/raid1/www/Hosts/bankrupt/TCR_Public/140110.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Friday, January 10, 2014, Vol. 18, No. 9
Headlines
1ST FINANCIAL: Suspending Filing of Reports with SEC
32 TOWER LLC: Case Summary & 4 Unsecured Creditors
AFA INVESTMENT: Cash Collateral Termination Date Is Jan. 15
AL HAMBRA ESTATES: Voluntary Chapter 11 Case Summary
ALLENS INC: Court Approves Bidding Procedures
ALION SCIENCE: Conference Call Held to Discuss 2013 Results
APPLIED SYSTEMS: S&P Assigns 'B' CCR on Plan Acquisition
ARCAPITA BANK: Defeats Appeal of Chapter 11 Plan Approval
ATP OIL: Ducks KO Bid in NGP Suit over Property Deals
BERNARD L. MADOFF: JPMorgan Lost In a Blizzard Of Paper
BERNARD L. MADOFF: Trustee Settles Claims v. JPMorgan for $543MM
BIZ SELL BROKERS: Involuntary Chapter 11 Case Summary
BLACKBERRY LTD: Fairfax Buys Another $250MM of Convertible Debt
BREF HR LLC: Late-Filed Report Shows $115.6MM Loss in 2012
BROADWAY FINANCIAL: Amends 17.9 Million Shares Resale Prospectus
C&K MARKET: Can Employ Henderson Bennington as Accountants
C&K MARKET: Court Approves Tonkon Torp Employment
CAPITOL BANCORP: Closes Sale of Bank Assets to Talmer
CATAMARAN CORP: S&P Hikes CCR to BB+ on Growing Industry Position
CENTRAL EUROPEAN DISTRIBUTION: Ex-COO Wants $1MM++ For Stock
CHATTAHOOCHEE VALLEY: S&P Raises Rating on $10.2MM Bonds to 'BB+'
CHRIST HOSPITAL: Prime Healthcare Gets Stay of Bankr. Ct.'s Orders
CHRIST HOSPITAL: Prime Healthcare Gets Stay on Dismissal
CITRUS VALLEY: S&P Raises Underlying Rating From 'BB+'
CNS RESPONSE: Anton & Chia Raises Going Concern Doubt
COMMUNITY HEALTH: Fitch Affirms 'B+' IDR; Outlook Negative
CONSTAR INT'L: Hires Dechert LLP as Bankruptcy Counsel
CONSTAR INT'L: To Employ Young Conaway as Local Counsel
CONSTAR INT'L: Taps Lincoln Partners as Financial Advisor
CONSTAR INT'L: Hires Prime Clerk as Administrative Advisor
DBSI INC: 'Ponzi Scheme' Applies To Case, Prosecutors Say
DEWEY STRIP: Obtains Court Approval of Plan Outline
DURANGO GEORGIA: Trustee Can't Sue Owners for Pension Underfunding
EDISON MISSION: Parties Object to Proposed Cure Costs Under Plan
ELCOM HOTEL: Associations Object to Confirmation of Plan
EUROFRESH INC: Court Dismisses Chapter 11 Case
FALKIRK FARMERS: PSC Recommends Paying $280,000 in Claims
FISKER AUTOMOTIVE: Hearing Today on WARN Claims Estimation
FISKER AUTOMOTIVE: Hearing Today on Committee's Sale Motion
FISKER AUTOMOTIVE: Confirmation Hearing Moved to Jan. 24
FURNITURE BRANDS: Plan Filing Period Extended to April 22
GREEN FIELD ENERGY: Has Final Approval to Pay Key Vendor Claims
HAMPTON CAPITAL: Court Confirms Liquidation Plan
HARRISBURG, PA: Officials Lose Appeal of State Takeover
HRK HOLDINGS: Further Orders on Loans From Regions Bank Entered
HOUSTON REGIONAL: Rockets May Continue Negotiating for Network
HOUSTON REGIONAL: Comcast Bidding for Rights to Show Astros Games
HOVNANIAN ENTERPRISES: Prices $150 Million Senior Notes Offering
IBAHN CORP: Derek Evans Okayed as Accountant, Tax Service Provider
IBAHN CORP: Feb. 3 Hearing on Exclusivity Extension Bid
INTEGRATED HEALTHCARE: Suspending Filing of Reports with SEC
KEYWELL LLC: Has Court OK to Use Cash Collateral Until Jan. 10
LANDAUER HEALTHCARE: Sells Assets to Quadrant Management
LEHMAN BROTHERS: Court Allows IRS to File Amended Claims
LEHMAN BROTHERS: Judge OKs Deal on Dismissal of Thomas Appeal
LEHMAN BROTHERS: Seeks to Reduce $115MM, Disallow $8MM in Claims
LEHMAN BROTHERS: LBI Trustee Wants to Disallow $78MM in Claims
LEHMAN BROTHERS: 49th Status Report on Claims Settlement
LEHMAN BROTHERS: Agrees to Set Off Israel Discount Bank's Claims
LIGHTSQUARED INC: Dish Shares Drop After Withdrawal of Bid
LILY GROUP: May Use Cash Collateral Thru End of January
MEDICAL ALARM: 2012 Report Shows $2MM Loss, Going Concern Doubt
METRO FUEL: Bayside Wants Case Converted; Committee Objects
MONTREAL MAINE: Official Victims Committee Defends Appointment
MONTREAL MAINE: Ch.11 Trustee Can Tap Shaw Fishman as Counsel
MT. LAUREL LODGING: Jan. 31 Status Hearing on Cash Collateral Use
NATIONAL ENVELOPE: Wants Plan Filing Period Extended to April 7
NATURAL PORK: Wants Plan Filing Period Extended to Jan. 21
NEWPAGE CORP: Verso Paper Deal Cues S&P to Put B+ CCR on Watch Neg
OCZ TECHNOLOGY: Hires Mayer Brown as Special Transactional Counsel
OCZ TECHNOLOGY: Taps Young Conaway as Attorneys
OCZ TECHNOLOGY: Taps RAS Management as Financial Advisor
OCZ TECHNOLOGY: Hires Mayer Brown as Special Transactional Counsel
ORMET CORP: Has Authority to Sell Excess Assets to Alcoa
OTELCO INC: Acquires Cloud Hosting and Managed Services Provider
PARADISE HOSPITALITY: Feb. 13 Hearing on Bid to Make Plan Changes
PATIENT SAFETY: John Francis Approves Merger Pact with Stryker
PATIENT SAFETY: Brian Stewart OKs Planned Merger with Stryker
PATRIOT COAL: Jan. 28 Hearing on Objection to Pettry Claims
PEREGRINE FINANCIAL: Trustee Settles on Who Can Sue Banks
PERMA-FIX ENVIRONMENTAL: Incurs $808-K Net Loss in Third Quarter
PROGEN PHARMACEUTICALS: PKF O'Connor Raises Going Concern Doubt
PURE BIOSCIENCE: Posts $3.84-Mil. Net Loss in Oct. 31 Quarter
REAL ESTATE ASSOCIATES: Transfers Interest in Newton Apartments
REEVES DEVELOPMENT: Filed an Updated Plan Outline at Dec. 31
RG STEEL: Court Allows Sea Port to Provide Additional Services
RG STEEL: Wins Approval to Sell Assets to Siemens for $400,000
SABRA HEALTH: S&P Affirms 'B+' Corp. Credit Rating
SAN BERNARDINO, CA: Wants Until April 15 to Decide on Leases
SAND SPRING: Cantor Settlement Agreement Declared Effective
SCRUB ISLAND: Has Until Feb. 13 to File Chapter 11 Plan
SCRUB ISLAND: Hearing on Bankruptcy Loan Requests Moved to Jan. 15
SCRUB ISLAND: Files Schedules of Assets and Liabilities
SEARS HOLDINGS: Sears Issues Dismal Outlook as Holiday Sales Fall
SEASTAR SOLUTIONS: S&P Assigns 'B' Corp. Credit Rating
SECUREALERT INC: Inks $25-Mil. Credit Facility with Tetra House
SENTINEL MANAGEMENT: Trustee Differs With BNY on Appeal Meaning
SHOTWELL LANDFILL: Balks at LSCG's Foreclosure Bid
SHOTWELL LANDFILL: Double J Wants Claim Estimated for Plan Voting
SHOTWELL LANDFILL: Confirmation Hearing Continued Sine Die
SIMPLY WHEELZ: Sixt Appeals Sale, Says Auction May Be Rigged
SIMPLY WHEELZ: Asks Regulators to Approve Sale of Assets
SOCAL EATS: Case Summary & 20 Largest Unsecured Creditors
SOUND SHORE: Court Okays Assumption & Assignment of More Leases
SR REAL: Jan. 13 Hearing to Approve Foley & Lardner Employment
ST. FRANCIS' HOSPITAL: Jan. 21 Hearing on $20-Mil. DIP Loan
ST. FRANCIS' HOSPITAL: Amends Notice on Health Quest-Led Sale
ST. FRANCIS' HOSPITAL: Says Patient Care Ombudsman Unnecessary
TLO LLC: Six Unsec. Creditors Named to Official Committee
TRINITY COAL: Maturity Date of DIP Loan Extended Until Feb. 28
UMED HOLDINGS: Reports $616-K Net Loss for Sept. 30 Quarter
UNIVERSAL HEALTH: BankUnited Drops Bid to Enforce Voting Rights
UNIVERSITY GENERAL: To Present at Sidoti Conference on Jan. 13
VELTI INC: Asgaard Capital OK'd as Creditors' Panel Advisor
VELTI INC: Capstone Advisory OK'd as Creditors' Panel Consultant
VELTI INC: Has Court's Nod to Hire DLA Piper LLP as Counsel
VELTI INC: Panel OK'd to Hire McGuireWoods as Lead Counsel
VELTI INC: Panel Has OK to Hire Morris Nichols as Co-Counsel
VELTI INC: U.S. Trustee Objects to Deloitte FAS Hiring
VERSO PAPER: S&P Lowers Corporate Credit Rating to 'CC'
WORLDWIDE ENERGY: Is Hiding Deceitful Past, Creditors Say
YRC WORLDWIDE: Teamsters Reject Contract Extension
* Ch. 13 Bars Tax Deed Owner's Property Claim, 7th Circ. Says
* Court Clarifies Rules Governing Pre-Judgment Interest
* Jury Won't See Cohen Deposition in SAC Insider Trial
* Tax Certificates Are Secured Claims, Appeals Court Says
* California Pension Reformer Disputes Write-up of Initiative
* Federal Probe Targets Banks over Bonds
* Few Maturities, Strong Demand Mean Few Defaults, Moody's Says
* JPMorgan Fails to Dismiss California Debt Collection Case
* U.S. Bank Loan Growth Driven by Smaller Institutions, Fitch Says
* K.K.R. Raises $2 Billion Credit Fund
* BOOK REVIEW: The Phoenix Effect: Nine Revitalizing Strategies
No Business Can Do Without
*********
1ST FINANCIAL: Suspending Filing of Reports with SEC
----------------------------------------------------
First-Citizens Bank & Trust Company, as successor by merger to 1st
Financial Services Corporation, filed a Form 15 with the U.S.
Securities and Exchange Commission to voluntarily terminate the
registration of 1st Financial's common stock, $5.00 par value,
under Section 12(d) of the Securities Exchange Act of 1934. As a
result of the Form 15 filing, 1st Financial is not anymore obliged
to file reports with the SEC.
As reported by the TCR on Jan. 8, 2014, 1st Financial and its
subsidiary, Mountain 1st Bank & Trust Company, merged with and
into First Citizens Bank effective as of Jan. 1, 2014.
About 1st Financial
Hendersonville, North Carolina-based 1st Financial Services
Corporation is the bank holding company for Mountain 1st Bank &
Trust Company. 1st Financial has essentially no other assets or
liabilities other than its investment in the Bank. 1st
Financial's business activity consists of directing the activities
of the Bank. The Bank has a wholly owned subsidiary, Clear Focus
Holdings LLC.
The Bank was incorporated under the laws of the state of North
Carolina on April 30, 2004, and opened for business on May 14,
2004, as a North Carolina chartered commercial bank. At Dec. 31,
2011, the Bank was engaged in general commercial banking primarily
in nine western North Carolina counties: Buncombe, Catawba,
Cleveland, Haywood, Henderson, McDowell, Polk, Rutherford, and
Transylvania. The Bank operates under the banking laws of North
Carolina and the rules and regulations of the Federal Deposit
Insurance Corporation (the FDIC).
As a North Carolina bank, the Bank is subject to examination and
regulation by the FDIC and the North Carolina Commissioner of
Banks. The Bank is further subject to certain regulations of the
Federal Reserve governing reserve requirements to be maintained
against deposits and other matters. The business and regulation
of the Bank are also subject to legislative changes from time to
time.
The Bank's primary market area is southwestern North Carolina.
Its main office and Hendersonville South office are located in
Hendersonville, North Carolina. At Dec. 31, 2011, the Bank also
had full service branch offices in Asheville, Brevard, Columbus,
Etowah, Forest City, Fletcher, Hickory, Marion, Shelby, and
Waynesville, North Carolina. The Bank's loans and deposits are
primarily generated from within its local market area.
1st Financial reported net income of $1.27 million in 2012 as
compared with a net loss of $20.47 in 2011. The Company's balance
sheet at Sept. 30, 2013, showed $674.65 million in total assets,
$664.70 million in total liabilities and $9.95 million in total
stockholders' equity.
Elliott Davis, PLLC, in Greenville, South Carolina, issued a
"going concern" qualification on the consolidated financial
statements for the year ended Dec. 31, 2012. The independent
auditors noted that the Company has suffered recurring losses that
have eroded regulatory capital ratios, and the Company's wholly
owned subsidiary, Mountain 1st Bank & Trust Company, is under a
regulatory Consent Order with the Federal Deposit Insurance
Corporation and the North Carolina Commissioner of Banks that
requires, among other provisions, capital ratios to be maintained
at certain heightened levels. In addition, the Company is under a
written agreement with the Federal Reserve Bank of Richmond that
requires, among other provisions, the submission and
implementation of a capital plan to improve the Company and the
Bank's capital levels. As of Dec. 31, 2012, both the Bank and the
Company are considered "significantly undercapitalized" based on
their respective regulatory capital levels.
32 TOWER LLC: Case Summary & 4 Unsecured Creditors
--------------------------------------------------
Debtor: 32 Tower, LLC
816 56th Street
Brooklyn, NY 11220
Case No.: 14-40067
Chapter 11 Petition Date: January 8, 2014
Court: United States Bankruptcy Court
Eastern District of New York (Brooklyn)
Judge: Hon. Elizabeth S. Stong
Debtor's Counsel: Fred S Kantrow, Esq.
THE LAW OFFICES OF AVRUM J ROSEN, PLLC
38 New Street
Huntington, NY 11743
Tel: (631) 423-8527
Fax: (631) 423-4536
Email: fkantrow@avrumrosenlaw.com
- and -
Avrum J Rosen, Esq.
THE LAW OFFICES OF AVRUM J ROSEN, PLLC
38 New Street
Huntington, NY
Tel: 631-423-8527
Fax: 631-423-4536
Email: ajrlaw@aol.com
Total Assets: $0
Total Liabilities: $7.16 million
The petition was signed by Miriam Chan, managing member.
A list of the Debtor's four largest unsecured creditors is
available for free at http://bankrupt.com/misc/nyeb14-40067.pdf
AFA INVESTMENT: Cash Collateral Termination Date Is Jan. 15
-----------------------------------------------------------
AFA Investment Inc. and its debtor affiliates notified the U.S.
Bankruptcy Court for the District of Delaware that they have
reached an agreement with the agent for the second lien lenders to
a further extension of the termination date under the interim cash
collateral court order through and including Jan. 15, 2014.
The Second Lien Agent and the Committee of Unsecured Creditors
previously agreed to a further extension of the deadline to bring
any second lien challenge through and including Jan.31, 2014.
As reported by the Troubled Company Reporter on Dec. 4, 2013, the
Debtors and the Second Lien Agent notified the Court that they
have agreed to an extension of the termination date under the
interim cash collateral order through and including Dec. 6, 2013.
On Sept. 19, 2012, the Court issued the interim order that
authorized the Debtors to use cash collateral of the second lien
secured parties.
About AFA Foods
King of Prussia, Pennsylvania-based AFA Foods Inc. was one of the
largest processors of ground beef products in the United States.
AFA had seven facilities capable of producing 800 million pound of
ground beef annually. Revenue in 2011 was $958 million.
Yucaipa Cos. acquired the business in 2008 and currently owns 92%
of the common stock and all of the preferred stock.
AFA Foods, AFA Investment Inc. and other affiliates filed for
Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-11127) on
April 2, 2012, after recent changes in the market for its ground
beef products and the impact of negative media coverage related to
boneless lean beef trimmings (BLBT) affected sales.
Judge Mary Walrath presides over the case. Laura Davis Jones,
Esq., Timothy P. Cairns, Esq., and Peter J. Keane, Esq., at
Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware; Tobias
S. Keller, Esq., at Jones Day, in San Francisco; and Jeffrey B.
Ellman, Esq., and Brett J. Berlin, Esq., at Jones Day, in Atlanta,
Georgia, represent the Debtors. FTI Consulting Inc. serves as the
Debtors' financial advisors and Imperial Capital LLC serves as
marketing consultants. Kurtzman Carson Consultants LLC serves as
noticing and claims agent.
As of Feb. 29, 2012, the Debtors' books and records on a
consolidated basis, reflected approximately $219 million in assets
and $197 million in liabilities. AFA Foods, Inc., disclosed
$615,859,574 in assets and $544,499,689 in liabilities as of the
Petition Date.
Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed seven
members to the official committee of unsecured creditors in the
Debtors' cases. The Committee has obtained approval to hire
McDonald Hopkins LLC as lead counsel and Potter Anderson & Corroon
LLP serves as co-counsel. The Committee also obtained approval to
retain J.H. Cohn LLP as its financial advisor.
AFA, in its Chapter 11 case, sold plants and paid off the first-
lien lenders and the loan financing the Chapter 11 effort.
Remaining assets are $14 million cash and the right to file
lawsuits.
General Electric Capital Corp. and Bank of America Corp. provided
about $60 million in DIP financing. The loan was paid off in
July 2012.
In October 2012, the Bankruptcy Court denied a settlement that
would have released Yucaipa Cos., the owner and junior lender to
AFA Foods, from claims and lawsuits the creditors might otherwise
bring, in exchange for cash to pay unsecured creditors' claims
under a liquidating Chapter 11 plan. Under the deal, Yucaipa
would receive $11.2 million from the $14 million, with the
remainder earmarked for unsecured creditors. Asset recoveries
above $14 million would be split with Yucaipa receiving 90% and
creditors 10%. Proceeds from lawsuits would be divided roughly
50-50.
AL HAMBRA ESTATES: Voluntary Chapter 11 Case Summary
----------------------------------------------------
Debtor: Al Hambra Estates, LLC
216 South Glen Road
Kinnelon, NJ 07405
Case No.: 14-10311
Chapter 11 Petition Date: January 8, 2014
Court: United States Bankruptcy Court
District of New Jersey (Newark)
Judge: Hon. Novalyn L. Winfield
Debtor's Counsel: Leonard S. Singer, Esq.
ZAZELLA & SINGER, ESQS.
36 Mountain View Blvd.
Wayne, NJ 07470
Tel: 973-696-1700
Fax: 973-696-3228
Email: zsbankruptcy@gmail.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Nancy Rifai, member.
The Debtor did not file a list of its largest unsecured creditors
when it filed the petition.
ALLENS INC: Court Approves Bidding Procedures
---------------------------------------------
Judge Ben Barry of the U.S. Bankruptcy Court for the Western
District of Arkansas, Fayetteville Division, authorized Allens,
Inc., and All Veg, LLC, to designate Seneca Foods Corporation as
the stalking horse purchaser for substantially all of the Debtors'
assets. The Court also approved the procedures governing the
bidding and auction of the Debtors' assets.
Seneca signed an agreement to purchase the Debtors' assets for
$148 million plus assumption of specified debt.
The Debtors and the Stalking Horse Purchaser have agreed that the
terms of the Stalking Horse Purchase Agreement are amended and
modified to provide that (a) the Sale Hearing must occur by
Feb. 10, 2014 and (b) the Break-Up Fee will be $4,500,000 in all
cases except in the case of an Alternate Transaction where the
second lien secured parties are the Successful Bidder in which
case the Break-Up Fee will be $3,000,000.
The deadline for submitting bids for the assets or any portion
thereof is Jan. 27. If a bid other than the bid of the stalking
horse purchaser is timely received by Allens, the auction will
take place on Feb. 3 at the offices of Greenberg Traurig in New
York.
Counsel to the stalking horse purchaser is Tim C. Loftis, Esq., at
Jaeckle, Fleishmann & Mugel, LLP, in Buffalo, New York. Local
counsel to the stalking horse purchaser is Charles T. Coleman,
Esq., at Wright, Lindsey & Jennings, LLP, in Little Rock,
Arkansas.
About Allens Inc.
Siloam Springs, Arkansas-based Allens, Inc., a maker of canned and
frozen vegetables in business since 1926, filed for bankruptcy
(Bankr. W.D. Ark. Case No. 13-73597) on Oct. 28, 2013, seeking to
sell some divisions or reorganize as a new company.
The Debtors are represented in the case by Stan D. Smith, Esq.,
Lance R. Miller, Esq., and Chris A. McNulty, Esq., at Mitchell,
Williams, Selig, Gates & Woodyard, P.L.L.C., in Little Rock,
Arkansas; and Nancy A. Mitchell, Esq., Maria J. DiConza, Esq., and
Matthew L. Hinker, Esq., at Greenberg Traurig, LLP, in New York.
Jonathan Hickman of Alvarez & Marsal North America, LLC, serves as
the Debtors' chief restructuring officer. Cary Daniel, Nick
Campbell and Markus Lahrkamp of A&M serve as assistant CROs.
Lazard Freres & Co. LLC and Lazard Middle Market LLC serve as
investment bankers, while GA Keen Realty Advisors, LLC, serves as
real estate advisor to the Debtors.
The Official Committee of Unsecured Creditors appointed in the
case is represented by Cooley LLP's Cathy Hershcopf, Esq., and
Jeffrey L. Cohen, Esq.
ALION SCIENCE: Conference Call Held to Discuss 2013 Results
-----------------------------------------------------------
Alion hosted a conference call on Jan. 8, 2014, to discuss fourth
quarter and full year financial results for the Company's fiscal
year 2013.
About Alion Science
Alion Science and Technology Corporation, based in McLean,
Virginia, is an employee-owned company that provides scientific
research, development, and engineering services related to
national defense, homeland security, and energy and environmental
analysis. Particular areas of expertise include communications,
wireless technology, netcentric warfare, modeling and simulation,
chemical and biological warfare, program management.
Alion Science has been reporting losses for four consecutive years
from Sept. 30, 2010, to Sept. 30, 2013. This year, Alion Science
incurred a net loss of $36.59 million.
The Company's balance sheet at Sept. 30, 2013, showed $624.62
million in total assets, $793.86 million in total liabilities,
$61.89 million in redeemable common stock, $20.78 million in
common stock warrants, $130,000 in accumulated other comprehensive
loss and a $252.05 million accumulated deficit.
Deloitte & Touche LLP, in McLean, Virginia, issued a "going
concern" qualification on the consolidated financial statements
for the year ended Sept. 30, 2013. The independent auditors noted
that the Company does not expect to be able to repay its existing
debt at their scheduled maturities. The Company's financing
needs, its recurring net losses, and its excess of liabilities
over assets raise substantial doubt about its ability to continue
as a going concern, the auditors stated.
Bankruptcy Warning
The Company said in the Annual Report, "Management's cash flow
projections indicate that absent a refinancing transaction or
series of transactions, the Company will be unable to pay the
principal and accumulated unpaid interest on its Secured Notes and
Unsecured Notes when those instruments mature in November 2014 and
February 2015, respectively. Our liabilities exceed our assets
and we do not have sufficient cash flow from operating activities
to repay the Secured and Unsecured Notes at maturity. Our history
of continuing losses, our financial position, and the substantial
liquidity needs we face, could make refinancing our debt more
difficult and expensive and raises substantial doubt about the
Company's ability to continue as a going concern. Management is
actively engaged in the process of refinancing our existing
indebtedness, including identifying additional potential sources
of cash to refinance, retire or amend Alion's existing long term
debt agreements."
"We have reached a preliminary understanding with the holders of a
majority of our outstanding Unsecured Notes regarding potential
refinancing transactions involving our outstanding indebtedness
and are negotiating a definitive agreement. However, management
can provide no assurance that Alion will be able to enter into a
definitive agreement or conclude a refinancing of its Unsecured
Notes or that additional financing will be available to retire or
replace its Secured Notes, and if available, that the terms of any
transaction would be favorable. Default under the Unsecured Note
Indenture or the Secured Note Indenture could allow our debt
holders to declare all amounts outstanding under the revolving
credit facility, the Secured Notes and the Unsecured Notes to be
immediately due and payable. Any event of default could have a
material adverse effect on our business, financial condition and
operating results if creditors were to exercise their rights,
including proceeding against substantially all of our assets that
secure the Credit Agreement and the Secured Notes, and possibly
cause us to invoke insolvency proceedings including, but not
limited to, a voluntary case under the U.S. Bankruptcy Code,"
the Company said in its annual report for the year ended Sept. 30,
2013.
APPLIED SYSTEMS: S&P Assigns 'B' CCR on Plan Acquisition
--------------------------------------------------------
Standard & Poor's Rating Services said it assigned its 'B'
corporate credit rating to U.S. property/casualty (P/C) insurance
software provider Applied Systems Inc. following its announcement
that it will be acquired by new financial sponsors Hellman &
Friedman and JMI Equity for $1.8 billion. The outlook is stable.
Additionally, S&P assigned a 'B+' issue-level rating and
'2'recovery rating to Applied Systems' proposed $725 million
senior secured first-lien credit facility (comprising a
$675 million first-lien term loan due 2021 and a $50 million
revolver due 2019). The '2' recovery rating reflects S&P's
expectation for substantial (70% to 90%) recovery in the event of
a payment default.
S&P also assigned its 'CCC+' issue-level rating and '6' recovery
rating to the company's proposed $370 million second-lien term
loan due 2022. The '6' rating reflects S&P's expectation for
negligible (0% to 10%) recovery in the event of a payment default.
Proceeds from the proposed senior secured credit facilities will
be used to partially fund the purchase of Applied Systems by the
financial sponsors.
"Our rating reflects Applied Systems' 'weak' business risk profile
and 'highly leveraged financial risk profile," said Standard &
Poor's credit analyst Phil Schrank.
Applied Systems has a weak competitive position that reflects the
company's narrow product offering, end-market concentration,
limited scale, and relatively small total addressable market in
the mature P/C insurance software industry. These factors are
partially offset by the company's leading and defensible market
position in its niche market, high recurring revenue with good
visibility to revenue over the intermediate term, high customer
retention rate of roughly 95%, and consistently stable and solid
operating profitability with EBITDA margins in the high 40% area.
Further, Applied Systems' recent acquisition of the U.K. based
distributor Insurecom somewhat improved the company's geographic
diversity.
The stable outlook reflects S&P's expectation that Applied Systems
will maintain its leading position in a niche market, with a high
level of recurring revenue, providing revenue visibility and a
strong customer renewal rate.
S&P views a rating upgrade as unlikely given Applied Systems'
current high debt burden and modest FOCF generation. Further, S&P
believes that the company's sponsor ownership structure precludes
sustained deleveraging.
S&P could lower the rating if leverage does not improve within the
coming year to about 8x, and is sustained above the high-8x level
due to either increased competition or weak economic conditions,
intensified product pricing pressure, or higher research and
development expenses without corresponding revenue generation.
Debt-financed acquisitions or dividends that leave leverage at the
current level may also warrant a downgrade.
ARCAPITA BANK: Defeats Appeal of Chapter 11 Plan Approval
---------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that U.S. District Court Judge Shira A. Scheindlin in
Manhattan tossed out a sole creditor's appeal from the order
confirming Arcapita Bank BSC's reorganization plan implemented in
September.
According to the report, Judge Scheindlin denied the appeal, filed
by an individual named Hani Alsohaibi, under the doctrine of
equitable mootness. The creditor filed a claim for $1.53 million,
which was reduced by the bankruptcy judge to $149 in November.
Judge Scheindlin pointed out that since Alsohaibi hadn't obtained
a stay pending appeal, the law presumes that the appeal is moot
because the plan was "substantially consummated," the report said.
The judge added that the U.S. Court of Appeals in New York has yet
to rule on whether equitable mootness applies to a liquidating
plan as it does to a traditional reorganization plan under which a
business continues to operate.
The appeal was Alsohaibi v. Arcapita Bank BSC (In re Arcapita Bank
BSC), 13-05755, U.S. District Court, Southern District of New York
(Manhattan).
About Arcapita Bank
Arcapita Bank B.S.C., also known as First Islamic Investment Bank
B.S.C., along with affiliates, filed for Chapter 11 protection
(Bankr. S.D.N.Y. Lead Case No. 12-11076) in Manhattan on March 19,
2012. The Debtors said they do not have the liquidity necessary
to repay a US$1.1 billion syndicated unsecured facility when it
comes due on March 28, 2012.
Falcon Gas Storage Company, Inc., filed a Chapter 11 petition
(Bankr. S.D.N.Y. Case No. 12-11790) on April 30, 2012. Falcon Gas
is an indirect wholly owned subsidiary of Arcapita that previously
owned the natural gas storage business NorTex Gas Storage Company
LLC. In early 2010, Alinda Natural Gas Storage I, L.P. (n/k/a
Tide Natural Gas Storage I, L.P.), Alinda Natural Gas Storage II,
L.P. (n/k/a Tide Natural Gas Storage II, L.P.) acquired the stock
of NorTex from Falcon Gas for $515 million. Arcapita guaranteed
certain of Falcon Gas' obligations under the NorTex Purchase
Agreement.
The Debtors tapped Gibson, Dunn & Crutcher LLP as bankruptcy
counsel, Linklaters LLP as corporate counsel, Towers & Hamlins LLP
as international counsel on Bahrain matters, Hatim S Zu'bi &
Partners as Bahrain counsel, KPMG LLP as accountants, Rothschild
Inc. and financial advisor, and GCG Inc. as notice and claims
agent.
Milbank, Tweed, Hadley & McCloy LLP represents the Official
Committee of Unsecured Creditors. Houlihan Lokey Capital, Inc.,
serves as its financial advisor and investment banker.
Founded in 1996, Arcapita is a global manager of Shari'ah-
compliant alternative investments and operates as an investment
bank. Arcapita is not a domestic bank licensed in the United
States. Arcapita is headquartered in Bahrain and is regulated
under an Islamic wholesale banking license issued by the Central
Bank of Bahrain. The Arcapita Group employs 268 people and has
offices in Atlanta, London, Hong Kong and Singapore in addition to
its Bahrain headquarters. The Arcapita Group's principal
activities include investing on its own account and providing
investment opportunities to third-party investors in conformity
with Islamic Shari'ah rules and principles.
The Arcapita Group had roughly US$7 billion in assets under
management. On a consolidated basis, the Arcapita Group owns
assets valued at roughly US$3.06 billion and has liabilities of
roughly US$2.55 billion. The Debtors owe US$96.7 million under
two secured facilities made available by Standard Chartered Bank.
Arcapita explored out-of-court restructuring scenarios but was
unable to achieve 100% lender consent required to effectuate the
terms of an out-of-court restructuring.
Subsequent to the Chapter 11 filing, Arcapita Investment Holdings
Limited, a wholly owned Debtor subsidiary of Arcapita in the
Cayman Islands, issued a summons seeking ancillary relief from the
Grand Court of the Cayman Islands with a view to facilitating the
Chapter 11 cases. AIHL sought the appointment of Zolfo Cooper as
provisional liquidator.
As reported in the TCR on Jun 19, 2013, the Bankruptcy Court for
the Southern District of New York entered its Findings of Fact,
Conclusions of Law, and Order confirming the Second Amended Joint
Chapter 11 Plan of Reorganization of Arcapita Bank B.S.C.(c) and
Related Debtors with respect to teach Debtor other than Falcon Gas
Storage Company, Inc.
A copy of the Confirmed Second Amended Joint Plan (With First
Technical Modifications) is available at:
http://bankrupt.com/misc/arcapita.doc1265.pdf
The effective date of the Debtors' Second Amended Joint Plan of
Reorganization, dated as of June 11, 2013, occurred on Sept. 17,
2013, according to papers filed with the U.S. Bankruptcy Court for
the Southern District of New York on Sept. 17, 2013.
ATP OIL: Ducks KO Bid in NGP Suit over Property Deals
-----------------------------------------------------
Judge Marvin Isgur of the U.S. Bankruptcy Court for the Southern
District of Texas, Houston Division, denied NGP Capital Resources
Company's motion for summary judgment relating to whether certain
prepetition transactions between ATP Oil and NGP Capital were real
property conveyances or were actually debt instruments.
NGP Capital filed a motion for summary judgment seeking a ruling
on whether the conveyances between ATP and NGP Capital is a
disguised financing transaction or a true sale of incorporeal
immovable (real) property interests.
In denying NGP Capital's motion for summary judgment, Judge Isgur
found that there is genuine issue of material facts as to whether
the NGP transaction is consistent with a "Term ORRI" under
Louisiana law and whether the NGP conveyance is consistent with
the definition of a loan under Louisiana law.
The adversary proceeding is NGP CAPITAL RESOURCES COMPANY,
Plaintiff, vs. ATP OIL & GAS CORPORATION, Defendant, Case No. 12-
03443 (In re ATP Oil, Case No. 12-36187).
About ATP Oil
Houston, Texas-based ATP Oil & Gas Corporation is an international
offshore oil and gas development and production company focused
in the Gulf of Mexico, Mediterranean Sea and North Sea.
ATP Oil & Gas filed a Chapter 11 petition (Bankr. S.D. Tex. Case
No. 12-36187) on Aug. 17, 2012. Attorneys at Mayer Brown LLP,
serve as bankruptcy counsel. Munsch Hardt Kopf & Harr, P.C., is
the conflicts counsel. Motley Rice LLC and Fayard & Honeycutt,
APC serve as special counsel. Opportune LLP is the financial
advisor and Jefferies & Company is the investment banker.
Kurtzman Carson Consultants LLC is the claims and notice agent.
ATP disclosed assets of $3.6 billion and $3.5 billion of
liabilities as of March 31, 2012. Debt includes $365 million on a
first-lien loan where Credit Suisse AG serves as agent. There is
$1.5 billion on second-lien notes with Bank of New York Mellon
Trust Co. as agent. ATP's other debt includes $35 million on
convertible notes and $23.4 million owing to third parties for
their shares of production revenue. Trade suppliers have claims
for $147 million, ATP said in a court filing.
An official committee of unsecured creditors has been appointed in
the case. Evan R. Fleck, Esq., at Milbank, Tweed, Hadley &
McCloy, in New York, represents the Creditors Committee as
counsel.
A seven-member panel of equity security holders has also been
appointed in the case. Kyung S. Lee, Esq., and Charles M. Rubio,
Esq. of Diamond McCarthy LLP, in Houston, Texas, serve as counsel
to the Equity Committee.
BERNARD L. MADOFF: JPMorgan Lost In a Blizzard Of Paper
-------------------------------------------------------
Floyd Norris, writing for The New York Times, reported that
documents released this week by federal prosecutors do not show
whether JPMorgan Chase deliberately covered up Bernard L. Madoff,
and the bank probably did not. JPMorgan was penalized for failing
to report "suspicious activity" in Mr. Madoff's account at the
bank -- the account that took in money from the Ponzi investors
and paid out withdrawals.
According to the report, what the documents do show, however, is a
huge bureaucracy where employees stuck to their own silos and did
not communicate well with others. Suspicions were there, but so
were profits, and the profits seem to have outweighed any other
concerns. Many people simply filled out and filed forms, oblivious
to what those forms might, or might not, indicate.
And, in a way, that may be more troubling, the report said. If
clear crimes had been committed, then people could go to jail and
a lesson would be taught. But there is no evidence that anyone
acted with impure motives -- assuming that we accept that making
money is a proper motive. A combination of turf wars and
incompetence combined to facilitate the biggest Ponzi scheme ever.
The author said his favorite disclosure in the documents is that
JPMorgan had a requirement that a "client relationship manager"
certify every year that each client complied with all "legal and
regulatory-based policies." This was no doubt viewed as a tiresome
and routine requirement, both by the bankers who did the
certifying and by the people in the compliance department who
collected the certifications.
"In March 2009," we are told in a "statement of facts" agreed to
by the bank and prosecutors, the Madoff relationship manager
"received a form letter from JPMC's compliance function asking him
to certify the client relationship again," the report further
related.
BERNARD L. MADOFF: Trustee Settles Claims v. JPMorgan for $543MM
----------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that JPMorgan Chase & Co. will pay $543 million to the
trustee for Bernard L. Madoff Investment Securities LLC and others
who were defrauded in the Ponzi scheme, in addition to the New
York-based bank's civil forfeiture of $1.7 billion to the U.S.
According to Mr. Rochelle, the bank will pay Irving Picard, the
trustee, who previously sued JPMorgan for Madoff customer losses,
$325 million. A federal district judge in New York dismissed
Picard's case, saying he was barred from suing or didn't have the
right to sue based on claims that belong to customers. JPMorgan
will also pay $218 million to settle claims Picard made in a
separate class action.
Mr. Rochelle noted that the Supreme Court justices are scheduled
to hold a conference Jan. 10 to decide whether to allow Picard's
appeal from the district court's dismissal of the suit against
JPMorgan.
The Wall Street Journal pointed out that victims of Madoff's
crimes will receive $2.24 billion in compensation as a result of
the pacts announced with JPMorgan. The Journal said prior to the
pacts, $11.8 billion had been recovered for victims and creditors
of Mr. Madoff's fraudulent operations. Of that, $4.9 billion has
been returned to investors.
The case in the Supreme Court is Picard v. JPMorgan Chase & Co.,
13-448, U.S. Supreme Court (Washington).
About Bernard L. Madoff
Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff
orchestrated the largest Ponzi scheme in history, with losses
topping US$50 billion. On Dec. 15, 2008, the Honorable Louis A.
Stanton of the U.S. District Court for the Southern District of
New York granted the application of the Securities Investor
Protection Corporation for a decree adjudicating that the
customers of BLMIS are in need of the protection afforded by the
Securities Investor Protection Act of 1970. The District Court's
Protective Order (i) appointed Irving H. Picard, Esq., as trustee
for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP
as his counsel, and (iii) removed the SIPA Liquidation proceeding
to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789)
(Lifland, J.). Mr. Picard has retained AlixPartners LLP as claims
agent.
On April 13, 2009, former BLMIS clients filed an involuntary
Chapter 7 bankruptcy petition against Bernard Madoff (Bankr.
S.D.N.Y. 09-11893). The case is before Hon. Burton Lifland. The
petitioning creditors -- Blumenthal & Associates Florida General
Partnership, Martin Rappaport Charitable Remainder Unitrust,
Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert
US$64 million in claims against Mr. Madoff based on the balances
contained in the last statements they got from BLMIS.
On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff
Securities International Limited in London under bankruptcy
protection pursuant to Chapter 15 of the U.S. Bankruptcy Code
(Bankr. S.D. Fla. 09-16751).
The Chapter 15 case was later transferred to Manhattan. In June
2009, Judge Lifland approved the consolidation of the Madoff SIPA
proceedings and the bankruptcy case.
Judge Denny Chin of the U.S. District Court for the Southern
District of New York on June 29, 2009, sentenced Mr. Madoff to
150 years of life imprisonment for defrauding investors in United
States v. Madoff, No. 09-CR-213 (S.D.N.Y.).
From recoveries in lawsuits coupled with money advanced by SIPC,
Mr. Picard has paid about 58 percent of customer claims totaling
$17.3 billion. The most recent distribution was in March 2013.
Mr. Picard has collected about $9.35 billion, not including an
additional $2.2 billion that was forfeit to the government and
likewise will go to customers. Picard is holding almost
$4.4 billion he can't distribute on account of outstanding
appeals and disputes. The largest holdback, almost $2.8 billion,
results from disputed claims.
BIZ SELL BROKERS: Involuntary Chapter 11 Case Summary
-----------------------------------------------------
Alleged Debtor: Biz Sell Real Estate LLC
aka Biz Sell Brokers Real Estate
aka Biz Sell Brokers Real Estate LLC
aka Biz Sell Brokers LLC
2293 W 190th St
Torrance, CA 90504
Case Number: 14-10368
Involuntary Chapter 11 Petition Date: January 8, 2014
Court: United States Bankruptcy Court
Central District of California (Los Angeles)
Judge: Hon. Barry Russell
Petitioner's Counsel: Not indicated
Biz Sell Real Estate's petitioners:
Petitioner Nature of Claim Claim Amount
---------- --------------- ------------
V Boone Note $20,582
15627 S Broadway
Gardena, CA 90248
Gerry Smith Note $42,000
2293 W 190th St
Torrance, CA 90504
BLACKBERRY LTD: Fairfax Buys Another $250MM of Convertible Debt
---------------------------------------------------------------
Will Connors, writing for The Wall Street Journal, reported that
BlackBerry Ltd. said its largest shareholder, Fairfax Financial
Holdings Ltd. will purchase another $250 million of the struggling
smartphone maker's convertible debt.
According to the report, in November, BlackBerry scrapped a plan
to sell itself to Fairfax for $4.7 billion and instead announced a
deal that saw Fairfax and several others, including a sovereign-
wealth fund based in Qatar and several Canadian investment funds,
invest a combined $1 billion into the company.
Fairfax's $250 million investment, part of an option related to
the original investment, brings Fairfax's total investment to $500
million, the report said. The debentures can be converted into
common shares of BlackBerry at $10 each.
Fairfax said that assuming full conversion of the debentures it
would own 17.6% of BlackBerry's outstanding shares, the report
related.
The other debt purchasers announced in November include Ontario-
based Canso Investment Counsel Ltd., which invested $300 million,
Toronto-based Mackenzie Financial Corp., Virginia-based Markel
Corp., Toronto-based Brookfield Asset Management Inc. and Qatar
Holding LLC, the report further related.
About BlackBerry
BlackBerry(R) revolutionized the mobile industry when it was
introduced in 1999. Based in Waterloo, Ontario, BlackBerry
operates offices in North America, Europe, Asia Pacific and Latin
America. BlackBerry is listed on the NASDAQ Stock Market (NASDAQ:
BBRY) and the Toronto Stock Exchange (TSX: BB). See
http://www.blackberry.com/
In September 2013, The Wall Street Journal, reported that
BlackBerry Ltd. is letting go of up to 40% of its employees by the
end of the year. BlackBerry had 12,700 employees as of
March, the last time it disclosed a total number.
BlackBerry, once a dominant smartphone maker, has lost market
share to competitors such as Apple Inc. and Samsung
Electronics Co.
The Company's balance sheet at June 1, 2013, showed $13.07 billion
in total assets, $3.67 billion in total liabilities and
$9.39 billion in shareholders' equity.
BREF HR LLC: Late-Filed Report Shows $115.6MM Loss in 2012
----------------------------------------------------------
BREF HR, LLC, filed with the U.S. Securities and Exchange
Commission on Dec. 23, 2013, its annual report on Form 10-K for
the year ended Dec. 31, 2012.
Deloitte & Touche LLP expressed substantial doubt about the
Company's ability to continue as a going concern, citing recurring
losses from operations and the potential debt repayments at March
1, 2014.
The Company reported a net loss of $115.6 million on $198.54
million of net revenues in 2012, compared with a net loss of $66.1
million on $164.65 million of net revenues in 2011.
The Company's balance sheet at Dec. 31, 2012, showed
$627.84 million in total assets, $722.85 million in total
liabilities, and stockholders' deficit of $95.01 million.
A copy of the Form 10-K for the year ended Dec. 31, 2012 is
available at: http://is.gd/oOdfFn
A copy of the Form 10-Q for the quarter ended March 31, 2012 is
available for free at: http://is.gd/elOGrS
A copy of the Form 10-Q for the quarter ended June 30, 2012 is
available for free at: http://is.gd/Wbn7Nt
A copy of the Form 10-Q for the quarter ended Sept. 30, 2012 is
available for free at: http://is.gd/WGMhq0
About BREF HR
New York-based BREF HR, LLC, is a Delaware limited liability
company that was formed on Feb. 11, 2011. The affairs of the
Company are governed by a Limited Liability Company Agreement
dated as of March 1, 2011.
The Company was formed by certain affiliates of Brookfield
Financial, LLC, as to its Series B to acquire the limited
liability company interests of HRHH JV Junior Mezz, LLC, and HRHH
Gaming Junior Mezz, LLC, which indirectly own the Hard Rock Hotel
& Casino Las Vegas and certain related assets. These assets were
acquired pursuant to the Assignment from Hard Rock Hotel Holdings,
LLC ("HRH Holdings") in connection with the default by HRH
Holdings and its subsidiaries on the real estate financing
facility, and the resulting settlement agreement. Brookfield
Financial is managed by Brookfield Real Estate Financial Partners
LLC.
BROADWAY FINANCIAL: Amends 17.9 Million Shares Resale Prospectus
----------------------------------------------------------------
Broadway Financial Corporation amended its registration statement
on Form S-1 relating to the resale or other disposition by
BBCN Bancorp, Inc., BBCN Bank, Butterfield Trust (Bermuda)
Limited, et al., of up to 17,956,700 shares of common stock.
The selling stockholders may sell, transfer or otherwise dispose
of any or all of their shares of common stock from time to time on
any stock exchange, market or trading facility on which the shares
are traded or in private transactions. Those sales, transfers or
other dispositions may be at fixed prices, at prevailing market
prices at the time of sale, at prices related to prevailing market
prices, at varying prices determined at the time of sale or at
negotiated prices.
The Company is not offering any shares of common stock for sale
pursuant to this prospectus and will not receive any of the
proceeds from sales of the shares.
The Company's common stock is currently traded on the NASDAQ
Capital Market under the symbol "BYFC." On Jan. 6, 2014, the
closing sale price for the Company's common stock as reported by
the NASDAQ Capital Market was $1.05 per share.
A copy of the Form S-1/A is available for free at:
http://is.gd/z5AaEw
About Broadway Financial
Los Angeles, Calif.-based Broadway Financial Corporation was
incorporated under Delaware law in 1995 for the purpose of
acquiring and holding all of the outstanding capital stock of
Broadway Federal Savings and Loan Association as part of the
Bank's conversion from a federally chartered mutual savings
association to a federally chartered stock savings bank. In
connection with the conversion, the Bank's name was changed to
Broadway Federal Bank, f.s.b. The conversion was completed, and
the Bank became a wholly owned subsidiary of the Company, in
January 1996.
The Company is currently regulated by the Board of Governors of
the Federal Reserve System. The Bank is currently regulated by
the Office of the Comptroller of the Currency and the Federal
Deposit Insurance Corporation.
Broadway Financial disclosed net income of $588,000 on
$19.89 million of total interest income for the year ended
Dec. 31, 2012, as compared with a net loss of $14.25 million on
$25.11 million of total interest income during the prior year.
Crowe Horwath LLP, in Sacramento, California, issued a "going
concern" qualification on the consolidated financial statements
for the year ended Dec. 31, 2012. The independent auditors noted
that the Company has a tax sharing liability to its consolidated
subsidiary that exceeds its available cash, the Company is in
default under the terms of a $5 million line of credit with
another financial institution lender in which the stock of its
subsidiary bank, Broadway Federal Bank is held as collateral for
the line of credit and the Company and the Bank are both under
formal regulatory agreements. Furthermore, the Company and the
Bank are not in compliance with these agreements and the Company's
and the Bank's capital plan that was submitted under the
agreements has been preliminarily approved subject to completion
of its recapitalization. Failure to comply with these agreements
exposes the Company and the Bank to further regulatory sanctions
that may include placing the Bank into receivership. These
matters raise substantial doubt about the ability of Broadway
Financial Corporation to continue as a going concern.
The Company's balance sheet at Sept. 30, 2013, showed
$345.67 million in total assets, $320.08 million in total
liabilities, and $25.58 million in total stockholders' equity.
C&K MARKET: Can Employ Henderson Bennington as Accountants
----------------------------------------------------------
C&K Markets, Inc., sought and obtained authority from the U.S.
Bankruptcy Court for the District of Oregon to employ Henderson
Bennington Moshofsky, P.C., as accountants to assist the Debtor
with accounting and tax issues arising in the Chapter 11 case.
The professional services that Henderson Bennington is to render
include reviewing the Debtor's prior accounting and record
keeping, preparing financial statements, preparing 2015 Reports,
preparing payroll tax returns, assisting the Debtor with the
preparation of its federal and state tax returns and supporting
schedules, preparing any bookkeeping entries necessary in
connection with preparation of the Debtor's tax returns, preparing
and posting any adjusting entries, and generally assisting the
Debtor in accounting and tax matters as may be required.
The Henderson Bennington professionals who will be primarily
responsible for providing services and their current billing rates
are as follows:
Name Hourly Rate
---- -----------
Judith V. Bennington $230
Stephen P. Moshofsky $230
Lai Wa Ng $190
Inna L. Schtokh $140
Kenneth M. Bakondi $140
Trudy E. Bradetich $55
Karin von Krenner $55
The firm will also be reimbursed for reasonable out-of-pocket
expenses.
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.
About C&K Market
C&K Market Inc., a 57 year-old grocery store chain, sought
bankruptcy protection from creditors with a plan to sell or close
some of its stores, on Nov. 19, 2013 (Bankr. D. Ore. Case No.
13-64561). The case is assigned to Judge Frank R. Alley, III.
C&K Market scheduled $157,696,921 in total assets and $101,604,234
in total liabilities.
The Debtors are represented by Albert N. Kennedy, Esq., Timothy J.
Conway, Esq., Michael W. Fletcher, Esq., and Ava L. Schoen, Esq.,
at Tonkon Torp LLP, in Portland, Oregon. Edward Hostmann has been
tapped as chief restructuring officer, and The Food Partners, LLC,
serves as the Debtors' financial advisor. The Debtors hired Great
American Group, LLC, to conduct store closing sales.
An Official Committee of Unsecured Creditors appointed in the
Debtors' cases has retained Scott L. Hazan, Esq., David M. Posner,
Esq., and Jenette A. Barrow-Bosshart, Esq., at Otterbourg P.C. as
lead co-counsel, and Tara J. Schleicher, Esq., at Farleigh Wada
Witt as local co-counsel; and Protiviti, Inc. as financial
consultant.
C&K MARKET: Court Approves Tonkon Torp Employment
-------------------------------------------------
C&K Market Inc. sought and obtained approval from the U.S.
Bankruptcy Court to employ Tonkon Torp LLP.
C&K Market Inc., a 57 year-old grocery store chain, sought
bankruptcy protection from creditors with a plan to sell or close
some of its stores, on Nov. 19, 2013 (Bankr. D. Ore. Case No.
13-64561). The case is assigned to Judge Frank R. Alley, III.
C&K Market scheduled $157,696,921 in total assets and $101,604,234
in total liabilities.
The Debtors are represented by Albert N. Kennedy, Esq., Timothy J.
Conway, Esq., Michael W. Fletcher, Esq., and Ava L. Schoen, Esq.,
at Tonkon Torp LLP, in Portland, Oregon. Edward Hostmann has been
tapped as chief restructuring officer, and The Food Partners, LLC,
serves as the Debtors' financial advisor. The Debtors hired Great
American Group, LLC, to conduct store closing sales.
An Official Committee of Unsecured Creditors appointed in the
Debtors' cases has retained Scott L. Hazan, Esq., David M. Posner,
Esq., and Jenette A. Barrow-Bosshart, Esq., at Otterbourg P.C. as
lead co-counsel, and Tara J. Schleicher, Esq., at Farleigh Wada
Witt as local co-counsel; and Protiviti, Inc. as financial
consultant.
CAPITOL BANCORP: Closes Sale of Bank Assets to Talmer
-----------------------------------------------------
Capitol Bancorp Ltd., its affiliate Financial Commerce
Corporation, on January 1, 2014, completed the sale, assignment
and transfer of assets to Talmer Bancorp, Inc. Immediately prior
to the completion of the transaction, Indiana Community Bank, an
Indiana state-chartered bank, Bank of Las Vegas, a Nevada state-
chartered bank and Sunrise Bank of Albuquerque, a New Mexico
state-chartered bank were merged with and into Michigan Commerce
Bank, a Michigan state-chartered bank, with Michigan Commerce Bank
as the surviving entity -- the "Surviving Bank". Capitol, through
its affiliate FCC, previously owned all of the issued and
outstanding shares of capital stock of each of Indiana Community
Bank, Michigan Commerce Bank, Bank of Las Vegas, and Sunrise Bank
of Albuquerque.
Capitol, FCC and Talmer, owned by Wilbur Ross, entered into a
Stock Purchase Agreement on October 11, 2013, to sell, assign and
transfer to Talmer: (i) all of the issued and outstanding shares
of common stock of the Surviving Bank; (ii) all bank related
contracts; (iii) all right, title and interest to any proceeds
received or to be received after December 31, 2012 related to any
such contract; (iv) all of the trademarks and service marks
registered to Capitol; and (v) certain other assets of Capitol and
FCC for a cash purchase price of $4.0 million. In addition,
Talmer agreed to make an equity contribution into the Surviving
Bank at closing in the amount of up to $90 million and to pay $2.5
million of certain post-petition administrative fees and expenses
incurred in Capitol and FCC's bankruptcy cases, and with respect
to any contract or agreement to which Capitol or FCC is a party,
pay the amount required to be paid with respect to such contract
or agreement to cure all monetary defaults under such contract or
agreement to the extent required by Section 365(b) of Chapter 11
of the Bankruptcy Code.
Jan. 21 Hearing on Revised Plan,
Accord With Committee
In conjunction with the voluntary petitions, the Debtors filed a
proposed Prepackaged Joint Chapter 11 Plan of Reorganization and
related Disclosure Statement with the Bankruptcy Court. That Plan
was accepted by the requisite majorities of creditors and equity
holders in all classes. Problems arose when affiliates of
Valstone Partners LLC declined to proceed with a tentative
agreement to fund the reorganization by paying $50 million for
common and preferred stock while buying $207 million in face
amount of defaulted commercial and residential mortgages.
On May 16, 2013, the Debtors filed a proposed Joint Liquidating
Plan of Capitol Bancorp Ltd. and Financial Commerce Corporation
and related Disclosure Statement with the Bankruptcy Court for the
resolution of outstanding claims against and equity security
interests in the Debtors. The Joint Liquidating Plan superseded
the Prepackaged Joint Plan of Reorganization filed by Capitol and
FCC with the Bankruptcy Court in August 2012, which was withdrawn.
On May 22, 2013, the Debtors filed an Amended Disclosure
Statement, which superseded the Disclosure Statement filed May 16,
2013. On July 17, 2013, the Debtors filed an Amended Joint
Liquidating Plan of Capitol Bancorp Ltd. and Financial Commerce
Corporation, which superseded the prior Joint Liquidating Plan of
Capitol Bancorp Ltd. and Financial Commerce Corporation. Several
parties in interest, including, but not limited to, the Official
Committee of Unsecured Creditors in the Bankruptcy Cases, filed
objections to confirmation of the Amended Joint Liquidating Plan
and to final approval of the Amended Disclosure Statement.
On December 31, 2013, the Debors filed a Motion in the Bankruptcy
Cases seeking Bankruptcy Court approval of a Settlement Agreement
with the Committee which is intended to resolve the Committee's
objections to the Amended Joint Liquidating Plan and the Amended
Disclosure Statement. A hearing is scheduled in the Bankruptcy
Cases on January 21, 2014, at which hearing the Bankruptcy Court
will consider, among other things: (i) the Settlement Motion, (ii)
the possible confirmation of the Amended Joint Liquidating Plan,
and (iii) the possible final approval of the Amended Disclosure
Statement.
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reported that Capitol was unable to win approval of the plan at
the originally scheduled confirmation hearing in mid-December
because classes representing senior noteholders, holders of trust
preferred securities, and general unsecured creditors all voted
against the plan. Only shareholders and holders of $39,500 in
priority claims were in favor of the plan.
Bloomberg said the settlement with the Committee modifies the Plan
by giving no releases to officers and directors. Claims belonging
to Capitol are transferred to the liquidating trust for
prosecution on behalf of creditors. Officers and directors won't
be required to reach into their own pockets to settle suits
because the plan will provide that recoveries can be made only
from insurance policies. The trust also receives proceeds from
sale of Capitol's bank subsidiaries, along with cash.
The settlement resolves appeals the committee was taking from
bankruptcy court approval of the sale of the remaining bank
subsidiaries to Talmer. The committee is also dropping an appeal
from approval of a settlement with the Federal Deposit Insurance
Corp.
About Capitol Bancorp
Capitol Bancorp Ltd. and Financial Commerce Corporation filed
voluntary Chapter 11 bankruptcy petitions (Bankr. E.D. Mich. Case
Nos. 12-58409 and 12-58406) on Aug. 9, 2012.
Capitol Bancorp -- http://www.capitolbancorp.com/-- is a
community banking company with a network of individual banks and
bank operations in 10 states and total consolidated assets of
roughly $2.0 billion as of June 30, 2012. CBC owns roughly 97% of
FCC, with a number of CBC affiliates owning the remainder. FCC,
in turn, is the holding company for five of the banks in CBC's
network. CBC is registered as a bank holding company under the
Bank Holding Company Act of 1956, as amended, 12 U.S.C. Sec. 1841,
et seq., and trades on the OTCQB under the symbol "CBCR."
Lawyers at Honigman Miller Schwartz and Cohn LLP represent the
Debtors as counsel. John A. Simon, Esq., at Foley & Lardner LLP,
represents the Official Committee of Unsecured Creditors as
counsel.
In its petition, Capitol Bancorp scheduled $112,634,112 in total
assets and $195,644,527 in total liabilities. The petitions were
signed by Cristin K. Reid, corporate president.
The Company's balance sheet at Sept. 30, 2012, showed
$1.749 billion in total assets, $1.891 billion in total
liabilities, and a stockholders' deficit of $141.8 million.
CATAMARAN CORP: S&P Hikes CCR to BB+ on Growing Industry Position
-----------------------------------------------------------------
Standard & Poor's Ratings Services said it raised its corporate
credit rating on Catamaran Corp. to 'BB+' from 'BB'. The outlook
is stable. At the same time, S&P raised its issue-level rating on
the company's senior secured debt to 'BBB' from 'BBB-'. The
recovery rating remains '1', indicating S&P's expectations of a
very high (90%-100%) recovery in the event of a payment default.
"We raised our ratings on Catamaran based on the strong growth in
the company's EBITDA and cash flows that have enabled it to
rapidly deleverage following acquisitions and its growing position
the PBM industry, highlighted by a number of recent contract
wins," said credit analyst Arthur Wong. "We expect Catamaran to
maintain its debt leverage at 2.5x or lower over the next two to
three years and that management will further extend its track
record of successfully building its PBM franchise via acquisitions
and organic growth."
S&P based the stable outlook on its view that the company should
continue to benefit from its integration of Catalyst, acquired in
2012, and S&P do not envision any major missteps in the
integration of Restat. S&P expects the company will maintain a
relatively conservative financial policy. While the company will
likely remain acquisitive, we expect financial metrics to remain
consistent with a modest financial risk profile assessment.
Upside scenario
S&P believes it is unlikely it will upgrade the company over the
next one to two years. Catamaran remains a distant fourth to the
leading players in an industry where size and scale matters.
Catamaran's margins are lower compared with much larger players,
Express Scripts and CVS Caremark Corp. While the company has
recently had a number of high profile contract wins, its
operational track record as one of the larger industry players is
also still limited.
Downside scenario
S&P would lower its ratings on Catamaran should the company's debt
leverage exceed 2.5x over an extended period. This would most
likely occur if the company accelerates its pace of acquisitions
in order to continue rapidly building its position in the industry
and does not utilize it cash flows to deleverage quickly. A
significant drop in EBITDA, on the order of 30% plus, caused by
major contract losses, would also result in a downgrade.
CENTRAL EUROPEAN DISTRIBUTION: Ex-COO Wants $1MM++ For Stock
------------------------------------------------------------
The former chief operating officer of bankrupt vodka distributor
Central European Distribution Corp. hit the company with an
adversary suit in Delaware bankruptcy court Tuesday, saying the
company still owes him more than $1 million in severance and
stock.
Evangelos Evangelou of Warsaw, Poland, filed a complaint for
breach of contract against the company, alleging it still owes him
$106,391 plus interest for his termination after the company?s
ownership changed hands, along with $1,094,286 plus interest for
the value of the restricted stock units he held...
About CEDC
Mt. Laurel, New Jersey-based Central European Distribution
Corporation is one of the world's largest vodka producers and
Central and Eastern Europe's largest integrated spirit beverages
business with its primary operations in Poland, Russia and
Hungary.
On April 7, 2013, CEDC and two subsidiaries sought bankruptcy
protection under Chapter 11 of the Bankruptcy Code (Bankr. D.
Del. Lead Case No. 13-10738) with a prepackaged Chapter 11 plan
that reduces debt by US$665.2 million.
Attorneys at Skadden, Arps, Slate, Meagher & Flom LLP serve as
legal counsel to the Debtor. Houlihan Lokey is the investment
banker. Alvarez & Marsal will provide the chief restructuring
officer. GCG Inc. is the claims and notice agent.
The Bankruptcy Court approved the Disclosure Statement and
confirmed the Second Amended and Restated Joint Prepackaged Plan
of Reorganization. CEDC's Plan, which won approval from the
U.S. Bankruptcy Court for the District of Delaware on May 13,
2013, was declared effective on June 5.
CHATTAHOOCHEE VALLEY: S&P Raises Rating on $10.2MM Bonds to 'BB+'
-----------------------------------------------------------------
Standard & Poor's Ratings Services raised its long-term rating to
'BB+' from 'BB-' on Lanier Health Services, Ala.'s $10.2 million
series 1997A bonds issued for Chattahoochee Valley Hospital
Society Inc., doing business as Lanier Memorial Hospital (Lanier).
The outlook is stable.
In accordance with S&P's group rating methodology, the 'BB+'
rating reflects its view of three notches of support from 'A'
rated East Alabama Health Care Authority (EAMC), as S&P considers
Lanier a strategically important subsidiary of EAMC given that
Lanier recently joined the group (through a signed definitive
agreement). S&P assessed the stand-alone credit profile on Lanier
at 'b+', reflecting its view of Lanier's small base of operations,
very challenged operations in fiscal 2013, and weak cash reserves.
"The stable outlook reflects our view that the rating is bolstered
by the signed definitive agreement with EAMC," said Standard &
Poor's credit analyst Kevin Holloran.
CHRIST HOSPITAL: Prime Healthcare Gets Stay of Bankr. Ct.'s Orders
------------------------------------------------------------------
Law360 reported that the U.S. District Court for the District of
New Jersey granted Prime Healthcare Services, Inc.'s motion for
the entry of an order staying the Dec. 3, 2013 and Dec. 20, 2013
orders of Judge Morris Stern, relating to the lawsuit Prime filed
against the successful purchaser of Christ Hospital's assets.
The Dec. 3 order dismissed Prime's lawsuit pursuing certain
economic tort claims against Hudson Hospital Propco, LLC, Hudson
Hospital Opco, LLC, Hudson Hospital Holdco, LLC, and Vivek
Garipalli. Judge Stern held that economic tort claims asserted by
a potential buyer against the successful purchaser in a bankruptcy
sale are barred by the sale-approval order and by Section 363(f)
of the Bankruptcy Code.
Counsel for Prime is McCUSKER, ANSELMI, ROSEN & CARVELLI, P.C.,
and LAW OFFICES OF WILLIAM S. KATCHEN, L.L.C. Counsel to Hudson
Hospital is McELROY, DEUTSCH, MULVANEY & CARPENTER, LLP.
About Christ Hospital
Christ Hospital filed for Chapter 11 bankruptcy (Bankr. D.N.J.
Case No. 12-12906) on Feb. 6, 2012. Christ Hospital, founded in
1872 by an Episcopalian priest, is a 367-bed acute care hospital
located in Jersey City, New Jersey at 176 Palisade Avenue, serving
the community of Hudson County. The Debtor is well-known for its
broad range of services from primary angioplasty for cardiac
patients to intensity modulated radiation therapy for those
battling cancer. Christ Hospital is the only facility in Hudson
County to offer IMRT therapy, which is the most significant
breakthrough in cancer treatment in recent years.
Christ Hospital filed for Chapter 11 after an attempt to sell the
assets fell through. Judge Morris Stern presides over the case.
Lawyers at Porzio, Bromberg & Newman, P.C., serve as the Debtor's
counsel. Alvarez & Marsal North America LLC serves as financial
advisor. Logan & Company Inc. serves as the Debtor's claim and
noticing agent.
The Health Professional and Allied Employees AFT/AFI-CIO is
represented in the case by Mitchell Malzberg, Esq., at Mitnick &
Malzberg P.C.
Attorneys at Sills, Cummis & Gross, P.C., represent the Official
Committee of Unsecured Creditors.
On March 27, 2012, Judge Stern approved the sale of the Hospital's
assets to Hudson Hospital Holdo, LLC. Hudson bid $45,271,000 for
the Hospital's assets. The sale of the Debtor's assets to Hudson
closed on July 13, 2012.
The Joint Liquidation Plan of Christ Hospital was declared
effective June 27, 2013. The Plan was confirmed June 4, 2013.
CHRIST HOSPITAL: Prime Healthcare Gets Stay on Dismissal
--------------------------------------------------------
Law360 reported that a New Jersey federal judge temporarily
blocked a bankruptcy court?s dismissal of a state civil suit filed
by Prime Healthcare Services Inc., potentially reviving Prime?s
claim that a competitor engineered an anti-competitive conspiracy
against it in order to poach a bankrupt hospital.
According to the report, U.S. District Court Judge Peter G.
Sheridan granted Prime Healthcare a temporary injunction against
U.S. District Court Judge Morris Stern?s Dec. 3 order dismissing
Prime?s suit against CarePoint, formerly known as Hudson Hospital
Holdco LLC.
In the Dec. 3 order, Judge Stern held that economic tort claims
asserted by a potential buyer against the successful purchaser in
a bankruptcy sale are barred by the sale-approval order and by
Section 363(f) of the Bankruptcy Code.
Prime Healthcare, an interested purchaser for Christ Hospital's
assets, never made an offer for the hospital. Likewise, Prime
Healthcare never never objected to the sale, although it was aware
of the process. After the sale was approved, the potential buyer
filed suit against the successful purchaser, alleging economic
tort claims that started occurring even before bankruptcy.
About Christ Hospital
Christ Hospital filed for Chapter 11 bankruptcy (Bankr. D.N.J.
Case No. 12-12906) on Feb. 6, 2012. Christ Hospital, founded in
1872 by an Episcopalian priest, is a 367-bed acute care hospital
located in Jersey City, New Jersey at 176 Palisade Avenue, serving
the community of Hudson County. The Debtor is well-known for its
broad range of services from primary angioplasty for cardiac
patients to intensity modulated radiation therapy for those
battling cancer. Christ Hospital is the only facility in Hudson
County to offer IMRT therapy, which is the most significant
breakthrough in cancer treatment in recent years.
Christ Hospital filed for Chapter 11 after an attempt to sell the
assets fell through. Judge Morris Stern presides over the case.
Lawyers at Porzio, Bromberg & Newman, P.C., serve as the Debtor's
counsel. Alvarez & Marsal North America LLC serves as financial
advisor. Logan & Company Inc. serves as the Debtor's claim and
noticing agent.
The Health Professional and Allied Employees AFT/AFI-CIO is
represented in the case by Mitchell Malzberg, Esq., at Mitnick &
Malzberg P.C.
Attorneys at Sills, Cummis & Gross, P.C., represent the Official
Committee of Unsecured Creditors.
On March 27, 2012, Judge Stern approved the sale of the Hospital's
assets to Hudson Hospital Holdo, LLC. Hudson bid $45,271,000 for
the Hospital's assets. The sale of the Debtor's assets to Hudson
closed on July 13, 2012.
The Joint Liquidation Plan of Christ Hospital was declared
effective June 27, 2013. The Plan was confirmed June 4, 2013.
CITRUS VALLEY: S&P Raises Underlying Rating From 'BB+'
------------------------------------------------------
Standard & Poor's Ratings Services raised its underlying rating
(SPUR) to 'BBB-' from 'BB+' on the California Statewide
Communities Development Authority's certificates of participation
(COPs), issued for Citrus Valley Health Partners (CVHP). The
outlook remains positive.
"The rating action reflects our view of CVHP's vastly improved
financial profile since fiscal 2011, driven by California's
provider fee program and management's strategies to strengthen the
organization's underlying operating performance," said Standard &
Poor's credit analyst Kenneth Gacka.
More specifically, the 'BBB-' SPUR and positive outlook on the
COPs reflect S&P's view of CVHP's:
-- Balance sheet that is strong for the rating;
-- Strong margins and maximum annual debt service coverage
sustained since fiscal year 2012;
-- Management team that has defined clear, strategic goals and
demonstrated a focus on improving the underlying operating
performance of the organization;
-- Modest debt burden; and
-- Good business position.
CNS RESPONSE: Anton & Chia Raises Going Concern Doubt
-----------------------------------------------------
CNS Response, Inc., filed with the U.S. Securities and Exchange
Commission in December 2013 its annual report on Form 10-K for the
fiscal year ended Sept. 30, 2013.
Anton & Cynthia, LLP, expressed substantial doubt about the
Company's ability to continue as a going concern, citing the
Company has recurring losses from operations and a net capital
deficiency.
The Company reported a net loss of $10.91 million on $130,900 of
revenues in Sept. 30, 2013, compared with a net loss of
$3.41 million on $115,000 of revenues in Sept. 30, 2012.
The Company's balance sheet at Sept. 30, 2013, showed $1.4 million
in total assets, $3.56 million in total liabilities, and
stockholders' deficit of $2.16 million.
A copy of the Form 10-K is available at:
http://is.gd/nahC3u
About CNS Response
Aliso Viejo, Calif.-based CNS Response, Inc., is a cloud-based
neurometric company focused on analysis, research, development and
the commercialization of a patented platform which allows
psychiatrists and other physicians to exchange outcome data
referenced to electrophysiology. With this information,
physicians can make more informed decisions when treating
individual patients with behavioral (psychiatric and/or addictive)
disorders. The Company's secondary Clinical Services business,
operated by its wholly-owned subsidiary, Neuro-Therapy Clinic
("NTC"), is a full service psychiatric clinic.
The Company reported a net loss of $8.86 million on $745,900 of
revenue for the year ended Sept. 30, 2011, compared with a net
loss of $8.17 million on $638,500 of revenue during the prior
year.
The Company's balance sheet at Sept. 30, 2011, showed $370,000 in
total assets, $11.79 million in total liabilities and a $11.42
million total stockholders' deficit.
Cacciamatta Accountancy Corporation, in Irvine, Calif., noted in
its report on the Company's 2011 financial results that the
Company's recurring losses from operations and net capital
deficit, raise substantial doubt about its ability to continue as
a going concern.
COMMUNITY HEALTH: Fitch Affirms 'B+' IDR; Outlook Negative
----------------------------------------------------------
Fitch Ratings has affirmed Community Health Systems, Inc.'s (CHS)
Issuer Default Rating (IDR) at 'B+'. The action follows a vote by
the shareholders of Health Management Associates, Inc. (Health
Management) approving an acquisition of the company by CHS. Fitch
is also assigning a 'BB+/RR1' rating to CHS' proposed senior
secured credit facility revolver, terms loans and senior secured
notes, and a 'B/RR5' rating to the proposed senior unsecured
notes. Proceeds will be used to fund the acquisition.
The ratings have been removed from Negative Watch and assigned a
Negative Rating Outlook.
Key Rating Drivers:
-- CHS will acquire Health Management in a cash and stock deal
valued at about $7.4 billion, including the purchase of Health
Management's public equity for $3.7 billion and the
refinancing of $3.7 billion of Health Management's outstanding
debt, plus a contingent value right (CVR) with a potential
value of approximately $270 million. Fitch expects to
withdraw the ratings on Health Management's outstanding debt
upon the close of the transaction, expected to occur later in
January.
-- Fitch believes that the strategic rationale for the
transaction is sound. It will significantly increase CHS'
operating scale, making it the largest operator of for-profit
hospitals in the country based on number of facilities, as
well as improve the company's geographic scope.
-- The addition of approximately $7.1 billion of debt to the
capital structure will result in pro forma total debt-to-
EBITDA approaching 6.0x at the close. Maintenance of the 'B+'
IDR will require an expectation of debt declining to 5.0x
EBITDA or below within 18 months following the transaction.
-- Fitch views the 5.0x leverage target as achievable and
believes organic growth in EBITDA driven by the implementation
of the Affordable Care Act (ACA) will contribute to
deleveraging. Acquisition-related synergies are also expected
to contribute to EBITDA growth.
-- Despite these growth drivers, Fitch expects that reducing
leverage to 5.0x by mid-2015 will require CHS to apply the
majority of free cash flow (FCF, cash from operations less
capital expenditures and dividends) to debt reduction.
-- The Negative Outlook reflects risks in the companies'
operating profiles that could impede deleveraging post-
transaction. Both companies have been experiencing industry-
lagging patient volume trends and are facing government
regulatory investigations into Medicare billing practices.
Solid Strategic Rationale Supported By
Healthcare Reform
Fitch views the transaction as having a sound strategic basis for
CHS because it will enhance the geographic scope of its portfolio
of acute care hospitals and add scale. The rationale for
consolidation in the healthcare provider industry is recently
encouraged by reforms, including the ACA, favoring larger,
integrated systems of care delivery. While the footprints of CHS
and Health Management do overlap in 15 states, in most regions the
two companies operate in different hospital markets. Revenue
concentration in the top three states will improve to 32% from 40%
on a stand-alone basis.
Fitch does not expect CHS to encounter any major difficulties in
the integration of Health Management; the company does have a
track record of successfully integrating acquired hospitals. It
has been several years since CHS' last sizeable transaction, of
Triad Hospitals in 2007, but the company has made a series of
smaller acquisitions of single hospitals or small hospital systems
since that time. Cost synergies are a proven component of return
on investment in hospital acquisitions, and assuming a smooth
integration process, Fitch does expect synergies to contribute to
growth in EBITDA in 2014-2015, although at a somewhat lower rate
than the $250 million that CHS expects to achieve by the end of
2015.
Weak Organic Operating Trends and Regulatory
Investigations Are a Risk
The integration process could be hampered by operating challenges
facing both companies. Both CHS and Health Management are facing
government investigations, most of which are related to the issue
of short-stay hospital admissions. During Q4'13, CHS booked a
$101 million charge to earnings to reserve for a settlement of
claims related to these investigations, providing some assurance
that the size of the potential financial penalty will not
appreciably impact financial flexibility.
The scope and timing of any potential financial penalty related to
the resolution of Health Management's regulatory issues is not
known. The acquisition consideration includes a CVR of up to $1
per share, with a potential value of about $270 million. CHS will
pay Health Management's shareholders the CVR in cash upon the
final resolution of the regulatory investigations pending with the
DOJ and SEC. The payment could be lower than $270 million if the
settlement of the investigations involves a financial liability.
Fitch expects final resolution of the investigations could take
several years.
The investigations are also contributing to lower EBITDA growth
because of higher legal expenses and pressure on operating trends.
Both companies have recently noted that a reduction in short-stay
admissions is contributing to persistently weak growth in
inpatient admissions. Health Management in particular has seen
weak growth in its largest markets, with same-hospital growth in
patient volumes lagging that of the broader for-profit hospital
industry. Evidence of stabilization of patient volume trends in
the combined company's largest hospital markets would support the
credit profile.
Meeting Leverage Target Will
Require Debt Reduction
Funding for the transaction will add roughly $7.1 billion of debt
to CHS' capital structure and drive pro forma leverage to nearly
6.0x at the close of the acquisition. Maintenance of a 'B+' IDR
will require CHS to reduce leverage to below 5.0x within 12-18
months following the close. Fitch expects growth in EBITDA in
2014-2015 to contribute to leverage reduction; however, reducing
leverage to 5.0x by mid-2015 will require CHS to apply the
majority of free cash flow (FCF) to debt reduction. Fitch
projects cash from operations of at least $1.6 billion for the
combined company starting in 2014, and projects capital
expenditures of around $1.2 billion, resulting in FCF of $400
million or greater annually.
The top use of cash across the for-profit hospital industry has
recently been hospital acquisitions, although most companies,
including CHS, have used some cash for share repurchases over the
past several years. A commitment by management to curtail
shareholder-friendly capital deployment in favor of debt reduction
over the 12-18 months following the acquisition would be
supportive of the credit profile.
Rating Sensitivities:
Maintenance of the 'B+' IDR will require CHS to reduce leverage to
5.0x by mid-2015. A downgrade could result if it appears likely
that the company will not meet this target because cash deployment
for acquisitions or shareholder payouts delays debt repayment,
growth in EBITDA is hampered by difficulties in the integration of
Health Management, or operating trends are weaker than expected.
Drivers of a Weak Operating Trend Could Include:
-- Weak macro-economic conditions in the combined company's
largest hospital markets contribute to ongoing negative growth
in organic patient volumes in 2014;
-- Persistent difficulties in the implementation of the ACA
dampen the benefits of health insurance expansion for the
hospital industry;
-- Headwinds related to the influence of the regulatory
investigations weigh on topline and margins.
A positive rating action is not anticipated before the end of
2015, since it would require the company to commit to maintain
leverage at or below 4.0x. A revision of the Rating Outlook to
Stable could occur near the end of 2014 if Fitch believes the
company has made sufficient progress in debt reduction to achieve
the 5.0x leverage target during 2015.
Fitch has taken the following rating actions:
Community Health Systems, Inc:
-- IDR affirmed at 'B+'.
CHS/Community Health Systems, Inc:
-- IDR affirmed at 'B+',
-- Senior secured credit facility affirmed at 'BB+/RR1';
-- Proposed $1 billion senior secured credit facility revolver
rated 'BB+/RR1';
-- Proposed $1 billion senior secured credit facility term loan A
rated 'BB+/RR1';
-- Proposed $2.3 billion senior secured credit facility term loan
D rated 'BB+/RR1';
-- Senior secured notes affirmed at 'BB+/RR1';
-- Proposed $1.705 billion senior secured notes rated 'BB+/RR1';
-- Senior unsecured notes affirmed at 'B/RR5';
-- Proposed $2.875 billion senior unsecured notes rated 'B/RR5'.
The Rating Outlook is revised to Negative from Stable.
The debt issue ratings are based on a recovery analysis that is
pro forma for the Health Management acquisition. The Recovery
Ratings (RR) reflect Fitch's expectation that the enterprise value
of CHS will be maximized in a restructuring scenario (going
concern), rather than a liquidation. Fitch uses a 7.0x distressed
enterprise value (EV) multiple and stresses LTM EBITDA by 30%,
considering post-restructuring estimates for interest and rent
expense and maintenance level capital expenditure as well as debt
financial maintenance covenant requirements. The 7.0x multiple is
based on recent acquisition multiples in the healthcare-provider
space as well as the recent trends in the public equity valuations
of the for-profit hospital providers.
Fitch estimates CHS' distressed enterprise valuation in
restructuring to be approximately $13.7 billion. The 'BB+/RR1'
rating for the bank facility and senior secured notes reflects
Fitch's expectations for 100% recovery under a bankruptcy
scenario. The 'B/RR5' rating on the unsecured notes reflects
Fitch's expectations for recovery of 22%. The recovery waterfall
assumes a fully drawn revolver at the proposed upsized amount of
$1 billion.
About Community Health
Headquartered in Franklin, Tennessee, Community Health Systems,
Inc. -- http://www.chs.net-- together with its subsidiaries,
provides general and specialized hospital healthcare services to
patients in the United States. Its general care hospitals offer a
range of inpatient and outpatient medical and surgical services,
such as general acute care, emergency room, general and specialty
surgery, critical care, internal medicine, obstetrics, diagnostic,
psychiatric, and rehabilitation services; and skilled nursing and
home care services based on individual community needs.
CONSTAR INT'L: Hires Dechert LLP as Bankruptcy Counsel
------------------------------------------------------
Constar International Holdings, LLC and its debtor-affiliates seek
authorization from the U.S. Bankruptcy Court for the District of
Delaware to employ Dechert LLP as attorneys, nunc pro tunc to the
Dec. 19, 2013 petition date.
The Debtors require Dechert LLP to:
(a) advise the Debtors with respect to their powers and duties
as debtors in possession in the continued management and
operation of their businesses and properties;
(b) advise and consult on the conduct of these Chapter 11
cases, including all of the legal and administrative
requirements of operating in Chapter 11;
(c) attend meetings and negotiate with representatives of
creditors and other parties in interest;
(d) take all necessary actions to protect and preserve the
Debtors' estates, including prosecuting actions on the
Debtors' behalf, defending any action commenced against the
Debtors, and representing the Debtors in negotiations
concerning litigation in which the Debtors are involved,
including objections to claims filed against the Debtors'
estates;
(e) prepare pleadings in connection with these Chapter 11
cases, including motions, applications, answers, orders,
reports, and papers necessary or otherwise beneficial to
the administration of the Debtors' estates;
(f) represent the Debtors in connection with obtaining
authority to continue using cash collateral and post-
petition financing;
(g) advise the Debtors in connection with any potential sale of
assets;
(h) appear before the Court and any appellate courts to
represent the interests of the Debtors' estates;
(i) advise the Debtors regarding tax matters;
(j) take any necessary action on behalf of the Debtors to
negotiate, prepare and obtain approval of a disclosure
statement and confirmation of a Chapter 11 plan and all
documents related thereto; and
(k) perform all other necessary legal services for the Debtors
in connection with the prosecution of these Chapter 11
cases, including: (i) analyzing the Debtors' leases and
contracts and the assumption and assignment or rejection
thereof; (ii) analyzing the validity of liens against the
Debtors; and (iii) advising the Debtors on corporate and
litigation matters.
Dechert LLP will be paid at these hourly rates:
Michael J. Sage $1,050
Brian E. Greer $780
Stephen M. Wolpert $675
Janet B. Doherty $620
Deborah S. Sohn $450
Andrew Harmeyer $405
Partners $650-$1,200
Associates $405-$750
Paraprofessionals $205-$405
Dechert LLP will also be reimbursed for reasonable out-of-pocket
expenses incurred.
During the 12-month period prior to the commencement of these
cases, Dechert LLP received an aggregate of $1,421,520.44 for
professional services performed and reimbursement of expenses
incurred in connection with Dechert LLP's representation of the
Debtors.
Within 90 days prior to the petition date, Dechert LLP received
$1,421,520.44 including $1,420,000 in advance retainers. As of
the petition date, Dechert LLP holds approximately $200,000 of an
advance retainer, subject to continuing reconciliation.
Michael J. Sage, Esq., partner at Dechert LLP, assured the Court
that the firm is a "disinterested person" as the term is defined
in Section 101(14) of the Bankruptcy Code and does not represent
any interest adverse to the Debtors and their estates.
The Court for the District of Delaware will hold a hearing on the
hiring on Jan. 22, 2014, at 11:00 a.m. Objections, if any, are
due Jan. 15, 2014, at 4:00 p.m.
Dechert LLP can be reached at:
Michael J. Sage, Esq.
DECHERT LLP
1095 Avenue of the Americas
New York, NY 10036
Tel: (212) 698-3500
Fax: (212) 698-3599
About Constar International
Privately held Constar International Holdings and nine affiliated
debtors filed for Chapter 11 protection (Bankr. D. Del. Lead Case
No. 13-13281) on Dec. 19, 2013.
Constar, which manufactures plastic containers, is represented by
Michael J. Sage, Esq., Brian E. Greer, Esq., Stephen M. Wolpert,
Esq., and Janet Bollinger Doherty, Esq., at Dechert LLP; and
Robert S. Brady, Esq., and Sean T. Greecher, Esq., at Young
Conaway Stargatt & Taylor, LLP. Prime Clerk LLC serves as the
Debtors' claims and noticing agent, and administrative advisor.
Lincoln Partners Advisors LLC serves as the Debtors' financial
advisor.
Judge Christopher S. Sontchi oversees the 2013 case.
This is Constar International's third bankruptcy. Constar first
filed for Chapter 11 protection (Bankr. D. Del. Lead Case No.
08-13432) in December 2008, with a pre-negotiated Chapter 11 Plan
and emerged from bankruptcy in May 2009. Constar and its
affiliates returned to Chapter 11 protection (Bankr. D. Del. Case
No. 11-10109) on Jan. 11, 2011, with a pre-negotiated Chapter 11
plan and emerged from bankruptcy in June 2011.
The new petition listed assets worth less than $100 million
against $123 million on three layers of secured debt.
Attorneys at Brown Rudnick LLP represent the official committee of
unsecured creditors.
Counsel to Wells Fargo Capital Finance, LLC, the revolving loan
agent, is Andrew M. Kramer, Esq., at Otterbourg P.C.
CONSTAR INT'L: To Employ Young Conaway as Local Counsel
-------------------------------------------------------
Constar International Holdings, LLC and its debtor-affiliates seek
authorization from the U.S. Bankruptcy Court for the District of
Delaware to employ Young Conaway Stargatt & Taylor, LLP as
attorneys, nunc pro tunc to the Dec. 19, 2013 petition date.
The Debtors require Young Conaway to:
(a) provide legal advice with respect to the Debtors' powers
and duties as debtors in possession in the continued
operation of their business, management of their
properties, and sale of their assets;
(b) prepare and pursue confirmation of a plan and approval of a
disclosure statement;
(c) prepare on behalf of the Debtors necessary applications,
motions, answers, orders, reports and other legal papers;
(d) appear in Court to protect the interests of the Debtors
before the Court; and
(e) perform all other legal services for the Debtors which may
be necessary and proper in these proceedings.
Young Conaway will be paid at these hourly rates:
Robert S. Brady, partner $765
Sean T. Greecher, partner $475
Maris J. Kandestin, associate $430
Elizabeth S. Justison, associate $280
Chad A. Corazza, paralegal $160
Young Conaway will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Young Conaway received a retainer in the amount of $75,000 on
Dec. 5, 2013, plus filing fees in the amount of $12,130, which
were paid on Dec. 12, 2013, in connection with the planning and
preparation of initial documents and Young Conaway's proposed
post-petition representation of the Debtors. A part of the
retainer has been applied to any additional outstanding balances
existing as of the petition date. The remainder will constitute a
general retainer as security for post-petition services and
expenses incurred during the Chapter 11 cases.
Robert S. Brady, Esq., partner at Young Conaway, assured the Court
that the firm is a "disinterested person" as the term is defined
in Section 101(14) of the Bankruptcy Code and does not represent
any interest adverse to the Debtors and their estates.
The Court for the District of Delaware will hold a hearing on the
hiring on Jan. 22, 2014, at 11:00 a.m. Objections, if any, are
due Jan. 15, 2014, at 4:00 p.m.
Young Conaway can be reached at:
Robert S. Brady, Esq.
YOUNG CONAWAY STARGATT & TAYLOR, LLP
1000 N. King Street, Rodney Square
Wilmington, DE 19801
Tel: (302) 571-6600
Fax: (302) 571-1253
E-mail: rbrady@ycst.com
About Constar International
Privately held Constar International Holdings and nine affiliated
debtors filed for Chapter 11 protection (Bankr. D. Del. Lead Case
No. 13-13281) on Dec. 19, 2013.
Constar, which manufactures plastic containers, is represented by
Michael J. Sage, Esq., Brian E. Greer, Esq., Stephen M. Wolpert,
Esq., and Janet Bollinger Doherty, Esq., at Dechert LLP; and
Robert S. Brady, Esq., and Sean T. Greecher, Esq., at Young
Conaway Stargatt & Taylor, LLP. Prime Clerk LLC serves as the
Debtors' claims and noticing agent, and administrative advisor.
Lincoln Partners Advisors LLC serves as the Debtors' financial
advisor.
Judge Christopher S. Sontchi oversees the 2013 case.
This is Constar International's third bankruptcy. Constar first
filed for Chapter 11 protection (Bankr. D. Del. Lead Case No.
08-13432) in December 2008, with a pre-negotiated Chapter 11 Plan
and emerged from bankruptcy in May 2009. Constar and its
affiliates returned to Chapter 11 protection (Bankr. D. Del. Case
No. 11-10109) on Jan. 11, 2011, with a pre-negotiated Chapter 11
plan and emerged from bankruptcy in June 2011.
The new petition listed assets worth less than $100 million
against $123 million on three layers of secured debt.
Attorneys at Brown Rudnick LLP represent the official committee of
unsecured creditors.
Counsel to Wells Fargo Capital Finance, LLC, the revolving loan
agent, is Andrew M. Kramer, Esq., at Otterbourg P.C.
CONSTAR INT'L: Taps Lincoln Partners as Financial Advisor
---------------------------------------------------------
Constar International Holdings LLC and its debtor-affiliates ask
permission from the U.S. Bankruptcy Court for the District of
Delaware to employ Lincoln Partners Advisors LLC as financial
advisor, nunc pro tunc to the Dec. 19, 2013 petition date.
Pursuant to the engagement letter, Lincoln Advisors will provide
financial advisory services if requested by the Debtors with
respect to a Sale Transaction or Restructuring Transaction. In
connection with a Sale Transaction, Lincoln Advisors will assist
the Debtors with:
(a) identifying potential parties who might be interested in
entering into a Sale Transaction;
(b) assisting with the preparation of an information memorandum
for delivery to potential parties to a Sale Transaction
describing the Debtors, and business and the assets to be
sold;
(c) formulating and recommending a strategy for pursuing a
potential Sale Transaction and maximizes return to the
Debtors;
(d) contacting and eliciting interest from potential parties to
a Sale Transaction;
(e) conveying information desired by potential parties to a
Sale Transaction;
(f) reviewing and evaluating potential parties to a Sale
Transaction;
(g) reviewing and analyzing proposals regarding a potential
Sale Transaction;
(h) advising the board and sub-committees thereof with respect
to the consideration, terms, conditions and value of a
potential Sale Transaction; and
(i) advising and assisting the Debtors with respect to
executing a Sale Transaction through its closing.
With respect to a Restructuring Transaction, Lincoln Advisors will
assist the Debtors with:
(a) developing a restructuring plan;
(b) structuring any securities to be issued pursuant to the
restructuring plan;
(c) negotiating the restructuring plan with lenders, creditors
and other interested parties;
(d) developing a plan of reorganization; and
(e) participating in hearings before the relevant bankruptcy
court, if applicable, with respect to matters upon which
Lincoln Advisors has provided advice, including, as
relevant, coordinating with the Debtors' legal counsel with
respect to testimony in connection herewith.
The Debtors will pay Lincoln Advisors non-refundable cash fees of
$50,000 per month ("Monthly Fee"). Where 100% of the initial
retainer and the monthly fees paid to Lincoln Advisors will be
credited against any Sale Transaction Fee and 50% of the Monthly
Fees paid to Lincoln Advisors will be credited against any
Restructuring Transaction Fee payable by the Debtors.
In the event of a Sale Transaction, the Debtors will pay Lincoln
Advisors a transaction fee equal to 1% of the Enterprise Value up
to and including $125,000,000 and 2% of Enterprise Value in excess
of $125,000,000 less 100% of the initial retainer and monthly fees
paid to Lincoln Advisors ("Sale Transaction Fee"). The minimum
sale transaction fee shall be $800,000 and the Sale Transaction
Fee shall be due and payable in cash at the time of the actual
closing of the Sale Transaction directly from the proceeds of such
transaction before application or distribution to any stakeholder
of the Debtors.
In the event of a Restructuring Transaction, the Debtors will
compensate Lincoln Advisors with a transaction fee equal to
$800,000 ("Restructuring Transaction Fee"). The Restructuring
Transaction Fee shall be due and payable in cash at the time of
the closing of the Restructuring Transaction.
Lincoln Advisors will also be reimbursed for reasonable out-of-
pocket expenses incurred. Lincoln Advisors will not incur
expenses in excess of $10,000 in any monthly billing period or
$75,000 in the aggregate without prior written consent of the
Debtors.
Lincoln Advisors has received a $50,000 initial retainer in
connection with the financial advisory services provided to the
Debtors which covered the first month of services from Oct. 10,
2013 through Nov. 9, 2013. Lincoln Advisors has also received a
Monthly Fee which covered the time period of Nov. 10, 2013 through
Dec. 9, 2013 and an additional Monthly Fee which covered Dec. 10,
2013 through Jan. 9, 2014. In addition, on Dec. 6, 2013, Lincoln
Advisors received a retainer of $50,000 to be applied to any
prepetition amounts outstanding for reasonable expenses incurred
in conjunction with the performance of services pursuant to the
engagement letter and Lincoln Advisors will credit any remaining
balance towards any post-petition fees and expenses incurred and
approved by the Court.
During the 90 days immediately preceding the petition date,
Lincoln Advisors received $200,000 in connection with services
provided to the Debtors, which includes the Initial Retainer and
Monthly Fees and the retainer.
Alexander W. Stevenson, managing director of Lincoln Partner
Advisors LLC, assured the Court that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the
Bankruptcy Code and does not represent any interest adverse to the
Debtors and their estates.
The Court for the District of Delaware will hold a hearing on the
hiring on Jan. 22, 2014, at 11:00 a.m. Objections, if any, are
due Jan. 15, 2014, at 4:00 p.m.
Lincoln Advisors can be reached at:
Alexander W. Stevenson
LINCOLN PARTNER ADVISORS LLC
633 West Fifth Street, Suite 6650
Los Angeles, CA 90071
Tel: (213) 283-3710
E-mail: astevenson@lincolninternational.com
About Constar International
Privately held Constar International Holdings and nine affiliated
debtors filed for Chapter 11 protection (Bankr. D. Del. Lead Case
No. 13-13281) on Dec. 19, 2013.
Constar, which manufactures plastic containers, is represented by
Michael J. Sage, Esq., Brian E. Greer, Esq., Stephen M. Wolpert,
Esq., and Janet Bollinger Doherty, Esq., at Dechert LLP; and
Robert S. Brady, Esq., and Sean T. Greecher, Esq., at Young
Conaway Stargatt & Taylor, LLP. Prime Clerk LLC serves as the
Debtors' claims and noticing agent, and administrative advisor.
Lincoln Partners Advisors LLC serves as the Debtors' financial
advisor.
Judge Christopher S. Sontchi oversees the 2013 case.
This is Constar International's third bankruptcy. Constar first
filed for Chapter 11 protection (Bankr. D. Del. Lead Case No.
08-13432) in December 2008, with a pre-negotiated Chapter 11 Plan
and emerged from bankruptcy in May 2009. Constar and its
affiliates returned to Chapter 11 protection (Bankr. D. Del. Case
No. 11-10109) on Jan. 11, 2011, with a pre-negotiated Chapter 11
plan and emerged from bankruptcy in June 2011.
The new petition listed assets worth less than $100 million
against $123 million on three layers of secured debt.
Attorneys at Brown Rudnick LLP represent the official committee of
unsecured creditors.
Counsel to Wells Fargo Capital Finance, LLC, the revolving loan
agent, is Andrew M. Kramer, Esq., at Otterbourg P.C.
CONSTAR INT'L: Hires Prime Clerk as Administrative Advisor
----------------------------------------------------------
Constar International Holdings LLC and its debtor-affiliates have
filed papers asking the U.S. Bankruptcy Court for the District of
Delaware for authority to employ Prime Clerk LLC as administrative
advisor, nunc pro tunc to the Dec. 19, 2013 petition date.
The Debtors require Prime Clerk to:
(a) assist with, among other things, solicitation, balloting
and tabulation of votes, and prepare any related reports,
as required in support of confirmation of a Chapter 11
plan, and in connection with such services, process
requests for documents from parties in interest, including,
if applicable, brokerage firms, bank back-offices and
institutional holders;
(b) prepare an official ballot certification and, if necessary,
testify in support of the ballot tabulation results;
(c) assist with the preparation of the Debtors' schedules of
assets and liabilities and statements of financial affairs
and gather data in conjunction therewith;
(d) provide a confidential data room, if requested;
(e) manage and coordinate any distributions pursuant to a
Chapter 11 plan; and
(f) provide such other processing, solicitation, balloting and
other administrative services described in the Engagement
Agreement, but not included in the Section 156(c)
Application, as may be requested from time to time by the
Debtors, the Court or the Office of the Clerk of the
Bankruptcy Court.
Prime Clerk will be paid at these hourly rates:
Director of Solicitation $225
Solicitation Analyst $200
Senior Case Manager $190
Case Manager $165
Analyst $135
Technology Consultant $125
Clerk $45
Prime Clerk will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Prior to the petition date, the Debtors provided Prime Clerk a
retainer in the amount of $25,000.
Michael J. Frishberg, co-president and chief operating officer of
Prime Clerk, assured the Court that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the
Bankruptcy Code and does not represent any interest adverse to the
Debtors and their estates.
The Court for the District of Delaware will hold a hearing on the
hiring on Jan. 22, 2014, at 11:00 a.m. Objections, if any, are
due Jan. 15, 2014, at 4:00 p.m.
Prime Clerk can be reached at:
Michael J. Frishberg
PRIME CLERK LLC
830 Third Avenue, 9th Floor
New York, NY 10022
Attn: Shai Waisman
Tel: (212) 257-5450
E-mail: swaisman@primeclerk.com
About Constar International
Privately held Constar International Holdings and nine affiliated
debtors filed for Chapter 11 protection (Bankr. D. Del. Lead Case
No. 13-13281) on Dec. 19, 2013.
Constar, which manufactures plastic containers, is represented by
Michael J. Sage, Esq., Brian E. Greer, Esq., Stephen M. Wolpert,
Esq., and Janet Bollinger Doherty, Esq., at Dechert LLP; and
Robert S. Brady, Esq., and Sean T. Greecher, Esq., at Young
Conaway Stargatt & Taylor, LLP. Prime Clerk LLC serves as the
Debtors' claims and noticing agent, and administrative advisor.
Lincoln Partners Advisors LLC serves as the Debtors' financial
advisor.
Judge Christopher S. Sontchi oversees the 2013 case.
This is Constar International's third bankruptcy. Constar first
filed for Chapter 11 protection (Bankr. D. Del. Lead Case No.
08-13432) in December 2008, with a pre-negotiated Chapter 11 Plan
and emerged from bankruptcy in May 2009. Constar and its
affiliates returned to Chapter 11 protection (Bankr. D. Del. Case
No. 11-10109) on Jan. 11, 2011, with a pre-negotiated Chapter 11
plan and emerged from bankruptcy in June 2011.
The new petition listed assets worth less than $100 million
against $123 million on three layers of secured debt.
Attorneys at Brown Rudnick LLP represent the official committee of
unsecured creditors.
Counsel to Wells Fargo Capital Finance, LLC, the revolving loan
agent, is Andrew M. Kramer, Esq., at Otterbourg P.C.
DBSI INC: 'Ponzi Scheme' Applies To Case, Prosecutors Say
---------------------------------------------------------
Law360 reported that the United States asked an Idaho federal
judge to deny a bid by the former top brass of bankrupt real
estate firm DBSI Inc. to exclude all claims the firm was a "Ponzi
scheme" from a case accusing them of defrauding investors, arguing
the company?s alleged Ponzi scheme was in fact at the heart of the
investor fraud.
According to the report, the former president, general counsel and
two executives of bankrupt DBSI Inc. pled not guilty to fraud
charges in May.
About DBSI Inc.
Headquartered in Meridian, Idaho, DBSI Inc. and its affiliates
were engaged in numerous commercial real estate and non-real
estate projects and businesses. On Nov. 10, 2008, and other
subsequent dates, DBSI and 180 of its affiliates filed for
Chapter 11 protection (Bankr. D. Del. Lead Case No. 08-12687).
DBSI estimated assets and debts between $100 million and
$500 million as of the Chapter 11 filing.
Lawyers at Young Conaway Stargatt & Taylor LLP represent the
Debtors as counsel. The Official Committee of Unsecured Creditors
tapped Greenberg Traurig, LLP, as its bankruptcy counsel.
Kurtzman Carson Consultants LLC is the Debtors' notice claims and
balloting agent.
Joshua Hochberg, a former head of the Justice Department fraud
unit, served as an Examiner and called the seller and servicer of
fractional interests in commercial real estate an "elaborate shell
game" that "consistently operated at a loss" in his report
released in October 2009. McKenna Long & Aldridge LLP was counsel
to the Examiner.
On Sept. 11, 2009, the Honorable Peter J. Walsh entered an Order
appointing James R. Zazzali as Chapter 11 trustee for the Debtors'
estates. On Oct. 26, 2010, the trustee won confirmation of the
Second Amended Joint Chapter 11 Plan of Liquidation for DBSI,
paving the way for it to pay creditors and avoid years of
expensive litigation over its complex web of affiliates. The
plan, which was declared effective Oct. 29, 2010, was co-proposed
by DBSI's unsecured creditors committee.
Pursuant to the confirmed Chapter 11 plan, the DBSI Real Estate
Liquidating Trust was established as of the effective date and
certain of the Debtors' assets, including the Debtors' ownership
interest in Florissant Market Place was transferred to the RE
Trust. Mr. Zazzali and Conrad Myers were appointed as the post-
confirmation trustees. Messrs. Zazzali and Myers are represented
by lawyers at Blank Rime LLP and Gibbons P.C.
DEWEY STRIP: Obtains Court Approval of Plan Outline
---------------------------------------------------
Dewey Strip Holdings, LLC is now closer to emerging from Chapter
11 protection after a bankruptcy judge approved the outline of its
proposed restructuring plan.
U.S. Bankruptcy Judge Christopher Sontchi approved Dewey Strip's
disclosure statement, which outlines the major provisions of the
company's plan to exit bankruptcy protection.
"The disclosure statement contains adequate information within the
meaning of section 1125 of the Bankruptcy Code," Judge Sontchi
said, referring to a provision which requires that a disclosure
statement contain enough information so that creditors can decide
whether or not to support a bankruptcy plan.
With approval of the disclosure statement, the Debtor has begun
sending solicitation packages to creditors and will schedule a
hearing to consider confirmation of the Plan.
The proposed plan requires Manchester Leasing Inc. to make a cash
capital contribution to each reorganized debtor to pay in full all
administrative and priority claims, which are not classified under
the plan.
Under the plan, claims of creditors are put into five 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 won't receive payments and are
deemed to reject the plan. Meanwhile, holders of claims in Class
1, existing as of Jan. 14, are entitled to vote.
As of June 7, 2013, senior secured lenders hold a $215 million
claim against Dewey Strips and its affiliates, court filings show.
Solicitation packages will be sent out to voting creditors on or
before Jan. 15 while a notice of non-voting status will be
distributed to holders of claims or interests in Classes 2 to 5.
A copy of Judge Sontchi's disclosure statement order is available
for free at http://is.gd/9rsRx8
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., at Womble Carlyle Sandridge & Rice, LLP, serve as
co-counsel.
DURANGO GEORGIA: Trustee Can't Sue Owners for Pension Underfunding
------------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the U.S. Court of Appeals for the 11th Circuit said
the bankruptcy trustee for Durango-Georgia Paper Co. can't
maintain a lawsuit against members of the "control group" to cover
an underfunded pension plan because the Employee Retirement Income
Security Act was "put in place for the benefit of plan
beneficiaries, not for the protection of a bankrupt plan sponsor's
unsecured creditors."
According to the report, Durango-Georgia, a paper mill, shut down
and was liquidated in bankruptcy court. The trustee sued former
owners, contending they were part of the "control group" who are
liable for pension underfunding under Section 1369 of Title 29 of
the U.S. Code.
A lower court dismissed the trustee's suit, and the Atlanta-based
appeals court affirmed in an opinion by U.S. Circuit Judge Gerald
B. Tjoflat, the report related. The former owners contended the
trustee had no right to sue. Judge Tjoflat said the question
hadn't been decided in a federal appeals court.
Judge Tjoflat said Section 1369 didn't give the bankruptcy trustee
a right of action, the report related. He saw nothing in
legislative history or in the statute giving a duty to members of
the control in favor of the company to pay unfunded benefits.
Instead, the duty is owed to the employees or the PBGC, Judge
Tjoflat ruled.
The case is Durango-Georgia Paper Co. v. H.G. Estate LLC, 11-
15079, U.S. Court of Appeals for the 11th Circuit (Atlanta).
About Durango Georgia
Based in St. Mary's, Georgia, Durango Georgia Paper Company --
http://www.durangopaper.com/-- was a nationally recognized
bleached board and kraft paper producer in the U.S. offering
coast-to-coast and international service. On Oct. 29. 2002,
creditors filed an involuntary chapter 7 petition against Durango.
The Company filed for chapter 11 relief on Nov. 20, 2002 (Bankr.
S.D. Ga. Case No. 02-21669). George H. Mccallum, Esq., at Stone &
Baxter, LLP, Kate D. Strain, Esq., at Hunter, Maclean, Exley &
Dunn, PC, and Neil P. Olack, Esq., at Duane Morris LLP, represent
the Debtor in its restructuring efforts. Bridge Associates, LLC,
was appointed as Liquidating Trustee under the terms of a Plan of
Liquidation approved by creditors and confirmed by the Bankruptcy
Court in June 2004.
EDISON MISSION: Parties Object to Proposed Cure Costs Under Plan
----------------------------------------------------------------
BankruptcyData reported that multiple parties -- including Union
Pacific Railroad, FirstEnergy Solutions, Stock Equipment Company,
Commonwealth Edison and SAP Industries -- filed with the U.S.
Bankruptcy Court separate objections to Edison Mission Energy's
proposed cure cost regarding executory contracts and unexpired
leases that may be assumed in connection with the proposed Second
Amended Joint Chapter 11 Plan of Reorganization.
Union Pacific Railroad Company explains, "To date, the Debtor has
not provided information to Stock Equipment which is necessary for
there to be adequate assurance of future performance of the
Agreement. Stock Equipment accordingly objects to the Debtor's
proposed cure amount with respect to Stock Equipment. WHEREFORE,
Creditor, Stock Equipment Company, Inc., respectfully requests
that this Court deny the Debtor's proposed assumption of and cure
amount with respect to Stock Equipment's Agreement, and further
prays that the cure amount of $256,585.00 be paid to Stock
Equipment by Debtor, and for such further and other relief as the
Court deems just and equitable."
As previously reported by The Troubled Company Reporter, the
Bankruptcy Court entered an order approving the Disclosure
Statement on Dec. 19, 2013, allowing the Debtors to commence
solicitation of Plan votes. Creditors entitled to vote on the
Plan may cast their ballots on or before Jan. 29, at 5 p.m. The
Debtors will return to the Bankruptcy Court Feb. 17 to seek
confirmation of the Plan.
In November 2013, Edison Mission Energy filed a reorganization
plan to carry out a sale of its business to NRG Energy Inc. NRG,
based in Princeton, New Jersey, will pay $2.64 billion, including
$2.29 in cash billion and $350 million in stock. The plan calls
for secured creditors and unsecured creditors of the operating
companies to be paid in full. Unsecured creditors of Santa Ana,
California-based EME will split what remains of the purchase price
and the NRG stock. EME's subordinated creditors receive nothing
under the plan.
EME said it doesn't plan to emerge from Chapter 11 until
December 2014 to receive benefits from a tax-sharing agreement
with parent Edison International Inc.
About Edison Mission
Santa Ana, California-based Edison Mission Energy is a holding
company whose subsidiaries and affiliates are engaged in the
business of developing, acquiring, owning or leasing, operating
and selling energy and capacity from independent power production
facilities. EME also engages in hedging and energy trading
activities in power markets through its subsidiary Edison Mission
Marketing & Trading, Inc.
EME was formed in 1986 and is an indirect subsidiary of Edison
International. Edison International also owns Southern California
Edison Company, one of the largest electric utilities in the
United States.
EME and its affiliates sought Chapter 11 protection (Bankr. N.D.
Ill. Lead Case No. 12-49219) on Dec. 17, 2012.
EME has reached an agreement with the holders of a majority of
EME's $3.7 billion of outstanding public indebtedness and its
parent company, Edison International EIX, that, pursuant to a plan
of reorganization and pending court approval, would transition
Edison International's equity interest to EME's creditors, retire
existing public debt and enhance EME's access to liquidity.
The Company's balance sheet at Sept. 30, 2012, showed
$8.17 billion in total assets, $6.68 billion in total liabilities
and $1.48 billion in total equity.
In its schedules, Edison Mission Energy disclosed total assets of
assets of $5,721,559,170 and total liabilities of $6,202,215,094
as of the Petition Date.
The Debtors other than Camino Energy Company are represented by
James H.M. Sprayregen, P.C., Esq., David R. Seligman, P.C., Esq.,
Sarah H. Seewer, Esq., Brad Weiland, Esq., and Joshua A. Sussberg,
Esq., at Kirkland & Ellis LLP. Counsel to Debtor Camino Energy
Company is David A. Agay, Esq., and Joshua Gadharf, Esq., at
McDonald Hopkins LLC.
Perella Weinberg Partners is acting as the Debtors' financial
advisor and McKinsey & Company Recovery and Transformation
Services is acting as restructuring advisor. GCG, Inc., is the
claims and notice agent.
An official committee of unsecured creditors has been appointed in
the case and is represented by Ira S. Dizengoff, Esq., Stephen M.
Baldini, Esq., Arik Preis, Esq., and Robert J. Boller, Esq., at
Akin Gump Strauss Hauer & Feld LLP in New York; James Savin, Esq.,
and Kevin M. Eide, Esq., at Akin Gump Strauss Hauer & Feld LLP in
Washington, DC; and David M. Neff, Esq., and Brian Audette, Esq.,
at Perkins Coie LLP. The Committee also has tapped Blackstone
Advisory Partners as investment banker and FTI Consulting as
financial advisor.
ELCOM HOTEL: Associations Object to Confirmation of Plan
--------------------------------------------------------
10295 Collins Avenue, Hotel Condominium Association, Inc., and
10295 Collins Avenue Residential Condominium Association, Inc.,
each filed preliminary objections to the confirmation of Elcom
Hotel & Spa, LLC, and Elcom Condominium, LLC's Revised First
Amended Joint Plan of Liquidation.
As reported by the Troubled Company Reporter on Nov. 28, 2013, the
Debtors submitted a revised disclosure statement filed in
conjunction with its proposed liquidating plan. The revised
disclosure statement indicates that unsecured creditors are still
divided into two classes under the Plan. The Plan contemplates
that holders of general unsecured claims will have a recovery of
0% to 18%, which will be funded from the pro rata distribution of
"net free cash" and proceeds of causes of action and remaining
assets. Holders of general unsecured vendor claims will have a
recovery of 50%, which will be funded from the 50% distribution
from "net free cash." A copy of the Revised Disclosure Statement
filed Nov. 22, 2013, is available for free at:
http://bankrupt.com/misc/Elcom_Hotel_DS_112213.pdf
The Residential Association said in a filing dated Jan. 3, 2014,
that the Debtors have proposed a Plan that would, among other
things, destroy the two associations' derivative standing,
transfer the power to prosecute actions to an underfunded
liquidating trustee who would not have sufficient funds in order
to pursue not only the derivative litigation, but also all other
causes of action which belong to the Debtors' estate, and release
some of the key parties responsible for the damages suffered by
the Debtors and all creditors of the Debtors. In August 2013,
the associations filed the derivative litigation complaint
against 10 individual and entity defendants seeking to recover
over $20 million in damages caused by the extreme neglect and
intentional misconduct of the defendants in all phases of the
management and operation of the real and personal properties
controlled by them.
The Residential Association claims that the key provisions of the
Plan completely undermine any real possibility of obtaining
substantial cash for the estates and their creditors through the
derivative litigation and other avoidance actions.
On Jan. 3, 2014, Hotel Association filed its objection to the
Play, saying that the Debtors' Plan remains patently unconfirmable
and underscores the true goal of the Debtors' plan process: to
grant indirect equity owner Thomas Sullivan and certain other
entities he owns and controls in the closely-held corporate group
related to the Debtors, extensive releases from a certain
derivative action that is now pending against him in the Debtors'
bankruptcy cases.
The Residential Association is represented by:
HINSHAW & CULBERTSON LLP
Charles M. Tatelbaum, Esq.
One East Broward Boulevard - Suite 1010
Ft. Lauderdale, Florida 33301
Tel: (954) 467-7900
Fax: (954) 467-1024
E-mail: ctatelbaum@hinshawlaw.com
csmith@hinshawlaw.com
ftllitigation@hinshawlaw.com
The Hotel Association is represented by:
BERGER SINGERMAN LLP
Christopher A. Jarvinen, Esq.
Debi E. Galler, Esq.
David L. Gay, Esq.
1450 Brickell Avenue, Suite 1900
Miami, FL 33131
Tel: (305) 755-9500
Fax: (305) 714-4340
E-mail: cjarvinen@bergersingerman.com
dgaller@bergersingerman.com
dgay@bergersingerman.com
About Elcom Hotel
Elcom Hotel & Spa LLC and Elcom Condominium LLC sought Chapter 11
protection (Bankr. S.D. Fla. Case Nos. 13-10029 and 13-10031) on
Jan. 2, 2013, with plans to sell their hotel and condominium
property.
Elcom Condominium owns nine of the hotel condominium units at the
One Bal Harbor Resort & Spa. The resort is located on five acres
of land in Bal Harbor, Florida. The building and improvements
consist of 185 luxury residential condominium units and 124 hotel
condominium units. Elcom Hotel owns the hotel lot.
Elcom Hotel disclosed $10,378,304 in assets and $20,010,226 in
liabilities as of the Chapter 11 filing. The Debtor owes OBH
Funding, LLC, $1.8 million on a mortgage and F9 Properties, LLC,
formerly known as ANO, LLC, $9 million on a mezzanine loan secured
by a lien on the ownership interests in the project's owner. OBH
Funding and ANO are owned by Thomas D. Sullivan, the manager of
the Debtors.
Corali Lopexz-Castro, Esq., of Kozyak Tropin & Throckmorton, P.A.,
represent the Debtors as bankruptcy counsel. Duane Morris LLP is
the special litigation, real estate, and hospitality counsel.
Algon Capital, LLC, d/b/a Algon Group's Troy Taylor is the
Debtors' chief restructuring officer. Barry E. Mukamal and
Marcum, LLP, serve as accountants and financial advisors. The
Barthet Firm is the special litigation collections counsel. Barry
E. Somerstein and Greenspoon Marder Law serve as special real
estate counsel.
Elcom Hotel & Spa and Elcom Condominium have submitted a revised
disclosure statement filed in conjunction with the proposed
liquidating plan. The revised disclosure statement indicates that
unsecured creditors are still divided into two classes under the
Plan. The Plan contemplates that holders of general unsecured
claims (expected to total $14 million to $79.1 million) will have
a recovery of 0% to 18%, which will be funded from the pro rata
distribution of "net free cash" and proceeds of causes of action
and remaining assets. Holders of general unsecured vendor claims
(estimated at $500,000 to $971,000) -- those vendors who have
unsecured claims who agree to continue do business with the
Debtors -- will have a recovery of 50%, which will be funded from
the 50% distribution from "net free cash."
In December 2013, the Florida bankruptcy judge signed off on a
$13.4 million sale of the building's common areas to the
homeowners' association. U.S. Bankruptcy Judge Robert A. Mark
approved the result of the auction in which the One Bal
Harbour residential association beat out an entity owned by Thomas
Sullivan, who is the largest shareholder of Elcom Hotel, and
stalking horse bidder Stoneleigh Capital LLC.
EUROFRESH INC: Court Dismisses Chapter 11 Case
----------------------------------------------
The Hon. Eileen W. Hollowell of the U.S. Bankruptcy Court for the
District of Arizona has dismissed F 23, Inc., formerly Eurofresh,
Inc.'s Chapter 11 case, after no objections were filed.
On Nov. 12, 2013, the Debtor filed documents asking the Court to
dismiss its case, or convert it into one under Chapter 7. The
Debtor sold all of its assets pursuant to a Court approved sale to
Zona Acquisition Company, LLC, and has paid all allowed
administrative claims. The Debtor holds certain assets belonging
to Zona, to complete administration of the Estate. However, the
Debtor holds no equitable interest in any remaining assets and
there is no reasonable likelihood that a plan of reorganization
will be confirmed.
About EuroFresh Inc.
EuroFresh, Inc., is America's largest greenhouse grower spanning
318 aces of glass covered facilities. EuroFresh grows premium
quality, great tasting, certified pesticide residue free
greenhouse tomatoes and cucumbers year-round. The 274-acre
flagship facility in Willcox, Arizona, is the world's largest.
There's also a second 44-acre acre property in Snowflake, Arizona.
EuroFresh has 964 employees.
EuroFresh filed a Chapter 11 petition (Bankr. D. Ariz. Case No.
13-01125) on Jan. 27, 2013, to complete a sale of the business to
NatureSweet Limited, absent higher and better offers.
NatureSweet and EuroFresh Farms are two of the leading producers
of high-quality tomatoes in North America.
EuroFresh first filed for Chapter 11 protection (Bankr. D. Ariz.
Lead Case No. 09-07970) on April 21, 2009. Eurofresh exited
bankruptcy in November 2009 following a deal with majority of
their existing debt holders to convert more than $200 million of
debt into equity.
In the new Chapter 11 case, Frederick J. Petersen, Esq., and Isaac
D. Rothschild, Esq., at Mesch, Clark & Rothschild, P.C., serve as
counsel to the Debtors.
The Official Committee of Unsecured Creditors appointed in the
case has retained Lowenstein Sandler LLP; and Jennings, Strouss &
Salmon, P.L.C., as bankruptcy counsel.
FALKIRK FARMERS: PSC Recommends Paying $280,000 in Claims
---------------------------------------------------------
Jonathan Knutson at Agweek reports that the North Dakota Public
Service Commission on Dec. 30, 2013, approved a motion that could
lead to the reimbursement of several people with claims against an
insolvent grain company Falkirk Farmers Elevator.
The PSC voted to recommend to district court that seven of nine
claimants against the insolvent Falkirk Farmers Elevator receive
payment. The seven claims total just under $280,000, according to
information released on Dec. 30 by the PSC, Agweek relates.
Under state law, each of these claimants is eligible to receive
80 percent reimbursement from an indemnity fund, the report notes.
A hearing on the PSC recommendation is scheduled for March 13 in
the Burleigh County (N.D.) Courthouse, Agweek discloses. A
district court must approve the PSC recommendation before money
from the indemnity fund can be distributed, according to the PSC.
Agweek says claims totaling nearly $2 million were filed against
the elevator.
Of the two remaining claims, one was ruled invalid and the other,
a $1.7 million claim, is related to litigation in federal court,
the PSC, as cited by Agweek, said.
"Today's action is good news for the farmers who have been waiting
for well over a year for payment for the grain they sold," Agweek
quotes Commissioner Julie Fedorchak as saying. "No one wins in an
insolvency. But this approach allowed us to resolve a bulk of the
claims while work on the unrelated, outstanding legal issues of
the remaining claim continues."
Falkirk Farmers Elevator was declared insolvent in 2012 and later
liquidated. Some customers lost access to large amounts of
fertilizer they'd already purchased. In September 2012, SRS
Commodities of Mayville, N.D., bought the Falkirk grain elevator.
FISKER AUTOMOTIVE: Hearing Today on WARN Claims Estimation
----------------------------------------------------------
In the Chapter 11 case of Fisker Automotive Holdings, Inc., et
al., the Bankruptcy Court in Wilmington, Delaware, will hold a
hearing today, Jan. 10, at 9:30 a.m. on the Motion of the Debtors
to Estimate WARN Claims Pursuant to Section 502(c) of the
Bankruptcy Code.
Fisker is asking the Bankruptcy Court to determine that nearly
$3.8 million in claims brought by former employees under the U.S.
Worker Adjustment and Retraining Notification Act should not be
allowed, and should be estimated at $0.
Sven Etzelsberger, as Class Representative of the certified class
of terminated employees, opposed the Debtors' request.
The WARN Proof of Claim asserts a maximum value of $3,052,160, of
which $1,916,007 million are Sec. 507(a)(4) priority wages.
The WARN Claimants are the former employees of the Debtors that
were terminated without cause on April 5, 2013 or within 30 days
of that date, or as the reasonably expected consequence of the
pre-petition mass layoffs or plant closing at the Debtors'
facilities, in violation of the Workers Adjustment and Retraining
Notification Act and the California Labor Code Sec. 1400, et seq.
On April 5, 2013, the WARN Claimants commenced an action styled
Etzelsberger v. Fisker Automotive Holdings, Inc. in the U.S.
District Court for the Central District of California, Case No. 8-
13-CV-00540-CJC (RNB). That action alleges damages resulting from
the Debtors' failure to provide 60 days' notice prior to directing
a mass layoff in violation of the WARN Act and CAL WARN.
On August 15, 2013, the District Court certified a class of 157
Class Claimants under Fed. R. Civ. P. 23(a) and (b). The District
Court appointed Mr. Etzelsberger as Class Representative and the
law firm Outten & Golden LLP as Class Counsel.
According to Mr. Etzelsberger, the Debtors' aggressiveness in
seeking to zero-out a valid $3 millon WARN claim to suit its
purchaser's terms is unprecedented and a clear abuse of 11 U.S.C.
Sec. 502(c). He said the WARN Claim should not be subject to Sec.
502(c), and if it were, the Court should order the Debtors to
produce the discovery requested by the WARN Claimants and allow
any further discovery needed for the meaningful and fair hearing
on any issues raised by Debtors in a timely fashion.
The Claimants are represented by:
Jack A. Raisner, Esq.
Rene S. Roupinian, Esq.
OUTTEN & GOLDEN LLP
3 Park Avenue, 29th Floor
New York, NY 10016
Telephone: (212) 245-1000
- and -
Frederick B. Rosner, Esq.
Julia Klein, Esq.
THE ROSNER LAW GROUP LLC
824 N. Market Street, Suite 810
Wilmington, DE 19801
Telephone: (302) 777-1111
E-mail: rosner@teamrosner.com
klein@teamrosner.com
About Fisker Automotive
Fisker Automotive Holdings, Inc., developer of the Karma plug-in
hybrid electric sedan, filed a petition for Chapter 11 protection
(Bankr. D. Del. Case No. 13-13087) on Nov. 22, 2013, with plans
to sell the business to Hybrid Tech Holdings, LLC.
Fisker estimated assets of more than $100 million and listed debt
of $500 million in its bankruptcy petition. The assets include an
assembly plant purchased for $21 million from General Motors Corp.
The plant never operated. The cars were assembled in Finland.
Fisker now has 21 employees.
Fisker received a $529 million loan from the Department of
Energy's Advanced Technology Vehicles Manufacturing Loan Program
and drew down about $192 million before the department froze the
loan after Fisker failed to hit several development targets. The
company defaulted on its loan in April 2013.
Bankruptcy Judge Kevin Gross presides over the case. The Debtors
have tapped James H.M. Sprayregen, P.C., Esq., Anup Sathy, P.C.,
Esq., and Ryan Preston Dahl, Esq., at Kirkland & Ellis LLP, in
Chicago, Illinois, as co-counsel; Laura Davis Jones, Esq., James
E. O'Neill, Esq., and Peter J. Keane, Esq., at Pachulski Stang
Ziehl & Jones LLP, in Wilmington, Delaware, as co-counsel;
Beilinson Advisory Group as restructuring advisors; and Rust
Consulting/Omni Bankruptcy, as notice and claims agent and
administrative advisor.
On November 5, 2013, the Official Committee of Unsecured Creditors
was appointed. The members are: (a) David M. Cohen; (b) Sven
Etzelsberger; (c) Kuster Automotive Door Systems GmbH; (d) Magna
E-Car USA, LLC; (e) Supercars & More SRL; and (f) TK Holdings Inc.
The Committee is represented by William R. Baldiga, Esq., and
Sunni P. Beville, Esq., at Brown Rudnick LLP; and Mark Minuti,
Esq., at Saul Ewing LLP.
The Debtors have entered into an asset purchase agreement with
Hybrid for the sale of substantially all of its assets. Hybrid is
represented by Tobias Keller, Esq., and Peter Benvenutti, Esq., at
Keller & Benvenutti LLP, in San Francisco, California.
FISKER AUTOMOTIVE: Hearing Today on Committee's Sale Motion
-----------------------------------------------------------
In the Chapter 11 case of Fisker Automotive Holdings, Inc., et
al., the Bankruptcy Court in Wilmington, Delaware, will hold a
hearing today, Jan. 10, at 9:30 a.m. on the "Motion of Creditors'
Committee for Entry of Orders (I)(A) Approving Bid Procedures in
Connection with the Sale of Certain Assets of the Debtors, (B)
Scheduling Hearing to Consider Approval of the Sale of Assets, (C)
Approving Form and Manner of Notice Thereof; (D) Authorizing and
Directing Debtors to Enter Into Stalking Horse Purchase Agreement;
(E) Approving Break-Up Fee and Expense Reimbursement and (F)
Granting Related Relief; and (II) Authorizing Debtors to Obtain
Replacement Post-Petition Secured Financing, Utilize Cash
Collateral, Grant Adequate Protection and Modify the Automatic
Stay, and Scheduling a Final Hearing with Respect to Same".
The Committee wants the Court to approve a sale of Fisker's assets
to Wanxiang America Corporation, subject to higher and better
offers at an auction. The Committee argues that Fisker's proposed
sale to Hybrid Tech Holdings LLC and the bid procedures proposed
by the Debtors, are improper and will not serve the best interests
of the Debtors' creditors and parties-in-interest. The Committee
said its own procedures allow for a fair and open sale process.
The Committee has proposed a Jan. 28 deadline for submitting
competing bids and a Jan. 31 auction date, if other offers are
received.
Hybrid is under contract to buy Fisker in exchange for $75 million
of the $168.5 million government loan it acquired immediately
before the Debtor's Chapter 11 filing. In response to the
Committee's Motion, the Debtors announced on Jan. 1, 2014 that
Hybrid has agreed to improve its offer in certain respects.
Hybrid raised its offer by adding an additional $1 million cash
and agreeing to share proceeds from the sale of a facility in
Delaware it doesn't intend to operate. Hybrid also offered to pay
real estate taxes on the Delaware plant. Hybrid also will waive
$90 million in deficiency claims that otherwise would dilute
unsecured creditors' recovery.
Wanxiang, as stalking horse bidder, initially offered $25.8
million in cash. However, in papers filed this week, Wanxiang
said it has raised its offer by $10 million and is willing to go
higher.
The Committee also has negotiated a replacement DIP financing with
Wanxiang.
Wanxiang disclosed that shortly following the Committee's
formation in November, counsel for the Committee contacted counsel
for Wanxiang America to inquire whether Wanxiang America may be
interested in participating in an open, court-supervised auction
of Fisker's assets. After a series of preliminary discussions
among counsel, counsel for Wanxiang America submitted a
preliminary proposal to counsel for the Committee on December 22,
2013.
Over the course of the following week, counsel for Wanxiang
America and counsel for the Committee engaged in a series of
discussions that resulted in further refinements of Wanxiang
America's initial proposal. Throughout these discussions, counsel
for the Committee made significant efforts to improve the economic
terms of Wanxiang America's proposal and negotiations between the
parties continued late into the evening of December 29, 2013.
Wanxiang America is a privately held manufacturer of automotive
parts. Headquartered in Elgin, Illinois, Wanxiang America
operates 27 manufacturing plants in 13 states and employs
approximately 6,000 workers across the United States.
Approximately one in three vehicles made in 2010 to 2012 that are
currently on the road in the United States contain parts that were
manufactured in the United States by Wanxiang America and its
subsidiaries.
Wanxiang America has made significant investments in companies
that specialize in "clean energy" technologies. In January 2013,
Wanxiang America completed its acquisition of substantially all
assets of A123 Systems, Inc., a manufacturer of lithium-ion
batteries used in electric vehicles such as the Fisker Karma.
A123 Systems, which sought bankruptcy protection on October 16,
2012 (Case No. 12-12859 (KJC)), sought approval of bidding and
sale procedures that were tied to a "stalking horse" asset
purchase agreement with Johnson Controls, Inc. that would have
resulted in approximately $125 million of consideration for the
debtor's estate. With the support of the official committee of
unsecured creditors in that case, Wanxiang America submitted a
qualified bid and participated in a robust, days-long auction
process that resulted in Wanxiang America emerging as the winning
bidder, with a final bid of $256.6 million for A123's automotive,
electric grid, and commercial business assets. Despite
significant political opposition and unprecedented lobbying
efforts against the transaction, the sale was approved by the
Committee on Foreign Investments in the United States and closed
on January 29, 2013.
According to Wanxiang America, in response to such improvements by
Hybrid, even though Wanxiang had not had the opportunity to review
the legal documents describing the terms and conditions of the
improvements, Wanxiang agreed to significantly improve its initial
offer by (i) increasing its proposed purchase price by $10 million
and (ii) agreeing to match the additional consideration that the
Debtors have represented will be reflected in Hybrid's improved
offer.
Wanxiang America said that, although the Debtors have not yet
engaged in any meaningful discussions or negotiations with
Wanxiang over the terms of its initial proposal or its latest
proposal, Wanxiang is hopeful that such discussions will take
place prior to the start of the hearing on the Committee's Motion.
Wanxiang America added that the facts of the A123 case, which
remains pending before Judge Carey, should eliminate any potential
doubts about its ability and willingness to participate in an open
and fair auction process.
Wanxiang America believes that its proposal is in the best
interests of all of the Debtors' constituencies because: (i)
Wanxiang America can immediately restart the production of the
Karma sedan and provide parts and service to the existing owners
of the Karma, (ii) Wanxiang America can guaranty the continued
supply of lithium-ion batteries made by A123 Systems, which are
essential to restarting the production of the Karma and providing
ongoing support for the existing owners, and (iii) as one of the
largest automotive parts manufacturers in the world, Wanxiang
America has the financial means and operational knowledge that are
needed to continue to manufacture the Karma sedan and continue to
develop the "Gen II" line of Fisker vehicles. Wanxiang America
intends to pursue the design and development of the Gen II line of
vehicles and, once such vehicles are ready for mass production in
volumes that necessitate a separate manufacturing facility,
intends to manufacture such vehicles at the Debtors' existing
facility at 801 Boxwood Road in Wilmington, Delaware.
Hybrid has filed a limited objection to the Committee's Motion.
Hybrid objects to the Committee Sale Motion only to the extent the
Committee proposes to (a) limit Hybrid's credit bid rights to a
$25 million ceiling, (b) deprive Hybrid of its credit bid rights
for "cause," or (c) deny adequate protection of Hybrid's interests
in the Debtors? assets through a thinly disguised attempt to allow
Wanxiang to prime Hybrid's senior liens.
According to Hybrid, "Apparently having determined to pursue
litigation with Hybrid rather than continue negotiations, the
Committee proposes a sale to a third party that is expressly
conditioned on the denial of Hybrid's rights as a secured
creditor. Hybrid is the holder of the senior secured indebtedness
of debtors Fisker Automotive Holdings, Inc. and Fisker Automotive,
Inc., and believes that this fact makes it uniquely positioned to
provide value to the estate as a buyer of the Debtors' assets.
This is a question, however, that Hybrid leaves to the Debtors and
their creditors."
Counsel for Wanxiang America are:
SIDLEY AUSTIN LLP
Bojan Guzina, Esq.
Andrew F. O'Neill, Esq.
One South Dearborn Street
Chicago, IL 60603
Telephone: (312) 853-7000
Facsimile: (312) 853-7036
- and -
YOUNG CONAWAY STARGATT & TAYLOR, LLP
Edmon L. Morton, Esq.
Robert S. Brady, Esq.
Edmon L. Morton, Esq.
Kenneth J. Enos, Esq.
Rodney Square 1000 North King Street
Wilmington, DE 19801
Telephone: (302) 571-6600
Facsimile: (302) 571-1253
Hybrid is represented by:
SCHNADER HARRISON SEGAL & LEWIS LLP
Richard A. Barkasy, Esq.
Fred W. Hoensch, Esq.
824 N. Market Street, Suite 800
Wilmington, DE 19801
Tel: (302) 888-4554
Fax: (302) 888-1696
E-mail: rbarkasy@schnader.com
fhoensch@schnader.com
- and -
KELLER & BENVENUTTI LLP
Tobias S. Keller, Esq.
Peter J. Benvenutti, Esq.
650 California Street, Suite 1900
San Francisco, CA 94108
Tel: (415) 796-0709
E-mail: tkeller@keller
benvenutti.com
pbenvenutti@kellerbenvenutti.com
About Fisker Automotive
Fisker Automotive Holdings, Inc., developer of the Karma plug-in
hybrid electric sedan, filed a petition for Chapter 11 protection
(Bankr. D. Del. Case No. 13-13087) on Nov. 22, 2013, with plans
to sell the business to Hybrid Tech Holdings, LLC.
Fisker estimated assets of more than $100 million and listed debt
of $500 million in its bankruptcy petition. The assets include an
assembly plant purchased for $21 million from General Motors Corp.
The plant never operated. The cars were assembled in Finland.
Fisker now has 21 employees.
Fisker received a $529 million loan from the Department of
Energy's Advanced Technology Vehicles Manufacturing Loan Program
and drew down about $192 million before the department froze the
loan after Fisker failed to hit several development targets. The
company defaulted on its loan in April 2013.
Bankruptcy Judge Kevin Gross presides over the case. The Debtors
have tapped James H.M. Sprayregen, P.C., Esq., Anup Sathy, P.C.,
Esq., and Ryan Preston Dahl, Esq., at Kirkland & Ellis LLP, in
Chicago, Illinois, as co-counsel; Laura Davis Jones, Esq., James
E. O'Neill, Esq., and Peter J. Keane, Esq., at Pachulski Stang
Ziehl & Jones LLP, in Wilmington, Delaware, as co-counsel;
Beilinson Advisory Group as restructuring advisors; and Rust
Consulting/Omni Bankruptcy, as notice and claims agent and
administrative advisor.
On November 5, 2013, the Official Committee of Unsecured Creditors
was appointed. The members are: (a) David M. Cohen; (b) Sven
Etzelsberger; (c) Kuster Automotive Door Systems GmbH; (d) Magna
E-Car USA, LLC; (e) Supercars & More SRL; and (f) TK Holdings Inc.
The Committee is represented by William R. Baldiga, Esq., and
Sunni P. Beville, Esq., at Brown Rudnick LLP; and Mark Minuti,
Esq., at Saul Ewing LLP.
The Debtors have entered into an asset purchase agreement with
Hybrid for the sale of substantially all of its assets. Hybrid is
represented by Tobias Keller, Esq., and Peter Benvenutti, Esq., at
Keller & Benvenutti LLP, in San Francisco, California.
FISKER AUTOMOTIVE: Confirmation Hearing Moved to Jan. 24
--------------------------------------------------------
In the Chapter 11 case of Fisker Automotive Holdings, Inc., et
al., the Bankruptcy Court in Wilmington, Delaware, will hold a
hearing Jan. 24, 2014, at 10:00 a.m. to consider confirmation of
the Debtors' Chapter 11 plan of liquidation and the proposed sale
of the Debtors' assets.
Fisker on Jan. 1, 2014, filed a First Amended Joint Plan of
Liquidation, a copy of which is available at:
http://bankrupt.com/misc/FISKERAUTOMOTIVE1amendedplan.pdf
The Confirmation Hearing was initially slated for Jan. 3. It was
then cancelled and moved to Jan. 10, and now continued to Jan. 24.
Fisker is seeking to sell its assets to Hybrid Tech Holdings LLC.
The Official Committee of Unsecured Creditors, however, want the
business sold to Wanxiang America Corporation, subject to higher
and better offers at an auction.
Hybrid is under contract to buy Fisker in exchange for $75 million
of the $168.5 million government loan it acquired immediately
before the Debtor's Chapter 11 filing. On Jan. 1, 2014, Hybrid
agreed to add an extra $1 million cash and offered to share
proceeds from the sale of a Fisker facility in Delaware that
Hybrid doesn't intend to operate. Hybrid also offered to pay real
estate taxes on the Delaware plant. Hybrid also will waive $90
million in deficiency claims that otherwise would dilute unsecured
creditors' recovery.
Wanxiang, the Committee's stalking horse bidder, initially offered
$25.8 million in cash. However, in papers filed this week,
Wanxiang said it has agreed to significantly improve its initial
offer by (i) increasing its proposed purchase price by $10 million
and (ii) agreeing to match the additional consideration that the
Debtors have represented will be reflected in Hybrid's improved
offer.
The Committee also has negotiated a replacement DIP financing with
Wanxiang.
In January 2013, Wanxiang America completed its acquisition of
substantially all assets of A123 Systems, Inc., a manufacturer of
lithium-ion batteries used in electric vehicles such as the Fisker
Karma. Wanxiang America emerged as the winning bidder, with a
final bid of $256.6 million for A123's automotive, electric grid,
and commercial business assets. Despite significant political
opposition and unprecedented lobbying efforts against the
transaction, the sale was approved by the Committee on Foreign
Investments in the United States and closed on January 29, 2013.
About Fisker Automotive
Fisker Automotive Holdings, Inc., developer of the Karma plug-in
hybrid electric sedan, filed a petition for Chapter 11 protection
(Bankr. D. Del. Case No. 13-13087) on Nov. 22, 2013, with plans
to sell the business to Hybrid Tech Holdings, LLC.
Fisker estimated assets of more than $100 million and listed debt
of $500 million in its bankruptcy petition. The assets include an
assembly plant purchased for $21 million from General Motors Corp.
The plant never operated. The cars were assembled in Finland.
Fisker now has 21 employees.
Fisker received a $529 million loan from the Department of
Energy's Advanced Technology Vehicles Manufacturing Loan Program
and drew down about $192 million before the department froze the
loan after Fisker failed to hit several development targets. The
company defaulted on its loan in April 2013.
Bankruptcy Judge Kevin Gross presides over the case. The Debtors
have tapped James H.M. Sprayregen, P.C., Esq., Anup Sathy, P.C.,
Esq., and Ryan Preston Dahl, Esq., at Kirkland & Ellis LLP, in
Chicago, Illinois, as co-counsel; Laura Davis Jones, Esq., James
E. O'Neill, Esq., and Peter J. Keane, Esq., at Pachulski Stang
Ziehl & Jones LLP, in Wilmington, Delaware, as co-counsel;
Beilinson Advisory Group as restructuring advisors; and Rust
Consulting/Omni Bankruptcy, as notice and claims agent and
administrative advisor.
On November 5, 2013, the Official Committee of Unsecured Creditors
was appointed. The members are: (a) David M. Cohen; (b) Sven
Etzelsberger; (c) Kuster Automotive Door Systems GmbH; (d) Magna
E-Car USA, LLC; (e) Supercars & More SRL; and (f) TK Holdings Inc.
The Committee is represented by William R. Baldiga, Esq., and
Sunni P. Beville, Esq., at Brown Rudnick LLP; and Mark Minuti,
Esq., at Saul Ewing LLP.
The Debtors have entered into an asset purchase agreement with
Hybrid for the sale of substantially all of its assets. Hybrid is
represented by Tobias Keller, Esq., and Peter Benvenutti, Esq., at
Keller & Benvenutti LLP, in San Francisco, California.
FURNITURE BRANDS: Plan Filing Period Extended to April 22
---------------------------------------------------------
The Hon. Christopher S. Sontchi of the U.S. Bankruptcy Court for
the District of Delaware has extended, at the behest of Furniture
Brands International, Inc., and its debtor-affiliates, the
exclusive periods wherein the Debtors must file a reorganization
plan through and including April 22, 2014, and solicit acceptances
of that plan through and including June 23, 2014.
As reported by the Troubled Company Reporter on Dec. 20, 2013, the
Debtors said in its motion that their "Chapter 11 cases are
sufficiently large and complex to warrant the requested extension
of the Exclusive Periods. The Debtors operated their businesses
on a global basis . . . . The Debtors are also developing and
implementing their strategy for the liquidation of certain
residual assets excluded from the Sale to maximize the value of
these estates. Although the Debtors are addressing these issues
expeditiously, they will require additional time to complete and
implement their Chapter 11 exit strategy. "
About Furniture Brands
Furniture Brands International (NYSE:FBN) --
http://www.furniturebrands.com-- engaged 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. Its brands include Thomasville, Broyhill, Lane,
Drexel Heritage, Henredon, Pearson, Hickory Chair, Lane Venture,
Maitland-Smith and LaBarge.
The balance sheet at June 29, 2013, showed $546.73 million in
total assets against $550.13 million in total liabilities.
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.
The official creditor's committee is comprised of the Pension
Benefit Guaranty Corp., Milberg Factors Inc. and five suppliers.
The Committee tapped Blank Rome LLP as co-counsel, Hahn &
Hessen LLP as lead counsel, BDO Consulting as financial advisor,
and Houlihan Lokey Capital, Inc., as investment banker.
In November 2013, Furniture Brands won bankruptcy court approval
to sell the business to KPS Capital Partners LP for $280 million.
Private-equity investor KPS formed a new company named Heritage
Home Group LLC to operate the business.
GREEN FIELD ENERGY: Has Final Approval to Pay Key Vendor Claims
---------------------------------------------------------------
Green Field Energy Services, Inc. obtained final approval from the
U.S. Bankruptcy Court for the District of Delaware to pay the
claims of its key suppliers.
The suppliers, whose goods and services are considered essential
to Green Field's business operations, have to sign first a trade
agreement with the company before their claims are paid. The
company, however, can pay those claims even without an agreement
if it thinks that a non-payment of those claims won't be good for
its operations.
Green Field is prohibited from paying supplier claims of more than
$1 million without further approval from the bankruptcy court.
Meanwhile, suppliers who receive payment are not permitted to file
or perfect a lien on account of their claims. Any existing lien
must be removed even if it is against a property of a non-debtor,
according to the court's final order.
About Green Field Energy
Green Field is an independent oilfield services company that
provides a wide range of services to oil and natural gas drilling
and production companies to help develop and enhance the
production of hydrocarbons. The Company's services include
hydraulic fracturing, cementing, coiled tubing, pressure pumping,
acidizing and other pumping services.
Green Field Energy and two affiliates filed Chapter 11 petitions
in Delaware on Oct. 27, 2013, after defaulting on an $80 million
credit provided by an affiliate of Royal Dutch Shell Plc (Case No.
13-bk-12783, Bankr. D. Del.).
The Debtors are represented by Michael R. Nestor, Esq., and Kara
Hammon Coyle, Esq., at Young Conaway Stargatt & Taylor, LLP, in
Wilmington, Delaware; and Josef S. Athanas, Esq., Caroline A.
Reckler, Esq., Sarah E. Barr, Esq., and Matthew L. Warren, Esq.,
at Latham & Watkins LLP, in Chicago, Illinois.
The Debtors' investment banker is Carl Marks Advisory Group LLC.
Thomas E. Hill, from Alvarez & Marsal North America, LLC, serves
as the Debtors' chief restructuring officer.
BG Credit Partners LLC and ICON Capital LLC are providing $30
million in DIP Loans to the Debtors. The DIP Lenders are
represented by David B. Kurzweil, Esq., at Greenberg Traurig LLP,
in Atlanta, Georgia.
HAMPTON CAPITAL: Court Confirms Liquidation Plan
------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of North
Carolina has entered an order confirming Hampton Capital Partners,
LLC's second amended plan of liquidation dated Oct. 8, 2013, after
no objections to the Plan were filed by any creditor or party in
interest.
As reported by the Troubled Company Reporter on Oct. 29, 2013, the
Court on Oct. 9, 2013, entered an order approving the second
amended disclosure statement dated Oct. 8, 2013, explaining the
Debtor's Plan. The Plan proposes the appointment of a trustee to
wind up the affairs of the Debtor, complete the final
administration of the Debtor's bankruptcy estate, and consummate
the Plan. A copy of Amended Disclosure Statement is available for
free at:
http://bankrupt.com/misc/HAMPTON_CAPITAL_amendedds_2plan.pdf
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. 13-80015) 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.
HARRISBURG, PA: Officials Lose Appeal of State Takeover
-------------------------------------------------------
A three-judge panel of the U.S. Court of Appeals for the Third
Circuit affirmed the U.S. District Court for the Middle District
of Pennsylvania's ruling dismissing, for lack of standing, the
complaint filed by several members of the government of the City
of Harrisburg, Pennsylvania.
Several members of Harrisburg's city government brought the suit
in their official and individual capacities, prior to the issuance
of a writ directing the City Council to enact temporary tax
increase, which was part of the city's proposed recovery plan.
The Plaintiffs' complaint alleges that Act 47 Amendments -- the
state law allowing financially distressed municipalities to
request technical and financial assistance from the State --
deprived them of due process and equal protection under the
Fourteenth Amendment, and violated the "special laws" provision of
the Pennsylvania Constitution.
The Third Circuit pointed out that, on appeal, the only injury
that the Plaintiffs submit sufficient to grant them standing is
the threat of contempt sanctions if they fail to comply with a
Commonwealth Court writ of mandamus. The Third Circuit found this
injury speculative, thus insufficient to confer standing.
The case is WANDA R.D. WILLIAMS, in her individual and official
capacity as an elected member of Harrisburg City Council; EUGENIA
SMITH, in her individual capacity as an elected member of
Harrisburg City Council; BRAD KOPLINSK in his individual and
official capacity as an elected member of Harrisburg City Council;
SANDRA R. REID, in her individual and official capacity as an
elected member of Harrisburg City Council; SUSAN WILSON-BROWN, in
her individual and official capacity as an elected member of
Harrisburg City Council; DANIEL C. MILLER, in his individual and
official capacity as the elected Controller for the City of
Harrisburg; JOHN CAMPBELL, in his individual and official capacity
as the elected Treasurer for the City of Harrisburg, Appellants v.
GOVERNOR OF PENNSYLVANIA; WILLIAM B. LYNCH, sued in his official
capacity, No. 13-1896 (3d. Cir.).
Paul A. Rossi, Esq., argued in Kennet Square, Pennsylvania, argued
for Appellants. Sean A. Kirkpatrick, Esq., in Harrisburg,
Pennsylvania, argued for Appellees.
A full-text copy of the Decision dated Jan. 7, 2013, is available
at http://bankrupt.com/misc/HARRISBURGopn0107.pdf
About Harrisburg, Pennsylvania
The city of Harrisburg, in Pennsylvania, is coping with debt
related to a failed revamp of an incinerator. The city is
$65 million in default on $242 million owing on bonds sold to
finance an incinerator that converts trash to energy.
The Harrisburg city council voted 4-3 on Oct. 11, 2011, to
authorize the filing of a Chapter 9 municipal bankruptcy (Bankr.
M.D. Pa. Case No. 11-06938). The city claims to be insolvent,
unable to pay its debt and in imminent danger of having
tax revenue seized by holders of defaulted bonds.
Judge Mary D. France presided over the Chapter 9 case. Mark D.
Schwartz, Esq. and David A. Gradwohl, Esq., served as Harrisburg's
counsel. The petition estimated $100 million to $500 million in
assets and debts. Susan Wilson, the city's chairperson on Budget
and Finance, signed the petition.
Harrisburg said in court papers it is in imminent jeopardy through
six pending legal actions by creditors with respect to a number of
outstanding bond issues relating to the Harrisburg Materials,
Energy, Recycling and Recovery Facilities, which processes waste
into steam and electrical energy. The owner and operator of the
incinerator is The Harrisburg Authority, which is unable to pay
the bond issues. The city is the primary guarantor under each
bond issue. The lawsuits were filed by Dauphin County, where
Harrisburg is located, Joseph and Jacalyn Lahr, TD Bank N.A., and
Covanta Harrisburg Inc.
The Commonwealth of Pennsylvania, the County of Dauphin, and
Harrisburg city mayor Linda D. Thompson and other creditors and
interested parties objected to the Chapter 9 petition. The state
later adopted a new law allowing the governor to appoint a
receiver.
Kenneth W. Lee, Esq., Christopher E. Fisher, Esq., Beverly Weiss
Manne, Esq., and Michael A. Shiner, Esq., at Tucker Arensberg,
P.C., represented Mayor Thompson in the Chapter 9 case. Counsel to
the Commonwealth of Pennsylvania was Neal D. Colton, Esq., Jeffrey
G. Weil, Esq., Eric L. Scherling, Esq., at Cozen O'Connor.
In November 2011, the Bankruptcy Judge dismissed the Chapter 9
case because (1) the City Council did not have the authority under
the Optional Third Class City Charter Law and the Third Class City
Code to commence a bankruptcy case on behalf of Harrisburg and (2)
the City was not specifically authorized under state law to be a
debtor under Chapter 9 as required by 11 U.S.C. Sec. 109(c)(2).
Dismissal of the Chapter 9 petition was upheld in a U.S. District
Court.
That same month, the state governor appointed David Unkovic as
receiver for Harrisburg. Mr. Unkovic is represented by the
Municipal Recovery & Restructuring group of McKenna Long &
Aldridge LLP, led by Keith Mason, Esq., co-chair of the group.
Mr. Unkovic resigned as receiver March 30, 2012. Mr. Unkovic was
replaced by William Lynch as receiver.
HRK HOLDINGS: Further Orders on Loans From Regions Bank Entered
---------------------------------------------------------------
Judge K. Rodney May entered final orders HRK Holdings, LLC, et
al.'s requests to obtain postpetition financing from Regions Bank,
N.A.
In an order entered in mid-December 2013, the judge authorized the
Debtors to borrow from Regions Bank from a line of credit facility
-- referred to as the "Long Term Care Trust Funding Line of
Credit" -- of up to $2,500,000, together with an interest reserve,
costs and committement fees, with interest accruing at the rate of
9% per annum.
In a separate order also entered on the same date, the judge
permitted the Debtors to obtain further advances from Regions Bank
up to the extent of remaining funds under an existing "Site Work
Line of Credit." These advances will also bear interest of 9% per
annum.
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.
HOUSTON REGIONAL: Rockets May Continue Negotiating for Network
--------------------------------------------------------------
David Barron, writing for The Houston Chronicle, reported that
Judge Marvin Isgur gave the Houston Rockets of the National
Basketball Association authority to continue negotiating on behalf
of Comcast SportsNet Houston and set Feb. 4 to hear arguments on
the Astros' motion to dismiss the involuntary bankruptcy petition
filed against the network.
According to the report, Judge Isgur favors eliminating a
controversial clause that requires all three partners -- the
Astros, Rockets, Comcast Corp. -- to agree on significant
decisions.
"The brilliant idea of giving everybody veto power . . . probably
not working out too well," Judge Isgur said, the report cited.
About Houston Regional Sports Network
An involuntary Chapter 11 bankruptcy petition was filed against
Houston Regional Sports Network, L.P. d/b/a Comcast SportsNet
Houston (Bankr. S.D. Tex. Case No. 13-35998) on Sept. 27, 2013.
The involuntary filing was launched by three units of Comcast/NBC
Universal and a television-related company. The petitioners are:
Houston SportsNet Finance LLC, Comcast Sports Management Services
LLC, National Digital Television Center LLC, and Comcast SportsNet
California, LLC.
The petitioning creditors have filed papers asking the Bankruptcy
Judge to appoint an independent Chapter 11 trustee "to conduct a
fair and open auction process for the Network's business assets on
a going concern basis."
Houston Regional Sports Network is a joint enterprise among
affiliates of the Houston Astros baseball team, the Houston
Rockets basketball team, and Houston SportsNet Holdings, LLC --
"Comcast Owner" -- an affiliate of Comcast Corporation. The
Network has three limited partners -- Comcast Owner, Rockets
Partner, L.P., and Astros HRSN LP Holdings LLC. The primary
purpose of Houston Regional Sports Network is to create and
operate a regional sports programming service that produces,
exhibits, and distributes sports programming on a full-time basis,
including live Astros and Rockets games within the league-
permitted local territories.
Counsel for the petitioning creditors are Howard M. Shapiro, Esq.,
at Wilmer Cutler Pickering Hale and Dorr LLP; George W. Shuster,
Jr., Esq., at Wilmer Cutler Pickering Hale and Dorr LLP; Vincent
P. Slusher, Esq., at DLA Piper; and Arthur J. Burke, Esq., at
Davis Polk & Wardwell LLP.
Judge Marvin Isgur presides over the case.
HOUSTON REGIONAL: Comcast Bidding for Rights to Show Astros Games
-----------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Comcast Corp. has filed a proposal to serve as the
opening bidder at an auction for Houston Regional Sports Network
LP.
According to the report, the National Basketball Association's
Houston Rockets, which is Comcast's partner in the sports network
joint venture along with the Major League Baseball's Houston
Astros, has said that, as lead negotiator, it held talks with 10
potential buyers. The club said there are "significant
negotiations" with "at least one other party" in addition to
Philadelphia-based Comcast, the biggest U.S. cable provider, the
report said.
Comcast has said in filings that it's willing to buy the network's
assets, which have "significant value," the report cited. A
"substantial majority" of the network's revenue comes from
redistribution of the teams' games, according to court papers.
About Houston Regional Sports Network
An involuntary Chapter 11 bankruptcy petition was filed against
Houston Regional Sports Network, L.P. d/b/a Comcast SportsNet
Houston (Bankr. S.D. Tex. Case No. 13-35998) on Sept. 27, 2013.
The involuntary filing was launched by three units of Comcast/NBC
Universal and a television-related company. The petitioners are:
Houston SportsNet Finance LLC, Comcast Sports Management Services
LLC, National Digital Television Center LLC, and Comcast SportsNet
California, LLC.
The petitioning creditors have filed papers asking the Bankruptcy
Judge to appoint an independent Chapter 11 trustee "to conduct a
fair and open auction process for the Network's business assets on
a going concern basis."
Houston Regional Sports Network is a joint enterprise among
affiliates of the Houston Astros baseball team, the Houston
Rockets basketball team, and Houston SportsNet Holdings, LLC --
"Comcast Owner" -- an affiliate of Comcast Corporation. The
Network has three limited partners -- Comcast Owner, Rockets
Partner, L.P., and Astros HRSN LP Holdings LLC. The primary
purpose of Houston Regional Sports Network is to create and
operate a regional sports programming service that produces,
exhibits, and distributes sports programming on a full-time basis,
including live Astros and Rockets games within the league-
permitted local territories.
Counsel for the petitioning creditors are Howard M. Shapiro, Esq.,
at Wilmer Cutler Pickering Hale and Dorr LLP; George W. Shuster,
Jr., Esq., at Wilmer Cutler Pickering Hale and Dorr LLP; Vincent
P. Slusher, Esq., at DLA Piper; and Arthur J. Burke, Esq., at
Davis Polk & Wardwell LLP.
Judge Marvin Isgur presides over the case.
HOVNANIAN ENTERPRISES: Prices $150 Million Senior Notes Offering
----------------------------------------------------------------
Hovnanian Enterprises, Inc.'s wholly owned subsidiary, K.
Hovnanian Enterprises, Inc., priced $150 million aggregate
principal amount of 7.000 percent senior notes due 2019 in a
private placement. The Notes will be guaranteed by the Company
and substantially all of its subsidiaries.
K. Hovnanian intends to use the net proceeds from the Notes
Offering for general corporate purposes, including land
acquisition and land development, and to fund the redemption of
all of K. Hovnanian's outstanding 6.25 percent Senior Notes due
2015 and to pay related fees and expenses.
The Notes have not been registered under the Securities Act of
1933, as amended. The Notes may not be offered or sold within the
United States or to U.S. persons, except to "qualified
institutional buyers" in reliance on the exemption from
registration provided by Rule 144A and to certain persons in
offshore transactions in reliance on Regulation S.
About Hovnanian Enterprises
Red Bank, New Jersey-based Hovnanian Enterprises, Inc. (NYSE: HOV)
-- http://www.khov.com/-- founded in 1959 by Kevork S. Hovnanian,
is one of the nation's largest homebuilders with operations in
Arizona, California, Delaware, Florida, Georgia, Illinois,
Kentucky, Maryland, Minnesota, New Jersey, New York, North
Carolina, Ohio, Pennsylvania, South Carolina, Texas, Virginia and
West Virginia. The Company's homes are marketed and sold under
the trade names K. Hovnanian Homes, Matzel & Mumford, Brighton
Homes, Parkwood Builders, Town & Country Homes, Oster Homes and
CraftBuilt Homes. As the developer of K. Hovnanian's Four Seasons
communities, the Company is also one of the nation's largest
builders of active adult homes.
Hovnanian Enterprises posted net income of $31.29 million on $1.85
billion of total revenues for the year ended Oct. 31, 2013, as
compared with a net loss of $66.19 million on $1.48 billion of
total revenues during the prior year.
As of Oct. 31, 2013, the Company had $1.75 billion in total
assets, $2.19 billion in total liabilities and a $432.79 million
total deficit.
* * *
As reported by the Troubled Company Reporter on April 25, 2013,
Standard & Poor's Ratings Services said it raised its corporate
credit rating on Hovnanian Enterprises Inc. to 'B-' from 'CCC+'.
"The upgrade reflects strengthening operating performance
supported by the broader recovery in the housing market that, we
believe, should support modest profitability in 2013," said
Standard & Poor's credit analyst George Skoufis.
In the Dec. 9, 2013, edition of the TCR, Fitch Ratings upgraded
the Issuer Default Rating (IDR) of Hovnanian Enterprises to 'B-'
from 'CCC'. The upgrade and the Stable Outlook reflects HOV's
operating performance year-to-date (YTD), adequate liquidity
position, and moderately better prospects for the housing sector
during the remainder of this year and in 2014.
As reported by the TCR on Jan. 9, 2014, Moody's Investors Service
raised the Corporate Family Rating of Hovnanian Enterprises, Inc.,
to B3 from Caa1. The upgrade of the Corporate Family Rating to B3
reflects Hovnanian's improved financial performance including
improvement in interest coverage to slightly above 1x and finally
turning net income positive for the fiscal year 2013.
IBAHN CORP: Derek Evans Okayed as Accountant, Tax Service Provider
------------------------------------------------------------------
IBahn Corp and its debtor-affiliates sought and obtained
authorization from the U.S. Bankruptcy Court for the District of
Delaware to employ Derek E. Evans CPA PLLC as special purpose
accountant and tax services provider, nunc pro tunc to Sept. 9,
2013.
DEE will perform services for the Debtors in connection with the
preparation of federal and state income tax returns as follows:
(a) preparation of the federal consolidated, the state combined
and consolidated and the separate state income tax returns
of iBahn Corp and subsidiaries;
(b) preparation of iBahn Leasing LLC separate returns in those
States that require such returns, including preparation of
the forms 5471 for all non-U.S. subsidiaries and forms 8858
for disregarded non-U.S. subsidiaries;
(c) preparation of all book to tax difference calculations
necessary for the preparation of the tax returns; and
(d) provide other services to the Debtors as may be necessary
to complete the state and federal tax returns.
DEE will be compensated on a $59,000 flat fee basis for the filing
of the state and federal tax returns for the 2012 tax year, plus
reimbursement for out-of-pocket expenses for photocopying and
postage.
Derek Evans, principal of DEE, assured the Court that the firm is
a "disinterested person" as the term is defined in Section 101(14)
of the Bankruptcy Code and does not represent any interest adverse
to the Debtors and their estates.
About iBahn Corp.
Salt Lake City, Utah-based IBahn Corp., a provider of Internet
services to hotels, sought bankruptcy protection (Bankr. D. Del.
Case No. 13-12285) on Sept. 6, 2013, citing a loss of contracts
with largest customer Marriott International Inc. and patent
litigation costs.
IBahn scheduled $19,960,035 in total assets and $15,925,016 in
total liabilities. The petition was signed by CFO Ryan Jonson.
Judge Peter J. Walsh presides over the case.
Timothy P. Cairns, Esq., Bruce Grohsgal, Esq., Laura Davis Jones,
Esq., and James E. O'Neill, Esq., at Pachulski, Stang, Ziehl Young
& Jones, LLP, serve as the Debtor's bankruptcy counsel. Epiq
Bankruptcy Solutions, LLC, serves as claims and noticing agent,
and as administrative advisor. Houlihan Lokey Capital, Inc., led
by its director Peter S. Fishman, serves as financial advisor and
investment banker.
An official committee of unsecured creditors has not yet been
appointed in these cases by the Office of the United States
Trustee.
IBAHN CORP: Feb. 3 Hearing on Exclusivity Extension Bid
-------------------------------------------------------
iBahn Corp. and its debtor affiliates ask the U.S. Bankruptcy
Court for the District of Delaware to extend the exclusivity
period for filing a plan through and including April 4, 2014, and
including June 3, 2014, for obtaining acceptances of a plan.
Parties-in-interest that intend to object to the extension request
may do so by filing objections by Jan. 17, 2014. The Debtors will
return to the Court on Feb. 3 at 3:00 p.m. for a hearing on the
matter.
According to the Debtors, they are still performing marketing
efforts targeted to both strategic and financial investors. The
Debtors say they need the additional time to file a plan in order
to continue their marketing process.
Since Oct. 25, 2013, Houlihan Lokey Capital Inc., the Debtors'
investment banker and financial advisor, has worked with the
Debtors to market the business to new investors. As part of this
process, Houlihan Lokey has commenced a broad marketing effort
targeted to both strategic and financial advisors. Marketing
materials have been prepared and are being distributed to
interested parties who have entered into satisfactory
confidentially agreements with the Debtors. As part of the
process, the Debtors expect to select one of the interested
parties with whom an agreement can be reached.
About iBahn Corp.
Salt Lake City, Utah-based IBahn Corp., a provider of Internet
services to hotels, sought bankruptcy protection (Bankr. D. Del.
Case No. 13-12285), citing a loss of contracts with largest
customer Marriott International Inc. and patent litigation costs.
IBahn Chief Financial Officer Ryan Jonson said the company had
assets of $13.6 million and it listed liabilities of as much as
$50 million in the Chapter 11 filing on Sept. 6, 2013. The
petitions were signed by Ryan Jonson as chief financial officer.
Judge Peter J. Walsh presides over the case.
Pachulski Stang, Ziehl Young & Jones, LLP, serves as the Debtors'
counsel. The Debtors' claims and noticing agent is Epiq
Bankruptcy Solutions.
INTEGRATED HEALTHCARE: Suspending Filing of Reports with SEC
------------------------------------------------------------
Integrated Healthcare Holdings, Inc., filed a Form 15 with the
U.S. Securities and Exchange Commission to terminate the
registration of its common stock, $.001 par value per share, under
Section 12(g) of the Securities Exchange Act of 1934. As of
Jan. 7, 2014, there were only 128 holders of the securities. As a
result of the Form 15 filing, the Company is not anymore obliged
to file reports with the SEC.
About Integrated Healthcare
Santa Ana, Calif.-based Integrated Healthcare Holdings, Inc., owns
and operates four community-based hospitals located in southern
California.
Integrated Healthcare incurred a net loss of $15.86 million on
$383.50 million of net patient service revenues for the year ended
March 31, 2013, as compared with net income of $7.94 million on
$362.19 million of net patient service revenues for the year ended
March 31, 2012. The Company's balance sheet at Sept. 30, 2013,
showed $218.88 million in total assets, $224.65 million in total
liabilities and a $5.76 million total stockholders' deficiency.
KEYWELL LLC: Has Court OK to Use Cash Collateral Until Jan. 10
--------------------------------------------------------------
The Hon. Eugene R. Wedoff of the U.S. Bankruptcy Court for the
Northern District of Illinois has granted Keywell LLC
authorization to use the cash collateral of NewKey Group, LLC, and
NewKey Group III, LLC, until Jan. 10, 2014.
A copy of the budget is available for free at:
http://bankrupt.com/misc/KEYWELLLLCcashcollorderbudget.pdf
As reported by the Troubled Company Reporter on Oct. 31, 2013, the
Debtor, as of the Petition Date, owed $4,553,320, with interest
continuing to accrue to NewKey; and $5,942,742 with interest
continuing to accrue to NewKey II.
The Debtor is authorized to use cash collateral to pay $175,000
settlement payment to Wells Fargo; provided, however, that the
amount will be restored as cash collateral from unencumbered sale
proceeds received at the closing, which was scheduled for Dec. 31,
2013.
As reported by the TCR on Dec. 17, 2013, Bloomberg News bankruptcy
columnist Bill Rochelle reports that the price of the Debtor rose
about 26% at a December auction, from an initial cash bid of
$12.5 million to a final offer of $15.8 million. According to the
report, four bidders qualified for the auction. The original
offer was from Cronimet Holdings Inc, but KW Metals Acquisition
LLC came out on top with the high bid, from which costs will be
paid to cure contract defaults. The Court in Chicago formally
approved the sale on Dec. 12.
United Steel, Paper and Forestry, Rubber, Manufacturing, Energy,
Allied Industrial and Service Workers International Union, AFL-
CIOACLC filed with the Court on Nov. 25, 2013, a conditional
objection to the sale, saying that it asked Cronimet to confer
with respect to the hiring of all bargaining unit employees and
recognizing the union following closing, but no negotiations were
engaged between the two parties and no agreements concerning the
bargaining unit were concluded.
About Keywell L.L.C.
Keywell L.L.C. filed a Chapter 11 petition (Bankr. N.D. Ill. Case
No. 13-37603) on Sept. 24, 2013. Mark Lozier signed the petition
as president and CEO. The Debtor estimated assets and debts of at
least $10 million. Judge Eugene R. Wedoff presides over the case.
Adelman & Gettleman Ltd. serves as the Debtor's counsel. Patzik,
Frank & Samotny Ltd. serves as the Debtor's as special counsel.
Eureka Capital Markets, LLC, serves as the Debtor's investment
banker, while Conway MacKenzie, Inc., serves as its financial
advisors.
The Debtor's lenders are represented by Steven B. Towbin, Esq.,
and Gordon E. Gouveia, Esq., at Shaw Fishman Glantz & Towbin LLC,
in Chicago, Illinois.
LANDAUER HEALTHCARE: Sells Assets to Quadrant Management
--------------------------------------------------------
Judge Christopher S. Sontchi of the U.S. Bankruptcy Court for the
District of Delaware authorized Landauer Healthcare Holdings,
Inc., and its affiliates to sell all or substantially all of their
assets to Quadrant Management Inc.
When they filed for bankruptcy, the Debtors had a deal to sell the
business to Quadrant for $22 million, absent higher and better
offers. A unit of Passaic Healthcare Services LLC, doing business
as Allcare Medical, submitted a counteroffer but the bid was
deficient and failed to meet the deadlines, and the offer was
later withdrawn.
After Herbard Ltd., an affiliate of Quadrant, purchased the
$29 million in senior-secured debt and thus became the "secured
lender", the Debtors, in consultation with the statutory
committee of unsecured creditors elected to suspend the sale
process in pursuing confirmation of a Chapter 11 plan.
The Debtors believe that after extensive, good faith negotiations
among the Debtors, their secured lender, Herbard, Ltd., and the
Official Committee of Unsecured Creditors, they have proposed a
plan that they believe is fair and equitable, maximizes the value
of the Debtors' estates and provides the best recovery to holders
of allowed claims.
The Plan is also premised on the terms of the settlement between
the Creditors' Committee, LMI DME Holdings LLC and Quadrant, which
provides for the creation of a trust for the sole benefit of
holders of general unsecured claims and if the Plan is confirmed,
holders of allowed convenience class claims and to which the
secured lender carved out from its collateral certain assets to be
contributed thereto. The Bankruptcy Court approved the settlement
on Oct. 22, 2013.
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reported that without the settlement, there would have been no
recovery for unsecured creditors. In addition, Quadrant waives
its deficiency claim, thus not diluting unsecured creditors'
recovery. Quadrant isn't acquiring lawsuits and is providing
$100,000 to fund litigation for the benefit of unsecured
creditors.
The Debtors, according to the sale order, will not assume and
assign or otherwise transfer the Debtors' provider transaction
access numbers or Centers for Medicare and Medicaid Services
enrollment agreements to the Purchaser. The Debtors will only be
permitted to transfer contract No. VA528-12-D-0090 to the
Purchaser or its designee upon approval and a written novation
from the United States Department of Veteran Affairs.
About Landauer Healthcare
Home medical equipment provider Landauer Healthcare Holdings,
Inc., sought Chapter 11 protection (Bankr. D. Del. Lead Case No.
13-12098) on Aug. 16, 2013, with a deal to sell all assets to
Quadrant Management Inc. for $22 million, absent higher and better
offers.
The Company has 32 operating locations, with 50% of inventory
concentrated in Mount Vernon, New York; Great Neck, New York;
Warwick, Rhode Island; and Philadelphia, Pennsylvania. Landauer,
which derives revenues by reimbursement from insurers, Medicare
and Medicaid, reported net revenues of $128.5 million in fiscal
year ended March 31, 2013.
Landauer disclosed $2,978,495 in assets and $53,636,751 in
liabilities as of the Chapter 11 filing.
Michael R. Nestor, Esq., Matthew B. Lunn, Esq., and Justin H.
Rucki, Esq., at Young Conaway Stargatt & Taylor, LLP; and John A.
Bicks, Esq., Charles A. Dale III, Esq., and Mackenzie L. Shea,
Esq., at K&L Gates LLP, serve as the Debtor's counsel. Carl Marks
Advisory Group serves as the Debtor's financial advisors, and Epiq
Systems as claims and notice agent. Maillie LLP serves as the
Debtors' tax accountants.
The Debtor filed a Chapter 11 restructuring plan that would
transfer ownership of the home medical supply company to Quadrant
Management Inc., whose $22 million bid for the company went
unchallenged.
Roberta A. DeAngelis, the U.S. Trustee for Region 3, appointed
five members to the official committee of unsecured creditors in
the Chapter 11 cases. The Committee retained Landis Rath & Cobb
LLP as counsel. Deloitte Financial Advisory Services LLP serves
as its financial advisor.
LEHMAN BROTHERS: Court Allows IRS to File Amended Claims
--------------------------------------------------------
Lehman Brothers Holdings Inc. obtained an order from the U.S.
Bankruptcy Court for the Southern District of New York authorizing
the Department of the Treasury-Internal Revenue Service to file
amended proofs of claim.
The agency previously filed eight claims, which assert more than
$2.3 billion against Lehman and its subsidiaries. On Dec. 10,
2013, the agency amended the original claims after it signed an
agreement with Lehman, which limits the reserves that have to be
maintained for those claims.
The amended claims to be filed by the agency seek payment of not
more than $510 million, which would reduce reserves for those
claims by as much as $1.8 billion, court filings show.
A list of the original and amended claims is available without
charge at http://is.gd/4ZvTg1
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was
the fourth largest investment bank in the United States. For
more than 150 years, Lehman Brothers has been a leader in the
global financial markets by serving the financial needs of
corporations, governmental units, institutional clients and
individuals worldwide.
Lehman Brothers filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y.
Case No. 08-13555) on Sept. 15, 2008. Lehman's bankruptcy
petition disclosed US$639 billion in assets and US$613 billion in
debts, effectively making the firm's bankruptcy filing the
largest in U.S. history. Several other affiliates followed
thereafter.
Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset
LLC sought for bankruptcy protection in December 2009.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at
Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell,
Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve
as counsel to the Official Committee of Unsecured Creditors.
Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's
investment banker.
On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S.
District Court for the Southern District of New York, entered an
order commencing liquidation of Lehman Brothers, Inc., pursuant
to the provisions of the Securities Investor Protection Act (Case
No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI.
The Bankruptcy Court approved Barclays Bank Plc's purchase of
Lehman Brothers' North American investment banking and capital
markets operations and supporting infrastructure for US$1.75
billion. Nomura Holdings Inc., the largest brokerage house in
Japan, purchased LBHI's operations in Europe for US$2 plus the
retention of most of employees. Nomura also bought Lehman's
operations in the Asia Pacific for US$225 million.
Lehman emerged from bankruptcy protection on March 6, 2012, more
than three years after it filed the largest bankruptcy in U.S.
history. The Chapter 11 plan for the Lehman companies other than
the broker was confirmed in December 2011.
Lehman made its first payment of $22.5 billion to creditors in
April 2012, a second payment of $10.2 billion on Oct. 1, 2012,
and a third distribution of $14.2 billion on April 4, 2013. The
brokerage is yet to make a first distribution to non-customers,
although customers are being paid in full.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other
insolvency and bankruptcy proceedings undertaken by its
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000).
LEHMAN BROTHERS: Judge OKs Deal on Dismissal of Thomas Appeal
-------------------------------------------------------------
Judge James Peck approved an agreement, which calls for the
dismissal of Stephen Thomas' appeal of a bankruptcy court's
decision that barred him from asserting his claim against Lehman
Brothers Holdings Inc.'s brokerage.
The U.S. Bankruptcy Court in Manhattan on Oct. 15 issued an order
disallowing three claims, including Mr. Thomas' $630,932 claim,
on grounds that they were filed after the court-approved
deadline.
The claimant, who is represented by New Jersey-based Rabinowitz
Lubetkin & Tully LLC, brought the appeal before the U.S. District
Court for the Southern District of New York.
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was
the fourth largest investment bank in the United States. For
more than 150 years, Lehman Brothers has been a leader in the
global financial markets by serving the financial needs of
corporations, governmental units, institutional clients and
individuals worldwide.
Lehman Brothers filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y.
Case No. 08-13555) on Sept. 15, 2008. Lehman's bankruptcy
petition disclosed US$639 billion in assets and US$613 billion in
debts, effectively making the firm's bankruptcy filing the
largest in U.S. history. Several other affiliates followed
thereafter.
Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset
LLC sought for bankruptcy protection in December 2009.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at
Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell,
Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve
as counsel to the Official Committee of Unsecured Creditors.
Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's
investment banker.
On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S.
District Court for the Southern District of New York, entered an
order commencing liquidation of Lehman Brothers, Inc., pursuant
to the provisions of the Securities Investor Protection Act (Case
No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI.
The Bankruptcy Court approved Barclays Bank Plc's purchase of
Lehman Brothers' North American investment banking and capital
markets operations and supporting infrastructure for US$1.75
billion. Nomura Holdings Inc., the largest brokerage house in
Japan, purchased LBHI's operations in Europe for US$2 plus the
retention of most of employees. Nomura also bought Lehman's
operations in the Asia Pacific for US$225 million.
Lehman emerged from bankruptcy protection on March 6, 2012, more
than three years after it filed the largest bankruptcy in U.S.
history. The Chapter 11 plan for the Lehman companies other than
the broker was confirmed in December 2011.
Lehman made its first payment of $22.5 billion to creditors in
April 2012, a second payment of $10.2 billion on Oct. 1, 2012,
and a third distribution of $14.2 billion on April 4, 2013. The
brokerage is yet to make a first distribution to non-customers,
although customers are being paid in full.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other
insolvency and bankruptcy proceedings undertaken by its
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000).
LEHMAN BROTHERS: Seeks to Reduce $115MM, Disallow $8MM in Claims
----------------------------------------------------------------
Lehman Brothers Holdings Inc. asked the U.S. Bankruptcy Court in
Manhattan to classify 49 claims as subordinated under its Chapter
11 plan.
The claimants, most of which are underwriters of securities
issued by Lehman, seek to recover nearly $900 million. The
claims are listed at:
http://bankrupt.com/misc/LBHI_449thoo_45Underwriter.pdf
http://bankrupt.com/misc/LBHI_452ndoo_4Underwriter.pdf
Meanwhile, Lehman proposed to reduce 129 claims to the maximum
amounts for which the company could be liable to the claimants.
The company wants the total amount asserted by the claimants
reduced from $114.8 million to $19.4 million. The claims are
listed at:
http://bankrupt.com/misc/LBHI_450thoo_116Claims.pdf
http://bankrupt.com/misc/LBHI_451stoo_13Claims.pdf
Lehman also proposed to disallow 12 claims, which seek payment of
more than $7.67 million. A list of the claims can be accessed
for free at http://is.gd/FGMrig
Meanwhile, the company dropped its objection to Claim Nos. 43187
and 24073 filed by John Wendy and the Delaware River Port
Authority, respectively. It also withdrew its objection to Claim
Nos. 14172 and 14173 filed by ICM Business Trust.
Court Disallows $80.8 Million in Claims
The bankruptcy court disallowed 16 claims, which assert more than
$80.8 million against Lehman. The claims are listed at:
http://bankrupt.com/misc/LBHI_117thOO_5EmployeeClaims.pdf
http://bankrupt.com/misc/LBHI_254thOO_1EmployeeClaim.pdf
http://bankrupt.com/misc/LBHI_267thOO_1NoLiability.pdf
http://bankrupt.com/misc/LBHI_429thOO_1NoLiability.pdf
http://bankrupt.com/misc/LBHI_440thOO_4InsufficientDocs.pdf
http://bankrupt.com/misc/LBHI_445thOO_2NoLiability.pdf
http://bankrupt.com/misc/LBHI_447thOO_2InsuffDocs.pdf
The court also disallowed portions of four claims tied to
securities identified by ISIN XS0215349357 or ISIN XS0229269856.
A list of the claims is available at http://is.gd/ODCGhl
Separately, several Lehman creditors filed court papers to block
approval of the proposed treatment of their claims, arguing the
company did not provide evidence to support its objections to
their claims, among other reasons.
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was
the fourth largest investment bank in the United States. For
more than 150 years, Lehman Brothers has been a leader in the
global financial markets by serving the financial needs of
corporations, governmental units, institutional clients and
individuals worldwide.
Lehman Brothers filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y.
Case No. 08-13555) on Sept. 15, 2008. Lehman's bankruptcy
petition disclosed US$639 billion in assets and US$613 billion in
debts, effectively making the firm's bankruptcy filing the
largest in U.S. history. Several other affiliates followed
thereafter.
Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset
LLC sought for bankruptcy protection in December 2009.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at
Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell,
Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve
as counsel to the Official Committee of Unsecured Creditors.
Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's
investment banker.
On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S.
District Court for the Southern District of New York, entered an
order commencing liquidation of Lehman Brothers, Inc., pursuant
to the provisions of the Securities Investor Protection Act (Case
No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI.
The Bankruptcy Court approved Barclays Bank Plc's purchase of
Lehman Brothers' North American investment banking and capital
markets operations and supporting infrastructure for US$1.75
billion. Nomura Holdings Inc., the largest brokerage house in
Japan, purchased LBHI's operations in Europe for US$2 plus the
retention of most of employees. Nomura also bought Lehman's
operations in the Asia Pacific for US$225 million.
Lehman emerged from bankruptcy protection on March 6, 2012, more
than three years after it filed the largest bankruptcy in U.S.
history. The Chapter 11 plan for the Lehman companies other than
the broker was confirmed in December 2011.
Lehman made its first payment of $22.5 billion to creditors in
April 2012, a second payment of $10.2 billion on Oct. 1, 2012,
and a third distribution of $14.2 billion on April 4, 2013. The
brokerage is yet to make a first distribution to non-customers,
although customers are being paid in full.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other
insolvency and bankruptcy proceedings undertaken by its
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000).
LEHMAN BROTHERS: LBI Trustee Wants to Disallow $78MM in Claims
--------------------------------------------------------------
James Giddens, the trustee liquidating Lehman Brothers Holdings
Inc.'s brokerage, asked the U.S. Bankruptcy Court in Manhattan to
disallow 65 claims against the brokerage, which seek payment of
$77.9 million in the aggregate. The claims are listed at:
http://bankrupt.com/misc/LBHI_sipa178thoo_11noliability.pdf
http://bankrupt.com/misc/LBHI_sipa181stoo_7inufficientdocs.pdf
http://bankrupt.com/misc/LBHI_sipa183rdoo_47untimely.pdf
Mr. Giddens also proposed to disallow the portions of claims
filed by former employees based on the ownership of common stock
in the brokerage's parent company, ownership or the decline in
value of the claimants' 401(k) savings plan accounts, and claims
for equity interests in the Lehman parent. A list of the claims
is available at http://is.gd/BGC6F7
The trustee also asked the court to reduce and, if appropriate,
reclassify the portions of those employee claims asserting
severance payments.
Meanwhile, Mr. Giddens proposed to reduce the amounts asserted in
32 claims by money managers for their remaining soft dollar
commission credit balances at the brokerage as well as the
amounts asserted in 42 other claims filed by former employees for
deferred compensation payments. The claims are listed at:
http://bankrupt.com/misc/LBHI_sipa177thoo_32softdollar.pdf
http://bankrupt.com/misc/LBHI_sipa180thoo_42compensation.pdf
The Lehman trustee also asked the court to reclassify as "general
unsecured" 41 claims filed by former employees for deferred
compensation payments.
The claims do not qualify as secured claims under section 506 of
the Bankruptcy Code and are not entitled to secured status,
according to Mr. Giddens. A list of the claims is available for
free at http://is.gd/npUBon
Meanwhile, the Lehman trustee dropped his objection to claims
filed by four creditors, which include Claim No. 9003361 by MHR
Capital Partners.
Court Disallows $18 Million in Claims
In a related development, the bankruptcy court disallowed 20
claims, which seek payment of more than $18 million in the
aggregate. The claims are listed at:
http://bankrupt.com/misc/LBHI_sipa158thoo_10noliability.pdf
http://bankrupt.com/misc/LBHI_sipa161stoo_10insuffdocs.pdf
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was
the fourth largest investment bank in the United States. For
more than 150 years, Lehman Brothers has been a leader in the
global financial markets by serving the financial needs of
corporations, governmental units, institutional clients and
individuals worldwide.
Lehman Brothers filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y.
Case No. 08-13555) on Sept. 15, 2008. Lehman's bankruptcy
petition disclosed US$639 billion in assets and US$613 billion in
debts, effectively making the firm's bankruptcy filing the
largest in U.S. history. Several other affiliates followed
thereafter.
Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset
LLC sought for bankruptcy protection in December 2009.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at
Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell,
Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve
as counsel to the Official Committee of Unsecured Creditors.
Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's
investment banker.
On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S.
District Court for the Southern District of New York, entered an
order commencing liquidation of Lehman Brothers, Inc., pursuant
to the provisions of the Securities Investor Protection Act (Case
No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI.
The Bankruptcy Court approved Barclays Bank Plc's purchase of
Lehman Brothers' North American investment banking and capital
markets operations and supporting infrastructure for US$1.75
billion. Nomura Holdings Inc., the largest brokerage house in
Japan, purchased LBHI's operations in Europe for US$2 plus the
retention of most of employees. Nomura also bought Lehman's
operations in the Asia Pacific for US$225 million.
Lehman emerged from bankruptcy protection on March 6, 2012, more
than three years after it filed the largest bankruptcy in U.S.
history. The Chapter 11 plan for the Lehman companies other than
the broker was confirmed in December 2011.
Lehman made its first payment of $22.5 billion to creditors in
April 2012, a second payment of $10.2 billion on Oct. 1, 2012,
and a third distribution of $14.2 billion on April 4, 2013. The
brokerage is yet to make a first distribution to non-customers,
although customers are being paid in full.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other
insolvency and bankruptcy proceedings undertaken by its
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000).
LEHMAN BROTHERS: 49th Status Report on Claims Settlement
--------------------------------------------------------
Weil Gotshal & Manges LLP, Lehman Brothers' legal counsel, filed
its 49th status report on the settlement of claims it negotiated
through the so-called alternative dispute resolution process.
The report noted that since the filing of the 48th status report,
Lehman has served eight additional ADR notices, bringing the total
number of notices served to 445.
The company also reached settlements with counterparties in seven
ADR matters, all as a result of mediation. Upon closing of those
settlements, the company will recover a total of $2,146,343,632.
Settlements have now been reached in 297 ADR matters involving
396 counterparties.
As of Dec. 18, 127 of the 137 ADR matters that reached the
mediation stage and concluded were settled through mediation.
Only 10 mediations were terminated without settlement.
Fifteen more mediations are scheduled to be conducted for the
period Jan. 9 to March 14, 2014.
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was
the fourth largest investment bank in the United States. For
more than 150 years, Lehman Brothers has been a leader in the
global financial markets by serving the financial needs of
corporations, governmental units, institutional clients and
individuals worldwide.
Lehman Brothers filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y.
Case No. 08-13555) on Sept. 15, 2008. Lehman's bankruptcy
petition disclosed US$639 billion in assets and US$613 billion in
debts, effectively making the firm's bankruptcy filing the
largest in U.S. history. Several other affiliates followed
thereafter.
Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset
LLC sought for bankruptcy protection in December 2009.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at
Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell,
Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve
as counsel to the Official Committee of Unsecured Creditors.
Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's
investment banker.
On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S.
District Court for the Southern District of New York, entered an
order commencing liquidation of Lehman Brothers, Inc., pursuant
to the provisions of the Securities Investor Protection Act (Case
No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI.
The Bankruptcy Court approved Barclays Bank Plc's purchase of
Lehman Brothers' North American investment banking and capital
markets operations and supporting infrastructure for US$1.75
billion. Nomura Holdings Inc., the largest brokerage house in
Japan, purchased LBHI's operations in Europe for US$2 plus the
retention of most of employees. Nomura also bought Lehman's
operations in the Asia Pacific for US$225 million.
Lehman emerged from bankruptcy protection on March 6, 2012, more
than three years after it filed the largest bankruptcy in U.S.
history. The Chapter 11 plan for the Lehman companies other than
the broker was confirmed in December 2011.
Lehman made its first payment of $22.5 billion to creditors in
April 2012, a second payment of $10.2 billion on Oct. 1, 2012,
and a third distribution of $14.2 billion on April 4, 2013. The
brokerage is yet to make a first distribution to non-customers,
although customers are being paid in full.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other
insolvency and bankruptcy proceedings undertaken by its
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000).
LEHMAN BROTHERS: Agrees to Set Off Israel Discount Bank's Claims
----------------------------------------------------------------
Lehman Brothers Holdings Inc. inked an agreement with Israel
Discount Bank Ltd. to lift the automatic stay that was imposed as
a result of the company's bankruptcy filing.
The agreement, which needs approval of the U.S. Bankruptcy Court
in Manhattan, permits the Israeli bank to set off its claim
against the amount owed to Lehman. A copy of the agreement can
be accessed for free at http://is.gd/sWAIbB
Israel Discount Bank asserts a $7.15 million claim against Lehman
on account of the notes issued by the company, which are held
through Euroclear by Israel Discount Bank. Meanwhile, the Israeli
bank owes Lehman more than $5.65 million.
Weil Gotshal & Manges LLP, Lehman's legal counsel, was slated to
present the agreement to Judge James Peck for signature on Jan. 7.
Israel Discount Bank is represented by:
Ronald L. Cohen, Esq.
Seward & Kissel LLP
One Battery Park Plaza
New York, NY 1000
Tel: (212) 574-1375
Fax: (212) 480-8421
Email: cohen@sewkis.com
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was
the fourth largest investment bank in the United States. For
more than 150 years, Lehman Brothers has been a leader in the
global financial markets by serving the financial needs of
corporations, governmental units, institutional clients and
individuals worldwide.
Lehman Brothers filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y.
Case No. 08-13555) on Sept. 15, 2008. Lehman's bankruptcy
petition disclosed US$639 billion in assets and US$613 billion in
debts, effectively making the firm's bankruptcy filing the
largest in U.S. history. Several other affiliates followed
thereafter.
Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset
LLC sought for bankruptcy protection in December 2009.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at
Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell,
Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve
as counsel to the Official Committee of Unsecured Creditors.
Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's
investment banker.
On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S.
District Court for the Southern District of New York, entered an
order commencing liquidation of Lehman Brothers, Inc., pursuant
to the provisions of the Securities Investor Protection Act (Case
No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI.
The Bankruptcy Court approved Barclays Bank Plc's purchase of
Lehman Brothers' North American investment banking and capital
markets operations and supporting infrastructure for US$1.75
billion. Nomura Holdings Inc., the largest brokerage house in
Japan, purchased LBHI's operations in Europe for US$2 plus the
retention of most of employees. Nomura also bought Lehman's
operations in the Asia Pacific for US$225 million.
Lehman emerged from bankruptcy protection on March 6, 2012, more
than three years after it filed the largest bankruptcy in U.S.
history. The Chapter 11 plan for the Lehman companies other than
the broker was confirmed in December 2011.
Lehman made its first payment of $22.5 billion to creditors in
April 2012, a second payment of $10.2 billion on Oct. 1, 2012,
and a third distribution of $14.2 billion on April 4, 2013. The
brokerage is yet to make a first distribution to non-customers,
although customers are being paid in full.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other
insolvency and bankruptcy proceedings undertaken by its
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000).
LIGHTSQUARED INC: Dish Shares Drop After Withdrawal of Bid
----------------------------------------------------------
Michael J. De la Merced, writing for The New York Times' DealBook,
reported that for years, Charles W. Ergen had ambitions to buy
LightSquared, the bankrupt broadband wireless company, to bolster
his dream of creating a huge data services provider. But on Jan.
9, his company, Dish Network, formally withdrew its $2.2 billion
takeover bid for LightSquared, sending investors scurrying.
According to the report, shares in Dish, the satellite-TV
provider, were down more than 2.5 percent on Jan. 9, to close at
$56.48, after a lawyer for LightSquared said in bankruptcy court
that its suitor had terminated its offer.
The move is yet another twist in a long-running battle between two
wealthy men who have shown little desire to back down, the report
related. In one corner is Mr. Ergen, the chairman of Dish and the
architect of its strategy of buying up huge swaths of spectrum,
the airwaves needed to carry data.
In the other is Philip Falcone, the hedge fund manager and
principal shareholder of LightSquared, who envisioned turning the
company into a serious competitor to traditional cellphone service
providers, the report further related. He has persevered despite
a number of challenges, including the Federal Communications
Commission's refusal to grant a license to operate a 4G network
because of interference with GPS devices.
The court appearance on Jan. 9 is linked to Mr. Falcone's lawsuit
against Dish and Mr. Ergen, accusing the two of improperly
acquiring LightSquared debt in hopes of gaining control over the
broadband company, the report said.
About LightSquared Inc.
LightSquared Inc. and 19 of its affiliates filed Chapter 11
bankruptcy petitions (Bankr. S.D.N.Y. Lead Case No. 12-12080) on
May 14, 2012, to resolve regulatory issues that have prevented it
from building its coast-to-coast integrated satellite 4G wireless
network.
LightSquared had invested more than $4 billion to deploy an
integrated satellite-terrestrial network. In February 2012,
however, the U.S. Federal Communications Commission told
LightSquared the agency would revoke a license to build out the
network as it would interfere with global positioning systems used
by the military and various industries. In March 2012, the
Company's partner, Sprint, canceled a master services agreement.
LightSquared's lenders deemed the termination of the Sprint
agreement would trigger cross-defaults under LightSquared's
prepetition credit agreements.
LightSquared and its prepetition lenders attempted to negotiate a
global restructuring that would provide LightSquared with
liquidity and runway necessary to resolve its issues with the FCC.
Despite working diligently and in good faith, however,
LightSquared and the lenders were not able to consummate a global
restructuring on terms acceptable to all interested parties.
Lawyers at Milbank, Tweed, Hadley & McCloy LLP serve as counsel to
the Debtors. Alvarez & Marsal North America, LLC, is the
financial advisor. Kurtzman Carson Consultants LLC serves as
claims and notice agent.
LILY GROUP: May Use Cash Collateral Thru End of January
-------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Indiana
granted Lily Group, Inc. further interim authority to utilize the
cash collateral through Jan. 31, 2014. The recent ruling is the
court's fourth interim order on the matter.
About Lily Group Inc.
Lily Group Inc., the developer of an open-pit coal mine in Green
County, Indiana, filed a petition for Chapter 11 reorganization
(Bankr. S.D. Ind. Case No. 13-81073) on Sept. 23 in Terre Haute,
listing assets and debt both exceeding $10 million.
The Debtor is represented by Courtney Elaine Chilcote, Esq., and
David R. Krebs, Esq., at Tucker, Hester, Baker & Krebs, LLC, in
Indianapolis, Indiana.
U.S. Trustee Nancy J. Gargula appointed four members to the
official committee of unsecured creditors in the Chapter 11 cases
of Lily Group Inc. Faegre Baker Daniels LLP represents the
Committee.
MEDICAL ALARM: 2012 Report Shows $2MM Loss, Going Concern Doubt
---------------------------------------------------------------
Medical Alarm Concepts Holding, Inc., filed last month with the
U.S. Securities and Exchange Commission on Dec. 12, 2013, its
annual report on Form 10-K for the fiscal year ended June 30,
2012.
Paritz & Company, P.A., expressed substantial doubt about the
Company's ability to continue as a going concern, citing that the
Company has working capital deficit of $1.87 million did not
generate cash from its operations, had stockholders' deficit of
$3.3 million and had operating loss for past two years.
The Company reported a net loss of $2.34 million on $532,863 of
revenues in 2012, compared with a net loss of $407,536 on $452,816
of revenues in 2011.
The Company's balance sheet at June 30, 2012, showed $1.4 million
in total assets, $4.7 million in total liabilities, and a
stockholders' deficit of $3.3 million.
A copy of the Form 10-K is available at:
http://is.gd/xGEj7K
About Medical Alarm
Plymouth Meeting, Pa.-based Medical Alarm Concepts Holding, Inc.,
utilizes new technology in the medical alarm industry to provide
24-hour personal response monitoring services and related products
to subscribers with medical or age-related conditions.
The Company's balance sheet at March 31, 2011, showed
$1.40 million in total assets, $3.41 million in total liabilities,
and a $2 million total stockholders' deficit. As of March 31,
2011, the Company had $0 in cash.
The Company said in its quarterly report for the period ended
March 31, 2011, "We believe we cannot satisfy our cash
requirements for the next twelve months with our current cash and,
unless we receive additional financing, we may be unable to
proceed with our plan of operations. We do not anticipate the
purchase or sale of any significant equipment. We also do not
expect any significant additions to the number of our employees.
The foregoing represents our best estimate of our cash needs based
on current planning and business conditions. Additional funds are
required, and unless we receive proceeds from financing, we may
not be able to proceed with our business plan for the development
and marketing of our core services. Should this occur, we will
suspend or cease operations."
"We anticipate incurring operating losses in the foreseeable
future. Therefore, our auditors have raised substantial doubt
about our ability to continue as a going concern."
The Company has not filed its succeeding financial reports after
the March 31, 2011, Form 10-Q.
METRO FUEL: Bayside Wants Case Converted; Committee Objects
-----------------------------------------------------------
Bayside Fuel Oil Depot Corporation asks the U.S. Bankruptcy Court
for the Eastern District of New York to convert the Chapter 11
cases of Metro Fuel Oil Corp., et al., to one under Chapter 7.
Bayside Fuel is Metro Fuel's largest unsecured (trade) creditor,
with a claim of at least $6.23 million. "These cases have been
jointly administered, the Debtors' monthly operating reports are
prepared on a consolidated basis, and New York Commercial Bank
alleges a blanket security interest against all or substantially
all assets of all of the Debtors. Hence Bayside moves to convert
all of the cases or, alternatively, only the Metro Fuel case,"
says Stuart I. Gordon, Esq., at Rivkin Radler LLP, the attorney
for Bayside Fuel.
Mr. Gordon claims that: (i) the March 2013 auction sale conducted
by the Debtors resulted in general unsecured creditors receiving
nothing; (ii) the Debtors have burdened the estates with nearly
$10 million in professional fees alone; (iii) the Debtors have
been unable to file a plan in 14 months and there appears to be no
likelihood that they will be able to do so in the forseeable
future; and (iv) the cases are administratively insolvent and the
Debtors are no longer operating, having sold substantially all of
their operating assets to United Metro Energy Corp. According to
Mr. Gordon, a Chapter 7 trustee can liquidate the estates, pursue
claims and maximize the recovery for general unsecured creditors.
On Dec. 13, 2013, the Debtors and the Official Committee of
Unsecured Creditors filed with the Court objections to Bayside
Fuel's conversion motion. The Committee said that Bayside Fuel's
argument in support of conversion is identical to the argument
advanced by New York Commercial Bank in the bank's motion to
convert. The Committee objects to the Bayside Fuel's conversion
motion for the same reasons set forth in the NYCB objection.
As reported by the Troubled Company Reporter on Nov. 22, 2013, the
Committee objected to NYCB's conversion of the Debtors' cases to
Chapter 7, saying that the bank's allegations fall flat compared
to the Committee's plan of liquidation, which the Committee is
prepared to file for consideration by the Debtors' entire creditor
body upon entry of an order granting co-exclusivity. "The plan is
the only vehicle available for the Debtors' creditors that fairly
and equitably distributes the approximately $18 million to
$24 million that the Pullos are expected to provide as a plan
contribution. Conversion would be ruinous, likely saddling these
estates with another $1.5 to $2 million in administrative claims
in the form of Chapter 7 trustee fees and expenses -- funds that
would otherwise go to creditors under the plan."
The Debtors continue to believe that it is premature to convert
the Chapter 11 cases to cases under Chapter 7. In their Dec. 13
filing, the Debtors stated that since the closing of the Debtors'
asset sales, the Debtors and stakeholders with substantial
interests in the outcome of the Chapter 11 cases have engaged in
significant and meaningful arm's-length settlement negotiations
over the past 11 months. These negotiations, according to the
Debtors, have resulted in the willingness of the Debtors'
principals, Paul J. Pullo Jr. and Gene V. Pullo, to make a
meaningful financial contribution that will allow the parties to
amicably resolve the Chapter 11 cases. Though the final terms of
the resolution of the Chapter 11 cases have not been reached to
date, the Debtors believe a consensual resolution among all
stakeholders is obtainable in the very near future.
Bayside Fuel is represented by:
RIVKIN RADLER LLP
Stuart I. Gordon, Esq.
Matthew V. Spero, Esq.
926 RXR Plaza
Uniondale, New York 11556-0926
Tel: (516) 357-3000
Fax: (516) 357-3333
E-mail: stuart.gordon@rivkin.com
matthew.spero@rivkin.com
The Committee is represented by:
KELLEY DRYE & WARREN LLP
Craig A. Wolfe, Esq.
Jason Alderson, Esq.
101 Park Avenue
New York, New York 10178
Tel: (212) 808-7800
E-mail: cwolfe@kelleydrye.com
jalderson@kelleydrye.com
About Metro Fuel
Metro Fuel Oil Corp., is a family-owned energy company, founded in
1942, that supplies and delivers bioheat, biodiesel, heating oil,
central air conditioning units, ultra low sulfur diesel fuel,
natural gas and gasoline throughout the New York City metropolitan
area and Long Island. Owned by the Pullo family, Metro has 55
delivery trucks and a 10 million-gallon fuel terminal in Brooklyn.
Financial problems resulted in part from cost overruns in building
an almost-complete biodiesel plant with capacity of producing 110
million gallons a year.
Based in Brooklyn, New York, Metro Fuel Oil Corp., fka Newtown
Realty Associates, Inc., and several of its affiliates filed for
Chapter 11 bankruptcy protection (Bankr. E.D.N.Y. Lead Case No.
12-46913) on Sept. 27, 2012. Judge Elizabeth S. Stong presides
over the case. Nicole Greenblatt, Esq., at Kirkland & Ellis LLP,
represents the Debtor. The Debtor selected Epiq Bankruptcy
Solutions LLC as notice and claims agent. Th Debtor tapped Carl
Marks Advisory Group LLC as financial advisor and investment
banker, Curtis, Mallet-Prevost, Colt & Mosle LLP as co-counsel, AP
Services, LLC as crisis managers for the Debtors, and David
Johnston as their chief restructuring officer.
The petition showed assets of $65.1 million and debt totaling
$79.3 million. Liabilities include $58.8 million in secured debt,
with $48.3 million owing to banks and $10.5 million on secured
industrial development bonds. Metro Terminals Corp., affiliate of
Metro Fuel Oil Corp., disclosed $38,613,483 in assets and
$71,374,410 in liabilities as of the Chapter 11 filing.
The U.S. Trustee appointed a seven-member creditors committee.
Kelley Drye & Warren LLP represents the Committee. The Committee
tapped FTI Consulting, Inc. as its financial advisor.
On Feb. 15, 2013, the Bankruptcy Court entered an order approving
the sale of substantially all of the assets of the Debtors to
United Refining Energy Corp., for the base purchase price of
$27,000,000, subject to adjustments.
MONTREAL MAINE: Official Victims Committee Defends Appointment
--------------------------------------------------------------
The Official Committee of Derailment Victims appointed in the
chapter 11 case of Montreal Maine & Atlantic Railway, Ltd. objects
to the request of the Unofficial Committee of Wrongful Death
Claimants to disband the official committee.
In its order directing the appointment of the Committee, the U.S.
Bankruptcy Court had stated that the victims of the July 6, 2013
train derailment at Lac-Megantic have the right to be heard in the
bankruptcy proceeding.
According to the Official Committee, counsel for the Unofficial
Committee is seeking to "strip victims of their official committee
standing and deny them a voice to be heard" by asking the U.S.
Court to believe that the Official Committee is "ill-positioned"
and unable to function as it is currently constituted. To the
contrary, the Official Committee argues, since its formation on
Dec. 10, 2013, the Committee has convened several times, including
an-in person meeting with proposed counsel prior to the Dec. 18,
2013 hearing before the U.S. Court, to discuss various issues
regarding the progress of the bankruptcy case.
The Official Committee currently consists of four members:
1. Serge Jacques
Frontenac, QC. Canada G6B-251
2. Megane Turcotte
Lac Megantic, QC. Canada G6B 2N7
3. Jacinthe LaCombe
Lac Megantic, QC. Canada G6B-226
4. Pierre Paquet
Lac Megantic, QC. Canada G6B 1H4
The Official Committee asserts that its current composition is the
result of the U.S. Trustee's fulfillment of the Court's mandate to
appoint a victims' committee to ensure adequate representation of
the victims of the Derailment. The Committee members represent a
broad spectrum of claims arising from the derailment: property
damage claims; environmental remediation claims; and tort claims,
among others. Any argument by counsel for the Unofficial
Committee that the Official Committee does not adequately
represent the victims of the Derailment is the result of counsel's
own failed strategy. Counsel for the Unofficial Committee either
failed to inform their clients -- consisting of representatives of
the estates of 46 victims of the Derailment -- about the Committee
formation meeting held on Nov. 22, 2013, or actively directed them
to not participate. As such, they have no one but themselves to
blame for what they complain about in the Motion, the Official
Committee said.
According to the Official Committee, counsel for the Unofficial
Committee has long been opposed to the formation of a committee
comprised of a broad spectrum of victims of the Derailment.
Despite their efforts, the U.S. Trustee has been able to
constitute a Committee that adequately represents the interests of
all victims of the Derailment. The Disbandment Motion should be
denied, the Official Committee contends.
UST Also Defends Committee Appointment
The United States Trustee also filed objections to the Disbandment
Motion. According to the U.S. Trustee, the Unofficial Committee
styled the Motion as one to modify the Court's Oct. 18, 2013
order, which authorized the U.S. Trustee to appoint a committee of
victims. The Movants allege they are entitled to this relief
because the Official Committee, as constituted, is "fatally
flawed." Despite its title, the U.S. Trustee argues, the Motion
is an inappropriate attempt by the Movants to re-litigate their
objection to the formation of a committee -- an objection that was
overruled by the Court in October. Since that time, the Movants
have formed an "unofficial committee" and have chosen not to
participate in the official committee formation process -- despite
being invited to do so.
Instead of taking action consistent with their stated desire of
non-participation, the U.S. Trustee said the Movants self-
servingly argue that their affirmative decision not to participate
creates a "fatal flaw" in the validly-appointed Committee's
ability to represent the creditors who suffered loss as a result
of the Derailment. This argument fails because the Committee, as
currently constituted, adequately represents the interests of the
Derailment Creditors.
The U.S. Trustee also said the Movants have also raised
potentially legitimate issues as to the eligibility of one of the
appointed members to serve on the Committee. However, the
eligibility issue raised as to this individual does not materially
impact the Committee's ability to properly carry-out its fiduciary
duties and obligations.
Following the entry of the Order, the U.S. Trustee engaged in an
extensive process to solicit interest in service on the Committee
from all of the various constituencies identified by this Court as
needing representation in this case. In response, the U.S.
Trustee received sufficient interest, despite Movants decision not
to participate, to form a representative committee. After holding
a formation meeting in Carrabassett Valley, Maine on Nov. 22,
2013, the U.S. Trustee appointed a four-member committee to
represent the interest of all Derailment Creditors. The Movants
have questioned the eligibility of one of the members of the
Committee.
However, no such challenge has been raised with respect to the
remaining Committee members, the U.S. Trustee noted. These
members, despite the nature of their individual claims, the U.S.
Trustee explained, are fiduciaries charged with acting in the
interest of all of the Derailment Creditors, even those creditors
who chose not to participate in the formation process. The
alleged "fatal flaws" cited by the Movants provide no factual
justification for the relief requested. Furthermore, the Movants
provide no legal justification for their request.
Panel of Wrongful Death and PI Claimants Sought
Meanwhile, the representatives of the probate estates of Marie
Semie Alliance, Stephanie Bolduc, Yannick Bouchard, Marie Francve
Boulet, Katherine Champagene, Marie-Noelle Faucher Michael
Guertin, Jr., Stephanie Lapierre, Joannie Lapointe, Marianne
Poulin, Martin Rodrique, Jeanne Pierre Roy, Kevin Roy, Melissa
Roy, Andreee-Ann Sevigny, Jimmy Sirios, Elodie Turcotte and Joanie
Turmel -- each of them killed in the massive explosion in Lac
Meganic, Quebec on July 6, 2013, resulting from derailment of
train operated by the Debtor -- have filed papers asking the U.S.
Court to direct the Office of the U.S. Trustee to appoint a
committee of wrongful death and personal injury claimants.
The decedents were individuals who happened to be in a small-town
cafe where they were incinerated by the Debtor's runaway train.
Their estate representatives are, for the most part, family
members or friends of the decedents, living in Canada. The
representatives argued in court papers that the appointment of the
Wrongful Death and Personal Injury Claimants Committee provide an
effective voice of creditors to whom individual participation in
the Chapter 11 case is impractical. They also argued that
formation of an official committee to represent wrongful death and
personal injury claimants will benefit the bankruptcy estate by
solving otherwise difficult issues of due process. Formation of a
committee of bodily injury claimants will greatly enhance the
likelihood of a successful Chapter 11 case.
They also said there is a strong support among wrongful death and
personal injury claimants for an appointment of an official
committee to represent them.
About Montreal Maine
Montreal, Maine & Atlantic Railway Ltd., the railway company that
operated the train that derailed and exploded in July 2013,
killing 47 people and destroying part of Lac-Megantic, Quebec,
sought bankruptcy protection in U.S. Bankruptcy Court in Bangor,
Maine (Case No. 13-10670) on Aug. 7, 2013, with the aim of selling
its business. Its Canadian counterpart, Montreal, Maine &
Atlantic Canada Co., meanwhile, filed for protection from
creditors in Superior Court of Quebec in Montreal.
Robert J. Keach, Esq., at Bernstein, Shur, Sawyer, and Nelson,
P.A., has been named as chapter 11 trustee. His firm serves as
his chapter 11 bankruptcy counsel, led by Michael A. Fagone, Esq.
Development Specialists, Inc., serves as the Chapter 11 trustee's
financial advisor. Gordian Group, LLC, serves as the Chapter 11
Trustee's investment banker.
U.S. Bankruptcy Judge Louis H. Kornreich has been assigned to the
U.S. case. The Maine law firm of Verrill Dana served as counsel
to MM&A. It now serves as counsel to the Chapter 11 Trustee.
Justice Martin Castonguay oversees the case in Canada.
The Canadian Transportation Agency suspended the carrier's
operating certificate after the accident, due to insufficient
liability coverage.
The town of Lac-Megantic, Quebec, has sought financial aid to
restore the gutted community and a civil complaint alleges a
failure to take steps to prevent a derailment.
In the Canadian case, Andrew Adessky at Richter Consulting has
been appointed CCAA monitor. The CCAA Monitor is represented by
Sylvain Vauclair at Woods LLP.
MM&A Canada is represented by Patrice Benoit, Esq., at Gowling
LaFleur Henderson LLP.
The U.S. Trustee appointed a four-member official committee of
derailment victims. The Official Committee is represented by:
Richard P. Olson, Esq.
PERKINS OLSON
32 Pleasant Street
PO Box 449
Portland, Maine 04112
Tel: (207) 871-7159
Fax: (207) 871-0521
- and -
Luc A. Despins, Esq.
PAUL HASTINGS LLP
Park Avenue Tower
75 East 55th Street, First Floor
New York, NY 10022
Tel: (212) 318-6000
Fax: (212) 319-4090
There's also an unofficial committee of wrongful death claimants
consisting of representatives of the estates of the 46 victims.
This group is represented by George W. Kurr, Jr., Esq., at Gross,
Minsky & Mogul, P.A.; Daniel C. Cohn, Esq., at Murtha Cullina LLP;
Peter J. Flowers, Esq., at Meyers & Flowers, LLC; Jason C.
Webster, Esq., at The Webster Law Firm; and Mitchell A. Toups,
Esq., at Weller, Green Toups & Terrell LLP.
After the U.S. Trustee formed the Official Committee, the ad hoc
committee filed papers asking the U.S. Court to have the official
committee disbanded. The ad hoc group said it represents 46
victims of the disaster.
The Chapter 11 trustee is seeking to sell substantially all of the
assets of Montreal Maine at an auction set for Jan. 21, 2014. As
widely reported, an affiliate of Fortress Investment Group --
Railway Acquisition Holdings LLC -- has been designated as
"stalking horse" for the auction. The Fortress will kick start
the auction with a $14.25 million offer. The hearing to approve
the sale will be held Jan. 23 at 10:00 a.m. before Judge Kornreich
in Bangor, Maine.
The Bankruptcy Courts in the U.S. and Canada on Dec. 19 both gave
their stamp of approval on the procedures that will govern the
sale.
The Fortress unit is represented by Terence M. Hynes, Esq., and
Jeffrey C. Steen, Esq., at Sidley Austin LLP.
MONTREAL MAINE: Ch.11 Trustee Can Tap Shaw Fishman as Counsel
-------------------------------------------------------------
Robert J. Keach, the Chapter 11 trustee of Montreal Maine &
Atlantic Railway, Ltd., has won permission from the U.S.
Bankruptcy Court for the District of Maine to employ Shaw Fishman
Glantz & Towbin LLC, as his local counsel in connection with
derailment-related personal injury tort and wrongful death
litigation filed in Illinois state and federal courts, nunc pro
tunc to Sept. 11, 2013.
The Debtor's bankruptcy case was precipitated by a derailment, on
July 6, 2013, of an unmanned eastbound train with 72 carloads of
crude oil and 5 locomotive units, in Lac-Megantic, Quebec. The
Derailment set off several massive explosions, destroyed part of
downtown Lac-Megantic, and is presumed to have killed 47 people.
Beginning on July 22, 2013, representatives and administrators of
the estates of some of the victims commenced civil actions
alleging wrongful death and personal injury tort claims relating
to the Derailment. As of Sept. 11, 2013, one case was pending in
Illinois state court and 19 other cases were pending before the
U.S. District Court for the District of Illinois.
Shaw Fishman's hourly rates are:
Robert M. Fishman, Member $675
Stevenn B. Towbin, Member $675
Salvatore A. Barbatano, Member $635
Ira Bodenstein, Member $495
Robert W. Glantz, Member $495
Brian L. Shaw, Member $490
Peter J. Roberts, Member $475
Jeffrey L. Widman, Member $460
Richard A. Saldinger, Member $460
David S. Horwitch, Member $440
Allen J. Guon, Member $435
Terry G. Banich, Member $435
Mark L. Radtke, Member $435
Joseph L. Cohen, Member $385
David L. Shaw, Member $380
S. Jarret Raab, Member $370
Gordon E. Gouveia $370
Richard M. Fogel, of Counsel $450
Jennifer L. Goldstone, of Counsel $325
John Guzzardo, Associate $350
Kevin M. Hyde, Associate $340
Carrie E. Davenport, Associate $340
Laura Caplin, Associate $300
David R. Doyle, Associate $290
Marc S. Reiser, Associate $290
Jennifer L. Devroye, Associate $290
Alison S. Hudson, Associate $220
Patricia Fredericks, Paraprofessional $200
Melissa Westbrook, Paraprofessional $200
Bernard Thomas, Paraprofessional $140
The Chapter 11 trustee proposes to reimburse Shaw Fishman for
reasonable out-of-pocket expenses incurred.
Brian L. Shaw, Esq., partner of Shaw Fishman, assured the Court
that the firm is a "disinterested person" as the term is defined
in Section 101(14) of the Bankruptcy Code and does not represent
any interest adverse to the Debtors and their estates.
An informal committee representing the interests of wrongful death
victims of the probate estates of the 42 victims in October filed
objections to the proposed hiring of Shaw Fishman. As reported by
the Troubled Company Reporter on Oct. 23, 2013, the informal
committee said Shaw-Fishman has a non-waivable conflict of
interest and that the Chapter 11 Trustee has failed to offer any
legitimate reason to expend estate funds to participate in
litigation in Illinois.
In response to the objection, the Chapter 11 trustee said the
Objection misapprehends the purpose for which the Trustee seeks to
retain Shaw Fishman. The Chapter 11 trustee argued that retention
of Shaw Fishman under Section 329(e) is permissible; no conflict
of interest between the Trustee and Shaw Fishman exists, and even
if a conflict existed, the Trustee has waived it given the ethical
wall established by Shaw Fishman; and the Informal Committee's
purpose in filing the objection is simply to attempt to preclude
the Trustee from pursuing his effort to centralize the Derailment
Litigation.
About Montreal Maine
Montreal, Maine & Atlantic Railway Ltd., the railway company that
operated the train that derailed and exploded in July 2013,
killing 47 people and destroying part of Lac-Megantic, Quebec,
sought bankruptcy protection in U.S. Bankruptcy Court in Bangor,
Maine (Case No. 13-10670) on Aug. 7, 2013, with the aim of selling
its business. Its Canadian counterpart, Montreal, Maine &
Atlantic Canada Co., meanwhile, filed for protection from
creditors in Superior Court of Quebec in Montreal.
Robert J. Keach, Esq., at Bernstein, Shur, Sawyer, and Nelson,
P.A., has been named as chapter 11 trustee. His firm serves as
his chapter 11 bankruptcy counsel, led by Michael A. Fagone, Esq.
Development Specialists, Inc., serves as the Chapter 11 trustee's
financial advisor. Gordian Group, LLC, serves as the Chapter 11
Trustee's investment banker.
U.S. Bankruptcy Judge Louis H. Kornreich has been assigned to the
U.S. case. The Maine law firm of Verrill Dana served as counsel
to MM&A. It now serves as counsel to the Chapter 11 Trustee.
Justice Martin Castonguay oversees the case in Canada.
The Canadian Transportation Agency suspended the carrier's
operating certificate after the accident, due to insufficient
liability coverage.
The town of Lac-Megantic, Quebec, has sought financial aid to
restore the gutted community and a civil complaint alleges a
failure to take steps to prevent a derailment.
In the Canadian case, Andrew Adessky at Richter Consulting has
been appointed CCAA monitor. The CCAA Monitor is represented by
Sylvain Vauclair at Woods LLP.
MM&A Canada is represented by Patrice Benoit, Esq., at Gowling
LaFleur Henderson LLP.
The U.S. Trustee appointed a four-member official committee of
derailment victims. The Official Committee is represented by:
Richard P. Olson, Esq.
PERKINS OLSON
32 Pleasant Street
PO Box 449
Portland, Maine 04112
Tel: (207) 871-7159
Fax: (207) 871-0521
- and -
Luc A. Despins, Esq.
PAUL HASTINGS LLP
Park Avenue Tower
75 East 55th Street, First Floor
New York, NY 10022
Tel: (212) 318-6000
Fax: (212) 319-4090
There's also an unofficial committee of wrongful death claimants
consisting of representatives of the estates of the 46 victims.
This group is represented by George W. Kurr, Jr., Esq., at Gross,
Minsky & Mogul, P.A.; Daniel C. Cohn, Esq., at Murtha Cullina LLP;
Peter J. Flowers, Esq., at Meyers & Flowers, LLC; Jason C.
Webster, Esq., at The Webster Law Firm; and Mitchell A. Toups,
Esq., at Weller, Green Toups & Terrell LLP.
After the U.S. Trustee formed the Official Committee, the ad hoc
committee filed papers asking the U.S. Court to have the official
committee disbanded. The ad hoc group said it represents 46
victims of the disaster.
The Chapter 11 trustee is seeking to sell substantially all of the
assets of Montreal Maine at an auction set for Jan. 21, 2014. As
widely reported, an affiliate of Fortress Investment Group --
Railway Acquisition Holdings LLC -- has been designated as
"stalking horse" for the auction. The Fortress will kick start
the auction with a $14.25 million offer. The hearing to approve
the sale will be held Jan. 23 at 10:00 a.m. before Judge Kornreich
in Bangor, Maine.
The Bankruptcy Courts in the U.S. and Canada on Dec. 19 both gave
their stamp of approval on the procedures that will govern the
sale.
The Fortress unit is represented by Terence M. Hynes, Esq., and
Jeffrey C. Steen, Esq., at Sidley Austin LLP.
MT. LAUREL LODGING: Jan. 31 Status Hearing on Cash Collateral Use
-----------------------------------------------------------------
Judge Robyn L. Moberly will hold a status hearing on Mt. Laurel
Lodging Associates LLP's use of cash collateral on Jan. 31, 2014,
at 10:00 a.m.
Judge Moberly recently entered an order authorizing Mt. Laurel
Lodging Associates to use National Republic Bank of Chicago's cash
collateral, providing the Debtor with the necessary funds to
conduct its business as a going concern to the extent possible and
maximize the value of the Debtor's assets for the benefit of
creditors and estates.
Last month, the Bank, a lender in the Chapter 11 cases of Mt.
Laurel Lodging Associates, asked the Bankruptcy Court to:
i) determine whether Access Point Financial, Inc., a creditor
of the Debtors, is adequately protected by virtue of its
recourse against Sun Development & Management Corporation;
ii) determine whether the furniture, fixtures and equipment
(FF&E) collateral securing the Access Point loans is
property of the estate or is owned by Sun Development;
iii) defer any ruling on whether Access Point is undersecured
or oversecured; and
iv) condition any adequate protection payments to Access
Point on the Debtor's contemporaneous payment of full
monthly debt service payments (principal and interest)
to the Bank.
On Nov. 27, 2013, Access Point filed its motion for adequate
protection alleging that it originally loaned $5 million to Sun
Development and that the loan proceeds were earmarked to finance
the acquisition of FF&E to be installed at the Debtor's hotel and
also to be installed at a hotel in California owned by the
Debtor's affiliate, Ontario Lodging Associates, LLC.
As alleged in Access Point's motion, the $5 million loan to Sun
Development was restructured into two loans as: (a) the sum of
$2,356,849 was allocated to the Debtor and Sun Development as co-
obligors, and (b) the sum of $2,643,150 was allocated to Ontario
and Sun Development as co-obligors. Although it is unclear
whether the two loans are cross-collateralized and whether title
to the FF&E is owned by Sun Development, it appears that Sun
Development remains liable to Access Point for the entire
$5 million as a co-obligor with both the Debtor and Ontario.
In its adequate protection motion, Access Point asked the Court to
authorize the use of the Bank's cash collateral to make the
regular monthly payments to Access Point in the sum of $40,297.
Access Point contends that "the continuation of the Monthly
Payment is the most fair and appropriate adequate protection of
its security interest in the FF&E." The payments are justified,
Access Point argued, because any available equity cushion will
quickly erode and maintaining the current payments will save the
estate the expense of late fees and default rate interest.
Mt. Laurel Lodging Associates replied to the Bank's objection to
the Debtor's motion for authorization to use cash collateral and
other collateral and to grant adequate protection, stating that
the value of its assets is not at risk of declining during the
case and the Bank's interests in its assets are adequately
protected. The Debtor explained it sought authorization to use
cash collateral to maintain its business while it explores its
reorganization alternatives in the case.
About Mt. Laurel Lodging Associates
Mt. Laurel Lodging Associates, LLP and its debtor-affiliates filed
for separate Chapter 11 protection (Bankr. S.D. Ind. Lead Case No.
13-11697) on Nov. 4, 2013. The debtor-affiliates are Ontario
Lodging Associates, LLC; Riverside Lodging Associates, LLC;
Rosenburg Lodging Associates, LLP; Tampa Palms Lodging Associates,
LLP; Titusville Lodging Associates, LLP; and Conroe Lodging
Associates, LLP.
Bankruptcy Judge Robyn L. Moberly presides over the case. David
M. Neff, Esq., and Brian A. Audette, Esq., at Perkins Coie LLP,
and Andrew T. Kight, Esq., at Taft, Stettinius & Hollister LLP
represent the Debtor in their restructuring efforts.
The National Republic Bank of Chicago is represented by Bose
McKinney & Evans LLP and Stark & Stark, PC.
The Debtor estimated assets and debts at $10 million to
$50 million. The petitions were signed by Bharat Patel, general
partner.
NATIONAL ENVELOPE: Wants Plan Filing Period Extended to April 7
---------------------------------------------------------------
NE OPCO, Inc. et al., formerly known as National Envelope, ask the
U.S. Bankruptcy Court for the District of Delaware to extend the
Debtors' exclusive periods to file a Chapter 11 plan and to
solicit acceptances of that plan to April 7, 2014, and June 5,
2014, respectively.
At the outset of these large and complex cases, the Debtors made
their intentions to sell their assets and to maximize the recovery
for their creditors known. The Debtors said in a Jan. 6, 2013
court filing that to date, they have exhausted all efforts in
accomplishing successful asset sales and have (a) garnered the
support of their key stakeholders in their efforts to date,
(b) marketed and sold substantially all of their assets to three
separate purchasers, (c) assisted the asset purchasers in the
transition of their former assets, (d) facilitated the continued
employment of approximately 95% of their former workforce by one
of the asset purchasers, and (e) completed a bar date process.
"The Debtors are now well-situated to evaluate their financial
standing in an effort to determine the most appropriate resolution
of these cases. However, they require additional time to complete
this analysis," William A. Romanowicz, Esq., at Richards, Layton &
Finger, P.A., the counsel for the Debtors, stated.
About NE OPCO, Inc.
National Envelope is the largest privately-held manufacturer of
envelopes in North America. Headquartered in Frisco, Texas,
National Envelope has eight plants and 15 percent of the envelope
market. Revenue of $427 million in 2012 resulted in a $60.1
million net loss, continuing an unbroken string of losses since
2007.
NE OPCO, Inc., doing business as National Envelope, along with
affiliate NEV Credit Holdings, Inc., filed petitions seeking
relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Del.
Lead Case No. 13-11483) on June 10, 2013.
The company disclosed liabilities including $148.4 million in
secured debt, with $37.5 million owing on a revolving credit and
$15.6 million on a secured term loan. There is a $55.7 million
second-lien debt 82 percent held by a Gores Group LLC affiliate.
National Envelope, then known as NEC Holdings Corp., first sought
Chapter 11 protection (Bankr. D. Del. Lead Case No. 10-11890) on
June 10, 2010. The business was bought by Gores Group LLC for
$208 million in a bankruptcy sale.
National Envelope, through NE OPCO, has returned to bankruptcy to
pursue a plan of reorganization or sell the assets as a going
concern via 11 U.S.C. Sec. 363. The Debtor plans to facilitate a
sale of the business with publicly traded competitor Cenveo Inc.
In the new Chapter 11 case, the company has tapped the law firm
Richards, Layton & Finger as counsel, PricewaterhouseCoopers LLP
as financial adviser, and Epiq Bankruptcy Solutions as claims and
notice agent.
The Gores Group is represented by Weil, Gotshal and Manges LLP and
Lowenstein Landler LLP. Salus Capital Partners, the DIP agent, is
represented by Choate, Hall & Stewart LLP and Morris Nichols Arsht
& Tunnell LLP. Wells Fargo Capital Finance, LLC, the prepetition
senior agent, is represented by Goldberg Kohn Ltd and DLA Piper.
The Official Committee of Unsecured Creditors is represented by
Pachulski Stang Ziehl & Jones LLP's Laura Davis Jones, Esq.,
Bradford J. Sandier, Esq., Robert J. Feinstein, Esq., and Peter J.
Keane, Esq. Guggenheim Securities, LLC, serves as its investment
banker and financial advisor.
National Envelope won court approval on July 19, 2013, for a
global settlement permitting a sale of the company without
objection from the official unsecured creditors' committee. The
settlement ensures some recovery for unsecured creditors. The
Company also won final approval for $67.5 million in
bankruptcy financing being supplied by Salus Capital Partners LLC.
Judge Sontchi authorized three buyers to acquire Frisco, Texas-
based National Envelope's business for a total of about $70
million. Connecticut-based printer Cenveo Inc. acquired National
Envelope's operating assets for $25 million, Hilco Receivables LLC
picked up accounts receivable for $25 million and Southern Paper
LLC took on its inventory for $15 million.
NATURAL PORK: Wants Plan Filing Period Extended to Jan. 21
-----------------------------------------------------------
Natural Pork Production II, LLP, asks the Hon. Anita L. Shodeen of
the U.S. Bankruptcy Court for the Southern District of Iowa to
extend to Jan. 21, 2014, the exclusive period during which only
the Debtor may file a Disclosure Statement and Plan of
Reorganization.
Jeffrey D. Goetz, Esq., at Bradshaw Fowler Proctor & Fairgrave,
PC, the Debtor's general reorganization counsel, said in a filing
dated Jan. 6, 2014, that he has been diligently devoting
significant time and resources to drafting both a Joint Disclosure
Statement and Joint Liquidating Plan of Reorganization, with the
good-faith intent on filing them by Jan. 7, 2014. Although
significant progress has been made towards this goal, the Debtor
is not able to complete a Joint Disclosure Statement that will
meet the requirements of Bankruptcy Code Section 1125 by the
Jan. 7, 2014 deadline.
"There are several complexities to the drafting, editing and
finalizing of this Joint Disclosure Statement and Joint
Liquidating Plan of Reorganization, based on the desire to seek
substantive consolidation of this bankruptcy estate with the other
four affiliated bankruptcy cases, and relatively unique relief
regarding technical tax issues, 12 classes of creditors and 2
classes of interests, and requiring the input and consensus of all
of the Debtor's duly-employed professionals. General
Reorganization Counsel's good-faith representation is that both
the Joint Disclosure Statement and Joint Liquidating Plan of
Reorganization are between 80-85% complete, and confidence is high
that the Debtor will be able to file both pleadings within the
next 14 days," Mr. Goetz stated.
About Natural Pork
Hog raiser Natural Pork Production II, LLP, filed for Chapter 11
bankruptcy (Bankr. S.D. Iowa Case No. 12-02872) on Sept. 11,
2012, in Des Moines. The Company formerly did business as Natural
Pork Production, LLC. It does business as Crawfordsville, LLC,
Brayton, LLC, South Harlan, LLC, and North Harlan, LLC. The
Debtor disclosed $31.9 million in asset and $27.9 million in
liabilities, including $7.49 million of secured debt in its
schedules.
Bankruptcy Judge Anita L. Shodeen oversees the case. Donald F.
Neiman, Esq., and Jeffrey D. Goetz, Esq., at Bradshaw, Fowler,
Proctor & Fairgrave, P.C., in Des Moines, Iowa, represent the
Debtor as general reorganization counsel. Attorneys at Davis,
Brown, Koehn, Shors & Roberts, P.C., in Des Moines, Iowa,
represent the Debtor as special litigation counsel.
Attorneys at Sugar, Felsenthal Grais & Hammer LLP, in Chicago,
represent the Official Committee of Unsecured Creditors. Robert C
Gainer, Esq. at Cutler Law Firm, P.C., in West Des Moines, Iowa,
represent the Committee as associate counsel. Conway MacKenzie,
Inc., serves as its financial advisor.
Gary W. Koch, Esq., and Michael S. Dove, Esq., represent AgStar
Financial Services, ACA, and AgStar Financial Services, FLCA, as
counsel.
Michael P. Mallaney, Esq., at Hudson Mallaney Schindler &
Anderson, in West Des Moines, Iowa, represents the IC Committee as
counsel.
NEWPAGE CORP: Verso Paper Deal Cues S&P to Put B+ CCR on Watch Neg
------------------------------------------------------------------
Standard & Poor's Ratings Services said it placed its ratings,
including the 'B+' corporate credit rating, on NewPage Holdings
Inc. on CreditWatch with negative implications.
The CreditWatch placement follows the announcement that NewPage
has agreed to be acquired by lower-rated competitor Verso Paper
Holdings LLC for $1.4 billion. Memphis, Tenn.-based Verso intends
to acquire Miamisburg, Ohio-based NewPage for $1.4 billion,
composed of $250 million of cash, $650 million of new Verso first-
lien notes, and the refinancing of NewPage's $500 million term
loan. Verso has indicated that it has $750 million of committed
financing to fund the cash consideration and the refinancing of
the NewPage term loan.
Both Verso and NewPage are large coated paper manufacturers.
Combined, the companies will have about $4.5 billion of sales. A
substantial portion of these sales are to catalog and magazine end
users, which S&P believes is susceptible to substitution risks due
to changing consumer preferences for electronic content.
"We expect to resolve the CreditWatch placement when Verso
completes its acquisition of NewPage, which NewPage expects will
occur in the second half of 2014. At this point, we expect that
we will lower the corporate credit rating on NewPage by one or two
notches from the current 'B+' rating," said Standard & Poor's
credit analyst Tobias Crabtree.
OCZ TECHNOLOGY: Hires Mayer Brown as Special Transactional Counsel
------------------------------------------------------------------
OCZ Technology Group, Inc. and its debtor-affiliates seek
authorization from the Hon. Peter J. Walsh of the U.S. Bankruptcy
Court for the District of Delaware to employ Mayer Brown LLP as
special transactional counsel, nunc pro tunc to Dec. 2, 2013
petition date.
Mayer Brown will assist the Debtors with respect to the sale of
its assets pursuant to section 363 of the Bankruptcy Code. As a
special transactional counsel, Mayer Brown's services will involve
advising the Debtors on all aspects of the procedures and
transactions that are the subject of the 363 Sale Motion,
including, inter alia, representing the Debtor at all hearings
relating to the 363 Sale Motion, representing the Debtor in
evaluating any potential competing, qualified bids, representing
the Debtor at any auction of the assets that are the subject of
the 363 Sale Motion, responding to objections or discovery that
may be served on the Debtor in connection with such motion,
handling all aspects of the closing on any approved sale
transaction, providing advice to the Debtors with respect to
unexpired leases and executory contracts that may be assumed or
rejected in connection with the sale of their assets,
participating in debtor in possession financing activities to the
extent related to the sale of the Debtors' assets, and otherwise
assisting the Debtors as they may request from time to time with
matters affecting the sale of their assets.
Mayer Brown will be paid at these hourly rates:
Partners $695-$1,080
Counsel $650-$795
Associates $270-$630
Paralegals $200-$380
Mayer Brown will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Pursuant to the terms set forth in the Engagement Letter, Mayer
Brown received an advance payment retainer of $100,000 as security
for its fees and disbursements in conjunction with the preparation
for these Chapter 11 cases. On Dec. 2, 2013, Mayer Brown received
a $200,000 supplement to its retainer, paid directly by Toshiba
America Electronics Corporation, as part of the special
accommodation loan provided to the Debtors to allow them to fund
administrative costs in anticipation of these Chapter 11 cases.
Prior to the petition date, Mayer Brown had invoiced the Debtors
for work performed in preparation for their bankruptcy filings and
received payment of $90,033.52 on Nov. 20, 2013 for those services
rendered.
Mayer Brown was also owed approximately $145,686 as of the
petition date for prepetition legal services rendered and expenses
incurred advising the Debtors in corporate matters unrelated to
these Chapter 11 cases.
Sean T. Scott, Esq., partner of Mayer Brown, assured the Court
that the firm is a "disinterested person" as the term is defined
in Section 101(14) of the Bankruptcy Code and does not represent
any interest adverse to the Debtors and their estates.
The Court for the District of Delaware will hold a hearing on the
hiring on Jan. 8, 2014, at 10:00 a.m. Objections were due Dec.
30, 2013.
Mayer Brown LLP can be reached at:
Sean T. Scott, Esq.
MAYER BROWN LLP
71 South Wacker Drive
Chicago, IL 60606-4637
Tel: (312) 701-8310
Fax: (312) 706-8482
E-mail: stscott@mayerbrown.com
About OCZ
San Jose, Calif.-based OCZ Technology Group, Inc. (Nasdaq: OCZ)
designs, manufactures, and distributes high-performance solid-
state storage solutions and premium computer components.
OCZ and two affiliates on Dec. 2, 2013, filed for Chapter 11
protection (Bankr. D. Del. Lead Case No. 13-13126) with a deal to
sell all assets under 11 U.S.C. Sec. 363 to Toshiba Corporation
for $35 million.
As of the bankruptcy filing, the Debtors had funded indebtedness
of $29.3 million and general unsecured trade obligations of $31.4
million.
The Debtors are represented by Mayer Brown LLP's Sean T. Scott,
Esq., as counsel and Young Conaway Stargatt & Taylor LLP's Michael
R. Nestor, Esq., Matthew B. Lunn, Esq., and Jaime Luton Chapman,
Esq., as Delaware local counsel. Deutsche Bank is the Debtors'
investment banker. Mike Rizzo Jr. at RAS Management Advisors,
LLC, serves as financial advisors to the Debtors. The Hon. Peter
J. Walsh presides over the case.
Kelley Drye & Warren LLP's Eric R. Wilson, Esq., Jason R. Adams,
Esq., and Gilbert R. Saydah Jr., Esq., serve as counsel to the
official committee of unsecured creditors, and Greenberg Traurig,
LLP's Dennis A. Meloro, Esq. serves as local counsel.
OCZ TECHNOLOGY: Taps Young Conaway as Attorneys
-----------------------------------------------
OCZ Technology Group, Inc. and its debtor-affiliates seek
authorization from the Hon. Peter J. Walsh of the U.S. Bankruptcy
Court for the District of Delaware to employ Young Conaway
Stargatt & Taylor LLP as attorneys, nunc pro tunc to Dec. 2, 2013
petition date.
The Debtors require Young Conaway to:
(a) provide legal advise with respect to the Debtors' powers
and duties as debtors in possession in the continued
operation of their business, management of their
properties, and sale of their assets;
(b) prepare and pursue confirmation of a plan and approval of a
disclosure statement;
(c) prepare on behalf of the Debtors necessary applications,
motions, answers, orders, reports, and other legal papers;
(d) appear in Court and to protect the interests of the Debtors
before the Court; and
(e) perform all other legal services for the Debtors that may
be necessary and proper in these proceedings.
Young Conaway will be paid at these hourly rates:
Michael R. Nestor, partner $695
Matthew B. Lunn, partner $530
Jaime Luton Chapman, associate $375
Ryan M. Bartley, associate $355
Elizabeth S. Justison, associate $280
Chad Corazza, paralegal $150
Young Conaway will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Young Conaway received an initial retainer of $75,000 on Oct. 31,
2013, in connection with the planning and preparation of initial
documents and its proposed post-petition representation of the
Debtors. On Dec. 2, 2013, the retainer was supplemented in the
amount of $125,000.
Michael R. Nestor, partner of Young Conaway, assured the Court
that the firm is a "disinterested person" as the term is defined
in Section 101(14) of the Bankruptcy Code and does not represent
any interest adverse to the Debtors and their estates.
The Court for the District of Delaware will hold a hearing on the
hiring on Jan. 8, 2014, at 10:00 a.m. Objections were due Dec.
30, 2013
Young Conaway can be reached at:
Michael R. Nestor, Esq.
YOUNG CONAWAY STARGATT & TAYLOR, LLP
Rodney Square
1000 North King Street
Wilmington, DE 19801
Tel: (302) 571-6600
Fax: (302) 571-1253
E-mail: mnestor@ycst.com
About OCZ
San Jose, Calif.-based OCZ Technology Group, Inc. (Nasdaq: OCZ)
designs, manufactures, and distributes high-performance solid-
state storage solutions and premium computer components.
OCZ and two affiliates on Dec. 2, 2013, filed for Chapter 11
protection (Bankr. D. Del. Lead Case No. 13-13126) with a deal to
sell all assets under 11 U.S.C. Sec. 363 to Toshiba Corporation
for $35 million.
As of the bankruptcy filing, the Debtors had funded indebtedness
of $29.3 million and general unsecured trade obligations of $31.4
million.
The Debtors are represented by Mayer Brown LLP's Sean T. Scott,
Esq., as counsel and Young Conaway Stargatt & Taylor LLP's Michael
R. Nestor, Esq., Matthew B. Lunn, Esq., and Jaime Luton Chapman,
Esq., as Delaware local counsel. Deutsche Bank is the Debtors'
investment banker. Mike Rizzo Jr. at RAS Management Advisors,
LLC, serves as financial advisors to the Debtors. The Hon. Peter
J. Walsh presides over the case.
Kelley Drye & Warren LLP's Eric R. Wilson, Esq., Jason R. Adams,
Esq., and Gilbert R. Saydah Jr., Esq., serve as counsel to the
official committee of unsecured creditors, and Greenberg Traurig,
LLP's Dennis A. Meloro, Esq. serves as local counsel.
OCZ TECHNOLOGY: Taps RAS Management as Financial Advisor
--------------------------------------------------------
OCZ Technology Group, Inc. and its debtor-affiliates seek
authorization from the Hon. Peter J. Walsh U.S. Bankruptcy Court
for the District of Delaware to employ RAS Management Advisors,
LLC as financial advisor, nunc pro tunc to Dec. 16, 2013.
The Debtors require RAS Management to:
(a) review and assist the Debtors in the development of the
Debtors' DIP-period budgets and related reporting and
projections, cash revenue and cash flow projections, and
all other financial and accounting information, records,
and systems related to the Debtors' DIP-period operations;
(b) assist the Debtors in managing all activities related to
its DIP-period operations, including supporting other
professionals in connection with the Debtors' DIP
operations and the preparation and filing of all schedules,
statements of financial affairs, and reports required as
part of the Debtors' bankruptcy process;
(c) assist the Debtors in communications with, and reporting
to, the Debtors' creditors, including without limitation,
senior lenders, and trade creditors;
(d) assist the Debtors in complying with the requirements of
the Bankruptcy Code; and
(e) assist the Debtors in the development implementation of a
plan of reorganization, if appropriate.
The Debtors propose to pay RAS Management at this fee structure:
(a) Daily Rates. Where work is performed away from RAS
Management's offices for up to 12 hours per day, RAS
Management shall charge the following daily rates:
Richard Sebastiao $5,000
Timothy Boates $4,800
Michael Rizzo $3,250
(b) Hourly Rates. RAS Management shall charge an hourly rate
for work in excess of 12 hours per day and for hours spent
working at RAS Management's own offices. Travel time will
be charged at 50% of the regular rate. The hourly rates
are:
Richard Sebastiao $500
Timothy Boates $480
Michael Rizzo $325
Clerical Staff $30
(c) Expenses. The Debtors will reimburse RAS Management for
all reasonable out-of-pocket expenses, including coach
class airfare, lodging, meals, mileage, parking,
photocopying, and other incidentals which RAS Management
incurs in connection with the engagement.
Timothy D. Boates, president of RAS Management, assured the Court
that the firm is a "disinterested person" as the term is defined
in Section 101(14) of the Bankruptcy Code and does not represent
any interest adverse to the Debtors and their estates.
RAS Management's Mike Rizzo Jr. -- mjrizzo@rasmanagement.com --
will work on the Debtors' case. He may be reached at:
Mike Rizzo Jr.
RAS Management Advisors, LLC
599 Ocean Avenue
Newport, RI 02840
Tel: 401-846-5990
Fax: 401-846-5989
E-mail: mjrizzo@rasmanagement.com
RAS Management can be reached at:
Timothy D. Boates
RAS MANAGEMENT ADVISORS, LLC
1285 Sharps Cove Rd
Gurley, AL 35748-8210
Tel: (256) 776-4989
Fax: (256) 776-4990
E-mail: tboates@rasmanagement.com
About OCZ
San Jose, Calif.-based OCZ Technology Group, Inc. (Nasdaq: OCZ)
designs, manufactures, and distributes high-performance solid-
state storage solutions and premium computer components.
OCZ and two affiliates on Dec. 2, 2013, filed for Chapter 11
protection (Bankr. D. Del. Lead Case No. 13-13126) with a deal to
sell all assets under 11 U.S.C. Sec. 363 to Toshiba Corporation
for $35 million.
As of the bankruptcy filing, the Debtors had funded indebtedness
of $29.3 million and general unsecured trade obligations of $31.4
million.
The Debtors are represented by Mayer Brown LLP's Sean T. Scott,
Esq., as counsel and Young Conaway Stargatt & Taylor LLP's Michael
R. Nestor, Esq., Matthew B. Lunn, Esq., and Jaime Luton Chapman,
Esq., as Delaware local counsel. Deutsche Bank is the Debtors'
investment banker. Mike Rizzo Jr. at RAS Management Advisors,
LLC, serves as financial advisors to the Debtors. The Hon. Peter
J. Walsh presides over the case.
Kelley Drye & Warren LLP's Eric R. Wilson, Esq., Jason R. Adams,
Esq., and Gilbert R. Saydah Jr., Esq., serve as counsel to the
official committee of unsecured creditors, and Greenberg Traurig,
LLP's Dennis A. Meloro, Esq. serves as local counsel.
OCZ TECHNOLOGY: Hires Mayer Brown as Special Transactional Counsel
------------------------------------------------------------------
OCZ Technology Group, Inc. and its debtor-affiliates seek
authorization from the Hon. Peter J. Walsh of the U.S. Bankruptcy
Court for the District of Delaware to employ Mayer Brown LLP as
special transactional counsel, nunc pro tunc to Dec. 2, 2013
petition date.
Mayer Brown will assist the Debtors with respect to the sale of
its assets pursuant to section 363 of the Bankruptcy Code. As a
special transactional counsel, Mayer Brown's services will involve
advising the Debtors on all aspects of the procedures and
transactions that are the subject of the 363 Sale Motion,
including, inter alia, representing the Debtor at all hearings
relating to the 363 Sale Motion, representing the Debtor in
evaluating any potential competing, qualified bids, representing
the Debtor at any auction of the assets that are the subject of
the 363 Sale Motion, responding to objections or discovery that
may be served on the Debtor in connection with such motion,
handling all aspects of the closing on any approved sale
transaction, providing advice to the Debtors with respect to
unexpired leases and executory contracts that may be assumed or
rejected in connection with the sale of their assets,
participating in debtor in possession financing activities to the
extent related to the sale of the Debtors' assets, and otherwise
assisting the Debtors as they may request from time to time with
matters affecting the sale of their assets.
Mayer Brown will be paid at these hourly rates:
Partners $695-$1,080
Counsel $650-$795
Associates $270-$630
Paralegals $200-$380
Mayer Brown will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Pursuant to the terms set forth in the Engagement Letter, Mayer
Brown received an advance payment retainer of $100,000 as security
for its fees and disbursements in conjunction with the preparation
for these Chapter 11 cases. On Dec. 2, 2013, Mayer Brown received
a $200,000 supplement to its retainer, paid directly by Toshiba
America Electronics Corporation, as part of the special
accommodation loan provided to the Debtors to allow them to fund
administrative costs in anticipation of these Chapter 11 cases.
Prior to the petition date, Mayer Brown had invoiced the Debtors
for work performed in preparation for their bankruptcy filings and
received payment of $90,033.52 on Nov. 20, 2013 for those services
rendered.
Mayer Brown was also owed approximately $145,686 as of the
petition date for prepetition legal services rendered and expenses
incurred advising the Debtors in corporate matters unrelated to
these Chapter 11 cases.
Sean T. Scott, Esq., partner of Mayer Brown, assured the Court
that the firm is a "disinterested person" as the term is defined
in Section 101(14) of the Bankruptcy Code and does not represent
any interest adverse to the Debtors and their estates.
Mayer Brown LLP can be reached at:
Sean T. Scott, Esq.
MAYER BROWN LLP
71 South Wacker Drive
Chicago, IL 60606-4637
Tel: (312) 701-8310
Fax: (312) 706-8482
E-mail: stscott@mayerbrown.com
About OCZ
San Jose, Calif.-based OCZ Technology Group, Inc. (Nasdaq: OCZ)
designs, manufactures, and distributes high-performance solid-
state storage solutions and premium computer components.
OCZ and two affiliates on Dec. 2, 2013, filed for Chapter 11
protection (Bankr. D. Del. Lead Case No. 13-13126) with a deal to
sell all assets under 11 U.S.C. Sec. 363 to Toshiba Corporation
for $35 million.
As of the bankruptcy filing, the Debtors had funded indebtedness
of $29.3 million and general unsecured trade obligations of $31.4
million.
The Debtors are represented by Mayer Brown LLP's Sean T. Scott,
Esq., as counsel and Young Conaway Stargatt & Taylor LLP's Michael
R. Nestor, Esq., Matthew B. Lunn, Esq., and Jaime Luton Chapman,
Esq., as Delaware local counsel. Deutsche Bank is the Debtors'
investment banker. Mike Rizzo Jr. at RAS Management Advisors,
LLC, serves as financial advisors to the Debtors. The Hon. Peter
J. Walsh presides over the case.
Kelley Drye & Warren LLP's Eric R. Wilson, Esq., Jason R. Adams,
Esq., and Gilbert R. Saydah Jr., Esq., serve as counsel to the
official committee of unsecured creditors, and Greenberg Traurig,
LLP's Dennis A. Meloro, Esq. serves as local counsel.
ORMET CORP: Has Authority to Sell Excess Assets to Alcoa
--------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
Ormet Corporation, et al., to sell their rights and interests in
and to approximately 17,086 MT baked carbon anodes, located at the
Debtors' Hannibal, Ohio location, and their rights and interest in
and to approximately 34,755 MT baked carbon anodes, located in a
storage in Baltimore, Maryland. The excess assets will be sold to
Alcoa Materials Management, Inc.
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 emerged from a prior bankruptcy in April 2005. Lender
Wayzata Investment Partners LLC is among existing owners. Others
are UBS Willow Fund LLC and Fidelity Leverage Company Stock Fund.
In the 2013 case, 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.
OTELCO INC: Acquires Cloud Hosting and Managed Services Provider
----------------------------------------------------------------
Otelco Inc., which emerged from Chapter 11 bankruptcy in May 2013,
said on Jan. 6 it has acquired Maine-based Reliable Networks, a
provider of cloud hosting and managed services for companies who
rely on mission-critical applications. The combination expands
Otelco's existing carrier-grade service offerings to support
critical VoIP, email, database and industry vertical software
applications.
"Our business customers increasingly are turning to us to expand
our hosting and managed services capabilities to be able to
provide seamless, turnkey services anchored by our high-quality
connectivity offerings," said Mike Weaver, CEO of Otelco. "Over
the years, we have successfully collaborated with Reliable
Networks on larger, more complex VoIP telephone infrastructure
deployments. Leveraging the networking and application hosting
expertise of Reliable Networks by acquiring the company is a
natural, evolutionary extension of our current product and
services offerings to support the substantial growth of our Hosted
IP Voice PBX Product."
"We have always focused on clients who demand superior quality and
high levels of client service," noted Mark Stone, Managing Member
and founder of Reliable Networks. "As a high value-added
provider, our 'measure twice, cut once' approach resonates with
clients for whom downtime is expensive and disruptive. What could
be better than to formalize a relationship with a company that
also provides carrier-grade services complementing our own, and
with whom we have successfully worked in the past?"
Otelco paid $500,000 at the closing of the acquisition. The
balance of the purchase price will be paid in stock over the next
three years, contingent on Reliable Networks achieving certain
financial objectives. The acquisition will provide Otelco with
additional managed service capabilities that will supplement the
growth of existing IP services while expanding its current market
presence. Reliable Networks will operate as a division of OTT
Communications, Otelco's New England competitive operating entity.
Reliable Networks of Maine, LLC, Maine's only provider with a SOC
2 Type II audit, provides technology consulting, managed services
and private/hybrid cloud hosting across the United States. Started
in 2003 by Managing Member Mark Stone, Reliable Networks focuses
on corporate and educational clients who rely on mission-critical
applications and for whom downtime is expensive and disruptive.
In connection with the Company's acquisition of Reliable Networks,
on Jan. 2, 2014, the Company entered into an employment agreement
with each of L. Mark Stone as General Manager, Managed and
Private/Hybrid Cloud Services; and Christopher Falk as Director of
Technical Operations, Managed and Private/Hybrid Cloud Services.
About Otelco
Otelco Inc. (NASDAQ: OTEL) -- http://www.OtelcoInc.com/--
provides wireline telecommunications services in Alabama, Maine,
Massachusetts, Missouri, New Hampshire, Vermont and West Virginia.
The Company's services include local and long distance telephone,
digital high-speed data lines, transport services, network access,
cable television and other related services. With approximately
96,000 voice and data access lines, which are collectively
referred to as access line equivalents, Otelco is among the top 25
largest local exchange carriers in the United States based on
number of access lines. Otelco operates 11 incumbent telephone
companies serving rural markets, or rural local exchange carriers.
It also provides competitive retail and wholesale communications
services through several subsidiaries.
On March 24, 2013, the Company and each of its direct and indirect
subsidiaries filed voluntary petitions for reorganization under
Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Case No. 13-
10593) to effectuate their prepackaged Chapter 11 plan of
reorganization -- a plan that already has been accepted by 100% of
the Company's senior lenders, as well as holders of over 96% in
dollar amount of Otelco's senior subordinated notes who cast
ballots. Otelco's restructuring plan would deleveraged its
balance sheet and reduce overall indebtedness by approximately
$135 million.
The Company's restructuring counsel was Willkie Farr & Gallagher
LLP and its financial advisor was Evercore Partners. The
restructuring counsel for the administrative agent for the senior
lenders was King & Spalding LLP and its financial advisor was FTI
Consulting.
On May 6, 2013, the Bankruptcy Court entered an order confirming
the Plan. On May 24, the Plan was declared effective and Otelco
emerged from bankruptcy. Otelco repaid $28.7 million on its
senior credit facility and extended its maturity through April
2016. The remaining balance of $133.3 million will have quarterly
principal payments of 1.25% of the new loan amount plus interest
on the outstanding balance at 6.5%. In addition, the Company will
utilize 75% of its quarterly free cash flow to further reduce the
outstanding balance on the loan each quarter. The facility
includes a $5.0 million revolver which was undrawn at closing.
PARADISE HOSPITALITY: Feb. 13 Hearing on Bid to Make Plan Changes
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California
continued until Feb. 13, 2014, at 10:30 a.m., the hearing on the
request of Paradise Hospitality, Inc., to authorize a post-
confirmation modification of the Debtor's Chapter 11 Plan, or,
alternatively, for final decree closing the Chapter 11 case.
The Court has ordered that an updated status report be filed by
Feb. 4, unless the Debtor has filed a motion to dismiss, in which
case, the requirement of a status report will be waived.
On Dec. 12, 2013, the Debtor responded to creditors' objections to
the request, stating that, among other things:
1. the Debtor made payments due for many months on all payments
due to RREF WB Acquisitions, LLC, et al. under the Plan;
2. the Debtor did not say that it will stop making payments due
under its plan altogether;
3. the only reason why it has not paid Lim, Ruger & Kim, LLC,
former bankruptcy counsel for the Debtor, is that the
shopping center has not sold yet at the amount the Debtor
projected it would get according to a formal appraisal; and
4. Metrotex Textile Services, LLC, will get absolutely
nothing. By contract, according to the Debtor, if the
modification is allowed, the Debtor will resume making
payments in a few months, and continue pursuing the
refinancing of the Hotel.
Creditors had objected to the Debtor's motion for post-
confirmation modification of the Debtor's Chapter 11 Plan: (i)
according to RREF, the Debtor is in default of essentially every
material obligations in its First Amended Chapter 11 Plan of
Reorganization filed Nov. 20, 2012; (ii) Metrotex asserted that
the Debtor has failed to substantially consummate the Plan and in
material default under the Plan, the Debtor by its conduct in the
Chapter 11 Plan has shown that there is no benefit to unsecured
creditors; (iii) Lim Ruger said that the Debtor inaccurately
represents that it has made all payments due under the confirmed
plan from the Effective Date through October 2013. As it fully
knows, the Debtor has failed to pay $211,324 of Lim Ruger's
professional fees and expenses authorized for full and immediate
payment by the Court in June 2013.
The Plan
Bankruptcy Judge Erithe Smith entered an order on Feb. 6, 2013,
confirming Paradise Hospitality's First Amended Chapter 11 Plan of
Reorganization. According to the Disclosure Statement, the Plan
will accomplish payments under the Plan by its earnings from
rental of the Debtor's property. The Debtor's revenue will be
used to pay secured property tax claims, pay RREF WB Acquisitions,
LLC, pay administrative claims and priority unsecured claims, with
a distribution to general unsecured creditors. Three years after
the Effective Date of the Plan, the Debtor anticipates refinancing
the loans held by RREF to satisfy claims in full.
In seeking post-confirmation modifications to the Plan, the Debtor
said it has encountered unanticipated circumstances that have
caused the Debtor to be temporarily unable to consummate the Plan,
as confirmed. The Debtor, with the consent of its primary secured
lenders, entered into an agreement with Best Western
International, Inc. The Debtor anticipated that the agreement
would lead to a net increase in the monthly room revenues of
approximately 15 percent, however, due to Best Western's demand
for the Debtor to make outlays for capital improvements to a
hotel, the Debtor has exhausted funds it would otherwise have had
to service its Plan payments and operate its hotel during the slow
season, which starts in November and goes through March.
A hearing on the request was originally slated for Dec. 19 at
10:30 a.m.
About Paradise Hospitality
Based in Fullerton, California, Paradise Hospitality, Inc., owns a
hotel located in Toledo, Ohio and a retail shopping center in El
Dorado, Arkansas. The Debtor manages and operates the Hotel.
Haydn Cutler company currently manages the Retail Center. The
Company filed for Chapter 11 bankruptcy (Bankr. C.D. Cal. Case
No. 11-24847) on Oct. 26, 2011, about three weeks after it lost
the right to use the Crowne Plaza for its hotel. For now, the
hotel has been renamed Plaza Hotel Downtown Toledo.
Judge Erithe A. Smith presides over the case. Giovanni Orantes,
Esq., at Orantes Law Firm, P.C., in Los Angeles, represents the
Debtor as counsel. The Debtor disclosed $15,628,687 in assets and
$21,430,333 in liabilities as of the Chapter 11 filing. The
petition was signed by the Debtor's president, Dae In Kim, a
Korean businessman who lives in southern California.
PATIENT SAFETY: John Francis Approves Merger Pact with Stryker
--------------------------------------------------------------
Francis Capital Management, LLC, John P. Francis, Catalysis
Partners, LLC, and Catalysis Offshore Ltd, disclosed in a
regulatory filing with the U.S. Securities and Exchange Commission
that John P. Francis executed a voting agreement with Stryker
Corporation, dated Dec. 31, 2013, in connection with the agreement
and plan of merger among Stryker Corporation, PS Merger Sub Inc.,
a wholly owned subsidiary of Stryker, and Patient Safety
Technologies Inc.
Subject to the satisfaction or waiver of certain conditions,
Merger Sub will merge with and into the Company with the separate
corporate existence of Merger Sub thereupon ceasing and with the
Company being the surviving corporation of the merger and a wholly
owned subsidiary of Stryker.
Pursuant to the Voting Agreement, among other things, Mr. Francis
agreed to vote all of the shares of Company stock of the Reporting
Persons (i) in favor of the Merger Agreement or any amendment to
the Merger Agreement which makes the Merger Agreement more
favorable to the Reporting Persons, (ii) against any proposal in
opposition to the Merger and (iii) against any competing proposals
or transactions that would impede the Merger or result in a breach
of the Merger Agreement. Pursuant to the Voting Agreement, Mr.
Francis also waived appraisal rights of the Reporting Persons and
the Reporting Persons provided an irrevocable proxy.
The reporting persons owned 3,206,840 shares of common stock of
Patient Safety representing 8.2 percent of the shares outstanding
as of Dec. 31, 2013, based on the 38,861,508 shares of Common
Stock believed by the Reporting Persons to be outstanding as of
Dec. 31, 2013.
A copy of the Schedule 13D/A is available for free at:
http://is.gd/0EaubD
About Patient Safety Technologies
Patient Safety Technologies, Inc. (OTC: PSTX) --
http://www.surgicountmedical.com/-- through its wholly owned
operating subsidiary SurgiCount Medical, Inc., provides the
Safety-Sponge(TM) System, a system designed to improve the
standard of patient care and reduce health care costs by
preventing the occurrence of surgical sponges and other retained
foreign objects from being left inside patients after surgery.
RFOs are among one of the most common surgical errors.
The Company's balance sheet at Sept. 30, 2013, showed $18.71
million in total assets, $5.56 million in total liabilities and
$13.15 million in stockholders' equity.
Patient Safety incurred a net loss applicable to common
shareholders of $1.91 million for the nine months ended Sept. 30,
2013. The Company reported a net loss of $2.20 million in 2012
and a net loss of $1.89 million in 2011.
PATIENT SAFETY: Brian Stewart OKs Planned Merger with Stryker
-------------------------------------------------------------
In an amended Schedule 13D filed with the U.S. Securities and
Exchange Commission, Brian Stewart disclosed that it executed a
voting agreement with Stryker Corporation dated Dec. 31, 2013, in
connection with the plan of merger among Stryker Corporation, PS
Merger Sub Inc., a wholly owned subsidiary of Stryker, and
Patient Safety Technologies Inc.
Subject to the satisfaction or waiver of certain conditions,
Merger Sub will merge with and into the Company with the separate
corporate existence of Merger Sub thereupon ceasing and with the
Company being the surviving corporation of the merger and a wholly
owned subsidiary of Stryker.
Pursuant to the Voting Agreement, Mr. Stewart agreed to vote all
of his shares of Company stock (i) in favor of the Merger
Agreement or any amendment to the Merger Agreement which makes the
Merger Agreement more favorable to the Reporting Person, (ii)
against any proposal in opposition to the Merger and (iii) against
any competing proposals or transactions that would impede the
Merger or result in a breach of the Merger Agreement. Pursuant to
the Voting Agreement, the Reporting Person also waived appraisal
rights and provided an irrevocable proxy.
As of Dec. 31, 2013, Mr. Stewart beneficially owned 2,328,004
shares of common stock of Patient Safety representing 5.8 percent
of the shares outstanding.
A copy of the Schedule 13D/A is available for free at:
http://is.gd/yRAq3h
About Patient Safety Technologies
Patient Safety Technologies, Inc. (OTC: PSTX) --
http://www.surgicountmedical.com/-- through its wholly owned
operating subsidiary SurgiCount Medical, Inc., provides the
Safety-Sponge(TM) System, a system designed to improve the
standard of patient care and reduce health care costs by
preventing the occurrence of surgical sponges and other retained
foreign objects from being left inside patients after surgery.
RFOs are among one of the most common surgical errors.
The Company's balance sheet at Sept. 30, 2013, showed $18.71
million in total assets, $5.56 million in total liabilities and
$13.15 million in stockholders' equity.
Patient Safety incurred a net loss applicable to common
shareholders of $1.91 million for the nine months ended Sept. 30,
2013. The Company incurred a net loss of $2.20 million in 2012
and a net loss of $1.89 million in 2011.
PATRIOT COAL: Jan. 28 Hearing on Objection to Pettry Claims
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Missouri
will convene a hearing on Jan. 28, 2014, at 10:00 a.m., to
consider the Pettry Litigation Claimants' motion for
reconsideration of an order sustaining Patriot Coal Corporation,
et al.'s seventeenth omnibus objection to claims.
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.
Houlihan Lokey Capital, Inc., serves as its financial advisor and
investment banker. Epiq Bankruptcy Solutions, LLC, serves as its
information agent.
On Nov. 27, 2012, the New York bankruptcy judge moved Patriot's
bankruptcy case to St. Louis. The order formally sending the
reorganization to Missouri was signed Dec. 19, 2012, 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 et al., filed with the U.S. Bankruptcy Court for the
Eastern District of Missouri a First Amended Joint Chapter 11
Plan of Reorganization and an explanatory disclosure statement on
Oct. 9, 2013, and a Second Amended Joint Chapter 11 Plan of
Reorganization and an explanatory disclosure statement on Oct. 26,
2013.
The Bankruptcy Court approved the Plan on Dec. 17, 2013.
PEREGRINE FINANCIAL: Trustee Settles on Who Can Sue Banks
---------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Ira Bodenstein, the trustee for Peregrine Financial
Group Inc., got authority from the bankruptcy court on Jan. 8 to
join with plaintiffs for a class of customers in prosecuting a
lawsuit against the son of the broker's founder, JPMorgan Chase
Bank NA and U.S. Bank NA.
The report related that in May, Bodenstein sued in the Chicago
bankruptcy court to enjoin a customers' class lawsuit brought in
Illinois federal court against Russell Wasendorf Jr. and the two
banks. Bodenstein contended the claims belonged to him as
Peregrine's representative for all customers.
About Peregrine Financial
Peregrine Financial Group Inc. filed to liquidate under Chapter 7
of the U.S. Bankruptcy Code (Bankr. N.D. Ill. Case No. 12-27488)
on July 10, 2012, disclosing between $500 million and $1 billion
of assets, and between $100 million and $500 million of
liabilities.
Earlier that day, at the behest of the U.S. Commodity Futures
Trading Commission, a U.S. district judge appointed a receiver and
froze the firm's assets. The firm put itself into bankruptcy
liquidation in Chicago later the same day. The CFTC had sued
Peregrine, saying that more than $200 million of supposedly
segregated customer funds had been "misappropriated." The CFTC
case is U.S. Commodity Futures Trading Commission v. Peregrine
Financial Group Inc., 12-cv-5383, U.S. District Court, Northern
District of Illinois (Chicago).
Peregrine's CEO Russell R. Wasendorf Sr. unsuccessfully attempted
suicide outside a firm office in Cedar Falls, Iowa, on July 9.
The bankruptcy petition was signed in his place by Russell R.
Wasendorf Jr., the firm's chief operating officer. The resolution
stated that Wasendorf Jr. was given a power of attorney on July 3
to exercise if Wasendorf Sr. became incapacitated.
Peregrine Financial is the regulated unit of the brokerage
PFGBest.
PERMA-FIX ENVIRONMENTAL: Incurs $808-K Net Loss in Third Quarter
----------------------------------------------------------------
Perma-Fix Environmental Services, Inc., filed with the U.S.
Securities and Exchange Commission its quarterly report on Form
10-Q, reporting a net loss of $808,000 on $19.07 million of net
revenues for the three months ended Sept. 30, 2013, compared to a
net loss of $533,000 on $29.19 million of revenues for the same
period in 2012.
The Company's balance sheet at Sept. 30, 2013, showed $135.38
million in total assets, $54.52 million in total liabilities, and
stockholders' equity of $79.57 million.
The Company said that its cash flow requirements during 2013 have
been financed by cash on hand, operations, and its credit
facility. The Company is continually reviewing operating costs
and is committed to further reducing operating costs to bring them
in line with revenue levels. If the Company is unable to improve
its revenue and working capital during the remainder of 2013, such
could result in a material adverse impact on the Company's results
and liquidity, including potential impairment of its goodwill and
long-lived assets balances. Continued adverse financial
conditions could result in its independent auditors expressing
substantial doubt about the Company's ability to continue as a
going concern.
A copy of the Form 10-Q is available at:
http://is.gd/Cq6Zu6
Based in Atlanta, Perma-Fix Environmental Services, Inc. (NASDAQ:
PESI) -- http://www.perma-fix.com/-- has two operating segments:
Nuclear Waste Management Services and Consulting Engineering
Services. The Nuclear Waste Management Services offer nuclear,
low-level radioactive, mixed hazardous and non-hazardous waste
treatment; and processing and disposal services through four
uniquely licensed and permitted treatment and storage facilities.
The Consulting Engineering Services offer broad-scope
environmental issues, including environmental management programs,
regulatory permitting, compliance and auditing, landfill design,
field-testing, and characterization.
PROGEN PHARMACEUTICALS: PKF O'Connor Raises Going Concern Doubt
---------------------------------------------------------------
Progen Pharmaceuticals Limited last month filed with the U.S.
Securities and Exchange Commission an amendment to its annual
report on Form 20-F for the fiscal year ended June 30, 2013.
PKF O'Connor Davies expressed substantial doubt about the
Company's ability to continue as a going concern, citing the
Company's recurring losses from operations and net capital
deficiency.
The Company reported a net loss of $2.09 million on $3.51 million
of revenues in fiscal 2013, compared with a net loss of $3.44
million on $2.83 million of revenues in fiscal 2012.
The Company's balance sheet at June 30, 2013, showed
$10.55 million in total assets, $832,127 in total liabilities, and
stockholders' equity of $9.72 million.
A copy of the Form 20-F/A is available at:
http://is.gd/dZOetV
About Progen Pharmaceuticals
Headquartered in Brisbane, Australia, Progen Pharmaceuticals
Limited (ASX: PGL; OTC: PGLA) -- http://www.progen-pharma.com/--
is a biotechnology company committed to the discovery, development
and commercialization of small molecule pharmaceuticals primarily
for the treatment of cancer. Progen has built a focus and
strength in anti-cancer drug discovery and development.
PURE BIOSCIENCE: Posts $3.84-Mil. Net Loss in Oct. 31 Quarter
-------------------------------------------------------------
Pure Bioscience, Inc., filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q, reporting a net loss
of $3.84 million on $115,000 of net product sales for the three
months ended Oct. 31, 2013, compared to a net loss of $2.15
million on $110,000 of net product sales for the same period last
year.
The Company's balance sheet at Oct. 31, 2013, showed $3.29 million
in total assets, $3.07 million in total liabilities, and
stockholders' equity of $211,000.
Since its inception, the Company has financed its operations
primarily through public and private offerings of securities, debt
financing, and revenue from product sales and license agreements.
The Company has a history of recurring losses, and as of October
31, 2013, has incurred a cumulative net loss of $74.0 million.
The Company added that it does not have, and may never have,
significant cash inflows from product sales or from other sources
of revenue to fund its operations. As of Oct. 31, 2013, the
Company had $1,068,000 in cash and cash equivalents, and
$2,332,000 of current liabilities, including $771,000 in accounts
payable.
A copy of the Form 10-Q is available at:
http://is.gd/UKbLpm
About Pure Bioscience
El Cajon, Calif.-based Pure Bioscience, Inc., manufactures and
sells silver dihydrogen SDC-based disinfecting and sanitizing
products, which are registered by the Environmental Protection
Agency, or EPA, to distributors and end users. The Company also
manufactures and sells various SDC-based formulations to
manufacturers for use as a raw material in the production of
personal care and other products. Silver dihydrogen citrate, or
SDC, is a broad-spectrum, non-toxic antimicrobial.
In its audit report for the fiscal 2013 results, Mayer Hoffman
McCann P.C. expressed substantial doubt about the Company's
ability to continue as a going concern, citing that the Company
has experienced recurring losses, is dependent on future financing
to fund its planned expenditures and had an accumulated deficit of
approximately $70,171,000 at July 31, 2013.
The Company reported a net loss of $7,671,000 on $820,000 of net
product sales in 2013, compared with a net loss of $8,890,000 in
2012.
REAL ESTATE ASSOCIATES: Transfers Interest in Newton Apartments
---------------------------------------------------------------
Real Estate Associates Limited VII, on Dec. 31, 2013, transferred
all of its interests in Newton Apartments, Ltd., a Mississippi
limited partnership, to H.I. Family, LLC. These interests
represented all of the remaining Local Limited Partnership assets
held by the Company. Real Estate Associates held a 99 percent
limited partnership interest in Newton Apartments.
On Dec. 31, 2013, Real Estate Associates entered into an
Assignment and Assumption Agreement by and among the Company,
Rosewood Apartments Operating, LLC, the General Partner of the
Partnership, Herbert B. Ivison, Jr., an individual and H.I.
Family, LLC, pursuant to which Real Estate Associates and Rosewood
assigned 100 percent of their interests in the Partnership to the
Assignees in exchange for a payment of $5,000. Following that
payment, the Company no longer held any interest in the
Partnership and had no rights, obligations or liabilities related
thereto.
As a result of the transfer of the Company's interests in the
Partnership, the Company received approximately $5,000 in
consideration, all of which is intended to be used by the Company
for the payment of outstanding payables and deferred management
fees owed by the Company.
About Real Estate Associates
Real Estate Associates Limited VII is a limited partnership which
was formed under the laws of the State of California on May 24,
1983. On Feb. 1, 1984, the Partnership offered 2,600 units
consisting of 5,200 limited partnership interests and warrants to
purchase a maximum of 10,400 additional limited partnership
interests through a public offering managed by E.F. Hutton Inc.
The Partnership received $39,000,000 in subscriptions for units of
limited partnership interests (at $5,000 per unit) during the
period from March 7, 1984 to June 11, 1985.
The general partners of the Partnership are National Partnership
Investments Corp., a California Corporation, and National
Partnership Investments Associates II. The business of the
Partnership is conducted primarily by NAPICO, a subsidiary of
Apartment Investment and Management Company, a publicly traded
real estate investment trust.
As of Sept. 30, 2012, and Dec. 31, 2011, the Partnership holds
limited partnership interests in 1 and 11 Local Limited
Partnerships, respectively, and a general partner interest in REA
IV which, in turn, holds limited partnership interests in 3 and 8
additional Local Limited Partnerships, respectively; therefore,
the Partnership holds interests, either directly or indirectly
through REA IV, in 4 and 19 Local Limited Partnerships,
respectively. The other general partner of REA IV is NAPICO. The
Local Limited Partnerships own residential low income rental
projects consisting of 403 and 1,237 apartment units at Sept. 30,
2012, and Dec. 31, 2011, respectively. The mortgage loans of
these projects are payable to or insured by various governmental
agencies.
The Partnership disclosed net income of $13.01 million on $0 of
revenue for the year ended Dec. 31, 2012, as compared with a net
loss of $861,000 on $0 of revenue during the prior year. The
Company's balance sheet at March 31, 2013, showed $1.03 million in
total assets, $8.24 million in total liabilities and a $7.21
million total partners' deficit.
Ernst & Young LLP, in Greenville, South Carolina, issued a "going
concern" qualification on the consolidated financial statements
for the year ended Dec. 31, 2012. The independent auditors noted
that the Partnership continues to generate recurring operating
losses. In addition, notes payable and related accrued interest
totalling $8.09 million are in default due to non-payment. These
conditions raise substantial doubt about the Partnership's ability
to continue as a going concern.
REEVES DEVELOPMENT: Filed an Updated Plan Outline at Dec. 31
------------------------------------------------------------
Reeves Development Company, LLC, submitted to the Bankruptcy Court
an amended version of the Disclosure Statement for its proposed
Plan of Reorganization as of Dec. 31, 2013.
Back in November, secured creditor IberiaBank asserted that the
Plan is outdated given that the original Plan was first filed in
February 2013. Iberia insisted information on property sale
projects for 2013, details on revenue generating endeavors, and
new disclosures on the treatment of Branch Banking and Trust's
claim should be provided for, among other things. Iberia further
sought the conversion of the Debtor's Chapter 11 case into a
proceeding under Chapter 7.
The Amended Disclosure Statement reveals that as to the Class 15
Unsecured Claim of Branch Banking and Trust, to the extent that
BB&T is not fully compensated from the assets of Houma Dollar
Parnter, LLC, the excess amount will be included in the unsecured
claims of the Debtor. The assets of Houma Dollar Partners are
expected to generate net sales proceeds sufficient to satisfy the
claims of BB&T. This claim is currently estimated to total
$6,000,000. The Claimant has agreed to a settlement of claims
against the Debtor in exchange for certain concessions from
Debtors affiliated Company Houma Dollar Partners, LLC. In
exchange for these concessions, the Debtor has agreed to forgo
any payments due from Houma Dollar Partners, LLC. This
arrangement is subject to court approval in the Bankruptcy
Proceeding of Houma Dollar Partners, LLC Case No 12-20649.
The Debtor also made other disclosures as to events that happened
during the pendency of the case.
A full-text copy of the Dec. 31 version of the Amended Disclosure
Statement is available for free at:
http://bankrupt.com/misc/REEVESDEV_AmdDSDec31.PDF
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., 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.
The Debtor's Plan dated Feb. 27, 2013, 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.
RG STEEL: Court Allows Sea Port to Provide Additional Services
--------------------------------------------------------------
U.S. Bankruptcy Judge Kevin Carey authorized Sea Port Group
Securities LLC to provide additional services to RG Steel LLC and
its affiliated debtors.
The firm will provide investment banking and advisory services in
connection with the potential acquisition of RG Steel Wheeling
LLC's stake in Mountain State Carbon, LLC.
Mountain State is owned 50% by RG Steel Wheeling and 50% by SNA
Carbon LLC. It was formed in 2005 as a joint venture to own and
operate a coal plant in Follansbee, West Virginia.
SNA Carbon had said it doesn't oppose the new services to be
provided by Sea Port but may oppose any sale process that will be
implemented in connection with the potential acquisition of the
steel maker's stake in Mountain State.
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.
RG STEEL: Wins Approval to Sell Assets to Siemens for $400,000
--------------------------------------------------------------
RG Steel Sparrows Point, LLC received the green light from U.S.
Bankruptcy Judge Kevin Carey to sell some of its assets to Siemens
Industry, Inc.
The assets include equipment and related spare parts stored in
Siemens' Sparrows Point facility, which will be sold for $400,000.
Siemens asserts a lien against those assets securing certain
amounts owing from RG Steel for services it provided to the steel
maker.
Siemens is entitled to the benefits and protections provided by
Section 363(m) of the Bankruptcy Code as part of the sale of the
assets, according to Judge Carey's order issued on January 7.
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.
SABRA HEALTH: S&P Affirms 'B+' Corp. Credit Rating
--------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B+' corporate
credit rating on Sabra Health Care REIT Inc. The outlook is
stable. At the same time, S&P assigned a 'BB-' rating and '2'
recovery rating to the proposed $300 million senior notes due 2021
to be issued by Sabra's wholly owned subsidiaries, Sabra Health
Care L.P. and Sabra Capital Corp. S&P's '2' recovery rating on
this debt indicates its expectation for a substantial (70% to 90%)
recovery in the event of payment default.
"Our 'B+' corporate credit rating on Sabra reflects our view that
the company's financial risk profile is 'significant' and business
risk profile is 'weak' under our criteria," said Standard & Poor's
credit analyst Eugene Nusinzon. S&P's business risk assessment
reflects Sabra's smaller size ($1.7 billion total market
capitalization), concentrated tenant base (top three tenants
contribute about two-thirds of revenue), and heavy reliance on
skilled nursing/post-acute facilities (SNFs), which are subject to
potentially volatile government reimbursement programs and
contribute about two-thirds of Sabra's revenue. This assessment
also incorporates S&P's view of the REIT industry's "low" risk and
"very low" country risk. Although ongoing government efforts to
contain health care spending represents an ongoing risk, S&P
expects the company's triple-net-leases, long-weighted average
remaining lease term (10 years with no maturities until 2020), and
adequate tenant-level rent coverage to provide support to its core
cash flow.
Sabra's same-store tenant-level EBITDAR rent coverage dipped to
1.34x in the third quarter of 2013 (from 1.40x a year ago)
following the commencement of several adverse reimbursement cuts.
However, S&P believes a recent 1.3% increase in Medicare payments
to SNFs by the Centers for Medicare & Medicaid Services will
support Sabra tenants' ability to adequately cover their rent in
2014.
S&P believes aggressive portfolio expansion (20% to 30% of assets
per year), with a primary focus on senior housing and memory care
and secondary focus on acute care hospitals and skilled nursing
facilities, will continue to gradually strengthen Sabra's scale
and portfolio diversity. During 2013, Sabra closed on
$310 million of investments (predominantly private-pay acute care
hospitals) at a blended yield of 8.25%. This expanded the
company's portfolio size by about one-third and reduced its
largest tenant (SNF operator Genesis HealthCare LLC) revenue
contribution to 50% (from 71% a year ago).
The outlook is stable. S&P expects relatively steady tenant-level
rent coverage and negligible lease expirations to support Sabra's
near-term core cash flow and credit metrics. S&P also believes
that profitable, leverage-neutral investments will continue to
gradually strengthen Sabra's scale and portfolio diversification.
S&P sees limited downside for the ratings at this time, given its
expectation for stead core cash flow and relatively static credit
metrics. However, S&P could consider lowering the ratings if
leverage rises above its current level, pressuring FCC below 1.8x.
This could be a result of debt-financed expansion or the
restructuring of leases for tenants that can't mitigate rising
expenses or potential reimbursement cuts.
Upward ratings momentum remains unlikely in the near term due to
Sabra's relatively small capital structure, still-significant
portfolio concentration, and tight covenant headroom. Longer
term, we would consider raising the ratings by one notch if Sabra
establishes and maintains a more balanced investment and funding
strategy that results in more stable and predictable credit
metrics and bolsters its covenant cushion, while continuing to
gradually strengthen its scale and portfolio diversification.
SAN BERNARDINO, CA: Wants Until April 15 to Decide on Leases
------------------------------------------------------------
The City of San Bernardino, California, asks the U.S. Bankruptcy
Court for the Central District of California to extend until
April 15, 2014, the time within which the City must assume or
reject leases of nonresidential real property.
The City explains that the order for relief in the Chapter 9 case
was entered on Sept. 17, 2013. Prior to the 2005 amendments to
the Bankruptcy Code, Chapter 9 debtors had until confirmation of a
Chapter 9 plan to decide whether to assume or reject real property
leases in which the debtor was a lessee.
However, with the 2005 amendments, that decision period was cut
short. It currently expires for the City on Jan. 15, 2014, unless
the Court extends the period.
About San Bernardino, Calif.
San Bernardino, California, filed an emergency petition for
municipal bankruptcy under Chapter 9 of the U.S. Bankruptcy Code
(Bankr. C.D. Calif. Case No. 12-28006) on Aug. 1, 2012. San
Bernardino, a city of about 210,000 residents roughly 65 miles
(104 km) east of Los Angeles, estimated assets and debts of more
than $1 billion in the bare-bones bankruptcy petition.
The city council voted on July 10, 2012, to file for bankruptcy.
The move lets San Bernardino bypass state-required mediation with
creditors and proceed directly to U.S. Bankruptcy Court.
The city is represented that Paul R. Glassman, Esq., at Stradling
Yocca Carlson & Rauth.
San Bernardino joined two other California cities in bankruptcy:
Stockton, an agricultural center of 292,000 east of San Francisco,
and Mammoth Lakes, a mountain resort town of 8,200 south of
Yosemite National Park.
The City was granted Chapter 9 protection on Aug. 28, 2013.
SAND SPRING: Cantor Settlement Agreement Declared Effective
-----------------------------------------------------------
Sand Spring Capital III, LLC, et al., notified the U.S. Bankruptcy
Court for the District of Delaware that the effective date of the
Cantor Chapter 11 Settlement occurred on Dec. 23, 2013.
The Court approved on May 30, 2013, the settlement agreement among
the Debtors, the Official Committee of Equity Holders, and Cantor
Fitzgerald & Co. The Court's order confirming the Debtor's plan
of reorganization required the Reorganized Funds to serve a notice
of the occurrence of the Cantor Chapter 11 Settlement Effective
Date.
The Court confirmed the Debtors' Fourth Amended Joint Plan of
Reorganization on Sept. 18, 2013. The Plan was declared effective
Oct. 21, 2013.
As reported by the Troubled Company Reporter, the Plan is the
result of extensive, arm's-length negotiations among the Debtors
and certain of the key parties-in-interest in the cases, including
the Committee of Equity Security Holders, Cantor Group and
numerous investors, the group commonly referred to as the
Louisiana Plaintiffs. The efforts by all parties to the
negotiations have resulted in the execution of two extensive
settlement agreements that have paved the way for a consensual
plan process.
The resulting Plan contemplates that all Secured, Priority,
Administrative, and General Unsecured Claims will be paid in full
in cash on or as soon as reasonably practicable following the
Effective Date. Thus, those Classes of Claims are unimpaired. In
contrast, Independent Fiduciary Indemnification Claims, Cantor
Indemnification Claims and Interests are impaired under the Plan,
and will receive this treatment:
i) as set forth in the Plan, each Holder of an Allowed
Independent Fiduciary Indemnification Claim will receive
a release from all Claims and Causes of Action that any
of the Debtors may have;
ii) Cantor Indemnification Claims will be satisfied from
the Indemnification Reserve. Cantor Indemnification
Claims will be deemed Allowed Claims for purposes of
the Plan, and Cantor has agreed that it will accept
any award entered in the New York Litigation as the
recovery on such Allowed Claims;
iii) the Reorganized Funds will receive, subject to the
resolution of certain disputed Claims, their Ratable
Portion of the Cantor Derivative Claim Settlement
Amount; and
iv) investors will receive their Ratable Portion of the
Reorganized Fund Interests on the Cantor Chapter 11
Settlement Effective Date, and, in the event that they
execute a Direct Claim Release, their Ratable Portion of
the Cantor Direct Claim Settlement Amount.
About Sand Spring
Nine funds advised by Commonwealth Advisors Inc. of Baton Rouge,
Louisiana, sought Chapter 11 protection on Oct. 25, 2011, after
failing to work out a reorganization plan acceptable to all
investors. Lead Debtor is Sand Spring Capital III, LLC (Bankr. D.
Del. Case No. 11-13393).
Robert S. Brady, Esq., Kenneth J. Enos, Esq., and Michael R.
Nestor, Esq., at Young, Conaway, Stargatt & Taylor, in Wilmington,
Delaware, serve as counsel to the Debtors. Epiq Bankruptcy
Solutions LLC serves as claims and notice agent.
The funds were formed from 2005 to 2007 under Walter Morales,
president and chief investment manager, and attracted 456
investors, according to filings in U.S. Bankruptcy Court in
Wilmington, Delaware. Investors filed class-action and derivative
suits alleging mismanagement, misrepresentation, and breach of
fiduciary duty.
According to Bloomberg News, the U.S. Securities and Exchange
Commission initiated a formal investigation in July 2009. The
funds were unable or unwilling to satisfy investors' redemption
demands, which would have required liquidation of "their
holdings in an illiquid market and at depressed prices."
The funds, Commonwealth and Morales negotiated a prepackaged
Chapter 11 plan, which was accepted by all classes of creditors
except one. Because third-party contributions required unanimous
approval, the funds said they filed in Chapter 11 so they could
have "further discussions with their investors with the oversight
of this court."
SCRUB ISLAND: Has Until Feb. 13 to File Chapter 11 Plan
-------------------------------------------------------
The Hon. Michael G. Williamson of the U.S. Bankruptcy Court for
the Middle District of Florida directed Scrub Island Development
Group Limited to file a Chapter 11 Plan and explanatory Disclosure
Statement by Feb. 13, 2014.
Last month, the Bankruptcy Court denied FirstBank Puerto Rico's
motion to dismiss the Chapter 11 cases of Scrub Island Development
Group and its affiliate, Scrub Island Construction Limited.
FirstBank Puerto Rico said the bankruptcy cases are interfering
with an ongoing effort to collect the more than $120 million it is
owed.
On Dec. 14, 2013, FirstBank, in its capacity as a secured creditor
of both Debtors, requested from the Court relief from the
automatic stay to exercise its post-default secured party rights
and remedies under applicable British Virgin Islands law,
including the rights to proceed in a prepetition receivership.
FirstBank asserted that it is entitled to relief from stay; and
the property is not necessary to an effective reorganization.
The bank, owed about $120 million including interest, initiated
foreclosure and had a receiver appointed by a court in the British
Virgin Islands on Nov. 1. Eighteen days later, Scrub Island's
owner filed a Chapter 11 petition in Tampa, Florida, intending to
set aside the receivership.
The Debtors asked the Court to deny the bank's motion, saying
"cause" to dismiss the case does not exist. The Debtors said the
petitions were filed in good faith and with the intent to confirm
a plan that the Bankruptcy Court will have jurisdiction to enforce
as to the Debtors, FirstBank, and all major creditors. Moreover,
dismissal is not in the interests of creditors or the estates.
On Dec. 12, Guy G. Gebhardt, Acting U.S. Trustee for Region 21,
appointed three creditors to serve in the Official Committee of
Unsecured Credetors in Scrub Island's Chapter 11 cases. The
Committee is consists of:
1. Pablo L. Dardet
P.O. Box 194925
San Juan, PR 00919-4925
Tel: (787) 306-2813
E-mail: pdardet@ableinsurancepr.com
2. Art Linares
Scrub Island, LLC
242 Toby Hill Road
Westbrook, CT 06498
Tel: (203) 627-0560
E-mail: Artlinares@aol.com
3. Anabel A. Rivera
P.O. Box 5906
Caguas, PR 00726
Tel: (787) 370-4427
E-mail: Arivera@oscarcc.com
About Scrub Island
Scrub Island Development Group Ltd., the owner of a British Virgin
Islands luxury resort, and its affiliate, Scrub Island
Construction Limited, sought bankruptcy protection (Bankr. M.D.
Fla. Case Nos. 13-15285 and 13-15286) on Nov. 19, 2013, to end a
receivership Scrub Island claims was secretly put in place by its
lender. The bankruptcy case is assigned to Judge Michael G.
Williamson.
The 230-acre resort operates as a Marriott Autograph Collection
property. It has 52 rooms and suites, a spa and a 55-slip marina.
Scrub Island Development Group scheduled $125,569,235 in total
assets and $130,695,731 in total liabilities.
The Debtors are represented by Charles A. Postler, Esq., and
Harley E. Riedel, Esq., at Stichter, Riedel, Blain & Prosser, in
Tampa, Florida.
FirstBank Puerto Rico, the prepetition secured lender, is
represented by W. Keith Fendrick, Esq., at Holland & Knight LLP,
in Tampa, Florida.
The Debtors are represented by Charles A. Postler, Esq., and
Harley E. Riedel, Esq., at Stichter, Riedel, Blain & Prosser, in
Tampa, Florida.
FirstBank Puerto Rico, the Debtor's prepetition secured lender, is
represented by W. Keith Fendrick, Esq., at Holland & Knight LLP,
in Tampa, Florida.
The Official Committee of Unsecured Creditors appointed in Scrub
Island's cases has retained Robert B. Glenn, Esq., Edwin G. Rice,
Esq., and Victoria D. Critchlow, Esq., at Glenn Rasmussen, P.A.,
as general counsel.
SCRUB ISLAND: Hearing on Bankruptcy Loan Requests Moved to Jan. 15
------------------------------------------------------------------
Judge Michael G. Williamson rescheduled hearings to Jan. 15, 2014,
at 1:30 p.m., in relation to Scrub Island Development Group
Limited, et al.'s request for postpetition financing.
The hearing was previously scheduled for Dec. 27.
On Jan. 15, Scrub Island will return to the Bankruptcy Court for a
hearing Jan. 15 at 1:30 p.m. on:
-- the Debtor's Motion for Authority to Obtain Financing and
Grant Senior Liens and Superpriority Administrative
Expense Status; and
-- the Motion of FirstBank Puerto Rico to Excuse Receiver
from Compliance with Section 543 of the Bankruptcy
Code.
Secured creditor FirstBank Puerto Rico has filed papers asking the
U.S. Bankruptcy Court for the Middle District of Florida to deny
the Debtors' request for authority to obtain postpetition
financing and grant senior liens and superpriority administrative
expense status.
According to FirstBank, the Debtor sought authority to enter into
postpetition DIP financing from certain of its shareholders and
directors.
FirstBank objects to the DIP financing for these reasons:
1. The DIP Lender appears to consist of three of the Debtors'
shareholders. These shareholders bear the risk of reorganization
in a chapter 11 bankruptcy and must fund any operational
shortfalls without the need for the extraordinary protection
sought in the motion or the need to prime unsecured creditors.
2. The granting of any administrative expense to the DIP Lender
would result in the DIP Lender acquiring a lien over the Debtors'
assets in the British Virgin Islands or being repaid from the
Debtors' BVI assets.
3. Granting the DIP Lender a superpriority administrative
expense claim, would give the DIP Lender a payment priority from
the Debtors' estate superior to all other claims of any type,
including these arising under 11 U.S.C. Section 507(b). Such a
lien is unnecessary and inappropriate for the DIP Lender at this
point in the Chapter 11.
The salient terms of the DIP financing are:
DIP Lender: CIH Loft LLC, Gary Eng and VK
Investments Limited or an entity to be
formed by them
Amount: Principal amount of $250,000
Purpose: To fund operating expenses and the costs
of administration
Adequate Protection: Senior liens and superpriority
administrative expense claim status.
Interest Rates: 5 percent per annum floating, payable
monthly in arrears calculated on the
basis of actual days elapsed in a year
of 360 days. Default rate may be up 1%
higher than the rate otherwise payable.
About Scrub Island
Scrub Island Development Group Ltd., the owner of a British Virgin
Islands luxury resort, and its affiliate, Scrub Island
Construction Limited, sought bankruptcy protection (Bankr. M.D.
Fla. Case Nos. 13-15285 and 13-15286) on Nov. 19, 2013, to end a
receivership Scrub Island claims was secretly put in place by its
lender. The bankruptcy case is assigned to Judge Michael G.
Williamson.
The 230-acre resort operates as a Marriott Autograph Collection
property. It has 52 rooms and suites, a spa and a 55-slip marina.
Scrub Island Development Group scheduled $125,569,235 in total
assets and $130,695,731 in total liabilities.
The Debtors are represented by Charles A. Postler, Esq., and
Harley E. Riedel, Esq., at Stichter, Riedel, Blain & Prosser, in
Tampa, Florida.
FirstBank Puerto Rico, the prepetition secured lender, is
represented by W. Keith Fendrick, Esq., at Holland & Knight LLP,
in Tampa, Florida.
The Debtors are represented by Charles A. Postler, Esq., and
Harley E. Riedel, Esq., at Stichter, Riedel, Blain & Prosser, in
Tampa, Florida.
FirstBank Puerto Rico, the Debtor's prepetition secured lender, is
represented by W. Keith Fendrick, Esq., at Holland & Knight LLP,
in Tampa, Florida.
The Official Committee of Unsecured Creditors appointed in Scrub
Island's cases has retained Robert B. Glenn, Esq., Edwin G. Rice,
Esq., and Victoria D. Critchlow, Esq., at Glenn Rasmussen, P.A.,
as general counsel.
SCRUB ISLAND: Files Schedules of Assets and Liabilities
-------------------------------------------------------
Scrub Island Development Group Limited has filed with the U.S.
Bankruptcy Court for the Middle District of Florida its schedules
of assets and liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $0
B. Personal Property $125,569,235
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $110,000,000
E. Creditors Holding
Unsecured Priority
Claims $0
F. Creditors Holding
Unsecured Non-priority
Claims $20,695,731
------------ ------------
TOTAL $125,569,235 $130,695,731
A copy of the schedules is available for free at:
http://bankrupt.com/misc/SCRUBISLANDsal.pdf
About Scrub Island
Scrub Island Development Group Ltd., the owner of a British Virgin
Islands luxury resort, and its affiliate, Scrub Island
Construction Limited, sought bankruptcy protection (Bankr. M.D.
Fla. Case Nos. 13-15285 and 13-15286) on Nov. 19, 2013, to end a
receivership Scrub Island claims was secretly put in place by its
lender. The bankruptcy case is assigned to Judge Michael G.
Williamson.
The 230-acre resort operates as a Marriott Autograph Collection
property. It has 52 rooms and suites, a spa and a 55-slip marina.
The Debtors are represented by Charles A. Postler, Esq., and
Harley E. Riedel, Esq., at Stichter, Riedel, Blain & Prosser, in
Tampa, Florida.
FirstBank Puerto Rico, the prepetition secured lender, is
represented by W. Keith Fendrick, Esq., at Holland & Knight LLP,
in Tampa, Florida.
The Debtors are represented by Charles A. Postler, Esq., and
Harley E. Riedel, Esq., at Stichter, Riedel, Blain & Prosser, in
Tampa, Florida.
FirstBank Puerto Rico, the Debtor's prepetition secured lender, is
represented by W. Keith Fendrick, Esq., at Holland & Knight LLP,
in Tampa, Florida.
The Official Committee of Unsecured Creditors appointed in Scrub
Island's cases has retained Robert B. Glenn, Esq., Edwin G. Rice,
Esq., and Victoria D. Critchlow, Esq., at Glenn Rasmussen, P.A.,
as general counsel.
SEARS HOLDINGS: Sears Issues Dismal Outlook as Holiday Sales Fall
-----------------------------------------------------------------
John Kell, writing for The Wall Street Journal, reported that
Sears Holdings Corp. projected adjusted losses for the fiscal
fourth quarter and full year that badly miss Wall Street's
expectations, as the struggling department-store operator warned
of continued same-stores sales weakness.
According to the report, the news spooked investors, which sent
shares down 13% to $36.95 in after-hours trading on Jan. 9.
Sears, controlled by billionaire hedge-fund investor Edward
Lampert, has been working to shed assets and spin off businesses
as it tries to turn around its mass-market retail stores, the
report related. But sales weakness has persisted, and in the
first nine weeks of the fiscal fourth quarter, Sears warned
overall same-store sales slid 7.4% due to falling sales at the
namesake domestic stores and at Kmart.
Both brands posted weaker consumer electronic sales, while Sears
domestic stores' also reported lower tools and home appliance
sales, while Kmart was stung by falling demand for grocery,
household products and toys, the report further related.
Overall, Sears projected a fiscal fourth-quarter loss of $2.01 to
$2.98 a share, badly missing the 20-cent loss estimate by analysts
surveyed by Thomson Reuters.
About Sears
Hoffman Estates, Illinois-based Sears Holdings Corporation
(Nasdaq: SHLD) -- http://www.searsholdings.com/-- operates full-
line and specialty retail stores in the United States and Canada.
Sears Holdings operates through its subsidiaries, including Sears,
Roebuck and Co. and Kmart Corporation. Sears Holdings also owns a
94 percent stake in Sears Canada and an 80.1 percent stake in
Orchard Supply Hardware. Key proprietary brands include Kenmore,
Craftsman and DieHard, and a broad apparel offering, including
such well-known labels as Lands' End, Jaclyn Smith and Joe Boxer,
as well as the Apostrophe and Covington brands. It also has the
Country Living collection, which is offered by Sears and Kmart.
Kmart Corporation and 37 of its U.S. subsidiaries filed voluntary
Chapter 11 petitions (Bankr. N.D. Ill. Lead Case No. 02-02474) on
Jan. 22, 2002. Kmart emerged from chapter 11 protection on May 6,
2003, pursuant to the terms of an Amended Joint Plan of
Reorganization. John Wm. "Jack" Butler, Jr., Esq., at Skadden,
Arps, Slate, Meagher & Flom, LLP, represented the retailer in its
restructuring efforts. The Company's balance sheet showed
$16,287,000,000 in assets and $10,348,000,000 in debts when it
sought chapter 11 protection. Kmart bought Sears, Roebuck & Co.,
for $11 billion to create the third-largest U.S. retailer, behind
Wal-Mart and Target, and generate $55 billion in annual revenues.
Kmart completed its merger with Sears on March 24, 2005.
The Company's balance sheet at Nov. 2, 2013, showed $20.20 billion
in total assets, $17.88 billion in total liabilities and $2.32
billion in total equity.
Negative Outlook
Standard & Poor's Ratings Services in January 2012 lowered its
corporate credit rating on Hoffman Estates, Ill.-based Sears
Holdings Corp. to 'CCC+' from 'B'. "We removed the rating from
CreditWatch, where we had placed it with negative implications on
Dec. 28, 2011. We are also lowering the short-term and commercial
paper rating to 'C' from 'B-2'. The rating outlook is negative,"
S&P said.
"The corporate credit rating reflects our projection that Sears'
EBITDA will be negative in 2012, given our expectations for
continued sales and margin pressure," said Standard & Poor's
credit analyst Ana Lai. She added, "We further expect that
liquidity could be constrained in 2013 absent a turnaround
or substantial asset sales to fund operating losses."
Moody's Investors Service in January 2012 lowered Sears Holdings
Family and Probability of Default Ratings to B3 from B1.
The outlook remains negative. At the same time Moody's affirmed
Sears' Speculative Grade Liquidity Rating at SGL-2.
The rating action reflects Moody's expectations that Sears will
report a significant operating loss in fiscal 2011. Moody's added
that the rating action also reflects the company's persistent
negative trends in sales, which continue to significantly
underperform peers.
As reported by the TCR on Dec. 7, 2012, Fitch Ratings has affirmed
its long-term Issuer Default Ratings (IDR) on Sears Holdings
Corporation (Holdings) and its various subsidiary entities
(collectively, Sears) at 'CCC' citing that The magnitude of Sears'
decline in profitability and lack of visibility to turn operations
around remains a major concern.
SEASTAR SOLUTIONS: S&P Assigns 'B' Corp. Credit Rating
------------------------------------------------------
Standard & Poor's Ratings Services assigned Litchfield, Ill.-based
marine components and systems manufacturer SeaStar Solutions a 'B'
corporate credit rating. The rating outlook is stable.
At the same time, S&P assigned SeaStar Solutions' subsidiary,
Marine Acquisition Corp.'s proposed $225 senior secured credit
facility (consisting of a $25 million revolver due 2019 and a
$200 million term loan due 2021) S&P's 'B' issue-level rating,
with a recovery rating of '3', indicating its expectation for
meaningful (50%-70%) recovery for lenders in the event of a
payment default. (The revolving credit facility will be undrawn
at close.)
The company will use the proceeds from the proposed term loan
issuance, in addition to a $133 million equity contribution by the
financial sponsor, to finance its acquisition by American
Securities LLC, and to pay transaction fees and expenses. Pro
forma for the transaction, American Securities will own a
substantial majority of SeaStar Solutions.
S&P's assessment of SeaStar Solutions' business risk profile as
"weak" reflects the company's focus in the niche recreational
boating market, and its exposure to high levels of cyclicality and
seasonality, particularly in the marine original equipment
manufacturer (OEM) segment, which S&P expects to contribute 37% to
2013 revenues. These risks are partially offset by SeaStar's good
market share in its core markets and recurring revenue from repeat
purchasers in its marine aftermarket segment--a result of the
three- to five-year replacement cycle for parts.
S&P's assessment of SeaStar Solutions financial risk profile as
"highly leveraged" reflects its financial policy assessment of the
company's financial sponsor, American Securities. American
Securities will own a substantial majority of SeaStar Solutions
following this transaction and will be able to drive the company's
leverage and financial policy in the intermediate term. Under
S&P's base-case performance assumptions, it expects adjusted
leverage to remain below 5x through 2015, and for funds from
operations (FFO) to debt to average about 12% through 2015.
Although these credit measures might otherwise be aligned with an
aggressive financial risk profile, the high risk for returns of
capital to shareholders or volatility in the underlying business
could push leverage to above 5x.
SECUREALERT INC: Inks $25-Mil. Credit Facility with Tetra House
---------------------------------------------------------------
SecureAlert, Inc., entered into an unsecured loan Facility
Agreement between Tetra House Pte. Ltd. as Lender and the Company
as Borrower; effective as of Dec. 30, 2013. Under the terms of
the Agreement the Company can borrow up to $25,000,000 between the
date of the Agreement and May 31, 2014. All funds borrowed under
the Agreement bear interest at a rate of eight percent per annum.
The Company also must pay an arrangement fee equal to three
percent of the total amount available under the Agreement. The
arrangement fee is payable as follows: (i) one percent due within
five business days of signing the Agreement, and (ii) the
remaining two percent being withheld from the first draw down of
funds under the Agreement.
Interest is due and payable in arrears semi-annually. All
outstanding principal and interest under the Agreement is due and
payable 24 months from the closing date. The Company may draw
down funds in increments of not less than $2,000,000 and in
integral multiples of $1,000,000 by submitting a Utilization
Request to the Lender. The Lender has 10 business days in which
to fund the Utilization Request upon receipt of that request from
the Company.
Upon signing the Agreement the Company submitted a Utilization
Request for $10,000,000 and expects it to be funded pursuant to
the terms of the Agreement. The Agreement was reviewed and
approved by disinterested and independent members of the Board of
Directors, David S. Boone, Winfried Kunz, Dan L. Mabey and George
F. Schmitt.
Tetra House Pte. Ltd. is a private company incorporated under the
laws of the Republic of Singapore and is controlled by Mr. Guy
Dubois who is a director of the Company and currently serves as
Chairman of the Board of Directors of the Company.
A copy of the Facility Agreement with Tetra House is available for
free at http://is.gd/VYLWBR
About SecureAlert
Sandy, Utah-based SecureAlert, Inc., markets and deploys offender
management programs, combining patented GPS tracking technologies,
fulltime 24/7/365 intervention-based monitoring capabilities and
case management services.
Hansen, Barnett & Maxwell, P.C., in Salt Lake City, Utah, issued a
"going concern" qualification on the consolidated financial
statements for the fiscal year ended Sept. 30, 2012, citing
losses, negative cash flows from operating activities, notes
payable in default and an accumulated deficit, which conditions
raise substantial doubt about its ability to continue as a going
concern.
SecureAlert incurred a net loss attributable to SecureAlert common
stockholders of $19.93 million on $19.79 million of total revenues
for the year ended Sept. 30, 2012, as compared with a net loss
attributable to SecureAlert common stockholders of $11.92 million
on $17.96 million of total revenues during the prior fiscal year.
The Company's balance sheet at June 30, 2013, showed
$27.63 million in total assets, $9.73 million in total
liabilities, and $17.90 million in total equity.
SENTINEL MANAGEMENT: Trustee Differs With BNY on Appeal Meaning
---------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the bankruptcy trustee for Sentinel Management Group
Inc. and Bank of New York Mellon Corp. are disputing who won in
the ruling issued by a federal judge in August regarding the
trustee's claims against the bank.
According to the report, Frederick Grede, the trustee for Sentinel
Management, argued in November that the bank has no further
defenses against claims of fraudulent transfer and equitable
subordination. BNY Mellon argued that the trustee lost entirely.
The report said the trustee asked U.S. District Judge James B.
Zagel in Chicago to rule that the bank was the recipient of
fraudulent transfers and that the bank's $312 million claim is
unsecured and should be subordinated, or addressed only after
other creditors of Sentinel are fully paid.
Mr. Rochelle pointed out that barring settlement, Judge Zagel is
to decide whether BNY Mellon has a secured claim for $312 million
or no claim at all. If the bank loses, it will be obliged to
return some $337 million that it got when it prevailed in Zagel's
first ruling. Grede is to file more papers on Feb. 3, with the
bank's last filing due on Feb. 24. Another appeal is likely,
absent a settlement, the report said.
The suit in district court is Grede v. Bank of New York, 08-cv-
02582, U.S. District Court, Northern District of Illinois
(Chicago). The appeal is In re Sentinel Management Group Inc., 10-
03787, U.S. Court of Appeals for the Seventh Circuit (Chicago).
About Sentinel Management
Based in Northbrook, Illinois, Sentinel Management Group Inc. --
http://www.sentinelmgi.com/-- was a full service firm offering a
variety of security solutions. The Company filed a voluntary
Chapter 11 petition (Bankr. N.D. Ill. Case No. 07-14987) on
Aug. 17, 2007. Ronald Barliant, Esq., Randall Klein, Esq., and
Kathryn A. Pamenter, Esq., at Goldberg, Kohn, Bell & Black
Rosenbloom & Moritz, Ltd., represented the Debtor. Lawyers at
Quinn, Emanuel Urquhart Oliver & Hedges, LLP, represented the
Official Committee of Unsecured Creditors. When the Debtor sought
bankruptcy protection, it estimated assets and debts of more than
$100 million.
On Aug. 28, 2007, the Court approved Frederick Grede as the
Debtor's Chapter 11 Trustee. Marc I. Fenton, Esq., at DLA Piper
US LLP, and Vincent E. Lazar, Esq, at Jenner & Block LLP,
represent the Chapter 11 Trustee.
The Court confirmed the Fourth Amended Chapter 11 Plan of
Liquidation for Sentinel on Dec. 15, 2008, which created a
Liquidation Trust. The Plan became effective Dec. 17, 2008, and
Mr. Grede was appointed Liquidation Trustee.
SHOTWELL LANDFILL: Balks at LSCG's Foreclosure Bid
--------------------------------------------------
Shotwell Landfill, Inc., objected to LSCG Fund 18 LLC's motion for
relief from the automatic stay or, in the alternative, for
adequate protection, stating that the maximum secured claim that
LSCG could have in the case is $2,900,000, with the remainder of
its claim, $11,423,122, as an unsecured claim.
LSCG in Nov. 27, 2013, court filings alleged that "cause" exists
to terminate the stay in the Debtor's bankruptcy case and allow
LSCG to exercise its non-bankruptcy remedies because its interest
in the Debtor's property is not adequately protected. LSCG also
claimed that it is owed $14,323,122 by the Debtor.
The Debtor said LSCG is not entitled to any adequate protection
payments based on a decrease in value of its collateral -- the
Debtor's property located at 4724 Smithfield Road, Wendell, North
Carolina with a value of $2,900,000.
About Shotwell Landfill, Inc.
Raleigh, North Carolina-based Shotwell Landfill, Inc., filed a
Chapter 11 petition (Bankr. E.D.N.C. Case No. 13-02590) in
Wilson on April 19, 2013. Blake P. Barnard, Esq., William P.
Janvier, Esq., and Samantha Y. Moore, Esq., at the Janvier Law
Firm, PLLC, in Raleigh, N.C., represent the Debtor as counsel.
William W. Pollock, Esq., at Ragsdale Liggett PLLC, in Raleigh,
N.C., represents the Debtor as special counsel.
The Bankruptcy Administrator was unable to appoint an official
committee of unsecured creditors in the Debtor's case.
The Debtor disclosed $23,027,736 in assets and $10,039,308 in
liabilities as of the Chapter 11 filing. In its amended
schedules, the Debtor disclosed $23,043,736 in assets and
$10,048,364 in liabilities as of the Chapter 11 filing.
SHOTWELL LANDFILL: Double J Wants Claim Estimated for Plan Voting
-----------------------------------------------------------------
Double "J" Enterprises, Inc. ("Double J"), a creditor and party-
in-interest in the Chapter 11 case of Shotwell Landfill, Inc.,
asks the Bankruptcy Court for estimation and temporary allowance
of its claim for purposes of accepting or rejecting the Debtor's
Plan of Reorganization.
In its amended motion, Double J said that prepetition, the Debtor
and Double J were involved in a lawsuit that began in The General
Court of Justice, District Court Division, Wake County, North
Carolina and was later transferred to the Superior Court Division.
The main issue in the Lawsuit involved certain equipment owned by
Double J and the Debtor's wrongful possession of the same.
On Aug. 16, 2013, Double J filed its proof of claim in the
estimated, unliquidated amount of $50,000. On Nov. 26, Double J
amended its claim to an estimated, unliquidated amount of
$150,000.
The Debtor filed objections to that claim.
If the Court denies Double J's motion, Double J requests that the
Court fully adjudicate its claim prior to the vote on confirmation
of the Plan.
About Shotwell Landfill, Inc.
Raleigh, North Carolina-based Shotwell Landfill, Inc., filed a
Chapter 11 petition (Bankr. E.D.N.C. Case No. 13-02590) in
Wilson on April 19, 2013. Blake P. Barnard, Esq., William P.
Janvier, Esq., and Samantha Y. Moore, Esq., at the Janvier Law
Firm, PLLC, in Raleigh, N.C., represent the Debtor as counsel.
William W. Pollock, Esq., at Ragsdale Liggett PLLC, in Raleigh,
N.C., represents the Debtor as special counsel.
The Bankruptcy Administrator was unable to appoint an official
committee of unsecured creditors in the Debtor's case.
The Debtor disclosed $23,027,736 in assets and $10,039,308 in
liabilities as of the Chapter 11 filing. In its amended
schedules, the Debtor disclosed $23,043,736 in assets and
$10,048,364 in liabilities as of the Chapter 11 filing.
SHOTWELL LANDFILL: Confirmation Hearing Continued Sine Die
----------------------------------------------------------
The Hon. Stephani W. Humrickhouse of the U.S. Bankruptcy Court
for the Eastern District of North Carolina continued to a later
date to be set by the Court that is at least later than Feb. 11,
2014, the hearing to consider confirmation of Shotwell Landfill,
Inc.'s Chapter 11 Plan dated Aug. 16, 2013.
Pursuant to the order, the Court also extended the deadlines in
connection with the confirmation of the Plan. The deadline for
all parties to vote on or object to the Disclosure Statement and
Plan is continued until Feb. 6; and the 180-day exclusive period
of Section 1121(c)(3) of the Bankruptcy Code is extended until
Feb. 20.
The Court has conditionally approved the disclosure statement
explaining, as reported in the Troubled Company Reporter Sept. 5,
2013. A copy of the Disclosure Statement is available at:
http://bankrupt.com/misc/shotwelllandfill.doc99.pdf
As reported in the TCR on Aug. 22, 2013, under the Plan, the
Allowed Secured Claim of Branch Bank & Trust in Class 3 will be
placed in current, non-default status and re-amortized over 25
years with interest at the Secured Rate. The Debtor will make
monthly payments according to such amortization. The Debtor
anticipates that BB&T's Class 3 Claim will be $2,900,000.
BB&T's Allowed Unsecured Claim in Class 6 will be amortized over
25 years at the Unsecured Rate, or such amortization and rate as
the Court finds necessary for confirmation. The Debtor proposes
to make monthly payments according to such amortization. The
Debtor anticipates that the Class 6 Claim will be less than
$6,700,000.
BB&T has filed a proof of claim in the amount of $13.7 million.
The claim amount is disputed.
The Plan provides that Allowed Unsecured Claims of less than
$5,000 in Class 7 will be paid in full 90 days after the Effective
Date. The Debtor anticipates the Class 7 Claims will be less than
$5,500.
Allowed General Unsecured Claims in Class 8 will receive quarterly
installments of $30,000 to be split pro rata among Allowed Claims
in Class 8 until paid in full. The Debtor anticipates Class 8
Claims will be less than $360,000. Class 8 claimants have filed
proofs of claim totaling $200,637.03.
The existing Allowed Equity Interests in the Debtor in Class 9
will remain the same as prepetition.
About Shotwell Landfill, Inc.
Raleigh, North Carolina-based Shotwell Landfill, Inc., filed a
Chapter 11 petition (Bankr. E.D.N.C. Case No. 13-02590) in
Wilson on April 19, 2013. Blake P. Barnard, Esq., William P.
Janvier, Esq., and Samantha Y. Moore, Esq., at the Janvier Law
Firm, PLLC, in Raleigh, N.C., represent the Debtor as counsel.
William W. Pollock, Esq., at Ragsdale Liggett PLLC, in Raleigh,
N.C., represents the Debtor as special counsel.
The Bankruptcy Administrator was unable to appoint an official
committee of unsecured creditors in the Debtor's case.
The Debtor disclosed $23,027,736 in assets and $10,039,308 in
liabilities as of the Chapter 11 filing. In its amended
schedules, the Debtor disclosed $23,043,736 in assets and
$10,048,364 in liabilities as of the Chapter 11 filing.
SIMPLY WHEELZ: Sixt Appeals Sale, Says Auction May Be Rigged
------------------------------------------------------------
Sixt Rent-a-Car, LLC, has taken an appeal from the Bankruptcy
Court order authorizing Simply Wheelz, d/b/a Advantage Rent-A-Car,
to sell the assets to The Catalyst Group, Inc. Sixt will present
these issues on appeal:
a. Whether Sixt has standing;
b. Whether Catalyst presented the highest and best offer
at the Auction;
c. Whether Catalyst is a good faith purchaser;
d. Whether the sale was tainted by collusion;
e. Whether the Auction and proposed sale of the Debtor's
assets was fair and equitable.
Sixt is a unit of German car-rental chain Sixt SE.
The U.S. Bankruptcy Court for the Southern District of Mississippi
has declared Catalyst (on behalf of one or more funds managed by
it) as the prevailing purchaser in the auction of certain of the
assets of Simply Wheelz, and approved the sale of the Advantage
Rent-A-Car assets to Catalyst free of all liens and other
encumbrances.
Toronto-based Catalyst is acquiring Advantage's roughly 70 rental-
car locations in exchange for forgiveness of $46 million in
bankruptcy loans it extended. Simply Wheelz hopes to complete its
sale to Catalyst in the first quarter of 2014.
Sixt SE was declared the back-up bidder in the event that Simply
Wheelz is not able to complete the sale transaction with Catalyst
within the specified period of time.
According to Jacqueline Palank, writing for LBO Wire, Sixt Rent-a-
Car argued that it should have won the bidding at last month's
auction.
Several parties-in-interest objected to the sale, including Sixt.
Simply Wheelz, however, defended the sale process, saying it has
fulfilled its obligations both to the bankruptcy process and to
Sixt as a participant through all phases of the sales process. At
all relevant times, the Debtor, its professionals and its
management generally apprised any qualified bidder of the areas to
be addressed by the settlement with the Debtor's parent, Hertz
Corporation, but between the confidentiality of those negotiations
and the constantly evolving discussions, it was not possible to
share any concrete, specific details. Further, in accordance with
the confidentiality agreement, the Debtor, its professionals and
its management were willing to participate in discussions with
Hertz and any qualified bidder to discuss the matters anticipated
to be covered by the Hertz Settlement. Sixt, however, was
unwilling to meet with Hertz under those circumstances.
Sixt has said the true intent of the bad faith maneuvering is
evidenced by the initial overbid offered by Catalyst Capital
Group. Sixt pointed out that Catalyst's overbid, which the Debtor
determined at the auction to be higher and better than Sixt SE,
and its subsidiary, Sixt Rent-A-Car's initial overbid, consisted
of no additional funds from Catalyst. Indeed, the Catalyst bid
was $500,001 less than Sixt's bid. Rather, Catalyst offered, in
essence, to simply withdraw its notices of default, together with
a few inconsequential changes to its asset purchase agreement.
Hertz also objected to the sale motion, mainly to preserve its
rights as a precautionary measure in the event the parties are
unable to come to an agreement that resolves and disposes of the
objection. The Debtor, the Debtor's parent, Hertz and the winning
bidder negotiated a settlement of Hertz's claims and other open
issues.
Late last month, the Debtor won bankruptcy-court approval to
settle a dispute with former owner Hertz Global Holdings Inc. over
leased vehicles. Federal regulators had ordered Hertz to spin off
Advantage in connection with its $2.3 billion acquisition of
Dollar Thrifty Automotive Group Inc. Under the spinoff, Hertz
agreed to lease Advantage 24,000 vehicles. But disputes arose over
the agreement, prompting Advantage to seek Chapter 11 protection.
Under the settlement, reached earlier in December, Hertz will
allow Advantage to continue using the vehicles for a limited
amount of time in exchange for payments. Hertz also will pay
$2.75 million to Catalyst when the sale closes.
Other objectors include local taxing authorities of Bexar County,
Dallas County, Harris County, and Tarrant County. The Local Texas
Tax Authorities seek to adequately protect their tax liens and
interest in their collateral. The Tax Authorities have filed
secured claims for unpaid 2013 ad valorem property taxes totaling
approximately $400,000.
Marc Hirschfield, Esq., at Baker & Hostetler LLP, and W. McDonald
Nichols, Esq., at Wise Carter Child & Caraway, P.A., on behalf of
Europcar International SASU, also filed a limited objection to the
sale of assets to Catalyst Capital Group or to another entity
making a higher or better offer. Mr. Hirschfield said the Debtor
must assume an executory contract in order to assign it. The
Debtor is not party to the Cooperation agreement, which is solely
between Europcar and Franchise Services of North America Inc.
On Dec. 16, Orlando Sanford Domestic, Inc. and The Sanford Airport
Authority withdrew their limited objection to the notice of
potential assumption and assignment of certain executory contracts
and unexpired leases in connection with the sale, pursuant to a
stipulation.
Sixt is represented by:
John D. Moore, Esq.
LAW OFFICES OF JOHN D. MOORE, P.A.
301 Highland Park Cove, Suite B (39157)
P.O. Box 3344
Ridgeland, MS 39158-3344
Tel: 601-853-9131
Fax: 601-853-9139
E-mail: john@johndmoorepa.com
- and -
Glenn E. Siegel, Esq.
MORGAN, LEWIS & BOCKIUS, LLP
101 Park Avenue
New York, NY 10178
Tel: 212-309-6780
Fax: 212-309-6001
E-mail: glenn.siegel@morganlewis.com
The Debtor is represented by:
Stephen W. Rosenblatt, Esq.
Christopher R. Maddux, Esq.
J. Mitchell Carrington, Esq.
Thomas M. Hewitt, Esq.
BUTLER SNOW O'MARA STEVENS & CANNADA
E-mail: Steve.Rosenblatt@butlersnow.com
Chris.Maddux@butlersnow.com
Mitch.Carrington@butlersnow.com
Thomas.Hewitt@butlersnow.com
About Simply Wheelz LLC
Simply Wheelz LLC sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. S.D. Miss. Case No. 13-03332) on Nov. 5,
2013. The case is assigned to Judge Edward Ellingon. The Debtor
disclosed $413,502,259 in assets and $322,230,695 in liabilities
as of the Chapter 11 filing.
The Debtors are represented by Stephen W. Rosenblatt, Esq.,
Christopher R. Maddux, Esq., J. Mitchell Carrington, Esq., and
Thomas M. Hewitt, Esq., at Butler Snow O'Mara Stevens & Cannada,
in Ridgeland, Mississippi.
SIMPLY WHEELZ: Asks Regulators to Approve Sale of Assets
--------------------------------------------------------
The Federal Trade Commission is seeking public comment, until
January 22, 2014, on an application by Franchise Services of North
America, Inc., for approval to sell assets it acquired from Hertz
Global Holdings, Inc., under a 2012 FTC settlement with Hertz, to
The Catalyst Capital Group, Inc. The settlement required Hertz to
sell its Advantage rental car business and other assets to a
Commission-approved buyer in order to resolve charges that its
proposed $2.3 billion acquisition of Dollar Thrifty Automotive
Group, Inc. would have been anticompetitive.
Pursuant to the consent order with Hertz, FSNA acquired the
Advantage assets and, through its direct subsidiary Simply Wheelz,
has operated those assets under the Advantage name. In November,
Simply Wheelz filed for Chapter 11 bankruptcy protection, and
sought to sell Advantage, which has continued to operate during
this process.
Following a bankruptcy auction held in December 2013, Catalyst was
declared the winning bidder for the Advantage assets. The
bankruptcy court has approved Catalyst's acquisition of Advantage,
subject to FTC approval. In its application for Commission
approval, FSNA states that Catalyst is one of the largest Canadian
private equity firms and has a "proven track record of acquiring
distressed businesses and successfully turning them around." The
application also cites Catalyst's "substantial financial
commitments" to the Advantage business.
The Commission will decide whether to approve the proposed asset
sale after expiration of a public comment period. Because of the
expedited nature of the bankruptcy proceeding, the Commission has
determined to shorten the public comment period. Accordingly,
comments may be submitted until January 22, 2014.
Written comments should be sent to: FTC Office of the Secretary,
600 Pennsylvania Ave., N.W., Washington, DC 20580. Comments can be
submitted electronically. Copies of the application can be found
on the FTC's website and as a link to this press release. (FTC
File No. 121-0120, Docket No. C-4376; the staff contact is Daniel
P. Ducore, Bureau of Competition, 202-326-2526)
About Simply Wheelz LLC
Simply Wheelz LLC sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. S.D. Miss. Case No. 13-03332) on Nov. 5,
2013. The case is assigned to Judge Edward Ellingon. The Debtor
disclosed $413,502,259 in assets and $322,230,695 in liabilities
as of the Chapter 11 filing.
The Debtors are represented by Christopher R. Maddux, Esq., and
Stephen W. Rosenblatt, Esq., at Butler Snow O'Mara Stevens &
Cannada, in Ridgeland, Mississippi.
SOCAL EATS: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------
Debtor affiliates filing separate Chapter 11 cases:
Debtor Case No.
------ --------
SoCal Eats LLC 14-00092
P.O. Box 880588
San Diego, CA 92108
SoCal Eats College LLC 14-00094
P.O. Box 880588
San Diego, CA 92108
SoCal Eats Kearny Mesa LLC 14-00095
P.O. Box 880588
San Diego, CA 92108
SoCal Eats La Jolla LLC 14-00096
SoCal Eats Market Street LLC 14-00097
SoCal Eats Mission Valley LLC 14-00098
SoCal Eats Point Loma LLC 14-00099
Chapter 11 Petition Date: January 8, 2014
Court: United States Bankruptcy Court
Southern District of California (San Diego)
Debtor's Counsel: Alan Vanderhoff, Esq.
VANDERHOFF LAW GROUP
401 B Street, Suite 1470
San Diego, CA 92101
Tel: (619) 299-2050
Fax: (619) 239-6554
Email: alan.vanderhoff@vanderhofflaw.com
Estimated Assets: $500,000 to $1 million
Estimated Liabilities: $1 million to $10 million
The petitions were signed by David Whisenhunt, managing member of
sole member.
A list of SoCal Eats Kearny Mesa LLC's four largest unsecured
creditors is available for free at:
http://bankrupt.com/misc/casb14-95.pdf
A list of SoCal Eats College LLC's six largest unsecured creditors
is available for free at http://bankrupt.com/misc/casb14-94.pdf
A list of SoCal Eats LLC's 20 largest unsecured creditors is
available for free at http://bankrupt.com/misc/casb14-92.pdf
SOUND SHORE: Court Okays Assumption & Assignment of More Leases
---------------------------------------------------------------
The Bankruptcy Court authorized Sound Shore Medical Center of
Westchester, et al., to assume and assign additional executory
contracts and unexpired leases and fix cure amounts, in connection
with the sale of assets to Montefiore Health System Inc.
The Court also ordered that all objections and responses to the
motion are resolved; and the buyers' promise to perform the
obligations under the additional assigned contracts after the
closing constitute adequate assurance of future performance under
the additional assigned contracts.
Lara P. Emouna, Esq., at Gleich, Siegel & Farkas, LLP, on behalf
of CW North Ridge Plaza LLC, asked the Court to condition the
entry of an order authorizing the assumption and assignment of the
lease. Specifically, CW North asked that the cure amount be no
less than $25,732; and the purchaser must assume the lease and
the obligations thereunder from the lease's inception, as if that
entity were the original tenant named in the lease, not just from
the closing date.
The Bankruptcy Court approved the sale of Sound Shore Health
System to Montefiore at a hearing in August.
About Sound Shore Medical Center
Sound Shore Medical Center of Westchester, Mount Vernon Hospital
Inc., Howe Avenue Nursing Home and related entities sought
Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 13-22840) on
May 29, 2013, in White Plains, New York.
The Debtors were the largest "safety net" providers for Southern
Westchester County in New York. Affiliated with New York Medical
College, Sound Shore is a not-for-profit 242-bed, community based-
teaching hospital located in New Rochelle, New York. Mountain
Vernon Hospital is a voluntary, not-for-profit 176-bed hospital
located in Mount Vernon, New York. Howe Avenue Nursing Home is a
150-bed, comprehensive facility.
The Debtors tapped Burton S. Weston, Esq., at Garfunkel Wild, P.C.
as counsel; Alvarez & Marsal Healthcare Industry Group, LLC, as
financial advisors; and GCG Inc., as claims agent.
Alston & Bird LLP represents the Official Committee of Unsecured
Creditors. Deloitte Financial Advisory Services LLP serves as the
Committee's as financial advisor.
Sound Shore disclosed assets of $159.6 million and liabilities
totaling $200 million. Liabilities include a $16.2 million
revolving credit and a $5.8 million term loan with Midcap
Financial LLC. There is $9 million in mortgages with Sun Life
Assurance Co. of Canada (US) and $11.5 million owing to the New
York State Dormitory Authority.
Neubert, Pepe & Monteith, P.C., represents Daniel T. McMurray, the
patient care ombudsman for Sound Shore.
The Debtors filed for bankruptcy to sell their assets, including
their hospital and nursing home operations, to the Montefiore
health system. On Aug. 8, 2013, the Bankruptcy Court entered an
order, as affirmed and ratified by a Supplemental Sale Order
entered on Oct. 15, 2013, approving the sale to Montefiore New
Rochelle Hospital, Inc., Schaffer Extended Care Center, Inc.,
Montefiore Mount Vernon Hospital, Inc. and certain related
affiliates.
In June 2013, Montefiore added $4.75 million to its purchase offer
to speed up the sale. Montefiore raised its bid to $58.75 million
plus furniture and equipment as part of a request for a private
sale of the hospitals.
On Nov. 6, 2013 at 12:01 a.m. the closing of the Sale occurred and
the sale was effective.
Montefiore is represented by Togut, Segal & Segal LLP.
SR REAL: Jan. 13 Hearing to Approve Foley & Lardner Employment
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of California
will convene a hearing on Jan. 13, 2014, at 2:30 p.m., to consider
SR Real Estate Holdings LLC's request for permission to employ
Foley & Lardner LLP as general bankruptcy counsel.
On Dec. 16, 2013, the Debtor filed a supplemental brief in support
of its motion to employ Foley. The Debtor filed on Sept. 3, its
application to hire Foley. Over 45 days after the Debtor's motion
to employ, DACA 2010L L.P. and Sargent Ranch Management Company,
LLC, objected to Foley's employment.
In this connection, Foley and its lawyers did not accept the
engagement by the Debtor without first ensuring it could be
approved as counsel.
The Original Motion
As reported in the Troubled Company Reporter on Sept. 9, 2013, the
firm will be paid based on its customary hourly rates. The rates
for some of the attorneys and paraprofessionals expected to be
primarily involved in the case are:
Attorney E-mail Hourly Rate
-------- ------ -----------
Victor A. Vilaplana vavilaplana@foley.com $700
Dawn Messick dmessick@foley.com $510
Jennifer Pinder jpinder@foley.com $495
Matthew Riopelle mriopelle@foley.com $455
Marwill Hogan mhogan@foley.com $335
Paraprofessional Hourly Rate
---------------- -----------
Kerry Farrar $225
The Firm will be reimbursed for its actual, necessary expenses
incurred.
Prior to the Petition Date, the Debtor provided the Firm a
$350,000 retainer for prepetition and postpetition bankruptcy
planning and advice. At the time of the filing, after the
deduction of $32,500 in fees and the filing fee in the amount of
$1,213, the Firm had on deposit a retainer of $316,287.00
Mr. Vilaplana assures the Court that Foley & Lardner is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
About SR Real Estate Holdings
SR Real Estate Holdings, LLC, owner of 14 parcels of real property
totaling 6,400 acres straddling Santa Cruz and Santa Clara
counties, filed a Chapter 11 petition (Bankr. N.D. Cal. Case No.
13-54471) in San Jose, California, on Aug. 20, 2013. Victor A.
Vilaplana, Esq., at Foley and Lardner, has been tapped as proposed
counsel to the Debtor. The Debtor disclosed $15,016,593 in assets
and $548,907,938 in liabilities as of the Chapter 11 filing.
This is the third bankruptcy filed with respect to the property.
The prior owner, Sargent Ranch, LLC, filed Chapter 11 cases in
January 2010 (Bankr. S.D. Cal. Case No. 10-00046-PB) and November
2011 (Bankr. S.D. Cal. Case No. 11-18853). The second bankruptcy
case was dismissed in February 2012.
ST. FRANCIS' HOSPITAL: Jan. 21 Hearing on $20-Mil. DIP Loan
-----------------------------------------------------------
St. Francis' Hospital, in Poughkeepsie, New York, will appear
before the Bankruptcy Court on Jan. 21, 2014, at 11:00 a.m. to
seek final approval of its request to obtain financing from MidCap
Financial, LLC, and use cash collateral of its prepetition
lenders.
MidCap and a related entity have agreed to provide St. Francis and
its debtor-affiliates superpriority postpetition financing under
these terms:
-- The maximum loan amount is $20 million, consisting of (i) a
revolving loan with a principal amount of up to $9 million, and
(ii) a term loan in the original principal amount of $11 million.
-- The term debt will be interest only, payable monthly in
arrears at an annual rate of 30-day, reserve adjusted, LIBOR
(subject to a 1.00% floor) plus 7.0% reset monthly secured by a
priming lien on the real estate.
-- There will be a carve-out for fees of professionals employed
by the Debtors in the amount not to exceed $150,000, incurred
after a "triggering event", and for the committee's professionals
not to exceed $50,000.
-- The DIP financing will mature 12 months from the date of
closing.
-- Interest on the outstanding balance of the DIP Credit
Agreement will be payable monthly in arrears at an annual rate of
30-day, reserve adjusted, LIBOR (subject to a 1.00% floor) plus
5.25%, reset monthly.
The Debtors intend to use the cash collateral of Manufacturers and
Traders Trust Company, in its capacity as indenture trustee for
bondholders. The Debtors owe $32 million in principal for secured
bonds issued by the Debtors in 2004 and 2007.
As adequate protection, the Debtors will repay from the DIP
financing the emergency advances made by the indenture trustee
prepetition, which amount is $2.3 million plus interest. The
Debtors will also make adequate protection payments in an amount
equal to the regularly scheduled, non-default amounts due to be
paid by the Debtors under the bond documents. As further adequate
protection, the Debtors agree to abide with various milestones,
including:
-- On or before Dec. 18, 2013, the Debtors will have filed a
motion seeking to sell substantially all of their assets, along
with a motion to approve bidding procedures;
-- On or before Dec. 23, 2013, the Debtors shall have obtained
an order from the Court approving the bidding procedures, in form
and substance reasonably acceptable to the Indenture Trustee;
-- On or before Jan. 13, 2014, the Debtors will have filed a
proposed plan of reorganization or liquidation and accompanying
disclosure statement;
-- If applicable, on or before Feb. 10, 2014, the Debtors will
have conducted an auction of those assets;
-- On or before Feb. 14, 2014, the Debtors will have obtained
an order from the Court approving the sale of assets;
-- On or before Feb. 14, 2014, the Debtors will have obtained
an order from the Court approving a Disclosure Statement;
-- On or before March 31, 2014, the Debtors will have obtained
an order from the Court confirming the Plan, in form and substance
reasonably acceptable to the Indenture Trustee; and
-- On or before April 7, 2014, the Debtors will have
consummated the Plan and the Plan shall otherwise have become
effective.
The Debtors say that access to financing and cash collateral will
fund operating requirements and preserve and maintain their
properties and the infrastructure of their businesses pending a
sale of substantially all of their assets.
St. Francis on Dec. 20 obtained interim approval of the proposed
financing. A copy of the interim order is available for free at:
http://bankrupt.com/misc/St_Francis_Interim_DIP_Order.PDF
About St. Francis' Hospital
St. Francis' Hospital, Poughkeepsie, New York, and four affiliates
sought protection under Chapter 11 of the Bankruptcy Code (Bankr.
S.D.N.Y. Lead Case No. 13-37725) on Dec. 17, 2013. The case is
assigned to Judge Cecelia G. Morris.
St. Francis will sell its 333-bed acute-care facility, which was
founded in 1914, for $24.2 million to Health Quest Systems Inc.,
absent higher and better offers. An auction will be held Feb. 13
if a rival offer is submitted.
The Debtors' counsel is Christopher M. Desiderio, Esq., at Nixon
Peabody LLP, in New York; the financial adviser is CohnReznick
Advisory Group; and the investment banker is Deloitte Corporate
Finance LLC. BMC Group is the claims and notice agent.
The U.S. Trustee has appointed five members to the Official
Committee of Unsecured Creditors.
ST. FRANCIS' HOSPITAL: Amends Notice on Health Quest-Led Sale
-------------------------------------------------------------
St. Francis' Hospital, Poughkeepsie, New York, on Dec. 31 filed a
supplemental notice in connection with the sale of substantially
all assets to Health Quest Systems Inc., absent higher and better
offers.
According to the assets purchase agreement, Health Quest has
offered to pay $24.15 million for the assets. Payment will be in
the form of: (a) the assumption of liabilities, and (b) additional
consideration in the form of one of the following, at buyer's
option:
(i) Cash totaling $18.62 million; or,
(ii) Exchanged bond obligations with either (a) an applicable
interest rate of 4.00% with a beginning principal amount of $22.15
million; or (b) with an applicable interest rate of 5.25% with a
beginning principal amount of $19.15 million.
According to the court-approved sale rules, potential bidders must
submit a timely and compliant expression of interest so as to be
received by no later than Jan. 10, 2014, at 5:00 p.m. (Eastern
prevailing time). If no party submits an expression of interest,
the Debtors will seek approval of the sale to Health Quest at a
sale hearing on Jan. 21. If there is at least one timely
compliant expression of interest, (i) there will be a Feb. 10,
2014 deadline to submit bid packages; (ii) there will be an
auction on Feb. 13, 2013, if at least one qualified bid is
received; and (iii) the sale hearing will be conducted on Feb. 18.
Supplemental Sale Notice
An initial notice of the sale was made by the Debtors on Dec. 20,
2013. The notice referenced, among other things, an offer to
purchase the assets for $24.15 million Health Quest, the stalking
horse, subject to higher or better offers. This referenced
purchase price amount of $24.15 million represents the highest
possible amount under the purchase price.
The Debtors have supplemented the initial sale notice as follows:
(a) if a Qualified Bid provides for payment in full of
Additional Consideration in Cash, the amount of the purchase price
in such bid must provide for Cash that is at least in the amount
of $18.62 million, plus the amount of the Break-Up Fee, plus the
maximum amount of the Expense Reimbursement Fee, plus $200,000;
(b) to the extent that the Stalking Horse elects, pursuant to
the APA, to tender the Additional Consideration in exchanged bond
obligations, the Debtors have been informed by the Bond Trustee
that it intends, pursuant to section 3.3(b) of the APA, to elect a
5.25% interest rate. (i.e., "Option Two" in Schedule 3.1 of the
APA) With the Bond Trustee's election of Option Two, the beginning
principal amount of the exchanged bond obligations will be
$19,150,000;
(c) if a bid provides for payment of Additional Consideration by
the issuance or delivery of bonds or similar instruments, then
such instruments must be on terms that pay interest on a tax-
exempt basis and such an offer must acknowledge that the
consummation of a transaction that involves the use of such
instruments shall be considered a Qualified Bid only with the
consent of the Bond Trustee;
(d) if a Qualified Bid provides for payment of Additional
Consideration by the issuance or delivery of bonds or similar
instruments, such bid must also provide for the payment of
Additional Consideration that is at least in the amount of the sum
of: (i) the amount of the Break-Up Fee in Cash; (ii) the maximum
amount of the Expense Reimbursement Fee in Cash; and (iii)
$200,000; and
(e) a Qualified Bid must provide that, in the event the Debtors
are unable to secure sufficient Exit Financing to fund all Exit
Costs at the Closing, the bidder shall be required to provide
consideration in the form of Cash as set forth in Section 3.3(c)
of the APA.
A Qualified Bid must also provide for satisfaction of all cure
obligations for the Assumed Contracts and Assumed Leases,
described in section 2.3(a) of the APA, in an amount not less than
$500,000. For the avoidance of doubt, any bidder has the option
of providing Additional Consideration in lieu of satisfying such
cure obligations.
The amount of the Break-Up Fee contemplated by the APA is $1.2
million and the amount of the Expense Reimbursement Fee
contemplated by the APA is $1.2 million, as well. The Official
Committee of Unsecured Creditors appointed in the Debtors' chapter
11 cases believes that the proposed Break-Up Fee amount and
Expense Reimbursement Fee amount are excessive and intends on
objecting to their approval. The Debtors and the Stalking Horse
both support the amount of the Break-Up Fee and Expense
Reimbursement. The proposed Break-Up Fee and Expense
Reimbursement Fee will be considered by the Bankruptcy Court
during a hearing as scheduled in the Sale Procedures Order.
Any questions regarding the sale process and the Debtors' assets
can be directed to Deloitte Corporate Finance, LLC, the Debtors'
proposed investment banking advisor:
DELOITTE CORPORATE FINANCE LLC
Simon Gisby
1633 Broadway
New York, NY 10019
Tel: (212) 436-2495 Office
(917) 599-8550 Cell
About St. Francis' Hospital
St. Francis' Hospital, Poughkeepsie, New York, and four affiliates
sought protection under Chapter 11 of the Bankruptcy Code (Bankr.
S.D.N.Y. Lead Case No. 13-37725) on Dec. 17, 2013. The case is
assigned to Judge Cecelia G. Morris.
St. Francis will sell its 333-bed acute-care facility, which was
founded in 1914, for $24.2 million to Health Quest Systems Inc.,
absent higher and better offers. An auction will be held Feb. 13
if a rival offer is submitted.
The Debtors' counsel is Christopher M. Desiderio, Esq., at Nixon
Peabody LLP, in New York; the financial adviser is CohnReznick
Advisory Group; and the investment banker is Deloitte Corporate
Finance LLC. BMC Group is the claims and notice agent.
The U.S. Trustee has appointed five members to the Official
Committee of Unsecured Creditors.
ST. FRANCIS' HOSPITAL: Says Patient Care Ombudsman Unnecessary
--------------------------------------------------------------
St. Francis' Hospital, Poughkeepsie, New York, and its debtor-
affiliates seek entry of an order, pursuant to Section 333(a) of
the Bankruptcy Code and Bankruptcy Rule 2007.2, determining that
appointment of a patient care ombudsman for the Debtors is not
required at this time.
The Debtors say that in light of the Debtors' extensive internal
quality management procedures as well as oversight from numerous
government agencies and professional associations, the appointment
of such an ombudsman would duplicate the Debtors' existing patient
care quality management procedures at substantial cost and without
increasing the quality of care for their patients. Moreover, any
input by an ombudsman probably would be rendered moot before it
could have any meaningful impact because the Debtors are likely to
sell substantially of all their assets to another hospital
facility in the very short run which will lead to, among other
things, the integration of most of the Debtors' operations.
The hearing on the motion -- originally slated for Dec. 20 -- has
been adjourned to Jan. 21, 2014, at 11:00 a.m.
About St. Francis' Hospital
St. Francis' Hospital, Poughkeepsie, New York, and four affiliates
sought protection under Chapter 11 of the Bankruptcy Code (Bankr.
S.D.N.Y. Lead Case No. 13-37725) on Dec. 17, 2013. The case is
assigned to Judge Cecelia G. Morris.
St. Francis will sell its 333-bed acute-care facility, which was
founded in 1914, for $24.2 million to Health Quest Systems Inc.,
absent higher and better offers. An auction will be held Feb. 13
if a rival offer is submitted.
The Debtors' counsel is Christopher M. Desiderio, Esq., at Nixon
Peabody LLP, in New York; the financial adviser is CohnReznick
Advisory Group; and the investment banker is Deloitte Corporate
Finance LLC. BMC Group is the claims and notice agent.
The U.S. Trustee has appointed five members to the Official
Committee of Unsecured Creditors.
TLO LLC: Six Unsec. Creditors Named to Official Committee
---------------------------------------------------------
Guy G. Gebhardt, Acting United States Trustee for Region 21,
pursuant to Section 1102(a)(1) of the Bankruptcy Code, appointed
three members to the Official Committee of Unsecured Creditors in
the bankruptcy case of TLO LLC.
The Committee members are:
1. Christopher Cavalier
Experian North America
475 Anton Boulevard
Costa Mesa, CA 92629
Tel: (714) 830-5840
Fax: (972) 370-5721
E-mail: christopher.cavalier@experian.com
2. Terry Kilburn, Chief Operation Officer
Tracers Information Specialists, Inc.
15470 Flight Path Drive
Brooksville, FL 34604
Tel: (877) 723-2689
Fax: (877) 723-2691
E-mail: terry@tracersinfo.com
3. Steven D. Sass
Dun & Bradstreet
307 International Circle, Suite 270
Hunt Valley, MD 21030
Tel: (410) 773-4040
Fax: (410) 773-4057
E-mail: steven.sass@rms-igor.com
4. Charles Simpson, Bankruptcy Manager
Dell Financial Services, LLC
2300 Greenlawn Boulevard, MS RR3-52
Round Rock, Texas 78682
Tel: (512) 728-7855
Fax: (512) 723-6859
E-mail: charles_simpson@dell.com
5. Gary Steck
LSSiDATA
One Sentry Parkway, Suite 7000
Blue Bell, PA 19422
Tel: (610) 276-4327
E-mail: gsteck@lssidata.com
6. Daniel Merchant
SMA Communications
6901 S.W. 18th Street, Suite E202
Boca Raton, FL 33433
Tel: (561) 367-5129 x 106
Fax: (561) 910-1530
E-mail: dmerchant@smacomm.com
About TLO LLC
TLO LLC, a provider of risk-mitigation services, filed a petition
for Chapter 11 reorganization (Bankr. S.D. Fla. Case No.
13-bk20853) on May 9, 2013, in West Palm Beach, Florida, near the
company's headquarters in Boca Raton. The petition was signed by
E. Desiree Asher as CEO.
Judge Paul G. Hyman, Jr., presides over the case. Robert C. Furr,
Esq., and Alvin S. Goldstein, Esq., at Furr & Cohen, serve as the
Debtor's counsel. Bayshore Partners, LLC is the Debtor's
investment banker. Thomas Santoro and GlassRatner Advisory &
Capital Group, LLC are the Debtor's financial advisors.
Paul J. Battista, Esq., and Mariaelena Gayo-Guitian, Esq., at
Genovese, Joblove & Battista, P.A., represent the Official
Committee of Unsecured Creditors as counsel.
The Debtor disclosed assets of $46.6 million and liabilities of
$109.9 million, including $93.4 million in secured claims. The
principal lender is Technology Investors Inc., owed $89 million.
TII is owned by the estate of Hank Asher, the company's primary
owner who died this year. There is $4.6 million secured by
computer equipment.
TRINITY COAL: Maturity Date of DIP Loan Extended Until Feb. 28
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Kentucky
approved a ninth amendment to Trinity Coal Corporation, et al.'s
senior secured priming and super-priority postpetition credit and
security agreement.
Pursuant to the ninth amendment, the maturity date under the DIP
credit agreement is extended until Feb. 28, 2014, and the letter
of credit expiration date is extended until Feb. 21.
The Court also ordered that except as expressly modified by the
ninth amendment, the DIP orders and the deposit escrow orders
remain in full force and effect.
As reported in the Troubled Company Reporter on Dec. 4, 2013, the
Debtors said the amendment is designed to conform the DIP
Agreement to terms relating to timing of the anticipated effective
date of the Debtors' Chapter 11 plan and funding of the Debtors'
operations pending the Effective Date, which have been agreed to
and are already of record in the Chapter 11 Cases.
Pursuant to the Plan, the effective date must occur on or prior to
Dec. 9, 2013; provided however, that the effective date may be
extended, at Essar Global Fund Limited's option, to no later than
Jan. 31, 2014 -- Outside Effective Date -- subject to Essar's
satisfaction of conditions. In this regard, among other things,
the commitment letter provides that in an extension, Essar will
fund by capital contributions the Debtors' costs of ongoing
operations from and including Dec. 9 through the Outside Effective
Date.
About Trinity Coal
Trinity Coal Corp. is a coal mining company that owns coal
deposits located in the Appalachian region of the eastern United
States, specifically, in Breathitt, Floyd, Knott Magoffin, and
Perry Counties in eastern Kentucky and in Boone, Fayette, Mingo,
McDowell and Wyoming Counties in West Virginia. Privately held
multinational conglomerate Essar Global Limited acquired Trinity
Coal in 2010 for $600 million.
Credit Agricole Corporate & Investment Bank, ING Capital LLC and
Natixis, New York Branch filed an involuntary petition for relief
under Chapter 11 against Trinity Coal Corporation and 15
affiliates (Bankr. E.D. Ky. Lead Case No. 13-50364). The three
entities say they are owed a total of $104 million on account
loans provided to Trinity.
On Feb. 14, 2013, Austin Powder Company, Whayne Supply Company and
Cecil I. Walker Machinery Co. filed an involuntary petition for
relief under Chapter 11 (Bankr. E.D. Ky. Case No. 13-50335)
against Frasure Creek Mining, LLC. On Feb. 19, 2013, Credit
Agricole, ING Capital and Natixis joined as petitioning creditors.
The Debtors consented to the entry of an order for relief in each
of their respective Chapter 11 cases.
Steven J. Reisman, Esq., L. P. Harrison 3rd, Esq., Jerrold L.
Bregman, Esq., and Dienna Ching, Esq., at Curtis, Mallet-Prevost,
Colt & Mosle LLP, in New York, N.Y.; and John W. Ames, Esq., C.R.
Bowles, Jr., Esq., and Bruce Cryder, Esq., at Bingham Greenebaum
Doll LLP, in Lexington, Ky., represent the Debtors as counsel.
Attorneys at Foley & Lardner LLP, in Chicago, Ill., represent the
Official Committee of Unsecured Creditors as counsel. Sturgill,
Turner, Barker & Maloney, PLLC, in Lexington, Ky., represents the
Official Committee of Unsecured Creditors as local counsel. Dixon
Hughes Goodman LLP serves as tax accountants.
Trinity Coal on Nov. 8, 2013 won an order confirming its Chapter
11 plan. Under the Plan, the company will exit Chapter 11 through
a repurchase by Essar Group, the co-proponent of the Plan. Essar
is reacquiring Trinity by paying secured lenders $56 million
toward claims of some $123 million. Essar is an Indian business
group controlled by billionaire brothers Shashikant and Ravikant
Ruia.
UMED HOLDINGS: Reports $616-K Net Loss for Sept. 30 Quarter
-----------------------------------------------------------
UMED Holdings, Inc., filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q, reporting a net loss
of $616,920 on $966 of sales for the three months ended Sept. 30,
2013, compared to a net loss of $261,313 on $58,308 of sales for
the same period in 2012.
The Company's balance sheet at Sept. 30, 2013, showed
$2.24 million in total assets, $4.4 million in total liabilities,
and stockholders' deficit of $2.16 million.
The Company noted that it has incurred a deficit of $4.93 million
as of Sept. 30, 2013. The ability of the Company to continue as a
going concern is in doubt and dependent upon achieving a
profitable level of operations or on the ability of the Company to
obtain necessary financing to fund ongoing operations, according
to the Form 10-Q.
A copy of the Form 10-Q is available at:
http://is.gd/cUnJ1Z
UMED Holdings, Inc., is a Fort Worth, Texas-based global
diversified holding company that owns and operates businesses in a
variety of industries including energy, oil and gas, aerospace,
food and beverage, and mining.
UNIVERSAL HEALTH: BankUnited Drops Bid to Enforce Voting Rights
---------------------------------------------------------------
BankUnited, N.A., as the administrative agent for secured parties
currently owed in excess of $36.5 million in outstanding note
obligations by Universal Health Care Group, Inc., has withdrawn
its agreed ex-parte motion for relief to enforce voting rights
over pledged equity in non-debtors Universal Health Care Insurance
Co., Inc. and Universal Health Care, Inc.
As reported in the Troubled Company Reporter on Nov. 13, 2013, the
Bankruptcy Court approved a global settlement entered among Soneet
R. Kapila, as Chapter 11 trustee for Universal Health Care Group,
Inc., debtor American Managed Care, LLC, and BankUnited, N.A., as
issuing lender and as administrative agent on behalf of a bank
group consisting of Capital Bank Financial Corp., Mercantil
Commercebank, N.A., Banco De Credito E Inversiones Miami Branch
and Israel Discount Bank.
BankUnited sought relief from the automatic stay to exercise its
security interest against a $5.8 million tax refund. Objections
were filed by the chapter 11 trustee and the Florida Department of
Financial Services as the receiver for Universal Health Care, Inc.
and Universal Health Insurance Company, Inc.
The salient terms of the settlement agreement are:
1. the Bank Group will be deemed to have allowed and valid
liens against the prepetition assets of Universal Group and AMC,
as described in the Credit Agreement, the Security Agreement, the
Pledge Agreement and the UCC-1 Financing Statements, subject to
the allowed carve-outs set forth in the Settlement Agreement.
2. The trustee, on behalf of the estate of Universal Group,
will receive these carve-outs from the liens of the Bank Group:
a. absent a separate court-approved settlement agreement with
the Florida Receiver to the contrary, the trustee will receive 30%
or an amount not to exceed $750,000 from amounts determined due to
BankUnited or the trustee from the $5.8 million Tax Refund.
b. absent a separate court-approved settlement agreement with
the Florida Receiver to the contrary, the trustee will receive 30%
of amounts recovered from the Florida Receiver, with a cap of
$3 million on the amounts recoverable from the $11 million Tax
Refund by BankUnited or the trustee.
c. the trustee will receive 15% of any surplus attributable
to Universal Group's ownership of each of the Regulated Entities.
d. the trustee will receive 5% of any deposit recoveries from
Carepoint/Citrus and will share equally with BankUnited on any net
recoveries obtained as a result of any consequential damages
recovered.
3. BankUnited and the Bank Group will waive liens, if any
against any debtor in possession account maintained by the Trustee
for Universal Group and for AMC.
4. BankUnited will be entitled to stay relief to exercise set
off rights against accounts maintained in the name of Universal
Group, and frozen during the Chapter 11 case, except that
BankUnited will deliver to the trustee $35,000 from those accounts
pursuant to the Bank Group's prior consent to allow the Trustee to
use cash collateral.
A copy of the terms of the settlement is available for free at
http://bankrupt.com/misc/UniversalHealth_Settlement.pdf
About Universal Health Care
Universal Health Care Group, Inc., owns an insurance company and
three health-maintenance organizations that provide managed care
services for government sponsored health care programs, focusing
on Medicare and Medicaid.
Universal Health was founded in 2002 by Dr. A.K. Desai and grew
its operations of offering Medicare plans to more than 37,000
members to over 20 states.
Universal Health filed a Chapter 11 bankruptcy protection (Bankr.
M.D. Fla. Case No. 13-01520) on Feb. 6, 2013, after Florida
regulators moved to put two of the company's subsidiaries in
receivership. Universal Health Care estimated assets of up to
$100 million and debt of less than $50 million in court filings in
Tampa, Florida.
Harley E. Riedel, Esq., at Stichter Riedel Blain & Prosser, in
Tampa, serves as counsel to the Debtor.
Soneet R. Kapila has been appointed the Chapter 11 Trustee in the
Debtor's case. He is represented by:
Roberta A. Colton, Esq.
TRENAM, KEMKER, SCHARF, BARKIN, FRYE, O'NEILL & MULLIS, PA
101 E. Kennedy Blvd., Suite 2700
Tampa, FL 33602
Tel: (813) 223-7474
Fax: (813) 229-6553
E-mail: rcolton@trenam.com
Dennis S. Jennis, Esq., and Jennis & Bowen, P.L., serve as special
conflicts counsel and E-Hounds, Inc. serves as a forensic imaging
consultant to the Chapter 11 trustee.
UNIVERSITY GENERAL: To Present at Sidoti Conference on Jan. 13
--------------------------------------------------------------
University General Health System, Inc., will be presenting at
Sidoti & Company's Eighth Semiannual Micro-Cap Conference on
Monday, Jan. 13, 2014. The conference will be held at the Grand
Hyatt Hotel in New York City.
The presentation by Donald Sapaugh, President, is scheduled for
11:20 a.m. Eastern Standard Time. Mr. Sapaugh will be available
during the day for one-on-one meetings. Investors interested in
arranging one-on-one meetings should contact their Sidoti
representative.
About University General
University General Health System, Inc., located in Houston, Texas,
is a diversified, integrated multi-specialty health care provider
that delivers concierge physician- and patient-oriented services.
UGHS currently operates one hospital and two ambulatory surgical
centers in the Houston area. It also owns a revenue management
company, a hospitality service provider and facility management
company, three senior living facilities and manages six senior
living facilities.
University General incurred a net loss attributable to common
shareholders of $3.97 million on $113.22 million of total revenues
for the year ended Dec. 31, 2012, as compared with a net loss
attributable to common shareholders of $2.57 million on $71.17
million of total revenues during the prior year.
The Company's balance sheet at Dec. 31, 2012, showed $174.84
million in total assets, $161.55 million in total liabilities,
$2.56 million in series C, convertible preferred stock, and $10.71
million in total equity.
Moss, Krusick & Associates, LLC, in Winter Park, Florida, issued a
"going concern" qualification on the consolidated financial
statements for the year ended Dec. 31, 2012. The independent
auditors noted that the Company has negative working capital and
relative low levels of cash and cash equivalents. These
conditions raise substantial doubt about its ability to continue
as a going concern.
VELTI INC: Asgaard Capital OK'd as Creditors' Panel Advisor
-----------------------------------------------------------
The Hon. Peter J. Walsh of the U.S. Bankruptcy Court for the
District of Delaware has granted the Official Committee of
Unsecured Creditors of Velti, Inc., and its debtor-affiliates
permission to retain Asgaard Capital LLC as financial advisor to
the Committee, nunc pro tunc to Nov. 13, 2013.
As reported by the Troubled Company Reporter on Dec. 16, 2013, the
Committee requires Asgaard Capital to, among other things, review
and evaluate the assets and liabilities of the Debtors and assess
the Debtors' existing operations.
About Velti Inc.
Velti Inc., a provider of technology for marketing on mobile
devices, sought Chapter 11 protection (Bankr. D. Del. Case No.
13-12878) on Nov. 4, 2013.
Velti Inc., a San Francisco-based unit of Velti Plc, listed assets
of as much $50 million and debt of as much as $100 million. Its
Air2Web Inc. unit, based in Atlanta, also sought creditor
protection.
The parent, Dublin, Ireland-based Velti Plc, which trades on the
Nasdaq Stock Market, isn't part of the bankruptcy process.
Operations in the U.K., Greece, India, China, Brazil, Russia, the
United Arab Emirates and elsewhere outside the U.S. didn't seek
protection and business there will continue as usual.
The Debtors are represented by attorneys Stuart M. Brown, Esq., at
DLA Piper LLP (US), in Wilmington, Delaware; and Richard A.
Chesley, Esq., Matthew M. Murphy, Esq., and Chun I. Jang, Esq., at
DLA Piper LLP (US), in Chicago, Illinois. The Debtors have also
tapped Jefferies LLC as investment banker, Sitrick Brincko Group
LLC, as corporate communications consultants, and BMC Group, Inc.,
as claims and noticing agent.
U.S. Bank, National Association, as administrative agent for GSO
Credit-A Partners, LP, GSO Palmetto Opportunistic Investment
Partners LP and GSO Coastline Partners LP, extended $25 million of
postpetition financing to the Debtors. The DIP Lenders, which are
also the Prepetition Lenders, are represented by Sandy Qusba,
Esq., and Hyang-Sook Lee, Esq., at Simpson Thacher & Bartlett LLP,
in New York.
An Official Committee of Unsecured Creditors has been appointed in
the Debtors' cases. The Committee has tapped McGuireWoods LLP as
lead counsel and Morris, Nichols, Arsht & Tunnell LLP as Delaware
co-counsel. Asgaard Capital LLC serves as financial advisor to
the Committee. Capstone Advisory Group LLC serves as consultant.
VELTI INC: Capstone Advisory OK'd as Creditors' Panel Consultant
----------------------------------------------------------------
The Official Committee of Unsecured Creditors of Velti, Inc., and
its debtor-affiliates has obtained authorization from the Hon.
Peter J. Walsh of the U.S. Bankruptcy Court for the District of
Delaware to retain Capstone Advisory Group LLC as consultant to
the Committee, nunc pro tunc to Nov. 18, 2013.
As reported by the Troubled Company Reporter on Dec. 17, 2013, the
Committee requires Capstone Advisory to, among other things,
assist the Committee with the Potential DIP Financing Transaction,
including identifying alternative sources of Debtor in Possession
Financing for the Debtors from financing sources other than GSO
Capital Partners, its subsidiaries or affiliates.
About Velti Inc.
Velti Inc., a provider of technology for marketing on mobile
devices, sought Chapter 11 protection (Bankr. D. Del. Case No.
13-12878) on Nov. 4, 2013.
Velti Inc., a San Francisco-based unit of Velti Plc, listed assets
of as much $50 million and debt of as much as $100 million. Its
Air2Web Inc. unit, based in Atlanta, also sought creditor
protection.
The parent, Dublin, Ireland-based Velti Plc, which trades on the
Nasdaq Stock Market, isn't part of the bankruptcy process.
Operations in the U.K., Greece, India, China, Brazil, Russia, the
United Arab Emirates and elsewhere outside the U.S. didn't seek
protection and business there will continue as usual.
The Debtors are represented by attorneys Stuart M. Brown, Esq., at
DLA Piper LLP (US), in Wilmington, Delaware; and Richard A.
Chesley, Esq., Matthew M. Murphy, Esq., and Chun I. Jang, Esq., at
DLA Piper LLP (US), in Chicago, Illinois. The Debtors have also
tapped Jefferies LLC as investment banker, Sitrick Brincko Group
LLC, as corporate communications consultants, and BMC Group, Inc.,
as claims and noticing agent.
U.S. Bank, National Association, as administrative agent for GSO
Credit-A Partners, LP, GSO Palmetto Opportunistic Investment
Partners LP and GSO Coastline Partners LP, extended $25 million of
postpetition financing to the Debtors. The DIP Lenders, which are
also the Prepetition Lenders, are represented by Sandy Qusba,
Esq., and Hyang-Sook Lee, Esq., at Simpson Thacher & Bartlett LLP,
in New York.
An Official Committee of Unsecured Creditors has been appointed in
the Debtors' cases. The Committee has tapped McGuireWoods LLP as
lead counsel and Morris, Nichols, Arsht & Tunnell LLP as Delaware
co-counsel. Asgaard Capital LLC serves as financial advisor to
the Committee. Capstone Advisory Group LLC serves as consultant.
VELTI INC: Has Court's Nod to Hire DLA Piper LLP as Counsel
-----------------------------------------------------------
Velti, Inc., and its debtor-affiliates obtained permission from
the Hon. Peter J. Walsh of the U.S. Bankruptcy Court for the
District of Delaware to employ DLA Piper LLP as counsel, nunc pro
tunc to Nov. 4, 2013.
As reported by the Troubled Company Reporter on Dec. 13, 2013, the
Debtors require DLA Piper to, among other things, prepare on
behalf of the Debtors all necessary and appropriate applications,
motions, proposed orders, other pleadings, notices, schedules and
other documents, and reviewing all financial and other reports to
be filed in these Chapter 11 cases.
About Velti Inc.
Velti Inc., a provider of technology for marketing on mobile
devices, sought Chapter 11 protection (Bankr. D. Del. Case No.
13-12878) on Nov. 4, 2013.
Velti Inc., a San Francisco-based unit of Velti Plc, listed assets
of as much $50 million and debt of as much as $100 million. Its
Air2Web Inc. unit, based in Atlanta, also sought creditor
protection.
The parent, Dublin, Ireland-based Velti Plc, which trades on the
Nasdaq Stock Market, isn't part of the bankruptcy process.
Operations in the U.K., Greece, India, China, Brazil, Russia, the
United Arab Emirates and elsewhere outside the U.S. didn't seek
protection and business there will continue as usual.
The Debtors have also tapped Jefferies LLC as investment banker,
Sitrick Brincko Group LLC, as corporate communications
consultants, and BMC Group, Inc., as claims and noticing agent.
U.S. Bank, National Association, as administrative agent for GSO
Credit-A Partners, LP, GSO Palmetto Opportunistic Investment
Partners LP and GSO Coastline Partners LP, extended $25 million of
postpetition financing to the Debtors. The DIP Lenders, which are
also the Prepetition Lenders, are represented by Sandy Qusba,
Esq., and Hyang-Sook Lee, Esq., at Simpson Thacher & Bartlett LLP,
in New York.
An Official Committee of Unsecured Creditors has been appointed in
the Debtors' cases. The Committee has tapped McGuireWoods LLP as
lead counsel and Morris, Nichols, Arsht & Tunnell LLP as Delaware
co-counsel. Asgaard Capital LLC serves as financial advisor to
the Committee. Capstone Advisory Group LLC serves as consultant.
VELTI INC: Panel OK'd to Hire McGuireWoods as Lead Counsel
----------------------------------------------------------
The Hon. Peter J. Walsh of the U.S. Bankruptcy Court for the
District of Delaware has granted the Official Committee of
Unsecured Creditors of Velti, Inc., and its debtor-affiliates
authorization to retain McGuireWoods LLP as lead counsel to the
Committee, nunc pro tunc to Nov. 12, 2013.
As reported by the Troubled Company Reporter on Dec. 16, 2013,
McGuireWoods LLP will, among other things, assist, advise and
represent the Committee in analyzing the Debtors' assets and
liabilities, investigating the extent and validity of liens and
participating in and reviewing any proposed asset sales or
dispositions.
About Velti Inc.
Velti Inc., a provider of technology for marketing on mobile
devices, sought Chapter 11 protection (Bankr. D. Del. Case No.
13-12878) on Nov. 4, 2013.
Velti Inc., a San Francisco-based unit of Velti Plc, listed assets
of as much $50 million and debt of as much as $100 million. Its
Air2Web Inc. unit, based in Atlanta, also sought creditor
protection.
The parent, Dublin, Ireland-based Velti Plc, which trades on the
Nasdaq Stock Market, isn't part of the bankruptcy process.
Operations in the U.K., Greece, India, China, Brazil, Russia, the
United Arab Emirates and elsewhere outside the U.S. didn't seek
protection and business there will continue as usual.
The Debtors are represented by attorneys Stuart M. Brown, Esq., at
DLA Piper LLP (US), in Wilmington, Delaware; and Richard A.
Chesley, Esq., Matthew M. Murphy, Esq., and Chun I. Jang, Esq., at
DLA Piper LLP (US), in Chicago, Illinois. The Debtors have also
tapped Jefferies LLC as investment banker, Sitrick Brincko Group
LLC, as corporate communications consultants, and BMC Group, Inc.,
as claims and noticing agent.
U.S. Bank, National Association, as administrative agent for GSO
Credit-A Partners, LP, GSO Palmetto Opportunistic Investment
Partners LP and GSO Coastline Partners LP, extended $25 million of
postpetition financing to the Debtors. The DIP Lenders, which are
also the Prepetition Lenders, are represented by Sandy Qusba,
Esq., and Hyang-Sook Lee, Esq., at Simpson Thacher & Bartlett LLP,
in New York.
An Official Committee of Unsecured Creditors has been appointed in
the Debtors' cases. The Committee has tapped McGuireWoods LLP as
lead counsel and Morris, Nichols, Arsht & Tunnell LLP as Delaware
co-counsel. Asgaard Capital LLC serves as financial advisor to
the Committee. Capstone Advisory Group LLC serves as consultant.
VELTI INC: Panel Has OK to Hire Morris Nichols as Co-Counsel
------------------------------------------------------------
The Official Committee of Unsecured Creditors of Velti, Inc. and
its debtor-affiliates obtained authorization from the Hon. Peter
J. Walsh of the U.S. Bankruptcy Court for the District of Delaware
to retain Morris, Nichols, Arsht & Tunnell LLP as Delaware co-
counsel to the Committee, nunc pro tunc to Nov. 12, 2013.
As reported by the Troubled Company Reporter on Dec. 16, 2013,
Morris Nichols will, among other things, assist and advise the
Committee in its consultations with the Debtors relative to the
administration of these cases.
About Velti Inc.
Velti Inc., a provider of technology for marketing on mobile
devices, sought Chapter 11 protection (Bankr. D. Del. Case No.
13-12878) on Nov. 4, 2013.
Velti Inc., a San Francisco-based unit of Velti Plc, listed assets
of as much $50 million and debt of as much as $100 million. Its
Air2Web Inc. unit, based in Atlanta, also sought creditor
protection.
The parent, Dublin, Ireland-based Velti Plc, which trades on the
Nasdaq Stock Market, isn't part of the bankruptcy process.
Operations in the U.K., Greece, India, China, Brazil, Russia, the
United Arab Emirates and elsewhere outside the U.S. didn't seek
protection and business there will continue as usual.
The Debtors are represented by attorneys Stuart M. Brown, Esq., at
DLA Piper LLP (US), in Wilmington, Delaware; and Richard A.
Chesley, Esq., Matthew M. Murphy, Esq., and Chun I. Jang, Esq., at
DLA Piper LLP (US), in Chicago, Illinois. The Debtors have also
tapped Jefferies LLC as investment banker, Sitrick Brincko Group
LLC, as corporate communications consultants, and BMC Group, Inc.,
as claims and noticing agent.
U.S. Bank, National Association, as administrative agent for GSO
Credit-A Partners, LP, GSO Palmetto Opportunistic Investment
Partners LP and GSO Coastline Partners LP, extended $25 million of
postpetition financing to the Debtors. The DIP Lenders, which are
also the Prepetition Lenders, are represented by Sandy Qusba,
Esq., and Hyang-Sook Lee, Esq., at Simpson Thacher & Bartlett LLP,
in New York.
An Official Committee of Unsecured Creditors has been appointed in
the Debtors' cases. The Committee has tapped McGuireWoods LLP as
lead counsel and Morris, Nichols, Arsht & Tunnell LLP as Delaware
co-counsel. Asgaard Capital LLC serves as financial advisor to
the Committee. Capstone Advisory Group LLC serves as consultant.
VELTI INC: U.S. Trustee Objects to Deloitte FAS Hiring
------------------------------------------------------
Roberta A. DeAngelis, the U.S. Trustee for Region 3, objects to
Velti Inc., et al.'s application to employ Deloitte Financial
Advisory Services LLP as financial advisor, complaining that the
Debtors have not established that the firm is disinterested.
The U.S. Trustee asserts that insofar as one of the employees of
Deloitte, which served as chief restructuring officer of one of
the Debtors' affiliate was retained by the Debtors less than two
years before the Petition Date, both that employee and Deloitte
FAS are not disinterested and therefore not eligible to be
retained under Section 327(a) of the Bankruptcy Code.
Accordingly, the U.S. Trustee asks the U.S. Bankruptcy Court for
the District of Delaware to deny the employment application.
About Velti Inc.
Velti Inc., a provider of technology for marketing on mobile
devices, sought Chapter 11 protection (Bankr. D. Del. Case No.
13-12878) on Nov. 4, 2013.
Velti Inc., a San Francisco-based unit of Velti Plc, listed assets
of as much $50 million and debt of as much as $100 million. Its
Air2Web Inc. unit, based in Atlanta, also sought creditor
protection.
Velti Plc, which trades on the Nasdaq Stock Market, isn't part of
the bankruptcy process. Operations in the U.K., Greece, India,
China, Brazil, Russia, the United Arab Emirates and elsewhere
outside the U.S. didn't seek protection and business there will
continue as usual.
The Debtors are represented by attorneys Stuart M. Brown, Esq., at
DLA Piper LLP (US), in Wilmington, Delaware; and Richard A.
Chesley, Esq., Matthew M. Murphy, Esq., and Chun I. Jang, Esq., at
DLA Piper LLP (US), in Chicago, Illinois. The Debtors have also
tapped Jefferies LLC as investment banker, Sitrick Brincko Group
LLC, as corporate communications consultants, and BMC Group, Inc.,
as claims and noticing agent.
U.S. Bank, National Association, as administrative agent for GSO
Credit-A Partners, LP, GSO Palmetto Opportunistic Investment
Partners LP and GSO Coastline Partners LP, extended $25 million of
postpetition financing to the Debtors. The DIP Lenders, which are
also the Prepetition Lenders, are represented by Sandy Qusba,
Esq., and Hyang-Sook Lee, Esq., at Simpson Thacher & Bartlett LLP,
in New York.
An Official Committee of Unsecured Creditors has been appointed in
the Debtors' cases. The Committee has tapped McGuireWoods LLP as
lead counsel and Morris, Nichols, Arsht & Tunnell LLP as Delaware
co-counsel. Asgaard Capital LLC serves as financial advisor to
the Committee.
VERSO PAPER: S&P Lowers Corporate Credit Rating to 'CC'
-------------------------------------------------------
Standard & Poor's Ratings Services said it lowered its corporate
credit rating on Verso Paper Holdings LLC to 'CC' from 'B-'. At
the same time, S&P lowered the issue-level ratings on the
company's $396 million 8.75% senior secured notes due 2019 and
$143 million 11.375% senior subordinated notes due 2016 to 'CC'
from 'CCC'. S&P also placed the affected ratings on CreditWatch
with negative implications.
The downgrades and CreditWatch placements follow Verso's
announcement that it entered into an agreement to acquire
competitor NewPage Holdings Inc. The rating actions also follow
the company's debt exchange offers for its $396 million senior
secured notes due 2019 and its $143 million senior subordinated
notes due 2016 in which holders could receive compensation that is
substantially below original principal amount.
Both Verso and NewPage are large coated paper manufacturers.
Combined, the companies will have about $4.5 billion of sales. A
substantial portion of these sales are to catalog and magazine end
users, which S&P believes is susceptible to substitution risks due
to changing consumer preferences for electronic content.
"We expect to resolve the CreditWatch placements when the
acquisition of NewPage and the proposed debt exchange are
completed, which Verso expects will occur in the second half of
2014. We expect that we will lower the corporate credit rating to
'SD' and the ratings on the affected notes to 'D'," said Standard
& Poor's credit analyst Tobias Crabtree. "In accordance with our
criteria for exchange offers and similar restructurings, we expect
that we will raise our ratings shortly thereafter, after we
complete a forward-looking review that takes into account the
combined company's business risk and financial risk profiles,
including any benefits from the proposed debt exchange."
WORLDWIDE ENERGY: Is Hiding Deceitful Past, Creditors Say
---------------------------------------------------------
Law360 reported that creditors of bankrupt Worldwide Energy &
Manufacturing USA Inc. accused the company of hiding important
information in its reorganization plan, saying the company is
underplaying the damage caused by its founder and former chairman
including a $100,000 U.S. Securities and Exchange Commission fine.
According to the report, the unsecured creditors committee
objected in Colorado bankruptcy court to the company's most recent
disclosure statement and reorganization plan, saying WEMU's
disclosures gloss over significant aspects of the company's past
deceitful behavior.
Littleton, Colorado-based Worldwide Energy & Manufacturing USA
Inc., sought protection under Chapter 11 of the Bankruptcy Code on
July 5, 2013 (Case No. 13-21577, Bankr. D. Colo.). The case is
assigned to Judge Michael E. Romero. The Debtor's counsel is Lee
M. Kutner, Esq., at KUTNER MILLER BRINEN, P.C., in Denver,
Colorado.
YRC WORLDWIDE: Teamsters Reject Contract Extension
--------------------------------------------------
Tess Stynes and John Kell, writing for The Wall Street Journal,
reported that YRC Worldwide Inc. failed to win a contract
extension from the International Brotherhood of Teamsters,
weakening the struggling trucking company's prospects of
completing a financing deal.
According to the report, shares slumped 13% to $13.66 in after-
hours trading on Jan. 9.
The contract extension was rejected by 61% of the voting members,
while 39% supported the proposal, the union said, the report
cited.
YRC's shares had already slid 16% in Jan. 9's regular session
after a Jan. 8 posting on the website of Teamsters for a
Democratic Union, a group unrelated to the International
Brotherhood of Teamsters, had raised concerns that the contract
extension would be defeated, the report said.
"Our members have made huge sacrifices to keep this company alive
and a majority made the decision not to sacrifice anymore," the
report cited Tyson Johnson, co-chairman of a Teamsters negotiating
committee.
About YRC Worldwide
Headquartered in Overland Park, Kan., YRC Worldwide Inc. (NASDAQ:
YRCW) -- http://www.yrcw.com/-- is a holding company that offers
its customers a wide range of transportation services. These
services include global, national and regional transportation as
well as logistics.
For the year ended Dec. 31, 2012, the Company incurred a net loss
of $136.5 million on $4.85 billion of operating revenue, as
compared with a net loss of $354.4 million on $4.86 billion of
operating revenue during the prior year. As of Sept. 30, 2013,
the Company had $2.13 billion in total assets, $2.79 billion in
total liabilities and a $665.8 million total shareholders'
deficit.
* * *
As reported by the TCR on Aug. 2, 2013, Moody's Investors Service
affirmed the rating of YRC Worldwide, Inc., corporate family
rating at Caa3. The ratings outlook is has been changed to
positive from stable.
"The positive ratings outlook recognizes the important progress
that YRCW has made in restoring positive operating margins through
implementation of yield management initiatives, during a period of
stabilizing demand in the less than truckload ('LTL') segment,"
the report stated.
In August 2011, Standard & Poor's Ratings Services raised its
corporate credit rating on YRC Worldwide Inc. to 'CCC' from 'SD'
(selective default), after YRC completed a financial
restructuring. Outlook is stable.
* Ch. 13 Bars Tax Deed Owner's Property Claim, 7th Circ. Says
-------------------------------------------------------------
Law360 reported that the property interests of a tax deed
purchaser can be discharged in a property owner's Chapter 13
bankruptcy, the Seventh Circuit said, leaving Illinois' tax deed
holders scrambling to figure out the ramifications.
According to the report, in a unanimous opinion, a three-judge
panel said that after property owner and delinquent tax filer Todd
LaMont entered bankruptcy, Lyubomir Alexandrov's tax deed claim
was properly stayed under bankruptcy civil procedure rules and
LaMont was free to work out tax payments in his bankruptcy plan.
The case is Lyubomir Alexandrov v. Todd LaMont, et al., Case No.
13-1187 (7th Cir.).
* Court Clarifies Rules Governing Pre-Judgment Interest
-------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the U.S. Court of Appeals for the Second Circuit rled
that when a bankruptcy trustee wins a judgment, the right to pre-
judgment interest is governed by state law if the claim is
governed by state law.
According to the report, the Manhattan-based federal appeals
court, in an opinion by U.S. Circuit Judge Rosemary S. Pooler,
said the Second Circuit hadn't previously ruled on the question of
whether state or federal law governs the right to pre-judgment
interest. She said lower courts in the circuit were correct in
saying pre-judgment interest on claims under federal law are
governed by federal rules.
Judge Pooler sent the case back to the district judge because he
didn't say whether he exercised discretion under New York law in
imposing pre-judgment interest because it was a claim in equity,
not a contract claim where the right to interest is automatic, the
report related.
The case is Kittay v. Korff (In re Palermo), 11-848, U.S. Court of
Appeals for the Second Circuit (Manhattan).
* Jury Won't See Cohen Deposition in SAC Insider Trial
------------------------------------------------------
Christopher M. Matthews, writing for The Wall Street Journal,
reported that a deposition by Steven A. Cohen won't have a place
in the insider trading trial of one of the hedge fund boss's
former portfolio managers.
According to the report, lawyers defending Mathew Martoma had
hoped to use the words of the SAC Capital Advisors LP founder to
help fend off insider trading charges. The trades at the heart of
the criminal case against Mr. Martoma are some of the same ones
the Securities and Exchange Commission cites in its separate
lawsuit against Mr. Cohen, who is accused of failing to adequately
supervise traders at his firm, including Mr. Martoma.
Mr. Martoma's lawyers said Mr. Cohen's 2012 deposition showed that
the billionaire hedge fund founder based trades in one of the
companies at issue -- Elan Corp. -- on recommendations from
another SAC trader, the report related. But a federal judge ruled
Wednesday that the deposition in the civil case couldn't be shared
with jurors in a criminal trial.
In a 13-page order, Judge Paul Gardephe said the federal
prosecutors trying the criminal case weren't involved in the
deposition, and the SEC isn't involved in Mr. Martoma's trial, the
report further related. The judge also said the transcripts --
according to his reading -- has Mr. Cohen indicating that Mr.
Martoma had a "significant role" in his trades on Elan.
Mr. Cohen hasn't been accused of any criminal wrongdoing, the
report noted. A spokesman for Mr. Cohen and SAC declined to
comment.
* Tax Certificates Are Secured Claims, Appeals Court Says
---------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the U.S. Court of Appeals for the Seventh Circuit
ruled that someone who buys a tax certificate when a property
owner fails to pay real estate taxes has a secured claim that can
be modified under the owner's Chapter 13 plan.
The report related that just before the property owner filed in
Chapter 13, someone bought from the municipality what Illinois law
calls a Certificate of Purchase. If the owner doesn't pay the
taxes within two years, the purchaser of the certificate is
entitled to take title to the property.
Writing for the three-judge Chicago appeals panel, U.S. Circuit
judge Daniel A. Manion agreed with the lower courts, comparing the
tax certificates to a non-recourse mortgage, which was held by the
U.S. Supreme Court to represent a claim, the report further
related.
According to Mr. Rochelle, Judge Manion's opinion is a survey of
what constitutes a claim under the Bankruptcy Code. He
characterized tax certificates as a "unique statutory creature."
Although they don't represent rights to payment under Illinois
law, that doesn't control the Bankruptcy Code analysis of what
represents a right to payment, which equates with a claim.
The judge said the tax certificates were either a right to payment
or an equitable remedy, which are claims that can be dealt with in
a plan, Mr. Rochelle pointed out.
The case is In re LaMont, 13-1187, U.S. Court of Appeals for the
Seventh Circuit (Chicago).
* California Pension Reformer Disputes Write-up of Initiative
-------------------------------------------------------------
Jim Christie, writing for Reuters, reported that a controversial
campaign to reform California's public pensions faces an uncertain
future after the state attorney general chose what the measure's
backers consider to be unfriendly language for their proposed
ballot initiative.
According to the report, Chuck Reed, the mayor of San Jose and the
driving force behind the proposal, told Reuters he will confer
with supporters on whether to press ahead with trying to get the
overhaul before voters later this year, and he might sue over
Attorney General Kamala Harris' wording for the ballot. A decision
should be made by the end of January, Reed said.
"It's inaccurate and that's a bit of a problem," Reed said of the
attorney general's ballot summary, the report cited. The attorney
general's office is tasked with writing the title and summary,
limited to 100 words, for state ballot initiatives.
Reed is particularly upset by the ballot summary's first sentence,
which includes examples of politically popular public-sector
workers, the report said. It says his measure "Eliminates
constitutional protections for vested pension and retiree
healthcare benefits for current public employees, including
teachers, nurses, and peace officers, for future work performed."
* Federal Probe Targets Banks over Bonds
----------------------------------------
Jean Eaglesham, writing for The Wall Street Journal, reported that
federal investigators are probing whether a number of Wall Street
banks cheated clients in the years following the financial crisis
by deliberately mispricing a type of mortgage bond that was
central to the economic turmoil, according to people close to the
inquiry.
The report related that the investigation is a potential blow to
the banks, who are just starting to move on from years of intense
scrutiny tied to their roles in the crisis.
Wall Street's conduct leading up to and during the market
convulsions of 2008 already has been closely examined by
authorities, the report said. The new probe by regulators is the
first known wide-ranging examination of mortgage-bond sales by
banks in the years that followed.
In that postcrisis period, when the economy remained shaky and
many markets weren't yet active again, banks still held on their
books billions of dollars in hard-to-price assets, the report
added. Regulators are seeking information about whether banks
made significant misrepresentations about some of those assets to
make deals.
The banks under scrutiny include Barclays PLC, Citigroup Inc.,
Deutsche Bank AG, Goldman Sachs Group Inc., J.P. Morgan Chase &
Co., Morgan Stanley, Royal Bank of Scotland Group PLC, and UBS AG,
the report said, citing one of the people close to the probe.
* Few Maturities, Strong Demand Mean Few Defaults, Moody's Says
---------------------------------------------------------------
There will be no significant increase in major corporate
bankruptcies this year, given strong liquidity among junk-rated
companies, Bill Rochelle, the bankruptcy columnist for Bloomberg
News, reports, citing Moody's Investors Service.
Moody's liquidity-stress index ended December at 4.2 percent, down
from 4.3 percent at the close of November, Mr. Rochelle pointed
out. While the index has climbed from a record low of 2.8 percent
in April, it remains below the long-term average of 7.1 percent,
Moody's said.
Moody's, according to Mr. Rochelle, predicted that defaults among
junk-rated companies will decline to 1.8 percent by June from 2.4
percent in November, before rising to 2.7 percent by November.
Maturing debt can't touch off significant numbers of defaults
because there are "light debt maturities in the next two years,"
Moody's said. Moreover, debt markets are "accommodating," Moody's
said, as shown by the 9 percent increase in junk-debt issuances in
2013.
* JPMorgan Fails to Dismiss California Debt Collection Case
-----------------------------------------------------------
Edvard Pettersson, writing for Bloomberg News, reported that
California Superior Court Judge Jane L. Johnson in Los Angeles
rejected JPMorgan Chase & Co.'s argument that the California
attorney general's unfair competition claims were precluded by
California legal authority.
California Attorney General Kamala Harris filed a lawsuit against
JPMorgan alleging that the bank tried to collect debt from about
100,000 credit-card borrowers. The Attorney General further
alleged that JPMorgan engaged in "wide-spread and illegal robo-
signing" and other unlawful practices against credit-card
borrowers.
The state seeks civil penalties of $2,500 for each violation of
California law and an additional $2,500 for each violation against
a senior citizen or a disabled person, the Bloomberg report said.
The case is People v. JPMorgan Chase & Co., BC508466, California
Superior Court (Los Angeles County).
* U.S. Bank Loan Growth Driven by Smaller Institutions, Fitch Says
------------------------------------------------------------------
Smaller U.S. banks appear to have been more aggressive lenders
over the last twelve months and may be more vulnerable to asset
quality deterioration in a rising rate environment, according to
Fitch Ratings. Loan growth trends among larger and smaller U.S.
banks noticeably diverged in 2013. Loan books were broadly stable
at the 25 largest institutions in 2013 while the small banks group
grew loans by 4.8%, according to recently released Fed data.
"We believe smaller banks have been particularly aggressive with
commercial and industrial (C&I) loans, which saw growth exceed 8%
in 2013, or almost one third of the $115 billion loan book growth
for small banks," the date said.
"Signs of overheating continue in bank C&I lending. Fed officer
surveys have pointed toward more lax standards and pricing on
these loans, as did this year's interagency loan review of shared
national credits. Furthermore, we primarily see smaller banks as
price-takers and term-takers and likely to accept weaker loan
covenants. However, we believe some Top 25 banks could also be
sacrificing loan pricing. Unlike the smaller banks, the larger
banks typically offer multiple services to their customers that
compensate for the competitive pricing. We do not envisage direct
rating implications for most banks at this time from near-term C&I
performance."
"Real estate loan growth of 4% for smaller banks was primarily
paced by expansion in commercial real estate lending, which was up
over 6% year-over-year (yoy) for the group. While not broken out
in the weekly aggregate Fed data, we believe that smaller banks
have increased their holdings of loans secured by multifamily and
office properties. These may be more exposed to rising interest
rates, especially if low hurdle rates were used for underwriting.
The group's level of closed-end residential loans bumped up over
the past year (at just 2%), potentially pointing toward smaller
banks' willingness to extend on-balance-sheet duration to stave
off near term margin compression."
"Consumer loans also expanded in 2013 even with the continued
deleveraging of U.S. consumers. The aggregate Fed data shows a
net yoy decline in credit card outstandings on both groups'
balance sheets. However, growth of 5% and 11% for the large bank
and small bank group respectively in "other consumer loans" more
than outpaced the shrinkage of card balances. This loan category
is primarily made up student and auto loans. Fitch believes the
auto loan space has also experienced loosening underwriting
standards over the past year."
"The top 25 banks saw a shift away from real estate lending and
into C&I and other loans, but no net increase in overall loan book
in 2013.This could be for a variety of reasons, including
increased regulatory scrutiny over consumer loan products as well
as the need to wind down sizable legacy portfolios."
"In aggregate, U.S. bank loan growth in 2013 was muted at 1.9%,
down from around 4.5% in 2012, but in line our 2013 GDP
expectation of 1.7%. Fitch expects loan demand to stay muted
against the backdrop of modest GDP growth. This highlights the
challenges for revenue growth in the weak economic recovery,
particularly as mortgage refinancings have dropped with the pickup
in long-term rates in May 2013. Banks are likely to focus
primarily on levers they can control, such as expenses, to offset
net income pressures."
* K.K.R. Raises $2 Billion Credit Fund
--------------------------------------
William Alden, writing for The New York Times' DealBook, reported
that Kohlberg Kravis Roberts & Company is expanding its business
of investing in distressed debt, with a new $2 billion fund.
According to the report, the big investment firm said on Jan. 9
that the amount of money raised for the fund was double the
initial goal of $1 billion, reflecting investors' confidence in
K.K.R.'s ability to identify debt investments at bargain prices.
The fund, intended for so-called special situations investments,
began soliciting money from outside investors in 2012.
The fresh pool of capital underscores the diversity of businesses
housed within K.K.R., a firm best known for its private equity
buyouts, the report related. The special situations business,
which started in 2010, has now grown to about $4 billion in assets
under management, the firm said.
It is part of K.K.R.'s $20.9 billion credit business, which is
expected to swell to about $29 billion after the recent
acquisition of Avoca Capital, a European debt investment firm, the
report further related. Over all, K.K.R., led by the cousins
Henry R. Kravis and George R. Roberts, had $90.2 billion of assets
under management as of Sept. 30.
"We are pleased we were able to attract such a diverse mix of new
and existing K.K.R. investors to the fund and the strategy," Jamie
M. Weinstein, the firm's co-head of special situations, said in a
statement, the report cited. "We are very optimistic about the
global opportunity set and continue to find attractive ways to put
capital to work."
* BOOK REVIEW: The Phoenix Effect: Nine Revitalizing Strategies
No Business Can Do Without
---------------------------------------------------------------
Authors: Carter Pate and Harlann Platt
Publisher: John Wiley & Sons, Inc.
Softcover: 244 Pages
List Price: $27.95
Review by Gail Owens Hoelscher
Buy a copy for yourself and one for a colleague on-line at
http://amazon.com/exec/obidos/ASIN/0471062626/internetbankrupt
Think of all the managers of faltering companies who dream of
watching those companies rise from the ashes all around them!
With a record number of companies failing in 2001, and another
record-setting year expected for 2002, there are a lot of ashes
from which to rise these days.
Carter Pate and Harlan Platt highly value strong leadership able
to sharpen a company's focus and show the way to the future.
They believe that all too often, appropriate actions required to
improve organizations are overlooked because upper management
either isn't aware of the seriousness of the issues they face or
they don't know where to turn for accurate information to best
address their concerns. In the Phoenix Effect, the authors
present their ideas to "confront, comprehend, and conquer a
company's ills, big and small."
These ideas are grouped into nine steps: (i) Find out whether
the company needs a tune-up, a turnaround, or crisis management.
Locate the source of "the pain." (ii) Analyze the true scope of
the company's operations. Decide whether to stay in the same
businesses, withdraw from existing businesses, or enter new
ones. (iii) Hold the company to its mission statement. If it
strives to be "the most environmentally friendly." Figure out
how. (iv) Manage scale. Should the company grow, stay the same
size, or shrink? (v) Determine debt obligations and work toward
debt relief. (vi) Get the most from the company's assets.
Eliminate superfluous assets and evaluate underused assets.
(vii) Get the most from the company's employees. Increase output
and lower workforce costs. (viii) Get the most from the
company's products. Turn out products that are developed and
marketed to fill actual, current customer needs. (ix) Produce
the product. Search for alternate ways to create the product:
owning or leasing facilities, outsourcing, etc.
The authors believe that "how you're doing is where you're
going." They assert that the "one fundamental source of life in
companies, as in people,.is the capacity for self-renewal, the
ability to excite your team for game after game. to go for broke
season after season." This ability can come from "(g)enetics,
charisma, sheer luck, stock options - all crucial, yes, but the
best renewal insurance is a leader who always knows exactly how
his or her company is doing."
There are a lot of books written on this topic. Pate and Platt
successfully bridge the gap between overgeneralization and too
detail. They are equally adept at advising on how to go about
determining a business's scope and arguing for Monday rather
than Friday for implementing layoffs. They don't dwell on sappy
motivational techniques. They don't condescend to the reader or
depend too much on folksy vernacular and clich,. Their message
is clear: your company's phoenix, too, can rise from its ashes.
* Carter Pate is a well known turnaround expert at
PricewaterhouseCoopers with more than 20 years experience
providing strategic consulting and implementation strategies.
* Harlan Platt is a professor of finance at Northeastern
University and author of the book Principles of Corporate
Renewal.
*********
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 by e-mail.
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 the nation's bankruptcy courts. The
list includes links to freely downloadable of these small-dollar
petitions in Acrobat PDF documents.
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.
*********
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, 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 2014. 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 ***