/raid1/www/Hosts/bankrupt/TCR_Public/140929.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Monday, September 29, 2014, Vol. 18, No. 271
Headlines
AGFEED USA: Has Plan Exclusivity Through October 3
AMCAD HOLDINGS: Meeting to Form Creditors' Panel Set for Oct. 2
ARROW OF MICHIGAN: Voluntary Chapter 11 Case Summary
BALTIMORE BEHAVIORAL: Court Won't Reinstate JR Healthcare's Claim
BAPTIST HOME: Court Amends Order for Retention of Laura Solomon
BAPTIST HOME: Oct. 1 Hearing on Bid for Exclusivity Extensions
BBB INDUSTRIES: S&P Assigns 'B' CCR; Outlook Stable
CASTLETON APARTMENT: Case Summary & 15 Top Unsecured Creditors
CLARK ATLANTA UNIVERSITY: Moody's Affirms Ba1 Issuer Rating
CLOUDEEVA INC: Chapter 11 Case Reinstated, Dismissal Order Stayed
CLOUDEEVA INC: Hires Trenk DiPasquale as Counsel
CLOUDEEVA INC: Taps Cole Schotz as Appellate Counsel
CORE ENTERTAINMENT: S&P Retains 'B' CCR on CreditWatch Negative
CORNERSTONE HOMES: Oct. 2 Hearing on Sale of N.Y. Properties
CROWNROCK LP: S&P Raises CCR to 'B+'; Outlook Stable
EDISON MISSION: EME Reorganization Trust Closes Sale of EIX Notes
EMANUEL COHEN: Hires Stuart Brown as Accountant
EMMONS-SHEEPSHEAD: NY Court Throws Out Plan Appeal
ENERGY FUTURE: Round 1 Bid Deadline for Oncor Stake on October 23
ENERGY FUTURE: Lien Challenge Period Extended to Nov. 28
ENERGY FUTURE: Court Approves Sidley Austin as Corporate Counsel
ENERGY FUTURE: Court Denies Bid to Form EFH Corp Unsecured Panel
ENERGY FUTURE: Can File Chapter 11 Plan Until February 2015
ESSAR STEEL: S&P Cuts Rating to 'D' on Missed Principal Repayment
FOX TROT: Bank Won't Object to Conversion, Insists on Foreclosure
GENERAL MOTORS: S&P Raises CCR to 'BBB-' From 'BB+'
GLOBAL COMPUTER: Taps McGuireWoods LLP as Counsel
GLOBAL COMPUTER: Hires WeinsweigAdvisors LLC as Financial Advisor
GLOBAL COMPUTER: Hires Saggar & Rosenberg as Accountant
GLOBAL COMPUTER: Taps Asgaard Capital as Investment Banker
GOLDEN STATE PETROLEUM: S&P Affirms 'B-' Rating & Revises Outlook
GOLFSMITH INTERNATIONAL: S&P Lowers CCR to 'B-'; Outlook Negative
GROUP HEALTH: A.M. Best Upgrades Fin'l Strength Rating from 'C+'
GUARANTY INCOME: A.M. Best Upgrades FSR from 'B'
HENRY COMPANY: Moody's Assigns B2 Rating on Senior 1st Lien Debt
ITR CONCESSION: Oct. 28 Hearing for Prepackaged Plan Set
JEFFERY P. ALEXANDER: Seeks Authority to Use Cash Collateral
JOHN D. OIL: Bank Seeks Relief From Stay to Divest Lien on Asset
JOHN D. OIL: Files Ballot Summary for Holders of Class 4 Claims
JOHN D. OIL: RBS Citizens Files Objection to Plan Confirmation
KEY ENERGY: S&P Revises Outlook to Neg. & Affirms 'BB-' CCR
LEHMAN BROTHERS: To Make 6th Payout Totaling $10.9 Billion
LIBERTY BRANDS: Case Trustee Loses Avoidance Suit
LV HARMON: Trust Seeks Relief From Stay to Sell Las Vegas Asset
LXR HOSPITALITY: Forbearance Terms Extended to May 2015
LONGHOUSE HOSPITALITY: Forbearance Agreement Through June 2015
METALDYNE PERFORMANCE: S&P Assigns 'BB-' CCR; Outlook Stable
MGM RESORTS: Fitch Upgrades Issuer Default Ratings to 'B+'
MICHAEL PEGLER: Pacific Western's Bid for Summary Judgment Denied
MUNIRE FURNITURE: Meeting to Form Creditors' Panel Set for Oct. 1
OMNITRACS INC: Moody's Affirms Caa1 Rating on 2nd Lien Facilities
PLANT INSULATION: OneBeacon et al's Appeal Period Terminated
PMC MARKETING: PREPA Wins Favorable Ruling From 1st Cir. BAP
POSEIDON CONCEPTS: King Oil Loses Bid for Stay Relief
RAMZ REAL ESTATE: Case Summary & 4 Top Unsecured Creditors
READYCAP 2014-1: DBRS Assigns (P)'BB' Rating to Class F
ROKMASTER RESOURCES: AM Gold Delivers Notice of Default
SEARS METHODIST: Wants Plan Exclusivity Moved Thru Dec. 7
SELKIRK 2014-3A: DBRS Assigns 'B' Rating to Class F Notes
SELKIRK 2014-3V: DBRS Assigns 'BB' Rating to Class E Notes
SEQUA CORPORATION: Moody's Lowers Corporate Family Rating to Caa1
SEVEN COUNTIES: KERS May Appeal Directly to 6th Cir.
SGK VENTURES: May Hire Mulcahy Pauritsch as Benefits Plan Auditor
UNIVERSAL COOPERATIVES: Files Amended Schedules E and F
VANGUARD NATURAL: S&P Affirms 'B+' Rating; Outlook Stable
WESTGATE NURSING: Oversight to Cost Panel, PCO Lawyers Their Fees
*********
AGFEED USA: Has Plan Exclusivity Through October 3
--------------------------------------------------
The Hon. Brenda L. Shannon of the U.S. Bankruptcy Court for the
District of Delaware extended the exclusive periods of AgFeed USA,
LLC and its debtor-affiliates to:
a) file a Chapter 11 plan through and including Oct. 3, 2014,
and
b) solicit acceptances from creditors of that plan until Dec. 2,
2014.
The Debtors told the Court that their second amended Chapter 11
plan resolves a number of complex issues the various
constituencies had with their initial and first amended plan. The
Debtors noted that they expect that these resolutions will allow
for the confirmation process to move forward efficiently and on a
largely consensual basis.
The Debtors added they are in a position to set a confirmation
timetable, and will seek to do so under a solicitation procedures
motion. However, in order to file and solicit acceptances of the
second amended plan, the exclusive periods must be further
extended.
About AgFeed Industries
AgFeed Industries, Inc., has 21 farms and five feed mills in China
producing more than 250,000 hogs annually. In the U.S., the
business included 10 sow farms in three states and two feed mills
producing more than one million hogs a year. AgFeed's revenue in
2012 was $244 million.
AgFeed and its affiliates filed voluntary petitions under Chapter
11 of the Bankruptcy Code (Bankr. D. Del. Case No. 13-11761) on
July 15, 2013, with a deal to sell most of its subsidiaries to The
Maschhoffs, LLC, for cash proceeds of $79 million, absent higher
and better offers. The Debtors estimated assets of at least $100
million and debts of at least $50 million.
Keith A. Maib signed the petition as chief restructuring officer.
Hon. Brendan Linehan Shannon presides over the case. Donald J.
Bowman, Jr., and Robert S. Brady, Esq., at Young, Conaway,
Stargatt & Taylor, serve as the Debtors' counsel. BDA Advisors
Inc. acts as the Debtors' financial advisor. The Debtors' claims
and noticing agent is BMC Group, Inc.
The U.S. Trustee has appointed a five-member official committee of
unsecured creditors to the Chapter 11 cases. The Creditors'
Committee tapped Lowenstein Sandler as lead bankruptcy counsel and
Greenberg Traurig, LLP, as co-counsel. CohnReznick LLP serves as
the Creditors' Committee's financial advisor.
An official committee of equity security holders was also
appointed to the Chapter 11 cases. The Equity Committee tapped
Sugar Felsenthal Grais & Hammer LLP and Elliott Greenleaf as
co-counsel.
Jefferies Leveraged Credit Products and Claims Recovery Group are
represented by Lawrence J. Kotler, Esq., and Catherine B.
Heitzenrater, Esq., at Duane Morris, LLP.
AMCAD HOLDINGS: Meeting to Form Creditors' Panel Set for Oct. 2
---------------------------------------------------------------
Roberta A. DeAngelis, United States Trustee for Region 3, will
hold an organizational meeting on Oct. 2, 2014, at 10:00 a.m. in
the bankruptcy case of AmCad Holdings, LLC, et al. The meeting
will be held at:
J. Caleb Boggs Federal Building
844 King St., Room 5209
Wilmington, DE 19801
The sole purpose of the meeting will be to form a committee or
committees of unsecured creditors in the Debtors' case.
The organizational meeting is not the meeting of creditors
pursuant to Section 341 of the Bankruptcy Code. A representative
of the Debtor, however, may attend the Organizational Meeting, and
provide background information regarding the bankruptcy cases.
To increase participation in the Chapter 11 proceeding, Section
1102 of the Bankruptcy Code requires that the United States
Trustee appoint a committee of unsecured creditors as soon as
practicable. The Committee ordinarily consists of the persons,
willing to serve, that hold the seven largest unsecured claims
against the debtor of the kinds represented on the committee.
Section 1103 of the Bankruptcy Code provides that the Committee
may consult with the debtor, investigate the debtor and its
business operations and participate in the formulation of a plan
of reorganization. The Committee may also perform other services
as are in the interests of the unsecured creditors whom it
represents.
ARROW OF MICHIGAN: Voluntary Chapter 11 Case Summary
----------------------------------------------------
Debtor: Arrow of Michigan, Inc.
dba Arrow Restoration Services
dba Arrow Building Maintenance
dba Arrow Specialty Cleaning
dba Arrow Building Maintenance
dba First Call Disaster Response & Restoration
dba www.teamfirstcall.com
311 28th St SE
Grand Rapids, MI 49548
Case No.: 14-06240
Chapter 11 Petition Date: September 25, 2014
Court: United States Bankruptcy Court
Western District of Michigan (Grand Rapids)
Judge: Hon. James W. Boyd
Debtor's Counsel: A. Todd Almassian, Esq.
KELLER & ALMASSIAN PLC
2810 East Beltline Ln, NE
Grand Rapids, MI 49525
Tel: (616) 364-2100
Email: ecf@kalawgr.com
Estimated Assets: $500,000 to $1 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Matthew J. Penny, president.
A list of the Debtor's 20 largest unsecured creditors is available
for free at http://bankrupt.com/misc/miwb14-06240.pdf
BALTIMORE BEHAVIORAL: Court Won't Reinstate JR Healthcare's Claim
-----------------------------------------------------------------
A party's failure to amend its request for administrative claimant
status as instructed, failure to respond to objections to the
request, and subsequent failure to appear at the hearing on the
request, which then collectively leads to the request's denial,
does not warrant reconsideration and revival of the request,
Bankruptcy Judge Robert A. Gordon has ruled.
In the chapter 11 case of Baltimore Behavioral Health, Inc., JR
Health Care, the buyer of the Debtor's assets, seeks (1) the
vacatur of the Order Denying Request for Administrative Claim
entered on October 23, 2013, and (2) to be allowed a third bite at
the evidentiary apple on its assertion that the sum of $149,903.13
(allegedly paid by JR to sustain the Debtor's failing operations)
should be approved and paid with the favored status of an
administrative claim pursuant to 11 U.S.C. Sec. 503(b).
Ronald M. Drescher, Esq., counsel for JR, blamed himself, his
vacation and his medication for his failure to appear at the
hearing.
"While the Court appreciates [Mr. Drescher's] candor, and has
sympathy for his dilemma, it cannot move the needle in JR's favor.
JR's claim was insufficient on its face. It did not take the
opportunity that was expressly extended to it to try and
strengthen its position while also revealing the elements of its
alleged claim to its opponents. Then it failed to appear at the
hearing. Yet, it is not the failure to appear alone that binds JR
but what went on before. In this context, JR must live with these
mis-steps," Judge Gordon said, citing Universal Film Exchanges,
Inc. v Lust, 479 F.2d 573, 576 (4th Cir. 1973) ("[U]nder our
adversarial system of justice, the client must pay, at least
initially, the penalty of his counsel's neglect.").
A copy of the Court's September 23, 2014 Memorandum Opinion is
available at http://is.gd/0HwEcFfrom Leagle.com.
Baltimore Behavioral Health, Inc., filed for Chapter 11 bankruptcy
(Bankr. D. Md. Case No. 12-32919) on December 28, 2012. Judge
Robert A. Gordon oversees the case. Jeffrey M. Sirody, Esq., at
Sirody, Freiman & Associates, P.C., served as counsel to the
Debtor. In its petition, the Debtor estimated $100,001 to
$500,000 in assets and $1 million to $10 million in liabilities.
A list of the Debtor's 20 largest unsecured creditors filed
together with the petition is available for free at
http://bankrupt.com/misc/mdb12-32919.pdf The petition was signed
by Terry T. Brown, chief executive officer.
Mark J. Friedman, Esq., at DLA Piper was appointed Chapter 11
Trustee on February 26, 2013. His priority tasks were to (1) try
and sell the Debtor's business as a going concern, (2) fend off
the Debtor's landlord, West Pratt Holdings, LLC, from evicting the
Debtor's operations and (3) generally bring order to chaos while
maintaining the Debtor's precarious value. A sale of
substantially all of the Debtor's assets to to JR Health Care was
approved by order entered on August 21, 2013.
BAPTIST HOME: Court Amends Order for Retention of Laura Solomon
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Pennsylvania
granted The Baptist Home of Philadelphia and The Baptist Home
Foundation's motion to amend the order authorizing the retention
and employment of Laura Solomon and Associates.
The Retention Order is amended to provide that the employment of
LS&A as corporate and tax counsel to the Debtors is effective as
of the Petition Date.
About The Baptist Home of Philadelphia
The Baptist Home of Philadelphia and The Baptist Home Foundation
sought Chapter 11 protection (Bankr. E.D. Pa. Case Nos. 14-13305
and 14-13306) in Philadelphia on April 25, 2014.
Baptist Home of Philadelphia is a Pennsylvania nonprofit
corporation that owns and operates a continuing care retirement
community known as "Deer Meadows Retirement Community", which is
located at 8301 Roosevelt Boulevard, Philadelphia, Pennsylvania.
Home offers 126 living accommodations, which vary in size, for
independent living and personal care. It presently also has 206
skilled nursing beds in the nursing and rehabilitation center that
offers short and long term care. It has 369 employees.
Baptist Home of Philadelphia disclosed $37,330,904 in assets and
$34,562,834 in liabilities as of the Chapter 11 filing.
The Debtors have tapped Cozen O'Connor as counsel and KPMG
Corporate Finance LLC as financial advisor and investment banker.
The U.S. Trustee appointed Wilmarie Gonzalez as patient care
ombudsman.
U.S. Bank National Association, the trustee with regard to the
secured bond indebtedness, hired Reed Smith LLP as counsel and
CohnReznick LLP as financial advisor.
Pepper Hamilton LLP represents the Official Committee of Unsecured
Creditors.
BAPTIST HOME: Oct. 1 Hearing on Bid for Exclusivity Extensions
--------------------------------------------------------------
The United States Bankruptcy Court for the Eastern District of
Pennsylvania will convene a hearing on October 1, 2014, at 12:00
p.m., to consider The Baptist Home of Philadelphia, et al.'s
motion to extend exclusivity period for filing a Chapter 11 plan
and disclosure statement.
The Debtors are requesting for an extension of their time to file
a plan of reorganization until October 22, 2014, and solicit
acceptances for that plan until December 22. This was the
Debtors' first request for an extension.
About The Baptist Home of Philadelphia
The Baptist Home of Philadelphia and The Baptist Home Foundation
sought Chapter 11 protection (Bankr. E.D. Pa. Case Nos. 14-13305
and 14-13306) in Philadelphia on April 25, 2014.
Baptist Home of Philadelphia is a Pennsylvania nonprofit
corporation that owns and operates a continuing care retirement
community known as "Deer Meadows Retirement Community", which is
located at 8301 Roosevelt Boulevard, Philadelphia, Pennsylvania.
Home offers 126 living accommodations, which vary in size, for
independent living and personal care. It presently also has 206
skilled nursing beds in the nursing and rehabilitation center that
offers short and long term care. It has 369 employees.
Baptist Home of Philadelphia disclosed $37,330,904 in assets and
$34,562,834 in liabilities as of the Chapter 11 filing.
The Debtors have tapped Cozen O'Connor as counsel and KPMG
Corporate Finance LLC as financial advisor and investment banker.
The U.S. Trustee appointed Wilmarie Gonzalez as patient care
ombudsman.
U.S. Bank National Association, the trustee with regard to the
secured bond indebtedness, hired Reed Smith LLP as counsel and
CohnReznick LLP as financial advisor.
Pepper Hamilton LLP represents the Official Committee of Unsecured
Creditors.
BBB INDUSTRIES: S&P Assigns 'B' CCR; Outlook Stable
---------------------------------------------------
Standard & Poor's Ratings Services said it assigned its 'B'
corporate credit rating to Alabama-based BBB Industries Lux
Holdings S.ar.l. and to BBB Industries LLC. The outlook is
stable.
At the same time, S&P assigned its 'B' issue-level and '3'
recovery ratings to the company's $70 million revolving credit
facility and $275 million first-lien term loan. The '3' recovery
rating indicates S&P's expectation that debtholders would realize
average recovery (50%-70%) in the event of a payment default. S&P
also assigned its 'CCC+' issue-level and '6' recovery ratings to
the company's $120 million second-lien term loan. The '6'
recovery rating indicates S&P's expectation that debtholders would
realize negligible recovery (0%-10%) in the event of a payment
default. The borrower of the new debt is BBB Industries US
Holdings Inc.
BBB Industries LLC previously carried a private rating. S&P will
subsequently withdraw the 'B' rating on it upon completion of the
acquisition.
"The ratings reflect the company's 'highly leveraged' financial
risk profile, incorporating our expectations that debt to EBITDA
will remain above 5x on a sustained basis," said Standard & Poor's
credit analyst Lawrence Orlowski.
Pamplona is injecting $193 million of equity into the company,
consisting mostly of preferred shares and common equity. Under
S&P's criteria that addresses the treatment of non-common equity
financing, S&P concluded that the preferred shares should be
treated as equity and therefore their market value is not included
in the calculation of S&P's debt-based credit measures.
The ratings also reflect the company's "weak" business risk
profile as a relatively small participant in the intensely
competitive automotive aftermarket. Its geographic reach is
concentrated in North America, but BBB Industries continues to
improve its customer diversification. The company's direct
customers are warehouse distributors, independent retailers, and
big box retailers. While the top customer represented close to
50% of gross revenue in 2013, S&P expects that figure to fall to
the mid-30% level because of new customer wins. S&P also believes
this momentum of wins in the retail segment will continue to
reduce the level of customer concentration.
The stable outlook reflects S&P's expectation that the company's
debt to EBITDA will remain greater than 5x and that free operating
cash flow will be at least breakeven over the next 12 months.
S&P could raise the ratings if BBB Industries' leverage falls
below 5x and if the company generates a ratio of free operating
cash flow to debt of over 5% on a sustained basis. However, S&P
would not likely raise the rating above 'B+', given the private-
equity ownership and potential for an eventual recapitalization or
sale to another financial sponsor.
S&P could lower the ratings if EBITDA declines more than expected
in 2014, because of competitive or operational difficulties, and,
as a consequence, the company's leverage rises substantially above
5x or if it generates negative free operating cash flow on a
sustained basis.
CASTLETON APARTMENT: Case Summary & 15 Top Unsecured Creditors
--------------------------------------------------------------
Debtor: Castleton Apartment Complex Associates
106 E. North Street
New Castle, PA 16101
Case No.: 14-23849
Nature of Business: Single Asset Real Estate
Chapter 11 Petition Date: September 25, 2014
Court: United States Bankruptcy Court
Western District of Pennsylvania (Pittsburgh)
Judge: Hon. Jeffery A. Deller
Debtor's Counsel: Eugene D. Frank, Esq.
LAW OFFICES OF EUGENE D. FRANK, P.C.
P.O. Box 845
Pittsburgh, PA 15230
Tel: 412-366-4276
Fax: 412-366-4305
Email: efrank.esq@comcast.net
Estimated Assets: $500,000 to $1 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Thomas J. George, general partner.
A list of the Debtor's 15 largest unsecured creditors is available
for free at http://bankrupt.com/misc/pawb14-23849.pdf
CLARK ATLANTA UNIVERSITY: Moody's Affirms Ba1 Issuer Rating
-----------------------------------------------------------
Moody's Investors Service has affirmed the Ba1 issuer rating on
Clark Atlanta University, GA (CAU). The outlook is stable.
Summary Rating Rationale
The Ba1 rating reflects the university's established student
market, donor support, budgetary discipline and manageable
leverage with rapidly declining debt service commitments. These
credit strengths are offset by the university's challenging market
position with limited ability to increase net tuition revenue and
thin financial resource base. Additional challenges relate to the
potential credit impact of the stressed operations of the ADA/CAU
Partners student housing project at the university.
The stable outlook reflects management's proven track record of
prudent fiscal management and ability to adjust expenses in light
of enrollment softness. In spite of recent enrollment declines,
the university has demonstrated the ability to maintain operating
cash flow, financial resources, and liquidity.
Strengths
*Strong financial management with a proven track record of
stringent expense control and enhanced financial controls and
reporting.
*Improved operating performance in spite of enrollment declines
and stagnant operating revenues resulting from careful expense
control.
*Revenue diversity is aided by grants and contracts that were 18%
of revenues in FY2013.
*Declining debt service commitments and favorable cost of capital
through participation in the U.S. Department of Education
Historically Black College and University Capital Financing
Program.
Challenges
*Competitive market environment for students as indicated by a low
yield and declining net tuition per student in FY 2013, as net
tuition per student of $15,851, edged down 2%.
*Ongoing capital needs could become a competitive issue for the
university. Capital spending between fiscal years 2010 and 2013
averaged just 60% of depreciation expense, indicating limited
renewal and replacement.
*Dependence on federal funding through grants and contracts and
for financial aid, as well as related exposure to federal fiscal
pressures or budget delays.
*Modest financial resource base relative to operations. At the end
of FY 2013, expendable financial resources of $46.2 million
cushioned operations by 0.54 times.
*Third-party student housing project on the university's campus
under financial distress. The project comprises approximately half
of the university's housing stock.
Outlook
The stable outlook reflects expectations of continued ability to
generate cash flow sufficient to cover debt service, build
reserves and invest in facilities. The stable outlook is also
predicated on the university's lack of borrowing plans and
expectations of continued donor support.
What Could Make The Rating Go Up
The rating could move up through improvement in ability to
generate net tuition revenue or material growth in financial
resources through fundraising.
What Could Make The Rating Go Down
Downward pressure could come from a decline in net tuition
revenue, material increase in debt, weakened operating
performance, or decline in financial resources.
Rating Methodology
The principal methodology used in this rating was U.S. Not-for-
Profit Private and Public Higher Education published in August
2011.
CLOUDEEVA INC: Chapter 11 Case Reinstated, Dismissal Order Stayed
-----------------------------------------------------------------
Judge Joel A. Pisano of the U.S. District Court for the District
of New Jersey stayed the order dismissing the bankruptcy cases of
Cloudeeva, Inc., a Delaware corporation, and Cloudeeva, Inc., a
Florida corporation. The Dismissal Order is stayed pending
further proceedings before the District Court.
Cloudeeva has filed an appeal from the Dismissal Order, which was
entered by the Hon. Kathryn C. Ferguson of the U.S. Bankruptcy
Court for the District of New Jersey on August 22, 2014.
Subsequently, Cloudeeva asked the District Court to stay the
Dismissal Order pending the appeal. Creditor Robert Kaleta
objected to the motion for a stay arguing that granting the
request would be tantamount to perpetuating Cloudeeva's misuse of
the bankruptcy process as a bad faith litigation tactic.
As reported by the TCR on Aug. 25, 2014, Bartronics Asia PTE Ltd.
sought the dismissal, claiming that the cases were not filed in
good faith. On Aug. 15, 2014, the Debtors responded, saying that
BAPL sought the appointment of a Chapter 11 trustee or the
dismissal of the Chapter 11 cases based on allegations of fraud,
dishonesty and mismanagement, none of which are supported by
competent evidence and all of which are unrelated to the operation
of the Debtors' business. The Debtors denied the allegations.
District Court Reinstated Bankruptcy Cases
Judge Pisano ruled that the bankruptcy cases are reinstated in the
Bankruptcy Court and the Debtors are authorized to be in
possession of their assets and the management of their business as
debtors-in-possession, subject to the continuing jurisdiction of
the Bankruptcy Court and any further orders of the Bankruptcy
Court or the District Court. Judge Pisano added that all orders
previously entered in the Bankruptcy Court (except for the
Dismissal Order) are in effect in accordance with their terms,
pending further proceedings before the District Court and the
Bankruptcy Court.
About Cloudeeva, Inc.
Cloudeeva, Inc., a public company previously known as Systems
America, Inc., is a global cloud services and technology solutions
company specializing in cloud, big data and mobility solutions and
services. The company provides information technology staffing
services to major clients and third party vendors in the United
States and India. The company headquarters are in East Windsor,
New Jersey, with regional offices in California, Illinois and
international offices in India.
Cloudeeva, Inc., and its affiliates sought Chapter 11 bankruptcy
protection (Bankr. D.N.J. Lead Case No. 14-24874) in Trenton, New
Jersey, on July 21, 2014.
Cloudeeva estimated assets of at least $10 million and debt of
less than $10 million. The company said only $209,000 is owing to
its lender Prestige Capital Corp. and more than $5.2 million is
owed for trade vendor payables.
The cases are assigned to Judge Kathryn C. Ferguson. The Debtors
are seeking joint administration of their Chapter 11 cases for
procedural purposes.
The Debtors have tapped Lowenstein Sandler LLP as counsel, and
Kurtzman Carson Consultants LLC as claims and noticing agent.
According to the docket, the Debtors' exclusive right to file a
plan expires on Nov. 18, 2014. The Court granted the Debtors an
extension until Aug. 20, 2014 of time to file schedules of assets
and liabilities, and statements of financial affairs.
CLOUDEEVA INC: Hires Trenk DiPasquale as Counsel
------------------------------------------------
Cloudeeva, Inc., et al., seek authorization from the Hon. Kathryn
C. Ferguson of the U.S. Bankruptcy Court for the District of New
Jersey to employ Trenk, DiPasquale, Della Fera & Sodono, P.C. as
counsel.
The Debtors require Trenk DiPasquale to:
(a) advise the Debtors with respect to the power, duties and
responsibilities in the continued management of their
properties and financial affairs as debtors, including the
rights and remedies of the Debtors-in-Possession with
respect to their assets and with respect to the claims of
creditors;
(b) advise the Debtors with respect to preparing and obtaining
approval of a Disclosure Statement and Plan of
Reorganization;
(c) prepare on behalf of the Debtors, as necessary,
applications, motions, complaints, answers, orders, reports
and other pleadings and documents;
(d) appear before the Bankruptcy Court and other officials
and tribunals, if necessary, and protecting the interests
of the Debtors in federal, state and foreign jurisdictions
and administrative proceedings;
(e) negotiate and prepare documents relating to the use,
Reorganization and disposition of assets, as requested by
the Debtors;
(f) negotiate and formulate one or more Disclosure Statements
and Plans of Reorganization;
(g) advise the Debtors concerning the day-to-day operations of
its business and the administration of its estate as
debtor-in-possession; and
(h) perform such other legal services for the Debtors, as may
be necessary and appropriate herein.
Trenk DiPasquale will be paid at these hourly rates:
Sam Della Fera, Jr., Partner $540
Anthony Sodono III, Partner $550
Shoshana Schiff, Partner $425
Partners $350-$590
Associates $225-$350
Law Clerks $185-$195
Paralegals and Support Staff $125-$210
Trenk DiPasquale will also be reimbursed for reasonable out-of-
pocket expenses incurred.
Trenk DiPasquale has received a post-petition retainer from the
Debtor in the amount of $100,000. Future compensation shall be
paid by the Debtor from revenues, which fees will be subject to
Bankruptcy Court approval.
Sam Della Fera, Jr., partner of Trenk DiPasquale, assured the
Court that the firm is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code and does not
represent any interest adverse to the Debtors and their estates.
Trenk DiPasquale can be reached at:
Sam Della Fera, Jr., Esq.
TRENK, DiPASQUALE,
DELLA FERA & SODONO, P.C.
347 Mt. Pleasant Ave., Ste 300
West Orange, NJ 07052
Tel: (973) 243-8600
About Cloudeeva, Inc.
Cloudeeva, Inc., a public company previously known as Systems
America, Inc., is a global cloud services and technology solutions
company specializing in cloud, big data and mobility solutions and
services. The company provides information technology staffing
services to major clients and third party vendors in the United
States and India. The company headquarters are in East Windsor,
New Jersey, with regional offices in California, Illinois and
international offices in India.
Cloudeeva, Inc., and its affiliates sought Chapter 11 bankruptcy
protection (Bankr. D.N.J. Lead Case No. 14-24874) in Trenton, New
Jersey, on July 21, 2014.
Cloudeeva estimated assets of at least $10 million and debt of
less than $10 million. The company said only $209,000 is owing to
its lender Prestige Capital Corp. and more than $5.2 million is
owed for trade vendor payables.
The cases are assigned to Judge Kathryn C. Ferguson. The Debtors
are seeking joint administration of their Chapter 11 cases for
procedural purposes.
The Debtors have tapped Lowenstein Sandler LLP as counsel, and
Kurtzman Carson Consultants LLC as claims and noticing agent.
According to the docket, the Debtors' exclusive right to file a
plan expires on Nov. 18, 2014.
CLOUDEEVA INC: Taps Cole Schotz as Appellate Counsel
----------------------------------------------------
Cloudeeva, Inc., et al., seek authorization from the Hon. Kathryn
C. Ferguson of the U.S. Bankruptcy Court for the District of New
Jersey to employ Cole, Schotz, Meisel, Forman & Leonard, P.A. as
appellate counsel, nunc pro tunc to Sept. 10, 2014.
Cole Schotz will prosecute the appeal (the "Appeal") of the
Bankruptcy Court's August 22, 2014 order (the "Dismissal Order")
dismissing the Cases, Civ. Action No. 14-cv-05587 (JAP), and
perform all other legal services for and on behalf of the Debtors
which may be necessary or appropriate in connection with the
Appeal.
By separate application, the Debtors have sought the Court's
approval to employ Trenk, DiPasquale, Della Fera & Sodono, P.C.
("Trenk") as their bankruptcy counsel. None of the matters for
which Trenk is being retained involves the Appeal and, therefore,
the services rendered and functions to be performed by Trenk will
not be duplicative of the work to be performed by Cole Schotz. In
any event, Cole Schotz will coordinate with Trenk to avoid
duplication of effort.
Cole Schotz will be paid at these hourly rates:
Members $365-$825
Associates $210-$400
Paralegals $185-$250
Litigation Support
Specialists $250-$350
Cole Schotz will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Pursuant to an engagement letter between the Debtors and Cole
Schotz dated August 26, 2014 (the "Engagement Agreement"), Cole
Schotz received a retainer of $100,000.00 from the Debtors. On
Sept. 5, 2014, Cole Schotz applied $22,424.83 of the retainer to
pay its invoice dated Sept. 5, 2014 for services rendered and
disbursements incurred between Aug. 26, 2014 and Aug. 31, 2014. On
Sept. 8, 2014, in accordance with the Engagement Agreement, the
Debtors replenished the retainer in the amount of $22,424.83. On
September 9, 2014, Cole Schotz applied $70,628.28 of the retainer
to pay an invoice dated Sept. 9, 2014, for services rendered and
expenses incurred between Sept. 1, 2014 and Sept. 9, 2014. On
Sept. 9, 2014, the Debtors replenished the retainer in the amount
of $70,628.28 such that the retainer as of the close of business
on Sept. 9, 2014 was $100,000 (the "Retainer") for legal services
to be rendered following reinstatement of the Cases in connection
with the Appeal.
Michael D. Sirota, member of Cole Schotz, assured the Court that
the firm is a "disinterested person" as the term is defined in
Section 101(14) of the Bankruptcy Code and does not represent any
interest adverse to the Debtors and their estates.
Cole Schotz can be reached at:
Michael D. Sirota, Esq.
COLE, SCHOTZ, MEISEL, FORMAN & LEONARD, P.A.
Court Plaza North
25 Main Street
P.O. Box 800
Hackensack, NJ 07602-0800
Tel: (201) 489-3000
Fax: (201) 489-1536
About Cloudeeva, Inc.
Cloudeeva, Inc., a public company previously known as Systems
America, Inc., is a global cloud services and technology solutions
company specializing in cloud, big data and mobility solutions and
services. The company provides information technology staffing
services to major clients and third party vendors in the United
States and India. The company headquarters are in East Windsor,
New Jersey, with regional offices in California, Illinois and
international offices in India.
Cloudeeva, Inc., and its affiliates sought Chapter 11 bankruptcy
protection (Bankr. D.N.J. Lead Case No. 14-24874) in Trenton, New
Jersey, on July 21, 2014.
Cloudeeva estimated assets of at least $10 million and debt of
less than $10 million. The company said only $209,000 is owing to
its lender Prestige Capital Corp. and more than $5.2 million is
owed for trade vendor payables.
The cases are assigned to Judge Kathryn C. Ferguson. The Debtors
are seeking joint administration of their Chapter 11 cases for
procedural purposes.
The Debtors have tapped Lowenstein Sandler LLP as counsel, and
Kurtzman Carson Consultants LLC as claims and noticing agent.
According to the docket, the Debtors' exclusive right to file a
plan expires on Nov. 18, 2014.
CORE ENTERTAINMENT: S&P Retains 'B' CCR on CreditWatch Negative
---------------------------------------------------------------
Standard & Poor's Ratings Services said that its ratings on CORE
Entertainment Inc., including the 'B' corporate credit rating,
remain on CreditWatch, where S&P placed them with negative
implications on March 31, 2014.
"The CreditWatch placement is based on CORE's weak operating
performance through first-quarter 2014 and continued rating
declines for the most recent seasons of both 'American Idol' and
'So You Think You Can Dance'," said Standard & Poor's credit
analyst Chris E Valentine.
Since the CreditWatch placement, the company's cash balances
increased with the sale of the Elvis Presley Enterprises Inc. and
Muhammad Ali Enterprises LLC businesses for approximately $120
million. This helps near-term liquidity, but, given business
trends, it does not reduce the refinancing risk surrounding the
company's bullet maturities of $200 million in 2017 and $160
million in 2018.
S&P's negative CreditWatch placement reflects its expectation that
performance of CORE's programming portfolio will continue to
decline over the next few seasons. S&P expects to resolve the
CreditWatch placement within the next 90 days after receiving
additional clarity from management regarding CORE's financial
policy and progress toward reaching a joint venture with Fox.
Despite the increase in cash, S&P expects that the business will
likely remain under pressure over the next 12-18 months. Absent a
meaningful reversal in performance of "American Idol," S&P would
likely consider a downgrade if the company is unable to agree on a
joint venture with Fox or if it doesn't use the majority of the
proceeds from the sale of the Ali and Presley businesses to pay
down debt.
CORNERSTONE HOMES: Oct. 2 Hearing on Sale of N.Y. Properties
------------------------------------------------------------
The United States Bankruptcy Court for the Western District of New
York will hold a hearing on October 2, 2014, at 9:00 a.m., to
consider a sale motion filed by Michael H. Arnold, Chapter 11
Trustee in the bankruptcy case of Cornerstone Homes, Inc.
The Motion seeks an order authorizing the sale of the estate's
interest in certain parcels of real property, to wit:
* 6450 Gardner Road, Wheeler, New York;
* 19 North Main Street, Cohocton, New York;
* 6280 Cayutaville Road, Catherine, New York;
* 5809 High Street, Alma, New York; and
* 5129 & 5131 Route 248, Canisteo, New York.
All listed properties are purportedly subject to mortgage liens
held by Community Preservation Corp. According to the Trustee,
all properties are in a state of disrepair as to render them
uninhabitable. The cost of repair is prohibitive to the estate,
and the properties are a burden to the estate, and are not needed
for any plan of reorganization.
The Trustee seeks an order authorizing the sale of the properties,
free and clear of all liens. The properties will be sold at
absolute auction, without any minimum bid, as is, where is,
subject only to any outstanding real property taxes owed. Any net
proceeds after all costs of sale, will be paid to Community
Preservation Corporation.
The actual sale will be scheduled, and a Notice of Intent to Sell
will be filed and served as required, only after an Order
authorizing the sale free and clear of liens is granted.
About Cornerstone Homes
Cornerstone Homes Inc. is based in Corning, New York and is
engaged in the business of buying, selling and leasing single
family homes in the State of New York, with such properties
primarily located in the South Central and South Western portions
of the State.
Cornerstone Homes Inc., filed a Chapter 11 petition (Bankr.
W.D.N.Y. Case No. 13-21103) on July 15, 2013, in Rochester
alongside a reorganization plan already accepted by 96 percent of
unsecured creditors' claims.
The Debtor disclosed assets of $18,561,028 and liabilities of
$36,248,526. Four secured lenders with $21.8 million in claims
are to be paid in full under the plan. Unsecured creditors --
chiefly noteholders with $14.5 million in claims -- will have a 7
percent recovery.
Judge Paul R. Warren presides over the case. Curtiss Alan
Johnson, Esq., and David L. Rasmussen, Esq., at Davidson Fink,
LLP, in Rochester, N.Y., serve as the Debtor's counsel. The
Debtor has tapped GAR Associates to appraise a selection of its
properties to support the Debtor's liquidation analysis.
The Official Committee of Unsecured Creditors is represented by
Gregory J. Mascitti, Esq., at LeClairRyan PC. The Committee
retained Getzler Henrich & Associates LLC as financial advisor.
Cornerstone Homes Inc. delivered to the Bankruptcy Court a First
Amended Plan of Reorganization and explanatory Disclosure
Statement on Jan. 3, 2014. The Amended Plan supersedes the Plan
Cornerstone prepared prior to filing for bankruptcy. The Debtor
intends to liquidate properties over a period of time, so as to
achieve maximum recovery for the creditors while avoiding a
deleterious affect on the housing market. The Plan provides for a
distribution of $1 million as an Unsecured Distribution Amount.
Owner David Fleet will pledge up to $1 million to fund
distributions under the Plan. It also provides for the
distribution of the stock in the Reorganized Debtor to holders of
Allowed Unsecured Noteholder Claims under Class 5. The Class 5
Claimants are expected to receive 7% plus distribution of stock on
the Distribution Date. The Claimants are impaired and entitled to
vote on the Plan.
No hearing was slated to consider the Amended Plan documents.
Instead, the Court accepted the request of the Committee to
appoint a Chapter 11 trustee to replace management. The Court
approved the appointment of Michael H. Arnold, Esq., as Chapter 11
trustee. He is represented by his law firm, Place and Arnold as
his counsel.
CROWNROCK LP: S&P Raises CCR to 'B+'; Outlook Stable
----------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on Midland, Texas-based oil and gas E&P company CrownRock
L.P. to 'B+' from 'B'. The outlook is stable.
At the same time, S&P raised its senior unsecured debt rating on
the company to 'B' from 'B-'. The recovery rating remains '5',
indicating S&P's expectation of modest (10% to 30%) recovery in
the event of a payment default.
"The upgrade of CrownRock reflects our view of the company's
continued success at growing its production and reserves in the
Permian basin," said Standard & Poor's credit rating Marc
Bromberg. "In addition, we believe the company will continue to
maintain healthy FFO to debt measures, in the 40% to 45% range, as
it develops its asset base," said Mr. Bromberg.
The ratings on CrownRock L.P. reflect S&P's assessment of the
company's "weak" business risk and "aggressive" financial risk.
The ratings incorporate the company's relatively small size and
scale of reserves and production as compared with its E&P peers,
the significant capital spending associated with the development
of its mostly proved undeveloped (PUD) reserve base, and its
limited asset diversity. The ratings also reflect its above-
average profitability relative to peers and its solid reserve and
production growth. S&P considers CrownRock's sources of liquidity
to be "adequate," with projected sources divided by uses of more
than 1.2x during the next 12 months.
The outlook is stable to because S&P do not expect to raise or
lower the corporate credit rating over the next 12 months. S&P
expects that CrownRock will continue to develop its asset base,
with production and costs in line with S&P's current projections.
As a result, S&P forecasts that CrownRock will maintain adequate
liquidity and FFO to debt of at least 30%.
S&P could lower the rating if the company's FFO to debt declines
below 30% and S&P sees no path to improvement. S&P could envision
this scenario if CrownRock relies predominantly on debt to
increase its reserves and production or if well results (i.e.,
production and costs) are weaker than our current expectations.
An upgrade would require reserves and production commensurate with
higher-rated peers along with FFO to debt of at least 30%.
EDISON MISSION: EME Reorganization Trust Closes Sale of EIX Notes
-----------------------------------------------------------------
EME Reorganization Trust on Sept. 25 disclosed that it has
consummated the sale of certain zero coupon unsecured notes that
were previously issued by Edison International to the EME
Reorganization Trust on September 8, 2014. An unaffiliated third
party purchased all the EIX Notes from the Trust at an aggregate
purchase price of $400,207,812.94.
The Trust is planning to make a cash distribution to its
beneficiaries, consistent with past distributions, in the fourth
quarter of 2014.
The Trust was formed in connection with the confirmation and
consummation of the Third Amended Joint Chapter 11 Plan of
Reorganization (with Technical Modifications) for Edison Mission
Energy and certain of its subsidiaries. The sale by the Trust of
its interest in the EIX Notes was expressly contemplated by, and
authorized under, the Plan and entry of the Confirmation Order by
the Bankruptcy Court.
About Edison Mission
Santa Ana, California-based Edison Mission Energy is a holding
company whose subsidiaries and affiliates are engaged in the
business of developing, acquiring, owning or leasing, operating
and selling energy and capacity from independent power production
facilities. EME also engages in hedging and energy trading
activities in power markets through its subsidiary Edison Mission
Marketing & Trading, Inc.
EME was formed in 1986 and is an indirect subsidiary of Edison
International. Edison International also owns Southern California
Edison Company, one of the largest electric utilities in the
United States.
EME and its affiliates sought Chapter 11 protection (Bankr. N.D.
Ill. Lead Case No. 12-49219) on Dec. 17, 2012.
EME has reached an agreement with the holders of a majority of
EME's $3.7 billion of outstanding public indebtedness and its
parent company, Edison International EIX, that, pursuant to a plan
of reorganization and pending court approval, would transition
Edison International's equity interest to EME's creditors, retire
existing public debt and enhance EME's access to liquidity.
The Company's balance sheet at Sept. 30, 2012, showed
$8.17 billion in total assets, $6.68 billion in total liabilities
and $1.48 billion in total equity.
In its schedules, Edison Mission Energy disclosed total assets of
assets of $5,721,559,170 and total liabilities of $6,202,215,094
as of the Petition Date.
The Debtors, other than Camino Energy Company, are also
represented by James H.M. Sprayregen, P.C., Sarah Hiltz Seewer,
Esq., and Seth A. Gastwirth, Esq., at Kirkland & Ellis LLP, in
Chicago, Illinois; and Joshua A. Sussberg, Esq., at Kirkland &
Ellis LLP, in New York. Debtor Camino Energy Company is
represented by David A. Agay, Esq., and Joshua Gadharf, Esq., at
McDonald Hopkins LLC, in Chicago, Illinois.
Perella Weinberg Partners is acting as the Debtors' financial
advisor and McKinsey & Company Recovery and Transformation
Services is acting as restructuring advisor. GCG, Inc., is the
claims and notice agent.
An official committee of unsecured creditors has been appointed in
the case and is represented by Ira S. Dizengoff, Esq., Stephen M.
Baldini, Esq., Arik Preis, Esq., and Robert J. Boller, Esq., at
Akin Gump Strauss Hauer & Feld LLP in New York; James Savin, Esq.,
and Kevin M. Eide, Esq., at Akin Gump Strauss Hauer & Feld LLP in
Washington, DC; and David M. Neff, Esq., and Brian Audette, Esq.,
at Perkins Coie LLP. The Committee also has tapped Blackstone
Advisory Partners as investment banker and FTI Consulting as
financial advisor.
EME's Joint Plan of Reorganization was confirmed on March 11,
2014. The Plan provides for: (a) the sale to NRG Energy, Inc. and
NRG Energy Holdings, Inc. of substantially all of EME's assets for
approximately $2.635 billion, subject to certain adjustments
provided in the Acquisition Agreement, and assumption of so-called
PoJo Leases, as modified; (b) a settlement with Edison
International -- EIX -- and certain EME noteholders pursuant
to which EME will emerge from bankruptcy free of liabilities but
will remain an indirect wholly-owned subsidiary of EIX; and (c)
the transfer of substantially all remaining assets and liabilities
of EME that are not otherwise discharged in the bankruptcy or
transferred to NRG to the Reorganization Trust. Once consummated,
the Plan will result in recoveries of over 80% for holders of
unsecured claims against EME and payment in full in cash of claims
against EME's subsidiaries. The Plan was declared effective on
April 1, 2014.
EMANUEL COHEN: Hires Stuart Brown as Accountant
-----------------------------------------------
Emanuel L. Cohen seeks authorization from the U.S. Bankruptcy
Court for the Southern District of Florida to employ Stuart B.
Brown, CPA, P.C. as accountant.
Accounting services are required by the Debtor. In particular the
accountant is currently required to assist the Debtor with income
tax returns for Debtor and other entities including Tu Bears, Inc.
and DIT Healthcare Distribution, Inc.
The Debtor will be charged an hourly rate of $200 for the services
to be performed by Stuart Brown.
Stuart Brown will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Stuart Brown assured the Court that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the
Bankruptcy Code and does not represent any interest adverse to the
Debtors and their estates.
Stuart Brown can be reached at:
Stuart B. Brown, CPA, P.C.
203 W 81st St. Apt 2C
New York, NY 10024-5816
Tel: (646) 682-9800
Emanuel L. Cohen, D.I.T. Inc., and Salon's Best, Inc., filed
Chapter 11 bankruptcy petitions (Bankr. S.D. Fla. Lead Case No.
14-23125) at West Palm Beach, Florida, on June 6, 2014. D.I.T.
and Salon's Best disclosed $12 million in assets and debt.
Emanuel L. Cohen disclosed $6,699,546 in assets and $14,116,055 in
liabilities as of the Petition Date. Kenneth S. Rappaport, Esq.,
at Rappaport Osborne & Rappaport, PL, in Boca Raton, Florida,
serves as counsel to the Debtors.
EMMONS-SHEEPSHEAD: NY Court Throws Out Plan Appeal
--------------------------------------------------
District Judge Roslynn R. Mauskopf denied an appeal arising from
the confirmation of the Chapter 11 plan of reorganization of
Emmons-Sheepshead Bay Development LLC.
Albert Wilk, Alex Dikman, and Metropolitan Estates, Inc., as well
as Emmons Ave, LLC in a derivative capacity -- appellant-creditors
-- appeal from an August 28, 2013 order of the U.S. Bankruptcy
Court for the Eastern District of New York (Elizabeth S. Stong,
J.). That order denied Metropolitan's motion denying
reconsideration of the bankruptcy court's order, dated July 3,
2013, confirming the Debtor's plan.
Metropolitan is an investor in a Brooklyn condominium development
that filed for bankruptcy protection under Chapter 11. As a
creditor and interested party, Metropolitan aggressively
participated in the bankruptcy proceedings throughout. It filed a
single, limited objection to the debtor's proposed plan, claiming
that the plan should not be confirmed because it failed to meet
the requirement, under 11 U.S.C. Sec. 1129(a)(3), of having been
"proposed in good faith." Metropolitan was granted certain
discovery in connection with its objection.
On June 27, 2013, the bankruptcy court held an evidentiary hearing
on the debtor's application for confirmation of the plan. Through
counsel, Metropolitan raised concerns regarding outstanding
discovery issues, but the bankruptcy judge pressed ahead with the
confirmation hearing. Metropolitan's counsel fully participated by
cross-examining the debtor's principal, calling its own witness,
and arguing its case. The bankruptcy court overruled
Metropolitan's objection, finding good faith, and confirmed the
plan.
A written order settling the hearing and confirming the plan was
filed on July 3, 2013 and entered on July 8, 2013. Metropolitan
did not appeal the confirmation order.
Instead, on July 17, 2013, Metropolitan, newly represented by its
third attorney, moved pursuant to Rules 9023 and 9024 to vacate
the confirmation order. In their motion, Metropolitan did not
raise its good faith objection as pressed during the confirmation
hearing. Rather, on reconsideration, Metropolitan raised for the
first time two new arguments: first, that it had been deprived of
procedural due process at the confirmation hearing, and second,
that the confirmation was unlawful because the condominium was
not, in actuality, property of the bankruptcy estate but rather
property that was held or should be held in a constructive trust,
an issue that was the subject of pending litigation in state
court.
On August 15, 2013, the bankruptcy court held a hearing on
Metropolitan's reconsideration motion, which the court denied
orally at the hearing, and subsequently issued a written summary
order to that effect on August 28, 2013.
On September 3, 2013, Metropolitan filed a notice of appeal from
the bankruptcy court's denial of its motion for reconsideration.
That appeal -- in which Metropolitan revisits the due process and
constructive trust arguments that it raised for the first time in
seeking reconsideration -- is before the District Court.
Judge Mauskopf finds that Metropolitan's arguments are
procedurally and substantively meritless, according to her
September 23, 2014 Memorandum and Order available at
http://is.gd/SI9yrAfrom Leagle.com.
About Emmons-Sheepshead Bay Development
Emmons-Sheepshead Bay Development LLC, the owner of 49 unsold
condominium units on Emmons Avenue in Brooklyn, filed a Chapter 11
petition (Bankr. E.D.N.Y. Case No. 12-46321) on Aug. 30, 2012, in
Brooklyn. The Debtor said the property is worth $14 million. It
has $32.6 million in total liabilities, including $31 million owed
to TD Bank N.A., which is secured by first, second and third
priority liens on the property.
Judge Elizabeth S. Stong presides over the case. Arnold Mitchell
Greene, Esq., and Lori A. Schwartz, Esq., at Robinson Brog
Leinwand Greene, et al., serve as the Debtor's counsel. The
petition was signed by Jacob Pinson, managing member, Yachad
Enterprises, LLC.
Judge Stong confirmed Emmons-Sheephead's second amended plan of
reorganization, as amended during the hearing held on June 27,
2013. In August 2013, the Bankruptcy Court denied the request of
Albert Wilk d/b/a Wilk RE, Alex Dikman and Metropolitan Estates,
Inc., in a derivative capacity, to reopen the confirmation
proceeding, vacate order confirming plan and reconsider for relief
Under Rule 9023 and 9024 of the Federal Rules of Bankruptcy
Procedure, including the motion to stay order pending appeal.
ENERGY FUTURE: Round 1 Bid Deadline for Oncor Stake on October 23
-----------------------------------------------------------------
Energy Future Holdings Corp., et al., ask the U.S. Bankruptcy
Court for the District of Delaware to:
(a) approve bidding procedures for an investment, in any form,
to acquire any or all of the assets or the reorganized
equity of EFH Corp. or one or more of its direct and
indirect subsidiaries other than Energy Future Competitive
Holdings Company LLC, Texas Competitive Electric Holdings
Company LLC, and TCEH's direct and indirect subsidiaries;
(b) schedule an auction for the Transaction and related
deadlines and hearings; and
(c) approve the form and manner of notice of the Auction and
related deadlines and hearings.
The Debtors' prepetition Restructuring Support Agreement featured
a proposed EFIH Second Lien DIP Facility that was convertible into
the equity of reorganized EFH Corp. under a Chapter 11 plan. In
advance of the hearing on that proposed investment, a bidding war
broke out among several parties, in large part based on the value
of its proposed conversion feature. This bidding war culminated
in a proposal from strategic bidder NextEra Energy that provided
superior value to the EFIH Second Lien DIP Facility, and the
Debtors ultimately terminated the Restructuring Support Agreement
as a consequence.
Since then, the Debtors said they have had discussions with other
parties regarding their potential interest in bidding on an
investment in the Debtors' indirect ownership of Oncor Electric
Delivery Company LLC.
The Debtors formally commenced the Stalking Horse Bidding Process
at essentially the same time as the filing of this Motion by
distributing the process letter and teaser. Bidders seeking to
participate in the Stalking Horse Bidding Process must meet these
deadlines:
* Round 1 Bid Deadline. Bidders must submit a Round 1 bid no
later than 4:00 p.m. (prevailing Eastern Time) on
October 23, 2014;
* Round 2 Initial Mark-Up Deadline. Bidders that are selected
to proceed to Round 2 must submit initial marked versions of
the Debtors' forms of definitive agreements no later than
4:00 p.m. (prevailing Eastern Time) on November 7, 2014; and
* Round 2 Bid Deadline. Bidders must then submit
substantially final drafts of the definitive agreements no
later than 4:00 p.m. (prevailing Eastern Time) on
November 21, 2014.
As reported in the Troubled Company Reporter on Sept. 22, 2014,
citing report from Billy Cheung and Michelle Sierra or Reuters,
an auction for Oncor, the regulated distribution unit of bankrupt
Texas power company Energy Future Holdings, could come in the
first quarter of next year, as interest in the prized asset
mounts, according to two sources familiar with the matter. The
Reuters report, citing the same people, said Energy Future is
targeting an auction in the first quarter of 2015, with Bank of
America Merrill Lynch retained to seek buyers.
About Energy Future
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.
ENERGY FUTURE: Lien Challenge Period Extended to Nov. 28
--------------------------------------------------------
The following parties:
-- Texas Competitive Electric Holdings Company LLC, Energy
Future Competitive Holdings Company LLC, and certain of their
direct and indirect subsidiaries -- collectively known as TCEH
Debtors;
-- Wilmington Trust, N.A., as successor collateral agent and
successor administrative agent under a credit agreement dated Oct.
20, 2007;
-- Delaware Trust Company fka CSC Trust Company of Delaware,
as successor indenture trustee under certain indenture dated April
19, 2011, for the 11.50% senior secured notes due Oct. 1, 2020;
and
-- the Unofficial Committee of Certain Unaffiliated Holders
of, inter alia, first lien senior secured claims against TCEH
Debtors,
entered into an agreement to further extend certain deadlines in
the Final Cash Collateral Order. Specifically, the parties agree
to further extend the deadline for parties in interest, including
the creditors committee, to challenge the stipulations and
admissions contained in the Final Cash Collateral Order through
November 28, 2014, subject to further extension by written
agreement of the parties. This challenge includes a filing by any
party, including the committee, of an adversary proceeding or any
claim challenging the priority, extent and validity of the
prepetition first lien creditors' claims against, and liens and
interests in the Debtors' assets.
A full-text copy of the final order to use cash collateral is
available for free at http://is.gd/q5P6vX
About Energy Future
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.
ENERGY FUTURE: Court Approves Sidley Austin as Corporate Counsel
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
Energy Future Holdings Corp., and its debtor-affiliates to employ
Sidney Austin LLP as special counsel for certain corporate and
litigation matters, nunc pro tunc to Apr. 29, 2014.
As reported in the Troubled Company Reporter on June 16, 2014,
the Debtors require Sidley Austin to represent them in legal
matters as they may request and determine are necessary from time
to time on a go-forward basis.
Sidley Austin will be paid at these hourly rates:
Jim Conlan $1,150
Larry Nyhan $1,150
Kevin Lantry $1,100
Paul Caruso $925
Matthew Clemente $925
Attorney $425-$1,175
Paraprofessionals $110-$375
Sidley Austin will also be reimbursed for reasonable out-of-pocket
expenses incurred.
During the one-year period prior to the petition date, Sidney
Austin received $16,250,000 from the Debtors for services rendered
in connection with the matters other than the EPA Matters.
During the one-year period prior to the petition date, Sidley
Austin received from the Debtors payments totaling $2,151,869 for
services rendered or to be rendered in connection with the EPA
Matters.
Paul S. Caruso, partner of Sidley Austin, assured the Court that
the firm is a "disinterested person" as the term is defined in
Section 101(14) of the Bankruptcy Code and does not represent any
interest adverse to the Debtors and their estates.
About Energy Future
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.
ENERGY FUTURE: Court Denies Bid to Form EFH Corp Unsecured Panel
----------------------------------------------------------------
The Hon. Christopher S. Sontchi of the U.S. Bankruptcy Court for
the District of Delaware denied the request of American Stock
Transfer & Trust Company, LLC, as successor trustee to The Bank
of New York Mellon Trust Company, N.A., to appoint an Official
Committee of Unsecured Creditors for Energy Future Holdings Corp.
and its debtor-affiliates.
American Stock told the Court that the United States Trustee has
not appointed a committee of unsecured creditors for the EFH Corp
Debtor. American Stock pointed out that there is a need to
appoint a committee because the Debtors' cases are among the
largest and most complicated ever filed.
American Stock argued that the appointment of a committee is
imperative at this time because it appears that the restructuring
support agreement will be terminated. The Debtors stated the RSA
was subject to termination and may not be further amended at a
hearing on July 18, 2014. The Debtors nor any of their creditor
constituencies have articulated a clear path to a confirmable
plan. Without question, the path forward will involve intense
negotiations and, most likely, further litigation, according to
American Stock.
As reported by the Troubled Company Reporter, 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.
American Stock is represented by:
Christopher P. Simon, Esq.
CROSS & SIMON, LLC
913 North Market Street, 11th Floor
Wilmington, DE 19801
Tel: (302) 777-4200
Fax: (302) 777-4224
Email: csimon@crosslaw.com
- and -
Amanda D. Darwin, Esq.
Richard C. Pedone, Esq.
Erik Schneider, Esq.
NIXON PEABODY LLP
100 Summer Street
Boston, MA 02110
Telephone: (617) 345-1300
Facsimile: (855) 739-9081
Email: adarwin@nixonpeabody.com
rpedone@nixonpeabody.com
eschneider@nixonpeabody.com
About Energy Future
Energy Future Holdings Corp., formerly known as TXU Corp., is a
privately held diversified energy holding company with a portfolio
of competitive and regulated energy businesses in Texas. Oncor,
an 80 percent-owned entity within the EFH group, is the largest
regulated transmission and distribution utility in Texas.
The Company delivers electricity to roughly three million delivery
points in and around Dallas-Fort Worth. EFH Corp. was created in
October 2007 in a $45 billion leverage buyout of Texas power
company TXU in a deal led by private-equity companies Kohlberg
Kravis Roberts & Co. and TPG Inc.
On April 29, 2014, Energy Future Holdings and 70 affiliated
companies sought Chapter 11 bankruptcy protection (Bankr. D. Del.
Lead Case No. 14-10979) after reaching a deal with some key
financial stakeholders to keep its businesses operating while
reducing its roughly $40 billion in debt.
The Debtors' cases have been assigned to Judge Christopher S.
Sontchi (CSS). The Debtors are seeking to have their cases
jointly administered for procedural purposes.
As of Dec. 31, 2013, EFH Corp. reported total assets of $36.4
billion in book value and total liabilities of $49.7 billion. The
Debtors have $42 billion of funded indebtedness.
EFH's legal advisor for the Chapter 11 proceedings is Kirkland &
Ellis LLP, its financial advisor is Evercore Partners and its
restructuring advisor is Alvarez & Marsal. The TCEH first lien
lenders supporting the restructuring agreement are represented by
Paul, Weiss, Rifkind, Wharton & Garrison, LLP as legal advisor,
and Millstein & Co., LLC, as financial advisor.
The EFIH unsecured creditors supporting the restructuring
agreement are represented by Akin Gump Strauss Hauer & Feld LLP,
as legal advisor, and Centerview Partners, as financial advisor.
The EFH equity holders supporting the restructuring agreement are
represented by Wachtell, Lipton, Rosen & Katz, as legal advisor,
and Blackstone Advisory Partners LP, as financial advisor. Epiq
Systems is the claims agent.
Wilmington Savings Fund Society, FSB, the successor trustee for
the second-lien noteholders owed about $1.6 billion, is
represented by Ashby & Geddes, P.A.'s William P. Bowden, Esq., and
Gregory A. Taylor, Esq., and Brown Rudnick LLP's Edward S.
Weisfelner, Esq., Jeffrey L. Jonas, Esq., Andrew P. Strehle, Esq.,
Jeremy B. Coffey, Esq., and Howard L. Siegel, Esq.
ENERGY FUTURE: Can File Chapter 11 Plan Until February 2015
-----------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware extended
the exclusive periods of Energy Future Holdings Corp. and its
debtor-affiliates to:
a) file a Chapter 11 plan through and including Feb. 23, 2015;
and
b) solicit acceptances from creditors until April 25, 2015.
About Energy Future
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.
ESSAR STEEL: S&P Cuts Rating to 'D' on Missed Principal Repayment
-----------------------------------------------------------------
Standard & Poor's Ratings Services said it lowered its issue-level
rating on Essar Steel Algoma Inc.'s US$350 million asset-based
loan (ABL) facility to 'D' (default) from 'CCC+'. At the same
time, Standard & Poor's removed the rating from CreditWatch where
it was placed with developing implications Aug. 18.
S&P's 'SD' (selective default) corporate credit rating on Essar
and 'CCC+' issue-level rating on the company's senior secured
notes are unchanged.
"This rating action reflects the missed principal repayment on the
company's ABL, which was due Sept. 20," said Standard & Poor's
credit analyst Jarett Bilous. "The maturity of the ABL is not
subject to a grace period and we do not expect payment within five
business days, which we consider an event of default as per our
criteria," Mr. Bilous added
The 'SD' rating reflects the default on the ABL and senior
unsecured notes, and S&P's expectation that the company will
continue to meet its obligations on its secured notes. The
default on the ABL does not affect the issue-level rating on the
senior secured notes. The company plans to fully refinance the
ABL and senior secured notes on or before Nov. 15, which is
required for the completion of its restructuring and emergence
from creditor protection.
FOX TROT: Bank Won't Object to Conversion, Insists on Foreclosure
-----------------------------------------------------------------
Forcht Bank, N.A., successor in interest to First National Bank of
Lexington, tells the U.S. Bankruptcy Court for the Eastern
District of Kentucky that it does not object to the U.S. Trustee's
motion to convert, or in the alternative, to dismiss Fox Trot
Corporation's bankruptcy proceeding to the extent the request does
not interfere with Forcht Bank proceeding forward to foreclosure
sale.
Forcht Bank is a secured creditor of the Debtor. As of the
Petition Date, Forcht Bank was owed $4,110,349 pursuant to a loan
agreement, promissory note, judgment, and agreed order of sale.
To secure the debt, Forcht Bank holds a perfected mortgage
security interest in real property titled in the Debtor's name
located on Sulphur Well Road and N. Cleveland Road in Lexington,
Kentucky, two parcels consisting of approximately 1,223 acres with
a personal residence located thereon (the "Farm").
In August 2014, Forcht Bank notified the Bankruptcy Court that the
Debtor failed to pay off the indebtedness due and owing as
provided under the Court's July 9, 2014 Order. Forcht Bank then
proceeded to file a motion in state court proceedings to
reschedule a foreclosure sale of the Farm. The motion was
sustained, and Forcht Bank is currently awaiting a sale date to be
scheduled by the Fayette County Master Commissioner.
Pursuant to previous orders, the Farm is to be sold in a certain
order by parcels, until all amounts due and owing to Forcht Bank,
as well as delinquent taxes and amounts due and owing the Master
Commissioner, are paid in full.
Daniel E. Hitchcock, Esq., at Wyatt, Tarrant & Combs, LLP, in
Lexington, Kentucky -- lexbankruptcy@wyattfirm.com -- contends
that in the event the Court deems conversion of the Debtor's case
to be appropriate, Forcht Bank should nevertheless be allowed to
continue forward with its foreclosure sale as authorized under the
July 9, 2014 Order entered by the Court. The July 9 Order
provides in part that any excess proceeds realized from the sale
would be turned over to the Bankruptcy Estate, which could then be
distributed to creditors of the Estate.
The Court will convene a hearing on October 2, 2014, at 11:00
a.m., to consider approval of the Motion to Convert.
About Fox Trot Corporation
Fox Trot Corporation, which maintains its principal place of
business in Lexington, Fayette County, Kentucky, sought protection
under Chapter 11 of the Bankruptcy Code on Oct. 12, 2013 (Case No.
13-52471, Bankr. E.D. Ky.). The case is assigned to Judge Gregory
R. Schaaf. Adam R. Kegley, Esq., at Frost Brown Todd LLC,
represents the Debtor in its restructuring effort. In its
schedules, the Debtor disclosed $25,570,806.02 in total assets and
$3,913,035.20 in total liabilities.
The Debtor employed Duane Cook & Associates PLC as special counsel
to advise the Debtor with respect to all matters involved in the
prosecution of an appeal and counterclaims. The Debtor hired
David Beck, CPA, as accountant.
GENERAL MOTORS: S&P Raises CCR to 'BBB-' From 'BB+'
---------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on U.S. automaker General Motors Co. (GM) to 'BBB-' from
'BB+', and revised the outlook to stable from positive.
At the same time, S&P raised its issue-level rating on GM's
unsecured debt to 'BBB-' from 'BB+' and simultaneously withdrew
its '4' recovery rating on that debt, because S&P do not assign
recovery ratings to the issues of investment-grade companies.
Following S&P's upgrade, it expects the release of the collateral
and guarantees under the revolving credit facility. Thus, S&P now
classifies the revolver as unsecured as it is no longer
structurally advantaged to the outstanding rated unsecured notes.
As a result, S&P lowered the rating on the revolver to 'BBB-' from
'BBB' to equate it with the corporate credit rating.
At the same time, S&P raised its corporate credit rating on GM's
captive finance subsidiary General Motors Financial Co. Inc. (GM
Financial) to 'BBB-' (at the same level as the rating on GM) from
'BB' and removed the ratings on GM Financial from CreditWatch
positive after designating the entity as a "core" subsidiary of
GM. S&P also raised its issue-level rating on GM Financial's
unsecured debt to 'BBB-' from 'BB-'.
The upgrade reflects S&P's improved assessment of GM's business
risk profile based on better prospects for profit diversification
across regions over the next two to three years. S&P believes GM
will likely sustain its improving track record of profitability in
North America (excluding recall-related headwinds), achieve its
mid-decade profitability target in Europe, and maintain its strong
market share in China. The upgrade also reflects S&P's
expectation that GM's credit measures should remain strong and
appropriate for the current rating, given a generally favorable
automotive market backdrop.
GM's high-profile recalls so far this year remain a negative
factor in S&P's assessment of GM's business, but it expects
ongoing cash outflows associated with the recalls to be manageable
in context of the company's strong liquidity. As total announced
recalls approached 29 million vehicles, GM recorded recall-related
charges of about $2.5 billion (over 90% in North America) during
the first half of 2014. GM has also announced the creation of a
compensation program related to faulty ignition switches and
estimates a charge of up to $600 million. The total amount of the
payout under a compensation program for accident victims and their
families related to GM's ignition switch defect is not known at
this point, and there is no aggregate cap on the compensation
plan. S&P believes the company is likely to make most of the
payouts by the middle of 2015. With nearly $39 billion in total
automotive liquidity (i.e., not including liquidity at GM
Financial), including about $28 billion in cash as of the end of
the second quarter 2014, S&P believes GM has ample capacity to
make these payments. In addition to GM's strong liquidity, S&P's
expectation for meaningful FOCF generation over the next two years
should allow the company to manage several billion dollars of
additional direct cash outflows while maintaining strong
liquidity. S&P believes GM would be able to absorb any adverse
developments related to the bankruptcy judge's pending decision on
the treatment of lawsuits as prepetition or post-petition claims.
The outcome of investigations currently underway by the U.S.
Department of Justice (DOJ) and many state attorneys general will
determine the ultimate magnitude of fines and cash settlement
costs for GM. As a reference point, in March 2014, Toyota agreed
to settle a government probe initiated in 2010 and made a $1.2
billion payment as part of the agreement. The probe related to
millions of recalls on its popular vehicles in 2009-2010 for
admittedly misleading consumers and the government over unintended
acceleration.
In S&P's view, GM will maintain its solid competitive position in
North America which, along with its improved cost base, supports
prospects for segment EBIT margins in North America in the high-
single-digit percentage area (excluding recall-related costs).
Despite the ignition switch and other recalls that materialized in
2014, S&P expects GM to maintain its top market share in the U.S.
Overall light-vehicle market share for GM has been steady,
signaling that the recent recalls hadn't significantly dented
consumer appetite for the company's vehicles. Some segments such
as passenger cars have faced declines in recent months, but GM's
overall sales prospects remain good. In S&P's opinion, the
biggest risk factor -- that market share would meaningfully
decline because of reputational damage -- has not transpired.
S&P's base case assumes GM continues to generate meaningful cash
from its Chinese joint ventures (JVs). GM remains a leader in
China, the world's largest light-vehicle market, with more than
14% of market share through various JVs in 2013. These JVs are
profitable, with a roughly 10% net income margin and more than
$1.7 billion of equity earnings in 2013. S&P assumes good
performance will continue in China. As a result of competitive
pressure, GM has lost some market share in China in the first six
months of 2014. However, S&P expects modest recovery following
the launch of a new SUV -- and this supports S&P's expectation for
meaningful dividends (approaching $2 billion) from its
unconsolidated Chinese JVs in our base case for 2014 and 2015.
GLOBAL COMPUTER: Taps McGuireWoods LLP as Counsel
-------------------------------------------------
Global Computer Enterprises, Inc., dba GCE seeks authorization
from the U.S. Bankruptcy Court for the Eastern District of
Virginia to employ McGuireWoods LLP as counsel, effective Sept. 4,
2014 petition date.
The Debtor requires McGuireWoods LLP to:
(a) advise the debtor with respect to its powers and duties as
debtor and debtor-in-possession in the continued management
and operation of its business and properties;
(b) advise and consult the conduct of the case, including all
of the legal and administrative requirements of operating
in chapter 11;
(c) advise the Debtor in connection with its proposed sale of
assets, and in connection with the transition and closing
of such sale;
(d) prepare on behalf of the Debtor motions, applications,
answers, orders, reports, and papers necessary to the
administration of the estate;
(e) negotiate and prepare on the Debtor's behalf a plan of
liquidation, a disclosure statement and all related
agreements and documents, and taking any necessary action
on behalf of the Debtor to obtain confirmation of such
plan;
(f) attend meetings with third parties and participate in
negotiations;
(g) take all necessary action to protect and preserve the
Debtor's estate, including the prosecution of actions on
the Debtor's behalf, the defense of any action commenced
against the Debtor, negotiations concerning all litigation
in which the Debtor is involved, and objections to claims
filed against the estate;
(h) appear before this Court, other courts, and the U.S.
Trustee, and protecting the interests of the Debtor's
estate before such courts and the U.S. Trustee;
(i) represent the Debtor in respect of an investigation
initiated by United States Department of Justice; and
(j) performing all other necessary legal services and providing
all other necessary legal advice to the Debtor in
connection with this chapter 11 case.
McGuireWoods LLP will be paid at these hourly rates:
David Swan, Partner $690
Charles McIntyre, Partner $840
Kathryn Keane, Associate $430
Lauren Ford, Associate $350
The hourly rates set forth above represent a discount of
approximately 5% from McGuireWoods LLP's standard hourly rates for
such attorneys. Any other timekeepers who may work in this case
likewise will charge a discounted rate of at least 5%.
McGuireWoods LLP will also be reimbursed for reasonable out-of-
pocket expenses incurred.
McGuireWoods LLP currently holds a retainer in the amount of
$200,054.40 for post-petition services.
David I. Swan, partner of McGuireWoods LLP, assured the Court that
the firm is a "disinterested person" as the term is defined in
Section 101(14) of the Bankruptcy Code and does not represent any
interest adverse to the Debtors and their estates.
McGuireWoods LLP can be reached at:
David I. Swan, Esq.
MCGUIREWOODS LLP
1750 Tysons Boulevard, Suite 1800
Tysons Corner, VA 22102-4215
Tel: (703) 712-5365
Fax: (703) 712-5246
About Global Computers
Global Computer Enterprises, Inc., dba GCE, is a cloud-based
"software as a service" provider, commonly referred to as a
"SAAS," offering financial management solutions primarily to
executive departments of the federal government and independent
federal government agencies. GCE sought protection under Chapter
11 of the Bankruptcy Code (Case No. 14-13290, Bankr. E.D. Va.) on
Sept. 4, 2014. The case is assigned to Judge Robert G. Mayer.
The Debtor's counsel is David I. Swan, Esq., at McGuirewoods LLP,
in McLean, Virginia. The Debtor's financial advisor is Weinsweig
Advisors. The petition was signed by Mike Freeman, interim chief
operating officer.
Judge Mayer designated Mike Freeman to perform duties imposed upon
GCE by the Bankruptcy Code.
GLOBAL COMPUTER: Hires WeinsweigAdvisors LLC as Financial Advisor
-----------------------------------------------------------------
Global Computer Enterprises, Inc., dba GCE seeks authorization
from the U.S. Bankruptcy Court for the Eastern District of
Virginia to employ WeinsweigAdvisors, LLC as financial advisor,
effective Sept. 4, 2014 petition date.
The Debtor requires WeinsweigAdvisors LLC to:
(a) assist with communications to key stakeholders;
(b) analyze and monitor short-term cash flow and financing
requirements;
(c) assist to complete bankruptcy reporting requirements;
(d) assist with the development of a key employee incentive
plan;
(e) assist with the claims management process; and
(f) provide such other similar services as may be requested by
the Debtor.
WeinsweigAdvisors LLC will provide the Debtor with monthly
statements for services rendered and costs and expenses incurred.
During the course of this chapter 11 case, the issuance of monthly
statements shall constitute a request for an interim payment. For
professional services, WeinsweigAdvisors LLC has agreed to charge
a blended hourly rate of $350 up to a cap of $125,000, plus
reimbursement of out-of-pocket expenses such as travel, lodging,
and duplication charges.
WeinsweigAdvisors LLC received a retainer in the amount of $30,000
for professional services rendered and costs and expenses incurred
by WeinsweigAdvisors LLC on behalf of the Debtor. As of the
Petition Date, after applying pre-petition fees and expenses, the
net retainer held by WeinsweigAdvisors LLC was $473.
Marc S. Weinsweig, CEO of WeinsweigAdvisors LLC, assured the Court
that the firm is a "disinterested person" as the term is defined
in Section 101(14) of the Bankruptcy Code and does not represent
any interest adverse to the Debtors and their estates.
WeinsweigAdvisors LLC can be reached at:
Marc S. Weinsweig
WEINSWEIGADVISORS, LLC
14114 Chinkapin Drive
Rockville, MD 20850-7403
Tel: (301) 332-2555
E-mail: marc@weinsweigadvisors.com
About Global Computers
Global Computer Enterprises, Inc., dba GCE, is a cloud-based
"software as a service" provider, commonly referred to as a
"SAAS," offering financial management solutions primarily to
executive departments of the federal government and independent
federal government agencies. GCE sought protection under Chapter
11 of the Bankruptcy Code (Case No. 14-13290, Bankr. E.D. Va.) on
Sept. 4, 2014. The case is assigned to Judge Robert G. Mayer.
The Debtor's counsel is David I. Swan, Esq., at McGuirewoods LLP,
in McLean, Virginia. The Debtor's financial advisor is Weinsweig
Advisors. The petition was signed by Mike Freeman, interim chief
operating officer.
Judge Mayer designated Mike Freeman to perform duties imposed upon
GCE by the Bankruptcy Code.
GLOBAL COMPUTER: Hires Saggar & Rosenberg as Accountant
-------------------------------------------------------
Global Computer Enterprises, Inc., dba GCE seeks authorization
from the U.S. Bankruptcy Court for the Eastern District of
Virginia to employ Saggar & Rosenberg, P.C. as accountant,
effective Sept. 4, 2014 petition date.
The Debtor requires Saggar & Rosenberg to:
(a) assist with the sale of the Debtor;
(b) assist with resolution of the 401(k) compliance issues;
(c) assist with the wrap-up of the Indian subsidiary
operations;
(d) prepare the 2014 federal and state corporate income tax
returns;
(e) prepare the Dec. 31, 2014 financial statement, if
requested;
(f) prepare the final limited-scope audit of the 401(k), if
requested; and
(g) assist with other matters, as requested.
Saggar & Rosenberg will be paid at these hourly rates:
Sandeep Saggar, Partner and Shareholder $375
Susan Rosenberg, Partner and Shareholder $375
Ellen Lerche, Director $250
Jeff Burr, Director $250
Managers $175
Saggar & Rosenberg will also be reimbursed for reasonable out-of-
pocket expenses incurred.
Sandeep Saggar, partner and shareholder of Saggar & Rosenberg,
assured the Court that the firm is a "disinterested person" as the
term is defined in Section 101(14) of the Bankruptcy Code and does
not represent any interest adverse to the Debtors and their
estates.
Saggar & Rosenberg can be reached at:
Sandeep Saggar
SAGGAR & ROSENBERG, P.C.
One Church Street, Suite 204
Rockville, MD 20850
Tel: (301) 738-9040
E-mail: sandys@sr.cpa.pro
About Global Computers
Global Computer Enterprises, Inc., dba GCE, is a cloud-based
"software as a service" provider, commonly referred to as a
"SAAS," offering financial management solutions primarily to
executive departments of the federal government and independent
federal government agencies. GCE sought protection under Chapter
11 of the Bankruptcy Code (Case No. 14-13290, Bankr. E.D. Va.) on
Sept. 4, 2014. The case is assigned to Judge Robert G. Mayer.
The Debtor's counsel is David I. Swan, Esq., at McGuirewoods LLP,
in McLean, Virginia. The Debtor's financial advisor is Weinsweig
Advisors. The petition was signed by Mike Freeman, interim chief
operating officer.
Judge Mayer designated Mike Freeman to perform duties imposed upon
GCE by the Bankruptcy Code.
GLOBAL COMPUTER: Taps Asgaard Capital as Investment Banker
----------------------------------------------------------
Global Computer Enterprises, Inc., dba GCE seeks authorization
from the U.S. Bankruptcy Court for the Eastern District of
Virginia to employ Asgaard Capital LLC as investment banker, nunc
pro tunc to the Sept. 4, 2014 petition date.
Pursuant to the terms of the Asgaard Engagement Letter, as
amended, Asgaard Capital will provide the following financial
advisory and investment banking services through consummation of
the U.S. General Services Administration transaction:
(a) meet with management and other advisors of the Company and
personnel to familiarize Asgaard Capital with the business,
operations, financial condition, and prospects of the
Company;
(b) assess the organizational strengths and weaknesses of the
Company, particularly from the perspective of potential new
investors;
(c) provide preliminary value drivers that a typical investor,
lender, buyer, partner, or other business participant may
use to evaluate the Company;
(d) as the Company pursues one or more Sale Transactions, work
with the Company and its counsel to:
-- develop a list of potential strategic and financial
investors or purchasers;
-- prepare an information memorandum for distribution and
presentation to prospective purchasers;
-- assist in soliciting interest among prospective
purchasers;
-- assist the Company in evaluating proposals received from
prospective purchasers;
-- advise the Company as to potential structures of a Sale
Transaction, including the valuation of any non-cash
consideration;
-- assist in negotiating the financial terms and structure
of a Sale Transaction; and
-- assist in consummating a Sale Transaction.
(e) in addition, should the Company elect to effectuate a
transaction through a 363 sale process Asgaard Capital
will:
-- if required, conduct a secondary auction process
including working with counsel to develop and implement
bid procedures to be used in such secondary auction
process;
-- assist the Company in preparing proposals to creditors,
employees, shareholder, and other parties-in-interest in
connection with any transaction;
-- provide expert testimony and advice regarding the
comparable benefits and drawbacks of different proposals
and why a winning bid was selected;
-- advise and attend meetings of the Company's Board of
Directors, creditor groups, official constituencies, and
other interested parties to discuss the sale process, as
the Company reasonably determines to be necessary or
desirable; and
-- provide such additional services or assistance as may
reasonably be requested by the Company.
As per the terms of the Asgaard Engagement Letter, as Amended,
dated Sept. 3, 2014, Asgaard Capital and the Debtors have reached
a revised agreement that would reduce the Sale Transaction Fee to
$1.1 million for the subject transactions or such other
transactions consummated in their stead, an approximate decrease
of $380,000 from what would otherwise be due under the Original
Engagement Letter. Furthermore, Asgaard Capital would only render
advisory services through the consummation of GSA or successor
transaction, whereupon Asgaard Capital's engagement would be
terminated with no further monthly or other fees payable, as was
originally contemplated in the Original Engagement Letter.
Finally, the Amendment terminates any further Monthly Fees for
Asgaard Capital. This reduction of over $380,000 will provide
substantial benefits to this estate and inures to the benefits of
the Debtor's creditors.
The Asgaard Engagement Letter, as Amended, provides for Asgaard
Capital to be reimbursed by the Debtor on a monthly basis up to a
monthly cap of $1,500 per month.
Charles C. Reardon, senior managing director of Asgaard Capital,
assured the Court that the firm is a "disinterested person" as the
term is defined in Section 101(14) of the Bankruptcy Code and does
not represent any interest adverse to the Debtors and their
estates.
Asgaard Capital can be reached at:
Charles C. Reardon
ASGAARD CAPITAL LLC
1934 Old Gallows Road, Suite 350
Vienna, VA 22182
Tel: (703) 752-6252
About Global Computers
Global Computer Enterprises, Inc., dba GCE, is a cloud-based
"software as a service" provider, commonly referred to as a
"SAAS," offering financial management solutions primarily to
executive departments of the federal government and independent
federal government agencies. GCE sought protection under Chapter
11 of the Bankruptcy Code (Case No. 14-13290, Bankr. E.D. Va.) on
Sept. 4, 2014. The case is assigned to Judge Robert G. Mayer.
The Debtor's counsel is David I. Swan, Esq., at McGuirewoods LLP,
in McLean, Virginia. The Debtor's financial advisor is Weinsweig
Advisors. The petition was signed by Mike Freeman, interim chief
operating officer.
Judge Mayer designated Mike Freeman to perform duties imposed upon
GCE by the Bankruptcy Code.
GOLDEN STATE PETROLEUM: S&P Affirms 'B-' Rating & Revises Outlook
-----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B-' project
rating on Golden State Petroleum Transport Corp. S&P also revised
the outlook to stable, and affirmed the '4' recovery rating.
Golden State's recent announcement of a pending sale of the very
large crude carrier (VLCC) Ulriken, slated to close in Oct. 2014,
follows the sale of the VLCC Ulysses in March 2014. The indenture
permits this sale on the condition that the proceeds are
sufficient to fully compensate debtholders for outstanding
principal and any accrued interest.
The project had been drawing on liquidity reserves in recent years
because its cash flows alone weren't enough to cover debt service.
S&P expects that the project will use existing liquidity to
supplement the proceeds from the vessel sale.
"The stable outlook reflects our expectation that the announced
sale will close during October, and that Golden State will use
proceeds to pay the remainder of the outstanding debt and accrued
interest," said Standard & Poor's credit analyst Michael Ferguson.
The operations phase SACP is 'b-'. This score reflects a climate
of low spot market charter rates and a lack of longer term
contracts, both of which have led to significant fluctuation in
cash flows. Furthermore, the Ulriken is a relatively aged vessel,
which incrementally hampers its profitability. As a result of
these factors, the break-even rate required to pay off the
entirety of the debt by 2019 had risen well above the spot rate
during most of the past few years, even though the project
received a small infusion of liquidity after it sold the VLCC
Ulysses in March 2014.
At this time, S&P considers Golden State's liquidity to be less
than adequate. S&P believes that Golden State should have about
$12 million of cash on hand. Because S&P expects DSCRs to remain
below 1x under the current charter rate climate, it estimates that
the company would have depleted this liquidity by 2016, if it were
not for the upcoming expected sale.
If the sale doesn't go through for some reason, S&P would likely
move the outlook back to negative or lower ratings to reflect the
very weak market conditions that the issuer has faced during the
past two years, which have led to debt service coverage ratios
(DSCR) well under 1x.
A positive outlook or upgrade is not likely. If the sale is
successful, S&P will promptly withdraw the debt rating.
GOLFSMITH INTERNATIONAL: S&P Lowers CCR to 'B-'; Outlook Negative
-----------------------------------------------------------------
Standard & Poor's Ratings Services said it lowered its long-term
corporate credit rating on Golfsmith International Holdings L.P.
to 'B-' from' B'. The outlook is negative.
At the same time, Standard & Poor's lowered its issue-level rating
on the company's C$125 million senior secured second-lien notes to
'CCC+' from 'B' and revised its recovery rating on the debt to '5'
from '4'. A '5' recovery rating reflects S&P's expectation of
modest (10%-30%) recovery in a default scenario.
"We base the downgrade on weak operating performance, increasing
leverage, and tighter liquidity," said Standard & Poor's credit
analyst Donald Marleau. "The revised recovery rating on the
issue-level debt reflects a lower assumed EBITDA multiple of 5x
from 6x in a default scenario," Mr. Marleau added.
S&P views Golfsmith's business risk profile as "vulnerable," based
on the company's exposure to the fragmented and discretionary golf
specialty retail market, historically thin EBITDA margins, and low
returns on capital. These weaknesses are offset somewhat by what
we consider the company's solid share of the golf retail segment
in Canada, although this attractive position is being overwhelmed
by poor market conditions.
Golfsmith is indirectly majority-owned by OMERS Administration
Corp., the pension system for Ontario's municipal employees, with
the remainder held by current and former members of management.
Golfsmith's "highly leveraged" financial risk profile is
characterized by rising lease-adjusted debt leverage of more than
7x expected in 2014. S&P expects that the company's heavy
interest burden will contribute to reported EBITDA interest
coverage of less than 0.5x this year.
S&P views Golfsmith's liquidity as "less than adequate," with uses
expected to exceed sources in the next 12 months.
The negative outlook incorporates Standard & Poor's view that
Golfsmith's credit profile over the next year depends on a
turnaround in same-store performance after difficult conditions in
2014. S&P believes the company's liquidity is constrained by
elevated borrowings to support excess inventories, and will depend
on a working capital release in the second half of 2014 to
maintain capacity to cover seasonal swings in 2015 and a US$6.6
million notes interest payment in each of January and July 2015.
S&P could lower the rating if weak profitability and cash flow
persists in 2015, which it believes could indicate poor comparable
store sales off a weak 2014 and continued tight liquidity along
with elevated inventories. In such a scenario, S&P estimates that
reported EBITDA interest coverage below 1x in 2015 could
contribute to negative free operating cash flow after maintenance
capital expenditures.
S&P could revise the outlook to stable if Golfsmith reduces its
inventory overhang in 2015 along with improving earnings that
would translate into positive free cash flow and improved
liquidity. Assuming more normal seasonal effects compared to the
difficult golf season in North America in 2014, S&P estimates that
positive comparable-store sales growth along with a return to
2012-2013 gross margins would improve fully lease-adjusted
leverage to below 6x with adequate liquidity.
GROUP HEALTH: A.M. Best Upgrades Fin'l Strength Rating from 'C+'
----------------------------------------------------------------
A.M. Best Co. has upgraded the financial strength rating (FSR) to
B+ (Good) from C+ (Marginal) and the issuer credit rating (ICR) to
"bbb-" from "b-" for Group Health Incorporated (GHI).
Concurrently, A.M. Best has also affirmed the FSR of B+ (Good) and
ICR of "bbb-" for Health Insurance Plan of Greater New York (HIP),
HIP Insurance Company of New York and ConnectiCare, Inc.
(Farmington, CT). The outlook for all ratings is stable. All
companies are subsidiaries of EmblemHealth, Inc. and domiciled in
New York, NY, unless otherwise specified.
The upgrade for GHI reflects the company's improved level of risk-
adjusted capital, favorable near term operating results and the
strategic roll GHI plays in the business plan of EmblemHealth.
GHI's level of risk-adjusted capital has shown significant
improvement over the last year. Through organizational changes,
the issuance of surplus notes and balance sheet liability relief,
EmblemHealth has displayed its commitment to the capital level of
GHI. Although GHI has reported operating losses for the past
several years, results for the first half of 2014 have been
favorable. Previous operating losses had mainly been generated by
GHI's small group business. GHI has taken pricing actions and
discontinued some small group products in order to return this
business to profitability. GHI contributes the largest portion of
overall enrollment for EmblemHealth, which helps to solidify the
organization's market position in the Greater New York City area.
The affirmation of the ratings of HIP, HIP Insurance Co. of NY and
ConnectiCare reflect their role as the main sources of operating
and net income for the organization. HIP is the main source of
earnings for EmblemHealth in New York, while ConnectiCare is the
main source of earnings for EmblemHealth in Connecticut.
Additionally, HIP Insurance Company of New York has reported
improved operating results through margin improvement in its
commercial small group business. All three entities have good
levels of risk-adjusted capital mainly as a result of favorable
net income.
Positive rating movement could occur if EmblemHealth further
diversifies its revenues, reports improved operating results and
continues to improve its quality of capital. Conversely, negative
rating movement could occur if EmblemHealth records large
operating losses, experiences material deterioration of its risk-
adjusted capital or experiences a material decrease in its market
position in the Greater New York City area.
GUARANTY INCOME: A.M. Best Upgrades FSR from 'B'
------------------------------------------------
A.M. Best Co. has upgraded the financial strength rating to B+
(Good) from B (Fair) and the issuer credit rating to "bbb-" from
"bb+" of Guaranty Income Life Insurance Company (Guaranty Income)
(Baton Rouge, LA). The outlook for all ratings is stable.
The upgrade reflects Guaranty Income's improved risk-adjusted
capitalization and a reduction in credit risk within its
investment portfolio through lower allocations to below investment
grade bonds. Risk-adjusted and absolute capital levels have
increased due to organic earnings growth and the issuance of a
surplus note. Additionally, the upgrade incorporates some
improvement in investment spreads and favorable persistency.
These positive rating factors are partially offset by Guaranty
Income's geographic and business profile concentration and
fluctuating earnings, as well as an increase in common stock as a
percentage of capital and a reserve profile with high interest
rate sensitivity.
Key rating drivers that could lead to positive rating actions
include growth in consolidated operating performance and sustained
growth in premium levels while maintaining favorable risk-adjusted
capitalization. Negative rating actions could occur if Guaranty
Income were to experience a material deterioration in consolidated
operating performance, reduced risk-adjusted capitalization levels
or a material increase in investment risk.
HENRY COMPANY: Moody's Assigns B2 Rating on Senior 1st Lien Debt
----------------------------------------------------------------
Moody's Investors Service downgraded Henry Company, LLC's
("Henry") Corporate Family Rating to B3 from B2 and lowered its
Probability of Default Rating to B3-PD from B2-PD. The downgrade
reflects worsening in Henry's key credit metrics resulting from a
proposed debt-financed dividend.
In a related action, Moody's assigned a B2 rating to the company's
new 1st lien credit agreement, which includes a $20 million senior
secured revolving credit facility and a $165.3 million senior
secured term loan. Proceeds from the proposed first lien term loan
and a $70 million 2nd lien term loan (unrated) will be used to
finance a cash dividend paid to Graham Partners (the majority
owner of Henry) and other owners, to term out revolver borrowings,
to repay the existing 1st lien and 2nd lien credit facilities
aggregating to about $175 million, and to pay related fees and
expenses. Ratings on the existing 1st lien and 2nd lien credit
facilities will be withdrawn upon the closing of the transaction.
The rating outlook remains stable.
The following ratings/assessments were affected by this action:
Corporate Family Rating downgraded to B3 from B2;
Probability of Default Rating downgraded to B3-PD from B2-PD;
Sr. Sec 1st Lien Revolver due 2019 assigned B2 (LGD3); and,
Sr. Sec. 1st Lien Term Loan due 2020 assigned B2 (LGD3).
Ratings Rationale
The downgrade of Henry's Corporate Family Rating to B3 from B2
reflects a weakening in the company's key credit metrics resulting
from the proposed debt-financed dividend. Balance sheet debt at
closing will be $235.3 million, a 34% increase from 2Q14 levels,
and will be the greatest amount of debt Henry has ever carried.
Moody's estimates debt leverage, defined as debt-to-EBITDA,
increasing to approximately 6.4x on a pro forma basis from 5.1x as
of June 30, 2014, and remaining elevated over the intermediate
term. Interest coverage, defined as EBITA-to-interest expense,
would decrease to about 1.5x on a pro forma basis from 1.7x as of
June 30, 2014 (all ratios include Moody's standard adjustments).
The pro forma credit metrics include some earnings from West
Development Group ("WDG"), a manufacturer of silicone and spray
polyurethane foam roofing products, which Henry recently acquired.
Higher cash interest payments will result in free cash flow to be
marginally breakeven on a pro forma basis. The size of the
proposed dividend is significant as this dividend represents
several years of the company's last twelve months of free cash
flow.
The stable rating outlook reflects Moody's view that Moody's
projected credit metrics for Henry will remain supportive of the
B3 Corporate Family Rating.
The B2 rating assigned to the new 1st lien senior secured bank
credit facility, one notch above Henry's Corporate Family Rating,
reflects its payment priority in a recovery situation. The
facility is comprised of a $20 million revolving credit facility
maturing in 2019 and a $165.3 million term loan maturing in 2020.
This bank facility has a first-priority interest in substantially
all of the company's assets and benefits from $70 million of
junior obligations.
Positive rating actions are unlikely over the intermediate term
due to the company's highly leveraged capital structure. However,
if Henry demonstrates an ability to generate higher operating
earnings and free cash flow such that operating performance
results in adjusted debt-to-EBITDA sustained under 5.5x (all
ratios incorporate Moody's standard adjustments) could have a
positive impact on the company's credit ratings. An improvement in
Henry's liquidity profile could also support positive rating
actions.
Negative rating actions may occur if Henry fails to benefit from
growth in its end markets or if operating performance falls below
Moody's expectations. Adjusted debt-to-EBITDA sustained near 7.0x
(all ratios incorporate Moody's standard adjustments), a
deteriorating liquidity profile, or any future special dividends
could negatively pressure the ratings.
Henry Company, LLC, headquartered in El Segundo, CA, is a North
American developer and manufacturer of roofing products and other
building envelope applications for the residential and commercial
construction markets. Graham Partners, through its affiliates, is
the majority owner of Henry. Revenues for the 12 months through
June 30, 2014 totaled approximately $310 million.
The principal methodology used in this rating was Global
Manufacturing Companies published in July 2014. Other
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the U.S., Canada and EMEA
published in June 2009.
ITR CONCESSION: Oct. 28 Hearing for Prepackaged Plan Set
--------------------------------------------------------
ITR Concession Company LLC (ITRCC), the private operator of the
Indiana Toll Road (ITR), on Sept. 24 disclosed that it received
approval of all critical first-day motions at its "first day"
hearing in the United States Bankruptcy Court in the Northern
District of Illinois presided over by Bankruptcy Judge Pamela S.
Hollis. The Bankruptcy Court approved, among other things,
ITRCC's requests to continue to cover its obligations to pay
employee wages; provide health care and other benefits; continue
existing customer programs, including E-ZPass electronic toll
collection accounts; continue to access cash collateral to pay
operating expenses in the ordinary course; and pay pre-filing
trade and other general unsecured claims.
The Bankruptcy Court also set Oct. 28, 2014, as the date for the
confirmation hearing for ITRCC's prepackaged Chapter 11 plan,
which has already received acceptances from holders of nearly 98
percent of ITRCC's senior secured creditors.
"We are pleased with the Court's approval of our first-day motions
as it further ensures that it will be business as usual," said
Fernando Redondo, ITRCC chief executive officer. "The employees,
vendors, customers and communities we serve will not notice any
change in operations. [Wednes]day's decision is a critical first
step in what we expect will be a timely process given the strong
backing our plan has from its lenders."
ITRCC, and its affiliates, including ITR Concession Company
Holdings LLC and Statewide Mobility Partners LLC, filed voluntary
petitions for relief under Chapter 11 of the United States
Bankruptcy Code in the United States Bankruptcy Court in the
Northern District of Illinois on Sept. 21, 2014. The case number
is Case No. 14-34284 (PSH) and is being presided over by the
Honorable Pamela S. Hollis. Interested parties can find updates
and additional information at ITRCC's website at
www.ezpassin.com/restructuring and at ITRCC's notice and claims
agent's website at http://www.kccllc.net/ITR
Kirkland & Ellis LLP is serving as legal adviser to ITRCC. UBS
Investment Bank is serving as financial adviser to the Special
Committee of the Board of Directors of Statewide Mobility Partners
LLC, and is handling the sale process for ITRCC. Moelis & Company
LLC is serving as financial adviser to ITRCC in connection with
the restructuring. Houlihan Lokey Capital, Inc., is serving as
financial adviser and Milbank, Tweed, Hadley & McCloy LLP and
Taft, Stettinus & Hollister LLP are serving as co-counsel to the
Committee of Secured Lenders.
About ITR Concession
ITR Concession Co. operates a 157-mile, four- to six-lane toll
road in Northern Indiana commonly referred to as the Indiana Toll
Road. The toll road is a vital artery for interstate commerce,
linking the City of Chicago and Lake Michigan to the interstate
highway system, as well as markets, ports, and commercial and
financial centers across the United States. The toll road opened
in 1956 and is used by nearly 130,000 vehicles per day.
ITR Concession and its affiliates filed for bankruptcy protection
(Bankr N.D. Ill. Lead Case No. 14-34284) on Sept. 21 with a plan
to restructure some $6 billion in debt by selling its assets or
reorganizing its business.
The Debtors have tapped Kirkland & Ellis LLP as counsel; Moelis &
Company LLC as investment banker; and Kurtzman Carson Consultants
LLC, as claims and notice agent.
As of the Petition Date, the Debtors have outstanding funded debt
of $6.0 billion that is comprised of approximately $3.855 billion
in principal amount of first-priority syndicated bank-debt
obligations and approximately $2.15 billion in principal amount of
pari passu first-lien interest rate hedging obligations.
JEFFERY P. ALEXANDER: Seeks Authority to Use Cash Collateral
------------------------------------------------------------
Jeffery P. Alexander, DDS Inc., dba Youthful Tooth, seeks
authority from the Bankruptcy Court to use cash collateral and
grant a replacement lien and other adequate protection to its
lender.
The Debtor also seeks authority to pay prepetition payroll.
The motions were filed Sept. 23, four days after the Debtor filed
its bankruptcy petition. The Debtor also requested an Order
Shortening Time for Hearing, which was granted on Sept. 23.
Hearing on the motions is set for Sept. 25, 2014 at 3:00 p.m.
In a Sept. 24 Memorandum available at http://is.gd/2QcajCfrom
Leagle.com, Bankruptcy Judge William J. Lafferty, III, in Oakland,
directed the Debtor to be prepared to address, with particularity
and with appropriate evidentiary support, the following issues:
1. Which creditors have security interests or liens against
the assets that constitute the cash collateral that the debtor
seeks to use, the amount of the claims held by such creditors, the
extent to which each of the claims are secured, and the priority
of the security interests claimed by such creditors.
2. The debtor's position regarding which of these putatively
secured creditors is entitled to adequate protection of their
secured claim, and what treatment the debtor proposes to provide
such adequate protection.
3. With respect to the request to pay pre-petition claims of
employees of the debtor, (a) which employees proposed to be so
paid are not current employees of the debtor, or are expected to
be terminated as a result of the debtor's filing, (b) whether any
such employees who are medical doctors are likely to terminate
their employment if not timely paid the pre-petition portion of
their wages, and (c) what would justify the Court in ordering the
payment of pre-petition wages or salaries of Dr. Jeffery P.
Alexander and Dr. Mary Jane Salazar.
4. What additional motions the debtor anticipates making with
respect to any pre-petition employee benefits claims, or related
matters, and an estimate of the amount of any pre-petition claims
that would be paid or honored in connection therewith.
5. What grounds exist, other than the "doctrine of
necessity", for paying, at the outset of this chapter 11 case, any
other pre-petition unsecured claims.
6. Which creditors have an interest in the debtor's equipment
and whether there is any dispute regarding the classification of
that interest, specifically with respect to whether the agreement
between the debtor and creditors is a lease or a loan.
Jeffrey P. Alexander, DDS, Inc., dba A Youthful Tooth, in Oakland,
Calif., filed for Chapter 11 bankruptcy (Bankr. N.D. Calif. Case
No. 14-43851) on Sept. 19, 2014. Judge William J. Lafferty
presides over the case. Chris D. Kuhner, Esq., at Kornfield,
Nyberg, Bendes and Kuhner, P.C., serves as the Debtor's counsel.
In its petition, the Debtor listed total assets of $3.55 million
and total liabilities of $3.95 million. The petition was signed
by Jeffrey P. Alexander, president. A list of the Debtor's 15
largest unsecured creditors is available for free at
http://bankrupt.com/misc/canb14-43851.pdf
JOHN D. OIL: Bank Seeks Relief From Stay to Divest Lien on Asset
----------------------------------------------------------------
Northwest Savings Bank asks the United States Bankruptcy Court for
the Western District of Pennsylvania for relief from automatic
stay pursuant to Section 362 of the Bankruptcy Code.
In September 2003, Jeffrey L. Quirk entered into a Note with
Northwest whereby he obtained a loan for $100,000 payable through
October 1, 2018. As security for the Note, he executed a Mortgage
in favor of Northwest whereby Northwest obtained a first mortgage
lien on certain real property he owned in Madison, Ohio.
A lien search of the Real Property disclosed a certain Memorandum
of Oil and Gas Lease by and between Debtor John D. Oil and Gas
Company and Mr. Quirk. Presumably, he is a party to an Oil & Gas
Lease with the Debtor, which relates to the Real Property.
Northwest contends that Mr. Quirk is in default under the terms of
his Note and Mortgage and Northwest was forced to file a Complaint
for Foreclosure, Money Judgment and Relief with the Court of
Common Pleas for Lake County, Ohio. Under Ohio state law,
Northwest was required to list the Debtor as a Defendant in the
Complaint in order to divest its junior interest in the Real
Property. Northwest does not seek a monetary judgment against the
Debtor.
Attorneys for Northwest Savings Bank:
Mark G. Claypool, Esq.
KNOX McLAUGHLIN GORNALL & SENNETT, P.C.
120 West Tenth Street
Erie, PA 16501-1461
Tel: (814) 459-2800
About John D. Oil & Gas;
OZ Gas; and Great Plains Exploration
Mentor, Ohio-based John D. Oil & Gas Co., is in the business of
acquiring, exploring, developing, and producing oil and natural
gas in Northeast Ohio. The Company has 58 producing wells. The
Company also has one self storage facility located in Painesville,
Ohio. The self-storage facility is operated through a partnership
agreement between Liberty Self-Stor Ltd. and the Company.
John D. Oil's affiliated entities -- Oz Gas, LTD., and Great
Plains Exploration, LLC -- filed voluntary Chapter 11 petitions
(Bankr. W.D. Pa. Case Nos. 12-10057 and 12-10058) on Jan. 11,
2012. Two days later, John D. Oil filed its own Chapter 11
petition (Bankr. W.D. Pa. Case No. 12-10063).
On Nov. 21, 2011, at the request of the lender RBS Citizens, N.A.,
dba Charter One, a receiver was appointed for all three corporate
Debtors, in the United States District Court for the Northern
District of Ohio at case No. 11-cv-2089-CAB. District Judge
Christopher A. Boyko issued an order appointing Mark E. Dottore as
receiver. The Receivership Order was appealed to the Sixth
Circuit Court of Appeals on Dec. 19, 2011, and the appeal is
currently pending.
Judge Thomas P. Agresti oversees the Chapter 11 cases. Robert S.
Bernstein, Esq., at Bernstein Law Firm P.C., serves as counsel to
the Debtors. Each of Great Plains and Oz Gas estimated $10
million to $50 million in assets and debts. John D. Oil's balance
sheet at Dec. 31, 2011, showed $6.98 million in total assets,
$13.26 million in total liabilities, and a stockholders' deficit
of $6.28 million. The petitions were signed by Richard M.
Osborne, CEO.
The United States Trustee said a committee under 11 U.S.C. Sec.
1102 has not been appointed because no unsecured creditor
responded to the U.S. Trustee's communication for service on the
committee.
JOHN D. OIL: Files Ballot Summary for Holders of Class 4 Claims
---------------------------------------------------------------
John D. Oil and Gas Company filed with the U.S. Bankruptcy Court
for the Western District of Pennsylvania Ballot Summary for its
Fifth Amended Plan of Reorganization dated August 12, 2014.
Ballot Summary for holders of Class 4 Claims:
Creditor Claim Value Accept/Reject
-------- ----------- -------------
James W. Blum $2,000 Accept
Digital One, Inc. 201 Accept
Hilaria and James T. Kerr 1,500 Accept
Kohrman Jackson & Krantz, PLL 25,601 Accept
Laru, Inc. 1,751 Accept
Daniel and Deborah Lilly 144 Accept
Tri-State Measurement 1,428 Accept
William Ruple Co. LLC 575 Accept
Number of Creditors in Class 4: 32
Votes Cast: 8
Votes in Favor: 8
Acceptance (%): 100%
The Court will convene a hearing on October 2, 2014, at 10:00
a.m., to consider the confirmation of John D. Oil and Gas
Company's Fifth Amended Plan of Reorganization.
About John D. Oil & Gas;
OZ Gas; and Great Plains Exploration
Mentor, Ohio-based John D. Oil & Gas Co., is in the business of
acquiring, exploring, developing, and producing oil and natural
gas in Northeast Ohio. The Company has 58 producing wells. The
Company also has one self storage facility located in Painesville,
Ohio. The self-storage facility is operated through a partnership
agreement between Liberty Self-Stor Ltd. and the Company.
John D. Oil's affiliated entities -- Oz Gas, LTD., and Great
Plains Exploration, LLC -- filed voluntary Chapter 11 petitions
(Bankr. W.D. Pa. Case Nos. 12-10057 and 12-10058) on Jan. 11,
2012. Two days later, John D. Oil filed its own Chapter 11
petition (Bankr. W.D. Pa. Case No. 12-10063).
On Nov. 21, 2011, at the request of the lender RBS Citizens, N.A.,
dba Charter One, a receiver was appointed for all three corporate
Debtors, in the United States District Court for the Northern
District of Ohio at case No. 11-cv-2089-CAB. District Judge
Christopher A. Boyko issued an order appointing Mark E. Dottore as
receiver. The Receivership Order was appealed to the Sixth
Circuit Court of Appeals on Dec. 19, 2011, and the appeal is
currently pending.
Judge Thomas P. Agresti oversees the Chapter 11 cases. Robert S.
Bernstein, Esq., at Bernstein Law Firm P.C., serves as counsel to
the Debtors. Each of Great Plains and Oz Gas estimated $10
million to $50 million in assets and debts. John D. Oil's balance
sheet at Dec. 31, 2011, showed $6.98 million in total assets,
$13.26 million in total liabilities, and a stockholders' deficit
of $6.28 million. The petitions were signed by Richard M.
Osborne, CEO.
The United States Trustee said a committee under 11 U.S.C. Sec.
1102 has not been appointed because no unsecured creditor
responded to the U.S. Trustee's communication for service on the
committee.
JOHN D. OIL: RBS Citizens Files Objection to Plan Confirmation
--------------------------------------------------------------
RBS Citizens, N.A., doing business as Charter One, in its capacity
as a creditor of John D. Oil and Gas Company, filed a limited
objection to the confirmation of the Fifth Amended Plan of
Reorganization with respect to each of the Debtors.
The Debtors are indebted to RBS under certain loan and security
agreements and related agreements and documents. As of the
Petition Date, the Indebtedness owed by the Debtors to RBS was in
excess of $29 million.
After extensive negotiations, RBS, the Debtors, the Debtors'
principal Richard M. Osborne, and certain other non-debtor parties
entered into that certain Settlement Agreement, dated March 17,
2014. The Settlement Agreement provides, among other things, that
the Debtors would pay RBS $10,800,000 on or before June 30, 2014.
If the RBS Settlement Amount was not paid on or before RBS
Settlement Deadline, RBS would receive on or before September 30,
2014, the RBS Settlement Amount plus 20% of the unpaid balance of
the RBS Settlement Amount as of the RBS Settlement Deadline.
RBS did not receive the RBS Settlement Amount by the RBS
Settlement Deadline. Therefore, RBS must receive the RBS Extended
Settlement Amount on or before October 15, 2014. The RBS Extended
Settlement Amount currently is $12,002,775, of which RBS has
received $6,100,601, resulting in the Settlement Balance of
$5,902,173 to be paid to RBS by October 15.
Representing RBS, Frederick D. Rapone, Jr., Esq., at Campbell &
Levine, LLC, in Pittsburgh, Pennsylvania -- fdr@camlev.com --
notes that the Plans incorporate the terms of the Settlement
Agreement, including payment by October 15 of the RBS Extended
Settlement Amount. He adds that the Plans' effective date will
occur only if certain conditions are met, including that RBS will
have received the RBS Extended Settlement Amount by the RBS
Extended Settlement Deadline.
Mr. Rapone contends that it is unclear whether the Debtors will be
able deliver the $5,902,173 balance of the RBS Extended Settlement
Amount by October 15. If they cannot do so, he argues, the
conditions precedent to the effective date of the Plans can never
be met. He argues that the Plans should not be confirmed unless
the Debtors demonstrate to the Court that the Settlement Balance
will be received by RBS by October 15.
About John D. Oil & Gas;
OZ Gas; and Great Plains Exploration
Mentor, Ohio-based John D. Oil & Gas Co., is in the business of
acquiring, exploring, developing, and producing oil and natural
gas in Northeast Ohio. The Company has 58 producing wells. The
Company also has one self storage facility located in Painesville,
Ohio. The self-storage facility is operated through a partnership
agreement between Liberty Self-Stor Ltd. and the Company.
John D. Oil's affiliated entities -- Oz Gas, LTD., and Great
Plains Exploration, LLC -- filed voluntary Chapter 11 petitions
(Bankr. W.D. Pa. Case Nos. 12-10057 and 12-10058) on Jan. 11,
2012. Two days later, John D. Oil filed its own Chapter 11
petition (Bankr. W.D. Pa. Case No. 12-10063).
On Nov. 21, 2011, at the request of the lender RBS Citizens, N.A.,
dba Charter One, a receiver was appointed for all three corporate
Debtors, in the United States District Court for the Northern
District of Ohio at case No. 11-cv-2089-CAB. District Judge
Christopher A. Boyko issued an order appointing Mark E. Dottore as
receiver. The Receivership Order was appealed to the Sixth
Circuit Court of Appeals on Dec. 19, 2011, and the appeal is
currently pending.
Judge Thomas P. Agresti oversees the Chapter 11 cases. Robert S.
Bernstein, Esq., at Bernstein Law Firm P.C., serves as counsel to
the Debtors. Each of Great Plains and Oz Gas estimated $10
million to $50 million in assets and debts. John D. Oil's balance
sheet at Dec. 31, 2011, showed $6.98 million in total assets,
$13.26 million in total liabilities, and a stockholders' deficit
of $6.28 million. The petitions were signed by Richard M.
Osborne, CEO.
The United States Trustee said a committee under 11 U.S.C. Sec.
1102 has not been appointed because no unsecured creditor
responded to the U.S. Trustee's communication for service on the
committee.
KEY ENERGY: S&P Revises Outlook to Neg. & Affirms 'BB-' CCR
-----------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on Houston-
based Key Energy Services Inc. to negative from stable. At the
same time, S&P affirmed its ratings on the company, including its
'BB-' corporate credit rating.
S&P also affirmed its 'BB-' issue rating on Key Energy Services
Inc.'s existing senior unsecured notes due 2021. The recovery
rating on this debt remains '4', indicating S&P's expectation for
average (30% to 50%) recovery in the event of a payment default.
"The revised outlook reflects the potential for a downgrade within
the next 12 months, primarily reflecting Key Energy Services
Inc.'s sharp decline in profitability over the past year resulting
from lower levels of customer activity and scheduling disruptions
that resulted in reduced asset utilization," said Standard &
Poor's credit analyst Mark Salierno. "We now expect business
recovery to take longer than previously expected and credit
measures to be below our prior expectations, including total debt
to EBITDA in the mid-to high-3x area, and funds from operations to
total debt between 20% and 25% over the next year," said Mr.
Salierno.
S&P views Key Energy's business risk profile as "weak." The
company participates in a very challenging and competitive market,
and is exposed to unpredictable spending of its exploration and
production customers. S&P views Key Energy's financial risk
profile as "aggressive," reflecting the company's elevated debt
levels relative to its size, and S&P's expectation that cash flow
and leverage measures will remain highly volatile largely because
of the high cyclicality of the oilfield services industry. S&P
expects Key Energy's liquidity to remain "adequate."
The negative outlook reflects S&P's assessment of Key Energy's
deteriorating performance in the past 12 to 18 months, resulting
in meaningfully weaker credit measures than previously expected.
Based on S&P's expectation for cash flow to be roughly in line
with capital spending over the next year, S&P believes further
debt reduction will be somewhat limited. S&P now estimates the
company's debt to EBITDA will be in the mid- to high-3x area and
FFO to total debt will range between 20% and 25%.
S&P could consider a downgrade within the next year if Key Energy
is not able to stabilize its earnings, which S&P believes would
lead to further deterioration in credit measures, including FFO to
total debt below 20% and total debt to EBITDA in excess of 4x for
an extended period.
S&P could return the outlook to stable if Key Energy can stem the
recent declines in its main business segments through increased
utilization, which S&P believes could occur if the company
successfully broadens its customer base and if business activity
with its main customers increases, particularly in California and
Mexico. Under such a scenario, S&P would also expect Key would
restore credit measures from current levels, which would include
maintaining FFO to total debt closer to the 30% area.
LEHMAN BROTHERS: To Make 6th Payout Totaling $10.9 Billion
----------------------------------------------------------
Lehman Brothers Holdings Inc., as Plan Administrator, on Sept. 25
announced in a court filing the percentage recovery that will be
distributed on October 2, 2014 to holders of allowed claims
against Lehman Brothers Holdings Inc. and its various affiliated
Debtors (collectively "Lehman").
Lehman's aggregate sixth distribution to unsecured creditors
pursuant to its confirmed chapter 11 plan will total approximately
$10.9 billion. This distribution includes (1) $9.0 billion of
payments on account of third-party claims, which includes
non-controlled affiliate claims, and (2) $1.9 billion of payments
among the Lehman Debtors and their controlled affiliates (see
Exhibit B to the court filing, Docket # 46365, for further
detail). Cumulatively through the sixth distribution, Lehman's
total distributions to unsecured creditors will amount to
approximately $92.0 billion including (1) $66.1 billion of
payments on account of third-party claims, which includes
non-controlled affiliate claims and (2) $25.9 billion of payments
among the Lehman Debtors and their controlled affiliates.
In accordance with the chapter 11 plan, which was confirmed on
December 6, 2011, and subject to available funds, the Lehman
Debtors' seventh distribution to creditors is anticipated to be
made within 5 business days of March 30, 2015.
The chapter 11 plan, related disclosure statement and other
filings, including the filing referred to above, can be found at
www.lehman-docket.com in the "Key Documents" section. Questions
relating to the distribution can be directed to the Debtors'
claims agent, Epiq Systems, Inc., at 1-866-879-0688 (U.S.) and
1-503-597-7691 (Non-U.S.).
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the
fourth largest investment bank in the United States. For more
than 150 years, Lehman Brothers has been a leader in the global
financial markets by serving the financial needs of corporations,
governmental units, institutional clients and individuals
worldwide.
Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008
(Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition
listed US$639 billion in assets and US$613 billion in debts,
effectively making the firm's bankruptcy filing the largest in
U.S. history. Several other affiliates followed thereafter.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil,
Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
On Sept. 19, 2008, the Honorable Gerard E. Lynch, Judge of the
U.S. District Court for the Southern District of New York, entered
an order commencing liquidation of Lehman Brothers, Inc., pursuant
to the provisions of the Securities Investor Protection Act (Case
No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI.
The Bankruptcy Court has approved Barclays Bank Plc's purchase of
Lehman Brothers' North American investment banking and capital
markets operations and supporting infrastructure for
US$1.75 billion. Nomura Holdings Inc., the largest brokerage
house in Japan, purchased LBHI's operations in Europe for US$2
plus the retention of most of employees. Nomura also
bought Lehman's operations in the Asia Pacific for US$225 million.
International Operations Collapse
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and
Mike Jervis, partners at PricewaterhouseCoopers LLP, have been
appointed as joint administrators to Lehman Brothers International
(Europe) on September 15, 2008. The joint administrators have
been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc.
filed for bankruptcy in the Tokyo District Court on September 16.
Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33
billion) in liabilities in its petition.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other insolvency
and bankruptcy proceedings undertaken by its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
LIBERTY BRANDS: Case Trustee Loses Avoidance Suit
-------------------------------------------------
Michael Joseph, as Liquidating Trustee for Liberty Brands, LLC,
failed in his bid to recoup transfers made by the Debtor to Barry
Garner, Discount Tobacco Warehouse, Inc., Sunflower Supply
Company, Inc., Gary Hall, Bentley Investments of Nevada, LLC, Hall
Retained Annuity Trust I, and the Hall Family Trust.
Bankruptcy Judge Mary F. Walrath rejected two counts raised by the
Liquidating Trustee: for avoidance of a post-petition transfer and
for recharacterization of debt to equity. The Court said the
post-petition transfer was authorized by the Court, and the
Trustee has failed to establish that the debt at issue was
intended by the parties to be a capital contribution.
A copy of the Court's Sept. 25 Opinion is available at
http://is.gd/rqdRWlfrom Leagle.com.
About Liberty Brands
Headquartered in Richmond, Virginia, Liberty Brands LLC was in the
business of manufacturing, marketing and selling deeply discounted
cigarettes in the United States. The Debtor was party to an
agreement, as a cigarette manufacturer, to make annual payments to
certain states. When the Debtor was unable to make a required
payment to the Settling States, it filed a voluntary Chapter 11
petition (Bankr. D. Del. Case No. 07-10645) on May 10, 2007.
William David Sullivan, Esq., in Wilmington, Del., represented the
Debtor in its restructuring efforts. No Official Committee of
Unsecured Creditors was appointed in the case. When the Debtor
filed for bankruptcy, it listed total assets of $9,256,685 and
total debts of $25,573,877.
Post-petition, the Debtor was unable to obtain financing or to
sell its inventory in the ordinary course of business. The Debtor
conducted an auction of its manufacturing equipment and the sales
were approved by the Court on Nov. 5 and Dec. 12, 2007. On Nov.
27, 2007, the Court authorized the Debtor to destroy its unsold
inventory in accordance with Tobacco Tax and Trade Bureau
procedures. A Plan of Liquidation was proposed by settling states
which was confirmed by the Court on March 12, 2009. Pursuant to
the Plan, Michael Joseph was appointed as the Liquidating Trustee
to administer the estate and pursue certain litigation.
LV HARMON: Trust Seeks Relief From Stay to Sell Las Vegas Asset
---------------------------------------------------------------
Wilmington Trust, National Association, seeks relief from
automatic stay pursuant to Sections 362(d)(2) and (3) of the
Bankruptcy Code in the bankruptcy proceedings of LV Harmon LLC, et
al.
Wilmington Trust is the agent for the lenders under that first
lien credit agreement date August 1, 2007. There are seven
borrowers under the Credit Agreement, including all five of the
Debtors. The loans made under the Credit agreement are secured by
a first-priority Deed of Trust on a 60-acre parcel of land just
east of the Las Vegas strip that the Borrowers own as tenants-in-
common. The bankruptcy cases were filed in June to prevent a
foreclosure sale of the Property that had been set for that same
day, William J. Barrett, Esq., at Barack Ferrazzano Kirschbaum &
Nagelberg LLP, in Chicago, Illinois -- william.barrett@bfkn.com --
says.
Wilmington Trust, on behalf of the First Lien Lenders, seeks
relief from the automatic stay so it can complete the foreclosure
of the Property.
Mr. Barrett contends that the Debtors have no equity in the
Property, nor is the Property needed for an effective
reorganization or one that is reasonably in prospect. He relates
that the Debtors owe the First Lien Lenders over $430 million and
owe their second lien lenders at least $205 million. He asserts
that all of the Debtors' secured debt is secured by the Property,
which is only recently appraised between $95 million and $110
million.
Consequently, Mr. Barrett says, the Debtors have secured debts
exceeding the value of the Property by over one-half billion
dollars. He argues that the debt relative to the value of the
Property is simply too great to permit confirmation of a plan
under the cram down standards of Section 1129(b) of the Bankruptcy
Code.
About LV Harmon LLC
LV Harmon LLC and four of its affiliates filed separate Chapter 11
bankruptcy petitions (Bankr. D. Nev. Case Nos. 14-14360 to 14-
14364) on June 25, 2014. The petitions were signed by
Massimiliano Ferruzzi as authorized signatory. The Debtors
disclosed $4,095,191 in assets and $525,345,325 in liabilities as
of the Chapter 11 filing. Gordon Silver serves as the Debtors'
counsel. Judge August B. Landis presides over the case.
LXR HOSPITALITY: Forbearance Terms Extended to May 2015
-------------------------------------------------------
LONGHOUSE HOSPITALITY: Forbearance Agreement Through June 2015
--------------------------------------------------------------
-- car, kani nga stories originally intended for TCR Sunday pero
nice nga ma highlight ni nga debts kay basin mag file pud ug
bankruptcy similar sa katong hotel bankruptcy lately, katong owner
sa Doral Resort, Claremont, La Quinta etc.
Standard & Poor's Ratings Services raised its ratings on the class
A-1 and A-2 commercial mortgage pass-through certificates from
Wachovia Bank Commercial Mortgage Trust's series 2007-WHALE8, a
U.S. commercial mortgage-backed securities (CMBS) transaction. In
addition, S&P affirmed its ratings on classes B, C, D, E, F, LP-1,
LP-2, and LP-3 from the same transaction.
The rating actions follow S&P's analysis of the transaction
primarily using its criteria for rating U.S. and Canadian CMBS
transactions, in which S&P re-evaluated the collateral securing
the transaction, and reviewed the deal structure and liquidity
available to the trust.
The upgrades reflect the significantly reduced pool trust balance,
S&P's expectation of the credit enhancement available to the
classes, which S&P believes is greater than its estimates of the
credit enhancement necessary for the respective rating levels, and
S&P's view of the remaining collateral's current and future
performance and available liquidity support.
The affirmations on the pooled certificate classes reflect
subordination and liquidity support levels that are consistent
with the outstanding ratings. While available credit enhancement
levels suggest positive rating movements on these pooled
certificate classes and further upward movements on classes A-1
and A-2, S&P's analysis also considered the transaction's
susceptibility to reduced liquidity support from the remaining
assets in the trust and refinancing risk.
The affirmed 'CCC- (sf)' ratings on the "LP" raked certificates
reflect S&P's re-evaluation of the Longhouse Hospitality Pool
loan. The "LP" raked certificates derive 100% of their cash flow
from a subordinate non-pooled component of this loan.
As of the Sept. 17, 2014, trustee remittance report, the trust
consisted of three floating-rate loans indexed to one-month LIBOR
(0.155%) and one real estate-owned (REO) asset with an aggregate
pooled trust balance of $814.5 million and an aggregate trust
balance of $960.5 million. The pooled trust has incurred $250,000
of principal losses to date. Three ($765.7 million, 94.0% of the
pool trust balance) of the four remaining assets are currently
with the special servicer.
S&P based its analysis, in part, on a review of the borrower's
operating statements for the available trailing 12 months (TTM)
ended 2014, and years ended Dec. 31, 2013, 2012, 2011, 2010, and
2009. In addition, S&P reviewed the available Smith Travel
Research reports for the lodging properties and the June 30, 2014,
rent rolls for the multifamily properties.
Details on the four remaining assets are:
-- The LXR Hospitality Pool loan is the largest asset remaining
in the pool and with the special servicer. The loan has a
whole-loan balance of $900.9 million that is divided into a
$582.5 million senior pooled trust component (71.5% of the
pooled trust balance), a $123.7 million subordinate non-
pooled trust component that supports the "LXR" raked
certificates (not rated by Standard & Poor's), and a
$194.7 million nontrust junior participation interest. In
addition, the equity interest in the mortgage borrower
secures mezzanine debt totaling $197.3 million.
-- The mortgage loan is currently secured by eight full-service
hotel properties totaling 3,830 rooms in Puerto Rico,
Florida, Arizona, and Jamaica. The loan was transferred to
the special servicer on April 11, 2012, due to imminent
maturity default. The loan matured on May 9, 2012, and the
former special servicer, Bank of America N.A., entered into
a forbearance agreement and consensual disposition plan with
the borrower. The successor special servicer, KeyBank Real
Estate Capital (KeyBank), subsequently modified this
agreement with an effective date of Aug. 8, 2014. The
current forbearance terms now include extending the
forbearance termination date to May 9, 2015, to give the
borrower time to liquidate the remaining assets, adjusting
the minimum release prices on the remaining properties, and
curtailing principal. KeyBank stated that special servicing
and workout fees are paid by the borrower. The borrower's
TTM July 31, 2014, operating statements reported a combined
74.5% occupancy, $200.99 average daily rate (ADR), and
$149.80 revenue per available room (RevPAR) for the
portfolio. S&P's combined expected case valuation, using an
8.89% weighted average capitalization rate, yielded an in-
trust 111.0% loan-to-value (LTV) ratio.
-- The Longhouse Hospitality Pool loan is the second-largest
asset remaining in the pool and with the special servicer.
-- The loan has a whole-loan balance of $147.2 million that is
split between a $132.2 million senior pooled component that
makes up 16.2% of the pooled trust balance and a $15.0
million subordinate nonpooled component that supports the
"LP" raked certificates. In addition, the equity interest
in the mortgage borrower secures mezzanine debt totaling
$35.0 million. The mortgage loan is secured by 42 extended-
stay hotels totaling 5,600 rooms in 11 states throughout the
southeastern and southwestern U.S. The loan was transferred
to the special servicer on May 11, 2012, due to imminent
maturity default.
-- The loan matured on June 8, 2012. According to the special
servicer, the borrower is performing under a forbearance
agreement that is in effect through June 9, 2015. The
forbearance terms included the borrower funding the reserve
accounts and making principal curtailments. The borrower's
TTM July 31, 2014, operating statements reported a combined
72.0% occupancy, $35.95 ADR, and $25.90 RevPAR for the
portfolio. S&P's combined expected case valuation, using a
9.75% capitalization rate, yielded an in-trust 125.9% LTV
ratio.
-- The Four Seasons Nevis REO asset, the third-largest asset in
the pool and with the special servicer, is a 196-room full-
service hotel in Charlestown, Nevis, West Indies. The asset
has a whole-loan balance of $126.6 million, which is split
into a $51.0 million senior pooled trust component (6.3%), a
$7.3 million subordinate nonpooled component that supports
the "FSN" raked certificates, and a $68.3 million nontrust
junior participation interest. The loan was transferred to
the special servicer, Wells Fargo Bank N.A., on Oct. 23,
2008, and the property became REO on May 27, 2010. Wells
Fargo indicated that it plans to re-market the property for
sale in early 2015. S&P expects a moderate loss (between
26% and 59% of the trust balance), upon the eventual
resolution of the asset.
-- The Southeast Multifamily Pool loan, the smallest loan
remaining in the pool, has a whole-loan balance of $66.7
million that comprises a $48.8 million (6.0%) senior trust
participation interest and a $17.9 million junior nontrust
participation interest. In addition, the equity interest in
the mortgage borrower secures mezzanine debt totaling $11.9
million. The loan is currently secured by six multifamily
apartment complexes totaling 1,541 units in Florida, North
Carolina, and Georgia. The mortgage loan was transferred to
the special servicer on Jan. 14, 2010, because the borrower
filed for bankruptcy. The loan was modified on March 15,
2011, and returned back to the master servicer on Sept. 1,
2011. The modification terms included the assumption of the
whole loan by the mezzanine lender and extension of the
loan's maturity with two, one-year extension options not to
exceed beyond June 9, 2015. According to the June 2014 rent
rolls, the combined occupancy was 85.3% for the portfolio.
-- S&P's combined expected case valuation, using a 6.92%
weighted average capitalization rate, yielded an in-trust
132.1% LTV ratio.
STANDARD & POOR'S 17G-7 DISCLOSURE REPORT
SEC Rule 17g-7 requires an NRSRO, for any report accompanying a
credit rating relating to an asset-backed security as defined in
the Rule, to include a description of the representations,
warranties, and enforcement mechanisms available to investors and
a description of how they differ from the representations,
warranties, and enforcement mechanisms in issuances of similar
securities. The Rule applies to in-scope securities initially
rated (including preliminary ratings) on or after Sept. 26, 2011.
If applicable, the Standard & Poor's 17g-7 Disclosure Reports
included in this credit rating report are available at:
http://standardandpoorsdisclosure-17g7.com
RATINGS LIST
Wachovia Bank Commercial Mortgage Trust
Commercial mortgage pass-through certificates series 2007-WHALE8
Rating
Class Identifier To From
A-1 92976BLJ9 AA (sf) A+ (sf)
A-2 92976BLL4 BB- (sf) B- (sf)
B 92976BLS9 CCC+ (sf) CCC+ (sf)
C 92976BLU4 CCC+ (sf) CCC+ (sf)
D 92976BLW0 CCC (sf) CCC (sf)
E 92976BLY6 CCC- (sf) CCC- (sf)
F 92976BMA7 CCC- (sf) CCC- (sf)
LP-1 92976BNA6 CCC- (sf) CCC- (sf)
LP-2 92976BNC2 CCC- (sf) CCC- (sf)
LP-3 92976BNE8 CCC- (sf) CCC- (sf)
METALDYNE PERFORMANCE: S&P Assigns 'BB-' CCR; Outlook Stable
------------------------------------------------------------
Standard & Poor's Ratings Services assigned U.S. components
manufacturer Metaldyne Performance Group Inc. (MPG) its 'BB-'
corporate credit rating. The outlook is stable.
S&P also assigned its 'BB+' issue-level rating ('1' recovery
rating) to the senior secured term loan and revolver and a 'B+'
issue-level rating ('5' recovery rating) to the $700 million
senior notes. The borrower is MPG Holdco I Inc., a wholly owned
subsidiary of MPG.
S&P expects to withdraw all ratings on the three existing rated
entities ASP HHI Intermediate Holdings Inc., Metaldyne LLC, and
Grede Holdings LLC at completion of the acquisition transaction
and repayment of all existing debt at those entities.
The ratings on MPG reflect Standard & Poor's Ratings Services'
view of the company's improved scale of operations and diversity
upon merger, which should improve global support to its customers
at sustainable EBITDA margins that S&P considers above average.
MPG provides highly-engineered components for use in powertrain
and safety-critical platforms for the light, commercial, and
industrial vehicle markets. S&P expects the company to maintain
high market shares in the majority of its product segments. It
generated approximately 44% of its pro forma net sales in the
growing engine and transmission categories, 25% in the safety-
critical categories, 18% in the driveline category, with the
remainder in other specialty products.
S&P's business risk assessment reflects the multiple industry
risks facing automotive suppliers, including volatile demand, high
fixed costs, intense competition, and the potential for severe
pricing pressures. These risks mostly offset the favorable facts
that a meaningful portion of MPG's products are used mostly in
vehicle powertrains (substantially high content per vehicle), last
longer, and are less commodity-like than many other automotive
parts. Also, MPG current businesses are much less exposed to
unrecovered increases in raw material costs than it was before
2008 -- a critical change, in S&P's view, from its previously more
extensive operations -- and help the company achieve double-digit
EBITDA margins.
MGM RESORTS: Fitch Upgrades Issuer Default Ratings to 'B+'
----------------------------------------------------------
Fitch Ratings has upgraded MGM Resorts International's (MGM) and
MGM China Holdings Ltd's (MGM China) IDRs to 'B+' from 'B' and
'BB' from 'BB-', respectively. Fitch has also upgraded MGM's
senior secured credit facility to 'BB+/RR1' from 'BB/RR1', MGM's
senior unsecured notes to 'BB/RR2' from 'B+/RR3' and MGM China's
senior secured credit facility to 'BBB-' from 'BB+'. The Rating
Outlook remains Positive.
MGM China's IDR continues to be notches up off MGM's IDR. MGM
China's stand-alone credit profile is borderline investment grade;
however, Fitch links MGM China's to MGM's IDR since the weaker MGM
controls MGM China through its 51% stake. The notching reflects
the restricted payment covenants at MGM China, which restrict
distributions if leverage at MGM China is greater than 3.5x.
Key Rating Drivers
Fitch's upgrade of MGM's IDR to 'B+' and the Positive Outlook
reflect the company's strong performance on the Las Vegas Strip
and in Macau as well as Fitch's longer-term positive outlooks for
these markets. The rating actions take into account MGM's
improving FCF profile bolstered by the company's declining
interest expense and distributions from MGM China. The increased
probability that MGM's $1.45 billion of 4.25% convertible notes
will convert by April 2015 and the growing equity value of MGM's
stake in CityCenter are also positively factored into the IDR.
These considerations plus MGM's $3.6 billion in available
liquidity and demonstrated access to capital markets largely
offset Fitch's concerns related to MGM near-term liquidity needs.
MGM has a $5 billion development pipeline and $2.4 billion of
maturities coming due through 2016 (excluding the convertible
notes). Fitch estimates that MGM will need to access additional
$1 billion to $1.5 billion in capital to meet its funding needs
through 2016.
MGM's consolidated leverage adjusted for income attributable to
minority interest has improved to manageable 6.7x for LTM period
ending June 30, 2014 versus 7.4x and 8.1x for same periods in 2013
and 2012, respectively. The improvement is driven by EBITDA growth
on the Las Vegas Strip (10% compounded annual growth rate since
the 2012 LTM period) and in Macau (15% growth rate). Debt also
declined to $12.9 billion as of June 30, 2014 from $13.9 billion
two years ago with MGM using its domestic FCF and MGM China
dividends to paydown debt.
Fitch projects MGM's leverage to continue to decline even as the
company funds its $5 billion development pipeline including $2
billion in U.S. In Fitch's base case projection U.S. debt declines
by $1.1 billion from June 30, 2014 through 2016. This incorporates
$1.6 billion of cumulative FCF including Macau dividends and the
conversion of $1.45 billion in notes to equity (about an 18%
cushion in stock price relative to the conversion price).
Consolidated leverage adjusted for minority interest income
improves to 5x by year-end 2016, which is consistent with the
lower-end of the 'BB' category given MGM's segment exposure.
In Fitch's projections growth on the Las Vegas Strip offsets the
recent softness in Macau until 2016 when MGM's projects start to
come online. Fitch's 2016 EBITDA forecast includes half a year of
MGM Cotai ($660 million full year EBITDA estimated). Fitch
estimates EBITDA for MGM National Harbor and MGM Springfield at
roughly $240 million and $120 million, respectively. In 2017, the
first full year of the projects being open, leverage could
potentially decline to below 4x if the company remains committed
to debt reduction.
Macau revenue trends have been under pressure over the past
several months due the weakness in the VIP segment. Fitch believes
the downturn is mainly driven by the corruption crackdown in China
and expects the segment to stabilize by late 2014 or early 2015.
The mass market, which accounted for 77% of MGM Macau's EBITDA in
the second-quarter 2014, continues to grow and will be a
stabilizing factor for MGM China's EBITDA in the interim.
Las Vegas Outlook
Fitch remains positive on the Las Vegas Strip outlook, especially
relative to other U.S. markets. Fitch projects that the market
will manage midsingle-digit RevPAR and low single-digit gaming
revenue and visitation growth over the next two to three years.
Visitation and RevPAR in 2015 will face a difficult comparison as
CONEXPO-CON/AGG convention cycles out of Las Vegas (nearly 130,000
attendees in 2014). However, MGM sounded optimistic on convention
trends on their second-quarter 2014 conference call, citing that
convention bookings for 2015 are up by double digits with improved
rates.
Year-to-date through July 31, 2014, Strip-wide RevPAR is up 10%
yoy, with 7% coming from rate increases. MGM's RevPAR growth is on
par with the market growing 14% in first-quarter 2014 and 6% in
the second quarter. The company's guidance for the third-quarter
2014 RevPAR growth is 5%. MGM's built-out convention space at
Mandalay Bay will further increase its already-sizable exposure to
convention business.
Macau Outlook
Fitch's 4% revenue growth for 2014 forecast incorporates the
balance of the year's growth for mass, VIP and slots of +15%, -
15% and +5%, respectively. This equates to 3.5% monthly declines
for the remainder of the year, which is consistent with the past
two reported months. Fitch's assumptions take into account the
smoking ban on the mass-market floors going into effect next
month, lack of new supply and tough 2013 comparisons for the
balance of the year (mass and VIP were up 44% and 18%,
respectively, in fourth-quarter 2013).
The VIP segment has been pressured recently by tightening of
junket credit and the corruption crackdown on the mainland. Fitch
believes these pressures are temporary and expects VIP to turn
back positive by early 2015 as year-over-year comparisons get
easier and the aforementioned pressures subside, although the
exact timing is hard to estimate. Fitch points to the weak
temporary VIP trends in 2012, a year that coincided with the
transition of power to Xi Jinping from Hu Jintao.
Fitch remains positive on the mass market side and expects monthly
year-over-year revenue increases in the 10% - 20% range in this
segment through first-half 2015, until Melco Crown and Galaxy
complete their respective Cotai projects midyear. At that point
Fitch expects acceleration in mass growth, which will largely
depend on the number of table games these projects are allocated
and ability to hire and train adequate number of dealers.
Citycenter a Positive Rating Driver
Fitch views MGM's 50% stake in CityCenter as a credit positive for
MGM as the JV is in position to start distributing cash. Fitch
estimates run-rate annual discretionary FCF for CityCenter at
approximately $217 million. The run-rate FCF incorporates $331
million of LTM EBITDA from resort operations for period ending
June 30, 2014, $64 million of interest expense and $50 million of
maintenance capex assumed.
Since refinancing its notes in October 2013 with the existing term
loan B, CityCenter has been using cash flow to paydown debt.
Leverage as of June 30, 2014 is 4.7x, which is low relative to the
enterprise value. Assuming a 10x - 12x EV/EBITDA range
(Cosmopolitan recently sold for 15x) the EV is $3.3 billion - $4.0
billion. Possible options to monetize MGM's equity in CityCenter
include selling its stake to the other 50% owner (Infinity World)
or paying special dividends after a recapitalization.
The stated options, assuming the recapitalization raises leverage
to 7x, could yield MGM about $450 million- $1.2 billion. However,
access to this contingent liquidity hinges on cooperation from
Infinity World, which is entitled to the first $494 million of
distributions made by CityCenter per the JV agreement. MGM is
entitled to the next $494 million and then the distributions are
made pro rata.
MGM remains liable for the CityCenter completion guarantee. MGM
estimates the remaining liability including the Perini related
litigation expenses at $128 million. This is net of $72 million of
restricted cash CityCenter has to offset the liability.
Development Pipeline
MGM's $5 billion project pipeline is among the largest in the
gaming industry. The $2.9 billion project in Macau is fully funded
between cash on hand, projected FCF and $1.45 billion available on
the revolver in Macau. In the U.S., MGM has not specified how it
plans to fund the domestic projects but did indicate that it may
prefer using its $1.2 billion revolver. MGM can also use unsecured
notes to fund its domestic projects as the credit agreement
permits $1 billion of additional unsecured borrowings.
Fitch would view project financing for the U.S. projects more
favorably relative to the company using its corporate credit as
this would reduce the liquidity risk at the corporate parent
level. Longer-term the projects, particularly the one in Maryland,
would enhance MGM's credit profile by diversifying the company
away from the Las Vegas Strip. MGM started construction on the
Maryland project this past summer and the Springfield project is
pending the results of a referendum set for this November in
Massachusetts. The referendum is an attempt by anti-gaming groups
to repeal the state's gaming law.
Fitch views the Maryland project favorably from a return on
investment (ROI) point of view, even after accounting for the
increased $1.2 billion budget. Fitch estimates 14% - 20% ROI in
Maryland. The high ROI reflects MGM's position as the closest
casino to the D.C. area including the affluent Washington D.C.
suburbs in Virginia. Fitch is less optimistic on the Springfield
proposal considering the licensing and host community fees as well
as a less attractive supply/demand dynamic. However, Fitch still
estimates 9% - 15% ROI for the Massachusetts project, which is an
acceptable ROI for a domestic gaming investment relative to the
recent comparison set.
The company will also likely bid on a license in Japan if that
jurisdiction passes an integrated resort bill. However, even if
the bill passes in 2014, license bid winners may not be known
until 2015 or 2016 and heavy funding needs would not start until
the existing development pipeline is complete. MGM is not bidding
for a license in New York.
Issue Specific Ratings
The two notch upgrade of MGM's unsecured notes to 'BB/RR2' from
'B+/RR3' incorporates a change in EV/EBITDA multiples used by
Fitch for MGM's Las Vegas assets. The multiples were revised to 8x
- 9x range from 7x - 9x, which pushed the estimated recovery for
the unsecured notes to 71%-90% range. The updated multiples better
reflects the Las Vegas Strip trading multiples with the
Cosmopolitan Las Vegas recently selling for about 15x EV/EBITDA
and Treasure Island selling for 9x during the trough of the
recession. The multiples remain conservative to account for
uncertainty over the timing of a potential default.
The 'BBB-' rating on MGM China's credit facility recognizes the
overcollateralization of the credit facility as MGM China is about
2.5x leveraged through the credit facility assuming a full draw on
the revolver and there are no meaningful lien carveouts.
Rating Sensitivities
Positive: Future developments that may, individually or
collectively, lead to positive rating action include:
-- Consolidated leverage adjusted for minority interest income
approaching 5x (FY15: 6.4x and FY16: 5.0x);
-- Domestic discretionary FCF after MGM China dividends being
above 5% of domestic debt (FY15: 6% and FY16: 8%);
-- Reversal of negative revenue trends in Macau and continuation
in positive or stable trends on the Las Vegas Strip.
-- Continued commitment to improving balance sheet.
Negative: Future developments that may, individually or
collectively, lead to negative rating action include:
-- Consolidated leverage adjusted for minority interest income
increasing above 7x for an extended period of time (8x through the
development cycle) (FY15: 6.4x and FY16: 5.0x);
-- Domestic discretionary FCF after MGM China dividends declining
below 2% of domestic debt (FY15: 6% and FY16: 8%);
-- Extended operating pressure in Macau and/or sharp reversal of
improving trends on the Las Vegas Strip; and/or
-- Greater uncertainty with respect to MGM's ability to refinance
near-term maturities.
Fitch upgrades the following ratings:
MGM Resorts International
--IDR to 'B+' from 'B'; Outlook Positive
--Senior secured credit facility to 'BB+/RR1' from 'BB/RR1';
--Senior unsecured notes to 'BB/RR2' from 'B+/RR3;
--Convertible senior notes due 2015 to 'BB/RR2' from 'B+/RR3.
MGM China Holdings, Ltd and MGM Grand Paradise S. A. (co-
borrowers)
--IDRs to 'BB' from 'BB-'; Outlook Positive;
--Senior secured credit facility to 'BBB-' from 'BB+' (includes
$1.45 billion revolver and $550 million term loan).
MICHAEL PEGLER: Pacific Western's Bid for Summary Judgment Denied
-----------------------------------------------------------------
Bankruptcy Judge Peter H. Carroll denied the Motion for Summary
Judgment or in the Alternative for Summary Adjudication of Claims
filed by Pacific Western Bank, as successor by merger to First
California Bank in the lawsuit captioned as FIRST CALIFORNIA BANK,
Plaintiff, v. MICHAEL EUGENE PEGLER, JR. and WENDY KATHLEEN
PEGLER, Defendants, Adv. Proc. No. 9:12-ap-01286-PC (Bankr. C.D.
Calif.).
Meanwhile, Judge Carroll granted the Motion for Summary Judgment
filed by defendants Michael Eugene Pegler, Jr. and Wendy Kathleen
Pegler.
On October 15, 2012, FCB filed a complaint in Adversary No. 9:12-
ap-01286-RR, First California Bank v. Michael Eugene Pegler, Jr.,
et ux., seeking (a) a judgment against the Peglers in the
principal sum of $176,673.43, plus interest thereon from April 18,
2012 at the rate of 10% per annum to the date of entry of
judgment, reasonable attorneys' fees and costs of court; and (b)
for a determination that the judgment is non-dischargeable under
11 U.S.C. Sec. 523(a)(2)(A) and/or 11 U.S.C. Sec. 523(a)(2)(B).
FCB merged with and into Pacific Western in May 2013.
A copy of the Court's Sept. 24 Memorandum Decision is available at
http://is.gd/YMJu1Tfrom Leagle.com.
On April 17, 2012, the Peglers filed a voluntary chapter 13
petition in Case No. 9:12-bk-11547-RR, In re Michael E. Pegler,
Jr., et ux., Debtors, in the United States Bankruptcy Court,
Central District of California, Northern Division. The case was
dismissed on June 27, 2012.
On July 4, 2012, the Peglers filed a voluntary chapter 13 petition
in Case No. 9:12-bk-12561-RR, In re Michael E. Pegler, Jr., et.
ux., Debtors, in the United States Bankruptcy Court, Central
District of California, Northern Division. In their schedules
filed on July 18, 2012, FCB is listed in Schedule F as the holder
of an unsecured non-priority claim in the amount of $176,673.00
attributable to the Peglers' personal guaranty of HFONC Inc.'s
loan. HFONC operated a home furnishing or furniture consignment
business from approximately June 1998 to April 17, 2012.
On October 29, 2012, the court converted the Peglers' chapter 13
case to a case under chapter 11 of the Bankruptcy Code. The case
remains pending in chapter 11.
MUNIRE FURNITURE: Meeting to Form Creditors' Panel Set for Oct. 1
-----------------------------------------------------------------
Roberta A. DeAngelis, United States Trustee for Region 3, will
hold an organizational meeting on Oct. 1, 2014, at 10:00 a.m. in
the bankruptcy case of Munire Furniture Company, Inc. The meeting
will be held at:
United States Trustee's Office
One Newark Center, 1085 Raymond Blvd.
14th Floor, Room 1401
Newark, NJ 07102
The sole purpose of the meeting will be to form a committee or
committees of unsecured creditors in the Debtors' case.
The organizational meeting is not the meeting of creditors
pursuant to Section 341 of the Bankruptcy Code. A representative
of the Debtor, however, may attend the Organizational Meeting, and
provide background information regarding the bankruptcy cases.
To increase participation in the Chapter 11 proceeding, Section
1102 of the Bankruptcy Code requires that the United States
Trustee appoint a committee of unsecured creditors as soon as
practicable. The Committee ordinarily consists of the persons,
willing to serve, that hold the seven largest unsecured claims
against the debtor of the kinds represented on the committee.
Section 1103 of the Bankruptcy Code provides that the Committee
may consult with the debtor, investigate the debtor and its
business operations and participate in the formulation of a plan
of reorganization. The Committee may also perform other services
as are in the interests of the unsecured creditors whom it
represents.
Munire Furniture Company, Inc., based in Piscataway, N.J., filed
for Chapter 11 bankruptcy (Bankr. D.N.J. Case No. 14-29229) on
September 19, 2014, in Trenton. Judge Christine M. Gravelle
presides over the case. David L. Bruck, Esq., at Greenbaum, Rowe,
Smith, & Davis LLP, serves as the Debtor's counsel.
OMNITRACS INC: Moody's Affirms Caa1 Rating on 2nd Lien Facilities
-----------------------------------------------------------------
Moody's Investors Service, affirmed Omnitracs Inc.'s B2 corporate
family rating and B2-PD probability of default rating. Moody's
also affirmed the B1 ratings on the upsized first lien debt
facilities and affirmed the Caa1 rating on the upsized second lien
facilities. The upsized facilities will be used to finance the
acquisition of XRS Corporation. The ratings outlook remains
negative. The negative outlook persists as a result of the
company's debt financed acquisition of XRS as XRS is experiencing
revenue declines as they transition to a new business model.
Ratings Rationale
Omnitracs is upsizing its debt facilities by $150 million to
finance the acquisition of XRS Corporation, a provider of
telematics software solutions to the trucking industry. The
purchase price is being financed with debt and cash on hand.
Moody's adjusted debt to EBITDA is approximately 6x at the close
of the XRS acquisition pro forma for certain one-time adjustments
and expected cost savings, though leverage is well over 7x based
on recent actual performance. The XRS acquisition is expected to
provide Omnitracs with additional market share in the small to
medium sized fleet portion of the trucking market, as well as a
telematics solution delivered via 3rd party mobile devices
(Android based smartphones). The acquisition is strategic, and the
private equity owners (Vista Equity Partners) expect to achieve
moderate cost reductions in the combined business. However company
is currently is also integrating Roadnet (acquired in December
2013) and in the midst of its own carve out from Qualcomm less
than one year ago. In addition to integration risk, the management
team is tasked with managing through revenue declines at XRS and
the original Omnitracs businesses resulting from transitions away
from legacy products.
The rating could be downgraded if leverage is expected to be above
6.5x on other than a temporary basis. Though unlikely in the near
term, ratings could be upgraded if leverage is expected to be
sustained below 5x.
Liquidity is good based on an expected $36 million on the balance
sheet at closing and an undrawn $30 million revolving credit
facility.
The following ratings were affirmed:
Corporate Family Rating at B2
Probability of Default Rating at B2-PD
Upsized first lien senior secured loan facilities at B1
Upsized second lien senior secured loan facility at Caa1
Outlook: Negative
The principal methodology used in this rating was Global Business
& Consumer Service Industry Rating Methodology published in
October 2010. Other methodologies used include Loss Given Default
for Speculative-Grade Non-Financial Companies in the U.S., Canada
and EMEA published in June 2009.
Omnitracs is a provider of fleet management systems to the
trucking industry. The company is headquartered in Dallas, TX.
PLANT INSULATION: OneBeacon et al's Appeal Period Terminated
------------------------------------------------------------
Judge Richard Seeborg of the U.S. District Court for the Northern
District of California, San Francisco Division, on September 23,
approved a Stipulation and Order terminating the extension of time
for appellants OneBeacon Insurance Co., et al., to lodge an appeal
from the order affirming confirmation of the Amended and Restated
Second Amended Plan of Reorganization of Plant Insulation Company,
as modified.
The District Cour's order affirming the Bankruptcy Court's
Confirmation Order, was entered on August 18, 2014. The parties
have settled their disputes pending the expiration of a
reconsideration period for any party to object to the settlements,
which period expired on September 19, 2014.
The parties agreed that OneBeacon et al. would have through and
including October 17, 2014 to file an appeal from the Affirmation
Order. Judge Seeborg approved that stipulation in a Sept. 11
Order.
Pursuant to the Sept. 23 stipulation, the parties agree that the
the extension for filing an appeal is terminated and OneBeacon et
al. will have no further right to appeal from the Affirmation
Order.
The Plan provides two avenues for compensating existing and future
asbestos injury claimants: (1) from a trust established under Sec.
524(g) of the Bankruptcy Code, and (2) by preserving claimants'
right to file tort actions against Plant and insurers that refuse
to settle such claims by making cash contributions to the Trust.
The case is ONEBEACON INSURANCE CO., et al., Appellants, v. PLANT
INSULATION CO., et al., Appellees (In re PLANT INSULATION
COMPANY), CASE NO. 3:14-CV-01200-RS, BK. CASE NO. 3:09-BK-31347
TEC (N.D. Calif.).
Andrew T. Frankel, Esq. -- afrankel@stblaw.com -- at SIMPSON
THACHER & BARTLETT LLP, represents United States Fidelity and
Guaranty Company.
A full-text copy of Judge Seeborg's Sept. 11, 2014, order is
available at http://is.gd/2DvpFRfrom Leagle.com.
A full-text copy of Judge Seeborg's Sept. 23, 2014, order is
available at http://is.gd/iUL7asfrom Leagle.com.
San Francisco, California-based Plant Insulation Company
manufactured insulation products and services. It is formerly
involved in the sale, installation, repair, and distribution of
products containing asbestos. The Company filed for Chapter 11
protection (Bankr. N.D. Calif. Case No. 09-31347) on May 20, 2009.
Michaeline H. Correa, Esq., Peter J. Benvenutti, Esq., and Tobias
S. Keller, Esq., at Jones Day, represent the Debtor in its
restructuring effort. The Debtor estimated assets and debts
ranging from $500 million to $1 billion.
PMC MARKETING: PREPA Wins Favorable Ruling From 1st Cir. BAP
------------------------------------------------------------
Puerto Rico Electric Power Authority appeals to the Bankruptcy
Appellate Panel Judge for the First Circuit from a bankruptcy
court order denying its motion for payment of administrative
expenses under Bankruptcy Code Sec. 503(b)(9), as well as a
subsequent order denying its motion for reconsideration in the
Chapter 7 case of PMC Marketing Corp., a/k/a Farmacias El Amal,
a/k/a COD Drugs.
In a September 23, 2014 decision available at http://is.gd/9qGPDT
from Leagle.com, the First Circuit vacated the order denying the
Expense Motion and remanded to the bankruptcy court for further
proceedings consistent with its opinion. The appeal of the order
denying the Reconsideration Motion is waived.
PREPA seeks administrative expense priority under Sec. 503(b)(9)
in the amount of $89,336.42, representing the value of its claim
for electricity supplied to PMC during the 20-day period preceding
the petition date.
PMC Marketing Corp. filed a Chapter 11 bankruptcy petition (Bankr.
D.P.R. Case No. 09-02048) on March 18, 2009. The case was
converted into a Chapter 7 proceeding on May 19, 2010. On May 20,
2010, Noreen Wiscovitch-Rentas was appointed the Chapter 7
trustee.
POSEIDON CONCEPTS: King Oil Loses Bid for Stay Relief
-----------------------------------------------------
Colorado Bankruptcy Judge Howard R. Tallman denied the request of
King Oil Field Services, LLP, for relief from the automatic stay
in the Chapter 15 case of Poseidon Concepts Corp.
King Oil sought stay relief to litigate its lien claims against
property of the estate in the District Court, Northwest Judicial
District, County of Mountrail, North Dakota.
PricewaterhouseCoopers, the Monitor and Foreign Representative for
Poseidon Concepts, in May 2013 filed a motion to sell assets of
the jointly administered Debtors. King objected. In its
objection, King asserted that it had provided pre-petition
services to Poseidon Concepts, which failed to pay for the
services provided to it.
King filed a civil action in the State Court against Poseidon
Concepts, Inc., Case No. 31-2012-CV187, on or about November 6,
2012, in order to collect its debt. On November 21, 2012, the
State Court issued an order granting King's request for a pre-
trial attachment. The State Court Order provides "[t]hat the
Defendant's water tanks and other miscellaneous items that are
currently being stored on Plaintiff's property shall remain in
Plaintiff's possession until further Order of this Court." King's
objection to the sale asserted that the State Court Order
constitutes a lien on certain of the assets that the Monitor
sought to sell.
The Monitor's sale motion came on for hearing on June 18, 2013.
King appeared through counsel and withdrew its objection on the
record. The Court entered the order tendered by the Monitor. As
part of the resolution of King's objection, the Court's Sale Order
provides: "Vendors shall deposit $525,000 (U.S.D.) of the Purchase
Price in a segregated account pending resolution of the validity
and priority of the lien claim asserted by King Oil Field
Services, LLP, which amount shall remain on deposit until further
order of this Court."
The Sale Order also provides that, "all persons and entities . . .
holding Liens, Claims or interests . . . against or in any of
. . . the Purchased Assets . . . arising . . . in connection with
the Purchased Assets . . . prior to the Closing or the Sale, are
forever barred, estopped and permanently enjoined from asserting,
other than in this Court which shall retain exclusive jurisdiction
to hear such controversies, against Purchaser, its successors or
assigns, its property or the Purchased Assets, such persons' or
entities' Liens, Claims or interests."
The Court finds that King agreed to have $525,000 of the sale
proceeds set aside in a segregated account to protect its lien
claim and it further agreed to entry of the Sale Order that, inter
alia, provides for the exclusive jurisdiction of this Court to
adjudicate any disputes that it may have concerning the treatment
of its lien claim. It now seeks to abrogate its agreement --
vacating a portion of the Court's Sale Order in the process -- and
litigate its dispute in the State Court.
"The Court finds that King has not shown grounds under Rule 60 for
relief from the Court's Sale Order. Neither Stern or the Rooker-
Feldman doctrine affect the Court's authority to adjudicate King's
lien claim. Because King is not entitled to relief from the
Court's Sale Order under Rule 60, no purpose would be served by
reviewing the equitable factors embodied in In re Curtis, 40 B.R.
795, 799-800 (Bankr. D. Utah 1984). Such equitable balancing
cannot overcome the Court's Sale Order, incorporating the
agreement between the King and the Monitor, that enjoins King from
seeking to litigate its lien claim in any court other than this
one," Judge Tallman said in his September 25, 2014 Order is
available at http://is.gd/kvKLcMfrom Leagle.com.
About Poseidon Concepts Corp.
Based in Calgary, Alberta, Poseidon Concepts Corp. filed for
Chapter 15 protection (Bankr. D. Colo. Case No. 13-15893) on
April 12, 2013. Bankruptcy Judge Howard R. Tallman presides over
the case. Brent R. Cohen, Esq., at Rothgerber Johnson & Lyons
LLP, represents the Debtor in their U.S. restructuring efforts.
The Debtors estimated $100,001 to $500,000 in assets and
$50 million to $100 million in debts. The petition was signed by
Clinton L. Roberts at PricewaterhouseCoopers Inc., the foreign
representative. Affiliates that simultaneously filed Chapter 15
petitions are Poseidon Concepts, Ltd., Poseidon Concepts Limited
Partnership; and Poseidon Concepts, Inc.
RAMZ REAL ESTATE: Case Summary & 4 Top Unsecured Creditors
----------------------------------------------------------
Debtor: RAMZ Real Estate Co., LLC
13 Huff Road
Newburgh, NY 12550
Case No.: 14-36937
Nature of Business: Single Asset Real Estate
Chapter 11 Petition Date: September 25, 2014
Court: United States Bankruptcy Court
Southern District of New York (Poughkeepsie)
Judge: Hon. Cecelia G. Morris
Debtor's Counsel: Mike Pinsky, Esq.
HAYWARD, PARKER, O'LEARY & PINSKY
225 Dolson Ave, Suite 303
PO Box 929
Middletown, NY 10940-0929
Tel: 845-343-6227
Fax: 845-343-1927
Email: hpoplaw@gmail.com
Total Assets: $773,376
Total Liabilities: $1.12 million
The petition was signed by Ronan O'Neill, managing member.
A list of the Debtor's four largest unsecured creditors is
available for free at http://bankrupt.com/misc/nysb14-36937.pdf
READYCAP 2014-1: DBRS Assigns (P)'BB' Rating to Class F
-------------------------------------------------------
DBRS Inc. has assigned provisional ratings to the following
classes of ReadyCap Commercial Mortgage Trust 2014-1 Commercial
Mortgage Pass-Through Certificates, to be issued by the ReadyCap
Commercial Mortgage Trust 2014-1. The trends are Stable.
-- Class A at AAA (sf)
-- Class B at AAA (sf)
-- Class C at AA (sf)
-- Class D at A (high) (sf)
-- Class E at BBB (low) (sf)
-- Class F at BB (low) (sf)
-- Class IO-A at AAA (sf)
Classes A, B and C represent the offered certificates and will be
privately placed pursuant to Rule 144A. The IO-A and IO-B
balances are notional. DBRS ratings on IO certificates address
the likelihood of receiving interest based on the notional amount
outstanding. DBRS considers the IO certificate's position within
the transaction payment waterfall when determining the appropriate
rating. Classes D, E, F and G represent the non-offered
certificates and will be retained by the issuer.
The collateral consists of 71 fixed- and floating-rate loans
secured by 75 commercial and multifamily properties, for a total
transaction balance of $181,822,204. The DBRS sample included 13
loans, representing 43.6% of the pool. The pool is relatively
diverse based on loan size, with a concentration profile
equivalent to that of a pool of 40 equal-sized loans. Increased
pool diversity helps to insulate the higher-rated classes from
event risk.
The pool has a relatively high concentration of properties located
in urban markets, given the small balance of the loans. Eleven
loans, representing 12.4% of the pool, are located in urban
markets, including one loan in the top ten. Properties located in
urban markets typically benefit from higher levels of liquidity in
times of stress compared to smaller markets. Term default risk is
moderate, as indicated by a relatively strong DBRS Term DSCR of
1.42x. In addition, 15 loans, representing 23.6% of the pool,
have a DBRS Term DSCR in excess of 1.50x, including three of the
largest ten loans.
The pool has an average balance of $2.6 million, significantly
lower than the average loan balance for CMBS 2.0 deals of
approximately $18.1 million. Historically, loans with smaller
balances have experienced significantly higher loss severities in
the event of default than larger loans. DBRS modeled all loans
with a higher associated loss severity correlated to loan size.
Loans with balances less than $5 million, which represent 62.5% of
the pool, were treated most punitively. The sponsors are
generally less sophisticated operators of commercial real estate
with limited real estate portfolios and experience. Across the
pool, the sponsors reported an approximate average net worth of
$7.3 million and average liquidity of $641,000. Twenty-four
loans, representing 28.2% of the pool, have recourse to the
sponsor. While it is generally difficult to quantify the impact
of recourse, there is an increase in the loan's POD for sponsors
that do not give 100% recourse. None of the sponsors have
declared bankruptcy in the past ten years.
The deal consists of seven properties, totalling 21.8% of the
pool, leased to single tenants or predominantly single-tenant,
which have been found to have higher losses in the event of
default. DBRS modeled single-tenant properties with a higher
expected loss compared with multi-tenant properties.
Additionally, the largest loan secured by a single-tenant property
is an industrial property that could be sub-divided and re-leased
if necessary. The tenant's lease extends 19 months beyond the
loan term. Overall, the single-tenant properties are expected to
amortize 17.3% over the loan term.
ROKMASTER RESOURCES: AM Gold Delivers Notice of Default
-------------------------------------------------------
John Mirko, president and chief executive officer of Rokmaster
Resources Corp., on Sept. 25 disclosed that AM Gold Inc. has
delivered to Rokmaster a notice of default dated September 24,
2014 in respect of the Cdn$400,000 cash payment that was to have
been paid by Rokmaster to AM Gold, and the Cdn$1.5 million in work
expenditures that was to have been incurred by Rokmaster on the
Pinaya Gold-Copper Project, on or before September 11, 2014
pursuant to the Option and Joint Venture Agreement dated July 16,
2012, as amended, with AM Gold and AM Gold's Peruvian subsidiary,
Canper Exploraciones S.A.C. In the Notice of Default, AM Gold has
stated that if the alleged default is not cured within 30 days of
receipt of the Notice of Default, AM Gold and Canper may
immediately terminate the Agreement.
Rokmaster disputes the validity of the Notice of Default in light
of its prior declaration of force majeure under the Agreement as a
result of the continued presence of illegal miners on the Pinaya
Project, resulting in Rokmaster being unable to obtain
unrestricted access to the portions of the Pinaya Project
controlled and occupied by the illegal miners.
Headquartered in Vancouver, Canada, Rokmaster Resources Corp. --
http://www.rokmaster.com-- is primarily engaged in the
acquisition of mineral resource properties and the exploration of
such properties for minerals. It is engaged in the acquisition,
exploration and development of precious, base and industrial
mineral properties. The Company's principal exploration areas of
interest are Canada and Latin America. The Company's two mineral
properties include Pinaya Gold-Copper Project in Peru and the Big
Copper property in Canada.
SEARS METHODIST: Wants Plan Exclusivity Moved Thru Dec. 7
---------------------------------------------------------
Sears Methodist Retirement System Inc. and its debtor-affiliates
ask the U.S. Bankruptcy Court for the Northern District of Texas
to extend their exclusive periods to:
a) file a Chapter 11 plan until Dec. 7, 2014; and
b) solicit acceptances from creditors for that plan through and
until Feb. 5, 2015.
The Debtors tell the Court that they have not yet filed a plan
because negotiations and diligence concerning the plan remain on-
going. The Debtors note they intend to file a plan within the
next few weeks. In light of such progress and in order to allow
for additional time to continue such negotiations, the Debtors
believe their request for an extension of the exclusive periods is
justified.
The Debtors assure the Court that their requested extension of the
exclusive periods does not exceed the 18-month limitation for the
exclusive period to file a plan or the 20-month limitation for the
exclusive period to solicit acceptances of a plan set forth in
section 1121(d) of the Bankruptcy Code. The Debtors say the
requested extension is substantially less than these limitations.
About Sears Methodist
As a leading Texas senior living icon established on Christian
principles, Sears Methodist Retirement System Inc. provides
secure, rewarding, and luxurious residency to seniors. The system
includes: (i) eight senior living communities located in Abilene,
Amarillo, Lubbock, Odessa and Tyler, Texas; (ii) three veterans
homes located in El Paso, McAllen and Big Spring, Texas, managed
by Senior Dimensions, Inc., pursuant to contracts between SDI and
the Veterans Land Board of Texas; and (iii) Texas Senior
Management, Inc. ("TSM"), Senior Living Assurance, Inc. ("SLA")
and Southwest Assurance Company, Ltd. ("SWAC"), which provide, as
applicable, management and insurance services to the System.
Sears Methodist Senior Housing, LLC, is the general partner of,
and controls .01% of the interests in, Canyons Senior Living, L.P.
("CSL").
Sears Methodist and its affiliates sought protection under Chapter
11 of the Bankruptcy Code (Bankr. N.D. Tex. Lead Case No. 14-
32821) on June 10, 2014. The cases are assigned to Judge Stacey
G. Jernigan.
The Debtors' counsel is Vincent P. Slusher, Esq., and Andrew
Zollinger, Esq., at DLA Piper LLP (US), in Dallas, Texas; and
Thomas R. Califano, Esq., Gabriella L. Zborovsky, Esq., and Jacob
S. Frumkin, Esq., at DLA Piper LLP (US), in New York. The
Debtors' financial advisor is Alvarez & Marsal Healthcare Industry
Group, LLC, while the Debtors' investment banker is Cain Brothers
& Company, LLC. The Debtors' notice, claims and solicitation
agent is GCG Inc.
The Debtors have sought and obtained an order authorizing joint
administration of their Chapter 11 cases.
The U.S. Trustee has appointed five members to the Official
Committee of Unsecured Creditors. The Committee is represented by
Clifton R. Jessup, Jr., Esq., and Bryan L. Elwood, Esq., at
Greenberg Traurig, LLP, in Dallas, Texas.
SELKIRK 2014-3A: DBRS Assigns 'B' Rating to Class F Notes
---------------------------------------------------------
DBRS Inc. has assigned ratings to the following classes of asset-
backed notes issued by Selkirk 2014-3A (the Certificates). The
trends are Stable.
-- Class A2 at AAA (sf)
-- Class IO at AAA (sf)
-- Class B at AA (low) (sf)
-- Class C at A (low) (sf)
-- Class D at BBB (low) (sf)
-- Class E at BB (low) (sf)
-- Class F at B (low) (sf)
Class A2, IO, B, C, D, E and F have been retained by AIG.
The Class IO balance is notional. DBRS ratings on interest-only
certi?cates address the likelihood of receiving interest based on
the notional amount outstanding. DBRS considers the interest-only
certi?cate's position within the transaction payment waterfall
when determining the appropriate rating.
The underlying collateral consists of 62 seasoned, fixed-rate
loans secured by 65 commercial and multifamily properties,
comprising a total transaction balance of $754,454,320. The loans
in this pool were originated by AIG Asset Management (U.S.) LLC
(AGM), a life insurance company with strong origination practices,
and have an average seasoning of 72 months. Aside from one late
payment in 2005, none of the loans defaulted during the recent
economic recession, demonstrating the financial strength of the
underlying assets. The DBRS sample included 28 of the 62 loans,
representing 73.3% of the total pool by allocated loan balance.
The pool has a high concentration of amortizing loans (84.8% of
the pool), resulting in 32.5% amortization over the remaining loan
term, which is significantly higher than other recently rated DBRS
conduit transactions. The pool also has a weighted-average
interest rate of 5.83%, which is substantially greater than
current rates, minimizing the individual loan's refinance risk.
The pool is also relatively diverse based on loan size, with the
concentration level similar to a pool of 28 equal-sized loans and
no loan representing more than 8.1% of the pool.
Due to the seasoned nature of the pool, YE2013 financial
information and rent rolls were generally the most current
information available and third-party reports were usually greater
than 12 months old with dated market information. The resulting
average DBRS net cash flow (NCF) haircut to the securitized NCF is
-8.3%.
SELKIRK 2014-3V: DBRS Assigns 'BB' Rating to Class E Notes
----------------------------------------------------------
DBRS Inc. has assigned ratings to the following classes of asset-
backed notes issued by Selkirk 2014-3V (the Certificates). The
trends are Stable.
-- Class A2 at AAA (sf)
-- Class IO at AAA (sf)
-- Class B at AA (low) (sf)
-- Class C at A (low) (sf)
-- Class D at BBB (low) (sf)
-- Class E at BB (low) (sf)
-- Class F at B (low) (sf)
Class A2, IO, B, C, D, E and F have been retained by AIG.
The Class IO balance is notional. DBRS ratings on interest-only
certi?cates address the likelihood of receiving interest based on
the notional amount outstanding. DBRS considers the interest-only
certi?cate's position within the transaction payment waterfall
when determining the appropriate rating.
The underlying collateral consists of 62 seasoned, fixed-rate
loans secured by 65 commercial and multifamily properties,
comprising a total transaction balance of $754,454,320. The loans
in this pool were originated by AIG Asset Management (U.S.) LLC
(AGM), a life insurance company with strong origination practices,
and have an average seasoning of 72 months. Aside from one late
payment in 2005, none of the loans defaulted during the recent
economic recession, demonstrating the financial strength of the
underlying assets. The DBRS sample included 28 of the 62 loans,
representing 73.3% of the total pool by allocated loan balance.
The pool has a high concentration of amortizing loans (84.8% of
the pool), resulting in 32.5% amortization over the remaining loan
term, which is significantly higher than other recently rated DBRS
conduit transactions. The pool also has a weighted-average
interest rate of 5.83%, which is substantially greater than
current rates, minimizing the individual loan's refinance risk.
The pool is also relatively diverse based on loan size, with the
concentration level similar to a pool of 28 equal-sized loans and
no loan representing more than 8.1% of the pool.
Due to the seasoned nature of the pool, YE2013 financial
information and rent rolls were generally the most current
information available and third-party reports were usually greater
than 12 months old with dated market information. The resulting
average DBRS net cash flow (NCF) haircut to the securitized NCF is
-8.3%.
SEQUA CORPORATION: Moody's Lowers Corporate Family Rating to Caa1
-----------------------------------------------------------------
Moody's Investors Service has downgraded the Corporate Family
Rating (CFR) of Sequa Corporation ("Sequa") to Caa1 from B3 and
lowered the Probability of Default Rating (PDR) to Caa1-PD from
B3-PD. The rating outlook is stable.
Issuer: Sequa Corporation
The following ratings were downgraded:
Corporate Family Rating, downgraded to Caa1 from B3
Probability of Default Rating, downgraded to Caa1-PD from B3-PD
$200 million senior secured revolver due 2017, downgraded to B3
(LGD 3) from B2
$1,300 million senior secured term loan due 2017, downgraded to B3
(LGD 3) from B2
$350 million senior unsecured notes due 2017, downgraded to Caa3
(LGD 5) from Caa2
Rating outlook: Stable
Ratings Rationale
The downgrade of Sequa's corporate family rating reflects the
continued weakening of the company's credit metrics, a softening
liquidity profile, and highly elevated leverage levels which raise
concerns as to the long-term sustainability of the company's
capital structure. As of June 2014, debt to EBITDA on a Moody's
adjusted basis was in excess of 8.5x which places the company's
leverage metrics firmly at the weakest end of the rating category.
Moody's expect leverage levels to remain elevated due to on-going
earnings weakness in the Chromalloy segment which will constrain
any meaningful deleveraging in the near to intermediate term. The
downgrade also reflects Sequa's softening liquidity profile
including reduced availability under the company's revolving and
AR facilities as well as expectations of minimal free cash flows
over the next 12 to 18 months.
The independent engine repair aftermarket served by Sequa's
Chromalloy business (its largest segment accounting for ~65% of
total sales) continues to be negatively impacted by a surplus of
spare and used parts for certain engine platforms. The downgrade
reflects concerns that much of this oversupply on legacy platforms
is secular in nature driven by a combination of higher part-out
rates and earlier engine retirements - both of which, are
anticipated to constrain revenue and earnings growth in
Chromalloy. The downgrade also incorporates expectations that
utilization rates and resultant repair activity on the KC-10
platform (Sequa's largest contract accounting for about 10% of
total sales) will remain at fundamentally lower levels as compared
to prior years. Management's increased focus on OEM licensed
repairs and new engine builds is viewed favorably and should help
bolster revenues over the long-term when OEM volumes ramp up. That
said, delays in engine launches and the long lag times for
approval for licensed repairs will likely result in lower
absorption of fixed over-head costs and further constrain Sequa's
earning and cash flow generating capabilities over the near to
intermediate period.
The rating incorporates the high degree of financial leverage,
weak coverage metrics, and softening liquidity profile. These
negative considerations are partially mitigated by Sequa's well-
established market position within its niche engine repair/parts
segment, the company's strong market share in the Precoat
business, and its long standing customer relationships. The
ratings further recognize the considerable barriers to entry in
the engine repair/parts segment resulting from lengthy and
stringent FAA and OEM approval requirements.
The stable outlook considers the covenant-lite provisions of
Sequa's revolving credit facility which affords the company some
additional time to transition its Chromalloy business. The outlook
assumes the continued growth and ramp-up of Sequa's OEM licensed
repair and supply work which should help mitigate the weakness in
independent repair and allow earnings to stabilize over the next
few quarters.
The rating could be downgraded if earnings were to continue to
deteriorate or if free cash flows were to become negative such
that Sequa becomes more reliant on its revolving and AR receivable
facilities. An absence of traction on management's OEM-focused
strategy or further deterioration in KC-10 related revenues could
also pressure the ratings downwards. At this time a rating upgrade
is unlikely; however, improved earnings and cash flows coupled
with debt to EBITDA sustained below 7.0x could result in a ratings
upgrade.
The principal methodology used in this rating was Global Aerospace
and Defense Industry published in April 2014. Other methodologies
used include Loss Given Default for Speculative-Grade Non-
Financial Companies in the U.S., Canada and EMEA published in June
2009.
Sequa Corporation, headquartered in Tampa, FL, is a diversified
industrial company operating in two business segments: Aerospace
through Chromalloy Gas Turbine, and metal coating through Precoat
Metals. Sequa was purchased via a $2.8 billion LBO by affiliates
of Carlyle Partners V, L.P. (Carlyle) in December 2007. Revenues
for the last twelve months ended June 30, 2014 were $1.3 billion.
SEVEN COUNTIES: KERS May Appeal Directly to 6th Cir.
----------------------------------------------------
Bankruptcy Judge Joan A. Lloyd ruled on the Motion of Kentucky
Employees Retirement System and the Board of Trustees of the
Kentucky Retirement System Requesting Certification for Direct
Appeals to the Court of Appeals for the Sixth Circuit pursuant to
28 U.S.C. Sec. 158(d)(2) and Rule 8001(f) of the Federal Rules of
Bankruptcy Procedure of the Judgment entered May 30, 2014 in
Adversary Proceeding No. 13-3019 and the Order entered May 30,
2014 in the main Chapter 11 bankruptcy case of Seven Counties
Services Inc.
In her September 24, 2014 Memorandum Opinion available at
http://is.gd/DX2Qmbfrom Leagle.com, Judge Lloyd granted KERS and
the Board's Motion. The Judgment and Order are certified to the
Court of Appeals for the Sixth Circuit.
Judge Lloyd finds that the appeals of KERS and the Board involve a
"matter of public importance" under subsection (i) of Sec.
158(d)(2)(A) and the Bankruptcy Court is required to certify that
fact. She, however, declines to recommend that the Court of
Appeals authorize the direct appeal because the issues on appeal
are not strictly issues of law, but are mixed issues of law and
fact. Additionally, other issues on appeal that have not been
presented for certification for direct appeal to the Court of
Appeals exist, and may result in piecemeal consideration of the
remaining uncertified issues. Finally, consideration of the direct
appeal on the matter of public importance will not materially
advance the progress of Seven Counties' bankruptcy case.
The Bankruptcy Court in May 2014 allowed Seven Counties to leave
the Kentucky Employees Retirement System without paying its share
of the $17.1 billion unfunded liability. That case is, KENTUCKY
EMPLOYEES RETIREMENT SYSTEM Plaintiff, v. SEVEN COUNTIES SERVICES,
INC. Defendants, AP NO. 13-03019 (Bankr. W.D. Ky.). A copy of the
Court's May 30, 2014 Memorandum Opinion is available at
http://is.gd/maCX8Mfrom Leagle.com.
About Seven Counties
Seven Counties Services Inc., a not-for-profit behavioral
services provider from Louisville, Kentucky, filed for Chapter 11
protection (Bankr. W.D. Ky. Case No. 13-31442) on April 4, 2013.
The agency generates more than $100 million a year in revenue and
employs a staff of 1,400 providing services at 21 locations and
120 schools and community centers.
The petition was signed by Anthony M. Zipple as president/CEO.
The Debtor scheduled assets of $45,603,716 and scheduled
liabilities of $232,598,880.
Judge Joan A. Lloyd presides over the case. David M. Cantor,
Esq., Neil C. Bordy, Esq., Charity B. Neukomm, Esq., Tyler R.
Yeager, Esq., and James E. McGhee III, Esq., at SEILLER WATERMAN
LLC, serve as counsel to the Debtor. Bingham Greenebaum Doll LLP
and Wyatt, Tarrant & Combs LLP have been retained by the Debtor as
special counsel. Hall, Render, Killian, Heath & Lyman, PLLC, is
special counsel to represent and advise it in the implementation
of its new software system.
Peritus Public Relations, LLC, has been tapped to provide public
relations and public affairs support in Kentucky.
Fifth Third Bank, the cash collateral lender, is represented by
Brian H. Meldrum, Esq., at STITES & HARBISON PLLC; and Robert C.
Goodrich, Jr., Esq., at STITES & HARBISON PLLC.
SGK VENTURES: May Hire Mulcahy Pauritsch as Benefits Plan Auditor
-----------------------------------------------------------------
SGK Ventures, LLC fka Keywell L.L.C. sought and obtained
permission from the Hon. Eugene R. Wedoff of the U.S. Bankruptcy
Court for the Northern District of Illinois to employ Mulcahy,
Pauritsch, Salvador & Co., Ltd. as benefit plan auditor, nunc pro
tunc to Aug. 29, 2014.
Mulcahy Pauritsch will audit the financial statements and
schedules with respect to the Debtor's Employees' Profit Sharing
Plan (the "Plan"). The Department of Labor and the Internal
Revenue Service require certain annual reporting under Employee
Retirement Income Security Act and the Internal Revenue Code,
respectively, in connection with the Plan (the "Reporting
Requirements") which are due on or before Oct. 15, 2014.
So as to comply with the Reporting Requirements and in an effort
to avoid penalties, which the Debtor understands could be as much
as $1,100 per day if the filings are delinquent, the Debtor has
determined it is in the best interests of the estate and its
creditors to employ Mulcahy Pauritsch.
Mulcahy Pauritsch agreed to provide services to the Debtor at
Mulcahy Pauritsch's standard hourly rates charged to its non-
bankruptcy clients, which range from $55 per hour for clerical
staff to $280 per hour for its supervising principal. Mulcahy
Pauritsch estimates the fee for the required services under the
Retention Agreement to be $9,300.
Mulcahy Pauritsch will also be reimbursed for reasonable out-of-
pocket expenses incurred.
Philip A. Salvador, managing principal of Mulcahy Pauritsch,
assured the Court that the firm is a "disinterested person" as the
term is defined in Section 101(14) of the Bankruptcy Code and does
not represent any interest adverse to the Debtors and their
estates.
Mulcahy Pauritsch can be reached at:
Philip A. Salvador
MULCAHY, PAURITSCH,
SALVADOR & CO., LTD.
14300 Ravinia Ave.
Orland Park, IL 60462
Tel: (708) 349-6999 ext. 115
Fax: (708) 349-6639
E-mail: salvador@mpscpa.com
About Keywell L.L.C.
Keywell L.L.C., a supplier of scrap titanium and stainless steel,
filed a Chapter 11 petition (Bankr. N.D. Ill. Case No. 13-37603)
on Sept. 24, 2013. Mark Lozier signed the petition as president
and CEO.
Keywell LLC first filed schedules disclosing $22,515,017 in total
assets, and $35,025,633 in total liabilities. In its amended
schedules, Keywell disclosed $22,546,386 in total assets and
$39,361,793 in total liabilities. As reported in the Troubled
Company Reporter on May 12, 2014, the Debtor filed an amended
summary of schedules disclosing assets of $22,602,974 and
liabilities of $37,181,354.
Judge Eugene R. Wedoff presides over the case.
Howard L. Adelman, Esq., Chad H. Gettleman, Esq., Henry B. Merens,
Esq., Brad A. Berish, Esq., Mark A. Carter, Esq., Adam P.
Silverman, Esq., and Nathan Q. Rugg, Esq., at Adelman & Gettleman
Ltd. serve as the Debtor's counsel. Alan B. Patzik, Esq., Steven
M. Prebish, Esq., and David J. Schwartz, Esq., at Patzik, Frank &
Samotny Ltd. serve as the Debtor's special counsel. Eureka
Capital Markets, LLC, serves as the Debtor's investment banker,
while Conway MacKenzie, Inc., serves as its financial advisors.
The Debtor's lenders are represented by Steven B. Towbin, Esq.,
and Gordon E. Gouveia, Esq., at Shaw Fishman Glantz & Towbin LLC,
in Chicago, Illinois.
The United States Trustee for Region 11 appointed an Official
Committee of Unsecured Creditors. The panel has hired David A.
Agay, Esq., Sean D. Malloy, Esq., Scott N. Opincar, Esq., Joshua
A. Gadharf, Esq., and T. Daniel Reynolds, Esq., at McDonald
Hopkins LLC as counsel. Alvarez & Marsal North America, LLC,
serves as financial advisors to the Committee.
In December 2013, the Bankruptcy Court formally approved the sale
of the Debtor's assets to KW Metals Acquisition LLC for $15.8
million. The original offer was from Cronimet Holdings Inc. for
$12.5 million cash.
Keywell LLC changed its name and case caption to "SGK Ventures,
LLC" following the sale.
UNIVERSAL COOPERATIVES: Files Amended Schedules E and F
-------------------------------------------------------
Universal Cooperatives Inc. filed amendments to its schedules of
assets and liabilities with the U.S. Bankruptcy Court for the
District of Delaware. Specifically, the Debtor filed an amended
Schedule E - Creditors Holding Unsecured Priority Claims, and
Schedule F - creditors Holding Unsecured Non-priority Claims.
In a separate filing, Bridon Cordage LLC filed an amended Schedule
E to Schedules of assets and liabilities.
A full-text copy of Universal Cooperatives' amended schedule is
available for free at http://is.gd/1cjxoA
A full-text copy of Bridon Cordage's amended schedule is available
for free at http://is.gd/X2mTX1
About Universal Cooperatives
As an inter-regional farm supply cooperative, Universal
Cooperatives, Inc. consolidates the purchasing power of its
members to procure, and/or manufacture, and distribute high
quality products at competitive prices. Universal has 14 voting
members and over 50 associate members.
Eagan, Minnesota-based Universal Cooperatives and its affiliates
sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 14-
11187) on May 11, 2014. The debtor-affiliates are Heritage
Trading Company, LLC; Bridon Cordage LLC; Universal Crop
Protection Alliance, LLC; Agrilon International, LLC; and Pavalon,
Inc. UCI do Brasil, a majority-owned subsidiary located in
Brazil, is not a debtor in the Chapter 11 cases
The cases are assigned to Judge Mary F. Walrath.
Universal estimated $1 million to $10 million in assets and $10
million to $50 million in debt. Heritage estimated less than $10
million in assets and debt.
The Debtors have tapped Travis G. Buchanan, Esq., Robert S. Brady,
Esq., Andrew L. Magaziner, Esq., and Travis G. Buchanan, Esq., at
Young Conaway Stargatt & Taylor, LLP; and Mark L. Prager, Esq.,
Michael J. Small, Esq., and Emil P. Khatchatourian, Esq., at Foley
& Lardner LLP, as counsel; The Keystone Group, as financial
advisor and Prime Clerk as notice and claims agent.
Bank of America, N.A., as agent for the DIP Lenders, is
represented by Daniel J. McGuire, Edward Kosmowski, Esq., and
Gregory M. Gartland, Esq., at Winston & Strawn, LLP.
The United States Trustee for Region 3 has appointed seven members
to the Official Committee of Unsecured Creditors, which is
represented by Sharon Levine, Esq., Bruce S. Nathan, Esq., and
Timothy R. Wheeler, Esq., at LOWENSTEIN SANDLER LLP, in Roseland,
New Jersey; and Jamie L. Edmonson, Esq., and Daniel A. O'Brien,
Esq., at VENABLE LLP, in Wilmington, Delaware.
VANGUARD NATURAL: S&P Affirms 'B+' Rating; Outlook Stable
---------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B+' rating on
Vanguard Natural Resources LLC (Vanguard). The outlook is stable.
While Vanguard shares some master-limited partnership (MLP)
characteristics, S&P determined that the November 2013 general
corporate methodology criteria apply.
"The ratings on Vanguard Natural Resources reflect our assessment
of the company's 'fair' business risk and 'aggressive' financial
risk," said Standard & Poor's credit analyst Marc Bromberg. "We
consider the company's liquidity to be 'adequate'," said
Mr. Bromberg.
The outlook is stable because S&P do not expect to raise or lower
the rating on Vanguard Natural Resources LLC during the next 12
months. S&P expects that Vanguard will fund its acquisitions
prudently such that debt generally does not represent more than
50% of the acquisition cost. S&P also expects the company to
hedge nearly all of its future production for a multiyear period.
If this occurs, S&P expects run rate debt to EBITDA of about 3.5x,
which it considers to be appropriate for the current rating.
S&P could lower the rating if it believes that run rate debt to
EBITDA leverage will breach 4.25x. This scenario could occur if
Vanguard funds acquisitions such that debt represents more than
50% of the acquisition cost and if production fails to meet S&P's
expectations.
S&P considers an upgrade unlikely based on its assessment of the
business risk profile, including its MLP-like strategy and modest
internal growth prospects.
WESTGATE NURSING: Oversight to Cost Panel, PCO Lawyers Their Fees
-----------------------------------------------------------------
Bankruptcy Judge Paul R. Warren granted, in part, and denied, in
all other respects, the Joint Motion to Reconsider and Vacate the
Final Decree of Dismissal, filed by Arent Fox LLP, as attorneys
for the Official Committee of Unsecured Creditors, and Harris
Beach PLLC, as both attorneys for the Court-appointed Patient Care
Ombudsman, Eric Huebscher, and on their own behalf, in the Chapter
11 case of Westgate Nursing Home, Inc.
The parties seek to vacate the final decree of dismissal in the
Debtor's case in order to have the Court rule on applications for
professional fees and expenses. The Joint Motion was filed after
the Court's entry of a consent order dismissing the case on August
26, 2014. The parties did not request and the order of dismissal
did not include a retention-of-jurisdiction provision. Thus, the
issue is whether the Court should modify the order of dismissal to
retain jurisdiction over fee applications, where no party in
interest made a request for the Court's retention of jurisdiction
prior to the entry of the order of dismissal.
According to Judge Warren, the Joint Motion to Reconsider and
Vacate the Final Decree is granted in limited part for the purpose
of correcting a clerical error in the docket text of ECF No. 250,
and the Clerk is directed to make an entry correcting the docket
text of ECF No. 250 to indicate that the case is administratively
closed as a result of the dismissal order. The Joint Motion is
denied in all other respects because (1) the parties fail to
demonstrate grounds for altering the dismissal order under
Fed.R.Civ.P. Rule 60(a); and (2) the Court did not retain subject
matter jurisdiction to make post-dismissal fee determinations in
this case, rendering the applications for compensation moot at
dismissal.
Westgate Nursing Home Inc., in Rochester, NY, filed a Chapter 11
petition (Bankr. W.D.N.Y. Case No. 13-21665) on November 12, 2013.
Judge Paul R. Warren presides over the case. Gary A. Christiano,
Esq., serves as the Debtor's counsel. In its pettion, the Debtor
estimated $1 million to $10 million in both assets and
liabilities. The petition was signed by Dennis J. Christiano,
Sr., president.
The United States Trustee appointed Eric Huebscher as patient care
ombudsman. The Official Committee of Unsecured Creditors retained
Arent Fox LLP as legal counsel and CBIZ Accounting, Tax and
Advisory of New York, LLC as a financial advisor. The PCO
retained Harris Beach PLLC as legal counsel.
Because of continuing losses to the Debtor's estate during the
eight months of bankruptcy protection, the United States Trustee
filed a motion to convert the case to Chapter 7, or in the
alternative, to dismiss the case under Sec. 1112(b) of the
Bankruptcy Code on August 5, 2014. The UST motion was noticed for
a hearing to be held on August 28, 2014. At the time that the UST
motion was filed, fee applications previously submitted by CBIZ
Accounting, Arent Fox, the PCO, and Harris Beach were pending
before the Court. The deadlines for objections to the applications
for professional fees expired, without objection, on July 24,
2014, July 28, 2014, August 18, 2014, and September 2, 2014 as to
CBIZ Accounting, the PCO, Arent Fox, and Harris Beach,
respectively.
The UST motion to convert or dismiss remained pending for three
weeks, awaiting the return date. The Creditors' Committee joined
in the UST motion to convert or dismiss on August 12, 2014,
indicating that it "reserve[d] the right to further address the
motion and any related pleadings or other ancillary issues either
by further submission . . ., at oral argument or by testimony to
be presented at any hearing". During this time, however, none of
the appointed professionals or legal counsel filed papers in
connection with the pending UST motion, requesting that the Court
retain jurisdiction over their applications for compensation.
On August 26, 2014, a stipulated order between the Debtor and the
UST dismissing the case was filed with the Court by the UST --
along with a verbal representation that Arent Fox and the
professionals it represented, and Harris Beach and the
professional it represented consented to the entry of an order of
dismissal. The consent order did not contain a retention-of-
jurisdiction provision or any reference to the pending fee
applications. However, it did contain a condition precedent to
dismissal, requiring full payment of outstanding quarterly fees to
the UST by August 29, 2014. The Court entered the conditional
consent order of dismissal on August 26, 2014, two days in advance
of a scheduled hearing on the motion to convert or dismiss.
On August 27, 2014, Harris Beach submitted a letter to the Court
by which it inquired on its own behalf and on behalf of the PCO
whether the Court would rule on pending and future fee
applications despite dismissal of the case.
On August 28, 2014, the Court convened the scheduled hearing on
the motion to convert or dismiss, at which no party in interest
appeared. Several hours later, the Court received a letter from
Arent Fox, mirroring the Harris Beach letter and asking whether
the Court would rule on pending fee applications despite dismissal
of the case. Neither letter requested that the Court treat the
letter as a motion. Both letters asserted that the Court continued
to have jurisdiction to consider the award of fees despite
dismissal of the bankruptcy case. A Final Decree and Order Closing
Case was entered on August 29, 2014.
On September 12, 2014, Arent Fox and Harris Beach filed the Joint
Motion to Reconsider and Vacate the Final Decree of Dismissal
pursuant to Rule 59(e) and 60(a) FRCP, and Rules 9023 and 9024
FRBP. By Order dated September 15, 2014, the Court
administratively reopened the Chapter 11 case to consider the
post-dismissal Joint Motion. On September 19, 2014, the Debtor
filed a timely response in opposition to the Joint Motion.
The parties argue that the Court should vacate and amend the Final
Decree of Dismissal to "correct the mistake arising from the
oversight of safeguarding the estate professionals' non-bankruptcy
rights". They ask the Court to vacate the Final Decree closing
the case for the limited purpose of reviewing pending and future
fee applications of these professionals.
The Debtor objects, arguing that the fee applications have been
rendered moot by entry of the order of dismissal because there is
no longer a bankruptcy estate.
A copy of the Court's September 25, 2014 Decision and Order is
available at http://is.gd/BBag0rfrom Leagle.com.
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com by e-mail.
On Thursdays, the TCR delivers a list of recently filed
Chapter 11 cases involving less than $1,000,000 in assets and
liabilities delivered to the nation's bankruptcy courts. The
list includes links to freely downloadable of these small-dollar
petitions in Acrobat PDF documents.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
The Sunday TCR delivers securitization rating news from the week
then-ending.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine
Tumanda, Valerie Udtuhan, Howard C. Tolentino, Carmel Paderog,
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Sheryl Joy P. Olano, Psyche A. Castillon, Ivy B. Magdadaro, Carlo
Fernandez, Christopher G. Patalinghug, and Peter A. Chapman,
Editors.
Copyright 2014. All rights reserved. ISSN: 1520-9474.
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*** End of Transmission ***