/raid1/www/Hosts/bankrupt/TCR_Public/130925.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Wednesday, September 25, 2013, Vol. 17, No. 266
Headlines
7 WATERFRONT: Voluntary Chapter 11 Case Summary
710 LONG RIDGE: Oct. 11 Set as Admin. Expense Claims Bar Date
ADT CORP: S&P Assigns 'BB-' Rating to $1BB Senior Unsecured Notes
ALLEGION US: Moody's Rates New $300MM Senior Notes '(P)Ba2'
AMERICAN AIRLINES: Stock Recovers From Lows After Antitrust Suit
ARTESYN ESCROW: New $250MM Senior Notes Get Moody's 'B3' Rating
ARTESYN TECHNOLOGIES: S&P Assigns 'B' CCR & Rates $250MM Notes 'B'
BEALL CORP: Liquidating Plan Confirmed by Oregon Judge
BLACKBEAR TWO: Case Summary & 20 Largest Unsecured Creditors
BMC SOFTWARE: Moody's Lowers Non-Tendered Notes Rating to 'Caa1'
BOART LONGYEAR: Moody's Rates New $300MM Sr. Secured Notes 'B1'
CASPIAN ENERGY: Shares Delisted From Toronto Stock Exchange
CATALINA MARKETING: Moody's Rates First Lien Debt Facility 'B1'
CENGAGE LEARNING: Sues to Free $274 Million From Lenders' Liens
CENTRAL PACIFIC: Fitch Hikes Issuer Default Rating to 'BB+'
CHA CHA ENTERPRISES: Can Get Smith Commercial as Broker
CLAYTON WILLIAMS: Proposed $250MM Sr. Notes Get Moody's B3 Rating
COASTAL CONDOS: Gets Plan Outline OK; Nov. 6 Confirmation Set
COLOREP INC: Robert Katz to Serve as Chief Restructuring Officer
COMMUNITY HOME: Edwards Family, et al., Seek Case Dismissal
COMMUNITY HOME: Wants to Tap M. Trickey as Consultant/Expert
CROSSRHYTHM CHURCH: Case Summary & 20 Largest Unsecured Creditors
D&G RENTALS: District Court Stays Lawsuit Filed by J. Ashley
DALLAS ROADSTER: Gets Plan Outline Approval, Oct. 16 Hearing Set
DALLAS ROADSTER: Deadline to Confirm Plan Moved to Oct. 31
DALLAS ROADSTER: Oct. 16 and 17 Hearing on Plan Confirmation
DETROIT, MI: Citizens Vent Their Opposition to Bankruptcy
DEWEY STRIP: Ch. 11 Plan Provides Recovery to Secured Lenders Only
EASTMAN KODAK: Wins Approval to Reject Contracts With DTE, et al.
ECOTALITY INC: Battery-Charging System Sets Oct. 8 Auction
ENDICOTT INTERCONNECT: Committee Can Retain Arent Fox as Counsel
ENDICOTT INTERCONNECT: Panel Has OK for GlassRatner as Advisor
ENDICOTT INTERCONNECT: To Enter Into Amended Contract With Rossum
ENDICOTT INTERCONNECT: Has Continued Access to Cash Until Sept. 27
FAIRMONT GENERAL: CEO Marquardt Steps Down Following Bankruptcy
FLORIDA GAMING: Kapila & Company Hiring Approved
FORUM ENERGY: Moody's Rates $300MM Senior Notes 'Ba3'
FRIENDFINDER NETWORKS: Chapter 11 Plan Filed
FRIENDFINDER NETWORKS: Case Summary & Largest Unsecured Creditors
FURNITURE BRANDS: Seeks to Tap Epiq as Administrative Advisor
FURNITURE BRANDS: Stock Trading Procedures Has Interim Approval
FURNITURE BRANDS: Corrects List of Largest Unsecured Creditors
GATEHOUSE MEDIA: Begins Vote Solicitation on Prepack
GENERAL MOTORS: Fitch Rates New Unsecured Notes 'BB+'
GENERAL MOTORS: Improving Metrics Cue Moody's to Lift CFR to Baa3
GENERAL MOTORS: S&P Assigns 'BB+' Rating to Senior Unsecured Notes
GENTIVA HEATH: Moody's Retains Ratings Over Harden Transaction
GIBRALTAR KENTUCKY: Court Grants Motion to Convert Case to Ch. 7
GLOBAL ROCK: Case Summary & 20 Largest Unsecured Creditors
GM FINANCIAL: Moody's Eyes Upgrade for Ba3 CFR and Senior Debt
HAAS ENVIRONMENTAL: Can Access Cash Collateral Until Dec. 31
HAAS ENVIRONMENTAL: Can Employ Cozen O'Connor as Attorneys
HAAS ENVIRONMENTAL: Hiring Woodsworth & St. John as Accountants
HAAS ENVIRONMENTAL: Files Schedules of Assets and Liabilities
HAMPTON CAPITAL: Hires University Management as Collections Agent
HERCULES OFFSHORE: Commences Tender Offer & Consent Solicitation
HILTON WORLDWIDE: Moody's Keeps Ratings Over New Financing Deal
HOWARD HUGHES: Moody's Assigns Ba2 CFR & Rates $500MM Notes Ba3
HOWARD HUGHES: S&P Assigns 'B' CCR & Rates $500MM Notes 'B'
HOWREY LLP: Suit v. Jones Day Transferred to District Court
HOWREY LLP: Suit v. Kasowitz Benson Transferred to District Court
HOWREY LLP: Suit v. Neil Gerber Transferred to District Court
HOWREY LLP: Suit v. Pillsbury Winthrop Goes to District Court
HOWREY LLP: Suit v. Shearman & Sterling Goes to District Court
HOWREY LLP: Suit v. Venable Transferred to District Court
HRK HOLDINGS: Has Until Oct. 29 to File Chapter 11 Plan
HRK HOLDINGS: Hearing on DIP Financing Continued Until Sept. 26
HUDSON'S BAY: Moody's Gives 'B1' CFR & Rates $2BB Term Loan 'B1'
INFINIA CORPORATION: Case Summary & 20 Largest Unsecured Creditors
IRISH BANK RESOLUTION: Seeking Temporary Halt to Suits in the U.S.
ISAACSON STEEL: Exit Plan Built on Global Settlement Agreement
LATCO INC: Case Summary & 3 Unsecured Creditors
LEE'S FORD: Can Access BB&T Cash Collateral Until Oct. 10
LIGHTSQUARED INC: Court Orders Removal of Donna Alderman
LONGVIEW POWER: Kvaerner and Siemens Object to Cash Collateral Use
LONGVIEW POWER: Kvaerner & Siemens Want Arbitration to Proceed
LONGVIEW POWER: Taps James M. Grady as Chief Financial Officer
LONGVIEW POWER: Case Dominated by Arbitration Dispute
MARKET CENTER: Lodestar Factors Always Required on Fee Apps
MERCANTILE BANCORP: Defends Bid to Sell Bank Shares, Trademark
MF GLOBAL: Executives Denied $10 Million Defense Costs for Now
MI PUEBLO: Wells Defers Request for Add'l Adequate Protection Lien
MITCHELL INTERNATIONAL: Moody's Assigns 'B3' CFR; Outlook Stable
MONTANA ELECTRIC: 4 Remaining Members Sue to Invalidate Contracts
MORGANS HOTEL: 40 North Management Held 5.4% Stake at Sept. 11
MPG OFFICE: BPO Further Extends Tender Offer Until Sept. 30
MSI CORPORATION: No Unsecured Creditors Committee Appointed
MUELLER WATER: Moody's Hikes CFR to B2; Outlook Stable
NIELSEN COMPANY: $500MM Senior Notes Issue Gets Moody's B2 Rating
NMP-GROUP: Sec. 341 Creditors' Meeting Today
NNN CYRPRESSWOOD: Has Until Oct. 27 to File Exit Plan
NNN CYPRESSWOOD: Oct. 23 Hearing on Motion to Dismiss Case
NNN PARKWAY: Files Chapter 11 Plan; Disclosures Hearing Oct. 23
NNN PARKWAY: WBCMT Wants Stay Relief Hearing Continued to Nov. 6
NOVA TERRA: Case Summary & 20 Largest Unsecured Creditors
ORMET CORP: Emergency Payment Motion Approved
PATRIOT COAL: Arch Coal Produces Documents for Creditors
PERSONAL COMMUNICATIONS: May Hire Goodwin Procter as Lead Counsel
PERSONAL COMMUNICATIONS: Can Employ Togut Segal as Co-Counsel
PERSONAL COMMUNICATIONS: Epiq Approved as Administrative Advisor
PERSONAL COMMUNICATIONS: Can Employ Richter as Financial Advisor
PHYSIOTHERAPY ASSOCIATES: Preparing for Prepack Chapter 11
PLASTIPAK HOLDINGS: S&P Rates $300MM Unsecured Notes 'B+'
PLATINUM PROPERTIES: Hires Thomas C. Scherer as Mediator
PROCTOR HOSPITAL: Moody's Eyes Upgrade for B2 Long-Term Rating
QUBEEY INC: Taps Greenberg & Bass as Attorneys
QUBEEY INC: Has Until Sept. 27 to File SALs and SOFA
REEVES DEVELOPMENT: Plan Outline Hearing Continued Until Oct. 31
RENAISSANCE LEARNING: Moody's Changes Ratings Outlook to Negative
RENAISSANCE LEARNING: S&P Rates $330MM Sr. Sec. Facilities 'B+'
RESIDENTIAL CAPITAL: Oct. 15 Trial in Battle vs. Jr. Noteholders
RG STEEL: Asks Court to Approve Settlement With ACI, et al.
SCICOM DATA: U.S. Trustee Appoints 3-Member Creditors Committee
SHELF DRILLING: Moody's Assigns B2 Rating to New $450MM Term Loan
SINCLAIR TELEVISION: Moody's Rates 1st Lien Debt Facilities Ba1
SOUTH FLORIDA SOD: Barfield Approved as Auctioneer
SOUTH FLORIDA SOD: Daniel Dempsey Okayed as Financial Advisor
SOUTH FLORIDA SOD: Gets OK to Hire John Moore as Special Counsel
SOUTH FLORIDA SOD: Wallace T. Long Approved as Accountants
STOCKTON, CA: Citizens May Sue Over Tax Hike Balloting
STOCKTON, CA: To Present Draft of Repayment Plan Friday
STOCKTON, CA: Has Tentative Agreement With Ice Hockey Team
STRATHMORE GROUP: Case Summary & Unsecured Creditor
T-L BRYWOOD: Defends Exclusivity Extension Bid
TEN SAINTS: Court Confirms Plan of Reorganization
TERRA-GEN FINANCE: Fitch Affirms 'BB-' Rating on $310MM Loans
TMS INT'L: Moody's Rates $400MM Term Loan Ba3 & $300MM Notes B3
TMT GROUP: Seeks Longer Exclusivity Period From District Judge
TNP STRATEGIC: Two Law Firms File Securities Class Action
TRIUS THERAPEUTICS: Suspending Filing of Reports with SEC
TRIZETTO GROUP: Weak Performance Cues Moody's to Cut CFR to B3
UHF DEVELOPMENT: LVW's Claim Subordination Lawsuit Dismissed
US AIRWAYS: S&P Raises CCR to 'B' & Revises Outlook to Stable
VALITAS HEALTH: Moody's Cuts CFR to B3 Over Poor Performance
VULPES LLC: Case Summary & 20 Largest Unsecured Creditors
WARNER SPRINGS: Court Denies Employment of Lee Stegall
WARNER SPRINGS: Dec. 5 Hearing on Adequacy of Plan Outline
WHITING PETROLEUM: Moody's Rates $400MM Notes 'Ba2'
WINDOTS DEVELOPMENT: Court to Hear Dismissal Motion on Oct. 10
ZALADO INC: Case Summary & 15 Largest Unsecured Creditors
* Fitch Takes Rating Actions on 9 Community Banks
* Fitch Says EPA Proposal Would Limit Public Power's Options
* Fitch Says California Schools Still Face Financial Risks
* Upcoming Meetings, Conferences and Seminars
*********
7 WATERFRONT: Voluntary Chapter 11 Case Summary
-----------------------------------------------
Debtor: 7 Waterfront Property LLC
1877 East 9th Street
Brooklyn, NY 11223
Bankruptcy Case No.: 13-45658
Chapter 11 Petition Date: September 18, 2013
Court: U.S. Bankruptcy Court
Eastern District of New York (Brooklyn)
Judge: Nancy Hershey Lord
Debtor's Counsel: David Carlebach, Esq.
LAW OFFICES OF DAVID CARLEBACH, ESQ.
40 Exchange Place, Suite 1306
New York, NY 10005
Tel: (212) 785-3041
Fax: (646) 355-1916
E-mail: david@carlebachlaw.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Company did not file a list of creditors together with its
petition.
The petition was signed by Yehuda Leib Puretz, managing member.
710 LONG RIDGE: Oct. 11 Set as Admin. Expense Claims Bar Date
-------------------------------------------------------------
At the behest of 710 Long Ridge Road Operating Company II, LLC et
al, the U.S. Bankruptcy Court established Oct. 11, 2013, at 5:00
p.m. as the deadline for filing administrative expense claims.
Attorneys for 710 Long Ridge can be reached at:
Michael D. Sirota, Esq.
David M. Bass, Esq.
Ryan T. Jareck, Esq.
COLE, SCOTZ, MEISEL, FORMAN & LEONARD, P.A.
Court Plaza North
25 Main Street
P.O. Box 800
Hackensack, NJ 07602-0800
Tel: (201) 489-3000
Fax: (201) 489-1536
About 710 Long Ridge Road Operating Company II
710 Long Ridge Road Operating Company II, LLC and four affiliates
own sub-acute and long-term nursing care facilities for the
elderly in Connecticut. The facilities, which are managed by
HealthBridge Management LLC, are Long Ridge of Stamford, Newington
Health Care Center, Westport Health Care Center, West River Health
Care Center, and Danbury Health Care Center.
710 Long Ridge Road Operating Company II and its affiliates sought
Chapter 11 protection (Bankr. D.N.J. Case Nos. 13-13653 to 13-
13657) on Feb. 24, 2013, to modify their collective bargaining
agreements with the New England Health Care Employees Union,
District 1199, SEIU.
The Debtors owe $18.9 million to M&T Bank and $7.99 million on
loans from the U.S. Department of Housing and Urban Development
Federal Housing Administration.
Lawyers at Cole, Schotz, Meisel, Forman & Leonard, serve as
counsel to the Debtors. Logan & Company, Inc. is the claims and
notice agent. Alvarez & Marsal Healthcare Industry Group, LLC, is
the financial advisor.
Porzio, Bromberg & Newman, P.C., represents the Official Committee
of Unsecured Creditors. The Committee tapped EisnerAmper LLP as
accountant.
ADT CORP: S&P Assigns 'BB-' Rating to $1BB Senior Unsecured Notes
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB-' issue-level
rating to Boca Raton, Fla.-based ADT Corp.'s $1 billion new senior
unsecured notes, with a recovery rating of '3', indicating S&P's
expectation of meaningful (50%-70%) recovery in the event of a
payment default.
Proceeds from the notes will be used primarily to repay
$150 million outstanding under ADT's revolving credit facility,
repurchase outstanding shares of its common stock, and for general
corporate purposes including acquisitions. The use of proceeds is
consistent with the company's financial policy announced in July
2013, which over time will result in leverage of 3.0x
(corresponding to Standard & Poor's adjusted leverage in the high-
5x area).
The 'BB-' corporate credit rating on ADT is indicative of its
"significant" business risk profile and "highly leveraged"
financial risk profile. The current rating reflects S&P's
expectation that adjusted leverage will remain below the mid-6x
level. Pro forma for the proposed issue, ADT will still have
incremental debt capacity at the current rating level.
RATINGS LIST
The ADT Corp.
Corporate Credit Rating BB-/Stable/--
New Rating
The ADT Corp.
$1 bil. notes due 2021
Senior Unsecured BB-
Recovery Rating 3
ALLEGION US: Moody's Rates New $300MM Senior Notes '(P)Ba2'
-----------------------------------------------------------
Moody's Investors Service assigned a (P) Ba2 rating to Allegion
U.S. Holding Company Inc.'s proposed $300 million Senior Unsecured
Notes, due 2021. Concurrently, Moody's affirmed the company's a
Ba1 Corporate Family Rating, Ba1-PD Probability of Default Rating,
and SGL-2 Speculative-Grade Liquidity (SGL) Rating. The ratings
outlook is stable.
Moody's anticipates that the proceeds from the proposed $300
million Senior Unsecured Notes, 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, affirmed at Ba1;
Probability of Default Rating, affirmed at Ba1-PD;
$300 million Senior Unsecured Notes, due 2021, assigned (P) Ba2
(LGD5, 87%);
Speculative-Grade Liquidity Rating, affirmed at SGL-2.
If the transaction closes as currently proposed, Moody's will
remove the provisional rating indicator "(P)" from the $300
million Senior Unsecured Notes, due 2021, and replace the rating
with Ba2.
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.
AMERICAN AIRLINES: Stock Recovers From Lows After Antitrust Suit
----------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that AMR Corp. and US Airways Group Inc. are increasingly
likely to defeat the government's antitrust lawsuit, allowing the
two airlines to merge, in the view of traders pushing up the
carriers' stocks.
According to the report, US Airways stock finally recovered ground
lost when the antitrust suit was filed in August. AMR stock is
the highest since the suit was filed, although not to levels
before government intervened to block implementation of the
Chapter 11 plan.
The antitrust trial is scheduled to begin in late November.
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 bankruptcy judge on Sept. 12, 2013, confirmed AMR Corp.'s plan
to exit bankruptcy through a merger with US Airways. By
distributing stock in the merged airlines, the plan is designed to
pay all creditors in full, with interest.
Judge Sean Lane confirmed the Plan despite the lawsuit filed by
the U.S. Department of Justice and several states' attorney
general complaining that the merger violates antitrust laws. The
plan confirmation order means that if AMR and US Airways win the
Justice Department lawsuit or settle with the government, the
merger plan can go into effect.
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)
ARTESYN ESCROW: New $250MM Senior Notes Get Moody's 'B3' Rating
---------------------------------------------------------------
Moody's Investors Service assigned B2 Corporate Family and B2-PD
Probability of Default ratings to Artesyn Escrow, Inc. as well as
a B3 rating to the company's $250 million of senior secured notes.
The rating outlook is stable.
Artesyn Escrow, Inc. will merge into Artesyn Technologies, Inc.
upon consummation of a transaction in which affiliates of Platinum
Equity Advisors, LLC will purchase a 51% stake in the embedded
computing & power business of Emerson Electric Company (Emerson;
A2/Prime-1). Equity from the Platinum affiliates along with
proceeds from the note will fund a payment to Emerson who will
retain a 49% interest. Artesyn's primary products include
application specific, customized power conversion products and
microprocessor based boards and systems used in the telecom,
computing & storage industries as well as in hand held devices and
equipment used in the industrial, medical, military, aerospace and
other sectors.
Ratings Rationale:
Artesyn's B2 Corporate Family rating considers its position as a
leader within its niche with appropriate scale, technical
capabilities, well established relationships with major telecom
and technology firms, global presence and a competitive cost
structure. These strengths are offset by recent pressure on
revenue and profitability, comparatively thin margins, and a
leveraged capital structure. The ratings further incorporate
attributes of being a supplier to large OEM customers who can
exercise considerable economic heft in negotiating terms as well
as the impact of having both captive and merchant suppliers of
product that can exacerbate volume and price competition in the
merchant sector. Similarly, Artesyn's customer and revenue bases
reflect a fair degree of concentration which, along with
industry/sector traits, constrain the rating to the B2 category
despite moderate financial leverage for the rating category.
The stable rating outlook flows from expectations of sustained
volumes and profitability, albeit at relatively low margins, free
cash flow generation, the absence of any material debt
amortization requirements over the intermediate term, and
availability under the company's asset backed revolving credit
facility (not rated).
Ratings could be lowered if the company experiences meaningful
deterioration in its margins or negative free cash flow, or if
debt/EBITDA rose above 5 times. In addition, EBITA/interest below
1.25 times for several quarters could produce downward pressure.
Conversely, debt/EBITDA less than 3 times and EBITA/interest
greater than 3 times could result in stronger ratings.
Ratings assigned:
Corporate Family, B2
Probability of Default, B2-PD
$250 million senior secured notes, B3, LGD-5, 72%
The B3 rating on the senior secured notes, one notch below the
CFR, recognizes weak recovery prospects in downside scenarios. The
company's $75 million asset backed revolving credit will have a
first lien against the company's domestic working capital assets
as well as over assets of the company's Hong Kong subsidiary.
Nearly all of Artesyn's earnings, cash flows and much of its "hard
assets" are located in offshore subsidiaries who will not be
guarantors of debt lodged at the US borrower. Trade creditors at
those international entities will also be structurally superior to
the notes. As a result, there will be little cushion provided by
unsecured obligations at the issuer level to absorb losses in
downside scenarios.
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.
Artesyn Technologies, Inc. will be headquartered in Carlsbad, CA.
Annual revenues are approximately $1.3 billion.
ARTESYN TECHNOLOGIES: S&P Assigns 'B' CCR & Rates $250MM Notes 'B'
------------------------------------------------------------------
Standard & Poor's Ratings Services said it assigned a 'B'
corporate credit rating to Columbus, Ohio-based Artesyn
Technologies Inc., formerly the embedded power systems division of
Emerson Electric Co. The outlook is stable.
S&P also assigned a 'B' issue-level rating to Artesyn's proposed
$250 million senior secured notes due 2020. The recovery rating
is '3', reflecting S&P's expectation for meaningful (50% to 70%)
recovery of the notes' principal in the event of default.
"The ratings on Artesyn reflect the company's 'vulnerable'
business risk profile as a competitor within a highly fragmented
electronics sub-systems industry and its 'highly leveraged
financial risk profile," said Standard & Poor's credit analyst
John Moore.
Artesyn provides embedded systems, including electrical power
supply and conversion systems for computing, telecommunication
equipment, industrial, and other original equipment manufacturers.
Product quality and cost efficient manufacturing processes support
the company's competitive position.
The stable outlook reflects S&P's expectation that Artesyn will
reverse revenue declines over the coming year, supported by new
business wins, particularly within the wireless device charger
market. S&P could lower the rating were the company's recent
business turnaround to prove unsustainable and revenue declines to
continue such that free cash flow were to become negative and
leverage were to approach 5x or more. Given the company's
challenges to stem revenue declines, an upgrade is unlikely over
the coming year.
BEALL CORP: Liquidating Plan Confirmed by Oregon Judge
------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Beall Corp. is set to emerge from Chapter 11 with a
liquidating plan approved on Sept. 18 when the bankruptcy judge in
Portland, Oregon, signed a confirmation order.
Wabash National Corporation on Feb. 4 successfully closed on its
acquisition of certain assets of Beall's tank and trailer business
for $15 million. According to the report, secured lender Key Bank
NA was owed $13.4 million. Although most of the net sale proceeds
went to the bank, the lender hadn't been paid in full.
The report notes that the bank demanded $2 million Beall was
holding after the sale. The result was a settlement giving the
bank $1.3 million while the company kept the rest. Creditors
voted almost unanimously in favor of a plan dealing with claims
ranging from $8 million to $20 million.
About Beall Corporation
Portland, Oregon-based Beall Corporation, a manufacturer of
lightweight, efficient, and durable tanker trucks, trailers and
related products, filed a Chapter 11 bankruptcy petition (Bankr.
D. Ore. Case No. 12-37291) on Sept. 24, 2012, estimating at least
$10 million in assets and liabilities. Founded in 1905, Beall has
four factories and nine sale branches across the U.S. The Debtor
has 285 employees, with an average weekly payroll of $300,000.
Judge Elizabeth L. Perris presides over the case. Albert N.
Kennedy, Esq. at Tonkon Torp LLP represents the Debtor in its
restructuring effort. The Debtor disclosed, in an amended
schedules $14,015,232 in assets and $29,187,325 in liabilities as
of the Chapter 11 filing.
Robert D. Miller Jr., the U.S. Trustee for Region 18, appointed
six members to the official committee of unsecured creditors.
Ball Janik LLP represents the Committee.
BLACKBEAR TWO: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Blackbear Two, LLC
dba Magical Midway
7001 International Drive
Orlando, FL 32819
Bankruptcy Case No.: 13-11557
Chapter 11 Petition Date: September 18, 2013
Court: U.S. Bankruptcy Court
Middle District of Florida (Orlando)
Debtor's Counsel: Justin M. Luna, Esq.
LATHAM, SHUKER, EDEN & BEAUDINE, LLP
P.O. Box 3353
Orlando, FL 32802-3353
Tel: (407) 481-5800
Fax: (407) 481-5801
E-mail: jluna@lseblaw.com
Estimated Assets: $50,001 to $100,000
Estimated Debts: $500,001 to $1,000,000
The Company's list of its 20 largest unsecured creditors filed
with the petition is available for free at:
http://bankrupt.com/misc/flmb13-11557.pdf
The petition was signed by Tracy Kircher, vice president/manager.
BMC SOFTWARE: Moody's Lowers Non-Tendered Notes Rating to 'Caa1'
----------------------------------------------------------------
Moody's Investors Service downgraded the ratings of the non-
tendered 4.25% and 4.50% senior unsecured notes due 2022 of BMC
Software Inc. to Caa1 from Baa2, rating under review. BMC Software
Inc. is a subsidiary of BMC Software Finance Inc. (B2 corporate
family rating). BMC Software Finance Inc. was set up to finance
the acquisition of BMC Software Inc. by a group of private equity
firms led by Bain Capital and Golden Gate Capital.
Rating Rationale
Approximately $46 million of the $500 million 4.25% senior
unsecured notes due 2022 and $30 million of the $300 million 4.50%
senior unsecured notes due 2022 were not tendered at the expiry of
the tender process on September 5, 2013 according to a company SEC
filing. The tender offer was subsequently extended until September
9, 2013 but final tendered amounts have not been disclosed. The
non-tendered bonds have been stripped of their change of control
provisions. The ratings are the same as the existing $300 million
7.25% senior unsecured notes due 2018 which had agreed to waive
the change of control provisions and remain in place after the
close of the acquisition. The 7.25% notes were previously
downgraded to Caa1 from Baa2 pending closing of the acquisition.
Although the non-tendered bonds have a slightly weaker guarantee
package than the $1.625 billion senior unsecured notes issued to
fund BMC's leveraged buyout, the difference was not sufficient to
drive a difference in the ratings. The debt instrument ratings
were determined in conjunction with Moody's Loss Given Default
methodology.
Legal names for the various debt issuing entities have been
finalized as well as amounts of the various debt facilities as
follows:
BMC Software Finance Inc. (formerly called BMC U.S. Co)
Corporate Family Rating: B2
Probability of Default: B2-PD
$350mm SR SEC REVOLVING CREDIT FACILITY due 2018, B1, 33 - LGD3
(revised from 35 - LGD3)
$2880mm SR SEC TERM LOAN due 2020, B1, 33 - LGD3 (revised from
35 - LGD3)
$1625mm SR NOTES due 2021, Caa1, 88 - LGD5
Ratings Outlook: Stable
ESM Foreign Holdco, Inc. (formerly called BMC Foreign Co.)
$335M Sr. SR SEC TERM LOAN (EU) due 2020, Ba3, 32 - LGD3
EUR500 M SR SEC TERM LOAN (EU) due 2020, Ba3, 32 - LGD3
Ratings Outlook: Stable
BMC Software Inc.
Ratings Downgraded:
$300mm SR NOTES due 2018, Caa1 (LGD5, 88%) from Baa2
$30 mm (originally $300mm) SR NOTES due 2022, Caa1 (LGD5, 88%)
from Baa2
$46mm (originally $500mm) SR GLOBAL NOTES due 2022, Caa1 (LGD5,
88%) from Baa2
Ratings Outlook: Stable
The principal methodology used in this rating was Global Software
Industry published in October 2012. Other methodologies used
include Loss Given Default for Speculative-Grade Non-Financial
Companies in the U.S., Canada and EMEA published in June 2009.
BMC is a provider of a broad range IT management software tools
and had revenues of $2.2 billion for the twelve months ended
June 30, 2013. The company is headquartered in Houston, TX.
BOART LONGYEAR: Moody's Rates New $300MM Sr. Secured Notes 'B1'
---------------------------------------------------------------
Moody's Investors Service assigned a B1 rating to the proposed
$300 million senior secured notes due 2018 ("2018 Secured Notes")
being offered by Boart Longyear Management Pty Limited, a
subsidiary of Boart Longyear Limited. Boart and certain other
subsidiaries will guarantee the notes. The rating assumes that the
final documentation will be in line with the terms Moody's has
reviewed. Moody's also withdrew the B1 rating on the $260 million
senior secured notes and the B3 rating on the $40 million senior
unsecured notes, which are being replaced by the proposed $300
million senior secured note issue. The new rating along with
Boart's existing B2 corporate family rating, B2-PD probability of
default rating and B3 rating on its outstanding senior unsecured
notes remain under review for downgrade. Moody's expects to
confirm the ratings at the current level if the offering is
executed under the currently proposed terms. The SGL-4 Speculative
Grade Liquidity rating is unchanged.
Assignments:
Issuer: Boart Longyear Management Pty Limited
Senior Secured Regular Bond/Debenture, Assigned B1, LGD3, 33%
Withdrawals:
Issuer: Boart Longyear Management Pty Limited
Senior Secured Regular Bond/Debenture, Withdrawn, previously rated
B1, LGD3, 39%
Senior Unsecured Regular Bond/Debenture, Withdrawn, previously
rated B3, LGD5, 70%
The B1 senior secured notes will have a first priority security
interest in certain fixed assets of the issuer and its guarantor
subsidiaries and a second priority security interest in working
capital assets collateralizing the amended revolver. Given the
uncertainty of recovery levels of the pledged assets securing the
notes, many of which are located overseas, it has applied a 20%
deficiency factor under Moody's loss given default methodology.
The rating on the notes reflects the stronger position of this
instrument in the capital structure and the level of unsecured
debt beneath the notes.
The company intends to use the net proceeds from the 2018 Secured
Notes offering to repay substantially all borrowings under its
existing revolving credit facility ($305 million as of June 30,
2013).
The company is also pursuing an amendment to its revolver. The
amendment will, among other proposed features, reduce the revolver
size to a total of $140 million from $450 million, eliminate the
maximum debt-to-EBITDA covenant, adjust the minimum interest
coverage ratio and add a minimum liquidity covenant (unrestricted
cash plus revolver availability) of $30 million and a minimum
asset coverage ratio covenant. Furthermore, the amended revolver
will be secured up to $120 million and provide a first priority
security interest in working capital assets (including accounts
receivables and inventory) of the issuer and its guarantor
subsidiaries, and second priority interest in the secured notes'
collateral. The remaining $20 million revolver commitment will be
unsecured and reserved for the issuance of letters of credit.
Ratings Rationale:
The B2 Corporate Family Rating reflects the contraction in the
company's core business evidenced by the pull back in exploration
and drilling expenditures as well as new capital investments by
Boart's principal end user market - the mining industry. This is a
result of the downward trend through the first half of 2013 in
metal prices, particularly for gold and copper. These metals
accounted for roughly 42% and 20% of Boart's revenues,
respectively, during the first half of 2013. The corporate family
rating recognizes the company's position as a leading global
supplier of drilling services and complementary drilling products,
principally to the mineral mining industry but also to the
environmental and infrastructure end markets.
Other rating considerations include the company's relatively small
size, and its need to invest in drilling equipment and inventory
in more robust market conditions.
Although Boart's performance through the first half of 2013 was
reasonably in line with expectations, the risk of further downward
pressure on rig utilization and backlog levels remains elevated,
likely resulting in a weaker second half of 2013 and continued
pressure on 2014 performance . Moody's anticipates that debt-to-
EBITDA will further deteriorate over the next 12 to 18 months and
will likely exceed 7.0 times while (EBITDA minus CAPEX)-to-
interest will remain below 1.0 time, respectively. Downside risk
remains given the ongoing weakness in metal prices and likely
further rationalization by the mining industry on expenditure
levels over the intermediate term.
The rating also contemplates that the company will be able to
achieve cost savings to mitigate a portion of the negative impact
on performance from the retreat in drilling activity with its
implementation of announced cost reductions, including work force
reductions, and rationalization of planned CAPEX. The rating also
anticipates that working capital conversion, as high inventory
levels at year-end 2012 are liquidated throughout 2013, along with
the paring of CAPEX, will substantially reduce cash consumption
and reliance on additional borrowings under the company's
revolving credit facility.
The SGL-4 speculative grade liquidity rating reflects the
expectation of more limited internal cash flow generation to
support the business, the potential for increased contingent
liabilities such as letters of credit to support security
requirements while Boart appeals the assessments of the Canadian
Revenue Agency, and the decline in cash balances ($34 million at
June 30, 2013 from $90 million at December 31, 2012) due to the
contraction in financial performance and substantial historical
CAPEX and working capital buildup.
The review for downgrade will focus on the successful conclusion
of the proposed notes offering and proposed amendments to the
revolver. Should the transactions be completed under the terms
currently proposed, the corporate family, probability of default
and instrument ratings will likely be confirmed at the current
levels and the SGL rating will likely be changed to SGL-3.
The principal methodology used in this rating was the Global
Business & Consumer Service Industry Rating Methodology published
in October 2010. Other methodologies used include Loss Given
Default for Speculative-Grade Non-Financial Companies in the U.S.,
Canada and EMEA published in June 2009.
Headquartered in South Jordan, Utah, Boart Longyear is
incorporated in Australia and listed on the Australian Securities
Exchange Limited. The company provides drilling services, and
complimentary drilling products and equipment principally for the
mining and metals industries. Revenues for the twelve months ended
June 30, 2013 were $1.6 billion. Revenues in fiscal 2012 were $2
billion.
CASPIAN ENERGY: Shares Delisted From Toronto Stock Exchange
-----------------------------------------------------------
Caspian Energy Inc. on Sept. 24 disclosed that Caspian's shares
have been delisted from the Toronto Stock Exchange and are now
listed on NEX. Trading of Caspian's shares is currently suspended
as Caspian's securities are cease traded. In order for Caspian's
shares to begin trading, the cease trade order on Caspian's
securities will need to be revoked and a NEX reinstatement review
will need to be completed.
Default
As reported by the Troubled Company Reporter on Aug. 29, 2013,
Caspian had received notices of failures to make a payment from
Meridian Capital International Fund, Firebird Global Master Fund,
Ltd. and Firebird Avrora Fund, Ltd. under Caspian's Amended and
Restated Convertible Debentures dated July 8, 2011 for failure to
pay the principal amount on the maturity date of June 2, 2013.
The terms of the Convertible Debentures provide that a default
occurs if there is a failure to pay principal on maturity and such
failure to pay is not remedied within 30 days after receipt of
written notice from the holder. In the event of a default by the
Company under the Convertible Debentures, which default is not
cured or waived, the Convertible Debenture Holders may accelerate
the terms of payment and enforce the security they hold over the
assets of the Company. Caspian disclosed that each of the
Convertible Debenture Holders has agreed to extend the period to
remedy such failure to pay until September 26, 2013. The
aggregate principal amount of the Convertible Debentures is
US$12,460,957.
About Caspian Energy Inc.
Caspian Energy Inc. is an oil and gas exploration company
operating in Kazakhstan where it has a number of targets in the
highly prospective Aktobe Oblast of Western Kazakhstan. Caspian
Energy holds these assets by virtue of its 40% equity stake in
Aral Petroleum Capital LLP (which as noted in Caspian's material
change report of June 24, 2013 will be reduced to 33.5% upon
satisfaction or waiver of all conditions precedent in a purchase
and sale agreement). Aral Petroleum Capital LLP holds an
exclusive license, which entitles it to explore and develop
certain oil and gas properties known as a "North Block", an area
of 1500 sq.km. as well as a 25-year production contract for the
East Zhagabulak field. The Company's license area lies
immediately adjacent to the various producing fields, including
the Alibekmola, Zhanazhol, and Kenkiyak fields.
CATALINA MARKETING: Moody's Rates First Lien Debt Facility 'B1'
---------------------------------------------------------------
Moody's Investors Service assigned a B1 rating to the proposed
first lien credit facility of Catalina Marketing Corporation and
affirmed the B2 Corporate Family Rating of its parent company,
Checkout Holding Corp. The company plans to use proceeds of
approximately $955 million from the proposed first lien term loan
combined with balance sheet cash of approximately $110 million to
refinance existing Catalina debt, including approximately $550
million of first lien bank debt, $330 million of 10.5% senior
unsecured notes, and $160 million of 11.625% senior subordinated
notes.
Moody's also maintained the stable outlook. Moody's expects to
withdraw ratings on the existing Catalina debt securities assuming
close of the transaction as proposed.
Checkout Holding Corp.
Corporate Family Rating, Affirmed B2
Probability of Default Rating, Affirmed B2-PD
10.125% Senior Discount Notes due 2015, Affirmed Caa1, LGD
adjusted to LGD6, 90% from LGD6, 91%
Outlook, Remains Stable
Catalina Marketing Corporation
Senior Secured Bank Credit Facility, Assigned B1, LGD3, 36%
Outlook, Remains Stable
Ratings Rationale:
The transaction extends Checkout's maturity profile and will lower
annual interest expense. Furthermore, the use of balance sheet
cash to repay debt represents a favorable commitment to improving
the credit profile, and Moody's estimates leverage will decline to
approximately 6 times debt-to-EBITDA pro forma for the transaction
from 6.5 times as of June 30. Moody's includes the 10.125% PIK
bonds at Checkout in all leverage calculations, and these bonds
will remain outstanding following the proposed refinancing.
Based on the proposed capital structure, first lien bank debt will
comprise almost three-quarters of total debt. Bank lenders benefit
will benefit from a modest cushion of junior capital provided by
the Checkout bonds, supporting the B1 rating one notch above the
B2 CFR. The existing capital structure prior to the refinancing
contains a much more substantial layer of junior capital
consisting of bonds at both Checkout and Catalina, which supports
the Ba2 rating on the existing first lien debt.
Checkout's B2 CFR continues to incorporate the high gross
leverage, and the PIK accretion on its senior discount notes (over
$35 million annually) raises the hurdle for growth or debt
repayment merely to maintain leverage. Competition from digital
and mobile marketing service providers and changing consumer
behavior elevate business risk as the company's core consumer
packaged goods (CPG) clients diversify their marketing budgets
away from traditional print based promotions to brand building and
experiment with other means of reaching consumers that technology
advances are enabling. Checkout's leading position in Point of
Sale marketing services, the breadth of its retail base, its data
on purchasing history, and its long term relationships with both
retailers and CPG manufacturers position it well to manage the
evolving landscape and expand its digital presence, but execution
risk exists. The EBITDA margin eroded as the company invested to
adapt, but Moody's expects it to stabilize around current still
healthy levels, and the strong EBITDA margin together with a good
liquidity profile provide flexibility for investment in new
business development. Continued international expansion of
Checkout's retail base provides good growth prospects, which
partially mitigates revenue concentration. However, Moody's
believes lack of scale limits the company's ability to invest in
its digital presence.
The stable outlook incorporates expectations for EBITDA growth,
continued positive free cash flow generation, and for gross
leverage to trend below 6 times debt-to-EBITDA over the next year,
driven by the combination of EBITDA growth and some debt
repayment. The stable outlook also assumes timely refinancing of
the Checkout notes due November 2015, which is key given
expectations for the proposed first lien credit facility to
contain a provision that could accelerate its maturity to August
2015 if the holding company bonds have not been refinanced and
performance falls short of expectations.
Moody's would consider a downgrade based on expectations for
leverage sustained above 6.5 times debt-to-EBITDA, whether due to
weak performance or an increase in debt. Deterioration of the
liquidity profile could also have negative ratings implications.
The high leverage, sponsor ownership, and fundamental changes in
the company's business environment limit upward ratings momentum.
Moody's would consider a positive rating action with expectations
for sustained leverage of 5 times debt-to-EBITDA or better and
sustained free cash flow in excess of 8% of debt. An upgrade would
also require maintenance of good liquidity, evidence of success in
the business transition with expectations for EBITDA growth, and
more clarity on the fiscal strategy.
The principal methodology used in this rating was the Global
Broadcast and Advertising Related Industries Methodology published
in May 2012. Other methodologies used include Loss Given Default
for Speculative-Grade Non-Financial Companies in the U.S., Canada
and EMEA published in June 2009.
Catalina Marketing Corp., headquartered in St. Petersburg, FL,
provides consumer-driven digital media solutions, including
discount coupons, loyalty marketing programs, pharmacist and
patient education newsletters and other consumer communications,
through a variety of distribution channels like supermarkets and
pharmacies as well as via mobile and online. The company operates
in three business segments: Catalina U.S. (CUS, approximately 68%
of total revenue) supports CPG manufacturers and retailers by
providing consumers with customized communications and coupons at
the checkout lanes of retailers and via mobile and online;
Catalina International (CI, approximately 23% of total revenue)
operates internationally (France, Italy, UK, Germany, Japan,
Belgium and the Netherlands) in a similar manner as the domestic
CUS business; and Catalina Health (CH, approximately 9% of total
revenue) allows pharmaceutical manufacturers and retail pharmacies
to provide consumers with condition-specific health information.
Checkout Holding Corp. is Catalina's parent company. Hellman &
Friedman acquired Catalina in a 2007 leveraged buyout. Revenue for
the 12 months ending June 30 was $661 million.
CENGAGE LEARNING: Sues to Free $274 Million From Lenders' Liens
---------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the fate of Cengage Learning Inc.'s unsecured
creditors in the publisher's bankruptcy depends in part on whether
secured lenders have valid liens on everything they claim as
collateral.
According to the report, the second-largest college textbook
publisher in the U.S. filed a lawsuit on Sept. 20 asking the
bankruptcy judge in Brooklyn, New York, to declare that the first-
lien lenders don't have a lien on $273.9 million held in a money-
market account. There is also a dispute over whether lenders'
liens on 15,500 copyrights can be voided under Cengage's powers in
bankruptcy.
The report notes that in March, Cengage drew down remaining
availability on the first-lien revolving credit and deposited the
proceeds in a money-market account. The loan agreement with
JPMorgan Chase Bank NA, as agent for the lenders, says the secured
creditors won't have liens on any shares of a company that didn't
guarantee the debt.
The report relates that the money market investment represents
shares in a fund that didn't guarantee the debt. Consequently,
Stamford, Connecticut-based Cengage says, the money-market account
is excluded from the lenders' liens. Cengage has a plan on file
and a Sept. 27 hearing for approval of disclosure materials. The
company said it would file a revised plan and disclosure materials
by Oct. 11.
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.
CENTRAL PACIFIC: Fitch Hikes Issuer Default Rating to 'BB+'
-----------------------------------------------------------
Following Fitch Rating's community bank peer review, Fitch has
upgraded Central Pacific Financial's (CPF) Long-Term Issuer
Default Rating (IDR) to 'BB+' from 'BB-'. The Rating Outlook is
Stable. Please refer to the press release: 'Fitch Takes Rating
Actions on Its Community Bank Group Following Peer Review' dated
Sept. 23, 2013 for a discussion of rating actions taken on the
community banks.
Key Rating Drivers - IDR & VR
Fitch Ratings has upgraded the Long-Term IDRs of CPF due to faster
than anticipated reductions of problem loans without taking
sizeable credit losses. The ratings upgrade also reflects strong
reserves, improved financial performance and removal of its
regulatory written agreement.
Nonperforming assets (NPAs) declined from 8.3% to 3.7% year over
year, while keeping net charge-offs low. Net charge-offs have
remained below 0.2% and 0.3% in 2013 and 2012 respectively. Fitch
believes CPF's ability to reduce NPAs with limited losses
demonstrates an improving local economy and conservative marks on
its non-performing and other real estate owned (OREO) properties.
Fitch expects continued reductions of NPAs in the near term.
Fitch believes CPF has the capacity to release at least $30
million of reserves over the medium term. CPF carries a 3.6%
reserve balance against loans 'collectively evaluated for
impairment', which are typically performing loans. Banks of
similar size typically maintain roughly 1.5% reserve coverage for
its performing loan portfolio. As such, Fitch believes CPF will
continue to release reserves over the medium term, which will
continue to augment earnings.
Regulators recently terminated a safety and soundness enforcement
actions against CPF. Fitch believes this further demonstrates that
the bulk of its legacy asset quality and risk management problems
are under control. While a compliance MOU remains outstanding,
Fitch believes the financial and operational impact to the company
will be limited.
Capital levels are strong, but Fitch expects capital levels to be
optimized in the near term. At present CPF's capital levels are
the highest amongst its community bank peer group with a 13.38%
tangible common equity ratio. During the first half of 2013, CPF
eliminated two hurdles which prevented capital reductions in the
past. First, the written agreement requiring approval to pay bank
dividends was terminated. Second, CPF became current on its
accrued dividends outstanding on its trust preferred securities.
The company resumed dividends to common shareholders after second
quarter.
Rating Sensitivities - IDR & VR
CPF's ratings can move higher if NPAs continue to decline and
credit costs remain low. Further, resolution of the bank's
compliance MOU could also generate positive ratings momentum.
Fitch also recognizes the overall organizational and risk
management improvement led by CEO John Dean. His leadership has
been viewed positively by Fitch. However, given his strengths,
key-man risk is a ratings constraint. Although nothing has been
communicated to Fitch suggesting management change, a succession
plan could improve positive ratings prospects.
Negative ratings pressure could build if CPF builds lending
concentrations outside its core markets or if the Hawaii economy
deteriorates significantly. Additionally, increasing NPAs or
credit costs could negatively pressure ratings.
Fitch has upgraded the following ratings:
Central Pacific Financial Corp.
-- Long-term IDR to 'BB+' from 'BB-';
-- Viability rating to 'bb+' from 'bb-'
Central Pacific Bank
-- Long-term IDR to 'BB+' from 'BB-';
-- Viability Rating to 'bb+' from 'bb-';
-- Long-term deposits to 'BBB-' from 'BB';
CPB Capital Trust I, II & IV
CPB Statutory Trust III & V
-- Trust preferred securities to 'BB-' from 'CC'
Fitch has affirmed the following ratings:
Central Pacific Financial Corp.
-- Short-term IDR at 'B';
-- Support Rating Floor at 'NF';
-- Support affirmed at '5'.
Central Pacific Bank
-- Short-term IDR at 'B'
-- Short-term deposits at 'B'
-- Support Rating Floor at 'NF';
-- Support Rating at '5'
CHA CHA ENTERPRISES: Can Get Smith Commercial as Broker
-------------------------------------------------------
Cha Cha Enterprises, LLC, obtained permission from the U.S.
Bankruptcy Court for the Northern District of California to hire
Smith Commercial Management, Inc., as real estate broker.
Smith Commercial will be assisting the Debtor's marketing efforts
for the sale of a 1.03-acre lot property located in San Jose,
California. The property has an assessed value of $2.2 million.
About Cha Cha Enterprises
Cha Cha Enterprises, LLC, is a California limited liability
company formed in 1998 to purchase a fee interest in property
located at 1775 Story Road, San Jose, California and a leasehold
interest in property located at 1745 Story Road in San Jose. Cha
Cha's primary business is the rental of real property.
Cha Cha filed a Chapter 11 petition (Bankr. N.D. Calif. Case
No. 13-53894) on July 22, 2013. The Debtor estimated at least
$10 million in assets and liabilities.
Steven H. Felderstein, Esq., at Felderstein Fitzgerald Willoughby
& Pascuzzi LLP serves as counsel to the Debtor.
Nicolas De Lancie, Esq., at Jeffer Mangels Butler & Mitchell LLP
Robert B. Kaplan, P.C. represents secured creditor Wells Fargo
Bank, N.A.
CLAYTON WILLIAMS: Proposed $250MM Sr. Notes Get Moody's B3 Rating
-----------------------------------------------------------------
Moody's Investors Service assigned a B3 rating to Clayton Williams
Inc.'s proposed $250 million senior unsecured notes due 2020.
Proceeds from the offering will be used to repay outstanding
revolver borrowings. The outlook is stable.
Ratings assigned:
Issuer: Clayton Williams Energy Inc.
New $250 million senior unsecured notes due 2020, Assigned B3 LGD-
5 (73%)
Ratings Rationale:
"This transaction will help reduce revolver borrowings and free up
liquidity for Clayton Williams," said Michael Somogyi, Moody's
Vice President. "This liquidity will help the company finance
capital expenditures for the remainder of 2013 and 2014."
CWEI's B2 Corporate Family Rating reflects the company's oil
weighted production profile and reserve base, high level of
operating control of its property base, its migration to
properties with longer reserve lives and a capital budget that is
primarily focused on developmental drilling in order to increase
its oil production. The rating also reflects the company's
seasoned management team that has operated through numerous sector
cycles.
CWEI's stable outlook reflects the expectation of strong cash flow
generation and capital discipline combined with strategic actions
to support debt reduction. It is unlikely that CWEI will be
upgraded in the near term primarily due to its high leverage on
production and PD reserves. If debt/average daily production is
sustained below $45,000 or retained cash flow/debt sustained above
30%, with expectations of continued de-leveraging, then the
ratings may be considered for an upgrade. The company's ratings
could be downgraded if debt/average daily production exceeds
$55,000 on a sustained basis or retained cash flow/debt is
sustained below 20%.
The principal methodology used in this rating was the Global
Independent Exploration and Production Industry Methodology
published in December 2011. Other methodologies used include Loss
Given Default for Speculative-Grade Non-Financial Companies in the
U.S., Canada and EMEA published in June 2009.
Clayton Williams Energy Inc. which is headquartered in Midland,
Texas is engaged in the exploration and production of oil, natural
gas liquids and natural gas.
COASTAL CONDOS: Gets Plan Outline OK; Nov. 6 Confirmation Set
-------------------------------------------------------------
Chief Judge Emeritus A. Jay Cristol approved in early September
the Disclosure Statement describing Coastal Condos, LLC's Chapter
11 Plan as containing adequate information.
The Bankruptcy Court will convene a hearing on Nov. 6, 2013, at
2:00 p.m. to consider confirmation of the Plan and fee application
requests.
Parties-in-interest have until Oct. 23 to file any formal
objections to Plan confirmation.
Meanwhile, the deadline for the filing of fee applications in the
case is set for Oct. 16.
Creditors eligible to vote on the Plan have until Oct. 23 to do
so.
The Debtor also has until Sept. 27 to file objections to claims.
As reported by The Troubled Company Reporter on July 12, 2013, the
Chapter 11 Plan provides for the utilization of all Coastal
Condos' assets consisting of 72 condominium units to fund payment
to creditors. The Debtor is requesting that the claims of First
Equitable Realty III, Ltd. ("FER") in Class 5 be subordinated to
all other creditors and claimants, except for claims in Class 6
(Subordinated Claims, Penalty Claims, Securities Law Claims,
Disallowed Claims) and Class 7 (Allowed Equity Holder Interest).
Only when creditors other than FER have been paid in full, will
distributions be made to FER Allowed Claims. FER has $17,615,322
claim. The Debtor disputes the claim and deems FER an unsecured
creditor due to its decision not to record its mortgage in the
public land records. The Plan also provides for 100% repayment of
all allowed general unsecured claims including the subordinated
claim of FER.
Full-text copies of the Plan and Disclosure Statement are
available at http://bankrupt.com/misc/coastalcondos.doc36.pdf
About Coastal Condos
Coastal Condos filed a Chapter 11 petition (Bankr. S.D. Fla. Case
No. 13-20729) on May 8, 2013. The Debtor owns and manages 72
condominiums at 7601 East Treasure Drive, Miami Beach, FL 33141.
Judge A. Jay Cristol presides over the case.
David R. Softness,Esq., at David R. Softness, P.A., in Miami,
Florida, represents the Debtor as counsel. Roy H. Lidell, Esq.,
of Wells Marble and Hurst, PLLC, as well as David M. Rogero, P.A.,
serve as special counsel to the Debtor.
Coastal Condos was the target of a $15.8 million foreclosure
lawsuit filed by North Bay Village-based First Equitable Realty
III in May 2012.
Coastal Condos owns 72 condo units at Grandview Palace in North
Bay Village, Florida, valued at $10.8 million. Personal property
is valued at $389,000. Assets total $11.2 million and liabilities
total $16.6 million. It says that no creditors are holding
secured claims.
Coastal Condos first sought Chapter 11 protection (Bankr. S.D.
Miss. Case No. 12-07146) on May 25, 2012. The case was dismissed
May 6, 2013.
Until further notice, the U.S. Trustee will not appoint a
committee of creditors in the Debtor's case.
COLOREP INC: Robert Katz to Serve as Chief Restructuring Officer
----------------------------------------------------------------
Colorep Inc. sought and obtained approval from the U.S. Bankruptcy
Court to employ Executive Sounding Board Associates Inc. to
provide Crisis Management Services and provide Robert D. Katz to
Serve as Chief Restructuring Officer.
Colorep Inc., an industrial printer from Harrisonburg, Virginia,
filed for Chapter 11 protection (Bankr. C.D. Calif. Case No.
13-27689) on July 10, 2013, in Los Angeles, owing $17 million to
secured lender Meserole LLC. The company licenses a fabric-dyeing
process known as AirDye. Colorep's subsidiary Transprint USA Inc.
also filed in Chapter 11. Transprint produces transfer-printing
paper.
Stutman, Treister & Glatt, P.C. represents Colorep as
reorganization counsel while Stubbs, Alderton & Markiles LLP
serves as special corporate counsel.
Meserole, LLC, is represented by Frank T. Pepler, Esq., and Stuart
M. Brown, Esq., at DLA Piper LLP (US).
COMMUNITY HOME: Edwards Family, et al., Seek Case Dismissal
-----------------------------------------------------------
Edwards Family Partnership, LP and Beher Holdings Trust ask Judge
Edward Ellington to dismiss or, in the alternative, convert the
bankruptcy case of Community Home Financial Services, Inc. into a
Chapter 7 proceeding.
Counsel to EFP and BHT, Jim F. Spencer, Jr., Esq. --
jspencer@watkinseager.com -- of Watkins & Eager PLLC, relates that
95% of the Debtor's assets are either loans EFP and BHT own or
loans that serve as collateral for EFP and BHT's claim.
Mr. Spencer contends that the Debtor has no possibility of
reorganization as its expenses are increasing and its revenues are
decreasing. He adds that there are few, if any, other creditors
involved in the dispute with EFP and BHT holding 99% of the claims
in the case.
On behalf of the Debtor, Mr. Spencer asserts that the Debtor filed
the case solely to hinder its creditors and use its creditor's
assets to fund litigation against it.
About Community Home
Community Home Financial Services, Inc., filed a Chapter 11
petition (Bankr. S.D. Miss. Case No. 12-01703) on May 23, 2012.
Community Home Financial is a specialty finance company located in
Jackson, Mississippi, providing contractors with financing for
their customers. CHFS operates from one central location
providing financing through its dealer network throughout 25
states, Alabama, Delaware, and Tennessee. The Debtor scheduled
$44,890,581 in total assets and $30,270,271 in total liabilities.
Judge Edward Ellington presides over the case.
Derek A. Henderson, Esq., Jonathan Bisette, Esq., and Roy Liddell,
Esq., of Wells, Marble & Hurst, PLLC, serve as counsel to the
Debtor.
A Plan of Reorganization and Disclosure Statement have been filed
in the case. Under the Plan, the Debtor intends to utilize all
assets consisting of mortgage loan portfolios and joint ventures
to fund payment to creditors. The Plan provides for 100%
repayment of Allowed Claims. The Disclosure Statement has been
approved.
COMMUNITY HOME: Wants to Tap M. Trickey as Consultant/Expert
------------------------------------------------------------
Community Home Financial Services, Inc., seeks court authority to
employ Michael W. Trickey, managing director of Berkshire
Advisors, LLC, as consultant and/or potential expert for portfolio
valuation. To the best of the Debtor's knowledge, Mr. Trickey
represents no interest adverse to the Debtor or the estate on
which they are to be engaged.
About Community Home
Community Home Financial Services, Inc., filed a Chapter 11
petition (Bankr. S.D. Miss. Case No. 12-01703) on May 23, 2012.
Community Home Financial is a specialty finance company located in
Jackson, Mississippi, providing contractors with financing for
their customers. CHFS operates from one central location
providing financing through its dealer network throughout 25
states, Alabama, Delaware, and Tennessee. The Debtor scheduled
$44,890,581 in total assets and $30,270,271 in total liabilities.
Judge Edward Ellington presides over the case.
Derek A. Henderson, Esq., Jonathan Bisette, Esq., and Roy Liddell,
Esq., of Wells, Marble & Hurst, PLLC, serve as counsel to the
Debtor.
A Plan of Reorganization and Disclosure Statement have been filed
in the case. Under the Plan, the Debtor intends to utilize all
assets consisting of mortgage loan portfolios and joint ventures
to fund payment to creditors. The Plan provides for 100%
repayment of Allowed Claims. The Disclosure Statement has been
approved.
CROSSRHYTHM CHURCH: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: CrossRhythm Church, Inc.
aka Chesapeake Christian City Church, Inc.
1024 E. College Parkway
Annapolis, MD 21409
Bankruptcy Case No.: 13-25833
Chapter 11 Petition Date: September 18, 2013
Court: U.S. Bankruptcy Court
District of Maryland (Baltimore)
Judge: Robert A. Gordon
Debtor's Counsel: John C. Gordon, Esq.
JOHN C. GORDON, P.A.
532 Baltimore & Annapolis Boulevard
Severna Park, MD 21146-3818
Tel: (410) 340-0808
Fax: (410) 544-1244
E-mail: johngordon@me.com
Estimated Assets: $500,001 to $1,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Company's list of its 20 largest unsecured creditors is
available for free at:
http://bankrupt.com/misc/mdb13-25833.pdf
The petition was signed by Michael J. Berry, president and
trustee.
D&G RENTALS: District Court Stays Lawsuit Filed by J. Ashley
------------------------------------------------------------
In an Aug. 29, 2013 order, District Judge J. Leon Holms held that
the action JIMMY ASHLEY, Plaintiff, v. GO-DO ENTERPRISES, INC.;
and D&G RENTALS, LLC, Defendants, Case No. 3:12CV00303 (E.D.
Ark.), must be stayed by virtue of D&G Rentals' notice of filing
for Chapter 11 bankruptcy protection.
The Clerk of the Court is directed to terminate the action
administratively. It will be reopened upon the filing of notice
that the automatic stay has been lifted.
A copy of the District Court's order is available at
http://is.gd/F8XrlOfrom Leagle.com.
Plaintiff Jimmy Ashley is represented by Edward I. Zwilling, Esq.
of Schwartz Zweben & Slingbaum LLP at 3876 Sheridan St, Hollywood,
FL 33021.
Defendants Go-Do Enterprises Inc. and D&G Rentals are represented
by Mark Alan Mayfield, Esq. -- mmayfield@wpmfirm.com -- at Womack,
Phelps & McNeil, P.A.
DALLAS ROADSTER: Gets Plan Outline Approval, Oct. 16 Hearing Set
----------------------------------------------------------------
Judge Brenda Rhoades entered a corrected order on Sept. 20
approving the Disclosure Statement describing the Plan of
Reorganization, as amended, filed by Dallas Roadster, Limited and
IEDA Enterprise Inc.
The judge ruled that the Fourth Amended Disclosure Statement,
corrected on Sept. 9, 2013, contains adequate information.
The only difference between the Sept. 9 Disclosure Statement and
the version filed on Aug. 20 is a change to the document attached
as Exhibit 2 to the Third Amended Plan.
A full-text copy of the Sept. 9 Disclosure Statement is available
for free at http://bankrupt.com/misc/DALLASROADSTER_DSSept9.PDF
A hearing will be held on Oct. 16 to 17 to consider confirmation
of the Plan. Formal objections on the plan confirmation may be
filed no later than Oct. 14.
Creditors eligible to vote have until Oct. 14 to cast in their
ballots on the Plan.
As reported on Sept. 11, 2013 by The Troubled Company Reporter,
the Plan is based on Dallas Roadster continuing its operations as
it has in the past. Payment of all claims against Dallas Roadster
is made from revenue generated by the Debtor's operations. The
Plan proposes full payment of all Allowed Claims. The Plan also
contemplates that onerous operating restrictions imposed by Texas
Capital Bank will be removed, thus providing Dallas Roadster with
a greater opportunity to return to its previous profitability than
has been available to it while its bankruptcy case has been
pending.
The Amended Disclosure Statement relates that as Dallas Roadster's
general partner, IEDA Enterprise, is liable for all debts of
Dallas Roadster. Thus, to the extent claims against Dallas
Roadster are addressed by the Plan, IEDA Enterprise's liability on
those claims will be resolved. The claims addressed by IEDA
Enterprise include only those claims that have not been asserted
against Dallas Roadster.
About Dallas Roadster and IEDA Enterprises
Dallas Roadster, Limited, owns and operates an auto dealership
with locations in both Richardson and Plano, Texas. IEDA
Enterprises, Inc., is the general partner of Roadster.
Dallas Roadster and IEDA Enterprises filed for Chapter 11
bankruptcy (Bankr. E.D. Tex. Case Nos. 11-43725 and 11-43726) on
Dec. 12, 2011. Chief Judge Brenda T. Rhoades oversees both cases.
J. Bennett White, P.C., replaced DeMarco Mitchell, PLLC, as the
Debtors' bankruptcy counsel. Dallas Roadster disclosed $9,407,469
in assets and $4,554,517 in liabilities as of the Chapter 11
filing.
The Debtors' assets were placed under the care of a receiver on
Nov. 16, 2011, pursuant to a state court action by Texas Capital
Bank, National Association.
No trustee has been appointed in the Chapter 11 cases.
DALLAS ROADSTER: Deadline to Confirm Plan Moved to Oct. 31
----------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Texas signed
off on an agreed order extending until Oct. 31, 2013, Dallas
Roadster Limited, et al.'s time to:
1. confirm a Plan of Reorganization; or
2. convert the cases to Chapter 7 of the Bankruptcy Code.
The agreement entered between the Debtor and William T. Neary, the
U.S. Trustee for Region 6, also provides that:
-- if the Debtors fail to timely comply with the case
resolution deadline, the U.S. Trustee may then upload an
order converting the cases to Chapter 7, without any
requirement for further notice or hearing; provided,
however, the Debtors may obtain an extension of the case
resolution deadline for cause on motion filed before that
deadline; and
-- the order will prohibit the U.S. Trustee from filing
any future motion to dismiss or convert.
As reported in the Troubled Company Reporter on Sept. 11, 2013,
the Debtors, in a second request for exclusivity extension,
explained that presuming the disclosure statement is approved on
Sept. 9, there is insufficient time for a confirmation hearing to
be scheduled prior to the current Sept. 30 deadline.
The U.S. Trustee objected to the Debtors' motion. In the
alternative, the U.S. Trustee wanted a limited extension of the
case resolution deadline until Oct. 18, 2013. Texas Capital Bank,
N.A., by and through Kenneth Stohner, Jr., Esq. -- kstohner@jw.com
-- at Jackson Walker L.L.P., filed a joinder to the U.S. Trustee's
objection.
About Dallas Roadster and IEDA Enterprises
Dallas Roadster, Limited, owns and operates an auto dealership
with locations in both Richardson and Plano, Texas. IEDA
Enterprises, Inc., is the general partner of Roadster.
Dallas Roadster and IEDA Enterprises filed for Chapter 11
bankruptcy (Bankr. E.D. Tex. Case Nos. 11-43725 and 11-43726) on
Dec. 12, 2011. Chief Judge Brenda T. Rhoades oversees both cases.
J. Bennett White, P.C., replaced DeMarco Mitchell, PLLC, as the
Debtors' bankruptcy counsel. Dallas Roadster disclosed $9,407,469
in assets and $4,554,517 in liabilities as of the Chapter 11
filing.
The Debtors' assets were placed under the care of a receiver on
Nov. 16, 2011, pursuant to a state court action by Texas Capital
Bank, National Association.
No trustee has been appointed in the Chapter 11 cases.
DALLAS ROADSTER: Oct. 16 and 17 Hearing on Plan Confirmation
------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Texas will
convene a two-day hearing on Oct. 16 and 17, 2013 at 9:00 a.m., to
consider the confirmation of Dallas Roadster, Limited and Ieda
Enterprise, Inc.'s Chapter 11 Plan. Objections, if any, are due
Oct. 9.
On Sept. 10, the Court approved the corrected Disclosure Statement
dated Sept. 9, 2013, as containing adequate information.
As reported in the Troubled Company Reporter on Sept. 11, 2013,
according to the Amended Disclosure Statement, as Dallas
Roadster's general partner, IEDA Enterprise, is liable for all
debts of Dallas Roadster.
The Plan is based on Dallas Roadster continuing its operations as
it has in the past. Payment of all claims against Dallas Roadster
is made from revenue generated by the Debtor's operations. The
Plan proposes full payment of all Allowed Claims.
The Plan also contemplates that onerous operating restrictions
imposed by Texas Capital Bank will be removed, thus providing
Dallas Roadster with a greater opportunity to return to its
previous profitability than has been available to it while this
Bankruptcy Case has been pending.
A copy of the Disclosure Statement is available for free at
http://bankrupt.com/misc/DALLAS_ROADSTER_4ds.pdf
About Dallas Roadster and IEDA Enterprises
Dallas Roadster, Limited, owns and operates an auto dealership
with locations in both Richardson and Plano, Texas. IEDA
Enterprises, Inc., is the general partner of Roadster.
Dallas Roadster and IEDA Enterprises filed for Chapter 11
bankruptcy (Bankr. E.D. Tex. Case Nos. 11-43725 and 11-43726) on
Dec. 12, 2011. Chief Judge Brenda T. Rhoades oversees both cases.
J. Bennett White, P.C., replaced DeMarco Mitchell, PLLC, as the
Debtors' bankruptcy counsel. Dallas Roadster disclosed $9,407,469
in assets and $4,554,517 in liabilities as of the Chapter 11
filing.
The Debtors' assets were placed under the care of a receiver on
Nov. 16, 2011, pursuant to a state court action by Texas Capital
Bank, National Association.
No trustee has been appointed in the Chapter 11 cases.
DETROIT, MI: Citizens Vent Their Opposition to Bankruptcy
---------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that three dozen Detroit residents and city workers each
had three minutes in court yesterday to voice their opposition the
city's eligibility for Chapter 9 municipal bankruptcy.
According to the report, the bankruptcy judge will hold a hearing
on Oct. 15 and 16 to hear argument on eligibility issues that
don't depend on factual disputes. A trial to sort out factual
disputes on eligibility begins Oct. 23. In Chapter 9
bankruptcies, unlike individual or business bankruptcies, the
judge must make a threshold decision on whether the municipality
qualifies for bankruptcy.
The report notes that whether the bankruptcy judge will rule at
all on issues involving Michigan state law and the state and
federal constitutions is yet to be seen. Some opponents lodged
papers in federal district court contending those issues are
beyond the purview of a bankruptcy judge who's not appointed for
life.
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 STRIP: Ch. 11 Plan Provides Recovery to Secured Lenders Only
------------------------------------------------------------------
Dewey Strip Holdings, LLC, et al., filed with the U.S. Bankruptcy
Court for the District of Delaware a joint plan of reorganization
and accompanying disclosure statement.
On the Confirmation Date, Manchester Leasing Inc. will make a cash
capital contribution to each Reorganized Debtor in an amount
sufficient to pay in full all unclassified claims (administrative
and priority claims).
The Plan classifies five claim classes -- Class 1 Senior Secured
Claim of Senior Secured Lenders; Class 2 Junior Lien Claim of
Junior Lienholders; Class 3 General Unsecured Claims; Class 4
Unsecured Affiliate Claims of each of the Debtors; and Class 5
Equity Interest Holders.
Holders of Class 2 through 5 Claims will receive no distribution
under the Plan. Only the Class 2 Secured Lenders Claim will be
entitled to vote on the Plan. As of the Petition Date, the Senior
Secured Lenders have a $215,000,000 claim against the Debtors.
The Plan was signed by Martin H. Walrath, IV. A full-text copy of
the Disclosure Statement dated Sept. 9, 2013 is available for free
at http://bankrupt.com/misc/DEWEYSTRIP_DSSept9.PDF
The Debtors are represented by:
NEAL WOLF & ASSOCIATES, LLC
Neal L. Wolf, Esq.
Moshin N. Khambati, Esq.
155 N. Wacker Drive, Suite 1910
Chicago, IL 60606
Tel No: (312) 228-4990
Fax No: (312) 228-4988
Email: nwolf@nealwolflaw.com
mkhambati@nealwolflaw.com
-- and --
WOMBLE CARLYLE SANDRIDGE & RICE LLP
Steven K. Kortanek, Esq.
Ericka F. Johnson, Esq.
Wilmington, DE 19801
Tel No: (302) 252-4320
Fax No: (302) 252-4330
Email: skortanek@wcsr.com
erjohnson@wcsr.com
About Dewey Strip
Las Vegas, Nevada-based Dewey Strip Holdings LLC and Las Vegas
North Strip Holdings Syndications Group LLC sought Chapter 11
protection (Bankr. D. Del. Case Nos. 13-11479 and 13-11480) on
June 7, 2013, in Delaware, without stating a reason.
Each debtor, a Single Asset Real Estate as defined in 11 U.S.C.
Sec. 101(51B), estimated at least $10 million in assets and at
least $100 million in liabilities. In its schedules, Dewey Strip
Holdings disclosed $35,000,000 and $243,573,461 in liabilities as
of the Petition Date.
The petitions were signed by Martin H. Walrath, IV, vice-president
of International Property Syndications, Ltd., as manager and sole
member.
Neal L. Wolf, Esq., Mohsin N. Khambati, Esq., John A. Benson, Jr.,
Esq., Michael R. Wanser, Esq. and Sandy Holstrom, Esq. of Neal
Wolf & Associates, LLC, act as bankrupty counsel to the Debtors.
Steven K. Kortanek, Esq., Thomas M. Horan, Esq., and Ericka F.
Johnson, Esq. of Womble Carlyle Sandridge & Rice, LLP, serve as
co-counsel.
EASTMAN KODAK: Wins Approval to Reject Contracts With DTE, et al.
-----------------------------------------------------------------
Eastman Kodak Co. received the green light from U.S. Bankruptcy
Judge Allan Gropper to reject its contracts with Champion
Photochemistry Inc., DTE Rochester LLC, EKP Mechanical LLC and
Power & Construction Group Inc. The contracts are listed at:
http://is.gd/8JtH23
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 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.
U.S. Bankruptcy Judge Allan Gropper confirmed the plan on August
20, 2013. Kodak and its affiliated debtors officially emerged
from bankruptcy protection on Sept. 3, 2013.
Mark S. Burgess, Matt Doheny, John A. Janitz, George Karfunkel,
Jason New and Derek Smith became members of Kodak's new board of
directors as of Sept. 3, 2013. Existing directors James V.
Continenza, William G. Parrett and Antonio M. Perez will continue
their service as members of the new board.
ECOTALITY INC: Battery-Charging System Sets Oct. 8 Auction
----------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Ecotality Inc., a developer of charging systems for
electric vehicles, will be sold at auction on Oct. 8.
According to the report, the bankruptcy judge in Phoenix approved
on Sept. 19 procedures under which bids are due initially on
Oct. 7. No buyer is under contract. A purchaser with a suitable
offer can earn "stalking-horse" status, making it eligible for a
breakup fee of 2 percent if someone else prevails at the auction
on Oct. 8. A hearing to approve the sale is set for Oct. 9. The
bankruptcy judge also gave interim approval for $1.25 million in
financing from Nissan North America Inc. The final financing
hearing will take place Oct. 3
About Ecotality Inc.
Headquartered in San Francisco, California, Ecotality, Inc.
(Nasdaq: ECTY) -- http://www.ecotality.com-- is a provider of
electric transportation and storage technologies.
Ecotality Inc. along with affiliates including lead debtor
Electric Transportation Engineering Corp. sought Chapter 11
protection (Bankr. D. Ariz. Lead Case No. 13-16126) on Sept. 16,
2013, with plans to sell the business at an auction the following
month.
The cases are assigned to Chief Judge Randolph J. Haines. The
Debtors' lead counsel are Charles R. Gibbs, Esq., at akin gump
Strauss Hauer & Feld LLP, in Dallas, Texas; and David P. Simonds,
Esq., and Arun Kurichety, Esq., at Akin Gump Strauss Hauer & Feld
LLP, in Los Angeles, California. The Debtors' local counsel is
Jared G. Parker, Esq., at Parker Schwartz, PLLC, in Phoenix,
Arizona. The Debtors' claims & noticing agent is Kurtzman Carson
Consultants LLC.
Electric Transportation estimated assets of $10 million to $50
million and debt of $100 million to $500 million. Unlike most
companies in bankruptcy, Ecotality has no secured debt. It simply
ran out of money. There's $5 million owing on convertible notes,
plus liability on leases. Part of pre-bankruptcy financing took
the form of a $100 million cost-sharing grant from the U.S. Energy
Department. In view of the San Francisco-based company's
financial problems, the government cut off the grant when $84.8
million had been drawn.
ENDICOTT INTERCONNECT: Committee Can Retain Arent Fox as Counsel
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of New York
authorized the Official Committee of Unsecured Creditors of
Endicott Interconnect Technologies Inc., et al., to retain Arent
Fox LLP as counsel for the Committee.
As reported in the TCR on Aug. 20, 2013, Robert M. Hirsh, Esq.,
will be primarily responsible for Arent Fox's representation of
the Committee.
The hourly rates of Arent Fox's personnel are:
Partners $495 - $800
Of Counsel $485 - $765
Associates $275 - $525
Paraprofessionals $150 - $270
To the best of the Committee's knowledge, Arent Fox is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
About Endicott Interconnect
Endicott Interconnect Technologies, Inc., and its affiliates filed
a Chapter 11 petition (Bankr. N.D.N.Y. Case No. 13-bk-61156) in
Utica, New York, on July 10, 2013, to sell the business before
cash runs out by the end of September. David Van Rossum is the
Debtors' sole officer. Bond, Schoeneck & King, PLLC, is counsel
to the Debtor.
Based in Endicott, New York, and formed in 2002, EIT is the
successor to the microelectronics division of IBM Corp. The
products are used in aerospace, defense and medication
applications, among others.
The company sought Chapter 11 bankruptcy protection after
suffering $100 million in operating losses in the last four years.
In addition to $16 million in secured claims, trade suppliers are
owed $34 million. There is another $32 million owing for loans
made by shareholders. The company said the book value of property
is $36 million.
An official committee of unsecured creditors has been appointed in
the case with Avnet Electronics Marketing, Arrow Electronics,
Inc., Acbel Polytech, Inc., Cadence Design Systems, Inc.,
Orbotech, Inc., Tyco Electronics, and High Performance Copper
Foil, Inc. as members. The committee is represented by Arent Fox
LLP.
The business will be sold at auction on Sept. 24. Bids are due
Sept. 19. The hearing to approve sale is set for Sept. 26. The
first bid of $250,000 is coming come from an insider group. The
purchase offer is from company owned by minority shareholder James
T. Matthews. In addition to the cash, he would assume a
$6.1 million secured term loan of which he is already the owner.
There is about $10 million owing on two other secured loans.
The official creditors' committee said there could be
$20.8 million in claims to bring against insiders. In August, the
judge authorized the committee to conduct an investigation of the
insiders.
ENDICOTT INTERCONNECT: Panel Has OK for GlassRatner as Advisor
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of New York
authorized the Official Committee of Unsecured Creditors of
Endicott Interconnect Technologies, Inc., et al., to retain
GlassRatner Advisory & Capital Group, LLC, as financial advisor to
the Committee, nunc pro tunc to July 19, 2013.
As reported in the TCR on Aug. 30, 2013, the Committee
contemplates utilizing GlassRatner to aid in the valuation of the
Debtors' assets, cash flows and restructuring efforts.
GlassRatner's hourly billing rates are:
Principals: $500 to $600
Directors & Managing Directors: $350 to $500
Managers & Senior Managers: $250 to $350
Associates & Paraprofessionals: $150 to $250
The firm will also seek reimbursement of reasonable out-of-pocket
expenses related to the contemplated services to be rendered.
The Committee believes that GlassRatner is a "disinterested
person" within the meaning of Sec. 101(14) of the Bankruptcy Code.
About Endicott Interconnect
Endicott Interconnect Technologies, Inc., and its affiliates filed
a Chapter 11 petition (Bankr. N.D.N.Y. Case No. 13-bk-61156) in
Utica, New York, on July 10, 2013, to sell the business before
cash runs out by the end of September. David Van Rossum is the
Debtors' sole officer. Bond, Schoeneck & King, PLLC, is counsel
to the Debtor.
Based in Endicott, New York, and formed in 2002, EIT is the
successor to the microelectronics division of IBM Corp. The
products are used in aerospace, defense and medication
applications, among others.
The company sought Chapter 11 bankruptcy protection after
suffering $100 million in operating losses in the last four years.
In addition to $16 million in secured claims, trade suppliers are
owed $34 million. There is another $32 million owing for loans
made by shareholders. The company said the book value of property
is $36 million.
An official committee of unsecured creditors has been appointed in
the case with Avnet Electronics Marketing, Arrow Electronics,
Inc., Acbel Polytech, Inc., Cadence Design Systems, Inc.,
Orbotech, Inc., Tyco Electronics, and High Performance Copper
Foil, Inc. as members. The committee is represented by Arent Fox
LLP.
The business will be sold at auction on Sept. 24. Bids are due
Sept. 19. The hearing to approve sale is set for Sept. 26. The
first bid of $250,000 is coming come from an insider group. The
purchase offer is from company owned by minority shareholder James
T. Matthews. In addition to the cash, he would assume a
$6.1 million secured term loan of which he is already the owner.
There is about $10 million owing on two other secured loans.
The official creditors' committee said there could be
$20.8 million in claims to bring against insiders. In August, the
judge authorized the committee to conduct an investigation of the
insiders.
ENDICOTT INTERCONNECT: To Enter Into Amended Contract With Rossum
-----------------------------------------------------------------
Endicott Interconnect Technologies, Inc., et al., ask the U.S.
Bankruptcy Court for the Northern District of New York for
permission to enter into an amended employment agreement with
David W. Van Rossum.
According to papers filed with the Court, since the Petition Date,
in addition to performing his role as the Debtor's sole officer, a
significant portion of Mr. Van Rossum's time was focused on
marketing and sale of the Debtor's assets.
The sales efforts included the assembly and analysis of an
extraordinary amount of due diligence material, detailed meetings
and telephone conferences with representatives of numerous
prospective purchasers, coordinating sale inquiries with financial
advisor Feather Lane Advisors, LLC, analyzing the bids received
from all bidders and negotiating with the bidders at the sale
auction.
The terms of the Amended Employment Agreement with Mr. Van Rossum
provide that Mr. Van Rossum will continue to receive his current
base salary of $250,000 per year plus benefits in exchange for
continuing to serve as the Debtor's sole officer. The Agreement
also provides Mr. Van Rossum with the opportunity to earn a Sale
Incentive Bonus upon the consummation of a successful sale of all
or substantially all of the Debtor's assets.
The amount of the Sale Incentive Bonus will be calculated based
upon the total transaction value received by the Debtor for its
assets and will range from $50,000 to a maximum of $125,000.
Mr. Van Rossum will also receive $50,000 in exchange for his
covenant not to engage in activities in competition with the
Debtor's business for a period of one year following the
termination of his employment with the Debtor.
About Endicott Interconnect
Endicott Interconnect Technologies, Inc., and its affiliates filed
a Chapter 11 petition (Bankr. N.D.N.Y. Case No. 13-bk-61156) in
Utica, New York, on July 10, 2013, to sell the business before
cash runs out by the end of September. David W. Van Rossum is the
Debtors' sole officer. Bond, Schoeneck & King, PLLC, is counsel
to the Debtor.
Based in Endicott, New York, and formed in 2002, EIT is the
successor to the microelectronics division of IBM Corp. The
products are used in aerospace, defense and medication
applications, among others.
The company sought Chapter 11 bankruptcy protection after
suffering $100 million in operating losses in the last four years.
In addition to $16 million in secured claims, trade suppliers are
owed $34 million. There is another $32 million owing for loans
made by shareholders. The company said the book value of property
is $36 million.
An official committee of unsecured creditors has been appointed in
the case with Avnet Electronics Marketing, Arrow Electronics,
Inc., Acbel Polytech, Inc., Cadence Design Systems, Inc.,
Orbotech, Inc., Tyco Electronics, and High Performance Copper
Foil, Inc. as members. The committee is represented by Arent Fox
LLP.
The business will be sold at auction on Sept. 24. Bids are due
Sept. 19. The hearing to approve sale is set for Sept. 26. The
first bid of $250,000 is coming come from an insider group. The
purchase offer is from company owned by minority shareholder James
T. Matthews. In addition to the cash, he would assume a
$6.1 million secured term loan of which he is already the owner.
There is about $10 million owing on two other secured loans.
The official creditors' committee said there could be
$20.8 million in claims to bring against insiders. In August, the
judge authorized the committee to conduct an investigation of the
insiders.
ENDICOTT INTERCONNECT: Has Continued Access to Cash Until Sept. 27
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of New York,
in a fourth interim order dated Sept. 20, 2013, authorized
Endicott Interconnect Technologies, Inc., et al., to continue
using cash collateral of the Pre-petition Secured Lenders until
Sept. 27, 2013.
The Debtors' Pre-petition Secured Lenders are Integrian Holdings,
LLC, M&T Bank and William and David Maines.
A final hearing on the use of cash collateral will be held on
Sept. 26, 2013, at 9:00 a.m.
A copy of the Fourth Interim Cash Collateral Order is available
at: http://bankrupt.com/misc/EIT.doc315.pdf
About Endicott Interconnect
Endicott Interconnect Technologies, Inc., and its affiliates filed
a Chapter 11 petition (Bankr. N.D.N.Y. Case No. 13-bk-61156) in
Utica, New York, on July 10, 2013, to sell the business before
cash runs out by the end of September. David W. Van Rossum is the
Debtors' sole officer. Bond, Schoeneck & King, PLLC, is counsel
to the Debtor.
Based in Endicott, New York, and formed in 2002, EIT is the
successor to the microelectronics division of IBM Corp. The
products are used in aerospace, defense and medication
applications, among others.
The company sought Chapter 11 bankruptcy protection after
suffering $100 million in operating losses in the last four years.
In addition to $16 million in secured claims, trade suppliers are
owed $34 million. There is another $32 million owing for loans
made by shareholders. The company said the book value of property
is $36 million.
An official committee of unsecured creditors has been appointed in
the case with Avnet Electronics Marketing, Arrow Electronics,
Inc., Acbel Polytech, Inc., Cadence Design Systems, Inc.,
Orbotech, Inc., Tyco Electronics, and High Performance Copper
Foil, Inc. as members. The committee is represented by Arent Fox
LLP.
The business will be sold at auction on Sept. 24. Bids are due
Sept. 19. The hearing to approve sale is set for Sept. 26. The
first bid of $250,000 is coming come from an insider group. The
purchase offer is from company owned by minority shareholder James
T. Matthews. In addition to the cash, he would assume a
$6.1 million secured term loan of which he is already the owner.
There is about $10 million owing on two other secured loans.
The official creditors' committee said there could be
$20.8 million in claims to bring against insiders. In August, the
judge authorized the committee to conduct an investigation of the
insiders.
FAIRMONT GENERAL: CEO Marquardt Steps Down Following Bankruptcy
---------------------------------------------------------------
The Associated Press reports that Fairmont General Hospital
President and CEO Robert Marquardt has resigned three weeks after
the hospital filed for Chapter 11 bankruptcy protection, the
hospital announced Tuesday. The hospital's board of directors
accepted Marquardt's resignation Monday night. Vice president for
patient services Peggy Coster was appointed interim president and
CEO. A statement from the hospital didn't give a reason for
Marquardt's departure. Michael R. Lane, a managing director of
Hammond Hanlon Camp LLC, will serve as the hospital's
restructuring adviser.
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.
FLORIDA GAMING: Kapila & Company Hiring Approved
------------------------------------------------
BankruptcyData reported that the U.S. Bankruptcy Court approved
Florida Gaming's motion to retain Kapila & Company as financial
consultant and accountant at the following hourly rates: partner
at $366 to $520, professional at $120 to $300 and paraprofessional
at $100 to $160.
As previously reported, "Miami Jai-Alai has selected Kapila & Co.
because of its extensive and diverse experience, knowledge and
reputation in (i) financing and restructuring advisory services,
(ii) developing budgets and cash flow forecasts, (iii) monitoring
financial performance of debtors, and (iv) evaluating proposed
restructuring transactions, including tax ramifications."
About Florida Gaming
Florida Gaming Centers Inc. filed for Chapter 11 bankruptcy
(Bankr. S.D. Fla. Case No. 13-29597) in Miami on Aug. 19, 2013.
Florida Gaming Centers operates a casino and jai-alai frontons in
Miami. The Company disclosed debt of $138.3 million and assets of
$180 million in its petition.
Its parent, Florida Gaming Corp. (FGMG:US), and two other
affiliates also sought court protection.
Florida Gaming previously negotiated a sale of virtually all its
assets to casino operator Silvermark LLC for $115 million in cash
and $14 million in assumed liabilities. A provision in the
financing agreement required Florida Gaming to make an additional
payment to the lender -- ABC Funding -- if the assets are sold to
third party. Jefferies LLC was hired to determine that amount,
about $26.8 million, and valued the company at more than $180
million.
Luis Salazar, Esq., Esq., at Salazar Jackson in Miami, represents
Florida Gaming.
ABC Funding, LLC, as Administrative Agent for a consortium of
prepetition lenders, and the prepetition lenders are represented
by Dennis Twomey, Esq., and Andrew F. O'Neill, Esq., at SIDLEY
AUSTIN LLP, in Chicago, Illinois; and Drew M. Dillworth, Esq., and
Marissa D. Kelley, Esq., at STEARNS WEAVER MILLER WEISSLER
ALHADEFF & SITTERSON, P.A., in Miami, Florida. The Prepetition
Lenders are Summit Partners Subordinated Debt Fund IV-A, L.P.,
Summit Partners Subordinated Debt Fund IV-B, L.P., JPMorgan Chase
Bank, N.A., Locust Street Funding LLC, Canyon Value Realization
Fund, L.P., Canyon Value Realization Master Fund, L.P., Canyon
Distressed Opportunity Master Fund, L.P., and Canyon-GRF Master
Fund II, L.P.
FORUM ENERGY: Moody's Rates $300MM Senior Notes 'Ba3'
-----------------------------------------------------
Moody's Investors Service assigned a first time rating of Ba3 to
Forum Energy Technologies, Inc.'s proposed $300 million senior
unsecured notes offering. Moody's also assigned a Ba2 Corporate
Family Rating, a Ba2-PD Probability of Default Rating and a
Speculative Grade Liquidity rating of SGL-1. The outlook is
stable. The proceeds of the notes will be used to repay amounts
outstanding under Forum's term loan and revolving credit facility.
"Upon the closing of its proposed senior notes issue, Forum will
have more firmly capitalized the company's funding of recent
acquisitions, which have provided further growth in size and scale
to its oilfield equipment manufacturing and supply operations,"
commented Andrew Brooks, Moody's Vice President. "We believe the
company intends to seek additional growth opportunities through
the acquisition of complementary businesses, and expect the
company's record of conservative financial policies and positive
cash flow will continue to prevail."
Ratings Assigned:
Forum Energy Technologies, Inc.
Corporate Family Rating: Ba2
Probability of Default: Ba2-PD
Senior unsecured Rating: Ba3 (LGD5 -- 81%)
Speculative Grade Liquidity: SGL-1
Outlook Stable
Forum, headquartered in Houston, Texas, is a global oilfield
services company, manufacturing and supplying products in two
broad business segments; Drilling and Subsea, and Production and
Infrastructure. Its Drilling and Subsea segment revenues comprise
58% of Forum's consolidated total, while its Production and
Infrastructure segment represents the remaining 42%. Forum's
product offerings are leveraged to secular growth trends in the
deepwater, and to increased well complexity and service intensity,
and are balanced between engineered capital products and after-
market consumables. The company has grown rapidly through
acquisitions, most recently closing four in 2012's fourth quarter
and three which closed effective July 1, 2013. Acquisitions have
served to further broaden on complement the company's lines of
business. Forum was taken public in April 2012; following the IPO
financial sponsor SCF Partners L.P. continues to hold a 45%
ownership stake in the company.
Ratings Rationale:
Forum's Ba2 CFR reflects its relatively modest size, although the
broad scope of its product offering and exposure across the energy
value chain helps offset risk through highly cyclical business
conditions, which are closely correlated to capital spending in
the oil and gas production industry. Moreover, the balance in its
business mix between manufactured product and after-market
consumables helps further stabilize earnings and cash flow. While
Forum has achieved a high rate of growth through acquisitions, it
has employed sound financial policies, it has low capital spending
requirements and the company has consistently generated free cash
flow. Company management is well seasoned, operating under a board
of directors comprised of senior executives with deep industry
backgrounds.
Moody's foresees very good liquidity through 2014, and it has
assigned Forum an SGL-1 Speculative Grade Liquidity rating.
Proceeds from the notes offering will repay the $289 million
outstanding balance on Forum's term loan in its entirety, with the
remainder used to repay a portion of the balance outstanding under
its $600 million senior secured revolving credit facility.
Availability under the company's revolving credit facility pro
forma for the notes offering will approximate $300 million; the
revolver has a scheduled maturity of October 2016. With the
expectation of continuing positive free cash flow, supplemented by
the liquidity available to the company under its revolving credit
facility, Moody's would expect Forum to require only limited
sources of external liquidity for the financing of acquisitions,
or its underlying business. Forum is expected to be well in
compliance with the three financial covenants dictated by the
revolver.
The outlook is stable based on the balanced mix of Forum's product
offerings, its consistent generation of free operating cash flow
and the modest use of leverage in its capital structure. A rating
downgrade would be considered should the company depart from its
strategy of conservatively financing niche acquisitions such that
debt/EBITDA consistently exceeded 2.5x, and debt/book capital
exceed 40%. A rating upgrade could be considered as the company
grows EBITDA towards $500 million, presuming this growth continues
to generate a 12% or higher consolidated return on assets
(EBIT/assets) with leverage remaining under the company's stated
goal of 2x net debt/EBITDA.
The Ba3 rating on the company's proposed senior unsecured notes
reflects both the overall probability of default, to which Moody's
assigns a PDR of Ba2-PD, and a loss given default of LGD5 (81%).
The senior unsecured notes are rated Ba3, one notch beneath its
Ba2 CFR reflecting the contractual subordination of the notes
relative to the company's $600 million senior secured bank credit
facility in accordance with Moody's Loss Given Default
methodology. While Moody's expects free cash flow will be used for
debt reduction, should the secured revolver see consistent levels
of high utilization for acquisition financing, the notes rating
could run the risk of double-notching to B1.
The principal methodology used in this rating was the Global
Oilfield Services Rating Methodology published in December 2009.
Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.
Headquartered in Houston, Texas, Forum Energy Technologies is a
holding company whose subsidiaries design and manufacture global
oilfield products for the subsea, drilling, completion, production
and infrastructure sectors of the oil and natural gas industry.
FRIENDFINDER NETWORKS: Chapter 11 Plan Filed
--------------------------------------------
BankruptcyData reported that FriendFinder Networks with the U.S.
Bankruptcy Court a Joint Chapter 11 Plan of Reorganization and
related Disclosure Statement.
According to the Disclosure Statement, "Prior to the Petition
Date, the Debtors engaged in extensive negotiations with the
Consenting First Lien Noteholders, the Consenting Second Lien
Noteholders, and the Holders of the Cash Pay Second Lien Notes
regarding the potential terms of a consensual restructuring of the
Debtors' capital structure. As a result of those negotiations, the
Debtors determined, in consultation with their legal and financial
advisors, that it was in the best interest of their estates to
pursue Confirmation of the Plan, which implements a
recapitalization transaction that has the support of the
Consenting First Lien Noteholders (representing approximately 80%
in principal amount of the First Lien Notes) and; Consenting
Second Lien Noteholders (representing approximately 78% of the
Second Lien Non-Cash Pay Notes) under the terms of the Transaction
Support Agreement entered into prior to the Petition Date. The
Plan also has the support of 100% of the Holders of the Cash Pay
Second Lien Notes pursuant to the Bell/Staton Settlement Agreement
entered into prior to the Petition Date." $234 million in first
lien noteholder claims and $331 million in second lien noteholder
claims are allowed under the Plan. The Plan further contemplates a
recapitalization of the Debtors that will result in first lien
noteholder claimants receiving, among other things, new first lien
notes and second lien noteholder claimants receiving, among other
things, 100% of the Company's equity.
FriendFinder Networks explains, "The Debtors believe that the Plan
provides the best means currently available for the Debtors to
restructure their balance sheet and emerge promptly from chapter
11."
About FriendFinder Networks
FriendFinder Networks (formerly Penthouse Media Group) owns and
operates a variety of social networking Web sites, including
FriendFinder.com, AdultFriendFinder.com, Amigos.com, and
AsiaFriendFinder.com. In total, its Web sites are offered in 12
languages to users in some 170 countries. The company also
publishes the venerable adult magazine PENTHOUSE, and produces
adult video content and related images. The Company is based in
Boca Raton, Florida.
FriendFinder Networks reported a net loss of $49.44 million
in 2012, a net loss of $31.14 million in 2011, and a net loss of
$43.15 million in 2010.
FriendFinder Networks and affiliates, including lead debtor PMGI
Holdings Inc., sought bankruptcy protection (Bankr. D. Del. Lead
Case No. 13-12404) on Sept. 17, 2013, estimating assets of
$465.3 million and debt totaling $662 million.
The Debtors are represented by Nancy A. Mitchell. Esq., Matthew L.
Hinker, Esq., and Paul T. Martin, Esq., at Greenberg Traurig, LLP,
in New York, as lead bankruptcy counsel; and Dennis A. Meloro,
Esq., in Wilmington, Delaware, as local Delaware counsel. Akerman
Senterfitt serves as the Debtors' special and conflicts counsel.
The Debtors' financial advisor is SSG Capital Advisors LLC. BMC
Group, Inc., is the Debtors' claims and noticing agent.
FRIENDFINDER NETWORKS: Case Summary & Largest Unsecured Creditors
-----------------------------------------------------------------
Lead Debtor: PMGI Holdings Inc.
6800 Broken Sound Parkway NW, Suite 200
Boca Raton, FL 33487
Bankruptcy Case No.: 13-12404
Affiliates that simultaneously filed for Chapter 11:
Debtor Case No.
------ --------
FriendFinder Networks Inc. 13-12405
Argus Payments Inc. 13-12406
Big Island Technology Group, Inc. 13-12407
Blue Hen Group Inc. 13-12408
Confirm ID, Inc. 13-12409
Danni Ashe, Inc. 13-12410
Fastcupid, Inc. 13-12411
Fierce Wombat Games Inc. 13-12412
FriendFinder California Inc. 13-12413
Friendfinder Ventures Inc. 13-12414
FRNK Technology Group 13-12415
General Media Art Holding, Inc. 13-12416
General Media Communications, Inc. 13-12417
General Media Entertainment, Inc. 13-12418
Global Alphabet, Inc. 13-12419
GMCI Internet Operations, Inc. 13-12420
GMI On-line Ventures, Ltd. 13-12421
Interactive Network, Inc. 13-12422
Magnolia Blossom Inc. 13-12423
Medley.com Incorporated 13-12424
Naft News Corporation 13-12425
Penthouse Digital Media Productions Inc. 13-12426
Penthouse Images Acquisitions, Ltd. 13-12427
PerfectMatch Inc. 13-12428
Playtime Gaming Inc. 13-12429
PPM Technology Group, Inc. 13-12430
Pure Entertainment Telecommunications, Inc. 13-12431
Sharkfish, Inc. 13-12432
Snapshot Productions, LLC 13-12433
Streamray Inc. 13-12434
Streamray Studios Inc. 13-12435
Tan Door Media Inc. 13-12436
Traffic Cat, Inc. 13-12437
Transbloom, Inc. 13-12438
Various, Inc. 13-12439
Video Bliss, Inc. 13-12440
West Coast Facilities Inc. 13-12441
XVHUB Group Inc. 13-12442
Chapter 11 Petition Date: September 17, 2013
Court: U.S. Bankruptcy Court
District of Delaware (Delaware)
Judge: Christopher S. Sontchi
Debtors' Counsel: David D. Cleary, Esq.
GREENBERG TRAURIG, LLP
2375 East Camelback Road, Suite 700
Phoenix, AZ 85016
Tel: (601) 445-8000
Fax: (601) 445-8100
E-mail: clearyd@gtlaw.com
- and ?
Paul Martin, Esq.
GREENBERG TRAURIG LLP
200 Park Avenue
New York, NY 10166
Tel: (212) 801-6906
Fax: (212) 805-9306
E-mail: martinpt@gtlaw.com
- and ?
Dennis A. Meloro, Esq.
GREENBERG TRAURIG, LLP
The Nemours Building
1007 North Orange Street, Suite 1200
Wilmington, DE 19801
Tel: (302) 661-7000
Fax: (302) 661-7360
E-mail: melorod@gtlaw.com
- and ?
Nancy A. Mitchell, Esq.
GREENBERG TRAURIG, LLP
200 Park Avenue
New York, NY 10166
Tel: (212) 801-9200
Fax: (212) 801-6400
E-mail: mitchelln@gtlaw.com
Debtors'
Financial
Advisors: SSG CAPITAL ADVISORS, LLC
PMGI Holdings'
Estimated Assets: $100,001 to $500,000
PMGI Holdings'
Estimated Debts: $500,000,001 to $1 billion
The petitions were signed by Anthony Previte, president.
PMGI Holdings Inc.'s List of Its 30 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
PG&E Trade Payable $25,512
Box 997300
Sacramento, CA 95899-7300
Aviana Global Technologies, Inc. Trade Payable $8,875
915 W. Imperial Highway, Suite 100
Brea, CA 92821
Marin Software, Inc. Trade Payable $8,301
140 S. Dearborn Street, Suite 300-A
Chicago, IL 60603
Nova Management, Inc. Trade Payable $7,507
Trilibis, Inc. Trade Payable $7,159
Verizon Wireless Trade Payable $7,147
Openmarket, Inc. Trade Payable $6,000
Frank, Rimerman Co., LLP Trade Payable $5,879
Jason Johnson Trade Payable $5,250
Pepper Schwartz Trade Payable $5,000
Office Depot Trade Payable $4,953
Principal Life Insurance Company Trade Payable $4,716
Service by Medallion Trade Payable $4,480
Mark Monitor Trade Payable $4,008
FRG Waste Resources, Inc. Trade Payable $3,536
AT&T Trade Payable $3,276
Zinio Systems, LLC Trade Payable $3,023
Crispin Boyer Trade Payable $2,750
Jeff Stoller Trade Payable $2,627
Brandverity, Inc. Trade Payable $2,500
Pretty Things Press/Monday Morning Trade Payable $2,500
Books
Vaco San Francisco, LLC Trade Payable $2,434
Volume 11 Media, Inc. Trade Payable $2,400
Fahrenheit Heating & Air Trade Payable $2,200
Conditioning, Inc.
Medina's Catering Trade Payable $2,715
AVN Media Network, Inc. Trade Payable $2,000
Fedex Corporation Trade Payable $1,800
Sarah Walker Trade Payable $1,590
Spread Entertainment, Inc. Trade Payable $1,500
Joshua Rothkopf Trade Payable $1,400
FURNITURE BRANDS: Seeks to Tap Epiq as Administrative Advisor
-------------------------------------------------------------
Furniture Brands International, Inc., et al., seek authority from
the U.S. Bankruptcy Court for the District of Delaware to employ
Epiq Bankruptcy Solutions, LLC, as administrative advisor, to,
among other things, assist with solicitation, balloting and
tabulation and calculation of votes, as required in furtherance of
confirmation of any plan of reorganization.
The firm assures the Court that it 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.
A hearing on the employment application will be on Oct. 2, 2013,
at 11:00 a.m. (ET). Objections are due Sept. 25.
The Debtors also sought and obtained the Court's authority to
employ Epiq as claims and noticing agent.
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.
The DIP Lenders are represented by Patrick J. Nash, Jr., P.C.,
Esq., Ross M. Kwasteniet, Esq., and Christopher J. Greeno, P.C.,
Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, and Brian E.
Schartz, Esq., at Kirkland & Ellis LLP, in New York.
Counsel for the term agent and DIP Agent is Jesse H. Austin, III,
Esq., at King & Spalding LLP, in Atlanta, Georgia.
Counsel for the Revolver Agent is Matthew Furlong, Esq., at
Morgan, Lewis & Brockius LLP, in Boston, Massachusetts, and Wendy
S. Walker, Esq., at Morgan, Lewis & Brockius LLP, in New York; and
Kurt F. Gwynne, Esq., at Reed Smith LLP, in Wilmington, Delaware.
FURNITURE BRANDS: Stock Trading Procedures Has Interim Approval
---------------------------------------------------------------
Judge Christopher S. Sontchi of the U.S. Bankruptcy Court for the
District of Delaware gave interim approval of the procedures
governing the transfer of common stock of Furniture Brands
International, Inc.
In order to monitor the trading of the FBN common stock, any
entity who is or becomes a substantial shareholder must file with
the Court a declaration of that status immediately after becoming
a substantial shareholder. A "Substantial Shareholder" is any
entity that has beneficial ownership of at least 382,000 shares of
common stock.
Any purchase, sale, or other transfer of common stock in FBN or of
any beneficial ownership of common stock on any date before the
effective date of a confirmed Chapter 11 plan of reorganization in
violation of the Court-approved procedures will be null and avoid
ab initio.
A final hearing will be held on Oct. 2, 2013, at 11:00 a.m.
(Eastern Time). Objections are due Sept. 25.
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.
The DIP Lenders are represented by Patrick J. Nash, Jr., P.C.,
Esq., Ross M. Kwasteniet, Esq., and Christopher J. Greeno, P.C.,
Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, and Brian E.
Schartz, Esq., at Kirkland & Ellis LLP, in New York.
Counsel for the term agent and DIP Agent is Jesse H. Austin, III,
Esq., at King & Spalding LLP, in Atlanta, Georgia.
Counsel for the Revolver Agent is Matthew Furlong, Esq., at
Morgan, Lewis & Brockius LLP, in Boston, Massachusetts, and Wendy
S. Walker, Esq., at Morgan, Lewis & Brockius LLP, in New York; and
Kurt F. Gwynne, Esq., at Reed Smith LLP, in Wilmington, Delaware.
FURNITURE BRANDS: Corrects List of Largest Unsecured Creditors
--------------------------------------------------------------
Furniture Brands International, Inc., et al., filed with the U.S.
Bankruptcy Court for the District of Delaware a corrected list of
creditors holding 30 largest unsecured claims to include the
correct addresses for the creditors listed. A full-text copy of
the corrected list is available for free at:
http://bankrupt.com/misc/FURNITUREcreds0910.pdf
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.
The DIP Lenders are represented by Patrick J. Nash, Jr., P.C.,
Esq., Ross M. Kwasteniet, Esq., and Christopher J. Greeno, P.C.,
Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, and Brian E.
Schartz, Esq., at Kirkland & Ellis LLP, in New York.
Counsel for the term agent and DIP Agent is Jesse H. Austin, III,
Esq., at King & Spalding LLP, in Atlanta, Georgia.
Counsel for the Revolver Agent is Matthew Furlong, Esq., at
Morgan, Lewis & Brockius LLP, in Boston, Massachusetts, and Wendy
S. Walker, Esq., at Morgan, Lewis & Brockius LLP, in New York; and
Kurt F. Gwynne, Esq., at Reed Smith LLP, in Wilmington, Delaware.
GATEHOUSE MEDIA: Begins Vote Solicitation on Prepack
----------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that GateHouse Media Inc., the owner of 400 community
newspapers, began soliciting votes from creditors on a prepackaged
Chapter 11 plan making up part of a strategy by Fortress
Investment Group LLC to assemble a chain of more than 430 daily,
weekly and community newspapers.
Fortress disclosed the forthcoming bankruptcy earlier this month.
According to the report, creditors began voting Sept. 20. Voting
ends Sept. 26. Fortress owns 52 percent, or $626 million, of
GateHouse's $1.2 billion in debt. Fortress also has 39.6 percent
of GateHouse's equity, according to data compiled by Bloomberg.
The plan is supported by holders of 80.3 percent of the debt,
GateHouse said in a regulatory filing. The plan calls for New
York-based Fortress to convert its debt to equity in Fairport, New
York-based GateHouse. Other lenders will have the option of
receiving stock or 40 percent of the face amount of debt in cash.
The report notes that disclosure materials given to creditors
estimate that the stock option equates to a recovery of 36 percent
to 48.5 percent, based on the estimated range for the reorganized
company's enterprises value. Other creditor groups won't be
affected. Having creditors vote on the prepackaged plan in
advance of filing a Chapter 11 petition can trim the company's
sojourn in bankruptcy court to a few weeks.
The report discloses that the other part of the transaction has
Newcastle Investment Corp. paying $87 million to buy Dow Jones
Local Media Group Inc. from News Corp. The acquired company has
eight daily and 15 weekly newspapers in seven states. Local Media
will manage GateHouse, according to a statement. Standard &
Poor's had called GateHouse's capital structure "unsustainable."
About GateHouse Media
GateHouse Media, Inc. -- http://www.gatehousemedia.com/--
headquartered in Fairport, New York, is one of the largest
publishers of locally based print and online media in the United
States as measured by its 97 daily publications. GateHouse Media
currently serves local audiences of more than 10 million per week
across 21 states through hundreds of community publications and
local Web sites.
As of June 30, 2013, the Company had $433.70 million in total
assets, $1.28 billion in total liabilities and a $848.85 million
total stockholders' deficit.
GENERAL MOTORS: Fitch Rates New Unsecured Notes 'BB+'
-----------------------------------------------------
Fitch Ratings has assigned a rating of 'BB+' to General Motors
Company's (GM) proposed senior unsecured notes. The proposed notes
are being issued in a private placement in up to three tranches,
with five-year, 10-year and 30-year maturities. GM's IDR is 'BB+'
with a Positive Outlook.
GM plans to use proceeds from the proposed notes to redeem 120
million shares of its series A preferred stock held by the United
Auto Workers' (UAW) Voluntary Employee Beneficiary Association
(VEBA) for cash consideration of $3.2 billion. Although the
proposed notes will increase GM's automotive debt, Fitch expects
GM's leverage (automotive debt/Fitch-calculated EBITDA) will rise
only slightly above the June 30, 2013, level of 0.5x, and leverage
is likely to remain below 1x over the intermediate term. The
transaction is expected to improve GM's automotive free cash flow
(FCF) going forward, as the proposed notes are likely to price
well below the 9% dividend on the series A preferred stock.
Key Rating Drivers
GM's ratings and Positive Outlook are supported by its very low
automotive leverage, strong liquidity position, continued positive
FCF-generating capability (excluding voluntary pension
contributions), reduced pension obligations, and improved product
portfolio. GM's ratings are further supported by its position as
one of the most geographically diverse global automakers, with a
strong market presence in China, Southeast Asia and Latin America.
Looking ahead, Fitch could upgrade GM's ratings within 24 months
if its operational performance continues to improve and the
profitability of its North American operations continues to grow.
Other factors supporting an upgrade would be the continued
strengthening of GM's global vehicle portfolio, stabilization in
its European business, and a further reduction in its pension
liabilities.
Despite its stronger financial position, GM still faces a number
of challenges. The company continues to work on improving the
efficiency of its global operations, and profitability,
particularly in North America, has not yet reached the levels of
its strongest competitors. Longer term, GM's ongoing enterprise-
wide restructuring work should yield meaningful improvements in
efficiency and profitability, but in the near term, it risks
adding incremental cost and complexity to the business. Other
challenges include the need to turn around GM's loss-making
operations in Europe, reducing the size of its significant pension
liabilities, and meeting the requirements of tightening global
emissions, fuel economy and safety regulations.
GM's automotive cash position (including cash equivalents and
marketable securities) declined over the past year as the company
used approximately $5.5 billion to repurchase a portion of the
U.S. Treasury's equity stake and another $2.3 billion to transfer
its U.S. salaried pension plan to a group annuity contract. GM
also used $1.4 billion to redeem GM Korea's outstanding preferred
shares and made a $1.3 billion equity injection into General
Motors Financial Company, Inc. (GMF) to help fund the acquisition
of certain non-U.S. operations of Ally Financial. Despite these
cash outlays, GM's automotive cash position remained strong at $24
billion as of June 30, 2013. Total automotive liquidity, including
$10.6 billion in availability on the company's primary revolvers,
was $35 billion.
FCF (calculated by Fitch as automotive cash from operations less
capital expenditures and preferred dividends) was a use of $193
million in the 12 months ended June 30, 2013, primarily due to the
aforementioned pension actions. However, Fitch expects full-year
automotive FCF will be positive in 2013, with further growth in
FCF over the intermediate term.
GM's low automotive leverage remains a key driver of its ratings
and Outlook. As of June 30, 2013, leverage (automotive debt/Fitch-
calculated EBITDA) was only 0.5x, and funds from operations
adjusted leverage was only 1x. GM ended the second quarter with $4
billion in automotive debt, primarily composed of various bank
borrowings, private note placements and capital leases, much of
which is non-recourse to the company. As noted earlier, Fitch
expects the transactions announced today to have only a minor
effect on GM's leverage calculation.
As of year-end 2012, GM's global pension plans (including certain
unfunded non-U.S. plans) were underfunded by $28 billion, with
about half of that in the U.S. However, Fitch expects the rise in
long-term interest rates seen thus far in 2013 will result in a
significant improvement in the plans' funded status when they are
remeasured at year-end 2013. Following the transfer of its U.S.
salaried plan to a group annuity in 2012, GM does not expect to
have any required pension contributions in the U.S. for the next
several years.
Rating Sensitivities
The Positive Outlook suggests that Fitch could upgrade GM's
ratings within 24 months if current trends continue as expected.
Specifically, Fitch will look for the company to increase its
profitability on a sustained basis, particularly in North America,
as well as further stabilize the financial performance of its
European operations. A further decline in the underfunded status
of the company's pension plans would also contribute to an
upgrade. Most important, an upgrade to 'BBB-' will require further
conviction that GM's operating and financial profiles are strong
enough to withstand the inherent risks of the global auto industry
and sustain an investment-grade credit profile in a period of
severe economic stress.
Although the Positive Outlook suggests a negative rating action is
not expected within the next 24 months, Fitch could consider a
negative action on an unexpected material decline in GM's
financial or operational performance. A significant downturn that
drives GM's total liquidity below $25 billion for an extended
period or a poor market reception to the company's new vehicles
could lead to a negative rating action. Likewise, a significant
increase in GM's automotive leverage, could also lead to a
negative rating action.
GENERAL MOTORS: Improving Metrics Cue Moody's to Lift CFR to Baa3
-----------------------------------------------------------------
Moody's Investors Service raised the Corporate Family Rating of
General Motors Company (GM) to Baa3 from Ba1, and assigned a Ba1
rating to the company's new offering of senior unsecured notes.
Proceeds of the offering will be used to repay higher cost
obligations. The upgrade of the CFR to an investment grade level
reflects Moody's expectation that GM's competitive position and
credit metrics will continue to improve based on the strength of
the company's new product introductions in a healthy US market,
its solid position in the increasingly important Chinese auto
market, and its focus on maintaining a robust liquidity profile.
Additional rating actions include the following: the upgrade of
GM's Probability of Default Rating to Baa3-PD from Ba1-PD;
affirmation of the Baa2 rating of the company's secured credit
facility; and the withdrawal of the SGL-1 Speculative Grade
Liquidity rating. The rating outlook is stable.
CFR and PDR ratings are typically maintained only at the
speculative grade level in the United States. Consequently, the
Baa3 CFR and Baa3-PD PDR will be withdrawn. GM's ongoing ratings
will consist of the Baa2 rating for the secured credit facility
and the Ba1 rating for the unsecured notes.
Ratings Rationale:
Bruce Clark, senior vice president with Moody's said, "GM has been
on a steadily improving operational and financial trajectory since
it emerged from bankruptcy. Moody's thinks that the disciplines
the company has embraced, combined with the strength of its US
product portfolio and a healthy domestic market, will enable it to
stay on that path."
GM is entering a robust phase of its new product introduction
cycle in North America, and market response has been positive.
Moreover, Moody's expects that market fundamentals of the US auto
sector will remain healthy, with industry shipments growing by
8.7% in 2013 and 2.9% in 2014, and minimal increases in incentive
levels. This should enable GM to make progress in improving its
North American margins, which remain below those of some peers.
GM's position in the Chinese auto market is an important source of
strength for the company. Including its joint venture operations,
GM is one of the leading auto producers in China, with a share
position of approximately 14%. This market accounts for about 30%
of GM's consolidated unit shipments and a significant portion of
its earnings and cash flow. Moody's expects that industry
shipments of light vehicles in China will grow by about 10% in
both 2013 and 2014. China affords GM with strong margins, good
long-term growth prospects, and broad geographic diversification.
A key contributor to GM's attainment of an investment grade rating
is Moody's expectation that the company will maintain a strong
liquidity profile. Given the considerable cyclicality of the
global automotive sector, ample liquidity is needed to cover the
sizable cash burn that can occur during market down turns, and to
ensure that the company can continue to fund investments in new
model programs. At June 2013, GM's liquidity position approximated
$31 billion, and consisted of $24 billion in cash and $7 billion
in committed credit facilities ($11 billion in total facilities
less $4 billion allocated to GM Financial). The company's
principal liquidity requirements during the coming twelve months
include Moody's estimate of approximately $7 billion needed for
intra-period working capital requirements, and $700 million in
maturing debt. GM's $31 billion of liquidity provides considerable
coverage of these requirements, and affords the company with ample
flexibility to contend with market downturns and other operational
stress.
A key risk facing GM is the possibility of aggressive pricing by
Japanese competitors should they choose to emphasize market share
over enhanced profitability following the significant decline in
the Yen relative to the dollar. Moody's currently sees no evidence
that such a pricing environment will be pursued. An additional
risk remains the considerable cyclicality inherent in the auto
sector, as evidenced by the severe downturn in the European market
where GM is pursuing restructuring initiatives to restore the
profitability of its operations.
Moody's believes that GM's competitive positions in North America
and China, combined with its strong liquidity position, provide it
with adequate operating and financial flexibility to contend with
these risks and to support its ratings.
GM is a holding company, with essentially all its operating assets
and the vast majority of its liabilities held directly by its
various subsidiaries. The notes being offered by GM are rated Ba1,
one notch below the Baa3 CFR and two notches below the Baa2
secured credit facility. This notching differential results from
the structural subordination of the unsecured notes to the
considerable amount of liabilities at the operating subsidiaries.
These liabilities include approximately $28 billion in under
funded pension liabilities and $20 billion in trade claims. GM's
secured credit facility is rated Baa2, one notch above the Baa3
CFR, due to its security package and to guarantees from GM's
operating subsidiaries. In the event that this security is
released or the subsidiary guarantees fall away, the facility will
also rank junior to the claims at the operating company level and
it is likely that the rating of the facility would be lowered to
Ba1, the same level as the unsecured notes.
Further improvement in GM's ratings could be supported if the
company is able to strengthen its profit margins in North America
and to begin generating profits in Europe. The company would also
need to maintain its solid position in China and a healthy
liquidity profile. Metrics that could support additional positive
rating action include: EBITA margin above 8%; debt/EBITDA
remaining near 2x; and EBITA/interest approaching 6x.
Downward pressure on GM's ratings could result from a further
weakening in European automotive demand, a decision to increase
leverage as part of a more aggressive financial strategy, or a
weak performance for the North American new product initiative.
Metrics that might indicate pressure on the rating include: EBITA
margin remaining near or below 5%; debt/EBITDA of approaching
3.0x; and EBITA/interest below 3.5x.
The principal methodology used in this rating was the Global
Automobile Manufacturer Industry Methodology published in June
2011, The Rating Relationship Between Industrial Companies And
Their Captive Finance Subsidiaries Methodology published in May
2012, and the Finance Company Global Rating Methodology published
in March 2012.
GENERAL MOTORS: S&P Assigns 'BB+' Rating to Senior Unsecured Notes
------------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB+' issue-level
rating to General Motor Co.'s (GM's) proposed issuance of five-,
10-, and 30-year senior unsecured notes. At the same time, S&P
assigned its recovery rating of '4' to the notes, indicating its
expectation that lenders would receive average (30%-50%) recovery
in the event of a payment default. The company intends to use the
proceeds for general corporate purposes, including to repurchase
$3 billion of series A preferred stock. The assessment is at the
lower end of the recovery range and, under S&P's current
assumptions, it could lower the issue-level and recovery ratings
if the amount of unsecured debt issued approaches $5 billion or
more. None of GM's subsidiaries will guarantee the notes.
The BB+/Positive/-- corporate credit rating on the Michigan-based
automaker reflects S&P's assessment of its "intermediate"
financial risk profile and its "fair" business risk profile. S&P
believes GM has prospects for generating good free cash flow (more
than $3 billion annually) and profits in its global automotive
manufacturing business, and that its credit measures will likely
improve over the next year or so, in part due to the improved
underfunding status of its pension and other postretirement
benefits as a result of higher discount rates. An upgrade of GM
would likely be accompanied by an improved assessment of the
business risk profile to "satisfactory." Some supportive factors
to revise this assessment favorably would include confidence that
GM's operations will be consistently profitable by sustaining mid-
to high-single-digit automotive EBIT margins in North America,
that GM will maintain a strong position in the Chinese market, and
that it will address losses in Europe over the next several years.
RATINGS LIST
General Motors Co.
Corporate Credit Rating BB+/Positive/--
New Rating
General Motors Co.
Senior unsecured notes BB+
Recovery Rating 4
GENTIVA HEATH: Moody's Retains Ratings Over Harden Transaction
--------------------------------------------------------------
Moody's Investors Service said Gentiva Heath Services, Inc.'s
planned acquisition of key operations of Harden Healthcare
Holdings, Inc. for about $408.8 million does not immediately
impact its B3 Corporate Family Rating given Moody's expectation of
only modest increase in the initial leverage and some strategic
benefits from the acquisition. However, Moody's views the
acquisition modestly credit negative, as Gentiva will need to
integrate a fairly large acquisition at a time when both Gentiva
and Harden's to be acquired operations are facing significant
operating challenges.
"We view this acquisition as a defensive play by Gentiva. It
likely foreshadows further industry consolidation in the home
health and hospice space in the wake of sustained lower earnings
from severe reimbursement cuts and volume uncertainties,"
commented Moody's lead analyst, John Zhao.
Gentiva Health Services, Inc. (NASDAQ: GTIV) is a leading provider
of home health and hospice services in the US. The company offers
direct home nursing and therapies, including specialty programs,
as well as hospice care with over 400 locations in 41 states.
Gentiva reported revenues of over $1.7 billion for the fiscal year
ended December 31, 2012.
GIBRALTAR KENTUCKY: Court Grants Motion to Convert Case to Ch. 7
----------------------------------------------------------------
On Sept. 17, 2013, the U.S. Bankruptcy Court for the Southern
District of Florida granted Gibraltar Kentucky Development, LLC's
motion to convert its Chapter 11 case to one under Chapter 7 of
the Bankruptcy Code.
In its motion, the Debtor cited:
-- The Debtor is eligible to be a Chapter 7 Debtor.
-- The Debtor is a Debtor in Possession
-- The case was not commenced as an involuntary case under
Chapter 11.
-- The case has not been converted to a case under Chapter 11
other than on the Debtor's request.
-- The Debtor is entitled to convert its case to a case under
Chapter 7 as a matter of right.
About Gibraltar Kentucky
Gibraltar Kentucky Development, LLC, filed a Chapter 11 bankruptcy
petition (Bankr. S.D. Fla. Case No. 12-13289) on Feb. 10, 2012, in
West Palm Beach, Florida. Palm Beach Gardens-based Gibraltar
Kentucky says that it is not a small business debtor under 11
U.S.C. Sec. 101(51D). Documents attached to the petition indicate
that McCaugh Energy LLC owns 42.15% of the "fee simple"
securities.
Headquartered in Palm Beach Gardens, Florida, Gibraltar Kentucky
is a coal, gas and oil development and mining operation with
holdings and reserves in excess of $100 million. The Company
owns approximately 500 acres in Lawrence County Kentucky that has
eighty plus old oil wells with production facilities. The Company
also has oil and gas leases in several counties in Kentucky
together with mineral interests in coal reserves.
Judge Erik P. Kimball presides over the case. The Debtor
disclosed $175,395,449 in assets and $1,193,516 in liabilities as
of the Chapter 11 filing. The petition was signed by Bill Boyd,
as manager.
Steven R. Turner, Trustee for Region 21, has informed the Court
that, until further notice, he will not appoint a committee of
creditors.
David L. Merrill, Esq., and K. Drake Ozment, Esq., at Ozment
Merrill, in West Palm Beach, Fla.; and Tina M. Talarchyk, Esq., at
The Talarchyk Firm, in Palm Beach, Florida, serve as counsel to
the Debtor.
GLOBAL ROCK: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Global Rock Networks, Inc.
747 Third Avenue, 2nd Floor
New York, NY 10017
Bankruptcy Case No.: 13-13039
Chapter 11 Petition Date: September 18, 2013
Court: U.S. Bankruptcy Court
Southern District of New York (Manhattan)
Debtor's Counsel: Jonathan S. Pasternak, Esq.
DELBELLO DONNELLAN WEINGARTEN WISE & WIEDERKEHR,
LLP
One North Lexington Avenue
White Plains, NY 10601
Tel: (914) 681-0200
Fax: (914) 684-0288
E-mail: jpasternak@ddw-law.com
Estimated Assets: $100,001 to $500,000
Estimated Debts: $1,000,001 to $10,000,000
The Company's list of its 20 largest unsecured creditors filed
with the petition is available for free at:
http://bankrupt.com/misc/nysb13-13039.pdf
The petition was signed by Stu Sleppin, president.
GM FINANCIAL: Moody's Eyes Upgrade for Ba3 CFR and Senior Debt
--------------------------------------------------------------
Moody's Investors Service placed the Ba3 Corporate Family Rating
and senior unsecured debt rating of General Motors Financial
Company, Inc. on review for upgrade.
The rating action comes in conjunction with Moody's upgrade of
GMF's parent General Motors Company (GM).
Ratings Rationale:
During the review Moody's will evaluate the benefits to GMF of its
ownership by a financially stronger parent, as well as the
increased level of integration with GM including GMF's recent
acquisition of most of the international auto finance operations
of Ally Financial. Moody's will also consider GMF's stronger
average portfolio asset quality stemming from the acquisition, the
company's progress in and timetable for executing and integrating
the acquisition (significant elements of which, Brazil and China,
remain to be completed), and GMF's strategy for melding Ally IO
into its overall funding and liquidity management plan.
GMF's current ratings incorporate one notch of uplift from
ownership and support by GM. The one notch uplift reflects
historic and current tangible financial support in the form of
capital contributions, committed credit facilities ($600 million
intercompany unsecured facility from GM, and co-borrower under
GM's $11 billion secured revolving credit facility under the 3-
year tranche, with GMF's availability limited to $4 billion), and
a tax deferral program of up to $1 billion. The limitation of
uplift to one notch reflects lack of an explicit guarantee or
credit support agreement from GM covering all of GMF's corporate
debt obligations.
GMF, a wholly owned subsidiary of GM, provides global auto finance
solutions through auto dealers across North America, Europe and
Latin America. The company, which reported total assets of $30.6
billion as of June 30, 2013, is headquartered in Fort Worth,
Texas.
The principal methodology used in this rating was Finance Company
Global Rating Methodology published in March 2012.
HAAS ENVIRONMENTAL: Can Access Cash Collateral Until Dec. 31
------------------------------------------------------------
In a consent order dated Sept. 20, 2013, the U.S. Bankruptcy Court
for the District of New Jersey authorized Haas Environmental,
Inc., to use cash collateral of secured parties People's United
Equipment Finance Corp., Commercial Credit Group Inc. and
Sovereign Bank through Dec. 31, 2013, for the payment of the
Debtor's actual expenses necessary to:
(a) maintain and preserve its assets, continue operation of its
business, including payroll and payroll taxes, and insurance
expenses as reflected in the Cash Collateral Budget, and
(b) pay quarterly fees to the Office of the United States
Trustee.
As adequate protection for use of the cash collateral, the secured
parties (to the extent they are entitled to same) are granted a
replacement perfected security interest under 11 U.S.C. Section
361(2). Subject only to a carve-out for certain expenses, the
adequate protection obligations will have priority over all
administrative expenses of the kind specified in Section 507 of
the Bankruptcy Code.
The Bankruptcy Court also approved the sales procedures for the
sale of certain pieces of People's and Commercial Credit's
collateral, which is identified as the "disposable collateral".
The Court also granted the Committee a minimum of 60 days from the
date of the order approving the retention of counsel to the
Committee to review the nature, extent, validity, perfection and
priority of any of the Secured Creditors' liens and claims.
After the conclusion of the auction or auctions of Disposable
collateral that is not sold by private sale the Debtor, Peoples,
Commercial Credit and the Committee will negotiate in good faith
for the re-financing of the secured claims of Peoples and
Commercial Credit, and for the terms of a Chapter 11 plan.
A copy of the Court's Sept. 20, 2013 Consent Order, which includes
the approved Sales Procedures for the sale of the Disposable
Collateral, is available at:
http://bankrupt.com/misc/haasenvironmental.doc82.pdf
Haas Environmental, Inc., filed a Chapter 11 petition (Bankr.
D.N.J. Case No. 13-27297) on Aug. 6, 2013. Eugene Haas signed the
petition as president. Judge Kathryn C. Ferguson presides over
the case. The Debtor estimated assets and debts of at least $10
million. Jerrold N. Poslusny, Jr., Esq., at Cozen O'Connor, in
Cherry Hill, New Jersey, serves as the Debtor's counsel.
HAAS ENVIRONMENTAL: Can Employ Cozen O'Connor as Attorneys
----------------------------------------------------------
The U.S. Bankruptcy Court for the District of New Jersey has
authorized Haas Environmental, Inc., to employ Cozen O'Connor as
the Debtor's bankruptcy counsel.
As reported in the TCR on Aug. 16, 2013, the Cozen O'Connor
attorneys and assistants who will be primarily responsible for the
representation of the Debtor are:
Professional Position Hourly Rate
------------ -------- -----------
Arthur J. Abramowitz Member $650
Jerrold N. Poslusny, Jr. Member $475
Debbie Reyes Paralegal $250
Haas Environmental, Inc., filed a Chapter 11 petition (Bankr.
D.N.J. Case No. 13-27297) on Aug. 6, 2013. Eugene Haas signed the
petition as president. Judge Kathryn C. Ferguson presides over
the case. The Debtor estimated assets and debts of at least
$10 million. Jerrold N. Poslusny, Jr., Esq., at Cozen O'Connor,
in Cherry Hill, New Jersey, serves as the Debtor's counsel.
HAAS ENVIRONMENTAL: Hiring Woodsworth & St. John as Accountants
---------------------------------------------------------------
Haas Environmental, Inc., asks the U.S. Bankruptcy Court for the
District of New Jersey for authorization to employ Woodsworth &
St. John, LLC ("W&S") as the Debtor's accountants. The Debtor
believes that W&S will provide it with the necessary accounting
services and advice necessary for the Debtor to successfully
confirm a plan.
W&S's hourly rates are:
Edward R. St. John, CPA $185
Ralph S. DeBlasi, CPA $150
To the best of the Debtor's knowledge, W&S is a disinterested
person under 11 U.S.C. Section 101(14).
Haas Environmental, Inc., filed a Chapter 11 petition (Bankr.
D.N.J. Case No. 13-27297) on Aug. 6, 2013. Eugene Haas signed the
petition as president. Judge Kathryn C. Ferguson presides over
the case. The Debtor estimated assets and debts of at least $10
million. Jerrold N. Poslusny, Jr., Esq., at Cozen O'Connor, in
Cherry Hill, New Jersey, serves as the Debtor's counsel.
HAAS ENVIRONMENTAL: Files Schedules of Assets and Liabilities
-------------------------------------------------------------
Haas Environmental, Inc., filed with the U.S. Bankruptcy Court for
the District of New Jersey its schedules of assets and
liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $965,000
B. Personal Property $9,162,069
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $8,553,517
E. Creditors Holding
Unsecured Priority
Claims $0
F. Creditors Holding
Unsecured Non-priority
Claims $3,042,093
-------------- --------------
TOTAL $10,127,069 $11,595,611
A copy of the SAL is available at:
http://bankrupt.com/misc/haasenvironmental.SAL.pdf
Haas Environmental, Inc., filed a Chapter 11 petition (Bankr.
D.N.J. Case No. 13-27297) on Aug. 6, 2013. Eugene Haas signed the
petition as president. Judge Kathryn C. Ferguson presides over
the case. The Debtor estimated assets and debts of at least $10
million. Jerrold N. Poslusny, Jr., Esq., at Cozen O'Connor, in
Cherry Hill, New Jersey, serves as the Debtor's counsel.
HAMPTON CAPITAL: Hires University Management as Collections Agent
-----------------------------------------------------------------
Hampton Capital Partners, LLC asks the U.S. Bankruptcy Court for
permission to employ University Management Associates &
Consultants Corporation as its collection agency to attempt to
collect and recover certain accounts receivable.
Pursuant to the Services Agreement, the Debtor has designated a
specific pool of accounts receivable with a face value of
approximately $1 million, which the Debtor has turned over to UMAC
for collection.
The terms of UMAC's employment are more specifically described in
the parties' Services Agreement. However, UMAC will be entitled
to a contingency fee of 8% on the first $500,000 collective, and
12% on the balance collected thereafter.
The Debtor attests that the firm is a "disinterested person" as
the term is defined in Section 101(14) of the Bankruptcy Code.
Counsel for the Debtor can be reached at:
John Paul H. Cournoyer, Esq.
John A. Northen, Esq.
Vicki L. Parrott, Esq.
NORTHEN BLUE, LLP
Post Office Box 2208
Chapel Hill, NC 27515-2208
Tel: 919-968-4441
E-mail: jan@nbfirm.com
vlp@nbfirm.com
jpc@nbfirm.com
About Hampton Capital Partners
Hampton Capital Partners, LLC, an Aberdeen, N.C.-based
manufacturer of residential and commercial tufted carpets under
the Gulistan name, filed a Chapter 11 petition (Bankr. M.D.N.C.
Case No. 13-bk-80015) on Jan. 7, 2013.
The Company has been producing carpet under the Gulistan name
since 1924, although it traces its roots back to 1818, when an
Armenian textile importer established a business in Turkey. The
company began manufacturing carpet in Aberdeen in 1957, and was
acquired by J.P. Stevens & Co. Inc. in 1964. Over the last 25
years, Gulistan Carpet has undergone several ownership changes.
In addition to its headquarters and manufacturing operations in
Aberdeen, the company has a plant in Wagram, N.C. John Paul H.
Cournoyer, Esq., at Northen Blue, LLP, serves as counsel to the
Debtor. Getzler Henrich & Associates LLC is the financial
consultant.
Five creditors have been appointed to serve on the Official
Committee of Unsecured Creditors. The Committee tapped Lowenstein
Sandler LLP as its counsel and Wilson and Ratledge PLLC as its
North Carolina counsel. The Committee also tapped BDO Consulting,
a division of BDO USA LLP, as its financial advisors.
HERCULES OFFSHORE: Commences Tender Offer & Consent Solicitation
----------------------------------------------------------------
Hercules Offshore, Inc., has commenced a cash tender offer for any
and all of its outstanding 10.50 percent senior secured notes due
2017 (CUSIP Nos. 427093AB5 and U42714AA0) and a solicitation of
consents to certain proposed amendments to the indenture governing
the Notes. As of Sept. 17, 2013, there were $300 million in
aggregate principal amount of the Notes outstanding.
The Tender Offer is scheduled to expire at 11:59 p.m., New York
City time, on Oct. 15, 2013, unless extended or earlier terminated
by Hercules Offshore. Holders validly tendering their Notes on or
prior to 5:00 p.m., New York City time, on Sept. 30, 2013, unless
extended or earlier terminated by Hercules Offshore, will receive
total consideration of $1,058.75 per $1,000 principal amount of
Notes accepted in the offer, which includes a cash consent payment
of $5.00 per $1,000 principal amount of Notes tendered. Holders
validly tendering their Notes after the Consent Expiration but
prior to the Expiration Date will not be eligible to receive the
Consent Payment, but will receive tender consideration of
$1,053.75 per $1,000 principal amount of Notes accepted in the
offer. Holders of Notes tendered and accepted for purchase in the
tender offer also will be paid accrued and unpaid interest up to,
but not including, the date of payment for the Notes. Tendered
Notes may be withdrawn at any time on or prior to Consent
Expiration. Other than as required by applicable law, tendered
Notes may not be withdrawn after the Withdrawal Time. Holders
tendering their Notes will be required to consent to certain
proposed amendments to the indenture governing the Notes.
Hercules Offshore's obligation to purchase Notes under the Tender
Offer and pay for Consents is subject to certain conditions
including: (i) Hercules Offshore shall have received, on or prior
to the Consent Expiration, Consents which have not been revoked in
respect of at least a majority in principal amount of the Notes,
and (ii) Hercules Offshore will have obtained gross proceeds from
a capital markets transaction of at least $300 million on or prior
to the initial settlement date, on terms and conditions
satisfactory to Hercules Offshore. The terms of the Tender Offer
are described in Hercules Offshore's Offer to Purchase and Consent
Solicitation Statement dated Sept. 17, 2013.
The initial settlement is expected to occur promptly following the
Consent Date and satisfaction of the Conditions, on or around
Oct. 1, 2013. The final settlement will be promptly after the
Expiration Date, and is expected to be on Oct. 16, 2013, the next
business day following the Expiration Time.
Hercules Offshore has engaged Deutsche Bank Securities Inc. to act
as dealer manager and solicitation agent in connection with the
Tender Offer. Questions regarding the Tender Offer may be
directed to Deutsche Bank Securities, Inc., at (212) 250-7527
(collect) or (855) 287-1922 (US toll-free). Requests for
documentation may be directed to D.F. King & Co., Inc., at (800)
488-8075 (US toll-free).
Prices Private Placement of Senior Notes
Hercules Offshore, Inc., has priced a private placement of $300
million aggregate principal amount of senior notes due 2021, which
will bear interest at a rate of 7.50 percent per annum. The notes
are being sold at par. Hercules Offshore expects to use the net
proceeds from this offering, together with cash on hand, to fund
its pending tender offer and consent solicitation for its 10.50
percent senior secured notes due 2017 and to redeem any of the
notes not purchased in the tender offer.
About Hercules Offshore
Hercules Offshore Inc. (NASDAQ: HERO) --
http://www.herculesoffshore.com/-- provides shallow-water
drilling and marine services to the oil and natural gas
exploration and production industry in the United States, Gulf of
Mexico and internationally. The Company provides these services
to integrated energy companies, independent oil and natural gas
operators and national oil companies. The Company operates in six
business segments: Domestic Offshore, International Offshore,
Inland, Domestic Liftboats, International Liftboats and Delta
Towing.
Hercules incurred a net loss of $127 million in 2012, a net loss
of $76.12 million in 2011, and a net loss of $134.59 million in
2010. As of June 30, 2013, the Company had $2.15 billion in total
assets, $1.23 billion in total liabilities and $917.27 million in
total equity.
* * *
The Troubled Company Reporter said on April 11, 2013, that
Moody's Investors Service upgraded Hercules Offshore, Inc.'s
Corporate Family Rating to B2 from B3. Hercules' B2 CFR is
supported by its improved cash flow and lower leverage on the back
of increased drilling activity and higher day-rates in the Gulf of
Mexico (GOM)
As reported by the TCR on Nov. 6, 2012, Standard & Poor's Ratings
Services raised its corporate credit rating on Houston-based
Hercules Offshore Inc. to 'B' from 'B-'. "The upgrade reflects
the improving market conditions in the Gulf of Mexico and our
expectations that Hercules' fleet will continue to benefit," said
Standard & Poor's credit analyst Stephen Scovotti.
HILTON WORLDWIDE: Moody's Keeps Ratings Over New Financing Deal
---------------------------------------------------------------
Moody's Investors Service said Hilton Worldwide Finance, LLC
finalized the tranching of the previously announce debt offerings.
There is no change in Hilton's B1 Corporate Family Rating, B1-PD
Probability of Default rating, Ba3 senior secured ratings, and B3
senior unsecured ratings. However, Loss Given Default (LGD)
assessments have been updated.
Hilton Worldwide Holdings, Inc. is the parent of Hilton Worldwide
Finance, LLC. The Restricted Group includes: the hotel management
and franchise business, timeshare operations, joint ventures,
leased assets, and owned real estate other than the 23 hotels
owned in the U.S. and the Waldorf=Astoria New York which are owned
by the Unrestricted Group. Hilton Worldwide Holdings Inc. operates
one of the world's largest hotel systems. The company operates
4,041 hotels, resorts and timeshare properties comprising 665,667
rooms in 90 countries and territories. Hilton is currently owned
by affiliates of The Blackstone Group L.P. The company has filed
for an initial public offering and seeks to raise $1.25 billion
that would be used to reduce debt.
The principal methodology used in this rating was the Global
Lodging & Cruise Industry Rating Methodology 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.
HOWARD HUGHES: Moody's Assigns Ba2 CFR & Rates $500MM Notes Ba3
---------------------------------------------------------------
Moody's Investors Service assigned a Ba2 corporate family rating
and a Ba2-PD probability of default rating to The Howard Hughes
Corporation. In the same rating action, Moody's assigned a Ba3
rating to the company's proposed $500 million of senior unsecured
notes due 2021, proceeds of which will be used for developments
and general corporate purposes, including opportunistic
acquisitions. Moody's also assigned to HHC a speculative grade
liquidity rating of SGL-3. The rating outlook is stable. This is
the first time Moody's has assigned a public debt rating to HHC.
The following rating actions were taken:
Corporate family rating, assigned Ba2;
Probability of default rating, assigned Ba2-PD;
$500 million of senior unsecured notes due 2021, assigned Ba3,
LGD5-81%;
Speculative grade liquidity rating, assigned SGL-3;
The rating outlook is stable.
Ratings Rationale:
The Ba2 corporate family rating reflects HHC's healthy balance
sheet with a pro forma adjusted debt/capitalization of 41.5%,
diversified portfolio of both strong cash flow generating
properties and well-recognized development assets, well-laddered
debt maturities, and reasonably solid operating performance since
being spun off from General Growth Properties in November 2010.
At the same time, the Ba2 rating incorporates HHC's relatively
small revenue run rate as compared to the homebuilding universe
against which it is being, in part, compared and its limited time
as an independent, stand-alone entity. In addition, although the
company has assets spread across 18 states, currently the bulk of
its best assets and cash flows come from two master planned
communities in Las Vegas (Summerlin) and Houston (Woodlands).
Overlaying all of this is the volatile, highly cyclical, and very
capital intensive nature of the land and mixed use properties
development businesses, which encompass HHC.
The SGL-3 rating indicates that Moody's regards HHC's liquidity as
adequate. Because of its heavy development expenses, free cash
flow is likely to be negative over the next 12 to 18 months. This
will cause HHC to burn through its pro forma cash balance of
approximately $700 million at the closing of its note offering and
require additional external capital, although the company expects
to raise additional project level debt to fund a portion of these
development costs. In addition, HHC's current availability under
its two revolvers is somewhat small in relation to the company's
size. At the same time, liquidity is enhanced by the company's
strong performance under its financial covenants and its sizable
unencumbered asset base that could be sold off to raise funds. It
should be noted that more than half of the company's existing debt
is variable rate debt.
The stable rating outlook is based on Moody's expectation that HHC
will maintain debt leverage below 50%, continue to be able to
manage its large funding needs successfully, and show reasonably
strong revenue and earnings growth over the next 18 to 24 months.
The rating and/or outlook could benefit if the company were able
to maintain adjusted debt leverage below 40%, achieve sustainable
EBIT interest coverage above six times, and become largely free
cash flow positive.
The rating and/or outlook could be lowered if adjusted debt
leverage were to increase and remain above 55%, EBIT interest
coverage were to fall below three times, or its large development
portfolio were to run into funding, construction, or operating
difficulties.
The rating on the senior unsecured notes is notched below the Ba2
corporate family rating because of the presence of a large amount
of secured project financing in the capital structure.
The principal methodology used in this rating was the Global
Homebuilding Industry Methodology published in March 2009 and the
Global Rating Methodology for REITs and Other Commercial Property
Firms published in July 2010 . Other methodologies used include
Loss Given Default for Speculative-Grade Non-Financial Companies
in the U.S., Canada and EMEA published in June 2009.
Headquartered in Dallas, Texas, The Howard Hughes Corporation was
spun off from General Growth Properties in November 2010. The
company operates in three different segments: lot sales from
master planned communities; rental and other income from developed
mixed use properties (referred to as the Operating Assets
segment); and Strategic Developments, which include mixed use
properties held for future development and redevelopment. Total
revenues and operating income for the trailing 12 month period
ended June 30, 2013 were $440 million and $101 million,
respectively.
HOWARD HUGHES: S&P Assigns 'B' CCR & Rates $500MM Notes 'B'
-----------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' corporate
credit rating to The Howard Hughes Corp. (HHC). S&P also assigned
a 'B' issue-level rating and a '3' recovery rating to the proposed
$500 million senior unsecured notes due 2021. S&P's '3' recovery
rating indicates its expectation for a meaningful (50% to 70%)
recovery in the event of default.
"Our rating on HHC reflects our assessment that the company's
business risk profile is 'weak,' reflecting the company's
transaction-based business, whereby a significant portion of
revenues is tied to land sales to homebuilders and to speculative
development of real estate projects," said Standard & Poor's
credit analyst Scott Sprinzen. In addition, the rating reflects
S&P's assessment that the company's financial risk profile is
"highly leveraged" while pro forma for the proposed $500 million
senior unsecured debt issue, debt usage will be moderate
initially, and liquidity adequate. S&P expects that the company's
planned development spending over the next two to three years will
substantially outstrip internal cash flow, necessitating
additional external funding and potentially causing financial
leverage to increase.
HHC's asset base is primarily an amalgam of real estate properties
received from GGP Inc. (GGP; unrated) when HHC was formed in 2010.
HHC was spun off to GGP's shareholders in November 2010, in
conjunction with GGP's emergence from bankruptcy. As such, HHC
has a short track record in its current form, though some of its
properties do have long operating histories.
The stable outlook reflects S&P's view that homebuilding market
conditions in the Houston and Las Vegas areas will remain
favorable for at least the next one to two years and that HHC has
sufficient liquidity (pro forma for the proposed $500 million
senior unsecured debt issue) to fund its planned
redevelopment/development spending. As a result, S&P believes a
downgrade over the one-year time period addressed by the outlook
is unlikely. However, S&P could still lower the ratings if HHC
significantly accelerated planned investment spending beyond what
S&P now assumes, such that debt to EBITDA increased to be
materially above 7x in 2014. On the other hand, S&P considers an
upgrade unlikely over the next year, given the substantial
negative free cash flow that S&P expects HHC will generate.
Longer term, there could be upgrade potential, if HHC successfully
grows its base of recurring rental income, and if it were to
adhere consistently to a moderate financial policy.
HOWREY LLP: Suit v. Jones Day Transferred to District Court
-----------------------------------------------------------
Venue of the lawsuit filed by the Chapter 11 Trustee for Howrey
LLP against Jones Day has been transferred to the federal district
court in Oakland, California. Jones Day sought Withdrawal of
Reference. District Judge Saundra Brown Armstrong, in a Sept. 4
order available at http://is.gd/XMRt7jfrom Leagle.com, held that
any party objecting to withdrawal of the reference must file its
opposition, with the District Court by Sept. 18, 2013. Any party
supporting withdrawal of reference must file a reply brief by
Oct. 2. The briefs must not exceed then 10 pages. No hearing on
the motion will be held unless the District Court issues an Order
setting a date and time.
The case before the District Court is, ALLAN B. DIAMOND, Chapter
11 Trustee for Howrey LLP, Plaintiff, v. JONES DAY, Defendant,
Case No. C-13-3910 SBA (N.D. Calif.).
Defendant Jones Day is represented by:
Brian Daniel McDonald, Esq.
Jason S. McDonell, Esq.
Nathaniel Peardon Garrett, Esq.
Robert Allan Mittelstaedt, Esq.
Shay Dvoretzky, Esq.
Warren Postman, Esq.
JONES DAY
E-mail: bdmcdonald@jonesday.com
jmcdonell@jonesday.com
ngarrett@jonesday.com
ramittelstaedt@jonesday.com
sdvoretzky@jonesday.com
wpostman@jonesday.com
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.
He is represented by Andrew Baxter Ryan, Esq., and Stephen Todd
Loden, Esq., at Diamond McCarthy LLP as counsel.
HOWREY LLP: Suit v. Kasowitz Benson Transferred to District Court
-----------------------------------------------------------------
Venue of the lawsuit filed by the Chapter 11 Trustee for Howrey
LLP against Kasowitz Benson Torres & Friedman LLP has been
transferred to the federal district court in Oakland, California.
The defendant sought Withdrawal of Reference. District Judge
Saundra Brown Armstrong, in a Sept. 4 order available at
http://is.gd/pmvIe4from Leagle.com, held that any party objecting
to withdrawal of the reference must file its opposition, with the
District Court by Sept. 18, 2013. Any party supporting withdrawal
of reference must file a reply brief by Oct. 2. The briefs must
not exceed then 10 pages. No hearing on the motion will be held
unless the District Court issues an Order setting a date and time.
The case before the District Court is, ALLAN B. DIAMOND, Chapter
11 Trustee for Howrey LLP, Plaintiff, v. KASOWITZ BENSON TORRES &
FRIEDMAN LLP, Defendant, Case No. C-13-3909 SBA (N.D. Calif.).
Kasowitz Benson Torres & Friedman LLP, is represented by Margaret
Alexandra Ziemianek, Esq., and Michelle Lee Landry, Esq., at
Kasowtiz, Benson, Torres & Friedman.
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.
He is represented by Andrew Baxter Ryan, Esq., and Stephen Todd
Loden, Esq., at Diamond McCarthy LLP as counsel.
HOWREY LLP: Suit v. Neil Gerber Transferred to District Court
-------------------------------------------------------------
Venue of the lawsuit filed by the Chapter 11 Trustee for Howrey
LLP against Neal, Gerber & Eisenberg, LLP, has been transferred to
the federal district court in Oakland, California. The defendant
sought Withdrawal of Reference. District Judge Saundra Brown
Armstrong, in a Sept. 4 order available at http://is.gd/ImH8Ri
from Leagle.com, held that any party objecting to withdrawal of
the reference must file its opposition, with the District Court by
Sept. 18, 2013. Any party supporting withdrawal of reference must
file a reply brief by Oct. 2. The briefs must not exceed then 10
pages. No hearing on the motion will be held unless the District
Court issues an Order setting a date and time.
The case before the District Court is, ALLAN B. DIAMOND, Chapter
11 Trustee for Howrey LLP, Plaintiff, v. NEAL, GERBER & EISENBERG,
LLP, Defendant, Case No. C-13-3906 SBA (N.D. Calif.).
Defendant Neal, Gerber & Eisenberg is represented by:
Nancy Jo Newman, Esq.
HANSON BRIDGETT MARCUS VLAHOS & RUDY LLP
E-mail: nnewman@hansonbridgett.com
- and -
Robert Radasevich, Esq.
NEAL GERBER AND EISENBERG LLP
E-mail: rradasevich@ngelaw.com
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.
He is represented by Andrew Baxter Ryan, Esq., and Stephen Todd
Loden, Esq., at Diamond McCarthy LLP as counsel.
HOWREY LLP: Suit v. Pillsbury Winthrop Goes to District Court
-------------------------------------------------------------
Venue of the lawsuit filed by the Chapter 11 Trustee for Howrey
LLP against Pillsbury Winthrop Shaw Pittman LLP and others has
been transferred to the federal district court in Oakland,
California. The defendants sought Withdrawal of Reference.
District Judge Saundra Brown Armstrong, in a Sept. 4 order
available at http://is.gd/W66PJBfrom Leagle.com, held that any
party objecting to withdrawal of the reference must file its
opposition, with the District Court by Sept. 18, 2013. Any
party supporting withdrawal of reference must file a reply brief
by Oct. 2. The briefs must not exceed then 10 pages. No hearing
on the motion will be held unless the District Court issues an
Order setting a date and time.
The case before the District Court is, ALLAN B. DIAMOND, Chapter
11 Trustee for Howrey LLP, Plaintiff, v. PILLSBURY WINTHROP SHAW
PITTMAN LLP, JEFFREY GANS, MELISSA LESMES, and MICHAEL McNAMARA,
Defendants, Case No. C-13-3912 SBA (N.D. Calif.).
Defendant Pillsbury Winthrop is represented by:
John M. Grenfell, Esq.
Ana N. Damonte, Esq.
PILLSBURY WINTHROP SHAW PITTMAN LLP
Defendant Jeffrey Gans appears Pro Se.
Defendant Melissa Lesmes appears Pro Se.
Defendant Michael McNamara appears Pro Se.
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.
He is represented by Andrew Baxter Ryan, Esq., and Stephen Todd
Loden, Esq., at Diamond McCarthy LLP as counsel.
HOWREY LLP: Suit v. Shearman & Sterling Goes to District Court
--------------------------------------------------------------
Venue of the lawsuit filed by the Chapter 11 Trustee for Howrey
LLP against Shearman & Sterling LLP has been transferred to the
federal district court in Oakland, California. Shearman &
Sterling sought Withdrawal of Reference. District Judge Saundra
Brown Armstrong, in her Sept. 4 order available at
http://is.gd/yTNid1from Leagle.com, held that any party objecting
to withdrawal of the reference must file its opposition, with the
District Court by Sept. 18, 2013. Any party supporting withdrawal
of reference must file a reply brief by Oct. 2. The briefs must
not exceed then 10 pages. No hearing on the motion will be held
unless the District Court issues an Order setting a date and time.
The case before the District Court is, ALLAN B. DIAMOND, Chapter
11 Trustee for Howrey LLP, Plaintiff, v. SHEARMAN & STERLING LLP,
STEPHEN MAVROGHENIS, TREVOR SOAMES, and GEERT GOETEYN, Defendants,
Case No. C-13-3903 SBA (N.D. Calif.).
Shearman & Sterling LLP, is represented by Steven E. Sherman,
Esq., Shearman and Sterling LLP.
Defendant Stephen Mavroghenis is represented by Robert Edward
Clark, Esq., and Cecily A. Dumas, Esq., at Dumas & Clark LLP.
Defendant Trevor Soames appeared Pro Se.
Defendant Geert Goeteyn appeared Pro Se.
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.
He is represented by Andrew Baxter Ryan, Esq., and Stephen Todd
Loden, Esq., at Diamond McCarthy LLP as counsel.
HOWREY LLP: Suit v. Venable Transferred to District Court
---------------------------------------------------------
Venue of the lawsuit filed by the Chapter 11 Trustee for Howrey
LLP against Venable LLP has been transferred to the federal
district court in Oakland, California. Venable sought Withdrawal
of Reference. District Judge Saundra Brown Armstrong, in her
Sept. 4 order available at http://is.gd/2Xk5kbfrom Leagle.com,
held that any party objecting to withdrawal of the reference must
file its opposition, with the District Court by Sept. 18, 2013.
Any party supporting withdrawal of reference must file a reply
brief by Oct. 2. The briefs must not exceed then 10 pages. No
hearing on the motion will be held unless the District Court
issues an Order setting a date and time.
The case before the District Court is, ALLAN B. DIAMOND, Chapter
11 Trustee for Howrey LLP, Plaintiff, v. VENABLE LLP, Defendant,
Case No. C-13-3908 SBA (N.D. Calif.).
Venable LLP is represented by Jennifer Lynne Nassiri, Esq., and
Keith Charles Owens, Esq., at Venable LLP.
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.
He is represented by Andrew Baxter Ryan, Esq., and Stephen Todd
Loden, Esq., at Diamond McCarthy LLP as counsel.
HRK HOLDINGS: Has Until Oct. 29 to File Chapter 11 Plan
-------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida
extended HRK Holdings, LLC, et al.'s exclusive periods to file a
Chapter 11 Plan until Oct. 29, 2013, and solicit acceptances for
that Plan until Dec. 30.
As reported in the Troubled Company Reporter on Sept. 12, 2013,
the Debtors relayed that they are seeking the extension to allow
them the time necessary to close anticipated sales of their assets
to the successful bidders.
About HRK Holdings
Based in Palmetto, Florida, HRK Holdings LLC owns roughly 675
contiguous acres of real property in Manatee County, Florida.
Roughly 350 acres of the property accommodates a phosphogypsum
stack system, called Gypstaks, a portion of which was used as an
alternate disposal area for the management of dredge materials
pursuant to a contract with Port Manatee and as authorized under
an administrative agreement with the Florida Department of
Environmental Protection. The remaining acres of usable land are
either leased to various tenants or available for sale. HRK
Industries holds various contracts and leases associated with the
Debtors' property.
HRK Holdings and HRK Industries LLC filed for Chapter 11
protection (Bankr. M.D. Fla. Case Nos. 12-09868 and 12-09869) on
June 27, 2012. Judge K. Rodney May oversees the case. Barbara A.
Hart, Esq., and Scott A. Stichter, Esq., at Stichter, Riedel,
Blain & Prosser, P.A., represents the Debtors.
HRK Holdings disclosed $33,366,529 in assets and $26,092,559
in liabilities in its revised schedules.
According to the Debtors, the bankruptcy filing was necessitated
by the immediate need to sell a portion of the remaining property
to create liquidity for (a) funding the urgent management of the
site-related environmental concerns; the benefit of creditors;
funding a litigation filed by the Debtors; and funding of expenses
related to additional sales of the remaining property.
HRK HOLDINGS: Hearing on DIP Financing Continued Until Sept. 26
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida, in a
proceeding memo, continued until Sept. 26, 2013, at 11 a.m., the
hearing to consider HRK Holdings, LLC, et al.'s fourth motion for
authority to (i) obtain postpetition financing from Regions Bank,
N.A.; (ii) establish a line of credit for long term care issues
and (iii) grant senior liens and superpriority administrative
expense status.
As reported in the Troubled Company Reporter on Sept. 12, 2013,
Judge Rodney May granted HRK Holdings et al., permission to borrow
up $794,087 in additional funds in an existing Operating Line of
Credit to be advanced by Regions Bank, N.A.
Under their Fourth DIP Loan Motion, the Debtors originally sought
up to $2,500,000 in additional funds from the lender.
The $794,087 in approved Additional Funds may be used for expenses
actually incurred by the Debtors and as consistent with a prepared
budget, including interest reserves and closing costs. A copy of
the HRK DIP Budget is available for free at:
http://bankrupt.com/misc/HRK_BudgetSepttoDec2013.pdf
The maturity date under the Operating Lne of Credit and the Site
Work Line of Credit is also extended to Dec. 31, 2013.
The Additional Borrowing advances under the Second DIP Loan will
bear a 9% interest per annum. Regions will not be entitled to any
default interest in conjunction with the Second DIP Loan.
The Debtors' obligation to repay Regions will be accorded a first
lien on all of the Debtors' assets. The DIP Lender Liens will
prime and be senior in priority to all other liens in favor of all
secured creditors -- except for the ad valorem taxes in favor of
Manatee County, Florida, for 2012 and subsequent years. The loan
repayment obligations is also accorded superpriority
administrative expense status pursuant to Sec. 364(c)(1) of the
Bankruptcy Code.
Under the First DIP Motion, the Court allowed the Debtors to
borrow $125,000 from the Arsenal Group, LLC. Under the Second DIP
Motion, the Debtors were allowed to borrow $3,480,139 from Regions
Bank under an Operating Line Credit and a subsequent $1,251,826 in
additional funds. Under the Third DIP Loan Motion, the Debtors
were allowed to borrow $237,251 from Regions Bank.
About HRK Holdings
Based in Palmetto, Florida, HRK Holdings LLC owns roughly 675
contiguous acres of real property in Manatee County, Florida.
Roughly 350 acres of the property accommodates a phosphogypsum
stack system, called Gypstaks, a portion of which was used as an
alternate disposal area for the management of dredge materials
pursuant to a contract with Port Manatee and as authorized under
an administrative agreement with the Florida Department of
Environmental Protection. The remaining acres of usable land are
either leased to various tenants or available for sale. HRK
Industries holds various contracts and leases associated with the
Debtors' property.
HRK Holdings and HRK Industries LLC filed for Chapter 11
protection (Bankr. M.D. Fla. Case Nos. 12-09868 and 12-09869) on
June 27, 2012. Judge K. Rodney May oversees the case. Barbara A.
Hart, Esq., and Scott A. Stichter, Esq., at Stichter, Riedel,
Blain & Prosser, P.A., represents the Debtors.
HRK Holdings disclosed $33,366,529 in assets and $26,092,559
in liabilities in its revised schedules.
According to the Debtors, the bankruptcy filing was necessitated
by the immediate need to sell a portion of the remaining property
to create liquidity for (a) funding the urgent management of the
site-related environmental concerns; the benefit of creditors;
funding a litigation filed by the Debtors; and funding of expenses
related to additional sales of the remaining property.
HUDSON'S BAY: Moody's Gives 'B1' CFR & Rates $2BB Term Loan 'B1'
----------------------------------------------------------------
Moody's Investors Service assigned a B1 Corporate Family Rating
and a B1-PD Probability of Default Rating to Hudson's Bay Company.
Moody's also assigned a B1 rating to the proposed $1.9 billion
secured term loan due 2020 as well as a SGL-2 Speculative Grade
Liquidity rating. The rating outlook is stable. The ratings
assigned are subject to receipt and review of final loan
documentation.
HBC entered into a definitive agreement to acquire Saks, Inc.
("Saks" -- Ba2/Review for Downgrade) for approximately US$2.9
billion including debt. Proceeds from the new term loan, along
with drawings under asset based revolving credit facilities in the
US and Canada, US$1 billion in common equity and an expected
offering of US$400 million of senior unsecured notes will be used
to fund the purchase price of Saks, to refinance certain existing
debt of Saks and HBC, and to pay fees and expenses.
Moody's is concurrently withdrawing all existing ratings of Lord &
Taylor Holdings, LLC, a wholly owned subsidiary of HBC, following
the repayment of its previously rated debt.
The following ratings were assigned:
Hudson's Bay Company
Corporate Family Rating at B1
Probability of Default Rating at B1-PD
Speculative Grade Liquidity Rating at SGL-2
$1.9 billion Senior Secured Term Loan B due 2020 at B1 (LGD 4,
57%)
The following ratings were withdrawn:
Lord & Taylor Holdings, LLC:
Corporate Family Rating at B1
Probability of Default Rating at B1-PD
Senior secured bank term loan at Ba3
Ratings Rationale:
The B1 Corporate Family Rating assigned to HBC reflects the
company's meaningful debt burden following the acquisition of Saks
-- proforma debt/EBITDA is estimated to be around 6.4 times
(improving to near six times pro-forma for prospective cost
savings if fully achieved). The ratings also considers the
integration risk associated with this acquisition, which increases
HBC's existing revenues by around 80%, and that Saks' luxury
business is a new segment for HBC. The company's US operations --
which will represent around 60% of total sales --also have a
significant geographic concentration in the Northeastern US, with
Lord & Taylor primarily operating in this area which also includes
Saks NY flagship store. The company's high leverage is mitigated
by its sizable owned real estate holdings across all 3 banners, a
substantial portion of which is unpledged. The ratings also take
into consideration the improved operating performance of Hudson's
Bay and Lord & Taylor under current management, which has shown
generally consistent trends in same store sales and margins over
the past few years. The ratings also take into consideration the
diversification of the company across the US and Canada and with 3
distinct brands.
The stable rating outlook reflects Moody's expectation the company
will manage the integration of Saks without significant
disruption, and substantially achieve targeted cost synergies over
the next three years. Moody's expects the combined firm will
primarily utilize cash flow to support investments in its business
-- including but not limited to store remodels, omnichannel
initiatives and the rollout of Saks into Canada -- rather than to
reduce funded debt. Moody's expects the company's financial
policies to remain supportive of creditor interests, and that any
possible actions the company may take with respect to its sizable
real estate holdings will be essentially neutral to credit
metrics.
The B1 rating assigned to the proposed secured term loan reflects
its second-lien position on the company's accounts receivable and
inventory (the company's CAD750 million and US$950 million asset
based revolvers will have a first lien on these assets in Canada
and the US) and the modest level of junior capital from the
company's expected offering of $400 million of senior unsecured
notes. The term loan B will have a first lien on all other assets
of the company in the US and Canada. The term loan will not have
any security interest in the company's owned real estate and the
legal entities which own the real estate will not guarantee
payment of the secured term loan. The secured term loan lenders
will benefit from a pledge of the stock of the real estate owning
entities.
In view of the company's high leverage and integration risk,
ratings are unlikely to be upgraded in the near term. Over time
ratings could be upgraded if the company makes sustained progress
with the integration of Saks and is successful with growth
initiatives at Hudson's Bay and Lord & Taylor, which would be
evidenced by continued modestly positive revenue growth and
improved operating margins on a consolidated basis. Quantitatively
ratings could be upgraded if debt/EBITDA was sustained below 5
times and interest coverage was sustained above 2.0 times while
maintaining a good overall liquidity profile.
In view of the high initial leverage and integration challenges,
there is limited capacity for the company's financial policies to
become more aggressive, for example, if actions with its sizable
real estate portfolio were not supportive of creditor interests.
Ratings could be downgraded if the competitive profile of the
company weakened. For example, if integration challenges with Saks
led to revenue declines or if greater competition in the Canadian
market led to reversal of recent positive trends at Hudson's Bay.
Ratings could also be lowered if there were any meaningful erosion
in the company's good overall liquidity profile. Quantitatively
ratings could be downgraded if debt/EBITDA was expected to remain
above 6.5 times for an extended period or interest coverage
approached 1.25 times.
Headquartered in Toronto, Canada, Hudson's Bay Company ("HBC")
operates Hudson's Bay, Canada's largest branded department store
with 90 locations, and Home Outfitters, Canada's largest home
specialty superstore with 69 locations across the country. In the
United States, HBC operates Lord & Taylor, a department store with
48 full-line store locations throughout the northeastern United
States and in two major cities in the Midwest, and
lordandtaylor.com. The company has agreed to acquire Saks, Inc.
who currently operates 41 Saks Fifth Avenue stores, 69 Saks Fifth
Avenue OFF 5TH stores, and saks.com. Fiscal 2012 revenues for HBC
and Saks were CAD4.1 billion and US$3.1 billion, respectively.
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.
INFINIA CORPORATION: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------------
Debtor: Infinia Corporation
300 West 12th Street
Ogden, UT 84404
Bankruptcy Case No.: 13-30688
Chapter 11 Petition Date: September 17, 2013
Court: U.S. Bankruptcy Court
District of Utah (Salt Lake City)
Judge: William T. Thurman
Debtor's Counsel: George B. Hofmann, Esq.
PARSONS KINGHORN & HARRIS, P.C.
111 East Broadway, 11th Floor
Salt Lake City, UT 84111
Tel: (801) 363-4300
Fax: (801) 363-4378
E-mail: gbh@pkhlawyers.com
Estimated Assets: $10,000,001 to $50,000,000
Estimated Debts: $10,000,001 to $50,000,000
The petition was signed by Michael Ward, president.
Debtor's List of Its xx Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
MagicAll Inc. Trade Debt/ $12,000,000
P.O. Box 3730 Litigation
Camarillo, CA 93011-3730
ATL Technology LLC Trade Debt $564,124
1385 W. 1650 N.
Springville, UT 84663
Rioglass Solar Inc. Trade Debt $373,772
13351 W. Rioglass Solar Road
Surprise, AZ 85379
GE Capital Bank Lease $426,776
P.O. Box 31001-0275
Pasadena, CA 91110-0275
Okanogan Vista LLC Rent $251,379
909 N. Kellog Street
Kennewick, WA 99336
Richards Sheet Metal Works, Inc. Trade Debt $192,075
Intertek Testing Srvc NA Inc. Trade Debt $179,289
Sangsin Precision Co. Ltd. Trade Debt $157,350
Fenwick & West, LLP Legal Debt $131,468
Leanwerks, LLC Trade Debt $123,227
United Performance Metals Inc. Trade Debt $110,880
Petersen, Inc. Rent $104,486
Pablo Gonzalez dba Pelisol Group Trade Debt $99,120
Apricum Trade Debt $82,297
Associated Spring Barnes Group Trade Debt $78,902
PNC Equipment Finance, LLC Bank Lease $78,481
Weber County Corporation Personal Property $76,610
Tax
Consolidated Electrical ? Royal Trade Debt $68,098
Wholesale
FUJI FIlter Manufacturing Co. Ltd. -- $64,752
Machine Laboratories, LLC -- $63,839
IRISH BANK RESOLUTION: Seeking Temporary Halt to Suits in the U.S.
------------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Irish Bank Resolution Corp. decided not to go ahead
with a hearing Sept. 20 on the question of whether it's eligible
for bankruptcy protection in the U.S. under Chapter 15. According
to the report, in view of several objections, the Sept. 20 hearing
was instead a status conference to discuss scheduling.
The report notes that because some of the objectors are pressing
ahead with lawsuits in the U.S., IBRC scheduled an emergency
hearing Sept. 20 to ask the bankruptcy judge in Delaware to impose
the so-called automatic stay halting legal actions in the U.S.
In a Chapter 15 cross-border bankruptcy like IRBC's, there is no
automatic stay akin to the halt on legal proceedings that arises
immediately following bankruptcy. In return for freezing lawsuits
in the U.S., IBRC agrees to remove no assets from the U.S.
The report relates that at a hearing some weeks in the future, the
bankruptcy judge will grapple with the question of whether the
special Irish law created just for IBRC qualifies for recognition
under Chapter 15. IBRC sought a temporary stay against U.S. legal
proceedings because John Flynn, one of the objectors, went ahead
with a U.S. suit when the Irish court refused to allow him to
proceed.
About Irish Bank
Irish Bank Resolution Corp., the liquidation vehicle for what was
once one of Ireland's largest banks, filed a Chapter 15 petition
(Bankr. D. Del. Case No. 13-12159) on Aug. 26, 2013, to protect
U.S. assets of the former Anglo Irish Bank Corp. from being seized
by creditors.
Irish Bank Resolution is seeking assistance from the U.S. court in
liquidating Anglo Irish Bank Corp. and Irish Nationwide Building
Society. The two banks failed and were merged into IBRC in July
2011. IBRC was tasked with winding them down and liquidating
their assets. In February, when Irish lawmakers adopted the Irish
Bank Resolution Corp., IBRC was placed into a special liquidation
in the Irish High Court to complete liquidation and distribution
of the two banks' assets.
IBRC's principal asset as of June 2012 was a loan portfolio valued
at some 25 billion euros ($33.5 billion). About 70 percent of the
loans were to Irish borrowers. Some 5 percent of the portfolio was
under U.S. law, according to a court filing. Total liabilities in
June 2012 were about 50 billion euros, according to a court
filing.
Most assets in the U.S. have been sold already. IBRC is involved
in lawsuits in the U.S.
The IRBC liquidators want the U.S. bankruptcy judge to rule that
Ireland is home to the so-called foreign main bankruptcy
proceeding. If the judge agrees and determines that IBRC
otherwise qualifies, creditor actions in the U.S. will halt
automatically.
ISAACSON STEEL: Exit Plan Built on Global Settlement Agreement
--------------------------------------------------------------
Isaacson Steel, Inc., and Isaacson Structural Steel, Inc.,
submitted to the U.S. Bankruptcy Court for the District of New
Hampshire a Joint Plan of Reorganization and explanatory
Disclosure Statement dated Sept. 18, 2013.
The Plan is premised on a Global Settlement Agreement or "GSA"
among the Debtors, the Official Committee of Unsecured Creditors,
the New Hampshire Business Finance Authority, Passumpsic Savings
Bank and its participants, Woodsville Guaranty Savings Bank and
Ledyard National Bank and Turner Construction Company, Inc.
Under the Plan, a Liquidating Trust, known as the "Isaacson Steel
Liquidating Trust", will be established by the Debtors and the
trustee. The Debtors will fund the trust with all of their (i)
cash (except that to be retained by the Debtors to wind up their
affairs), (ii) D&O and E&O Claims and (iii) Chapter 5 and Other
Actions. Assets will be governed by the trust and GSA. The
Debtors have filed a redacted copy of the GSA together with the
Plan documents.
In essence, the Trust will become responsible for the
implementation of the Plan. One of its purposes is to prosecute
claims against former officers and directors of the Debtor, as
insured individuals under the D&O Policy. The Trust is a proven
means of avoiding the "insured v. insured" exclusion contained in
the Debtor's D&O Policy.
During the pendency of the Debtors' cases, the Debtors realized
that they could not develop enough new business to be viable
entities without new investors or a buyer that would continue the
business. The Debtors retained General Capital Partners, LLC to
act as their investment banker. The investment banker convinced
Presby Steel, LLC to buy all or substantially all of the assets of
Steel for approximately $225,000 during January 2012. Virtually
all of the proceeds of the Presby Sale were paid over to PSB and
the Berlin Industrial Development Park Authority, which had
financed a significant amount of equipment for Steel. As a
result, Steel has no Property, except for its Causes of Action.
During the case, the Debtors realized that they could not develop
enough new business to be viable entities without new investors or
a buyer that would continue the Business. The Debtors retained
General Capital Partners, LLC to act as their investment banker.
The Investment Banker spent months diligently, but unsuccessfully
seeking investors, partners, joint venturers and strategic allies
for the Debtors. The Debtors eventually struck a deal in January
2012 to sell to Presby Steel, LLC, all of the assets of Steel for
approximately $225,000. Virtually all of the Proceeds of the
Presby Sale were paid over to PSB and the Berlin Industrial
Development Park Authority, which had financed a significant
amount of equipment for Steel. As a result, Steel has no
Property, except for its Causes of Action.
ISSI spent months and a substantial amount of time and money and
negotiating a sale of all or substantially of its Property with
Heico Holding, Inc. ISSI believed for a long time that the
transaction would go forward and close. The only issue seemed to
be whether or not the ISSI's business premises, which had been
built on the City of Berlin Landfill, were contaminated by
hazardous waste despite environmental reports, which almost
eliminated the contamination issue. ISSI offered to pay for an
environmental report to move the transaction forward. When Heico
refused the offer, ISSI concluded that Heico had no real intention
of buying ISSI's operating assets.
Even before the Heico negotiation reached their end, ISSI decided
that it might have to auction off its Property. ISSI sought and
received Bankruptcy Court Approval to sell all, or substantially
all of its tangible Property at an auction advertised and
conducted by ISSI. A venture comprised of RB Capital, Myron
Bowling Auctioneers and Hilco Industries bought ISSI's Property
for $2,400,000 at the auction. The Bankruptcy Court confirmed the
sale at ISSI's request.
After paying its Professionals 12% of the Auction Proceeds and its
customary and usual costs and expenses, ISSI paid over the balance
of the Proceeds to PSB for application to its Secured Claim.
A copy of the Disclosure Statement is available for free at
http://bankrupt.com/misc/ISAACSON_STEEL_ds.pdf
About Isaacson Structural Steel, Inc.
Based in Berlin, New Hampshire, Isaacson Structural Steel, Inc.,
and affiliate Isaacson Steel, Inc., filed separate Chapter 11
bankruptcy petitions (Bankr. D. N.H. Case Nos. 11-12416 and
11-12415) on June 22, 2011.
Isaacson Structural Steel estimated both assets and debts of
$10 million to $50 million. Isaacson Steel estimated assets and
debts of $1 million to $10 million. The petitions were signed by
Arnold P. Hanson, Jr., president.
Bankruptcy Judge J. Michael Deasy presides over the cases.
William S. Gannon PLLC represents the Debtors as counsel.
An official committee of unsecured creditors has been appointed in
Isaacson Structural Steel's case. Nixon Peabody LLP, and Mesirow
Financial Consultants represents the Committee.
The cases are being jointly administered. No trustee or examiner
has been appointed.
LATCO INC: Case Summary & 3 Unsecured Creditors
-----------------------------------------------
Debtor: Latco, Inc.
aka Latco Construction, Inc.
Latco Poultry Supply
Latco of Missouri, Inc.
Latco of North Carolina, LLC
Latco of Mississippi, Inc.
Latco Structural Components
Lincoln Arkansas Trucking, Inc.
P.O. Box 9
Lincoln, AR 72744-0009
Bankruptcy Case No.: 13-73160
Chapter 11 Petition Date: September 18, 2013
Court: U.S. Bankruptcy Court
Western District of Arkansas (Fayetteville)
Judge: Ben T. Barry
Debtor's Counsel: Jill R. Jacoway, Esq.
JACOWAY LAW FIRM
P.O. Drawer 3456
Fayetteville, AR 72702-3456
Tel: (479) 521-2621
E-mail: jacowaylaw@sbcglobal.net
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A copy of the Company's list of its largest unsecured creditors
filed with the petition is available for free at:
http://bankrupt.com/misc/arwb13-73160.pdf
The petition was signed by Kimberly K. Pergeson, president.
Affiliate that filed separate Chapter 11 petition:
Entity Case No. Petition Date
------ -------- -------------
Latco, Inc. 13-72689 08/01/13
LEE'S FORD: Can Access BB&T Cash Collateral Until Oct. 10
---------------------------------------------------------
On Sept 11, 2013, the U.S. Bankruptcy Court for the Eastern
District of Kentucky entered a 17th interim order authorizing Lee's
Ford Dock, Inc., et al., to continue using cash collateral during
the period from Sept. 10, 2013, through Oct. 10, 2013.
As adequate protection for the use of BB&T's Cash Collateral
during the month of September 2013, the Debtors will make a
monthly adequate protection payment to BB&T in the amount of
$15,000 on or before the eighteenth (18th) day of September.
All other terms of the Prior Interim Orders will remain in full
force and effect through Oct. 10, 2013, except as specifically
modified in this 17th interim order and in the budget for the
extended interim period.
If the Debtors and the Cash Collateral Creditors are unable to
reach an agreement as to the terms of such a final order on or
before Oct. 10, 2013, then they may tender further interim orders;
provided that if no interim orders are tendered on or before Oct.
10, 2013, this matter will come on for final hearing on Friday,
Oct. 18, 2013 at 9:30 a.m. (ET), or as soon thereafter as counsel
may be heard.
About Lee's Ford
Lee's Ford Dock Inc., Hamilton Brokerage LLC, Hamilton Capital
LLC, Lee's Ford Hotels LLC, Lee's Ford Woods LLC, and Top Shelf
Marine Sales Inc., filed for Chapter 11 bankruptcy (Bankr. E.D.
Ky. Case Nos. 12-60818 to 12-60823) on July 4, 2008. The Debtors
collectively operate as "Lee's Ford Resort & Marina" --
http://www.leesfordmarina.com/-- which consists of a boat dock,
lodging facilities, the Harbor Restaurant & Tavern, a retail
store, and a boat brokerage business and Web site located at
http://www.buyaboat.neton Lake Cumberland in Nancy, Kentucky.
Hamilton Brokerage LLC and Hamilton Capital LLC are not actively
involved in the Debtors' operations, but are holding companies set
up as part of the structure of the original purchase transactions
which began in 2003.
The Debtors' revenues were adversely impacted by the lowering of
the water level of Lake Cumberland in January 2007 to allow for
repairs to Wolf Creek Dam. The Debtors were forced to incur
extraordinary costs to relocate the Dock and related facilities in
accordance with the new water level.
Attorneys at DelCotto Law Group PLLC, in Lexington, Ky., serve as
the Debtors' counsel. The Debtor disclosed $21,225,899 in assets
and $13,339,745 in liabilities as of the Chapter 11 filing. The
petition was signed by James D. Hamilton, president. Mr. Hamilton
has been designated as the individual responsible for performing
the duties of the Debtors.
Smith, Currie & Hancock LLP serves as special counsel to advise
and assist the Debtor in connection with its pursuit of claims
against the U.S. Army Corps of Engineers. Venters Law Office
serves as special counsel to advise and assist the Debtor in
connection with the prosecution and defense of general litigation
matters, including the collection of unpaid boat slip rental fees,
and any other specific matters in connection therewith.
The U.S. Trustee has said an official committee has not been
appointed in the bankruptcy case of Lee's Ford Dock Inc. because
an insufficient number of persons holding unsecured claims against
the Debtor have expressed interest in serving on a committee.
LIGHTSQUARED INC: Court Orders Removal of Donna Alderman
--------------------------------------------------------
Joseph Checkler, writing for The Wall Street Journal, reports that
Judge Shelley C. Chapman of U.S. Bankruptcy Court in Manhattan on
Tuesday told LightSquared Inc. to remove Donna Alderman as an
independent director from the special committee formed to help
oversee the sale of the company. Judge Chapman agreed with
lenders that the director's previous relationship with would-be
buyer Dish Network Corp. could be viewed as a conflict of
interest.
WSJ also reports that Judge Chapman agreed to postpone a hearing
on the proposed auction until Monday to give LightSquared time to
reach a compromise with the lenders over bid procedures for the
auction.
LONGVIEW POWER: Kvaerner and Siemens Object to Cash Collateral Use
------------------------------------------------------------------
Kvaerner North American Construction Inc. asks the U.S. Bankruptcy
Court for the District of Delaware to deny Longview Power, LLC, et
al.'s use their cash collateral to the extent the use is
conditioned upon by the lenders making a demand and drawing on the
letters of credit and because there is no adequate protection the
Debtors can provide to the consortium to protect against the
diminution in value of the proceeds of the letters of credit
should the Debtors draw, exhaust the proceeds, and then it is
subsequently determined that the Debtors had no right to draw in
the first place.
Siemens Energy, Inc., in a separate filing, asks the Bankruptcy
Court to modify the interim cash collateral order to provide that:
(i) the determination of the arbitration tribunal of the Foster
Wheeler LC issues should control; and (ii) Siemens is not required
to commence an adversary proceeding asserting the claims and
defenses to preserve those claims and defenses against the
lenders.
A hearing on the Debtors' request to use cash collateral is
scheduled for Oct. 7, 2013, at 9:00 a.m. EST.
Eric Lopez Schnabel, Esq. -- schnabel.eric@dorsey.com -- and
Robert W. Mallard, Esq. -- mallard.robert@dorsey.com -- at DORSEY
& WHITNEY LLP, in Wilmington, Delaware; Neil E. McDonell, Esq. --
mcdonell.neil@dorsey.com -- at DORSEY & WHITNEY LLP, in New York;
and Jocelyn L. Knoll, Esq. -- knoll.jocelyn@dorsey.com -- and Eric
Ruzicka, Esq. -- ruzika.eric@dorsey.com -- at DORSEY & WHITNEY
LLP, in Minneapolis, Minnesota, represent Kvaerner.
James C. Carignan, Esq. -- detweilerd@pepperlaw.com -- and Donald
J. Detweiler, Esq. -- carignanj@pepperlaw.com -- at Pepper
Hamilton LLP, in Wilmington, Delaware; Edward C. Dolan, Esq. --
edward.dolan@hoganlovells.com -- and Robert B. Wolinsky, Esq. --
robert.wolinsky@hoganlovells.com -- at Hogan Lovells US LLP, in
Washington, D.C.; and Daniel E. Gonzalez, Esq. --
daniel.gozalez@hoganlovells.com -- Mark R. Cheskin, Esq. --
mark.cheskin@hoganlovells.com -- and Richard C. Lorenzo, Esq. --
Richard.lorenzo@hoganlovells.com -- at Hogan Lovells US LLP, in
Miami, Florida, represent Siemens.
Longview Power, LLC, filed a Chapter 11 (Bank. D. Del. Lead Case.
13-12211) on Aug. 30, 2013. The petitions were signed by Jeffery
L. Keffer, the Company's chief executive officer, president,
treasurer and secretary. The Debtor estimated assets and debts of
more than $1 billion. Judge Brendan Linehan Shannon presides over
the case. Kirkland & Ellis LLP and Richards, Layton & Finger,
P.A., serve as the Debtors' counsel. Lazard Freres & Company LLC
acts as the Debtors' investment bankers. Alvarez & Marsal North
America, LLC, is the Debtors' restructuring advisors. Ernst &
Young serves as the Debtors' accountants. The Debtors' claims
agent is Donlin, Recano & Co. Inc.
LONGVIEW POWER: Kvaerner & Siemens Want Arbitration to Proceed
--------------------------------------------------------------
Kvaerner North American Construction Inc. and Siemens Energy,
Inc., separately ask the U.S. Bankruptcy Court for the District of
Delaware to lift the automatic stay for purposes of continuing the
prepetition arbitration between Debtor Longview Power, LLC, and
several contractors.
In 2007, Longview Power, Foster Wheeler North America Corp.,
Kvaerner and Siemens collectively entered into five separate
agreement governing construction of a $2 billion coal-fired power
generation facility in Maidsville, West Virginia. Two of the five
agreements provide that all disputes must be resolved in a binding
AAA arbitration. In January 2012, Siemens, Kvaerner, Foster
Wheeler and Longview signed the Agreement Regarding Selection of
Neutral Arbitrators, which confirmed that all disputes between
them would be resolved in arbitration.
A number of disputes arose among the parties regarding the
construction of the power facility. In June 2011, Kvaerner filed
a AAA arbitration demand against Longview and Foster Wheeler for
breach of contract.
The arbitration claims, according to Kvaerner's counsel, Eric
Lopez Schnabel, Esq., at Dorsey & Whitney (Delaware) LLP, in
Wilmington, Delaware, derive exclusively from state law,
including, among others, numerous breach of contract claims
governed by the laws of the State of New York. Mr. Schnabel
argues that the mere possibility that the Arbitration Claims may
now involve some aspects of bankruptcy law as a result of the
bankruptcy filing does not mean the Arbitration Claims derive
exclusively from the Bankruptcy Code.
The merits of the arbitration are complex, Siemens' counsel, James
C. Carignan, Esq., at Pepper Hamilton LLP, in Wilmington,
Delaware, tells the Bankruptcy Court. There is over $500 million
in dispute in the arbitration, with claims and cross-claims being
made by each party.
Siemens seeks entry of an order modifying the automatic stay to
resume the pending arbitration so that the tribunal can determine
the respective interests of the parties.
Kvaerner is also represented by Robert W. Mallard, Esq., at DORSEY
& WHITNEY (DELAWARE) LLP, in Wilmington, Delaware; Neil E.
McDonell, Esq., at DORSEY & WHITNEY LLP, in New York; and Jocelyn
L. Knoll, Esq., and Eric Ruzicka, Esq., at at DORSEY & WHITNEY
LLP, in Minneapolis, Minnesota.
Siemens is also represented by Donald J. Detweiler, Esq., at
Pepper Hamilton LLP, in Wilmington, Delaware; Edward C. Dolan,
Esq., and Robert B. Wolinsky, Esq., at Hogan Lovells US LLP, in
Washington, D.C.; and Daniel E. Gonzalez, Esq., Mark R. Cheskin,
Esq., and Richard C. Lorenzo, Esq., at Hogan Lovells US LLP, in
Miama, Florida, also represent Siemens.
Longview Power, LLC, filed a Chapter 11 (Bank. D. Del. Lead Case.
13-12211) on Aug. 30, 2013. The petitions were signed by Jeffery
L. Keffer, the Company's chief executive officer, president,
treasurer and secretary. The Debtor estimated assets and debts of
more than $1 billion. Judge Brendan Linehan Shannon presides over
the case. Kirkland & Ellis LLP and Richards, Layton & Finger,
P.A., serve as the Debtors' counsel. Lazard Freres & Company LLC
acts as the Debtors' investment bankers. Alvarez & Marsal North
America, LLC, is the Debtors' restructuring advisors. Ernst &
Young serves as the Debtors' accountants. The Debtors' claims
agent is Donlin, Recano & Co. Inc.
LONGVIEW POWER: Taps James M. Grady as Chief Financial Officer
--------------------------------------------------------------
Longview Power, LLC, et al., seek authority from the U.S.
Bankruptcy Court for the District of Delaware to retain Alvarez &
Marsal North America, LLC, to provide the Debtors a deputy chief
financial officer and certain additional personnel. The Debtors
also seek authority to designate James M. Grady as deputy chief
financial officer.
A&M will be paid by the Debtors for the services of the engagement
personnel at their customary hourly billing rates, which are as
follows:
Managing Directors $675-$875
Directors $475-$675
Analysts/Associates $275-$475
The firm will also be reimbursed for any necessary out-of-pocket
expenses.
Lawrence Hirsh assures the Court that it 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. A&M received $75,000 as retainer in
connection with the prior engagement. In the 90 days prior to the
Petition Date, A&M received additional retainers and payments
totaling approximately $1,135,948 in the aggregate for services
performed for the Debtors.
A hearing on the motion will be held on Oct. 7, 2013, at 9AM (ET).
Objections are due Sept. 27.
Daniel J. DeFranceschi, Esq., Paul N. Heath, Esq., Zachary I.
Shapiro, Esq., and Marisa A. Terranova, Esq., at RICHARDS, LAYTON
& FINGER, P.A., in Wilmington, Delaware; Richard M. Cieri, Esq.,
Paul M. Basta, P.C., Esq., and Ray C. Schrock, P.C., Esq., at
KIRKLAND & ELLIS LLP, in New York; and Ryan Preston Dahl, Esq., at
KIRKLAND & ELLIS LLP, in Chicago, Illinois, represent the Debtor.
Longview Power, LLC, filed a Chapter 11 (Bank. D. Del. Lead Case.
13-12211) on Aug. 30, 2013. The petitions were signed by Jeffery
L. Keffer, the Company's chief executive officer, president,
treasurer and secretary. The Debtor estimated assets and debts of
more than $1 billion. Judge Brendan Linehan Shannon presides over
the case. Kirkland & Ellis LLP and Richards, Layton & Finger,
P.A., serve as the Debtors' counsel. Lazard Freres & Company LLC
acts as the Debtors' investment bankers. Alvarez & Marsal North
America, LLC, is the Debtors' restructuring advisors. Ernst &
Young serves as the Debtors' accountants. The Debtors' claims
agent is Donlin, Recano & Co. Inc.
LONGVIEW POWER: Case Dominated by Arbitration Dispute
-----------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the reorganization of Longview Power LLC will turn on
whether any of the contractors for the 700-megawatt coal-fired
power plant in Maidsville, West Virginia, are responsible for what
the company called "design, construction and equipment defects" in
the plant that began operations in December 2011.
According to contractor Kvaerner North America Construction Inc.,
Longview filed for Chapter 11 protection on Aug. 30 to block an
arbitration panel from ruling on whether there could be a draw on
a $59 million letter of credit originally posted by Foster Wheeler
North America Corp.
According to the report, when Longview got interim approval to use
so-called cash collateral, the bankruptcy judge in Delaware barred
a draw on the letter of credit. Instead, he established a
procedure culminating in an Oct. 7 hearing to decide whether the
arbitration should proceed. The Oct. 7 hearing will also address
the conditions for continued use of cash and a draw on the letter
of credit.
The report notes that last week, the U.S. unit of Fornebu, Norway-
based Kvaerner ASA laid out its argument why the arbitration
should go ahead and Longview shouldn't touch the letter of credit
or proceeds. Longview and the creditors' committee are to file
their papers on Sept. 27. Kvaerner will reply Oct. 2. Kvaerner
said the bankruptcy petition was an exercise in forum-shopping to
stop the arbitration panel from issuing an unfavorable ruling.
The report relates that the Norwegian contractor on Oct. 7 will
request authority to continue the arbitration already progressing
for more than two years. It said in a court filing that the
"staggering cost overruns and delays" were the result of
deficiencies in the boiler made by a U.S. unit of Geneva-based
Foster Wheeler AG.
The report relays that Kvaerner contended that the bankruptcy
court lacks the power to issue final rulings on state-laws claims
at the heart of the arbitration. It also argued that federal law
favors allowing arbitration to proceed. Along with Longview,
affiliate Mepco Holdings LLC is in bankruptcy. Where Longview
owns the plant, Mepco owns four coal mines in West Virginia.
About Longview Power
Longview Power LLC is a special purpose entity created to
construct, own, and operate a 695 MW supercritical pulverized
coal-fired power plant located in Maidsville, West Virginia, just
south of the Pennsylvania border and approximately 70 miles south
of Pittsburgh. The project is owned 92% by First Reserve
Corporation (First Reserve or sponsor), a private equity firm
specializing in energy industry investments, through its affiliate
GenPower Holdings (Delaware), L.P., and 8% by minority interests.
The company has engaged Lazard Ltd as its investment banker and
Alvarez & Marsal North America LLC as its restructuring advisor.
Longview is represented by Kirkland & Ellis LLP, as primary
restructuring counsel, and Dentons US LLP for all issues related
to company's pending arbitration proceedings.
MARKET CENTER: Lodestar Factors Always Required on Fee Apps
-----------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the U.S. Court of Appeals in Denver reversed a U.S.
Bankruptcy Appellate Panel ruling that a bankruptcy judge can't
enhance a fee using a pre-bankruptcy contingency agreement as a
guide and is limited to the Johnson lodestar approach.
According to the report, the case involved a lawyer who was hired
before bankruptcy to sue for breach of contract to buy commercial
real estate. The original fee arrangement was for $200 an hour
plus 15 percent of a settlement estimated to be about $200,000.
By fault of the bankrupt, the order approving the lawyer's
retention was never signed by the judge. Ultimately, the property
was sold for almost $10 million. The lawyer filed a fee
application seeking about $1.5 million, based on a 15 percent
contingency.
The report notes that the bankruptcy judge allowed a $350,000 fee
based largely on a $2.25 million increase in the sale price
resulting from litigation brought by the lawyer. Although the
lawyer didn't appeal, the company did, believing the fee should be
$28,000. The appellate panel in Denver upheld the bankruptcy
judge last year, saying the judge had discretion to award a fee
based on factors other than hourly rates, also known as the
Johnson or lodestar method.
The report relates that writing for the appeals court in Denver,
Chief U.S. Circuit Judge Mary B. Briscoe reversed, ruling that the
bankruptcy court was "obligated to consider the Section 330(a)(3)
and relevant Johnson factors -- and only those factors."
The report discloses that Judge Briscoe said the bankruptcy court
couldn't award a fee based on a contingency agreement because it
was never approved by the court under Section 328. She remanded
the case to the bankruptcy court for a recalculation of the fee.
The case in the circuit court is Market Center Retail Property
Inc. v. Lurie (In re Market Center Retail Property Inc.), 12-3053,
U.S. Court of Appeals for the 10th Circuit (Denver). The case in
the appellate panel was Market Center Retail Property Inc. v.
Lurie (In re Market Center Retail Property Inc.), 11-017, U.S.
Bankruptcy Appellate Panel for the 10th Circuit (Denver).
About Market Center
Market Center East Retail Property, Inc., sought Chapter 11
bankruptcy (Bankr. D. N.M. Case No. 09-11696) on April 22,
2009, as a single asset real estate debtor. At the time of the
filing, the Debtor estimated its assets and debts at less than
$10 million. The Debtor filed a Chapter 11 Plan in June 2009, and
filed an Amended Chapter 11 Plan in August 2009.
MERCANTILE BANCORP: Defends Bid to Sell Bank Shares, Trademark
--------------------------------------------------------------
Mercantile Bancorp, Inc. responded to the objection lodged by the
Official Committee of Trust Preferred Securities Holders to the
Debtor's motion to sell all of its shares in Mercantile Bank and
the related trademark for Mercantile Bank's "M" logo, as well as
the joinder filed by Wilmington Trust to the objection.
The Debtor related that, among other things, the objection must be
overruled and the sale of the assets must be approved because the
Debtor's sale of all of the shares of the capital stock of
Mercantile Bank and the "M" trademark is a reasonable exercise of
business judgment.
The Debtor is seeking approval of a $23 million asset sale to
United Community Bancorp Inc.
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 TruPS 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.
MF GLOBAL: Executives Denied $10 Million Defense Costs for Now
--------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that whether MF Global Holdings Ltd. officers and
directors can have an additional $10 million to pay defense costs
is a question the bankruptcy judge won't answer for some weeks.
According to the report, in May, before the parent holding
company's Chapter 11 plan was implemented, former MF Global
executives sought court permission to drawn down an additional
$10 million from insurance to cover defense costs in lawsuits
accusing them of contributing to the company's bankruptcy in
October 2011. The bankruptcy judge previously gave them the right
to spend as much as $30 million in what he called a soft cap on
defense costs.
The report notes that several creditors objected to the prior
grant of defense costs, arguing that insurance proceeds should go
exclusively to creditors. The creditors lost in bankruptcy court
and federal district court. The case is set for argument before
the U.S. Court of Appeals in late November.
The report relates that in a terse order on Sept. 20, U.S.
Bankruptcy Judge Martin Glenn said allowing the additional
$10 million should await resolution of the appeal. He's allowing
the executives to return to court to seek the additional defense
costs. How unsecured creditors fare depends in no small part on
the outcome of lawsuits against officers and directors.
About MF Global
New York-based MF Global -- http://www.mfglobal.com/-- was one of
the world's leading brokers of commodities and listed derivatives.
MF Global provides access to more than 70 exchanges around the
world. The firm also was one of 22 primary dealers authorized to
trade U.S. government securities with the Federal Reserve Bank of
New York. MF Global's roots go back nearly 230 years to a sugar
brokerage on the banks of the Thames River in London.
On Oct. 31, 2011, MF Global Holdings Ltd. and MF Global Finance
USA Inc. filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y.
Case Nos. 11-15059 and 11-5058), after a planned sale to
Interactive Brokers Group collapsed. As of Sept. 30, 2011, MF
Global had $41,046,594,000 in total assets and $39,683,915,000 in
total liabilities.
On Nov. 7, 2011, the United States Trustee appointed the statutory
creditors' committee in the Debtors' cases. At the behest of the
Statutory Creditor's Committee, the Court directed the U.S.
Trustee to appoint a chapter 11 trustee. On Nov. 28, 2011, the
Bankruptcy Court entered an order approving the appointment of
Louis J. Freeh, Esq., of Freeh Group International Solutions, LLC,
as Chapter 11 trustee.
On Dec. 19, 2011, MF Global Capital LLC, MF Global Market Services
LLC and MF Global FX Clear LLC filed voluntary Chapter 11
petitions (Bankr. S.D.N.Y. Case Nos. 11-15808, 11-15809 and
11-15810). On Dec. 27, the Court entered an order installing Mr.
Freeh as Chapter 11 Trustee of the New Debtors.
On March 2, 2012, MF Global Holdings USA Inc. filed a voluntary
Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-10863), and Mr.
Freeh also was installed as its Chapter 11 Trustee.
Judge Honorable Martin Glenn presides over the Chapter 11 case.
J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric
Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve
as bankruptcy counsel. The Garden City Group, Inc., serves as
claims and noticing agent. The petition was signed by Bradley I.
Abelow, Executive Vice President and Chief Executive Officer of MF
Global Finance USA Inc.
The Chapter 11 Trustee has tapped (i) Freeh Sporkin & Sullivan
LLP, as investigative counsel; (ii) FTI Consulting Inc., as
restructuring advisors; (iii) Morrison & Foerster LLP, as
bankruptcy counsel; and (iv) Pepper Hamilton as special counsel.
The Official Committee of Unsecured Creditors has retained
Capstone Advisory Group LLC as financial advisor, while lawyers at
Proskauer Rose LLP serve as counsel.
The Securities Investor Protection Corporation commenced
liquidation proceedings against MF Global Inc. to protect
customers. James W. Giddens was appointed as trustee pursuant to
the Securities Investor Protection Act. He is a partner at Hughes
Hubbard & Reed LLP in New York.
Jon Corzine, the former New Jersey governor and co-CEO of
Goldman Sachs Group Inc., stepped down as chairman and chief
executive officer of MF Global just days after the bankruptcy
filing.
In April 2013, the Bankruptcy Court approved MF Global Holdings'
plan to liquidate its assets. Bloomberg News reported that the
court-approved disclosure statement initially told
creditors with $1.134 billion in unsecured claims against the
parent holding company why they could expect a recovery of 13.4%
to 39.1% from the plan. As a consequence of a settlement with
JPMorgan, supplemental materials informed unsecured creditors
their recovery was reduced to the range of 11.4% to 34.4%. Bank
lenders will have the same recovery on their $1.174 billion claim
against the holding company. As a consequence of the settlement,
the predicted recovery became 18% to 41.5% for holders of $1.19
billion in unsecured claims against the finance subsidiary,
one of the companies under the umbrella of the holding company
trustee. Previously, the predicted recovery was 14.7% to 34% on
bank lenders' claims against the finance subsidiary.
MI PUEBLO: Wells Defers Request for Add'l Adequate Protection Lien
------------------------------------------------------------------
Wells Fargo Bank, N.A., informs the U.S. Bankruptcy Court for the
Northern District of California that in light of Mi Pueblo San
Jose, Inc.'s recent retention of Avant Advisory Group as financial
advisor, and because of its expectation that the Debtor, with the
assistance of Avant, will now be providing the Bank with more
substantial additional and updated financial reports and related
information than previously provided to it, the Bank is, for the
time being, holding in abeyance its request for the granting of an
additional adequate protection lien in the Debtor's certificated
vehicles for the continued use by the Debtor of the Bank's cash
collateral.
A further interim hearing on the use of cash collateral is slated
for Oct. 2, 2013, at 10:30 a.m.
As reported in the TCR on Sept. 17, 2013, the Bankruptcy Court
approved the Debtor's motion to use cash collateral for the period
from Aug. 26, 2013, through and including Oct. 6, 2013.
About Mi Pueblo San Jose, Inc.
Mi Pueblo San Jose, Inc., filed a Chapter 11 petition (Bankr. N.D.
Calif. Case No. 13-53893) in San Jose, California, on July 22,
2013. The Debtor estimated up to $50,000 in assets and up
$50,000,000 in liabilities. An affiliate, Cha Cha Enterprises,
LLC, sought Chapter 11 protection (Case No. 13-53894) on the same
day.
Heinz Binder, Esq., at Binder & Malter, LLP, is the Debtor's
general reorganization counsel. The Law Offices of Wm. Thomas
Lewis, sometimes doing business as Robertson & Lewis, is the
Debtor's special counsel. Avant Advisory Partners, LLC serves as
its financial advisors.
The U.S. Trustee appointed seven members to the Official Committee
of Unsecured Creditors. Protiviti Inc. serves as financial
advisor. Stutman, Treister & Glatt P.C. serves as counsel to the
Committee.
MITCHELL INTERNATIONAL: Moody's Assigns 'B3' CFR; Outlook Stable
----------------------------------------------------------------
Moody's Investors Service assigned new ratings to automotive-
damage-claims processor Mitchell International, Inc., including B3
Corporate Family Rating, B3-PD Probability of Default Rating, B1
to the proposed $540 million first lien credit facility, and Caa2
to the proposed $245 million second lien term loan. Proceeds from
the debt, along with approximately $450 million in equity, will be
used to finance the $1.13 billion acquisition of Mitchell by
Kohlberg Kravis Roberts & Co. The outlook is stable.
Ratings Rationale:
"The B3 CFR takes into account the releveraging of Mitchell to
about 9.0x (including Moody's standard adjustments), after the
company had been steadily deleveraging over the past several
years, to as low as 4.6x as of June 2013," noted Kevin Stuebe,
Senior Analyst at Moody's Investors Service. Although Mitchell has
a relatively small, approximately $360 million revenue base, it
maintains leading positions in the U.S. auto physical claims (APD)
and casualty solutions markets. Customer contracts, along with
data and software that are embedded in client processes, provide
recurring and predictable revenue and cash flows.
Moody's expects the company to continue its solid growth trend in
revenues, although not at past rates, which have averaged better
than a 12% CAGR over the last five years. Importantly, this growth
has been complemented by steady, approximately 250 basis-point
growth in Mitchell's operating margins over the same period.
Simultaneously, the company has diversified its product offering
to being nearly evenly split between the auto-casualty and
workers'-comp medical-bill-review space, its faster-growing
segment, and the APD valuation and claims-processing segment,
Mitchell's traditional core.
The expectations of ongoing revenue growth and some margin
improvement lead us to anticipate steady deleveraging, although at
a slower rate than in the recent past. Moody's expects leverage to
moderate to below 8.5x by the end of 2014, and at least a full
turn lower a year later.
Moody's stable outlook anticipates mid-single-digit revenue growth
and moderately improving margins over the next twelve to 18
months, as well as meaningful deleveraging to maintain the B3 CFR.
The ratings could be upgraded with more robust improvement in the
company's top line and leverage metrics. Conversely, the ratings
could be downgraded if lower than expected top-line growth or any
deterioration in margins hampers cash flow such that Mitchell is
unable to deleverage steadily as anticipated.
Ratings (and Loss Given Default Assessments) assigned:
Issuer: Mitchell International, Inc.
Corporate Family Rating, B3
Probability of Default Rating, B3-PD
Proposed revolving credit facility due 2018 B1 (LGD3, 32%)
Proposed 1st lien term loan due 2020 B1 (LGD3, 32%)
Proposed Second lien term loan due 2021 Caa2 (LGD5, 85%)
Outlook: Stable
Mitchell International is a leading provider of data, software,
and services to support the estimating, adjudication, and
processing of auto physical damage, auto bodily injury claims, and
workers' compensation claims. Anticipated revenues in 2013 are
approximately $360 million. The company was sold, in late 2013, to
private equity sponsor KKR.
The principal methodology used in this rating was Global Business
& Consumer Service Industry Rating Methodology published in
October 2010. Other methodologies used include Loss Given Default
for Speculative-Grade Non-Financial Companies in the U.S., Canada
and EMEA published in June 2009.
MONTANA ELECTRIC: 4 Remaining Members Sue to Invalidate Contracts
-----------------------------------------------------------------
Richard Ecke, writing for Great Falls Tribune, reports that the
four remaining co-ops of the Southern Montana Electric Generation
and Transmission Cooperative this week sued Lee A. Freeman, the
trustee for the co-op, seeking a declaratory judgment to get their
wholesale power contracts invalidated. The four remaining members
are Beartooth Electric, Mid Yellowstone, Fergus Electric and
Tongue River Electric.
The report notes two of the co-op's six members, Yellowstone
Valley Electric and the city of Great Falls, reached settlement
agreements with Freeman to leave Southern Montana. Yellowstone
Valley is already gone; the city of Great Falls still owes a
$750,000 payment, and needs to find a new power supplier this
fall, before it completely severs ties with Southern Montana.
According to the report, the complaint filed by the four co-ops
appeared to further muddy the future of the co-op, which would
exist mainly to pay off the bulk of an $85 million loan used to
build a natural gas-fired power plant east of Great Falls.
According to the report, Mr. Freeman has proposed reorganizing
Southern Montana, with voting on Mr. Freeman's plan expected to
take place as soon as this fall. Mr. Freeman proposed a 12-year
plan to continue the co-op. Amended disclosure statement
documents filed Monday said Mr. Freeman's plan would save co-op
members $100 million Southern Montana would have had to pay
through 2019 to PPL EnergyPlus, which had been providing power to
Southern Montana until Freeman canceled the contract. Those
savings will enable the remaining members to pay off the bulk of
$85 million in loans used to build a power plant east of Great
Falls, the plan said.
The report relates, however, that some parties in interest object
to the Plan and want the co-op liquidated. Unsecured creditors
represented by attorney Harold V. Dye of Missoula in a filing last
week contended Mr. Freeman's "plan is designed to benefit only the
trustee, estate professionals and the noteholders (Prudential
financial and Modern Woodmen) and that all other classes would be
better off rejecting the plan." Many unsecured creditors, who
filed $392.5 million in claims, would receive less than one-half
cent on the dollar in compensation, or nothing at all, under the
plan, Mr. Dye wrote.
About Southern Montana Electric
Based in Billings, Montana, Southern Montana Electric Generation
and Transmission Cooperative, Inc., was formed to serve five
other electric cooperatives. The city of Great Falls later joined
as the sixth member. Including the city, the co-op serves a
population of 122,000. In addition to Great Falls, the service
area includes suburbs of Billings, Montana.
Southern Montana filed for Chapter 11 bankruptcy (Bankr. D.
Mont. Case No. 11-62031) on Oct. 21, 2011. Southern Montana
estimated assets of $100 million to $500 million and estimated
debts of $100 million to $500 million. Timothy Gregori signed the
petition as general manager.
Malcolm H. Goodrich, Esq., at Goodrich Law Firm, P.C., in
Billings, Montana, serves as the Debtor's counsel.
After filing for reorganization in October, the co-op agreed to a
request for appointment of a Chapter 11 trustee. Lee A. Freeman
was appointed as the Chapter 11 trustee in December 2011. He is
represented by Joseph V. Womack, Esq., at Waller & Womack, and
John Cardinal Parks, Esq., Bart B. Burnett, Esq., Robert M.
Horowitz, Esq., and Kevin S. Neiman, Esq., at Horowitz & Burnett,
P.C.
Harold V. Dye, Esq., at Dye & Moe, P.L.L.P., in Missoula, Montana,
represents the Unsecured Creditors' Committee as counsel.
MORGANS HOTEL: 40 North Management Held 5.4% Stake at Sept. 11
--------------------------------------------------------------
In a Schedule 13D filed with the U.S. Securities and Exchange
Commission, 40 North Management LLC and its affiliates disclosed
that as of Sept. 11, 2013, they beneficially owned 1,754,272
shares of common stock of Morgans Hotel Group Co. representing
5.38 percent of the shares outstanding. A copy of the regulatory
filing is available for free at http://is.gd/A7qsvS
About Morgans Hotel Group
Based in New York, Morgans Hotel Group Co. (Nasdaq: MHGC) --
http://www.morganshotelgroup.com/-- is widely credited as the
creator of the first "boutique" hotel and a continuing leader of
the hotel industry's boutique sector. Morgans Hotel Group
operates and owns, or has an ownership interest in, Morgans,
Royalton and Hudson in New York, Delano and Shore Club in South
Beach, Mondrian in Los Angeles and South Beach, Clift in San
Francisco, Ames in Boston, and Sanderson and St Martins Lane in
London. Morgans Hotel Group and an equity partner also own the
Hard Rock Hotel & Casino in Las Vegas and related assets. Morgans
Hotel Group also manages hotels in Isla Verde, Puerto Rico and
Playa del Carmen, Mexico. Morgans Hotel Group has other property
transactions in various stages of completion, including projects
in SoHo, New York and Palm Springs, California.
The Company incurred a net loss attributable to common
stockholders of $66.81 million in 2012, a net loss attributable to
common stockholders of $95.34 million in 2011, and a net loss
attributable to common stockholders of $89.96 million in 2010.
The Company's balance sheet at June 30, 2013, showed $580.67
million in total assets, $744.32 million in total liabilities,
$6.04 million in redeemable noncontrolling interest and a
$169.70 million total stockholders' deficit.
MPG OFFICE: BPO Further Extends Tender Offer Until Sept. 30
-----------------------------------------------------------
Brookfield Office Properties Inc. announced that DTLA Fund Holding
Co. and Brookfield DTLA Fund Properties Holding Inc., both direct
wholly owned subsidiaries of the DTLA Fund, are extending their
previously announced cash tender offer to purchase all outstanding
shares of preferred stock of MPG Office Trust, Inc., until 12:00
midnight, New York City time, at the end of Monday, Sept. 30,
2013.
BPO previously announced its intention to acquire MPG pursuant to
a merger agreement, dated as of April 24, 2013, by and among
Brookfield DTLA Holdings LLC, a newly formed fund controlled by
BPO (the DTLA Fund), Brookfield DTLA Fund Office Trust Investor
Inc., Brookfield DTLA Fund Office Trust Inc., Brookfield DTLA Fund
Properties LLC, MPG and MPG Office, L.P. Upon the closing of the
tender offer, preferred stockholders of MPG will receive $25.00 in
cash for each share of MPG preferred stock validly tendered and
not validly withdrawn in the offer, without interest and less any
required withholding taxes. Shares of MPG preferred stock that
are tendered and accepted for payment in the tender offer will not
receive any accrued and unpaid dividends on those shares.
The tender offer had been previously set to expire at 12:00
midnight, New York City time, at the end of Monday, Sept. 23,
2013. Except for the extension of the expiration date, all other
terms and conditions of the tender offer remain unchanged.
The Depositary and Paying Agent for the tender offer is American
Stock Transfer & Trust Company, LLC, 6201 15th Avenue, Brooklyn,
New York 11219. The Information Agent for the tender offer is
MacKenzie Partners, Inc., 105 Madison Avenue, New York, New York
10016. The tender offer materials may be obtained at no charge by
directing a request by mail to MacKenzie Partners, Inc. or by
calling (800) 322-2885. Fried, Frank, Harris, Shriver & Jacobson
LLP is acting as legal advisor to BPO.
Based on information received from the Depositary, as of Sept. 20,
2013, approximately 85,141 shares of MPG preferred stock had been
tendered and not withdrawn from the offer. Stockholders who have
already tendered their shares do not have to re-tender their
shares or take any other action as a result of the extension of
the expiration date.
About MPG Office Trust
MPG Office Trust, Inc., fka Maguire Properties Inc. --
http://www.mpgoffice.com/-- owns and operates Class A office
properties in the Los Angeles central business district and is
primarily focused on owning and operating high-quality office
properties in the Southern California market. MPG Office Trust is
a full-service real estate company with substantial in-house
expertise and resources in property management, marketing,
leasing, acquisitions, development and financing.
For the year ended Dec. 31, 2012, the Company reported net income
of $396.11 million, as compared with net income of $98.22 million
on $234.96 million of total revenue during the prior year. As of
June 30, 2013, the Company had $1.28 billion in total assets,
$1.71 billion in total liabilities and a $437.26 million
total deficit.
In its Form 10-K filing with the Securities and Exchange
Commission for the fiscal year ended Dec. 31, 2012, the Company
said it is working to address challenges to its liquidity
position, particularly debt maturities, leasing costs and capital
expenditures. The Company said, "We do not currently have
committed sources of cash adequate to fund all of our potential
needs, including our 2013 debt maturities. If we are unable to
raise additional capital or sell assets, we may face challenges in
repaying, extending or refinancing our existing debt on favorable
terms or at all, and we may be forced to give back assets to the
relevant mortgage lenders. While we believe that access to future
sources of significant cash will be challenging, we believe that
we will have access to some of the liquidity sources identified
above and that those sources will be sufficient to meet our near-
term liquidity needs."
On March 11, 2013, the Company entered into an agreement to sell
US Bank Tower and the Westlawn off-site parking garage. The
transaction is expected to close June 28, 2013, subject to
customary closing conditions. The net proceeds from the
transaction are expected to be roughly $103 million, a portion of
which may potentially be used to make loan re-balancing payments
on the Company's upcoming 2013 debt maturities at KPMG Tower and
777 Tower.
Roughly $898 million of the company's debt matures in 2013.
"Our ability to access the capital markets to raise capital is
highly uncertain. Our substantial indebtedness may prevent us
from being able to raise debt financing on acceptable terms or at
all. We believe we are unlikely to be able to raise equity
capital in the capital markets," the Company said.
"Future sources of significant cash are essential to our liquidity
and financial position, and if we are unable to generate adequate
cash from these sources we will have liquidity-related problems
and will be exposed to material risks. In addition, our inability
to secure adequate sources of liquidity could lead to our eventual
insolvency," the Company added.
MSI CORPORATION: No Unsecured Creditors Committee Appointed
-----------------------------------------------------------
Roberta A. DeAngelis, United States Trustee for Region 3, notified
John J. Horner, Clerk of the United States Bankruptcy Court for
the Western District of Pennsylvania, that as of
September 10, 2013, a Committee of Unsecured Creditors has not
been appointed in MSI Corporation's Chapter 11 case.
Ms. DeAngelis said no unsecured creditors responded to U.S.
Trustee's communication/contact for service on the committee.
The notice was signed by:
Kathleen Robb
Trial Attorney
Kathleen.Robb@usdoj.gov
About MSI Corp.
MSI Corporation filed a bare-bones Chapter 11 petition (Bankr.
W.D. Pa. Case No. 13-22457) in Pittsburgh on June 7, 2013. Judge
Jeffery A. Deller presides over the case. The Vandergrift,
Pennsylvania-based company estimated at least $10 million in
assets and less than $10 million in liabilities.
Albert's Capital Services, LLC, is the Debtor's chief
restructuring officer. Michael J. Roeschenthaler, Esq., and Scott
E. Schuster, Esq., at McGuireWoods LLP, in Pittsburgh, serve as
the Debtor's counsel. Geary & Loperfito, LLC serves as special
counsel.
MUELLER WATER: Moody's Hikes CFR to B2; Outlook Stable
------------------------------------------------------
Moody's Investors Service upgraded the ratings of Mueller Water
Products, Inc. including its Corporate Family Rating to B2 from
B3, Probability of Default Rating to B2-PD from B3-PD, $180
million 8.75% Senior Unsecured Notes, due 2020, to B1 from B2 and
$420 million 7.375% Senior Subordinated Notes, due 2017, to Caa1
from Caa2. In addition, Moody's affirmed the Speculative-Grade
Liquidity (SGL) Rating at SGL-2. The ratings outlook was changed
to stable from positive.
The upgrade of the Corporate Family Rating to B2 from B3 reflects
expected continued improvement in financial performance. Notably,
Moody's projects Mueller's debt to EBITDA to decline below 4.5x
and interest coverage (EBITA/interest expense) increase to above
3x by the end of 2014.
The following rating actions were taken:
Corporate Family Rating, upgraded to B2 from B3;
Probability of Default Rating, upgraded to B2-PD from B3-PD;
$180 million 8.75% Senior Unsecured Notes, due 2020, upgraded to
B1 (LGD3, 33%) from B2 (LGD3, 38%);
$420 million 7.375% Senior Subordinated Notes, due 2017,
upgraded to Caa1 (LGD5, 79%) from Caa2 (LGD5, 81%);
Speculative-Grade Liquidity Rating, affirmed at SGL-2;
Outlook changed to stable from positive.
Ratings Rationale:
The B2 CFR considers Mueller's exposure to the volatile municipal
spending environment, commercial construction, and residential
construction as economic uncertainty persists. Mueller derives
about 55% of revenues from municipal spending, 30% from new non-
residential construction, 10% from oil & gas, and 5% from new
residential construction. Municipal spending has recently
improved, however, budget pressures and competition for municipal
funds remain. Lately, the new home construction market has shown
progress, albeit choppy, as well. This relieves local governments'
budget pressures as property taxes and other fees associated with
residential construction increase. Commercial construction is also
improving but at a slower rate than residential construction,
thus, residential construction is expected to represent a larger
share of the company's revenue distribution.
At the same time, the B2 rating reflects Moody's expectation that
Mueller's credit metrics will continue to improve in 2014 as its
end markets are slowly recovering. In addition, the ratings also
acknowledge the company's strong market position, its substantial
installed base of diverse products that can lead to a high
percentage of recurring revenues, and the growing and inevitable
need to eventually repair and/or replace aging water
infrastructure systems and also maintain compliance with EPA
regulations. Furthermore, Mueller's asset-based revolving credit
facility (ABL), its ability to generate positive free cash flow,
and the absence of near-term debt maturities strengthen the
company's liquidity position.
The stable outlook reflects the expected improvement in credit
metrics and end markets.
The ratings could be upgraded if adjusted debt to EBITDA declines
below 3.75x on a sustained basis and adjusted EBITA to interest
expense increases above 3x on a sustained basis. Also, solid
liquidity position and improving conditions in the company's end
markets are considered in ratings upgrade.
The ratings could be lowered if adjusted debt to EBITDA increases
above 4.75x on a sustained basis, EBITA to interest expense
declines below 2x. Furthermore, the ratings could be downgraded if
the company's liquidity position deteriorates or if end-market
conditions weaken.
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.
Headquartered in Atlanta, Georgia, Mueller Water Products, Inc. is
a North American manufacturer and supplier of water infrastructure
and flow control products for use in water distribution networks,
water and wastewater treatment facilities, and gas distribution
and piping systems. Revenues and net income for the trailing 12
months ended June 30, 2013 were $1.1 billion and $31 million,
respectively.
NIELSEN COMPANY: $500MM Senior Notes Issue Gets Moody's B2 Rating
-----------------------------------------------------------------
Moody's Investors Service assigned B2 to the proposed $500 million
Senior Notes being issued by The Nielsen Company (Luxembourg)
S.a.r.l., an indirect subsidiary of Nielsen Holdings N.V., to
refinance the existing 11.625% senior notes due 2014 and general
corporate purposes. Moody's also affirmed Nielsen Holdings N.V.'s
Ba3 Corporate Family Ratings, Ba3-PD Probability of Default
Rating, and other debt instrument ratings. In addition, Moody's
changed the Speculative Grade Liquidity Rating (SGL) to SGL -- 1
from SGL -- 3 reflecting improved liquidity as a result of the
proposed issuance. The rating outlook remains positive.
Assigned:
Issuer: The Nielsen Company (Luxembourg) S.a.r.l., an indirect
subsidiary of Nielsen Holdings N.V.
$500 million Senior Unsecured Notes: Assigned B2, LGD5 -- 83%
Upgraded:
Issuer: Nielsen Holdings N.V.
Speculative Grade Liquidity Rating: Upgraded to SGL-1 from SGL-3
Affirmed:
Issuer: Nielsen Holdings N.V.
Corporate Family Rating: Affirmed Ba3
Probability of Default Rating: Affirmed Ba3-PD
Issuer: Nielsen Finance LLC
Senior Secured Bank Credit Facility (Revolver) due Apr 1, 2016:
Affirmed Ba2, LGD2 -- 29% (from LGD3 -- 31%)
Senior Secured Bank Credit Facility (Class D Term Loan) due Feb 2,
2017 ($1,146 million outstanding): Affirmed Ba2, LGD2 -- 29% (from
LGD3 -- 31%)
Senior Secured Bank Credit Facility (Class E Term Loan) due May 1,
2016 ($2,520 million outstanding): Affirmed Ba2, LGD2 -- 29% (from
LGD3 -- 31%)
Senior Secured Bank Credit Facility (Class E Euro Term Loan) due
May 1, 2016 ($375 million outstanding): Affirmed Ba2, LGD2 -- 29%
(from LGD3 -- 31%)
7.75% Senior Unsecured Regular Bond/Debenture due Oct 15, 2018
($1,080 million outstanding): Affirmed B2, LGD5 -- 83% (from LGD5
-- 85%)
4.5% Senior Unsecured Regular Bond/Debenture due Oct 1, 2020 ($800
million outstanding): Affirmed B2, LGD5 -- 83% (from LGD5 -- 85%)
Outlook Actions:
Issuer: Nielsen Holdings N.V.
Outlook is Positive
Issuer: Nielsen Finance LLC
Outlook is Positive
Issuer: The Nielsen Company (Luxembourg) S.a.r.l. , an indirect
subsidiary of Nielsen Holdings N.V.
Outlook is Positive
Affirmed but to be withdrawn upon redemption or completion of the
tender:
Issuer: Nielsen Finance LLC
11.625% Senior Unsecured Regular Bond/Debenture due Feb 1, 2014
(roughly $215 million outstanding): Affirmed B2, LGD5 -- 83% (from
LGD5 -- 85%)
Ratings Rationale:
Nielsen's Ba3 CFR reflects Moody's view that the company will
maintain its leading international positions in the measurement
and analysis of consumer purchasing behavior as well as media and
marketing information given protection from high entry barriers.
Revenue is supported by long-standing contractual relationships
with consumer product companies, media and advertisers, and
benefits from the company's status as a source of independent
benchmark information. Moody's expects the company can build on
its track record to deliver continued low-to-mid single digit
percentage revenue growth while leveraging its improved cost base
to generate increasing EBITDA. Ratings incorporate the currently
more challenging operating environment in Nielsen's `Buy' division
as well as exposure, particularly in the `Watch' division, to a
technologically driven environment and a more competitive
landscape in rapidly growing markets (e.g. online).
Moody's expects Nielsen will utilize a portion of free cash flow
to further reduce debt balances; however, ratings also reflect the
company's moderately high leverage and likely increases in
dividend payouts as earnings grow. The tendency of the consortium
of private equity investors, who hold six of the 11 board seats,
to utilize debt and cash flow to fund shareholder distributions
creates event risk. Furthermore, Nielsen's recent increase in the
quarterly dividend to 20 cents per share ($300 million annual
payout) and $500 million share repurchase program will consume
cash that could otherwise be used to reduce debt or for
acquisitions. Notwithstanding the increased quarterly dividend and
share repurchases, Moody's expects low to mid-single digit
percentage revenue growth, modest margin expansion, and debt
repayments will lower the company's debt-to-EBITDA leverage to the
low 4x range over the next 18 months, from roughly 4.6x at the end
of June 2013 (pro forma for the acquisition of Arbitron and sale
of Expositions). Additionally, Moody's believes share repurchases
will be funded over a few years while maintaining financial
metrics within the Ba3 rating as management indicates the
repurchase program is intended to minimize dilution from stock
compensation. Moody's notes that risks related to the exit from
this investment by financial sponsors is reduced given financial
sponsors now hold a 41% interest the company, compared to 52%
earlier this year. The share redemptions were funded through
secondary equity issuances in May 2013 and did not increase
leverage. Moody's expects additional sell down by the financial
sponsors over the next 12 to 18 months.
The upgrade of the liquidity rating to SGL-1 reflects strong
liquidity given net proceeds from the proposed $500 million debt
commitment will add to current cash balances providing more funds
to finance the acquisition of Arbitron expected later this year.
The issuer of the new debt is The Nielsen Company (Luxembourg)
S.a.r.l. and these notes are pari passu with the existing
unsecured debt instruments issued by Nielsen Finance LLC. A
portion of proceeds from the proposed notes will be used to take
out the 11.625% notes due 2014 ($212 million outstanding) thereby
pushing the nearest significant maturity to 2016.
The positive rating outlook reflects Moody's expectation that
Nielsen will deliver operating results broadly in line with its
2013 guidance (4-5% revenue growth and 40-60 basis points EBITDA
margin improvement) and that shareholder distributions and
acquisitions are managed such that the company remains on a
deleveraging trajectory. Moody's assumes in the rating outlook
that the U.S. and global economies continue to expand modestly.
Downward rating pressure could occur if debt-to-EBITDA leverage
were to exceed 5.0x or free cash flow generation weakens through
deterioration in operating performance, significant acquisitions,
or shareholder distributions. The ratings could be downgraded or
the outlook changed to stable if Nielsen adopts more aggressive
financial policies including a move away from its intention to
continue de-leveraging and stated goal of achieving an investment-
grade credit profile. A deterioration of liquidity could also
create downward rating pressure. An upgrade would require steady
and growing earnings performance paired with de-leveraging such
that debt-to-EBITDA is moving towards 4.0x and free cash flow
generation is meaningful on a sustained basis. Moody's would need
to be comfortable that Nielsen has the willingness and capacity to
manage to these tighter credit metrics after incorporating
potential future transactions such as the eventual exit of its
private equity holders. Nielsen would also need to maintain a good
liquidity position including an expectation by Moody's that
significant maturities from 2016-2018 can be managed within free
cash flow generation and likely refinancing actions.
The principal methodology used in this rating was the Global
Business & Consumer Service Industry Rating Methodology published
in October 2010. Other methodologies used include Loss Given
Default for Speculative-Grade Non-Financial Companies in the U.S.,
Canada and EMEA published in June 2009.
Nielsen Holdings N.V., headquartered in Diemen, The Netherlands
and New York, NY, is a global provider of consumer information and
measurement that operates in approximately 100 countries.
Nielsen's Buy segment (61% of FY 2012 revenue) consists of two
operating units: (i) Information, which includes retail
measurement and consumer panel services; and (ii) Insights, which
provide analytical services for clients. The Watch segment (36% of
revenue) provides viewership data and analytics across television,
online and mobile devices for the media and advertising
industries. Nielsen's proposed $1.3 billion acquisition of
Arbitron announced in December 2012 remains pending. Revenue for
the 12 months ended June 2013 was roughly $6 billion excluding
Expositions and including Arbitron.
NMP-GROUP: Sec. 341 Creditors' Meeting Today
--------------------------------------------
The U.S. Trustee will convene a meeting of creditors pursuant to
11 U.S.C. 341(a) in the Chapter 11 case of NMP-Group LLC on
Sept. 25, 2012, at 2:00 p.m.
NMP-Group LLC, the owner of 21 East 33rd Street in Manhattan,
filed a petition for Chapter 11 protection (Bankr. S.D.N.Y. Case
No. 13-bk-12269) on July 10, 2013, in New York to prevent a
foreclosure sale. Ilana Volkov, Esq. --
ivolkov@coleschotz.com -- and Felice R. Yudkin, Esq. --
fyudkin@coleschotz.com -- at Cole, Schotz, Meisel, Forman &
Leonard, P.A., represent the Debtor.
The U.S. Trustee has not formed a creditors' committee due
to lack of interest of creditors to serve in the committee.
NNN CYRPRESSWOOD: Has Until Oct. 27 to File Exit Plan
-----------------------------------------------------
The Hon. Carol A. Doyle of the U.S. Bankruptcy Court for the
Northern District of Illinois extended until Oct. 27, 2013,
NNN Cypresswood Drive 25, LLC's exclusive periods to file and
solicit acceptances for the Chapter 11 Plan.
As reported in the Troubled Company Reporter on Sept. 4, 2013, the
Debtor has already filed a Plan and Disclosure Statement. The
Debtor explained that cause exists for an extension of its
exclusive right to file an amended plan or confirm the current
Plan because an appeal is pending before the District Court. The
District Court's ruling on the appeal will determine whether the
Plan as constituted is confirmable or whether the Debtor will be
required to file an amended plan with the Court.
The Debtor noted that the Bankruptcy Court entered an order
denying the motion of WBCMT to continue the foreclosure proceeding
against all of the non-Debtor tenant in common (TICs), including
the participating TICs; and allowing WBCMT to pursue its remedies
under state law against the non-Debtor TICs, including, but not
limited to, the continuation of the foreclosure proceeding.
On Jan. 15, 2013, the lender filed a motion for relief from the
automatic stay as to non-debtor affiliates. The lender sought to
continue the foreclosure proceeding against all of the non-debtor
TICs under the guise that co-tenant interests were not property of
the Debtor's bankruptcy estate and none of the Debtor's property
rights in the Property or otherwise would be affected by the
Foreclosure Proceeding.
On March 6, 2013, the Court entered an order denying the motion,
stating that "the stay does not apply to the interests held by the
thirty-two non-debtor TICs or to any redemption rights held by the
debtor." Based on the holding of the order, the lender "is free
to pursue its remedies under state law against" the non-Debtor
TICs, including, but not limited to, the continuation of the
foreclosure proceeding.
On March 15, 2013, the Debtor filed a notice of appeal of the
Order, which is fully briefed and awaiting decision from the
District Court.
On May 7, 2013, the lender successfully credit bid $6,925,500 of
its debt at the non-judicial foreclosure sale of the non-Debtor
TIC interests.
About NNN Cypresswood Drive
NNN Cypresswood Drive 25, LLC, filed a Chapter 11 petition (Bankr.
N.D. Ill. Case No. 12-50952) on Dec. 31, 2012, in Chicago. The
Debtor, a Single Asset Real Estate as defined in 11 U.S.C. Sec.
101(51B), has principal assets located at 9720 & 9730 Cypresswood
Drive, in Houston, Texas. The Debtor valued its assets and
liabilities at less than $50 million. In its schedules, the
Debtor disclosed assets of "Unknown" amount and $35,181,271 in
liabilities as of the Chapter 11 filing.
Michael L. Gesas, Esq., at Arnstein & Lehr LLP, in Chicago,
represent the Debtor as counsel. Mubeen M. Aliniazee and
Highpoint Management Solutions, LLC, serve as the Debtor's
financial consultant.
No trustee, examiner, or statutory creditors' committee has been
appointed in this chapter 11 case.
NNN CYPRESSWOOD: Oct. 23 Hearing on Motion to Dismiss Case
----------------------------------------------------------
The Hon. Carol A. Doyle of the U.S. Bankruptcy Court for the
Northern District of Illinois, according to NNN Cypresswood Drive
25, LLC's case docket, will convene a hearing on Oct. 23, 2013, at
10:30 a.m., to consider motions for relief from stay and to
dismiss the Chapter 11 case of the Debtor. Supplemental brief is
due by Sept. 25. Objections, if any, are due Oct. 9.
Lender WBCMT 2007-C33 Office 9729, LLC, filed the motion for
relief from the automatic stay or, in the alternative, to dismiss
the Debtor's case. The Debtor has opposed the motion, as reported
in the Troubled Company Reporter on Aug. 14, 2013. Among others,
the Debtor said the lender's accusations of bad faith carry no
weight and are clearly refuted by the Debtor's actions in this
bankruptcy proceeding. The Debtor notes that its objective in
this case has been straightforward -- to protect the real property
in Houston, Texas which is a retirement investment for the
Debtor's principal and other tenant in common ("TIC") members.
On Jan. 15, 2013, the lender filed a motion for relief from the
automatic stay as to non-debtor affiliates. The lender sought to
continue the foreclosure proceeding against all of the non-debtor
TICs under the guise that co-tenant interests were not property of
the Debtor's bankruptcy estate and none of the Debtor's property
rights in the Property or otherwise would be affected by the
Foreclosure Proceeding.
On March 6, 2013, the Court entered an order denying the motion,
stating that "the stay does not apply to the interests held by the
thirty-two non-debtor TICs or to any redemption rights held by the
debtor." Based on the holding of the order, the lender "is free
to pursue its remedies under state law against" the non-Debtor
TICs, including, but not limited to, the continuation of the
foreclosure proceeding.
On March 15, 2013, the Debtor filed a notice of appeal of the
Order, which is fully briefed and awaiting decision from the
District Court.
On May 7, 2013, the lender successfully credit bid $6,925,500 of
its debt at the non-judicial foreclosure sale of the non-Debtor
TIC interests.
About NNN Cypresswood Drive
NNN Cypresswood Drive 25, LLC, filed a Chapter 11 petition (Bankr.
N.D. Ill. Case No. 12-50952) on Dec. 31, 2012, in Chicago. The
Debtor, a Single Asset Real Estate as defined in 11 U.S.C. Sec.
101(51B), has principal assets located at 9720 & 9730 Cypresswood
Drive, in Houston, Texas. The Debtor valued its assets and
liabilities at less than $50 million. In its schedules, the
Debtor disclosed assets of Unknown amount and $35,181,271 in
liabilities as of the Chapter 11 filing.
Michael L. Gesas, Esq., at Arnstein & Lehr LLP, in Chicago,
represent the Debtor as counsel. Mubeen M. Aliniazee and
Highpoint Management Solutions, LLC, serve as the Debtor's
financial consultant.
No trustee, examiner, or statutory creditors' committee has been
appointed in this chapter 11 case.
NNN PARKWAY: Files Chapter 11 Plan; Disclosures Hearing Oct. 23
---------------------------------------------------------------
NNN Parkway 400 26, LLC, et al., filed with the U.S. Bankruptcy
Court for the Central District of California on Sept. 6, 2013 a
proposed Chapter 11 Plan and an explanatory disclosure statement.
According to the Debtors, the payments under the Plan will be
funded by (1) a new capital infusion over the term of the Plan
from the Debtors collectively based on an investment venture with
Steelbridge Capital, LLC; (2) net operational profits generated by
the Property, after allowance of operational expenses and
reserves; and (3) to the extent necessary, other sources of funds,
including a further cash infusion from the Debtors or future
borrowings. Before or by the five year anniversary of the
Effective Date, the Property will either be refinanced or sold to
pay off the remaining Class 2 Secured Claim of WBCMT 2007-C31
Amberpark Office Limited Partnership and Lender's Unsecured Claim
in Class 7.
According to papers filed with the Court, the Debtors believe
that, in the absence of the Chapter 11 reorganization and the
confirmation of the Plan, the Debtors' assets would be liquidated
at substantially discounted prices, leaving much less to pay
creditors. "The Plan, on the other hand, allows the Debtors to
maximize the return to creditors through the orderly
administration of their assets. For example, the Lender will
continue to be paid under a debt secured by the Property and non-
Lender creditors will be able to receive payments on their debts.
Based on the New Capital Infusion, the property manager will have
sufficient time and resources to improve and lease the Property
thereby increasing the occupancy rate and rental revenue, to the
benefit of the Property, its tenants, vendors and local business
community."
WBCMT
The Debtors' Plan provides for a bifurcation of WBCMT's claim into
secured and unsecured claims based on the value of the Property.
Among other things, the Plan provides for a substantial principal
pay down of the Lender's secured claim and then payments over
time.
The Class 2 Claim of WBCMT, to the extent Allowed, will be treated
as a Secured Claim in the amount of $19,800,000, secured by liens
and security interests in the WBCMT Collateral, including the
Property.
On or before the five-year anniversary of the Effective Date,
WBCMT will be paid a sum certain of $1,000,000 on its Class 7
Unsecured Claim. To the extent WBCMT recovers payment on its
Class 7 Claim from the Guarantor, WBCMT's Class 7 Claim will be
disallowed in a proportionate amount which prohibits any double
recovery, and WBCMT will not be entitled to any payment on the
Class 7 Claim.
General Unsecured Claims
Except to the extent the holder of an Allowed Class 6 General
Unsecured Claim has been paid prior to the Effective Date or
agrees to less favorable treatment, each holder of an Allowed
Class 6 General Unsecured Claim will receive 50% of its Allowed
Class 6 Claim within six months of the Effective Date and 50%
within 12 months of the Effective Date.
TIC Owners
Class 9 consists of all Allowed Unsecured Claims against the
Debtors by the TIC owners of the Property, other than the Debtors,
for which TICs are jointly and severally liable on Class 1, Class
2, Class 3, Class 4, Class 5, Class 6, Class 7 and Class 8 Claims,
including those Claims arising before the Effective Date or those
which arise under the Plan. Class 9 Claims will receive no
payment.
Interest Holders
Class 10 Interest Holders will receive, on account of each of
their Interests in the Debtors, a share of interests in the
Reorganized Debtors in proportion to the respective Debtor's
ownership interest in the Property.
A copy of the Disclosure Statement is available at:
http://bankrupt.com/misc/nnnparkway.doc284.pdf
About NNN Parkway 400
NNN Parkway 400 26, LLC, filed a bare-bones Chapter 11 petition
(Bankr. C.D. Cal. Case No. 12-24593) in Santa Ana, California,
on Dec. 31, 2012. Dana Point, California-based NNN Parkway
estimated assets and debts of $10 million to $50 million. The Law
Office of Christine E. Baur, and David A. Lee, Esq., at Weiland,
Golden, Smiley, Wang Ekvall & Strok, LLP, represent the Debtor.
Pre-petition, the Debtors retained HighPoint Management Solutions,
LLC, a bankruptcy consulting company, as a manager of the Debtors,
and HighPoint's President, Mr. Mubeen Aliniazee, as the Debtors'
Restructuring Officer, to assist the Debtors in their compliance
with the Chapter 11 bankruptcy process.
The Debtors' primary asset is a commercial real property commonly
known as Parkway 400, which is a two-building office campus
totaling approximately 193,281 square feet located at 11720 Amber
Park Drive and 11800 Amber Park Drive, Alpharetta, Georgia. The
Debtors hold a concurrent ownership interest in the Property with
other tenant-in-common investors and the sponsor, NNN Parkway 400,
LLC.
NNN PARKWAY: WBCMT Wants Stay Relief Hearing Continued to Nov. 6
----------------------------------------------------------------
On Sept. 20, 2013, lender WBCMT 2007-C31 Amberpark Office Limited
Partnership filed with the U.S. Bankruptcy Court for the Central
District of California an Ex Parte Motion to continue the hearing
on its motions for relief from the automatic stay and to dismiss
NNN Parkway 400 26, LLC, et al.'s jointly administered Chapter 11
cases, to Nov. 6, 2013, at 10:00 a.ml, to afford it the
opportunity to conduct discovery with respect to the Chapter 11
Plan of Reorganization filed by the Debtors on Sept. 6, 2013.
NNN Parkway 400 26, LLC, filed a bare-bones Chapter 11 petition
(Bankr. C.D. Cal. Case No. 12-24593) in Santa Ana, California,
on Dec. 31, 2012. Dana Point, California-based NNN Parkway
estimated assets and debts of $10 million to $50 million. The Law
Office of Christine E. Baur, and David A. Lee, Esq., at Weiland,
Golden, Smiley, Wang Ekvall & Strok, LLP, represent the Debtor.
Pre-petition, the Debtors retained HighPoint Management Solutions,
LLC, a bankruptcy consulting company, as a manager of the Debtors,
and HighPoint's President, Mr. Mubeen Aliniazee, as the Debtors'
Restructuring Officer, to assist the Debtors in their compliance
with the Chapter 11 bankruptcy process.
The Debtors' primary asset is a commercial real property commonly
known as Parkway 400, which is a two-building office campus
totaling approximately 193,281 square feet located at 11720 Amber
Park Drive and 11800 Amber Park Drive, Alpharetta, Georgia. The
Debtors hold a concurrent ownership interest in the Property with
other tenant-in-common investors and the sponsor, NNN Parkway 400,
LLC.
NOVA TERRA: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: Nova Terra, Inc.
P.O. Box 142137
Arecibo, PR 00614
Bankruptcy Case No.: 13-07701
Chapter 11 Petition Date: September 18, 2013
Court: U.S. Bankruptcy Court
District of Puerto Rico (Old San Juan)
Judge: Edward A. Godoy
Debtor's Counsel: Juan Carlos Bigas Valedon, Esq.
JUAN C. BIGAS LAW OFFICE
P.O. Box 7011
Ponce, PR 00732-7011
Tel: (787) 259-1000
(787) 633-1253
Fax: (787) 842-4090
E-mail: juancbigaslaw@gmail.com
Estimated Assets: $0 to $50,000
Estimated Debts: $1,000,001 to $10,000,000
A copy of the Company's list of its 20 largest unsecured creditors
filed with the petition is available for free at:
http://bankrupt.com/misc/prb13-07701.pdf
The petition was signed by Vanessa Piereschi Fernandez, president.
ORMET CORP: Emergency Payment Motion Approved
---------------------------------------------
BankruptcyData reported that the U.S. Bankruptcy Court approved
Ormet's emergency motion for entry of an order, pursuant to 11
U.S.C. Sections 105(a), 363(b), and 503(c), authorizing the
Debtors to pay obligations under its existing salaried employee
layoff plan, nunc pro tunc to September 9, 2013, in an amount of
up to $75,000 on a monthly basis and $250,000 in total, on an
aggregate basis.
As previously reported, "The Layoff Plan has been in place for
over eight years and is designed to fairly compensate Salaried
Employees for their service to the company and to provide
supplemental benefits for up to one year as a safeguard until the
company is able to recall them... Accordingly, the Debtors have
conducted a round of layoffs of Hourly Employees and are now in a
position to layoff certain of their Salaried Employees. As the
Debtors continue operations with ever-present uncertainty
regarding the long-term ability of the Debtors to maintain
operations as a going concern, the remaining Employees,
rightfully, are concerned about the future of the Debtors. In
order to maximize value, until the Sale is consummated with the
Buyer, or the Debtors were forced to further reduce operations,
the Debtors need their workforce to be focused on their current
jobs and limited in their distractions. By authorizing the
Debtors to honor their obligations, the remaining Salaried
Employees will have greater comfort, easing some of the anxiety
that will inevitably distract from their job performance. The
relief requested herein is critical for the Debtors as they need
the remaining Employees to maintain their focus and continue to
perform as they always have."
About Ormet Corp.
Aluminum producer Ormet Corporation, along with affiliates, filed
for Chapter 11 protection (Bankr. D. Del. Case No. 13-10334) on
Feb. 25, 2013, with a deal to sell the business to a portfolio
company owned by private investment funds managed by Wayzata
Investment Partners LLC.
Headquartered in Wheeling, West Virginia, Ormet --
http://www.ormet.com/-- is a fully integrated aluminum
manufacturer, providing primary metal, extrusion and thixotropic
billet, foil and flat rolled sheet and other products.
Ormet disclosed assets of $406.8 million and liabilities totaling
$416 million. Secured debt of about $180 million includes $139.5
million on a secured term loan and $39.3 million on a revolving
credit.
Affiliates that separately filed Chapter 11 petitions are Ormet
Primary Aluminum Corporation; Ormet Aluminum Mill Products
Corporation; Specialty Blanks Holding Corporation; and Ormet
Railroad Corporation.
Ormet is represented in the case by Morris, Nichols, Arsht &
Tunnell LLP's Erin R. Fay, Esq., Robert J. Dehney, Esq., Daniel B.
Butz, Esq.; and Dinsmore & Shohl LLP's Kim Martin Lewis, Esq.,
Patrick D. Burns, Esq. Kurtzman Carson Consultants is the claims
and notice agent. Evercore's Lloyd Sprung and Paul Billyard serve
as investment bankers to the Debtor.
An official committee of unsecured creditors was appointed in the
case in March 2013. The Committee is represented by Rafael X.
Zahralddin, Esq., Shelley A. Kinsella, Esq., and Jonathan M.
Stemerman, Esq., at Elliott Greenleaf; and Sharon Levine, Esq., S.
Jason Teele, Esq., and Cassandra M. Porter, Esq., at Lowenstein
Sandler LLP.
In June 2013, the Bankruptcy Court approved the sale of
substantially all of the assets of Ormet to Smelter Acquisition,
LLC, a portfolio company owned by private investment funds managed
by Wayzata Investment Partners LLC. With no competing bids,
Wayzata acquired the business in exchange for $130 million in
secured debt plus the loan financing bankruptcy. In connection
with its restructuring, Ormet received aggregate commitments of
$90 million of DIP Financing, consisting of $30 million in Term
DIP financing from Wayzata and a $60 million DIP facility from
Wells Fargo, which replaced its $60 million pre-petition revolver
with Ormet.
PATRIOT COAL: Arch Coal Produces Documents for Creditors
--------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that while Patriot Coal Corp. is claiming it hasn't
received full disclosure of documents from former parent Peabody
Energy Corp. after nine months, Patriot and its creditors'
committee succeeded in persuading Arch Coal Inc. to complete
document production in three months.
According to the report, a document-production agreement between
Patriot, the bankrupt coal producer's creditors' committee and St.
Louis based Arch was approved on Sept. 20 by the U.S. Bankruptcy
Court in St. Louis. Arch is obligated to use "reasonable efforts"
to complete the production in 90 days. Patriot and the committee
want documents pertaining to the 2008 acquisition of Magnum Coal
Co. Arch reserved the right to contend that the document-
production request is too broad.
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, 2013, filed a bare-bones
reorganization plan and promised to provide details in disclosure
materials by Oct. 2. The plan in general terms said creditors
will be paid with new stock and debt. 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.
PERSONAL COMMUNICATIONS: May Hire Goodwin Procter as Lead Counsel
-----------------------------------------------------------------
Personal Communications Devices, LLC, and its debtor-affiliates
sought and obtained permission from the Bankruptcy Court to employ
Goodwin Procter LLP as their primary restructuring counsel nunc
pro tunc to the Petition Date.
Goodwin Procter will be providing to the Debtors, among other
things, legal advice with respect to the Debtors' powers and
duties as debtors-in-possession in the continued operation of
their business and management of their property.
The Goodwin Procter principal attorneys and legal assistants
presently designated to represent the Debtors and their hourly
rates are:
Andrew J. Weidhaas, Partner $1,025
Emanuel C. Grillo, Partner $975
Breck N. Hancock, Partner $750
Matthew L. Curro, Associate $690
Eugenia P. Tzakas, Associate $640
Christopher Newcomb, Associate $595
Timothy Hurley, Associate $395
The firm will also charge for necessary expenses it incurred or
will incur in connection with the contemplated services.
The Debtors relate that since August 1, 2012, they have paid
Goodwin Procter $4,534,779 in fees and $101,438 in expenses for
services rendered. Goodwin Procter maintains a retainer of
$475,000.
To the best of the Debtors' knowledge, Goodwin Procter has not
represented the Debtors' creditors, equity security holders, or
any other parties-in-interest, or their respective attorneys, in
any matters relating to the Debtors or their estate, except as
described by Mr. Grillo in a declaration with the Court.
About PCD
Personal Communications Devices LLC and an affiliate, Personal
Communications Devices Holdings, LLC, filed for Chapter 11
bankruptcy (Bankr. E.D.N.Y. Case No. 13-74303) on Aug. 19, 2013,
in Central Islip, N.Y., estimating between $100 million
and $500 million in both assets and liabilities.
PCD -- http://www.pcdphones.com-- provides both carriers and
manufacturers an array of product life cycle management services
that includes planning and development; inventory; technical
testing; quality control; forward and reverse logistics; sell-in
and sell-thru, marketing & warranty support. Its extensive
portfolio of high-quality and versatile wireless devices includes
feature phones, smart phones, tablets, mobile hotspots, modems,
routers, fixed wireless, M2M, GPS, and other innovative wireless
connectivity devices and accessories. PCD is based in Hauppauge,
New York; and maintains operations facilities in Brea, California;
and Toronto, CA.
PCD filed for bankruptcy with a deal to sell the operations to
Quality One Wireless LLC for $105 million, absent a higher bid at
auction.
Bankruptcy Judge Alan S. Trust oversees the case. Attorneys at
Goodwin Procter, LLP and Togut, Segal & Segal, LLP serve as
counsel to the Debtors. Epiq Bankruptcy Solutions, LLC, is the
claims and notice agent. BG Strategic Advisors, LLC, is the
financial advisor. Richter Consulting, Inc., is the investment
banker.
The petitions were signed by Raymond F. Kunzmann as chief
financial officer.
Q1W is advised by Raymond James and Associates, Inc. and Munsch
Hardt Kopf & Harr, P.C.
A three-member official committee of unsecured creditors was
appointed in the Chapter 11 case.
PERSONAL COMMUNICATIONS: Can Employ Togut Segal as Co-Counsel
-------------------------------------------------------------
Personal Communications Devices, LLC, and its debtor affiliates
sought and obtained approval from the Bankruptcy Court's to employ
Togut, Segal & Segal LLP as their co-counsel effective as of the
Petition Date.
The Togut Firm will handle matters the Debtors may encounter which
are not appropriately handled by Goodwin Procter LLP, the Debtors'
lead counsel, and other professionals because of a potential
conflict of interest or alternatively can be more efficiently
handled by the Togut Firm.
The current hourly rate for Frank A. Oswald, Esq., a member of the
Togut Firm, who will be the supervising partner for the matter, is
$810. The Togut Firm's current rates for associates is $205 to
$585 per hour, $585 to $715 per hour for counsel, and $145 to $295
per hour for paralegals and law clerks. The Togut Firm will also
seek reimbursement for actual, necessary expenses pursuant to
Section 330(a)(1)(B) of the Bankruptcy Code.
To the best of the Debtors' knowledge, and based on Mr. Oswald's
declaration, the Togut Firm does not represent or hold any
interest adverse to the Debtors or their estates with respect to
the matters on which the firm is to be employed.
About PCD
Personal Communications Devices LLC and an affiliate, Personal
Communications Devices Holdings, LLC, filed for Chapter 11
bankruptcy (Bankr. E.D.N.Y. Case No. 13-74303) on Aug. 19, 2013,
in Central Islip, N.Y., estimating between $100 million
and $500 million in both assets and liabilities.
PCD -- http://www.pcdphones.com-- provides both carriers and
manufacturers an array of product life cycle management services
that includes planning and development; inventory; technical
testing; quality control; forward and reverse logistics; sell-in
and sell-thru, marketing & warranty support. Its extensive
portfolio of high-quality and versatile wireless devices includes
feature phones, smart phones, tablets, mobile hotspots, modems,
routers, fixed wireless, M2M, GPS, and other innovative wireless
connectivity devices and accessories. PCD is based in Hauppauge,
New York; and maintains operations facilities in Brea, California;
and Toronto, CA.
PCD filed for bankruptcy with a deal to sell the operations to
Quality One Wireless LLC for $105 million, absent a higher bid at
auction.
Bankruptcy Judge Alan S. Trust oversees the case. Attorneys at
Goodwin Procter, LLP and Togut, Segal & Segal, LLP serve as
counsel to the Debtors. Epiq Bankruptcy Solutions, LLC, is the
claims and notice agent. BG Strategic Advisors, LLC, is the
financial advisor. Richter Consulting, Inc., is the investment
banker.
The petitions were signed by Raymond F. Kunzmann as chief
financial officer.
Q1W is advised by Raymond James and Associates, Inc. and Munsch
Hardt Kopf & Harr, P.C.
A three-member official committee of unsecured creditors was
appointed in the Chapter 11 case.
PERSONAL COMMUNICATIONS: Epiq Approved as Administrative Advisor
----------------------------------------------------------------
Personal Communications Devices LLC et al sought and obtained
approval from the U.S. Bankruptcy Court to employ Epiq Bankruptcy
Solutions, LLC, as administrative advisor.
The firm will, among other things, provide these services:
a. assist with, among other things, the solicitation, balloting
and tabulation and calculation of votes, as well as
preparing any appropriate reports, as required in
furtherance of confirmation of plan(s) of reorganization;
b. generate an official ballot certification and testifying,
if necessary, in support of the ballot tabulation results;
and
c. gather data in conjunction with the preparation, and
assist with the preparation, of the Debtors' schedules of
assets and liabilities and statements of financial affairs.
Todd W. Wuertz of Epiq attests that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the
Bankruptcy Code.
About PCD
Personal Communications Devices LLC and an affiliate, Personal
Communications Devices Holdings, LLC, filed for Chapter 11
bankruptcy (Bankr. E.D.N.Y. Case No. 13-74303) on Aug. 19, 2013,
in Central Islip, N.Y., estimating between $100 million
and $500 million in both assets and liabilities.
PCD -- http://www.pcdphones.com-- provides both carriers and
manufacturers an array of product life cycle management services
that includes planning and development; inventory; technical
testing; quality control; forward and reverse logistics; sell-in
and sell-thru, marketing & warranty support. Its extensive
portfolio of high-quality and versatile wireless devices includes
feature phones, smart phones, tablets, mobile hotspots, modems,
routers, fixed wireless, M2M, GPS, and other innovative wireless
connectivity devices and accessories. PCD is based in Hauppauge,
New York; and maintains operations facilities in Brea, California;
and Toronto, CA.
PCD filed for bankruptcy with a deal to sell the operations to
Quality One Wireless LLC for $105 million, absent a higher bid at
auction.
Bankruptcy Judge Alan S. Trust oversees the case. Attorneys at
Goodwin Procter, LLP and Togut, Segal & Segal, LLP serve as
counsel to the Debtors. Epiq Bankruptcy Solutions, LLC, is the
claims and notice agent. BG Strategic Advisors, LLC, is the
financial advisor. Richter Consulting, Inc., is the investment
banker.
The petitions were signed by Raymond F. Kunzmann as chief
financial officer.
Q1W is advised by Raymond James and Associates, Inc. and Munsch
Hardt Kopf & Harr, P.C.
A three-member official committee of unsecured creditors was
appointed in the Chapter 11 case.
PERSONAL COMMUNICATIONS: Can Employ Richter as Financial Advisor
----------------------------------------------------------------
Personal Communications Devices, LLC, et al., sought and obtained
approval from the Bankruptcy Court to employ Richter Consulting,
Inc., as financial advisor nunc pro tunc to the Petition Date.
Richter has been actively involved in the negotiation of the
specific terms for a prospective sale of the Debtors' assets,
including the extensive analysis the Debtors performed regarding
the Asset Purchase Agreement executed with Quality One Wireless,
LLC and Q1W Newco, LLC.
Richter has provided certain budgeting and financial analysis of
the Debtors' cash flows, analyses of the implications of various
bids, negotiations of bids, including analyses used as the basis
for the existing Quality One bid.
Prior to the Petition Date, the Debtors paid Richter $3,785,033.
The Debtors have agreed that the balance of the Retainers of
$613,508 is to be held by Richter as security during the pendency
of these Chapter 11 cases.
The customary hourly rates of Richter's professionals are:
Partner $575 to $675
Principal/Vice-President $425 to $525
Senior Associate $375 to $425
Associate/Analyst $275 to $375
The Debtors will reimburse Richter for its necessary and actual
expenses related to the services to be rendered.
The Debtors believe that Richter (i) has no connection with the
Debtors, their creditors or other parties-in-interest in the case
except as may be set forth in a declaration filed by Richter
partner Eric Barbieri -- ebarbieri@richterconsulting.com -- filed
with the Court, (ii) does not hold any interest adverse to the
Debtors' estate, and (iii) is a "disinterested person" as defined
within Sec. 101(14) of the Bankruptcy Code.
About PCD
Personal Communications Devices LLC and an affiliate, Personal
Communications Devices Holdings, LLC, filed for Chapter 11
bankruptcy (Bankr. E.D.N.Y. Case No. 13-74303) on Aug. 19, 2013,
in Central Islip, N.Y., estimating between $100 million
and $500 million in both assets and liabilities.
PCD -- http://www.pcdphones.com-- provides both carriers and
manufacturers an array of product life cycle management services
that includes planning and development; inventory; technical
testing; quality control; forward and reverse logistics; sell-in
and sell-thru, marketing & warranty support. Its extensive
portfolio of high-quality and versatile wireless devices includes
feature phones, smart phones, tablets, mobile hotspots, modems,
routers, fixed wireless, M2M, GPS, and other innovative wireless
connectivity devices and accessories. PCD is based in Hauppauge,
New York; and maintains operations facilities in Brea, California;
and Toronto, CA.
PCD filed for bankruptcy with a deal to sell the operations to
Quality One Wireless LLC for $105 million, absent a higher bid at
auction.
Bankruptcy Judge Alan S. Trust oversees the case. Attorneys at
Goodwin Procter, LLP and Togut, Segal & Segal, LLP serve as
counsel to the Debtors. Epiq Bankruptcy Solutions, LLC, is the
claims and notice agent. BG Strategic Advisors, LLC, is the
financial advisor. Richter Consulting, Inc., is the investment
banker.
The petitions were signed by Raymond F. Kunzmann as chief
financial officer.
Q1W is advised by Raymond James and Associates, Inc. and Munsch
Hardt Kopf & Harr, P.C.
A three-member official committee of unsecured creditors was
appointed in the Chapter 11 case.
PHYSIOTHERAPY ASSOCIATES: Preparing for Prepack Chapter 11
----------------------------------------------------------
Emily Glazer, writing for The Wall Street Journal, reports that
people familiar with the matter said Physiotherapy Associates, an
outpatient rehabilitation-services provider acquired by private-
equity firm Court Square Capital Partners last year, is preparing
to file for Chapter 11 bankruptcy protection in the next several
weeks, as it struggles with accounting concerns and a heavy debt
load.
Physiotherapy Associates carries about $325 million in debt.
Sources told WSJ that the company will begin soliciting votes from
creditors on a reorganization plan in early October, and aims to
file a so-called prepackaged bankruptcy plan likely around late
October or early November.
According to the WSJ report, the people familiar with the matter
said law firm Kirkland & Ellis LLP, investment bank Rothschild
Inc. and turnaround specialist Alvarez & Marsal are working with
the company. Restructuring lawyers at Klee, Tuchin, Bogdanoff &
Stern LLP and Houlihan Lokey are working with some bondholders,
and law firm Latham & Watkins LLP is working with other
bondholders, the sources added. Lawyers at Dechert LLP, which
represented Court Square in its purchase of Physiotherapy
Associates in May 2012, is representing Court Square with respect
to the litigation trust, some of these people said.
New York-based Court Square has more than $5 billion in assets
under management. WSJ notes that Court Square purchased
Physiotherapy Associates from private-equity firms Water Street
Healthcare Partners LLC and Wind Point Partners in May 2012 for an
undisclosed price.
Based in Exton, Pa., Physiotherapy Associates has about 575
outpatient rehabilitation and orthotic and prosthetic clinics
across 34 states, according to its website, WSJ says.
According to the report, under the proposed bankruptcy plan,
noteholders would get 100% of the reorganized company and an
interest in a so-called litigation trust. The trust would be
formed, some of the people said, because Court Square thinks it
discovered accounting irregularities after its purchase of the
company, and is seeking to pursue potential claims in litigation.
According to WSJ, a Moody's Investors Service report indicated
that in April some creditors gave Physiotherapy Associates
additional time to restate past earnings. A few weeks later, in
May, it skipped a coupon payment, Moody's said. The ratings
company said in an April report that it understood that questions
arose during the audit process over accounts-receivable balances.
PLASTIPAK HOLDINGS: S&P Rates $300MM Unsecured Notes 'B+'
---------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' issue-level
rating and '5' recovery rating to Plymouth, Mich.-based packaging
company Plastipak Holdings Inc.'s proposed $300 million senior
unsecured notes due 2021. The '5' recovery rating indicates S&P's
expectation for modest (10% to 30%) recovery in the event of a
payment default.
At the same time, based on S&P's updated recovery analysis, it
raised its ratings on the company's existing $225 million senior
unsecured notes due 2019 to 'B+' from 'B', and revised the
recovery rating on this debt to '5' from '6', reflecting its
expectation for modest (10% to 30%) recovery in the event of a
payment default. S&P has raised the emergence multiple to 6.0x
from 5.0x based on the company's meaningful exposure to recession-
resistant end markets, which was evidenced by the company's
relatively stable operating results through the recent downturn.
S&P expects to withdraw the issue-level ratings on these notes
after they have been repaid. The 'BB-' corporate credit rating
remains unchanged. The outlook is stable.
Plastipak will use the proceeds from the proposed notes issuance
to pay the consideration in a concurrent tender offer being
undertaken for the company's 2019 notes, pay related fees and
expenses and repay other existing debt.
S&P's ratings on Plastipak reflects its assessment of its business
profile as "fair" and financial profile as "aggressive".
Privately held Plastipak, with annual revenues of about
$2.3 billion, is a leading producer of blow-molded plastic
containers in the fragmented and highly competitive rigid plastic
packaging industry.
RATINGS LIST
Plastipak Holdings Inc.
Corporate Credit Rating BB-/Stable/--
New Rating
Plastipak Holdings Inc.
$300 Mil. Senior Unsec. Notes Due 2021 B+
Recovery Rating 5
Ratings Raised; Recovery Ratings Revised
To From
Plastipak Holdings Inc.
$225 Mil. Senior Unsec. Notes Due 2019 B+ B
Recovery Rating 5 6
PLATINUM PROPERTIES: Hires Thomas C. Scherer as Mediator
--------------------------------------------------------
Platinum Properties, LLC, et al., received permission from the
U.S. Bankruptcy Court to employ Thomas C. Scherer to serve as
mediator in the bankruptcy cases.
Counsel for the Debtors can be reached at:
Kayla D. Britton, Esq.
Jay Jaffe, Esq.
Faegre Baker Daniels LLP
600 E. 96th Street, Suite 600
Indianapolis, IN 46240
Tel: 317-569-9600
Fax: 317-569-4800
E-mail: Kayla.britton@gaegrebd.com
Jay.jaffe@faegrebd.com
Counsel for Paul Shoopman, Shelley Shoopman, Paul Shoopman Custom
Homes, Inc., Paul Shoopman Home Building Group, Inc., and Shoopman
Acquisitions, Inc. can be reached at:
RUBIN & LEVIN, P.C.
John M. Rogers, Esq.
Christopher M. Trapp, Esq.
Thomas B. Allington, Esq.
342 Massachusetts Avenue, Suite 500
Indianapolis, IN 46204-2161
Tel: 317-634-0300
Fax: 317-453-8601
E-mail: tallington@rubin-levin.net
jrogers@rubin-levin.net
ctrapp@rubin-levin.net
About Platinum Properties and PPV LLC
Indianapolis, Indiana-based Platinum Properties, LLC, is a
residential real estate developer. Platinum acquires land,
designs the projects, obtains zoning and other approvals, and
constructs roads, drainage, utilities, and other infrastructure of
residential subdivisions. Platinum then sells the finished,
platted lots. Platinum also has an ownership interest in several
special purpose entities that in turn own, operate and manage
individual projects.
PPV LLC is a joint venture between Platinum and a non-debtor
entity, Pittman Partners, Inc., each of whom hold an equity
interest in PPV. PPV owned four projects directly and owns 100%
of the membership interest of Sweet Charity Estates, LLC.
Platinum Properties and PPV LLC filed for Chapter 11 protection
(Bankr. S.D. Ind. Case Nos. 11-05140 and 11-05141) on April 25,
2011. Lawyers at Baker & Daniels LLP, in Indianapolis, Indiana,
serve as the Debtors' bankruptcy counsel. Platinum Properties
disclosed $14,624,722 in assets and $181,990,960 in liabilities as
of the Chapter 11 filing.
The U.S. Trustee has not yet appointed a creditors committee in
the Debtor's case. The U.S. Trustee reserves the right to appoint
such a committee should interest developed among the creditors.
PROCTOR HOSPITAL: Moody's Eyes Upgrade for B2 Long-Term Rating
--------------------------------------------------------------
Moody's Investors Service has placed the B2 long-term rating
assigned to Proctor Hospital under review for potential upgrade.
Proctor had previously been under review for potential downgrade
due to a sharp drop in absolute cash and investments, continued
operating losses and declining operating cash flow. The action
follows an affiliation agreement signed September 9, 2013 between
Proctor Health Care Incorporated, Proctor Health Care Foundation,
and Methodist Health Services Corporation. This action affects the
Series 2006A Bonds (approximately $22.5 million outstanding)
issued through the Illinois Finance Authority.
Proctor Hospital is owned by PHCI. MHSC d/b/a UnityPoint Health
-- Methodist owns Methodist Medical Center (A2/positive outlook).
UnityPoint Health -- Methodist is part of Iowa Health System d/b/a
UnityPoint Health (Aa3 /stable). PHCI has signed an affiliation
agreement to be solely owned by MHSC. The transaction is set for
hearing on November 5, 2013 with the Illinois Finance Authority
review board. Due to Proctor Hospital's small net asset size and
the combined Methodist/Proctor market share still less than market
leader OSF Healthcare System (A3/negative), regulatory
approvals/reviews are not expected to materially delay the closing
process. The proposed transaction with OSF Healthcare System
previously discussed in the Moody's June 2013 report was
terminated in July 2013. The UnityPoint Health transaction is
projected to close by calendar year end. Management reports under
terms of deal, Proctor's debt would likely be brought into parity
with UnityPoint Health's existing debt by calendar year end 2013.
The principal methodology used in this rating was Not-for-Profit
Healthcare Rating Methodology published in March 2012.
QUBEEY INC: Taps Greenberg & Bass as Attorneys
----------------------------------------------
Qubeey, Inc., asks the U.S. Bankruptcy Court for the Central
District of California for authorization to employ Greenberg &
Bass LLP as bankruptcy counsel for the Debtor.
G&B will:
-- advise the Debtor as to its duties, rights and powers as
debtor-in-possession;
-- assist the Debtor in the formulation and confirmation of a
Plan of Reorganization or a sale of subject property;
-- perform other legal services as may be required and in the
interests of the Debtor and the estate; and
-- provide other services as may be required and in the best
interest of the Debtor and the estate
The Debtor believes G&B is a disinterested party and represents
and holds no interest adverse to the estate.
According to papers filed with the Court, because G&B will be
required to bear all of the additional cost and fees, the firm
will be seeking a substantial premium because of the contingent
nature of the undertaking. The bonus, which will be subject to
the approval of the Bankruptcy Court, will be equal to 2.5% of the
gross selling price of the assets, less all amounts paid out to
creditors of the Qubeey estate. The bonus will be in addition to
the firm's hourly billings plus costs.
G&B's hourly fees are:
Partners $425
Of Counsel $375 to $495
Associates $275 to $375
Senior Manager, Strategic
Planning and Analysis $360
Law Clerk $125
Paralegal/Legal Assistant $95 to $220
Qubeey, Inc., filed a Chapter 11 petition (Bankr. C.D. Cal. Case
No. 13-15805) on Sept. 5, 2013. Rocky Wright signed the petition
as president. The Debtor estimated assets of at least $10 million
and debts of at least $1 million. Douglas M. Neistat, Esq., --
tkrant@greenbass.com -- at Greenberg & Bass, in Encino, CA, serves
as the Debtor's counsel. Judge Maureen Tighe presides over the
case.
QUBEEY INC: Has Until Sept. 27 to File SALs and SOFA
----------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California
granted Qubeey, Inc., until Sept. 27, 2013, to file its schedules
of assets and liabilities and statement of financial affairs.
Qubeey, Inc., filed a Chapter 11 petition (Bankr. C.D. Cal. Case
No. 13-15805) on Sept. 5, 2013. Rocky Wright signed the petition
as president. The Debtor estimated assets of at least $10 million
and debts of at least $1 million. Douglas M. Neistat, Esq., --
E-mail: tkrant@greenbass.com -- at GREENBERG & BASS, in Encino,
CA, serves as the Debtor's counsel. Judge Maureen Tighe presides
over the case.
REEVES DEVELOPMENT: Plan Outline Hearing Continued Until Oct. 31
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Louisiana
continued until Oct. 31, 2013, at 10:30 a.m., the hearing to
consider the adequacy of the Disclosure Statement explaining
Reeves Development Company LLC's Chapter 11 Plan.
As reported in the Troubled Company Reporter on March 27, 2013,
the Plan provides that on the effective date, all allowed accrued
interest calculated at the non-default contractual rate of 4% per
annum plus any amounts allowed by the Court will be capitalized
and added to the outstanding principal balance due under the note
issued by Iberia Bank. The maturity of the Iberia Note will be
extended to 60 months from the Effective Date. The Debtor will
then repay the New Principal Balance with interest accruing at the
non-default contractual rate of 4% per annum from the Effective
Date.
Holders of Allowed Secured Vendor Claims will receive quarterly
interest payments equal to 2% per annum on the outstanding
principal balance, plus an amount equal to the claim holders' pro
rata share as to the total allowed outstanding principal balances
of the total claims of an amount equal to $1,500 per acre for each
acre of land sold by the Debtor.
Branch Banking and Trust has agreed to a settlement of its
unsecured claims against the Debtor in exchange for certain
concessions from the Debtor's affiliated company, Houma Dollar
Partners, LLC. In exchange for these concessions, the Debtor has
agreed to forgo any payments due from Houma Dollar Partners. The
arrangement is subject to court approval in the bankruptcy case of
Houma Dollar Partners, LLC Case No. 12-20649.
The Allowed General Unsecured Claims, which class of claims
includes potential contract offset claims of $152,552, will be
paid quarterly interest payments equal to 2% of the outstanding
balance of the approved claim.
The Holder of the Subordinated Claim of Reeves Commercial
Properties, LLC, agrees that it will not receive any payments for
its claims, until all other approved claims under the Plan have
been paid in full.
Equity holders have likewise agreed to forgo any payments under
the Plan until all creditors have received principal payments
totaling 50% of the approved balance as of the effective date.
Any payments to Equity holders allowed under the Plan will be
limited to an amount equal to the tax liability passed through to
the equity holders by the Debtor.
About Reeves Development
Reeves Development Company, LLC, a commercial and residential real
estate developer, filed a Chapter 11 petition (Bankr. W.D. La.
Case No. 12-21008) in Lake Charles, Louisiana, on Oct. 30, 2012.
The closely held developer was founded in 1998 by Charles Reeves
Jr., its sole owner. Reeves Development has about 80 employees
and generates about $40 million in annual revenue, according to
its Web site.
Bankruptcy Judge Robert Summerhays oversees the case. Arthur A.
Vingiello, Esq. -- avingiello@steffeslaw.com -- at Steffes,
Vingiello & McKenzie, LLC, in Baton Rogue, Louisiana, represents
the Debtor as counsel.
Reeves Development scheduled assets of $15,454,626 and liabilities
of $20,156,597 as of the Petition Date.
Affiliate Reeves Commercial Properties, LLC (Bankr. W.D. La. Case
No. 12-21009) also sought court protection.
RENAISSANCE LEARNING: Moody's Changes Ratings Outlook to Negative
-----------------------------------------------------------------
Moody's Investors Service affirmed Renaissance Learning, Inc.'s B2
corporate family rating and assigned B1 ratings to Renaissance's
proposed first lien senior secured credit agreement, consisting of
a $20 million revolving credit facility due 2018 and a $310
million term loan due 2020. In addition, Moody's assigned a Caa1
rating to the company's proposed $120 million senior secured
second lien term loan due 2021. The rating outlook was changed to
negative from stable.
Proceeds from the proposed bank debt combined with approximately
$46 million of balance sheet cash will be used to fund a $234
million dividend to the company's sponsors and refinance existing
debt. Renaissance was acquired by funds advised by Permira
Advisers LLC and its affiliates in October 2011. The assigned
ratings are subject to receipt and review of final documentation.
The change in rating outlook to negative reflects the company's
elevated financial risk profile and aggressive financial policies
which will result in a material erosion in the company's financial
flexibility. The affirmation of the B2 CFR primarily reflects the
company's recent improvement in operating performance which
partially mitigates the substantial increase in leverage resulting
from the proposed dividend recapitalization transaction. The
company's leverage (pro-forma for the transaction), as measured by
Moody's adjusted debt to EBITDA, was approximately 8.6 times for
the LTM period ended August 31, 2013. However, after incorporating
the substantial increase in deferred revenues (majority of which
will be recognized over the next 12 months), pro-forma leverage
for the transaction declines to about 5.7 times. Moody's believes
that this metric is more representative of the company's future
leverage profile as it incorporates upfront cash revenue received
for non-cancellable client contracts.
The following summarizes the rating activity:
Rating affirmed:
Corporate Family Rating at B2
Rating changed:
Probability of Default Rating to B2-PD from B3-PD
Ratings assigned:
Proposed $20 million first lien senior secured revolving credit
facility due 2018 at B1 (LGD3, 35%)
Proposed $310 million first lien senior secured term loan due
2020 at B1 (LGD3, 35%)
Proposed $120 million second lien senior secured term loan due
2021 at Caa1 (LGD5, 88%)
Ratings to be withdrawn at transaction closing:
$20 million first lien senior secured revolving credit facility
due 2017 at B2 (LGD3, 34%)
$230 million first lien senior secured term loan due 2018 at B2
(LGD3, 34%)
The rating outlook is negative.
Ratings Rationale:
Renaissance's B2 corporate family rating reflects the company's
high pro forma leverage, small scale and aggressive financial
policy demonstrated by the proposed dividend recapitalization
transaction resulting in balance sheet debt that is well in excess
of revenues. For the LTM period ended August 31, 2013, the
company's leverage on a debt to EBITDA basis is approximately 8.6
times pro-forma for the proposed transaction and including Moody's
standard adjustments and 5.7 times after incorporating the change
in deferred revenues. The rating also considers the company's
relative lack of product diversity and reliance on a single
product - Accelerated Reader - for a substantial portion of its
revenues, as well as competition from large scale well-capitalized
companies. Notwithstanding these risks, the rating predominantly
derives support from Renaissance's recent track record of a
substantial improvement in operating performance and Moody's
expectation that the company will reduce its leverage from peak
pro-forma levels. Moody's expects Debt to EBITDA (excluding the
effects of deferred revenue) to decline to about 6 times over the
next 12 to 15 months as deferred revenues are recognized in
income. Positive ratings consideration is also given to the
company's brand recognition and solid school penetration in the
market for educational practice and assessment software, large
base of active school customers, material and growing proportion
of recurring subscription-based revenues, and demonstrated ability
to grow orders despite weak macroeconomic conditions and
associated pressures on school budgets. The rating also benefits
from the company's improving EBITDA margins and favorable free
cash flow characteristics of its business model.
As a result of the proposed change from an all first lien capital
structure to a first lien/second lien structure, Moody's has
lowered the expected mean family recovery rate in a default
scenario to 50% from 65% and raised the probability of default
rating ("PDR") to B2-PD from B3-PD consistent with Moody's Loss
Given Default Methodology.
The negative outlook reflects Moody's view that while the
company's recent and substantial operating performance improvement
partially offsets the proposed increase in funded debt, the
resultant high leverage has the potential to reduce the company's
financial flexibility and ability to withstand changes to the
competitive environment, unless current performance levels are
sustained.
The ratings could be downgraded if weakening order trends or
increased competitive activity causes leverage on a debt to EBITDA
basis (Moody's adjusted and excluding the effect of deferred
revenues) to be sustained above 6.5 times and/or EBITDA less capex
coverage of interest (Moody's adjusted and excluding the effect of
deferred revenues) below 2.0 times . The ratings could also be
downgraded if free cash flow weakens to the low single digit
percentages of total debt or if the company pursues further
shareholder enhancement initiatives.
While a rating upgrade is unlikely given the company's lack of
product diversification, small scale and aggressive financial
policies, Moody's could consider an upgrade if Renaissance
organically grows its scale and broadens its product mix while
sustaining debt to EBITDA around 4.0 times (Moody's adjusted and
excluding the effect of deferred revenues), EBITDA less capex
coverage of interest expense (Moody's adjusted and excluding the
effect of deferred revenues) above 2.5 times, and free cash flow
to debt in excess of 10%.
The principal methodology used in this rating was the Global
Business & Consumer Service Industry Rating Methodology published
in October 2010. Other methodologies used include Loss Given
Default for Speculative-Grade Non-Financial Companies in the U.S.,
Canada and EMEA published in June 2009.
Renaissance Learning, Inc. is a provider of subscription based
educational practice and assessment software and school
improvement programs for pre-kindergarten through senior high
(pre-K-12) schools and districts. The company revenues were
approximately $147 million for the twelve months ended June 30,
2013 (adjusting for the write-off of deferred revenue).
RENAISSANCE LEARNING: S&P Rates $330MM Sr. Sec. Facilities 'B+'
---------------------------------------------------------------
Standard & Poor's Ratings Services said it affirmed its corporate
credit rating on Wisconsin Rapids, Wis.-based Renaissance Learning
Inc. S&P's outlook on the company remains stable.
S&P also assigned its 'B+' issue-level rating to Renaissance
Learning's $330 million senior secured credit facilities, which
consist of a $20 million revolving credit facility due 2018 and a
$310 million first-lien term loan facility due 2020. The recovery
rating on this debt is '2', indicating S&P's expectations of
substantial (70% to 90%) recovery in the event of payment default.
Additionally, S&P assigned its 'CCC+' issue-level rating to the
company's $120 million senior secured second-lien term loan
facility due 2021. The recovery rating on the debt is '6',
indicating S&P's expectations of negligible (0% to 10%) recovery
in the event of a payment default.
"The ratings on Renaissance Learning Inc. reflect its modest
position in a highly fragmented and niche overall instruction
materials market, federal and state government budget pressures,
and its high financial leverage, with debt to EBITDA of 7x at
close of the dividend recapitalization transaction, up from 4.8x
as of June 30, 2013," said Standard & Poor's credit analyst David
Tsui.
S&P views the company's business risk profile as "weak" and
financial risk profile as "highly leveraged." Renaissance
Learning's high rate of school penetration, highly recurring
subscription revenue base, and good free operating cash flow
(FOCF) characteristics partly offset these factors.
The stable outlook reflects Renaissance Learning's strong order
growth above the industry average growth rate, continued highly
recurring revenue base, and stable profitability, which drive
S&P's expectation that growth in EBITDA would lower leverage to
the mid-6x level or below by the end of 2014. S&P would lower the
rating if government budget concerns or competitive pressure
intensifies, leading to customer attrition, EBITDA decline, and
failure to lower leverage from the company's current level.
Although unlikely at this time, S&P would consider an upgrade if
the company and its sponsor change its aggressive financial policy
and commit to leverage below 5x, while continuing its growth path
and penetration of district-wide sales in the U.S.
RESIDENTIAL CAPITAL: Oct. 15 Trial in Battle vs. Jr. Noteholders
----------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Residential Capital LLC unsecured creditors came up
winners when a bankruptcy judge ruled at the end of last week on
several issues determining whether junior secured creditors are
fully secured and therefore entitled to interest on their claims.
According to the report, the battle won't be over until U.S.
Bankruptcy Judge Martin Glenn holds a 10-day trial beginning
Oct. 15 to decide whether junior noteholders are entitled to
payment in full, with interest. The issue in part includes a
decision about what is included in the collateral package.
The report notes that Judge Glenn ruled formally on Sept. 20 that
some of the noteholders' arguments don't hold water. The
noteholders contended their lien covers the $2.1 billion
settlement contribution being made by Ally Financial Inc.,
ResCap's non-bankrupt parent.
The report relates that Judge Glenn said the lien doesn't cover
the Ally contribution to the extent he later decides it's a
"commercial tort." Judge Glenn also ruled that the noteholders'
lien doesn't include lawsuit recoveries. The judge dismissed the
noteholders' argument that their indenture trustee's release of
collateral was invalid or ineffective. Judge Glenn said the
documents establish without need for trial that the release of
collateral was effective.
The report relays that ResCap, Ally's mortgage-servicing unit,
said the noteholders might have claims against the indenture
trustee, although not against the bankrupt estate. Most ResCap
creditors are on board with the reorganization plan, which comes
up for approval at a Nov. 19 hearing. It's financed in part by
the Ally settlement payment. The loudest voice in opposition has
been coming from an ad hoc group holding $714 million of the 9.625
percent junior notes.
The report discloses that holders of ResCap's $2.15 billion in
general unsecured claims are being told to expect a 36.3 percent
recovery, according to the disclosure statement. Unsecured
creditors with $2 billion in claims against the so-called GMACM
companies are predicted to have a 30.1 percent recovery.
The $1.1 billion in third-lien 9.625 percent secured notes due in
2015 last traded on Sept. 19 for 117.875 cents on the dollar,
according to Trace, the bond-price reporting system of the
Financial Industry Regulatory Authority. In January, the bonds
could have been purchased for 107 cents. The $473.4 million of
ResCap senior unsecured notes due in April 2013 traded at 11:40
a.m. on Sept. 20 for 32 cents on the dollar, a 36 percent increase
since Dec. 19, according to Trace.
About Residential Capital
Residential Capital LLC, the unprofitable mortgage subsidiary of
Ally Financial Inc., filed for bankruptcy protection (Bankr.
S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012.
Neither Ally Financial nor Ally Bank is included in the bankruptcy
filings.
ResCap, one of the country's largest mortgage originators and
servicers, was sent to Chapter 11 with 50 subsidiaries amid
"continuing industry challenges, rising litigation costs and
claims, and regulatory uncertainty," according to a company
statement.
ResCap disclosed $15.68 billion in assets and $15.28 billion in
liabilities at March 31, 2012.
Centerview Partners LLC and FTI Consulting are acting as financial
advisers to ResCap. Morrison & Foerster LLP is acting as legal
adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is
the conflicts counsel. Rubenstein Associates, Inc., is the public
relations consultants to the Company in the Chapter 11 case.
Morrison Cohen LLP is advising ResCap's independent directors.
Kurtzman Carson Consultants LLP is the claims and notice agent.
Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves
as counsel to Ally Financial.
ResCap sold most of the businesses for a combined $4.5 billion.
The Bankruptcy Court in November 2012 approved ResCap's sale of
its mortgage servicing and origination platform assets to Ocwen
Loan Servicing, LLC and Walter Investment Management Corporation
for $3 billion; and its portfolio of roughly 50,000 whole loans to
Berkshire Hathaway for $1.5 billion.
Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by affiliates of Residential Capital LLC and its
affiliates (http://bankrupt.com/newsstand/or 215/945-7000).
RG STEEL: Asks Court to Approve Settlement With ACI, et al.
-----------------------------------------------------------
RG Steel Wheeling, LLC asked U.S. Bankruptcy Judge Kevin Carey to
approve an agreement under which the company will receive payment
of $41,825 from ACI Const. Co., Inc.
The agreement requires ACI to pay the steel maker a sum of $41,825
for the materials it used for the construction of a new school
building in Rawson, Ohio.
ACI is also required to pay $75,900 to Falpeg Capital LLC, and
$31,493 to Quality Welding and Fabrication LLC. In return, Falpeg
Capital agreed to release its lien from the Rawson project. The
agreement is available for free at http://is.gd/HlMBqF
ACI was hired to oversee the construction of a new school building
for the Cory-Rawson Local School District Board of Education of
Rawson, Ohio. ACI purchased construction materials from Quality
Welding, which the latter obtained from the steel maker and from
Falpeg Capital.
RG Steel Wheeling LLC is represented by:
Shaunna Jones, Esq.
WILLKIE FARR & GALLAGHER LLP
787 7th Avenue
New York, NY 10019
Tel: (212) 728-8521
Fax: (212) 728-9521
E-mail: sjones@willkie.com
ACI Const. Co., Inc. is represented by:
John F. Kostyo, Esq.
Attorney at Law
Riverside Executive Suites
1100 East Main Cross Street
Suite 117, South Entrance
Findlay, Ohio 45840-6381
Tel: (614) 224-9001
E-mail: jfk@KostyoLaw.com
Falpeg Capital LLC is represented by:
David P. Holtkamp, Esq.
The Law Office of William J. Factor, Ltd.
105 W. Madison, Suite 1500
Chicago, IL 60602
Tel: (312) 878-0977
About RG Steel
RG Steel LLC -- http://www.rg-steel.com/-- is the United States'
fourth-largest flat-rolled steel producer with annual steelmaking
capacity of 7.5 million tons. It was formed in March 2011
following the purchase of three steel facilities located in
Sparrows Point, Maryland; Wheeling, West Virginia and Warren,
Ohio, from entities related to Severstal US Holdings LLC. RG
Steel also owns finishing facilities in Yorkville and Martins
Ferry, Ohio. It also owned Wheeling Corrugating Company and has a
50% ownership in Mountain State Carbon and Ohio Coatings Company.
RG Steel along with affiliates, including WP Steel Venture LLC,
sought bankruptcy protection (Bankr. D. Del. Lead Case No. 12-
11661) on May 31, 2012. Bankruptcy was precipitated by liquidity
shortfall and a dispute with Mountain State Carbon, LLC, and a
Severstal affiliate, that restricted the shipment of coke used in
the steel production process.
The Debtors estimated assets and debts in excess of $1 billion.
As of the bankruptcy filing, the Debtors owe (i) $440 million,
including $16.9 million in outstanding letters of credit, to
senior lenders led by Wells Fargo Capital Finance, LLC, as
administrative agent, (ii) $218.7 million to junior lenders, led
by Cerberus Business Finance, LLC, as agent, (iii) $130.5 million
on account of a subordinated promissory note issued by majority
owner The Renco Group, Inc., and (iv) $100 million on a secured
promissory note issued by Severstal.
Judge Kevin J. Carey presides over the case.
The Debtors are represented in the case by Robert J. Dehney, Esq.,
and Erin R. Fay, Esq., at Morris, Nichols, Arsht & Tunnell LLP,
and Matthew A. Feldman, Esq., Shaunna D. Jones, Esq., Weston T.
Eguchi, Esq., at Willkie Farr & Gallagher LLP, represent the
Debtors. Conway MacKenzie, Inc., serves as the Debtors' financial
advisor and The Seaport Group serves as lead investment banker.
Donald MacKenzie of Conway MacKenzie, Inc., as CRO. Kurtzman
Carson Consultants LLC is the claims and notice agent.
Wells Fargo Capital Finance LLC, as Administrative Agent, is
represented by Jonathan N. Helfat, Esq., and Daniel F. Fiorillo,
Esq., at Otterbourg, Steindler, Houston & Rosen, P.C.; and Laura
Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachuiski Stang
Ziehi & Jones LLP.
Renco Group is represented by lawyers at Cadwalader, Wickersham &
Taft LLP.
Kramer Levin Naftalis & Frankel LLP represents the Official
Committee of Unsecured Creditors. Huron Consulting Services LLC
serves as the Committee's financial advisor.
The Debtor has sold off the principal plants. The sale of the
Wheeling Corrugating division to Nucor Corp. brought in $7
million. That plant in Sparrows Point, Maryland, fetched the
highest price, $72.5 million. CJ Betters Enterprises Inc. paid
$16 million for the Ohio plant.
SCICOM DATA: U.S. Trustee Appoints 3-Member Creditors Committee
---------------------------------------------------------------
Daniel M. McDermott, the U.S. Trustee for Region 12, appointed
three creditors to serve in the Official Committee of Unsecured
Creditors in the Chapter 11 case of Scicom Data Services, Ltd.
The Committee consists of:
1. Wewco
Attn: Dipak Patel
1905 Wayzata Blvd Ste 120
Wayzata, MN 55391
Tel: (612) 870-9501
2. Roberts Business Form
Attn: Rick Moser
761 Dunlap St. N.
Arden Hills, MN 55112
Tel: (612) 290-7486
3. Pension Benefit Guaranty Company
Attn: Christine Tchoi
1200 K Street NW Suite 340
Washington, DC 2005
Tel: (202) 326-4000 ext. 3269
Dipak Patel of Wewco is designated as Acting Chairperson of said
Committee pending selection by the Committee members of a
permanent Chairperson.
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.
SHELF DRILLING: Moody's Assigns B2 Rating to New $450MM Term Loan
-----------------------------------------------------------------
Moody's Investors Service assigned a B2 rating to Shelf Drilling
Midco, Ltd.'s proposed offering of $450 million secured term loan.
Simultaneously, Moody's assigned a B1 Corporate Family Rating, a
B1-PD Probability of Default Rating and an SGL-2 Speculative Grade
Liquidity Rating to Midco, and withdrew the CFR and PDR of Shelf
Drilling Holdings, Ltd. (Holdings). Moody's also affirmed the B1
senior secured second-lien notes rating and the Ba1 senior secured
first-lien term loan rating of Holdings. The outlook was changed
to positive from stable.
Shelf Drilling Midco, Ltd. -- the issuer of the new term loan - is
a holding company that owns all of the equity interest in Shelf
Drilling Intermediate, LTD. (Intermediate), which in turn owns
100% of Shelf Drilling Holdings, Ltd (together "Shelf"). Holdings
owns all of the operating rig assets and related liabilities,
other than the proposed term loan and the preferred shares
previously issued to Transocean during the company's formation (by
Intermediate) in November 2012. Net proceeds from this debt
offering will be used to repay Intermediate's preferred shares
(approximately $215 million) and to pay a dividend to Shelf's
private equity owners (approximately $225 million).
Assignments:
Issuer: Shelf Drilling Midco, Ltd.
Corporate Family Rating, Assigned B1
Probability of Default Rating, Assigned B1-PD
Speculative Grade Liquidity Rating, Assigned SGL-2
Senior Secured Bank Credit Facility, Assigned B2, LGD5, 70 %
Affirmations:
Issuer: Shelf Drilling Holdings, Ltd.
Senior Secured Bank Credit Facility May 30, 2018, Affirmed Ba1,
LGD1, 2 %
Senior Secured Regular Bond/Debenture Nov 1, 2018, Affirmed B1,
LGD3, 42 %
Outlook Actions:
Issuer: Shelf Drilling Holdings, Ltd.
Outlook, Changed To Positive from Stable
Issuer: Shelf Drilling Midco, Ltd.
Assigned Positive Outlook
Withdrawals:
Issuer: Shelf Drilling Holdings, Ltd.
Corporate Family Rating, Withdrawn, previously rated B1
Probability of Default Rating, Withdrawn, previously rated B1-PD
Ratings Rationale:
The B2 rating on Midco's secured term loan reflects its
structurally subordinated claim to Shelf's assets behind the $75
million senior secured first-lien term loan and $475 million
senior secured second-lien notes at Holdings which directly owns
all the operating rig companies. The proposed term loan will be
secured by all existing and future assets of Midco, including
Midco's equity interest in Intermediate and by the pledge of Shelf
Drilling Ltd.'s (Parent Holdco) shareholder interest in Midco. The
Midco term loan will not have any upstream guarantee from
Holdings. There are no material liabilities at Midco, Intermediate
or the Parent Holdco other than the proposed $450 million term
loan at Midco.
The ratings for the existing secured term loan (Ba1) and secured
notes (B1) were unchanged because essentially all of the new term
loan proceeds will be used to refinance preferred equity and fund
a shareholder distribution providing minimal benefit and credit
uplift to existing lenders at Holdings. Hence, Moody's overrode
the results of its Loss Given Default Methodology.
The positive outlook reflects Shelf's substantial progress towards
gaining operational independence from Transocean, strong uptime
utilization of its rig fleet (99% to date), increased backlog and
extension of contract tenor, and a generally robust shallow-water
dayrate environment since Moody's initial rating assignment in
October, 2012.
The B1 CFR reflects Shelf Drilling's large jackup fleet considered
as one of the world's largest, leading position is some of the
most active shallow-water markets globally, excellent cash flow
diversification across 33 rigs, strong rig utilization since
inception, significant contract coverage through 2014, and well-
diversified customer base comprised of national and international
oil companies that tend to have more durable drilling program and
superior capital resources. The B1 CFR is held back by Shelf
Drilling's short corporate history as a standalone jackup
operator, singular exposure to the volatile jackup sector, limited
contract coverage beyond 2014, and older generation rig fleet that
may entail substantial future investments to keep the acquired
assets competitive and marketable. The rating also considers its
private equity owners that are taking a large dividend 11 months
into operation, the operational complexity inherent in the
management of a large international company with presence in
multiple jurisdictions with varying degree of legal, environmental
and tax requirements, and the potential supply side risks given
the significant number of high specification jackup rigs that are
currently under construction for delivery through 2015.
Shelf Drilling will generate free cash flow and have good
liquidity through 2014 and will be able to fund all of its cash
needs from internal sources which is captured in the SGL-2 rating.
The company had $397 million of cash as of June 30, 2013. Moody's
does not anticipate any major upgrade/acquisition capex or
shareholder distributions over the next fifteen months leaving its
cash balance largely intact. However, liquidity needs will grow in
2015 as Transocean's letters of credit, surety bonds and
performance guarantee supports are assigned to Shelf Drilling.
Shelf does not have any revolving credit facility but has a $50
million credit facility to issue cash collateralized Letters of
Credit.
An upgrade will require a commitment to conservative financial
policies, superior financial reporting, strong contact coverage
over the forward 18 months, and full operational independence from
Transocean. An upgrade is possible if leverage can be sustained
near 2x.
Weak fleet utilization in a declining dayrate environment or a
leveraging transaction would pose the greatest threat to ratings.
If the debt/EBITDA ratio approaches 4x, Shelf Drilling's ratings
could be downgraded.
The principal methodology used in this rating was the Global
Oilfield Services Rating Methodology published in December 2009.
Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.
Shelf Drilling Holdings, Ltd., incorporated in the Cayman Islands,
is an international shallow water offshore drilling contractor
engaged in the drilling and completion of exploratory and
developmental offshore oil and natural gas wells.
SINCLAIR TELEVISION: Moody's Rates 1st Lien Debt Facilities Ba1
---------------------------------------------------------------
Moody's Investors Service assigned Ba1 ratings to Sinclair
Television Group, Inc.'s proposed credit facilities, including a
$150 million 1st lien sr secured revolver (reflects increase of
$50 million), an incremental $200 million 1st lien sr secured term
loan A, and an incremental $1 billion 1st lien sr secured term
loan B. Proceeds from the new term loans will be used to fund
acquisitions and general corporate purposes which may include the
redemption of the 9.25% 2nd lien sr secured notes. Roughly $1.0
billion of the term loan commitments are expected to be drawn
within 210 days after closing of the amended credit facility
(delayed takedown) to fund the acquisition of Allbritton
Communications. In addition, Moody's downgraded STG's existing
bank credit facilities to Ba1 reflecting the revised debt mix
including the increase of 1st lien debt by $1.2 billion. Moody's
affirmed Sinclair Broadcast Group, Inc.'s ("Sinclair") Ba3
Corporate Family Rating , Ba3-PD Probability of Default Rating ,
and ratings on the company's senior notes. The SGL - 2 Speculative
Grade Liquidity (SGL) Rating was affirmed and the outlook remains
stable.
Assigned:
Issuer: Sinclair Television Group, Inc.,
1st Lien Sr Secured Revolver (increased to $150 million from
$100 million): Assigned Ba1, LGD2 -- 25%
INCREMENTAL $200 million 1st Lien Sr Secured Term Loan A:
Assigned Ba1, LGD2 -- 25%
INCREMENTAL $1,000 million 1st Lien Sr Secured Term Loan B:
Assigned Ba1, LGD2 -- 25%
Downgraded:
Issuer: Sinclair Television Group, Inc.
EXISTING $500 million 1st Lien Sr Secured Term Loan A due 2018:
Downgraded to Ba1, LGD2 -- 25% from Baa3, LGD2 -- 13%
EXISTING $400 million 1st Lien Sr Secured Term Loan B due 2020:
Downgraded to Ba1, LGD2 -- 25% from Baa3, LGD2 -- 13%
Affirmed:
Issuer: Sinclair Broadcast Group, Inc.
Corporate Family Rating: Affirmed Ba3
Probability of Default Rating: Affirmed Ba3-PD
Speculative Grade Liquidity Rating: Affirmed SGL -- 2
4.875% convertible sr notes due 2018 ($6 million outstanding):
Affirmed B2, LGD6 -- 97%
Issuer: Sinclair Television Group, Inc.
9.25% 2nd lien sr secured notes due 2017 ($500 million
outstanding): Affirmed Ba3, LGD4 -- 60% (from LGD3 -- 42%)
8.375% convertible sr notes due 2018 ($238 million
outstanding): Affirmed B1, LGD5 -- 80% (from LGD5 -- 78%)
5.375% sr notes due 2021($600 million outstanding): Affirmed
B1, LGD5 -- 80% (from LGD5 -- 78%)
6.125% sr notes due 2022 ($500 million outstanding): Affirmed
B1, LGD5 -- 80% (from LGD5 -- 78%)
Outlook Actions:
Issuer: Sinclair Broadcast Group, Inc.
Outlook is Stable
Issuer: Sinclair Television Group, Inc.
Outlook is Stable
Ratings Rationale:
Sinclair's Ba3 Corporate Family Rating reflects moderately high
leverage with a 2-year average debt-to-EBITDA ratio of 5.3x
estimated for FYE 2013 (including Moody's standard adjustments, or
5.0x net of cash) and pro forma for announced acquisitions,
including Barrington and Allbritton. The pending transactions
represent Sinclair's latest debt funded investment to expand its
footprint of U.S. households while further diversifying revenues
by geography, network affiliations, and market size. Ratings
incorporate mid-single digit percentage revenue declines in 2013,
on a same store basis, due to the absence of significant political
ad spending only partially offset by low single digit percentage
growth in core ad revenues and increases in retransmission fees.
Despite higher levels of SG&A and production expenses, including
reverse compensation, Moody's expects EBITDA margins to remain
above 32%-33% (including Moody's standard adjustments) generated
by the company's sizable and diverse television station group with
a focus on operating multiple primary television stations in a
market using duopolies and Local Marketing Agreements. Moody's
also expects management will achieve most of its planned
acquisition synergies for Barrington and Allbritton soon after the
transactions close given cash flow benefits are primarily from
contractual retransmission fees and despite the need to assimilate
recently acquired stations from Cox and Fisher Communications.
Notwithstanding Moody's base case scenario for overall revenue
declines in 2013, on a same store basis, Moody's believes 2-year
average leverage ratios could improve over the next 12 months as
excess cash would be used to reduce credit facility balances or
prepay maturing notes, absent acquisitions.
Moody's believes Sinclair is likely to acquire additional
television stations over the next 12 months resulting in increased
debt balances consistent with management's stated acquisition
strategy. The Ba3 rating and stable outlook reflect Moody's
expectation that, despite the potential for additional debt
financed purchases, the company will sustain pro forma 2-year
average debt-to-EBITDA ratios below 5.50x allowing for financial
metrics to be better positioned within the Ba3 category. Ratings
incorporate moderately high financial risk, the inherent
cyclicality of the broadcast television business, increasing media
fragmentation, and potential challenges related to management's
acquisition strategy. The SGL-2 liquidity rating reflects good
liquidity and generally full availability under the increased
revolver.
The stable outlook reflects Moody's expectation that core revenues
will grow in the low single digit percentage range over the next
12 months with additional increases in retransmission fees
(increasingly offset by higher levels of production expense,
including reverse compensation), but the lack of significant
political ad demand will result in overall revenue declines in
FY2013 on a same store basis. In the absence of additional
acquisitions, Moody's believes Sinclair would apply free cash flow
to reduce debt balances in excess of required term loan
amortization contributing to improved leverage and greater free
cash flow. Ratings could be downgraded if 2-year average debt-to-
EBITDA ratios exceed 5.50x (incorporating Moody's standard
adjustments) or if distributions, share repurchases or
deterioration in operating performance results in free cash flow-
to-debt ratios falling below 4%. Ratings could also be downgraded
if liquidity deteriorates due to dividends, share buybacks, debt
financed acquisitions, or decreased EBITDA cushion to financial
covenants. Although not likely in the next 12 months given
management's acquisition strategy, ratings could be upgraded if
Sinclair's 2-year average debt-to-EBITDA ratios are sustained
comfortably below 4.25x with good liquidity including free cash
flow-to-debt ratios in the high single digit range. Management
would also need to show a commitment to financial policies
consistent with the higher rating.
The Allbritton transaction will add seven ABC affiliates, covering
4.9% of U.S. TV households, and NewsChannel 8, a 24-hour
cable/satellite news network. The seven ABC Network affiliates
from Allbritton (seven markets ranked #8 to #98) will add to
Sinclair's growing portfolio and national footprint improving
geographic and affiliate diversity. The addition of NewsChannel 8,
a 24-hour local cable/satellite news network which provides news,
weather, sports and local information to over 2 million households
in the Washington D.C. metropolitan area, gives Sinclair the
opportunity to share the content of NewsChannel 8 with the
company's existing news stations and provides expansion
opportunities into other markets. To comply with FCC local
television ownership rules, the company expects to sell existing
stations in Birmingham, AL (CW and MNT affiliates),
Harrisburg/Lancaster/Lebanon/York, PA (CBS), and Charleston, SC
(MNT), but provide sales and other non-programming support
services to each of these stations under shared services and joint
sales agreements.
The principal methodology used in these ratings was the Global
Broadcast and Advertising Related Industries Methodology published
in May 2012. Other methodologies used include Loss Given Default
for Speculative-Grade Non-Financial Companies in the U.S., Canada
and EMEA published in June 2009.
Sinclair Broadcast Group, Inc., headquartered in Hunt Valley, MD,
and founded in 1986, is a television broadcaster, operating,
programming or providing sales services to 156 stations in 76
markets pro forma for announced transactions. The station group
will reach 38.2% of U.S. television households and include 37 FOX,
29 ABC, 26 CBS, 23 CW, 20 MNT, 14 NBC, 5 Univision, one
independent, and one Azteca affiliates. Members of the Smith
family exercise control over most corporate matters given they
represent four of the eight board seats and, through Sinclair's
dual class share structure, the Smith family controls
approximately 82% of voting rights. Pro forma for all announced
transactions, net broadcast revenues for the 12 months ended
December 31, 2012 totaled $2.0 billion.
SOUTH FLORIDA SOD: Barfield Approved as Auctioneer
--------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida
authorized South Florida Sod, Inc., to employ Barfield
Auctions, Inc., to auction off 2110 acres in Little Ocmulgee
River, Lumber City, Wheeler County, Georgia.
As reported in the Troubled Company Reporter on September 10,
2013, Barfield Auctions will be paid 10% of the bid amount in the
form of a buyer's premium, plus advertising and promotion expenses
of $5,725.00, to be paid to the seller. The Debtor paid the
$5,725 advertising and promotion expenses prior to the Petition
Date.
About South Florida Sod
South Florida Sod Inc., a sod farmer, filed for Chapter 11
protection (Bankr. M.D. Fla. Case No. 13-08466) on July 9,
2013, in Orlando, Florida.
South Florida Sod estimated at least $10 million in assets and
liabilities. The company owns 13 properties in Florida and three
other states, including a 5,777-acre property in Sarasota County,
Florida, with a claimed value of $20 million or more. Secured
debt totals $23.5 million, not including a $1.6 million judgment.
Latham Shuker Eden & Beaudine, LLP, originally represented the
Debtor as counsel. Latham Shuker was later replaced by Frank M.
Wolff, Esq., at Wolff, Hill, McFarlin & Herron, P.A.
South Florida Sod also tapped Daniel Dempsey as its financial
advisor. Wallace T. Long, Jr., CPA and Lynch, Johnson & Long,
CPA, serve as accountants.
SOUTH FLORIDA SOD: Daniel Dempsey Okayed as Financial Advisor
-------------------------------------------------------------
South Florida Sod, Inc., obtained approval from the Bankruptcy
Court to employ Daniel Dempsey as its financial advisor.
As reported in the Troubled Company Reported on August 28, 2013,
Daniel Dempsey was selected because the firm (i) has considerable
experience in matters of this nature; (ii) is well-qualified to
provide the necessary services for the Debtor; (iii) is a
certified public accountant; and (iv) has served as a plan
administrator in a Chapter 11 before the Court.
The firm will, among other things, (a) assist in the preparation
of the U.S. Trustee financial reports and other filings required
by the Court; (b) assist in preparing and filing the required
federal and state tax returns on behalf of the Debtor; (c)
evaluate the Debtor's financial condition; (d) assist in preparing
the Debtor's Plan of Reorganization and Disclosure Statement; and
(e) attend at meetings with the Debtor, its creditors and the
attorneys of those parties.
The Debtor had proposed to pay to the financial advisor a retainer
in the amount of $7,500 as security for payment for services.
About South Florida Sod
South Florida Sod Inc., a sod farmer, filed for Chapter 11
protection (Bankr. M.D. Fla. Case No. 13-08466) on July 9,
2013, in Orlando, Florida.
South Florida Sod estimated at least $10 million in assets and
liabilities. The company owns 13 properties in Florida and three
other states, including a 5,777-acre property in Sarasota County,
Florida, with a claimed value of $20 million or more. Secured
debt totals $23.5 million, not including a $1.6 million judgment.
Latham Shuker Eden & Beaudine, LLP, originally represented the
Debtor as counsel. Latham Shuker was later replaced by Frank M.
Wolff, Esq., at Wolff, Hill, McFarlin & Herron, P.A.
South Florida Sod also tapped Daniel Dempsey as its financial
advisor. Wallace T. Long, Jr., CPA and Lynch, Johnson & Long,
CPA, serve as accountants. Barfield Auctions, Inc., serves as its
auctioneer.
SOUTH FLORIDA SOD: Gets OK to Hire John Moore as Special Counsel
----------------------------------------------------------------
The Bankruptcy Court authorized South Florida Sod, Inc., to employ
John Edward Moore, III, and Rossway Moore Swan, P.L., as its
special counsel.
As reported in the Troubled Company Reporter on August 29, 2013,
the Debtor said it intends to sell several of its properties and
will need legal representation to complete the sales. Mr. Moore
has been selected because he has experience in matters of this
nature, and is well qualified to provide the necessary services to
the Debtor. He is also familiar and has represented the Debtor in
various transactions prepetition.
About South Florida Sod
South Florida Sod Inc., a sod farmer, filed for Chapter 11
protection (Bankr. M.D. Fla. Case No. 13-08466) on July 9,
2013, in Orlando, Florida.
South Florida Sod estimated at least $10 million in assets and
liabilities. The company owns 13 properties in Florida and three
other states, including a 5,777-acre property in Sarasota County,
Florida, with a claimed value of $20 million or more. Secured
debt totals $23.5 million, not including a $1.6 million judgment.
Latham Shuker Eden & Beaudine, LLP, originally represented the
Debtor as counsel. Latham Shuker was later replaced by Frank M.
Wolff, Esq., at Wolff, Hill, McFarlin & Herron, P.A.
South Florida Sod also tapped Daniel Dempsey as its financial
advisor. Wallace T. Long, Jr., CPA and Lynch, Johnson & Long,
CPA, serve as accountants. Barfield Auctions, Inc., serves as its
auctioneer.
SOUTH FLORIDA SOD: Wallace T. Long Approved as Accountants
----------------------------------------------------------
South Florida Sod, Inc., obtained a court order authorizing it to
employ Wallace T. Long, Jr., CPA and Lynch, Johnson & Long, CPA as
its accountants, to prepare its 2012 income tax returns.
As reported in the Troubled Company Reporter on September 10,
2013, the Accountant will be paid its fees and costs for the
accounting services estimated at not more than $9,000.00. The
hourly rates of the firm's accountants are:
Wallace T. Long, Jr., CPA $150.00
Richard L. Lynch, CPA $210.00
George Johnson CPA $175.00
Tom Long, CPA $130.00
Rhonda Stine $120.00
Debi Blair $120.00
About South Florida Sod
South Florida Sod Inc., a sod farmer, filed for Chapter 11
protection (Bankr. M.D. Fla. Case No. 13-08466) on July 9,
2013, in Orlando, Florida.
South Florida Sod estimated at least $10 million in assets and
liabilities. The company owns 13 properties in Florida and three
other states, including a 5,777-acre property in Sarasota County,
Florida, with a claimed value of $20 million or more. Secured
debt totals $23.5 million, not including a $1.6 million judgment.
Latham Shuker Eden & Beaudine, LLP, originally represented the
Debtor as counsel. Latham Shuker was later replaced by Frank M.
Wolff, Esq., at Wolff, Hill, McFarlin & Herron, P.A.
South Florida Sod also tapped Daniel Dempsey as its financial
advisor. Wallace T. Long, Jr., CPA and Lynch, Johnson & Long,
CPA, serve as accountants. Barfield Auctions, Inc., serves as its
auctioneer.
STOCKTON, CA: Citizens May Sue Over Tax Hike Balloting
------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the Stockton, California, municipal bankruptcy
doesn't bar citizens from suing in state court seeking to modify a
ballot statement describing a proposed tax increase up for a vote
in November.
According to the report, U.S. Bankruptcy Judge Christopher M.
Klein, who ruled in June that Stockton is eligible for Chapter 9,
said that state court proceedings on the election dispute aren't
barred by the so-called automatic stay arising from the city's
municipal bankruptcy begun 15 months ago.
The report notes that opponents of the tax can try to modify the
ballot statement in state court because they agreed to "forswear
all monetary relief," Judge Klein said in his Sept. 17 opinion.
Stockton didn't oppose allowing the suit. The city was concerned
that the citizens request in the suit for "other and further
relief" might end up with the assertion of claims against the city
or its officials.
The report relates that the concern was allayed by the plaintiffs'
agreement to pursue no other claims. Wording of the ballot
statement is important because general tax increases require only
majority voter approval. If it's a "special tax," a two-thirds
vote is required. Judge Klein said election-law disputes over tax
increases are a "cottage industry" in California.
The report discloses that for bankruptcy specialists, Judge
Klein's opinion is interesting reading given its exegesis on the
meaning of the word "claim." With a population of about 300,000,
Stockton was the largest U.S. city to pursue municipal bankruptcy
before Detroit took the plunge.
About Stockton, Calif.
The City of Stockton, California, filed a Chapter 9 petition
(Bankr. E.D. Cal. Case No. 12-32118) in Sacramento on June 28,
2012, becoming the largest city to seek creditor protection in
U.S. history. The city was forced to file for bankruptcy after
talks with bondholders and labor unions failed. Stockton
estimated more than $1 billion in assets and in excess of
$500 million in liabilities.
The city, with a population of about 300,000, identified the
California Public Employees Retirement System as the largest
unsecured creditor with a claim of $147.5 million for unfunded
pension costs. In second place is Wells Fargo Bank NA as trustee
for $124.3 million in pension obligation bonds. The list of
largest creditors includes $119.2 million owing on four other
series of bonds.
The city is being represented by Marc A. Levinson, Esq., and John
W. Killeen, Esq., at Orrick, Herrington & Sutcliffe LLP. The
petition was signed by Robert Deis, city manager.
Mr. Levinson also represented the city of Vallejo, Cal. in its
2008 bankruptcy. Vallejo filed for protection under Chapter 9
(Bankr. E.D. Cal. Case No. 08-26813) on May 23, 2008, estimating
$500 million to $1 billion in assets and $100 million to $500
million in debts in its petition. In August 2011, Vallejo was
given green light to exit the municipal reorganization. The
Vallejo Chapter 9 plan restructures $50 million of publicly held
debt secured by leases on public buildings. Although the Plan
doesn't affect pensions, it adjusts the claims and benefits of
current and former city employees. Bankruptcy Judge Michael
McManus released Vallejo from bankruptcy on Nov. 1, 2011.
The bankruptcy judge on April 1, 2013, ruled that the city of
Stockton is eligible for municipal bankruptcy in Chapter 9.
STOCKTON, CA: To Present Draft of Repayment Plan Friday
-------------------------------------------------------
Jim Christie, writing for Reuters, reports that Stockton,
California, will present a draft plan on Sept. 27 to adjust its
debt while it keeps negotiating with bondholders, Marc Levinson,
Esq., a lawyer for the city, told Reuters on Tuesday.
According to the report, Mr. Levinson said Stockton's city council
will review the draft next week and a final version could be filed
with the U.S. Bankruptcy Court in Sacramento on or shortly after
Oct. 4.
According to Reuters, Mr. Levinson later told U.S. Bankruptcy
Judge Christopher Klein during a hearing on Stockton's Chapter 9
municipal bankruptcy case that it was not clear whether agreements
with bondholders would be part of the plan. But Mr. Levinson
added he was hopeful ongoing confidential talks with Stockton's
capital markets creditors will lead to agreements with them.
"Mediation is moving the ball forward," Mr. Levinson said,
according to the report.
Reuters also reports that at the hearing on Tuesday, Judge Klein
said he is prepared to hear arguments over Stockton's decision to
keep whole its payments to the California Public Employees'
Retirement System and not to bond holders. Judge Klein will
ultimately decide if the plan meets other bankruptcy law
requirements to go into effect.
About Stockton, Cal.
The City of Stockton, California, filed a Chapter 9 petition
(Bankr. E.D. Cal. Case No. 12-32118) in Sacramento on June 28,
2012, becoming the largest city to seek creditor protection in
U.S. history. The city was forced to file for bankruptcy after
talks with bondholders and labor unions failed. Stockton
estimated more than $1 billion in assets and in excess of
$500 million in liabilities.
The city, with a population of about 300,000, identified the
California Public Employees Retirement System as the largest
unsecured creditor with a claim of $147.5 million for unfunded
pension costs. In second place is Wells Fargo Bank NA as trustee
for $124.3 million in pension obligation bonds. The list of
largest creditors includes $119.2 million owing on four other
series of bonds.
The city is being represented by Marc A. Levinson, Esq., and John
W. Killeen, Esq., at Orrick, Herrington & Sutcliffe LLP. The
petition was signed by Robert Deis, city manager.
Mr. Levinson also represented the city of Vallejo, Cal. in its
2008 bankruptcy. Vallejo filed for protection under Chapter 9
(Bankr. E.D. Cal. Case No. 08-26813) on May 23, 2008, estimating
$500 million to $1 billion in assets and $100 million to $500
million in debts in its petition. In August 2011, Vallejo was
given green light to exit the municipal reorganization. The
Vallejo Chapter 9 plan restructures $50 million of publicly held
debt secured by leases on public buildings. Although the Plan
doesn't affect pensions, it adjusts the claims and benefits of
current and former city employees. Bankruptcy Judge Michael
McManus released Vallejo from bankruptcy on Nov. 1, 2011.
The bankruptcy judge on April 1, 2013, ruled that the city of
Stockton is eligible for municipal bankruptcy in Chapter 9.
STOCKTON, CA: Has Tentative Agreement With Ice Hockey Team
----------------------------------------------------------
Jim Christie, writing for Reuters, reports that Stockton,
California, after a hearing on Sept. 24, said in a statement that
it had reached a tentative agreement with the local ice hockey
team, Stockton Thunder, that would raise revenue for the city and
reduce its payments for arena operations by approximately $200,000
a year. The agreement will be included in the city's debt plan.
About Stockton, Cal.
The City of Stockton, California, filed a Chapter 9 petition
(Bankr. E.D. Cal. Case No. 12-32118) in Sacramento on June 28,
2012, becoming the largest city to seek creditor protection in
U.S. history. The city was forced to file for bankruptcy after
talks with bondholders and labor unions failed. Stockton
estimated more than $1 billion in assets and in excess of
$500 million in liabilities.
The city, with a population of about 300,000, identified the
California Public Employees Retirement System as the largest
unsecured creditor with a claim of $147.5 million for unfunded
pension costs. In second place is Wells Fargo Bank NA as trustee
for $124.3 million in pension obligation bonds. The list of
largest creditors includes $119.2 million owing on four other
series of bonds.
The city is being represented by Marc A. Levinson, Esq., and John
W. Killeen, Esq., at Orrick, Herrington & Sutcliffe LLP. The
petition was signed by Robert Deis, city manager.
Mr. Levinson also represented the city of Vallejo, Cal. in its
2008 bankruptcy. Vallejo filed for protection under Chapter 9
(Bankr. E.D. Cal. Case No. 08-26813) on May 23, 2008, estimating
$500 million to $1 billion in assets and $100 million to $500
million in debts in its petition. In August 2011, Vallejo was
given green light to exit the municipal reorganization. The
Vallejo Chapter 9 plan restructures $50 million of publicly held
debt secured by leases on public buildings. Although the Plan
doesn't affect pensions, it adjusts the claims and benefits of
current and former city employees. Bankruptcy Judge Michael
McManus released Vallejo from bankruptcy on Nov. 1, 2011.
The bankruptcy judge on April 1, 2013, ruled that the city of
Stockton is eligible for municipal bankruptcy in Chapter 9.
STRATHMORE GROUP: Case Summary & Unsecured Creditor
---------------------------------------------------
Debtor: Strathmore Group
37-06 69th Street
Woodside, NY 11377
Tel: (973) 543-5301
Bankruptcy Case No.: 13-45669
Chapter 11 Petition Date: September 18, 2013
Court: U.S. Bankruptcy Court
Eastern District of New York (Brooklyn)
Judge: Nancy Hershey Lord
Debtor's Counsel: Laura M. Rys, Esq.
RYS LAW GROUP, LLP
7 West Main Street
Mendham, NJ 07945
Tel: (973) 543-5301
Fax: (973) 543-5140
E-mail: laura@ryslaw.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The petition was signed by Nikolaos Hiletzaris, managing member.
The Company?s list of its largest unsecured creditors contains
only one entry:
Entity Nature of Claim Claim Amount
------ --------------- ------------
NZ Fuel Oil Co. Utility Bill $66,020
229 Withers Street
Brooklyn, NY
T-L BRYWOOD: Defends Exclusivity Extension Bid
----------------------------------------------
T-L Brywood LLC replied to RCG-KC Brywood LLC's objection to the
Debtor's motion to extend the period to solicit acceptances for
the Joint Plan of Reorganization.
According to the Debtors, among other things:
1. the probability of confirmation of a plan in a reasonable
time is not an issue in determining whether to extend the
solicitation exclusive period, and the relevant factors
establish that a further extension of the solicitation
exclusive period is warranted;
2. substantive consolidation is not warranted because the
debtors are separate entities; and
3. RCG does not have the burden of showing that it would be
prejudiced by substantive consolidation.
RCG-KC Brywood, LLC, successor by assignment to The PrivateBank &
Trust Company, by and through Thomas M. Lombardo --
tlombardo@ginsbergjacobs.com -- of Ginsberg Jacobs LLC, has
requested that the Court reject the Debtor's Joint Disclosure
Statement.
As reported in the Troubled Company Reporter on Aug. 30, 2013,
the Debtor asked the Court to overrule the limited objection of
RCG-KC Brywood to the approval of the Disclosure Statement
proposed in conjunction with the related Debtors.
The Debtor explained that, among other things:
1. The Debtors are entitled to seek and obtain substantive
consolidation of their estates pursuant to the Joint Plan.
The substantive consolidation will not prejudice RCG and
will benefit Brywood and its creditors, including RCG.
2. The use of substantive consolidation as a means for
implementing the Joint Plan is permissible under Section
1123(a)(5)(C) of the Bankruptcy Code.
As reported in the TCR on Aug. 20, 2013, RCG-KC Brywood filed a
limited objection asking the Court to deny approval of the Joint
Disclosure Statement explaining the Debtor's Plan.
A summary of the Plan was reported in the TCR on June 26, 2013.
According to the Disclosure Statement, the Plan provides for full
payment of Class 1 Claim of RCG-KC Brywood, Class 2 Claim of
CT Bank, Class 6 Claim of JC Collector, and Class 7 Claim of The
Conyers Tax Collectors.
Classes 3 to 5 Claim of CT Bank will receive monthly interest
payments until the claim is paid in full.
Class 8 Claim of the Smyrna Tax Collectors will be paid in full in
cash on the Effective Date or soon as practicable thereafter.
The Plan is premised upon the deemed substantive consolidation of
the Debtors solely for purposes of implementing the Plan,
including for purposes of voting, confirmation, distributions to
creditors and administration. On the Effective Date, and for Plan
implementation purposes only:
1. the assets and liabilities of each of the Debtors will be
treated as though such assets and liabilities were assets
and liabilities of a single entity;
2. the collective cash flow of all of the Debtors maybe
utilized to pay for the operating expenses and the payments
required under the plan for all Debtors; and
3. inter-Debtor claims as of the filing of the Chapter 11
cases, if any, are extinguished.
A copy of the Disclosure Statement is available for free at
http://bankrupt.com/misc/T-L_BRYWOOD_ds.pdf
About T-L Brywood
T-L Brywood LLC filed for Chapter 11 bankruptcy (Bankr. N.D. Ill.
Case No.12-09582) on March 12, 2012. T-L Brywood owns and
operates a commercial shopping center known as the "Brywood
Centre" -- http://www.brywoodcentre.com/-- in Kansas City,
Missouri. The Property encompasses roughly 25.6 acres and
comprises 183,159 square feet of retail space that is occupied by
12 operating tenants. The occupancy rate for the Property is
approximately 80%.
The Debtor and lender The PrivateBank and Trust Company reached an
impasse over the terms and conditions of another extension of a
mortgage loan on the Property. As a result, the Debtor filed the
Chapter 11 case to protect the Property from foreclosure while the
Debtor formulates an exit strategy from the reorganization case.
As of the Petition Date, no foreclosure relating to the Property
had been filed by the Lender.
Judge Donald R. Cassling oversees the case. The Debtor is
represented by David K. Welch, Esq., Arthur G. Simon, Esq., and
Jeffrey C. Dan. Esq., at Crane, Heyman, Simon, Welch & Clar, in
Chicago.
The Debtor disclosed total assets of $16,666,257 and total
liabilities of $13,970,622 in its schedules. The petition was
signed by Richard Dube, president of Tri-Land Properties, Inc.,
manager.
PrivateBank is represented by William J. Connelly, Esq., at
Hinshaw & Culbertson LLP.
No committee of creditors was appointed by the U.S. Trustee.
TEN SAINTS: Court Confirms Plan of Reorganization
-------------------------------------------------
The U.S. Bankruptcy Court for the District of Nevada confirmed on
Sept. 4, 2013, Ten Saints LLC's Second Amended Plan of
Reorganization dated Aug. 30, 2013. Likewise, the Amended and
Restated Loan Documents are approved in their entirety.
A copy of the Confirmation Order is available at:
http://bankrupt.com/misc/tensaints.doc324.pdf
Pursuant to the Second Amended Plan, on the Effective Date, the
Amended and Restated Loan Documents will be executed by
Reorganized Debtor and, to the extent applicable, delivered to
Secured Lender.
Class 1 consists of the Allowed Secured Lender {Wells Fargo, N.A.)
Claim. The A Note ($9,435,000) will be receive interest-only
payments during the first 12 months, plus the excess cash flow
payments set forth in Section 5 of the A Note and Section 8.3 of
the Loan Agreement. Thereafter, the Secured Lender will receive
monthly principal and interest payments amortized over a period of
twenty (20) years, plus the excess cash flow payments set forth in
Section 5 of the A Note and Section 8.3 of the Loan Agreement.
The unpaid balance of the A Note will be due and payable on the
fifth (5th) anniversary of the Effective Date.
Payments on the B Note ($4,765,884.17) will be made from
Reorganized Debtor's excess cash flow in accordance with Section 4
of the B Note and Section 8.3 of the Loan Agreement. The unpaid
balance of the B Note will be due and payable on the fifth (5th)
anniversary of the Effective Date.
General Unsecured Claims in Class 4 will be paid in full
with interest at the Unsecured Interest Rate, which is 3%
per annum, through Distributions tendered by Reorganized Debtor.
On the Effective Date, the Holders of Equity Securities of Debtor
shall retain all of their legal interests.
A copy of the Second Amended Plan is available at:
http://bankrupt.com/misc/tensaints.doc317.pdf
About Ten Saints
Four related Las Vegas, Nevada-based entities sought Chapter 11
bankruptcy protection on July 13, 2011. The businesses are owned
or managed by local business people and firms, including Todd
Nigro, Nigro Development LLC, a Nigro family trust and other
investors.
Horizon Village Square LLC (Bankr. D. Nev. Case No. 11-21034) owns
the Vons-anchored Horizon Village Square Shopping Center near
I-515 and Horizon Drive in Henderson. The property includes five
retail buildings with nearly 43,000 square feet of space.
Ten Saints LLC (Bankr. D. Nev. Case No. 11-21028) owns the 134-
room Hampton Inn & Suites at St. Rose Parkway and Seven Hills
Drive in Henderson.
Beltway One Development Group LLC (Bankr. D. Nev. Case No. 11-
21026) owns the Desert Canyon Business Park at Russell Road and
the Las Vegas Beltway. It has two buildings and 15 acres.
Nigro HQ LLC (Bankr. D. Nev. Case No. 11-21014) owns an office
building at 9115 W. Russell Road occupied by Bank of George,
Infinity Plus LLC and Nigro Construction Inc.
Todd Nigro said the four bankruptcies were caused by threatened
foreclosures -- typically related to Wells Fargo Bank demanding
payments to keep loan-to-value ratios at specified levels.
Judge Mike K. Nakagawa presides over the cases. Lawyers at Gordon
Silver serve as the Debtors' bankruptcy counsel. The bankruptcy
petitions estimated assets and debts from $1 million to
$10 million each for Nigro HQ; and from $10 million to $50 million
in both assets and debts for Horizon Village, Ten Saints and
Beltway One. The cases are not jointly administered.
A fifth related business, Russell Boulder LLC, filed for
bankruptcy (Bankr. D. Nev. Case No. 10-29724) on Oct. 19, 2010.
It owns the 600-suite Siena Suites extended stay property at
Boulder Highway and Russell Road.
Edward M. Zachary, Esq., at Bryan Cave LLP, in Bryan Cave LLP, in
Phoenix, Ariz., and Robert M. Charles, Jr., Esq., at Lewis and
Roca LLP, in Los Vegas, Nev., represent Wells Fargo Bank, N.A., as
counsel.
TERRA-GEN FINANCE: Fitch Affirms 'BB-' Rating on $310MM Loans
-------------------------------------------------------------
Fitch Ratings has affirmed the 'BB-' rating on Terra-Gen Finance
Company, LLC's (Terra-Gen) $250 million term loan facility ($194.3
million outstanding) and $60 million working capital facility.
Fitch maintains the Negative Outlook on both facilities.
The Negative Outlook reflects the near-term weakness in Terra-
Gen's financial profile that could result in insufficient
distributions from the portfolio's projects.
Key Rating Drivers
Contracted Revenue Base: Revenues are primarily derived from
projects with fixed-price power purchase agreements (PPAs) with
Southern California Edison (SCE, rated 'A-' with a Stable Outlook
by Fitch). Approximately 30% of portfolio capacity is exposed to
price volatility under PPAs that derive energy payments through
the market-based short-run avoided cost (SRAC) methodology.
(Revenue Risk - Price: Midrange)
Adequate Energy Production Forecasts: Energy production forecasts
for the wind, solar, and geothermal assets are based largely on
actual production data and reasonable assumptions for the
technology's performance. The newer Alta wind projects have yet to
establish a track record of stable energy output. (Revenue Risk -
Volume: Midrange)
Established Operating History: The portfolio consists of various
asset types, which all utilize proven technology. Most projects
have an extensive operating history and are operated by a
subsidiary of the issuer that Fitch considers capable. (Operation
Risk: Midrange)
Subordination and Refinance Risk: The Terra-Gen loan facilities
are structurally subordinated to project-level indebtedness.
Additionally, the term loan will need to be refinanced in
approximately four years. Fixed-price contractual revenues and a
cash sweep mechanism to reduce leverage are positive factors
indicating that Terra-Gen should be able to refinance the term
loan facility. (Debt Structure: Weaker)
Financial Coverage Under Pressure: Due to Terra Gen's structural
subordination, financial performance is considered on a
consolidated basis. Terra-Gen's average consolidated debt service
coverage ratios (DSCR) range between 1.00x and 1.30x under several
stress scenarios. Notably, a reduction in distributions under a
low SRAC environment and adverse conditions at the Alta projects
may restrict project-level distributions and could trigger an
event of default under Terra-Gen's financial covenants. (Debt
Service: Weaker)
Rating Sensitivities
-- Erosion of distributions from portfolio projects due to
low energy production, low energy pricing, or other performance
factors (e.g. curtailment at Alta);
-- Extensive use of reserve liquidity (debt service reserve
facilities);
-- Potential violation of Terra-Gen's financial covenants, such as
the DSCR or debt-to-cash available for debt service ratio
(debt-to-CADS).
Security
The loan facilities are secured by a first-priority security
interest in Terra-Gen's accounts, ownership interests and project
dividends.
Credit Update
Since reaching financial close in mid-2011, cash flow to Terra-Gen
has been below expectations through the combination of lower-than-
projected SRAC pricing, curtailments, and low wind production at
the Alta projects. In the past several quarters, conditions have
improved at the Alta projects but low SRAC pricing persists due to
the continued low natural gas pricing environment. Terra-Gen's
prior 12-months DSCR in the fourth quarter of 2012 and first
quarter of 2013 hovered close to 2.50x, and close to breakeven
level on a consolidated basis.
Low market-based SRAC energy prices have resulted in lower
distributions at several projects. Fitch expects that geothermal
asset Dixie Valley will not meet its near-term project-level
distribution tests, likely trapping distributions of approximately
$2.5 million (3% of total projected cash flow) for all of 2014.
Fitch projects low gas prices to persist over the short-to-medium
term, indicating continued pressure on projects exposed to SRAC
pricing.
Fitch's base case reflects the expectation for lower market-based
SRAC pricing without altering its expectation for long-term energy
production at any individual project. In addition to low SRAC
pricing, Fitch's rating case introduces additional stresses to
wind production and operations and maintenance costs at the Alta
projects.
Terra-Gen is particularly susceptible to performance shortfalls at
the Alta wind projects II-V (Alta Wind 2010 Pass-Through Trust,
'BBB-'; Stable Outlook), which comprise the primary source of
Terra-Gen's cash flow. Under rating case conditions, distributions
could be reduced or restricted at the Alta projects, resulting in
term loan coverage that falls below the minimum DSCR covenant.
Barring an equity cure or lender waiver, this would trigger an
event of default due to a breach in the loan's financial covenant.
Fitch also considers Terra-Gen's financial performance on a
consolidated basis, as the loan facilities are structurally
subordinate to project-level indebtedness. Fitch projects rating-
case consolidated DSCRs averaging 1.17x, with coverage close to
breakeven levels in 2014. The Negative Outlook reflects that
potential underperformance over the next 12 months may result in a
breach in financial covenants or a need to access the debt service
reserve to meet obligations, any of which could trigger a
downgrade of the facilities' ratings. Favorably, rating case
results suggest improved metrics more consistent with the current
rating after 2014.
Terra-Gen is a special-purpose company formed solely to acquire,
own and operate a 1,236 MW portfolio consisting of 22 projects,
primarily located in California, that generate power using
renewable resources. Nearly 90% of the portfolio's nominal
capacity is committed to SCE under various medium- and long-term
PPAs. The proceeds of the issuance were used to fully repay pre-
existing indebtedness, fund a cash distribution to the sponsors,
cash-fund three months of interest within the nine-month debt
service reserve, and pay transaction fees and expenses.
TMS INT'L: Moody's Rates $400MM Term Loan Ba3 & $300MM Notes B3
---------------------------------------------------------------
Moody's Investors Service assigned a Ba3 rating to TMS
International Corporation's proposed $400 million senior secured
term loan and a B3 rating to the company's proposed $300 million
senior unsecured notes. Proceeds of the proposed financings will
help fund a leveraged buyout of the company by The Pritzker
Organization ("TPO"), a private investment firm representing the
business interests of certain members of the Chicago-based
Pritzker family, from public shareholders and Onex Corporation, a
private equity firm with a controlling interest. Moody's also
assigned a B1 Corporate Family Rating and a B1-PD Probability of
Default Rating to TMS. The rating outlook is stable.
"Debt will more than double with the return to private ownership,
but the company is stronger and more resilient than at the time of
its last buyout in early 2007 and has demonstrated an ability to
operate with a leveraged balance sheet," said Ben Nelson, Moody's
Assistant Vice President and lead analyst for TMS International
Corporation.
Rating actions:
Issuer: TMS International Corp.
Corporate Family Rating, Assigned B1
Probability of Default Rating, Assigned B1-PD
$400 million Senior Secured Term Loan B due 2020, Assigned Ba3
(LGD3 37%)
$300 million Senior Unsecured Notes due 2021, Assigned B3 (LGD5
82%)
Outlook, Stable
The existing ratings on the current rated entity, Tube City IMS
Corp., including the Ba3 CFR, will be withdrawn following the
closing of the proposed transaction and full repayment of all
existing rated debt. The proposed transaction is expected to close
in the fourth quarter of 2013. TMS will no longer be a publicly-
traded company or report financial information publicly after the
completion of the leveraged buyout transaction. The new notes will
be issued as a private placement under Rule 144a of the Securities
Act of 1933.
Rating Rationale
The B1 Corporate Family Rating is principally constrained by the
challenges of operating a leveraged business with exposure to the
highly-cyclical steel industry and maintaining a relatively
aggressive growth strategy that likely will limit free cash flow
generation. Initial credit measures will be weak for the rating on
a pro forma basis for the leveraged buyout transaction with
adjusted interest coverage near 3 times (EBITDA/Interest) and
adjusted financial leverage near 5 times (Debt/EBITDA). Moody's
expects gradual improvement in the steel industry and the benefit
of new contract signings will lead to stronger operating
performance in the near-term with leverage falling to the low-to-
mid 4 times area by early 2015. Good scale, improved customer and
regional diversity, contractual downside protection in long-term
customer contracts and a highly-variable cost structure supports
Moody's view that the company will be able to maintain leverage
below 5.5 times, retained cash flow above 10% of debt should an
end market downturn take hold beyond that horizon. An undrawn $175
million revolving credit facility with only springing financial
maintenance covenants is a good source of secondary liquidity and
also supports the rating.
The stable rating outlook assumes that global steel production
will increase slowly, credit metrics will improve modestly, and
the company will maintain at least adequate liquidity over the
next twelve-to-eighteen months. Moody's could downgrade the rating
with expectations for interest coverage below 2 times, leverage
above 5.5 times, or a substantive deterioration in liquidity.
Pursuit of shareholder returns, use of the revolver to fund
acquisitions, and aggressive contract signings with capital
commitments that narrow the company's anticipated liquidity
cushion could also have negative rating implications. Upward
rating momentum is unlikely in the near-term, but Moody's could
upgrade the rating with a demonstrated commitment to more
conservative financial policies supportive of leverage below 4
times, retained cash flow above 20%, and good liquidity on a
through-the-cycle basis.
The principal methodology used in this rating was the Global Steel
Industry published in October 2012. Other methodologies used
include Loss Given Default for Speculative-Grade Non-Financial
Companies in the U.S., Canada and EMEA published in June 2009.
TMS International Corporation provides on-site steel mill services
such as materials handling, scrap management, metal recovery, and
slag processing, and also provides raw materials, logistics, and
optimization services. The company is publicly-traded, though
private equity firm Onex Corporation maintains significant
ownership and board representation. Headquartered in Glassport,
Pa., the company generated $2.6 billion in revenues, including
$607 million of revenues net of raw materials costs, in 2012.
TMT GROUP: Seeks Longer Exclusivity Period From District Judge
--------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that TMT Group, a Taiwanese owner of 16 oceangoing
vessels, is trying to explain to a federal district judge why it
needs six more months with the exclusive right to propose a
Chapter 11 plan.
According to the report, ordinarily, bankruptcy judges preside
over the question of whether reorganizing companies have been
sufficiently diligent to merit an expansion of the exclusivity
that a bankrupt gets automatically for four months after entering
Chapter 11. In most cases, bankruptcy judges expand exclusivity
for 18 months, the maximum allowed by Congress. Several foreign-
bank lenders have protested and appealed TMT's right to be in
bankruptcy court because it has few ties with the U.S. aside from
$40 million the bankruptcy judge required to be placed on deposit
to assure compliance with court orders. This month, U.S. District
Judge Lynn N. Hughes in Houston took the entire case away from
U.S. Bankruptcy Judge Marvin Isgur.
The report notes that unless Judge Hughes refers the question to
Judge Isgur, the district judge will decide on exclusivity. The
debtors said they deserve an extension because they have been "on
the defensive, constantly fighting for their lives over
jurisdiction, good faith, cash collateral" and other issues. For
the most part, the banks were losing in Judge Isgur's court. It
remains to be seen whether they fare better on Oct. 8, the first
major hearing with Judge Hughes, who said he will review decisions
made by Judge Isgur in July that the bankruptcy was filed in good
faith.
The report relates that banks opposing aspects of the bankruptcy
include First Commercial Bank Co., Mega International Commercial
Bank Co., Cathay United Bank and Shanghai Commercial Savings Bank
Ltd.
The report discloses that the banks say the ships' owners have
"overwhelmingly if not entirely foreign creditors," and the owner
is a "foreign national." Previously known as Taiwan Marine
Transport Co., one of the companies claimed to be based in
Houston. The vessels carry varied cargo including bulk, vehicles,
ore and petroleum. The average age of most is about 2.5 years,
according to a court filing.
About TMT Group
Known in the industry as TMT Group, TMT USA Shipmanagement LLC and
its affiliates own 17 vessels. Vessels range in size from
approximately 27,000 dead weight tons (dwt) to approximately
320,000 dwt.
TMT USA and 22 affiliates, including C. Ladybug Corporation,
sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 13-
33740) in Houston, Texas, on June 20, 2013 after lenders seized
seven vessels.
TMT has tapped attorneys from Bracewell & Giuliani LLP and
AlixPartners as financial advisors.
On a consolidated basis, the Debtors have $1.52 billion in assets
and $1.46 billion in liabilities.
TMT already filed a lawsuit in U.S. bankruptcy court aimed at
forcing creditors to release the vessels so they can return to
generating income.
TNP STRATEGIC: Two Law Firms File Securities Class Action
---------------------------------------------------------
Girard Gibbs LLP and Fishman Haygood Phelps Walmsley Willis &
Swanson, LLP on Sept. 24 disclosed that a class action has been
commenced in the United States District Court for the Central
District of California on behalf of persons and entities who
purchased or otherwise acquired TNP Strategic Retail Trust, Inc.'s
common stock in or traceable to the Company's initial public
offering ("IPO") between September 23, 2010 and February 7, 2013,
pursuant to a registration statement and prospectus filed with the
U.S. Securities and Exchange Commission.
If you wish to serve as lead plaintiff, you must move the Court no
later than 60 days from September 24, 2013. If you wish to
discuss this action or have any questions concerning this notice
or your rights or interests, please contact Girard Gibbs attorney
John Kehoe at (866) 981-4800 or (415) 981-4800, or via e-mail at
jak@girardgibbs.com or Fishman Haygood attorney Alan Rosca at
(216) 570-0097, or via e-mail at arosca@fishmanhaygood.com
The complaint alleges that the Company, its affiliates Thompson
National Properties, LLC, TNP Strategic Retail Advisor, LLC and
TNP Securities, LLC, and certain of the Company's current or
former officers and directors violated Sections 11, 12(a)(2)
and/or 15 of the Securities Act of 1933. Among other things, the
complaint alleges that the offering materials provided to
investors during the IPO contained material misrepresentations and
omissions about the financial health of the Company and its
affiliates and about the performance of earlier real estate
programs sponsored by the Company's affiliates.
On January 16, 2013, the Company revealed that it had defaulted on
a $29 million loan that its CEO and Chairman had personally and
unconditionally guaranteed and on its $45 million revolving credit
facility. Then, on August 28, 2013, the Company issued a press
release disclosing that a board-level "Special Committee" had been
formed a year earlier "for the protection of shareholders" after
one of the Company's affiliates was found to be paying fees to
itself that had not been earned; and that its affiliates had
defaulted on certain corporate debt obligations and had sustained
significant corporate losses. In the wake of this disclosure, the
Company replaced its CEO and Chairman and severed its relationship
with its affiliates.
If you are a member of this class, you can view a copy of the
filed complaint or join this class action online at
http://www.girardgibbs.com/tnp-investor-lawsuit/
Any member of the putative class may move the Court to serve as
lead plaintiff through counsel of their choice, or may choose to
do nothing and remain an absent class member.
Girard Gibbs LLP -- http://www.GirardGibbs.com-- represents
individual and institutional investors in securities fraud class
actions and litigation to correct abusive corporate governance
practices, breaches of fiduciary duty and proxy violations.
Based in Louisiana with offices in Ohio, Fishman Haygood Phelps
Walmsley Willis & Swanson, LLP -- http://www.fishmanhaygood.com/
-- deals with complex and difficult legal and business matters.
About TNP
TNP -- http://www.tnpre.com-- is a real estate advisory company,
specializing in acquisitions for high net worth investors and
their joint venture partners, along with 3rd party property
management, asset management and receivership advisory services.
Headquartered in Costa Mesa, California, TNP was founded in April
2008 and has three regional offices. As of August 16, 2013, TNP
manages a portfolio of 106 commercial properties, in 24 states,
totaling approximately 11.02 million square feet, on behalf of
over 6,000 investor/owners/lenders with an overall purchase value
of $1.2 billion.
About TNP Strategic
TNP Strategic Retail Trust, Inc., was formed on Sept. 18, 2008, as
a Maryland corporation. The Company believes it qualifies as a
real estate investment trust under the Internal Revenue Code of
1986, as amended, and has elected REIT status beginning with the
taxable year ended Dec. 31, 2009, the year in which the Company
began material operations. The Company was initially capitalized
by the sale of 22,222 shares of common stock for $200,000 to
Thompson National Properties, LLC, on Oct. 16, 2008.
TNP Strategic's balance sheet at Sept. 30, 2012, showed $272.33
million in total assets, $197.98 million in total liabilities and
$74.34 million in total equity.
The Company reported a net loss of $11.63 million for the nine
months ended Sept. 30, 2012, compared with a net loss of
$4.39 million for the same period a year ago.
TRIUS THERAPEUTICS: Suspending Filing of Reports with SEC
---------------------------------------------------------
Trius Therapeutics, Inc., filed a Form 15 with the U.S. Securities
and Exchange Commission to voluntarily terminate the registration
of its common stock under Section 12(g) of the Securities Exchange
Act of 1934. As of Sept. 23, 2013, there was only one holder of
record of the common shares. As a result of the Form 15 filing,
the Company will not anymore be obliged to file reports with the
SEC.
About Trius Therapeutics
San Diego, Calif.-based Trius Therapeutics, Inc. (Nasdaq: TSRX) --
http://www.triusrx.com/-- is a biopharmaceutical company focused
on the discovery, development and commercialization of innovative
antibiotics for serious, life-threatening infections. The
Company's first product candidate, torezolid phosphate, is an IV
and orally administered second generation oxazolidinone being
developed for the treatment of serious gram-positive infections,
including those caused by MRSA. In addition to the company's
torezolid phosphate clinical program, it is currently conducting
two preclinical programs using its proprietary discovery platform
to develop antibiotics to treat infections caused by gram-negative
bacteria.
Trius Therapeutics incurred a net loss of $53.92 million in 2012,
a net loss of $18.25 million in 2011 and a $23.86 million net loss
in 2010. As of June 30, 2013, the Company had $74.05 million in
total assets, $19.37 million in total liabilities and $54.68
million in total stockholders' equity.
As reported by the TCR on Sept. 17, 2013, Cubist Pharmaceuticals
completed the acquisition of Trius Therapeutics.
TRIZETTO GROUP: Weak Performance Cues Moody's to Cut CFR to B3
--------------------------------------------------------------
Moody's Investors Service downgraded TriZetto Group, Inc.'s
corporate family rating to B3 from B2, probability of default
rating to B3-PD from B2-PD, sr. secured revolver and term loan
ratings to B2 (LGD3, 39%) from B1 (LGD3, 39%), and sr. secured 2nd
lien term loan's rating to Caa2 (LGD5, 89%) from Caa1 (LGD5, 89%).
The outlook was changed to negative from stable.
According to Moody's analyst Adam McLaren, "The downgrade of the
corporate family rating to B3 reflects weaker operating results
and cash flow driven primarily by softer consulting and perpetual
license revenue, and the subsequent deterioration of key credit
metrics including interest coverage and debt leverage."
The change in outlook to negative from stable reflects TriZetto's
weakened liquidity profile incorporating negative free cash flow
and lack of revolver access as the company would not be in
compliance with its financial ratio covenant, if tested.
The following rating actions were taken:
Corporate family rating, downgraded to B3 from B2;
Probability of default rating, downgraded to B3-PD from B2-PD;
$85 million senior secured revolving credit facility due 2016,
downgraded to B2 (LGD3, 39%) from B1, (LGD3, 39%);
$650 million ($637 million outstanding) senior secured term loan
due 2018, downgraded to B2 (LGD3, 39%) from B1, (LGD3, 39%);
$150 million ($150 million outstanding) senior secured 2nd lien
term loan due 2019, downgraded to Caa2 (LGD5, 89%) from Caa1
(LGD5, 89%);
Outlook, changed to negative from stable.
Ratings Rationale:
The downgrade of the corporate family rating to B3 from B2
reflects TriZetto's weaker than anticipated operating performance,
primarily in the company's payer segment, that has resulted in
debt to EBITDA in excess of 8 times and EBITDA less capital
expenditures to interest expense below 1.0 times. Moody's projects
improvement in operating performance will continue to be pressured
by ongoing uncertainty around the impact of healthcare exchanges
on payers and the competitive healthcare IT market. In addition,
weakened credit metrics prohibit the company from utilizing its
revolving credit facility, which combined with projected limited
free cash flow in 2013 constrains the company's liquidity profile
and reduces the potential for acquisitions (historically, a growth
engine for TriZetto). However, Moody's projects TriZetto's balance
sheet cash to fund operations while TriZetto aligns its cost
structure and focuses on increasing revenue from software sales
over the next 12 to 18 months.
The negative outlook reflects the company's weakened liquidity
profile incorporating negative free cash flow and lack of revolver
access as the company would not be in compliance with its
financial ratio covenant, if tested.
The rating could be downgraded if TriZetto's liquidity profile
were to weaken further, including continued negative free cash
flow and lack of revolver availability. The rating would also be
pressured if the company is unable to grow revenue through product
and license sales in its payer segment and/or if the company was
to experience contract losses from competitive pressures.
Although unlikely in the near term, the rating could be upgraded
if TriZetto successfully grows both the payer and provider
businesses, with debt leverage approaching 5.0 times on a
sustained basis. A rating upgrade would also require an improved
liquidity profile, including revolver access, covenant compliance
if tested, and the maintenance of free cash flow-to-debt of
approximately 5%.
The principal methodology used in this rating was the Global
Business & Consumer Service Industry Rating Methodology published
in October 2010. Other methodologies used include Loss Given
Default for Speculative-Grade Non-Financial Companies in the U.S.,
Canada and EMEA published in June 2009.
Headquartered in Englewood, Colorado, TriZetto is a provider of
information technology solutions to the healthcare industry.
TriZetto's shareholders include Apax Partners, BlueCross
BlueShield of Tennessee, Inc. and Cambia Health Solutions. For the
trailing twelve months ended June 30, 2013 the company's revenues
were $631 million.
UHF DEVELOPMENT: LVW's Claim Subordination Lawsuit Dismissed
------------------------------------------------------------
Bankruptcy Judge Randy D. Doub granted a Motion for Summary
Judgment and dismissed, with prejudice, the adversary proceeding
LVW INVESTMENTS, LLC, Plaintiff, v. BEAUFORT THE WYE, LLC AND UHF
DEVELOPMENT, LLC, Defendants, Adv. Proc. No. 13-00001-8-RDD.
(Bankr. E.D.N.C.).
The plaintiff filed the complaint in January 2013, seeking
equitable subordination of the claim of Beaufort the Wye to the
claims of all other creditors in UHF Development's bankruptcy
case. Hubert G. Tolson, III, is the manager of Beaufort the Wye
and the managing member and majority owner of UHF Developments.
Judge Doub finds that Beaufort the Wye was not engaging in
fraudulent conduct at the time of a certain property sale, as
Beaufort the Wye did not owe any money to third parties and did
not have a purpose to injure the Plaintiff at the time of the
sale, as the Plaintiff did not become a creditor until December
2011 when it obtained its judgment.
A copy of the Bankruptcy Court's Aug. 30, 2013 Order is available
at http://is.gd/Gzz5jwfrom Leagle.com.
UHF Developments, LLC, owns certain real estate consisting of lots
in a subdivision known as The Wye in Carteret County, North
Carolina. It filed a Chapter 11 bankruptcy petition on April 19,
2012.
US AIRWAYS: S&P Raises CCR to 'B' & Revises Outlook to Stable
-------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on Tempe,
Ariz.-based airline US Airways Group Inc., including raising the
corporate credit rating to 'B' from 'B-'. At the same time, S&P
revised its outlook on the rating to stable from positive. S&P
also raised its issue ratings on the company's enhanced equipment
trust certificates (EETCs), in some cases by two notches, based on
S&P's assessment of changes in collateral coverage.
"We raised our ratings on US Airways based on the company's
improved financial profile, due to stronger operating performance
and liquidity, trends we expect it to maintain through 2014," said
credit analyst Betsy Snyder. "For the 12 months ended June 30,
2013, the company's margins improved due to revenue growth and
lower fuel costs. In addition, in the first half of 2013, the
company refinanced its $1.1 billion term loan (which was due to
mature in 2014) with a $1.6 billion term loan, issued $920 million
of EETCs to finance new aircraft deliveries, and issued
$500 million of unsecured notes. As a result, as of June 30,
2013, the company's unrestricted cash was $3.6 billion -- equal to
26% of trailing-12-month revenues -- up from 18% a year earlier
and on the high side of the industry average of 15%-25%. We
expect US
Airways' financial profile to remain relatively consistent through
2014, despite incremental debt to fund new aircraft deliveries,
with EBITDA interest coverage of about 2x and funds from
operations (FFO) to debt in the midteens percent range".
The corporate credit rating on US Airways reflects its
participation in the high-risk U.S. airline industry and a
substantial debt and lease burden. The company's relatively low
operating costs are a positive credit factor, in Standard & Poor's
assessment. Under S&P's criteria, it characterizes US Airways'
business profile as "weak," its financial profile as "highly
leveraged," its liquidity as "adequate," and its management as
"fair."
While earnings and cash flow have improved, the company remains
highly leveraged. In the first six months of 2013, the company's
operating margin rose to 8.1% from 6.6% in the prior-year period,
while it earned $331 million compared with $355 million (in the
prior-year period it recorded no tax liability). The company's
credit metrics have remained relatively consistent over this
period, with EBITDA interest coverage around 2x and FFO to debt in
the midteens percent area, while debt to EBITDA declined to 6x
from 6.7x. S&P's base-case scenario assumes modest improvements
in US Airways' passenger revenue per available seat mile in the
second half of 2013 and into 2014, Standard & Poor's oil price
forecast of $99.56 per barrel in 2013 and 96.00 per barrel in 2014
(West Texas Intermediate), and close to flat nonfuel operating
costs per available seat mile. Based on the results of S&P's
scenario, US Airways' credit measures should remain relatively
consistent with recent levels during this period. However, the
company's credit measures could deteriorate if a weaker-than-
expected economic recovery reduces traffic or if oil prices spike,
particularly because US Airways does not hedge any of its fuel
needs.
On Feb. 14, 2013, US Airways and AMR Corp., parent of American
Airlines Inc., announced their long-predicted merger to be
completed upon AMR's emergence from bankruptcy. Thus far, AMR's
and US Airways' labor, AMR's creditors, US Airways' shareholders,
and the bankruptcy judge have signed off on the merger. However,
on Aug. 13, 2013, the U.S. Department of Justice filed a lawsuit
to block the proposed merger, stating the merger (which would
result in the largest U.S. airline) would violate U.S. antitrust
law and lead to less competition and higher prices. The trial is
scheduled to begin Nov. 25, 2013. If the merger does not receive
regulatory approval by Jan. 18, 2014 (both airlines recently
extended this deadline from Dec. 17, 2013), either airline can
terminate the agreement. S&P will monitor the situation and take
any necessary rating actions if and as a merger becomes more
likely or more imminent.
S&P raised the ratings on all of US Airways' EETCs based on the
company's higher corporate credit rating. S&P raised the ratings
on several older EETCs by an additional notch because their debt
amortized more rapidly than the collateral aircraft value
declined.
"We are raising our issue-level rating on US Airways' unsecured
notes to 'B-' from 'CCC+' while maintaining our recovery rating of
'5'. This is one notch lower than the corporate credit rating,
indicating our expectation of modest (10%-30%) recovery in a
default scenario. We are also raising our issue-level rating on
US Airways' convertible notes to 'CCC+' from 'CCC' while
maintaining our recovery rating of '6'. This is two notches lower
than the corporate credit rating, indicating our expectation of
negligible (0%-10%) recovery in a default scenario. Our recovery
analysis is based on a discrete asset valuation, which involves a
stressed valuation of the specific collateral supporting the
secured debt. We then assign any excess collateral, along with
our stressed valuation of unencumbered assets, to determine the
recovery prospects for the unsecured debt and nondebt claims," S&P
noted.
Standard & Poor's rating outlook on US Airways is stable. This
reflects S&P's expectation that US Airways' financial profile will
remain relatively consistent through 2014, despite incremental
debt to fund new aircraft deliveries, with EBITDA interest
coverage of about 2x and FFO to debt in the midteens percent
range.
S&P could lower the ratings if a stalled U.S. economic recovery or
a serious spike in oil prices resulted in losses, decreasing FFO
to debt to around 10% or eroding liquidity to less than 15% of
trailing-12-month revenues (liquidity was 26% as of June 30,
2013).
Although unlikely, S&P could raise the ratings if FFO to debt
improves to at least 20% for a sustained period and liquidity
remains at least 15% of revenues.
VALITAS HEALTH: Moody's Cuts CFR to B3 Over Poor Performance
------------------------------------------------------------
Moody's Investors Service downgraded Valitas Health Services,
Inc.'s Corporate Family Rating to B3 from B2, its Probability of
Default Rating to B3-PD from B2-PD, and its senior secured bank
credit facility ratings to B2 from B1. The rating outlook was
changed to negative from stable. The rating action reflects the
company's continued operating performance weakness and the further
deterioration of the company's EBITDA and credit metrics beyond
Moody's previous expectations, attributable to recent contract
losses, margin declines from competitive pricing pressure on
renewed contracts, and delays in the realization of earnings from
certain start-up contracts. The downgrade also reflects Moody's
concerns related to the minimal cushion under the company's
financial covenants, due to earnings volatility and approaching
step-downs, and Moody's expectation that a waiver or an amendment
will be required over the near-term.
Following is a summary of Moody's rating actions:
Ratings downgraded:
Valitas Health Services, Inc.
Corporate Family Rating to B3 from B2
Probability of Default Rating to B3-PD from B2-PD
Senior secured revolving credit facility due June 2016, to B2
(LGD 3, 33%) from B1 (LGD 3, 34%)
Senior secured term loan due June 2017, to B2 (LGD 3, 33%) from
B1 (LGD 3, 34%)
The rating outlook was changed to negative from stable.
Ratings Rationale:
Valitas' B3 Corporate Family Rating reflects the company's high
financial leverage, operating headwinds due to recent contract
losses, margin compression due to competitive pricing pressure on
renewed contracts, and delays in the realization of earnings from
certain start-up contracts. The credit profile is also constrained
by risks associated with the company's considerable customer
concentration, and liquidity concerns related to the very limited
cushion under the company's credit facility financial covenants.
Moody's expects the company to continue to face near-term earnings
pressure following the recent losses of the Maine, Maryland,
Tennessee (excluding Mental Health), and Pennsylvania Department
of Corrections (DOC) contracts. The ratings are supported by
Valitas' solid scale and market position as the largest provider
of healthcare services to correctional facilities in a highly
fragmented sector, and recent business wins which Moody's expects
will provide earnings and cash flow improvement in 2014.
Furthermore, Moody's expects positive free cash flow generation as
the business is characterized by minimal bad debt expense and
modest capital investment needs.
The negative rating outlook reflects Moody's expectation that
credit metrics will remain constrained, the competitive
environment will remain challenging, and that the company's
liquidity profile will remain weak based on Moody's expectation
that a waiver or amendment may need to be obtained over the next
few quarters if the company fails to remain in compliance with
financial covenants.
The ratings could be upgraded if the company exhibits growth in
EBITDA from new contract opportunities or repays debt such that
adjusted debt to EBITDA approaches 5.0 times on a sustained basis,
free cash flow to debt is sustained above 3%, and cushion under
the company's credit facility financial covenants improves. The
ratings could be downgraded if operating performance deteriorates
further, or if it appears likely that the company will breach a
covenant and cannot obtain a waiver. The ratings could also be
downgraded if the company experiences a loss of key DOC contract
resulting in further erosion of credit metrics.
The principal methodology used in this rating was the Global
Business & Consumer Service Industry Rating Methodology published
in October 2010. Other methodologies used include Loss Given
Default for Speculative-Grade Non-Financial Companies in the U.S.,
Canada and EMEA published in June 2009.
Valitas Health Services, Inc., through its operating subsidiaries,
Corizon, Inc. and Corizon Health, Inc., based in Brentwood,
Tennessee, is a leading provider of contract healthcare services
to correctional facilities owned or operated by state and local
governments in United States. Valitas is majority owned by Beecken
Petty O'Keefe & Company, a Chicago based private equity management
firm. For the twelve months ended June 30, 2013, Valitas reported
revenue of approximately $1.2 billion.
VULPES LLC: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: VULPES, LLC
dba Fox & Obel Food Market
401 E. Illinois
Chicago, IL 60611
Bankruptcy Case No.: 13-36961
Chapter 11 Petition Date: September 18, 2013
Court: U.S. Bankruptcy Court
Northern District of Illinois (Chicago)
Judge: Carol A. Doyle
Debtor's Counsel: William J Factor, Esq.
THE LAW OFFICE OF WILLIAM J. FACTOR, LTD
1363 Shermer Road, Suite 224
Northbrook, IL 60062
Tel: (847) 239-7248
Fax: (847) 574-8233
E-mail: wfactor@wfactorlaw.com
Estimated Assets: $500,001 to $1,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Company?s list of its 20 largest unsecured creditors filed
with the petition is available for free at:
http://bankrupt.com/misc/ilnb13-36961.pdf
The petition was signed by William Bolton, manager.
WARNER SPRINGS: Court Denies Employment of Lee Stegall
------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of California
denied Warner Springs Ranchowners Association's motion to employ
Lee Stegall to perform title searches and related title services.
Tiffany L. Carrol, Acting U.S. Trustee, asked the Bankruptcy Court
to deny approval of Lee Stegall's employment on the basis that the
$4,000 postpetition retainer provided to Stegall was without prior
authorization from the Court. Mary Testerman Duvoisin, Esq.,
represents the U.S. Trustee.
The Debtor, in its response to the U.S. Trustee's objection,
stated that it will give notice of the retainer as directed by the
Court.
The Debtor sought permission to employ Stegall to perform title
searches and related title services, to be compensated at the
expense of Debtor's Chapter 11 estate. The Debtor needed Stegall
to, among other things:
a. perform title searches on Co-Owners' interests based on a
completed Statement of Information provided by the Co-Owner;
b. perform title searches on Co-Owners' interests who have not
provided a Statement of Information;
c. assist the Debtor with any questions that arise regarding
the ownership of a Co-Owner interest; and
d. consult with the Debtor and its professionals regarding
title and the Debtor's distribution of net sale proceeds to
Co-Owners.
Stegall agreed to perform these services for a flat fee. For the
first phase, if the Stewart Report was able to fully validate the
status of the Co-Owners' interest through January 2012, Stegall
would charge the Debtor $20 per person to perform an update
through the Closing Date. If the Stewart Report was not able to
fully validate the status of Co-Owners' interests, Stegall would
charge the Debtor $30 per person to review the title for the
previous ten years. However, Stegall's work for the services
performed during the first phase will be capped at $10,000. For
the second phase services, Stegall agreed to charge the Debtor $50
per person. In addition, Stegall will charge the Debtor a flat
fee of $1,000 to assist the Debtor with any inquiries regarding
ownership. Stegall requested an initial retainer of $4,000 that
would be applied to the first phase of services.
Stegall said he is a "disinterested person" as that term is
defined in Section 101(14) of the Bankruptcy Code.
About Warner Springs Ranchowners
Warner Springs Ranchowners Association, a California non-profit
mutual benefit corporation, filed for Chapter 11 protection
(Bankr. S.D. Cal. Case No. 12-03031) on March 1, 2012. Judge
Louise DeCarl Adler presides over the case. Megan Ayedemo, Esq.,
and Jeffrey D. Cawdrey, Esq., at Gordon & Rees LLP, represent the
Debtor. The Debtor has hired Andersen Hilbert & Parker LLP as
special counsel. Timothy P. Landis, P.H., serves as the Debtor's
environmental consultant.
The Debtor's schedules disclosed $14,079,894 in assets and
$1,466,076 in liabilities as of the Chapter 11 filing.
Warner Springs Ranchowners Association manages and co-owns 2,300
acres of unencumbered rural land known as the Warner Springs Ranch
in San Diego County, California. The improvements on the Property
include 250 cottage style hotel rooms, an 18 hole golf course,
service/gasoline station, tennis courts, an aquatics center, an
equestrian center, an airport, a spa, and two restaurants.
WARNER SPRINGS: Dec. 5 Hearing on Adequacy of Plan Outline
----------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of California
continued until Dec. 5, 2013, at 10:30 a.m. the hearing to
consider the adequacy of the Disclosure Statement explaining
Warner Springs Ranchowners Association's Liquidating Plan.
As reported in the Troubled Company Reporter on Sept. 5, 2013,
pursuant to the Plan, the Debtor will complete the liquidation of
assets that were not sold and distribute the proceeds from the
sale and liquidation of all of the Debtor's assets.
The Plan provides for (i) the creation of a liquidating trust that
will administer and liquidate all of the Debtor's assets and (ii)
the allocation and the distribution of the proceeds from the sale
of all of the Debtor's assets to Holders of Allowed Claims and Co-
Owners. The Debtor will be dissolved, its affairs wound-up and all
assets transferred to the Liquidating Trust. An Oversight
Committee will be formed to select the Liquidating Trustee and
provide input, oversight and guidance to the Liquidating Trust.
Under the Plan, all Holders of Allowed Claims will be paid in full
and Co-Owners will receive one or more Distributions from the
remaining proceeds from the liquidation of the Debtor's assets and
the so-called UDI Proceeds.
A copy of the Disclosure Statement is available for free at
http://bankrupt.com/misc/WARNER_SPRINGS_ds_amended.pdf
About Warner Springs Ranchowners
Warner Springs Ranchowners Association, a California non-profit
mutual benefit corporation, filed for Chapter 11 protection
(Bankr. S.D. Cal. Case No. 12-03031) on March 1, 2012. Judge
Louise DeCarl Adler presides over the case. Megan Ayedemo, Esq.,
and Jeffrey D. Cawdrey, Esq., at Gordon & Rees LLP, represent the
Debtor. The Debtor has hired Andersen Hilbert & Parker LLP as
special counsel. Timothy P. Landis, P.H., serves as the Debtor's
environmental consultant.
The Debtor's schedules disclosed $14,079,894 in assets and
$1,466,076 in liabilities as of the Chapter 11 filing.
Warner Springs Ranchowners Association manages and co-owns 2,300
acres of unencumbered rural land known as the Warner Springs Ranch
in San Diego County, California. The improvements on the Property
include 250 cottage style hotel rooms, an 18 hole golf course,
service/gasoline station, tennis courts, an aquatics center, an
equestrian center, an airport, a spa, and two restaurants.
WHITING PETROLEUM: Moody's Rates $400MM Notes 'Ba2'
---------------------------------------------------
Moody's Investors Service assigned a Ba2 rating to Whiting
Petroleum Corporation's proposed offering of $400 million of
senior unsecured notes (an add-on to the $1.9 billion senior
unsecured notes issued on September 9, 2013). The Corporate Family
Rating of Ba2 and other ratings of Whiting are unaffected, and the
rating outlook is positive.
The proceeds from the proposed notes will be used for general
corporate purposes, including pre-funding Whiting's capital
expenditure program through 2014.
Assignments:
Issuer: Whiting Petroleum Corporation
$400 Million Senior Unsecured Bonds due 2021, Assigned Ba2
(LGD4, 59%)
Moody's current ratings for Whiting Petroleum Corporation are:
Corporate Family Rating of Ba2
Probability of Default Rating of Ba2-PD
$1.9 Billion Senior Unsecured Bonds due 2019 and 2021, Rated
Ba2 (LGD4, 59%)
$350 Million Senior Subordinated Regular Bond due 2018, Rated
Ba3 (LGD5, 85%)
Speculative Grade Liquidity rating of SGL-2
Ratings Rationale:
"Whiting's proposed bond issue will improve the company's
liquidity profile," commented Gretchen French, Moody's Vice
President. "Our underlying views on Whiting reflected in our
September 9 rating action remain unchanged."
The Ba2 rating on the proposed $400 million senior unsecured notes
reflects both the overall probability of default of Whiting, to
which Moody's assigns a Probability of Default rating of Ba2-PD,
and a loss given default of LGD4 (59%). The rating on the proposed
add-on and the existing senior unsecured notes are in line with
the Ba2 CFR, reflecting the large size of the senior unsecured
debt obligations relative to Whiting's $1.2 billion revolving
credit facility, and the notes senior position to Whiting's
remaining $350 million in subordinated debt.
Whiting's Ba2 CFR reflects the company's scale and diversification
of reserves, with different types of reservoirs and risk profiles.
The rating benefits from the company's long-lived reserves and
high proportion of oil production, which has helped support strong
cash margins. Whiting has a demonstrated track record in growing
production organically with good returns.
The Ba2 CFR is tempered by the company's persistent negative free
cash flow generation, which has resulted in increased debt levels.
Whiting is focused on growing production organically, primarily
from the Bakken Shale in North Dakota, the Niobrara Shale in
Colorado, and a CO2 tertiary recovery project in Texas, which
entails heavy capital needs and in the case of the CO2 operation,
long lead times. As a result, the company is expected to outspend
cash flow through 2014. However, Moody's expects production and
reserve growth through 2014, so Whiting's financial leverage
metrics will improve to a level more commensurate with a higher
rating.
Whiting's pro forma liquidity is good. At June 30, 2013, the
company had $23 million of cash on hand and $1.7 billion
outstanding on its borrowing base revolving credit facility. Pro
forma for the notes offering, the repayment of the $250 million in
subordinated notes, the Williston Basin acquisition, and the
Postle asset sale, Whiting's revolver will be fully undrawn with a
commitment size of $1.2 billion (borrowing base of $2.15 billion).
In addition, pro forma cash balances will increase to $890
million. With capital expenditures expected to be in excess of
cash flow through 2014, Moody's expects Whiting to rely on pro
forma cash balances and its revolver to fund expected shortfalls.
Whiting's ratings could be upgraded if the company continues to
successfully grow reserves and production relative to debt levels.
Should average daily production meaningfully and consistently
exceed 100,000 boe per day and debt to average daily production
trending under $30,000 per boe.
Alternatively, the ratings could be downgraded if Whiting were to
experience weaker than expected reserve and production growth, or
if the company continues to outspend internally generated cash
flow, causing debt to average daily production to exceed $35,000
per boe on a consistent basis.
The principal methodology used in this rating was the Global
Independent Exploration and Production Industry Methodology
published in December 2011. Other methodologies used include Loss
Given Default for Speculative-Grade Non-Financial Companies in the
U.S., Canada and EMEA published in June 2009.
Whiting Petroleum Corporation is an independent exploration and
production company headquartered in Denver, Colorado.
WINDOTS DEVELOPMENT: Court to Hear Dismissal Motion on Oct. 10
--------------------------------------------------------------
Guy G. Gebhardt, Acting United States Trustee for Region 21, asks
the U.S. Bankruptcy Court for the District Court of the Virgin
Islands to convert the Chapter 11 case of Windots Development, LLC
to a case under Chapter 7 or, in the alternative, to dismiss the
case, citing Debtor's failure to:
1. timely file monthly operating reports;
2. comply with the Federal Rules of Bankruptcy Procedure and
timely file and pay taxes;
3. timely confirm a disclosure statement and plan; and
4. timely pay quarterly fees in violation of its statutory
obligations under 28 U.S.C. Section 1930 (a)(6), made applicable
to it as a debtor in possession by 11 U.S.C. Section 1107.
According to papers filed with the Court on Sept. 10, 2013, the
Debtor has not filed its operating reports for August, November,
and December 2012 and has failed to file all of its 2013 operating
reports.
The hearing on the U.S. Trustee motion is scheduled for Oct. 10,
2013, at 10:00 a.m.
As reported in the TCR on Aug. 29, 2013, the Hon. Mary F. Walrath,
sitting in the District Court of the Virgin Islands, on Aug. 8,
2013, entered an order denying confirmation of the Amended Plan of
Reorganization of Wintdots Development.
As reported in the Troubled Company Reporter on June 28, 2013,
Kennedy Funding, Inc., filed a limited objection to the
confirmation of the Debtor's Amended Plan. Kennedy said the
amended plan is contingent upon a firm financing commitment. The
proposed buyer Ideal Development agreed to a financing commitment
but -- to the best of Kennedy's knowledge, information and belief
-- no binding financing commitment has been made to the Debtor.
Therefore, the apparent lack of financing to close on the contract
leads Kennedy to reasonably question whether the deal is bona
fide.
The Plan
As reported in the Troubled Company Reporter on Jan. 11, 2013,
Wintdots Development's Plan provides for the payment of all
administrative expenses and the allowed or agreed claims of
the secured, priority unsecured and general unsecured creditors
through continued operation of the business and post-petition
financing.
Taxes owed to the Internal Revenue Service will be paid in full.
The secured claims of Kennedy Funding, Inc., and Marvin and
Evelyn Freund, Trustees, in the amounts of $9,603,641 and
$225,000, will be paid not later than 60 days after the Effective
Date of the Plan. This Class is not impaired.
General unsecured creditors, owed $880,946.54, will receive 100%
of their allowed or agreed claims, without interest, not later
than 60 days after the Effective Date of the Plan. This class in
impaired.
Holders of interests in the Debtor will retain their interests.
A copy of the Disclosure Statement, as twice amended, is available
at http://bankrupt.com/misc/wintdots.doc39.pdf
About Wintdots Development
Wintdots Development, LLC, filed a Chapter 11 petition (Bankr. D.
V.I. Case No. 12-30003) in its hometown in St. Thomas, Virgin
Islands on March 11, 2011. The Debtor disclosed $56.42 million in
assets and $10.79 million in liabilities in its schedules.
The Debtor has three properties totaling 21 acres in St. Thomas
that are valued at $56.40 million. Each of the properties secures
a $9.60 million first lien debt to Kennedy Funding, Inc., and a
$225,000 second lien debt to Marvin & Evelyn Freund.
Bankruptcy Judge Mary F. Walrath oversees the case. Benjamin A.
Currence P.C., represents the Debtor.
ZALADO INC: Case Summary & 15 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: Zalado, Inc.
5651 E. Imperial Highway
South Gate, CA 90280
Bankruptcy Case No.: 13-33192
Chapter 11 Petition Date: September 18, 2013
Court: U.S. Bankruptcy Court
Central District of California (Los Angeles)
Judge: Sandra R. Klein
Debtors? Counsel: Ian Landsberg, Esq.
LANDSBERG & ASSOCIATES, APC
5950 Canoga Avenue, Suite 605
Woodland Hills, CA 91367
Tel: (818) 855-5900
Fax: (818) 855-5910
E-mail: ilandsberg@landsberg-law.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
Affiliate that simultaneously filed for Chapter 11:
Debtor Case No.
------ --------
BKB, LLC 13-33202
Assets: $1,000,001 to $10,000,000
Debts: $1,000,001 to $10,000,000
The petitions were signed by Behzad Lavian, president.
A. A copy of Zalado, Inc.'s list of its 15 unsecured creditors
filed with the petition is available for free at:
http://bankrupt.com/misc/cacb13-33192.pdf
B. A copy of BKB, LLC's list of its three unsecured creditors
filed with the petition is available for free at:
http://bankrupt.com/misc/cacb13-33202.pdf
* Fitch Takes Rating Actions on 9 Community Banks
-------------------------------------------------
Fitch Ratings has completed a peer review of nine rated community
banks. The following banks were reviewed as part of the Community
Banks Group: Ameriserv Financial, Inc. (ASRV), Central Pacific
Financial Corp. (CPF), Community Bank System, Inc. (CBU), CVB
Financial Corp. (CVBF), First Commonwealth Financial Corp. (FCF),
First Interstate Bancsystems, Inc. (FIBK), First Midwest Bancorp,
Inc. (FMBI), Independent Bank Corp. (INDB), and Trustmark
Corporation (TRMK).
Rating Action and Rationale:
Fitch revised ratings and/or Outlooks for CPF and TRMK. All other
ratings and Outlooks were affirmed and maintained respectively for
the remaining banks. A complete list of rating actions follows at
the end of this release. Furthermore, for banks that had changes
in ratings and/or Outlook revisions, please see the separate and
related press releases on Fitch's web site.
CPF's Long-Term Issuer Default Rating (L-T IDR) and Viability
Rating (VR) were upgraded to 'BB+/bb+' from 'BB-/bb-'. At the same
time, its Short-Term IDR (S-T IDR) was affirmed at 'B'. The
Outlook remains Stable. The action reflects significant asset
quality improvement, strong reserves, improved financial
performance and removal of its regulatory written agreement.
TRMK's L-T IDR and VR were downgraded to 'BBB+/bbb+' from
'A-/a-', while its S-T IDR was also downgraded from 'F1' to 'F2'.
The Outlook was revised from Negative to Stable. The downgrade
reflects TRMK's relatively weaker earning profile relative to
others in the community bank group.
Fitch's Community Bank Peer Group is mostly defined by banks with
less than $10 billion in assets that typically operate in a
limited number of markets and, in general, are conservative,
traditional on balance-sheet lenders for local communities. The
majority of the group is rated 'BBB-' with the highest rating at
'BBB+'.
Community banks typically lag the large regional bank peer group
by geographic footprint and product/revenue diversification. As
such community banks are more susceptible to idiosyncratic risks
such as geographic or single name concentrations. The majority of
institutions within this group have retail branch networks which
reside in contiguously located counties and are typically in just
two to three states. Fitch believes these factors limit the
group's ratings to 'BBB+' and below.
Those within Fitch's community bank group have homogenous business
strategies. The institutions are mostly reliant on spread income
from loans and investments. On average, non-interest income
represents 30% of total revenues within the community bank group
while Fitch's large regional banks generate over 40% of revenue
from non-interest income. With limited opportunity to improve fee-
based income in the near term, especially as rates rise and the
mortgage refinancing boom ends, Fitch expects that community banks
will continue to face greater earnings headwinds well into 2014.
At the end of third quarter 2012, the average community bank ROA
for was 0.96% (adjusted for CPF's deferred tax asset allowance
reversal), which lags the average ROA for large regionals by 18
basis points (bps).
Fitch also anticipates the group's earnings to continue to lag the
large regional peer group as rates rise as balance sheets appear
much less asset sensitive based on both quarterly disclosures and
regulatory data.
Fitch views the Basel III final rules published in 3Q'13 as a
positive for the community bank group. The final rules were
generally less onerous than expected regarding unrealized
securities gains and losses and their inclusion in the calculation
of common equity tier 1 (CET1) for banks less than $250 billion.
The final rule also kept the risk weights for residential
mortgages consistent with existing practice at, rather than the
more punitive treatment originally proposed, providing additional
capital relief. Fitch generally believes that the community bank
group is reasonably capitalized relative to its range of ratings.
However, Fitch will continue to monitor and potentially take
action on banks that manage capital at more aggressive levels,
especially in light of earnings profiles that have not fully
recovered and above average loan growth.
Fitch observes that asset quality continues to improve throughout
the banking sector. The community bank group is no exception. Both
nonperforming assets (NPAs) and net charge-offs (NCOs) are down
materially year over year albeit at a slower pace than coming out
of the crisis. Fitch anticipates further asset quality improvement
as nonperforming loan (NPL) inflow slows. However, Fitch observes
commercial and industrial (C&I) loan growth has been significant
over the last year within the community bank group. Fitch believes
that while credit quality within this space has been solid over
recent periods, loss rates should normalize over the near term,
potentially creating a drag on earnings momentum and capital.
The community bank group's funding profile is considered a rating
strength providing a stable source of liquidity as core deposits
are stable and sticky. Although community banks are not typically
price leaders for either loans or deposits, most hold good market
positions in their respective footprints. Such examples would be
TRMK and FIBK which typically hold the 1, 2 or 3 rank positions in
their operating footprint. Nonetheless, Fitch believes that the
groups' market share positions could be challenged should loan
demand pick and competition for deposits intensifies, particularly
under a rising rate scenario.
For more information on Fitch's community bank peer group, please
see the forthcoming special report to be published over the next
couple of weeks.
Key Rating Drivers and Sensitivities - IDRS and VRs
ASRV
The affirmation of Ameriserv Financials (ASRV) ratings and Outlook
reflects its stable asset quality and earnings metrics. The bank
has consistently reported above average credit quality with non-
performing assets totalling to 0.66% of total loans plus OREO.
Regulatory capital ratios remain in excess of well capitalized
levels. However, with an efficiency ratio of over 85%, ASRV has
the weakest earnings profile of the community bank peer group.
Profitability is challenged by the bank's higher cost, organized
labor force and a lack of scale. ASRV is the smallest bank in
Fitch's community bank peer group with assets totalling $1 billion
at the end of the second quarter. The bank also has above average
concentrations in non-owner occupied commercial real estate with
over 37.5% of total loans and 184% of tier 1 capital plus loan
loss reserves in commercial investment properties.
Should the company reduce its existing expense base and improve
earnings while generating economies of scale, positive rating
actions could ensue. Conversely, should loan growth in riskier
asset classes increase or asset quality deteriorate, negative
rating actions could ensue.
CPF
Fitch upgraded the Long-Term IDR of Central Pacific Financial
Corp. (CPF) and its bank subsidiary to 'BB+' from 'BB-' on Sept.
20, 2013 due to faster than anticipated reductions of problem
loans without taking sizeable credit losses. The ratings upgrade
also reflects significant strong reserves, improved financial
performance and removal of its regulatory written agreement. See
related press release 'Fitch Details Rationale on Upgrade of
Central Pacific's IDR to 'BB+' on Community Bank Peer Review'
(dated Sept. 23, 2013) for more detailed discussion.
CBU
The affirmation of Community Bank System, Inc.'s (CBU) ratings and
Stable Outlook reflects its strong profitability relative to its
peer group, sound asset quality and stable NIM. CBU's ROA averaged
~1.10% over the past five quarters and is stronger than its peer
group mean. Despite the challenging interest rate environment, CBU
also maintained a healthy average NIM which has hovered around
3.8% over past five quarters, and is generally stronger than its
peer group average of 3.6%. CBU maintains good asset quality with
NPAs and NCOs amongst the lowest in its peer group. NPAs were
0.81% at June 30, 2013, much less than peer group average of
2.49%.
CBU's ratings have limited upward mobility, primarily due to its
lower TCE ratio relative to peers. CBU's TCE ratio of 7.01% at
June 30th, 2013 is still relatively low compared to its peer group
which had an average TCE ratio of 8.82% at June 30, 2013. Although
Fitch acknowledges CBU's lower than peer level balance sheet
risks, it believes a higher, loss-absorbing TCE ratio would need
to be achieved before positive ratings migrations occur.
CVBF
The affirmation of CVB Financial Corp.'s (CVBF) ratings and Stable
Outlook reflects the company's strong earnings and capital
profiles relative to peers. CVBF continues to post strong ROAs,
and maintains a strong lead in the community bank peer group. In
addition to its strong earnings profile, CVBF also managed
tangible and risk-adjusted capital at high levels, while keeping
its net charge-off ratio nominal. These buffers are deemed
adequate to offset any unexpected credit losses owing to the banks
concentrations in terms of geography (Southern CA) and loan type
(CRE secured).
Fitch believes there is limited further upside rating momentum
over the intermediate term. However, better portfolio and business
diversity, as well as continued improvement in earnings and credit
trends could have positive implications. Negative rating pressures
could result if asset quality deteriorates, or if capital is more
aggressively managed absent changes to asset quality or earnings.
FCF
The affirmation of First Commonwealth Financial's (FCF) ratings
and Stable Outlook reflects its relatively strong funding profile,
capital position, and asset quality compared to Fitch's community
banking peers. The bank's ratings are constrained by weak
profitability metrics and higher risk credit concentrations. The
bank's 2Q'13 earnings were challenged by sizeable losses taken on
the clean-up of a large legacy loan and the sale of another
troubled loan. While these losses underscore FCF's legacy
overconcentration risk, FCF's ratings and Outlook incorporate
these exposures. The recently reported asset losses are offset by
the bank's overall strength relative to similarly 'BBB-' rated
peers. Although some volatility is expected to continue given
these legacy concentrations, Fitch's ratings reflect the
expectation that credit quality has largely stabilized.
Should asset quality metrics continue to deteriorate or capital
levels become challenged due to aggressive capital management or
increased credit losses, negative rating actions could ensue.
Conversely, positive rating action could ensue if the bank
successfully improves its profitability and reduces its credit
concentration risks.
FIBK
The affirmation of First Interstate Bancsystems, Inc.'s (FIBK)
ratings and the Stable Outlook reflects Fitch's view of the bank's
sustained dominant market share, its consistent earnings profile
and continued asset quality improvement while it maintains
adequate capital levels for its rating and risk profile. NPAs as a
percentage of loans and OREO have decreased sequentially each
quarter since mid-2010, falling to 3.53% at 2Q'13. However, Fitch
expects NPAs to remain elevated in both historical terms and
relative to FIBK's community bank peer group, constraining its
rating at its current level. While the bank's YTD ROA exceeds
1.0%, Fitch observes that its provision expense through 2q13 is
over $22 million less than is was through the first half of 2012,
adding roughly 40 bps after-tax to its ROA. Fitch views FIBK's
capital levels as adequate for its current rating level and
expects excess capital to be used for acquisition purposes over
the near-to-mid-term.
Given FIBK's geographic concentration and continued elevated NPAs,
little rating upside is expected in the near term. Furthermore,
Fitch's view of asset quality gradually improving is incorporated
into FIBK's current rating level. However, to the extent that
management is able maintain core earnings and align the company's
performance to higher rated peers, while augmenting capital, Fitch
could take positive rating action over the long term.
FMBI
The affirmation of First Midwest Bancorp, Inc.'s (FMBI) ratings
and Stable Outlook reflects improved credit metrics due primarily
to a large bulk NPA sale toward the end of 2012 as well financial
performance in line with expectations and solid capital measures.
Fitch notes that while the company's NPA ratio has fallen nearly
190 bps since 2Q'12, relative to other, higher rated peers, NPAs
remain above average within the peer group. Earnings performance
is in-line with 'BBB-' peers. Bottom line results have stabilized
post-bulk asset sale with an ROA under 80bps even with the aid of
pre-tax reserve releases adding between 10 - 15 bps over the last
three quarters. Fitch expects that earnings will remain in the 75
bps to 90 bps ROA range over the near-to-mid-term as FMBI's
efficiency ratio levels out and margin compression continues in
this low rate environment. Fitch observes that core capital ratios
(TCE) have remained fairly stable since Fitch's last review and
remain relatively average within the community bank peer group.
Fitch generally views FMBI's current rating as well-situated at
its current level. However, to the extent that the bank begins
exhibiting adverse credit trends within growing product lines such
as its C&I or agriculture books and outside of Fitch's
expectations, negative rating action could ensue. Furthermore,
while Fitch believes that M&A activity within the community bank
peer group is inevitable, Fitch would likely re-evaluate FMBI's
ratings for either positive or negative rating action if it takes
on a sizable merger depending on the pricing of the deal, the
ensuing capital levels post-merger and the post-merger
efficiencies realized. Finally, Fitch observes that FMBI has a
relatively larger portion of its securities book in municipal
securities compared to others in the peer group. While the company
has historically experienced no losses related to this book,
material volatility in the municipal bond market resulting in
wider spreads and a growing level of unrealized losses could
result in negative rating action.
INDB
The affirmation of Independent Bank Corp.'s (INDB) ratings
reflects the company's low levels of NPAs and NCOs, which compare
favourably against its community bank peers, stable operating
performance, as measured through ROA, which has remained stable
through the cycle, and healthy NIM. INDB's NPAs at 2Q'13 were
1.85% compared to peer group average of 2.69%, and NCOs continue
to remain low.
The ratings continue to be constrained by concentration of CRE in
INDB's loan portfolio (which accounts for over half of INDB's loan
book), and a home equity portfolio which has experienced ~40%
growth since 2010 and currently accounts for 18% of the loan book.
Additionally, as a result of acquisition of Central Bank Corp,
Inc. (CEBK), capital has come under pressure with TCE at 6.72% at
2Q13 compared to 7.04%% 3Q'12. Nonetheless, Fitch anticipates
capital rebuild to more normalized levels in the medium term given
the strong earnings profile, which is a healthy mix of spread and
fee based income.
INDB's liquidity profile continues to be weaker than its community
bank peers. INDB reports an average loan-to-deposit ratio of
almost 100%, which is higher than the peer group average of 80%.
Although, contingent sources of liquidity include FHLB advances,
Federal Reserve borrowings; repurchase lines and a parent company
line of credit, Fitch would positively view an enhanced liquidity
profile. Fitch positively views INDB's deposit market share in
markets considered core to INDB.
The current ratings are at the high end of their likely range, and
the likelihood for a positive rating action is limited given the
company's capital levels. The Negative Rating Outlook reflects the
possibility of a negative ratings action if capital levels do not
improve, further deterioration in the liquidity profile occurs, or
asset quality materially worsens.
TRMK
The downgrade of Trustmark Corporation's (TRMK) ratings reflects
the issuer's weaker earnings profile and lower capital levels.
Offsetting these factors is leading market share in TRMK's home
state and incremental expansion in the Florida market given its
recent Banctrust Financial Group (BFTG) acquisition. The Outlook
was also revised to Stable from Negative. Please see the
accompanying press release for additional information on this
rating action: 'Fitch Details Rating Rationale on Downgrade of
TRMK's IDR to 'BBB+' Following Community Bank Review' (dated
Sept. 23, 2013).
Key Rating Drivers and Sensitivities - Support Rating and Support
Rating Floor
All of the community banks in the peer group have Support Ratings
of '5' and Support Floor Rating of 'NF'. In Fitch's view, the
community banks are not systemically important and therefore,
Fitch believes the probability of support is unlikely. IDRs do not
incorporate any support for the Community Bank Peer Group.
Key Rating Drivers and Sensitivities- Subordinated Debt and Other
Hybrid Securities
Subordinated debt and hybrid capital instruments issued by the
community banks are notched down from the issuers' VRs in
accordance with Fitch's assessment of each instrument's respective
non-performance and relative loss severity risk profiles, which
vary considerably. The ratings of subordinated debt and hybrid
securities are sensitive to any change in the banks' VRs or to
changes in the banks' propensity to make coupon payments that are
permitted but not compulsory under the instruments' documentation.
Subsidiary and Affiliated Company Key Rating Drivers and
Sensitivities
All of the entities reviewed in the Community Bank Group factor in
a high probability of support from parent institutions to its
subsidiaries. This reflects the fact that performing parent banks
have very rarely allowed subsidiaries to default. It also
considers the high level of integration, brand, management,
financial and reputational incentives to avoid subsidiary
defaults.
Fitch has affirmed the following ratings with a Stable Outlook:
Ameriserv Financial, Inc.
-- Long-Term IDR at 'BB';
-- Short-Term IDR at 'B';
-- Viability Rating at 'bb';
-- Support Rating at '5';
-- Support Floor at 'NF'.
Ameriserv Financial Bank
-- Long-Term IDR at 'BB';
-- Long-Term deposits at 'BB+';
-- Short-Term IDR at 'B';
-- Short-Term deposits at 'B';
-- Viability Rating at 'bb';
-- Support Rating at '5';
-- Support Floor at 'NF'.
Ameriserv Capital Trust I
-- Preferred at 'B-'.
Community Bank System, Inc.
-- Long-Term IDR at 'BBB';
-- Short-Term IDR at 'F2';
-- Viability Rating at 'bbb';
-- Support at '5';
-- Support Floor at 'NF'.
Community Bank, N.A.
-- Long-Term IDR at 'BBB';
-- Long-Term deposits at 'BBB+';
-- Short-Term IDR at 'F2';
-- Short-Term deposits at 'F2';
-- Viability Rating at 'bbb';
-- Support at '5';
-- Support Floor at 'NF'
CVB Financial Corp.
-- Long-Term IDR at 'BBB';
-- Viability rating at 'bbb';
-- Short-Term IDR at 'F2';
-- Support Floor at 'NF';
-- Support at '5'.
Citizens Business Bank
-- Long-Term IDR at 'BBB';
-- Long-Term deposit at 'BBB+';
-- Viability rating to at 'bbb';
-- Short-Term IDR at 'F2';
-- Short-Term deposit at 'F2';
-- Support Floor at 'NF';
-- Support at '5'.
CVB Statutory Trust III
-- Preferred stock at 'BB-'
First Commonwealth Financial Corp.
-- Long-Term IDR at 'BBB-';
-- Short-Term IDR at 'F3';
-- Viability Rating at 'bbb-';
-- Support Floor at 'NF'
-- Support at '5'.
First Commonwealth Bank
-- Long-Term IDR at 'BBB-';
-- Long-Term deposit at 'BBB'';
-- Short-Term IDR at 'F3';
-- Viability Rating at 'bbb-';
-- Short-Term deposit at 'F2';
-- Support Floor at 'NF';
-- Support at '5'.
First Interstate Bancsystems, Inc.
-- Long-Term IDR at 'BBB-';
-- Short-Term IDR at 'F3';
-- Viability Rating at 'bbb-';
-- Support Floor at 'NF';
-- Support '5'.
First Interstate Bank
-- Long-Term IDR at 'BBB-';
-- Long-Term deposit at 'BBB';
-- Short-Term IDR at 'F3';
-- Short-Term deposit 'F2';
-- Viability Rating at 'bbb-';
-- Support Floor at 'NF';
-- Support '5'.
First Midwest Bancorp, Inc.
-- Long-Term IDR at 'BBB-';
-- Short-Term IDR at 'F3';
-- Viability Rating at 'bbb-';
-- Senior unsecured at 'BBB-';
-- Subordinated debt at 'BB+';
-- Support '5';
-- Support Floor 'NF'.
First Midwest Bank
-- Long-Term IDR at 'BBB-';
-- Short-Term IDR at 'F3';
-- Long-Term deposits at 'BBB';
-- Short-Term deposits at 'F3'.
-- Viability Rating at 'bbb-';
-- Support '5';
-- Support Floor 'NF'.
First Midwest Capital Trust I
-- Preferred stock at 'B+'.
Fitch has affirmed the following ratings with a Negative Outlook:
Independent Bank Corp.
-- Long-Term IDR at 'BBB';
-- Short-Term IDR at 'F2';
-- Viability Rating at 'bbb';
-- Support Rating at '5';
-- Support Rating Floor at 'NF'.
Rockland Trust Company
-- Long-Term IDR at 'BBB';
-- Short-Term IDR at 'F2';
-- Viability Rating at 'bbb';
-- Support Rating at '5';
-- Support Rating Floor at 'NF';
-- Long-Term deposits at 'BBB+';
-- Short-Term deposits at 'F2'.
Fitch has upgraded the following ratings with a Stable Outlook:
Central Pacific Financial Corp.
-- Long-Term IDR to 'BB+' from 'BB-';
-- Viability rating to 'bb+' from 'bb-'
Central Pacific Bank
-- Long-Term IDR to 'BB+' from 'BB-';
-- Long-Term deposits to 'BBB-' from 'BB';
-- Viability Rating to 'bb+' from 'bb-'.
CPB Capital Trust I, II & IV
CPB Statutory Trust III & V
-- Trust preferred securities to 'BB-' from 'CC'
Fitch has downgraded the following ratings with a Stable Outlook:
Trustmark Corporation
-- Long-Term IDR to 'BBB+' from 'A-;
-- Short-Term IDR to 'F2' from 'F1';
-- Viability to 'bbb+' from 'a-'.
Trustmark National Bank
-- Long-Term IDR to 'BBB+' from 'A-';
-- Short-Term IDR to 'F2' from 'F1';
-- Long-Term deposits to 'A-' from 'A';
-- Short-Term deposits to 'F2' from 'F1'
-- Subordinated debt to 'BBB' from 'BBB+;
-- Viability to 'bbb+' from 'a-.
The Outlook was revised to Stable from Negative
Fitch has affirmed the following ratings:
Central Pacific Financial Corp.
-- Short-Term IDR at 'B'
-- Support Rating Floor at 'NF';
-- Support at '5'.
Central Pacific Bank
-- Short-Term IDR at 'B'
-- Short-Term deposits at 'B'
-- Support Rating Floor at 'NF';
-- Support Rating at '5'.
Trustmark Corporation
-- Support Floor at 'NF'.
-- Support at '5'.
Trustmark National Bank
-- Support Floor at 'NF'
-- Support at '5'.
* Fitch Says EPA Proposal Would Limit Public Power's Options
------------------------------------------------------------
Regulations to limit the emission of greenhouse gases by power
plants could be negative for public power and cooperative
utilities, Fitch Ratings says. "We believe the proposed
regulations for new plants would significantly handicap their cost
competitiveness by requiring the use of expensive, and largely
untested, carbon capture and storage technologies," Fitch says.
The Environmental Protection Agency's (EPA) proposal on Friday
would have limited impact in the near term, as the historically
low cost of natural gas-fired generation has significantly reduced
the demand for coal-fired facilities.
"Over the longer term it could preclude utilities from pursuing
new coal-fired generation, limiting future resource options. We
view resource portfolios that are cost competitive and exhibit
fuel diversity as most supportive of long-term credit quality.
"Other prospective regulations for existing plants are due to be
proposed by EPA next year and could have a profound impact. If
emission standards are applied retroactively, compliance
strategies could be extremely costly or infeasible, resulting in
the premature retirement of productive assets and significantly
higher operating and debt service costs related to replacement
capacity. While we expect public power and cooperative utilities
to recover these higher costs from end users, the financial strain
would likely result in weaker financial metrics and flexibility,
and downward rating pressure."
Fitch will evaluate the effect of the regulations once they are
finalized and enacted.
* Fitch Says California Schools Still Face Financial Risks
----------------------------------------------------------
California school districts' credit quality is expected to
stabilize over the short term as solid funding gains have eased
immediate budgetary and liquidity pressures caused by years of
declining revenues. However, there are significant pent-up cost
pressures that could ultimately neutralize or overwhelm future
funding improvements, potentially exerting downward rating
pressure over the longer term, according to a new Fitch Ratings
report.
'Although the education funding environment has improved quite a
bit from a year ago, it's unknown whether future funding growth
will keep pace with cost increases. We are especially focused on
CalSTRS [the California State Teachers' Retirement System], whose
weak and deteriorating funded status poses what we view as the
greatest long-term budgetary risk to districts,' said Scott
Monroe, Director, Fitch U.S. Public Finance.
State education formula funding has grown since hitting its
recessionary bottom in fiscal 2012, owing to state revenue growth
and the passage of voted tax rate increases which prevented a
major mid-year trigger funding cut. However, one-time expenditures
have absorbed much of the funding growth and the sales and
personal income tax rate hikes will sunset in fiscal years 2017
and 2019, respectively.
CalSTRS' annual contributions have been funded well below the
actuarially required contribution rate for some time, worsening
the pension system's already weak funded ratio. Some solutions
proposed by CalSTRS could result in substantially increased costs
to school districts, if implemented.
Fitch views the new local control funding formula as mixed for
credit quality, with positive to negative effects varying by
individual school district. The formula changes the distribution
but not the size of state funding, resulting in a zero sum game
with some school districts benefitting over time to the detriment
of others. Future state guidance will determine the flexibility of
significant new revenue streams aimed at targeted student
populations.
The risks to school districts are modestly mitigated by improved
school district liquidity and financial flexibility resulting from
significant pay-downs of state funding deferrals accumulated from
prior years, and the permanent elimination of most categorical
programs.
The state's fiscal monitoring procedures have limited school
district financial distress and will continue to provide useful
financial management oversight and fiscal forecasting tools.
* Upcoming Meetings, Conferences and Seminars
---------------------------------------------
Oct. 3-5, 2013
TURNAROUND MANAGEMENT ASSOCIATION
TMA Annual Convention
Marriott Wardman Park, Washington, D.C.
Contact: http://www.turnaround.org/
Nov. 1, 2013
AMERICAN BANKRUPTCY INSTITUTE
NCBJ/ABI Educational Program
Atlanta Marriott Marquis, Atlanta, Ga.
Contact: 1-703-739-0800; http://www.abiworld.org/
Dec. 2, 2013
BEARD GROUP, INC.
20th Annual Distressed Investing Conference
The Helmsley Park Lane Hotel, New York, N.Y.
Contact: 240-629-3300 or http://bankrupt.com/
Dec. 5-7, 2013
AMERICAN BANKRUPTCY INSTITUTE
Winter Leadership Conference
Terranea Resort, Rancho Palos Verdes, Calif.
Contact: 1-703-739-0800; http://www.abiworld.org/
The Meetings, Conferences and Seminars column appears in the
Troubled Company Reporter each Wednesday. Submissions via
e-mail to conferences@bankrupt.com are encouraged.
Last Updated: Aug. 26, 2013
*********
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 ***