/raid1/www/Hosts/bankrupt/TCR_Public/140221.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, February 21, 2014, Vol. 18, No. 51
Headlines
22ND CENTURY: Clearwater Stake at 2.6% as of Dec. 24
22ND CENTURY: Richard Saffire Stake at 6.8% as of Dec. 12
ACOSTA INC: Moody's Affirms B2 CFR & B1 Sr. Secured Debt Rating
ADEPT TECHNOLOGIES: May Continue Using PNC Bank's Cash Collateral
ADVANCED MICRO: Moody's Affirms B2 CFR & Revises Outlook to Neg.
ADVANCED MICRO: BlackRock Stake at 5.1% as of Dec. 31
AEROGROW INTERNATIONAL: Posts $302,000 Net Income in Q3 2013
ALLIED DEFENSE: AQR Capital No Longer Owns Common Shares
AMERICAN POWER: Marc Chalfen No Longer a Shareholder
ARCHDIOCESE OF MILWAUKEE: Plan Pledges $4-Mil. for Abuse Victims
ARCHDIOCESE OF MILWAUKEE: Wins Approval to Hire Quarles' Fee Cap
ARCHDIOCESE OF MILWAUKEE: Seeks to Disallow Knighton Claim
ARCTIC GLACIER: Loan Re-pricing No Impact on Moody's 'B3' CFR
ARYSTA LIFESCIENCE: Moody's Assigns B2 CFR & Rates $175MM Loan B1
AS SEEN ON TV: Has $2.26-Mil. Net Income in Dec. 31 Quarter
BALL CORPORATION: Fitch Affirms 'BB+' IDR & LT Debt Ratings
BEAZER HOMES: Vanguard Group Stake at 3.2% as of Dec. 31
BEAZER HOMES: Kenneth Griffin Stake at 5.3% as of Feb. 7
BERGENFIELD SENIOR: Hires Bruce Sartori as Accountant
BIG HEART: Moody's Affirms B2 CFR & Alters Outlook to Stable
BISHOP OF STOCKTON: Five Members Named to Creditors' Committee
BISHOP OF STOCKTON: Files Preliminary Status Report
BISHOP OF STOCKTON: Provides More Info on Greeley Hiring
BISHOP OF STOCKTON: Schedules of Assets and Liabilities Filed
BISHOP OF STOCKTON: Files Statement of Financial Affairs
BROOKLYN NAVY: Moody's Lowers Senior Secured Debt Rating to Caa1
BURCON NUTRASCIENCE: Posts C$1.54-Mil. Loss in Qtr. Ended Dec. 31
BURGER KING: Fitch Affirms 'B+' Long-Term Issuer Default Rating
C&K MARKET: April 10 Hearing on Adequacy of Plan Outline
CASH STORE: Board Establishes Special Committee of Directors
CASH STORE: Moody's Lowers CFR & Senior Secured Debt Rating to Ca
CEDAR CREST: S&P Lowers Rating on 2006 Revenue Bonds to 'BB+'
CENVEO INC: S&P Affirms 'B-' CCR & Removes Rating from CreditWatch
CHA CHA ENTERPRISES: Has Conditional Extension of Plan Exclusivity
CLASSIC PARTY: Court Approves Chapter 11 First Day Motions
COASTLINE INVESTMENTS: Two Pomona, California Hotels in Ch. 11
COLLEGE WAY: May Hire Ha Thu Dao as Special Counsel
COMSTOCK MINING: Peter Palmedo Stake at 8.2% as of Dec. 31
CRYOPORT INC: Has $1.84-Mil. Net Loss in Dec. 31 Quarter
CUMULUS MEDIA: Canyon Capital Stake at 7% as of Dec. 31
D.R. HORTON: Fitch Rates Proposed $400MM Sr. Notes Offering 'BB'
D.R. HORTON: Moody's Raises CFR to Ba1 & Rates $400MM Notes Ba1
D.R. HORTON: S&P Assigns 'BB' Rating to New $400MM Unsecured Notes
DIOCESE OF GALLUP: Wants Plan Filing Deadline Moved to Sept. 8
DIOCESE OF GALLUP: Wants June 10 Lease Decision Deadline
DIOCESE OF GALLUP: Panel Says Debtor Flip Flops on Parish Issue
DIOCESE OF GALLUP: BP Wants Limited Access to Oil Agreements
DIOCESE OF GALLUP: Has Deal on Payment to Ally Servicing
DIOCESE OF HELENA: Proposes Elsaesser Jarzabek as Counsel
DIOCESE OF HELENA: Taps Driscoll as Special Counsel
DIOCESE OF HELENA: Sec. 341(a) Meeting of Creditors on March 10
DIOCESE OF HELENA: Amends List of Top Unsecured Creditors
DYNASIL CORP: Posts $1.44-Mil. Net Income for Q4 Ended Dec. 31
ECO BUILDING: Issues 11,000 Preferred Shares to CEO
EMPIRE RESORTS: Amends $250 Million Securities Prospectus
ENGLOBAL CORP: NorthPointe Stake at 5.7% as of Feb. 10
FIRST QUANTUM: Fitch Affirms 'BB' IDR & Senior Unsecured Ratings
GELTECH SOLUTIONS: Has $2.05-Mil. Net Loss in Dec. 31 Quarter
HELIA TEC: March 12 Hearing on Bid to Employ Richard Battaglia
HERCULES OFFSHORE: Vanguard Group Stake at 5.4% as of Dec. 31
HOVNANIAN ENTERPRISES: Vanguard Group Stake at 6.2% as of Dec. 31
ISTAR FINANCIAL: Vanguard Owns 4.93% of REIT
ISTAR FINANCIAL: BlackRock Stake at 9.6% as of Dec. 31
JAMES RIVER: Vanguard Group Stake at 4.2% as of Dec. 31
JASPER MERGER: S&P Assigns 'B' CCR & Rates $470MM Sec. Loan 'BB-'
JONES GROUP: S&P Retains 'BB-' CCR on CreditWatch Negative
KEMET CORP: Files Copy of Investor Presentation with SEC
KEMET CORP: Vanguard Group Stake at 2.8% as of Dec. 31
LAS VEGAS RAILWAY: Posts $5.92-Mil. Net Loss in Dec. 31 Quarter
LEE ENTERPRISES: Outlines Digital Strategies; Mulls Refinancing
LOFINO PROPERTIES: Trustee May Use Cash Collateral Thru Feb. 28
LOFINO PROPERTIES: Taps Paul Shaneyfelt as Counsel
LONESTAR INTERMEDIATE: S&P Lowers Counterparty Rating to 'B'
LPATH INC: Franklin Resources Stake at 6.7% as of Dec. 31
M LINE HOLDINGS: Reports $269-K Net Income in Dec. 31 Quarter
MASCO CORP: Fitch Affirms 'BB' IDR, Outlook Revised to Positive
MISSION NEW ENERGY: SLW Int'l Stake at 3.3% as of Feb. 3
MISSION NEW ENERGY: Westcliff No Longer Owns Ordinary Shares
MMODAL INC: S&P Lowers CCR to 'D' on Missed Interest Payment
MONTREAL MAINE: Wheeling Railway Claims Stake in Receivables
NASSAU TOWER: Feb. 24 Hearing on 472 Princeton Ave. Property Sale
NATIVE WHOLESALE: Webster Szanyi to Handle Supreme Court Appeal
OVERSEAS SHIPHOLDING: Mullin May File Fee Application Under Seal
PAYLESS INC: Moody's Rates 1st Lien Loan B1 & 2nd Lien Loan B3
PAYLESS INC: S&P Assigns 'CCC+' Rating to $145MM 2nd Lien Loan
QUANTUM FOODS: Proposes CTI-Led Auction for All Assets
REEVES DEVELOPMENT: Iberiabank Opposes 2nd Amended Plan Outline
RELIABRAND INC: Reports $345K Net Loss in Dec. 31 Quarter
RITE AID: BlackRock Stake at 5.8% as of Dec. 31
SAFENET INC: Moody's Rates 1st Lien Loan B1 & 2nd Lien Loan Caa1
SAFENET INC: S&P Affirms 'B' CCR; Outlook Stable
SAVIENT PHARMACEUTICALS: Files Schedules of Assets and Liabilities
SINCLAIR BROADCAST: Vanguard Group Stake at 5.4% as of Dec. 31
SEQUENOM INC: Vanguard Group Stake at 5.6% as of Dec. 31
SOUTHLAND 75: Wants to Hire Pickrel Schaeffer as Counsel
SR REAL ESTATE: Court Dismisses Chapter 11 Bankruptcy Case
SWIFT TRANSPORTATION: S&P Revises Outlook on 'B+' CCR to Positive
UMEWORLD LTD: Albert Wong & Co. Raises Going Concern Doubt
TOWER GROUP: Incurs $344.13-Mil. Net Loss in Sept. 30 Quarter
TECHPRECISION CORP: Reports $757-K Net Loss for Dec. 31 Quarter
UNIVERSAL HEALTH: Bid to Name Abernathy as Sole Director Dropped
VIGGLE INC: Amends Form S-1 Prospectus
VISION INDUSTRIES: Renews CEO Employment for Three Years
VISUALANT INC: Reports $845K Net Loss for Qtr. Ended Dec. 31
WEST CORP: QCP GP Investors Stake at 9% as of Dec. 31
WESTERN FUNDING: Corporate Name Changed Following Asset Sale
WHEATLAND MARKETPLACE: Taps Weber & Associates as Accountant
WINDSTREAM CORPORATION: Fitch Cuts IDR to 'BB'; Outlook Stable
WNA HOLDINGS: Moody's Rates $50MM Incremental Term Loan 'B1'
* James Peck to Join MoFo as Co-Chair of Insolvency Group
* KCC Bags Restructuring & Bankruptcy Service of the Year Award
* BOOK REVIEW: The Oil Business in Latin America: The Early Years
*********
22ND CENTURY: Clearwater Stake at 2.6% as of Dec. 24
----------------------------------------------------
In an amended Schedule 13D filed with the U.S. Securities and
Exchange Commission, Clearwater Partners, LLC, disclosed that as
of Dec. 24, 2013, it beneficially owned 1,545,260 shares of common
stock of 22nd Century Group, Inc., representing 2.6 percent of the
shares outstanding. Clearwater sold an aggregate of 97,544 shares
of Common Stock from Nov. 6, 2013, through Dec. 24, 2013. A copy
of the regulatory filing is available for free at
http://is.gd/cn3OzH
About 22nd Century
Clarence, New York-based 22nd Century Group, Inc., through its
wholly-owned subsidiary, 22nd Century Ltd, is a plant
biotechnology company using technology that allows for the level
of nicotine and other nicotinic alkaloids (e.g., nornicotine,
anatabine and anabasine) in tobacco plants to be decreased or
increased through genetic engineering and plant breeding.
22nd Century reported a net loss of $26.15 million on $7.27
million of revenue for the year ended Dec. 31, 2013, as compared
with a net loss of $6.73 million on $18,775 of revenue for the
year ended Dec. 31, 2012. The Company incurred a net loss of
$1.34 million in 2011.
As of Dec. 31, 2013, the Company had $12.28 million in total
assets, $4.76 million in total liabilities and $7.52 million in
total shareholders' equity.
Freed Maxick CPAs, P.C., in Buffalo, New York, did not issue a
"going concern" qualification on the consolidated financial
statements for the year ended Dec. 31, 2013. The accounting firm
previously expressed substantial doubt about the Company's ability
to continue as a going concern in their audit report on the
consolidated financial statements for the year ended Dec. 31,
2012. The independent auditors noted that 22nd Century has
suffered recurring losses from operations and as of Dec. 31, 2012,
has negative working capital of $3.3 million and a shareholders'
deficit of $6.1 million. Additional capital will be required
during 2013 in order to satisfy existing current obligations and
finance working capital needs as well as additional losses from
operations that are expected in 2013, the report added.
22ND CENTURY: Richard Saffire Stake at 6.8% as of Dec. 12
---------------------------------------------------------
In a Schedule 13G filed with the U.S. Securities and Exchange
Commission, Richard G. Saffire disclosed that as of Dec. 12, 2013,
he beneficially owned 4,087,246 shares of common stock of
22nd Century Group, Inc., representing 6.8 percent of the shares
outstanding. A copy of the regulatory filing is available for
free at http://is.gd/9aRj51
About 22nd Century
Clarence, New York-based 22nd Century Group, Inc., through its
wholly-owned subsidiary, 22nd Century Ltd, is a plant
biotechnology company using technology that allows for the level
of nicotine and other nicotinic alkaloids (e.g., nornicotine,
anatabine and anabasine) in tobacco plants to be decreased or
increased through genetic engineering and plant breeding.
22nd Century reported a net loss of $26.15 million in 2013, a net
loss of $6.73 million in 2012 and a net loss of $1.34 million in
2011.
As of Dec. 31, 2013, the Company had $12.28 million in total
assets, $4.76 million in total liabilities and $7.52 million in
total shareholders' equity.
Freed Maxick CPAs, P.C., in Buffalo, New York, did not issue a
"going concern" qualification on the consolidated financial
statements for the year ended Dec. 31, 2013. The accounting firm
previously expressed substantial doubt about the Company's ability
to continue as a going concern in their audit report on the
consolidated financial statements for the year ended Dec. 31,
2012. The independent auditors noted that 22nd Century has
suffered recurring losses from operations and as of Dec. 31, 2012,
has negative working capital of $3.3 million and a shareholders'
deficit of $6.1 million. Additional capital will be required
during 2013 in order to satisfy existing current obligations and
finance working capital needs as well as additional losses from
operations that are expected in 2013, the report added.
ACOSTA INC: Moody's Affirms B2 CFR & B1 Sr. Secured Debt Rating
---------------------------------------------------------------
Moody's Investors Service affirmed Acosta, Inc.'s B2 Corporate
Family Rating ("CFR"); its B2-PD probability of default rating;
and B1 senior secured rating ($1,604 million term loan and $90
million revolver); reflecting the leverage-neutral impact of the
assumption of an incremental $340 million, acquisition-related
secured term loan. Moody's also affirmed the stable outlook.
Ratings Rationale
Using one hundred percent debt financing, Acosta will be acquiring
Anderson Daymon Worldwide ("ADWW") for approximately $340 million,
representing a purchase multiple that will have minimal impact on
Acosta's pro-forma leverage. Moody's views the acquisition as
moderately credit-positive, given its leverage-neutral impact and
given the very strong EBITDA margins of ADWW, a smartly-growing,
sub-$100 million-revenues Sales and Marketing Agency ("SMA") that
calls exclusively on Costco, the country's second-largest
retailer.
In its rating, Moody's factors Acosta's demonstrated capability to
delever, even when integrating numerous, sometimes lower-margin
acquisitions as it has in recent years. Although debt to EBITDA
has moderated a full turn since the end of fiscal 2012, to a bit
higher than 7.0 times, the measure still compares unfavorably to
the other two sizeable SMA competitors and to other companies also
rated at the B2 level. Such high leverage may limit the resources
Acosta is able to devote to integration going forward and to
growing its business prudently. However, Moody's also recognizes
Acosta's good free cash flow generation capability, and its
dominance as the country's largest SMA, a position that reinforces
the inherent customer loyalty that companies in this high-barrier
industry enjoy. The ADWW acquisition, moreover, should moderately
bolster Acosta's pro-forma EBITDA margin, both initially and over
the intermediate term, as ADWW's sales growth, which typically
mimics Costco's, outpaces Acosta's legacy operations' growth.
With the resultant higher revenues and profits (and
profitability), Acosta should see debt-to-EBITDA moderating, to
about 6.5 times by the end of fiscal 2014, as Moody's do not
anticipate Acosta to reduce the absolute amount of debt
meaningfully. After reducing financial leverage and sustaining it
at a lower level, the company would be positioned more solidly in
the B2 rating category.
Moody's could downgrade the ratings if Acosta fails to delever as
anticipated over the coming year, if liquidity deteriorates, or if
the company stumbles in its integration ADWW. Lower-than-
anticipated margin improvements, or revenues failing to grow at
historical averages, could also pressure the rating down.
Alternatively, the ratings could be upgraded if Acosta can boost
its EBITDA margin by about two percentage points on a sustained
basis, and use free cash to prepay debt obligations such that
debt-to-EBITDA can be brought down and be sustained at about 5.0x.
An upgrade would also require a demonstrated commitment to
conservative financial policies with regard to dividends and
acquisitions.
The following ratings were affirmed:
Corporate Family Rating, B2
Probability of Default Rating, B2-PD
Senior Secured, B1 (LGD3, 34% from LGD3, 33%); credit
facilities due 2016 and 2018.
With expected fiscal 2014 revenues of about $1.85 billion, Acosta
Sales and Marketing is the leading sales and marketing agency in
the U.S., providing outsourced marketing and merchandising
services to manufacturers, suppliers, and producers of, primarily,
food-related consumer packaged goods. Florida-headquartered Acosta
is owned approximately 20% by management, with the remainder owned
by a consortium of private equity firms led by affiliates of T.H.
Lee. The company was founded in 1927.
The principal methodology used in this rating was Global Business
& Consumer Service Industry Rating Methodology published in
October 2010. Other methodologies used include Loss Given Default
for Speculative-Grade Non-Financial Companies in the U.S., Canada
and EMEA published in June 2009.
ADEPT TECHNOLOGIES: May Continue Using PNC Bank's Cash Collateral
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Alabama
issued an eighth interim order that authorized Adept Technologies,
LLC's use of cash collateral, subject to a security interest in
favor of PNC Bank, National Association.
PNC asserts that the aggregate amount the Debtor owes the bank is
$6,402,852 as of the Petition Date. In addition to the PNC Debt,
the Debtor is liable for all accrued but unpaid interest and costs
of collection incurred by PNC in connection with the PNC Debt,
including without limitation, reasonable attorneys' fees and
expenses.
The Debtor intends to use cash collateral in the ordinary course
of business for a period of 60 days from the Feb. 7 entry of the
order, unless or until a termination event, or the parties agree
to terminate the usage at an earlier date. As adequate protection
from any diminution in value of the lender's collateral, the
Debtor will grant PNC a first priority replacement lien on and in
all assets of the Debtor that comprise the PNC collateral, and
subordinate only to the carve out on certain expenses. The Debtor
also will deliver to PNC $77,000 monthly adequate protection
payments commencing on Feb. 15, 2014, and continuing on the 15th
of each month through the termination date. PNC will apply the
adequate protection payments to the $1.2 million line of credit in
accordance with the loan documents evidencing the loan.
About ADEPT Technologies
ADEPT Technologies, LLC, filed a Chapter 11 petition (Bankr. N.D.
Ala. Case No. 12-83490) on Oct. 31, 2012, in Decatur, Alabama.
The Debtor, which has principal assets located in Huntsville,
Alabama, estimated assets of $10 million to $50 million and
liabilities of up to $10 million. Judge Jack Caddell presides
over the case. Kevin D. Heard, Esq., at Heard Ary, LLC,
represents the Debtor as counsel. The petition was signed by Brad
Fielder, managing member.
Creditor PNC Bank is represented by Kevin C. Gray, Esq., Matthew
W. Grill, Esq. and Christine K. Borton, Esq. of Maynard, Cooper &
Gale, P.C., in Birmingham, AL 35203-2618.
ADVANCED MICRO: Moody's Affirms B2 CFR & Revises Outlook to Neg.
----------------------------------------------------------------
Moody's Investors Service affirmed the B2 corporate family rating
of Advanced Micro Devices ("AMD") and revised the outlook to
stable from negative. Concurrently, the speculative grade
liquidity rating is raised to SGL-2 from SGL-3.
The outlook revision to stable reflects AMD's prospects for
improving operating performance and a better liquidity profile
over the next year as the company continues to reorient its
business model to address markets beyond its core, legacy personal
computer market (45% of AMD revenue in the most recent quarter)
that include the faster growing, embedded and semi-custom chips,
dense server, professional graphics and ultra low power end
markets.
Ratings Rationale
The B2 corporate family rating reflects AMD's prospects for
improved profitability, free cash flow generation, good liquidity
and lower leverage over the intermediate term. AMD is targeting to
grow the faster growing segments mentioned above from roughly 30%
of revenue in the second half of 2013 (5% in 2012) to 40%-50% of
its revenue over the next two years. Driven by design wins and
strong demand for Microsoft's Xbox and Sony's PS4 gaming consoles
that have multi-year product cycles, Moody's expect revenue growth
in semi-custom chips over the intermediate term. With profit
margins in mid-teens, as compared to a slight loss for its legacy
microprocessor business, Moody's expect continued execution of its
product roadmap will lead to better overall profitability for AMD
over the intermediate term.
Partially offsetting AMD's improving product mix development is
the ongoing weak demand conditions in the personal computer
market, particularly in the lower end segments where tablet
devices continue to take wallet-share. Combined with our
expectations that the market leader, Intel, will remain
aggressive, AMD will be challenged to achieve profitability in
this segment over the next year after losing $22 million in 2013.
Recent design wins for AMD's dense server chips for mega data
center applications (with Verizon) are promising, but Moody's
expect revenue contribution from this part of the server market
will be very modest for AMD over the next 12-18 months as design
cycles and customer validation and acceptance for mission critical
server components are long.
The company achieved its goal of quarterly operating costs in the
third quarter of last year and Moody's expect AMD will sustain
quarterly operating costs between $420 million and $450 million in
2014. With gross margins approximating 35%, the company should
achieve modest profitability, positive free cash flow, and
improving credit metrics, with adjusted debt to EBITDA below 5x
over the next year, as compared to 5.7x at year end 2013.
With nearly $1.2 billion of cash and marketable securities as of
fiscal year end December 2013, and our expectation that the
company will be modestly free cash flow positive over the next
year, AMD has good liquidity. AMD also has access to a $500
million committed, asset-backed, secured revolving credit facility
that matures November 2018. After considering the $200 million
payment AMD made to its foundry partner (GlobalFoundries) in the
first quarter of fiscal 2014, Moody's expect AMD's 2014 year- end
cash balances will approximate $1 billion. Management's minimum
target cash balance is $600 million. Moody's do not anticipate any
other cash payments by AMD to GlobalFoundries outside of normal
course wafer supply purchases over the next year. AMD's next debt
maturity is a $465 million note (unrated) due May 2015.
Considering AMD's improving prospects that lead to the stable
outlook, expectations of minimal usage under the secured revolver
and that all of AMD's obligations are unsecured other than the
revolver, there was an over ride on the Loss Given Default output
resulting in the affirmation of the senior unsecured rating at B2.
Ratings affirmed:
Corporate family rating at B2
Probability of default rating at B2-PD
$500 million senior unsecured notes due 2017 at B2 (LGD4-57%)
from LGD4-54%
$500 million senior unsecured notes due 2020 at B2 (LGD4-57%)
from LGD4-54%
$500 million senior unsecured notes due 2022 at B2 (LGD4-57%)
from LGD4-54%
Rating changed:
Speculative grade liquidity rating to SGL-2 from SGL-3
What Could Change the Rating - DOWN
The rating could be lowered if AMD's cash and liquid investments
are likely to drop below $800 million, if the company is unlikely
to achieve positive free cash flow over the next year, or if total
debt increases other than for temporary working capital needs.
What Could Change the Rating - UP
The rating is not likely to be raised over the near term. Longer
term, the rating could be raised if AMD is able to sustain revenue
growth with Moody's adjusted EBITDA margins above 10%, while
maintaining cash and liquid investments in excess of $1 billion
and achieving adjusted debt to EBITDA below 4 times.
The principal methodology used in this rating was the Global
Semiconductor Industry Methodology published in December 2012.
Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.
ADVANCED MICRO: BlackRock Stake at 5.1% as of Dec. 31
-----------------------------------------------------
In a Schedule 13G filed with the U.S. Securities and Exchange
Commission, BlackRock, Inc., disclosed that as of Dec. 31, 2013,
it beneficially owned 37,084,953 shares of common stock of
Advanced Micro Devices Inc. representing 5.1 percent of the shares
outstanding. A copy of the regulatory filing is available for
free at http://is.gd/ZTlCV1
About Advanced Micro Devices
Sunnyvale, California-based Advanced Micro Devices, Inc., is a
global semiconductor company. The Company's products include x86
microprocessors and graphics.
For the nine months ended Sept. 28, 2013, Advanced Micro incurred
a net loss of $172 million. Advanced Micro reported a net loss of
$1.18 billion for the year ended Dec. 29, 2012, following net
income of $491 million for the year ended Dec. 31, 2011. As of
Sept. 28, 2013, the Company had $4.31 billion in total assets,
$3.88 billion in total liabilities and $434 millioon in total
stockholders' equity.
* * *
In August 2013, Standard & Poor's Ratings Services revised its
outlook on Advanced Micro to negative from stable. At the same
time, S&P affirmed its 'B' corporate credit and senior unsecured
debt ratings on AMD.
As reported by the TCR on Feb. 4, 2014, Fitch Ratings has affirmed
the 'CCC' long-term Issuer Default Rating (IDR) for Advanced Micro
Devices Inc. The rating reflects Fitch's expectations for
negative near-term free cash flow (FCF) and limited top-line
visibility, despite solid product momentum heading into 2014.
In the Feb. 4, 2013, edition of the TCR, Moody's Investors Service
lowered Advanced Micro Devices' corporate family rating to B2 from
B1. The downgrade of the corporate family rating to B2 reflects
AMD's prospects for weaker operating performance and liquidity
profile over the next year as the company commences on a multi-
quarter strategic reorientation of its business in the face of a
challenging macro environment and a weak PC market.
AEROGROW INTERNATIONAL: Posts $302,000 Net Income in Q3 2013
------------------------------------------------------------
Aerogrow International, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing
net income of $302,000 on $4.96 million of net revenue for the
three months ended Dec. 31, 2013, as compared with a net loss of
$297,000 on $2.97 million of net revenue for the same period
duirng the prior year.
For the nine months ended Dec. 31, 2013, the Company incurred a
net loss of $246,000 on $6.76 million of net revenue as compared
with a net loss of $7.86 million on $5.53 million of net revenue
for the same period last year.
As of Dec. 31, 2013, the Company had $5.20 million in total
assets, $2.54 million in total liabilities and $2.65 million in
total stockholders' equity.
"This holiday season marked the first real selling opportunity
since we formed our partnership with The Scotts Miracle-Gro
Company and I'm proud to report strong growth across all key sales
channels. This growth was most evident in our retail channel,
where we saw successful launches at Costco.com and The Home Depot,
and significant growth at Amazon," said Mike Wolfe, AeroGrow's
president and chief executive officer. "We also began to see
growth in our highly profitable Direct-to-Consumer channel after
several years of decline."
On April 23, 2013, the Company announced that Scotts Miracle-Gro
made a $4.5 million equity investment and IP acquisition with the
Company, resulting in a 30 percent beneficial ownership interest
in AeroGrow. In the process, AeroGrow took steps to entirely
eliminate its long term debt, restructured the balance sheet to
facilitate potential future transactions, and gained a valuable
partnership for growth. The agreement affords AeroGrow the use of
the globally recognized and highly trusted Miracle-Gro brand name
while also providing AeroGrow a broad base of support in
marketing, distribution, supply chain logistics, R&D, and
sourcing.
A copy of the Form 10-Q is available for free at:
http://is.gd/obt2J4
About AeroGrow
Boulder, Colo.-based AeroGrow International, Inc., is a developer,
marketer, direct-seller, and wholesaler of advanced indoor garden
systems designed for consumer use and priced to appeal to the
gardening, cooking, and healthy eating, and home and office decor
markets.
Aerogrow incurred a net loss of $8.25 million for the year ended
March 31, 2013, as compared with a net loss of $3.55 million
during the prior year.
ALLIED DEFENSE: AQR Capital No Longer Owns Common Shares
--------------------------------------------------------
In an amended Schedule 13G filed with the U.S. Securities and
Exchange Commission, AQR Capital Management, LLC, disclosed that
as of Dec. 31, 2013, it did not beneficially own shares of common
stock of Allied Defense Group, Inc. AQR Capital previously
reported beneficial ownership of 594,564 common shares as of
Dec. 31, 2012. A copy of the regulatory filing is available for
free at http://is.gd/Moc2Wu
About The Allied Defense Group
The Allied Defense Group, Inc., based in Baltimore, Maryland,
previously conducted a multinational defense business focused on
the manufacture and sale of ammunition and ammunition related
products for use by the U.S. and foreign governments. Allied's
business was conducted by two wholly owned subsidiaries: MECAR
sprl, formerly MECAR S.A., and ADG Sub USA, Inc., formerly MECAR
USA, Inc.
Plan of Dissolution and Liquidation
On June 24, 2010, the Company signed a definitive purchase and
sale agreement with Chemring Group PLC pursuant to which Chemring
agreed to acquire substantially all of the assets of the Company
for $59,560 in cash and the assumption of certain liabilities. On
Sept. 1, 2010, the Company completed the asset sale to Chemring
contemplated by the Agreement. Pursuant to the Agreement,
Chemring acquired all of the capital stock of Mecar for
approximately $45,810 in cash, and separately Chemring acquired
substantially all of the assets of Mecar USA for $13,750 in cash
and the assumption by Chemring of certain specified liabilities of
Mecar USA. A portion of the purchase price was paid through the
repayment of certain intercompany indebtedness owed to the Company
that would otherwise have been cancelled at closing. $15,000 of
the proceeds of the sale was deposited into escrow to secure the
Company's indemnification obligations under the Agreement.
In conjunction with the Agreement, the Board of Directors of the
Company unanimously approved the dissolution of the Company
pursuant to a Plan of Complete Liquidation and Dissolution. The
Company's stockholders approved the Plan of Dissolution on
Sept. 30, 2010. In response to concerns of certain of the
Company's stockholders, the Company agreed to delay the filing of
a certificate of dissolution with the Delaware Secretary of State.
The Company filed a certificate of dissolution with the Delaware
Secretary of State on Aug. 31, 2011. In connection with this
filing, the Company's stock transfer agent has ceased recording
transfers of the Company's stock and the Company's stock is no
longer publicly traded.
AMERICAN POWER: Marc Chalfen No Longer a Shareholder
----------------------------------------------------
In an amended Schedule 13G filed with the U.S. Securities and
Exchange Commission, Allen Kahn MD Revocable Trust, and Marc J.
Chalfen disclosed that as of Dec. 31, 2013, they did not
beneficially own shares of common stock of American Power Group
Corporation. They previously reported beneficial ownership of
5,031,250 common shares as of Nov. 28, 2012. A copy of the
regulatory filing is available for free at http://is.gd/CXRZMR
About American Power Group
American Power Group's alternative energy subsidiary, American
Power Group, Inc., provides a cost-effective patented Turbocharged
Natural GasTM conversion technology for vehicular, stationary and
off-road mobile diesel engines. American Power Group's dual fuel
technology is a unique non-invasive energy enhancement system that
converts existing diesel engines into more efficient and
environmentally friendly engines that have the flexibility to run
on: (1) diesel fuel and liquefied natural gas; (2) diesel fuel and
compressed natural gas; (3) diesel fuel and pipeline or well-head
gas; and (4) diesel fuel and bio-methane, with the flexibility to
return to 100 percent diesel fuel operation at any time. The
proprietary technology seamlessly displaces up to 80% of the
normal diesel fuel consumption with the average displacement
ranging from 40 percent to 65 percent. The energized fuel balance
is maintained with a proprietary read-only electronic controller
system ensuring the engines operate at original equipment
manufacturers' specified temperatures and pressures. Installation
on a wide variety of engine models and end-market applications
require no engine modifications unlike the more expensive invasive
fuel-injected systems in the market. See additional information at
www.americanpowergroupinc.com.
For the nine months ended June 30, 2013, the Company reported a
net loss available to common shareholders of $2.03 million.
American Power incurred a net loss available to common
shareholders of $14.66 million for the year ended Sept. 30, 2012,
compared with a net loss available to common shareholders of $6.81
million for the year ended Sept. 30, 2011. The Company's balance
sheet at June 30, 2013, showed $10.51 million in total assets,
$4.01 million in total liabilities, all current, and $6.49 million
in stockholders' equity.
ARCHDIOCESE OF MILWAUKEE: Plan Pledges $4-Mil. for Abuse Victims
----------------------------------------------------------------
The Archdiocese of Milwaukee filed a plan of reorganization that
would set aside $4 million to pay off the claims of alleged
clergy sex abuse victims.
The plan filed Feb. 12 with the U.S. Bankruptcy Court for the
Eastern District of Wisconsin (Milwaukee) would establish a fund
worth $4 million, which would be made available to sex abuse
victims through a loan. Up to $1 million of that could be used
to sue the archdiocese's insurance companies to increase the
funds available for victims.
The Milwaukee archdiocese would use its property as collateral
for the loan, Archbishop Jerome Listecki said in an earlier
statement.
The restructuring plan also would create a fund worth $500,000
for lifetime therapy for the victims and pay an estimated
$5 million for legal and accounting fees incurred in connection
with the archdiocese's bankruptcy case.
Under the plan, only 128 of the 377 victims who accuse diocesan
priests of abuse would be compensated. All claims not involving
diocesan priests would be eliminated from consideration.
"This is a major step toward ending the bankruptcy and returning
our focus to the primary mission of the Church," Mr. Listecki
said. "This plan makes sure abuse survivors continue receiving
the assistance they need while allowing the archdiocese to return
its focus to its ministry."
The proposed plan outlines an operational structure for the
archdiocese that would allow it to continue its ministry in the
community.
Treatment of Claims
The proposed restructuring plan divides the archdiocese's
creditors into 18 classes and describes how they will be
compensated. The following summarizes the treatment of their
claims against the archdiocese:
Class Type of Claim and Treatment
----- ---------------------------
Administrative Expense Claims
Unimpaired
Estimated: $4.5 million
Treatment: Paid in full in cash on the effective
date or on such other terms to which the parties
agree
Class 1 Park Bank Secured Claim
* Impaired
* Scheduled: $4,389,512
* Claimed (Claim No. 133): $4,649,912
Treatment: Park Bank will retain its lien on the
Park Bank collateral; Park Bank loan documents
will be amended.
Class 2 Priority Claims
* Unimpaired
Treatment: Paid in full in cash on the
effective date.
Class 3 Archdiocese of Milwaukee Priests'
Retiree Medical Plan Claims
* Impaired
* Scheduled: $13,693,375
* Claimed (Claim No. 153): $14,067,936
Treatment: The archdiocese will assume its
participation in the Archdiocese of Milwaukee
Priests' Retiree Medical Plan. The archdiocese
will not make any payment with respect to the filed
claim. Instead, the archdiocese will continue to
meet its obligations under the retiree medical plan
as they become due.
Class 4 Archdiocese of Milwaukee Priests'
Pension Plan Claims
* Impaired
* Scheduled: unknown
* Claimed (Claim Nos. 149 and 150): $3,298,176
Treatment: The Archdiocese will assume its
participation in the Archdiocese of Milwaukee
Priests' Pension Plan pursuant to the multi-
employer agreement among the archdiocese and
all participating employers to pay all benefits due
to the archdiocese's employed priests accrued under
the pension plan. The archdiocese will not make any
payment with respect to the current projected
withdrawal liability. Instead, the archdiocese will
continue to meet its obligations under the pension
plan as they become due.
Class 5 Archdiocesan Cemeteries of Milwaukee Union
Employees' Pension Plan Claims
* Impaired
* Scheduled: $1,169,580
* Claimed (Claim No. 152): $1,056,358
Treatment: The archdiocese will assume its
participation in the Archdiocesan Cemeteries of
Milwaukee Union Employees' Pension Plan. The
archdiocese will not make any payment with respect
to the current projected withdrawal liability.
Instead, it will continue to meet its obligations
under the pension plan as they become due. The
archdiocese will assume the collective bargaining
agreement, as modified on May 11, 2011, with the
Cemetery Employees, Local 113, Laborers
International Union of America, AFL-C10.
Class 6 Archdiocese of Milwaukee Lay Employees'
Pension Plan Claims
* Impaired
* Scheduled: unknown
* Claimed (Claim Nos. 148 and 151): $37,376,072
(Total Withdrawal Liability Without Allocation
to an Individual Employer)
Treatment: The archdiocese will assume its
participation in the Archdiocese of Milwaukee Lay
Employees' Pension Plan pursuant to the multi-
employer agreement among the archdiocese and all
participating employers to pay all benefits
due to the archdiocese's lay employees accrued
under the pension plan through the effective date.
The archdiocese will not make any payment with
respect to current projected withdrawal liability.
Instead, it will continue to meet its obligations
for its own employees under the pension plan as
they become due.
Class 7 Perpetual Care Claims
* Impaired
* Estimated: $246 million
* Claimed (Claim No. 179): TBD
Treatment: The reorganized debtor will have no
legal obligation to provide perpetual care arising
out of the purchase of plots, crypts or mausoleums
prior to the petition date. The reorganized debtor,
at its discretion, may, in keeping with its
canonical obligations, provide care to the
Milwaukee Catholic Cemeteries. The reorganized
debtor will honor its contractual obligations to
future purchasers of cemetery plots, crypts or
mausoleums.
Class 8 Pre-Petition Settlement Claims
* Impaired
* Scheduled: $702,000
* Remaining Settlement Payments (2014-2015):
$107,000
* Approximate No. of Claimants: 84
Treatment: The contractual rights of the holders of
Pre-Petition Settlement Claims will be reinstated
in full on the effective date; any further claims
made by the Class 8 claimants will receive no
payment on account of such additional claims.
Class 9 Archdiocesan Abuse Survivor Claims Subject to
Statute of Limitations Defenses
* Impaired
* Scheduled: unknown
* Claimed: unknown
* Approximate No. of Claimants: 128
Therapy Fund for all eligible Abuse Survivor
Claimants: $500,000 plus the commitment to add
funds in future years if there is a shortfall.
Treatment:
Monetary: Archdiocesan Abuse Survivor Claims
Subject to Statute of Limitations Defenses Abuse
Survivor Fund: $3,715,398 initially plus up to
$284,601 if collection from the Insolvent London
Market Insurers to be deposited in the Insurance
Litigation Trust to be allocated by the Insurance
Litigation Trustee as follows: (i) $250,000 to be
set aside for the Unknown Abuse Survivor Reserve;
and (ii) $3,465,398 plus 50% of the proceeds from
the Insolvent London Market Insurers to be
allocated between (x) per capita distribution among
Archdiocesan Abuse Survivor Claims Subject to
Statute of Limitations Defenses Claimants and (y)
litigation resources to fund the Insurance
Litigation, which amount shall not exceed $1
million. If the Insurance Litigation Trustee
chooses to distribute the entire $3,465,398 to
Class 9 Claimants, each Class 9 Claimant will
receive approximately $27,073.
Insurance Recoveries: 95% of the Insurance
Recoveries shall be set aside for distribution to
holders of Class 9 Claims. Five percent (5%) of the
Insurance Recoveries shall be set aside for the
Unknown Abuse Survivor Reserve. Any funds remaining
in the Unknown Abuse Survivor Reserve, after
payment of all Allowed Unknown Abuse Survivor
Claims, will be distributed to Class 9 Claimants
and Unknown Abuse Survivor Claimants as determined
by the Insurance Litigation Trustee.
Therapy: Each holder of a Class 9 Claim shall also
be entitled to request therapy payment assistance
from the Therapy Fund. Such assistance shall be
requested in accordance with the Therapy Payment
Process.
Class 10 Archdiocesan Abuse Survivor Claims with
No Factual Basis for Fraud
* Impaired
* Scheduled: unknown
* Claimed: unknown
* Approximate No. of Claimants: 165
Therapy Fund for all eligible Abuse
Survivor Claimants: $500,000 plus the
commitment to add funds in future years
if there is a shortfall.
Treatment: Each holder of a Class 10 Claim shall be
entitled to request therapy payment assistance from
the Therapy Fund. Such assistance shall be
requested in accordance with the Therapy Payment
Process.
Class 11 Religious Order Abuse Survivor Claims
* Impaired
* Scheduled: unknown
* Claimed: unknown
* Approximate No. of Claimants: 95
Treatment: The Archdiocese of Milwaukee will assist
holders of Class 11 Claims with obtaining therapy
payment assistance by facilitating communication
and requests for therapy payment assistance between
the holders of Class 11 Claims and the appropriate
Religious Order.
Class 12 Lay Person Abuse Survivor Claims
* Impaired
* Scheduled: unknown
* Claimed: unknown
* Approximate No. of Claimants: 43
Therapy Fund for all eligible Abuse Survivor
Claimants: $500,000 plus the commitment to add
funds in future years if there is a shortfall.
Treatment: Each holder of a Class 12 Claim shall be
entitled to request therapy payment assistance from
the Therapy Fund. Such assistance shall be
requested in accordance with the Therapy Payment
Process.
Class 13 Other Non-Debtor Entity Abuse Survivor Claims
* Impaired
* Scheduled: unknown
* Claimed: unknown
* Approximate No. of Claimants: 10
Treatment: The Archdiocese of Milwaukee will assist
holders of Class 13 Claims with obtaining therapy
payment assistance by facilitating communication
and requests for therapy payment assistance between
the holders of Class 13 Claims with the appropriate
entity.
Class 14 Unknown Abuse Survivor Representative Claim
* Impaired
* Unknown Abuse Survivor Proofs of Claim or
* Complaints must be filed within six (6) years
of the effective date
Therapy Fund for all eligible Abuse
Survivor Claimants: $500,000 plus the commitment to
add funds in future years if there is a shortfall.
Allowance Process:
(1) Holders of Unknown Abuse Survivor Claims may
elect to proceed with allowance under the Unknown
Abuse Survivor Claim Settlement Process by filing
an Unknown Abuse Survivor Proof of Claim with the
Special Arbitrator or through the Unknown Abuse
Survivor Claim Litigation Process by filing a
complaint in the District Court against the
Insurance Litigation Trustee.
(2) If a holder of an Unknown Abuse Survivor Claim
elects the Unknown Abuse Survivor Claim Settlement
Process, the Claim will be Allowed if the Special
Arbitrator finds by a preponderance of the evidence
that: (i) the individual's claim meets the
definition of an Unknown Abuse Survivor Claim; (ii)
the holder was a minor at the time of the abuse;
(iii) the Claim alleges sexual abuse of a minor;
and (iv) the abuse was perpetrated by an
archdiocesan priest.
(3) If a holder of an Unknown Abuse Survivor elects
the Unknown Abuse Survivor Claim Litigation
process, the allowance of the Claim will be
determined by a trial of such Claim conducted by
the District Court or by a settlement between the
holder of the Claim and the Insurance Litigation
Trustee.
Treatment: Allowed Unknown Abuse Survivor Claims
will be paid by the Insurance Litigation Trustee
from the Unknown Abuse Survivor Reserve or from the
Insurance Recoveries.
(1) Monetary:
To the extent that the Insurance Litigation
Trustee prosecutes the Insurance Litigation, and
the Insurance Litigation is unresolved at the
time that the Unknown Abuse Survivor Claim is
Allowed, the holder of an Allowed Unknown Abuse
Survivor Claim shall receive a Pro Rata
distribution on account of such claim from any
Insurance Recoveries when such proceeds are
distributed.
To the extent that the Insurance Litigation
Trustee elects not to proceed with the Insurance
Litigation or the Insurance Litigation is
resolved at the time that the Unknown Abuse
Survivor Claim is Allowed, the holder of an
Allowed Unknown Abuse Survivor Claim shall
receive, on the seventh (7th) anniversary of the
Effective Date, the lesser of: (i) a Pro Rata
distribution of the Unknown Abuse Survivor
Reserve; or (ii) the amount distributed to any
individual holder of a Archdiocesan Abuse Survivor
Claim Subject to Statute of Limitations Defenses
Claim. The Insurance Litigation Trustee may, in his
or her sole discretion, make a distribution to a
holder of an Allowed Unknown Abuse Survivor Claim
at an earlier date.
(2) Insurance Recoveries: 95% of the Insurance
Recoveries shall be set aside for distribution to
holders of Class 9 Claims. Five percent (5%) of the
Insurance Recoveries shall be set aside for the
Unknown Abuse Survivor Reserve. Any funds remaining
in the Unknown Abuse Survivor Reserve, after
payment of all Allowed Unknown Abuse Survivor
Claims, will be distributed as determined by the
Insurance Litigation Trustee.
(3) Therapy: Each holder of an Allowed Unknown
Abuse Survivor Claim shall be entitled to request
therapy payment assistance from the Therapy Fund.
Such assistance shall be requested in accordance
with the Therapy Payment Process.
Class 15 Disallowed or Previously Dismissed
Abuse Survivor Claims
* Impaired
* Claimed: unknown
* Approximate Number of Claimants: 51
Treatment: No Distribution; provided, however, that
the Debtor may, in its sole discretion, provide
therapy to holders of Class 15 Claims.
Class 16 General Unsecured Creditor Claims
* Impaired
* Scheduled: $3,848,585
* Reserve: $250,000
Treatment: If the holders of Class 16 Claims vote
in number and amount sufficient to cause Class 16
to accept the Plan, each holder of a Class 16 Claim
shall receive the lesser of (i) the amount of their
Allowed Claim or (ii) $5,000 on the Claims Payment
Date in full satisfaction, settlement, and release
of the Claim. If the holders of Class 16 Claims do
not vote in number and amount sufficient to cause
Class 16 to accept the Plan, each holder of a Class
16 Claim shall not receive or retain any property
under the plan on account of such Claims.
Class 17 Charitable Gift Annuity Claims
* Unimpaired
Treatment: The Archdiocese will continue to meet
its obligations under the Charitable Gift Annuities
as they become due.
Class 18 Penalty Claims
* Impaired
Treatment: The legal, equitable, and contractual
rights of each holder of a Class 17 Claim will be
reinstated in full on the Effective Date.
A full-text copy of the Chapter 11 reorganization plan and
disclosure statement is available for free at http://is.gd/j3eXBW
Survivors' Concerns
Unless additional funds are secured by suing insurance companies,
each of the 128 sex abuse victims would receive about $27,000.
But even victims of the same priest could be treated differently
under criteria proposed by the archdiocese, according to the
victims and their lawyers.
"The only people this archdiocese and Archbishop Listecki has
chosen to treat horribly in this bankruptcy are abuse survivors,"
Milwaukee Journal Sentinel quoted Michael Finnegan as saying.
"And those are the only people they promised to treat equitably
and fairly," said Mr. Finnegan, who with fellow Minnesota
attorney Jeffrey Anderson represents 350 of the sex abuse
claimants in the bankruptcy.
Jerry Topczewski, chief of staff for Mr. Listecki, said that the
archdiocese already had paid $33 million in settlements to abuse
survivors and cut staff and programming over the years before
entering bankruptcy. He declined to comment on how individual
victims would be treated under the plan, saying their cases were
under seal, the Milwaukee Journal Sentinel reported.
Attorneys for victims and the creditors committee, which
represents all creditors but is made up entirely of survivors,
said that they were still reviewing the plan and that it was too
early to determine how they would respond in court, according to
the report.
The reorganization plan still needs the approval of U.S.
Bankruptcy Judge Susan Kelley.
The Archdiocese of Milwaukee filed for Chapter 11 protection in
January 2011 to address its mounting sexual abuse claims.
Archdiocesan officials have repeatedly noted that the bankruptcy
filing came after 23 survivors rejected a $4.6 million settlement
in a failed mediation.
Lawyers for victims said they didn't reject the financial offer
but refused to consider it unless the archdiocese would commit to
releasing documents detailing the church's handling of the abuse
crisis. Many of those documents have since been released as part
of the bankruptcy.
About Archdiocese of Milwaukee
The Diocese of Milwaukee was established on Nov. 28, 1843, and
was elevated to an Archdiocese on Feb. 12, 1875, by Pope Pius
IX. The region served by the Archdiocese consists of 4,758 square
miles in southeast Wisconsin which includes counties Dodge, Fond
du Lac, Kenosha, Milwaukee, Ozaukee, Racine, Sheboygan, Walworth,
Washington and Waukesha. There are 657,519 registered Catholics
in the Region.
The Catholic Archdiocese of Milwaukee, in Wisconsin, filed for
Chapter 11 bankruptcy protection (Bankr. E.D. Wis. Case No.
11-20059) on Jan. 4, 2011, to address claims over sexual abuse
by priests on minors.
The Archdiocese became at least the eighth Roman Catholic diocese
in the U.S. to file for bankruptcy to settle claims from current
and former parishioners who say they were sexually molested by
priests.
Daryl L. Diesing, Esq., at Whyte Hirschboeck Dudek S.C., in
Milwaukee, Wisconsin, serves as the Archdiocese's counsel. The
Official Committee of Unsecured Creditors in the bankruptcy case
has retained Pachulski Stang Ziehl & Jones LLP as its counsel, and
Howard, Solochek & Weber, S.C., as its local counsel.
The Archdiocese estimated assets and debts of $10 million to
$50 million in its Chapter 11 petition.
(Catholic Church Bankruptcy News; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000)
ARCHDIOCESE OF MILWAUKEE: Wins Approval to Hire Quarles' Fee Cap
----------------------------------------------------------------
The Archdiocese of Milwaukee obtained approval from Judge Susan
Kelley to increase the fee cap for its legal counsel Quarles &
Brady LLP.
The court order issued Feb. 13 authorizes the Milwaukee
archdiocese to increase the fee cap to $500,000 from $300,000 for
additional services the firm will provide in connection with the
lawsuit filed by the archdiocese against insurers.
The archdiocese's official committee of unsecured creditors
supported the fee cap increase, saying the archdiocese's estate
and creditors would benefit if it won the case against insurers
including OneBeacon Insurance Co.
The suit seeks to recover from OneBeacon more than $2.6 million,
which the archdiocese has expended in the litigation of claims
filed by victims of clergy sex abuse.
About Archdiocese of Milwaukee
The Diocese of Milwaukee was established on Nov. 28, 1843, and
was elevated to an Archdiocese on Feb. 12, 1875, by Pope Pius
IX. The region served by the Archdiocese consists of 4,758 square
miles in southeast Wisconsin which includes counties Dodge, Fond
du Lac, Kenosha, Milwaukee, Ozaukee, Racine, Sheboygan, Walworth,
Washington and Waukesha. There are 657,519 registered Catholics
in the Region.
The Catholic Archdiocese of Milwaukee, in Wisconsin, filed for
Chapter 11 bankruptcy protection (Bankr. E.D. Wis. Case No.
11-20059) on Jan. 4, 2011, to address claims over sexual abuse
by priests on minors.
The Archdiocese became at least the eighth Roman Catholic diocese
in the U.S. to file for bankruptcy to settle claims from current
and former parishioners who say they were sexually molested by
priests.
Daryl L. Diesing, Esq., at Whyte Hirschboeck Dudek S.C., in
Milwaukee, Wisconsin, serves as the Archdiocese's counsel. The
Official Committee of Unsecured Creditors in the bankruptcy case
has retained Pachulski Stang Ziehl & Jones LLP as its counsel, and
Howard, Solochek & Weber, S.C., as its local counsel.
The Archdiocese estimated assets and debts of $10 million to
$50 million in its Chapter 11 petition.
(Catholic Church Bankruptcy News; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000)
ARCHDIOCESE OF MILWAUKEE: Seeks to Disallow Knighton Claim
----------------------------------------------------------
The Archdiocese of Milwaukee asked Judge Susan Kelley to disallow
a claim filed by the trustee of Marvin Thomas Knighton's
bankruptcy estate.
Francis LoCoco, Esq., at Whyte Hirschboeck Dudek S.C., in
Milwaukee, Wisconsin, said the claim is "unenforceable" against
the archdiocese because it "is barred by the applicable statute
of limitations."
According to the archdiocese's lawyer, the claim asserted by Mr.
Knighton isn't a clergy sex abuse claim. "The claim appears to
be premised on Knighton's request for wages following the
archdiocese's decision to remove Knighton from ministry," he said
in a court filing.
About Archdiocese of Milwaukee
The Diocese of Milwaukee was established on Nov. 28, 1843, and
was elevated to an Archdiocese on Feb. 12, 1875, by Pope Pius
IX. The region served by the Archdiocese consists of 4,758 square
miles in southeast Wisconsin which includes counties Dodge, Fond
du Lac, Kenosha, Milwaukee, Ozaukee, Racine, Sheboygan, Walworth,
Washington and Waukesha. There are 657,519 registered Catholics
in the Region.
The Catholic Archdiocese of Milwaukee, in Wisconsin, filed for
Chapter 11 bankruptcy protection (Bankr. E.D. Wis. Case No.
11-20059) on Jan. 4, 2011, to address claims over sexual abuse
by priests on minors.
The Archdiocese became at least the eighth Roman Catholic diocese
in the U.S. to file for bankruptcy to settle claims from current
and former parishioners who say they were sexually molested by
priests.
Daryl L. Diesing, Esq., at Whyte Hirschboeck Dudek S.C., in
Milwaukee, Wisconsin, serves as the Archdiocese's counsel. The
Official Committee of Unsecured Creditors in the bankruptcy case
has retained Pachulski Stang Ziehl & Jones LLP as its counsel, and
Howard, Solochek & Weber, S.C., as its local counsel.
The Archdiocese estimated assets and debts of $10 million to
$50 million in its Chapter 11 petition.
(Catholic Church Bankruptcy News; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000)
ARCTIC GLACIER: Loan Re-pricing No Impact on Moody's 'B3' CFR
-------------------------------------------------------------
Arctic Glacier U.S.A., Inc.'s proposed re-pricing of its $280
million first lien term loan is moderately credit positive, but it
does not immediately impact the company's B3 Corporate Family
Rating (CFR) or stable rating outlook.
ARYSTA LIFESCIENCE: Moody's Assigns B2 CFR & Rates $175MM Loan B1
-----------------------------------------------------------------
Moody's Investors Service assigned a B2 Corporate Family Rating
(CFR) and the B2-PD probability of default to Arysta LifeScience
SPC, LLC (Arysta). Moody's also assigned a B1 rating to the
proposed $175 million incremental term loan due 2020, which
increases the total principal size of the first lien term loan to
$1,325 million. Proceeds from the incremental term loan are
expected to be used for general corporate purposes and to support
acquisitions. As a result of the additional debt, instrument
ratings on the $150 million revolving credit facility due 2018 and
first lien term loan due 2020 were downgraded to B1. The rating
Caa1 rating on the $490 million 7.5-year second lien term loan due
2020 was affirmed. Moody's also assigned a Speculative Grade
Liquidity assessment of SGL-2 at Arysta. The outlook is stable.
As a result of a corporate reorganization the CFR, PDR, and SGL at
Arysta LifeScience Corporation have been withdrawn.
The following summarizes the ratings activity:
Ratings Assigned:
Arysta LifeScience SPC, LLC
Corporate Family Rating (CFR) -- B2
Probability of Default Rating -- B2-PD
Speculative Grade Liquidity -- SGL-2
$175 million incremental first lien term loan due 2020-- B1
(LGD3, 32%)
Ratings Downgraded:
Arysta LifeScience SPC, LLC
$150 million revolving credit facility due 2018 -- B1 (LGD3,
32%) from Ba3 (LGD3, 32%)
$1,150 million first lien term loan due 2020-- B1 (LGD3, 32%)
from Ba3 (LGD3, 32%)
Ratings Affirmed:
$490 million second lien term loan due 2020 -- Caa1 (LGD5, 81%)
Outlook - Stable
Ratings Rationale
Arysta's B2 CFR reflects the company's high leverage (pro forma
Debt / EBITDA 6.5x as of September 30, 2013), considerable
seasonality in revenue and working capital, as well as some
exposure to foreign exchange fluctuations. (All ratios include
Moody's standard analytical adjustments.) The rating is supported
by relatively steady earnings and cash flows (on a full year
basis), diverse operations, a large customer base with low
customer concentration, broad geographic exposure, and an asset
light business model. Arysta benefits from strong agricultural
industry fundamentals supportive of long-term demand for
agricultural chemicals. The company's diverse product offerings
(the top 20 products account for less than half of revenues) and
strong, albeit niche, market positions further support the rating.
Arysta's SGL-2 rating reflects good liquidity, supported by cash
balances of $193.7 million as of September 30, 2013, availability
under its $150 million undrawn revolving credit facility, and
expectations for continued positive retained cash flow.
The stable outlook reflects Moody's expectation that Arysta will
be able to steadily grow its business capitalizing on favorable
business fundamentals and will improve margins by focusing efforts
on specialized product development. The outlook anticipates that
Arysta will regularly produce positive free cash flow given the
asset light nature of the business. Further it is expected that
financial and operational transparency will improve as the
company's internal restructuring has been completed. The rating
could be upgraded if Arysta were to sustain Debt / EBITDA less
than 5.0x and generate positive free cash flow. Conversely, if
EBITDA margins were to decline substantially, if Arysta cannot
sustainably generate positive free cash flow, or if pro forma Net
Debt/EBITDA approaches 6.0x. Moody's will likely lower the
company's CFR. Any shareholder friendly actions would also
pressure the rating.
In addition, Moody's corrected its database to reflect that the
borrower for the $150 million revolving credit facility due 2018
and for the $1,150 million first lien term loan due 2020 is Arysta
LifeScience SPC, LLC. The revolving and term facilities were
initially rated under Arysta LifeScience Corporation. The ratings
of these bank credit facilities are not affected by this
correction.
The principal methodology used in this rating was Global Chemical
Industry Methodology published in December 2013. Other
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the U.S., Canada and EMEA
published in June 2009.
Arysta LifeScience Corporation, headquartered in Tokyo, and Arysta
LifeScience SPC, LLC are subsidiaries of Arysta LifeScience
Limited, an Irish company. The Arysta group of companies has a
diverse portfolio of crop protection products (herbicides,
insecticides, fungicides, fumigants, bio-stimulants and
nutrients). Arysta's global operations had revenues of $1.7
billion for the last twelve months ending September 30, 2013.
AS SEEN ON TV: Has $2.26-Mil. Net Income in Dec. 31 Quarter
-----------------------------------------------------------
As Seen On TV, Inc., filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q, disclosing a net
income of $2.26 million on $502,507 of revenue for the three
months ended Dec. 31, 2013, compared with a net loss of
$15.14 million on $5.83 of revenue for the same period in 2012.
The Company's balance sheet at Dec. 31, 2013, showed $6.52 million
in total assets, $4.22 million in total liabilities, and a total
shareholders' deficit of $2.3 million.
The Company reported a net loss of approximately $9.12 million for
the nine month period ended Dec. 31, 2013. At Dec. 31, 2013, the
Company had a working capital deficit of approximately $2.9
million, an accumulated deficit of approximately $22.7 million and
cash used in operations for the nine months ended Dec. 31, 2013 of
approximately $2.59 million. Based on the Company's recurring
losses from operations and negative cash flows from operations,
the report of its independent registered public accounting firm on
the Company's financial statements for the fiscal year ended March
31, 2013, contains an explanatory paragraph regarding its ability
to continue as a going concern. These factors, among others,
raise substantial doubt about the Company's ability to continue as
a going concern, according to the regulatory filing.
A copy of the Form 10-Q is available at:
http://is.gd/hLqrzj
About As Seen on TV
Clearwater, Fla.-based As Seen On TV, Inc., is a direct response
marketing company. It identifies, develops, and markets consumer
products.
As reported by the TCR on Nov. 6, 2012, As Seen On TV entered into
an Agreement and Plan of Merger with eDiets Acquisition Company
("Merger Sub"), eDiets.com, Inc., and certain other individuals.
Pursuant to the Merger Agreement, Merger Sub will merge with and
into eDiets.com, and eDiets.com will continue as the surviving
corporation and a wholly-owned subsidiary of the Company.
As Seen On TV disclosed net income of $3.69 million on $10.10
million of revenues for the year ended March 31, 2013, as compared
with a net loss of $8.07 million on $8.16 million of revenues
during the prior year.
EisnerAmper LLP, in Edison, New Jersey, issued a "going concern"
qualification on the consolidated financial statements for the
year ended March 31, 2013. The independent auditors noted that
the Company's recurring losses from operations and negative cash
flows from operations raise substantial doubt about its ability to
continue as a going concern.
The Company's balance sheet at Sept. 30, 2013, showed $7.78
million in total assets, $7.81 million in total liabilities and a
$31,075 total shareholders' deficit.
Bankruptcy Warning
"At September 30, 2013, we had a cash balance of approximately
$340,000, a working capital deficit of approximately $5.7 million
and an accumulated deficit of approximately $25.0 million. We
have experienced losses from operations since our inception, and
we have relied on a series of private placements and convertible
debentures to fund our operations. The Company cannot predict how
long it will continue to incur losses or whether it will ever
become profitable."
"There can be no assurance that we will be able to secure the
additional funding we need. If our efforts to do so are
unsuccessful, we will be required to further reduce or eliminate
our operations and/or seek relief through a filing under the U.S.
Bankruptcy Code. These factors, among others, raise substantial
doubt about our ability to continue as a going concern," the
Company said in its quarterly report for the period ended
Sept. 30, 2013.
BALL CORPORATION: Fitch Affirms 'BB+' IDR & LT Debt Ratings
-----------------------------------------------------------
Fitch Ratings has affirmed the Issuer Default Rating (IDR) and
long-term debt ratings of Ball Corporation. The Rating Outlook is
Stable.
Key Rating Drivers
The rating affirmation incorporates the company's diversified
sources of cash flow generation, stable credit metrics, leading
market positions in the majority of its product categories/market
segments, and expectations for increased global beverage volume in
the packaging end-markets over the longer-term. Specialty can
growth with its higher margins will continue to be an important
and growing offset to the structural decline experienced with the
12-ounce carbonated soft drink (CSD) can. In North America,
specialty cans now represent more than 20% of Ball's beverage can
mix.
During the past several years, Ball has demonstrated discipline by
taking steps to reduce overcapacity, remove fixed costs, increase
productivity, and rebalance its can mix. Consequently, Ball's on-
going operational focus across its strategic footprint has
resulted in consistent operating performance with growing EBIT
trends absent business restructuring costs.
Ball has very good liquidity resulting from cash generation,
availability under its credit agreement and balance sheet cash.
Free cash flow (FCF) (cash from operations less capital spending
less dividend) for 2013 was approximately $375 million. Ball
expects FCF of approximately $550 million before dividend or about
$475 million after dividend, which Fitch believes is a reasonable
expectation for 2014. Cost restructuring benefits, lower cash
pension contributions, reduced interest costs and improved working
capital are key drivers for increased FCF expectations. At the
end of 2013, Ball had cash of $416 million and $904 million of
availability on its $1 billion multicurrency revolver that matures
in 2018 with significant covenant flexibility and basket capacity.
Ball also has material inter-company loans in Europe and China
that allow for the company to transfer cash efficiently.
Ball has additional liquidity through a U.S. accounts receivable
securitization program that matures in 2014. Ball's
securitization agreement typically can vary between $110 million
and $225 million depending on the seasonality of the company's
business. At the end of 2013, the securitization agreement did
not have any receivables that were sold. Ball also has
uncommitted, unsecured credit facilities, which Fitch views as a
weaker form of liquidity. At the end of the third quarter 2013,
Ball had up to $668 million of uncommitted lines available of
which $58 million was outstanding and due on demand.
Near-term maturities are modest during the next four years with no
more than $150 million in any given year. The term loans which
mature in 2018 currently have $268 million outstanding. The next
maturity with its senior notes is $500 million of 6.75% notes due
in 2020 that are callable in March 2015. Leverage at the end of
2013 was 3.1x. For 2014, Fitch expects leverage will decrease to
the upper 2x range following the January debt repayment absent
considerations for a large unplanned acquisition.
Fitch believes Ball maintains an appropriate balance between
returning capital to shareholders, investing in the strategic
requirements of the business and maintaining a solid financial
profile. Since Ball is within its financial net leverage target
of 2.5x to 3.0x, the company has significant flexibility when
deploying its excess capital. In 2013, Ball spent approximately
$175 million to $200 million on growth-related capital and almost
$400 million on net share repurchases. Fitch expects share
repurchase activity and dividends should approximate FCF
generation.
Risks are reflected in the rating and, in Fitch's opinion, are
quite manageable. These include the acquisitive nature of the
company, the risks inherent within the packaging segment including
structural declines of the 12-ounce can, emerging markets risk,
and revenue/customer concentration.
Ball's largest segment, the U.S. beverage can, along with the
food-can segment represents mature business operations subject to
volume-related pressure. In the U.S., Ball is managing the volume
declines for 12-ounce containers with growing demand for higher-
margin specialty cans. Ball's primary risk, in Fitch's view, is
if 12-ounce CSD declines accelerate and specialty cans only
partially offset the decline, resulting in greater pressure on
operating income.
In China, Ball's leading market share positions the company to
capture its share of market growth driven in part by can
conversions in these less-penetrated markets. However,
profitability will be challenged for at least the next couple of
years due to a highly fragmented can industry with public, private
and governmental ownership. As a result, material overcapacity
has resulted in on-going pricing pressure. Fitch expects this
should resolve over the longer term as can demand continues to
grow and consolidation opportunities rationalize the smaller and
more marginal manufacturers.
Rating Sensitivities
Negative: Future developments that may, individually or
collectively, lead to negative rating include:
-- Significant revenue decline/pressure on EBITDA causing
sustained leverage to increase greater 3.5x;
-- Large debt-financed acquisition that would significantly
increase leverage;
-- Change in financial policy or aggressive share repurchase.
Positive: Future developments that may, individually or
collectively, lead to positive rating include:
-- Commitment to a leverage target less than 2.5x;
-- Margin expansion through improved operating performance;
-- Sustained increase in FCF as a percent of debt greater than
10%.
Fitch has affirmed the following ratings:
-- IDR at 'BB+';
-- Senior Unsecured Debt at 'BB+';
-- Senior Secured Credit Facility at 'BBB-'.
BEAZER HOMES: Vanguard Group Stake at 3.2% as of Dec. 31
--------------------------------------------------------
In an amended Schedule 13G filed with the U.S. Securities and
Exchange Commission, The Vanguard Group disclosed that as of
Dec. 31, 2013, it beneficially owned 812,233 shares of common
stock of Beazer Homes USA Inc. representing 3.20 percent of the
shares outstanding. Vanguard Group previously reported beneficial
ownership of 1,340,891 common shares or 5.43 percent equity stake
as of Dec. 31, 2012. A copy of the regulatory filing is available
for free at http://is.gd/euqslg
About Beazer Homes
Beazer Homes USA, Inc. (NYSE: BZH) -- http://www.beazer.com/--
headquartered in Atlanta, is one of the country's 10 largest
single-family homebuilders with continuing operations in Arizona,
California, Delaware, Florida, Georgia, Indiana, Maryland, Nevada,
New Jersey, New Mexico, North Carolina, Pennsylvania, South
Carolina, Tennessee, Texas, and Virginia. Beazer Homes is listed
on the New York Stock Exchange under the ticker symbol "BZH."
Beazer Homes incurred a net loss of $33.86 million for the year
ended Sept. 30, 2013, a net loss of $145.32 million for the year
ended Sept. 30, 2012, and a net loss of $204.85 million for the
year ended Sept. 30, 2011.
As of Dec. 31, 2013, the Company had $1.93 billion in total
assets, $1.69 billion in total liabilities and $235.60 million in
total stockholders' equity.
* * *
Beazer carries a 'B-' issuer credit rating, with "negative"
outlook, from Standard & Poor's.
In the Jan. 30, 2013, edition of the TCR, Moody's Investors
Service raised Beazer Homes USA, Inc.'s corporate family rating to
'Caa1' from 'Caa2' and probability of default rating to 'Caa1-PD'
from 'Caa2-PD'. The ratings upgrade reflects Moody's increasing
confidence that Beazer's credit metrics, buoyed by a stregthening
housing market, will gradually improve for at least the next two
years and that the company may be able to return to a modestly
profitable position as early as fiscal 2014.
As reported by the TCR on Sept. 10, 2012, Fitch Ratings has
upgraded the Issuer Default Rating (IDR) of Beazer Homes USA, Inc.
(NYSE: BZH) to 'B-' from 'CCC'. The upgrade and the stable
outlook reflect Beazer's operating performance so far this year,
its robust cash position, and moderately better prospects for the
housing sector during the remainder of this year and in 2013. The
rating is also supported by the company's execution of its
business model, land policies, and geographic diversity.
BEAZER HOMES: Kenneth Griffin Stake at 5.3% as of Feb. 7
--------------------------------------------------------
Kenneth Griffin and his affiliates disclosed in a regulatory
filing with the U.S. Securities and Exchange Commission that as of
Feb. 7, 2014, they beneficially owned 1,336,886 shares of common
stock of Beazer Homes USA, Inc., representing 5.3 percent of the
shares outstanding. A copy of the regulatory filing is available
for free at http://is.gd/71cq1x
About Beazer Homes
Beazer Homes USA, Inc. (NYSE: BZH) -- http://www.beazer.com/--
headquartered in Atlanta, is one of the country's 10 largest
single-family homebuilders with continuing operations in Arizona,
California, Delaware, Florida, Georgia, Indiana, Maryland, Nevada,
New Jersey, New Mexico, North Carolina, Pennsylvania, South
Carolina, Tennessee, Texas, and Virginia. Beazer Homes is listed
on the New York Stock Exchange under the ticker symbol "BZH."
Beazer Homes incurred a net loss of $33.86 million for the year
ended Sept. 30, 2013, a net loss of $145.32 million for the year
ended Sept. 30, 2012, and a net loss of $204.85 million for the
year ended Sept. 30, 2011.
As of Dec. 31, 2013, the Company had $1.93 billion in total
assets, $1.69 billion in total liabilities and $235.60 million in
total stockholders' equity.
* * *
Beazer carries a 'B-' issuer credit rating, with "negative"
outlook, from Standard & Poor's.
In the Jan. 30, 2013 edition of the TCR, Moody's Investors Service
raised Beazer Homes USA, Inc.'s corporate family rating to 'Caa1'
from 'Caa2' and probability of default rating to 'Caa1-PD' from
'Caa2-PD'. The ratings upgrade reflects Moody's increasing
confidence that Beazer's credit metrics, buoyed by a stregthening
housing market, will gradually improve for at least the next two
years and that the company may be able to return to a modestly
profitable position as early as fiscal 2014.
As reported by the TCR on Sept. 10, 2012, Fitch Ratings has
upgraded the Issuer Default Rating (IDR) of Beazer Homes USA, Inc.
(NYSE: BZH) to 'B-' from 'CCC'. The upgrade and the stable
outlook reflect Beazer's operating performance so far this year,
its robust cash position, and moderately better prospects for the
housing sector during the remainder of this year and in 2013. The
rating is also supported by the company's execution of its
business model, land policies, and geographic diversity.
BERGENFIELD SENIOR: Hires Bruce Sartori as Accountant
-----------------------------------------------------
Bergenfield Senior Housing LLC on Feb. 18 won Bankruptcy Court
approval to hire Bruce Sartori CPA as accountant.
Mr. Sartori will provide assistance and accounting services to the
Debtor as is necessary in its business operations, including the
preparation and filing of 2013 and 2014 tax returns.
Mr. Sartori will be paid a flat fee of $2,500 per year for
preparation of 2013 and 2014 tax returns, payable upon completion,
and without requirement of filing a separate fee application.
Mr. Sartori 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.
Mr. Sartori can be reached at:
Bruce Sartori, CPA
45 Essex Street Suite 105A
Hackensack, NJ
Tel: (201) 489-7881
E-mail: sartesq@aol.com
In December, the Debtor sought and obtained authorization from the
U.S. Bankruptcy Court for the District of New Jersey to employ
Joseph J. Rotolo, Esq., at Morrissey, Rotolo & DiDonato, as
ordinary course attorney. The Debtor requires Mr. Rotolo to
provide assistance and legal counsel in the ordinary course of
business relating to tenant rental evictions. Mr. Rotolo will be
paid $275 per hour and will also be reimbursed for reasonable out-
of-pocket expenses incurred.
Mr. Rotolo can be reached at:
Joseph J. Rotolo, Esq.
MORRISSEY, ROTOLO & DIDONATO
50 Summit Avenue
Hackensack, NJ 07601
Tel: (201) 343-0088
About Bergenfield Senior Housing
Bergenfield Senior Housing, LLC, filed a Chapter 11 bankruptcy
petition (Bankr. D.N.J. Case No. 13-19703) in Newark, New Jersey,
on May 2, 2013. Nicholas Rotonda signed the petition as
member/manager.
Aaron Solomon Applebaum, Esq., and Barry D. Kleban, Esq., at
McElroy, Deutsch, Mulvaney & Carpenter, LLP, represent the Debtor
as counsel.
In its schedules, the Debtor disclosed $14,061,100 in assets and
$19,957,026 in liabilities as of the Petition Date.
The Bergenfield, New Jersey-based debtor is a single asset real
estate under 11 U.S.C. Sec. 101(51B) and said total assets and
debts exceed $10 million. The Debtor operates and wholly owns a
90-unit residential apartment building located at 47 Legion Drive,
Bergenfield, New Jersey.
The Debtor's primary secured creditor is Boiling Springs Savings
Bank. The Debtor is indebted to Boiling Springs on account of two
promissory notes, both of which are secured by mortgages on the
Property. Boiling Springs' first-position mortgage secures
indebtedness in the total amount of $12.02 million and the second-
position mortgage secures indebtedness of $575,000.
Judge Donald H. Steckroth oversees the case, taking over from
Judge Morris Stern, who passed away in February 2014.
The Bankruptcy Court, according to Bergenfield Senior Housing's
case docket, on Jan. 23, 2014, confirmed the Debtor's Second
Amended Plan of Liquidation dated Dec. 12, 2013. The purpose of
the Plan is to liquidate, collect and maximize the cash value of
the assets of the Debtor and make distributions on account of
allowed claims against the Debtor's estate. The Plan is premised
on the satisfaction of Claims through distribution of the proceeds
raised from the sale and liquidation of the Debtor's assets,
claims and causes of action.
BIG HEART: Moody's Affirms B2 CFR & Alters Outlook to Stable
------------------------------------------------------------
Moody's Investors Service, Inc. affirmed the long term ratings of
Big Heart Pet Brands, Inc. (formerly Del Monte Corporation),
including the company's B2 Corporate Family Rating and B2-PD
Probability of Default Rating, and changed the outlook to stable
from developing. Moody's also affirmed the company's SGL-1
Speculative Grade Liquidity Rating.
Moody's revised the rating outlook to stable from developing after
the company disclosed its post-sale capital structure and planned
use of proceeds from the $1.7 billion sale of its consumer foods
business that closed on February 18, 2014. Based on the post
closing credit profile, Big Heart Pet Brands is comfortably
situated in the B2 rating category.
Overall, the sale of the consumer foods business strengthens Big
Heart Pet Brands' credit profile. "The pet food business has
stronger operating margins and greater overall earnings growth
potential compared to the canned food business that was sold,"
commented Brian Weddington, a Moody's Senior Credit Officer. The
company struggled with deteriorating volumes and margins in the
consumer foods business as shoppers gravitated more to fresh
produce found on the perimeter of the store. "However, the
stronger product category profile is partially offset by reduced
scale, still high leverage and acquisition event risk," added
Weddington.
On February 18, 2014 Del Monte Corporation completed the sale of
its consumer business -- including the Del Monte and College Inn
brands -- to unaffiliated Del Monte Pacific Ltd for $1.7 billion
and changed its name to Big Heart Pet Brands. The consumer
business previously represented about 48% of consolidated sales
and 31% of operating profit. The senior secured term loan lenders
to the company are entitled to receive 100% of sales proceeds in
the form of debt reduction; however the company is in the process
of amending the term loan agreement to allow a portion of the
proceeds to be used to call a portion of its senior unsecured
notes.
Big Heart Pet Brands plans to use $1.3 billion of the cash
proceeds from the sale, net of taxes and fees, to pay down $881
million of senior secured term loan debt and to partially call
$400 million of outstanding 7.625% senior unsecured notes due
February 2019. After giving effect to the debt reductions and sale
of the consumer foods business, Big Heart Pet Brands' debt/EBITDA
will decline slightly to 6.4 from 6.7 times.
As part the term loan amendment, Big Heart Pet Brands intends to
extended the expiration date by two years to 2020 from March 2018
and separately plans to reduce the size of its undrawn $750
million asset based loan facility.
Ratings Rationale
The B2 Corporate Family Rating reflects Big Heart Pet Brands' high
financial leverage, limited product and geographic
diversification, and risk of future leveraged acquisitions. These
risks are balanced against, high profit margins and attractive
sales and earnings growth prospects of the core pet food and
snacks business.
The SGL-1 Speculative Grade Liquidity rating reflects strong
internal cash flow and external liquidity, abundant covenant
cushion under the "covenant-lite" senior secured bank facility,
and the mostly-encumbered asset base.
The following rating actions were taken:
Big Heart Pet Brands (formerly Del Monte Corporation):
Ratings Affirmed (LGD assessments revised):
Corporate Family Rating at B2;
Probability of Default Rating at B2-PD;
$1,726 million senior secured term loan due March 2020 at B1
(LGD3 38% from LGD3, 41%);
$900 million senior unsecured notes due February 2019 at Caa1
(LGD5 87% is unchanged).
Speculative Grade Liquidity Rating at SGL-1.
The rating outlook is stable
The senior secured term loan is secured by a first priority lien
on substantially all the assets of Big Heart Pet Brands (excluding
collateral pledged to an undrawn asset-based facility), and each
guarantor; and a second priority lien on collateral pledged to the
asset-based facility. The senior unsecured debt is guaranteed by
all direct and indirect subsidiaries.
A rating downgrade could occur if Big Heart Pet Brands is not
likely to sustain debt to EBITDA below 7.0 times, or if either
interest coverage or free cash flow deteriorates materially.
Conversely, Big Heart Pet Brands' ratings could be considered for
upgrade if operating performance improves such that debt to EBITDA
is sustained below 5.5 times and retained cash flow to net debt
rises above 10%.
The principal methodology used in this rating was the Global
Packaged Goods Methodology published in June 2013. Other
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the U.S., Canada and EMEA
published in June 2009.
Big Heart Pet Brands, based in San Francisco, California, is a
producer, distributor and marketer of branded pet food and snack
products for the U.S. retail market. Proforma revenues fiscal 2014
will approximate $2.2 billion.
BISHOP OF STOCKTON: Five Members Named to Creditors' Committee
--------------------------------------------------------------
Tracy Hope Davis, U.S. Trustee for Region 17, appointed these
unsecured creditors to be members of the official committee of
unsecured creditors in the Chapter 11 case of the Roman Catholic
Bishop of Stockton:
1. Farmers and Merchants Bank
2. Emilie Cuneo-Travis
3. Tyler McCartney
4. Mark Jyono
5. Christopher Combs
An official creditors committee has the right to employ legal and
accounting professionals and financial advisors, at a debtor's
expense. It may investigate the debtor's business and financial
affairs. Importantly, the committee serves as fiduciary to the
general population of creditors it represents.
The committee will also attempt to negotiate the terms of a
consensual Chapter 11 plan -- almost always subject to the terms
of strict confidentiality agreements with the debtor and other
core parties-in-interest. If negotiations break down, it may ask
a bankruptcy court to replace management with an independent
trustee. If the committee concludes that reorganization of the
debtor is impossible, it will urge the bankruptcy court to convert
the Chapter 11 case to a liquidation proceeding.
About Diocese of Stockton
The Diocese of Stockton, California was established on Feb. 21,
1962, by Pope John XXIII from the 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.
Several Roman Catholic dioceses in the U.S. have filed for
bankruptcy to settle claims from current and former parishioners
who say they were sexually molested by priests.
In Stockton's case, 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.
Stockton scheduled total assets of more than $7.2 million against
debt totaling $11.85 million. The schedules also show that the
diocese has $1.6 million in secured debt. Creditors of the
diocese assert $367,290 in unsecured priority claims and $9.88
million in unsecured non-priority claims.
(Catholic Church Bankruptcy News; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000)
BISHOP OF STOCKTON: Files Preliminary Status Report
---------------------------------------------------
The Roman Catholic Bishop of Stockton intends to negotiate a "pot
plan of reorganization" that will "fairly, justly and equitably
compensate victims of sexual abuse by clergy," according to a
preliminary status report the diocese filed Feb. 12 with the U.S.
Bankruptcy Court for the Eastern District of California.
The diocese also said it anticipates proposing a reorganization
plan after mediation that won't require cramdown of classes of
creditors pursuant to section 1129(b) of the Bankruptcy Code.
Cramdown is a court's imposition of a reorganization plan despite
the objections of classes of creditors.
In its preliminary report, the Stockton diocese said it expects
that the appointment of a judicial mediator will assist in
formulating the plan and control litigation costs that otherwise
would reduce any recovery to creditors.
Gregg Zive, a bankruptcy judge in Nevada, was appointed on Feb. 3
by Judge Christopher Klein as judicial mediator in the diocese's
bankruptcy case as well as in all adversary cases filed by or
against the diocese.
The Stockton diocese also disclosed in the report that it doesn't
anticipate any motions concerning cash collateral or it will file
a lawsuit necessary to confirm or implement a plan. It also
anticipates retaining its primary operating assets and doesn't
expect any major asset sale.
A full-text copy of the diocese's preliminary status report is
available for free at http://is.gd/gS4Ycv
About Diocese of Stockton
The Diocese of Stockton, California was established on Feb. 21,
1962, by Pope John XXIII from the 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.
Several Roman Catholic dioceses in the U.S. have filed for
bankruptcy to settle claims from current and former parishioners
who say they were sexually molested by priests.
In Stockton's case, 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.
Stockton scheduled total assets of more than $7.2 million against
debt totaling $11.85 million. The schedules also show that the
diocese has $1.6 million in secured debt. Creditors of the
diocese assert $367,290 in unsecured priority claims and $9.88
million in unsecured non-priority claims.
(Catholic Church Bankruptcy News; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000)
BISHOP OF STOCKTON: Provides More Info on Greeley Hiring
--------------------------------------------------------
The Roman Catholic Bishop of Stockton filed an amended application
to address the concerns of the U.S. trustee regarding the hiring
of Greeley Asset Services, LLC, as its financial consultant.
The amended application contains additional information about the
funds maintained by the diocese in bank accounts at seven
financial institutions, which contain property of the diocese's
estate as well as property administered under various servicing
agreements or held in trust for others that isn't owned by the
estate.
The filing also contains information about the administrative
services and pooling arrangements provided by the diocese under
its service management agreements with non-debtor entities, and
the fees it receives in exchange for those services.
The diocese also disclosed in the filing that Greeley Asset will
help in the preparation of its monthly operating reports, and
will provide support if needed for discovery.
Meanwhile, Robert Greeley, Esq., a principal of Greeley, said in
a separate filing that his firm will comply with the U.S.
Trustee's guidelines in seeking payment for its fees and
expenses.
Mr. Greeley also said that in case the firm increases the rates
for its services, it will file a supplemental affidavit with the
bankruptcy court describing such increase, and will notify the
U.S. trustee and the unsecured creditors' committee.
About Diocese of Stockton
The Diocese of Stockton, California was established on Feb. 21,
1962, by Pope John XXIII from the 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.
Several Roman Catholic dioceses in the U.S. have filed for
bankruptcy to settle claims from current and former parishioners
who say they were sexually molested by priests.
In Stockton's case, 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.
(Catholic Church Bankruptcy News; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000)
BISHOP OF STOCKTON: Schedules of Assets and Liabilities Filed
-------------------------------------------------------------
The Roman Catholic Bishop of Stockton filed its schedules of
assets and liabilities. The filings show assets with a value of
more than $7.2 million against debt totaling $11.85 million.
The filings also show that the diocese has $1.6 million in
secured debt. Creditors of the diocese assert $367,290 in
unsecured priority claims and $9.88 million in unsecured
non-priority claims.
Meanwhile, liabilities for clergy sex abuse are listed as
"unknown." The diocese's schedules of assets and liabilities can
be accessed for free at http://is.gd/6UfEY0
In a separate filing, Douglas Adel, chief financial officer of
the Stockton diocese, disclosed that the diocese's bankruptcy
case is not a "single asset real estate case."
Mr. Adel pointed that the diocese has five "different distinct"
real property holdings and "substantial business" is conducted by
the diocese on three of those properties other than the business
of operating the real property.
Two of the real properties are the Pastoral/Meeting Center and
the Bishop's Residence, which are located in Stockton,
California. The diocese also disclosed these real property
holdings in its schedules of assets and liabilities.
About Diocese of Stockton
The Diocese of Stockton, California was established on Feb. 21,
1962, by Pope John XXIII from the 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.
Several Roman Catholic dioceses in the U.S. have filed for
bankruptcy to settle claims from current and former parishioners
who say they were sexually molested by priests.
In Stockton's case, 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.
(Catholic Church Bankruptcy News; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000)
BISHOP OF STOCKTON: Files Statement of Financial Affairs
--------------------------------------------------------
The Roman Catholic Bishop of Stockton disclosed that most of its
income during the two years prior to its bankruptcy filing came
from services fees, diocesan appeal, gifts, bequests and
collections.
Period Amount Source
------ ------ -----------
January 15, 2014 $206,585 Diocesan appeal
$1,197,310 Service Fee
$72,185 Fee, Expense Reimbursements
$13,603 Interest, dividend income
$200,080 Diocesan ministries
$638,014 Gifts, bequests, collections
$226,764 Miscellaneous
$144,646 Net realized gains
---------- ------------------
$2,699,187 Total revenues, other
additions
June 30, 2013 $2,141,754 Diocesan appeal
$1,720,982 Service Fee
$254,865 Fee, Expense Reimbursements
$202,743 Interest, dividend income
$368,130 Diocesan ministries
$1,720,590 Gifts, bequests, collections
$250,814 Miscellaneous
$124,207 Net realized gains
---------- ------------------
$6,784,085 Total revenues, other
additions
June 30, 2012 $2,307,232 Diocesan appeal
$1,739,232 Service Fee
$183,463 Fee, Expense Reimbursements
$186,892 Interest, dividend income
$361,028 Diocesan ministries
$1,148,830 Gifts, bequests, collections
$196,858 Miscellaneous
$96,327 Net realized gains
---------- ------------------
$6,219,862 Total revenues, other
additions
Within 90 days immediately preceding the filing of its bankruptcy
case, the Stockton diocese more than $2.2 million to creditors.
A detailed list of the payments made can be accessed for free at
http://is.gd/DmaFcQ
The diocese also paid $215,525 to creditors who are or were
insiders within one year prior to its bankruptcy.
Between January 2013 and January 2014, the diocese paid $293,393
to Felderstein Fitzgerald Willoughby & Pascuzzi LLP for its legal
services. The California-based law firm also received $260,572
held as retainer as of January 15, 2014. The retainer does not
include $1,213 paid for filing fee.
The Stockton diocese disclosed the properties held for another
person. The properties are listed at http://is.gd/LjMNJO
The diocese also disclosed that it is or was a party to five
lawsuits alleging discrimination or misconduct of its priests
within one year prior to its bankruptcy.
Doug Adel and Carmen Espinoza of Stockton, California, kept or
supervised the keeping of books of account and records of
the diocese within the two years before it filed for bankruptcy
protection.
Bookkeepers/Accountants Dates Services Rendered
----------------------- -----------------------
Doug Adel Feb. 25, 2002 to present
212 N San Joaquin Street
Stockton CA 95202
Carmen Espinoza June 1, 2000 to present
212 N San Joaquin Street
Stockton CA 95202
Meanwhile, San Francisco-based Moss Adams LLP audited the books
of account and records of the diocese within two years
immediately preceding the filing of its bankruptcy case.
The diocese also disclosed all withdrawals or distributions
credited or given to an insider within one year before its
bankruptcy filing. They are listed at http://is.gd/cMit8H
The Diocese of Stockton Priest Pension Plan, Diocese of Stockton
Priests Qualified Pension Plan, Diocese of Stockton Retirement
Plan and Diocese of Stockton 403(b) Plan are the four pension
funds maintained by the diocese within the six-year period
immediately preceding the filing of its bankruptcy case.
The diocese does not contribute to the 403(b) plan directly but
rather withholds funds from its employees' paychecks and forwards
the withheld funds to the plan.
A copy of the Stockton diocese's statement of financial affairs
is available for free at http://is.gd/jcHqeY
About Diocese of Stockton
The Diocese of Stockton, California was established on Feb. 21,
1962, by Pope John XXIII from the 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.
Several Roman Catholic dioceses in the U.S. have filed for
bankruptcy to settle claims from current and former parishioners
who say they were sexually molested by priests.
In Stockton's case, 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.
Stockton scheduled total assets of more than $7.2 million against
debt totaling $11.85 million. The schedules also show that the
diocese has $1.6 million in secured debt. Creditors of the
diocese assert $367,290 in unsecured priority claims and $9.88
million in unsecured non-priority claims.
(Catholic Church Bankruptcy News; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000)
BROOKLYN NAVY: Moody's Lowers Senior Secured Debt Rating to Caa1
----------------------------------------------------------------
Moody's Investors Service has downgraded the senior secured debt
rating of Brooklyn Navy Yard Cogeneration Partners L.P. (BNY Cogen
or Project) to Caa1 from B3. The rating outlook continues to be
negative.
Ratings Rationale
The downgrade considers Moody's concerns about the current level
of liquidity and the ability of BNY Cogen to continue to service
its debt obligations over the next year or so. The debt service
coverage ratio has been below 1.0 times for the last few years
now, and it is expected to remain below 1.0x for the next several
years, barring a refinancing or recapitalization by the Project's
new owners, EIF United States Power Fund IV L.P. (EIF). BNY
Cogen's historical operating performance has been weak and
volatile owing most recently to the lingering effects of the
Hurricane Sandy 2012-2013 outage, along with lower electricity
sales, higher fuel costs and higher fuel transportation expenses.
The rating action recognizes BNY Cogen full draw on its $29.6
million debt service reserve letter of credit facility prior to
its expiration and non-renewal in November 2012. Also in November
2012, an $18 million working capital facility expired and was not
renewed. Since then, BNY Cogen has used its remaining cash
balances together with insurance proceeds from the Hurricane Sandy
outage to meet its debt obligations in 2013, but Moody's believe
that these internal cash resources, assuming normal operating
performance, could be utilized over the remainder of 2014. If
there is an unplanned outage at BNY Cogen, the dire liquidity
situation would worsen increasing the default probability for the
project.
Importantly, Moody's understand that EIF, the new owner, made a
modest additional equity investment in January 2014 to cover the
Project's intra-month working capital shortfalls. Moody's believes
that EIF continues to have a long-term economic interest in
maintaining the solvency of this project, particularly given its
recent purchase date of early 2013. Moody's also expect EIF to
eventually execute a refinancing and/or recapitalization during
2014, but the timing of such a transaction remains uncertain at
this stage.
However, in the meantime and in the absence of a refinancing or if
interim sponsor support for the Project wanes, Moody's expect the
liquidity profile to continue to deteriorate as Moody's believe
that BNY Cogen does not have sufficient cash flow to meet debt
service obligations and will utilize the remaining cash balances
over the next twelve months.
The downgrade to Caa1 recognizes the benefit of ownership by EIF,
including actions taken to date to strengthen operating
performance and to bolster liquidity. In that event, the rating
action could have more severe it not for our expectation of an
eventual recap/refinancing at BNY Cogen. In addition, BNY Cogen
has several key strengths of this project that limit for the
moment a more severe rating action, including the long-term energy
sales agreement with Consolidated Edison; the facility's location
in metropolitan New York; the importance of the project's steam to
New York; and its valuable "in-city generation" location.
Outlook
The negative rating outlook reflects uncertainty related to the
timetable for the refinancing/recapitalization, the project's
challenged historical operating performance and our expectation
that the project will continue to produce standalone coverage
metrics below 1.0 times over the next several years.
What Could Move The Rating UP
In light of the downgrade and continuing negative outlook, the
rating is not expected to be upgraded in the near term. However,
the outlook could stabilize and/or there could be upward pressure
on the rating if there were to be a recapitalization such that BNY
Cogen was able to produce coverage metrics above 1.0x and was able
to comfortably service its debt from project level operating cash
flow.
What Could Move The Rating DOWN
The rating could be further downgraded if the
refinancing/recapitalization fails to materialize, if there were
to be an unforeseen sustained forced outage, which would further
hamper liquidity prospects and if BNY Cogen is not able to meet
its debt service obligations at some point in the future.
The principal methodology used in this rating was Power Generation
Projects published in December 2012.
Downgrades:
Issuer: Brooklyn Navy Yard Cogeneration Partners L.P.
$100M 7.42% Senior Secured Regular Bond/Debenture Oct 1, 2020,
Downgraded to Caa1 from B3
Issuer: New York City Industrial Development Agcy, NY
$31.96M 6.2% Senior Unsecured Revenue Bonds Oct 1, 2022,
Downgraded to Caa1 from B3
$110.28M 5.65% Senior Unsecured Revenue Bonds Oct 1, 2028,
Downgraded to Caa1 from B3
$164.76M 5.75% Senior Unsecured Revenue Bonds Oct 1, 2036,
Downgraded to Caa1 from B3
Outlook Actions:
Issuer: Brooklyn Navy Yard Cogeneration Partners L.P.
Outlook, Remains Negative
BURCON NUTRASCIENCE: Posts C$1.54-Mil. Loss in Qtr. Ended Dec. 31
-----------------------------------------------------------------
Burcon NutraScience Corporation filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 6-K, reporting a
loss and comprehensive loss of C$1.54 million on C$23,750 of
royalty income for the three months ended Dec. 31, 2013, compared
to a loss and comprehensive loss of C$1.75 million on C$6,831 of
royalty income for the same period in 2012.
The Company's balance sheet at Dec. 31, 2013, showed C$6.18
million in total assets, C$715,981 in total liabilities, and
stockholders' equity of C$5.47 million.
As at Dec. 31, 2013, the Company had minimal revenues from its
technology, had an accumulated deficit of C$63.16 million, and had
relied on equity financings, private placements, rights offerings
and other equity transactions to provide the financing necessary
to undertake its research and development activities. At Dec. 31,
2013, the Company had cash and cash equivalents of C$2.55 million.
These conditions indicate existence of a material uncertainty that
casts substantial doubt about the ability of the Company to meet
its obligations as they become due and, accordingly, its ability
to continue as a going concern, according to the regulatory
filing.
A copy of the Form 6-K is available at:
http://is.gd/FNdfBd
Headquartered in Vancouver, Canada, Burcon NutraScience
Corporation has developed a portfolio of composition, application,
and process patents originating from its core protein extraction
and purification technology. The Company's patented processes
utilize inexpensive oilseed meals and other plant-based sources
for the production of purified plant proteins that exhibit certain
nutritional, functional and nutraceutical profiles.
BURGER KING: Fitch Affirms 'B+' Long-Term Issuer Default Rating
---------------------------------------------------------------
Fitch Ratings has taken several rating actions on Burger King
Worldwide, Inc. (Burger King; NYSE: BKW) and related entities.
Fitch has affirmed the following ratings:
Burger King Worldwide, Inc. (Parent Holding Co.)
-- Long-term Issuer Default Rating (IDR) at 'B+'.
Burger King Capital Holdings, LLC (BKCH/Parent of Burger King
Holdings, Inc.) and Burger King Capital Finance, Inc.
(BKCF/Financing Subsidiary) as Co-Issuers
-- Long-term IDR at 'B+';
-- 11% sr. discount notes due 2019 at 'B-/RR6'.
Burger King Holdings, Inc. (Direct Parent of Burger King
Corporation)
-- Long-term IDR at 'B+'.
Burger King Corporation (Operating Company)
-- Long-term IDR at 'B+';
-- Secured revolver due 2015 at 'BB+/RR1';
-- Secured term loan A due 2017 at 'BB+/RR1';
-- Secured term loan B due 2019 at 'BB+/RR1'.
Fitch has simultaneously upgraded the following rating:
Burger King Corporation (Operating Company)
-- 9.875% senior unsecured notes due 2018 to 'BB-/RR3' from
'B+/RR4'.
The Rating Outlook is revised to Stable from Positive due to
Fitch's belief that there could be potential changes in Burger
King's capital structure, which results in higher leverage, within
the next 12-18 months.
At Dec. 31, 2013, Burger King had approximately $3 billion of
total debt.
Key Rating Drivers
Upgrade and Recovery Analysis
The upgrade of Burger King Corp.'s 9.875% sr. unsecured notes due
Oct. 15, 2018 to 'BB-/RR3' from 'B+/RR4' reflects the firm's 'B+'
IDR and Fitch's view that recovery for senior unsecured note
holders has improved and would be good at between 51% - 70% in a
distressed situation. The 9.875% notes are guaranteed by Burger
King Holdings and material domestic wholly-owned subsidiaries of
Burger King Corp.
Fitch's recovery analysis is based on assumptions related to
Burger King's enterprise value as a going concern and potential
outstanding claims. The analysis considers Burger King's
essentially 100% franchised business model and the stability of
its cash flows while factoring in historical information regarding
distressed restaurant companies.
Fitch continues to view recovery on Burger King's secured debt as
outstanding and rates these obligations 'BB+/RR1'. The secured
debt is collateralized by a perfected first-priority interest in
substantially all of Burger King's and each guarantor's assets.
Conversely, the 'B-/RR6' rating on Burger King's 11% discount
notes reflects Fitch's belief that recovery for these bondholders
would be poor at 0% - 10% in a distressed situation. The discount
notes were issued at the intermediate holding company level and
are not guaranteed.
Strong Cash Flow Generation
Burger King's cash flow is supported by the high-margin royalty,
property, and fee income associated with its fully franchised
business model and the firm's significantly reduced general and
administrative (G&A) cost structure. Furthermore, the company's
FCF is enhanced by lower capital expenditures given that
franchisees fund remodeling and new unit development.
Burger King is gradually returning more cash to shareholders but
the firm's dividend remains manageable at $0.07 per share
quarterly and 35% of 2013 net income on an annualized basis.
Fitch projects that Burger King will generate approximately $1
billion of revenue, $700 million of EBITDA, $350 million of cash
flow from operations, and $200 million of FCF in fiscal 2014.
Growth is expected to be driven by low single-digit same-store
sales (SSS) growth, 4% - 5% net restaurant growth (NRG), and
controlled general and administrative expenses. More than 90% of
Burger King's annual corporate revenue is projected to be from its
franchise and property operations post the completion of the
firm's global refranchising initiative in October 2013.
Leverage and Capital Structure
Fitch projects that total adjusted debt-to-operating EBITDAR will
approximate 4.9x in 2014, reflecting approximately $3 billion of
total debt and mid-single digit revenue and EBITDA growth. Burger
King's lease-adjusted leverage (based on 8x gross rent) has
declined from nearly 7.0x since the firm was acquired by 3G
Capital Partners, Ltd. in October 2010 due to reduced G&A,
improvement in SSS and NRG.
Burger King has expressed a level of comfort with its leverage,
which was 3.4x on a net debt-to-EBITDA basis at Dec. 31, 2013.
The firm plans to evaluate its capital structure as it approaches
the first call date on its 9.875% notes in October 2014 and its
11% discount notes in April 2015. Fitch would re-evaluate Burger
King's ratings if there are changes in the firm's capital
structure.
Same-Store Sales Trends
During 2013, Burger King's global system-wide SSS increased 0.5%.
SSS declined 0.9% in North America, increased 2.4% in Europe, the
Middle East, and Africa (EMEA), was relatively flat in Latin
America and the Caribbean (LAC) at 0.1%, and rose 4.1% in the Asia
Pacific (APAC) region. SSS in North America was affected by soft
consumer spending, heightened competition, and difficult
comparisons following the one-year anniversary of the largest menu
launch in the firm's history. In April of 2012, Burger King
rolled out a new salad, wrap, smoothie, and dessert platform.
Fitch expects SSS growth in 2014 to be supported by successful
implementation of Burger King's Four Pillar strategy in North
America, which focuses on menu, marketing, image, and operations,
and effective promotions systemwide. For example, Burger King is
planning fewer more impactful promotions like its new lower
calorie and fat French fries referred to as Satisfries in 2014.
At Dec. 31, 2013, 55% of Burger King's 13,667 restaurants were in
North America, 25% were in EMEA, 11% were in LAC, and 9% were in
the APAC region.
North America Remodeling and International Expansion
Burger King's business strategy includes remodeling units in North
America and international expansion, in addition to the global
refranchising initiative and the Four Pillar Plan discussed above.
Burger King is on track to meet its target of having 40% of its
restaurants in North America, which totaled 7,436 at Dec. 31,
2013, remodeled by 2015 and has stated that reimaged units
experience an average sales lift of about 10% -15%.
Franchisees opened 670 new international restaurants, representing
NRG of 5.2%, during 2013. Continued NRG growth will be enabled by
foreign development and joint venture agreements entered into over
the 2011 - 2013 period. Focus areas of expansion include high-
growth emerging markets; such as Brazil, China, and Russia.
Liquidity and Maturities
Burger King has consistently maintained good liquidity. At Dec.
31, 2013, the firm had $787 million of cash and an undrawn $130
million revolving credit facility expiring Oct. 19, 2015.
Liquidity is supported by the firm's FCF, which Fitch projects can
average $200 million annually.
Maturities are manageable in the intermediate term and consist
mainly of term loan amortization payments through 2018. Burger
King's term loan A amortizes at a rate of $12.9 million per
quarter beginning Dec. 31, 2013, stepping up to $19.3 million on
Dec. 31, 2014, $25.8 million on Dec. 31, 2015, and $32.2 million
on Dec. 31, 2016 with the balance payable at maturity. The term
loan B amortizes in quarterly installments equal to 0.25% of
original principal with the balance due at maturity.
Financial Covenants
Burger King's credit agreement subjects the firm to maximum total
leverage, not adjusted for leases, and minimum interest coverage
financial maintenance covenants. Maximum leverage, excluding the
firm's 11% discount notes and up to $450 million of cash, is 5.75x
Sept. 30, 2013 through March 31, 2014, 5.25x June 30, 2014 to June
30, 2015, and 5.0x thereafter. Minimum interest coverage is 1.8x
until June 30, 2014, 1.9x Sept. 30, 2014 to June 30, 2015, and
2.0x thereafter. Fitch believes that Burger King can maintain
roughly 40% EBITDA cushion under its maximum leverage coverage
over the near-to-intermediate term.
Rating Sensitivities
-- Changes to Burger King's capital structure or sustained
increases or decreases in EBITDA could result in upgrades or
downgrades to the firm's issue-level ratings due to Fitch's
recovery analysis.
Future developments that may, individually or collectively, lead
to an upgrade of Burger King's IDR include:
-- Material additional deleveraging such that total adjusted debt-
to-operating EBITDAR is maintained below the 4.5x range, along
with continued strong FCF could result in an upgrade in Burger
King's IDR;
-- Good SSS performance, particularly in North America, would be
required for additional upgrades.
Future developments that may, individually or collectively, lead
to a downgrade of Burger King's IDR include:
-- Total adjusted debt-to-operating EBITDAR sustained above 6.0x,
due to increased debt and/or a prolonged period of SSS declines
and a significant decline in EBITDA, and considerably lower FCF
could result in a downgrade of Burger King's IDR.
C&K MARKET: April 10 Hearing on Adequacy of Plan Outline
--------------------------------------------------------
The U.S. Bankruptcy Court for the District Oregon will convene a
hearing on April 10, 2014, at 1:30 p.m., to consider the adequacy
of the Disclosure Statement explaining C&K Market, Inc.'s
Chapter 11 Plan.
As reported in the Troubled Company Reporter on Feb. 11, 2014, the
Plan provides that each holder of an allowed general unsecured
claim will receive one share of common stock of the reorganized
debtor in exchange for each $10 of the holder's allowed general
unsecured claim and a subscription right in the event the Debtor
elects to consummate a rights offering.
The Plan, dated Jan. 31, 2014, also provides for the payment in
full on the Effective Date of all Allowed Administrative Expense
Claims, Priority Tax Claims, Other Priority Claims and the Allowed
Secured Claim of U.S. Bank. The Plan provides for the payment in
full over time, with interest, of all other Secured Claims. In
general, Secured Creditors with personal property collateral will
be paid in 60 equal amortizing payments, with interest at 5%, and
Secured Creditors with real property collateral will be paid in 84
equal amortizing payments with interest at 5% based on a 25-year
amortization with a balloon payment in seven years.
The Plan provides that each holder of a Small Unsecured Claim
($10,000 or less) will receive, within 90 days after the Effective
Date, a cash payment in an amount equal to 80% of its Allowed
Small Unsecured Claim. The Plan provides that all existing Equity
Securities and Employee Equity Security Plans will be cancelled as
of the Effective Date.
The Plan and Disclosure Statement were filed by Albert N. Kennedy,
Esq., Timothy J. Conway, Esq., Michael W. Fletcher, Esq., and Ava
L. Schoen, Esq., at Tonkon Torp LLP, in Portland, Oregon, on
behalf of the Debtor.
A full-text copy of the Disclosure Statement is available at no
extra charge at http://bankrupt.com/misc/C&KMARKETds0131.pdf
About C&K Market
C&K Market Inc., a 57 year-old grocery store chain, sought
bankruptcy protection from creditors with a plan to sell or close
some of its stores, on Nov. 19, 2013 (Bankr. D. Ore. Case No.
13-64561). The case is assigned to Judge Frank R. Alley, III.
C&K Market, in its amended schedules, disclosed $157,696,920 in
assets and $101,626,481 in liabilities as of the Chapter 11
filing.
The Debtor is represented by Albert N. Kennedy, Esq., Timothy J.
Conway, Esq., Michael W. Fletcher, Esq., and Ava L. Schoen, Esq.,
at Tonkon Torp LLP, in Portland, Oregon. Edward Hostmann has been
tapped as chief restructuring officer, and The Food Partners, LLC,
serves as the Debtor's financial advisor. Kieckhafer Schiffer &
Company LLP serves as advisors and consultants to communicate with
lenders, brokers, attorneys and other professionals. Henderson
Bennington Moshofsky, P.C., serves as accountants. Watkinson
Laird Rubenstein Baldwin & Burgess PC serves as labor counsel.
The Debtor hired Great American Group, LLC, to conduct store
closing sales.
An Official Committee of Unsecured Creditors appointed in the
Debtor's case has retained Scott L. Hazan, Esq., David M. Posner,
Esq., and Jenette A. Barrow-Bosshart, Esq., at Otterbourg P.C. as
lead co-counsel. Peter C. McKittrick, Esq., and Justin D.
Leonard, Esq., at McKittrick Leonard LLP are substituted as local
co-counsel of record for the Committee in place of Tara J.
Schleicher of Farleigh Wada Witt. Protiviti, Inc. serves as its
financial consultant.
CASH STORE: Board Establishes Special Committee of Directors
------------------------------------------------------------
On February 12, 2014, the Ontario Superior Court of Justice
ordered that The Cash Store Financial Services Inc.'s
subsidiaries, The Cash Store Inc. and Instaloans Inc., are
prohibited from acting as a loan broker in respect of its basic
line of credit product without a broker's license under the Payday
Loans Act, 2008. As part of its overall business strategy, and as
a result of the current regulatory environment and the court
decision, the Company has taken all steps necessary to immediately
cease offering all line of credit products offered to its
customers in the Ontario branches.
On February 13, 2014, the Ontario Registrar of Payday Loans issued
a proposal to refuse to issue a lender's license to the Company's
subsidiaries, The Cash Store Inc. and Instaloans Inc., under the
Payday Loans Act, 2008. Therefore, the Company is not currently
permitted to sell any payday loan products in Ontario.
The Board of Directors believes that in light of these recent
developments, it is prudent to mandate a special committee to
carefully evaluate the strategic alternatives available to the
Company with a view to maximizing value for all of its
stakeholders. The special committee has engaged Osler, Hoskin &
Harcourt LLP as its independent legal advisor to assist it in its
strategic alternative review process.
The Board has not established a definitive timeline for the
special committee of independent directors to complete its review
and there can be no assurance that this process will result in any
specific strategic or financial or other value-creating
transaction. The Company does not currently intend to disclose
further developments with respect to this process, unless and
until the Board of Directors approves a specific transaction,
concludes its review of the strategic alternatives or otherwise
determines there is material information to communicate.
About Cash Store Financial
Headquartered in Edmonton, Alberta, The Cash Store Financial is
the only lender and broker of short-term advances and provider of
other financial services in Canada that is listed on the Toronto
Stock Exchange (TSX: CSF). Cash Store Financial also trades on
the New York Stock Exchange (NYSE: CSFS). Cash Store Financial
operates 512 branches across Canada under the banners "Cash Store
Financial" and "Instaloans". Cash Store Financial also operates
25 branches in the United Kingdom.
Cash Store Financial is a Canadian corporation that is not
affiliated with Cottonwood Financial Ltd. or the outlets
Cottonwood Financial Ltd. operates in the United States under the
name "Cash Store". Cash Store Financial does not do business
under the name "Cash Store" in the United States and does not own
or provide any consumer lending services in the United States.
Cash Store Financial employs approximately 1,900 associates.
Cash Store reported a net loss and comprehensive loss of C$35.53
million for the year ended Sept. 30, 2013, as compared with a net
loss and comprehensive loss of C$43.52 million for the year ended
Sept. 30, 2012. As of Sept. 30, 2013, the Company had C$164.58
million in total assets, C$165.90 million in total liabilities and
a C$1.32 million shareholders' deficit.
* * *
As reported in the Feb. 8, 2013 edition of the TCR, Standard &
Poor's Ratings Services lowered its issuer credit rating on Cash
Store Financial (CSF) to 'CCC+' from 'B-'. The outlook is
negative.
"The downgrades follow a proposal by the payday loan registrar in
Ontario to revoke CSF's payday lending licenses and CSF's
announcement that it has discontinued its payday loan product in
the region," said Standard & Poor's credit analyst Igor Koyfman.
The company's businesses in Ontario, which account for
approximately one-third of its store count, will begin offering a
new line of credit product to its customers. S&P believes this is
to offset the loss of its payday lending product; however, this is
a relatively new product, and S&P believes that it will be
challenging for the company to replace its lost earnings from the
payday loan product. S&P also believes that the registrar's
proposal could lead to similar actions in other territories.
As reported by the TCR on Jan. 2, 2014, Moody's Investors Service
downgraded the Corporate Family and Senior Secured debt ratings of
The Cash Store Financial Services Inc. to Caa2 from Caa1 and
placed the ratings under review for further possible downgrade.
The downgrade reflects regulatory challenges in the company's
major operating market of Ontario, Canada that could significantly
adversely affect the firm's financial performance as well as Cash
Store's weak financial results.
CASH STORE: Moody's Lowers CFR & Senior Secured Debt Rating to Ca
-----------------------------------------------------------------
Moody's Investors Service downgraded the Corporate Family and
Senior Secured debt ratings of Cash Store Financial Services Inc
to Ca from Caa2 and assigned a negative outlook to the ratings.
Ratings Rationale
The downgrade reflects the increased pressure on Cash Store's
near-term liquidity position after the company was forced to cease
offering its Line of Credit product in Ontario by its regulator,
the Ministry of Consumer Services. On 13 February 2014, the
Registrar of the Ministry of Consumer Services in Ontario refused
to issue a broker's license, required to continue offering the
Line of Credit product, to the company and in response Cash Store
immediately ceased origination of this product in the province.
Over 30% of Cash Store's retail outlets are located in Ontario and
Moody's believes that their revenue, and to an even greater extent
their cash flows, are concentrated in the Line of Credit product.
While the company's Credit Facility and rated Senior Secured Debt
do not mature until 2016 and 2017 respectively, Cash Store's must
service a $7.6 million semiannual interest payment on its Senior
Secured Debt. A material reduction of a highly profitable product
without commensurate reductions in the company's expense structure
will negatively impact Cash Store's liquidity position and
profitability.
The negative outlook reflects the uncertainty and high execution
risk regarding Cash Store's ability to generate alternative
liquidity while it develops new products in Ontario that are fully
compliant with all regulatory requirements.
The ratings could be downgraded if the company fails to generate a
sufficient liquidity plan in the near term.
The rating are unlikely to be upgraded until Cash Store
successfully executes an operating plan aimed at generating enough
liquidity to fulfill debt service obligations and resolves its
regulatory issues.
The principal methodology used in this rating was Finance Company
Global Rating Methodology published in March 2012.
CEDAR CREST: S&P Lowers Rating on 2006 Revenue Bonds to 'BB+'
-------------------------------------------------------------
Standard & Poor's Ratings Services lowered the rating on Lehigh
County General Purpose Authority, Pa.'s series 2006 college
revenue bonds, issued for Cedar Crest College, one notch to 'BB+'
from 'BBB-'. The outlook is stable.
The downgrade reflects Standard & Poor's assessment of three years
of the college's operating deficits that management attributes to
headcount enrollment decreases and its reliance on student-
generated tuition and fees. Smaller graduating classes should
continue over the next few years. In Standard & Poor's view,
however, enrollment pressure will likely remain. The rating
service believes management's measures, some of which it is still
implementing, to reverse current enrollment trends currently
preclude a lower rating.
"It is our view that while Cedar Crest will likely continue to
face a challenging enrollment environment, there will be no
further balance sheet erosion. While the success of Cedar Crest's
plan to increase headcount and recruit more online students is
largely unproven, management has taken steps to avoid further
financial deterioration," said Standard & Poor's credit analyst
Jennifer Neel. "Although unlikely over the outlook's one-year
period, we could raise the rating if the college were to
experience material and sustained demand improvement and balance
sheet metric improvement. We, however, could lower the rating if
Cedar Crest were to experience further student enrollment
decreases and worsening liquidity."
At fiscal year-end June 30, 2013, the college had approximately
$19.3 million of debt outstanding. All of Cedar Crest's debt is
fixed-rate debt. The college's general obligation pledge secures
the debt. Standard & Poor's understands college officials do not
currently have additional debt plans for the one-year outlook
period.
CENVEO INC: S&P Affirms 'B-' CCR & Removes Rating from CreditWatch
------------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B-' corporate
credit rating on Stamford, Conn.-based diversified printing
company Cenveo Inc. At the same time, S&P removed the rating from
CreditWatch, where it placed it with negative implications on
Jan. 24, 2014, to reflect the company's minimal margin of
compliance with its total leverage covenant. The outlook is
stable.
S&P also affirmed and removed from CreditWatch negative the issue
ratings on the secured and unsecured debt issued by the company's
subsidiary, Cenveo Corp. Rated issues include the $230 million
revolver and $360 million term loan B, affirmed at 'B+' (the
recovery rating remains unchanged at '1'); the $400 million
second-lien notes, affirmed at 'CCC+' (the recovery rating is
unchanged at '5'); and the $225 million 11.5% notes, affirmed at
'CCC' (the recovery rating is unchanged at '6').
Cenveo recently amended the maintenance covenant on its credit
agreement to a 3.25x consolidated first-lien leverage covenant
through 2014, which currently provides the company about 20%
EBITDA cushion. The leverage threshold steps down to 3.0x in 2015
and 2.75x in 2016. "Prior to the amendment, we estimated that the
company's cushion of compliance with its total leverage covenant
was well below 15%," said Standard & Poor's credit analyst Peter
Bourdon. "We believe the company's amendment removes any risk of
covenant breach over the next 12-18 months."
The 'B-' corporate credit rating reflects Standard & Poor's view
that Cenveo is a highly leveraged company in an industry that is
in a secular decline. Through the first nine months of 2013,
Cenveo's adjusted EBITDA declined 22% year over year as a result
of competitive pricing. S&P expects the fourth quarter
acquisition of assets from National Envelope Co. to benefit the
company's operations but maintain our view that Cenveo, together
with most industry players, will continue to be subject to an
ongoing structural decline as digital technologies become more
pervasive.
S&P views the company's business risk profile as "weak" because of
Cenveo's participation in the highly competitive and cyclical
printing markets, in which we expect ongoing pricing pressure from
industry overcapacity. S&P views Cenveo's management and
governance as "fair."
CHA CHA ENTERPRISES: Has Conditional Extension of Plan Exclusivity
------------------------------------------------------------------
The Hon. Arthur Weissbrodt of the U.S. Bankruptcy Court for the
Northern District of California extended Cha Cha Enterprises,
LLC's exclusive periods to file a plan of reorganization until
May 19, and to solicit acceptances for that plan until July 17.
The extensions were part of a stipulation between the Debtor and
Wells Fargo Bank, N.A.
As reported in the Troubled Company Reporter on Jan. 28, 2014,
Paul J. Pascuzzi, Esq., at Willoughby & Pascuzzi LLP, on behalf of
the Debtor, asked the Court to extend the Debtor's exclusive
periods to file a plan of reorganization until May 19, 2014; and
solicit acceptances for that plan also until May 19. Mr. Pascuzzi
said that substantially all of the Debtor's income derives from
rent from its related entity, Mi Pueblo San Jose, Inc., as well as
the Debtor's business operations in Mi Pueblo's 21 grocery stores.
The formulation of the Debtor's plan depends upon Mi Pueblo's
future business operations. Mi Pueblo is also in Chapter 11 and
needs additional time to finalize its future financing before Mi
Pueblo will know how it will emerge from Chapter 11.
The stipulation provided that the Exclusivity Extension Motion may
be granted subject to the condition that if the loans made by the
Bank to the Debtor and its affiliate and companion debtor, Mi
Pueblo, and the obligations of the Debtor and Mi Pueblo to the
Bank in connection therewith have not been acquired from the Bank
by Victory Park Capital Advisors, LLC, or its affiliates, or
satisfied or terminated, as the case may be, on or before Feb. 28,
2014, the Debtor's period of exclusivity to file a plan extended
as sought by the further exclusivity extension motion will
terminate on Feb. 28; provided, however, that if the Debtor files
a plan by Feb. 28, 2014, it will retain the 60-day additional
exclusivity period to obtain acceptances of that plan, that is,
until 60 days after the Debtor files that plan if it does so on or
before Feb. 28.
About Cha Cha Enterprises
Cha Cha Enterprises, LLC, is a California limited liability
company formed in 1998 to purchase a fee interest in property
located at 1775 Story Road, San Jose, California and a leasehold
interest in property located at 1745 Story Road in San Jose. Cha
Cha's primary business is the rental of real property.
Cha Cha filed a Chapter 11 petition (Bankr. N.D. Cal. Case
No. 13-53894) on July 22, 2013. The Debtor estimated at least
$10 million in assets and liabilities.
An affiliate, Mi Pueblo San Jose, Inc., sought Chapter 11
protection (Case No. 13-53893) on the same day. The cases are not
jointly administered.
Steven H. Felderstein, Esq., at Felderstein Fitzgerald Willoughby
& Pascuzzi LLP serves as counsel.
Nicolas De Lancie, Esq., at Jeffer Mangels Butler & Mitchell LLP
Robert B. Kaplan, P.C. represents secured creditor Wells Fargo
Bank, N.A.
CLASSIC PARTY: Court Approves Chapter 11 First Day Motions
----------------------------------------------------------
Classic Party Rentals on Feb. 19 disclosed that the U.S.
Bankruptcy Court for the District of Delaware has approved all of
the First Day Motions related to its voluntary chapter 11 process
initiated February 13, 2014. These motions collectively will
enable the Company to continue operating its business as usual as
it completes its chapter 11 case.
Among the approved motions, the Court granted Classic access to
$20 million in debtor in-possession ("DIP") financing. This
financing, in addition to Classic's existing resources, will
ensure the Company is able to continue meeting all of its
financial obligations while the Company is in chapter 11.
The Court also approved client and employee motions giving Classic
authority to honor all of its client and employee commitments in
the ordinary course of business, including, pay employee wages and
benefits as usual throughout the chapter 11 process, such as
health and medical benefits, paid time off, and expense
reimbursement.
"The motions approved [Wednes]day will help ensure we continue to
operate our business as usual and uphold our commitments to all of
our stakeholders while we work to put our financial challenges in
the past, substantially reduce our debt and provide a stronger
foundation for our future," said Jeff Black, Classic Party
Rental's President and Chief Executive Officer. "This is a very
important milestone in the chapter 11 process, and we thank the
Court for its careful consideration of our requests. All upcoming
and future events that are currently scheduled will be fulfilled
with the same premier customer service that clients have come to
expect from Classic. We believe we have a bright future ahead,
and the sale transaction agreement with our lenders will allow us
to continue leading the industry in providing innovative and
flawlessly executed event services."
Classic previously disclosed on February 14, 2013, that it has
signed an agreement through which substantially all of the
business of Event Rentals, Inc. and its subsidiaries, d/b/a
Classic Party Rentals, would be acquired by a newly established
entity owned by the Company's current lenders. Classic's lenders
have a deep understanding of the business and are fully supportive
of the critical initiatives that the Company intends to implement
in the short and long term. Classic plans to immediately
investment in the business to refresh and grow inventory, which
will expand the Company's ability to deliver even more creative
and elaborate events for its clients.
To facilitate the sale transaction, Classic Party Rentals
announced on February 13 that the Company filed voluntary
petitions for relief under chapter 11 of the United States
Bankruptcy Code. As part of the sale transaction through
chapter 11, the agreement is subject to a court-supervised process
that will solicit additional offers for Classic Party Rentals to
ensure the Company achieves the highest and best offer for its
business. Classic Party Rentals will evaluate any competing
offers it may receive, and any competing offer accepted would only
improve upon the current agreement with lenders.
The transaction is subject to the approval of the Bankruptcy Court
and the satisfaction of customary closing conditions. The sale
transaction is expected to be completed by the end of May 2014.
Upon completion, Classic Party Rentals will be financially and
operationally stronger -- with more extensive product and service
capabilities and outstanding customer service.
Classic Party Rental's vendors and clients can access additional
information about the Company's sale transaction and chapter 11
filing on its dedicated website, www.ClassicTransaction.com
The Company also has established a vendor and customer support
center, which may be reached at 877-759-8814 (toll-free), 424-236-
7261 (outside of the U.S. or Canada).
Classic Party Rentals is advised in this transaction by Jefferies
LLC, FTI Consulting, and White & Case LLP.
About Classic Party Rentals
Classic Party Rentals -- http://www.ClassicPartyRentals.com-- is
the nation's largest full-service event rental company with over
30 locations nationwide. The company services most major markets
including Los Angeles, Chicago, Dallas, New York and Miami by
providing china, glassware, flatware, specialty linen, lounge
furniture, lighting, heating, flooring and kitchen and catering
equipment. Classic is also the leading nationwide provider of
tents and clearspan structures under the brand, Classic Tents as
well as providing multi-location services within the brand Classic
Event Solutions. In addition to providing event rentals, Classic
offers sales support and product and event management for more
than 150,000 events per year including major sporting events,
brand promotion, corporate events, celebrity weddings, charity
events and private social events.
COASTLINE INVESTMENTS: Two Pomona, California Hotels in Ch. 11
--------------------------------------------------------------
Coastline Investments, doing business as Hilltop Suites Hotel, and
Diamond Waterfalls LLC, doing business as Diamond Bar Inn &
Suites, filed bare-bones Chapter 11 bankruptcy petitions (Bankr.
C.D. Cal. Case No. 14-13028 and 14-13030) in Los Angeles on
Feb. 18.
The Pomona, California-based debtors each estimated at least
$10 million in assets and $1 million to $10 million in
liabilities.
According to the docket, the schedules of assets and liabilities
and the statement of financial affairs are due March 4, 2014.
Shih-Chung Liu, who has a 100% membership in the companies, signed
the bankruptcy petitions.
The Debtors are represented by attorneys at Levene Neale Bender
Rankin & Brill LLP, in Los Angeles.
COLLEGE WAY: May Hire Ha Thu Dao as Special Counsel
---------------------------------------------------
The Bankruptcy Court authorized College Way Commercial Plaza LLC
to employ Ha Thu Dao and Grand Central Law, PLLC as special
counsel to prepare and prosecute litigation anticipated by the
Debtor involving the Lacey Crossroads.
The Debtor said its case involves highly contested factual and
legal issues surrounding the ownership of the Debtor's property --
Lacey Crossroads. The Debtor noted that the Court has heard each
party's legal position in two motion sessions and also the Debtor
commenced an adversary case against ECP College Way, LLC -- who
claims to be the current owner of Lacey Crossroads -- to challenge
the validity of conveyance, etc.
To the best of the Debtor's knowledge, Ha Thu Dao does not have
any connection with Debtor, her creditors, any parties-in-
interest, or their respective attorneys or accountants.
Masafumi Iwama of Iwama Law Firm, in his affidavit, said the
application for employment and declaration of Ha Thu Dao were
forwarded to the U.S. Trustee's office on the Jan. 29, 2014. The
next day Mr. Iwama was informed by Sarah Flynn of the U.S.
Trustee's office that the U.S. Trustee had no objection to the
application to employ Ha Thu Dao as the Debtor's special counsel.
About College Way Commercial Plaza, LLC
College Way Commercial Plaza, LLC, filed a Chapter 11 bankruptcy
petition (Bankr. W.D. Wash Case No. 13-47724) on Dec. 19, 2013.
The petition was signed by Sherwood B Korssjoen as member and
manager. The Debtor disclosed $29,160,000 in assets and
$21,444,155 in liabilities as of the Chapter 11 filing. Masafumi
Iwama, Esq., at Iwama Law Firm, serves as the Debtor's counsel.
Judge Brian D Lynch presides over the case.
College Way sought bankruptcy protection one day before a
scheduled foreclosure auction of its asset. ECP College Way LLC
tried to foreclose on the collateral. ECP is the holder of
certain indebtedness owed by the Debtor in the original principal
amount of $21.1 million.
College Way estimates that Lacey Crossroads is valued between
$26 million and $29.5 million.
COMSTOCK MINING: Peter Palmedo Stake at 8.2% as of Dec. 31
----------------------------------------------------------
In an amended Schedule 13G filed with the U.S. Securities and
Exchange Commission, Peter F. Palmedo and his affiliates disclosed
that as of Dec. 31, 2013, they beneficially owned 5,970,341 shares
of common stock of Comstock Mining Inc. representing 8.20 percent
of the shares outstanding. The reporting persons previously owned
5,662,032 common shares as of Dec. 31, 2012. A copy of the
regulatory filing is available for free at http://is.gd/puuNvI
About Comstock Mining
Virginia City, Nev.-based Comstock Mining Inc. is a Nevada-based,
gold and silver mining company with extensive, contiguous property
in the historic Comstock district. The Company began acquiring
properties in the Comstock in 2003. Since then, the Company has
consolidated a substantial portion of the Comstock district,
secured permits, built an infrastructure and brought the
exploration project into test mining production. The Company
continues acquiring additional properties in the Comstock
district, expanding its footprint and creating opportunities for
exploration and mining. The goal of the Company's strategic plan
is to deliver stockholder value by validating qualified resources
(measured and indicated) and reserves (probable and proven) of
3,250,000 gold equivalent ounces by 2013, and commencing
commercial mining and processing operations by 2011, with annual
production rates of 20,000 gold equivalent ounces.
Comstock Mining incurred a net loss of $30.76 million in 2012, a
net loss of $11.60 million in 2011 and a net loss of
$60.32 million in 2010. The Company's balance sheet at Sept. 30,
2013, showed $46.49 million in total assets, $24.78 million in
total liabilities and $21.70 million in total stockholders'
equity.
CRYOPORT INC: Has $1.84-Mil. Net Loss in Dec. 31 Quarter
--------------------------------------------------------
Cryoport, Inc., filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q, reporting a net loss
of $1.84 million on $757,327 of net revenues for the three months
ended Dec. 31, 2013, compared to a net loss of $1.57 million on
$307,153 of net revenues for the same period in 2012.
The Company's balance sheet at Dec. 31, 2013, showed $1.65 million
in total assets, $3.05 million in total liabilities, and
stockholders' deficit of $1.4 million.
The Company expects to continue to incur substantial additional
operating losses from costs related to the commercialization of
our Cryoport Express Solutions and do not expect that revenues
from operations will be sufficient to satisfy our funding
requirements in the near term. The Company believes that its cash
resources at Dec. 31, 2013, additional bridge financing received
subsequent to the quarter end, together with the revenues
generated from its services will be sufficient to sustain its
planned operations into the fourth quarter of fiscal year 2014;
however, the Company must obtain additional capital to fund
operations thereafter and for the achievement of sustained
profitable operations. 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/F8oyux
About Cryoport
Lake Forest, Calif.-based CryoPort, Inc. (OTC BB: CYRX) provides
comprehensive solutions for frozen cold chain logistics, primarily
in the life science industries. Its solutions afford new and
reliable alternatives to currently existing products and services
utilized for bio-pharmaceuticals and biologics, including in-vitro
fertilization, cell lines, vaccines, tissue and other commodities
requiring a reliable frozen solution.
KMJ Corbin & Company LLP, in Costa Mesa, California, issued a
"going concern" qualification on the consolidated financial
statements for the year ended March 31, 2013. The independent
auditors noted that the Company has incurred recurring operating
losses and has had negative cash flows from operations since
inception. Although the Company has cash and cash equivalents of
$563,104 at March 31, 2013, management has estimated that cash on
hand, which include proceeds from convertible bridge notes
received in the fourth quarter of fiscal 2013, will only be
sufficient to allow the Company to continue its operations into
the second quarter of fiscal 2014. These matters raise
substantial doubt about the Company's ability to continue as a
going concern.
Cryoport incurred a net loss of $6.38 million for the year ended
March 31, 2013, as compared with a net loss of $7.83 million for
the year ended March 31, 2012.
CUMULUS MEDIA: Canyon Capital Stake at 7% as of Dec. 31
-------------------------------------------------------
In an amended Schedule 13G filed with the U.S. Securities and
Exchange Commission, Canyon Capital Advisors LLC, Mitchell R.
Julis and Joshua S. Friedman disclosed that as of Dec. 31, 2013,
they beneficially owned 3,332,165 common shares (including 241,221
warrants) of Cumulus Media Inc. representing 7.04 percent of the
shares outstanding. The reporting persons previously disclosed
beneficial ownership of 17,210,699 common shares as of Oct. 31,
2013. A copy of the regulatory filing is available for free at:
http://is.gd/UKAzzd
About Cumulus Media
Founded in 1998, Atlanta, Georgia-based Cumulus Media Inc.
(NASDAQ: CMLS) -- http://www.cumulus.com/-- is an operator of
radio stations, currently serving 110 metro markets with more than
525 stations. In the third quarter of 2011, Cumulus Media
purchased Citadel Broadcasting, adding more than 200 stations and
increasing its reach in 7 of the Top 10 US metros. Cumulus also
acquired the Citadel/ABC Radio Network, which serves 4,000+ radio
stations and 121 million listeners, in the transaction
Cumulus Media said in its annual report for the year ended
Dec. 31, 2011, that lenders under the 2011 Credit Facilities have
taken security interests in substantially all of the Company's
consolidated assets, and the Company has pledged the stock of
certain of its subsidiaries to secure the debt under the 2011
Credit Facilities. If the lenders accelerate the repayment of
borrowings, the Company may be forced to liquidate certain assets
to repay all or part of such borrowings, and the Company cannot
assure that sufficient assets will remain after it has paid all of
the borrowings under those 2011 Credit Facilities. If the Company
was unable to repay those amounts, the lenders could proceed
against the collateral granted to them to secure that indebtedness
and the Company could be forced into bankruptcy or liquidation.
Cumulus Media put AR Broadcasting Holdings Inc. and three other
units to Chapter 11 protection (Bankr. D. Del. Lead Case No.
11-13674) in 2011 after struggling to pay off debts that topped
$97 million as of June 30, 2011. Holdings estimated debts between
$50 million and $100 million but said assets are worth less than
$50 million. AR Broadcasting operated radio stations in Missouri
and Texas.
The Company's balance sheet at Sept. 30, 2013, showed $3.67
billion in total assets, $3.40 billion in total liabilities and
$268.43 million in total stockholders' equity.
* * *
Standard & Poor's Ratings Services in October 2011 affirmed is 'B'
corporate credit rating on Cumulus Media.
"The ratings reflect continued economic weakness and higher post-
acquisition leverage than we initially expected," said Standard &
Poor's credit analyst Jeanne Shoesmith. "They also reflect the
combined company's sizable presence in both large and midsize
markets throughout the U.S."
As reported by the TCR on April 3, 2013, Moody's Investors Service
downgraded Cumulus Media, Inc.'s Corporate Family Rating to B2
from B1 and Probability of Default Rating to B2-PD from B1-PD.
The downgrades reflect Moody's view that the pace of debt
repayment and delevering will be slower than expected. Although
EBITDA for 4Q2012 reflects growth over the same period in the
prior year, results fell short of Moody's expectations.
D.R. HORTON: Fitch Rates Proposed $400MM Sr. Notes Offering 'BB'
----------------------------------------------------------------
Fitch Ratings has assigned a 'BB' rating to D.R. Horton, Inc.'s
(NYSE: DHI) proposed offering of $400 million principal amount of
senior notes due 2019. This issue will be rated on a pari passu
basis with all other senior unsecured debt. Net proceeds from the
notes offerings will be used for general corporate purposes and as
growth capital.
The Rating Outlook is Positive.
Key Rating Drivers
The ratings for DHI reflect the company's strong liquidity
position, the successful execution of its business model,
geographic and product line diversity and steady capital
structure. Fitch expects further gains in industry housing
metrics this year as the housing cycle continues to evolve.
However, there are still challenges facing the housing market that
are likely to moderate the early-to-intermediate stages of this
recovery. Nevertheless, DHI has the financial flexibility to
navigate through the sometimes challenging market conditions and
continue to invest in land opportunities.
The Positive Outlook takes into account the favorable industry
outlook for 2014 and DHI's above average performance relative to
its peers in certain financial, credit and operational categories
during the past two years. Fitch will closely monitor DHI's
financial progress during the next few quarters to assess the
appropriate rating.
The Industry
Housing metrics all showed improvement in 2013. Preliminary data
show that single-family housing starts increased 15.5% to 618,000.
Existing home sales gained 9.2% to 5.09 million in 2013, while new
home sales grew 16.6% to 428,000.
Average single-family new home prices (as measured by the Census
Bureau), which dropped 1.8% in 2011, increased 8.7% in 2012 and
rose 9.8% to $320,900 in 2013. Median home prices expanded 2.4%
in 2011 and then grew 7.9% in 2012 and expanded 8.4% to $265,800
last year.
Housing metrics should increase in 2014 due to faster economic
growth (prompted by improved household net worth, industrial
production and consumer spending), and consequently some
acceleration in job growth (as unemployment rates decrease to 6.9%
for 2014 from an average of 7.5% in 2013), despite somewhat higher
interest rates, as well as more measured home price inflation. A
combination of tax increases and spending cuts in 2013 shaved
about 1.5 percentage points off annual economic growth, according
to the Congressional Budget Office. Many forecasters expect the
fiscal drag in 2014 to be one-third that amount or less.
In any case, single-family starts in 2014 are projected to improve
20% as multifamily volume grows about 9%. Consequently, total
starts in 2014 should top 1 million. New home sales are forecast
to advance about 20%, while existing home volume increases 2%.
New home price inflation should moderate in 2014, at least
partially because of higher interest rates. Average and median
new home prices should rise about 3.5% in 2014.
Challenges (although somewhat muted) remain, including still
relatively high levels of delinquencies, the potential for higher
interest rates, and restrictive credit qualification standards.
Financials
DHI successfully managed its balance sheet during the housing
downturn and generated significant operating cash flow. DHI had
been aggressively reducing its debt during much of the past six
years. Homebuilding debt declined from roughly $5.5 billion at
June 30, 2006 to $1.58 billion as of Dec. 31, 2011, a 71%
reduction. More recently, DHI has been responding to the stronger
housing market, expanding inventories and increasing leverage.
Homebuilding debt at the end of the fiscal 2014 first quarter was
$3.28 billion. As of Dec. 31, 2013, debt/capitalization was 43.8%.
Net debt-capitalization was 37.1% at the end of the fiscal 2014
first quarter. On a pro forma basis (assuming $400 million of
debt issuance and the repayment of $145.9 million of debt in
January 2014), leverage as measured by debt to EBITDA is estimated
to be about 3.9x for the latest 12 months (LTM) period ending Dec.
31, 2013.
DHI's earlier debt reduction was accomplished through debt
repurchases, maturities and early redemptions. DHI repaid the
remaining $145.9 million principal amount of its 6.125% senior
notes on Jan. 15, 2014, its due date. In 2014, an additional
$637.9 million of senior notes mature, including $500 million of
2% senior convertible notes. Fitch expects that the $500 million
of senior convertible notes will likely convert into common stock
this year. The company also has $157.7 million of senior notes
coming due in February 2015.
DHI has solid liquidity with unrestricted homebuilding cash and
equivalents of $801.1 million as of Dec. 31, 2013. On Sept. 7,
2012, DHI entered into a new $125 million five-year unsecured
revolving credit facility. In early November 2012, the company
announced that it had received additional lending commitments,
increasing the capacity of the facility to $600 million.
Currently, the facility size is $725 million with an uncommitted
accordion feature that could increase the size of the facility to
$1 billion, subject to certain conditions and availability of
additional bank commitments. The facility also provides for the
issuance of letters of credit. Letters of credit issued under the
facility reduce available borrowing capacity and may total no more
than $362.5 million in the aggregate. The maturity date of the
facility is Sept. 7, 2018. At Dec. 31, 2013, there were no
borrowings outstanding and $68.9 million of letters of credit
issued under the revolving credit facility.
In early December 2012, DHI declared a cash dividend of $0.15 per
share. This dividend was in lieu of and accelerated the payment
of all quarterly dividends that the company would have otherwise
paid in calendar 2013. In January 2014, DHI declared a quarterly
cash dividend of $0.0375 per share.
Real Estate
DHI maintains a 6.9-year supply of lots (based on LTM deliveries),
72% of which are owned and the balance controlled through options.
The options share of total lots controlled is down sharply over
the past six years as the company has written off substantial
numbers of options and land owners are less inclined to use
options. Fitch expects DHI to continue rebuilding its land
position and increase its community count.
The primary focus will be optioning (or in some cases, purchasing
for cash) or developing in small phases finished lots, wherein DHI
can get a faster return of its capital. DHI's cash flow from
operations during fiscal 2013 (ending Sept. 30, 2013) was a
negative $1.23 billion. In fiscal 2014, Fitch expects DHI to be
cash flow negative by $500 million-$600 million as the company
continues to spend substantial amounts on land and development
activities.
The ratings also reflect DHI's relatively heavy speculative
building activity (at times averaging 50%-60% of total inventory
and 55.4% at Dec. 31, 2013). DHI has historically built a
significant number of its homes on a speculative basis (i.e. begun
construction before an order was in hand).
A key focus is on selling these homes either before construction
is completed or certainly before a completed spec has aged more
than a few months. This has resulted in consistently attractive
margins. DHI successfully executed this strategy in the past,
including during the severe housing downturn. Nevertheless, Fitch
is generally more comfortable with the more moderate spec targets
of 2004 and 2005, wherein spec inventory accounted for roughly
35%-40% of homes under construction.
Rating Sensitivities
Future ratings and Outlooks will be influenced by broad housing
market trends as well as company-specific activity, such as:
-- Trends in land and development spending;
-- General inventory levels;
-- Speculative inventory activity (including the impact of high
cancellation rates on such activity);
-- Gross and net new order activity;
-- Debt levels;
-- Free cash flow trends and uses; and
-- DHI's cash position.
Fitch would consider taking positive rating actions if the
recovery in housing persists, or accelerates and DHI shows steady
improvement in credit metrics (such as debt to EBITDA leverage
consistently at or below 4x), while maintaining a healthy
liquidity position (in excess of $1 billion in a combination of
unrestricted cash and revolver availability). If the current pace
of improvement continues over the next six-to-nine months, an
upgrade could be warranted.
Conversely, negative rating actions could occur if the recovery in
housing dissipates and DHI maintains an overly aggressive land and
development spending program. This could lead to consistent and
significant negative quarterly cash flow from operations and
meaningfully diminished liquidity position (below $500 million).
Fitch currently rates DHI as follows:
-- Long-term Issuer Default Rating 'BB';
-- Senior unsecured debt 'BB'.
The Rating Outlook is Positive.
D.R. HORTON: Moody's Raises CFR to Ba1 & Rates $400MM Notes Ba1
---------------------------------------------------------------
Moody's Investors Service raised D.R. Horton's corporate family
rating to Ba1 from Ba2 and assigned a Ba1 to the company's
proposed $400 million of senior unsecured notes due 2019, proceeds
of which will be used for general corporate purposes. In the same
rating action, Moody's raised the ratings on Horton's existing
senior unsecured notes and convertible senior notes to Ba1 from
Ba2, and affirmed the SGL-2 speculative grade liquidity rating.
The rating outlook was revised to stable from positive.
The following rating actions were taken:
Proposed $400 million of senior unsecured notes due 2019,
assigned Ba1 (LGD4, 53%);
Corporate family rating raised to Ba1 from Ba2;
Probability of default rating raised to Ba1-PD from Ba2-PD;
Existing senior unsecured and convertible senior notes raised
to Ba1 (LGD4, 53%) from Ba2 (LGD4, 54%);
Existing senior unsecured shelf, raised to (P)Ba1 from (P)Ba2;
Speculative grade liquidity rating, affirmed at SGL-2;
The rating outlook is stable, changed from positive
The upgrade reflects Moody's expectation that Horton's fiscal
year-end 2014 adjusted debt leverage will be worked down to close
to 40%, which is a very strong credit metric for a Ba1
homebuilder. Moody's also anticipate that other key credit
metrics, including gross margins, returns, and interest coverage
will continue to improve,while liquidity will remain solid.
Ratings Rationale
The Ba1 rating reflects the company's conservative capital
structure, as reflected in one of the lower homebuilding debt
leverage ratios in the industry; its relatively clean and
transparent balance sheet; its strong earnings metrics, including
healthy gross margins and a long stream of positive quarterly net
income performance; and its position as one of the largest and
most geographically diversified homebuilders in the U.S. In
addition, the Ba1 rating considers Horton's solid liquidity,
supported by $801 million of unrestricted cash and investments as
of December 31, 2013, which will rise to about $1.2 billion with
the proceeds of the proposed note offering, and by the
availability under its $725 million senior unsecured revolving
credit facility due 2018.
While the company's current debt leverage remains among the lowest
in the industry, over a number of recent quarters, it has inched
up slightly to the mid 40% level from the high 30's%. The current
transaction places the adjusted pro forma debt to capitalization
ratio at about 46.5%. Horton's aggressive growth strategies would
have been likely to prevent its debt leverage from declining more
than just modestly, but the company's intention to convert its
$487 million of 2% convertible senior notes to equity in May bring
the leverage calculation down quickly, and Moody's expect the
company to retain low 40% debt leverage going forward.
At the same time, Horton has a business risk profile that should
have caused it trouble during the downturn, namely its large land
positions and propensity to build a large proportion of its homes
on spec. Yet the company's very nimble management permitted it not
only to escape the homebuilding graveyard but to repay $4 billion
of debt out of cash flow from operations throughout the downturn.
Horton's good liquidity profile is reflected in its SGL-2
speculative-grade liquidity assessment, which balances the
company's strong cash position and the availability under the $725
million senior unsecured revolver against our expectation for
negative cash flow generation, the need for the company to
maintain covenant compliance, and its somewhat limited
opportunities to monetize excess assets quickly.
The stable outlook reflects Moody's expectation that homebuilding
debt leverage will remain in the low 40% level beyond fiscal year-
end 2014 while other key credit metrics will continue to improve.
For Horton to regain investment grade status, it must achieve two
milestones:
First, it must generate investment grade credit metrics, namely
adjusted debt/capitalization of below 40%, EBIT coverage of
interest greater than 6x, and GAAP gross margins above 23%.
Secondly, it must convince us that it is serious about wanting the
investment grade rating and would avoid actions (such as large
share repurchases, large debt-financed acquisitions, and other
creditor-unfriendly activities) that could jeopardize the
investment grade rating.
The outlook could be changed to negative if the if the economic
backdrop suddenly and significantly takes a turn for the worse,
and the company's key credit metrics begin to deteriorate
significantly. The ratings could be lowered if the company's
adjusted gross homebuilding debt leverage increased above 50% on a
sustained basis, and if cash flow generation was significantly
negative for a prolonged period of time without an offsetting
sufficient increase in earnings.
The principal methodology used in this rating was the Global
Homebuilding Industry published in March 2009. Other methodologies
used include Loss Given Default for Speculative-Grade Non-
Financial Companies in the U.S., Canada and EMEA published in June
2009.
D.R. Horton, Inc., headquartered in Fort Worth, Texas, is one of
the largest and most geographically diversified homebuilders in
the United States. The company has a presence in 27 states and 78
regions and generates approximately 98% of its revenues from
homebuilding operations, focusing on the construction and sale of
single-family detached homes. In fiscal 2013, which ended
September 30, 2013, the company generated total revenues and net
income of $6.1 billion and $463 million, respectively.
D.R. HORTON: S&P Assigns 'BB' Rating to New $400MM Unsecured Notes
------------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB' issue-level
rating and '3' recovery rating to Fort Worth, Texas-based
homebuilder D.R. Horton Inc.'s proposed offering of $400 million
of senior unsecured notes due 2019. S&P's '3' recovery rating on
this debt indicates its expectation for a meaningful (50% to 70%)
recovery in the event of a default. The 'BB' corporate credit
rating on D.R. Horton remains unchanged. The outlook is stable.
The company plans to use proceeds from the offering for general
corporate purposes. Standard & Poor's expects the issuance to
immediately bolster the company's holdings of unrestricted
homebuilding cash and marketable securities (which totaled
approximately $801 million as of Dec. 31, 2013), providing
additional funds for investment in land and inventory. The
proceeds may also facilitate the repayment of the company's
remaining 2014 debt maturities, which currently total $138 million
(excluding $146 million of 6.125% notes that were repaid with cash
at maturity in January 2014 and a $500 million convertible note
that is expected to be exchanged for common shares in May 2014).
The notes will be guaranteed by substantially all of D.R. Horton's
homebuilding subsidiaries and will rank equally with the company's
other senior unsecured obligations.
S&P's ratings on D.R. Horton reflect its assessment of the
homebuilder's "fair" business risk profile that benefits from
geographic diversity and scale. The company currently operates in
77 markets across 27 states and is the nation's largest
homebuilder by volume, having delivered 25,161 homes primarily to
first-time homebuyers during the 12 months ended Dec. 31, 2013.
S&P views D.R Horton's financial risk profile as "significant".
Key EBITDA-based credit metrics continue to slowly improve as a
result of higher sales volumes on a growing community count and
steady margin expansion.
The outlook is stable. Given S&P's expectation that D.R. Horton
will continue to primarily use debt to finance inventory and land
investment required to support its growth expectations, S&P
believes near-term ratings upside is limited. However, S&P could
raise its rating one notch if gross debt to EBITDA fell to the 3x
area, debt to total book capital is maintained in the 40% area,
and inventory investment required to fund future growth is
substantially funded by cash from operations while adequate
liquidity is maintained. S&P could lower the rating if home sales
slow significantly and gross debt to EBITDA exceeds 5x on a
sustained basis. For the corporate credit rating rationale, see
the research update on D.R. Horton published on June 26, 2013, on
RatingsDirect.
RATINGS LIST
D.R. Horton Inc.
Corporate credit rating BB/Stable/--
New Rating
D.R. Horton Inc.
$400 Mil. Senior Unsecured Notes Due 2019 BB
Recovery Rating 3
DIOCESE OF GALLUP: Wants Plan Filing Deadline Moved to Sept. 8
--------------------------------------------------------------
The Roman Catholic Diocese of Gallup asked the U.S. Bankruptcy
Court for the District of New Mexico to extend the period of time
during which the diocese alone holds the right to file a plan of
reorganization to Sept. 8.
While the diocese "has made progress" identifying potential
sources of financing for its restructuring plan, "there is still
work to be done," according to its lawyer, Susan Boswell, Esq.,
at Quarles & Brady LLP, in Tucson, Arizona.
"Extending exclusivity will facilitate negotiations with key
creditors and creditor constituencies as opposed to submitting a
plan now that has not been previewed or discussed with the
[unsecured creditors' committee]," Ms. Boswell said in a court
filing. The diocese's original exclusivity period ends on
March 12.
The Gallup diocese also asked the bankruptcy court to extend the
deadline for soliciting votes on the plan to Nov. 10 from May 12.
Pursuant to section 1121(d) of the Bankruptcy Code, a debtor may
request an extension of the time periods set forth in section
1121(c), commonly referred to as the "exclusivity period," on a
showing of cause.
About the Diocese of Gallup, NM
The Diocese of Gallup, New Mexico, principally encompasses
American Indian reservations for seven tribes in northwestern New
Mexico and northeastern Arizona. It is the poorest diocese in the
U.S.
There are 38 active priests working in the Diocese and 27
permanent deacons also serve the Diocese along with five
seminarians. The Diocese and its missions, schools and ministries
employ approximately 50 people, and a significant number of
additional people offer their services as volunteers.
The diocese sought bankruptcy protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. N.M. Case No. 13-bk-13676) on Nov. 12,
2013, in Albuquerque, New Mexico amid suits for sexual abuse
committed by priests.
The bishop previously said bankruptcy will be "the most merciful
and equitable way for the diocese to address its responsibility."
The abuse mostly occurred in the 1950s and early 1960s, the bishop
said.
The petition shows assets and debt both less than $1 million.
The Diocese of Gallup is the ninth Catholic diocese to seek
protection in Chapter 11 bankruptcy.
(Catholic Church Bankruptcy News; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000)
DIOCESE OF GALLUP: Wants June 10 Lease Decision Deadline
--------------------------------------------------------
The Roman Catholic Diocese of Gallup asked the U.S. Bankruptcy
Court for the District of New Mexico to extend the deadline to
assume or reject all of its nonresidential real property leases
to June 10.
The diocese "needs more time to make informed decisions"
regarding treatment of the leases, according to its lawyer, Susan
Boswell, Esq., at Quarles & Brady LLP, in Tucson, Arizona.
"The initial stages of these cases have been filled with complex
administrative tasks that have made it difficult to conduct a
complete and thorough analysis of the leases," Ms. Boswell said
in a court filing.
Under section 365(d)(4) of the Bankruptcy Code, a lease of
nonresidential real property is deemed rejected if not assumed or
rejected by the earlier of 120 after entry of an order for
relief, or the date a confirmation order is entered in the
bankruptcy case.
About the Diocese of Gallup, NM
The Diocese of Gallup, New Mexico, principally encompasses
American Indian reservations for seven tribes in northwestern New
Mexico and northeastern Arizona. It is the poorest diocese in the
U.S.
There are 38 active priests working in the Diocese and 27
permanent deacons also serve the Diocese along with five
seminarians. The Diocese and its missions, schools and ministries
employ approximately 50 people, and a significant number of
additional people offer their services as volunteers.
The diocese sought bankruptcy protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. N.M. Case No. 13-bk-13676) on Nov. 12,
2013, in Albuquerque, New Mexico amid suits for sexual abuse
committed by priests.
The bishop previously said bankruptcy will be "the most merciful
and equitable way for the diocese to address its responsibility."
The abuse mostly occurred in the 1950s and early 1960s, the bishop
said.
The petition shows assets and debt both less than $1 million.
The Diocese of Gallup is the ninth Catholic diocese to seek
protection in Chapter 11 bankruptcy.
(Catholic Church Bankruptcy News; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000)
DIOCESE OF GALLUP: Panel Says Debtor Flip Flops on Parish Issue
---------------------------------------------------------------
A committee of unsecured creditors has criticized the Diocese of
Gallup for making contrasting statements concerning the issue of
whether or not its parishes exist separately from the diocese.
The committee said the diocese would represent that a parish is
not a separate legal entity when it wants that parish dismissed
from a lawsuit but would say otherwise when it wants to insulate
assets of a parish from sex abuse claims.
"Whether the parishes are part of the debtor or separate legal
entities appears to be a completely 'flexible' concept, which is
solely dependent on which position is most self-serving for the
debtor at the time the representation is made to the courts," the
committee said in an objection filed with the U.S. Bankruptcy
Court for the District of New Mexico.
According to the objection, the Gallup diocese previously
represented to the Superior Court of the State of Arizona, which
oversees a lawsuit involving the diocese, that its parishes are
separate legal entities. But after one of its parishes was
implicated in the lawsuit, the diocese urged the court to dismiss
claims against the parish, arguing that it doesn't exist as a
legal entity separate from the diocese.
The committee has previously urged U.S. Bankruptcy Judge David
Thuma to implement "adequate measures" to protect the right of the
diocese's estate in funds deposited in banks accounts at Wells
Fargo Bank N.A. The move came after the diocese asked the
bankruptcy judge to allow its parishes to utilize the funds in 13
previously undisclosed bank accounts at Wells Fargo. The
committee expressed concern over the absence of a mechanism to
protect the diocese's estate and its creditors if it is determined
that the funds are property of the estate.
About the Diocese of Gallup, NM
The Diocese of Gallup, New Mexico, principally encompasses
American Indian reservations for seven tribes in northwestern New
Mexico and northeastern Arizona. It is the poorest diocese in the
U.S.
There are 38 active priests working in the Diocese and 27
permanent deacons also serve the Diocese along with five
seminarians. The Diocese and its missions, schools and ministries
employ approximately 50 people, and a significant number of
additional people offer their services as volunteers.
The diocese sought bankruptcy protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. N.M. Case No. 13-bk-13676) on Nov. 12,
2013, in Albuquerque, New Mexico amid suits for sexual abuse
committed by priests.
The bishop previously said bankruptcy will be "the most merciful
and equitable way for the diocese to address its responsibility."
The abuse mostly occurred in the 1950s and early 1960s, the bishop
said.
The petition shows assets and debt both less than $1 million.
The Diocese of Gallup is the ninth Catholic diocese to seek
protection in Chapter 11 bankruptcy.
(Catholic Church Bankruptcy News; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000)
DIOCESE OF GALLUP: BP Wants Limited Access to Oil Agreements
------------------------------------------------------------
BP America Production Co. asked the U.S. Bankruptcy Court for the
District of New Mexico to issue an order limiting access to
documents requested by the Roman Catholic Diocese of Gallup
related to their oil and gas lease agreements.
William Keleher, Esq. -- wrk@modrall.com -- at Modrall Sperling
Roehl Harris & Sisk P.A., in Albuquerque, New Mexico, called the
diocese's request "overbroad."
Mr. Keleher, BP America's lawyer, criticized the Gallup diocese
for requesting documents concerning payments made by the company
prior to 2012 on account of interests in certain property for
which the diocese and the Bishop of the Roman Catholic Diocese of
Gallup receive royalty income. He said producing those documents
is "burdensome and irrelevant."
The Gallup diocese requested for the documents to determine
whether BP America and three other companies have a "contractual
relationship" with the diocese rather than the bishop.
The three other companies are ConocoPhillips Co., Energen
Resources Corp. and XTO Energy, Inc.
About the Diocese of Gallup, NM
The Diocese of Gallup, New Mexico, principally encompasses
American Indian reservations for seven tribes in northwestern New
Mexico and northeastern Arizona. It is the poorest diocese in the
U.S.
There are 38 active priests working in the Diocese and 27
permanent deacons also serve the Diocese along with five
seminarians. The Diocese and its missions, schools and ministries
employ approximately 50 people, and a significant number of
additional people offer their services as volunteers.
The diocese sought bankruptcy protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. N.M. Case No. 13-bk-13676) on Nov. 12,
2013, in Albuquerque, New Mexico amid suits for sexual abuse
committed by priests.
The bishop previously said bankruptcy will be "the most merciful
and equitable way for the diocese to address its responsibility."
The abuse mostly occurred in the 1950s and early 1960s, the bishop
said.
The petition shows assets and debt both less than $1 million.
The Diocese of Gallup is the ninth Catholic diocese to seek
protection in Chapter 11 bankruptcy.
(Catholic Church Bankruptcy News; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000)
DIOCESE OF GALLUP: Has Deal on Payment to Ally Servicing
--------------------------------------------------------
The Diocese of Gallup signed an agreement, which requires the
diocese to make monthly payments to Ally Servicing LLC as part of
their sale contracts.
Under the agreement, the diocese will pay Ally $663 per month
beginning on Feb. 25 until the diocese starts making payments to
the company pursuant to its restructuring plan, the bankruptcy
case is dismissed or it is converted to a case under Chapter 7.
The agreement also requires Ally to forbear from exercising its
rights with respect to four used vehicles, which were posted as
collateral under the sale contracts. A copy of the agreement can
be accessed for free at http://is.gd/2MFxxc
About the Diocese of Gallup, NM
The Diocese of Gallup, New Mexico, principally encompasses
American Indian reservations for seven tribes in northwestern New
Mexico and northeastern Arizona. It is the poorest diocese in the
U.S.
There are 38 active priests working in the Diocese and 27
permanent deacons also serve the Diocese along with five
seminarians. The Diocese and its missions, schools and ministries
employ approximately 50 people, and a significant number of
additional people offer their services as volunteers.
The diocese sought bankruptcy protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. N.M. Case No. 13-bk-13676) on Nov. 12,
2013, in Albuquerque, New Mexico amid suits for sexual abuse
committed by priests.
The bishop previously said bankruptcy will be "the most merciful
and equitable way for the diocese to address its responsibility."
The abuse mostly occurred in the 1950s and early 1960s, the bishop
said.
The petition shows assets and debt both less than $1 million.
The Diocese of Gallup is the ninth Catholic diocese to seek
protection in Chapter 11 bankruptcy.
(Catholic Church Bankruptcy News; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000)
DIOCESE OF HELENA: Proposes Elsaesser Jarzabek as Counsel
---------------------------------------------------------
The Roman Catholic Bishop of Helena, Montana, seeks authority
from the U.S. Bankruptcy Court for the District of Montana to
employ J. Ford Elsaesser, Esq. -- ford@ejame.com -- and Bruce A.
Anderson, Esq. -- brucea@ejame.com -- and the law firm of
Elsaesser Jarzabek Anderson Elliott & Macdonald, Chtd., as
bankruptcy attorneys.
The firm will provide legal advice and assistance as needed by
the Debtor in order to propose and have confirmed a Chapter 11
Plan of Reorganization.
The firm's attorneys will be paid according to these hourly rates:
J. Ford Elsaesser, Esq. $375
Bruce A. Anderson, Esq. $350
Katie Elsaesser, Esq. $145
Lois LaPointe, Paralegal $65
Lisa McCumber, Support Staff $50
Deena Anderson, Support Staff $50
The firm will also be reimbursed for any necessary out-of-pocket
expenses.
Mr. Elsaesser assures the Court that his firm is a "disinterested
person" as the term is defined in Section 101(14) of the
Bankruptcy Code and does not represent any interest adverse to
the Debtor's interest. Mr. Elsaesser discloses that the Debtor
has paid the firm $125,000 prepetition on Jan. 21, 2014. From
that amount, $38,826 was paid to the firm for prepetition
services rendered through Jan. 31, 2014. On Jan. 31, 2014, the
$1,213 filing fee was paid. The remainder of $39,960 is held in
trust.
About the Diocese of Helena
The Roman Catholic Bishop of Helena, Montana, a Montana Religious
Corporation Sole (a/k/a Diocese of Helena) sought protection
under Chapter 11 of the Bankruptcy Code on Jan. 31, 2014, to
resolve more than 350 sexual-abuse claims. The Chapter 11 case
(Bankr. D. Mont. Case No. 14-60074) was filed in Butte, Montana.
Attorneys at Elsaesser Jarzabek Anderson Elliott & MacDonald,
Chtd., serve as counsel to the Debtor.
The Diocese estimated assets of $1 million to $10 million and debt
of $10 million to $50 million.
Several Roman Catholic dioceses in the U.S. have filed for
bankruptcy to settle claims from current and former parishioners
who say they were sexually molested by priests.
(Catholic Church Bankruptcy News; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000)
DIOCESE OF HELENA: Taps Driscoll as Special Counsel
---------------------------------------------------
The Roman Catholic Bishop of Helena has filed an application
seeking court approval to employ William Driscoll of the law firm
Franz & Driscoll PLLP as its special counsel.
Mr. Driscoll will provide legal advice and assistance as needed by
the diocese on general business matters. He will be paid $110 per
hour for his services, and will receive reimbursement for work-
related expenses.
Mr. Driscoll was selected by the diocese because of his
"expertise" in diocese-related business matters. He has also
represented the diocese on such matters for the past 30 years,
according to the filing.
Mr. Driscoll represents no interest adverse to the diocese or the
estate in matters upon which he is to be engaged, according to
the court filing.
About the Diocese of Helena
The Roman Catholic Bishop of Helena, Montana, a Montana Religious
Corporation Sole (a/k/a Diocese of Helena) sought protection
under Chapter 11 of the Bankruptcy Code on Jan. 31, 2014, to
resolve more than 350 sexual-abuse claims. The Chapter 11 case
(Bankr. D. Mont. Case No. 14-60074) was filed in Butte, Montana.
Attorneys at Elsaesser Jarzabek Anderson Elliott & MacDonald,
Chtd., serve as counsel to the Debtor.
The Diocese estimated assets of $1 million to $10 million and debt
of $10 million to $50 million.
Several Roman Catholic dioceses in the U.S. have filed for
bankruptcy to settle claims from current and former parishioners
who say they were sexually molested by priests.
(Catholic Church Bankruptcy News; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000)
DIOCESE OF HELENA: Sec. 341(a) Meeting of Creditors on March 10
---------------------------------------------------------------
A meeting of creditors pursuant to Section 341(a) of the
Bankruptcy Code will be held on March 10, 2014, at 1:00 p.m., in
the bankruptcy case of the Roman Catholic Bishop of Helena.
The meeting will be held at the U.S. Courthouse, 400 North Main
Street, in Butte, Montana.
The Helena diocese's representative must be present at the
meeting to be questioned under oath by the trustee and by
creditors. Creditors are welcome to attend, but are not required
to do so.
This is the first meeting of creditors under Section 341(a) of
the Bankruptcy Code.
The meeting offers creditors a one-time opportunity to examine
the Debtors' representative under oath about the Debtors'
financial affairs and operations that would be of interest to the
general body of creditors. Attendance by the Debtor's creditors
at the meeting is welcome, but not required. The meeting may be
continued and concluded at a later date specified in a notice
filed with the United States Bankruptcy Court District of Montana
(Butte).
About the Diocese of Helena
The Roman Catholic Bishop of Helena, Montana, a Montana Religious
Corporation Sole (a/k/a Diocese of Helena) sought protection
under Chapter 11 of the Bankruptcy Code on Jan. 31, 2014, to
resolve more than 350 sexual-abuse claims. The Chapter 11 case
(Bankr. D. Mont. Case No. 14-60074) was filed in Butte, Montana.
Attorneys at Elsaesser Jarzabek Anderson Elliott & MacDonald,
Chtd., serve as counsel to the Debtor.
The Diocese estimated assets of $1 million to $10 million and debt
of $10 million to $50 million.
Several Roman Catholic dioceses in the U.S. have filed for
bankruptcy to settle claims from current and former parishioners
who say they were sexually molested by priests.
(Catholic Church Bankruptcy News; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000)
DIOCESE OF HELENA: Amends List of Top Unsecured Creditors
---------------------------------------------------------
The Roman Catholic Bishop of Helena filed an amended list
disclosing the following creditors holding the largest unsecured
claims:
Claimants Nature of Claim Claim Amount
--------- --------------- ------------
95 Abuse Claimants Abuse Claims Unknown
c/o Bryan Smith and
Vito de la Cruz
Tamaki Law Offices
1340 16th Ave., Suite C
Yakima, WA 98902
Tel: (509) 248-8338
268 Abuse Claimants Abuse Claims Unknown
c/o Milt Datsopoulos and
Molly Howard
Datsopoulos, MacDonald and Lind
201 W. Main St., Suite 201
Missoula, MT 59802
Tel: (406) 728-0810
c/o Timothy Kosnoff and
Daniel Fasy
Kosnoff Fasy, PLLC
520 Pike St., Suite 1010
Seattle, WA 98101
Tel: (206) 257-3590
c/o Joseph Blumel
Law Offices of Joseph A. Blumel III
4407 N. Division St., Suite 900
Spokane, WA 99207
Tel: (509) 487-1651
c/o Lee James and Craig Vernon
James, Vernon and Weeks
1626 Lincoln Way
Coeur d'Alene, ID 83814
Tel: (206) 667-0683
Anaconda Catholic Community D&L deposit with $262,166
217 W. Pennsylvania interest through
Anaconda, WT 59711 11/30/13
Annuity Fund D&L deposit with $527,622
515 N. Ewing Street interest through
P.O. Box 1729 01/31/14
Helena, MT 59601
Butte Catholic Community D&L deposit with $320,988
102 South Washington Street interest through
Butte, MT 59701 11/30/13
Current Fund D&L deposit with $1,539,131
515 N. Ewing Street interest through
P.O. Box 1729 11/30/13
Helena, MT 59601
Custodian Funds D&L deposit with $276,282
515 N. Ewing Street interest through
P.O. Box 1729 11/30/13
Helena, MT 59601
Little Flower Parish D&L deposit with $606,654
204 1st Street, N.W. interest through
Browning, MT 59417 11/30/13
Mountain West Bank Commercial Loan $362,511
1225 Cedar Street
P.O. Box 6013
Helena, MT 59604
Our Lady of Mercy Parish D&L deposit with $252,277
500 Dewey Avenue interest through
P.O. Box 626 11/30/13
Eureka, MT 59917
Our Lady of the Valley D&L deposit with $710,534
1502 Shirley Road interest through
Helena, MT 59602 11/30/13
Pope John Paul II Parish D&L deposit with $465,612
195 Cloverdell Road interest through
P.O. Box 277 11/30/13
Bigfork, MT 59911
Resurrection Parish D&L deposit with $750,494
1725 S. 11th Avenue interest through
Bozeman, MT 59715 11/30/13
St. Ann Parish D&L deposit with $565,520
2100 Farragut Avenue interest through
Butte, MT 59701 11/30/13
St. Francis Xavier Parish D&L deposit with $1,018,951
420 W. Pine Street interest through
Missoula, MT 59802 11/30/13
St. Helena Cathedral Parish D&L deposit with $333,308
530 N. Ewing Street interest through
Helena, MT 59601 11/30/13
St. Matthew Parish D&L deposit with $1,934,616
602 S. Main Street interest through
Kalispell, MT 59901 11/30/13
St. Phillip Neri Parish D&L deposit with $359,047
12 Broad Street interest through
P.O. Box 329 11/30/13
Drummond, MT 59832
The Foundation for the The Foundation for $1,665,293
Diocese of Helena the Diocese of
Jeanne Saarinen Helena is obligated
P.O. Box 1729 on expected termination
Helena, MT 59601 liabilities of certain
annuities held for
the benefit of
various parishes
A full-text copy of the amended list can be accessed for free at
http://is.gd/PBo72m
About the Diocese of Helena
The Roman Catholic Bishop of Helena, Montana, a Montana Religious
Corporation Sole (a/k/a Diocese of Helena) sought protection
under Chapter 11 of the Bankruptcy Code on Jan. 31, 2014, to
resolve more than 350 sexual-abuse claims. The Chapter 11 case
(Bankr. D. Mont. Case No. 14-60074) was filed in Butte, Montana.
Attorneys at Elsaesser Jarzabek Anderson Elliott & MacDonald,
Chtd., serve as counsel to the Debtor.
The Diocese estimated assets of $1 million to $10 million and debt
of $10 million to $50 million.
Several Roman Catholic dioceses in the U.S. have filed for
bankruptcy to settle claims from current and former parishioners
who say they were sexually molested by priests.
(Catholic Church Bankruptcy News; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000)
DYNASIL CORP: Posts $1.44-Mil. Net Income for Q4 Ended Dec. 31
--------------------------------------------------------------
Dynasil Corporation of America filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q, reporting
net income of $1.44 million on $10.71 of net revenue for the three
months ended Dec. 31, 2013, compared with a net loss of $379,342
on $10.55 of net revenue for the same period in 2012.
The Company's balance sheet at Dec. 31, 2013, showed
$24.15 million in total assets, $11.9 million in total
liabilities, and stockholders' equity of $12.25 million.
The Company was in default of the financial covenants set forth in
the terms of its loan agreements for its fiscal quarter ended
Sept. 30, 2012, and for each quarter in fiscal 2013. These
covenants require the Company to maintain specified ratios of
earnings before interest, taxes, depreciation and amortization
(EBITDA) to fixed charges and to total/senior debt. A default
gives the lenders the right to accelerate the maturity of the
outstanding indebtedness and foreclose on any security interest.
To date, the lenders have not taken any such actions. Until such
time as the Company is able to resolve its covenant defaults,
there will be substantial doubt over the Company's ability to
continue as a going concern, according to the regulatory filing.
A copy of the Form 10-Q is available at:
http://is.gd/ledhpD
About Dynasil
Dynasil Corporation of America -- http://www.dynasil.com--
develops and manufactures optical detection and analysis
technology and components for the homeland security, medical and
industrial markets. Combining world-class expertise in research
and materials science with extensive experience in manufacturing
and product development, Dynasil is commercializing products
including dual-mode radiation detection solutions for Homeland
Security and commercial applications and sensors for non-
destructive testing. Dynasil has an impressive and growing
portfolio of issued and pending U.S. patents. The Company is
based in Watertown, Massachusetts, with additional operations in
Mass., Minn., NY, NJ and the United Kingdom.
ECO BUILDING: Issues 11,000 Preferred Shares to CEO
---------------------------------------------------
Eco Building Products, Inc., issued an aggregate of 11,000 shares
of Series A Preferred Stock, par value $0.001 per share, to Mr.
Steve Conboy in consideration for services rendered to the
Company, including for and as incentive to continue to assist and
provide services to the Company.
As a holder of outstanding shares of Series A Preferred Stock, Mr.
Conboy is entitled to 100,000 votes for each share of Series A
Preferred Stock held on the record date for the determination of
stockholders entitled to vote at each meeting of stockholders of
the Company.
The shares of preferred stock were not registered under the
Securities Act of 1933 and are restricted securities. The shares
were issued pursuant to the registration exemption afforded the
Company under Section 4(2) of the Securities Act due to the fact
that Mr. Conboy is the chief executive officer and sole director
of the Company. Mr. Conboy acquired these shares for his own
accounts. The certificates representing these shares will bear a
restricted legend providing that they cannot be sold except
pursuant to an effective registration statement or an exemption
from registration.
About Eco Building
Vista, Calif.-based Eco Building Products is a manufacturer of
proprietary wood products treated with an eco-friendly proprietary
chemistry that protects against mold, rot, decay, termites and
fire.
Eco Building incurred a net loss of $24.59 million on $5.22
million of total revenue for the year ended June 30, 2013, as
compared with a net loss of $11.17 million on $3.72 million of
total revenue during the prior year.
The Company's balance sheet at Sept. 30, 2013, showed $2.12
million in total assets, $18.65 million in total liabilities and a
$16.52 million total stockholders' deficit.
Sam Kan & Company, in Alameda, California, issued a "going
concern" qualification on the consolidated financial statements
for the year ended June 30, 2013. The independent auditors noted
that the Company has generated minimal operating revenues, losses
from operations, significant cash used in operating activities and
its viability is dependent upon its ability to obtain future
financing and successful operations. These factors raise
substantial doubt about the Company's ability to continue as a
going concern.
EMPIRE RESORTS: Amends $250 Million Securities Prospectus
---------------------------------------------------------
Empire Resorts, Inc., amended its registration statement on Form
S-3 relating to the sale from time to time, in one or more series,
any one of the following securities of the Company for total gross
proceeds of up to $250,000,000:
* common stock;
* preferred stock;
* purchase contracts;
* warrants;
* subscription rights;
* depositary shares;
* debt securities; and
* units.
The Company amended the Registration Statement to delay its
effective date.
The Company's common stock is traded on the Nasdaq Global Market
under the symbol "NYNY".
A copy of the Form S-3/A is available for free at:
http://is.gd/4eQDSW
About Empire Resorts
Based in Monticello, New York, Empire Resorts, Inc. (NASDAQ: NYNY)
-- http://www.empireresorts.com/-- owns and operates Monticello
Casino & Raceway, a video gaming machine and harness racing track
and casino located in Monticello, New York, 90 miles northwest of
New York City.
Empire Resorts reported a net loss applicable to common shares of
$2.26 million in 2012, as compared with a net loss applicable to
common shares of $1.57 million in 2011. The Company incurred a
net loss applicable to common shares of $19.12 million in 2010.
The Company's balance sheet at Sept. 30, 2013, showed $60.72
million in total assets, $52.43 million in total liabilities and
$8.29 million in total stockholders' equity.
ENGLOBAL CORP: NorthPointe Stake at 5.7% as of Feb. 10
------------------------------------------------------
In an amended Schedule 13G filed with the U.S. Securities and
Exchange Commission, NorthPointe Capital, LLC, disclosed that as
of Feb. 10, 2014, it beneficially owned 1,550,716 shares of common
stock of ENGlobal Corporation representing 5.73 percent of the
shares outstanding. A copy of the regulatory filing is available
for free at http://is.gd/c3LhN2
About ENGlobal
Houston-based ENGlobal Corporation (Nasdaq: ENG) is a provider of
engineering and related project services primarily to the energy
sector throughout the United States and internationally. ENGlobal
operates through two business segments: Automation and
Engineering. ENGlobal's Automation segment provides services
related to the design, fabrication and implementation of advanced
automation, control, instrumentation and process analytical
systems. The Engineering segment provides consulting services for
the development, management and execution of projects requiring
professional engineering, construction management, and related
support services.
Englobal incurred a net loss of $33.60 million for the year ended
Dec. 29, 2012, as compared with a net loss of $7.07 million for
the year ended Dec. 31, 2011. The Company's balance sheet at
Sept. 28, 2013, showed $46.08 million in total assets, $20.39
million in total liabilities and $25.69 million in total
stockholders' equity.
Hein & Associates LLP, in Houston, Texas, 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 losses from operations and is in default
of its debt agreements. This raises substantial doubt about the
Company's ability to continue as a going concern.
FIRST QUANTUM: Fitch Affirms 'BB' IDR & Senior Unsecured Ratings
----------------------------------------------------------------
Fitch Ratings has affirmed Canada-based First Quantum Minerals
Ltd's (FQM) Issuer Default Rating (IDR) and senior unsecured
ratings at 'BB' and removed them from Rating Watch Negative (RWN).
Fitch has also assigned the exchange notes due in 2020 and 2021 a
'BB' final rating.
The Outlook on the IDR is Stable.
The rating actions follow the execution of the exchange offer and
consent solicitations launched by FQM on January 28, 2014. With
the early settlement of the exchange offer on February 12, 2014,
the potential liquidity risk associated with the notice of default
served by some of FQM (Akubra) Inc's (Akubra, formerly Inmet)
bondholders has disappeared. The group's capital structure has
also been simplified and the potential subordination risk has
reduced with all bonds now ranking pari passu at the holding
company (FQM) level.
The resolution of the RWN assumes that the USD2.5 billion
revolving credit facility (RCF) maturing in June 2014 will be
successfully refinanced with a five-year USD2.5 billion term loan
and RCF at FQM's level for which a mandate letter was signed on 24
January. "We also assume that the USD1 billion secured facility
to Kansanshi will be replaced with a USD350 million unsecured
credit line.
The assignment of the final rating on the exchange notes follows
the receipt of documents conforming to information already
received and is in line with the expected ratings assigned on 30
January 2014," Fitch said.
Key Rating Drivers
Simplified Capital Structure
As of February 12, 2014, FQM had issued new 6.75% senior notes due
2020 and 7.0% senior notes due 2021, each for a principal amount
of USD1,115 million, to eligible holders of Akubra's 8.75% USD1.5
billion senior notes due 2020 and 7.5% USD500 million senior notes
due 2021. The exchange offer and solicitation expires on February
24, 2014 and any amendments under the notes are now binding for
any remaining bondholders at Akubra's level.
Concurrently, FQM completed the consent solicitation and executed
a supplemental indenture on its USD350m 7.25% senior notes due
2019, aligning their terms and conditions with those of the
exchange bonds.
The notes now constitute a senior unsecured obligation of FQM and
rank equally in right of payment between themselves and with all
existing and future senior unsecured and unsubordinated
obligations. They benefit from guarantees from subsidiaries
representing 52% of pro forma consolidated revenues for the 12
months to September 2013 (LTM9/13).
Structural Subordination Risk Non Material
Kansanshi Mining accounted for 48% of LTM 9/13 pro forma
consolidated revenues but does not guarantee FQM's senior
unsecured debt. The potential structural subordination risk is
mitigated by the expected replacement of the existing USD1bn
secured debt facility to Kansanshi with a new USD350 million
unsecured facility. "We also note that with the approaching
completion of the major capex projects in Zambia, Kansanshi's
external funding requirements are expected to reduce materially
over the coming three years," Fitch said.
The group is also in the process of replacing Akubra's USD2.5
billion RCF maturing in June 2014 with a USD2.5 billion five-year
facility split between a USD1 bn term loan and a USD1.5 billion
RCF at FQM level. "The 'BB' rating assigned to the senior notes
reflects Moody's expectation that the ratio of secured or
structurally senior debt to EBITDA will remain below 2.0x," Fitch
said.
Sound Liquidity
In Fitch's opinion, successful signing of the RCF will provide
sufficient funding to FQM to finance its revised capex schedule.
Under Fitch's base rating case, liquidity is supported by the new
USD2.5 billion facility and cash balances of about USD500 million.
The base case also assumes that Korea Panama Mining Corporation
and Franco-Nevada will continue to contribute their proportionate
shares to the funding of the Cobre Panama (CP) project.
Capex Spend and Timing
"Our base case assumes capex to have peaked in 2013 at USD2.7
billion, and we estimate that annual capex will remain in excess
of USD2 billion until 2016. FQM now plans to produce around 20%
more copper from CP than originally planned by Inmet at a total
cost of USD6.4 billion, including USD913 million incurred prior to
the acquisition. This compares with Inmet's original estimates of
USD6.2 billion but the increased capacity translates into reduced
capital intensity. Commissioning and first concentrate production
are expected in 4Q17 (2016 under Inmet's plans)," Fitch said.
Fitch forecasts leverage will peak in 2014, with funds from
operations (FFO) gross adjusted leverage of 2.7x. With three
major projects targeted for completion from mid-2014 to 2017,
FQM's development pipeline is large and challenging for its size
and extends to regions in which the company has not previously
operated. The associated execution risks are partly mitigated by
the progress to date on the group's projects in Zambia (Kansanshi
and Sentinel).
Large Zambian Exposure
FQM's large operational exposure to the higher-risk Zambian
operating environment represents a key rating constraint. On 28
October 2013, Fitch downgraded Zambia's Long-term foreign and
local currency IDRs to 'B' from 'B+' with a Stable Outlook and its
Country Ceiling to 'B+' from 'BB-'. The sovereign's expected
budget deficit could translate into pressure on the mining sector,
although no measures in this regard are obvious to date. The
increased rating differential between FQM and Zambia is partly
mitigated by the increased geographic diversification provided by
the Inmet acquisition.
Rating Sensitivities
Negative: Future developments that may individually or
collectively
lead to negative rating action include:
-- Sustained (two consecutive years) FFO gross leverage in excess
of 2.5x, (end-2013: forecast 2.2x) indicating a move away from
the company's historically conservative financial approach.
-- Significant problems or delays at key development projects
resulting in a material weakening of credit metrics.
-- Measures taken by the Zambian government materially adversely
affecting miners' cash flow generation or operating
environment
Positive: Future developments that may, individually or
collectively, lead to positive rating action include:
-- Increased geographical diversification and scale from new
projects
GELTECH SOLUTIONS: Has $2.05-Mil. Net Loss in Dec. 31 Quarter
-------------------------------------------------------------
GelTech Solutions, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q, reporting a
net loss of $2.05 million on $65,034 of sales for the three months
ended Dec. 31, 2013, compared with a net loss of $1.41 million on
$37,453 of sales for the same period in 2012.
The Company's balance sheet at Dec. 31, 2013, showed $1.39 million
in total assets, $3.27 million in total liabilities, and a
stockholders' deficit of $1.88 million.
As of Dec. 31, 2013, the Company had a working capital deficit, an
accumulated deficit and stockholders' deficit of $4,585, $31.99
million and $1.88 million, respectively, and incurred losses from
operations of $3.73 million for the six months ended Dec. 31,
2013, and used cash from operations of $2.77 million during the
six months ended Dec. 31, 2013. In addition, the Company has not
yet generated revenue sufficient to support ongoing operations.
These factors raise substantial doubt regarding the Company's
ability to continue as a going concern, according to the
regulatory filing.
A copy of the Form 10-Q is available at:
http://is.gd/gjcXCT
About GelTech
Jupiter, Fla.-based GelTech Solutions. Inc., is a Delaware
corporation organized in 2006. The Company markets four products:
(1) FireIce(R), a water soluble fire retardant used to protect
firefighters, structures and wildlands; (2) Soil2O(R) 'Dust
Control', its new application which is used for dust mitigation in
the aggregate, road construction, mining, as well as, other
industries that deal with daily dust control issues; (3)
Soil2O(R), a product which reduces the use of water and is
primarily marketed to golf courses, commercial landscapers and the
agriculture market; and (4) FireIce(R) Home Defense Unit, a system
for applying FireIce(R) to structures to protect them from
wildfires.
GelTech reported a net loss of $5.22 million on $526,010 of sales
for the year ended June 30, 2013, as compared with a net loss of
$7.13 million on $419,577 of sales for the year ended June 30,
2012.
Salberg & Company, P.A., in Boca Raton, Florida, issued a "going
concern" qualification on the consolidated financial statements
for the year ended June 30, 2013. The independent auditors noted
that the Company has a net loss and net cash used in operating
activities in 2013 of $5,221,747 and $4,195,655, respectively, and
has a working capital deficit, accumulated deficit and
stockholders' deficit of $556,140, $28,021,633 and $2,270,386,
respectively, at June 30, 2013. These matters raise substantial
doubt about the Company's ability to continue as a going concern.
HELIA TEC: March 12 Hearing on Bid to Employ Richard Battaglia
--------------------------------------------------------------
HSC Holdings Co., Ltd., formerly known as GR&FO Co., Ltd., opposed
Helia Tec Resources, Inc.'s expedited motion for permission to
employ Richard Battaglia and Richard A. Battaglia, P.C. as special
counsel.
According to HSC Holdings, (i) Cary Hughes, the Debtor's
president, has no authority to file the bankruptcy case or engage
special counsel on the Debtor's behalf; (ii) conflicts of interest
prohibit the law firm of Richard A. Battaglia from serving as the
Debtor's special counsel; and (iii) it is premature to consider
the application before the motion to convert the case is resolved.
According to the Debtor's case docket, the Court continued until
March 12, 2014, at 9:00 a.m., the hearing to consider the motions
for case conversion and employment of special counsel.
Objections, if any, are due Feb. 26.
The Debtor, in its motion, sought for an expedited consideration
of Mr. Battaglia's engagement in light of the fact a creditor has
filed a motion to convert case from Chapter 11 to Chapter 7 of the
Bankruptcy Code, or alternatively motion to dismiss. The Debtor
noted that Mr. Battaglia has been the attorney of record for the
Debtor and has been advising the Debtor since April 2009.
As special counsel, the Debtor needs Mr. Battaglia to:
a) provide the Debtor legal advice with respect to the
prosecution of the various legal proceedings;
b) prepare pleadings and responses to specific legal issues
presented in this proceeding which may become necessary; and
c) perform all other legal services for the Debtor as a
Debtor-in-possession that may become necessary to these
proceedings.
The hourly rates of the firm's personnel are:
Mr. Battaglia $375
Law Clerks & Legal Assistants $75 - $125
To the best of Debtor's knowledge, Richard Battaglia and Richard
A. Battaglia, P.C. represent no interest adverse to the Debtor or
its estate in the matters upon which they have been engaged.
About Helia Tec Resources
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.
Judy A. Robbins, U.S. Trustee for Region 7, was unable to appoint
an official committee of unsecured creditors in the Debtor's case.
HERCULES OFFSHORE: Vanguard Group Stake at 5.4% as of Dec. 31
-------------------------------------------------------------
In a Schedule 13G filed with the U.S. Securities and Exchange
Commission, The Vanguard Group disclosed that as of Dec. 31, 2013,
it beneficially owned 8,666,384 shares of common stock of
Hercules Offshore Inc. representing 5.42 percent of the shares
outstanding. A copy of the regulatory filing is available for
free at http://is.gd/wY0hpH
About Hercules Offshore
Hercules Offshore Inc. (NASDAQ: HERO) --
http://www.herculesoffshore.com/-- provides shallow-water
drilling and marine services to the oil and natural gas
exploration and production industry in the United States, Gulf of
Mexico and internationally. The Company provides these services
to integrated energy companies, independent oil and natural gas
operators and national oil companies. The Company operates in six
business segments: Domestic Offshore, International Offshore,
Inland, Domestic Liftboats, International Liftboats and Delta
Towing.
Hercules incurred a net loss of $127 million in 2012, a net loss
of $76.12 million in 2011, and a net loss of $134.59 million in
2010. The Company's balance sheet at Sept. 30, 2013, showed $2.40
billion in total assets, $1.48 billion in total liabilities and
$922.37 million in stockholders' equity.
* * *
The Troubled Company Reporter said on April 11, 2013, that
Moody's Investors Service upgraded Hercules Offshore, Inc.'s
Corporate Family Rating to B2 from B3. Hercules' B2 CFR is
supported by its improved cash flow and lower leverage on the back
of increased drilling activity and higher day-rates in the Gulf of
Mexico (GOM)
As reported by the TCR on Nov. 6, 2012, Standard & Poor's Ratings
Services raised its corporate credit rating on Houston-based
Hercules Offshore Inc. to 'B' from 'B-'. "The upgrade reflects
the improving market conditions in the Gulf of Mexico and our
expectations that Hercules' fleet will continue to benefit," said
Standard & Poor's credit analyst Stephen Scovotti.
HOVNANIAN ENTERPRISES: Vanguard Group Stake at 6.2% as of Dec. 31
-----------------------------------------------------------------
The Vanguard Group disclosed in a Schedule 13G filed with the U.S.
Securities and Exchange Commission that as of Dec. 31, 2013, it
beneficially owned 7,749,754 shares of common stock of Hovnanian
Enterprises Inc. representing 6.22 percent of the shares
outstanding. A copy of the regulatory filing is available for
free at http://is.gd/TRkrfg
About Hovnanian Enterprises
Red Bank, New Jersey-based Hovnanian Enterprises, Inc. (NYSE: HOV)
-- http://www.khov.com/-- founded in 1959 by Kevork S. Hovnanian,
is one of the nation's largest homebuilders with operations in
Arizona, California, Delaware, Florida, Georgia, Illinois,
Kentucky, Maryland, Minnesota, New Jersey, New York, North
Carolina, Ohio, Pennsylvania, South Carolina, Texas, Virginia and
West Virginia. The Company's homes are marketed and sold under
the trade names K. Hovnanian Homes, Matzel & Mumford, Brighton
Homes, Parkwood Builders, Town & Country Homes, Oster Homes and
CraftBuilt Homes. As the developer of K. Hovnanian's Four Seasons
communities, the Company is also one of the nation's largest
builders of active adult homes.
Hovnanian Enterprises posted net income of $31.29 million on $1.85
billion of total revenues for the year ended Oct. 31, 2013, as
compared with a net loss of $66.19 million on $1.48 billion of
total revenues during the prior year.
As of Oct. 31, 2013, the Company had $1.75 billion in total
assets, $2.19 billion in total liabilities and a $432.79 million
total deficit.
* * *
As reported by the Troubled Company Reporter on April 25, 2013,
Standard & Poor's Ratings Services said it raised its corporate
credit rating on Hovnanian Enterprises Inc. to 'B-' from 'CCC+'.
"The upgrade reflects strengthening operating performance
supported by the broader recovery in the housing market that, we
believe, should support modest profitability in 2013," said
Standard & Poor's credit analyst George Skoufis.
In the Dec. 9, 2013, edition of the TCR, Fitch Ratings upgraded
the Issuer Default Rating (IDR) of Hovnanian Enterprises to 'B-'
from 'CCC'. The upgrade and the Stable Outlook reflects HOV's
operating performance year-to-date (YTD), adequate liquidity
position, and moderately better prospects for the housing sector
during the remainder of this year and in 2014.
As reported by the TCR on Jan. 9, 2014, Moody's Investors Service
raised the Corporate Family Rating of Hovnanian Enterprises, Inc.,
to B3 from Caa1. The upgrade of the Corporate Family Rating to B3
reflects Hovnanian's improved financial performance including
improvement in interest coverage to slightly above 1x and finally
turning net income positive for the fiscal year 2013.
ISTAR FINANCIAL: Vanguard Owns 4.93% of REIT
--------------------------------------------
In an amended Schedule 13G filed with the U.S. Securities and
Exchange Commission, The Vanguard Group disclosed that as of
Dec. 31, 2013, it beneficially owned 4,215,724 REIT of iStar
Financial Inc. representing 4.93 percent of the class of
securities.
Vanguard Fiduciary Trust Company, a wholly-owned subsidiary of The
Vanguard Group, is the beneficial owner of 126,511 shares or 0.14%
of the common stock outstanding of the Company as a result of its
serving as investment manager of collective trust accounts.
Vanguard Investments Australia, Ltd., a wholly-owned subsidiary of
The Vanguard Group, is the beneficial owner of 3,700 shares or
0.00% of the common stock outstanding as a result of its serving
as investment manager of Australian investment offerings.
A copy of the regulatory filing is available for free at
http://is.gd/YfJ8cG
About iStar Financial
New York-based iStar Financial Inc. (NYSE: SFI) provides custom-
tailored investment capital to high-end private and corporate
owners of real estate, including senior and mezzanine real estate
debt, senior and mezzanine corporate capital, as well as corporate
net lease financing and equity. The Company, which is taxed as a
real estate investment trust, provides innovative and value added
financing solutions to its customers.
iStar Financial incurred a net loss of $241.43 million in 2012,
following a net loss of $25.69 million in 2011. The Company's
balance sheet at Sept. 30, 2013, showed $5.77 billion in total
assets, $4.37 billion in total liabilities, $12.39 million in
redeemable noncontrolling interests, and $1.38 billion in total
equity.
* * *
In March 2013, Fitch Ratings affirmed iStar's 'B-' issuer default
rating and revised the outlook to "positive" from "stable." The
revision of the outlook to positive is based on the company's
demonstrated access to the unsecured debt market, which, combined
with certain secured debt refinancings, have significantly
improved SFI's near-term debt maturity profile.
As reported by the TCR on Oct. 5, 2012, Standard & Poor's Ratings
Services affirmed its 'B+' long-term issuer credit rating on iStar
Financial.
In October 2012, Moody's Investors Service upgraded the corporate
family rating to B2 from B3. The current rating reflects the
REIT's success in extending near term debt maturities and
improving fundamentals in commercial real estate. The ratings on
the October 2012 senior secured credit facility takes into account
the asset coverage, the size and quality of the collateral pool,
and the term of facility.
ISTAR FINANCIAL: BlackRock Stake at 9.6% as of Dec. 31
------------------------------------------------------
In an amended Schedule 13G filed with the U.S. Securities and
Exchange Commission, BlackRock, Inc., disclosed that as of
Dec. 31, 2013, it beneficially owned 8,406,073 shares of common
stock of Istar Financial REIT Inc. representing 9.6 percent of the
shares outstanding. BlackRock previously held beneficial
ownership of 5,690,847 common shares as of Dec. 31, 2012. A copy
of the regulatory filing is available for free at:
http://is.gd/mfWvGw
About iStar Financial
New York-based iStar Financial Inc. (NYSE: SFI) provides custom-
tailored investment capital to high-end private and corporate
owners of real estate, including senior and mezzanine real estate
debt, senior and mezzanine corporate capital, as well as corporate
net lease financing and equity. The Company, which is taxed as a
real estate investment trust, provides innovative and value added
financing solutions to its customers.
iStar Financial incurred a net loss of $241.43 million in 2012,
following a net loss of $25.69 million in 2011. The Company's
balance sheet at Sept. 30, 2013, showed $5.77 billion in total
assets, $4.37 billion in total liabilities, $12.39 million in
redeemable noncontrolling interests, and $1.38 billion in total
equity.
* * *
In March 2013, Fitch Ratings affirmed iStar's 'B-' issuer default
rating and revised the outlook to "positive" from "stable." The
revision of the outlook to positive is based on the company's
demonstrated access to the unsecured debt market, which, combined
with certain secured debt refinancings, have significantly
improved SFI's near-term debt maturity profile.
As reported by the TCR on Oct. 5, 2012, Standard & Poor's Ratings
Services affirmed its 'B+' long-term issuer credit rating on iStar
Financial.
In October 2012, Moody's Investors Service upgraded the corporate
family rating to B2 from B3. The current rating reflects the
REIT's success in extending near term debt maturities and
improving fundamentals in commercial real estate. The ratings on
the October 2012 senior secured credit facility takes into account
the asset coverage, the size and quality of the collateral pool,
and the term of facility.
JAMES RIVER: Vanguard Group Stake at 4.2% as of Dec. 31
-------------------------------------------------------
In an amended Schedule 13G filed with the U.S. Securities and
Exchange Commission, The Vanguard Group disclosed that as of
Dec. 31, 2013, it beneficially owned 1,504,717 shares of common
stock of James River Coal Co representing 4.17 percent of the
shares outstanding. The Vanguard Group previously reported
beneficial ownership of 2,120,609 common shares or 5.9 percent
equity stake as of Dec. 31, 2012. A copy of the regulatory filing
is available for free at http://is.gd/5MTau9
About James River
Headquartered in Richmond, Virginia, James River Coal Company
(NasdaqGM: JRCC) -- http://www.jamesrivercoal.com/-- mines,
processes and sells bituminous steam and industrial-grade coal
primarily to electric utility companies and industrial customers.
The company's mining operations are managed through six operating
subsidiaries located throughout eastern Kentucky and in southern
Indiana.
For the nine months ended Sept. 30, 2013, the Company reported a
net loss of $14.99 million. James River reported a net loss of
$138.90 million in 2012, as compared with a net loss of $39.08
million in 2011. The Company's balance sheet at Sept. 30, 2013,
showed $1.06 billion in total assets, $818.69 million in total
liabilities and $247.34 million in total shareholders' equity.
* * *
In the May 24, 2013, edition of the TCR, Moody's Investors Service
downgraded James River Coal Company's Corporate Family Rating to
Caa2 from Caa1.
"While the company continues to take actions to reposition
operations and shore up its balance sheet, we expect external
factors will preclude James River from maintaining credit measures
and liquidity consistent with the Caa1 rating level," said Ben
Nelson, Moody's lead analyst for James River Coal Company.
As reported by the TCR on Nov. 19, 2012, Standard & Poor's Ratings
Services raised its corporate credit rating on Richmond, Va.-based
James River Coal Co. to 'CCC' from 'SD' (selective default).
"We raised our rating on James River Coal because we understand
that the company has stopped repurchasing its debt at deep
discounts, for the time being," said credit analyst Megan
Johnston.
JASPER MERGER: S&P Assigns 'B' CCR & Rates $470MM Sec. Loan 'BB-'
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned New York City-based
footwear and jeanswear company Jasper Merger Sub Inc. a 'B'
corporate credit rating. The outlook is stable.
At the same time, S&P assigned the company's proposed $470 million
secured term loan due 2019 its 'BB-' issue-level rating, with a
recovery rating of '1', indicating S&P's expectation for very high
(90% to 100%) recovery for secured debt holders in the event of a
payment default.
S&P also anticipates that Nine West will assume the existing
$400 million 6.875% unsecured notes due 2019 and the $250 million
6.125% unsecured notes due 2034. As such, upon completion of the
transaction, S&P will assign this debt its 'B-' unsecured debt
rating and '5' recovery rating, indicating S&P's expectation for
modest (10% to 30%) recovery in the event of a payment default.
Jasper Merger Sub Inc. will be renamed Nine West Holdings (Nine
West) Inc. upon completion of the acquisition transaction.
"We are assigning ratings to Jasper Merger Sub Inc. (Nine West) in
conjunction with its pending acquisition by financial sponsor,
Sycamore Partners (Sycamore). Following Sycamore's $2.2 billion
acquisition of The Jones Group and concurrent carve-out of Jones
Apparel, Stuart Weitzman, and Kurt Geiger, the surviving Nine West
entity will be comprised of the remaining footwear and jeanswear
businesses. We expect the transaction to close during second-
quarter 2014. Following completion of the transaction, we estimate
the company's pro forma 2013 debt to EBITDA leverage will be in
the mid-6x area. As such, we assess the company's financial risk
profile as "highly leveraged." Following completion of the
transaction, we assess the company's business risk profile as
"weak," reflecting the company's somewhat narrow business focus,
participation in the highly competitive denim segment, and the
still weak consumer discretionary and retailing environment," S&P
said.
JONES GROUP: S&P Retains 'BB-' CCR on CreditWatch Negative
----------------------------------------------------------
Standard & Poor's Ratings Services said that its ratings on Jones
Group Inc., including the 'BB-' corporate credit rating, remain on
CreditWatch with negative implications.
Following the completion of the pending acquisition by financial
sponsor Sycamore Partners, S&P expects to withdraw its corporate
credit and issue-level ratings on Jones, and assign lower issue-
level ratings to the successor company.
In particular, S&P anticipates that the existing $400 million
6.875% unsecured notes due 2019 and the $250 million 6.125%
unsecured notes due 2034 will be assumed by Jasper Merger Sub Inc.
(the surviving footwear and jeanswear business). As such, upon
completion of the transaction, S&P expects to assign this debt its
'B-' unsecured debt rating and '5' recovery rating, indicating its
expectation for modest (10% to 30%) recovery in the event of a
payment default. S&P expects the unsecured notes due 2014 to be
repaid.
Following Sycamore's $2.2 billion acquisition of The Jones Group
and concurrent carve-out of Jones Apparel, Stuart Weitzman, and
Kurt Geiger, Jasper Merger Sub Inc. will be the new borrower for
the unsecured notes that will remain outstanding. S&P expects the
transaction to close during second-quarter 2014.
S&P's ratings on Jones remain on CreditWatch with negative
implications, reflecting its view that it would lower its ratings
upon completion of the pending acquisition transaction. S&P will
resolve the CreditWatch listing upon completion of the acquisition
transaction.
KEMET CORP: Files Copy of Investor Presentation with SEC
--------------------------------------------------------
Per-Olof Loof, chief executive officer, and William M. Lowe, Jr.,
executive vice president and chief financial officer, of KEMET
Corporation, presented at the Stifel Nicolaus 2014 Technology,
Internet & Media Conference on Feb. 11, 2014, in San Francisco,
California. The slide package prepared by the Company for use in
connection with this presentation is furnished available for free
at http://is.gd/QC89Fu
About KEMET
KEMET, based in Greenville, South Carolina, is a manufacturer and
supplier of passive electronic components, specializing in
tantalum, multilayer ceramic, film, solid aluminum, electrolytic,
and paper capacitors. KEMET's common stock is listed on the NYSE
under the symbol "KEM."
KEMET Corp disclosed a net loss of $82.18 million on $842.95
million of net sales for the fiscal year ended March 31, 2013, as
compared with net income of $6.69 million on $984.83 million of
net sales for the year ended March 31, 2012. For the six months
ended Sept. 30, 2013, the Company incurred a net loss of $48.23
million on $415.46 million.
The Company's balance sheet at Dec. 31, 2013, showed $862.32
million in total assets, $624.49 million in total liabilities and
$237.82 million in total stockholders' equity.
* * *
As reported by the TCR on March 26, 2013, Moody's Investors
Service downgraded KEMET Corp.'s Corporate Family Rating to Caa1
from B2 and the Probability of Default Rating to Caa1-PD from B2-
PD based on Moody's expectation that KEMET's liquidity will be
pressured by maturing liabilities and negative free cash flow due
to the interest burden and continued operating losses at the Film
and Electrolytic segment.
As reported by the TCR on Aug. 9, 2013, Standard & Poor's Ratings
Services lowered its corporate credit rating on Simpsonville,
S.C.-based KEMET Corp. to 'B-' from 'B+'.
"The downgrade is based on continued top-line and margin pressures
and lagging results from the restructuring of the Film &
Electrolytic [F&E] business, which combined with cyclical weak
end-market demand, has resulted in sustained, elevated leverage
well in excess of 5x, persistent negative FOCF, and diminishing
liquidity," said Standard & Poor's credit analyst Alfred
Bonfantini.
KEMET CORP: Vanguard Group Stake at 2.8% as of Dec. 31
------------------------------------------------------
In an amended Schedule 13G filed with the U.S. Securities and
Exchange Commission, The Vanguard Group disclosed that as of
Dec. 31, 2013, it beneficially owned 1,299,235 shares of common
stock of Kemet Corp. representing 2.87 percent of the shares
outstanding. A copy of the regulatory filing is available for
free at http://is.gd/rJyFdM
About KEMET
KEMET, based in Greenville, South Carolina, is a manufacturer and
supplier of passive electronic components, specializing in
tantalum, multilayer ceramic, film, solid aluminum, electrolytic,
and paper capacitors. KEMET's common stock is listed on the NYSE
under the symbol "KEM."
KEMET Corp disclosed a net loss of $82.18 million on $842.95
million of net sales for the fiscal year ended March 31, 2013, as
compared with net income of $6.69 million on $984.83 million of
net sales for the year ended March 31, 2012. For the six months
ended Sept. 30, 2013, the Company incurred a net loss of $48.23
million on $415.46 million.
The Company's balance sheet at Dec. 31, 2013, showed $862.32
million in total assets, $624.49 million in total liabilities and
$237.82 million in total stockholders' equity.
* * *
As reported by the TCR on March 26, 2013, Moody's Investors
Service downgraded KEMET Corp.'s Corporate Family Rating to Caa1
from B2 and the Probability of Default Rating to Caa1-PD from B2-
PD based on Moody's expectation that KEMET's liquidity will be
pressured by maturing liabilities and negative free cash flow due
to the interest burden and continued operating losses at the Film
and Electrolytic segment.
As reported by the TCR on Aug. 9, 2013, Standard & Poor's Ratings
Services lowered its corporate credit rating on Simpsonville,
S.C.-based KEMET Corp. to 'B-' from 'B+'.
"The downgrade is based on continued top-line and margin pressures
and lagging results from the restructuring of the Film &
Electrolytic [F&E] business, which combined with cyclical weak
end-market demand, has resulted in sustained, elevated leverage
well in excess of 5x, persistent negative FOCF, and diminishing
liquidity," said Standard & Poor's credit analyst Alfred
Bonfantini.
LAS VEGAS RAILWAY: Posts $5.92-Mil. Net Loss in Dec. 31 Quarter
---------------------------------------------------------------
Las Vegas Railway Express, Inc., filed with the U.S. Securities
and Exchange Commission its quarterly report on Form 10-Q,
reporting a net loss of $5.92 million for the three months ended
Dec. 31, 2013, compared with a net loss of $2.26 million for the
same period in 2012.
The Company's balance sheet at Dec. 31, 2013, showed $2.48 million
in total assets, $4.95 million in total liabilities, and a
stockholders' deficit of $2.47 million.
The Company noted that it had no revenue, a net loss of $7.74
million for the nine months ended Dec. 31, 2013 and an accumulated
deficit of $26.31 million through Dec. 31, 2013, as well as
outstanding convertible notes payable of $2.23 million which are
payable on Feb. 1, 2014 and outstanding convertible notes payable
of $1.75 million payable on June 30, 2014. As of Dec. 31, 2013,
the Company has a working capital deficit of $3.94 million.
Management believes that it will need additional equity or debt
financing to fully implement the business plan. These matters
raise substantial doubt about the Company's ability to continue as
a going concern, according to the regulatory filing.
A copy of the Form 10-Q is available at:
http://is.gd/FeUtAF
Amendment to Q2 2013 Report
The company filed an amendment to the Form 10-Q for the quarter
ended June 30, 2013. A copy of the document is available for free
at http://is.gd/f7QWZJ
About Las Vegas Railway
Las Vegas, Nev.-based Las Vegas Railway Express, Inc., is a
Delaware corporation whose business plan is to establish a rail
passenger train service between Las Vegas and Los Angeles using
existing railroad lines currently utilized by two Class I
railroads, Burlington Northern and Union Pacific.
LEE ENTERPRISES: Outlines Digital Strategies; Mulls Refinancing
---------------------------------------------------------------
At its annual meeting of stockholders on Feb. 19, Lee Enterprises,
Incorporated was set to provide a review of its digital news,
sales and audience strategies, along with a financial update that
includes improved cost guidance.
The presentation is available at lee.net. It includes remarks by
Mary Junck, chairman and chief executive officer; Kevin Mowbray,
vice president and chief operating officer; and Carl Schmidt, vice
president, chief financial officer and treasurer.
"As we recently reported, Lee is off to a solid start in 2014,"
Ms. Junck said. "We grew digital revenue and audiences at a
double-digit pace, continued to reduce expenses, again posted
strong cash flow, reduced our debt further and announced a
commitment for a favorable refinancing of our second lien debt.
Those reasons reinforce our upbeat outlook."
Strategies include:
- Expanded local news and information tailored for each digital
platform -- desktop and tablet web, mobile web, mobile apps,
tablet apps, e-editions and niche apps.
- Expanded mobile advertising capabilities, including geo-
targeting, and expanded digital marketing services aimed at small
and medium-size businesses.
- Introduction of full-access subscriptions in 28 markets by
September, providing subscribers with a single sign-on to all
digital platforms in addition to home delivery of the printed
newspaper.
- Ongoing business transformation initiatives, including the
expansion of regional design centers, now serving 25 newspapers.
In providing improved cost guidance, Mr. Schmidt said 2014
operating expenses, excluding depreciation and amortization, as
well as impairment charges in the prior year, are expected to
decrease 1.5-2.5%, a change of about $5 million from the prior
estimate. This guidance excludes the impact of a circulation-
related expense reclassification that will increase both
subscription revenue and expenses, but have no impact on operating
cash flow or operating income.
Mr. Schmidt also reviewed plans for refinancing Lee's long-term
debt. He said that in addition to completing a previously
announced agreement for refinancing Lee's second lien debt to
December 2022, the company is focused on refinancing its first
lien debt, which matures in December 2015. He said Lee will seek
to refinance its first lien debt over the next few months, using a
combination of pre-payable and non-pre-payable facilities, with a
goal of extending the company's non-Pulitzer weighted average
maturities beyond seven years.
About Lee Enterprises
Lee Enterprises, Incorporated, headquartered in Davenport, Iowa,
publishes the St. Louis Post Dispatch and the Arizona Daily Star
along with more than 40 other daily newspapers and about 300
weekly newspapers and specialty publications in 23 states.
Revenue for the 12 months ended December 2010 was $780 million.
The Company has 6,200 employees, with 4,650 working full-time.
Lee Enterprises and certain of its affiliates filed for Chapter 11
(Bankr. D. Del. Lead Case No. 11-13918) on Dec. 12, 2011, with a
prepackaged plan of reorganization. The Debtor selected Sidley
Austin LLP as its general reorganization and bankruptcy counsel,
and Young Conaway Stargatt & Taylor LLP as co-counsel; The
Blackstone Group as Financial and Asset Management Consultant; and
The Debtor disclosed total assets of $1.15 billion and total
liabilities of $1.25 billion at Sept. 25, 2011.
Deutsche Bank Trust Company Americas, as DIP Agent and Prepetition
Agent, is represented in the Debtors' cases by Sandeep "Sandy"
Qusba, Esq., and Terry Sanders, Esq., at Simpson Thacher &
Bartlett LLP.
Certain Holders of Prepetition Credit Agreement Claims, Goldman
Sachs Lending Partners LLC, Mutual Quest Fund, Monarch Master
Funding Ltd, Mudrick Distressed Opportunity Fund Global, LP and
Blackwell Partners, LLC have committed to acquire up to a maximum
amount of $166.25 million of loans under a New Second Lien Term
Loan Facility pursuant to the Reorganization Plan. This
commitment also includes the potential payment of up to $10
million as backstop cash to Reorganized Lee Enterprises to acquire
the loans. The Initial Backstop Lenders are represented by
Matthew S. Barr, Esq., and Brian Kinney, Esq., at Milbank, Tweed,
Hadley & McCloy LLP.
On Jan. 23, 2012, Lee Enterprises, et al., won confirmation of a
second version of their prepackaged Chapter 11 reorganization
plan. Lee Enterprises declared the prepackaged plan effective on
Jan. 30.
LOFINO PROPERTIES: Trustee May Use Cash Collateral Thru Feb. 28
---------------------------------------------------------------
Judge Lawrence S. Walter entered a second interim order allowing
the Chapter 11 Trustee of Lofino Properties LLC to use the cash
collateral of First Financial Bank, N.A., through Feb. 28, 2014.
The subject cash collateral is generated from First Financial's
real propert collateral located at 6000-6130 Wilmington Pike,
Dayton, Ohion 45432 and known as Sugarcreek Plaza.
The cash collateral may be used in accordance with a prepared
budget, a copy of which is available at:
http://bankrupt.com/misc/LOFINOPROPERTIES_budgetFeb2014.pdf
In connection with the Cash Collateral use, First Financial is
permitted to be adequately protected through (i) maintenance and
continuation of First Financials liens on the First Financial
Gross Rents existing at the Petition Date or that are generated
postpetition from the First Financial Real Property; (ii) payment
of monthly principal and interest accruing on the First Financial
loan as provided in the Loan Agreement; (iii) continuance of the
First Financial Net Rent Account and the deposit therein of all
net rents remaining after the payment of the expenses provided in
the budget; (iv) replacement liens in same validity, extent and
priority as existed prepetition; and (v) periodic financial
reporting.
Objections
Before the Court entered its Second Interim Cash Collateral Use
Order, First Financial and Glicny Real Estate Holding LLC filed
limited objections.
First Financial sought that any final order approving the cash
collateral use include a provision permitting First Financial and
Glicny to seek an accounting and surcharge the property of the
other for any cash collateral used to pay carve out expenses or
debt service for the benefit of the other secured creditor.
Glicny, for its part, clarify that it has consented to the use of
its cash collateral to pay taxes, utilities, and otherwise
maintain and repair manage Glicney's real property collateral.
Other than that, no other agreements are currently in place for
the use of Glicny's cash collateral.
First Financial Bank, N.A., is represented by:
KEATING MUETHING & KLEKAMP PLL
Robert G. Sanker, Esq.
Jason V. Stitt, Esq.
One East Fourth Street, Suite 1400
Cincinnati, OH 45202
Tel No: (513) 579-6587
Fax No: (513) 579-6457
Email: rsanker@kmklaw.com
jstitt@kmklaw.com
GLICNY Real Estate Holding is represented by:
Gilbert F. Blomgren, Esq.
1370 Ontario Street, Suite 600
Cleveland, Ohio 44113
Tel No: (216)622-44113
Email: gblomgren@bnblawyers.com
About Lofino Properties
Dayton, Ohio-based Lofino Properties, LLC, which owns retail
stores, sought bankruptcy protection (Bankr. S.D. Ohio Case No.
13-34099) on Oct. 4, 2013. Lofino Properties listed assets of
$19.91 million and liabilities of about $13.15 million.
A sister company, Southland 75 LLC, which owns a strip shopping
center, sought bankruptcy protection (Bankr. S.D. Ohio Case No.
13-34100) on the same day. Southland 75 listed assets of $8.09
million and liabilities of $5.62 million. The Hon. Judge Lawrence
S. Walter presides over the cases. Attorneys at Pickrel,
Schaeffer, and Ebeling, in Dayton, Ohio, represent the Debtors as
counsel. The petitions were signed by Michael D. Lofino, managing
member.
The Debtors have been operating under state court receiverships
since May 2013. On Oct. 17, 2013, the Bankruptcy Court entered an
order denying the motion of the Debtors for the joint
administration of their cases.
On Dec. 6. 2013, Henry E. Menninger, Jr. accepted the position of
Chapter 11 trustee in the Lofino Properties case. Raymond J.
Pikna, Jr., Esq. -- rjpikna@woodlamping.com -- of Wood & Lamping
LLP serves as counsel to the Ch. 11 trustee. Mr. Menninger is a
partner at Wood & Lamping.
LOFINO PROPERTIES: Taps Paul Shaneyfelt as Counsel
--------------------------------------------------
Lofino Properties LLC asks the U.S. Bankruptcy Court for the
Southern District of Ohio for permission to employ Paul H.
Shaneyfelt, Esq., at Shaneyfelt & Associates LLC, as its attorney.
The Debtor states that the employment of Mr. Shaneyfelt as counsel
is necessary to perform the legal services normally associated
with the reorganization process, including, but not limited to,
providing legal representation at all hearings, negotiating with
creditors or claimants, and formulating a plan of reorganization
and disclosure statement in conformity with the requirements of
the Bankruptcy Code.
The Debtor tells the Court that Mr. Shaneyfelt charges $250 per
hour, and paralegals charge between $110 and $145 per hour.
The Debtor assures the Court that Mr. Shaneyfelt is a
"disinterested person" within the meaning of the Bankruptcy Code.
About Lofino Properties & Southland 75
Dayton, Ohio-based Lofino Properties, LLC, which owns retail
stores, sought bankruptcy protection (Bankr. S.D. Ohio Case No.
13-34099) on Oct. 4, 2013. Lofino Properties listed assets of
$19.91 million and liabilities of about $13.15 million.
A sister company, Southland 75 LLC, which owns a strip shopping
center, sought bankruptcy protection (Bankr. S.D. Ohio Case No.
13-34100) on the same day. Southland 75 listed assets of $8.09
million and liabilities of $5.62 million.
The Hon. Judge Lawrence S. Walter presides over the cases.
Attorneys at Pickrel, Schaeffer, and Ebeling, in Dayton, Ohio,
represent the Debtors as counsel. The petitions were signed by
Michael D. Lofino, managing member.
The Debtors have been operating under state court receiverships
since May 2013. On Oct. 17, 2013, the Bankruptcy Court entered an
order denying the Debtors' motion for joint administration of
their cases.
LONESTAR INTERMEDIATE: S&P Lowers Counterparty Rating to 'B'
------------------------------------------------------------
Standard & Poor's Ratings Services said that it lowered its long-
term counterparty credit ratings on Lonestar Intermediate Super
Holdings LLC (Lonestar, a wholly owned subsidiary of NEWAsurion
Corp.) and Asurion LLC to 'B' from 'B+'. S&P also lowered its
rating on Asurion's first-lien debt to 'B' from 'B+'. The outlook
is stable.
At the same time, S&P assigned its 'B' issue-level rating and '3'
recovery rating to Asurion's proposed $550 million incremental
senior secured first-lien term loans, indicating its expectation
for meaningful (50%-70%) recovery for lenders in the event of a
payment default. S&P also assigned its 'CCC+' issue-level rating
and '6' recovery rating to the company's proposed $1.7 billion
second-lien term loan, indicating S&P's expectation of negligible
(0%-10%) recovery for lenders in the event of a payment default.
S&P expects NEWAsurion to use $2.25 billion of the proceeds to
refinance its existing senior unsecured term loan and for
shareholder distribution.
At the same time S&P is withdrawing its rating on Lonestar's
unsecured term loan, as it has been refinanced.
"The rating action reflects our opinion that NEWAsurion could
increase its debt usage and that its future financial policy may
be somewhat more aggressive," said Standard & Poor's credit
analyst Polina Chernyak. Other than refinancing the existing
holding company unsecured term loan, S&P expects NEWAsurion to pay
most of the remaining proceeds as a dividend to its owners.
The 'B' counterparty credit ratings on Lonestar and Asurion
reflect NEWAsurion's significant leverage and fluctuating credit
metrics, which feature a highly leveraged balance sheet that,
along with the company's financial management strategy, S&P
regards as a ratings weakness. NEWAsurion's dependence on new
subscribers and contract renewals could challenge the
sustainability of its leading competitive position. Its operating
performance-- a key ratings strength--and its leading competitive
position and cash-generating capabilities (as measured by revenue
and EBITDA) support the company's deleveraging capabilities and
offset these weaknesses.
The stable outlook reflects S&P's view that NEWAsurion will
continue to generate solid cash flow and will be able to service
its debt adequately. S&P believes the company's cash-flow
generating ability and EBITDA growth are largely a result of its
successful international expansion, strong attachment rates, and
solid competitive position in the handset protection and extended
service warranty market, as well as the value it offers to its
clients and customers. S&P believes these factors will enable the
company to sustain favorable operating performance.
The stable outlook also reflects S&P's expectation that handset
protection coverage will remain a growing business for NEWAsurion.
S&P believes its solid client relationships will enable it to
generate cash flow that supports the current rating for the next
12 months. S&P believes the company will continue to expand its
products and services successfully globally and gain additional
market share through expansion.
S&P expects projected cash flows to support the rating and allow
the company to maintain adequate debt servicing for the current
rating. The outlook also incorporates S&P's belief that the
company's credit metrics could be pressured by its financial
management strategy, which S&P considers to be a ratings weakness.
S&P would consider negative rating action during the next 12
months if the company cannot maintain its current operating
performance, debt leverage, and EBITDA coverage that are
appropriate for the rating level. Possible downside scenarios
could include general business deterioration, such as the loss of
one or two of its top clients, or more aggressive financial policy
in the form of a substantial dividend recapitalization or a large,
debt-funded acquisition. (S&P would consider a downgrade if
leverage increases to 8x or more, or EBITDA interest coverage
decreases to 2.0x or lower on a sustained basis).
It's unlikely that S&P would raise the rating in the next 12
months because of financial profile constraints.
LPATH INC: Franklin Resources Stake at 6.7% as of Dec. 31
---------------------------------------------------------
Franklin Resources, Inc., and its affiliates disclosed in a
Schedule 13G filed with the U.S. Securities and Exchange
Commission that as of Dec. 31, 2013, they beneficially owned
877,700 shares of common stock of LPath, Inc., representing 6.7
percent of the shares outstanding. A copy of the regulatory
filing is available for free at http://is.gd/YvRsqk
About Lpath, Inc.
San Diego, Calif.-based Lpath, Inc. is a biotechnology company
focused on the discovery and development of lipidomic-based
therapeutics, an emerging field of medical science whereby
bioactive lipids are targeted to treat human diseases.
For the nine months ended Sept. 30, 2013, the Company reported a
net loss of $5.16 million. Lpath disclosed a net loss of $2.75
million in 2012, as compared with a net loss of $3.11 million in
2011.
The Company's balance sheet at Sept. 30, 2013, the Company had
$17.96 million in total assets, $7.61 million in total assets,
$10.35 million in total stockholders' equity.
M LINE HOLDINGS: Reports $269-K Net Income in Dec. 31 Quarter
-------------------------------------------------------------
M Line Holdings, Inc., filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q, disclosing net
income of $269,171 on $3.31 million of net sales for the three
months ended Dec. 31, 2013, compared with a net loss of $400,125
on $2.44 million of net sales for the same period in 2012.
The Company's balance sheet at Dec. 31, 2013, showed $3.84 million
in total assets, $6.88 million in total liabilities, and a
stockholders' deficit of $3.04 million.
As of Dec. 31, 2013, the Company has a negative working capital
and an accumulated deficit of $14.07 million.
A copy of the Form 10-Q is available at:
http://is.gd/gwVHrr
About M Line Holdings
Tustin, Calif.-based M Line Holdings, Inc., provides services and
products to the machine tool industry, including the sale of new
and refurbished pre-owned computer numerically controlled (CNC)
machines and the manufacture of precision metal components.
* * *
Following the company's results for the fiscal year ended June 30,
2013, MaloneBailey, LLP, expressed substantial doubt about the
Company's ability to continue as a going concern, citing that the
Company has suffered recurring losses from operations and negative
cash flows from operations.
The Company reported a net loss of $4.39 million on $9.32 million
of net sales for the year ended June 30, 2013, compared with a net
loss of $768,242 on $10.18 million in fiscal 2012.
MASCO CORP: Fitch Affirms 'BB' IDR, Outlook Revised to Positive
---------------------------------------------------------------
Fitch Ratings has affirmed the ratings of Masco Corporation (NYSE:
MAS), including the company's Issuer Default Rating (IDR), at
'BB'. The Rating Outlook has been revised to Positive from
Stable.
Key Rating Drivers
The rating for Masco reflects the company's leading market
position with strong brand recognition in its various business
segments, the breadth of its product offerings, and solid
liquidity position. Risk factors include sensitivity to general
economic trends, as well as the cyclicality of the residential
construction market.
The company's credit metrics have improved significantly from the
lows reported during fiscal 2011. Leverage as measured by debt to
EBITDA declined from 6.9x at year-end 2011 to 5.1x at the end of
2012 and 3.5x at the conclusion of 2013. Similarly, interest
coverage increased from 2.3x in 2011 to 2.8x in 2012 and 4.1x in
2013.
The Positive Outlook reflects Fitch's expectation that Masco will
continue to improve its financial and credit metrics this year.
In particular, Fitch expects leverage will be roughly 3x and
interest coverage will be approximately 5x during 2014. The
company's IDR may be upgraded to 'BB+' during the next six to 12
months if the company's leverage is sustained in the 3.0x-3.5x
range, interest coverage is consistently above 4.5x, and free cash
flow (FCF) margin above 2.5%.
Expected Continued Improvement in Masco's U.S. End-Markets
Masco markets its products primarily to the residential
construction sector. Management estimates that 72% of its 2013
sales were directed to the repair and remodel segment, with the
remaining 28% to the new construction market. Revenues in North
America accounted for about 81% of 2013 worldwide sales.
Housing metrics all showed improvement in 2013. Preliminary data
show that total housing starts increased 18.3%. Existing home
sales gained 9.2% to 5.09 million in 2013, while new home sales
grew 16.6% to 428,000. Average single-family new home prices,
which dropped 1.8% in 2011, increased 8.7% in 2012 and rose 9.8%
to $320,900 in 2013. Median home prices expanded 2.4% in 2011 and
then grew 7.9% in 2012 and expanded 8.4% to $265,800 last year.
Housing metrics should increase in 2014 due to faster economic
growth (prompted by improved household net worth, industrial
production and consumer spending), and consequently some
acceleration in job growth (as unemployment rates decrease to 6.9%
for 2014 from an average of 7.5% in 2013), despite somewhat higher
interest rates, as well as more measured home price inflation.
Total housing starts should increase 16.5% and top 1 million. New
home sales are forecast to advance about 20%, while existing home
volume increases 2%.
Fitch projects home improvement spending will advance 6% in 2014
following an estimated 5% growth in 2013 and a 5% increase in
2012. The continued improvement in the housing market, as well as
strong home price appreciation seen last year, are likely to drive
higher spending on home renovation projects in 2014. However,
growth patterns in the near term are likely to be slightly below
what the industry experienced during 1999-2006 (7% average annual
spending growth), due to slower growth in the U.S. economy and
only moderately improved housing market conditions.
Fitch expects spending for discretionary big-ticket remodeling
projects will continue to lag the overall growth in the home
improvement sector somewhat, as credit availability remains
relatively constrained and homeowners remain cautious in their
spending. However, there are signs that homeowners are somewhat
more willing to undertake larger discretionary projects and
purchases.
Broad Product Portfolio
Masco is one of the world's leading manufacturers of home
improvement and building products, which include brand names such
as Delta and Hansgrohe, Kraftmaid and Merillat cabinets, Behr and
Kilz paint, and Milgard windows. This broad product portfolio is
supplemented by the company's installation services operations,
which includes the sale, distribution and installation of building
products such as insulation, roofing and gutters, garage doors and
fireplaces.
Solid Liquidity Position
The company continues to have solid liquidity, with cash and
equivalents of $1.5 billion and about $1.16 billion of
availability under its $1.25 billion revolving credit facility
that matures in 2018. Fitch expects Masco will have cash in
excess of $1 billion during 2014 and will continue to have access
to its revolver as the company has sufficient room under the
facility's financial covenants. Based on the revolver's leverage
ratio, as of Dec. 31, 2013, the company had additional borrowing
capacity (subject to availability) of up to $1.2 billion.
Additionally, Masco could absorb a reduction to shareholder's
equity of approximately $770 million and remain in compliance with
the facility's leverage ratio.
The company reduced debt by $200 million during 2013 and has no
major debt maturities until 2015 and 2016, when $500 million and
$1 billion of senior notes mature, respectively. Fitch expects
the company will refinance $1 billion-$1.2 billion of these future
debt maturities, thus reducing overall debt by $300 million to
$500 million by 2016.
Free Cash Flow Generation
Masco reported stronger FCF (cash flow from operations less
capital expenditures and dividends) during 2013, generating $412
million of FCF (5% of sales) compared with FCF of $55 million
(0.7%) during 2012 and negative $19 million during 2011. The
company has historically reported strong FCF, generating in excess
of $5.7 billion during the 2000-2010 period (approximately 5.2% of
total revenues during the time period). Fitch currently expects
Masco will generate FCF of approximately 2.5% - 3.5% of revenues
during the next few years. The lower FCF margin is due in part to
higher CAPEX projected in the coming years.
Balance Sheet Improvement
Free Cash Flow Generation
The company has taken steps to improve its balance sheet. Masco
has reduced debt by $600 million since year-end 2011. As
mentioned earlier, debt to EBITDA declined from 6.9x at year-end
2011 to 5.1x at the end of 2012 and 3.5x at the conclusion of
2013. The company intends to further reduce debt by $300 million-
$500 million by 2016. Management has indicated that it is
committed to an investment grade rating and will continue to focus
on strengthening the company's balance sheet.
Management Discipline
Masco was an aggressive purchaser of its stock from 2003-2007,
spending roughly $1.2 billion annually, on average, in share
repurchases and dividends during this period. The company has not
repurchased stock since July 2008 and has put its share repurchase
program on hold, except for share repurchases to offset the
dilutive effect of stock grants. In 2009, Masco also reduced its
quarterly dividend from $.235 per common share ($.94 annually) to
$0.075 per share ($0.30 annually), saving approximately $225
million per year.
Management indicates that investing in the business remains a top
priority for the company, with CAPEX totaling about 2%-2.5% of
revenues during the next few years. The company also intends to
pay down debt in the near term. In addition to these activities,
the company is focused on small bolt-on acquisitions. At some
point, Fitch expects Masco will start undertaking shareholder
friendly activities. Currently, management indicates that
increasing the dividend, rather than share repurchases, may be
what the board will first consider when it starts to evaluate
returning cash to shareholders.
Fitch does not anticipate changes in management's strategy
(including management's commitment to an investment grade rating)
with the retirement of Timothy Wadhams as Masco's President and
CEO and the appointment of Keith Allman to these positions.
Rating Sensitivities
Future ratings and Outlooks will be influenced by broad end-market
trends, as well as company specific activity, particularly FCF
trends and uses, and liquidity position.
An upgrade of the ratings to 'BB+' may be considered if the
housing and home improvement markets continue to rebound and the
company shows sustained improvement in financial results and
credit metrics, including debt to EBITDA levels in the 3.0x-3.5x
range, interest coverage that is consistently above 4.5x, and FCF
margins above 2.5%.
On the other hand, a negative rating action may be considered if
the recovery in the U.S. housing and home improvement markets
dissipate, leading to weaker than expected credit metrics,
including EBITDA margins below 10%, debt to EBITDA levels
consistently above 6x and interest coverage falls below 2.5x.
Fitch has affirmed the following ratings for Masco with a Positive
Outlook:
-- IDR at 'BB';
-- Senior unsecured debt at 'BB';
-- Unsecured revolving credit facility at 'BB'.
MISSION NEW ENERGY: SLW Int'l Stake at 3.3% as of Feb. 3
--------------------------------------------------------
In an amended Schedule 13D filed with the U.S. Securities and
Exchange Commission, SLW International, LLC, and Stephen L. Way
disclosed that as of Feb. 3, 2014, they beneficially owned 362,540
ordinary shares of Mission NewEnergy Limited representing 3.30
percent of the issued and outstanding ordinary shares. The
percentage is based upon 10,980,620 ordinary shares outstanding,
which is the sum of (i) 10,870,275 Ordinary Shares issued and
outstanding as reported by the company in its Form 6-K, filed Oct.
28, 2013, plus (ii) 110,345 Ordinary Shares that would be issuable
to Mr. Way upon exercise of the warrants.
A copy of the regulatory filing is available for free at:
http://is.gd/cJCMiP
About Mission NewEnergy
Based in Subiaco, Western Australia, Mission NewEnergy Limited is
a producer of biodiesel that integrates sustainable biodiesel
feedstock cultivation, biodiesel production and wholesale
biodiesel distribution focused on the government mandated markets
of the United States and Europe.
The Company is not operating its biodiesel refining segment. The
refineries are being held in care and maintenance either awaiting
a return to positive operating conditions or the sale of assets.
The Company has materially diminished its Jatropha contract
farming operation and the company is now focused on divesting the
remaining Indian assets. The Company intends to cease all Indian
operations.
Mission NewEnergy disclosed net profit of A$10.05 million on
A$8.41 million of total revenue for the year ended June 30, 2013,
as compared with a net loss of A$6.19 million on A$38.20 million
of total revenue during the prior fiscal year.
The Company's balance sheet at June 30, 2013, showed A$20.10
million in total assets, A$32.60 million in total liabilities and
a A$12.50 million total deficiency.
BDO Audit (WA) Pty Ltd, in Perth, Western Australia, issued a
"going concern" qualification on the consolidated financial
statements for the year ended June 30, 2013. The independent
auditors noted that the Company incurred operating cash outflows
of $3.7 million during the year ended 30 June 2013 and, as of that
date the consolidated entity's total liability exceeded its total
assets by $12.5 million. These conditions, along with other
matters, raise substantial doubt the Company's ability to continue
as a going concern.
MISSION NEW ENERGY: Westcliff No Longer Owns Ordinary Shares
------------------------------------------------------------
Westcliff Trust disclosed in an amended Schedule 13D filed with
the U.S. Securities and Exchange Commission that as of Feb. 3,
2014, it did not beneficially own ordinary shares of Mission
NewEnergy Limited.
On Aug. 24, 2012, the Trust purchased 63,238 of the Issuer's A$65
face-value Series 2 Convertible Notes, which bore interest at a
rate of 4.00 percent per annum, payable semi-annually, and had a
conversion ratio of one note to four Ordinary Shares, resulting in
a conversion price of A$16.50 per share (the "Series 2 Notes"),
from SLW International, LLC, an entity owned by Stephen L. Way,
the creator of the Trust for the benefit of his minor children.
The Trust purchased those Series 2 Notes for the purchase price of
$402,187, 10 percent of which was paid in cash with funds
contributed to the Trust by Mr. Way and the remaining 90 percent
of which was borrowed by the Trust from Muragai Financial, LLC, an
entity also controlled by Mr. Way. That loan was evidenced by a
promissory note bearing interest at the rate of 0.25 percent and
becoming due on Aug. 1, 2015, and was secured by such Series 2
Notes held by the Trust.
On Nov. 23, 2012, the Issuer and the holders of the Series 2 Notes
effected an exchange of all outstanding Series 2 Notes for newly
issued Series 3 Convertible Notes of the Issuer with a face value
of A$65, which bear no coupon/interest payments and have a
conversion ratio of one note to 433 Ordinary Shares, resulting in
a conversion price of A$0.15 per share (the "Series 3 Notes"), in
a transaction approved by the holders of the Issuer's Ordinary
Shares. As a result of this exchange, the Trust received 63,238
Series 3 Notes.
On Dec. 20, 2013, the Trust, SLW International, LLC, and Eastwood
Trust entered into a Note Purchase Agreement with Noble Haus Asia
Ltd. pursuant to which the Trust agreed to dispose of all of its
Series 3 Notes to Noble Haus. That transaction was consummated on
Feb. 3, 2014.
A copy of the regulatory filing is available for free at:
http://is.gd/vk5Iix
About Mission NewEnergy
Based in Subiaco, Western Australia, Mission NewEnergy Limited is
a producer of biodiesel that integrates sustainable biodiesel
feedstock cultivation, biodiesel production and wholesale
biodiesel distribution focused on the government mandated markets
of the United States and Europe.
The Company is not operating its biodiesel refining segment. The
refineries are being held in care and maintenance either awaiting
a return to positive operating conditions or the sale of assets.
The Company has materially diminished its Jatropha contract
farming operation and the company is now focused on divesting the
remaining Indian assets. The Company intends to cease all Indian
operations.
Mission NewEnergy disclosed net profit of A$10.05 million on
A$8.41 million of total revenue for the year ended June 30, 2013,
as compared with a net loss of A$6.19 million on A$38.20 million
of total revenue during the prior fiscal year.
The Company's balance sheet at June 30, 2013, showed A$20.10
million in total assets, A$32.60 million in total liabilities and
a A$12.50 million total deficiency.
BDO Audit (WA) Pty Ltd, in Perth, Western Australia, issued a
"going concern" qualification on the consolidated financial
statements for the year ended June 30, 2013. The independent
auditors noted that the Company incurred operating cash outflows
of $3.7 million during the year ended 30 June 2013 and, as of that
date the consolidated entity's total liability exceeded its total
assets by $12.5 million. These conditions, along with other
matters, raise substantial doubt the Company's ability to continue
as a going concern.
MMODAL INC: S&P Lowers CCR to 'D' on Missed Interest Payment
------------------------------------------------------------
Standard & Poor's Ratings Services said it lowered its corporate
credit rating on Franklin, Tenn.-based MModal Inc. to 'D' from
'B-'. S&P also lowered the ratings on the company's $250 million
unsecured notes due 2020 to 'D' from 'CCC'. The recovery rating
for these notes remains '6', indicating S&P's expectation for
negligible (0%-10%) recovery in the event of a payment default.
At the same time, S&P lowered the ratings on the company's
$520 million senior secured credit facilities, which consist of a
$75 million revolving credit facility due 2017 and a $445 million
term loan due 2019, to 'CC' from 'B'. The recovery rating remains
'2', indicating S&P's expectations for substantial (70%-90%)
recovery in the event of a payment default.
"The downgrade reflects Standard & Poor's view that the missed
interest payment on the unsecured notes, due Feb. 18, 2014,
constitutes a default under our criteria," said Standard & Poor's
credit analyst David Tsui.
The company reported that it is currently engaged in discussions
with certain of its lenders and bondholders to reduce its debt and
has taken advantage of the interest payment's 30-day grace period
to continue those discussions. S&P expects that the company may
restructure its debt given its highly leveraged capital structure.
Despite the ongoing discussions with lenders and bondholders, and
the company's statement that it has not made any determination to
not pay the interest payment within the 30-day grace period, S&P
is uncertain whether the company will ultimately pay the interest
payment on the unsecured debt within the 30-day grace period. If
MModal chooses to make the interest payment within the 30-day
grace period, or upon completion of a debt restructuring, S&P
would review and raise the rating.
MONTREAL MAINE: Wheeling Railway Claims Stake in Receivables
------------------------------------------------------------
Wheeling & Lake Erie Railway Company asks the U.S. Bankruptcy
Court for the District of Maine to direct Robert J. Keach, the
Chapter 11 trustee for Montreal Maine & Atlantic Railway, Ltd.,
to, among other things:
a. pay to Wheeling the proceeds of all accounts receivable
generated before Oct. 18, 2013, the date of the closing of
the loan facility provided to the trustee by Camden National
Bank;
b. provide a complete accounting of all collections of accounts
receivable received by the Debtor and expended by the
Debtor;
c. provide a complete accounting of all accounts receivable
generated by the Debtor after the Petition Date, and not
heretofore collected, which accounts receivable serve as
adequate protection for the Debtor's use of Wheeling's cash
collateral; and
d. provide Wheeling with additional adequate protection to
the extent that said accounting requires the same.
Whelling explains that:
(i) the Canadian receivables are Wheeling's collateral and are
governed by the terms of the sixth cash collateral order,
issued by the U.S. Bankruptcy Court on Oct. 11, 2013; and
(ii) Wheeling is entitled to additional adequate protection for
the prepetition Canadian receivables, any postpetition
Canadian receivables, and any other cash collateral
utilized by the debtor and the trustee since the petition
date.
Wheeling said that, as of the Petition Date, the Debtor owed it in
the principal amount of $6,000,000, plus interest, fees, costs of
collection and other applicable charges.
About Montreal Maine
Montreal, Maine & Atlantic Railway Ltd., the railway company that
operated the train that derailed and exploded in July 2013,
killing 47 people and destroying part of Lac-Megantic, Quebec,
sought bankruptcy protection in U.S. Bankruptcy Court in Bangor,
Maine (Case No. 13-10670) on Aug. 7, 2013, with the aim of selling
its business. Its Canadian counterpart, Montreal, Maine &
Atlantic Canada Co., meanwhile, filed for protection from
creditors in Superior Court of Quebec in Montreal.
Robert J. Keach, Esq., at Bernstein, Shur, Sawyer, and Nelson,
P.A., has been named as chapter 11 trustee. His firm serves as
his chapter 11 bankruptcy counsel, led by Michael A. Fagone, Esq.
Development Specialists, Inc., serves as the Chapter 11 trustee's
financial advisor. Gordian Group, LLC, serves as the Chapter 11
Trustee's investment banker.
U.S. Bankruptcy Judge Louis H. Kornreich has been assigned to the
U.S. case. The Maine law firm of Verrill Dana served as counsel
to MM&A. It now serves as counsel to the Chapter 11 Trustee.
Justice Martin Castonguay oversees the case in Canada.
The Canadian Transportation Agency suspended the carrier's
operating certificate after the accident, due to insufficient
liability coverage.
The town of Lac-Megantic, Quebec, has sought financial aid to
restore the gutted community and a civil complaint alleges a
failure to take steps to prevent a derailment.
In the Canadian case, Andrew Adessky at Richter Consulting has
been appointed CCAA monitor. The CCAA Monitor is represented by
Sylvain Vauclair at Woods LLP.
MM&A Canada is represented by Patrice Benoit, Esq., at Gowling
LaFleur Henderson LLP.
The U.S. Trustee appointed a four-member official committee of
derailment victims. The Official Committee is represented by:
Richard P. Olson, Esq., at Perkins Olson; and Luc A. Despins,
Esq., at Paul Hastings LLP.
There's also an unofficial committee of wrongful death claimants
consisting of representatives of the estates of the 46 victims.
This group is represented by George W. Kurr, Jr., Esq., at Gross,
Minsky & Mogul, P.A.; Daniel C. Cohn, Esq., at Murtha Cullina LLP;
Peter J. Flowers, Esq., at Meyers & Flowers, LLC; Jason C.
Webster, Esq., at The Webster Law Firm; and Mitchell A. Toups,
Esq., at Weller, Green Toups & Terrell LLP.
After the U.S. Trustee formed the Official Committee, the ad hoc
committee filed papers asking the U.S. Court to have the official
committee disbanded. The ad hoc group said it represents 46
victims of the disaster.
On Jan. 23, 2014, the Debtors won authorization to sell
substantially all of their assets to Railroad Acquisition Holdings
LLC, an affiliate of New York-based Fortress Investment Group, for
$15.7 million. The Bankruptcy Courts in the U.S. and Canada
approved the sale.
The Fortress unit is represented by Terence M. Hynes, Esq., and
Jeffrey C. Steen, Esq., at Sidley Austin LLP.
On Jan. 29, 2014, an ad hoc group of wrongful-death claimants
submitted a plan, which would give 75 percent of the $25 million
in available insurance to the families of those who died after an
unattended train derailed in Lac-Megantic, Quebec, in July. The
other 25 percent would be earmarked for claimants seeking
compensation for property that was damaged when much of the town
burned. Former U.S. Senator George Mitchell, a Democrat who
represented Maine in the U.S. Senate from 1980 to 1995 and who is
now chairman emeritus of law firm DLA Piper LLP, would administer
the plan and lead the effort to wrap up MM&A's Chapter 11
bankruptcy.
NASSAU TOWER: Feb. 24 Hearing on 472 Princeton Ave. Property Sale
-----------------------------------------------------------------
The Hon. Michael B. Kaplan of the U.S. Bankruptcy Court for the
District of New Jersey will convene a hearing on Feb. 24, 2014, at
10:00 a.m. to consider Nassau Tower Realty, LLC's motion for
authorization to sell its real estate located at 472 Princeton
Avenue, Brick, New Jersey.
According to a certification by Luois Mercatanti, an officer in
Nassau Holdings Inc., Santander Bank, NA, formerly known as
Sovereign Bank, N.A., is a secured creditor with a claim of
approximately $2.8 million with mortgages against several, but not
all, of the Debtor's real estate holdings.
The total value of the Debtors' real estate holdings is
approximately $11 million. The proposed sale is for a minor
portion of the Debtors' holdings, approximately four percent of
the total value, but not substantially all of its assets.
In a separate filing, the Court authorized the Debtor to sell a
parcel of real estate located at 2457 Perkiomen Avenue, Reading,
Pennsylvania. The Debtor is authorized to sell the property free
and clear of all liens, claims, judgments and interests, which may
appear of record at the time of closing, including but not limited
to the mortgage of TD Bank.
The Debtor is also authorized to pay from the closing proceeds
attorney's fees of $1,500 to Timothy Smith, Esq., for services
rendered as to the sale of property.
All sale proceeds, net of other payables will be paid to TD Bank
on account of its mortgage.
About Nassau Tower
Princeton, N.J.-based Nassau Tower Realty, LLC, filed for
Chapter 11 relief on (Bankr. D. N.J. Case No. 13-24984) on July 9,
2013. The Hon. Judge Michael B. Kaplan presides over the case.
Paul Maselli, Esq., and Kimberly Pelkey Sdeo, Esq., at Maselli
Warren, P.C., represent the Debtor as counsel. The Debtor
estimated assets of $10 million to $50 million and debts of
$10 million to $50 million.
The Debtor is the owner of 17 parcels of real estate. It owns
13 parcels in New Jersey, 3 parcels in Pennsylvania, one parcel in
Maine. Most of the properties generate income in the form of
rents paid by tenants.
The petition was signed by Louis Mercatanti, officer of Nassau
Holdings, Inc.
The Debtor filed a Plan of Reorganization dated Sept. 27, 2013,
that allows the Debtor to reorganize by continuing to operate, to
liquidate by selling assets of the estate, or a combination of
both.
NATIVE WHOLESALE: Webster Szanyi to Handle Supreme Court Appeal
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of New York
authorized Native Wholesale Supply Company to expand the scope of
employment of Webster Szanyi as special counsel in connection with
the preparation of a Petition for Certiorari to the United States
Supreme Court in connection with a decision of a Supreme Court of
the State of Idaho and all related subsequent proceedings.
The Debtor requested that the Court approve the hourly rates, and
grant authorization to the Debtor and its attorneys to submit an
application for payment of Webster Szanyi's fees and accrued
expenses -- as was allowed in its original employment application
-- namely every 60 days.
Kevin A. Szanyi, Esq., a partner at the firm, assured the Court
that the firm is a "disinterested person" as that term is defined
in Section 101(14) of the Bankruptcy Code.
As reported in the Troubled Company Reporter on May 30, 2013, the
Debtor is a defendant in a complaint filed by the State of New
York in the U.S. District Court for the Eastern District of New
York. The Debtor agreed to advance Webster Szanyi a $50,000
retainer for its work in connection with the New York Action.
To the best of the Debtor's knowledge, Webster Szanyi does not
have any connection with the Debtor, its creditors, or any party-
in-interest, or its respective attorneys.
About Native Wholesale Supply Company
Native Wholesale Supply Company is engaged in the business of
importing cigarettes and other tobacco products from Canada and
selling them to third parties within the United States. It
purchases the products from Grand River Enterprises Six Nations,
Ltd., a Canadian corporation and the Debtor's only secured
creditor. Native is an entity organized under the Sac and Fox
Nation and has its principal place of business at 10955 Logan Road
in Perrysburg, New York.
Native filed for Chapter 11 bankruptcy (Bankr. W.D.N.Y. Case No.
11-14009) on Nov. 21, 2011. The Chapter 11 filing was triggered
to resolve an ongoing dispute with the United States government
regarding up to $43 million in assessments made by the government
against the Debtor pursuant to the Fair and Equitable Tobacco
Reform Act of 2004 and the Tobacco Transition Payment Program and
to restructure the terms of payment of any obligation determined
to be owing by the Debtor to the U.S. under the Disputed
Assessment. The issues pertaining to the Disputed Assessment
resulted in two lawsuits, subsequently consolidated, now pending
in the Federal District Court.
Robert J. Feldman, Esq., and Janet G. Burhyte, Esq., at Gross,
Shuman, Brizdle & Gilfillan, P.C., in Buffalo, N.Y., represent the
Debtor as counsel.
The Company disclosed $30,022,315 in assets and $70,590,564 in
liabilities as of the Chapter 11 filing.
The States of California, New Mexico, Oklahoma and Idaho have
appeared in the case and are represented by Garry M. Graber, Esq.,
and Craig T. Lutterbein, Esq., at Hodgson Russ LLP, in Buffalo,
New York, and Karen Cordry, Esq., National Association of
Attorneys General, in Washington, D.C.
No trustee, examiner or creditors' committee has been appointed in
the case.
OVERSEAS SHIPHOLDING: Mullin May File Fee Application Under Seal
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware, in a
supplemental order, authorized Overseas Shipholding Group, Inc.,
et al., to employ Mullin Hoard & Brown, L.L.P., under a hybrid
contingency fee agreement to prosecute professional liability
claims.
The Court also authorized Mullin Hoard to file related fee
applications under seal.
AS reported in the Troubled Company Reporter on Oct. 21, 2013,
Mullin Hoard served as the Debtors' special litigation counsel,
under a hybrid contingency fee agreement, for services to be
performed in connection with the prosecution of professional
liability and other claims against the Company's former external
counsel in connection with services they provided OSG prior to the
filing of its Chapter 11 bankruptcy proceeding.
The Debtors initially retained MHB on an hourly fee basis to
investigate professional liability claims against third party
professionals that provided pre-petition services to OSG. The
original investigation engagement agreement specifically
contemplated that a new engagement agreement would be entered into
if the Debtors decided to retain MHB to pursue litigation with
respect to any potential liability claims. Now that MHB's
investigation of the Professional Liability Claims is
substantially complete, the Debtors have determined that it
would be in the best interests of the estates to retain MHB to
prosecute the Professional Liability Claims on behalf of the
Company on a capped, hybrid contingency fee basis. MHB continues
to investigate third party claims against other professionals.
The Debtors submit that the Hybrid Fee Agreement is reasonable in
light of the potential costs of prosecuting the Professional
Liability Claims and the risks of litigation.
The Debtors assure the Court that none of MHB's partners, counsel,
or associates hold or represent any interest adverse to the
estates or their creditors, and MHB is a "disinterested person" as
defined in Section 101(4) of the Bankruptcy Code.
The application is signed by John J. Ray, III, the Debtors' chief
reorganization officer.
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.
The Debtors disclosed that they entered into one of five "stalking
horse" asset sale agreements with Shipco 1, L.L.C., Shipco 2,
L.L.C., Shipco 3, L.L.C., Shipco 4, L.L.C. and Shipco 5, L.L.C,
respectively, for the sale of certain of the Debtor Sellers'
assets, including five vessels that are collateral for secured
financing provided by the Export-Import Bank of China for a total
cash purchase price of $255 million.
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.
PAYLESS INC: Moody's Rates 1st Lien Loan B1 & 2nd Lien Loan B3
--------------------------------------------------------------
Moody's Investors Service assigned a B1 rating to Payless Inc.'s
proposed $520 million 1st lien term loan, and a B3 to its proposed
$145 million 2nd lien term loan. The Corporate Family Rating was
affirmed at B2, the Probability of Default Rating was affirmed at
B2-PD, and the ratings outlook remains negative.
Proceeds from the transaction are expected to be used primarily to
fund an approximately $126 million dividend to the company's
financial sponsor owners, which follows a $225 million dividend
paid in April 2013. Following this transaction, ownership will
have extracted approximately 130% of its initial equity investment
since Payless' purchase in September 2012.
Ratings Assigned:
$520 million 1st Lien Term Loan at B1/LGD3-42%
$145 million 2nd Lien Term Loan at B3/LGD5-72%
Ratings Affirmed:
Corporate Family Rating at B2
Probability of Default Rating at B2-PD
Rating Affirmed and to be withdrawn upon closing of the
refinancing:
$480 million term loan at B2/LGD3-44%
Ratings Rationale
"This latest dividend, which represents a heightening of the
company's sponsor-driven aggressive financial policy, will push
the company's financial flexibility to the limit of its B2
rating," stated Moody's Vice President Charlie O'Shea. "Since the
closing of the going-private transaction, the company will have
returned approximately $350 million to its sponsors, well in
excess of the original equity capitalization of the company.
Proforma for the proposed dividend, the increased debt load will
push debt/EBITDA above 6.5 times and lower EBITA/interest to
around 1.3 times, resulting in a quantitative credit profile that
remains weak for the B2 rating level. As a result, any additional
equity extractions in the near future would almost certainly
result in a downgrade."
Payless' B2 Corporate Family Rating acknowledges its weak
quantitative credit profile that results from its highly-
aggressive financial policy, which is the primary rating factor.
Positive rating factors include the company's good liquidity
profile, its meaningful international presence, and its solid
brand equity and competitive position. In addition, Moody's
believes that the company's operating performance has stabilized
and will continue to show sequential improvement over the next 12-
18 months.
The ratings on the proposed new term loans result from the
application of Moody's Loss Given Default Methodology, as well as
their respective positions in the capital structure. The B1 rating
on the proposed $520 million 1st lien term loan recognizes its
senior position in the capital structure, which benefits from the
increased cushion provided by the proposed $145 million 2nd lien
term loan, which is rated B3. The introduction of this junior debt
at proposed levels is the primary driver of the B1 rating assigned
to the 1st lien debt.
The negative outlook considers the potential risks to the rating
of the company's aggressive financial policy, with any further
dividends or other extractions of equity above the proposed $125
million almost certain to result in an immediate ratings
downgrade.
Ratings could be downgraded if financial policy continues its
currently aggressive tone or operating performance were such that
debt protection measures were expected to deteriorate from current
levels, or if liquidity were to weaken. Quantitatively, an
expectation of debt/EBITDA above 6.5 times and EBITA/Interest
expense below 1.25 times would lead to a ratings downgrade.
The outlook could revert to stable if both operating performance
and financial policies were such that debt protection measures are
at least maintained at current levels. A ratings upgrade is
unlikely given the aggressiveness of financial policies, as
ownership has demonstrated a willingness to manage Payless'
capital structure in a way that results in debt protection
measures that are more indicative of a Caa company. Quantitatively
ratings could be upgraded if EBITA/interest expense is sustained
above 1.75 times, and debt / EBITDA is sustained below 5.25 times.
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.
PAYLESS INC: S&P Assigns 'CCC+' Rating to $145MM 2nd Lien Loan
--------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'CCC+' issue-level
rating to Payless Inc.'s new $145 million second-lien term loan
due 2022 with a recovery rating of '6', indicating S&P's
expectation for negligible (0%-10%) recovery in the event of
default. Concurrently, S&P assigned a 'B' issue-level rating on
the new first-lien term loan B with a '4' recovery rating,
indicating S&P's expectation for average (30%-50%) recovery in the
event of default. Additionally, S&P revised the outlook to
negative and affirmed all other ratings, including the 'B'
corporate credit rating.
Payless is refinancing its existing outstanding $524 million
first-lien term loan with a $520 million first-lien term loan due
2021. It is also issuing a new $145 million second-lien term loan
due 2022. According to the company, proceeds from new second-lien
term loan will be used to pay a $126 million dividend to its
sponsors, reduce the amount of the first-lien term loan by
$4 million, and pay fees and expenses.
"The outlook revision reflects the erosion of the credit
protection measures because of the additional debt and our view
that financial policies will remain aggressive over the next
year," said credit analyst Diya Iyer.
"The negative outlook reflects the erosion of credit measures
because of the increased debt to fund the sponsor dividend. In
our view, financial policies are aggressive and an elevated risk
remains for additional debt-financed dividends in the future, even
if we do not specifically forecast one in the next year. While
higher leverage has left little room for underperformance, we note
that the company has taken steps to enhance performance, which we
believe should result in modest EBITDA gains over the next 12
months. Additionally, performance over the next few quarters,
especially during the seasonally-important spring selling season,
will be an important benchmark in terms of our assessment of
continued operational stability," S&P added.
Downside Scenario
S&P could lower the rating if comparable-store sales turn negative
as a result of merchandise or pricing missteps, or there is a
meaningful erosion of consumer spending. This decline in
performance would result in EBITDA more than 15% below S&P's
forecast over the next year. At the time, leverage would be about
5x and the fixed-charge coverage would decline to the low-1x area.
Upside Scenario
S&P could revise the outlook to stable if the company is able to
demonstrate improved and consistent performance with same-store
sales in the low-single digits and margin gains above expectations
because of merchandise enhancements. Under this scenario, EBITDA
would be moderately ahead of S&P's forecast and leverage would be
around 4.0x
QUANTUM FOODS: Proposes CTI-Led Auction for All Assets
------------------------------------------------------
Quantum Foods LLC and its affiliates ask the bankruptcy court to
approve bid procedures where CTI Foods Holding Co., LLC, will buy
the assets for at least $51 million, absent higher and better
offers.
In late 2013, the Debtors began exploring strategic alternatives
in compliance with the terms of an amendment to a secured credit
agreement.
The Debtors retained City Capital Advisors, LLC to identify
potential buyers and to assist in completing a sale. City Capital
has contacted 44 potential buyers. Quantum Foods executed over 30
non-disclosure agreements with parties identified by City Capital
Advisors and maintained a dataroom for those parties which the
Debtors populated with a wide range of information about the
Debtors. As of the Petition Date, 12 parties have received access
to the data room to review company relevant documents.
CTI Foods has been identified as the Debtors' stalking horse
bidder. Pursuant to a term sheet, CTI has agreed to an aggregate
purchase price of $51 million. In addition, at its discretion,
CTI may assume or pay up to (i) an aggregate of $8.0 million with
respect to the equipment that is subject to the capital leases,
(ii) an aggregate of $13.7 million of postpetition ordinary course
accounts payable, and an aggregate of $5.6 million of postpetition
accrued expenses.
At the hearing on the first day pleadings, the Debtors will ask
the Court to schedule a hearing to approve the bid procedures
motion approximately 21 days after the Petition Date, a timeline
which is consistent with the requirements of the Debtors' DIP
financing.
Only Term Sheet
The Debtors noted that as of the Petition Date, only a term sheet
was signed with CTI.
The Debtors explained that their preference was to file the bid
procedures motion with a fully-negotiated stalking horse agreement
attached, but it proved impossible. The Debtors' senior lenders
were unwilling to extend further loans to the Debtors outside of
bankruptcy, causing the Debtors to file the Chapter 11 cases on an
expedited basis. Therefore, the Debtors have not yet negotiated
the terms of the stalking horse agreement but expect to do so
prior to the bid procedures hearing.
Other Offers
The Debtors said that notwithstanding the existence of the term
sheet with CTI, interested third parties may conduct due
diligence, and the Debtors and their representatives may provide
due diligence materials to, discuss diligence materials with, and
enter into customary confidentiality agreements with, such
interested third parties, subject to the exclusivity provisions
contained in the term sheet.
The Debtors propose to conduct the sale process based on this
timeline:
(a) Bids will be due 4:00 p.m. (ET) on the day prior to
the auction.
(b) If qualified bids are received, an auction will be
conducted beginning at 10:30 a.m. Chicago time, on
March 25, 2014, at the offices of Winston & Strawn LLP,
35 West Wacker Drive, Chicago, Illinois 60601.
In the event that another party emerges as the winning bidder for
the assets, the Debtors request that they be authorized, to pay
CTI a break-up fee, in the amount of $1,500,000, plus fees and
expenses up to an aggregate amount of $300,000.
About Quantum Foods
Founded in 1990 and headquartered in Bolingbrook, Illinois,
Quantum Foods, LLC -- http://www.quantumfoods.com-- provides
protein products made from beef, poultry and pork.
Quantum Foods and its affiliates sought Chapter 11 protection
(Bankr. D. Del. Lead Case No. 14-10318) on Feb. 18, 2014, to
facilitate the sale of substantially all their business to
CTI Foods Holding Co., LLC.
The Debtors' primary secured indebtedness totals $50.2 million,
owing to lenders led by Crystal Financial, LLC, as administrative
and collateral agent.
A copy of Reilly's declaration in support of the Chapter 11
petitions and first-day motions is available for free at:
http://bankrupt.com/misc/Quantum_1st_Day_Declaration.pdf
Quantum Foods is being advised in its restructuring by Winston &
Strawn as counsel. FTI Consulting, Inc., serves as advisors.
Young, Conaway, Stargatt & Taylor, LLP, is the local counsel.
City Capital Advisors is the investment banker. BMC Group is the
claims and notice agent.
REEVES DEVELOPMENT: Iberiabank Opposes 2nd Amended Plan Outline
---------------------------------------------------------------
Secured creditor IberiaBank filed with the Court on Feb. 18, 2014,
an objection to Reeves Development Company, LLC's Second Amended
Disclosure Statement.
Counsel to IberiaBank, Ronald J. Bertrand, Esq., contends that the
Second Amended Disclosure Statement has not been substantially
revised its prior disclosures, and the few corrections are more of
a "clean up," than any substantial disclosures and/or
modifications of prior disclosures.
Thus, Iberiabank adopts by reference its objections to the
Debtor's Dec. 31, 2013 Amended Disclosure Statement. Iberiabank
notes that it filed an objection to the Amended Disclosure
Statement on Jan. 21, 2014.
As previously reported by The Troubled Company Reporter,
Iberiabank said in its Jan. 21, 2014 court filing that the major
change concerns the Debtor proposing to enter into a Letter of
Intent to execute a lease, rather than a sale, and as in the past
the transaction involves an insider (an LLC that was not in
existence at the time of the entering into the Letter of Intent)
and is based upon self serving disclosures as to expenses, with no
disclosure as to income projections. According to Iberiabank, all
expense and income projections are by the manager of the Debtor.
No projections by accountants, or third party experts.
About Reeves Development
Reeves Development Company, LLC, a commercial and residential real
estate developer, filed a Chapter 11 petition (Bankr. W.D. La.
Case No. 12-21008) in Lake Charles, Louisiana, on Oct. 30, 2012.
The closely held developer was founded in 1998 by Charles Reeves
Jr., its sole owner. Reeves Development has about 80 employees
and generates about $40 million in annual revenue, according to
its Web site.
Bankruptcy Judge Robert Summerhays oversees the case. Arthur A.
Vingiello, Esq., at Steffes, Vingiello & McKenzie, LLC, in Baton
Rogue, Louisiana, represents the Debtor as counsel.
Reeves Development scheduled assets of $15,454,626 and liabilities
of $20,156,597 as of the Petition Date.
Affiliate Reeves Commercial Properties, LLC (Bankr. W.D. La. Case
No. 12-21009) also sought court protection.
The Debtor's Plan dated Feb. 27, 2013, provides that on the
effective date, all allowed accrued interest calculated at the
non-default contractual rate of 4% per annum plus any amounts
allowed by the Court will be capitalized and added to the
outstanding principal balance due under the note issued by Iberia
Bank. The maturity of the Iberia Note will be extended to 60
months from the Effective Date. The Debtor will then repay the
New Principal Balance with interest accruing at the non-default
contractual rate of 4% per annum from the Effective Date.
RELIABRAND INC: Reports $345K Net Loss in Dec. 31 Quarter
---------------------------------------------------------
Reliabrand Inc. filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q, reporting a net loss
of $345,430 on $155,011 of revenue for the three months ended
Dec. 31, 2013, compared with a net loss of $270,318 on $18,779 of
revenue for the same period in 2012.
The Company's balance sheet at Dec. 31, 2013, showed $2.38 million
in total assets, $810,971 in total liabilities, and stockholders'
equity of $1.57 million.
The Company has sustained operating losses since inception, which
raises substantial doubt about the Company's ability to continue
as a going concern, according to the regulatory filing.
As of Dec. 31, 2013, the Company has a working capital surplus of
$718,634, and accumulated deficit of $4 million. During the
period ended Dec. 31, 2013, the Company had a net loss of $625,487
and cash used in operating activities of $870,433. The Company's
ability to continue in existence is dependent on its ability to
develop additional sources of capital, and/or achieve profitable
operations and positive cash flows.
A copy of the Form 10-Q is available at:
http://is.gd/dHQRG6
Based in Kelowna, B.C., Canada, Reliabrand Inc. has developed and
has begun manufacturing a newer version of the Adiri baby bottles
and related components such as sippy cups. The Company intends to
aggressively promote and market the bottles and hopes to secure
widespread retail distribution outlets for the bottles. The
Company manufactures the baby bottles and accessories in China.
Presently, the Company is selling the baby bottles through its
online Web site and has begun limited retail distribution as well.
The Company is presently in discussion with distributors of baby
bottles and related products in over 20 countries worldwide.
RITE AID: BlackRock Stake at 5.8% as of Dec. 31
-----------------------------------------------
In a Schedule 13G filed with the U.S. Securities and Exchange
Commission, BlackRock, Inc., disclosed that as of Dec. 31, 2013,
it beneficially owned 55,978,009 shares of common stock of Rite
Aid Corporation representing 5.8 percent of the shares
outstanding. A copy of the regulatory filing is available for
free at http://is.gd/aClQOI
About Rite Aid Corp.
Drugstore chain Rite Aid Corporation (NYSE: RAD) --
http://www.riteaid.com/-- based in Camp Hill, Pennsylvania, is
one of the nation's leading drugstore chains with 4,626 stores in
31 states and the District of Columbia.
Rite Aid disclosed net income of $118.10 million on $25.39 billion
of revenue for the year ended March 2, 2013, as compared with a
net loss of $368.57 million on $26.12 billion of revenue for the
year ended March 2, 2012.
As of Nov. 30, 2013, the Company had $7.13 billion in total
assets, $9.36 billion in total liabilities and a $2.22 billion
total stockholders' deficit.
* * *
As reported by the TCR on March 1, 2013, Moody's Investors Service
upgraded Rite Aid Corporation's Corporate Family Rating to B3 from
Caa1 and Probability of Default Rating to B3-PD from Caa1-PD. At
the same time, the Speculative Grade Liquidity rating was revised
to SGL-2 from SGL-3. This rating action concludes the review for
upgrade initiated on Feb. 4, 2013.
Rite Aid carries a 'B-' corporate credit rating from Standard &
Poor's Ratings Services.
SAFENET INC: Moody's Rates 1st Lien Loan B1 & 2nd Lien Loan Caa1
----------------------------------------------------------------
Moody's Investors Service affirmed SafeNet, Inc.'s B2 Corporate
Family Rating (CFR) and B2-PD probability of default rating, and
assigned B1 and Caa1 ratings to the company's proposed first and
second lien credit facilities, respectively. SafeNet's ratings
outlook is stable. SafeNet plans to use a portion of cash on hand
and the proceeds from the new $175 million of first lien term loan
and $50 of second lien term loan to refinance about $145 million
of existing debt and pay $115 million dividend to its
shareholders. Moody's will withdraw the ratings for SafeNet's
existing credit facilities upon full repayment and cancellation of
the credit facilities at the close of the proposed transactions.
Ratings Rationale
The proposed debt-financed dividend to shareholders will absorb
the debt capacity available under SafeNet's existing B2 CFR.
Moody's estimates that SafeNet's total debt to trailing 12 months
of EBITDA will increase to about 5.8x, incorporating the company's
preliminary results for 4Q 2013. At the same time, the proposed
refinancing will extend SafeNet's debt maturities. The affirmation
of the ratings reflects Moody's view that SafeNet's improved sales
execution and operating cost savings implemented during 2013
should drive EBITDA growth. Moody's expects SafeNet's Data
Protection sales to enterprises to grow by at least mid single
digit percentages in the next 12 to 18 months and its total debt
to EBITDA to decline to about 5x by the end of 2014.
The B2 CFR is constrained by SafeNet's high business risks
resulting from its narrow product offerings and limited operating
scale relative to some of its competitors. SafeNet faces strong
competition in its Data Protection and Software Monetization
product categories. However, SafeNet's user authentication
products and software monetization products are well-regarded
within the respective niche segments.
The rating is further supported by SafeNet's good liquidity and
Moody's expectations for free cash flow generation in excess of
the high single digit percentages relative to total debt in the
next 12 to 18 months. The company's internal cash flow will
provide the flexibility to pursue small acquisitions or increase
investments to support growth.
Moody's expects SafeNet's financial policies to remain aggressive
under its financial sponsors. The B2 rating incorporates Moody's
expectations that leverage could increase but that SafeNet will
manage total debt to EBITDA near 5x in the intermediate term.
SafeNet's first lien credit facilities are rated B1, only a notch
above the company's CFR compared to the three notches for the
exiting first lien credit facilities. The change reflects a
significant increase in the amount of first lien term loan
relative to the 2nd lien term loan in the proposed capital
structure.
Given the increase in leverage and the company's shareholder-
friendly policies, a ratings upgrade is unlikely in the next 12 to
18 months. Moody's could upgrade SafeNet's rating if its product
diversity increases and strong growth in earnings leads to
leverage below 4.0x (Moody's adjusted), incorporating potential
for debt-financed distributions to shareholders and ongoing
modest-sized acquisitions, and the company generates free cash
flow in excess of 10% of total debt on a meaningfully higher
revenue base.
Moody's could downgrade SafeNet's ratings if EBITDA declines or
the company experiences an erosion in EBITDA margins such that
SafeNet is unable to sustain total debt-to-EBITDA leverage below
5.5x and free cash flow/total debt ratio remains below 5% (both
metrics Moody's adjusted), or liquidity becomes weak.
Moody's has taken the following rating actions:
Issuer: SafeNet, Inc.
Ratings Affirmed:
Corporate Family Rating -- B2
Probability of Default Rating -- B2-PD
Ratings Assigned:
$30 million first lien secured revolving credit facility -- B1,
LGD 3, 37%
$175 million first lien secured term loan - B1, LGD 3, 37%
$50 million second lien secured term loan -- Caa1, LGD 5, 87%.
The following ratings will be withdrawn:
First lien term loan due April 2014 -- Ba2, LGD 2, 13%
Second lien term loan due April 2015 -- B3, LGD 4, 64%
Outlook: Stable
Headquartered in Belcamp, MD, SafeNet provides data security
solutions to government and enterprise customers. SafeNet was
taken private by Vector Capital in 2007. The company expects to
report approximately $337 million in revenues for 2013.
The principal methodology used in this rating was the Global
Software Industry published in October 2012. Other methodologies
used include Loss Given Default for Speculative-Grade Non-
Financial Companies in the U.S., Canada and EMEA published in June
2009.
SAFENET INC: S&P Affirms 'B' CCR; Outlook Stable
------------------------------------------------
Standard & Poor's Ratings Services said it affirmed its 'B'
corporate credit rating on Belcamp, Md.-based SafeNet Inc. The
outlook is stable.
At the same time, S&P assigned a 'B+' issue rating and '2'
recovery rating to the company's $30 million senior secured
revolving credit facility (undrawn at closing) and $175 million
first-lien term loan. The '2' recovery rating indicates S&P's
expectation for substantial (70% to 90%) recovery for lenders in
the event of payment default.
S&P also assigned a 'CCC+' issue rating with a recovery rating of
'6' to the company's $50 million second-lien term loan. The '6'
recovery rating indicates S&P's expectation for negligible (0% to
10%) recovery for lenders in the event of payment default.
"The rating on SafeNet reflects its 'weak' business risk profile,
which encompasses the company's modest scale as well as
vulnerability to competition from large vendors with stronger
financial profiles, and its 'highly leveraged' financial risk
profile," said Standard & Poor's credit analyst Katarzyna Nolan.
These factors are partly offset by a diverse customer base and
growing addressable markets. S&P views the industry risk as
"moderately high" and the country risk as "very low."
The stable outlook reflects S&P's expectation of modest year-over-
year revenue and EBITDA growth, and improved revenue visibility.
An upgrade in the near term is unlikely, reflecting S&P's belief
that the company's private ownership structure will preclude
sustained deleveraging.
S&P could lower the rating if the company's profitability
deteriorates due to increased competition, or due to debt-financed
shareholder returns or acquisitions, such that leverage is
sustained above the mid-6x area.
SAVIENT PHARMACEUTICALS: Files Schedules of Assets and Liabilities
------------------------------------------------------------------
Savient Pharmaceuticals, Inc., has 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 $0
B. Personal Property $43,065,650
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $145,351,331
E. Creditors Holding
Unsecured Priority
Claims $0
F. Creditors Holding
Unsecured Non-priority
Claims $138,727,130
----------- ------------
TOTAL $43,065,650 $284,078,461
A copy of the schedules is available for free at:
http://bankrupt.com/misc/SAVIENTPHARMAsal.pdf
About Savient Pharmaceuticals
Headquartered in Bridgewater, New Jersey, Savient Pharmaceuticals,
Inc. -- http://www.savient.com/-- is a specialty
biopharmaceutical company focused on developing and
commercializing KRYSTEXXA(R) (pegloticase) for the treatment of
chronic gout in adult patients refractory to conventional therapy.
Savient has exclusively licensed worldwide rights to the
technology related to KRYSTEXXA and its uses from Duke University
and Mountain View Pharmaceuticals, Inc.
The Company and its affiliate, Savient Pharma Holdings, Inc.,
sought protection under Chapter 11 of the Bankruptcy Code (Bankr.
D. Del. Case No. 13-12680) on Oct. 14, 2013.
The Debtors are represented by Kenneth S. Ziman, Esq., and David
M. Turetsky, Esq., at Skadden Arps Slate Meagher & Flom LLP, in
New York; and Anthony W. Clark, Esq., at Skadden Arps Slate
Meagher & Flom LLP, in Wilmington, Delaware. Cole, Schotz,
Meisel, Forman & Leonard P.A., also serves as the Company's
conflicts counsel, and Lazard Freres & Co. LLC serves as its
financial advisor. GCG Inc. serves as the Debtors' claims agent.
U.S. Bank National Association, as Indenture Trustee and
Collateral Agent, is represented by Clark T. Whitmore, Esq., at
Maslon Edelman Borman & Brand, LLP, in Minneapolis, Minnesota.
The Unofficial Committee of Senior Secured Noteholders is
represented by Andrew N. Rosenberg, Esq., Elizabeth McColm, Esq.,
and Jacob A. Adlerstein, Esq., at Paul, Weiss, Rifkind, Wharton &
Garrison LLP, in New York; and Pauline K. Morgan, Esq., at Young,
Conaway, Stargatt & Taylor LLP, in Wilmington, Delaware.
The Troubled Company Reporter reported on Jan. 15, 2014, that
Savient Pharmaceuticals completed the sale of substantially all
of its assets, including all KRYSTEXXA assets, by Crealta
Pharmaceuticals for gross proceeds of roughly $120.4 million.
A hearing to consider approval of the disclosure statement
explaining the Plan filed in the Debtor's case is scheduled for
March 17, 2014, at 11:30 a.m. Objections are due by March 10.
The Plan of Liquidation dated Feb. 10, 2014, impairs senior
secured noteholder claims and general unsecured claims. The Plan
also impairs intercompany claims, subordinated 510(c) claims and
subordinated 510(b) claims, although holders of these claims are
not entitled to vote on the Plan.
SINCLAIR BROADCAST: Vanguard Group Stake at 5.4% as of Dec. 31
--------------------------------------------------------------
The Vanguard Group disclosed in an amended Schedule 13G filed with
the U.S. Securities and Exchange Commission that as of Dec. 31,
2013, it beneficially owned 4,003,070 shares of common stock of
Sinclair Broadcast Group Inc. representing 5.41 percent of the
shares outstanding. Vanguard Group previously reported beneficial
ownership of 3,422,697 common shares as of Dec. 31, 2012. A copy
of the regulatory filing is available for free at:
http://is.gd/B7bC4n
About Sinclair Broadcast
Based in Baltimore, Maryland, Sinclair Broadcast Group, Inc.
(Nasdaq: SBGI) -- http://www.sbgi.net/-- one of the largest and
most diversified television broadcasting companies, currently owns
and operates, programs or provides sales services to 58 television
stations in 35 markets. The Company's television group reaches
roughly 22 percent of U.S. television households and includes FOX,
ABC, CBS, NBC, MNT, and CW affiliates.
The Company's balance sheet at Sept. 30, 2013, showed $3.61
billion in total assets, $3.20 billion in total liabilities and
$416.23 million in total equity.
"Any insolvency or bankruptcy proceeding relating to Cunningham,
one of our LMA partners, would cause a default and potential
acceleration under the Bank Credit Agreement and could,
potentially, result in Cunningham's rejection of our seven LMAs
with Cunningham, which would negatively affect our financial
condition and results of operations," the Company said in its
annual report for the period ended Dec. 31, 2012.
* * *
As reported by the TCR on Feb. 24, 2011, Standard & Poor's Ratings
Services raised its corporate credit rating on Sinclair to 'BB-'
from 'B+'. The rating outlook is stable. "The 'BB-' rating on
Sinclair reflects S&P's expectation that the company could keep
its lease-adjusted debt to EBITDA below historical levels
throughout the election cycle, absent a reversal of economic
growth, meaningful debt-financed acquisitions, or significant
shareholder-favoring measures," explained Standard & Poor's credit
analyst Deborah Kinzer.
In September 2010, Moody's raised its ratings for Sinclair
Broadcast and subsidiary Sinclair Television Group, including the
Corporate Family Rating and Probability-of-Default Rating, each to
Ba3 from B1, and the ratings for individual debt instruments.
Moody's also assigned a B2 (LGD 5, 87%) rating to the proposed
$250 million issuance of Senior Unsecured Notes due 2018 by STG.
The Speculative Grade Liquidity Rating remains unchanged at SGL-2.
The rating outlook is now stable.
SEQUENOM INC: Vanguard Group Stake at 5.6% as of Dec. 31
--------------------------------------------------------
The Vanguard Group disclosed in an amended Schedule 13G filed with
the U.S. Securities and Exchange Commission that as of Dec. 31,
2013, it beneficially owned 6,567,997 shares of common stock of
Sequenom Inc. representing 5.67 percent of the shares outstanding.
The reporting person previously held 6,161,720 common shares at
Dec. 31, 2012. A copy of the regulatory filing is available for
free at http://is.gd/zbo6mA
About Sequenom
Sequenom, Inc. (NASDAQ: SQNM) -- http://www.sequenom.com/-- is a
life sciences company committed to improving healthcare through
revolutionary genetic analysis solutions. Sequenom develops
innovative technology, products and diagnostic tests that target
and serve discovery and clinical research, and molecular
diagnostics markets. The company was founded in 1994 and is
headquartered in San Diego, California.
Sequenom disclosed a net loss of $117.02 million in 2012, a net
loss of $74.13 million in 2011 and a net loss of $120.84 million
in 2010. The Company's balance sheet at Sept. 30, 2013, showed
$164.82 million in total assets, $195.85 million in total
liabilities and a $31.02 million total stockholders' deficit.
SOUTHLAND 75: Wants to Hire Pickrel Schaeffer as Counsel
--------------------------------------------------------
Southland 75 LLC filed papers with the U.S. Bankruptcy Court for
the Southern District of Ohio, seeking permission to employ Joshua
M. Kin, Esq., at Pickrel, Schaeffer and Ebeling, LPA, as its
attorney.
Among other things, Mr. Kin expected to:
a) advise the Debtors with respect to his/her/its rights,
power and duties in this case;
b) advise and assist the Debtors in the preparation of its
petition, schedules, and statement of financial affairs;
c) assist and advise the Debtors in connection with the
administration of this case;
d) analyze the claims of the creditors in this case, and
negotiate with such creditors; and
e) investigate the acts, conduct, assets, rights, liabilities
and financial condition of the Debtors and the Debtors'
businesses.
The firm's customary and proposed hourly rates:
Counsel $225
Attorney $150-$350
paraprofessionals $175
The Debtor assures the Court that Mr. Kin is a "disinterested
person" within the meaning of the Bankruptcy Code.
The firm may be reached at:
Joshua M. Kin, Esq.
PICKREL, SCHAEFFER AND EBELING, LPA
2700 Kettering Tower (27th floor)
40 N. Main Street
Dayton, OH 45423
Tel: (937) 223-1130
Fax: (937) 223-0339
E-mail: jkin@pselaw.com
About Lofino Properties & Southland 75
Dayton, Ohio-based Lofino Properties, LLC, which owns retail
stores, sought bankruptcy protection (Bankr. S.D. Ohio Case No.
13-34099) on Oct. 4, 2013. Lofino Properties listed assets of
$19.91 million and liabilities of about $13.15 million.
A sister company, Southland 75 LLC, which owns a strip shopping
center, sought bankruptcy protection (Bankr. S.D. Ohio Case No.
13-34100) on the same day. Southland 75 listed assets of $8.09
million and liabilities of $5.62 million.
The Hon. Judge Lawrence S. Walter presides over the cases.
Attorneys at Pickrel, Schaeffer, and Ebeling, in Dayton, Ohio,
represent the Debtors as counsel. The petitions were signed by
Michael D. Lofino, managing member.
The Debtors have been operating under state court receiverships
since May 2013. On Oct. 17, 2013, the Bankruptcy Court entered an
order denying the Debtors' motion for joint administration of
their cases.
SR REAL ESTATE: Court Dismisses Chapter 11 Bankruptcy Case
----------------------------------------------------------
The Hon. Christopher B. Latham of the U.S. Bankruptcy Court for
the Southern District of California on Feb. 16 dismissed the
Chapter 11 case of SR Real Estate Holdings LLC because the Court
found that the Debtor's case was filed in bad faith.
According to the Court, the Debtor has no business or going
concern to preserve. The Debtor's property is mostly undeveloped.
Any feasible plan of reorganization must necessarily create a new
business that develops the Debtor's property. And this, despite
Debtor's arguments, is at the expense of the first lienholders;
lienholders whose corresponding notes are in default, the Court
says.
Judge Latham notes the Debtor's bankruptcy has kept lienholders,
who are actively trying to foreclose, from using their collateral
to satisfy their debt. Even if the Debtor could present a
successful plan that provides surviving lienholders everything
they're entitled to in bankruptcy, it will still deprive them of
their right to sell the Property and credit bid to obtain its
possession, Judge Latham adds.
About SR Real Estate Holdings
SR Real Estate Holdings, LLC, owner of 14 parcels of real property
totaling 6,400 acres straddling Santa Cruz and Santa Clara
counties, filed a Chapter 11 petition (Bankr. N.D. Cal. Case No.
13-54471) in San Jose, California, on Aug. 20, 2013.
Judge Christopher B. Latham oversees the case. Victor A.
Vilaplana, Esq., and Matthew J. Riopelle, Esq., at Foley and
Lardner, have been tapped as proposed counsel to the Debtor. The
Debtor disclosed $15,016,593 in assets and $548,907,938 in
liabilities as of the Chapter 11 filing.
This is the third bankruptcy filed with respect to the property.
The prior owner, Sargent Ranch, LLC, filed Chapter 11 cases in
January 2010 (Bankr. S.D. Cal. Case No. 10-00046-PB) and November
2011 (Bankr. S.D. Cal. Case No. 11-18853). The second bankruptcy
case was dismissed in February 2012.
SWIFT TRANSPORTATION: S&P Revises Outlook on 'B+' CCR to Positive
-----------------------------------------------------------------
Standard & Poor's Ratings Services said that it revised its
outlook on the 'B+' corporate credit rating on Phoenix, Arizona-
based trucking company Swift Transportation Co. to positive from
stable. At the same time, S&P affirmed its ratings on the
company.
"Our 'B+' rating on Swift is based principally on our assessment
of its business risk profile as "weak" and its financial risk
profile as "significant." The "weak" business risk profile on
Swift reflects its participation in the highly fragmented,
cyclical, and capital-intensive truckload (TL) trucking industry.
The company's position as the largest TL carrier in the U.S. and
its growing position in intermodal transportation (combining
trucks and railroads to move a container or trailer), supporting
our assessment of its competitive position as "fair," somewhat
offset the "high risk" industry risk assessment. Swift operates a
fleet of about 17,000 tractors, 57,000 trailers, 8,700 intermodal
containers, and about 40 terminals across the U.S. and in Mexico--
thus attracting large corporate customers seeking a variety of
trucking services. Swift's size relative to most other industry
players also provides some competitive advantages, including
economies of scale in purchasing equipment, a greater ability to
attract and retain drivers, and resources to comply with
increasing regulatory requirements. Still, TL trucking is a large
and fragmented industry, and top 10 carriers account for less than
10% of the total market," S&P said.
"The rating on Swift also reflects a "significant" financial risk
profile, based on our criteria. The company has substantial
capital spending requirements and its cash flows can be cyclical
during economic or industry downturns. The combination of our
"weak" business risk and "significant" financial risk assessments
results in an initial analytical outcome ("anchor") of 'bb-' under
our criteria. We lowered this by one notch in our financial
policy assessment to reflect the potential for one or more midsize
acquisitions that combined would add materially more debt than we
assume in our base-case scenario. This is based on Swift's
current growth strategy and recent acquisition of Central
Refrigerated Services Inc," S&P added. However, S&P notes that
the company continues to deleverage and improve its credit profile
following the transaction. The resulting corporate credit rating
is thus 'B+'.
The rating incorporates S&P's expectation that Swift will manage
capital expenditures, growth initiatives, and potential
acquisitions in a disciplined manner, maintaining funds from
operations (FFO) to total debt in the mid- to high-20% range and
free operating cash flow (FOCF) to debt in the 10%-12% range over
the next 12-18 months. The key assumptions in S&P's base-case
scenario include these:
-- Real 2014 and 2015 GDP growth of 3% and 3.3% in the U.S.,
respectively;
-- Mid-single-digit percent revenue growth in 2014 as a result
of a mid-single-digit increase in tonnage and low-single-
digit pricing improvement;
-- Modestly improving operating ratio (operating expenses,
including depreciation, as a percentage of revenues) in the
high-80% area; and
-- Gross capital expenditures the $300 million to $350 million
range.
"The outlook is positive, reflecting our belief that Swift's
financial profile will continue to improve as the company
integrates the Central Refrigerated Services acquisition
(completed in August 2013) and pays down debt," said Standard &
Poor's credit analyst Anita Ogbara. S&P's base case assumes that
Swift will benefit from improving supply and demand and pricing in
the truckload sector in 2014, which will result in stronger
operating performance and gradually improving earnings and credit
metrics. Given Swift's recent acquisition and current growth
plans, S&P believes financial policy is a key factor for the
rating.
S&P could raise the rating if earnings growth and improvement in
credit metrics result in a financial profile that could
comfortably accommodate potential midsize acquisitions.
Specifically, S&P could raise the rating if FFO to total debt
rises into the high-20% range and FOCF to debt rises to the low
teens percentage area on a sustained basis.
S&P could revise the outlook to stable if weaker-than-expected
financial results, large debt financed acquisitions, or aggressive
financial policies result in FFO to debt falling to less than 20%
for a sustained period.
UMEWORLD LTD: Albert Wong & Co. Raises Going Concern Doubt
----------------------------------------------------------
UMeWorld Limited filed with the U.S. Securities and Exchange
Commission on Feb. 12, 2014, its annual report on Form 20-F for
the fiscal year ended Sept. 30, 2013.
Albert Wong & Co. expressed substantial doubt about the
Company's ability to continue as a going concern, citing that the
Company has suffered recurring losses from operations and had
working capital of approximately $593,601 at Sept. 30, 2013, as
compared to a working capital deficiency of $19.02 million at
Sept. 30, 2012.
The Company reported a net loss of $232,941 on $760,329 of total
revenues for the fiscal year ended Sept. 30, 2013, compared with a
net loss of $92,893 on $166,803 of total revenues in fiscal 2012.
The Company's balance sheet at Sept. 30, 2013, showed $2 million
in total assets, $1.68 million in total liabilities, and
stockholders' equity of $317,581.
A copy of the Form 20-F is available at:
http://is.gd/FCuE3B
UMeWorld Limited operates in the digital media business. The
company operates UMeLook, an online video platform that focuses on
bringing foreign video content to China. It deploys UMeLook
through a content delivery network with a range of coverage in
Mainland China, Hong Kong, and Taiwan. The company was formerly
known as AlphaRx, Inc. and changed its name to UMeWorld Limited in
April 2013 to reflect the company's focus and direction. UMeWorld
Limited is based in Causeway Bay, Hong Kong.
TOWER GROUP: Incurs $344.13-Mil. Net Loss in Sept. 30 Quarter
-------------------------------------------------------------
Tower Group International, Ltd., filed with the U.S. Securities
and Exchange Commission its quarterly report on Form 10-Q,
reporting a net loss of $344.13 million on $442.9 million of total
revenues for the three months ended Sept. 30, 2013, compared with
net income of $25.95 million on $474.89 million of total revenues
for the same period in 2012.
The Company's balance sheet at Sept. 30, 2013, showed $4.63
billion in total assets, $4.41 billion in total liabilities, and
stockholders' equity of $222.65 million.
As of Sept. 30, 2013, there were $235 million of subordinated
debentures outstanding. The subordinated debentures do not have
financial covenants that would cause an acceleration of their
stated maturities. The earliest stated maturity date is on a $10
million debenture, with a stated maturity in May 2033. The
Company has the ability to defer interest payments on its
subordinated debentures for up to twenty quarters.
The merger with ACP Re is expected to close by the summer of 2014,
and there are contractual termination rights available to each of
Tower and ACP Re under various circumstances. Therefore, there
can be no guarantee that the Company will be able to remedy
current statutory capital deficiencies in certain of its insurance
subsidiaries or maintain adequate levels of statutory capital in
the future. Consequently, there is substantial doubt about the
Company's ability to continue as a going concern, according to the
regulatory filing.
A copy of the Form 10-Q is available at:
http://is.gd/5QYdcO
Tower Group International, Ltd., operates as a holding company
with the interest in insurance services. The company operates
through its insurance subsidiaries, which are focused on providing
commercial, personal and specialty insurance and reinsurance
products. It provides personal insurance products to individuals
and commercial insurance products to small to medium-sized
businesses through a dedicated team of retail and wholesale
agents. The company also offers specialty products on an admitted
and non-admitted basis, as well as through a network of program
underwriting agents. It involves in underwriting, claims and
reinsurance brokerage services to other insurance companies. The
company was founded on Sept. 6, 2007, and is headquartered in
Hamilton, Bermuda.
TECHPRECISION CORP: Reports $757-K Net Loss for Dec. 31 Quarter
---------------------------------------------------------------
TechPrecision Corporation filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q, reporting a
net loss of $757,680 on $5.17 million of net sales for the three
months ended Dec. 31, 2013, compared with a net loss of $545,487
on $7.29 million of net sales for the same period in 2012.
The Company's balance sheet at Dec. 31, 2013, showed
$18.85 million in total assets, $11.3 million in total
liabilities, and stockholders' equity of $7.55 million.
The Company has incurred net losses of $3.0 million for the first
nine months of the year ending March 31, 2014, or fiscal 2014, and
$2.4 million and $2.1 million for the annual periods ended March
31, 2013 and 2012, respectively. At Dec. 31, 2013, the Company
had cash and cash equivalents of $3.7 million of which $0.1
million is located in China and which it may not be able to
repatriate for use in the U.S. without undue cost or expense if at
all. The Company borrowed $0.5 million under its revolving line
of credit during the quarter ended March 31, 2013, and repaid this
borrowing in full in July 2013. These factors raise substantial
doubt about our ability to continue as a going concern.
A copy of the Form 10-Q is available at:
http://is.gd/kmalgC
About TechPrecision
TechPrecision Corporation (OTC BB: TPCSE), through its wholly
owned subsidiaries, Ranor, Inc., and Wuxi Critical Mechanical
Components Co., Ltd., globally manufactures large-scale, metal
fabricated and machined precision components and equipment.
Loss from operations was $1.6 million in fiscal 2013 compared to
an operating loss of $3.4 million in fiscal 2012. The Company's
balance sheet at Sept. 30, 2013, showed $18.56 million in total
assets, $10.37 million in total liabilities and $8.18 million in
total stockholders' equity.
In their report on the consolidated financial statements for the
year ended March 31, 2013, KPMG LLP, in Philadelphia, Pa., said
that the Company was not in compliance with the fixed charges and
interest coverage financial covenants under their credit facility,
and the Bank has not agreed to waive the non-compliance with the
covenants. "Since the Company is in default, the Bank has the
right to accelerate payment of the debt in full upon 60 days
written notice. The Company has suffered recurring losses from
operations, and the Company's liquidity may not be sufficient to
meet its debt service requirements as they come due over the next
twelve months. These circumstances raise substantial doubt about
the Company's ability to continue as a going concern."
UNIVERSAL HEALTH: Bid to Name Abernathy as Sole Director Dropped
----------------------------------------------------------------
Soneet R. Kapila, the Chapter 11 trustee for Universal Health Care
Group, Inc., on Jan. 22 withdrew, without prejudice, his emergency
motion for entry of an order:
a) authorizing the appointment of Mark Abernathy as the sole
director of the Debtor's subsidiaries;
b) directing Mark Abernathy to evaluate the appropriateness of
filing chapter 11 bankruptcy petitions for the subsidiaries;
and
c) authorizing Mark Abernathy to file chapter 11 bankruptcy
petitions for the subsidiaries.
The withdrawal of the motion is based upon the representations of
the receivers for (i) Universal Health Care, Inc.; (ii) Universal
Health Care Insurance Company, Inc.; (iii) Universal HMO of Texas,
Inc.; and (iv) Universal Health Care of Nevada, Inc. that the
receivers have complied with the Center for Medicare and Medicaid
Services Jan. 31, 2014 deadline.
About Universal Health Care
Universal Health Care Group, Inc., owns an insurance company and
three health-maintenance organizations that provide managed care
services for government sponsored health care programs, focusing
on Medicare and Medicaid.
Universal Health was founded in 2002 by Dr. A.K. Desai and grew
its operations of offering Medicare plans to more than 37,000
members to over 20 states.
Universal Health filed a Chapter 11 bankruptcy protection (Bankr.
M.D. Fla. Case No. 13-01520) on Feb. 6, 2013, after Florida
regulators moved to put two of the company's subsidiaries in
receivership. Universal Health Care estimated assets of up to
$100 million and debt of less than $50 million in court filings in
Tampa, Florida.
Harley E. Riedel, Esq., at Stichter Riedel Blain & Prosser, in
Tampa, serves as counsel to the Debtor.
Soneet R. Kapila has been appointed the Chapter 11 Trustee in the
Debtor's case. He is represented by Roberta A. Colton, Esq., at
Trenam, Kemker, Scharf, Barkin, Frye, O'Neill & Mullis, PA.
Dennis S. Jennis, Esq., and Jennis & Bowen, P.L., serve as special
conflicts counsel and E-Hounds, Inc. serves as a forensic imaging
consultant to the Chapter 11 trustee.
VIGGLE INC: Amends Form S-1 Prospectus
--------------------------------------
Viggle, Inc., amended its Form S-1 registration statement relating
to the offering of an undetermined shares of common stock.
The Company will effect a reverse stock split on a 1-for-80 basis
prior to the date of the prospectus. The Company will effect a
recapitalization of its outstanding preferred stock, converting
all preferred stock into shares of common stock prior to the date
of this prospectus.
The Company's common stock is currently quoted on the OTCQB
marketplace and trades under the symbol "VGGL." The last reported
sale price of the Company's common stock on the OTCQB marketplace
on Feb. 7, 2014, was $0.50 per share, or $40.00 per share after
giving effect to the reverse stock split. The Company has applied
to list its common stock on the Nasdaq Capital Market and expect
that listing to occur concurrently with the closing of this
offering.
As part of this offering, Sillerman Investment Company II LLC, an
entity affiliated with Robert F.X. Sillerman, the Company's
executive chairman, chief executive officer, Director and
principal stockholder, has indicated an interest in purchasing up
to __ percent (__%) of the shares in this offering, at the public
offering price. As of Feb. 11 , 2014, Mr. Sillerman, together
with the other directors, executive officers and affiliates,
beneficially own 7,937,983 of the outstanding shares of our common
stock, representing approximately 81.5 percent of the voting power
of the outstanding shares of the Company's common stock, after
giving effect to the reverse stock split and recapitalization.
A copy of the prospectus, as amended, is available for free at:
http://is.gd/d5avDW
About Viggle
New York City-based Viggle Inc. is a loyalty marketing company.
The Company has developed a loyalty program for television that
gives people real rewards for checking into the television shows
they are watching on most mobile operating system. Viggle users
can redeem their points in the app's rewards catalog for items
such as movie tickets, music, or gift cards.
Viggle incurred a net loss of $91.40 million on $13.90 million of
revenues for the year ended June 30, 2013, as compared with a net
loss of $96.51 million on $1.73 million of revenues during the
prior year. The Company's balance sheet at Sept. 30, 2013, showed
$16.06 million in total assets, $36.26 million in total
liabilities, $36.83 million in series A convertible redeemable
preferred stock, and a $57.04 million total stockholders' deficit.
BDO USA, LLP, in New York, issued a "going concern" qualification
on the consolidated financial statements for the year ended
June 30, 2013. The independent auditors noted that the Company
has suffered recurring losses from operations and at June 30,
2013, has deficiencies in working capital and equity that raise
substantial doubt about its ability to continue as a going
concern.
VISION INDUSTRIES: Renews CEO Employment for Three Years
--------------------------------------------------------
The Board of Directors of Vision Industries Corp. nenewed Mr.
Martin Schuermann's appointment as chief executive officer of the
Company for a term of three years.
Mr. Schuermann has been the CEO since his initial appointment on
Dec. 15, 2008. He was also appointed as president on that date
but vacated the office on July 31, 2012, to allow for the
appointment of Mr. Jerome Torresyap as president.
Before joining Vision, Mr. Schuermann served as Chairman and CEO
of IM-Internationalmedia AG and Intermedia Inc., a producer and
distributor of feature films such as Terminator 3, Basic Instinct
2, and several other feature films. Mr. Schuermann was a founding
partner in the Los Angeles based merchant bank EuroCapital
Advisors. Prior to this, he was Managing Director of CLT-UFA
(US), Bertelsmann's US based TV and film arm.
The Company entered into an employment agreement with Mr.
Schuermann as of Jan. 6, 2014, retroactive to Dec. 5, 2013,
providing that Mr. Schuermann will be employed in the position of
chief executive officer of Vision Industries. The term of the
Original Employment Agreement was initially scheduled to terminate
on Dec. 15, 2013. However, the Company extended the contract on a
day by day basis during negotiations for the terms of the new
employment agreement.
Under the Schuermann Employment Agreement, Mr. Schuermann is to
receive a base annual salary of $300,000. In addition, Mr.
Schuermann will be issued options to purchase shares of the
Company's common stock as provided in and according to the terms
of the Company's Employee Stock Option Plan at a rate of 4,500,000
shares at an exercise price equal to 110 percent of the fair
market value of such common stock shares at the date of grant,
with those shares vesting over the three year period commencing on
Dec. 5, 2013, and vesting in equal quarterly installments for the
three year period thereafter at the conclusion of each quarterly
period.
Additional information is available for free at:
http://is.gd/0lZEOs
About Vision Industries
Long Beach, Cal.-based Vision Industries Corp. focuses its
efforts in building Class 8 fuel cell electric vehicles (FCEV)
used in drayage transportation.
The Company's balance sheet at Sept. 30, 2013, showed $1.06
million in total assets, $2.89 million in total liabilities, and
stockholders' deficit of $1.83 million.
Vision Industries reported a net loss of $5.28 million on $26,545
of total revenue for the year ended Dec. 31, 2012, as compared
with a net loss of $6.44 million on $764,157 of total revenue for
the year ended Dec. 31, 2011.
DKM Certified Public Accountants, in Clearwater, Florida, issued a
"going concern" qualification on the consolidated financial
statements for the year ended Dec. 31, 2012. The independent
auditors noted that the Company's cash and available credit are
not sufficient to support its operations for the next year.
Accordingly, management needs to seek additional financing that
raises substantial doubt about its ability to continue as a going
concern.
VISUALANT INC: Reports $845K Net Loss for Qtr. Ended Dec. 31
------------------------------------------------------------
Visualant, Inc., filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q, reporting a net loss
of $845,599 on $1.88 million of revenue for the three months ended
Dec. 31, 2013, compared to a net loss of $700,936 on $2.05 million
of revenue for the same period in 2012.
The Company's balance sheet at Dec. 31, 2013, showed $3.33 million
in total assets, $6.91 million in total liabilities, and a
stockholders' deficit of $3.64 million.
The Company incurred net losses of $6.6 million and $2.73 million
for the years ended Sept. 30, 2013 and 2012, respectively. The
Company's net cash used in operating activities was $3.5 million
for the year ended Sept. 30, 2013.
The Company anticipates that it will record losses from operations
for the foreseeable future. As of Dec. 31, 2013, the Company's
accumulated deficit was $21.4 million. The Company has limited
capital resources, and operations to date have been funded with
the proceeds from private equity and debt financings and loans
from Ronald P. Erickson, the Company's Chief Executive Officer.
These conditions raise substantial doubt about our ability to
continue as a going concern, according to the regulatory filing.
A copy of the Form 10-Q is available at:
http://is.gd/kpAxjI
About Visualant Inc.
Seattle, Wash.-based Visualant, Inc., was incorporated under the
laws of the State of Nevada on Oct. 8, 1998. The Company
develops low-cost, high speed, light-based security and quality
control solutions for use in homeland security, anti-
counterfeiting, forgery/fraud prevention, brand protection and
process control applications.
Visualant incurred a net loss of $6.60 million for the year ended
Sept. 30, 2013, as compared with a net loss of $2.72 million for
the year ended Sept. 30, 2012. As of Sept. 30, 2013, the Company
had $4.62 million in total assets, $7.38 million in total
liabilities, a $2.80 million total stockholders' deficit, and
$49,070 in noncontrolling interest.
PMB Helin Donovan, LLP, in Seattle, Washington, issued a "going
concern" qualification on the consolidated financial statements
for the year ended Sept. 30, 2013. The independent auditors noted
that the Company has sustained a net loss from operations and has
an accumulated deficit since inception. These factors raise
substantial doubt about the Company's ability to continue as a
going concern.
WEST CORP: QCP GP Investors Stake at 9% as of Dec. 31
-----------------------------------------------------
In a Schedule 13G filed with the U.S. Securities and Exchange
Commission, QCP GP Investors II LLC and its affiliates disclosed
that as of Dec. 31, 2013, they beneficially owned 7,545,309 shares
of common stock of West Corporation representing 9 percent of the
shares outstanding. A copy of the regulatory filing is available
for free at http://is.gd/H7cQaI
About West Corporation
Founded in 1986 and headquartered in Omaha, Nebraska, West
Corporation -- http://www.west.com/-- provides outsourced
communication solutions to many of the world's largest companies,
organizations and government agencies. West Corporation has a
team of 41,000 employees based in North America, Europe and Asia.
For the 12 months ended Dec. 31, 2013, the Company reported net
income of $143.20 million on $2.68 billion of revenue as compared
with net income of $125.54 million on $2.63 billion of revenue
during the prior year.
As of Dec. 31, 2013, the Company had $3.48 billion in total
assets, $4.22 billion in total liabilities and a $740.17 million
stockholders' deficit.
Bankruptcy Warning
"If we cannot make scheduled payments on our debt, we will be in
default, and as a result:
* our debt holders could declare all outstanding principal and
interest to be due and payable;
* the lenders under our Senior Secured Credit Facilities could
terminate their commitments to lend us money and foreclose
against the assets securing our borrowings; and
* we could be forced into bankruptcy or liquidation," the
Company said in its quarterly report for the period ended
Sept. 30, 2013.
WESTERN FUNDING: Corporate Name Changed Following Asset Sale
------------------------------------------------------------
The Hon. Laurel E. Davis of the U.S. Bankruptcy Court for the
District of Nevada authorized Western Funding Incorporated, et
al., to change their corporate names and modify the case caption.
In accordance with the order dated Jan. 6, 2014, authorizing the
sale of substantially all of the Debtors' operating assets, the
Debtors' name will be changed to:
Western Funding Incorporated WFI Debtor
Western Funding Inc. of Nevada WFN Debtor
Global Track GPS, LLC GT Debtor
About Western Funding Inc.
Las Vegas car-loan maker Western Funding Inc. filed for Chapter 11
bankruptcy protection (Bankr. D. Nev. Case No. 13-17588) on
Sept. 4, 2013, after its own lender said the company broke
borrowing promises made last year. Matthew C. Zirzow, Esq., at
Larson & Zirzow, LLC, in Las Vegas, Nevada, represents the Debtor.
Jeanette E. McPherson, Esq., at Schwartzer & McPherson Law Firm
represents the Official Committee of Unsecured Creditors.
In its schedules, Western Funding disclosed $48,513,558 in total
assets and $44,443,913 in total liabilities.
Western Funding is jointly administered with Western Funding Inc.
of Nevada, and Global Track GPS, LLC. Western Funding Inc. is the
lead case.
As reported by the TCR on Nov. 22, 2013, the Debtors filed a
proposed Chapter 11 plan that contemplates the transfer of equity
interests to Carfinco Financial Group, Inc., absent higher and
better offers at a court-sanctioned auction.
WHEATLAND MARKETPLACE: Taps Weber & Associates as Accountant
------------------------------------------------------------
Wheatland Marketplace LLC asks the U.S. Bankruptcy Court for the
Northern District of Illinois for permission to employ Weber &
Associates CPA LLC as its accountant.
The Debtor tells the Court that the firm is expected to prepare
its Federal and State Tax returns for a flat fee of $1,900.
The Debtor assures the Court that the firm is a "disinterested
person" within the meaning of the Bankruptcy Code.
About Wheatland Marketplace
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.
In its schedules, Wheatland Marketplace disclosed $10,999,006 in
total assets and $7,052,778 in total liabilities.
Judge Pamela S. Hollis oversees the case. The Debtor has tapped
Christopher M. Jahnke, Esq., and Thomas W. Toolis, Esq., at
Jahnke, Sullivan & Toolis, LLC, in Frankfurt, Illinois, as
counsel. The Debtor employed Edgemark Asset Management LLC as
property manager.
Coleen J. Lehman Trust and Lucy Koroluk each holds a 50%
membership interest in the Debtor.
WINDSTREAM CORPORATION: Fitch Cuts IDR to 'BB'; Outlook Stable
--------------------------------------------------------------
Fitch Ratings has downgraded the Issuer Default Rating (IDR) of
Windstream Corporation (Windstream) and its subsidiaries to 'BB'
from 'BB+'. Windstream is a wholly-owned subsidiary of Windstream
Holdings, Inc. (NASDAQ: WIN). The Rating Outlook has been revised
to Stable from Negative.
Key Rating Drivers
The downgrade reflects Fitch's revised expectations that
Windstream's gross leverage will no longer improve to a level of
3.5x or below within a 12-to-18-month time horizon. Fitch
anticipates the company will continue to make progress in reducing
debt but that slower than previously expected growth in business
service revenue has not fully offset pressures elsewhere. As a
result, the pace of improvement in revenues, EBITDA and free cash
flow (FCF) has been hampered.
Key rating factors which support the rating include:
-- Expectations for the company to generate improved FCF in 2014
as certain capital spending projects wind down;
-- Revenues have become more diversified as recent acquisitions
have brought additional business and data services revenue.
Business service and consumer broadband revenues, which both have
stable or solid growth prospects, were 72% of revenues in the
third quarter of 2013.
The following issues are embedded in the rating:
-- Windstream's leverage, which Fitch expects to be in the 3.7x to
3.8x range on a gross basis in 2014, is likely to decline
slowly over time, but in the near term remain in a range
appropriate for the new 'BB' category;
-- Moderate pressure on EBITDA hinders improvements in leverage.
The company has produced cost savings through lower
interconnection rates, but the expense savings have only partly
offset the loss of high-margin legacy service revenues.
Windstream's gross leverage for the latest 12 months (LTM) as of
Sept. 30, 2013, excluding non-cash actuarial losses on its pension
plans and other nonrecurring charges (merger and integration
charges), was 3.75x (3.71x on a net leverage basis), above the
upper end of the company's net leverage target of 3.2x-3.4x.
On Sept. 30, 2013, Windstream's $1.25 billion revolver due
December 2015 had $700 million outstanding, and $533 million was
available (net of letters of credit) and the company had $87
million of cash on its balance sheet (including $14 million of
restricted cash primarily related to broadband stimulus projects).
Principal financial covenants in Windstream's secured credit
facilities require a minimum interest coverage ratio of 2.75x and
a maximum leverage ratio of 4.5x. The dividend is limited to the
sum of excess FCF and net cash equity issuance proceeds subject to
pro forma leverage of 4.5x or less.
As of Sept. 30, 2013, there are no senior unsecured note
maturities during 2014 and 2015. Debt maturities consist of bank
debt amortization, as well as the maturity of the revolver in
December 2015. Fitch expects the company to reduce revolver
borrowings as FCF is generated. Fitch estimates FCF (after
dividends) for Windstream will be in the $250 million to $300
million range in 2014. Fitch estimates 2014 capital spending
could approximate the amount spent in 2013, which Fitch estimates
was around the $850 million level.
Rating Sensitivities
A positive rating action could occur if:
-- Leverage becomes sustainable in the 3.2x to 3.5x range on a
gross basis;
-- Revenues and EBITDA stabilize or demonstrate a return to
growth on a sustained basis.
A negative rating action could occur if:
-- Leverage is expected to be 4.0x or higher for a sustained
period;
-- Competitive and business conditions are such that the company
no longer makes progress toward revenue and EBITDA stability.
Fitch has taken the following actions and revised the Rating
Outlook to Stable from Negative:
Windstream Corporation
-- Long-term IDR downgraded to 'BB' from 'BB+';
-- $1.25 billion senior secured revolving credit facility due
2015 affirmed at 'BBB-';
-- $393 million senior secured credit facility, Tranche A3 due
2016 affirmed at 'BBB-';
-- $281 million senior secured credit facility, Tranche A4 due
2017 affirmed at 'BBB-';
-- $592 million senior secured credit facility, Tranche B3 due
2019 affirmed at 'BBB-';
-- $1.345 billion senior secured credit facility, Tranche B4 due
2020 affirmed at 'BBB-'; and
-- Senior unsecured notes downgraded to 'BB' from 'BB+'.
Windstream Georgia Communications
-- IDR downgraded to 'BB' from 'BB+' and withdrawn as there is no
longer outstanding long-term debt.
Windstream Holdings of the Midwest
-- IDR downgraded to 'BB' from 'BB+';
-- $100 million secured notes due 2028 downgraded to 'BB' from
'BB+'.
PAETEC Holding Corp. (PAETEC)
-- IDR downgraded to 'BB' from 'BB+';
-- $450 million senior unsecured notes due 2018 downgraded to
'BB' from 'BB+'.
WNA HOLDINGS: Moody's Rates $50MM Incremental Term Loan 'B1'
------------------------------------------------------------
Moody's Investors Service affirmed WNA Holdings, Inc.'s (WNA) B2
Corporate Family Rating (CFR) and a B2-PD Probability of Default
Rating (PDR), respectively. WNA is the parent company of plastic
tableware maker Waddington North America (Waddington). Concurrent
with the affirmation, Moody's assigned a B1 rating to the WNA's
proposed $50 million incremental first lien senior secured term
loan. In addition, Moody's affirmed the company's B1 ratings on
its existing first lien credit facilities and affirmed the Caa1
rating on the company's $125 million second lien credit facility.
The rating outlook is maintained at stable. Proceeds from the
incremental term loan are expected to be used to fund
acquisitions, pay associated fees and expenses and be used for
general corporate purposes.
"We view the WNA transaction as relatively aggressive because the
proceeds together with balance sheet cash are expected to be used
to acquire two targets a short time after making several other
acquisitions, including the large and transformational acquisition
of Par-Pak in June 2013," commented Moody's lead analyst Brian
Silver. "Financial leverage is high, but the rating is prospective
and reflects our expectation that the company will generate solid
free cash flow and place a high priority on using those cash flows
for debt repayment in the next 12 to 18 months." The pace of
deleveraging could be slowed by future bolt-on acquisitions, but
Moody's expects the company to achieve credit metrics that support
the rating.
The following ratings have been assigned at WNA Holdings, Inc.
(subject to review of final documentation):
$50 million incremental first lien term loan at B1
(LGD 3, 42%).
The following ratings have been affirmed at WNA Holdings, Inc.
(with LGD and point estimate changes):
Corporate Family Rating at B2;
Probability of Default Rating at B2-PD;
$50 million first lien revolving credit facility expiring 2018
to B1 (LGD 3, 42%) from B1 (LGD 3, 38%);
$490 million first lien term loan due 2020 to B1 (LGD 3, 42%)
from B1 (LGD 3, 38%);
$125 million second lien term loan due 2020 to Caa1 (LGD6, 92%)
from Caa1 (LGD 5, 89%).
The outlook is maintained at stable
Ratings Rationale
The B2 Corporate Family Rating reflects WNA's modest but improving
scale, narrow product focus, competitive industry environment, and
high financial leverage. The rating is prospective in nature and
anticipates material deleveraging during the next 12 to 18 months.
WNA's rating is also constrained by its customer concentration,
the commoditized nature of a large portion of its revenues, and
susceptibility to volatility in profitability stemming from resin
input cost fluctuations. WNA generates solid operating margins
driven by its leading position in the niche premium rigid plastic
disposable tableware category, custom thermoforming capabilities,
and longstanding relationships with key customers. The rating
anticipates the company will complete the integration of both
recent and future acquisitions without material disruptions to the
business.
The stable rating outlook reflects Moody's expectation that the
company will deleverage such that debt-to-EBITDA (Moody's
adjusted) approaches 5.0 times in the next 12 to 18 months. The
outlook also incorporates Moody's view that WNA's revenue and
earnings will grow modestly over the next year and that it will
maintain at least a good liquidity profile.
The rating could be downgraded if WNA is unable to bring debt-to-
EBITDA below 5.5 times or if free cash flow diminishes on a
sustained basis. A loss of major customers, additional material
debt-financed acquisitions, increased earnings volatility,
liquidity deterioration or significant margin erosion could also
result in a downgrade. Alternatively, an upgrade is unlikely in
the near-term given the relatively small size of the company and
its relatively narrow product and industry focus. Over time, the
ratings could be upgraded if WNA is able to improve its scale and
product diversification while maintaining margins in the high-
teens or above. Quantitatively, an upgrade would require WNA to
sustain debt-to-EBITDA below 4.0 times and EBIT-to-interest above
2.0 times. An upgrade would also require the company to limit
earnings volatility from commodity fluctuations and move towards a
more conservative financial policy while maintaining good
liquidity.
The principal methodology used in this rating was Global Packaged
Goods published in June 2013. Other methodologies used include
Loss Given Default for Speculative-Grade Non-Financial Companies
in the U.S., Canada and EMEA published in June 2009.
WNA Holdings, Inc. (WNA), through Waddington North America and
other operating subsidiaries, designs and manufactures plastic
plates, cups and cutlery. The company groups its operations into
four segments: premium, specialty, everyday and environmental. WNA
acquired Par-Pak Inc., a North American manufacturer of
thermoformed plastic packaging in June 2013 for approximately $329
million and has recently made several bolt-on acquisitions.
Private equity firm Olympus Partners acquired WNA in October 2012
for approximately $371 million. WNA's pro forma sales for the
twelve months ended September 28, 2013 were approximately $629
million.
* James Peck to Join MoFo as Co-Chair of Insolvency Group
---------------------------------------------------------
Morrison & Foerster on Feb. 19 disclosed that Hon. James M. Peck
will join the firm as co-chair of its global Business
Restructuring & Insolvency Group, effective March 3, 2014.
During his tenure as United States Bankruptcy Judge for the
Southern District of New York, Judge Peck presided over the
chapter 11 and SIPA cases of Lehman Brothers and its affiliates,
which collectively held approximately $600 billion assets at the
time of filing, constituting the largest bankruptcy filing in U.S.
history. Other notable matters over which Judge Peck presided
include the chapter 11 cases of Iridium, Quebecor, Charter
Communications, Extended Stay Hotels and ION Media and the chapter
15 case of Japan Airlines. Judge Peck also brokered settlements
in several high profile cases including American Airlines,
Syms/Filenes, MF Global, General Motors Nova Scotia noteholders,
Residential Capital and Excel Maritime.
As well as enhancing Morrison & Foerster's current restructuring
practice, Judge Peck also brings expertise in the area of complex
mediation in both domestic and international insolvencies.
"As a result of the increasing multinational nature of businesses
and globalization of capital, in the last six years we have seen
the most complex cross-border and domestic bankruptcy and
insolvency matters in history. Judge Peck's experiences presiding
over some of these matters, including the Lehman Brothers chapter
11 case, in addition to his experience acting as a mediator in
others, such as Residential Capital and MF Global, will add a
wealth of expertise to our practice. We are delighted that Judge
Peck will be joining Morrison & Foerster," said Larren M.
Nashelsky, chair of Morrison & Foerster.
"Bringing on a practitioner of Judge Peck's stature strengthens
our already robust practice in complex domestic and cross-border
restructuring," added Gary S. Lee, chair of Morrison & Foerster's
Business Restructuring & Insolvency Group.
"Judge Peck will offer expertise in a myriad of areas where he has
helped advance bankruptcy law. This is especially true of his
landmark rulings relating to derivatives and the bankruptcy safe
harbors. We are excited to offer his insights to our clients and
colleagues."
Judge Peck said: "I look forward to continuing to do in private
practice what I did on the bench -- working on world class
domestic and cross-border cases and engaging in complex mediation
matters -- at Morrison & Foerster. MoFo's global platform and
practice strength in restructuring and insolvency make this a most
exciting opportunity."
Judge Peck joins at a time of meteoric trajectory for the
practice. The firm has recently advised on a number of high-
profile cases, including representing Residential Capital, LLC,
one of the largest real estate finance companies in the world, as
the debtor in the largest chapter 11 case of 2012. In addition,
the group represented the chapter 11 trustee for MF Global in the
largest chapter 11 case of 2011. Morrison & Foerster played a
significant role in Iceland's bank restructurings through its
representation of the Resolution Committee and Winding-up Board of
Landsbanki Islands hf. The group also represents official
creditors' committees in some of the highest profile cases,
including in the recent cases of the Los Angeles Dodgers and Ambac
Financial Group. Indeed, the firm was named "Bankruptcy Firm of
the Year" for 2013 by Chambers USA.
Judge Peck also joins on the heels of leading insolvency
practitioner Howard Morris, who joined the firm's London office,
bringing a wealth of expertise on cross-border and pan-European
insolvency, and Jorg Meissner and Thomas Keul, highly regarded
restructuring lawyers in Morrison & Foerster's Berlin office.
Judge Peck was appointed to the United States Bankruptcy Court for
the Southern District of New York in January 2006.
Prior to his appointment, he was a partner in the business
reorganization department at Schulte Roth & Zabel and previously a
partner in the reorganization and finance practice of Duane
Morris. He earned his J.D. from New York University School of Law
and his B.A. from Dartmouth College.
Judge Peck is a fellow of the American College of Bankruptcy, a
member of the International Insolvency Institute and is co-chair
of the ABI's Advisory Committee on Financial Contracts,
Derivatives and Safe Harbors. He is an adjunct professor of
finance at NYU's Stern School of Business and is a frequent
speaker and moderator at global industry conferences and
universities.
About Morrison & Foerster
Morrison & Foerster is a global firm of exceptional credentials.
The firm's clients include some of the largest financial
institutions, investment banks, Fortune 100, technology and life
science companies. It has been included on The American Lawyer's
A-List for 10 straight years, Chambers Global named MoFo its 2013
USA Law Firm of the Year, and in light of the Business
Restructuring & Insolvency Group's success Chambers USA named MoFo
its "Bankruptcy Firm of the Year."
* KCC Bags Restructuring & Bankruptcy Service of the Year Award
---------------------------------------------------------------
The M&A Advisor recognized KCC, a Computershare company, as a
winner in the 8th Annual Turnaround Awards. A leading
administrative-support services provider for the legal and
financial industries, KCC has been nominated for five consecutive
years in the "Restructuring & Bankruptcy Service of the Year"
category for its corporate restructuring administration services.
"This significant honor inspires us to continue to bring
substantive value to the corporate restructuring process through
our expertise, service and technology," said KCC executive vice
president, Albert Kass. "Our team of seasoned experts approach
every engagement from the perspective of the professional,
allowing us to bring to market innovative solutions meeting the
changing needs of the industry."
"The award winners represent the best of the distressed investing
and reorganization industry in 2013 and earned these honors by
standing out in a group of very impressive candidates," said
David Fergusson, president of the M&A Advisor.
The 2014 winners were selected by an independent group of
turnaround industry experts and will be recognized at the M&A
Advisor 8th Annual Turnaround Awards Gala at the Colony Hotel in
Palm Beach, Florida on March 11, 2014.
As a claims and noticing agent for chapter 11 and chapter 9
proceedings, KCC provides claims administration, noticing, public
securities services, document production, ballot and tabulation,
call center support, disbursement services as well as an
innovative suite of eServices on mobile and digital platforms.
KCC's clients include the City of the Detroit, LodgeNet
Interactive Corp., Powerwave Technologies Inc., Physiotherapy
Holdings, Inc., School Specialty, Inc., and Global Aviations
Holdings Inc., among many others.
About KCC
KCC -- http://www.kccllc.com-- is a Computershare company that
provides administrative-support services that help legal
professionals realize time and cost efficiencies. With an
integrated suite of corporate restructuring, class action and
legal document management solutions, KCC alleviates the
administrative challenges of today's legal processes and
procedures.
* BOOK REVIEW: The Oil Business in Latin America: The Early Years
-----------------------------------------------------------------
Author: John D. Wirth Ed.
Publisher: Beard Books
Softcover: 282 pages
List price: $34.95
Review by Gail Owens Hoelscher
Buy a copy for yourself and one for a colleague on-line at
http://is.gd/DvFouR
This book grew out of a 1981 meeting of the American Historical
Society. It highlights the origin and evolution of the state-
owned petroleum companies in Argentina, Mexico, Brazil, and
Venezuela.
Argentina was the first country ever to nationalize its
petroleum industry, and soon it was the norm worldwide, with the
notable exception of the United States. John Wirth calls this
phenomenon "perhaps in our century the oldest and most
celebrated of confrontations between powerful private entities
and the state."
The book consists of five case studies and a conclusion, as
follows:
* Jersey Standard and the Politics of Latin American Oil
Production, 1911-30 (Jonathan C. Brown)
* YPF: The Formative Years of Latin America's Pioneer State
Oil Company, 1922-39 (Carl E. Solberg)
* Setting the Brazilian Agenda, 1936-39 (John Wirth)
* Pemex: The Trajectory of National Oil Policy (Esperanza
Duran)
* The Politics of Energy in Venezuela (Edwin Lieuwen)
* The State Companies: A Public Policy Perspective (Alfred
H. Saulniers)
The authors assess the conditions at the time they were writing,
and relate them back to the critical formative years for each of
the companies under review. They also examine the four
interconnecting roles of a state-run oil industry and
distinguish them from those of a private company. First, is the
entrepreneurial role of control, management, and exploitation of
a nation's oil resources. Second, is production for the private
industrial sector at attractive prices. Third, is the
integration of plans for military, financial, and development
programs into the overall industrial policy planning process.
Finally, in some countries is the promotion of social
development by subsidizing energy for consumers and by promoting
the government's ideas of social and labor policy and labor
relations.
The author's approach is "conceptual and policy oriented rather
than narrative," but they provide a fascinating look at the
politics and development of the region. Mr. Brown provides a
concise history of the early years of the Standard Oil group and
the effects of its 1911 dissolution on its Latin American
operations, as well as power struggles with competitors and
governments that eventually nationalized most of its activities.
Mr. Solberg covers the many years of internal conflict over oil
policy in Argentina and YPF's lack of monopoly control over all
sectors of the oil industry. Mr. Wirth describes the politics
and individuals behind the privatization of Brazil's oil
industry leading to the creation of Petrobras in 1953. Mr. Duran
notes the wrangling between provinces and central government in
the evolution of Pemex, and in other Latin American countries.
Mr. Lieuwin discusses the mixed blessing that oil has proven for
Venezuela., creating a lopsided economy dependent on the ups and
downs of international markets. Mr. Saunders concludes that many
of the then-current problems of the state oil companies were
rooted in their early and checkered histories." Indeed, he says,
"the problems of the past have endured not because the public
petroleum companies behaved like the public enterprises they
are; they have endured because governments, as public owners,
have abdicated their responsibilities to the companies."
John D. Wirth is Gildred Professor of Latin American Studies at
Standford University.
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com by e-mail.
On Thursdays, the TCR delivers a list of recently filed
Chapter 11 cases involving less than $1,000,000 in assets and
liabilities delivered to the nation's bankruptcy courts. The
list includes links to freely downloadable of these small-dollar
petitions in Acrobat PDF documents.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
The Sunday TCR delivers securitization rating news from the week
then-ending.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine
Tumanda, Valerie Udtuhan, Howard C. Tolentino, Carmel Paderog,
Meriam Fernandez, Joel Anthony G. Lopez, Cecil R. Villacampa,
Sheryl Joy P. Olano, Ivy B. Magdadaro, Carlo Fernandez,
Christopher G. Patalinghug, and Peter A. Chapman, Editors.
Copyright 2014. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers. Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.
The TCR subscription rate is $975 for 6 months delivered via
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are $25 each. For subscription information, contact Peter A.
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*** End of Transmission ***