/raid1/www/Hosts/bankrupt/TCR_Public/140314.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, March 14, 2014, Vol. 18, No. 72
Headlines
250 AZ: Insists Amended Reorganization Plan Is Confirmable
ACADIA HEALTHCARE: S&P Affirms 'B+' CCR & Rates $600MM Debt 'BB-'
AGFEED INDUSTRIES: Says It Is in Settlement Talks with SEC
AIRCASTLE LIMITED: Moody's Rates Unsecured Notes Due 2021 'Ba3'
AMERICAN AIRLINES: RTA Files Suit Over Alleged Tax Avoidance
AMERICAN MEDIA: Files Copy of Investor Presentation with SEC
AMERICAN TITLE SERVICE: Voluntary Chapter 11 Case Summary
ARMORWORKS ENTERPRISES: Negotiating With C Squared
BUENA VISTA GAMING: S&P Withdraws CCC+ Rating on New $220MM Notes
CARL'S FURNITURE: To Close 3 Remaining Stores, Won't File Ch.11
CASH STORE: To Voluntarily Delist from the NYSE
CEETOP INC: CYH Capital Stake at 9.8% as of Feb. 20
CENGAGE LEARNING: Court Approves Bankruptcy-Exit Plan
CENTERPOINT ENERGY: Fitch Affirms 'BB+' Jr. Sub. Debenture
CEREPLAST INC: Hearing on Cash Access Continued to March 20
CEREPLAST INC: March 20 Hearing on Motion to Convert Case
CEREPLAST INC: Sec. 341 Meeting on April 23; Schedules Filed
CEREPLAST INC: Wants to Hire Austin Legal Group as Bankr. Counsel
CLEAVER-BROOKS INC: Moody's Assigns B2 CFR & Rates $37MM Notes B2
CORNERSTONE CHEMICAL: Moody's Affirms 'B2' CFR; Outlook Negative
COUNTRYWIDE FIN'L: U.S. May Increase Penalties for Former Exec
CROSSOVER FINANCIAL: Reineke Bid for Evidentiary Hearing Denied
DEERFIELD RETIREMENT: Chapter 11 Plan Confirmed
DESIGNLINE CORP: Committee's Liquidation Plan Approved
DETROIT, MI: Turns Bankruptcy Precedents Upside Down
DILLARD'S INC: Moody's Hikes Corporate Family Rating to 'Ba1'
DOUGLAS DYNAMICS: 2013-14 Results No Impact on Moody's B1 Rating
EASTMAN KODAK: Jeff Clarke Succeeds Antonio Perez as CEO
EASTMAN KODAK: Board Elects Jeff Clarke as Chief Executive Officer
EASTMAN KODAK: Names Tech Veteran as CEO
EASTON-BELL SPORTS: Robust Auction Not Expected for Hockey Unit
ELIAS PARTNERS: Case Summary & 7 Unsecured Creditors
ENERGY XXI: Moody's Affirms B2 CFR & B2 Senior Unsecured Rating
ENTEGRIS INC: S&P Assigns BB CCR Following ATMI Acquisition Plan
FANNIE MAE: Egbert Perry to Replace Philip Laskawy as Chairman
FIRST MARINER: Wins Court Approval of Auction Process
FIRST SECURITY: Incurs $646,000 Net Loss in Fourth Quarter
FTI CONSULTING: S&P Lowers CCR to 'BB'; Stable Outlook
GENERAL AUTO: Court Enters Final Decree Closing Bankruptcy Case
GENERAL MOTORS: Urged to Waive Bankruptcy Immunity for Suits
GEO SAB: Mexican Home Builder to File for Bankruptcy
GLEACHER & CO: Troubled Investment Bank To Liquidate
GOLDEN STATE PETROLEUM: S&P Puts 'B-' Sec. Rating on Watch Pos.
GOLDKING HOLDINGS: Files Amendment No. 6 to Financing Agreement
GRAND CENTREVILLE: Case Dismissal Hearing Continued to March 18
GRAND CENTREVILLE: Receiver's Authority to File Plan Questioned
HOUSTON REGIONAL: Astros File Reply Brief in Appeal
HOUSTON REGIONAL: Astros Want Suit v. Comcast, NBC Remanded
HELLAS TELECOMMUNICATIONS: TPG, Apax Sued Over Soured Buyout
HERCULES OFFSHORE: Moody's Rates $300MM Sr. Unsecured Notes 'B3'
HERCULES OFFSHORE: S&P Rates $300MM New Sr. Unsecured Notes 'B'
IN PLAY: Revises Plan, Confirmation Hearing Set for April 28
J AND Y INVESTMENT: Own Bid to Dismiss Case Rejected
LABORATORY PARTNERS: Obtains OK to Sell Nuclear Medicine Business
LAGUNA BRISAS: Can Use Cash Collateral Until April 30
LE ROYAL INT'L: Case Summary & 7 Largest Unsecured Creditors
LEGEND'S CARWASH: Case Summary & 12 Largest Unsecured Creditors
LHI HOLDCO: S&P Withdraws 'B+' ICR on Terminated Debt Transaction
LMB REALTY: Case Summary & 7 Largest Unsecured Creditors
MEDIACOM COMMUNICATIONS: Moody's Rates Sr. Unsecured Notes 'B3'
MEDIACOM BROADBAND: S&P Rates $200MM Sr. Unsecured Notes 'B'
MERGERMARKET USA: S&P Assigns 'B' CCR; Outlook Stable
METEX MFG: Plan Provides Initial 18% Recovery to Asbestos Claims
MOORE FREIGHT: Gets 2nd Amended Plan Confirmed
MOSS FAMILY: Beachwalk POA Objects to First Amended Plan Outline
MOSS FAMILY: Michigan City Files Response to Amended Plan Outline
NATIVE WHOLESALE: Webster Szanyi Okayed to Handle Calif. Appeal
NATIVE WHOLESALE: April 11 Hearing on Adequacy of Plan Outline
NCL CORP: Moody's Affirms Ba3 CFR & Revises Outlook to Positive
NEOGENIX ONCOLOGY: 3rd Party Releases Derail Plan
NEW SBARRO: Moody's Lowers Probability Default Rating to 'D-PD'
NEW YORK CITY OPERA: Has Five Offers from Third Parties
NORTHERN BEEF PACKERS: Court Sorts Liens on Operating Assets
NII HOLDINGS: Incurs $1.6 Billion Loss in 2013
OLEO E GAS: To Get $125 Million From Creditors
ORECK CORP: HQ Lessors' Stub Rent Not Entitled to Admin Priority
PACIFIC STEEL: Files for Bankruptcy Protection
PIERRE & RONI: Case Summary & 7 Unsecured Creditors
PGX HOLDINGS: Moody's Assigns 'B3' CFR; Outlook Stable
PGX HOLDINGS: S&P Assigns 'B' CCR & Rates $330MM Sr. Facility 'B'
PHH CORP: Moody's Affirms 'Ba2' CFR & Alters Outlook to Negative
POST HOLDING: Add-on $350MM Notes No Impact on Moody's B1 Rating
PROSPECT PARK: To Wind Down Business and Operations
PROSPECT PARK: ABC Sues for Nonpayment of Series Fees
QBEX ELECTRONICS: ExIm Bank Says Access to Cash Should Stop
QBEX ELECTRONICS: Committee, ExIm Bank Seek Case Conversion
REDE ENERGIA: April 4 Hearing on Plea to Recognize Brazilian Plan
RIVER-BLUFF ENTERPRISES: Section 341(a) Meeting Set on April 10
RONICAL INTERNATIONAL: Case Summary & 7 Top Unsecured Creditors
ROTHSTEIN ROSENFELDT: Jailed Wife Pursued for $2 Million in Jewels
SBARRO LLC: Restructuring Begins With Quick Pace
SBARRO LLC: 2 Orange County Outlets Closed
SBP HOLDINGS: S&P Assigns 'B' CCR & Rates $225MM 1st Lien Loan 'B'
SHELBOURNE NORTH: Files Ch. 11 Plan of Reorganization
SOUTHAMPTON FOOTBALL CLUB: Ice Hockey Coach Becomes Chair
SPANISH PEAKS: Sale to Cross Harbor Free of Insider Leases
ST. FRANCIS' HOSPITAL: Files Plan of Liquidation
ST. FRANCIS' HOSPITAL: Court OKs CBIZ as Committee Fin'l Advisors
ST. FRANCIS' HOSPITAL: Can Employ Gibbons as Ombudsman Counsel
ST. FRANCIS' HOSPITAL: Schedules Filed; Claims Bar Date Set
ST. FRANCIS' HOSPITAL: Has Approval of Sale Deal with Westchester
TEKNI-PLEX INC: S&P Affirms 'B' CCR Over $50MM Loan Add-On
TENNECO INC: Fitch Affirms 'BB+' Issuer Default Rating
TEREX CORP: S&P Raises CCR to 'BB' on Improved Credit Measures
THEW HOLDINGS: Voluntary Chapter 11 Case Summary
TLC HEALTH: Seeks to Employ Howard P. Schultz as Appraiser
TUSCANY INTERNATIONAL: U.S. Trustee Unable to Form Committee
UNITED RENTALS: Moody's Assigns B2 Rating on $850MM Senior Notes
UNITED RENTALS: S&P Assigns 'BB-' Rating to $850MM Sr. Notes
USEC INC: Seeks Extension of Time to File Rule 2015.3(a) Report
WARNER SPRINGS RANCHOWERS: Liquidating Trustee Named
WITHOUT WALLS INT'L CHURCH: Seeks Bankruptcy Protection
* S.E.C. Brings Case Against 10th Former SAC Capital Employee
* Singapore to Regulate Bitcoin Dealers
* BOOK REVIEW: GROUNDED: Frank Lorenzo and the Destruction of
Eastern Airlines
*********
250 AZ: Insists Amended Reorganization Plan Is Confirmable
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250 AZ, L.L.C., responded to RREF II DFC Acquisitions, LLC's
objection to confirmation of its First Amended Plan of
Reorganization dated Nov. 4, 2013, saying that nothing contained
in RREF's objection is sufficient to preclude confirmation of the
Plan nor is there any information that is unknown to any of the
creditors.
The Debtor added that its Plan is confirmable, and meets the
requirements of Section 1129 of the Bankruptcy Code. The Debtor
also pointed out that its creditors, except for RREF, all voted to
accept the Plan. The Debtor said that its Disclosure Statement
was approved.
RREF is transferee of former creditor Armed Forces Bank, N.A.
As reported in the Nov. 13, 2013 edition of the TCR, the Debtor
filed a Chapter 11 plan that proposes to pay the allowed secured
claim of the first mortgage holder on each rental property and on
the development parcels. Unsecured creditors will each claim pro
rata share of funds allocated for the class (a minimum of $10,000
per year over a five-year period).
About 250 AZ, LLC
250 AZ, LLC, filed a Chapter 11 petition (Bankr. D. Ariz. Case No.
13-00851) in Tucson, Arizona, on Jan. 22, 2013. In its schedules,
the Debtor disclosed $25 million in assets and $70.8 million in
liabilities. 250 AZ owns an 84.70818% tenant in common interest
in a 29-story office building located at 250 East Fifth Street, in
Cincinnati, Ohio.
The Debtor is represented by Dennis M. Breen, III, Esq., and John
E. Olson, Esq., at Breen Olson & Trenton, LLP as counsel.
The U.S. Trustee said an official committee of unsecured creditors
has not been appointed because an insufficient number of persons
holding unsecured claims against the company have expressed
interest in serving on a committee.
ACADIA HEALTHCARE: S&P Affirms 'B+' CCR & Rates $600MM Debt 'BB-'
-----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B+' corporate
credit rating on Franklin, Tenn.-based Acadia Healthcare Co. The
outlook is stable.
At the same time, S&P assigned a 'BB-' issue-level rating to the
company's new $600 million credit facility comprised of a $300
million revolver and $300 million term loan. S&P assigned a
recovery rating of '2', indicating substantial (70%-90%) recovery
in the event of payment default. S&P also affirmed the 'B-'
issue-level rating on the senior unsecured notes due 2018 and
2021. The recovery rating is a '6', indicating S&P's expectation
of negligible (0%-10%) recovery in the event of payment default.
"The ratings on Acadia Healthcare continue to reflect its "weak"
business risk profile, which incorporates exposure to government
reimbursement and potential operating and integration challenges
as the company continues to rapidly expand its business," said
credit analyst Tahira Wright. "The "aggressive" financial risk
profile reflects our expectation that debt leverage will range
between 4.0x-4.5x through 2014. This assumption considers annual
acquisition-related spending of $240 million to $280 million,
which we expect will be funded from a mix of debt and equity
offerings. Acadia acquires and develops in-patient behavioral
health care facilities that include acute in-patient psychiatric
facilities, residential treatment care, and other behavioral
health care operations."
S&P's stable rating outlook on Acadia reflects its expectation
that management will continue to aggressively grow the company yet
still abide by a disciplined financial policy of maintaining pro
forma adjusted leverage below 5.0x.
S&P would consider a downgrade if Acadia makes a major-debt
financed acquisition that will result in debt leverage at a
sustained level above 5x, supporting a highly leveraged financial
risk profile. S&P believes an acquisition of around $500 million
could result in this scenario. S&P could also lower the rating if
operations are stifled by significant reimbursement cuts or
recently acquired operations are unsuccessfully integrated,
resulting in an EBITDA margin decline of more than 400 basis
points. This would also result in credit metrics supportive of a
highly leveraged financial risk profile.
AGFEED INDUSTRIES: Says It Is in Settlement Talks with SEC
----------------------------------------------------------
Ben Fox Rubin, writing for The Wall Street Journal, reported that
AgFeed Industries Inc. said it is in settlement discussions with
the Securities and Exchange Commission related to the regulator's
fraud suit against the Chinese animal-feed and hog-production
company.
According to the report, The SEC on March 11 sued the company and
several of its former top officials, alleging they orchestrated or
failed to stop an accounting fraud that inflated the company's
revenue by $239 million from 2008 to 2011.
AgFeed said in a regulatory filing on March 13 that it can't
predict the result of any discussions with the commission, the
report related.
AgFeed Industries Inc. created fake revenues by creating false
invoices for the sale of feed and purported sales of hogs that
didn't exist, the SEC said in a lawsuit filed in federal court in
Tennessee, the report further related. The company also inflated
the weights of actual hogs, because fatter hogs bring higher
market prices, and thereby inflated the revenues from sales of
those hogs, the SEC said. The moves improperly raised the
company's annual revenues by amounts ranging from 71% to 103%,
according to the commission.
Eight former AgFeed officials were involved either in executing
the scheme or in covering it up, the SEC said, including the
former chairman of the company's audit committee, K. Ivan Gothner,
who allegedly learned of the fraud but ignored a recommendation to
hire outside investigators to probe it, the report added. An
attorney for Mr. Gothner said earlier this week that the SEC
doesn't allege that his client was involved in the actual fraud
and he "did the best he could under very fast-moving
circumstances." Two of the eight former officials settled
administrative proceedings with the SEC without admitting or
denying the commission's allegations.
About AgFeed Industries
AgFeed Industries, Inc., has 21 farms and five feed mills in China
producing more than 250,000 hogs annually. In the U.S., the
business included 10 sow farms in three states and two feed mills
producing more than one million hogs a year. AgFeed's revenue in
2012 was $244 million.
AgFeed and its affiliates filed voluntary petitions under Chapter
11 of the Bankruptcy Code (Bankr. D. Del. Case No. 13-11761) on
July 15, 2013, with a deal to sell most of its subsidiaries to The
Maschhoffs, LLC, for cash proceeds of $79 million, absent higher
and better offers. The Debtors estimated assets of at least $100
million and debts of at least $50 million.
Keith A. Maib signed the petition as chief restructuring officer.
Hon. Brendan Linehan Shannon presides over the case. Donald J.
Bowman, Jr., and Robert S. Brady, Esq., at Young, Conaway,
Stargatt & Taylor, serve as the Debtors' counsel. BDA Advisors
Inc. acts as the Debtors' financial advisor. The Debtors' claims
and noticing agent is BMC Group, Inc.
The U.S. Trustee has appointed a five-member official committee of
unsecured creditors to the Chapter 11 cases. The Creditors'
Committee tapped Lowenstein Sandler as lead bankruptcy counsel and
Greenberg Traurig, LLP, as co-counsel. CohnReznick LLP serves as
the Creditors' Committee's financial advisor.
An official committee of equity security holders was also
appointed to the Chapter 11 cases. The Equity Committee tapped
Sugar Felsenthal Grais & Hammer LLP and Elliott Greenleaf as
co-counsel.
AIRCASTLE LIMITED: Moody's Rates Unsecured Notes Due 2021 'Ba3'
---------------------------------------------------------------
Moody's Investors Service assigned a rating of Ba3 to Aircastle
Limited's senior unsecured notes due 2021. Aircastle's Ba2
corporate family rating and stable rating outlook are unchanged by
the new transaction.
Rating Rationale
The Ba3 rating assigned to the new notes reflects Aircastle's
fundamental credit profile, as reflected in its Ba2 corporate
family rating, and the notes' relative priority in Aircastle's
capital structure. Aircastle maintains a competitive mid-tier
position within the aircraft leasing industry, has a record of
profitable operations, and possesses solid capital and liquidity
positions.
The terms of the new notes are consistent with those of
Aircastle's existing senior unsecured debt. Aircastle intends to
use the proceeds of the notes, along with cash, to repay senior
indebtedness.
Aircastle's stable rating outlook reflects its improved aircraft
portfolio composition, stable operating performance, and
maintenance of a good capital buffer.
Ratings could improve if Aircastle achieves sustainably higher
return on managed assets while maintaining acceptable leverage and
liquidity levels.
A material decline in profitability, an increase in leverage above
2.5x or a material deterioration in the company's liquidity runway
could result in a ratings downgrade.
AMERICAN AIRLINES: RTA Files Suit Over Alleged Tax Avoidance
------------------------------------------------------------
The Regional Transportation Authority on March 11 filed suit
against American Airlines to force the company and its affiliated
fuel subsidiary to comply with Illinois law and stop diverting
millions in sales-tax revenues owed to local governments and
transit agencies from the six-county Chicago area. The lawsuit
alleges that American is engaged in an "unlawful scheme" by its
fuel subsidiary's false reporting of the site of bulk jet fuel
sales to avoid paying taxes due to the RTA.
In 2013 American's fuel purchasing practices are estimated to have
cost the City of Chicago$11.5 million, Cook County$3.8 million,
and the RTA system, which includes Chicago Transit Authority
("CTA"), Metra and Pace, $8.3 million. Although publicly
available records suggest that these practices have been ongoing
since 2004, likely costing local government and transit agencies
many millions more, American's bankruptcy, from which it recently
emerged, might shield it and its subsidiaries from paying on
certain past liabilities.
American claims that it purchases jet fuel in the rural community
of Sycamore in DeKalb County, which is more than 50 miles west of
Chicago's O'Hare International Airport ("O'Hare"), but which is
just five miles from the RTA's service region and does not have an
airport. Sycamore and American's fuel subsidiary have entered
into an agreement that calls for Sycamore to rebate almost all of
the sales tax it collects back to the company in the form of
incentive payments and, in exchange, is allowed to keep as much as
half-a-million dollars each year. Documents obtained from
Sycamore describe American's fuel subsidiary's offices as ". . . a
modest operation housing one or two employees . . . An office
suite of less than 1,000 square feet would be sufficient for the
operation. There will be no demand on public services for such a
business." In fact, this tiny office is located in Sycamore's
City Hall and no fuel for aircraft at O'Hare is ever physically
delivered to Sycamore.
"The world's largest airline has a responsibility, like every
other business or individual, to pay the taxes it owes and that
are used to support the public infrastructure that allows the
airline to operate," said RTA Chief of Staff Jordan Matyas.
"Millions of passengers, as well as airline employees, use mass
transit to get to O'Hare." Additionally, emergency personnel from
local governments serve the airport and respond to serious
situations there. They also rely on those tax dollars to support
their operations and to protect the safety of American's employees
and customers."
American partners with several other airlines in the oneworld(R)
alliance, whose members include airberlin, British Airways, Cathay
Pacific, Finnair, Iberia, Japan Airlines, LAN, Qatar Airways,
Qantas Airways and Royal Jordanian Airlines. American purchases
millions of gallons of jet fuel every year for its operations at
Chicago's O'Hare Airport, and provides operational support to its
partner airlines.
The RTA is responsible for funding the mass transit agencies,
which rely on sales taxes from the six-county region, and account
for half of its operating funds. The lawsuit against American is
not the first one that the RTA filed. It filed a similar lawsuit
against United Airlines in 2013, which also claims Sycamore as the
location of its fuel purchases. American was not sued at that time
because it was in bankruptcy. The RTA has also filed suit against
the towns of Kankakee and Channahon for entering into tax-
avoidance deals with retailers and other airlines. A number of
businesses have subsequently announced they are terminating their
agreements with those municipalities.
To view a copy of the lawsuit and additional documents relating to
the lawsuit visit http://www.rtachicago.com/media-center/sales-tax
About the RTA
The RTA -- http://www.RTAchicago.com-- provides financial
oversight, funding and regional planning for the three public
transit operations in Northeastern Illinois: The Chicago Transit
Authority (CTA) bus and train, Metra commuter rail and Pace
suburban bus and paratransit.
AMERICAN MEDIA: Files Copy of Investor Presentation with SEC
------------------------------------------------------------
Representatives of American Media, Inc., began making
presentations to investors regarding the Company slides containing
the information which are available for free at:
http://is.gd/qgp2eM
The Company expects to use the Slides, in whole or in part, and
possibly with modifications, in connection with presentations to
investors, analysts and others commencing on Feb. 24, 2014.
About American Media
Based in New York, American Media, Inc., publishes celebrity
journalism and health and fitness magazines in the U.S. These
include Star, Shape, Men's Fitness, Fit Pregnancy, Natural Health,
and The National Enquirer. In addition to print properties, AMI
manages 14 different Web sites. The company also owns
Distribution Services, Inc., the country's #1 in-store magazine
merchandising company.
American Media, Inc., and 15 units, including American Media
Operations, Inc., filed for Chapter 11 protection in Manhattan
(Bankr. S.D.N.Y. Case No. 10-16140) on Nov. 17, 2010, with a
prepackaged plan. The Debtors emerged from Chapter 11
reorganization in December 2010, handing ownership to former
bondholders. The new owners include hedge funds Avenue Capital
Group and Angelo Gordon & Co.
American Media incurred a net loss of $55.54 million on $348.52
million of total operating revenues for the fiscal year ended
March 31, 2013, as compared with net income of $22.29 million on
$386.61 million of total operating revenues for the fiscal year
ended March 31, 2012.
As of Dec. 31, 2013, the Company had $565.84 million in total
assets, $692.81 million in total liabilities, $3 million in
redeemable noncontrolling interest, and a $129.97 million total
stockholders' deficit.
* * *
As reported by the TCR on Nov. 20, 2013, Standard & Poor's Ratings
Services raised its corporate credit rating on Boca Raton, Fla.-
based American Media Inc. to 'CCC+' from 'SD'.
"The upgrade follows the company's exchange of $94.3 million of
its $104.9 million 13.5% second-lien cash-pay notes due 2018 for
privately held $94.3 million 10% second-lien notes due 2018," said
Standard & Poor's credit analyst Hal Diamond.
AMERICAN TITLE SERVICE: Voluntary Chapter 11 Case Summary
---------------------------------------------------------
Debtor: American Title Service Company
1350 17th Street, Suite 206
Denver, CO 80202
Case No.: 14-12894
Chapter 11 Petition Date: March 12, 2014
Court: United States Bankruptcy Court
District of Colorado (Denver)
Judge: Hon. Sidney B. Brooks
Debtor's Counsel: Steven R. Rider, Esq.
BLOCK MARKUS WILLIAMS
1700 Lincoln St., Ste. 4550
Denver, CO 80203
Phone: 303-830-0800
Fax: 303-830-0809
Email: srider@markuswilliams.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Thomas M. Kim, chief wind-down manager.
The Debtor did not file a list of its largest unsecured creditors
when it filed the petition.
ARMORWORKS ENTERPRISES: Negotiating With C Squared
--------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that ArmorWorks Enterprises LLC, a producer of body armor
and vehicle armor for the military, undertook an auction process
that "failed to generate sufficient interest," company lawyer Todd
Burgess told the bankruptcy court in Phoenix at a hearing.
"The sale process appears to be dead if not on life support,"
according to Burgess, from Gallagher & Kennedy PA in Phoenix, the
report related.
As a consequence, the court-authorized auction wasn't held, and
the company won't be able to proceed with a March 4 confirmation
hearing for a Chapter 11 plan that would have paid creditors in
full, the report further related.
According to the report, there is still hope for a successful
reorganization, Burgess said, because the parties are reaching
agreement with manager and 40% owner C Squared Capital Partners
that would enable confirmation of a plan.
The lawyer for the official creditors' committee, S. Cary
Forrester, said his group no longer assumes ArmorWorks is solvent,
the report added.
About ArmorWorks Enterprises
Military armor systems provider ArmorWorks Enterprises, LLC, and
affiliate TechFiber LLC sought Chapter 11 protection (Bankr. D.
Ariz. Case Nos. 13-10332 and 13-10333) in Phoenix on June 17,
2013, along with a plan that resolves a dispute with a minority
shareholder and $3.5 million of financing that would save the
company from running out of cash.
ArmorWorks develops advanced survivability technology and designs
and manufactures armor and protective products. ArmorWorks has
produced over 1.25 million ceramic armor and composite armor
protection components for a variety of personnel armor, aircraft,
and vehicle applications.
The Debtors have tapped Todd A. Burgess, Esq., John R. Clemency,
Esq., Lindsi M. Weber, Esq., and Janel M. Glynn, Esq., at
Gallagher & Kennedy, as counsel; and MCA Financial Group, Ltd.,
as financial advisor. ArmorWorks estimated $10 million to
$50 million in assets and liabilities.
The U.S. Trustee for Region 14 appointed creditors to serve on an
Official Committee of Unsecured Creditors. Forrester & Worth,
P.L.L.C. represents the Committee as its general counsel.
As of May 26, 2012, ArmorWorks had total assets of $30.9 million
and total liabilities of $12.04 million.
ArmorWorks and TechFiber sought and obtained an order
(i) transferring the In re TechFiber, LLC chapter 11 case to
the Honorable Brenda Moody Whinery, the judge assigned to the
ArmorWorks Chapter 11 case, and (ii) authorizing the joint
administration of the Debtors' cases.
Judge Whinery approved on Dec. 30, 2013, the disclosure statement
explaining the bankruptcy-exit plan for the Debtors. The plan was
jointly proposed by the Debtors, C Squared Capital Partners LLC,
Anchor Management LLC, ArmorWorks Inc., William Perciballi and the
unsecured creditors' committee. The plan proposes to pay all
claims against and member equity interests in ArmorWorks and
Techfiber through a sale of assets or equity. Proceeds from the
sale will be used to pay off creditors and members of ArmorWorks.
Judge Whinery also has approved the bid process proposed by
ArmorWorks and Techfiber in connection with the sale of their
assets or equity of the reorganized companies. Pursuant to the
bid procedures, interested buyers were required to submit their
bids by Feb. 7. An auction will be held on Feb. 21 at the Phoenix
office of Gallagher & Kennedy, P.A. A status hearing regarding
the auction will be held on Feb. 19 while a hearing to consider
approval of the sale is scheduled for March 4.
BUENA VISTA GAMING: S&P Withdraws CCC+ Rating on New $220MM Notes
-----------------------------------------------------------------
Standard & Poor's Ratings Services withdrew its preliminary 'CCC+'
issue-level rating on Ione, Calif.-based Buena Vista Gaming
Authority (the Authority)'s proposed $220 million senior secured
notes due 2021, because the issue was never sold. At the same
time, S&P is withdrawing the preliminary 'CCC+' issuer credit
rating on Authority.
The Authority had planned to use the proceeds from the notes
issuance to finance the development and construction of the
Buenavue Casino. The proposed bond transaction has been
terminated and the Authority is pursuing other sources of
financing.
CARL'S FURNITURE: To Close 3 Remaining Stores, Won't File Ch.11
---------------------------------------------------------------
Cindy W. Hodnett, writing for Furniture Today, reported that
Carl's Furniture is closing its remaining three stores -- in
Coconut Creek, Pompano Beach and Fort Lauderdale, Florida --
and launching a private liquidation sale. APJL Consulting is
handling the going-out-of-business sale for Carl's.
In an interview with Furniture/Today, Carl's President Jeff Baker
said that the liquidation sale would start next week.
"The volume never came back after '08, but we are not planning on
filing bankruptcy or filing Chapter 11," he said. "We're closing
the stores in an orderly fashion, all customers that have
furniture on order will receive it, and all valid customer
deposits will be honored."
Carl's Furniture, Inc., filed a Chapter 11 petition (Bankr. S.D.
Fla. Case No. 11-24203) on May 24, 2011, represented by Robert C.
Furr, Esq., at Furr & Cohen, in Boca Raton, Florida, as counsel.
Carl's disclosed $6,145,947 in assets and $9,147,163 in
liabilities. Four affiliates also sought Chapter 11 protection.
The Debtors obtained $1 million of debtor-in-possession financing
from the existing owners.
According to Furniture/Today, Carl's emerged from bankruptcy in
2012 with three Florida stores following confirmation of its
reorganization plan, under which unsecured creditors received 8.5
cents on the dollar.
Furniture/Today noted that the former Top 100 furniture chain
split from Carl's Patio in 2008 with both companies continuing as
separate entities. Carl's Patio remains in business with nine
South Florida locations.
CASH STORE: To Voluntarily Delist from the NYSE
-----------------------------------------------
The Cash Store Financial Services Inc. will voluntarily delist its
common shares from The New York Stock Exchange. The Company's
decision to voluntarily delist its common shares was driven by a
number of factors, including its non-compliance with the NYSE's
market capitalization and shareholders' equity, as well as its
share price requirements.
The Company expects to file an application on Form 25 to notify
the U.S. Securities and Exchange Commission of its withdrawal of
its common shares from listing on the NYSE. The Company expects
that the last day of trading of its common shares on the NYSE will
be on March 3, 2014.
The decision to voluntarily delist its common shares from the NYSE
does not impact the Company's listing on the Toronto Stock
Exchange. The Company's common shares will continue to be listed
and traded on the TSX, subject to compliance with TSX continued
listing standards.
As previously announced, on April 2, 2013, the Company received
notice from the NYSE that it was not in compliance with the US$50
million market capitalization and stockholders' equity standard
for continued listing of its common shares on the NYSE. On
Aug. 29, 2013, the Company was notified that the NYSE accepted the
Company's plan to achieve compliance ("Plan of Compliance")
subject to an 18 month monitoring period as measured from the
April 2, 2013, notice.
On Feb. 24, 2014, the Company received an additional notice from
the NYSE that it had fallen below the NYSE's continued listing
criteria requiring listed companies to maintain an average closing
price of its listed common shares of not less than US$1.00 over a
consecutive 30 trading-day period.
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. 18, 2014, edition of the TCR, Standard &
Poor's Ratings Services said it lowered its issuer credit rating
on Edmonton, Alta.-based The Cash Store Financial Services Inc.
(CSF) to 'CCC' from 'CCC+'. The downgrade follows the Ontario
Superior Court of Justice's order that CSF is prohibited from
acting as a loan broker for its basic line of credit product
without a brokers license under the Payday Loans Act, 2008.
As reported by the TCR on Feb. 21, 2014, Moody's Investors Service
downgraded the Corporate Family of Cash Store Financial Services
Inc to Ca from Caa2. 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.
CEETOP INC: CYH Capital Stake at 9.8% as of Feb. 20
---------------------------------------------------
In a Schedule 13D filed with the U.S. Securities and Exchange
Commission, CYH Capital, LLC, disclosed that as of Feb. 20, 2014,
it beneficially owned 4,039,500 shares of common stock of Ceetop,
Inc., representing 9.86 percent of the shares outstanding. A copy
of the regulatory filing is available at http://is.gd/Fdlq5I
About Ceetop Inc.
Oregon-based Ceetop Inc., formerly known as China Ceetop.com,
Inc., owned and operated the online retail platform before 2013.
Due to excessive competition in online retail, the Company has
transformed itself into an integrated supply chain services
provider, and focuses on B to B supply chain management and
related value-added services among enterprises.
China Ceetop's balance sheet at June 30, 2013, showed $3.5 million
in total assets, $4.0 million in total liabilities, and a
stockholders' deficit of $463,482.
Going Concern Uncertainty
"For the year ended Dec. 31, 2012, our independent auditors, in
their report on the financial statements, have indicated that the
Company has experienced recurring losses from operations and may
not have enough cash and working capital to fund its operations
beyond the very near term, which raises substantial doubt about
our ability to continue as a going concern. Management has made a
similar note in the financial statements. As indicated herein, we
must raise capital for the implementation of our business plan,
and we will need additional capital for continuing our operations.
We do not have sufficient revenues to pay our expenses of
operations. Unless the Company is able to raise working capital,
it is likely that the Company either will have to cease operations
or substantially change its methods of operations or change its
business plan," the Company said in its quarterly report for the
period ended June 30, 2013.
CENGAGE LEARNING: Court Approves Bankruptcy-Exit Plan
-----------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of New York has
approved the bankruptcy-exit plan of textbook publisher Cengage
Learning Inc. on March 13, Stephanie Gleason, writing for The Wall
Street Journal, reported. The company said it is on track to
emerge from Chapter 11 on March 31.
According to the Journal, Judge Elizabeth Strong of the U.S.
Bankruptcy Court in Brooklyn, N.Y., gave its blessing to the plan,
which incorporates a creditor settlement reached through extensive
mediation led by fellow bankruptcy Judge Robert Drain. She
confirmed the plan, overruling several remaining objections at the
end of a hearing that lasted more than three hours.
"I'm satisfied with the entire record. The plan should be
confirmed and will be confirmed," the Journal cited Judge Strong
as saying during the hearing. "Thank you again for your
exceptional work."
Cengage lawyer Jonathan Henes of Kirkland & Ellis LLP called
Thursday "a pretty remarkable day" because it virtually concludes
the nine-month case that had been plagued with disagreements
between creditor groups, the Journal related. But the plan
ultimately received near-unanimous support from creditors, he
said.
The bankruptcy-exit plan reduces Cengage's debt by $4 billion and
provides senior lenders -- including Apax Partners LLP,
Searchlight Capital Partners, Kohlberg Kravis Roberts & Co.,
Oaktree Capital Management, Oak Hill Advisors, BlackRock Financial
Management Inc. and Franklin Mutual Advisers LLC -- with majority
equity in the restructured company, the report further related.
Cengage is also lining up $1.75 billion in new financing.
A full-text copy of Cengage's most recent version of the Plan,
dated March 12, 2014, is available at:
http://bankrupt.com/misc/CENGAGEplan0312.pdf
About Cengage Learning
Stamford, Connecticut-based Cengage Learning --
http://www.cengage.com/-- provides innovative teaching, learning
and research solutions for the academic, professional and library
markets worldwide. Cengage Learning's brands include
Brooks/Cole, Course Technology, Delmar, Gale, Heinle, South
Western and Wadsworth, among others. Apax Partners LLP bought
Cengage in 2007 from Thomson Reuters Corp. in a $7.75 billion
transaction. The acquisition was funded in part with $5.6 billion
in new debt financing.
Cengage Learning Inc. filed a petition for Chapter 11
reorganization (Bankr. E.D.N.Y. Case No. 13-bk-44106) on July 2,
2013, in Brooklyn, New York, after signing an agreement where
holders of $2 billion in first-lien debt agree to support a
reorganization plan. The plan will eliminate more than $4 billion
of $5.8 billion in debt.
First-lien lenders who signed the so-called plan-support agreement
include funds affiliated with BlackRock Inc., Franklin Mutual
Adviser LLC, KKR & Co. and Oaktree Capital Management LP. Second-
lien creditors and holders of unsecured notes aren't part of the
agreement.
The Debtors have tapped Kirkland & Ellis LLP's Jonathan S. Henes,
Esq., Christopher J. Marcus, Esq., and Christopher T. Greco, Esq.,
and Ross M. Kwasteniet, Esq., as bankruptcy counsel; Lazard
Freres & CO. LLC as financial advisor; Alvarez & Marsal North
America, LLC, as restructuring advisor; and Donlin, Recano &
Company, Inc., as claims and notice agent.
Arent Fox's Andrew I. Silfen, Esq., represents the statutory
committee of unsecured creditors.
Milbank, Tweed, Hadley & McCloy LLP's Gregory Bray, Esq., and
Lauren Cohen, Esq., represent the ad hoc group of holders of
certain first lien claims.
Davis Polk & Wardwell LLP's Damian S. Sohaible, Esq., and Darren
S. Klein, Esq., represent the agent under the First Lien Credit
Agreement.
Katten Muchin Rosenman LLP's Karen Dine, Esq., and David Crichlow,
Esq., represent the Indenture Trustee for the First Lien
Noteholders.
Akin Gump Strauss Hauer Feld LLP's Ira Dizengoff, Esq., and Ropes
& Gray LLP's Mark R. Somerstein, Esq., argue for CSC Trust Company
of Delaware as Second Lien Trustee.
Loeb & Loeb LLP's Walter H. Curchack, Esq., represents the
Indenture Trustee for the Senior PIK Notes.
Kilpatrick Townsend's Todd Meyers, Esq., represents the Indenture
Trustee for the Senior Unsecured Notes.
Jones Day's Lisa Laukitis, Esq., is counsel to Centerbridge
Partners LP.
Simpson Thacher & Bartlett LLP's Peter Pantaleo, Esq., represents
Apax Partners LP.
CENTERPOINT ENERGY: Fitch Affirms 'BB+' Jr. Sub. Debenture
----------------------------------------------------------
Fitch Ratings has affirmed the long-term Issuer Default Rating
(IDR) of CenterPoint Energy, Inc. (CNP) at 'BBB'. Fitch has also
affirmed the long-term IDR of CNP's subsidiaries CenterPoint
Energy Houston Electric, LLC (CEHE) and CenterPoint Energy
Resources Corp. (CERC) at 'BBB+' and 'BBB' respectively. The
Rating Outlook for all three companies is Stable. Approximately
$6 billion of outstanding long-term debt is affected.
Key Rating Drivers:
CenterPoint Energy, Inc. (CNP)
Regulated Operations Drive Performance
CNP's ratings and Outlook reflect the stability of earnings and
cash flow provided by its regulated utility operations. In 2013,
EBITDA from CNP's regulated business segments represented nearly
70% of consolidated EBITDA. Fitch considers CEHE's transmission
and distribution (T&D) operations in Texas as low risk due to the
absence of provider of last resort (POLR) obligations, no
commodity risks and an improving regulatory jurisdiction in Texas
that enables CEHE to recover its expenses and investments with
minimal time lag. CERC's gas distribution business benefit from
geographic diversity and various supportive recovery mechanisms.
Additionally, Texas's economy has consistently outperformed the
national average and fosters steady customer growth for both CEHE
and CERC's gas distribution segment.
Midstream Investments Add Risk
Fitch believes that the formation of midstream JV (Enable) and the
subsequent IPO will not meaningfully alter the overall business
strategy and operating risks as CNP and CERC will continue to
exercise significant operational and financial control indirectly.
In addition, Fitch believes that CNP and CERC will likely support
Enable under time of stress due to its strategic importance.
Though Fitch acknowledges that the midstream assets contributed by
CNP and its partner OGE are complementary and will enhance
operational scale, the earnings are directly affected by volatile
commodity prices and volumes as a result of fundamental supply and
demand. Enable mitigates such volatility by entering into fee
based contracts. For the year ended Dec. 31, 2013, approximately
76% of the gross margin was generated from fee-based contracts and
approximately 50% of gross margin was attributable to firm
contracts or contracts with minimum volume commitment.
Consistent Credit Metrics
Fitch expects CNP's credit metrics to remain in line with its
rating category and other diversified utility holding companies
with similar operating risks. Over the next three years,
excluding effects of securitization bonds at CEHE and
consolidating proportionately Enable's cash flows, earnings, and
leverage, Fitch estimates that CNP will produce funds from
operations (FFO) interest coverage, on average, of 4.8x and Debt-
to-EBITDA of 3.5x. In the past three years, FFO interest coverage
averaged 4.4x and Debt-to-EBITDA 3.4x.
Adequate Liquidity
Fitch believes that CNP and its subsidiaries have good liquidity.
CNP, CERC and CEHE have $1.2 billion, $600 million and $300
million revolver capacity respectively, all maturing on Sept. 9,
2018. For the year ended Dec. 31, 2013, $1.194 billion, $482
million and $296 million was available at CNP, CERC and CEHE,
respectively. The available credit capacity will be sufficient to
cover the limited debt maturities and shortfall of operating cash
needs in the next 12 to 18 months.
CenterPoint Energy Houston Electric, LLC (CEHE):
Low Risk T&D Business
CEHE's IDR and Stable Outlook reflect the low business risk of its
regulated electric transmission and distribution operations in
Texas. Fitch considers the regulatory environment in Texas
reasonably supportive to CEHE's credit profile. CEHE has the
ability to earn a return on its transmission and distribution
investments with minimal regulatory lag. In addition, CEHE bears
no commodity risk and does not maintain the provider of last
resort requirement like T&Ds in other jurisdictions.
Solid Service Territory
CEHE's Texas service territory has historically delivered strong
population and economic growth relative to national averages. The
unemployment rate in Texas was 6% in December 2013, below the
national average of 6.7%. At the peak of the financial crisis,
its unemployment rate was 8.2% compared to the national average of
10%. Houston metropolitan area's unemployment rate was 5.5% in
Dec. 2013. Driven by the strong economic environment, CEHE has
seen reasonably healthy customer growth of 2% per year.
Credit Metrics Well Positioned
Fitch expects CEHE's credit metrics to position well within its
rating category in the next three years. Fitch forecasts CEHE's
FFO interest coverage to average 4.4x and total debt-to-EBITDA to
average 2.6x over the next three years.
CenterPoint Energy Resources Corp. (CERC)
Relatively Stable Earnings
CERC's IDR and Outlook incorporate Fitch's expectations that the
company will continue to derive the majority of its earnings and
cash flows from its natural gas distribution operations with added
stability through fee-based earnings at Enable. CERC's cash flows
from gas distribution benefit from diversified service territories
and overall favorable recovery mechanisms in six states.
Midstream Investment Important but Volatile
Enable's performance will directly impact CERC's financial health
as CERC's share of Enable's EBITDA represents approximately 50% of
CERC's total EBITDA. CERC also continues to exercise significant
operational and financial control over Enable indirectly. Fitch
acknowledges that the formation of the JV and subsequently the IPO
will enhance scale, create synergy and equity funding sources.
However, earnings at Enable are directly impacted by volatile
commodity prices and market fundamentals which are beyond CERC's
control.
Midstream Guarantee
CERC provides a limited guarantee for Enable's three-year $1.05
billion bank term loan maturing in 2016. Such guarantee is
subordinated to CERC's existing debt and is of collection not
payment.
Rating Sensitivities:
CNP:
Positive
-- If CERC or CEHE is upgraded.
Negative
-- If CNP through CERC incurs substantial leverage to meet the
capital calls of Enable;
-- If CEHE, CERC or Enable is downgraded;
-- If Debt to EBITDA exceeds 4x on a sustained basis and/or FFO
Interest Coverage is less than 4x on a sustained basis.
CERC:
Positive
-- CERC could be upgraded if Enable issues a sizeable amount of
its economic interest to public shareholders, demonstrates a
sound operational track record, and upstreams stable
distributions.
Negative
-- CERC's ratings will be negatively impacted if the regulatory
construct governing the gas distribution subsidiaries
becomes unfavorable;
-- CERC incurs substantial leverage to meet the capital calls
of Enable;
-- Debt to EBITDA exceeds 4x on a sustained basis and/or FFO
interest coverage is less than 4x on a sustained basis.
CEHE:
Positive
-- Unlikely absent upgrade at CNP and CERC.
Negative
--The regulatory environment becomes contentious such that CEHE
is unable to receive timely and reasonable recovery in rates;
-- If Debt/EBITDA exceeds 3.7x and/or FFO interest coverage is
less than 3.5x on a sustained basis.
Fitch affirms the following ratings with a Stable Outlook:
CenterPoint Energy, Inc.
-- Long-term IDR at 'BBB';
-- Senior unsecured notes and pollution control revenue bonds
at 'BBB';
-- Secured pollution control revenue bonds at 'A';
-- Junior Subordinated Debenture (ZENS) at 'BB+';
-- Short-term IDR/Commercial paper at 'F2'.
CenterPoint Energy Houston Electric, LLC
-- Long-term IDR at 'BBB+';
-- First mortgage bonds at 'A';
-- Secured pollution control revenue bonds at 'A';
-- General mortgage bonds at 'A';
-- Unsecured Credit Facility at 'A-';
-- Short-term IDR at 'F2'.
CenterPoint Energy Resources Corp.
-- Long-term IDR at 'BBB';
-- Long-term senior unsecured notes at 'BBB';
-- Short-term IDR/Commercial paper at 'F2'.
CEREPLAST INC: Hearing on Cash Access Continued to March 20
-----------------------------------------------------------
The Bankruptcy Court, according to a minute entry, continued until
March 20, 2014, at 11:00 a.m., the hearing to consider Cereplast,
Inc.'s motion to:
a) use cash collateral in which Horizon Technology Finance
Company, successor to Compass Horizon Funding Company, LLC,
asserts an interest;
b) incur postpetition debt from ProCap Funding, in its capacity
as postpetition lender; and
c) grant adequate protection and provide security and other
relief to Horizon, as successor to Compass Horizon Funding
Company LLC and Horizon Credit I LLC, in its capacity as
the prepetition lender under the venture loan.
On March 10, 2014, Bankruptcy Judge James M. Carr authorized the
Debtor to, among other things:
a. incur interim postpetition financing not to exceed $250,000
at an interest rate of five percent per annum based on a
365-day year and actual days elapsed and maturing on
March 24, 2014, subject to extension and additional terms as
may be approved by the Court at the final hearing, from
postpetition lender; and
b. use emergency DIP financing to make a $31,300 payment to
creditor (and landlord) Whittymore, LLC for rent from the
petition date of Feb. 10, until March 20.
However, the Debtor is not authorized to (i) make any payments to
the postpetition lender on a superpriority basis or otherwise
prior to the final hearing; and (ii) pay professional fees.
The postpetition lender's claims on the emergency DIP financing
will be entitled to priority over all other administrative claims
pursuant to Bankruptcy Code Section 503(b)(1). Prior to the final
hearing, Emergency DIP Financing may not be repaid.
The original amount of the commitment under the ProCap Agreement
will be $1,000,000. Pursuant to the ProCap Agreement, the default
rate of interest is nine percent.
As adequate protection, Horizon is granted a security interest in
all real and personal property of the Debtor, including accounts
receivable, inventory and other property created or acquired
postpetition. The postpetition lender's security interest is
junior and subordinate to Horizon's security interest in the
Debtor's postpetition collateral.
A copy of the budget is available for free at:
http://bankrupt.com/misc/CEREPLASTINC_57_27_cashcollorder.pdf
Horizon objected to the Debtor's request, saying the Debtor's
motion for DIP funding either explicitly or implicitly seeks to
prime Horizon's senior lien position against the Debtor's assets
and makes no provision to adequately protect Horizon. Horizon
also asserted that (i) its interest in cash collateral is not
adequately protected; (ii) the DIP loan funds losses with no
Bankruptcy purpose; and the DIP loan cedes control to an insider.
About Cereplast Inc.
Seymour, Indiana-based Cereplast, Inc., filed for Chapter 11
bankruptcy protection (Bankr. S.D. Ind. Case No. 14-90200) on
Feb. 10, 2014. The Debtor disclosed $6,280,545 in assets and
$13,263,826 in liabilities as of the Chapter 11 filing.
Cereplast has developed and is commercializing proprietary bio-
based resins through two complementary product families: Cereplast
Compostables(R) resins which are compostable, renewable,
ecologically sound substitutes for petroleum-based plastics, and
Cereplast Sustainables(TM) resins (including the Cereplast Hybrid
Resins product line), which replaces up to 90 percent of the
petroleum-based content of traditional plastics with materials
from renewable resources.
In connection with the Bankruptcy Filing, the Company's common
stock began trading under a new trading symbol, "CERPQ" effective
Feb. 19, 2014.
Judge Basil H. Lorch III oversees the case. Cereplast is
represented by Tamara Marie Leetham, Esq., at Austin Legal Group,
as counsel.
Horizon Technology Finance Corporation, as successor to Compass
Horizon Funding Company LLC and Horizon Credit I, LLC, has asked
the Court to convert the Chapter 11 case to one under Chapter 7 of
the Bankruptcy Code. Horizon is lender to the Debtor under the
venture loan and security agreement dated Dec. 21, 2010, under
which Horizon extended credit totaling $4.0 million. Horizon has
been granted a security interest in all assets of the Debtor.
The debt due Horizon is in payment default. The sale of the
Collateral was scheduled for Feb. 11, 2014, but the Debtor sought
to restrain the sale in proceedings pending in the Superior Court
of the State of California, for the County of Los Angeles, as
Cause No. CGC-08-482329. The Debtor's request for a restraining
order was denied on Feb. 10, and the Chapter 11 case was commenced
on the same day.
Horizon is represented by Whitney L. Mosby, Esq., at Bingham
Greenebaum Doll LLP.
No official unsecured creditors' committee has been appointed in
the case.
CEREPLAST INC: March 20 Hearing on Motion to Convert Case
---------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Indiana
will convene a hearing on March 20, 2014, at 11:00 a.m., to
consider creditor Horizon Technology Finance, Inc.'s motion:
1) to convert to the Chapter 11 case of Cereplast, Inc., to
one under Chapter 7 of the Bankruptcy Code; and
2. for relief from stay.
Objections, if any, are due three days prior to hearing.
The Debtor, in response to Horizon's motion, stated that Horizon
moved for conversion based on cause, yet, failed to provide any
evidence to establish cause. Rather, Horizon is looking out for
its best interest to the detriment of the remaining creditors and
the Debtor's estate.
The Debtor added that Horizon's desire to convert the case to a
chapter 7 proceeding is purely motivated by its desire for
immediate payment. The Debtor is skeptical its competitor is a
legitimate buyer and knows of no other potential buyers that may
be interested in its assets.
As reported in the Troubled Company Reporter on Feb. 19, 2014,
Horizon is lender to the Debtor under the venture loan and
security agreement dated Dec. 21, 2010, under which Horizon
extended credit totaling $4.0 million. Horizon has been granted a
security interest in all assets of the Debtor.
Horizon's counsel, Whitney L. Mosby, Esq., at Bingham Greenebaum
Doll LLP, in Indianapolis, Indiana, asserted that the Debtor is
not actively operating its business, and has furloughed or laid
off its employees. Since the Petition Date, no authority has been
requested or granted to pay employees or to use cash collateral to
pay employees or operating expenses, including insurance necessary
to protect the assets of the estate, Ms. Mosby further asserts.
Continued delay and an extended period of business cessation will
result in a decline in the value of Horizon's collateral and all
of the Debtor's assets, the Debtor's counsel says. The Debtor
filed the bankruptcy petition solely as a means to stop Horizon's
sale of the Collateral, she added.
Horizon holds a secured claim against the collateral to secure a
debt of not less than $2.8 million. The debt due to Horizon is in
payment default. The sale of the Collateral was scheduled for
Feb. 11, 2014, but the Debtor sought to restrain the sale in
proceedings pending in the Superior Court of the State of
California, for the County of Los Angeles, as Cause No. CGC-08-
482329. The Debtor's request for a restraining order was denied
on Feb. 10, and the Chapter 11 case was commenced on the same day.
In the alternative, Horizon seeks relief from the automatic stay
so that it can proceed with its rights and remedies under
applicable non-bankruptcy law with respect to the Collateral. The
Debtor, according to Ms. Mosby, has not offered and is unable to
provide adequate protection to Horizon. Horizon wants the
Collateral securing the loan it extended to the Debtor abandoned
because the Collateral is burdensome to the estate and is of
inconsequential value to the estate.
About Cereplast Inc.
Seymour, Indiana-based Cereplast, Inc., filed for Chapter 11
bankruptcy protection (Bankr. S.D. Ind. Case No. 14-90200) on
Feb. 10, 2014. The Debtor disclosed $6,280,545 in assets and
$13,263,826 in liabilities as of the Chapter 11 filing.
Cereplast has developed and is commercializing proprietary bio-
based resins through two complementary product families: Cereplast
Compostables(R) resins which are compostable, renewable,
ecologically sound substitutes for petroleum-based plastics, and
Cereplast Sustainables(TM) resins (including the Cereplast Hybrid
Resins product line), which replaces up to 90 percent of the
petroleum-based content of traditional plastics with materials
from renewable resources.
In connection with the Bankruptcy Filing, the Company's common
stock began trading under a new trading symbol, "CERPQ" effective
Feb. 19, 2014.
Judge Basil H. Lorch III oversees the case. Cereplast is
represented by Tamara Marie Leetham, Esq., at Austin Legal Group,
as counsel.
No official unsecured creditors' committee has been appointed in
the case.
CEREPLAST INC: Sec. 341 Meeting on April 23; Schedules Filed
------------------------------------------------------------
Joseph F. McGonigal, the U.S. Trustee for Region 10, will convene
a meeting of creditors in the Chapter 11 case of Cereplast, Inc.,
on April 23, 2014, at 11:00 a.m. The hearing will be held at Room
115 Federal Building, New Albany.
Objections to dischargeability are due by June 23.
Meanwhile, Cereplast has filed with the U.S. Bankruptcy Court for
the Southern District of Indiana its schedules of assets and
liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $0
B. Personal Property $6,280,545
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $2,973,000
E. Creditors Holding
Unsecured Priority
Claims $31,508
F. Creditors Holding
Unsecured Non-Priority
Claims $10,259,317
----------- -----------
Total $6,280,545 $13,263,826
A copy of the schedules is available for free at:
http://bankrupt.com/misc/CEREPLASTINC_42_sal.pdf
About Cereplast Inc.
Seymour, Indiana-based Cereplast, Inc., filed for Chapter 11
bankruptcy protection (Bankr. S.D. Ind. Case No. 14-90200) on
Feb. 10, 2014.
Cereplast has developed and is commercializing proprietary bio-
based resins through two complementary product families: Cereplast
Compostables(R) resins which are compostable, renewable,
ecologically sound substitutes for petroleum-based plastics, and
Cereplast Sustainables(TM) resins (including the Cereplast Hybrid
Resins product line), which replaces up to 90 percent of the
petroleum-based content of traditional plastics with materials
from renewable resources.
In connection with the Bankruptcy Filing, the Company's common
stock began trading under a new trading symbol, "CERPQ" effective
Feb. 19, 2014.
Judge Basil H. Lorch III oversees the case. Cereplast is
represented by Tamara Marie Leetham, Esq., at Austin Legal Group,
as counsel.
Horizon Technology Finance Corporation, as successor to Compass
Horizon Funding Company LLC and Horizon Credit I, LLC, has asked
the Court to convert the Chapter 11 case to one under Chapter 7 of
the Bankruptcy Code. Horizon is lender to the Debtor under the
venture loan and security agreement dated Dec. 21, 2010, under
which Horizon extended credit totaling $4.0 million. Horizon has
been granted a security interest in all assets of the Debtor.
The debt due Horizon is in payment default. The sale of the
Collateral was scheduled for Feb. 11, 2014, but the Debtor sought
to restrain the sale in proceedings pending in the Superior Court
of the State of California, for the County of Los Angeles, as
Cause No. CGC-08-482329. The Debtor's request for a restraining
order was denied on Feb. 10, and the Chapter 11 case was commenced
on the same day.
Horizon is represented by Whitney L. Mosby, Esq., at Bingham
Greenebaum Doll LLP.
No official unsecured creditors' committee has been appointed in
the case.
CEREPLAST INC: Wants to Hire Austin Legal Group as Bankr. Counsel
-----------------------------------------------------------------
Cereplast, Inc., asks the U.S. Bankruptcy Court for the Southern
District of Indiana for permission to employ Austin Legal Group,
APC, as counsel.
ALG will, among other things, represent the Debtor at the meeting
of creditors and confirmation hearing, and any adjourned hearings
thereof.
Tamara M. Leetham, Esq., a partner at ALG, tells the Court that
these personnel will be assigned in the engagement and their
hourly rates are:
Ms. Leetham $350
Gina M. Austin, partner $350
Christopher J. Gabbard, attorney $175
Jeni A. Robinson, filing clerk $75
Other personnel to assist in the engagement will be compensated at
these hourly rates:
Partners $350
Associates $175 - $225
Paraprofessionals $75 - $150
Ms. Leetham adds that although the Debtor's engagement letter
references a flat fee of $35,000 and a retainer amount of $10,000,
ALG was paid a total of $31,785 in prepetition fees and did not
receive a retainer to be drawn upon. The $31,785 constitutes full
payment of prepetition legal fees and there are no prepetition
fees outstanding.
A copy of Austin Fee Agreement is available for free at:
http://bankrupt.com/misc/CEREPLASTINC_51_debtor_austinfeeagreement.pdf
Ms. Leetham can be reached at:
Tamara M. Leetham, Esq.
AUSTIN LEGAL GROUP, APC
3990 Old Town Avenue, Suite A112
San Diego, CA 92110
Tel: (619) 924-9600
Fax: (619) 881-0045
E-mail: tamara@austinlegalgroup.com
About Cereplast Inc.
Seymour, Indiana-based Cereplast, Inc., filed for Chapter 11
bankruptcy protection (Bankr. S.D. Ind. Case No. 14-90200) on
Feb. 10, 2014. The Debtor disclosed $6,280,545 in assets and
$13,263,826 in liabilities as of the Chapter 11 filing.
Cereplast has developed and is commercializing proprietary bio-
based resins through two complementary product families: Cereplast
Compostables(R) resins which are compostable, renewable,
ecologically sound substitutes for petroleum-based plastics, and
Cereplast Sustainables(TM) resins (including the Cereplast Hybrid
Resins product line), which replaces up to 90 percent of the
petroleum-based content of traditional plastics with materials
from renewable resources.
In connection with the Bankruptcy Filing, the Company's common
stock began trading under a new trading symbol, "CERPQ" effective
Feb. 19, 2014.
Judge Basil H. Lorch III oversees the case. Cereplast is
represented by Tamara Marie Leetham, Esq., at Austin Legal Group,
as counsel.
Horizon Technology Finance Corporation, as successor to Compass
Horizon Funding Company LLC and Horizon Credit I, LLC, has asked
the Court to convert the Chapter 11 case to one under Chapter 7 of
the Bankruptcy Code. Horizon is lender to the Debtor under the
venture loan and security agreement dated Dec. 21, 2010, under
which Horizon extended credit totaling $4.0 million. Horizon has
been granted a security interest in all assets of the Debtor.
The debt due Horizon is in payment default. The sale of the
Collateral was scheduled for Feb. 11, 2014, but the Debtor sought
to restrain the sale in proceedings pending in the Superior Court
of the State of California, for the County of Los Angeles, as
Cause No. CGC-08-482329. The Debtor's request for a restraining
order was denied on Feb. 10, and the Chapter 11 case was commenced
on the same day.
Horizon is represented by Whitney L. Mosby, Esq., at Bingham
Greenebaum Doll LLP.
No official unsecured creditors' committee has been appointed in
the case.
CLEAVER-BROOKS INC: Moody's Assigns B2 CFR & Rates $37MM Notes B2
-----------------------------------------------------------------
Moody's Investors Service assigned a B2 rating to C-B Stage I,
Inc's., $37 million of notes that are being issued to help fund
the $43 million acquisition of a related business operating
primarily in the southern and mid-western United States ("the
Target"). C-B Stage I, Inc., is a wholly-owned unrestricted
subsidiary of Cleaver-Brooks, Inc. ("Cleaver") which will merge
with Cleaver-Brooks, Inc., upon the close of the acquisition of
the Target. This will result in an add-on of $37 million to
Cleaver's existing $300 million senior secured notes due 2019.
Concurrently, Moody's affirmed Cleaver's B2 corporate family
rating, the B2-PD probability of default rating, and the B2 rating
on the existing senior secured notes due 2019. The outlook remains
stable.
Issuer: C-B Stage I, Inc.
B2 (LGD4, 55%) rating assigned to $37 million of add-on senior
secured notes due December 2019;
Stable Outlook.
Issuer: Cleaver-Brooks, Inc.
Corporate family rating affirmed at B2;
Probability of default rating affirmed at B2-PD;
$300 million of senior secured notes due December 2019 affirmed
at B2 (LGD4, 55%)
Stable outlook maintained.
Ratings Rationale
The B2 corporate family rating reflects Cleaver's elevated
leverage with debt to EBITDA expected to be around 6.0x and the
company's relatively small scale-- even pro forma for the
acquisition-- with combined sales of approximately $400 million.
The rating also incorporates Cleaver's lack of diversification
outside its core boiler business and an exposure to end-markets
with cyclical attributes such as government spending and
education. Moody's notes that while Cleaver continues to face
significant asbestos claims, management believes that litigation
risk is largely mitigated through insurance and prior owner
indemnification. The rating is supported by Cleaver's strong brand
name and the company's leadership position within its niche end-
markets where it enjoys a number one or two market position for
the majority of its product categories. The rating is further
supported by Cleaver's profitable aftermarket exposure which
benefits from high margins as well as relatively strong industry
fundamentals driven by environmental regulation, improving fuel
efficiency of its boiler systems and ongoing investment in energy
infrastructure in North America. Moody's views the acquisition of
the Target and related senior note add-on offering as a largely
leverage-neutral transaction due to the Target's earnings
contribution and anticipates that the acquisition will help drive
penetration of Cleaver equipment and parts and expand the
company's capabilities.
Moody's expect Cleaver to maintain an adequate liquidity profile
over the next twelve to eighteen months supported by modest free
cash flow and substantial availability under the unrated $50
million senior secured asset based revolving credit facility due
2017.
The stable outlook reflects our expectation that growth prospects
over the next twelve months should result in a reduction in
leverage towards 5.0x and that liquidity will remain adequate. The
stable outlook does not anticipate any cash outflows or the
posting of collateral to fund asbestos litigation in the next
twelve months.
The company's ratings are unlikely to be upgraded given the high
degree of leverage, Cleaver's relatively small scale of
operations, and the overhang from continued asbestos litigation.
The ratings could be upgraded if debt-to-EBITDA were to decline
sustainably to 4.0 times and EBITA-to-Interest of 2.0 times was
anticipated. The ratings could be pressured by a decline in
revenues and profitability or an adverse change in the status of
asbestos litigation. Ratings could also be downgraded if progress
toward a more moderate leverage level proceeds sluggishly or if
free cash flow to total debt were to remain below 5%.
Moody's notes that C-B Stage I, Inc. is a special purpose entity
created to effect the acquisition of the Target and that C-B Stage
I, Inc. is not guaranteed by Cleaver-Brooks or any of its
operating subsidiaries. Moody's expects that debt raised in C-B
Stage I, Inc. will be held in escrow until the closing of the
acquisition of the Target at which time C-B Stage I, Inc. will
merge into Cleaver-Brooks and the C-B Stage I, Inc. notes will be
exchanged for new notes of Cleaver-Brooks that rank pari passu to
the existing $300 million senior secured notes due 2019. If the
merger does not close then funds in escrow will be used to redeem
the C-B Stage I, Inc. notes. Upon completion of the merger of C-B
Stage I, Inc. into Cleaver-Brooks, Moody's regards the C-B Stage
I, Inc. notes as ranking pari passu and being fully fungible with
the Cleaver-Brooks notes.
The principal methodology used in this rating was the Global
Manufacturing Industry published in December 2010. Other
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the U.S., Canada and EMEA
published in June 2009.
Cleaver-Brooks, Inc., headquartered in Thomasville, GA,
manufactures integrated proprietary boiler room systems including
boilers, burners, controls, components and accessories. The
boilers provide hot water, steam and, in some instances, localized
energy critical to operations in industrial, institutional and
commercial applications in a wide range of markets including
energy and petrochemical, healthcare, food and beverage, and
government. Revenue for the last twelve month period ended
December 31, 2013 was approximately $347 million. Pro forma for
the acquisition of the Target, annual revenues would have been
approximately $400 million. The Target is a boiler service company
operating primarily in the south and midwest.
CORNERSTONE CHEMICAL: Moody's Affirms 'B2' CFR; Outlook Negative
----------------------------------------------------------------
Moody's Investors Service has affirmed all ratings for Cornerstone
Chemical Company and revised the rating action to negative
following the company's announcement of plans for a debt-funded
dividend to its shareholders.
"Taking a debt-funded dividend while the company is still working
through recent operational issues and long before the company
starts receiving the benefit of low-cost ammonia from a new
project stretches the boundaries of the B2 CFR and could lead to a
rating downgrade if operating performance does not improve in the
near-term," said Ben Nelson, Moody's Assistant Vice President and
Lead Analyst for Cornerstone Chemical Company.
The actions:
Issuer: Cornerstone Chemical Company
Corporate Family Rating, Affirmed B2
Probability of Default Rating, Affirmed B2-PD
$230 million Senior Secured Notes due 2018, Affirmed B3
(LGD4 58%)
Outlook, Revised to Negative from Stable
Ratings Rationale
The B2 CFR reflects single site operating risk, reliance on
volatile commodity chemicals, historical lack of free cash flow
generation, and aggressive financial policies. Cost advantages
associated with synergistic manufacturing processes, long-term
customer relationships, formula-based customer contracts, diverse
end markets, and adequate liquidity position support the rating.
The rating also recognizes Cornerstone's successful transition to
a standalone entity since its carve-out from Cytec in early 2011.
Cornerstone will fund a dividend to shareholders, including
private equity sponsor HIG Capital, by issuing $75 million Senior
PIK Toggle Notes due 2018 at a newly-formed holding company
("HoldCo") above Cornerstone ("OpCo"). The HoldCo notes will not
have guarantees from the OpCo and as such, will be structurally
subordinated to all debt at the OpCo. The existing B3 rating on
the $230 million Senior Secured Notes due 2018 is unchanged. While
the first interest payment will be made in cash, subsequent cash
payments will be subject to the restricted payments provision in
the existing debt at the OpCo. While the maturity date is after
the credit facility and secured notes, Moody's noted that holding
company notes are often refinanced before maturity with an
increase in debt at the operating company.
Cornerstone has experienced operational issues with its melamine
unit, including a declaration of force majeure for 92 days in
2013, and while the company expects these issues will be resolved
during the next turnaround in March 2014, operating performance
has lagged expectations and liquidity is tighter than expected
than when Moody's assigned initial ratings in early 2013. The
debt-funded return of capital will increase adjusted financial
leverage to above 5 times (Debt/EBITDA), including Moody's
analytical adjustments, and limit the company's ability to reduce
total debt through internally-generated cash flow. These factors
drive the revision of the rating outlook to negative.
Providing the company can return to full capacity over the next
few months, Moody's expects credit measures to return to more
reasonable levels with leverage falling to below 5 times and free
cash flow turning positive. The melamine unit will undergo a
turnaround in March 2014 and operating performance should improve
in the second half of 2014. Over the longer term, the company
stands to benefit from lower-cost feedstock when Dyno Nobel starts
up an ammonia plant on Cornerstone's site in 2016. These factors
drive the affirmation of all ratings, including the B2 Corporate
Family Rating.
The negative outlook reflects weak credit metrics for the rating
category and execution risk in addressing recent operational
issues. Moody's could downgrade the rating with expectations for
leverage to remain in excess of 5 times, sustained negative free
cash flow, or deterioration in liquidity. Additional adverse
operating events or incremental debt could also result in a rating
downgrade. Moody's could stabilize the rating outlook with
leverage trending back toward 4 times, free cash flow of at least
3% of debt, and improved liquidity. Moody's could upgrade the
rating if Cornerstone reduces absolute debt levels and builds up a
substantial liquidity position to help offset the operating risk
associated with its single site profile.
The principal methodology used in this rating was the Global
Chemical Industry Rating 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.
Cornerstone Chemical Company produces chemicals such as
acrylonitrile, melamine, and sulfuric acid. Private equity firm
H.I.G. Capital LLC has owned the company since its carve-out from
Cytec Industries (Baa2 stable; "Cytec") in February 2011.
Headquartered in Waggaman, La., Cornerstone generated about $600
million of revenue in 2013.
COUNTRYWIDE FIN'L: U.S. May Increase Penalties for Former Exec
--------------------------------------------------------------
Julie Steinberg, writing for The Wall Street Journal, reported
that U.S. attorneys said in court on March 13 that they plan to
increase the civil penalties being sought from a former
Countrywide Financial Corp. executive found liable for committing
fraud for her role leading a loan-processing program.
According to the report, Assistant U.S. Attorney Pierre Armand
said in a hearing in front of U.S. District Judge Jed Rakoff that
the government planned to seek as much as $1.6 million from
Rebecca Mairone, the former Countrywide executive.
Ms. Mairone last October was found liable, along with Bank of
America Corp., for fraud related to loans the bank's Countrywide
unit sold in 2007 and 2008 to mortgage-finance firms Fannie Mae
and Freddie Mac in a program called the "Hustle," the report
related. Bank of America acquired Countrywide in 2008. Ms.
Mairone left the firm in 2012.
The government's move follows the disclosure that Ms. Mairone,
according to her lawyers, had recently received a bonus of
$487,000 for work she performed in 2013 for J.P. Morgan Chase &
Co., the report further related.
Prosecutors said in court that they were told of Ms. Mairone's
bonus on March 12, the report added.
About Countrywide Financial
Based in Calabasas, California, Countrywide Financial Corporation
(NYSE: CFC) -- http://www.countrywide.com/-- originated,
purchased, securitized, sold, and serviced residential and
commercial loans.
In mid-2008, Bank of America completed its purchase of Countrywide
for $2.5 billion. The mortgage lender was originally priced at $4
billion, but the purchase price eventually was whittled down to
$2.5 billion based on BofA's stock prices that fell over 40% since
the time it agreed to buy the ailing lender.
CROSSOVER FINANCIAL: Reineke Bid for Evidentiary Hearing Denied
---------------------------------------------------------------
The Bankruptcy Court denied creditor Ross Reineke's motion
relating to the classification of claims and effect upon
confirmation of Crossover Fianancial I LLC's Fifth Amended
Chapter 11 Plan of Reorganization.
The Court said Mr. Reineke failed to identify a single fact in
dispute that would require witness testimony. The only documents
relevant to the issue are the June Deed (Class 5 of the 5th Plan
consists of 108 holders of notes issued by the Debtor and secured
by a deed of trust in the Debtor's real estate recorded on June
25, 2010); and the March Deed (a corrective Deed of Trust filed on
March 21, 2011).
The Court said it is "at a loss" as to why an evidentiary hearing
would be necessary and Mr. Reineke failed to provide any
illumination on the matter.
Mr. Reineke filed an objection to the Plan, saying it is not fair
and equitable because the Plan does not require that Reineke
retain the liens securing his claims, or that Reineke receive
payments equal to the allowed amount of his claim secured claim,
or with a value equal to the present value of Reineke's interest
in the collateral securing his claim.
As reported in the Troubled Company Reporter on Dec. 5, 2013, the
Debtor filed its Fifth Amended Plan and an explanatory Disclosure
Statement in November 2013. The Debtor submitted another
iteration of its plan documents after the bankruptcy court denied
the adequacy of the information in the Fourth Amended Disclosure
Statement. The judge set a Nov. 20 deadline for the new plan
documents.
A copy of the Fifth Amended Disclosure Statement dated Nov. 20,
2013, is available for free at:
http://bankrupt.com/misc/Crossover_Financial_5th_DS.pdf
According to the Disclosure Statement, the Plan provides for the
orderly liquidation of estate property and for payment of
creditors in a fair and equitable manner. The Debtor will convey
estate assets, primarily the real estate, to the liquidating
trust. The Debtor has withdrawn the proposed sale to Rivers
Development, Inc. The liquidating trustee will determine the best
method for selling the property. The Debtor is informed and
believes that Rivers still intends to pursue the purchase of the
property through the liquidating trust.
The Fifth Amended Plan clarifies that the Bankruptcy Court's
retention of jurisdiction extends to potential disputes that may
arise from the administration of the liquidating trust.
About Crossover Financial I
Crossover Financial I, LLC, based in Elizabeth, Colorado, was
formed on Aug. 12, 2005. Mitchell B. Yellen is the manager and
sole member. The Company was formed for the purpose of raising
funds through a Private Placement Memorandum to be loaned to an
entity known as HPR, LLC, in connection with the acquisition and
development of 440 acres of real property located near Monument,
Colorado.
HPR consisted of three members: Colorado Commercial Builders, Inc.
(37.5%); DJT, LLC (20.0%); and Yellen Family Partnership, LLLP
(42.5%). Mitchell Yellen held an interest in the Yellen Family
Partnership, LLLP.
The project stalled primarily as a result of a collapse in the
residential real estate development market in 2007 and potential
developers pulled out of the project. There has been no
further development activity on the Real Property since 2007.
Faced with the prospect of a lengthy foreclosure proceeding, the
Debtor entered into to an agreement with HPR whereby the Real
Property was transferred to the Debtor by way of a deed-in-lieu
of foreclosure. Upon acquiring the Real Property, the Debtor
attempted to bring in additional developers to continue the
project but those efforts were unsuccessful.
The Company filed for Chapter 11 bankruptcy (Bankr. D. Colo. Case
No. 11-24257) on June 15, 2011. Judge Sidney B. Brooks presides
over the case.
Stephen C. Nicholls, Esq., at Nicholls & Associates, P.C., in
Denver, serves as bankruptcy counsel. In its petition, the Debtor
estimated assets and debts of $10 million to $50 million. The
petition was signed by Mitchell B. Yellen. Karen McClaflin of
Home Source Realty, LLC, Colorado acts as real estate broker for
the Estate.
An official unsecured creditors committee has not been appointed.
DEERFIELD RETIREMENT: Chapter 11 Plan Confirmed
-----------------------------------------------
Judge Anita L. Shodeen of the U.S. Bankruptcy Court for the
Southern District of Iowa confirmed on March 7, 2014, Deerfield
Retirement Community, Inc.'s prepackaged plan of reorganization
and approved the disclosure statement explaining the Plan.
The Debtor's prepackaged plan, which will return 69 cents on the
dollar to bondholders owed $40 million, was negotiated with
Lifespace and holders owning 63% of the outstanding principal
amount of the bonds.
On Nov. 18, 2013, the Debtor distributed its proposed prepackaged
plan of reorganization and disclosure statement to voting
creditors. Holders of first lien bond claims (98.1%) and
Lifespace voted in favor of the Plan. All other creditors did not
have their rights altered and were therefore unimpaired under the
Plan.
The Prepack Plan
The Debtor on Jan. 10 filed a Chapter 11 petition together with a
prepackaged plan that provides for these terms:
-- Each holder of the Senior Living Facility Revenue Refunding
Bonds (Deerfield Retirement Community, Inc.) Series 2007A and
Series 2007B Extendable Rate Adjustable Securities issued by the
Iowa Finance Authority will receive its pro rata share of (i)
$23,736,500 of Senior Living Facility Revenue Bonds (Deerfield
Retirement Community, Inc.) Series 2014A issued by the Iowa
Finance Authority ($580 in principal amount of Series 2014A Bonds
per $1,000 in Series 2007 Bonds held) and (ii) $4,452,640 of
Senior Living Facility Subordinate Revenue Bonds (Deerfield
Retirement Community, Inc.) Series 2014B issued by the Iowa
Finance Authority ($108.80 in principal amount of Series 2014B
Subordinate Bonds per $1,000 in Series 2007 Bonds held). Holders
of First Lien Bond Claims have a projected recovery of 69%.
-- Lifespace Communities will receive $1,000 of the Series
2014C Bonds in exchange for each $1,000 of principal amount its
first lien claims. Lifespace will have a recovery of 95% on
account of its $2,755,372 claim.
-- Lifespace, in exchange for the cancellation of approximately
$18,500,000 in unsecured obligations owing by Deerfield, will (i)
have the existing management agreement assumed as modified, (ii)
retain its approximately $300,000 claim to a resident refund and
(iii) retain its "member" status in Deerfield. Lifespace has a
projected recovery of 1.5% on account of its unsecured claims.
-- All allowed claims of other creditors, including unsecured
creditors and the residents, will be paid in full in accordance
with their normal terms and such claim holders shall otherwise
retain all of their rights against Deerfield. These claimants
will have a recovery of 100%.
About Deerfield Retirement Community
Deerfield Retirement Community, Inc., a nonprofit that owns a life
care retirement community known as "Deerfield Retirement
Community" located in Urbandale, Iowa. The facility is comprised
of 32 townhomes and 138 independent living apartments, common
areas, a residential care facility with 24 residential care living
units, and a health center with 30 skilled nursing care beds.
Lifespace Communities, Inc., is the sole member and provides
management services in exchange for a 5% share on revenues.
Deerfield filed a Chapter 11 bankruptcy protection (Bankr. D. Iowa
Case No. 14-00052) in Des Moines, Iowa on Jan. 10, 2014, with a
prepackaged plan that offers to return 69% to bondholders.
In its schedules, the Debtor listed $27.65 million in total assets
and $69.01 million in debt as of the bankruptcy filing. As of
the Petition Date, secured bonds are outstanding in the principal
amounts of $37,715,000 (Series 2007A Bonds) and $3,210,000 (Series
2007B Bonds). The Debtor also owes Lifespace Communities, Inc.,
$18.5 million under a subordinated agreement and a support
agreement.
Attorneys at Dorsey & Whitney LLP serve as counsel to the Debtor.
North Shores Consulting Inc. is the financial advisor.
DESIGNLINE CORP: Committee's Liquidation Plan Approved
------------------------------------------------------
U.S. Federal Bankruptcy Court Judge J. Craig Whitley on March 11
approved the disclosure statement and plan of liquidation proposed
by the official committee of unsecured creditors for DesignLine
Corp. and DesignLine USA, LLC, Susan Stabley, writing for the
Charlotte Business Journal, reported.
The report also said the Court gave parties in the DesignLine case
60 days to work out a class-action complaint filed by former
workers of the bus manufacturer.
The report noted that California businessman Tony Luo, as
president of Wonderland, acquired DesignLine's assets for $1.6
million at an October auction. He also bought the assets of
Metrolina Steel, also in a bankruptcy auction, for $1.2 million
for the purpose of building chassis for the buses.
As reported by the Troubled Company Reporter, under the Plan,
holders of prepetition secured claims, intercompany claims,
preferred stock equity interests, and common stock equity
interests stand to recover nothing. Holders of Allowed
Prepetition Secured Claims, estimated to amount to $28,021,467,
will receive the prepetition collateral or the proceeds of the
collateral.
Holders of Allowed Other Priority Claims, estimated to total
$250,184, will recover 100% of their claim amount. Holders of
Allowed Prepetition Deficiency Claim, estimated to total
$28,021,467, is expected to recover 4%. Holders of Allowed
Unsecured Claims is also expected to recover 4% of their total
claim amount, which is estimated at $3,713,922.
As reported by the TCR, the Court approved on Nov. 1, 2013, the
sale of substantially all of the assets of DesignLine Corp. to
Wonderland Investment Group, Inc., whose bid of $1.6 million for
the assets prevailed over six other qualified bidders at the
auction on Oct. 28.
The committee is represented by:
Michael J. Barrie, Esq.
Jennifer R. Hoover, Esq.
Benesch, Friedlander, Coplan & Aronoff LLP
222 Delaware Avenue, Suite 801
Wilmington, DE 19801
Tel: (302) 442-7010
Fax: (302) 442-7012
-- and --
Travis W. Moon, Esq.
Richard S. Wright, Esq.
Moon Wright & Houston, PLLC
227 West Trade Street, Suite 1800
Charlotte, NC 28202
Tel: (704) 944-6565
Fax: (704) 944-0380
About DesignLine
DesignLine Corporation manufactured coach, electric and range-
extended electric (hybrid) buses. Founded in Ashburton, New
Zealand in 1985, DesignLine was acquired by American interests in
2006, and DesignLine Corporations' headquarters was relocated to
Charlotte, North Carolina. DesignLine Corporation is no longer
affiliated with the DesignLine operations in New Zealand, which
was placed in liquidation in 2011.
DesignLine Corporation and DesignLine USA LLC originally sought
Chapter 11 protection with the U.S. Bankruptcy Court for the
District of Delaware (Lead Case Nos. 13-12089 and 13-12090), on
Aug. 15, 2013. Katie Goodman at GGG Partners LLC signed the
petitions as chief restructuring officer. On Sept. 5, 2013, the
case was transferred to the U.S. Bankruptcy Court for the Western
District of North Carolina (Case Nos. 13-31943 and 13-31944).
Mark D. Collins, Esq., and Michael Joseph Merchant, Esq., at
Richards, Layton & Finger, P.A.; and Terri L. Gardner, Esq., at
Nelson Mullins Riley & Scarborough, LLP, serve as the Debtors'
bankruptcy counsel. GGG Partners also serves as the Debtors'
financial advisors.
A five-member unsecured creditors panel has been appointed in the
Debtors' cases. Moon Wright & Houston PLLC and Benesch,
Friedlander, Coplan & Aronoff LLP are co-counsel to the Committee.
The Committee retained CBIZ MHM, LLC as financial advisors.
The Bankruptcy Judge has appointed Elaine T. Rudisill as the
chapter 11 trustee for the Debtors.
DETROIT, MI: Turns Bankruptcy Precedents Upside Down
----------------------------------------------------
Kevin Allison, writing for Reuters, reported that bondholders in
Detroit's $18 billion bankruptcy must feel like they're in a
mirror universe. A restructuring plan filed by the city's
emergency manager would effectively turn bankruptcy precedents
upside down by paying equity holders -- in this case, ordinary
Detroiters -- at the expense of secured creditors.
According to the report, such a shareholder-friendly approach
might save the city and anoint Judge Steven Rhodes a hometown
hero, but it may yet come at a market price.
The report said Detroit's Chapter 9 case is a long way from a more
familiar Chapter 11 bankruptcy. When a company can't make good on
its debts, shareholders get wiped out first, with creditors
carving up what's left.
Cities don't have shareholders, and there are few precedents to
the bankruptcy of a major municipality, but viewed through a
financial lens, residents arguably play a similar role, the report
said. They appoint management to run the city and they benefit
from its expenditures, whether it is police protection, sanitation
or other services -- a bit like equity holders sharing in a firm's
profits.
Far from getting wiped out, Detroit's citizen-shareholders appear
on track to get paid something, the report further related. A
plan of adjustment put forward by the city's state-appointed
emergency manager would set aside $1.5 billion over 10 years for
essential services like hiring cops and firefighters, getting the
street lights working and bulldozing abandoned buildings.
Meanwhile, even supposedly secured creditors are getting squeezed,
the report said. Judge Rhodes twice rejected the city's attempts
to strike a deal with UBS and Merrill Lynch over roughly $290
million they were owed to terminate a bad interest rate hedge. The
judge said the city was being too generous -- even though swaps
claims effectively function as secured debt under normal
bankruptcy law.
DILLARD'S INC: Moody's Hikes Corporate Family Rating to 'Ba1'
-------------------------------------------------------------
Moody's Investors Service upgraded Dillard's, Inc ratings
including its Corporate Family Rating to Ba1 and Probability of
Default Rating to Ba1-PD. At the same time, Moody's assigned a
Speculative Grade Liquidity rating at SGL-1 (very good). The
rating outlook is stable. The upgrade acknowledges Dillard's
ability to maintain its operating margin above 5.5% despite gross
margin erosion in the fourth quarter. It also reflects Moody's
belief that Dillard's ongoing disciplined inventory management
which supports quickly clearing out excess inventory will support
it maintaining operating margins around its current levels going
forward. The upgrade also indicates that Moody's expect Dillard's
to maintain leverage around its current levels and to continue to
maintain a modest level of debt.
"Dillard's continued to deliver solid operating earnings despite a
tepid consumer spending environment. Moody's believe its continued
inventory discipline supports it maintaining stable operating
margins going forward," stated Maggie Taylor a Senior Credit
Officer with Moody's.
The following ratings are upgraded:
Corporate Family Rating to Ba1 from Ba2
Probability of Default Rating to Ba1-PD from Ba2-PD
Senior unsecured notes rating to Ba2 (LGD 4, 64%) from Ba3
(LGD 4, 61%)
Senior subordinated to Ba3 (LGD 6, 97%) from B1 (LGD 6, 95%)
For Dillard's Capital Trust I
Backed Preferred Stock to Ba3 (LGD 6, 97%) from B1 (LGD 6, 95%)
The following rating is assigned:
Speculative Grade Liquidity rating at SGL-1
Affirmations:
Issuer: Dillard Investment Company, Inc.
Commercial Paper, Affirmed NP
Issuer: Dillard's, Inc.
Senior Unsecured Commercial Paper, Affirmed NP
Ratings Rationale
Dillard's Ba1 rating reflects its good credit metrics as a result
of its low level of funded debt which results in modest leverage.
It also reflects its ability to maintain its sales gains and
significant improvement in operating margin. Moody's believe that
Dillard's continued improvements in merchandising along with
ongoing disciplined inventory management are driving its ability
to maintain the improvements it has made in operating margins and
that its operating performance will be more predictable going
forward than it had been in the past. Dillard's rating is also
supported by its very good liquidity and its sizable portfolio of
company owned real estate.
While Dillard's improved credit metrics and good liquidity may be
representative of a higher rating, the rating is constrained by
its regional concentration in the southwest, southeast, and
midwest. This concentration results in Dillard's needing to
maintain credit metrics which are strong for its rating level
going forward. In addition, the rating is also constrained by the
possibility that Dillard's may at some time choose to use its REIT
to raise incremental debt. However, Moody's notes that Dillard's
has been reducing its debt levels over the past ten years.
Dillard's Speculative Grade Liquidity rating of SGL-1 represents
very good liquidity which acknowledges Dillard's solid free cash
flow generation and sizable $1 billion asset based revolving
credit facility which expires July 2018. For the year ended
February 1, 2014, Dillard's generated about $400 million in free
cash flow which was used to make about $300 million in share
repurchases. Moody's expects any excess cash flow generated in
2014 will also be used to finance share repurchases or a special
dividend. Dillard's only uses its revolving credit facility to
make seasonal borrowings. Moody's anticipates it will only use the
facility for seasonal borrowings going forward.
The stable outlook reflects Moody's view that Dillard's sales
growth will be very muted over the next twelve to eighteen months
and that operating margins will remain around their current
levels.
Ratings could be upgraded should Dillard's demonstrate a continued
track record of consistent performance including flat to modestly
positive comparable store sales while maintaining its current
operating margins specifically operating margin (excluding Moody's
standard adjustments) of 6%. In addition, quantitatively, ratings
would be upgraded should debt to EBITDA remain below 2.25 times
and EBITA to interest expense remain above 5.0 times. An upgrade
would also require a well articulated financial policy, including
transactions involving its REIT, that supports credit metrics
remaining at these levels. It would also require Dillard's to take
steps towards establishing a capital structure that is not reliant
on seasonal secured borrowings.
Given the recent upgrade, a downgrade is unlikely at the present
time. However, ratings could be downgraded should Dillard's
financial policy support it maintaining a higher level of debt or
should it experience a decline in either sales or operating
margins such that debt to EBITDA rises above 3.5 times or EBITA to
interest expense falls below 4.0 times. Ratings could also be
downgraded should Dillard's liquidity become weak.
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.
Dillard's, Inc., is a regional department store chain operating
278 retail stores and 18 clearance centers in 29 U.S. states, plus
an internet store. Dillard's retail stores are concentrated in the
southwest, southeast, and midwest. The company is headquartered in
Little Rock, Arkansas. Revenues are about $6.5 billion.
DOUGLAS DYNAMICS: 2013-14 Results No Impact on Moody's B1 Rating
----------------------------------------------------------------
Moody's Investors Service said that Douglas Dynamics' (B1 stable;
SGL-3) strong fourth quarter operating results and Moody's
expectations for a strong finish to the 2013-14 winter season are
credit positive, but have no ratings impact.
Douglas Dynamics LLC designs, manufactures, sells, and supports
snow and ice control equipment for light trucks. Headquartered in
Milwaukee, Wis., the company generated revenue of $194 million in
2013.
EASTMAN KODAK: Jeff Clarke Succeeds Antonio Perez as CEO
--------------------------------------------------------
Eastman Kodak Co., which emerged from Chapter 11 bankruptcy
protection last year, said it board of directors has chosen
Jeffrey Clarke as its new chief executive officer and a member of
its board. He succeeds Antonio Perez, who will serve as special
advisor to the board.
The Board of Directors of Eastman Kodak Company has elected
Jeffrey J. Clarke as Chief Executive Officer and a member of its
Board of Directors.
"Jeff is the right person to lead Kodak forward. His combination
of strengths and experience in technology, transformation,
finance, operations, and international business is precisely what
we set out to find in the next leader of Kodak. His past
leadership positions have included businesses selling hardware,
software and services, and printing -- with B2B customers as well
as consumers. The Board evaluated many highly qualified and
talented people during the search, but it was clear to all of us
that Jeff was the one we wanted. We feel extremely confident about
Kodak's prospects with Jeff at the helm," said James V.
Continenza, chairman of the board. "I thank Antonio Perez for his
excellent leadership of Kodak through its complex and successful
restructuring, and for solidifying our relationships with our
valued customers since that time."
Clarke, 52, said, "I have enormous respect for the people of
Kodak, and I am excited to join them in moving the company forward
to new successes. This enterprise has some extraordinary
opportunities, especially those presented by the company's
proprietary technology in commercial printing, packaging and
functional printing. Kodak has made excellent progress, building
on one of the most successful reorganizations in recent years, and
I look forward to continuing the work underway in transforming
Kodak into a global B2B technology leader.
"My first priority is to spend my time listening to Kodak's
employees, customers, partners and other stakeholders as part of a
detailed evaluation of our operations, market opportunities and
approach for success," continued Clarke. "Once that work is
complete, I look forward to sharing our conclusions."
Antonio M. Perez, now Special Advisor to the Board, said, "Jeff
Clarke is a talented and proven executive who is well qualified to
lead Kodak through our next era, which I believe will be one of
innovation and growth. I am excited about the next chapter in the
future of this great company."
Prior to joining Kodak, Clarke was a Managing Partner of Augusta
Columbia Capital (ACC), a private investment firm focused on
middle market technology and technology-enabled businesses that he
co-founded in 2012. Prior to ACC, Clarke was the Chairman of
Travelport, Inc., a private travel technology firm, where he
served as CEO from 2006-2011, after leading its sale from Cendant
Corporation to the Blackstone Group for $4.3 billion in 2006.
During his tenure, Travelport successfully launched an IPO for its
Orbitz business.
Clarke was the Chief Operating Officer of CA, Inc., an enterprise
software company, from 2004-2006, where he was responsible for
sales, services, distribution, corporate finance, mergers &
acquisitions, information technology, corporate strategy and
planning.
Clarke was an Executive Vice President at Hewlett-Packard Company
from 2002-2003. As EVP of Global Operations, he was responsible
for HP's worldwide supply chain, manufacturing, procurement and
internet operations (HP.com). He also co-led HP's merger
integration with Compaq Computer. Prior to HP, Clarke was the
Chief Financial Officer of Compaq Computer, which he joined in
1998 following the merger of Compaq with Digital Equipment
Corporation (DEC). At DEC from 1985-1998, he served in management
roles in international operations, finance and manufacturing.
Clarke will continue to serve as Chairman of Orbitz Worldwide, a
global online travel agency since 2007. He will also continue to
serve on the boards of directors of Red Hat, Inc., an enterprise
software company, and Compuware Corporation, an enterprise
software company.
Clarke earned an MBA from Northeastern University, where he serves
as a Trustee. He holds a B.A. in Economics from SUNY Geneseo. He
grew up in Hamilton, N.Y.
Egon Zehnder assisted Kodak with the CEO search process.
About Eastman Kodak
Rochester, New York-based Eastman Kodak Company (NYSE: KODK) --
http://www.kodak.com/-- is a technology company focused on
imaging for business. Kodak serves customers with disruptive
technologies and breakthrough solutions for the product goods
packaging, graphic communications and functional printing
industries. The company also offers leading products and services
in Entertainment Imaging and Commercial Films.
EASTMAN KODAK: Board Elects Jeff Clarke as Chief Executive Officer
------------------------------------------------------------------
The Board of Directors of Eastman Kodak Company has elected
Jeffrey J. Clarke as Chief Executive Officer and a member of its
Board of Directors.
"Jeff is the right person to lead Kodak forward. His combination
of strengths and experience in technology, transformation,
finance, operations, and international business is precisely what
we set out to find in the next leader of Kodak. His past
leadership positions have included businesses selling hardware,
software and services, and printing -- with B2B customers as well
as consumers. The Board evaluated many highly qualified and
talented people during the search, but it was clear to all of us
that Jeff was the one we wanted. We feel extremely confident
about Kodak's prospects with Jeff at the helm," said James V.
Continenza, chairman of the board. "I thank Antonio Perez for his
excellent leadership of Kodak through its complex and successful
restructuring, and for solidifying our relationships with our
valued customers since that time."
Mr. Clarke, 52, said, "I have enormous respect for the people of
Kodak, and I am excited to join them in moving the company forward
to new successes. This enterprise has some extraordinary
opportunities, especially those presented by the company's
proprietary technology in commercial printing, packaging and
functional printing. Kodak has made excellent progress, building
on one of the most successful reorganizations in recent years, and
I look forward to continuing the work underway in transforming
Kodak into a global B2B technology leader.
"My first priority is to spend my time listening to Kodak's
employees, customers, partners and other stakeholders as part of a
detailed evaluation of our operations, market opportunities and
approach for success," continued Mr. Clarke. "Once that work is
complete, I look forward to sharing our conclusions."
Antonio M. Perez, now Special Advisor to the Board, said, "Jeff
Clarke is a talented and proven executive who is well qualified to
lead Kodak through our next era, which I believe will be one of
innovation and growth. I am excited about the next chapter in the
future of this great company."
Prior to joining Kodak, Mr. Clarke was a Managing Partner of
Augusta Columbia Capital (ACC), a private investment firm focused
on middle market technology and technology-enabled businesses that
he co-founded in 2012. Prior to ACC, Mr. Clarke was the Chairman
of Travelport, Inc., a private travel technology firm, where he
served as CEO from 2006-2011, after leading its sale from Cendant
Corporation to the Blackstone Group for $4.3 billion in 2006.
During his tenure, Travelport successfully launched an IPO for its
Orbitz business.
Mr. Clarke was the Chief Operating Officer of CA, Inc., an
enterprise software company, from 2004-2006, where he was
responsible for sales, services, distribution, corporate finance,
mergers & acquisitions, information technology, corporate strategy
and planning.
Mr. Clarke was an Executive Vice President at Hewlett-Packard
Company from 2002-2003. As EVP of Global Operations, he was
responsible for HP's worldwide supply chain, manufacturing,
procurement and internet operations (HP.com). He also co-led HP's
merger integration with Compaq Computer. Prior to HP, Mr. Clarke
was the Chief Financial Officer of Compaq Computer, which he
joined in 1998 following the merger of Compaq with Digital
Equipment Corporation (DEC). At DEC from 1985-1998, he served in
management roles in international operations, finance and
manufacturing.
Mr. Clarke will continue to serve as Chairman of Orbitz Worldwide,
a global online travel agency since 2007. He will also continue
to serve on the boards of directors of Red Hat, Inc., an
enterprise software company, and Compuware Corporation, an
enterprise software company.
Mr. Clarke earned an MBA from Northeastern University, where he
serves as a Trustee. He holds a B.A. in Economics from SUNY
Geneseo. He grew up in Hamilton, N.Y.
Egon Zehnder assisted Kodak with the CEO search process.
About Kodak
Kodak -- http://www.kodak.com-- is a technology company focused
on imaging for business. Kodak serves customers with disruptive
technologies and breakthrough solutions for the product goods
packaging, graphic communications and functional printing
industries. The company also offers leading products and services
in Entertainment Imaging and Commercial Films.
EASTMAN KODAK: Names Tech Veteran as CEO
----------------------------------------
Michael Calia, writing for The Wall Street Journal, reported that
Eastman Kodak Co. named tech industry veteran Jeff Clarke its new
chief executive as the stripped-down former photo giant presses on
with its reinvention.
According to the report, Mr. Clarke, 52 years old, will also
continue to serve as the chairman of online travel company Orbitz
Worldwide Inc., a role he has held since 2007.
Mr. Clarke previously worked as an executive with Hewlett-Packard
Co., where he helped integrate Compaq Computer Corp., and he co-
founded the tech-focused investment firm Augusta Columbia Capital
in 2012, the report related.
The move comes as Kodak, a name synonymous with the fading
industry of film-based photography, seeks to achieve new relevance
in a digital world, the report pointed out. The company emerged
from Chapter 11 restructuring in September with a focus on
commercial imaging.
"This enterprise has some extraordinary opportunities, especially
those presented by the company's proprietary technology in
commercial printing, packaging and functional printing," Mr.
Clarke said, the report cited. "Kodak has made excellent
progress, building on one of the most successful reorganizations
in recent years, and I look forward to continuing the work under
way in transforming Kodak into a global B2B technology leader."
EASTON-BELL SPORTS: Robust Auction Not Expected for Hockey Unit
---------------------------------------------------------------
Sarah Pringle, writing for The Deal, reported that private equity-
backed Easton-Bell Sports Inc. is looking to shed its hockey
equipment business less than a month after agreeing to sell its
baseball and softball division for $330 million in cash.
According to the report, sources indicate the struggling Van Nuys,
Calif., sporting goods maker will be able to sell the hockey unit,
but not necessarily at a great price.
"There are only really a couple of buyers out there in the hockey
space," Ken Wasik, managing director of Stephens Inc.'s consumer
group, told The Deal in a phone interview. According to Wasik,
Bauer Performance Sports Ltd. and Reebok International Ltd.'s CCM
Hockey are the most likely suitors for Easton's hockey business.
Other players, such as Nike Inc. and Under Armour Inc., "don't
want any part of it," he added.
It was Exeter, N.H.-based Bauer on Feb. 13 that bought Easton's
baseball and softball equipment division for an above-average
multiple of 9 times Ebitda, the report recalled. The company at
the time also said it would sell its hockey business.
According to Allegiance Capital Corp. investment banker Jeffrey
Gross, privately held sporting goods businesses with big brand
names typically sell for about 8 times Ebitda, whereas smaller
players usually command closer to 5 or 6 times Ebitda, the report
related.
* * *
The Troubled Company Reporter, on Oct. 1, 2013, reported that
Moody's Investors Service downgraded Easton-Bell Sports, Inc.'s
speculative grade liquidity rating to SGL 3 from SGL 2 because of
Moody's expectation of modest free cash flow and the potential for
diminished revolver capacity if revolver borrowings are used to
repay the $145 million Holdco notes in the next couple of years.
The change in the outlook to negative from stable reflects the
risk that the company's earnings will continue to moderate driving
leverage above 7 times, one of the thresholds set for a possible
downgrade.
ELIAS PARTNERS: Case Summary & 7 Unsecured Creditors
----------------------------------------------------
Debtor: Elias Partners LLC
3030 N. Rocky Point Dr. West, Suite 150
Tampa, FL 33607
Case No.: 14-02668
Chapter 11 Petition Date: March 12, 2014
Court: United States Bankruptcy Court
Middle District of Florida (Tampa)
Judge: Hon. Michael G. Williamson
Debtor's Counsel: Alberto F Gomez, Jr., Esq.
JOHNSON POPE BOKOR RUPPEL & BURNS, LLP
403 East Madison Street, Suite 400
Tampa, FL 33602
Phone: 813-225-2500
Fax: 813-223-7118
Email: al@jpfirm.com
Estimated Assets: $100,000 to $500,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Adil R. Elias, manager.
A list of the Debtor's seven largest unsecured creditors is
available for free at http://bankrupt.com/misc/flmb14-2668.pdf
ENERGY XXI: Moody's Affirms B2 CFR & B2 Senior Unsecured Rating
---------------------------------------------------------------
Moody's Investor Service affirmed Energy XXI Gulf Coast, Inc.'s
(EXXI) B2 Corporate Family Rating (CFR) and B3 senior unsecured
rating following the announcement that EXXI will acquire EPL Oil &
Gas, Inc. (EPL) for a total consideration of roughly $2.3 billion.
Moody's also affirmed EPL's B2 CFR and B3 senior unsecured note
rating. EXXI's SGL-3 and EPL's SGL-2 Speculative Grade Liquidity
Ratings were affirmed simultaneously. The rating outlook remains
stable for both companies.
Issuer: Energy XXI Gulf Coast
Affirmations:
Corporate Family Rating, Affirm B2
Probability of Default Rating, Affirm B2-PD
Senior Unsecured Regular Bond/Debenture, Affirm B3 (LGD5, 71%)
Speculative Grade Liquidity Rating, Affirm SGL-3
Outlook Action:
Maintain Stable Outlook
Issuer: EPL Oil & Gas, Inc.
Affirmations:
Corporate Family Rating, Affirm B2
Probability of Default Rating, Affirm B2-PD
Senior Unsecured Regular Bond/Debenture, Affirm B3 (LGD5, 71%)
Speculative Grade Liquidity Rating, Affirm SGL-2
Outlook Action:
Maintain Stable Outlook
Ratings Rationale
This is a leveraging transaction for EXXI although Moody's
recognize the significant scale enhancement that will make the
combined company the second largest player in the US Gulf of
Mexico (GoM) shelf. EXXI's production will increase by roughly 47%
and proved reserves by 44% and the company will have greater
exploration capability to stage organic growth. Given EPL's assets
are in close proximity to EXXI's current GoM footprint, meaningful
synergies can be achieved over the next 12-18 months. The oily
nature of EPL's assets should also expand margins. However, these
credit enhancing aspects of the transaction will be largely offset
by a material increase in EXXI's leverage since 65% of the
purchase price will be financed with debt. EXXI will issue $845
million of new debt and assume $720 million of EPL's existing
debt. Consequently, pro forma leverage metrics will look weak
relative to its peers in the B2 CFR category.
EXXI plans to finance the acquisition with $542 million of equity
and $845 million of debt. The company has committed financing in
place and does not anticipate any regulatory complications in
completing the transaction. The debt amount will ultimately
include some permanent financing (unsecured notes) and a pre-
payable component (revolver drawings) to enable debt reduction
without pre-payment penalties. Prior to closing, EPL will
terminate its $475 million revolving credit facility and EXXI will
increase its revolver by a similar amount to $1.675 billion. EPL's
$510 million 8.25% senior notes will remain outstanding in a newly
created subsidiary under EXXI that will merge into EPL, and will
have a downstream guarantee from EXXI until EPL's notes have been
redeemed. As a result, EPL's notes will rank pari passu with
EXXI's existing $1.9 billion notes, and ratings will remain the
same at B3 for both EXXI and EPL notes.
EXXI's rating outlook is stable although liquidity or financing
difficulties could prompt a negative outlook. Given the leveraging
impact of the acquisition, meaningful debt reduction is needed to
strengthen EXXI's credit profile. An upgrade could be considered
if EXXI can reduce debt to average production below $45,000 per
boe and maintain production near 70,000 boe per day. A negative
rating action or downgrade is unlikely in 2014 given EXXI's
projected adequate liquidity and enhanced operational and capex
flexibility.
The principal methodology used in these ratings was the Global
Independent Exploration and Production Industry Methodology
published in December 2011. Other methodologies used include Loss
Given Default for Speculative-Grade Non-Financial Companies in the
U.S., Canada and EMEA published in June 2009.
Energy XXI Gulf Coast, Inc. (EXXI) is an indirect wholly-owned
subsidiary of publicly listed Energy XXI (Bermuda) Limited and is
engaged in the exploration and production of oil, natural gas
liquids and natural gas in the shallow and deepwater of the US
Gulf of Mexico. EPL Oil & Gas, Inc. is a Houston, Texas based
independent E&P company with operations on state and federal
waters offshore Louisiana in the U.S. Gulf of Mexico.
ENTEGRIS INC: S&P Assigns BB CCR Following ATMI Acquisition Plan
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned a 'BB' corporate
credit rating to Billerica, Mass.-based Entegris Inc. The outlook
is stable.
At the same time, S&P assigned its 'BB+' issue-level rating and
'2' recovery rating to the company's proposed $460 million senior
secured first-lien term loan due 2021. The '2' recovery rating
indicates S&P's expectations for substantial (70%-90%) recovery in
the event of payment default. S&P also assigned its 'BB-' issue-
level rating and '5' recovery rating to the proposed $360 million
senior unsecured notes due 2022. The '5' recovery rating
indicates S&P's expectations for modest (10%-30%) recovery in the
event of payment default.
"The ratings on Entegris reflect the highly cyclical industry
conditions for semiconductor-related products, high customer
concentration risk, and pro forma leverage in the low-2x area,"
said Standard & Poor's credit analyst David Tsui.
Entegris is a provider of products and equipment used in
manufacturing semiconductor and other microelectronic devices,
with leading positions in contamination control and wafer storage
and transportation products. The acquisition of ATMI will provide
enhanced scale and product diversity, with strong market share in
hazardous gas storage and chemical cleaning products.
Entegris' "fair" business risk profile reflects its exposure to
the highly volatile semiconductor manufacturing industry and
limited financial resources compared to that of some of its direct
competitors, offset by long-term relationships with its customers.
Entegris, post-acquisition of ATMI, will derive about a third of
revenue from its five largest customers, presenting relatively
high customer concentration risk. S&P views Entegris' EBITDA
margins and return on capital as average for the technology
hardware sector. Entegris's volatility of profitability is higher
than average for hardware companies in S&P's assessment.
Entegris' "significant" financial risk profile reflects S&P's
expectation that adjusted debt to EBITDA, pro forma for the ATMI
acquisition, will be in the low-2x area. In calculating Entegris'
leverage, S&P's net against debt the portion of cash it regards as
surplus. Leverage is expected to decline over the subsequent 12
months to the mid- to high-1x area, due to S&P's expectation of
mid-single-digit semiconductor industry revenue growth and
moderate cost synergies. However, the current rating incorporates
S&P's expectation that the company's credit metrics will fluctuate
with the industry cycle.
The outlook is stable, reflecting S&P's expectation that the
company will successfully integrate the acquisition of ATMI, and
that an increasing share of revenue from consumable products will
mitigate historic revenue and cash flow volatility. Although the
acquisition will be debt financed, S&P expects Entegris to be able
to generate positive FOCF over the next year, and maintain
adjusted leverage below the mid-2x area over the near-to-
intermediate term.
FANNIE MAE: Egbert Perry to Replace Philip Laskawy as Chairman
--------------------------------------------------------------
Philip A. Laskawy, Chairman of the Board of Fannie Mae, notified
the Board that he will retire effective March 31, 2014, upon
reaching the mandatory retirement age for members of the Board of
Directors.
In its role as Fannie Mae's conservator, the Federal Housing
Finance Agency, in consultation with the Board of Directors, has
appointed Egbert Perry as Chairman effective March 31, 2014.
Egbert Perry has been a Fannie Mae director since December 2008.
Mr. Perry, 58, is the chairman and chief executive officer of The
Integral Group LLC. Founded in 1993 by Mr. Perry, Integral is a
real estate development, advisory and investment management
company based in Atlanta. Mr. Perry has approximately 35 years of
experience as a real estate professional, including work in urban
development, developing and investing in mixed-income, mixed-use
communities, affordable/work force housing and commercial real
estate projects in markets across the country. Mr. Perry
currently serves as Chair of the Advisory Board of the Penn
Institute for Urban Research and as a long-time trustee of the
University of Pennsylvania. Mr. Perry also served from 2002
through 2008 as a director of the Federal Reserve Bank of Atlanta.
About Fannie Mae
Federal National Mortgage Association, aka Fannie Mae, is a
government-sponsored enterprise that was chartered by U.S.
Congress in 1938 to support liquidity, stability and affordability
in the secondary mortgage market, where existing mortgage-related
assets are purchased and sold.
The U.S. Department of the Treasury owns Fannie Mae's senior
preferred stock and a warrant to purchase 79.9 percent of its
common stock, and Treasury has made a commitment under a senior
preferred stock purchase agreement to provide Fannie with funds
under specified conditions to maintain a positive net worth.
Conservatorship
Fannie Mae has operated under the conservatorship of the Federal
Housing Finance Agency since Sept. 6, 2008. Fannie Mae has not
received funds from Treasury since the first quarter of 2012. The
funding the company has received under the senior preferred stock
purchase agreement with the U.S. Treasury has provided the company
with the capital and liquidity needed to maintain its ability to
fulfill its mission of providing liquidity and support to the
nation's housing finance markets and to avoid a trigger of
mandatory receivership under the Federal Housing Finance
Regulatory Reform Act of 2008. For periods through March 31,
2013, Fannie Mae has requested cumulative draws totaling $116.1
billion. Under the senior preferred stock purchase agreement, the
payment of dividends cannot be used to offset prior Treasury
draws. Accordingly, while Fannie Mae has paid $35.6 billion in
dividends to Treasury through March 31, 2013, Treasury still
maintains a liquidation preference of $117.1 billion on the
company's senior preferred stock.
In August 2012, the terms governing the company's dividend
obligations on the senior preferred stock were amended. The
amended senior preferred stock purchase agreement does not allow
the company to build a capital reserve. Beginning in 2013, the
required senior preferred stock dividends each quarter equal the
amount, if any, by which the company's net worth as of the end of
the preceding quarter exceeds an applicable capital reserve
amount. The applicable capital reserve amount is $3.0 billion for
each quarter of 2013 and will be reduced by $600 million annually
until it reaches zero in 2018.
The amount of remaining funding available to Fannie Mae under the
senior preferred stock purchase agreement with Treasury is
currently $117.6 billion. Fannie Mae is not permitted to redeem
the senior preferred stock prior to the termination of Treasury's
funding commitment under the senior preferred stock purchase
agreement.
FIRST MARINER: Wins Court Approval of Auction Process
-----------------------------------------------------
Michael Bathon, substituting for Bill Rochelle, the bankruptcy
columnist for Bloomberg News, reports that bank holding company
First Mariner Bancorp won court approval of guidelines that will
govern the sale of its equity in its bank subsidiary through a
bankruptcy auction set for April 10.
Fist Mariner has a $4.8 million offer from an investor group to
buy its 16-branch Baltimore-based bank unit. The investor group
includes Priam Capital, Patriot Financial Partners, GCP Capital
Partners and TFO Financial Institutions Restructuring Fund LLC,
Bloomberg said. The investors agreed to capitalize the bank with
$85 million to $100 million, less the purchase price. They are
also offering to provide $2.5 million in financing for the
bankruptcy.
Interested parties may file competing bids on or before April 7.
If the company receives two or more bids, an auction will take
place on April 10. The hearing to consider approval of the sale
will be on April 14. It will scrap the auction and hold a sale
hearing April 11 if it doesn't get any other qualified bids, the
Bloomberg report said.
The bidding procedures faced opposition from the official
committee of unsecured creditors, two indenture trustees for
subordinated creditors, and the U.S. Trustee. The committee,
according to Bloomberg, said First Mariner is proposing a "rushed
and fundamentally flawed sale of the debtor's assets for no good
reason."
The creditors said the proposed sale procedures foreclose "any
realistic possibility of a competing bid," Bloomberg added. The
panel faulted a proposal that any competing bidder must offer $7.8
million more than the stalking horse's $4.8 million bid. The
committee also said it's not possible to get regulatory approval
fast enough to complete the sale within one month, as First
Mariner proposed.
The U.S. Trustee, the Justice Department's bankruptcy watchdog,
said the auction procedures represent an effort to sell the bank
"without actual competitive bidding," Bloomberg also related.
Bidding rules "stack the deck" in favor of the investors,
according to the U.S. Trustee.
FIRST SECURITY: Incurs $646,000 Net Loss in Fourth Quarter
----------------------------------------------------------
First Security Group, Inc., reported a net loss of $646,000 on
$8.14 million of total interest income for the three months ended
Dec. 31, 2013, as compared with a net loss of $15.57 million on
$8.06 million of total interest income for the same period a year
ago.
For the year ended Dec. 31, 2013, the Company incurred a net loss
of $13.44 million on $31.91 million of total interest income as
compared with a net loss of $37.57 million on $36.31 million of
total interest income in 2012.
The Company's balance sheet at Dec. 31, 2013, showed $977.57
million in total assets, $893.92 million in total liabilities and
$83.64 million in total shareholders' equity.
"Last fall, we stated that it was essential to achieve significant
improvement in loan and revenue growth," said Michael Kramer,
First Security's president and chief executive officer. "With
nearly $50 million of loan growth and over $1 million of
improvement in non-interest expense in the fourth quarter, the
momentum towards a return to operating profitability is real and
within reach."
"Taking a step back and reviewing the steady quarterly improvement
from each consecutive quarter in 2013, we reduced non-interest
expense by at least $1 million each quarter while, at the same
time, increasing total revenues (net interest income plus non-
interest income) by an average of nearly $500 thousand each
quarter," said John Haddock, First Security's EVP and chief
financial officer. "While we will remain focused on improving our
operational efficiencies in 2014, we will also continue to
actively restructure our earning asset mix by growing loans and
reducing the excess liquidity in our investment portfolio to
improve our overall yield and margin."
A copy of the Report is available for free at:
http://is.gd/T3oiEn
About First Security Group
First Security Group, Inc., is a bank holding company
headquartered in Chattanooga, Tennessee. Founded in 1999, First
Security's community bank subsidiary, FSGBank, N.A., has 37 full-
service banking offices, including the headquarters, along the
interstate corridors of eastern and middle Tennessee and northern
Georgia and 325 full-time equivalent employees. In Dalton,
Georgia, FSGBank operates under the name of Dalton Whitfield Bank;
along the Interstate 40 corridor in Tennessee, FSGBank operates
under the name of Jackson Bank & Trust.
In the auditors' report accompanying the financial statements for
year ended Dec. 31, 2011, Joseph Decosimo and Company, PLLC, in
Chattanooga, Tennessee, expressed substantial doubt about the
Company's ability to continue as a going concern. The independent
auditors noted that the Company has recently incurred substantial
losses. The Company is also operating under formal supervisory
agreements with the Federal Reserve Bank of Atlanta and the Office
of the Comptroller of the Currency and is not in compliance with
all provisions of the Agreements. Failure to achieve all of the
Agreements' requirements may lead to additional regulatory
actions.
FTI CONSULTING: S&P Lowers CCR to 'BB'; Stable Outlook
------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on West Palm Beach, Fla.-based consulting firm FTI
Consulting Inc. to 'BB' from 'BB+'. The outlook is stable. At
the same time, S&P lowered its issue-level rating on the company's
senior unsecured debt to 'BB-' from 'BB'. The recovery rating on
this debt remains '5', indicating S&P's expectation for modest
(10%-30%) recovery for debtholders in the event of a payment
default.
The downgrade reflects S&P's expectation that FTI's 2014 operating
performance will be weaker than it previously expected, causing
leverage to increase and remain above 3x over the next 12-18
months. In particular, S&P expects the EBITDA margin to decline
in the company's economic consulting segment due to recent
consultant contract renewals at higher rates and continued
weakness in the corporate finance and restructuring business since
the U.S. corporate default rate remains very low.
FTI incurred significant restructuring charges during the last two
quarters of 2013, which had a sizeable impact on its EBITDA.
Although S&P views the company's ability to reduce headcount as
generally credit positive, these charges have had a significant
effect on leverage. S&P believes the company could incur
additional restructuring charges in 2014, which again would hurt
its credit metrics.
In 2013, FTI's EBITDA margin and leverage were 18.5% and 2.7x,
respectively. S&P expects the EBITDA margin to decline about 180
basis points and leverage to increase to the low-to mid-3x area in
2014. Based on S&P's business risk assessment of "fair" and its
financial risk assessment of "significant," the initial analytical
outcome (or "anchor") is 'bb'. A degree of uncertainty surrounds
the change in FTI's CEO, which occurred in December 2013, as well
as the extent to which this change could alter the company's
financial strategies during periods of operational weakness.
"We view FTI's business risk profile as "fair" because of the
company's dependence on highly mobile and sought-after senior
staff, and some earnings variability associated with its
restructuring practice. FTI relies on retaining its senior
managing directors, whose expertise clients seek and whose work
commands high billing rates and often repeat engagements. The
restructuring practice is a significant contributor to the
company's overall revenues and profitability, but its consultant
utilization and overall performance are under pressure from
relatively low corporate default rates. Additional factors
essential to earnings growth include increasing the hourly rate
charged to clients and balancing cost control with consultant
financial incentives. Our assessment also reflects positive
factors such as FTI's segment diversity, businesses not strictly
tied to the economic cycle, and discretionary cash flow
generation," S&P noted.
Individual segment performance can shift meaningfully based on the
state of the economy. FTI's corporate finance and restructuring
segment is countercyclical, while the economic consulting segment
tends to fluctuate with the level of economic activity. The
company has expanded its service offerings over the past few years
through acquisition, with increasing focus on certain specialized
industries, such as energy, health care, and telecommunications.
This broadening of industry expertise further supports the
company's competitive position. Still, international operations,
which accounted for 27% of 2013 sales, have lower profitability
than those of the company's U.S.-based operations because of less
scale and critical mass.
"We have revised our financial risk profile to "significant" from
"intermediate," based on our expectation for leverage to increase
to 3x-3.5x over the next 12-18 months. FTI has a history of
directing its cash flow to acquisitions and share repurchases.
The company has made numerous small-scale, cash flow-financed
acquisitions over the past few years. Still, despite its
successful incorporation of purchases into its businesses, the
company's acquisition strategy and integration risks remain
potential negative factors. The company's two-year, $250 million
share repurchase program expires in June 2014, of which $128.8
million remained as of Dec. 31, 2013," S&P added.
GENERAL AUTO: Court Enters Final Decree Closing Bankruptcy Case
---------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Oregon has entered a
final decree closing the Chapter 11 case of General Auto Building,
LLC.
As reported in the Troubled Company Reporter on Feb. 26, 2014, the
Company said its Chapter 11 plan of reorganization has been
"substantially" consummated, and that all matters that needed to
be completed upon its emergence from bankruptcy protection have
already been completed.
The Bankruptcy Court on July 11, 2013, confirmed General Auto's
restructuring plan, which offered to pay all creditors in full or
in part over time from revenue generated by operations, cash
savings, and from the new investment in the company.
The restructuring plan also called for the cancellation of all
membership interests in General Auto upon its emergence from
bankruptcy. Pursuant to the plan, membership interests in the
reorganized company would be allocated pro rata among all new
investors.
About General Auto Building
General Auto Building, LLC, filed for Chapter 11 bankruptcy
(Bankr. D. Ore. Case No. 12-31450) on March 2, 2012. The Debtor
is an Oregon limited liability company formed in 2007 with its
principal place of business in Spokane, Washington. It was formed
to renovate and lease its namesake commercial property located at
411 NW Park Avenue, Portland, Oregon. As of the Petition date,
the Debtor has developed virtually all of the General Automotive
Building and has leased approximately 98% of the building's space
to retail and commercial tenants. The Debtor continues to seek
tenants for the remaining spaces.
Judge Elizabeth L. Perris presides over the case. Michael W.
Fletcher, Esq., Albert N. Kennedy, Esq., and Ava L. Schoen, Esq.,
at Tonkon Torp LLP, serve as the Debtor's counsel.
The Debtor has scheduled $10,010,620 in total assets and
$13,519,354 in total liabilities.
The U.S. Trustee was unable to appoint an official committee of
unsecured creditors in the case.
As reported in the TCR on Aug. 1, 2013, the Court confirmed the
Debtor's Fifth Amended Plan. A copy of the confirmation order is
available at http://bankrupt.com/misc/generalauto.doc440.pdf
Thereafter, Judge Perris denied Park & Flanders LLC's motion to
reconsider the order confirming the Fifth Amended Plan, dated
Feb. 11, 2013. Judge Perris said she is not convinced that Park &
Flanders has demonstrated a basis for reconsideration of the
confirmation order.
GENERAL MOTORS: Urged to Waive Bankruptcy Immunity for Suits
------------------------------------------------------------
Todd Spangler, writing for Detroit Free Press, reported that auto
safety advocates are urging General Motors to waive its post-
bankruptcy immunity to legal claims connected to an ignition
switch defect that has led to the recall of 1.6 million vehicles.
According to the report, as a condition of the taxpayer-financed,
government-supervised bankruptcy restructuring of GM in 2009, the
automaker was given immunity from product liability or wrongful
death claims arising from accidents that occurred before it exited
bankruptcy on July 10, 2009.
Clarence Ditlow, who runs the Center for Auto Safety, and John
Claybrook, a former head of the National Highway Traffic Safety
Administration, signed a letter to GM CEO Mary Barra that also
asked GM to set up a $1 billion fund "to cover losses of victims
and families of safety defects whose claims have been extinguished
by the bankruptcy or barred by statues of repose or limitations,"
the report related.
Of the 12 deaths the company has reported to be tied to accidents
in which the defective ignition switch was a factor, at least five
happened before GM's bankruptcy, the report further related.
In recent weeks, GM ordered the recall of the 2005-07 Chevrolet
Cobalt, 2007 Pontiac G5, 2006-07 Chevy HHR, 2003-7 Saturn Ion,
2006-7 Pontiac Solstice and 2007 Saturn Sky in which a defective
ignition switch can inadvertently shut off the engine and disable
safety systems including airbags, the report noted.
About Motors Liquidation
General Motors Corporation and three of its affiliates filed for
Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 09-50026) on
June 1, 2009. The Honorable Robert E. Gerber presides over the
Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin,
Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges
LLP, assist the Debtors in their restructuring efforts. Al Koch
at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as
the Chief Executive Officer for Motors Liquidation Company. GM
is also represented by Jenner & Block LLP and Honigman Miller
Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP
is providing legal advice to the GM Board of Directors. GM's
financial advisors are Morgan Stanley, Evercore Partners and the
Blackstone Group LLP. Garden City Group is the claims and notice
agent of the Debtors.
The U.S. Trustee appointed an Official Committee of Unsecured
Creditors and a separate Official Committee of Unsecured
Creditors Holding Asbestos-Related Claims. Lawyers at Kramer
Levin Naftalis & Frankel LLP served as bankruptcy counsel to the
Creditors Committee. Attorneys at Butzel Long served as counsel
on supplier contract matters. FTI Consulting Inc. served as
financial advisors to the Creditors Committee. Elihu Inselbuch,
Esq., at Caplin & Drysdale, Chartered, represented the Asbestos
Committee. Legal Analysis Systems, Inc., served as asbestos
valuation analyst.
The Bankruptcy Court entered an order confirming the Debtors'
Second Amended Joint Chapter 11 Plan on March 29, 2011. The Plan
was declared effect on March 31.
On Dec. 15, 2011, Motors Liquidation Company was dissolved. On
the Dissolution Date, pursuant to the Plan and the Motors
Liquidation Company GUC Trust Agreement, dated March 30, 2011,
between the parties thereto, the trust administrator and trustee
-- GUC Trust Administrator -- of the Motors Liquidation Company
GUC Trust, assumed responsibility for the affairs of and certain
claims against MLC and its debtor subsidiaries that were not
concluded prior to the Dissolution Date.
GEO SAB: Mexican Home Builder to File for Bankruptcy
----------------------------------------------------
Emily Glazer and Amy Guthrie, writing for the Wall Street Journal,
reported that home builder Corporacion Geo SAB is preparing to
file for bankruptcy protection in Mexico to restructure a roughly
$1.5 billion debt load that has brought its output to a near-
standstill, people familiar with the company's plans said.
According to the report, Geo, hurt by problems in Mexico's low-
income housing sector, is preparing to file a streamlined
bankruptcy in a Mexican court. The company is in talks with a
creditor group on a $200 million to $300 million loan to fund its
restructuring, some of these people said. Geo has been in talks
for months with creditors based in Mexico, the U.S. and elsewhere,
the people said.
The company has negotiated with its bank lenders to reopen
construction lines of financing that had been frozen, these people
said, the report related. The funding would help Geo undertake
more than 20 projects and essentially restart its construction
business, they said.
Geo is one of three large Mexican home builders, along with Urbi
Desarrollos Urbanos SAB and Desarrolladora Homex SA, struggling
amid drastic changes in Mexico's housing sector, the report
further related. Though questions remain, a Geo bankruptcy filing
is the first step in a process that could keep it in business. And
if banks, other creditors and government officials support Geo's
strategy, other builders may be able to follow the same path and
avoid a shutdown.
Geo's debt includes just over $700 million in U.S. dollar-
denominated bonds as well as loans from some of Mexico's biggest
commercial banks, the report said.
GLEACHER & CO: Troubled Investment Bank To Liquidate
----------------------------------------------------
William Alden, writing for The New York Times' DealBook, reported
that Gleacher & Company, the troubled investment bank that had
tried unsuccessfully to sell itself, announced on March 13 that it
planned to liquidate its assets, closing up shop after 24 years.
According to the report, the bank, which was founded by the
longtime Wall Street deal maker Eric Gleacher, who left the firm
last year, said its board had unanimously decided that it was in
the best interest of shareholders to dissolve and liquidate the
company. The decision could spell the end of the boutique firm,
which had struggled since the financial crisis and had not
reported an annual profit since 2009.
Though the board pursued other options, ?the process to date has
not yielded any opportunities viewed by the board as reasonably
likely to provide greater realizable value to stockholders than
the complete dissolution and liquidation of the company,? Mark
Patterson, the chairman, said in a statement, the report cited.
Separately, Gleacher said on March 13 that it had a net loss of
$2.9 million, or 47 cents a share, in the fourth quarter of 2013,
the report related. That was narrower than the $11.3 million loss
it reported in the period a year earlier.
Shares of the bank, listed on the Nasdaq, fell more than 2
percent, to a little above $11, on the morning of March 13, the
report noted. The dissolution proposal is subject to a shareholder
vote at the annual meeting on May 29. If the liquidation proposal
is approved, the company plans to sell its assets and return the
cash to shareholders, after paying expenses and setting aside
reserves to cover any future claims.
GOLDEN STATE PETROLEUM: S&P Puts 'B-' Sec. Rating on Watch Pos.
---------------------------------------------------------------
Standard & Poor's Ratings Services said it placed its 'B-' senior
secured rating on Golden State Petroleum Transport on CreditWatch
with positive implications. The '4' recovery ratings are
unchanged.
"The CreditWatch placement reflects the positive impact on the
project of the announced sale of the VLCC Ulysses to a third
party," said Standard & Poor's credit analyst Rubina Zaidi.
The sale is expected to take place in the first half of March and
will comply with the provisions of the indenture, as amended and
supplemented, governing the company's 8.04% first preferred
mortgage notes due 2019.
According to the supplement to the indenture, Golden State had a
one-year window during which it was allowed to sell the vessel
after it came off charter on March 15, 2013. A sale was
permissible as long as the net proceeds from the sale, together
with the portion of the debt reserve account allocable to the
Ulysses, was sufficient to redeem the principal amount of notes
allocable to the vessel, plus accrued and unpaid interest to the
redemption date.
S&P expects to resolve the CreditWatch after the sale is complete
and, depending on the cash proceeds, S&P could raise the rating on
the project if liquidity prospects are sufficiently more robust.
GOLDKING HOLDINGS: Files Amendment No. 6 to Financing Agreement
---------------------------------------------------------------
Goldking Holdings, LLC, et al., filed Amendment No. 6 to their
Credit Agreement last month. The Amendment is not "material" and
operates solely to extend the post-financing milestones and credit
documents consistent with the Debtors' request for an extension of
their exclusivity periods.
On the Debtors' behest, Judge David Jones has extended the
Debtors' exclusive plan filing period through May 27, 2014, and
their exclusive plan solicitation period through July 27, 2014.
The Bankruptcy Court entered a final order, in early December last
year, authorizing the Debtors to obtain postpetition loans from
Wayzata Opportunities Fund II, LP, as successor administrative
agent to Bank of America, N.A.
Patrick L. Hughes, Esq., of Haynes and Boone, LLP, filed the
credit agreement amendment notice in early February 2014 on behalf
of the Debtors. (last month)
About Goldking Holdings
Goldking Holdings LLC, an oil-and-gas exploration company based in
Houston, sought bankruptcy protection (Bankr. D. Del. Case No.
13-12820) in Wilmington, Delaware, on Oct. 30, 2013, from
creditors with plans to sell virtually all its assets. Goldking
Onshore Operating, LLC, and Goldking Resources, LLC, also sought
creditor protection.
The cases were initially assigned to Delaware Judge Brendan
Linehan Shannon. On Nov. 20, 2013, Judge Shannon granted the
request of Goldking's former CEO Leonard C. Tallerine Jr. to move
the Chapter 11 case to Houston, Texas (Bankr. S.D. Tex. Case No.
13-37200). Mr. Tallerine owns a nearly 6% stake in the company
through an entity called Goldking LT Capital Corp.
The Debtors are represented by Scott W. Everett, Esq., and
Christopher L. Castillo, Esq., at Haynes And Boone, LLP. Robert
S. Brady, Esq., at Young, Conaway, Stargatt & Taylor, LLP, in
Wilmington, Delaware, serves as the Debtors' co-counsel. The
Debtors' notice, claims, solicitation and balloting agent is Epiq
Bankruptcy Solutions, LLC.
Lantana Oil & Gas Partners was initially hired as the Debtors'
financial advisors. In December 2013, the Debtors won Court
approval to employ E-Spectrum Advisors LLC, led by its CEO Coy
Gallatin, as asset sale advisor.
Alvarez & Marsal Global Forensic and Dispute Services, LLC, has
been engaged to provide computer forensics and related services.
Goldking Holdings disclosed $16,170 in assets and $11,484,881 in
liabilities as of the Chapter 11 filing.
Judy A. Robbins, United States Trustee for the Southern District
of Texas, appointed a three-member official committee of unsecured
creditors. Brinkman Portillo Ronk, APC, serves as counsel to the
Committee.
GRAND CENTREVILLE: Case Dismissal Hearing Continued to March 18
---------------------------------------------------------------
The Bankruptcy Court continued to March 18, 2014, at 11:00 a.m.,
the hearing to consider a motion to dismiss the Chapter 11 case of
Grand Centreville, LLC.
As reported in the Nov. 6, 2013 edition of the Troubled Company
Reporter, Wells Fargo Bank, N.A. -- as trustee for the registered
holders of JP Morgan Chase Commercial Mortgage Securities Corp.,
Commercial Mortgage Pass-Through Certificates, Series 2005-CIBC13,
the secured creditor of Grand Centreville, LLC -- filed a motion
to dismiss the case. According to Wells Fargo, the Debtor's
bankruptcy proceeding should be dismissed for cause, pursuant to
11 U.S.C. Sec. 1112(b) for several reasons:
-- The Receiver did not have authority to initiate the
Bankruptcy Proceeding;
-- Even if the Receiver did have such authority, the
bankruptcy is both objectively futile and subjectively
filed in bad faith for the reasons:
(1) the Debtor is a financially healthy entity that has
no need to reorganize;
(2) the Debtor's only asset is the Shopping Center and
its associated property, which is the Secured
Creditor's Collateral;
(3) the Debtor has few unsecured creditors, whose
claims are small in comparison to those of the
Secured Creditor, the only secured creditor in
the case;
(4) the Shopping Center and its associated property
are subject to a foreclosure action as a result
of the Debtor's default on the Loan;
(5) the Debtor's financial condition is, in essence,
a two-party dispute between the Debtor and the
Secured Creditor which can be resolved in state
court proceedings;
(6) the timing of the Debtor's Bankruptcy Proceeding
indicates the Debtor's intent to delay or frustrate
the Secured Creditor's enforcement of its rights
under the Loan Documents; and
(7) the Debtor intended to use the automatic stay
provided by the Bankruptcy Code to prevent the
Secured Creditor from enforcing its rights under
the Loan Documents and as a litigation tactic
against Secured Creditor.
About Grand Centreville
Grand Centreville, LLC, filed a Chapter 11 petition (Bankr. E.D.
Va. Case No. 13-13590) on Aug. 2, 2013. The petition was signed
by Michael L. Schuett, principal of Black Creek Consulting Ltd.,
the receiver. Judge Robert G. Mayer presides over the case.
Paula S. Beran, Esq., and Lynn L. Tavenner, Esq., at Tavenner &
Beran, PLC, in Richmond, Va., represent the Debtor as counsel.
The Debtor owns the real property located at 13810-13860 Braddock
Road, Centreville, Virginia. In its schedules, the Debtor
disclosed $40,550,046 in assets and $26,247,602 in liabilities as
of the petition date.
Wells Fargo Bank, N.A. -- as trustee for the registered holders of
JP Morgan Chase Commercial Mortgage Securities Corp., Commercial
Mortgage Pass-Through Certificates, Series 2005-CIBC13, the
secured creditor of Grand Centreville, LLC -- has sought dismissal
of the Debtor's Chapter 11 case. It insists that the bankruptcy
case was filed in bad faith and that the Receiver has no standing
to file the bankruptcy petition.
GRAND CENTREVILLE: Receiver's Authority to File Plan Questioned
---------------------------------------------------------------
James R. Schroll, Esq., at Bean, Kinney & Korman, P.C., on behalf
of James Y. Sohn, opposed to Grand Centreville, LLC's third motion
for extension of exclusive periods to file and solicit acceptances
for the Chapter 11 Plan because (a) the Debtor has not established
cause to extend exclusivity; and (b) the receiver lacks the
authority to file a plan of reorganization on behalf of the Debtor
in the case, so any further extension would be futile.
The Debtor, through Black Creek Consulting, the receiver, sought
an extension of its plan filing period from March 17, 2014, to
July 31, and solicitation period until Sept. 29. According to the
receiver, the date requested in the exclusivity motion is related
to a settlement with the Debtor's secured lender, which is also
pending before the Court.
The Court extended the Debtor's exclusive plan filing period
through March 17, and its corresponding exclusive solicitation
period of any plan filed through May 16, 2014.
The Debtor tells the Court that a receiver has been working
diligently to manage, preserve the value for its creditors and
equity ownership, and develop a plan to efficiently and
effectively accomplish the same.
According to the Debtor, the extensions requested will not
prejudice the legitimate interests of any party in interest in
this case and will further its efforts to preserve, maximize, and
create value for the creditors and equity, and increase likelihood
of an orderly conclusion of this bankruptcy case.
About Grand Centreville
Grand Centreville, LLC, filed a Chapter 11 petition (Bankr. E.D.
Va. Case No. 13-13590) on Aug. 2, 2013. The petition was signed
by Michael L. Schuett, principal of Black Creek Consulting Ltd.,
the receiver. Judge Robert G. Mayer presides over the case.
Paula S. Beran, Esq., and Lynn L. Tavenner, Esq., at Tavenner &
Beran, PLC, in Richmond, Va., represent the Debtor as counsel.
The Debtor owns the real property located at 13810-13860 Braddock
Road, Centreville, Virginia. In its schedules, the Debtor
disclosed $40,550,046 in assets and $26,247,602 in liabilities as
of the petition date.
Wells Fargo Bank, N.A. -- as trustee for the registered holders of
JP Morgan Chase Commercial Mortgage Securities Corp., Commercial
Mortgage Pass-Through Certificates, Series 2005-CIBC13, the
secured creditor of Grand Centreville, LLC -- has sought dismissal
of the Debtor's Chapter 11 case. It insists that the bankruptcy
case was filed in bad faith and that the Receiver has no standing
to file the bankruptcy petition.
HOUSTON REGIONAL: Astros File Reply Brief in Appeal
---------------------------------------------------
Houston Astros LLC et al. on Monday filed with the federal
district court in Houston, Texas, a reply brief on account of its
appeal from the bankruptcy court order that officially placed
Houston Regional Sports Network, L.P., into Chapter 11 bankruptcy.
The district court appeal is captioned HOUSTON ASTROS, LLC, et
al., Appellants, -against- HOUSTON REGIONAL SPORTS NETWORK, L.P.,
et al., Appellees., Case No. 4:14-cv-304 (S.D. Tex.). District
Judge Lynn Hughes presides over the appeal.
In the 35-page reply brief, the Astros explained that:
-- none of the arguments by Comcast or the Rockets establish
a reasonable likelihood of rehabilitation exists for the
Debtor;
-- Comcast and the Rockets avoid addressing preemption, even
though the Network, its general partner, and the Astros-
appointed director do not owe fiduciary duties unless
valid state-law disclaimers are preempted;
-- fiduciary duties would fundamentally transform the Network
and result in termination;
-- the Bankruptcy Court recognized that reorganization is
futile absent fiduciary duties. Comcast's reorganization
proposals all lead to termination of the Media Rights
Agreement;
-- the Astros' director will not automatically veto any plan,
but no viable reorganization option exist;
-- none of the arguments by Comcast or the Rockets dispel
Comcast's incurable bad faith; and
-- the involuntary petition was filed in bad faith
David Barron, writing for The Houston Chronicle, reported that
Judge Hughes has not indicated when he will rule on the appeal.
A copy of the reply brief is available at no extra charge at:
http://bankrupt.com/misc/HOUSTONREGIONALAstrosBrief.pdf
About Houston Regional Sports Network
An involuntary Chapter 11 bankruptcy petition was filed against
Houston Regional Sports Network, L.P. d/b/a Comcast SportsNet
Houston (Bankr. S.D. Tex. Case No. 13-35998) on Sept. 27, 2013.
The involuntary filing was launched by three units of Comcast/NBC
Universal and a television-related company. The petitioners are:
Houston SportsNet Finance LLC, Comcast Sports Management Services
LLC, National Digital Television Center LLC, and Comcast SportsNet
California, LLC.
The petitioning creditors have filed papers asking the Bankruptcy
Judge to appoint an independent Chapter 11 trustee "to conduct a
fair and open auction process for the Network's business assets on
a going concern basis."
Houston Regional Sports Network is a joint enterprise among
affiliates of the Houston Astros baseball team, the Houston
Rockets basketball team, and Houston SportsNet Holdings, LLC --
"Comcast Owner" -- an affiliate of Comcast Corporation. The
Network has three limited partners -- Comcast Owner, Rockets
Partner, L.P., and Astros HRSN LP Holdings LLC. The primary
purpose of Houston Regional Sports Network is to create and
operate a regional sports programming service that produces,
exhibits, and distributes sports programming on a full-time basis,
including live Astros and Rockets games within the league-
permitted local territories.
Counsel for the petitioning creditors are Howard M. Shapiro, Esq.,
at Wilmer Cutler Pickering Hale and Dorr LLP; George W. Shuster,
Jr., Esq., at Wilmer Cutler Pickering Hale and Dorr LLP; Vincent
P. Slusher, Esq., at DLA Piper; and Arthur J. Burke, Esq., at
Davis Polk & Wardwell LLP.
Judge Marvin Isgur presides over the case.
The Network was officially placed into Chapter 11 bankruptcy
pursuant to a Feb. 7 Order for Relief.
Harry Perrin, Esq., represents Astros owner Jim Crane. Alan
Gover, Esq., represents the Rockets.
The Astros are represented by Richard B. Drubel, Esq., Colleen A.
Harrison, Esq., and Jonathan R. Voegele, Esq., at Boies, Schiller
& Flexner LLP, in Hanover, NH; and Scott E. Gant, Esq., at Boies,
Schiller & Flexner in Washington, DC. Comcast Corporation and
NBCUniversal Media, LLC, are represented by Vincent P. Slusher,
Esq., Eli Burriss, Esq., Andrew Mayo, Esq., and Andrew Zollinger,
Esq., at DLA Piper; Arthur J. Burke, Esq., Timothy Graulich, Esq.,
and Dana M. Seshens, Esq., at Davis Polk & Wardwell LLP; and
Howard M. Shapiro, Esq., and Craig Goldblatt, Esq., at Wilmer
Cutler Pickering Hale and Dorr LLP. Attorney for McLane
Champions, LLC and R. Drayton McLane, Jr., are Wayne Fisher, Esq.,
at Fisher Boyd & Huguenard, LLP.
HOUSTON REGIONAL: Astros Want Suit v. Comcast, NBC Remanded
-----------------------------------------------------------
Houston Baseball Partners LLC asked the U.S. Bankruptcy Court to
remand its lawsuit against McLane Champions, LLC, R. Drayton
McLane, Jr., Comcast Corporation and NBCUniversal Media, LLC, to
the 80th Judicial District Court, Harris County, Texas.
Comcast and NBCUniversal allege that the U.S. District Court for
the Southern District of Texas has original jurisdiction over the
adversary proceeding under 28 U.S.C. Sec. 1334(b).
Houston Baseball Partners on March 10 filed a Motion to Strike
Comcast Defendants' Notice of Removal, disputing the
jurisdictional allegations. Houston Baseball Partners said it
does not submit to the jurisdiction of the Bankruptcy Court or
intend for its Motion to Strike to constitute or effect a waiver
of any of its respective rights or the rights to which it may be
entitled, in law or in equity, all of which rights, claims,
actions, defenses, setoffs, or recoupments Partners expressly
reserves.
Houston Baseball Partners filed its Original Petition in the
District Court of Harris County, Texas, 80th Judicial District on
Nov. 21, 2013. On Nov. 29, the Comcast Defendants filed a Notice
of Removal in the U.S. Bankruptcy Court. The Comcast Defendants
filed nothing in the District Court for the Southern District of
Texas.
Houston Baseball Partners is the corporate name for the investor
group headed by Jim Crane, owner of the Houston Astros baseball
club. Mr. McLane is the former Astros owner.
* * *
David Barron, writing for The Houston Chronicle, reported that the
request comes a week before Bankruptcy Judge Marvin Isgur is
scheduled to hold a long-delayed hearing in the lawsuit, which his
an offshoot of the Chapter 11 bankruptcy case involving the parent
company of Comcast SportsNet Houston. Houston Baseball Partners
alleges that Mr. McLane, Comcast and NBC Universal conspired to
commit fraud in conjunction with Mr. McLane's sale of the Houston
Astros and their 46.5% share of Houston Regional Sports Network in
2011. Houston Regional Sports Network is the parent company of
CSN Houston and is a partnership among the Astros, Rockets (31%
ownership) and Comcast (22.5%).
Mr. Barron also reported that there was no immediate word on
whether Judge Isgur would schedule a hearing on the matter. He is
scheduled on March 18 to hear updates in the Crane-McLane lawsuit
and is scheduled May 12 to hear testimony on an earlier Astros
motion to send the case back to state court.
Counsel for Houston Baseball Partners LLC are:
Richard B. Drubel, Esq.
Colleen A. Harrison, Esq.
Jonathan R. Voegele, Esq.
BOIES, SCHILLER & FLEXNER LLP
26 South Main Street
Hanover, NH 03755
Telephone: (603) 643-9090
Facsimile: (603) 643-9010
E-mail: rdrubel@bsfllp.com
charrison@bsfllp.com
jvoegele@bsfllp.com
- and -
Scott E. Gant, Esq.
BOIES, SCHILLER & FLEXNER LLP
5301 Wisconsin Ave. NW
Washington, DC 20015
Telephone: (202) 237-2727
Facsimile: (202) 237-6131
E-mail: sgant@bsfllp.com
Attorneys for Comcast Corporation and NBCUniversal Media, LLC,
are:
Vincent P. Slusher, Esq.
Eli Burriss, Esq.
Andrew Mayo, Esq.
Andrew Zollinger, Esq.
DLA PIPER
1717 Main Street, Suite 4600
Dallas, TX 75201-4629
Email: Vince.Slusher@dlapiper.com
Eli.Burriss@dlapiper.com
Andrew.Mayo@dlapiper.com
Andrew.Zollinger@dlapiper.com
- and -
Arthur J. Burke, Esq.
Timothy Graulich, Esq.
Dana M. Seshens, Esq.
DAVIS POLK &WARDWELL LLP
450 Lexington Avenue
New York, NY 10017
Email: arthur.burke@davispolk.com
timothy.graulich@davispolk.com
dana.seshens@davispolk.com
- and -
Howard M. Shapiro, Esq.
CRAIG GOLDBLATT
Wilmer Cutler Pickering Hale and Dorr LLP
1875 Pennsylvania Ave., N.W.
Washington, D.C. 20006
Email: howard.shapiro@wilmerhale.com
craig.goldblatt@wilmerhale.com
Attorney for Defendants McLane Champions, LLC and R. Drayton
McLane, Jr.:
Wayne Fisher, Esq.
FISHER BOYD & HUGUENARD, LLP
2777 Allen Parkway, 14th Floor
Houston, TX 77019
E-mail: WayneF@fisherboyd.com
About Houston Regional Sports Network
An involuntary Chapter 11 bankruptcy petition was filed against
Houston Regional Sports Network, L.P. d/b/a Comcast SportsNet
Houston (Bankr. S.D. Tex. Case No. 13-35998) on Sept. 27, 2013.
The involuntary filing was launched by three units of Comcast/NBC
Universal and a television-related company. The petitioners are:
Houston SportsNet Finance LLC, Comcast Sports Management Services
LLC, National Digital Television Center LLC, and Comcast SportsNet
California, LLC.
The petitioning creditors have filed papers asking the Bankruptcy
Judge to appoint an independent Chapter 11 trustee "to conduct a
fair and open auction process for the Network's business assets on
a going concern basis."
Houston Regional Sports Network is a joint enterprise among
affiliates of the Houston Astros baseball team, the Houston
Rockets basketball team, and Houston SportsNet Holdings, LLC --
"Comcast Owner" -- an affiliate of Comcast Corporation. The
Network has three limited partners -- Comcast Owner, Rockets
Partner, L.P., and Astros HRSN LP Holdings LLC. The primary
purpose of Houston Regional Sports Network is to create and
operate a regional sports programming service that produces,
exhibits, and distributes sports programming on a full-time basis,
including live Astros and Rockets games within the league-
permitted local territories.
Counsel for the petitioning creditors are Howard M. Shapiro, Esq.,
at Wilmer Cutler Pickering Hale and Dorr LLP; George W. Shuster,
Jr., Esq., at Wilmer Cutler Pickering Hale and Dorr LLP; Vincent
P. Slusher, Esq., at DLA Piper; and Arthur J. Burke, Esq., at
Davis Polk & Wardwell LLP.
Judge Marvin Isgur presides over the case.
The Network was officially placed into Chapter 11 bankruptcy
pursuant to a Feb. 7 Order for Relief.
Harry Perrin, Esq., represents Astros owner Jim Crane. Comcast is
represented by Craig Goldblatt, Esq. Alan Gover, Esq., represents
the Rockets.
HELLAS TELECOMMUNICATIONS: TPG, Apax Sued Over Soured Buyout
------------------------------------------------------------
Stephanie Gleason, writing for The Wall Street Journal, reported
that the liquidators of Hellas Telecommunications (Luxembourg) II
SCA, which was once the third largest cellular service provider in
Greece, are suing its former private-equity owners TPG Capital
Management LP and Apax Partners LLP for what it calls "one of the
very worst abuses of the private equity industry."
According to the report, in a lawsuit filed March 13 with the U.S.
Bankruptcy Court in Manhattan, the Hellas liquidators alleged that
Apax and TPG carried out a "highly leveraged acquisition of a pair
of Greek businesses," and then siphoned more than one billion
euros ($1.36 billion) out of the companies. The other company
acquired, identified in the complaint, is Q-Telecom.
Less than two months after that transfer, TPG and Apax disposed of
the company and its subsidiaries, "pocketing a windfall and
leaving behind an insolvent Company staggering toward bankruptcy,"
the complaint said, the report cited.
"We have filed this lawsuit for the benefit of Hellas's estate and
its creditors to seek redress for one of the very worst abuses in
the private equity industry," the report also cited Andrew
Hosking, one of Hellas's U.K. liquidators, as saying in a
statement. "The defendants systematically pillaged Hellas's
assets, by piling on debt, extracting exorbitant management and
consulting fees, and making massive and improper distributions to
themselves."
TPG spokesman Owen Blicksilver told the Journal that "the suit is
completely without merit." Apax didn't immediately responded to
request for comment, the Journal said.
About Hellas Telecommunications
In February 2007, Hellas Telecommunications was purchased from
TPG Capital LP and Apax Partners by the Italian telecommunications
giant Weather Group. The Company later suffered liquidity
problems and commenced administration proceedings in the U.K. in
November 2009. The administrators sold 100% of the shares of Wind
Hellas to the existing owners, the Weather Group. An order
placing the Company into liquidation was entered on Dec. 1, 2011.
Andrew Lawrence Hosking and Carl Jackson, as Joint Liquidators
petitioned for the Chapter 15 protection for the Company (Bankr.
S.D. N.Y. Case No. 12-10631) on Feb. 16, 2012. Bankruptcy Judge
Martin Glenn presides over the case.
The Debtor estimated assets and debts of more than $100,000,000.
The Debtor did not file a list of creditors together with its
petition.
The petitioners are represented by Howard Seife, Esq., at
Chadbourne & Parke LLP.
HERCULES OFFSHORE: Moody's Rates $300MM Sr. Unsecured Notes 'B3'
----------------------------------------------------------------
Moody's Investors Service assigned a B3 rating to Hercules
Offshore, Inc's proposed $300 million senior unsecured notes due
2022. Net proceeds from this offering will be used to repay the
7.125% senior secured notes due April 2017. Hercules's other
ratings and negative outlook remain unchanged.
"Moody's views this transaction as a straightforward refinancing
of more expensive debt," stated Michael Somogyi, Moody's Vice
President -- Senior Analyst. "Hercules's leverage profile remains
elevated, however, following the debt-financed acquisition of
Discovery Offshore S.A. (unrated)."
Assignments:
Issuer: Hercules Offshore, Inc.
$300 million Senior Unsecured Regular Bond/Debenture, Assigned
B3
$300 million Senior Unsecured Regular Bond/Debenture, Assigned
LGD4, 58%
Existing Senior Unsecured Regular Bonds/Debentures, revised to
LGD4, 58%
Ratings Rationale
The senior unsecured notes are rated B3, one notch beneath the
Corporate Family Rating (CFR) of B2, despite the much smaller
potential priority claim of its $150 million secured revolving
credit facility to the company's assets. Moody's believe that the
B3 rating is more appropriate for the senior unsecured notes that
the rating suggested by Moody's Loss Given Default Methodology.
The B2 CFR is supported by improving cash flows driven by
continued robust operator activity in the shallow-water Gulf of
Mexico and international offshore markets. Improved economics from
liquids-rich wells has bolstered operator activity continues to
support high dayrates and extended contract durations. The robust
market conditions support positive cash flow generation, which
Moody's expect to continue for at least for the next 18 to 24
months as contracts are renewed with high day-rates and extended
terms.
Hercules has contracted the two high specification jackup rigs
that it had acquired from Discovery in 2013. In November 2013,
Hercules Triumph began working in the India Ocean with Cairn India
Limited for a contracted dayrate of about $215,000 for a term of
seven months. The company contracted Hercules Resilience to work
in Vietnam for a dayrate of $161-$163 million for a term of 45
days that will span through mid-April, while it waits for site
approvals for its next job in West Africa. Additionally, Hercules
was able to secure five-year contract extensions on its Hercules
261 and Hercules 262 with Saudi Aramco. The extensions are priced
at over 50% higher than current dayrates and will comments in late
2014.
Hercules's Speculative Grade Liquidity (SGL) rating of SGL-2
reflects good liquidity through through 2015. Hercules had a cash
balance of just under $200 million and $138.6 million of
availability on its $150 million revolving bank credit facility as
of December 31, 2013. In July, the company amended its credit
agreement to increase the borrowing base to $150 million and
extend the maturity to July 2018. Access under the amended
revolving credit facility will be predicated on remaining in
compliance with a maximum 3.5x senior secured bank debt to
consolidated EBITDA leverage ratio covenant.
The rating outlook is negative. Moody's will stabilize the outlook
once there is a clearer visibility towards the leverage trending
downwards and towards the two high specification jackups --
Triumph and Resilience -- being contracted out for longer terms. A
positive ratings action could be considered if Hercules's ratio of
total debt to EBITDA is sustained below 2.5x while maintaining
good liquidity. Should leverage be sustained in excess of 5.0x or
liquidity deteriorate, the ratings could be considered for
downgrade.
The principal methodology used in this rating was the Global
Oilfield Services Rating Methodology published in December 2009.
Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.
Hercules Offshore, Inc. is headquartered in Houston, TX and is a
provider of offshore contract drilling and liftboat services with
operations principally in the shallow water Gulf of Mexico and in
a number of international locations.
HERCULES OFFSHORE: S&P Rates $300MM New Sr. Unsecured Notes 'B'
---------------------------------------------------------------
Standard & Poor's Ratings Services said it affirmed its 'B'
corporate credit rating on Houston-based exploration and
production company Hercules Offshore Inc. The outlook is stable.
At the same time, S&P assigned Hercules' $300 million new senior
unsecured notes its 'B' issue-level rating, with a recovery rating
of '4', indicating its expectations for average recovery (30% to
50%) in the event of a default. S&P intends to withdraw its
ratings on the company's 7.125% senior secured notes due 2017 once
they have been repaid.
"Our ratings on Hercules' reflect our assessment of the company's
business risk profile as 'vulnerable, the financial risk profile
as 'aggressive', and liquidity as 'adequate'," said Standard &
Poor's credit analyst Stephen Scovotti.
Rating factors include the company's participation in the highly
volatile and competitive shallow-water drilling and marine
services segments of the oil and gas industry, the elevated age of
the company's jack-up rig fleet, S&P's expectation of moderate
free cash flow over the next 12 months, and Hercules' "adequate"
liquidity position.
The stable outlook reflects S&P's expectation that Hercules will
moderately improve its credit measures over the next 12 months.
S&P also expects the company to maintain adequate liquidity and
generate positive free cash flow over the next 12 months.
S&P could lower the ratings if FFO to debt falls below 12% or if
debt to EBITDA increases above 5x, with no near-term remedy. S&P
could also lower the rating if liquidity (cash and revolver
availability) falls below $50 million. However, S&P believes it
would take a prolonged drop in utilization and day rates for this
to occur.
S&P considers a positive rating action to be unlikely within the
next 12 months due to the company's elevated age of its jack-up
fleet and small size relative to peers. S&P could consider a
positive rating action if the company improves its scale of
operations and continues to transition to a higher quality fleet,
while maintaining FFO to debt above 20%.
IN PLAY: Revises Plan, Confirmation Hearing Set for April 28
------------------------------------------------------------
Pursuant to an order by the U.S. Bankruptcy Court for the District
of Colorado, In Play Membership Golf, Inc., filed on March 7,
2014, a fourth amended plan of reorganization and accompanying
disclosure statement.
The previous versions of the Plan focused around the sale of the
Debtor's properties to Oread Capital & Development, LLC, with
which the Debtor had entered into a contract. Due to the filing
of the bankruptcy of Eagle Mountain Golf Course, LLC, and the
discovery of the fact that the Debtor could not perform under the
terms of the Oread contract because Eagle Mountain did not hold
title to the Texas Golf Course, as well as a number of other
reasons, the Oread contract is unenforceable due to impossibility
of performance as well as Debtor's legal inability to obtain
confirmation of a plan as well as a number of other provisions in
the contract.
While Oread still has an interest in possibly purchasing Debtor's
properties, there are no letters of intent or binding agreements
relating thereto, the Debtor said. Indeed, no new offers have
materialized. The Debtor said it will continue to discuss a
possible sale of the golf course with interested parties,
including Oread.
The Court said that upon filing of the amended documents, the
Court will enter an order approving the Disclosure Statement and
set a confirmation hearing for April 28, 2014 at 10:00 a.m., along
with all attendant deadlines.
A full-text copy of the Fourth Amended Disclosure Statement is
available at http://bankrupt.com/misc/INPLAYds0307.pdf
About In Play Membership Golf
In Play Membership Golf, Inc., doing business as Deer Creek Golf
Club and Plum Creek Golf and Country Club, filed a Chapter 11
petition (Bankr. D. Col. Case No. 13-14422) in Denver on March 22,
2013. Jeffrey A. Weinman, Esq., at Weinman & Associates,
P.C., and Patrick D. Vellone at Allen & Vellone, P.C., represent
the Debtor in its restructuring effort. Allen & Vellone, P.C.
serves as the Debtor's co-counsel. The Debtor estimated assets
and liabilities of at least $10 million.
J AND Y INVESTMENT: Own Bid to Dismiss Case Rejected
----------------------------------------------------
The Hon. Karen A. Overstreet of the U.S. Bankruptcy Court for the
Western District of Washington denied J and Y Investment, LLC's
motion to dismiss, without prejudice, its Chapter 11 case.
On Feb. 25, 2014, the Debtor filed papers in support of its
motion, stating that BACM 2004-1 320th Street South, LLC, an
undersecured creditor, does not have an enforceable security
interest in avoidance claim proceeds amounting to $30,000. The
Debtor said the avoidance claim proceeds are not rents.
BACM in its response to the Debtor's motion said it has no
objection to the dismissal of the case, however, it objected to
the Debtor's efforts to expand the scope of the dismissal motion
by filing a supplemental declaration only three days before the
deadline for filing responses and objections to the dismissal
motion. BACM further objects to the distribution of funds in the
manner the Debtor proposes in the supplemental declaration.
The Debtor had moved for approval of a stipulation with BACM to
enter an order dismissing bankruptcy case. The Debtor explained
that it can no longer operate its business and has no meaningful
way of reorganizing its remaining debt because the property has
been foreclosed.
The Debtor filed its Plan of Reorganization on March 26, 2013, and
filed its First Amended Plan of Reorganization on May 1, 2013, and
its Second Amended Plan of Reorganization on May 20, 2013.
After the Debtor filed the original version of its plan, BACM
purchased other creditors' claims to block confirmation of the
Debtor's proposed plan. It also filed a motion for relief from
stay for the purpose of allowing it to pursue its state court
remedies against the Debtor.
On Sept. 5, 2013, the King County Superior Court entered an order
appointing a custodial receiver to take possession and control of
the Debtor's property. A receiver subsequently assumed possession
and management of the property -- real property and office
building located at 2505 S. 320th Street, Federal Way, Washington
-- and the property was sold at a trustee's sale on Nov. 11, 2013.
About J and Y Investment
J and Y Investment, LLC, sought Chapter 11 protection (Bankr. W.D.
Wash. Case No. 13-10218) in Seattle on Jan. 10, 2013. The Debtor
is a single purpose Delaware limited liability company formed in
2004 to acquire the real property and office building located at
2505 S. 320th Street, Federal Way, Washington. The property was
appraised on Sept. 3, 2010, at between $11,000,000 and
$11,200,000. BACM 2004-1 320th Street South, LLC, holds the
beneficial interest in the Deed of Trust and Security Agreement
encumbering the Property, and has filed a proof of claim in the
total amount of $10,271,963.93 as of the Petition Date. The
Debtor disclosed total assets of $13.05 million against total
liabilities of $8.65 million in its schedules. The Debtor's sole
member is East of Cascade, Inc.
Armand J. Kornfeld, Esq., and Katriana L. Samiljan, Esq., at Bush
Strout & Kornfeld, LLP, in Seattle, represent the Debtor as
bankruptcy counsel.
LABORATORY PARTNERS: Obtains OK to Sell Nuclear Medicine Business
-----------------------------------------------------------------
Judge Peter J. Walsh of the U.S. Bankruptcy Court for the District
of Delaware authorized Laboratory Partners, Inc., et al., to sell
certain of their assets relating to their nuclear medicine
business to Union Hospital, Inc.
In consideration for the purchase of the nuclear medicine
services, Union Hospital agrees to assume certain liabilities and
amend the lease and terminate the service agreement with the
Debtors.
As a result of the sale of the Debtors' Talon Division and part of
its Union Hospital Division, the remaining business is the
provision of nuclear medicine services to Union Hospital. The
Debtors SAID that they could reject the services contract with
Union Hospital but doing so would potentially create uncertainty
with respect to their other continuing businesses, trigger a
rejection damage claim, leave employees without jobs, impair
continuity of service for the benefit of Union Hospital's
patients, and potentially risk the collectability of significant
accounts receivables from Union Hospital. Accordingly, the
Debtors and Union Hospital have negotiated a transaction to enable
Union Hospital itself to take over this operation, which will
assure a smooth transition of service and confer significant
benefits on the estate.
About Laboratory Partners
Laboratory Partners Inc., a Cincinnati-based provider of lab and
pathology services, and several affiliates filed petitions for
Chapter 11 protection (Bankr. D. Del. Lead Case No. 13-12769) on
Oct. 25, 2013, in Delaware.
The debtor-affiliates are Kilbourne Medical Laboratories, Inc.,
MedLab Ohio, Inc., Suburban Medical Laboratory, Inc., Biological
Technology Laboratory, Inc., Terre Haute Medical Laboratory, Inc.,
and Pathology Associates of Terre Haute, Inc. Certain of the
Debtors do business as MEDLAB.
Judge Peter J. Walsh presides over the case. Laboratory Partners
is represented by Morris, Nichols, Arsht & Tunnell LLP's Robert
Dehney, Esq., and Erin R. Fay, Esq.; and Pillsbury Winthrop Shaw
Pittman LLP's Leo T. Crowley, Esq., and Margot P. Erlich, Esq. and
Jonathan J. Russo, Esq. BMC Group Inc. serves as claims and
administrative agent. Duff & Phelps Securities LLC serves as the
Debtors' investment bankers.
The Official Committee of Unsecured Creditors has retained
Otterbourg P.C., as Lead Co-Counsel; Klehr Harrison Harvey
Branzburg LLP as Delaware Counsel; and Carl Marks Advisory Group
LLC, as financial advisors.
LAGUNA BRISAS: Can Use Cash Collateral Until April 30
-----------------------------------------------------
Judge Erith Smith of the U.S. Bankruptcy Court Central District of
California, Santa Ana Division, approved a stipulation among Wells
Fargo Bank, N.A., as Trustee for the registered holders of Banc of
America Commercial Mortgage Inc., Commercial Mortgage Pass-Through
Certificates, Series 2006-3 by and through CWCapital Asset
Management LLC, solely in its capacity as Special Servicer,
the senior secured creditor, Byron Chapman, the duly-appointed
state court receiver in Laguna Brisas, LLC's Chapter 11 case, Kay
Nam Kim, and Mehrdad Elie, authoring the Receiver is authorized to
use cash collateral through and including April 30, 2014.
A full-text copy of the Stipulation and Cash Collateral Budget is
available at http://bankrupt.com/misc/LAGUNABRISAScashcol0203.pdf
About Laguna Brisas
Laguna Beach, California-based Laguna Brisas LLC, doing business
as Best Western Laguna Brisas Spa Hotel, is owned by A&J Mutual,
LLC, which is owned and operated by Dae In "Andy" Kim and his wife
Jane. The Company owns a Best Western Plus Hotel and Spa in
Laguna Beach, California.
The Company filed for Chapter 11 protection (Bankr. C.D. Cal.
Case No. 12-12599) on Feb. 29, 2012. Bankruptcy Judge Mark S.
Wallace presides over the case.
The Debtor filed the Chapter 11 petition to stop foreclosure sale
of the first priority trust deed holder, Wells Fargo Bank. The
hotel has been in possession of and operated by a receiver, Bryon
Chapman of Rim Hospitality, since Oct. 3, 2011.
Johnny Kim, Esq. -- no relation to the Debtor's insider, "Andy"
Kim -- represents the Debtor as special counsel.
The Debtor disclosed $15,097,815 in assets and $13,982,664 in
liabilities. The petition was signed by Dae In "Andy" Kim,
managing member.
The Debtor has filed a Plan to be funded from income the Debtor
receives from the operation of the Hotel. The management of the
Debtor will continue to be Andy Kim, as it was prior to the
appointment of the Receiver. By the effective date of the Plan,
the Receiver will turn over the Debtor's assets to the Debtor.
The Debtor, through the management company, Matrix Hospital Group
LLC, will act as the disbursing agent for the purpose of making
the distributions provided for under the Plan.
Creditor Wells Fargo Bank, N.A., is represented by Hamid R.
Rafatjoo, Esq., at Venable LLP, as counsel.
LE ROYAL INT'L: Case Summary & 7 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Le Royal International Development LLC
3030 N. Rocky Point Drive West, Suite 150
Tampa, FL 33607
Case No.: 14-02667
Chapter 11 Petition Date: March 12, 2014
Court: United States Bankruptcy Court
Middle District of Florida (Tampa)
Judge: Hon. Michael G. Williamson
Debtor's Counsel: Alberto F Gomez, Jr., Esq.
JOHNSON POPE BOKOR RUPPEL & BURNS, LLP
403 East Madison Street, Suite 400
Tampa, FL 33602
Phone: 813-225-2500
Fax: 813-223-7118
Email: al@jpfirm.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Adil R. Elias, managing member.
A list of the Debtor's seven largest unsecured creditors is
available for free at http://bankrupt.com/misc/flmb14-2667.pdf
LEGEND'S CARWASH: Case Summary & 12 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Legend's Carwash at Providence, Inc.
PO BOX 1399
Lebanon, TN 37088
Case No.: 14-02016
Chapter 11 Petition Date: March 12, 2014
Court: United States Bankruptcy Court
Middle District of Tennessee (Nashville)
Judge: Hon. Marian F Harrison
Debtor's Counsel: Steven L. Lefkovitz, Esq.
LAW OFFICES LEFKOVITZ & LEFKOVITZ
618 CHURCH ST STE 410
Nashville, TN 37219
Phone: 615 256-8300
Fax: 615 255-4516
Email: slefkovitz@lefkovitz.com
Total Assets: $2.62 million
Total Liabilities: $2.37 million
The petition was signed by Bradford J. Moss, designated
representative.
A list of the Debtor's 12 largest unsecured creditors is available
for free at http://bankrupt.com/misc/tnmb14-2016.pdf
LHI HOLDCO: S&P Withdraws 'B+' ICR on Terminated Debt Transaction
-----------------------------------------------------------------
Standard & Poor's Ratings Services withdrew its issue-level
ratings on D'Iberville, Miss.-based LHI Holdco LLC's proposed
$162.5 million term loan due 2020 and proposed $10 million super
priority revolver due 2018 because the issues never sold. At the
same time, S&P withdrew the 'B+' issuer credit rating.
The company had planned to use the proceeds, along with $103
million of equity from the company's sponsor and $20 million of
equipment financing, to fund the development and construction of
Scarlet's Pearl Casino Resort. The proposed transaction has been
terminated and the company is pursuing other sources of financing.
LMB REALTY: Case Summary & 7 Largest Unsecured Creditors
--------------------------------------------------------
Debtor: LMB Realty Trust
100 Sharp Street
Hingham, MA 02043
Case No.: 14-10982
Chapter 11 Petition Date: March 12, 2014
Court: United States Bankruptcy Court
District of Massachusetts (Boston)
Judge: Hon. William C. Hillman
Debtor's Counsel: John F. Drew, Esq.
BURNS & LEVINSON, LLP
125 Summer Street
Boston, MA 02110
Phone: 617-345-3292
Fax: 617-345-3299
Email: jdrew@burnslev.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Lisa Jacobson, trustee.
A list of the Debtor's seven largest unsecured creditors is
available for free at http://bankrupt.com/misc/mab14-10982.pdf
MEDIACOM COMMUNICATIONS: Moody's Rates Sr. Unsecured Notes 'B3'
---------------------------------------------------------------
Moody's Investors Service assigned a B3 rating to the proposed
senior unsecured bonds of Mediacom Broadband LLC (Broadband), a
wholly owned operating subsidiary of Mediacom Communications
Corporation (Mediacom). The company expects to use proceeds
primarily to fund repayment of Broadband's secured term loan
maturing January 31, 2015. Mediacom's B1 corporate family rating
and the positive outlook are unchanged.
Moody's also updated point estimates as shown below.
Mediacom Broadband LLC
Senior Unsecured Bonds, Assigned B3, LGD5, 87%
Senior Secured Bank Credit Facility, LGD adjusted to LGD3, 33%
from LGD3, 37%
Senior Unsecured Bonds, LGD adjusted to LGD5, 87% from LGD6,
90%
Mediacom LLC
Senior Secured Bank Credit Facility, LGD adjusted to LGD3, 33%
from LGD3, 37%
Senior Unsecured Bonds, LGD adjusted to LGD5, 87% from LGD6,
90%
Ratings Rationale
Moody's considers the transaction a favorable extension of the
maturity profile albeit with the potential for a slight increase
in interest expense. It would not meaningfully impact the mix of
capital or Mediacom's leverage, estimated at approximately 5.5
times debt-to-EBITDA based on results for 2013.
With its headquarters in Mediacom Park, New York, Mediacom
Communications Corporation (Mediacom) offers traditional and
advanced video services such as digital television, video-on-
demand, digital video recorders, and high-definition television,
as well as high-speed Internet access and phone service. The
company had approximately 945 thousand video subscribers, 965
thousand high speed data subscribers, and 386 thousand phone
subscribers as of December 31, 2013, and primarily serves smaller
cities in the midwestern and southern United States. It operates
through two wholly owned subsidiaries, Mediacom Broadband and
Mediacom LLC, and its annual revenue is approximately $1.6
billion.
The principal methodology used in this rating was the Global Pay
Television - Cable and Direct-to-Home Satellite Operators
published in April 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.
MEDIACOM BROADBAND: S&P Rates $200MM Sr. Unsecured Notes 'B'
------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' issue-level
rating and '6' recovery rating to Mediacom Broadband's proposed
$200 million of senior unsecured notes due 2021. The '6' recovery
rating indicates S&P's expectations for negligible (0%-10%)
recovery in the event of a payment default. The issuers, Mediacom
Broadband LLC and Mediacom Broadband Corp., are subsidiaries of
Middletown, N.Y.-based cable TV system operator Mediacom
Communications Corp. (Mediacom).
S&P expects the company to use proceeds from the proposed issuance
to repay a portion of its term loan D due January 2015 (about $744
million outstanding as of Dec. 31, 2013). The corresponding 'BB'
issue-level rating and '2' recovery rating on Mediacom Broadband
Group's senior secured credit facilities remain unchanged. The
'2' recovery rating indicates S&P's expectation for substantial
(70% to 90%) recovery for lenders in the event of a payment
default. If the company's term loan D is not refinanced prior to
July 31, 2014, any outstanding commitments under the revolving
credit facility ($69.5 million outstanding as of Dec. 31, 2013)
will immediately come due. S&P's liquidity assessment could
become pressured if Mediacom doesn't refinance its 2015 debt
maturities in a timely fashion, but S&P expects the company to
address this issue over the next few months.
All other ratings on Mediacom, including the 'BB-' corporate
credit rating on parent Mediacom Communications Corp., are
unaffected. The ratings on Mediacom reflect an "aggressive"
financial profile, along with what S&P considers a "satisfactory"
business risk profile. The stable outlook reflects S&P's
expectation that leverage will continue to decline in 2014, based
on modest debt repayment and low-single-digit percent EBITDA
growth. While near-term refinancing activity could lead to a
modest increase in interest expense, S&P expects that funds from
operations to debt should remain in the mid-teen percent area
based on EBITDA growth, modest debt repayment, and the roll-off of
higher cost interest rate swaps.
RATINGS LIST
Mediacom Communications Corp
Corporate Credit Rating BB-/Stable/--
New Rating
Mediacom Broadband LLC
Mediacom Broadband Corp.,
$200 mil. notes due 2021
Senior Unsecured B
Recovery Rating 6
MERGERMARKET USA: S&P Assigns 'B' CCR; Outlook Stable
-----------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' long-term
corporate credit rating to global financial information services
provider MergerMarket USA, Inc. (MergerMarket Group). The outlook
is
stable.
At the same time, S&P assigned an issue rating of 'B' to the U.S.
dollar-equivalent GBP164.9 million first-lien term loan and to a
$40 million-equivalent, multiple-currency, five-year revolving
credit facility (RCF). The recovery rating on these loans is '3',
reflecting S&P's expectation of meaningful (50%-70%) recovery in
the event of a payment default.
In addition, S&P assigned an issue rating of 'CCC+' to the GBP64.3
million second-lien term loan. The recovery rating on this loan
is '6', reflecting S&P's expectation of negligible (0%-10%)
recovery in the event of a payment default.
All of the above ratings are in line with the preliminary ratings
that S&P assigned on Jan. 17, 2014.
The ratings on MergerMarket Group primarily reflect S&P's view of
the group's financial risk profile as "highly leveraged," as its
criteria define the term, owing to its leveraged capital structure
and ownership by the private equity firm BC Partners. Following
the acquisition of MergerMarket Group by BC Partners from Pearson
PLC for GBP382 million, the group's Standard & Poor's-adjusted
debt includes GBP229 million of term loans and over GBP164.9
million of payment-in-kind (PIK) shareholder loans and preference
shares.
Mitigating the group's highly leveraged capital structure is S&P's
assessment of its liquidity as "adequate." This assessment is
supported by MergerMarket Group's lack of material debt
amortization requirements, limited capital expenditure (capex),
and limited working capital needs. S&P believes that positive
free operating cash flows will enable the group to gradually
reduce its debt through ongoing cash sweeps. That said, this is
unlikely to meaningfully reduce the group's total adjusted
leverage because of the PIK nature of the shareholder loans.
Although these shareholder loans are outside the
banking group, S&P treats them as debt in our adjusted credit
metrics.
"We assess MergerMarket Group's business risk profile as "weak,"
reflecting its small scale, which leaves it vulnerable to changes
in the competitive landscape. Our assessment is also based on the
group's reliance on two key products, MergerMarket and Debtwire,
which account for approximately two-thirds of invoiced sales. On
the positive side, we also incorporate the firm's market
leadership in the niche markets of merger and acquisition (M&A)
news, credit news, and intelligence services. The group's niche
focus means that it has limited direct competition globally.
MergerMarket Group also benefits from a loyal customer base
operating in different segments of the financial services
industry, with renewal rates of over 95%. We anticipate that
MergerMarket Group should continue to post moderate revenue and
EBITDA growth over the next few years, based on the increase in
its global subscriber base. We also consider that the specialized
nature of MergerMarket Group's offerings will somewhat guard it
from direct competition from larger players in the global
financial data, information, and analytics market," S&P said.
S&P's base-case operating scenario for MergerMarket Group assumes:
-- Mid-to-high single-digit top-line growth, based on a
growing subscriber base;
-- EBITDA growth fueled by operating efficiencies and top-line
growth, which, combined with moderate capex, will result in
positive free operating cash flow; and
-- Excess cash of around GBP10 million, which will be used to
pay down the first-lien term loan.
Based on these assumptions, S&P arrives at the following credit
measures:
-- Standard & Poor's-adjusted debt to EBITDA of around 12x
following the transaction. On a fully adjusted basis, S&P
do not see leverage decreasing meaningfully due to the PIK
nature of the shareholder loans.
-- Excluding the shareholder loan, MergerMarket Group's
adjusted leverage ratio of about 7x, according to S&P's
projections. Based on S&P's forecasts, this could decrease
to about 6x over the next two years.
-- EBITDA cash interest coverage of around 2.3x (1x adjusted
EBITDA interest coverage) in financial 2014.
The stable outlook mainly reflects S&P's view that MergerMarket
Group should continue to post moderate revenue and EBITDA growth
over the next few years, based on its business model's favorable
dynamics. S&P assumes that the competitive landscape will not
change materially and that the group will maintain "adequate"
liquidity. S&P believes that positive free operating cash flows
will enable the group to gradually reduce its debt through ongoing
cash sweeps. That said, this is unlikely to meaningfully reduce
total adjusted leverage due to the PIK nature of the shareholder
loans.
S&P could lower the ratings if MergerMarket Group does not grow
its revenue and EBITDA, or if it increases its spending, leading
to negative free cash flow or weakened liquidity. Specifically,
S&P could lower the ratings if EBITDA cash interest coverage drops
to less than 1.5x. More direct and persistent competition from
larger players in the global financial data, information, and
analytics market could also cause S&P to lower its assessment of
the group's business risk profile, potentially leading to a
downgrade.
Currently, S&P sees the likelihood of an upgrade as limited
because of Mergermarket Group's highly leveraged capital structure
and its expectation that adjusted total leverage (including
shareholder loans) will remain high. Notwithstanding the positive
free operating cash flows and a certain amount of revenue growth
built into S&P's base-case scenario for the group, any meaningful
debt deleveraging will be unlikely in the near term, due to the
PIK nature of the shareholder loans.
METEX MFG: Plan Provides Initial 18% Recovery to Asbestos Claims
----------------------------------------------------------------
Judge Cecelia G. Morris approved the adequacy of the Disclosure
Statement describing the Chapter 11 Plan of Reorganization filed
by Metex Mfg. Corporation. With this development, the Debtor is
permitted to solicit votes on the Plan.
The Plan contemplates the establishment of Sec. 524(g) trust and
an injunction that will channel to the Asbestos PI Trust all
current claims and future demands for asbestos-related personal
injury and wrongful death based on the alleged conduct or products
of Kentile Floors, Inc., a corporation whose name was changed to
Metex Mfg. Corporation in 1998, and Metex itself.
In addition, the Asbestos PI Channeling Injunction will protect 10
insurers who have agreed to fund the Asbestos PI Trust pursuant to
an Insurance Settlement Agreement.
The Asbestos PI Trust will be funded with between $182.1 million
and $189.75 million to be paid by Settling Asbestos Insurance
Entities less sums used to fund the administrative costs of the
Chapter 11 case under an arrangement between Liberty Mutual
Insurance Company and Metex. On the Effective Date, for its part,
Metex will issue a $250,000, 10-year promissory note to the
Asbestos PI Trust and will release to the Asbestos PI Trust
$750,000 from the NYLB Escrow.
Estimated recovery for Class 4 Asbestos PI Claims is unknown, but
the Plan contemplates an initial distribution of 18% to eligible
holders of those type of claims.
All other claim classes under the Plan are unimpaired.
The voting deadline on the Plan is May 2, 2014, at 5:00 p.m.,
prevailing Eastern Time.
A combined hearing will be held on May 22, 2014, at 10:00 a.m.
prevailing Eastern Time.
Copies of the Plan documents dated Feb. 25, 2014 are available for
free at http://bankrupt.com/misc/METEX_DSFeb25.PDF
About Metex
Great Neck, New York-based Metex Mfg. Corporation, formerly known
as Kentile Floors, Inc., started business in the late 1800's as a
manufacturer of cork tile, and thereafter progressed to making
composite tile for commercial and residential use.
Metex filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y.
Case No. 12-14554) on Nov. 9, 2012. The petition was signed by
Anthony J. Miceli, president. The Debtor estimated its assets and
debts at $100 million to $500 million. Judge Burton R. Lifland
presides over the case.
Paul M. Singer, Esq., and Gregory L. Taddonio, Esq., at Reed Smith
LLP, in Pittsburgh, Pa.; and Paul E. Breene, Esq., and Michael J.
Venditto, Esq., at Reed Smith LLP, in New York, N.Y., represent
the Debtor as counsel.
In connection with the case, the U.S. Trustee appointed a
committee of five individual asbestos plaintiffs asserting claims
against Kentile. The plaintiffs are represented by five law
firms: Belluck & Fox; Weitz & Luxenberg, P.C.; Early Lucarelli
Sweeney & Strauss; Cooney & Conway; and Gori Julian & Associates,
PC. The Asbestos Claimants Committee engaged Caplin & Drysdale,
Chartered, as its bankruptcy counsel, Gilbert LLP as its special
insurance counsel, Legal Analysis Systems, Inc., as its
consultant, and Charter Oak Financial Consultants, LLC, as its
financial advisor.
On Jan. 16, 2013, the Bankruptcy Court appointed Lawrence
Fitzpatrick as the Future Claimants' Representative. Mr.
Fitzpatrick engaged Young Conaway Stargatt & Taylor, LLP as his
counsel, and Analysis Research & Planning as his econometrician.
MOORE FREIGHT: Gets 2nd Amended Plan Confirmed
----------------------------------------------
Judge Keith M. Lundin confirmed and approved Second Amended
Chapter 11 Plan of Reorganization proposed by Moore Freight
Service, Inc. and G.R.E.A.T. Logistics, Inc.
The Second Amended Plan incorporates the changes negotiated with
creditors and announced at the hearing in open Court.
As previously reported by The Troubled Company Reporter, the Plan
is a comprehensive proposal by the Debtors that provides for the
continuation of the Debtors' business, payment in full of all
Allowed Secured Claims and a fair distribution to unsecured
creditors.
Marquette Transportation Finance, Inc. has agreed to continue to
provide finaning to the Debtors following confirmation of the
Plan.
A copy of the Confirmation Order, along with the Second Amended
Plan version, is available for free at:
http://bankrupt.com/misc/MOOREFREIGHT_ConfOrd.PDF
Barbara D. Holmes, Esq., Craig V. Gabbert, Jr., Esq., Glenn B.
Rose, Esq., David P. Canas, Esq., and Tracy M. Lujan, Esq. of
Harwell Howard Hyne Gabbert & Manner, P.C. represent the Debtors.
About Moore Freight Service
and G.R.E.A.T. Logistics
Moore Freight Service, Inc. and G.R.E.A.T. Logistics Inc. sought
Chapter 11 protection (Bankr. M.D. Tenn. Case Nos. 12-08921 and
12-08923) in Nashville on Sept. 28, 2012. Moore Freight is a
freight service company specializing in flat gas transportation.
Founded in 2001, Moore is the largest commercial flat glass
logistics firm in the U.S. It operates in the U.S., Canada and
Mexico. GLI does not have any operations other than the limited,
occasional freight brokerage services currently provided to Moore
Freight.
Bankruptcy Judge Keith M. Lundin oversees the cases. Attorneys at
Harwell Howard Hyne Gabbert & Manner, P.C., serve as counsel. LTC
Advisory Services LLC serves as the Debtor's financial advisors.
Moore Freight estimated assets and debts of $10 million to $50
million. CEO Dan R. Moore signed the petitions.
Counsel for the Debtor's pre-bankruptcy and DIP lender, Marquette
Transportation Finance, Inc., are Linda W. Knight, Esq., at
Gullett, Sanford, Robinson & Martin, PLLC; and Thomas J. Lallier,
Esq., at Foley & Mansfield PLLP.
On Sept. 17, 2013, the Court approved Moore Freight Service, Inc.,
et al.'s Amended Disclosure Statement describing the Debtors'
Amended Plan of Reorganization dated Sept. 16, 2013.
The Amended Plan contemplates the continuation of the Debtors'
business, payment in full of Allowed Secured Claims, and a fair
distribution to unsecured creditors, which distribution Debtor
believe far exceeds the amount unsecured creditors would receive
in the event of a Chapter 7 liquidation.
MOSS FAMILY: Beachwalk POA Objects to First Amended Plan Outline
----------------------------------------------------------------
Creditor Beachwalk Property Owners Association, Inc., asks the
Bankruptcy Court to deny approval of the First Amended Joint
Disclosure Statement describing the Plan filed by Moss Family
Limited Partnership and Beachwalk, L.P., as presently submitted.
Instead, the Association asks the Court to require the Debtors to
further amend the Disclosure Statement and the proposed Chapter 11
Plan to address the Association's issues regarding (i) turnover to
the Association or the granting of license rights to the
Association for Lake Kai, the beach areas adjoining with the lake,
and the related sport and lake amenities; (ii) turnover of a sewer
system and lift station to Michigan City; (iii) completion of the
gated rear access road to the Beachwalk Development; (iv)
installation of street lights and turnover of common areas to the
Association in the Cason Park section of the Beachwalk
Development; (v) transfer of certain swimming pool related real
estate to the Association; and (vi) responsibility for maintaining
the boardwalk which serves the Beachwalk Development.
Beachwalk Property Owners Association, Inc., is represented by:
ANDERSON, AGOSTINO & KELLER, P.C.
Bernard E. Edwards, Jr., Esq.
Scott M. Keller, Esq.
131 South Taylor Street
South Bend, Indiana 46601
Tel No: (574) 288-1510
About Moss Family
Moss Family Limited Partnership and Beachwalk, L.P., filed
Chapter 11 petitions (Bankr. N.D. Ind. Case Nos. 12-32540 and
12-32541) on July 17, 2012. Judge Harry C. Dees, Jr., presides
over the case. Daniel Freeland, Esq., at Daniel L. Freeland &
Associates, P.C., represents the Debtors. Moss Family disclosed
$6,609,576 in assets and $6,299,851 in liabilities as of the
Chapter 11 filing.
MOSS FAMILY: Michigan City Files Response to Amended Plan Outline
-----------------------------------------------------------------
The City of Michigan City, Indiana, complained that the First
Amended Disclosure Statement of the Chapter 11 Plan filed by Moss
Family Limited Partnership and Beachwalk, L.P., does not
adequately address all points the City raised.
The City, through its various departments, has various contracts
with the Debtors regarding the development of the Beachwalk
residential subdivision that date back to 1992. Among other
things, the Debtors promised to transfer the Beachwalk sanitary
sewers and pump station to the Michigan City Sanitary and to
transfer various common areas and amenities to the Property Owners
Association -- but failed to do so
Given the history of the Debtors and their failure to fulfill
their promises to the City in a timely manner, the City believes
that the Amended Plan and Disclosure Statement should specifically
state when the Debtors will complete the repair of the
deficiencies and defects in the sewer system. In addition, the
City urges the Debtors to immediately install street lights on the
Cason Park property as promised.
Michigan City is represented by:
JAMES MEYER & ASSOCIATES, P.C.
James B. Meer, Esq.
Lenore L. Heaphey, Esq.
363 S. Lake St.
Gary, IN 46403
Tel No.: (219) 938-0800
Email: jimmeyer@jimmeyerlaw.com
lheaphey@frontier.com
About Moss Family
Moss Family Limited Partnership and Beachwalk, L.P., filed
Chapter 11 petitions (Bankr. N.D. Ind. Case Nos. 12-32540 and
12-32541) on July 17, 2012. Judge Harry C. Dees, Jr., presides
over the case. Daniel Freeland, Esq., at Daniel L. Freeland &
Associates, P.C., represents the Debtors. Moss Family disclosed
$6,609,576 in assets and $6,299,851 in liabilities as of the
Chapter 11 filing.
NATIVE WHOLESALE: Webster Szanyi Okayed to Handle Calif. Appeal
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of New York
authorized Native Wholesale Supply Co., to employ Webster Szanyi
LLP, on an expanded basis, to include all matters pertaining to a
California appeal, as its special counsel.
The Debtor and Webster Szanyi are authorized to submit an
application for payment of Webster Szanyi's fee and accrued
expenses as was allowed in its original employment application --
namely, every 60 days.
As reported in the Troubled Company Reporter on Feb. 26, 2014, the
Debtor wanted the firm to represent the company on matters
pertaining to the preparation of a petition for certiorari to the
U.S. Supreme Court arising from the Nov. 26 decision of the
California Supreme Court, which denied the company's petition for
review of its renewed motion to quash the summons served on it.
The California Supreme Court ruling involves the State of
California's ability to assert personal jurisdiction over an out-
of-state distributor who sells products to a tribe located in
California.
The petition for certiorari was due to be filed with the U.S.
Supreme Court on or before Feb. 24.
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.
NATIVE WHOLESALE: April 11 Hearing on Adequacy of Plan Outline
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of New York
will convene a hearing on April 11, 2014, at 1:30 p.m., to
consider adequacy of information in the Disclosure Statement
explaining Native Wholesale Supply Co.'s Chapter 11 Plan.
Objections, if any, are due April 8.
According to a Consensual Disclosure Statement for Joint
Consensual Plan of Reorganization of Native Wholesale Supply
Company, and the States dated March 6, 2014, the Debtor
established a Plan Funding Account at M&T and deposited
$5.5 million on Feb. 4, 2014, and an additional $500,000 was
deposited on Feb. 14, 2014. An additional $500,000 will be
deposited in the Plan Funding Account on each succeeding 15th day
of each month (or the first business day after the 15th)
beginning in March 2014 until the Plan is confirmed.
Funds contained in the Plan Funding Account will be used to pay
$3,000,000 to the USDA on the USDA Priority Claim and to pay
$1,000,000 to collateralize the Oklahoma Bond. The remaining
money in the Plan Funding Account will be transferred to the
creditor escrow account established under the terms of the Plan to
be administered by a Creditor Escrow Agent on the Effective Date.
The States are all signatories to a Tobacco Master Settlement
Agreement; they appear collectively through their counsel at the
National Association of Attorneys General.
A copy of the Disclosure Statement is available for free at
http://bankrupt.com/misc/NATIVEWHOLESALE_636_debtor_ds.pdf
As reported in the Troubled Company Reporter on Feb. 24, 2014,
the states -- California, New Mexico, Idaho, Oklahoma and New York
-- which have pending suits against the Debtor. No final order
has been obtained by any of the states with respect to any of the
suits. Some of the states' claims, if allowed by virtue of a
final order in its respective lawsuit, will include prepetition
unsecured claims and postpetition administrative expense claims.
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.
NCL CORP: Moody's Affirms Ba3 CFR & Revises Outlook to Positive
---------------------------------------------------------------
Moody's Investors Service revised NCL Corporation's (Norwegian)
rating outlook to positive from stable and affirmed the company's
Ba3 Corporate Family Rating and Ba3-PD Probability of Default
rating. Moody's also affirmed Norwegian's senior unsecured ratings
at B2, its senior secured ratings at Ba2, and its Speculative
Grade Liquidity Rating at SGL-2.
The change in rating outlook reflects Moody's view that increasing
net revenue yields of 3.0 -- 3.5% on rising capacity and cost
efficiency will result in improved credit metrics. By year-end
2014, Moody's estimates adjusted debt/EBITDA will drop to around
4.5x from 4.9x at year-end 2013 and adjusted EBIT/interest will
jump to 3.2x from 2.7x over the same time period. Additionally,
rising profitability and capacity expansion will cause cash flow
from operations to rise to a level that can cover mandatory debt
amortization on existing ship loans, as well as maintenance
capital spending enabling the company to sustain and possibly
further improve its credit profile.
Ratings Rationale
The company's Ba3 Corporate Family Rating reflects Norwegian's
improving profitability, interest coverage, and declining
leverage. Additionally, the company's well known brand --
Norwegian Cruise Line -- and young age of its cruise ship fleet,
enables the company to effectively compete against its larger
rivals, including Carnival Corp. (Baa1, stable) and Royal
Caribbean (Ba1, stable). The ratings also consider the current
promotional industry pricing environment as well as rising
industry-wide capacity that could dampen the pace of cruise price
improvement. Additionally, Norwegian needs to absorb a 24% debt
financed capacity increase between 2015 and 2017 which increases
risk particularly if deliveries come at a time of weak demand.
Norwegian's Speculative Grade Liquidity rating (SGL-2) reflects
good liquidity. The company's cash flow is expected to exceed its
interest, mandatory debt amortization, and maintenance capital
spending needs going forward. The company has committed term loans
that can be drawn to finance ship deliveries in 2015 and 2017.
Ratings could be upgraded if Norwegian can sustain debt/EBITDA
under 4.25 times, retained cash flow to net debt above 13%, and
EBIT/Interest above 2.75 times in the context of the industry
operating environment and the company's financial policy which may
include share repurchases and or dividends.
Ratings could be downgraded if the company's debt/EBITDA rises
above 5.25 times, retained cash flow to net debt drops below 10%,
or EBIT/interest declines to 2.0 times .
NCL Corporation Ltd.
Ratings affirmed
Corporate Family Rating at Ba3
Probability of Default Rating at Ba3-PD
Speculative Grade Liquidity Rating at SGL-2
$625 million revolver due 2018 at Ba2 (LGD 3, 45%)
$675 million term loan due 2018 at Ba2 (LGD 3, 45%)
$300 million 5% senior unsecured notes due 2018 at B2 (LGD 6, 95%)
The principal methodology used in this rating was the Global
Lodging & Cruise Industry Rating Methodology published in December
2010. Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.
NEOGENIX ONCOLOGY: 3rd Party Releases Derail Plan
-------------------------------------------------
Bankruptcy Judge Thomas J. Catliota said the plan of liquidation
of Neogenix Oncology, Inc., which is supported by the Official
Committee of Equity Security Holders, meets the requirement of
11 U.S.C. Sec. 1129(a)(10), but the third party release provisions
cannot be approved under applicable law. The Court denies
confirmation of the plan as drafted.
Judy A. Robbins, the United States Trustee, objects to
confirmation of the Plan. The court previously ruled that the
Debtor established all elements for confirmation under 11 U.S.C.
Sec. 1129(a)1 with the exception of the two issues addressed
herein: (1) whether the plan meets the requirements of Sec.
1129(a)(10), which requires that if any class of creditors is
impaired under a plan, at least one class of creditors must
approve the plan without regard to the votes of insiders; and (2)
whether the plan can be confirmed with the third party release and
exculpation provisions.
In September 2013, Precision Biologics, Inc., won court approval
to acquire Neogenix's operating assets. PB was the successful
bidder at the auction. The sale closed on Sept. 24, and PB paid
Neogenix $3,965,000, minus a credit of $1,172,525 -- representing
a payoff of the DIP financing facility -- for all of Neogenix's
assets.
The remaining $2,792,474 went to Neogenix, and PB issued Neogenix
5.5 million shares of PB stock to be distributed pro rata to
Neogenix's shareholders pursuant to a confirmed plan. Contingent
cash, in the amount of $730,000, was also lent to Neogenix,
pursuant to the terms of the asset purchase agreement.
The only assets that Neogenix maintained were its potential causes
of action.
The Plan provides full payment of unsecured claims and a
significant distribution to interest holders. Under the Plan, the
PB Stock, which has been held in a liquidating trust since the
sale closed, will be distributed to the equity holders shortly
after the effective date, and any causes of action will be
transferred to the liquidating trust, with the net proceeds from
successful causes of action also transferred to Neogenix's
shareholders. The Plan also provides for the termination of the
stock interests in Neogenix, and the dissolution of Neogenix.
The Plan authorizes the full payment of allowed administrative
claims and allowed priority tax claims. Secured claims, non-tax
priority claims, and general unsecured claims, comprising Classes
1, 2, and 4 respectively, will be paid in full, and are deemed
unimpaired and to have accepted the Plan. The only class of
claims that did not receive nor retain any property is Class 6,
holders of unexercised stock options. Class 6 was deemed to have
rejected the Plan and was not entitled to vote.
A copy of the Court's March 11 Memorandum of Decision is available
at http://is.gd/sXODKbfrom Leagle.com.
About Neogenix Oncology
Neogenix Oncology Inc. in Rockville, Maryland, filed a Chapter 11
petition (Bankr. D. Md. Case No. 12-23557) on July 23, 2012, in
Greenbelt with a deal to sell the assets to Precision Biologics
Inc., absent higher and better offers.
Founded in December 2003, Neogenix is a clinical stage, pre-
revenue generating, biotechnology company focused on developing
therapeutic and diagnostic products for the early detection and
treatment of cancer. Neogenix, which has 10 employees, says it
its approach and portfolio of three unique monoclonal antibody
therapeutics -- mAb -- hold the potential for novel and targeted
therapeutics and diagnostics for the treatment of a broad range of
tumor malignancies.
Thomas J. McKee, Jr., Esq., at Greenberg Traurig, LLP, in McLean,
Virginia, serves as counsel. Kurtzman Carson Consultants LLC is
the claims and notice agent.
The Debtor estimated assets of $10 million to $50 million and
debts of $1 million to $10 million.
W. Clarkson McDow, Jr., U.S. Trustee for Region 4, appointed seven
members to the committee of equity security holders.
Sands Anderson PC represents the Official Committee of Equity
Security Holders. The Committee tapped FTI Consulting, Inc., as
its financial advisor.
NEW SBARRO: Moody's Lowers Probability Default Rating to 'D-PD'
---------------------------------------------------------------
Moody's Investors Service downgraded New Sbarro Intermediate
Holdings, Inc.'s ("Sbarro") Probability of Default Rating to D-PD
from Caa3-PD. The downgrade was prompted by the company's March
10, 2014 announcement that it voluntarily filed for relief under
Chapter 11 of the United States Bankruptcy Code.
Subsequent to the actions, Moody's will withdraw all of Sbarro's
ratings because of the bankruptcy filing.
Moody's took the following ratings actions on Sbarro:
Probability of Default Rating downgraded to D-PD from Caa3-PD;
Corporate Family Rating affirmed at Ca;
Secured first-out term loan due 2016 downgraded to Caa3 (LGD3,
30%) from Caa2 (LGD3, 30%);
Secured first-out rollover term loan due 2016 downgraded to Caa3
(LGD3, 30%) from Caa2 (LGD3, 30%);
Secured second-out rollover term loan due 2016 downgraded to C
(LGD5, 74%) from Ca (LGD5, 74%)
The ratings outlook is negative.
Ratings Rationale
The downgrade of the PDR reflects the company's bankruptcy filing.
Moody's assessment of loss given default assumes a less than
average family recovery rate for the debt capitalization at
default and consequently a sizeable expected loss for the secured
term loans.
Headquartered in Melville, NY, New Sbarro Intermediate Holdings,
Inc. ("Sbarro") is a quick service restaurant (QSR) company that
serves Italian specialty foods. Through its operating
subsidiaries, Sbarro operates 217 company-owned restaurants and
franchises 582.
The principal methodology used in this rating was the Global
Restaurant Methodology published in June 2011. Other methodologies
used include Loss Given Default for Speculative-Grade Non-
Financial Companies in the U.S., Canada and EMEA published in June
2009.
NEW YORK CITY OPERA: Has Five Offers from Third Parties
-------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that New York City Opera reached a compromise with the
official creditors' committee regarding talks with third parties
potentially interested in restarting performances by the ensemble.
According to the report, the opera filed papers seeking an
expansion of the exclusive right to propose a Chapter 11
reorganization plan. The committee objected, saying it wanted to
know the details on talks with third parties about a combination
to revivify the opera company.
In a compromise, the opera is giving the committee details on five
proposals "seeking some form of transaction," the report said. The
committee must keep the proposals confidential. For one week, the
committee is forbidden to talk with third parties about their
proposals. In return, the opera keeps exclusive plan-filing rights
until April 30.
About New York City Opera
New York City Opera, Inc., sought Chapter 11 bankruptcy protection
(Bankr. S.D.N.Y. Case No. 13-13240) on Oct. 3, 2013, estimating
between $1 million and $10 million in both assets and debt.
The petition was signed by George Steel, general manager and
artistic director. Kenneth A. Rosen, Esq., at Lowenstein Sandler
LLP, serves as the opera's counsel. Ewenstein Young & Roth LLP
serves as special counsel.
NORTHERN BEEF PACKERS: Court Sorts Liens on Operating Assets
------------------------------------------------------------
Two of secured creditors of Northern Beef Packers Limited
Partnership -- SDIF Limited Partnership 6 and SDIF Limited
Partnership 9 -- commenced an adversary proceeding so the
Bankruptcy Court could sort out the extent of various parties'
liens and other encumbrances against the Debtor's assets and
determine their priority.
The adversary proceeding was launched following the sale of
Northern Beef Packers' operating assets at auction to White Oak
Global Advisors, LLC, another secured creditor. White Oak was
declared the successful bidder, with a credit bid of $39,500,000
and a cash bid of $4,847,160, for a total bid of $44,347,160. The
final cash portion of White Oak's total bid will be determined
after all issues regarding the validity, priority, and extent of
liens on the Operating Assets sold are resolved. The Court order
approving the sale states that no proceeds from the auction sale
will be distributed until the Court has determined the validity,
priority, and extent of liens and other encumbrances against the
Operating Assets, and the Court has authorized a distribution by a
separate order or orders.
The sale has not yet closed.
On March 11, Bankruptcy Judge Charles L. Nail, Jr., granted White
Oak's Motion for Judgment on the Pleadings Pursuant to
Fed.R.Civ.P. 12(c) with Respect to the Sold Assets, or in the
Alternative, for Partial Summary Judgment. The Court granted
White Oak partial summary judgment with respect to the interests
of Plaintiffs SDIF LP 6 and SDIF LP 9; and Defendants Axis
Capital, Inc., Northern Beef Packers, Farnam Street Financial,
Inc., Harms Oil, Magid Glove & Safety Mfg. Co. LLC, Official
Committee of Unsecured Creditors, RockTenn CP, LLC, Twin City
Hide, Inc., Western Equipment Finance, and VAR Resources in the
Operating Assets.
A copy of the Court's Decision is available at http://is.gd/KT3zZb
from Leagle.com.
About Northern Beef Packers
Northern Beef Packers Limited Partnership, which operates a beef
processing facility that opened in October 2012, filed for
Chapter 11 relief (Bankr. D.S.D. Case No. 13-10118) on July 19,
2013. Karl Wagner signed the petition as chief financial officer.
Judge Charles L. Nail, Jr., presides over the case. The Debtor
estimated assets of at least $50 million and debts of at least
$10 million. James M. Cremer, Esq., at Bantz, Gosch, & Cremer,
L.L.C., serves at the Debtor's counsel. Steven H. Silton, Esq.,
at Cozen O'Connor serves as co-counsel. Lincoln Partners Advisors
LLC serves as financial advisors.
The U.S. Trustee has appointed five members to the Official
Committee of Unsecured Creditors in the case. Robbins, Salomon &
Patt, Ltd. serves as it lead counsel. Patrick T. Dougherty serves
as its local counsel.
NII HOLDINGS: Incurs $1.6 Billion Loss in 2013
----------------------------------------------
NII Holdings, Inc., filed with the U.S. Securities and Exchange
Commission its annual report on Form 10-K disclosing a net loss of
$1.64 billion on $4.77 billion of operating revenues for the year
ended Dec. 31, 2013, as compared with a net loss of $765.25
million on $5.74 billion of operating revenues in 2012.
The Company reported a net loss of $745.8 million on $1.08 billion
of operating revenues for the three months ended Dec. 31, 2013, as
compared with a net loss of $592.9 million on $1.38 billion of
operating revenues for the same period a year ago.
As of Dec. 31, 2013, the Company had $8.68 billion in total
assets, $8.32 billion in total liabilities and $355.4 million in
total stockholders' equity.
"We are clearly disappointed with our operational performance in
2013, and we are taking actions to improve our business results,
including the launch of Project Accelerate, a program designed to
build the foundation for growth as we use our 3G networks to drive
operational improvements in 2014," said Steve Shindler, NII
Holdings? chief executive officer. "We are seeing early
encouraging signs of growth in subscribers purchasing 3G services
in Brazil, but have more work to turn around our business in
Mexico as we continue to suffer customer losses in that market.
We believe that as we enter 2014 with our best-in-class 3G
networks, differentiated service, strong brand and improving
portfolio of devices, we are in a much stronger position to
compete effectively in our core markets."
PricewaterhouseCoopers LLP, in McLean, Virginia, issued a "going
concern" qualification on the consolidated financial statements
for the year ended Dec. 31, 2013. The independent auditors noted
that the Company projects that it is likely that it will not be
able to comply with certain debt covenants throughout 2014. This
condition and its impact on the Company's liquidity raise
substantial doubt about the Company's ability to continue as a
going concern.
Bankruptcy Warning
"Our ability to obtain funding is subject to a variety of factors
that we cannot presently predict with certainty, including our
future performance, the volatility and demand in the capital
markets and future market prices of our securities. Because of
the combined impact of our recent and projected results of
operations, our non-investment grade credit rating, the inclusion
of the going concern statement in the report of our independent
registered public accounting firm, restrictions in our current
debt and/or general conditions in the financial and credit
markets, our access to the capital markets is likely to be limited
and, if available, the cost of any funding could be both
significant and higher than the cost of our existing financing
arrangements. Moreover, the urgency of a capital-raising
transaction may require us to pursue funding at an inopportune
time. We may not be successful in obtaining capital for these or
other reasons. If we fail to obtain suitable financing when it's
required, it could, among other things, negatively impact our
results of operations and liquidity, result in our inability to
implement our current or future business plans, and prevent us
from meeting our debt service obligations.
"If we are unable to meet our debt service obligations or to
comply with our other obligations under our existing financing
arrangements:
* the holders of our debt could declare all outstanding
principal and interest to be due and payable;
* the holders of our secured debt could commence foreclosure
proceedings against our assets;
* we could be forced into bankruptcy or liquidation; and
* debt and equity holders could lose all or part of their
investment in us," the Company said in the Annual Report.
A copy of the Form 10-K is available for free at:
http://is.gd/xmT9cU
The Company subsequently amended the 2013 Annual Report solely for
the purpose of supplementing the Original Filing to include
Exhibits 99.7, 99.8, 99.9 and 99.10 and to amend the exhibit index
to include these additional exhibits. A copy of the Form 10-K/A
is available for free at http://is.gd/wJ3Ntr
About NII Holdings
With headquarters in Reston, Virginia, NII Holdings is an
international wireless operator with more than 7 million largely
post-pay, business subscribers.
* * *
As reported by the TCR on Jan. 14, 2014, Standard & Poor's Ratings
Services lowered its corporate credit rating on Reston, Va.-based
wireless service provider NII Holdings Inc. (NII) to 'CCC+' from
'B-'. "The downgrade is based on NII's weak operating and
financial performance and our view that the company's financial
commitments may be unsustainable over the next few years, although
liquidity should remain 'adequate' in 2014," said Standard &
Poor's credit analyst Allyn Arden.
In the May 20, 2013, edition of the TCR, Moody's Investors Service
downgraded the corporate family rating of NII Holdings Inc. to B3
from B2. The downgrade reflects the company's heightened
leverage, declining operating performance, and the high execution
risk related to the company's ongoing 3G network investment cycle.
OLEO E GAS: To Get $125 Million From Creditors
----------------------------------------------
Emily Glazer and Luciana Magalhaes, writing for The Wall Street
Journal, reported that creditors of the distressed oil firm of
former Brazilian billionaire Eike Batista will invest $125 million
in the company, allowing the firm to continue operations while it
seeks a way out of bankruptcy, according to people familiar the
situation.
According to the report, the money for Oleo e Gas Participacoes
SA, formerly known as OGX Petroleo e Gas Participacoes SA, will be
provided in the form of a so-called debtor in possession loan, one
of the people said. It is the first part of $215 million that some
of the firm's largest creditors earlier this year agreed to inject
in the company in exchange for equity, another person said.
In mid-February, OGP filed a financial plan to emerge from
bankruptcy, the report recalled. The company's creditors can
oppose the plan but, if they don't, the recovery plan will be
automatically approved, according to Marcio Costa of the law firm
Sergio Bermudes, which represents the oil company.
As of March 12, none of the creditors had objected to the recovery
plan, Mr. Costa said, who also noted the deadline for objections
hasn't been set, the report related.
A group of large bondholders, including Pacific Management
Investment Co., has agreed to exchange some $5.8 billion of debts
owed by OGP for shares equivalent to 90% of the company, the
report further related. Mr. Batista, meanwhile, agreed to have
his stake in the firm reduced from 50.2% to 5.02%.
ORECK CORP: HQ Lessors' Stub Rent Not Entitled to Admin Priority
----------------------------------------------------------------
Chief Bankruptcy Judge Keith M. Lundin ruled that the stub rent
claim of the lessors of Oreck Corporation's headquarters in
Nashville, Tenn., is not within the scope of 11 U.S.C. Sec.
365(d)(3), and is not entitled to administrative expense priority
under Sec. 503(b)(1). The judge said Oreck's debt for May 2013
headquarters rent is a prepetition claim.
Judge Lundin cited Koenig Sporting Goods, Inc. v. Morse Road
Company (In re Koenig Sporting Goods, Inc.), 203 F.3d 986 (6th
Cir. 2000), and BK Novi Project L.L.C. v. Stevenson (In re Baby N'
Kids Bedrooms, Inc.), No. 07-1606, 2008 U.S. App. LEXIS 27720 (6th
Cir. Mar. 26, 2008), in his ruling.
Oreck leased its Nashville headquarters from SVF Highland Ridge
LLC and HR Nash, LLC. The headquarters lease ran from April 1,
2013, to May, 31, 2015, with base rent of $37,500 per month plus
$1,566.50 for parking and storage. All rent was "due and payable"
in advance on the first of each month.
When it filed for Chapter 11 on May 6, 2013, Oreck had not paid
headquarters rent for May 2013. Unpaid rent for May totaled
$39,066. Oreck continued to occupy and use some or all of its
headquarters postpetition, and paid in full all rents that became
due after May 1, 2013.
On Oct. 17, 2013, the Lessors moved for Allowance of
Administrative Expense Claim for Stub Rent Related to Oreck
Corporation Headquarters. The Lessors assert that prorated stub
rent of $31,505.25 for the 25 postpetition days in May is an
administrative expense under 11 U.S.C. Sec. 365(d)(3)4 and/or Sec.
503(b)(1)(A).
"Stub rent" is shorthand for "the amount due a landlord for the
period of occupancy and use between the petition date and the
first post-petition rent payment," according to In re Goody's
Family Clothing Inc., 610 F.3d 812, 815 (3d Cir.), cert. denied,
___ U.S. ___, 131 S.Ct. 662, 178 L. Ed. 2d (2010).
A copy of the Court's March 10 Memorandum Opinion is available at
http://is.gd/U6L6Elfrom Leagle.com.
About Oreck Corp.
Oreck Corporation and eight affiliates sought Chapter 11
protection (Bankr. M.D. Tenn. Lead Case No. 13-04006) in
Nashville, Tennessee, on May 6, 2013, with plans to sell the
business as a going concern.
Oreck has been in the business of manufacturing, marketing and
selling vacuum cleaners and related products since the late 1960s.
The corporate offices are located in Nashville, and the
manufacturing and call center is located in Cookeville, Tennessee.
Oreck has 70 employees in Nashville, 250 employees at its plant in
Cookeville and 325 employees operating 96 company-owned and
managed retail stores. The Debtor disclosed $18,013,249 in assets
and $14,932,841 plus an unknown amount in liabilities as of the
Chapter 11 filing.
William L. Norton III, Esq., and Alexandra E. Dugan, Esq., at
Bradley Arant Boult Cummings LLP, serve as counsel to the Debtor.
BMC Group Inc. is the claims and notice agent. Sawaya Segalas &
Co., LLC serves as financial advisor.
The U.S. Trustee appointed six creditors to the Official Committee
of Unsecured Creditors. Daniel H. Puryear, Esq., at Puryear Law
Group, and Sharon L. Levine, Esq., and Kenneth A. Rosen, Esq., at
Lowenstein Sandler LLP represent the Committee. The Committee
tapped to retain Gavin/Solmonese LLC as its financial advisor.
In July 2013, Royal Appliance Mfg. Co. (RAM), a subsidiary of the
TTI Group, finalized the purchase of Oreck Corp.'s assets. The
Bankruptcy Court approved the sale on July 16, 2013.
Royal, the maker of Dirt Devil floor-care products, won the
auction for Oreck Corp. The second-place bidder was the Oreck
family, which sold the business in a $272 million transaction in
2003. The Oreck family made the first bid at auction at
$21.9 million, including $14.5 million cash.
The terms of Royal's winning bid weren't disclosed publicly,
according to a Bloomberg News report. Royal was acquired in 2003
by Hong Kong-based Techtronic Industries Co., the maker of Hoover
vacuum cleaners.
PACIFIC STEEL: Files for Bankruptcy Protection
----------------------------------------------
Katy Stech and John W. Miller, writing for The Wall Street
Journal, reported that steel foundry Pacific Steel Casting Co. has
filed for bankruptcy protection in California, telling a judge
that it is still struggling after laying off nearly 200
undocumented workers -- a third of its workforce -- in late 2011.
According to the report, the family-owned company, which calls
itself as the nation's fourth largest steel foundry, filed for
Chapter 11 protection in U.S. Bankruptcy Court in Oakland, Calif.,
on Monday as its executives look for buyers. The company's 410
workers make steel parts for heavy-duty trucks and construction
equipment.
Company spokeswoman Elisabeth Jewel said that Pacific Steel
Casting expects to receive offers "shortly" for the its three
plants in Berkeley, Calif., the report related. The sale could
end the ownership of the Genger family, which founded Pacific
Steel Casting in 1934 as a military supplier.
Company officials said in court papers that the company has
struggled to replace workers who were terminated after a U.S.
Immigration and Customs Enforcement audit, the report further
related. Pacific Steel Casting was fined about $401,000, which it
has yet to pay, following the workplace audit, according to court
papers.
Foundries, which make everything from manhole covers and hammers
to trains, often need to fill customers' orders quickly, leading
them to rely on temporary workers and?in some cases?undocumented
workers, the report said, citing analysts.
PIERRE & RONI: Case Summary & 7 Unsecured Creditors
---------------------------------------------------
Debtor: Pierre & Roni LLC
3030 North Rocky Point Drive West, Suite 150
Tampa, FL 33607
Case No.: 14-02669
Chapter 11 Petition Date: March 12, 2014
Court: United States Bankruptcy Court
Middle District of Florida (Tampa)
Judge: Hon. Michael G. Williamson
Debtor's Counsel: Alberto F Gomez, Jr., Esq.
JOHNSON POPE BOKOR RUPPEL & BURNS, LLP
403 East Madison Street, Suite 400
Tampa, FL 33602
Phone: 813-225-2500
Fax: 813-223-7118
Email: al@jpfirm.com
Estimated Assets: $100,000 to $500,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Adil R. Elias, manager.
A list of the Debtor's seven largest unsecured creditors is
available for free at http://bankrupt.com/misc/flmb14-2669.pdf
PGX HOLDINGS: Moody's Assigns 'B3' CFR; Outlook Stable
------------------------------------------------------
Moody's Investors Service assigned to PGX Holdings, Inc.
("Progrexion") a B3 Corporate Family Rating (CFR), a B3-PD
probability of default rating, and B2 and Caa2 ratings to the
proposed first and second-lien credit facilities, respectively.
Progrexion will use the proceeds from the $435 million of proposed
credit facilities and a portion of cash to refinance existing debt
and pay a special dividend of $87 million to its shareholders. The
outlook for ratings is stable.
Ratings Rationale
The B3 CFR reflects Progrexion's leading position in the niche
credit report repair services industry through its well-recognized
brands, Lexington Law and CreditRepair.com. Progrexion's revenue
growth should strongly benefit from growing demand for credit
report repair services as a result of increasing consumer
awareness of errors in their credit files. The company has a good
track record of organic growth (albeit on a low revenue base) and
generating healthy EBITDA margins through effective customer
acquisition and retention strategies.
Nonetheless, Progrexion has limited scale and high business risk
because of its operating structure, and its financial leverage is
high. Pro forma for the proposed recapitalization, Moody's
estimates that Progrexion's leverage (total debt/FY 2013 EBITDA,
incorporating Moody's analytical adjustments) will be near 7x.
Although leverage could decline by approximately one turn annually
from strong earnings growth, Moody's believes that Progrexion's
financial policies will continue to remain shareholder friendly
and leverage could periodically increase from debt funded
dividends. The company has aggressively used debt to fund
dividends to its financial sponsors in recent years and the B3 CFR
incorporates Moody's expectations that Progrexion's leverage will
likely be in the 5.5x to 6.5x range over the next one to two
years. Moody's expects the company to generate free cash flow of
at least 5% of total debt over this period.
Progrexion's services have inherently high customer attrition
rates. As a result, the company's expected growth and financial
profile are in part dependent on its ability to acquire an
increasing number of new customers while keeping its average
customer tenure stable.
In addition, Progrexion provides credit report repair services
under the Lexington Law brand through John C Heath PLLC ("Heath"),
a law firm with a network of lawyers and paralegals. While
Progrexion has operated with Heath since 2004 and it has multi-
year contracts to ensure continuity, Progrexion relies upon
Heath's attorneys to ensure compliance with applicable statutes in
the various states where the law firm operates.
The stable ratings outlook is based on Moody's expectation that
Progrexion will maintain strong revenue growth. Moody's expects
Progrexion's total debt to EBITDA (Moody's adjusted) to approach
5.5x by mid 2015 and free cash flow to exceed 5% of total debt in
the next 12 to 24 months.
Moody's assigned the following ratings:
Issuer: PGX Holdings, Inc.
Corporate Family Rating -- B3
Probability of Default Rating -- B3-PD
$5 million first lien revolving credit facility due 2019 -- B2,
LGD3 37%
$325 million first lien term loan B facility due 2021 -- B2,
LGD3 37%
$105 million second lien term loan facility due 2022 -- Caa2,
LGD5 89%
Outlook -- Stable
Moody's could downgrade Progrexion's ratings if liquidity
deteriorates, revenue growth declines or free cash flow weakens to
the low single digit percentages of total debt for an extended
period of time.
Progrexion's ratings could be raised if Moody's believes that the
company will pursue less aggressive financial policies. The
ratings could be upgraded if Progrexion's earnings and operating
cash flow increase meaningfully and if Moody's believes that
Progrexion could sustain total debt to EBITDA of 5.5x and free
cash flow in excess of 10% of total debt.
Headquartered in Salt Lake City, UT, PGX Holdings, Inc. is a
leading provider of credit report repair services in the U.S. The
company is majority owned by funds affiliated to private equity
firm H.I.G. Capital.
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.
PGX HOLDINGS: S&P Assigns 'B' CCR & Rates $330MM Sr. Facility 'B'
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' corporate
credit rating to North Salt Lake City, Utah-based PGX Holdings
Inc. The outlook is stable.
Additionally, S&P assigned a 'B' issue-level rating with a
recovery rating of '3' to the company's proposed $330 million
senior secured first-lien credit facility (comprising a $5 million
revolving credit facility due 2019 and a $325 million first lien
term loan B due 2021). The '3' recovery rating indicates S&P's
expectation for average (50% to 70%) recovery of principal in the
event of a default. S&P also assigned a 'CCC+' issue-level rating
with a '6' recovery rating to the proposed $105 million senior
secured second-lien term loan due 2022. The '6' recovery rating
indicates S&P's expectation for negligible (0% to 10%) recovery of
principal in the event of a default.
"Our ratings on PGX reflect its "weak" business risk profile and
"highly leveraged" financial risk profile (as defined by our
criteria). Our business risk assessment is based on the company's
modest revenue base, narrow and fragmented end market with high
customer turnover, and limited revenue diversity," said credit
analyst Martha Toll-Reed. "These factors are partially offset by
the company's track record of revenue growth and consistent
operating profitability. We view PGX's financial risk profile as
"highly leveraged" due to pro forma 2013 debt to EBITDA of around
8x and an aggressive financial policy. We view the industry risk
as "intermediate" and the country risk as "very low"."
The stable outlook reflects S&P's expectation that PGX will
continue to achieve revenue growth by expanding its market
penetration and adding new customers, while maintaining consistent
EBITDA margins.
Upside Scenario
S&P views an upgrade as unlikely because of PGX's pro-forma
leverage of about 8x and its expectation that the company's
financial sponsor ownership will preclude sustained deleveraging,
given its history of distributions, including debt-financed
dividends.
Downside Scenario
S&P could lower the rating if a sustained decline in new customer
growth causes revenues and EBITDA to deteriorate materially. S&P
could also lower the rating if earnings weakness or aggressive
financial policies cause sustained leverage at or above the mid-8x
level.
PHH CORP: Moody's Affirms 'Ba2' CFR & Alters Outlook to Negative
----------------------------------------------------------------
Moody's investors Service affirmed PHH Corporation's Ba2 corporate
family and senior unsecured debt ratings and non-prime commercial
paper rating. The outlook was changed to negative from stable.
Rating Rationale
The change in outlook reflects the potential sale of the company's
fleet management business, which would weaken the company's
franchise strength and result in a business with a more
concentrated revenue base. A sale could result in a one or even
two notch downgrade.
In addition, the company's profitability in its mortgage business
has been constrained by increasing regulatory costs as well as a
changing business mix in which its private label clients are
electing to keep an increasing percentage of their mortgage
originations. As a result, PHH is increasingly responsible for
administering the mortgage origination and servicing process while
its clients retain the more profitable mortgage and mortgage
servicing assets. According to the company, approximately 75% of
its private label mortgage contracts, or half of its mortgage
originations, will likely be unprofitable on a fully allocated
basis. While the company is currently trying to renegotiate the
pricing on these contracts, it is uncertain whether it shall be
able to do so prior to their maturities, which occurs between
December 2015 and December 2018.
The company's ratings reflect its solid position in the fleet
management and leasing business, top ten position in the mortgage
origination and servicing business, moderate corporate debt levels
and limited asset quality concerns. Offsetting these positive
attributes is PHH's reliance on secured funding facilities, key
relationship concentrations in mortgage banking, and uncertainty
with respect to the company's potential liability, if any, from
current regulatory reviews.
The ratings could be downgraded in the event that the company's
fleet management business is sold without a concurrent significant
decrease in leverage. In addition, the company's ratings could be
downgraded if its liquidity profile weakens, its core earnings
materially deteriorate or if current regulatory reviews result in
material monetary exposures or other consequences that weaken the
company's franchise value.
The outlook could return to stable if the company elects to retain
the fleet management business, all while maintaining its current
funding and leverage profile. In addition if the fleet business is
not sold, prior to a return to a stable outlook Moody's would
consider developments with regard to the mortgage banking business
profitability that may be clearer at that time.
POST HOLDING: Add-on $350MM Notes No Impact on Moody's B1 Rating
----------------------------------------------------------------
Moody's Investors Service, Inc. said that the proposed $350
million of senior unsecured 144A notes being offered by Post
Holding, Inc. as an add-on to existing notes does not affect
ratings. All existing ratings, including the company's B1
Corporate Family Rating, the B1-PD Probability of Default Rating,
the SGL-3 Speculative Grade Liquidity Rating and the B1 rating on
existing senior unsecured debt rating remain unchanged. The rating
outlook is stable.
The proposed $350 million add-on notes will expand the size of
Post's existing 6.75% senior unsecured notes due 2021 to $875
million face value from $525 million. Concurrently, the company is
issuing approximately $250 million in common equity. The net
proceeds from the issuances will be used to fund the $150 million
acquisition of Power Bar and Musashi brands from Nestle N.A. -- a
transaction announced last month -- and for general corporate
purposes. Moody's anticipates that a portion of the remaining
proceeds will likely to be used to fund future acquisitions.
Post has been on an accelerated pace of acquisitions over the past
year as part of a growth strategy aimed at adding products in
shelf stable food categories with attractive benefits such has
scalability or that complement existing businesses. The Power Bar
acquisition follows the completion of other recent acquisitions
including Golden Boy Foods (private label nut butters and snacks)
in February, Dakota Growers Pasta (private label dry pasta) in
January, Premier Nutrition (sports supplements) in September 2013,
and the purchase of the cereal, granola and snacks business of
Hearthside Food Solutions in May 2013. Acquisitions have increased
Post's financial leverage, but also have diversified Post's
product portfolio away from the slowly-eroding North America
ready-to-eat cereal business, which still represents over 60% of
sales.
Rating Rationale
Post's B1 CFR reflects declining core ready-to-eat cereal category
growth trends, the company's weak competitive position against the
leading branded cereal makers and the company's aggressive
acquisition strategy that has caused financial leverage to rise.
Post's credit profile is supported by the strong albeit weakened
operating margin, cash flow, and brand equities of its core RTE
cereal brands, and the better earnings growth prospects of recent
acquisitions, especially within the natural and organic
categories.
The SGL-3 rating reflects ample internal sources of liquidity,
including over $700 million of cash balances upon the consummation
of the pending issuances (proforma 12/31/13), free cash flow of at
least $100 million over the next 12 months by Moody's estimates,
and $300 million of external liquidity provided through an asset
based loan facility.
Post Holdings, Inc.:
Ratings unchanged:
Corporate Family Rating at B1;
Probability of Default Rating at B1-PD;
Speculative Grade Liquidity Rating at SGL-3;
$1,375 million 7.375% senior unsecured notes due 2022 at B1,
LGD-4, 51%;
$525 million 6.75% senior unsecured notes due 2021 at B1,
LGD-4, 51%;
Proposed $350 million senior unsecured add-on notes due 2021 at
B1, LGD-4, 51%.
The outlook remains stable.
Leverage at closing will be approximately 6.5 times (based on
Moody's adjustments), the upper end of the B1 rating tolerance,
but Moody's expect that cash flows added through operations and
future acquisitions will reduce leverage over the next year.
A CFR downgrade could result if debt/EBITDA is sustained above 6.5
times or if the company fails to generate free cash flow. A rating
upgrade is unlikely before the company's core RTE cereal business
has stabilized; however, the ratings could eventually be upgraded
if Post is able to sustain debt/EBITDA below 5.0 times.
The principal methodology used in this rating was the 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.
Post Holdings, based in St. Louis Missouri, is a leading
manufacturer of branded ready-to-eat cereals that are sold in the
United States and Canada. Post is the third largest seller of RTE
cereals in the U.S. behind Kellogg and General Mills with an
approximate 10% market share by Moody's estimate. The company's
key brands include Honey Bunches of Oats, Pebbles, Great Grains,
Grape-Nuts, Shredded Wheat, Raisin Bran, Peace, Golden Temple,
Erewhon and Premier Protein. Proforma annual sales, including
announced acquisitions are about $1.5 billion.
PROSPECT PARK: To Wind Down Business and Operations
---------------------------------------------------
Kirk O'Neil, writing for The Deal, reported that Prospect Park,
the private equity-backed producer of the online broadcasts of
soap operas "All My Children" and "One Life to Live," filed for
Chapter 11 protection on March 10, saying in court papers that it
plans to wind down its business and operations.
The Los Angeles debtor said in a statement that the filing in the
U.S. Bankruptcy Court for the District of Delaware in Wilmington
will not impact its breach of contract litigation against American
Broadcasting Cos., which commenced last April, the report related.
It said the bankruptcy will allow PPN the timing flexibility to
collect on a tax credit from the Connecticut Office of Film,
Television & Digital Media.
According to the report, the bankruptcy will stay PPN's
involvement in another lawsuit filed in the Superior Court of
California in Los Angeles County by PPN president Jeffrey
Kwatinetz against the debtor and three investment funds managed by
Boston private equity firm Abry Partners LLC, which controls the
debtor. Kwatinetz seeks a release from a noncompete agreement.
Los Angeles, California-based Park Networks, LLC, sought
protection under Chapter 11 of the Bankruptcy Code on March 10,
2014 (Case No. 14-10520, Bankr. D.Del.). The Debtor's counsel is
William E. Chipman, Jr., Esq., at COUSINS, CHIPMAN & BROWN, LLP,
in Wilmington, Delaware.
The Debtor said it has estimated assets of $50 million to $100
million and estimated debts of $10 million to $50 million. The
petition was signed by Jeffrey Kwatinetz, president.
PROSPECT PARK: ABC Sues for Nonpayment of Series Fees
-----------------------------------------------------
American Broadcasting Companies Inc., on March 7 filed a cross-
complaint against Prospect Park Networks LLC for breach of
contract, alleging that Prospect Park has failed to pay fees for
obtaining rights to the soap operas "One Life to Live" and "All My
Children".
ABC said it has suffered damages of not less than $5 million.
The parties are embroiled in a lawsuit commenced by Prospect Park
in Superior Court in Los Angeles County.
Prospect Park and ABC entered into a license agreement for the
exclusive rights of soap operas "One Life to Live" and "All My
Children". ABC previously canceled those shows in April 2011.
Under the license deal, ABC granted Prospect Park an exclusive 12-
month option period in which to obtain the rights to the formats
of the shows, including the titles, settings, characters and
music, and to begin production of the new series of "One Life to
Live" and "All My Children". The license deal reflect Prospect
Park's expressed intent to produce new episodes of both series to
exhibit on the Internet.
Prospect Park agred that after it exercised its option and
commenced production of a new series, it would pay ABC guaranteed
license fees -- called series fees -- for the shows. The series
fees for OLTL are $4 million for each of seasons 1-3; $4.5 million
for each of seasons 4-6; and $5 million for each of seasons 7-15.
The series fees for AMC are $4.5 million for each of seasons 1-3,
$5 million for each of seasons 4-6, and $5.5 million for each of
seasons 7-15. The series fees are to be paid in equal monthly
installments in arrears, i.e., on the last calendar day of each
month. The total series fees payable to ABC from Prospect Park
over the term of the deal exceed $145 million -- and are in
addition to payment to ABC of profict participation and
merchandise distribution fees.
Prospect Park exercised its option in December 2012 for both OLTL
and AMC and commenced principal photography in March 2013,
triggering its obligation to pay the series fees for both shows.
The series fees for the first season alone total $8.5 million ($4
million for OLTL and $4.5 million for AMC).
Prospect Park paid ABC the series fees for both shows for the
months of April, May and June 2013, but it only paid the AMC
series fees for July and August 2013. It has not paid any series
fees since then, despite ABC's demand.
Eriq Gardner, writing for The Hollywood Reporter, reported that
Prospect Park filed a $95 million lawsuit alleging ABC committed a
"mega soap" fraud on "One Life to Live" and "All My Children".
Prospect Park said ABC had second thoughts about giving away the
soaps and attempted to sabotage the relaunch by borrowing
characters to either kill them off on General Hospital or create a
"mega soap."
The report said "One Life to Live" ran as a 30-minute series on
Hulu and iTunes until last September, when it was suspended after
40 episodes.
ABC is represented by:
Jeffrey B. Valle, Esq.
Susan L. Klein, Esq.
Nuritsa S. Ksachikyan, Esq.
VALLE MAKOFF LLP
11911 San Vicente Blvd., Suite 324
Los Angeles, CA 90049
Tel: 310-476-0300
Fax: 310-476-0333
E-mail: jvalle@vallemakoff.com
sklein@vallemakoff.com
nksachikyan@vallemakoff.com
Hollywood Production outfit Prospect Park Networks LLC filed for
Chapter 11 bankruptcy protection (Bankr. D. Del. Case No.
14-10520) on March 10, 2014. The Los Angeles, California-based
firm is represented by William E. Chipman, Jr., Esq., at Cousins,
Chipman & Brown, LLP. It estimated $50 million to $100 million in
both assets and debts. The petition was signed by Jeffrey
Kwatinetz, president.
QBEX ELECTRONICS: ExIm Bank Says Access to Cash Should Stop
-----------------------------------------------------------
The Bankruptcy Court was slated Thursday to hear the motion of
Export-Import Bank of the United States to terminate QBEX
Electronics Corp., Inc.'s authorization to use the bank's cash
collateral.
The move came after QBEX allegedly failed to make monthly payments
to ExIm as required by an earlier court order, which allowed the
company to use the bank's cash collateral. The court order
granted ExIm a replacement lien in all of QBEX's assets but it
also failed to "adequately protect the bank's security interest"
in those assets given its dwindling business, according to Charles
Canter, a government lawyer representing the bank.
"[QBEX] is no longer operating its business and the value of
ExIm's collateral declines steadily," Mr. Canter said in court
papers filed.
About QBEX Electronics
QBEX Electronics Corporation, Inc., based in Miami, Florida, and
its affiliates, Qbex Colombia, S.A., and Comercializadora De
Productos Tecnologicos CPT Colombia SAS, are manufacturers,
assemblers and distributors of personal computers, notebooks,
tablets and compatible accessories, marketed throughout Latin
America under the QBEX brand.
QBEX Electronics filed for Chapter 11 bankruptcy (Bankr. S.D. Fla.
Case No. 12-37551) on Nov. 15, 2012. Judge Robert A. Mark
oversees the case. Robert D. Peters, Esq., Robert A. Schatzman,
Esq., and Steven J. Solomon, Esq., at GrayRobinson, P.A., serve as
the Debtor's counsel.
QBEX scheduled assets of $11,027,058 and liabilities of
$8,246,385. The petitions were signed by Jorge E. Alfonso,
president.
Qbex Colombia, S.A., also sought Chapter 11 protection (Bankr.
S.D. Fla. Case No. 12-37558) on Nov. 15, 2012, listing $433,627 in
assets and $5,792,217 in liabilities.
Glenn D. Moses, Esq., and Michael L. Schuster, Esq., at Genovese
Joblove & Battista, P.A., represent the Official Committee of
Unsecured Creditors. The Committee tapped Marcum, LLP, as its
financial advisors.
QBEX ELECTRONICS: Committee, ExIm Bank Seek Case Conversion
-----------------------------------------------------------
Creditors of QBEX Electronics Corp., Inc. have asked U.S.
Bankruptcy Judge Robert Mark to convert the Chapter 11 cases of
the company and its two affiliates to liquidation under Chapter 7
of the Bankruptcy Code. A hearing on the conversion bid was set
for March 13, 2014.
The companies "do not have any hope of restructuring, obtaining
exit financing or otherwise," the committee representing QBEX's
unsecured creditors said in court papers filed last week.
"There is a continuing loss to and diminution of the estate by
virtue of the debtors' decline in business, state of wind-down and
the accrual of Chapter 11 administrative claims," the creditors
committee said.
The move came after QBEX reportedly failed to sell its business
and obtain financing to support its emergence from bankruptcy.
The period of time during which QBEX alone holds the right to file
a reorganization plan also expired on Dec. 7, and the company did
not file a request to further extend it.
The company is now entertaining offers for its inventory and
receivables. The highest offer it has received so far came from
an entity owned by the wife of QBEX President Jorge Alfonso,
according to the unsecured creditors' committee.
In a separate filing, The Export-Import Bank of the United States
also proposed the conversion of the case to Chapter 7, saying QBEX
is now winding down operations and won't be proposing a
restructuring plan.
About QBEX Electronics
QBEX Electronics Corporation, Inc., based in Miami, Florida, and
its affiliates, Qbex Colombia, S.A., and Comercializadora De
Productos Tecnologicos CPT Colombia SAS, are manufacturers,
assemblers and distributors of personal computers, notebooks,
tablets and compatible accessories, marketed throughout Latin
America under the QBEX brand.
QBEX Electronics filed for Chapter 11 bankruptcy (Bankr. S.D. Fla.
Case No. 12-37551) on Nov. 15, 2012. Judge Robert A. Mark
oversees the case. Robert D. Peters, Esq., Robert A. Schatzman,
Esq., and Steven J. Solomon, Esq., at GrayRobinson, P.A., serve as
the Debtor's counsel.
QBEX scheduled assets of $11,027,058 and liabilities of
$8,246,385. The petitions were signed by Jorge E. Alfonso,
president.
Qbex Colombia, S.A., also sought Chapter 11 protection (Bankr.
S.D. Fla. Case No. 12-37558) on Nov. 15, 2012, listing $433,627 in
assets and $5,792,217 in liabilities.
Glenn D. Moses, Esq., and Michael L. Schuster, Esq., at Genovese
Joblove & Battista, P.A., represent the Official Committee of
Unsecured Creditors. The Committee tapped Marcum, LLP, as its
financial advisors.
REDE ENERGIA: April 4 Hearing on Plea to Recognize Brazilian Plan
-----------------------------------------------------------------
Judge Shelley C. Chapman of the U.S. Bankruptcy Court for the
Southern District of New York on March 6 issued an order granting
recognizing the Brazilian bankruptcy proceeding of Rede Energia
S.A. as the foreign main proceeding pursuant to Section 1517 of
the Bankruptcy Code.
As a result of the recognition of Rede Energia's Brazilian
bankruptcy proceeding as the foreign main proceeding, all creditor
actions in the U.S. are automatically stopped.
Only the Ad Hoc Group of Rede Noteholders objected to the motion,
complaining that by seeking applying for Chapter 15 bankruptcy
recognition and cooperation, Rede and its shareholders have, in
effect, asked the U.S. Court to enforce within the U.S. a program
of behavior designed to exact value for shareholders to the
targeted and direct financial detriment of holders of New York law
governed and New York payable, Notes.
An evidentiary hearing on the Additional Relief, which will be
limited to consideration of objections raised by the Ad Hoc Group
and certain issues regarding the enforcement or implementation of
the Brazilian Reorganization Plan raised by the Indenture Trustee,
will be held on April 4, 2014 at 10:00 a.m. Eastern Time.
Bill Rochelle, the bankruptcy columnist for Bloomberg News, noted
that the noteholder arguments are reminiscent of allegations used
by U.S. creditors of Mexican glassmaker Vitro SAB who won a major
victory when the U.S. Court of Appeals in New Orleans ruled the
Mexican reorganization was too flawed to enforce in the U.S.
On Nov. 24, 2012, due to deteriorating financial conductions that
threatened Rede's ability to continue operations and the
intervention by the Brazilian government into its power generation
facilities, Rede and certain of its subsidiaries commenced
bankruptcy proceedings before the Second Court of Bankruptcies and
Judicial Restructuring Court of the Central Civil Court of the
City of Sao Paulo.
Consistent with certain financial conditions imposed by Brazilian
regulators, Rede submitted its plan of reorganization, pursuant to
which Energisa, S.A., will invest R$1.9 billion in Rede and assume
certain operating obligations of Rede Group in exchange for
ownership of reorganized Rede. The Brazilian Bankruptcy Court
entered an order approving the plan on Sept. 9, 2013.
Although subject to a number of pending appeals, the Brazilian
confirmation order and the Brazilian reorganization plan are in
full force and effect and have not been stayed. Rede expects all
conditions precedent to consummation will be satisfied or waived
by the middle of February 2014.
Rede's contacts with the U.S. include the issuance of U.S.-dollar
denominated 11.125% perpetual notes in the aggregate principal
amount of $400 million. The reorganization plan provides for a
25% cash distribution to holders of the perpetual notes. Upon
payment made to the Bank of New York Mellon, the indenture
trustee, the perpetual notes will be deemed to have been assigned
to Energisa under Brazilian Bankruptcy Law.
Jose Carlos Santos is as foreign representative for Rede Energia.
The Ad Hoc Group is represented by Timothy B. DeSieno, Esq., and
Mark W. Deveno, Esq., at Bingham McCutchen LLP, in New York.
About Rede Energia S.A.
Rede Energia S.A. operates through its subsidiaries, which are
engaged in the distribution, generation and trading of electricity
in Brazil. Rede supplies electricity to 3.3 million customers in
436 municipalities in six Brazilian states.
In 2012, Rede distributed 14,442 GWh of energy, recorded net loss
of R$665.8 million, and gross operating revenue of R$7.515
billion. As of Dec. 31, 2012, Rede and its subsidiaries' total
assets were valued at R$9 billion.
Rede Energia filed a Chapter 15 petition in Manhattan (Bankr.
S.D.N.Y. Case No. 14-10078) on Jan. 16, 2014, to seek recognition
of its restructuring proceedings in Brazil.
Rede Energia is estimated to have more than $1 billion in assets
and liabilities.
Jose Carlos Santos, the administrator in the Brazilian judicial
reorganization proceeding, as foreign representative, signed the
Chapter 15 bankruptcy petition. He is represented by John K.
Cunningham, Esq., at White & Case, LLP, in Miami.
Rede was previously the parent of Centrais Electricas do Para S.A.
("CELPA"), an electricity distribution concessionary for the Para
region in Brazil. CELPA filed a judicial restructuring proceeding
in Brazil in 2012 pursuant to which Rede's ownership in CELPA was
sold to a non-affiliated third party. CELPA filed a petition for
Chapter 15 relief (Bankr. S.D.N.Y. Case No. 12-14568) in Manhattan
on Nov. 9, 2012. The CELPA case was closed April 25, 2013.
RIVER-BLUFF ENTERPRISES: Section 341(a) Meeting Set on April 10
---------------------------------------------------------------
A meeting of creditors in the bankruptcy case of River-Bluff
Enterprises, Inc., will be held on April 10, 2014, at 3:00 p.m. at
Red Lion Hotel Yakima Center, 607 E Yakima Ave, Yakima WA 98901.
Creditors have until July 9, 2014, to submit their proofs of
claim.
This is the first meeting of creditors required under Section
341(a) of the Bankruptcy Code in all bankruptcy cases.
All creditors are invited, but not required, to attend. This
meeting of creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
River-Bluff Enterprises, Inc., filed a Chapter 11 bankruptcy
petition (Bankr. E.D. Wash. Case No. 14-00843) on March 11, 2014.
Kimel Law Offices serves as the Debtor's counsel. The Debtor
estimated assets and debts of at least $10 million. Judge Frank
L. Kurtz oversees the case.
RONICAL INTERNATIONAL: Case Summary & 7 Top Unsecured Creditors
---------------------------------------------------------------
Debtor: Ronical International Trading LLC
3030 N. Rocky Point Dr. West, Suite 150
Tampa, FL 33607
Case No.: 14-02670
Chapter 11 Petition Date: March 12, 2014
Court: United States Bankruptcy Court
Middle District of Florida (Tampa)
Judge: Hon. Michael G. Williamson
Debtor's Counsel: Alberto F Gomez, Jr., Esq.
JOHNSON POPE BOKOR RUPPEL & BURNS, LLP
403 East Madison Street, Suite 400
Tampa, FL 33602
Phone: 813-225-2500
Fax: 813-223-7118
Email: al@jpfirm.com
Estimated Assets: $100,000 to $500,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Adil R. Elias, manager.
A list of the Debtor's seven largest unsecured creditors is
available for free at http://bankrupt.com/misc/flmb14-2670.pdf
ROTHSTEIN ROSENFELDT: Jailed Wife Pursued for $2 Million in Jewels
------------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Kimberly Rothstein, wife of convicted Ponzi schemer
Scott Rothstein, has a $2 million civil problem on top of the 18-
month prison sentence she's serving after pleading guilty to
obstruction of justice, money laundering and tampering with a
witness.
According to the report, her husband Scott, co-founder of the Fort
Lauderdale, Florida-based law firm Rothstein Rosenfeldt Adler PA,
pleaded guilty in January 2010 and is serving a 50-year prison
sentence.
In June 2011, Kimberly settled with the trustee by agreeing to
turn over property bought with proceeds of stolen money, the
report related. The settlement provided that the trustee could
have judgments against her if there were property she didn't
disclose. She was indicted in September 2012 for hiding and
attempting to sell a long list of jewelry, watches and other items
not disclosed, the report said. She pleaded guilty and was
sentenced in November to serve 18 months in prison, followed by
two years of supervised release.
Last week, the creditors' trust filed papers against her in
bankruptcy court, asking the judge to enforce the settlement by
entering judgment against her for $2 million, representing the
property she didn't disclose, the report added. A hearing is
scheduled for March 27.
About Rothstein Rosenfeldt
Scott Rothstein, co-founder of law firm Rothstein Rosenfeldt Adler
PA -- http://www.rra-law.com/-- was suspected of running a
$1.2 billion Ponzi scheme. U.S. authorities claimed in a civil
forfeiture lawsuit filed Nov. 9, 2009, that Mr. Rothstein, the
firm's former chief executive officer, sold investments in non-
existent legal settlements. Mr. Rothstein pleaded guilty to five
counts of conspiracy and wire fraud on Jan. 27, 2010.
Creditors of Rothstein Rosenfeldt Adler signed a petition sending
the Florida law firm to bankruptcy (Bankr. S.D. Fla. Case No.
09-34791). The petitioners include Bonnie Barnett, who says she
lost $500,000 in legal settlement investments; Aran Development,
Inc., which said it lost $345,000 in investments; and trade
creditor Universal Legal, identified as a recruitment firm, which
said it is owed $7,800. The creditors alleged being owed money
invested in lawsuit settlements.
Herbert M. Stettin, the state-court appointed receiver for
Rothstein Rosenfeldt, was officially carried over as the
Chapter 11 trustee in the involuntary bankruptcy case.
On June 10, 2010, Mr. Rothstein was sentenced to 50 years in
prison.
The official committee of unsecured creditors appointed in the
case is represented by Michael Goldberg, Esq., at Akerman
Senterfitt.
RRA won approval of an amended liquidating Chapter 11 plan
pursuant to the Court's July 17, 2013 confirmation order. The
revised plan, filed in May, is centered around a $72.4 million
settlement payment from TD Bank NA.
SBARRO LLC: Restructuring Begins With Quick Pace
------------------------------------------------
Stephanie Gleason, writing for The Wall Street Journal, reported
that Italian fast-food chain Sbarro LLC's second restructuring in
three years is cooking, as a bankruptcy judge granted a number of
approvals and scheduled an April 25 hearing to review its
prepackaged Chapter 11 plan.
According to the report, Judge Martin Glenn of the U.S. Bankruptcy
Court in Manhattan gave Sbarro preliminary approval to access $10
million of a $20 million bankruptcy loan that is being provided by
its lenders: Apollo Global Management, Babson Capital Management
LLC and Guggenheim Investment Management LLC. The judge will
consider final approval of the loan on April 7.
The company also received approvals to limit equity trading to
preserve certain tax benefits, continue customer programs like
gift cards and to pay certain vendors of perishable goods, the
report said.
Sbarro filed for Chapter 11 bankruptcy, its second, with a
bankruptcy-exit plan that already has received approval from 98%
of lenders, the report related. The plan swaps $140 million in
debt for control of the restructured business but leaves nothing
for general unsecured creditors.
SBARRO LLC: 2 Orange County Outlets Closed
------------------------------------------
Nancy Luna, food reporter for The Orange County Register, reported
that two Orange County Sbarros are among 17 that have shut down in
California as part of the chain's Chapter 11 bankruptcy filing.
The report said outlets at Fashion Island in Newport Beach and the
Westminster Mall closed in late February or early March in advance
of Sbarro's bankruptcy filing, company spokesman Jonathan Dedmon
told the Register on Tuesday. The restaurants were among 182
closures across the U.S. that targeted underperforming stores
primarily in mall food courts, he said. Other regional closures
include Thousand Oaks, Riverside, Montclair, Victorville and Los
Angeles.
About Sbarro
Pizza chain Sbarro sought Chapter 11 bankruptcy protection
together with several affiliated entities (Sbarro LLC, Bankr.
S.D.N.Y. Lead Case No. 14-10557) on March 10, 2014, in Manhattan.
Bankruptcy Judge Martin Glenn presides over the Debtors' cases.
The bankruptcy filing came after Sbarro said in February it would
155 of the 400 restaurants it owns in North America.
Nicole Greenblatt, Esq., James H.M. Sprayregen, Esq., Edward O.
Sassower, Esq., and David S. Meyer, Esq., at Kirkland & Ellis,
LLP, represent Sbarro. Mark Hootnick, Brian Bacal, Gregory Doyle,
and Roger Wood at Moelis & Company, serve as Sbarro's investment
bankers. Loughlin Management serves as the financial advisors.
Prime Clerk LLC serves as claims and noticing agent, and
administrative advisor.
Melville, N.Y.- based Sbarro LLC listed $175.4 million in total
assets and $165.2 million in total liabilities. The petitions
were signed by Stuart M. Steinberg, authorized individual.
This is Sbarro's second bankruptcy filing in three years. The
corporate entity was then known as Sbarro Inc., which, together
with several affiliates, filed Chapter 11 petitions (Bankr.
S.D.N.Y. Lead Case No. 11-11527) on April 4, 2011, in Manhattan.
Sbarro Inc. disclosed $51,537,899 in assets and $460,975,646 in
liabilities in the 2011 petition.
Bankruptcy Judge Shelley C. Chapman presided over the 2011 case.
In the 2011 case, Edward Sassower, Esq., and Nicole Greenblatt,
Esq., at Kirkland & Ellis, LLP, served as the Debtors' general
bankruptcy counsel; Rothschild, Inc., as investment banker and
financial advisor; PriceWaterhouseCoopers LLP as bankruptcy
consultants; Marotta Gund Budd & Dzera, LLC, as special financial
advisor; Curtis, Mallet-Prevost, Colt & Mosle LLP as conflicts
counsel; Epiq Bankruptcy Solutions, LLC, as claims agent; and Sard
Verbinnen & Co as communications advisor.
Sbarro Inc. emerged from Chapter 11 protection seven months later,
in November 2011, after Judge Chapman confirmed a Plan of
Reorganization that handed ownership of the company to the pre-
bankruptcy first lien lenders. Under the terms of the Plan,
Sbarro reduced debt by approximately 73%, or $295 million (from
approximately $405 million to $110 million, plus any amounts
funded under a new money term loan facility), by:
-- converting 100% of the outstanding amount of the $35 million
post-petition debtor-in-possession financing into an equal
amount of a newly issued $110 million senior secured exit term
loan facility;
-- converting approximately $173 million in prepetition senior
secured debt held by the Company's prepetition first lien
lenders into the remaining exit term loan facility and 100% of
the common equity of the reorganized company (subject to
dilution by shares issued under a management equity plan); and
-- eliminating all other outstanding debt.
In January 2014, Standard & Poor's Ratings Services lowered
Sbarro's corporate credit rating further into junk category -- to
'CCC-' from 'CCC+' -- with negative outlook; and The Wall Street
Journal reported pizza chain enlisted restructuring lawyers at
Kirkland & Ellis LLP and bankers at Moelis & Co.
SBP HOLDINGS: S&P Assigns 'B' CCR & Rates $225MM 1st Lien Loan 'B'
-----------------------------------------------------------------
Standard & Poor's Ratings Services said it assigned its 'B'
corporate credit rating to U.S.-based industrial distribution
company SBP Holdings L.P. The outlook is stable
"We assigned our 'B' issue-level rating to the company's proposed
$225 million first-lien term loan due 2021 with a recovery rating
of '3', indicating our expectation of meaningful (50% to 70%)
recovery in the event of a payment default. We also assigned our
'CCC+' issue-level rating to the company's $127.5 million of
second-lien term loan due 2022, indicating our expectation of
negligible recovery (0%-10%) in the event of a payment default.
Subsidiaries SEI Holding I Corp. and Bishop Lifting Products Inc.
will be co-issuers of the proposed loans below," S&P said.
S&P expects SBP to use proceeds from the offering to fund its
acquisition of Delta Rigging & Tools and to refinance existing
debt.
"The stable outlook reflects our expectation that SBP will
maintain stable profit margins, debt leverage between 4x and 5x,
and adequate liquidity as it continues to pursue acquisition
driven growth," said Standard & Poor's credit analyst Paul Harvey.
S&P could lower ratings if the company's liquidity fell below $30
million or if leverage exceeded 6.5x without a clear path to
improvement. This would most likely occur if the company pursued
any significant debt-funded acquisitions over the next 12 months.
S&P could also consider a downgrade if the volatility of SBP's
profitability increased as its exposure to oil and natural gas end
markets continued to grow.
S&P considers an upgrade to be unlikely over the next year based
on SBP's limited scale of operations. For an upgrade, SBP will
need to significantly improve its business profile, likely through
acquisitions, and maintain leverage at about 4x and FFO to debt
higher than 12% on a sustained basis.
SHELBOURNE NORTH: Files Ch. 11 Plan of Reorganization
-----------------------------------------------------
Shelbourne North Water Street, L.P., filed with the U.S.
Bankruptcy Court for the Northern District of Illinois, Eastern
Division, a Chapter 11 plan of reorganization, under which Atlas
Apartment Holdings, LLC, and Credit Suisse LLC (the "Tier One
Capital Provider") will loan up to $135 million to a special
purpose entity and the transfer of all of the Debtor's assets to
SPE.
The Debtor owns 2.2 acres of land in downtown Chicago, Illinois,
on which it hoped to build the tallest building in the western
hemisphere -- the 150-story residential skyscraper commonly known
as the Chicago Spire. The global financial crisis at the end of
the last decade halted development of the Chicago Spire.
The Disclosure Statement explaining the Plan provides that SPE
will use the proceeds of the Tier One Capital Loan to to (a) pay
all Allowed Claims and fund the Disputed Claim Escrow Account; (b)
pay the Origination Fee to the Tier One Capital Provider, (c) pay
all third-party closing costs, expenses and fees, and (d) pay $5
million in the aggregate to Chicago Spire LLC, Shelbourne
Lakeshore, Ltd., Shelbourne Finance and Garrett Kelleher, in
exchange for all applicable development rights, licenses,
intellectual property, causes of action and executory contracts
associated with the Property, and the release of all Claims by the
Shelbourne Affiliates.
The Debtor proposes to pay in full the secured claim of RMW
Acquisition Company, LLC, in the amount of $96,542,975, the
mechanic's lien claims in the total amount of $18,381,727, and
unsecured claims in the total amount of $4,276,593.
The sole member of SPE is a Delaware limited liability company
owned and controlled by the Atlas Principal as managing member and
North Water Street Capital LLC, as non-managing member. NWSC will
contribute $1 million to SPE.
A full-text copy of the Disclosure Statement is available for free
at http://bankrupt.com/misc/SHELBOURNENORTHDS0310.pdf
About Shelbourne North Water Street L.P.
A group of creditors filed an involuntary Chapter 11 petition
against Chicago, Illinois-based Shelbourne North Water Street L.P.
on Oct. 10, 2013 (Bankr. D. Del. Case No. 13-12652). The case is
assigned to Judge Kevin J. Carey.
The petitioners are represented by Zachary I Shapiro, Esq., and
Russell C. Silberglied, Esq., at Richards, Layton & Finger, P.A.,
in Wilmington, Delaware.
The Debtor consented on Nov. 8, 2013, to being in Chapter 11
reorganization.
FrankGecker LLP represents the Debtor in its restructuring
efforts.
SOUTHAMPTON FOOTBALL CLUB: Ice Hockey Coach Becomes Chair
---------------------------------------------------------
Agence France Presse reported that Premier League club Southampton
on March 13 named Canadian ice hockey guru Ralph Krueger as their
new chairman.
According to the report, the 54-year-old, who has never previously
worked in football, succeeds Nicola Cortese, who stepped down in
January. Cortese, an Italian banker, left the club after
overseeing its resurrection from bankruptcy and the English third
tier to the Premier League.
A former ice hockey player and NHL coach, Krueger most recently
worked as a consultant to Canada's gold medal-winning ice hockey
team at the Winter Olympics in Sochi, the report related.
SPANISH PEAKS: Sale to Cross Harbor Free of Insider Leases
----------------------------------------------------------
In the Chapter 7 bankruptcy cases of Spanish Peaks Holdings II
LLC, Spanish Peaks Lodge LLC, and The Club at Spanish Peaks LLC,
Montana Bankruptcy Judge Ralph B. Kirscher granted:
(1) The Chapter 7 Trustee's Motion for Approval of Debtor-
Affiliates Settlement filed October 25, 2013, and the Trustee's
proposal to distribute $504,050 from the KeyBank litigation
settlement proceeds, which would otherwise be going to the Debtor-
Affiliates, to Spanish Peaks Holdings II, LLC and to distribute
$88,950 to The Club at Spanish Peaks, LLC, together with the
objections thereto by Boyne USA, Inc., Big Sky Resort LLC, First
American Title Insurance Company, CH SP Acquisition, LLC, and The
Spanish Peaks Ad Hoc Members Group, Inc.; and
(2) CH SP Acquisition, LLC's Motion for Determination that
the Debtors' Assets are Sold Free of Insider Leases filed
September 27, 2013.
Resort Capital Partners SP1, LLC, Spanish Peaks Development, LLC,
Pinnacle Restaurant at Big Sky, LLC, Montana Opticom, LLC and
related affiliates objected.
James J. Dolan, through a trio of companies, namely Spanish Peaks
Holdings II, LLC, Spanish Peaks Lodge, LLC and The Club at Spanish
Peaks, LLC, sought to develop a private 5,700 acre, high-end,
residential ski and golf resort in Big Sky, Montana known as
"Spanish Peaks Resorts" or "The Club at Spanish Peaks." The
development included an 18-hole Tom Weiskopf designed golf course
and ski in/ski out access to local ski facilities.
An auction was held June 3, 2013, which resulted in a highest bid
by the senior prepetition lien holder, CH SP Acquisition LLC -- an
affiliate of CrossHarbor Capital Partners LLC -- in the amount of
$26,100,000 and a second highest bid by Satterfield SP
Acquisition, LLC in the amount of $26,000,000. Of the sales
proceeds, $24,910,999 was applied to the first position secured
claim of CH SP Acquisition, LLC, $1,185,511 went to the Spanish
Peaks Holdings II Bankruptcy Estate, and $3,490 went to The Club
at Spanish Peaks Bankruptcy Estate.
A copy of the Court's March 10, 2014 Memorandum of Decision is
available at http://is.gd/6ZTMtZfrom Leagle.com.
About Spanish Peaks
Spanish Peaks Holdings II LLC, Spanish Peaks Lodge LLC and The
Club at Spanish Peaks LLC, filed voluntary Chapter 7 bankruptcy
petitions in the District of Delaware on October 14, 2011.
Bankruptcy Judge Brendon Linehan Shannon transferred the Debtors'
bankruptcy cases to Montana on January 10, 2012, Case Nos. 12-
60041-7, 12-60042-7, 12-60043-7, and Ross Richardson was appointed
trustee thereafter.
The Trustee was represented at the hearing of the motion by John
L. Amsden of Beck & Amsden LLC, in Bozeman, Montana.
Boyne USA, Inc. and Big Sky Resort, LLC were represented at the
hearing by Benjamin P. Hursh, Esq., and David M. Wagner, Esq., of
Missoula, Montana; Michael R. Lastowski, Esq. of Duane Morris, in
Wilmington, Delaware; and Paul D. Moore, Esq. of Duane Morris, in
Boston, Massachusetts.
ST. FRANCIS' HOSPITAL: Files Plan of Liquidation
------------------------------------------------
St. Francis' Hospital, Poughkeepsie, New York, et al., filed a
proposed Chapter 11 plan that will enable them to successfully
complete the liquidation of their assets and distribution of
proceeds from the sale of substantially all of their operating
assets.
A substantial portion of the Debtors' assets are to be sold to
Westchester Country Health Care Corporation ("WMC") pursuant to
the order of the Bankruptcy Court entered on Feb. 24, 2014.
Health Quest Systems, Inc., was the stalking horse bidder for the
assets but the Debtors elected to pursue an alternative
transaction with WMC.
Among other terms, the WMC APA provides approximately $18 million
to $20 million more in consideration to the Debtors' estates than
the Health Quest offer, and the WMC proposal has a broader list of
excluded assets that will remain with the Estates. The WMC APA
also provides for WMC to provide the Debtors with the exit
facility, thereby enabling a feasible wind-down of the Debtors'
estates and the remaining assets.
Subsequent to the sale, the Debtors will cease operations as a
healthcare provider -- such services thereafter to be provided by
WMC -- and the Debtors will sell or otherwise dispose of their
remaining Assets and wind down their affairs.
Under the sale implemented through the Plan as well as the
resolution of certain claims, the Plan contemplates the payment in
full in cash of all administrative claims, fee claims, U.S.
Trustee fees, and priority Claims against the Debtors.
The projected recovery for creditors and interest holders are as
follows:
Projected
Class Type Treatment Recovery
----- ---- --------- --------
Unclassified Administrative Claims 100%
Unclassified Priority Tax Claims 100%
Class 1 Secured Tax Claims Unimpaired 100%
Class 2 Bond Claims Impaired 95%
Class 3 Other Secured Claims Unimpaired 100%
Class 4 Unsecured Priority Claims Unimpaired 100%
Class 5 General Unsecured Claims Impaired 12% to 40%
Class 6 Subordinated Claims Impaired 0%
Class 7 Interests in Debtors Impaired 0%
The Plan provides for substantive consolidation of the Debtors,
solely for purposes of describing their treatment under the Plan,
confirmation of the Plan, and making distributions under the Plan.
The decision to consolidate the Debtors was made after considering
the various factors weighing both in favor of and against
substantive consolidation. The Debtors concluded that they would
likely face complex, time-consuming, and uncertain litigation if
the issue of substantive consolidation was not resolved through
the Plan, and that the cost of such litigation could pose a
material risk to the Debtors' plan efforts and all creditor
recoveries.
Moreover, the Debtors determined that the consolidation proposed
in the Plan is consistent with applicable law because it does not
harm Creditors. The majority of the assets of the Debtors'
estates reside at St. Francis, with the other Debtor subsidiaries
having little to no Assets available for distribution to
creditors. In addition, the majority of claims asserted against
the Debtors are asserted against St. Francis, with generally de
minimis Claims asserted against the other Debtors.
In light of the location of claims and assets, the consolidation
proposed in the Plan confers the benefits of convenience and
expediency without compromising creditor recoveries at any Debtor.
Under the Plan, each holder of an allowed claim will receive, on
account of its Claim, property of a value, as of the effective
Date of the Plan, that is not less than the amount that it would
receive if the Debtors were liquidated under Chapter 7 of the
Bankruptcy Code. Accordingly, based upon the Debtors' analysis,
no creditors are harmed by the proposed consolidation of the
Debtors for distribution purposes under the Plan.
A full-text copy of the Chapter 11 plan of reorganization is
available for free at http://is.gd/YZgT6t
A full-text copy of the disclosure statement is available for free
at http://is.gd/1Kl7EL
A hearing is set for March 21, 2014, at 11:00 a.m., (Eastern Time)
to consider approval of the disclosure statement. Objections, if
any, must be filed no later than 4:00 p.m., on March 14, 2014.
The Debtors propose April 23, 2014, as deadline for creditors to
vote to accept or reject the Chapter 11 plan.
About St. Francis' Hospital
St. Francis' Hospital, Poughkeepsie, New York, and four affiliates
sought protection under Chapter 11 of the Bankruptcy Code (Bankr.
S.D.N.Y. Lead Case No. 13-37725) on Dec. 17, 2013. The case is
assigned to Judge Cecelia G. Morris.
St. Francis will sell its 333-bed acute-care facility, which was
founded in 1914, for $24.2 million to Health Quest Systems Inc.,
absent higher and better offers. An auction will be held Feb. 13
if a rival offer is submitted.
The Debtors' counsel is Christopher M. Desiderio, Esq., at Nixon
Peabody LLP, in New York; the financial adviser is CohnReznick
Advisory Group; and the investment banker is Deloitte Corporate
Finance LLC. BMC Group is the claims and notice agent.
The U.S. Trustee has appointed five members to the Official
Committee of Unsecured Creditors.
ST. FRANCIS' HOSPITAL: Court OKs CBIZ as Committee Fin'l Advisors
-----------------------------------------------------------------
St. Francis' Hospital, Poughkeepsie, New York et al sought and
obtained approval from the U.S. Bankruptcy Court permission to
employ CBIZ Accounting, Tax and Advisory of New York, LLC as
financial advisors to the Official Committee of Unsecured
Creditors.
Brian Ryniker attests that the firm is a "disinterested person" as
the term is defined in Section 101(14) of the Bankruptcy Code.
About St. Francis' Hospital
St. Francis' Hospital, Poughkeepsie, New York, and four affiliates
sought protection under Chapter 11 of the Bankruptcy Code (Bankr.
S.D.N.Y. Lead Case No. 13-37725) on Dec. 17, 2013. The case is
assigned to Judge Cecelia G. Morris.
The Debtors are represented by Christopher M. Desiderio, Esq.,
Daniel W. Sklar, Esq., and Lee Harrington, Esq., at Nixon Peabody
LLP, in New York. Their financial adviser is CohnReznick Advisory
Group; and the investment banker is Deloitte Corporate Finance
LLC. BMC Group is the claims and notice agent.
The U.S. Trustee has appointed a five-member official committee of
unsecured creditors. The Creditors' Committee tapped Alston &
Bird LLP as counsel, and CBIZ Accounting, Tax & Advisory of New
York, LLC, as financial advisor.
On Jan. 30, 2014, Barry Bliss of Gibbons, P.C., was named as
patient care ombudsman in the Debtors' cases.
St. Francis filed for bankruptcy to sell its 333-bed acute-care
facility, which was founded in 1914, for $24.2 million to Health
Quest Systems Inc., absent higher and better offers. An auction
was slated for Feb. 13, 2014, if a rival offer is submitted.
St. Francis, however, canceled the auction and decided to accept a
higher and better bid from Westchester County Health Care
Corporation. Under the deal with Westchester, the buyer will
assume certain liabilities, plus pay $3,500,000 in cash at closing
to cover the break-up fee of $1,000,000 and administrative costs
of $2,500,000. The Westchester deal provides for the exchange of
bonds in the amount of $27,352,000 at 5.00%. Westchester also
will loan or arrange for the loan of funds to retire the Debtors'
DIP facility up to a limit of $17,600,000, secured by the Accounts
Receivable. Any DIP obligation in excess of $17,600,000 will be
paid by the estate. Westchester also will provide a loan in the
amount of $250,000 as a "Final Payment" on Bonds to be used to
initially capitalize the liquidating trust of the Estate.
James P. Lagios, Esq., at Iseman, Cunningham, Riester & Hyde, LLP,
represents Health Quest Systems, Inc.
ST. FRANCIS' HOSPITAL: Can Employ Gibbons as Ombudsman Counsel
--------------------------------------------------------------
Barry Liss, the Patient Care Ombudsman appointed in the Chapter 11
case of St. Francis' Hospital et al, sought and obtained
permission from the U.S. Bankruptcy Court to employ Gibbons P.C.
as counsel.
David N. Crapo attests that the firm is a "disinterested person"
as the term is defined in Section 101(14) of the Bankruptcy Code.
About St. Francis' Hospital
St. Francis' Hospital, Poughkeepsie, New York, and four affiliates
sought protection under Chapter 11 of the Bankruptcy Code (Bankr.
S.D.N.Y. Lead Case No. 13-37725) on Dec. 17, 2013. The case is
assigned to Judge Cecelia G. Morris.
The Debtors are represented by Christopher M. Desiderio, Esq.,
Daniel W. Sklar, Esq., and Lee Harrington, Esq., at Nixon Peabody
LLP, in New York. Their financial adviser is CohnReznick Advisory
Group; and the investment banker is Deloitte Corporate Finance
LLC. BMC Group is the claims and notice agent.
The U.S. Trustee has appointed a five-member official committee of
unsecured creditors. The Creditors' Committee tapped Alston &
Bird LLP as counsel, and CBIZ Accounting, Tax & Advisory of New
York, LLC, as financial advisor.
On Jan. 30, 2014, Barry Bliss of Gibbons, P.C., was named as
patient care ombudsman in the Debtors' cases.
St. Francis filed for bankruptcy to sell its 333-bed acute-care
facility, which was founded in 1914, for $24.2 million to Health
Quest Systems Inc., absent higher and better offers. An auction
was slated for Feb. 13, 2014, if a rival offer is submitted.
St. Francis, however, canceled the auction and decided to accept a
higher and better bid from Westchester County Health Care
Corporation. Under the deal with Westchester, the buyer will
assume certain liabilities, plus pay $3,500,000 in cash at closing
to cover the break-up fee of $1,000,000 and administrative costs
of $2,500,000. The Westchester deal provides for the exchange of
bonds in the amount of $27,352,000 at 5.00%. Westchester also
will loan or arrange for the loan of funds to retire the Debtors'
DIP facility up to a limit of $17,600,000, secured by the Accounts
Receivable. Any DIP obligation in excess of $17,600,000 will be
paid by the estate. Westchester also will provide a loan in the
amount of $250,000 as a "Final Payment" on Bonds to be used to
initially capitalize the liquidating trust of the Estate.
James P. Lagios, Esq., at Iseman, Cunningham, Riester & Hyde, LLP,
represents Health Quest Systems, Inc.
ST. FRANCIS' HOSPITAL: Schedules Filed; Claims Bar Date Set
-----------------------------------------------------------
Creditors of St. Francis' Hospital, Poughkeepsie, New York, must
file their proofs of claims not later than April 16, 2014 at 5:00
p.m. (Eastern Time).
Proofs of claim filed by governmental units must be filed on or
before June 15, 2014, at 5:00 p.m. (Eastern Time).
The Debtors have filed separate schedules of assets and
liabilities, and statements of financial affairs with the U.S.
Bankruptcy Court for the Southern District of New York,
disclosing:
Company Name Assets Liabilities
------------ ----------- -----------
St. Francis' Hospital $86,333,429 $66,040,111
Poughkeepsie, New York Plus Unknown
Saint Francis Health $7,227,298 $28,658,187
Care Foundation, Inc.
Saint Francis Hospital $3,997,163 $9,728,386
Preschool Program
Saint Francis Home $545,169 $29,941
Care Services Corporation
SFH Ventures, Inc. $972,126 $385,994
Plus Unknown
A full-text copy of St. Francis' Hospital's SALs and SOFA is
available for free at http://is.gd/15P3LK
A full-text copy of Saint Francis Health's SALs and SOFA is
available for free at http://is.gd/pBc1lK
A full-text copy of Saint Francis Home's SALs and SOFA is
available for free at http://is.gd/SI9vlQ
A full-text copy of Saint Francis Hospital 's SALs and SOFA is
available for free at http://is.gd/sAkLZ0
A full-text copy of SFH Ventures' SALs and SOFA is available for
free at http://is.gd/159bSd
About St. Francis' Hospital
St. Francis' Hospital, Poughkeepsie, New York, and four affiliates
sought protection under Chapter 11 of the Bankruptcy Code (Bankr.
S.D.N.Y. Lead Case No. 13-37725) on Dec. 17, 2013. The case is
assigned to Judge Cecelia G. Morris.
The Debtors are represented by Christopher M. Desiderio, Esq.,
Daniel W. Sklar, Esq., and Lee Harrington, Esq., at Nixon Peabody
LLP, in New York. Their financial adviser is CohnReznick Advisory
Group; and the investment banker is Deloitte Corporate Finance
LLC. BMC Group is the claims and notice agent.
The U.S. Trustee has appointed a five-member official committee of
unsecured creditors. The Creditors' Committee tapped Alston &
Bird LLP as counsel, and CBIZ Accounting, Tax & Advisory of New
York, LLC, as financial advisor.
On Jan. 30, 2014, Barry Bliss of Gibbons, P.C., was named as
patient care ombudsman in the Debtors' cases.
St. Francis filed for bankruptcy to sell its 333-bed acute-care
facility, which was founded in 1914, for $24.2 million to Health
Quest Systems Inc., absent higher and better offers. An auction
was slated for Feb. 13, 2014, if a rival offer is submitted.
St. Francis, however, canceled the auction and decided to accept a
higher and better bid from Westchester County Health Care
Corporation. Under the deal with Westchester, the buyer will
assume certain liabilities, plus pay $3,500,000 in cash at closing
to cover the break-up fee of $1,000,000 and administrative costs
of $2,500,000. The Westchester deal provides for the exchange of
bonds in the amount of $27,352,000 at 5.00%. Westchester also
will loan or arrange for the loan of funds to retire the Debtors'
DIP facility up to a limit of $17,600,000, secured by the Accounts
Receivable. Any DIP obligation in excess of $17,600,000 will be
paid by the estate. Westchester also will provide a loan in the
amount of $250,000 as a "Final Payment" on Bonds to be used to
initially capitalize the liquidating trust of the Estate.
James P. Lagios, Esq., at Iseman, Cunningham, Riester & Hyde, LLP,
represents Health Quest Systems, Inc.
ST. FRANCIS' HOSPITAL: Has Approval of Sale Deal with Westchester
-----------------------------------------------------------------
St. Francis' Hospital, Poughkeepsie, New York, obtained formal
approval from the U.S. Bankruptcy Court for the Southern District
of New York to sell its 333-bed acute-care facility to Westchester
County Health Care Corp.
As previously reported by The Troubled Company Reporter, the
Debtors intended to sell their operations in a deal valued at
$24.2 million to Health Quest Systems Inc., absent higher and
better offers. The Debtors cancelled an auction scheduled for
Feb. 13 and told the Court that terms of the WMC asset purchase
agreement are substantially and materially better than those
provided for in the stalking horse APA for all parties-in-
interest. Under the WMC APA, Westchester will assume certain
liabilities, plus pay $3,500,000 in cash at closing to cover the
break-up fee of $1,000,000 and Administrative Costs of $2,500,000.
The WMC APA also provides for the exchange of bonds in the amount
of $27,352,000 at 5.00%.
A March 11 stipulation among the Debtor, Columbia SFH, L.L.C., and
Westchester agreed that the facility that Columbia proposes to
construct on the Debtor's hospital campus is not an asset being
sold in the Sale Order, and the transfer of the Debtor's interests
in the Ground Lease and Leases with Columbia are not being sold
free and clear of Columbia's and its secured lender's interests.
About St. Francis' Hospital
St. Francis' Hospital, Poughkeepsie, New York, and four affiliates
sought protection under Chapter 11 of the Bankruptcy Code (Bankr.
S.D.N.Y. Lead Case No. 13-37725) on Dec. 17, 2013. The case is
assigned to Judge Cecelia G. Morris.
The Debtors are represented by Christopher M. Desiderio, Esq.,
Daniel W. Sklar, Esq., and Lee Harrington, Esq., at Nixon Peabody
LLP, in New York. Their financial adviser is CohnReznick Advisory
Group; and the investment banker is Deloitte Corporate Finance
LLC. BMC Group is the claims and notice agent.
The U.S. Trustee has appointed a five-member official committee of
unsecured creditors. The Creditors' Committee tapped Alston &
Bird LLP as counsel, and CBIZ Accounting, Tax & Advisory of New
York, LLC, as financial advisor.
On Jan. 30, 2014, Barry Bliss of Gibbons, P.C., was named as
patient care ombudsman in the Debtors' cases.
St. Francis filed for bankruptcy to sell its 333-bed acute-care
facility, which was founded in 1914, for $24.2 million to Health
Quest Systems Inc., absent higher and better offers. An auction
was slated for Feb. 13, 2014, if a rival offer is submitted.
St. Francis, however, canceled the auction and decided to accept a
higher and better bid from Westchester County Health Care
Corporation. Under the deal with Westchester, the buyer will
assume certain liabilities, plus pay $3,500,000 in cash at closing
to cover the break-up fee of $1,000,000 and administrative costs
of $2,500,000. The Westchester deal provides for the exchange of
bonds in the amount of $27,352,000 at 5.00%. Westchester also
will loan or arrange for the loan of funds to retire the Debtors'
DIP facility up to a limit of $17,600,000, secured by the Accounts
Receivable. Any DIP obligation in excess of $17,600,000 will be
paid by the estate. Westchester also will provide a loan in the
amount of $250,000 as a "Final Payment" on Bonds to be used to
initially capitalize the liquidating trust of the Estate.
TEKNI-PLEX INC: S&P Affirms 'B' CCR Over $50MM Loan Add-On
----------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B' corporate
credit rating on Tekni-Plex Inc. The outlook is stable.
In addition, S&P affirmed the 'B' issue-level rating on the
company's $150 million senior secured term loan (including the
proposed $50 million add-on). S&P also affirmed the 'B' issue-
level rating on the $485 million senior secured notes ($302
million outstanding at close of the refinancing). The recovery
rating on both the term loan and senior secured notes remains '3',
indicating S&P's expectation for meaningful (50% to 70%) recovery
in the event of a payment default.
The company plans to use the incremental term loan proceeds to pay
down part of the outstanding senior secured notes.
"The ratings on Tekni-Plex reflect the packaging and tubing
manufacturer's exposure to volatile raw material input costs and
our expectations for highly leveraged credit metrics, including
funds from operations [FFO] to total adjusted debt of about 10%,"
said Standard & Poor's credit analyst Daniel Krauss. The
company's leading competitive positions in many of its niche
markets and meaningful exposure to relatively stable end markets
represent some key business profile strengths. We characterize
Tekni-Plex's business risk profile as "fair" and its financial
risk profile as "highly leveraged."
Tekni-Plex manufactures rigid and flexible packaging products for
the health care, food, consumer products, and specialty end
markets and has annual revenues of nearly $600 million. The
company competes primarily in industries characterized by steady
demand growth rates in the low-single-digit percentage range.
EBITDA generation is pretty evenly split between the food
packaging, specialty packaging, and health care segments. The
company's Dolco packaging segment serves stable consumer end
markets, including the mature polystyrene egg carton market. S&P
expects the food packaging segment to provide a stable earnings
stream and the health care and specialty packaging segments to
offer moderate growth characteristics.
The outlook is stable. Tekni-Plex's leading market positions in
its relatively stable end markets and earnings that are pretty
evenly split among its three businesses continue to support the
ratings. S&P's base-case scenario assumes modest volume growth
over the next year, primarily from the health care and specialty
packaging segments, which should partially offset S&P's
expectation for continued sluggishness in Europe and volatility in
the company's input costs. S&P assumes that management and owners
will continue to support current credit quality and, therefore,
have not factored into its analysis any meaningful debt-funded
distributions to shareholders or acquisitions.
S&P could raise the ratings if improved free cash flow generation
from higher earnings and working capital reductions allows the
company to reduce debt moderately. S&P could also raise the
rating by one notch if revenue growth were moderately higher than
it projects along with an increase in EBITDA margins by 150 basis
points or more from expected levels. If this were to happen, S&P
expects that FFO to debt would rise to about 15%, a level S&P
considers appropriate for a higher rating. An upgrade would also
factor in S&P's assessment of ownership and management support for
these strengthened credit metrics.
Based on S&P's downside scenario, it could lower the ratings if a
spike in raw material costs or competitive pressures caused EBITDA
margins to decrease by 200 basis points or more from current
levels, coupled with a 5% drop in revenues. At that point, S&P
would expect that the company's credit metrics would weaken
significantly, including leverage rising above 7x and FFO to total
adjusted debt dropping to about 5%. S&P could also lower the
ratings if the company became more aggressive in regards to
acquisitions or shareholder distributions.
TENNECO INC: Fitch Affirms 'BB+' Issuer Default Rating
------------------------------------------------------
Fitch Ratings has affirmed the ratings for Tenneco Inc. (TEN) as
follows:
-- Issuer Default Rating (IDR) at 'BB+';
-- $228 million secured Term Loan A at 'BBB-';
-- $850 million secured revolving credit facility at 'BBB-';
-- $725 million senior unsecured notes at 'BB'.
The Rating Outlook is Stable.
KEY RATING DRIVERS
TEN's ratings are supported by the company's market position as a
top global supplier of emission control and vehicle suspension
components, with a strong presence in both the original equipment
and aftermarket segments. Along with the company's traditional
light vehicle business, tightening regulations governing
commercial truck and off-highway vehicle emissions in many global
regions have led to further growth opportunities and increased
profitability. The company's credit profile is characterized by
relatively low, but variable, leverage and strong liquidity but
relatively low free cash flow margins. Primary risks to the
company's credit profile include industry cyclicality, which could
become a more significant issue as commercial vehicle and off-
highway equipment related sales comprise an increasing proportion
of the company's revenue mix; volatile raw material costs; and
higher fuel prices. Despite these risks, TEN's lowered cost
structure and strengthened balance sheet have improved its ability
to withstand any downturn in global demand.
Fitch expects demand for TEN's Clean Air products to grow over the
next several years as global emissions requirements continue to
tighten. In particular, tightening regulations for locomotives
and water-borne vessels are presenting potential new business
opportunities for additional demand growth beyond the company's
traditional markets. Fitch therefore expects TEN's revenue stream
to become increasingly diversified over the next several years and
to grow at a rate in excess of global light vehicle production as
the company's product penetration increases and as it moves
further into these new market segments. In addition to its
emission control products, new technologies in the company's Ride
Performance division, including active and semi-active suspension
systems, will also contribute to growth in revenue and
profitability.
Due, in part, to increasing demand from the commercial vehicle and
off-highway segments, TEN's original equipment revenue growth is
likely to outpace the growth in light vehicle production over the
next several years. Fitch expects the higher margins generated by
the commercial and off-highway business and changes to the
company's cost structure, including a higher proportion of
manufacturing capacity in low-cost countries and restructuring
actions currently underway in Europe, will support margins at or
above current levels over the intermediate term. Fitch's
calculated EBITDA margin was 8.1% in 2013, but excluding substrate
sales, which are largely passed through to customers, the EBITDA
margin was 10.5% for the year. However, after producing
relatively solid free cash flow in 2013, free cash flow margins
are likely to be constrained again over the next couple of years
due to a combination of higher cash restructuring charges,
increased cash taxes and elevated capital spending.
Fitch expects TEN's credit profile to strengthen over the
intermediate term on higher business levels, continued discipline
on controllable costs and lower debt as term loan borrowings
amortize. Fitch projects that EBITDA gross leverage will show a
further modest decline during 2014, potentially to around 1.5x by
year end, and is likely to decline further over the next couple of
years. However, leverage is likely to fluctuate through the year
as the company uses its revolver and other short-term borrowings
to offset typical seasonality in its cash flows. Fitch expects
TEN to continue working toward its net leverage target of 1.0x,
which suggests that leverage reduction will remain a key
consideration for the company over the intermediate term. TEN's
actual net leverage at Dec. 31, 2013 (according to the company's
calculation) was 1.2x, down from 1.5x at year end 2012. Net
leverage could temporarily rise in early 2014, however, due to the
typical cash usage expected in the first quarter.
The greatest risk to TEN's credit profile in the near term is the
potential for a decline in global vehicle production driven by a
slowing global economy. This risk is mitigated somewhat by the
increasing diversification of the company's customer base and
lowered cost structure, as well as ever-tightening global
emissions regulations, which will propel the market for emission
control systems irrespective of global economic conditions. Also
mitigating risk is the company's lack of meaningful debt
maturities until 2017, which would reduce liquidity risk in a
weakened demand environment. Rising vehicle fuel prices also
present a risk in that they could result in a decline in overall
vehicle demand, as well as a shift in demand toward smaller
vehicles that are less profitable for TEN. Volatile raw material
costs are a risk, although TEN mitigates this risk by passing
along a substantial portion of the change in its material costs to
its original equipment customers. However, offsetting increased
material costs in the company's substantial aftermarket business
is more challenging.
In 2013, TEN's credit profile strengthened modestly on continued
improvements in the company's operating performance and a slight
reduction in debt. As of Dec. 31, 2013, TEN's EBITDA leverage (as
calculated by Fitch) was 1.7x, down from 1.8x at year-end 2012,
while total debt of $1.1 billion was down from $1.2 billion. FFO
adjusted leverage was flat year-over-year at 2.9x. Fitch's
calculation of adjusted leverage includes the impact of operating
leases as well as borrowings on the company's European accounts
receivable securitization facilities, which are not included on
TEN's balance sheet. At year-end 2013, TEN had sold $134 million
in accounts receivable under its European facilities.
Free cash flow grew substantially in 2013, to $259 million from
$109 million in 2012, largely due to a $128 million positive
change in working capital. Capital spending declined slightly to
$244 million in 2013 from $259 million in 2012. Over the
intermediate term, Fitch expects free cash flow to remain
positive, but it will likely be down significantly over the next
two years due to a combination of higher cash taxes, increased
cash restructuring costs and higher capital spending. TEN has
fully utilized most of its net operating loss (NOL) tax credits in
the U.S., which will lead to meaningfully higher cash taxes over
the next several years, while the cash flow impact of the
company's restructuring actions will be higher in 2014 and 2015 as
the company closes or downsizes several facilities. Higher
capital spending will be driven by continued growth in the
company's book of business.
Although revenue increased 8.2% in 2013 to $8 billion, the EBITDA
margin declined slightly. Fitch's calculated EBITDA margin was
8.1% in 2013 versus 8.8% in 2012, but the free cash flow margin
grew to 3.3% from 1.5%. Fitch's margin figures are based on total
revenue, although $1.8 billion, or 23%, of the company's 2013
revenue came from substrate sales, which are largely passed
through to original equipment customers. Excluding substrate
sales, Fitch's calculated EBITDA margin would have been 10.5% and
its free cash flow margin would have been 4.2%. Overall liquidity
remained relatively strong at year end 2013, with $275 million in
cash and marketable securities and $755 million in availability on
the company's secured revolver, while short-term debt maturities
(including current maturities of long-term debt) totaled $83
million. Long-term debt maturities are comparatively light until
2017, when the final $125 million payment on the company's Term
Loan A and any outstanding revolver borrowings come due.
The funded status of TEN's global pension plans improved
substantially in 2013, with the global funded status increasing to
84% at year-end 2013 from 68% at year end 2012. In the U.S., the
improvement was more significant, with the funded status rising to
82% at year end 2013 from 60% at the end of 2012. As with many
corporate plans, the improvement was due to a combination of
rising long-term interest rates and strong asset returns. TEN
used a 4.8% discount rate to value its projected benefit
obligation in 2013, up from 4.1% in 2012. On a dollar basis,
TEN's global plans were only underfunded by $136 million ($74
million in the U.S.), which Fitch believes is manageable, given
the company's strong liquidity position and free cash flow
prospects. TEN has estimated that required cash contributions to
its global pension plans will be $47 million in 2014, down from
actual contributions of $57 million in 2013.
TEN's secured revolver and secured Term Loan A are both rated one-
notch above the company's IDR, reflecting their substantial
collateral coverage, which includes virtually all of the company's
U.S. assets and up to 66% of its first-tier foreign subsidiaries.
As detailed in Fitch's criteria report, 'Recovery Ratings and
Notching Criteria for Non-Financial Corporate Issuers', 'BBB-' is
the highest issue rating that may be assigned to an issuer with an
IDR of 'BB+' or lower. TEN's senior unsecured notes are rated one
notch below the company's IDR to reflect the substantial amount of
secured debt in the company's capital structure. Assuming a
fully-drawn revolver, about 59% of TEN's long-term debt would be
secured, reducing potential recoveries for unsecured creditors.
RATING SENSITIVITIES
Positive: Further developments that may, individually or
collectively, lead to a positive rating action include:
-- EBITDA leverage declining below 2.0x on a consistent basis
throughout a full year;
-- Maintaining a value-added EBITDA margin of 10% or higher;
-- Increasing the value-added free cash flow margin to about
5% on a consistent basis.
Negative: Further developments that may, individually or
collectively, lead to a negative rating action include:
-- A severe decline in global vehicle production that leads to
reduced demand for TEN's products;
-- An increase in EBITDA leverage to above 2.5x for a prolonged
period;
-- A decline in the company's value-added EBITDA margin below
8%;
-- A prolonged period of negative free cash flow that erodes
the company's liquidity.
TEREX CORP: S&P Raises CCR to 'BB' on Improved Credit Measures
--------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on U.S.-
based lifting and material handling solutions provider Terex Corp.
by one notch, including the corporate credit rating to 'BB' from
'BB-'. The outlook is stable.
The upgrade reflects improvements in Terex's credit measures and
prospects for the company to generate meaningful free operating
cash flow of more than $200 million on an annual basis. S&P
expects Terex to maintain reasonably low leverage (less than 2.5x
net debt to EBITDA on a reported basis) in good market conditions,
which S&P considers consistent with an "aggressive" financial risk
profile given the high volatility of its end markets.
Over the past several years, Terex has reshaped its portfolio to
reduce exposure to weaker performing niches of the construction
market, and to expand its presence into material handling and port
solutions markets. S&P expects these shifts will reduce the
future volatility of operating results and should allow the
company to improve its profitability. S&P views Terex as having a
business risk profile at the better end of its "fair" assessment
category. The combination of S&P's view of the business risk
profile and improved credit measures leads to a "positive"
comparable rating analysis, which supports the 'BB' corporate
credit rating.
Terex manufactures a broad range of equipment related to material
handling, lifting, and construction markets. S&P's "fair"
business risk profile reflects the company's solid positions in
certain niche markets (such as its No. 2 position in the aerial
work platform market) that are competitive and can be subject to
cyclical risks, its good geographic and product diversity, and
decent scale and scope of operations. Despite improvements since
the last downturn and a rebalancing of the portfolio of
businesses, S&P still believes Terex is at risk of significant
profitability volatility.
THEW HOLDINGS: Voluntary Chapter 11 Case Summary
------------------------------------------------
Debtor: Thew Holdings LLC
81-33 Cowles Court
Middle Village, NY 11379
Case No.: 14-41102
Chapter 11 Petition Date: March 12, 2014
Court: United States Bankruptcy Court
Eastern District of New York (Brooklyn)
Judge: Hon. Elizabeth S. Stong
Debtor's Counsel: Matthew M. Cabrera, Esq.
M. CABRERA & ASSOCIATES, PC
55 Old Nyack Turnpike, Suite 308
Nanuet, NY 10954
Phone: 845-531-5474
Fax: 845-230-6643
Email: mcabecf@mcablaw.com
Estimated Assets: $500,000 to $1 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Christopher Tscherne, member.
The Debtor did not file a list of its largest unsecured creditors
when it filed the petition.
TLC HEALTH: Seeks to Employ Howard P. Schultz as Appraiser
----------------------------------------------------------
TLC Health Network sought and obtained permission from the U.S.
Bankruptcy Court to employ Howard P. Schultz & Associates, LLC as
appraiser.
Howard P. Schultz attests that it is a "disinterested person" as
the term is defined in Section 101(14) of the Bankruptcy Code.
The retention of Schutlz is vital to the Debtor as there has been
no recent valuation of the Debtor's real estate. The Debtor's
secured creditors have requested an appraisal and a valuation of
the Debtor's real estate will be critical in the Debtor's analysis
of sale transactions are being pursued.
Schultz has proposed a fee of $13,500, plus reimbursement of
expenses, for the preparation and delivery of an appraisal report
of the Debtor's real estate. Schultz has requested payment of
$5,000 in advance and the balance of the fee, together with
reimbursement of any expenses, upon delivery of the appraisal
report. Conference time and providing testimony in Court would be
charged at $200 per hour.
About TLC Health
TLC Health Network filed a Chapter 11 petition (Bankr. W.D.N.Y.
Case No. 13-13294) on Dec. 16, 2013. The petition was signed by
Timothy Cooper as Chairman of the Board. The Debtor estimated
assets of at least $10 million and debts of at least $1 million.
Jeffrey A. Dove, Esq., at Menter, Rudin & Trivelpiece, P.C.,
serves as the Debtor's counsel. The case is assigned to the Hon.
Carl L. Bucki.
A three-member panel composed of Cannon Design, Chautauqua
Opportunities, Inc., and Jamestown Rehab Services has been
appointed as the official unsecured creditors committee.
TUSCANY INTERNATIONAL: U.S. Trustee Unable to Form Committee
------------------------------------------------------------
The United States Trustee said that an official committee under
11 U.S.C. Sec. 1102 has not been appointed in the bankruptcy case
of Tuscany International Holdings (U.S.A.) Ltd. and Tuscany
International Drilling Inc.
The United States Trustee has attempted to solicit creditors
interested in serving on the Unsecured Creditors' Committee from
the 20 largest unsecured creditors. After excluding governmental
units, secured creditors and insiders, the U.S. Trustee has been
unable to solicit sufficient interest in serving on the Committee,
in order to appoint a proper Committee.
The U.S. Trustee reserves the right to appoint such a committee
should interest developed among the creditors.
About Tuscany International
Tuscany International Holdings (U.S.A.) Ltd. and Tuscany
International Drilling Inc. sought protection from creditors under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case
No. 14-10193) in Delaware on Feb. 2, 2014.
Tuscany USA also intends to commence ancillary proceedings in the
Court of Queen's Bench of Alberta under the Companies' Creditors
Arrangement Act.
Pursuant to a restructuring support agreement with prepetition
lenders holding 95% of the prepetition loans, the Debtors have
agreed to sell substantially all of the assets of TID to lenders
in exchange for a credit bid of certain of their debt, effectuated
through a plan of reorganization.
Headquartered in Calgary, Alberta, Tuscany is engaged in the
business of providing contract drilling and work-over services
along with equipment rentals to the oil and gas industry. Tuscany
is currently focused on providing services to oil and natural gas
operators in South America. Tuscany has operating centers in
Colombia, Brazil, and Ecuador.
The Colombian and Brazilian businesses are operated by certain
non-debtor affiliates, while the Ecuador business is operated by
branch office of debtor TID. As of the Petition Date, Tuscany
entities owned 26 rigs, of which 12 are located in Colombia, nine
in Brazil and five in Ecuador. Of the 26 rigs, 15 were contracted
and operational as of the Petition Date and five were directly
owned by the Debtors.
Latham & Watkins LLP's Mitchell A. Seider, Esq., Keith A. Simon,
Esq., David A. Hammerman, Esq., and Annemarie V. Reilly, Esq.; and
Young Conaway Stargatt & Taylor, LLP's Michael R. Nestor, Esq.,
and Kara Hammond Coyle, Esq., serve as the Debtors' co-counsel.
FTI Consulting Canada, Inc.'s Deryck Helkaa is the chief
restructuring officer. Prime Clerk LLC is the claims and notice
agent, and administrative agent. McCarthy Tetrautt LLP is the
special Canadian counsel. Deloitte & Touche LLP provides tax
services.
UNITED RENTALS: Moody's Assigns B2 Rating on $850MM Senior Notes
----------------------------------------------------------------
Moody's Investors Service assigned a B2 rating to United Rentals'
planned new $850 million senior unsecured notes due 2024 and $525
million add-on 6.125% senior unsecured notes due 2023, which in
conjunction with cash and $15 million of restricted stock are
expected to fund United Rentals' proposed acquisition of National
Pump & Compressor, Ltd and related companies (National Pump,
unrated), refinance existing debt, and pay related fees and
expenses. United Rentals' has announced plans to refinance its
existing $500 million of 9.25% senior unsecured notes due 2019 and
pay down $140 million of debt under its ABL revolver (unrated).
The rating for the 9.25% notes will be withdrawn upon repayment.
All other ratings are unaffected.
Ratings assigned:
Issuer: United Rentals (North America), Inc.
Senior Unsecured Regular Bond/Debenture due 2024, Assigned B2
(LGD4, 65%)
Senior Unsecured Regular Bond/Debenture due 2023, Assigned B2
(LGD4, 65%)
Ratings unaffected:
Issuer: United Rentals (North America), Inc.
Corporate Family Rating, B1
Probability of Default Rating, B1-PD
Speculative Grade Liquidity Rating, SGL-3
Senior Subordinated Regular Bond/Debenture, to B3 (LGD6-94%)
from B3 (LGD6-93%)
Senior Unsecured Regular Bond/Debentures, to B2 (LGD4-65%) from
B2 (LGD4-64%)
Issuer: RSC Holdings III, LLC
Senior Unsecured Regular Bond/Debenture, to B2 (LGD4-65%) from
B2 (LGD4-64%)
Issuer: UR Financing Escrow Corporation
Senior Secured Regular Bond/Debenture, to Ba2 (LGD2-26%) from
Ba2 (LGD2-24%)
Senior Unsecured Regular Bond/Debentures, to B2 (LGD4-65%) from
B2 (LGD4-64%)
Rating Outlook:
Issuer: United Rentals (North America), Inc.
Outlook, Stable
Ratings Rationale
United Rentals' B1 CFR reflects Moody's expectation for continued
revenue and EBITDA growth for both United Rentals existing
business and from National Pump. The acquisition is anticipated to
add over $200 million in annual revenues and approximately $100
million in adjusted EBITDA to United Rentals $5 billion revenue
base and over $2 billion in adjusted EBITDA. United Rentals'
revenue and earnings growth has been driven by the improved demand
environment and the successful integration of the operations of
RSC Holdings Inc. (RSC) acquired in April 2012. The 'B1' CFR also
benefits from United Rentals' significant size relative to its
competitors and related economies of scale, product breadth,
diversified customer base, and market position.
United Rentals' stable ratings outlook reflects the expectation
for modest improvement in its credit metrics balanced against the
cyclical business risks and high leverage.
The ratings could be upgraded or outlook changed if the company
were expected to experience positive free cash flow to debt after
net capital expenditures and other uses so as to allow for
continued deleveraging--specifically, debt to EBITDA trending
towards 3.25 times and EBIT to interest above 1.75 times on a
sustained Moody's adjusted basis. Positive traction could be
limited by future return of cash to shareholders via stock
repurchases depending on leverage. Reductions in leverage would be
considered in light of the company's target leverage ratio, and
its projected overall cash generating ability. The ratings outlook
or rating could be adversely affected if debt to EBITDA were
expected to increase above 4.0 times, EBIT to interest decreased
below 1.25 times, or the company's liquidity profile weakened.
Ratings could also be adversely impacted if sales and margins
contracted thereby resulting in a lower return.
The principal methodology used in this rating was the Global
Equipment and Automobile Rental Industry Methodology published in
December 2010. Other methodologies used include Loss Given Default
for Speculative-Grade Non-Financial Companies in the U.S., Canada
and EMEA published in June 2009.
United Rentals, headquartered in Stamford, CT, is an equipment
rental company with a fleet of approximately 400,000 units and
over 800 rental locations across the US and Canada. The company
operates in two business segments. Its General Rentals segment
provides construction, industrial and homeowner equipment while
its Trench Safety, Power & HVAC segment provides equipment for
underground construction, temporary power, climate control and
disaster recovery. While the primary source of revenue is from
renting equipment, the company also sells equipment and related
parts and services. United Rentals' standalone LTM revenue for the
period ending December 31, 2013 was approximately $5 billion.
National Pump & Compressor, Ltd supplies rental pumping equipment
to the energy industry and other end-markets. Its LTM revenue for
the period ending December 31, 2013 was approximately $200
million.
UNITED RENTALS: S&P Assigns 'BB-' Rating to $850MM Sr. Notes
------------------------------------------------------------
Standard & Poor's Ratings Services said that it has assigned its
'BB-' issue-level ratings to the proposed $850 million senior
unsecured notes due 2024 and $525 million in add-on senior
unsecured notes due 2023 to be issued by United Rentals (North
America) Inc., a subsidiary of United Rentals Inc. (URI). URI is
the guarantor of the notes. The rating is the same as S&P's
corporate credit ratings on United Rentals (North America) and
URI. The recovery rating on this debt is '4', indicating S&P's
expectation of an average (30%-50%) recovery in the event of a
default scenario. S&P expects the company to use the proceeds
from the new notes and cash on hand to acquire the assets of
National Pump & Compressor Ltd., Canadian Pump and Compressor
Ltd., GulfCo Industrial Equipment L.P., and LD Services LLC
(collectively, National Pump) for about $780 million. S&P expects
the company to use the remainder of the proceeds to redeem $500
million in 9.25% senior notes due 2019, pay down revolver
drawings, and pay fees and expenses. The issue-level ratings and
recovery ratings on the company's existing debt remain unchanged.
S&P views the company's business risk profile as fair, primarily
reflecting its leading position in the cyclical, highly
competitive, and fragmented equipment rental industry. The
ratings also reflect URI's aggressive financial risk profile. Pro
forma for the transaction, as of Dec. 30, 2013, URI's total debt
to EBITDA was about 3.5x and free operating cash flow to debt
ratio about 5%.
RATING LIST
United Rentals (North America) Inc.
Corporate Credit Rating BB-/Stable
New Rating
United Rentals (North America) Inc.
$850 mil sr unsec notes due 2024 BB-
Recovery Rating 4
Add-On
United Rentals (North America) Inc.
$525 mil sr unsec notes due 2023 BB-
Recovery Rating 4
USEC INC: Seeks Extension of Time to File Rule 2015.3(a) Report
---------------------------------------------------------------
USEC Inc. asks the U.S. Bankruptcy Court for the District of
Delaware to extend until June 3, 2014, the Petition Date by which
it would be required under Rule 2015.3(a) of the Federal Rules of
Bankruptcy Procedure to file the first report of financial
information with respect to entities in which the company's estate
holds a controlling or substantial interest, or permanently waive
the requirements to file the Rule 2015.3(a) reports if the
effective date of its "pre-arranged" plan of reorganization occurs
on or before June 3.
The Debtor is the ultimate parent of several subsidiaries that are
not in bankruptcy under Chapter 11. The non-debtor subsidiaries
consist of (a) American Centrifuge Holdings, LLC, and United
States Enrichment Corporation, both of which are direct
subsidiaries of the Debtor, and (b) American Centrifuge
Manufacturing, LLC, American Centrifuge Enrichment, LLC, American
Centrifuge Operating, LLC, American Centrifuge Technology, LLC,
and American Centrifuge Demonstration, LLC, each of which is a
direct subsidiary of American Centrifuge Holdings. All of
American Centrifuge Holdings' subsidiaries are wholly owned with
the exception of American Centrifuge Manufacturing, with respect
to which 55% is owned by American Centrifuge Holdings, and 45% of
which is owned by Babcok & Wilcox Technical Services Group.
Rule 2015.3(a) provides that a Chapter 11 debtor will file
periodic reports regarding the financial condition of non-debtor
entities that are privately held and in which the debtor holds a
substantial or controlling interest.
All of the non-debtor subsidiaries fall under the rubric of Rule
2015.3(a) as each entity is "not a publicly traded corporation or
a debtor in a case under title 11" and each is an entity "in which
the estate holds a substantial or controlling interest."
In this case, (a) the Debtor has filed a plan, (b) the claims of
the Debtor's secured creditors, priority creditors and general
unsecured creditors are unimpaired under the plan, and (c)
approximately 65% in amount of the holders in one of two impaired
classes entitled to vote on the plan, and both of the holders in
the second of those impaired classes, have agreed to the treatment
of their claims and interests set forth in the plan. As a result,
negotiations as to the treatment of claims and interests having
already occurred and the Plan having already been filed, requiring
the Debtor to file its 2015.3(a) reports is unnecessary and would
not serve the purpose of Rule 2015.3(a), which, in the Chapter 11
context, is to provide information that can be used in the plan
process to maximize recoveries to the Debtors' creditors, the
Debtor's counsel, D.J. Baker, Esq., at Latham & Watkins LLP, in
New York, asserts.
A hearing on the request is scheduled for April 21, 2014, at 11:00
a.m. (ET). Objections are due March 21.
The Debtor is also represented by Rosalie Walker Gray, Esq., and
Adam S. Ravin, Esq., at Latham & Watkins LLP, in New York; and
Mark D. Collins, Esq., and Michael J. Merchant, Esq., at Richards,
Layton & Finger, P.A., in Wilmington, Delaware.
USEC Inc. filed a Chapter 11 bankruptcy petition (Bank. D. Del.
Case No. 14-10475) on March 5, 2014. John R. Castellano signed
the petition as chief restructuring officer. The Debtor disclosed
total assets of $70 million and total liabilities of $1.07
billion. The Hon. Christopher S. Sontchi presides over the case.
Latham & Watkins LLP acts as the Debtor's general counsel.
Richards, Layton and Finger, P.A., serves as the Debtor's Delaware
counsel. Vinson & Elkins is the Debtor's special counsel.
Lazard Freres & Co. LLC acts as the Debtor's investment banker.
AP Services, LLC, provides management services to the Debtor.
Logan & Company Inc. serves as the Debtor's claims and noticing
agent. Deloitte Tax LLP are the Debtor's tax professionals. The
Debtor's independent auditor is PricewaterhouseCoopers LLP.
KPMG LLP provides fresh start accounting services to the Debtor.
WARNER SPRINGS RANCHOWERS: Liquidating Trustee Named
----------------------------------------------------
With the confirmation of the Amended Liquidating Chapter 11 Plan
of Warner Springs Ranchowers Association, Judge Louise Decarl
Adler entered an order confirming the oversight committee's
selection of Leslie T. Gladstone as liquidating trustee over the
liquidating trust.
The bankruptcy judge in January entered a formal order confirming
the Liquidating Chapter 11 plan. A copy of the order is available
for free at:
http://bankrupt.com/misc/Warner_Springs_Plan_Order.pdf
The effective date of the Plan was Feb. 3, 2014, according to a
Feb. 20 notice by the liquidating trustee.
"Distributions to co-owners have begun. Checks will continue to be
mailed to co-owners as their Statement of Information (or Trustee
Certificate) is received and it is determined that the co-owner's
interest is not subject to any third party liens, encumbrances, or
other clouds on title," according to the notice.
The Debtor maintains a Web site at
http://bankruptcy.gordonrees.com/WSRAto store all pleadings,
notices, motions, and other documents on the docket for the
bankruptcy case. Co-owners have access to the Web site.
The trustee has tapped her law firm as counsel:
Leslie T. Gladstone, Esq.
Christin A. Batt, Esq. (SBN 222584)
FINANCIAL LAW GROUP
401 Via Del Norte
La Jolla, CA 92037
Telephone: (858) 454-9887
Facsimile: (858) 454-9596
E-mail: christinb@flgsd.com
The Chapter 11 Plan
The Debtor sold its Warner Springs Ranch property to Warner
Springs Ranch Resorts LLC, assignee of Pacific Hospitality
Group, Inc.,
As reported in the Troubled Company Reporter on Sept. 5, 2013,
pursuant to the Plan, the Debtor will complete the liquidation of
assets that were not sold and distribute the proceeds from the
sale and liquidation of all of the Debtor's assets.
The Plan provides for (i) the creation of a liquidating trust that
will administer and liquidate all of the Debtor's assets and (ii)
the allocation and the distribution of the proceeds from the sale
of all of the Debtor's assets to Holders of Allowed Claims and Co-
Owners. The Debtor will be dissolved, its affairs wound-up and all
assets transferred to the Liquidating Trust. An Oversight
Committee will be formed to select the Liquidating Trustee and
provide input, oversight and guidance to the Liquidating Trust.
Under the Plan, all Holders of Allowed Claims will be paid in full
and Co-Owners will receive one or more Distributions from the
remaining proceeds from the liquidation of the Debtor's assets and
the so-called UDI Proceeds.
A copy of the Disclosure Statement is available for free at
http://bankrupt.com/misc/WARNER_SPRINGS_ds_amended.pdf
About Warner Springs Ranchowners
Warner Springs Ranchowners Association, a California non-profit
mutual benefit corporation, filed for Chapter 11 protection
(Bankr. S.D. Cal. Case No. 12-03031) on March 1, 2012. Judge
Louise DeCarl Adler presides over the case. Megan Ayedemo, Esq.,
and Jeffrey D. Cawdrey, Esq., at Gordon & Rees LLP, represent the
Debtor. The Debtor has hired Andersen Hilbert & Parker LLP as
special counsel. Timothy P. Landis, P.H., serves as the Debtor's
environmental consultant.
The Debtor's schedules disclosed $14,079,894 in assets and
$1,466,076 in liabilities as of the Chapter 11 filing.
Warner Springs Ranchowners Association managed and co-owned 2,300
acres of unencumbered rural land known as the Warner Springs Ranch
in San Diego County, California. The improvements on the Property
include 250 cottage style hotel rooms, an 18 hole golf course,
service/gasoline station, tennis courts, an aquatics center, an
equestrian center, an airport, a spa, and two restaurants.
WITHOUT WALLS INT'L CHURCH: Seeks Bankruptcy Protection
-------------------------------------------------------
Without Walls International Church Inc., a Florida religious
organization with two campuses, sought bankruptcy protection from
creditors, preventing a lender from foreclosing on one of its
properties.
Michael Bathon, substituting for Bill Rochelle, the bankruptcy
columnist for Bloomberg News, reports that the company listed as
much as $50 million each in assets and debt in Chapter 11
documents filed March 10 in U.S. Bankruptcy Court in Tampa,
Florida, where it's based.
The church has mass services that are also broadcast over the
Internet and provides outreach and feeding service to the
community, according to its website. Without Walls International
was founded in 1991 by Pastor Randy A. White, who signed the
bankruptcy petition, with now ex-wife Pamela White, the report
related. The church boasted a following of about 20,000 before it
fell on hard times in 2007 when the Whites divorced and the U.S.
Senate initiated an inquiry into the church's finances, according
to the Tampa Tribune.
The church has properties in Polk and Hillsborough counties in
Florida, the report related. The Polk property is dormant and the
Hillsborough property is condemned.
While the church's court filings in the bankruptcy are few so far,
its lender has already requested an emergency hearing for March 13
to seek a court permission to proceed with a state court
foreclosure action that's set to be heard on March 13, the report
said. The lender, Evangelical Christian Credit Union, claiming it
is owed about $29 million in secured debt, needs the bankruptcy
judge's approval to continue with the lawsuit and foreclosure
because they are automatically halted by the Chapter 11 filing.
The case is In re Without Walls International Church Inc., 14-bk-
02567, U.S. Bankruptcy Court, Middle District of Florida (Tampa).
Litigation Tactic
Keeley Sheehan, writing for Tampa Bay Times, reported that the
Evangelical Christian Credit Union has called the March 5 Chapter
11 bankruptcy filing of Without Walls International Church a
"litigation tactic" to prevent a foreclosure on the W Columbus
Drive megachurch and a shuttered church in Polk County, Florida.
The credit union is owed $29 million by Without Walls
International Church. Without Walls defaulted on its loans prior
to the bankruptcy filing and the credit union began foreclosure
proceedings in October 2012.
The Times said the bankruptcy court has denied the credit union's
request to move forward on the foreclosure case, said Michael J.
Hooi, Esq., an attorney representing the church. Without Walls
said in court documents filed Tuesday that the credit union's
request was baseless. Another hearing on the issue is schedule
for April, when the court may schedule a trial if the matter isn't
resolved, Mr. Hooi said.
* S.E.C. Brings Case Against 10th Former SAC Capital Employee
-------------------------------------------------------------
Ben Protess and Matthew Goldstein, writing for The New York Times'
DealBook, reported that federal regulators on March 13 announced
the latest case to stem from the decade-long insider trading
investigation into SAC Capital Advisors, taking aim at a former
employee for facilitating a number of illegal trades.
According to the report, Ronald N. Dennis is the 10th former
employee of SAC Capital -- the giant hedge fund run by the
billionaire investor and art collector, Steven A. Cohen -- to face
insider trading charges. In settling the civil charges with the
Securities and Exchange Commission, Mr. Dennis agreed to be banned
from the securities industry and to pay $200,000.
The case against Mr. Dennis comes eight months after the
investigation culminated with the indictment of SAC itself, the
report noted. After that move, a rare show of criminal force
against a large company, the investigation into SAC and Mr. Cohen
began to lose some momentum.
Mr. Dennis, who worked for less than two years at an arm of SAC
known as CR Intrinsic before he left in 2010, was not charged
criminally, the report said. In past court filings, prosecutors
named him as an uncharged co-conspirator.
Some of his former SAC colleagues have faced worse fates, the
report pointed out. As SAC became synonymous with the broader
insider trading investigation that consumed some of Wall Street's
biggest name hedge funds, eight current or former SAC employees
have either pleaded guilty or been convicted.
* Singapore to Regulate Bitcoin Dealers
---------------------------------------
Anjani Trivedi, writing for The Wall Street Journal, reported that
the Monetary Authority of Singapore became the first Asian
regulator to bring bitcoin dealers under its purview, as
regulators across the world grow wary.
According to the report, the MAS will require dealers that buy,
sell or facilitate the exchange of virtual currencies for real
currencies "to verify the identities of their customers and report
suspicious transactions" -- much as it requires of money changers
-- the regulator said in a news release on March 13. The purpose,
the release added, is to prevent bitcoin from being used in money
laundering or terrorist financing.
The regulator's responsibility "does not extend to the safety and
soundness of virtual currency intermediaries nor the proper
functioning of virtual-currency transactions," the MAS said, the
report cited.
It added that bitcoin investors wouldn't be covered by the
Securities and Futures Act and the Financial Advisers Act, which
protect securities investors, the report said.
MAS said its move will make Singapore "one of the first countries
in the world to regulate virtual-currency intermediaries" and that
it will continue to closely monitor how the currency develops, the
report added.
* BOOK REVIEW: GROUNDED: Frank Lorenzo and the Destruction of
Eastern Airlines
-------------------------------------------------------------
Author: Aaron Bernstein
Publisher: Beard Books
Softcover: 272 Pages
List Price: $34.95
Review by Susan Pannell
Order your copy today at
http://www.beardbooks.com/beardbooks/grounded.html
Barbara Walters once referred to Frank Lorenzo as "the most
hated man in America." Since 1990, when this work was first
published and Eastern Airlines' troubles were front-page news,
there had been many worthy contenders for the title.
Nonetheless, readers sensitive to labor-management concerns,
particularly in the context of corporate restructuring, will
find in this book much to support Barbara Walters'
characterization.
To recap: For a few brief and discordant years, Frank Lorenzo
was boss of the biggest airline conglomerate in the free world
(Aeroloft was larger), combining Eastern Continental, Frontier,
and People Express into Texas Air Corporation, financing his
empire with junk bonds. TAC ultimately comprised a fleet of 452
planes and 50,000 employees, with revenues of $7 billion.
But Lorenzo was lousy on people issues, famously saying, "I'm
not paid to be a candy ass." The mid-180's were a bad time to
take that approach. Those were the years when the so-called
Japanese model of management, which emphasized cooperation
between management and labor, was creating a stir. The Lorenzo
model was old school: If the unions give you any trouble, break
'em.
That strategy had worked for him at Continental, where he'd
filed Chapter 11 despite the airline's $60 million in cash
reserves, in order to exploit a provision in the Bankruptcy
Code allowing him to abrogate his contracts with the unions. But
Congress plugged that Loophole by the time Lorenzo went to the
mat with Charles Bryan, IAM chapter president. Lorenzo might
have succeeded in breaking the machinists alone, but when flight
attendants and pilots honored the picket line, he should have
known it was time to deal. He didn't.
Instead he tried again for a strategic advantage through the
bankruptcy courts, by filing Chapter 11 in the Southern District
of New York where bankruptcy judges were believed to be more
favorably disposed toward management than in Miami where Eastern
is headquartered, Eastern had to hide behind the skirts of its
subsidiary, Ionosphere clubs, Inc., a New York Corporation, in
order to get into SDNY. Six minutes later, Eastern itself filed
in the same court as a related proceeding.
The case was assigned to Judge Burton Lifland, whom Eastern's
bankruptcy lawyer, Harvey Miller, knew well, but Lorenzo was
mistaken if he believed that serendipitous lottery assignment
would be his salvation. Judge Lifland a year later declared
Lorenzo unfit to run the airline and appointed Martin Shugrue as
trustee.
Most hated man or not, one wonders whether the debacle was all
Lorenzo's fault. Eastern unions, in particular the notoriously
militant machinist, were perpetual malcontents, and Charlie
Bryan was an anti-management zealot, to the point of
exasperating even other IAM officers.
The book provides a detailed account of the three-and-a-half
period between Lorenzo's acquisition of Eastern in the autumn of
1986 and judge Lifland's appointment of the trustee in April
1990. It includes the history of Eastern's pre-Lorenzo
management, from World War I flying ace Eddie Rickenbacker to
astronaut Frank Borman.
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com by e-mail.
On Thursdays, the TCR delivers a list of recently filed
Chapter 11 cases involving less than $1,000,000 in assets and
liabilities delivered to the nation's bankruptcy courts. The
list includes links to freely downloadable of these small-dollar
petitions in Acrobat PDF documents.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
The Sunday TCR delivers securitization rating news from the week
then-ending.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine
Tumanda, Valerie Udtuhan, Howard C. Tolentino, Carmel Paderog,
Meriam Fernandez, Joel Anthony G. Lopez, Cecil R. Villacampa,
Sheryl Joy P. Olano, Ivy B. Magdadaro, Carlo Fernandez,
Christopher G. Patalinghug, and Peter A. Chapman, Editors.
Copyright 2014. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers. Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.
The TCR subscription rate is $975 for 6 months delivered via
e-mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance thereof
are $25 each. For subscription information, contact Peter A.
Chapman at 215-945-7000 or Nina Novak at 202-241-8200.
*** End of Transmission ***