/raid1/www/Hosts/bankrupt/TCR_Public/140124.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 24, 2014, Vol. 18, No. 23
Headlines
2279-2283 THIRD: Judge Confirms Chapter 11 Reorganization Plan
261 EAST: Cohen Seglias to Work on Hermes Capital Claims Dispute
AFFINIA GROUP: Moody's Keeps B3 CFR Over Global Chassis Unit Sale
AMERICAN DENTAL: S&P Affirms 'B-' Loan Rating Over $15MM Add-On
ARMORWORKS ENTERPRISES: Allowed to Proceed with Feb. 21 Auction
ARTEL LLC: Moody's Lowers Corporate Family Rating to 'Caa1'
ATI ENTERPRISES: Files for Bankruptcy After Student-Aid Probe
AURA SYSTEMS: Incurs $2.6 Million Net Loss in Nov. 30 Quarter
BDF ACQUISITION: Moody's Assigns First Time B3 Corp. Family Rating
BDF ACQUISITION: S&P Assigns 'B' CCR & Rates $160MM Term Loan 'B'
BEACON ENTERPRISE: Michael Palleschi Named CEO and COO
BENTLEY PREMIER: Ch. 11 Trustee Wins Approval of Deal With Lenders
BENTLEY PREMIER: Opposes Bid to Reconsider Cash Collateral Order
BISHOP OF STOCKTON: Proposes to Pay Employee Obligations
BISHOP OF STOCKTON: Seeks Injunction Against Utilities
CATASYS INC: Files Copy of Investor Presentation with SEC
CENTURYTOUCH LTD: Bongiovanni & Assocs. Raises Going Concern Doubt
CENTURYTOUCH LTD: Posts $61K Net Loss in Qtr. Ended Sept. 30, 2013
CEREPLAST INC: Defaults Under Loan Agreement with Horizon
CERIDIAN CORP: Moody's Retains B3 CFR Over Truckstop Suit MOU
CHARTER COMMUNICATIONS: Investor Wants Time Warner Cable to Talk
CHINA TELETECH: Pays $50,000 Settlement to Enable Funds
CLEANTECH INNOVATIONS: Files Late Form 10-Qs for 2012 and 2013
CLIPPER ACQUISITIONS: S&P Rates Proposed $401MM Secured Debt 'BB+'
CLUB AT SHENANDOAH SPRINGS: Says GE Protected by Equity Cushion
CONDOR DEVELOPMENT: Gets Partial Approval on Amended Plan Outline
DETROIT, MI: Syncora Appeals from Bankruptcy Loan Approval
DETROIT, MI: Gets $350 Million Pension Aid Offer From Snyder
DICKINSON COUNTY HEALTHCARE: Moody's Lowers LT Bond Rating to Ba2
DISH NETWORK: Fitch Affirms BB- Issuer Default Rating, Outlook Neg
DOTS LLC: Proposes Donlin Recano as Claims Agent
DOTS LLC: Taps PwC as Financial Advisor and Investment Banker
DOTS LLC: Proposes Lowenstein Sandler as Bankruptcy Counsel
DOTS LLC: Has $36 Million DIP Financing From Salus, IPC
EASTERN HILLS: Yaquinto Named Chapter 11 Trustee
EDISON MISSION: Peabody Wants $45-Mil. for Assumption of MWG Pact
EDISON MISSION: USDA Says Cooperative Agreement Can't Be Assumed
EXGEN RENEWABLES I: Moody's Rates $300MM First Lien Loan 'Ba3'
FINJAN HOLDINGS: 4th Amendment to 21.5MM Shares Resale Prospectus
GMX RESOURCES: First Amended Joint Plan Confirmed
HEALTHWAREHOUSE.COM INC: Llyod Miller Stake at 8.1% as of Jan. 17
HEALTHWAREHOUSE.COM INC: Todd Hixon Stake at 6.8% as of Dec. 13
HEALTHWAREHOUSE.COM INC: Karen Singer Stake at 8.1% as of Jan. 17
HELIA TEC: HSC Seeks to Dismiss Chapter 11 Case
ID PERFUMES: COO Rudford Hamon Resigns for Personal Reasons
IKARIA INC: S&P Affirms 'B-' CCR Over Madison Dearborn Deal
INTERMETRO COMMUNICATIONS: Sells 501,000 Preferred Shares
JEH COMPANY: Taps Randy Rabeck as Consultant
LAKE PLEASANT: Court Entered Final Decree Closing Bankruptcy Case
LEHMAN BROTHERS: EFETnet Bid for Late Claim Filing Denied
LEHMAN BROTHERS: Hubbard & Reed Seeks $17.1MM for July-Nov. Work
LEHMAN BROTHERS: Inks Deal to Eliminate Claims Duplication
LEHMAN BROTHERS: Judge Approves NUFIC Claims Settlement
LEHMAN BROTHERS: Judge Approves Israel Discount Bank Setoff
LENOVO GROUP: Strikes $2.3B Deal For IBM Server Business
LEONARDO ACQUISITION: Moody's Gives B2 CFR & Rates $430MM Debt B2
LEONARDO ACQUISITION: S&P Assigns B CCR & Rates 1st Lien Debt B
LIGHTSQUARED INC: Adviser Says Ergen Associates Stymied Debt Query
LIGHTSQUARED INC: Lenders Oppose Termination of L-Band Bid
LIGHTSQUARED INC: Judge Says Dish Properly Withdrew Bid
LOS GATOS HOTEL: Can Use Cash Collateral Until May 15
LYONDELL CHEMICAL: A Safe Harbor Without Full Protection
MEDIACOM COMMUNICATIONS: S&P Raises CCR to 'BB-'; Outlook Stable
METRO AFFILIATES: Panel Can Employ Farrell Fritz as Counsel
METRO AFFILIATES: Panel Can Employ PwC as Financial Advisors
NATIONAL FINANCIAL: S&P Affirms 'B' CCR Over Madison Dearborn Deal
NAZARETH LIVING: Fitch Affirms 'BB' Rating on $7.6MM Revenue Bonds
OGX PETROLEO: Struggles to Meet Deadline for Restructuring Plan
OVERSEAS SHIPHOLDING: Taps Deloitte FAS as Accountant
PABELLON DE LA VICTORIA: Justiniano Firm Can't Step Down for Now
PAR PHARMACEUTICAL: S&P Puts 'B+' CCR on CreditWatch Negative
PARADIGM HIGH: S&P Lowers Rating on School Revenue Bonds to 'BB-'
PEM THISTLE: Files Schedules of Assets and Liabilities
PEM THISTLE: Creditors' Meeting Continued Until May 18
PEM THISTLE: UST Objects to Employment of Kalee Investments
PEM THISTLE: U.S. Trustee Unable to Appoint a Creditors Committee
PHARMEDIUM HEALTHCARE: S&P Retains 'B' CCR After Increased Loan
PITTSBURG REDEVELOPMENT: Fitch Affirms 'BB-' Rating on Tax Bonds
PLUG POWER: Capital Ventures Stake at 7.9% as of Jan. 10
PUERTO RICO: White House Not Considering Bailout, Official Says
RICEBRAN TECHNOLOGIES: Stephen Baksa Stake at 9.2% as of Dec. 18
SEVEN ARTS: Tonaquint Stake at 9.9% as of Jan. 17
SKINNY NUTRITIONAL: Court Approves Sale of Assets for $1.5-Mil.
SOUTHWIRE COMPANY: Moody's Assigns Ba2 CFR & Rates $750MM Loan Ba3
SPECIALTY PRODUCTS: PI Committee Opposes Plan Outline Approval
SPRINT CORP: Signals $165 Million Charge for Job Cuts
ST. FRANCIS' HOSPITAL: Hires CohnReznick as Financial Advisor
ST. FRANCIS' HOSPITAL: Taps Deloitte Corporate as Finance Advisor
ST. FRANCIS' HOSPITAL: Hires Nixon Peabody as Attorneys
SUMMIT ACADEMY: S&P Affirms 'BB' Rating on 2011 & 2005 Bonds
SUNSET BLUE: Case Summary & Unsecured Creditor
SURGERY CENTER: S&P Retains 'B' CCR Following $20MM Add-On
TEAM NATION: VStock Transfer is New Transfer Agent
UNI-PIXEL INC: Destrier Capital Stake at 6.1% as of Jan. 8
UNIFIED 2020: Ch.11 Trustee May Continue to Use Cash Collateral
VAULT CORPORATION: Case Summary & 6 Largest Unsecured Creditors
VITACOST.COM: Activist Says Stock Isn't so Healthy After All
WHEATLAND MARKETPLACE: Can Employ JST Law as Attorneys
WHEATLAND MARKETPLACE: Can Tap Edgemark as Property Manager
XTREME GREEN: Incurs $3.2 Million Net Loss in 2013
XTREME POWER: Case Summary & Largest Unsecured Creditors
* BOOK REVIEW: Creating Value through Corporate Restructuring:
Case Studies in Bankruptcies, Buyouts, and
Breakups
*********
2279-2283 THIRD: Judge Confirms Chapter 11 Reorganization Plan
--------------------------------------------------------------
U.S. Bankruptcy Judge James Peck confirmed the Chapter 11 plan of
reorganization proposed by 2279-2283 Third Avenue Associates LLC
to exit bankruptcy protection.
The restructuring plan contemplates the transfer of the property
commonly known as 2279-2283 Third Avenue, in New York, to LSV-JCR
124th LLC, as senior lender, in full satisfaction of its allowed
secured claims in the estimated amount of $14.5 million.
Under the plan, the senior lender will fund the distributions to
creditors, including payment of all outstanding real estate taxes
and related administrative charges claimed by the City of New York
(approx. $250,000), the fees of Third Avenue's attorney (approx.
$50,000) and an approximate 13.5% distribution to holders of
allowed unsecured claims ($100,000). The senior lender will also
waive its deficiency unsecured claim of approximately $500,000.
Class 3 (senior lender claim) and Class 4 (general unsecured
claims) are impaired and entitled to vote on the plan. Class 5
(equity interests) will receive no distributions and is therefore
deemed to have rejected the plan. Classes 1 and 2 are unimpaired
and conclusively deemed to have accepted the plan.
Earlier, the Internal Revenue of Service, which asserts an
unsecured general claim of $4,680, dropped its objection to the
confirmation of the plan.
About 2279-2273 Third Avenue
2279-2283 Third Avenue Associates LLC and 2279-2283 Third Avenue
Development LLC sought Chapter 11 bankruptcy protection (Bankr.
S.D.N.Y. Case Nos. 12-13092 and 12-13093) on July 17, 2012.
Jonathan S. Pasternak, Esq., at DelBello Donnellan Weingarten Wise
& Wiederkehr, LLP, in White Plains, N.Y., represents the Debtors
as counsel.
Third Avenue Associates owns two contiguous multi residential
buildings located at 2279-2283 Third Avenue, in New York. Third
Avenue Development is the sole member of Associates. The Property
is Associate's primary asset, while Development's membership
interests in Associates is its sole asset. Debtor 2279-2283 Third
Avenue disclosed $14,839,697 in assets and $16,973,992 in
liabilities as of the Chapter 11 filing.
The managing member of each of the Debtors is Michael Waldman. He
is also the managing member of 3210 Riverdale Associates LLC and
the managing member of the sole member of 3210 Riverdale
Development LLC, other Chapter 11 proceedings currently pending
before the SDNY Court under Case Nos. 12-11286 and 12-11109.
Third Avenue Associates obtained financing from commerce bank of
$14 million and Development obtained mezzanine financing from HSBC
Capital (USA) Inc. in the amount of $6 million. HSBC refused to
grant additional $700,000 in financing requested by the Debtor to
fund build-outs required by the Internal Revenue Service.
The Commerce note -- which was assigned to TD Bank and then to
LSV-JCR 124th LLC -- was secured by a mortgage on the Properties,
and the HSBC obligation is secured by a mortgage on Associates'
membership interest owned by Development.
The HSBC note matured in 2011 and HSBC called the loan into
default and commenced foreclosure action. The state court entered
an order appointing Steven Weiss as receiver of rents. THSBC has
assigned its mezzanine note to LCP-GC LLC.
On July 3, 2012, the Debtors and their two secured lenders, LSV-
JCR 124th LLC and LCP-GC LLC entered into a settlement that
requires the Debtors to transfer ownership of the buildings to the
secured lenders through a Chapter 11 plan.
Judge James Peck oversees the Chapter 11 cases. No trustee,
examiner or official committee has been appointed in the cases.
261 EAST: Cohen Seglias to Work on Hermes Capital Claims Dispute
----------------------------------------------------------------
261 East 78 Realty Corporation sought and obtained permission from
the Hon. Robert E. Gerber of the U.S. Bankruptcy Court for the
Southern District of New York to amend the retention orders of
Cohen Seglias Pallas Greenhall & Furman PC as special litigation
counsel.
The Debtor wants to expand the scope of services of Cohen Seglias
to include representation of the Debtor with respect to the
Debtor's objection to the claim of Hermes Capital, LLC, and the
related Fed.R.Civ.P.Rule 30 discovery in connection herewith.
On March 9, 2012, the Court entered an order authorizing the
retention of Cohen Seglias to provide the following services to
the Debtor:
(a) litigate any and all matters concerning the standing of MB
Financial Bank, N.A. ("MB") as creditor;
(b) object to Proof of Claim filed by MB;
(c) commence an adversary proceeding to, amongst others, void
the lien of MB and seek damages against MB; and
(d) perform all other legal services that may be necessary or
advisable solely with respect to the dispute of MB's
standing as a creditor.
Additionally, on May 28, 2013, the Court entered an order amending
the Retention Order to permit Cohen Seglias to provide services
relating to the Lender Liability Action against MB.
Cohen Seglias can be reached at:
Chris Georgoulis, Esq.
COHEN SEGLIAS PALLAS GREENHALL & FURMAN PC
120 Wall Street, Suite 1803
New York, NY 10005
Tel: (212) 425-7854
E-mail: cgeorgoulis@cohenseglias.com
About 261 East
261 East 78 Realty Corp. owns real property located at 261 East
78th Street, in New York. The premises consist of seven
commercial units, three of which are currently occupied. 261 East
78 Realty filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case
No. 11-15624) on Dec. 6, 2011. The case was assigned to Judge
Robert E. Gerber. The Chapter 11 filing was precipitated by the
commencement of foreclosure proceedings on the premises. The
Debtor scheduled $20.2 million in assets and $18.8 million in
liabilities. The petition was signed by Lee Moncho, president.
Jonathan S. Pasternak, Esq., at DelBello Donnellan Weingarten Wise
& Wiederkehr, LLP, in White Plains, N.Y., represents the Debtor as
counsel.
Matthew W. Olsen, Esq., at Katten Muchin Rosenman LLP, in New
York, N.Y., represents MB Financial Bank, N.A., as counsel.
The hearing to consider confirmation of the Debtor's First Amended
Plan of Reorganization dated Nov. 15, 2013, and final applications
for professional compensation and reimbursement expenses will be
held on Jan. 28, 2014 at 9:45 a.m.
Pursuant to the Plan Term Sheet, the Plan will be funded by
amounts made available by (i) the Plan Funder, of which $1,500,000
will be deposited in the Plan Fund Account and $10,700,000 will be
distributed to MB Financial Bank, N.A., on account of its Allowed
Class 2 Claim or (ii) the net proceeds of a Public Sale of the
Debtor's Property conducted pursuant to the Plan, of which
$11,000,000 will be distributed to MB on account of its Allowed
Class 2 Claim and the balance will be used to make payments due
under the Plan.
AFFINIA GROUP: Moody's Keeps B3 CFR Over Global Chassis Unit Sale
-----------------------------------------------------------------
The announcement by Affinia Group Inc. of the sale of its Global
Chassis division is viewed as a credit positive development, but
does not impact Affinia's current Moody's B3 Corporate Family
Rating and stable rating outlook. The transaction is expected to
result in a modest improvement in Debt/EBITDA for the LTM period
ending Sept. 30, 2013 to the extent net proceeds for the
transaction are used to reduce debt. Moody's will assess the
improvement in leverage over the intermediate-term resulting from
higher market penetration in South America and other operational
improvements.
Affinia Group Inc., headquartered in Ann Arbor, Michigan, is a
designer, manufacturer and distributor of aftermarket components
for passenger cars, sport utility vehicles, light, medium and
heavy trucks and off-highway vehicles. The company's product
range addresses filtration, brake and chassis markets in North and
South America, Europe and Asia. Revenues for the LTM period ending
Sept. 30, 2013 were approximately $1.5 billion. Affinia is
controlled by affiliates of The Cypress Group L.L.C.
AMERICAN DENTAL: S&P Affirms 'B-' Loan Rating Over $15MM Add-On
---------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B-' credit rating
on Wakefield, Mass.-based American Dental Partners Inc.'s (ADP)
term loan, following a $15 million add-on. S&P revised the
recovery rating to '4' from '3', indicating its expectation for
average (30% to 50%) recovery of principal in the event of payment
default.
At the same time, S&P affirmed its 'B-' corporate credit rating on
ADP. The outlook remains negative.
S&P also affirmed its 'B-' credit rating on ADP's existing senior
secured debt. S&P revised the recovery rating on this debt to '4'
from '3' because the incremental loan increased the size of this
debt class relative to S&P's estimate of ADP's value in the event
of default.
"We based our affirmation of the corporate credit rating and
unchanged outlook on our view that despite modestly improved
liquidity, the business continues to face competitive and other
challenges and cash flows are only nominally sufficient to cover
increasing debt amortization, even in our base case scenario,"
said credit analyst Gail Hessol.
S&P's negative rating outlook on ADP reflects considerable risk to
its base-case scenario, given highly competitive industry
conditions and ADP's lackluster operating trends over the past two
years. S&P sees potential for revenue growth to stall, unexpected
expenses or other developments, which would prevent EBITDA growth
and cause new borrowing to finance capital expenditures or
acquisitions.
Downside Scenario
S&P would consider lowering its rating if liquidity was impaired,
as indicated by less than 10% headroom under a loan agreement
covenant or minimal bank line availability, or if S&P concluded
ADP was unlikely to generate sufficient cash flow to meet its
increasing debt amortization schedule.
Upside Scenario
S&P could revise the outlook to stable if it is confident that
ADP's EBITDA growth trajectory, possibly supported by the
maturation of newer dental offices, will generate sufficient free
operating cash flow to cover debt service obligations, while
maintaining a covenant cushion in excess of 10%.
ARMORWORKS ENTERPRISES: Allowed to Proceed with Feb. 21 Auction
---------------------------------------------------------------
Judge Brenda Moody Whinery of the U.S. Bankruptcy Court for the
District of Arizona authorized ArmorWorks Enterprises, LLC, and
Techfiber, LLC, to sell all or substantially all of their assets
or pursue a sale of the equity of the Reorganized Debtors in
accordance with competitive bidding procedures.
Any qualified bid must be submitted on or before Feb. 7, 2014. An
auction will be held on Feb. 21 at the Phoenix office of Gallagher
& Kennedy, P.A. A status hearing regarding the auction and any
issues that arise in the sale process prior to the auction will be
held on Feb. 19. A hearing to consider approval of the sale will
be held on March 4. The deadline to serve any objection to the
proposed asset sale or equity sale will be Feb. 26.
Gray Lyon, the Independent Debtor Representative, is pursuing a
transaction for the sale of substantially all of the assets of the
Debtors, including ArmorWorks' member interests in its non-debtor
subsidiaries, or the sale of the equity in the reorganized Debtors
under the Third Amended Joint Plan of Reorganization, that will
generate the most value for creditors and equity holders.
According to papers filed in court, the Independent Debtor
Representative continues to receive and is considering indications
of interest for a potential "stalking" horse bidder prior to the
auction. The Debtors said they will file a supplement to their
motion in the event they sign an agreement with a stalking horse
bidder prior to the auction.
All objections to the bid procedures that have not been withdrawn,
waived, or settled are overruled. The United States of America,
on behalf of the Department of Defense and its agency the Defense
Logistics Agency and its components, objected to the bidding
procedures, stating that it does not object to the Debtors'
proposed sale of certain of the Debtors' fixed assets and non-DoD
contracts but does object to the proposed sale, assumption and
assignment of the executory DoD contracts in violation of federal
law and regulations.
The Government pointed out that the Debtors' motion fails to
expressly reserve the DoD's right under the Anti-Assignment Act to
bar the sale, assumption and assignment of Government contracts
absent consent from the DoD.
The Debtors are represented by John R. Clemency, Esq., Todd A.
Burgess, Esq., Lindsi M. Weber, Esq., and Janel M. Glynn, Esq., at
Gallagher & Kennedy, P.A., in Phoenix, Arizona.
The Government is represented by John S. Leonardo, U.S. Attorney
for the District of Arizona, and Denise Ann Faulk --
denise.faulk@usdoj.gov -- Assistant U.S. Attorney.
About ArmorWorks
Military armor systems provider ArmorWorks Enterprises, LLC, and
affiliate TechFiber LLC sought Chapter 11 protection (Bankr. D.
Ariz. Case Nos. 13-10332 and 13-10333) in Phoenix on June 17,
2013, along with a plan that resolves a dispute with a minority
shareholder and $3.5 million of financing that would save the
company from running out of cash.
ArmorWorks develops advanced survivability technology and designs
and manufactures armor and protective products. ArmorWorks has
produced over 1.25 million ceramic armor and composite armor
protection components for a variety of personnel armor, aircraft,
and vehicle applications.
The Debtors have tapped Todd A. Burgess, Esq., John R. Clemency,
Esq., Lindsi M. Weber, Esq., and Janel M. Glynn, Esq., at
Gallagher & Kennedy, as counsel; and MCA Financial Group, Ltd., as
financial advisor. ArmorWorks estimated $10 million to $50
million in assets and liabilities.
As of May 26, 2012, ArmorWorks had total assets of $30.9 million
and total liabilities of $12.04 million.
The Plan filed in the Debtors' cases would resolve the ongoing
dispute with C Squared by allowing ArmorWorks to redeem C
Squared's 40 percent minority interest, or alternatively, allow C
Squared to purchase the 60 percent majority interest of AWI.
ArmorWorks and TechFiber sought and obtained an order (i)
transferring the In re TechFiber, LLC chapter 11 case to the
Honorable Brenda Moody Whinery, the judge assigned to the
ArmorWorks Chapter 11 case, and (ii) authorizing the joint
administration of the Debtors' cases.
ARTEL LLC: Moody's Lowers Corporate Family Rating to 'Caa1'
-----------------------------------------------------------
Moody's Investors Service has downgraded the ratings of Artel,
LLC, including the Corporate Family Rating to Caa1 from B3. The
rating outlook is stable. The downgrade reflects revenue and
backlog declines since the rating was assigned in October 2012,
Moody's expectation that free cash flow will be limited unless
sales meaningfully rise, and increased liquidity pressure
resulting from scheduled step-up in quarterly term loan
amortization in 2014.
Ratings:
-- Corporate Family, to Caa1 from B3
-- Probability of Default, to Caa1-PD from B3-PD
-- $15 million first lien revolver due 2017, to B3, LGD3, 36%
from B2, LGD3, 38%
-- $100 million first lien term loan due 2017, to B3, LGD3, 36%
from B2, LGD3, 38%
Rating Outlook, to Stable from Negative
Ratings Rationale
The Caa1 CFR recognizes the risk that Artel's earnings and cash
flow may remain low, while principal payments scheduled across
2014-2015 under the company's first lien credit agreement as well
as take or pay requirements of the company's joint satellite
marketing agreement (JMA), rise. Further, a financial ratio
covenant breach seems likely near-term without a facility
amendment. The rating recognizes that revenue opportunities could
expand when JMA satellite capacity begins coming online (expected
in 2014).
The rating outlook is stable because the company's operational
cost restructuring initiatives have shown good progress, financial
leverage metrics are not yet very high for the rating (debt/EBITDA
5x LTM Q3-2013) and upside exists under the JMA. These factors
could help Artel obtain near-term covenant relief, secure
maneuvering room to grow backlog and ultimately meet the higher
cash requirements ahead.
A ratings upgrade would depend on higher funded backlog, and
expectation of an adequate liquidity profile. An expected free
cash flow to debt ratio of 10% in light of the term loan repayment
schedule, would likely accompany an upgrade. A rating downgrade
would follow continued covenant pressure, or sluggish growth in
either backlog or free cash flow.
Artel, LLC ("Artel") designs and delivers managed network services
involving land-based and commercial satellite capacity to U.S.
government customers. The company is majority-owned by the
financial sponsors TPG Growth, LLC and Torch Hill Investment
Partners LLC. For the twelve months ended September 30, 2013
revenues of the parent holding company, Artel Holdings, LLC, were
about $267 million.
ATI ENTERPRISES: Files for Bankruptcy After Student-Aid Probe
-------------------------------------------------------------
Michael Bathon, writing for Bloomberg News, reported that ATI
Enterprises Inc., the for-profit school that agreed to pay the
U.S. $3.7 million over allegations it submitted false claims for
student financial aid, filed to liquidate.
According to the report, the New York-based company, doing
business as ATI Career Training Center, listed debt of as much as
$500 million and assets of less than $50,000 in Chapter 7 papers
filed on Jan. 21 in U.S. Bankruptcy Court in Wilmington, Delaware.
Four affiliates also sought court protection.
ATI once ran a chain of more than 20 vocational schools with more
than 15,000 students in Texas, Oklahoma, New Mexico and Florida
that have since shut down, the report related. Whistle-blowers
sued in 2009 and 2011 accusing the company of committing fraud in
its enrollment practices.
The U.S. government intervened and filed a lawsuit claiming the
company misrepresented its job placement statistics to maintain
state accreditation and comply with federal student aid programs?
eligibility requirements, the report said.
The government also alleged that ATI enrolled ineligible students
who lacked a high school diploma or equivalent, the report added.
The company settled the lawsuit in August, according to a Justice
Department statement.
The case is In re ATI Enterprises Inc., 14-bk-10106, U.S.
Bankruptcy Court, District of Delaware (Wilmington).
AURA SYSTEMS: Incurs $2.6 Million Net Loss in Nov. 30 Quarter
-------------------------------------------------------------
Aura Systems, Inc., filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $2.58 million on $852,534 of net revenues for the three months
ended Nov. 30, 2013, as compared with a net loss of $2.15 million
on $1.21 million of net revenues for the same period a year ago.
For the nine months ended Nov. 30, 2013, the Company incurred a
net loss of $9.29 million on $2.27 million of net revenues as
compared with a net loss of $8.58 million on $2.28 million of net
revenues for the same period during the prior year.
The Company's balance sheet at Nov. 30, 2013, showed $3.20 million
in total assets, $30 million in total liabilities and a $26.79
million total stockholders' deficit.
"We had cash of approximately $58,000 and $89,000 as of November
30, 2013, and February 28, 2013, respectively. We had a working
capital deficit at November 30, 2013, and February 28, 2013 of
$25,061,693 and $21,986,904, respectively. The working capital
deficit includes notes payable and accrued interest to related
parties of $19,144,583 and $17,265,466 as of November 30, 2013 and
February 28, 2013, respectively. As of November 30, 2013, we had
accounts receivable, net of allowance for doubtful accounts, of
$572,652 compared to $279,551 as of February 28, 2013," the
Company said in the Quarterly Report.
A copy of the Form 10-Q is available for free at:
http://is.gd/9g4nGC
About Aura Systems
El Segundo, Calif.-based Aura Systems, Inc., designs, assembles
and sells the AuraGen(R), its patented mobile power generator that
uses a prime mover such as the engine of a vehicle to generate
power.
As reported in the TCR on June 18, 2013, Kabani & Company, Inc.,
in Los Angeles, California, issued a "going concern" qualification
on the consolidated financial statements for the year ended Feb.
28, 2013. The independent auditors noted that the Company has
historically incurred substantial losses from operations, and the
Company may not have sufficient working capital or outside
financing available to meet its planned operating activities over
the next 12 months. These conditions raise substantial doubt
about the Company's ability to continue as a going concern.
BDF ACQUISITION: Moody's Assigns First Time B3 Corp. Family Rating
------------------------------------------------------------------
Moody's Investors Service assigned a B3 Corporate Family Rating
and B3-PD Probability of Default Rating to BDF Acquisition Corp.
("Bob's") in connection with its proposed acquisition of Bob's
Discount Furniture, a retailer of value priced furniture. Moody's
also assigned a B2 rating to the proposed $180 million senior
secured first lien term loan and a Caa1 rating to the proposed
$80 million second lien tem loan. The ratings outlook is stable.
On Dec. 30, 2013, Bob's Discount Furniture announced that it
agreed to sell a majority stake in the company to private equity
firm Bain Capital. Proceeds from the proposed term loans along
with contributed equity capital will be used by Bob's to fund the
acquisition. The assigned ratings are subject to receipt and
review of final documentation. This is the first time rating for
Bob's.
Ratings Assigned to BDF Acquisition Corp.:
-- Corporate Family Rating at B3;
-- Probability of Default Rating at B3-PD;
-- $180 million First Lien Term Loan due 2021 at B2 (LGD3,
36%);
-- $80 million Second Lien Term Loan due 2022 at Caa1 (LGD5,
76%)
The ratings outlook is stable
Ratings Rationale
Bob's B3 Corporate Family Rating reflects the company's high pro
forma debt levels and weak credit metrics stemming from the
proposed acquisition of the company by Bain. Pro forma leverage
for the latest twelve month period ended Nov. 30, 2013 is
estimated to exceed 7.0 times (incorporating leases adjusted at
eight times, before pro forma earnings form recently-opened
stores), with modest interest coverage (EBITA/Interest) of below
1.3 times. While metric improvement is expected over the next 12-
18 months due to profitable growth and debt reduction with excess
cash, leverage will likely remain above 6.5 times over the next
12-18 months as continued plans for new unit expansion will use
significant free cash flow. The rating also reflects Bob's small
size and very limited geographic presence as a regionally
concentrated retail chain, its limited product diversification as
a specialty furniture retailer, and the discretionary nature of
its product which increases susceptibility to volatility in
discretionary consumer spending.
The rating favorably reflects the strength of the company's "Bob's
Discount Furniture" brand in the regions where it operates, its
credible overall market position and scale within the highly
fragmented U.S. furniture market, and its demonstrated ability to
maintain top line growth despite difficult economic conditions
over the past several years, aided by its value product
positioning. Liquidity is adequate, supported by the expectation
for positive free cash flow, largely undrawn capacity under its
proposed $40 million asset-based ("ABL") revolving credit
facilities (unrated), and lack of financial maintenance covenants.
The B2 rating assigned to Bob's proposed senior secured first lien
term loan reflects its first lien on substantially all of the
company's assets, except cash, inventory and receivables, under
which it has a second lien behind the proposed $40 asset-based
revolving credit facilities. The Caa1 rating assigned to the
proposed second lien term loan reflects its junior position in the
capital structure.
The stable outlook reflects Moody's expectation that the company
will demonstrate profitable growth through positive same-store
sales and unit growth, while maintaining adequate liquidity and
improving debt protection metrics over the next twelve months.
Over time, sustained growth in revenue and earnings while
demonstrating the willingness to sustain a conservative financial
policy, including the use of free cash flow for debt reduction,
could lead to a ratings upgrade. Specific metrics include
debt/EBITDA declining near 6.0 times and EBITA/interest over 1.5
times on a sustained basis.
Bob's ratings could be downgraded if operating performance were to
materially decline, or if financial policies were to become
aggressive, leading to sustained deterioration in credit metrics
or weaker liquidity. Metrics include Debt/EBITDA approaching 8.0
times or interest coverage falling below 1.0.
BDF Acquisition Corp., based in Manchester, CT., was created to
acquire a majority stake in Bob's Discount Furniture, a retailer
of value-priced furniture with 47 stores in 9 Northeast and Mid-
Atlantic states. Revenue for the latest twelve month period ended
Sept. 29, 2013 approached $750 million. Upon completion of the
acquisition, the company will be majority owned by private equity
firm Bain Capital ("Bain").
The principal methodology used in this rating was the Global
Retail Industry published in June 2011. Other methodologies used
include Loss Given Default for Speculative-Grade Non-Financial
Companies in the U.S., Canada and EMEA published in June 2009.
BDF ACQUISITION: S&P Assigns 'B' CCR & Rates $160MM Term Loan 'B'
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned a 'B' corporate credit
rating to BDF Acquisition Corp. The outlook is stable.
At the same time, S&P assigned a 'B' issue-level rating to the
company's $160 million first-lien term loan with a recovery rating
of '3', indicating its expectation for meaningful (50% to 70%)
recovery for lenders in the event of a payment default. S&P also
assigned a 'CCC+' issue-level rating to the company's $80 million
second-lien term loan with a recovery rating of '6', indicating
its expectations for negligible (0-10%) recovery in the event of a
payment default.
The company will use proceeds from the term loans, along with
equity contribution, to fund the acquisition of Bob's Discount
Stores Inc. by Bain Capital.
"The rating on Manchester, Conn.-based specialty furniture
retailer BDF Acquisition Corp. reflects our assessment that the
company's business risk profile is "weak" and its financial risk
profile remains "highly leveraged"," said credit analyst Ana Lai.
The stable outlook reflects S&P's expectations that improving
industry fundamentals should contribute to a modest improvement in
credit protection measures in fiscal 2014.
Downside Scenario
S&P could lower the ratings if the execution of its store growth
is weaker than expected resulting in lower profitability and lack
of improvement in its credit protection measures. This could
result from debt leverage remaining elevated at more than 6.0x in
2014 from slower than expected sales growth of 8% while gross
margin weakens by 50 basis points (bps).
Upside Scenario
An upgrade is unlikely in the near to intermediate term given
S&P's expectations for debt leverage to remain in the 5x area
through 2015 and its majority ownership by private equity.
However, this could result from stronger than expected operating
performance. This could result from sales growth of more than 15%
while gross margin improves by 200 bps in 2014. In this scenario,
S&P will also consider BDF's majority ownership by private equity
and the possibility of a dividend recapitalization.
BEACON ENTERPRISE: Michael Palleschi Named CEO and COO
------------------------------------------------------
The board of directors of Beacon Enterprise Solutions Group, Inc.,
appointed Michael Palleschi to the position of chief executive
officer, chief operating officer and director on Jan. 7, 2014.
Effective Dec. 11, 2013, the board of directors of Beacon
Enterprise appointed Theresa Carlise as chief financial officer,
secretary, treasurer and a director.
Bruce Widener resigned as chief executive officer, secretary,
treasurer and a director of Beacon Enterprise effective Dec. 11,
2013.
About Beacon Enterprise
Beacon Enterprise Solutions Group, Inc., headquartered in
Louisville, Ky., provides international telecommunications and
information technology systems (ITS) infrastructure services,
encompassing a comprehensive suite of consulting, design,
installation, and infrastructure management offerings. Beacon's
portfolio of infrastructure services spans all professional and
construction requirements for design, build and management of
telecommunications, network and technology systems infrastructure.
Professional services offered include consulting, engineering,
program management, project management, construction services and
infrastructure management services. Beacon offers these services
under either a comprehensive contract option or unbundled to the
Company's global and regional clients.
The Company's balance sheet at June 30, 2012, showed $7.3 million
in total assets, $8.8 million in total liabilities, and a
stockholders' deficit of $1.5 million.
For the nine months ended June 30, 2012, the Company generated a
net loss of $5.9 million, which included a non-cash impairment of
intangible assets of $2.1 million and other non-cash expenses
aggregating $1.9 million. Cash used in operations amounted to
$1.0 million for the nine months ended June 30, 2012. As of
June 30, 2012, the Company's accumulated deficit amounted to $42.6
million, with cash and cash equivalents of $75,000 and a working
capital deficit of $4.9 million. "These conditions raise
substantial doubt about the Company's ability to continue as a
going concern," the Company said in its quarterly report for the
period ended June 30, 2012.
Beacon Enterprise closed its merger with Focus Venture Partners,
Inc., on June 19, 2013, with Focus continuing as the surviving
corporation.
BENTLEY PREMIER: Ch. 11 Trustee Wins Approval of Deal With Lenders
------------------------------------------------------------------
The bankruptcy trustee of Bentley Premier Builders, LLC won court
approval of his agreement with secured lenders Starside LLC and
The Phillip M. Pourchot Revocable Trust.
The agreement gives Jason Searcy, the bankruptcy trustee, until
January 31 to file an adversary proceeding challenging the
validity, unenforceability or priority of the "pre-petition
obligations" or the secured lenders' liens on "pre-petition
collateral." The agreement can be accessed for free at
http://is.gd/eJk5Ot
About Bentley Premier
Bentley Premier Builders, LLC, is a Texas limited liability
company in the business of selling high-end residential lots and
building high-quality luxury homes. The Debtor owns and develops
lots, primarily in the two subdivisions known as Normandy Estates,
which straddles both Denton and Collin Counties, near the
intersection of Spring Creek Parkway and Midway Road in Plano, and
Wyndsor Pointe, which is located in Frisco off Stonebrook Parkway,
one-half mile west of the Dallas North Tollway. The company has
100 vacant residential lots, with listing prices ranging from
$150,000 to $900,000. In addition to these vacant lots, the
company owns a model house and an Amenities Center in Normandy
Estates, two houses in Wyndsor Pointe, some common areas and an
approximately 5-acre tract zoned for commercial use.
Bentley filed a Chapter 11 petition (Bankr. E.D. Tex. Case No.
13-41940) on Aug. 6, 2013 in Sherman, Texas. The Debtor disclosed
$35,793,857 in assets and $30,428,782 in liabilities as of the
Chapter 11 filing.
The Phillip M. Pourchot Revocable Trust (led by co-trustee Phillip
M. Pourchot) and Sandy Golgart each hold a 50% member's interest
in the Debtor. Ms. Golgart signed the bankruptcy petition.
The Debtor sought bankruptcy after Starside LLC, an entity owned
by Phillip Pourchot, acquired the note issued to Sovereign Bank
for a $7,250,000 loan, and served notice of its attempt to
foreclose upon properties securing the note.
Gerald P. Urbach, Esq., and Jason A. Katz, Esq., at Hiersche,
Hayward, Drakeley & Urbach, P.C., in Addison, Texas, serve as the
Debtor's counsel.
Judge Brenda Rhoades presides over the case.
A chapter 11 trustee was appointed following motions filed by the
U.S. Trustee and the Pourchot Trust. Jason R. Searcy, the Chapter
11 trustee, tapped to employ Joshua P. Searcy, Esq., at Searcy &
Searcy, P.C. as attorneys, and Gollob, Morgan, Peddy & Co., P.C.,
as accountants.
The deadline to file claims against and interest in the Debtor
expired Dec. 5, 2013. Governmental entities have until Feb. 3,
2014, to file proofs of claim.
BENTLEY PREMIER: Opposes Bid to Reconsider Cash Collateral Order
----------------------------------------------------------------
Bentley Premier Builders LLC's asked Judge Brenda Rhoades to deny
the request of Sandy Golgart to reconsider her earlier decision,
which allowed the company to use the secured lenders' cash
collateral.
Ms. Golgart, an equity owner of Bentley, had complained that the
bankruptcy judge's Nov. 25 order deprives the company's estate,
creditors and stakeholders of "significant, material rights"
without due process. She questioned in particular a provision of
the court order, which granted secured lenders liens on
unencumbered lots without any prior notice.
Sandy Golgart, the bankruptcy trustee, argued that the terms of
the court order are "fair, just and reasonable."
Mr. Golgart stressed that it was necessary to grant the secured
lenders lien on previously unencumbered lots owned by the company
to obtain the necessary funds.
"The use of cash from operations was not and is not sufficient to
fund the trustee's post-petition operations, preservation and
maintenance of debtor's business," Mr. Golgart said in a court
filing.
According to the trustee, the only assets available to protect the
lenders for the necessary use of their cash collateral are the
assets owned by the company, which are not subject to the liens of
secured creditors.
In a separate filing, secured lenders Starside LLC and The Phillip
M. Pourchot Revocable Trust supported the objection of the
bankruptcy trustee.
The lenders said the terms are appropriate since the cash
collateral used was from the sale of their real property
collateral, and that there were no funds to reinvest to create any
new value on which a replacement lien could be granted.
About Bentley Premier
Bentley Premier Builders, LLC, is a Texas limited liability
company in the business of selling high-end residential lots and
building high-quality luxury homes. The Debtor owns and develops
lots, primarily in the two subdivisions known as Normandy Estates,
which straddles both Denton and Collin Counties, near the
intersection of Spring Creek Parkway and Midway Road in Plano, and
Wyndsor Pointe, which is located in Frisco off Stonebrook Parkway,
one-half mile west of the Dallas North Tollway. The company has
100 vacant residential lots, with listing prices ranging from
$150,000 to $900,000. In addition to these vacant lots, the
company owns a model house and an Amenities Center in Normandy
Estates, two houses in Wyndsor Pointe, some common areas and an
approximately 5-acre tract zoned for commercial use.
Bentley filed a Chapter 11 petition (Bankr. E.D. Tex. Case No.
13-41940) on Aug. 6, 2013 in Sherman, Texas. The Debtor disclosed
$35,793,857 in assets and $30,428,782 in liabilities as of the
Chapter 11 filing.
The Phillip M. Pourchot Revocable Trust (led by co-trustee Phillip
M. Pourchot) and Sandy Golgart each hold a 50% member's interest
in the Debtor. Ms. Golgart signed the bankruptcy petition.
The Debtor sought bankruptcy after Starside LLC, an entity owned
by Phillip Pourchot, acquired the note issued to Sovereign Bank
for a $7,250,000 loan, and served notice of its attempt to
foreclose upon properties securing the note.
Gerald P. Urbach, Esq., and Jason A. Katz, Esq., at Hiersche,
Hayward, Drakeley & Urbach, P.C., in Addison, Texas, serve as the
Debtor's counsel.
Judge Brenda Rhoades presides over the case.
A chapter 11 trustee was appointed following motions filed by the
U.S. Trustee and the Pourchot Trust. Jason R. Searcy, the Chapter
11 trustee, tapped to employ Joshua P. Searcy, Esq., at Searcy &
Searcy, P.C. as attorneys, and Gollob, Morgan, Peddy & Co., P.C.,
as accountants.
The deadline to file claims against and interest in the Debtor
expired Dec. 5, 2013. Governmental entities have until Feb. 3,
2014, to file proofs of claim.
BISHOP OF STOCKTON: Proposes to Pay Employee Obligations
--------------------------------------------------------
The Roman Catholic Bishop of Stockton asked U.S. Bankruptcy Judge
Christopher Klein for approval to pay pre-bankruptcy payroll and
other employee obligations.
The Debtor, which has approximately 37 salaried employees and
seven hourly employees, projects it will have under $15,000 in
unpaid pre-bankruptcy payroll.
The Debtor also estimates that it owes $110,000 in total unused
vacation pay, of which about $42,000 is entitled to priority;
$172,000 in unpaid sick leave, of which about $23,000 is entitled
to priority; and $9,000 in accrued and unpaid personal time.
Paul Pascuzzi, Esq., at Felderstein Fitzgerald Willoughby &
Pascuzzi LLP, in Sacramento, California, said the Debtor seeks
authorization to pay only those amounts entitled to priority
claim status under the provisions of section 507(a) of the
Bankruptcy Code.
The Debtor also asked the bankruptcy judge for authority to
reimburse business-related expenses and pay employee deductions.
The Debtor deducts from employees' paychecks (i) payroll taxes
and their portion of FICA and disability taxes; (ii)
contributions for health and disability-related benefits and
flexible spending accounts; (iii) contributions to the 403(b)
plan; (iv) legally ordered deductions such as wage garnishments,
child support and tax levies; and (v) miscellaneous other items.
About Diocese of Stockton
The Diocese of Stockton, California (the "Diocese") was
established on February 21, 1962, by Pope John XXIII from
territory formerly located in the Archdiocese of San Francisco
and the Diocese of Sacramento. The Diocese, comprising the six
counties of San Joaquin, Stanislaus, Calaveras, Tuolumne, Alpine,
and Mono, currently serves approximately 250,000 Catholics in 35
parishes.
As a religious organization, The Roman Catholic Bishop of
Stockton ("RCB") has no significant ongoing for-profit business
activities. Revenue for the RCB principally comes from the annual
ministry appeal, fees for services provided to non-RCB entities,
donations, grants, and RCB ministry revenue.
When the Diocese was created, most, if not all, of the property of
the Parishes (excluding the pre- and/or elementary (K-8) schools)
was held in the name of the RCB. The RCB also held the property
for the cemeteries in the Diocese as well as some of the real
property to be used for future parishes.
The RCB filed a Chapter 11 bankruptcy petition (Bankr. E.D. Cal.
Case No. 14-20371) in Sacramento on Jan. 15, 2014. Judge
Christopher M. Klein oversees the case. Attorneys at Felderstein
Fitzgerald Willoughby & Pascuzzi LLP serve as counsel to the
Debtor. The Debtor estimated assets of $1 million to $10 million
and debt of $10 million to $50 million.
(Catholic Church Bankruptcy News; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000)
BISHOP OF STOCKTON: Seeks Injunction Against Utilities
------------------------------------------------------
The Roman Catholic Bishop of Stockton seeks a court order
prohibiting 13 utility companies from discontinuing their
services as a result of its bankruptcy filing.
The Debtor's ongoing business operations require it to maintain
uninterrupted utility services and termination of those services
"would cause immediate and irreparable harm" to its business,
according to its lawyer Paul Pascuzzi, Esq., at Felderstein
Fitzgerald Willoughby & Pascuzzi LLP, in Sacramento, California.
To assure utility companies that they'll get paid for their
services, Mr. Pascuzzi proposed that each company be provided a
cash deposit in an amount equal to 50% of the Debtor's estimated
monthly cost of its utility consumption from each company, less
any amounts for pre-bankruptcy existing utility deposits.
If it thinks the cash deposit doesn't constitute adequate
assurance of payment, the utility company must serve upon the
Debtor and file with the bankruptcy court a specific request for
adequate assurance.
Without further court order, the Debtor may enter into agreements
granting additional adequate assurance to a utility company that
timely files and serves a request. A utility company will be
deemed to have received satisfactory adequate assurance of
payment and will be prohibited from discontinuing its service to
the Debtor if it fails to timely file and serve a request.
In case one or more utility companies submit a request that is
determined by the Debtor to be unreasonable, the Debtor will
schedule a hearing. The utility company will be prohibited from
discontinuing its service until, after a hearing on adequate
assurance, the court issues an order authorizing such action.
The Debtor has multiple facilities and receives utility services
from 13 companies. These facilities include the Pastoral/Meeting
Center, the Bishop's residence, the residence of the Eucharistic
Franciscan Sisters, and the Newman Center at the University of
the Pacific.
The Debtor also pays for the utilities at the Madonna of the
Peace Retreat Center in the foothills and is reimbursed for that
expense. A list of the utility companies can be accessed for
free at http://is.gd/L5n4ca
About Diocese of Stockton
The Diocese of Stockton, California (the "Diocese") was
established on February 21, 1962, by Pope John XXIII from
territory formerly located in the Archdiocese of San Francisco
and the Diocese of Sacramento. The Diocese, comprising the six
counties of San Joaquin, Stanislaus, Calaveras, Tuolumne, Alpine,
and Mono, currently serves approximately 250,000 Catholics in 35
parishes.
As a religious organization, The Roman Catholic Bishop of
Stockton ("RCB") has no significant ongoing for-profit business
activities. Revenue for the RCB principally comes from the annual
ministry appeal, fees for services provided to non-RCB entities,
donations, grants, and RCB ministry revenue.
When the Diocese was created, most, if not all, of the property of
the Parishes (excluding the pre- and/or elementary (K-8) schools)
was held in the name of the RCB. The RCB also held the property
for the cemeteries in the Diocese as well as some of the real
property to be used for future parishes.
The RCB filed a Chapter 11 bankruptcy petition (Bankr. E.D. Cal.
Case No. 14-20371) in Sacramento on Jan. 15, 2014. Judge
Christopher M. Klein oversees the case. Attorneys at Felderstein
Fitzgerald Willoughby & Pascuzzi LLP serve as counsel to the
Debtor. The Debtor estimated assets of $1 million to $10 million
and debt of $10 million to $50 million.
(Catholic Church Bankruptcy News; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000)
CATASYS INC: Files Copy of Investor Presentation with SEC
---------------------------------------------------------
Catasys, Inc., furnished the U.S. Securities and Exchange
Commission a copy of its investor presentation entitled "The
Health Plan Solution to the High Cost of Substance Abuse", a copy
of which is available at http://is.gd/IoZvt5
About Catasys Inc.
Based in Los Angeles, California, Hythiam, Inc., n/k/a Catasys,
Inc., is a healthcare services management company, providing
through its Catasys(R) subsidiary specialized behavioral health
management services for substance abuse to health plans.
Catasys disclosed a net loss of $11.64 million on $541,000 of
total revenues for the 12 months ended Dec. 31, 2012, as compared
with a net loss of $8.12 million on $267,000 of total revenues in
2011.
The Company's balance sheet at Sept. 30, 2013, showed $2.08
million in total assets, $18.68 million in total liabilities and a
$16.59 million total stockholders' deficit.
Rose, Snyder & Jacobs LLP, in Encino, 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 incurred significant operating losses and
negative cash flows from operations during the year ended Dec. 31,
2012, which raise substantial doubt about the Company's ability to
continue as a going concern.
CENTURYTOUCH LTD: Bongiovanni & Assocs. Raises Going Concern Doubt
------------------------------------------------------------------
CenturyTouch Ltd., Inc., filed with the U.S. Securities and
Exchange Commission on Jan. 17, 2014, its annual report on Form
10-K for the year ended June 30, 2013. The company also filed its
Form 10-K and 10-Qs for the preceding periods.
Bongiovanni & Associates, CPA's expressed substantial doubt about
the Company's ability to continue as a going concern, citing that
the Company has suffered losses from operations and has a net
capital deficiency as of June 30, 2013.
The Company reported a net loss of $379,688 on $238,765 of
rental income for the year ended June 30, 2013, compared with a
net loss of $128,286 on $145,725 of rental income at June 30,
2012.
The Company's balance sheet at June 30, 2012, showed $4.09 million
in total assets, $4.42 million in total liabilities, and
stockholders' deficit of $330,733.
A copy of the Form 10-K for the year ended June 30, 2013, is
available at http://is.gd/JlIwgr
A copy of the company's annual report for the year ended June 30,
2012, is available for free at http://is.gd/ksW4XT
A copy of the Form 10-Q for the quarter ended Sept. 30, 2012, is
available at http://is.gd/CzANhW
A copy of the Form 10-Q for the quarter ended Dec. 31, 2012, is
available at: http://is.gd/lKWz94
A copy of the Form 10-Q for the quarter ended March 31, 2013, is
available for free at: http://is.gd/US0kul
CENTURYTOUCH LTD: Posts $61K Net Loss in Qtr. Ended Sept. 30, 2013
------------------------------------------------------------------
CenturyTouch Ltd., Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q, reporting a
net loss of $61,390 on $78,260 of rental income for the three
months ended Sept. 30, 2013, compared to a net loss of $83,771 on
$55,149 of rental income for the same period in 2012.
The Company's balance sheet at Sept. 30, 2013, showed $4.29
million in total assets, $4.67 million in total liabilities, and
stockholders' deficit of $383,963.
As of Sept. 30, 2013, the Company had net working capital
deficiency of $2.57 million and accumulated deficit of $606,002,
and required capital for its contemplated operation and marketing
activities to take place. The Company's ability to raise
additional capital through the future issuances of common stock is
unknown. The obtainment of additional financing, the successful
development of the Company's contemplated plan of operations, and
its transition, ultimately, to the attainment of profitable
operations are necessary for the Company to continue operations.
The ability to successfully resolve these factors raise
substantial doubt about the Company's ability to continue as a
going concern.
A copy of the Form 10-Q is available at:
http://is.gd/u5VIwr
CenturyTouch Ltd., Inc., owns and operates retail and multifamily
properties in the Midlands area of England. The company was
founded in 2010 and is headquartered in Grantham, the United
Kingdom.
CEREPLAST INC: Defaults Under Loan Agreement with Horizon
---------------------------------------------------------
Cereplast, Inc., received a notice of event of default on Jan. 13,
2014, from Horizon Technology Finance, Inc., with respect to the
Company's Venture Loan and Security Agreement dated Dec. 21, 2010.
The Notice was triggered by events of defaults resulting from the
inability of the Company to pay interests and principal pursuant
to the terms of the Loan documents. The Venture Loan & Security
Agreement in the aggregate amount of $5,000,000 were originally
issued on Dec. 21, 2010. As of Jan. 17, 2014, an aggregate amount
of $2,800,000 of the Loan remain outstanding.
The Company is currently exploring options to cure the Default and
protect the Assets of the Company.
About Cereplast
El Segundo, Calif.-based Cereplast, Inc., has developed and is
commercializing proprietary bio-based resins through two
complementary product families: Cereplast Compostables(R) resins
which are compostable, renewable, ecologically sound substitutes
for petroleum-based plastics, and Cereplast Sustainables(TM)
resins (including the Cereplast Hybrid Resins product line), which
replaces up to 90% of the petroleum-based content of traditional
plastics with materials from renewable resources.
Cereplast disclosed a net loss of $30.16 million in 2012, as
compared with a net loss of $14 million in 2011.
HJ Associates & Consultants, LLP, in Salt Lake City, Utah, 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 significant recurring
losses, has a significant accumulated deficit, and has
insufficient working capital to fund planned operations. These
factors raise substantial doubt about the Company's ability to
continue as a going concern.
The Company's balance sheet at Sept. 30, 2013, showed $14.30
million in total assets, $36.72 million in total liabilities and a
$22.42 million total shareholders' deficit.
Going Concern/Bankruptcy Warning
"We have incurred a net loss of $34.0 million for the nine months
ended September 30, 2013, and $30.2 million for the year ended
December 31, 2012, and have an accumulated deficit of $121.1
million as of September 30, 2013. Based on our operating plan,
our existing working capital will not be sufficient to meet the
cash requirements to fund our planned operating expenses, capital
expenditures and working capital requirements through December 31,
2013 without additional sources of cash. This raises substantial
doubt about our ability to continue as a going concern.
"Our plan to address the shortfall of working capital is to
generate additional cash through a combination of refinancing
existing credit facilities, incremental product sales and raising
additional capital through debt and equity financings. We are
confident that we will be able to deliver on our plans, however,
there are no assurances that we will be able to obtain any sources
of financing on acceptable terms, or at all.
"If we cannot obtain sufficient additional financing in the short-
term, we may be forced to curtail or cease operations or file for
bankruptcy," the Company said in its quarterly report for the
period ended Sept. 30, 2013.
CERIDIAN CORP: Moody's Retains B3 CFR Over Truckstop Suit MOU
-------------------------------------------------------------
Moody's Investors Service said Ceridian Corp.'s B3 Corporate
Family Rating is not affected by the announced a memorandum of
understanding ("MoU") to settle litigation brought by truck
fueling stations against Ceridian's Comdata Inc subsidiary and
others, though this is credit negative as Moody's expects Ceridian
to fund its portion of the settlement with revolver drawings.
Ceridian Corp., based in Minneapolis, Minnesota, is a services and
transaction processing company primarily serving the needs of the
human resources, transportation, and retail markets.
CHARTER COMMUNICATIONS: Investor Wants Time Warner Cable to Talk
----------------------------------------------------------------
David Gelles, writing for The New York Times' DealBook, reported
that T. Rowe Price, one of the biggest investors in the country,
wants Time Warner Cable and Charter Communications to sit down at
the bargaining table.
According to people briefed on the matter, T. Rowe sent Time
Warner Cable a letter urging it to engage in discussions with
Charter Communications, which has made a proposal to acquire the
cable operator, the report related.
T. Rowe is one of only a couple shareholders that have stakes in
both Time Warner Cable and Charter, the report said. Between its
various portfolios, T. Rowe owns about 5.2 percent of Charter and
about 2.3 percent of Time Warner Cable. Vanguard, another major
investor, also has positions in both companies.
Earlier this month, Charter made a proposal to acquire Time Warner
Cable for $132.50 a share, valuing the country's second largest
cable operator at about $37.8 billion, the report related. Time
Warner Cable called that "grossly inadequate" and said it would
consider a bid of $160 per share.
Though the letter from T.-Rowe did not name a specific price at
which it would like to see a deal get done, the money manager's
holdings suggest it may have more of an incentive to see Charter
get a good deal than to see it over pay, the report further
related.
About Charter Communications
Based in St. Louis, Missouri, Charter Communications, Inc. (Pink
OTC: CHTRQ) -- http://www.charter.com/-- is a broadband
communications company and the fourth-largest cable operator in
the United States.
Charter Communications and more than a hundred affiliates filed
voluntary Chapter 11 petitions on March 27, 2009 (Bankr. S.D.N.Y.
Case No. 09-11435).
The Hon. James M. Peck presided over the cases. Richard M. Cieri,
Esq., Paul M. Basta, Esq., and Stephen E. Hessler, Esq., at
Kirkland & Ellis LLP, in New York, served as counsel to the
Debtors, excluding Charter Investment Inc. Albert Togut, Esq., at
Togut, Segal & Segal LLP in New York, served as Charter
Investment, Inc.'s bankruptcy counsel.
Charter Communications emerged from Chapter 11 under its pre-
arranged Joint Plan of Reorganization, which was confirmed by the
Court on Nov. 17, 2009. The Plan was declared effective Nov. 30,
2009.
About Time Warner Cable
Time Warner Cable Inc., is among the largest providers of video,
high-speed data and voice services in the U.S., with
technologically advanced, well-clustered cable systems located
mainly in five geographic areas - New York State (including New
York City), the Carolinas, the Midwest (including Ohio, Kentucky
and Wisconsin), Southern California (including Los Angeles) and
Texas. As of September 30, 2013, TWC served approximately 15.1
million customers (approximately 14.5 million residential services
customers and 606,000 business services customers) who subscribed
to one or more of its video, high-speed data and voice services.
CHINA TELETECH: Pays $50,000 Settlement to Enable Funds
-------------------------------------------------------
China Teletech Holding on Nov. 28, 2011, entered into a settlement
and amendment agreement with Enable Growth Partners, LP, Enable
Opportunity Partners, LP, and Pierce Diversified Strategy Master
Fund LLC, to settle the Debenture, Warrants and Judgment arising
from that certain securities purchase agreement dated July 31,
2007, and amended on Nov. 3, 2008, by and among the Company and
the Enable Funds.
The Company said in a filing with the U.S. Securities and Exchange
Commission this month that it has not paid any settlement payment
as required by the Settlement Agreement. On Jan. 7, 2014, in lieu
of the cash satisfaction of the settlement payment, the Company
entered into a letter agreement with Enable Funds pursuant to
which the Company agreed to pay the sum of $50,000 within three
business days upon execution of the Letter Agreement and issue to
Enable Funds an aggregate of 4,600,000 shares of common stock of
the Company, which shares will be evidenced by a certificate
bearing a customary securities act legend.
As of Jan. 15, 2014, the sum of $50,000 was paid to the Enable
Funds. The Company intends to issue the 4,600,000 shares of the
Company's common stock to the Enable Funds as soon as practical.
The Purchase Agreement, Debentures and Warrants will be deemed
null and void and of no further force or effect upon satisfaction
of the obligations of the Company under the Letter Agreement.
About China Teletech
Tallahassee, Fla.-based China Teletech Holding, Inc., is a
national distributor of prepaid calling cards and integrated
mobile phone handsets and a provider of mobile handset value-added
services. The Company is an independent qualified corporation
that serves as one of the principal distributors of China Telecom,
China Unicom, and China Mobile products in Guangzhou City.
On June 30, 2012, the Company strategically sold its wholly-owned
subsidiary, Guangzhou Global Telecommunication Company Limited
("GGT"), to a third party. GGT was engaged in the trading and
distribution of cellular phones and accessories, prepaid calling
cards, and rechargeable store-value cards.
China Teletech disclosed net income of US$53,542 on US$26.62
million of sales for the year ended Dec. 31, 2012, as compared
with a net loss of US$348,124 on US$18.84 million of sales for the
year ended Dec. 31, 2011. The Company's balance sheet at
Sept. 30, 2013, showed $1.71 million in total assets, $2.13
million in total liabilities, and a $418,679 total stockholders'
deficit.
WWC, P.C., in San Mateo, California, issued a "going concern"
qualification on the consolidated financial statements for the
quarter ended June 30, 2013. The independent auditors noted that
the Company has incurred substantial losses, and has difficulty to
pay the People's Republic of China government Value Added Tax and
past due Debenture Holders Settlement, all of which raise
substantial doubt about its ability to continue as a going
concern.
CLEANTECH INNOVATIONS: Files Late Form 10-Qs for 2012 and 2013
-------------------------------------------------------------
CleanTech Innovations, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly reports on Form 10-Q for 2012
and 2013.
The Company incurred a net loss of $8.66 million for the nine
months ended Sept. 30, 2013, compared with a net loss of $5.59
million for the nine months ended Sept. 30, 2012.
The Company's balance sheet at Sept. 30, 2013, showed $37.9
million in total assets, $21.17 million in total liabilities, and
stockholders' equity of $16.72 million.
The Company noted that incurred a net loss of $8.66 million for
the nine months ended Sept. 30, 2013. In addition, the Company
had loans of $2.93 million and promissory notes of $10 million and
$50,000 that are past due. Through a new Line of Credit Agreement
entered with the same lender on August 17, 2013, the default
promissory note of $10 million became payable upon Note-holder's
request. The Company has been unable to raise funds from the U.S.
markets to pay off these obligations due to the decision by NASDAQ
of delisting the Company's common stock. These conditions raise a
substantial doubt as to whether the Company may continue as a
going concern.
A copy of the Form 10-Q for the quarter ended June 30, 2012, is
available at http://is.gd/gCQWxL
A copy of the Form 10-Q for the quarter ended Sept. 30, 2012, is
available at http://is.gd/aBYUHG
A copy of the Form 10-Q for the quarter ended March 31, 2013, is
available at http://is.gd/Fiq7O8
A copy of the Form 10-Q for the quarter ended June 30, 2013, is
available at http://is.gd/LWXjfc
A copy of the Form 10-Q for the third quarter ended Sept. 30,
2013, is available at http://is.gd/sLg6Sx
About CleanTech
CleanTech is a U.S.-registered public company with primary
operations in China. CleanTech designs and manufactures clean
technology products that promote renewable energy generation,
energy savings and pollution reduction.
CLIPPER ACQUISITIONS: S&P Rates Proposed $401MM Secured Debt 'BB+'
------------------------------------------------------------------
Standard & Poor's Ratings Services said it assigned its 'BB+'
senior secured debt rating on Clipper Acquisitions Corp.'s
(Clipper) proposed senior secured credit facility, consisting of a
$351 million term loan maturing in February 2020 and a $50 million
revolver maturing in February 2018. S&P's long-term issuer credit
rating on Clipper remains 'BB+'. The outlook is stable.
Clipper intends to use the proceeds of the term loan to repay the
outstanding $351.4 million borrowings on the existing term loan,
which it entered into in February 2013. S&P expects the
$50 million revolver to remain undrawn. The company would realize
immaterial -- approximately $3.5 million -- annual interest
savings under the proposed new pricing. While total debt would
remain unchanged and debt-to-EBITDA leverage would remain slightly
above 2.5x on a pro forma basis for the last 12 months ended Sept.
30, 2013, S&P expects the EBITDA-to-interest coverage to improve
to approximately 13x from 10x on a pro forma basis for the last 12
months ended Sept 30, 2013. These metrics compare favorably with
EBITDA-to-interest coverage and debt-to-EBITDA leverage of 9.3x
and 2.7x, respectively, which were the metrics when S&P first
assigned its issuer credit rating on Clipper in February 2013.
Additionally, the company is planning to use approximately
$35 million in cash to make a one-time dividend to its owner,
Carlyle Group. On a pro forma basis, S&P expects the cash to
decline to $84 million from $120 million as of Sept. 30, 2013, but
S&P still views on-balance-sheet liquidity as adequate for the
company's working-capital and debt-servicing requirements.
The TCW Group, a wholly owned subsidiary of Clipper, is an asset
management firm with $131.9 billion of assets under management
(AUM) as of Dec. 31, 2013. S&P's ratings on Clipper are based on
the company's solid franchise (especially in U.S. fixed-income
investment management), good distribution capability, experienced
management team, and strong investment performance track record.
Clipper was a newly formed entity that the Carlyle Group and the
management of The TCW Group acquired in February 2013. In S&P's
view, significant management ownership and TCW's expected access
to the Carlyle platform are also rating strengths. However,
several factors offset these strengths. For example, TCW has a
significant proportion of its AUM in fixed-income securities,
which makes the company more sensitive to changes in demand for
fixed-income assets. In addition, its debt leverage, at 2.5x, is
considerable, though in line with the 'BB+' ratings. Other
negative rating factors are the declining share of management and
performance fees the company receives from its joint-venture (JV)
agreements and its negative tangible equity.
The stable outlook reflects S&P's expectation that the company
will modestly increase AUM over the next 12-18 months to generate
an EBITDA margin of 27%-30%, reduce debt leverage to below 2.5x,
and maintain interest coverage above 10.0x.
"We could raise the ratings on Clipper if TCW increases its AUM
substantially to the extent that it replaces the declining AUM and
fees from EIG and the Crescent JVs with new AUM, diversifies its
business mix, and improves its financial profile, including its
debt leverage (less than 2.25x on a sustained basis), on-balance-
sheet liquidity, and tangible equity. We could lower the ratings
if the company takes on more debt than the $355 million it used to
fund the Carlyle transaction, if it fails to replace the declining
AUM and fees from EIG and the Crescent JVs with new AUM, or if
significant net asset outflows ultimately hinder its operating
performance such that debt leverage increases to more than 3.5x
and interest coverage falls to less than 5.0x," S&P said.
RATINGS LIST
Clipper Acquisitions Corp.
Issuer Credit Rating BB+/Stable/--
New Rating
Clipper Acquisitions Corp.
$351 mil. term loan b due 2020
$50 mil. revolving credit facility due 2018 BB+
CLUB AT SHENANDOAH SPRINGS: Says GE Protected by Equity Cushion
---------------------------------------------------------------
The Club at Shenandoah Springs Village, Inc., says secured
creditor General Electric Capital Corporation is adequately
protected and that the Court should grant final approval to its
motion to use cash collateral.
In its original opposition, GE Capital argued that in order to
obtain the right to use cash collateral, the Debtor "must make
compensatory payments to GE, provide additional or replacement
liens and/or provide GE with the indubitable equivalent of its
interest in the property."
The Debtor, in a supplemental brief, pointed out that it was at a
loss at how to respond to the cash collateral objection, since
this is exactly what the Debtor offered and demonstrated in its
cash collateral motion. In fact, the Debtor intended to make, and
indeed, has been making, principal and interest payments of
$70,000 per month to GE since December 2012; the Debtor offered
(and the Court granted) postpetition replacement liens; and the
Debtor demonstrated how GE was adequately protected by a
substantial equity cushion in the Property and a positive cash
flow balance at the end of the initial 90-day budget.
Now, more than 12 months after the cash collateral motion was
first filed and granted on an interim basis, the Debtor is
requesting that final use of cash collateral be granted since
nothing has changed in the interim.
According to Daniel A. Lev, at SulmeyerKupetz, attorney for the
Debtor, the only issue which could possibly be in dispute -- to
what extent GE is adequately protected by an equity cushion in the
Debtor's property -- has been put to rest by the Debtor's evidence
of value which demonstrates an equity cushion exceeding 35%. He
adds that while GE submitted an appraisal with a vastly different
(and much lower) estimate of value, there remains no doubt that GE
is adequately protected not only by a staggering equity cushion
far in excess of the amount deemed sufficient by the Ninth
Circuit, but by the continued receipt of monthly adequate
protection payments exceeding $70,000 and the replacement liens
granted by the Court.
In response, GE pointed out that throughout Debtor's tenure in
bankruptcy, GE has worked with Debtor to provide the use of cash
collateral it needed to reorganize. However, GE says it can no
longer consent to use of its cash collateral where the record
clearly establishes: (i) the Debtor's property is diminishing in
value because of a lack of care; and (ii) there is no equity in
the Property.
According to GE Capital, the Debtor's failure to properly maintain
the upkeep of the Property and inability to sell it despite
numerous promises, forced GE to file a motion for relief from the
automatic stay. As reflected in GE's motion, the value of the
Property is diminishing with no prospect of a sale in sight and no
equity in the Property.
Accordingly, there is no amount of adequate protection payments or
replacement liens available to Debtor to fully protect GE.
GE Capital is represented by:
Joshua D. Wayser, Esq.
Jennifer K. Brooks, Esq.
KATTEN MUCHIN ROSENMAN LLP
2029 Century California East, Suite 2600
Los Angeles, CA 90067-3012
Tel: (310) 788-4400
Fax: (310) 788-4471
E-mail: joshua.wayser@kattenlaw.com
jennifer.brooks@kattenlaw.com
About The Club at Shenandoah Springs Village
The Club At Shenandoah Springs Village, Inc., owns The Club At
Shenandoah Springs Village, a golf and leisure resort in Thousand
Palms, a desert region of central California. It filed for
Chapter 11 protection (Bankr. C.D. Cal. Case No. 12-36723) on
Dec. 3, 2012. The Debtor estimated both assets and liabilities of
between $10 million and $50 million. Judge Mark D. Houle presides
over the case. Daniel A. Lev, Esq., and Steven Worth, Esq., at
SulmeyerKupetz, in Los Angeles, Calif., represent the Debtor as
counsel.
CONDOR DEVELOPMENT: Gets Partial Approval on Amended Plan Outline
-----------------------------------------------------------------
Judge Timothy W. Dore entered an ex parte order conditionally
approving the Disclosure Statement filed by Seattle Group, Ltd.
Condor Development LLC, to explain their Second Amended Joint Plan
of Liquidation dated Nov. 4, 2013.
The Conditional Approval DS Order set the voting deadline on the
Plan as Dec. 6, 2013. The hearing to consider final approval of
the Disclosure Statement and confirmation of the Plan was set for
Dec. 13, 2013.
However, as of presstime, no final orders have been made available
in the dockets.
As reported by the Troubled Company Reporter on June 5, 2013, the
Debtors' Plan of Liquidation proposes the sale of substantially
all their real and personal property used in operating the Comfort
Inns and Suites Hotel and related personal property.
The Debtors reveal under the First Amended Disclosure Statement
dated Nov. 4, 2013, that they made changes to the Plan based on
information acquired with regard to the sales price which could be
obtained from prospective purchasers for substantially all of the
Debtors' assets related to the Hotel, which prices were less than
originally projected.
After obtaining those information, the Debtors negotiated the Term
Sheet with East West bank which provides for the Carve-Out. Under
the Term Sheet, East West Bank has agreed to the Carve out from
their Allowed Secured Claim to pay in full the Allowed Class 1
Administrative Claims, the Allowed Priority Unsecured Claims
(Class 2 and Class 3) and to pay the greater of: $17,000 or 10% of
the Allowed General Unsecured Claims.
The treatment of the Class 4 Allowed Secured Claims of King County
for real property taxes remains unchanged from the earlier Plan.
The Debtors believe that based on their recently improved
operations and the resulting stabilized income, they will be able
to make the ongoing ordinary course payments of operating the
Hotel pending the Confirmation of the Plan and will have remaining
pre-Sale proceeds available from operations to reduce the Carve-
Out as set forth in the Term Sheet.
A copy of the Debtors' First Amended Disclosure Statement dated
Nov. 4, 2013, is available for free at:
http://bankrupt.com/misc/CONDORDEV_DSnov4.PDF
About Condor Development
Condor Development LLC, aka Ciara Inn and Condor Management Group,
operates the Comfort Inn Suites, a hotel located at SeaTac,
Washington.
Condor Development filed a Chapter 11 petition (Bankr. W.D. Wash.
Case No. 12-13287) on March 30, 2012, in Seattle. In its
schedules, the Debtor disclosed $16.4 million in total assets and
$9.11 million in total liabilities.
Affiliate Seattle Group also filed for Chapter 11 protection
(Bankr. Case No. 12-13263) on March 30, 2012. The Debtor
disclosed $15,501,088 in assets and $10,409,935 in liabilities as
of the Chapter 11 filing.
Vortman & Feinstein and Larry B. Feinstein initially represented
the Debtors as counsel. They later withdrew from the case and
were replaced by Lane Powell PC.
Seattle Group, Ltd., and Condor Development LLC filed a plan of
liquidation that proposes the sale of substantially all of their
real and personal property used in operating the Comfort Inns and
Suites Hotel and related personal property.
In January 2013, the case was reassigned to Judge Timothy W. Dore.
DETROIT, MI: Syncora Appeals from Bankruptcy Loan Approval
----------------------------------------------------------
Syncora Guarantee Inc. and Syncora Capital Assurance Inc. filed a
notice of appeal to the U.S. District Court for the Eastern
District of Michigan, Southern Division, from the minute entry of
the U.S. Bankruptcy Court for the Eastern District of Michigan.
The minute entry, dated Jan. 16, 2014, said Bankruptcy Judge
Steven Rhodes denied in part and granted in part with conditions
the city of Detroit's motion to borrow postpetition financing.
Judge Rhodes during the Jan. 16 hearing informed the parties of
his ruling from the bench and entered minute entries denying the
forbearance agreement motion and conditionally approving the
Quality of Life portion of the DIP motion.
Michael Bathon, substituting for Bill Rochelle, the bankruptcy
columnist for Bloomberg News, related that Judge Rhodes rejected
part of a $285 million financing package from Barclays Plc that
was to pay for improved municipal services and to buy out a swaps
contract with UBS AG and Bank of America Corp. Judge Rhodes said
the proposed $165 million termination payment for the swaps was
too expensive and cut the loan down to $120 million.
Accompanying its notice of appeal, Syncora, which insures bonds
issued by Detroit, asked the Bankruptcy Court for stay of the
minute entry pending its appeal. Syncora argues that the DIP
Order is premised on a standard of review that is not supported by
the Bankruptcy Code or its legislative history, particularly given
the "plan-like" implications of the DIP Facility. Syncora says it
has a substantial likehood of prevailing on appeal. Without a
stay, however, Syncora anticipates that parties will assert that
any challenge to the DIP Facility is rendered moot by Section
364(e) of the Bankruptcy Code.
James H.M. Sprayregen, P.C., Esq., Ryan Blaine Bennett, Esq., and
Stephen C. Hackney, Esq., at KIRKLAND & ELLIS LLP, in Chicago,
Illinois; and Stephen M. Gross, Esq., David A. Agay, Esq., and
Joshua Gadharf, Esq., at MCDONALD HOPKINS PLC, in Bloomfield
Hills, Michigan, represent Syncora.
About City of Detroit, Michigan
The City of Detroit, Michigan, weighed down by more than
$18 billion in accrued obligations, sought municipal bankruptcy
protection on July 18, 2013, by filing a voluntary Chapter 9
petition (Bankr. E.D. Mich. Case No. 13-53846). Detroit listed
more than $1 billion in both assets and debts.
Kevyn Orr, who was appointed in March 2013 as Detroit's emergency
manager, signed the petition. Detroit is represented by
lawyers at Jones Day and Miller Canfield Paddock and Stone PLC.
Michigan Governor Rick Snyder authorized the bankruptcy filing.
The filing makes Detroit the largest American city to seek
bankruptcy, in terms of population and the size of the debts and
liabilities involved.
The City's $18 billion in debt includes $5.85 billion in special
revenue obligations, $6.4 billion in post-employment benefits,
$3.5 billion for underfunded pensions, $1.13 billion on secured
and unsecured general obligations, and $1.43 billion on pension-
related debt, according to a court filing. Debt service consumes
42.5 percent of revenue. The city has 100,000 creditors and
20,000 retirees.
Detroit is represented by David G. Heiman, Esq., and Heather
Lennox, Esq., at Jones Day, in Cleveland, Ohio; Bruce Bennett,
Esq., at Jones Day, in Los Angeles, California; and Jonathan S.
Green, Esq., and Stephen S. LaPlante, Esq., at Miller Canfield
Paddock and Stone PLC, in Detroit, Michigan.
Sharon Levine, Esq., at Lowenstein Sandler LLP, is representing
the American Federation of State, County and Municipal Employees
and the International Union.
Babette Ceccotti, Esq., at Cohen, Weiss & Simon LLP, is
representing the United Automobile, Aerospace and Agricultural
Implement Workers of America.
A nine-member official committee of retired workers was appointed
in the case. The Retirees' Committee is represented by Dentons US
LLP.
DETROIT, MI: Gets $350 Million Pension Aid Offer From Snyder
------------------------------------------------------------
Chris Christoff, writing for Bloomberg News, reported that
Michigan would pay $350 million over 20 years to reduce bankrupt
Detroit's pension liabilities under a deal struck by Governor Rick
Snyder and lawmakers.
According to the report, the money would be in addition to $330
million that nine foundations pledged through bankruptcy-court
mediation to reduce city pension cuts and to shield Detroit's art
collection from a sale to pay $11.5 billion in unsecured debt. The
money should be linked to a broader settlement that would protect
the masterworks, Snyder said on Jan. 22 at news briefing in
Lansing.
Detroit's available cash shrank less quickly than city officials
feared it would in the latest quarter, but it was still down
nearly 32 percent from the previousl quarter to $87.5 million,
according to a report by Kevyn Orr, the City's emergency manager.
Reuters said the decline was significant, but did not approach the
levels feared by the city emergency manager, who, in August,
warned that the city could be out of cash at year end if Detroit
were unable to gain unfettered access to casino tax revenue, which
is pledged to banks for payments on interest rate swap agreements
that the city is trying to terminate at a steep discount.
Snyder, a Republican, also called for independent management of
Detroit's retirement system, which is run by two appointed boards,
the Bloomberg report related. He declined to say how that might
occur, though he said it wouldn't necessarily be through state
control.
"This is a settlement; this is not a bailout," said Snyder, who
was joined at the news briefing by Michigan House Speaker Jase
Bolger and state Senate Majority Leader Randy Richardville, both
Republicans, Bloomberg cited. Snyder said the state money would
ease cuts to pensions under a restructuring of Detroit's debt.
About City of Detroit, Michigan
The City of Detroit, Michigan, weighed down by more than
$18 billion in accrued obligations, sought municipal bankruptcy
protection on July 18, 2013, by filing a voluntary Chapter 9
petition (Bankr. E.D. Mich. Case No. 13-53846). Detroit listed
more than $1 billion in both assets and debts.
Kevyn Orr, who was appointed in March 2013 as Detroit's emergency
manager, signed the petition. Detroit is represented by
lawyers at Jones Day and Miller Canfield Paddock and Stone PLC.
Michigan Governor Rick Snyder authorized the bankruptcy filing.
The filing makes Detroit the largest American city to seek
bankruptcy, in terms of population and the size of the debts and
liabilities involved.
The City's $18 billion in debt includes $5.85 billion in special
revenue obligations, $6.4 billion in post-employment benefits,
$3.5 billion for underfunded pensions, $1.13 billion on secured
and unsecured general obligations, and $1.43 billion on pension-
related debt, according to a court filing. Debt service consumes
42.5 percent of revenue. The city has 100,000 creditors and
20,000 retirees.
Detroit is represented by David G. Heiman, Esq., and Heather
Lennox, Esq., at Jones Day, in Cleveland, Ohio; Bruce Bennett,
Esq., at Jones Day, in Los Angeles, California; and Jonathan S.
Green, Esq., and Stephen S. LaPlante, Esq., at Miller Canfield
Paddock and Stone PLC, in Detroit, Michigan.
Sharon Levine, Esq., at Lowenstein Sandler LLP, is representing
the American Federation of State, County and Municipal Employees
and the International Union.
Babette Ceccotti, Esq., at Cohen, Weiss & Simon LLP, is
representing the United Automobile, Aerospace and Agricultural
Implement Workers of America.
A nine-member official committee of retired workers was appointed
in the case. The Retirees' Committee is represented by Dentons US
LLP.
DICKINSON COUNTY HEALTHCARE: Moody's Lowers LT Bond Rating to Ba2
-----------------------------------------------------------------
Moody's Investors Service has downgraded Dickinson County
Healthcare System's (DCHS) long-term bond rating to Ba2 from Ba1.
This action affects approximately $21 million of Series 1999 fixed
rate revenue bonds outstanding. The outlook is negative at the
lower rating level. The downgrade and negative outlook reflect
DCHS's soft operating margins and materially weaker balance sheet
ratios in interim fiscal year (FY) 2013.
Summary Rating Rationale
The downgrade to Ba2 from Ba1 reflects DCHS's materially weaker
balance sheet position and soft operating margins through
11-months FY 2013. The negative outlook illustrates that if DCHS
fails to stabilize and improve its operating performance and cash
position, a downgrade may be warranted.
Strengths
* DCHS is a sole community provider with dominant market position
of a broad primary service area with very little direct
competition.
* DCHS's balance sheet is managed conservatively with essentially
all debt in fixed rate mode, no derivatives, and 100% of
unrestricted cash and investments in cash and fixed income
securities.
Challenges
* DCHS's balance sheet ratios weakened significantly in recent
months, with absolute unrestricted cash declining to $9.6
million at Nov. 30, 2013 (based on managed prepared financials)
from $14.8 million at audited fiscal year end (FYE) 2012.
* DCHS's operating margins weakened in interim FY 2013, with
operating cash flow margin measuring 4.7% through 11-months
FY 2013 compared to 6.0% in full year FY 2012.
* DCHS is located in a small service area with somewhat modest
demographic characteristics. DCHS is reliant on a handful of
physicians, as the top ten admitting physicians accounted for
54% of admissions in 2012.
* DCHS participates in an underfunded defined benefit pension plan
(67% funded at FYE 2012 compared to actuarial accrued liability
of $52 million). Moody's notes that the plan was closed to new
hires effective May 2011.
Outlook
The negative outlook illustrates that if DCHS fails to stabilize
and improve its operating performance and cash position, a
downgrade may be warranted.
What Could Make The Rating Go UP
An upgrade, while unlikely given the negative outlook, would be
considered if DCHS demonstrated significantly elevated operating
margins for a sustained period, leading to improved debt coverage
and materially stronger balance sheet ratios.
What Could Make The Rating Go DOWN
A downgrade will be considered if DCHS's operating margins remain
weak, particularly similar to the margins recorded in the first
half of FY 2013. Also, failure to stabilize and rebuild DCHS's
cash position or a material increase in debt would be considered
in a downgrade.
Principal Methodology
The principal methodology used in this rating was Not-for-Profit
Healthcare Rating Methodology published in March 2012.
DISH NETWORK: Fitch Affirms BB- Issuer Default Rating, Outlook Neg
------------------------------------------------------------------
Fitch Ratings affirms the 'BB-' Issuer Default Rating (IDR)
assigned to DISH Network Corporation (DISH) and its wholly owned
subsidiary DISH DBS Corporation (DDBS). Fitch has also affirmed
the 'BB-' rating assigned to the senior unsecured notes issued by
DDBS. The Rating Outlook for all of DISH's ratings remains
Negative. DISH had approximately $14.1 billion of debt outstanding
as of Sept. 30, 2013.
Key Rating Drivers
-- Weakening credit protection metrics.
-- The uncertainty revolving around DISH's wireless strategy
together with the absence of a publically articulated
financial/capital structure policy increase the event risks
tied to DISH's credit profile.
-- Flexible liquidity position. Fitch regards the company's
liquidity position as strong and primarily supported by its
sizable cash position and diminishing free cash flow
generation.
-- Inconsistent operating results. Fitch believes the company's
overall credit profile has limited capacity to accommodate
DISH's inconsistent operating performance.
-- The ratings also factor the company's lack of revenue
diversity and video centric service offering relative to its
cable MSO and telephone company competition, which limits
growth prospects in the U.S.
DISH's credit profile continued to weaken during the course of
2013 as higher debt levels combined with weaker operating results
pushed leverage up to 5x as of the LTM period ended Sept. 30,
2013. The deteriorating credit protection metrics together with
the absence of a financial/capital structure policy and the
uncertainty regarding DISH's wireless strategy limits the
company's financial flexibility at the current ratings level.
Total debt outstanding as of Sept. 30, 2013 was approximately
$14.1 billion, reflecting a 18.7% increase relative to year-end
2012 debt level. DISH has built a significant cash balance to
support a yet to be articulated wireless strategy.
The Negative Outlook encompasses the lack of visibility as well as
the potential capital and execution risks associated with DISH's
wireless strategy. The economic viability of the strategy is
questionable given the presence of strong entrenched market
participants particularly if DISH's wireless offering fails to
provide any meaningful service differentiation from established
competitive offerings. Fitch acknowledges that a wireless network
can potentially provide DISH with further strategic flexibility
and enable the company to diversify its business and capture
incremental revenue and cash flow growth.
DISH's efforts to transform the company though its various
wireless initiatives have, to date failed to gain traction. The
company's strategy has experienced numerous set-backs as the
company endeavors to engage another wireless carrier seeking a
partnership, acquisition or network-sharing agreement. Event
risks remain elevated as the company contemplates additional
acquisitions of spectrum or assets to support the wireless
strategy. The strategic importance of a wireless broadband
service option has not diminished and, as such, Fitch expects DISH
will likely continue its efforts to engage an existing national
wireless service provider. However, recent consolidation,
investments and spectrum acquisitions within the wireless sector
has reduced the number of potential entities DISH can partner with
to deploy its wireless network creating an urgency to establish a
partnership. Fitch acknowledges the sale of DISH's wireless
spectrum portfolio or deploying a greenfield wireless network
remain viable, but less likely strategic options. DISH had
previously signaled its preference to participate in a network
infrastructure sharing arrangement to enter into the wireless
market as opposed to deploying a greenfield wireless network.
T-Mobile US, Inc. is the most likely carrier given its national
scope. To that end there has been significant speculation DISH
would be interested in acquiring Deutsche Telekom AG's 74% equity
stake (or a controlling portion thereof) in T-Mobile US, Inc.
(TMUS). The acquisition of a controlling stake in TMUS would
provide DISH with a wireless infrastructure platform and a
compelling spectrum position. DISH and TMUS as a combined entity
would have approximately 128MHz of wireless spectrum (DISH with 46
MHz and TMUS with 82 MHz of spectrum pro forma for its pending
purchase of 700 MHz spectrum from Verizon Wireless in the top
metro areas), which would be comparable with the leading wireless
operators.
DISH has received authorization from the FCC providing it with
flexibility in its use of AWS-4 spectrum, an extension to
applicable 700 MHz E Block interim and final build-out obligations
as well as a one-year extension of the AWS-4 final build-out date.
In exchange for this regulatory flexibility, DISH agreed to a
reduction in 700 MHz E Block maximum authorized power levels to
prevent interference with operations in adjacent spectrum bands.
Additionally, DISH agreed to participate in the upcoming H Block
auction conducted by the FCC and submit a bid equal to the reserve
price established by the FCC of approximately $1.56 billion or
$0.50 per MHz/POP.
Fitch regards the company's liquidity position as strong and
primarily supported by sizable cash and marketable securities
balances and expected, but diminishing free cash flow generation.
The company also benefits from a favorable maturity schedule, as
29% of the company's outstanding debt is scheduled to mature over
the next 4 years including $1 billion during 2014 followed by $750
million during 2015. DISH had a total of approximately $10.3
billion of cash and marketable securities (current portion) -
reflecting a strong increase compared with liquidity measures as
of year-end 2012. DISH DBS holds approximately $4.6 billion of
the consolidated $4.8 billion cash balance and nearly $4.0 billion
of consolidated $5.5 billion marketable securities balance. Fitch
notes, however, that the company does not maintain a revolver,
which increases DISH's reliance on capital market access to
refinance current maturities, elevating the refinancing risk
within the company's credit profile. The risk is offset by the
company's high cash balance and consistent access to capital
markets and strong execution.
DISH's free cash flow (defined as cash flow from operations less
capital expenditures and dividends) generation declined 47% during
the first nine months of 2013 to approximately $719 million when
compared to the same period during 2012. In addition to weak
operating results DISH's FCF generation has been hampered by
higher cash interest costs as cash interest expense ballooned 73%
during the first nine months of 2013 to $667 million versus $386
million during the same period of 2012. DISH's capital intensity
increased to 8.3% of revenue during the LTM period ended Sept. 30,
2013 versus 6.8% capital intensity during the year-ended 2012.
Higher capital intensity reflects higher subscriber acquisition
costs and limits FCF generation. Fitch expects capital intensity
will be relatively consistent over the near term and that capital
expenditures will continue to focus on subscriber retention and
capitalized subscriber premises equipment. The higher leverage
and weaker operating profile will continue to constrain FCF
generation over the ratings horizon. Fitch anticipates that DISH
will generate FCF ranging between $500 million to $650 million
annually absent further investment in a wireless network or other
strategic initiative.
Fitch believes there is limited capacity at the current ratings
category to accommodate DISH's inconsistent operating performance
as the company struggles to transform its branding strategy from a
value oriented service provider to a technology focused provider
targeting high-value subscribers.
Notwithstanding the company's efforts to grow its subscriber base,
DISH's subscriber base has stagnated ending Sept. 30, 2013 with
approximately 14 million subscribers, which is in line with DISH's
subscriber base as of Dec. 2009 (14.1 million subscribers). From
Fitch's perspective, the weak subscriber trends reflect the mature
multi-channel video programming distribution market place,
competition, and a tepid economic and housing recovery. Fitch
expects DBS-operator subscriber growth trends will continue to
moderate as 2014 unfolds. However, DISH's revenue trends have
improved as pricing actions have contributed to ARPU growth.
Higher programming and customer acquisition costs continue to
compress DISH's EBITDA margin. These factors contributed to a
4.4% year-over-year decline in DISH's third-quarter EBITDA.
EBITDA margin during the current period fell 129 basis points
compared to the third quarter of last year, to 18.6%.
Additional rating concerns center on DISH's ability to adapt to
the evolving competitive landscape, DISH's lack of revenue
diversity and narrow product offering relative to its cable MSO
and telephone company video competition, and an operating profile
and competitive position that continue to lag behind its peer
group. DISH's current operating profile is focused on its
maturing video service offering and lacks growth opportunities
relative to its competition.
Rating Sensitivities
Revision of the Outlook to Stable at the current rating level can
occur as the company demonstrates that it can execute its wireless
strategy in a credit-neutral manner. In addition, operating
metrics, in particular subscriber additions, ARPU growth and
EBITDA margins will need to begin to trend positive.
Fitch believes a negative rating action will likely coincide with
the company's decision to execute a wireless strategy, or other
discretionary management decisions that weaken its ability to
generate free cash flow, erode operating margins, and increase
leverage higher than 5x without a clear strategy to de-lever the
company's balance sheet.
Fitch has affirmed the following ratings with a Negative Rating
Outlook:
DISH Network Corporation
-- IDR at 'BB-'.
DISH DBS Corporation
-- IDR at 'BB-';
-- Senior unsecured notes at 'BB-'.
DOTS LLC: Proposes Donlin Recano as Claims Agent
------------------------------------------------
Dots LLC and its debtor-affiliates seek approval from the
bankruptcy court to employ Donlin Recano & Company, Inc., as
claims and noticing agent in their Chapter 11 cases.
Although the Debtors have not yet filed their schedules of assets
and liabilities, they anticipate that there will be thousands of
entities to be noticed. Donlin Recano specializes in noticing,
claims processing, and other administrative tasks necessary to
operate chapter 11 cases effectively.
Professionals at Donlin Recano will charge at these hourly rates:
Hourly Rates
------------
Senior Bankruptcy Consultant $185
Consultant $155 to $175
Case Manager $115 to $150
Technology/Programming Consultant $95 to $120
Analyst $70 to $110
Clerical $25 to $40
The firm will charge $0.09 per page for fax noticing and $0.02 per
page for electronic noticing. For claims docketing and management
services, the website development and hosting will be free of
charge and creditor data storage will cost $0.09 per creditor per
month.
Prior to the filing of the Chapter 11 Cases, the Debtors paid
Donlin Recano a retainer of $15,000.
According to the Debtors, Donlin has represented that it neither
holds nor represents any interest materially adverse to the
Debtors, their estates or their creditors with respect to matters
upon which it is to be engaged and that it is a "disinterested
person," as defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
DONLIN, RECANO & COMPANY, INC.
Re: Dots, LLC, et al.
P.O. Box 899
Madison Square Station
New York, NY 10010
Tel: (212) 771-1128
About Dots, LLC
Dots is a retailer of fashionable clothing, accessories, and
footwear for price-conscious women. Dots provides missy and plus
size choices to fashion savvy 25 to 35 year old women at
approximately 400 retail stores throughout the Midwest, East, and
South United States. Dots' workforce includes 3,500 individuals
in their stores, distribution center, and corporate headquarters.
Dots, LLC, and its affiliates sought bankruptcy protection under
Chapter 11 of the Bankruptcy Code (Bankr. D.N.J. Lead Case No.
14-11016) on Jan. 20, 2014, to sell some or all of its assets.
Lowenstein Sandler LLP serves as counsel to the Debtors.
PricewaterhouseCoopers LLP is financial advisor and investment
banker. Donlin, Recano & Company, Inc., is the claims and notice
agent.
As of the Petition Date, the Debtors have outstanding secured debt
owed to senior lender Salus Capital Partners, LLC, of which
$14.5 million remains outstanding under a revolving facility and
$16.1 million is owed under a term facility. The Debtors also
have not less than $17 million outstanding under subordinated term
loan agreements with Irving Place Capital Partners III L.P. ("IPC)
and related entities. Moreover, the Debtors have aggregate
unsecured debts of $47.0 million.
Salus, the prepetition senior lender and DIP lender, is
represented by Morgan, Lewis & Bockius, LLP. The prepetition
subordinated lenders are represented by Okin Hollander & DeLuca,
LLP.
The Company has arranged to borrow $36 million to keep operating
as it reorganizes under court protection.
DOTS LLC: Taps PwC as Financial Advisor and Investment Banker
-------------------------------------------------------------
Dots LLC and its debtor-affiliates ask the bankruptcy court for
approval to employ PricewaterhouseCoopers LLP as financial advisor
and investment banker, effective as of the Petition Date.
The Debtors say it is essential for them to employ an experienced
restructuring advisory firm to provide the foregoing advisory and
investment banking services.
The Debtors will pay PwC as advisory fee $125,000 for the 30-day
period beginning Jan. 23, 2014 and $100,000 per month on the 23rd
of each month thereafter. The Debtors further agree (with the
consent of their lenders under the debtor-in-possession financing
facility) to pay PwC, as additional fee, a cash fee from the
proceeds of a "transaction" in an amount equal to 2.0% of the
aggregate consideration paid with certain exceptions. Twenty-five
percent of the advisory fee will be credited against any
additional fee.
In the event the fees will be based on hourly rates, individual
hourly rates vary according to the experience and skill required.
The fees will be based on these agreed upon hourly rates:
Personnel Hourly Billing Rate
--------- -------------------
Partner/Principal $700 to $800
Director/Senior Manager $500 to $600
Manager $400 to $500
Senior Associate $300 to $400
Associate $200 to $300
Para-professional $100 to $150
Finally, the Debtors will reimburse PwC for the reasonable out-of-
pocket expenses it incurs in connection with its services.
PwC was engaged by the Debtors on or about Dec. 23, 2013 in
connection with its financial advisory, restructuring and
investment banking services, and has since assisted the Debtors in
evaluating their restructuring alternatives. The Debtors paid PwC
$170,000, representing $150,000 of advisory fees and $20,000 in
out-of-pocket expenses. The entire payment has been fully applied
against actual charges incurred to date.
Perry Mandarino, a partner with PwC, attests that the firm does
not hold an interest adverse to the Debtors' estates and is a
"disinterested person", as that term is defined in Section 101(14)
of the Bankruptcy Code.
The firm can be reached at:
Perry Mandarino
Partner
PRICEWATERHOUSECOOPERS LLP
300 Madison Avenue, 24th Floor
New York, NY 10017
About Dots, LLC
Dots is a retailer of fashionable clothing, accessories, and
footwear for price-conscious women. Dots provides missy and plus
size choices to fashion savvy 25 to 35 year old women at
approximately 400 retail stores throughout the Midwest, East, and
South United States. Dots' workforce includes 3,500 individuals
in their stores, distribution center, and corporate headquarters.
Dots, LLC, and its affiliates sought bankruptcy protection under
Chapter 11 of the Bankruptcy Code (Bankr. D.N.J. Lead Case No.
14-11016) on Jan. 20, 2014, to sell some or all of its assets.
Lowenstein Sandler LLP serves as counsel to the Debtors.
PricewaterhouseCoopers LLP is financial advisor and investment
banker. Donlin, Recano & Company, Inc., is the claims and notice
agent.
As of the Petition Date, the Debtors have outstanding secured debt
owed to senior lender Salus Capital Partners, LLC, of which
$14.5 million remains outstanding under a revolving facility and
$16.1 million is owed under a term facility. The Debtors also
have not less than $17 million outstanding under subordinated term
loan agreements with Irving Place Capital Partners III L.P. ("IPC)
and related entities. Moreover, the Debtors have aggregate
unsecured debts of $47.0 million.
Salus, the prepetition senior lender and the DIP lender, is
represented by Morgan, Lewis & Bockius, LLP. The prepetition
subordinated lenders are represented by Okin Hollander & DeLuca,
LLP.
The Company has arranged to borrow $36 million to keep operating
as it reorganizes under court protection.
DOTS LLC: Proposes Lowenstein Sandler as Bankruptcy Counsel
-----------------------------------------------------------
Dots LLC and its debtor-affiliates ask the bankruptcy court for
approval to employ Lowenstein Sandler as their counsel in
connection with the filing and prosecution of the Chapter 11
cases, effective as of the Petition Date.
Lowenstein Sandler's current hourly rates are:
Personnel Hourly Billing Rate
--------- -------------------
Partners $500 to $985
Senior Counsel and Counsel $385 to $685
Associates $275 to $480
Paralegals and Legal Assistants $160 to $270
Prepetition, Lowenstein Sandler represented the Debtors in
connection with preparation for the bankruptcy filing. Lowenstein
Sandler commenced its representation of the Debtors in late
November 2013. Lowenstein Sandler was paid by the Debtors for the
services rendered prepetition. As of the Petition Date,
Lowenstein Sandler held a retainer in the amount of $261,621.
Kenneth A. Rosen, Esq., a partner with Lowenstein Sandler, avers
that the firm does not hold or represent an interest adverse to
the Debtors' estates and is a disinterested person, as that term
is defined in Section 101(14) of the Bankruptcy Code.
The Executive Office for United States Trustees recently adopted
new Guidelines for Reviewing Applications for Compensation and
Reimbursement of Expenses Filed under 11 U.S.C. Sec. 330 by
Attorneys in Larger Chapter 11 Cases -- so-called Appendix B
Guidelines. Lowenstein Sandler said it intends to make a
reasonable effort to comply with the U.S. Trustee's requests for
information and additional disclosures as set forth in the
Appendix B Guidelines both in connection with the employment
application and the interim and final fee applications to be filed
by Lowenstein Sandler in the course of its engagement. Lowenstein
Sandler intends to work cooperatively with the U.S. Trustee
Program to address the concerns that prompted the EOUST to adopt
the Appendix B Guidelines.
About Dots, LLC
Dots is a retailer of fashionable clothing, accessories, and
footwear for price-conscious women. Dots provides missy and plus
size choices to fashion savvy 25 to 35 year old women at
approximately 400 retail stores throughout the Midwest, East, and
South United States. Dots' workforce includes 3,500 individuals
in their stores, distribution center, and corporate headquarters.
Dots, LLC, and its affiliates sought bankruptcy protection under
Chapter 11 of the Bankruptcy Code (Bankr. D.N.J. Lead Case No. 14-
11016) on Jan. 20, 2014, to sell some or all of its assets.
Lowenstein Sandler LLP serves as counsel to the Debtors.
PricewaterhouseCoopers LLP is financial advisor and investment
banker. Donlin, Recano & Company, Inc., is the claims and notice
agent.
As of the Petition Date, the Debtors have outstanding secured debt
owed to senior lender Salus Capital Partners, LLC, of which
$14.5 million remains outstanding under a revolving facility and
$16.1 million is owed under a term facility. The Debtors also
have not less than $17 million outstanding under subordinated term
loan agreements with Irving Place Capital Partners III L.P. ("IPC)
and related entities. Moreover, the Debtors have aggregate
unsecured debts of $47.0 million.
Salus, the prepetition senior lender and the DIP lender, is
represented by Morgan, Lewis & Bockius, LLP. The prepetition
subordinated lenders are represented by Okin Hollander & DeLuca,
LLP.
The Company has arranged to borrow $36 million to keep operating
as it reorganizes under court protection.
DOTS LLC: Has $36 Million DIP Financing From Salus, IPC
-------------------------------------------------------
Dots LLC and its debtor-affiliates ask the bankruptcy court for
approval to enter into a senior secured, superpriority post-
petition credit facility from Salus Capital Partners, LLC, as
administrative and collateral agent, and other lenders in the
aggregate amount of up to $36,000,000.
As of the Petition Date, the Debtors have outstanding secured debt
owed to senior lender Salus Capital Partners, LLC, of which
$14.5 million remains outstanding under a revolving facility and
$16.1 million is owed under a term facility. The Debtors also
have not less than $10.35 million outstanding under a subordinated
term loan agreement with Irving Place Capital Partners III L.P.,
Irving Place Capital III Feeder Fund, L.P., Irving Place Capital
Partners III Coinvestors L.P.
As of the Petition Date, the Debtors have outstanding secured debt
owed to senior lender Salus Capital Partners, LLC, of which
$14.5 million remains outstanding under a revolving facility and
$16.1 million is owed under a term facility. The Debtors also
have not less than $17 million outstanding under subordinated term
loan agreements with Irving Place Capital Partners III L.P. ("IPC)
and related entities.
The Debtors' existing obligations under the prepetition senior
credit agreement will be rolled-up and replaced by the DIP
Financing Facility.
In addition, certain affiliates of IPC have agreed to participate
in the DIP Financing Facility pursuant to a separate participation
agreement, pursuant to which the IPC affiliates will hold a
participation interest in the DIP term loan.
The Debtors also seek approval to use cash collateral.
In the ordinary course of business, the Debtors use cash on hand
and cash flow from operations to fund working capital, inventory
purchases, capital expenditures, and other general corporate
purposes.
Lisa Rhodes, the CEO, says that if the Financing Motion is
granted, the DIP Financing Facility will provide the Debtors the
liquidity they need to continue to operate through a plan of
reorganization or sale process pursuant to Section 363 of the
Bankruptcy Code.
Other salient terms of the DIP facility are:
-- The postpetition credit facility will consist of (i) a
revolving loan in the maximum principal amount of $20,000,000 and
(ii) a term loan in the amount of $16,000,000.
-- All obligations under the DIP facility will constitute
administrative expense of the loan parties. Subject only to the
carve-out, the administrative claim will have priority over any
and all administrative expense claims.
-- There will be a carve-out of $350,000 with respect to
counsel for the Debtors and $50,000 with respect to allowed
professional fees of the Committee's case professionals.
-- Interest pricing would be LIBO Rate + 8.50% for the DIP
revolver and LIBO Rate + 9.25% for the DIP Term Loan.
-- Upon the occurrence and during the continuance of an Event
of Default, the interest rate and the letter of credit fees will
be increased to 4% above the amounts otherwise applicable.
-- The Debtors are subject to certain bankruptcy milestone
covenants:
* Jan. 27, 2014: Distribute to all interest informational
packages and solicitations for bids in connection with a going
concern sale or a Remainder Chain Liquidation, with due diligence
materials
* Feb. 14, 2014: Receive a stalking horse bid for a
going concern sale or Remainder Chain Liquidation that is
reasonably acceptable to Agent, or file a motion seeking approval
of bidding procedures (including bid protections for one or more
stalking-horse bids) for a going concern sale or remainder chain
liquidation,
* Feb. 21, 2014: Obtain an order of the Court extending the
time to assume or reject leases to a date not less than 210 days
after the Petition Date
* Feb. 21, 2014: Obtain approval of the bid procedures and
stalking horse bids
* March 3, 2014: Obtain approval of a Sale Transaction in
an amount sufficient to repay the DIP Obligations and Prepetition
Obligations in full, including Cash Collateralization of all L/C
Obligations and funding of the Indemnity Account
* March 4, 2014: If the approved Sale Transaction is a Full
Chain Liquidation, execute agency documents or other documents to
effect the sale; if the approved Sale Transaction includes a going
concern sale, execute all sale documents for such transaction and
all documents necessary to effect the Remainder Chain Liquidation,
if any.
A copy of the DIP credit agreement, as revised, is available for
free at:
http://bankrupt.com/misc/DOTS_DIP_Agreement_Rev.pdf
A copy of the proposed interim order, as revised, is available for
free at:
http://bankrupt.com/misc/DOTS_DIP_Prop_Order_Rev.pdf
About Dots, LLC
Dots is a retailer of fashionable clothing, accessories, and
footwear for price-conscious women. Dots provides missy and plus
size choices to fashion savvy 25 to 35 year old women at
approximately 400 retail stores throughout the Midwest, East, and
South United States. Dots' workforce includes 3,500 individuals
in their stores, distribution center, and corporate headquarters.
Dots, LLC, and its affiliates sought bankruptcy protection under
Chapter 11 of the Bankruptcy Code (Bankr. D.N.J. Lead Case No.
14-11016) on Jan. 20, 2014, to sell some or all of its assets.
Lowenstein Sandler LLP serves as counsel to the Debtors.
PricewaterhouseCoopers LLP is financial advisor and investment
banker. Donlin, Recano & Company, Inc., is the claims and notice
agent.
As of the Petition Date, the Debtors have outstanding secured debt
owed to senior lender Salus Capital Partners, LLC, of which
$14.5 million remains outstanding under a revolving facility and
$16.1 million is owed under a term facility. The Debtors also
have not less than $17 million outstanding under subordinated term
loan agreements with Irving Place Capital Partners III L.P. ("IPC)
and related entities. Moreover, the Debtors have aggregate
unsecured debts of $47.0 million.
Salus, the prepetition senior lender and the DIP lender, is
represented by Morgan, Lewis & Bockius, LLP. The prepetition
subordinated lenders are represented by Okin Hollander & DeLuca,
LLP.
The Company has arranged to borrow $36 million to keep operating
as it reorganizes under court protection.
EASTERN HILLS: Yaquinto Named Chapter 11 Trustee
------------------------------------------------
William T. Neary, the United States Trustee for the Northern
District of Texas, sought and obtained approval from the U.S.
Bankruptcy Court to appoint Robert Yaquinto as chapter 11 trustee
in the bankruptcy case of Eastern Hills Country Club.
The U.S. Trustee consulted with Richard Ward, counsel for debtor;
Reedy Spigner, counsel for Agricredit Acceptance, LLC; Donald
Cothern, counsel for PNC Equipment Finance, and Jay Hurst,
representing the Texas Comptroller of Public Accounts.
In its order, the Court held that the debtor may not spend any
funds without the authorization of the chapter 11 trustee, and
David Harvey, the Debtor's current President is ordered to fully
cooperate and communicate with the chapter 11 trustee.
On January 8, 2014, the Motion of the U.S. Trustee to convert this
case to chapter 7 under 11 U.S.C. Sec. 1112(b).
The Court said that, based on the evidence and argument presented,
it is in best of interests of creditors to appoint a chapter 11
trustee. The Court finds cause to include:
i) operating with a final cash collateral order;
ii) violation of 11 U.S.C. Sec. 363;
iii) failure to comply with court orders including adequate
protection order iv) inadequate monthly operating reports;
iv) delinquent post-petition payroll taxes; and
v) overall mismanagement of the debtor.
Trial attorney for the case is Nancy S. Resnick.
About Eastern Hills
Eastern Hills Country Club filed a bare-bones Chapter 11 petition
(Bankr. N.D. Tex. Case No. 13-33123) in Dallas on June 21, 2013.
The Debtor estimated at least $10 million in assets and less than
$1 million in liabilities. The petition was signed by David
Harvey as president. Judge Stacey G. Jernigan presides over the
case. Richard W. Ward, Esq., serves as the Debtor's counsel.
According to Web site, http://www.easternhillscc.com,the Eastern
Hills Country Club in Garland Texas, was established in 1954 and
boasts a Ralph Plummer designed 18-hole golf course, 5,000 sq.
foot putting green, practice facility, and driving range. The
golf course has been home of the Texas Womens Open since 2011.
The Department of the Treasury, Internal Revenue Service, the
State of Texas and VGM Financial Services, 1111 W. San Marnan,
Waterloo, IA 50701 assert interest on inventory, accounts
receivable and proceeds.
EDISON MISSION: Peabody Wants $45-Mil. for Assumption of MWG Pact
-----------------------------------------------------------------
Peabody COALSALES, LLC, submitted an objection to the assumption
by Edison Mission Energy's debtor-affiliate Midwest Generation LLC
of a coal supply agreement and the Debtors' assertion of $0 "cure
costs" associated with the assumption.
Pursuant to a Coal Supply Agreement dated February 14, 2007, MWG
committed to purchase coal from Peabody through the end of the
2016 calendar year.
Following the bankruptcy filing in December 2012, MWG breached and
continues to breach the Agreement. Specifically, beginning on
Feb. 28, 2013, MWG failed and refused to purchase coal from
Peabody in the quantities and at the purchase prices required
under said Agreement. Furthermore, MWG failed and refused to honor
its obligations to Peabody under said Agreement with regards to
any additional coal quantities that it purchased during 2013.
Pursuant to paragraph 20 of the Disclosure Statement Approval
Order, the Debtors purported to serve on Peabody a Notice to
Agreement and Lease Counterparties dated Dec. 19, 2013, wherein
the Debtors: (a) noted the possibility that MWG might attempt to
assume the parties' Long-Term Coal Supply Agreement under the
terms of the Proposed Chapter 11 Plan; and (b) asserted that the
"Cure Costs" currently owing under the Agreement are "$0.00."
Peabody maintains that the Cure Costs to date with respect to
MWG's failure to purchase coal from Peabody in the quantities and
at the purchase prices required under the Supply Agreement as well
as its failure to honor its obligations to Peabody with regards to
any additional coal quantities purchased, are in excess of
$45,000,000.
Because the Long-Term Coal Supply Agreement contains highly
sensitive commercial information which, if publicly disclosed,
might provide Peabody's and/or MWG's competitors with an unfair
advantage, Peabody has not attached a copy of the Agreement to its
objection.
Peabody is represented by:
THOMPSON COBURN LLP
Lauren Newman, Esq.
David D. Farrell, Esq.
55 East Monroe Street, 37th Floor
Chicago, IL 60603
Phone: (312) 346-7500
Fax: (312) 782-3659
E-mail: lnewman@thompsoncoburn.com
dfarrell@thompsoncoburn.com
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 also
represented by James H.M. Sprayregen, P.C., Sarah Hiltz Seewer,
Esq., and Seth A. Gastwirth, Esq., at Kirkland & Ellis LLP, in
Chicago, Illinois; and Joshua A. Sussberg, Esq., at Kirkland &
Ellis LLP, in New York. Debtor Camino Energy Company is
represented by David A. Agay, Esq., and Joshua Gadharf, Esq., at
McDonald Hopkins LLC, in Chicago, Illinois.
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.
EME's Second Amended Joint Plan of Reorganization is up for
approval at a Feb. 19, 2014 confirmation hearing, and provides for
the sale of all or substantially all of Debtors MWG, EME, and
Midwest Generation EME, LLC, will be sold to NRG Energy, Inc.
EDISON MISSION: USDA Says Cooperative Agreement Can't Be Assumed
----------------------------------------------------------------
The United States Department of Agriculture, Animal and Plant
Health Inspection Service, Wildlife Services ("USDA"), objects to
the assumption of a purported contract between USDA and the
Debtor, Midwest Generation EME, LLC, a debtor-affiliate of Edison
Mission.
Midwest served the USDA with a "Notice to Contract and Lease
Counterparties", notifying the USDA of Midwest's intention to
assume a contract. Midwest did not serve a copy of the contract.
Instead, the Notice simply described the contract as a "Short Form
Services Terms and Conditions." According to USDA, Midwest's
Notice was inadequate for the USDA to determine what contract
Midwest seeks to assume.
USDA says to the extent that the Debtors intend to assume a
cooperative service agreement entered into with Midwest
Generation, LLC on Sept. 16, 2003, the Debtors cannot do so.
Because the cooperative service agreement expired on Sept. 30,
2006, it cannot be assumed, USDA tells the Court.
USDA's representative can be reached at:
Joel R. Nathan
Assistant U.S. Attorney
219 S. Dearborn St., 5th Floor
Chicago, IL 60604
Tel: (312) 353-5300
E-mail: joel.nathan@usdoj.gov
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 also
represented by James H.M. Sprayregen, P.C., Sarah Hiltz Seewer,
Esq., and Seth A. Gastwirth, Esq., at Kirkland & Ellis LLP, in
Chicago, Illinois; and Joshua A. Sussberg, Esq., at Kirkland &
Ellis LLP, in New York. Debtor Camino Energy Company is
represented by David A. Agay, Esq., and Joshua Gadharf, Esq., at
McDonald Hopkins LLC, in Chicago, Illinois.
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.
EME's Second Amended Joint Plan of Reorganization is up for
approval at a Feb. 19, 2014 confirmation hearing, and provides for
the sale of all or substantially all of Debtors MWG, EME, and
Midwest Generation EME, LLC, will be sold to NRG Energy, Inc.
EXGEN RENEWABLES I: Moody's Rates $300MM First Lien Loan 'Ba3'
--------------------------------------------------------------
Moody's Investors Service assigned a Ba3 rating to ExGen
Renewables I, LLC's (ExGen Renewables or Holdco) $300 million
first lien term loan. Concurrent with this rating assignment,
Moody's also affirmed Continental Wind, LLC's (CW or Opco) Baa3
senior secured rating. The outlook is stable for both entities.
ExGen Renewables indirectly owns CW, which owns a 667 MW portfolio
of thirteen operating wind projects spread over six states. All
of the projects have long-term contracts with a cash flow weighted
average life of 19 years and the projects reached commercial
operations from 2008 through 2012. Suzlon/RePower, Vestas,
Nordex, and GE supply the wind turbines. The respective original
turbine manufacturer (OEM) provides operations and maintenance
(O&M) for the wind turbines and these contracts have a cash flow
weighted average life of over 9 years. ExGen Renewables is
indirectly owned by Exelon Corporation (Exelon, Baa2-stable).
Proceeds from the debt offering will be used to pay a dividend to
its owner and pay for transaction costs resulting in an estimated
consolidated debt to total capitalization of around 78% using book
equity as of September 30, 2013.
Summary Rating Rationale
Holdco's Ba3 rating reflects indirect ownership of Opco, which
benefits from long-term off-take agreements with mostly
creditworthy entities, long-term O&M agreements, and wind resource
diversity with three strongly distinct wind regimes (five total).
The Opco portfolio also enjoys technology diversity as well as
having most of its plants located in states with renewable
portfolio requirements. Additionally, Holdco benefits from the
existence of certain project finance features including a 1st lien
on stock and accounts, a 100% excess cash sweep, and an Exelon
backed debt service reserve (DSRA) sized to 12 months.
That said, Holdco's rating also considers Opco's key risks
including wind resource uncertainty, exposure to turbine OEMs with
weak credit characteristics, some operational and curtailment
issues, and concentration in Michigan representing around 62% of
cash flows through Opco debt maturity. Additional risks
applicable to ExGen Renewables are weak consolidated financial
metrics under Moody's case, structural subordination, and likely
refinancing risk. Holdco's structural subordination exposes
Holdco lenders to greater potential loss given default given its
subordination to $613 million of Opco debt and the possibility of
no cash flow being available to service Holdco debt if Opco's
restricted payment test is triggered. Moody's views the liquidity
provided by the 12-month DSRA as providing Holdco materially
greater resiliency under stress situations such as a the
triggering of Opco's restricted payment test.
Under Moody's cases, we expect consolidated DSCR in the 1.1x to
1.2x range and FFO/Debt in the 4% to 5% range. Holdco only
financial metrics are stronger at 1.4x to 1.7x range for DSCR and
5% to 7% range for FFO/Debt. This forecast incorporates
conservative assumptions including higher O&M and discounts to
merchant price assumptions. Regarding energy production, Moody's
examined the P90 1-year scenario as well as the P90 10-year
scenario given the existence of the 100% excess cash sweep. The
borrower's base case (P50) has stronger financial metrics with
consolidated DSCR of above 1.3x and consolidated FFO/Debt above
6%. While very little debt remains at maturity under the
borrower's base case, approximately 50% to 60% of the debt is
outstanding under the Moody's cases examined. However, Moody's
views the refinancing risk as sufficiently mitigated given the
combination of approximately 12 --years of remaining contracted
cash flow after the Holdco debt maturity, the conservative
assumptions incorporated in the Moody's cases, and the existence
of a 100% excess cash sweep.
The Holdco financing results in a 50% increase in total
consolidated debt, which is a credit negative for Opco. However,
the rating affirmation considers the protections afforded to Opco
creditors from ring fencing like mechanisms in place as well as
the project finance protections, including the existence of a 1.2x
restricted payments test and generally strict limitations on
additional debt or assets. Further material increases in total
leverage, a weakening of the ring fencing or deterioration of
Holdco's credit quality are likely to have negative rating
implications for Opco.
Key Credit Strengths
-- Long term contracts with mostly strong off-takers and have
fixed prices
-- Thirteen projects spread across six states provide
diversification benefits
-- O&M contracts with OEMs contain warranties and minimum
performance requirements that protect the Project against
turbine underperformance
-- Holdco is fully owned by a strong, investment grade rated
Sponsor
-- Majority of the projects are located in states with
renewable portfolio standards
-- Holdco's project finance protections include 1st lien on
stock, 100% excess cash sweep, and a 12-month DSRA
Key Credit Weakness
-- Inherent wind resource volatility is a major driver of cash
flow uncertainty, although several of the smaller wind farms
have multiple years of operating history
-- The Michigan-based projects provide roughly 62% of cash flow
through Opco debt maturity that limits wind resource
diversity
-- Several of the wind farms are exposed to operational and
curtailment issues
-- Some of the off-take agreements have features which could
result in reduced cash flow including limited or no
curtailment compensation
-- High consolidated leverage at approximately 78% and
structural subordination of Holdco's debt to $613 million of
Opco debt
-- Low consolidated cash flow metrics under Moody's cases
Holdco and Opco's stable rating outlooks consider the durability
and extended tenor of the contracted cash flow and the resulting
financial performance at both levels under rather conservative
assumptions in the respective Moody's cases over time.
Factors that could positively affect Holdco's rating include
substantial debt reduction, strong operating performance at CW,
and sustained consolidated financial metrics comfortably in the
'Ba' category. Factors that could positively affect the Opco's
rating include elimination of Holdco debt, DSCR above 1.9x on a
sustained basis, substantial improvement in OEM credit quality,
and strong operational performance.
Factors that could result in negative rating action for Holdco or
Opco include financial performance materially below Moody's
expectations, major operating problems or significant off-
counterparty credit quality deterioration.
The rating is predicated upon final documentation in accordance
with Moody's current understanding of the transaction and final
debt sizing and model outputs consistent with initially projected
credit metrics and cash flows.
ExGen Renewables indirectly owns CW, which owns a 667 MW portfolio
of thirteen operating wind projects spread over six states. CW's
plants benefit from long-term contracts and they reached
commercial operations from 2008 through 2012. ExGen Renewables is
indirectly owned by Exelon, a utility holding company that has
both unregulated and regulated operations with approximately
34,700 MW of generation and more than 6.6 million regulated
electricity and natural gas customers. In 2012, Exelon's revenues
totaled $23.5 billion and assets totaled $79 billion.
FINJAN HOLDINGS: 4th Amendment to 21.5MM Shares Resale Prospectus
-----------------------------------------------------------------
Finjan Holdings, Inc., amended its Form S-1 registration statement
relating to the offer and resale or other disposition from time to
time by BCPI I, L.P., Israel Seed IV, L.P., HarbourVest
International Private Equity Partners IV Direct Fund L.P., et al.,
of up to 21,556,447 shares of the common stock, par value $0.0001
per share, of Finjan Holdings, Inc. The Company will not receive
any proceeds from the sale of shares held by the selling
stockholders.
The Company's common stock is quoted on the OTC Bulletin Board and
OTC Markets - OTCQB tier under the symbol "FNJN." The Company
effected a 1-for-12 reverse stock split of its common stock, and
its common stock commenced trading on a post-split basis, on
Aug. 22, 2013. On Jan. 16, 2014, the last reported closing bid
price for the Company's common stock as reported on the OTCQB tier
of the OTC Markets was $5.50 per share. These over-the-counter
quotations reflect inter-dealer prices, without retail mark-up,
mark-down or commission and may not necessarily represent actual
transactions.
The Company amended the registration statement to delay its
effective date until the Company will file a further amendment
which specifically states that this registration statement will
thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement will
become effective on such date as the Commission, acting pursuant
to said Section 8(a), may determine.
A copy of the Form S-1/A is available for free at:
http://is.gd/yKZtG5
About Finjan
Finjan, formerly known as Converted Organics, is a leading online
security and technology company which owns a portfolio of patents,
related to software that proactively detects malicious code and
thereby protects end-users from identity and data theft, spyware,
malware, phishing, trojans and other online threats. Founded in
1997, Finjan is one of the first companies to develop and patent
technology and software that is capable of detecting previously
unknown and emerging threats on a real-time, behavior-based basis,
in contrast to signature-based methods of intercepting only known
threats to computers, which were previously standard in the online
security industry.
Converted Organics disclosed a net loss of $8.42 million in 2012,
as compared with a net loss of $17.98 million in 2011. Finjan
Holdings's balance sheet at Sept. 30, 2013, showed $30.35
million in total assets, $927,000 in total liabilities and $29.42
million in total stockholders' equity.
Moody, Famiglietti & Andronico, LLP, in Tewksbury, Massachusetts,
issued a "going concern" qualification on the consolidated
financial statements for the year ended Dec. 31, 2012, citing
recurring losses and negative cash flows from operations and an
accumulated deficit that raises substantial doubt about the
Company's ability to continue as a going concern.
GMX RESOURCES: First Amended Joint Plan Confirmed
-------------------------------------------------
Judge Sarah A. Hall of the U.S. Bankruptcy Court for the Western
District of Oklahoma confirmed GMX Resources Inc., et al.'s First
Amended Joint Plan of Reorganization after determining that the
Plan satisfied the confirmation requirements of the Bankruptcy
Code.
The Plan, as revised on Jan. 22, 2014, provides that the senior
secured noteholder secured claims will be deemed allowed in the
amount of $338.0 million. Each holder of a Senior Secured
Noteholder Secured Claim will receive a number of shares of
reorganized GMXR Common Stock with a value equal to the lesser of
(A) 100% of the Face Amount of that Holder's Allowed Senior
Secured Noteholder Secured Claim and (B) the greater of either (i)
27% of the Face Amount the Holder's Allowed Senior Secured
Noteholder Secured Claim or (ii) 4.9% of the outstanding
Reorganized GMXR Common Stock as of the Effective Date.
A full-text copy of the Jan. 22 version of the Plan is available
for free at http://bankrupt.com/misc/GMXplan0122.pdf
The Debtors are represented by William H. Hoch, Esq., and
Christopher M. Staine, Esq., at CROWE & DUNLEVY, P.C., in Oklahoma
City, Oklahoma; and David A. Zdunkewicz, Esq., Timothy A. Davidson
II, Esq., and Joseph Rovira, Esq., at ANDREWS KURTH LLP, in
Houston, Texas.
About GMX Resources
GMX Resources Inc. -- http://www.gmxresources.com/-- is an
independent natural gas production company headquartered in
Oklahoma City, Oklahoma. GMXR has 53 producing wells in Texas &
Louisiana, 24 proved developed non-producing reservoirs, 48 proved
undeveloped locations and several hundred other development
locations. GMXR has 9,000 net acres on the Sabine Uplift of East
Texas. GMXR has 7 producing wells in New Mexico.
GMX filed a Chapter 11 petition in its hometown (Bankr. W.D. Okla.
Case No. 13-11456) on April 1, 2013, so secured lenders can buy
the business in exchange for $324.3 million in first-lien notes.
GMX listed assets for $281.1 million and liabilities totaling
$458.5 million.
GMX missed a payment due in March 2013 on $51.5 million in second-
lien notes. Other principal liabilities include $48.3 million in
unsecured convertible senior notes.
The DIP financing provided by senior noteholders requires court
approval of a sale within 75 days following approval of sale
procedures. The lenders and principal senior noteholders include
Chatham Asset Management LLC, GSO Capital Partners, Omega Advisors
Inc. and Whitebox Advisors LLC.
David Zdunkewicz, Esq., Timothy A. Davidson II, Esq., and Joseph
Rovira, Esq., at ANDREWS KURTH LLP, serves as the Debtors'
counsel. Special Local Counsel, Conflicts Counsel and Litigation
Counsel for the Debtors are William H. Hoch, Esq., and Christopher
M. Staine, Esq., at CROWE & DUNLEVY, P.C.
Counsel to Backstop Lenders under DIP Financing and Steering
Committee of Holders of Senior Secured Notes are Brian Hermann,
Esq., and Sarah Harnett, Esq., at PAUL, WEISS, RIFKIND, WHARTON &
GARRISON LLP.
Counsel to the Unsecured Creditors Committee is Jason Brookner,
Esq., at LOOPER REED & MCGRAW P.C. Looper Reed replaced Winston &
Strawn LLP, effective as of April 25, 2013. The Committee tapped
Conway MacKenzie, Inc., as financial advisor.
HEALTHWAREHOUSE.COM INC: Llyod Miller Stake at 8.1% as of Jan. 17
-----------------------------------------------------------------
In an amended Schedule 13D filed with the U.S. Securities and
Exchange Commission, Lloyd I. Miller, III, disclosed that as of
Jan. 17, 2014, he beneficially owned 2,276,607 shares of common
stock of HealthWarehouse.com, Inc., representing 8.1 percent of
the shares outstanding. Mr. Miller previously reported beneficial
ownership of 2,176,015 common shares or 8.3 percent equity stake
as of May 7, 2013. A copy of the regulatory filing is available
for free at http://is.gd/PlrBdZ
About HealthWarehouse.com
HealthWarehouse.com, Inc., headquartered in Florence, Kentucky,
is a U.S. licensed virtual retail pharmacy ("VRP") and healthcare
e-commerce company that sells brand name and generic prescription
drugs as well as over-the-counter ("OTC") medical products.
Marcum LLP, in New York, issued a "going concern" qualification on
the consolidated financial statements for the year ended Dec. 31,
2012, citing significant losses and the need to raise additional
funds to meet the Company's obligations and sustain its
operations.
The Company reported a net loss of $5.57 million on $11.08 million
of net sales for the year ended Dec. 31, 2012, as compared with a
net loss of $5.71 million on $10.36 million of net sales during
the prior year.
The Company's balance sheet at Sept. 30, 2013, showed $1.52
million in total assets, $5.97 million in total liabilities and a
$4.45 million total stockholders' deficiency.
Bankruptcy Warning
"The Company recognizes it will need to raise additional capital
in order to fund operations, meet its payment obligations and
execute its business plan. There is no assurance that additional
financing will be available when needed or that management will be
able to obtain financing on terms acceptable to the Company and
whether the Company will become profitable and generate positive
operating cash flow. If the Company is unable to raise sufficient
additional funds, it will have to develop and implement a plan to
further extend payables, attempt to extend note repayments,
attempt to negotiate the preferred stock redemption and reduce
overhead until sufficient additional capital is raised to support
further operations. There can be no assurance that such a plan
will be successful. If the Company is unable to obtain financing
on a timely basis, the Company could be forced to sell its assets,
discontinue its operation and /or seek reorganization under the
U.S. bankruptcy code," the Company said in its quarterly report
for the period ended Sept. 30, 2013.
HEALTHWAREHOUSE.COM INC: Todd Hixon Stake at 6.8% as of Dec. 13
---------------------------------------------------------------
In an amended Schedule 13D filed with the U.S. Securities and
Exchange Commission, Todd L. Hixon and his affiliates disclosed
that as of Dec. 13, 2013, they beneficially owned 1,829,786 shares
of common stock of HealthWarehouse.com, Inc., representing 6.83
percent of the shares outstanding. A copy of the regulatory
filing is available for free at http://is.gd/pybWip
About HealthWarehouse.com
HealthWarehouse.com, Inc., headquartered in Florence, Kentucky,
is a U.S. licensed virtual retail pharmacy ("VRP") and healthcare
e-commerce company that sells brand name and generic prescription
drugs as well as over-the-counter ("OTC") medical products.
Marcum LLP, in New York, issued a "going concern" qualification on
the consolidated financial statements for the year ended Dec. 31,
2012, citing significant losses and the need to raise additional
funds to meet the Company's obligations and sustain its
operations.
The Company reported a net loss of $5.57 million on $11.08 million
of net sales for the year ended Dec. 31, 2012, as compared with a
net loss of $5.71 million on $10.36 million of net sales during
the prior year.
The Company's balance sheet at Sept. 30, 2013, showed $1.52
million in total assets, $5.97 million in total liabilities and a
$4.45 million total stockholders' deficiency.
Bankruptcy Warning
"The Company recognizes it will need to raise additional capital
in order to fund operations, meet its payment obligations and
execute its business plan. There is no assurance that additional
financing will be available when needed or that management will be
able to obtain financing on terms acceptable to the Company and
whether the Company will become profitable and generate positive
operating cash flow. If the Company is unable to raise sufficient
additional funds, it will have to develop and implement a plan to
further extend payables, attempt to extend note repayments,
attempt to negotiate the preferred stock redemption and reduce
overhead until sufficient additional capital is raised to support
further operations. There can be no assurance that such a plan
will be successful. If the Company is unable to obtain financing
on a timely basis, the Company could be forced to sell its assets,
discontinue its operation and /or seek reorganization under the
U.S. bankruptcy code," the Company said in its quarterly report
for the period ended Sept. 30, 2013.
HEALTHWAREHOUSE.COM INC: Karen Singer Stake at 8.1% as of Jan. 17
-----------------------------------------------------------------
In a Schedule 13G filed with the U.S. Securities and Exchange
Commission, Karen Singer disclosed that as of Jan. 17, 2014, she
beneficially owned 2,276,607 shares of common stock of
HealthWarehouse.com, Inc., representing 8.1 percent of the shares
outstanding. A copy of the regulatory filing is available for
free at http://is.gd/Dp1uln
About HealthWarehouse.com
HealthWarehouse.com, Inc., headquartered in Florence, Kentucky,
is a U.S. licensed virtual retail pharmacy ("VRP") and healthcare
e-commerce company that sells brand name and generic prescription
drugs as well as over-the-counter ("OTC") medical products.
Marcum LLP, in New York, issued a "going concern" qualification on
the consolidated financial statements for the year ended Dec. 31,
2012, citing significant losses and the need to raise additional
funds to meet the Company's obligations and sustain its
operations.
The Company reported a net loss of $5.57 million on $11.08 million
of net sales for the year ended Dec. 31, 2012, as compared with a
net loss of $5.71 million on $10.36 million of net sales during
the prior year.
The Company's balance sheet at Sept. 30, 2013, showed $1.52
million in total assets, $5.97 million in total liabilities and a
$4.45 million total stockholders' deficiency.
Bankruptcy Warning
"The Company recognizes it will need to raise additional capital
in order to fund operations, meet its payment obligations and
execute its business plan. There is no assurance that additional
financing will be available when needed or that management will be
able to obtain financing on terms acceptable to the Company and
whether the Company will become profitable and generate positive
operating cash flow. If the Company is unable to raise sufficient
additional funds, it will have to develop and implement a plan to
further extend payables, attempt to extend note repayments,
attempt to negotiate the preferred stock redemption and reduce
overhead until sufficient additional capital is raised to support
further operations. There can be no assurance that such a plan
will be successful. If the Company is unable to obtain financing
on a timely basis, the Company could be forced to sell its assets,
discontinue its operation and /or seek reorganization under the
U.S. bankruptcy code," the Company said in its quarterly report
for the period ended Sept. 30, 2013.
HELIA TEC: HSC Seeks to Dismiss Chapter 11 Case
-----------------------------------------------
HSC Holdings fka GE&F Co. Ltd. filed a motion with the U.S.
Bankruptcy Court seeking to dismiss or covert the chapter 11 case
of Helia Tec Resources, Inc. to chapter 7.
The bankruptcy proceeding has been filed in bad faith and for an
improper purpose by a rogue ex-officer of the Debtor's, without
true authority from the Debtor, HSC said in court papers filed
Dec. 30.
On March 5, 2009, Cary E. Hughes, the Debtor's president, and
Gallagher executed a Settlement, Release of Claims, and Indemnity
Agreement with HTR and HSC's predecessor, GE&F. Under the terms
of that settlement agreement, Hughes and Gallagher agreed to:
1. relinquish their HTR employment agreements;
2. redeem their HTR stock certificates;
3. receive certain Texas oil and gas properties from HTR; and
4. resign from HTR employment upon GE&F's payment of $200,000 for
HTR debts.
Hughes executed an assignment of the oil and gas properties to
himself and Gallagher.
GE&F wire transferred the $200,000 to HTR. Rather than pay HTR
third party creditors with GE&F's settlement payment, Gallagher
wrote checks on HTR's account to himself, Hughes, and their
affiliated company totaling over $186,000. Notwithstanding the
settlement and receipt of consideration, Hughes and Gallagher
refuse to honor the agreement, and they hold themselves out as
HTR's current officers, controlling directors, and shareholders.
On Oct. 3, 2013, after four years after Hughes hijacked HTR,
Hughes, along with his appointed counsel, signed and filed the
chapter 11 petition. Hughes and Gallagher, and their affiliate,
Mastodon Operations, are HTR's alleged largest creditors.
HSC said Hughes and Gallagher caused this recent filing as a
tactical move to avoid responding to motions and going trial in
Feb 2014 in a case pending in Judge Melinda Harmon's court.
Hughes and Gallagher also seek to avoid, by this bankruptcy
filing, a shareholder derivative suit, which seeks damages and
property interests, on HTR's behalf, for Hughes and Gallagher's
beach of their settlement agreement with HTR and GE&F; Hughes' and
Gallagher's numerous acts of fraud, in collusion with their
affiliated entities; Hughes and Gallagher's self-interested
transactions in breach of fiduciary duties owed to HTR; and
Hughes' ultra vires actions, which continue to this day.
HSC did not authorize the filing of the Debtor's petition.
However, HSC concedes that it is in the best interest of the
Debtor, equity, owners, and creditors to liquidate the Debtor's
estate under Chapter 7. In the event that the court determines
that the conversion is not appropriate, HSC wants the Court to
dismiss the Debtor's petition.
Helia Tec Resources, Inc. filed a Chapter 11 petition (Bankr. S.
D. Tex. Case No. 13-36251) on Oct. 3, 2013 in Houston, Texas,
represented by Richard L. Fuqua, II, Esq., at Fuqua & Associates,
PC, in Houston, as counsel to the Debtor. The Debtor listed
$16.15 million in assets and $2.24 million in liabilities. The
petition was signed by Cary E. Hughes, president.
ID PERFUMES: COO Rudford Hamon Resigns for Personal Reasons
-----------------------------------------------------------
Rudford Hamon notified ID Perfumes, Inc., that he is tendering his
resignation as the Company's chief operating officer and executive
vice president effective Jan. 31, 2014.
The resignation was made for personal reasons and there were no
disagreements between Mr. Hamon and the Company regarding its
operations or procedures.
About ID Perfumes
ID Perfumes, Inc., manufactures, markets, and distributes
fragrances and fragrance related products. The company produces
and distributes its fragrance products under license agreements
with Selena Gomez and Adam Levine. ID Perfumes, Inc., sells it
products to department stores, perfumeries, specialty retailers,
mass-market retailers, and the United States and international
wholesalers and distributors. It primarily has operations in the
United States, Latin America, and Canada. The company was
formerly known as Adrenalina and changed its name to ID Perfumes,
Inc., in February 2013. ID Perfumes, Inc., was founded in 2004 and
is headquartered in Hallandale Beach, Florida.
The Company reported a net loss of $12.01 million in 2008,
compared with a net loss of $5.26 million in 2007. For the nine
months ended Sept. 30, 2013, the Company reported a net loss of
$3.72 million on $6.03 million of sales as compared with a net
loss of $3.02 million on $4.19 million of sales for the same
period during the prior year.
The Company's balance sheet at Sept. 30, 2013, showed $2.83
million in total assets, $17.24 million in total liabilities and a
$14.41 million total shareholders' deficiency.
Going Concern
The Company said in its quarterly report for the period ended
Sept. 30, 2013, that it has significant operating losses since
inception which raise substantial doubt about the Company's
ability to continue as a going concern. The Company has incurred
net losses of $3.7 million and $3 million in the first nine months
of 2013 and 2012, respectively. The Company was involved in
litigation that resulted in the termination of a license. The
operations of the Company have been funded through loans, related
party borrowings, customer deposits, contributed capital,
factoring and obtaining operating services from vendors.
Management's plans to generate cash flow during 2013 include
expanding the Company's operations through building new
relationships and entering into new license agreements to
introduce new fragrance lines and raising additional capital
through debt or equity offerings and continue to obtain operating
services from vendors in an effort to fund the Company's
anticipated expansion. There is no assurance additional capital
or debt financing will be available to the Company on acceptable
terms.
IKARIA INC: S&P Affirms 'B-' CCR Over Madison Dearborn Deal
-----------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B-' corporate
credit rating on Hampton, N.J.-based Ikaria Inc. The outlook is
stable.
At the same time, S&P assigned the company's proposed $880 million
first-lien credit facility its 'B-' issue-level rating, with a
recovery rating of '3', indicating its expectation for meaningful
(50%-70%) recovery in the event of a payment default. The
facility consists of a $50 million revolver and $830 million term
loan.
In addition, S&P assigned the company's proposed $415 million
second-lien credit facility its 'CCC' issue-level rating, with a
recovery rating of '6', indicating its expectation for negligible
(0%-10%) recovery in the event of a payment default.
"Following the proposed transaction, we affirmed the existing
corporate credit rating on Ikaria Inc. based on our unchanged
assessments of the company's business risk profile as "weak",
financial risk profile as "highly leveraged", and management and
governance as "weak". Ikaria's weak business risk profile is
underpinned by its small size and single-product focus despite a
well-established market position for INOMAX," said credit analyst
Michael Berrian. "Our assessment of financial risk as highly
leveraged is supported by our expectation that Ikaria's adjusted
leverage ratio will remain above 5.0x and funds from operations
(FFO) to total debt ratio will remain below 12%."
The stable outlook reflects S&P's belief that leverage will remain
above 5x and the ratio of FFO to debt will remain below 12% in the
near term, despite S&P's expectation of low-single-digit revenue
growth and above average margins that S&P expects will translate
into stable free cash flow.
Upside scenario
S&P could raise its corporate credit rating if we become confident
that Ikaria's financial policy evolves to focus on sustained debt
reduction and that the competitive position of INOMAX remains
intact. Leverage sustained between 4x and 5x and FFO to total
debt sustained above 12% would then enable S&P to be more
comfortable with refinancing risk. S&P estimates this could be
achieved by double-digit revenue growth and a 200-basis-point
improvement in EBITDA margin or by the company paying off more
than $200 million of its outstanding debt.
Downside scenario
Given strong cash flows and above average profitability, a lower
rating would most likely be prompted by developments that would
elevate refinancing risk. S&P could lower the rating if
competitors are successful in penetrating current patents on
INOMAX, thereby increasing the likelihood of near-term
competition. In S&P's opinion, this scenario could lead to
declining EBITDA and cash flows, which would jeopardize Ikaria's
ability to refinance its debt obligations at maturity.
INTERMETRO COMMUNICATIONS: Sells 501,000 Preferred Shares
---------------------------------------------------------
InterMetro Communications, Inc., sold 501,000 shares of Series B
Preferred Stock together with warrants to purchase 501,000 shares
of common stock at an exercise price of $0.20 per share in
exchange for a total purchase price of $501,000. The securities
were sold to an accredited investor in a private placement exempt
from registration under Regulation D of the Securities Act of
1933, as amended. The investor generally has the right to acquire
up to $500,000 in additional Series B Preferred stock prior to the
Company issuing the remaining available Series B Preferred stock
or the Company terminating further sales of such stock. The
Series B Preferred stock may be converted into shares of common
stock at a conversion rate of 6.66 shares of common stock for each
share of Series B Preferred.
Effective Jan. 15, 2014, the Company established the rights and
preferences of Series B Preferred Stock. The number of authorized
shares is 2,000,000 and the shares are non-voting. The shares
generally may be redeemed by the Company for $1.25 per share plus
payment of any accrued but unpaid dividends.
About InterMetro
Simi Valley, Calif.-based InterMetro Communications, Inc.,
-- http://www.intermetro.net/-- is a Nevada corporation which
through its wholly owned subsidiary, InterMetro Communications,
Inc. (Delaware), is engaged in the business of providing voice
over Internet Protocol ("VoIP") communications services.
InterMetro Communications disclosed net income of $699,000 on
$20.06 million of net revenues for the year ended Dec. 31, 2012,
as compared with net income of $3.61 million on $21.31 million of
net revenue in 2011. The Company's balance sheet at Sept 30,
2013, showed $3.24 million in total assets, $15.06 million in
total liabilities, and stockholders' deficit of $11.82 million.
Gumbiner Savett Inc., in Santa Monica, 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 incurred net losses in previous years, and as of
Dec. 31, 2012, the Company had a working capital deficit of
approximately $7,460,000 and a total stockholders' deficit of
approximately $10,692,000. The Company anticipates that it will
not have sufficient cash flow to fund its operations in the near
term and through fiscal 2013 without the completion of additional
financing.
JEH COMPANY: Taps Randy Rabeck as Consultant
--------------------------------------------
JEH Company, et al., ask the U.S. Bankruptcy Court for the
Northern District of Texas for authorization to enter into an
independent contractor agreement with Randy Rabeck as contract
service provider.
Prior to and during this bankruptcy proceeding, Mr. Rabeck has
acted as the chief financial officer of JEH Company. While some
of his actions may be construed as benefiting JEH Leasing Company,
Inc. and JEH Stallion Station, Inc., he has not been employed by
those entities and any benefit has been indirect.
The Company wishes to employ Mr. Rabeck as he is the only person
with significant experience in the preparation of the financial
books and records of JEH Company and the accounts receivable
collection of that entity.
The terms of the employment between the parties are:
-- Mr. Rabeck would provide to JEHCO consulting services
mutually agreed upon and modified in writing between the parties
from time to time.
-- The services would be primarily in the form of accounts
receivable collection, preparation of monthly operating reports,
plan support, distribution support and accounting support.
-- JEHCO would provide access to computers and other equipment
for the performance of the services under the Consulting
Agreement. Mr. Rabeck would employ at his own expense an
additional employee from time to time as needed by him for the
performance of these services with no additional expense to JEHCO.
-- The initial term of the agreement will be for the period of
three months automatically renewing unless terminated in writing
by either parties prior to the expiration of the current period.
-- Mr. Rabeck will treat the information provided him as
confidential consistent with this agreement.
-- Mr. Rabeck will be paid on an hourly basis at a rate of $100
as needed.
Mr. Rabeck disclosed that the hourly rate to be charged at $100 is
higher than his current effective rate of $65. The difference in
the two rates is intended to compensate Mr. Rabeck for the lost
opportunity of not taking other employment, payment at rates that
are more in line with what Mr. Rabeck would be earning from
another company performing similar services, and the rate as the
advantage of limiting the need for Mr. Rabeck to be insured by the
company and providing support for Mr. Rabeck in connection with
the tasks being performed.
As additional benefit to the Debtor entering this consulting
agreement will eliminate the need for payroll reporting and
filings, the payment of taxes, the payment of payroll service
fees, workers compensation and other related costs of
communication, the administrative workload and the attendant
expense will be reduced on a monthly basis, resulting in savings
not only from the decrease in costs, but the related un-itemized
expenses of preparing these reports and returns.
About JEH Company
JEH Company, JEH Stallion Station, Inc., and JEH Leasing Company,
Inc. filed bare-bones Chapter 11 petitions (Bankr. N.D. Tex. Case
Nos. 13-42397 to 13-42399) in Ft. Worth, Texas on May 22, 2013.
Mark Joseph Petrocchi, Esq., at Griffith, Jay & Michel, LLP, in
Ft. Worth, serves as counsel to the Debtors.
JEH Company was organized in 1982 by Jim and Marilyn Helzer.
According to http://www.jehroofingcompany.com/,JEHCO buys roofing
material directly from the manufacturer and sell it to
contractors, builders, and homeowners. JEH Leasing owns and
leases equipment and vehicles primarily for use in the business of
JEHCO. Stallion is in the quarter horse and thoroughbred horse
business.
In its schedules, JEH Company disclosed $13,606,753 and
$18,351,290 in liabilities as of the Petition Date.
JEH Stallion Station, Inc., disclosed $364,007 in assets and
$3,982,012 in liabilities as of the Petition Date.
JEH Leasing Company, Inc., disclosed $1,242,187 in assets and
$155,216 in liabilities as of the Petition Date.
LAKE PLEASANT: Court Entered Final Decree Closing Bankruptcy Case
-----------------------------------------------------------------
The Hon. Eddward P. Ballinger Jr., of the U.S. Bankruptcy Court
for the District of Arizona on Dec. 21 entered a final decree
closing the Chapter 11 cases of Lake Pleasant Group, LLP, and DLGC
II, LLC.
As reported in the Troubled Company Reporter on Nov. 21, 2013,
the Court approved a stipulation resolving pending motions for
sanctions and the entry of a final decree closing the Debtors'
cases. The stipulation was entered between the Debtors and
Johnson Bank.
As reported in the TCR on Oct. 14, 2013, the stipulation provides
for, among other things:
1. Upon entry of an order approving the terms of the
stipulation, the Reorganized Debtors will pay Johnson Bank
$10,000. None of the funds held in the Reorganized Debtors'
debtor-in-possession accounts will be distributed to any of
the Reorganized Debtors' equity holders, and the Reorganized
Debtors will provide documentation to Johnson Bank
disclosing the use of the Reorganized Debtors remaining
funds.
2. Upon receipt of the Bank Payment, Johnson Bank's sanctions
motion will be deemed withdrawn with prejudice.
3. Upon receipt of the Bank Payment, Johnson Bank's final
decree objection will be deemed withdrawn and the court may
enter a final decree in the cases.
As reported in the TCR on Sept. 6, 2013, the Debtors said Johnson
Bank on July 3 conducted a trustee's sale of the Debtors' property
-- approximately 444 acres of undeveloped real property located
near State Route 74 and Old Lake Pleasant Road in Peoria, Arizona.
In light of the foreclosure upon the property, and upon the
Debtors' surrender of their other encumbered assets, the Debtors'
estates will have been fully administered in accordance with the
Plan filed in the cases.
The Bank asserted a first-position lien against the property, to
the extent of approximately $19,334,987.
The order confirming the Plan was entered April 23, 2012, and
the order granting the Debtors' motion to approve post-
confirmation clarification was entered Nov. 6, 2012.
About Lake Pleasant and DLGC II
Lake Pleasant Group, LLP, and affiliate DLGC II, LLC, sought
Chapter 11 protection (Bankr. D. Ariz. Case Nos. 13-09574 and
13-09576) in Phoenix on June 5, 2013.
The Debtors have tapped Wesley Denton Ray, Esq., and Philip R.
Rudd, Esq., at Polsinelli, P.C., as counsel.
LPG estimated at least $10 million in assets and liabilities.
DLGC II estimated at least $10 million in assets and liabilities
of less than $10 million.
LPG and DLGC II, LLC, first filed for Chapter 11 bankruptcy
protection (Bankr. D. Ariz. Case No. 11-10170) on April 13, 2011,
with Philip R. Rudd, Esq., at Polsinelli PC on board as counsel.
At the request of Johnson Bank, the Court consolidated for
administrative purposes, the chapter 11 cases that Lake Pleasant
Group, LLP, and affiliate DLGC II, LLC, commenced on June 5, 2013,
with the cases the two Debtors commenced on April 13, 2011.
Phoenix, Arizona-based LPG was formed for the purpose of
purchasing and developing 244 acres of real property located near
State Route 74 and Old Lake Pleasant Road in Peoria, Arizona. In
the schedules filed in the original case, LPG disclosed assets of
$15,780,263 and liabilities of $10,301,552.
LEHMAN BROTHERS: EFETnet Bid for Late Claim Filing Denied
---------------------------------------------------------
Judge James Peck of U.S. Bankruptcy Court in Manhattan issued a
ruling barring EFETnet B.V. from filing a claim against Lehman
Brothers Commodity Services Inc.
The bankruptcy judge also denied EFETnet's bid to have its
previously filed claim against Lehman Brothers Holdings Inc.'s
brokerage reclassified as a claim against LBCS in case he denied
the company's first request.
EFETnet filed in 2009 a $49,155 claim against the brokerage based
on two unpaid invoices issued to LBCS for use of its proprietary
software.
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: Hubbard & Reed Seeks $17.1MM for July-Nov. Work
----------------------------------------------------------------
Hughes Hubbard & Reed LLP seeks interim payment of $17.1 million
in fees and reimbursement of $152,661 in expenses for services
provided during the period July 1 to Nov. 30, 2013.
Another firm, Bonn Steichen & Partners, filed a final fee
application for payment of fees in the amount of $16,047. The
application covers the period Jan. 22 to Nov. 30, 2013.
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: Inks Deal to Eliminate Claims Duplication
----------------------------------------------------------
Lehman Brothers Holding Inc. signed an agreement with Lehman
Brothers Real Estate Partners L.P. and five other companies to
eliminate potential duplication of their claims against LBHI.
The five other companies are Lehman Brothers (Europe 2) Real
Estate Partners L.P., Lehman Brothers Real Estate Pension
Partners L.P., Lehman Brothers/PSERS Real Estate L.P., Lehman
Brothers Real Estate Fund L.P. and Lehman Brothers Real Estate
Associates L.P.
The Claimants acknowledge that they are not entitled to recover
separately from LBHI on both a Duplicative Claim and a
corresponding Surviving Claim for the same liability.
A copy of the agreement is available without charge at
http://is.gd/BecEY8
Weil Gotshal & Manges LLP, Lehman's legal counsel, will present
the agreement to Judge James Peck for signature on Jan. 15.
Objections are due by Jan. 14.
The claimants are represented by:
Ross Kwasteniet, Esq.
KIRKLAND & ELLIS LLP
300 North LaSalle
Chicago, IL 60654
Tel: (312) 862-2000
Fax: (312) 862-2200
Email: ross.kwasteniet@kirkland.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).
LEHMAN BROTHERS: Judge Approves NUFIC Claims Settlement
-------------------------------------------------------
Judge James Peck approved a deal made by Lehman Brothers Holdings
Inc. and the National Union Fire Insurance Co. of Pittsburgh to
settle the claims of the insurance firm.
Under the deal, the insurance firm agreed to drop its claims,
which assert more than $132.2 million, in exchange for a payment
of $2.99 million from Lehman. A copy of the settlement agreement
can be accessed for free at http://is.gd/b236HY
NUFIC filed 20 unsecured claims against the company and its
subsidiaries, each seeking payment of more than $6.61 million.
Lehman refused to pay them, saying they are duplicative of other
claims.
NUFIC is represented by:
Michael S. Davis, Esq.
ZEICHNER ELLMAN & KRAUSE LLP
1211 Avenue of the Americas
New York, NY
Tel: (212) 826-5311
Fax: (866) 213-9038
Email: mdavis@zeklaw.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).
LEHMAN BROTHERS: Judge Approves Israel Discount Bank Setoff
-----------------------------------------------------------
Judge James Peck approved an agreement, which allows Israel
Discount Bank Ltd. to set off its claim against the amount owed to
Lehman Brothers Holdings Inc.
Israel Discount, which owes Lehman more than $5.65 million,
asserts a $7.15 million claim on account of the notes issued by
the company, which are held through Euroclear by Israel Disc Bk.
The agreement can be accessed for free at http://is.gd/oxugAm
Israel Discount 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).
LENOVO GROUP: Strikes $2.3B Deal For IBM Server Business
--------------------------------------------------------
Andrew Bulkeley, writing for The Deal, reported that the second
time can also be a charm as Chinese personal computer maker Lenovo
Group Ltd. on Jan. 23, agreed to buy the low-power server business
of International Business Machines Corp. for $2.3 billion, two
days after confirming it had entered talks.
According to the report, Lenovo, of Beijing, said it would pay
about $2 billion in cash and the remainder in shares for IBM's x86
server business as it continues to expand its hardware activities
to remain the world's biggest computer maker.
"With the right strategy, great execution, continued innovation
and a clear commitment to the x86 industry, we are confident that
we can grow this business successfully for the long-term," said
Lenovo chairman and CEO Yang Yuanqing in a statement, the report
cited.
Lenovo has used acquisitions to surpass rivals such as Dell Inc.
and Hewlett-Packard Co. in the personal computer space, the report
related. The surge began with the $1.8 billion purchase of IBM's
personal computer division in 2005. In 2011 it expanded with the
$660 million purchase of German computer maker Medion AG.
The Chinese buyer said it expected to take on 7,500 current IBM
employees in Raleigh, N.C., Shanghai, Shenzhen and Taipei, the
report further related. The successful offer follows talks last
year that ended when the companies couldn't agree on a price.
Lenovo Group Limited -- http://www.lenovo.com-- develops,
manufactures and markets technology products and services
worldwide. The company, through its subsidiaries is engaged in
manufacturing and distribution of information technology (IT)
products and provision of IT services, property holding and
property management, procurement agency, group treasury, supply
chain management, intellectual property rights management, and
provision of repair services for computer hardware and software
systems. Lenovo has major research centers in Yamato, Japan;
Beijing, Shanghai and Shenzhen, China, and Raleigh, North
Carolina. The Company's geographical segments include Americas;
Europe, Middle East and Africa (EMEA); Asia Pacific (excluding
Greater China), and Greater China. The company's product
portfolio includes desktop and personal computer notebook. The
disposal of mobile handset business was completed in March 2008.
LEONARDO ACQUISITION: Moody's Gives B2 CFR & Rates $430MM Debt B2
-----------------------------------------------------------------
Moody's Investors Service assigned first time ratings to Leonardo
Acquisition Corp. (acquirer of 1-800 CONTACTS, Inc.), including a
B2 Corporate Family rating and B1 ratings on the proposed $460
million senior secured credit facilities. The outlook is stable.
New Ratings Assigned:
-- Leonardo Acquisition Corp.:
-- Corporate Family Rating at B2
-- Probability of Default Rating at B2-PD
-- $400 million senior secured term loan due 2021 at B1/LGD-3,
40%
-- $60 million revolving credit facility due 2019 at B1/LGD-3,
40%
Leonardo Acquisition Corp is an acquisition vehicle created for
the purpose of consummating the purchase of 1-800 CONTACTS, Inc.
by Thomas H. Lee Partners from WellPoint, Inc. Thomas H. Lee
Partners entered into a definitive purchase agreement to acquire
1-800 CONTACTS, Inc., excluding Glasses.com, on Dec. 23, 2013, and
is contributing a reasonable level of cash equity to fund the
purchase.
Ratings Rationale
The B2 Corporate Family Rating recognizes 1-800 CONTACTS
formidable market position within an attractive industry segment
that has historically displayed stable product demand and
meaningful barriers to entry. The company's high initial debt
load will result in debt/EBITDA on a pro forma basis of well over
6 times, which forms the primary basis for the B2 rating. The
rating is further supported by the company's very good liquidity,
strong operating margins and minimal overhead costs, which create
an attractive free cash flow profile. While Moody's expects some
improvement in leverage metrics over the next 12-24 months, it
anticipates leverage to be generally maintained at elevated levels
given the company's private equity ownership.
The B1 rating assigned to the credit facilities reflects their
senior position in the capital structure, relative to a
$125 million second lien note (unrated), and the common equity
contributed by Thomas H. Lee Partners to fund the purchase.
The stable outlook incorporates Moody's expectation that leverage
will reduce modestly over the next 12-24 months as the company
utilizes free cash flow to reduce debt. 1-800 CONTACTS free cash
flow conversion rate (ratio of free cash flow to EBITDA) is
relatively strong, resulting in ample cash available for
discretionary debt reduction in excess of mandatory requirements.
Further, the company is expected to enter into a joint product
sourcing and distribution contract with Luxottica, which could be
meaningfully accretive to earnings beginning no later than the
company's fiscal 2015. Nonetheless, Moody's believes that
leverage may be challenged to settle below 6 times over the longer
term, which is consistent with other private equity owned single B
retailers when factoring in a limited impact from Moody's
capitalized rent adjustment.
Ratings could be ugraded if financial policy remains balanced
between shareholders and debt holders, which would be evidenced by
debt/EBITDA being sustained below 6 times and EBITA/interest was
sustained above 2.5 times. Ratings could be downgraded could
occur if debt/EBITDA was sustained above 7 times or if
EBITA/interest was sustained below 1.75 times, which could be the
result of other an aggressive financial policy or weak operating
performance.
The principal methodology used in this rating was the Global
Retail Industry published in June 2011.
LEONARDO ACQUISITION: S&P Assigns B CCR & Rates 1st Lien Debt B
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned a 'B' corporate credit
rating to Leonardo Acquisition Corp. (d/b/a 1-800 Contacts). The
outlook is stable.
At the same time, S&P assigned a 'B' issue-level rating to the
company's $460 million first-lien credit facility with a recovery
rating of '3', indicating its expectation for meaningful (50% to
70%) recovery for lenders in the event of a payment default. The
facility consists of a $60 million revolver maturing in 2019 and a
$400 million first-lien term loan due in 2021.
The company will use proceeds from the term loan, along with
$125 million of privately placed second-lien senior secured notes
(unrated) and equity contribution, to fund the acquisition of
1-800 Contacts (excluding the Glasses.com business) from WellPoint
Inc. S&P anticipates the $60 million revolver will remain undrawn
at close of the transaction.
"The rating on Draper, Utah.-based Leonardo Acquisition Corp.
(d/b/a 1-800 Contacts) reflects our assessment that the company's
business risk profile is "fair" and its financial risk profile is
"highly leveraged"," said credit analyst Mariola Borysiak.
The stable outlook reflects S&P's view that favorable trends in
the industry and product innovation will continue to drive demand
for contact lenses and lead to modest profit growth for the
company in the upcoming year. It also incorporates S&P's belief
that the company's relationship with Luxottica will be successful
and the company will achieve projected synergies and obtain
planned fulfillment and distribution fees for provided services.
Downside Scenario
S&P could lower the ratings if attrition of the customer base due
to competitive pressures from other industry participants,
including new entrants, hurt the company's profitability such that
total debt to EBITDA remains in the 6x area rather than declining.
This could result from about 2% sales decline from the projected
2013 year end level while gross margin remains flat. A debt
financed dividend to shareholders that triggers the indicated debt
leverage threshold could also lead to a downgrade.
Upside Scenario
A upgrade is unlikely in the near to intermediate term given S&P's
expectations for debt leverage to remain in the 5x area over the
next one to two years and ownership of the company by the private
equity sponsor. However, a positive rating action could result
from stronger than expected operating performance such that debt
leverage improves below 5x. In this scenario, S&P will also
consider 1-800 Contacts' ownership by private equity and the
possibility of a dividend recapitalization.
LIGHTSQUARED INC: Adviser Says Ergen Associates Stymied Debt Query
------------------------------------------------------------------
Michael Bathon, substituting for Bill Rochelle, the bankruptcy
columnist for Bloomberg News, reports that advisers who helped
Dish Network Corp. Chairman Charles Ergen buy $1 billion of
LightSquared Inc. debt refused to disclose his involvement to
representatives of Philip Falcone's wireless venture, a financial
adviser to the company in its bankruptcy testified.
According to the report, Mark Hootnick of Moelis & Co. testified
Jan. 17 in Manhattan bankruptcy court that a fund manager and an
attorney later found to be working for Ergen refused to answer
when he tried to find out whether the Dish chairman was behind the
purchases.
The report recalled that Ergen is facing claims in a trial before
U.S. Bankruptcy Judge Shelley Chapman that he secretly amassed the
debt in a bid to acquire control of LightSquared's airwaves for
Dish. Ergen contends he bought the debt as a personal investment.
About LightSquared Inc.
LightSquared Inc. and 19 of its affiliates filed Chapter 11
bankruptcy petitions (Bankr. S.D.N.Y. Lead Case No. 12-12080) on
May 14, 2012, to resolve regulatory issues that have prevented it
from building its coast-to-coast integrated satellite 4G wireless
network.
LightSquared had invested more than $4 billion to deploy an
integrated satellite-terrestrial network. In February 2012,
however, the U.S. Federal Communications Commission told
LightSquared the agency would revoke a license to build out the
network as it would interfere with global positioning systems used
by the military and various industries. In March 2012, the
Company's partner, Sprint, canceled a master services agreement.
LightSquared's lenders deemed the termination of the Sprint
agreement would trigger cross-defaults under LightSquared's
prepetition credit agreements.
LightSquared and its prepetition lenders attempted to negotiate a
global restructuring that would provide LightSquared with
liquidity and runway necessary to resolve its issues with the FCC.
Despite working diligently and in good faith, however,
LightSquared and the lenders were not able to consummate a global
restructuring on terms acceptable to all interested parties.
Lawyers at Milbank, Tweed, Hadley & McCloy LLP serve as counsel to
the Debtors. Alvarez & Marsal North America, LLC, is the
financial advisor. Kurtzman Carson Consultants LLC serves as
claims and notice agent.
LIGHTSQUARED INC: Lenders Oppose Termination of L-Band Bid
----------------------------------------------------------
A group of secured lenders is asking U.S. Bankruptcy Judge Shelley
Chapman to enforce her earlier decision, which approved the
bidding procedures for the auction of LightSquared's so-called
"LP" assets.
The move came after L-Band Acquisition LLC, a subsidiary of Dish
Network Corp., sought court declaration that its $2.2 billion
offer for the assets was terminated on or before January 10.
Glenn Kurtz, Esq., at White & Case LLP, in New York, argued that
the bankruptcy judge's order that was issued in October last year
"unambiguously" requires that L-Band's bid remain irrevocable
until February 15.
The lender group's lawyer refuted L-Band's argument that its bid
had to remain open only if it was the second highest bid submitted
Mr. Kurtz said that L-Band's offer is a "stalking horse" bid.
A stalking-horse bid is an initial bid on a bankrupt company's
assets. It sets the floor, or minimum bid, for an auction.
"[L-Band] cannot repudiate its obligations simply because there
were no higher bids," Mr. Kurtz said in a Jan. 20 filing.
L-Band in a Jan. 21 filing defended the termination of its bid,
saying the October ruling did not render the company bound to any
contract other than the one it duly executed.
L-Band said it would have been required to satisfy its obligations
under the plan support agreement and remain committed to its $2.2
billion offer if the milestones under the agreement had been
satisfied. The company said it honored its obligations "until the
clearly-stated milestones in the PSA were not timely satisfied."
Mr. Kurtz can be reached at:
Glenn M. Kurtz, Esq.
WHITE & CASE LLP
1155 Avenue of the Americas
New York, NY 10036
Tel: (212) 819-8200
Fax: (212) 354-8113
E-mail: gkurtz@whitecase.com
L-Band is represented by:
Rachel C. Strickland, Esq.
Andrew D. Sorkin, Esq.
Willkie Farr & Gallagher LLP
787 Seventh Avenue
New York, New York 10019
Tel: (212) 728-8000
Fax: (212) 728-8111
E-mail: rstrickland@willkie.com
asorkin@willkie.com
-- and --
Robert J. Giuffra, Jr., Esq.
Brian T. Frawley, Esq.
Brian D. Glueckstein, Esq.
Sullivan & Cromwell LLP
125 Broad Street
New York, New York 10004
Tel: (212) 558-4000
Fax: (212) 558-3588
E-mail: giuffrar@sullcrom.com
frawleyb@sullcrom.com
gluecksteinb@sullcrom.com
About LightSquared Inc.
LightSquared Inc. and 19 of its affiliates filed Chapter 11
bankruptcy petitions (Bankr. S.D.N.Y. Lead Case No. 12-12080) on
May 14, 2012, to resolve regulatory issues that have prevented it
from building its coast-to-coast integrated satellite 4G wireless
network.
LightSquared had invested more than $4 billion to deploy an
integrated satellite-terrestrial network. In February 2012,
however, the U.S. Federal Communications Commission told
LightSquared the agency would revoke a license to build out the
network as it would interfere with global positioning systems used
by the military and various industries. In March 2012, the
Company's partner, Sprint, canceled a master services agreement.
LightSquared's lenders deemed the termination of the Sprint
agreement would trigger cross-defaults under LightSquared's
prepetition credit agreements.
LightSquared and its prepetition lenders attempted to negotiate a
global restructuring that would provide LightSquared with
liquidity and runway necessary to resolve its issues with the FCC.
Despite working diligently and in good faith, however,
LightSquared and the lenders were not able to consummate a global
restructuring on terms acceptable to all interested parties.
Lawyers at Milbank, Tweed, Hadley & McCloy LLP serve as counsel to
the Debtors. Alvarez & Marsal North America, LLC, is the
financial advisor. Kurtzman Carson Consultants LLC serves as
claims and notice agent.
LIGHTSQUARED INC: Judge Says Dish Properly Withdrew Bid
-------------------------------------------------------
Joseph Checkler, writing for The Wall Street Journal, reported
that a bankruptcy judge on Jan. 22 said Dish Network Corp.
properly withdrew its $2.2 billion bid for LightSquared's wireless
spectrum assets, rejecting an argument by LightSquared's lenders
that Dish was still required to close the deal.
According to the report, Judge Shelley C. Chapman of U.S.
Bankruptcy Court in Manhattan said that while Dish never
officially filed paperwork withdrawing the offer, its termination
of an agreement with those lenders based on the bid was
sufficient.
"It was permissible for LBAC to withdraw the bid," said Judge
Chapman, referring to the Dish subsidiary that made the offer for
LightSquared, the report cited.
As previously reported by The Troubled Company Reporter, the Ad
Hoc Secured Group of LightSqured LP Lenders notified the U.S.
Bankruptcy Court in Manhattan that it intends to proceed with
confirmation of the First Amended Joint Chapter 11 Plan for
LightSquared, Inc., et al., despite the uncertainty caused the
termination of the obligations of the DISH affiliate under the
plan support agreement with the Lenders. The Ad Hoc Group said
DISH didn't have the right to cancel its offer for LightSquared
and may seek to compel DISH to perform its obligations and to
recover damages and any other remedies in accordance with
applicable law.
In response to the Ad Hoc Group's statement, the DISH affiliate,
L-Band Acquisition LLC, asked Judge Shelley Chapman to declare
that its $2.2 billion takeover bid for LightSquared was terminated
on or before January 10.
L-Band lawyer, Rachel Strickland, Esq., at Willkie Farr &
Gallagher LLP, in New York, said the lenders are forcing L-Band
"to move forward with a bid for the LP assets that has been
withdrawn." "There is no basis for imposing new, extra-
contractual obligations on [L-Band]," Ms. Strickland said in a
Jan. 16 filing.
Earlier in the Jan. 22 hearing, Judge Shelley told Dish lawyer
Rachel Strickland that she should have made a filing notifying the
lenders that the offer itself was off the table, not just the
agreement, the Journal related.
"We can do that by handing them a Post-it Note," said Ms.
Strickland, of Willkie Farr & Gallagher LLP, the report further
related. She pointed out that Dish repeatedly said in court
earlier in January that the bid was withdrawn.
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.
LOS GATOS HOTEL: Can Use Cash Collateral Until May 15
-----------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of California
last month approved a fifth stipulation extending the terms of Los
Gatos Hotel Corporation's use of cash collateral in which secured
creditor GCCFC 2006-GG7 Los Gatos Lodging Limited Partnership
asserts an interest.
Pursuant to the stipulation, the Debtor is authorized to use
cash collateral through and including the earlier of (a) the date
of confirmation of any plan of reorganization containing terms
acceptable to secured creditor in its sole discretion; (b) the
date of consummation of a sale of substantially all of the
Debtor's assets under Section 363 of the Bankruptcy Code
containing terms acceptable to secured creditor in its sole
discretion; or (c) May 15, 2014.
The Debtor is authorized to use secured creditor's cash collateral
pursuant to the terms of the original order, as amended by the
second, third, fourth, fifth and sixth orders and this
stipulation.
As reported in the Troubled Company Reporter on June 27, 2013, in
2006, the Debtor refinanced its debt on Hotel Los Gatos through a
loan from Greenwich Capital Financial Products, Inc., which was
evidenced by a promissory note in the amount of $12 million,
payable over a period of five years, and coming due in full in
March 2011. According to papers filed in court in December, the
Debtor said it was informed, but hasn't confirmed, that the Loan
was subsequently bundled with other loans and sold as part of a
commercial mortgage-backed security to Greenwich Capital
Commercial Funding Corp.
GCCFC 2006-GG7 Los Gatos Lodging Limited Partnership claims that
it currently holds the Loan, which is serviced by LNR Partners,
LLC. As of the petition Date, the principal balance of the Loan
had been reduced to $11,606,981.
LNR has claimed that penalties and interest in arrears total
approximately $1.5 million.
About Los Gatos Hotel
San Jose, California-based Los Gatos Hotel Corporation, dba Hotel
Los Gatos, was formed in 2000 to build and operate Hotel Los
Gatos, a full-service boutique hotel in downtown Los Gatos,
California.
Los Gatos Hotel filed for Chapter 11 bankruptcy protection on
December 27, 2010 (Bankr. N.D. Cal. Case No. 10-63135). The
Debtor disclosed $17,191,277 in assets and $12,896,468 in
liabilities as of the Chapter 11 filing. Affiliate Blossom Valley
Investors, Inc., filed a separate Chapter 11 petition on September
10, 2009 (Bankr. N.D. Cal. Case No. 09-57669).
Jeffry A. Davis, Esq., at Mintz Levin Cohn Ferris Glovsky Popeo,
serves as the Debtor's bankruptcy counsel. The Debtor has tapped
OSAS Inc. as financial advisor and investment banker.
LYONDELL CHEMICAL: A Safe Harbor Without Full Protection
--------------------------------------------------------
Stephen J. Lubben, writing for The New York Times' DealBook,
reported that a recent ruling by a bankruptcy judge in New York
adds to a growing body of opinions that appear to leave the door
open for actions under state law that would normally be prohibited
in federal bankruptcy proceedings.
According to the report, the issue concerns the so-called safe
harbor provisions of the bankruptcy code, which exempt derivatives
and other securities transactions from the usual stay that blocks
creditors? efforts to collect debts. Last week, Judge Robert E.
Gerber of Federal Bankruptcy Court in Manhattan ruled in a
lingering part of a case involving the Lyondell Chemical Company
that the safe harbor provisions applied only to the bankruptcy
process.
His decision joined the mini-trend of court opinions that do not
extend the exemptions to state courts, the report related. That
is, while a bankruptcy trustee or debtor might be precluded from
bringing a fraudulent transfer action in bankruptcy court,
creditors retain their right to do so under nonbankruptcy state
law. In the Lyondell case, Judge Gerber refused to dismiss a
lawsuit initially brought in New York State court that seeks to
claw back $12.5 billion paid to shareholders as part of merger
deal.
Given the statutory language of the bankruptcy code, this seems
like the right result, the report added. But consideration of the
justification for the safe harbors makes this a somewhat more
difficult matter.
The safe harbors were created for certain transactions because of
the fear of systemic risk -- if one bankrupt institution failed to
make payment, it could quickly bankrupt its trading partners, and
they, in turn, might bankrupt their other trading partners,
setting off a dangerous domino effect, the report related.
Namely, the safe harbors are said to be required because financial
markets need certainty, or finality, and pesky bankruptcy trustees
can upset that.
The case is Weisfelner v. Fund 1 (In re Lyondell Chemical Co.),
10-ap-4609, U.S. Bankruptcy Court, Southern District of New York
(Manhattan).
About Lyondell Chemical
LyondellBasell Industries is one of the world's largest polymers,
petrochemicals and fuels companies. Luxembourg-based Basell AF
and Lyondell Chemical Company merged operations in 2007 to form
LyondellBasell Industries, the world's third largest independent
chemical company. LyondellBasell became saddled with debt as
part of the US$12.7 billion merger. Len Blavatnik's Access
Industries owned the Company prior to its bankruptcy filing.
On Jan. 6, 2009, LyondellBasell Industries' U.S. operations,
led by Lyondell Chemical Co., and one of its European holding
companies -- Basell Germany Holdings GmbH -- filed voluntary
petitions to reorganize under Chapter 11 of the U.S. Bankruptcy
Code to facilitate a restructuring of the company's debts. The
case is In re Lyondell Chemical Company, et al., Bankr. S.D.N.Y.
Lead Case No. 09-10023). Seventy-nine Lyondell entities filed
for Chapter 11. Luxembourg-based LyondellBasell Industries AF
S.C.A. and another affiliate were voluntarily added to Lyondell
Chemical's reorganization filing under Chapter 11 protection on
April 24, 2009.
Deryck A. Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in
New York, served as the Debtors' bankruptcy counsel. Evercore
Partners served as financial advisors, and Alix Partners and its
subsidiary AP Services LLC, served as restructuring advisors.
AlixPartners' Kevin M. McShea acted as the Debtors' Chief
Restructuring Officer. Clifford Chance LLP served as
restructuring advisors to the European entities.
LyondellBasell emerged from Chapter 11 bankruptcy protection in
May 2010, with a plan that provides the Company with US$3 billion
of opening liquidity. A new parent company, LyondellBasell
Industries N.V., incorporated in the Netherlands, is the
successor of the former parent company, LyondellBasell Industries
AF S.C.A., a Luxembourg company that is no longer part of
LyondellBasell. LyondellBasell Industries N.V. owns and operates
substantially the same businesses as the previous parent company,
including subsidiaries that were not involved in the bankruptcy
cases. LyondellBasell's corporate seat is Rotterdam,
Netherlands, with administrative offices in Houston and
Rotterdam.
MEDIACOM COMMUNICATIONS: S&P Raises CCR to 'BB-'; Outlook Stable
----------------------------------------------------------------
Standard & Poor's Ratings Services said it raised its corporate
credit rating on Mediacom Communications Corp. to 'BB-' from 'B+'.
The rating outlook is stable.
S&P also assigned its 'BB+' issue-level rating and '1' recovery
rating to operating subsidiary Mediacom LLC's proposed
$250 million term loan F due 2018 and $225 million revolving
credit facility due 2019. The '1' recovery rating indicates S&P's
expectation for very high (90% to 100%) recovery for lenders in
the event of a payment default. S&P expects the company to use
proceeds from the new term loan, as well as a roughly $154 million
drawdown on the revolving credit, to repay roughly $400 million of
the company's existing term loan C ($604.5 million outstanding)
due January 2015.
At the same time, S&P raised its issue-level ratings on Mediacom
LLC's existing secured debt to 'BB+' from 'BB-' and revised the
recovery rating to '1' from '2'. The '1' recovery rating
indicates S&P's expectation for very high (90% to 100%) recovery
for lenders in the event of a payment default. The revision of
the recovery rating reflects a lower amount of secured debt at the
time of a hypothetical default due to the proposed refinancing
transaction.
S&P also raised its issue-level ratings on operating subsidiary
Mediacom Broadband Group's senior secured credit facilities to
'BB' from 'BB-', and left the '2' recovery rating unchanged. The
'2' recovery rating indicates S&P's expectation for substantial
(70% to 90%) recovery for lenders in the event of a payment
default. Additionally, S&P has raised its issue-level ratings on
unsecured debt at both operating subsidiaries to 'B' from 'B-'.
The '6' recovery rating on the unsecured debt remains unchanged,
indicating S&P's expectation for negligible (0%-10%) recovery for
noteholders in the event of a payment default.
"The rating upgrade is based on improving credit metrics at
Mediacom due to modest debt repayment and growth in data and
business services revenue, which continues to offset declines in
basic video subscribers," said Standard & Poor's credit analyst
Michael Altberg.
"We believe that lease-adjusted debt to EBITDA will decline to the
mid-5x area in 2013, down from roughly 5.8x in 2012, with the
potential for a further reduction to the low-5x area in 2014 based
on our expectation for low-single digit percent EBITDA growth.
Basic video subscriber losses remain at the high end of the range
for its industry peers, and we expect losses will continue in the
5% to 6% range in 2014. However, we believe the majority of
losses have been single-play, video-only customers, given its mid-
to-high-single-digit percent growth in high-speed data (HSD) and
telephone customers. HSD and telephony penetration has continued
to improve, although both remain slightly below industry averages
at 34.2% and 13.6%, respectively, as of Sept. 30, 2013. Partly
tempering these factors has been healthy high-single-digit percent
growth in average revenue per user (ARPU). This, along with good
cost management of non-programming expenses, has contributed to
relatively stable EBITDA margins and growth in free operating cash
flow (FOCF)," S&P added.
The ratings on Mediacom reflects its "satisfactory" business risk
profile and "aggressive" financial risk profile, which results in
a 'bb' anchor.
The stable rating outlook reflects S&P's expectation that leverage
will continue to decline in 2014, based on debt amortization
payments and low-single-digit percent EBITDA growth. While near-
term refinancing activity could lead to a modest increase in
interest expense, S&P expects that FFO to debt should remain in
the mid-teen-percent area based on EBITDA growth, modest debt
repayment, and the roll-off of higher-cost interest rate swaps.
S&P could lower the rating if leverage rises above 5.5x with
little prospects for improvement. S&P believes such a scenario
would entail an acceleration of video subscriber losses, in
conjunction with a material slowdown in HSD and commercial
services revenue. Given S&P's expectations for relatively steady
operating performance over the near term, it expects a ratings
downgrade would more likely result from a shift in financial
policy that led to debt-financed acquisitions or shareholder
returns.
S&P believes a rating upgrade is unlikely as it would require both
material credit metric improvement along with clarification of
longer-term financial policy. A rating upgrade would necessitate
operating performance and penetration improvement to levels on par
with industry peers enabling leverage reduction to the low-to-mid
4x range and an improvement in FOCF to debt to the high-single-
digit percent area. An upgrade would also require a longer term
financial policy supportive of the improved credit metrics.
METRO AFFILIATES: Panel Can Employ Farrell Fritz as Counsel
-----------------------------------------------------------
The Official Committee of Unsecured Creditors of Metro Affiliates,
Inc. and its debtor-affiliates sought and obtained authorization
from the U.S. Bankruptcy Court for the Southern District of New
York to retain Farrell Fritz, P.C. as counsel to the Committee,
nunc pro tunc to Nov. 13, 2013.
In addition to acting as primary spokesperson for the Committee,
Farrell Fritz's services will include, among other things, without
limitation, assisting, advising and representing the Committee
with respect to:
(a) the administration of these cases and the exercise of
oversight with respect to the Debtors' affairs, including
all issues arising from or impacting the Debtors or the
Committee in these Chapter 11 cases;
(b) the preparation on behalf of the Committee of all necessary
applications, motions, orders, reports and other legal
papers; and
(c) appearances in Bankruptcy Court and at statutory meetings
of creditors to represent the interests of the Committee
and, by extension, unsecured creditors.
Farrell Fritz will be paid at these hourly rates:
Ted A. Berkowitz, Partner $525
Louis A. Scarcella, Partner $525
Kristina M. Wesch, Special Counsel $475
Darren A. Pascarella, Associate $430
Veronique A. Urban, Associate $395
Law Clerks/Paralegals $110-$280
Associates $250-$445
Counsel $400-$600
Partners $425-$675
Farrell Fritz will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Ted A. Berkowitz, member of Farrell Fritz, 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 Metro Affiliates
Staten Island, New York-based Metro Affiliates, Inc., and its
subsidiaries sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. S.D.N.Y. Case No. 13-13591) on Nov. 4, 2013. The
case is assigned to Judge Sean Lane.
Lisa G. Beckerman, Esq., and Rachel Ehrlich Albanese, Esq., at
Akin Gump Strauss Hauer & Feld LLP, in New York; and Scott L.
Alberino, Esq., at Akin Gump Strauss Hauer & Feld LLP, in
Washington, D.C., represent the Debtors. Silverman Shin & Byrne
PLLC serves as special counsel. Rothschild Inc. serves as the
Debtors' investment banker, while Kurtzman Carson Consultants LLC
serves as their claims and noticing agent.
Wells Fargo Bank, National Association, as agent for a consortium
of DIP lenders, is represented by Jonathan N. Helfat, Esq., at
Otterbourg, Steindler, Houston & Rosen, P.C., in New York.
The Bank of New York Mellon as indenture trustee and collateral
agent for prepetition noteholders, is represented by James
Gadsden, Esq., at Carter, Ledyard & Milburn LLP, in New York.
Certain Noteholders are represented by Kristopher M. Hansen, Esq.,
at Stroock & Stroock & Lavan LLP, in New York.
This is Metro Affiliates' third trip to Chapter 11. The Company,
together with its subsidiaries, previously sought protection under
Chapter 11 of the Bankruptcy Code on Aug. 16, 2002 (In re Metro
Affiliates, Inc., Case No. 02-42560 (PCB), Bankr. S.D.N.Y.). A
plan in the second Chapter 11 case was confirmed in September
2003. The first bankruptcy was in 1994.
METRO AFFILIATES: Panel Can Employ PwC as Financial Advisors
------------------------------------------------------------
The Official Committee of Unsecured Creditors of Metro Affiliates,
Inc. and its debtor-affiliates sought and obtained authorization
from the U.S. Bankruptcy Court for the Southern District of New
York to retain PricewaterhouseCoopers LLP as financial advisors to
the Committee, nunc pro tunc to Nov. 13, 2013.
The Committee expects that PwC's services will include, among
other things, without limitation, assisting, advising and
representing the Committee with respect to:
Phase 1 - Pre Auction
(a) review financial information prepared by the Debtors
or their consultants as requested by the Committee
including, but not limited to, a review of Debtors' cash
flow projections, DIP budget, asset purchase agreement,
data room materials, DIP credit agreement, etc.;
(b) assist the Committee in developing, evaluating, structuring
and negotiating the terms and conditions of offers received
on the sale of the Debtors' assets; and
(c) assist in a sale process of the Debtors collectively or in
segments, parts or other delineations.
Phase 2 - Post Auction
(a) perform a review of the Debtors' books and records and
other investigations that may be undertaken with respect to
pre-petition acts, related party transactions, financial
condition of the Debtors, its management, creditors
including the operation of their businesses, and, as
appropriate, avoidance actions, preferences and fraudulent
conveyances;
(b) assist the Committee with the wind down of the Debtors'
estates; and
(c) assist the Committee in monitoring, assessing, and
analyzing the Debtors' liquidation of assets not sold at
the proposed auction, including funds flow and cash
management, liquidation fees and expenses, analysis of
budget to net results, monitoring and analysis of asset
based and inventory levels.
Subject to the Court's approval, PwC intends to:
-- seek compensation for the hourly services at a blended rate
of $400 per hour, subject to a $50,000 per month fee cap;
and
-- seek monthly reimbursement of actual and necessary out-of-
pocket expenses, any applicable sales, use or value added
tax, and PwC's internal per ticket charges for booking
travel.
PwC intends to seek an additional fee -- "Completion Fee" -- at
the end of the engagement, in an amount to be mutually agreed upon
by the Committee and PwC, subject to the Court's approval.
Perry Mandarino, partner of PwC, 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 Metro Affiliates
Staten Island, New York-based Metro Affiliates, Inc., and its
subsidiaries sought protection under Chapter 11 of the Bankruptcy
Code on Nov. 4, 2013 (Bankr. S.D.N.Y. Case No. 13-13591). The
case is assigned to Judge Sean Lane.
Lisa G. Beckerman, Esq., and Rachel Ehrlich Albanese, Esq., at
Akin Gump Strauss Hauer & Feld LLP, in New York; and Scott L.
Alberino, Esq., at Akin Gump Strauss Hauer & Feld LLP, in
Washington, D.C., represent the Debtors. Silverman Shin & Byrne
PLLC serves as special counsel. Rothschild Inc. serves as the
Debtors' investment banker, while Kurtzman Carson Consultants LLC
serves as their claims and noticing agent.
Wells Fargo Bank, National Association, as agent for a consortium
of DIP lenders, is represented by Jonathan N. Helfat, Esq., at
Otterbourg, Steindler, Houston & Rosen, P.C., in New York.
The Bank of New York Mellon as indenture trustee and collateral
agent for prepetition noteholders, is represented by James
Gadsden, Esq., at Carter, Ledyard & Milburn LLP, in New York.
Certain Noteholders are represented by Kristopher M. Hansen, Esq.,
at Stroock & Stroock & Lavan LLP, in New York.
This is Metro Affiliates' third trip to Chapter 11. The Company,
together with its subsidiaries, previously sought protection under
Chapter 11 of the Bankruptcy Code on Aug. 16, 2002 (In re Metro
Affiliates, Inc., Case No. 02-42560 (PCB), Bankr. S.D.N.Y.). A
plan in the second Chapter 11 case was confirmed in September
2003. The first bankruptcy was in 1994.
NATIONAL FINANCIAL: S&P Affirms 'B' CCR Over Madison Dearborn Deal
------------------------------------------------------------------
Standard & Poor's Ratings Services said that it affirmed its 'B'
long-term corporate credit rating on National Financial Partners
Corp. (NFP). The outlook is stable. At the same time, S&P
revised its recovery rating on the senior secured facilities to
'3' from '2', indicating meaningful (50%-70%) recovery for lenders
in the event of a payment default. S&P also lowered its issue
ratings on this debt to 'B' from 'B+' in accordance with its
notching criteria for recovery ratings.
The rating actions follow NFP's announcement that it will issue a
$120 million incremental term loan under its existing credit
facility to repay outstanding borrowings on the revolver that it
used to finance recent management contract buyouts (MBOs) and
acquisitions. In addition to the planned incremental term loan,
the senior secured credit facilities also consist of a
$751 million term loan B due 2020 (outstanding as of Sept. 30,
2013) and a $135 million revolving credit facility due 2018.
"The rating actions reflect our expectations that NFP's leverage
metrics will not increase materially following the transaction,"
said Standard & Poor's credit analyst Ying Chan. NFP's debt-to-
EBITDA ratio (including operating leases and earn-outs in debt)
was 7.0x for the 12 months ended Sept. 30, 2013, compared with
6.9x for pro-forma 2012 immediately following the proposed
leveraged buyout by Madison Dearborn Partners in July 2013.
The company will issue the new debt through an incremental credit
extension under its existing credit agreement. S&P expects the
incremental facility to be fungible with the existing term loan
with substantially the same terms and conditions, including an
indicative couple of LIBOR + 425 basis points (bps) with a 100 bps
floor and a bullet maturity in June 2020. NFP will use funds from
the issuance to repay about $110 million of revolver draw-down
that it used to fund recently closed MBOs and acquisitions.
The recovery rating revision to '3' from '2' reflects the larger
amount of senior secured debt outstanding in our simulated default
scenario compared to S&P's prior analysis after the transaction.
The larger senior secured tranche relative to a relatively
unchanged simulated net enterprise value resulted in a lower
expected recovery for lenders of the senior secured facilities.
The outlook on NFP is stable, reflecting S&P's expectations that
the company will be able to maintain its adequate liquidity and
stable adjusted EBITDA margins. S&P also expects NFP to generate
good organic revenue growth in the low single digits and to
continue its acquisition and MBO strategy, which should translate
into annual revenue growth of about 5% during the next 12 months.
Based on S&P's forecast assumptions, it expects adjusted leverage
to approach 6.5x during the next 12 months through stronger EBITDA
and mandatory debt repayment.
S&P could lower the rating during the next 12 months if leverage
and coverage deteriorate or because of a more aggressive approach
to financial policy or a decline in earnings, resulting in
sustained leverage of more than 7.5x and coverage of less than
2.0x.
S&P could consider raising the rating on NFP if the company is
able to improve adjusted EBITDA margins above the 20% range and
reduce its total adjusted leverage to less than 5.5x on a
sustainable basis. However, S&P views this as unlikely given its
belief that the company will use excess cash toward acquisitions
and reinvestment in the business instead of for deleveraging.
NAZARETH LIVING: Fitch Affirms 'BB' Rating on $7.6MM Revenue Bonds
------------------------------------------------------------------
Fitch Ratings has affirmed the 'BB' rating on the following St.
Louis County Industrial Development Authority (MO) bonds, issued
on behalf of Nazareth Living Center (NLC):
-- $7.6 million series 1999 refunding revenue bonds.
The Rating Outlook is Stable.
NLC has an additional $8 million in series 2012 fixed rate bonds
which Fitch does not rate.
Security
The bonds are secured by a pledge of gross revenues, a first
mortgage lien, and a debt service reserve fund.
Key Rating Drivers
ILU PROJECT COMPLETED: NLC successfully constructed and sold 50
new independent living units (ILUs) in 2013, which opened in July
2013. The Sisters of St. Joseph of Carondolet (CSJ) agreed to
purchase and occupy 30 of those ILUs, and NLC was successful in
marketing and selling the remaining 20 ahead of schedule. Fitch
believes the project should preserve NLC's position in the very
competitive St. Louis market, as well as bolster its revenue base
over the near term.
Balance Sheet Pressure: The 'BB' rating reflects NLC's significant
debt burden and stressed balance sheet. Total long-term debt was
$15.4 million at Sept. 30, 2013, equaling a high 10.8x debt to net
available and 69% debt to capitalization. NLC used excess
entrance fee proceeds to repay a $1.9 million short-term note to
CSJ, and its balance sheet remains light, providing only limited
cushion against operating risk. Unrestricted cash and investments
equaled $3.3 million at Sept. 30, 2013, equating to 75 days of
cash on hand (DCOH) and 21.5% cash to debt.
Occupancy Remains Mixed: While the new ILUs filled to 100% ahead
of schedule in November, total assisted living unit (ALU)
occupancy remained low at 57.5% overall through the three-month
interim period ended Sept. 30, 2013. Skilled nursing (SN)
occupancy is steady at 86%. Occupancy in AL and SN remains
pressured due in part to the competitive service area.
Adequate Operating Performance: NLC continues to produce
sufficient operating cash flow to provide 1.1x coverage of maximum
annual debt service ($1.3 million) in the three-month interim
period on a revenue only basis. Once NLC starts collecting
turnover entrance fees and amortizing revenue in fiscal 2014,
coverage is expected to improve accordingly.
Rating Sensitivities
Limited Financial Flexibility: While not anticipated, operating
volatility against NLC's limited liquidity and large debt burden
would likely result in negative rating pressure. However, Fitch
expects NLC to begin growing liquidity over the near term as its
capital needs wane and it begins to accrue its new entrance fee
revenue source.
Future Capital Plans: Over the longer term, NLC may execute a
additional campus repositioning or expansion as part of its
overall strategic plan. Fitch does not anticipate this within the
next 12-18 months, and will continue to monitor any plans as they
become imminent, taking rating action as necessary.
Located in St. Louis, MO, NLC operates 50 ILUs, 150 ALUs and 140
SNF beds, generating $15.4 million in total revenue in fiscal
2013. Benedictine Health System (BHS) and the Sisters of St.
Joseph of Carondolet (CSJ) are joint members of NLC.
NLC is required to disclose only annual financial statements,
disseminated via the Municipal Securities Rulemaking Board's EMMA
system. However, Fitch views NLC's consistent voluntary
distribution of interim financials and occupancy statistics
favorably.
Ilu Project Completed
NLC completed its $16 million 50-unit ILU expansion project on
time and within budget, and reached 100% occupancy by November
2013 ahead of the forecast. Fitch expects this project will help
diversify its revenue base, which has been heavily reliant on SNF
revenues and CSJ occupancy. Further, the ILU product should help
NLC maintain market relevance within a competitive service area,
as it is the only religiously-affiliated type-C fee-for-service
entrance fee model in the primary target market.
Still, Fitch notes NLC will be evaluating the future needs of its
assisted living and memory care service lines as part of an
ongoing strategic plan. Its ALU census continues to be light
against competitors with comparatively newer physical plants.
Significant Debt Level
The 'BB' rating reflects NLC's debt burden against a light balance
sheet, which provides very limited room for operating volatility.
Still, NLC has produced consistent coverage on a revenue-only
basis since 2008, and its new ILU service line should help bolster
revenues and coverage going forward. NLC has no current plans for
additional debt, and annual capital expenditures are budgeted near
$400,000 through 2016.
Steady Cash Flow
Despite somewhat mixed occupancy, NLC has generated relatively
consistent profitability as its SNF revenues have remained steady.
For fiscal 2013, NLC produced an 8.6% net operating margin and
93.4% operating ratio, which held steady through the three-month
interim period at 7.2% and 98%, respectively. Fitch expects NLC
will maintain steady to improving operating results, and NLC's
fiscal 2014 budget calls for a 10.6% net operating margin and 1.5x
maximum annual debt service (MADS) coverage as ILU revenues begin
positively impacting cash flow.
OGX PETROLEO: Struggles to Meet Deadline for Restructuring Plan
---------------------------------------------------------------
Luciana Magalhaes, writing for The Wall Street Journal, reported
that a crucial deadline for the restructuring agreement of
Brazilian oil company Oleo e Gas Participacoes SA, controlled by
businessman Eike Batista, might not be met this week, according to
two people familiar with the situation.
According to the report, in one of Latin America's largest
bankruptcy cases, OGP filed for protection from creditors in late
October. In December, the company formerly known as OGX Petroleo e
Gas Participacoes SA announced a deal with creditors to exchange
debts valued at some $5.8 billion for shares, and to give
bondholders an option to invest an additional $200 million to $215
million in the company.
OGP had said it aimed to present the restructuring plan to the
bankruptcy court in Rio de Janeiro on or before Jan. 24, when it
was to receive the fresh funding from current bondholders, the
report said.
The financing agreement hadn't been completed as of the afternoon
of Jan. 23 because documents are still being drawn up, according
to one the people, the report related. There is a good chance the
restructuring plan won't be finished until next week, according to
one of the people. Both, however, said OGP will likely still be
able to receive an injection of capital of around $200 million,
including a $50 million bridge loan, announced earlier this month,
as a part of the restructuring plan.
A longer delay in arranging the financing could cause more
problems for OGP, which in January announced the first monthly
output figures for its only producing oil field, Tubarao Martelo,
off the coast of Rio de Janeiro, the report noted.
About OGX Petroleo
Based in Rio de Janeiro, Brazil, OGX Petroleo e Gas Participaaoes
S.A. is an independent exploration and production company with
operations in Latin America.
OGX filed for bankruptcy in a business tribunal in Rio de Janeiro
on Oct. 30, 2013, case number 0377620-56.2013.8.19.0001. The
bankruptcy filing puts $3.6 billion of dollar bonds into default
in the largest corporate debt debacle on record in Latin America.
The filing by the oil company that transformed Eike Batista into
Brazil's richest man followed a 16-month decline that wiped out
more than $30 billion of his personal fortune.
The filing, which in Brazil is called a judicial recovery, follows
months of negotiations to restructure the dollar bonds, in which
OGX sought to convert debt to equity and secure as much as $500
million in new funds. OGX said Oct. 29 that the talks concluded
without an agreement. The company's cash fell to about $82 million
at the end of September, not enough to sustain operations further
than December.
OVERSEAS SHIPHOLDING: Taps Deloitte FAS as Accountant
-----------------------------------------------------
Overseas Shipholding Group, Inc. and its debtor-affiliates seek
authorization from the U.S. Bankruptcy Court for the District of
Delaware to employ Deloitte Financial Advisory Services LLP as
fresh start accounting services provider, nunc pro tunc to
Dec. 10, 2013.
Deloitte FAS is anticipated to provide fresh start accounting
services, as requested by the Debtors and agreed to by Deloitte
FAS including the following services:
(a) Planning for the Debtors' determination of and
substantiation of the Fresh-Start Balance Sheet under ASC
852;
-- assist management in its development of an
implementation approach for freshstart accounting,
starting with any necessary training support and
culminating in a strategy and work plan for the project;
-- advise and provide recommendations to management in
connection with its determination of plan of
reorganization ("POR") adjustments necessary to
record the impact of the POR to the books of entry of
the appropriate legal entities;
-- assist management in its determination of asset and
liability adjustments.
(b) Other Related Advice and Assistance with Accounting and
Financial Reporting;
-- advise management as it prepares accounting information
and disclosures in support of public and private
financial filings such as 10-K, 10-Q's, public
registration statements, statutory reporting or lender
statements;
-- advise management as it evaluates existing internal
controls and develops new controls for fresh start
accounting implementation;
-- assist management with its responses to questions or
other requests from the Debtors' external auditors
regarding bankruptcy accounting and reporting matters.
and other fresh-start adjustments as necessary to comply
with the accounting and reporting requirements of ASC
852 and ASC 805 (Business Combinations);
-- assist management with its identification of tangible
and intangible assets (the "Assets"), as well as
liabilities for fresh start accounting purposes;
-- analyze estimates or other analyses performed by others,
if any, including, without limitation, management, and
assist management in identifying additional efforts
required to address open items;
-- assist management with its identification and estimation
of specific assets and liabilities in accordance with
ASC 820 for purposes of preparing accounting
adjustments, financial statements and related
disclosures of the restructured entities upon
confirmation of the POR and emergence from the Cases;
-- advise management as it assigns assets, including,
without limitation, goodwill, and liabilities to its
three reporting units, international crude tankers,
international product carriers and U.S. flag vessels;
-- coordinate information for auditor review; and
-- advise management as it addresses company-specific
issues surrounding allocations to specific assets, legal
entities, cost centers, operating segments and reporting
units.
Included as a specific task that the Debtors may request
Deloitte FAS to perform would be preparation of reports
that the Debtors may provide to their auditors as audit
evidence in support of the values established by the
Debtors under fresh-start accounting in connection with the
Cases.
(c) Application Support:
Assist management in its preparation and implementation of
the accounting treatments and systems updates for its fresh
start accounting implementation as of the fresh-start
reporting date. Application support includes the following
items as applicable:
-- definition of specific processing requirements;
-- programming specifications;
-- application configuration and set-up;
-- interface development;
-- data cleansing and reconciliation; and
-- project management and administration.
Deloitte FAS will be paid at these hourly rates:
Partner/Principal/Director $675
Senior Manager $575
Manager $455
Senior $390
Consultant $240
Deloitte FAS will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Anthony Sasso, director of Deloitte FAS, 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
application on Feb. 20, 2014, at 2:00 p.m. Objections, if any,
are due Feb. 13, 2014, at 4:00 p.m.
Deloitte FAS can be reached at:
Anthony Sasso
DELOITTE FINANCIAL ADVISORY SERVICES LLP
100 Kimball Drive
Parsippany, NJ 07054-0319
Tel: (973) 602-6000
About Overseas Shipholding
Overseas Shipholding Group, Inc. (OTC: OSGIQ), headquartered in
New York, is one of the largest publicly traded tanker companies
in the world, engaged primarily in the ocean transportation of
crude oil and petroleum products. OSG owns or operates 111
vessels that transport oil and petroleum products throughout the
world.
Overseas Shipholding Group and 180 affiliates filed voluntary
Chapter 11 petitions (Bankr. D. Del. Lead Case No. 12-20000) on
Nov. 14, 2012, disclosing $4.15 billion in assets and $2.67
billion in liabilities. Greylock Partners LLC Chief Executive
John Ray serves as chief reorganization officer. James L.
Bromley, Esq., and Luke A. Barefoot, Esq., at Cleary Gottlieb
Steen & Hamilton LLP serve as OSG's Chapter 11 counsel. Derek C.
Abbott, Esq., Daniel B. Butz, Esq., and William M. Alleman, Jr.,
at Morris, Nichols, Arsht & Tunnell LLP, serve as local counsel.
Chilmark Partners LLC serves as financial adviser. Kurtzman
Carson Consultants LLC is the claims and notice agent.
The Export-Import Bank of China, owed $312 million used for the
construction of five tankers, is represented by Louis R. Strubeck,
Jr., Esq., and Kristian W. Gluck, Esq., at Fulbright & Jaworski
LLP in Dallas; David L. Barrack, Esq., and Beret Flom, Esq., at
Fulbright & Jaworski in New York; and John Knight, Esq., and
Christopher Samis, Esq., at Richards Layton & Finger PA. Chilmark
Partners, LLC serves as financial and restructuring advisor.
Akin Gump Strauss Hauer & Feld LLP, and Pepper Hamilton LLP, serve
as co-counsel to the official committee of unsecured creditors.
FTI Consulting, Inc., is the financial advisor and Houlihan Lokey
Capital, Inc., is the investment banker.
PABELLON DE LA VICTORIA: Justiniano Firm Can't Step Down for Now
----------------------------------------------------------------
The Hon. Edward A Godoy of the U.S. Bankruptcy Court for the
District of Puerto Rico denied the motion of Gloria M. Justiniano
Irizarry, Esq., from Justiniano's Law Office to withdraw her legal
representation of Pabellon de la Victoria Mo I De Fe Inc.
The Court ordered Ms. Justiniano to supplement the Motion to
Withdraw Legal Representation as per P.R. LBR 9010-1(d)(3)(B).
The Court also said that it will not grant the withdrawal of
Attorney Justiniano until a new attorney files an appearance.
Corporations must be represented by a licensed attorney, the judge
said.
About Pabellon De La Victoria
Pabellon De La Victoria Movimiento Iglesias De Fe (MI FE) Inc.,
filed a Chapter 11 petition (Bankr. D.P.R. Case No. 12-08223) in
Ponce, Puerto Rico, on Oct. 16, 2012. Bankruptcy Judge Edward A.
Godoy oversees the case. Gloria M. Justiniano Irizarry, Esq., at
Justiniano's Law Office, in Mayaguez, Puerto Rico, serves as
counsel. The Debtor estimated assets and debts of $10 million to
$50 million. Banco Popular De Puerto Rico has $14 million in
unsecured claims. The petition was signed by Evelyn Dominguez
Ramos, president.
PAR PHARMACEUTICAL: S&P Puts 'B+' CCR on CreditWatch Negative
-------------------------------------------------------------
Standard & Poor's Ratings Services placed all of its ratings,
including the 'B+' corporate credit rating on Par Pharmaceutical
Companies Inc. on CreditWatch with negative implications.
"The CreditWatch placement reflects an increase in leverage to
more than 7x following the entirely debt-financed acquisition of
specialty pharmaceutical company JHP Pharmaceuticals for
$490 million," said Standard & Poor's credit analyst Michael
Berrian.
Although the addition of JHP will broaden Par's capability to
produce branded and generic injectables, and add a small portfolio
of products, JHP is a relatively small presence in the specialty
pharmaceutical market and lacks size and scale. Moreover,
Standard & Poor's continues to believe that Par's ability to
provide specialty manufacturing is not a strong barrier to entry
since most of the larger generic companies also possess these
capabilities.
S&P will resolve the CreditWatch when more details of the proposed
transaction become available. A downgrade, though, is likely to
be limited to one notch. "Par continues to generate positive free
cash flow despite the recent spike in adjusted leverage," said
Mr. Berrian.
PARADIGM HIGH: S&P Lowers Rating on School Revenue Bonds to 'BB-'
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its long-term rating to
'BB-' from 'BBB-' on the Utah Charter School Finance Authority's
charter school revenue bonds issued on behalf of Paradigm High
School (PHS). The outlook is stable.
"The rating action reflects our view of PHS' weaker-than-
anticipated operating results for the past two audited years,
which have resulted in inadequate debt service coverage to meet
the bond covenants," said Standard & Poor's credit analyst Duncan
Manning.
The stable outlook reflects S&P's anticipation that operating
performance will improve during the next year, consistent with
management's budget, and that PHS will make progress toward
reaching sufficient debt service coverage to comply with
covenants.
PEM THISTLE: Files Schedules of Assets and Liabilities
------------------------------------------------------
PEM Thistle Landing TIC 23, LLC filed with the U.S. Bankruptcy
Court for the District of Delaware its schedules of assets and
liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $39,500,000
B. Personal Property $4,472
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $35,300,000
E. Creditors Holding
Unsecured Priority
Claims $6,356
F. Creditors Holding
Unsecured Non-priority
Claims $951,553
----------- -----------
TOTAL $39,504,472 $36,257,909
A copy of the schedules is available for free at
http://bankrupt.com/misc/PEMTHISTLEsal.pdf
According to the Debtor's case docket, the meeting of creditors
has been held and continued until May 18, at 11:00 a.m., at J.
Caleb Boggs Federal Building, 844 King St., Room 5209, Wilmington,
Delaware.
About PEM Thistle
PEM Thistle Landing TIC 23, LLC, filed a bare-bones Chapter 11
petition (Bankr. D. Del. Case No. 13-13273) in Delaware on
Dec. 17, 2013.
The Debtor is a Single Asset Real Estate as defined in 11 U.S.C.
Sec. 101(51B) and its principal asset is located at 4801 East
Thistle Landing Drive, in Phoenix, Arizona.
Kathleen Mellor and Richard Mellor own 100% of the outstanding
membership interests in the Debtor. Ms. Mellor, as director,
signed the bankruptcy petition.
Kevin Scott Mann, Esq., at Cross & Simon, LLC, in Wilmington,
Delaware, serves as local counsel. The board resolution
authorizing the bankruptcy filing says that the Debtor is
authorized to hire the law firm of Freeborn & Peters LLP as
general bankruptcy counsel.
Judge Kevin Gross presides over the case.
The U.S. Trustee has not appointed an official Committee of
unsecured creditor.
PEM THISTLE: Creditors' Meeting Continued Until May 18
------------------------------------------------------
According to the docket in the Chapter 11 case of PEM Thistle
Landing TIC 23 LLC, the meeting of creditors pursuant to 11 U.S.C.
Sec. 341 has been held and continued until May 18, at 11:00 a.m.,
at J. Caleb Boggs Federal Building, 844 King St., Room 5209,
Wilmington, Delaware.
About PEM Thistle
PEM Thistle Landing TIC 23, LLC, filed a bare-bones Chapter 11
petition (Bankr. D. Del. Case No. 13-13273) in Delaware on
Dec. 17, 2013.
The Debtor disclosed $39,504,472 in assets and $36,257,909 in
liabilities as of the Chapter 11 filing. The Debtor is a Single
Asset Real Estate as defined in 11 U.S.C. Sec. 101(51B) and its
principal asset is located at 4801 East Thistle Landing Drive, in
Phoenix, Arizona.
Kathleen Mellor and Richard Mellor own 100% of the outstanding
membership interests in the Debtor. Ms. Mellor, as director,
signed the bankruptcy petition.
Kevin Scott Mann, Esq., at Cross & Simon, LLC, in Wilmington,
Delaware, serves as local counsel. The board resolution
authorizing the bankruptcy filing says that the Debtor is
authorized to hire the law firm of Freeborn & Peters LLP as
general bankruptcy counsel.
Judge Kevin Gross presides over the case.
The U.S. Trustee has not appointed an official Committee of
unsecured creditor.
PEM THISTLE: UST Objects to Employment of Kalee Investments
-----------------------------------------------------------
Roberta A. DeAngelis, U.S. Trustee for Region 3, objected to PEM
Thistle Landing TIC 23 LLC's motion to engage Kalee Investments,
Inc., to provide management and restructuring services to the
Debtor; and to retain the firm's Randy McQuay as chief
restructuring officer.
According to the U.S. Trustee, among other things:
1. Kalee has an actual conflict of interest; and
2. the Debtor has not established why a CRO is necessary in
the case.
In a separate filing, secured creditor DOF IV Reit Holdings, LLC,
objected to the hiring because it is unclear why the Debtor needs
to engage Kalee and a CRO to provide management and restructuring
services where the Debtor's only asset is a 0.97 percent ownership
interest in a property, the Debtor has no business activity and
99.03 percent of the owners of the property are not in bankruptcy.
DOF IV is owed no less than $38.9 million.
Application to Employ Kalee
The Debtor related that Kalee has served as property manager since
Oct. 31, 2015, pursuant to a property asset and management
agreement. Kalee, according to the Debtor, will:
a) take all steps necessary to keep the property clean and in
good repair, including managing all projects to maintain and
repair the property, entering into contracts for the cleaning,
repair and servicing of the property and paying all associated
expenses for the property;
b. interface with DOF or any subsequent holder of the loan; and
c. bill and collect rent and other charges due and payable from
any tenant of the property.
The Debtor agreed to pay Kalee, among other things:
1. a property management fee equal to 2.5 percent of the
property's gross revenue;
2. an asset management fee equal to 2 percent of the property's
gross revenue for each calendar year;
3. a construction management fee of 5 percent of any amounts
expended for construction, repair, or tenant improvements for the
property's financing fee of 1 percent of the principal amount of
any given to the TICs in connection with the property; and
4. selling commission equal to 1.5 percent of the sale price of
the property is the sale results from the offers in which Kalee
participated in obtaining.
The Debtor does not believe Kalee will be entitled to any leasing
commissions for services provided during the Chapter 11 case.
About PEM Thistle
PEM Thistle Landing TIC 23, LLC, filed a bare-bones Chapter 11
petition (Bankr. D. Del. Case No. 13-13273) in Delaware on
Dec. 17, 2013.
The Debtor disclosed $39,504,472 in assets and $36,257,909 in
liabilities as of the Chapter 11 filing. The Debtor is a Single
Asset Real Estate as defined in 11 U.S.C. Sec. 101(51B) and its
principal asset is located at 4801 East Thistle Landing Drive, in
Phoenix, Arizona.
Kathleen Mellor and Richard Mellor own 100% of the outstanding
membership interests in the Debtor. Ms. Mellor, as director,
signed the bankruptcy petition.
Kevin Scott Mann, Esq., at Cross & Simon, LLC, in Wilmington,
Delaware, serves as local counsel. The board resolution
authorizing the bankruptcy filing says that the Debtor is
authorized to hire the law firm of Freeborn & Peters LLP as
general bankruptcy counsel.
Judge Kevin Gross presides over the case.
The U.S. Trustee has not appointed an official Committee of
unsecured creditor.
PEM THISTLE: U.S. Trustee Unable to Appoint a Creditors Committee
-----------------------------------------------------------------
Roberta A. Deangelis, U.S. Trustee for Region Three, notified the
U.S. Bankruptcy Court for the District of Delaware that she was
unable to appoint an official committee of unsecured creditors in
the Chapter 11 cases of PEM Thistle Landing TIC 23, LLC. The U.S.
Trustee explained that there was insufficient response to the U.S.
Trustee's communication/contact for service on the committee.
About PEM Thistle
PEM Thistle Landing TIC 23, LLC, filed a bare-bones Chapter 11
petition (Bankr. D. Del. Case No. 13-13273) in Delaware on
Dec. 17, 2013.
The Debtor disclosed $39,504,472 in assets and $36,257,909 in
liabilities as of the Chapter 11 filing. The Debtor is a Single
Asset Real Estate as defined in 11 U.S.C. Sec. 101(51B) and its
principal asset is located at 4801 East Thistle Landing Drive, in
Phoenix, Arizona.
Kathleen Mellor and Richard Mellor own 100% of the outstanding
membership interests in the Debtor. Ms. Mellor, as director,
signed the bankruptcy petition.
Kevin Scott Mann, Esq., at Cross & Simon, LLC, in Wilmington,
Delaware, serves as local counsel. The board resolution
authorizing the bankruptcy filing says that the Debtor is
authorized to hire the law firm of Freeborn & Peters LLP as
general bankruptcy counsel.
Judge Kevin Gross presides over the case.
PHARMEDIUM HEALTHCARE: S&P Retains 'B' CCR After Increased Loan
---------------------------------------------------------------
Standard & Poor's Ratings Services said its 'B' corporate credit
rating and issue-level ratings on Lake Forest, Ill.-based
PharMEDium Healthcare Corp. are unaffected by the company's plans
to increase its first-lien term loan by $40 million and reduce
pricing. The company's financial risk profile will remain "highly
leveraged" with S&P's expectation of leverage to be more than 5.5x
and funds from operations to debt of 13%. The "weak" business
risk profile primarily reflects the company's narrow market focus
within the outsourcing sterile compounding services industry.
RATINGS LIST
PharMEDium Healthcare Corp.
Corporate Credit Rating B/Stable/--
Senior Secured
US $200 mil 2nd-lien term bank ln CCC+
Recovery Rating 6
$360 First-lien term loan B
Recovery Rating 3
PITTSBURG REDEVELOPMENT: Fitch Affirms 'BB-' Rating on Tax Bonds
----------------------------------------------------------------
Fitch Ratings has affirmed Pittsburg Redevelopment Agency,
California's (the agency) subordinate non-housing tax allocation
bonds (TABs) at 'BB-' and removed the Rating Watch Negative on the
following series:
-- $142.8 million, series 2006B, 2006C, 2008A.
The Rating Outlook is Stable.
Security
The subordinate TABs are secured by a junior lien on all taxes
allocated to the agency and payments from swap contracts, net of
the 20% housing set-aside, and the Contra Costa County (the
county) administrative fee. The bonds additionally are secured by
a cash-funded debt service reserve fund.
Key Rating Drivers
Subordination Lawsuit Successfully Resolved: Removal of the Rating
Watch Negative reflects the agency's successful resolution of a
lawsuit, filed by a school district (the district), which posed a
material threat to already inadequate debt service coverage
levels.
Insufficient Subordinate Coverage Levels: The 'BB-' subordinate
non-housing TABs' rating reflects variable rate structural risks,
and insufficient net tax increment to pay debt service. However,
the agency expects to use interest earnings and surplus housing
increment to pay debt service in fiscal 2014 with no draw from
debt service reserve funds.
Improved Av Growth Prospects: Solid home price appreciation and
new development should bode well for the project area's AV growth
at least in the near term. Lack of AV growth in fiscal 2014 was
due to the correction of an administrative error that resulted in
removal of certain properties from the project area.
Mixed Project Area Characteristics: The project area benefits from
its very large size and a low incremental value (IV) to base year
ratio, suggesting lower revenue volatility. However, AV fell
significantly during the housing-led recession, and the local
economy is weighed by high unemployment and low income levels.
Rating Sensitivities
TAX BASE PERFORMANCE: The rating may rise or fall from current
levels, depending on the future performance and sustainability of
the project area's tax base.
Credit Profile
On Dec. 16, 2013 the agency, district, and county auditor-
controller entered into a settlement and release agreement that
enshrines the subordination status of the school district's pass-
through payment and leaves no further avenue for legal dispute.
Had the district prevailed in its lawsuit, the agency could have
lost up to $3 million of tax increment annually, equivalent to
8.4% of 2014 AV. A loss of such magnitude would have materially
weakened the agency's already insufficient debt service coverage
levels.
In exchange for affirming the district's pass-through
subordination status, the district is allowed to retain the
majority of a $2.3 million pass-through payment made to the
district in June 2012 that otherwise would have been paid to the
agency. The one-time $2.3 million loss in 2012 was considered in
prior rating actions, and has no credit impact moving forward.
PLUG POWER: Capital Ventures Stake at 7.9% as of Jan. 10
--------------------------------------------------------
Capital Ventures International and Heights Capital Management,
Inc., disclosed in a Schedule 13G filed with the U.S. Securities
and Exchange Commission that as of Jan. 10, 2014, they
beneficially owned 10,000,000 shares of common stock of Plug Power
Inc. representing 7.9 percent of the shares outstanding. A copy
of the regulatory filing is available for free at:
http://is.gd/cpNgR4
About Plug Power
Plug Power Inc. is a provider of alternative energy technology
focused on the design, development, commercialization and
manufacture of fuel cell systems for the industrial off-road
(forklift or material handling) market.
KPMG LLP, in Albany, New York, expressed substantial doubt about
Plug Power's ability to continue as a going concern, following
their audit of the Company's financial statements for the year
ended Dec. 31, 2012, citing the Company's recurring losses from
operations and substantial decline in working capital.
As of Sept. 30, 2013, the Company had $40.03 million in total
assets, $35.36 million in total liabilities, $2.45 million in
series C redeemable convertible preferred stock, and $2.21 million
in total stockholders' equity.
Bankruptcy Warning
"Our cash requirements relate primarily to working capital needed
to operate and grow our business, including funding operating
expenses, growth in inventory to support both shipments of new
units and servicing the installed base, and continued development
and expansion of our products. Our ability to meet our future
liquidity needs, capital requirements, and to achieve
profitability will depend upon numerous factors, including the
timing and quantity of product orders and shipments; the timing
and amount of our operating expenses; the timing and costs of
working capital needs; the timing and costs of building a sales
base; the timing and costs of developing marketing and
distribution channels; the timing and costs of product service
requirements; the timing and costs of hiring and training product
staff; the extent to which our products gain market acceptance;
the timing and costs of product development and introductions; the
extent of our ongoing and any new research and development
programs; and changes in our strategy or our planned activities.
If we are unable to fund our operations without additional
external financing and therefore cannot sustain future operations,
we may be required to delay, reduce and/or cease our operations
and/or seek bankruptcy protection," the Company said in its
quarterly report for the period ended Sept. 30, 2013.
PUERTO RICO: White House Not Considering Bailout, Official Says
---------------------------------------------------------------
Mark Felsenthal, writing for Reuters, reported on Jan. 22 that the
White House is not considering a financial bailout for Puerto
Rico, where chronic fiscal challenges have raised the specter of a
Detroit-like bankruptcy, an Obama administration official said on
Jan. 22.
Michael Corkery, writing for The New York Times, reported on Jan.
21 that a group of hedge funds and private equity firms may help
Puerto Rico battle a financial crisis of high unemployment and a
crushing debt. The NY Times, citing people briefed on the
discussions, bankers at Morgan Stanley have been reaching out to
about a dozen hedge funds, private equity firms and other large
investors to gauge their interests in providing up to $2 billion
in financing to Puerto Rico.
The island's woes have led credit rating agencies to say they are
considering labeling the U.S. territory's general obligation debt
as junk bonds, Reuters said. Puerto Rico already pays the highest
interest rates of any big municipal bond issuer, Reuters noted.
"The President's Task Force continues to partner with the
Commonwealth to strengthen Puerto Rico's economic outlook and to
ensure that it is taking advantage of all existing federal
resources available to the Commonwealth," White House spokeswoman
Katherine Vargas told Reuters in an email. "There is no deep
federal assistance being contemplated at this time," she said,
Reuters cited.
With regards to the proposed financing from hedge funds and
private equity firms, one of those people briefed in the
discussions told the NY Times that the talks are fluid but the
debt could carry yield as high as 10 percent, more than double
what a highly rated city or state pays to borrow in the current
municipal market.
The proposed finacing shows just how dire Puerto Rico's situation
has become, the NY Times said. "It's unprecedented," Robert
Donahue, managing director at Municipal Market Advisors, told NY
Times. "It's a reflection of the increasing realization that
Puerto Rico has exceeded the risk appetite of the traditional
municipal bond market."
RICEBRAN TECHNOLOGIES: Stephen Baksa Stake at 9.2% as of Dec. 18
----------------------------------------------------------------
In a Schedule 13G filed with the U.S. Securities and Exchange
Commission, Stephen D. Baksa disclosed that as of Dec. 18, 2013,
he beneficially owned 286,190 shares of common stock of of
RiceBran Technologies representing 9.2 percent of the shares
outstanding. A copy of the regulatory filing is available for
free at http://is.gd/ziKOaI
About RiceBran
Scottsdale, Ariz.-based RiceBran Technologies, a California
corporation, is a human food ingredient and animal nutrition
company focused on the procurement, bio-refining and marketing of
numerous products derived from rice bran.
As reported in the TCR on April 15, 2013, BDO USA, LLP, in
Phoenix, Arizona, expressed substantial doubt about RiceBran
Technologies' ability to continue as a going concern. The
independent auditors noted that the Company has suffered recurring
losses from operations resulting in an accumulated deficit of
$204.4 million at Dec. 31, 2012. "Although the Company emerged
from bankruptcy in November 2010, there continues to be
substantial doubt about its ability to continue as a going
concern."
The Company's balance sheet at Sept. 30, 2013, showed $41.82
million in total assets, $38.16 million in total liabilities,
$7.86 million in temporary equity and a $4.22 million total
deficit attributable to the Company's shareholders.
SEVEN ARTS: Tonaquint Stake at 9.9% as of Jan. 17
-------------------------------------------------
In an amended Schedule 13G filed with the U.S. Securities and
Exchange Commission, Tonaquint, Inc., et al., disclosed that as of
Jan. 17, 2014, they beneficially owned 2,912,241 shares of common
stock of Seven Arts Entertainment representing 9.99 percent of the
shares outstanding. A copy of the regulatory filing is available
for free at http://is.gd/XleoFA
About Seven Arts
Los Angeles-based Seven Arts Entertainment, Inc. (OTC QB: SAPX)
was founded in 2002 as an independent motion picture production
and distribution company engaged in the development, acquisition,
financing, production and licensing of theatrical motion pictures
for exhibition in domestic (i.e., the United States and Canada)
and foreign theatrical markets, and for subsequent worldwide
release in other forms of media, including home video and pay and
free television.
The Company reported a net loss of $22.4 million on $1.5 million
of total revenue for the fiscal year ended June 30, 2013, compared
with a net loss of $11.2 million on $4.1 million of total revenue
for the fiscal year ended June 30, 2012.
The Hall Group, CPAs, in Dallas, Texas, expressed substantial
doubt about the Company's ability to continue as a going concern
following the financial results for the year ended June 30, 2013,
citing the Company's recurring losses from operations and net
capital deficiency.
As of Sept. 30, 2013, the Company had $15.58 million in total
assets, $23.93 million in total liabilities and a $8.35 million
total shareholders' deficit.
SKINNY NUTRITIONAL: Court Approves Sale of Assets for $1.5-Mil.
---------------------------------------------------------------
Judge Jean K. FitzSimon of the U.S. Bankruptcy Court for the
Eastern District of Pennsylvania authorized Skinny Nutritional
Corp. to sell all of its assets to Skinny Nutritional LLC for $1.5
million.
Excluded from the sale are the Debtor's cash, its interest in any
contracts other than the assumed contracts, any employee benefit
plans, all right, title and interest of the Debtor in and to all
current insurance policies, if any, and all of the Debtor's causes
of action against Cliffstar, Trim or the other Trim Parties
including Marc Cummins, Victoria Bracki and William Apfelbaum.
The purchase price is $1.5 million, less the then outstanding
amount of the DIP Loan on the closing date.
The Court entered an order:
(i) authorizing the sale of substantially all of the assets of
Skinny Nutritional Corp. to Skinny Nutritional LLC, free
and clear of liens, claims, encumbrances and interests,
pursuant to an Asset Purchase Agreement, dated as of
Nov. 15, 2013;
(ii) approved the terms of the Asset Purchase Agreement;
(iii) authorized the assumption by the Company and the assignment
to the Purchaser of certain contracts of the Company; and
(iv) granted certain related relief.
The Asset Purchase Agreement provides that the Assets will be sold
to the Purchaser on an "as is" "where is" basis, without express
or implied warranties, for a purchase price of $1,500,000, less
the outstanding amount of debtor-in-possession financing provided
to the Company by the Purchaser, and subject to adjustment, as
more particularly set forth in the Asset Purchase Agreement. As
of Jan. 15, 2014, the Company owes the Purchaser approximately
$131,000, for DIP financing (which amount includes the $100,000
LiDestri Deposit).
In its Order, the Bankruptcy Court made findings of fact that (i)
the Company had adequately marketed the Company's Assets; (ii) the
purchase price of the Assets set forth in the Asset Purchase
Agreement constituted the highest and otherwise best offer for the
Assets and provided fair and reasonable consideration therefor;
(iii) the Sale will provide a greater recovery for the Company's
creditors than would be provided by any other practical available
alternative; (iv) no other party had offered to purchase the
Acquired Assets for greater economic value to the Company; and (v)
the consideration to be paid by the Purchaser under the Asset
Purchase Agreement constituted reasonably equivalent value and
fair consideration for the Assets.
The Bankruptcy Court further found that the consummation of the
Sale of the Assets to the Purchaser were in the best interest of
the Company, its creditors, estate and other parties in interest,
and that the transfer of the Assets to the Purchaser will vest in
the Purchaser all right title and interest in and to the Assets,
free and clear of all claims and debts against the Company, other
than Permitted Encumbrances and liabilities assumed by the
Purchaser, all of which will attach to the proceeds of the Sale.
A copy of the Order of Bankruptcy Court approving the Sale of the
Assets is available for free at http://is.gd/L0wCaa
About Skinny Nutritional
Bala Cynwyd, Pa.-based Skinny Nutritional Corp. (OTC BB: SKNY.OB)
-- http://www.SkinnyWater.com/-- has developed and is marketing a
line of enhanced waters, all branded with the name "Skinny Water"
that are marketed and distributed primarily to calorie and weight
conscious consumers.
Skinny Nutritional filed a Chapter 11 bankruptcy petition (Bankr.
E.D. Pa. Case No. 13-13972) on May 3, 2013. The petition was
signed by Michael Salaman as chief executive officer. The Debtor
estimated assets and debts of at least $1 million. Obermayer
Rebmann Maxwell & Hippel, LLP, serves as the Debtor's counsel.
The Hon. Jean K. FitzSimon presides over the case.
The Company sought bankruptcy protection to avoid a forfeiture of
the Company's most important and valuable assets; namely its
intellectual property rights.
SOUTHWIRE COMPANY: Moody's Assigns Ba2 CFR & Rates $750MM Loan Ba3
------------------------------------------------------------------
Moody's Investors Service assigned a Ba2 corporate family rating
and Ba2-PD probability of default rating to Southwire Company
("Southwire"). In addition, Moody's assigned a Ba3 rating to the
company's proposed $750 million senior secured term loan. The
rating outlook is stable. This is a newly initiated rating and
this is Moody's first press release for this issuer.
On December 20, 2013 Southwire announced that it had entered into
a definitive agreement to acquire Coleman Cable, Inc. ("Coleman",
rated B1, stable) for approximately $786 million. Southwire will
use proceeds from the proposed $750 million senior secured term
loan, about $278 million of borrowings under its proposed
$1.0 Billion senior secured asset-based revolving credit facility
(unrated) and approximately $90 million of balance sheet cash to
fund the Coleman acquisition and repay existing indebtedness at
Southwire and Coleman. Moody's will withdraw the existing ratings
for Coleman at the close of the proposed transaction.
The following ratings were assigned as part of this rating action:
Issuer: Southwire Company
-- Corporate Family Rating -- Ba2
-- Probability of Default Rating -- Ba2-PD
-- Proposed $750 million senior secured term loan -- Ba3 (LGD5,
77%)
The rating outlook is stable.
The following ratings will be withdrawn upon the closing of the
acquisition:
Issuer: Coleman Cable, Inc.
-- Corporate Family Rating -- B1
-- Probability of Default Rating -- B1-PD
-- $275 million 9% senior unsecured notes due 2018 -- B2 (LGD5,
72%)
-- Speculative grade liquidity rating -- SGL-2
Rating outlook, Stable
Ratings Rationale
The Ba2 corporate family rating reflects Southwire's scale and
market position as one of the leading global manufacturers of
electrical wire and cable products (pro forma for the proposed
Coleman acquisition), strong pro forma credit metrics, relatively
conservative financial policies and moderate end market
diversification. For the LTM period ended Sept. 30, 2013, the
company's leverage on a debt to EBITDA basis (pro forma for the
proposed Coleman acquisition and including Moody's standard
adjustments) is just less than 3.0 times.
The rating also considers the strategic benefits of the proposed
Coleman acquisition, including increased product diversification,
access to some higher margin product offerings and strong
operational and product innovation capabilities. While the
Coleman acquisition is the largest that the company has pursued,
the rating acknowledges Southwire's demonstrated ability and track
record of generating meaningful synergies from past acquisitions.
At the same time, the Ba2 rating reflects the cyclical nature of
the company's business and relative lack of product
differentiation within the wire and cable manufacturing industry.
The rating further incorporates Southwire's exposure to volatile
raw material prices, somewhat inconsistent cash flow generation
trends, lack of geographic diversity relative to some large,
global peers and the resultant over-dependence on economic
conditions within North America.
The stable outlook incorporates Moody's expectation that Southwire
will continue to experience positive volume growth supported by a
modestly improving economic environment in the United States and
that it will refrain from additional debt financed acquisitions
over the near term. The outlook also presumes that the company
will be able to successfully integrate Coleman and will not
encounter any unforeseen challenges during the integration
process.
The ratings could be upgraded if Southwire successfully integrates
Coleman and consistently grows volumes on an organic basis while
further diversifying its product offerings and demonstrating its
commitment towards reducing leverage through funded debt
repayment. Given the highly cyclical and working capital
intensive nature of the company's business, an upgrade could be
considered should the company build a track record of consistent
and strong free cash flow generation. A ratings upgrade would
also require that Southwire maintain a very good liquidity profile
and adhere to conservative financial policies with respect to
shareholder enhancement activities and additional debt financed
acquisitions over the near term.
The ratings could be downgraded if Southwire's profitability and
EBITDA margins decline such that debt to EBITDA rises above 4.0
times on a sustained basis. Ratings could also be considered for
a downgrade if there is a sustained decline in the company's
operating cash flows. A significant deterioration in the
company's liquidity profile or an aggressive financial policy in
regards to shareholder enhancement activities or near term debt
financed acquisitions could also pressure the company's ratings.
The principal methodology used in this rating was the Global
Manufacturing Industry published in December 2010. Other
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the U.S., Canada and EMEA
published in June 2009.
Headquartered in Carrollton, Georgia, Southwire manufactures
copper and aluminum wire and cable for approximately 6,000
customers including electrical construction suppliers, retail home
centers, electric utilities, industrial clients and OEM
manufacturers throughout North America. Revenue as of the latest
twelve month period ended September 30, 2013 was approximately
$4.9 billion.
SPECIALTY PRODUCTS: PI Committee Opposes Plan Outline Approval
--------------------------------------------------------------
The Official Committee of Asbestos Personal Injury Claimants and
the Future Claimants' Representative have expressed their
objection to the Disclosure Statement for the First Amended Joint
Plan of Reorganization of Specialty Products Holding Corp. and
Bondex International, Inc.
In court papers, counsel to the PI Committee and the FCR assert
that the Disclosure Statement should not be approved because it
provides wholly inadequate information on the treatment of
asbestos personal injury claims against SPHC and Bondex -- making
it impossible for holders of Class 4 Claims to ascertain the value
of their claims or understand the treatment of their claims.
The counsel further contend that the Disclosure Statement
describes a plan that cannot be confirmed as a matter of law,
because the Plan purports to discharge the Debtors' liability for
future claims without meeting the exclusive and explicit
requirements of Sec. 524(g) of the Bankruptcy Code.
Moreover, the "alternative" plan proposed by the Debtors also
violates Section 1129 and 524(c) of the Bankruptcy Code, counsel
to the Objectors add.
Debtors React
The Debtors insist that contrary to the Objectors' assertion, the
Disclosure Statement contains a summary of treatment of the
asbestos claims and a detailed description of both the trust
distribution procedures (TDP) and the funding of the trust.
The Debtors clarify that there is "no matrix of fixed set of claim
values" because, pursuant to the TDP, the value of each claim will
be assessed and resolved on a claim by claim basis.
The Debtors also assert that the Plan contains no section 105(a)
channeling injunction -- but rather it provides for a section
524(g) channeling injunction that meets each requirement of that
section or, alternatively, in the event of cram down, a standard
section 1141(d) discharge injunction coupled with a common
automatic stay-type injunction to protect estate assets.
It is the Objectors' Plan that contains inadequate information,
the Debtors argue. The Court should deny the Objectors' request
for approval of their disclosure statement and solicitation
procedures, counsel to the Debtors insist.
Counsel to the Debtors further assert that the Court should find
that the Debtors' Disclosure Statement contains adequate
information, but defer solicitation of the Debtors' Plan until
passage of the bar date to permit the Debtors an opportunity to
potentially craft solicitation procedures that would not interfere
with the pending estimation appeal.
Counsel to the Official Committee of Asbestos PI Claimants are:
MONTGOMERY, McCRACKEN, WALKER & RHOADS, LLP
Natalie D. Ramsey, Esq.
Mark A. Fink, Esq.
1105 North Market Street, Suite 1500
Wilmington, DE 19801
Tel: (302) 504-7800
-- and --
Mark B. Sheppard, Esq.
123 South Broad Street
Philadelphia, PA 19109
Tel: (215) 772-1500
Counsel to the Future Claimants' Representative are:
YOUNG CONAWAY STARGATT & TAYLOR LLP
James L. Patton, Jr., Esq.
Edwin J. Harron, Esq.
Edmon Morton, Esq.
Sharon Zieg, Esq.
Erin Edwards, Esq.
Rodney Square
1000 North King Street
Wilmington, DE 19801
Tel: (302) 571-6600
About Specialty Products
Cleveland, Ohio-based Specialty Products Holdings Corp., aka RPM,
Inc., is a wholly owned subsidiary of RPM International Inc. The
Company is the holding company parent of Bondex International,
Inc., and the direct or indirect parent of certain additional
domestic and foreign subsidiaries. The Company claims to be a
leading manufacturer, distributor and seller of various specialty
chemical product lines, including exterior insulating finishing
systems, powder coatings, fluorescent colorants and pigments,
cleaning and protection products, fuel additives, wood treatments
and coatings and sealants, in both the industrial and consumer
markets.
The Company filed for Chapter 11 bankruptcy protection (Bankr. D.
Del. Case No. 10-11780) on May 31, 2010. Gregory M. Gordon, Esq.,
Dan B. Prieto, Esq., and Robert J. Jud, Esq., at Jones Day, serve
as bankruptcy counsel. Daniel J. DeFranceschi, Esq., Zachary
I. Shapiro, Esq., Paul N. Heath, Esq., and Tyler D. Semmelman,
Esq., at Richards Layton & Finger, serve as co-counsel. Logan and
Company is the Company's claims and notice agent. The Company
estimated its assets and debts at $100 million to $500 million.
The Company's affiliate, Bondex International, Inc., filed a
separate Chapter 11 petition on May 31, 2010 (Case No. 10-11779),
estimating its assets and debts at $100 million to $500 million.
On May 20, 2013, the Bankruptcy Court entered an order estimating
the amount of the Debtors' asbestos liabilities, and a related
memorandum opinion in support of the estimation order. The
Bankruptcy Court estimated the current and future asbestos claims
associated with Bondex International, Inc. and Specialty Products
Holding at approximately $1.17 billion. The estimation hearing
represents one step in the legal process in helping to determine
the amount of potential funding for a 524(g) asbestos trust.
SPRINT CORP: Signals $165 Million Charge for Job Cuts
-----------------------------------------------------
John Kell, writing for The Wall Street Journal, reported that
Sprint Corp. on Jan. 23 said it expects to record a roughly $165
million charge in the fourth quarter tied to job cuts the
cellphone carrier is planning for the first half of 2014.
According to the report, Sprint, which didn't say how many jobs it
plans to cuts, said the workforce reduction would include
management and non-management positions and should be largely
completed by June 30. Sprint employed about 39,000 as of the end
of 2012.
Sprint said the fourth-quarter charge would be tied to severance
and related costs, but also warned additional charges related to
the workforce reduction are expected in future periods, the report
related.
Sprint has languished as a second-tier U.S. wireless carrier in
recent years following its problematic $35 billion merger with
Nextel in 2005 that saddled the firm with the costs of running two
separate networks, one of which it finally shut down completely a
few months ago, the report said. Now majority-owned by SoftBank
Corp., Sprint needs to prove it is able to compete in a wireless
industry currently dominated by Verizon Wireless and AT&T Inc.
In a filing with the Securities and Exchange Commission, Sprint
said it began the cut jobs last week as a way to reduce costs to
"better meet the changing dynamics of the marketplace," the report
cited.
About Sprint Corp.
Sprint Corporation is a United States telecommunications holding
company that provides wireless services and is also a major global
Internet carrier.
* * *
In September 2013, Standard & Poor's Ratings Services said it
assigned its 'BB-' corporate credit rating to Sprint Corp., a
newly formed parent entity of the Overland Park, Kan.-based
wireless telecommunications carrier. At the same time, S&P
affirmed the 'BB-' corporate credit rating on Sprint Nextel Corp.,
which was renamed Sprint Communications Inc. and is a wholly owned
subsidiary of Sprint Corp. The outlook is stable. S&P also
affirmed all issue-level ratings at Sprint Communications as well
as at subsidiaries Sprint Capital Corp., iPCS, and Clearwire Corp.
ST. FRANCIS' HOSPITAL: Hires CohnReznick as Financial Advisor
-------------------------------------------------------------
St. Francis' Hospital, Poughkeepsie, New York and its debtor-
affiliates ask authorization from the U.S. Bankruptcy Court for
the Southern District of New York to employ CohnReznick LLP as
financial advisor, nunc pro tunc to the Dec. 17, 2013 petition
date.
The Debtors require CohnReznick LLP to:
(a) assist the Debtors with the preparation and submission of
financial information to the U.S. Trustee for the Southern
District of New York and Bankruptcy Court;
(b) assist the Debtors in their communication with and
dissemination of financial information to secured and
unsecured creditors;
(c) assist the Debtors in the preparation of customary
reporting for Chapter 11 debtors including monthly
operating reports;
(d) assist the Debtors in the analysis and preparation of
weekly compliance reporting in connection with DIP loan
financial and cash collateral requirements;
(e) review financial aspects of motions and responses thereto
for accuracy;
(f) prepare alternative dividend and liquidation analyses (high
and low scenarios);
(g) assist in the preparation of business plans to be utilized
as the basis for a plan of reorganization;
(h) identify and analyze potential avoidance action claims;
(i) assist the Debtors in the claim estimation and resolution
process;
(j) assist the Debtors in the evaluation of potential
reorganization scenarios and the preparation of documents
and analyses needed for the plan confirmation process;
(k) attend meetings and conduct telephone calls with
management, counsel and other parties, as necessary; and
(l) performing other services as requested by the Debtors.
CohnReznick LLP will be paid at these hourly rates:
Partner/Senior Partner $585-$800
Manager/Senior Manager/Director $435-$620
Other Professional Staff $275-$410
Paraprofessional $185
CohnReznick LLP will also be reimbursed for reasonable out-of-
pocket expenses incurred.
Prior to the petition date, the Debtors paid CohnReznick LLP a
retainer of $100,000, of which $96,543.35 currently remains.
Chad J. Shandler, partner in the Restructuring, Litigation &
Transactional Services group of CohnReznick 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.
CohnReznick LLP can be reached at:
Chad J. Shandler
COHNREZNICK LLP
1212 Avenue of the Americas
New York, NY 10036-1600
Tel: (212) 297-0400
Fax: (212) 922-0913
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 cases are
assigned to Judge Cecelia G. Morris.
St. Francis intends to 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: Taps Deloitte Corporate as Finance Advisor
-----------------------------------------------------------------
St. Francis' Hospital, Poughkeepsie, New York and its debtor-
affiliates ask for authorization from the U.S. Bankruptcy Court
for the Southern District of New York to employ Deloitte Corporate
Finance LLC as corporate finance advisor, nunc pro tunc to the
Dec. 17, 2013 petition date.
The Debtors require Deloitte Corporate to:
(a) assist and advise the Debtors in identification and
analysis of potential transaction structures;
(b) assist the Debtors with the coordination of the potential
transaction party's due diligence process;
(c) assist and advise the Debtors in connection with
transaction negotiations;
(d) assist the Debtors and their management in drafting a
Confidential Information Memorandum ("Memorandum") that
describes the Debtors and the desired sale or restructuring
transaction;
(e) assist the Debtors through their auction process and
provide assistance related to the potential sale or
restructuring transaction;
(f) assist the Debtors in preparing a synopsis which describes
the Debtors, their business and the potential sale or
restructuring transaction;
(g) assist the Debtors, including by communication (at the
Debtors' behest) with their bankruptcy counsel, in drafting
auction procedures and stalking horse bid protections for
which the Debtors intend to seek Bankruptcy Court approval;
(h) assist the Debtors in identifying potential transaction
parties that meet the Debtors' specifications;
(i) comment on the financial and strategic appeal of each
potential transaction party;
(j) coordinate and assist with the delivery of the Memorandum
by the Debtors with those pre-approved potential
transaction parties that have indicated a level of
interest;
(k) assist and advise the Debtors in identification and
analysis of potential structures of a proposed transaction
and provide consultation to the Debtors in connection with
structuring alternatives of a transaction;
(l) assist the Debtors with the coordination of the potential
transaction party's due diligence process;
(m) assist and advise the Debtors in connection with
transaction negotiations, including, but not limited to,
assisting the Debtors in their efforts to receive
additional bids that meet the criteria to be considered a
"qualified bid" pursuant to the bid procedures;
(n) coordinate and assist the Debtors to manage the auction,
including consultation with the Debtors and, at the
Debtors' behest, key stakeholders during the auction
regarding the Debtors' evaluation of competing bids; and
(o) read and provide business comments on transaction
documents, prepared by the Debtors' legal counsel,
including bid procedures motions, DIP financing motions,
letters of intent, term sheets, purchase and sale
agreements, buy/sell agreements, employment agreements,
confidentiality agreements and other similar or related
agreements.
The Debtors propose to pay Deloitte Corporate a transaction
success fee of $200,000 or 1% of Aggregate Consideration as
applicable in the event of consummation of the sales transaction
with Health Quest or an alternative transaction and $25,000
monthly fee, a portion of which will be credited against the
transaction success fee. In particular, 100% of the first six
monthly $25,000 fees plus 50% of the monthly fees thereafter will
be credited against the transaction success fee; provided that the
transaction success fee will not be less than zero in any
circumstances. Prior to the Petition Date, Deloitte Corporate
received $50,000 in applicable monthly fees which will be credited
against a transaction success fee.
Deloitte Corporate will also be reimbursed for reasonable out-of-
pocket expenses incurred.
Deloitte Corporate provided prepetition services to the Debtors.
The Debtors paid Deloitte Corporate approximately $115,000,
including certain retainers, in the 90 days prior to the petition
date. As of the petition date, no amounts were outstanding with
respect to invoices issued by Deloitte Corporate prior to the
petition date.
Simon Gisby, managing director Deloitte Corporate, 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.
Deloitte Corporate can be reached at:
Simon Gisby
DELOITTE CORPORATE FINANCE LLC
1633 Broadway
New York, NY 10019-6754
Tel: (212) 436-2495
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 cases are
assigned to Judge Cecelia G. Morris.
St. Francis intends 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: Hires Nixon Peabody as Attorneys
-------------------------------------------------------
St. Francis' Hospital, Poughkeepsie, New York and its debtor-
affiliates seek permission from the U.S. Bankruptcy Court for the
Southern District of New York to employ Nixon Peabody LLP as
attorneys, nunc pro tunc to the Dec. 17, 2013 petition date.
The Debtors propose to employ Nixon Peabody to serve as their
bankruptcy and restructuring counsel in these chapter 11 cases,
and in particular to render these professional services:
(a) advise the Debtors with respect to their powers and duties
as debtors in possession in the continued operation of
their business and the management of their properties;
(b) advise the Debtors and take all necessary or appropriate
actions at the Debtors' direction with respect to
protecting and preserving the Debtors' estates, including
the defense of any actions commenced against the Debtors,
the negotiation of disputes in which the Debtors are
involved, and the preparation of objections to claims filed
against the Debtors' estates;
(c) draft all necessary or appropriate motions, applications,
answers, orders, reports, and other papers in connection
with the administration of the Debtors' estates on behalf
of the Debtors;
(d) represent the Debtors in negotiations with all other
creditors, and other parties in interest, including
governmental authorities;
(e) take all necessary or appropriate actions in connection
with a plan or plans of reorganization and related
disclosure statements and all related documents, and such
further actions as may be required in connection with
the administration of the Debtors' estates;
(f) perform and advise the Debtors as to all other necessary
legal services in connection with the chapter 11 cases,
including, without limitation, any general corporate legal
services;
(g) represent the Debtors on matters relating to the
assumption or rejection of executor contracts and unexpired
leases;
(h) advise the Debtors with respect to general corporate, real
estate, litigation, environmental, labor, regulatory, tax,
healthcare and other legal matters which may arise during
the pendency of these Cases; and
(i) perform all other legal services that are necessary for the
efficient and economic administration of these Cases.
Based on the Debtors financial situation and its status as a non-
profit charitable organization, Nixon Peabody agreed to reduce its
standard rates in order to accommodate the Debtors. Nixon Peabody
will be paid at these hourly rates:
David Martland, Partner $450
Peter J. Millock, Partner $350
Daniel W. Sklar, Partner $350
Vincent Polsinelli, Partner $350
Lee Harrington, Partner $350
John Higgins, Partner $350
Christopher M. Desiderio, Associate $350
Morgan C. Nighan, Associate $320
Annica Sunner, Associate $300
Nixon Peabody will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Mr. Millock disclosed that before the Petition Date, Nixon Peabody
received certain amounts advanced from the Debtors as compensation
for professional services to be performed relating to the
potential restructuring of the Debtors' financial obligations and
the commencement and administration of the chapter 11 cases, and
for the reimbursement of reasonable and necessary expenses
incurred in connection therewith. Nixon Peabody has used these
advances to credit the Debtors' account for its charges for
professional services performed and expenses incurred before the
Petition Date. After application of the amounts received from the
Debtors as advances for payment of prepetition professional
services and related expenses, the Debtors still owed Nixon
Peabody $44,863.46, as of the filing which amount Nixon Peabody
has agreed to waive. In addition, before filing the Debtors paid
Nixon Peabody a retainer in the amount of $100,000 which will be
held as an advance payment retainer and applied, to the extent
allowed by the Court, to the payment of fees for services rendered
and the reimbursement of expenses incurred by Nixon Peabody in the
course of these chapter 11 cases.
The Executive Office for United States Trustees recently adopted
new Guidelines for Reviewing Applications for Compensation and
Reimbursement of Expenses Filed under 11 U.S.C. Sec. 330 by
Attorneys in Larger Chapter 11 Cases -- so-called Appendix B
Guidelines. By their terms, the Appendix B Guidelines "apply to
the USTP's review of applications for compensation filed by
attorneys in larger chapter 11 cases," and are intended as an
update to the original Guidelines adopted by the EOUST in 1996.
The Debtors and Nixon Peabody intend to make a reasonable effort
to comply with the U.S. Trustee's requests for information and
additional disclosures as set forth in the Appendix B Guidelines
both in connection with this application and the interim and final
fee applications to be filed by Nixon Peabody in the course of its
engagement. It is the Debtors' and Nixon Peabody's intention to
work cooperatively with the U.S. Trustee Program to address the
concerns that prompted the EOUST to adopt the Appendix B
Guidelines; however, in doing so, the Debtors and Nixon Peabody
reserve all rights as to the relevance and substantive legal
effect of the Appendix B Guidelines in respect of any application
for employment or compensation in these cases that falls within
the ambit of the Appendix B Guidelines.
In a declaration filed together with the Application, Arthur
Nizza, the President and Chief Executive Officer of St. Francis'
Hospital, said that prior to engaging Nixon Peabody LLP, he had
various discussions with Mr. Millock regarding Nixon Peabody's
rates and structures. After these discussions, Nixon Peabody
agreed to steeply discounted rates from their normal "rack rate"
at any of their various geographic locations.
Mr. Nizza said that although Nixon Peabody and the Debtors have
not yet agreed on a prospective budget and staffing plan, Nixon
Peabody has provided the Debtors an estimate of Nixon Peabody's
monthly fees for the first three months of the case. In specific,
Nixon Peabody has estimated its fees for (i) the period from the
Petition Date to the end of January at $500,0000; (ii) the month
of February at $225,000; and (iii) the month of March at $75,000.
Mr. Nizzal also confirmed that prior to hiring Nixon Peabody, the
Debtors interviewed three other law firms. All of these other
firms had higher rates than those being offered to the Debtors by
Nixon Peabody, fewer qualifications, and conflict issues.
Mr. Millock, member of Nixon Peabody, 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.
Nixon Peabody can be reached at:
Christopher M. Desiderio, Esq.
NIXON PEABODY LLP
437 Madison Avenue
New York, NY 10022
Telephone: (212) 940-3000
Facsimile: (212) 940-3111
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 cases are
assigned to Judge Cecelia G. Morris.
St. Francis intends to 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.
SUMMIT ACADEMY: S&P Affirms 'BB' Rating on 2011 & 2005 Bonds
------------------------------------------------------------
Standard & Poor's Rating Services affirmed its 'BB' long-term
rating on Summit Academy North (SAN), Mich.'s series 2011 and 2005
public school academy revenue bonds and removed the ratings from
CreditWatch with negative implications. The outlook is stable.
The rating had been placed on CreditWatch negative and lowered to
'BB' from 'BB+' because of Central Michigan University's (CMU)
Oct. 12, 2012, notice of its intent to revoke SAN's charter due to
a failure to submit educational service provider (ESP) amendments
and to comply with ESP policies and contract reporting
requirements, as well as a violation of Michigan conflicts of
interest statute. Since that time, the school has entirely
replaced its board of directors, removed its former executive
director, and submitted a full response to CMU addressing all of
the issues outlined in the notice, with six of the 10 counts fully
satisfied as of October 2013. Based on conversations with the
authorizer, CMU confirms SAN has responded to all counts
stipulated in the notice of intent to revoke and anticipates
resolution within the next 90 days. S&P will continue to monitor
this situation, and would likely take action should the outcome be
different than expected.
"The stable outlook reflects our view of Summit Academy North's
consistently positive operating results, contributing to maximum
annual debt service coverage of 1.3x for fiscal 2013, which we
view as good for the rating level," said Standard & Poor's credit
analyst Avani Parikh.
"The 'BB' rating reflects our view of the school's weak cash
position, lack of wait list depth, challenging local economy,
limited revenue pledge, and inherent uncertainty with regards to
charter renewals."
The stable outlook reflects S&P's expectation that during the one-
year outlook period the academy will at minimum sustain enrollment
levels, maintain positive operations with steady coverage, build
its cash reserves, and comply with bond covenants. In addition,
S&P expects the charter situation will be resolved within the next
90 days as communicated by the authorizer.
"We could consider a negative rating action during the outlook
period if the school is unable to build its unrestricted cash
position; if there is another year of covenant violations; or if
enrollment declines or any other factors pressure operations,
coverage, or unrestricted reserves from current levels. Although
unlikely given the academy's weak balance sheet, we could consider
a positive rating action if unrestricted reserves grow
significantly, coverage levels are maintained, and the school's
waiting list grows and demonstrates increasing demand," S&P
added.
Initially chartered in 1998 by Oakland University with a transfer
of authorizer to Central Michigan University in 2004, Summit
Academy North has two facilities in Wayne County, in suburban
Detroit, and serves more than 1,900 students in grades K-12.
SUNSET BLUE: Case Summary & Unsecured Creditor
----------------------------------------------
Debtor: Sunset Blue Development SE LLP
PO Box 8140
San Juan, PR 00910
Case No.: 14-00347
Chapter 11 Petition Date: January 22, 2014
Court: United States Bankruptcy Court
District of Puerto Rico (Old San Juan)
Debtor's Counsel: Jacqueline Hernandez Santiago, Esq.
JACQUELINE HERNANDEZ SANTIAGO
PO Box 366431
San Juan, PR 00936-6431
Tel: 787 751-1836
Email: quiebras1@gmail.com
Total Assets: $400,000
Total Liabilities: $2 million
The petition was signed by Francisco Javier Mendez, administrator.
The Debtor listed Scotia Bank, PO Box 36220, San Juan, PR 00936,
as its largest unsecured creditor holding a claim of $2 million.
SURGERY CENTER: S&P Retains 'B' CCR Following $20MM Add-On
----------------------------------------------------------
Standard & Poor's Ratings Services said its 'B' corporate credit
rating on Tampa-based Surgery Center Holdings Inc. is unchanged by
the proposed $20 million add-on to its second-lien term loan.
Earlier this month, the company launched a $70 million add-on to
the second-lien term loan. The two transactions would raise the
second-lien term loan to $210 million.
The 'CCC+' issue-level rating on the second-lien loan is also
unchanged. The recovery rating remains '6', reflecting S&P's
expectation for negligible (0%-10%) recovery in the event of a
default.
The company will use proceeds of the add-on to fund a sponsor
dividend.
The ratings on Center Holdings Inc. reflect Standard & Poor's
Ratings Services' view of the company's business risk profile as
"weak", primarily reflecting its reimbursement risk as the owner
and operator of outpatient surgery centers. The ratings also
reflect the company's "highly leveraged" financial risk profile,
with leverage expected to remain above 6x over the next year and
the company's aggressive financial policy, highlighted by the
proposed debt-financed dividend.
RATINGS LIST
Surgery Center Holdings Inc.
Corporate Credit Rating B/Stable/--
$210 million 2nd-lien term loan CCC+
Recovery Rating 6
TEAM NATION: VStock Transfer is New Transfer Agent
--------------------------------------------------
Team Nation Holdings, Corp., changed its transfer agent from
ClearTrust, LLC, to VStock Transfer, LLC, effective Jan. 15, 2014.
About Team Nation
Newport Beach, Calif.-based Team Nation Holdings Corporation is a
management and services company specializing in management
solutions for title companies and providing title production
services.
The Company reported net income of $323,051 on $1.08 million
of total revenue for the nine months ended Sept. 30, 2011,
compared with net income of $375,694 on $1.25 million of total
revenue for the same period during the prior year.
The Company's balance sheet at Sept. 30, 2011, showed
$3.04 million in total assets, $5.57 million in total liabilities,
and a $2.52 million total shareholders' deficit.
As reported by the TCR on April 13, 2011, Kelly & Company, in
Costa Mesa, Calif., said in its report that the Company's
significant debt servicing requirements, its ongoing operating
losses and negative cash flows along with the depressed value of
its common stock gives raise to substantial doubt about the
Company's ability to continue as a going concern. The Company
has sustained recurring losses and negative cash flows from
operations, at Dec. 31, 2010 it had negative working capital of
$4.2 million, total liabilities of $6.9 million, and a
stockholders' deficit of $3.9 million. The Company's only
significant source of revenue, and its sole customer, is a related
party. The Company expects that it will need to raise substantial
additional capital to accomplish its business plan over the next
several years and plans to generate the additional cash needed
through the sale of its common stock that currently has a
depressed value. The Company's most significant asset is a group
of eight non-current notes receivable - related party issued by
the Company's directors, amounting to $2.2 million at Dec. 31,
2010 (representing 73% of total assets).
UNI-PIXEL INC: Destrier Capital Stake at 6.1% as of Jan. 8
----------------------------------------------------------
In a Schedule 13G filed with the U.S. Securities and Exchange
Commission, Destrier Capital Management LLC and its affiliates
disclosed that as of Jan. 8, 2014, they beneficially owned
743,108 shares of common stock of Uni-Pixel, Inc., representing
6.1 percent of the shares outstanding. A copy of the regulatory
filing is available for free at http://is.gd/Qaw1oe
About Uni-Pixel Inc.
The Woodlands, Tex.-based Uni-Pixel, Inc. (OTC BB: UNXL)
-- http://www.unipixel.com/-- is a production stage company
delivering its Clearly Superior(TM) Performance Engineered Films
to the Lighting & Display, Solar and Flexible Electronics market
segments.
"As of December 31, 2012, we had a cash balance of approximately
$13.0 million and working capital of $12.8 million. We project
that current cash reserves will sustain our operations through at
least December 31, 2013, and we are not aware of any trends or
potential events that are likely to adversely impact our short
term liquidity through this term. We expect to fund our
operations with our net product revenues from our commercial
products, cash and cash equivalents supplemented by proceeds from
equity or debt financings, and loans or collaborative agreements
with corporate partners, each to the extent necessary," according
to the Company's annual report for the year ended Dec. 31, 2012.
Uni-Pixel incurred a net loss of $9.01 million in 2012, a net loss
of $8.56 million in 2011 and a net loss of $3.82 million in 2010.
As of Sept. 30, 2013, Uni-Pixel had $60.22 million in total
assets, $6.50 million in total liabilities and $53.71 million in
total shareholders' equity.
UNIFIED 2020: Ch.11 Trustee May Continue to Use Cash Collateral
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas
signed off on an eighth interim order authorizing Daniel J.
Sherman, Chapter 11 trustee for Unified 2020 Realty Partners, LP,
to use cash collateral.
The agreement was entered between the Debtor and United Central
Bank to resolve objection filed by the Bank. The Bank has
requested that the Court prohibit use of cash collateral, alleging
that the Debtor's assets are subject to the prepetition liens of
the Bank including liens on real estate, equipment, furniture, and
accounts receivables.
The Interim Order authorizes the Chapter 11 trustee to collect and
receive all accounts receivable and enter into all agreements
necessary to allow the trustee to use cash collateral. The
trustee would use the funds to continue the Debtor's ongoing
operations, which involves the ownership and leasing of
infrastructure critical to telecommunications companies and data
center facilities.
As adequate protection from any diminution in value of the
lender's collateral, the Debtor will grant the Bank a replacement
lien in, all prepetition and postpetition property.
As additional interim adequate protection, the Bank will be
afforded an administrative priority under Section 507(b) and
Section 503 (b) of the Bankruptcy Code.
The Court also ordered that no payments will be made to Edward W.
Roush, Jr., or any of his affiliates during the term of the
interim cash collateral order.
A final hearing on the use of cash collateral will be held on
March 3, 2014 at 2:30 p.m.
About Unified 2020 Realty
Unified 2020 Realty Partners, LP, was formed in November 2007 to
own the real property and improvements located at 2020 Live Oak
Street, in Dallas, Texas. The property is comprised of a 12-story
office building and an adjacent three-story parking garage and
annex.
Unified 2020 filed a petition under Chapter 11 of the Bankruptcy
Code (Bankr. N.D. Tex. Case No. 13-32425) in its home-town in
Dallas on May 6, 2013. The petition was signed by Edward Roush as
president of general partner. Judge Stacey G. Jernigan
presides over the Chapter 11 case.
In its schedules, the Debtor disclosed $280,178,409 in assets and
$46,378,972 in liabilities.
Arthur I. Ungerman, Esq., and Kerry S. Alleyne-Simmons, Esq., at
the Law Office of Arthur Ungerman, in Dallas, Texas, represent the
Debtor. Peter C. Lewis, Esq., and Jacob W. Sparks, Esq., at
Scheef & Stone, LLP, in Dallas, Texas, represent United Central
Bank.
The Debtor consented to the appointment of a trustee, and on
Aug. 9, 2013, Daniel J. Sherman was appointed as Chapter 11
trustee. Kevin D. McCullough, Esq., of Rochelle McCullough L.L.P.
serves as general bankruptcy counsel to the trustee.
The Debtor has obtained permission from the Bankruptcy Court to
proceed with the pursuit of its disclosure statement and plan, in
tandem or parallel with any effort by the trustee to propose a
plan.
VAULT CORPORATION: Case Summary & 6 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor affiliates filing separate Chapter 11 bankruptcy cases:
Debtor Case No.
------ --------
Vault Corporation 14-50093
31 Carry Way
Mound House, NV 89706
International Resources Company LLC 14-50095
Vault International LLC 14-50094
Chapter 11 Petition Date: January 22, 2014
Court: United States Bankruptcy Court
District of Nevada (Reno)
Judge: Hon. Bruce T. Beesley
Debtor's Counsel: Stephen R. Harris, Esq.
HARRIS LAW PRACTICE LLC
6151 Lakeside DR, Ste 2100
Reno, NV 89511
Tel: (775) 786-7600
Fax: (775) 786-7764
Email: steve@harrislawreno.com
Estimated Assets: $500,000 to $1 million
Estimated Liabilities: $1 million to $10 million
The petitions were signed by Rick Allen, president.
A list of Vault Corporation's six largest unsecured creditors is
available for free at http://bankrupt.com/misc/nvb14-50093.pdf
VITACOST.COM: Activist Says Stock Isn't so Healthy After All
------------------------------------------------------------
Sarah Pringle, writing for The Deal, reported that online dietary
supplement retailer Vitacost.com Inc. could face pressure from
minority shareholder Osmium Partners LLC regarding its tepid stock
performance, the investor hinted in a regulatory filing.
According to the report, Greenbrae, Calif.-based Osium, which
began investing in Vitacost as early as March, revealed its 8.2%
stake in the company Jan. 14 and said it may engage in discussions
with the company's board or stockholders regarding potential
corporate transactions or changes to the board or management.
Shares of Boca Raton, Fla.-based Vitacost, which trade on the
Nasdaq as VITC, have stumbled about 17% over the last 12 months,
finishing at $6.03 on Jan. 21, the report said.
Vitacost generated negative Ebitda of about $1.8 million for the
third quarter ended Sept. 30, representing its 14th straight
quarter of negative Ebitda, the report related. Revenue in the
third quarter was about $90.49 million.
Vitacost nearly had to make a prepackaged bankruptcy filing after
the Nov. 15, 2010, discovery of defects in its corporate
organizational and formation documents, as well as of certain
corporate transactions that may not have been authorized according
to corporate law requirements, the report further related. The
company is hoping to dodge the bankruptcy bullet again.
Vitacost.com, Inc. -- http://www.vitacost.com/-- is an online
retailer of health and wellness products, including dietary
supplements like vitamins, minerals, herbs and other botanicals,
as well as cosmetics, natural personal care products, pet
products, sports nutrition and health foods. The Company was
incorporated in Delaware and headquartered in Boca Raton, Florida.
WHEATLAND MARKETPLACE: Can Employ JST Law as Attorneys
------------------------------------------------------
Wheatland MarketPlace LLC sought and obtained authorization from
the Hon. Pamela S. Hollis of the U.S. Bankruptcy Court for the
Northern District of Illinois to employ Thomas W. Toolis and
Jahnke, Sullivan & Toolis, LLC (JST Law) as attorneys.
JST Law will, among other things, provide these services:
(a) consult with the Debtor concerning its powers and duties as
debtor in possession, the continued operation of its
business and the Debtor's management of the financial and
legal affairs of its estate;
(b) consult with the Debtor and with other professionals
concerning the negotiation, formulation, preparation, and
prosecution of a Chapter 11 plan and disclosure statement;
and
(c) confer and negotiate with the Debtor's creditors, and other
parties in interest, and their respective attorneys and
other professionals concerning the Debtor's financial
affairs and property, Chapter 11 plans, claims, liens, and
other aspects of this case.
JST Law will be paid at these hourly rates:
Thomas W. Toolis $450
Paralegal $100
JST Law will also be reimbursed for reasonable out-of-pocket
expenses incurred.
JST Law received a retainer in the sum of $15,000 for services in
connection with this Chapter 11 case and the filing fee of $1,213
for the case.
Thomas W. Toolis, partner of JST Law, 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. He may be reached at:
Thomas W. Toolis, Esq.
Jahnke, Sullivan & Toolis, LLC
5210 W. 95th Street Suite 102
Oak Lawn, IL 60453
TEL: 708.636.4000
FAX: 708.349.8333
Wheatland Marketplace, LLC, owner of a commercial retail center in
Naperville, Illinois, filed a Chapter 11 bankruptcy petition
(Bankr. N.D. Ill. Case No. 13-46492) in Chicago on Dec. 3, 2013.
The Debtor has tapped Thomas W. Toolis, Esq., at Jahnke, Sullivan
& Toolis, LLC, in Frankfurt, Illinois, as counsel. Coleen J.
Lehman Trust and Lucy Koroluk each holds a 50% membership interest
in the Debtor.
WHEATLAND MARKETPLACE: Can Tap Edgemark as Property Manager
-----------------------------------------------------------
Wheatland MarketPlace, LLC sought and obtained authorization from
the Hon. Pamela S. Hollis of the U.S. Bankruptcy Court for the
Northern District of Illinois to employ Edgemark Asset Management,
LLC as property manager, effective Dec. 2, 2013.
Edgemark Asset will be paid a monthly management fee of 4% of the
gross monthly receipts from collected rents or a base management
fee of $2,000 whichever is greater.
For any services not typically related to property management,
such as court appearances, sale or financing of the property,
preparation of estoppels certificates, assignment of leases, an
administrative additional service charge will be paid with the
following hourly rates:
Controller/Officer $150
Manager/Accountants $125
Clerical $75
Edgemark Asset will also be reimbursed for reasonable out-of-
pocket expenses incurred.
Richard M. Robey, senior vice president of Edgemark Asset, 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.
Wheatland Marketplace, LLC, owner of a commercial retail center in
Naperville, Illinois, filed a Chapter 11 bankruptcy petition
(Bankr. N.D. Ill. Case No. 13-46492) in Chicago on Dec. 3, 2013.
The Debtor has tapped Thomas W. Toolis, Esq., at Jahnke, Sullivan
& Toolis, LLC, in Frankfurt, Illinois, as counsel. Coleen J.
Lehman Trust and Lucy Koroluk each holds a 50% membership interest
in the Debtor.
XTREME GREEN: Incurs $3.2 Million Net Loss in 2013
--------------------------------------------------
Xtreme Green Products Inc. filed with the U.S. Securities and
Exchange Commission its annual report on Form 10-K disclosing
a net loss of $3.24 million on $661,315 of total revenue for the
year ended Dec. 31, 2012, as compared with a net loss of $2.16
million on $1.73 million of total revenue during the prior year.
The Company's balance sheet at Dec. 31, 2012, showed $466,510 in
total assets, $4.60 million in total liabilities and a $4.14
million total stockholders' deficit.
L.L. Bradford & Company, LLC, in Las Vegas, Nevada, 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 from
operations and has a net capital deficiency that raises
substantial doubt about its ability to continue as a going
concern.
A copy of the Form 10-K is available for free at:
http://is.gd/R0uHlS
About Xtreme Products
Xtreme Green Products Inc. filed a voluntary petition for relief
under Chapter 11 of the United States Bankruptcy Code (Bankr. D.
Nev. Case No. 13-17266) on Aug. 22, 2013. It is expected that the
Company will continue to operate its businesses as "debtor-in-
possession" under the jurisdiction of the Bankruptcy Court and in
accordance with the applicable provisions of the Bankruptcy Code.
The petition was signed by Neil Roth as president. The Debtor
disclosed assets of $253,585 and liabilities of $5,210,832.
Lenard E. Schwartzer, Esq., at SCHWARTZER & MCPHERSON LAW FIRM
-- bkfilings@s-mlaw.com -- serves as the Debtor's counsel. Judge
Mike K. Nakagawa presides over the case.
North Las Vegas, Nev.-based Xtreme Green Products Inc. has
developed a line of electric powered products such as personal
mobility vehicles, light trucks (UTVs) and (ATVs), motor cycles
and scooters. The Company's product line is based on its
proprietary "green" energy management system and electric
propulsion system. These products have the power and ability of
gas powered engines, but without the particulate pollution or
noise pollution.
XTREME POWER: Case Summary & Largest Unsecured Creditors
--------------------------------------------------------
Debtor affiliates filing separate Chapter 11 bankruptcy cases:
Debtor Case No.
------ --------
Xtreme Power Systems, LLC 14-10095
fka Xtreme Power Solutions
1120 Goforth Road
Kyle, TX 78640
Xtreme Power Inc. 14-10096
1120 Goforth Road
Kyle, TX 78640
Xtreme Power Grove, LLC 14-10097
aka Xtreme Power Horizon
1120 Goforth Road
Kyle, TX 78640
Type of Business: Focuses on the design, engineering,
installation, and monitoring of
integrated energy storage systems for power
generators, grid operators and commercial &
industrial end users, among others.
Chapter 11 Petition Date: January 22, 2014
Court: United States Bankruptcy Court
Western District of Texas (Austin)
Judge: Hon. Christopher H. Mott
Debtors' Counsel: Nathaniel Peter Holzer, Esq.
JORDAN HYDEN WOMBLE & CULBRETH & HOLZER, P.C.
500 N. Shoreline Blvd #900
Corpus Christi, TX 78401
Tel: (361) 884-5678
Fax: 361-888-5555
Email: pholzer@jhwclaw.com
- and -
Shelby A. Jordan, Esq.
JORDAN HYDEN WOMBLE CULBRETH & HOLZER, PC
500 North Shoreline, Suite 900 N
Corpus Christi, TX 78401
Tel: (512) 884-5678
Fax: 361-888-5555
Email: sjordan@jhwclaw.com
- and -
Antonio Ortiz, Esq.
JORDAN HYDEN WOMBLE CULBRETH & HOLZER, PC
1534 E. 6th Street, Suite 104
Brownsville, TX 78520
Telephone: (956) 542-1161
Telecopier: (956) 542-0051
E-mail: aortiz@jhwclaw.com
Debtors' Steve Tyndall, Esq.
Special BAKER BOTTS L.L.P.
Counsel: 98 San Jacinto Boulevard, Suite 1500
Austin, Texas 78701-4078
Phone: (512) 322-2500
Fax: (512) 322-2501
E-mail: steve.tyndall@bakerbotts.com
- and -
John Kaercher, Esq.
BAKER BOTTS L.L.P.
98 San Jacinto Boulevard, Suite 1500
Austin, Texas 78701-4078
United States
Phone: (512) 322-2500
Fax: (512) 322-2501
E-mail: john.kaercher@bakerbotts.com
Debtors' GORDIAN GROUP, LLC
Investment
Banker and
Financial
Advisor:
Estimated Assets: $10 million to $50 million
Estimated Debts: $50 million to $100 million
The petitions were signed by Alan Gotcher, PhD, CEO and president.
A. List of Xtreme Power Systems' 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Toshiba International Corp. Trade Vendor $752,800
13131 West Little York Rd.
Houston, Tx 77041-5807
Baker Botts, LLP Attorneys fees $687,194
98 San Jacinto Blvd., Ste. 1500
Austin, TX 78701
Dynapower Company, LLC Trade Vendor $582,237
85 Meadowland Drive
South Burlington, VT 05403
Bracewell & Giuliani, LLP Attorneys fees $271,589
P.O. Box 848566
Dallas, TX 75284-8566
American Express Credit card $153,292
purchases, finance
and other charges
Fish & Richardson Attorneys fees $115,671
Washington Media Group, Inc. Public relations $94,414
services
Control Panels USA, Inc. Trade Vendor $92,197
Chubb & Son Trade Vendor $87,356
Stratus Energy Group, LLC Consulting Fees $66,000
Microvast Power Systems Trade Vendor $60,577
Amphenol Nelson Dunn Trade Vendor $53,464
Technologies, Inc.
Dell Marketing, LP Trade Vendor $49,760
First Insurance Funding Corp. Insurance $41,494
Blue Cross Blue Shield of Texas Insurance $37,254
Gide Loyrette Nouel Attorneys fees $30,000
Humanetics II LTD Trade Vendor $28,339
Bender Electronics, Inc./ Trade Vendor $28,178
Bender Inc.
ATS International Services Inc. Trade Vendor $24,397
Epicor Software Corporation IT System $24,336
B. List of Xtreme Power Inc.'s 11 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Arnel Investments III, LP Bridge Notes $3,754,109
949 South Coast Drive, Ste., 600
Costa Mesa, CA 92626
Pendleton Capital Partners, LLC Bridge Notes $1,659,506
1725 S. County Club Drive
Mesa, AZ 85210
Amabro Investments Ltd. Bridge Notes $924,164
Geneva Place Waterfront Drive
P.O. Box 3469
Road Town
British Virgin Islands
Wild Rose Irrevocable Trust Bridge Notes $829,753
est 12/18/08
1725 S. Country Club Drive
Mesa, AZ 85210
Forever 7, LLC Bridge Notes $829,753
1725 S. Country Club Drive
Mesa, AZ 85210
U.S. Department of Energy Section 1603 $372,631
1000 Independence Ave. grants
Washington, DC 20585
Horizon Batteries, LLC Rent, lease, $338,676
5000 Legacy Drive, Suite 470 royalties
Plano, TX 75024
Skylakeusa-Three, LLC Bridge Notes $271,027
25 Nonhyeon-ro 28-gil,
Gangnam-gu
(Dogok-dong 517-10, 4th FL)
Seoul, Republic of Korea,
135-854
Spring Ventures, LLC Bridge Notes $172,718
Farwell, James P. Bridge Notes $113,205
Christensen Limited Liability Bridge Notes $107,287
C. List of Xtreme Power Grove's nine Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Horizon Batteries, LLC Trade Vendor $255,330
5000 Legacy Drive, Suite 470
Plano, TX 75024
Horizon Batteries-Real Estate LLC $133,346
Public Serv of Oklahoma Trade Vendor $4,427
Clean the Uniform Company Trade Vendor $4,408
North Texas Rural Services Trade Vendor $4,200
Grove Municipal Services Authority Utilities $685
Joplin Trailer Sales Inc. Trade Vendor $300
Bernice Sanitation LLC Trade Vendor $55
Airgas Trade Vendor $26
* BOOK REVIEW: Creating Value through Corporate Restructuring:
Case Studies in Bankruptcies, Buyouts, and
Breakups
--------------------------------------------------------------
Author: Stuart C. Gilson
Publisher: Wiley
Hardcover: 516 pages
List Price: $79.95
Review by David M. Henderson
Most business books fall into two categories. The first is very
important. It is like that stuff you have to drink before you
have a colonoscopy. You keep telling yourself, this is very
good for me, while you would rather be at the beach reading
Liar's Poker or Barbarians at the Gate.
Stuart Gilson, of the Harvard Business School, has managed to
write a book important to everybody in the distressed market
that is also quite enjoyable. His prose is fluid and succinct
and a pleasure to read. But don't take my word for it. The
dust jacket endorsements come from Jay Alix, Martin Fridson,
Harvey Miller, Arthur Newman, and Sanford Sigoloff. At a
collective gazillion dollars a billing hour, that's a lot of
endorsement.
Be advised that this is designed as a text book. The case study
format might be off-putting to some. The effect can be jarring
as you read the narrative history of the case and suddenly
confront the financial statements without any further clue as to
what to do, but this must be what it is like for the turnaround
manager. Even after reading several of the cases, when I got to
the financials I had that sinking feeling of, what do I do now?
If you read carefully, clues to the solutions are in the
introductions.
The book is divided into three "modules", bizspeek for sections:
Restructuring Creditors' Claims,. Restructuring Shareholders'
Claims, and Restructuring Employees' Claims. The text covers 13
corporate restructurings focusing on debt workouts, vulture
investing, equity spinoffs, tracking stock, assete divestitures,
employee layoffs, corporate downsizing, M & A, HLTs, wage give-
backs, employee stock buyouts, and the restructuring of employee
benefit plans. That's a pretty comprehensive survey, wouldn't
you say?
Dr. Gilson's chapter on "Investing in Distressed Situations" is
an excellent summary of the distressed market and a good
touchstone even for seasoned vultures.
Even in the two appendices on technical analysis, this book is
marvelously free of those charts and graphs that purport to show
some general ROI of distressed investing. Those are cute,
aren't they? As Judy Mencher has famously said, "You can buy
the paper at 50 thinking it's going to 70, but it can just as
easily go to 30 if you are not willing to act on it." Therein
lies the rub and the weakness, if inevitable, of this or any
book on corporate restructurings. As Dr. Gilson notes, no two
are alike, and the outcome is highly subjective, in our out of
Court, but especially in Chapter 11. Is the Judge enthralled by
Jack Butler as Debtor's Counsel or intimidated by Harvey Miller
as Debtor's Counsel? Are you holding "secured" paper only to
discover that when it was issued the bond counsel forgot to
notify the Indenture Trustee of the most Senior debt? Is
somebody holding Junior paper that you think is out of the money
only to have Hugh Ray read the fine print and discover that the
"Junior" paper is secured? This is the stuff of corporate
reorganizations that is virtually impossible to codify into a
textbook.
That said, this is an especially valuable text for anybody
working in the distressed market. As a Duke grad, I tend to be
disdainful of all things Harvard, but having read Dr. Gilson's
book, I am enticed to encamp by the dirty waters of the Charles
long enough to take his course, appropriately entitled,
"Creating Value Through Corporate Restructuring."
*********
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
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liabilities delivered to the nation's bankruptcy courts. The
list includes links to freely downloadable of these small-dollar
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Each Friday's edition of the TCR includes a review about a book of
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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,
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Copyright 2014. All rights reserved. ISSN: 1520-9474.
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