/raid1/www/Hosts/bankrupt/TCR_Public/140813.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Wednesday, August 13, 2014, Vol. 18, No. 224
Headlines
1250 OCEANSIDE: Reorganization Plan Declared Effective
ALON REFINING: Moody's Withdraws B3 Corporate Family Rating
ALTEGRITY INC: Security Breach No Impact on Moody's Caa2 Rating
ANCHOR BANCORP: Reports $2.61-Mil. Profit in Second Quarter
BERNARD L. MADOFF: Forfeiture Claims May Delay Aides' Sentencing
CABLEVISION SYSTEMS: Fitch Affirms 'BB-' Issuer Default Rating
CAESARS ENTERTAINMENT: To Refinance Debt of Key Subsidiary
CINGULAR INC: Case Summary & 18 Largest Unsecured Creditors
DECISIONPOINT SYSTEMS: Has $19,000 Net Loss in Q2 Ended June 30
DETROIT, MI: Hold-Out Creditor Argues for Dismissal of Ch. 9
DETROIT, MI: Was Insolvent When Bankruptcy Filed, Auditor Says
DETROIT, MI: Syncora Objects to Bankruptcy Plan
DEX MEDIA: Posts Net Loss of $85 Mil. in Second Quarter 2014
DRUG TRANSPORT: Case Summary & 30 Largest Unsecured Creditors
EAGLE BULK SHIPPING: Debt-to-Equity Plan Hearing on Sept. 18
EAGLE BULK SHIPPING: Wins Approval of First Day Motions
EAGLE BULK SHIPPING: Arranges $50MM Loan From Consenting Lenders
EAGLE BULK SHIPPING: U.S. Court Enters Order Enforcing Stay
ENERGY FUTURE: Exclusive Plan Filing Date Extended to Sept. 18
FAIR FINANCE: Convicted CFO Agrees To Pay $1.7M Back to Co.
FIRST AMERICAN PAYMENT: S&P Affirms 'B' CCR; Outlook Stable
GAWK INC: Reports $1.5-Mil. Net Loss for FY Ended Jan. 31
FUTURE HEALTHCARE: Incurs $77K Net Loss for Q2 Ended June 30
GSE ENVIRONMENTAL: Chap. 11 Plan Effective
HALIFAX REGIONAL: Fitch Affirms 'BB' Rating on $13.4MM Bonds
HEALTH REVENUE ASSURANCE: Case Summary & 20 Top Unsec Creditors
HIGH MAINTENANCE: Plan Confirmation Hearing Reset on Aug. 18
HORIZON PHARMA: Posts $27.77-Mil. Net Loss in Second Quarter
HOSPITALITY STAFFING: Given Until Sept. 25 to File Plan
INTERNATIONAL LEASE: Fitch Affirms 'BB+' Sr Unsecured Debt Rating
KANGADIS FOOD: Has Access to Cash Collateral Until Sept. 26
KALEIDOSCOPE CHARTER: S&P Assigns 'BB+' Rating on Revenue Bonds
KINDER MORGAN: Fitch Puts 'BB+' IDR on Rating Watch Positive
KINDER MORGAN: Moody's Puts 'Ba2' CFR on Review for Downgrade
KINDER MORGAN: S&P Affirms 'BB' CCR; Put on CreditWatch Positive
KIOR INC: Warns of Potential Bankruptcy Filing
LIGHTSQUARED INC: Confirmation Hearing on Plans Set for Oct. 20
LOT POLISH: EU Approves $260M Aid For Struggling Airline
LOUISIANA-PACIFIC CORP: S&P Revises Outlook & Affirms 'BB' CCR
MERCY MEDICAL: Fitch Affirms 'BB+' Rating on $70.84MM Rev. Bonds
MILE HIGH GROCERY: Case Summary & 20 Largest Unsecured Creditors
MINERVA NEUROSCIENCES: Incurs $19.37 Net Loss for Second Quarter
MONROE HOSPITAL: Files for Chapter 11 to Sell to Prime Healthcare
MONROE HOSPITAL: Proposes $5-Mil. of DIP Loans From MPT
MONROE HOSPITAL: Taps Upshot Services as Claims & Balloting Agent
MP & ASSOCIATES: Case Summary & Largest Unsecured Creditors
NATCHEZ REGIONAL: Disclosure Statement Hearing on Aug. 26
NII HOLDINGS: Likely to File for Chapter 11 Bankruptcy
PHOENIX PAYMENT: Has Interim OK to Obtain $2.7MM in DIP Loans
PHOENIX PAYMENT: Needs Until Sept. to File Schedules
PHOENIX PAYMENT: Has Interim Authority to Pay Critical Vendors
PHOENIX PAYMENT: Seeks to Employ Richards Layton as Counsel
PROGRESO INDEPENDENT: Fitch Cuts (ULT) Bonds Ratings to 'BB+'
PROXYMED INC: Suit Alleging Shareholder Caused Bankruptcy Is Cut
REVEL AC: To Close After Failing to Find Qualified Buyer
ROME FINANCE: Soldiers' Consumer Debt Cleared In Shutdown
RYERSON HOLDING: S&P Raises Rating on $600MM Sr. Notes to 'B-'
SAGE COLLEGES: Moody's Downgrades Long-term Debt Rating to B3
STERLING TRUST: Los Angeles Clippers Sold to Ballmer
TJ MCGLONE: Withholding Taxes Can't Be Dumped In Bankruptcy
TMT GROUP: CEO Casts $100M IP Suit Over Vessel Sale
TRIPLANET PARTNERS: Claims Bar Date Fixed as Sept. 4, 2014
UNIV OF NORTH CAROLINA: S&P Affirms BB Rating on Obligation Bonds
VIRTUAL PIGGY: Incurs $1.87-Mil. Net Loss in June 30 Quarter
WASHINGTON MUTUAL: Chase Beats Rocker Rundgren's Mortgage Suit
XPO LOGISTICS: Moody's Assigns B1 Rating on $500MM Unsec. Notes
YEP LLC: Voluntary Chapter 11 Case Summary
YMCA OF MILWAUKEE: Wants to Sell Facilities; Hearing on Aug. 19
YMCA OF MILWAUKEE: Taps Equity Partners as Sale Agent
YMCA OF MILWAUKEE: Amends Application to Employ Fox O'Neill
YMCA OF MILWAUKEE: Creditor's Panel Wants Navera as Fin'l Advisor
* BofA Deal Hung Up Over Penalties Tied to Countrywide, Merrill
* Lloyds Bank to Pay $380MM+ Over Rate Manipulation Inquiries
* Lew Can Use Tax Rule to Slow Inversions, Ex-Official Says
* Moody's Tamps Down Concerns About Surge in Auto Loans
* Houlihan Lokey Invests in Bridge Strategy Group
*********
1250 OCEANSIDE: Reorganization Plan Declared Effective
------------------------------------------------------
The effective date of the 1250 Oceanside Partners and its
affiliates' Third Amended Joint Plan of Reorganization filed by
1250 Oceanside Partners and its affiliates is July 1, 2014.
As reported by the Troubled Company Reporter on June 18, 2014,
U.S. Bankruptcy Judge Robert J. Faris confirmed the Plan. The
order is subject to these plan amendments:
a. Sections 1.104 and 5.9 of the Plan are amended to increase
the UCF from $750,000 to $1,550,000.
b. Sections 3.9.2(B), (C), and (D) are deleted, as moot.
c. Sections 5.9 and 8.2 are amended to permit any Class 9, 10,
or 11 creditor to object to the claim of any other 9, 10, or
11 creditor, provided that any such objection is filed
within 60 days of the Effective Date.
A copy of the Disclosure Statement dated Nov. 22, 2013, is
available for free at:
http://bankrupt.com/misc/1250_Sun_Kona_DS_112213.pdf
On June 17, 2014, the Court granted the motion of the Debtor, Sun
Kona Finance I, LLC, Front Nine, LLC, and Pacific Star Company,
LLC, to extend the Plan Effective Date by up to 12 business days
after the June 2, 2014 confirmation order becomes the final order.
Payments to Classes 7 and 8 was set to commence on
July 18, 2014. The Parties sought the extension on
June 11, 2014, for a period not to exceed an additional 10
business days. The Section 9.2 of the Plan provides that the
Effective Date would be the date that is the second business day
after the Confirmation Order becomes a final order. In the
absence of an appeal, the Confirmation Order would become final on
June 16, 2014, and the Effective Date would occur on June 18,
2014.
The Parties stated in a court filing dated June 11, 2014, that
during the course of the proceedings, the Debtor continued
negotiations with the State of Hawaii regarding 36 trail crossing
easements. The easement documents have all been executed by the
Debtor and the State of Hawaii and are presently lodged in escrow.
It was anticipated that the easements would record on June 13,
2014, or early the following week.
Pursuant to the Plan, the Debtor is to be converted from a Hawaii
limited partnership to a Delaware LLC on the Effective Date.
Additionally, as of the Effective Date, the present equity
interest in the reorganization Debtor is to be extinguished and
new equity issued to Sun Kona Properties I.
The Parties stated that for title reasons, it is important that
the Debtor not be converted to the Delaware LLC until after the
easement documents are recorded. Thereafter, the process to
complete the conversion of the Debtor to a Delaware LLC would take
approximately five business days. As a result, given the expected
recordation date for the easements, it wouldn't be possible to
complete the conversion of old Oceanside prior to the current
Effective Date.
On June 19, 2014, G. Rick Robinson, duly appointed administrator
of the Unsecured Creditors' Fund, sought and obtained
authorization from the court to retain the law firm of Klevansky
Piper, LLP, to represent the Administrator.
As set forth in the Plan and Plan Confirmation Order, an Unsecured
Creditors' Fund has been established pursuant to which certain
allowed claims of unsecured creditors will be paid. The
Administrator was appointed as Administrator of the Unsecured
Creditors' Fund.
Simon Klevansky, Esq., a partner at KP, said that the firm doesn't
hold or represent an interest adverse to the Unsecured Creditors'
Fund. KP will apply for compensation for services performed for,
and reimbursement of expenses incurred by the firm on behalf of
the administrator.
On May 30, 2014, the Debtor, Stephen Marotta and Oasis Management
Resources, Inc., and creditors Sun Kona Finance I and Sun Kona
Finance II filed with the Court a stipulation stating that the
June 23, 2014 hearing on the motion of Mr. Marotta and Oasis
Management for relief from the automatic stay, to the extent of
available insurance coverage, should be rescheduled for June 27,
2014, at 10:00 a.m., with opposition memoranda to be due June 13,
2014, and reply memoranda to be due June 20, 2014.
About 1250 Oceanside Partners
1250 Oceanside Partners, Front Nine, LLC, and Pacific Star
Company, LLC, owners of the 1,800-acre Hokuli'a luxury real
estate development near Kona on the island of Hawaii, sought
Chapter 11 protection (Bankr. D. Hawaii Lead Case No. 13-00353)
on March 6, 2013, in Honolulu.
The Debtors were formed by developer Lyle Anderson and were
part of his development "empire", which included developments
in Hawaii, Arizona, New Mexico and Scotland. The secured
lender, Bank of Scotland, declared a default and obtained
control of the Debtors in January 2008.
Development of the property, which has 3.5 miles of waterfront
on the Kona coast, stopped after the developers were declared
in default under the loan. Oceanside and Front Nine own most
of the land within the Hokuli'a project, which is the principal
development. Pacific Star owns the land referred to as
"Keopuka", near Hokuli'a. The Hokuli'a was to have 730
residential units, an 18-hole golf course, club and other
amenities.
The Debtors say their assets are worth $68.1 million while they
are jointly liable to $625 million of debt to Sun Kona Finance
LLC, which acquired the Hawaii loan from Bank of Scotland.
Simon Klevansky, Esq., Alika L. Piper, Esq., and Nicole D.
Stucki, Esq., at Klevansky Piper, LLP, represent the Debtor in
its restructuring effort. They replaced the law firm of Gelber,
Gelber & Ingersoll as general counsel.
A creditors committee has not been appointed.
James A. Wagner, Esq., and Allison A. Ito, Esq., at Wagner Choi &
Verbrugge, represent creditor Sun Kona Finance I, LLC, as counsel.
The Honolulu Star-Advertiser reports that U.S. Bankruptcy Judge
Robert Faris on May 12 confirmed the bankruptcy-exit plan by 1250
Oceanside Partners and two affiliates.
1250 Oceanside Partners on May 12, 2014 won court approval of a
reorganization plan that would turn over ownership to its secured
lender. Sun Kona would provide a $65 million exit facility to
help make payments under the plan and to fund the reorganized
company when it leaves court protection.
ALON REFINING: Moody's Withdraws B3 Corporate Family Rating
-----------------------------------------------------------
Moody's Investors Service has withdrawn all of its ratings for
Alon Refining Krotz Springs, Inc. (ARK). The withdrawals follow
the final redemption of ARK's senior secured notes in July 2014,
whose rating was withdrawn on July 31, 2014.
Ratings Withdrawn:
Issuer: Alon Refining Krotz Springs, Inc.
B3 Corporate Family Rating
B3-PD Probability of Default Rating
Outlook Action:
Stable Outlook Withdrawn
Alon Refining Krotz Springs is wholly-owned by Alon USA Energy,
Inc, Texas. Alon USA Energy, Inc. is headquartered in Dallas,
Texas.
ALTEGRITY INC: Security Breach No Impact on Moody's Caa2 Rating
---------------------------------------------------------------
On August 6, 2014, US Investigations Services (USIS), an operating
subsidiary of Altegrity, Inc (Caa2, Stable outlook) announced that
it had detected unauthorized intrusion of its information
technology infrastructure. As a result, two of its customers, the
U.S. Government Office of Personnel Management (OPM) and the
Department of Homeland Security (DHS) have issued temporary stop-
work orders for work performed by USIS under certain contracts
with those agencies while USIS undergoes its investigation and
mitigation efforts related to the cyber-attack. Moody's believes
that while the suspension of contracts will pressure Altegrity's
already weak liquidity and delay plans to grow earnings to support
its highly leveraged balance sheet, there is no immediate impact
on the ratings.
ANCHOR BANCORP: Reports $2.61-Mil. Profit in Second Quarter
-----------------------------------------------------------
Anchor BanCorp Wisconsin Inc. filed its quarterly report on Form
10-Q, disclosing a net income of $2.61 million on $18.96 million
of total interest income for the three months ended June 30, 2014,
compared with a net loss of $5.38 million on $21.18 million of
total interest income for the same period last year.
The Company's balance sheet at March 31, 2014, showed $2.12
billion in total assets, $1.91 billion in total liabilities and
total stockholders' equity of $211,507.
A copy of the Form 10-Q is available at:
http://is.gd/ui5FHz
About Anchor Bancorp
Madison, Wisconsin-based Anchor BanCorp Wisconsin Inc. sought
protection under Chapter 11 of the Bankruptcy Code on Aug. 12,
2013 (Case No. 13-14003, Bankr. W.D. Wis.) to implement a
"pre-packaged" plan of reorganization in order to facilitate the
restructuring of the Company and the recapitalization of
AnchorBank, fsb, a wholly-owned subsidiary of the Company.
As of March 31, 2013, the Debtor listed total assets of
$2,367,583,000 and total liabilities of $2,427,447,000. Chief
Judge Robert D. Martin oversees the Chapter 11 case. The Debtor
is represented by Kerkman Dunn Sweet DeMarb as lead bankruptcy
counsel and Skadden, Arps, Slate, Meagher & Flom LLP, as special
counsel. CohnReznick LLP serves as the Debtor's financial
advisor.
Anchor BanCorp is a registered savings and loan holding company
incorporated under the laws of the State of Wisconsin. The
Company is engaged in the savings and loan business through its
wholly owned banking subsidiary, AnchorBank, fsb.
Anchor BanCorp and its wholly-owned subsidiaries, AnchorBank FSB,
each consented to the issuance of an Order to Cease and Desist by
the Office of Thrift Supervision. The Corporation and the Bank
continue to diligently work with their financial and professional
advisors in seeking qualified sources of outside capital, and in
achieving compliance with the requirements of the Orders.
In connection with the Plan, the Company has entered into
definitive stock purchase agreements with institutional and other
private investors as part of a $175 million recapitalization of
the institution. No new investor will own in excess of 9.9
percent of the common equity of the recapitalized Holding Company.
The reorganization filing includes only Anchor BanCorp, the
holding company for the Bank, allowing the Bank to remain outside
of bankruptcy and to continue normal operations. The Bank
operates 55 offices throughout Wisconsin. Operations at the Bank
will continue as usual throughout the reorganization process.
Anchor BanCorp Wisconsin Inc. on Aug. 30 disclosed that the
Holding Company has received court approval of its recently
announced plan of reorganization. U.S. Bankruptcy Court Judge
Robert Martin approved the plan at a hearing on Aug. 30.
BERNARD L. MADOFF: Forfeiture Claims May Delay Aides' Sentencing
----------------------------------------------------------------
Law360 reported that the sentencing of five former Bernard L.
Madoff Investment Securities LLC employees convicted of aiding the
Ponzi scheme could be delayed yet again as defense attorneys
dispute the government's $150 billion forfeiture claim, a New York
federal judge said. According to the report, Judge Laura Taylor
Swain said during a Manhattan court hearing that sentencing
hearings for the defendants may be delayed for a third time.
Initially scheduled for July 28-30, the hearings were pushed back
to Sept. 15-17, and then again to Sept. 29-Oct. 1, amid an
avalanche of court filings.
The case is USA v. O'Hara et al., Case No. 1:10-cr-00228
(S.D.N.Y.).
About Bernard L. Madoff
Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff
orchestrated the largest Ponzi scheme in history, with losses
topping US$50 billion. On Dec. 15, 2008, the Honorable Louis A.
Stanton of the U.S. District Court for the Southern District of
New York granted the application of the Securities Investor
Protection Corporation for a decree adjudicating that the
customers of BLMIS are in need of the protection afforded by the
Securities Investor Protection Act of 1970. The District Court's
Protective Order (i) appointed Irving H. Picard, Esq., as trustee
for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP
as his counsel, and (iii) removed the SIPA Liquidation proceeding
to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789)
(Lifland, J.). Mr. Picard has retained AlixPartners LLP as claims
agent.
On April 13, 2009, former BLMIS clients filed an involuntary
Chapter 7 bankruptcy petition against Bernard Madoff (Bankr.
S.D.N.Y. 09-11893). The petitioning creditors -- Blumenthal &
Associates Florida General Partnership, Martin Rappaport
Charitable Remainder Unitrust, Martin Rappaport, Marc Cherno, and
Steven Morganstern -- assert US$64 million in claims against Mr.
Madoff based on the balances contained in the last statements they
got from BLMIS.
On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff
Securities International Limited in London under bankruptcy
protection pursuant to Chapter 15 of the U.S. Bankruptcy Code
(Bankr. S.D. Fla. 09-16751).
The Chapter 15 case was later transferred to Manhattan. In June
2009, Judge Lifland approved the consolidation of the Madoff SIPA
proceedings and the bankruptcy case.
Judge Denny Chin of the U.S. District Court for the Southern
District of New York on June 29, 2009, sentenced Mr. Madoff to
150 years of life imprisonment for defrauding investors in United
States v. Madoff, No. 09-CR-213 (S.D.N.Y.).
From recoveries in lawsuits coupled with money advanced by SIPC,
Mr. Picard has paid about 58 percent of customer claims totaling
$17.3 billion. The most recent distribution was in March 2013.
Mr. Picard has collected about $9.35 billion, not including an
additional $2.2 billion that was forfeit to the government and
likewise will go to customers. Picard is holding almost
$4.4 billion he can't distribute on account of outstanding
appeals and disputes. The largest holdback, almost $2.8 billion,
results from disputed claims.
CABLEVISION SYSTEMS: Fitch Affirms 'BB-' Issuer Default Rating
--------------------------------------------------------------
Fitch Ratings has affirmed the 'BB-' Issuer Default Rating (IDR)
assigned to Cablevision Systems Corporation (CVC) and its wholly
owned subsidiary CSC Holdings, LLC (CSCH). In addition, Fitch has
affirmed specific issue ratings assigned to CSCH and upgraded
CVC's senior unsecured notes to 'B+' as outlined below.
The Rating Outlook for CVC and CSCH's ratings has been revised to
Stable from Negative.
As of June 30, 2014, CVC had approximately $9.9 billion of debt
outstanding on a consolidated basis.
Key Rating Drivers
-- The company's operating strategies and investments, coupled
with pricing actions, have translated into an improving
operating profile as evidenced by expanding cable segment
EBITDA margins and ARPU growth;
-- The Stable Outlook incorporates Fitch's expectation that CVC's
credit profile will continue to strengthen in step with its
improving operating profile and its ability to generate
meaningful levels of free cash flow (FCF);
-- Fitch expects ongoing initiatives and investments to improve
operational efficiency and customer experience, together with
pricing actions, will modestly improve core cable segment
EBITDA margins during the rating horizon, which taken together
with opportunistic debt reduction supports the current ratings;
-- Fitch expects CVC will maintain a conservative approach to
capital allocation as the company's operating profile continues
to strengthen.
The Stable Outlook incorporates Fitch's belief that CVC's credit
profile, while weakly positioned within the current rating, will
continue to strengthen in step with anticipated improvement of its
operating profile. This is the result of its attempts to offset
rising programming and employee compensation costs with price
increases and operational efficiency initiatives aimed at
accelerating revenue growth and improving EBITDA margins. Expected
EBITDA margin improvement coupled with normalizing capital
expenditures will enhance the company's ability to deliver
stronger free cash flow (FCF) metrics during 2014 and resulted in
leverage that is within expectations for the current rating
category.
Programming cost inflation represents a significant and likely
permanent shift in CVC's cost structure. CVC expects high single-
digit programming cost inflation will remain into 2014.
Positively, in addition to ongoing pricing initiatives put in
place during the first half of 2013, CVC's continuing operating
cost initiatives partially offset the cost inflation by driving
costs out of other parts of its cost structure through reducing
the transaction volume of its business and improving operational
efficiencies. These actions have resulted in CVC's LTM EBITDA
margin expanding 307 basis points to 28.9% during second-quarter
2014 (2Q'14) relative to the same period last year, excluding
discontinued operations. The company anticipates tempered EBITDA
growth during the second half of 2014 but expects growth in the
mid-to-high single digits for the full year in 2014. However,
Fitch does not believe that the operating margin of CVC's core
cable segment will return to historical levels and CVC's EBITDA
margins continue to lag its peer group.
CVC anticipates capex will remain elevated at a level similar to
2013. Fitch expects capex priorities will continue to include the
expansion of CVC's Wi-Fi network overlay both in and out of the
home during 2014. Additionally, the company has upgraded its cable
head-ends to facilitate the launch of its Multi-Room DVR service -
CVC's remote storage or cloud-based DVR service. Nonetheless Fitch
anticipates the improvements in CVC's operating profile will allow
the company to offset higher, but stabilizing, capital spending
and enable the company to generate growing levels of FCF during
the rating horizon. Fitch believes CVC's FCF margin will
approximate 3% of revenues as of year-end 2015 and grow to 5% by
year-end 2016.
CVC's financial strategy is centered on opportunistically reducing
debt and improving its credit profile. The company utilized cash
from asset sales and litigation settlements to reduce outstanding
debt and ended 2Q'14 with consolidated leverage of 5.4x, which is
an improvement from 6.0x as of June 30, 2013 (excluding
discontinued operations). Fitch expects initiatives to improve
operational efficiency and ongoing pricing actions will expand
EBITDA margins modestly during 2014 and 2015. The operating
initiatives and debt reduction should strengthen credit protection
metrics. Fitch believes CVC's leverage metric will range between
5.3x and 5.5x at year-end 2014 and approach 5.2x as of year-end
2015.
Fitch considers CVC's liquidity position and overall financial
flexibility to be adequate given the current rating. The company's
liquidity position is supported by cash on hand totaling $907
million as of June 30, 2014 and available borrowing capacity from
CSCH's $1.5 billion revolver expiring April 2018. Fitch expects
CVC's financial flexibility will strengthen in line with its
improving operating profile and FCF generation.
CVC extended its maturity profile and reduced the volume of
maturities between 2014 and 2017 after refinancing its credit
facility in April 2013. The company also reduced its annual term
loan amortization payments after issuing $750 million of senior
notes due 2024 to prepay a portion of its term loan B in May 2014.
Scheduled maturities (excluding collateralized monetization
transactions) consist of $32 million during the remainder of 2014,
$64 million during 2015 and $568 million in 2016.
CVC's conservative posture related to its share repurchase
program, while maintaining a consistent dividend is positive for
the company's credit profile. The company did not repurchase any
shares during 2013 or in the first half of 2014 (versus $188.6
million in 2012). As of June 30, 2014, CVC had $455.3 million of
availability remaining under its stock repurchase program.
The upgrade of CVC's senior unsecured debt is supported by
stronger recovery prospects through an improving credit profile
and a capital structure less reliant on secured debt.
Rating Sensitivities:
Future developments that may, individually or collectively, lead
to a positive rating action include:
-- Further strengthening of the company's credit profile and a
sustained reduction of leverage to below 4.5x;
-- Clear indications that pricing and cost reduction initiatives
are producing desired revenue growth acceleration and EBITDA
margin expansion;
-- Positive FCF generation exceeding 5% of consolidated revenues;
-- FCF as a percentage of adjusted debt with equity credit
exceeding 4%;
-- Cablevision demonstrating that its operating profile will not
materially decline in the face of competition.
Negative ratings actions would likely coincide with:
-- The company's inability to realize the expected benefits of its
operating strategies and strengthen its operating profile.
Specifically, Fitch will be looking for mid-single-digit ARPU
growth, cable segment operating margins returning to the mid
30% range and positive FCF generation;
-- Fitch's belief that CVC's consolidated leverage will remain
above 5.5x in the absence of a clear path to de-lever the
company will likely spur a negative rating action;
-- Although not anticipated in the near term, the re-initiation of
aggressive share repurchases while leverage remains elevated.
Fitch has affirmed the following ratings with a Stable Outlook:
Cablevision Systems Corporation
-- IDR at 'BB-'.
CSC Holdings, LLC
-- IDR at 'BB-';
-- Senior secured credit facility at 'BB+';
-- Senior unsecured debt at 'BB'.
Fitch has upgraded the following ratings:
Cablevision Systems Corporation
-- Senior unsecured debt to 'B+' from 'B-'.
CAESARS ENTERTAINMENT: To Refinance Debt of Key Subsidiary
----------------------------------------------------------
Tess Stynes, writing for The Wall Street Journal, reported that
Caesars Entertainment Corp. said it has reached an agreement to
reduce a key subsidiary's debt by $548.4 million and cut interest
expenses by $34 million a year, which the casino company's chief,
Gary Loveman, said is part of efforts to position the unit for a
potential stock listing.
According to the report, the agreements include plans to purchase
and retire about $237.8 million of Caesars Entertainment Operating
Co.'s debt held by third parties, or about 51% not held by Caesars
affiliates. Caesars also agreed to contribute at least $393
million of the notes to the subsidiary, known as CEOC, for
cancellation, the Journal related.
About Caesars Entertainment
Caesars Entertainment Corp., formerly Harrah's Entertainment Inc.
-- http://www.caesars.com/-- is one of the world's largest casino
companies. 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 in mid-November
2010.
Caesars Entertainment reported a net loss of $2.93 billion in
2013, as compared with a net loss of $1.50 billion in 2012. The
Company's balance sheet at March 31, 2014, showed $24.37 billion
in total assets, $26.65 billion in total liabilities and a $2.27
billion total deficit.
* * *
As reported by the TCR on April 9, 2013, Moody's Investors Service
downgraded Caesars Entertainment Corporation's Corporate Family
Rating to Caa2.
"The downgrade of Caesars' ratings considers that its same store
EBITDA growth in 2012-2013 has failed to materialize to any
significant degree, and so Caesars' credit metrics have
deteriorated and its free cash flow deficit will be higher than
Moody's previous expectations," stated Moody's analyst Peggy
Holloway.
In the April 10, 2014, edition of the TCR, Standard & Poor's
Ratings Services lowered its corporate credit ratings on Las
Vegas-based Caesars Entertainment Corp. (CEC) and wholly owned
subsidiaries, Caesars Entertainment Operating Co. (CEOC) and
Caesars Entertainment Resort Properties (CERP), as well
as the indirectly majority-owned Chester Downs and Marina, to
'CCC-' from 'CCC+'. The downgrade reflects S&P's expectation that
Caesars' capital structure is unsustainable, and the amount of
cash the company will burn in 2014 and 2015 creates conditions
under which S&P believes a restructuring of some form is
increasingly likely over the near term absent an unanticipated
significantly favorable change in operating performance.
As reported by the TCR on May 1, 2014, Fitch Ratings has
downgraded the Issuer Default Ratings (IDRs) of Caesars
Entertainment Corp (CEC) and Caesars Entertainment
Operating Company (CEOC) to 'CC' from 'CCC'.
In the Aug. 4, 2014, edition of the TCR, Fitch Ratings has
upgraded Caesars Entertainment Operating Company. Inc.'s (CEOC)
senior secured credit facility to 'CCC+/RR1' from 'CCC/RR2'
following the finalization of the new guarantee and pledge
agreement. The agreement caps the amount of debt that Caesars
Entertainment Corp (CEC; Caesars, parent) may guarantee at $8.35
billion.
CINGULAR INC: Case Summary & 18 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Cingular, Inc.
110 East Wilshire Avenue
Fullerton, CA 92832
Case No.: 14-14941
Chapter 11 Petition Date: August 11, 2014
Court: United States Bankruptcy Court
Central District Of California (Santa Ana)
Judge: Hon. Scott C Clarkson
Debtor's Counsel: Stephen R Wade, Esq.
THE LAW OFFICES OF STEPHEN R WADE
350 W Fourth St
Claremont, CA 91711
Tel: 909-985-6500
Fax: 909-399-9900
Email: srw@srwadelaw.com
Estimated Assets: $100,000 to $500,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Gabriel Garcia, president and CEO.
A list of the Debtor's 18 largest unsecured creditors is available
for free at http://bankrupt.com/misc/cacb14-14941.pdf
DECISIONPOINT SYSTEMS: Has $19,000 Net Loss in Q2 Ended June 30
---------------------------------------------------------------
DecisionPoint Systems, Inc., filed its quarterly report on Form
10-Q, disclosing a net loss of $19,000 on $16.51 million of net
sales for the three months ended June 30, 2014, compared with a
net loss of $1.12 million on $14.72 million of net sales for the
same period in 2013.
The Company's balance sheet at June 30, 2014, showed $29.24
million in total assets, $30.4 million in total liabilities and a
total stockholders' deficit of $1.16 million.
A copy of the Form 10-Q is available at:
http://is.gd/mEJNle
DecisionPoint Systems, Inc., offers solutions to help individuals
who are on the front line and are in direct contact with customers
of organizations "move decisions closer to the customer." The
Irvine, California-based Company provides those workers with
access to corporate resources, decision support tools and data
capture information systems through mobile business applications.
DETROIT, MI: Hold-Out Creditor Argues for Dismissal of Ch. 9
------------------------------------------------------------
Lisa Lambert, writing for Reuters, reported that Financial
Guaranty Insurance Company, which is one of the biggest hold-out
creditors in Detroit's bankruptcy, plan to argue for a dismissal
of the Chapter 9 case to lead to more equitable treatment of all
the city's creditors. According to the report, Stephen Spencer,
managing director of Houlihan Lokey who was commissioned by FGIC,
said dismissing the case would lead to a more equitable treatment
of all unsecured claims and "force the city to implement a more
comprehensive and effective operational restructuring."
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.
DETROIT, MI: Was Insolvent When Bankruptcy Filed, Auditor Says
--------------------------------------------------------------
Steven Church, writing for Bloomberg News, reported that a so-
called comprehensive annual financial report said Detroit was
insolvent when it filed its record $18 billion municipal
bankruptcy last year, with a deficit of $130 million. According
to the report, city auditor KPMG LLP verified the accuracy of the
CAFR, which state officials received in July after a seven-month
delay.
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.
DETROIT, MI: Syncora Objects to Bankruptcy Plan
-----------------------------------------------
Mary Williams Walsh, writing for The New York Times' DealBook,
reported that Syncora Guarantee filed an objection to the city of
Detroit's plan of debt adjustment and said that the exit strategy
had been tainted by the biases of its chief mediator, whose job it
was to impartially negotiate out-of-court settlements for as many
of the city's outstanding debts as possible. According to the
report, Syncora, a bond insurer that could face millions of
dollars in losses, said that instead of setting his sympathies
aside, the chief mediator, Gerald Rosen, had said several times
that he thought he should get the best outcome possible for the
city's retirees at the expense of other creditors.
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.
DEX MEDIA: Posts Net Loss of $85 Mil. in Second Quarter 2014
------------------------------------------------------------
Dex Media, Inc., one of the largest national providers of social,
local and mobile marketing solutions through direct relationships
with local businesses, on Aug. 11 announced financial results for
the second quarter and six months ending June 30, 2014.
Key highlights in the first half 2014:
Grew digital ad sales by 11.2%
Generated net cash provided by operating activities of $202M
Retired $210M of bank debt
"As our digital ad sales trends indicate, our bundle approach is
clearly resonating with clients. We are transforming this
business into a one-stop shop for local marketing services and are
pleased to report improvement again this quarter," said Peter
McDonald, president and CEO of Dex Media. "We will continue to
focus on the topline, delivering a great experience for our
clients, while closely managing expenses and helping local
businesses grow."
Second Quarter and Six Months Ending June 30, 2014
$ in millions
GAAP Reporting 2Q'14 YTD '14
Operating Revenue $474 $930
Operating Income 5 12
Net (Loss) (85) (167)
Non-GAAP Reporting
Pro forma Operating Revenue1 474 960
Adjusted Pro forma EBITDA1 174 368
Adjusted Pro forma EBITDA margin1 36.7% 38.3%
Advertising Sales2
Print (21.3%) (20.5%)
Digital 12/4% 11.2%
Total (12.5%) (12.6%)
1 These represent non-GAAP measures. Pro forma Operating Revenue
includes Dex One Corporation (Dex One) and SuperMedia Inc.
(SuperMedia), the predecessor companies, operating revenue as if
the merger had occurred prior to 2012 and excludes the impact of
acquisition accounting, as required by U.S. GAAP. Adjusted Pro
forma EBITDA represents earnings before interest; taxes;
depreciation and amortization; and other nonrecurring items,
including adjustments for reorganization items, merger transaction
costs, merger integration costs, severance costs, and post-
employment benefits plan amendments. Adjusted Pro forma EBITDA
includes Dex One and SuperMedia EBITDA as if the merger had
occurred prior to 2012; and excludes the impact of acquisition
accounting, as required by U.S. GAAP. Adjusted Pro forma EBITDA
margin is calculated by dividing Adjusted Pro forma EBITDA by Pro
forma Operating Revenue.
2 Advertising sales is an operating measure which represents the
annual contract value of print directories published and digital
contracts sold.It is important to distinguish advertising sales
from revenue, which under U.S. GAAP are recognized under the
deferral and amortization method. Advertising sales are a leading
indicator of revenue recognition and are presented on a combined
basis, including both former Dex One and former SuperMedia, for
the three months and six months ended June 30, 2014 and 2013.
Cash provided by operations for the six months ended June 30, 2014
was $202 million less $9 million in capital expenditures which
resulted in free cash flow, a non-GAAP measure of $193 million.
The Company had a cash balance of $146 million as of June 30,
2014.
Acquisition Accounting Statement
On April 30, 2013, the merger of Dex One and SuperMedia was
consummated, with 100% of the equity of SuperMedia being exchanged
for equity in Dex Media. The Copany accounted for the business
combination using the acquisition method of accounting, with Dex
One identified as the acquiring entity for accounting purposes.
As a result of the acquisition of SuperMedia, its GAAP results for
the six months ended June 30, 2013 exclude the operating results
of SuperMedia prior to April 2013. Prior to the merger with Dex
One, SuperMedia had deferred revenue and deferred directory costs
on its consolidated balance sheet. These amounts represented
future revenue and cost that would have been amortized by
SuperMedia from May 2013 through April 2014 that was not
recognized by Dex Media. As a result of acquisition accounting,
the fair value of deferred revenue and deferred directory costs
was determined to have no future value, thus were not recognized
in the operating results of Dex Media. The exclusion of these
items from its operating results did not have any impact on the
cash flows of Dex Media.
About Dex Media Inc.
Dex Media, Inc. is a provider of social, local and mobile
marketing solutions for local businesses. The Company provides
marketing solutions that include Websites, print, mobile, search
engine and social media solutions. The Company?s brands include
Dex One and SuperMedia. Through both brands, it delivers a range
of social, mobile, and print solutions. The Company's consumer
services include the Dex Knows.com and Superpages.com online and
mobile search portals and applications and local print
directories. On April 30, 2013, Dex One Corp. and SuperMedia
announced the completion of their merger, creating Dex Media, Inc.
Dex One (DEXO) and SuperMedia (SPMD) in March 2013 sought Chapter
11 bankruptcy protection in order to complete a merger. The
filing was just about three years after each company exited court
protection. The cases are In re Dex One Corp, 13-10533, U.S.
Bankruptcy Court, District of Delaware. and In re SuperMedia Inc,
13-10545, U.S. Bankruptcy Court, District of Delaware.
DRUG TRANSPORT: Case Summary & 30 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor affiliates filing separate Chapter 11 bankruptcy petitions:
Debtor Case No.
------ --------
Drug Transport, Inc. 14-65621
1939 Forge Street
Tucker, GA 30084
DTI Logistics, Inc. 14-65623
1939 Forge Street
Tucker, GA 30084
DB&D Investments, LLC 14-65625
1939 Forge Street
Tucker, GA 30084
Chapter 11 Petition Date: August 11, 2014
Court: United States Bankruptcy Court
Northern District of Georgia (Atlanta)
Judge: Hon. Barbara Ellis-Monro
Debtors' Counsel: James C. Cifelli, Esq.
LAMBERTH, CIFELLI, STOKES, ELLIS & NASON, P.A.
East Tower, Suite 550
3343 Peachtree Road, NE
Atlanta, GA 30326-1022
Tel: (404) 262-7373
Email: jcifelli@lcsenlaw.com
- and -
Gregory D. Ellis, Esq.
LAMBERTH, CIFELLI, STOKES, ELLIS & NASON, P.A.
Suite 550, 3343 Peachtree Road, NE
Atlanta, GA 30326-1022
Tel: (404) 262-7373
Email: emiller@lcsenlaw.com
- and -
William D. Matthews, Esq.
LAMBERTH, CIFELLI, STOKES, ELLIS & NASON, P.A.
East Tower, Suite 550
3343 Peachtree Road, N.E.
Atlanta, GA 30326-1022
Tel: (404) 262-7373
Email: BMatthews@LCSENLaw.com
Estimated Estimated
Assets Liabilities
---------- -----------
Drug Transport, Inc. $1MM-$10MM $10MM-$50MM
DTI Logistics, Inc. $1MM-$10MM $10MM-$50MM
DB&D Investments, LLC $1MM-$10MM $1MM-$10MM
The petition was signed by Bayard Hollingsworth, chief
restructuring officer.
A list of DTI Logistics, Inc.'s 30 largest unsecured creditors is
available for free at http://bankrupt.com/misc/ganb14-65621.pdf
A list of DB&D Investments, LLC's 30 largest unsecured creditors
is available for free at http://bankrupt.com/misc/ganb14-65623.pdf
EAGLE BULK SHIPPING: Debt-to-Equity Plan Hearing on Sept. 18
------------------------------------------------------------
Eagle Bulk Shipping Inc., which sought bankruptcy protection last
week, is slated to seek confirmation of its prepackaged plan of
reorganization and approval of the disclosure statement at a
hearing on Sept. 18, 2014 at 10:00 a.m. The proposed
restructuring under the Plan will deleverage the Debtor's balance
sheet by $975 million.
Parties-in-interest have until Sept. 5, 2014, to file objections
to the adequacy of the information in the Disclosure Statement and
to the confirmation of the Plan.
The scheduling order signed by Judge Sean H. Lane sets forth this
schedule and deadlines:
Date
----
Voting Record Date Jul. 31, 2014
Distribution of Solicitation Package Aug. 6, 2014
Distribution of Combined Notice Aug. 8, 2014
Voting Deadline Aug. 12, 2014
Limited General Bar Date Sep. 2, 2014
Deadline for Filing SALs and SOFAs Sep. 3, 2014
Objection Deadline Sep. 5, 2014
Reply Deadline Sep. 15, 2014
Combined Hearing Sep. 18, 2014
Governmental Bar Date Feb. 2, 2015
Prepetition, the Debtor negotiated with lenders terms of a
consensual restructuring of the Debtor's balance sheet. On Aug.
6, the Debtor and holders of 85% of the outstanding amount under
the prepetition credit facility and constituting more than two
thirds of the lenders under the prepetition credit facility
entered into a restructuring support agreement.
As of the Petition Date, an aggregate amount of not less than
$1,188,847,632 was outstanding under the prepetition credit
facility with lenders led by Wilmington Trust (London) Limited, as
successor agent and security trustee.
The Prepackaged Plan of Reorganization filed by the Debtor on
Aug. 6, 2014, provides for these terms:
(i) Lenders under the prepetition credit facility will receive
99.5% of the new common stock in the Reorganized Debtor (subject
to dilution) through the conversion of a substantial majority of
the $1.2 billion in outstanding debt and certain cash
distributions in satisfaction of the balance of such claims. The
lenders are projected to have a recovery of 64 percent to 71
percent.
(ii) All holders of general unsecured claims will be left
unimpaired pursuant to Section 1124 of the Bankruptcy Code.
Recovery by general unsecured creditors is 100 percent.
(iii) Existing equity holders will receive 0.5% of the new common
stock in the Reorganized Debtor and warrants to acquire an
additional 7.5% of the new common stock (subject to dilution).
Holders of 18,815,213 outstanding shares are expected to have a
recovery of $21.9 million to $27.5 million.
(iv) The Debtor will enter into an exit financing facility
secured by the collateral securing the prepetition credit
facility, the proceeds of which will be used to fund cash
distributions under the Plan and provide working capital for
Eagle's business upon emergence from chapter 11.
The Plan contemplates that the Reorganized Debtor will remain a
listed, public company upon emergence from chapter 11.
In addition to other customary termination rights, Eagle, the
Debtor's board of directors, and/or Eagle's officers may terminate
the RSA in order to comply with their fiduciary obligations --
otherwise known as a "fiduciary out." Although the Debtor cannot
solicit alternative proposals, it may respond to any proposed or
offer for an "alternative transaction" to the extent that the
board of directors determines in good faith, and consistent with
its fiduciary duties, that such a response is necessary. If the
RSA is terminated, the consenting lenders would receive a
termination fee equal to 3.0% of the total outstanding principal
amount of loans held by the consenting lenders.
Milestones
Under the RSA, Eagle is obligated to comply with various
milestones, including:
-- No later than 37 days after the Petition Date, the Court
shall enter the Final DIP Order in a form reasonably acceptable to
EBS and the Majority Consenting Lenders;
-- No later than 37 days after the Petition Date, the Court
shall commence the Joint Disclosure Statement and Plan
Confirmation Hearing;
-- No later than 45 days after the Petition Date, the Court
will enter an order (1) approving the adequacy of the Disclosure
Statement and the Debtor's prepetition solicitation of the
Prepetition Credit Facility Lenders and (2) confirming the Plan;
and
-- No later than 60 days after the Petition Date, the Effective
Date will occur.
A copy of the Prepack Plan is available for free at:
http://bankrupt.com/misc/Eagle_Bulk_Prepack_Plan.pdf
A copy of the Disclosure Statement is available for free at:
http://bankrupt.com/misc/Eagle_Bulk_Plan_Outline.pdf
A copy of the CFO's declaration in support of the first-day
filings is available for free at:
http://bankrupt.com/misc/Eagle_Bulk_1st_Day_Affidavit.pdf
About Eagle Bulk Shipping
With headquarters in New York, Eagle Bulk Shipping Inc. (Nasdaq:
EGLE) claims to be a leading provider of ocean-borne
transportation services for a broad range of major and minor "dry
bulk" cargoes, including iron ore, coal, grain, cement, and
fertilizer, along worldwide shipping routes. Each of Eagle's 45
vessels is flagged in the Marshall Islands and owned by a separate
wholly-owned subsidiary organized as a limited liability company
under the Marshall Islands.
On Aug. 6, 2014, Eagle Bulk entered into a restructuring support
agreement with certain of its lenders regarding the terms of a
balance sheet restructuring that will reduce debt by $975 million.
To implement the restructuring, Eagle Bulk, the parent company,
commenced a voluntary "prepackaged" chapter 11 case (Bankr.
S.D.N.Y. Case No. No. 14-12303). The case has been assigned to
the Honorable Sean H. Lane. The Chapter 11 filing does not
include any of Eagle Bulk's operating or management subsidiaries.
The Company estimated $850 million to $950 million in assets and
debt of $1.21 billion as of the Petition Date.
The Company has tapped Milbank, Tweed, Hadley & McCloy LLP as
general bankruptcy counsel, Moelis & Company as financial advisor
and investment banking advisor, Alvarez & Marsal as restructuring
advisors, and PricewaterhouseCoopers LLP as its accountant and
auditor. Eagle Bulk's noticing agent is Kurtzman Carson
Consultants.
EAGLE BULK SHIPPING: Wins Approval of First Day Motions
-------------------------------------------------------
Eagle Bulk Shipping Inc. has received approval on a series of
"first day" motions in connection with its recently commenced
prepackaged restructuring.
According to the company, the Court's approval will help ensure
that Eagle Bulk continues to conduct all global business
activities in the normal course throughout the restructuring
process.
Key financial and operational elements of the now-approved first
day motions include authority to, among other things:
* Pay amounts owed to the Company's vendors, suppliers, and
business partners;
* Honor all customer arrangements in the ordinary course of
business; and,
* Pay the wages, salaries, and other compensation of the
Company's crew members, employees, and independent contractors.
The Court has also granted interim approval of up to $50 million
of postpetition financing, which will significantly enhance Eagle
Bulk's liquidity and help further support the key operational
priorities identified above.
"The Court's approval of Eagle Bulk's first day motions is an
important initial step in the restructuring process that allows us
to continue normal operations around the globe, including paying
crew members, employees, independent contractors, vendors,
suppliers, and business partners," said Sophocles N. Zoullas,
Eagle Bulk's Chairman and Chief Executive Officer. "These
assurances, together with access to significant new liquidity,
further ensure our uninterrupted focus on operational excellence
and customer service while we pursue an accelerated balance sheet
restructuring process."
Eagle Bulk has entered into a Restructuring Support Agreement with
certain lenders regarding the terms of a balance sheet
restructuring that will strengthen Eagle Bulk's financial
position, reduce its debt obligations by approximately $975
million, and significantly enhance its liquidity. As of August
7th, the Company has already received affirmative votes for the
Plan from lenders holding more than 85% of the loans outstanding
under its credit agreement, constituting more than two-thirds of
the total lenders thereunder, amounts sufficient under applicable
law for the Court to confirm the Plan.
About Eagle Bulk Shipping
With headquarters in New York, Eagle Bulk Shipping Inc. (Nasdaq:
EGLE) claims to be a leading provider of ocean-borne
transportation services for a broad range of major and minor "dry
bulk" cargoes, including iron ore, coal, grain, cement, and
fertilizer, along worldwide shipping routes. Each of Eagle's 45
vessels is flagged in the Marshall Islands and owned by a separate
wholly-owned subsidiary organized as a limited liability company
under the Marshall Islands.
On Aug. 6, 2014, Eagle Bulk entered into a restructuring support
agreement with certain of its lenders regarding the terms of a
balance sheet restructuring that will reduce debt by $975 million.
To implement the restructuring, Eagle Bulk, the parent company,
commenced a voluntary "prepackaged" chapter 11 case (Bankr.
S.D.N.Y. Case No. No. 14-12303). The case has been assigned to
the Honorable Sean H. Lane. The Chapter 11 filing does not
include any of Eagle Bulk's operating or management subsidiaries.
The Company estimated $850 million to $950 million in assets and
debt of $1.21 billion as of the Petition Date.
The Company has tapped Milbank, Tweed, Hadley & McCloy LLP as
general bankruptcy counsel, Moelis & Company as financial advisor
and investment banking advisor, Alvarez & Marsal as restructuring
advisors, and PricewaterhouseCoopers LLP as its accountant and
auditor. Eagle Bulk's noticing agent is Kurtzman Carson
Consultants.
EAGLE BULK SHIPPING: Arranges $50MM Loan From Consenting Lenders
----------------------------------------------------------------
Eagle Bulk Shipping Inc., is seeking approval from the bankruptcy
court to obtain a senior secured superpriority debtor-in-
possession term loan facility in an aggregate principal amount of
up to $50 million from certain prepetition secured lenders who
have consented to the terms of the Debtor's prepackaged plan.
Absent access to the DIP Facility and the use of cash collateral,
the Debtor will be unable to operate its business and administer
the Chapter 11 case, which would threaten the Debtor's going
concern value.
The DIP Facility will provide the Debtor with immediate access to
$25 million in postpetition financing, which the Debtor and its
advisors have independently determined is sufficient and necessary
to allow the Debtor to maintain its operations and its
relationships with key constituents notwithstanding the
commencement of the Chapter 11 Case.
In addition, another $25 million of the DIP facility will be made
available to the Debtor as a delayed draw occurring after the
entry of an order approving the DIP Facility on a final basis if
Eagle's cash balance level falls below $15 million.
The Debtor will be the borrower under the DIP Facility, which will
be guaranteed by each of the non-debtor subsidiaries. Interest
rate on the DIP facility is LIBOR+500 bps (with 1.0% LIBOR floor)
per annum. Default interest rate is equal to the applicable rate
plus 2.0 percent per annum.
Furthermore, the DIP Facility contemplates that the Debtor will be
able to use cash collateral, which will maintain the Debtor's
ability to access liquidity in the same accounts as prior to the
Petition Date, without the disruption or delay that would result
if the Debtor was required to set aside that cash and re-fund its
accounts with new postpetition borrowings.
Under the DIP Facility, the Debtor is required to, among other
things, obtain entry of the Interim DIP Order within 5 business
days of the Petition Date, obtain entry of the Final DIP Order
within 37 days of the Petition Date, obtain entry of the
Confirmation Order within 45 days of the Petition Date, and
consummate the Plan within 60 days of the Petition Date.
Moreover, under the DIP Facility, the Court must commence the
Joint Disclosure Statement and Plan Confirmation Hearing within 37
days of the Petition Date.
The DIP facility will mature nine months from the Petition Date,
provided that it may be extended for an additional three months at
the option of the Debtor so long as no default will have occurred
and the Debtor will have paid an extension fee.
About Eagle Bulk Shipping
With headquarters in New York, Eagle Bulk Shipping Inc. (Nasdaq:
EGLE) claims to be a leading provider of ocean-borne
transportation services for a broad range of major and minor "dry
bulk" cargoes, including iron ore, coal, grain, cement, and
fertilizer, along worldwide shipping routes. Each of Eagle's 45
vessels is flagged in the Marshall Islands and owned by a separate
wholly-owned subsidiary organized as a limited liability company
under the Marshall Islands.
On Aug. 6, 2014, Eagle Bulk entered into a restructuring support
agreement with certain of its lenders regarding the terms of a
balance sheet restructuring that will reduce debt by $975 million.
To implement the restructuring, Eagle Bulk, the parent company,
commenced a voluntary "prepackaged" chapter 11 case (Bankr.
S.D.N.Y. Case No. No. 14-12303). The case has been assigned to
the Honorable Sean H. Lane. The Chapter 11 filing does not
include any of Eagle Bulk's operating or management subsidiaries.
The Company estimated $850 million to $950 million in assets and
debt of $1.21 billion as of the Petition Date.
The Company has tapped Milbank, Tweed, Hadley & McCloy LLP as
general bankruptcy counsel, Moelis & Company as financial advisor
and investment banking advisor, Alvarez & Marsal as restructuring
advisors, and PricewaterhouseCoopers LLP as its accountant and
auditor. Eagle Bulk's noticing agent is Kurtzman Carson
Consultants.
EAGLE BULK SHIPPING: U.S. Court Enters Order Enforcing Stay
-----------------------------------------------------------
Given the global nature of its shipping business, Eagle Bulk
Shipping Inc., regularly transacts with vendors and suppliers of
goods and services located outside the United States. These
foreign creditors and counterparties are not likely to be familiar
with the Bankruptcy Code, particularly with respect to the various
protections it affords to chapter 11 debtors, including the
automatic stay. As such, the Debtor believes there is risk that
certain foreign creditors and counterparties will not adhere to,
or respect, the automatic stay or the orders of a court in the
United States. Any such act by a foreign creditor or counterparty
in contravention of the Bankruptcy Code could cause a severe
disruption to Eagle?s ability to operate its businesses, which
depends on the ability to travel without hindrance or delay
through international waters and transact in hundreds of foreign
ports of call. Accordingly, the Debtor sought and obtained entry
of an order by the U.S. Bankruptcy Court enforcing and restating
the automatic stay and ipso facto provisions of the Bankruptcy
Code.
About Eagle Bulk Shipping
With headquarters in New York, Eagle Bulk Shipping Inc. (Nasdaq:
EGLE) claims to be a leading provider of ocean-borne
transportation services for a broad range of major and minor "dry
bulk" cargoes, including iron ore, coal, grain, cement, and
fertilizer, along worldwide shipping routes. Each of Eagle's 45
vessels is flagged in the Marshall Islands and owned by a separate
wholly-owned subsidiary organized as a limited liability company
under the Marshall Islands.
On Aug. 6, 2014, Eagle Bulk entered into a restructuring support
agreement with certain of its lenders regarding the terms of a
balance sheet restructuring that will reduce debt by $975 million.
To implement the restructuring, Eagle Bulk, the parent company,
commenced a voluntary "prepackaged" chapter 11 case (Bankr.
S.D.N.Y. Case No. No. 14-12303). The case has been assigned to
the Honorable Sean H. Lane. The Chapter 11 filing does not
include any of Eagle Bulk's operating or management subsidiaries.
The Company estimated $850 million to $950 million in assets and
debt of $1.21 billion as of the Petition Date.
The Company has tapped Milbank, Tweed, Hadley & McCloy LLP as
general bankruptcy counsel, Moelis & Company as financial advisor
and investment banking advisor, Alvarez & Marsal as restructuring
advisors, and PricewaterhouseCoopers LLP as its accountant and
auditor. Eagle Bulk's noticing agent is Kurtzman Carson
Consultants.
ENERGY FUTURE: Exclusive Plan Filing Date Extended to Sept. 18
--------------------------------------------------------------
Judge Christopher S. Sontchi of the U.S. Bankruptcy Court for the
District of Delaware issued a bridge order extending the exclusive
periods during which only Energy Future Holdings Corp. and its
debtor affiliates may file a Chapter 11 plan and solicit
acceptances of that plan.
Until the time a final order is entered by the Court, the Debtors'
exclusive period to file a Chapter 11 plan is extended through and
including Sept. 18, 2014, and the exclusive period to solicit
acceptances of that plan is extended through and including
Nov. 18.
The hearing on the Debtors' extension motion will be held on Sept.
16, at 11:00 a.m. (Eastern Daylight Time). Objections are due
Sept. 5. If no objections are filed to the motion, the Court may
enter the final order without further notice or hearing.
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.
An Official Committee of Unsecured Creditors has been appointed in
the case. The Committee represents the interests of the unsecured
creditors of ONLY of Energy Future Competitive Holdings Company
LLC; EFCH's direct subsidiary, Texas Competitive Electric Holdings
Company LLC; and EFH Corporate Services Company, and of no other
debtors. The Committee has selected Morrison & Foerster LLP and
Polsinelli PC for representation in this high-profile energy
restructuring. The lawyers working on the case are James M. Peck,
Esq., Brett H. Miller, Esq., and Lorenzo Marinuzzi, Esq., at
Morrison & Foerster LLP; and Christopher A. Ward, Esq., Justin K.
Edelson, Esq., Shanti M. Katona, Esq., and Edward Fox, Esq., at
Polsinelli PC.
FAIR FINANCE: Convicted CFO Agrees To Pay $1.7M Back to Co.
-----------------------------------------------------------
Law360 reported that the former chief financial officer of
bankrupt Fair Finance Co., currently serving a 10-year prison
sentence, has agreed to pay $1.76 million to the company's
bankruptcy trustee after participating in a $200 million scam
involving the CEO of movie company National Lampoon Inc.
According to the report, ex-CFO Rick Snow will pay $1.763 million,
the parties said. U.S. District Judge Patricia Gaughan signed off
on the deal, which FFC bankruptcy trustee Brian Bash initially
requested court approval of in a June filing in the related
bankruptcy case.
The case is Snow v. Bash, Case No. 5:12-cv-00980 (N.D. Ohio).
About Fair Finance
Akron, Ohio-based investment company Fair Finance Co. was closed
following a November 2009 raid by the U.S. Federal Bureau of
Investigation. Fair Finance's owner, Indiana businessman Timothy
S. Durham, a Republican political contributor whose holdings
include National Lampoon Inc., has been targeted in lawsuits and
investigations over claims he funded a luxurious lifestyle with
the proceeds of a Ponzi scheme.
Three creditors -- Nick Spada, Jacques Dunaway, and Robert Ripley
-- filed on Feb. 8, 2010, a petition to send Fair Finance to
Chapter 7 liquidation (Bankr. N.D. Oh. Case No. 10-50494). David
Mucklow, Esq., serves as counsel to the petitioners. Brian Bash
was appointed bankruptcy trustee.
A motion to appoint a trustee filed by the petitioning creditors
said that Mr. Durham and co-owner James Cochran took $176 million
in loans transferred from the investment fund into Fair Holdings
LLC and DC Investments LLC. They used the money to fund
$220 million in other loans, according to the filing.
FIRST AMERICAN PAYMENT: S&P Affirms 'B' CCR; Outlook Stable
-----------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B' corporate
credit rating on Fort Worth, Texas-based First American Payment
Systems L.P. (FAPS). The outlook remains stable.
At the same time, S&P raised the issue-level ratings on FAPS'
first-lien credit facilities to 'B+' from 'B' and revised the
recovery ratings to '2' from '3' as a result of the recent debt
reduction. The '2' recovery rating indicates S&P's expectation
for substantial recovery (70%-90%) in a payment default scenario.
The 'CCC+' issue-level and '6' recovery ratings on the company's
second-lien credit facility remain unchanged. The '6' recovery
rating indicates S&P's expectation for negligible recovery (0%-
10%) in a payment default scenario.
"The stable outlook reflects our expectation that FAPS'
diversified sales channels and largely fixed-cost structure will
allow it to maintain fairly stable revenues and profitability
levels over the coming year," said Standard & Poor's credit
analyst Jenny Chang.
S&P could lower the rating if increased competition or economic
weakness results in increased attrition or lower transaction
volume, causing deteriorating operating performance, with leverage
sustained in the mid-7x area. Large debt-financed dividend
payments or acquisitions that increase leverage to such a level
could also result in a downgrade.
While not likely over the next 12 months, S&P could raise the
rating, if the company can reduce and sustain leverage below 5x
due to a combination of debt repayment and EBITDA growth.
GAWK INC: Reports $1.5-Mil. Net Loss for FY Ended Jan. 31
---------------------------------------------------------
Gawk Incorporated reported a net loss of $1.5 million on $1,572 of
revenue for the fiscal year ended Jan. 31, 2014, compared with a
net loss of $28,454 on $22,684 of revenue in 2013.
The Company's balance sheet at Jan. 31, 2014, showed $1.03 million
in total assets, $1.77 million in total liabilities and a total
stockholders' deficit of $740,349.
The auditor's report of Malone Bailey LLP on the company's
financial statements contains explanatory language that
substantial doubt exists about our ability to continue as a going
concern. Malone Bailey notes that that Gawk has suffered
recurring losses from operations and has a net capital deficiency
that raises substantial doubt about its ability to continue as a
going concern.
"We have an accumulated deficit at January 31, 2014 of $1,526,907
and need additional cash flows to maintain our operations. We
depend on the continued need to raise financing to finance our
operations and need to obtain additional funding sources to
explore potential strategic relationships and to provide capital
and other resources for the further development and marketing of
our products and business. We expect our cash needs for the next
12 months to be $450,000 to fund our operations and further
$350,000 to development of our website platform. The ability of
the Company to continue its operations is dependent on the
successful execution of management?s plans, which include
expectations of raiding debt or equity based capital until such
time that funds from operations are sufficient to fund working
capital requirements. The Company may need to incur additional
liabilities with related parties to sustain the Company?s
existence. There is no assurance that such funding, if required
will be available to us or, if available, will be available upon
terms favorable to us," the Company said in its Form 10-K.
A copy of the Form 10-K filed with the U.S. Securities and
Exchange Commission is available at:
http://is.gd/vBRih2
Gawk Incorporated, a development stage company, focuses on the
online distribution of digital content. It intends to distribute
full length feature films, television series, sports,
documentaries, and live events through its proprietary content
distribution network. The company was incorporated in 2011 and is
based in Los Angeles, California.
FUTURE HEALTHCARE: Incurs $77K Net Loss for Q2 Ended June 30
------------------------------------------------------------
Future Healthcare of America filed its quarterly report on Form
10-Q, disclosing a net loss of $77,348 on $872,087 of total
revenue for the three months ended June 30, 2014, compared with a
net income of $53,830 on $1.08 million of total revenue for the
same period in 2013.
The Company's balance sheet at June 30, 2014, showed $1.99
million in total assets, $988,934 in total liabilities and total
stockholders' equity of $1 million.
A copy of the Form 10-Q is available at:
http://is.gd/b4TnDz
Future Healthcare of America, through its subsidiary, Interim
Healthcare of Wyoming, Inc., provides home healthcare and
healthcare staffing services in Wyoming and Montana, the United
States. The company offers home care services, including senior
care and pediatric nursing; and physical, occupational, and speech
therapy through registered nurses, therapists, LPN's, and
certified home health aides. It also provides nurses, nurse
aides, and management services to hospitals, prisons, schools,
corporations, and other health care facilities. The company was
founded in 1991 and is based in Palm Beach, Florida.
GSE ENVIRONMENTAL: Chap. 11 Plan Effective
------------------------------------------
GSE Environmental, Inc., et al., notified the U.S. Bankruptcy
Court for the District of Delaware that the Effective Date, as
defined in the Modified Joint Plan of Reorganization, occurred on
August 11, 2014. The Bankruptcy Court confirmed the Plan on
July 23.
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.
Cantor Fitzgerald Securities as agent for a consortium of DIP
lenders is represented by Nathan Z. Plotkin, Esq., at Shipman &
Goodwin LLP, in Hartford, Connecticut. The DIP Lenders are
represented by Scott K. Charles, Esq., Emily D. Johnson, Esq., and
and Neil K. Chatani, Esq., at Wachtell, Lipton, Rosen & Katz, in
New York. The local Delaware counsel to the DIP Lenders and the
DIP Agent is Russell C. Silberglied, Esq., at Richards, Layton &
Finger, P.A., in Wilmington, Delaware.
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 on July 28 disclosed that it has received
confirmation of its Plan of Reorganization from the Bankruptcy
Court for the District of Delaware. The Plan received full
support from all of the Company's major stakeholders.
HALIFAX REGIONAL: Fitch Affirms 'BB' Rating on $13.4MM Bonds
------------------------------------------------------------
Fitch Ratings has affirmed the 'BB' rating on North Carolina
Medical Care Commission bonds issued on behalf of Halifax Regional
Medical Center (HRMC):
-- $13.4 million series 1998.
The Rating Outlook is revised to Positive from Stable.
HRMC has an additional $6.5 million in direct placement bonds
which Fitch does not rate.
SECURITY
The bonds are secured by a pledge of gross receipts, a negative
mortgage lien, and a debt service reserve.
Key Rating Drivers
Relationship With Novant: The Outlook revision to positive
reflects the benefits being realized from HRMC's new relationship
with Novant Health (revs rated 'AA-'/Stable Outlook by Fitch).
Following a one year management agreement effective March 2014,
HRMC is in the midst of the due diligence phase of a likely merger
with Novant Health. It is Fitch's expectation that this strategic
partnership will continue to provide both operational and
financial benefits to HRMC.
Low Debt Burden: HRMC's light debt burden allows for healthy debt
service coverage at its rating level despite light operating cash
flow. No additional debt is planned, and HRMC's capital
reinvestment in recent years has allowed for a stable average age
of plant equal to 11.8 years as of fiscal 2013.
Stable Balance Sheet: HRMC's liquidity levels provide for some
cushion against its operating performance, and related metrics are
favorable for the rating category. In addition, consistent
improvement in receivables is clear, with days in A/R falling to
44.8 in fiscal 2013, from 59.4 in fiscal 2009.
Mixed Service Area Characteristics: While HRMC's long-standing
position as a sole community hospital and market share leader is a
significant credit strength, the service area's overall
socioeconomic profile is generally unfavorable. HRMC is exposed to
a high level of government/self-pay revenues, equal to 73% of its
gross revenues in 2013.
Rating Sensitivities
Stable Financial Performance: It is Fitch's expectation that HRMC
will sustain its current financial profile over the near to medium
term, supported by its relationship with a larger system. Upward
rating pressure is likely should HRMC sustain current levels of
performance over the next 12-24 months.
Credit Profile
HRMC is a 204 licensed-bed community medical center providing
primary and secondary care services. The medical center is located
in Roanoke Rapids, approximately 75 miles northeast of
Raleigh. The system also includes approximately 60 physicians
within a medical group and a foundation. In fiscal 2013 (Sept. 30
year-end) HRMC had $89.9 million in total operating revenue.
Relationship With Novant
Following over a year of searching, HRMC has identified Novant
Health as its partner. In December 2013, HRMC announced its intent
to merge with Novant, following a one-year management agreement
and due diligence period. Following department of justice
approval, Fitch anticipates that HRMC will be folded into the
Novant system sometime in late 2014 or early 2015.
Fitch views this management agreement and proposed merger
positively, as it has begun to provide HRMC with strong system
supports in management, strategic direction, and improved
operating performance. Should the merger be executed as expected,
it could provide HRMC with up to $35 million in capital commitment
from Novant over five years.
Profitability Sufficient For Debt
Despite a light operating EBITDA of 4.3% at fiscal 2013, HRMC
covered MADS by same at 1.8x in fiscal 2013. Fitch believes the
management agreement executed in March with Novant has already
begun producing operating benefits to HRMC, as evidenced by an
improved operating EBITDA of 8.9% and coverage of 3.5x through the
June 2014 interim period.
Offsetting this improvement is HRMC's ongoing reliance on
approximately $5 million in Medicaid supplemental payments. This
poses some concern, as the long-term viability of Medicaid
reimbursement is uncertain beyond 2014. Additionally, HRMC has
some difficulty retaining a consistent medical staff complement
due to its rural location, which has led to some volume
fluctuations impacting profitability.
Still, through June 30, 2014 HRMC produced a solid 3% operating
margin, ahead of its breakeven budget. Capital expenditures are
estimated near $4 million, or just above 100% of depreciation
expense.
Balance Sheet Steady
With $22.4 million in unrestricted cash at June 30, 2014 HRMC had
105.3 days of cash on hand (DCOH) and 115.1% cash to debt, both
solid for the rating level. A light debt burden is evidenced by
debt to capitalization of 38.4% at June 30 2014, which helps
offset HRMC's light and sometimes variable cash flow.
Total debt equaled $19.5 million, which is 100% fixed rate.
Approximately $6.5 million of that debt is directly placed with
BB&T and has a seven-year term with options to renew. Per its
indenture, HRMC covered maximum annual debt service (MADS) of
approximately $1.7 million by 3.2x at June 30, 2014.
Disclosure
Disclosure to Fitch has been adequate with quarterly disclosure,
although only audited annual disclosure is required in the bond
documents. HRMC provides disclosure upon request to other third
parties. Fitch notes that quarterly disclosure includes a balance
sheet and income statements; however, a statement of cash flows
and management discussion and analysis is not provided.
HEALTH REVENUE ASSURANCE: Case Summary & 20 Top Unsec Creditors
---------------------------------------------------------------
Debtor: Health Revenue Assurance Associates, Inc.
8551 W. Sunrise Blvd, Suite 304
Plantation, FL 33322
Case No.: 14-28030
Chapter 11 Petition Date: August 11, 2014
Court: United States Bankruptcy Court
Southern District of Florida (Fort Lauderdale)
Judge: Hon. Raymond B Ray
Debtor's Counsel: Bradley S Shraiberg, Esq.
SHRAIBERG, FERRARA, & LANDAU P.A.
2385 NW Executive Center Dr. #300
Boca Raton, FL 33431
Tel: (561) 443-0801
Fax: (561) 998-0047
Email: bshraiberg@sfl-pa.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Todd Willis, CEO.
A list of the Debtor's 20 largest unsecured creditors is available
for free at http://bankrupt.com/misc/flsb14-28030.pdf
HIGH MAINTENANCE: Plan Confirmation Hearing Reset on Aug. 18
------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas has
reset the hearing on Aug. 18, 2014, at 9:00 a.m. to consider the
confirmation of High Maintenance Broadcasting LLC's Chapter 11
plan.
The Confirmation Hearing was previously scheduled for Aug. 11,
2014, at 9:00 a.m. As reported by the Troubled Company Reporter
on Aug. 8, 2014, the hearing was supposed to take place on
July 30 but the Debtor proposed to delay the hearing to give the
Court enough time to rule on the objection of a group of
noteholders to Fred Hoffmann's claim. The noteholders, HMB's
largest creditors, have reportedly indicated that they would drop
their objection to the Plan if their objection to the claim of Mr.
Hoffman, insider and creditor of the company, is resolved in their
favor.
The Debtor's exclusive period to confirm its Plan has been
extended to Sept. 15 as a result of the delay of the Confirmation
Hearing.
About High Maintenance Broadcasting and
GH Broadcasting
High Maintenance Broadcasting LLC owns and operates full power
television station KUQI-TV (Channel 38), which is licensed in
Corpus Christi, Texas, and is primarily affiliated with the Fox TV
network. It also owns the FCC license to operate the station as
well as domain name kuquitv.com. GH Broadcasting Inc. owns and
operates two lower-power TV broadcast stations KXPX (Channel 14)
and KTOV (Channel 21), which are licensed in Corpus Christi, as
well as related equipment and FCC licenses for those stations.
On June 17, 2013, an involuntary petition for relief (Bankr.
S.D. Tex. Case No. 13-20270) was filed against High Maintenance by
Robert Behar, Estrella Behar, Leibowitz Family, Pedro Dupouy,
Latin Capital, Pan Atlantic Bank & Trust, Ltd., Sumit Enterprises,
LLC, Jose Rodriguez, Leon Perez, Jays Four, LLC, Benjamin J.
Jesselson, Jesselson Grandchildren, Joseph Kavana, Sawicki Family,
Shpilberg Mgmt, Saby Behar Rev, Morris Bailey pursuant to section
303 of the Bankruptcy Code.
An involuntary petition under Chapter 11 of the U.S. Bankruptcy
Code was also filed against GH Broadcasting, Inc., on July 2,
2013. GH Broadcasting owns and operates television broadcast
stations KXPX CA and KTOV LP, which are licensed in Corpus
Christi, Texas.
On July 24, 2013, the Debtors filed responses to the involuntary
petition, in which they assented to the entry of an order for
relief. The Court entered on July 25, 2013, consensual orders for
relief in each of the Debtors' cases. On Aug. 1, 2013, the Court
entered an order for the joint administration of the cases.
The Debtors' counsel are Patrick J. Neligan Jr., Esq., and John D.
Gaither, Esq., at Neligan Foley LLP.
The noteholders include Robert Behar, Estrella Behar, Leibowitz
Family Broadcasting, LLC, Lermont Trading, Ltd., and Jays Four,
LLC. The noteholders are represented by Ronald A. Simank, Esq.,
at Schauer & Simank, P.C.
HORIZON PHARMA: Posts $27.77-Mil. Net Loss in Second Quarter
------------------------------------------------------------
Horizon Pharma, Inc., filed its quarterly report on Form 10-Q,
disclosing a net loss of $27.77 million on $66.06 million of net
sales for the three months ended June 30, 2014, compared with a
net loss of $18.44 million on $11.13 million of net sales for the
same period last year.
The Company's balance sheet at June 30, 2014, showed $328.36
million in total assets, $247.69 million in total liabilities and
total stockholders' equity of $80.67 million.
A copy of the Form 10-Q is available at:
http://is.gd/VYqEHu
Deerfield, Ill.-based Horizon Pharma, Inc. (NASDAQ: HZNP) is a
specialty pharmaceutical company that has developed and is
commercializing DUEXIS and RAYOS/LODOTRA, both of which target
unmet therapeutic needs in arthritis, pain and inflammatory
diseases.
HOSPITALITY STAFFING: Given Until Sept. 25 to File Plan
-------------------------------------------------------
Judge Brendan Linehan Shannon of the U.S. Bankruptcy Court for the
District of Delaware extended until Sept. 25, 2014, the period in
which Hospital Liquidation I, LLC, f/k/a HSS Holding, LLC, and its
debtor affiliates have the exclusive right to file a Chapter 11
plan, and until Nov. 20 the period in which the Debtors have the
exclusive right to solicit acceptances of the Chapter 11 plan.
About Hospitality Staffing Solutions
Hospitality Staffing Solutions, LLC (HSS) --
http://www.hssstaffing.com-- is a hospitality staffing company.
Established in 1990, the company's team of hotel industry experts
works with 4 and 5 star properties in 35 states and 62 markets
across the country.
Hospitality Staffing Solutions and various affiliates filed
voluntary Chapter 11 petitions (Bankr. D. Del. Lead Case No.
13-12740) on Oct. 24, 2013, before Judge Brendan Linehan Shannon.
The Debtors are represented by Mark Minuti, Esq., at Saul Ewing
LLP, in Wilmington, Delaware; and Jeffrey C. Hampton, Esq.,
Monique Bair DiSabatino, Esq., and Ryan B. White, Esq., at Saul
Ewing LLP, in Philadelphia, Pennsylvania. The Debtors' financial
advisor is Conway Mackenzie, Inc., and their investment banker is
Duff & Phelps Corp. Epiq Systems, Inc., is the Debtors' claims
and noticing agent. HSS Holding disclosed assets of undetermined
amount and liabilities of $22,910,994.
The investor group is providing DIP financing. They are
represented by Scott K. Charles, Esq., and Neil M. Snyder, Esq.,
at Wachtell, Lipton, Rosen & Katz, in New York; and Derek C.
Abbott, Esq., at Morris, Nichols, Arsht & Tunnell LLP, in
Wilmington, Delaware.
Roberta A. DeAngelis, U.S. Trustee for Region 3, has notified the
Bankruptcy Court that she was unable to appoint a committee of
unsecured creditors in the Debtors' cases as there was
insufficient response to the U.S. Trustee communication/contact
for service on the committee.
The Debtors filed for bankruptcy to facilitate a sale of the
business to HS Solutions Corporation, an entity formed by LJC
Investments I, LLC and a group of investors including Littlejohn
Opportunities Master Fund, L.P., Caymus Equity Partners and
Management, and SG Distressed Debt Fund LP. The investor group
acquired $22.9 million of the secured bank debt on Oct. 11, 2013.
That debt is in default.
The asset purchase agreement with HS Solutions was approved by the
Court on Dec. 13, 2013. The sale closed on Jan. 24, 2014.
INTERNATIONAL LEASE: Fitch Affirms 'BB+' Sr Unsecured Debt Rating
-----------------------------------------------------------------
Fitch Ratings has completed a peer review of three rated aircraft
lessors, resulting in the affirmation of the long-term Issuer
Default Ratings (IDRs) of AerCap Holdings N.V. (AER, 'BB+'),
Aviation Capital Group Corp. (ACG, 'BBB-') and BOC Aviation Pte
Ltd (BOC Aviation, 'A-'). The Outlooks remain Stable. Company-
specific rating rationales are described below.
The aircraft leasing sector has experienced another year of strong
performance, which has been characterized by strong airline
industry fundamentals, favorable credit markets, improving lease
rates and consolidation among lessors. Profitability in the
airline industry has continued to improve this year, which has
resulted in a lack of significant credit issues among the lessors.
Aircraft financing has become more plentiful with increasing
investor appetite and the securitization market re-emerging. This
favorable environment has attracted new competition from a variety
of sources, both global and regional in nature. As the industry
has grown, the market has become more segmented with numerous
strategies and value propositions. Among the challenges aircraft
lessors will need to navigate over the coming years are industry
cyclicality, competitive pressures on underwriting standards,
large aircraft order books, residual value risk associated with
older model planes, and rising interest rates.
The aviation cycle has the tendency to change direction rapidly
and remains highly sensitive to exogenous shocks. While lessors
have proven to be more resilient than airlines due to their
ability to redeploy aircraft, Fitch's ratings on the sector are
constrained by its singular focus on aircraft assets and reliance
on wholesale funding markets. The lack of price transparency for
aircraft makes it more difficult to analyze the residual values of
lessors' fleets. Therefore, shareholders' equity is susceptible to
impairments, particularly for lessors with older and less
frequently traded portfolios.
Supply of new aircraft has become more constrained, as
manufacturers have seen strong new order activity from both
lessors and airlines and accumulated record backlogs. Orders being
placed at the upper point in the cycle naturally tend to be more
expensive, which increases the risk that these aircraft will not
meet their long-term return hurdles and increase residual risk.
For the most popular narrow-body models, order books of eight to
nine years today compare with six to eight years in the mid-2000s
and just three to five years in the early 2000s.
The secondary market for aircraft has also heated up, with a
number of new entrants, including Business Development Companies,
insurance companies and private equity firms. Operating lessors
should stand to benefit from this development, particularly those
that strive to maintain young fleets by selling older aircraft as
they take delivery of new equipment. However, it is important to
note that secondary market liquidity is also driven by narrow
funding spreads and could dry up relatively quickly.
AerCap's acquisition of International Lease Finance Corp (ILFC),
which closed in May 2014, was an important and positive industry
development for several reasons. The transaction represented what
is expected to be the last transfer of a large fleet of leased
aircraft, following RBS's sale of its aircraft leasing business to
Sumitomo in 2012 and CIT's re-emergence from bankruptcy in 2009.
In Fitch's view, material consolidation in the industry is now
complete, with two large players (AerCap and GECAS) controlling
close to half of all lessor-owned aircraft globally. Additionally,
the increase in the sector's market capitalization has increased
investor visibility and should lead to improved access to capital
markets for other aircraft lessors. There have been several IPO
filings in recent months, including Avolon and China Aircraft
Leasing Co.
AerCap Holdings N.V.
Key Rating Drivers -- IDRs
The affirmation of AerCap's Long-term IDR of 'BB+' is supported by
the recently expanded scale of the company's franchise, robust
funding and liquidity profile, and strong management team. The
ratings are constrained by increased balance sheet leverage,
execution and integration risk associated with the ILFC
acquisition, recent change in strategic direction and the
increased fleet age. AerCap's recent acquisition of ILFC was
transformative and fundamentally changed the company's risk
profile and strategic direction.
AerCap's balance sheet leverage has increased materially,
primarily as a result of the assumption of ILFC's existing debt
and acquisition-related purchase accounting. Therefore, AerCap's
credit profile has initially become riskier, but Fitch expects it
to improve over time as the acquisition is integrated and equity
is built up through retained earnings. The 'BB+' rating is
supported by the company's plans to maintain a conservative
capital policy with a targeted debt-to-equity ratio (as reported)
of approximately 3.0x. Fitch believes the combined business offers
fairly good visibility into future earnings and operating cash
flows, which underpins the company's de-leveraging plan.
Fitch believes that the best measure of financial leverage for the
combined company is tangible debt-to-tangible equity. This measure
adjusts for certain accounting assets and liabilities that will be
created as a result of purchase accounting, and is more reflective
of the economic value of the balance sheet than the reported debt-
to-equity ratio. Some of the adjustments include the fair value
(FV) adjustment to ILFC's debt, the FV of the order book, and the
lease premium. According to Fitch's estimates, the tangible debt-
to-tangible equity ratio was 5.1x as of March 31, 2014, higher
than the reported pro forma leverage figure of 4.5x. However, the
two measures are expected to converge as the purchase accounting
adjustments get accreted over time.
The acquisition requires significant integration efforts, which
will continue to consume meaningful time and effort of AerCap's
senior management team. In Fitch's view, the acquisition brings a
significant amount of integration and execution risk as AerCap
transfers ILFC's fleet and ILFC's staff onto AerCap's platform.
These risks are mitigated to some extent by AerCap's scalable
operating platform (including its interest in AerData), the
relatively small number of employees at ILFC, overlapping
locations of regional offices, and prior ownership of the
AeroTurbine platform which has been reacquired as part of the
transaction.
Fitch believes that the acquisition has resulted in a significant
shift to AerCap's current business strategy. The size of the fleet
has increased dramatically to approximately 1,200 aircraft from
238 as of March 31, 2014; and its average age has increased by
roughly two years, to over seven years from 5.6 years as of March
31, 2014. Historically, AerCap's strategy focused on newer
aircraft, a modest fleet size and a moderate order book supported
by a predominantly secured funding profile.
With the acquisition of ILFC, AerCap has become the owner of one
of the largest order books in the industry. Fitch recognizes that
ILFC's orders represent some of the most in-demand aircraft in the
market and were placed at attractive prices and delivery slots.
However, the long-term nature of the commitments creates a
liability that may need to be funded at a time when capital is not
readily available. Furthermore, given the cyclical nature of the
aviation market and continual technological advances, the
contracted purchase price of the aircraft could potentially exceed
the market value on the delivery date.
Despite the concerns cited above, Fitch believes that the
acquisition offers potential long-term strategic benefits for both
AerCap's and ILFC's creditors. The economics of the combined
business have remained intact, with no immediate impact to lease
cash flows and a relatively modest increase in the debt balance to
fund the cash portion of the purchase price. AerCap expects to
reap significant tax benefits by re-domiciling the vast majority
of ILFC's assets to Ireland and transferring ILFC's large deferred
tax liability to AIG.
AerCap's post-acquisition liquidity position stands at
approximately $6 billion, composed of $2 billion in unrestricted
cash and $4 billion of undrawn revolver availability, as of March
31, 2014. The company plans to maintain a liquidity buffer
(including cash flow from operations, unrestricted cash and
undrawn revolvers) at 120% of debt maturities and capital
expenditures over the next 12 months. Fitch views this as an
appropriate liquidity framework given AerCap's significant
purchase commitments and debt maturities.
KEY RATING DRIVERS -- AerCap & ILFC Senior Unsecured Debt
The equalization of the unsecured debt with the IDR reflects
material unsecured debt, as a portion of total debt, as well as
strong unencumbered asset coverage of unencumbered debt. The
acquisition of ILFC has significantly expanded AerCap's access to
unsecured funding, which now represents approximately 60% of total
debt. Furthermore, AerCap has acquired a large pool of
unencumbered aircraft, which will provide support to unsecured
creditors going forward.
KEY RATING DRIVERS -- AerCap & ILFC Senior Secured Debt
AerCap's and ILFC's senior secured debt ratings of 'BBB-' are one-
notch above the long-term IDR, and reflect the aircraft collateral
backing these obligations.
The ratings assigned to the senior secured debt issued by Flying
Fortress, Inc. and Delos Finance SARL, both wholly owned
subsidiaries of ILFC, are equalized with the IDR of ILFC. This
debt is secured via a pledge of stock of the subsidiaries and
related affiliates and is guaranteed by ILFC on a senior unsecured
basis. The ratings on these secured term loans are not notched
above ILFC's IDR due to the lack of a perfected first priority
claim on aircraft provided to support repayment of the term loan.
Furthermore, there is a risk of substantive consolidation of
Flying Fortress, Inc., Delos Finance SARL and related affiliates
in the event of an ILFC bankruptcy.
Key Rating Drivers -- ILFC Hybrid Debt
The rating of 'B+' reflects a three-notch differential between the
long-term IDR and preferred stock rating. This is consistent with
Fitch's 'Treatment and Notching of Hybrids in Non-Financial
Corporate and REIT Credit Analysis' criteria published on Dec. 23,
2013.
Rating Sensitivities -- AerCap & ILFC IDRs, Senior Unsecured Debt,
Senior Secured Debt and Hybrid Debt
Fitch believes positive rating momentum is possible over the
longer term as AerCap continues to execute on the plan outlined at
the time of the ILFC acquisition. More specifically, successful
integration of ILFC's fleet and staff, a reduction of balance
sheet leverage as outlined by the company, maintenance of robust
liquidity, and improvement in the fleet profile are viewed as
positive rating drivers. Fitch will also assess AerCap's ability
to effectively manage the average age and composition of its
fleet. Positive rating momentum could stall if AerCap runs into
any meaningful integration issues, if dividends or share
repurchase activity are reinstituted before deleveraging plans are
completed, or if there is a material downturn in the aviation
sector, which negatively impacts its business.
Downside risks to AerCap's ratings will be elevated until the
acquisition is fully integrated and leverage is reduced. Negative
rating actions could result from significant integration issues,
loss of key airline relationships, deterioration in financial
performance and/or operating cash flows, higher than expected
repossession activity and/or difficulty re-leasing aircraft at
economical rates. Longer term, aggressive capital management, a
reduction in available liquidity or inability to maintain or
improve the fleet profile could also lead to negative rating
pressure.
Aviation Capital Group Corp.:
KEY RATING DRIVERS -- IDR and Senior Debt
The affirmation of the IDR and unsecured debt ratings at 'BBB-'
and the Stable Outlook reflect ACG's solid franchise, attractive
aircraft portfolio, consistent operating cash flow generation,
solid liquidity, diverse funding profile and Fitch's assessment of
the ownership by and strategic relationship with Pacific Life
Insurance Company (PLIC, IDR rated 'A') and its parent Pacific
LifeCorp (PLC, IDR rated 'A-'). Fitch also views the recent
improvement in ACG's unsecured funding profile and unencumbered
asset coverage favorably, as they provide additional financial
flexibility.
Lease revenues grew 11.5% in 2013 to $736 million compared to $660
million in 2012, reflecting ACG's continued portfolio growth
offset by a modest decline in net margin, which fell to 7.2% in
2013 compared to 7.3% in 2012. Operating performance has remained
relatively flat over the same period, as pre-tax earnings
increased 3.3% to $62 million in 2013 compared to $60 million in
2012, reflecting increased maintenance and operating costs
resulting from portfolio growth. Net income of $76 million, on an
adjusted basis, was 22.6% higher in 2013 compared to $62 million
in 2012. Net income in 2012 accounts for a one-time basis
adjustment to ACG's deferred tax asset valuation allowance related
to aircraft depreciation, which reduced the provisions for income
taxes during the year. Including this adjustment, reported net
income would have been $119 million in 2012. Fitch expects medium-
to long-term profitability to improve along with net margins as
the new aircraft portfolio seasons.
ACG's aircraft portfolio remains attractive and broadly used by
airlines, which provides stable cash flow generation that
minimizes the impact of market volatility throughout economic and
market cycles. The portfolio is composed predominately of B737 and
A320 families, with a weighted average age of around six years, as
of March 31, 2014. Approximately 76% of the portfolio is younger
than 10 years, by net book value. Currently, ACG has 133 aircraft
on order with deliveries scheduled through 2021. Given ACG's fleet
strategy of investing in young, primarily narrowbody aircraft with
broad customer appeal, Fitch expects the portfolio will remain
relatively consistent over the near- to medium-term.
Fitch views ACG's liquidity profile as solid, and the company is
well positioned to support ongoing aircraft funding requirements.
As of March 31, 2014, the company had over $1.1 billion of
liquidity, which included $39.2 million of unrestricted cash
balances and $1.1 billion of available borrowing capacity under
its credit facilities provided by a syndicate of global banks. In
addition, ACG generates between $300 million to $500 million of
annual cash flows from operations, which is also used to support
portfolio growth and to manage debt maturities. The debt profile
is well laddered with the next maturity coming due in 2016.
In addition, ACG has made significant progress in diversifying its
capital structure and broadening its capital markets access and
other funding sources. In third quarter 2013, ACG completed a
three-year, $600 million 144A bond transaction at attractive
terms. With the recent issuance, ACG's unsecured debt has grown to
nearly 56% of total debt, which is viewed favorably by Fitch. The
ratings of the senior unsecured notes are equalized with the IDR
of ACG, reflecting sufficient level of available collateral to
support average recoveries in a stressed scenario.
Balance sheet leverage, measured by total debt-to-equity, improved
to 3.5x as of March 31, 2014 from a range of 4.0-4.5x over the
last several years, as a result of retained earnings growth and a
capital injection of $150 million by ACG's parent, PLIC, in March
2014. Fitch expects leverage will remain around 3.5x to 4.0x over
the medium term, which is consistent with its current ratings, as
modest retained earnings generation and amortization of ACG's
securitization debt may offset increases in debt levels to fund
new aircraft purchases.
Fitch considers ACG's standalone credit profile to be reflective
of a 'BB+' rating without institutional support. Based on the
'Rating FI Subsidiaries and Holding Companies' criteria, Fitch
views ACG's business as having limited importance to PLC's overall
operations due to limited financial and operating synergies, as
well as lack of common branding. This suggests that future support
may be uncertain, particularly in a stress scenario. That said,
Fitch believes PLC maintains a high level of commitment to ACG, as
evidenced by PLIC's recent capital injection, as well as the
continued ownership of 100% of ACG's equity, which amounted to
$1.56 billion of invested capital to date. Consequently, ACG's
long-term IDR receives a one-notch uplift from the standalone
rating due to PLIC's direct ownership and demonstrated financial
support.
Rating Sensitivities -- IDR and Senior Debt
Positive rating momentum for ACG could be driven by management's
commitment to manage leverage below 3.5x in conjunction with
improved profitability over the medium- to longer-term, while
maintaining an attractive aircraft portfolio, consistent cash flow
generation, sufficient liquidity, and diversity of funding.
Positive rating actions could also be driven by more explicit
forms of parent support from PLIC.
Conversely, negative rating actions could be driven by an
unwillingness or inability of PLIC to provide timely support to
ACG. Significant deterioration in operating performance, a
material decline in operating cash flow generation resulting from
a significant weakening of sector or economic conditions, or a
material increase in balance sheet leverage over and above the
historical range could also result in negative rating actions.
The ratings of the senior unsecured notes are sensitive to changes
in ACG's IDR, as well as the level of unencumbered balance sheet
assets in a stressed scenario, relative to outstanding debt.
BOC Aviation Pte Ltd:
Key Rating Drivers
The affirmation of BOC Aviation's IDR and senior unsecured debt
rating of 'A-' reflect Fitch's continued expectation of a very
high probability of extraordinary support to BOC Aviation from its
ultimate parent, Bank of China (BOC; 'A', Stable Outlook), if
required. This view is based on BOC Aviation's strategic
importance to and strong links with BOC, which is evident in the
shared brand name, 100% ownership and close board oversight by
BOC, cross-selling potential, forthcoming resources, and strong
reporting links despite the issuer's small size relative to its
parent and their different domiciles.
BOC has committed a standby liquidity line of $2 billion, which is
considerable relative to BOC Aviation's assets of $10.2 billion at
end-December 2013. This is on top of the $300 million of common
equity injection by BOC since it took over BOC Aviation in 2006.
At end-December 2013, BOC Aviation had $1 billion in drawn
committed long-term loan facilities with BOC and BOC (Hong Kong)
Limited.
The aircraft leasing company is one of the few wholly-owned
subsidiaries within the BOC group that reports directly to BOC's
management. Eight of BOC Aviation's 10 board members are BOC
representatives, with a high-ranking officer of BOC appointed as
chairman. These internal arrangements underscore the strategic
importance of BOC Aviation to BOC, even though the former
accounted for only about 0.4% of BOC's consolidated assets. Cross-
selling initiatives center on BOC Aviation assisting BOC in
originating relationships with airlines and aircraft
manufacturers. This supports BOC's aim of diversifying its non-
interest income base and to move into non-commercial banking
businesses.
Fitch views BOC Aviation's standalone financial profile without
any institutional support to be reflective of a 'BB+' rating. This
reflects BOC Aviation's consistent track record, young fleet age,
solid lessee quality and an experienced management team. BOC
Aviation has consistently reported one of the highest ROAs among
its rated peers. This is due to its active fleet quality
management, aircraft collections and procurement, as well as low
funding costs. Fitch views as positive BOC Aviation's demonstrated
ability to trade aircraft through the cycle, as shown by its
ability to continually keep the average age of its portfolio at
around four years.
BOC Aviation has a moderately higher appetite for leverage and
reliance on bank borrowings compared to its peers. Changes in
Fitch's view of BOC Aviation's standalone financial profile would
be likely to take into account BOC Aviation's future leverage
appetite, funding diversity and/or risk appetite in terms of
lessee quality and growth ambitions.
Rating Sensitivities
Any perceived changes in BOC's propensity and ability to provide
support would affect BOC Aviation's IDR and senior unsecured debt
rating. Any changes in BOC's IDR would also have a direct impact
on BOC Aviation's IDR. However, a change in BOC Aviation's
standalone risk profile is unlikely to directly impact its IDR,
unless support factors that drive its IDR were to change.
Fitch has affirmed the following ratings:
AerCap Holdings N.V.
-- Long-term IDR at 'BB+'; Rating Outlook Stable.
AerCap Ireland Capital Limited
AerCap Global Aviation Trust
AerCap Aviation Solutions B.V.
-- Senior unsecured debt rating 'BB+'.
International Lease Finance Corp.
-- Long-term IDR at 'BB+', Outlook Stable;
-- $3.9 billion senior secured notes at 'BBB-';
-- Senior unsecured debt at 'BB+';
-- Preferred stock at 'B+'.
Flying Fortress Inc.
-- Senior secured debt at 'BB+'.
Delos Finance SARL
-- Senior secured debt at 'BB+'.
ILFC E-Capital Trust I
-- Preferred stock at 'B+'.
ILFC E-Capital Trust II
-- Preferred stock at 'B+'
AerCap B.V.
AerCap Dutch Aircraft Leasing I B.V.
AerCap Dutch Aircraft leasing IV B.V.
AerCap Dutch Aircraft Leasing VII B.V.
AerCap Engine Leasing Limited
AerCap Ireland Limited
AerCap Partners 767 Limited
AerCap Partners I Limited
AerFunding 1 Limited
AerVenture Leasing 1 Limited
Cielo Funding Limited
Flotlease MSN 973 Limited
Genesis Portfolio Funding 1 Limited
GLS Atlantic Alpha Limited
Harmonic Aircraft Leasing Limited
Harmony Funding BV
Melodic Aircraft Leasing Limited
Parilease / Jasmine Aircraft Leasing Limited
Philharmonic Aircraft Leasing Limited
Rouge Aircraft Leasing Limited
Sapa Aircraft Leasing 2 BV
Sapa Aircraft Leasing BV
Skyfunding II Limited
SkyFunding Limited
Symphonic Aircraft Leasing Limited
Triple Eight Aircraft Leasing Limited
Wahaflot Leasing 3699 (Bermuda) Limited
Westpark 1 Aircraft Leasing Limited
Worldwide Aircraft Leasing Limited
-- Senior secured bank debt at 'BBB-'.
Aviation Capital Group Corp.:
-- Long-term IDR at 'BBB-'; Rating Outlook Stable;
-- Senior unsecured debt rating at 'BBB-'.
BOC Aviation Pte Ltd:
-- Long-term IDR at 'A-', Outlook Stable;
-- Senior unsecured debt rating at 'A-'.
Fitch has assigned ratings to senior secured debt obligations of
the following AER subsidiaries:
AerLift Leasing Jet Limited
Bluesky Aircraft Leasing Limited
CelestialFunding Limited
Cielo Funding II Limited
Limelight Funding Limited
Monophonic Aircraft Leasing Limited
Quadrant MSN 5869 Limited
Renaissance Aircraft Leasing Limited
SoraFunding Limited
Sunflower Leasing Co., Ltd
Tulip Leasing Co., Ltd.
Polyphonic Aircraft Leasing Limited
-- Senior secured bank debt 'BBB-'
KANGADIS FOOD: Has Access to Cash Collateral Until Sept. 26
-----------------------------------------------------------
The Bankruptcy Court has authorized Kangadis Food Inc. to use cash
collateral until Sept. 26, 2014. As adequate protection for any
diminution in Citibank N.A.'s collateral, the bank will receive a
"superpriority administrative expense claim" as well as a "valid
perfected and enforceable security interests" on all of Kangadis
assets. Kangadis owed the bank $3.5 million, plus interests, as
of the time of filing of its bankruptcy case.
Formed in 2003, Kangadis Food Inc. is an importer of olives and
other European delicacies, and a leading distributor of olive oil.
The Debtor sells its products under the brand names "Capatriti,"
"Porto," "Olio Villa," "Zorba," and "Kivotos". The company is
100% owned by the Kangadis family. The company says that for the
past six years, the popularity of its olive oil product sold under
the brand name "Capatriti" has grown over time, and it is one of
the leading brands in the New York metropolitan area.
About Kangadis Food
Formed in 2003, Kangadis Food Inc. is an importer of olives and
other European delicacies, and a leading distributor of olive oil.
The Debtor sells its products under the brand names "Capatriti,"
"Porto," "Olio Villa," "Zorba," and "Kivotos". The company is
100% owned by the Kangadis family. The company says that for the
past six years, the popularity of its olive oil product sold under
the brand name "Capatriti" has grown over time, and it is one of
the leading brands in the New York metropolitan area.
As of its bankruptcy filing, Kangadis Food employs 51 people, and
operates from a 75,000 square foot facility located in Hauppauge,
New York, that serves as a warehouse, production facility, and
shipping center.
Kangadis Food Inc. filed a Chapter 11 bankruptcy petition (Bankr.
E.D.N.Y. Case No. 8-14-72649) in the Central Islip division, in
New York, on June 6, 2014. Themistoklis Kangadis signed the
petition as chief executive officer.
As of the Dec. 31, 2013, the Debtor, on an unaudited basis, had
total assets of $12,259,802 and total liabilities of $6,136,456,
which amount does not include any disputed claim relating to the
class action.
Judge Robert E. Grossman presides over the case. Silverman
Acampora LLP, in Jericho, New York, serves as the Debtor's
counsel.
KALEIDOSCOPE CHARTER: S&P Assigns 'BB+' Rating on Revenue Bonds
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB+' long-term
rating to Otsego, Minn.'s series 2014A charter school lease
revenue bonds and series 2014B taxable charter school lease
revenue bonds issued for the Kaleidoscope Charter School project.
The outlook is stable.
"The rating reflects our view of the school's past management of
debt and recent addition of some high school grades with the use
of modulars on campus, offset by the twofold increase in the
school's debt and the high postissuance debt burden," said
Standard & Poor's credit analyst Carlotta Mills.
Currently, the school has $8.2 million of debt outstanding that
was issued in 2007 for its current facility. This issuance will
refund this debt and add another $7.7 million for the buildout of
the campus for a high school. The project includes classrooms, a
media center, cafeteria, and multipurpose space. Also included
are about $575,000 of capitalized interest, cost of issuance, and
a debt service reserve fund.
KINDER MORGAN: Fitch Puts 'BB+' IDR on Rating Watch Positive
------------------------------------------------------------
Fitch Ratings has placed Kinder Morgan Inc.'s Issuer Default
Rating (IDR) of 'BB+' on Rating Watch Positive following the
announcement that it will acquire all of the outstanding equity
securities of Kinder Morgan Energy Partners, L.P. (KMP), Kinder
Morgan Management, LLC (KMR) and El Paso Pipeline Partners, L.P.
(EPB). Fitch has also placed KMP and select Fitch-rated pipeline
operating subsidiaries of KMP and EPB on Rating Watch Negative.
Fitch has not taken any action on its ratings for El Paso Pipeline
Partners Operating Company (EPO; IDR: 'BBB-'/Stable Outlook).
Fitch expects to consolidate ratings of KMI and its affiliates at
a 'BBB-' IDR.
Under the proposed acquisition, KMP unitholders will receive
2.1931 KMI shares and $10.77 in cash for each KMP unit. KMR
shareholders will receive 2.4849 KMI shares for each share of KMR.
EPB unitholders will receive .9451 KMI shares and $4.65 in cash
for each EPB unit. Both KMP and EPB unitholders will be able to
elect cash or KMI stock consideration subject to proration. KMI
has secured committed financing for the cash portion of the
transaction. The deal is valued at roughly $70 billion inclusive
of $27 billion in assumed debt at the operating subsidiaries.
Importantly, the Kinder Morgan companies will put in place cross
guarantees among and between the Kinder Morgan entities (with
limited exceptions) to be effective on closing of the transaction
in order to create a single creditor class and eliminate
structural subordination. The cross guarantees are expected to be
absolute and unconditional between the entities and any
refinancing of maturing notes would be done at the KMI level over
time (excepting some pipeline debt which would remain at the
pipelines for rate-making purposes but stay cross guaranteed).
With the cross guarantees expected to extend from and to every
majority owned, rated issuing entity within the Kinder Morgan
family Fitch expects to consolidated ratings at the 'BBB-' level
given the elevated leverage that the combined entities are
targeting as a go forward run rate. Additionally, Fitch also
expects to assign a 'F3' short-term IDR and commercial paper
rating to KMI. Fitch would notch all existing preferred and
subordinated ratings accordingly two notches below the IDR at 'BB'
consistent with current separation between IDR and subordinated
notes/preferred shares.
The KMI Rating Watch Positive reflects the expected uplift
associated with the removal of the structural subordination as
well as the strong cash flow and operating diversity of its asset
base. KMI's size and scale should continue to provide economies of
scale and favorable capital market access. At the subsidiary
levels, the Rating Watch Negative is reflective of the cross
guarantees coupled with the high leverage reflecting what in most
cases is a somewhat weaker credit profile than KMP and the
majority of the pipelines are rated absent the explicit
guarantees.
The mergers are subject to regulatory approvals and a shareholder
vote. Fitch will resolve its rating watches at or near merger
completion expected in the fourth quarter of 2014 (4Q'14).
Key Ratings Drivers
Simplified Structure: The roll-up of entities into one single
creditor class simplifies the corporate structure and provides
meaningful benefits to KMI's credit profile, in particular, by
doing away with the structural subordination that limited KMI's
ratings to a notching below its operating subsidiaries.
Strong Asset Profile: The combined entity will continue be one of
the largest and most important energy companies in the U.S. with
significant positions in 'must-run' assets that support national
energy infrastructure. KMI as a combined entity is currently the
largest transporter of petroleum products in the nation and the
largest transporter of natural gas. Its asset base touches all of
the major supply and demand areas for oil, oil products, NGLs and
natural gas in the country. The combined entity is expected to
have an enterprise value in excess of $130 billion and over $8
billion in EBITDA. Over 90% of consolidated cash flows are
currently fee based or hedged and this will remain the case for
the combined entity (82% fee based; 94% fee base + hedged for
2014) providing comfort around cash flow and earnings stability.
High Leverage: Leverage at the consolidated entity is to be high
with a targeted range of between 5.0x to 5.5x debt/EBITDA on a
sustained basis. Relative to 'BBB-' rated midstream entities,
leverage in the 5.0x to 5.5x debt/EBITDA range and EBITDA interest
coverage in the 3.0x to 4.0x is more consistent with a sub-
investment grade rating. However, KMI's asset size, scale and cash
flow profile is relatively unique and much more reflective of an
investment grade profile offsetting concerns around the high
leverage targets. Fitch expects that a combined KMI as the largest
midstream company and third largest energy company in the country
would have significant operational advantages and capital market
access advantages and more than adequate liquidity.
Adequate Cash Flow Generation: KMI is expected to generate
significant free cash flow before dividends and maintain a 1.1x
dividend coverage ratio on average over the next six years even
with a 10% growth rate on dividends paid out to shareholders.
Fitch expects the combined entity to maintain adequate liquidity
facilities and a growth capital funding policy consistent with the
maintenance of leverage in the stated 5.0x to 5.5x range. Fitch
recognizes that in the near term leverage metrics will be slightly
above this range largely due to ongoing construction projects.
Guarantees Warrant Consolidated Approach: The cross guarantees are
assumed to be absolute and unconditional between the entities and
any refinancing of maturing notes would be done at the KMI level
over time (excepting some pipeline debt which would remain at the
pipelines for rate-making purposes but remain cross guaranteed).
With the cross guarantees expected to extend from and to every
significant EBITDA-generating rated issuing entity within the
Kinder Morgan family Fitch expects its ultimate ratings will
reflect a consolidated ratings approach which equalizes the
outstanding ratings at the ratings level for KMI which is expected
at 'BBB-/F3'.
Removal of Structural Subordination: All of the operating cash
flow of the entities would be available to KMI to fund operations,
reduce debt and or pay dividends; this helps to alleviate
structural subordination at KMI. Dividends would be targeted at a
10% growth rate and company would be able to retain excess cash to
help fund part of its growth capital program, which was not
practically possible at its MLPs given the increasing pressure to
meet incentive distributions particularly at KMP which has long
been in its 50/50 splits.
Ratings Sensitivities
Potential future triggers for additional rating action may
include:
Positive: Future developments that may, individually or
collectively, lead to positive rating action include:
-- A meaningful reduction in leverage, with debt/adjusted EBITDA
between 4.5x - 5.0x on a sustained basis.
Negative: Future developments that may, individually or
collectively, lead to a negative rating action include:
-- A significant change in cash flow stability profile or current
hedging practices. A move away from current significant
majority of assets being fee based or hedged could lead to a
negative ratings action.
-- Failure to manage leverage to the stated 5.0x to 5.5x on a
sustained basis. Fitch notes that leverage in near term will
be slightly above 5.5x as several large scale construction
projects get built but metrics are expected to be below 6.0x
and are expected to improve to the target range as projects
are completed.
Fitch has placed the following Ratings on Rating Watch Positive:
Kinder Morgan, Inc. (KMI)
-- IDR at 'BB+';
-- Unsecured notes and debentures at 'BB+';
-- Unsecured revolving credit facility at 'BB+';
-- Term loan facility at 'BB+'.
Kinder Morgan Finance Company, LLC
-- Unsecured notes at 'BB+'.
KN Capital Trust I
-- Trust preferred at 'BB-'.
KN Capital Trust III
-- Trust preferred at 'BB-'
Fitch has placed the following Ratings on Rating Watch Negative:
Kinder Morgan Energy Partners, L.P. (KMP)
-- IDR at 'BBB';
-- Unsecured debt at 'BBB'
-- Short-term IDR at 'F2';
-- Commercial paper at 'F2'.
Tennessee Gas Pipeline Company, LLC
-- IDR at 'BBB+';
-- Senior unsecured debt at 'BBB+'.
El Paso Natural Gas Company, LLC
-- IDR at 'BBB';
-- Senior unsecured debt at 'BBB'.
Colorado Interstate Gas Company, LLC
-- IDR at 'BBB';
-- Senior unsecured debt at 'BBB'.
Southern Natural Gas Company, LLC
-- IDR at 'BBB';
-- Senior unsecured debt at 'BBB'.
Fitch has not taken any Rating action on the following ratings:
El Paso Pipeline Partners Operating Co., LLC
-- IDR at 'BBB-';
-- Senior unsecured debt at 'BBB-'.
KINDER MORGAN: Moody's Puts 'Ba2' CFR on Review for Downgrade
-------------------------------------------------------------
Moody's Investors Service, has put the ratings of Kinder Morgan
Inc. (KMI), Kinder Morgan Energy Partners, L.P.(KMP), and El Paso
Pipeline Partners Operating Company (EPBO), on review after the
announcement that they intend to merge. Generally, the ratings for
KMP and its subsidiaries will be reviewed for downgrade, and the
ratings for KMI and EPBO and their subsidiaries will be reviewed
for upgrade.
"KMI's large portfolio of high-quality assets generates a stable
and predictable level of cash flow which could support a strong
investment grade rating," said Stuart Miller Moody's Vice
President and Senior Credit Officer. "However, because of the high
leverage along with a high dividend payout ratio, Moody's expect
the new Kinder Morgan to be weakly positioned with an investment
grade rating."
Kinder Morgan Inc.
CFR of Ba2 changed to Ba2 -- RUR-Up
Probability of Default of Ba2-PD changed to Ba2-PD RUR-Up
Senior note rating of Ba2 changed to Ba2 -- RUR-Up
El Paso Holdo LLC (assumed by KMI)
Senior note rating of Ba2 changed to Ba2 RUR-Up
Medium term notes rating of Ba2 changed to Ba2 RUR-Up
Convertible subordinated note rating of B1 changed to B1 RUR-Up
Kinder Morgan Finance Company, ULC
Senior note rating of Ba2 changed to Ba2 -- RUR-Up
Kinder Morgan Kansas Inc.
Senior note rating of Ba2 changed to Ba2 -- RUR-Up
Junior subordinated note rating of B1 changed to B1 -- RUR-Up
Kinder Morgan G.P., Inc
Preferred stock rating of Ba2 changed to Ba2 -- RUR-Up
K N Capital Trust I
Preferred Stock of B1 changed to B1 -- RUR-Up
K N Capital Trust III
Preferred Stock of B1 changed to B1 -- RUR-Up
Kinder Morgan Energy Partners, L.P.
Senior note rating of Baa2 changed to Baa2 -- RUR-Down
Senior shelf rating of (P)Baa2 changed to (P)Baa2 -- RUR-Down
Backed senior shelf rating of (P)Baa2 changed to (P)Baa2 --
RUR-Down
Backed subordinated shelf rating of (P)Baa3 changed to (P)Baa3
-- RUR-Down
Commercial paper rating of P-2 changed to P-2 -- RUR-Down
Copano Energy, LLC
Senior note rating of Baa2 changed to Baa2 -- RUR-Down
Tennessee Gas Pipeline Company
Senior note rating of Baa1 changed to Baa1 -- RUR-Down
El Paso Natural Gas Company
Senior note rating of Baa1 changed to Baa1 -- RUR-Down
El Paso Tennessee Pipeline Company
Senior note rating of Baa2 changed to Baa2 -- RUR-Down
El Paso Pipeline Partners Operating Company
CFR of Ba1 changed to Ba1-RUR-Up
Probability of Default of Ba1-PD changed to Ba1-PD RUR-Up
Senior note rating of Ba1 changed to Ba1 - RUR-Up
Backed senior shelf rating of (P)Ba1 changed to (P)Ba1 -- RUR-Up
El Paso CGP Company
Senior note rating of Ba2 changed to Ba2 RUR-Up
Colorado Interstate Gas Company
Senior note rating of Baa3 changed to Baa3 RUR-Up
Sonat Inc.
Senior note rating of Ba2 changed to Ba2 RUR-Up
Southern Natural Gas Company
Senior note rating of Baa3 changed to Baa3 RUR-Up
El Paso Energy Capital Trust I
Preferred stock rating of B1 changed to B1 RUR-Up
Ratings Rationale
The combination of KMI, KMP, and EPBO will significantly reduce
the structural complexity of the organization. Through cross-
guarantees, creditors would have pari passu, unsecured claims
against most of the organization's assets and cash flow, removing
nearly all of the structural subordination that exists currently.
The elimination of the two master limited partnerships (MLP) is
viewed as a credit-positive development as MLPs are contractually
obligated to distribute their cash flow to unit holders. While KMI
plans to maintain an aggressive dividend policy going forward,
Moody's believes the dividend program is marginally better than
the MLP contractual distribution obligation.
In 2015, KMI projects the ratio of debt to EBITDA will be 5.6x,
but intends to manage leverage between 5.0x and 5.5x going
forward. In Moody's projections, adjustments are incorporated that
push leverage up by about 0.5x. These adjustments include standard
adjustments for operating leases ($750 million of debt and
increased EBITDA by $125 million), unfunded pension liabilities
($230 million of debt), consolidation of Kinder's share of joint
venture debt and EBITDA, and a reduction to EBITDA to reflect the
portion of CO2 capital expenditures that Moody's believes are
necessary to keep production rates flat. At 6.0x leverage, KMI
will be more leveraged than all of its investment grade peers. The
proposed dividend payout of $2.00 per share in 2015 with 10%
growth will also position KMI with one of the weakest dividend
coverage ratios in the industry. For these reasons, Moody's
believes that KMI will be weakly positioned with a Baa3 rating
despite its industry-leading scale.
Moody's will resolve its rating review once the merger is
completed -- currently anticipated to occur in the fourth quarter
of 2014 after the shareholder and unitholder approvals are
obtained. As part of the review, Moody's will look at the debt
cross-guarantee documentation to confirm that no notching is
appropriate between KMI's rating and the ratings of the pipeline
operating companies' debt.
The methodologies used in these ratings were Global Midstream
Energy published in December 2010, and Natural Gas Pipelines
published in November 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.
Kinder Morgan Inc., is one of the largest midstream energy
companies in the US. Kinder Morgan Inc. operates product
pipelines, natural gas pipelines, liquids and bulk terminals, and
CO2, oil, and natural gas production and transportation assets.
The company is headquartered in Houston, Texas.
KINDER MORGAN: S&P Affirms 'BB' CCR; Put on CreditWatch Positive
----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB' corporate
credit rating on KMI and placed the rating, including the 'BB'
senior unsecured debt rating, on CreditWatch with positive
implications following its announcement that it intends to acquire
all of the outstanding equity securities of KMR, KMP, and EPB for
a total transaction value of about $70 billion.
Other rating actions associated with the announcement include:
-- S&P affirmed KMP's 'BBB' corporate credit rating and 'A-2'
short-term rating, and placed the ratings, including those
of operating subsidiaries Copano Energy and Tennessee Gas
Pipeline, on CreditWatch with negative implications.
-- S&P affirmed EPNG's 'BBB-' rating. The outlook is stable.
-- S&P affirmed EPB's 'BBB' corporate credit rating and placed
the rating, including those of its operating subsidiaries
Southern Natural Gas Co. and Colorado Interstate Gas Co. on
CreditWatch with negative implications.
"The rating action reflects our view that the benefits to
creditors of a combined KMI will be somewhat tempered by higher
consolidated financial leverage. In certain aspects, we view
KMI's pro forma simplified structure as a "C-Corp" as supportive
of credit quality, because it creates a single corporate entity
and eliminates the structural subordination of debt, as well as
multiple layers of equity distributions to service the debt
obligations. At the same time, we expect the new KMI to use the
vast majority of its free cash flow (after maintenance-related
capital spending) to pay dividends to equityholders each quarter,
and hence would face similar financial constraints as a typical
MLP. In terms of financial measures, we expect pro forma debt to
EBITDA to be high, above 5.5x over the next few years before the
company realizes cash flow from organic growth projects," S&P
said.
Pro forma for the transaction, S&P expects to revise KMI's
business risk profile to "excellent" from "strong". KMI will be
one of the largest energy companies in the U.S. and will be
significantly larger than its U.S. and Canadian midstream peers.
S&P expects the company to achieve EBITDA of about $8 billion in
2015 while maintaining a predominantly fee-based contract
structure. KMI's creditors will benefit from 100% of a
diversified cash flow stream that consists of:
-- Natural gas pipelines, storage, and gathering and processing
assets (about 55% of pro forma 2014 EBITDA);
-- Crude oil production using tertiary recovery techniques, and
related carbon dioxide pipeline assets (about 20%);
-- Refined petroleum products pipelines (roughly 12%);
-- Liquids and bulk storage terminals (about 12%); and
-- Crude oil and refined petroleum transportation in Canada
(about 2%).
S&P expects to resolve the CreditWatch listings on KMI, KMP, and
EPB when the transaction closes sometime about year-end 2014. S&P
expects to the corporate credit rating and senior unsecured debt
rating for the combined KMI to be 'BBB-'.
KIOR INC: Warns of Potential Bankruptcy Filing
----------------------------------------------
Stephanie Gleason, writing for Daily Bankruptcy Review, reported
that Houston biofuel company KiOR Inc. warned that it will file
for Chapter 11 bankruptcy at the end of September if it is unable
to raise additional capital. According to DBR, down to just
$800,000 in cash and looking at the possible maturity of hundreds
of millions in debt at the end of October, KiOR said in financial
disclosures that it may have to file for Chapter 11 bankruptcy
soon.
Justin Doom, writing for Bloomberg News, reported that the company
said it must raise substantial additional capital to fund the
restart of the commercial-scale cellulosic biofuel plant in
Columbus, Mississippi, which has halted production since January.
Kior, according to Bloomberg, also said in July that it may sell
itself after missing a debt payment of $1.88 million to the state
of Mississippi, which in 2010 loaned the Pasadena, Texas-based
company $75 million for the plant in Columbus.
LIGHTSQUARED INC: Confirmation Hearing on Plans Set for Oct. 20
---------------------------------------------------------------
Chris Nolter, writing for The Deal, reported that Judge Shelley
Chapman of the U.S. Bankruptcy Court for the Southern District of
New York scheduled a confirmation hearing for the three competing
plans filed in the Chapter 11 cases of Lightsquared, Inc., et al.,
that would start on Oct. 20, and continue to Oct. 31. Judge
Chapman will also consider the plan's disclosure statement at the
same hearing, The Deal said.
The Deal noted that creditors, including Philip Falcone's
Harbinger Capital Partners LLC, filed a competing plan that
incorporates a $560 million reorganization of the LightSquared
estate as a separate entity. LightSquared also filed a plan with
a group of lenders that have secured claims against the
LightSquared LP unit, which holds the bankruptcy estate's most
valuable wireless spectrum licenses. Moreover, creditor Mast
Capital Management LLC proposed breaking the LightSquared claims
apart from the LP unit.
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.
LOT POLISH: EU Approves $260M Aid For Struggling Airline
--------------------------------------------------------
Law360 reported that the European Commission has approved Poland's
plan to aid struggling airline LOT, the country's flagship
carrier, with EUR193.6 ($259.6 million) to support a restructuring
program intended to stave off bankruptcy, ruling the money will
not unduly distort competition. According to the report, LOT's
restructuring plan calls for giving up some profitable routes and
slots at congested airports, factors the EC said demonstrate the
aid is not designed to give the airline an unfair edge over
European competitors, thus complying with European Union state aid
rules.
Polskie Linie Lotnicze LOT S.A., trading as LOT Polish Airlines,
is the flag carrier of Poland. Based in Warsaw, LOT was
established in 1929, making it one of the world's oldest airlines
still in operation. Using a fleet of 55 aircraft, LOT operates a
complex network to 60 destinations in Europe, the Middle East,
North America, and Asia. Most of the destinations are served
from its hub, Warsaw Chopin Airport.
LOUISIANA-PACIFIC CORP: S&P Revises Outlook & Affirms 'BB' CCR
--------------------------------------------------------------
Standard & Poor's Ratings Services said it revised its rating
outlook on Nashville-based Louisiana-Pacific Corp. to stable from
positive. At the same time, S&P affirmed its ratings, including
the 'BB' corporate credit rating, on the company.
"The outlook revision reflects our expectation that credit
measures will remain in line with a significant financial risk
profile, despite much weaker-than-expected earnings in the first
half of 2014 caused by lower OSB prices. LP's strong liquidity
and its sizable surplus cash balances results in net leverage
ratios comfortably below 4x EBITDA--even in periods of moderate
stress, and therefore support our significant financial risk
assessment. We note that as of June 30, 2014, LP had $554 million
of cash balances; however, under our analysis, we consider
approximately $222 million to be "surplus cash" under our
criteria, because LP must maintain a minimum cash balance of $200
million under a covenant in its credit agreement. We adjust the
company's cash by another 20% to allow for other contingencies.
Still, when the surplus cash balances of $222 million are
considered, we estimated debt to EBITDA leverage of about 2x on
June 30, 2014," S&P said.
The stable outlook reflects S&P's view that Louisiana-Pacific will
maintain its significant financial risk profile, which is driven
by expected interest coverage measures (EBITDA to interest expense
and funds from operations to interest expense) of greater than 2x
in 2014 and improving to 4x in 2015.
"We expect the company to maintain its strong liquidity, with cash
balances in excess of $500 million for the remainder of 2014 and a
similar balance at the end of 2015," said Standard & Poor's credit
analyst Thomas Nadramia.
S&P could lower its rating on Louisiana-Pacific if OSB prices do
not improve in 2015 (due to still lackluster growth in housing
starts and overcapacity in OSB production), resulting in negative
cash flow for the remainder of 2014 and into 2015. S&P could
lower its rating if the company's cash balances fell by more than
$150 million over the next 12 months with little prospect of a
cash recovery from seasonal cash flows.
Given the current level of OSB prices and new housing starts, S&P
views an upgrade as unlikely over the next 12 months. However,
S&P could raise its ratings on LP if OSB prices do recover and LP
produces EBITDA sufficient to maintain debt to EBITDA leverage of
1x and interest coverage of 6x or higher (the "intermediate"
range) after our adjustments for surplus cash and future potential
volatility of earnings.
MERCY MEDICAL: Fitch Affirms 'BB+' Rating on $70.84MM Rev. Bonds
----------------------------------------------------------------
Fitch Ratings has affirmed the 'BB+' rating on $70,840,000
Cuyahoga County (OH) hospital facilities revenue bonds, series
2000 (UHHS/CSAHS - Cuyahoga, Inc. and CSAHS/UHHS - Canton, Inc.
Projects).
The Rating Outlook is Stable.
SECURITY
The bonds are secured by a pledge of the gross revenues of the
Mercy Medical Center (MMC; formerly known as UHHS/CSAHS -
Cuyahoga, Inc.) obligated group, a first lien mortgage of hospital
property and a debt service reserve fund.
Key Rating Drivers
Signs of Turnaround: Core operations improved markedly in fiscal
2013 and through the six months ended June 30, 2014, with
recovering patient volume and realization of cost control
initiatives. Fitch expects the positive trend to continue as
performance improvement plans ramp up.
Sponsor Support: Sisters of Charity of Health System (SCHS) is the
sole corporate member of MMC. Although SCHS does not guarantee and
is not obligated to pay debt service on MMC's obligations, Fitch
views the close relationship with and financial strength of SCHS
as a key credit factor in support of the rating. At Dec. 31, 2013,
SCHS had $437.4 million of unrestricted cash and investments which
equates to 207 days of cash on hand and 170% cash to long-term
debt (including MMC's series 2000 bonds).
Adequate Debt Service Coverage: Improved cash flow resulted in
stronger maximum annual debt service (MADS) coverage at 1.9x in
2013 compared to 0.7x the prior year as calculated by Fitch
(includes all long-term debt). As per the master trust indenture,
debt service coverage on the series 2000 bonds was a strong 4.1x
in 2013 versus 1.4x 2012.
Liquidity Remains Weak: At June 30, 2014, MMC's $53.8 million in
unrestricted cash and investments equated to 70 days cash on hand,
4.8x cushion ratio, and 58.7% cash to debt.
Rating Sensitivities
Liquidity Growth Needed: Fitch expects financial improvements to
hold and begin generating sufficient cash flows to fund capital
expenditures while gradually rebuilding the balance sheet.
Inability to sustain current performance could pressure the
rating.
Credit Profile
Mercy Medical Center, located in Canton, Ohio, is a teaching
hospital with 475 licensed beds, of which 341 are staffed. Total
operating revenues were $283.2 million in the fiscal year ended
(FYE) Dec. 31, 2013.
Improving Core Operations
Following three years of large losses (negative 6%-7% operating
margins), MMC posted a modest loss in fiscal 2013 and a negative
0.7% operating margin. Fitch notes that fiscal 2013 results were
supported by a $12.7 million legal settlement ($5.4 million is
included in operating income). Excluding this one-time benefit,
operating margin would have been negative 3.4%, still improved
from prior years. The positive trend continued through the six-
month interim period ended June 30, 2014, with a net income of
$1.2 million (0.8% operating margin). Management attributed the
recovering profitability to better patient volume and realization
of performance improvement initiatives focusing on revenue growth
and expense control. Additionally, MMC has begun seeing the impact
of Medicaid expansion in Ohio, mainly in a shift from self-pay to
Medicaid. Management believes the net impact will be to the
benefit of MMC. Budgeted net income for fiscal 2014 is $2.8
million, which Fitch believes is achievable.
Support of Sponsor
Sisters of Charity Health System (SCHS) is the sole corporate
member of MMC and MMC is included in SCHS's consolidated financial
statements. Although SCHS is not legally obligated on MMC's bonds,
Fitch views the close relationship to SCHS and the financial
strength of SCHS as a key credit strength in support of the
rating. SCHS has been deeply involved in hospital operations and
recently expanded the support services which now includes
information technology, billing, executive compensation,
contracting, treasury services and supply chain management. At
Dec. 31, 2013, SCHS had $437.4 million of unrestricted cash and
investments which equates to 207 days of cash on hand and 170%
cash to long-term debt (including MMC's series 2000 bonds).
Adequate Debt Service Coverage
Supported by improved profitability and cash flow, MADS coverage
improved to 1.9x in 2013 from 0.7x in the prior year. Fitch uses a
MADS of $11.3 million, which includes all bonds, notes, and
capitalized leases. As calculated under the master trust
indenture, MMC covered the $7.8 million MADS on the series 2000
bonds by 4.1x in 2013, up from 1.4x in 2012. Debt burden is
relatively high with 4% of MADS as a percentage of revenues. MMC
does not expect to issue any additional debt in the near term.
Weak Liquidity
At June 30, 2014, MMC reported $53.8 million in unrestricted cash
and investments, which equated to 70 days cash on hand, 4.8x
cushion ratio (based on MADS of $11.3 million) and 58.7% cash to
debt. Fitch notes that MMC's position of unrestricted cash and
investments declined from 2009 to 2012, but grew slightly in 2013
due to a $12.7 million settlement received from Aultman Hospital.
The erosion in liquidity reflects, in part, the impact of funding
various capital projects including a $14.5 million emergency room
expansion from the balance sheet due to MMC's weak profitability.
Disclosure
MMC covenants to provide annual disclosure within 120 days of each
fiscal year end, and quarterly disclosure within 45 days of
quarter end through the Municipal Securities Rulemaking Board's
EMMA system.
MILE HIGH GROCERY: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Mile High Grocery Supply, Inc.
dba Abarrotes Mi Familia
9101 E. 89th Avenue
Henderson, CO 80640
Case No.: 14-20953
Chapter 11 Petition Date: August 11, 2014
Court: United States Bankruptcy Court
District of Colorado (Denver)
Judge: Hon. Elizabeth E. Brown
Debtor's Counsel: Jeffrey Weinman, Esq.
WEINMAN & ASSOCIATES, P.C.
730 17th St., Ste. 240
Denver, CO 80202
Tel: 303-572-1010
Email: jweinman@epitrustee.com
Total Assets: $212,179
Total Liabilities: $2.74 million
The petition was signed by Jeffery P. Jones, president.
A list of the Debtor's 20 largest unsecured creditors is available
for free at http://bankrupt.com/misc/cob14-20953.pdf
MINERVA NEUROSCIENCES: Incurs $19.37 Net Loss for Second Quarter
----------------------------------------------------------------
Minerva Neurosciences, Inc., filed its quarterly report on Form
10-Q, disclosing a net loss of $19.37 million for the three months
ended June 30, 2014, compared with a net loss of $375,953 for the
same period 2013.
The Company's balance sheet at June 30, 2014, showed $52.96
million in total assets, $23.72 million in total liabilities and
total stockholders' equity of $29.23 million.
A copy of the Form 10-Q is available at:
http://is.gd/8AA1Jb
Minerva Neurosciences, Inc., a development stage biopharmaceutical
company, focuses on the development and commercialization of a
portfolio of product candidates for the treatment of central
nervous system diseases. Its lead product candidates that have
completed Phase IIa trials comprise MIN-101, an antagonist on 5-
HT2A and sigma2 receptors for the treatment of patients with
schizophrenia; and MIN-117, an antagonist on the 5-HT1A receptor,
and inhibitor of serotonin and dopamine reuptake for the treatment
of major depressive disorder. It is also developing MIN-202, a
selective orexin 2 receptor antagonist that is in Phase Ib trials
for the treatment of primary and secondary insomnia; and MIN-301,
a soluble recombinant form of the Neuregulin-1b1 protein, which is
in investigational new drug-enabling studies for the treatment of
Parkinson's disease. Minerva Neurosciences, Inc. has a co-
development and license agreement with Janssen Pharmaceutica, N.V.
for the development of MIN-202. The company was formerly known as
Cyrenaic Pharmaceuticals, Inc. and changed its name to Minerva
Neurosciences Inc. in 2013. The company was founded in 2007 and
is headquartered in Cambridge, Massachusetts.
MONROE HOSPITAL: Files for Chapter 11 to Sell to Prime Healthcare
-----------------------------------------------------------------
Monroe Hospital, LLC, owner of a 32-bed hospital in Bloomington,
Indiana, that's facing cash woes, has sought bankruptcy protection
to sell the assets to rival Prime Healthcare Services Inc.
Joseph Roche, the president and CEO, explained in a court filing,
"Prior to the Petition Date, the Debtor was suffering from an
insufficient cash flow as a result of low patient census and high
expenses. Although there are 32 beds at the hospital, the average
patient census is 8. This low patient census is a result of the
fact that the Debtor suffers from competition from other providers
in the area. As a consequence of its low patient census, the
Debtor received insufficient revenue to meet its prepetition
expenses."
As a result of its insufficient revenue, the Debtor defaulted
under the terms of its lease and loan agreement with MPT
Bloomington, LLC, the lessor of the land on which the hospital is
located. MPT has terminated the lease, leaving the Debtor as a
holdover, month-to-month tenant at will.
After conducting an extensive marketing process, the Debtor, MPT
entered into a letter of intent that contemplates the (i) sale of
the assets and operations of the Debtor to an affiliate of Prime
Services, Prime Healthcare Management, Inc., (ii) the lease of the
real estate to Prime Management. The transaction would be
consummated by a sale conducted under Section 363 of the
Bankruptcy Code.
By separate motions, the Debtor will seek entry of an order
approving procedures for bidding on its assets and for selling its
assets to Prime Management. The LOI also contemplates MPT
Development providing the Debtor postpetition financing and MPT
authorizing the Debtor to use its cash collateral, subject to
certain conditions.
The Debtor's primary secured creditor is MPT. As of the Petition
Date, the Debtor believes that MPT holds a claim in an amount not
less than $121.8 million, which is secured by substantially all of
the Debtor's assets. In addition, the Debtor estimates that its
creditors hold general unsecured claims in excess of $13 million.
First Day Motions
The Debtor on the Petition Date filed motions to
-- use cash collateral and obtain postpetition financing,
-- maintain its existing cash management system,
-- pay prepetition wages and benefits, and
-- grant adequate assurance of payment to utilities,
The Debtor also filed applications to employ Upshot Services LLC
as noticing and claims agent, tap ordinary course professionals.
About Monroe Hospital
Monroe Hospital, LLC, since 2006, has operated a 32 licensed bed
private acute care medical surgical hospital in Bloomington,
Indiana. It leases the land on which the hospital is located from
MPT Bloomington, LLC.
Monroe Hospital, LLC, filed a Chapter 11 bankruptcy petition
(Bankr. S.D. Ind. Case No. 14-07417) in Indianapolis, Indiana on
Aug. 8, 2014.
The case is assigned to Judge James M. Carr.
The Debtor is represented by attorneys at Bingham Greenebaum Doll
LLP.
The Debtor's primary secured creditor is MPT. As of the Petition
Date, the Debtor believes that MPT holds a claim in an amount not
less than $121.8 million, which is secured by substantially all of
the Debtor's assets. In addition, the Debtor estimates that its
creditors hold general unsecured claims in excess of $13 million.
According to the docket, the deadline for governmental entities to
file proofs of claims is on Feb. 4, 2015. The Debtor's schedules
of assets and liabilities, statement of financial affairs and
other documents are due Aug. 22, 2014.
About Monroe Hospital
Monroe Hospital, LLC, since 2006, has operated a 32 licensed bed
private acute care medical surgical hospital in Bloomington,
Indiana. It leases the land on which the hospital is located from
MPT Bloomington, LLC.
Monroe Hospital, LLC, filed a Chapter 11 bankruptcy petition
(Bankr. S.D. Ind. Case No. 14-07417) in Indianapolis, Indiana on
Aug. 8, 2014.
The case is assigned to Judge James M. Carr.
The Debtor is represented by attorneys at Bingham Greenebaum Doll
LLP.
The Debtor's primary secured creditor is MPT. As of the Petition
Date, the Debtor believes that MPT holds a claim in an amount not
less than $121.8 million, which is secured by substantially all of
the Debtor's assets. In addition, the Debtor estimates that its
creditors hold general unsecured claims in excess of $13 million.
According to the docket, the deadline for governmental entities to
file proofs of claims is on Feb. 4, 2015. The Debtor's schedules
of assets and liabilities, statement of financial affairs and
other documents are due Aug. 22, 2014.
MONROE HOSPITAL: Proposes $5-Mil. of DIP Loans From MPT
-------------------------------------------------------
Monroe Hospital, LLC, is seeking approval from the bankruptcy
court to use the cash collateral of, and obtain financing from,
MPT Bloomington, LLC.
MPG has consented to the use of cash collateral provided that MPT
receive as adequate protection under Sections 351, 362 and 363 of
the Bankruptcy Code both replacement liens and an allowed claim
under Section 507(b) of the Bankruptcy Code.
Further MPT affiliate MPT Development Services Inc., has agreed to
provide financing to the Debtor in the amount of up to $5 million
during the run up to and pendency of the Chapter 11 case. As of
the Petition Date, the Debtor has borrowed $1 million of the
financing. Therefore, following the Petition Date, the Debtor
will have access to $4,000,000 under the terms of the Postpetition
Credit Agreement.
In exchange for the financing, MPT Development requires that MPT
be granted a superpriority administrative expense claim under Sec.
364(c)(1) and a lien on all of the Debtors' assets.
Upon entry of an interim financing order, MPT Development's
postpetition financing lien will not cover any avoidance actions
available to the Debtor under Chapter 5 of the Bankruptcy Code,
however, the lien may cover the avoidance actions upon entry of a
final financing order.
The postpetition debt will initially bear interest at a per annum
rate equal to equal to 12 percent, subject to adjustments. The
DIP financing has a termination date of Dec. 1, 2014.
About Monroe Hospital
Monroe Hospital, LLC, since 2006, has operated a 32 licensed bed
private acute care medical surgical hospital in Bloomington,
Indiana. It leases the land on which the hospital is located from
MPT Bloomington, LLC.
Monroe Hospital, LLC, filed a Chapter 11 bankruptcy petition
(Bankr. S.D. Ind. Case No. 14-07417) in Indianapolis, Indiana on
Aug. 8, 2014.
The case is assigned to Judge James M. Carr.
The Debtor is represented by attorneys at Bingham Greenebaum Doll
LLP.
The Debtor's primary secured creditor is MPT. As of the Petition
Date, the Debtor believes that MPT holds a claim in an amount not
less than $121.8 million, which is secured by substantially all of
the Debtor's assets. In addition, the Debtor estimates that its
creditors hold general unsecured claims in excess of $13 million.
According to the docket, the deadline for governmental entities to
file proofs of claims is on Feb. 4, 2015. The Debtor's schedules
of assets and liabilities, statement of financial affairs and
other documents are due Aug. 22, 2014.
MONROE HOSPITAL: Taps Upshot Services as Claims & Balloting Agent
-----------------------------------------------------------------
Monroe Hospital, LLC, is asking approval from the Bankruptcy Court
for authority to employ Upshot Services LLS as its claims,
noticing and balloting agent.
The Debtor requires the assistance of a third party claims,
noticing and balloting agent in the Chapter 11 case due to the
large and complex nature of the Chapter 11 case. The Debtor has
over 400 creditors and hundreds more parties in interest.
UpShot's hourly-based services for its work in the Chapter 11 case
will be charged at these hourly rates:
Hourly Rate
-----------
Clerical $25
Case Assistant $50 to $65
Case Consultant $140 to $155
Case Manager $170
IT Manager $125 to $140
Additionally, UpShot's case management and Web site-related
services will include services to the Debtor such as website
hosting, license fees and database services, noticing, postage and
copying, among other services, at the costs set forth in the
engagement letter.
UpShot is seeking court approval for a retainer in the amount of
$5,000 from the Debtor.
The firm can be reached at:
UPSHOT SERVICES LLC
Attn: Travis K. Vandell
7808 Cherry Creek South Drive, Suite 112
Denver, CO 80231
E-mail: tvandell@upshotservices.com
About Monroe Hospital
Monroe Hospital, LLC, since 2006, has operated a 32 licensed bed
private acute care medical surgical hospital in Bloomington,
Indiana. It leases the land on which the hospital is located from
MPT Bloomington, LLC.
Monroe Hospital, LLC, filed a Chapter 11 bankruptcy petition
(Bankr. S.D. Ind. Case No. 14-07417) in Indianapolis, Indiana on
Aug. 8, 2014.
The case is assigned to Judge James M. Carr.
The Debtor is represented by attorneys at Bingham Greenebaum Doll
LLP.
The Debtor's primary secured creditor is MPT. As of the Petition
Date, the Debtor believes that MPT holds a claim in an amount not
less than $121.8 million, which is secured by substantially all of
the Debtor's assets. In addition, the Debtor estimates that its
creditors hold general unsecured claims in excess of $13 million.
According to the docket, the deadline for governmental entities to
file proofs of claims is on Feb. 4, 2015. The Debtor's schedules
of assets and liabilities, statement of financial affairs and
other documents are due Aug. 22, 2014.
MP & ASSOCIATES: Case Summary & Largest Unsecured Creditors
-----------------------------------------------------------
Debtor affiliates filing separate Chapter 11 bankruptcy petitions:
Debtor Case No.
------ --------
MP & Associates, Inc. 14-30312
dba Tri-State Animal Clinic, Inc.
P. O. Box 310
Barboursville, WV 25504
Tri-State Aminal Clinic, Inc. 14-30313
dba Tri-State Veteinary Center
P.O. Box 310
Barboursville, WV 25504
Chapter 11 Petition Date: August 11, 2014
Court: United States Bankruptcy Court
Southern District of West Virginia (Huntington)
Judge: Hon. Ronald G. Pearson
Debtors' Counsel: Mitchell Lee Klein, Esq.
KLEIN AND SHERIDAN LC
3566 Teays Valley Road
Hurricane, WV 25526
Tel: (304) 562-7111
Fax: (304) 562-7115
Email: swhittington@kleinandsheridan.com
help@kleinandsheridan.com
Estimated Estimated
Assets Liabilties
--------- ----------
MP & Associates, Inc. $0-$50K $1MM-$10MM
Tri-State Aminal $0-$50K $1MM-$10MM
The petition was signed by Wayne Manning, president of MP &
Associates.
Debtor MP & Associates listed Merial Inc., c/o John W. Mills,
Esq., at Barnes & Thornburg, LLP, 3475 Piedmont Road, N.E.
Atlanta, GA, as its largest unsecured creditor holding a claim of
$2.19 million.
A full-text copy of MP & Associates's petition is available for
free at http://bankrupt.com/misc/wvsb14-30312.pdf
A list Tri-State Aminal's two largest unsecured creditors is
available for free at http://bankrupt.com/misc/wvsb14-30313.pdf
NATCHEZ REGIONAL: Disclosure Statement Hearing on Aug. 26
---------------------------------------------------------
Natchez Regional Medical Center has filed its proposed Plan of the
Adjustment of Debts dated Aug. 4, 2014, under Chapter 9 of the
Bankruptcy Code.
According to the explanatory disclosure statement, the Plan
designates five classes of Claims, which take into account the
differing nature and priority under the Bankruptcy Code of the
various Claims. Pursuant to the Plan, the Debtor ultimately will
be dissolved. A Liquidating Trust will be established which will
become responsible for the collection and liquidation of the
remaining assets of the Hospital after the Allowed Claims of the
Secured Creditors are paid.
The classification and treatment of classified claims are:
A. Class 1 (Secured Claim of Regions Bank) - Upon the Sale of
the Hospital, the amount necessary to defease the Bonds
will be deposited with the Bond Escrow Agent and invested
and applied pursuant to the Bond Escrow Agreement to pay
debt service on the Bonds until July 1, 2016 and to redeem
the Bonds on July 1, 2016. This amount necessary to
defease the Bonds includes the purchase price of the SLGS
(and the initial Cash deposit) necessary to fund the Bond
Escrow Fund and thereby provide for the defeasance of the
Bonds as required under the Indenture. The total amount
necessary to fund the Bond Escrow Fund is estimated to be
$15,100,580, which estimated amount to fund the Bond
Escrow Fund to be funded through proceeds from the Sale of
the Hospital (including the Prepaid Taxes) and amounts
held by the Indenture Trustee in the Debt Service Reserve
Fund and the General Account of the General Fund.
Additional closing costs related to the defeasance of the
Bonds are estimated to be $125,000. The amounts necessary
to defease the Bonds set forth above are estimates
calculated as of July 29, 2014 and include costs of escrow
necessary to fund negative arbitrage from September 30,
2014 through July 1, 2016.
B. Class 2 (Secured Claim of United Mississippi Bank) - Class
2 will be paid in full in the amount of its Allowed Claim.
C. Class 3 General Unsecured (Convenience Claims) - Consists
of the Holders of General Unsecured Claims against the
Hospital that are equal to or less than $1,000, or Holders
of General Unsecured Claims in excess of $1,000 who elect
to reduce the amount of their General Unsecured Allowed
Claims to $1,000. Holders of an Allowed Class 3 Claim
will be paid in full in the amount of its Allowed Claim.
D. Class 4 (Unsecured Claims) - Each Holder of an Allowed
Class 4 Claim shall receive its Pro Rata share of the
payments received by the Liquidation Trust on account of
Cash realized from the collection and liquidation of
accounts receivable and the other remaining assets of the
Hospital after the payment of all Allowed Administrative
Claims and all Allowed Claims of Classes 1, 2, and 3.
E. Class 5 (Tort Claims and Employment Claims) - If there is
no General Liability Insurance Coverage for any aspect of
the Tort Claim, the Tort Claim shall be treated as a Class
4 Claim. If there is no EPLI Coverage for any aspect of
the Employment Claim, the Employment Claim shall be
treated as a Class 4 Claim.
The Court has set the Disclosure Statement Hearing for August 26,
2014, beginning at 1:30 p.m. Central Time. The Court also has set
the Confirmation Hearing for September 25-26, 2014, beginning at
10:30 a.m. Central Time.
A copy of the disclosure statement is available for free at:
http://bankrupt.com/misc/NATCHEZREGIONAL_369_ds.pdf
About Natchez Regional
Based in Natchez, Mississippi, Natchez Regional Medical Center is
a full-service hospital offering comprehensive diagnostic and
treatment services for acute, subacute and ambulatory care.
Natchez Regional serves as a referral center for the five
Mississippi counties and two Louisiana parishes it serves, known
locally as the Miss-Lou. The hospital is owned by Adams County.
Natchez Regional Medical Center filed for Chapter 9 bankruptcy
protection (Bankr. S.D. Miss. Case No. 14-01048) on March 26,
2014. Eileen N. Shaffer, Esq., Attorney At Law, serves as
bankruptcy counsel. In its petition, the Center listed total
assets of $27.8 million and total debts of $20.80 million. The
petition was signed by Donny Rentfro, hospital CEO.
At the onset of the case, the 179-bed facility said intends to
have a term sheet outlining a sale of the facility to a "qualified
buyer." The hospital blamed financial problems on "ill-timed and
poorly integrated acquisition of physicians' practices and new
clinical technologies," the report related.
This is the Center's second bankruptcy filing in six years. It
filed a Chapter 9 petition on Feb. 12, 2009 (Bankr. S.D. Miss.
Case No. 09-00477). Eileen N. Shaffer, Esq., also represented the
Debtor as counsel in the 2009 case. The Debtor listed total
assets of between $10 million and $50 million, and total debts of
between $10 million and $50 million in the 2009 petition. Nathcez
Regional exited bankruptcy in December 2009 after a court approved
its plan of adjustment, in which all unsecured creditors owed
$5,000 were to be paid in full.
In the 2014 case, Bankruptcy Judge Neil P. Olack, who presides
over the case, has held that appointment of a patient care
ombudsman is unnecessary.
NII HOLDINGS: Likely to File for Chapter 11 Bankruptcy
------------------------------------------------------
James Callan, writing for Bloomberg News, reported that NII
Holdings Inc., said it will probably file for Chapter 11
bankruptcy protection because it can't fulfill financial
obligations. According to the report, NII, which offers Nextel
mobile-phone service and has units in Brazil, Mexico, Chile and
Argentina, has been losing customers as America Movil SAB and
Telefonica SA offer faster download speeds for smartphones.
Revenue at NII slumped 23 percent in the second quarter, and it
reported a net loss of 77,000 subscribers in the period, the
Bloomberg report said, citing a company statement.
Bill Rochelle, the bankruptcy columnist for Bloomberg News, citing
Trace, the bond-price reporting system of the Financial Industry
Regulatory Authority, reported that the $800 million in 10 percent
senior unsecured notes due 2016 last traded on Aug. 11 for 24
cents on the dollar, to yield 113 percent. The stock closed on
Aug. 11 at 65.5 cents, down 1.5 percent in New York trading, Mr.
Rochelle said.
About NII Holdings
With headquarters in Reston, Virginia, NII Holdings is an
international wireless operator with more than 7 million largely
post-pay, business subscribers.
As of March 31, 2014, the Company had $8.18 billion in total
assets, $8.19 billion in total liabilities and a $8.76 million
total stockholders' deficit.
Bankruptcy Warning
"We believe we are currently in compliance with the requirements
under all of our financing arrangements, including the indentures
for our senior notes, our equipment financing facilities and our
local bank financing agreements. In light of the probability
that, absent a waiver or amendment, we will be unable to meet the
financial covenants in the equipment financing facilities and the
local bank financing agreements as of the next compliance date,
there is no guarantee that the lender of our equipment financing
facilities will continue to fund additional requests under these
facilities. In addition, a holder of more than 25% of our 8.875%
senior notes, issued by NII Capital Corp. and due December 15,
2019, has provided a notice of default in connection with these
notes. We believe that the allegations contained in the notice
are without merit.
"If we are unable to meet our debt service obligations or to
comply with our other obligations under our existing financing
arrangements:
* the holders of our debt could declare all outstanding
principal and interest to be due and payable;
* the holders of our secured debt could commence foreclosure
proceedings against our assets;
* we could be forced into bankruptcy or liquidation; and
* debt and equity holders could lose all or part of their
investment in us," the Company said in the Quarterly Report
for the period ended March 31, 2014.
* * *
As reported by the TCR on March 5, 2014, Standard & Poor's Ratings
Services lowered its corporate credit rating on Reston, Va.-based
wireless carrier NII Holdings Inc. (NII) to 'CCC' from 'CCC+'.
"The downgrade follows the company's poor fourth-quarter 2013
results that were below our expectations, and its disclosure that
its auditors have uncertainty about the company's ability to
continue as a going concern," said Standard & Poor's credit
analyst Allyn Arden.
The TCR also reported on March 5, 2014, that Moody's Investors
Service downgraded the corporate family rating (CFR) of NII
Holdings Inc. ("NII" or "the company") to Caa1 from B3. The
downgrade reflects the company's poor 2013 operating performance
and the risk that the company will violate the covenants governing
its Mexican and Brazilian subsidiary debt, which could trigger an
event of default for up to $4.4 billion of debt issued by
intermediate holding companies NII Capital Corp. and NII
International Telecom S.C.A.
PHOENIX PAYMENT: Has Interim OK to Obtain $2.7MM in DIP Loans
-------------------------------------------------------------
Judge Mary F. Walrath of the U.S. Bankruptcy Court for the
District of Delaware gave Phoenix Payment Systems, Inc., interim
authority to borrow money from The Bancorp Bank up to an aggregate
principal or face amount of $2,750,000. The Debtor is also given
interim authority to use cash collateral securing its prepetition
indebtedness.
According to Sherri Toub, substituting for Bill Rochelle, the
bankruptcy columnist for Bloomberg News, the DIP Lender requires
the sale of the Debtor's business. Ms. Toub says Phoenix has been
in default under the various Bancorp agreements since 2012 and
Bancorp has agreed to hold off on taking action against Phoenix.
Ms. Toub reports that unless a better offer emerges at auction,
North American Bancard LLC's EPX Acquisition Company LLC will pay
$50 million, subject to adjustment, and assume specified
liabilities to buy almost all of the company's assets. Competing
bids will be due Sept. 12, with an auction Sept. 18, and a hearing
to approve the sale on Sept. 23, the Bloomberg report said, citing
court papers.
The final hearing is scheduled for Sept. 3, 2014, at 11:30 a.m.
(ET). Objections must be submitted on or before Aug. 27.
A full-text copy of the Interim DIP Order is available at
http://bankrupt.com/misc/PHOENIXdipord0805.pdf
About Phoenix Payment
Phoenix Payment Systems, Inc., aka Electronic Payment Systems, aka
EPX, sought protection under Chapter 11 of the Bankruptcy Code on
Aug. 4, 2014 (Case No. 14-11848, Bankr. D. Del.). The Debtor is
an international payment processor with corporate headquarters in
Wilmington, Delaware, and technology headquarters in Phoenix,
Arizona. The Debtor provides acceptance, processing, support,
authorization and settlement services for credit card, debit card
and e-check payments. Judge Mary F. Walrath presides over the
case.
The Debtor's attorneys are Richard J. Bernard, Esq., at Foley &
Lardner LLP, in New York; and Mark D. Collins, Esq., Russell
Siberglied, Esq., Zachary I Shapiro, Esq., and Marisa A.
Terranova, Esq., at Richards Layton & Finger, P.A., in Wilmington,
Delaware. The Debtor's banker and financial advisor is Raymond
James & Associates, Inc., while Bederson, LLC, is the Debtor's
accountant. PMCM, LLC, provides advisory services and executive
leadership to the Debtor. The Debtor's claims and noticing agent
is Omni Management Group, LLC.
PHOENIX PAYMENT: Needs Until Sept. to File Schedules
----------------------------------------------------
Phoenix Payment Systems, Inc., asks the the U.S. Bankruptcy Court
for the District of Delaware to extend until Sept. 3, 2014, the
period by which it must files schedules of assets and liabilities
and statement of financial affairs.
The Debtor says in court papers that it has expended significant
time and resources reviewing its debt structure, analyzing its
operations and cash flows, marketing its assets, and negotiating
and documenting the DIP facility, and these processes have
exhausted its resources almost entirely. The Debtor adds that it
is working currently with various professionals to compile the
necessary information required for the Schedules and the
Statement.
A hearing to consider approval of the extension request is
scheduled for Sept. 3, 2014, at 11:30 a.m. (EDT). Objections are
due Aug. 22.
About Phoenix Payment
Phoenix Payment Systems, Inc., aka Electronic Payment Systems, aka
EPX, sought protection under Chapter 11 of the Bankruptcy Code on
Aug. 4, 2014 (Case No. 14-11848, Bankr. D. Del.). The Debtor is
an international payment processor with corporate headquarters in
Wilmington, Delaware, and technology headquarters in Phoenix,
Arizona. The Debtor provides acceptance, processing, support,
authorization and settlement services for credit card, debit card
and e-check payments. Judge Mary F. Walrath presides over the
case.
The Debtor's attorneys are Richard J. Bernard, Esq., at Foley &
Lardner LLP, in New York; and Mark D. Collins, Esq., Russell
Siberglied, Esq., Zachary I Shapiro, Esq., and Marisa A.
Terranova, Esq., at Richards Layton & Finger, P.A., in Wilmington,
Delaware. The Debtor's banker and financial advisor is Raymond
James & Associates, Inc., while Bederson, LLC, is the Debtor's
accountant. PMCM, LLC, provides advisory services and executive
leadership to the Debtor. The Debtor's claims and noticing agent
is Omni Management Group, LLC.
PHOENIX PAYMENT: Has Interim Authority to Pay Critical Vendors
--------------------------------------------------------------
Judge Mary F. Walrath of the U.S. Bankruptcy Court for the
District of Delaware gave Phoenix Payment Systems, Inc., interim
authority to pay prepetition claims of certain critical vendors
and service providers, provided that the amounts paid will not
exceed $350,000 in the aggregate. The final hearing will be held
on Sept. 3, 2014, at 11:30 a.m. (EDT).
About Phoenix Payment
Phoenix Payment Systems, Inc., aka Electronic Payment Systems, aka
EPX, sought protection under Chapter 11 of the Bankruptcy Code on
Aug. 4, 2014 (Case No. 14-11848, Bankr. D. Del.). The Debtor is
an international payment processor with corporate headquarters in
Wilmington, Delaware, and technology headquarters in Phoenix,
Arizona. The Debtor provides acceptance, processing, support,
authorization and settlement services for credit card, debit card
and e-check payments. Judge Mary F. Walrath presides over the
case.
The Debtor's attorneys are Richard J. Bernard, Esq., at Foley &
Lardner LLP, in New York; and Mark D. Collins, Esq., Russell
Siberglied, Esq., Zachary I Shapiro, Esq., and Marisa A.
Terranova, Esq., at Richards Layton & Finger, P.A., in Wilmington,
Delaware. The Debtor's banker and financial advisor is Raymond
James & Associates, Inc., while Bederson, LLC, is the Debtor's
accountant. PMCM, LLC, provides advisory services and executive
leadership to the Debtor. The Debtor's claims and noticing agent
is Omni Management Group, LLC.
PHOENIX PAYMENT: Seeks to Employ Richards Layton as Counsel
-----------------------------------------------------------
Phoenix Payment Systems, Inc., seeks authority from the U.S.
Bankruptcy Court for the District of Delaware to employ Richards,
Layton & Finger, P.A., to represent it as its counsel in
connection with its Chapter 11 filing and prosecution of its
Chapter 11 case.
As counsel, RL&F will:
(a) prepare all necessary petitions, motions, applications,
orders, reports, and papers necessary to commence the
Chapter 11 Case;
(b) advise the Debtor of its rights, powers, and duties as
debtor and debtor in possession under Chapter 11 of the
Bankruptcy Code;
(c) prepare on behalf of the Debtor all motions, applications,
answers, orders, reports, and papers in connection with the
administration of the Debtor's estate;
(d) take action to protect and preserve the Debtor's estate,
including the prosecution of actions on the Debtor's
behalf, the defense of actions commenced against the Debtor
in the Chapter 11 Case, the negotiation of disputes in
which the Debtor is involved, and the preparation of
objections to claims filed against the Debtor;
(e) assist the Debtor with the sale of any of its assets
pursuant to Section 363 of the Bankruptcy Code;
(f) prepare the Debtor's disclosure statement and any related
motions, pleadings, or other documents necessary to solicit
votes on the Debtor's plan of reorganization;
(g) prepare the Debtor's plan of reorganization;
(h) prosecute on behalf of the Debtor any proposed Chapter 11
plan and seeking approval of all transactions contemplated
therein and in any amendments thereto; and
(i) perform all other necessary legal services in connection
with the Chapter 11 Case.
RL&F's current hourly rates are the following:
Directors $560 to $800
Counsel $490
Associates $250 to $465
Paraprofessionals $235
The principal professionals and paraprofessionals designated to
represent the Debtor and their current standard hourly rates are
as follows:
Mark D. Collins, Esq. $800
Russell C. Silberglied, Esq., $700
Paul N. Heath, Esq. $625
Katherine L. Good, Esq. $465
Zachary I. Shapiro, Esq. $465
Marisa A. Terranova, Esq. $440
Rebecca V. Speaker $235
The firm will also be reimbursed for any necessary out-of-pocket
expenses.
Over the past year, the Debtor has paid to RL&F a total of
$1,005,000 in retainer monies in connection with the Debtor's
restructuring process, the potential sale of the Debtor, and in
contemplation of the Chapter 11 Case.
Mark D. Collins, Esq., a director at Richards, Layton & Finger,
P.A., 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.
A hearing on the employment application is scheduled for Sept. 3,
2014, at 11:30 a.m. (EDT). Objections are due Aug. 22.
The firm may be reached at:
Mark D. Collins, Esq.
Russell C. Silberglied, Esq.
Paul N. Heath, Esq.
Katherine L. Good, Esq.
Zachary I. Shapiro, Esq.
Marisa A. Terranova, Esq.
RICHARDS, LAYTON & FINGER, P.A.
One Rodney Square
920 North King Street
Wilmington, DE 19801
Tel: (302) 651-7700
Fax: (302) 651-7701
Email: collins@rlf.com
silberglied@rlf.com
heath@rlf.com
good@rlf.com
shapiro@rlf.com
terranova@rlf.com
About Phoenix Payment
Phoenix Payment Systems, Inc., aka Electronic Payment Systems, aka
EPX, sought protection under Chapter 11 of the Bankruptcy Code on
Aug. 4, 2014 (Case No. 14-11848, Bankr. D. Del.). The Debtor is
an international payment processor with corporate headquarters in
Wilmington, Delaware, and technology headquarters in Phoenix,
Arizona. The Debtor provides acceptance, processing, support,
authorization and settlement services for credit card, debit card
and e-check payments. Judge Mary F. Walrath presides over the
case.
The Debtor's attorneys are Richard J. Bernard, Esq., at Foley &
Lardner LLP, in New York; and Mark D. Collins, Esq., Russell
Siberglied, Esq., Zachary I Shapiro, Esq., and Marisa A.
Terranova, Esq., at Richards Layton & Finger, P.A., in Wilmington,
Delaware. The Debtor's banker and financial advisor is Raymond
James & Associates, Inc., while Bederson, LLC, is the Debtor's
accountant. PMCM, LLC, provides advisory services and executive
leadership to the Debtor. The Debtor's claims and noticing agent
is Omni Management Group, LLC.
PROGRESO INDEPENDENT: Fitch Cuts (ULT) Bonds Ratings to 'BB+'
-------------------------------------------------------------
Fitch Ratings has downgraded the following Progreso Independent
School District (the district) unlimited tax (ULT) bonds:
-- $28.5 million ULT bonds, series 2006, 2010, 2010 refunding,
2011, 2011A, 2012 to 'BB+' from 'A-'.
Fitch removes the bonds from Rating Watch Negative and assigns a
Negative Outlook.
Security
The bonds are secured by an unlimited property tax levied annually
against all taxable property within the district. Additional
security is provided by the Texas Permanent School Fund (PSF)
guaranty, whose bond guaranty program is rated 'AAA' by Fitch.
Key Rating Drivers
Deteriorating Finances: The downgrade reflects the adverse
financial impact of the district's weak governance and management
practices, including a structural imbalance caused by
overstaffing, counting non-Texas residents as part of its average
daily attendance (ADA), and reducing its debt service tax rate
below the required level.
Financial Management Lapses: The district's qualified opinion on
its fiscal 2013 audit along with a large number of audit findings
calls into question the reliability of reported information. Board
inaction delayed the district's progress in resolving many of its
management shortcomings.
Budget Pressures in Fiscal 2015 And Beyond: The Negative Outlook
reflects the district's difficult prospects for achieving
structural balance in light of the state's planned withholding of
state aid overpayments. Prolonged management lapses also reduce
the reliability of financial data.
State Conservators Assigned: The Texas Education Agency (TEA) has
assigned two conservators to the district with oversight authority
and broad power to make and influence management decisions,
including a veto of board decisions going forward. While Fitch
views this action positively, the impact of enhanced oversight is
still unfolding and is not yet incorporated into the rating.
Mixed Debt Profile: Debt-to-market value is very high due to the
low tax base wealth, and amortization is below average. However,
fixed costs for debt service and retiree benefits are quite
affordable due to annual state support. Future capital needs are
minimal.
Weak Tax Base: Tax base wealth is very low and top taxpayers are
moderately concentrated in agriculture. TAV growth is occurring
but at a much slower rate than historical growth due to lower
levels of building activity. Tax collection rates are below
average.
Limited But Stable Economy: The district's economy is fairly
limited with high unemployment, high poverty, and low wealth.
Fitch notes that such metrics are not unusual for smaller school
districts located along the U.S.-Mexico border.
Rating Sensitivity
Governance Improvements: Prolonged delays in appointing permanent
leadership positions or lack of progress in resolving the
district's numerous audit findings in the fiscal 2015 audit will
lead to a rating downgrade.
Financial Stabilization: A lack of progress in restoring
structural balance to the district's operating and debt service
funds will lead to a rating downgrade.
Data Reliability: Inability to provide Fitch with consistently
reliable financial data could result in withdrawal of the rating.
Credit Profile
The district is located on the U.S.-Mexico border in Hidalgo
County and includes the town of Progreso, a small trading center.
District attendance has fluctuated in recent years but remains at
around 2,000.
School Board Inaction
The district's tenuous position, cited by Fitch in a press release
dated Feb. 21, 2014, was compounded by the school board's repeated
inability to achieve a quorum and take action on certain key items
such as the appointment of an interim superintendent. Since the
election of three new board members in May 2014, the board is now
meeting regularly, appointed an interim superintendent, and
approved a one-year contract with a state education service center
(ESC). The ESC will provide business office support, financial
oversight, human resources support, and student attendance
support. The appointment of the interim superintendent and the ESC
contract was approved by the state conservators.
Fiscal 2013 Operating Results and Audit Findings
The fiscal 2013 audit posted a large $3.1 million (15% of
spending) net deficit due primarily to a $2.3 million transfer for
the completion of the science and technology building. The balance
of the deficit ($947,000 or 4.4% of spending) is due to a
structural imbalance fueled by greater than budgeted staffing. The
net deficit reduced the unrestricted fund balance to $5.2 million
(24.4% of spending) from $8.4 million (42.7%) from a year prior.
Liquidity remained ample at over 3.5 months of operating expenses
despite the draw down.
The district received a qualified opinion on its fiscal 2013 audit
plus a high 22 audit findings that echoed many of the problems
discovered by TEA's investigation regarding significant gaps in
internal controls and financial management practices. Although
some progress has been made, management expects most of the
findings will remain unresolved for the fiscal 2014 audit which is
viewed negatively by Fitch.
State Aid Overpayments
A TEA audit revealed ADA discrepancies within the district's
alternative school as well as errors in the lunch counts for the
free and reduced-price lunch program. A separate TEA investigation
discovered that the district had been including 100 non-Texas
residents, equal to about 5% of its enrollment base in its ADA for
fiscal years 2012 and 2013. These discrepancies led to the
district receiving an aggregate state aid overpayment of $1.8
million for the biennium which TEA had planned to deduct from
fiscal 2015 state revenues. The district has appealed TEA's
finding and contends a smaller number of non-Texas residents was
counted in the district's ADA during fiscal 2012 & 2013. TEA is
awaiting the district's response and will not take action for the
time being.
Although fiscal 2014 state revenues were not officially part of
the TEA's investigation, TEA has indicated similar overpayments
for 100 non-Texas residents were received by the district during
this period. As a result, the fiscal 2014 budget was amended to
reflect $659,000 (3% of general fund revenue) in unearned revenue.
The timing of TEA's claw back for fiscal 2014 overpayments has not
yet been determined.
Fiscal 2014 Financial Pressures
The new management team froze expenses and deferred certain
expenditures in response to fiscal 2013's structural imbalance and
the impending claw back of state revenues. Year to date cash is
adequate at $5.5 million and management projects balanced
operations are possible. However, Fitch notes that any
overpayments will be posted as a liability (unearned revenue),
leading to a significant fund balance decline.
Fiscal 2015 Budget Pressure
The proposed fiscal 2015 budget is still under development but
management has indicated that it will reflect the loss of all 100
ADA disputed by TEA as non-eligible. To offset the loss of about
$750,000 in state revenue, management will propose a reduction in
staffing. The new administration has identified substantial
overstaffing in maintenance personnel and other non-teaching
positions. Fitch will monitor the board's willingness to right
size district staffing and enable prudent financial management.
Debt Service Shortfall
Annual state support for debt service comprises a high 80% of
unlimited tax bond debt service but is based on local taxing
effort. A reduction of $0.05 per $100 TAV in the fiscal 2014 debt
service tax rate led to a $300,000 (13% of spending) shortfall in
local and state revenues for state support. To offset this
shortfall, the district transferred a similar amount from the
general fund (equal to 1.5% of spending), further exacerbating
fiscal 2014 budget pressures. The new administration is
investigating this discrepancy and plans to budget a debt service
tax rate increase of $0.0425 (for a total of $0.33) to fully fund
its debt service obligation in the proposed fiscal 2015 budget.
2010 Bond Project on Hold
Construction of the science and technology building, funded with
voter approved 2010 bonds, was halted eight months ago after the
project's architect/contractor was arrested on federal bribery
charges. The project is 70% complete but Fitch notes that costs
are likely to increase under a new contractor.
Management's goal is to restart the project once its financial
position is stabilized. TEA's substantial debt service support of
the project's bonds may complicate the project's financing if such
support is withdrawn due to its inactive status.
Limited But Stable Economy
Tourism, agriculture and trade with Mexico are the leading sectors
of commerce in Hidalgo County. The Progreso-Nuevo Progreso
International Bridge, expanded in 2003, has also enhanced the
area's role in foreign trade activity. Unemployment rates in the
county historically have been significantly higher than state and
national levels. The May 2014 unemployment rate of 8.6% is down
from 10.5% a year-prior but remains well above the state and
national averages of 5.1% and 6.1%, respectively. Likewise, local
wealth indicators traditionally have lagged significantly behind
state and national averages, with market value per capita a low
$25,000 and per capita income equal to only 37% of the national
average.
District taxable assessed valuation (TAV) has rebounded modestly
over the last three years and recouped a 6.4% reappraisal losses
posted in fiscal 2011. This deceleration is significant compared
with an average annual growth rate of about 14% from fiscal years
2006 to 2010. Moderate taxpayer concentration exists, with the top
10 taxpayers accounting for 12% of TAV.
The 2014 district population is small and estimated at just over
8,000. Student ADA in the district remained flat in recent years
before declining by 2% in fiscal 2014. The district is budgeting a
5% reduction in ADA in fiscal 2015 to reflect the elimination of
all non-Texas residents identified by TEA.
Very Low Property Wealth Brings Substantial State Support
A major determinant in the amount of state financial aid for Texas
school districts is local property wealth levels. The district's
property wealth per student is among the lowest in state and,
therefore, the district is heavily dependent on state aid for
operating and debt service support. State financial support has
consistently represented at or around 80% of general fund revenues
and totaled 83% in fiscal 2013; local property taxes account for
less than 10%. Tax collections, typical of the border region, are
somewhat weak but have improved in recent years due to a change in
delinquent tax collection procedures.
Elevated Debt Ratios with Affordable Fixed Costs Due To State
Support
The district's debt-to-market value ratio is very high at 16.4%,
reflecting the very low property wealth levels. Debt per capita is
more moderate at $3,859. The district's substantial state debt
service support, which when applied as a cost offset, reduces
annual debt service costs to a low 1.8% of governmental
expenditures.
The pace of principal repayment remains below average at 40% in 10
years. Debt service is level over the medium term and descends
thereafter through maturity. Current facility capacity is
projected as adequate over the next five years.
District employees participate in the Teacher Retirement System of
Texas (TRS), a cost sharing, multiple-employer pension system.
Contributions are substantially made by plan members and the State
of Texas on behalf of the district, significantly reducing the
annual retiree costs for the district. The district's annual
required contribution for pension and other post-employment
benefits equaled $292,000 or a nominal 1.2% of fiscal 2013
governmental expenditures. Combined fixed costs for debt service
and pension and OPEB ARCs consumed only 2.9% of fiscal 2013
governmental spending.
Texas School Finance Litigation
In February 2013, a district judge ruled that the state's school
finance system is unconstitutional. The ruling, which was in
response to a consolidation of six lawsuits representing 75% of
Texas school children, found the system 'inefficient, inequitable,
and unsuitable and arbitrarily funds districts at different
levels...' The judge also cited inadequate funding and districts'
inability to exercise 'meaningful discretion' in setting tax rates
as constitutional flaws in the current system.
The judge agreed to reopen testimony in January 2014 after the
Texas legislature restored $4.5 billion in school funding in its
2013 session. The increased funding levels apply to school
district budgets in fiscal years 2014 and 2015. The judge will
determine if the additional funding affected arguments made during
the trial. It is anticipated that the original ruling, if upheld,
will ultimately be appealed to the state supreme court.
PROXYMED INC: Suit Alleging Shareholder Caused Bankruptcy Is Cut
----------------------------------------------------------------
Law360 reported that a Delaware federal judge tossed one claim and
left the other two intact in a suit alleging that the actions of
private equity firm General Atlantic LLC and its managing director
led to the bankruptcy of ProxyMed Inc., which provided information
technology services to doctors, pharmacies and labs. According to
the report, NHB Assignments LLC, acting as the liquidating trustee
on behalf of bankrupt ProxyMed, had alleged that General Atlantic
and one of its managing directors, Braden Kelly, each breached
their fiduciary duties to ProxyMed and that General Atlantic aided
and abetted Kelly's fiduciary duty breach. According to the
lawsuit, their actions resulted in ProxyMed losing $100 million of
"enterprise value," which ultimately led to the bankruptcy.
The case is NHB Assignments LLC v. General Atlantic LLC, et al.,
Case No. 1:12-cv-01020 (D.Del.).
Headquartered in Norcross, Georgia, ProxyMed Inc. f/k/a MedUnite,
Inc. -- http://www.medavanthealth.com-- facilitates the exchange
of medical claim and clinical information. On Sept. 17, 2008, the
company filed Articles of Amendment to its Articles of
Incorporation to change its name from ProxyMed, Inc. to PM
Liquidating Corp.
The company and two of its affiliates filed for Chapter 11
protection on July 23, 2008 (Bankr. D. Del. Lead Case No.08-
11551). Kara Hammond Coyle, Esq., and Michael R. Nestor, Esq., at
Young Conaway Stargatt & Taylor, L.L.P., represent the Debtors in
their restructuring efforts.
The Debtors indicated $40,655,000 in total consolidated assets and
$47,640,000 in total consolidated debts as of December 31, 2007.
In its petition, ProxyMed Transaction Services, Inc. indicated
$10,000,0000 in estimated assets and $10,000,000 in estimated
debts.
At Aug. 31, 2008, the company reported total assets of
$13,500,145, total liabilities of $28,014,859, and stockholders'
deficit of $14,514,714.
REVEL AC: To Close After Failing to Find Qualified Buyer
--------------------------------------------------------
Michael J. De La Merced, writing for The New York Times' DealBook,
reported that Revel Entertainment Group announced on Aug. 12 that
it would shut down after it failed to find a qualified buyer
during a court-supervised auction process. According to the
report, the decision to shut down also comes more than four years
after Morgan Stanley, the original backer of the resort, announced
in April 2010 that it would sell its majority stake in the project
-- after taking a write-down of roughly $1 billion.
About Revel AC
Revel AC, Inc. -- http://www.revelresorts.com/-- owns and
operates Revel, a Las Vegas-style, beachfront entertainment resort
and casino located on the Boardwalk in the south inlet of Atlantic
City, New Jersey.
Revel AC Inc. and five of its affiliates sought bankruptcy
protection (Bankr. D.N.J., Lead Case No. 14-22654) on June 19,
2014, to pursue a quick sale of the assets.
The Chapter 11 cases are assigned to Judge Gloria M. Burns. The
Debtors' Chapter 11 cases are jointly consolidated for procedural
purposes.
Revel AC estimated assets ranging from $500 million to $1 billion,
and the same amount of liabilities.
White & Case, LLP, and Fox Rothschild, LLP, serve as the Debtors'
Counsel, and Moelis & Company, LLC, is the investment banker. The
Debtors' solicitation and claims agent is Alixpartners, LLP.
The prepetition first lenders are represented by Cadwalader,
Wickersham & Taft LLP. The prepetition second lien lenders are
represented by Paul, Weiss, Rifkind, Wharton & Garrison LLP. The
DIP agent is represented by Milbank, Tweed, Hadley & McCloy LLP.
This is Revel AC's second trip to bankruptcy. The company first
sought bankruptcy protection (Bankr. D.N.J. Lead Case No. 13-
16253) on March 25, 2013, with a prepackaged plan that reduced
debt by $1.25 billion. Less than two months later on May 15,
2013, the 2013 Plan was confirmed and became effective on May 21,
2013.
ROME FINANCE: Soldiers' Consumer Debt Cleared In Shutdown
---------------------------------------------------------
Law360 reported that Rome Finance Co., which financed purchases
for some 18,000 soldiers across the country, has been shuttered by
regulators for a slew of abuses in an action that returns service
members $92 million in value, New York's attorney general said
after joining state and federal authorities in an investigation.
According to the report, the California- and Georgia-based lender,
as well as its Colfax Capital Corp. and Culver Capital LLC
affiliates, financed debt -- and guaranteed returns through access
to soldiers' bank accounts -- but inflated prices for goods.
RYERSON HOLDING: S&P Raises Rating on $600MM Sr. Notes to 'B-'
--------------------------------------------------------------
Standard & Poor's Ratings Services said it raised its issue-level
rating on U.S.-based steel and aluminum distributor Ryerson
Holding Corp.'s $600 million 9% senior secured notes to 'B-' from
'CCC+'. The upgrade results from S&P's revision of the recovery
rating on the senior secured notes to '4' from '5', indicating its
expectation for average recovery (30%-50%) in the event of a
default. The 'B-' issue-level rating is in line with the 'B-'
corporate credit rating on the company and S&P's notching
guidelines for a '4' recovery rating. The recovery rating
revision is based on a moderate improvement in S&P's projected
recovery assessment because of lower assumed outstanding
borrowings under Ryerson's $1.35 billion asset-based lending (ABL)
revolving credit facility--which is effectively ahead of the
senior secured notes under S&P's analysis--given current borrowing
base constraints. As a result of the lower ABL debt assumption,
more of Ryerson's reorganization value becomes available to
support recovery for senior secured note holders under S&P's
analysis.
The 'CCC' issue-level rating and '6' recovery rating on the
company's 11.25% senior unsecured notes are unchanged. The 'B-'
corporate credit rating and stable outlook are also unchanged,
derived from the company's "highly leveraged" financial risk and
"weak" business risk profile assessments. Ryerson's weak business
risk profile reflects its participation in the highly fragmented
and competitive distribution industry, sales mix skewed toward
low-margin flat products, and highly volatile cash flow. S&P's
highly leveraged financial risk assessment reflects its
expectations that debt to EBITDA will be around 6.5x at year-end
2014, and Ryerson's ownership by a financial sponsor.
Key Analytical Factors
S&P has updated its recovery analysis on Ryerson as part of its
ongoing rating surveillance process.
S&P continues to value the company as a going concern with a value
of approximately $1 billion. S&P's analysis also contemplates
that borrowings under Ryerson's ABL facility would be fully
covered by the value of the underlying collateral. Although the
facility size is currently $1.35 billion, S&P assumed borrowings
of about $650 million because of potential borrowing base
constraints. S&P also assumed that about $50 million of debt
would be on the books at Ryerson's foreign subsidiaries. Although
S&P do not view it as a claim per se, the foreign debt effectively
reduces the value available for distribution to creditors in S&P's
hypothetical Chapter 11 proceeding.
Simulated Default Assumptions
S&P's simulated default scenario revolves around a material
decrease in sales volumes, coupled with rapid declines in steel
prices. Operating margins thin because the company would have to
sell existing higher-cost inventories below cost (as its customers
demand lower prices).
-- Simulated year of default: 2016
-- Distressed EBITDA level: $200 mil.
-- Implied EBITDA multiple: 5x
-- Implied stressed valuation: $1 bil.
Simplified waterfall
-- Estimated value after 5% administrative costs: $950 mil.
-- Remaining recovery value after priority claims (ABL
facility--$650 million) and foreign debt adjustment ($50
million): $250 mil.
-- Estimated senior secured note claims: $630 mil.
-- Recovery expectations: 30% to 50%
-- Estimated senior unsecured note claims: $215 mil.
-- Recovery expectations: 0% to 10%
Note: Estimated senior unsecured note claims are pro forma for an
expected $100 million repayment with proceeds from Ryerson's
initial public offering on Aug 8, 2014. Estimated claim amounts
for the notes include about six months' accrued but unpaid
interest.
Ratings List
Ryerson Holding Corp.
Corporate Credit Rating B-/Stable/--
Rating Raised; Recovery Rating Revised
To From
Ryerson Inc
Joseph T. Ryerson & Son Inc.
$600 mil 9% sr secd notes B- CCC+
Recovery Rating 4 5
SAGE COLLEGES: Moody's Downgrades Long-term Debt Rating to B3
-------------------------------------------------------------
Moody's Investors Service has downgraded The Sage Colleges' (NY)
long-term debt rating on the Series 1999 fixed rate bonds issued
through the City of Albany Industrial Development Agency (Albany
Industrial Development Agency) and the underlying rating on the
Series 2002 variable rate demand bonds issued through the
Rensselaer County Industrial Development Agency (Rensselaer IDA)
to B3 from B2. The outlook is negative.
The Series 2002 bonds also carry an enhanced rating of A2/VMIG 1
based on Moody's joint default rating methodology and letter of
credit provided by Manufacturers and Traders Trust Company (M&T
rated A2/P-1 negative), which has a stated expiration date of June
30, 2015.
Summary Rating Rationale
The B3 rating and negative outlook for The Sage Colleges reflects
ongoing operating challenges due to stagnant net tuition revenue
in an intensely competitive student market. Financial resources
are weak and liquidity remains thin. Sage has considerable bank
debt with renewal and acceleration risks, in addition to a
concentration of loans with a single bank. Nearly all of the
fiscal year (FY) 2013 unrestricted funds are held as collateral
for a cyclical cash flow operating line of credit, which places
the Series 1999 fixed rate bondholders in a subordinate position
that could negatively impact expected recovery in the event of
default.
Further downward notching is precluded at this time due to
positive preliminary FY 2014 operating results, which included
substantial expense reductions implemented during FY 2014.
Improvement is expected to continue into FY 2015, due to
management's willingness and ability to institute budgetary cuts.
Recent changes in management are expected to provide Sage with
stronger budgeting and financial modeling capacity.
Challenges
* Fluctuating enrollment among the four Sage Colleges and flat
tuition for the last three years adversely impacted growth of
student charges, the college's largest revenue source at 88% of
Moody's adjusted operating revenues in FY 2013.
* The college has extremely narrow liquidity of $4.1 million in FY
2013, which provided only 32 days of monthly days cash on hand and
is held as collateral for the college's $5.1 million operating
line of credit, used for operating cash flow needs.
* Significant bank concentration exists with a letter of credit
and a line of credit provided by Manufacturers and Traders Trust
Company. Failure to renew either the letter or line of credit, or
acceleration of amounts due would cause a significant liquidity
issue for the college.
Strengths
* Preliminary 2014 results indicate that management has
implemented significant cost reduction efforts, which should lead
to improved financial performance. Management projects an over
$1.5 million improvement in FY 2014 operations versus prior year.
* Good donor support has been critical to Sage's ability to make
capital improvements to attract and retain students. The college
reports record success with its recent comprehensive capital
campaign.
* Sage's strategic plan, "Sage Pillars: Pathways to Excellence"
includes a number of initiatives to create revenue enhancements,
with resumed revenue growth critical to the college's long-term
viability. The college has some programmatic and revenue diversity
providing a base off which to rebuild.
Outlook
The negative outlook reflects The Sage Colleges' continued thin
liquidity, substantial exposure to bank facility renewal risk and
limited headroom for error, in addition to intense competition for
students.
What Could Change The Rating Up
Critical to improving the colleges' rating would be a significant
change to debt structure to limit exposure to liquidity risk.
Upward rating pressure is possible with sustained balanced
operations in the near term, significant improvement in liquidity
position and non-reliance on external liquidity for operations,
and stabilization of enrollment and growth of net tuition revenue.
What Could Change The Rating Down
A rating downgrade could occur due to acceleration of bank debt,
reduced covenant headroom, failure to renew needed operating
lines, an inability to increase net student revenue, or continued
deterioration in liquidity.
STERLING TRUST: Los Angeles Clippers Sold to Ballmer
----------------------------------------------------
Ben Cohen, writing for The Wall Street Journal, reported that
Steve Ballmer is now the owner of the Los Angeles Clippers after
the sale of the NBA team officially closed on Aug. 12. According
to the report, the league's board of governors had already
approved the $2 billion deal for Ballmer, the former Microsoft
chief executive, to replace Donald Sterling as the Clippers'
owner.
As previously reported by The Troubled Company Reporter, citing
The Wall Street Journal, Sterling Trust was in danger of
defaulting on hundreds of millions of dollars in loans if the sale
of the Los Angeles Clippers doesn't go through, an executive
testified in a case over whether co-owner Donald Sterling can halt
the sale. The trust owes at least $480 million to three banks,
said Darren Schield, chief financial officer of Beverly Hills
Properties, in Los Angeles Superior Court.
TJ MCGLONE: Withholding Taxes Can't Be Dumped In Bankruptcy
-----------------------------------------------------------
Law360 reported that New Jersey's Tax Court ruled that the head of
a bankrupt construction company must pay over $175,000 to satisfy
his company's past due withholding taxes because the sums aren't
dischargeable in bankruptcy. According to the report, T.J.
McGlone & Co. Inc. president Daniel McGlone said his company's
Chapter 7 liquidation wiped out any tax debts and also argued that
the state waited too long to file its claim, but the state tax
court disagreed, saying state and federal law clearly establishes
that the money isn't dischargeable.
TMT GROUP: CEO Casts $100M IP Suit Over Vessel Sale
---------------------------------------------------
Law360 reported that the CEO of troubled Taiwanese shipping firm
TMT Group launched a suit in Texas federal court, alleging that a
planned bankruptcy sale of three company ships to Mega
International Commercial Bank Co. Ltd. will strip him of
intellectual property worth more than $100 million. According to
the report, Hsin-Chi Su, who also goes by Nobu Su, said in a
lawsuit filed in Houston that U.S. Bankruptcy Judge Marvin Isgur
recently signed off on a sale of the ships to Mega Bank, a major
creditor of TMT, without adequately protecting his interest in the
boats' patented technology.
The case is Su v. Mega International Commercial Bank Co. Ltd.,
case number 4:14-cv-02166, in the U.S. District Court for the
Southern District of Texas.
About TMT Group
Known in the industry as TMT Group, TMT USA Shipmanagement LLC and
its affiliates own 17 vessels. Vessels range in size from
approximately 27,000 dead weight tons (dwt) to approximately
320,000 dwt.
TMT USA and 22 affiliates, including C. Ladybug Corporation,
sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 13-
33740) in Houston, Texas, on June 20, 2013 after lenders seized
seven vessels.
TMT filed a lawsuit in U.S. bankruptcy court aimed at forcing
creditors to release the vessels so they can return to generating
income.
TMT has tapped attorneys from Bracewell & Giuliani LLP as
bankruptcy counsel and AlixPartners as financial advisors.
On a consolidated basis, the Debtors have $1.52 billion in assets
and $1.46 billion in liabilities.
TRIPLANET PARTNERS: Claims Bar Date Fixed as Sept. 4, 2014
----------------------------------------------------------
Creditors of Triplanet Partners LLC must file their proofs of
claims no later than Sept. 4, 2014.
Triplanet Partners LLC filed a Chapter 11 bankruptcy petition
(Bankr. S.D.N.Y. Case No. 14-22643) on May 8, 2014. Sophien
Bennaceur signed the petition as manager. The Debtor disclosed
$19,946,560 in assets and $33,663,525 in liabilities. Arnold
Mitchell Greene, Esq., at Robinson Brog Leinwand Greene Genovese &
Gluck, P.C., serves as the Debtor's counsel. Judge Robert D.
Drain oversees the case.
UNIV OF NORTH CAROLINA: S&P Affirms BB Rating on Obligation Bonds
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its issuer credit
rating (ICR) on University of North Carolina at Pembroke (UNCP)
one notch to 'A-' from 'A'. The outlook is stable.
The downgrade reflects Standard & Poor's opinion of the
university's modest demand profile and just-adequate financial
resources compared to median category ratios.
The rating service also affirmed its 'BB' rating, with a stable
outlook, on the university's series 2010A and 2010B limited
obligation bonds, secured by dormitory system rental revenue.
"Although we do not expect to lower the ICR during the outlook
period, significant enrollment decreases could trigger our
consideration of lowering the ICR. Additional credit factors that
could result in our lowering the rating include significant
deficit financial operations and the issuance of significant
additional debt that diminishes financial resource ratios compared
to the rating category. We could consider lowering the rating on
the series 2010A and 2010B limited obligation bonds if there were
a decrease in coverage such that coverage were to approach
financial covenants," said Standard & Poor's credit analyst Nick
Waugh. "We believe our raising the ICR during the outlook period
is unlikely due to, what we consider, the university's modest
demand profile, deficit operating performance, and just-adequate
financial resources compared to the rating category. We also
believe credit factors that could lead us to raise the rating
beyond the two-year outlook period could include significant
demand increases for the university, a trend of surplus operations
on a full-accrual basis, and the significant improvement of
financial resource ratios compared to the rating category. Credit
factors that could lead us to raise the rating on the series 2010A
and 2010B limited obligation bonds include increased occupancy at
the university's housing facilities, as well as consistent
coverage well in excess of the covenanted 1.1x for the dormitory
system and well in excess of the 1x coverage covenant for project
housing, excluding support from the Build America bonds subsidy."
Base rental payments pursuant to a lease between North Carolina
and the UNCP Student Housing Foundation LLC secure the series
2010A and 2010B bonds. The obligation to pay the base rentals
required constitutes a limited obligation of UNCP, payable solely
from net project revenue and dormitory system net revenue after
the payment of UNCP's dormitory system debt and general revenue
debt, including any general revenue debt issued in the future.
VIRTUAL PIGGY: Incurs $1.87-Mil. Net Loss in June 30 Quarter
------------------------------------------------------------
Virtual Piggy, Inc., filed its quarterly report on Form 10-Q,
disclosing a net loss of $1.87 million on $1,253 of sales for the
three months ended June 30, 2014, compared with a net loss of
$3.38 million on $58 of sales for the same period last year.
The Company's balance sheet at June 30, 2014, showed $7.81 million
in total assets, $6.26 million in total liabilities, and
stockholders' equity of $1.55 million.
A copy of the Form 10-Q is available at:
http://is.gd/ta7g8w
Virtual Piggy, Inc., operates as a technology company that
delivers an online ecommerce solution in the United States and
Europe. Its system allows parents and their children to manage,
allocate funds, and track their expenditures, savings, and
charitable giving online. The company offers Oink product, which
enables online businesses to interact and transact with the Under
18 market in a manner consistent with the Children?s Online
Privacy Protection Act. It also operates online store where
families can select and purchase gift cards for delivery to other
family members. The company was formerly known as Moggle, Inc. and
changed its name to Virtual Piggy, Inc. in August 2011. Virtual
Piggy, Inc. was founded in 2008 and is based in Hermosa Beach,
California.
WASHINGTON MUTUAL: Chase Beats Rocker Rundgren's Mortgage Suit
--------------------------------------------------------------
Law360 reported that the Ninth Circuit tossed '70s rocker Todd
Rundgren's suit contending JPMorgan Chase Bank NA is liable for
defunct Washington Mutual Bank FA's allegedly fraudulent handling
of his $3 million mortgage, saying the musician failed to exhaust
his administrative remedies before suing. According to the
report, Rundgren, along with his wife, Michele Rundgren, had sued
the bank in Hawaii federal court to block foreclosure of their
Hawaii residence, alleging WaMu agents created a false loan
application for the couple.
The case is Todd Rundgren, et al v. JPMorgan Chase Bank, Case No.
12-15368 (9th Cir.).
About Washington Mutual
Based in Seattle, Washington, Washington Mutual Inc. --
http://www.wamu.com/-- was the holding company for Washington
Mutual Bank as well as numerous non-bank subsidiaries.
Washington Mutual Bank was taken over on September 25, 2008, by
U.S. government regulators. The next day, WaMu and its affiliate,
WMI Investment Corp., filed separate petitions for Chapter 11
relief (Bankr. D. Del. 08-12229 and 08-12228, respectively). WaMu
owns 100% of the equity in WMI Investment.
XPO LOGISTICS: Moody's Assigns B1 Rating on $500MM Unsec. Notes
---------------------------------------------------------------
Moody's Investors Service has assigned a B1 Corporate Family
Rating ("CFR") to XPO Logistics, Inc. and a B1 rating to the $500
million senior unsecured notes due 2019 that the company plans to
issue. The net proceeds of the notes will be used to help fund the
recently announced $615 million acquisition of New Breed Holding
Company ("New Breed"). The B1 CFR takes into account XPO
Logistics' position as a leading provider of transportation
logistics services and its compelling business model, balanced
against slim operating margins and pro forma leverage that is high
for the B1 rating category. The ratings outlook is stable.
Ratings Rationale
The B1 CFR of XPO Logistics considers the company's position as a
leading provider of a comprehensive range of transportation
logistics services, including truck brokerage, intermodal
services, contract logistics, last mile logistics, freight
forwarding and expedited transportation. The company's business
model aims to build scale in a fragmented market place, using a
proprietary IT system that aggregates market pricing information
and carrier availability to match and price shipper demand with
carrier supply. The company's growth strategy is ambitious but is
being implemented through methodical execution of acquisition,
integration and recruitment processes. As XPO Logistics'
transformative process will continue unabated, however, there is
an inherent uncertainty with respect to the company's precise
business composition over the next 12 to 24 months.
Following the acquisition of New Breed's higher margin contract
logistics business and as XPO Logistics gradually improves
profitability in its truck brokerage segment, Moody's expects
(adjusted) operating margins to improve to the low single digit
range. Margins are therefore slim, in part reflecting the nature
of the freight brokerage business model and a relatively high
amount of amortization costs. Moody's estimates leverage, measured
by Debt to EBITDA on a pro forma basis for the acquisition of New
Breed, at around 5.75 times in 2014. Leverage is expected to
decline to 4.5 to 5.0 times in 2015, although additional debt-
funded acquisitions could defer the anticipated deleveraging.
Moody's considers the liquidity profile of XPO Logistics to be
adequate, as reflected in the SGL-3 Speculative Grade Liquidity
rating that Moody's has assigned. The rating is supported by
Moody's expectation that free cash flow will turn positive over
the next 12 to 18 months. As the acquisition of New Breed will in
part be financed by a drawdown under XPO Logistics' revolving
credit facility, approximately $200 million of the facility
remains available, although this is likely to increase with the
acquisition of New Breed. Moody's expects the company to use part
of the facility to help fund additional acquisitions.
The new $500 million senior unsecured notes due 2019 are rated B1,
in line with the CFR of XPO Logistics. The new notes are
guaranteed by the company's domestic operating subsidiaries and
are therefore ranked pari passu with other unsecured obligations
of the operating subsidiaries in Moody's Loss Given Default
analysis. In view of the large proportion of this debt class in
the capital structure, the ratings for the unsecured notes align
with the B1 CFR.
The stable ratings outlook is predicated on Moody's expectation
that XPO Logistics continues to execute its growth strategy
successfully and improves its operating margins such that free
cash flow turns positive. The outlook also anticipates that
leverage declines although the pace of deleveraging could be
affected by additional debt-funded acquisitions.
The ratings for XPO Logistics could be downgraded if the company
is not able to improve profitability over the next 12 to 18
months, adversely affecting its ability to turn free cash flow
positive. A downgrade could also be warranted if Debt to EBITDA is
around 5.5 times or higher on a prolonged basis, or if FFO +
Interest to Interest weakens towards 2.5 times from an expected
level of more than 3.0 times.
The ratings could be considered for an upgrade if the company
successfully executes its growth strategy while demonstrating a
material and sustainable improvement in operating margins. Debt to
EBITDA of less than 4.0 times and FFO + Interest to Interest of
more than 4.0 times would be supportive of a positive rating
action.
Assignments:
Issuer: XPO Logistics, Inc.
Corporate Family Rating, Assigned B1
Probability of Default Rating, Assigned B1-PD
Speculative Grade Liquidity Rating, Assigned SGL-3
Senior Unsecured Regular Bond/Debenture, Assigned B1, LGD4
The principal methodology used in this rating was Global Surface
Transportation and Logistics Companies published in April 2013.
Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.
YEP LLC: Voluntary Chapter 11 Case Summary
------------------------------------------
Debtor: YEP, LLC
2058 East Main Street
Cortlandt Manor, NY 10567
Case No.: 14-23149
Chapter 11 Petition Date: August 11, 2014
Court: United States Bankruptcy Court
Southern District of New York (White Plains)
Debtor's Counsel: Rosemarie E. Matera, Esq.
KURTZMAN MATERA, PC
664 Chestnut Ridge Road
Spring Valley, NY 10977
Tel: (845) 352-8800
Fax: (845) 352-8865
Email: law@kmpclaw.com
Total Assets: $117,103
Total Liabilities: $395,874
The petition was signed by Thomas Pellegrino, managing member.
The Debtor did not file a list of its largest unsecured creditors
when it filed the petition.
YMCA OF MILWAUKEE: Wants to Sell Facilities; Hearing on Aug. 19
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The Young Men's Christian Association of Metropolitan Milwaukee,
Inc., and YMCA Youth Leadership Academy, Inc., filed with the U.S.
Bankruptcy Court for the Eastern District of Wisconsin a motion
for an order approving the sale of sell substantially all of the
Debtor's assets associated with the YMCA facilities it operates in
the western suburbs to the City of Milwaukee and in Port
Washington.
A copy of the sale procedures is available for free at:
http://bankrupt.com/misc/YMCAOFMILWAUKEE_150_saleprocedures.pdf
Hearing on the Debtors' motion to establish sale/auction bid
procedures on Aug. 19, 2014, at 1:00 p.m. Objections are due by
Aug. 15, 2014.
The Debtor is now requesting that the Court approve the terms,
conditions and procedures, pursuant to which an auction of the
Assets will be conducted. The Debtor expects to realize
substantial savings in operational expenses (not less than
$125,000 per month) as soon as the Assets are sold.
The Debtor is authorized to state that BMO Harris Bank, which
would be entitled to receive not less than 93% of the net proceeds
generated by the proposed sales and auction, joins in the request
that the motion be heard on an expedited basis.
The Assets are comprised of these lots to be offered at the
Auction:
(i) Lot No. 1: The real and personal property located at
11311 West Howard Avenue, Greenfield, WI comprising the
Southwest YMCA. The minimum bid for Lot 1 is
$2,333,333;
(ii) Lot No. 2: The real and personal property located at
2420 N. 124th Street, Wauwatosa, WI comprising the West
Suburban YMCA. The minimum bid for Lot 2 is $2,333,333;
(iii) Lot No. 3: The real and personal property located at
N84 W17501 Menomonee Ave., Menomonee Falls, WI
comprising the Tri-County YMCA. The minimum bid for
Lot 3 is $2,333,333; and
(iv) Lot No. 4: The real and personal property located at
465 Northwoods Road, Port Washington, WI comprising the
Feith Family Y. The minimum bid for Lot 4 is
$2,100,000.
Any potential bidder that wants to participate in the Auction will
deliver to the sales agent by 5:00 p.m., Central Time, on Sept.
22, 2014, an earnest money deposit, by wire transfer, cashier's
check or other collected funds, equal to $100,000 times the number
of Lots that the potential bidder intends to bid on.
CWC and KMY are each deemed a qualified bidder. In the event
that, by the Qualification Deadline, there are qualified bidders
in addition to Central Waukesha County, Inc., and Kettle Moraine
YMCA, Inc., the sales agent will conduct an auction beginning at
9:00 a.m. Central Time on Sept. 24, 2014, or at a later time or
other place as the sales agent will designate and notify to all
qualified bidders.
At the Auction, the opening bid for each lot will be its minimum
bid. Each qualified bidder will, thereafter, be permitted to
increase its bids in increments of not less than $50,000 per lot,
or other increments as the sales agent determines to be in the
best interest of the Debtor's estate.
Cash Collateral Use
On June 27, 2014, Judge Susan V. Kelley entered an order approving
the Debtors' stipulation with BMO Harris Bank N.A. That allowed
the Debtors to use the Bank's cash collateral on an interim basis
through July 4, 2014. The Court previously approved on June 10,
2014, the Parties' stipulation for use of cash collateral through
June 27, 2014.
The Parties asked to have a status conference on the Debtors' use
of cash collateral on or before July 3, 2014, since certain
disputes over the extent and scope of the Debtors' operations have
arisen and the Official Committee of Unsecured Creditors has been
appointed and is in a position to review any further cash
collateral order.
Relief From Automatic Stay
On June 11, 2014, the Court approved the Debtors' stipulation with
the Bank, granting the Bank relief from the automatic stay
to cause the acceleration of the tax exempt bonds and taxable
notes. The automatic stay was lifted to permit the Bank to take
any action necessary to cause the tax exempt bonds acceleration
and the taxable notes acceleration, including, but not limited to
the issuance of the notices of default. Provided however, other
than accelerating the tax exempt bonds and the taxable notes,
the automatic stay will remain in effect as to any attempts by the
Bank to obtain Debtors' property which may be subject to the
Bank's security interests pending further order of the Court.
About YMCA of Milwaukee
The Young Men's Christian Association of Metropolitan Milwaukee,
Inc., and affiliate, YMCA Youth Leadership Academy, Inc., filed
voluntary Chapter 11 bankruptcy petitions (Bankr. E.D. Wis. Case
Nos. 14-27174 and 14-27175) in Milwaukee, on June 4, 2014.
YMCA Milwaukee, which has more than 100,000 members using its
centers and camps, plans to sell a majority of its owned real
estate to help pay down $29 million in debt.
YMCA Milwaukee estimated $10 million to $50 million in both assets
and liabilities. YMCA Academy estimated $100,000 to $500,000 in
both assets and liabilities. The formal schedules of assets and
liabilities are due June 18, 2014.
The Debtors are seeking joint administration of their Chapter 11
cases for procedural purposes. The cases are assigned to Judge
Susan V. Kelley.
The Debtors have tapped Olivier H. Reiher, Esq., and Mark L. Metz,
Esq., at Leverson & Metz, S.C., in Milwaukee, as counsel.
YMCA OF MILWAUKEE: Taps Equity Partners as Sale Agent
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The Young Men's Christian Association of Metropolitan Milwaukee,
Inc., and YMCA Youth Leadership Academy, Inc., seek permission
from the U.S. Bankruptcy Court for the Eastern District of
Wisconsin to employ Equity Partners HG LLC as sale agent with
respect to the four fitness facilities that the Debtor has sought
authority to sell.
In a court filing dated July 31, 2014, the Debtor stated that it
desires to sell the Facilities to specific buyers on the terms
contained in specific offers unless the Debtor obtains higher and
better offers pursuant to an auction process. The Debtor has
selected HEP to assist with the marketing and sale of the
Facilities in accordance with that auction process.
HEP will advertise and market the Facilities for sale or other
disposition for 45 days or at a longer time as it may take to
consummate one or more sales. The Debtor will advance up to
$20,000 to HEP for its out-of-pocket marketing expenses. HEP will
be paid a fee calculated as follows:
a. for the three Facilities identified as the Waukesha Area
Ys: (i) if proposed stalking horse bidder YMCA of
Central Waukesha County, Inc., is ready, willing, and
able to close, $125,000 as a base fee for gross proceeds
up to the current proposed bid, plus 7% of any increase
in gross proceeds, from any disposition of any of the
three Facilities; (ii) If CWC is not ready, willing, and
able to close on its current proposed bid, then HEP's
fee would be 3% of gross proceeds from any disposition
of any of the three Facilities;
b. for the Facility identified as the Feith Family YMCA:
(i) if proposed stalking horse bidder Kettle Moraine
YMCA, Inc., is ready, willing, and able to close, then
$45,000 as a base fee for gross proceeds up to the
current proposed bid, plus 7% of any increase in gross
proceeds; (ii) if KMY is not ready, willing, and able to
close on its current proposed bid, then HEP's fee would
be 3% of gross proceeds from any disposition of this
Facility;
c. if any additional assets of the Debtor are included in a
sale in connection with the assets of the Waukesha Area
Ys or the Feith Family Y location, HEP's fee would be 3%
of gross proceeds on any transaction.
To the best of the Debtors' knowledge, HEP has no interest adverse
to the Debtors or to the Debtors' estate in the matters upon which
it is to be engaged; its employment would be in the best interest
of the estate; it is a "disinterested person" as defined in
Section 101(14) of the U.S. Bankruptcy Code; and HEP has no
connection with the Debtor, any creditors of the Debtor, any other
parties in interest, their respective attorneys and accountants,
the U.S. Trustee, or any other person employed in the office of
the U.S. Trustee.
About YMCA of Milwaukee
The Young Men's Christian Association of Metropolitan Milwaukee,
Inc., and affiliate, YMCA Youth Leadership Academy, Inc., filed
voluntary Chapter 11 bankruptcy petitions (Bankr. E.D. Wis. Case
Nos. 14-27174 and 14-27175) in Milwaukee, on June 4, 2014.
YMCA Milwaukee, which has more than 100,000 members using its
centers and camps, plans to sell a majority of its owned real
estate to help pay down $29 million in debt.
YMCA Milwaukee estimated $10 million to $50 million in both assets
and liabilities. YMCA Academy estimated $100,000 to $500,000 in
both assets and liabilities. The formal schedules of assets and
liabilities are due June 18, 2014.
The Debtors are seeking joint administration of their Chapter 11
cases for procedural purposes. The cases are assigned to Judge
Susan V. Kelley.
The Debtors have tapped Olivier H. Reiher, Esq., and Mark L. Metz,
Esq., at Leverson & Metz, S.C., in Milwaukee, as counsel.
YMCA OF MILWAUKEE: Amends Application to Employ Fox O'Neill
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The Young Men's Christian Association of Metropolitan Milwaukee,
Inc., and YMCA Youth Leadership Academy, Inc., amended their
application to employ Fox, O'Neill & Shannon, S.C., as special
real estate counsel.
The Debtors also wish to retain FOS to:
(i) negotiate an offer to purchase for three properties
owned by the Debtors located at 11311 West Howard
Avenue, Greenfield, Wisconsin; 2420 North 124th Street,
Wauwatosa, Wisconsin; and, N84 W17501 Menomonee Avenue,
Menomonee Falls, Wisconsin. These efforts resulted in
an offer to purchase executed on July 22, 2014. The
sale will be subject to additional offers that may be
generated pursuant to a process approved by the Court;
and
(ii) represent the Debtors in regard to the sale of
properties owned by Debtors at 161 West Wisconsin
Avenue, Milwaukee, Wisconsin, and 7333 South 27th
Street, Franklin, Wisconsin.
As reported by the Troubled Company Reporter on June 18, 2014, the
Debtors seek to employ FOS as their special counsel for matters
pertaining to the sale of real estate located at 1350 West
North Avenue, in Milwaukee, Wisconsin, to M.C. Preparatory School
of Milwaukee, LLC, and the simultaneous leaseback to the Debtors
of a portion of the North Avenue Facility, at which they will
continue to operate, without interruption, the Northside YMCA.
The FOS firm may also be asked to provide services to the Debtors
for other real estate transactions that may occur during the
course of these cases.
In the original application, the Debtors outlined their reasons
for their desire to employ FOS as their special counsel for
matters pertaining to the sale of real estate located at 1350 West
North Avenue, Milwaukee, Wisconsin to M.C. Preparatory School of
Milwaukee, LLC, and the simultaneous leaseback to the Debtors of a
portion of the North Avenue Facility.
The Debtors stated in the original application that FOS might be
needed to provide services for other real estate transactions that
could occur during the course of these cases. In an effort to
efficiently manage their Chapter 11 cases, the Debtors have
decided to sell other real estate assets on an expedited basis.
Accordingly, they will require the services of FOS to finalize
those additional sales.
FOS has been representing the Debtors in connection with the
negotiation of an offer to purchase for property located at 465
Northwoods Road, in the Village of Saukville, Wisconsin. This
representation has resulted in an offer to purchase that was
signed on June 30, 2014. The sale will be subject to additional
offers that may be generated pursuant to a process approved by the
court.
About YMCA of Milwaukee
The Young Men's Christian Association of Metropolitan Milwaukee,
Inc., and affiliate, YMCA Youth Leadership Academy, Inc., filed
voluntary Chapter 11 bankruptcy petitions (Bankr. E.D. Wis. Case
Nos. 14-27174 and 14-27175) in Milwaukee, on June 4, 2014.
YMCA Milwaukee, which has more than 100,000 members using its
centers and camps, plans to sell a majority of its owned real
estate to help pay down $29 million in debt.
YMCA Milwaukee estimated $10 million to $50 million in both assets
and liabilities. YMCA Academy estimated $100,000 to $500,000 in
both assets and liabilities. The formal schedules of assets and
liabilities are due June 18, 2014.
The Debtors are seeking joint administration of their Chapter 11
cases for procedural purposes. The cases are assigned to Judge
Susan V. Kelley.
The Debtors have tapped Olivier H. Reiher, Esq., and Mark L. Metz,
Esq., at Leverson & Metz, S.C., in Milwaukee, as counsel.
YMCA OF MILWAUKEE: Creditor's Panel Wants Navera as Fin'l Advisor
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The Official Committee of Unsecured Creditors of The Young Men's
Christian Association of Metropolitan Milwaukee, Inc., and YMCA
Youth Leadership Academy, Inc., asks the U.S. Bankruptcy Court for
the Eastern District of Wisconsin for authorization to retain
Navera Group, LLC, as financial advisor to the Committee nunc pro
tunc to July 30, 2014.
The Committee requires an independent financial advisor to help
the Committee, among other things, evaluate proposed sales and
leases of the Debtor's properties evaluate the Debtor's financial
condition in bankruptcy (including current and projected monthly
losses which are being funded via prior sale proceeds), evaluate
allegedly preferential payments, and analyze and work with the
Debtor on formulating a business plan for the remaining
properties. The Committee selected Navera as its financial
advisor on July 11, 2014, but held off on moving forward with an
application pending resolution of its counsel's retention
application.
The Committee contemplates that Navera will provide the full range
of services required to represent the Committee in the course of
this case including:
(a) assisting the Committee and counsel to the Committee in
reviewing and evaluating the Debtor's business plan and
associated financial projections;
(b) assisting the Committee to evaluate proposed sales and
leases that the Debtor proposes to enter into or engage
in;
(c) assisting the Committee and counsel to the Committee in
reviewing and evaluating the Debtor's business plan and
liquidation analysis;
(d) assisting the Committee and counsel to the Committee in
analyzing preference and other avoidance actions; and
(e) attending Bankruptcy Court hearings as necessary, and
attending and participating in meetings with the
Committee and counsel to the Committee as necessary.
Navera has estimated the cost of its services in this case will be
in these ranges:
Category Amount
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Schedules and Reporting - Review and Analysis $10,000-$20,000
Analysis of Sales and Leases $15,000-$20,000
Committee Meetings $5,000-$10,000
Secured Lender/Cash Collateral/Preference $15,000-$20,000
Cash Flow Analysis $20,000-$30,000
Plan and Disclosure Statement Analysis $25,000-$35,000
Claims Analysis $10,000-$15,000
TOTAL $100,000-$150,000
Ed Karas -- principal ($300/hour) -- is expected to be primarily
responsible for providing services to the Committee. In addition,
from time to time, it may be necessary for other Navera
professionals to provide services to the Committee.
The Committee requests that Navera's aggregate fee cap be set at
$125,000, subject to increase upon appropriate motion and notice.
To the best of the Committee's knowledge, Navera does not have any
connection with the Debtor, any other creditor of the same class
as the Committee, or other parties in interest or their respective
attorneys.
U.S. Trustee Patrick S. Layng has no objection to the retention of
Navera.
About YMCA of Milwaukee
The Young Men's Christian Association of Metropolitan Milwaukee,
Inc., and affiliate, YMCA Youth Leadership Academy, Inc., filed
voluntary Chapter 11 bankruptcy petitions (Bankr. E.D. Wis. Case
Nos. 14-27174 and 14-27175) in Milwaukee, on June 4, 2014.
YMCA Milwaukee, which has more than 100,000 members using its
centers and camps, plans to sell a majority of its owned real
estate to help pay down $29 million in debt.
YMCA Milwaukee estimated $10 million to $50 million in both assets
and liabilities. YMCA Academy estimated $100,000 to $500,000 in
both assets and liabilities. The formal schedules of assets and
liabilities are due June 18, 2014.
The Debtors are seeking joint administration of their Chapter 11
cases for procedural purposes. The cases are assigned to Judge
Susan V. Kelley.
The Debtors have tapped Olivier H. Reiher, Esq., and Mark L. Metz,
Esq., at Leverson & Metz, S.C., in Milwaukee, as counsel.
* BofA Deal Hung Up Over Penalties Tied to Countrywide, Merrill
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Christina Rexrode and Andrew Grossman, writing for The Wall Street
Journal, reported that negotiations between Bank of America Corp.
and the Justice Department have hit a snag over whether the firm
should pay a cash penalty for the dealings of Countrywide
Financial Corp. and Merrill Lynch & Co., according to people
familiar with the talks. Bank of America has offered $13 billion
to end the government's mortgage-securities probe, including a
combination of fines and consumer assistance, which could include
credit for measures such as writing down the values of mortgages
for struggling homeowners, but the Justice Department is demanding
billions more -- and wants a bigger chunk in fines, these people
said.
* Lloyds Bank to Pay $380MM+ Over Rate Manipulation Inquiries
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Chad Bray, writing for writing for The New York Times' DealBook,
reported that the Lloyds Banking Group agreed to pay more than
$380 million to British and United States authorities to resolve
investigations into the manipulation of rates, including one used
to determine fees paid by Lloyds for taxpayer-backed funding
during the financial crisis. The bank will also pay an additional
7.76 million British pounds, or about $13.2 million, to compensate
the Bank of England for the manipulation of another benchmark
rate, which was used to determine fees paid under an emergency
funding program for financial institutions during the financial
crisis, the report related.
* Lew Can Use Tax Rule to Slow Inversions, Ex-Official Says
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Richard Rubin, writing for Bloomberg News, reported that the U.S.
Treasury Department's former top international tax lawyer said the
department should use immediate stopgap regulations to make
offshore transactions known as corporate inversions less
lucrative. According to the report, citing Stephen Shay, the
administration can unilaterally limit inverted companies from
taking interest deductions in the U.S. or from accessing their
foreign cash without paying U.S. taxes.
* Moody's Tamps Down Concerns About Surge in Auto Loans
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Jessica Silver-Greenberg, writing for The New York Times'
DealBook, reported that Moody's Investors Service said the market
for auto loans may be bubbling with loans to borrowers with shoddy
credit, but it is not going to burst. The DealBook pointed out
that auto loans to people with troubled finances rose more than
130 percent in the five years immediately following the financial
crisis and some regulators, Wall Street analysts and even rival
credit rating agencies have warned that the surge in auto loans
has some of the disturbing hallmarks of the mortgage boom before
the financial crisis in 2008.
* Houlihan Lokey Invests in Bridge Strategy Group
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Houlihan Lokey disclosed that it has made a strategic investment
in Bridge Strategy Group, a Chicago-based management consulting
firm focused on strategy, operations, and performance improvement.
"As our clients look for unique strategies to increase shareholder
value beyond traditional investment banking solutions, this
investment enables Houlihan Lokey to provide our corporate and
financial sponsor relationships with access to top-tier management
consulting services. In addition to the market-leading valuation-
related consulting services we have been offering for four
decades, we are now also able to offer strategic and operational
solutions through this relationship," Houlihan Lokey said.
Founded in 1998 by alumni of McKinsey & Co., Bridge works with
boards, senior management teams, and financial sponsors to address
critical issues that often require a unique blend of strategic,
operational, organizational, and technology solutions. The firm
focuses on serving large- and mid-cap corporates as well as
financial sponsors, with particular expertise in the Industrials,
Healthcare, Energy, Financial Services, and Technology industries.
About Bridge Strategy Group
Bridge Strategy Group, founded in Chicago in 1998, is an
experience-led management consultancy committed to helping clients
rapidly improve business performance. Bridge's unique strategy
emphasizes active partner involvement, deployment of experienced
teams, and structuring work and relationships to successfully
apply strategic, operational, organizational, and technological
solutions to its clients' most critical management issues.
Hands-on expertise and a practical problem-solving approach enable
the Company to attain tangible results for our clients. Since its
inception, Bridge has been recognized by numerous industry
publications and analysts for its outstanding business model and
track record of success.
About Houlihan Lokey
Houlihan Lokey is an international investment bank with expertise
in mergers and acquisitions, capital markets, financial
restructuring, and valuation. The firm serves corporations,
institutions, and governments worldwide with offices in the United
States, Europe, and Asia. Independent advice and intellectual
rigor are hallmarks of its commitment to client success across our
advisory services. Houlihan Lokey is ranked as the No. 1 M&A
advisor for U.S. transactions under $3 billion, the No. 1 global
restructuring advisor, and the No. 1 M&A fairness opinion advisor
for U.S. transactions over the past 10 years, according to Thomson
Reuters.
*********
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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
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