/raid1/www/Hosts/bankrupt/TCR_Public/140509.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, May 9, 2014, Vol. 18, No. 127
Headlines
AFFYMAX INC: Incurs $1.4 Million Net Loss in First Quarter
ALION SCIENCE: Amends Form S-1 Prospectus with SEC
ALPHAMETRIX GROUP: Receiver's Suit Says Brass Bled Company Dry
AMERICAN MEDICAL: E.D.N.Y. Court Rejects Owner's Suit v. Doyaga
AMERIGO ENERGY: Delays Form 10-K for 2013
AMINCOR INC: Delays Form 10-K for 2013
ANCHOR GLASS: Moody's Assigns 'B2' CFR & Rates $335MM Debt 'B3'
ARISTA POWER: Incurs $3.3 Million Net Loss in 2013
ART APPLIED: Ex-Employee's ERISA Claims Rejected
ASSURED PHARMACY: BDO USA LLP Raises Going Concern Doubt
ATLANTIC COAST: Albury Investment Reports 8.5% Equity Stake
BOARDWALK & BASEBALL: Training Facility Sets Auction
BROADVIEW NETWORKS: Incurs $8.5 Million Net Loss in 2013
BROOKLYN HOLDINGS: U.S. Trustee Appoints 5-Member Committee
BROOKSTONE HOLDINGS: Bondholders Revealed In Court Docs
CAESARS ENTERTAINMENT: Has Tender Offers for Debt Securities
CAESARS ENTERTAINMENT: Guarantee Removal Will Spur Rights Fight
CAESARS ENTERTAINMENT: Fitch Assigns CCC Rating to $1.75BB Loan
CALMENA ENERGY: Forbearance Agreement Extended Until May 9
CALUMET PHOTOGRAPHIC: C&A Marketing to Reopen Business on May 11
CANCER GENETICS: Incurs $12.4 Million Net Loss in 2013
CARIBBEAN PETROLEUM: 3rd Cir. Affirms Ruling on Intertek Claims
CARMIKE CINEMAS: S&P Raises Corp. Credit Rating to 'B+'
CHINA NETWORKS: UHY Vocation HK CPA Raises Going Concern Doubt
CLAIRE'S STORES: Beatrice Lafon Promoted to CEO
COASTLINE INVESTMENTS: 2 Responsible Individuals Added
COLDWATER CREEK: Wants to Sell Kootenai Parcel for $2.6MM
COMSTOCK RESOURCES: S&P Affirms 'B' Corp. Credit Rating
CONNACHER OIL: Moody's Affirms 'Caa2' Corporate Family Rating
CONTINENTAL BUILDING: S&P Raises Rating on $465MM Facilities to B+
COPYTELE INC: Amends 27.7 Million Shares Resale Prospectus
CRENSHAW HALL: Case Summary & 6 Unsecured Creditors
DESIGNER AUTO: Case Summary & 3 Largest Unsecured Creditors
DETROIT, MI: Bankruptcy Vote Hinges on Creditors' Homework
DOLAN COMPANY: Objections to Plan Confirmation Filed
DOLAN COMPANY: Gets Final OK to Incur $10MM DIP Financing
DOLAN COMPANY: Kirkland, Pachulski Approved as Bankr. Lawyers
DOLAN COMPANY: Wants Committee of Equity Holders Disbanded
DOLPHIN DIGITAL: Late 10-K Shows $3.39-Mil. Loss in 2012
DORAL FINANCIAL: S&P Lowers ICR to 'CC' on Capital Breach
DYNASIL CORP: Closes $4 Million Revolving Line of Credit
EASTERN HILLS: Wants July 2 Plan Approval Deadline
EASTERN HILLS: Files Full-Payment Chapter 11 Plan
EASTMAN KODAK: Agrees To Drop Shutterfly's Noncompete Lawsuit
ENERGY FUTURE: Moves Ahead on Bankruptcy Debt Exchange Offer
ENERGY FUTURE: Unit Commences Offer for 1st Lien Notes Settlement
ENERGYSOLUTIONS LLC: Moody's Rates $125MM 1st Lien Debt 'B3'
EVANS & SUTHERLAND: Royce & Associates Owns Less Than 1% Stake
EXCEL TRUST: Fitch Assigns Initial 'BB' Preferred Stock Rating
EXCEL TRUST: S&P Assigns 'BB+' CCR; Outlook Stable
FIAT CHRYSLER: Five-Year Growth Plan Leaves Investors Cold
FIRST MARINER: Process of Selling Banks in Bankruptcy Questioned
FIRST NATIONAL: Auditor Won't Seek Reappointment
FLINTKOTE COMPANY: Exclusive Filing Period Extended to Sept. 30
FREMONT HOSPITALITY: Auction of Former Clarion Inn Today
FREMONT HOSPITALITY: Claims Bar Dates Set for June 13 and 23
GENERAL MOTORS: Brings Back Former Communications Head
GENERAL MOTORS: Recalls Some Vehicles for Potential Brake Defect
GEOMET INC: Stockholders Authorize Asset Sale
GEOVIC MINING: TSX Reviews Continued Listing Eligibility
GILES-JORDAN: 39-Acre Galveston, TX Property in Chapter 11
GLOBAL AVIATION: Seeks Approval of Cerberus Forbearance Agreement
GREEN PLAINS: Moody's Assigns B2 CFR & Rates $225MM Debt B2
GREENSTAR AGRICULTURAL: OSC Grants Temporary MCTO
GSE ENVIRONMENTAL: Proposes $45-Mil. of DIP Financing
GSE ENVIRONMENTAL: Proposes Prime Clerk as Claims Agent
GSE ENVIRONMENTAL: Proposes to Pay $4.1-Mil. to Critical Vendors
GSE ENVIRONMENTAL: Limiting Equity Transfers to Save NOLs
HOUSTON, TX: Moody's Assigns 'B2' Rating to $308MM Airport Bonds
HOWREY LLP: Trustee Cuts $4.2 Million Deal With Ex-Partners
IN PLAY MEMBERSHIP: Says Fourth Amended Plan Should Be Confirmed
IN PLAY MEMBERSHIP: Proposes Management Agreement With BCG
INVENT VENTURES: Paritz & Company Raises Going Concern Doubt
ISTAR FINANCIAL: Files Form 10-Q, Had $26.6MM Net Loss in Q1
JASON WISNIEWSKI: $100,000 of Gould Debt Not Dischargeable
JOHN WILLIAM CRANNEY: Ch.11 Trustee Allowed to Proceed With Sale
K-MAX TRADING: Voluntary Chapter 11 Case Summary
LABORATORY SKIN: Court Rules on Chapter 11 Trustee's Fees
LAKES GAS: Jorgas Inc. Sues to Collect $332,000 in Payments
LEGACY RESERVES: Moody's Affirms 'B2' CFR; Outlook Positive
LEVEL 3: Stortz Quits as EVP CAO and Secretary Quits
LIGHTSQUARED INC: Gets Court Approval for $74 Million Loan
LIGHTSQUARED INC: Fails to Confirm Ch. 11 Plan
LOCKHART NORTH 130: Involuntary Chapter 11 Case Summary
MACKINAW POWER: Fitch Affirms 'BB-' Rating to $147MM Loan
MCCLANAHAN TIRE: Case Summary & 20 Largest Unsecured Creditors
MCLEAN SCHOOL: S&P Lowers Rating on Series 2001 Bonds to 'BB'
MEDICAL ALARM: Files Form 10-Q for Q3 of 2012
MEKHI PHIFER: "Divergent" Actor Files for Chapter 11
MERRIMACK PHARMACEUTICALS: Files Form 10-Q, Had $27MM Loss in Q1
MICROVISION INC: Reports $8 Million Net Loss in First Quarter
MISSION NEW ENERGY: Members Approve New Issue of Shares
N-VIRO INTERNATIONAL: Inks Forbearance Pact with Monroe Bank
NATIONAL HERITAGE: District Court Rules on Behrmann Appeal
NATURAL MOLECULAR: Proposes MedTech Billing Agreement
NATURAL MOLECULAR: Says CEO Suit Hampers Reorganization
NEW ENGLAND COMPOUNDING: In $100 Million Accord
NFC DATA: Enters Settlement with NFC Data on Defaulted Loans
NEWLEAD HOLDINGS: MGP Asks Additional 8MM Settlement Shares
NEXT 1 INTERACTIVE: Michael Craig Appointed Director
NORTEL NETWORKS: Canadian Judge Criticizes Lawyers for Fees
NORTH BALDWIN EMS: Voluntary Chapter 11 Case Summary
NORTH WOODS CAPITAL: 6 Parcels of Property to Be Sold June 12
NORTHERN BERKSHIRE: MNA/NNU Releases Detailed Financial Analysis
NYTEX ENERGY: CFO Bryan Sinclair Resigns
OCWEN FINANCIAL: Moody's Assigns 'B2' Rating on New Senior Notes
OCWEN FINANCIAL: S&P Assigns 'B' Rating to $350MM 5-Yr. Sr. Notes
OPTIMUMBANK HOLDINGS: Earns $330,000 in First Quarter
OREMEX SILVER: Provides Update on Management Cease Trade Order
ORYON TECHNOLOGIES: Files Chapter 11 Bankruptcy Petition
PLATFORM SPECIALTY: $200MM PIPE Offering No Impact on B1 Rating
PRINCESS HEALTHCARE: Voluntary Chapter 11 Case Summary
QUICKSILVER RESOURCES: Reports $59MM Net Loss in 1st Quarter
QUICKSILVER RESOURCES: S&P Raises Rating on 2nd Lien Debt to CCC+
RADIAN GUARANTY: Moody's Raises Insurance Financial Rating to Ba2
RADIAN GROUP: S&P Assigns 'B-' Sr. Unsecured Debt Rating
RADIENT PHARMACEUTICALS: Insolvent, Plans to Restructure
REFCO INC: Ex-Customers Dodge Claims In $263M 2nd Circ. Case
RESIDENTIAL CAPITAL: Unit's Suit v. Cherry Creek Stays in Minn.
PRESIDENTIAL REALTY: Posts $2.5 Million Net Income in 2013
RESTORGENEX CORP: Goldman Kurland Raises Going Concern Doubt
REYES DRYWALL: Bankruptcy Stays Bay Area Painters' Suit
RITE AID: Profit Falls 55% Despite Continued Sales Growth
S&R GRANDVIEW: Chapter 11 Case Dismissal Affirmed
SAN YSIDRO: Fitch Affirms 'BB+' Rating to $82MM GO Bonds
SARKIS INVESTMENTS: MSCI Says Plan Unconfirmable
SARKIS INVESTMENTS: Files Second Amended Disclosure Statement
SCH-TRIDENT: Dallas Shopping Center Owner Files for Chapter 11
SCH-TRIDENT: Proposes to Use Cash Collateral
SCH-TRIDENT LTD: Voluntary Chapter 11 Case Summary
SEANERGY MARITIME: Regains Compliance with Nasdaq Requirements
SEVEN COUNTIES: Has Seventh Interim Order to Use Cash Collateral
SHEARER'S FOODS: Moody's Places B2 CFR on Review for Downgrade
SHEARER'S FOODS: S&P Puts 'B' CCR on CreditWatch Negative
SOLAR POWER: Enters Into $21.75-Million Purchase Agreement
SPEEDIMISSIONS INC: Incurs $814K Net Loss in 2013
STELERA WIRELESS: Files Joint Plan of Liquidation
STEREOTAXIS INC: Incurs $4.1 Million Net Loss in First Quarter
SUNEDISON SEMICONDUCTOR: Moody's Rates $250MM Senior Debt 'B2'
SUNEDISON SEMICONDUCTOR: S&P Assigns Prelim B- Corp. Credit Rating
TELEXFREE LLC: Judge Transfers Chapter 11 Case to Massachusetts
THERAPEUTICSMD INC: Files Presentation Materials with SEC
THOMAS MECHAM RICKS: Partial Withdrawal of Reference Denied
TRANSGENOMIC INC: Common Stock Uplisted to NASDAQ Capital Market
TRONOX INC: Awaits Approval of Anadarko Settlement Agreement
UNIQUE BROADBAND: June 17 Hearing Set for Disputed Jolian Claims
VIGGLE INC: Closes Exchange Agreements with Stockholders
VISCOUNT SYSTEMS: Issues 19.797 Series A Conv. Preferred Stock
VISHAL PROPERTIES: Case Summary & 6 Unsecured Creditors
VISION INDUSTRIES: D. Gauger to Serve as Acting CFO Until 2015
WOLVERINE WORLD: S&P Ups CCR to BB on Lower Debt & Higher Earnings
WPCS INT'L: Receives NASDAQ Listing Non-Compliance Notice
WPCS INTERNATIONAL: Non-Compliance Notice Triggers Default
ZUMBOX INC: Closes After Seven Years
* Get Single-Asset Real Estate Out of Chapter 11, Lawyer Proposes
* Older Auto Expense Disallowed by San Francisco Appellate Panel
* Allstate, Merrill Lynch to End $167 Million Mortgage Suit
* Moody's, S&P Say CalPERS Looking for Ratings Scapegoat
* SAC Record $1.8 Billion Insider Plea Caps 7-Year Probe
* Finra Scrutinizes Banks' Role in Bond Market
* BOOK REVIEW: The First Junk Bond: A Story of Corporate Boom
and Bust
*********
AFFYMAX INC: Incurs $1.4 Million Net Loss in First Quarter
----------------------------------------------------------
Affymax, Inc., filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $1.39 million on $0 of total revenue for the three months ended
March 31, 2014, as compared with a net loss of $27.04 million on
$844,000 of total revenue for the same period last year.
As of March 31, 2014, the Company had $6.46 million in total
assets, $8.79 million in total liabilities and a $2.33 million
total stockholders' deficit.
Going Concern/Bankruptcy Warning
"Because we have not made an irrevocable decision to liquidate,
the accompanying condensed financial statements have been prepared
under the assumption of a going concern basis that contemplates
the realization of assets and liabilities in the ordinary course
of business. Operating losses have been incurred each year since
inception, resulting in an accumulated deficit of $559.5 million
as of March 31, 2014. Nearly all of our revenues to date have
come from our collaboration with Takeda. As a result of the
February 23, 2013 nationwide voluntary recall of OMONTYS and the
suspension of all marketing activities, there is significant
uncertainty as to whether we will have sufficient existing cash to
fund our operations for the next 12 months. Given our limited
resources, there is no assurance that we will be able to reduce
our operating expenses enough to meet our existing and future
obligations and conduct ongoing operations. If we do not have
sufficient funds to continue operations, we could be required to
liquidate our assets, seek bankruptcy protection or other
alternatives. Any failure to dispel any continuing doubts about
our ability to continue as a going concern could adversely affect
our ability to enter into collaborative relationships with
business partners. These matters raise substantial doubt about
our ability to continue as a going concern. Our financial
statements do not include any adjustments that may result from the
outcome of this uncertainty," the Company said in the Quarterly
Report.
A copy of the Form 10-Q is available for free at:
http://is.gd/DfCWtj
2013 Results
Affymax filed an annual report on Form 10-K disclosing a net loss
of $14.42 million on $1.36 million of total revenue for the year
ended Dec. 31, 2013, as compared with a net loss of $93.41 million
on $94.37 million of total revenue for the year ended Dec. 31,
2012.
As of Dec. 31, 2013, the Company had $7.44 million in total
assets, $8.87 million in total liabilities and a $1.42 million
total stockholders' deficit.
Ernst & Young LLP, in Redwood City, California, issued a "going
concern" qualification on the consolidated financial statements
for the year ended Dec. 31, 2013. The independent auditors noted
that there is significant uncertainty as to whether the Company
will have sufficient financial resources to fund its operations
for the next 12 months. This condition raises substantial doubt
about the Company's ability to continue as a going concern.
A copy of the Form 10-K is available for free at:
http://is.gd/xc1vNc
About Affymax
Affymax, Inc. (Nasdaq: AFFY) is a biopharmaceutical company based
in Palo Alto, California. In March 2012, the U.S. Food and Drug
Administration approved the Company's first and only product,
OMONTYS(R) (peginesatide) Injection for the treatment of anemia
due to chronic kidney disease in adult patients on dialysis.
OMONTYS is a synthetic, peptide-based erythropoiesis stimulating
agent, or ESA, designed to stimulate production of red blood cells
and has been the only once-monthly ESA available to the adult
dialysis patient population in the U.S. The Company co-
commercialized OMONTYS with its collaboration partner, Takeda
Pharmaceutical Company Limited, or Takeda during 2012 until
February 2013, when the Company and Takeda announced a nationwide
voluntary recall of OMONTYS as a result of safety concerns.
ALION SCIENCE: Amends Form S-1 Prospectus with SEC
--------------------------------------------------
Alion Science and Technology Corporation amended its Form S-1
registration statement relating to:
-- offer to Exchange all of its Outstanding $235,000,000 10.25%
Senior Notes due 2015 and the Related Guarantees (CUSIP
016275AF6) ("Old Notes") for an aggregate of:
up to $235,000,000 of its Third-Lien Senior Secured Notes
due 2019 and the Related Guarantees (together with up to
940,000 Warrants to Purchase up to 3,086,583 Shares of
Common Stock, subject to increase) and up to $20,000,400 in
Cash (Subject to Proration) and the Solicitation of
Consents; and
(b) unit offering of up to 8,877 Units consisting of an
aggregate of up to $8,877,000 of its Third-Lien Senior
Secured Notes due 2019 and the Related Guarantees (together
with up to 35,508 Warrants to Purchase up to 132,632 Shares
of Common Stock, subject to increase) Available to holders
of Old Notes.
The proposed aggregate maximum offering price is $305,463,989.
The Registrants amended the Registration Statement to delay its
effective date.
Goldman, Sachs & Co. serves as dealer manager and solicitation
agent.
A copy of the Form S-1/A is available for free at:
http://is.gd/6EnG0S
About Alion Science
Alion Science and Technology Corporation, based in McLean,
Virginia, is an employee-owned company that provides scientific
research, development, and engineering services related to
national defense, homeland security, and energy and environmental
analysis. Particular areas of expertise include communications,
wireless technology, netcentric warfare, modeling and simulation,
chemical and biological warfare, program management.
Alion Science has been reporting losses for four consecutive years
from Sept. 30, 2010, to Sept. 30, 2013. In 2013, Alion Science
incurred a net loss of $36.59 million.
Deloitte & Touche LLP, in McLean, Virginia, issued a "going
concern" qualification on the consolidated financial statements
for the year ended Sept. 30, 2013. The independent auditors noted
that the Company does not expect to be able to repay its existing
debt at their scheduled maturities. The Company's financing
needs, its recurring net losses, and its excess of liabilities
over assets raise substantial doubt about its ability to continue
as a going concern, the auditors stated.
As of Dec. 31, 2013, the Company had $599.39 million in total
assets, $787.09 million in total liabilities, $61.89 million in
redeemable common stock, $20.78 million in common stock warrants,
$130,000 in accumulated other comprehensive loss and a $270.51
million accumulated deficit.
"Our liabilities exceed our assets which makes refinancing our
debt more difficult and expensive. Operating cash flow is
insufficient to repay the Secured and Unsecured Notes at maturity,
which raises substantial doubt as to the Company's ability to
continue as a going concern," the Company said in the Form 10-Q.
Bankruptcy Warning
Management's cash flow projections indicate that absent a
refinancing transaction or series of transactions, the Company
will be unable to pay the principal and accumulated unpaid
interest on its Secured Notes and Unsecured Notes when those
instruments mature in November 2014 and February 2015,
respectively. On Dec. 24, 2013, Alion entered into an agreement
with the holders of a majority of its Unsecured Notes regarding
certain possible refinancing transactions.
The proposed refinancing transactions involve: replacing Alion's
credit facility; refinancing the Secured Notes with $350 million
in new secured term loans; exchanging our Unsecured Notes for
either new third lien notes and a series of new warrants, or a
limited amount of cash for a portion of Unsecured Notes at a price
below par; payment of accrued and unpaid interest; and obtaining
certain consents from Unsecured Noteholders.
"However, management can provide no assurance that we will be able
to enter into definitive agreements regarding the terms of the
refinancing transactions or conclude a refinancing of our
Unsecured Notes, or that additional financing will be available to
retire or replace our Secured Notes, and if available, that terms
of any transaction would be favorable or compliant with the
conditions for such financing set forth in the Refinancing Support
Agreement. The Company's high debt levels, of which $332.5
million matures on November 1, 2014 and Alion's recurring losses
will likely make it more difficult for Alion to raise capital on
favorable terms and could hinder its operations. Further, default
under the Unsecured Note Indenture or the Secured Note Indenture
could allow lenders to declare all amounts outstanding under the
revolving credit facility, the Secured Notes and the Unsecured
Notes to be immediately due and payable. Any event of default
could have a material adverse effect on our business, financial
condition and operating results if creditors were to exercise
their rights, including proceeding against substantially all of
our assets that secure the Credit Agreement and the Secured Notes,
and will likely require us to invoke insolvency proceedings
including, but not limited to, a voluntary case under the U.S.
Bankruptcy Code," the Company said in its quarterly report for the
period ended Dec. 31, 2013.
* * *
As reported by the TCR on March 10, 2014, Standard & Poor's
Ratings Services said it lowered its corporate credit rating on
McLean, Va.-based Alion Science and Technology Corp. to 'CC' from
'CCC+'. "The ratings downgrade reflects a capital structure that
matures within 12 months, a currently 'weak' liquidity assessment,
which we revised from 'less than adequate', and our expectation
that we would classify an exchange offer or similar restructuring
undertaken by Alion as distressed," said Standard & Poor's credit
analyst Martha Toll-Reed.
ALPHAMETRIX GROUP: Receiver's Suit Says Brass Bled Company Dry
--------------------------------------------------------------
Law360 reported that a receiver for AlphaMetrix Group LLC filed
suit against five of the company's former executives in Illinois
federal court, accusing them of using the failed financial
technology company as their "personal piggy bank."
According to the report, Deborah L. Thorne, a Barnes & Thornburg
LLP attorney who was appointed to dismantle AMG and a subsidiary,
Alphametrix LLC, is seeking more than $19 million from former
President and CEO Aleks Kins and other members of the company's
top brass, saying they engaged in self-dealing, unauthorized loans
and other bad business practices that pushed it into insolvency.
She claims the money is now owed to the company's creditors and
trading adviser partners.
"Instead of exercising due care, the defendants pursued a reckless
course of dealing which ultimately led to the insolvency of both
entities and the subsequent appointment of a receiver for
AlphaMetrix, AMG and their affiliates," the complaint said, the
report related.
"Furthermore, in clear breach of their duty of loyalty, the
defendants used AMG and/or allowed others to use AMG as their own
personal piggy bank, taking out personal loans from AMG and having
it pay personal expenses at the same time AMG was teetering on the
brink of insolvency," the report further related.
According to the suit, Kins himself borrowed approximately $1.18
million from AMG coffers dating back to March 2012, which he
stopped making payments on in September, the report added. Thorne
also claims he used the company as a "full employment opportunity"
for family members, hiring his father and his law firm as general
counsel and brother as chief business development officer.
The case is Thorne v. Kins et al., Case No. 1:14-cv-02472 (N.D.
Ill.).
AMERICAN MEDICAL: E.D.N.Y. Court Rejects Owner's Suit v. Doyaga
---------------------------------------------------------------
Chief District Judge Carol Bagley Amon dismissed the pro se
complaint, J.W. TONY BROWN-ARKAH, PhD. MPA, Plaintiff, v. DAVID J.
DOYAGA, SR., U.S. Trustee; SHUROD BROWN, Purported Stock Holder,
Defendants, No. 14-CV-2717 (CBA) (MDG) (E.D.N.Y. May 1, 2014),
citing the plaintiff's failure to obtain leave of the Bankruptcy
Court for the Eastern District of New York.
The Plaintiff, an owner of a medical clinic on Brooklyn, alleges
that on April 28, 2011, he filed a "voluntary Petition for Chapter
11 Bankruptcy" and that David J. Doyaga was eventually appointed a
Chapter 11 trustee. The Plaintiff alleges various improprieties
by Doyaga and Shurod Brown, an officer of the New York City Police
Department with whom Doyaga allegedly conspired to "takeover" the
clinic. The Plaintiff seeks to force Doyaga to "immediately turn
over the key to the clinic premises at 434 Rockaway Avenue,
Brooklyn New York . . ." The bankruptcy proceeding is currently
pending. In re Am. Med. Utilization Mgmt. Corp., No. 11-43573
(Bankr. E.D.N.Y., filed Apr. 28, 2011).
The District Court also denied the Plaintiff's request for an
order to show cause for a preliminary injunction and temporary
restraining order.
A copy of the District Court's May 5 ruling is available at
http://is.gd/4PyjFf
American Medical Utilization Management Corporation, a healthcare
provider, filed for Chapter 11 (Bankr. E.D.N.Y. Case No. 11-43573)
on April 28, 2011. This was the Debtor's third bankruptcy filing.
The Debtor's first chapter 11 petition was filed on January 24,
2007 and was dismissed on March 29, 2007 on the motion of the
chapter 11 trustee appointed in that case. (Case No. 07-40358-CEC)
The Debtor's second chapter 11 petition was filed on August 27,
2008, and was dismissed on October 7, 2008 upon the United States
Trustee's motion. (Case No. 08-45619-CEC)
On July 8, 2011, Adrian George, John Davis, and Shurod Brown,
creditors or holders of equity interests in the Debtor, filed a
joint motion for the appointment of a chapter 11 trustee. On July
22, 2011, the United States Trustee filed a motion to dismiss the
case with prejudice for two years. The Debtor did not oppose
either motion. On October 18, 2011, the Trustee was appointed.
By order dated April 20, 2012, the Trustee was authorized to
retain Doyaga & Shaefer as counsel. The Trustee later retained The
Law Office of Avrum J. Rosen, PLLC as counsel, which was approved
on June 13, 2012.
AMERIGO ENERGY: Delays Form 10-K for 2013
-----------------------------------------
Amerigo Energy, Inc., filed with the U.S. Securities and Exchange
Commission a Notification of Late Filing on Form 12b-25 with
respect to its annual report on Form 10-K for the year ended
Dec. 31, 2013. The Company said it is in the process of preparing
and reviewing its financial information.
"The process of compiling and disseminating the information
required to be included in the Form 10-K for the relevant fiscal
year, as well as the completion of the required review of the
Company's financial information, could not be completed without
incurring undue hardship and expense," the Company said.
The Company undertakes the responsibility to file the Annual
Report no later than 15 days after its original date.
About Amerigo
Henderson, Nevada-based Amerigo Energy, Inc., is aggressively
looking for potential oil leases to acquire as well as businesses
which will fit with the Company's strategy. Its wholly-owned
subsidiary, Amerigo, Inc., incorporated in Nevada on Jan. 11,
2008, holds minimal assets, including oil lease interests.
The Company's balance sheet at Sept. 30, 2013, showed $2.36
million in total assets, $2.86 million in total liabilities and a
$499,798 total stockholders' deficit.
"The Company has incurred cumulative net losses of approximately
$16,431,661 since its inception and requires capital for its
contemplated operational and marketing activities to take place.
The Company's ability to raise additional capital through the
future issuances of the common stock is unknown. The obtainment
of additional financing, the successful development of the
Company's contemplated plan of operations, and its transition,
ultimately, to the attainment of profitable operations are
necessary for the Company to continue operations. The ability to
successfully resolve these factors raise substantial doubt about
the Company's ability to continue as a going concern," the Company
said in its quarterly report for the period ended Sept. 30, 2013.
AMINCOR INC: Delays Form 10-K for 2013
--------------------------------------
Amincor, Inc., disclosed in a Form 12b-25 filed with the U.S.
Securities and Exchange Commission that it was unable to file its
annual report on Form 10-K for the fiscal year ended Dec. 31,
2013, within the prescribed time without unreasonable effort or
expense because the Company and its accounting staff require
additional time to complete the financial statements and the notes
thereto.
About Amincor Inc.
New York, N.Y.-based Amincor, Inc., is a holding company
operating through its operating subsidiaries Baker's Pride, Inc.,
Environmental Holdings Corp. and Tyree Holdings Corp., and Amincor
Other Assets, Inc.
BPI is a producer of bakery goods. Tyree performs maintenance,
repair and construction services to customers with underground
petroleum storage tanks and petroleum product dispensing
equipment.
Through its wholly owned subsidiaries, Environmental Quality
Services, Inc., and Advanced Waste & Water Technology, Inc., EHC
provides environmental and hazardous waste testing and water
remediation services in the Northeastern United States.
Other Assets, Inc., was incorporated to hold real estate,
equipment and loan receivables. As of March 31, 2013, all of
Other Assets' real estate and equipment are classified as held for
sale.
As reported in the TCR on April 24, 2013, Rosen Seymour Shapss
Martin & Company, in New York, expressed substantial doubt about
Amincor's ability to continue as a going concern, citing the
Company's recurring net losses from operations and working capital
deficit of $21.2 million as of Dec. 31, 2012.
The Company's balance sheet at Sept. 30, 2013, showed $31.93
million in total assets, $36.48 million in total liabilities and a
$4.55 million total deficit.
ANCHOR GLASS: Moody's Assigns 'B2' CFR & Rates $335MM Debt 'B3'
---------------------------------------------------------------
Moody's Investors Service assigned a B2 corporate family rating, a
B3-PD and stable outlook to Anchor Glass Container Corporation.
Moody's also assigned a B3 rating to the $335 million first lien
senior secured term loan due 2022. The proceeds will be used to
finance the acquisition of Anchor Glass by KPS Capital Partners,
LP ("KPS").
On April 14, 2014, KPS announced that, through a newly formed
affiliate, it had entered into definitive agreements to acquire
Anchor Glass from Ardagh Holdings USA Inc. The transaction is
expected to close in the second or third quarter of 2014 and is
subject to customary closing conditions and regulatory approvals.
The deal consists of Anchor Glass raising $435 million of new
senior secured credit facilities along with $138.5 million in
common equity contribution which will be used to facilitate the
transaction, to provide operational liquidity and to pay for
associated transaction fees and expenses.
Anchor Glass Container Corporation:
Assigned B2 corporate family rating
Assigned probability of default rating, B3-PD
Assigned $335 million senior secured term loan due May 2022, B3
LGD --3 (43%)
The ratings outlook is stable.
The ratings are subject to the receipt and review of the final
documentation.
Ratings Rationale
The B2 Corporate Family Rating reflects the high concentration of
sales, mature nature of the industry in the US and negative volume
trends. Approximately 41% of the company's sales stem from two
customers, 79% from the top ten customers and approximately 51%
from beer. The majority of the company's revenue is generated in
the mature US market with no exposure to faster growing and more
profitable emerging markets. Volumes have decreased for the last
two years and the company has a substantial portion of business up
for renewal over the next 12 months. The rating is also
constrained by the company's relatively small size compared to its
rated competitors and margins and pro forma free cash flow to debt
that are below its primary rated competitor.
Strengths in the company's profile include a high percentage of
business under long-term contracts with full cost-pass through
provisions, long standing relationships with its top customers and
several blue-chip customers. Anchor has 98% of business under
long-term contract with cost pass-through provisions. The company
has an average relationship of 20 years with its top customers and
has successfully renewed 95% of its contracts over the past 5
years. The company expects the transfer of profitable business
from its former owner to be complete in Q4 2014 and has identified
some new business opportunities in certain segments. The US glass
packaging industry is consolidated in the US with only three major
players.
Headquartered in Tampa, Florida, Anchor Glass Container
Corporation is a North American manufacturer of premium glass
packaging products, serving the beer, liquor, food, beverage,
ready-to-drink ("RTD") and consumer end-markets. The company
operates six manufacturing facilities located in Florida, Georgia,
Indiana, Michigan, New York and Oklahoma, in addition to an
engineering and spare parts facility in Illinois and a mold
manufacturing facility in Ohio. For the 12 months ended December
31 2013, Anchor generated approximately $556 million in revenue.
Following the close of the transaction, Anchor will be a portfolio
company of KPS Capital Partners.
ARISTA POWER: Incurs $3.3 Million Net Loss in 2013
--------------------------------------------------
Arista Power, Inc., filed with the U.S. Securities and Exchange
Commission its annual report on Form 10-K disclosing a net loss of
$3.27 million on $2.19 million of sales for the year ended
Dec. 31, 2013, as compared with a net loss of $3.48 million on
$1.99 million of sales for the year ended Dec. 31, 2012.
As of Dec. 31, 2013, the Company had $2.37 million in total
assets, $4.04 million in total liabilities and a $1.66 million
total stockholders' deficit.
EFP Rotenberg, LLP, in Rochester, New York, issued a "going
concern" qualification on the consolidated financial statements
for the year ended Dec. 31, 2013. The independent auditors noted
that the Company's recurring losses have resulted in an
accumulated deficit and ongoing operation is dependent upon
improved results from operation and additional financing. These
conditions raise substantial doubt about its ability to continue
as a going concern.
Bankruptcy Warning
"We may also seek additional financing to accelerate our growth.
If we raise additional funds through the issuance of equity or
convertible debt securities, the percentage ownership of the
Company held by existing shareholders will be reduced and our
shareholders may experience significant dilution. In addition,
new securities may contain rights, preferences or privileges that
are senior to those of our common stock. If we raise additional
capital by incurring debt, this will result in increased interest
expense. There can be no assurance that acceptable financing
necessary to further implement our plan of operation can be
obtained on suitable terms, if at all. Our ability to develop our
business could suffer if we are unable to raise additional funds
on acceptable terms, which would have the effect of limiting our
ability to increase our revenues, develop our products, attain
profitable operations, or even may result in our business filing
for bankruptcy protection or otherwise ending our operations which
could result in a significant or complete loss of your
investment," the Company said in the Annual Report.
A copy of the Form 10-K is available for free at:
http://is.gd/4zvQpX
On March 31, 2014, Arista Power sold, pursuant to a Securities
Purchase Agreement, an aggregate of 1,500 shares of Arista Power's
Series A Convertible Preferred Stock, with a stated value of
$1,500,000 that are convertible into shares of the Company's
common stock at a conversion price of $0.20 in stated value per
share (7,500,000 shares of common stock), and five-year warrants,
which vested in full upon issuance, to purchase up to 11,250,000
additional shares of common stock at a purchase price of $0.25 per
share to 8 institutional investors. Arista Power received a total
of $1,405,000 in net proceeds from the sale. Each share of
Preferred Stock is entitled to cash interest payments of 9 percent
of the stated value per year, payable quarterly. The Preferred
Stock is voluntarily and mandatorily convertible into shares of
Common Stock pursuant to the provisions of the SPA, with any
shares of Preferred Stock outstanding on March 31, 2017
automatically converting into Common Stock. The Investors
received rights of first refusal and rights of participation in
future financings of the Company until March 31, 2015. In
addition, the Investors received most favored nation protections
on the terms and conditions of the Warrants and Preferred Stock so
long as such securities remain outstanding. Additionally, until
Sept. 30, 2015, each Investor has the right to invest the amount
invested by such Investor in the above-referenced transaction in
preferred stock of Arista Power on substantially similar terms.
On March 31, 2014, the Company and certain individuals and
entities who purchased from the Company shares of common stock of
the Company and warrants to purchase common stock in a private
placement in July and August 2013 amended the applicable
Securities Purchase Agreement and Warrant Agreement pursuant to an
Amendment, Waiver and Consent. The Amendment reduced the anti-
dilution protections of the Prior Investors with respect to the
right to invest the amount invested by each Prior Investor in the
above-referenced transaction in another investment in Arista Power
on substantially similar terms.
On March 31, 2014, as a result of the issuance of Preferred Stock
and Warrants to the Investors, the Prior Investors were entitled
to certain anti-dilution protections pursuant to the applicable
Securities Purchase Agreements and Warrant Agreements between the
Company and each Prior Investor. Those anti-dilution protections
consisted of: (1) an aggregate of 1,255,000 shares of Common Stock
were issued by the Company to the Prior Investors; (2) warrants
that previously were exercisable for 2,510,000 shares of Common
Stock became exercisable for 3,012,000 shares of Common Stock; and
(3) the exercise price on those warrants exercisable for 3,012,000
shares of Common Stock was reduced from $0.30 per share to $0.25
per share.
On March 31, 2014, the Company and each of its officers and
members of its Board of Directors entered into a Lockup Agreement
pursuant to which the applicable officer or director agreed to
refrain from selling any shares of the Company's common stock or
common stock equivalents until 180 days after the first day the
occurrence of all of the conditions that would permit the Company
to exercise its right to give the Investors a Mandatory Conversion
Notice as defined in Section 8(b) of the Certificate of
Designation included in the Certificate of Amendment.
COO Appointment
Effective March 31, 2014, the Board of Directors of Arista Power
appointed Adeeb Saba as chief operating officer of Arista Power.
Mr. Saba, age 47, will report to Arista Power's Chief Executive
Officer, William A. Schmitz.
Prior to being named chief operating officer, Mr. Saba had
previously been Arista Power's vice president of operations since
December 2009. Prior to joining Arista Power, Mr. Saba was Vice
President of Manufacturing at Ultralife Corporation (formerly
known as Ultralife Batteries, Inc.), where he was responsible for
all rechargeable, non-rechargeable and communications systems
operations. Mr. Saba joined Ultralife in 2000 and, in addition to
Vice President of Manufacturing has served as vice president of
engineering - Government of Defense Group, and Director of
Technology. Before this, Mr. Saba served for Titmus Corporation
from 1997 to 2000 as an Engineering Manager for New Product
Development and for the Development Group, and for Bausch & Lomb
from 1991 to 1996 where he participated in the commercialization
of dozens of new models of Ray-Ban sunglasses. Mr. Saba holds a
B.S. in Manufacturing Engineering Technology from Rochester
Institute of Technology.
Mr. Saba is an at-will employee of Arista Power with an annual
base salary of $185,000, an increase from $120,000. In July 2013,
Mr. Saba voluntarily reduced his annual salary on a temporary
basis from $185,000 to $120,000. Mr. Saba is entitled to cash
bonuses of $25,000 for each Power on Demand system or micro-grid
system commissioned by the Company before April 1, 2015; provided,
however, that each such bonus shall not exceed 50 percent of the
net profit (before payment of such bonus) for such system without
the approval of the Compensation Committee of the Board of the
Company.
On March 27, 2014, the Company amended its Certificate of
Incorporation pursuant to a Certificate of Amendment of the
Certificate of Incorporation of Arista Power, Inc. The
Certificate of Amendment effectuated the creation of the Preferred
Stock.
A complete copy of the Form 8-K is available for free at:
http://is.gd/rMPkjW
About Arista Power
Rochester, N.Y.-based Arista Power, Inc., is a developer,
manufacturer, and supplier of custom-designed power management
systems, renewable energy storage systems, and a supplier and
designer of solar energy systems.
ART APPLIED: Ex-Employee's ERISA Claims Rejected
------------------------------------------------
Senior District Judge Charles R. Butler, Jr., rejected Melisa
Courtney's ERISA claims for breach of fiduciary duty against Kelly
O'Brien, Vickie Kennedy and Josh Patrick. The Court granted Kelly
O'Brien et al.'s Motion for Summary Judgment against Ms.
Courtney's Claims.
Ms. Courtney was a former employee of ART Applied Reimbursement
Techniques, Inc. She sued the Company and certain of its officers
after she was denied medical coverage by Blue Cross.
The summary judgment motion does not pertain to Ms. Courtney's
claims against ART Applied Reimbursement Techniques, Inc. and
Ralph Patrick, both of whom have filed bankruptcy petitions.
The case is, MELISA COURTNEY, Plaintiff, v. ART APPLIED
REIMBURSEMENT TECHNIQUES, INC., RALPH PATRICK, KELLY O'BRIEN,
VICKIE KENNEDY and JOSH PATRICK, Defendants, Civil Action No. 12-
00311-CB-B (S.D. Ala.). A copy of the Court's May 5, 2014 Opinion
and Order is available at http://is.gd/rklvFGfrom Leagle.com.
Mobile, Alabama-based ART Applied Reimbursement Techniques, Inc.,
dba Applied Reimbursement Techniques and fka Applied Reimbursement
Technologies, Inc., filed for Chapter 11 bankruptcy (Bankr. S.D.
Ala. Case No. 12-02036) on June 12, 2012. Irvin Grodsky, Esq., at
Irvin Grodsky, P.C., served as ART's counsel. In its petition,
ART estimated $100,001 to $500,000 in assets and $1 million to $10
million in debts. A list of its 20 largest unsecured creditors
filed together with the petition is available for free at
http://bankrupt.com/misc/alsb12-02036.pdf The petition was signed
by Ralph E. Patrick, president/CEO.
ART's Chapter 11 bankruptcy petition was dismissed on Jan. 16,
2014. ART subsequently filed a Chapter 7 bankruptcy petition.
ASSURED PHARMACY: BDO USA LLP Raises Going Concern Doubt
--------------------------------------------------------
Assured Pharmacy, Inc., filed with the U.S. Securities and
Exchange Commission on Apr. 25, 2014, an amendment No. 2 to its
annual report on Form 10-K for the year ended Dec. 31, 2013.
BDO USA, LLP, expressed substantial doubt about the Company's
ability to continue as a going concern, citing that the Company
has suffered recurring losses from operations and has a net
capital deficiency.
The Company reported a net loss of $3.36 million on $5.19 million
of sales in 2013, compared with a net loss of $4 million on $5.64
million of sales in 2012.
The Company's balance sheet at Dec. 31, 2013, showed $1.05 million
in total assets, $9 million in total liabilities, redeemable
convertible preferred stock of $2.51 million and a stockholders'
deficit of $10.47 million.
A copy of the Form 10-K/A is available at:
http://is.gd/6yO8Vu
About Assured Pharmacy
Headquartered in Frisco, Texas, Assured Pharmacy, Inc., is engaged
in the business of establishing and operating pharmacies that
specialize in dispensing highly regulated pain medication for
chronic pain management.
The Company was organized as a Nevada corporation on Oct. 22,
1999, under the name Surforama.com, Inc., and previously operated
under the name eRXSYS, Inc. The Company changed its name to
Assured Pharmacy, Inc., in October 2005.
ATLANTIC COAST: Albury Investment Reports 8.5% Equity Stake
-----------------------------------------------------------
In an amended Schedule 13D filed with the U.S. Securities and
Exchange Commission, The Albury Investment Partnership, The Albury
Investment Trust, Rose Capital Pty Limited as trustee, and Seumas
Dawes disclosed that as of Dec. 3, 2013, they beneficially owned
1,328,666 shares of common stock of Atlantic Coast Financial
Corporation representing 8.57 percent of the shares outstanding.
A copy of the regulatory filing is available for free at:
http://is.gd/cRdDH7
About Atlantic Coast
Jacksonville, Florida-based Atlantic Coast Financial Corporation
is the holding company for Atlantic Coast Bank, a federally
chartered and insured stock savings bank. It is a community-
oriented financial institution serving northeastern Florida and
southeastern Georgia markets through 12 locations, with a focus on
the Jacksonville metropolitan area.
Atlantic Coast reported a net loss of $11.40 million on $28.83
million of total interest and dividend income for the year ended
Dec. 31, 2013, as compared with a net loss of $6.66 million on
$33.50 million of total interest and dividend income for the year
ended Dec. 31, 2012. The Company incurred a net loss of $10.28
million in 2011.
The Company's balance sheet at March 31, 2014, showed $708.75
million in total assets, $640.55 million in total liabiities and
$68.20 million in total stockholders' equity.
BOARDWALK & BASEBALL: Training Facility Sets Auction
----------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Boardwalk & Baseball Inc. and two affiliates, the
owners of a 238-acre tract in a development known as Victor Posner
City Center near Davenport, Florida, reached a settlement with
bondholders providing for an auction on Aug. 12 and eventual
implementation of a Chapter 11 plan.
According to the report, the Chapter 11 filing in Tampa, Florida,
in January halted a foreclosure. Originally, the property was the
spring training home for the Kansas City Royals professional
baseball club. It also housed the Boardwalk & Baseball theme park.
The property is part of the City Center Development District that
makes assessments on property owners to pay for improvements, the
report related. The company acknowledged it owed the district $27
million. The district was claiming an additional $18.2 million
in penalties.
Before bankruptcy, the district was foreclosing, because the
assessments have the status of tax liens, the report further
related.
The settlement calls for the district, on behalf of bondholders,
to make the first bid of $25 million at auction, using debt rather
than cash for the purchase price, the report added. The district
filed a secured claim for $50 million.
The case is In re Boardwalk & Baseball Inc., 14-bk-00317, U.S.
Bankruptcy Court, Middle District of Florida (Tampa).
BROADVIEW NETWORKS: Incurs $8.5 Million Net Loss in 2013
--------------------------------------------------------
Broadview Networks Holdings, Inc., filed with the U.S. Securities
and Exchange Commission its annual report on Form 10-K disclosing
a net loss of $8.48 million on $315.36 million of revenues for the
year ended Dec. 31, 2013, as compared with a net loss of $35.27
million on $340.90 million of revenue during the prior year.
As of Dec. 31, 2013, the Company had $209.22 million in total
assets, $201.01 million in total liabilities and $8.21 million in
total liabilities.
Ernst & Young LLP, in New York, NY, did not issue a "going
concern" qualification on the consolidated financial statements
for the year ended Dec. 31, 2013. Ernst & Young previously
expressed substantial doubt about the Company's ability to
continue as a going concern in their report on the consolidated
financial statements for the year ended Dec. 31, 2011. The
independent auditors noted that that the Company has in excess of
$300 million of debt due on or before September 2012. "In
addition, the Company has incurred net losses and has a net
stockholders' deficiency."
A copy of the Form 10-K is available for free at:
http://is.gd/hs3yfA
About Broadview Networks
Rye Brook, N.Y.-based Broadview Networks Holdings, Inc., is a
communications and IT solutions provider to small and medium sized
business ("SMB") and large business, or enterprise, customers
nationwide, with a historical focus on markets across 10 states
throughout the Northeast and Mid-Atlantic United States, including
the major metropolitan markets of New York, Boston, Philadelphia,
Baltimore and Washington, D.C.
* * *
In the July 23, 2012, edition of the Troubled Company Reporter,
Moody's Investors Service downgraded Broadview Networks Holdings,
Inc. Corporate Family Rating (CFR) to Caa3 from Caa2 and the
Probability of Default Rating (PDR) to Ca from Caa3 in response to
the company's announcement that it has entered into a
restructuring support agreement with holders of roughly 70% of its
preferred stock and roughly 66-2/3% of its Senior Secured Notes.
The company is expected to file a pre-packaged Chapter 11 Plan of
Reorganization or complete an out of court exchange offer.
As reported by the TCR on July 25, 2012, Standard & Poor's Ratings
Services lowered its corporate credit rating on Broadview to 'D'
from 'CC'. "This action follows the company's announced extension
on its revolving credit facility. We expect to lower the issue-
level rating on the notes to 'D' once the company files for
bankruptcy, or if it misses the Sept. 1, 2012 maturity payment on
the notes," S&P said.
BROOKLYN HOLDINGS: U.S. Trustee Appoints 5-Member Committee
-----------------------------------------------------------
Roberta A. DeAngelis, U.S. Trustee for Region 3, notified the U.S.
Bankruptcy Court for the District of Delaware that she has
appointed five members to the official committee of unsecured
creditors in the Chapter 11 cases of Brooklyn Holdings Corp., et
al.
The Committee members are:
(1) Pilot Air Freight Corp.
Attn: Patrick Campbell
314 N. Middletown Road
Lima, PA 19037
Phone: 610-548-7100
(2) Tempur Sealy International, Inc.
Attn: Lou H. Jones
1000 Tempur Way
Lexington, KY 40511
Phone: 859-455-2000
Fax: 859-757-1060
(3) Back to Nature Home & Garden
Attn: Chas Fox
P.O. Box 153
Oldwick, NJ 08858
Phone: 908-439-4639
Fax: 908-439-4640
(4) GGP Limited Partnership
Attn: Julie Minnick Bowden
110 N. Wacker Drive
Chicago, IL 60606
Phone: 312-860-2707
Fax: 312-442-6374
(5) Simon Property Group, Inc.
Attn: Ronald M. Tucker, Esquire
225 W. Washington Street
Indianapolis, IN 46204
Phone: 317-263-2346
Fax: 317-263-7901
The proposed counsel for the Creditors' Committee:
Jay Indyke, Esq.
Jeffrey L. Cohen, Esq.
Michael Klein, Esq.
Robert Winning, Esq.
COOLEY LLP
1114 Avenue of the Americas
New York, NY 10036
-- and --
Natasha M. Songonuga, Esq.
GIBBONS P.C.
1000 North West Street, Suite 1200
Wilmington, DE 19899
-- and --
Karen A. Giannelli, Esq.
Mark B. Conlan, Esq.
GIBBONS P.C.
One Gateway Center
Newark, NJ 07102-5310
Capstone Advisory Group, LLC, together with its wholly-owned
subsidiary Capstone Valuation Services, LLC, serve as financial
advisors to the Committee.
About Brookstone Holdings
Brookstone Holdings Corp. and its affiliated debtors on April 3,
2014, filed for relief under Chapter 11 (Bankr. D. Del. Lead Case
No. 14-10752) with a plan to sell its business to another
retailer.
Specialty retailer Brookstone operated 242 retail stores across 40
states and Puerto Rico as of Feb. 1, 2014. Of those stores, 195
are generally located near "center court" in America's top
retail centers and 47 are located in airports. Brookstone
also operates an e-commerce business that includes the Brookstone
catalog and http://www.Brookstone.com/
An affiliate of Spencer Spirit Holdings Inc., the parent of gift-
shop chain Spencer's, has signed a deal to pay $147 million in
exchange for 100% of the reorganized debtor's equity, absent
higher and better offers from other parties. As of Dec. 31, 2013,
Spencer operated 644 stores in 49 states and Canada.
As of the bankruptcy filing, the Debtors owe more than $50 million
on a senior secured prepetition credit facility ($34.1 million on
a revolver, $12.3 million on a term loan and $4.7 million on
account of letters of credit), and $137.3 million to holders of
junior notes. The Debtors estimate that their unsecured debt is
between $75 million and $85 million.
The agreement with Spencer contemplates that Brookstone,
headquartered in New Hampshire, will continue to operate its mall
and airport stores, catalog, website, and wholesale channels,
under the Brookstone brand with current employees remaining at
their respective locations.
The Debtors have tapped K&L Gates LLP and Landis Rath & Cobb LLP
as attorneys, Deloitte Financial Advisory Services LLP as their
financial advisors, Jefferies LLC as their investment banker, and
Kurtzman Carson Consultants as claims agent.
The DIP lenders are represented by Stroock & Stroock & Lavan LLP
and Young Conaway Stargatt & Taylor LLP.
BROOKSTONE HOLDINGS: Bondholders Revealed In Court Docs
-------------------------------------------------------
Law360 reported that the bondholder group driving Brookstone
Holdings Corp.'s Chapter 11 restructuring is composed primarily of
investment companies, including private equity firms and hedge
funds, according to a statement filed in Delaware bankruptcy
court.
According to a verified statement, the ad hoc committee of second-
lien noteholders own over $101 million of Brookstone's $250
million in total debts, the report related. The 13 percent
second-lien notes are due to mature in October, according to court
documents.
The company's largest second-lien noteholder, Los Angeles-based
investment management firm Canyon Partners Inc., holds $25.6
million of Brookstone notes, the report further related, citing
court documents. Other top noteholders include New York-based VR
Capital Group, Jersey City, N.J.-based Lord Abbet & Co. LLC, and
KKR Asset Management, a publicly traded private equity firm.
Many of Brookstone's bondholders have already pledged their
support for a $146 million deal to sell the store to New Jersey-
based novelty retailer Spencer Spirit Holdings Inc., the report
noted. They have also agreed to support the company's
restructuring with a $96.3 million debtor-in-possession financing
package.
About Brookstone Holdings
Brookstone Holdings Corp. and its affiliated debtors on April 3,
2013, filed for relief under Chapter 11 (Bankr. D. Del. Lead Case
No. 14-10752) with a plan to sell its business to another
retailer.
Specialty retailer Brookstone operated 242 retail stores across 40
states and Puerto Rico as of Feb. 1, 2014. Of those stores, 195
are generally located near "center court" in America's top
retail centers and 47 are located in airports. Brookstone
also operates an e-commerce business that includes the Brookstone
catalog and http://www.Brookstone.com/
An affiliate of Spencer Spirit Holdings Inc., the parent of gift-
shop chain Spencer's, has signed a deal to pay $147 million in
exchange for 100% of the reorganized debtor's equity, absent
higher and better offers from other parties. As of Dec. 31, 2013,
Spencer operated 644 stores in 49 states and Canada.
As of the bankruptcy filing, the Debtors owe more than $50 million
on a senior secured prepetition credit facility ($34.1 million on
a revolver, $12.3 million on a term loan and $4.7 million on
account of letters of credit), and $137.3 million to holders of
junior notes. The Debtors estimate that their unsecured debt is
between $75 million and $85 million.
The agreement with Spencer contemplates that Brookstone,
headquartered in New Hampshire, will continue to operate its mall
and airport stores, catalog, website, and wholesale channels,
under the Brookstone brand with current employees remaining at
their respective locations.
The Debtors have tapped K&L Gates LLP and Landis Rath & Cobb LLP
as attorneys, Deloitte Financial Advisory Services LLP as their
financial advisors, Jefferies LLC as their investment banker, and
Kurtzman Carson Consultants as claims agent.
The DIP lenders are represented by Stroock & Stroock & Lavan LLP
and Young Conaway Stargatt & Taylor LLP.
CAESARS ENTERTAINMENT: Has Tender Offers for Debt Securities
------------------------------------------------------------
Caesars Entertainment Corporation's wholly-owned subsidiary,
Caesars Entertainment Operating Company, Inc., has launched cash
tender offers to purchase any and all of the outstanding
$791,767,000 aggregate principal amount of its 5.625 percent
Senior Notes due 2015 and any and all of the outstanding
$214,800,000 aggregate principal amount of its 10.00 percent
Second-Priority Senior Secured Notes due 2015.
The Notes and other information related to the tender offers are
set forth in the table below.
CUSIP NOs. 413627AU4
413627AT7
413627BN9
U24658AF0
U24658AH6
Principal Amount $791,767,000
Outstanding
Security 5.625% Senior Notes
due 2015
to be Purchased
Tender Offer $1,018.75
Consideration
Early Tender $30.00
Payment
Total $1,048.75
Consideration
CUSIP NOs. 413627BA7
413627BB5
U24658AL7
Principal Amount $214,800,000
Outstanding (1)
Security
due 2015
to be Purchased 10.00% Second-Priority
Senior Secured Notes
due 2015
Tender Offer $992.50
Consideration (2)
Early Tender $30.00
Payment (3)
Total $1,022.50
Consideration
Each holder who validly tenders (and does not validly withdraw)
its Notes prior to 5:00 p.m., New York City time, on May 19, 2014,
unless such time is extended by the Issuer will receive, if those
Notes are accepted for purchase pursuant to the applicable tender
offer, the total consideration for those Notes listed in the table
above under "Total Consideration," which includes the tender offer
consideration for those Notes and the early tender payment for
such Notes. In addition, accrued interest up to, but not
including, the payment date of the Notes will be paid in cash on
all validly tendered and accepted Notes.
Each of the tender offers is scheduled to expire at midnight, New
York City time, at the end of June 3, 2014, unless any of them is
extended or earlier terminated by the Issuer. Each Holder who
validly tenders (and does not validly withdraw) its Notes after
the Early Tender Time but on or prior to the Expiration Time will
receive, if those Notes are accepted for purchase pursuant to the
applicable tender offer, the tender offer consideration for those
Notes listed in the table above under "Tender Offer
Consideration," plus any accrued and unpaid interest on those
Notes up to, but not including, the payment date.
Tendered Notes may be withdrawn at any time prior to 5:00 p.m.,
New York City time, on May 19, 2014, but not thereafter, except to
the extent that the Issuer is required by law to provide
additional withdrawal rights. Holders who validly tender their
Notes after the Early Tender Time will receive only the tender
offer consideration for those Notes and will not be entitled to
receive an early tender payment for those Notes if those Notes are
accepted for purchase pursuant to the applicable tender offer.
Subject to the terms and conditions, payment of the total
consideration or tender offer consideration, as applicable, will
occur promptly after the Expiration Time for the applicable tender
offer. The Issuer expects that such payment of the total
consideration or the tender offer consideration, as applicable,
will be made on or about June 4, 2014, unless the Expiration Time
is extended by the Issuer in its sole discretion.
Concurrently with the commencement of the tender offers, the
Issuer is seeking to raise $1,750 million in aggregate principal
amount of new incremental term loans under its Second Amended and
Restated Credit Agreement dated as of March 1, 2012. The Issuer
intends to use the net cash proceeds of the Incremental Loans to
refinance or retire existing debt, including the Notes, and to
provide additional liquidity. A portion of the net cash proceeds
of the Incremental Loans will be used to purchase the Notes
validly tendered and not validly withdrawn pursuant to the tender
offers and accepted for payment on the Payment Date. The tender
offers are conditioned, among other conditions, upon the Issuer
receiving, on or prior to the Expiration Time, a sufficient amount
of net cash proceeds from the issuance of the Incremental Loans to
refinance all of its existing indebtedness that matures in 2015,
including, without limitation, the Notes. The Issuer will not be
required to accept for purchase any Notes validly tendered and not
validly withdrawn or pay the total consideration or the tender
offer consideration, as applicable, if it does not satisfy the
Financing Condition.
In connection with the tender offers, on May 5, 2014, the Issuer
entered into note purchase agreements with a significant third-
party holder and a subsidiary of Caesars Growth Partners, LLC, to
purchase from the Selling Holders approximately $746.4 million in
aggregate principal amount (representing approximately 94.3%) of
the 5.625% Notes for a purchase price of $1,048.75 per $1,000
principal amount and approximately $108.7 million in aggregate
principal amount (representing approximately 50.6%) of the 10.00%
Notes for a purchase price of $1,022.50 per $1,000 principal
amount, in each case, plus accrued and unpaid interest to, but not
including, the closing date. The closing of the Note Purchases is
also subject to, among other things, the satisfaction of the
Financing Condition. In addition, in respect of the purchase of
Notes held by a subsidiary of Caesars Growth Partners, LLC,
Caesars Growth Partners, LLC has agreed to reinvest all of the
proceeds received from such purchase in the Incremental Loans.
Citigroup Global Markets Inc. will act as Dealer Manager for the
tender offers for the Notes. Questions regarding the tender offers
may be directed to Citigroup Global Markets Inc. at (800) 558-3745
(toll-free) or (212) 723-6106 (collect).
Global Bondholder Services Corporation will act as the Information
Agent for the tender offers. Requests for the Offer Documents may
be directed to Global Bondholder Services Corporation at (212)
430-3774 (for brokers and banks) or (866) 470-4500 (for all
others).
Financing Plan
Caesars Entertainment announced a series of steps designed to
position its subsidiary, Caesars Entertainment Operating Co., for
a stock listing and significant deleveraging.
The actions include:
* a new $1.75 billion first lien debt offering by CEOC, the
proceeds of which will be used to redeem all of CEOC's
existing 2015 maturities and repay existing bank debt;
* the sale by Caesars Entertainment of 5 percent of CEOC's
equity to institutional investors, in connection with which
Caesars Entertainment has agreed that CEOC will pursue a
listing of those shares in the future;
* the closing of the previously announced sale of three CEOC-
owned Las Vegas properties to Caesars Growth Partners;
* the launch of an amendment of CEOC's credit facility;
* expansion of CEOC's board of directors, with the intention of
adding two new independent directors following regulatory
approval.
"The actions we are taking today, combined with previous capital
structure improvements and our investments to expand and upgrade
our network as well as our ongoing focus on operational
efficiency, lay the foundation for both significant deleveraging
and value creation at CEOC," said Gary Loveman, Chairman and CEO
of Caesars Entertainment. "Our past actions have created
substantial value in two stable structures, Caesars Entertainment
Resort Properties ("CERP") and Caesars Growth Partners, with
standalone equity market capitalizations of $2.6 billion at
Caesars Entertainment and $1.8 billion at Caesars Acquisition
Company, the managing member and 42 percent economic owner of
Caesars Growth Partners, implying over $4 billion of equity value
at Caesars Growth Partners. With the completion of CEOC's sale of
Bally's Las Vegas, The Cromwell and The Quad Resort & Casino and
the anticipated closing of the sale of Harrah's New Orleans to
Caesars Growth Partners, CEOC will have more than $3 billion
in cash and will have sold its most capital-intensive and longer-
term payout projects to Caesars Growth Partners. The transaction
is designed to ensure continued access for CEOC and each of the
properties being sold to the Total Rewards network and other
Caesars resources."
Loveman continued, "When completed, today's actions will remove
all of CEOC's 2015 maturities so that CEOC will have no
significant maturities until 2016, and we intend to now turn our
attention to extending the 2016 and 2017 maturities. Upon
completion of the credit facility amendment announced today, CEOC
will have added headroom under its maintenance covenant, providing
CEOC with additional stability to execute its business plan.
Finally, if CEOC successfully lists its equity securities, this
independent listing should help facilitate the eventual raising of
equity as well as liability management and debt reduction
initiatives."
First Lien Term Loan
As part of its comprehensive financing plan, CEOC launched a
transaction to raise $1.75 billion of first lien debt. The debt
will be raised as a new term loan B-7 tranche under CEOC's credit
facility. As of the date of this announcement, CEOC has already
received orders for approximately $1.7 billion of the new B-7
tranche from several institutions and will seek additional
commitments this week. As a condition to the proposed financing,
new B-7 lenders have required that the Caesars Entertainment
guarantee of CEOC debt be limited to bank debt holders that
consent to the amendment, plus up to no more than approximately
$2.9 billion of additional indebtedness.
Assuming a $1.75 billion offering, CEOC intends to use the
proceeds from the new first lien term loan and cash on its balance
sheet to repay all of CEOC's 2015 maturities, which consist of
approximately $29 million of term loans due 2015, $215 million of
second lien notes due 2015 and $792 million of unsecured notes due
2015 and to repay $800 million of term loans under CEOC's existing
credit facility. Caesars Growth Partners has committed to use all
of the proceeds from the repayment of the $427 million of
unsecured notes due 2015 that it owns to purchase a portion of the
new term loan B-7 tranche. Pro forma for the proposed
refinancing, CEOC will have no significant debt maturities until
2016. Further, CEOC anticipates having discussions with
representatives of certain holders of its first lien notes to
raise the possibility of increasing the size of the new B-7 term
loan and using a portion of the incremental proceeds to retire
existing first lien notes and additional indebtedness under the
CEOC credit facility.
Credit Facility Amendment
CEOC is also launching a credit facility amendment to provide
covenant relief and additional runway for CEOC. Upon receipt of
amendment consents from lenders representing at least a majority
of CEOC's outstanding credit facility, CEOC's maintenance covenant
level will be modified, among other changes. In addition, CEOC's
credit agreement and other loan documents will be modified to
provide that, after the effectiveness of the amendment, Caesars
Entertainment will provide a guarantee of collection and not of
payment. As requested by CEOC's lenders under the new B-7
tranche, the Caesars Entertainment guarantee will be limited to
consenting bank debt holders, plus up to no more than
approximately $2.9 billion of additional indebtedness. Holders of
approximately $2.1 billion of the credit facility have already
approved the amendment. Lenders that consent to the amendment
will receive a principal paydown and a one-time fee pursuant to
the terms of the amendment. The amendment period will be closed
upon the receipt of consents for a majority of the credit facility
and satisfaction of other customary closing conditions.
Asset Sales
CEOC also announced the closing of the previously announced sale
of Bally's Las Vegas, The Cromwell (formerly Bill's Gamblin' Hall
& Saloon) and The Quad Resort & Casino to Caesars Growth Partners,
following the receipt of approval from the Nevada Gaming
Commission. The sale of Harrah's New Orleans is expected to close
following approval by the Louisiana Gaming Control Board. The
sale is expected to close in the second quarter.
Sale of Certain CEOC Equity
Caesars Entertainment also completed the sale of 5 percent of the
equity in CEOC to institutional investors in a private
transaction. The sale of equity could, once listed, result in a
liquid and tradable equity currency that may facilitate future
capital markets transactions. CEOC may use its equity for
liability management and debt reduction initiatives. The sale of
equity in CEOC resulted in the release of the Caesars
Entertainment guarantee of CEOC's bonds in accordance with the
terms of the bond indentures. Caesars Entertainment may seek to
expand the group of investors with a goal of increasing the number
of holders of CEOC equity in order to help qualify the CEOC equity
for listing on a national securities exchange.
Since the leveraged buyout in 2008, Caesars Entertainment and its
affiliates have executed a series of financial transactions,
operational improvements and investments intended to improve the
Company's financial condition and position it for sustainability
and growth. Those actions have included more than 45 separate
capital markets transactions at CEOC, CERP and Caesars Growth
Partners, resulting in $5 billion of gross debt reduction since
the LBO, and $9 billion of pre-2015 maturity debt extended. The
Company's equity sponsors, Apollo and TPG, have invested
approximately $500 million of additional follow-on equity capital
in Caesars Growth Partners since the LBO in support of the
Company's initiatives. In February 2012, Caesars Entertainment
completed a $16 million IPO. Caesars Entertainment has a market
capitalization of $2.6 billion and substantial trading volume.
The Company believes the transaction could position CEOC to
similarly deleverage and create value.
"Over the course of the last six years, our Company has invested
in the expansion of its network, including the acquisition of
Planet Hollywood, the development of four new properties in Ohio
and Maryland, the launch of an interactive business and the
upgrade of our properties in Las Vegas," Loveman said. "The Las
Vegas projects include the completion of the Octavius and Nobu
towers at Caesars Palace, the LINQ and the High Roller, the
development of The Cromwell and substantial investments at The
Quad, Bally's Las Vegas, Planet Hollywood and Paris.
Concurrently, the Company centralized its operations, increasing
efficiency and reducing expenses. Additionally, in 2013, the
Company initiated a program to improve working capital and excess
cash by $500 million and to generate $500 million of operating and
EBITDA improvements."
CEOC Board Expansion
CEOC plans to expand its board of directors to add two independent
directors following regulatory approval.
Additional information is available for free at:
http://is.gd/zUrnJK
About Caesars Entertainment
Caesars Entertainment Corp., formerly Harrah's Entertainment Inc.
-- http://www.caesars.com/-- is one of the world's largest casino
companies, with annual revenue of $4.2 billion, 20 properties on
three continents, more than 25,000 hotel rooms, two million square
feet of casino space and 50,000 employees. Caesars casino resorts
operate under the Caesars, Bally's, Flamingo, Grand Casinos,
Hilton and Paris brand names. The Company has its corporate
headquarters in Las Vegas.
Harrah's announced its re-branding to Caesar's on mid-November
2010.
The Company incurred a net loss of $1.49 billion on $8.58 billion
of net revenues for the year ended Dec. 31, 2012, as compared with
a net loss of $666.70 million on $8.57 billion of net revenues
during the prior year. The Company's balance sheet at Sept. 30,
2013, showed $26.09 billion in total assets, $27.59 billion in
total liabilities and a $1.49 billion total deficit.
* * *
Caesars Entertainment carries a 'CCC' long-term issuer default
rating, with negative outlook, from Fitch and a 'Caa1' corporate
family rating with negative outlook from Moody's Investors
Service.
As reported in the TCR on Feb. 5, 2013, Moody's Investors Service
lowered the Speculative Grade Liquidity rating of Caesars
Entertainment Corporation to SGL-3 from SGL-2, reflecting
declining revolver availability and Moody's concerns that Caesars'
earnings and cash flow will remain under pressure causing the
company's negative cash flow to worsen.
In the May 7, 2013, edition of the TCR, Standard & Poor's Ratings
Services said that it lowered its corporate credit ratings on Las
Vegas-based Caesars Entertainment Corp. (CEC) and wholly owned
subsidiary Caesars Entertainment Operating Co. (CEOC) to 'CCC+'
from 'B-'.
"The downgrade reflects weaker-than-expected operating performance
in the first quarter, and our view that Caesars' capital structure
may be unsustainable over the next two years based on our EBITDA
forecast for the company," said Standard & Poor's credit analyst
Melissa Long.
CAESARS ENTERTAINMENT: Guarantee Removal Will Spur Rights Fight
---------------------------------------------------------------
Lisa Allen, writing for The Deal, reported that Caesars
Entertainment Corp.'s removal of its guarantee on the bonds issued
by its operating subsidiary will lead holders of them to mobilize
and fight for their rights, according to sources.
According to the report, in an announcement on May 6, the Las
Vegas casino giant said it has removed its guarantee on bonds
issued by the unit, Caesars Entertainment Operating Co. by selling
5% of CEOC's equity to unnamed institutional investors.
Removing the guarantee takes much-needed coverage away from
bondholders at liquidity-strapped CEOC, which is widely believed
to be headed toward a restructuring, the report related.
One holder of CEOC second-lien bonds who asked not to be named
said he hadn't been interested in joining a second-lien bondholder
group in the past, but that now, he would consider it, the report
further related.
"I think everybody's going to challenge this transaction," the
bondholder said, the report added.
About Caesars Entertainment
Caesars Entertainment Corp., formerly Harrah's Entertainment Inc.
-- http://www.caesars.com/-- is one of the world's largest casino
companies, with annual revenue of $4.2 billion, 20 properties on
three continents, more than 25,000 hotel rooms, two million square
feet of casino space and 50,000 employees. Caesars casino resorts
operate under the Caesars, Bally's, Flamingo, Grand Casinos,
Hilton and Paris brand names. The Company has its corporate
headquarters in Las Vegas.
Harrah's announced its re-branding to Caesar's on mid-November
2010.
The Company incurred a net loss of $1.49 billion on $8.58 billion
of net revenues for the year ended Dec. 31, 2012, as compared with
a net loss of $666.70 million on $8.57 billion of net revenues
during the prior year. The Company's balance sheet at Sept. 30,
2013, showed $26.09 billion in total assets, $27.59 billion in
total liabilities and a $1.49 billion total deficit.
* * *
Caesars Entertainment carries a 'CCC' long-term issuer default
rating, with negative outlook, from Fitch and a 'Caa1' corporate
family rating with negative outlook from Moody's Investors
Service.
As reported in the TCR on Feb. 5, 2013, Moody's Investors Service
lowered the Speculative Grade Liquidity rating of Caesars
Entertainment Corporation to SGL-3 from SGL-2, reflecting
declining revolver availability and Moody's concerns that Caesars'
earnings and cash flow will remain under pressure causing the
company's negative cash flow to worsen.
In the May 7, 2013, edition of the TCR, Standard & Poor's Ratings
Services said that it lowered its corporate credit ratings on Las
Vegas-based Caesars Entertainment Corp. (CEC) and wholly owned
subsidiary Caesars Entertainment Operating Co. (CEOC) to 'CCC+'
from 'B-'.
"The downgrade reflects weaker-than-expected operating performance
in the first quarter, and our view that Caesars' capital structure
may be unsustainable over the next two years based on our EBITDA
forecast for the company," said Standard & Poor's credit analyst
Melissa Long.
CAESARS ENTERTAINMENT: Fitch Assigns CCC Rating to $1.75BB Loan
---------------------------------------------------------------
Fitch Ratings assigned a 'CCC/RR2' to $1.75 billion term loan B7
being proposed by Caesars Entertainment Operating Company (CEOC).
Fitch believes that the issuance of the B7 term loan and the other
contemplated transactions announced by Caesars Entertainment Corp
(CEC; Caesars) are negative for most CEOC debt holders.
The transactions benefit CEC's equity in that the parent guarantee
release, if it holds, will allow CEC to restructure debt at CEOC
without significantly diluting CEC shareholders' interest in CEC's
other subsidiaries. The transaction is also favorable for Caesars
Growth Partners (CGP), which will swap nearly $430 million of
unsecured notes in CEOC for first-lien debt albeit with a longer
maturity.
The B7 term loan will mature January 2018 subject to CEOC meeting
certain conditions and will be pari passu with CEOC's existing
first-lien debt with respect to CEOC collateral. The B7 term loan
will benefit from a guarantee from CEC although CEC is seeking to
amend some of the guarantee provisions (discussed below).
COLLATERAL DILUTION FOR FIRST-LIEN
If the transactions are executed as contemplated by Caesars the
first lien debt will be diluted with about $920 million of
incremental first-lien debt. Fitch estimates first-lien leverage
increasing to 11.7x from 10.7x on pro forma basis based on Fitch's
forecasted 2015 EBITDA assuming Harrah's New Orleans is sold.
These ratios assume no debt paydown from CGP asset sale proceeds,
which could potentially reduce first-lien leverage closer to 10x
depending on the level of paydown.
Unlike the term loan holders, the first-lien note holder will not
benefit from the option to consent to the proposed bank amendments
in an exchange for debt paydown ($400 million at par) and a fee.
However, the first-lien holders may have the option to retain the
parent guarantee by swapping their position into the B7 term
loans.
The second-lien notes due 2018 ($5.3 billion outstanding), which
rely on CEC's guarantee for recovery to a larger extent, will also
not benefit from paydown or a fee and further will not have the
option to participate in the B7 loan to retain the parent
guarantee.
Caesars' announcement states CEC will grant the parent guarantee
to the B7 term loan holders and the consenting existing term loan
holders and that CEC may grant the parent guarantee on up to $2.9
billion of additional debt. It is unclear how that $2.9 billion
will be allocated.
The beneficiaries of the proposed transactions are the notes
maturing 2015, which Caesars plans to tender for at a premium to
par (CGP owns a large amount of CEOC's 2015 notes). Also the
improved liquidity at CEOC and now demonstrated template for
dealing with senior unsecured notes held at CGP bodes well for
2016 maturities, which include $960 million of term loans (will
receive at least $400 million of the proposed $800 million
paydown), $479 million of 10.75% post-LBO notes and $573 million
of 6.5% pre-LBO notes ($324 million held at CGP).
B7 AND CONSENT LAUNCH
CEOC launched a $1.75 billion term loan B7 and a consent
solicitation to amend the terms of the existing term loans ($4.4
billion outstanding). At the time of the launch, CEOC had $1.7
billion in commitments for the B7 term loan. Proceeds from the
loan and cash on hand will be used to repay $829 million of
outstanding term loans, $215 million of second-lien notes due 2015
and $792 million of pre-LBO notes due 2015. Of the pre-LBO notes
$427 million is owned by CGP, which will reinvest the tender
proceeds in B7 term loans.
CEOC will seek consents from the existing term loan holders to
amend its 4.75x maintenance covenant; loosen CEOC disclosure
requirements; change the terms of the parent guarantee (will
guarantee 'collection' and not 'payment') and modify other
provisions. Per the announcement, holders of $2.1 billion in term
loans already agreed to the amendment and Caesars indicated that
it will close the amendment period upon the receipt of consents
from the majority of the credit facility. The consenting term
loan holders will receive up to $400 million paydown and a fee and
will retain the parent guarantee.
Under a guarantee of payment CEC as a parent guarantor would
become liable immediately when the guaranteed obligation is not
paid when due. The guarantee of collection is more conditional
and would require lenders to wait for a judgment to confirm the
unfulfilled liability.
FITCH'S VIEW ON GUARANTEE
Caesars is going the route of making CEOC not a wholly-owned
subsidiary via equity sale at CEOC level to release the guarantee
on all major bonds in its capital structure. CEOC's pre-LBO
indentures include a provision that stipulates that the parent
guarantee is released if CEOC is no longer wholly-owned by CEC.
The post-LBO bonds, which now comprise the bulk of CEOC's debt,
include this provision but adjoin it with the word 'and' to two
other more onerous provisions, which have not been met. The two
provisions include defeasance of debt and disposition of CEOC's
assets.
Fitch interprets the 'and' literally and therefore believes that
Caesars' position that the guarantee is released based on CEOC
ceasing to be wholly-owned can be challenged by the noteholders.
Fitch revised the Recovery Ratings (RRs) on CEOC's first liens
debt to 'RR2' (71%-90% recovery) from 'RR3' (51%-70% recovery) and
more junior debt to 'RR5' (11%-30% recovery) from 'RR6' (0%-10%
recovery) on April 28, 2014. The revision of the RRs on CEOC's
debt reflected Fitch's view that there is a better than 50/50
chance that CEOC creditors will realize value from the guarantee
in the event there is a restructuring at CEOC.
Realization of this value could be incorporated into negotiated
terms of a potential out-of-court debt exchange, or through
litigation ultimately via the bankruptcy process. In the
meantime, the value of the guarantee becomes diluted since the
company is now using the guarantee capacity to support the current
transaction.
TRANSACTIONS PRIME CEOC FOR EXCHANGE OFFER
With the additional $920 million of first-lien debt ahead of them
and the parent guarantee being in jeopardy, second-lien holders
could be more incentivized to enter into a debt-for-equity
exchange, possibly for equity in CEOC.
The announcement indicated that CEOC may use its equity for
'liability management and debt reduction initiatives.' Caesars
also stated that it may 'seek to expand the group of investors
with a goal of increasing the number of holders of CEOC equity in
order to help qualify the CEOC equity for listing on a national
securities exchange.'
HARRAH'S NEW ORLEANS SALE PENDING REGULATORY APPROVAL
In its announcement, Caesars disclosed that it closed on phase one
of the asset sale from CEOC to CGP with just the Las Vegas assets
being included in the first phase. The cash consideration for the
Las Vegas assets was $1.155 billion, which was funded with cash on
hand at CGP and a $700 million term loan that CGP closed on. The
$700 million loan will be repaid with $2 billion in Caesars Growth
Property Holdings (CGPH) financings that CGPH closed in April once
Caesars gets approval from Louisiana regulators on the sale of
Harrah's New Orleans, to which Caesars ascribes $660 million in
value. Planet Hollywood will remain part of the larger financing.
CGPH's 9.375% second-lien note proceeds are currently in escrow.
To avoid an event of default under the 9.375% indenture CGP either
needs to close on phase two of the transaction or CGP needs to
transfer the assets sold in phase one to another entity. CEC
expects to close phase two by second-quarter 2014.
Fitch currently rates CEC entities as follows:
Caesars Entertainment Corp.
-- Long-term Issuer Default Rating (IDR) 'CC'.
Caesars Entertainment Operating Co.
-- Long-term IDR 'CC';
-- Senior secured first-lien revolving credit facility and term
loans 'CCC/RR2';
-- Senior secured first-lien notes 'CCC/RR2';
-- Senior secured second-lien notes 'C/RR5';
-- Senior unsecured notes with subsidiary guarantees 'C/RR5';
-- Senior unsecured notes without subsidiary guarantees 'C/RR5'.
Caesars Entertainment Resort Properties, LLC
-- IDR 'B-'; Outlook Stable;
-- Senior secured first-lien credit facility 'B+/RR2';
-- First-lien notes 'B+/RR2';
-- Second-lien notes 'CCC/RR6'.
Caesars Growth Properties Holdings, LLC
-- IDR 'B-'; Outlook Stable;
-- Senior secured first-lien credit facility 'BB-/RR1';
-- Second-lien notes 'B-/RR4'.
Corner Investment PropCo, LLC
-- Long-term IDR 'CCC';
-- Senior secured credit facility 'B-/RR2'.
Chester Downs and Marina LLC
(and Chester Downs Finance Corp as co-issuer)
-- Long-term IDR 'B-'; Outlook Negative;
-- Senior secured notes 'BB-/RR1'.
Removing the guarantee takes much-needed coverage away from
bondholders at liquidity-strapped CEOC, which is widely believed
to be headed toward a restructuring, the report related.
One holder of CEOC second-lien bonds who asked not to be named
said he hadn't been interested in joining a second-lien bondholder
group in the past, but that now, he would consider it, the report
further related.
"I think everybody's going to challenge this transaction," the
bondholder said, the report added.
About Caesars Entertainment
Caesars Entertainment Corp., formerly Harrah's Entertainment Inc.
-- http://www.caesars.com/-- is one of the world's largest casino
companies, with annual revenue of $4.2 billion, 20 properties on
three continents, more than 25,000 hotel rooms, two million square
feet of casino space and 50,000 employees. Caesars casino resorts
operate under the Caesars, Bally's, Flamingo, Grand Casinos,
Hilton and Paris brand names. The Company has its corporate
headquarters in Las Vegas.
Harrah's announced its re-branding to Caesar's on mid-November
2010.
The Company incurred a net loss of $1.49 billion on $8.58 billion
of net revenues for the year ended Dec. 31, 2012, as compared with
a net loss of $666.70 million on $8.57 billion of net revenues
during the prior year. The Company's balance sheet at Sept. 30,
2013, showed $26.09 billion in total assets, $27.59 billion in
total liabilities and a $1.49 billion total deficit.
* * *
Caesars Entertainment carries a 'CCC' long-term issuer default
rating, with negative outlook, from Fitch and a 'Caa1' corporate
family rating with negative outlook from Moody's Investors
Service.
As reported in the TCR on Feb. 5, 2013, Moody's Investors Service
lowered the Speculative Grade Liquidity rating of Caesars
Entertainment Corporation to SGL-3 from SGL-2, reflecting
declining revolver availability and Moody's concerns that Caesars'
earnings and cash flow will remain under pressure causing the
company's negative cash flow to worsen.
In the May 7, 2013, edition of the TCR, Standard & Poor's Ratings
Services said that it lowered its corporate credit ratings on Las
Vegas-based Caesars Entertainment Corp. (CEC) and wholly owned
subsidiary Caesars Entertainment Operating Co. (CEOC) to 'CCC+'
from 'B-'.
"The downgrade reflects weaker-than-expected operating performance
in the first quarter, and our view that Caesars' capital structure
may be unsustainable over the next two years based on our EBITDA
forecast for the company," said Standard & Poor's credit analyst
Melissa Long.
CALMENA ENERGY: Forbearance Agreement Extended Until May 9
----------------------------------------------------------
Calmena Energy Services Inc. on May 6 provided an update on the
status of its senior credit facilities.
On October 29, 2013 Calmena and its senior lender entered into an
agreement whereby the Senior Lender agreed to forbear from
demanding payment or enforcing security with respect to amounts
owing by Calmena under its credit facilities with the Senior
Lender on certain terms. On March 31 2014, Calmena and the Senior
Lender entered into an extension agreement pursuant to which the
Senior Lender agreed to continue to forbear from demanding payment
or enforcing its security under the Credit Facilities until the
earlier of June 30, 2014 or a default as defined in the Extension.
The Extension also provided that the Company was required, on or
before April 30, 2014, to have either paid $9.0 million as a
permanent reduction under the Credit Facilities or to have entered
into one or more binding transactions to sell assets allowing the
Company to fund the required $9.0 million reduction by May 31,
2014.
Calmena and the Senior Lender have agreed to extend the Deadline
to May 9, 2014.
About Calmena Energy Services Inc.
Calmena is a diversified energy services company that provides
well construction services to its customers operating in Canada,
the United States, Latin America and the Middle East and North
Africa. The common shares of Calmena trade on the Toronto Stock
Exchange under the symbol "CEZ".
CALUMET PHOTOGRAPHIC: C&A Marketing to Reopen Business on May 11
----------------------------------------------------------------
C&A Marketing Inc., the New Jersey-based company who recently
purchased Calumet Photographic announces the grand reopening of
the Oak Brook store on Sunday, May 11. Calumet is an iconic, 75
year-old Chicago-based photo/imaging chain that was forced into
bankruptcy in March.
"We realize some people may be surprised at how fast we have moved
to reopen this store, however we did due diligence before we
stepped in to bid on the brand?and in the process realized the Oak
Brook location was the best representation of the thinking Calumet
should have deployed chain-wide," explained Chaim Pikarski, C&A
Marketing's Executive Vice President. "From a business
perspective, we know what's needed, we have the resources to
ensure that inventory is in place and the key staff that ?built"
this location is intact and ready to work. Even more important is
that our customers want us there, so why wait?"
The Oak Brook store was one of the chain's newer locations and
also the most forward thinking and successful. When it reopens
this Sunday, it will be with the inventory Pro's expect, the staff
consumers are used to and the services, including rental, intact.
C&A Marketing views the Calumet acquisition as a key component to
expanding their brand profile, with Calumet providing the pro &
"prosumer" photography professionals the best in products and
services. For 75 years, Calumet defined "photo retailing to
professionals" and C&A is determined to rebuild the brand as
quickly and efficiently as possible. C&A will make further
reopening announcements shortly.
The Oak Brook store is located at 1600 W 16th Street, Oak Brook,
IL and can be reached starting on Sunday at 630-860-7458. The
store will be open Sunday from 12pm to 5pm and Monday through
Friday from 9:00 a.m. to 7:00 p.m.
About C&A Marketing, Inc.
C&A Marketing is a manufacturer, distributor and online reseller
of cameras and photographic equipment. Headquartered in
Ridgefield Park, N.J., C&A is the Polaroid Licensee for instant
digital camera, sports video camera, IP home security cameras and
photo accessories. In addition, C&A owns and operates 14 Ritz
Camera and Image stores across the United States including Camera
World, Wolf Camera and Inkley's Camera. C&A also continues to
expand the RitzPix.com imaging business. With over two decades in
business, the depth and breadth of their inventory is constantly
expanding as is their presence and reputation in the consumer
electronic marketplace.
About Calumet Photographic
Calumet Photographic, Inc., a Chicago, Illinois-based photography
chain, filed a petition under Chapter 7 of the Bankruptcy Code
(Bankr. N.D. Ill. Lead Case No. 14-08893) on March 12, 2014,
listing assets of $50 million to $100 million and debts of $10
million to $50 million. The Debtor is represented by Mark A.
Berkoff, Esq., at Neal, Gerber & Eisenberg LLP, in Chicago,
Illinois. Silverman Consulting serves as financial advisor.
Catherine Steege, Esq., has been named the Chapter 7 Trustee. She
is represented by:
Catherine Steege, Esq.
Melissa Root, Esq.
Landon S. Raiford, Esq.
JENNER & BLOCK LLP
353 N. Clark St.
Chicago, IL 60654
E-mail: csteege@jenner.com
mroot@jenner.com
lraiford@jenner.com
CANCER GENETICS: Incurs $12.4 Million Net Loss in 2013
------------------------------------------------------
Cancer Genetics, Inc., filed with the U.S. Securities and Exchange
Commission its annual report on Form 10-K disclosing a net loss of
$12.37 million on $6.60 million of revenue for the year ended
Dec. 31, 2013, as compared with a net loss of $6.66 million on
$4.30 million of revenue for the year ended Dec. 31, 2012.
As of Dec. 31, 2013, the Company had $55.15 million in total
assets, $9.69 million in total liabilities and $45.46 million in
total stockholders' equity.
A copy of the Form 10-K is available for free at:
http://is.gd/ZY35DG
About Cancer Genetics
Rutherford, N.J.-based Cancer Genetics, Inc., is an early-stage
diagnostics company focused on developing and commercializing
proprietary genomic tests and services to improve and personalize
the diagnosis, prognosis and response to treatment (theranosis) of
cancer.
CARIBBEAN PETROLEUM: 3rd Cir. Affirms Ruling on Intertek Claims
---------------------------------------------------------------
Intertek USA, Inc. appeals the District Court's order affirming
the decision of the Bankruptcy Court for the District of Delaware,
which granted the motion of Liquidation Trustee FTI Consulting,
Inc. to disallow Intertek's proofs of claim against Caribbean
Petroleum Corp., pursuant to 11 U.S.C. Sec. 502(e)(1)(B). Section
502(e)(1)(B) is a Bankruptcy Code provision "which requires
disallowance of contingent claims for reimbursement or
contribution from a debtor." Because Intertek seeks contribution
from the Debtors in the event it is ultimately found liable in
civil litigation which remains ongoing, the Bankruptcy Court as
well as the District Court found that Intertek's claims were
contingent and therefore disallowed under Sec. 502(e)(1)(B).
Intertek asserts that the Bankruptcy and District Courts
incorrectly applied the Bankruptcy Code to disallow claims against
a post-confirmation liquidation trust, erroneously relied on FTI's
unsupported factual allegations, violated principles of Delaware
trust law, and deprived Intertek of its property interest without
due process. Finding no merit to these contentions and concluding
that the Intertek proofs of claim at issue plainly satisfy the
criteria for disallowance under Sec. 502(e)(1)(B), the U.S. Court
of Appeals for the Third Circuit affirmed the lower courts'
rulings in a May 6, 2014 Opinion available at http://is.gd/jUZjJz
from Leagle.com.
About Caribbean Petroleum
San Juan, Puerto Rico-based Caribbean Petroleum Corporation, aka
CAPECO, owns and operates certain facilities in Bayomon, Puerto
Rico, for the import, offloading, storage and distribution of
petroleum products. Caribbean Petroleum sought Chapter 11
protection (Bankr. D. Del. Case No. 10-12553) on Aug. 12, 2010,
nearly 10 months after a massive explosion at its major Puerto
Rican fuel storage depot virtually shut down the company's
operations. The Debtor estimated assets of US$100 million to
US$500 million and debts of US$500 million to US$1 billion as of
the Petition Date.
Affiliates Caribbean Petroleum Refining, L.P., and Gulf Petroleum
Refining (Puerto Rico) Corporation filed separate Chapter 11
petitions on Aug. 12, 2010.
John J. Rapisardi, Esq., George A. Davis, Esq., Peter Friedman,
Esq., and Zachary H. Smith, Esq., at Cadwalader, Wickersham & Taft
LLP, in New York, serve as lead counsel to the Debtors. Mark D.
Collins, Esq., and Jason M. Madron, Esq., at Richards, Layton &
Finger, P.A., in Wilmington, Delaware, serve as local counsel.
The Debtors' financial advisor is FTI Consulting Inc. The
Debtors' chief restructuring officer is Kevin Lavin of FTI
Consulting Inc. Kurtzman Carson Consultants LLC serves as the
noticing, claims and balloting agent to the Debtors.
In December 2010, the Debtor won bankruptcy court approval to sell
its business to Puma Energy International for US$82 million. Puma
obtained Capeco's entire retail network, which consists of 157
locations, gasoline, diesel and other fuel storage facilities as
well as undeveloped land and a private deep water jetty.
The Fourth Amended Joint Plan of Liquidation for Caribbean
Petroleum and its debtor affiliates became effective on June 3,
2011.
CARMIKE CINEMAS: S&P Raises Corp. Credit Rating to 'B+'
-------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on Columbus, Ga.-based movie exhibitor Carmike Cinemas Inc.
to 'B+' from 'B'. The outlook is stable.
At the same time, S&P revised its recovery rating on the company's
$210 million senior secured notes due 2019 to '1', to reflect its
expectation for very high (90% to 100%) recovery for noteholders
in our simulated default scenario, from '3' (50% to 70% recovery
expectation). S&P subsequently raised the issue-level rating on
this debt to 'BB' (two notches higher than the 'B+' corporate
credit rating) from 'B'. S&P expects that recovery prospects have
improved for noteholders because of higher EBITDA based on the
company's theater expansion.
In addition, S&P raised the rating on the $25 million revolving
credit facility by one notch to 'BB' from 'BB-', in conjunction
with the upgrade. The recovery rating on the revolver remains
'1', indicating S&P's expectation for very high (90% to 100%)
recovery for lenders in the event of a payment default.
"The rating upgrade and stable outlook reflect our view that
leverage could decline further under 5x," said Standard & Poor's
credit analyst Jeanne Shoesmith.
"We also expect that the company will continue to direct cash
toward theater expansion and acquisitions, modestly improving its
circuit despite industry pressures on attendance."
"We assess Carmike's business risk profile as "weak," reflecting
the company's lower EBITDA margin, smaller market theater
locations, and lower-quality circuit relative to its peers.
Carmike's EBITDA margin, at 16.9% as of March 31, 2014, is about
100 basis points lower than Regal's and 500 basis points lower
than Cinemark's margin. The company's theaters are primarily
located in small to midsize markets in the Southeast and Midwest,
where film preferences tend to be narrower, leading to lower
utilization. Many of its venues do not have a large number of
screens, which would provide a wider selection of film and show
times. Despite an ongoing effort to modernize and expand its
theaters, roughly 30% of screens still lack stadium seating, a
feature popular with moviegoers. We view Carmike's theaters as
less modern than those of other leading chains, leaving the
company more prone to attendance deterioration if faced with new
competition," S&P noted.
"We view Carmike's financial risk profile as "aggressive,"
reflecting its high debt leverage, aggressive capital spending,
and acquisition plans. Pro forma for the Muvico acquisition,
lease-adjusted debt to EBITDA was about 4.8x for the 12 months
ended March 31, 2014, following several years of gradual declines
in leverage. We expect adjusted leverage to moderate to the mid-
to high-4x area in 2014 as incremental revenue and synergies from
acquisitions more than offset higher capital leases and declining
organic attendance. Adjusted leverage is in line with our
indicative range of 4x to 5x for an "aggressive" financial risk
profile," S&P added.
CHINA NETWORKS: UHY Vocation HK CPA Raises Going Concern Doubt
--------------------------------------------------------------
China Networks International Holdings, Ltd., reported a net loss
of $528,468 in 2013 compared with a net loss of $4.14 million in
2012.
UHY Vocation HK CPA Limited expressed substantial doubt about the
Company's ability to continue as a going concern, citing that the
Company has limited operations and did not generate any revenue
for the year 2013.
The Company's balance sheet at Dec. 31, 2013, showed $1.12 million
in total assets, $2.48 million in total liabilities and a
stockholders' deficit of $1.36 million.
A copy of the Form 20-F filed with the U.S. Securities and
Exchange Commission on Apr. 25, 2014 is available at:
http://is.gd/WMZwHz
About China Networks
China Networks International Holdings, Ltd., headquartered in
Beijing, PRC, was incorporated in Delaware on Aug. 16, 2006, as
Alyst Acquisition Corp. ("Alyst") in order to serve as a vehicle
for the acquisition of an operating business in any industry,
with a focus on the telecommunications industry, through a
merger, capital stock exchange, asset acquisition or other
similar business combination.
The Company was formed to provide broadcast television
advertising services in the PRC operating via joint venture
partnerships with PRC state-owned television broadcasters (PRC TV
Stations). The Company commenced operations on Oct. 1, 2008.
Activity through Sept. 30, 2008, related to the Company's
formation, private placement offering, establishment of joint
ventures and contractual relationships in the PRC, and business
combination with Alyst.
CLAIRE'S STORES: Beatrice Lafon Promoted to CEO
-----------------------------------------------
James D. Fielding resigned from his position as the chief
executive officer of Claire's Stores, Inc., and from the Company's
Board of Directors. His resignation from the Board was not due to
any disagreement with the Company known to any executive officer
of the Company on any matter relating to the Company's operations,
policies or practices.
On April 2, 2014, the Company announced the appointment of
Beatrice Lafon, as chief executive officer, and a member of the
Board of Directors of the Company. Ms. Lafon had previously
served as president of Claire's Europe.
Ms. Lafon became president of Claire's Europe in October 2011.
Prior to joining the Company, Ms. Lafon had over 30 years of Pan-
European retail experience and has served in a variety of
executive roles, including Founder, Owner and Managing Director of
the Business Intelligence Network (June 2001 to September 2011);
chief executive officer, TJ Hughes (January 2011 to April 2011);
group chief executive, Netherlands, Etam Group, a Dutch women's
fashion retailer (July 2008 to July 2010); chief executive
officer, Animal Ltd., a global active sports retailer and
wholesaler based in the UK (October 2006 to December 2006); and
Strategy Consultant, Tchibo UK Ltd., a Pan European chain of small
variety shops based in Germany (August 2006 to October 2006).
From February 1993 to January 2000 and December 2005 to July 2006,
Ms. Lafon served as Commercial Director (December 2005 to July
2006) and Head of Buying and Business Development (February 1993
to January 2000) at Woolworths Group, a UK retail chain, part of
the Kingfisher Group. From April 2001 to July 2005, Ms. Lafon
held various senior management roles in e-commerce, marketing and
retail, including at Skybuy, where she headed the Retail Division
of BSkyB, part of News Corporation, in the United Kingdom (June
2003 to July 2005); managing director, Eyestorm, a global
contemporary art retailer (April 2001 to May 2002); and director
E-Commerce/managing director of Homebase.co.UK, a home improvement
retailer, part of the J Sainsbury Group (January 2000 to April
2001). Earlier in her career, Ms. Lafon held several buying and
merchandising positions with Marks & Spencer and River Island.
Ms. Lafon is not party to any transactions with the Company
required to be disclosed by Item 404(a) of Regulation S-K.
In connection with her appointment as chief executive officer, Ms.
Lafon and the Company entered into an Employment Agreement dated
as of April 2, 2014. The Employment Agreement replaces and
supersedes Ms. Lafon's existing employment agreement with Claire's
European Services Limited, a subsidiary of the Company. Pursuant
to the terms thereof, Ms. Lafon will receive an annual base salary
of at least $900,000 and an annual target bonus of 100 percent of
her base salary. The actual amount of the bonus will depend upon
the achievement of certain annual performance objectives. Ms.
Lafon is also entitled to expense reimbursement and other
customary employee benefits, as well as reimbursement of the
expenses associated with her relocation from the United Kingdom to
Chicago.
Additional information is available for free at:
http://is.gd/wWpAiJ
About Claire's Stores
Claire's Stores, Inc. -- http://www.clairestores.com/-- operates
as a specialty retailer of fashion accessories and jewelry for
preteens and teenagers, as well as for young adults in North
America and internationally. It offers jewelry products that
comprise costume jewelry, earrings, and ear piercing services; and
accessories, including fashion accessories, hair ornaments,
handbags, and novelty items.
Based in Pembroke Pines, Florida, Claire's Stores operates under
two brands: Claire's(R), which operates worldwide and Icing(R),
which operates only in North America. As of Jan. 31, 2009,
Claire's Stores, Inc., operated 2,969 stores in North America and
Europe. Claire's Stores also operates through its subsidiary,
Claire's Nippon, Co., Ltd., 213 stores in Japan as a 50:50 joint
venture with AEON, Co., Ltd. The Company also franchises 198
stores in the Middle East, Turkey, Russia, South Africa, Poland
and Guatemala.
Claire's Stores disclosed net income of $1.28 million on $1.55
billion of net sales for the fiscal year ended Feb. 2, 2013, as
compared with net income of $11.63 million on $1.49 billion of net
sales for the fiscal year ended Jan. 28, 2012.
The Company's balance sheet at Nov. 2, 2013, showed $2.73 billion
in total assets, $2.81 billion in total liabilities and a $89.32
million stockholders' deficit.
Bankruptcy Warning
The Company said the following statement in its annual report for
the fiscal year ended Feb. 2, 2013.
"If we are unable to generate sufficient cash flow and are
otherwise unable to obtain funds necessary to meet required
payments of principal, premium, if any, and interest on our
indebtedness, or if we otherwise fail to comply with the various
covenants, including financial and operating covenants in the
instruments governing our indebtedness, we could be in default
under the terms of the agreements governing such indebtedness. In
the event of such default:
* the holders of such indebtedness may be able to cause all of
our available cash flow to be used to pay such indebtedness
and, in any event, could elect to declare all the funds
borrowed thereunder to be due and payable, together with
accrued and unpaid interest;
* the lenders under our Credit Facility could elect to
terminate their commitments thereunder, cease making further
loans and institute foreclosure proceedings against our
assets; and
* we could be forced into bankruptcy or liquidation," according
to the Company's annual report for the fiscal year ended
Feb. 2, 2013.
* * *
As reported by the TCR on Oct. 1, 2012, Moody's Investors Service
upgraded Claire's Stores, Inc.'s Corporate Family and Probability
of Default ratings to Caa1 from Caa2. The upgrade of Claire's
Corporate Family Rating to Caa1 reflects its ability to address
its substantial term loan maturity in 2014 by refinancing it with
a $625 million add-on to its existing senior secured first lien
notes due 2019.
Claire's Stores, Inc., carries a 'B-' corporate credit rating from
Standard & Poor's Ratings Services.
COASTLINE INVESTMENTS: 2 Responsible Individuals Added
------------------------------------------------------
Shih-Chung Liu, managing member and holder of 100% membership
interest in debtor Coastline Investments LLC, said in a court
filing that in addition to Shih-Chung Liu, these individuals are
authorized to execute and file petition schedules and other court
documents on behalf of the company:
1. Lucy Gao, and
2. Vanessa Lavandera.
The Debtors said in a court filing that recently, they had
procured a potential buyer for their hotels, which would yield a
much higher price that the fire-sale price that would likely
result from a trustee sale at foreclosure. In order to preserve
the value of the hotels, the Debtors filed their bankruptcy cases
to stop the foreclosure sales. The Debtors say they seek to
reorganize their financial affairs by way of a Chapter 11 plan,
sale of the hotels under 11 U.S.C. Sec. 363, or a combination of
the two.
The 11 U.S.C. Sec. 341(a) meeting was slated for March 24, 2014.
Coastline Investments early in the case sought and obtained an
order granting a 10-day extension to March 14, 2014, of the
deadline to file its statement of financial affairs and other
documents listed in the court's deficiency notice. The Debtor
said that the new deadline will still provide the U.S. Trustee and
creditors over a full week to review the documents before the
meeting.
About Coastline and Diamond
Coastline Investments, doing business as Hilltop Suites Hotel, and
Diamond Waterfalls LLC, doing business as Diamond Bar Inn &
Suites, filed Chapter 11 bankruptcy petitions (Bankr. C.D. Cal.
Case No. 14-13028 and 14-13030) in Los Angeles on Feb. 18, 2014.
The cases are jointly administered under Lead Case No. 14-30328.
Coastline Investments is the owner of a hotel located at the top
of a prominent hill with sweeping views in Pamona, California.
The Hilltop Hotel consists of 130 suites located on three acres of
hilltop property by Interstates 10 and 57, Cal-Poly Tech
University, and the Los Angeles County fairgrounds, Fairplex. The
Hilltop Hotel has three hotel floors along with two levels of
parking and features and outdoor pool, spa, exercise fitness
center, sauna, steam room and a full service restaurant, lounge,
meeting spaces and a banquet ballroom to accommodate 300 guests.
Diamond is the owner of a 161-room hotel located in Pomona,
California. The Diamond Hotel is a full-service hotel, which
includes a business center, meeting facilities, pool, spa, fitness
center, steam, sauna and offices.
The Debtors acquired both of the hotels through voluntary Chapter
11 bankruptcy court 11 U.S.C. Sec. 363 sales in February 2012.
The Hilltop Hotel was acquired from Shilo Inn, Pamona Hilltop, LLC
(Case No. 11-26270) and the Diamond Hotel was acquired from Shilo
Inn, Diamond Bar LLC (Case No. 10-60884).
The Debtors sought bankruptcy protection after the receiver
appointed for the hotels scheduled a trustee sale for both hotels.
The receiver was appointed at the behest of the investor group
which provided a secured loan of $2,500,000, which the Debtors
defaulted. The Debtors also have loans from First General Bank
each in the amount of $5,250,000.
Shin-Chung Liu is the 100% membership owner and managing member of
both of the Debtors. The Debtors' affairs are managed by Liberty
Capital Management Corporation.
Judge Richard M. Neiter has been assigned to the cases.
The Debtors are represented by David B. Golubchick, and J.P.
Fritz, Esq., at Levene, Neale, Bender, Yoo & Brill L.L.P., in Los
Angeles, California.
COLDWATER CREEK: Wants to Sell Kootenai Parcel for $2.6MM
---------------------------------------------------------
Coldwater Creek Inc., and its affiliates the Bankruptcy Court for
authority to sell a real property in Kootenai, Idaho, and assume a
related purchase and sale agreement.
Debtor Coldwater Creek Merchandising & Logistics, Inc. (CCM&L)
owns 21 acres of real property located in Kootenai, Idaho, which
has been developed as a multi-building commercial campus that
functions as the Debtors' headquarters. As part of its orderly
wind-down and to maximize the value of the Campus, the Debtors
determined to subdivide the Campus into multiple parcels in order
to facilitate sales to multiple counterparties that are interested
in some of the commercial real estate but do not have a use for
the entire Campus.
Litehouse Foods approached Coldwater in late October 2013
regarding the purchase or long-term lease of the building known as
the "Administration Building" containing 32,600 square feet of
gross floor area, certain tangible personal property consisting of
furniture, equipment and fixtures contained therein, as well as a
portion of the Campus for parking and related improvements all
contained on an 8.64 acre parcel of land.
Over the next several weeks the Debtors negotiated with the
Purchaser. Additionally, the Debtors worked with local real
estate experts to review lease rates and perform market
comparisons. The Debtors commissioned an appraisal of the Campus
from a certified general real estate appraiser licensed in Idaho
to provide an opinion of the market value of the Debtors' fee
simple interest in the Campus. Furthermore, the Debtors contacted
several other businesses in the area including those that are the
largest employers in Bonner County and those that previously had
leased space from the Debtors. The Debtors did not receive any
expressions of interest concerning the Property or the Campus as a
whole.
Litehouse Foods is managed by a number of the principals of
Litehouse Foods, a privately held, employee-owned company and a
leading manufacturer and distributor of refrigerated salad
dressings, dips, sauces, cheese, herbs and beverages. Litehouse
Foods is the largest private employer in Bonner County after the
Debtors according to the Idaho Department of Labor. As such, it
is one of the most natural buyers of the Property.
The Debtor notes that Litehouse's offer to purchase the Property
for $2.6 million is subject to few closing conditions and the
Purchaser has indicated that it will accept the Property "as is".
The Debtors believe that a sale of the Property to the Purchaser
will maximize the value from this asset and, furthermore, allow
the Debtors to achieve greater value from the remaining parcels of
the Campus because given the size of the Campus, there are few, if
any, potential buyers of the entire piece of property.
Before entering into the Purchase and Sale Agreement, the Debtors
sought input from both Wells Fargo Bank, National Association, as
its prepetition revolving lender (and now, the Debtors'
postpetition DIP financing lender), as well as CC Holdings Agency
Corporation, its prepetition term loan lender. The Secured
Lenders consented to the Debtors' sale pursuant to the Purchase
and Sale Agreement. On or about April 9, 2014, CCM&L and the
Purchaser entered into the Purchase and Sale Agreement, pursuant
to which CCM&L agreed to deliver to the Purchaser a special
warranty deed and bill of sale among other deliverables as
conditions to settlement and receipt of the $2.6 million purchase
price. Thus, the Debtors now seek authority to assume the
Purchase and Sale Agreement, to allow the Debtors to perform the
settlement conditions thereunder and sell the Property to the
Purchaser free and clear of all liens, claims and encumbrances.
About Coldwater Creek
Coldwater Creek is a multi-channel retailer that offers its
merchandise through retail stores across the country, its catalog
and its e-commerce Web site, http://www.coldwatercreek.com/
Originally founded in Sandpoint, Idaho in 1984 as a direct,
catalog-based marketer, Coldwater evolved into a multi-channel
specialty retailer operating 334 premium retail stores, 31 factory
outlet stores and seven day spa locations throughout the United
States.
As of the bankruptcy filing, the Debtors domestically employ a
total of approximately 5,990 employees throughout their retail
locations, corporate headquarters and distribution, design and
call centers.
Coldwater Creek Inc. and its debtor-affiliates sought Chapter 11
bankruptcy protection (Bankr. D. Del. Lead Case No. 14-10867) on
April 11, 2014, to liquidate their assets.
Coldwater Creek Inc. estimated $10 million to $50 million in
assets and $100 million to $500 million in liabilities. Affiliate
Coldwater Creek U.S. Inc. estimated $100 million to $500 million
in assets and liabilities.
The Debtors have drawn $37.5 million and have approximately
$10 million in letters of credit outstanding under a senior
secured credit facility (ABL facility) provided by lenders led by
Wells Fargo Bank, National Association, as agent. The Debtors
also owe $96 million, which includes accrued interest and
approximately $23 million representing a prepayment premium
payable, under a term loan from lenders led by CC Holding Agency
Corporation, as agent. Aside from the funded debt, the Debtors
have accumulated a significant amount of accrued and unpaid trade
and other unsecured debt in the normal course of their business.
The Debtors have tapped Young Conaway Stargatt & Taylor, LLP, and
Shearman & Sterling LLP as attorneys, Perella Weinberg Partners LP
as financial advisor, Alvarez & Marsal as restructuring advisor,
and Prime Clerk LLC as claims and noticing agent.
COMSTOCK RESOURCES: S&P Affirms 'B' Corp. Credit Rating
-------------------------------------------------------
Standard & Poor's Ratings Services said it affirmed all its
ratings, including the 'B' corporate credit rating, on Frisco,
Texas-based Comstock Resources Inc. The outlook is stable.
"We are affirming the ratings following the improvement of our
financial risk profile on Comstock Resources to "aggressive" from
"highly leveraged" because of the company's more balanced product
mix between oil and natural gas and our reduced estimate of
expected cash flow volatility. We expect oil to constitute 40% of
Comstock's total equivalent production this year, up from 20% in
2013 and about 5% in 2010. As a result of the company's better
product balance, along with hedges covering 55% of this year's oil
production, we expect more stability in future cash flows, and
thus, have raised our assessment of Comstock's financial risk
profile," S&P noted.
"The stable outlook reflects our expectation that Comstock
Resources Inc. will continue to increase its oil production as a
percent of total volumes while maintaining debt to EBITDAX of 2x-
3x and FFO to debt above 30%," said Standard & Poor's credit
analyst Carin Dehne-Kiley.
S&P could lower the rating if debt to EBITDAX exceeded 4x or FFO
to debt fell below 20% for a sustained period. This would most
likely occur if oil production does not ramp up as S&P expects.
S&P would consider an upgrade if the company increases its reserve
size and production to levels more in line with 'B+' rated peers,
along with increasing its oil to gas mix, while maintaining
appropriate leverage.
CONNACHER OIL: Moody's Affirms 'Caa2' Corporate Family Rating
-------------------------------------------------------------
Moody's Investors Service affirmed Connacher Oil and Gas Limited's
(Connacher) Caa2 Corporate Family Rating (CFR), Caa2-PD
Probability of Default Rating (PDR), and Caa3 rating on its $900
million second lien senior secured notes. The SGL-4 Speculative
Grade Liquidity rating is affirmed. The outlook remains negative.
The affirmation follows Connacher's proposed placement of a C$140
million first lien senior secured Term Loan, with a second out
provision behind the existing revolver, which is expected to be
reduced to C$30 million from C$95 million. Moody's expects that
the proceeds will only be able to fund Connacher's capital
expenditures and interest payments until the end of 2015, although
a distressed exchange could happen before that time.
Outlook Actions:
Issuer: Connacher Oil and Gas Limited
Outlook, Remains Negative
Affirmations:
Issuer: Connacher Oil and Gas Limited
Probability of Default Rating, Affirmed Caa2-PD
Speculative Grade Liquidity Rating, Affirmed SGL-4
Corporate Family Rating, Affirmed Caa2
Senior Secured Regular Bond/Debenture Aug 1, 2018, Affirmed Caa3
Senior Secured Regular Bond/Debenture Aug 1, 2019, Affirmed Caa3
Rating Rationale
Connacher's Caa2 Corporate Family Rating (CFR) reflects its weak
liquidity position, very high leverage and debt service cost,
small production base and exposure to light/heavy differentials.
Connacher is not able to meet its cash interest payments and
maintenance capex with EBITDA. The CFR is supported by Connacher's
large and long-lived proven and probable reserve base.
Connacher's SGL-4 Speculative Grade Liquidity rating reflects weak
liquidity. Pro forma the term loan placement, Connacher will have
C$155 million in cash and $10 million available under a reduced
C$30 million borrowing base revolving credit facility, that is
currently due July 31, 2014. Moody's expect negative free cash
flow of over C$100 million through Q1 2015 to be funded with cash.
Connacher has received a waiver for its debt to capitalization
covenant (not to exceed 75%) for March 31, 2014 and June 30, 2014.
Moody's expects the company to remain in compliance with its other
financial covenant (revolver debt to EBITDA not to exceed 2x)
through June 30, 2014. The company's assets are pledged under the
revolver, term loan and second lien notes. Should the revolver not
be extended in July, Moody's expect Connacher will have the cash
on hand to pay it off or post cash for letters of credit.
In accordance with Moody's Loss Given Default Methodology the
notching of the second lien notes at Caa3, one notch below the
Caa2 CFR, reflects their junior ranking in the capital structure
to the secured revolver and term loan, and a one notch override to
the model driven outcome given the negative outlook.
The negative outlook reflects Moody's expectation of further
deterioration in liquidity as the company funds continuing
negative free cash flow and Moody's expectation that a debt
restructuring is likely.
The rating could be downgraded if liquidity appears insufficient
to meet anticipated funding requirements over the next 12 to 18
months.
While unlikely in the foreseeable future, the rating could be
upgraded if Connacher is able to maintain bitumen production at
12,000 bbls/d and fund its maintenance capex and interest payments
with internal cash flow.
Connacher is a small exploration & production company that
operates two steam assisted gravity drainage oil sands projects in
Alberta, currently producing about 13,000 barrels per day.
CONTINENTAL BUILDING: S&P Raises Rating on $465MM Facilities to B+
------------------------------------------------------------------
Standard & Poor's Ratings Services said it raised its issue-level
rating on U.S.-based wallboard manufacturer Continental Building
Products LLC's $465 million first-lien credit facilities,
consisting of a $50 million first-lien revolving credit facility
and a $415 first-lien term loan, to 'B+' from 'B' (one notch
higher than the corporate credit rating). S&P also revised the
recovery rating to '2' from '3', indicating substantial (70% to
90%) recovery in the event of default. At the same time S&P is
withdrawing the 'CCC+' issue-level rating on the second-lien
credit agreement, which was repaid.
The 'B' corporate credit rating and stable outlook remain
unchanged.
The issue-level upgrade and recovery rating revision reflect
Reston, Va.-based Continental Building Products LLC's recent
initial public offering in which net proceeds were used to repay
the second-lien credit agreement.
Standard & Poor's 'B+' issue-level rating on the company's first-
lien secured debt is based on S&P's view of the company's business
risk as "weak" and its financial risk as "highly leveraged." Key
business risks include S&P's expectation for very high EBITDA
volatility due to the company's exposure to the cyclical
residential and commercial construction sectors. S&P's financial
risk assessment reflects typically aggressive financial policies
adopted by companies owned by financial sponsors.
Ratings List
Continental Building Products LLC
Corporate Credit Rating B/Stable/--
Rating Raised; Recovery Rating Revised
To From
Continental Building Products LLC
$415 mil 1st-lien term loan B+ B
Recovery Rating 2 3
$50 mil 1st-lien revolving credit fac B+ B
Recovery Rating 2 3
COPYTELE INC: Amends 27.7 Million Shares Resale Prospectus
----------------------------------------------------------
CopyTele, Inc., amended its registration statement on Form S-3
prospectus relating to the resale of up to 27,748,415 shares of
common stock, par value $0.01 per share, of the Company held by
Adaptive Capital, LLC, consisting of the following:
* 18,498,943 shares of common stock issuable upon the
conversion of a 6 percent convertible debenture held by
Adaptive Capital, LLC, that was issued on Nov. 11, 2013, in a
private placement; and
* 9,249,472 shares of common stock issuable upon the exercise
of warrants held by Adaptive Capital and issued in the
November Private Placement.
The Company will not receive any proceeds from the resale of any
of the shares of common stock being registered. However, the
Company may receive proceeds from the exercise of the warrants
exercised other than pursuant to any applicable cashless exercise
provisions of the warrants.
The Company's common stock is quoted on the OTCQB under the symbol
"COPY." On April 17, 2014, the last reported sale price of the
Company's common stock on the OTCQB was $0.25 per share.
Concurrently with the securities being offered by the selling
stockholder in the secondary offering pursuant to this prospectus,
the Company is offering an indeterminate number of shares of its
common stock in a primary offering in a separate prospectus
included in its Registration Statement on Form S-3. Additionally,
on Feb. 3, 2014, the Company filed its Post-Effective Amendment
No. 1 to Form S-1 on Form S-3, to continue registration of up to
57,400,130 shares of its common stock, originally registered in a
secondary offering and declared effective on June 14, 2013.
A copy of the Form S-3/A is available for free at:
http://is.gd/oRymNF
About CopyTele
Melville, N.Y.-based CopyTele, Inc.'s principal operations include
the development, production and marketing of thin flat display
technologies, including low-voltage phosphor color displays and
low-power passive E-Paper(R) displays, and the development,
production and marketing of multi-functional encryption products
that provide information security for domestic and international
users over several communications media.
CopyTele incurred a net loss of $10.08 million for the year ended
Oct. 31, 2013, as compared with a net loss of $4.25 million during
the prior year. As of Jan. 31, 2014, the Company had $10.32
million in total assets, $11.54 million in total liabilities, all
current, $4.44 million in contingencies and a $5.66 million total
shareholders' deficiency.
CRENSHAW HALL: Case Summary & 6 Unsecured Creditors
---------------------------------------------------
Debtor: Crenshaw Hall Properties, LLC
2408 Trusty Trail
Raleigh, NC 27615
Case No.: 14-02551
Chapter 11 Petition Date: May 5, 2014
Court: United States Bankruptcy Court
Eastern District of North Carolina
Judge: Hon. Stephani W. Humrickhouse
Debtor's Counsel: Douglas Q. Wickham, Esq.
HATCH, LITTLE & BUNN, LLP
PO Box 527
Raleigh, NC 27602
Tel: 919 856-3940
Fax: 919 856-3950
Email: dqwickham@hatchlittlebunn.com
Total Assets: $1.40 million
Total Liabilities: $922,929
The petition was signed by John R. Bennett III, managing member.
A list of the Debtor's six largest unsecured creditors is
available for free at http://bankrupt.com/misc/nceb14-02551.pdf
DESIGNER AUTO: Case Summary & 3 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Designer Auto Sales, Inc.
623 Buckner Blvd.
Dallas, TX 75217
Case No.: 14-32301
Chapter 11 Petition Date: May 7, 2014
Court: United States Bankruptcy Court
Northern District of Texas (Dallas)
Judge: Hon. Harlin DeWayne Hale
Debtor's Counsel: Charles R. Chesnutt, III, Esq.
CHARLES R. CHESNUTT, P.C.
Three Lincoln Centre, Suite 1221
5430 LBJ Freeway
Dallas, TX 75240
Tel: 972-248-7000
Fax: 972-559-1872
Email: pleadings@chapter7-11.com
Total Assets: $226,017
Total Liabilities: $1.58 million
The petition was signed by Chad Donihoo, president.
A list of the Debtor's three largest unsecured creditors is
available for free at http://bankrupt.com/misc/txnb14-32301.pdf
DETROIT, MI: Bankruptcy Vote Hinges on Creditors' Homework
----------------------------------------------------------
Chris Christoff and Steven Church, writing for Bloomberg News,
reported that as creditors prepare to vote on a plan to end
Detroit's $18 billion bankruptcy, the city still needs help from
state lawmakers to pay its obligations while avoiding a fire sale
of its fine art collection.
According to the Bloomberg report, financially stricken Detroit
must secure funding from a Republican-controlled legislature to
shore up its pensions. Emergency Manager Kevyn Orr continues to
try to lease Detroit's water system to generate cash to improve
services that now leave residents waiting hours for buses and
police on streets darkened by broken lights.
State lawmakers have yet to approve Governor Rick Snyder's plan to
give $350 million over 20 years -- or $195 million in a lump sum -
- to Detroit's employee pension systems, Bloomberg related. The
money is necessary to secure an additional $466 million from
private foundations and the Detroit Institute of Arts to defray
pension cuts while shielding the museum's art collection from sale
to pay creditors.
"The key word is ?if,' and there are a lot of ifs," said Douglas
Bernstein, a bankruptcy lawyer at Bloomfield Hills Michigan-based
Plunkett Cooney PC, who represents one of the foundations that
pledged money for the pension systems, Bloomberg further related.
The balloting is a crucial phase of the largest U.S. municipal
bankruptcy, which was filed in July and raised alarms over the
sanctity of municipal bonds and state-protected pensions,
Bloomberg said. Court mediation has produced numerous agreements
from retirees, employee unions and some bondholders, though some
holdouts cast uncertainty over the 1,110-page plan of adjustment
Orr presented to U.S. Bankruptcy Judge Steven Rhodes.
Reuters reported that Detroit's future once it exits the biggest
municipal bankruptcy in U.S. history will depend on oversight, the
city's chief financial officer said.
"I believe the post-bankruptcy structure is absolutely critical
and that right now is a big question mark," John Hill told a
conference sponsored by the Federal Reserve Bank of Chicago and
the Civic Federation, a Chicago-based government finance watchdog
group, the Reuters report related.
U.S. Bankruptcy Judge Steven Rhodes, who is overseeing Detroit's
case, recently raised the idea of a court-appointed monitor, the
Reuters report further related. Michigan Governor Rick Snyder, a
Republican, has mentioned the possibility of a control board
similar to one used for New York City's fiscal crisis in the
1970s.
While Kevyn Orr, the city's state-appointed emergency manager who
took Detroit to bankruptcy court, is expected to leave his
position in September, Hill said the state has the option of
replacing him if necessary, according to Reuters.
Hill, who was appointed CFO last November, said it was important
for the city's elected officials to participate in reforms, the
report added. They will be responsible for executing the debt
adjustment plan once it wins court approval and the emergency
manager departs.
About City of Detroit, Michigan
The City of Detroit, Michigan, weighed down by more than
$18 billion in accrued obligations, sought municipal bankruptcy
protection on July 18, 2013, by filing a voluntary Chapter 9
petition (Bankr. E.D. Mich. Case No. 13-53846). Detroit listed
more than $1 billion in both assets and debts.
Kevyn Orr, who was appointed in March 2013 as Detroit's emergency
manager, signed the petition. Detroit is represented by
lawyers at Jones Day and Miller Canfield Paddock and Stone PLC.
Michigan Governor Rick Snyder authorized the bankruptcy filing.
The filing makes Detroit the largest American city to seek
bankruptcy, in terms of population and the size of the debts and
liabilities involved.
The City's $18 billion in debt includes $5.85 billion in special
revenue obligations, $6.4 billion in post-employment benefits,
$3.5 billion for underfunded pensions, $1.13 billion on secured
and unsecured general obligations, and $1.43 billion on pension-
related debt, according to a court filing. Debt service consumes
42.5 percent of revenue. The city has 100,000 creditors and
20,000 retirees.
The Hon. Steven Rhodes oversees the bankruptcy case. Detroit is
represented by David G. Heiman, Esq., and Heather Lennox, Esq., at
Jones Day, in Cleveland, Ohio; Bruce Bennett, Esq., at Jones Day,
in Los Angeles, California; and Jonathan S. Green, Esq., and
Stephen S. LaPlante, Esq., at Miller Canfield Paddock and Stone
PLC, in Detroit, Michigan.
Sharon Levine, Esq., at Lowenstein Sandler LLP, is representing
the American Federation of State, County and Municipal Employees
and the International Union.
Babette Ceccotti, Esq., at Cohen, Weiss & Simon LLP, is
representing the United Automobile, Aerospace and Agricultural
Implement Workers of America.
A nine-member official committee of retired workers was appointed
in the case. The Retirees' Committee is represented by Dentons US
LLP. Lazard Freres & Co. LLC serves as the Retiree Committee's
financial advisor.
Judge Rhodes, on May 6, approved the disclosure statement
explaining the City's fourth amended plan. Judge Rhodes will
commence the hearing on plan confirmation on July 24. Additional
confirmation hearing dates, as necessary, will be July 25, July
28-31, August 4-8, and August 11-15. A final pretrial conference
on plan confirmation is set for July 23.
DOLAN COMPANY: Objections to Plan Confirmation Filed
----------------------------------------------------
Creditor Elizabeth Thomas asks the Bankruptcy Court to deny
confirmation of The Dolan Company, et al.'s Joint Prepackaged Plan
of Reorganization; or to dismiss the Chapter 11 cases for bad
faith filing.
Ms. Thomas can be reached at:
Elizabeth Thomas
8202 Terra Valleu Lane
Tomball, TX 77375
Tel: (832) 813-9321
E-mail: Tethomas@aol.com
James E. Albertelli, P.A., doing business as Albertelli Law, a
creditor and party-in-interest, also objected to confirmation of
the Debtors' Joint Plan, stating that, among other things:
1. although its claims are impaired by the Plan, Albertelli Law
has been denied a vote to accept or reject it;
2. the Plan improperly seeks to extinguish Albertelli Law's
setoff and recoupment rights;
3. the imposition of third-party releases without consent is
improper; and
4. the Plan improperly extends the jurisdiction of the
Bankruptcy Court to matters exceeding its authority.
As reported in the Troubled Company Reporter on May 6, 2014, a key
hearing with respect to the Debtors' bankruptcy reorganization
plan has been rescheduled for May 27.
The Court was initially slated to convene a hearing on May 1 to
consider, among other things, the adequacy of the disclosure
statement explaining the Debtors' Plan and the confirmation of
such Plan.
As reported by the TCR, Roberta A. DeAngelis, the U.S. Trustee for
Region 3, and the Official Committee of Equity Security Holders
complain that the disclosure statement explaining The Dolan
Company, et al.'s Joint Prepackaged Plan of Reorganization does
not satisfy the adequate information standard of Section 1125 of
the Bankruptcy Code.
The U.S. Trustee specifically pointed out that the Disclosure
Statement lacked financial information and failed to disclose the
substantial increases in interest rates and fees paid under the
credit agreement in the months preceding the Petition Date.
The Equity Committee pointed out that the explanation of the
disclosure statement of the valuation approach used by the
Debtors' financial advisor, Peter J. Solomon Company, omits any of
the analytics customarily included in valuation analyses. The
Equity Committee also complained that it is not clear from the
text of the summary in the Disclosure Statement to what extent
PJSC incorporated other potential sources of value such as net
operating loss carry-forwards in the face amount of more than $150
million.
The Equity Committee also asked the Court to delay the Plan
hearing.
On April 24, the Debtors filed supplements to the Plan, including
Form of New Topco Operating Agreement, Form of the New Corporate
Governance Documents, Form of Exit Facility Credit Agreement, Form
of SVP Operating Agreement, and Form of Seller Note Assignment
Documents. Full-text copies of the Plan Supplement are available
at http://bankrupt.com/misc/DOLANplanex0424.pdf
The Star Tribune reported that secured lenders including Bayside
Capital voted on the plan, designed to reduce debt by about $100
million to $50 million by giving them all the new stock and at
least $50 million in new debt. Unsecured creditors didn't vote on
the plan because they will be paid in full, the company has said.
Existing common and preferred shareholders would be wiped out.
The report also noted that Dolan has asked the judge to disband
the committee, saying the group will cause "significant harm" and
"needless expenditures."
As reported in the TCR on April 2, 2014, the Plan provides a
comprehensive restructuring of Dolan's obligations, preserves the
going-concern value of the company's businesses, maximizes
recoveries available to all constituents, provides for an
equitable distribution to the company's stakeholders, and protects
the jobs of approximately 635 employees. More specifically, the
Plan provides, among other things, that:
-- In exchange for the company's prepetition lenders' claims on
account of the prepetition credit agreement, (1) the company and
the lenders will enter into a new senior secured "last-out" term
loan in the face amount of $50 million less the amount of any
Additional Loans and the amounts funded under the Reorganized
Dolan revolving facility as of the Effective Date, (2) the lenders
shall be issued 100% of the equity interests in New Topco (the
"Reorganized Equity"), subject to dilution for the interests
issued to DR LenderCo LLC ("Lender Newco"), and (3) such lenders
shall receive 100% of the interests in a special purpose vehicle
(the "Seller Notes SPV") established to administer and distribute
proceeds of the notes receivable issued as consideration under the
purchase agreements for Dolan APC LLC's former mortgage processing
services businesses, which notes receivable will be assigned the
Seller Notes SPV (the "SPV Interests");
-- In further exchange for the Company's prepetition lenders'
claims on account of the prepetition credit agreement, (1)
Reorganized Dolan LLC shall distribute its membership interest in
DiscoverReady to New Topco and (2) Lender Newco, which holds such
lenders' 9.9% membership interest in DiscoverReady, shall merge
into New Topco; upon consummation of these transactions, New Topco
shall become the 100% owner of DiscoverReady;
-- The Company and its prepetition lenders will enter into a
new senior secured "first-out" $15 million revolving loan
commitment (the "Reorganized Dolan Revolving Facility"), which
will fund the Debtors' exit from chapter 11 protection; provided,
that, at the option of the lenders holding the majority of the
debt outstanding under the Company's prepetition credit agreement,
borrowings under the Reorganized Dolan Revolving Facility on the
Effective Date may be limited to no more than $5 million so long
as the balance of the Exit Costs are funded with additional loans
issued on the same terms and conditions as the Reorganized Dolan
Term Loan (the "Additional Loans");
-- All outstanding and undisputed General Unsecured Claims
against the Company will be unimpaired and unaffected by the
restructuring and will be paid in full in cash on the later of (1)
the Effective Date of the Plan or (2) in the ordinary course of
business when such claims become due and owing;
-- At the option of the Company, with the consent of its
prepetition lenders, or the reorganized Company, as applicable,
Intercompany Claims and Interests shall be (1) left unaltered and
rendered unimpaired or (2) cancelled;
-- The Dolan Company's existing interests shall be cancelled;
-- Each of the Company's prepetition lenders has agreed to a
standstill to forbear from exercising any remedies against
DiscoverReady or Dolan DLN LLC under the prepetition credit
agreement during the pendency of the chapter 11 cases;
-- Each of the Company's prepetition lenders agrees to release
DiscoverReady from any and all claims arising under the
prepetition credit agreement upon the Effective Date; and
-- On the Effective Date, the Company's prepetition lenders
will provide DiscoverReady (on a pro rata basis in accordance with
the amount of claims arising under the prepetition credit
agreement beneficially held by such lender) a new $10 million
revolving credit facility.
A copy of the Prepackaged Chapter 11 Plan of Reorganization is
available for free at:
http://bankrupt.com/misc/Dolan_Co_Ch11_Plan.pdf
A copy of the Disclosure Statement is available for free at:
http://bankrupt.com/misc/Dolan_Co_Plan_Outline.pdf
About The Dolan Company
Minneapolis, Minn.-based The Dolan Company (OTC:DOLN) and its
subsidiaries provide professional services and business
information to the legal, financial and real estate sectors.
The Dolan Company and several affiliates sought Chapter 11
bankruptcy protection (Bankr. D. Del. Case Nos. 14-10614 to
14-10637) on March 23, 2014. Marc Kieselstein, P.C., Jeffrey D.
Pawlitz, Esq., and Joseph M. Graham, Esq., at Kirkland & Ellis
LLP, serve as the Debtors' counsel. Timothy P. Cairns, Esq.,
Laura Davis Jones, Esq., and Michael Seidl, Esq., at Pachulski
Stang Ziehl & Jones LLP, serve as local counsel.
Kevin Nystrom serves as the Company's chief restructuring officer.
Faegre Baker Daniels LLP serves as the Debtors' special counsel;
Peter J. Solomon Company serves as financial advisors; and
Kurtzman Carson Consultants, LLC, serves s noticing and balloting
agent. Deloitte Tax LLP serves as tax advisors. Zolfo Cooper LLC
also serves as advisors.
Dolan listed $236.2 million in total assets and $185.9 million in
total debts at Sept. 30, 2013. The petitions were signed by Vicki
J. Duncomb, authorized signatory.
Global investment management firm T. Rowe Price Associates, Inc.,
owns nearly 10% of the company's stock, while James Dolan owns
6.8%.
Dolan's e-discovery business, DiscoverReady LLC, did not file a
chapter 11 petition and its operations will not be affected by the
chapter 11 process.
On March 18, 2014, Dolan and its lenders and certain of its swap
counterparties executed a restructuring support agreement that
sets forth the material terms of the chapter 11 restructuring and
secures the support of the secured creditors for that process. In
accordance with the RSA, the Company commenced solicitation for
votes on the chapter 11 plan from secured creditors, the only
parties entitled to vote under the plan of reorganization.
The chapter 11 plan contemplates that the secured lenders will
become the owner of DiscoverReady and The Dolan Company upon the
completion of the restructuring process and each business will be
operated as separate and distinct entities. Investment funds
managed by Bayside Capital, Inc. will become the majority owner of
DiscoverReady and The Dolan Company. Bayside Capital is an
affiliate of H.I.G. Capital, a global private investment firm with
more than $15 billion of equity capital under management.
The chapter 11 plan process will allow the filing subsidiaries of
the Company to deleverage its capital structure by reducing its
projected secured debt obligations from approximately $170 million
to approximately $50 million. The RSA also secures support from
the lenders to refinance DiscoverReady's capital structure with a
$10 million unfunded secured revolving facility. The existing
preferred and common shares will be cancelled and will not receive
a recovery in the chapter 11 plan. After emergence from
bankruptcy, both The Dolan Company and DiscoverReady LLC will be
privately held companies.
The lenders are to provide a $10 million DIP loan to fund the cash
needs of the Company and DiscoverReady through the reorganization
process.
The Company expects to emerge from bankruptcy within two months.
Bayside Capital is represented in the case by:
AKIN GUMP STRAUSS HAUER & FELD LLP
Michael S. Stamer, Esq.
One Bryant Park
Bank of America Tower
New York, NY 10036-6745
Tel: 212-872-1025
Fax: 212-872-1002
- and -
Sarah Link Schultz, Esq.
1700 Pacific Avenue, Suite 4100
Dallas, TX 75201-4624
Tel: 214-969-4367
Fax: 214-969-4343
Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed five
members to the official committee of equity security holders. The
Equity Committee is represented by Neil B. Glassman, Esq.,
GianClaudio Finizio, Esq.; and Justin R. Alberto, Esq.; at BAYARD,
P.A., in Wilmington, Delaware; Robert J. Stark, Esq., at BROWN
RUDNICK LLP, in New York; and Steven B. Levine, Esq., at BROWN
RUDNICK LLP, in Boston, Massachusetts.
DOLAN COMPANY: Gets Final OK to Incur $10MM DIP Financing
---------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware, in a final
order dated April 17, 2014, authorized The Dolan Company, et al.,
to (i) obtain postpetition financing consisting of a secured,
priming, superpriority, revolving credit facility made available
to the Debtors in an aggregate principal amount of $10 million
with Bayside Capital, Inc.; (ii) utilize cash collateral in which
the prepetition secured parties assert an interest; and (iii)
grant priming liens and superpriority claims to the DIP lenders.
Bayside serves as administrative agent for and on behalf of itself
and a syndicate of other financial institutions, which syndicate
includes one or more funds managed or advised by Bayside Finance,
LLC, Bank of America, N.A., and Ellis Lake Master Fund, L.P. and
each of their designees.
As adequate protection from any diminution in value of the
lender's collateral, the Debtor will grant the DIP agent and
lender replacement liens and a superpriority administrative
expense claim status, subject to carve out on certain expenses.
Creditor and party-in-interest James F. Albertelli, P.A., doing
business as Albertelli Law, objected to the Debtor's motion,
asserting that the postpetition financing must only be approved if
its terms are not overreaching or excessively favorable to the
lender.
On April 15, Bayside, as (a) successor administrative agent and
significant lender under the Debtors' prepetition secured credit
agreement, dated Dec. 6, 2010, and (b) administrative agent and
significant lender under the Debtors' postpetition secured credit
agreement dated March 26, 2014, submitted a joinder to the
Debtors' reply to the objection of Albertelli Law, to the Debtors'
motion to incur postpetition financing and use cash collateral.
Bayside said that, among other things, the relief sought in the
objection is unremarkable as it merely recites rights provided by
the Bankruptcy Code with respect to the preservation of setoff and
recoupment rights.
The Debtors, in their response to the objection, stated that the
Albertelli Law does not object to the Debtors' proposed debtor-in-
financing as a whole, but rather raises discrete, perceived issue
regarding Albertelli Law's alleged set-off and recoupment rights.
About The Dolan Company
Minneapolis, Minn.-based The Dolan Company (OTC:DOLN) and its
subsidiaries provide professional services and business
information to the legal, financial and real estate sectors.
The Dolan Company and several affiliates sought Chapter 11
bankruptcy protection (Bankr. D. Del. Case Nos. 14-10614 to
14-10637) on March 23, 2014. The Company has said it expects to
emerge from bankruptcy within two months.
Judge Brendan L. Shannon oversees the cases. Marc Kieselstein,
P.C., Jeffrey D. Pawlitz, Esq., and Joseph M. Graham, Esq., at
Kirkland & Ellis LLP, serve as the Debtors' counsel. Timothy P.
Cairns, Esq., Laura Davis Jones, Esq., and Michael Seidl, Esq., at
Pachulski Stang Ziehl & Jones LLP, serve as local counsel.
Kevin Nystrom serves as the Company's chief restructuring officer.
Faegre Baker Daniels LLP serves as the Debtors' special counsel;
Peter J. Solomon Company serves as financial advisors; and
Kurtzman Carson Consultants, LLC, serves s noticing and balloting
agent. Deloitte Tax LLP serves as tax advisors. Zolfo Cooper LLC
also serves as advisors.
Dolan listed $236.2 million in total assets and $185.9 million in
total debts at Sept. 30, 2013. The petitions were signed by Vicki
J. Duncomb, authorized signatory.
Global investment management firm T. Rowe Price Associates, Inc.,
owns nearly 10% of the company's stock, while James Dolan owns
6.8%.
Dolan's e-discovery business, DiscoverReady LLC, did not file a
chapter 11 petition and its operations will not be affected by the
chapter 11 process.
On March 18, 2014, Dolan and its lenders and certain of its swap
counterparties executed a restructuring support agreement that
sets forth the material terms of the chapter 11 restructuring and
secures the support of the secured creditors for that process. In
accordance with the RSA, the Company commenced solicitation for
votes on the chapter 11 plan from secured creditors, the only
parties entitled to vote under the plan of reorganization.
The chapter 11 plan contemplates that the secured lenders will
become the owner of DiscoverReady and The Dolan Company upon the
completion of the restructuring process and each business will be
operated as separate and distinct entities. Investment funds
managed by Bayside Capital, Inc. will become the majority owner of
DiscoverReady and The Dolan Company. Bayside Capital is an
affiliate of H.I.G. Capital, a global private investment firm with
more than $15 billion of equity capital under management.
The chapter 11 plan process will allow the filing subsidiaries of
the Company to deleverage its capital structure by reducing its
projected secured debt obligations from approximately $170 million
to approximately $50 million. The RSA also secures support from
the lenders to refinance DiscoverReady's capital structure with a
$10 million unfunded secured revolving facility. The existing
preferred and common shares will be cancelled and will not receive
a recovery in the chapter 11 plan. After emergence from
bankruptcy, both The Dolan Company and DiscoverReady LLC will be
privately held companies.
The lenders are to provide a $10 million DIP loan to fund the cash
needs of the Company and DiscoverReady through the reorganization
process.
Bayside Capital is represented in the case by Akin Gump Strauss
Hauer & Feld LLP's Michael S. Stamer, Esq., and Sarah Link
Schultz, Esq.
An Official Committee of Equity Security Holders is represented by
Neil B. Glassman, Esq., GianClaudio Finizio, Esq., and Justin R.
Alberto, Esq., at Bayard, P.A., in Wilmington, Delaware; Robert J.
Stark, Esq., at Brown Rudnick LLP, in New York; and Steven B.
Levine, Esq., at Brown Rudnick LLP, in Boston, Massachusetts.
DOLAN COMPANY: Kirkland, Pachulski Approved as Bankr. Lawyers
-------------------------------------------------------------
The Bankruptcy Court authorized the employment of Kirkland & Ellis
LLP as counsel for The Dolan Company, et al.
As reported in the Troubled Company Reporter on April 3, 2014, K&E
is expected to, among other things, advise the Debtors with
respect to their powers and duties as debtors in possession in the
continued management and operation of their businesses and
properties.
K&E's current hourly rates for matters related to the Chapter 11
cases range as follows:
Partners $665 to $1,225
Of Counsel $415 to $1,195
Associates $450 to $835
Paraprofessionals $170 to $355
The following professionals presently are expected to have primary
responsibility for providing services to the Debtors:
Marc Kieselstein, P.C. $1,125
Jeffrey D. Pawlitz, Esq. $775
Joseph M. Graham, Esq. $595
The firm will also be reimbursed for any necessary out-of-pocket
expenses.
Mr. Kieselstein, a partner at Kirkland & Ellis LLP, in Chicago,
Illinois, assures the Court that his firm is a "disinterested
person" as the term is defined in Section 101(14) of the
Bankruptcy Code and does not represent any interest adverse to the
Debtors and their estates. Mr. Kieselstein discloses that Vista
Equity Partners is the portfolio parent to both ACTIVE Network, a
contract counterparty to the Debtors, and Sage Software, Inc., one
of the Debtors' top unsecured creditors. Vista Equity Partners
represented more than 1% of K&E's fee receipts for the 12-month
period ending Feb. 28, 2014.
Mr. Kieselstein said that on Feb. 5, 2014, the Debtors paid
$150,000 to K&E as a classic retainer and the Debtors subsequently
made additional classic retainer payments to K&E totaling
$1,180,679 in the aggregate.
Vicki Duncomb, vice president and chief financial officer, of the
Company, relates that the Debtors utilized a review process to
assess potential counsel based on their expertise in the relevant
legal issues and in similar proceedings. Using that review
process, the Debtors' chief executive officer, chief operating
officer, and general counsel interviewed K&E and recommended that
the Debtors employ the firm as bankruptcy counsel.
In a separately ruling, the Court also authorized the employment
of Pachulski Stang Ziehl and Jones LLP as the Debtors' co-counsel.
As reported in the Troubled Company Reporter on April 3, 2014,
PSZJ is expected to, among other things, provide legal advice
regarding local rules, practices, and procedures.
The principal attorneys and paralegals presently designated to
represent the Debtors and their current standard hourly rates are:
Laura Davis Jones, Esq. $995
Michael R. Seidl, Esq. $645
Timothy P. Cairns, Esq. $645
Margaret L. McGee, Esq. $295
The firm will also be reimbursed for any necessary out-of-pocket
expenses.
Ms. Jones, a partner in the law firm of Pachulski Stang Ziehl &
Jones LLP, in Wilmington, Delaware, assures the Court that his
firm is a "disinterested person" as the term is defined in Section
101(14) of the Bankruptcy Code and does not represent any interest
adverse to the Debtors and their estates. Ms. Jones discloses
that Great American Insurance Company is an insurer of the
Debtors. The firm currently represents Great American Insurance
and certain other insurers in a California state court litigation
matter that is unrelated to the Debtors and the Chapter 11 cases.
The firm has received payments from the Debtors during the year
prior to the Petition Date in the amount of $79,122, including the
Debtors' aggregate filing fees for the Chapter 11 cases, in
connection with the preparation of initial documents and the
prepetition representation of the Debtors. The firm represented
the client in the 12-month period prepetition. Ms. Jones said the
billing rates and material financial terms for the postpetition
period remain the same as of the prepetition period.
Pursuant to the Appendix B Guidelines for Reviewing Applications
for Compensation and Reimbursement of Expenses, Ms. Jones said the
firm did not agree to any variations from, or alternatives to,
your standard or customary billing arrangements for the
engagement.
Vicki Duncomb, vice president and chief financial officer of The
Dolan Company, relates that PSZ&J has informed the Debtors that
its rates are consistent between bankruptcy representations,
including related transactional and litigation services. Ms.
Duncomb also states that the firm does not have different billing
rates and terms for non-bankruptcy engagements that can be
compared to the billing rates and terms for the Debtors'
engagement of PSZ&J.
About The Dolan Company
Minneapolis, Minn.-based The Dolan Company (OTC:DOLN) and its
subsidiaries provide professional services and business
information to the legal, financial and real estate sectors.
The Dolan Company and several affiliates sought Chapter 11
bankruptcy protection (Bankr. D. Del. Case Nos. 14-10614 to
14-10637) on March 23, 2014. The Company has said it expects to
emerge from bankruptcy within two months.
Judge Brendan L. Shannon oversees the cases. Marc Kieselstein,
P.C., Jeffrey D. Pawlitz, Esq., and Joseph M. Graham, Esq., at
Kirkland & Ellis LLP, serve as the Debtors' counsel. Timothy P.
Cairns, Esq., Laura Davis Jones, Esq., and Michael Seidl, Esq., at
Pachulski Stang Ziehl & Jones LLP, serve as local counsel.
Kevin Nystrom serves as the Company's chief restructuring officer.
Faegre Baker Daniels LLP serves as the Debtors' special counsel;
Peter J. Solomon Company serves as financial advisors; and
Kurtzman Carson Consultants, LLC, serves s noticing and balloting
agent. Deloitte Tax LLP serves as tax advisors. Zolfo Cooper LLC
also serves as advisors.
Dolan listed $236.2 million in total assets and $185.9 million in
total debts at Sept. 30, 2013. The petitions were signed by Vicki
J. Duncomb, authorized signatory.
Global investment management firm T. Rowe Price Associates, Inc.,
owns nearly 10% of the company's stock, while James Dolan owns
6.8%.
Dolan's e-discovery business, DiscoverReady LLC, did not file a
chapter 11 petition and its operations will not be affected by the
chapter 11 process.
On March 18, 2014, Dolan and its lenders and certain of its swap
counterparties executed a restructuring support agreement that
sets forth the material terms of the chapter 11 restructuring and
secures the support of the secured creditors for that process. In
accordance with the RSA, the Company commenced solicitation for
votes on the chapter 11 plan from secured creditors, the only
parties entitled to vote under the plan of reorganization.
The chapter 11 plan contemplates that the secured lenders will
become the owner of DiscoverReady and The Dolan Company upon the
completion of the restructuring process and each business will be
operated as separate and distinct entities. Investment funds
managed by Bayside Capital, Inc. will become the majority owner of
DiscoverReady and The Dolan Company. Bayside Capital is an
affiliate of H.I.G. Capital, a global private investment firm with
more than $15 billion of equity capital under management.
The chapter 11 plan process will allow the filing subsidiaries of
the Company to deleverage its capital structure by reducing its
projected secured debt obligations from approximately $170 million
to approximately $50 million. The RSA also secures support from
the lenders to refinance DiscoverReady's capital structure with a
$10 million unfunded secured revolving facility. The existing
preferred and common shares will be cancelled and will not receive
a recovery in the chapter 11 plan. After emergence from
bankruptcy, both The Dolan Company and DiscoverReady LLC will be
privately held companies.
The lenders are to provide a $10 million DIP loan to fund the cash
needs of the Company and DiscoverReady through the reorganization
process.
Bayside Capital is represented in the case by Akin Gump Strauss
Hauer & Feld LLP's Michael S. Stamer, Esq., and Sarah Link
Schultz, Esq.
An Official Committee of Equity Security Holders is represented by
Neil B. Glassman, Esq., GianClaudio Finizio, Esq., and Justin R.
Alberto, Esq., at Bayard, P.A., in Wilmington, Delaware; Robert J.
Stark, Esq., at Brown Rudnick LLP, in New York; and Steven B.
Levine, Esq., at Brown Rudnick LLP, in Boston, Massachusetts.
DOLAN COMPANY: Wants Committee of Equity Holders Disbanded
----------------------------------------------------------
The Dolan Company, et al., requested that the Bankruptcy Court
disband the Official Committee of Equity Holders appointed by
Roberta A. DeAngelis, U.S. Trustee for Region 3, on April 23,
2014.
According to the Debtor, the appointment of an official committee
is an extraordinary remedy which is granted only in rare occasions
and wholly unwarranted in the cases given the hopeless insolvency
of the Debtors' estates.
In a separate filing, Bayside Capital, Inc. and its affiliates as
(a) successor administrative agent and significant lender under
the Debtors' prepetition secured credit agreement, dated Dec. 6,
2010, and (b) administrative agent and significant lender under
the Debtors' postpetition secured credit agreement, dated
March 26, 2014, by and through their undersigned counsel,
submitted a joinder to the Debtors' motion to disband committee.
Bayside asserted that the U.S. Trustee's appointment of an equity
committee rests primarily, if not entirely, upon historical
financial statements showing that the book value of the Debtors'
assets exceeded their liabilities. Bayside said the Debtors are
hopelessly insolvent and the equity committee must be disbanded.
As reported in the Troubled Company Reporter on April 28, 2014,
the U.S. Trustee appointed five members to the official committee
of equity security holders namely: (1) Leap Tide Capital
Management; (2) Alexandre Zyngier; (3) Greywolf Capital
Management; (4) Severn River Capital Management; and (5) DS Fund I
LLC.
About The Dolan Company
Minneapolis, Minn.-based The Dolan Company (OTC:DOLN) and its
subsidiaries provide professional services and business
information to the legal, financial and real estate sectors.
The Dolan Company and several affiliates sought Chapter 11
bankruptcy protection (Bankr. D. Del. Case Nos. 14-10614 to
14-10637) on March 23, 2014. The Company has said it expects to
emerge from bankruptcy within two months.
Judge Brendan L. Shannon oversees the cases. Marc Kieselstein,
P.C., Jeffrey D. Pawlitz, Esq., and Joseph M. Graham, Esq., at
Kirkland & Ellis LLP, serve as the Debtors' counsel. Timothy P.
Cairns, Esq., Laura Davis Jones, Esq., and Michael Seidl, Esq., at
Pachulski Stang Ziehl & Jones LLP, serve as local counsel.
Kevin Nystrom serves as the Company's chief restructuring officer.
Faegre Baker Daniels LLP serves as the Debtors' special counsel;
Peter J. Solomon Company serves as financial advisors; and
Kurtzman Carson Consultants, LLC, serves s noticing and balloting
agent. Deloitte Tax LLP serves as tax advisors. Zolfo Cooper LLC
also serves as advisors.
Dolan listed $236.2 million in total assets and $185.9 million in
total debts at Sept. 30, 2013. The petitions were signed by Vicki
J. Duncomb, authorized signatory.
Global investment management firm T. Rowe Price Associates, Inc.,
owns nearly 10% of the company's stock, while James Dolan owns
6.8%.
Dolan's e-discovery business, DiscoverReady LLC, did not file a
chapter 11 petition and its operations will not be affected by the
chapter 11 process.
On March 18, 2014, Dolan and its lenders and certain of its swap
counterparties executed a restructuring support agreement that
sets forth the material terms of the chapter 11 restructuring and
secures the support of the secured creditors for that process. In
accordance with the RSA, the Company commenced solicitation for
votes on the chapter 11 plan from secured creditors, the only
parties entitled to vote under the plan of reorganization.
The chapter 11 plan contemplates that the secured lenders will
become the owner of DiscoverReady and The Dolan Company upon the
completion of the restructuring process and each business will be
operated as separate and distinct entities. Investment funds
managed by Bayside Capital, Inc. will become the majority owner of
DiscoverReady and The Dolan Company. Bayside Capital is an
affiliate of H.I.G. Capital, a global private investment firm with
more than $15 billion of equity capital under management.
The chapter 11 plan process will allow the filing subsidiaries of
the Company to deleverage its capital structure by reducing its
projected secured debt obligations from approximately $170 million
to approximately $50 million. The RSA also secures support from
the lenders to refinance DiscoverReady's capital structure with a
$10 million unfunded secured revolving facility. The existing
preferred and common shares will be cancelled and will not receive
a recovery in the chapter 11 plan. After emergence from
bankruptcy, both The Dolan Company and DiscoverReady LLC will be
privately held companies.
The lenders are to provide a $10 million DIP loan to fund the cash
needs of the Company and DiscoverReady through the reorganization
process.
Bayside Capital is represented in the case by Akin Gump Strauss
Hauer & Feld LLP's Michael S. Stamer, Esq., and Sarah Link
Schultz, Esq.
An Official Committee of Equity Security Holders is represented by
Neil B. Glassman, Esq., GianClaudio Finizio, Esq., and Justin R.
Alberto, Esq., at Bayard, P.A., in Wilmington, Delaware; Robert J.
Stark, Esq., at Brown Rudnick LLP, in New York; and Steven B.
Levine, Esq., at Brown Rudnick LLP, in Boston, Massachusetts.
DOLPHIN DIGITAL: Late 10-K Shows $3.39-Mil. Loss in 2012
--------------------------------------------------------
Dolphin Digital Media, Inc., filed with the U.S. Securities and
Exchange Commission on Apr. 23, 2014, its annual report on Form
10-K for the year ended Dec. 31, 2012.
Crowe Horwath LLP expressed substantial doubt about the Company's
ability to continue as a going concern, citing that the Company
has incurred net losses, negative cash flows from operations and
does not have sufficient working capital.
The Company reported a net loss of $3.39 million on $3.86 million
of revenues in 2012, compared with a net loss of $1.23 million on
$472,824 of revenues in 2011.
The Company's balance sheet at Dec. 31, 2012, showed $1.57 million
in total assets, $6.01 million in total liabilities and a
stockholders' deficit of $4.45 million.
A copy of the Form 10-K is available at:
http://is.gd/q0XdKJ
About Dolphin Digital
Coral Gables, Florida-based Dolphin Digital Media, Inc., is
dedicated to the twin causes of online safety for children and
high quality digital entertainment. By creating and managing
child-friendly social networking websites utilizing state-of the-
art fingerprint identification technology, Dolphin Digital Media,
Inc. has taken an industry-leading position with respect to
internet safety, as well as digital entertainment.
The Company reported a net loss of $1.23 million in 2011, compared
with a net loss of $5.63 million in 2010. The Company's balance
sheet at June 30, 2012, showed $2.55 million in total assets,
$5.92 million in total liabilities, all current, and a $3.37
million total stockholders' deficit.
DORAL FINANCIAL: S&P Lowers ICR to 'CC' on Capital Breach
---------------------------------------------------------
Standard & Poor's Ratings Services said it lowered its issuer
credit rating on Doral Financial Corp. to 'CC' from 'CCC-' and
placed the rating on CreditWatch with negative implications.
"Our downgrade of Doral reflects the institution's weakened
capital position to the point that it has breached minimum
regulatory capital requirements under its current consent order
with the FDIC," said Standard & Poor's credit analyst Sunsierre
Newsome.
The FDIC advised Doral Bank that it may no longer include in its
calculation of its Tier 1 capital some or all of the tax
receivables from the government of Puerto Rico. These receivables
accounted for nearly 43% of the bank's $679 million of Tier 1
capital as of Dec. 31, 2013. "Because the institution's capital
fell below its minimum regulatory capital requirements, the rating
is now 'CC', consistent with our criteria," said Ms. Newsome.
S&P revised Doral's capital and earnings score to "very weak" from
"weak" (as S&P's criteria describe the terms). Even if Doral
develops a capital plan that receives regulatory approval, the
bank may not be able to raise capital given its much weakened
stock price and financial condition.
Doral Bank entered into a consent order with the FDIC on Aug. 8,
2012. Under the consent order, if the bank's Tier 1 capital ratio
falls below the minimum requirements, the bank is required to
either increase capital in an amount sufficient to comply with the
capital ratios in an approved capital plan or submit to the FDIC a
contingency plan for the sale, merger, or liquidation of Doral
Bank in the event the primary sources of capital are not available
within 120 days. In addition, the FDIC indicated that it will not
consider granting Doral Bank waivers to accept brokered deposits.
S&P believes that Doral's inability to accept and roll over
brokered deposits hurts its liquidity position at a time when
options may be limited, and as a result S&P has changed its
assessment of the bank's liquidity to "weak" from "adequate."
Furthermore, without regulatory consent, Doral may have difficulty
implementing a strategy that includes selling assets, which may
further hurt its financial condition. Doral's currently
vulnerable financial position and depressed stock price could mean
that the bank faces significant challenges in trying to raise
capital.
"Our ratings reflect our view that the bank's difficulties could
result in additional regulatory intervention, and we expect
default to be a virtual certainty," said Ms. Newsome.
"We are placing the ratings on CreditWatch with negative
implications. During the CreditWatch period, we will monitor
whether the company is able to obtain regulatory approval for its
revised capital plan and execute on the plan to improve its
capital ratios. We believe it might be difficult to successfully
execute on a plan to raise capital given the company's residential
mortgage-heavy asset base and depressed stock price. Conversely,
if the bank does obtain approval from regulators for its revised
capital plan and is able to raise its capital above the regulatory
minimum by more than 100 basis points, we could remove the rating
from CreditWatch. The company has 120 days to submit a revised
capital plan, which is somewhat longer than our usual 90-day
CreditWatch time horizon. Nonetheless, if the company has not
submitted and obtained regulatory approval for its revised capital
plan within our 90-day period, we could extend our CreditWatch
assessment," S&P noted.
DYNASIL CORP: Closes $4 Million Revolving Line of Credit
---------------------------------------------------------
Dynasil Corporation of America entered into an agreement with
Middlesex Savings Bank to establish a revolving line of credit of
up to $4 million, subject to availability restrictions. Upon the
closing of the loan, the Company repaid in full the approximately
$1.8 million owed Santander Bank and the $600,000 of accrued
interest due Massachusetts Capital Resource Company, its
subordinated lender. As a result, as of May 1, 2014, the Company
has total indebtedness outstanding consisting $2.4 million newly
drawn senior debt owed to Middlesex Savings Bank and approximately
$3 million of existing subordinated debt owed to Massachusetts
Capital Resource Company due July 2017.
The Loan Agreement provides that the revolving line of credit
expires May 2017 and is secured by substantially all the Company's
assets. Borrowing availability under the revolving line of credit
is determined monthly based on eligible billed and unbilled
accounts receivable and inventory. The Company is required to
maintain compliance with a debt to service coverage ratio. The
interest rate on the loan is equal to the Prime Rate, but in no
event less than 3.25 percent.
"We are pleased to have completed this financing with Middlesex
Savings Bank, which will allow us to move forward in a positive
relationship with our banking partners," said Peter Sulick,
president and chief executive officer of Dynasil. "With our
improved financial condition, we look forward to future
opportunities to grow Dynasil, both organically and through
acquisitions." Additional details of the new Middlesex Savings
Bank Agreement is available for free at http://is.gd/t4aSd2
About Dynasil
Watertown, Mass.-based Dynasil Corporation of America (NASDAQ:
DYSL) -- http://www.dynasil.com/-- develops and manufactures
detection and analysis technology, precision instruments and
optical components for the homeland security, medical and
industrial markets.
As of Sept. 30, 2013, the Dynasil had $26.67 million in total
assets, $16.03 million in total liabilities and $10.64 million in
total stockholders' equity. The Company incurred a net loss of
$8.72 million for the year ended Sept. 30, 2013, as compared with
a net loss of $4.30 million for the year ended Sept. 30, 2012.
Going Concern/Bankruptcy Warning
McGladrey LLP, in Boston, Massachusetts, issued a "going concern"
qualification on the consolidated financial statements for the
year ended Sept. 30, 2013. The independent auditors noted that
the Company is in default with the financial covenants set forth
in the terms of its outstanding loan agreements (and may enter
into a forbearance arrangement with its lenders) and has sustained
substantial losses from operations for the years ended Sept. 30,
2013 and 2012. These factors, among others, raise substantial
doubt about the Company's ability to continue as a going concern.
"If our lenders were to accelerate our debt payments, our assets
may not be sufficient to fully repay the debt and we may not be
able to obtain capital from other sources at favorable terms or at
all. If additional funding is required, this funding may not be
available on favorable terms, if at all, or without potentially
very substantial dilution to our stockholders. If we do not raise
the necessary funds, we may need to curtail or cease our
operations, sell certain assets and/or file for bankruptcy, which
would have a material adverse effect on our financial condition
and results of operations," the Company said in its annual report
for the year ended Sept. 30, 2013.
EASTERN HILLS: Wants July 2 Plan Approval Deadline
--------------------------------------------------
Eastern Hills Country Club is asking the bankruptcy court to
extend by 30 days the June 1 deadline to confirm its proposed
Chapter 11 plan.
On April 15, 2014, the Court granted the motion filed by Chapter
11 Trustee Robert Yaquinto to sell the principal asset of EHCC, a
golf course located in Garland, Texas. The order approving the
sale to the highest bidder and authorizing closing of back-up bids
was entered on or about April 18, 2014. The proceeds from the
sale will be approximately $3,800,000 after payment of closing
costs, a break up fee and realtor commissions. According to the
Debtor, these proceeds of the sale exceed by approximately
$1,500,000 the amounts required to pay all priority, secured, and
unsecured claims against EHCC in full and will allow for the
return of money to insiders of EHCC for advances made to EHCC or
distribution to the equity holders in EHCC.
On April 17, 2014, within the deadlines imposed by 11 U.S.C. Sec.
1121(e)(2), the Debtor filed its proposed Plan Of Reorganization
and explanatory Disclosure Statement.
Under 11 U.S.C. Sec. 1129(e) the 45-day deadline for confirmation
of the Plan expires on June 1, 2014.
Richard W. Ward, Esq., the Debtor's counsel, explains that based
on the request of the United States Trustee for an expedited
hearing on the conditional approval of the Disclosure Statement
and the personal schedule of Yaquinto who will be out of town from
the last week of May, 2014, to approximately June 9, 2014, an
extension of the 45-day deadline contained in 11 U.S.C. Sec.
1129(e) is necessary to allow a hearing on the confirmation of the
Plan.
The Debtor says that an extension of the time for the confirmation
hearing through July 2, 2014, will allow EHCC an opportunity to
present the Plan for confirmation before the expiration of the
deadline for the confirmation of the Plan.
An expedited hearing on the motion is slated for May 12, 2014 at
2:30 p.m.
About Eastern Hills
Eastern Hills Country Club filed a bare-bones Chapter 11 petition
(Bankr. N.D. Tex. Case No. 13-33123) in Dallas on June 21, 2013.
The Debtor estimated at least $10 million in assets and less than
$1 million in liabilities. The petition was signed by David
Harvey as president. Richard W. Ward, Esq., serves as the
Debtor's counsel.
According to Web site, http://www.easternhillscc.com,the Eastern
Hills Country Club in Garland Texas, was established in 1954 and
boasts a Ralph Plummer designed 18-hole golf course, 5,000 sq.
foot putting green, practice facility, and driving range. The
golf course has been home of the Texas Womens Open since 2011.
Judge Stacey G. Jernigan presides over the bankruptcy case.
Robert Yaquinto, Jr., has been named the Chapter 11 trustee of
Eastern Hills Country Club. He is represented by his firm,
Sherman & Yaquinto, LLP.
On April 15, 2014, the Court granted the trustee approval to sell
the principal asset of the Debtor.
EASTERN HILLS: Files Full-Payment Chapter 11 Plan
-------------------------------------------------
Eastern Hills Country Club in mid-April filed a proposed Chapter
11 plan that contemplates full payment to creditors from the
proceeds of the sale of its golf course.
Chapter 11 Trustee Robert Yaquinto, Jr., on April 15 won approval
from the Court to sell the principal asset of the Debtor for a
gross price of $4,050,000. The Debtor expects closing of the sale
before the confirmation hearing.
According to the Debtor, when the sale of the property is
consummated, virtually all of the assets of the Debtor will have
been reduced to cash. The net proceeds of the sale, after
deducting the real estate commission, the break up fee and the
costs of sale will be approximately $3,700,000.
The order authorizing the sale authorizes the payment of the
secured claim of the Internal Revenue Service (approximately
$475,000); the secured claim of the State of Texas ($60,000); the
secured claim of Tax Ease Funding, LLC ($171,000); and ad valorem
taxes ($105,000). After payments of these amounts the estate of
the Debtor will have approximately $2,800,000.
According to the Debtor, under its Plan of Merger, person who are
Existing EHCC Equity Members are entitled to receive $500,000.
The Debtor does not dispute this amount and anticipates that
$500,000 will be interpled into the registry of the Bankruptcy
Court for the Northern District of Texas. The Debtor will dispute
a claim of the Existing EHCC Equity Members for an additional
$150,000 in attorneys' fees, because the Debtor has never disputed
the payment of the $500,000.
After paying all of these amounts the Debtor anticipates
approximately $2,300,000 in cash to pay creditors, with any
residual monies distributed to the Debtor.
The Debtor or its assigns will retain all causes of action held by
the Debtor and such causes of action will be preserved.
Copies of the Plan and Disclosure Statement are available for free
at:
http://bankrupt.com/misc/Eastern_Hills_Disc_Statement.pdf
http://bankrupt.com/misc/Eastern_Hills_Ch11_Plan.pdf
About Eastern Hills
Eastern Hills Country Club filed a bare-bones Chapter 11 petition
(Bankr. N.D. Tex. Case No. 13-33123) in Dallas on June 21, 2013.
The Debtor estimated at least $10 million in assets and less than
$1 million in liabilities. The petition was signed by David
Harvey as president. Richard W. Ward, Esq., serves as the
Debtor's counsel.
The Debtor is a not for profit corporation that was the survivor
by a 2006 merger with a for profit corporation Eastern Hills
Tennis, Yacht and Golf Club, Inc. The Debtor --
http://www.easternhillscc.com-- owned a Ralph Plummer designed
18-hole golf course, 5,000 sq. foot putting green, practice
facility, and driving range. The golf course has been home of the
Texas Womens Open since 2011.
Judge Stacey G. Jernigan presides over the bankruptcy case.
Robert Yaquinto, Jr., has been named the Chapter 11 trustee of
Eastern Hills Country Club. He is represented by his firm,
Sherman & Yaquinto, LLP.
On April 15, 2014, the Court granted the trustee approval to sell
the principal asset of the Debtor.
EASTMAN KODAK: Agrees To Drop Shutterfly's Noncompete Lawsuit
-------------------------------------------------------------
Law360 reported that Shutterfly Inc. and Eastman Kodak Co. have
"consensually resolved" their lawsuit claiming Kodak's recently
launched online photo service violated a noncompete agreement the
companies signed when Shutterfly bought Kodak's Web gallery
business, according to documents filed in New York bankruptcy
court.
According to the report, nodetails of the resolution agreement
were included in the one-page document, in which attorneys for
both companies said the suit was dismissed with prejudice.
Filed by Shutterfly, the complaint targeted Kodak's My Kodak
Moments App, which the photo-sharing website claimed breached a
noncompete provision of an agreement signed when it acquired
Kodak's Web business Kodak Gallery for $23.8 million in March
2012, the report related. The provision barred Kodak from
launching any similar service for three years, according to the
suit.
The adversary suit was filed in March 2013, as Kodak worked its
way toward an exit from its Chapter 11 bankruptcy case, the report
further related. It finally emerged from the case five months
later, but only after selling off a substantial chunk of its
intellectual property assets and narrowing its focus to commercial
printing, leaving it just a fraction of the photography giant it
once represented.
The case is Shutterfly Inc. v. Kodak Imaging Networks Inc. et al.,
case number 1:13-ap-01310, in the U.S. Bankruptcy Court for the
Southern District of New York.
About Eastman Kodak
Rochester, New York-based Eastman Kodak Company and its U.S.
subsidiaries on Jan. 19, 2012, filed voluntarily Chapter 11
petitions (Bankr. S.D.N.Y. Lead Case No. 12-10202) in Manhattan.
Subsidiaries outside of the U.S. were not included in the filing
and are expected to continue to operate as usual.
Kodak, founded in 1880 by George Eastman, was once the world's
leading producer of film and cameras. Kodak sought bankruptcy
protection amid near-term liquidity issues brought about by
steeper-than-expected declines in Kodak's historically profitable
traditional businesses, and cash flow from the licensing and sale
of intellectual property being delayed due to litigation tactics
employed by a small number of infringing technology companies
with strong balance sheets and an awareness of Kodak's liquidity
challenges.
In recent years, Kodak had been working to transform itself from
a business primarily based on film and consumer photography to a
smaller business with a digital growth strategy focused on the
commercialization of proprietary digital imaging and printing
technologies. Kodak has 8,900 patent and trademark registrations
and applications in the United States, as well as 13,100 foreign
patents and trademark registrations or pending registration in
roughly 160 countries.
Attorneys at Sullivan & Cromwell LLP and Young Conaway Stargatt &
Taylor, LLP, serve as counsel to the Debtors. FTI Consulting,
Inc., is the restructuring advisor. Lazard Freres & Co. LLC, is
the investment banker. Kurtzman Carson Consultants LLC is the
claims agent.
The Official Committee of Unsecured Creditors has tapped Milbank,
Tweed, Hadley & McCloy LLP, as its bankruptcy counsel.
Michael S. Stamer, Esq., David H. Botter, Esq., and Abid Qureshi,
Esq., at Akin Gump Strauss Hauer & Feld LLP, represent the
Unofficial Second Lien Noteholders Committee.
The Retirees Committee has hired Haskell Slaughter Young &
Rediker, LLC, and Arent Fox, LLC as Co-Counsel; Zolfo Cooper,
LLC, as Bankruptcy Consultants and Financial Advisors; and the
Segal Company, as Actuarial Advisors.
Robert J. Stark, Esq., Andrew Dash, Esq., and Neal A. D'Amato,
Esq., at Brown Rudnick LLP, represent Greywolf Capital Partners
II; Greywolf Capital Overseas Master Fund; Richard Katz, Kenneth
S. Grossman; and Paul Martin.
Kodak completed the $527 million sale of digital-imaging
technology on Feb. 1, 2013. Kodak intends to reorganize by
focusing on the commercial printing business.
At the end of April 2013, Kodak filed a reorganization plan
offering 85 percent of the stock to holders of the remaining
$375 million in second-lien notes. The other 15 percent is for
unsecured creditors with $2.7 billion in claims and retirees who
have a $635 million claim from the loss of retirement benefits.
U.S. Bankruptcy Judge Allan Gropper confirmed the plan on August
20, 2013. Kodak and its affiliated debtors officially emerged
from bankruptcy protection on Sept. 3, 2013.
Mark S. Burgess, Matt Doheny, John A. Janitz, George Karfunkel,
Jason New and Derek Smith became members of Kodak's new board of
directors as of Sept. 3, 2013. Existing directors James V.
Continenza, William G. Parrett and Antonio M. Perez will continue
their service as members of the new board.
ENERGY FUTURE: Moves Ahead on Bankruptcy Debt Exchange Offer
------------------------------------------------------------
Peg Brickley, writing for The Wall Street Journal, reported that
Energy Future Holdings Corp. has launched part of a multibillion-
dollar financing effort designed to bail out one of the two major
lines of business caught up in its Chapter 11 bankruptcy, Energy
Future Intermediate Holding.
According to the report, the Texas power seller's subsidiary is
offering its first-lien lenders a chance to swap their old debt,
nearly $4 billion, for new debt in the form of a bankruptcy loan.
Energy Future Intermediate owns 80% of Oncor, a Texas transmission
business that is not involved in the bankruptcy.
As of last week, however, the Dallas company was having trouble
rounding up support for the exchange offer, which is linked to one
of three massive bankruptcy finance packages tied to the effort to
clean up the balance sheet of parent Energy Future, the report
related.
Falling energy prices and an excess of debt from a leveraged
buyout pushed Energy Future into bankruptcy April 29, the report
further related. It has deals in hand with some, but not all, of
its major creditors and appears to be in for a fight with many of
the investors in the $7.7 billion in funded debt riding on Energy
Future Intermediate.
A spokesman for Energy Future wasn't able to discuss the prospects
for the renewed effort to address the subsidiary's debt, the
Journal said. Papers mailed out on May 6 soliciting investors in
the Energy Future Intermediate first-lien debt say the exchange
offer is set to expire June 6. The bankruptcy loan is slated for
court review June 5.
About Energy Future Holdings, fka TXU Corp.
Energy Future Holdings Corp., formerly known as TXU Corp., is a
privately held diversified energy holding company with a portfolio
of competitive and regulated energy businesses in Texas. Oncor,
an 80 percent-owned entity within the EFH group, is the largest
regulated transmission and distribution utility in Texas.
The Company delivers electricity to roughly three million delivery
points in and around Dallas-Fort Worth. EFH Corp. was created in
October 2007 in a $45 billion leverage buyout of Texas power
company TXU in a deal led by private-equity companies Kohlberg
Kravis Roberts & Co. and TPG Inc.
On April 29, 2014, Energy Future Holdings and 70 affiliated
companies sought Chapter 11 bankruptcy protection (Bankr. D. Del.
Lead Case No. 14-10979) after reaching a deal with some key
financial stakeholders to keep its businesses operating while
reducing its roughly $40 billion in debt.
The Debtors' cases have been assigned to Judge Christopher S.
Sontchi (CSS). The Debtors are seeking to have their cases
jointly administered for procedural purposes.
As of Dec. 31, 2013, EFH Corp. reported total assets of $36.4
billion in book value and total liabilities of $49.7 billion. The
Debtors have $42 billion of funded indebtedness.
EFH's legal advisor for the Chapter 11 proceedings is Kirkland &
Ellis LLP, its financial advisor is Evercore Partners and its
restructuring advisor is Alvarez & Marsal. The TCEH first lien
lenders supporting the restructuring agreement are represented by
Paul, Weiss, Rifkind, Wharton & Garrison, LLP as legal advisor,
and Millstein & Co., LLC, as financial advisor. The EFIH
unsecured creditors supporting the restructuring agreement are
represented by Akin Gump Strauss Hauer & Feld LLP, as legal
advisor, and Centerview Partners, as financial advisor. The EFH
equity holders supporting the restructuring agreement are
represented by Wachtell, Lipton, Rosen & Katz, as legal advisor,
and Blackstone Advisory Partners LP, as financial advisor. Epiq
Systems is the claims agent.
Wilmington Savings Fund Society, FSB, the successor trustee for
the second-lien noteholders owed about $1.6 billion, is
represented by Ashby & Geddes, P.A.'s William P. Bowden, Esq., and
Gregory A. Taylor, Esq., and Brown Rudnick LLP's Edward S.
Weisfelner, Esq., Jeffrey L. Jonas, Esq., Andrew P. Strehle, Esq.,
Jeremy B. Coffey, Esq., and Howard L. Siegel, Esq.
ENERGY FUTURE: Unit Commences Offer for 1st Lien Notes Settlement
-----------------------------------------------------------------
Energy Future Intermediate Holding Company LLC (?EFIH?), a wholly-
owned subsidiary of Energy Future Holdings Corp. (?EFH Corp.?),
and EFIH Finance Inc. (together with EFIH, the ?Issuer?) today
commenced an offer to holders of the EFIH First Lien Notes (as
defined below) to participate in a voluntary settlement with
respect to the Issuer?s obligations under the EFIH First Lien
Notes (such settlement, the ?EFIH First Lien Settlement?). The
EFIH First Lien Settlement is open to all qualified holders of the
Issuer?s 6.875% Senior Secured Notes due 2017 and 10.000% Senior
Secured Notes due 2020 (such notes, the ?EFIH First Lien Notes?).
Pursuant to the Restructuring Support and Lock-Up Agreement, dated
as of April 29, 2014, certain holders of EFIH First Lien Notes
holding, in the aggregate, approximately 32% of the aggregate
outstanding principal amount of EFIH First Lien Notes have agreed
to the terms of the EFIH First Lien Settlement.
Upon the terms and subject to the conditions of the Information
Memorandum for participation in the EFIH First Lien Settlement,
each holder of EFIH First Lien Notes that validly tenders its EFIH
First Lien Notes and delivers a duly executed Letter of
Transmittal relating to its EFIH First Lien Notes prior to
5:00 p.m., New York City time, on May 19, 2014, unless extended by
EFIH in its sole discretion (the ?Early Participation Date?) will
be eligible to receive on the closing date of the offer as payment
in full of any claims arising out of its EFIH First Lien Notes,
for each $1,000 principal amount of EFIH First Lien Notes validly
tendered, $1,050.00 in aggregate principal amount of EFIH first
lien term loans (the ?EFIH First Lien DIP Loans?) under a new
senior secured super-priority debtor-in-possession credit
agreement (the ?EFIH First Lien DIP Facility?) (such
consideration, the ?Total Consideration? as set forth in the table
below). The Total Consideration includes an early participation
payment (the ?Early Participation Consideration? as set forth in
the table below) of $17.50 in an aggregate principal amount of
EFIH First Lien DIP Loans per $1,000 principal amount of EFIH
First Lien Notes validly tendered on or prior to the Early
Participation Date. Holders that validly tender their EFIH First
Lien Notes and deliver a duly executed Letter of Transmittal
relating to their EFIH First Lien Notes after the Early
Participation Date and prior to the Expiration Date (as defined
below) will be eligible to receive on the closing date of the
offer an amount of EFIH First Lien DIP Loans equal to the Total
Consideration less the Early Participation Consideration per
$1,000 principal amount of EFIH First Lien Notes (the ?Exchange
Consideration? as set forth in the table below). The offer period
for the EFIH First Lien Settlement will expire at 5:00 p.m., New
York City time, on June 6, 2014 (the ?Expiration Date?), unless
extended or earlier terminated by the Issuer in its sole
discretion. The Issuer does not intend to permit the offer period
for the EFIH First Lien Settlement to expire prior to the date the
EFIH First Lien Settlement is heard, and approved, by the
bankruptcy court.
Securities
6.875% Senior Secured Notes
due 2017
10.00% Senior Secured Notes
due 2020
CUSIP
Numbers
U29197AC1
29269QAK3
Aggregate
Principal
Amount
Outstanding
$502,714,000
$3,482,106,000
Exchange
Consideration
(1)
$1,032.50
$1,032.50
Early
Participation
Consideration
(1)
$17.50
$17.50
Total
Consideration
(1)(2)
$1,050.00
$1,050.00
(1) Does not include accrued and unpaid interest, which will be
paid through the issuance of additional EFIH First Lien DIP Loans
in an aggregate principal amount equal to 101% of the accrued and
unpaid interest up to, but not including, the closing date at the
non-default rate on EFIH First Lien Notes accepted for exchange in
the offer.
(2) In no event will the consideration payable in the offer be
adjusted in any manner to take into account the actual amount of
original issue discount, if any, that is applicable in connection
with any syndication of the EFIH First Lien DIP Loans and the
closing of the EFIH First Lien DIP Facility.
The consummation of the EFIH First Lien Settlement is subject to
several conditions, including, among others, the closing of the
EFIH First Lien DIP Facility, which is also subject to several
conditions. The EFIH First Lien Settlement will not be
consummated unless, among other things, the bankruptcy court
approves the EFIH First Lien DIP Facility and the EFIH First Lien
Settlement.
A holder that participates in the EFIH First Lien Settlement will
be required to tender all of its EFIH First Lien Notes. No holder
is required to participate in the EFIH First Lien Settlement, and
any holder?s participation is voluntary. The EFIH First Lien
Settlement is not conditioned on participation by holders of any
minimum principal amount of EFIH First Lien Notes. Subject to
applicable law, the Issuer reserves the right to terminate,
withdraw or amend the right to participate in the EFIH First Lien
Settlement.
All EFIH First Lien Notes that are not exchanged for EFIH First
Lien DIP Loans pursuant to the offer to participate in the EFIH
First Lien Settlement will, upon receipt of all necessary
bankruptcy court approvals and consummation of the EFIH First Lien
DIP Facility, be repaid in full in an amount equal to all
outstanding principal plus accrued and unpaid interest at the non-
default rate due and owing under the EFIH First Lien Notes (which
will not include any alleged premiums, settlements, fees or claims
relating to repayment of such claims). Notwithstanding the EFIH
First Lien Settlement, EFH Corp., EFIH and EFIH Finance, among
others, intend to initiate litigation to obtain entry of an order
from the bankruptcy court disallowing any and all claims derived
from, or based upon, makewhole or other similar payment provisions
under the EIFH First Lien Notes.
Epiq Systems is serving as the Offer Agent and Depositary Agent,
and may be contacted by telephone at (646) 282-2500 or toll free
at (866) 734-9393, or by email at tabulation@epiqsystems.com
(please reference ?EFIH First Lien Offer? in the subject line).
About Energy Future Holdings, fka TXU Corp.
Energy Future Holdings Corp., formerly known as TXU Corp., is a
privately held diversified energy holding company with a portfolio
of competitive and regulated energy businesses in Texas. Oncor,
an 80 percent-owned entity within the EFH group, is the largest
regulated transmission and distribution utility in Texas.
The Company delivers electricity to roughly three million delivery
points in and around Dallas-Fort Worth. EFH Corp. was created in
October 2007 in a $45 billion leverage buyout of Texas power
company TXU in a deal led by private-equity companies Kohlberg
Kravis Roberts & Co. and TPG Inc.
On April 29, 2014, Energy Future Holdings and 70 affiliated
companies sought Chapter 11 bankruptcy protection (Bankr. D. Del.
Lead Case No. 14-10979) after reaching a deal with some key
financial stakeholders to keep its businesses operating while
reducing its roughly $40 billion in debt.
The Debtors' cases have been assigned to Judge Christopher S.
Sontchi (CSS). The Debtors are seeking to have their cases
jointly administered for procedural purposes.
As of Dec. 31, 2013, EFH Corp. reported total assets of $36.4
billion in book value and total liabilities of $49.7 billion. The
Debtors have $42 billion of funded indebtedness.
EFH's legal advisor for the Chapter 11 proceedings is Kirkland &
Ellis LLP, its financial advisor is Evercore Partners and its
restructuring advisor is Alvarez & Marsal. The TCEH first lien
lenders supporting the restructuring agreement are represented by
Paul, Weiss, Rifkind, Wharton & Garrison, LLP as legal advisor,
and Millstein & Co., LLC, as financial advisor. The EFIH
unsecured creditors supporting the restructuring agreement are
represented by Akin Gump Strauss Hauer & Feld LLP, as legal
advisor, and Centerview Partners, as financial advisor. The EFH
equity holders supporting the restructuring agreement are
represented by Wachtell, Lipton, Rosen & Katz, as legal advisor,
and Blackstone Advisory Partners LP, as financial advisor. Epiq
Systems is the claims agent.
Wilmington Savings Fund Society, FSB, the successor trustee for
the second-lien noteholders owed about $1.6 billion, is
represented by Ashby & Geddes, P.A.'s William P. Bowden, Esq., and
Gregory A. Taylor, Esq., and Brown Rudnick LLP's Edward S.
Weisfelner, Esq., Jeffrey L. Jonas, Esq., Andrew P. Strehle, Esq.,
Jeremy B. Coffey, Esq., and Howard L. Siegel, Esq.
ENERGYSOLUTIONS LLC: Moody's Rates $125MM 1st Lien Debt 'B3'
------------------------------------------------------------
Moody's Investors Service, assigned B3 ratings to EnergySolutions
LLC's proposed first lien $125 million revolving credit and $700
million term loan, affirmed the B3 corporate family and B3-PD
probability of default ratings, and revised the rating outlook to
positive from stable. Proceeds of the term loan will be used to
repay the company's outstanding term loan and 10.75% senior
unsecured notes, including fees associated with the transaction.
The positive rating outlook reflects Moody's expectation for
improved financial metrics starting in fiscal 2015 once the cost
impact from the 2013 going private transaction declines and lower
overall risk to the company once it completes the highest risk
tasks in its ZionSolutions project. The SGL-3 liquidity rating was
affirmed. The ratings on the outstanding $105 million revolving
credit facility, $560 million term loan, $300 million senior notes
will be withdrawn with the close of the new debt.
Ratings
EnergySolutions LLC
CFR: affirmed B3
PDR Rating: affirmed B3-PD
$125 million revolving credit facility: assigned B3- LGD3/46%
$700 million term loan: assigned B3-LGD3/46%
Rating Outlook: Positive from Stable
Speculative Grade Liquidity Rating: Affirmed at SGL-3
Ratings Rationale
EnergySolutions' B3 corporate family rating reflects its elevated
leverage, modest free cash flow, and remaining performance
requirements with its high profile ZionSolutions project. The
company's reported revenue will materially decline in 2015 with
the company's loss of the UK's Magnox project. The company's
margins will materially increase, though, as the Magnox margins
are very low. The ZionSolutions decommissioning project has
progressed to the fuel transfer stage which is expected to
conclude in 2015, resulting in lower cost and execution risk for
the project. The company's key asset is its low-level radiation
disposal facility located in Clive, Utah, while its experience in
removing and transporting radioactive material provide global
revenue opportunities outside of US in Europe and Asia. The debt
level has decreased since Energy Capital Partners (ECP) purchased
the company in 2013, though Moody's expects reported debt to
remain in the $600-700 million range over the intermediate period
despite projected free cash flow generation. While revenue
opportunities are likely to increase over time, the company must
maintain high operational standards given the nature of the
material handled.
The positive outlook reflects Moody's expectation for reported
leverage and cash flow to improve with the passage of expenses
associated with the ECP acquisition and the risk reduction from
the ZionSolutions project. Modest debt reduction is expected even
as the cash balance builds.
Liquidity is adequate, as indicated by the SGL-3 rating, with
about half of the revolver available (net of letters of credit)
and cash from operations expected to cover capex and debt
amortization. As the revolver's leverage covenant is only tested
when 25% is drawn above a $50 million letter of credit exclusion
and Moody's do not anticipate cash draw in Moody's forecast,
covenant compliance is not expected to be a challenge. The company
has limited alternative sources of liquidity.
Completion of the transfer of fuel in ZionSolution project,
adjusted leverage decreasing below 4.5x and funds from operations
to adjusted debt increasing to around 15% or higher would likely
result in higher ratings. Sustained negative free cash flow, a
material cost overrun in the Zion project, or failure to refinance
the August 2015 maturing revolver by late 2014 could lead to a
rating reduction.
Salt Lake City, UT, headquartered EnergySolutions, LLC, is the
subsidiary of EnergySolutions, Inc. ("ES"). ES provides a range of
services to the nuclear industry, including transportation,
processing and disposal of nuclear waste, as well as clean-up and
repair of nuclear sites. Revenues for the twelve months ended
December 31, 2013 were $1.8 billion. EnergySolutions was purchased
by funds affiliated with private equity firm Energy Capital
Partners in May 2013.
EnergySolutions, LLC's ratings were assigned by evaluating factors
that Moody's considers relevant to the credit profile of the
issuer, such as the company's (i) business risk and competitive
position compared with others within the industry; (ii) capital
structure and financial risk; (iii) projected performance over the
near to intermediate term; and (iv) management's track record and
tolerance for risk. Moody's compared these attributes against
other issuers both within and outside EnergySolutions, LLC's core
industry and believes EnergySolutions, LLC's ratings are
comparable to those of other issuers with similar credit risk.
Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.
EVANS & SUTHERLAND: Royce & Associates Owns Less Than 1% Stake
--------------------------------------------------------------
In an amended Schedule 13G filed with the U.S. Securities and
Exchange Commission, Royce & Associates, LLC, disclosed that as of
April 30, 2014, it beneficially owned 40,000 shares of common
stock of Evans & Sutherland Computer Corp. representing 0.36
percent of the shares outstanding. A copy of the regulatory
filing is available for free at http://is.gd/r7IRyi
About Evans & Sutherland
Salt Lake City, Utah-based Evans & Sutherland Computer Corporation
in conjunction with its wholly owned subsidiary, Spitz Inc.,
creates innovative digital planetarium systems and cutting-edge,
fulldome show content. E&S has developed Digistar 5, the world's
leading digital planetarium with fulldome video playback, real-
time computer graphics, and a complete 3D digital astronomy
package fully integrated into a single theater system. This
technology allows audiences to be immersed in full-color, 3D
computer-generated interactive worlds. As a full-service system
provider, E&S also offers Spitz domes, hybrid planetarium systems
integrated with Digistar and a full range of theater systems from
audio and lighting to theater automation. E&S markets include
planetariums, science centers, themed attraction venues, and
premium large-format theaters. E&S products have been installed
in over 1,300 theaters worldwide.
For the nine months ended Sept. 27, 2013, the Company reported a
net loss of $793,000 on $18.42 million of sales as compared with a
net loss of $2.19 million on $17.92 million of sales for the nine
months ended Sept. 28, 2012. The Company's balance sheet at
Sept. 27, 2013, showed $25.47 million in total assets, $50.35
million in total liabilities and a $24.88 million total
stockholders' deficit.
EXCEL TRUST: Fitch Assigns Initial 'BB' Preferred Stock Rating
--------------------------------------------------------------
Fitch Ratings has assigned initial credit ratings to Excel Trust,
Inc. (NYSE: EXL) and its operating partnership Excel Trust, L.P.
as follows:
Excel Trust, Inc.
-- Issuer Default Rating (IDR) at 'BBB-';
-- Preferred stock at 'BB'.
Excel Trust, L.P.
-- IDR at 'BBB-';
-- Senior unsecured notes at 'BBB-';
-- Unsecured revolving credit facility at 'BBB-'.
The Rating Outlook is Stable
Fitch also expects to assign a 'BBB-' rating to an upcoming $250
million issuance of senior unsecured bonds to be issued by Excel
Trust, L.P. Fitch expects EXL to use the proceeds from the bond
issuance to repay borrowings under its line of credit, to finance
future acquisitions, and fund upcoming mortgage maturities,
principally the $45.8 million mortgage secured by its Gilroy
Crossing property that matures in October 2014 and can be prepaid
without penalty in August 2014.
KEY RATING DRIVERS
The ratings reflect Excel's credit strengths, which include
moderate projected leverage relative to other 'BBB-' REITs,
adequate fixed-charge coverage, a solid pool of unencumbered
assets that EXL is committed to growing, and management's track
record of success at other publicly traded REITs.
These credit positives are balanced by the company's elevated
near-term leverage, small portfolio size and secondary market
locations of EXL's properties, as well as the company's short
operating history as a public company and less established access
to unsecured debt capital pending evidence of EXL's ability to
issue public unsecured bonds.
The Stable Outlook is predicated on Fitch's expectation that the
company will drive leverage lower and sustain in the 6.0x to 6.5x
range.
Elevated Leverage
Excel's leverage is moderately elevated for the rating, primarily
due to debt funded acquisitions made during the second half of
2013. The company's rapid acquisition-led growth, combined with
the timing mismatch between income and balance sheet accounting,
challenge making meaningful time series comparisons of Excel's
leverage over its short corporate history. Based on Fitch's
calculations, the company's leverage - defined as consolidated net
debt over recurring operating EBITDA - was 7.0x at March 31, 2014,
assuming an annualized run-rate of the company's 1Q'14 EBITDA.
Fitch projections show leverage sustaining in the high 6.0x range
through 2016. However, Excel's leverage decreases to the low 6.0s
after adjusting for the annualized impact of 2016 acquisitions.
The reduction in leverage is primarily due to Fitch's assumption
of $600 million of equity issuance during the forecast period,
against the back drop of $900 million of incremental acquisitions.
Adequate Fixed-Charge Coverage
Fitch expects Excel's fixed-charge coverage to sustain in the low
2x range as the company executes its acquisition-led growth
strategy and preferred equity becomes a smaller percentage of its
total capitalization. EXL's fixed-charge coverage was 2.1x for
the trailing-12 months (TTM) ending March 31, 2014, compared to
2.0x and 1.8x for 2013 and 2012, respectively.
Solid Liquidity Profile
EXL's sources of capital fall short of covering its uses of
capital under Fitch's base case liquidity analysis beginning
April 1, 2014 through Dec. 31, 2015. The shortfall is primarily
due to near-term secured property level mortgage maturities.
Excel's liquidity coverage improves to 1.5x assuming an 80%
refinance rate for its upcoming mortgage maturities. Fitch views
this as a reasonably conservative assumption given debt yields of
approximately 10% -15% for Excel's secured maturities during the
next two years, which suggests ample borrowing capacity to
refinance these mortgages at maturity. However, Fitch recognizes
that Excel's preference is to repay these mortgages at maturity
with the proceeds from new unsecured debt capital. The company's
liquidity would improve to 2.1x (base case) and 4.6x (with 80%
refinancing advance rate) pro forma for the $250 million bond
issuance.
Fitch estimates EXL's unencumbered asset value at approximately
$770 million, representing an unencumbered asset to net unsecured
debt (UA/UD) coverage ratio of 2.2x, based on a 'stressed' 8.5%
cap rate of 2014 unencumbered NOI pro forma for the repayment of
its remaining 2014 mortgage maturities and the $250 million
unsecured bond issuance. This level of coverage is moderately
strong for the 'BBB-' rating level; however, Fitch recognizes that
the timing of future acquisitions and unsecured bond offerings
could create volatility in the metric in the near to intermediate
term.
EXL's dividend coverage from adjusted funds from operations has
varied from quarter to quarter principally due to variability in
tenant leasing costs and the timing of equity issuance. The
company's AFFO payout ratio was 98% for the TTM ending March 31,
2014 compared to 96% in 2013 and 94% during 2012, suggesting only
limited internally generated liquidity from retained cash flows.
Balanced Lease Expirations
The company has a balanced lease expiration schedule with 7.9% of
its annualized base rent (ABR) expiring each year, on average,
through 2023. The company's largest annual lease expiration
occurs in 2019 when 14.7% of its ABR expires, due to an unusually
high amount of anchor maturities. The above-average propensity
for anchors to renew leases at maturity mitigates the associated
re-leasing risk, in Fitch's view.
Diversified Tenant Base
Excel's tenant base is reasonably well diversified on an absolute
basis and relative to its Retail REIT peers. The company's
largest tenant comprised 3% of ABR as of March 31, 2014, which was
slightly below the 3.5% strip center REIT sector median. Excel's
top five tenants comprised 12.2% of ABR for the same period, which
was also slightly below the 12.6% sector average. The company's
largest tenants consist primarily of nationally recognized anchor
and junior-anchor retailers with strong credit profiles.
Unseasoned Unsecured Bond Issuer
EXL's planned $250 million senior unsecured bond issuance would
represent the company's inaugural public bond issuance. Until
now, the company has only demonstrated access to long-term
unsecured debt capital through bank borrowings and $100 million
private placement of unsecured notes in November 2013. Fitch
views EXL's limited (albeit growing) track record for sourcing
long-term unsecured debt capital as a credit negative given the
enhanced financial flexibility that this capital source affords
corporate borrowers.
Secondary Market Exposure
EXL's strategy emphasizes using management's industry
relationships to source 'off-market' acquisition opportunities,
principally in secondary markets. These properties typically can
be purchased at higher initial capitalization rates, partly due to
a less competitive bidding environment. Fitch views the company's
exposure to secondary markets as a credit negative given fewer
barriers to new supply, which could limit cash flow growth during
strong markets and pressure occupancies during a down cycle.
Secondary and tertiary markets also generally have less liquidity
-- particularly during periods of economic stress -- which Fitch
views negatively for contingent liquidity, all else equal.
Nevertheless, Fitch notes that the company's properties often have
strong competitive positions within their respective markets.
Moreover, the surrounding demographics of EXL's properties compare
favorably with its peers in terms of average household income,
albeit with moderately below-average population densities.
Limited Portfolio Granularity
EXL's portfolio is generally less diversified by number of assets
and markets than investment-grade rated REITs. 55.2% of the square
footage of the company's 36 consolidated operating properties is
located in just three states, including California, Arizona and
Texas. Moreover, as of March 31, 2014 the company's five largest
properties comprised 43% of its operating assets at cost and three
of the five (27.6% of operating assets at cost) are encumbered by
mortgages.
Limited Public Company Track Record
EXL has a short track record as a public company, having gone
public in April 2010. This track record is balanced by the
extensive retail real estate and public REIT management experience
of EXL's executive team - many of whom had previously worked
together for several decades prior to forming Excel Trust.
PREFERRED STOCK NOTCHING
The two-notch differential between EXL's IDR and preferred stock
rating is consistent with Fitch's criteria for a U.S. REIT with an
IDR of 'BBB-'. These preferred securities are deeply subordinated
and have loss absorption elements that would likely result in poor
recoveries in the event of a corporate default.
RATING SENSITIVITIES
The following factors may have a negative impact on the company's
ratings and/or Outlook:
-- Fitch's expectation for leverage above 7.0x;
-- Unsecured revolving line of credit availability sustaining
below 50%;
-- Fitch's expectation for fixed-charge coverage to sustain below
1.75x;
-- An increase in the company's use of secured borrowings.
Although Fitch does not anticipate near-term upwards rating
momentum, the following factors may have a positive impact on
EXL's ratings and/or Outlook:
-- An increase in the size and diversity of EXL's property
portfolio;
-- Further growth in the company's unencumbered asset pool;
-- Fitch's expectation for the company's leverage to maintain
below 6.0x (leverage was 7.2x for the TTM ending March 31,
2014);
-- Fitch's expectation for the company's fixed-charge coverage to
sustain above 2.5x (coverage was 2.1x for the TTM ending
March 31, 2014).
EXCEL TRUST: S&P Assigns 'BB+' CCR; Outlook Stable
--------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB+' corporate
credit rating to Excel Trust Inc. The outlook is stable. S&P also
assigned a 'BBB-' issue rating and '2' recovery rating to the
company's proposed $250 million of senior unsecured notes.
"Our rating on Excel reflects the REIT's 'fair' business risk
profile," said Standard & Poor's credit analyst Matthew Lynam.
Excel's portfolio of retail shopping centers is very small, but
well positioned in markets with above-average household income and
expected population growth, and exposure to development activity
is limited. Although management has proven successful together in
previous ventures, S&P believes the team will need to prove that
it can continue to source attractive off-market deals in a far
more competitive marketplace than when it began acquiring in 2010.
S&P views Excel's financial risk profile to be "significant" based
on elevated but improving leverage measures and floating rate debt
exposure, some reliance upon the revolver, and currently thin
coverage of the common dividend. The company's balance sheet also
includes $142 million of preferred stock, which is an overhang on
the existing leverage ratios. S&P's scenario analysis forecasts
2014 year-end fixed-charge coverage (FCC) improvement to the 2.1x
to 2.2x range and debt to EBITDA (including preferred shares) to
the low-8x area.
The outlook is stable. S&P expects cash flow from Excel's
portfolio of shopping centers to expand rapidly through
acquisitions over the next two years and for the company to
continue to grow its asset base. S&P projects S&P-calculated FCC
of 2.1x to 2.2x by year-end 2014 and to strengthen modestly within
the low-2x range by year-end 2015. In S&P's opinion, its
calculated debt to EBITDA (including preferred shares) will drop
to the low-8x area in 2014.
S&P could lower the rating if leverage failed to decline from
currently elevated levels or liquidity materially weakened, such
that debt to EBITDA rises above 9.5x and/or FCC falls below 2.0x
for a sustained period of time.
Alternatively, S&P would consider a rating upgrade, if the company
were to grow the portfolio prudently, and simultaneously improve
debt to EBITDA to the 7.0 to 7.5x range while demonstrating less
reliance on the revolving credit facility. S&P would also look
for the portfolio expansion to produce improved, more consistent
overall asset quality and lower single-asset concentrations.
FIAT CHRYSLER: Five-Year Growth Plan Leaves Investors Cold
----------------------------------------------------------
Giovanni Legorano and Christina Rogers, writing for The Wall
Street Journal, reported that investors registered a vote of no
confidence in Fiat Chrysler Automobiles's new five-year plan,
dumping shares so vigorously that trading was suspended for
excessive losses and the Italian auto maker's market value was
slashed by nearly 12%.
According to the report, shares in the U.S. and Italy-based group,
the world's seventh biggest car maker, tumbled in heavy trading in
Milan amid weak first-quarter earnings and doubts about how the
auto maker will finance an ambitious plan to boost vehicle sales
60% to seven million by 2018. The company's shares closed at
EUR7.48 ($10.41), down nearly 12%, the Journal said on May 7.
Analysts blamed the selloff on a lack of clarity about how Fiat
Chrysler will raise the EUR48 billion ($66.85 billion) in research
and development and capital investments needed to reach its goals,
unless it resorts to issuing new shares, the report related.
Company executives said they plan to pay for the investment plan,
mostly with cash generated from increased sales and higher profit
margins, the report further related. Fiat Chief Executive Sergio
Marchionne and his top management said they expect to sell more
premium-priced cars, expand the lucrative Jeep SUV franchise into
new international markets and add to market share gains in the
U.S.
Analysts, however, were skeptical because Fiat has missed sales
and profit targets in the past and now carries nearly EUR30
billion in debt -- far more than its rivals -- while its core
European business burns cash, the report added.
About Chrysler Group
Chrysler Group LLC, formed in 2009 from a global strategic
alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge, Ram
Truck, Mopar(R) and Global Electric Motorcars (GEM) brand vehicles
and products. Headquartered in Auburn Hills, Michigan, Chrysler
Group LLC's product lineup features some of the world's most
recognizable vehicles, including the Chrysler 300, Jeep Wrangler
and Ram Truck. Fiat will contribute world-class technology,
platforms and powertrains for small- and medium-sized cars,
allowing Chrysler Group to offer an expanded product line
including environmentally friendly vehicles.
Chrysler LLC and 24 affiliates on April 30, 2009, sought Chapter
11 protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead
Case No. 09-50002). The U.S. and Canadian governments provided
Chrysler LLC with $4.5 billion to finance its bankruptcy case.
In connection with the bankruptcy filing, Chrysler reached an
agreement to sell all assets to an alliance between Chrysler and
Italian automobile manufacturer Fiat. Under the terms approved by
the Bankruptcy Court, the company formerly known as Chrysler LLC
in June 2009, formally sold substantially all of its assets to the
new company, named Chrysler Group LLC.
In January 2014, the American car manufacturer officially became
100% Italian when Fiat Spa completed its deal to purchase the 40%
it did not already own of Chrysler. Fiat has shared ownership of
Chrysler with the health care fund of the United Automobile
Workers unions since Chrysler emerged from bankruptcy in 209.
* * *
Standard & Poor's Ratings Services raised its ratings on U.S.-
based auto manufacturer Chrysler Group LLC, including the
corporate credit rating to 'BB-' from 'B+' in mid-January 2014.
The outlook is stable.
FIRST MARINER: Process of Selling Banks in Bankruptcy Questioned
----------------------------------------------------------------
Stephanie Gleason, writing for The Wall Street Journal, reported
that a U.S. Department of Justice bankruptcy representative has
called the increasingly popular use of Chapter 11 to facilitate
sales of floundering banks a "questionable practice."
According to the Journal, the objection filed on May 6 in the case
of First Mariner Bancorp pointed to the circumstances surrounding
an auction for the company that was conducted by investment firm
Sandler O'Neill + Partners. According to the filing, Sandler
O'Neill failed to disclose a relationship with one of the bidding
parties -- National Penn Bancshares Inc. -- which it called
evidence of the problems inherent in this trend.
The filing specifically requested that the bankruptcy court not
approve more than $54,000 in fees for Sandler O'Neill, the Journal
related.
"This lack of experience in bankruptcy proceedings is not
unexpected, because Sandler O'Neill specializes in bank mergers
and acquisitions, and banks are excluded from eligibility for
bankruptcy protection," Judy Robbins, the Justice Department's
U.S. trustee in the region, said in her objection, the Journal
further related.
"However, there is an emerging trend toward bank-holding-company
bankruptcies, which appears to skirt the statutory restriction on
affording banks the protections of Title 11. Therefore the
quandary presented by Sandler O'Neill's flawed disclosure of
connections is one that underscores the questionable practice of
using bankruptcy courts to facilitate bank mergers and
acquisitions," she said, the Journal added.
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reported that First Mariner's bankruptcy is the third case in a
month in which a bankruptcy judge reopened a seemingly completed
auction to permit a higher bid.
According to Mr. Rochelle, First Mariner, a bank holding company,
filed a petition for Chapter 11 protection on Feb. 10 in
Baltimore, a contract already signed with an investor group to buy
its 16-branch bank subsidiary for $4.8 million.
The bankruptcy court approved procedures calling for an auction on
April 10, where First Mariner announced that the best bid came
from National Penn Bancshares, the Bloomberg report related. RKJS
Bank, which participated in the auction, filed papers objecting to
sale approval, saying that the bidding was terminated prematurely
and that its offer was the highest.
U.S. Bankruptcy Judge David E. Rice held a hearing and reopened
the auction, with the high bid coming from RKJS, the Bloomberg
report further related.
Judge Rice formally approved the sale to RKJS on April 21 under a
contract with $17.7 million cash and a commitment for investors to
contribute $85 million to $114.9 million in equity to recapitalize
the bank subsidiary, Bloomberg said. The new capital includes
cash to pay the purchase price. RKJS must increase the purchase
price by $1 million if it doesn't have regulatory approval to buy
the bank subsidiary by April 30. The buyer is also providing
financing for the Chapter 11 case until the sale is completed.
Mr. Rochelle recalled that U.S. Bankruptcy Judge H. Christopher
Mott in Austin, Texas, reopened the auction for Xtreme Power Inc.
and brought home a higher price. In March, U.S. Bankruptcy Judge
David T. Thuma in Albuquerque, New Mexico, let Sunland Inc. make
an extra $6 million for its peanut butter plant by reopening the
auction, Mr. Rochelle further recalled.
About First Mariner Bancorp
First Mariner Bancorp, the holding company for Maryland community
bank 1st Mariner, filed for Chapter 11 bankruptcy on Feb. 10,
2014, in order to sell its bank subsidiary, 1st Mariner Bank, to a
new bank formed by investors. The case is In re First Mariner
Bancorp, Case No. 14-11952 (D. Md.) before Judge David E. Rice.
The Debtor's bankruptcy counsel if Kramer Levin Naftalis & Frankel
LLP. The Debtor's local counsel is Lawrence Joseph Yumkas, Esq.,
at Yumkas, Vidmar & Sweeney, LLC, in Annapolis, Maryland. The
Debtor's regulatory and corporate counsel if Kilpatrick Townsend &
Stockton LLP. The Debtor's investment banker and financial
adviser is Sandler O'Neill + Partners, L.P.
The Debtor has total assets of $5.45 million and total debts of
$60.52 million.
FIRST NATIONAL: Auditor Won't Seek Reappointment
------------------------------------------------
McGladrey LLP advised First National Community Bancorp, Inc., that
it will not seek reappointment as the independent registered
public accounting firm for the Company. McGladrey has agreed to
perform review services through the filing of the Company's Form
10-Q for the quarter ending March 31, 2014. The Audit Committee
of the Board of Directors of the Company has instituted a search
for an independent registered public accounting firm to replace
McGladrey for the year ending Dec. 31, 2014.
McGladrey's reports on the financial statements for the fiscal
years ended Dec. 31, 2013, and 2012 did not contain an adverse
opinion or a disclaimer of opinion, and were not qualified or
modified as to uncertainty, audit scope or accounting principles.
During the fiscal years ended Dec. 31, 2013, and 2012 and from
Jan. 1, 2014, through March 25, 2014, there were no disagreements
between the Company and McGladrey on any matter of accounting
principles or practices, financial statement disclosure, or
auditing scope or procedures, which disagreements, if not resolved
to the satisfaction of McGladrey would have caused it to make
reference thereto in its reports on the Company's financial
statements for those periods.
About First National
Headquartered in Dunmore, Pa., First National Community Bancorp,
Inc., is a Pennsylvania corporation, incorporated in 1997 and is
registered as a bank holding company under the Bank Holding
Company Act ("BHCA") of 1956, as amended. The Company became an
active bank holding company on July 1, 1998, when it acquired
ownership of First National Community Bank (the "Bank"). The Bank
is a wholly-owned subsidiary of the Company.
The Company's primary activity consists of owning and operating
the Bank, which provides customary retail and commercial banking
services to individuals and businesses. The Bank provides
practically all of the Company's earnings as a result of its
banking services.
First National disclosed a net loss of $13.71 million on $37.02
million of total interest income for the year ended Dec. 31, 2012,
as compared with a net loss of $335,000 on $42.93 million of total
interest income in 2011. The Company's balance sheet at Sept. 30,
2013, showed $978.52 million in total assets, $945.72 million in
total liabilities and $32.79 million in total shareholders'
equity.
Regulatory Matters
The Bank is under a Consent Order from the Office of the
Comptroller of the Currency dated Sept. 1, 2010. The Company is
also subject to a Written Agreement with the Federal Reserve Bank
of Philadelphia dated Nov. 24, 2010.
The Bank, pursuant to a Stipulation and Consent to the Issuance of
a Consent Order dated Sept. 1, 2010, without admitting or denying
any wrongdoing, consented and agreed to the issuance of the Order
by the OCC, the Bank's primary regulator. The Order requires the
Bank to undertake certain actions within designated timeframes,
and to operate in compliance with the provisions thereof during
its term. The Order is based on the results of an examination of
the Bank as of March 31, 2009. Since the examination, management
has engaged in discussions with the OCC and has taken steps to
improve the condition, policies and procedures of the Bank.
Compliance with the Order is monitored by a committee of at least
three directors, none of whom is an employee or controlling
shareholder of the Bank or its affiliates or a family member of
any such person. The Committee is required to submit written
progress reports on a monthly basis to the OCC and the Agreement
requires the Bank to make periodic reports and filings with the
Federal Reserve Bank. The members of the Committee are John P.
Moses, Joseph Coccia, Joseph J. Gentile and Thomas J. Melone.
Banking regulations also limit the amount of dividends that may be
paid without prior approval of the Bank's regulatory agency. At
Dec. 31, 2012, the Company and the Bank are restricted from paying
any dividends, without regulatory approval.
FLINTKOTE COMPANY: Exclusive Filing Period Extended to Sept. 30
---------------------------------------------------------------
The bankruptcy court has extended The Flintkote Company and
Flintkote Mines Limited's exclusive periods to file a Chapter 11
plan to Sept. 30, 2014, and exclusive period to acceptances of the
plan to Nov. 30, 2014.
The Court granted 26 prior extensions of the exclusive periods.
In 2012, Flintkote and Mines received Court confirmation of their
reorganization plan, which has been accepted by all classes of
creditors and claimants. However, the Plan is hindered by a
confirmation appeal filed by Imperial Tobacco Canada Limited,
which is pending in the Delaware District Court. The Plan will
not go effective until after the District Court affirms the
confirmation.
The extension request was supported by the official committee of
asbestos personal injury claimants and the legal representatives
of future asbestos claimants.
About The Flintkote Company
Headquartered in San Francisco, California, The Flintkote Company
is engaged in the business of manufacturing, processing and
distributing building materials. Flintkote Mines Limited is a
subsidiary of Flintkote Company and is engaged in the mining of
base-precious metals. The Flintkote Company filed for Chapter 11
protection (Bankr. D. Del. Case No. 04-11300) on April 30, 2004.
Flintkote Mines Limited filed for Chapter 11 relief (Bankr. D.
Del. Case No. 04-12440) on Aug. 25, 2004. Kevin T. Lantry, Esq.,
Jeffrey E. Bjork, Esq., Dennis M. Twomey, Esq., Jeremy E.
Rosenthal, Esq., and Christina M. Craige, Esq., at Sidley Austin,
LLP, in Los Angeles; James E. O'Neill, Esq., and Laura Davis
Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington,
Del., represent the Debtors in their restructuring efforts.
Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, in New
York, N.Y.; Peter Van N. Lockwood, Esq., Ronald E. Reinsel, Esq.,
at Caplin & Drysdale, Chartered, in Washington, D.C.; and Philip
E. Milch, Esq., at Campbell & Levine, LLC, in Wilmington, Del.,
represent the Asbestos Claimants Committee as counsel.
James J. McMonagle, is the legal representative for future
claimants. The FCR has retained Dr. Timothy Wyant as claims
evaluation consultant. The FRCR is represented by James L.
Patton, Jr., Esq., and Edwin J. Harron, Esq., at Young Conaway
Stargatt & Taylor, LLP; and Reginald W. Jackson, Esq., at Vorys,
Sater, Seymour & Pease LLP.
When Flintkote filed for protection from its creditors, it
estimated more than $100 million each in assets and debts. When
Flintkote Mines Limited filed for protection from its creditors,
it estimated assets of $1 million to $50 million, and debts of
more than $100 million.
The Debtors' Chapter 11 cases have been re-assigned to Judge Mary
F. Walrath in line with the retirement of former Bankruptcy
Judge Judith Fitzgerald.
FREMONT HOSPITALITY: Auction of Former Clarion Inn Today
--------------------------------------------------------
The former Clarion Inn property, owned by Fremont Hospitality
Group, LLC, will be sold at auction today, May 9, 2014 at noon
EST. The property is located at 3422 State Route 53, Fremont,
Ohio. The auction will be held on site.
Ericka Parker, Chapter 7 Trustee for Fremont Hospitality Group,
won approval of bidding and sale procedures from the Bankruptcy
Court for the Northern District of Ohio in an order dated March
26, 2014.
The Chapter 7 Trustee will be selling the Debtor's property free
and clear of all liens, claims, encumbrances, and other interests.
Ms. Parker may be reached at (419) 243-0900 or
esparker@sbcglobal.com
Bankruptcy Judge Mary Ann Whipple will hold a hearing to approve
the sale to the winning bidder on May 14, 2014 at 1:30 p.m.
(Eastern Time). The Sale Hearing may be adjourned without notice
by an announcement of the adjourned date at the Sale Hearing.
Objections to the sale may be filed no later than May 13, 2014.
Based in Fremont, Ohio, Fremont Hospitality Group LLC aka The Port
Clinton Hotels Inc., filed for Chapter 11 protection on April 25,
2012 (Bankr. N.D. Ohio Case No. 12-31969). Fremont Hospitality
Group owned the Clarion Inn. Judge Mary Ann Whipple presides over
the bankruptcy case. The Donald Harris Law Firm served as the
Debtor's counsel. The Debtor listed both assets and debts of
between $1 million and $10 million.
Fremont Hospitality Group which is the owner (but not operator) of
the hotel and conference center located at 3422 State Route 53,
Fremont, Ohio.
It again sought bankruptcy protection (Bankr. N.D. Ohio Case No.
13-31005) on March 15, 2013. Judge Mary Ann Whipple also presided
the 2013 case. Donald Harris, Esq., also served as bankruptcy
counsel. The Debtor listed both assets and debts of between $1
million and $10 million. The 2013 petition was signed by Annie
Kolath, president. A list of the Debtor's four largest unsecured
creditors, filed together with the 2013 petition, is available for
free at http://bankrupt.com/misc/ohnb13-31005.pdf
The 2013 case was later converted to Chapter 7 and Ericka Parker
was named Chapter 7. She is represented as counsel by:
Patricia B. Fugee
ROETZEL & ANDRESS, LPA
One SeaGate, Suite 1700
Toledo, OH 43604
Telephone: 419-254-5261
Facsimile: 419-242-0316
Email: pfugee@ralaw.com
FREMONT HOSPITALITY: Claims Bar Dates Set for June 13 and 23
------------------------------------------------------------
Bankruptcy Judge Judge Mary Ann Whipple set deadlines for filing
of chapter 11 administrative claim requests and proofs of claim
against Fremont Hospitality Group, LLC.
Per Orders of the Bankruptcy Court for the Northern District of
Ohio:
-- parties that have a claim against FHG that arose before
the March 15, 2013 bankruptcy petition date, need to file a proof
of claim on or before June 23, 2014.
-- parties that a claim against FHG that arose between March
16, 2013 and November 5, 2013, need to file a request for Chapter
11 administrative claim, on or before June 13, 2014.
Based in Fremont, Ohio, Fremont Hospitality Group LLC aka The Port
Clinton Hotels Inc., filed for Chapter 11 protection on April 25,
2012 (Bankr. N.D. Ohio Case No. 12-31969). Fremont Hospitality
Group owned the Clarion Inn. Judge Mary Ann Whipple presides over
the bankruptcy case. The Donald Harris Law Firm served as the
Debtor's counsel. The Debtor listed both assets and debts of
between $1 million and $10 million.
Fremont Hospitality Group which is the owner (but not operator) of
the hotel and conference center located at 3422 State Route 53,
Fremont, Ohio.
It again sought bankruptcy protection (Bankr. N.D. Ohio Case No.
13-31005) on March 15, 2013. Judge Mary Ann Whipple also presided
the 2013 case. Donald Harris, Esq., also served as bankruptcy
counsel. The Debtor listed both assets and debts of between $1
million and $10 million. The 2013 petition was signed by Annie
Kolath, president. A list of the Debtor's four largest unsecured
creditors, filed together with the 2013 petition, is available for
free at http://bankrupt.com/misc/ohnb13-31005.pdf
The 2013 case was later converted to Chapter 7 and Ericka Parker
was named Chapter 7. She is represented as counsel by Patricia B.
Fugee, Esq., at Roetzel & Andress, LPA.
GENERAL MOTORS: Brings Back Former Communications Head
------------------------------------------------------
Jeff Bennett and Neal E. Boudette, writing for The Wall Street
Journal, reported that General Motors Co., looking for additional
help with its public relations, has brought back the
communications head who served as its chief spokesman as the auto
maker slid into bankruptcy.
Steve Harris has been hired as a temporary consultant to advise GM
as it deals with the faulty ignition-switch recall, the report
related, citing people familiar with the move. Mr. Harris had held
the auto maker's top communications spot on two separate
occasions, including during 2009 when the company descended into
bankruptcy.
Chief Executive Mary Barra knows Mr. Harris and has confidence in
his strategic communication skills, the report further related,
citing one of the people who asked not to be identified since the
move hasn't been made public. He will advise Ms. Barra and provide
input on the running of the communications department while GM
continues its search for a permanent public-relations head.
Mr. Harris's two previous stints include being brought out of
retirement by then-chief executive Rick Wagoner to lead
communications from March 2006 through July 2009, after the
company emerged from bankruptcy protection, according to the
report. Before then, Mr. Harris served as GM's vice president of
communications from 1999 through 2003 before retiring.
GM continues to look for a communication chief since Selim Bingol
departed the company in April as part of an overall leadership
change by Ms. Barra, the report said. Randy Arickx is currently
serving in the post.
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.
GENERAL MOTORS: Recalls Some Vehicles for Potential Brake Defect
----------------------------------------------------------------
Tess Stynes, writing for The Wall Street Journal, reported that
General Motors Co. said it is recalling certain 2014 Buick
LaCrosse and Chevrolet Malibu sedans, mostly in the U.S., for a
potential brake defect that could increase the risk of crashes.
However, the Detroit auto maker also said the majority of the
total 8,972 vehicles included in the recall haven't left the
showroom, according to the report.
In a statement on May 8, GM said rear-brake rotors may have been
assembled into the front-brake assembly of the recalled vehicles.
That could significantly shorten how long the front-brake pad will
last, reducing the performance of the brake system, the report
related.
If this happens, the brake warning light will turn on, but
"additional brake application will result in a loss of braking,"
increasing the risk of a crash, GM said, the report further
related.
The recall covers 8,590 vehicles manufactured for the U.S. between
Jan. 29 and March 31, as well as 209 vehicles for Canada and 173
for Mexico, the report said. However, GM also said only about
1,694 of the vehicles are in customers' possession.
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.
GEOMET INC: Stockholders Authorize Asset Sale
---------------------------------------------
At a special meeting of stockholders held on May 5, 2014, the
necessary stockholder votes were received to authorize the sale of
substantially all of GeoMet, Inc.'s coalbed methane interests and
other assets located in the Appalachian Basin in McDowell,
Harrison, Wyoming, Raleigh, Barbour and Taylor Counties, West
Virginia and Buchanan County, Virginia, to ARP Mountaineer
Productions, LLC, a wholly-owned subsidiary of Atlas Resource
Partners, L.P.
The Asset Sale was authorized at the Special Meeting by the
holders of 94.9 percent of the outstanding shares of the Company's
Series A Convertible Redeemable Preferred Stock and by the holders
of 74.4 percent of the Preferred Stock (on an as-converted basis)
voting together with the holders of the Company's common stock as
a single class. While a separate vote of the holders of the
Common Stock voting as a class was not required to authorize the
Asset Sale, 51.1 percent of the holders of the Common Stock voted
to authorize the transaction.
The Asset Sale is currently scheduled to close in May 2014,
however, the closing is subject to numerous conditions that are
beyond the Company's control so there can be no assurance that
closing will occur in May 2014 or at all.
About GeoMet Inc.
Houston, Texas-based GeoMet, Inc., is an independent energy
company primarily engaged in the exploration for and development
and production of natural gas from coal seams (coalbed methane)
and non-conventional shallow gas. Its principal operations and
producing properties are located in the Cahaba and Black Warrior
Basins in Alabama and the central Appalachian Basin in Virginia
and West Virginia. It also owns additional coalbed methane and
oil and gas development rights, principally in Alabama, Virginia,
West Virginia, and British Columbia. As of March 31, 2012, it
owns a total of 192,000 net acres of coalbed methane and oil and
gas development rights.
GeoMet posted net income of $35.31 million on $38.20 million of
total revenues for the year ended Dec. 31, 2013, as compared with
a net loss of $149.95 million on $39.38 million of total revenue
during the prior year. As of Dec. 31, 2013, the Company had
$54.80 million in total assets, $90.65 million in total
liabilities, $43.40 million in mezzanine equity and a $79.26
million total stockholders' deficit.
Hein & Associates LLP, in Houston, Texas, issued a "going concern"
qualification on the consolidated financial statements for the
year ended Dec. 31, 2013. The independent auditors noted that the
Company has suffered recurring losses from operations and has a
net working capital deficiency that raise substantial doubt about
the Company's ability to continue as a going concern.
Bankruptcy Warning
On Feb. 13, 2014, the Company and its wholly-owned subsidiaries,
GeoMet Operating Company, Inc. and GeoMet Gathering Company, LLC,
entered into an asset purchase agreement to sell substantially all
of the Company's remaining assets, comprising coalbed methane
interests and other assets located in the Appalachian Basin in
McDowell, Harrison, Wyoming, Raleigh, Barbour and Taylor Counties,
West Virginia and Buchanan County, Virginia to ARP Mountaineer
Productions, LLC, and a wholly-owned subsidiary of Atlas Resource
Partners, L.P., for a purchase price of $107 million, subject to
various purchase price adjustments.
"If the Asset Sale is not consummated and we are unable to find
another viable purchaser for our assets, we will likely file
bankruptcy as we will have no operating assets to continue the
business," the Company said in the Annual Report for the year
ended Dec. 31, 2013.
GEOVIC MINING: TSX Reviews Continued Listing Eligibility
--------------------------------------------------------
Geovic Mining Corp. on May 5 disclosed that it has received notice
from the Toronto Stock Exchange that the TSX is reviewing the
Company's eligibility for the continued listing of its common
stock on the TSX. The TSX has granted the Company 30 days to
demonstrate that it complies with all of the TSX continued listing
requirements that are applicable to the Company. If the Company
cannot demonstrate that it meets all such requirements on or
before June 3, 2014, the Company's shares of common stock will be
delisted from the TSX within 30 days from such date.
The TSX has advised the Company that the Continued Listing Review
is being conducted in connection with the Company's issuance of
promissory notes to certain related parties in 2013 and the first
quarter of 2014. Specifically, the Notice states that the Company
failed to seek the TSX's prior approval of the Notes transaction
and prior disinterested shareholder approval for the issuance of
the Notes, in each case as required under the Section 501 (c) of
the TSX Company Manual. The Notice also states that the Company
appears to have breached the TSX's Timely Disclosure Policy for
its failure to news release the key details of the Notes,
including the interest rates, which the TSX does not believe are
commercially reasonable.
The Company intends to provide the TSX with written submissions
addressing the deficiencies identified in the Notice.
About Geovic
Geovic -- http://www.geovic.net-- is a U.S.-based corporation
whose principal asset is a 60.5% indirect ownership of a
significant cobalt-nickel-manganese deposit in the Republic of
Cameroon, Africa.
GILES-JORDAN: 39-Acre Galveston, TX Property in Chapter 11
----------------------------------------------------------
Giles-Jordan, Inc., filed a Chapter 11 bankruptcy petition in its
hometown in Galveston, Texas (Bankr. S.D. Tex. Case No. 14-80173)
on May 5, 2014.
The Debtor disclosed $12 million in total assets and $4.81 million
in liabilities, including $3.72 million of secured debt. Its lone
asset is a 39.16-acre property at 230 East Beach Drive, in
Galveston, Texas. Galveston Shores, LP, of Carlsbad, California,
is the holder of the secured debt.
A copy of the schedules filed together with the petition is
available for free at:
http://bankrupt.com/misc/Giles-Jordan_Petition_SALs.pdf
The Debtor has not recorded income from business operations during
the past two years, according to the statement of financial
affairs.
Harry M. Giles holds 55% of the stock, while Donald L. Jordan owns
the remaining 45%. Mr. Jordan, who serves as president, served
the bankruptcy petition.
The case is assigned to Judge Letitia Z. Paul.
The Debtor is represented by Jeffrey Wells Oppel, Esq., at Oppel &
Goldberg, PLLC, in Houston, Texas. Mr. Oppel received $12,054
from the Debtor prepetition.
GLOBAL AVIATION: Seeks Approval of Cerberus Forbearance Agreement
-----------------------------------------------------------------
Global Aviation Holdings Inc. asks the Bankruptcy Court to approve
a stipulation concerning limited forbearance under the DIP
Financing Order and authorization to continue using cash
collateral.
On March 25, 2014, Cerberus Business Finance LLC unexpectedly
served the Debtors with a default notice, informing the Debtors of
(i) the suspension of all of the DIP Lenders' commitments and any
funding under the Financing Agreement and (ii) the termination of
the right of the Debtors to use cash collateral, resulting from
the occurrence and continuance of certain Events of Default under
the Financing Agreement and the Financing Order. The Default
Notice thus resulted in an immediate cutoff of all funding.
As a result of the immediate lack of access to funding, all of the
Debtors except for one business line operated by North American
Airlines Inc. ceased operations, and all employees were let go,
except for approximately 100 employees who remained at North
American to support certain continuing operations for a customer.
North American has a profitable line of business that requires it
to fly two Boeing 767-300 aircraft leased from GE Capital Aviation
Services LLC and GE Capital Aviation Services Limited and certain
of their affiliates.
To preserve North American's profitable line of business for a
potential sale, the Customer agreed to make advance payments under
its contract with North American, and North American entered into
a stipulation with Cerberus to allow North American to use the
advance payments to continue to fund its aircraft operations.
North American has continued operating pursuant to the Prior
Stipulation.
Following the Debtors' receipt of the Default Notice, North
American immediately accelerated its negotiations with potential
buyers of its business. North American finalized a letter of
intent with Omni Air International, Inc., for the purchase of
certain assets of North American. The Debtors intend to seek
approval of the sale of assets and assignment of aircraft leases
to Omni pursuant to a separate motion to be filed with the Court.
Because it will take a period of time to obtain court approval,
close the sale transaction, and transfer the aviation assets, and
as required in the Omni LOI, North American needs to continue
flying for the Customer during the transition period to realize
the true market value of its remaining line of business. North
American's continued operations require additional funding beyond
the revenue generated by the Customer Contract.
To obtain this additional funding, the Debtors have negotiated an
agreement with Cerberus for a limited forbearance under the DIP
Financing Order to reinstate the use of cash collateral in order
to fund the sale of North American's assets associated with its
remaining business line and fund an orderly wind-down of the
remaining Debtors. The agreement between Cerberus and the Debtors
regarding the limited forbearance and continued limited use of
Cash Collateral is memorialized in the Stipulation Between
Cerberus Business Finance, LLC and the Debtors Concerning Receipts
and Funding Pending Sale of Debtors' Assets.
The Forbearance Stipulation permits the Debtors to continue using
Cash Collateral based on negotiated budgets for achieving a sale
of certain assets of North American and winding down the affairs
of the Debtors.
The Forbearance Stipulation provides a mechanism by which the
Debtors and Cerberus will share in receipts collected by the
Debtors from collection of accounts receivable and proceeds of the
sale of the Debtors' inventory and certain of North American's
assets. In particular, the Forbearance Stipulation includes the
following material provisions:
A. The Debtors and Cerberus will share the payments received from
Omni under the Omni LOI as follows:
-- The Debtors are permitted to use the entire $750,000 Non-
Refundable Deposit;
-- The Debtors are permitted to use the entire $750,000
Milestone 1 payment;
-- The Debtors are permitted to use $850,000 of the $2,850,000
Milestone 2 payment, and the remaining $2,000,000 of the
Milestone 2 payment is remitted to Cerberus; and
-- The Debtors are permitted to use $420,000 of the $6,620,000
final cash payment under the Omni LOI, and the remaining
$6,200,000 of the final cash payment is remitted to
Cerberus.
B. The Debtors and Cerberus will share the Debtors' other
receipts, including proceeds from the sale of the Debtors' spare
parts and inventory, as follows:
-- 95% of the Inventory Proceeds and 47.5% of the Debtors'
Receipts shall be remitted to Cerberus; and
-- The Debtors shall be permitted to use the remaining 5% of
Inventory Proceeds and the remaining 52.5% of Receipts.
C. Cerberus will suspend sweeping the Debtors' accounts as long as
the Forbearance Stipulation has not been terminated.
D. The Debtors shall establish a Professional Fee Escrow for the
payment of the fees and expenses of the Debtors' and the
Committee's professionals incurred from and after April 1,
2014. The fees and expenses of the Debtors' and the
Committee's professionals incurred prior to April 1, 2014 shall
be funded by Cerberus pursuant to the carve-out provisions of
the DIP Financing Agreement and the DIP Financing Order.
The effectiveness of the Forbearance Stipulation is conditioned on
the Court's entry of an order approving the terms and conditions
of the Forbearance Stipulation.
About Global Aviation Holdings
Global Aviation Holdings Inc. -- http://www.glah.com-- the parent
company of North American Airlines and World Airways, sought
Chapter 11 bankruptcy protection on Nov. 12, 2013. North American
Airlines, founded in 1989, operates passenger charter flights
using B767-300ER aircraft. Founded in 1948, World Airways --
http://www.woa.com-- operates cargo and passenger charter flights
using B747-400 and MD-11 aircraft.
The parent of World Airways Inc. and North American Airlines Inc.
implemented a prior Chapter 11 reorganization in February 2013.
The new case is In re Global Aviation Holdings Inc., 13-12945,
U.S. Bankruptcy Court, District of Delaware (Wilmington). The
prior case was In re Global Aviation Holdings Inc., 12-bk-40783,
U.S. Bankruptcy Court, Eastern District New York (Brooklyn).
Peachtree City, Georgia-based Global blamed the new bankruptcy on
decreased flying for the government that reduced revenue for the
first nine months of this year to $354 million from $486 million
in the same period of 2012.
The 2013 petition shows assets and debt both exceeding $500
million. In the first bankruptcy, Global listed $589.8 million in
assets and debt of $493.2 million.
In the 2013 case, the Debtors are represented by Kourtney Lyda,
Esq., at Haynes and Boone, LLP, in Houston, Texas; and Christopher
A. Ward, Esq., at Polsinelli PC, in Wilmington, Delaware.
The first lien agent is represented by Michael L. Tuchin, Esq., at
Klee, Tuchin, Bogdanoff & Stern LLP, in Los Angeles, California.
Wells Fargo Bank, National Association, agent to the second
lienholders and third lienholders, is represented by Mildred
Quinones-Holmes, Esq., at Thompson Hines LLP, in New York.
The Deal reported that World Airways Inc. ceased operations on
March 27, 2014, after its bankrupt parent was unable to secure
necessary funding to keep the charter operator airborne.
GREEN PLAINS: Moody's Assigns B2 CFR & Rates $225MM Debt B2
-----------------------------------------------------------
Moody's Investors Service assigned a B2 Corporate Family Rating
("CFR") to Green Plains Renewable Energy, Inc. ("GPRE") and a B2
rating to the company's proposed $225 million senior secured term
loan issued by Green Plains Processing LLC. GPP is a wholly-owned
subsidiary of publicly-traded GPRE. GPP will be the borrower under
the proposed credit facilities with downstream guarantees from
GPRE and upstream guarantees from subsidiaries that contain six of
GPRE's twelve ethanol facilities. Proceeds from the transaction
will be used to refinance existing debt at the six plants included
in the financing and upstream cash to the parent company. The
rating outlook is stable.
The actions:
Issuer: Green Plains Renewable Energy, Inc.:
Corporate Family Rating, Assigned B2;
Probability of Default Rating, Assigned B2-PD;
Speculative Grade Liquidity Rating, Assigned SGL-2;
Outlook, Stable.
Issuer: Green Plains Processing LLC:
$225 million First Lien Senior Secured Term Loan B due 2020,
Assigned B2 (LGD3 49%);
Outlook, Stable.
The assigned ratings remain subject to Moody's review of the final
terms and conditions of the proposed transaction.
Ratings Rationale
The B2 CFR balances strong credit metrics for the rating category
and expectations for good financial performance in the near term
with significant industry risk and the potential for elevated
earnings volatility over the longer term. Moody's assessment of
the ethanol industry is driven by political uncertainty with
respect to regulatory mandates that support demand, expected
margin volatility from ongoing fluctuations in corn and ethanol
prices, and a highly competitive environment with minimal product
differentiation and better-capitalized competitors. High cash
balances and management's public statements about reducing net
debt are key supporting factors for the rating given Moody's view
of the industry. The rating also benefits from modest cost
advantages relative to smaller ethanol producers evidenced by the
company's operating history during the drought in 2012, non-
ethanol revenue streams from the sale of distillers grain and corn
oil, operational diversity, adequate commodity hedging practices
and liquidity, and some degree of maturation in the ethanol
industry. However, the recent drought and run-up in corn prices
also demonstrated the potential for margin volatility which caused
leverage to rise to over 8 times (Debt/EBITDA) in 2012.
Moody's rating on the term loan incorporates an assessment of the
credit profile of the borrower (GPP) and the parent company
(GPRE). GPRE owns 31 million bushels of grain storage capacity, 12
dry mill ethanol plants with over 1 billion gallons of ethanol
capacity, 250 million pounds of corn oil capacity from units
attached to the ethanol plants, and marketing and distribution
terminals. GPP will include six plants with 450 million gallons of
capacity and 120 million pounds of corn oil production. Important
linkages exist between the two companies that would complicate GPP
from operating as a standalone entity without additional
investment. GPP buys corn from GPRE's grain handling subsidiary
and sells ethanol through GPRE's marketing and distribution
subsidiary. Contractual arrangements with GPRE also result in
significantly less working capital at GPP. These factors reduce
the weight placed on the stronger credit metrics expected at GPP
compared to GPRE. GPRE's credit metrics take into consideration
additional secured debt at each plant-owning subsidiary, grain
handling subsidiary, marketing and distribution subsidiary, and at
the parent company. Moody's estimates adjusted financial leverage
in the low 3 times and interest coverage over 5 times
(EBITDA/Interest) at GPRE on a pro forma basis for the twelve
months ended March 31, 2014. Moody's expects cash will accumulate
at GPRE in the near-term, including the receipt of dividends from
GPP.
Moody's believes that in an adverse scenario GPRE would be highly
likely to support the GPP plants to the extent GPRE has sufficient
financial capacity. GPRE will have a relatively complicated
capital structure with unsecured debt at the parent company and
secured debt at nine different subsidiaries. The secured debt has
various financial maintenance covenants and some near-term
maturities that will need to be addressed. The company has been
able to exercise equity cure provisions to the extent necessary at
the operating subsidiaries, but there are limitations on movement
of cash between legal entities. Unsecured debt at the parent
company level has cross-default provisions that apply to any
default in the capital structure beyond a materiality threshold.
The proposed term loan, situated at an intermediate holding
company, is expected to have cross acceleration provisions.
Significant balance sheet cash reduces the credit impact of these
concerns.
The SGL-2 Speculative Grade Liquidity Rating reflects good
liquidity with almost $400 million of available liquidity and
equity cure provisions at subsidiary-level debt. Moody's expect
the company will have about $250 million of cash at closing and
generate positive free cash flow in the near-term. The company
also reported over $138 million of combined availability on two
asset-based revolving credit facilities, $130 million asset-based
revolving credit facility at Green Plains Grain and $125 million
asset-based revolving credit facility at Green Plains Trade, and
other revolving facilities at subsidiaries. Moody's expects the
company will be able to comply or have sufficient cash to cure all
financial maintenance covenants across the structure.
The stable outlook assumes that Green Plains will benefit from
relatively favorable dynamics in the US ethanol industry over the
next year or two. Moody's believes that the EPA will reduce
ethanol blending requirements to levels that are consistent with
at least a 10% gasoline blend rate, which would keep capacity
utilization rates elevated in the ethanol industry. The outlook
also assumes that GPRE will utilize free cash flow to reduce debt,
build cash, and continue to simplify the capital structure over
the next 12-18 months. Moody's could downgrade the rating with
expectations for sustained leverage above 5 times, available
liquidity below $300 million, or balance sheet cash below $200
million. Adverse regulatory developments could also have negative
rating implications. Moody's could upgrade the rating if the
company moves away from plant-level financing and builds up cash
balances to well over $400 million.
Green Plains Renewable Energy, Inc. is a publicly-traded ethanol
producer. GPRE owns 31 million bushels of grain storage, 12 dry
mill ethanol plants with over 1 billion gallons of capacity, 250
million pounds of corn oil production from unit attached to the
ethanol plants, and marketing and distribution terminals. Green
Plains Processing LLC is a wholly-owned subsidiary of GPRE. GPP
contains six of GPRE's twelve ethanol plants and the associated
corn oil assets. GPP plants include Atkinson, Bluffton, Central
City, Ord, Otter Tail, and Shenandoah. GPRE and GPP generated $3.1
billion and $1.2 billion of revenue, respectively, for the twelve
months ended March 31, 2014.
GREENSTAR AGRICULTURAL: OSC Grants Temporary MCTO
-------------------------------------------------
GreenStar Agricultural Corporation on May 6 disclosed that the
Company has paid its quarterly dividend of $0.015/share in respect
of the first quarter of 2014. This dividend payment is the fifth
consecutive quarterly dividend payment made by the GreenStar and
represents an increase of 50% over the previous dividend payments.
GreenStar also provided additional background with respect to the
news release issued on April 28, 2014 and the Company's
application for the issuance of a management and insider cease
trade order ("MCTO"). GreenStar voluntarily made an application
to the securities commissions of Ontario, British Columbia and
Alberta for a MCTO once management became reasonably certain that
the Company's audited annual financial statements for the fiscal
year ended December 31, 2013 and related Management's Discussion &
Analysis, and CEO and CFO certification of filings (collectively,
the "Annual Filings") would be delayed.
Mr. Guan Lianyun, GreenStar's CEO commented, "GreenStar management
continues to work with the Company's auditors and is placing their
highest priority on completing the Annual Filings and will provide
further updates as soon as information is available. We are
confident we will be successful in completing the audit in short
order and are looking forward to continuing our efforts to absorb
our Bei Chen acquisition and continue our efforts to grow."
In respect of the MCTO, the Ontario Securities Commission ("OSC").
the principal regulator of the Company, issued a Temporary MCTO on
May 5, which imposes restrictions on all trading in and all
acquisitions of securities of the Company, whether direct or
indirect, by the Chief Executive Officer and the Chief Financial
Officer of the Company for a period of 15 days. The Temporary
MCTO will not affect the ability of persons who are not insiders
of GreenStar to trade its securities. The OSC has given notice of
a hearing to be held on within 15 days of the Temporary MCTO for
the purposes of making the Temporary MCTO permanent (which is
expected to continue to only restrict management and insiders in
the trading of securities) if the Company has not remedied the
default in filing the Annual Filings. GreenStar intends to satisfy
the provisions of the Alternative Information Guidelines as set
out in National Policy 12 - 203 for as long as GreenStar remains
in default, including the issuance of further by-weekly default
status reports, each of which will be issued in the form of a
press release. A general cease trade order may be issued if
GreenStar fails to file such default status reports on a timely
basis. The Company is working diligently to ensure that its
Annual Filings are brought up to date well before a general cease
trade order would be applicable.
About GreenStar
GreenStar -- http://www.greenstaragricultural.com-- operates two
main divisions, agricultural and food processing. The
agricultural division is involved in the cultivation and
harvesting of agricultural products such as fresh fruit and
vegetables, for sale either directly as fresh fruit and vegetables
or canned, and sold overseas and domestically. The food
processing division is primarily involved in the processing of
canned food, which includes canned tomato paste, canned boiled
bamboo shoots, canned oranges, canned peaches and various other
types of fruits and vegetables.
GreenStar has been operating for over 19 years. Through the
application of science and technology in production, quality
control and assurance, and business operations and management,
GreenStar has focused on maintaining product and reputational
excellence with a high standard of food quality. Key assets
include a well established management team, modern production
facilities, and a close partnership with local farmers.
GreenStar Agricultural Corp. is listed on the TSX Venture Exchange
under the symbol "GRE".
GSE ENVIRONMENTAL: Proposes $45-Mil. of DIP Financing
-----------------------------------------------------
GSE Environmental, Inc. and its debtor-affiliates won interim
approval from U.S. Bankruptcy Judge Mary F. Walrath to access $35
million of the $45 million DIP financing package being provided by
funds affiliated with Littlejohn & Co., LLC, Tennenbaum Capital,
Partners, LLC, and Strategic Value Partners, LLC.
The bankruptcy court will convene a hearing on June 2, 2014, at
11:30 a.m. to consider final approval of the motion and allow the
Debtors to access the remaining $10 million.
In their motion to access DIP financing and use cash collateral,
the Debtors explained that they require immediate access to
liquidity to ensure that they are able to continue operating
during the Chapter 11 cases and preserve the value of their
estates for the benefit of all parties-in-interest. Among other
things, the DIP Facility proceeds will be used to honor employee
wages and benefits, procure goods and services integral to the
Debtors' ongoing business operations, fund certain operational
expenses, maintain ordinary course relationships with vendors,
suppliers, and customers, and satisfy working capital needs in the
ordinary course.
According to proposed counsel, Laura Davis Jones, Esq., at
Pachulski Stang Ziehl & Jones LLP, the Debtors have successfully
negotiated a delayed-draw term loan facility that generally
provides:
* $45,000,000 secured by consensual, first priority priming
liens on substantially all the Debtors' assets, subject only
to liens that were senior to the liens of the prepetition
secured parties as of the Petition Date;
* borrowings and disbursements to be made pursuant to the
terms of an agreed 13-week budget;
* an initial interim advance of up to $35,000,000 to be
available upon entry of the Interim DIP Order and
satisfaction of other conditions, followed by periodic
borrowings after entry of the final order; and
* a scheduled maturity date of the earlier of six months after
the Petition Date or consummation of the Plan, with
additional, customary termination events.
* Interest rate for the DIP loans at LIBOR plus 9.5 percent,
with a LIBOR floor of 1.5 percent (plus 2.0 percent upon
default).
* Chapter 11 milestones that include:
-- The Final DIP Order will be entered within 28 days
after the entry of the Interim DIP Order;
-- The order approving the disclosure statement and
solicitation materials related thereto and setting a
hearing to confirm the Plan shall be entered by the
Court within 45 days of the Petition Date.
-- The order confirming the Plan shall be entered by the
Court within 45 days of the Court's entry of the
solicitation order.
-- The effective date of the Plan will have occurred
within 21 days of the confirmation order.
* To the extent of any diminution in the value of any cash
collateral as a result of (i) the use, sale, or lease of
cash collateral, (ii) the granting of priming liens to
secure the DIP Facility, adequate protection in favor of the
prepetition first-lien lenders in the form of replacement
liens, a superpriority claim under 11 U.S.C. Sec. 507(b),
and payment of professional fees.
A copy of the Interim DIP Financing Order is available for free
at: http://bankrupt.com/misc/GSE_Interim_DIP_Order.pdf
Other First Day Motions
The Debtors on the Petition Date filed customary first-day
motions. The motions include a request to continue and renew
their surety bond program, under which the Debtors provide surety
bonds to certain third parties to secure the Debtors' payment or
performance of certain obligations. As of the Petition Date, the
Debtors have $820,000 in outstanding surety bonds.
About GSE Environmental
GSE Environmental -- http://www.gseworld.com-- is a global
manufacturer and marketer of geosynthetic lining solutions,
products and services used in the containment and management of
solids, liquids and gases for organizations engaged in waste
management, mining, water, wastewater and aquaculture.
Headquartered in Houston, Texas, USA, GSE maintains sales offices
throughout the world and manufacturing facilities in the US,
Chile, Germany, Thailand, China and Egypt.
GSE Environmental, Inc. and its affiliates filed for Chapter 11
bankruptcy protection (Bankr. D. Del. Lead Case No. 14-11126) on
May 4, 2014 as part of a restructuring support agreement with
their lenders. The Debtors are seeking joint administration of
their Chapter 11 cases.
GSE announced an agreement with its lenders to restructure its
balance sheet by converting all of its outstanding first lien debt
to equity, leaving the Company well-positioned for long-term
growth and profitability.
The Company has tapped Kirkland & Ellis LLP and Pachulski Stang
Ziehl & Jones LLP as counsel, Alvarez & Marsal North America, LLC,
as restructuring advisor, and Moelis & Company, as financial
advisor. The first lien lenders are represented by Wachtell,
Lipton, Rosen & Katz. Prime Clerk is the Debtors' claims agent.
GSE Environmental's non-U.S. subsidiaries are not included in the
U.S. Chapter 11 filings and will continue to operate in the
ordinary course without interruption.
GSE ENVIRONMENTAL: Proposes Prime Clerk as Claims Agent
-------------------------------------------------------
GSE Environmental, Inc. and its affiliates ask the bankruptcy
court for approval to employ Prime Clerk LLC as claims and
noticing agent in the chapter 11 cases.
For its claims and noticing services, Prime Clerk will charge the
Debtors at these hourly rates:
Hourly Rate
-----------
Analyst $45
Technology Consultant $130
Consultant $140
Senior Consultant $170
Director $195
For the firm's solicitation, balloting and tabulation services,
the rates are:
Hourly Rate
-----------
Solicitation Consultant $195
Director of Solicitation $210
The firm will charge $0.10 per page for printing, $0.10 per page
for fax noticing and no charge for e-mail noticing. Hosting of
the case Web site is free of charge and on-line claim filing
services are free of charge. For data administration and
management, the firm will charge $0.10 per record per month for
data storage, maintenance and security.
Prior to the Petition Date, the Debtors provided Prime Clerk a
retainer in the amount of $40,000.
Benjamin P.D. Schrag, executive vice president of Prime Clerk,
represents that it neither holds nor represents any interest
materially adverse to the Debtors' estates in connection with any
matter on which it would be employed.
GSE filed a separate application to employ Prime Clerk as
administrative advisor because the administration of the Chapter
11 cases will require Prime Clerk to perform duties outside the
scope of 28 U.S.C. Sec. 156(c).
The claims agent can be reached at:
PRIME CLERK LLC
830 3rd Avenue, 9th Floor
New York, NY 10022
Attn: Shai Waisman
Tel: (212) 257-5450
E-mail: swaisman@primeclerk.com
About GSE Environmental
GSE Environmental -- http://www.gseworld.com-- is a global
manufacturer and marketer of geosynthetic lining solutions,
products and services used in the containment and management of
solids, liquids and gases for organizations engaged in waste
management, mining, water, wastewater and aquaculture.
Headquartered in Houston, Texas, USA, GSE maintains sales offices
throughout the world and manufacturing facilities in the US,
Chile, Germany, Thailand, China and Egypt.
GSE Environmental, Inc. and its affiliates filed for Chapter 11
bankruptcy protection (Bankr. D. Del. Lead Case No. 14-11126) on
May 4, 2014 as part of a restructuring support agreement with
their lenders. The Debtors are seeking joint administration of
their Chapter 11 cases.
GSE announced an agreement with its lenders to restructure its
balance sheet by converting all of its outstanding first lien debt
to equity, leaving the Company well-positioned for long-term
growth and profitability.
GSE has arranged a $45 million debtor-in-possession (DIP)
financing facility to fund the Chapter 11 process.
The Company has tapped Kirkland & Ellis LLP and Pachulski Stang
Ziehl & Jones LLP as counsel, Alvarez & Marsal North America, LLC,
as restructuring advisor, and Moelis & Company, as financial
advisor. The first lien lenders are represented by Wachtell,
Lipton, Rosen & Katz. Prime Clerk is the Debtors' claims agent
and maintains a case Web site at http://cases.primeclerk.com/gse
GSE Environmental's non-U.S. subsidiaries are not included in the
U.S. Chapter 11 filings and will continue to operate in the
ordinary course without interruption.
GSE ENVIRONMENTAL: Proposes to Pay $4.1-Mil. to Critical Vendors
----------------------------------------------------------------
GSE Environmental, Inc. and its debtor-affiliates filed a motion
asking the bankruptcy court for approval to pay prepetition claims
held by critical vendors in an amount not to exceed $2.6 million
on an interim basis and $4.1 million on a final basis.
Judge Mary Walrath recently granted interim approval to the
Motion. The final hearing is slated for June 2 at 11:30 a.m.
The Debtors explain that in many instances, the critical vendors
are the sole or limited-source providers of raw, materials,
chemical additives, parts and services specific to the Debtors'
operations and infrastructure.
Following an analysis, the Debtors identified 20 vendors as
critical vendor candidates. As of the Petition Date, the Debtors
believe they owe the critical vendor candidates approximately $4.1
million. As such, the $4.1 million of requested relief is 22% of
the Debtors' accrued and trade payables of $18.2 million. The
Debtors are only seeking relief to pay $2.6 million of the
critical vendor claims during the first 21 days of their Chapter
11 cases.
About GSE Environmental
GSE Environmental -- http://www.gseworld.com-- is a global
manufacturer and marketer of geosynthetic lining solutions,
products and services used in the containment and management of
solids, liquids and gases for organizations engaged in waste
management, mining, water, wastewater and aquaculture.
Headquartered in Houston, Texas, USA, GSE maintains sales offices
throughout the world and manufacturing facilities in the US,
Chile, Germany, Thailand, China and Egypt.
GSE Environmental, Inc. and its affiliates filed for Chapter 11
bankruptcy protection (Bankr. D. Del. Lead Case No. 14-11126) on
May 4, 2014 as part of a restructuring support agreement with
their lenders. The Debtors are seeking joint administration of
their Chapter 11 cases.
GSE announced an agreement with its lenders to restructure its
balance sheet by converting all of its outstanding first lien debt
to equity, leaving the Company well-positioned for long-term
growth and profitability.
GSE has arranged a $45 million debtor-in-possession (DIP)
financing facility to fund the Chapter 11 process.
The Company has tapped Kirkland & Ellis LLP and Pachulski Stang
Ziehl & Jones LLP as counsel, Alvarez & Marsal North America, LLC,
as restructuring advisor, and Moelis & Company, as financial
advisor. The first lien lenders are represented by Wachtell,
Lipton, Rosen & Katz. Prime Clerk is the Debtors' claims agent.
GSE Environmental's non-U.S. subsidiaries are not included in the
U.S. Chapter 11 filings and will continue to operate in the
ordinary course without interruption.
GSE ENVIRONMENTAL: Limiting Equity Transfers to Save NOLs
---------------------------------------------------------
GSE Environmental, Inc. and its debtor-affiliates are asking the
bankruptcy court for approval to implement procedures regarding
certain purchases or transfers of equity securities to protect
their net operating losses.
The Debtors have net operating losses ("NOLs") in an amount of
$33.4 million as of Dec. 31, 2013. The Debtors also have
significant tax credits in an amount of $16.3 million as of Dec.
31, 2013. The Debtors anticipate that utilization of the NOLs and
tax credits in future tax years may generate up to approximately
$29.7 million in cash savings from reduced taxes assuming an
effective combined state and federal tax rate of 40 percent for
the post-emergence company.
Because an "ownership change" may negatively impact their
utilization of their NOL carryforwards and other tax attributes,
the Debtors proposed these procedures:
* Any "substantial shareholder" -- entity that has beneficial
ownership of 4.5 percent or more of the Debtors' equity
securities must serve and file a declaration.
* Prior to effectuating any transfer of the equity securities
that would result in another entity becoming a substantial
shareholder, the parties to such transaction must serve and
file a notice of the intended stock transaction.
* The Debtors have 30 calendar days after receipt of the stock
transaction notice to object to the proposed transaction.
* If the Debtors do not object, the proposed transaction may
proceed.
* Any transfer of the equity securities in violation of the
procedures will be null and void ab initio.
The Debtors also propose these procedures for declarations of
worthlessness of their equity securities:
* Any person or entity that has beneficial ownership of 50% or
more of the equity securities must serve and file a declaration.
* Prior to filing any federal or state tax return, or any
amendment to such a return, claiming any deduction for
worthlessness of the equity securities for a tax ending year
before the Debtors' emergence from Chapter 11, such a 50 percent
or more of the equity securities must serve and file a declaration
of the proposed deduction.
* The Debtors have 30 calendar days after receipt of a
declaration of proposed deduction to object to the proposed
action.
* If the Debtors timely object, the proposed deduction remains
ineffective pending a ruling thereafter on the merits.
* If the Debtors do not object, the proposed deduction may
proceed solely as described in the declaration of proposed
deduction.
As of the Petition Date, one financial sponsor beneficially owns
more than 50 percent of the equity securities, and another holder
beneficially owns more than 4.5 percent of the equity securities.
The Debtors' motion has been granted by Judge Mary F. Walrath on
an interim basis. A final hearing is slated for June 2, 2014, at
11:30 a.m. Objections are due May 27.
About GSE Environmental
GSE Environmental -- http://www.gseworld.com-- is a global
manufacturer and marketer of geosynthetic lining solutions,
products and services used in the containment and management of
solids, liquids and gases for organizations engaged in waste
management, mining, water, wastewater and aquaculture.
Headquartered in Houston, Texas, USA, GSE maintains sales offices
throughout the world and manufacturing facilities in the US,
Chile, Germany, Thailand, China and Egypt.
GSE Environmental, Inc. and its affiliates filed for Chapter 11
bankruptcy protection (Bankr. D. Del. Lead Case No. 14-11126) on
May 4, 2014 as part of a restructuring support agreement with
their lenders. The Debtors are seeking joint administration of
their Chapter 11 cases.
GSE announced an agreement with its lenders to restructure its
balance sheet by converting all of its outstanding first lien debt
to equity, leaving the Company well-positioned for long-term
growth and profitability.
GSE has arranged a $45 million debtor-in-possession (DIP)
financing facility to fund the Chapter 11 process.
The Company has tapped Kirkland & Ellis LLP and Pachulski Stang
Ziehl & Jones LLP as counsel, Alvarez & Marsal North America, LLC,
as restructuring advisor, and Moelis & Company, as financial
advisor. The first lien lenders are represented by Wachtell,
Lipton, Rosen & Katz. Prime Clerk is the Debtors' claims agent.
GSE Environmental's non-U.S. subsidiaries are not included in the
U.S. Chapter 11 filings and will continue to operate in the
ordinary course without interruption.
HOUSTON, TX: Moody's Assigns 'B2' Rating to $308MM Airport Bonds
----------------------------------------------------------------
Moody's Investors Service assigned a B2 senior unsecured rating to
the planned $308 million issuance of City of Houston, Texas
Airport System Special Facilities Revenue Refunding Bonds ("2014
Bonds").
Assignments:
Issuer: Houston (City of) TX
Senior Unsecured Revenue Bonds, Assigned B2
Senior Unsecured Revenue Bonds, Assigned a range of LGD4, 54 %
Ratings Rationale
The rating of the 2014 Bonds is based on the B2 unsecured rating
assigned to United Airlines, Inc., ("United") the operating
subsidiary of its parent holding company, United Continental
Holdings, Inc. (B2 CFR, Positive). The 2014 Bonds will be
guaranteed on an unsecured basis by United, and payments of
interest and principal will be funded by special facilities lease
payments by United to an assigned trustee of the City of Houston
for as long as the bonds are outstanding on an unconditional
basis. Proceeds of the 2014 Bonds will be used to refinance
existing Series 2001 bonds that were originally issued to fund the
construction of George Bush Intercontinental Airport's Terminal E
Project, which includes a 625,000 square foot international
passenger terminal, 23 aircraft gates, and 100,000 additional
square feet of airport related facilities. The B2 rating assigned
to the Series 2001 bonds will be withdrawn upon their payoff.
The principal methodology used in this rating was the Global
Passenger Airlines published in May 2012. Other methodologies used
include Loss Given Default for Speculative-Grade Non-Financial
Companies in the U.S., Canada and EMEA published in June 2009.
United Continental Holdings, Inc. (NYSE: UAL) is the holding
company for United Airlines. UAL's airline operating companies
operate an average of more than 5,200 flights a day to 369
airports on six continents from their hubs in Chicago, Cleveland,
Denver, Guam, Houston, Los Angeles, New York/Newark Liberty, San
Francisco, Tokyo and Washington, D.C.
HOWREY LLP: Trustee Cuts $4.2 Million Deal With Ex-Partners
-----------------------------------------------------------
Sara Randazzo, writing for The Wall Street Journal, reported that
a group of former Howrey LLP partners have agreed to pay more than
$4.2 million to the defunct law firm's bankruptcy estate through a
settlement that Howrey's trustee calls a crucial step toward
constructing a plan to pay back creditors.
According to the report, the proposed settlement, filed in U.S.
Bankruptcy Court in San Francisco, includes contributions of
between $21,000 and $192,000 each from 60 of the firm's former
equity partners. Howrey trustee Allan Diamond sought to claw back
money that the partners were paid when the firm was allegedly
insolvent.
Mr. Diamond said he reached the deal after nearly two years of
negotiations and will use the outlines of the settlement -- which
calls for partners to return 16% of what they earned between April
2010 and the firm's dissolution a year later -- to reach similar
deals with the rest of the firm's former partners, the report
related. Mr. Diamond, a name partner at Texas firm Diamond
McCarthy LLP, said he will sue any of the 70 or so remaining
partners who refuse to settle.
"I'm feeling pretty good about this," Mr. Diamond said, noting
that it is rare in law firm bankruptcies to claw back such a large
percentage of money from former partners, the report further
related. Dewey & LeBoeuf LLP's Chapter 11 case also benefited
from a settlement with former partners, one that brought in $70.4
million from 475 ex-Dewey lawyers.
Agreeing to settle was not an easy decision for the former Howrey
partners, said David Stern of Klee, Tuchin, Bogdanoff & Stern LLP,
who represents all 60 of the settling partners, the report said.
About Howrey LLP
Three creditors filed an involuntary Chapter 7 petition (Bankr.
N.D. Cal. Case No. 11-31376) on April 11, 2011, against the
remnants of the Washington-based law firm Howrey LLP. The filing
was in San Francisco, where the firm had an office. The firm
previously was known as Howrey & Simon and Howrey Simon Arnold &
White LLP. The firm at one time had more than 700 lawyers in 17
offices. The partners voted to dissolve in March 2011.
The firm specialized in antitrust and intellectual-property
matters. The three creditors filing the involuntary petition
together have $36,600 in claims, according to their petition.
The involuntary chapter 7 petition was converted to a chapter 11
case in June 2011 at the request of the firm. In its schedules
filed in July, the Debtor disclosed assets of $138.7 million and
liabilities of $107.0 million.
Representing Citibank, the firm's largest creditor, is Kelley
Cornish, Esq., a partner at Paul, Weiss, Rifkind, Wharton &
Garrison. Representing Howrey is H. Jason Gold, Esq., a partner
at Wiley Rein.
The Official Committee of Unsecured Creditors is represented in
the case by Bradford F. Englander, Esq., at Whiteford, Taylor And
Preston LLP.
In September 2011, Citibank sought conversion of the Debtor's case
to Chapter 7 or, in the alternative, appointment of a Chapter 11
Trustee. The Court entered an order appointing a Chapter 11
Trustee. In October 2011, Allan B. Diamond was named as Trustee.
He is represented by Andrew Baxter Ryan, Esq., and Stephen Todd
Loden, Esq., at Diamond McCarthy LLP as counsel.
IN PLAY MEMBERSHIP: Says Fourth Amended Plan Should Be Confirmed
----------------------------------------------------------------
In Play Membership Golf, Inc., says its Fourth Amended Plan of
Reorganization should be confirmed.
The Debtor filed the Fourth Amended Plan and accompanying
disclosure statement on March 7, 2014.
In its ballot report, the Debtor says that all classes which have
voted on the Plan have voted to accept the Plan. With respect to
holders of unsecured claims (Class 8), Meadow Ranch Master
Association (with $157,620 claim) rejected the Plan, while
Prestige Flag ($227 claim) voted to accept the Plan. The Debtor,
however, pointed out that MRMA's claim is disputed and therefore
not an "allowed" claim, and therefore was not counted.
In a document offer of proof in lieu of direct testimony with
respect to confirmation of the Plan, Stacey Hart, president of the
Debtor, testifies, among other things, that the Plan has been
proposed in good faith and not by any means forbidden by law.
The Debtor avers that the Plan should be confirmed notwithstanding
the four objections to confirmation from these parties:
a. Ken-Caryl Ranch Master Association;
b. First National Bank of Santa Fe (Mile High Banks);
c. Maya Water, Inc.; and
d. Meadow Ranch Master Association.
Plan Objections
Mile High in its objection notes that the Debtor and Mile High
have negotiated the terms of the Plan as it relates to the
treatment of Mile High's claims. Mile High objects to the Plan to
the extent the Debtor fails to comply with Section 4.4 of the
Plan, which provides, inter alia:
a. Stacey Hart, the Debtor's manager, is required to have filed
by the confirmation date all tax returns for himself, the Debtor,
and Eagle Mountain Golf Club, LLC.
b. Stacey Hart and the Debtor shall agree to the appointment of
an independent manager for the Debtor's golf courses.
c. All of the Debtor's post-petition taxes and vendors are to
be paid current.
d. The Debtor will be in compliance with all regulatory and
taxing authority requirements, including the timely filing of all
tax returns.
Meadow Ranch, which asserts a $157,620 prepetition claim against
the Debtor arising from the need for replacement of a driving
range barrier netting at the Deer Creek Golf Course, pointed out
that the Debtor assured at the Feb. 28 disclosure statement that
it would be replacing the driving range netting in 30 to 45 days.
MMRA says that the failure to repair or replace the netting and
treatment of its claim under the Plan would be inequitable because
the claim involves the health and safety to persons and property
at the golf course.
Maya says it objects to the assumption of the Water Lease under
sections 365 and/or 1123(b)(2) of the Bankruptcy Code since the
Debtor has failed both to cure pre and post petition defaults
under the Water Lease and to provide adequate assurance of future
performance.
Maya Water is represented by:
M. Frances Cetrulo, Esq.
John L. Watson, Esq.
BERENBAUM WEINSHIENK PC
370 17th Street, #4800
Denver, CO 80202
Tel: (303) 825-0800
Meadow Ranch is represented by:
Curt Todd, Esq.
LAW OFFICE OF CURT TODD, LLC
837 E. 17th Avenue, Suite 102
Denver, CO 80218
Tel: (303) 955-1184
Fax: (303) 830-9310
E-mail: ctodd@templelaw.comcastbiz.net
Debtor's Response
With respect to the objection of Ken-Caryl Ranch Master
Association, the Debtor filed an erratum to the Plan addressing
the typographical error raised by the objection. The Plan now
provides:
The Allowed Secured Claim of the Class 7 creditor shall be
paid by the Class 7 creditor retaining its lien(s) securing
its claim to the same extent and in the same priority as its
prepetition lien(s) and receiving monthly payments of
principal and interest at the rate of 10% per annum
amortized over a period equal to sixty (60) months less the
number of months from the Petition Date to the Confirmation
Date.
As to the objection of Mile High, the objection requires no
response other than to note that it is a "place holder objection"
and, presumably, will not present any issues at confirmation.
Concerning the objection filed by Maya Water, Inc., final drafts
of an agreement to assume the Water Lease are being circulated by
the parties and it is anticipated that the agreement will be fully
approved and/or signed prior to confirmation.
With respect to the "objection" of Meadow Ranch Master
Association, the Debtor responds as follows:
a. In actuality, the objection is a complaint for injunctive
relief clothed in the form of an objection to confirmation. The
objection requests relief which, it is submitted, the Court cannot
or should not give, particularly in the context of a confirmation
hearing, and it requests relief which is speculative in nature.
Indeed, the relief requested is anticipatory of events which have
not occurred and may never occur. Moreover, should such events
arise, Meadow Ranch is more than able to file whatever litigation
it deems appropriate in state court to vindicate its rights, if
any.
b. It is submitted that the objection is nothing more than an
attempt to obfuscate the provisions of Section 1129 which will
have all been satisfied by the date of the confirmation hearing.
Furthermore, notwithstanding the fact that Meadow Ranch has filed
a ballot rejecting the Plan, given that its claim is not an
allowed claim and is in the process of being disputed through an
adversary proceeding, the ballot report filed on April 21, 2014
demonstrates that all classes voting on the Plan have voted in
favor of the Plan, all classes not voting on the Plan are deemed
to have accepted the Plan, and, accordingly, the Plan is
confirmable. The Debtor believes that the objection of Meadow
Ranch should be disregarded and therefore, overruled.
The Chapter 11 Plan
The previous versions of the Plan focused on 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 the 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 the
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.
A full-text copy of the Fourth Amended Disclosure Statement is
available at http://bankrupt.com/misc/INPLAYds0307.pdf
The Plan provides that:
-- On the Effective Date, Debtor shall pay Mile High Banks
$500,000.
-- Upon the Effective Date, Mile High Banks shall provide
Debtor with a $200,000 secured line of credit with a fixed
interest rate of 6% to be paid monthly (interest only) and which
will mature on the Closing Date. The line of credit will be used
exclusively for ordinary course expenses related to the operation
of the golf course.
About In Play Membership Golf
In Play Membership Golf, Inc., owns and operates the Plum Creek
Golf and Country Club and the Deer Creek Golf Club, two-18-hole
golf courses, clubhouses, driving ranges and other amenities
located in Castle Rock and Littleton, Colorado, respectively.
In Play 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. Mile High Banks is the Debtor's largest secured
creditor, asserting claims arising out of two promissory notes
that aggregate in excess of $10 million.
IN PLAY MEMBERSHIP: Proposes Management Agreement With BCG
----------------------------------------------------------
In Play Membership Golf, Inc., and First National Bank of Santa
Fe, a national bank, formerly known as Mile High Banks, ask the
bankruptcy court to approve a management agreement with Billy
Casper Golf, LLC.
BCG is in the business of managing golf courses and country clubs.
The Debtor and Mile High have been negotiating the terms of the
Debtor's plan of reorganization as it relates to the treatment of
Mile High's claims. Subject to Bankruptcy Court approval, the
parties have agreed that BCG will be retained to manage the
Courses according to the terms of a Management Agreement.
Counsel to the Debtor, Antonio L. Converse, Esq., at Allen &
Vellone, P.C., explains that among other things, the Management
Agreement provides:
(a) BCG intends to form two wholly-owned single-purpose
subsidiary entities registered to do business in the State of
Colorado, Plum Creek Golf Management, LLC ("PCGM") and Deer Creek
Golf Management LLC ("DCGM"), for the purpose of performing some
or all of the services.
(b) BCG, through PCGM and DCGM, will have the exclusive right to
supervise and direct the management and operation of the Courses.
All personnel employed at the Courses will at all times be
employees of PCGM and DCGM.
(c) The Debtor will provide initial funding in the amount of
$100,000 for operations of both Courses and will at all times
ensure that minimum funds balance of $100,000 is maintained with
BCG. The Debtor and Mile High have filed contemporaneously an
expedited joint motion for order authorizing interim and final
postpetition financing. The financing motion seeks authorization
for Mile High to provide up to $100,000 in postpetition financing
to Debtor. If the financing motion is granted, the financing
contemplated therein will be used as either additional initial
funding, not to exceed $200,000, or to replenish the minimum funds
balance.
(d) BCG will operate the courses pursuant to budgets reflecting
anticipated revenues and expenses for the Courses.
(e) BCG will create, direct, and implement an annual marketing
plan for the Courses.
(f) BCG will provide separate budgeting, bookkeeping and
reporting services to the Debtor for the Courses.
(g) BCG will be paid a base management fee for its services in
the amount of $13,500 per month. In addition, BCG will be
entitled to earn an Incentive Management Fee for each full
calendar six-month period during the Term calculated as 20% of the
positive Net Operating Income in excess of the Net Operating
Income reflected on Owner's monthly operating reports filed in the
Bankruptcy Case for the same six month period in 2013, adjusted
for payments for property taxes and insurance.
(h) In operating the Courses, BCG will establish separate
checking accounts under its name or the names of the subsidiaries.
Prior to the Effective Date of the Debtor's Plan, all Available
Funds (revenues minus operating expenses and the Minimum Funds
Balance) will be paid into the Debtor's DIP accounts. After the
Effective Date of the Plan, Available Funds will be paid to the
Debtor to meet its obligations under the Plan, satisfy
professional fees and pay expenses under an agreed upon budget.
(i) BCG will maintain separate general liability, crime, D&O,
and worker's compensation insurance as is necessary, in addition
to insurance currently maintained by the Debtor.
(j) Capital Improvements to the Courses, as reflected in the
budget, will be made as necessary.
(k) The Debtor may terminate the Management Agreement. The
Management Agreement may also be terminated upon the sale of the
courses or the transfer of Mile High's loans. In such event, BCG
will be paid a Cancellation Fee of $50,000.
Subsequent to the Bankruptcy Court's approval of the Management
Agreement, the Debtor will continue to receive revenues generated
from the Courses in the form of Available Funds, maintain accounts
according to UST Operating Guidelines, file monthly operating
reports and conduct itself as a debtor-in-possession under the
Bankruptcy Code.
Mile High is represented by:
Chad S. Caby, Esq.
Brent R. Cohen, Esq.
LEWIS ROCA ROTHGERBER LLP
1200 17th Street, Suite 3000
Denver, CO 80202-5855
Tel: 303-623-9000
Fax: 303-623-9222
E-mail: bcohen@LRRLaw.com
ccaby@LRRLaw.com
About In Play Membership Golf
In Play Membership Golf, Inc., owns and operates the Plum Creek
Golf and Country Club and the Deer Creek Golf Club, two-18-hole
golf courses, clubhouses, driving ranges and other amenities
located in Castle Rock and Littleton, Colorado, respectively.
In Play 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. Mile High Banks is the Debtor's largest secured
creditor, asserting claims arising out of two promissory notes
that aggregate in excess of $10 million.
INVENT VENTURES: Paritz & Company Raises Going Concern Doubt
------------------------------------------------------------
INVENT Ventures, Inc., filed with the U.S. Securities and Exchange
Commission last month its annual report on Form 10-K for the year
ended Dec. 31, 2013.
Paritz & Company, P.A., expressed substantial doubt about the
Company's ability to continue as a going concern, citing that the
Company will need to raise capital through sales of Company stock
to provide sufficient cash flow to fund the Company's operations.
The Company reported net loss from operations of $958,550 on
$144,144 of total revenues in 2013, compared with a net loss from
operations of $857,634 on $105,987 of total revenues in 2012.
The Company's balance sheet at Dec. 31, 2013, showed $10.12
million in total assets, $1.49 million in total liabilities, and
stockholders' equity of $8.63 million.
A copy of the Form 10-K is available at:
http://is.gd/tqE5JF
About INVENT Ventures
Las Vegas, Nevada-based INVENT Ventures, Inc., formerly known as
Los Angeles Syndicate of Technology, Inc., is a technology venture
fund that creates, builds, and invests in web and mobile
technology companies. The Company develops businesses in the
consumer Internet, mobile and biotechnology markets, and owns six
companies at different stages of development.
ISTAR FINANCIAL: Files Form 10-Q, Had $26.6MM Net Loss in Q1
------------------------------------------------------------
iStar Financial Inc. filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
allocable to common shareholders of $26.57 million on $108.74
million of total revenues for the three months ended March 31,
2014, as compared with a net loss allocable to common shareholders
of $41.26 million on $94.05 million of total revenues for the same
period last year.
As of March 31, 2014, the Company had $5.48 billion in total
assets, $4.21 billion in total liabilities, $11.35 million in
redeemable noncontrolling interest and $1.26 billion in total
equity.
A copy of the Form 10-Q is available for free at:
http://is.gd/UT9eGn
About iStar Financial
New York-based iStar Financial Inc. (NYSE: SFI) provides custom-
tailored investment capital to high-end private and corporate
owners of real estate, including senior and mezzanine real estate
debt, senior and mezzanine corporate capital, as well as corporate
net lease financing and equity. The Company, which is taxed as a
real estate investment trust, provides innovative and value added
financing solutions to its customers.
* * *
In March 2013, Fitch Ratings affirmed iStar's 'B-' issuer default
rating and revised the outlook to "positive" from "stable." The
revision of the outlook to positive is based on the company's
demonstrated access to the unsecured debt market, which, combined
with certain secured debt refinancings, have significantly
improved SFI's near-term debt maturity profile.
As reported by the TCR on Oct. 5, 2012, Standard & Poor's Ratings
Services affirmed its 'B+' long-term issuer credit rating on iStar
Financial.
In October 2012, Moody's Investors Service upgraded the corporate
family rating to B2 from B3. The current rating reflects the
REIT's success in extending near term debt maturities and
improving fundamentals in commercial real estate. The ratings on
the October 2012 senior secured credit facility takes into account
the asset coverage, the size and quality of the collateral pool,
and the term of facility.
JASON WISNIEWSKI: $100,000 of Gould Debt Not Dischargeable
----------------------------------------------------------
Scott Gould and Katherine Gould seek to have a debt against Jason
Wisniewski and Christine Wisniewski declared nondischargeable
under Bankruptcy Code 11 U.S.C. Sections 523(a)(2) and (a)(6).
The Plaintiffs' claim arose from their $250,000 loan made to
permit the Debtors to build out and make other improvements to
space they used to open a restaurant in Mesa, AZ. In a May 5,
2014 Memorandum Decision available at http://is.gd/QN9UX9from
Leagle.com, Bankruptcy Judge Eileen W. Hollowell ruled that the
Plaintiffs will be awarded a nondischargeable judgment in the
principal amount of $100,000.
Among their assets, the Debtors own a million-dollar home in
Phoenix. Christine owns a vacation home in her native Croatia
overlooking the Adriatic Sea.
The Debtors filed a voluntary chapter 11 petition (Bankr. D. Ariz.
Case No. 12-07266) on April 6, 2012.
JOHN WILLIAM CRANNEY: Ch.11 Trustee Allowed to Proceed With Sale
----------------------------------------------------------------
Massachusetts District Judge George A. O'toole, Jr., allowed Lynne
F. Riley, the Chapter 11 trustee for the estates of John William
Cranney and Nevena Nichole Cranney, to proceed with the sale of
two of the Debtors' assets -- the master coordinator level Shaklee
distributorship, and the Debtors' interest in property on Concord
Avenue in Belmont, Massachusetts.
The Bankruptcy Court approved the sale procedures on April 1,
2014. The Debtors and a number of creditors filed a notice of
appeal with the Court along with two motions to stay the sale of
the assets pending appeal. The District Court rejected those
motions.
A copy of the Court's April 29, 2014 Order is available at
http://is.gd/6q4Z2Kfrom Leagle.com.
The Cranneys filed a Chapter 11 petition (Bankr. D. Mass. Case No.
13-11220) on March 5, 2013. Lynne F. Riley was appointed as
Chapter 11 Trustee, and is represented by:
A. Davis Whitesell, Esq.
John T. Morrier, Esq.
Michael J. Goldberg, Esq.
CASNER & EDWARDS, LLP
303 Congress Street
Boston, MA 02210
Tel: 617-426-5900
Fax: 617-426-8810
E-mail: whitesell@casneredwards.com
morrier@casneredwards.com
goldberg@casneredwards.com
riley@casneredwards.com
K-MAX TRADING: Voluntary Chapter 11 Case Summary
------------------------------------------------
Debtor: K-Max Trading Co., Inc.
6945 Atlantic Avenue
Long Beach, CA 90805
Case No.: 14-18929
Chapter 11 Petition Date: May 7, 2014
Court: United States Bankruptcy Court
Central District of California (Los Angeles)
Debtor's Counsel: Jaenam J Coe, Esq.
LAW OFFICES OF JAENAM COE PC
3731 Wilshire Bl Ste 910
Los Angeles, CA 90010
Tel: 213-389-1400
Fax: 213-387-8778
Email: coelaw@gmail.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Hyouk Dong Kim, president.
The Debtor did not file a list of its largest unsecured creditors
when it filed the petition.
LABORATORY SKIN: Court Rules on Chapter 11 Trustee's Fees
---------------------------------------------------------
In the Chapter 11 case of Laboratory Skin Care, Inc., Bankruptcy
Judge Dennis Montali on Dec. 13, 2013, held a hearing on (1) the
First and Final Application for Compensation and Reimbursement of
Expenses by James S. Lowe II, the chapter 11 trustee; (2) the
First and Final Application for Fees and Expenses of Gabrielson &
Company, accountant for Trustee; and (3) the First and Final
Application for Compensation for Services and Reimbursement of
Expenses of Joseph & Cohen, P.C., counsel for the Trustee. The
United States Trustee opposed the application, contending that he
had improperly calculated his maximum compensation on funds
disbursed to the Debtor. The Debtor also opposed the application
because his fees purportedly exceeded the cap of 11 U.S.C. Sec.
326. The Debtor additionally opposed the fee applications of
Gabrielson and J&C, arguing that the services rendered were not
necessary to the administration of the estate or were not
beneficial to estate.
At the hearing, the court approved a portion of the fees and costs
requested by the Applicants. The court awarded the Chapter 11
Trustee $23,009.03 in fees and $2,626.05 in expenses; awarded J&C
$79,518 in fees; and awarded Gabrielson $56,565 in fees and
$668.87 in expenses. The Court also permitted the Applicants, the
UST and Debtor to submit supplemental briefing regarding
Applicants' entitlement to the balance of their requested fees.
The parties stipulated to several extensions of time for filing
the supplemental briefing, and the matter was submitted on March
10, 2014, upon submission of the final briefing by the Applicants.
In a May 6, 2014 Memorandum Decision available at
http://is.gd/Oh3QJMfrom Leagle.com, Judge Dennis Montali said he
will permit the Chapter 11 Trustee to recover $44,262.67 as his
total compensation and will allow in part the balance of the fees
requested by J&C and Gabrielson.
Laboratory Skin Care, Inc., in San Carlos, California, filed for
Chapter 11 bankruptcy (Bankr. N.D. Calif. Case No. 13-30195) on
Jan. 28, 2013, San Francisco. Judge Thomas E. Carlson presides
over the case. Cecily A. Dumas, Esq., at Dumas and Clark LLP,
serves as counsel to the Debtor. The Company estimated $1 million
to $10 million in both assets and debts. A list of its 20 largest
unsecured creditors, filed together with the petition, is
available for free at http://bankrupt.com/misc/canb13-30195.pdf
The petition was signed by Zari Mansouri, president.
LAKES GAS: Jorgas Inc. Sues to Collect $332,000 in Payments
-----------------------------------------------------------
The Tribune Press Reporter reported that Jorgas Inc., in St. Croix
Falls, Wisconsin, filed a lawsuit against Lakes Gas Co., of Forest
Lake, Minn., and Howard Sargeant, of Forest Lake, Minn., seeking
money judgment of $332,240 plus interest, and possession of
collateral. According to the report, the complaint alleges that
in February 2012 Steve and Lorna Jorgensen (Jorgas Inc.) sold
assets to Lakes Gas, which in turn gave a security interest in the
liquid propane gas business tangible and intangible property at
150 N. Madison St., St. Croix Falls; 1893 Hwy. 63, New Richmond;
and 740 Hwy. 12, Baldwin. The collateral included tanks, saleable
liquid propane, copper, brass, regulators and other items used in
the business. Jorgas said Lakes Gas agreed to pay $482,500, in
monthly installments of $11,112. After making four payments,
Jorgas said Lakes Gas has not made any since June 21, 2013, and
now owes $332,240 plus interest at the rate of 5%.
LEGACY RESERVES: Moody's Affirms 'B2' CFR; Outlook Positive
-----------------------------------------------------------
Moody's Investors Service changed Legacy Reserves LP's (Legacy)
rating outlook to positive from stable. At the same time, Moody's
affirmed Legacy's B2 Corporate Family Rating, SGL-3 Speculative
Grade Liquidity Rating, and its Caa1 rated unsecured notes that
are co-issued by Legacy Reserves Finance Corporation.
"Legacy's positive outlook reflects the benefits of increased size
and basin diversification from acquiring a non-operated, working
interest in mature, low decline natural gas assets in the Piceance
Basin from efficient operator WPX," commented Gretchen French,
Moody's Vice President. "However, financial leverage will need to
improve in order to support a B1 Corporate Family Rating."
Legacy is acquiring certain Piceance Basin natural gas assets from
WPX Energy, Inc. (WPX, Ba1 stable). The acquisition is being
funded with $355 million in cash plus a portion of newly created
Incentive Distribution Rights (IDR). The acquisition includes an
escalating working interest (from 29% to 41%) in 2,730 WPX
operated natural gas wells across three fields in Garfield County,
Colorado. Acquired reserves include 276 billion cubic feet of
natural gas (47 million barrels of oil equivalent), 83% of which
are natural gas and 100% of which are in the proved developed
producing category.
Debt List: Legacy Reserves LP
Outlook: Changed to Positive from Stable
Senior unsecured notes, Affirmed at Caa1 (LGD 5, 78%)
Corporate Family Rating, Affirmed at B2
Probability of Default Rating, Affirmed at B2-PD
Speculative Grade Liquidity Rating, Affirmed at SGL-3
Ratings Rationale
Legacy's B2 Corporate Family Rating reflects its long-lived,
shallow decline, predominately proved developed reserve base. In
addition, the company has considerable exposure to oil production,
which, along with reasonably priced acquisitions, have supported
strong returns. The B2 Corporate Family Rating is restrained by
Legacy's small and concentrated production base in the Permian
Basin and relatively high leverage on production and proved
developed reserves compared to a number of its B1 and B2 rated
upstream MLP peers. The Corporate Family Rating also reflects the
risks inherent in its acquisitive, high payout MLP corporate
finance model, but recognizes management's track record in issuing
equity, its lack of incentive distribution rights at the general
partner level, active hedging program and consideration of
development capital requirements in calculating its distributable
cash flow.
Moody's could upgrade the ratings if the company is able to lower
its financial leverage profile (debt/production less than $30,000
boe/d and debt/proved developed reserves of less than $9.00/boe)
while also maintaining sufficient distribution coverage above 1.0x
and adequate liquidity.
With the positive outlook, a downgrade is unlikely. However,
Moody's could downgrade the ratings if leverage increased
(debt/proved developed reserves above $12.00/boe for an extended
period), if distribution coverage weakened below 1.0x for a
sustained period, or if the company's operational risk profile
materially deteriorated.
The WPX Piceance asset acquisition will increase Legacy's scale
and basin diversification. The acquisition will increase both
Legacy's total proved reserve base and daily production over 50%
from year-end 2013 and first quarter 2014 levels, respectively.
Pro forma for the WPX and two small bolt on acquisitions announced
in March of this year, Legacy's production will increase to a
level more indicative of a higher rating, with pro forma
production of 30,868 barrels of oil equivalent (boe) per day, as
compared to 19,478 boe per day reported in the first quarter of
2014.
The WPX acquisition also provides important basin diversification
into the Piceance basin, helping to diversify the company away
from its historical position in the Permian basin. Pro forma for
the acquisitions, the Rockies will account for 41% of the
company's proved reserves, with 52% coming from the Permian basin,
as compared to concentration of 78% in the Permian Basin at year-
end 2013.
While the WPX asset profile is heavily weighted to lower priced
natural gas, with 83% of the reserves acquired being natural gas,
the operatorship on all of the wells remains with WPX, an
efficient and low cost operator. In addition, with 100% of the
reserves in the proved developed producing category and the
automatic step-ups in working interest to 41% on January 1, 2016,
production levels from the assets are expected to be flat through
early 2016 with only very minimal associated capital expenditures.
However, the expected use of debt to finance all of the cash
portion of the acquisition will result in Legacy's financial
leverage levels still remaining elevated relative to a number of
its B1 and B2 rated upstream MLP peers. Legacy's pro forma
debt/production is estimated at $44,149 per boe, as compared to
$45,991 per boe in the first quarter of 2014. Pro forma
debt/proved developed reserves is modestly improved at just over
$10.32 per boe, as compared to $11.89 per boe at year-end 2013;
however, PV-10/debt weakens with the lower value natural gas
assets being acquired.
At close of the acquisition, which is expected before the end of
June 2014, WPX will be issued and immediately vest in 100,000
IDRs, with the ability to vest in up to another 200,000 IDRs,
continent upon future asset drop-downs from WPX to Legacy. Legacy
will retain the remaining 700,00 authorized IDRs in treasury.
Moody's generally views IDRs as credit negative, as they add
complexity and can become a costly distribution burden as the IDR
split increases, negatively impacting a MLP's cost of capital.
However, Moody's positively note that the IDRs being issued to
WPX will not be eligible to receive cash distributions until
Legacy's quarterly limited partner distribution rate increases at
least 14% from current levels. In addition, Legacy's general
partner has the ability to reset the IDR splits and also convert
the IDRs to limited partner units once certain distribution
thresholds are met. Moreover, the IDRs do not have any voting
rights, and Legacy's general partner, which owns 18% of Legacy's
limited partner units, will not own any of the IDRs.
Legacy's SGL-3 Speculative Grade Liquidity Rating reflects
adequate liquidity through mid-2015. Legacy is currently seeking
lender approval to increase the borrowing base under its $1.5
billion revolving credit facility due March 2016 to $950 million,
as compared to its current $800 borrowing base. The company has
already obtained lender consents to increase its debt/EBITDA
financial covenant to 4.5x through June 30, 2015, from the
previous 4.0x (the current ratio of at least 1.0x remains the
same). As is consistent with its hedging policies, Legacy plans to
enter into three- to five-year natural gas hedges for the WPX
acquisition, including natural gas basis hedges through 2015.
The Caa1 ratings on Legacy's senior unsecured notes reflect both
the overall probability of default of Legacy, to which Moody's
assigns a PDR of B2-PD, and a loss given default of LGD 5 (78%).
The senior notes are guaranteed by essentially all material
domestic subsidiaries on a senior unsecured basis and, therefore,
are subordinated to the senior secured credit facility's potential
priority claim to the company's assets. The size of the potential
senior secured claims relative to the unsecured notes outstanding
results in the senior notes being notched two ratings below the B2
Corporate Family Rating under Moody's Loss Given Default
Methodology.
Legacy Reserves LP is headquartered in Midland, Texas.
LEVEL 3: Stortz Quits as EVP CAO and Secretary Quits
----------------------------------------------------
Thomas C. Stortz, Level 3 Communications, Inc.'s executive vice
president, chief administrative officer and secretary, provided
written notice that he will retire effective June 1, 2014. Mr.
Stortz is a named executive officer.
On May 6, 2014, Level 3 Communications selected Laurinda Y. Pang,
as its chief human resources officer, to succeed Mr. Stortz as
executive vice president and chief administrative officer
effective upon Mr. Stortz's retirement. Ms. Pang will report
directly to President and Chief Executive Officer, Jeff K. Storey.
On May 6, 2014, Level 3 Communications selected John M. Ryan, its
executive vice president, chief legal officer and assistant
secretary to succeed Mr. Stortz as secretary effective upon Mr.
Stortz's retirement. Mr. Ryan will also report directly to Mr.
Storey.
About Level 3 Communications
Headquartered in Broomfield, Colorado, Level 3 Communications,
Inc., is a publicly traded international communications company
with one of the world's largest communications and Internet
backbones.
Level 3 incurred a net loss of $109 million in 2013, a net
loss of $422 million in 2012 and a net loss of $756 million in
2011. As of March 31, 2014, the Company had $12.88 billion in
total assets, $11.29 billion in total liabilities and $1.59
billion in total stockholders' equity.
* * *
In October 2013, Fitch Ratings affirmed the 'B' Issuer Default
Ratings (IDRs) assigned to Level 3.
As reported by the TCR on June 5, 2013, Standard & Poor's Ratings
Services raised its corporate credit rating on Broomfield, Colo.-
based global telecommunications provider Level 3 Communications
Inc. to 'B' from 'B-'. "The upgrade reflects improved debt
leverage, initially from the acquisition of the lower-leveraged
Global Crossing in October 2011, and subsequently from realization
of the bulk of what the company expects to eventually be $300
million of annual operating synergies," said Standard & Poor's
credit analyst Richard Siderman.
LIGHTSQUARED INC: Gets Court Approval for $74 Million Loan
----------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that LightSquared Inc. got bankruptcy court permission to
borrow $74 million to keep the company operating until June 15.
About LightSquared Inc.
LightSquared Inc. and 19 of its affiliates filed Chapter 11
bankruptcy petitions (Bankr. S.D.N.Y. Lead Case No. 12-12080) on
May 14, 2012, to resolve regulatory issues that have prevented it
from building its coast-to-coast integrated satellite 4G wireless
network.
LightSquared had invested more than $4 billion to deploy an
integrated satellite-terrestrial network. In February 2012,
however, the U.S. Federal Communications Commission told
LightSquared the agency would revoke a license to build out the
network as it would interfere with global positioning systems used
by the military and various industries. In March 2012, the
Company's partner, Sprint, canceled a master services agreement.
LightSquared's lenders deemed the termination of the Sprint
agreement would trigger cross-defaults under LightSquared's
prepetition credit agreements.
LightSquared and its prepetition lenders attempted to negotiate a
global restructuring that would provide LightSquared with
liquidity and runway necessary to resolve its issues with the FCC.
Despite working diligently and in good faith, however,
LightSquared and the lenders were not able to consummate a global
restructuring on terms acceptable to all interested parties.
Lawyers at Milbank, Tweed, Hadley & McCloy LLP serve as counsel to
the Debtors. Alvarez & Marsal North America, LLC, is the
financial advisor. Kurtzman Carson Consultants LLC serves as
claims and notice agent.
LIGHTSQUARED INC: Fails to Confirm Ch. 11 Plan
----------------------------------------------
U.S. Bankruptcy Judge Shelley Chapman, the judge overseeing
LightSquared Inc.'s Chapter 11 case on May 8 rejected the
company's bid to exit bankruptcy due to the uncertainty
surrounding crucial federal regulatory approvals and its treatment
of Dish Network Corp. Chairman Charlie Ergen's $1 billion of
secured debt, Law360 reported. Judge Chapman, according to
Law360, shot down the telecommunication company's bid for plan
confirmation, allowing the tumultuous and unpredictable bankruptcy
to continue.
Tiffany Kary, writing for Bloomberg News, said Lightsquared won
the bankruptcy judge's approval to marginalize a $1 billion debt
claim by Ergen, a key to the wireless broadband company's ability
to leave bankruptcy under a proposed reorganization plan.
Ergen's claims will be put behind other creditors by an amount to
be determined after further proceedings, Judge Chapman said at the
hearing, the Bloomberg report related. Judge Chapman said Ergen
found a loophole in the company's rules and exploited it, the
Bloomberg report further related.
Bloomberg also related that Judge Chapman found that while it was
unclear whether Ergen was acting for himself or Dish when he
started making the purchases in 2012, there was "no doubt" he was
acting on Dish's behalf by April 2013, when he bought $320 million
in the face value of the debt and hired Willkie Farr & Gallagher
LLP as bankruptcy counsel. Still, Ergen won't face damages in the
case because of the "inaction and delay" in confronting him by
Lightsquared and Philip Falcone's investment fund Harbinger
Capital Partners LLC, which both knew or had strong suspicions for
almost a year about who was buying, Judge Chaman said, according
to Bloomberg.
Ms. Kary, writing in a separate article for Bloomberg News, said
Ergen has said LightSquared's plan to reorganize will improperly
benefit lenders including JPMorgan Chase & Co., which will own all
of the wireless-spectrum company's assets after bankruptcy.
The plan was devised in talks where LightSquared's controlling
shareholder, Falcone, "made it clear that he was interested in
using the plan to enrich himself and equity holders," the
Bloomberg report cited Ergen as saying on April 28 in a bankruptcy
court filing in Manhattan.
SP Special Opportunities Inc., an Ergen fund that invested $1
billion in LightSquared debt, made the allegations in a post-trial
brief following an eight-day trial on whether LightSquared can
reorganize under a plan that puts Ergen's debt behind other
lenders and equity holders to be repaid, the report related. Bill
Rochelle, the bankruptcy columnist for Bloomberg News, noted that
the eight-day trial ended March 31.
In the April 28 filing, the fund dissected how much JPMorgan,
Fortress, Harbinger and another investor, Melody Capital Advisors
LLC, stand to benefit compared with what money they put at risk,
the report further related.
"Mr. Falcone made it clear in numerous e-mails that the primary
purpose of the plan and its subordination or disallowance of
SPSO's claims was to enrich Mr. Falcone and Harbinger," Ergen
said, the report added.
About LightSquared Inc.
LightSquared Inc. and 19 of its affiliates filed Chapter 11
bankruptcy petitions (Bankr. S.D.N.Y. Lead Case No. 12-12080) on
May 14, 2012, to resolve regulatory issues that have prevented it
from building its coast-to-coast integrated satellite 4G wireless
network.
LightSquared had invested more than $4 billion to deploy an
integrated satellite-terrestrial network. In February 2012,
however, the U.S. Federal Communications Commission told
LightSquared the agency would revoke a license to build out the
network as it would interfere with global positioning systems used
by the military and various industries. In March 2012, the
Company's partner, Sprint, canceled a master services agreement.
LightSquared's lenders deemed the termination of the Sprint
agreement would trigger cross-defaults under LightSquared's
prepetition credit agreements.
LightSquared and its prepetition lenders attempted to negotiate a
global restructuring that would provide LightSquared with
liquidity and runway necessary to resolve its issues with the FCC.
Despite working diligently and in good faith, however,
LightSquared and the lenders were not able to consummate a global
restructuring on terms acceptable to all interested parties.
Lawyers at Milbank, Tweed, Hadley & McCloy LLP serve as counsel to
the Debtors. Alvarez & Marsal North America, LLC, is the
financial advisor. Kurtzman Carson Consultants LLC serves as
claims and notice agent.
LOCKHART NORTH 130: Involuntary Chapter 11 Case Summary
-------------------------------------------------------
Alleged Debtor: Lockhart North 130 Properties, LP
20969 Ventura Blvd.
Woodland Hills, CA 91364
Case Number: 14-12340
Involuntary Chapter 11 Petition Date: May 6, 2014
Court: United States Bankruptcy Court
Central District of California (San Fernando Valley)
Judge: Hon. Maureen Tighe
Petitioner's Counsel: David R Pemberton, Esq.
LAW OFFICES OF DAVID PEMBERTON
100 N Westlake Blvd Ste 201
Westlake Village, CA 91362
Tel: 805-341-8006
Email: drpemberton@yahoo.com
Alleged Debtor's petitioner:
Petitioner Nature of Claim Claim Amount
---------- --------------- ------------
Alex Anguiano - $-
20969 Ventura Blvd
Woodland Hills, CA 91364
MACKINAW POWER: Fitch Affirms 'BB-' Rating to $147MM Loan
---------------------------------------------------------
Fitch Ratings affirms the 'BBB-' rating on Mackinaw Power, LLC's
(Mackinaw) $288.9 million ($176.2 million outstanding) senior
secured bonds (senior bonds), and affirms the 'BB-' rating on
Mackinaw Power Holdings, LLC's (MPH) $147 million ($110 million
outstanding) senior secured term loan (term loan). The Rating
Outlook for both instruments is Stable.
Key Rating Drivers
Substantially Contracted Portfolio: The facilities are nearly
fully contracted under tolling agreements with investment grade
off-takers through 2015. Beyond 2015, approximately 75% of total
portfolio capacity is contracted through the senior notes maturity
in 2023. Capacity payments cover fixed costs and debt service at
the senior notes level, indicating a low reliance on dispatch
levels. (Revenue Risk: Midrange)
Secure Natural Gas Supply: Due to the nature of the tolling
agreements, the off-takers are responsible for procurement of
natural gas. As a result, the volume and price risk associated
with fuel is minimal. (Supply Risk: Stronger)
Long, Stable Operating History: The Mackinaw portfolio contains
assets that employ conventional technology and have displayed
stable operations over a minimum of 10 years. The operator is an
affiliate of the majority owner and has established a 24-month
forward-looking maintenance reserve program to facilitate
continued stable operations and low variability in costs.
(Operation Risk: Stronger)
Fully Amortizing Senior Notes: Mackinaw receives distributions
from facilities with no project-level debt. The debt is fully
amortizing with a fixed interest rate and six-month debt service
reserve. On the basis of contracted-only cash flows, Fitch rating
case DSCRs average 1.76x through 2023, sufficient for an
investment grade rating. (Debt Structure: Midrange)
Term Loan Faces Refinance Risk: The term loan is subordinate to
the senior notes and the interest rate is variable and unhedged.
Fitch expects a bullet of roughly $100 million upon maturity of
the term loan in June 2015 at MPH. Despite these weaknesses,
portfolio cash flow appears sufficient to facilitate refinancing
under an eight-year refinance scenario. (Debt Structure: Weaker)
Rating Sensitivities
Fitch notes that the option to transfer Washington 1 and 4, as
well as the Effingham facility, to MPH in late 2015 is permitted
in the indenture. Under a scenario in which these assets are
transferred out of the senior bonds cash flow, debt service
coverage will approach the investment-grade threshold, increasing
susceptibility to operational challenges across the remaining pool
of assets.
A change to the contractual status of the Effingham facility could
impact long-term cash flow projections.
A significant variance in the amount of term loan principal
outstanding relative to projected levels could impact the
assessment of refinance risk.
Security
The notes are secured by a perfected first priority security
interest in all tangible and intangible assets of Mackinaw and the
project companies, the membership interests in Mackinaw held by
MPH, the debt service reserve and the major maintenance reserve.
The term loan is secured by a perfected first priority security
interest in all tangible and intangible assets of MPH, and the
letter of credit-funded debt service reserve.
Credit Update
The rating affirmation of the senior bonds is based on continued
stable operational performance of the portfolio and low reliance
on dispatch levels to repay outstanding debt obligations. The
affirmation of the term loan reflects near-term consolidated DSCRs
consistent with the rating category and the expectation that long-
term portfolio cash flow will be sufficient to refinance a bullet
of approximately $100 million.
In 2013, the four assets that comprise the Mackinaw portfolio were
dispatched at much lower levels than budgeted, due to mild weather
across the Southeast U.S. and a rebound in natural gas prices. As
a result, the facilities earned less variable energy revenue, and
operating cash flow fell from recent levels. Still, availability
across the portfolio was high and full capacity payments were
sufficient to cover senior debt obligations at an annual DSCR of
1.22x.
Over the remaining 10-year term of the senior notes, cash flow is
expected to be sufficient to produce DSCRs that are consistent
with an investment-grade rating. Under Fitch's rating case, which
applies a combination of stresses to costs, availability, and heat
rates across the portfolio, contracted-only cash flows average
1.76x, with a minimum of 1.32x in 2015. Projections include
additional cash flow from new tolling agreements at units 1 and 4
of the Washington facility, which begin in 2016.
The projects held by Mackinaw and MPH sell energy and capacity
under long-term fixed-price power purchase agreements (PPAs) with
Constellation Energy Commodities Group (owned by Exelon, IDR
'BBB+'; Rating Watch Negative by Fitch), Georgia Power Company
(GPC, IDR 'A'; Stable Outlook), and two Georgia cooperatives. The
PPAs are structured as tolling agreements, and the off-takers are
responsible for providing natural gas fuel. Equity interests in
the projects are owned indirectly by majority owner ArcLight
Energy Partners Fund III, LP, as well as minority owner affiliates
of GE Capital and Government of Singapore Investment Corporation.
MCCLANAHAN TIRE: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: McClanahan Tire LLC
aw Susan McClanahan
aw Brian McClanahan
8585 Banana Ave
Fontana, CA 92335
Case No.: 14-15966
Chapter 11 Petition Date: May 7, 2014
Court: United States Bankruptcy Court
Central District of California (Riverside)
Judge: Hon. Mark S Wallace
Debtor's Counsel: Yoon O Ham, Esq.
LEWIS & HAM LLP
1425 W Foothill Blvd Ste 235
Upland, CA 91786
Tel: 909-256-2920
Fax: 909-256-2927
Email: hamy@lewishamlaw.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Susan McClanahan, president.
A list of the Debtor's 20 largest unsecured creditors is available
for free at http://bankrupt.com/misc/cacb14-15966.pdf
MCLEAN SCHOOL: S&P Lowers Rating on Series 2001 Bonds to 'BB'
-------------------------------------------------------------
Standard & Poor's Ratings Services has lowered its long-term
rating to 'BB' from 'BB+' on Maryland Health & Higher Education
Facilities Authority's series 2001 bonds issued for the McLean
School. The outlook is negative.
"The downgrade reflects the continued decline in enrollment over
the past seven years and projected deficits through fiscal 2016,"
said Standard & Poor's credit analyst Debra Boyd. "The school's
headcount continued to decrease in fall 2013 by 6.8% to 330
students from the prior year and a 30% decrease since fall 2008.
With a decline in headcount, net tuition revenue has also fallen
for the fourth year in a row although management expects an
increase in enrollment and tuition revenue growth in fall 2015.
The deficits are the result of management's decision to make
strategic investments in technology, capital, faculty, and
outreach after many years of expense cuts to increase the school's
marketability, attract new students, and reduce attrition" added
Ms. Boyd.
The school is forecasting deficits through fiscal 2016, increasing
the school's financial vulnerability and reducing its overall
credit strength in the short term. However, S&P believes that
management's decision to reinvest in the school is necessary and
could result in credit positives in the long-term if successful.
The McLean School caters to students with different learning
styles and learning needs; this does not include children with
severe learning disabilities, but rather students who benefit from
more tailored teaching styles and smaller classroom environments.
The unique staff required to achieve this mission includes
learning specialists, speech-language pathologists, occupational
therapists, and registered nurses.
MEDICAL ALARM: Files Form 10-Q for Q3 of 2012
---------------------------------------------
Medical Alarm Concepts Holding, Inc., recently filed a quarterly
report on Form 10-Q, reporting a net income of $4,401 on $144,652
of revenue for the three months ended Sept. 30, 2012, compared
with a net loss of $5.06 million on $38,115 of revenue for the
same period in 2011.
The Company's balance sheet at Sept. 30, 2012, showed $1.3 million
in total assets, $10.81 million in total liabilities, and a
stockholders' deficit of $9.5 million.
As of Sept. 30, 2012, the Company has working capital deficit of
$8.5 million; did not generate cash from its operations; and had
operating loss for past three years. These circumstances, among
others, raise substantial doubt about the Company's ability to
continue as a going concern.
A copy of the Form 10-Q is available at:
http://is.gd/roSecu
About Medical Alarm
Plymouth Meeting, Pa.-based Medical Alarm Concepts Holding, Inc.,
utilizes new technology in the medical alarm industry to provide
24-hour personal response monitoring services and related products
to subscribers with medical or age-related conditions.
MEKHI PHIFER: "Divergent" Actor Files for Chapter 11
----------------------------------------------------
CBS News' Ken Lombardi reported that Mekhi Phifer, 39, an actor in
the film "Divergent", has filed for Chapter 11 bankruptcy
protection. He listed $1.3 million in debt against $67,000 in
assets. Most of the debt purportedly stems from back-taxes, which
total $1.2 million. Debt includes $4,500 in back child support.
MERRIMACK PHARMACEUTICALS: Files Form 10-Q, Had $27MM Loss in Q1
----------------------------------------------------------------
Merrimack Pharmaceuticals, Inc., filed with the U.S. Securities
and Exchange Commission its quarterly report on Form 10-Q
disclosing a net loss of $27.75 million on $13.03 million of
collaboration revenues for the three months ended March 31, 2014,
as compared with a net loss of $28.32 million on $14.65 million of
collaboration revenues for the same period in 2013.
As of March 31, 2014, the Company had $164.98 million in total
assets, $230.77 million in total liabilities and $168,000 in non-
controlling interest and a $65.96 million total stockholders'
deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/NqrmA0
About Merrimack
Cambridge, Mass.-based Merrimack Pharmaceuticals, Inc., a
biopharmaceutical company discovering, developing and preparing to
commercialize innovative medicines consisting of novel
therapeutics paired with companion diagnostics. The Company's
initial focus is in the field of oncology. The Company has five
programs in clinical development. In it most advanced program,
the Company is conducting a pivotal Phase 3 clinical trial.
Merrimack reported a net loss of $130.68 million in 2013, a net
loss of $91.75 million in 2012 and a net loss of $79.67 million in
2011. The Company's balance sheet at Dec. 31, 2013, showed
$192.41 million in total assets, $235.54 million in total
liabilities, $337,000 in non-controlling interest and a $43.46
million total stockholders' deficit.
MICROVISION INC: Reports $8 Million Net Loss in First Quarter
-------------------------------------------------------------
MicroVision, Inc., reported a net loss of $8.01 million on $1.21
million of total revenue for the three months ended March 31,
2014, as compared with a net loss of $3.65 million on $1.80
million of total revenue for the same period in 2013.
The Company's balance sheet at March 31, 2014, the Company had
$18.26 million in total assets, $4.95 million in total liabilities
and $13.31 million in total shareholders' equity. As of March 31,
2014, backlog was $ 1.6 million and cash and cash equivalents were
$15.3 million.
A copy of the press release is available for free at:
http://is.gd/o0PsKm
About Microvision Inc.
Headquartered in Redmond, Washington, MicroVision, Inc. (NASDAQ:
MVIS) is the creator of PicoP(R) display technology, an ultra-
miniature laser projection solution for mobile consumer
electronics, automotive head-up displays and other applications.
Microvision incurred a net loss of $22.69 million in 2012
following a net loss of $35.80 million in 2011.
Moss Adams LLP, in Seattle, Washington, issued a "going concern"
qualification on the consolidated financial statements for the
year ended Dec. 31, 2012. The independent auditors noted that
the Company has suffered recurring losses from operations and has
a net capital deficiency that raise substantial doubt about its
ability to continue as a going concern.
MISSION NEW ENERGY: Members Approve New Issue of Shares
-------------------------------------------------------
At a general meeting of members of Mission NewEnergy Limited held
on March 28, 2014, a resolution approving new issue of shares was
passed.
About Mission NewEnergy
Based in Subiaco, Western Australia, Mission NewEnergy Limited is
a producer of biodiesel that integrates sustainable biodiesel
feedstock cultivation, biodiesel production and wholesale
biodiesel distribution focused on the government mandated markets
of the United States and Europe.
The Company is not operating its biodiesel refining segment. The
refineries are being held in care and maintenance either awaiting
a return to positive operating conditions or the sale of assets.
The Company has materially diminished its Jatropha contract
farming operation and the company is now focused on divesting the
remaining Indian assets. The Company intends to cease all Indian
operations.
The Company's balance sheet at Dec. 31, 2013, showed $4.92 million
in total assets, $13.96 million in total liabilities and a $9.04
million total deficiency.
Mission NewEnergy disclosed net profit of A$10.05 million on
A$8.41 million of total revenue for the year ended June 30, 2013,
as compared with a net loss of A$6.19 million on A$38.20 million
of total revenue during the prior fiscal year.
BDO Audit (WA) Pty Ltd, in Perth, Western Australia, issued a
"going concern" qualification on the consolidated financial
statements for the year ended June 30, 2013. The independent
auditors noted that the Company incurred operating cash outflows
of $3.7 million during the year ended 30 June 2013 and, as of that
date the consolidated entity's total liability exceeded its total
assets by $12.5 million. These conditions, along with other
matters, raise substantial doubt the Company's ability to continue
as a going concern.
N-VIRO INTERNATIONAL: Inks Forbearance Pact with Monroe Bank
------------------------------------------------------------
N-Viro International Corporation, on April 9, 2014, signed a
forbearance agreement with Monroe Bank + Trust, temporarily
restricting the Bank from exercising certain rights and remedies
available after the Company defaulted on its existing Commercial
Line of Credit Agreement in December 2013. In addition to
retaining certain rights and remedies, the Bank agreed to allow
the Company to repay the Line of Credit over six months, with an
immediate payment of approximately $39,000 including accrued
interest, and successive monthly payments of $36,784 plus accrued
interest at 5 percent, up to and including Sept. 7, 2014, until a
total of $218,000 in principal is repaid.
At a meeting of the Board of Directors on April 16, 2014, the
Company appointed Dr. Gene Richard to the Board of Directors as a
Class II director, effective until the Company's annual meeting to
be held later in 2014. Dr. Richard has not yet been appointed to
any committees as of the date of this filing, and is the son of a
current member of the Board, Carl Richard.
Dr. Richard is currently an Associate Pathologist with Consultants
in Laboratory Medicine of Greater Toledo, Ohio, and has an
extensive background in clinical and anatomic pathology, having
practiced in Fort Wayne, Dallas and Toledo, and specializes in
surgical pathology and cytopathology. He has been educated via
the Ohio State University College of Medicine, Medical University
of South Carolina, Memorial Hospital for Cancer & Allied Diseases
in New York, Memorial Sloan-Kettering Cancer Center in New York
and the North Shore University Hospital at Cornell University, and
has been Board Certified in Anatomic & Clinical Pathology since
1992.
About N-Viro International
Toledo, Ohio-based N-Viro International Corporation owns and
sometimes licenses various N-Viro processes and patented
technologies to treat and recycle wastewater and other bio-organic
wastes, utilizing certain alkaline and mineral by-products
produced by the cement, lime, electrical generation and other
industries.
In its audit report on the consolidated financial statements for
the year ended Dec. 31, 2012, UHY LLP, in Farmington Hills,
Michigan, expressed substantial doubt about N-Viro's ability to
continue as a going concern, citing the Company's recurring
losses, negative cash flow from operations and net working capital
deficiency.
The Company reported a net loss of $1.6 million on $3.6 million of
revenues in 2012, compared with a net loss of $1.6 million of
$5.6 million of revenues in 2011. As of Sept. 30, 2013, the
Company had $1.97 million in total assets, $2.34 million in total
liabilities and a $369,192 total stockholders' deficit.
NATIONAL HERITAGE: District Court Rules on Behrmann Appeal
----------------------------------------------------------
District Judge Leonie M. Brinkema in Alexandria, Virginia, ruled
on multiple appeals from decisions of the bankruptcy court in the
Chapter 11 case of National Heritage Foundation, Inc.
In the first appeal, Civil Action No. 1:13cv01180, John and Nancy
Behrmann, who donated funds to NHF, appeal the bankruptcy court's
decision denying their Renewed Motion for Leave to pursue
litigation against NHF in the Central District of California.
In the second appeal, Civil Action No. 1:13cv01181, which
consolidated the appeals of the Behrmanns and their counsel,
Jonathan D. Miller and his law firm, Nye, Peabody, Stirling, Hale
& Miller, LLP, and Daniel J. Schendzielos and his law firm,
Schendzielos & Associates, LLC, , the appellants attack the
bankruptcy court's decision holding all of them jointly and
severally in contempt.
Independent of those appeals are NHF's motion for sanctions
against all of the appellants under Fed. R. Bankr. P. 8020 for
raising allegedly frivolous issues in these appeals and
appellants' cross-motion for sanctions.
In a May 5, 2014 Memorandum Opinion available at
http://is.gd/vgNHUbfrom Leagle.com, the District Court affirmed
the bankruptcy court's decisions, and held that NHF's motion for
sanctions will be denied without prejudice, and the appellants'
cross-motion for sanctions will be denied.
NHF is a nonprofit, public charity incorporated in Georgia and
headquartered in Falls Church, Virginia. NHF is a "sponsoring
organization" that maintains donor advised funds. DAFs are funds
or accounts "owned and controlled by a sponsoring organization."
Donors to DAFs receive a dollar-for-dollar income tax deduction
for their donations. Although donors such as the Behrmanns give
up control over the funds in exchange for that favorable tax
benefit, they have "advisory privileges with respect to the
distribution or investment of amounts held" in the DAFs.
Through NHF, the Behrmanns created the Highbourne Foundation, a
DAF intended to fund scholarships for low-income students. The
Behrmanns and NHF enjoyed a 15-year relationship with no record of
dissatisfaction until NHF filed a voluntary Chapter 11 petition.
That filing was precipitated by a September 2008 jury verdict in
Texas against NHF, in which $6.2 million in damages was awarded
against NHF.
On behalf of the Highbourne Foundation, the Behrmanns filed both
original and amended claims against NHF in the Chapter 11
proceeding, seeking to recover $649,138.35 they claimed NHF
"appropriated. . . from the Highbourne Foundation" when those
monies were placed in NHF's operating account. The Behrmanns also
alleged that "these monies were subsequently paid to one or more
lenders in partial satisfaction of the Debtor's secured
indebtedness" and that "[t]his action robbed monies that the
Behrmanns had been induced to contribute for charitable purposes
of the ability to be used for the purposes for which they had been
provided." NHF objected to the Behrmanns' claims.
Falls Church, Virginia-based National Heritage Foundation, Inc. --
http://www.nhf.org/-- is a non-profit tax-exempt charitable
institution. The Company filed for Chapter 11 bankruptcy
protection (Bankr. E.D. Va. Case No. 09-10525) on Jan. 24, 2009.
Alan Michael Noskow, Esq., at Patton Boggs LLP, assisted the
Company in its restructuring effort. The Company estimated more
than $100 million in assets and $1 million to $100 million in
debts.
On Oct. 16, 2009, NHF won confirmation of its Fourth Amended and
Restated Plan of Reorganization over the objections of the
Behrmanns.
The Behrmanns are represented by Gregory Mark Wade, Esq., at
Gregory M. Wade PC.
National Heritage Foundation is represented by:
Brittany Nelson, Esq.
Erika Lynn Morabito, Esq.
FOLEY & LARDNER LLP
Washington Harbour
3000 K Street, N.W., Suite 600
Washington, D.C. 20007-5109
Tel: 202-295-4732
E-mail: bnelson@foley.com
emorabito@foley.com
NATURAL MOLECULAR: Proposes MedTech Billing Agreement
-----------------------------------------------------
Natural Molecular Testing Corporation asks the bankruptcy court
for an order approving an agreement where MedTech National, Inc.,
will serve as billing firm to collect on past due accounts
receivable.
The Debtor will make four initial installment payments of $5,000
to MedTech to cover upfront costs, including legal, financial,
accounting, and staffing expenses. Thereafter, MedTech will be
entitled to a percentage of the funds collected on past due
accounts pursuant to a sliding scale, ranging from up to 50% (for
the first $200,000 collected only) to 5%, depending on the amounts
collected.
The Debtor and MedTech anticipate that collection efforts would
start promptly and revenue would be available to Natural Molecular
starting within 60 to 90 days.
The Debtor has selected MedTech because it has considerable
medical billing experience and employs a wide range of
technologies to increase efficiency, reduce billing errors, and
shorten recovery time on past due accounts.
About Natural Molecular
Natural Molecular Testing Corp., which provides molecular
diagnostic-testing services, including testing for sexually
transmitted diseases and screening and counseling about cystic
fibrosis, filed a petition for Chapter 11 protection (Bankr. W.D.
Wash. Case No. 13-19298) on Oct. 21, 2013, in Seattle. Hacker
& Willig, Inc., P.S., serves as its bankruptcy counsel. The
closely held company said assets are worth more than $100 million
while debt is less than $50 million.
Gail Brehm Geiger, Acting U.S. Trustee for Region 18, appointed a
five-member Committee of Unsecured Creditors. Foster Pepper's
Jane Pearson, Esq.; Christopher M. Alston, Esq., and Terrance
Keenan, Esq., serve as the Committee's attorneys.
NATURAL MOLECULAR: Says CEO Suit Hampers Reorganization
-------------------------------------------------------
Natural Molecular Testing Corporation asks the Bankruptcy Court to
reconsider the Court's order authorizing the statutory committee
of unsecured creditors to commence suit against Beau Fessenden,
the Debtor's president and CEO.
Counsel to the Debtor, Arnold M. Willig, Esq., of Hacker & Willig
Inc. PS, states that the Bankruptcy Court did not have a fair
opportunity to assess the merits of a lawsuit asserting a right to
reimbursement of more than $24 million. Based on the Committee's
motion, the Court considered whether a single colorable claim
existed against Mr. Fessenden, and whether defense of such claim
would impede Mr. Fessenden's ability to contribute to Natural
Molecular's reorganization.
Natural Molecular states that no colorable claim exists and has
always disputed the Committee's claim that its lawsuit would in no
way hinder the company's reorganization efforts. Emboldened by
the Court's Order, the Committee has elected to pursue a lawsuit
against Mr. Fessenden of a much greater scope and magnitude than
previously described, which lawsuit will frustrate Natural
Molecular's attempts to reorganize successfully -- even more than
originally anticipated -- which seems to be exactly what some of
the Committee members wish to see. The Committee's eagerness to
evade any reasonable constraints in its pursuit of Mr. Fessenden
is already plainly evident.
Natural Molecular submits that the relief granted to the Committee
was overbroad in light of the Court's findings and conclusions.
According to Mr. Willig, the Committee's lawsuit asserts a number
of expansive claims, the merits of which were never considered by
the Court in its Order permitting suit. Further, the Committee,
Mr. Willig points out, did not address this overbreadth in its
response. Upon reconsideration, the Debtor avers that the Court
should permit the Debtor an opportunity to reorganize successfully
before permitting the Committee to launch into protracted
litigation that will only impede the goals of a Chapter 11
Bankruptcy.
Mr. Willig submits that the Committee's claim that it is
interested in reorganization is utterly false. The Debtor said
that despite its request for support, the Committee refused to
oppose the United States' motion to dismiss the pending adversary
proceeding against Medicare, and refused any and all record
showing of support to Natural Molecular on same. This claim
against Medicare may be one of the largest sources of revenue for
this estate, according to the Debtor.
Even if Natural Molecular's adversary proceeding against Medicare
is ultimately unsuccessful, there would still be time to bring an
avoidance action against Mr. Fessenden, if warranted. This "rush
to file" also demonstrates the Committee's disingenuous claim that
Mr. Fessenden was going to sell his Miami home and dissipate the
proceeds. Mr. Willig notes that Mr. Fessenden has been selling
his real estate to make contributions to Natural Molecular.
Committee Opposes
The Official Unsecured Creditors' Committee objects to the
Debtor's motion for reconsideration.
In its motion to commence suit, the Committee asserted that the
Debtor has several causes against Mr. Fessenden to recover
millions of dollars. The Committee specifically stated that it
believed there is a basis to recover from Mr. Fessenden most, if
not all, of the amounts he received as draws, the huge salary that
he received, and the huge salaries he authorized to be paid to
other insiders under a variety of statutes and theories. The
Committee identified evidence showing colorable claims to recover
millions of dollars under several alternative theories.
The Committee submits that the Court should not reconsider the
order because the Debtor ignores the requirements for a motion for
reconsideration because it is unable to show manifest error by the
Court or newly discovered evidence that it was unable to present
previously. Instead, the Debtor simply re-presents its prior
briefing.
About Natural Molecular
Natural Molecular Testing Corp., which provides molecular
diagnostic-testing services, including testing for sexually
transmitted diseases and screening and counseling about cystic
fibrosis, filed a petition for Chapter 11 protection (Bankr. W.D.
Wash. Case No. 13-19298) on Oct. 21, 2013, in Seattle. Hacker
& Willig, Inc., P.S., serves as its bankruptcy counsel. The
closely held company said assets are worth more than $100 million
while debt is less than $50 million.
Gail Brehm Geiger, Acting U.S. Trustee for Region 18, appointed a
five-member Committee of Unsecured Creditors. Foster Pepper's
Jane Pearson, Esq.; Christopher M. Alston, Esq., and Terrance
Keenan, Esq., serve as the Committee's attorneys.
NEW ENGLAND COMPOUNDING: In $100 Million Accord
-----------------------------------------------
Karen Gullo, writing for Bloomberg News, reported that the owners
of New England Compounding Pharmacy Inc., the drug supplier blamed
for a nationwide meningitis outbreak that killed 64, agreed to a
settlement providing $100 million toward compensation for victims.
The settlement, which includes money from insurers, will be
implemented as part of a Chapter 11 plan, the Bloomberg report
related, citing a filing by a trustee seeking approval of the
accord in U.S. Bankruptcy Court in Boston. Criminal investigations
involving company insiders, 322 lawsuits against the pharmacy and
3,300 claims from injury are continuing, according to the filing.
The pharmacy's tainted drugs, including a steroid administered by
spinal injection, caused 64 deaths and 700 cases of meningitis,
according to the Centers for Disease Control and Prevention, the
report further related. The company filed for bankruptcy
protection in December 2012 as a result of the lawsuits.
The settlement is a "significant step towards funding a Chapter 11
plan that will furnish a mechanism to provide meaningful
compensation" for families of those who died and those injured
from the allegedly contaminated medications, Jeffrey Sternklar,
attorney for Paul Moore, the court-appointed trustee, said in the
filing on May 6, according to Bloomberg.
The bankruptcy plan, once confirmed, releases company officers
from further claims related to the tainted products, the report
added.
About New England Compounding Pharmacy
New England Compounding Pharmacy Inc., filed a Chapter 11 petition
(Bankr. D. Mass. Case No. 12-19882) in Boston on Dec. 21, 2012,
after a meningitis outbreak linked to an injectable steroid,
methylprednisolone acetate ("MPA"), manufactured by NECC, killed
39 people and sickened 656 in 19 states, though no illnesses have
been reported in Massachusetts. The Debtor owns and operates the
New England Compounding Center is located in Framingham, Mass. In
October 2012, the company recalled all its products, not just
those associated with the outbreak.
Paul D. Moore, Esq., at Duane Morris LLP, in Boston, has been
appointed as Chapter 11 Trustee of NECC. He is represented by:
Jeffrey D. Sternklar, Esq.
DUANE MORRIS LLP
Suite 2400
100 High Street
Boston, MA 02110-1724
Tel: 857-488-4216
Fax: 857-401-3034
An Official Committee of Unsecured Creditors appointed in the case
has been represented by:
BROWN RUDNICK LLP
William R. Baldiga, Esq.
Rebecca L. Fordon, Esq.
Jessica L. Conte, Esq.
One Financial Center
Boston, MA 02111
Tel: (617) 856-8200
- and -
David J. Molton, Esq.
Seven Times Square
New York, NY 10036
Tel: (212) 209-4800
NFC DATA: Enters Settlement with NFC Data on Defaulted Loans
------------------------------------------------------------
Play LA Inc. on May 7 disclosed that it has reached a settlement
with NFC Data Inc. on the three claims the company filed against
NFC Data in The Eastern Caribbean Supreme Court in The High Court
of Justice Virgin Islands. NFC Data Inc. was in default on loans
owed to the Company and other lenders. The loans were related to
the Share Purchase Agreement that NFC Data Inc. signed with Play
LA Inc. on December 12th, 2012, and subsequently withdrew from.
The settlement includes monies owed for loans, accrued interest
and legal costs.
About Play LA Inc.
Play LA Inc. -- http://www.playlainc.com-- is an international
online publishing company that owns and operates a global network
of multi-language websites. The Company currently owns and
operates 14 websites that reach hundreds of thousands of people
across the UK and Europe each month, who are specifically looking
for the unique sports news, advice and tournament information
published throughout Play LA's websites for the Sports, Casino
Games and the Poker industry.
NEWLEAD HOLDINGS: MGP Asks Additional 8MM Settlement Shares
-----------------------------------------------------------
MG Partners Limited requested 8,000,000 additional settlement
shares pursuant to the terms of a settlement agreement approved by
the Supreme Court of the State of New York, County of New York.
Following the issuances of the above amounts, the Company will
have approximately 112,002,875 shares outstanding, which
outstanding amount includes recent share issuances related to
partial exercises of outstanding warrants and partial conversions
of outstanding preferred stock.
On Dec. 2, 2013, the Supreme Court entered an order approving,
among other things, the fairness of the terms and conditions of an
exchange pursuant to Section 3(a)(10) of the Securities Act of
1933, as amended, in accordance with a stipulation of settlement
among NewLead Holdings Ltd., a corporation organized and existing
under the laws of Bermuda, Hanover Holdings I, LLC, a New York
limited liability company, and MG Partners Limited, a company with
limited liability organized and existing under the laws of
Gibraltar, in the matter entitled Hanover Holdings I, LLC v.
NewLead Holdings Ltd., Case No. 160776/2013. Hanover commenced
the Action against the Company on Nov. 19, 2013, to recover an
aggregate of $44,822,523 of past-due indebtedness of the Company,
which Hanover had purchased from certain creditors of the Company
pursuant to the terms of separate purchase agreements between
Hanover and each of such creditors, plus fees and costs. The
Order provides for the full and final settlement of the Claim and
the Action. The Settlement Agreement became effective and binding
upon the Company, Hanover and MGP upon execution of the Order by
the Court on Dec. 2, 2013.
Pursuant to the terms of the Settlement Agreement, the Company
issued and delivered to MGP, as Hanover's designee, 175,000 shares
(adjusted to give effect to a 1 for 10 reverse stock split
effective March 6, 2014) of the Company's common stock, $0.01 par
value.
Between Jan. 3, 2014, and April 29, 2014, the Company issued and
delivered to MGP an aggregate of 29,000,000 (adjusted to give
effect to a 1 for 10 reverse stock split effective March 6, 2014)
Additional Settlement Shares pursuant to the terms of the
Settlement Agreement approved by the Order.
A full-text copy of the Form 6-K is available for free at:
http://is.gd/qUnve4
About NewLead Holdings
Based in Athina, Greece, NewLead Holdings Ltd. --
http://www.newleadholdings.com/-- is an international, vertically
integrated shipping company that owns and manages product tankers
and dry bulk vessels. NewLead currently controls 22 vessels,
including six double-hull product tankers and 16 dry bulk vessels
of which two are newbuildings. NewLead's common shares are traded
under the symbol "NEWL" on the NASDAQ Global Select Market.
Newlead Holdings incurred a net loss of $403.92 million on $8.92
million of operating revenues for the year ended Dec. 31, 2012, as
compared with a net loss of $290.39 million on $12.22 million of
operating revenues for the year ended Dec. 31, 2011. The Company
incurred a net loss of $86.34 million on $17.43 million of
operating revenues in 2010.
As of June 30, 2013, the Company had $84.27 million in total
assets, $166.18 million in total liabilities and a $81.91 million
total shareholders' deficit.
Going Concern Doubt
PricewaterhouseCoopers S.A., in Athens, Greece, issued a "going
concern" qualification on the consolidated financial statements
for the year ended Dec. 31, 2012. The independent auditors noted
that the Company has incurred a net loss, has negative cash flows
from operations, negative working capital, an accumulated deficit
and has defaulted under its credit facility agreements resulting
in all of its debt being reclassified to current liabilities, all
of which raise substantial doubt about its ability to continue as
a going concern.
NEXT 1 INTERACTIVE: Michael Craig Appointed Director
----------------------------------------------------
Next 1 Interactive, Inc., appointed Michael Craig, age 63, as a
director of the board of directors of Next 1 Interactive, Inc.
There are no family relationships between Mr. Craig and any
director, executive officer or person nominated or chosen by the
Company to become as director or executive officer. Additionally,
there have been no transactions involving Mr. Craig that would
require disclosure under Item 404(a) of Regulation S-K.
About Next 1 Interactive
Weston, Fla.-based Next 1 Interactive, Inc., is the parent company
of RRTV Network (formerly Resort & Residence TV), Next Trip -- its
travel division, and Next One Realty -- its real estate division.
The Company is positioning itself to emerge as a multi revenue
stream "Next Generation" media-company, representing the
convergence of TV, mobile devices and the Internet by providing
multiple platform dynamics for interactivity on TV, Video On
Demand (VOD) and web solutions. The Company has worked with
multiple distributors beta testing its platforms as part of its
roll out of TV programming and VOD Networks. The list of multi-
system operators the Company has worked with includes Comcast,
Cox, Time Warner and Direct TV. At present the Company operates
the Home Tour Network through its minority owned/joint venture
real estate partner -- RealBiz Media. As of July 17, 2012, the
Home Tour Network features over 4,300 home listings in four cities
on the Cox Communications network.
Next 1 Interactive disclosed a net loss attributable to the
Company of $4.19 million on $987,115 of total revenues for the
year ended Feb. 28, 2013, as compared with a net loss attributable
to the Company of $13.65 million on $1.29 million of total
revenues for the year ended Feb. 29, 2012.
D'Arelli Pruzansky, P.A., in Boca Raton, Florida, issued a "going
concern" qualification on the consolidated financial statements
for the year ended Feb. 28, 2013. The independent auditors noted
that the Company has incurred losses of $4,233,102 for the year
ended Feb. 28, 2013, and the Company had an accumulated deficit of
$71,193,862 and a working capital deficit of $13,371,094 at
Feb. 28, 2013. These conditions raise substantial doubt about the
Company's ability to continue as a going concern.
The Company's balance sheet at Nov. 30, 2013, showed $4.89 million
in total assets, $21.64 million in total liabilities and a $16.75
million total stockholders' deficit.
Bankruptcy Warning
"If we continue to experience liquidity issues and are unable to
generate revenue, we may be unable to repay our outstanding debt
when due and may be forced to seek protection under the federal
bankruptcy laws," according to the Company's annual report for the
year ended Feb. 28, 2013.
NORTEL NETWORKS: Canadian Judge Criticizes Lawyers for Fees
-----------------------------------------------------------
Peg Brickley, writing for The Wall Street Journal, reported that a
Canadian judge blasted the lawyers involved in the fight over $7.3
billion raised in the sale of Nortel Networks Inc.'s businesses,
calling their tactics "a huge waste of money" and their fees
"shocking."
According to the report, citing the interests of thousands of
pensioners who lost benefits and pay in Nortel's 2009 collapse,
Justice Frank Newbould threw out a series of motions arguing over
what evidence is to be presented at a trial set to start on May
12. The trial will determine how to split the proceeds of the
sale of Nortel's businesses among the fallen technology giant's
creditors around the globe.
At an expected cost of at least $1 million a day, the trial is set
to run for six weeks in the U.S. and Canada, two of the
jurisdictions where Nortel has launched insolvency proceedings,
the report related.
Attorneys have been preparing for the trial for a year, following
failed efforts to reach a compromise that would have allowed
Nortel Canada, Nortel U.S. and Nortel Europe to split up the money
and pay off creditors without a court battle, the report further
related.
While the lawyers have been receiving their fees every month since
the company's 2009 collapse, Nortel's creditors around the world,
with a few exceptions, must wait until the end of the trial -- and
any appeals -- to collect their share of the sale proceeds, the
report said. That includes pensioners and former employees, as
well as investors in Nortel's debt.
About Nortel Networks
Headquartered in Ontario, Canada, Nortel Networks Corporation and
its various affiliated entities provided next-generation
technologies, for both service provider and enterprise networks,
support multimedia and business-critical applications. Nortel did
business in more than 150 countries around the world. Nortel
Networks Limited was the principal direct operating subsidiary of
Nortel Networks Corporation.
On Jan. 14, 2009, Nortel Networks Inc.'s ultimate corporate parent
Nortel Networks Corporation, NNI's direct corporate parent Nortel
Networks Limited and certain of their Canadian affiliates
commenced a proceeding with the Ontario Superior Court of Justice
under the Companies' Creditors Arrangement Act (Canada) seeking
relief from their creditors. Ernst & Young was appointed to serve
as monitor and foreign representative of the Canadian Nortel
Group. That same day, the Monitor sought recognition of the CCAA
Proceedings in U.S. Bankruptcy Court (Bankr. D. Del. Case No.
09-10164) under Chapter 15 of the U.S. Bankruptcy Code.
That same day, NNI and certain of its affiliated U.S. entities
filed voluntary petitions for relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Del. Case No. 09-10138).
In addition, the High Court of England and Wales placed 19 of
NNI's European affiliates into administration under the control of
individuals from Ernst & Young LLP. Other Nortel affiliates have
commenced and in the future may commence additional creditor
protection, insolvency and dissolution proceedings around the
world.
On May 28, 2009, at the request of administrators, the Commercial
Court of Versailles, France, ordered the commencement of secondary
proceedings in respect of Nortel Networks S.A. On June 8, 2009,
Nortel Networks UK Limited filed petitions in U.S. Bankruptcy
Court for recognition of the English Proceedings as foreign main
proceedings under Chapter 15.
U.S. Bankruptcy Judge Kevin Gross presides over the Chapter 11 and
15 cases. Mary Caloway, Esq., and Peter James Duhig, Esq., at
Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware, serves as
Chapter 15 petitioner's counsel.
In the Chapter 11 case, James L. Bromley, Esq., at Cleary Gottlieb
Steen & Hamilton, LLP, in New York, serves as the U.S. Debtors'
general bankruptcy counsel; Derek C. Abbott, Esq., at Morris
Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware
counsel. The Chapter 11 Debtors' other professionals are Lazard
Freres & Co. LLC as financial advisors; and Epiq Bankruptcy
Solutions LLC as claims and notice agent.
The United States Trustee appointed an Official Committee of
Unsecured Creditors in respect of the U.S. Debtors. An ad hoc
group of bondholders also was organized.
Fred S. Hodara, Esq., at Akin Gump Strauss Hauer & Feld LLP, in
New York, and Christopher M. Samis, Esq., at Richards, Layton &
Finger, P.A., in Wilmington, Delaware, represent the Official
Committee of Unsecured Creditors.
An Official Committee of Retired Employees and the Official
Committee of Long-Term Disability Participants tapped Alvarez &
Marsal Healthcare Industry Group as financial advisor. The
Retiree Committee is represented by McCarter & English LLP as
Delaware counsel, and Togut Segal & Segal serves as the Retiree
Committee. The Committee retained Alvarez & Marsal Healthcare
Industry Group as financial advisor, and Kurtzman Carson
Consultants LLC as its communications agent.
Several entities, particularly, Nortel Government Solutions
Incorporated and Nortel Networks (CALA) Inc., have material
operations and are not part of the bankruptcy proceedings.
As of Sept. 30, 2008, Nortel Networks Corp. reported consolidated
assets of $11.6 billion and consolidated liabilities of $11.8
billion. The Nortel Companies' U.S. businesses are primarily
conducted through Nortel Networks Inc., which is the parent of
majority of the U.S. Nortel Companies. As of Sept. 30, 2008, NNI
had assets of about $9 billion and liabilities of $3.2 billion,
which do not include NNI's guarantee of some or all of the Nortel
Companies' about $4.2 billion of unsecured public debt.
Since the commencement of the various insolvency proceedings,
Nortel has sold its business units and other assets to various
purchasers. Nortel has collected roughly $9 billion for
distribution to creditors. Of the total, $4.5 billion came from
the sale of Nortel's patent portfolio to Rockstar Bidco, a
consortium consisting of Apple Inc., EMC Corporation,
Telefonaktiebolaget LM Ericsson, Microsoft Corp., Research In
Motion Limited, and Sony Corporation. The consortium defeated a
$900 million stalking horse bid by Google Inc. at an auction. The
deal closed in July 2011.
Nortel has filed a proposed plan of liquidation in the U.S.
Bankruptcy Court. The Plan generally provides for full payment on
secured claims with other distributions going in accordance with
the priorities in bankruptcy law.
Judge Gross and the court in Canada scheduled trials in 2014 on
how to divide proceeds among creditors in the U.S., Canada, and
Europe.
NORTH BALDWIN EMS: Voluntary Chapter 11 Case Summary
----------------------------------------------------
Debtor: North Baldwin EMS, LLC
840 D'Olive Street
P.O. Box 189
Bay Minette, AL 36507
Case No.: 14-01443
Chapter 11 Petition Date: May 6, 2014
Court: United States Bankruptcy Court
Southern District of Alabama (Mobile)
Debtor's Counsel: Mary Elizabeth Snow, Esq.
SNOW & ASSOCIATES, P.C.
2505 River Forest Drive
Mobile, AL 36605
Tel: (251) 709-1803
Fax: 251-471-5492
Email: me_snow@bellsouth.net
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by John M. Sutton, member.
The Debtor did not file a list of its largest unsecured creditors
when it filed the petition.
NORTH WOODS CAPITAL: 6 Parcels of Property to Be Sold June 12
-------------------------------------------------------------
Pursuant to a Judgment of Foreclosure and Sale entered in the case
captioned, JOHNSON BANK, Plaintiff vs NORTH WOODS CAPITAL PARTNERS
LTD., et al., Defendant(s), Case No. 13-CV-152, before the State
Of Wisconsin Circuit Court, Sawyer County, on Nov. 25, 2013, a
Sheriff's sale will be held at the main lobby of the Sawyer County
Courthouse located at 10610 Main Street, Hayward, Wisconsin, on
June 12, 2014, at 10:15 a.m., of six parcels of property located
in the Town of Round Lake that serve as collateral to the debt
owed to the bank. The Mortgaged Premises will be sold subject to
all liens and encumbrances.
The Sheriff will accept as a deposit or down-payment from a
purchaser, other than the Plaintiff, an amount of at least 10% of
the purchaser?s bid, which deposit or down-payment shall be paid
by either cash, certified check or cashier?s check at the time of
sale. The remainder of the bid is to be paid in cash, certified
check or cashier?s check within 10 days of the date the sale is
confirmed.
Any purchaser other than the Plaintiff is responsible for payment
of any and all transfer fees/taxes, which amount will be paid out
of the bid amount.
Counsel to the Bank may be reached at:
John M. Van Lieshout
REINHART BOERNER VAN DEUREN S.C.
1000 North Water Street, Suite 1700
Milwaukee, WI 53202
Tel: 414-298-1000
E-mail: jvanlies@reinhartlaw.com
NORTHERN BERKSHIRE: MNA/NNU Releases Detailed Financial Analysis
----------------------------------------------------------------
As Berkshire Medical Center, local and state officials continue to
work on re-establishing desperately needed health care services
for Northern Berkshire County following the recent illegal and
unexpected closing of North Adams Regional Hospital (NARH),
researchers with the Massachusetts Nurses Association/National
Nurses United (MNA/NNU) have completed and released a detailed
financial analysis of Northern Berkshire Health records, which
show that restoration of a full-service hospital is a viable and
necessary option for the region, which serves more than 38,000
residents.
The report, which tracks NARH finances over a ten-year period,
clearly shows that as a provider of health care services, the
hospital was a going concern, making millions of dollars in
profits on outpatient, inpatient and emergency services between
2000 and 2012. However, a series of poor management decisions
including millions of dollars of debt generated to support a
failed real estate venture is what ultimately doomed the facility,
which was illegally closed by NBH management in late March with
only three days' notice.
According to the report, between 2000 ? 2012, NARH "patient
services revenues grew by 78%, while expenses only rose by 29%.
The surplus derived from patient services made the system a $23
million profit in 2012, up from $4.3 million in 2000 ? a 435%
increase (see chart in the report below). And while profits from
patient services fluctuated from year to year, they never fell
below $4.3 million, and the average profit was over $9 million.
In short, that means that the health care services NARH has
offered to its community have made the hospital millions of
dollars in each of the last twelve years."
Unfortunately, while the hospital was making money fulfilling its
mission of caring for the sick and injured of Northern Berkshire
County, the new report found Northern Berkshire Healthcare
executives made ill-fated decisions to acquire more and more debt.
Between 1996 and 2004, Northern Berkshire Healthcare assumed
nearly $65 million in debt through revenue bonds. This included
approximately $25 million in debt to finance the purchase of Sweet
Brook Transitional Care & Living Centers and Sweetwood Continuing
Care Retirement Community -- an alarmingly large assumption of
debt which bore no connection to the provision of hospital
services. This real estate investment scheme immediately began
unraveling and the Sweets began costing NBH money. NBH then "took
aggressive steps" -- cutting staff and reducing operating costs at
NARH in order to "lend money" to the Sweets.
Last week, plans were finalized in bankruptcy court for the
opening of a satellite emergency service at the site of NARH as of
May 19 under the auspices of Berkshire Medical Center, while the
state Department of Health and Human Services has hired a
consultant to explore the need for additional services.
"This report provides valuable information to support our strong
contention that a satellite emergency service is only a small
first step to meeting the needs of this community," said
Robin Simonetti, RN, a long time nurse at NARH and an active MNA
member who is working on the community-wide campaign to restore
needed services. "The real solution to this crisis is the
restoration of a full service hospital, which this report shows
can and will be successful."
Since the closing, the community has been urging all parties
working on this issue to establish a plan and the funding needed
to maintain a full service hospital that meets the needs of the
residents of Northern Berkshire County. Right now, Berkshire
Health Systems operates Fairview Hospital in Great Barrington, a
full service hospital for Southern Berkshire County that serves a
smaller population than NARH. "We believe the residents of
Northern Berkshire County should expect the same level of care as
the rest of the County and that all policymakers and all
stakeholders who are accountable for the safety of this community
work to that end," Ms. Simonetti concluded.
In addition to working with the community and stakeholders in
North Adams to save their community hospital, the MNA/NNU is also
working on the state level to implement policy changes that will
protect other hospitals from closure in the future. Specifically
the organization is promoting a bill and ballot measure -- the
Hospital Profit Transparency & Fairness Act -- which will call for
greater transparency of hospital financial and investment
activity, while also establishing a funding mechanism to support
hospitals and services threatened with closure. If this law were
in place, it is unlikely that NARH would have had to close. For
more information on the initiative, visit:
www.HospitalTransparencyAct.com
Text of Full Report
Financial Analysis Shows a Full Service Hospital is Viable in
Northern Berkshire County
Absent Poor Management and Bad Real Estate Investments
North Adams Regional Hospital Was a Going Concern
Northern Berkshire Healthcare (NBH) announced last month that it
was forced to close North Adams Regional Hospital (NARH) with
virtually no notice because the hospital had defaulted on its debt
and could not be sustained on its purportedly poor reimbursements.
But a review of NBH records reveals that the financial troubles
facing the system were not connected to patient service revenue,
and that North Adams Regional Hospital can be sustained as a full
service hospital by the community that relies upon it for care.
Patient Services Revenue & Federal Reimbursement
Despite claims from NBH executives, North Adams Regional Hospital
has long been making money on its patient-care services.
NBH finances shows that NARH made millions of dollars on
outpatient, inpatient, and Emergency Department services between
2000 and 2012.[1] In that time period, patient services revenues
grew by 78%, while expenses only rose by 29%. The surplus derived
from patient services made the system a $23 million profit in
2012, up from $4.3 million in 2000 -- a 435% increase (see chart).
And while profits from patient services fluctuated from year to
year, they never fell below $4.3 million, and the average profit
was over $9 million. In short, that means that the healthcare
services NARH has offered to its community have made the hospital
millions of dollars in each of the last twelve years.
Since closing the hospital, NBH has suggested that NARH's fate was
simply the result of its community hospital status and changes in
federal reimbursement, but an analysis by the Center for Health
Information and Analysis (CHIA) proves that this is not the case.
Disproportionate Share Hospitals (DSH) are hospitals in
communities with large poor populations that receive a minimum of
63% of their revenues from public payers like Medicaid and
Medicare, which typically reimburse hospitals at lower rates than
private health insurance companies. At NARH, public payers
represent less than 65% of its payer mix, which is below the state
average, and of the remaining eight Disproportionate Share
Hospitals in Western Massachusetts, seven of them are considerably
more dependent on public payers than NARH.[2] The remaining 35% of
NARH revenue, unlike other community hospitals, comes directly
from patients and their insurance companies. And CHIA compared
what large private insurance companies paid to hospitals in 2012
and discovered that NARH received higher payments than the
majority of its community hospital counterparts.[3] What the CHIA
data tell us is that NARH is less reliant on lower-reimbursing
federal payers than most community hospitals, has a higher
proportion of insured patients, and those health insurers are
paying NARH more than they pay other hospitals.
Since it is clear that patient care services have been profitable
every single year for more than a decade, and NARH has not
suffered from some of the issues facing other community hospitals
in the state, what has driven Northern Berkshire Healthcare's
financial problems? In short, it has been Northern Berkshire
Healthcare's decisions to acquire more and more debt. Between
1996 and 2004, Northern Berkshire Healthcare assumed nearly $65
million in debt through revenue bonds issued by
MHEFA/MassDevelopment:
In 1996, North Adams Regional Hospital took on $12.8 million in
revenue bond debt, in part to refinance older debt.
In 1999, NARH assumed approximately $25 million in debt to finance
the purchase of Sweet Brook Transitional Care & Living Centers and
Sweetwood Continuing Care Retirement Community -- an alarmingly
large assumption of debt which bore no connection to the provision
of hospital services. This real estate investment scheme
immediately began unraveling and the Sweets began costing NBH
money. NBH then "took aggressive steps" -- cutting staff and
reducing operating costs in order to "lend money" to the
Sweets.[4] Ultimately, NBH sold the Sweets in 2010 for $7 million
under pressure from bondholders.
In 2004, NBH took on another $27 million in revenue bonds, in part
to pay off a portion of the 1996 debt. The 2004 revenue bonds
immediately went into default, as the organization could not meet
some of the financial covenants required by bondholders.
Right up until the day NARH closed, the majority of NBH's
crippling debt service was not the result of expenditures related
to the provision of patient care or even hospital capital
improvements. Instead, the deep debt of purchasing the Sweets and
the resulting significant annual operating losses incurred for the
next ten years of operating the Sweets, were the primary factors
contributing to NBH's financial ruin.
By the time NBH filed for bankruptcy in 2012, its debt burden
still hovered around $44 million.[5] In its court filings, NBH
attributed its financial problems almost entirely to becoming
"highly leveraged" through the series of bond issuances listed
above. And NBH laid out the many ways it had sought to deal with
its long-term debt burden, including cutting costs and laying off
staff in order to pay off the debt. It appears that, while
patient care services did not contribute to NBH's financial
distress and were, in fact, a consistent source of revenue year
after year, Northern Berkshire Healthcare sought to remedy its
indebtedness by making cuts to those very services. The final
impetus for NBH's Chapter 11 filing was bondholders' refusal to
make a voluntary deal to restructure the debt, again affirming the
catastrophic impacts this debt took on North Adams Regional
Hospital.
As Berkshire Medical Center assumes the operations of the hospital
in North Adams, it will face the challenges any community hospital
does: populations of sick and poor patients, less than ideal
public payer reimbursements, and changes in the healthcare
industry that are as yet unknown. But the history of North Adams
Regional Hospital clearly indicates that the Northern Berkshires
can sustain a hospital that offers the full spectrum of services
which meets the needs of the community in a fiscally viable
manner.
Founded in 1903, the Massachusetts Nurses Association/National
Nurses United is the largest professional health care organization
and the largest union of registered nurses in the Commonwealth of
Massachusetts. Its 23,000 members advance the nursing profession
by fostering high standards of nursing practice, promoting the
economic and general welfare of nurses in the workplace,
projecting a positive and realistic view of nursing, and by
lobbying the Legislature and regulatory agencies on health care
issues affecting nurses and the public. The MNA is a founding
member of National Nurses United, the largest national nurses
union in the United States with more than 170,000 members from
coast to coast.
[1] IRS Form 990s (financial reports): 2001-2012
[2] Hospital Cohort Profile: Community, Disproportionate Share
Hospitals. Center for Health Information and Analysis. March,
2014; Hospital Profile: North Adams Regional Hospital. Center for
Health Information and Analysis. March, 2014
[3] Ibid. The average DSH commercial payer price level is in the
41st percentile; NARH's price is in the 65th percentile.
[4] In re Northern Berkshire Healthcare, Inc., et al. (Chapter 11
Case No. 11 ? 31114 (HJB)). United State Bankruptcy Court District
of Massachusetts, Western Division. January 5, 2012
[5] Ibid.
About Northern Berkshire
Northern Berkshire Healthcare, Inc., is a non-profit healthcare
corporation in northern Berkshire County, Massachusetts. Together
with its affiliates, Northern Berkshire Healthcare operates the
North Adams Regional Hospital and a visiting nurse association and
hospice in North Adams, Massachusetts. North Adams Regional
Hospital is an 85 staffed bed community hospital located in North
Adams, Mass. (110 miles west of Boston).
Northern Berkshire Healthcare, Inc., North Adams Regional
Hospital, Inc., Visiting Nurse Association & Hospice of Northern
Berkshire, Inc., Northern Berkshire Healthcare Physicians Group,
Inc., and Northern Berkshire Realty, Inc., filed for Chapter 11
bankruptcy (Bankr. D. Mass. Case No. 11-31114) on June 13, 2011,
to address their overleveraged balance sheet and effect a
reorganization of their operations. On the same day, Northern
Berkshire Community Services, Inc., filed a petition for Chapter 7
relief also in the District of Massachusetts bankruptcy court.
Judge Henry J. Boroff presides over the Debtors' cases. Steven T.
Hoort, Esq., James A. Wright, III, Esq., Jonathan B. Lackow, Esq.,
and Matthew F. Burrows, Esq., at Ropes & Gray LLP, in Boston,
Mass., serve as the Debtors' bankruptcy counsel. The Debtors'
Financial Advisors are Carl Marks Advisory Group LLC. GCG Inc.
serves as claims and noticing agent.
Northern Berkshire disclosed $22,957,933 in assets and $53,379,652
in liabilities as of the Chapter 11 filing. The petition was
signed by William F. Frado, Jr., president.
William K. Harrington, the U.S. Trustee for Region 1, appointed
five members to the official unsecured creditors' committee in the
Debtors' cases. The Committee tapped Duane Morris LLP as its
counsel.
The Debtors obtained confirmation of their Chapter 11 plan on
April 10, 2012. Northern Berkshire Healthcare said on June 5,
2012, it has emerged from Chapter 11 reorganization.
NYTEX ENERGY: CFO Bryan Sinclair Resigns
----------------------------------------
Bryan A. Sinclair resigned as vice president and chief financial
officer effective as of May 15, 2014. Mr. Sinclair, who was
employed by NYTEX Energy Holdings, Inc., in March 2011, is
resigning to pursue another business opportunity.
About NYTEX Energy
Located in Dallas, Texas, Nytex Energy Holdings, Inc., is an
energy holding company with operations centralized in two
subsidiaries, Francis Drilling Fluids, Ltd. ("FDF") and NYTEX
Petroleum, Inc. ("NYTEX Petroleum"). FDF is a 35 year old full-
service provider of drilling, completion and specialized fluids
and specialty additives; technical and environmental support
services; industrial cleaning services; equipment rentals; and
transportation, handling and storage of fluids and dry products
for the oil and gas industry. NYTEX Petroleum, Inc., is an
exploration and production company focusing on early stage
development of minor oil and gas resource plays within the United
States.
The Company's balance sheet at Sept. 30, 2013, showed $8.02
million in total assets, $2.73 million in total liabilities, $4.76
million in mezzanine equity and $519,124 in total stockholders'
equity.
NYTEX Energy reported a net loss of $5.15 million in 2012, as
compared with net income of $16.75 million in 2011.
As reported by the TCR on May 8, 2014, NYTEX Energy has delayed
the filing of its annual report on Form 10-K for the year ended
Dec. 31, 2013.
"Due to limited financial resources, limited staff availability,
and the need to focus on operational and capital raising matters,
the process of compiling and disseminating the information
required to be included in the Form 10-K for the relevant fiscal
year can not be completed without incurring undue hardship and
expense," the Company said.
OCWEN FINANCIAL: Moody's Assigns 'B2' Rating on New Senior Notes
----------------------------------------------------------------
Moody's Investors Service assigned a B2 rating to Ocwen Financial
Corp's proposed senior unsecured notes, and affirmed Ocwen's B1
Corporate Family and Senior Secured Bank Credit Facility ratings.
The outlook for all ratings is stable.
Ratings Rationale
Ocwen's ratings reflect the company's rapid growth, balanced by
its solid capital and leverage metrics for a B1 rated financial
services entity. In addition, the ratings reflect the company's
solid track record as a non-prime residential mortgage servicer,
along with its record of successful integration of servicer
acquisitions.
The ratings are constrained by the increased regulatory attention
to Ocwen and its specialty mortgage servicer peers, the fact that
a large percent of new servicing volume is obtained through
opportunistic bulk acquisitions and the monoline nature of the
financial services company concentrating on the residential
mortgage servicing market. Management also has a history of
exploring new ancillary business opportunities, creating potential
distractions from its focus on the core servicing franchise.
On May 7, 2014, Ocwen announced their intention to issue a new
$350 million 5-year senior unsecured term loan. The proceeds of
which will be used for general corporate purposes, including
potential refinancing opportunities and share repurchases.
The B2 rating on the proposed $350 million unsecured bond is based
upon its terms and priority in Ocwen's capital profile. The
unsecured notes are structurally subordinated to the firm's
secured indebtedness.
The rating outlook is stable. The stable outlook reflects Moody's
expectation that Ocwen will be able to successfully integrate its
recent and future acquisitions, which pose operational integration
risks, as well as continue to maintain its solid servicing and
financial performance.
Given the continued evolution of the company's business as well as
the increased regulatory scrutiny of the company and the sector,
an upgrade is unlikely at this time.
Negative ratings pressure could result if the company's servicing
performance or financial fundamentals weaken.
The principal methodology used in this rating was Finance Company
Global Rating Methodology published in March 2012.
OCWEN FINANCIAL: S&P Assigns 'B' Rating to $350MM 5-Yr. Sr. Notes
-----------------------------------------------------------------
Standard & Poor's Ratings Services said that it assigned its 'B'
rating on OCWEN Financial Corp.'s $350 million five-year senior
unsecured notes. At the same time, S&P affirmed its 'B+' issuer
credit rating on Ocwen. The outlook remains stable.
"The issue rating follows Ocwen's announcement that it plans to
issue $350 million five-year senior unsecured notes to fund future
growth in business, opportunistically repurchase stock, and for
general corporate purposes," said Standard & Poor's credit analyst
Stephen Lynch. S&P rates the company's senior unsecured notes a
notch below the issuer credit rating on Ocwen because of their
structural subordination to the company's senior secured term
loan.
Atlanta-based Ocwen's primary source of revenue is servicing
mortgage loans, the majority of which is subprime residential
loans. Ocwen is the largest nonbank mortgage servicer in the U.S.
in terms of total unpaid principal balance (UPB). Buying
servicing rights provides Ocwen with a high degree of stability
because the servicing cannot be reassigned. There are, however,
risks with buying servicing rights. First, purchasing the
servicing rights requires a capital outlay to buy the mortgage
servicing right (MSR), which will then amortize over the life of
the asset. Second, the primary servicer is responsible for
advancing payments to securitization investors between when the
mortgage goes delinquent and when the home is sold or when the
loan is cured. Ocwen finances most of its servicer advances
through secured wholesale funding and asset-backed notes, with
terms of one to three years. The company also sells its servicing
advances to related party Home Loan Servicing Solutions.
The stable outlook reflects S&P's view that Ocwen will
successfully navigate regulatory concerns and continue to purchase
MSRs to replace portfolio run-off without materially altering the
company's capital structure.
S&P could lower the ratings if the company pursues a more
aggressive acquisition strategy that increases leverage materially
(S&P measures leverage by adjusted EBITDA relative to debt and
interest expense). More specifically, S&P could downgrade Ocwen
if operational miscues or the debt burden created by acquisitions
lead to multiple quarterly losses or debt to EBITDA of more than
3.0x
OPTIMUMBANK HOLDINGS: Earns $330,000 in First Quarter
-----------------------------------------------------
Optimumbank Holdings, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing
net earnings of $330,000 on $1.23 million of total interest income
for the three months ended March 31, 2014, as compared with a net
loss of $2.15 million on $1.30 million of total interest income
for the same period in 2013.
As of March 31, 2014, the Company had $132.77 million in total
assets, $132.33 million in total liabilities and $449,000 in total
stockholders' equity.
A copy of the Form 10-Q is available for free at:
http://is.gd/pmYJo1
About OptimumBank Holdings
OptimumBank Holdings, Inc., headquartered in Fort Lauderdale,
Fla., is a one-bank holding company and owns 100 percent of
OptimumBank, a state (Florida)-chartered commercial bank.
The Company offers a wide array of lending and retail banking
products to individuals and businesses in Broward, Miami-Dade and
Palm Beach Counties through its executive offices and three branch
offices in Broward County, Florida.
Optimumbank Holdings reported a net loss of $7.07 million in 2013,
a net loss of $4.69 million in 2012, and a net loss of $3.74
million in 2011.
Regulatory Matters
Effective April 16, 2010, the Bank consented to the issuance of a
Consent Order by the Federal Deposit Insurance Corporation and
the the Florida Office of Financial Regulation, also effective as
of April 16, 2010.
The Consent Order represents an agreement among the Bank, the FDIC
and the OFR as to areas of the Bank's operations that warrant
improvement and presents a plan for making those improvements.
The Consent Order imposes no fines or penalties on the Bank. The
Consent Order will remain in effect and enforceable until it is
modified, terminated, suspended, or set aside by the FDIC and the
OFR.
OREMEX SILVER: Provides Update on Management Cease Trade Order
--------------------------------------------------------------
Oremex Silver Inc. on May 6 disclosed that further to its news
release on April 1, 2014, the British Colombia Securities
Commission issued a management cease trade order on April 1, 2014
for failure to its annual financial statements, CEO and CFO
certifications and management discussion and analysis for the year
ended November 30, 2013 by the deadline of March 30, 2013. The
MCTO prohibits all trading by certain insiders of Oremex in
securities of the Company until the order is revoked. The Company
is required to provide bi-weekly status updates in accordance with
National Policy 12-203 - Cease Trade Orders for Continuous
Disclosure Defaults until the MCTO has been revoked of a full
cease trade order issued.
The Company has now obtained all the documentation required
regarding its Mexican operations and expects to complete the
accounting related to its Canadian operations in two weeks. The
auditors will then commence the audit process. The Company
continues to anticipate that the Annual Filings will be completed
on or before May 30, 2014.
About Oremex
Oremex is a Canadian company focusing on the exploration and
development of silver projects along a highly productive
mineralized belt in Mexico. The Company has a portfolio of silver
projects including a mineral resource of 50.8 million ounces of
silver at its Tejamen deposit.
ORYON TECHNOLOGIES: Files Chapter 11 Bankruptcy Petition
---------------------------------------------------------
Oryon Technologies, Inc. on May 7 disclosed that it has filed a
Petition for protection and reorganization under Chapter 11 of the
United States Bankruptcy Code. The filing was made on Tuesday,
May 6, 2014, and was driven by a number of factors external to the
company's on-going business:
-- EFL Tech B.V., which purchased a majority of Oryon's
outstanding common stock under a Subscription Agreement that
closed on January 21, 2014, breached that agreement by failing to
make a payment of $250,000 to Oryon as required on March 31, 2014,
-- A lawsuit brought by M. Richard Marcus against Oryon and
certain company directors with respect to the EFL transaction has
consumed appreciable operating funds and management time,
negatively impacting business activities,
-- The Marcus lawsuit, as well as a lawsuit brought by Myant
Capital
Partners, Inc., an Ontario, Canada garment manufacturer and
a failed suitor for control of Oryon, created a business
environment in which it was not possible for Oryon to attract
additional investment funds.
Oryon believes that its extensive electroluminescent (EL) patent
portfolio, production-ready flexible lighting technology, wearable
electronics market interest and customer support can create a
healthy business under the reorganization protection of the
Bankruptcy Court.
About Oryon
Oryon Technologies, Inc. (OTCQB : ORYN) --
http://www.oryontech.com-- is a research, development and
applications engineering company that has developed multiple
patents relating to electroluminescent ("EL") lighting trademarked
as "ELastoLite". ELastoLite(R) enables thin, flexible, crushable,
water-resistant lighting systems that can be incorporated into a
wide range of applications such as safety apparel, sporting gear,
shoes, membrane switches, signage and displays among others.
Market areas include: industrial, municipal safety; military,
medical and automotive.
PLATFORM SPECIALTY: $200MM PIPE Offering No Impact on B1 Rating
---------------------------------------------------------------
Moody's said Platform Specialty Products Corporation's (Platform,
B1, stable) announced $200 million private issuance of public
equity (PIPE) offering, which is expected to close around May
20th, will not impact the rating.
Platform Specialty Products Corporation (Platform) is a publicly-
traded special purpose acquisition company founded by investors
Martin Franklin and Nicolas Berggruen, and formed as a acquisition
vehicle for specialty chemicals companies. Platform's foundation
acquisition in late-2013 was MacDermid, Incorporated (MacDermid) a
global manufacturer of a variety of chemicals and technical
services utilized in a range of applications and markets
including; metal and plastic finishing, electronics, graphic arts,
and offshore drilling. MacDermid's legacy management, including
its Chairman and CEO Daniel Leever, continue their work with the
company and maintain an ownership stake in Platform. MacDermid is
headquartered in Waterbury, Connecticut, and operates facilities
worldwide. Revenues for the FYE ending December 31, 2013 were $746
million.
The AgroSolutions business is a division of Chemtura Corporation
(Chemtura, Ba3, stable) which manufactures and sells innovative,
application-focused specialty chemical and consumer products
offerings. AgroSolutions is a global distributor and developer of
crop protection chemicals including: seed treatments, fungicides,
miticides, insecticides, growth regulators, and herbicides. Net
sales for the AgroSolutions business in 2013 were $449 million.
PRINCESS HEALTHCARE: Voluntary Chapter 11 Case Summary
------------------------------------------------------
Debtor: Princess Healthcare, LLC
150 Deodar Lane
150 Deodar Lane
Bradbury, CA 91008
Case No.: 14-18977
Chapter 11 Petition Date: May 7, 2014
Court: United States Bankruptcy Court
Central District of California (Los Angeles)
Judge: Hon. Vincent P. Zurzolo
Debtor's Counsel: Jerry R Lowe, Esq.
LAW OFFICE OF JERRY R. LOWE
2344 Tulare St Ste 301
Fresno, CA 93721
Tel: 559-495-1529
Fax: 559-495-1527
Email: jerry@jerrylowelaw.com
Total Assets: $2 million
Total Liabilities: $1.99 million
The petition was signed by Marlene Robertson, managing member.
The Debtor did not file a list of its largest unsecured creditors
when it filed the petition.
QUICKSILVER RESOURCES: Reports $59MM Net Loss in 1st Quarter
------------------------------------------------------------
Quicksilver Resources Inc. reported a net loss of $58.83 million
on $91.78 million of total revenue for the three months ended
March 31, 2014, as compared with a net loss of $59.70 million on
$118.70 million of total revenue for the same period in 2013.
As of March 31, 2014, the Company had $1.25 billion in total
assets, $2.33 billion in total liabilities and a $1.07 billion
total stockholders' deficit.
"Quicksilver is making significant gains on reducing debt and
creating new growth opportunities," said Glenn Darden,
Quicksilver's chief executive officer. "The focus is completing
our transaction in the Horn River Basin and executing on the
development plan of our streamlined portfolio."
A copy of the press release is available for free at:
http://is.gd/GBt3A6
About Quicksilver
Quicksilver Resources Inc. is an exploration and production
company engaged in the development and production of long-lived
natural gas and oil properties onshore North America. Based in
Fort Worth, Texas, the company is widely recognized as a leader in
the development and production from unconventional reservoirs
including shale gas, and coal bed methane. Following more than 30
years of operating as a private company, Quicksilver became public
in 1999 and is listed on the New York Stock Exchange under the
ticker symbol KWK. The company has U.S. offices in Fort Worth,
Texas; Glen Rose, Texas; Steamboat Springs, Colorado; Craig,
Colorado and Cut Bank, Montana. The Company's Canadian
subsidiary, Quicksilver Resources Canada Inc., is headquartered in
Calgary, Alberta.
Quicksilver Resources reported net income of $161.61 million on
$561.56 million of total revenue for the year ended Dec. 31, 2013,
as compared with a net loss of $2.35 billion on $709.03 million of
total revenue during the prior year.
* * *
As reported by the TCR on June 17, 2013, Moody's Investors Service
downgraded Quicksilver Resources Inc.'s Corporate Family Rating to
Caa1 from B3. "This rating action is reflective of Quicksilver's
revised recapitalization plan," stated Michael Somogyi, Moody's
Vice President and Senior Analyst. "Quicksilver's inability to
complete its recapitalization plan as proposed elevates near-term
refinancing risk given its weak operating profile and raises
concerns over the sustainability of the company's capital
structure."
In the June 27, 2013, edition of the TCR, Standard & Poor's
Ratings Services said it lowered its corporate credit rating on
Fort Worth, Texas-based Quicksilver Resources Inc. to 'CCC+' from
'B-'. "We lowered our corporate credit rating on Quicksilver
Resources because we do not believe the company will be able to
remedy its unsustainable leverage," said Standard & Poor's credit
analyst Carin Dehne-Kiley.
QUICKSILVER RESOURCES: S&P Raises Rating on 2nd Lien Debt to CCC+
-----------------------------------------------------------------
Standard & Poor's Ratings Services said it raised its rating on
Quicksilver Resources Inc.'s second-lien debt to 'CCC+' from 'CCC'
and revised its recovery rating on this debt to '4' from '5'. The
'4' recovery rating reflects S&P's expectation of average (30% to
50%) recovery in the event of a payment default. The 'CCC+'
corporate credit rating and 'CCC-' unsecured debt ratings remain
unchanged. The outlook is stable.
S&P's ratings on Quicksilver incorporate its assessment of the
company's "vulnerable" business risk and "highly leveraged"
financial risk, and the application of S&P's 'CCC' criteria in
light of what S&P views as the company's unsustainably high
leverage.
"The stable outlook reflects our expectation that Quicksilver's
liquidity will remain adequate for the next 12 to 18 months due to
the company's drastic cuts in capital spending and strong hedging
position, although leverage is unsustainably high," said Standard
& Poor's credit analyst Carin Dehne-Kiley.
S&P could lower the rating if it believed liquidity would
deteriorate, which would most likely occur if capital spending
greatly exceeded S&P's estimates or if the company's borrowing
base were meaningfully reduced.
S&P could raise the rating if it believed Quicksilver's debt to
EBITDA would stabilize at 6x or lower, with adequate liquidity,
which would most likely occur if the company were able to
successfully monetize assets and ramp up production.
RADIAN GUARANTY: Moody's Raises Insurance Financial Rating to Ba2
-----------------------------------------------------------------
Moody's Investors Service has upgraded the insurance financial
strength (IFS) ratings of Radian Guaranty Inc. (Radian Guaranty)
and Radian Mortgage Assurance Inc. (RMA) to Ba2 from Ba3. In
addition, Moody's has upgraded the senior debt rating of Radian
Group Inc. to B3 from Caa1. The outlook for Radian, Radian
Guaranty and RMA remains positive.
Ratings Rationale - Radian Group Inc.
Moody's said that the upgrade of Radian's senior debt rating to
B3, from Caa1, reflects the improving credit profile of Radian
Guaranty, its flagship operating subsidiary. The B3 senior debt
rating reflects the meaningful debt burden relative to its
liquidity and the fact that dividends from Radian Guaranty are
unlikely for the foreseeable future, given its still weak
regulatory capital position.
In addition, Moody's believes that significant uncertainty exists
about the level of capital required under the upcoming, revised
GSE capital criteria. A requirement for Radian to make a higher
than expected capital contribution to Radian Guaranty could place
strain on Radian's holding company resources. As of March 31, 2014
Radian has remaining unrestricted cash and liquid investments of
approximately $615 million at the holding company. This is before
taking into consideration any additional capital contributions to
Radian Guaranty, or the expected proceeds from the planned
issuance of common stock and senior unsecured notes. Radian
intends to use the expected proceeds to fund the pending purchase
of Clayton Holdings LLC, to fund early the redemption of the
5.375% Senior Notes due in 2015 and for working capital.
On May 6, 2014, Radian announced the acquisition of Clayton
Holdings LLC, a provider of outsourcing services to the mortgage
industry. The purchase consideration of $305 million, payable in
cash, will be financed through public issuances of debt and
equity. Moody's believes that the acquisition provides a good
opportunity for Radian to expand its franchise beyond its core
mortgage insurance business, while remaining within its field of
expertise. However, Moody's also noted that the contribution of
capital, albeit newly raised, to non-core operations, while
Radian's ability to meet the capital requirements under the new
GSE eligibility criteria remain unknown, presents a distinct risk.
Ratings Rationale -- Radian Guaranty And Rma
The upgrade of the IFS ratings of Radian Guaranty and RMA to Ba2,
from Ba3, reflects: (i) significant improvement in operating
profits generated by the mortgage insurance business; (ii)
stabilization of, and increased visibility into losses on the
legacy mortgage insurance portfolio; (iii) continued improvement
in U.S. housing fundamentals; and (iv) their consolidated
financial resources, including a consideration for the ownership
of Radian Asset, in excess of Moody's base case losses.
Rating Outlooks - Radian, Radian Guaranty And Rma
The positive rating outlooks reflect: (i) the potential for
further improvements in profitability and related internal capital
generation; (ii) continued improvement in visibility about legacy
mortgage insurance losses; (iii) the firm's high quality new
business production; and (iv) the steadily improving housing
finance environment.
Moody's cited the following factors that could lead to a further
upgrade of Radian's ratings and/or an upgrade of the ratings of
Radian Guaranty and RMA: (i) greater certainty about Radian
Guaranty's ability to comply with expected, revised GSE capital
requirements; (ii) improving housing market outlook resulting in
substantially lower downside risk for insured mortgage losses;
(iii) injection of additional capital that meaningfully improves
its capital adequacy; or (iv) better than expected loss
developments in its financial guaranty or mortgage insurance
portfolios.
Moody's cited the following factors that could lead to a rating
downgrade for these companies: (i) greater than anticipated
adverse loss developments in the financial guaranty and/or
mortgage insurance portfolios resulting in less resources
available at the insurance companies; (ii) capital deficiency
relative to its Ba rating threshold that remains uncorrected; or
(iii) meaningful deterioration in housing finance fundamentals.
List of Rating Actions
The following ratings have been upgraded with a positive outlook:
Radian Group Inc. -- senior unsecured debt to B3, from Caa1.
Radian Guaranty Inc. -- insurance financial strength rating to
Ba2, from Ba3;
Radian Mortgage Assurance Inc. -- insurance financial strength
rating to Ba2, from Ba3.
Radian Group Inc. is a US-based holding company that owns a
mortgage insurance platform comprised of Radian Guaranty, Radian
Insurance and Radian Mortgage Assurance, and financial guaranty
insurance company Radian Asset (Ba1 IFS rating, negative outlook).
The group also has investments in other financial services
entities. As of March 31, 2014, Radian Group had $5.5 billion in
total assets and $1.1 billion in shareholder's equity.
RADIAN GROUP: S&P Assigns 'B-' Sr. Unsecured Debt Rating
--------------------------------------------------------
Standard & Poor's Ratings Services affirmed all of its ratings on
Radian Group Inc. and its operating subsidiaries. At the same
time, S&P assigned its 'B-' senior unsecured debt rating to the
company's proposed $300 million senior notes. The outlook is
positive.
Radian has announced a plan to issue 15.5 million shares of common
equity and $300 million of senior notes due in 2019. It will use
the combined offering to refinance an existing maturity of $55
million due in 2015, as well as to fund the $305 million purchase
of Clayton Holdings LLC, a loan due diligence and transaction
management firm, for an enterprise value of $305 million. S&P
expects the acquisition to be completed this summer and accretive
to earnings soon thereafter, adding positive free cash flow to the
holding company by year-end 2014. S&P views this transaction as
credit neutral, but realize it favorably diversifies cash-flows,
and in the longer term will add scale to Radian's loan servicing,
due diligence, and risk-management capabilities.
S&P is also affirming its 'BB-' financial strength ratings on
Radian's operating companies, reflecting its view that the group's
operating performance continued to improve with net profitability
in 2014 and 2015, as exhibited by strong first-quarter 2014
earnings of $202.8 million. S&P remains sensitive to potential
adverse developments in Radian's legacy blocks of business;
however, improving notices of default partially addresses this
concern. S&P also recognizes that improvement in the U.S. housing
market and overall economy has led to improved profitability and
capital accretion. But Radian is relatively vulnerable to adverse
reserve development given the size of its legacy block of
business.
The positive outlook reflects S&P's expectation that the company's
operating performance will improve to profitability in 2014 and
beyond, while it maintains its market position. S&P expects
Radian to report full-year 2014 pretax operating income between
$150 million and $200 million and a combined ratio between 90% and
95%, including planned spending on technology-related investments.
S&P also expects Radian to continue to grow its earnings through
2015, earning more than $200 million, assuming no unexpected loss
development or increased claims activity.
RADIENT PHARMACEUTICALS: Insolvent, Plans to Restructure
--------------------------------------------------------
The Board of Directors of Radient Pharmaceuticals Corporation
including Mr. Douglas C. MacLellan and Mr. Michael Christiansen
appointed the following persons to the Company's Board: Mr. Jim
Green, Mr. Darren Brown, Mr. Bill White and Mr. Dennis Charter.
Additionally, the following persons will be appointed to the
following positions:
Mr. Charter CEO
Mr. Green Chairman
Mr. Brown CFO & COO
Immediately following these appointments, Mr. MacLellan resigned
as Chairman and CEO and Mr. Christiansen resigned as the Company's
only other board member. Separately, Mr. Akio Ariura the
Company's previous CFO and COO, resigned from both positions on
April 28, 2014. None of these directors or officers resigned as a
result of a disagreement with the Company.
The Company does not have any formal employment agreements with
any of the new officers or directors at this time.
Mr. Jim Green: Mr. Green began his career as a qualified
Pharmacist. From those humble beginnings he built a chain of
successful branded Pharmacies and Medical Centres (Myers Street
Family Medical Practice Pty Ltd). The Pharmacy chain has since
been sold. Mr. Green has been a property developer and an
investor in various technologies and companies for 45 years. In
2010, he invested in and became the Executive Chairman of Minomic
International Limited (a public unlisted company developing
diagnostic tests for Prostate Cancer). In 2011 he built a
specialist medical facility (Skin Medical Clinic) to diagnose
cancers with a focus on Melanomas and other skin related cancers.
Mr. Green has been involved with Public Companies for more than
thirty years and adds a depth and wealth of experience to any
corporate Board of Directors. With his extensive expertise in
brand building within the Health Care and Point of Care service
industries, Mr. Green has a proven track record of being able to
develop a specialized product and deliver that product
successfully to a mass market.
Mr. Darren Brown: Mr. Brown holds a Degree in Technology (Banking
& Finance), an MBA, and a Masters in Law. Mr. Brown has worked as
a consultant for over 20 years to small cap companies, funds
management, IP management, and online automation solutions. Mr.
Brown brings to the Board of any company a diverse set of
important leadership and management skills, legal knowledge - with
practical day to day application and due diligence, banking,
financial and accounting experience, intellectual property
expertise, business development experience, as well as an ability
to form strong bonds and close relationships with every level of
management and all personnel from every facet and mix of cultures
within an organization. Previous executive positions include:
Senior Strategy Consultant with the accounting firm Hudson &
Young, executive director of eWealthbuild Lending Pty. Ltd., a
business strategy and finance firm, CEO of AMDL Australia Pty. Ltd
the Australian licensed distributor of medical devices and
provider of cancer detection research. CEO Online Holdings
Australia specializing in online automation of finance and tax
businesses, Director KBF Finance Ltd. a debt discounting finance
company and various other private company directorships. Mr.
Brown's breadth of experience enables him to work seamlessly
within various fields of science, business, and academia that make
up large modern biomedical and pharmaceutical corporations.
Mr. Bill White: Mr. White is a graduate BSc (Chem) of Canterbury
University in New Zealand and is an investor and a successful
private business owner with global interests. Mr. White is
currently the Chairman and CEO of White Financial Advisers Pty
Ltd, a privately owned and operated management consultancy,
financial services and investment company established in March,
1984. Before venturing into the world of corporate takeovers and
private investing, Mr. White had many years' experience as a
senior corporate manager in multinational public companies
including Unilever Group, Unigate PLC, General Foods Corporation,
and as the Managing Director of the Australian subsidiary of
Inchcape Group PLC for seven years until 1983. Since 1984, Mr
White has invested in and managed a number of start-up
biotechnology businesses in Australia and China. From 1992 to
2007, Mr. White's financial services business was a licensee to
AMP Ltd, one of the largest public insurance and investment
companies in Australia. Mr. White's area of expertise is
corporate reorganization and business strategies with a focus on
increasing revenue and profitability. This is evidenced by his
'hands on' direct management approach to all businesses that he
acquires or invests in. Because Mr. White is also a Certified
Financial Planner with extensive experience in the financial
industry, this underpins his ethical approach to business and the
high priority he gives to his fiduciary responsibilities and duty
of care not only to the companies he invests in, but just as
importantly, to the people who work for him.
Mr. Dennis Charter: Dennis Charter is an inventor and entrepreneur
with a long history of innovative, revolutionary and transforming
technologies to his credit. Dennis also had a long and
internationally successful music and entertainment industry career
which culminated with the invention and development of the first
ever computer based digital editing systems for music and video.
If you have ever edited or manipulated videos on a computer or
your smartphone, that was Dennis' invention.
"Despite significant financial hardship, the Company continues to
maintain its offices and manufacturing facilities in Tustin,
California, relying on selective former employees that continue to
work as consultants. The Company is currently insolvent and the
new Board of Directors and the new senior management of the
Company have been appointed to attempt to restructure the Company.
There can be no guarantee that any new business or restructuring
transactions will be completed or that they will provide
sufficient capital to carry out the Company's business," the
Company said in the filing.
On April 15, 2014, the Company executed an Offer of Settlement
with the Securities and Exchange Commission pursuant to Section
12(j) of the Securities Exchange Act of 1934, revoking the
registration of the Company's securities.
About Radient Pharmaceuticals
Tustin, Calif.-based Radient Pharmaceuticals Corporation is
engaged in the research, development, manufacturing, sale and
marketing of its Onko-Sure(R) test kit, which is a proprietary in-
vitro diagnostic (or IVD) cancer test. The Company markets its
Onko-Sure(R) test kits in the United States, Canada, Chile,
Europe, India, Korea, Japan, Taiwan, Vietnam and other markets
throughout the world.
In the auditors' report accompanying the consolidated financial
statements for the year ended Dec. 31, 2011, KMJ Corbin & Company
LLP, in Costa Mesa, California, expressed substantial doubt about
Radient's ability to continue as a going concern. The independent
auditors noted that the Company has incurred significant operating
losses, had negative cash flows from operations in 2011 and 2010,
and has a working capital deficit of approximately $49.8 million
at Dec. 31, 2011.
The Company reported a net loss of $86.19 million in 2011,
compared with a net loss of $85.71 million in 2010. The Company's
balance sheet at Dec. 31, 2011, showed $1.18 million in total
assets, $50.87 million in total current liabilities, and a
stockholders' deficit of $49.69 million.
Bankruptcy Warning
"The committee of our three independent directors continues to
assess whether the Company has any other options to remain in
business. Due to the shortage of working capital, we were unable
to pay premiums associated with our Directors and Officers
insurance. As a consequence, on June 25, 2012, we were informed
by two members of our Board of Directors of their resignation. As
a result, we have only one independent Director serving on our
Board at this time. Although our remaining sales team continues
to work towards completing pending and future sales of our Onko-
Sure test kit, if these sales are not completed and we do not
otherwise raise additional funds in the immediate future, it is
likely that we will be forced to cease all operations and might
seek protection from our creditors under the United States
bankruptcy laws," the Company said in its annual report for the
year ended Dec. 31, 2011.
REFCO INC: Ex-Customers Dodge Claims In $263M 2nd Circ. Case
------------------------------------------------------------
Law360 reported that the Second Circuit upheld a hotly contested
ruling by U.S. District Judge Jed Rakoff dismissing claims in a
$263 million suit alleging four former Refco Inc. customers aided
the brokerage firm's fraud by entering into sham loan deals.
According to the report, a three-judge panel ruled that the
plaintiffs -- liquidators for the SPhinX Ltd. family of hedge
funds -- had failed to prove that the defendants knew their "round
trip" loan transactions with Refco had no legitimate business
purpose. Refco collapsed in 2005 amid revelations it had
transferred more than $1 billion in losses to an entity controlled
by then-CEO Phillip Bennett. The SPhinX funds have argued they
lost $263 million after doing business with the brokerage firm.
The decision upheld Judge Rakoff's July 2012 finding in favor of
former Refco customers Liberty Corner Capital Strategies LLC, its
owner William T. Pigott, Ingram Micro Inc., and CIM Ventures Inc.,
the report related.
The appeals court ruled that the SPhinX funds had failed to allege
the defendants knew that Refco was insolvent at the time of the
loans, or that the brokerage firm planned to use the proceeds to
conceal its true financial condition, the report further related.
In addition, the court said, the funds failed to sufficiently
claim that the defendants should have known that the loans were
fraudulent because they took place around the end of Refco's
reporting periods.
The claims "are conclusory because the amended complaint lacks any
allegation that appellees had actual knowledge of certain key
facts ... that could give rise to a reasonable inference of such
knowledge and agreement," the panel wrote, the report added.
About Refco Inc.
Headquartered in New York, Refco Inc. -- http://www.refco.com/--
was a diversified financial services organization with operations
in 14 countries and an extensive global institutional and retail
client base. Refco's worldwide subsidiaries were members of
principal U.S. and international exchanges, and were among the
most active members of futures exchanges in Chicago, New York,
London and Singapore. Refco was also a major broker of cash
market products, including foreign exchange, foreign exchange
options, government securities, domestic and international
equities, emerging market debt, and OTC financial and commodity
products. Refco was one of the largest global clearing firms for
derivatives. The Company had operations in Bermuda.
The Company and 23 of its affiliates filed for Chapter 11
protection on October 17, 2005 (Bankr. S.D.N.Y. Case No.
05-60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate,
Meagher & Flom LLP, represented the Debtors in their restructuring
efforts. Milbank, Tweed, Hadley & McCloy LLP, represented the
Official Committee of Unsecured Creditors. Refco reported
US$16.5 billion in assets and US$16.8 billion in debts to the
Bankruptcy Court on the first day of its Chapter 11 cases.
The Court confirmed the Modified Joint Chapter 11 Plan of
Refco Inc. and certain of its Direct and Indirect Subsidiaries,
including Refco Capital Markets, Ltd., and Refco F/X Associates,
LLC, on December 15, 2006. That Plan became effective on Dec. 26,
2006. Pursuant to the plan, RJM, LLC, was named plan
administrator to reorganized Refco, Inc., and its affiliates, and
Marc S. Kirschner as plan administrator to Refco Capital Markets,
Ltd.
RESIDENTIAL CAPITAL: Unit's Suit v. Cherry Creek Stays in Minn.
---------------------------------------------------------------
Minnesota District Judge Joan N. Ericksen denied the request of
Residential Funding Company, LLC, to transfer the venue of its
complaint against Cherry Creek Mortgage Co., Inc, to the Southern
District of New York.
Residential Funding was engaged in the business of acquiring and
securitizing residential mortgage loans. It acquired loans from
correspondent lenders, such as Cherry Creek, and distributed the
loans by either pooling them with similar loans to sell into
residential mortgage-backed securitization (RMBS) trusts or
selling them to whole loan purchasers. Facing more than two dozen
lawsuits that claimed the loans it had securitized were defective,
Residential Funding filed for bankruptcy in May 2012 in the United
States Bankruptcy Court for the Southern District of New York. In
December 2013, the bankruptcy court approved a settlement of
Residential Funding's RMBS-related liabilities. In the few days
after the settlement's approval, Residential Funding brought 66
actions, including this one, in the United States District Court
for the District of Minnesota. Residential Funding sued Cherry
Creek Mortgage for breach of contract and indemnification.
Cherry Creek Mortgage opposed the Transfer Venue motion.
The Minnesota Court concluded that transfer of the action to the
Southern District of New York would not serve the convenience of
the parties, the convenience of witnesses, or the interest of
justice.
A copy of the Court's April 29, 2014 Order is available at
http://is.gd/nNa2QVfrom Leagle.com.
About Residential Capital
Residential Capital LLC, the unprofitable mortgage subsidiary of
Ally Financial Inc., filed for bankruptcy protection (Bankr.
S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012.
Neither Ally Financial nor Ally Bank is included in the bankruptcy
filings.
ResCap, one of the country's largest mortgage originators and
servicers, was sent to Chapter 11 with 50 subsidiaries amid
"continuing industry challenges, rising litigation costs and
claims, and regulatory uncertainty," according to a company
statement.
ResCap disclosed $15.68 billion in assets and $15.28 billion in
liabilities at March 31, 2012.
Centerview Partners LLC and FTI Consulting are acting as financial
advisers to ResCap. Morrison & Foerster LLP is acting as legal
adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is
the conflicts counsel. Rubenstein Associates, Inc., is the public
relations consultants to the Company in the Chapter 11 case.
Morrison Cohen LLP is advising ResCap's independent directors.
Kurtzman Carson Consultants LLP is the claims and notice agent.
Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves
as counsel to Ally Financial.
ResCap sold most of the businesses for a combined $4.5 billion.
The Bankruptcy Court in November 2012 approved ResCap's sale of
its mortgage servicing and origination platform assets to Ocwen
Loan Servicing, LLC and Walter Investment Management Corporation
for $3 billion; and its portfolio of roughly 50,000 whole loans to
Berkshire Hathaway for $1.5 billion.
Judge Martin Glenn in December 2013 confirmed the Joint Chapter 11
Plan co-proposed by Residential Capital and the Official Committee
of Unsecured Creditors. The Plan became effective on Dec. 17,
2013.
PRESIDENTIAL REALTY: Posts $2.5 Million Net Income in 2013
----------------------------------------------------------
Presidential Realty Corporation filed with the U.S. Securities and
Exchange Commission its annual report on Form 10-K disclosing net
income of $2.47 million on $846,878 of total revenues for the year
ended Dec. 31, 2013, as compared with a net loss of $2.33 million
on $779,547 of total revenues in 2012.
As of Dec. 31, 2013, the Company had $1.42 million in total
assets, $2.25 million in total liabilities and a $830,322 total
deficit.
Baker Tilly Virchow Krause, LLP, in Melville, New York, issued a
"going concern" qualification on the consolidated financial
statements for the year ended Dec. 31, 2013. The independent
auditors noted that the Company has suffered recurring losses from
operations and has a working capital deficiency. These factors
raise substantial doubt about its ability to continue as a going
concern.
A copy of the Form 10-K is available for free at:
http://is.gd/lbj58A
About Presidential Realty
Headquartered in White Plains, New York, Presidential Realty
Corporation, a real estate investment trust, is engaged
principally in the ownership of income-producing real estate and
in the holding of notes and mortgages secured by real estate or
interests in real estate. On Jan. 20, 2011, Presidential
stockholders approved a plan of liquidation, which provides for
the sale of all of the Company's assets over time and the
distribution of the net proceeds of sale to the stockholders after
satisfaction of the Company's liabilities.
Presidential Realty incurred a net loss of $2.33 million in 2012
following a net loss of $6.16 million in 2011. The Company's
balance sheet at Sept. 30, 2013, showed $1.58 million in total
assets, $1.92 million in total liabilities and a $339,314 total
deficit.
Holtz, Rubenstein Reminick LLP, in Melville, New York, issued a
"going concern" qualification on the consolidated financial
statements for the year ended Dec. 31, 2012. The independent
auditors noted that the Company has suffered recurring losses from
operations and has a working capital deficiency. These conditions
raise substantial doubt about its ability to continue as a going
concern.
RESTORGENEX CORP: Goldman Kurland Raises Going Concern Doubt
------------------------------------------------------------
RestorGenex Corporation reported a net loss of $2.46 million on
$71,667 of revenues in 2013, compared with a net loss of $6.85
million on $374,542 of revenues in 2012.
Goldman Kurland and Mohidin LLP expressed substantial doubt about
the Company's ability to continue as a going concern, citing that
the Company has suffered recurring losses and has negative cash
flow from operations.
The Company's balance sheet at Dec. 31, 2013, showed $18.34
million in total assets, $11.88 million in total liabilities and
stockholders' equity of $6.46 million.
A copy of the Form 10-K, as amended on April 23, 2014, that was
filed with the U.S. Securities and Exchange Commission is
available at: http://is.gd/2XqsUy
Late Form 10-K
RestorGenex previously filed with the SEC a Notification of Late
Filing on Form 12b-25 with respect to its annual report on Form
10-K for the year ended Dec. 31, 2013. The Company said it
requires additional time to complete the financial statements for
the year ended Dec. 31, 2013, and cannot, without unreasonable
effort and expense, file its Form 10-K on or before the prescribed
filing date.
About Restorgenex
RestorGenex, formerly known as Stratus Media, is a
biopharmaceutical company with an initial focus on dermatology,
ocular diseases and women's health.
As reported by the TCR on Dec. 2, 2013, Stratus Media completed
its merger with Canterbury Acquisition LLC and Hygeia
Therapeutics, Inc. Effective Nov. 18, 2013, Canterbury and Hygeia
became wholly owned subsidiaries of the
Company.
Stratus Media disclosed a net loss of $6.84 million on $374,542 of
total revenues for the year ended Dec. 31, 2012, as compared with
a net loss of $23.63 million on $570,476 of total revenues for the
year ended Dec. 31, 2011. The Company's balance sheet at
Sept. 30, 2013, showed $3.23 million in total assets, $9.57
million in total liabilities, all current, and a $6.33 million
total shareholders' deficit.
Goldman Kurland and Mohidin LLP, in Encino, California, issued a
"going concern" qualification on the consolidated financial
statements for the year ended Dec. 31, 2012. The independent
auditors noted that Stratus Media has suffered recurring losses
and has negative cash flow from operations which conditions raise
substantial doubt as to the ability of the Company to continue as
a going concern.
REYES DRYWALL: Bankruptcy Stays Bay Area Painters' Suit
-------------------------------------------------------
BAY AREA PAINTERS AND TAPERS PENSION TRUST FUND, et al.,
Plaintiffs, v. REYES DRYWALL, INC. and DOES 1-10, inclusive;
Defendant, Case No. C13-1752 EMC (N.D. Calif.), is stayed
following the Chapter 11 bankruptcy filing of Reyes Drywall,
District Judge Edward M. Chen held in a May 5 ruling available at
http://is.gd/njxzt8from Leagle.com.
Attorneys for Plaintiffs are:
Michele R. Stafford, Esq.
Shivani Nanda, Esq.
SALTZMAN & JOHNSON LAW CORPORATION
44 Montgomery Street, Suite 2110
San Francisco, CA 94104
Telephone: (415) 882-7900
Facsimile: (415) 882-9287
E-mail: mstafford@sjlawcorp.com
snanda@sjlawcorp.com
Reyes Drywall Inc. filed a Chapter 11 bankruptcy petition (Bankr.
E.D. Calif. Case No. 14-90538) in Modesto, on April 14, 2014.
RITE AID: Profit Falls 55% Despite Continued Sales Growth
---------------------------------------------------------
Tess Stynes, writing for The Wall Street Journal, reported that
Rite Aid Corp. said its fiscal fourth-quarter earnings fell 55%,
despite continued revenue growth, owing to impacts of one-time
items such as inventory-accounting adjustments and debt-
extinguishment charges.
For the new fiscal year, the company forecast per-share earnings
of 31 cents to 42 cents and revenue of $26 billion to $26.5
billion, according to the report. Analysts polled by Thomson
Reuters expected per-share profit of 35 cents and revenue of
$25.75 billion.
Rite Aid also said it acquired regional retail-clinic operator
RediClinic, the report related. The provider of treatment for
common conditions and preventative services has 30 clinics in the
Houston, Austin and San Antonio areas. Rite Aid said it plans to
open new RediClinics in some of its markets, as well as support
RediClinic's expansion in Texas.
The company also recently acquired Health Dialog Services Corp.,
adding a provider of health coaching, analystics and other
services, the report further related.
The acquisitions come as the broader pharmacy and drugstore sector
has been expanding offerings in the health and wellness space, the
report added.
* * *
The Troubled Company Reporter, on April 21, 2014, reported that
Fitch Ratings has upgraded its ratings on Rite Aid Corporation
(Rite Aid), including its Issuer Default Rating (IDR) to 'B' from
'B-'. The Rating Outlook is Stable.
S&R GRANDVIEW: Chapter 11 Case Dismissal Affirmed
-------------------------------------------------
District Judge Terrence W. Boyle in Wilmington, North Carolina,
affirmed the dismissal of S&R Grandview LLC's Chapter 11 petition.
The District Judge rejected S&R Grandview's appeal of the
Bankruptcy Court's dismissal order dated Oct. 4, 2013, and granted
First Bank's motion to dismiss the appeal. The Bankruptcy Court
order found that Donald J. Rhine is not authorized under the terms
of the Debtor's operating agreement or under North Carolina law to
file a petition on the Debtor's behalf. A copy of the District
Court's May 1, 2014 Order is available at http://is.gd/eTapgRfrom
Leagle.com.
S & R Grandview appeared pro se on its appeal.
Appellee Maxine Ganer is represented by:
Joseph P. Gram, Esq.
CONNER GWYN SCHENCK PLLC
306 East Market Street, Suite One
Greensboro, NC 27401
P.O. Box 20744, Greensboro, NC 27420
Tel: (336) 691-9222
Fax: (336) 691-9259
E-mail: jgram@cgspllc.com
Appellee First Bank is represented by:
Brian Richard Anderson, Esq.
Catherine Bethea Lane, Esq.
NEXSEN PRUET, PLLC
701 Green Valley Road, Suite 100
Greensboro, NC, 27408
Tel: 336-373-1600
Fax: 336-273-5357
E-mail: banderson@nexsenpruet.com
clane@nexsenpruet.com
S&R GrandView, LLC, was organized in August 2005 for the purposes
of investing, owning, holding, developing, and/or selling real
estate. Based in Wrightsville Beach, North Carolina, S&R
GrandView filed for Chapter 11 bankruptcy (Bankr. E.D.N.C. Case
No. 13-03098) on May 13, 2013. Judge Randy D. Doub presided over
the case. Dean R. Davis, Esq., at the Law Office Of Dean R.
Davis, served as the Debtor's counsel. In its petition, S&R
GrandView estimated $500,001 to $1 million in assets, and $1
million to $10 million in debts. A list of the Company's 20
largest unsecured creditors filed with the petition is available
for free at http://bankrupt.com/misc/nceb13-03098.pdf The
petition was signed by Donald J. Rhine, manager.
SAN YSIDRO: Fitch Affirms 'BB+' Rating to $82MM GO Bonds
--------------------------------------------------------
Fitch Ratings takes the following rating actions on San Ysidro
School District, California (the district):
-- $82 million election of 1997 general obligation (GO) bonds
series D, E and F affirmed at 'BB+';
-- $29.1 million certificates of participation (COPs) series 2001,
2005, and 2007 affirmed at 'BB-'.
The bonds and COPs are removed from Rating Watch Negative and
assigned a Negative Outlook.
SECURITY
The GO bonds are general obligations of the district, payable
solely from the proceeds of ad valorem taxes, without limitation
as to rate or amount. The COPs are limited obligations secured by
the district's covenant to budget and appropriate lease rental
payments for the use of certain district properties, subject to
abatement.
Key Rating Drivers
STATE TAKEOVER DEFERRED: Increased state revenues in fiscal 2014
have helped the district to avoid an immediate cash shortfall and
defer its need for an emergency loan and state takeover.
Management now projects to deplete its cash balances in April
2015, which Fitch considers plausible based on current expenditure
patterns and available reserves. The change in status from Rating
Watch Negative to Negative Outlook reflects the longer time period
before which the district is expected to deplete its cash
balances.
LABOR IMPASSE LIMITS OPTIONS: The district has been unable to
negotiate cuts with its labor unions sufficient to balance its
budget, and is restricted from imposing cuts prior to the receipt
of a fact-finding report due in mid-May. A state takeover appears
inevitable if significant labor cost reductions cannot be
achieved.
COPs RATING LOWER: The lower rating for the district's COPs
reflects the reduced availability of resources for payment of
appropriations debt as a result of the district's current
financial strains.
MIXED ECONOMIC CHARACTERISTICS: The district participates in the
broad and diverse San Diego regional economy, which has seen
sustained employment growth in recent years. However, district
home values and income levels remain well below citywide and state
averages.
WEAK DEBT POSITION: Overall debt levels are high and amortization
of direct debt is slow, while pension costs are likely to rise.
An emergency loan from the state would further weaken the
district's debt profile.
Rating Sensitivities
LOAN REQUIRED: An inability to secure a state loan, or failure to
make expenditure reductions sufficient to restore operating
balance, would likely result in a cash shortfall and further
downgrades.
Credit Profile
The San Ysidro School District is located primarily within the
southeastern portion of the city of San Diego, adjacent to the
international border with Mexico, and includes 42,000 residents
within 29 square miles. The district serves approximately 5,100
students from pre-school through eighth grade.
State Takeover Deferred
The district was previously expected to be provided a loan and
taken over by the state in May 2014 due to a long-term structural
imbalance that has reduced cash balances to very low levels.
Higher than budgeted revenues, resulting from increases under the
state's Local Control Funding Formula (LCFF), boosted district
cash levels in fiscal 2014 and management has revised their
expected date of a loan and state takeover to April 2015. This
projection assumes that the district will maintain current
expenditure levels and make no further cuts, an outcome which
remains uncertain.
The district's finances have deteriorated due to a growing gap
between general fund expenditures and revenues over several
consecutive years. Unrestricted fund balance appears likely to
turn negative by the end of fiscal 2014 as compared to a positive
16.5% of general fund spending as recently as fiscal 2011.
Despite increased revenues due to LCFF, management projects
ongoing deficits in fiscals 2015 and 2016 based on current
expenditure patterns, which would reduce fund balances still
further.
Labor Impasse Limits Options
The district has very limited ability to raise revenues and has
been unable to reduce expenditures materially. Labor costs
account for nearly 80% of district spending, but management has
negotiated few concessions in recent years and the district's
board has refrained from teacher layoffs or other unilateral
actions to reduce spending. The district's most recent offer to
teachers was for an 8% pay reduction, while the teachers sought an
6% increase. Teachers have since reduced their demands to a 1%
increase but the two sides remain far apart and impasse was
declared earlier this year.
No cuts may be imposed by the district's board prior to the
receipt of a fact-finding report that is due in mid-May. The
district's willingness to impose new cuts remains unclear,
particularly in light of its inability to achieve concessions in
previous negotiations. If the district is unable to reduce
expenditure significantly it will remain on the path to a state
takeover in fiscal 2015.
As provided for under California's AB1200, an emergency state loan
would be accompanied by state takeover and the appointment of a
state administrator. Fitch acknowledges the stabilizing impact of
AB1200, which has been utilized in nine California school
districts since 1991, but does not presume such support will be
available before an emergency loan is granted. Fitch is unaware
of any circumstances in which state support has been withheld, but
the Negative Outlook reflects the risk that a state loan and
takeover, if needed, might not be completed in a timely manner.
Legislative approval is required to provide the loan.
COPs RATING LOWER
The two-notch distinction between the COPs and GOs results from
the district's heightened financial risks and reduced flexibility.
Fitch typically maintains a one-notch distinction between GO and
appropriation debt for higher-rated credits, but this distinction
can increase at lower rating levels. The lower rating for the
district's appropriation debt reflects the reduced availability of
general fund resources pledged towards repayment of these
obligations.
Mixed Economic Results
The district is part of the broad and diverse San Diego regional
economy, which has seen sustained employment growth in recent
years. San Diego's unemployment rate fell to 6.4% in December
2014, just below the national rate of 6.5% and substantially lower
than the state's 7.9% rate. Large employment gains over the past
four years have contributed to these results and current
employment levels exceed pre-recession peaks.
District-level employment statistics are not available but census
data portray a relatively impoverished area within this generally
wealthy region. Household income levels for the district are
approximately three-fourths of regional averages and poverty rates
are notably higher.
The district's tax base retained much of its value during the
recent downturn, but experienced a 5.7% decline in taxable
assessed value (TAV) for fiscal 2013 and a 0.1% decline for fiscal
2014. San Ysidro area home values, as reported by Zillow.com,
increased by 15.7% year-over-year as of March 2014, suggesting
good prospects for renewed TAV growth in future years.
Weak Debt Position
Overall debt levels for the district are very high at 7% of TAV
and $7,256 per capita. Amortization of direct debt is very slow
with only 10% of outstanding principal and accreted interest
retired in 10 years. An expected state loan is likely to weaken
such metrics further. Capital needs are limited apart from the
planned construction of a new elementary school, which the
district intends to fund from $48 million in remaining GO and COP
proceeds.
The district participates in two state-sponsored employee pension
plans and is likely to face ongoing increases in contribution
rates to address current low funding levels. Funding for CalSTRS
is a particular concern, as current contribution rates are
substantially below the level required to amortize existing
obligations. Carrying costs for debt service and retirement
benefits are moderate but appear likely to rise due to escalating
debt service and proposed pension rate increases.
SARKIS INVESTMENTS: MSCI Says Plan Unconfirmable
------------------------------------------------
Secured Creditor MSCI 2007-IQ13 Ontario Retail Limited Partnership
opposes debtor Sarkis Investments Company, LLC's disclosure
statement in support of its First Amended Plan of Reorganization.
Geoffrey A. Heaton, Esq., of Duane Morris LLP, representing MSCI
2007-IQ13, tells the Court that the Debtor's proposed plan and
disclosure statement are a "veritable cornucopia" of Bankruptcy
Code violations.
He notes that, among many other things, the Plan seeks to:
(1) eliminate the default interest and prepayment premium from
Secured Creditor's claim through a supposed "cure" that
actually alters several key provisions of the loan agreement
(wholly at odds with the concept of cure embodied in the
Ninth Circuit's Entz-White decision),
(2) strip away Secured Creditor's lien from cash collateral
without providing it the "indubitable equivalent" of its
secured claim, and
(3) blatantly gerrymander classes so as to manufacture a
consenting impaired class.
Mr. Heaton states that the Disclosure Statement cannot be approved
because the proposed plan it describes is unconfirmable on its
face. He explains that in particular, the Plan is not feasible,
cannot cram down Secured Creditor's claim (secured claim or
unsecured deficiency), and cannot achieve a consenting impaired
class after accounting for the plan's improper classifications of
unclassifiable tax claims and gerrymandered classes of unsecured
claims. He adds that the Disclosure Statement glaringly omits key
information necessary to evaluate the plan, including how the
Debtor intends to investigate and prosecute potential claims
against its manager, Pamela Muir (a topic which presents an
obvious conflict of interest), or who would manage the Property
after the Receiver is removed.
Debtor Replies to Objection
Sarkis Investments has responded to the objection.
The Debtor argues that the Plan does not violate the bankruptcy
code and, more importantly, is not patently unconfirmable.
Rather, MSCI simply dislikes its treatment because the Plan
prevents MSCI from capitalizing on the default caused by Patrick
Galentine (the state court receiver put in place by MSCI) by,
among other things, foreclosing on the Properties, and receiving
default interest and an inequitable forfeiture penalty disguised
as a prepayment penalty. Accordingly, the Debtor requests that
the Court approve the Disclosure Statement.
The Plan proposes two alternate treatments -- the Primary Plan
Treatment and Alternate Plan Treatment. The Primary Plan
Treatment controls unless the Court determines that the Debtor
cannot cure without reinstating the loan. If the Alternate Plan
Treatment is implemented, the Debtor will perform under the loan
agreements up and until the maturity date of the loan and, at that
time, pay the unpaid portion of MSCI's allowed claim.
U.S. Trustee Also Objected
The United States Trustee also filed an objection, stating that
the Disclosure Statement does not contain "adequate information"
upon which parties in interest will be able to make an informed
judgment about the Plan.
About Sarkis Investments Company, LLC
Sarkis Investments Company, LLC, filed a Chapter 11 petition
(Bankr. C.D. Cal. Case No. 13-29180) on July 29, 2013. Sarkis
owns and leases several parcels of commercial real property in
Ontario, California: 3550 Porsche Way; 3640 Porsche Way; 3660
Porsche Way; 3700 Inland Empire Blvd; and 3760 Inland Empire Blvd.
Judge Robert Kwan presides over the case. Pamela Muir signed the
petition as manager. The Debtor estimated assets and debts of at
least $10 million. Ashley M. McDow, Esq., at Baker & Hostetler,
LLP, serves as the Debtor's counsel.
Patrick Galentine was appointed by a state court as receiver for
the Debtor's assets. The receiver is represented by Reed Waddell,
Esq., at Frandzel Robins Bloom & Csato, LC.
MSCI 2007-IQ13 Ontario Retail Limited Partnership, which initiated
the receivership proceedings against Sarkis in state court, is
represented by Ron Oliner, Esq., at Duane Morris LLP.
According the Amended Disclosure Statement filed on March 5,
2014, the Debtors seeks to accomplish payments under the plan by
paying creditors on account of their allowed claims in full over
time from cash flows generated from future operations or the
proceeds from the sale of the Company or the properties.
SARKIS INVESTMENTS: Files Second Amended Disclosure Statement
-------------------------------------------------------------
Sarkis Investments Company, LLC, filed last month a black-lined
copy of its disclosure statement in support of its Second Amended
Reorganization Plan.
The Plan contemplates that the Reorganized Debtor will initially
continue operating its business, and will use revenues generated
from such operation to fund the payments required under the Plan.
Simultaneously, the Debtor will market the properties and may sell
the properties to pay all allowed claims in full.
Under the Plan, the Debtor intends to repay allowed claims over a
term of 10 years. A portion of the allowed claims may be paid
through take-out financing, refinancing of the properties and/or
sale of the properties. The Plan provides for payment of 100% of
the allowed claims with interest at the legal, market or
applicable rate, as appropriate.
A copy of the Second Amended Disclosure Statement is available for
free at http://is.gd/PIphBb
About Sarkis Investments Company, LLC
Sarkis Investments Company, LLC, filed a Chapter 11 petition
(Bankr. C.D. Cal. Case No. 13-29180) on July 29, 2013. Sarkis
owns and leases several parcels of commercial real property in
Ontario, California: 3550 Porsche Way; 3640 Porsche Way; 3660
Porsche Way; 3700 Inland Empire Blvd; and 3760 Inland Empire Blvd.
Judge Robert Kwan presides over the case. Pamela Muir signed the
petition as manager. The Debtor estimated assets and debts of at
least $10 million. Ashley M. McDow, Esq., at Baker & Hostetler,
LLP, serves as the Debtor's counsel.
Patrick Galentine was appointed by a state court as receiver for
the Debtor's assets. The receiver is represented by Reed Waddell,
Esq., at Frandzel Robins Bloom & Csato, LC.
MSCI 2007-IQ13 Ontario Retail Limited Partnership, which initiated
the receivership proceedings against Sarkis in state court, is
represented by Ron Oliner, Esq., at Duane Morris LLP.
According the Amended Disclosure Statement filed on March 5,
2014, the Debtors seeks to accomplish payments under the plan by
paying creditors on account of their allowed claims in full over
time from cash flows generated from future operations or the
proceeds from the sale of the Company or the properties.
SCH-TRIDENT: Dallas Shopping Center Owner Files for Chapter 11
--------------------------------------------------------------
SCH-Trident, Ltd., operator of a shopping center located on Harry
Hines Blvd. in Dallas, Texas, filed a Chapter 11 bankruptcy
petition (Bankr. N.D. Tex. Case No. 14-32277) in Dallas on May 6,
2014.
The Debtor estimated $10 million to $50 million in assets and
liabilities. The secured creditors are Plains Capital Bank, His
Highness Corporation, AZA Investments, LLC and 7636 Harwin LLC.
The case is assigned to Judge Harlin DeWayne Hale.
The Debtor is represented by Joyce W. Lindauer, Esq., in Dallas.
For its legal services, the attorney has agreed to accept $25,000,
with the $15,000 already paid by the Debtor.
According to a deficiency notice, the Debtor is required to submit
its schedules of assets and liabilities and statement of financial
affairs by May 20, and its list of 20 largest unsecured creditors
by May 8, 2014.
SCH-TRIDENT: Proposes to Use Cash Collateral
--------------------------------------------
SCH-Trident, Ltd., asks the bankruptcy court for approval to use
cash collateral of prepetition secured creditors Plains Capital
Bank, His Highness Corporation, AZA Investments, LLC and 7636
Harwin LLC.
Plains Capital, et al., assert liens on the Debtor's personal
property including rental income from the Debtor's shopping center
located on Harry Hines Blvd. in Dallas, Texas. The Debtor will
adequately protect the interests of the secured lenders by
providing the secured lenders with postpetition liens, a priority
claim in the Chapter 11 bankruptcy case, and cash flow payments.
The cash collateral will be used to continue the Debtor's ongoing
operations. The Debtor operates. The proposed budget permits the
payment of ongoing operating expenses of the Debtor in order to
allow the Debtor to maintain its operations in Chapter 11:
SCH-TRIDENT, LTD.
ONE-MONTH BUDGET
AVERAGE INCOME $75,000.00
EXPENSES
Advertising $250.00
Alarm System Monitoring $120.00
Attorney Fees $1,500.00
Bank Fees $300.00
Bookkeeping $350.00
Contract Labor $1,500.00
Insurance $1,600.00
Landscape $700.00
Office Supplies $150.00
Payroll $2,000.00
Postage $20.00
Repairs $2,000.00
UTILITIES
Water $3,000.00
Electricity $1,000.00
Trash Dumpster $360.00
TOTAL EXPENSES $14,850.00
----------
NET CASH $60,150.00
About SCH-Trident
SCH-Trident, Ltd., operator of a shopping center located on Harry
Hines Blvd. in Dallas, Texas, filed a Chapter 11 bankruptcy
petition (Bankr. N.D. Tex. Case No. 14-32277) in Dallas on May 6,
2014.
The Debtor estimated $10 million to $50 million in assets and
liabilities.
The case is assigned to Judge Harlin DeWayne Hale.
The Debtor is represented by Joyce W. Lindauer, Esq., in Dallas.
For its legal services, the attorney has agreed to accept $25,000,
with the $15,000 already paid by the Debtor.
According to a deficiency notice, the Debtor is required to submit
its schedules of assets and liabilities and statement of financial
affairs by May 20, and its list of 20 largest unsecured creditors
by May 8, 2014.
SCH-TRIDENT LTD: Voluntary Chapter 11 Case Summary
--------------------------------------------------
Debtor: SCH-Trident, Ltd.
11528 Harry Hines, Suite A101
Dallas, TX 75229
Case No.: 14-32277
Type of Business: Operator of a shopping center located at Harry
Hines Blvd. in Dallas, Texas.
Chapter 11 Petition Date: May 6, 2014
Court: United States Bankruptcy Court
Northern District of Texas (Dallas)
Judge: Hon. Harlin DeWayne Hale
Debtor's Counsel: Joyce W. Lindauer, Esq.
JOYCE W. LINDAUER, ATTORNEY AT LAW
8140 Walnut Hill Ln. Ste. 301
Dallas, TX 75231
Tel: (972) 503-4033
Fax: (972) 503-4034
Email: joyce@joycelindauer.com
Estimated Assets: $10 million to $50 million
Estimated Debts: $10 million to $50 million
The petition was signed by Rajinder Singh, manager of SCH-Trident,
G.P.
The Debtor did not file a list of its largest unsecured creditors
when it filed the petition.
SEANERGY MARITIME: Regains Compliance with Nasdaq Requirements
--------------------------------------------------------------
Seanergy Maritime Holdings Corp. received a letter notifying the
Company that it has regained compliance with the continued listing
requirements of the Nasdaq Capital Market.
In a decision dated Jan. 9, 2014, the Nasdaq Hearings Panel had
granted the Company's request for continued listing through
April 28, 2014, subject to certain conditions, including that the
Company regain compliance with the minimum shareholders' equity
requirement. The letter announced May 6, 2014, noted that the
Nasdaq Hearings Panel is now closing this matter, as the Company
has regained compliance with the minimum shareholders' equity
requirement and all other requirements for continued listing on
the Nasdaq Capital Market.
Stamatis Tsantanis, the Company's Chairman and chief executive
officer, stated: "We are pleased to announce the successful
resolution of this matter and the continued listing of the
Company's shares on the Nasdaq Capital Market. Following this
positive development, we are now focused on implementing our
business plan for the Company's growth."
About Seanergy
Athens, Greece-based Seanergy Maritime Holdings Corp. is an
international company providing worldwide seaborne transportation
of dry bulk commodities. The Company owns and operates a fleet
of seven dry bulk vessels that consists of three Handysize, two
Supramax and two Panamax vessels. Its fleet carries a variety of
dry bulk commodities, including coal, iron ore, and grains, as
well as bauxite, phosphate, fertilizer and steel products.
Ernst & Young (Hellas) Certified Auditors Accountants S.A., in
Athens, Greece, issued a "going concern" qualification on the
consolidated financial statements for the year ended Dec. 31,
2013. The independent auditors noted that the Company, as of
December 31, 2013 continued to be in breach of certain terms and
covenants of the loan facility with its remaining lender, and had
a working capital deficit and an accumulated deficit. Following
the disposal of its entire fleet subsequent to December 31, 2013
in the context of its restructuring plan, the Company is unable to
generate sufficient cash flow to meet its obligations and sustain
its continuing operations. These conditions raise substantial
doubt about the Company's ability to continue as a going concern.
Seanergy Maritime reported net income of $10.90 million on $23.07
million of net vessel revenue for the year ended Dec. 31, 2013, as
compared with a net loss of $193.76 million on $55.61 million of
net vessel revenue for the year ended Dec. 31, 2012. As of
Dec. 31, 2013, the Company had $66.35 million in total assets,
$157.04 million in total liabilities and a $90.69 million total
shareholders' deficit.
SEVEN COUNTIES: Has Seventh Interim Order to Use Cash Collateral
----------------------------------------------------------------
As of March 2014, Seven Counties Services Inc., has obtained seven
interim orders to use cash collateral of Fifth Third Bank.
The Debtor has authorization an interim basis through the 14th
calendar days following entry by the Court of any final judgment
entered in Adversary Proceeding Number 13-03019.
A copy of the Seventh Interim Order is available for free at:
http://is.gd/hwbFV8
About Seven Counties
Seven Counties Services Inc., a not-for-profit behavioral
services provider from Louisville, Kentucky, filed for Chapter 11
protection (Bankr. W.D. Ky. Case No. 13-31442) on April 4, 2013.
The agency generates more than $100 million a year in revenue and
employs a staff of 1,400 providing services at 21 locations and
120 schools and community centers.
The petition was signed by Anthony M. Zipple as president/CEO.
The Debtor scheduled assets of $45,603,716 and scheduled
liabilities of $232,598,880. Seiller Waterman LLC serves as the
Debtor's counsel. Judge Joan A. Lloyd presides over the case.
Bingham Greenebaum Doll LLP and Wyatt, Tarrant & Combs LLP have
been retained by the Debtor as special counsel. Hall, Render,
Killian, Heath & Lyman, PLLC, is special counsel to represent and
advise it in the implementation of its new software system.
Peritus Public Relations, LLC, has been tapped to provide public
relations and public affairs support in Kentucky.
SHEARER'S FOODS: Moody's Places B2 CFR on Review for Downgrade
--------------------------------------------------------------
Moody's Investors Service placed Shearer's Foods, LLC's B2
Corporate Family, B2-PD Probability of Default and B3 Senior
Secured ratings under review for downgrade. The review follows the
announcement that the company will acquire the Lance Private
Brands private label business including two manufacturing
facilities from Snyder's-Lance, Inc. (unrated) for $430 million.
Moody's expects that the acquisition will be financed with debt.
The review will focus on the company's capital structure,
integration risks, customer base and resulting financial leverage
following the acquisition.
Headquartered in Massillon, Ohio, Chip Holdings, Inc. through its
operating subsidiary Shearer's Foods, Inc. produces, markets and
distributes high quality, co-pack, private label and branded snack
food products such as kettle chips, tortilla chips, potato chips,
rice crisps, pretzels, ready-to-eat popcorn and extruded cheese
snacks. The company generated net sales of approximately $509
million for the last twelve months ending December 2013. Shearer's
is majority owned by Wind Point Partners and Ontario Teachers'
Pension Plan Board, which acquired the company from Mistral Equity
Partners for approximately $358 million in 2012.
SHEARER'S FOODS: S&P Puts 'B' CCR on CreditWatch Negative
---------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings, including
its 'B' corporate credit rating, on Massillon, Ohio-based
Shearer's Foods LLC on CreditWatch with negative implications,
meaning that S&P could lower or affirm the ratings following the
completion of its review.
Shearer's CreditWatch negative listing follows the company's
announcement that it will be acquiring the private-label cookies
and snacks business from Snyder's-Lance Inc. for about $430
million.
"We believe that the planned acquisition will provide Shearer's
with increased scale and diversity, though it will meaningfully
increase Shearer's debt obligations and may weaken credit
protection measures," said Standard & Poor's credit analyst Bea
Chiem.
S&P estimates that Shearer's currently has roughly $295 million in
reported debt outstanding. Including S&P's adjustments for
preferred stock and operating leases, it estimates adjusted debt
outstanding is roughly $509 million.
SOLAR POWER: Enters Into $21.75-Million Purchase Agreement
----------------------------------------------------------
SPI Solar (Solar Power, Inc.) has entered into a definitive
purchase agreement for the sale of $21.75 million of common stock
in a private placement. When received, the company intends to use
the net proceeds from the sale of the shares for working capital
purposes and to pay down debt, while improving its operational
flexibility.
"We are very pleased by the commitment demonstrated by these
investors in this private placement," said Min Xiahou, global
chief executive officer. "We intend to use the proceeds from the
private placement to enable SPI Solar to improve its financial
condition and continue to build upon the recent and demonstrated
progress we've made in moving forward on projects while exploring
solar business opportunities."
Under the terms of the purchase agreement executed on April 30,
2014, SPI Solar has agreed to sell an aggregate 135,937,500 shares
of common stock at a price of $0.16 per share. The shares are
being offered and sold solely to non-.U.S. investors on a private
placement basis.
The purchase agreement contains customary representations and
warranties and covenants of SPI Solar and is subject to the
satisfaction of customary closing conditions. SPI Solar
anticipates that the sale of the shares will close within three
months of the date of the agreement, subject to the satisfaction
or waiver of the closing conditions. Further, SPI Solar must
amend its Articles of Incorporation to increase its number of
authorized shares of common stock in order to complete the
transaction. In addition, the shares of common stock are
restricted securities and purchasers are also subject to a lock-up
provision, which prevents any transfer, sale or disposition of
shares purchased prior to a date that is three months after the
closing date.
About Solar Power
Roseville, Cal.-based Solar Power, Inc., is a global solar
energy facility ("SEF") developer offering its own brand of high-
quality, low-cost distributed generation and utility-scale SEF
development services. Primarily, the Company works directly with
and for developers around the world who hold large portfolios of
SEF projects for whom it serves as an engineering, procurement and
construction contractor. The Company also performs as an
independent, turnkey SEF developer for one-off distributed
generation and utility-scale SEFs.
Solar Power reported a net loss of $32.24 million on $42.62
million of total net sales for the year ended Dec. 31, 2013, as
compared with a net loss of $25.42 million on $99.95 million of
total net sales in 2012.
Crowe Horwath LLP, in San Francisco, California, issued a "going
concern" qualification on the consolidated financial statements
for the year ended Dec. 31, 2013. The independent auditors noted
that the Company has incurred a current year net loss of $32.2
million, has an accumulated deficit of $56.1 million, has
experienced a significant reduction in working capital, has past
due related party accounts payable and a debt facility under which
a bank has declared amounts immediately due and payable.
Additionally, the Company's parent company LDK Solar Co., Ltd has
experienced significant financial difficulties including the
filing of a winding up petition on Feb. 24, 2014. These matters
raise substantial doubt about the Company's ability to continue as
a going concern.
SPEEDIMISSIONS INC: Incurs $814K Net Loss in 2013
-------------------------------------------------
Speedemissions, Inc., filed with the U.S. Securities and Exchange
Commission its annual report on Form 10-K disclosing a net loss of
$814,482 on $7.09 million of revenue for the year ended Dec. 31,
2013, as compared with a net loss of $656,037 on $7.75 million of
revenue in 2012.
As of Dec. 31, 2013, the Company had $2.74 million in total
assets, $2.61 million in total liabilities, $4.57 million in
series A convertible preferred stock, and a $4.44 million total
shareholders' deficit.
Porter Keadle Moore, LLC, in Atlanta, Georgia, issued a "going
concern" qualification on the consolidated financial statements
for the year ended Dec. 31, 2013. The independent auditors noted
that the Company has suffered recurring losses from operations and
has a capital deficiency that raises substantial doubt about its
ability to continue as a going concern.
A copy of the Form 10-K is available for free at:
http://is.gd/VubBFO
About Speedemissions
Tyrone, Georgia-based Speedemissions, Inc., is a test-only
emissions testing and safety inspection company.
As reported by the TCR on Oct. 17, 2013, Habif, Arogeti & Wynne,
LLP, resigned as the independent registered public accounting firm
for Speedemissions, Inc. The reports of HA&W on the Company's
financial statements as of and for the fiscal years ended Dec. 31,
2012, and 2011 contained no adverse opinion or disclaimer of
opinion and were not qualified or modified as to uncertainty,
audit scope or accounting principle, except the reports did
include statements raising substantial doubt about the Company's
ability to continue as a going concern.
STELERA WIRELESS: Files Joint Plan of Liquidation
-------------------------------------------------
Stelera Wireless LLC, on April 29, filed with the U.S. Bankruptcy
Court for the Western District of Oklahoma a joint plan of
liquidation and accompanying disclosure statement. The Plan is
co-proposed by the Official Committee of Unsecured Creditors.
The Plan is proposed as a reasonable means to liquidate the
remainder of the Debtor's assets in order to maximize value for
creditors and provide an orderly wind-down and distribution of the
Debtor's assets. Any remaining assets of the Debtor not
previously transferred by sale, including the litigation claims,
will be transferred to the Debtor. Bill Rochelle, the bankruptcy
columnist for Bloomberg News, recalled that the Bankruptcy Court
previously approved two sales of frequency licenses advertised as
generating $37.4 million. The buyers were affiliates of Verizon
Communications Inc. and AT&T Inc.
The Plan provides the following classification and treatment of
claims:
* Class 1 (RUS Secured Claim). The Class 1 RUS Secured Claim is
being paid prior to Confirmation, is not impaired, and is not
entitled to vote on the Plan. The estimated amount of Class 1
Claim is $23,981,669 and the estimated distribution amount is
$23,981,669.
* Class 2 (Other Priority Claims). Allowed Class 2 Other
Priority Claims will be paid in full in cash on the Effective
Date. The Class 2 Claims are not impaired and are not
entitled to vote on the Plan. The estimated amount of the
Class 2 Claims is 25,000 and the estimated distribution is 23%
to 57%.
* Class 3 (Trade Claims). This class will receive each
claimholder?s pro rata share of the Estate Assets along with
Classes 4 and 5. Class 3 is impaired and, therefore, is
entitled to vote on the Plan. The estimated amount of Class 3
Claims is $2,495,191 and the estimated distribution is 23% to
57%.
* Class 4 (Tower Claims). Class 4 consists of the Allowed Tower
Claims of creditors with whom Debtor held pre-bankruptcy
agreements for the use of cell tower or related structures.
The class will receive each claimholder?s pro rata share of
the Estate Assets along with Classes 3 and 5. The Class 4
Claims are impaired and are entitled to vote on the Plan. The
Class 4 Claims are estimated to total $11,254,461.38, and
holders of Class 4 Claims are estimated to recover 23% to 57%
of the total amount of their claims.
* Class 5 (Loan Claims). Class 5 consists of the holders of
unsecured Loan Claims. This class will receive each
claimholder?s pro rata share of the Estate Assets along with
Classes 3 and 4. Class 5 is impaired and, therefore, is
entitled to vote on the Plan. The estimated amount of Class 5
Claims is $3,626,334, while the estimated distribution is 23%
to 57%.
* Class 6 (Interests). Class 6 consists of equity Interests in
the Debtor?s Chapter 11 Case. Holders of Class 6 Interests
will retain their respective Interests after confirmation of
the Plan. Class 6 Interests are unimpaired and, therefore,
are not entitled to vote on the Plan.
Mr. Rochelle related that the pot for unsecured creditors was
enlarged by a settlement approved by the Bankruptcy Court in which
the U.S. Agricultural Department's Rural Utilities Service gave up
part of its claim. In exchange for immediate payment of the $24
million principal amount of its claim, RUS agreed to drop claims
for post-bankruptcy interest and fees that could have been paid
because the claim is fully secured by sale proceeds, Mr. Rochelle
said.
The Debtor asked the Court to schedule a hearing on June 18 to
consider approval of the Disclosure Statement and a hearing on
Aug. 19 to consider confirmation of the Plan.
A full-text copy of the Disclosure Statement is available for free
at http://bankrupt.com/misc/STELERAds0429.pdf
About Stelera Wireless, LLC
Stelera Wireless, LLC, filed a Chapter 11 petition (Bankr. W.D.
Okla. Case No. 13-13267) on July 18, 2013. Tim Duffy signed the
petition as chief technology officer/manager. Judge Niles L.
Jackson presides over the case. The Debtor disclosed $18,005,000
in assets and $30,809,314 in liabilities as of the Chapter 11
filing.
Christensen Law Group, PLLC, serves as the Debtor's primary
counsel. Mulinix Ogden Hall & Ludlam, PLLC, serves as additional
bankruptcy counsel. Wilkinson Barker Knauer, LLP, serves as the
Debtor's special counsel. American Legal Claims Services, LLC
serves as official noticing agent. Falkenberg Capital Corporation
serves as the Debtor's broker.
The official committee of unsecured creditors is represented by
attorneys at Gablegotwals.
The Troubled Company Reporter reported on Dec. 10, 2013, the Hon.
Niles Jackson of the U.S. Bankruptcy Court for the Western
District of Oklahoma authorized Stelera Wireless to sell its
Federal Communications Commission licenses to: AT&T Mobility
Spectrum LLC, as purchaser; and Atlantic Tele-Network, Inc., as
backup purchaser. In an auction held Nov. 20, 2013, AT&T's bid
was the highest and best offer for the FCC licenses, while
Atlantic's, the stalking horse purchaser, was the second highest.
Pursuant to the APA, the aggregate purchase price to be paid by
AT&T will be $6,020,000.
Judge Jackson has extended the Debtor's exclusive periods to file
a Chapter 11 Plan until May 1, 2014, and solicit acceptances for
that Plan until July 1.
STEREOTAXIS INC: Incurs $4.1 Million Net Loss in First Quarter
--------------------------------------------------------------
Stereotaxis, Inc., reported a net loss of $4.13 million on $8.35
million of total revenue for the three months ended March 31,
2014, as compared with a net loss of $4.29 million on $8.40
million of total revenue for the same period in 2013.
As of March 31, 2014, the Company had $29.83 million in total
assets, $45.42 million in total liabilities and a $15.59 million
total stockholders' deficit.
At March 31, 2014, Stereotaxis had cash and cash equivalents of
$11.3 million, compared to $13.8 million at Dec. 31, 2013. Cash
burn for the first quarter of 2014 was $2.4 million, compared to
$1.1 million for the first quarter of 2013. During the quarter,
the Company received a $1.1 million down payment on a Niobe system
from its Japanese distribution partners.
William C. Mills, Stereotaxis chief executive officer, said, "In
the first quarter, we achieved our highest reported recurring
revenue results - $7 million - since the initial launch of our
EpochTM Solution at the beginning of 2012. While a portion of
this increase was driven by customer inventories of disposables,
which vary quarter to quarter, it also reflects our concentrated
effort to improve clinical adoption, resulting in two consecutive
quarters of procedure growth."
Mr. Mills continued, "We completed several important milestones
during the first quarter toward our vision for targeted new
markets. In February, we announced our engagement of two well-
established distribution partners in Japan, both possessing
abundant expertise in product promotion and the Japanese medical
device industry. Following in-depth training and strategic
discussions with Medix Japan and Hokushin Medical, we have a clear
direction for building enthusiasm around the Niobe(R) Magnetic
Navigation System as well as the clinical evidence needed to
support more robust reimbursement for Niobe procedures."
A copy of the press release is available for free at:
http://is.gd/cx244P
About Stereotaxis
Based in St. Louis, Missouri, Stereotaxis, Inc., is a manufacturer
and developer of a suite of navigation systems in interventional
surgical procedures. The Company's Epoch Solution is used in the
treatment of arrhythmias and coronary artery disease.
Stereotaxis reported a net loss of $68.75 million in 2013, as
compared with a net loss of $9.23 million in 2012.
Ernst & Young LLP, in St. Louis, Missouri, issued a "going
concern" qualification on the consolidated financial statements
for the year ended Dec. 31, 2013. The independent auditors noted
that the Company has incurred recurring operating losses and has a
net capital deficiency. These conditions raise substantial doubt
about the Company's ability to continue as a going concern.
SUNEDISON SEMICONDUCTOR: Moody's Rates $250MM Senior Debt 'B2'
--------------------------------------------------------------
Moody's Investor's Service assigned ratings to the debt of
SunEdison Semiconductor Ltd ("SSL") -- Corporate Family Rating
("CFR") at B3, Probability of Default Rating ("PDR") at B3-PD, and
$250 million Senior Secured debt at B2. Moody's also assigned a
Speculative Grade Liquidity (SGL) rating of SGL-3. The rating
outlook is stable.
The proceeds of the financing, along with some of the initial
public offering ("IPO") proceeds and the $100 million Samsung Fine
Chemicals private placement, will be used to repay about $300
million of debt owed to SunEdison, Inc. ("SunEdison"), SSL's
parent company, as part of the spin-off of a minority equity
interest in SSL via an IPO.
Ratings Rationale
The B3 Corporate Family Rating ("CFR") largely reflects the
execution risks that SSL will not be able to sufficiently reduce
its post-IPO cost structure to become free cash flow ("FCF")
generative. The challenges include the new polysilicon production
plant, which will become SSL's source of low-cost supply, may fail
to produce semiconductor-grade polysilicon of sufficient quality
or cost to allow SSL to achieve the desired margin improvements.
There is also the potential for greater than historical operating
costs once SSL operates as a separate company, while the
volatility of FCF due to the capital intensity and uneven end
market demand weighs on the rating. Moody's also recognizes SSL's
small market share (less than 15%) relative to Shin-Etsu and
SUMCO, which each account for 30% of the semiconductor wafer
market, and the high customer concentration, with the top three
customers accounting for nearly half of 2013 revenues. Moody's
expects net cash consumption over the near term due to the
increased interest expense burden with the new debt, capital
expenditures, and near term weak profit margins, which limits
options for debt reduction.
Nevertheless, Moody's believes that Samsung's wafer purchase
agreement with SSL and Samsung's $100 million equity investment
support Samsung's long term commitment to SSL and confidence in
SSL's capabilities. Moreover, Moody's expects profit margins to
gradually improve during 2014 as SunEdison has recently reduced
the price of polysilicon that it supplies to SSL to approximate
the market price. Moody's expects margins to improve further in
2015 as SSL begins receiving low-cost polysilicon supply from SMP
Ltd's polysilicon production plant, which is currently under
construction. (SMP Ltd is a joint venture of SunEdison, SSL, and
Samsung Fine Chemicals.) Moody's expects that improved margins
will result in SSL generating modest levels of FCF over the
intermediate term, allowing the company to gradually build
liquidity and reduce debt.
The B2 rating of the Senior Secured debt, which is one notch
higher than the CFR, reflects the single class of debt and the
cushion of unsecured liabilities in the capital structure. The
Speculative Grade Liquidity (SGL) rating of SGL-3, indicating
adequate liquidity, reflects the small revolver relative to the
revenue base and Moody's expectation that SSL will consume cash
over the near term, tempered somewhat by the $100 million starting
cash balance.
The stable outlook reflects Moody's expectation that SSL's margins
will improve from the weak current levels as the company begins to
benefit from lower cost supply from SunEdison and that the SMP Ltd
polysilicon facility will provide low-cost polysilicon by mid-
2015, which will result in further improvements in SSL's
polysilicon costs. Moody's expects that the rate of decline in
polysilicon cost will exceed the rate of decline in wafer average
selling prices ("ASPs"), resulting in an improving gross profit
margin. Moody's also expects that the costs to create a separate
business organization will not result in a material deterioration
in the operating margin.
The rating could be downgraded if the company is not on-course to
reach breakeven FCF over the next year. The rating could also be
downgraded if margins are unlikely to improve significantly due to
poor yields from the SMP Ltd polysilicon facility or SSL relying
on higher-priced third-party supply of polysilicon.
The rating could be upgraded if the anticipated supply cost
improvements are realized, with FCF consistently positive and
revenues growing in excess of the market, indicating market share
gains.
Assignments:
Issuer: SunEdison Semiconductor
Probability of Default Rating, Assigned B3-PD
Speculative Grade Liquidity Rating, Assigned SGL-3
Corporate Family Rating, Assigned B3
Senior Secured Bank Credit Facility, Assigned B2
Senior Secured Bank Credit Facility, Assigned B2
Senior Secured Bank Credit Facility, Assigned a range of
LGD3, 40 %
Senior Secured Bank Credit Facility, Assigned a range of
LGD3, 40 %
SunEdison Semiconductor Ltd., based in St. Peters, Missouri,
develops, manufactures, and sells silicon semiconductor wafers
ranging in diameter from 100 millimeters to 300 millimeters.
Products include polished, epitaxial, silicon on insulator,
perfect silicon, and magic denuded zone wafers.
SUNEDISON SEMICONDUCTOR: S&P Assigns Prelim B- Corp. Credit Rating
------------------------------------------------------------------
Standard & Poor's Ratings Services assigned St. Peters, Mo.-based
SunEdison Semiconductor Pte. Ltd. a preliminary 'B-' corporate
credit rating. The outlook is stable.
At the same time, S&P assigned the company's proposed $200 million
first-lien term loan due 2019 and the company's proposed $50
million revolving credit facility due 2017 its preliminary 'B'
issue-level rating, with a preliminary recovery rating of '2',
indicating S&P's expectations for substantial (70%-90%) recovery
in the event of a payment default.
The ratings on SunEdison Semiconductor reflect the company's
"vulnerable" business risk profile (as defined by S&P's criteria),
incorporating the company's exposure to the highly cyclical
semiconductor industry and high customer concentration. The
ratings also reflect an "aggressive" financial risk profile,
primarily reflecting S&P's expectation for negative free cash flow
over the next 12 months. S&P views the industry risk as
"moderately high," the country risk "intermediate," and the
company's management and governance as "fair."
S&P adjusts the anchor score downward by one notch to the final
'B-' rating, given the company's very weak free cash flow and need
to engage in higher capital expenditures in order to remain
competitive compared with 'B' rated firms in the semiconductor
industry, and S&P's view that standard leverage ratio analysis
does not fully capture SunEdison Semiconductor's level of
financial risk.
SunEdison Semiconductor is a manufacturer of silicon wafers, a
critical input for semiconductor manufacturing. The firm has
previously operated as the Semiconductor Materials division of
SunEdison, and is being partially spun off in an IPO.
The vulnerable business risk profile reflects the company's
limited scale in a highly competitive wafer fabrication market,
with intense pricing pressure, customer concentration, and a high
level of capital expenditures necessary to remain competitive in
leading wafer diameters. The semiconductor wafer market is highly
concentrated, with five firms controlling over 90% of production.
SunEdison is the fourth largest of these five, and while S&P
believes it has been able to grow share over the past five years,
its competitors are larger and have substantially greater
financial resources.
TELEXFREE LLC: Judge Transfers Chapter 11 Case to Massachusetts
---------------------------------------------------------------
Tom Corrigan, writing for Daily Bankruptcy Review, reported that a
bankruptcy judge rebuffed TelexFree LLC's efforts to keep its
Chapter 11 proceedings out of Massachusetts, where most of the
company's assets and operations are based.
According to the DBR report, following a day-long hearing, Judge
August Landis of the U.S. Bankruptcy Court in Las Vegas ruled that
the location of TelexFree's offices, assets and creditors, as well
as the convenience of access to the company's books and records,
all justified transferring the venue of the case to Massachusetts.
"Careful review and analysis of the convenience of the location of
the parties confirm that the venue of the cases must be
transferred to the district of Massachusetts," the DBR report
cited Judge Landis as saying at the hearing.
Citing "unusual circumstances" and a desire to avoid confusion,
Judge Landis also suspended the case until the transfer to
Massachusetts is completed, which could happen in as little as a
day, the DBR report related.
In his extensive findings of fact, Judge Landis didn't say whether
TelexFree was operating a Ponzi scheme or pyramid scheme, as was
alleged in civil suits by the SEC and private plaintiffs, Bill
Rochelle, the bankruptcy columnist for Bloomberg News, reported.
He did say near the end of the hearing that TelexFree's intention
is to use Chapter 11 to reorganize the "legitimate portion of the
business."
Judge Landis didn't rule on a request by the U.S. Trustee for
appointment of a trustee, and left that for decision by the
bankruptcy court in Massachusetts, Mr. Rochelle said.
The Securities and Exchange Commission and other regulators have
accused TelexFree, a provider of voice over Internet protocol
(VOIP) services, of illegally operating a $1 billion pyramid
scheme targeting Brazilians and other immigrant groups. In
addition to freezing the company's assets last month, the SEC also
filed civil fraud charges against the company, most of its
management and several of its most senior promoters.
Mr. Rochelle reported separately that TelexFree wants the
bankruptcy judge in Nevada to override an order from a federal
district judge in Boston who froze the company's assets and
effectively halted the business.
Because regulators are allowed to exercise police or regulatory
powers despite bankruptcy, TelexFree admits the SEC's suit by
itself didn't violate the so-called automatic stay, the Bloomberg
report related. Nonetheless, the company claims that the freeze
on assets did violate the stay and is beyond the enforcement of
police powers, the Bloomberg report further related.
TelexFree doesn't admit that the business was a Ponzi scheme,
Bloomberg said. It wants an opportunity to reorganize and
continue operating using a new business plan that was implemented
before bankruptcy, the report added. The company also says that
Chapter 11 is the "most efficient and least expensive" means for
rectifying any wrongs committed if it were a Ponzi scheme.
Mr. Rochelle, in a separate report, said TelexFree was sued by
buyers of unregistered securities for being a pyramid scheme.
In a group lawsuit commenced on May 3 in U.S. Bankruptcy Court in
Las Vegas, investors described how TelexFree purportedly sold
long-distance online phone service that "was otherwise available
for free through Internet providers such as Skype," Mr. Rochelle
related.
The plaintiffs, who seek to represent a class of investors, claim
that the company in reality was selling unregistered securities
promising a guaranteed return of 200 percent or more a year, Mr.
Rochelle further related. According to the complaint, sales alone
could not sustain accruing obligations to investors without
constantly attracting new investors.
Investors lost $300 million, according to the complaint, which was
filed against the company along with officers and directors, Mr.
Rochelle added.
The SEC's injunction action is Securities and Exchange Commission
v. TelexFree Inc., 14-cv-11858, U.S. District Court, District of
Massachusetts (Boston).
About TelexFREE
TelexFREE -- http://www.TelexFREE.com-- is a telecommunications
business that uses multi-level marketing to assist in the
distribution of voice over internet protocol telephone services.
TelexFree's retail VoIP product, 99TelexFree, allows for unlimited
international calling to seventy countries for a flat monthly rate
of $49.90. TelexFREE has over 700,000 associates or promoters
worldwide.
The company believes the sales of the 99TelexFree product, the
TelexFree "app," and other new products will ultimately prove
successful and profitable. The company is struggling, however,
with several factors that required it to seek chapter 11
protection. First, the Company experienced exponential growth in
revenue between 2012 and 2013 (from de minimus amounts to over $1
billion), which put tremendous pressure on the Company's
financial, operational and management systems. Second, although
the company revised its original compensation plan to promoters in
order to address certain questions that were raised regarding such
plan, the company believes that the plans need to be further
revised. Finally, the trailing liabilities arising from the
original compensation plan are difficult to quantify and have
resulted in substantial asserted liabilities against the company,
a number of which may not be valid.
TelexFREE LLC and two affiliates sought bankruptcy protection
(Bankr. D. Nev. Lead Case No. 14-12525) on April 13, 2014.
Alvarez & Marsal North America, LLC is serving as restructuring
advisor and Greenberg Traurig, LLP and Gordon Silver are serving
as legal advisors to TelexFREE.
TelexFree, LLC, estimated $50 million to $100 million in assets
and $100 million to $500 million in liabilities.
The Debtors have been notified that they must file their schedules
of assets and liabilities and statements of financial affairs by
April 27, 2014.
THERAPEUTICSMD INC: Files Presentation Materials with SEC
---------------------------------------------------------
TherapeuticsMD, Inc., furnished a current report on Form 8-K with
the U.S. Securities and Exchange Commission in connection with the
disclosure of information, in the form of the textual information
from a PowerPoint presentation to be given at meetings with
institutional investors or analysts. This information may be
amended or updated at any time and from time to time through
another Form 8-K, a later company filing, or other means.
The PowerPoint presentation is available for free at:
http://is.gd/WjVVER
BF Investment Sells Shares
BF Investment Enterprises, Ltd., on March 26, 2014, sold 421,268
shares TherapeuticsMD, Inc., common stock, par value $0.001, in an
underwritten secondary public offering, pursuant to an
Underwriting Agreement, between the Company, Jefferies LLC and
Stifel, Nicolaus & Company, as representatives of the underwriters
named therein, and the selling stockholders named therein. In
connection with the Offering, the Company, the Selling
Stockholders, and officers and directors of the Company entered
into lock-up agreements that restrict certain transactions in
Company's securities for a 90-day period. This sale triggered an
obligation by Brian Bernick, M.D., a director and officer of the
Company, and a controlling holder of BF Investment, to file a Form
4 with the Securities and Exchange Commission to report the sale.
In an unrelated transaction, during an open trading period in
March 2014, Dr. Bernick engaged in a series of estate planning
transactions pertaining to the securities of the Company held by
him, together with his wife as tenants by the entirety, indirectly
through BF Investment. On March 6, 2014, Dr. Bernick and his
wife, as tenants by the entirety, (i) sold a non-controlling
portion of their membership interest in BF Management, LLC, a
general partner of BF Investment, to a trust created for the
benefit of their children, and (ii) assigned a 13 percent of
limited partner interest in BF Investment to each of Dr. Bernick
and his wife, in their individual capacities. On March 7, 2014,
both Dr. Bernick and his wife, in their individual capacities,
sold a portion of certain of their respective limited partner
interests in BF Investment to trusts established for the benefit
of their children. The percentage of interests thus transferred
was estimated for purposes of satisfying Dr. Bernick's obligation
to report these transactions on a Form 4, filed with the SEC on
March 10, 2014. As a result of the subsequent valuation of BF
Investment and discovery of certain prior calculation errors, Dr.
Bernick was required to file an amendment to the Original Form 4
to correctly account for the interests previously reported on the
Original Form 4. The transactions reported on the Original Form 4
were undertaken solely for estate planning purposes. Dr. Bernick,
as the Manager of the General Partner, maintains sole voting and
dispositive power over all of the securities held by BF
Investment, but disclaims beneficial ownership of those securities
except to the extent of his pecuniary interest therein.
On March 27, 2014, Dr. Bernick caused to be filed a Form 4/A to
report the adjustments to interests transferred for estate
planning purposes as set forth above and a Form 4 to report the
sale pursuant to an underwritten secondary public offering.
About TherapeuticsMD
Boca Raton, Florida-based TherapeuticsMD, Inc. (OTC QB: TXMD) is a
women's healthcare product company focused on creating and
commercializing products targeted exclusively for women. The
Company currently manufactures and distributes branded and generic
prescription prenatal vitamins as well as over-the-counter
vitamins and cosmetics. The Company is currently focused on
conducting the clinical trials necessary for regulatory approval
and commercialization of advanced hormone therapy pharmaceutical
products designed to alleviate the symptoms of and reduce the
health risks resulting from menopause-related hormone
deficiencies.
TherapeuticsMD reported a net loss of $28.41 million in 2013, a
net loss of $35.12 million in 2012, and a net loss of $12.9
million in 2011. As of March 31, 2014, the Company had $53.56
million in total assets, $6.81 million in total liabilities and
$46.75 million in total stockholders' equity.
In the auditors' report accompanying the consolidated financial
statements for the year ended Dec. 31, 2012, Rosenberg Rich Baker
Berman & Company, in Somerset, New Jersey, expressed substantial
doubt about TherapeuticsMD's ability to continue as a going
concern, citing the Company's loss from operations of
approximately $16 million and negative cash flow from operations
of approximately $13 million.
THOMAS MECHAM RICKS: Partial Withdrawal of Reference Denied
-----------------------------------------------------------
Chief District Judge B. Lynn Winmill in Idaho denied Thomas Ricks'
Motion for Partial Withdrawal of Reference in his complaint
against John Wood and Park Hampton LLC. Judge Winmill said, "The
more efficient way to proceed is to keep all the claims in the
adversary action together, before the bankruptcy court. The
bankruptcy court may preside over all pretrial matters, including
discovery and pretrial conferences, and it may resolve routine and
dispositive motions. If either party files a dispositive motion on
the second claim, the bankruptcy court could entertain that motion
and submit proposed findings of fact, conclusions of law, and a
recommendation for disposition of the claim to this Court. If and
when it becomes clear that a jury trial will be necessary, and the
case is prepared and ready for trial to begin, Park Hampton may
file another withdrawal motion."
The case is, THOMAS MECHAM RICKS, an individual, Plaintiff, v.
JOHN WOOD, and individual; PARK HAMPTON LLC; and DOES I-X,
Defendants, Case No. 1:14-mc-07802-BLW (D. Idaho). A copy of the
District Court's April 29, 2014 Memorandum Decision and Order is
available at http://is.gd/1sskOKfrom Leagle.com.
Based in Eagle, Idaho, Thomas Mecham Ricks, filed for Chapter 11
bankruptcy (Bankr. D. Idaho Case No. 09-00215) January 29, 2009.
Thomas G. Walker, Esq., at Cosho Humphrey LLP, in Boise, Idaho,
serves as bankruptcy counsel. The Debtor estimated $10 million to
$50 million in assets and $1 million to $10 million in debts. The
Debtor's case was converted to Chapter 7 on June 18, 2010.
TRANSGENOMIC INC: Common Stock Uplisted to NASDAQ Capital Market
----------------------------------------------------------------
Transgenomic, Inc.'s shares of common stock have been approved for
uplisting to the NASDAQ Capital Market. Effective Friday, May 9,
2014, the stock will trade on NASDAQ under the symbol TBIO.
"Uplisting to Nasdaq represents a key milestone for Transgenomic
as we continue our transition into a leading player in the rapidly
growing field of personalized medicine," said Paul Kinnon,
president and chief executive officer of Transgenomic. "Uplisting
to a national exchange was an important goal for the company. We
believe that trading on the NASDAQ market will expand our
visibility and provide us access to a broader investor base,
helping us translate our strategic growth initiatives and renewed
focus on implementation into increased shareholder value going
forward."
Transgenomic develops and commercializes diagnostic assays and
testing kits with the goal of improving medical diagnoses and
patient outcomes.
Transgenomic's common shares will continue to trade on the OTC
Bulletin Board under its existing ticker symbol "TBIO" until the
market closes on Thursday, May 8, 2014.
About Transgenomic
Transgenomic, Inc. -- http://www.transgenomic.com/-- is a global
biotechnology company advancing personalized medicine in
cardiology, oncology, and inherited diseases through its
proprietary molecular technologies and world-class clinical and
research services. The Company is a global leader in cardiac
genetic testing with a family of innovative products, including
its C-GAAP test, designed to detect gene mutations which indicate
cardiac disorders, or which can lead to serious adverse events.
Transgenomic has three complementary business divisions:
Transgenomic Clinical Laboratories, which specializes in molecular
diagnostics for cardiology, oncology, neurology, and mitochondrial
disorders; Transgenomic Pharmacogenomic Services, a contract
research laboratory that specializes in supporting all phases of
pre-clinical and clinical trials for oncology drugs in
development; and Transgenomic Diagnostic Tools, which produces
equipment, reagents, and other consumables that empower clinical
and research applications in molecular testing and cytogenetics.
Transgenomic believes there is significant opportunity for
continued growth across all three businesses by leveraging their
synergistic capabilities, technologies, and expertise. The
Company actively develops and acquires new technology and other
intellectual property that strengthens its leadership in
personalized medicine.
Transgenomic incurred a net loss of $8.32 million in 2012, a net
loss of $9.78 million in 2011 and a net loss of $3.13 million in
2010. The Company's balance sheet at Sept. 30, 2013, showed
$33.18 million in total assets, $17.78 million in total
liabilities and $15.39 million in total stockholders' equity.
As reported by the TCR on Feb. 13, 2013, Transgenomic entered into
a forbearance agreement with Dogwood Pharmaceuticals, Inc., a
wholly owned subsidiary of Forest Laboratories, Inc., and
successor-in-interest to PGxHealth, LLC, with an effective date of
Dec. 31, 2012.
TRONOX INC: Awaits Approval of Anadarko Settlement Agreement
------------------------------------------------------------
Subsequent to quarter end, Anadarko Petroleum Corporation
announced a $5.15 billion settlement agreement in the Tronox
Adversary Proceeding, representing a principal sum of
approximately $3.98 billion plus interest. The settlement
agreement is subject to recommendation by the Bankruptcy Court,
approval by the District Court, and the issuance of an injunction
barring similar claims from being asserted by third parties.
"During the quarter, we generated more than $2.5 billion of
discretionary cash flow, closed the Mozambique and Pinedale/Jonah
transactions and ended the quarter in a very strong financial
position with approximately $6 billion of cash on hand, plus
access to our $5 billion revolving credit facility," said Anadarko
Executive Vice President, Finance and CFO, Bob Gwin. "The
strength of our balance sheet, high-margin cash-generating
capability and proceeds from asset monetizations provide the
capability to fund the Tronox settlement, along with the
flexibility to expand our robust 2014 capital program and support
additional methods to enhance value."
The disclosure was made in Anadarko's earnings release for the
first quarter of 2014, a copy of which is available for free at:
http://is.gd/gnsYXu
About Tronox Inc.
Tronox Inc., aka New-Co Chemical, Inc., and 14 other affiliates
filed for Chapter 11 protection (Bankr. S.D.N.Y. Case No.
09-10156) on Jan. 13, 2009, before Hon. Allan L. Gropper. Richard
M. Cieri, Esq., Jonathan S. Henes, Esq., and Colin M. Adams, Esq.,
at Kirkland & Ellis LLP in New York, represented the Debtors. The
Debtors also tapped Togut, Segal & Segal LLP as conflicts counsel;
Rothschild Inc. as investment bankers; Alvarez & Marsal North
America LLC, as restructuring consultants; and Kurtzman Carson
Consultants served as notice and claims agent.
An official committee of unsecured creditors and an official
committee of equity security holders were appointed in the cases.
The Creditors Committee retained Paul, Weiss, Rifkind, Wharton &
Garrison LLP as counsel.
Until Sept. 30, 2008, Tronox was publicly traded on the New
York Stock Exchange under the symbols TRX and TRX.B. Since then,
Tronox has traded on the Over the Counter Bulletin Board under the
symbols TROX.A.PK and TROX.B.PK. As of Dec. 31, 2008, Tronox
had 19,107,367 outstanding shares of class A common stock and
22,889,431 outstanding shares of class B common stock.
On Nov. 17, 2010, the Bankruptcy Court confirmed the Debtors'
First Amended Joint Plan of Reorganization under Chapter 11 of the
Bankruptcy Code, dated Nov. 5, 2010. Under the Plan, Tronox
reorganized around its existing operating businesses, including
its facilities at Oklahoma City, Oklahoma; Hamilton, Mississippi;
Henderson, Nevada; Botlek, The Netherlands and Kwinana, Australia.
UNIQUE BROADBAND: June 17 Hearing Set for Disputed Jolian Claims
----------------------------------------------------------------
Unique Broadband Systems, Inc. previously disclosed that (i)
certain, but not all, of the claims of Jolian Investments Limited
and Mr. Gerald McGoey were disallowed in connection with the
Company's ongoing CCAA proceedings, and (ii) UBS was granted leave
to appeal the Judgment of the Honourable Madam Justice Mesbur in
which she found that, pursuant to its services agreement with UBS,
Jolian was entitled to an enhanced severance as a result of the
termination of its contract with UBS.
The Jolian parties subsequently brought a cross-appeal in respect
of the decision of the Honourable Madam Justice Mesbur to disallow
the Jolian parties' claims for: (1) payment in respect of the
cancellation of the Company's share appreciation rights plan; (2)
payment of a deferred bonus; and (3) indemnification in addition
to ordering that the Jolian parties repay all monies previously
advanced to them in the nature of indemnification.
The appeal and cross-appeal are scheduled to be heard on June 17,
2014. Shareholders are encouraged to refer to the section
entitled "Provisions and contingencies -- Contingencies -- Jolian
claims" in the Company's most recent MD&A.
About Unique Broadband Systems
Unique Broadband Systems, Inc. -- http://www.uniquebroadband.com/
-- is a Canadian-based company with holdings in Look
Communications and a continuing business interest with Unique
Broadband Systems Ltd.
VIGGLE INC: Closes Exchange Agreements with Stockholders
--------------------------------------------------------
As previously disclosed in its current report on Form 8-K filed on
March 24, 2014, Viggle Inc. entered into Exchange Agreements with
each of the holders of its Series A Convertible Redeemable
Preferred Stock and Series B Convertible Preferred Stock, pursuant
to which each of the holders agreed to exchange their shares of
Series A Preferred Stock and Series B Preferred Stock on the terms
described in the Exchange Agreements. Consummation of the
Exchange was contingent upon the completion of the closing of a
public offering of the Company's equity securities pursuant to a
registration statement on Form S-1 through which the Company
raised at least $20,000,000 in net cash proceeds.
On April 30, 2014, the Company closed an underwritten public
offering of 4,375,000 shares of its common stock at a price to the
public of $8.00 per share, raising net cash proceeds of $32.1
million. Consequently, the Exchange closed on April 30, 2014.
Immediately prior to the completion of the Exchange, the holders
of the Series A Preferred Stock and Series B Preferred Stock,
including affiliates of Robert F.X. Sillerman, the Company's
Chairman and chief executive officer, held 34,275 shares of Series
A Preferred Stock and 21,804.2 shares Series B Preferred Stock.
On April 30, 2014, those shares were exchanged for a total of
7,151,284 shares of the Company's common stock.
On Dec. 16, 2013, the Company and Viggle Merger Sub Inc., a
Delaware corporation and wholly-owned subsidiary of the Company
("Merger Sub"), entered into an Agreement and Plan of Merger with
Wetpaint.com, Inc., a Delaware corporation, certain stockholders
of Wetpaint (solely with respect to Articles 1, 5 and 6 and
Subsection 11.1 of the Merger Agreement) and Shareholder
Representative Services LLC, a Colorado limited liability company
(solely in its capacity as the Stockholders' Agent). The Merger
Agreement required that upon the completion of the Exchange, the
amount of the Company's common stock issued as consideration in
the transaction would be adjusted such that, after giving effect
to the Exchange, the shares constituting the Stock Consideration
collectively would represent 13.17 percent of the total
outstanding shares of the Company's common stock on a fully-
diluted basis prior to the Public Offering. In addition, on
Jan. 29, 2014, the Company entered into an Agreement and Plan of
Merger with Dijit Media, Inc. containing similar anti-dilution
provisions.
Upon completion of the Exchange, the Company issued to the former
stockholders of Wetpaint.com, Inc., and Dijit Media, Inc., a total
of 748,536 additional shares of the Company's common stock.
The issuances of the Recapitalization Shares and the Antidilution
Shares were exempt from the registration requirements of the
Securities Act of 1933, as amended, pursuant to Section 4(2) of
the Securities Act and Regulation D promulgated thereunder.
About Viggle
New York City-based Viggle Inc. is a loyalty marketing company.
The Company has developed a loyalty program for television that
gives people real rewards for checking into the television shows
they are watching on most mobile operating system. Viggle users
can redeem their points in the app's rewards catalog for items
such as movie tickets, music, or gift cards.
Viggle incurred a net loss of $91.40 million on $13.90 million of
revenues for the year ended June 30, 2013, as compared with a net
loss of $96.51 million on $1.73 million of revenues during the
prior year. As of Dec. 31, 2013, the Company had $60.63 million
in total assets, $53.94 million in total liabilities, $37.71
million in series A convertible redeemable preferred stock, and a
$31.02 million total stockholders' deficit.
BDO USA, LLP, in New York, issued a "going concern" qualification
on the consolidated financial statements for the year ended
June 30, 2013. The independent auditors noted that the Company
has suffered recurring losses from operations and at June 30,
2013, has deficiencies in working capital and equity that raise
substantial doubt about its ability to continue as a going
concern.
VISCOUNT SYSTEMS: Issues 19.797 Series A Conv. Preferred Stock
--------------------------------------------------------------
Viscount Systems, Inc., issued a total of 19.797 Series A
Convertible Redeemable Preferred Stock, par value $0.001 per
share, to the outstanding holders of A Shares as dividend payments
on the A Shares for the period ended March 31, 2014. The A Shares
issued are subject to the conversion and dividend rights as set
forth in the Certificate of Designation, Preferences and Rights of
the Series A Convertible Redeemable Preferred Stock dated June 5,
2012, as amended Oct. 17, 2012, and March 21, 2014.
About Viscount Systems
Burnaby, Canada-based Viscount Systems, Inc., is a manufacturer,
developer and service provider of access control security
products.
The Company's bank credit facility was suspended on December 30,
2011 due to the bank's assessment of the Company's financial
position. Management has determined that the Company will need to
raise a minimum of C$500,000 by way of new debt or equity
financing to continue normal operations for the next twelve
months. Management has been actively seeking new investors and
developing customer relationships, however a financing arrangement
has not yet completed. Short-term loan financing is anticipated
from related parties, however there is no certainty that loans
will be available when required. These factors raise substantial
doubt about the ability of the Company to continue operations as a
going concern.
Dale Matheson Carr-Hilton LaBonte LLP expressed substantial doubt
about the Company's ability to continue as a going concern, citing
that the Company has an accumulated deficit of C$11.67 million for
the year ended Dec. 31, 2013. The Company requires additional
funds to meet its obligations and the costs of its operations.
The Company reported a net loss of C$3.08 million on
C$4.13 million of sales in 2013, compared with a net loss of
C$2.68 million on C$3.6 million of sales in 2012. The Company's
balance sheet at Dec. 31, 2013, showed C$1.34 million in total
assets, C$6.16 million in total liabilities, and a stockholders'
deficit of C$4.82 million.
VISHAL PROPERTIES: Case Summary & 6 Unsecured Creditors
-------------------------------------------------------
Debtor: Vishal Properties Ltd.
aka America's Best Value Inn
511 Pam American Drive
Harker Heights, TX 76548
Case No.: 14-60409
Chapter 11 Petition Date: May 6, 2014
Court: United States Bankruptcy Court
Western District of Texas (Waco)
Judge: Hon. Ronald B. King
Debtor's Counsel: John A. Montez, Esq.
MONTEZ & WILLIAMS, P.C.
3809 W. Waco Dr
Waco, TX 76710
Tel: (254) 759-8600
Fax: (254) 759-8700
Email: johna.montez@yahoo.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Amratlal D. Gandhi, managing partner.
A list of the Debtor's six largest unsecured creditors is
available for free at http://bankrupt.com/misc/txwb14-60409.pdf
VISION INDUSTRIES: D. Gauger to Serve as Acting CFO Until 2015
--------------------------------------------------------------
The Board of Directors approved the appointment of Mr. Dennis P.
Gauger as "acting CFO" pursuant to Mr. Gauger's consulting
agreement dated April 30, 2014. According to the Agreement, Mr.
Gauger, age 62, will serve as acting CFO until April 30, 2015, the
term of the agreement, unless terminated by either Mr. Gauger or
the Company.
Dennis P. Gauger, Certified Public Accountant, has more than 37
years of professional experience, providing a variety of
businesses, their owners and management timely, expert financial
management, accounting, consulting and SEC compliance services.
Prior to starting his own firm in May 1998, Mr. Gauger served in
three offices of an international "Big Four" accounting firm,
including 9 years as an accounting and auditing partner and 10
years in that firm's emerging business services division. He has
experience in a variety of industries including: manufacturing,
high technology, software, aviation, retail and distribution,
financial services, hospitality and gaming, food services, mining,
telecommunications, medical devices and real estate. Mr. Gauger
has served as a full-time chief financial officer and as a part-
time contract financial executive, compliance and business
consultant to mature and emerging businesses in a variety of
industries. This "hands on" financial management experience,
coupled with years of serving clients in an international firm,
uniquely qualifies him to understand a company's operational
challenges and to expertly meet its accounting, financial
reporting, and regulatory compliance needs. Companies that engage
his services rely on competent advice and timely, responsive
service.
Focusing on serving Securities and Exchange Commission reporting
companies, Mr. Gauger has served as a full-time and part-time
contract chief financial officer for several public companies. In
that role, he has been responsible for financial reporting and
regulatory compliance, working in tandem with outside auditors and
securities counsel. This experience includes preparing financial
statements and related disclosures and writing all sections of SEC
periodic reports. He also provides input to and strengthens a
public company's Sarbanes-Oxley compliance procedures and the
internal controls of the accounting department. He has also
provided assistance to boards of directors and audit committees of
public companies in meeting corporate governance requirements of
stock exchanges and the SEC. He has consulted with boards in
organizing board committees, attending and preparing minutes of
board meetings, and planning for and conducting annual shareholder
meetings.
Mr. Gauger graduated with honors with a BS degree in accounting
from Brigham Young University. He is a licensed Certified Public
Accountant in the states of Utah and Nevada and a member of the
American Institute of Certified Public Accountants and the Utah
Association of Certified Public Accountants. He has significant
international business experience and is fluent in Spanish, both
verbal and written.
Mr. Gauger is not related to any person, promoter or control
person of Vision Industries Corp.
Form 10-K Delayed
On April 2, 2014, Vision Industries filed with the U.S. Securities
and Exchange Commission a Notification of Late Filing on Form 12b-
25 with respect to annual report on Form 10-K for the year ended
Dec. 31, 2013. The Company was unable to file its Annual Report
because of unanticipated delays in the completion of its financial
statements and related portions of the Form 10-K, which delays
could not be eliminated by the Registrant without unreasonable
effort and expense. In accordance with Rule 12b-25 under the
Securities Exchange Act of 1934, the Company anticipates filing
its Form 10-K no later than 15 calendar days following the
prescribed due date.
About Vision Industries
Long Beach, Cal.-based Vision Industries Corp. focuses its
efforts in building Class 8 fuel cell electric vehicles (FCEV)
used in drayage transportation.
The Company's balance sheet at Sept. 30, 2013, showed $1.06
million in total assets, $2.89 million in total liabilities, and
stockholders' deficit of $1.83 million.
Vision Industries reported a net loss of $5.28 million on $26,545
of total revenue for the year ended Dec. 31, 2012, as compared
with a net loss of $6.44 million on $764,157 of total revenue for
the year ended Dec. 31, 2011.
DKM Certified Public Accountants, in Clearwater, Florida, issued a
"going concern" qualification on the consolidated financial
statements for the year ended Dec. 31, 2012. The independent
auditors noted that the Company's cash and available credit are
not sufficient to support its operations for the next year.
Accordingly, management needs to seek additional financing that
raises substantial doubt about its ability to continue as a going
concern.
WOLVERINE WORLD: S&P Ups CCR to BB on Lower Debt & Higher Earnings
------------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on Rockford, Mich.-based Wolverine World Wide Inc. to 'BB'
from 'BB-'. The outlook is stable.
S&P also raised its issue rating on the company's senior secured
debt (comprising a $200 million revolver and $775 million term
loan, both due 2018) to 'BBB-' from 'BB', and revised the recovery
rating on this debt to '1' from '2', indicating S&P's expectation
for very high (90% to 100%) recovery for debtholders in the event
of a default. S&P attributes the improved recovery prospects to
the company's lower debt levels.
At the same time, S&P raised its issue-level rating on the
company's $375 million senior unsecured 6.125% notes due 2020 to
'BB' from 'B+', and revised the recovery rating to '3' from '5',
indicating S&P's expectation for meaningful (50% to 70%) recovery
for noteholders in the event of a payment default.
"The one-notch upgrade reflects our view that Wolverine could
sustain its improved credit measures following debt reduction and
EBITDA growth," said Standard & Poor's credit analyst Linda
Phelps. "Adjusted debt-to-EBITDA leverage, including
restructuring and acquisition related costs, has declined to about
3.5x for fiscal 2013, down from the high-4x area for fiscal 2012,
pro forma for the October 2013 acquisition of PLG, because of debt
reduction with operating cash flow, lower pension obligations, and
higher surplus cash balance."
The stable outlook reflects Standard & Poor's view that
Wolverine's operating performance will be relatively stable over
the next 12 months, maintaining its good niche positions in the
U.S. footwear market and successful integration of PLG. S&P also
believes debt levels will continue to decline through amortization
and voluntary payments.
WPCS INT'L: Receives NASDAQ Listing Non-Compliance Notice
---------------------------------------------------------
WPCS International Incorporated, which specializes in contracting
services for communications infrastructure and the development of
a Bitcoin trading platform, on May 6 disclosed that it received a
letter from the Staff of the Listing Qualifications Department of
The NASDAQ Stock Market LLC indicating that unless the Company
timely requests a hearing before the NASDAQ Listing Qualifications
Panel, the Company's common stock would be subject to delisting
from The NASDAQ Capital Market due to the Company's non-compliance
with the requirement to solicit proxies and hold an annual meeting
of stockholders, as set forth in NASDAQ Listing Rules 5620(a) and
5620(b).
Accordingly, the Company plans to timely request a hearing before
the Panel, which will stay any suspension or delisting action
until at least the issuance of a formal determination by the Panel
following the hearing or the expiration of any extension granted
by the Panel. The Company is diligently pursuing its plan to
regain compliance with the Annual Meeting Requirement and, in that
regard, had already initiated the process prior to receiving the
notice from NASDAQ, and intends to file the proxy statement for
the annual meeting within the next week. There can be no
assurance that the Panel will grant the Company's request for
continued listing pending the completion of its plan.
Sebastian Giordano, Interim Chief Executive Officer, commented:
"The primary reason for the delay in holding our annual meeting
was due to the Company commencing first with a special shareholder
meeting to approve other Company actions. The scheduling of this
special meeting was postponed as a result of several rounds of
comments from the SEC, which we have now resolved. The Company
believes that amending the special meeting to include the annual
meeting requirements would have further delayed the scheduling of
both the special meeting and the annual meeting. Management
believes that we will regain compliance with the Annual Meeting
Requirement based on its current plan to hold its annual meeting
as soon as possible."
About WPCS International Incorporated
WPCS -- http://www.wpcs.com-- operates in two business segments
including: (1) providing communications infrastructure contracting
services to the public services, healthcare, energy and corporate
enterprise markets worldwide; and (2) developing a Bitcoin trading
platform.
WPCS INTERNATIONAL: Non-Compliance Notice Triggers Default
-----------------------------------------------------------
WPCS International Incorporated received a letter from the Staff
of the Listing Qualifications Department of The NASDAQ Stock
Market LLC indicating that unless the Company timely requests a
hearing before the NASDAQ Listing Qualifications Panel, the
Company's common stock would be subject to delisting from The
NASDAQ Capital Market due to the Company's non-compliance with the
requirement to solicit proxies and hold an annual meeting of
stockholders, as set forth in NASDAQ Listing Rules 5620(a) and
5620(b).
Accordingly, the Company plans to timely request a hearing before
the Panel, which will stay any suspension or delisting action
until at least the issuance of a formal determination by the Panel
following the hearing or the expiration of any extension granted
by the Panel. The Company is diligently pursuing its plan to
regain compliance with the Annual Meeting Requirement and, in that
regard, had already initiated the process prior to receiving the
notice from NASDAQ, and intends to file the proxy statement for
the annual meeting within the next week. There can be no
assurance that the Panel will grant the Company's request for
continued listing pending the completion of its plan.
Sebastian Giordano, interim chief executive officer, commented:
"The primary reason for the delay in holding our annual meeting
was due to the Company commencing first with a special shareholder
meeting to approve other Company actions. The scheduling of this
special meeting was postponed as a result of several rounds of
comments from the SEC, which we have now resolved. The Company
believes that amending the special meeting to include the annual
meeting requirements would have further delayed the scheduling of
both the special meeting and the annual meeting. Management
believes that we will regain compliance with the Annual Meeting
Requirement based on its current plan to hold its annual meeting
as soon as possible."
WPCS International previously issued secured convertible notes to
certain accredited investors pursuant to a securities purchase
agreement dated Dec. 4, 2012. Pursuant to the terms of the Notes,
an event of default occurs when the Company's common stock is
suspended or threatened with suspension from trading on The NASDAQ
Capital Market (or an equivalent market). As a result of the
notice from NASDAQ, an event of default occurred under the Notes.
As a result of the Event of Default, the Holders have the right to
require the Company to redeem the Notes equal to the Conversion
Amount to be redeemed, plus a make-whole amount equal to the
amount of any interest that, but for any redemption of the Notes
on such given date, would have accrued with respect to the
Conversion Amount being redeemed under the Notes at the interest
rate then in effect for the period from such given date through
Oct. 31, 2023, the amended maturity date of the Notes, discounted
to the present value of such interest using a discount rate of 2.5
percent per annum. Currently, the principal amount of Notes
outstanding is $898,334.
"The Company has provided notice to the Holders of the Event of
Default, but no Holder has exercised its right of redemption. If
the Company is required to repay the Notes, the Company does not
have sufficient working capital to repay the outstanding
borrowings," the Company stated in a regulatory filing with the
U.S. Securities and Exchange Commission.
"The Company and the Holders have commenced discussions concerning
a forbearance or waiver of the Event of Default, however, there
can be no assurance that the Company and Holders will come to any
agreement (either oral or written) regarding repayment,
forbearance, waiver or modification of the Notes."
About WPCS International
WPCS -- http://www.wpcs.com-- is a design-build engineering
company that focuses on the implementation requirements of
communications infrastructure. The company provides its
engineering capabilities including wireless communications,
specialty construction and electrical power to the public
services, healthcare, energy and corporate enterprise markets
worldwide.
As reported by the TCR on Feb. 7, 2014, WPCS appointed Marcum LLP
as its new independent registered public accounting firm.
CohnReznick LLP resigned on Dec. 20, 2013,
The Company's former auditors, CohnReznick LLP, in Roseland, New
Jersey, expressed substantial doubt about WPCS International's
ability to continue as a going concern following the annual report
for the year ended April 30, 2013. The independent auditors noted
that the Company has incurred net losses and negative cash flows
from operating activities, had a working capital deficiency as of
and for the years ended April 30, 2013, and 2012, and has an
accumulated deficit as of April 30, 2013.
The Company reported a net loss of $6.8 million on $42.3 million
of revenue in fiscal 2013, compared with a net loss of
$20.6 million on $65.5 million in fiscal 2012. As of Jan. 31,
2014, the Company had $22.37 million in total assets, $15.18
million in total liabilities and $7.19 million in total equity.
ZUMBOX INC: Closes After Seven Years
------------------------------------
Lizette Chapman, writing for The Wall Street Journal, reported
that after seven years and more than $30 million in funding from
investors including former chiefs of Walt Disney Co.,
Priceline.com Inc. and others, digital post service Zumbox Inc. is
calling it quits.
"We are considering multiple options with what to do with the
assets," Zumbox Chief Executive Gordon Adams said, the report
related.
Mr. Adams joined the Los Angeles-based company last May in part to
help it raise funding, the report further related. He said
investor appetite for the company simply wasn't there and the
service would be discontinued April 14.
"Fundamentally the cost and time it was going to take to build a
brand and create a consumer portal was more than what the
investors wanted," he said, the report cited. "There was not an
appetite to see it through."
According to the report, Australia-based share registry company
ComputerShare Ltd. invested $10.6 million in Zumbox in July 2012
to expand product and marketing efforts. Along with Shelter
Capital Partners, a string of private individuals including former
Walt Disney Co. CEO Michael Eisner, former Priceline.com Inc.
Chair Rick Braddock, Guthy-Renker Founding Principal Bill Guthy
and Shelter Capital Partners' Art Bilger are also investors,
according to VentureWire records.
* Get Single-Asset Real Estate Out of Chapter 11, Lawyer Proposes
-----------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that owners of single-asset real estate projects shouldn't
be allowed to reorganize in Chapter 11, according to Jonathan
Landers, a lawyer and former law professor.
The Bankruptcy Code has special provisions for single-asset real
estate bankruptcies, known as SAREs. Section 362(d)(3), for
example, requires SARE bankrupts to file a plan within 90 days
that "has a reasonable possibility of being confirmed within a
reasonable time," the report related.
Absent a feasible plan, the bankruptcy court can allow the lender
to foreclose, the report further related.
Despite provisions intended to hurry SARE bankruptcies, they "do
not belong in Chapter 11," Landers said in the April edition of
the ABI Journal, the report said.
* Older Auto Expense Disallowed by San Francisco Appellate Panel
----------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that additional expenses for owning an older car can't be
used in calculating how much creditors must be paid under a
Chapter 13 plan, according to an April 9 decision by the U.S.
Bankruptcy Appellate Panel in San Francisco.
According to the report, the case involved a couple who owned a
1993 automobile with 118,000 miles on it. They proposed a plan to
pay creditors $150 a month for five years. To arrive at their
projected disposable income under Section 1325(b)(1)(B) of the
Bankruptcy Code, they subtracted $200 a month for the old car.
Although the bankruptcy judge approved, the appellate panel
disagreed and set aside confirmation of the plan, the report
related. The three-judge panel said courts are split over whether
there's a permissible additional deduction for an older car, the
report further related.
The bankrupts based their entitlement to a deduction on guidelines
for Internal Revenue Service agents to use in reaching compromises
with delinquent taxpayers, the report added. Those guidelines
allow a $200 monthly deduction for older autos.
The case is Drummond v. Luedtke (In re Luedtke), 13-1313, U.S.
Bankruptcy Appellate Panel for the Ninth Circuit (San Francisco).
* Allstate, Merrill Lynch to End $167 Million Mortgage Suit
-----------------------------------------------------------
Chris Dolmetsch, writing for Bloomberg News, reported that
Allstate Corp. and Bank of America Corp.'s Merrill Lynch unit
agreed to end a lawsuit by the insurer over $167 million in
mortgage-backed securities as the second-largest U.S. lender
continues to resolve litigation tied to the financial crisis.
The parties agreed to end the suit, filed in New York State
Supreme Court in Manhattan in March 2011, according to a court
filing dated April 9, the report related. Terms weren't revealed.
Allstate, based in Northbrook, Illinois, accused Merrill Lynch of
selling it mortgage bonds that were riskier than promised.
According to the report, Bank of America Chief Executive Officer
Brian T. Moynihan has spent more than $50 billion to clean up
fallout from the 2008 credit crisis when his predecessor, Kenneth
Lewis, bought Countrywide Financial Corp. and Merrill Lynch & Co.
The parties resolved the matter on mutually agreeable terms,
Daniel L. Brockett, an attorney with Quinn Emanuel Urquhart &
Sullivan LLP in New York representing Allstate, said by telephone,
the report further related. Lawrence Grayson, a spokesman for Bank
of America, declined to comment on the agreement.
Bank of America, based in Charlotte, North Carolina, agreed to
settle a separate 2010 case filed by Allstate against its
Countrywide unit over $700 million in devalued mortgage-backed
securities, according to a filing on April 9 in U.S. District
Court in Los Angeles, the report added.
The case is Allstate Insurance Co. v. Merrill Lynch & Co., 650559-
2011, New York State Supreme Court, New York County (Manhattan).
* Moody's, S&P Say CalPERS Looking for Ratings Scapegoat
--------------------------------------------------------
Karen Gullo, writing for Bloomberg News, reported that Moody's
Investors Service Inc. says the California Public Employees
Retirement System can't blame it for almost $800 million in losses
on top-rated investments that later collapsed because its
assessments are opinions and not guarantees or facts.
According to the report, Moody's and McGraw Hill Financial Inc.'s
Standard & Poor's unit accuse Calpers, the largest U.S. pension
fund, of trying to shift responsibility for losses that occurred
after it outsourced investment decisions to money managers who put
$1.3 billion into three vehicles backed by subprime mortgages in
2006 and 2007. The investments crumbled amid the housing crisis.
Calpers sued the ratings companies in 2009.
Ratings are predictions about the likelihood that investors will
receive expected payments, Floyd Abrams, an attorney for McGraw
Hill, said in state appeals court in San Francisco, the report
related. The ratings companies are seeking to overturn a
California judge's 2012 ruling that they must face Calpers's
claims that they made negligent representations.
"Ratings are by their very nature future-oriented," Abrams told a
three-judge appellate panel, the report further related.
Two of the three judges asked whether ratings provide investors
with an assessment about an investment's health at the time they
were given, the report added.
The case is Calpers v. Moody's, A134912, California Court of
Appeals, First District (San Francisco).
* SAC Record $1.8 Billion Insider Plea Caps 7-Year Probe
--------------------------------------------------------
Patricia Hurtado, Bob Van Voris and Saijel Kishan, writing for
Bloomberg News, reported that SAC Capital Advisors LP's landmark
$1.8 billion settlement of a U.S. government insider-trading probe
stretching back to 2007 was approved by a federal judge, bringing
to an end the hedge fund's role as a money manager and capping a
decade of insider-trading cases.
According to the report, SAC Capital, which changed its name to
Point72 Asset Management LP, pleaded guilty to reaping hundreds of
millions of dollars in illegal profits and fostering a culture of
criminality that encouraged brazen insider trading by its
employees.
Though never able to charge or even sue founder Steven A. Cohen,
the government managed to snare eight current or former employees
through guilty pleas and trial convictions, the report related.
Cohen, 57, who has consistently denied wrongdoing, is the subject
of an administrative proceeding by the Securities and Exchange
Commission, which claims the billionaire failed to supervise
employees to ensure they complied with securities laws.
"Both sides in this case can claim victory," said Doug Burns, a
former federal prosecutor, the report further related. "Cohen can
say ?they didn't have the ability to prosecute me individually
because I did nothing wrong.' And the government gets to say this
was a place with a horrid culture and, while the evidence didn't
enable us to prosecute Steve Cohen, we got a very, very sizable
monetary fine out of the culmination of all our efforts."
The criminal case is U.S. v. SAC Capital Advisors LP, 13-cr-00541;
The civil case is U.S. v. SAC Capital Advisors LP, 1:13-cv-5182,
U.S. District Court, Southern District of New York (Manhattan).
* Finra Scrutinizes Banks' Role in Bond Market
----------------------------------------------
Jean Eaglesham, Katy Burne and Justin Baer, writing for The Wall
Street Journal, reported that regulators have stepped up their
scrutiny of the booming bond markets, launching an inquiry into
Wall Street banks' trading profits and expanding a probe into how
new offerings are doled out to investors, according to officials.
The Financial Industry Regulatory Authority, a Wall Street self-
regulator, is taking a broad look at the trading profits of banks
and other middlemen in some bond transactions, according to the
Journal. Finra is crunching through reams of trading data,
looking for instances in which the middlemen have earned unusually
large profits on bond deals, officials said. The inquiry could
lead to a regulatory instruction to the banks to reduce the
spreads between buying and selling prices they charge on certain
trades, or even to enforcement action.
"There might be enforcement action with respect to the outliers,"
Richard Ketchum, Finra's chairman and chief executive, said in an
interview with The Wall Street Journal. "We're certainly looking."
Finra also is investigating how banks apportion hot bond offerings
among investors, Mr. Ketchum said, alongside a previously reported
Securities and Exchange Commission probe, the Journal related.
The Federal Reserve also has been asking large money-management
firms about inefficiencies in the bond markets, said people
familiar with the matter, which hasn't previously been reported,
the Journal further related. Among other things, the inquiry
focuses on investors' troubles buying and selling bonds when
credit markets tumbled in May of last year after the Fed signaled
intentions to wind down its bond buying.
* BOOK REVIEW: The First Junk Bond: A Story of Corporate Boom
and Bust
-------------------------------------------------------------
Author: Harlan D. Platt
Publisher: Beard Books
Softcover: 236 pages
List Price: $34.95
Review by Gail Owens Hoelscher
Order your personal copy today and one for a colleague at
http://www.beardbooks.com/beardbooks/the_first_junk_bond.html
Only one in ten failed businesses is equal to the task of
reorganizing itself and satisfying its prior debts in some
fashion. This engrossing book follows the extraordinary journey
of Texas International, Inc (known by its New York Stock
Exchange stock symbol, TEI), through its corporate growth and
decline, debt exchange offers, and corporate renaissance as
Phoenix Resource Companies, Inc. As Harlan Platt puts it, TEI
"flourished for a brief luminous moment but then crashed to
earth and was consumed." TEI's story features attention-grabbing
characters, petroleum exploration innovations, financial
innovations, and lots of risk taking.
The First Junk Bond was originally published in 1994 and
received solidly favorable reviews. The then-managing director
of High Yield Securities Research and Economics for Merrill
Lynch said that the book "is a richly detailed case study. Platt
integrates corporate history, industry fundamentals, financial
analysis and bankruptcy law on a scale that has rarely, if ever,
been attempted." A retired U.S. Bankruptcy Court judge noted,
"(i)t should appeal as supplementary reading to students in both
business schools and law schools. Even those who practice.in the
areas of business law, accounting and investments can obtain a
greater understanding and perspective of their professional
expertise."
"TEI's saga is noteworthy because of the company's resilience
and ingenuity in coping with the changing environment of the
1980s, its execution of innovative corporate strategies that
were widely imitated and its extraordinary trading history,"
says the author. TEI issued the first junk bond. In 1986 it
achieved the largest percentage gain on the NYSE, and in 1987
suffered the largest percentage loss. It issued one of the first
bonds secured by a physical commodity and then later issued one
of the first PIK (payment in kind) bonds. It was one of the
first vulture investors, to be targeted by vulture investors
later on. Its president was involved in an insider trading
scandal. It innovated strip financing. It engaged in several
workouts to sell off operations and raise cash to reduce debt.
It completed three exchange offers that converted debt in to
equity.
In 1977, TEI, primarily an oil production outfit, had had a
reprieve from bankruptcy through Michael Milken's first ever
junk bond. The fresh capital had allowed TEI to acquire a
controlling interest of Phoenix Resources Company, a part of
King Resources Company. TEI purchased creditors' claims against
King that were subsequently converted into stock under the terms
of King's reorganization plan. Only two years later, cash
deficiencies forced Phoenix to sell off its nonenergy
businesses. Vulture investors tried to buy up outstanding TEI
stock. TEI sold off its own nonenergy businesses, and focused on
oil and gas exploration. An enormous oil discovery in Egypt made
the future look grand. The value of TEI stock soared. Somehow,
however, less than two years later, TEI was in bankruptcy. What
a ride!
All told, the book has 63 tables and 32 figures on all aspects
of TEI's rise, fall, and renaissance. Businesspeople will find
especially absorbing the details of how the company's bankruptcy
filing affected various stakeholders, the bankruptcy negotiation
process, and the alternative post-bankruptcy financial
structures that were considered. Those interested in the oil and
gas industry will find the book a primer on the subject, with an
appendix devoted to exploration and drilling, and another on oil
and gas accounting.
Harlan Platt is professor of Finance at Northeastern University.
He is president of 911RISK, Inc., which specializes in
developing analytical models to predict corporate distress.
*********
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.
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