stockholders' equity.
Moody, Famiglietti & Andronico, LLP, in Tewksbury, Massachusetts,
issued a "going concern" qualification on the consolidated
financial statements for the year ended Dec. 31, 2012, citing
recurring losses and negative cash flows from operations and an
accumulated deficit that raises substantial doubt about the
Company's ability to continue as a going concern.
FURNITURE BRANDS: Seeks Okay of Oaktree-Led Auction; KPS to Bid
---------------------------------------------------------------
Furniture Brands International will seek approval at a hearing on
Oct. 2, 2013, at 11:00 a.m. of proposed sale procedures where
affiliates of funds managed by Oaktree Capital Management L.P.,
will open the auction with a $166 million offer. Objections to
the bid procedures are due Sept. 25, 2013.
Furniture Brands proposes holding the auction on Jan. 8. If the
judge goes along with the company's schedule, competing bids would
be due initially on Jan. 3. The sale-approval hearing would take
place Jan. 10.
A copy of the proposed bidding procedures order and the asset
purchase agreement is available at:
http://bankrupt.com/misc/FB_Proposed_BidOrder_APA.pdf
The Debtors propose to pay Oaktree a $6 million break-up fee in
the event it is outbid in the auction. The breakup fee is 6% of
the total purchase price.
The Wall Street Journal reports that a potential bidding war is
brewing as KPS Capital Partners, a New York private-equity firm
that focuses on turning around troubled manufacturers, has
conveyed plans to submit a bid for Furniture Brands.
The company previously said it intends on having a sale of the
Lane business lined up within 30 days. KPS said it would purchase
Lane too.
About Furniture Brands
Furniture Brands International (NYSE:FBN) --
http://www.furniturebrands.com-- engages in the designing,
manufacturing, sourcing and retailing home furnishings.
Furniture Brands markets products through a wide range of
channels, including company owned Thomasville retail stores and
through interior designers, multi-line/ independent retailers and
mass merchant stores. Furniture Brands serves its customers
through some of the best known and most respected brands in the
furniture industry, including Thomasville, Broyhill, Lane, Drexel
Heritage, Henredon, Pearson, Hickory Chair, Lane Venture,
Maitland-Smith and LaBarge.
On Sept. 9, 2013, Furniture Brands International, Inc. and 18
affiliated companies sought Chapter 11 protection (Bankr. D. Del.
Lead Case No. 13-12329).
Attorneys at Paul Hastings LLP and Young Conaway Stargatt &
Taylor, LLP, serve as counsel to the Debtors. Alvarez and Marsal
North America, LLC, is the restructuring advisors. Miller
Buckfire & Co., LLC is the investment Banker. Epiq Systems Inc.
dba Epiq Bankruptcy Solutions is the claims and notice agent.
Furniture Brands' balance sheet at June 29, 2013, showed
$546.73 million in total assets against $550.13 million in total
liabilities.
FURNITURE BRANDS: Wins Approval of First Day Motions
----------------------------------------------------
Furniture Brands International Inc., which is selling its assets
via bankruptcy, won interim approval of its request to obtain
bankruptcy financing from buyer Oaktree Capital Management LP, as
well as other first day motions on Sept. 11.
U.S. Bankruptcy Judge Christopher Sontchi entered an interim order
that allows Furniture Brands to borrow as much as $115 million
from Oaktree. A hearing is slated for Oct. 2 to consider approval
of the full $150 million financing. A copy of the Interim DIP
order is available for free at:
http://bankrupt.com/misc/FB_Interim_DIP_Order.pdf
The Debtors told the judge that without the DIP financing, they
will likely experience a liquidity shortfall within the next few
days and will be deprived of the capital necessary to operate
their business.
Oaktree has signed a deal to buy all of the Debtors' assets --
with the exception of the Debtors' Lane Furniture Business -- for
$166 million, absent higher and better offers.
The $140 million senior secured DIP facility from Oaktree will
consist of a term loan of $90 million and a $50 million revolving
commitment. The $90 million would be used to pay off existing
lenders -- Wells Fargo & Co., Bank of America Corp. and General
Electric Co. unit GE Capital. Only $25 million of the revolver
will be available upon interim approval of the loan. Interest
rate was slated at 6.5% per annum. NexBank SSB, as DIP agent,
will be entitled to a $2.8 million termination fee plus an
original issue discount and certain agent fees. A DIP financing
will mature at the date of the closing of the sale or 150 days
after the Petition Date. The DIP agreement set various
milestones, including:
-- approval of the bidding procedures and final approval of the
DIP financing 35 days after the Petition Date;
-- approval of the sale of the assets 135 days after the
Petition Date.
-- closing of the sale of the assets 140 days after the
Petition Date.
-- approval of the sale of the Debtors' Lane Furniture Business
sale 30 days after the Petition Date.
Concessions
Patrick Fitzgerald, writing for The Wall Street Journal, reports
that KPS Capital Partners, a New York private-equity firm that
focuses on turning around troubled manufacturers, emerged at the
hearing Wednesday to announce that it would participate in an
auction of r the assets.
The new offer from KPS would include the purchase of Furniture
Brands' Lane Furniture business, said Mark Thomas, Esq. --
mthomas@proskauer.com -- a lawyer at Proskauer Rose, KPS Capital's
lawyer.
According to the report, KPS Capital also came to court with an
alternative financing package to Oaktree's proposed $140 million
bankruptcy loan.
As a result of KPS's interest, Oaktree agreed to certain
concessions, including cutting the interest rate, fees and
milestones, with respect to the bankruptcy loan, according to the
report. Oaktree also agreed to "backstop" a sale of the Lane
Furniture business for $49 million, said Luc Despins, Furniture
Brands' bankruptcy lawyer.
Other First Day Motions
The judge also granted interim approval of the Debtors' request to
pay prepetition claims of critical vendors. Payments to critical
vendors will be limited to $11.7 million pending final approval of
the motion. Payment will only be made to critical vendors that
agree to continue to supply goods and services according to their
ordinary course trade terms.
The Debtors also won interim approval to establish notification
and hearing procedures that must be satisfied before certain
transfers of equity securities in FBN. The rules only affect
current holders of 382,00 shares of common stock, representing
4.75% of the 8,041,438 shares of common stock outstanding.
A final hearing on the first day motions is slated for Oct. 2.
Company Press Release
Furniture Brands said the interim approval of the DIP facility
gives the company immediate access of $25 million of new liquidity
provided by Oaktree Capital Management L.P. allowing Furniture
Brands to operate business uninterrupted and continue to meet its
post-petition financial obligations, including the payment of
employee wages and benefits, timely payment of supplier invoices,
continued servicing of customer orders and shipments, and other
obligations.
"As a result of this approval, Furniture Brands will be able to
continue its day-to-day operations without interruption and can
begin to implement the restructuring initiatives necessary under
the Chapter 11 process," said Ralph Scozzafava, Chairman of the
Board and CEO of Furniture Brands. "We are highly confident that
as a result of these actions we will emerge as an even stronger
company."
About Furniture Brands
Furniture Brands International (NYSE:FBN) --
http://www.furniturebrands.com-- engages in the designing,
manufacturing, sourcing and retailing home furnishings.
Furniture Brands markets products through a wide range of
channels, including company owned Thomasville retail stores and
through interior designers, multi-line/ independent retailers and
mass merchant stores. Furniture Brands serves its customers
through some of the best known and most respected brands in the
furniture industry, including Thomasville, Broyhill, Lane, Drexel
Heritage, Henredon, Pearson, Hickory Chair, Lane Venture,
Maitland-Smith and LaBarge.
On Sept. 9, 2013, Furniture Brands International, Inc. and 18
affiliated companies sought Chapter 11 protection (Bankr. D. Del.
Lead Case No. 13-12329).
Attorneys at Paul Hastings LLP and Young Conaway Stargatt &
Taylor, LLP, serve as counsel to the Debtors. Alvarez and Marsal
North America, LLC, is the restructuring advisors. Miller
Buckfire & Co., LLC is the investment Banker. Epiq Systems Inc.
dba Epiq Bankruptcy Solutions is the claims and notice agent.
Furniture Brands' balance sheet at June 29, 2013, showed $546.73
million in total assets against $550.13 million in total
liabilities.
FURNITURE BRANDS: Oaktree Sweetens Bid after KPS Makes Offer
------------------------------------------------------------
Patrick Fitzgerald, writing for Daily Bankruptcy Review, reported
that a potential bidding war between two buyout firms is brewing
over Furniture Brands International Inc., the big furniture
manufacturer that filed for Chapter 11 earlier this week with a
plan to sell most of its assets to Oaktree Capital Management.
Law360 reported that private equity firm KPS Capital Partners LP
crashed Furniture Brands' first-day hearing in Delaware bankruptcy
court on Sept. 11 by signaling it was considering lodging a rival
offer and alternative financing to prepetion lender Oaktree
Capital's $166 million bid and $140 million bankruptcy loan.
According to the Law360 report, the announcement at the beginning
of the hearing in Wilmington, details of which were not publicly
disclosed, prompted hours of closed-door negotiations among the
parties before Oaktree came back with what the debtors said were
improved loan terms.
About Furniture Brands
Furniture Brands International (NYSE:FBN) --
http://www.furniturebrands.com-- engages in the designing,
manufacturing, sourcing and retailing home furnishings.
Furniture Brands markets products through a wide range of
channels, including company owned Thomasville retail stores and
through interior designers, multi-line/ independent retailers and
mass merchant stores. Furniture Brands serves its customers
through some of the best known and most respected brands in the
furniture industry, including Thomasville, Broyhill, Lane, Drexel
Heritage, Henredon, Pearson, Hickory Chair, Lane Venture,
Maitland-Smith and LaBarge.
On Sept. 9, 2013, Furniture Brands International, Inc. and 18
affiliated companies sought Chapter 11 protection (Bankr. D. Del.
Lead Case No. 13-12329).
Attorneys at Paul Hastings LLP and Young Conaway Stargatt &
Taylor, LLP, serve as counsel to the Debtors. Alvarez and Marsal
North America, LLC, is the restructuring advisors. Miller
Buckfire & Co., LLC is the investment Banker. Epiq Systems Inc.
dba Epiq Bankruptcy Solutions is the claims and notice agent.
Furniture Brands' balance sheet at June 29, 2013, showed $546.73
million in total assets against $550.13 million in total
liabilities.
GENERAL MOTORS: Told to Selectively Fund Pensions
-------------------------------------------------
Reuters reported that the former head of President Barack Obama's
auto task force acknowledges that he instructed General Motors not
to commit money to a pension fund for some former employees during
the automaker's 2009 bankruptcy.
"We concluded it was not commercially reasonable," Steven Rattner,
who directed the bailout of the auto sector during the height of
the nation's financial crisis, told a House hearing on Sept. 11,
the report related.
According to the report, Republican lawmakers have criticized the
decision as an example of overly deep meddling by the Obama
administration in private business.
"The administration picked winners and losers," Rep. Michael
Turner, R-Ohio, said during the hearing, the report further
related.
The government plans to exit GM by early 2014, the report said.
Taxpayers are likely to lose billions of dollars on the bailout.
About General Motors
With its global headquarters in Detroit, Michigan, General Motors
Company (NYSE:GM, TSX: GMM) -- http://www.gm.com/-- is one of
the world's largest automakers, traces its roots back to 1908.
GM employs 208,000 people in every major region of the world and
does business in more than 120 countries. GM and its strategic
partners produce cars and trucks in 30 countries, and sell and
service these vehicles through the following brands: Baojun,
Buick, Cadillac, Chevrolet, GMC, Daewoo, Holden, Isuzu, Jiefang,
Opel, Vauxhall, and Wuling. GM's largest national market is
China, followed by the United States, Brazil, the United Kingdom,
Germany, Canada, and Italy. GM's OnStar subsidiary is the
industry leader in vehicle safety, security and information
services.
General Motors Co. was formed to acquire the operations of
General Motors Corp. through a sale under 11 U.S.C. Sec. 363
following Old GM's bankruptcy filing. The U.S. government once
owned as much as 60.8% stake in New GM on account of the
financing it provided to the bankrupt entity. The deal was
closed July 10, 2009, and Old GM changed its name to Motors
Liquidation Co.
General Motors Corp. and three of its affiliates filed for
Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 09-50026) on
June 1, 2009. The Honorable Robert E. Gerber presides over the
Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin,
Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges
LLP, assist the Debtors in their restructuring efforts. Al Koch
at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as
the Chief Executive Officer for Motors Liquidation Company. GM
is also represented by Jenner & Block LLP and Honigman Miller
Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP
is providing legal advice to the GM Board of Directors. GM's
financial advisors are Morgan Stanley, Evercore Partners and the
Blackstone Group LLP. Garden City Group is the claims and notice
agent of the Debtors.
The U.S. Trustee appointed an Official Committee of Unsecured
Creditors and a separate Official Committee of Unsecured
Creditors Holding Asbestos-Related Claims. Lawyers at Kramer
Levin Naftalis & Frankel LLP served as bankruptcy counsel to the
Creditors Committee. Attorneys at Butzel Long served as counsel
on supplier contract matters. FTI Consulting Inc. served as
financial advisors to the Creditors Committee. Elihu Inselbuch,
Esq., at Caplin & Drysdale, Chartered, represented the Asbestos
Committee. Legal Analysis Systems, Inc., served as asbestos
valuation analyst.
The Bankruptcy Court entered an order confirming the Debtors'
Second Amended Joint Chapter 11 Plan on March 29, 2011. The Plan
was declared effect on March 31, 2011.
GMG CAPITAL PARTNERS: Files for Chapter 11 in Manhattan
-------------------------------------------------------
GMG Capital Partners III, L.P., and GMG Capital Partners III
Companion Fund, L.P., sought Chapter 11 protection (Bankr.
S.D.N.Y. Case No. 13-12937 and 13-12939) in Manhattan on Sept. 10,
2013.
The Debtors' assets consist of their venture capital investments
-- equity securities in three entities -- and accounts receivable
in the form of unpaid fees due from certain of their limited
partners. The Debtors' operations are largely managed in
Manhattan through JDJ Management, LLC. JDJ is controlled by the
same principals as is the general partner.
GMG Capital Partners III estimated assets in excess of $10 million
and liabilities of $1 million to $10 million.
Precipitating the Debtors' chapter 11 filing was a money judgment
for breach of contract against the Debtors and certain of their
affiliates, jointly and severally, entered by the Superior Court
for the State of Delaware on June 21, 2013. The amount of the
money judgment was approximately $6.950 million. Because the
Debtors assets are illiquid at this time, neither Debtor is in
position to satisfy that judgment.
Jeffrey Gilfix, COO of GMG Capital Investments, LLC, the general
partner of the Debtors, explains in court filings, "Depending on
the methodology of valuation used, the Debtors may be solvent,
even though they have no cash. One such valuation performed by
the Debtors collectively results in as much as approximately
$24 million in assets among the two Debtors (of approximately
$41 million allocated to the Debtors and its non-Debtor sister
funds). The Debtors believe their aggregate debt is approximately
$9 million. The Debtors' value and ability to pay their creditors
in full, however, ultimately hinges on whether their investments
in a certain venture, Open Peak, and to a lesser extent, their
investments in Lancope, come to fruition. I am fairly confident
this will be the case. In the interim, however, the Debtors'
assets are not ripe for disposition."
Attorneys at Olshan Frome Wolosky, LLP, represent the Debtors.
An initial case conference is scheduled for Oct. 10, 2013. The
Debtors' Chapter 11 plan and disclosure statement are due Jan. 8,
2014.
HOWREY LLP: Judge Approves Settlements with Citibank, Baker
-----------------------------------------------------------
Jacqueline Palank, writing for DBR Small Cap, reported that a
bankruptcy judge approved two multimillion-dollar settlements in
Howrey LLP's liquidation, a boon for creditors of the defunct law
firm.
About Howrey LLP
Three creditors filed an involuntary Chapter 7 petition (Bankr.
N.D. Cal. Case No. 11-31376) on April 11, 2011, against the
remnants of the Washington-based law firm Howrey LLP. The filing
was in San Francisco, where the firm had an office. The firm
previously was known as Howrey & Simon and Howrey Simon Arnold &
White LLP. The firm at one time had more than 700 lawyers in 17
offices. The partners voted to dissolve in March 2011.
The firm specialized in antitrust and intellectual-property
matters. The three creditors filing the involuntary petition
together have $36,600 in claims, according to their petition.
The involuntary chapter 7 petition was converted to a chapter 11
case in June 2011 at the request of the firm. In its schedules
filed in July, the Debtor disclosed assets of $138.7 million and
liabilities of $107.0 million.
Representing Citibank, the firm's largest creditor, is Kelley
Cornish, Esq., a partner at Paul, Weiss, Rifkind, Wharton &
Garrison. Representing Howrey is H. Jason Gold, Esq., a partner
at Wiley Rein.
The Official Committee of Unsecured Creditors is represented in
the case by Bradford F. Englander, Esq., at Whiteford, Taylor And
Preston LLP.
In September 2011, Citibank sought conversion of the Debtor's case
to Chapter 7 or, in the alternative, appointment of a Chapter 11
Trustee. The Court entered an order appointing a Chapter 11
Trustee. In October 2011, Allan B. Diamond was named as Trustee.
IDERA PHARMACEUTICALS: To Sell $75 Million of Securities
--------------------------------------------------------
Idera Pharmaceuticals, Inc., may offer up to $75 million worth of
common stock, preferred stock, depositary shares and warrants.
The Company said it will provide the specific terms of these
securities in supplements to the prospectus. The prospectus
supplements will also describe the specific manner in which these
securities will be offered and may also supplement, update or
amend information contained in this document. The Company's
common stock trades on the Nasdaq Capital Market under the symbol
"IDRA." A copy of the Form S-3 prospectus is available for free
at http://is.gd/w3qHl0
Idera separately registered 9,945,000 shares of common stock
issuable under the 2013 Stock Incentive Plan at a proposed maximum
offering price of $22.5 million. A copy of the Form S-8 is
available for free at http://is.gd/zLpDFb
About Idera Pharmaceuticals
Cambridge, Massachusetts-based Idera Pharmaceuticals, Inc., is a
clinical stage biotechnology company engaged in the discovery and
development of novel synthetic DNA- and RNA-based drug candidates
that are designed to modulate immune responses mediated through
Toll-like Receptors, or TLRs. The Company has two drug
candidates, IMO-3100, a TLR7 and TLR9 antagonist, and IMO-8400, a
TLR7, TLR8, and TLR9 antagonist, in clinical development for the
treatment of autoimmune and inflammatory diseases.
In the auditors' report on the consolidated financial statements
for the year ended Dec. 31, 2012, Ernst & Young LLP, in Boston,
Mass., expressed substantial doubt about Idera's ability to
continue as a going concern, citing recurring losses and negative
cash flows from operations and the necessity to raise additional
capital or alternative means of financial support, or both, prior
to Dec. 31, 2013, in order to continue to fund its operations.
The Company reported a net loss of $19.2 million on $51,000 of
revenue in 2012, compared with a net loss of $23.8 million on
$53,000 of revenue in 2011. Revenue in 2012 and 2011 consisted of
reimbursement by licensees of costs associated with patent
maintenance.
The Company's balance sheet at March 31, 2013, showed
$6.81 million in total assets, $4.10 million in total liabilities,
$5.92 million in series D redeemable convertible preferred stock,
and a $3.21 million total stockholders' deficit.
INSPIREMD INC: Presented at Rodman & Renshaw Conference
-------------------------------------------------------
InspireMD, Inc., filed with the U.S. Securities and Exchange
Commission a copy of a PowerPoint presentation that the Company
presented on Sept. 10, 2013, at the Rodman & Renshaw Global
Investment Conference in New York City, a copy of which is
available for free at http://is.gd/cSXkAv
About InspireMD
InspireMD, Inc., was organized in the State of Delaware on
Feb. 29, 2008, as Saguaro Resources, Inc., to engage in the
acquisition, exploration and development of natural resource
properties. On March 28, 2011, the Company changed its name from
"Saguaro Resources, Inc." to "InspireMD, Inc."
Headquartered in Tel Aviv, Israel, InspireMD, Inc., is a medical
device company focusing on the development and commercialization
of its proprietary stent platform technology, Mguard. MGuard
provides embolic protection in stenting procedures by placing a
micron mesh sleeve over a stent. The Company's initial products
are marketed for use mainly in patients with acute coronary
syndromes, notably acute myocardial infarction (heart attack) and
saphenous vein graft coronary interventions (bypass surgery).
InspireMD reported a net loss of US$17.59 million on US$5.35
million of revenue for the year ended June 30, 2012, compared with
a net loss of US$6.17 million on US$4.67 million of revenue during
the prior year. For the nine months ended March 31, 2013, the
Company incurred a net loss of $14.31 million on $3.37 million of
revenues. The Company's balance sheet at March 31, 2013, showed
$9.79 million in total assets, $13.20 million in total
liabilities, and a $3.40 million total capital deficiency.
Kesselman & Kesselman, in Tel Aviv, Israel, issued a "going
concern" qualification on the consolidated financial statements
for the year ended June 30, 2012. The independent auditors noted
that the Company has had recurring losses, negative cash flows
from operating activities and has significant future commitments
that raise substantial doubt about its ability to continue as a
going concern.
The Company said the following statement in its quarterly report
for the period ended Dec. 31, 2012: "The Company has had
recurring losses and negative cash flows from operating activities
and has significant future commitments. For the six months ended
December 31, 2012, the Company had losses of approximately $9.4
million and negative cash flows from operating activities of
approximately $5.8 million. The Company's management believes
that its financial resources as of December 31, 2012 should enable
it to continue funding the negative cash flows from operating
activities through the three months ended September 30, 2013.
Furthermore, commencing October 2013, the Company's senior secured
convertible debentures (the "2012 Convertible Debentures") are
subject to a non-contingent redemption option that could require
the Company to make a payment of $13.3 million, including accrued
interest. Since the Company expects to continue incurring
negative cash flows from operations and in light of the cash
requirement in connection with the 2012 Convertible Debentures,
there is substantial doubt about the Company's ability to continue
operating as a going concern. These financial statements include
no adjustments of the values of assets and liabilities and the
classification thereof, if any, that will apply if the Company is
unable to continue operating as a going concern."
HD SUPPLY: Files Form 10-Q, Incurs $72MM Net Loss in 2nd Quarter
----------------------------------------------------------------
H.D. Supply, Inc., and its subsidiaries filed with the U.S.
Securities and Exchange Commission their quarterly report on Form
10-Q disclosing a net loss of $72 million on $2.25 billion of net
sales for the three months ended Aug. 4, 2013, as compared with a
net loss of $56 million on $2.05 billion of net sales for the
three months ended July 29, 2012.
For the six months ended Aug. 4, 2013, the Companies reported a
net loss of $203 million on $4.32 billion of net sales as compared
with a net loss of $416 million on $3.89 billion of net sales for
the six months ended July 29, 2012.
As of Aug. 4, 2013, the consolidated balance sheet showed
$6.58 billion in total assets, $7.34 billion in total liabilities
and a $753 million total stockholders' deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/o8MBH8
About HD Supply
HD Supply, Inc., headquartered in Atlanta, Georgia, is one of the
largest North American wholesale distributors supporting
residential and non-residential construction and to a lesser
extent electrical consumption and repair and remodeling. HDS also
provides maintenance, repair and operations services. Its
businesses are organized around three segments: Infrastructure and
Energy; Maintenance, Repair & Improvement; and, Specialty
Construction. HDS operates through approximately 800 locations
throughout the U.S. and Canada serving contractors, government
entities, maintenance professionals, home builders and
professional businesses.
For the 12 months ended Feb. 3, 2013, the Company incurred a net
loss of $1.17 billion on $8.03 billion of net sales, as compared
with a net loss of $543 million on $7.02 billion of net sales for
the 12 months ended Jan. 29, 2012.
* * *
As reported by the TCR on Jan. 11, 2013, Moody's Investors Service
upgraded HD Supply, Inc.'s ("HDS") corporate family rating to B3
from Caa1 and its probability of default rating to B3 from Caa1.
This rating action results from our expectations that HDS will
refinance a significant portion of its senior subordinated notes
due 2015, effectively extending the remainder of its maturities by
at least two years to 2017.
HD Supply carries a 'B' corporate credit rating, with
negative outlook, from Standard & Poor's Ratings Services.
IBAHN CORP: Has Interim Approval for $1.5 Million Revolving Credit
------------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that IBahn Corp., a provider of wired and wireless
Internet and television for hotels, received interim approval this
week for a $1.5 million revolving credit provided by existing
lender JPMorgan Chase & Co. There will be a hearing on Oct. 7 for
final approval of the loan, which has a lien coming behind
existing secured debt.
Salt Lake City, Utah-based IBahn Corp., a provider of Internet
services to hotels, sought bankruptcy protection (Bankr. D. Del.
Case No. 13-12285), citing a loss of contracts with largest
customer Marriott International Inc. and patent litigation costs.
IBahn Chief Financial Officer Ryan Jonson said the company had
assets of $13.6 million and it listed liabilities of as much as
$50 million in the Chapter 11 filing on Sept. 6, 2013. IBahn owes
$16 million to JPMorgan on a revolving credit and term loan.
INTERFAITH MEDICAL: State Delays Brooklyn Hospital Closing
----------------------------------------------------------
Barbara Benson, writing for Crain's New York Business, reported
that Interfaith Medical Center officials and creditors went to
court on Sept. 11 seeking approval of a plan to close the Brooklyn
hospital by Christmas Day. Instead, in a surprise move, the state
Department of Health asked the court to adjourn the hearing until
Oct. 15. The state also pledged $3.3 million to keep the hospital
running.
According to the report, the unexpected reprieve for Interfaith,
which seemed fated to close its doors weeks ago, is the latest
dramatic turn of events for the hospital. Interfaith submitted a
new closure plan Sept. 10 to the New York state Department of
Health that called for the Bedford-Stuyvesant, Brooklyn-based
hospital to close by Dec. 25.
A bankruptcy court judge was set to review the closure plan,
additional financing for the hospital, as well as legal moves by
Public Advocate Bill de Blasio, who came in first in the
Democratic mayoral primary, to keep Interfaith open, the report
related. Mr. de Blasio's attorneys filed a motion in federal
bankruptcy court on Aug. 20 to halt the closure, arguing that
state health officials approved Interfaith's closure plan
improperly and disregarded a 90-day review period required under
law.
The court proceedings originally had been scheduled for Aug. 26
but were adjourned at the request of the state Department of
Health, the report recalled. According to a draft closure plan
filed with the court, Interfaith wanted to put its emergency
department on permanent diversion on Sept. 26, and to stop
accepting new inpatient admissions that day. By Sept. 26 at 6
a.m., the emergency department would just be a "treat and release
or transfer" site. All inpatients would be discharged or
transferred by Oct. 26, while all outpatient services would end
Nov. 26. All other services, including HIV, detox and
rehabilitation, would end Dec. 25.
Interfaith disclosed that Kingsbrook Jewish Medical Center has
agreed to take over several clinics, including an HIV treatment
center on Bergen Street, the Bishop O.G. Walker Jr. Health Care
Center, a dental clinic and an "urgicenter" on Atlantic Avenue,
the report said.
About Interfaith Medical Center
Headquartered in Brooklyn, New York, Interfaith Medical Center,
Inc., operates a 287-bed hospital on Atlantic Avenue in Bedford-
Stuyvesant and an ambulatory care network of eight clinics in
central Brooklyn, in Crown Heights and Bedford-Stuyvesant.
The Company filed for Chapter 11 protection (Bankr. E.D. N.Y.
Case No. 12-48226) on Dec. 2, 2012. The Debtor disclosed
$111,872,972 in assets and $193,540,998 in liabilities as of the
Chapter 11 filing. Liabilities include $117.9 million owing to
the New York State Dormitory Authority on bonds secured by the
assets.
Alan J. Lipkin, Esq., at Willkie Farr & Gallagher LLP, serves as
bankruptcy counsel to the Debtor. Nixon Peabody LLP is the
special corporate and healthcare counsel. CohnReznick LLP serves
as financial advisor. Donlin, Recano & Company, Inc. serves as
administrative agent.
The Official Committee of Unsecured Creditors tapped Alston & Bird
LLP as its counsel, and CBIZ Accounting, Tax & Advisory of New
York, LLC as its financial advisor.
Eric M. Huebscher, the patient care ombudsman, tapped the law firm
of DiConza Traurig LLP, as his counsel.
JOHN CLEMENTE: NJ High Court Won't Nix Fees in Doc's Divorce Case
-----------------------------------------------------------------
Law360 reported that the New Jersey Supreme Court on Sept. 10
declined to hear the appeal of a physician who angled to have
$184,000 of legal and accounting fees wiped out, a joint effort
between the physician and his ex-wife after their bitter 10-year
divorce bankrupted his medical practice.
According to the report, New Jersey's high court denied
certification to John Clemente, who lost a bid to abrogate his
obligation to pay over $84,000 in legal fees to Ansell Grimm &
Aaron PC and over $100,000 in accounting fees to Withum Smith &
Brown.
Dr. John Clemente filed for Chapter 11 bankruptcy (Bankr. D. N.J.
Case No. 08-10812) on Jan. 17, 2008. The case was converted to a
Chapter 7 bankruptcy on June 3, 2009, and Barry Frost, Esq. was
appointed as the Chapter 7 Trustee. Milton Bouhoutsos, Jr., Esq.,
in Manasquan, New Jersey, argues for the Debtor. Brian W.
Hofmeister, Esq., at Teich Groh, in Trenton, represents the
Chapter 7 Trustee.
KINGSBURY CORP: Nov. 7 Hearing on Bid to Convert or Dismiss Case
----------------------------------------------------------------
The Bankruptcy Court continued until Nov. 7, 2013, at 1:30 p.m.,
the hearing to consider (i) the adequacy of the Disclosure
Statement explaining the Plan of Liquidation of Kingsbury
Corporation, Donson Group, Ltd., and Ventura Industries, LLC; and
(ii) the U.S. Trustee's motion to dismiss or convert the Debtors'
cases to those under Chapter 7 of the Bankruptcy Code.
As reported in the May 7, 2013 edition of the Troubled Company
Reporter, KMTC, f/k/a Kingsbury Corporation, Donson Group, and
Ventura Industries proposed a liquidating plan, which provides for
the sale of Kingsbury's real estate located at 80 Laurel Street,
Keene, New Hampshire. Secured claims will be paid in full from
the sale proceeds, or holders of secured claims will retain their
liens in the real estate and their allowed secured claims will be
satisfied from the real estate proceeds. General unsecured claims
will be paid in full, while interests will be canceled and holders
of interests will take nothing under the Plan.
A full-text copy of the Disclosure Statement dated April 22, 2013,
is available for free at:
http://bankrupt.com/misc/KINGSBURYCORPds0422.pdf
As reported in the TCR on Aug. 22, 2013, William K. Harrington,
the U.S. Trustee for Region 1, based his request on the inability
of the Debtors to propose a confirmable plan of reorganization.
The U.S. Trustee said: "Kingsbury has ceased operations.
Substantially all of Kingsbury's tangible personal property has
been sold, and its real property has been foreclosed upon. Upon
information and belief, Kingsbury's primary remaining assets
consist of its post-petition causes of action arising from alleged
collusive activity in connection with the sale of Kingsbury's
machinery, equipment and personal property.
"The Debtors do not have sufficient cash on hand to pay
administrative, priority and tax claims in full. Instead, the
Debtors have filed a plan which depends on the successful
prosecution of Kingsbury's post-petition claims for its funding.
Because a plan based on the outcome of litigation is by its very
nature speculative, and because the Debtors have no other source
of income with which to satisfy the confirmation requirements of
11 U.S.C. Sec. 1129(a)(9)(A),(B) and (C), the Debtors cannot
demonstrate the ability to propose a feasible Chapter 11 plan
within a reasonable period of time."
About Kingsbury Corp.
Kingsbury Corp. -- http://www.kingsburycorp.com/-- makes and
assembles machine systems. Kingsbury and affiliate Ventura
Industries, LLC, filed Chapter 11 petition (Bankr. D. N.H. Case
Nos. 11-13671 and 11-13687) on Sept. 30, 2011. Maire B. Corcoran,
Esq., Robert J. Keach, Esq., Jessica A. Lewis, Esq., and Jennifer
Rood, Esq., at Berstein, Shur, Sawyer & Nelson, serve as counsel
to the Debtors. Donnelly Penman & Partners serves as its
investment banker. In its schedules, the Debtor disclosed
$10,134,679 in assets, and $24,534,973 in liabilities as of the
petition date.
The Debtor proposed a liquidating plan, which provides for the
sale of Kingsbury's real estate located at 80 Laurel Street,
Keene, New Hampshire. Secured claims will be paid in full from
the sale proceeds, or holders of secured claims will retain their
liens in the real estate and their allowed secured claims will be
satisfied from the real estate proceeds. General unsecured claims
will be paid in full, while interests will be canceled and holders
of interests will take nothing under the Plan.
William K. Harrington, the U.S. Trustee for Region 1, appointed
five members to serve on the Official Committee of Unsecured
Creditors. Steven C. Reingold, Esq., at Jager Smith P.C.,
represents the Official Committee of Unsecured Creditors as
counsel.
LANDAUER HEALTHCARE: Panel Retains Landis Rath as Counsel
---------------------------------------------------------
The Official Committee of Unsecured Creditors of Landauer
Healthcare Holdings, Inc. asks the U.S. Bankruptcy Court for
permission to retain Landis Rath & Cobb LLP as counsel.
The Panel attests that the firm is a "disinterested person" as the
term is defined in Section 101(14) of the Bankruptcy Code.
About Landauer Healthcare Holdings
Home medical equipment provider Landauer Healthcare Holdings,
Inc., sought Chapter 11 protection (Bankr. D. Del. Lead Case No.
13-12098) on Aug. 16, 2013, with a deal to sell all assets to
Quadrant Management Inc. for $22 million, absent higher and better
offers.
The Company has 32 operating locations, with 50% of inventory
concentrated in Mount Vernon, New York; Great Neck, New York;
Warwick, Rhode Island; and Philadelphia, Pennsylvania. Landauer,
which derives revenues by reimbursement from insurers, Medicare
and Medicaid, reported net revenues of $128.5 million in fiscal
year ended March 31, 2013.
Landauer estimated assets and debt of at least $50 million.
Michael R. Nestor, Esq., Matthew B. Lunn, Esq., and Justin H.
Rucki, Esq., at Young Conaway Stargatt & Taylor, LLP; and John A.
Bicks, Esq., Charles A. Dale III, Esq., and Mackenzie L. Shea,
Esq., at K&L Gates LLP, serve as the Debtor's counsel. Carl Marks
Advisory Group serves as the Debtor's financial advisors, and Epiq
Systems as claims and notice agent.
LANDAUER HEALTHCARE: Slams Creditors' Objections to Sale Process
----------------------------------------------------------------
Law360 reported that bankrupt medical equipment supplier Landauer-
Metropolitan Inc. on Sept. 11 fired back at a creditors committee
objection to the pace of its $22 million stalking horse sale,
contending the cry for a lengthier process pays no heed to the
company's rapid deterioration.
According to the report, Landauer tumbled into Delaware bankruptcy
court Aug. 16 and looks to wrap up a Section 363 sale to Quadrant
Management Inc. by the end of the month, but the official
committee of unsecured creditors objected to that proposal last
week, saying it was overhasty.
About Landauer Healthcare Holdings
Home medical equipment provider Landauer Healthcare Holdings,
Inc., sought Chapter 11 protection (Bankr. D. Del. Lead Case No.
13-12098) on Aug. 16, 2013, with a deal to sell all assets to
Quadrant Management Inc. for $22 million, absent higher and better
offers.
The Company has 32 operating locations, with 50% of inventory
concentrated in Mount Vernon, New York; Great Neck, New York;
Warwick, Rhode Island; and Philadelphia, Pennsylvania. Landauer,
which derives revenues by reimbursement from insurers, Medicare
and Medicaid, reported net revenues of $128.5 million in fiscal
year ended March 31, 2013.
Landauer estimated assets and debt of at least $50 million.
Michael R. Nestor, Esq., Matthew B. Lunn, Esq., and Justin H.
Rucki, Esq., at Young Conaway Stargatt & Taylor, LLP; and John A.
Bicks, Esq., Charles A. Dale III, Esq., and Mackenzie L. Shea,
Esq., at K&L Gates LLP, serve as the Debtor's counsel. Carl Marks
Advisory Group serves as the Debtor's financial advisors, and Epiq
Systems as claims and notice agent.
LEHMAN BROTHERS: Bankruptcy Nears Fifth Anniversary
---------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that next week will be the fifth anniversary of the
bankruptcy filing by Lehman Brothers Holdings Inc. that almost
unraveled the world's financial system. The bankruptcy cost
$2 billion in professional fees so unsecured creditors will have
an 18 percent to 22 percent recovery.
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 (Bankr. S.D.N.Y.
Case No. 08-13555) on Sept. 15, 2008. 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, a second payment of $10.2 billion on Oct. 1, 2012, and
a third distribution of $14.2 billion on April 4, 2013. The
brokerage is yet to make a first distribution to non-customers,
although customers are being paid in full.
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.
LEXARIA CORP: Incurs $58K Net Loss in July 31 Quarter
-----------------------------------------------------
Lexaria Corp. filed its quarterly report on Form 10-Q, reporting a
net loss of US$57,669 on US$251,481 of revenue for the three
months ended July 31, 2013, compared with net income of US$68,122
on US$494,483 of revenue for the three months ended July 31, 2012.
The Company reported a net loss of US$217,283 on US$856,360 of
revenue for the nine months ended July 31, 2013, compared with a
net loss of US$282,918 on US$888,726 of revenue for the nine
months ended July 31, 2012.
The Company's balance sheet at July 31, 2013, showed
US$3.7 million in total assets, US$1.5 million in total
liabilities, and stockholders' equity of US$2.2 million.
"The Company has incurred an operating loss and required
additional funds to maintain its operations. Management's plans
in this regard are to raise equity and/or debt financing as
required.
"These conditions raise substantial doubt about the Company's
ability to continue as a going concern."
A copy of the Form 10-Q is available at http://is.gd/ajSsqU
Lexaria Corp. was formed on Dec. 9, 2004, under the laws of the
State of Nevada and commenced operations on Dec. 9, 2004. The
Company is an independent natural gas and oil company engaged in
the exploration, development and acquisition of oil and gas
properties in the United States and Canada. The Company's entry
into the oil and gas business began on Feb. 3, 2005. The Company
has offices in Vancouver and Kelowna, BC, Canada. Lexaria's
shares are quoted in the USA under the symbol LXRP and in Canada
under the symbol LXX.
LIFE UNIFORM: Taps Brown Smith Wallace as Wind-Down Accountants
---------------------------------------------------------------
Life Uniform Holding Corp., asks the U.S. Bankruptcy Court for
permission to employ Brown Smith Wallace LLC as wind-down tax
accountants.
The firm, among other things, will provide these services:
a. prepare and file all necessary state, federal and tax
returns for 2013;
b. prepare the final 401(k) plan audit after final distribution
from the plan; and
c. supervise and optimize workers compensation funds.
The firm's rates are:
Billing Category Range
---------------- -----
Partner $350-$380
Principal $300
Manager $250
Senior $150-$200
Staff $110-$140
The firm attests that it is a "disinterested person" as the term
is defined in Section 101(14) of the Bankruptcy Code.
About Life Uniform
Life Uniform was founded in 1965 when Angelica Corporation decided
to enter the retail uniform industry. The first Life Uniform
store opened in 1965 in Clayton, Missouri. At present, Life
Uniform is the nation's largest independently owned medical
professional supplier.
Sun Uniform LLC acquired Life Uniform in July 2004. Since the
acquisition by Sun the company addressed sagging profitability and
overhead issues and quickly drove increases in profitability
through a combination of store rationalization and sensible
corporate overhead initiatives. However, recent performance has
been declining in terms of revenue. This is due to the company's
liquidity issues, which prevented the company from completing its
e-commerce system upgrade, encourage better pricing from vendors,
and maintain sufficient capital.
Life Uniform Holding Corp., Healthcare Uniform Company, Inc., and
Uniform City National Inc. filed Chapter 11 petitions (Bankr. D.
Del. Case Nos. 13-11391 to 13-11393) on May 29, 2013. The
petitions were signed by Bryan Graiff, COO, CFO, VP, secretary,
and treasurer. Life Uniform Holding disclosed $10,695,870 in
assets and $36,821,034 in liabilities as of the Chapter 11 filing.
Life Uniform and Uniform City received court authority on July 26
to sell the business for $22.6 million to Scrubs & Beyond LLC.
There were no competing bids, so an auction wasn't held.
First lien lender CapitalSource Finance LLC is owed on a $11.5
million revolver and $26 million term loan. CapitalSource is
represented by Brian T. Rice, Esq., at Brown Rudnick LLP; and
Jeffrey C. Wisler, Esq., at Connolly Gallagher LLP.
Sun Uniforms Finance LLC is owed $6.1 million in principal on a
second lien note and holds two additional notes, each in the
original principal of $1.08 million. Angelica Corp. holds an
unsecured junior subordinate not in the principal amount of $5.48
million.
Domenic E. Pacitti, Esq., at Klehr Harrison Harvey Branzburg, LLP,
serves as the Debtors' counsel. Epiq Bankruptcy Solutions acts as
the Debtors' administrative agent, and claims and noticing agent.
The Debtors' financial advisor is Capstone Advisory Group, LLC.
The Official Committee of Unsecured Creditors is represented by
Seth Van Aalten, Esq., at Cooley LLP, and Ann M. Kashishian, Esq.,
at Cousins Chipman & Brown, LLP as counsel.
The U.S Trustee for Region 3 appointed Boris Segalis of
InfoLawGroup LLP as consumer privacy ombudsman in the case.
LIFE UNIFORM: Hires Crowe Horwath to Prepare Tax Returns
--------------------------------------------------------
Life Uniform Holding Corp. asks the U.S. Bankruptcy Court for
permission to employ Crowe Horwath LLP as tax accountants for the
returns due Aug. 19, 2013.
Timothy V. Luther, a partner at Crowe, attests that the firm is a
"disinterested person" as the term is defined in Section 101(14)
of the Bankruptcy Code.
The firm, among other things, will provide these services:
a. prepare and file all necessary state, federal and tax
returns for 2013;
b. perform all other necessary tax accounting services in
connection with these chapter 11 cases.
The firm's rates are:
Billing Category Range
---------------- -----
Partners, Directors and Counsel $360-$510
Senior Managers and Managers $160-$350
Staff and Senior Staff $100-$150
Paraprofessional $75- $90
About Life Uniform
Life Uniform was founded in 1965 when Angelica Corporation decided
to enter the retail uniform industry. The first Life Uniform
store opened in 1965 in Clayton, Missouri. At present, Life
Uniform is the nation's largest independently owned medical
professional supplier.
Sun Uniform LLC acquired Life Uniform in July 2004. Since the
acquisition by Sun the company addressed sagging profitability and
overhead issues and quickly drove increases in profitability
through a combination of store rationalization and sensible
corporate overhead initiatives. However, recent performance has
been declining in terms of revenue. This is due to the company's
liquidity issues, which prevented the company from completing its
e-commerce system upgrade, encourage better pricing from vendors,
and maintain sufficient capital.
Life Uniform Holding Corp., Healthcare Uniform Company, Inc., and
Uniform City National Inc. filed Chapter 11 petitions (Bankr. D.
Del. Case Nos. 13-11391 to 13-11393) on May 29, 2013. The
petitions were signed by Bryan Graiff, COO, CFO, VP, secretary,
and treasurer. Life Uniform Holding disclosed $10,695,870 in
assets and $36,821,034 in liabilities as of the Chapter 11 filing.
Life Uniform and Uniform City received court authority on July 26
to sell the business for $22.6 million to Scrubs & Beyond LLC.
There were no competing bids, so an auction wasn't held.
First lien lender CapitalSource Finance LLC is owed on a $11.5
million revolver and $26 million term loan. CapitalSource is
represented by Brian T. Rice, Esq., at Brown Rudnick LLP; and
Jeffrey C. Wisler, Esq., at Connolly Gallagher LLP.
Sun Uniforms Finance LLC is owed $6.1 million in principal on a
second lien note and holds two additional notes, each in the
original principal of $1.08 million. Angelica Corp. holds an
unsecured junior subordinate not in the principal amount of $5.48
million.
Domenic E. Pacitti, Esq., at Klehr Harrison Harvey Branzburg, LLP,
serves as the Debtors' counsel. Epiq Bankruptcy Solutions acts as
the Debtors' administrative agent, and claims and noticing agent.
The Debtors' financial advisor is Capstone Advisory Group, LLC.
The Official Committee of Unsecured Creditors is represented by
Seth Van Aalten, Esq., at Cooley LLP, and Ann M. Kashishian, Esq.,
at Cousins Chipman & Brown, LLP as counsel.
The U.S Trustee for Region 3 appointed Boris Segalis of
InfoLawGroup LLP as consumer privacy ombudsman in the case.
LONE PINE: Enters Into Forbearance Agreement with Senior Lenders
----------------------------------------------------------------
Lone Pine Resources Inc. on Sept. 11 disclosed that it has entered
into a forbearance agreement with its senior secured lenders under
the credit agreement dated as of March 18, 2011, by and among Lone
Pine, Lone Pine Resources Canada Ltd., JPMorgan Chase Bank, N.A.,
Toronto Branch as Administrative Agent and the other agents and
Lenders party thereto.
Pursuant to the Forbearance Agreement, the Agent and Lenders, as
well as the counterparties to certain outstanding hedging
agreements with LPR Canada, have agreed to forbear from exercising
any rights or remedies that any of the Agent, the Lenders or the
Hedging Lenders may have, or from initiating or instituting legal
proceedings, against any of LPR Canada, the Company or any of the
other subsidiary guarantors under the Credit Agreement, or from
realizing on their security granted in connection with the Credit
Agreement, until the earlier of September 30, 2013 or the
occurrence of an event of default within the meaning of the
Forbearance Agreement. The Hedging Lenders have further agreed
not to terminate any of their hedging agreements with LPR Canada
during the Forbearance Period.
Any breach by the Loan Parties of any covenant in the Forbearance
Agreement, or the commencement of any bankruptcy, insolvency or
creditor relief proceedings by or with respect to any of the Loan
Parties, will constitute an event of default under the Forbearance
Agreement.
The terms of the Forbearance Period provide that LPR Canada shall
not be entitled to request any new borrowings under the Credit
Agreement, but shall be entitled to access and use all monies
deposited in its bank accounts with the Agent during the
Forbearance Period. As of September 11, 2013, Lone Pine had
approximately $6 million of cash on hand.
The parties to the Forbearance Agreement have further agreed that
the failure of LPR Canada to make any payment on account of any
indebtedness arising under or relating to the outstanding 10.375%
senior notes due 2017 of LPR Canada or the indenture dated
February 14, 2012 among LPR Canada, as issuer, the other Loan
Parties, as guarantors, and U.S. Bank National Association, as
trustee, governing the Senior Notes, will not constitute a default
or event of default under the Credit Agreement.
As previously disclosed, LPR Canada elected not to make the
US$10,115,625 semi-annual interest payment due on August 15, 2013
in respect of the outstanding Senior Notes. Pursuant to the
Indenture, the failure to make such interest payment, if not cured
within 30 days, will result in an event of default under the
Indenture, and thereafter the Trustee or the holders of at least
25% in aggregate principal amount of the Senior Notes will have
the right to declare the Senior Notes immediately due and payable
at their principal amount together with accrued interest; however,
holders of a majority in principal amount of the outstanding
Senior Notes may direct the time, method and place of conducting
any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee.
Accordingly, if LPR Canada has not made the interest payment by
September 16, 2013, an event of default under the Indenture will
occur. There is US$195 million aggregate principal amount of
Senior Notes currently outstanding.
Lone Pine on Sept. 11 disclosed that it has received confirmation
from counsel representing certain holders of the Senior Notes who
in the aggregate hold more than 75% of the principal amount of the
outstanding Senior Notes that such holders have agreed not to
provide any direction to the Trustee, on or before September 30,
2013, to take any steps to enforce any rights of the Trustee or
the holders of Senior Notes occasioned by the failure of LPR
Canada to make the August 15, 2013 interest payment.
Lone Pine remains focused on addressing its liquidity and leverage
issues, and continues to be engaged in discussions with these
holders of the Senior Notes regarding a possible restructuring or
refinancing of the Senior Notes and repayment of the indebtedness
outstanding under the Credit Agreement. The Forbearance Agreement
and Majority Noteholder Confirmation facilitate those efforts by
providing the Company and its stakeholders with additional time,
past expiry of the 30-day cure period provided for under the
Indenture in respect of non-payment of the August 15, 2013
interest payment, during which to continue discussions.
If Lone Pine fails to restructure or refinance its current
outstanding indebtedness within the time parameters available to
it under the Credit Agreement and the Indenture or otherwise, or
if any of its indebtedness is accelerated, Lone Pine will likely
not have adequate liquidity to fund its operations, meet its
obligations (including its debt payment obligations) and continue
as a going concern, and will likely be forced to seek relief under
the Canadian Companies' Creditors Arrangement Act and Chapter 11
or 15 of the U.S. Bankruptcy Code (or an involuntary petition for
bankruptcy relief or similar creditor action may be filed against
it).
Finally, Lone Pine on Sept. 11 disclosed that NYSE Regulation,
Inc. has informed the Company of its determination to commence
proceedings to delist the common stock of the Company from the New
York Stock Exchange. Trading in the Company's common stock on the
NYSE will be suspended prior to the opening on Monday, September
16, 2013. NYSE Regulation reached its decision to delist the
Company's common stock pursuant to Listed Company Manual Section
802.01B, in view of the fact that the Company has fallen below the
NYSE's continued listing standard regarding average global market
capitalization over a consecutive 30 trading-day period of less
than US$15 million, which is a minimum threshold for listing. In
addition, the Company had fallen below the NYSE's continued
listing standard in Section 802.01B of the LCM which requires the
Company to maintain an average global market capitalization over a
consecutive 30 trading-day period of not less than US$75 million
and its business plan materials were currently under review.
Furthermore, the Company had also fallen below the NYSE's
continued listing standard in Section 802.01C of the LCM for an
average closing price of less than $1.00 over a consecutive 30
trading-day period and continued to operate under a cure period.
The Company has no intention to appeal the NYSE Regulation staff's
decision. The Company's common stock will continue to be listed
for trading on the Toronto Stock Exchange after the delisting from
the NYSE, and shareholders in the United States can continue to
trade their shares using the facilities of the TSX. Shareholders
should consult a qualified financial advisor before acting on any
information contained herein.
As previously disclosed, continued listing of Lone Pine's common
stock on the TSX is subject to compliance with the applicable
requirements of the TSX Company Manual. Under section 708 of the
TSX Company Manual, if Lone Pine files for relief under the CCAA
and Chapter 11 or 15 of the U.S. Bankruptcy Code or any other
creditor arrangement, bankruptcy or similar proceedings are
instituted, the TSX may in its discretion immediately halt trading
on the TSX of, and thereafter delist, Lone Pine's common stock.
In addition and in accordance with section 710 of the TSX Company
Manual, the TSX may delist Lone Pine's common stock if, in the
opinion of the TSX, Lone Pine's financial condition is such that
its ability to continue as a going concern is questionable. The
TSX retains broad discretion to halt trading in and delist Lone
Pine's common stock in these and other circumstances.
MERCANTILE BANCORP: Securities Holders Object to Bank & Logo Sale
-----------------------------------------------------------------
The Official Committee of Trust Preferred Securities Holders and
Wilmington Trust Company, solely in its capacities as Indenture
Trustee, Institutional or Property Trustee, Delaware Trustee, and
Guarantee Trustee with respect to four series of TruPS Trusts,
object to Mercantile Bancorp, Inc.'s proposed sale of Mercantile
Bank and the trademark for the bank's "M" logo.
The Committee states, "With all the facts pointing toward the sale
being unable to close, there is no sound business justification to
continue pursuing this transaction and wasting additional estate
resources merely on unsupported speculation that the [Federal
Deposit Insurance Corporation] will suddenly become cooperative.
Moreover, unsupported speculation cannot serve as an evidentiary
basis for the Court to make the required express finding that the
sale is a sound exercise of the Debtor's business judgment.
Therefore, the Court should refuse to approve the Debtor's sale
motion; even if the Court wanted to, it could not based on this
record." Wilmington Trust joins in the Committee's sale
objection.
The Committee is represented by Domenic E. Pacitti, Esq. --
dpacitti@klehr.com -- at KLEHR HARRISON HARVEY BRANZBURG LLP, in
Wilmington, Delaware; Morton R. Branzburg, Esq. --
mbranzburg@klehr.com -- at KLEHR HARRISON HARVEY BRANZBURG LLP, in
Philadelphia, Pennsylvania; and David R. Seligman, P.C., Esq. --
david.seligman@kirkland.com -- and Jeffrey W. Gettleman, Esq. --
jeffrey.gettleman@kirkland.com -- at KIRKLAND & ELLIS LLP, in
Chicago, Illinois; and Joseph Serino Jr., P.C., Esq. --
joseph.serino@kirkland.com -- and John P. Del Monaco, Esq. --
john.delmonaco@kirkland.com -- at KIRKLAND & ELLIS LLP, in New
York.
Wilmington Trust is represented by Christopher A. Ward, Esq. --
cward@polsinelli.com -- and Shanti M. Katona, Esq. --
skatona@polsinelli.com -- at POLSINELLI PC, in Wilmington,
Delaware; and Jeffrey N. Rothleder, Esq. --
jeffrey.rothleder@arentfox.com -- at ARENT FOX LLP, in Washington,
DC; and Ronni N. Arnold, Esq. -- ronni.arnold@arentfox.com -- at
ARENT FOX LLP, in New York.
About Mercantile Bancorp
Mercantile Bancorp -- http://www.mercbanx.com/-- is a Quincy,
Illinois-based bank holding company with wholly owned subsidiaries
consisting of one bank in Illinois and one each in Kansas and
Florida, where the Company conducts full-service commercial and
consumer banking business, engages in mortgage banking, trust
services and asset management, and provides other financial
services and products. The Company also operated Mercantile Bank
branch offices in Missouri and Indiana.
On Aug. 10, 2011, the Illinois Division of Banking released a
Consent Order that Mercantile Bank, the Federal Deposit Insurance
Corporation, and the Division entered into as of July 28, 2011.
Under the Order, Mercantile Bank will cease operating with all
money transmitters and currency businesses providing brokerage,
sale or exchange of non-United States currency for deposit
customers. Furthermore, Mercantile Bank may not enter into a new
line of business without the prior written consent of the FDIC and
the Division.
Mercantile Bancorp filed a Chapter 11 petition (Bankr. D. Del.
Case No. 13-11634) on June 27, 2013. The petition shows assets
and debt both exceeding $50 million. Liabilities include $61.9
million owing on junior subordinated debentures. Mercantile
stopped paying interest on the debentures in 2009, since then
running up $14 million in unpaid interest.
Stuart M. Brown, Esq. at DLA Piper LLP (US), in Wilmington,
Delaware; and Richard A. Chesley, Esq., Kimberly D. Newmarch,
Esq., and Aaron M. Paushter, Esq., at DLA Piper LLP (US), in
Chicago, Illinois, are the attorneys for the Debtor.
A three-member official committee of unsecured creditors was
appointed by the U.S. Trustee.
An official committee of trust preferred securities holders was
also appointed by the U.S. Trustee. The Committee is represented
by Domenic E. Pacitti, Esq., at KLEHR HARRISON HARVEY BRANZBURG
LLP, in Wilmington, Delaware; Morton R. Branzburg, Esq., at KLEHR
HARRISON HARVEY BRANZBURG LLP, in Philadelphia, Pennsylvania;
David R. Seligman, P.C., Esq., and Jeffrey W. Gettleman, Esq., at
KIRKLAND & ELLIS LLP, in Chicago, Illinois; and Joseph Serino Jr.,
P.C., Esq., and John P. Del Monaco, Esq., at KIRKLAND & ELLIS LLP,
in New York.
MERCANTILE BANCORP: Securities Holders Committee Hires PrinceRidge
------------------------------------------------------------------
The Official Committee of Trust Preferred Securities Holders in
the Chapter 11 case of Mercantile Bancorp, Inc., seeks authority
from the U.S. Bankruptcy Court for the District of Delaware to
retain C&Co./PrinceRidge LLC as its investment banker and
financial advisor.
PrinceRidge will, among other things, identify and evaluate
additional potential purchasers of the Bank in PrinceRidge's areas
of expertise and contact and negotiate with the parties.
The engagement letter with PrinceRidge provides that the firm will
be paid a cash advisory fee of $60,000 for the period beginning
July 19, 2013, and ending Aug. 31, 2013, and $24,000 for each
month thereafter; an incentive fee in the event of a consummation
of a sale under Section 363 of the Bankruptcy Code or any
transaction other than a 363 Sale; and a fee equal to the product
of a percentage to be agreed to by the firm and Griffin Financial
Group, LLC, which will also be retained by the Committee.
PrinceRidge will also be reimbursed for any necessary out-of-
pocket expenses. The Engagement Letter provides that the firm's
aggregate fees will not exceed $800,000.
Joseph H. McCann III, a Vice Chairman of PrinceRidge, assures the
Court that his firm is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code and does not
represent any interest adverse to the Committee's.
About Mercantile Bancorp
Mercantile Bancorp -- http://www.mercbanx.com/-- is a Quincy,
Illinois-based bank holding company with wholly owned subsidiaries
consisting of one bank in Illinois and one each in Kansas and
Florida, where the Company conducts full-service commercial and
consumer banking business, engages in mortgage banking, trust
services and asset management, and provides other financial
services and products. The Company also operated Mercantile Bank
branch offices in Missouri and Indiana.
On Aug. 10, 2011, the Illinois Division of Banking released a
Consent Order that Mercantile Bank, the Federal Deposit Insurance
Corporation, and the Division entered into as of July 28, 2011.
Under the Order, Mercantile Bank will cease operating with all
money transmitters and currency businesses providing brokerage,
sale or exchange of non-United States currency for deposit
customers. Furthermore, Mercantile Bank may not enter into a new
line of business without the prior written consent of the FDIC and
the Division.
Mercantile Bancorp filed a Chapter 11 petition (Bankr. D. Del.
Case No. 13-11634) on June 27, 2013. The petition shows assets
and debt both exceeding $50 million. Liabilities include $61.9
million owing on junior subordinated debentures. Mercantile
stopped paying interest on the debentures in 2009, since then
running up $14 million in unpaid interest.
Stuart M. Brown, Esq. at DLA Piper LLP (US), in Wilmington,
Delaware; and Richard A. Chesley, Esq., Kimberly D. Newmarch,
Esq., and Aaron M. Paushter, Esq., at DLA Piper LLP (US), in
Chicago, Illinois, are the attorneys for the Debtor.
A three-member official committee of unsecured creditors was
appointed by the U.S. Trustee.
An official committee of trust preferred securities holders was
also appointed by the U.S. Trustee. The Committee is represented
by Domenic E. Pacitti, Esq., at KLEHR HARRISON HARVEY BRANZBURG
LLP, in Wilmington, Delaware; Morton R. Branzburg, Esq., at KLEHR
HARRISON HARVEY BRANZBURG LLP, in Philadelphia, Pennsylvania;
David R. Seligman, P.C., Esq., and Jeffrey W. Gettleman, Esq., at
KIRKLAND & ELLIS LLP, in Chicago, Illinois; and Joseph Serino Jr.,
P.C., Esq., and John P. Del Monaco, Esq., at KIRKLAND & ELLIS LLP,
in New York.
MERCANTILE BANCORP: Securities Holders Tap Griffin as Advisor
-------------------------------------------------------------
The Official Committee of Trust Preferred Securities Holders in
the Chapter 11 case of Mercantile Bancorp, Inc., seeks authority
from the U.S. Bankruptcy Court for the District of Delaware to
retain Griffin Financial Group, LLC, as its investment banker and
financial advisor.
Griffin will, among other things, evaluate the assets and
liabilities of the Debtor and its subsidiary Mercantile Bank and
review and analyze the financial condition, operating results,
liquidity and capital structure of the Debtor and the Bank,
including capital adequacy and asset quality.
Griffin will be paid a cash advisory fee of $90,000 for the period
beginning July 19, 2013, and ending Aug. 31, 2013, and $36,000 for
each month thereafter. The firm will also be paid an incentive
fee in the event of the consummation of a sale under Section 363
of the Bankruptcy Code or any other transaction other than a 363
Sale. The firm will further be paid a fee equal to the product of
a percentage to be agreed to by the firm and C&Co/PrinceRidge LLC,
which the Committee also seeks to retain.
The firm will be reimbursed for any necessary out-of-pocket
expenses. The Engagement Letter provides that the firm's
aggregate fees will not exceed $1,200,000.
Joseph M. Harenza, the chief executive officer and senior managing
director of Griffin, assures the Court that his firm is a
"disinterested person" as the term is defined in Section 101(14)
of the Bankruptcy Code and does not represent any interest adverse
to the Committee's.
About Mercantile Bancorp
Mercantile Bancorp -- http://www.mercbanx.com/-- is a Quincy,
Illinois-based bank holding company with wholly owned subsidiaries
consisting of one bank in Illinois and one each in Kansas and
Florida, where the Company conducts full-service commercial and
consumer banking business, engages in mortgage banking, trust
services and asset management, and provides other financial
services and products. The Company also operated Mercantile Bank
branch offices in Missouri and Indiana.
On Aug. 10, 2011, the Illinois Division of Banking released a
Consent Order that Mercantile Bank, the Federal Deposit Insurance
Corporation, and the Division entered into as of July 28, 2011.
Under the Order, Mercantile Bank will cease operating with all
money transmitters and currency businesses providing brokerage,
sale or exchange of non-United States currency for deposit
customers. Furthermore, Mercantile Bank may not enter into a new
line of business without the prior written consent of the FDIC and
the Division.
Mercantile Bancorp filed a Chapter 11 petition (Bankr. D. Del.
Case No. 13-11634) on June 27, 2013. The petition shows assets
and debt both exceeding $50 million. Liabilities include $61.9
million owing on junior subordinated debentures. Mercantile
stopped paying interest on the debentures in 2009, since then
running up $14 million in unpaid interest.
Stuart M. Brown, Esq. at DLA Piper LLP (US), in Wilmington,
Delaware; and Richard A. Chesley, Esq., Kimberly D. Newmarch,
Esq., and Aaron M. Paushter, Esq., at DLA Piper LLP (US), in
Chicago, Illinois, are the attorneys for the Debtor.
A three-member official committee of unsecured creditors was
appointed by the U.S. Trustee.
An official committee of trust preferred securities holders was
also appointed by the U.S. Trustee. The Committee is represented
by Domenic E. Pacitti, Esq., at KLEHR HARRISON HARVEY BRANZBURG
LLP, in Wilmington, Delaware; Morton R. Branzburg, Esq., at KLEHR
HARRISON HARVEY BRANZBURG LLP, in Philadelphia, Pennsylvania;
David R. Seligman, P.C., Esq., and Jeffrey W. Gettleman, Esq., at
KIRKLAND & ELLIS LLP, in Chicago, Illinois; and Joseph Serino Jr.,
P.C., Esq., and John P. Del Monaco, Esq., at KIRKLAND & ELLIS LLP,
in New York.
METROPOLITAN NAT'L: Bankruptcy Court OKs Stock Purchase Agreement
-----------------------------------------------------------------
Simmons First National Corporation on Sept. 12 disclosed that the
U.S. Bankruptcy Court approved a Stock Purchase Agreement between
SFNC and Rogers Bancshares, Inc. for the stock of Metropolitan
National Bank. SFNC will purchase all of the issued and
outstanding shares of common stock free and clear of all liens,
claims and encumbrances, and assumes no liabilities of RBI. Under
the terms of the agreement, RBI will receive $53.6 million in
cash. The transaction is expected to close during the fourth
quarter of 2013 and is subject to customary regulatory approval.
"Simmons First has had a long, positive history with the Rogers
family and Metropolitan National Bank," said George A. Makris, Jr,
Simmons First CEO-Elect. "We believe the acquisition fits nicely
into our footprint and will enable us to better meet our combined
customers' needs in Central and Northwest Arkansas."
MNB, a national bank headquartered in Little Rock, Arkansas, with
branches in 14 other communities in the state, has a rich history
of providing exemplary customer service to the communities in
which it is located. SFNC will combine the operations of MNB with
Simmons First National Bank and expects to continue to provide the
highest quality customer service throughout the combined service
area.
MNB Highlights:
-- Assets of $991 million
-- Loans of $484 million
-- Deposits of $862 million
* Over 90,000 customer accounts
* Noninterest bearing deposit accounts of 17% of total deposits
-- Trust assets under management of $370 million
-- Total equity of $62 million, with a Tier 1 leverage ratio of
6.46%
SFNC was advised by Sterne Agee & Leach, Inc. and the law firm of
Quattlebaum, Grooms, Tull & Burrow, PLLC. RBI was advised by
Keefe, Bruyette & Woods and the law firms of Fenimore, Kay,
Harrison & Ford, Bracewell & Giuliani, and Williams & Anderson.
Simmons First National Corporation is a $3.6 billion Arkansas
based financial holding company with eight community banks in Pine
Bluff, Lake Village, Jonesboro, Rogers, Searcy, Russellville, El
Dorado and Hot Springs, Arkansas. The Company's eight banks
conduct financial operations from 91 offices, of which 87 are
financial centers, in 54 communities, in Arkansas, Kansas and
Missouri. The Company's common stock trades on the NASDAQ Global
Select Market under the symbol "SFNC".
Arkansas owned and operated, Metropolitan National Bank --
http://www.metbank.com-- offers an extensive line of consumer and
commercial products, while maintaining the quality personal
service it's known for across the area. Metropolitan serves its
customers from 48 branches and 56 ATMs throughout Little Rock,
North Little Rock, Benton, Bentonville, Bryant, Cabot, Conway,
Fayetteville, Jacksonville, Johnson, Maumelle, Rogers, Sheridan,
Sherwood and Springdale.
As reported by the Troubled Company Reporter on July 10, 2013,
BankruptcyLaw360 disclosed that the holding company for Arkansas-
based Metropolitan National Bank entered Chapter 11 bankruptcy
following years of mortgage-related losses and announced a $16
million recapitalization offer from a Texas-based private equity
firm. According to the report, Rogers Bancshares Inc. filed its
petition in the U.S. Bankruptcy Court for the Eastern District of
Arkansas, blaming the 2008 economic and housing crisis for its
lingering financial problems, which include more than $100 million
in nonperforming mortgage loans. The company has about $92.5
million in debt.
MOSS FAMILY: Plan Provides Full Payment to Unsecured Creditors
--------------------------------------------------------------
Moss Family Limited Partnership and Beachwalk, L.P. submitted to
the U.S. Bankruptcy Court for the Northern District of Indiana a
Disclosure Statement explaining the Joint Plan of Reorganization
dated Sept. 5, 2013.
According to the Disclosure Statement, the Debtors intend to treat
creditors' claims, among other things:
1. The allowed claim of Fifth Third ($1,726,698) will be
satisfied from the sale of any or all parcels of the
marketed real estate via auction.
2. The allowed claim of Horizon ($1,122,743) will be
satisfied by surrendering the real estate to Horizon by
way of deeds in lieu; and the Debtors will retain the real
estate with the remaining debt.
3. Unsecured claims will be fully paid and satisfied by use
of the proceeds from the sale of LaPorte Judgment Lien
Property. From the sale of every LaPorte Judgment Lien
property, 20% of the net proceeds will be paid into an
escrow account to be held and disbursed to unsecured
creditors annually on a pro rata basis of unsecured claims
until the time as the claims are paid in full, without
interest.
The prepetition interest in the Debtors will be retained by the
holders of the same subject to the provisions of the Plan. Each
interest holder of both Debtors will receive 1/2 of the percentage
they held in the prepetition Debtors in the reorganized
consolidated Debtor.
The Plan will be executed by the substantive consolidation of the
Debtors' assets and liabilities.
A copy of the Disclosure Statement is available for free at
http://bankrupt.com/misc/MOSS_FAMILY_ds.pdf
About Moss Family
Moss Family Limited Partnership and Beachwalk, L.P., filed
Chapter 11 petitions (Bankr. N.D. Ind. Case Nos. 12-32540 and 12-
32541) on July 17, 2012. Judge Harry C. Dees, Jr., presides over
the case. Daniel Freeland, Esq., at Daniel L. Freeland &
Associates, P.C., represents the Debtors. Moss Family disclosed
$6,609,576 in assets and $6,299,851 in liabilities as of the
Chapter 11 filing.
MSD PERFORMANCE: To Operate With Lenders' Cash
----------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that MSD Performance Inc., a designer and producer of
ignition systems and data-acquisition devices for race cars, filed
a petition for Chapter 11 protection on Sept. 6 and this week got
interim court approval to use cash representing collateral for
secured lenders' claims. There will be another hearing on Oct. 1
for final authorization to operate the business using the lenders'
cash collateral. The agreement for use of cash was worked out
before bankruptcy.
About MSD Performance
MSD Performance, Inc., headquartered in El Paso, Texas, operates
in the power sports enthusiast and professional racer markets
where the company maintains leading market share positions across
all of its product categories under the MSD Ignition(R),
Racepak(R) and Powerteq(R) brands. The company's facilities
encompass over 220,000 square feet in six buildings, five of which
are located across the U.S. and one in Shanghai, China.
MSD Performance and its U.S. affiliates sought Chapter 11
protection (Bankr. D. Del. Lead Case No. 13-12286) on Sept. 6,
2013, to facilitate a sale of the assets.
MSDP's restructuring counsel is Jones Day. Its investment banker
is SSG Advisors, LLC. MSDP is also represented by Richards Layton
and Finger, as local counsel. Logan & Co. is the claims and
notice agent.
MTR GAMING: Moody's Lifts CFR to B3 on News of Eldorado Merger
--------------------------------------------------------------
Moody's Investors Service upgraded MTR Gaming Group, Inc.'s
ratings, including its Corporate Family Rating to B3 from Caa1,
Probability of Default Rating to B3-PD from Caa1-PD and senior
secured second lien note rating to B3 from Caa1. MTR's SGL-3
Speculative Grade Liquidity Rating, which indicates adequate
liquidity, remains unchanged. The rating outlook is stable.
Ratings upgraded:
Corporate Family Rating, to B3 from Caa1
Probability of Default Rating, to B3-PD from Caa1-PD
$571 million second lien notes due 2019, to B3 (LGD 4, 51%)
from Caa1 (LGD 4, 51%)
Rating Rationale:
The upgrade of MTR's Corporate Family Rating to B3 from Caa1
reflects the strong first year performance of the company's Scioto
Downs racino which has enabled MTR to reduce leverage, despite
EBITDA declines at the company's other two properties --
Mountaineer in WV and Presque Isle in PA. Scioto Downs is located
in Columbus, OH and opened its first phase in June 2012. For the
latest 12-month period ending June 30, 2013, Scioto Downs
generated property-level adjusted EBITDA of about $52 million,
compared to $36 million for Mountaineer and $28 million. Scioto
Downs' first full year adjusted EBITDA facilitated improvement in
MTR's consolidated debt/EBITDA to 5.5 times for the latest 12-
month period ended June 30, 2013, compared to 6.0 times for the
fiscal year-ended December 31, 2012, and well within the 6.0 times
debt/EBITDA trigger required for the upgrade.
The upgrade to a B3 Corporate Family Rating also incorporates
MTR's recent announcement that it signed a definitive agreement to
merge with Eldorado Resorts, LLC (B2 stable) via a stock merger
valued at $5.15 per share; although this announcement was not the
reason for MTR's upgrade.
A cash election option will be offered to MTR's shareholders at
$5.15 per share for up to 5.8 million shares or $30 million; MTR's
remaining shares will be exchanged for shares in the combined new
company, to be named Eldorado Resorts Inc. Based on June 30, 2013,
the resulting pro forma equity ownership of the new entity would
be approximately 45% for MTR stockholders.
MTR's 11.5% second lien notes due 2019 are subject to a change of
control provision, however, Eldorado announced on a recent call
that these notes will likely remain in the merged entity's capital
structure. As a result, the B3 rating on these notes could change
in the pro forma capital structure. However, any change to the
rating on these notes is subject to completion of the merger and
the final form of the combined entity's debt capital structure. If
the transaction is consummated as planned, Moody's expects it
would withdraw all of MTR's ratings with the exception of the
company's 11.5% second lien notes due 2019, which would be assumed
by the newly created entity.
Other rating considerations include the risks associated with
MTR's relatively thin EBIT coverage of interest, at slightly above
1.0 times along with additional competition that is expected to
open over the next 12 months in Ohio. Northfield Park (B2 stable)
in Cleveland is scheduled to open in December 2013 and Penn
National Inc.'s (Ba1 stable) racino near Youngstown is scheduled
to open in third quarter of 2014.
The stable rating outlook reflects MTR's large cash balance (about
$96 million), undrawn $20 million revolver, positive free cash
flow profile, and lack of material scheduled long-term debt
maturities until 2019. Combined, Moody's expects these factors
will provide MTR with the flexibility to deal with existing and
additional competition at its current rating level.
On a standalone basis, a higher rating for MTR is not likely in
the near term given the additional competition that will be
opening relatively soon in the company's primary feeder markets.
While Moody's believes MTR has the financial flexibility to deal
with this competition at the current rating level, a higher
standalone rating would require some demonstrated assurance that
the additional competition in Ohio will not materially impact
MTR's operating results, along with stronger and sustainable
credit metrics -- debt/EBITDA below 5.0 times and EBIT/interest of
at least 1.5 times. MTR's ratings could face downward pressure if
debt/EBITDA rises to 6.0 times or EBIT/interest drops below 1.0
time for any reason.
The principal methodology used in this rating was the Global
Gaming 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.
MTR (Nasdaq: MNTG), through its subsidiaries, owns and operates
Mountaineer Casino, Racetrack & Resort in Chester, West Virginia;
Presque Isle Downs & Casino in Erie, Pennsylvania and Scioto Downs
in Columbus, Ohio. MTR generates annual net revenues of
approximately $520 million.
NATIONAL ENVELOPE: Wins Approval to Sell Assets for $70 Million
---------------------------------------------------------------
Michael Bathon, writing for Bloomberg News, reported that NE Opco
Inc., the largest closely held envelope maker in North America,
won court approval to sell virtually all its assets to three
separate buyers for a total of about $70 million.
According to the report, U.S. Bankruptcy Judge Christopher Sontchi
on Sept. 12 granted the company, which does business as National
Envelope, permission to sell its envelope business to Cenveo Inc.
for about $33 million.
Cenveo, based in Stamford, Connecticut, will pay $25 million in
cash and $5 million in stock, Perry Mandarino, NE Opco's financial
adviser with PricewaterhouseCoopers LLP, testified at a hearing in
Wilmington, Delaware, the report related. Cenveo also will take
over a portion of the bankruptcy financing.
"Cenveo was the only game in town other than liquidation,"
Mandarino said, the report further related. The purchase will
save more than 1,500 jobs, or about 95 percent of NE Opco's total,
he said.
Hilco Receivables will buy NE Opco's accounts receivables for
about $22 million and Southern Paper LLC will acquire inventory
for about $15 million, according to court documents and
Mandarino's testimony, the report said.
Bill Rochelle, the bankruptcy columnist for Bloomberg News, notes
that in National Envelope's first bankruptcy, Cenveo was outbid by
Gores Group LLC, which put National Envelope back into Chapter 11
in June.
Mr. Rochelle also reports that Southern Paper LLC will buy the
inventory for about $15 million, or 75 percent of book value.
Mr. Rochelle also notes that the aggregate purchase price pays
less than half of the $148.4 million in secured debt. There was
no auction because the bankruptcy court approved a settlement with
Salus Capital Partners LLC creating a trust for unsecured
creditors initially funded with $250,000 over 10 weeks.
About National Envelope
National Envelope is the largest privately-held 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.
The Official Committee of Unsecured Creditors is represented by
Pachulski Stang Ziehl & Jones LLP's Laura Davis Jones, Esq.,
Bradford J. Sandier, Esq., Robert J. Feinstein, Esq., and Peter J.
Keane, Esq. Guggenheim Securities, LLC, serves as its investment
banker and financial advisor.
As reported in the TCR on July 25, National Envelope won court
approval on July 19 for a global settlement permitting a sale of
the company without objection from the official unsecured
creditors' committee. The settlement ensures some recovery for
unsecured creditors.
The Company also won final approval for $67.5 million in
bankruptcy financing being supplied by Salus Capital Partners LLC.
The settlement will create a trust for unsecured creditors funded
with $250,000 over 10 weeks. If a sale pays off the $67.5 million
of bankruptcy financing, the creditors' trust will receive another
$500,000. From the first $4 million surplus after repaying
bankruptcy financing, secured lenders will receive 75 percent,
with the other 25 percent for unsecured creditors. Secured
lenders will give 3 percent of additional sale proceeds to
unsecured creditors, all in return for the committee's agreement
to withhold objection to a sale. The settlement creates a
separate $790,000 fund to be used in winding down the Chapter 11
case.
As reported in the TCR on August 26, NE Opco Inc., which does
business as National Envelope, struck a $65 million sales trifecta
as the bankrupt envelope maker announced a series of deals to
parcel out its assets among three separate buyers. The proposed
transactions would see Connecticut-based printer Cenveo Inc.
acquire National Envelope's operating assets for $25 million,
Hilco Receivables LLC pick up accounts receivable for $25 million
and Southern Paper LLC take on its inventory for $15 million,
according to a sale motion filed in Delaware bankruptcy court.
NATIONAL ENVELOPE: Bankruptcy Court OKs Sale of Assets to Cenveo
----------------------------------------------------------------
Cenveo, Inc. disclosed that the US Bankruptcy Court for the
District of Delaware approved the sale of National Envelope's
assets on Sept. 11. In conjunction with Hilco Receivables
(acquiring substantially all the accounts receivable) and Southern
Paper (purchasing the inventory), Cenveo will acquire
substantially all of the assets of National Envelope. The parties
expect the sale to formally close on Monday, September 16, 2013.
About Cenveo
Headquartered in Stamford, Connecticut, Cenveo --
http://www.cenveo.com-- is a global provider of print and related
resources, offering world-class solutions in the areas of custom
labels, specialty packaging, envelopes, commercial print, content
management and publisher solutions. The company provides a one-
stop offering through services ranging from design and content
management to fulfillment and distribution.
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.
NEIMAN MARCUS: Fitch Puts 'B' IDR on Rating Watch Negative
----------------------------------------------------------
Fitch Ratings has placed Neiman Marcus, Inc.'s and The Neiman
Marcus Group, Inc.'s (together, Neiman) ratings on Rating Watch
Negative. This action reflects Fitch's expectation for higher
leverage following the announcement of a definitive agreement by
Ares Management LLC and Canada Pension Plan Investment Board (new
sponsors) to acquire Neiman for a purchase price of $6 billion.
The transaction value equates to 9.5x Neiman's LTM EBITDA of $630
million as of April 27, 2013. The current sponsors, Texas Pacific
Group and Warburg Pincus, had purchased Neiman in October 2005 for
$5.1 billion (or 9.7x fiscal 2005 EBITDA of $528 million).
The transaction is expected to close in the fourth quarter of
2013, subject to regulatory approvals and other customary closing
conditions. A portion of the purchase price will be used at the
closing to repay all amounts outstanding under Neiman's existing
credit facilities ($2.6 billion other than its $125 million of
7.125% senior debentures, which do not have change of control
provision).
No detail has been provided on the financing of the transaction.
Assuming 20%-30% of equity contribution, the total transaction
value (including transaction fees) could be financed with $1.2
billion-$1.85 billion of new sponsors' equity and $4.3 billion-$5
billion of debt. This compares to $2.7 billion of debt outstanding
currently. Therefore, pro forma adjusted debt/LTM EBITDAR is
expected to be in the 7.0x-8.0x range, versus 4.8x currently.
Key Rating Drivers
Neiman's current Issuer Default rating (IDR) of 'B' reflects the
company's continued improvement in EBITDA on strong mid-to-high
single-digit top-line growth over the past three years, given the
overall recovery in luxury spending. LTM EBITDA as of April 27,
2013 increased to approximately $630 million on low double-digit
margins from a low of $280 million in 2009. EBITDA is still 10%
below the peak level of $700 million attained in calendar 2007,
while overall sales have returned close to the pre-recession run
rate of $4.6 billion.
Fitch expects that Neiman will continue to improve EBITDA in the
low- to mid-single digits in the next 12-24 months, in line with
the growth in comps and assuming relatively flat margins. This
could help improve leverage ratio by 0.5x-0.7x to the low-6x to
low-7x range, depending on the post-transaction capital structure.
However, the impact of higher payroll taxes on domestic luxury
spending, as well as a slowdown in international tourist traffic
are potential risk factors that could dampen top-line and EBITDA
growth.
With pro forma annual interest expense of $230 million-$270
million (assuming an average cost of financing of 5.5%) and capex
of $170 million-$180 million, Fitch expects Neiman to generate
annual free cash flow (FCF) in the $100 million-$150 million range
over the next three years.
Rating Sensitivities
A positive rating action from the current 'B' rating is unlikely
at this time given the expected increase in the pro forma leverage
at the close of the transaction. Over the longer term, a positive
rating action could result if Neiman's strong operating trends
remain on track and leverage improves to the low 5.0x range.
Post transaction, pro forma leverage is expected to be in the
7.0x-8.0x range. A negative rating action could result if, based
on Fitch's projections for top line, EBITDA and FCF at closing,
leverage is expected to remain above the mid-6.0x range over the
next 18-24 months.
Fitch has placed the following ratings for Neiman on Rating Watch
Negative:
Neiman Marcus, Inc.
-- Long-term IDR 'B'.
The Neiman Marcus Group, Inc.
-- Long-term IDR 'B'.
-- Secured revolving credit facility 'BB/RR1';
-- Secured term loan facility 'B/RR4';
-- Secured debentures 'B/RR4'.
NEONODE INC: Wellington Held 7.6% Equity Stake at Aug. 31
---------------------------------------------------------
In an amended Schedule 13G filing with the U.S. Securities and
Exchange Commission, Wellington Management Company, LLP, disclosed
that as of Aug. 31, 2013, it beneficially owned 2,653,000 shares
of common stock of Neonode, Inc., representing 7.66 percent of the
shares outstanding. Wellington previously reported beneficial
ownership of 4,714,251 common shares or 14 percent equity stake at
March 31, 2013. A copy of the regulatory filing is available for
free at http://is.gd/zwbVnM
About Neonode Inc.
Lafayette, Calif.-based Neonode Inc. (OTC BB: NEON)
-- http://www.neonode.com/-- provides optical touch screen
solutions for hand-held and small to midsize devices.
The Company incurred a net loss of $9.28 million in 2012, a net
loss of $17.14 million in 2011 and a $31.62 million net loss in
2010. As of June 30, 2013, the Company had $7.31 million in total
assets, $4.14 million in total liabilities and $3.16 million in
total stockholders' equity.
NESBITT PORTLAND: U.S. Trustee Balks at Plan Confirmation
---------------------------------------------------------
Peter C. Anderson, the U.S. Trustee, by and through Jennifer L.
Braun, Esq., asks the Bankruptcy Court to deny confirmation of the
First Amended Consensual Joint Plan of Reorganization proposed by
Nesbitt Portland Property LLC, et al., and their secured lender
U.S. Bank, N.A., unless certain provisions are removed.
According to the Trustee, the Debtor's Plan, among other things:
1. provides for a de facto discharge of the Debtors in
violation of Section 1141(d)(3) of the Bankruptcy Code; and
2. provides a discharge for non-Debtor entities in violation
of Section 524(a) and does not comply with Sections 1123
(b)(6) and 1129(a)(1) of the Bankruptcy Code.
Additionally, the U.S. Trustee said, the protective clauses in the
proposed Plan cannot be confirmed absent identification of the
civil proceedings or group of civil proceedings over which the
Bankruptcy Court is being called upon to exercise "related to"
jurisdiction.
The U.S. Trustee asserts that the Debtors and the secured lender
have failed to justify the confirmation of the Plan with the
protective clauses providing for releases, an injunction and
exculpation for third parties.
As reported in the Troubled Company Reporter on Sept. 11, 2013,
Hilton Worldwide Inc. objected to the reorganization plan that
calls for selling off seven Embassy Suites-branded hotels, saying
the plan runs afoul of its licensing agreements with the
operators. Two affiliates of Hilton, HLT Existing Franchise
Holding LLC and Embassy Suites Franchise LLC, argue there is no
legal basis for the court to require Hilton to alter the terms of
its licensing agreements with the debtors, which are eight
companies owned by Nesbitt Portland Property, LLC.
The Plan
As reported in the Troubled Company Reporter on July 31, 2013, the
Debtors and secured lender filed a First Amended Disclosure
Statement for the Consensual Plan of Reorganization.
The hearing to consider the confirmation of the Consensual Joint
Plan will be held on Sept. 27, 2013, at 9:00 a.m. Ballots and
objections must be received by Sept. 6, 2013.
The Plan calls for selling off seven Embassy Suites-branded hotels
and an eighth Texas hotel to new franchisors. The hotels will be
put up for auction in an attempt to cover at least $193 million in
outstanding lender claims -- including a defaulted $187.5 million
loan plus interest.
After extensive negotiations, the Debtors, secured lender U.S.
Bank N.A., Windsor Capital Management, Inc., guarantor Nesbitt
Family Trust 3, LLC and Patrick Nesbitt, Sr., executed a Plan
Support Agreement in May 2013. The Plan Support Agreement
provides for a comprehensive settlement of the disputes between
the parties and for a consensual Plan of which the Debtors and the
Secured Lender will be co-proponents.
With the exception of the secured lender claim, allowed insider
claims, and allowed intercompany claims, the Plan provides for the
payment in full of all allowed claims against the Debtors.
Holders of allowed insider claims, allowed intercompany claims,
and allowed interests will receive nothing under Plan.
U.S. Bank on account of its secured claim will receive, among
other things, cash from the proceeds of a hotel sale.
Holders of general unsecured claims will receive cash in an amount
equal to the amount of their allowed claims without interest on
the Effective Date.
A copy of the First Amended Disclosure Statement is available at:
http://bankrupt.com/misc/nesbitt.doc398.pdf
The Joint Plan is an aggregation of eight separate plans for each
of the Debtors.
About Nesbitt Portland Property et al.
Windsor Capital Group Inc. CEO Patrick M. Nesbitt sent hotel-
companies to Chapter 11 bankruptcy to stop a receiver named by
U.S. Bank National Association from taking over eight hotels,
seven of which are operated as Embassy Suites brand hotels. The
eighth hotel, located in El Paso, Texas, was previously operated
as an Embassy Suites hotel, but lost its franchise agreement.
The eight hotels were pledged by the Debtors as collateral for the
loans with U.S. Bank.
According to http://www.wcghotels.com/Santa Monica-based Windsor
Capital owns and/or operates 23 branded hotels in 11 states across
the U.S. Windsor Capital is the largest private owner and
operator of Embassy Suites hotels.
In the case U.S. Bank vs. Nesbitt Bellevue Property LLC, et al.
(S.D.N.Y. 12 Civ. 423), U.S. Bank obtained approval from the
district judge in June to name Alan Tantleff of FTI Consulting,
Inc., as receiver for:
* Embassy Suites Colorado Springs in Colorado;
* Embassy Suites Denver Southeast in Colorado;
* Embassy Suites Cincinnati - Northeast in Blue Ash, Ohio;
* Embassy Suites Portland - Washington Square in Tigard, Oregon;
* Embassy Suites Detroit - Livornia/Novi in Michigan;
* Embassy Suites El Paso in Texas;
* Embassy Suites Seattle - North/Lynwood in Washington; and
* Embassy Suites Seattle - Bellevue in Washington
The receiver obtained district court permission to engage Crescent
Hotels and Resorts LLC to manage the eight hotels. But before Mr.
Adam could take physical possession of the properties and take
control of the Hotels, the eight borrowers filed Chapter 11
petitions (Bankr. C.D. Cal. Lead Case No. 12-12883) on
July 31, 2012, in Santa Barbara, California.
The debtor-entities are Nesbitt Portland Property LLC; Nesbitt
Bellevue Property LLC; Nesbitt El Paso Property, L.P.; Nesbitt
Denver Property LLC; Nesbitt Lynnwood Property LLC; Nesbitt
Colorado Springs Property LLC; Nesbitt Livonia Property LLC; and
Nesbitt Blue Ash Property LLC.
Bankruptcy Judge Robin Riblet presides over the cases. The
Jonathan Gura, Esq., and Peter Susi, Esq., at Susi & Gura, PC; and
Joseph M. Sholder, Esq., at Griffith & Thornburgh LLP, represent
the Debtor as counsel. Alvarez & Marsal North American, LLC,
serves as financial advisors.
Attorneys at Kilpatrick Townsend & Stockton LLP represented the
Debtors in the receivership case.
U.S. Bank National Association, as Trustee and Successor in
Interest to Bank of America, N.A., as Trustee for Registered
Holders of GS Mortgage Securities Corporation II, Commercial
Mortgage Passthrough Certificates, Series 2006-GG6, acting by and
through Torchlight Loan Services, LLC, as special servicer, are
represented in the case by David Weinstein, Esq., and Lawrence P.
Gottesman, Esq., at Bryan Cave LLP.
On Sept. 5, 2012, the Debtors filed with the Court their schedules
of assets and liabilities. Nesbitt Portland scheduled
$29.4 million in assets and $192.3 million in liabilities.
Nesbitt Portland's hotel property is valued at $27.19 million, and
secures a $191.9 million debt to U.S. Bank.
NET TALK.COM: Incurs $14.7 Million Net Loss in 2012
---------------------------------------------------
Net Talk.com, Inc., filed with the U.S. Securities and Exchange
Commission its annual report on Form 10-K disclosing a net loss of
$14.71 million on $5.79 million of total revenue for the year
ended Dec. 31, 2012, as compared with a net loss of $26.17 million
on $2.72 million of total revenue for the year ended Sept. 30,
2011. For the three months ended Dec. 31, 2011, the Company
reported a net loss of $3.44 million on $1.29 million of total
revenue.
As of Dec. 31, 2012, the Company had $5.64 million in total
assets, $22.87 million in total liabilities, $6.37 million in
redeemable preferred stock, and a $23.60 million total
stockholders' deficit.
Thomas Howell Ferguson P. A., in Tallahassee, Florida, issued a
"going concern" qualification on the consolidated financial
statements for the year ended Dec. 31, 2012. The independent
auditors noted that the Company has incurred significant recurring
losses from operations its total liabilities exceeds its total
assets, and is dependent on outside sources of funding for
continuation of its operations. These factors raise substantial
doubt about the Company's ability to continue as a going concern.
On May 26, 2011, the Company's Board of Directors approved a
change in the Company's fiscal year end from September 30, to
December 31, effective Dec. 31, 2011.
Bankruptcy Warning
"We have not sustained profits and our losses could continue.
Without sufficient additional capital to apply to repay our
indebtedness, we may be required to significantly scale back our
operations, significantly reduce our headcount, seek protection
under the provisions of the U.S. Bankruptcy Code, and/or
discontinue many of our activities which could negatively affect
our business and prospects. Our current capital raising efforts
may not be successful in raising additional capital on favorable
terms, or at all," the Company said in the Annual Report.
A copy of the Form 10-K is available for free at:
http://is.gd/xBuBtU
About Net Talk.com
Based in Miami, Fla., Net Talk.com, Inc., is a telephone company,
that provides, sells and supplies commercial and residential
telecommunication services, including services utilizing voice
over internet protocol technology, session initiation protocol
technology, wireless fidelity technology, wireless maximum
technology, marine satellite services technology and other similar
type technologies.
NETBANK INC: FDIC Wins Another Appeal Over Tax-Sharing Agreements
-----------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the U.S. Court of Appeals in Atlanta, for the second
time in a month, reversed lower courts by ruling in favor of the
Federal Deposit Insurance Corp. and holding that a tax-sharing
agreement created an agency relationship whereby the parent
company didn't have ownership of a tax refund.
Law360 reported that the Eleventh Circuit on Sept. 10 said a tax-
sharing agreement between NetBank and its subsidiary established
an agency relationship between them and not a debtor-creditor
relationship, reversing a Florida district court's award of a $5.7
million tax refund to NetBank rather than the FDIC as receiver for
the subsidiary. In a published opinion for the Eleventh Circuit
written by Circuit Judge R. Lanier Anderson, the court unanimously
reversed and remanded the district court's ruling that the tax-
sharing agreement created a debtor-creditor relationship between
NetBank and NetBank f.s.b.
The Bloomberg report recounts that in the case last month
involving bank holding company BankUnited Financial Corp., the
Atlanta court concluded that an ambiguous tax-sharing agreement
didn't create a debtor-creditor relationship between the parent
and the insolvent bank subsidiary. The same question arose anew
in a case involving NetBank Inc. and its failed unit, NetBank FSB.
Bloomberg relates that in the NetBank case, the bankruptcy judge
ruled that the FDIC only had an unsecured claim against the
bankrupt parent on account of a tax refund. The district court
affirmed, and was reversed on Sept. 10 by the appeals court in a
decision by Judge Anderson. Unlike the lower courts, Judge
Anderson found the tax agreement ambiguous. So he looked at a
provision in the agreement saying it was intended to allocate
taxes in accord with a policy statement from the Internal Revenue
Service. The IRS policy in turn provides that the parent company
holds refunds as an agent. Judge Anderson discounted the fact
that there was no other reference to an agency relationship in the
sharing agreement. He said the agreement likewise had no
reference to the creation of a debtor-creditor relationship.
The Bloomberg report discloses that as a result, Judge Anderson
instructed the lower court to give ownership of the tax refund to
the FDIC, as receiver for the failed bank subsidiary.
The appeal is Federal Deposit Insurance Corp. v. Zucker,
12-13965, U.S. Court of Appeals for the 11th Circuit (Atlanta).
The Chapter 11 case was In re NetBank Inc., 07-bk-04295, U.S.
Bankruptcy Court, Middle District of Florida (Jacksonville).
About NetBank Inc.
Headquartered in Jacksonville, Florida, NetBank Inc. --
http://www.netbank.com/-- is a financial holding company of
Netbank, the United States' oldest Internet bank serving retail
and business customers in all 50 states. NetBank Inc. did
retail banking, mortgage banking, business finance, and provided
ATM and merchant processing services.
The Company filed for chapter 11 protection (Bankr. M.D. Fla. Case
No. 07-04295) on Sept. 28, 2007. Alan M. Weiss, Esq., at
Holland & Knight LLP, represents the Debtor. Rogers
Towers, Esq. at Kilpatrick Stockton LLP, represents the Official
Committee of Unsecured Creditors.
Clifford Zucker serves as the Liquidating Supervisor for NetBank
under the terms of a Second Amended Liquidating Plan confirmed in
Sept. 2008, and is represented by Michael D. Langford, Esq., and
Shane G. Ramsey, Esq., at Kilpatrick Stockton LLP in Atlanta, Ga.
As of Sept. 25, 2007, the Debtor reported total assets of
$87,213,942 and total debts of $42,245,857. As of August 31,
2008, NetBank, Inc., had total assets of $13,807,207 and total
liabilities of $34,607,868.
About NetBank Inc.
Headquartered in Jacksonville, Florida, NetBank Inc. --
http://www.netbank.com/-- is a financial holding company of
Netbank, the United States' oldest Internet bank serving retail
and business customers in all 50 states. NetBank Inc. did
retail banking, mortgage banking, business finance, and provided
ATM and merchant processing services.
The Company filed for chapter 11 protection (Bankr. M.D. Fla. Case
No. 07-04295) on Sept. 28, 2007. Alan M. Weiss, Esq., at
Holland & Knight LLP, represents the Debtor. Rogers
Towers, Esq. at Kilpatrick Stockton LLP, represents the Official
Committee of Unsecured Creditors.
Clifford Zucker serves as the Liquidating Supervisor for NetBank
under the terms of a Second Amended Liquidating Plan confirmed in
Sept. 2008, and is represented by Michael D. Langford, Esq., and
Shane G. Ramsey, Esq., at Kilpatrick Stockton LLP in Atlanta, Ga.
As of Sept. 25, 2007, the Debtor reported total assets of
$87,213,942 and total debts of $42,245,857. As of August 31,
2008, NetBank, Inc., had total assets of $13,807,207 and total
liabilities of $34,607,868.
NET ELEMENT: Intends to Buy 10% Minority Interest in TOT Group
--------------------------------------------------------------
Net Element International, Inc., on Sept. 4, 2013, entered into a
letter agreement, dated as of Aug. 28, 2013, with Oleg Firer,
Steven Wolberg, Georgia Notes 18 LLC and Vladimir Sadovskiy,
pursuant to which the Company has agreed, subject to approval of
the Company's shareholders, to issue those number of shares of
common stock of the Company equal to 10 percent of the Company's
issued and outstanding common stock as of the date of issuance of
those shares in exchange for the Company's acquisition of the
outstanding 10 percent minority interest in the Company's 90
percent-owned subsidiary, TOT Group, Inc. Mr. Firer is chief
executive officer and a director of the Company and Mr. Wolberg is
chief legal officer and secretary of the Company.
Pursuant to the Exchange Agreement, the Company will purchase (i)
from Oleg Firer 45,000 shares of common stock of TOT Group,
representing 4.5 percent of TOT Group's outstanding shares of
common stock, in exchange for the issuance to Mr. Firer of those
number of shares of common stock of the Company equal to 4.5
percent of the Company's issued and outstanding common stock as of
the date of issuance of those shares, (ii) from Steven Wolberg
20,000 shares of common stock of TOT Group, representing 2 percent
of TOT Group's outstanding shares of common stock, in exchange for
the issuance to Mr. Wolberg of those number of shares of common
stock of the Company equal to 2 percent of the Company's issued
and outstanding common stock as of the date of issuance of those
shares, (iii) from Georgia Notes 18 LLC 30,000 shares of common
stock of TOT Group, representing 3 percent of TOT Group's
outstanding shares of common stock, in exchange for the issuance
to Georgia Notes 18 LLC of those number of shares of common stock
of the Company equal to 3 percent of the Company's issued and
outstanding common stock as of the date of issuance of those
shares and (iv) from Vladimir Sadovskiy 5,000 shares of common
stock of TOT Group, representing 0.5 percent of TOT Group's
outstanding shares of common stock, in exchange for the issuance
to Mr. Sadovskiy of those number of shares of common stock of the
Company equal to 0.5 percent of the Company's issued and
outstanding common stock as of the date of issuance of those
shares.
Mike Zoi, the Company's majority stockholder and a director of the
Company, and Kenges Rakishev, a significant stockholder of the
Company and Chairman of the Company's Board of Directors, have
agreed to cause their respective controlled entities that hold
shares of common stock of the Company to vote in favor of the
issuance of 10 percent of the Company's issued and outstanding
common stock as of the date of issuance of those shares pursuant
to the Exchange Agreement.
About Net Element
Net Element International, Inc. (NASDAQ: NETE) is a global
technology-driven group specializing in electronic commerce and
mobile payments. The Company owns and operates a mobile payments
company, TOT Money, as well as several popular content
monetization verticals. Together with its subsidiaries, Net
Element International enables ecommerce and content-management
companies to monetize their assets in ecommerce and mobile
commerce environments. The Company has U.S. headquarters
in Miami and international headquarters in Moscow.
The Company's balance sheet at June 30, 2013, showed $23.8 million
in total assets, $31.0 million in total liabilities, and a
stockholders' deficit of $7.2 million.
"Since our inception, we have incurred significant operating
losses. We incurred net losses totaling $23.5 million for the six
months ended June 30, 2013, and net losses totaling $16.4 million
and $24.9 million for the years ended Dec. 31, 2012, and 2011,
respectively. We had negative cash flows from operating
activities of $4.0 million and $25.2 million for the six months
ended June 30, 2013, and the year ended Dec. 31, 2012,
respectively. At June 30, 2013, we had working capital of
$541,644 and an accumulated deficit of $110.3 million. These
conditions raise substantial doubt about our ability to continue
as a going concern. The independent auditors' report on our
consolidated financial statements for the year ended Dec. 31,
2012, contains an explanatory paragraph expressing substantial
doubt as to our ability to continue as a going concern," as
disclosed in the Company's quarterly report for the period ended
June 30, 2013.
ORCHARD SUPPLY: Changes Name to "OSH 1 Liquidating Corporation"
---------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware granted a
motion filed by OSH 1 Liquidating Corporation, formerly known as
Orchard Supply Hardware Stores Corporation, which requested the
Bankruptcy Court to approve an amendment to certain provisions in
the Company's Amended and Restated Certificate of Incorporation
and the Company's Bylaws pursuant to Section 105(a) of title 11 of
the United States Code and section 303 of the General Corporation
Law of the State of Delaware, effective nunc pro tunc to Aug. 20,
2013. The Company subsequently adopted and filed with the
Secretary of State of the State of Delaware on Sept. 6, 2013, a
certificate of amendment of the Restated Certificate, thereby
modifying the Restated Certificate by amending Article FIRST, by
deleting Sections F, H and I of Article FIFTH in their entirety
and by adding a new Article THIRTEENTH. The principal revisions
were to change the name of the Company to OSH 1 Liquidating
Corporation and to reduce the size and simplify the structure of
the Board of Directors.
In addition, the Company amended Article II, Sections 1, 2, 5 and
7 and Article III, Section 2 of the Bylaws of the Company and
deleted Article VII, Section 7 of the Bylaws of the Company in its
entirety by amending and restating the Amended and Restated Bylaws
of the Company to, among other things, reflect the size and
structure of the Board of Directors as set forth in the
Certificate of Amendment and as authorized by the Bankruptcy
Court.
A copy of the Amended Certificate of Incorporation is available
for free at http://is.gd/woVIjQ
A copy of the Amended Bylaws is available for free at:
http://is.gd/eEpikp
About Orchard Supply
San Jose, Cal.-based Orchard Supply Hardware Stores Corporation
operates neighborhood hardware and garden stores focused on paint,
repair and the backyard. It was spun off from Sears Holdings
Corp. in 2012.
Orchard Supply and two affiliates sought Chapter 11 protection
(Bankr. D. Del. Lead Case No. 13-11565) on June 16 to facilitate a
restructuring of the company's balance sheet and a sale of its
assets for $205 million in cash to Lowe's Companies, Inc., absent
higher and better offers. In addition to the $205 million cash,
Lowe's has agreed to assume payables owed to nearly all of
Orchard's supplier partners.
Bankruptcy Judge Christopher S. Sontchi oversees the case.
Michael W. Fox signed the petitions as senior vice president and
general counsel. The Debtors disclosed total assets of
$441,028,000 and total debts of $480,144,000.
Stuart M. Brown, Esq., at DLA Piper LLP (US), in Wilmington,
Delaware; and Richard A. Chesley, Esq., Chun I. Jang, Esq., and
Daniel M. Simon, Esq., at DLA Piper LLP (US), in Chicago,
Illinois, are the Debtors' counsel. Moelis & Company LLC serves
as the Debtors' investment banker. FTI Consulting, Inc., serves
as the Debtors' financial advisors. A&G Realty Partners, LLC,
serves as the Debtors' real estate advisors. BMC Group Inc. is
the Debtors' claims and noticing agent.
The Official Committee of Unsecured Creditors appointed in case
has retained Pachulski Stang Ziehl & Jones LLP as counsel, and
Alvarez & Marsal as financial advisors.
Lowe's Cos. completed the $205 million acquisition of 72 of
Orchard Supply's 91 stores.
NUVERRA ENVIRONMENTAL: Curtis V. Trink Law Firm Files Class Action
------------------------------------------------------------------
Law Offices of Curtis V. Trinko, LLP has filed a securities fraud
class action lawsuit in the United States District Court for the
District of Arizona against Nuverra Environmental Solutions, Inc.
on behalf of investors who purchased or otherwise acquired the
common stock of the Company during the period from August 6, 2012
through August 23, 2013.
Nuverra purports to be an environmental solutions company that
provides services to customers in energy and industrial end-
markets. The Company states that its focus is on the delivery,
collection, treatment, recycling and disposal of restricted
solids, water, waste water, used motor oil, spent antifreeze,
waste fluids and hydrocarbons. Nuverra operates in approximately
70 locations across 26 states.
The complaint sets forth claims for violations of the Securities
Exchange Act of 1934. Specifically, throughout the Class Period,
Defendants made false and misleading statements and/or failed to
disclose: (a) that the Company was suffering from a severe
liquidity crisis; (b) that the Company was experiencing a
significant decline in its operational results, particularly in
the Eagle Ford Shale area; (c) that as a result of the Company's
poor financial performance, Nuverra's default risk materially
increased and the Company faces potential defaults on its
covenants; and (d) based upon the above, Defendants lacked a
reasonable basis for their positive statements about the Company
during the Class Period
If you purchased Nuverra common stock during the Class Period of
August 6, 2012 through August 23, 2013, and wish to apply to be
the lead plaintiff in this action, a motion on your behalf must be
filed with the Court no later than November 4, 2013. You may
contact the Trinko Firm to discuss your rights regarding the
appointment of lead plaintiff and your interest in the class
action. Please note that you may also retain counsel of your
choice and need not take any action at this time to be a class
member.
Contact: Law Offices of Curtis V. Trinko, LLP
Curtis V. Trinko, Esq.
Telephone: 212-490-9550
E-mail: ctrinko@trinko.com
OVERSEAS SHIPHOLDING: Execs Dodge Suit Claiming They Hid Tax Debt
-----------------------------------------------------------------
Law360 reported that a New York federal judge on Sept. 10 tossed
claims against two executives of Overseas Shipholding Group Inc.
who were accused of lying to shareholders about the tanker
company's $35 million tax debt that sent shares plummeting and
plunged the company into bankruptcy.
According to the report, the court found that OSG President Morten
Arntzen and Vice President Myles Itkin did not run afoul of
securities laws, saying the men did not sell OSG stock before the
company's shares tumbled. The shareholder lawsuit was filed in
October.
The case is Porzio v. Overseas Shipholding Group, Inc. et al.,
Case No. 1:12-cv-07948 (S.D.N.Y.) before Judge Shira A.
Scheindlin.
About Overseas Shipholding
Overseas Shipholding Group, Inc., headquartered in New York, is
one of the largest publicly traded tanker companies in the world,
engaged primarily in the ocean transportation of crude oil and
petroleum products. OSG owns or operates 111 vessels that
transport oil and petroleum products throughout the world.
Overseas Shipholding Group and 180 affiliates filed voluntary
Chapter 11 petitions (Bankr. D. Del. Lead Case No. 12-20000) on
Nov. 14, 2012, disclosing $4.15 billion in assets and $2.67
billion in liabilities. Greylock Partners LLC Chief Executive
John Ray serves as chief reorganization officer. James L.
Bromley, Esq., and Luke A. Barefoot, Esq., at Cleary Gottlieb
Steen & Hamilton LLP serve as OSG's Chapter 11 counsel. Derek C.
Abbott, Esq., Daniel B. Butz, Esq., and William M. Alleman, Jr.,
at Morris, Nichols, Arsht & Tunnell LLP, serve as local counsel.
Chilmark Partners LLC serves as financial adviser. Kurtzman
Carson Consultants LLC is the claims and notice agent.
The Export-Import Bank of China, owed $312 million used for the
construction of five tankers, is represented by Louis R. Strubeck,
Jr., Esq., and Kristian W. Gluck, Esq., at Fulbright & Jaworski
LLP in Dallas; David L. Barrack, Esq., and Beret Flom, Esq., at
Fulbright & Jaworski in New York; and John Knight, Esq., and
Christopher Samis, Esq., at Richards Layton & Finger PA. Chilmark
Partners, LLC serves as financial and restructuring advisor.
Akin Gump Strauss Hauer & Feld LLP, and Pepper Hamilton LLP, serve
as co-counsel to the official committee of unsecured creditors.
FTI Consulting, Inc., is the financial advisor and Houlihan Lokey
Capital, Inc., is the investment banker.
PATRIOT COAL: Delays Filing of Plan Disclosures Until Oct. 2
------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Patriot Coal Corp., the bankrupt coal producer,
won't be moving ahead with its Chapter 11 reorganization as fast
as it promised last week. The company filed a bare-bones plan on
Sept. 6, saying at the time that it anticipated submitting
disclosure materials this week to flesh out the proposal. Instead,
the materials won't be coming until Oct. 2, St. Louis-based
Patriot said Sept. 11.
According to the report, the plan filed last week only said
creditors will be paid with new stock and debt. The draft
contains blanks to be filled in later with details on how the
stock and new notes will be divided.
The plan is to be financed in part by a backstopped rights
offering allowing creditors to buy additional stock and new notes.
The creditors backstopping the sale of securities weren't
disclosed nor were the terms of the offering.
Patriot previously said it was talking with Knighthead Capital
Management LLC and Aurelius Capital Management LP about a rights
offering to supply some of the financing to emerge from
bankruptcy.
Patriot announced in a court filing that the hearing for approval
of disclosure materials will be held Nov. 6. The company said
that maturity of financing for the Chapter 11 case has been
extended until Dec. 31.
The company also filed for court approval of a settlement with Ace
American Insurance Co. over a policy allegedly providing coverage
for a settled West Virginia suit over waterwell pollution.
Patriot was sued in 2008 by 362 individuals claiming their water
was polluted. Patriot sued Ace, demanding coverage for the suits.
Patriot settled with the plaintiffs in 2011. Assuming the
bankruptcy court approves, Patriot will accept $1.25 million from
Ace in satisfaction of the insurance company's obligations. A
hearing is set for Sept. 24.
About Patriot Coal
St. Louis-based Patriot Coal Corporation (NYSE: PCX) is a producer
and marketer of coal in the eastern United States, with 13 active
mining complexes in Appalachia and the Illinois Basin. The
Company ships to domestic and international electricity
generators, industrial users and metallurgical coal customers, and
controls roughly 1.9 billion tons of proven and probable coal
reserves.
Patriot Coal and nearly 100 affiliates filed voluntary Chapter 11
petitions in U.S. bankruptcy court in Manhattan (Bankr. S.D.N.Y.
Lead Case No. 12-12900) on July 9, 2012. Patriot said it had
$3.57 billion of assets and $3.07 billion of debts, and has
arranged $802 million of financing to continue operations during
the reorganization.
Davis Polk & Wardwell LLP serves as lead restructuring counsel.
Bryan Cave LLP serves as local counsel to the Debtors. Blackstone
Advisory Partners LP is serving as financial advisor, and AP
Services, LLC is providing interim management services to Patriot
in connection with the reorganization. Ted Stenger, a Managing
Director at AlixPartners LLP, the parent company of AP Services,
has been named Chief Restructuring Officer of Patriot, reporting
to the Chairman and CEO. GCG, Inc. serves as claims and noticing
agent.
The U.S. Trustee appointed a seven-member creditors committee.
Kramer Levin Naftalis & Frankel LLP serves as its counsel.
HoulihanLokey Capital, Inc., serves as its financial advisor and
investment banker. Epiq Bankruptcy Solutions, LLC, serves as its
information agent.
On Nov. 27, 2012, the New York bankruptcy judge moved Patriot's
bankruptcy case to St. Louis. The order formally sending the
reorganization to Missouri was signed December 19 by the
bankruptcy judge. The New York Judge in a Jan. 23, 2013 order
denied motions to transfer the venue to the U.S. Bankruptcy Court
for the Southern District of West Virginia.
PATRIOT COAL: Wants to Speed Up Ex-Parent's Discovery
-----------------------------------------------------
Law360 reported that Patriot Coal Corp. on Sept. 11 again urged a
Missouri bankruptcy judge to speed up its former parent's release
of discovery documents, arguing that the delay has unreasonably
blocked it from assessing the estate's assets and potential
claims, some of which stem from its contentious 2007 spinoff.
According to the report, for the past eight months, Peabody Energy
Corp. has been dragging its feet in complying with a examination
under Rule 2004 of the Federal Rules of Bankruptcy Procedure,
Patriot Coal said in a filing with the court.
About Patriot Coal
St. Louis-based Patriot Coal Corporation (NYSE: PCX) is a producer
and marketer of coal in the eastern United States, with 13 active
mining complexes in Appalachia and the Illinois Basin. The
Company ships to domestic and international electricity
generators, industrial users and metallurgical coal customers, and
controls roughly 1.9 billion tons of proven and probable coal
reserves.
Patriot Coal and nearly 100 affiliates filed voluntary Chapter 11
petitions in U.S. bankruptcy court in Manhattan (Bankr. S.D.N.Y.
Lead Case No. 12-12900) on July 9, 2012. Patriot said it had
$3.57 billion of assets and $3.07 billion of debts, and has
arranged $802 million of financing to continue operations during
the reorganization.
Davis Polk & Wardwell LLP serves as lead restructuring counsel.
Bryan Cave LLP serves as local counsel to the Debtors. Blackstone
Advisory Partners LP is serving as financial advisor, and AP
Services, LLC is providing interim management services to Patriot
in connection with the reorganization. Ted Stenger, a Managing
Director at AlixPartners LLP, the parent company of AP Services,
has been named Chief Restructuring Officer of Patriot, reporting
to the Chairman and CEO. GCG, Inc. serves as claims and noticing
agent.
The U.S. Trustee appointed a seven-member creditors committee.
Kramer Levin Naftalis & Frankel LLP serves as its counsel.
HoulihanLokey Capital, Inc., serves as its financial advisor and
investment banker. Epiq Bankruptcy Solutions, LLC, serves as its
information agent.
On Nov. 27, 2012, the New York bankruptcy judge moved Patriot's
bankruptcy case to St. Louis. The order formally sending the
reorganization to Missouri was signed December 19 by the
bankruptcy judge. The New York Judge in a Jan. 23, 2013 order
denied motions to transfer the venue to the U.S. Bankruptcy Court
for the Southern District of West Virginia.
PATRIOT COAL: DIP Financing Extended to December 31
---------------------------------------------------
Patriot Coal Corporation on Sept. 11 disclosed that its Debtor-in-
Possession financing has been extended to December 31, 2013.
Separately, the Company on Sept. 11 filed a notice with the U.S.
Bankruptcy Court for the Eastern District of Missouri setting
forth the relevant dates for approval of its forthcoming
Disclosure Statement. The Disclosure Statement is expected to be
filed on or before October 2, 2013, and the approval hearing is
currently scheduled for November 6, 2013.
About Patriot Coal
St. Louis-based Patriot Coal Corporation (NYSE: PCX) is a producer
and marketer of coal in the eastern United States, with 13 active
mining complexes in Appalachia and the Illinois Basin. The
Company ships to domestic and international electricity
generators, industrial users and metallurgical coal customers, and
controls roughly 1.9 billion tons of proven and probable coal
reserves.
Patriot Coal and nearly 100 affiliates filed voluntary Chapter 11
petitions in U.S. bankruptcy court in Manhattan (Bankr. S.D.N.Y.
Lead Case No. 12-12900) on July 9, 2012. Patriot said it had
$3.57 billion of assets and $3.07 billion of debts, and has
arranged $802 million of financing to continue operations during
the reorganization.
Davis Polk & Wardwell LLP serves as lead restructuring counsel.
Bryan Cave LLP serves as local counsel to the Debtors. Blackstone
Advisory Partners LP is serving as financial advisor, and AP
Services, LLC is providing interim management services to Patriot
in connection with the reorganization. Ted Stenger, a Managing
Director at AlixPartners LLP, the parent company of AP Services,
has been named Chief Restructuring Officer of Patriot, reporting
to the Chairman and CEO. GCG, Inc. serves as claims and noticing
agent.
The U.S. Trustee appointed a seven-member creditors committee.
Kramer Levin Naftalis & Frankel LLP serves as its counsel.
HoulihanLokey Capital, Inc., serves as its financial advisor and
investment banker. Epiq Bankruptcy Solutions, LLC, serves as its
information agent.
On Nov. 27, 2012, the New York bankruptcy judge moved Patriot's
bankruptcy case to St. Louis. The order formally sending the
reorganization to Missouri was signed December 19 by the
bankruptcy judge. The New York Judge in a Jan. 23, 2013 order
denied motions to transfer the venue to the U.S. Bankruptcy Court
for the Southern District of West Virginia.
Patriot Coal Corporation on Sept. 6 filed a Plan of Reorganization
with the U.S. Bankruptcy Court for the Eastern District of
Missouri as contemplated by the terms of Patriot's Debtor-in-
Possession financing.
The Company anticipates filing its Disclosure Statement with the
Bankruptcy Court this week, which will contain additional details
about the proposed Plan.
PHILS CAKE: Sutherland Acquires Southern Commerce Bank's Claim
--------------------------------------------------------------
Robert W. Davis Jr., on behalf of Sutherland Asset I, LLC, a
creditor in the Chapter 11 case of Phil's Cake Box Bakeries, Inc.,
notified the U.S. Bankruptcy Court of the transfer/assignment of
claim other than for security.
According to a notice dated Sept. 4, Southern Commerce Bank, N.A.,
on May 31, 2013, made an assignment and conveyance to Sutherland
Asset I, LLC. SCB granted, bargained, sold, assigned, transferred
and set over unto Sutherland, as purchaser all of SCB's right,
title interest, claim and demand in and to the assets in
consideration of the sum of $1, and other good and valuable
consideration paid by the purchaser at the time of execution.
About Phil's Cake Box Bakeries, Inc.
Phil's Cake Box Bakeries, Inc., dba Alessi's Bakeries, Inc., is a
family-owned bakery and catering business owned and operated in
Tampa, Fla., by four generations of the Alessi family. The
operations have grown from a small bakery delivering bread by
horse and wagon, to the current 100,000 square foot manufacturing
facility serving retail customers nationwide, with a retail
location maintaining and continuing its historic traditions in
Tampa.
Alessi's operates from two locations: a manufacturing facility and
a retail bakery. The Eagle Trail manufacturing facility is located
at 5202 Eagle Trail Drive, Tampa. The Eagle Trail Facility is a
100,000 sq. ft. building which houses various production lines
including five ovens, 40,000 sq. ft. of refrigerated space with
four walk-in freezers and two coolers, and 20,000 sq. ft. of raw
material and packing supplies warehouse space. Alessi's also
operates a retail bakery facility, located at 2909 West Cypress
Street, Tampa. Alessi's owns both locations.
As of the Petition Date, Alessi's estimates that it has assets of
roughly $14.5 million and liabilities of roughly $14.7 million.
Liabilities include $5.9 million owing to Zions. There is another
$3 million owing to the Small Business Administration and $820,000
to trade suppliers.
Alessi's filed for bankruptcy to address the over-leveraging due
to the Eagle Trail Facility acquisition and the inability fully
and timely to service debt during the period in which sales
dropped.
Alessi's filed for Chapter 11 bankruptcy (Bankr. M.D. Fla. Case
No. 12-13635) on Sept. 5, 2012. Bankruptcy Judge K. Rodney May
oversees the case. Harley E. Riedel, Esq., and Daniel R. Fogarty,
Esq., at Stichter Riedel Blain & Prosser, P.A., serve as the
Debtor's counsel. The petition was signed by Philip Alessi, Jr.,
president.
On July 9, 2013, the Court entered an order confirming Phil's Cake
Box Bakeries, Inc.'s Amended Plan, dated as of April 4, 2013, as
modified on June 24, 2013, and as further modified by the
confirmation order.
No trustee or examiner nor an official committee have yet been
appointed in the case.
PROSPECT HOLDING: S&P Assigns 'B+' ICR; Outlook Stable
------------------------------------------------------
Standard & Poor's Ratings Services said that it assigned its 'B+'
issuer credit ratings to Prospect Holding Co. LLC (Prospect) and
its subsidiaries Prospect Holding Finance Co. and Prospect
Mortgage LLC. The outlook on each entity is stable. S&P also
assigned a 'B+' issue rating to Prospect's proposed issuance of
$200 million senior unsecured notes, co-issued by Prospect and
Prospect Holding Finance Co.
Sherman Oaks, Calif.-based Prospect is a privately held
residential mortgage origination and servicing company formed by
private equity firm Sterling Partners in 2006. "The company's
limited operating history and concentration in residential real
estate are negative rating factors," said Standard & Poor's credit
analyst Stephen Lynch. Prospect began operations in 2007, near
the bottom of the housing market in terms of originations, by
assembling a seasoned management team with mortgage industry
experience. The company has grown rapidly, both in assets and
profitability, as the broader U.S. housing market recovered--aided
by low interest rates and government-backed loan refinance and
modification programs. In 2012, Prospect originated 32,000
mortgages worth $8.4 billion. S&P views Prospect's origination
volume and the broader residential real estate market as highly
cyclical and dependent on interest rates and the underlying health
of the U.S. economy, possibly resulting in high earnings
volatility.
Prospect's geographic concentration in California further limits
the rating. In 2012, California comprised 52% of the company's
originations, which disproportionally exposes the company to a
potential regional slowdown. In 2012, all of the company's
originations came from one of its more than 100 retail branches.
The company plans to diversify its revenue stream both
geographically and by channel by building out its correspondent
platform. Prospect does not have any plans to enter the wholesale
market.
As of June 30, 2013, Prospect had $147 million of mortgage
servicing rights (MSRs) on its balance sheet serving $12.3 billion
of unpaid principal balance (UPB). Prospect's MSR portfolio
should continue to grow as long as the company originates new
mortgages to replenish natural portfolio amortization. S&P views
these assets favorably because they provide revenue
diversification and a "natural hedge" to the company's origination
platform. Prospect shares the economics of servicing by
contracting with a third party to "subservice" its portfolio. S&P
believes the reliance on a single third party represents a risk.
A poor performance by that party could have an outsize impact on
Prospect's results. Even worse, a failure of that party could
force Prospect to reallocate all servicing to a new entity.
Prospect's financial profile partially offsets the company's
risks. Pro forma for the $200 million debt offering, S&P believes
the company will operate at debt to EBTIDA of about 2x and debt to
adjusted EBITDA of about 3.5x-4x. The capitalization of MSRs from
origination, which could be monetized, is the primary adjustment
we make to EBITDA. Prospect will also have debt to adjusted
tangible equity (ATE) of about 1x. S&P views these leverage
levels favorably for the rating.
The outlook is stable. S&P expects Prospect to maintain a
conservative leverage profile while the company continues to grow
with the broader U.S. housing market. S&P expects mortgage
refinancing volumes will contract as interest rates rise but
believe purchase volumes will increase as Prospect gains market
share, particularly because growth is coming off a relatively low
base.
S&P could lower the rating if debt to EBITDA were to rise above 3x
or if debt to adjusted EBITDA were to rise above 5x for successive
quarters without a credible plan to reduce it. For instance, S&P
could lower the rating if the company's capitalized MSRs fail to
yield sufficient cash earnings to support the debt from a coverage
and equity support position.
An upgrade is unlikely until the firm establishes a longer
operating history and generates additional geographic
diversification in terms of revenue.
QUICKSILVER RESOURCES: Southeastern Asset Holds 5.3% Equity Stake
-----------------------------------------------------------------
In an amended Schedule 13G filing with the U.S. Securities and
Exchange Commission on Sept. 10, 2013, Southeastern Asset
Management, Inc., and its affiliates disclosed that they
beneficially owned 9,470,612 shares of common stock of Quicksilver
Resources Inc. representing 5.3 percent of the shares outstanding.
A copy of the regulatory filing is available for free at:
http://is.gd/nvsaQl
About Quicksilver
Quicksilver Resources Inc. is an exploration and production
company engaged in the development and production of long-lived
natural gas and oil properties onshore North America. Based in
Fort Worth, Texas, the company is widely recognized as a leader in
the development and production from unconventional reservoirs
including shale gas, and coal bed methane. Following more than 30
years of operating as a private company, Quicksilver became public
in 1999 and is listed on the New York Stock Exchange under the
ticker symbol KWK. The company has U.S. offices in Fort Worth,
Texas; Glen Rose, Texas; Steamboat Springs, Colorado; Craig,
Colorado and Cut Bank, Montana. The Company's Canadian
subsidiary, Quicksilver Resources Canada Inc., is headquartered in
Calgary, Alberta.
As of June 30, 2013, the Company had $1.39 billion in total
assets, $2.36 billion in total liabilities and a $968.49 million
total stockholders' deficit.
* * *
As reported by the TCR on June 17, 2013, Moody's Investors Service
downgraded Quicksilver Resources Inc.'s Corporate Family Rating to
Caa1 from B3. "This rating action is reflective of Quicksilver's
revised recapitalization plan," stated Michael Somogyi, Moody's
Vice President and Senior Analyst. "Quicksilver's inability to
complete its recapitalization plan as proposed elevates near-term
refinancing risk given its weak operating profile and raises
concerns over the sustainability of the company's capital
structure."
In the June 27, 2013, edition of the TCR, Standard & Poor's
Ratings Services said it lowered its corporate credit rating on
Fort Worth, Texas-based Quicksilver Resources Inc. to 'CCC+' from
'B-'. "We lowered our corporate credit rating on Quicksilver
Resources because we do not believe the company will be able to
remedy its unsustainable leverage," said Standard & Poor's credit
analyst Carin Dehne-Kiley.
REVOLUTION DAIRY: Can Use Cash Collateral Thru Oct. 31
------------------------------------------------------
Judge R. Kimball Mosier granted Revolution Dairy, LLC, et al.,
access to the cash collateral for the period from Aug. 1, 2013
through Oct. 31, 2013 in accordance with a prepared budget.
Earlier, Rabo Agrifinance, Inc., filed an objection to the Cash
Collateral Motion and Metropolitan Life Insurance Company also
filed a request for clarification on the Motion. Other parties
not filing objections but asserting an interest in cash collateral
are Intermountain Farmers Association, Delta Cache, LLC, Cargill,
Inc., and WesternAg Credit, PCA.
Prior to the hearing on the Motion, the Debtors reached an
agreement resolving Rabo's objection and addressed the concerns
raised by MetLife's request for clarification. The Debtors also
circulated a revised budget to their secured creditors and
requested their consent to the revisions, the most material of
which involved a request to pay $157,000 per month starting Sept.
1, 2013 as adequate protection to Rabo and an increase by $55,400
to the budget item for replacement heifers.
Under a Sept. 3, 2013 order, Judge Mosier ruled that the rights of
all parties are reserved with respect to adequate protection
payments of holders of secured claims.
Notwithstanding this, Rabo will immediately be entitled to apply
the $250,000 in prior cash collateral payments it received from
the Debtors and is currently holding in a suspense account and all
adequate protection payments made pursuant to the Order against
the existing debt owed by the Debtors.
The Court further rules that those secured creditors asserting an
interest in the cash collateral proposed to be used by the Debtors
(including Rabo; MetLife; Delta; Cargill; IFA, and WAC) will be
granted a replacement lien in all postpetition property of like
kind acquired by the Debtors (including but not limited to
livestock, farm products, feed, milk, accounts, and all products
and proceeds thereof) to the extent of the respective Debtors' use
of cash collateral and according to the respective interests and
lien priorities held by such secured creditors in the cash
collateral that is used.
The Debtors are further authorized to fund monthly retainers to
their accountants, Genske Mulder, as set forth in the Cash
Collateral Budget (subject to return if the fees of such
professionals are not approved or as otherwise ordered by the
Court).
The Debtors' expenditures of cash collateral during the Cash
Collateral Period may exceed the Cash Collateral Budget by ten
percent (10%) in any single category; provided, however, the total
of all expenditures during the Cash Collateral Period may not
exceed the total for all categories except that the Debtors first
notify the objecting creditors and obtain consent for such excess
expenditures or obtain further Court order.
A copy of the Cash Collateral Budget for August to October 2013 is
available at:
http://bankrupt.com/misc/REVOLUTIONDAIRY_BudgetAugtoOct2013.pdf
About Revolution Dairy
Revolution Dairy LLC is one of the largest dairy farms in Utah.
Revolution Dairy and affiliate Highline Dairy, LLC, filed bare-
bones Chapter 11 petitions (Bankr. D. Utah Case Nos. 13-20770 and
13-20771) in Salt Lake City on Jan. 27, 2013. Each of the Debtors
estimated $10 million to $50 million in assets and liabilities.
Managers of Revolution and Highline -- Robert and Judith Bliss --
also sought Chapter 11 protection (Case No. 13-20772).
Revolution Dairy, LLC, is represented by Michael N. Zundel, Esq.,
Adam S. Affleck, Esq., and T. Edward Cundick, Esq., at Prince,
Yeates & Geldzahler. Highline Dairy, LLC, is represented by
George B. Hoffman, Esq., at Parsons Kinghorn & Harris. Robert and
Judith Bliss are represented by David T. Berry, Esq., at Berry &
Tripp P.C.
The Debtors' cases are jointly administered under Case No.
13-20770.
The U.S. Trustee appointed five members to the official committee
of unsecured creditors. The Committee tapped Snell and Wilmer
L.L.P. as its counsel. Berkeley Research Group LLC serves as the
panel's financial advisor.
RHYTHM AND HUES: Deadline to File Plan Extended to Sept. 20
-----------------------------------------------------------
At the behest of AWTR Liquidation, Inc., f/k/a Rhythm and Hues,
Inc., the U.S. Bankruptcy Court extended the Debtor's deadline to
file a chapter 11 plan and disclosure statement from Sept. 6, 2013
to Sept. 20, 2013.
Rhythm and Hues, Inc., aka Rhythm and Hues Studios Inc., filed
its Chapter 11 petition (Bankr. C.D. Cal. Case No. 13-13775) in
Los Angeles on Feb. 13, 2013, estimating assets ranging from
$10 million to $50 million and liabilities ranging from
$50 million to $100 million. Judge Neil W. Bason oversees the
case. Brian L. Davidoff, Esq., C. John M Melissinos, Esq., and
Claire E. Shin, Esq., at Greenberg Glusker, serve as the Debtor's
counsel. Houlihan Lokey Capital Inc., serves as investment
banker.
The petition was signed by John Patrick Hughes, president and CFO.
R&H provided visual effects and animation for more than 150
feature films and has received Academy Awards for Babe and the
Golden Compass, an Academy Award nomination for The Chronicles of
Narnia and Life of Pi. R&H owned a 135,000 square-foot facility
in El Segundo, California, and had more than 460 employees.
Key clients Universal City Studios LLC and Twentieth Century Fox,
a division of Twentieth Century Fox Film Corporation, provided DIP
financing. They are represented by Jones Day's Richard L. Wynne,
Esq., and Lori Sinanyan, Esq.
The Official Committee of Unsecured Creditors tapped Stutman,
Treister & Glatt Professional Corporation as its counsel.
At the end of March 2013, the Debtor sold the business to 34x118
Holdings Inc., an affiliate of competitor Prana Studios Inc. The
buyer agreed to pay $1.2 million cash, take over payment of the
loan financing the Chapter 11 effort, pay defaults on contracts
going along with the sale, and assume liabilities to employees for
as much as $5 million. On May 24, 2013, the Debtor obtained Court
permission to change its corporate name to AWTR Liquidation, Inc.
RICHMOND, CA: Eminent Domain Plan Heads to Court Showdown
---------------------------------------------------------
Karen Gullo, writing for Bloomberg News, reported that BlackRock
Inc., Pacific Investment Management Co., DoubleLine Capital LP and
other bondholders are asking a court to block a proposal by
Richmond, California, to seize underwater mortgages through
eminent domain.
According to the report, with this week's vote by Richmond's city
council to press ahead with an effort its mayor claims will help
homeowners avoid foreclosure and fend off blight, the dispute
between the northern California oil refinery town and Wall Street
moved today to the federal courthouse in San Francisco.
U.S. District Judge Charles Breyer is hearing arguments from both
sides on whether to order the city to halt efforts to use eminent
domain to take over loans, the report related. He will also
consider the city's request to find that the bondholders went to
court prematurely and dismiss their claims because the city
council hasn't approved the plan.
A ruling favoring bondholders, who sued the city through their
bank trustees, would dissuade other cities from following in
Richmond's footsteps, said Dan Schechter, a law professor at
Loyola Law School, Los Angeles, the report further related. A
decision for Richmond won't encourage other municipalities to
follow suit because it wouldn't deal directly with the merits of
bondholders' claims that the Richmond plan is unconstitutional, he
said.
"The court will hold that no injunctive relief is available at
this time. That doesn't mean the bondholders are without remedy,"
Schechter said by phone, the report added. "If no injunction is
issued, it would preserve the status quo."
ROSETTA GENOMICS: To Issue 853,700 Ordinary Shares Under Plan
-------------------------------------------------------------
Rosetta Genomics Ltd. registered with the U.S. Securities and
Exchange Commission an total of 853,770 ordinary shares for
issuance under the Global Share Incentive Plan (2006), as amended.
The proposed maximum aggregate offering price is $3.6 million. A
copy of the Form S-8 prospectus is available for free at:
http://is.gd/s5uf4Q
About Rosetta
Based in Rehovot, Israel, Rosetta Genomics Ltd. is seeking to
develop and commercialize new diagnostic tests based on a recently
discovered group of genes known as microRNAs. MicroRNAs are
naturally expressed, or produced, using instructions encoded in
DNA and are believed to play an important role in normal function
and in various pathologies. The Company has established a CLIA-
certified laboratory in Philadelphia, which enables the Company to
develop, validate and commercialize its own diagnostic tests
applying its microRNA technology.
Rosetta Genomics disclosed a net loss of US$10.45 million on
US$201,000 of revenue for the year ended Dec. 31, 2012, as
compared with a net loss of US$8.83 million on US$103,000 of
revenue during the prior year. As of June 30, 2013, the
consolidated balance sheets showed $30.28 million in total assets,
$2.34 million in total liabilities and $27.93 million total
shareholders' equity.
Bankruptcy Warning
In its annual report for the year ended Dec. 31, 2012, the Company
said:
"We will require substantial additional funding and expect to
augment our cash balance through financing transactions, including
the issuance of debt or equity securities and further strategic
collaborations. On December 7, 2012, we filed a shelf
registration statement on Form F-3 with the SEC for the issuance
of ordinary shares, various series of debt securities and/or
warrants to purchase any of such securities, either individually
or in units, with a total value of up to $75 million, from time to
time at prices and on terms to be determined at the time of such
offerings. The filing was declared effective on December 19,
2012. However there can be no assurance that we will be able to
obtain adequate levels of additional funding on favorable terms,
if at all. If adequate funds are not available, we may be
required to:
* delay, reduce the scope of or eliminate certain research and
development programs;
* obtain funds through arrangements with collaborators or
others on terms unfavorable to us or that may require us to
relinquish rights to certain technologies or products that we
might otherwise seek to develop or commercialize
independently;
* monetizing certain of our assets;
* pursue merger or acquisition strategies; or
* seek protection under the bankruptcy laws of Israel and the
United States."
RURAL/METRO CORP: Has Final Authority to Obtain $105MM Loans
------------------------------------------------------------
Judge Kevin J. Carey of the U.S. Bankruptcy Court for the District
of Delaware authorized Rural/Metro Corporation, et al., to obtain
a senior secured, super-priority, multiple draw term credit
facility of up to $75 million in aggregate principal amount and a
senior secured, super-priority letter of credit facility
consisting of up to $30 million.
The DIP Administrative Agent and the New Issuing Bank are granted
first priority liens on all unencumbered property of the Debtors,
junior lien on all prepetition senior liens, and first priority,
senior priming lien. All DIP Liens are subject to a carve-out.
In addition to the DIP Liens, all of the DIP Obligations and New
L/C Obligations will constitute allowed super-priority
administrative expense claims, subject only to the Carve-Out.
Carve-out means (i) all unpaid fees required to be paid to the
clerk of the Bankruptcy Court and the Office of the U.S. Trustee;
(ii) fees and expenses of professionals incurred after the
Petition Date and before the delivery of a Carve-Out Trigger
Notice; and (iii) the fees and expenses of professionals in the
aggregate amount not to exceed $2,000,000 incurred after the
delivery of a carve-out trigger notice.
The Final Order provides that the equipment owned by Creekridge
Capital LLC is not property of the estates of the Debtors pursuant
to Section 541 of the Bankruptcy Code.
About Rural/Metro Corporation
Headquartered in Scottsdale, Arizona, Rural/Metro Corporation --
http://www.ruralmetro.com-- is a national provider of 911-
emergency and non-emergency interfacility ambulance services and
private fire protection services, operating in 21 states and
nearly 700 communities.
Rural/Metro Corp. and 59 affiliates sought Chapter 11 protection
on Aug. 4, 2013, before the U.S. Bankruptcy Court for the District
of Delaware.
The Debtors' lead bankruptcy counsel are Matthew A. Feldman, Esq.,
Rachel C. Strickland, Esq., and Daniel Forman, Esq., at Willkie
Farr & Gallagher LLP, in New York. Maris J. Kandestin, Esq., and
Edmon L. Morton, Esq., at Young, Conaway, Stargatt & Taylor, LLP,
in Wilmington, Delaware, serve as the Debtors' local Delaware
counsel.
Alvarez & Marsal Healthcare Industry Group, LLC, and FTI
Consulting, Inc., are the Debtors' financial advisors, while
Lazard Freres & Co. L.L.C. is their investment banker. Donlin,
Recano & Company, Inc., is the Debtors' claims and noticing agent.
The U.S. Trustee has appointed a three-member official committee
of unsecured creditors in the Chapter 11 case.
The Debtors have arranged $75 million of DIP financing from a
group of prepetition lenders led by Credit Suisse AG. An interim
order has allowed the Debtors to access $40 million of the DIP
facility.
RURAL/METRO CORP: Can Continue Using Cash Collateral
----------------------------------------------------
Judge Kevin J. Carey of the U.S. Bankruptcy Court for the District
of Delaware authorized, on a final basis, Rural/Metro Corporation,
et al., to continue to use the cash collateral securing their
prepetition indebtedness.
To the extent of any aggregate postpetition diminution in value of
the prepetition interests of the prepetition lenders, the
prepetition lenders will be granted valid, perfected and
unavoidable senior liens on all of the DIP Collateral and an
allowed superpriority administrative expense claim, subject to a
carve-out.
Carve-out means (i) all unpaid fees required to be paid to the
clerk of the Bankruptcy Court and the Office of the U.S. Trustee;
(ii) fees and expenses of professionals incurred after the
Petition Date and before the delivery of a Carve-Out Trigger
Notice; and (iii) the fees and expenses of professionals in the
aggregate amount not to exceed $2,000,000 incurred after the
delivery of a carve-out trigger notice.
About Rural/Metro Corporation
Headquartered in Scottsdale, Arizona, Rural/Metro Corporation --
http://www.ruralmetro.com-- is a national provider of 911-
emergency and non-emergency interfacility ambulance services and
private fire protection services, operating in 21 states and
nearly 700 communities.
Rural/Metro Corp. and 59 affiliates sought Chapter 11 protection
on Aug. 4, 2013, before the U.S. Bankruptcy Court for the District
of Delaware.
The Debtors' lead bankruptcy counsel are Matthew A. Feldman, Esq.,
Rachel C. Strickland, Esq., and Daniel Forman, Esq., at Willkie
Farr & Gallagher LLP, in New York. Maris J. Kandestin, Esq., and
Edmon L. Morton, Esq., at Young, Conaway, Stargatt & Taylor, LLP,
in Wilmington, Delaware, serve as the Debtors' local Delaware
counsel.
Alvarez & Marsal Healthcare Industry Group, LLC, and FTI
Consulting, Inc., are the Debtors' financial advisors, while
Lazard Freres & Co. L.L.C. is their investment banker. Donlin,
Recano & Company, Inc., is the Debtors' claims and noticing agent.
The U.S. Trustee has appointed a three-member official committee
of unsecured creditors in the Chapter 11 case.
The Debtors have arranged $75 million of DIP financing from a
group of prepetition lenders led by Credit Suisse AG. An interim
order has allowed the Debtors to access $40 million of the DIP
facility.
RURAL/METRO CORP: Creditors' Panel Taps Brown Rudnick as Counsel
----------------------------------------------------------------
The Official Committee of Unsecured Creditors in the Chapter 11
cases of Rural/Metro Corporation, et al., seeks authority from the
U.S. Bankruptcy Court for the District of Delaware to retain Brown
Rudnick LLP as co-counsel.
It is anticipated that the primary attorneys who will represent
the Committee are:
Steven D. Pohl, Esq. -- spohl@brownrudnick.com $990
Thomas H. Montgomery, Esq. -- tmontgomery@brownrudnick.com $650
Jesse N. Garfinkle, Esq. -- jgarfinkle@brownrudnick.com $395
Other Brown Rudnick professionals who will provide legal services
on behalf of the Committee will be paid the following hourly
rates: attorneys at $320 to $1,100; and paraprofessionals at $265
to $370. The firm will also be reimbursed for any necessary out-
of-pocket expenses.
Mr. Pohl assures the Court that his firm is a "disinterested
person" as the term is defined in Section 101(14) of the
Bankruptcy Code and does not represent any interest adverse to the
Committee's.
A hearing on the retention application will be on Oct. 1, 2013, at
11:00 a.m. Objections are due Sept. 17.
About Rural/Metro Corporation
Headquartered in Scottsdale, Arizona, Rural/Metro Corporation --
http://www.ruralmetro.com-- is a national provider of 911-
emergency and non-emergency interfacility ambulance services and
private fire protection services, operating in 21 states and
nearly 700 communities.
Rural/Metro Corp. and 59 affiliates sought Chapter 11 protection
on Aug. 4, 2013, before the U.S. Bankruptcy Court for the District
of Delaware.
The Debtors' lead bankruptcy counsel are Matthew A. Feldman, Esq.,
Rachel C. Strickland, Esq., and Daniel Forman, Esq., at Willkie
Farr & Gallagher LLP, in New York. Maris J. Kandestin, Esq., and
Edmon L. Morton, Esq., at Young, Conaway, Stargatt & Taylor, LLP,
in Wilmington, Delaware, serve as the Debtors' local Delaware
counsel.
Alvarez & Marsal Healthcare Industry Group, LLC, and FTI
Consulting, Inc., are the Debtors' financial advisors, while
Lazard Freres & Co. L.L.C. is their investment banker. Donlin,
Recano & Company, Inc., is the Debtors' claims and noticing agent.
The U.S. Trustee has appointed a three-member official committee
of unsecured creditors in the Chapter 11 case.
The Debtors have arranged $75 million of DIP financing from a
group of prepetition lenders led by Credit Suisse AG. An interim
order has allowed the Debtors to access $40 million of the DIP
facility.
RURAL/METRO CORP: $5.53MM Sale of Scottsdale Property Okayed
------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the bankruptcy judge authorized Rural/Metro Corp.,
this week on the $5.53 million sale of a property in Scottsdale,
Arizona, where the company is based. The buyer intends to develop
the property for a multifamily housing project. The bankruptcy
judge previously approved a plan-support agreement in which the
principal players in the bankruptcy, begun Aug. 4, committed
themselves to the outline of a reorganization plan.
The agreement describes a plan negotiated before bankruptcy
whereby unsecured noteholders are to acquire all of the preferred
stock and 70 percent of the common stock in return for a $135
million equity contribution.
About Rural/Metro Corporation
Headquartered in Scottsdale, Arizona, Rural/Metro Corporation --
http://www.ruralmetro.com-- is a national provider of 911-
emergency and non-emergency interfacility ambulance services and
private fire protection services, operating in 21 states and
nearly 700 communities.
Rural/Metro Corp. and 59 affiliates sought Chapter 11 protection
on Aug. 4, 2013, before the U.S. Bankruptcy Court for the District
of Delaware.
The Debtors' lead bankruptcy counsel are Matthew A. Feldman, Esq.,
Rachel C. Strickland, Esq., and Daniel Forman, Esq., at Willkie
Farr & Gallagher LLP, in New York. Maris J. Kandestin, Esq., and
Edmon L. Morton, Esq., at Young, Conaway, Stargatt & Taylor, LLP,
in Wilmington, Delaware, serve as the Debtors' local Delaware
counsel.
Alvarez & Marsal Healthcare Industry Group, LLC, and FTI
Consulting, Inc., are the Debtors' financial advisors, while
Lazard Freres & Co. L.L.C. is their investment banker. Donlin,
Recano & Company, Inc., is the Debtors' claims and noticing agent.
The U.S. Trustee has appointed a three-member official committee
of unsecured creditors in the Chapter 11 case.
The Debtors have arranged $75 million of DIP financing from a
group of prepetition lenders led by Credit Suisse AG. An interim
order has allowed the Debtors to access $40 million of the DIP
facility.
SEANERGY MARITIME: Shareholders Elect Two Directors
---------------------------------------------------
Seanergy Maritime Holdings Corp. announced the results of the
annual meeting of its shareholders held on Thursday, Sept. 5,
2013, at the Company's executive offices.
At the meeting the following proposals were approved and adopted:
1) the election of Mr. Stamatis Tsantanis and Mr. Elias
Culucundis, as Class A Directors to serve until the 2016 Annual
Meeting of Shareholders, and 2) the appointment of Ernst & Young
(Hellas) Certified Auditors Accountants S.A. as the Company's
Independent Registered Public Accounting Firm for the fiscal year
ending Dec. 31, 2013.
About Seanergy
Athens, Greece-based Seanergy Maritime Holdings Corp. is an
international company providing worldwide seaborne transportation
of dry bulk commodities. The Company owns and operates a fleet
of seven dry bulk vessels that consists of three Handysize, two
Supramax and two Panamax vessels. Its fleet carries a variety of
dry bulk commodities, including coal, iron ore, and grains, as
well as bauxite, phosphate, fertilizer and steel products.
In its audit report on the consolidated financial statements for
the year ended Dec. 31, 2012, Ernst & Young (Hellas) Certified
Auditors Accountants S.A., in Athens, Greece, expressed
substantial doubt about Seanergy Maritime's ability to continue
as a going concern. The independent auditors noted that the
Company has not complied with the principal and interest
repayment schedule and with certain covenants of its loan
agreements, which in turn gives the lenders the right to call the
debt. "In addition, the Company has a working capital deficit,
recurring losses from operations, accumulated deficit and
inability to generate sufficient cash flow to meet its
obligations and sustain its operations."
The Company reported a net loss of US$193.8 million on US$55.6
million of net vessel revenue in 2012, compared with a net loss
of US$197.8 million on US$104.1 million of net vessel revenue in
2011. As of March 31, 2013, the Company had US$93.01 million in
total assets, US$193.56 million in total liabilities and a
US$100.54 million total deficit.
SEGA BIOFUELS: Wood Pellet Maker Files Ch.11 in Waycross, Georgia
-----------------------------------------------------------------
Sega Biofuels LLC, the owner of a wood-pellet plant in Nahunta,
Georgia, filed a petition for Chapter 11 protection (Bankr. S.D.
Ga. 13-50694) on Sept. 11 in Waycross, Georgia. Bill Rochelle,
the bankruptcy columnist for Bloomberg News, reports that the
company listed assets worth $10.6 million and debt totaling
$13.7 million. The principal liability is a $11.5 million mortgage
owing to Heritage Bank from Hinesville, Georgia. Revenue this
year is $7.1 million, according to a court filing.
SIGNATURE APPAREL: Iconix Loses Bid to Disqualify Olshan Firm
-------------------------------------------------------------
Bankruptcy Judge James M. Peck tossed a request by Studio IP
Holdings, LLC and Iconix Brand Group, Inc. to disqualify Olshan
Frome Wolosky LLP, counsel for Signature Apparel Group, LLC.
Judge Peck said the request is a "lightweight litigation maneuver
-- a procedural tangent in this adversary proceeding that has
imposed wasteful burdens on other parties and the Court." The
Motion lacks merit and is denied, Judge Peck said.
Iconix asserts that Olshan has a conflict resulting from its
serial representations of (i) three petitioning creditors who
retained Olshan to commence an involuntary bankruptcy case against
Signature, (ii) the Official Committee of Unsecured Creditors that
was appointed during the Signature bankruptcy case and (iii)
Anthony Labrosciano, the individual who is empowered to act on
Signature's behalf in this litigation. The Motion also contends
that one of Olshan's partners, Michael Fox, will be a witness at
trial. Olshan has opposed the Motion with a supporting
declaration from Mr. Fox. A hearing on the Motion was held on
June 11, 2013. At the conclusion of that hearing, the Court
requested additional submissions from the parties (including a
statement from the Responsible Person) and reserved decision.
Judge Peck said the Motion to Disqualify does not come close to
establishing that disqualification is appropriate. It alleges
cause in the most general way but fails to connect the dots. The
multiple representations of the Petitioning Creditors, the
Committee and the Responsible Person are sequential rather than
concurrent and do not give rise to any disqualifying conflict of
interest. Additionally, Mr. Fox has confirmed in his declaration
that he will not be a witness at trial. Thus, no grounds have been
shown for disqualification of the Olshan firm.
Three creditors owed a combined $14.8 million filed an involuntary
Chapter 7 petition against Signature Apparel Group LLC. (Bankr.
N.D. Ga. 09-83407), on Sept. 4, 2009. Signature, based in New
York, calls itself a "multifaceted apparel company." It owns the
Fetish trademark and licenses Rocawear Juniors and Artful Dodger,
according to its Web site.
An order for relief was entered, the case was converted to a case
under chapter 11, and Olshan was retained as counsel to the
Committee. The firm's retention application included a supporting
declaration submitted by Mr. Fox that disclosed Olshan's prior
representation of the Petitioning Creditors.
The Committee was active in the Signature case and proposed a plan
of liquidation that was confirmed on July 1, 2010 and became
effective as of August 5, 2010. The liquidating plan contemplated
that the Responsible Person would pursue litigation claims for the
benefit of Signature's unsecured creditors.
Consistent with the liquidating plan, Olshan, as counsel for the
Responsible Person, brought the adversary proceeding against ROC
Fashions, LLC; RVC Enterprises, LLC; Ruben Azrak; Victor Azrak;
and Charles Azrak. The complaint alleged wrongful termination and
transfer of rights under an existing licensing agreement between
Signature and Iconix -- Rocawear License -- and challenged
payments made by the ROC Defendants to former executives of
Signature, Joseph Laurita and Christopher Laurita. The claims
include (i) aiding and abetting breach of fiduciary duty, (ii)
civil conspiracy, (iii) conversion, (iv) unjust enrichment, and
(v) constructive trust. ROC Fashions named Iconix as a third-
party defendant.
Signature also commenced a separate adversary proceeding against
the Laurita Brothers alleging misappropriation and dissipation of
corporate assets. Signature recently amended the ROC Complaint to
combine claims from the Laurita Adversary Proceeding and the ROC
Adversary Proceeding and to make direct claims against Iconix and
related parties to recover damages associated with the loss of the
Rocawear License. Signature complains that it was stripped of
valuable contract rights as a consequence of terminating the
Rocawear License and entering into a new license for the same
branded goods with ROC Fashions.
The case is, SIGNATURE APPAREL GROUP LLC, Plaintiff, v. JOESEPH
LAURITA, CHRISTOPHER LAURITA, NEW STAR GROUP, LLC, ROC FASHIONS,
LLC, RVC ENTERPRISES, LLC, RUBEN AZRAK, VICTOR AZRAK AND CHARLES
AZRAK, ICONIX BRAND GROUP, INC., STUDIO IP HOLDINGS, LLC,
Defendants; and ROC FASHIONS, LLC, Third-Party Plaintiff, v.
STUDIO IP HOLDINGS, LLC, Third-Party Defendant, Adv. Proc. No.
11-02800 (Bankr. S.D.N.Y.). A copy of Judge Peck's Sept. 10, 2013
Memorandum Opinion is available at http://is.gd/r9gasCfrom
Leagle.com.
Harris N. Cogan, Esq., and Andrew B. Eckstein, Esq. --
HNCogan@BlankRome.com and AEckstein@BlankRome.com -- at BLANK ROME
LLP, argue for Studio IP Holdings, LLC and Iconix Brand Group,
Inc.
George R. Hirsch, Esq., at SILLS CUMMIS & GROSS P.C., argues for
ROC Fashions, LLC, RVC Enterprises, LLC, Ruben Azrak, Victor
Azrak, and Charles Azrak.
Kyle C. Bisceglie, Esq., and Ellen V. Holloman, Esq. --
kbisceglie@olshanlaw.com and eholloman@olshanlaw.com -- at OLSHAN
FROME WOLOSKY LLP, argue for the Plaintiff.
SINCLAIR BROADCAST: FMR LLC Owns 10.4% of Class A Shares
--------------------------------------------------------
In a Schedule 13G filing with the U.S. Securities and Exchange
Commission on Sept. 9, 2013, FMR LLC and Edward C. Johnson 3d
disclosed that they beneficially owned 7,701,712 shares of
Class A common stock of Sinclair Broadcast Group Incorporated
representing 10.470 percent of the shares outstanding. A copy of
the regulatory filing is available at http://is.gd/JgpApS
About Sinclair Broadcast
Based in Baltimore, Maryland, Sinclair Broadcast Group, Inc.
(Nasdaq: SBGI) -- http://www.sbgi.net/-- one of the largest and
most diversified television broadcasting companies, currently owns
and operates, programs or provides sales services to 58 television
stations in 35 markets. The Company's television group reaches
roughly 22% of U.S. television households and includes FOX,
ABC, CBS, NBC, MNT, and CW affiliates.
"Any insolvency or bankruptcy proceeding relating to Cunningham,
one of our LMA partners, would cause a default and potential
acceleration under the Bank Credit Agreement and could,
potentially, result in Cunningham's rejection of our seven LMAs
with Cunningham, which would negatively affect our financial
condition and results of operations," the Company said in its
annual report for the period ended Dec. 31, 2012.
As of June 30, 2013, the Company had $3.34 billion in total
assets, $2.95 billion in total liabilities and $386 million in
total stockholders' equity.
* * *
As reported by the TCR on Feb. 24, 2011, Standard & Poor's Ratings
Services raised its corporate credit rating on Sinclair to 'BB-'
from 'B+'. The rating outlook is stable. "The 'BB-' rating on
Sinclair reflects S&P's expectation that the company could keep
its lease-adjusted debt to EBITDA below historical levels
throughout the election cycle, absent a reversal of economic
growth, meaningful debt-financed acquisitions, or significant
shareholder-favoring measures," explained Standard & Poor's credit
analyst Deborah Kinzer.
In September 2010, Moody's raised its ratings for Sinclair
Broadcast and subsidiary Sinclair Television Group, including the
Corporate Family Rating and Probability-of-Default Rating, each to
Ba3 from B1, and the ratings for individual debt instruments.
Moody's also assigned a B2 (LGD 5, 87%) rating to the proposed
$250 million issuance of Senior Unsecured Notes due 2018 by STG.
The Speculative Grade Liquidity Rating remains unchanged at SGL-2.
The rating outlook is now stable.
SHAMROCK-HOSTMARK: Can Use Cash Collateral Thru Sept. 30
--------------------------------------------------------
Judge Jacqueline Cox entered a ninth interim order allowing
Shamrock-Hostmark Princeton Hotel, LLC, to use cash collateral of
General Electric Capital Corporation through Sept. 30, 2013 in
accordance with a prepared budget.
The cash collateral will be used to pay expenses of the Hotel,
including the Hotel's employees, Hostmark Investors, LP, under its
Management Agreement for postpetition services, postpetition
vendors, insurance and taxes.
A copy of the September 2013 budget is available for free at:
http://bankrupt.com/misc/SHAMROCKHOSTMARK_BudgetSept2013.pdf
As adequate protection, the Debtor will continue operating the
Hotel and using cash collateral to pay operating expenses of the
Hotel. As additional adequate protection, the Lender is granted
valid, binding, enforceable, and duly perfected security interests
in and liens upon all of the currently owned or acquired property
and assets of the Debtor.
A status hearing on the cash collateral motion is scheduled for
Sept. 25, 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.
SCICOM DATA: Gets OK to Hire Lighthouse Mgmt. and Shenehon Co.
--------------------------------------------------------------
SCICOM Data Services, Ltd., obtained bankruptcy court for approval
to hire:
* Lighthouse Management Group, Inc., as financial consultant;
and
* Shenehon Company as valuation expert.
As reported in the Troubled Company Reporter on September 3, 2013,
Lighthouse will assist the Debtor as a business and financial
consultant during the case, mainly by advising on and facilitating
the sale of the Debtor's business. The Debtor proposes that
Lighthouse's payment be on an hourly rate plus costs basis. The
Debtor has paid Lighthouse a retainer of $25,000.
Meanwhile, Shenehon will prepare a report on whether the proposed
sale of the Debtor's assets is for fair and reasonable
consideration. Shenehon has indicated that the hourly rates of
its professionals for valuation work range from $175 to $360, and
has estimated that its total hourly fees and cost will be between
$13,000 and $15,000. Shenehon has indicated that the hourly rates
of its professionals for trial preparation/testimony work range
from $275 to $450. Shenehon has received a pre-petition deposit
of $15,000.
About SCICOM
Headquartered in Minnetonka, Minnesota, SCICOM provides data
processing solutions that transform critical data into effective
customer communications, on any platform, at any time. SCICOM's
business focus has been employee benefits, retirement and
investment services, and statement processing.
SCICOM Data Services, Ltd., filed a Chapter 11 petition (Bankr. D.
Minn. Case No. 13-43894) on Aug. 6, 2013, in Minneapolis,
Minnesota, with a deal to sell assets to Venture Solutions without
an auction.
Arden Hills, MN-based Venture Solutions is a provider of print and
digital transactional Communications and is a subsidiary of Taylor
Corporation.
Judge Michael E. Ridgway presides over the case. The Debtor has
tapped Fredrikson & Byron, P.A., as counsel; Lighthouse Management
Group, Inc., as financial consultant; and Shenehon Company as
valuation expert.
The Debtor disclosed $13,254,128 in assets and $17,801,787 in
liabilities as of the Chapter 11 filing. The petition was signed
by Timothy L. Johnson, senior vice president and CFO.
SMIC LTD: Bankr. Court Issues Findings in Corral Group Suit
-----------------------------------------------------------
Bankruptcy Judge D. Michael Lynn entered findings of fact and
conclusions of law in the adversary complaint CORRAL GROUP, LP,
PLAINTIFF, v. SMIC, LTD., ET AL., DEFENDANTS, Adv. Proc. No.
10-04054-DML (Bankr. N.D. Tex.).
The complaint has been bifurcated so that only the issue of
liability, and not the issue of damages, is currently before the
court. On review, Judge Lynn found that:
-- Selling Defendants SMIC Ltd., Winterstone Management Inc.,
JH&BC Corp., 13:30 Corp., D. Ronald Allen, and Arnold Pent
engaged in conduct that was "less than admirable," but as a
matter of law they did not commit negligence.
-- Title Defendants Stewart Title of North Texas, Inc. and Vicki
Smith are liable for breach of the fiduciary duty of loyalty,
but not the fiduciary duty of disclosure.
-- Title Defendants breached a duty owed to Plaintiff, they are
also liable for negligence.
-- Both Selling Defendants and Title Defendants are liable for
civil conspiracy.
Corral Group and SMIC entered into a sale contract in July 2004,
where SMIC promised to sell about 2.53 acres of real property in
Texas to Corral Group. The Contract has a flexible closing date.
Under the transaction, Pent acted as principal broker for SMIC;
Paredes acted as cooperating broker for Corral Group; and Stewart
and Smith served as escrow agent.
The parties had trouble closing the transaction. Subsequently, in
early 2005, the Selling Defendants entered into a sale agreement
to sell both the Property and the Adjacent Tract to N3
Development, Ltd., and Highway 199 & Charbonneau Partners, Ltd.
Corral Group was not a party to the second transaction. No one
informed Corral Group of the second transaction.
A copy of Judge Walrath's Aug. 12, 2013 Findings of Fact and
Conclusions of Law is available at http://is.gd/V7yLbbfrom
Leagle.com.
SPRINT CORP: Lenders Waive Default of Leverage Compliance Test
--------------------------------------------------------------
Sprint Corporation on Sept. 11 announced the closing of its
previously announced offering of $2.25 billion aggregate principal
amount of 7.250% Notes due 2021 and $4.25 billion aggregate
principal amount of 7.875% Notes due 2023, each guaranteed on a
senior unsecured basis by Sprint Communications, Inc.
The company intends to use the net proceeds from the offering of
the Notes for general corporate purposes, which may include, among
other things, redemptions or service requirements of outstanding
debt and network expansion and modernization.
In addition, on September 9, 2013, Sprint Communications, Inc.
entered into a waiver pursuant to which the lenders waived until
December 31, 2013 any default of the quarterly leverage compliance
test under Sprint Communications' revolving credit facility that
may otherwise result from the issuance of the Notes. On September
10, 2013, Sprint Communications also entered into a similar waiver
under its Export Development Canada loan agreement. Sprint has
commenced discussions with the lenders under the secured equipment
facility to receive a similar waiver and believes it can reach an
agreement with these lenders, however, there can be no assurances
that such waiver will be obtained.
The Notes and the guarantees related to the Notes have not been
registered under the Securities Act of 1933, as amended, or the
securities laws of any other place and may not be offered or sold
in the United States absent registration or an applicable
exemption therefrom. The Notes will be offered only to qualified
institutional buyers under Rule 144A and to persons outside the
United States under Regulation S.
About Sprint Corp.
Sprint Corporation is a United States telecommunications holding
company that provides wireless services and is also a major global
Internet carrier.
* * *
In September 2013, Standard & Poor's Ratings Services said it
assigned its 'BB-' corporate credit rating to Sprint Corp., a
newly formed parent entity of the Overland Park, Kan.-based
wireless telecommunications carrier. At the same time, S&P
affirmed the 'BB-' corporate credit rating on Sprint Nextel Corp.,
which was renamed Sprint Communications Inc. and is a wholly owned
subsidiary of Sprint Corp. The outlook is stable. S&P also
affirmed all issue-level ratings at Sprint Communications as well
as at subsidiaries Sprint Capital Corp., iPCS, and Clearwire Corp.
STEREOTAXIS INC: Franklin Resources Holds 4.6% Equity Stake
-----------------------------------------------------------
In an amended Schedule 13G filing with the U.S. Securities and
Exchange Commission, Franklin Resources, Inc., and its affiliates
disclosed that as of Aug. 31, 2013, they beneficially owned
673,002 shares of common stock of Stereotaxis, Inc., representing
4.6 percent of the shares outstanding. Franklin Resources
previously reported beneficial ownership of 1,636,640 common
shares or 19.2 percent equity stake at Dec. 31, 2012. A copy of
the regulatory filing is available at http://is.gd/2q3SNM
About Stereotaxis
Based in St. Louis, Mo., Stereotaxis, Inc., designs, manufactures
and markets the Epoch Solution, which is an advanced remote
robotic navigation system for use in a hospital's interventional
surgical suite, or "interventional lab", that the Company believes
revolutionizes the treatment of arrhythmias and coronary artery
disease by enabling enhanced safety, efficiency and efficacy for
catheter-based, or interventional, procedures.
For the year ended Dec. 31, 2011, Ernst & Young LLP, in St. Louis,
Missouri, expressed substantial doubt about Stereotaxis' ability
to continue as a going concern. The independent auditors noted
that the Company has incurred recurring operating losses and has a
working capital deficiency.
Stereotaxis incurred a net loss of $9.23 million in 2012 as
compared with a net loss of $32.03 million in 2011. The Company's
balance sheet at June 30, 2013, showed $23.99 million in total
assets, $49.63 million in total liabilities and a $25.63 million
total stockholders' deficit.
SYNTAX-BRILLIAN: Sharp Resolves LCD Price-Fixing Claims
-------------------------------------------------------
Law360 reported that Sharp Corp. has put an end to antitrust
litigation brought by bankrupt Syntax-Brillian Corp.'s successor
in multidistrict litigation over alleged price-fixing of liquid
crystal display panels, according to documents filed in California
federal court on Sept. 10.
According to the report, U.S. District Judge Susan Illston
approved a stipulation releasing Sharp from a case that targeted
it, LG Display Co. Ltd., Hitachi Ltd., Samsung Electronics America
Inc. and other companies with allegations that they conspired to
fix prices on LCD panels.
The case is In Re TFT-LCD (Flat Panel) Antitrust Litigation, Case
No. 3:07-md-01827 (N.D. Calif.) before Judge Susan Illston.
About Syntax-Brillian
Based in Tempe, Arizona, Syntax-Brillian Corporation manufactured
and marketed LCD HDTVs, digital cameras, and consumer electronics
products including Olevia(TM) brand high-definition widescreen LCD
televisions and Vivitar brand digital still and video cameras.
Syntax-Brillian was the sole shareholder of California-based
Vivitar Corporation.
The Company and two of its affiliates -- Syntax-Brillian SPE,
Inc., and Syntax Groups Corp. -- filed for Chapter 11 protection
on July 8, 2008 (Bankr. D. Del. Lead Case No.08-11407. Lawyers at
Greenberg Traurig LLP represented the Debtors as counsel. Five
members composed the official committee of unsecured creditors.
Pepper Hamilton, LLP, represented the Committee as counsel. Epiq
Bankruptcy Solutions, LLC, served as the Debtors' balloting,
notice, and claims agent. When the Debtors filed for protection
against their creditors, they disclosed total assets of
$175,714,000 and total debts of $259,389,000.
The Bankruptcy Court confirmed the Debtors' Joint Chapter 11
Liquidation Plan in an order dated July 6, 2009. Under the Plan,
general unsecured claims were to received pro rata distributions
from a liquidating trust after payment of the trust's expenses and
a "liquidating trust funding reimbursement." Holders of allowed
prepetition credit facility claims were to receive their pro rata
distributions from a lender trust, after payment in full of
allowed DIP facility claims. A full-text copy of the Debtors' 2nd
amended Chapter 11 liquidating plan is available at:
http://bankrupt.com/misc/syntax-brillian2ndamendedplan.pdf
The SB Liquidation Trust is represented by David M. Fournier,
Esq., and Evelyn J. Meltzer, Esq., at Pepper Hamilton LLP; and
Allan B. Diamond, Esq., Andrea L. Kim, Esq., Eric D. Madden, Esq.,
and Michael J. Yoder, Esq., at Diamond McCarthy LLP.
T SORRENTO: Fourth Amended Chapter 11 Plan Declared Effective
-------------------------------------------------------------
Hudson M. Jobe, Esq., at Quilling, Selander, Lownds, Winslett &
Moser, P.C., on behalf of T Sorrento, Inc., notified the U.S.
Bankruptcy Court for the Northern District of Texas in papers
filed Sept. 9 that the Effective Date of the Fourth Amended
Chapter 11 Plan filed by T Sorrento, Inc., and Transcontinental
Realty Investors, Inc., dated Aug. 1, 2013, occurred on Sept. 2,
2013.
As reported in the Troubled Company Reporter on Aug. 22, 2013,
the Bankruptcy Court confirmed the Fourth Amended Plan, which does
not adversely change the treatment of creditors voting in favor of
the Original Chapter 11 Plan, other than RMR Investments, Inc.,
and West Orient Investments, Inc. The Original Chapter 11 Plan
was filed April 3, 2013.
Pursuant to the terms of the Fourth Amended Plan, the Debtor, TCI,
and RMR agree that the amount of the Allowed Class 2 Claim of RMR
- Casino is $4,244,495. The Allowed Class 2 Claim will accrue
interest after the Effective Date at the annual rate of 7% in year
one, 7.5% in year two, and 8% in year three, in each case using
simple interest. Beginning on the Effective Date, the Debtor will
pay interest on the first day of each month at the annual rate of
5% using simple interest plus an additional $12,500 to be applied
to the principal balance. The unpaid balance of the Allowed Class
2 Claim together will all accrued and unpaid interest and any
other fees assessed to the Allowed Class 2 Claim, will be due and
owing on the 36th month following the Effective Date.
The Debtor, TCI, and RMR agree that the amount of the Allowed
Class 3 Claim of RMR - Stanley is $1,732,589. The Allowed Class 3
Claim will accrue interest at the annual rate of 7% between
Sept. 1, 2013, and the Effective Date, using simple interest, and
no further interest, fees, or other expenses. The Allowed Class 3
Claim will accrue interest after the Effective Date at the annual
rate of 7% in year one, 7.5% in year two, and 8% in year three, in
each case using simple interest. Beginning on the Effective Date,
the Debtor will pay interest on the first day of each month at the
annual rate of 5% using simple interest plus an additional $5,000
to be applied to the principal balance. The unpaid balance of the
Allowed Class 3 Claim together will all accrued and unpaid
interest and any other fees assessed to the Allowed Class 3 Claim,
will be due and owing on the 36th month following the Effective
Date.
The Debtor, TCI, and RMR agree that the Class 4 Claim of RMR -
Galleria will be allowed as two separate notes to be executed by
the Debtor, the first Note being in the principal amount of
$1,100,000 and the second Note being in the principal amount of
$900,000. The Notes will be non-recourse and accrue interest
after the Effective Date at the annual rate of 7% in year one,
7.5% in year two, and 8% in year three, in each case using simple
interest. The Debtor will make additional payments of $50,000
each per month on the Effective Date and the first day of the five
months following the Effective Date and each payment will be
applied to the principal balances as follows: $27,500 to Galleria
Note - Casino and $22,500 to Galleria Note - Stanley. The unpaid
balance of the Notes, together with all accrued and unpaid
interest and any other fees assessed to the Notes, will be due and
owing on the 36th month following the Effective Date.
The Debtor, TCI, and West Orient agree that the Class 5 Claim of
West Orient - Casino is $156,199.97. On the Effective Date, West
Orient will apply the Reserve to the Allowed Class 5 Claim, and
the Debtor will satisfy any remaining amounts by six equal
payments on the first day of the 7th through 12th months following
the Effective Date. The Allowed Class 5 Claim will not accrue
interest, fees, or any other amounts.
The Debtor, TCI, and West Orient agree that the Class 6 Claim of
West Orient - Stanley is $45,840.47. On the Effective Date, West
Orient will apply any Reserve remaining after the application to
the Allowed Class 5 Claim to the Allowed Class 6 Claim, and the
Debtor and Debtor will satisfy any remaining amounts by 6 equal
payments on the first day of the 7th through 12th months following
the effective Date. The Allowed Class 6 Claim will not accrue
interest, fees, or any other amounts.
Holders of Allowed Class 7 General Unsecured Claims will be
entitled accrue interest from the Petition Date until paid in full
at the Interest Rate. Claimants will receive 50% of their Allowed
Claim with interest on or before the later of: (a) 30 days
following the Effective Date, or (b) 30 days following the entry
of a final order allowing such claim. The Claimants will receive
the remaining 50% of their allowed claim with interest on the
first day of the 6th month following confirmation.
Holders of Allowed Class 8 Interests will retain their prepetition
interest in the Debtor and will not receive any distributions on
account of those Interests until the Debtor has performed its
obligations to Classes 1 - 7.
A black-lined version of the Fourth Amended Plan, dated Aug. 1,
2013, is available for free at:
http://bankrupt.com/misc/tsorrento.doc150.pdf
Hudson M. Jobe, Esq., at QUILLING, SELANDER, LOWNDS, WINSLETT &
MOSER, P.C., in Dallas, Texas, represents the Debtor.
C. Gregory Shamoun, Esq., and Dennis M Holmgren, Esq., at Shamoun
& Norman LLP, in Dallas, Texas, represent Transcontinental Realty.
About T Sorrento
Clark, Nevada-based T Sorrento, Inc., is a wholly owned subsidiary
of Transcontinental Realty Investors, Inc., a Nevada corporation.
T Sorrento filed for a Chapter 11 petition (Bankr. D. Nev. Case
No. 12-13907) in Las Vegas on April 2, 2012. At the behest of RMR
Investments, Inc., the Nevada Bankruptcy Court transferred the
venue of the case to the Northern District of Texas, Dallas
Division, as the Debtor's principal office and principal place of
business are located in Dallas and the mailing address for each of
the Debtor's officers is also located in Dallas, Texas. The case
was transferred to the Northern District of Texas by a June 27,
2012 court order. Dallas Bankruptcy Judge Barbara J. Houser
oversees the case.
T Sorrento disclosed assets of $17.4 million and debts of
$5.4 million in its schedules. The Debtor's Schedule A states it
owns six lots (about 30 acres) at "Mira Lago" in Farmers Branch,
two lots (24 acres) at Valley Branch Circle in Farmers Branch, 5.7
acres in McKinney and less than an acre in Irving. The total
value of the real property is stated as $17,442,754. The Debtor
has no personal property. The Debtor disclosed it has secured
debt held by two entities totaling $5,121,368. Property taxes
owed total $90,000. Six unsecured creditors are owed a total of
$235,203.
Lender RMR Investments is represented by Mark E. Andrews, Esq.,
and Stephen K. Lecholop II, Esq., at Cox Smith Matthews
Incorporated.
T.M. REAL ESTATE: TD Bank Seeks Dismissal of Chapter 11 Case
------------------------------------------------------------
TD Bank, N.A. is asking the U.S. Bankruptcy Court:
-- to dismiss the chapter 11 case of TM Real Estate Holding
LLC, or
-- in alternative, to grant relief from automatic stay; or
-- in alternative, to condition the continuation of the
automatic stay upon adequate protection of TD Bank's
interest in property of the estate; and
-- to designate the Debtor as a "single asset real estate"
entity.
According to TD Bank, the Debtor is a single asset real estate
entity that commenced chapter 11 case in June 28, 2013, to stay a
mortgage foreclosure sale of its only asset, a parcel of vacant
land in Staten Island. The sale would have taken place on July
10, 2013.
TD Bank said the Debtor has no business beyond its ownership of
Lot 80, and its schedules list only two creditors: (i) TD Bank,
for this judgment claim in the amount of $10,0515, plus interest
and (ii) the city of New York, for unpaid real estate taxes, not
including $118,424 of taxes that became due after the filing of
this case.
TD Bank also said the Debtor has no cash, no equity in Lot 80, and
no ability to organize. This case benefits only the Debtor's
principals who also have guaranteed the mortgage indebtedness of
three separate debtors that simultaneously filed their own chapter
11 case, which they are seeking to have jointly administered in
this case.
This case has no legitimate reorganizational purpose.
Attorneys for the TD Bank can be reached at:
Michael J. Venditto, Esq.
Chrystal A. Puleo, Esq.
REED SMITH
599 Lexington Avenue
New York, NY 10022
Tel: 212-521-5400
Fax: 212-521-5450
E-mail: capuleo@reedsmith.com
About TM Real Estate Holding LLC
TM Real Estate Holding LLC filed a Chapter 11 petition (Bankr.
E.D.N.Y. Case No. 13-44046) on June 28, 2013. Judge Carla E.
Craig presides over the case. The Debtor scheduled assets of
$10,900,000 and liabilities of $10,497,264. The petition was
signed by John Noce, manager.
Fox Rothschild LLP serves as the Debtor's general bankruptcy
counsel.
THQ INC: Tattoo Artist Appeals Slashed IP Claim in Bankruptcy
-------------------------------------------------------------
Law360 reported that the tattoo artist who sued bankrupt video
game maker THQ Inc. over the image of a fighter he inked being
used in mixed martial arts games filed a notice of appeal Sept. 10
of the Delaware bankruptcy judge's decision shrinking the
potential value of his originally $4 million claim to $22,500.
The attorney for Arizona-based tattoo artist Christopher Escobedo
told Law360 that the appeal was filed in the U.S. District Court
for the District of Delaware.
About THQ Inc.
THQ Inc. (NASDAQ: THQI) -- http://www.thq.com/-- was a worldwide
developer and publisher of interactive entertainment software.
The Company developed its products for all popular game systems,
personal computers, wireless devices and the Internet.
Headquartered in Los Angeles, California, THQ sold product through
its network of offices located throughout North America and
Europe.
THQ Inc. and its affiliates sought Chapter 11 protection (Bankr.
D. Del. Lead Case No. 12-13398) on Dec. 19, 2012. Michael R.
Nestor, M. Blake Cleary and Jaime Luton Chapman at Young Conaway
Stargatt & Taylor, LLP; and Oscar Garza at Gibson, Dunn & Crutcher
LLP represent the Debtors. FTI Consulting and Centerview Partners
LLC are the financial advisors. Kurtzman Carson Consultants is
the claims and notice agent.
Before the bankruptcy, Clearlake signed a contract to buy Agoura
THQ for a price said to be worth $60 million. After a 22-hour
auction with 10 bidders, the top offers brought a combined $72
million from several buyers who will split up the company. Judge
Walrath approved the sales in January. Some of the assets didn't
sell, including properties the company said could be worth about
$29 million.
Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed five
persons to serve in the Official Committee of Unsecured Creditors.
The Committee tapped Houlihan Lokey Capital as its financial
advisor and investment banker, Landis Rath & Cobb as co-counsel
and Andrews Kurth as counsel.
THQ INC: Assets Put Up for Live Auction; Sept. 17 Bid Deadline Set
------------------------------------------------------------------
Bidding is now underway on a wide range of audiovisual production
and computer equipment, video editing systems, office furniture
and other assets formerly owned by entertainment industry firms
Superfad and THQ in an online sale being conducted by Tiger
Group's Remarketing Services Division.
Superfad, a brand-driven design and live action design studio with
locations in Los Angeles, Seattle, and New York, ceased operations
following a decision by the four partners to dissolve the company.
THQ, an Agoura Hills, Calif.-based developer and publisher of
interactive entertainment software, filed for Chapter 11
bankruptcy in December 2012.
Bidding on the former assets of both companies at
http://www.SoldTiger.comwill close in rapid succession, live
auction style, on September 17 at 10:30 a.m. (PT). A preview will
be held at 13565 Larwin Circle, Santa Fe Springs, Calif. on
September 16, from 10:00 a.m. to 4:00 p.m.
"This auction offers tremendous opportunities for companies and
individuals interested in high-end graphics workstations, Apple
computer systems, Think Pad notebooks, Professional audio/video
equipment, and contemporary furniture at auction prices," said
Jeff Tanenbaum, President of Tiger's Remarketing Services
Division.
The audiovisual production equipment includes a Canon 5D Mark llI
and other DSLR cameras with a variety of lenses, Panasonic P2 &
Black Magic Cinema Digital Video Cameras and Arri Lighting
Equipment. Available video editing systems include (2) Autodesk
Flame Systems, as well as significant server, network and storage
support systems. Computer equipment to be sold includes more than
(100) Mac Pro, iMac, Mac Mini and MacBook Pro Laptops, as well as
(50) i7 & i5 Lenovo Think Pad notebook computers. Additionally,
furniture, furnishing and support items will be sold.
Among the pieces of office furniture being auctioned are more than
80 Herman Miller Aeron Chairs, as well as couches, tables, lamps,
and desks.
For a full description of the inventory and other auction details,
visit: http://www.SoldTiger.com
About Tiger Group
Tiger Group -- http://www.TigerGroup.com-- provides asset
valuation, advisory and disposition services to a broad range of
retail, wholesale, and industrial clients. With over 40 years of
experience and significant financial backing, Tiger offers a
uniquely nimble combination of expertise, innovation and financial
resources to drive results. Tiger's seasoned professionals help
clients identify the underlying value of assets, monitor asset
risk factors and, when needed, provide capital or convert assets
to capital quickly and decisively. Tiger's collaborative,
straight-forward approach is the foundation for its many long-term
'partner' relationships and decades of success. Tiger operates
main offices in Boston, Los Angeles and New York.
About THQ Inc.
THQ Inc. (NASDAQ: THQI) -- http://www.thq.com/-- was a worldwide
developer and publisher of interactive entertainment software.
The Company developed its products for all popular game systems,
personal computers, wireless devices and the Internet.
Headquartered in Los Angeles, California, THQ sold product through
its network of offices located throughout North America and
Europe.
THQ Inc. and its affiliates sought Chapter 11 protection (Bankr.
D. Del. Lead Case No. 12-13398) on Dec. 19, 2012. Michael R.
Nestor, M. Blake Cleary and Jaime Luton Chapman at Young Conaway
Stargatt & Taylor, LLP; and Oscar Garza at Gibson, Dunn & Crutcher
LLP represent the Debtors. FTI Consulting and Centerview Partners
LLC are the financial advisors. Kurtzman Carson Consultants is
the claims and notice agent.
Before the bankruptcy, Clearlake signed a contract to buy Agoura
THQ for a price said to be worth $60 million. After a 22-hour
auction with 10 bidders, the top offers brought a combined $72
million from several buyers who will split up the company. Judge
Walrath approved the sales in January. Some of the assets didn't
sell, including properties the company said could be worth about
$29 million.
Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed five
persons to serve in the Official Committee of Unsecured Creditors.
The Committee tapped Houlihan Lokey Capital as its financial
advisor and investment banker, Landis Rath & Cobb as co-counsel
and Andrews Kurth as counsel.
TITAN CRUISE: Insurer Didn't Act in Bad Faith on Lender Claims
--------------------------------------------------------------
A Louisiana federal district court issued Findings of Fact and
Conclusions of Law in the civil action captioned as, FIRST
AMERICAN BANK, Plaintiff, v. FIRST AMERICAN TRANSPORTATION TITLE
INSURANCE CO., SECTION "E", Defendant. APPLIES TO: ALL CASE, Civil
Action No. 06-10961, C/W NO. 08-1682.
The complaint is a breach of contract lawsuit related to vessel
title insurance coverage for lenders First American Bank obtained
from First American Transportation Title Insurance Co (FATTIC) for
shipping vessels owned by Titan Cruise Lines, Inc.
The Bank loaned Titan up to $18 million in August 2004. As
collateral, the Bank was to receive preferred ship mortgages on
three of Titan's vessels. By October 2004, the Bank insured the
vessels with FATTIC. By 2004 yearend, Titan filed for bankruptcy.
Under the complaint, the Bank accused FATTIC for refusing to pay
obligations for losses the Bank suffered as a result of certain
liens asserted agains the Vessels.
In court findings dated Aug. 5, 2013, District Judge Susie Morgan
held, among other things, that:
-- FATTIC still owes the Bank $400,772 in connection with the
Sapphire Express Vessel pursuant to the subject Vessel
Policy;
-- FATTIC is not liable to the Bank for vessel preservation
costs or professional services fees; and
-- FATTIC's handling of the Bank's Claims was not in bad faith.
A copy of the District Court's Aug. 5, 2013 Findings is available
at http://is.gd/fEebydfrom Leagle.com.
Plaintiff First American Bank is represented by John M. Landis,
Esq. -- jlandis@stonepigman.com -- Andrew D. Mendez, Esq. --
amendez@stonepigman.com -- and Phillip A. Wittmann, Esq. --
pwittman@stonepigman.com -- of STONE, PIGMAN, WALTHER, WITTMANN,
LLC.
Defendant First American Transportation Title Insurance Co.,
Defendant is represented by Edward Francis LeBreton, III, Esq. --
Lebreton@frfirm.com -- Mat M. Gray, III, Esq. -- mgray@frfirm.com
-- and Norman Charles Sullivan, Jr. -- nsullivan@frfirm.com -- of
FOWLER RODRIGUEZ as well as Charles Louis Stern, Jr., Esq. --
cstern@steeglaw.com -- of STEEG LAW FIRM, LLC.
About Titan
Headquartered in Saint Petersburg, Florida, Titan Cruise Lines and
its subsidiary owns and operates an offshore casino gaming
operation. The Company and its subsidiary filed for chapter 11
protection on August 1, 2005 (Bankr. M.D. Fla. Case Nos. 05-15154
and 05-15188). Gregory M. McCoskey, Esq., at Glenn Rasmussen &
Fogarty, P.A., represents the Debtors in their restructuring
efforts. No Official Committee of Unsecured Creditors has been
appointed in the Debtors' cases. When the Debtors filed for
protection from their creditors, they estimated assets and debts
between $10 million to $50 million.
TOPPS COMPANY: Moody's Assigns 'B2' CFR; Outlook Stable
-------------------------------------------------------
Moody's Investors Service assigned a B2 first time corporate
family rating (CFR) to The Topps Company, Inc., a B3-PD
probability of default rating and assigned B1 (LGD2, 29%) ratings
to its proposed $150 million 1st lien term loan and $25 million
revolving credit facility. The proceeds will be used to refinance
existing debt and for general corporate purposes. The outlook is
stable. This is a first time rating assignment.
Ratings Rationale
The B2 corporate family rating reflects Topps' good geographical
diversification, leading position in the sports card market and
stable results from its confectionery business. It also reflects
the company's positive free cash flow, very good liquidity, modest
segment diversification, and moderate credit metrics for a
speculative grade issuer. Moody's expects leverage (Debt to EBITDA
calculated using Moody's standard accounting adjustments) to fall
from its current level in the mid-five times range pro forma for
the transaction to the low-to mid- four times range and that RCF
to net debt will approach 20% in the next twelve-to-eighteen
months. These positives are offset by the Topps's small scale,
niche market orientation in segments with more limited growth
opportunities, low margins, private equity ownership and
volatility that is inherent in the sports and entertainment cards
industry in which sales are often tied to the release of new
product lines, seasons or tournaments.
Moody's stable outlook reflects its expectation that Topps will
maintain positive free cash flow and will use its free cash flow
to start paying down debt over the next twelve-to-eighteen months.
The stable outlook also reflects the company's dominant share of
the Major League Baseball (MLB) card market in which Topps has an
exclusive license to produce MLB cards until 2020, as well as its
exclusive contracts with a number of other global sports
franchises. Moody's anticipates that sales will grow in the last
two quarters of the year after experiencing a year over year
decline in the first quarter following the cycling out of
increased revenue in Europe related to the Euro Cup 2012 Soccer
Championship.
The company's very good liquidity is supported by its positive
free cash flow, modest capital requirements, ample covenant
cushion, its proposed $25 million revolving credit facility that
Moody's expects will remain undrawn and the company's lack of near
term debt maturities. However, despite the numerous positives,
Moody's notes that the inherent volatility in the sports and
entertainment cards industry could weaken the company's liquidity.
The new term loan will require Topps to maintain a 4.75 times
first lien net leverage ratio. Moody's expects that Topps will
have nearly a 30% cushion under the first lien net leverage ratio
test initially and that the cushion will increase over time.
The following ratings were assigned:
Corporate family rating at B2
Probability of default rating at B3-PD
Rating on proposed secured term loan at B1, LGD-2, 29%
Rating on proposed senior secured revolving credit facility at
B1, LGD-2, 29%
The rating could be upgraded if the company demonstrates that it
can grow the business and sustain positive free cash flows despite
some underlying volatility in the business, while lowering
leverage over time. Quantitatively, debt to EBITDA sustained below
3.5 times, RCF to net debt sustained above 20% and EBIT to
interest above 3.5 times (all calculated using Moody's standard
adjustments) could lead to an upgrade.
The rating could be downgraded should the company encounter
sustained operating difficulties that cause leverage to approach
six times, or EBIT margins to be sustained below 5% or if there is
a large debt funded acquisition or shareholder distribution.
The principal methodology used in this rating was the Global
Packaged Goods Industry Methodology published in June 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.
Founded in 1938, The Topps Company, Inc., which is co-owned by
Madison Dearborn Partners (75%) and The Tornante Company (25%), is
the preeminent manufacturer and brand marketer of sports cards,
entertainment products and distinctive kids' confectionery.
TRAINOR GLASS: To Liquidate Remaining Assets Under Plan
-------------------------------------------------------
Trainor Glass Company and the Official Committee of Unsecured
Creditors submitted to the U.S. Bankruptcy Court for the Northern
District of Illinois a Disclosure Statement explaining the Joint
Plan of Liquidation dated Sept. 9, 2013.
According to the Disclosure Statement, the key aspects of the
Joint Plan include the Debtor's liquidation and wind-down and the
formation and operation of a Trainor Liquidating Trust that will
be charged with: (i) liquidating the Debtor's remaining assets;
(ii) pursuing claims and Causes of Action on behalf of the
Debtor's Creditors; (iii) analyzing and reconciling Claims that
have been filed against the Debtor's Estate; and (iv) making
distributions on account of Allowed Claims in accordance with the
Joint Plan and the Liquidating Trust Agreement executed pursuant
to the Joint Plan.
The Debtor's existing equity interests will be canceled under the
Joint Plan, and the Debtor's Equity Security Holders will receive
no distributions on account of their existing Interests in the
Debtor.
The cost of distributing the Joint Plan and Disclosure Statement
well as the costs, if any, of soliciting acceptances, will be paid
from property of the estate. The professional fees of the
Debtor's counsel and the Committee's counsel are not contingent
upon the acceptance of the Joint Plan, and are payable as a
cost of administration, upon Bankruptcy Court approval.
A copy of the Disclosure Statement is available for free at
http://bankrupt.com/misc/TRAINOR_GLASS_ds.pdf
Michael L. Gesas, Esq., at Arnstein & Lehr LLP, represents the
Debtor as counsel. Aaron L. Hammer, Esq., at Sugar Felsenthal
Grais & Hammer LLP, represents the Committee as counsel.
About Trainor Glass
Trainor Glass Company, doing business as Trainor Modular Walls,
Trainor Solar, and Trainor Florida, filed for Chapter 11
bankruptcy (Bankr. N.D. Ill. Case No. 12-09458) on March 9, 2012.
Trainor was founded in 1953 by Robert J. Trainor Sr. to pursue a
residential glass business in Chicago, Illinois. Trainor's
business model was focused on quality fabrication, design,
engineering, and installation of glass products and framing
systems in virtually every architectural application, including
(a) new construction, (b) green-building solutions, (c) building
rehabilitation, (d) storefronts and entrances, (e) tenant
interiors, and (f) custom-specialty work.
The Hon. Carol A. Doyle oversees the Chapter 11 case. George P.
Apostolides, Barry A. Chatz, Esq., Michael L. Gesas, Esq., David
A. Golin, Esq., Kevin H. Morse, Esq., and Michelle G. Novick,
Esq., at Arnstein & Lehr LLP, serve as the Debtor's counsel.
Thomas, Feldman & Wilshusen LLC serves as the Debtor's local Texas
counsel. The Police Law Group serves as local Michigan counsel.
Arnold & Arnold, LLP, serves as local Colorado counsel. Thompson
Hine LLP serves as local Maryland counsel. Kasimer & Annino,
P.C., serves as local Virginia counsel.
High Ridge Partners, Inc., serves as the Debtor's financial
consultant. The Debtor has tapped Cole, Martin & Co., Ltd., to
render certain auditing services related to the Debtor's 401(k)
and profit sharing plan.
The Debtor scheduled $14,276,745 in assets and $64,840,672 in
liabilities.
A three-member official committee of unsecured creditors has been
appointed in the case. The committee retained Sugar Felsenthal
Grais & Hammer LLP as counsel.
TUNICA-BILOXI GAMING: Low Earnings Cue Moody's to Cut CFR to Caa2
-----------------------------------------------------------------
Moody's Investors Service downgraded Tunica-Biloxi Gaming
Authority's Corporate Family Rating to Caa2 from B3, its
Probability of Default Rating to Caa2-PD from B3-PD, and its
senior unsecured note rating to Caa2 from B3. The rating outlook
is negative.
Rating Rationale:
The downgrade reflects TBGA's earnings decline since the opening
of two new gaming facilities within a 90 mile radius of TBGA's
Paragon Casino that has caused the Authority's debt/EBITDA less
tribal distributions to increase to 8.9 times -- above Moody's
trigger of 8.5 times. TBGA's leverage is higher than Moody's prior
expectations due to more lost visits to new competitors --
L'Auberge Baton Rouge and the Jena Choctaw Pines Casino just north
of Alexandria, LA -- than originally expected and overall weaker
gaming demand due to the higher unemployment in the local economy
in TBGA's primary gaming market and recent payroll tax increases.
Additionally, the downgrade reflects the increased possibility
that TBGA will violate its minimum EBITDA covenant as early as the
quarter ended September 30, 2013. TBGA is required to maintain
EBITDA (as defined) greater than $35 million. Without material
improvement in TBGA's earnings following the one year anniversary
of the opening of the L'Auberge Baton Rouge in September, the
Authority will likely violate this covenant. Moody's notes that
TBGA has the option to repay the outstanding $3 million drawn on
the revolver and cancel the commitment prior to a covenant
default. However, per Moody's calculations, this would leave TBGA
with about $5 million available cash (excluding cage cash) after
debt service requirements and tribal distributions at the end of
2013.
In May 2013, TBGA amended the total leverage covenant in its
credit agreement to avoid violating that covenant at June 30,
2013. The amendment did not reset any other covenant.
The negative rating outlook reflects Moody's expectations that
TBGA's earnings are not expected to improve materially in the near
term and therefore, the Authority could have difficulty
refinancing its notes in November 2015 without a restructuring.
The negative outlook also considers the expiration of TBGA's
revolver in a little over a year -- December 2014.
TBGA's ratings could be downgraded if it violates its covenants or
if it appears the Authority will have difficulty refinancing its
upcoming maturities. Ratings are unlikely to be upgraded in the
near-term without material improvement in earnings or a successful
refinancing of its senior unsecured notes due 2015.
Ratings downgraded:
Corporate Family Rating to Caa2 from B3
Probability of Default Rating to Caa2-PD from B3-PD
$150 million 9.0% senior unsecured notes due 2015 to Caa2 (LGD 4,
52%) from B3 (LGD 4, 52%)
TBGA is an unincorporated governmental agency of the Tunica-Biloxi
Tribe of Louisiana. TBGA owns and operates the Paragon Casino
Resort located in Marksville, Louisiana.
The principal methodology used in this rating was the Global
Gaming 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.
UNITED SILVER: Secured Lender Commences Legal Action Over Debt
--------------------------------------------------------------
United Silver Corp. on Sept. 11 disclosed that further to its
press release dated August 1, 2013, HUSC, LLC, the Company's
secured lender, has commenced legal action in New York to collect
on its secured loan and to take over management of the Crescent
Mine joint venture operations. The Company disputes that an event
of default has occurred, states that the legal action is not
justified, and intends to defend the action vigorously. The
Company has until early October, 2013, to file a reply.
The Company has been negotiating with several parties with respect
to the refinance of the HUSC debt and the further development of
the Crescent Mine, but there is no binding or definitive agreement
yet reached. The Company will provide further updates if and when
an agreement may be reached.
About United Silver Corp.
United Silver Corp. (TSX:USC) -- http://www.unitedsilvercorp.com
-- is a vertically integrated Canadian mining company with
operations in Idaho, USA. It has an 80% interest in the Crescent
Silver Mine project in the Silver Valley's prolific Silver Belt --
directly between two of the district's historically largest silver
producing properties, the Sunshine and Bunker Hill mines. USC
also offers a full suite of mining services including contract
mining and providing a complete fabrication shop and service for
building and repairing mining equipment to silver miners in the
district.
VAIL LAKE: Seeks Order Striking Motion to Dismiss Chapter 11 Case
-----------------------------------------------------------------
Vail Lake Rancho California et al. filed a motion with the U.S.
Bankruptcy Court for an order striking the motion to dismiss the
Debtors' chapter 11 case filed by Angela Chen Sabella and Dynamic
Finance Corporation.
According to the Debtors, as evidenced on the face of the
Certificate of Service filed in connection with the Notice and
Motion to Dismiss, Dynamic and Chen failed to serve all creditors
of these cases with their Notice and Motion to Dismiss. The
Federal Rules of Bankruptcy Procedure, the Local Rules of the
Bankruptcy Court, the Court's Limit Notice Order and fundamental
precepts of due process require that all creditors entitled to
notice be notified about the pendency of a case determinative
motion like the Motion to Dismiss. Chen et al. received actual
notice of the addition of over 330 creditors to VLRC's schedules
more than one month before filing the Motion to Dismiss, but did
not provide notice of the Motion to Dismiss to any of those
entities.
Moreover, Chen et al. failed to minimally comply with service
requirements. That is, they failed to serve even the top 20
unsecured creditors of the Voluntary Debtors, as is required by
the Limit Notice Order.
By the Motion to Strike, the Debtors request entry of an order by
the Court striking the Motion to Dismiss for defective service and
directing the Movants to re-file and re-serve the Motion to
Dismiss on all creditors required to be served under Bankruptcy
Rule 2002. The ultimate effect of such an order, which would
obviously not reach the merits of the Motion to Dismiss, would
simply be to postpone the hearing and would therefore not
substantively prejudice Chen et al.
Rather than expend scarce estate resources on opposing a facially
defective Motion to Dismiss at this time, the Debtors submit that
it makes more sense for Chen et al. to re-notice and re-serve the
Motion to Dismiss to allow all creditors entitled to notice the
opportunity to participate and be heard with respect to the Motion
to Dismiss. Due process requires no less.
Proposed Counsel for the Debtors can be reached at:
Ali M. M. Mojdehi, Esq.
Janet D. Gertz, Esq.
COOLEY LLP
4401 Eastgate Mall
San Diego, CA 92121
Tel: (858) 550-6000
Fax: (858) 550-6420
E-mail: amojdehi@cooley.com
jgertz@cooley.com
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. The Debtor also employed
Thomas C. Hebrank and E3 Realty Advisors, Inc., with Mr. Hebrank
serving as the Debtors' chief restructuring officer.
The Debtors' consolidated assets, as of May 31, 2013, total
approximately $291,016,000 and liabilities total $52,796,846.
VISUALANT INC: Board Ratifies Resignations of Directors
-------------------------------------------------------
The Board of Directors of Visualant, Inc., on Dec. 28, 2012,
ratified the resignation of Dr. Masahiro Kawahata as an
independent director effective as of Nov. 30, 2012. Dr. Kawahata
was appointed a Director Emeritus.
The Board also ratified the resignation of Yoshitami Arai as an
independent director effective as of Dec. 26, 2012. Mr. Arai was
appointed a Director Emeritus.
Neither Dr. Kawahata nor Mr. Arai had any disagreement with the
Company on any matter relating to the Company's operations,
policies or practices.
Amends Articles of Incorporation
Visualant, on Sept. 10, 2013, filed with the U.S. Securities and
Exchange Commission an amended version of the Company's Articles
of Incorporation, a copy of which is available for free at:
http://is.gd/3Rgr8l
On Aug. 9, 2013, the stockholders of Visualant approved an
amendment to the Company's Articles of Incorporation increasing
the number of authorized common shares from 200 million to 500
million shares.
On Aug. 12, 2013, the Company filed and received approval from the
State of Nevada for a Certificate of Amendment to the Articles of
Incorporation for Visualant, Inc., a Nevada Profit Corporation,
related to the increase in the number of authorized common shares
from 200 million to 500 million shares.
Annual Meeting Results
Visualant held its 2013 Annual Meeting of Stockholders on
March 21, 2013, at which Ronald Erickson, Jon Pepper, Marco Hegyi,
James Gingo, and Ichiro Takesako were elected to the Board of
Directors to serve until the 2014 Annual Meeting of Stockholders.
The amendment of the Company's 2011 Stock Incentive Plan
increasing the number of shares available for issuance under the
Plan from 7,000,000 to 14,000,000 was approved. The stockholders
also approved the amendment and restatement of the Company's
Articles of Incorporation and Bylaws, approved and granted the
Board discretion to amend the Company's Articles of Incorporation
to effect a reverse stock split and decrease the number of
authorized shares, and ratified the selection of PMB Helin Donovan
LLP, Inc., of Seattle, WA, as the Company's independent registered
public accounting firm for the fiscal year ending Sept. 30, 2013.
About Visualant Inc.
Seattle, Wash.-based Visualant, Inc., was incorporated under the
laws of the State of Nevada on Oct. 8, 1998. The Company
develops low-cost, high speed, light-based security and quality
control solutions for use in homeland security, anti-
counterfeiting, forgery/fraud prevention, brand protection and
process control applications.
Visualant incurred a net loss of $2.72 million for the year
ended Sept. 30, 2012, compared with a net loss of $2.39 million
for the same period during the prior year. The Company's balance
sheet at June 30, 2013, showed $5.59 million in total assets,
$7.32 million in total liabilities, $46,609 in noncontrolling
interest and a $1.78 million total stockholders' deficit.
PMB Helin Donovan, LLP, in Nov. 10, 2012, issued a "going concern"
qualification on the consolidated financial statements for the
year ended Sept. 30, 2012. The independent auditors noted that
the Company has sustained a net loss from operations and has an
accumulated deficit since inception which raise substantial doubt
about the Company's ability to continue as a going concern.
WENDY'S CO: S&P Retains 'B+' CCR Following $225MM Upsize
--------------------------------------------------------
Standard & Poor's Ratings Services said that its ratings on the
Dublin, Ohio-based The Wendy's Co. (including the 'B+' corporate
credit rating, stable outlook, and a 'BB-' issue-level rating and
'2' recovery rating on the company's senior secured term loan) are
unchanged after the company announced it will amend its credit
facility by upsizing it by $225 million to redeem senior unsecured
notes due in June of 2014. The refinancing provides the company
some cost savings and additional flexibility with a longer dated
maturity.
The 'B+' corporate credit rating on The Wendy's Co. reflects S&P's
view of the company's financial risk profile as "aggressive". S&P
based this on forecasted credit ratios, and it expects adjusted
leverage to be in the mid-4x area by the end of this year and
funds from operations to debt in the 15.2% area -- both of which
are in line with indicative ratios of aggressive financial risk
profiles. S&P also expects the company's substantial capital
spending program on refreshing stores will limit free cash flow
generation, but should benefit the business longer term.
S&P also views the company's business risk profile as "weak",
which it based on its position in the highly competitive quick-
service restaurant (QSR) sector and its exposure to commodity cost
inflation.
RATINGS LIST
The Wendy's Co.
Corporate Credit Rating B+/Stable/--
$575 mil. senior secured term loan A BB-
due 2018
Recovery Rating 2
WESTERN CAPITAL: Has Exclusive Right to File Plan Thru Dec. 6
-------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Colorado extended
Western Capital Partners LLC's exclusive plan filing period for an
additional 120 days through Dec. 6, 2013. The Debtor's exclusive
solicitation period for that plan is also extended for an
additional 120 days.
No further extensions will be granted, according to the Court.
About Western Capital
Western Capital Partners LLC filed a bare-bones Chapter 11
petition (Bankr. D. Col. Case No. 13-15760) in Denver on April 10,
2013. The Englewood-based company estimated assets and debt of
$10 million to $50 million. Judge Michael E. Romero presides over
the case.
The Debtor is represented by Jeffrey A. Weinman, Esq., at Weinman
& Associates, P.C. Eason Rohde, LLC, is litigation counsel to the
Debtor. Strauss & Malk, LLP, is also litigation counsel to the
Debtor pertaining to a foreclosure case in the Circuit Court of
Cook County, Illinois.
WESTERN CAPITAL: Can Hire Sean Nelson as Special Counsel
--------------------------------------------------------
The U.S. Bankruptcy Court for the District of Colorado has granted
Western Capital Partners LLC authority to hire Sean M. Nelson as
special counsel in its bankruptcy case.
About Western Capital
Western Capital Partners LLC filed a bare-bones Chapter 11
petition (Bankr. D. Col. Case No. 13-15760) in Denver on April 10,
2013. The Englewood-based company estimated assets and debt of
$10 million to $50 million. Judge Michael E. Romero presides over
the case.
The Debtor is represented by Jeffrey A. Weinman, Esq., at Weinman
& Associates, P.C. Eason Rohde, LLC, is litigation counsel to the
Debtor. Strauss & Malk, LLP, is also litigation counsel to the
Debtor pertaining to a foreclosure case in the Circuit Court of
Cook County, Illinois.
WESTERN FUNDING: BMO Does Not Consent to Cash Collateral Use
------------------------------------------------------------
BMO Harris Bank N.A., a secured creditor in the Chapter 11 case of
Western Funding Incorporated, informed the U.S. Bankruptcy Court
for the District of Nevada that it does not consent to the use of
any of its cash collateral by the Debtor.
BMO said the Debtor may use the cash collateral only if BMO has
consented or the Court has authorized use after notice and
hearing.
Rodney M. Jean, Esq. -- rjean@lionelsawyer.com -- and Ryan A.
Andersen, Esq. -- randersen@lionelswyer.com -- at LIONEL SAWYER &
COLLINS, in Las Vegas, Nevada, represent BMO.
Las Vegas car-loan maker Western Funding Inc., whose customers
usually have less-than-perfect credit, has filed for bankruptcy
protection after its own lender said the company broke borrowing
promises made last year (Bankr. D. Nev., Case No. 13-17588).
Matthew C. Zirzow, Esq., at LARSON & ZIRZOW, LLC, in Las Vegas,
Nevada, represents the Debtor.
WILSHIRE COURTYARD: Bankr. Court Jurisdiction in Tax Disputes
-------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the U.S. Court of Appeals in San Francisco ruled that
bankruptcy courts retain jurisdiction long after a Chapter 11
plan has been confirmed to decide tax disputes involving
interpretation of a reorganization plan.
The report recounts that the case involved the reorganization of
choice real estate in Los Angeles. After the plan was
implemented, California tax authorities concluded the plan was a
disguised sale and assessed $13 million in income taxes on the
partners. The partners went to bankruptcy court for a declaration
that the state taxing authority's characterization of the
transaction was incorrect in view of the plan. The bankruptcy
judge ruled in favor of the partners, pointing to a provision of
the confirmation order saying the transaction wasn't a sale for
any purpose. On appeal, the Bankruptcy Appellate Panel concluded
there was no jurisdiction in the bankruptcy court after
confirmation to rule on tax disputes.
According to the report, U.S. Circuit Judge Richard A. Paez
reversed, finding "related-to" jurisdiction. Near the end of the
30-page opinion, Judge Paez said finding no jurisdiction "ignores
the fact that tax consequences of reorganization are fundamental
to virtually every corporate bankruptcy." Judge Paez followed
what's called the modified Pacor test, requiring a "close nexus"
to the "interpretation, consummation, execution or administration
of the confirmed plan." He said the ultimate tax question in part
involved interpretation of the plan. State law alone didn't
control, he said, because the court must consider Section 346 of
the Bankruptcy Code.
Judge Paez, the report discloses, sent the case back to the
appellate panel to consider the merits of the question of whether
the bankruptcy judge was correct in ruling that the transaction
wasn't a sale.
The case is Wilshire Courtyard v. California Franchise Tax
Board (In re Wilshire Courtyard), 11-60065, U.S. Court of
Appeals for the Ninth Circuit (San Francisco).
Wilshire Courtyard operated two Class A commercial office
buildings and a parking garage located in Los Angeles, Calif., and
sought chapter 11 protection (Bankr. C.D. Calif. Case No. ) on
Jan. 8, 1997 -- the eve of a scheduled foreclosure by one of its
major secured creditors. The court confirmed the debtor-
partnership's chapter 11 plan on Apr. 14, 1998. Pursuant to the
plan, the debtor was restructured from a general partnership into
a limited liability company and continued to own and operate the
Properties. The confirmation order specifically provided that the
plan and the transactions thereunder "do not provide for, and when
consummated will not constitute, the liquidation of all or
substantially all of the property of the Debtor's Estate. . . ."
Thereafter, the case was closed on October 22, 1998. The case
remained closed for more than a decade, until it was reopened on
June 8, 2009, to review this discrete matter.
XZERES CORP: Incurs $1.6 Million Net Loss in May 31 Quarter
-----------------------------------------------------------
XZERES Corp. filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
attributable to common stockholders of $1.61 million on $131,387
of gross revenues for the three months ended May 31, 2013, as
compared with a net loss attributable to common stockholders of
$1.78 million on $649,041 of gross revenues for the same period
last year.
As of May 31, 2013, the Company had $4.88 million in total assets,
$8.25 million in total liabilities and a $3.37 million total
stockholders' deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/oSebhy
Xzeres separately filed with the SEC a presentation describing the
Company and its business, a copy of which is available at:
http://is.gd/fLIDfs
About XZERES Corp.
Headquartered in Wilsonville, Oregon, XZERES Corp. designs,
develops, and markets distributed generation, wind power systems
for the small wind (2.5kW-100kW) market as well as power
management solutions.
Xzeres incurred a net loss of $7.59 million on $4.51 million of
gross revenues for the year ended Feb. 28, 2013, as compared with
a net loss of $8.60 million on $3.96 million of gross revenues for
the year ended Feb. 28, 2012.
Silberstein Ungar, PLLC, in Bingham Farms, Michigan, issued a
"going concern" qualification on the consolidated financial
statement for the year ended Feb. 28, 2013. The independent
auditors noted that the Company has incurred losses from
operations, has negative working capital, and is in need of
additional capital to grow its operations so that it can become
profitable. These factors raise substantial doubt about the
Company's ability to continue as a going concern.
YELLOWSTONE MOUNTAIN: Founder Seeks $3.3MM in Legal Fees
--------------------------------------------------------
The Associated Press reported that Montana revenue authorities are
trying to block former billionaire Tim Blixseth from collecting
$3.3 million in attorney fees he's claiming from the state's
frustrated efforts to force him into bankruptcy.
According to the report, officials said Sept. 11 that Blixseth
should be barred from pursuing the fees while they appeal a July
ruling that dismissed the forced bankruptcy case.
The state has alleged the founder of Montana's ultra-exclusive
Yellowstone Club owes $57 million in back taxes, the report
related. If Blixseth goes into bankruptcy and the tax claim holds
up, he could be forced to liquidate his assets.
Blixseth, a resident of Washington state, has twice gotten the
case dismissed by a now-retired federal judge, the report added.
That allowed him to seek attorney fees against the plaintiffs in
the case under federal bankruptcy law.
In addition to the state, Blixseth also wants to recover the fees
from the Yellowstone Club Liquidating Trust, the report said.
That's a group of creditors who sided with the state as part of
the creditors' efforts to collect on a $41 million judgment
against Blixseth in the club's 2008 bankruptcy case.
About Yellowstone Mountain
Located near Big Sky, Montana, Yellowstone Mountain Club LLC --
http://www.theyellowstoneclub.com/-- is a private golf and ski
community with more than 350 members, including Bill Gates and Dan
Quayle. The Company was founded in 1999.
Yellowstone Club and its affiliates filed for Chapter 11
bankruptcy (Bankr. D. Montana, Case No. 08-61570) on Nov. 10,
2008. The Company's owner affiliate, Edra D. Blixseth, filed
a separate Chapter 11 petition on March 27, 2009 (Case No.
09-60452).
Attorneys at Bullivant Houser Bailey PC and Bekkedahl & Green
PLLC represented Yellowstone. The Debtors hired FTI Consulting
Inc. and Ronald Greenspan as CRO. The official committee of
unsecured creditors were represented by Parsons, Behle and
Latimer; and James H. Cossitt, Esq., as counsel. Credit Suisse,
the prepetition first lien lender, was represented by Skadden,
Arps, Slate, Meagher & Flom.
In June 2009, the Bankruptcy Court entered an order confirming
Yellowstone's Chapter 11 Plan. Pursuant to the Plan, CrossHarbor
Capital Partners LLC acquired equity ownership in the reorganized
Club for $115 million.
Marc S. Kirschner, Esq., was appointed the Trustee of the
Yellowstone Club Liquidating Trust created under the Plan.
YRC WORLDWIDE: Solus Held 11.7% Equity Stake at Aug. 31
-------------------------------------------------------
In a Schedule 13G filing with the U.S. Securities and Exchange
Commission, Solus Alternative Asset Management LP, Solus GP LLC
and Christopher Pucillo disclosed that as of Aug. 31, 2013, they
beneficially owned 1,344,792 shares of common stock of YRC
Worldwide Inc. representing 11.78 percent of the shares
outstanding. A copy of the regulatory filing is available for
free at http://is.gd/3QhjpT
About YRC Worldwide
Headquartered in Overland Park, Kan., YRC Worldwide Inc. (NASDAQ:
YRCW) -- http://www.yrcw.com/-- is a holding company that offers
its customers a wide range of transportation services. These
services include global, national and regional transportation as
well as logistics.
After auditing the 2011 results, the Company's independent
auditors expressed substantial doubt about the Company's ability
to continue as a going concern. KPMG LLP, in Kansas City,
Missouri, noted that the Company has experienced recurring net
losses from continuing operations and operating cash flow deficits
and forecasts that it will not be able to comply with certain debt
covenants through 2012.
For the year ended Dec. 31, 2012, the Company incurred a net loss
of $136.5 million on $4.85 billion of operating revenue, as
compared with a net loss of $354.4 million on $4.86 billion of
operating revenue during the prior year. As of June 30, 2013, the
Company had $2.17 billion in total assets, $2.81 billion in total
liabilities and a $641.5 million total shareholders' deficit.
* * *
As reported by the TCR on Aug. 2, 2013, Moody's Investors Service
affirmed the rating of YRC Worldwide, Inc., corporate family
rating at Caa3. The ratings outlook is has been changed to
positive from stable.
"The positive ratings outlook recognizes the important progress
that YRCW has made in restoring positive operating margins through
implementation of yield management initiatives, during a period of
stabilizing demand in the less than truckload ('LTL') segment,"
the report stated.
In August 2011, Standard & Poor's Ratings Services raised its
corporate credit rating on YRC Worldwide Inc. to 'CCC' from 'SD'
(selective default), after YRC completed a financial
restructuring. Outlook is stable.
"The ratings on Overland Park, Kan.-based YRCW reflect its
participation in the competitive, capital-intensive, and cyclical
trucking industry," said Ms. Ogbara, "as well as its meaningful
off-balance-sheet contingent obligations related to multiemployer
pension plans." "YRCW's substantial market position in the less-
than-truckload (LTL) sector, which has fairly high barriers to
entry, partially offsets these risk factors. We categorize YRCW's
business profile as vulnerable, financial profile as highly
leveraged, and liquidity as less than adequate."
YSC INC: Seeks Cash Collateral Use to Continue Hotel Operations
---------------------------------------------------------------
YSC Inc. seeks authority from the U.S. Bankruptcy Court for the
Western District of Washington at Seattle to continue to use the
cash collateral securing its prepetition indebtedness in order to
continue the operation of its two hotels -- a Comfort Inn located
at 31622 Pacific Hwy S., in Federal Way, Washington, and a Ramada
Inn at 4520 Martin Way E., in Olympia, Washington.
According to the Debtor's counsel, Emily Jarvis, Esq., at Wells
and Jarvis, P.S., in Seattle, Washington, the Debtor has no
alternative borrowing source, and to remain in business must be
permitted to use the cash proceeds, credit card and other accounts
receivable, and inventory to operate the hotels and pay employees
and operating expenses. Absent such use, the Debtor will be
required to cease operations, Ms. Jarvis tells the Court.
The Debtors will provide adequate protection for the use of cash
collateral in the following forms: Whidbey Island Bank and
Wilshire State Bank, which hold liens on the two hotels, will be
granted a first priority lien and security interest in all of the
postpetition inventory of the Ramada Inn and Comfort Inn, as
appropriate under their security and the proceeds generated
thereby. The Debtor will also make monthly adequate protection
payments to the creditors.
Ms. Jarvis states that Wilshire appears to be fully secured on the
Comfort Inn and so the Debtor will continue making the monthly
contractual payments, which are approximately $37,000. Ms. Jarvis
says Whidbey appears to be partially unsecured and on that basis
the Debtor proposes to seek a modification of its loan terms. On
that basis, the Debtor proposes to make adequate protection
payments based on a 30 year amortization of the current loan
balance at 5%, for a total amount of $71,512 per month.
YSC Inc., owner of a Comfort Inn in Federal Way, Washington, and a
Ramada Inn in Olympia, Washington, filed a petition for Chapter 11
protection (Bankr. W.D. Wash. Case No. 13-bk-17946) on Aug. 30,
2013, in Seattle.
The owner listed the hotels as worth $17.9 million. Total debt is
$18.5 million, including $18 million in secured debt. Among
mortgage holders, Whidbey Island Bank is owed $13.3 million.
* August Closes With Only Two Corporate Bond Defaults
-----------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that junk-bond defaults almost ground to a halt in August,
when there were only two. One was ambulance operator Rural/Metro
Corp., which is now reorganizing in bankruptcy.
The worldwide junk-bond default rate contracted to 2.9 percent in
August, compared with 3 percent the month before, according to a
report from Moody's Investors Service. In the U.S., the default
rate inched down to 2.8 percent, a 0.1 percentage point decline
from the prior month.
So far this year, there have been 47 defaults around the world,
almost the same as the 46 in the first eight months of
2012, Moody's reported.
The percentage of junk debt classified as distressed also shrank
in August. Distressed debt is now 8.5 percent of all junk,
compared with 8.8 percent in July and 17.5 percent a year ago,
Moody's said.
Moody's predicted that the worldwide junk default rate will rise
by year-end to 3.1 percent before declining to 2.7 percent
this time next year.
Debt is considered distressed if the yield is 10 percentage
points more than comparable U.S. Treasury obligations.
* Triple Five Strikes Deal to Keep Control of Vegas Land
--------------------------------------------------------
Patrick Fitzgerald, writing for DBR Small Cap, reported that the
real estate development group behind the Mall of America has
struck a deal with its bank lenders to bring a Las Vegas property
across the street from the Mandalay Casino out of bankruptcy
protection.
* Morgan Drexen Responds to Article on CFB Use of Trustee Program
-----------------------------------------------------------------
Morgan Drexen on Sept. 10 disclosed that already under fire for
its sweeping data mining program, the Consumer Financial
Protection Bureau is facing fresh criticism after a news report
revealed the agency may have recruited the U.S. Trustee Program to
obtain private consumer bankruptcy documents from Morgan Drexen.
Reporter Richard Pollock of the Washington Examiner detailed the
allegations in a story entitled "Consumer Agency Threatens
Independence of Bankruptcy Office." In May of 2012, United States
Trustee attorney J. Steven Wilkes demanded that Morgan Drexen
produce millions of bankruptcy files related to financially
distressed consumers across the country, well beyond the scope of
Wilkes' regional 21 district -- Florida and Georgia. A federal
bankruptcy judge sided with Morgan Drexen, limiting the U.S.
Trustee's access to only seven Florida bankruptcy cases.
The reason for the unusually broad demand may have been revealed
in a July 2012 email from Wilkes to Steven Berman, a Florida
attorney representing Morgan Drexen in the state. The email read:
"It is likely that my client will be anticipating your clients to
provide our office with copies of the information, documents, and
discovery that have and will be produced to the CFPB in its
ongoing investigation."
"That's pretty unusual," Mr. Berman told the Washington Times of
the CFPB reference. "I've been a bankruptcy lawyer for 23 years.
I don't think I've ever had that experience."
The U.S. Trustee's office was created as a strictly neutral agency
designed to serve as a watchdog over the bankruptcy process. As
reported by Pollock:
"If USTP is aiding CFPB's data-mining program in any manner,
bankruptcy authorities argue it would constitute an
'unprecedented' violation of the organization's reason for being
and destroy its independence."
"We were pleased to read in Richard Pollock's article that
disinterested experts in the bankruptcy field reacted with the
same aghast we had regarding the shocking abuse of the US
Trustee's Office in its data-mining efforts," said Jeffrey Katz,
Morgan Drexen's General Counsel.
Morgan Drexen is currently challenging the constitutionality of
the CFPB in federal court in Washington, DC. The complaint
alleges, among other things, that the CFPB is grossly overreaching
its authority by attempting to data mine sensitive bankruptcy
documents protected by attorney-client privilege. The CFPB
responded by suing Morgan Drexen across the country in California.
"This is an agency that has proven it will stop at nothing to get
its hands on the private, privileged details of struggling
American consumers," said Walter Ledda, Morgan Drexen CEO. "It
amazes me that given this agency's already massive powers, it
would attempt to use the U.S. Trustee Program as a side door to
gain access to even more data that it has no right to obtain."
About Morgan Drexen
Morgan Drexen -- http://www.morgandrexen.com-- provides
integrated software systems and administrative support services to
small businesses and attorneys nationwide. The company is
chronicling its legal battle with the CFPB on a special website:
MorganDrexenvsCFPB.com.
* Moody's Sees Recovery Ahead for Mohawk and Steelcase
------------------------------------------------------
US consumer durables companies Mohawk and Steelcase could be the
first of the industry's "fallen angels" to regain their
investment-grade ratings in the wake of the financial crisis,
Moody's Investors Service says in a new report, "Fallen Angels'
Could Rise Thanks to Improving Economy and Cost-Cutting."
Prior to 2008, eight consumer durable companies had investment
grade ratings, but by August 2009, four had dropped to speculative
grade. Mohawk is a flooring company and Steelcase manufactures
office furniture.
"The financial crisis materially affected the operating
performance and credit metrics of many consumer durable companies,
which are subject to swings in discretionary consumer and capital
spending," says Vice President -- Senior Credit Officer, Kevin
Cassidy. "But both Mohawk and Steelcase have aggressively cut
costs and raised prices, helping to lift their gross margins to
close to pre-recession levels."
Both companies benefit from significant scale and leading market
shares in their subsectors, Cassidy says. In addition, Mohawk is
benefitting from the improvement in residential construction and
home sales, while Steelcase is gaining from the modest but steady
improvement in the economy and job market.
"Maintaining a strong liquidity profile and prudent financial
policy will be critical for a rating upgrade to be considered,
given that both companies' businesses are cyclical and subject to
discretionary spending," Cassidy notes. But it won't be until
Moody's believes the companies can not only achieve, but sustain,
strong financial profiles during a reasonable downturn that their
ratings might be returned to investment grade.
In the next year or two Mohawk's and Steelcase's credit metrics
are likely to approach the levels specified for an upgrade. This
report presents a hypothetical analysis of the improvements each
company would need to achieve for an upgrade to be considered.
"The targeted metrics do not necessarily need to be met for an
upgrade to be considered," Cassidy says, "as long as we are
confident the companies will perform as expected and materially
sustain them during reasonable downturns."
* Moody's Notes Stable Financial Medians for Toll Roads in 2012
---------------------------------------------------------------
Median financial data for the US toll roads in fiscal 2012 showed
little change from 2011 as modest traffic growth and toll
increases kept pace with increasing leverage, according to Moody's
Investors Service in the report "US Toll Road Sector Medians for
Fiscal Year 2012: Barely Changed from 2011."
Growth in leverage remains a key risk for the sector, says
Moody's, and one median that did change significantly was that for
debt per roadway mile, which increased to $18.9 million in fiscal
2012 from $14.3 million in fiscal 2011. However, median debt per
transaction remained relatively stable at $8.70 compared to $8.90
in fiscal 2011, indicative of the slight growth in transactions
that offset the growth in leverage.
Rated debt increased only slightly in fiscal 2012 to $80.2
billion, from $79.9 billion in 2011, despite heavy new issuance.
Issuance included funding for both new capital projects and major
maintenance as well as debt refunding because of low interest
rates.
The average toll per transaction increased to $1.96 in 2012 from
$1.82 in 2011, reflecting across-the-board rate increases for many
toll roads, which helped keep the ratio of debt to operating
revenue relatively steady at 4.79 in 2012 versus 4.83 in 2011. The
toll increases spurred a rise in liquidity to 773 days cash on
hand from 610 in FY 2011.
Steady toll rate increases will be necessary to support a growing
debt burden, says Moody's, although the unfettered ability to
increase toll rates could face mounting political pressure in an
economy that is growing slowly. One reason Moody's continues to
have a negative outlook for the US toll road sector is the weak
and uneven pace of the economic recovery.
Moody's expects a rise in the number of toll roads and toll-
supported projects.
"The user-pay model for funding transportation projects is gaining
acceptance as traditional tax-supported funding options for
infrastructure fall short of needs," says Maria Matesanz, the
Moody's Senior Vice President who authored the medians report.
The median bond rating for US toll roads remains strong at A1,
with ratings ranging from a high of Aa3 to a low of B1.
* Ohio Foreclosure Filings Up 19% in August 2013, Report Shows
--------------------------------------------------------------
RealtyTrac(R) on Sept. 12 released its Ohio Foreclosure Market
Report(TM) for August 2013, which shows foreclosure filings --
default notices, scheduled auctions and bank repossessions -- were
reported on 9,542 Ohio properties in August, an increase of 19
percent from the previous month and up 4 percent from July 2012.
The report also shows that Ohio's overall foreclosure rate --
where one in 537 housing units has a foreclosure filing -- ranked
third highest among all states for the month.
"As home prices continue to increase, we have noticed an increase
in lenders taking action on delinquent mortgages," said Michael
Mahon, executive vice president and broker at HER Realtors,
covering the Columbus, Cincinnati and Dayton markets in Ohio. "We
have lenders in the Ohio market who have stepped up their activity
in notifying homeowners who are in default and commencing
foreclosure actions, which has added to the amount of foreclosures
we are seeing in certain Ohio metros.
"Due to lack of inventory during the summer months, there is a
current demand amongst buyers who are ready, willing and able to
purchase new inventory being introduced to the market," added
Mahon.
Foreclosure starts up 44 percent from previous month, down 27
percent annually The foreclosure process was started for the first
time on 2,998 Ohio properties in August, a 44 percent increase
from the previous month but still down 27 percent from a year ago.
The jump in Ohio foreclosure starts in August followed three
consecutive monthly decreases in foreclosure starts, and the
state's August foreclosure starts were at the highest level since
February.
Scheduled foreclosure auctions decreased 6 percent from the
previous month but were still up 11 percent from a year ago.
REO activity up 29 percent from previous month, up 46 percent
annually Ohio bank repossessions (REO) spiked from the previous
month to an eight-month high. Bank repossessions in Ohio
increased 29 percent in August from the previous month and were up
46 percent from a year ago. Statewide there were 3,583 bank
repossessions in August 2013.
Akron, Cleveland and Toledo enter top 10 metro foreclosure rates
The national foreclosure rate dropped in August, but three Ohio
cities -- Akron, Cleveland and Toledo -- cracked into the nation's
top 10 metro foreclosure rates for the month.
Toledo ranked 7th nationwide with a foreclosure rate of one in
every 384 housing units with a foreclosure filing. The metro
reported foreclosure filings on 784 properties in August, up 144
percent from July 2013 but still down 1 percent from August 2012.
Cleveland ranked 8th nationally, also with a foreclosure rate of
one in every 384 housing units with a foreclosure filing.
Cleveland reported 2,483 properties with foreclosure filings in
August, up 29 percent from the previous month and up 2 percent
from August 2012.
Akron ranked 10th nationwide with a foreclosure rate of one in
every 393 housing units with a foreclosure filing. The metro
reported foreclosure filings on 795 properties in August, up 36
percent from July 2013 and up 108 percent from August 2012.
Foreclosure activity up from previous month in Columbus,
Cincinnati and Dayton The total number of properties with
foreclosure filings in the Columbus, Cincinnati and Dayton metro
areas all increased from July to August, and all three metro
foreclosure rates ranked among the top 30 highest nationwide for
the month.
In Dayton, 930 properties received a foreclosure filing in August,
up 81 percent from July and up 13 percent from August 2012. The
increase in amount of foreclosure starts in the Dayton metro area
was especially large with a 228 increase from the previous month.
Foreclosure starts jumped 35 percent from July to August in
Columbus, and bank repossessions increased 50 percent during the
same time period, helping the city post a foreclosure rate above
the national average and ranking No. 27 among all metropolitan
statistical areas nationwide with a population of 200,000 or more.
Foreclosure starts decreased in Cincinnati in August, but overall
foreclosure activity increased thanks primarily to a jump in
scheduled foreclosure auctions, which were up 19 percent from the
previous month and up 105 percent from August 2012.
Report methodology
The RealtyTrac U.S. Foreclosure Market Report provides a count of
the total number of properties with at least one foreclosure
filing entered into the RealtyTrac database during the month --
broken out by type of filing. Some foreclosure filings entered
into the database during the month may have been recorded in
previous months. Data is collected from more than 2,200 counties
nationwide, and those counties account for more than 90 percent of
the U.S. population. RealtyTrac's report incorporates documents
filed in all three phases of foreclosure: Default -- Notice of
Default (NOD) and Lis Pendens (LIS); Auction -- Notice of
Trustee's Sale and Notice of Foreclosure Sale (NTS and NFS); and
Real Estate Owned, or REO properties (that have been foreclosed on
and repurchased by a bank). The report does not count a property
again if it receives the same type of foreclosure filing multiple
times within the estimated foreclosure timeframe for the state
where the property is located.
About RealtyTrac Inc.
RealtyTrac -- http://www.realtytrac.com-- is a supplier of U.S.
real estate data, with more than 1.5 million active default,
foreclosure auction and bank-owned properties, and more than 1
million active for-sale listings on its website, which also
provides essential housing information for more than 100 million
homes nationwide. This information includes property
characteristics, tax assessor records, bankruptcy status and sales
history, along with 20 categories of key housing-related facts
provided by RealtyTrac's wholly-owned subsidiary, Homefacts(R).
RealtyTrac's foreclosure reports and other housing data are relied
on by the Federal Reserve, U.S. Treasury Department, HUD, numerous
state housing and banking departments, investment funds as well as
millions of real estate professionals and consumers, to help
evaluate housing trends and make informed decisions about real
estate.
* U.S. Foreclosure Filings Down 2% in August 2013, Report Shows
---------------------------------------------------------------
RealtyTrac(R) on Sept. 12 released its U.S. Foreclosure Market
Report(TM) for August 2013, which shows foreclosure filings --
default notices, scheduled auctions and bank repossessions -- were
reported on 128,560 U.S. properties in August, a decrease of 2
percent from the previous month and down 34 percent from August
2012 -- the 35th consecutive month where foreclosure activity has
decreased on an annual basis. The report also shows one in every
1,019 U.S. housing units with a foreclosure filing during the
month.
High-level findings from the report:
-- The decrease in overall foreclosure activity was
driven largely by falling foreclosure starts in August. A total of
55,775 U.S. properties started the foreclosure process during the
month, down 44 percent from a year ago to the lowest level since
December 2005.
-- Foreclosure starts in August decreased from a year ago
in 38 states, including both non-judicial states such as Colorado
(down 80 percent), Arizona (down 65 percent), Washington (down 65
percent), California (down 57 percent), and Michigan (down 55
percent), and also judicial states such as Illinois (down 66
percent), Massachusetts (down 66 percent), Florida (down 65
percent), Indiana (down 43 percent), and Wisconsin (down 39
percent).
-- Foreclosure starts did increase from the previous
month in 17 states, including Nevada (up 226 percent), Ohio (up 44
percent), Maryland (up 24 percent), California (up 12 percent),
and New York (up 8 percent).
-- Bank repossessions (REO) in August increased 6 percent
from the previous month but were still down 25 percent from a year
ago. REO activity nationwide has increased on a month-to-month
basis in three of the last four months, reaching a five-month high
in August.
-- REO activity increased from the previous month in 26
states and was up from a year ago in 23 states, including New York
(up 123 percent to a 34-month high), New Jersey (up 63 percent to
a 31-month high), Florida (up 48 percent to a seven-month high),
Ohio (up 46 percent to an eight-month high), and Indiana (up 41
percent to a 9-month high).
-- Nevada's foreclosure rate ranked highest nationwide,
supplanting Florida at the No. 1 spot. Florida's foreclosure rate
fell to second highest, followed by Ohio, Maryland and Delaware.
-- Florida cities accounted for six of the 10 highest
metropolitan foreclosure rates, down from nine of the top 10 in
the previous month. Also in the top 10 metro foreclosure rates
were Las Vegas and three Ohio cities: Toledo, Cleveland and Akron.
"The foreclosure floodwaters have receded in most parts of the
country, but lenders and communities continue to clean up the
damage left behind, which means the recent uptick in bank
repossessions is a trend that will likely continue into next
year," said Daren Blomquist, vice president at RealtyTrac.
"Meanwhile foreclosure flash floods will continue to hit some
markets over the next few months as delayed foreclosure starts are
quickly pushed into the pipeline. This was the case with the jump
in Nevada foreclosure starts in August."
Local broker quotes from the RealtyTrac Network "As home prices
continue to increase, we have noticed an increase in lenders
taking action on delinquent mortgages," said Michael Mahon,
executive vice president and broker at HER Realtors, covering the
Columbus, Cincinnati and Dayton markets in Ohio. "We have lenders
in the Ohio market who have stepped up their activity in notifying
homeowners who are in default and commencing foreclosure actions,
which has added to the amount of foreclosures we are seeing in
certain Ohio metros.
"Due to lack of inventory during the summer months, there is a
current demand amongst buyers who are ready, willing and able to
purchase new inventory being introduced to the market," added
Mahon.
"In the Nashville MSA foreclosures are down 46 percent over the
last year, and banks are slowly divesting of inventory. We're
continuing to see steady, positive numbers as the housing market
strengthens and levels out," said Bob Parks, CEO of Bob Parks
Realty, covering Nashville and the middle Tennessee region.
"The increase in defaults is most likely tied to the
implementation of two new laws in Nevada, SB 300, which took
effect June 1, and the Nevada Homeowner Bill of Rights, which will
take effect on October 1," said Craig King, COO of Chase
International, covering the Reno and Lake Tahoe markets. "Banks
are in the process of interpreting the new laws and making
necessary changes in their documentation, and have said it will
take some months to sort through the changes. During this process
there will probably be significant volatility in foreclosure-
related activities."
"Our Northern Utah market areas are displaying robust growth in
rising unit sales and average sales prices," said Steve Roney, CEO
of Prudential Utah Real Estate. "However, Salt Lake and Weber
Counties are showing a significant increase in default filings by
lenders, indicating an increased willingness to foreclose on
properties in a rising market."
"The foreclosure problem in the Oklahoma City and Tulsa markets is
winding down as evidenced by the fact that total Oklahoma
foreclosure activity in August was at its lowest level since
June 2007," said Sheldon Detrick, CEO of Prudential
Detrick/Prudential Alliance Realty covering the Oklahoma City and
Tulsa markets. "Of more immediate concern is that buyer activity
and open house traffic has dropped significantly for the past
three weeks. The continual rise in interest rates is having a
real slow-down effect on the market, and I think this is a
foreshadowing of things to come."
"Recent New York market trends show a rise in average home prices
and a substantial increase in units sold over the last year," said
Emmett Laffey, CEO of Laffey Fine Homes International, covering
Long Island and the five boroughs of New York City. "It is
surprising that the number of default notices has risen so sharply
during the third quarter in this market environment; however, even
with the increase the area's foreclosure rate is still well below
the national average and ranks in the bottom five among the
nation's 20 largest markets. Some of the increase could be caused
by a late ripple effect from hurricane Sandy."
Nevada, Florida, Ohio post top state foreclosure rates A 104
percent monthly spike in foreclosure activity pushed Nevada's
foreclosure rate to highest among the states in August. There
were a total of 3,236 Nevada properties with foreclosure filings
during the month, up 11 percent from a year ago and one in every
359 housing units -- more than two and a half times the national
average.
The increase in Nevada foreclosure activity was caused by a jump
in both foreclosure starts (NOD), up 226 percent from the previous
month, and scheduled foreclosure auctions, up 96 percent from the
previous month. Nevada REO activity was down 1 percent from the
previous month and down 38 percent from a year ago.
Florida's foreclosure rate in August -- one in every 383 housing
units with a foreclosure filing -- dropped to second highest in
the country after three consecutive months in the No. 1 spot.
There were a total of 23,372 Florida properties with foreclosure
filings in August, down 14 percent from the previous month and
down 15 percent from a year ago. That annual decrease in overall
Florida foreclosure activity came on the heels of three
consecutive months with annual increases and 16 of the last 19
months with annual increases.
The annual decrease in Florida foreclosure activity was driven
primarily by a 65 percent year-over-year decrease in Florida
foreclosure starts (LIS), dropping those to the lowest level since
RealtyTrac began issuing its report at the state level in April
2005. Meanwhile scheduled foreclosure auctions in Florida
increased 39 percent from a year ago, and bank repossessions
increased 48 percent from a year ago.
Ohio foreclosure activity in August increased 4 percent from a
year ago -- following three consecutive months where foreclosure
activity decreased on an annual basis -- helping the state to post
the nation's third highest foreclosure rate for the second month
in a row. There were a total of 9,542 Ohio properties with a
foreclosure filing in August, Florida increased just, up 19
percent from the previous month and a foreclosure rate of one in
every 537 housing units. Ohio REO activity increased 29 percent
from the previous month to an eight-month high in August. Ohio
foreclosure starts increased 44 percent from the previous month
but were still down 27 percent from a year ago, while scheduled
foreclosure auctions decreased 6 percent from the previous month
but were still up 11 percent from a year ago.
A 2 percent month-over-month decrease in foreclosure activity
helped lower Maryland's foreclosure rate to fourth highest among
the states. There were a total of 3,892 Maryland properties with
a foreclosure filing in August, still up 165 percent from a year
ago and a foreclosure rate of one in every 609 housing units.
Delaware foreclosure activity increased 45 percent from July to
August, boosting the state's foreclosure rate from No. 14 in
July to No. 5 in August. One in every 638 Delaware housing units
had a foreclosure filing in August.
Georgia foreclosure activity in August decreased 15 percent from
the previous month and was down 51 percent from a year ago -- the
14th consecutive month with a year-over-year decrease -- helping
to drop the state's foreclosure rate to 11th highest nationwide.
August was the first month since November 2009 where Georgia's
foreclosure rate ranked below the top 10 in the nation.
Other states with foreclosure rates ranking among the 10 highest
nationwide were Indiana (one in every 660 housing units with a
foreclosure filing), Utah (one in every 697 housing units),
Illinois (one in every 725 housing units), Connecticut (one in
every 765 housing units), and South Carolina (one in every 813
housing units).
Three Ohio cities crack top 10 metro foreclosure rates With one in
every 201 housing units with a foreclosure filing in August, the
Port St. Lucie metro area in southeast Florida posted the nation's
highest foreclosure rate among metropolitan statistical areas with
a population of 200,000 or more.
Five other Florida cities posted foreclosure rates among the top
10 highest nationwide: Jacksonville at No. 2 (one in every 304
housing units with a foreclosure filing); Miami at No. 4 (one in
every 324 housing units); Ocala at No. 5 (one in every 328 housing
units); Tampa at No. 6 (one in every 347 housing units); and
Orlando at No. 9 (one in every 386 housing units).
Las Vegas posted the nation's third highest metro foreclosure rate
-- one in every 323 housing units with a foreclosure filing --
thanks to a 90 percent monthly spike in foreclosure activity, and
monthly spikes in foreclosure activity also boosted three Ohio
cities into the top 10 highest metro foreclosure rates: Toledo at
No. 7 (one in every 384 housing units with a foreclosure filing);
Cleveland at No. 8 (also one in every 384 housing units); and
Akron at No. 10 (one in every 393 housing units).
20 major metro foreclosure trends Despite an 18 percent year-over-
year decrease in foreclosure activity, Miami posted the highest
foreclosure rate among the nation's 20 largest metropolitan
statistical areas by population.
Tampa's foreclosure rate came in second highest among the nation's
20 largest metro areas, followed by Riverside-San Bernardino in
Southern California, Chicago and Baltimore -- where foreclosure
activity increased 252 percent from a year ago. Baltimore was one
of four cities among the 20 largest to post an annual increase in
foreclosure activity. Others were New York (35 percent increase),
Philadelphia (16 percent increase), and Washington, D.C. (9
percent increase).
Report methodology
The RealtyTrac U.S. Foreclosure Market Report provides a count of
the total number of properties with at least one foreclosure
filing entered into the RealtyTrac database during the month --
broken out by type of filing. Some foreclosure filings entered
into the database during the month may have been recorded in
previous months. Data is collected from more than 2,200 counties
nationwide, and those counties account for more than 90 percent of
the U.S. population. RealtyTrac's report incorporates documents
filed in all three phases of foreclosure: Default -- Notice of
Default (NOD) and Lis Pendens (LIS); Auction -- Notice of
Trustee's Sale and Notice of Foreclosure Sale (NTS and NFS); and
Real Estate Owned, or REO properties (that have been foreclosed on
and repurchased by a bank). The report does not count a property
again if it receives the same type of foreclosure filing multiple
times within the estimated foreclosure timeframe for the state
where the property is located.
About RealtyTrac Inc.
RealtyTrac -- http://www.realtytrac.com-- is a supplier of U.S.
real estate data, with more than 1.5 million active default,
foreclosure auction and bank-owned properties, and more than 1
million active for-sale listings on its website, which also
provides essential housing information for more than 100 million
homes nationwide. This information includes property
characteristics, tax assessor records, bankruptcy status and sales
history, along with 20 categories of key housing-related facts
provided by RealtyTrac's wholly-owned subsidiary, Homefacts(R).
RealtyTrac's foreclosure reports and other housing data are relied
on by the Federal Reserve, U.S. Treasury Department, HUD, numerous
state housing and banking departments, investment funds as well as
millions of real estate professionals and consumers, to help
evaluate housing trends and make informed decisions about real
estate.
* Bankruptcy Courts Approve Prime Clerk as Noticing Agent
---------------------------------------------------------
Prime Clerk, a bankruptcy claims and noticing agent, on Sept. 12
disclosed that it has opened for business and is an approved
claims agent in the United States Bankruptcy Courts for the
Southern District of New York and the District of Delaware. The
SDNY and Delaware courts administer the majority of the large,
complex corporate bankruptcies filed in the US.
"We are excited to bring a new level of professionalism,
innovation and transparency to the claims administration
marketplace," said Shai Waisman, the CEO and a Co-Founder of Prime
Clerk. "We have assembled an experienced team of restructuring
experts and have designed and built from scratch the most
sophisticated and technologically advanced system available in the
industry. Prime Clerk is the only independent claims agent with
the ability to handle large and complex restructurings and is
singularly focused on serving our clients."
Prime Clerk is based in New York and was founded by veteran
restructuring attorneys and consultants with the vision of
bringing next generation technology into a stagnant industry.
Prime Clerk delivers tailored, practical and client-collaborative
solutions to bankruptcy administration.
* Crowe Horwath Elects 16 Partners & Three New Directors
--------------------------------------------------------
Crowe Horwath LLP, one of the largest public accounting and
consulting firms in the U.S., has elected 16 new partners and
three new directors.
Partners-effective April 1, 2014, unless otherwise noted
Jen Allen, Audit (Columbus, Ohio)
Jay Chung, Financial Advisory Services (Orange County, Calif.)
- effective Aug. 19, 2013
John Epperson, Risk Consulting (Oak Brook, Ill.)
Scott Ford, Tax (Nashville, Tenn.)
Mike Giles, Tax (Lakeland, Fla.)
Rhonda Huismann, Tax (Grand Rapids, Mich.)
Jeff Jensen, Audit (Sacramento, Calif.)
Ryan Luttenton, Risk Consulting (Oak Brook, Ill.)
Jim O'Laughlin, Performance Consulting (Grand Rapids, Mich.)
Robert Parker, Tax (Nashville, Tenn.)
Jeff Sacks, Risk Consulting (Los Angeles, Calif.)
Tapan Shah, Risk Consulting (Oak Brook, Ill.)
Joe Tomaszewski, Audit (Grand Rapids, Mich.)
Christine Torres, Audit (Oak Brook, Ill.)
Lisa Voeller, Performance Consulting (Sacramento, Calif.)
- effective July 8, 2013
Brian Zygmunt, Audit (Chicago, Ill.)
Directors-effective immediately
Eric Durham, Risk Consulting (Grand Rapids, Mich.)
Sandy Hofmann, Tax (Fort Wayne, Ind.)
Bret Updegraff, Performance Consulting (Indianapolis, Ind.)
"These professionals are dedicated to engaging and understanding
their clients' needs and expectations," said Charles Allen, Crowe
Horwath CEO. "Their leadership has helped Crowe continue its
growth as a national firm."
About Crowe Horwath
Crowe Horwath LLP -- http://www.crowehorwath.com-- is one of the
largest public accounting and consulting firms in the United
States. Under its core purpose of "Building Value with
Values(R)," Crowe uses its deep industry expertise to provide
audit services to public and private entities, while also helping
clients reach their goals with tax, advisory, risk and performance
services. With offices coast to coast and 2,700 personnel, Crowe
is recognized by many organizations as one of the country's best
places to work. Crowe serves clients worldwide as an independent
member of Crowe Horwath International, one of the largest global
accounting networks in the world, consisting of more than 150
independent accounting and advisory services firms in more than
100 countries around the world.
* Texas Super Lawyers Recognizes SRW's Three Founding Partners
--------------------------------------------------------------
Craig Simon, Matt Ray and Dan Winikka, the three founding partners
of the Dallas, Texas firm of Simon, Ray & Winikka, have been
selected as 2013 Texas Super Lawyers, the annual listing of the
top lawyers in Texas as published in Texas Monthly magazine. Each
year, the research team from Super Lawyers, a Thomson Reuters
business, selects no more than 5% of the lawyers in Texas to
receive this honor. The rigorous selection process includes a
statewide survey of lawyers, an independent evaluation of
candidates and peer reviews by practice area.
Craig Simon, Matt Ray and Dan Winikka founded SRW --
http://www.srwlawfirm.com-- in 2012 after nearly two decades as
partners in one of the world's largest and most prominent law
firms. SRW's practice focuses on litigation of commercial,
bankruptcy and employment disputes, employment counseling, and
business restructuring.
* BOOK REVIEW: Bankruptcy Crimes
--------------------------------
Author: Stephanie Wickouski
Publisher: Beard Books
Softcover: 395 Pages
List Price: $124.95
http://is.gd/LuspaE
Review by Gail Owens Hoelscher
Did you know that you could be executed for non-payment of debt
in England in the 1700s? Or that the nailing of an ear was the
sentence for perjury in bankruptcy cases in 1604? While ruling
out such archaic penalties, Stephanie Wickouski does believe "in
the need for criminal sanctions against bankruptcy fraud and for
consistent, effective enforcement of those sanctions." She
decries the harm done to individuals through fraud schemes and
laments the resulting erosion in public confidence in the
judicial system. This leading authoritative treatise on the
subject of bankruptcy fraud, first published in August 2000 and
updated annually with new material, will prove invaluable for
bankruptcy law practitioners, white collar criminal
practitioners, and prosecutors faced with criminal activity in
bankruptcy cases. Indeed, E. Lawrence Barcella, Jr. of Paul,
Hastings, Janofsky, and Walker, in Washington, DC, says, "If I
were a lawyer involved in a bankruptcy matter, whether civil or
criminal, and had only one reference work that I could rely
upon, it would be this book." And, Thomas J. Moloney with
Cleary, Gottlieb, Steen & Hamilton describes the book as "an
essential reference tool."
An estimated ten percent of bankruptcy cases involve some kind
of abuse or fraud. Since launching Operation Total Disclosure in
1992, the U.S. Department of Justice has endeavored to send the
message that bankruptcy fraud will not be tolerated. Bankruptcy
judges and trustees are required to report suspected bankruptcy
212 crimes to a U.S. attorney. The decision to prosecute is
based on the level of loss or injury, the existence of sufficient
evidence, and the clarity of the law. In some cases, civil
penalties for fraud are deemed sufficient to punish and deter.
Ms. Wickouski suggests that some lawyers might not recognize
criminal activity that the DOJ now targets for investigation.
She gives several examples, including filing for bankruptcy
using an incorrect Social Security number, and receiving
payments from a bankruptcy debtor that were not approved by the
bankruptcy court. In both of these real life examples, DOJ
investigations led to convictions and jail time.
Ms. Wickouski says that although new schemes in bankruptcy fraud
have come along, others have been around for centuries. She
takes the reader through the most common traditional schemes,
including skimming, the bustout, the bleedout, and looting, as
well as some new ones, including the bankruptcy mill.
The main substance of Bankruptcy Crimes is Ms. Wickouski's
detailed analysis of the U.S. Bankruptcy Criminal Code, chapter
9 of title 18, the Federal Criminal Code. She painstakingly
analyzes each provision, carefully defining terms and providing
clear and useful examples of actual cases. She ends with a good
chapter on ethics and professional responsibility, and provides
a comprehensive set of annexes.
Bankruptcy Crimes is never dry, and some of the cases will make
you nostalgic for the days of ear-nailing. This comprehensive,
well researched treatise is a particularly invaluable guide for
debtors' counsel in dealing with conflicts, attorney-client
relationships, asset planning, and an array of legal and ethical
issues that lawyers and bankruptcy fiduciaries often face in
advising clients in financially distressed situations.
Stephanie Wickouski is a partner in the New York office of Bryan
Cave LLP. Her practice is concentrated in business bankruptcy,
insolvency, and commercial litigation.
This book may be ordered by calling 888-563-4573 or through your
favorite Internet bookseller or through your local bookstore.
*********
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 ***