/raid1/www/Hosts/bankrupt/TCR_Public/141001.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Wednesday, October 1, 2014, Vol. 18, No. 273
Headlines
21ST CENTURY ONCOLOGY: Gets $325 Million in Equity Investment
21ST CENTURY ONCOLOGY: S&P Raises CCR to 'B-'; Outlook Stable
30DC INC: Delays Fiscal 2014 Annual Report
ALCO STORES: Incurs $8.02-Mil. Net Loss for Aug. 3 Quarter
AMBIENT CORP: Ericsson to Buy Company for $7.5-Mil.
AMERICAN APPAREL: Names New Interim CEO, CFO
AMERICAN EAGLE: Announces Operations Update
AMERICAN INT'L: Hank Greenberg Challenges Bailout
AMERICAN POWER: Extends Note Maturity Dates by One Year
AMSTERDAM HOUSE: KCC Approved as Administrative Agent
ASSOCIATED WHOLESALERS: Hires Lazard as Investment Banker
ASSOCIATED WHOLESALERS: ConAgra, Kraft Named to Creditors' Panel
ASSOCIATED WHOLESALERS: US Trustee Forms Creditors' Committee
BAY AREA: Plan of Reorganization/Liquidation Confirmed
BERNARD L. MADOFF: Appeals Court Ruling Offers Hope for Investor
BIG M: Cathy Fernandes Approved to Foreclose Mortgage
BION ENVIRONMENTAL: Incurs $5.7 Million Net Loss in Fiscal 2014
BIONEUTRAL GROUP: Reports $1.27-Mil. Loss in July 31 Quarter
CAESARS ENTERTAINMENT: Grants Security Interest to Credit Suisse
CALDERA PHARMACEUTICALS: Timothy Tyson Appointed Interim CEO
CALYPTE BIOMEDICAL: Issues 53.4 Million Common Shares
COLT DEFENSE: Moody's Lowers CFR to Caa2 & Alters Outlook to Neg.
CONVERSION CONSULTING: Case Summary & 9 Top Unsecured Creditors
CRUMBS BAKE SHOP: In-House Branded Cupcakes Can Stay in Stores
CSN HOUSTON: Plan Confirmation Trial to Begin Oct. 6
CSN HOUSTON: Wants Already-Paid Creditors Blocked From Voting
CSN HOUSTON: Postpetition Debt Now Totals $103MM
CYCLONE URANIUM: Posts $110K Net Loss in July 31 Quarter
DELIA*S INC: Explores Strategic Alternatives
DETROIT, MI: City Council Votes to Keep Emergency Manager
DETROIT, MI: Wilmington Trust, Retirees Oppose 7th Amended Plan
DEWEY & LEBOEUF: Former Exec Can't Shake $9 Million Suit
DIGITAL DOMAIN: Unlikely to Keep Bulk of $20-Mil. Tax Credit
DOMUM LOCIS: Receiver Hires Epss & Coulson as Bankr. Counsel
EADGEAR INC: Faces SEC Charges Over Alleged Pyramid Scheme
EDGENET INC: Has Until Nov. 13 to File Chapter 11 Plan
ELIZABETH ARDEN: S&P Lowers CCR to 'B+' & Removes From Watch Neg.
EMANUEL L. COHEN: Wants More Time to File Chapter 11 Plan
EMANUEL L. COHEN: Amends Schedules of Assets and Liabilities
ENCANA CORP: Moody's Puts B2 CFR on Review for Upgrade
ERF WIRELESS: Issues 3.2-Mil. Shares Pursuant to Conv. Notes
EXELIS INC: Moody's Lowers Sr. Unsecured Debt Rating to Ba1
FANNIE MAE & FREDDIE MAC: FHFA Defines Profit as an Asset
FAIRMONT GENERAL: Alecto Health Completes Purchase of Hospital
FERRAIOLO CONSTRUCTION: Court Closes Chapter 11 Bankruptcy Case
FIRSTPLUS FINANCIAL Lucchese Assocs. Want New Trials
FULLCIRCLE REGISTRY: Launches Offering of 21-Mil. Common Shares
GAWK INC: Has $1.15-Mil. Net Loss for July 31 Quarter
GENERAL CABLE: Moody's Affirms 'B2' Corporate Family Rating
GENERAL MOTORS: Creditors Say 'New' GM On Hook for Suit
GENERAL MOTORS: Says Revstone Trying to Undo Deal on Canadian Sale
GEOMET INC: Preferred Shares to be Delisted From Nasdaq
GETTY PETROLEUM: Trustee Strikes $1.4M Deal With AIG
GILES-JORDAN: Galveston Shores Challenges Reorganization Plan
GLOBAL GEOPHYSICAL: Tannor Objects to Exclusivity Extension Bid
GO BOLLYWOOD: Files for Chapter 11 Bankruptcy
GRANITE ACQUISITION: Moody's Assigns 'B1' Corp. Family Rating
GRANITE ACQUISITION: S&P Assigns BB- CCR & Rates $1.25BB Loan BB-
GREEN MOUNTAIN: Hires GlassRatner as Financial Advisor
GROVE ESTATES: Seeks Authority to Use Cash Collateral
HAYDEL PROPERTIES: Court Denies Trustee's Plea to Dismiss Case
HEALTHWAREHOUSE.COM INC: Mark Scott Reports 12.3% Equity Stake
HEDWIN CORPORATION: Gets Approval to Award SMR Fee Enhancement
INSIGHT PHARMACEUTICALS: S&P Withdraws 'B' CCR over Prestige Deal
INTERNATIONAL TEXTILE: Sells Unit to Asheboro Elastics for $7.4MM
ISLET SCIENCES: Posts $464K Net Loss for July 31 Quarter
ITR CONCESSION: Objections to Dual-Track Plan Due Oct. 14
ITR CONCESSION: Has Interim Authority to Use Cash Collateral
ITR CONCESSION: Seeks to Employ Kirkland as Counsel
ITR CONCESSION: Has Until Oct. 31 to File Schedules
J.C. PENNEY: Moody's Affirms 'Caa1' Corporate Family Rating
JOHN DAVIS TRUCKING: Case Summary & 20 Top Unsecured Creditors
KAHN FAMILY: Wins Court Approval of Reorganization Plan
LDK SOLAR: NYSE Committee Affirms ADSs Delisting Determination
LEHMAN BROTHERS: Sues Raymond James to Recover Swap Funds
LEXARIA CORP: Reports $576K Net Loss in July 31 Quarter
LIFE UNIFORM: Cousins Chipman Now Known as Chipman Brown Cicero
LONGVIEW POWER: Insurer Sues to Nix $350M in Mechanics' Liens
MADERA ROOFING: Rutan Law Firm Can't Be Paid, Must Return Retainer
MARK OHRINER O.D.: Case Summary & 20 Largest Unsecured Creditors
MEDICURE INC: Has C$1.64-Mil. Net Loss for FY Ended May 31
METRO AFFILIATES: Obtains Order Clarifying Plan Provisions
MINERAL PARK: Creditors' Panel Hires Stinson Leonard as Counsel
MINERAL PARK: Creditors' Panel Hires Hiller & Arban as Counsel
MINERAL PARK: US Trustee Appoints Creditors' Committee
MJC AMERICA: Can Access EWB's Cash Collateral Until December
MJC AMERICA: Wants Until June 2015 to File Chapter 11 Plan
MONROE HOSPITAL: Files Schedules of Assets and Liabilities
MONROE HOSPITAL: Wants to Fix Oct. 30 as Claims Bar Date
MORNINGSTAR MARKETPLACE: Court Again Denies Exclusivity Bid
NAARTJIE CUSTOM: Wants More Time to Decide on Leases
NATCHEZ REGIONAL: Judge to Approve $10MM Sale of Hospital to CHS
NATCHEZ REGIONAL: Incurred $1.6MM Legal Tab by Mid-August
NORD RESOURCES: Extends Cathode Sales Agreement Until Dec. 31
NORTEL NETWORKS: Seeks Court Help to Stay out of Rockstar Suit
PACIFIC STEEL: Oct. 31 Fixed as Admin. and EEOC Claims Deadline
PACIFIC THOMAS: Secured Creditors Oppose Approval of Plan Outline
PACIFIC THOMAS: PTC Prexy to Appeal Ruling on Comcore Deal
PALM DRIVE HEALTH: Committee Can Hire Pachulski Stang as Counsel
PHOENIX PAYMENT: Oct. 24 Set as General Claims Bar Date
PHOENIX PAYMENT: Panel Taps Alvarez & Marsal as Consultant
POSITIVEID CORP: Issues $150,000 Convertible Notes
PROSPECT PARK: Has Until Dec. 5 to Solicit Acceptances of Plan
PROSPECT PARK: Committee Balks at Plan Exclusivity Extension
PROSPECT PARK: Cousins Chipman Now Known as Chipman Brown Cicero
PVA APARTMENTS: Voluntary Chapter 11 Case Summary
QIMONDA AG: Administrator Reaches EUR260M Deal With Ex-Parent
RADIOSHACK CORP: Investment Talks With Standard General Ongoing
RESIDENTIAL CAPITAL: Kicks $470M MBS Action to Bankruptcy Court
REVEL AC: Four Bidders Emerge at Bankruptcy Auction
REVEL AC: Heads to Sale as Late Bids Emerge
REVSTONE INDUSTRIES: Unit Seeks Exclusive Periods Extension
ROCHDALE SECURITIES: Section 341(a) Meeting Set for Oct. 27
S.B. RESTAURANT: Court OKs Grant Thornton as Committee Advisor
S.B. RESTAURANT: Wants Plan Exclusivity Extended Until February
SEARS METHODIST: Caprock Gets Final OK to Incur $2.35MM Loan
SEAR METHODIST: Greenberg Traurig OK'd as Counsel for Committee
SEARS METHODIST: Sears Plains Approved to Use Cash Until Oct. 2
SELECT-TV SOLUTIONS: Posts $1.14-Mil. Loss in July 31 Quarter
SNO MOUNTAIN: Court Okays Gellert Scali as Trustee's Counsel
ST. ANNE RETIREMENT: Fitch Affirms BB+ Rating on $19MM 2012 Bonds
STAR DYNAMICS: General Dynamics Blocks Sale, Wants Case Dismissal
STAR DYNAMICS: Employee Committee Says Sale Won't Bring in Cash
STAR DYNAMICS: Israel Objects to Sale, Says Settlement Reached
STAR DYNAMICS: Hearing on Asset Sale to Continue on Oct. 21
STAR DYNAMICS: Western Equipment Wants Court to Modify Stay
STOHNE RENTALS: Case Summary & 14 Largest Unsecured Creditors
T-L CONYERS: Taps Valbridge Property as Appraiser
TACTICAL INTERMEDIATE: Confirmation Hearing Set for Oct. 29
TACTICAL INTERMEDIATE: Files First Amended Liquidation Plan
TELEXFREE LLC: Court Waives Attorney-Client Privilege
THORNBURG MORTGAGE: Judge Dismisses Much of Suit v. Banks
THORNBURG MORTGAGE: Settlement with Barclays Approved
TOYS 'R' US: Fitch Rates New $350MM Loan 'B' & $1.02BB Loan 'CCC+'
TOYS 'R' US: Moody's Rates $350MM Loan 'Ba3' & $1BB Loan 'B2'
TRIAD GUARANTY: Needs Until Dec. 3 to File Plan
TRIKO LLC: Ch. 11 Case Transferred to Santa Ana Division
TRUMP ENTERTAINMENT: Icahn May Pump $100MM if Union OKs Cuts
TRUMP ENTERTAINMENT: Heads to Court Over Pension Cuts
UROLOGIX INC: Incurs $7.61-Mil. Net Loss for FY Ended June 30
USA-CAN 10: Case Summary & 3 Largest Unsecured Creditors
US COAL: Finance Chief's Bonus Nixed by Judge
WESTLAKE VILLAGE: Hires Leslie Cohen as Bankruptcy Counsel
WESTLAKE VILLAGE: US Trustee to Hold Creditors Meeting Oct. 9
WET SEAL: Incurs $22.01-Mil. Net Loss in August 2 Quarter
XTREME POWER: Gets Court's Nod to Auction Grove Equipment
XTREME POWER: Court Sets Oct. 31 as Plan Filing Deadline
XTREME POWER: Court Lifts Stay, First Wind May Liquidate Claims
XTREME POWER: Dynapower May Pursue Coverage for Liquidate Claims
* Lawyer Pays $50,000, Is Held in Contempt for Collecting Fees
* Companies With Moody's "B3-" or Lower Ratings Increase
* NewOak Appoints Nguyen as Corporate Solutions Managing Director
*********
21ST CENTURY ONCOLOGY: Gets $325 Million in Equity Investment
-------------------------------------------------------------
21st Century Oncology Holdings, Inc., and Vestar Capital Partners
announced that Canada Pension Plan Investment Board, Canada's
largest pension fund manager with C$227 billion in assets under
management, has made a $325 million equity investment in the
Company. The investment provides the Company with substantial
incremental liquidity, enables significant debt reduction, and
secures the long-term capital necessary to support the Company's
future growth strategy.
Dr. Daniel Dosoretz, founder and chief executive officer, said,
"This new capital provided by CPPIB is a significant equity
investment for 21C. CPPIB's investment is a key partnership in
our worldwide leadership of Integrated Cancer Care (ICC) and our
ability to achieve sustained organic and acquisitive growth. We
are extremely pleased that CPPIB has joined Vestar Capital as a
major equity partner, sharing our conviction that we will continue
to leverage our unique global platform and execute our long-term
business plan."
Dr. Dosoretz continued, "Importantly, the investment allows us to
continue to pursue our ICC and corporate development strategies
that have driven the expansion of our business over the past
several years. It will significantly enhance our capital
structure and give us the resources necessary to continue
providing integrated cancer care, improve the quality of care, and
deliver that care at compelling value to our expanding patient
population throughout North America and Latin America. Our
business continues to perform well, with strong organic trends and
growth contributions from the acquisitions of OnCure and SFRO. We
expect to continue to build on our second quarter momentum as we
move through the second half of 2014, delivering academic quality
care to patients, improving census and executing our growth
strategy."
Scott Lawrence, managing director, Head of Relationship
Investments, CPPIB, said, "We are pleased to become a cornerstone
investor in 21C, and we look forward to a strong partnership with
senior management and Vestar Capital. This investment is aligned
with our goals of providing strategic, long-term capital to
industry leading businesses where we can participate in their
future success and help create greater value through an ongoing
partnership."
Rob Rosner, Chairman of the Board of 21C and co-president of
Vestar Capital, noted, "The CPPIB investment supports Vestar's
long-term thesis that 21C is the preeminent platform for
integrated cancer care and provides academic quality care in
comfortable, convenient and integrated settings. We look forward
to our partnership with CPPIB in fulfilling the Company's mission
and reaching its full business potential."
The net proceeds of the investment will be used to repay all
outstanding borrowings under the Company's revolving credit
facility of approximately $79.5 million, repay all obligations
under the South Florida Radiation Oncology (SFRO) credit
facilities of approximately $84.5 million, repay certain other
debt and capital leases, fund strategic initiatives, and provide
working capital for general corporate purposes. As a result of
the CPPIB investment, the recapitalization support agreement that
the Company entered into in July has terminated in accordance with
its terms. The Company's senior subordinated notes will remain
outstanding and unmodified. Following the repayments of debt
identified for repayment, the Company expects to have
approximately $80 million of the net cash proceeds on hand.
Pursuant to the terms of the investment, CPPIB will receive shares
of the Series A Convertible Preferred Stock and will have the
right to nominate two directors for appointment to 21C's Board of
Directors. The holders of a majority of the outstanding preferred
stock will have customary consent rights and will be entitled to
vote together with the holders of the Company's common stock on an
as-converted basis under certain circumstances.
A detailed Form 8-K filing that includes the specifics of the new
preferred stock and related documentation is available at:
http://is.gd/KWVkEt
Amended LLC Agreement
Effective as of Sept. 26, 2014, 21st Century Oncology Investments,
LLC (Parent) entered into the Fifth Amended and Restated Limited
Liability Company Agreement. The Amended LLC Agreement amends and
restates Parent's existing limited liability company agreement in
its entirety to, among other things, implement the terms of the
Subscription Agreement and the Amended Securityholders Agreement
including, without limitation, the board and committee composition
terms set forth therein.
Amendment to Employment Agreement
On Sept. 25, 2014, the Company entered into an amendment to the
Second Amended and Restated Executive Employment Agreement with
Dr. Dosoretz. Pursuant to the Amendment, Dr. Dosoretz's annual
base salary was decreased from $1,200,000 to $300,000, effective
July 27, 2014. The Amendment also provides that in the event of a
Change of Control of the Company, a material deleveraging of the
Company or a material refinancing or recapitalization of the
Company, Dr. Dosoretz's annual base salary will be increased back
to $1,200,000.
Should Dr. Dosoretz be terminated as chief executive officer for
any reason, the Amendment provides that Dr. Dosoretz may elect to
remain employed by the Company as a senior physician providing
radiation oncology services at the Company's and its subsidiaries'
integrated cancer care centers and that, under such circumstances,
Dr. Dosoretz and the Company, or one of its affiliates, will enter
into a new employment agreement pursuant to which Dr. Dosoretz
will receive an annual base salary of $1,000,000 and be eligible
to participate in such other performance, bonus and benefit plans
afforded other senior physicians of the Company and receive
comparable fringe benefits to such other senior physicians.
Amendments to Bylaws
On Sept. 25, 2014, the Company filed an amendment to its
certificate of incorporation to authorize the issuance of
1,000,000 shares of Common Stock and 3,500,000 shares of preferred
stock.
About 21st Century
21st Century Oncology, Inc., formerly known as Radiation Therapy
Services, Inc. ("RTS") owns and operates radiation treatment
facilities in the US and Latin America.
The Company's balance sheet at June 30, 2014, showed $1.11 billion
in total assets, $1.38 billion in total liabilities, $46.65
million in noncontrolling interests-redeemable, and a $325.04
million total deficit.
* * *
As reported by the TCR on Aug. 14, 2014, Moody's Investors Service
downgraded 21st Century Oncology, Inc.'s Corporate Family Rating
to Caa2 from B3 and Probability of Default Rating to Caa2-PD from
B3-PD. The rating action follows the company's July 29, 2014
announcement that it has entered into a Recapitalization Support
Agreement with Vestar Capital Partners and a group of holders of
its outstanding subordinated notes, under which the company
expects to obtain additional liquidity through an equity
contribution or subordinated debt of at least $150 million on or
before October 1, 2014.
In the Aug. 4, 2014, edition of the TCR, Standard & Poor's Ratings
Services lowered all of its ratings on 21st Century Oncology
Holdings Inc., including the corporate credit rating to 'CCC+'.
"We lowered our ratings because of increased risk that the company
could exchange its $380 million subordinated notes for equity,"
said credit analyst Tulip Lim.
21ST CENTURY ONCOLOGY: S&P Raises CCR to 'B-'; Outlook Stable
-------------------------------------------------------------
Standard & Poor's Ratings Services raised all of its ratings on
21st Century Oncology Holdings Inc. by one notch, including the
corporate credit rating to 'B-' from 'CCC+'. The outlook is
stable.
Additionally, S&P revised the recovery rating on the company's
second-lien debt to '3', indicating its expectation of meaningful
recovery (at the low end of the 50%-70% range) in the event of a
payment default, from '4'. S&P revised the recovery rating
because it expects the company will use a portion of these funds
to repay acquisition debt at a subsidiary, South Florida Radiation
Oncology (SFRO), and to pay down at least 25% of its outstanding
capital leases, which S&P considered priority debt.
S&P raised the rating because the company received $325 million of
proceeds from a new preferred equity investment, which increases
the company's liquidity. In addition, it satisfies a requirement
under the company's Recapitalization Services Agreement and
therefore prevents the subordinated noteholders' claims to be
exchanged for equity. However, S&P recognizes the company's debt
burden is still high and expect cash flow generation to be
marginal at best, which supports S&P's financial risk assessment
of "highly leveraged."
S&P's business risk assessment reflects the company's narrow
business focus in a competitive market, ongoing reimbursement
risk, and geographic concentration. These are the principal
reasons S&P deems the business risk profile to be "weak."
21st Century Oncology provides outpatient integrated cancer care
services in its 179 centers in 16 U.S. states and six Latin
American countries, with a single business focus in a fragmented
and competitive market. The company is the largest provider of
integrated cancer care in the U.S. and Latin America, and its size
provides scale advantages and allows it to be one of the lowest
cost providers of its services. However, competition is often
locally based and includes hospitals, which are increasingly
employing referring physicians into their systems. The
vulnerability of its narrow focus was highlighted by a sharp drop
in prostate treatment volumes in the second half of 2012, which
affected same-market revenue growth. There is also some
geographic concentration. S&P estimates Florida still accounts
for more than 40% of freestanding radiation revenues.
Reimbursement also remains a key risk.
About 45% of the company's U.S. net patient service revenue comes
from Medicare and Medicaid, and in July, the Center for Medicare
and Medicaid Services (CMS) announced a proposed rate cut of 4%
for radiation oncology services for 2015.
The outlook is stable, reflecting S&P's expectation that revenue
and EBITDA will be relatively stable. It also reflects S&P's
expectation that leverage will remain high and cash flow will
remain marginal or negative over the near term.
30DC INC: Delays Fiscal 2014 Annual Report
------------------------------------------
30DC, Inc., filed with the U.S. Securities and Exchange
Commission a Notification of Late Filing on Form 12b-25 with
respect to its annual report on Form 10-K for the year ended
June 30, 2014.
The Company said it was unable to prepare its accounting records
and schedules in sufficient time to allow its accountants to
complete their review of the Company's financial statements for
the period ended June 30, 2014, before the required filing date
for the subject Annual Report on Form 10-K. The Company intends
to file the Annual Report on or before the 15th calendar day
following the prescribed due date.
About 30DC Inc.
New York-based 30DC, Inc., provides Internet marketing services
and related training to help Internet companies in operating their
businesses. It operates in two divisions, 30 Day Challenge and
Immediate Edge.
The Company reported a net loss of $407,642 on $1.97 million of
total revenue for the year ended June 30, 2013, as compared with
net income of $32,207 on $2.91 million of total revenue during the
prior fiscal year.
Marcum LLP, in New York, issued a "going concern" qualification on
the consolidated financial statements for the year ended June 30,
2013. The independent auditors noted that the Company has a
working capital deficit and stockholders' deficiency as of
June 30, 2012. These conditions raise substantial doubt about the
Company's ability to continue as a going concern.
ALCO STORES: Incurs $8.02-Mil. Net Loss for Aug. 3 Quarter
----------------------------------------------------------
ALCO Stores, Inc., filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q, disclosing a net
loss of $8.02 million on $110.69 million of net sales for the
thirteen week period ended Aug. 3, 2014, compared with net
earnings of $497,000 on $117.73 million of net sales for the
thirteen week period ended Aug. 4, 2013.
The Company's balance sheet at Aug. 3, 2014, showed $221.78
million in total assets, $161.58 million in total liabilities and
total stockholders' equity of $60.19 million.
If acceptable terms of an out-of court transaction cannot be
accomplished, the Company may not have enough cash and working
capital to fund our operations beyond the very near term, which
raises substantial doubt about its ability to continue as a going
concern.
A copy of the Form 10-Q is available at:
http://is.gd/wLxoyo
Alco Stores, Inc., is engaged in the business of retailing general
merchandise throughout the central portion of the United States of
America through a range of department store outlets. The
Company's ALCO stores offer a range of merchandise consisting of
approximately 35,000 items, including automotive, commodities,
crafts, domestics, electronics, furniture, hardware, health and
beauty aids, housewares, jewelry, ladies', men's and children's
apparel and shoes, pre-recorded music and video, sporting goods,
seasonal items, stationery and toys. As of February 3, 2013, the
Company operated 217 stores in 23 states located in mostly smaller
communities in the central United States. The stores average
approximately 21,000 square feet of selling space, with an
additional 5,000 square feet utilized for merchandise processing,
temporary storage and administration.
AMBIENT CORP: Ericsson to Buy Company for $7.5-Mil.
---------------------------------------------------
Katy Stech, writing for The Wall Street Journal, reported that
U.S. Bankruptcy Judge Kevin Gross in Wilmington, Delaware, has
approved Ericsson's offer to buy Ambient Corp. out from bankruptcy
for $7.5 million. According to the Journal, the sale will wipe
out the stake of majority owner Vicis Capital Master Fund, which
holds 57.8% of the company's common stock.
About Ambient Corporation
Headquartered in Newton, MA, Ambient Corporation (otc pink:AMBTQ)
-- http://www.ambientcorp.com/-- designs, develops and sells the
Ambient Smart Grid(R) communications and applications platform.
Ambient filed a Chapter 11 bankruptcy petition (Bankr. D. Del.
Case No. 14-11791) on July 28, 2014. Judge Kevin Gross presides
over the case.
The Debtor has tapped Bayard, P.A., in Wilmington, Delaware, as
counsel; Gavin/Solmonese LLC as financial advisor; and Upshot
Services, LLC, as claims and noticing agent.
The Debtor disclosed $1.75 million in assets and $3.54 million in
debt as of the bankruptcy filing.
AMERICAN APPAREL: Names New Interim CEO, CFO
--------------------------------------------
Suzanne Kapner, writing for The Wall Street Journal, reported that
American Apparel Inc. appointed Scott Brubaker, an Alvarez &
Marsal managing director, as new interim chief executive, and
replaced its chief financial officer with Hassan Natha, former CFO
for Fisher Communications Inc. According to the report, Mr.
Brubaker will serve as interim CEO while the maker of jeans and T-
shirts searches for a permanent successor to Dov Charney, the
company's founder. The Journal adds that John Luttrell, American
Apparel's CFO and interim CEO since Mr. Charney's removal, is
leaving the company.
About American Apparel
Los Angeles, Calif.-based American Apparel, Inc. (NYSE Amex: APP)
-- http://www.americanapparel.com/-- is a vertically integrated
manufacturer, distributor, and retailer of branded fashion basic
apparel. As of September 2010, American Apparel employed over
10,000 people and operated 278 retail stores in 20 countries,
including the United States, Canada, Mexico, Brazil, United
Kingdom, Ireland, Austria, Belgium, France, Germany, Italy, the
Netherlands, Spain, Sweden, Switzerland, Israel, Australia, Japan,
South Korea and China.
Amid liquidity problems and declining sales, American Apparel in
early 2011 reportedly tapped law firm Skadden, Arps, Slate,
Meagher & Flom and investment bank Rothschild Inc. for advice on a
restructuring.
In April 2011, American Apparel said it raised $14.9 million in
rescue financing from a group of investors led by Canadian
financier Michael Serruya and private equity firm Delavaco Capital
Corp., allowing the casual clothing retailer to meet obligations
to its lenders for the time being. Under the deal, the investors
were buying 15.8 million shares of common stock at 90 cents
apiece. The deal allows the investors to purchase additional
27.4 million shares at the same price.
American Apparel has been in the red as far back as 2010. The
Company reported a net loss of $106.29 million on $633.94 million
of net sales for the year ended Dec. 31, 2013, as compared with a
net loss of $37.27 million on $617.31 million of net sales for the
year ended Dec. 31, 2012. American Apparel posted a net loss of
$39.31 million on $547.33 million of net sales for the year ended
Dec. 31, 2011, compared with a net loss of $86.31 million on
$532.98 million of net sales during 2010. In 2011, American
Apparel announced a restatement of its 2009 financial reports.
The Company's balance sheet at June 30, 2014, showed
$314.36 million in total assets, $381.96 million in total
liabilities, and a $67.60 million total stockholders' deficit.
* * *
The TCR reported on Nov. 21, 2013, that Moody's Investors Service
downgraded American Apparel Inc.'s corporate family rating to
Caa2. The clothing retailer's probability of default was also
lowered one level and the outlook is negative.
As reported by the TCR on Sept. 2, 2014, Standard & Poor's Ratings
Services lowered its corporate credit rating on Los Angeles-based
American Apparel Inc. to 'CCC-' from 'CCC'. The outlook is
negative.
"The downgrade reflects our assessment that a debt restructuring
appears inevitable within six months, absent unanticipated
significantly favorable changes in the company's circumstances,"
said Standard & Poor's credit analyst Ryan Ghose.
AMERICAN EAGLE: Announces Operations Update
-------------------------------------------
American Eagle Energy Corporation announced an operations update
and production guidance for the Company's operated well
development in its Spyglass Project area in northwestern Divide
County, North Dakota.
Highlights
* American Eagle added 7 gross (5.2 net) operated wells to
production during third quarter of 2014, including a 4-well
pad with 3.5 net wells that have recently been placed on
production;
* Eli 8-1E well (Bakken long lateral) produced an average of
approximately 398 barrels of oil equivalent per day during the
first 25 days;
* Net production for third quarter 2014 is estimated to average
approximately 2,100 to 2,200 BOEPD, impacted by 4-well pad
being added to production approximately one month later in the
quarter;
* Exit rate production for 2014 should range between 2,700 to
over 3,000 BOEPD. The new exit rate range guidance is the
result of the Company's decision to focus on controlling costs
to the extent possible by increasing pad development and
avoiding stimulation of wells during the coldest part of
winter.
Third Quarter 2014 - Well Development Activity
American Eagle added 7 gross (5.2 net) operated wells to
production during third quarter 2014. The James 15-20 (Three
Forks long lateral) and Annie 15-32 (Thee Forks short lateral)
wells were added to production during late July 2014 and during
the first 30 days produced approximately 366 BOEPD and 216 BOEPD,
respectively. The Eli 8-1E well (Bakken long lateral) was added
to production in late August and produced an average of 398 BOEPD
during the first 25 days. The Eli 8-1E is the first well in the
field with a full slickwater stimulation. The revised stimulation
costs approximately $250,000 more than the hybrid design. The
initial production results look encouraging, especially in terms
of improving Bakken performance in the area, although further
monitoring is needed to quantify the benefits.
The Company completed drilling the 4-well development pad (3.5 net
wells) in late June. The pad is located in a spacing unit between
the recently completed Eli 8-1E and Murielle 16-1E to the east and
the Bryce 3-2 well to the west. The wells have been stimulated,
cleaned out and put on pump. The estimated total average cost to
drill, complete and equip each well was approximately $5.8 million
with a range of approximately $5.5 million to $6.1 million. The
wells are cleaning up and displaying similar early time behavior
to the offset producers. The Company anticipates reporting
stabilized production results within 30 days.
Operated Well Development Guidance
American Eagle currently has 2 gross (0.8 net) operated wells
(Skjermo 2-14 and Donald 15-33S) that have been stimulated and are
being prepped for production and 1 gross (0.8 net) operated well
(Rick 13-31) that is scheduled for completion in early October.
One rig is currently drilling the first well on a 2-well
development pad. The second rig is currently being replaced by a
newer rig and is expected to resume drilling by the end of
October.
Production Volume Guidance
The Company estimates that average third quarter 2014 production
will be approximately 2,100 to 2,200 BOEPD. The delay in bringing
on the 4-well pad with high working interests reduced the average
production in the current quarter by approximately 300 BOEPD.
American Eagle's goal for 2014 was to exit the year at or above
3,000 BOEPD. The Company believes that goal could be achieved
prior to the end of the year. Depending upon timing of well
completions scheduled for the fourth quarter of 2014, the exit
rate for 2014 should range between 2,700 to over 3,000 BOEPD. The
new exit rate range guidance is the result of the Company's
decision to focus on controlling costs, to the extent possible, by
increasing pad development and avoiding stimulation of wells
during the coldest part of winter. The early onset of severe
weather could impact the rate by limiting completions in December.
USG Midstream estimates its gas line to the Tioga processing
facility will be operational in October 2014. If so, the Company
could achieve full gas sales from connected operated wells during
the fourth quarter of 2014.
Commodity Hedges
The Company closed out of its previous commodity hedges in
conjunction with its debt refinancing on Aug. 27, 2014, at a cost
of $7.2 million. New crude oil hedges were put in place that
average $90.40 per barrel with average daily hedged volumes of
approximately 1,600 barrels of oil per day for fourth quarter 2014
and an average of $89.52 per barrel with average daily hedged
volumes of approximately 1,000 barrels of oil per day for 2015.
About American Eagle
Littleton, Colorado-based American Eagle Energy Corporation is
engaged in the acquisition, exploration and development of oil and
gas properties. The Company is primarily focused on extracting
proved oil reserves from those properties.
As of June 30, 2014, American Eagle had $319.88 million in total
assets, $186.46 million in total liabilities and $133.41 million
in total stockholders' equity.
American Eagle incurred a net loss of $3.89 million for the three
months ended June 30, 2014.
* * *
As reported by the TCR on Aug. 7, 2014, Standard & Poor's Ratings
Services assigned its 'CCC+' corporate credit rating to Denver-
based American Eagle Energy Corp. "The ratings on American Eagle
reflect our view of the company's participation in the volatile
and capital-intensive oil and gas E&P industry, and its small and
geographically concentrated asset base in Divide County, N.D.,"
said Standard & Poor's credit analyst Christine Besset.
The TCR reported on Aug. 6, 2014, that Moody's Investors Service
assigned first time ratings to American Eagle Energy Corporation's
(American Eagle Energy or AMZG), including a Caa1 Corporate Family
Rating (CFR).
AMERICAN INT'L: Hank Greenberg Challenges Bailout
-------------------------------------------------
Leslie Scism, writing for The Wall Street Journal, reported that
Maurice R. "Hank" Greenberg, who built American International
Group Inc. into a global financial-services powerhouse during
nearly 40 years at its helm, is challenging the historic 2008
government bailout of the company. According to the report, a
lawyer for Mr. Greenberg, David Boies, is expected to ask a
federal judge in Washington to rule that the government coerced
AIG's board into harsh terms, allegedly cheating shareholders
including Mr. Greenberg in the process.
About AIG
With corporate headquarters in New York, American International
Group, Inc., is an international insurance company, serving
customers in more than 130 countries. AIG companies serve
commercial, institutional and individual customers through
property-casualty networks of any insurer. In addition, AIG
companies are providers of life insurance and retirement services.
At the height of the 2008 financial crisis, AIG experienced a
liquidity crunch when its credit ratings were downgraded below
"AA" levels by Standard & Poor's, Moody's Investors Service and
Fitch Ratings. AIG almost collapsed under the weight of bad bets
it made insuring mortgage-backed securities. The Company,
however, was bailed out by the Federal Reserve, but even after an
initial infusion of $85 billion, losses continued to grow. The
later rescue packages brought the total to $182 billion, making it
the biggest federal bailout in U.S. history. AIG sold off a
number of its businesses and other assets to pay down loans
received from the U.S. government.
AMERICAN POWER: Extends Note Maturity Dates by One Year
-------------------------------------------------------
American Power Group, Inc., a wholly owned subsidiary of American
Power Group Corporation, entered into an amendment to an existing
promissory note with Lyle Jensen, according to a regulatory filing
with the U.S. Securities and Exchange Commission. The amendment
extended the maturity date of the promissory note to Oct. 1, 2015.
On Sept. 24, 2014, American Power Group Corporation entered into
an amendment to an existing promissory note with Charles Coppa.
The amendment extended the maturity date of the promissory note to
Oct. 1, 2015.
About American Power Group
American Power Group's alternative energy subsidiary, American
Power Group, Inc., provides a cost-effective patented Turbocharged
Natural GasTM conversion technology for vehicular, stationary and
off-road mobile diesel engines. American Power Group's dual fuel
technology is a unique non-invasive energy enhancement system that
converts existing diesel engines into more efficient and
environmentally friendly engines that have the flexibility to run
on: (1) diesel fuel and liquefied natural gas; (2) diesel fuel and
compressed natural gas; (3) diesel fuel and pipeline or well-head
gas; and (4) diesel fuel and bio-methane, with the flexibility to
return to 100 percent diesel fuel operation at any time. The
proprietary technology seamlessly displaces up to 80% of the
normal diesel fuel consumption with the average displacement
ranging from 40 percent to 65 percent. The energized fuel balance
is maintained with a proprietary read-only electronic controller
system ensuring the engines operate at original equipment
manufacturers' specified temperatures and pressures. Installation
on a wide variety of engine models and end-market applications
require no engine modifications unlike the more expensive invasive
fuel-injected systems in the market. Additional information at
http://www.americanpowergroupinc.com/
As of June 30, 2014, the Company had $9.58 million in total
assets, $5.67 million in total liabilities and $3.90 million in
total stockholder's equity.
American Power incurred a net loss available to common
stockholders of $2.92 million for the year ended Sept. 30, 2013,
following a net loss available to common stockholders of $14.66
million for the year ended Sept. 30, 2012. The Company reported a
net loss available to common shareholders of $6.81 million for the
year ended Sept. 30, 2011.
AMSTERDAM HOUSE: KCC Approved as Administrative Agent
-----------------------------------------------------
The Bankruptcy Court authorized Amsterdam House Continuing Care
Retirement Community, Inc., to employ Kurtzman Carson Consultants
LLC as administrative agent nunc pro tunc to Petition Date.
As reported in the Troubled Company Reporter on Sept. 1, 2014,
Judge Alan S. Trust also authorized the Debtor to employ KCC as
noticing and claims agent. Prior to the Petition Date, the
Debtors provided KCC with a retainer in the amount of $5,000.
About Amsterdam House
Amsterdam House Continuing Care Retirement Community, Inc., owns
and operates Harborside, an upscale retirement community is
situated on 8.9 acres in Port Washington, New York. Harborside
-- http://www.theamsterdamatharborside.com/-- is Nassau County's
first and only CCRC licensed under Article 46 of the New York
Public Health Law. CCRCs provide senior citizens with a full
range of living accommodations and healthcare services during
their retirement years. Harborside currently offers 329 units of
varying sizes for independent, enriched, and skilled nursing care.
Amsterdam House filed a Chapter 11 bankruptcy petition (Bankr.
E.D.N.Y. Case No. 14-73348) on July 22, 2014, in Central Islip,
New York, to implement a prenegotiated bankruptcy-exit plan.
The case is assigned to Judge Alan S Trust.
Ingrid Bagby, Esq., at Cadwalader Wickersham & Taft LLP, serves as
the Debtor's counsel. Grant Thornton LLP serves as financial
advisors, Herbert J. Sims & Co., Inc., serves as investment
bankers, and Kurtzman Carson Consultants LLC acts as claim and
noticing agent.
The Company said that total assets were $286 million and debt was
$437 million as of April 30, 2014.
ASSOCIATED WHOLESALERS: Hires Lazard as Investment Banker
---------------------------------------------------------
Associated Wholesalers, Inc., AWI Delaware, Inc., and its debtor
affiliates seek authority from the U.S. Bankruptcy Court for the
District of Delaware to employ Lazard Freres & Co. LLC and Lazard
Middle Market LLC as investment banker, nunc pro tunc to the Sept.
9, 2014 petition date.
Pursuant to the terms of the Engagement Agreement, Lazard will
perform investment banking services as the Debtors may reasonably
request, including:
(a) reviewing and analyzing the Debtors' business, operations
and financial projections;
(b) assisting the Debtors in identifying and evaluating
candidates for any potential Sale Transaction (as defined
in the Engagement Agreement);
(c) assisting the Debtors in preparing marketing materials and
managing due diligence process for any potential Sale
Transaction;
(d) advising the Debtors in connection with negotiations and
aiding in the consummation of any Sale Transaction;
(e) evaluating the Debtors' potential debt capacity in light of
their projected cash flows;
(f) assisting in the determination of a capital structure for
the Debtors;
(g) assisting in the determination of a range of values for the
Debtors on a going concern basis;
(h) advising the Debtors on tactics and strategies for
negotiating with the Debtors' stakeholders;
(i) rendering financial advice to the Debtors and participating
in meetings or negotiations with the Debtors' stakeholders
and other appropriate parties in connection with any Sale
Transaction or Restructuring;
(j) advising the Debtors on the timing, nature, and terms of
new securities, other consideration or other inducements to
be offered pursuant to any Restructuring;
(k) advising and assisting the Debtors in evaluating any
potential Financing transaction by the Debtors, and,
subject to Lazard's agreement so to act and, if requested
by Lazard, to execution of appropriate agreements, on
behalf of the Debtors, contacting potential sources of
capital as the Debtors may designate and assisting the
Debtors in implementing such Financing;
(l) assisting the Debtors in preparing documentation within
Lazard's area of expertise that is required in connection
with any Sale Transaction or Restructuring;
(m) attending meetings of the board of directors of AWI with
respect to matters on which Lazard has been engaged to
advise;
(n) providing testimony, as necessary, with respect to matters
on which Lazard has been engaged to advise in any
proceeding before the Bankruptcy Court; and
(o) providing the Debtors with other financial restructuring
advice.
As set forth with greater specificity in the Engagement Agreement,
the Debtors and Lazard have agreed to these terms of compensation:
-- A monthly fee of $100,000 -- Monthly Fees -- payable on
July 13, 2014, and on the 13th day of each month thereafter
until the earlier of the completion of the Sale Transaction,
Restructuring or the termination of Lazard's engagement
pursuant to Section 10 of the Engagement Agreement. 50% of
Monthly Fees paid in respect of any months following the
first month of Lazard's engagement shall be credited against
any Sale Transaction Fee or Restructuring Fee payable;
provided, that, in the event of a Chapter 11 filing, such
credit shall only apply to the extent that such fees are
approved in their entirety by the Bankruptcy Court, if
applicable.
-- (i) If, whether in connection with the consummation of a
Restructuring or otherwise, the Debtors consummates a Sale
Transaction incorporating all or a majority of the assets or
all or a majority or controlling interest in the equity
securities of the Debtors, Lazard shall be paid a fee (the
"Sale Transaction Fee") equal to (A) $2,000,000 plus (B)
3.5% of Aggregate Consideration in excess of $202 million.
(ii) If, whether in connection with the consummation of a
Restructuring or otherwise, the Debtors consummate a Sale
Transaction incorporating all or a majority of the assets of
White Rose, Inc., and its subsidiaries or all or a majority
or controlling interest in the equity securities of White
Rose and such transaction is not subject to clause (i)
above, the Debtors shall pay Lazard a fee (the "White Rose
Transaction Fee") equal to (A) $1.25 million, plus (B) 3.5%
of Aggregate Consideration in such transaction that is in
excess of $135 million. 100% of any White Rose Transaction
Fee shall be credited against any Restructuring Fee
subsequently payable.
(iii) Any Sale Transaction Fee or White Rose Transaction Fee
shall be payable upon consummation of the applicable Sale
Transaction.
-- A fee equal to $2,000,000 payable upon the consummation of
a Restructuring (the "Restructuring Fee"); provided,
however, that if a Restructuring is to be completed through
a "pre-packaged" or "prearranged" plan of reorganization,
the Restructuring Fee shall be earned and shall be payable
upon the consummation of the Restructuring.
Lazard will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Prior to entering into the Engagement Agreement, Lazard was
retained by the Debtors in May 2014 to provide investment banking
services and engage in marketing efforts on the Debtors' behalf.
As such, in the one-year period prior to the Petition Date, Lazard
received payment from the Debtors in the approximate amount of
$500,000 in fees for services rendered and reimbursement of
$24,043.92 in expenses, for a total amount of $524,043.92.
Andrew Torgove, managing director of Lazard Middle Market 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.
The Court for the District of Delaware will hold a hearing on the
application on Oct. 29, 2014, at 3:00 p.m. Objections, if any,
are due Oct. 8, 2014, at 4:00 p.m.
Lazard can be reached at:
Andrew Torgove
LAZARD MIDDLE MARKET LLC
600 Fifth Avenue, Suite 800
New York, NY 10020
Tel: +1 (212) 418-3211
Fax: +1 (212) 758-3833
E-mail: andrew.torgove@lazard.com
About Associated Wholesalers
Founded in 1962 and headquartered in Robesonia, Pennsylvania,
Associated Wholesalers Inc. services 800 supermarkets, specialty
stores, convenience stores and superettes with grocery, meat,
produce, dairy, frozen foods and general merchandise/health and
beauty care products. AWI, which owns distribution facilities in
Robesonia, Pennsylvania, and York, Pennsylvania, serves the mid-
Atlantic United States. AWI is owned by its 500 retail members,
who in turn operate supermarkets. AWI has 1,459 employees.
White Rose Inc. is a food wholesaler and distributor serving the
greater New York metropolitan area. The company traces its
origins to 1886, when brothers Joseph and Sigel Seeman founded
Seeman Brothers & Doremus to provide grocery deliveries throughout
New York City. White Rose carries out its operations through
three leased warehouse and distribution centers, two of which are
located in Carteret, New Jersey, and one in Woodbridge, New
Jersey. White Rose has 777 employees.
Associated Wholesalers and its affiliates sought Chapter 11
bankruptcy protection on Sept. 9, 2014, to sell their assets under
11 U.S.C. Sec. 363 to C&S Wholesale Grocers, absent higher and
better offers.
The Debtors have sought joint administration of their Chapter 11
cases for procedural purposes, seeking to maintain all pleadings
on the case docket for AWI Delaware, Inc., Bankr. D. Del. Case No.
14-12092.
As of the Petition Date, the Debtors owe the Bank Group
(consisting of lenders, Bank of America, N.A., Bank of American
Securities LLC as sole lead arranger and joint book runner, Wells
Fargo Capital Finance, LLC as joint book runner and syndication
agent, and RBS Capita, as documentation agent) an aggregate
principal amount of not less than $131,857,966 (inclusive of
outstanding letters of credit), plus accrued interest. The
Debtors estimate trade debt of $72 million.
Saul Ewing LLP and Rhoads & Sinon LLP are serving as legal
advisors to the Debtors, Lazard Middle Market is serving as
financial advisor, and Carl Marks Advisors is serving as
restructuring advisor to AWI. Carl Marks' Douglas A. Booth has
been tapped as chief restructuring officer. Epiq Systems serves
as the Debtors' claims agent.
ASSOCIATED WHOLESALERS: ConAgra, Kraft Named to Creditors' Panel
----------------------------------------------------------------
Roberta A. DeAngelis, U.S. Trustee for Region 3, notified the U.S.
Bankruptcy Court for the District of Delaware that she has
appointed seven members to the Official Committee of Unsecured
Creditors in the Chapter 11 cases of AWI Delaware, Inc., et al.
The Committee members are:
(1) ConAgra Foods, Inc.
Attn: Bob Ellis
1 ConAgra Drive 1-220
Omaha, NE 68102
Phone: 402-240-5440
Fax: 402-516-0316
(2) Nestle Holdings
Attn: Pete Knox
30500 Bainbridge Rd.
Solan, OH 44139
Phone: 440- 264-7219
Fax: 818-553-3523
(3) The J.M. Smucker Company
Attn: Bruce Jones
1 Strawberry Ln.
Orrville, OH 44667
Phone: 330-684-3305
Fax: 330-684-3069
(4) Kraft Foods Group
Attn: Juan Mostek
Three Lakes Dr., 2B
Northfield, IL 60093
Phone: 847-646-6408
Fax: 847-646-0927
(5) McKesson Corporation
Attn: Kenneth Kuhn
1995 Rocksram Dr.
Buford, GA 30519
Phone: 678-427-9190
(6) IBT Warehouse Division
Attn: Ian Gold
25 Louisiana Ave., NW
Washington, DC 20001
Phone: 202-624-6800
Fax: 303-480-1015
(7) Pension Benefit Guaranty Corporation
Attn: Karen Turner
1200 K St., NW
Washington, DC 20005
Phone: 202-326-4070 x 3476
Fax: 202-842-2643
Bill Rochelle and Sherri Toub, bankruptcy columnists for Bloomberg
News, noted that the list of members of the Creditors' Committee
reads like who's who in the food industry.
The Creditors' Committee is represented by:
David B. Stratton, Esq.
Evelyn J. Meltzer, Esq.
PEPPER HAMILTON LLP
Hercules Plaza, Suite 5100
1313 N. Market Street
Wilmington, DE 19899-1709
Tel: (302) 777-6500
Fax: (302) 421-8390
Email: strattond@pepperlaw.com
meltzere@pepperlaw.com
-- and --
Mark S. Indelicato, Esq.
Mark T. Power, Esq.
Janine M. Figueiredo, Esq.
HAHN & HESSEN LLP
488 Madison Avenue
New York, NY 10022
Tel: (212) 478-7200
Fax: (212) 478-7400
E-mail: mindelicato@hahnhessen.com
mpower@hahnhessen.com
jfigueiredo@hahnhessen.com
About Associated Wholesalers
Founded in 1962 and headquartered in Robesonia, Pennsylvania,
Associated Wholesalers Inc. services 800 supermarkets, specialty
stores, convenience stores and superettes with grocery, meat,
produce, dairy, frozen foods and general merchandise/health and
beauty care products. AWI, which owns distribution facilities in
Robesonia, Pennsylvania, and York, Pennsylvania, serves the mid-
Atlantic United States. AWI is owned by its 500 retail members,
who in turn operate supermarkets. AWI has 1,459 employees.
White Rose Inc. is a food wholesaler and distributor serving the
greater New York metropolitan area. The company traces its
origins to 1886, when brothers Joseph and Sigel Seeman founded
Seeman Brothers & Doremus to provide grocery deliveries throughout
New York City. White Rose carries out its operations through
three leased warehouse and distribution centers, two of which are
located in Carteret, New Jersey, and one in Woodbridge, New
Jersey. White Rose has 777 employees.
Associated Wholesalers and its affiliates sought Chapter 11
bankruptcy protection on Sept. 9, 2014, to sell their assets under
11 U.S.C. Sec. 363 to C&S Wholesale Grocers, absent higher and
better offers.
The Debtors have sought joint administration of their Chapter 11
cases for procedural purposes, seeking to maintain all pleadings
on the case docket for AWI Delaware, Inc., Bankr. D. Del. Case No.
14-12092.
As of the Petition Date, the Debtors owe the Bank Group
(consisting of lenders, Bank of America, N.A., Bank of American
Securities LLC as sole lead arranger and joint book runner, Wells
Fargo Capital Finance, LLC as joint book runner and syndication
agent, and RBS Capita, as documentation agent) an aggregate
principal amount of not less than $131,857,966 (inclusive of
outstanding letters of credit), plus accrued interest. The
Debtors estimate trade debt of $72 million.
Saul Ewing LLP and Rhoads & Sinon LLP are serving as legal
advisors to the Debtors, Lazard Middle Market is serving as
financial advisor, and Carl Marks Advisors is serving as
restructuring advisor to AWI. Carl Marks' Douglas A. Booth has
been tapped as chief restructuring officer. Epiq Systems, the
claims agent, maintains the Web site http://dm.epiq11.com/awi
ASSOCIATED WHOLESALERS: US Trustee Forms Creditors' Committee
-------------------------------------------------------------
The U.S. Trustee for Region 3 on Sept. 17 appointed seven
creditors of Associated Wholesalers Inc. and its affiliates to
serve on the official committee of unsecured creditors.
The unsecured creditors' committee is composed of:
(1) ConAgra Foods, Inc.
Attn: Bob Ellis
1 ConAgra Drive 1-220
Omaha, NE 68102
Phone: 402-240-5440
Fax: 402-516-0316
(2) Nestle Holdings
Attn: Pete Knox
30500 Bainbridge Rd.
Solan, OH 44139
Phone: 440-264-7219
Fax: 818-553-3523
(3) The J.M. Smucker Company
Attn: Bruce Jones
1 Strawberry Ln.
Orrville, OH 44667
Phone: 330-684-3305
Fax: 330-684-3069
(4) Kraft Foods Group
Attn: Juan Mostek
Three Lakes Dr., 2B
Northfield, IL 60093
Phone: 847-646-6408
Fax: 847-646-0927
(5) McKesson Corporation
Attn: Kenneth Kuhn
1995 Rocksram Dr.
Buford, GA 30519
Phone: 678-427-9190
(6) IBT Warehouse Division
Attn: Ian Gold
25 Louisiana Ave., NW
Washington, DC 20001
Phone: 202-624-6800
Fax: 303-480-1015
(7) Pension Benefit Guaranty Corporation
Attn: Karen Turner
1200 K St., NW
Washington, DC 20005
Phone: 202-326-4070 x 3476
Fax: 202-842-2643
Official creditors' committees have the right to employ legal and
accounting professionals and financial advisors, at a debtor's
expense. They may investigate the debtor's business and financial
affairs. Importantly, official committees serve as fiduciaries to
the general population of creditors they represent.
About Associated Wholesalers
Founded in 1962 and headquartered in Robesonia, Pennsylvania,
Associated Wholesalers Inc. services 800 supermarkets, specialty
stores, convenience stores and superettes with grocery, meat,
produce, dairy, frozen foods and general merchandise/health and
beauty care products. AWI, which owns distribution facilities in
Robesonia, Pennsylvania, and York, Pennsylvania, serves the mid-
Atlantic United States. AWI is owned by its 500 retail members,
who in turn operate supermarkets. AWI has 1,459 employees.
White Rose Inc. is a food wholesaler and distributor serving the
greater New York metropolitan area. The company traces its
origins to 1886, when brothers Joseph and Sigel Seeman founded
Seeman Brothers & Doremus to provide grocery deliveries throughout
New York City. White Rose carries out its operations through
three leased warehouse and distribution centers, two of which are
located in Carteret, New Jersey, and one in Woodbridge, New
Jersey. White Rose has 777 employees.
Associated Wholesalers and its affiliates sought Chapter 11
bankruptcy protection on Sept. 9, 2014, to sell their assets under
11 U.S.C. Sec. 363 to C&S Wholesale Grocers, absent higher and
better offers.
The Debtors have sought joint administration of their Chapter 11
cases for procedural purposes, seeking to maintain all pleadings
on the case docket for AWI Delaware, Inc., Bankr. D. Del. Case No.
14-12092.
As of the Petition Date, the Debtors owe the Bank Group
(consisting of lenders, Bank of America, N.A., Bank of American
Securities LLC as sole lead arranger and joint book runner, Wells
Fargo Capital Finance, LLC as joint book runner and syndication
agent, and RBS Capita, as documentation agent) an aggregate
principal amount of not less than $131,857,966 (inclusive of
outstanding letters of credit), plus accrued interest. The
Debtors estimate trade debt of $72 million.
Saul Ewing LLP and Rhoads & Sinon LLP are serving as legal
advisors to the Debtors, Lazard Middle Market is serving as
financial advisor, and Carl Marks Advisors is serving as
restructuring advisor to AWI. Carl Marks' Douglas A. Booth has
been tapped as chief restructuring officer. Epiq Systems, the
claims agent, maintains the Web site http://dm.epiq11.com/awi
BAY AREA: Plan of Reorganization/Liquidation Confirmed
------------------------------------------------------
The Bankruptcy Court entered an order confirming Bay Area
Financial Corporation's First Amended Plan of
Reorganization/Liquidation.
On Aug. 20, 2014, the Court held a hearing regarding the
confirmation of the Plan. A post-confirmation status conference
will be held on Jan. 14, 2015, at 2:00 p.m.
As reported by the TCR, the Debtor filed on April 8, 2014, its
proposed plan to exit bankruptcy protection. The TCR reported on
April 15, 2014, that under the plan, Class 1 consists of secured
tax claims, which are primarily claims for property taxes on the
various real estate parcels owned by the company. A copy of the
Debtor's latest disclosure statement explaining its proposed plan
is available for free at http://is.gd/Cht1qs
In a separate filing, the Court entered an order stating that the
Debtor is not eligible for a discharge.
About Bay Area Financial
Bay Area Financial Corp., a consumer finance company, sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D.
Cal. Case No. 13-38974) on Dec. 9, 2013. The case is assigned to
Judge Thomas B. Donovan.
The Debtor is represented by Sandford L. Frey, Esq., and Stuart I.
Koenig, Esq., at Creim Macias Koenig & Frey LLP.
The Debtor disclosed $15,248,851 in assets and $21,239,663 in
liabilities as of the Chapter 11 filing. There is no secured
debt, although $141,000 is owing on a priority tax claim.
Peter C. Anderson, the U.S. Trustee for Region 16, appointed five
members to the Official Committee of Unsecured Creditors. The
Committee is represented by James C. Bastian, Jr., Esq., and
Melissa Davis Lowe, Esq., at Shulman Hodges & Bastian LLP.
BERNARD L. MADOFF: Appeals Court Ruling Offers Hope for Investor
----------------------------------------------------------------
Jacqueline Palank, writing for Daily Bankruptcy Review, reported
that the U.S. Court of Appeals for the Second Circuit ruled that a
bankruptcy judge must review a bid to sell a $230 million claim in
the Bernard Madoff liquidation, offering new hope to the seller's
bid to break off the deal. According to the report, the Court of
Appeals ruled that a Manhattan bankruptcy judge erred in declining
to review the sale of a claim held by major Madoff feeder fund
Fairfield Sentry Ltd. The bankruptcy court had concluded, and a
district court affirmed, that it didn't need to weigh in because
the deal didn't involve assets under U.S. jurisdiction, the report
related.
About Bernard L. Madoff
Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff
orchestrated the largest Ponzi scheme in history, with losses
topping US$50 billion. On Dec. 15, 2008, the Honorable Louis A.
Stanton of the U.S. District Court for the Southern District of
New York granted the application of the Securities Investor
Protection Corporation for a decree adjudicating that the
customers of BLMIS are in need of the protection afforded by the
Securities Investor Protection Act of 1970. The District Court's
Protective Order (i) appointed Irving H. Picard, Esq., as trustee
for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP
as his counsel, and (iii) removed the SIPA Liquidation proceeding
to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789)
(Lifland, J.). Mr. Picard has retained AlixPartners LLP as claims
agent.
On April 13, 2009, former BLMIS clients filed an involuntary
Chapter 7 bankruptcy petition against Bernard Madoff (Bankr.
S.D.N.Y. 09-11893). The petitioning creditors -- Blumenthal &
Associates Florida General Partnership, Martin Rappaport
Charitable Remainder Unitrust, Martin Rappaport, Marc Cherno, and
Steven Morganstern -- assert US$64 million in claims against Mr.
Madoff based on the balances contained in the last statements they
got from BLMIS.
On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff
Securities International Limited in London under bankruptcy
protection pursuant to Chapter 15 of the U.S. Bankruptcy Code
(Bankr. S.D. Fla. 09-16751).
The Chapter 15 case was later transferred to Manhattan. In June
2009, Judge Lifland approved the consolidation of the Madoff SIPA
proceedings and the bankruptcy case.
Judge Denny Chin of the U.S. District Court for the Southern
District of New York on June 29, 2009, sentenced Mr. Madoff to
150 years of life imprisonment for defrauding investors in United
States v. Madoff, No. 09-CR-213 (S.D.N.Y.).
From recoveries in lawsuits coupled with money advanced by SIPC,
Mr. Picard has commenced distributions to victims, with the fourth
and latest batch of distributions done in May 2014. Distributions
to eligible claimants have totaled almost $6 billion, which
includes $812.2 million in committed advances from the SIPC. More
than 1,100 victims have already recovered the full principal they
lost in the fraud.
As of May 2014, Mr. Picard has recovered or reached agreements to
recover $9.8 billion since his appointment in December 2008.
BIG M: Cathy Fernandes Approved to Foreclose Mortgage
-----------------------------------------------------
The Bankruptcy Court entered an order vacating the automatic stay
in the Chapter 11 case of Big M, Inc.
Cathy Fernandes, or her successors or assigns, are now permitted
to institute, or resume, and prosecute to conclusion an action
entitled, Cathy Fernandes v. Dawn Marie Damatta, formerly known as
Dawn Marie Psaltis, et al., in the Superior Court of New Jersey,
Chancery Division, Middlesex County.
Ms. Fernandes may foreclose a Mortgage held by Fernandes, and
extinguish any and all rights of subordinate lienholders,
including those of the Debtor, Big M Inc. t/a Mandee/Katin Morgan
upon the Land and Premises commonly known as 27 Jersey Avenue, in
the Township of Edison, County of Middlesex and State of New
Jersey (Lot 8.D1, Block 647).
The Court also ordered that Ms. Fernandes may join the Debtor and
any trustee appointed in the case as defendants in the action(s)
irrespective of any conversion to any other chapter of the
Bankruptcy Code.
Ms. Fernandes is represented by:
Darren Barreiro, Esq.
GREENBAUM, ROWE, SMITH & DAVIS LLP
Metro Corporate Campus One
99 Wood Avenue South
Iselin, NJ 08830
Tel: (732) 549-5600
About Big M, Mandee,
Annie sez, and Afazxe Stores
Totowa, New Jersey-based Big M, Inc., filed a Chapter 11 petition
(Bankr. D.N.J. Case No. 13-10233) on Jan. 6, 2013, with Salus
Capital Partners, LLC, funding the Chapter 11 effort. Judge
Donald H. Steckroth presides over the case.
At the time of the bankruptcy filing, Big M was the owner of
Mandee, Annie sez, and Afazxe Stores. The Mandee brand is a
juniors fashion retailer with 84 stores in Illinois and along the
East Coast. Annie sez is a discount department-store retailer for
women with 35 stores. Afaze is 10-store jewelry and accessory
chain.
Kenneth A. Rosen, Esq., at Lowenstein Sandler LLP, in Roseland,
serves as counsel to the Debtor. PricewaterhouseCoopers LLP has
been tapped to serve as financial advisor. GRL Capital Advisors
LLC's Glenn R. Langberg has been hired to serve as chief
restructuring officer.
Attorneys at Becker Meisel LLC serve the Debtor as conflicts
counsel.
The Debtor disclosed $21,384,430 in assets and $21,374,057 in
liabilities as of the Chapter 11 filing.
The Official Committee of Unsecured Creditors has tapped Cooley
Godward Kroish, LLP, as its counsel, and CBIZ Accounting, Tax and
Advisory of New York, LLC and CBIZ Mergers & Acquisitions Group as
its financial advisor.
In mid-2013, the Bankruptcy Court authorized the Debtor to sell
substantially all of its assets to YM LLC USA, formerly known as
YM Inc USA.
BION ENVIRONMENTAL: Incurs $5.7 Million Net Loss in Fiscal 2014
---------------------------------------------------------------
Bion Environmental Technologies, Inc., filed with the U.S.
Securities and Exchange Commission its annual report on Form 10-K
disclosing a net loss of $5.76 million on $5,931 of revenue for
the year ended June 30, 2014, compared to a net loss of $8.24
million on $11,862 of revenue during the prior year.
The Company's balance sheet at June 30, 2014, showed $4.59 million
in total assets, $12.02 million in total liabilities, $23,400 in
series B redeemable convertible preferred stock, and a $7.45
million total deficit.
GHP HORWATH, P.C., in Denver, Colorado, issued a "going concern"
qualification on the consolidated financial statements for the
year ended June 30, 2014. The independent auditors noted that the
Company has not generated significant revenue and has suffered
recurring losses from operations. These factors raise substantial
doubt about its ability to continue as a going concern.
A full-text copy of the Form 10-K is available for free at:
http://is.gd/WDsQRl
About Bion Environmental
Bion Environmental Technologies Inc.'s patented and proprietary
technology provides a comprehensive environmental solution to a
significant source of pollution in US agriculture, large scale
livestock facilities known as Confined Animal Feeding Operations.
Bion's technology produces substantial reductions of nutrient
releases (primarily nitrogen and phosphorus) to both water and air
(including ammonia, which is subsequently re-deposited to the
ground) from livestock waste streams based upon the Company's
operations and research to date (and third party peer review).
BIONEUTRAL GROUP: Reports $1.27-Mil. Loss in July 31 Quarter
------------------------------------------------------------
BioNeutral Group, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q, disclosing
a net loss of $1.27 million on $8,861 of revenues for the three
months ended July 31, 2014, compared with a net loss of $1.1
million on $3,310 of revenues for the same period last year.
The Company's balance sheet at July 31, 2014, showed $8.75 million
in total assets, $5.62 million in total liabilities and total
stockholders' equity of $3.13 million.
The Company believes that it will be able to generate significant
sales by the second quarter of fiscal 2015 providing for
sufficient cash flows to supplement its equity financing based on
its current plans. If it's able to execute its plan, the Company
can begin to accumulate cash reserves. There is no assurance
however that its funds will be sufficient to meet its anticipated
needs through Aug. 1, 2015, and it may need to raise additional
capital during this period to fund the full costs associated with
its growth and development. The Company believes that it will
require approximately $2 million in additional capital to achieve
its goals. There can be no assurances that it will be successful
in raising additional capital on favorable terms if at all. If
the Company is unable to secure additional capital, it may be
required to curtail its business development initiatives, impair
its intellectual property and take additional measures to reduce
cost in order to conserve cash. These conditions raise
substantial doubt about the Company's ability to continue as a
going concern.
A copy of the Form 10-Q is available at:
http://is.gd/dIRa1B
BioNeutral Group, Inc. has developed a novel combinational
chemistry-based technology that can neutralize harmful
environmental contaminants, toxins and dangerous microorganisms,
including bacteria, viruses and spores. The Company is based in
Newark, New Jersey.
CAESARS ENTERTAINMENT: Grants Security Interest to Credit Suisse
----------------------------------------------------------------
Caesars Entertainment Operating Company, Inc., a majority owned
subsidiary of Caesars Entertainment Corporation, is party to the
Amended and Restated Collateral Agreement dated as of June 10,
2009, by and among CEOC, the subsidiary parties party thereto
(Pledgors) and Credit Suisse AG, Cayman Islands Branch, as
successor collateral agent for the secured parties covered by the
Collateral Agreement.
On Sept. 25, 2014, at the request of certain holders of CEOC's
first priority senior secured notes, the Pledgors granted to the
Collateral Agent, for the benefit of lenders under CEOC's senior
secured credit facilities and holders of CEOC's first priority
senior secured notes, a security interest in and lien on all such
Pledgors' right, title and interest in and to, to the extent
existing, the alleged Commercial Tort Claims. The granting of the
security interests and related liens is not an acknowledgement or
admission by any Pledgor or any other person or entity that any of
the alleged Commercial Tort Claims does in fact have any merit or
value, or that any Pledgor has any right, title or interest
therein or standing to bring any or all of the alleged claims.
About Caesars Entertainment
Caesars Entertainment Corp., formerly Harrah's Entertainment Inc.
-- http://www.caesars.com/-- is one of the world's largest casino
companies. Caesars casino resorts operate under the Caesars,
Bally's, Flamingo, Grand Casinos, Hilton and Paris brand names.
The Company has its corporate headquarters in Las Vegas.
Harrah's announced its re-branding to Caesar's in mid-November
2010.
Caesars Entertainment reported a net loss of $2.93 billion in
2013, as compared with a net loss of $1.50 billion in 2012. As of
June 30, 2014, the Company had $27.06 billion in total assets,
$29.64 billion in total liabilities and a $2.57 billion
total deficit.
* * *
As reported by the TCR on April 9, 2013, Moody's Investors Service
downgraded Caesars Entertainment Corporation's Corporate Family
Rating to Caa2.
"The downgrade of Caesars' ratings considers that its same store
EBITDA growth in 2012-2013 has failed to materialize to any
significant degree, and so Caesars' credit metrics have
deteriorated and its free cash flow deficit will be higher than
Moody's previous expectations," stated Moody's analyst Peggy
Holloway.
In the April 10, 2014, edition of the TCR, Standard & Poor's
Ratings Services lowered its corporate credit ratings on Las
Vegas-based Caesars Entertainment Corp. (CEC) and wholly owned
subsidiaries, Caesars Entertainment Operating Co. (CEOC) and
Caesars Entertainment Resort Properties (CERP), as well
as the indirectly majority-owned Chester Downs and Marina, to
'CCC-' from 'CCC+'. The downgrade reflects S&P's expectation that
Caesars' capital structure is unsustainable, and the amount of
cash the company will burn in 2014 and 2015 creates conditions
under which S&P believes a restructuring of some form is
increasingly likely over the near term absent an unanticipated
significantly favorable change in operating performance.
As reported by the TCR on May 1, 2014, Fitch Ratings had
downgraded the Issuer Default Ratings (IDRs) of Caesars
Entertainment Corp (CEC) and Caesars Entertainment
Operating Company (CEOC) to 'CC' from 'CCC'.
CALDERA PHARMACEUTICALS: Timothy Tyson Appointed Interim CEO
------------------------------------------------------------
The Board of Directors of Caldera Pharmaceuticals, Inc., appointed
Timothy Tyson, age 61, as interim chief executive officer of the
Company effective Sept. 23, 2014, according to a regulatory filing
with the U.S. Securities and Exchange Commission. Mr. Tyson has
served as the Company's non-executive Chairman since April 1,
2014, and will continue in this role. Mr. Tyson has served on the
Company's Board of Directors since October 2013, and will continue
to serve on its Compensation and Nominations Committees.
Since 2008, Mr. Tyson has served as the Chairman of the Board of
Directors of Aptuit LLC, a global, private equity owned,
pharmaceutical services company, headquartered in Greenwich, CT
and he served as the chief executive officer of Aptuit LLC from
2008 until March 2012. Mr. Tyson served as president and CEO of
Valeant Pharmaceuticals International from 2003-2008. Prior to
joining Valeant, Mr. Tyson ran multiple divisions for
GlaxoSmithKline and was a member of the Corporate Executive Team,
reporting to the CEO. During his 14-year tenure at GSK, he was
President, Global Manufacturing and Supply and ran Glaxo
Dermatology and Cerenex Pharmaceuticals. Mr. Tyson was also
responsible for managing all sales and marketing for
GlaxoWellcome's U.S. operations, where he launched 32 new
products, eight of which reached sales of greater than $1 billion.
From 1980-1988, Mr. Tyson held executive positions in technical
operations and R & D, at Bristol-Myers. Prior to his tenure at
Bristol-Myers, he was an operations manager for Procter & Gamble.
Mr. Tyson is a 1974 graduate of the United States Military Academy
at West Point. While on active duty at Ft. McClellan, AL, he
earned a Masters of Public Administration, in 1976, and a Masters
of Business Administration, in 1979, from Jacksonville State
University. In 2002, Mr. Tyson received the Bicentennial
Leadership Award from the United States Military Academy at West
Point and was named 2007 Alumnus of the Year at Jacksonville State
University. He was inducted into the Six Sigma Hall of Fame in
2011 and was honored in 2012 at West Point by the Thayer Hotel
Room Dedication program. He was recognized as a President's Club
awardee for four years at GSK and his GSK organization was
recognized as Marketer of the Year for two consecutive years by
MedAdNews.
There are no family relationships between Mr. Tyson and any other
executive officers or directors of the Company.
The Company said no new compensatory or severance arrangements
were entered into in connection with Mr. Tyson's appointment as
interim chief executive officer.
About Caldera
Based in Cambridge, Massachusetts, Caldera Pharmaceuticals, Inc.,
is a drug discovery and pharmaceutical services company that is
based on a proprietary x-ray fluorescence technology, called
XRpro(R).
Caldera Pharmaceuticals incurred a net loss applicable to common
stock of $5.88 in 2013, a net loss applicable to common
stock of $951,791 in 2012 and a net loss applicable to common
stock of $2.35 million in 2011.
As of June 30, 2014, the Company had $5.30 million in total
assets, $3.40 million in total liabilities, $133,350 in
convertible redeemable preferred stock and $1.76 million in total
stockholders' equity.
CALYPTE BIOMEDICAL: Issues 53.4 Million Common Shares
-----------------------------------------------------
Calypte Biomedical Corporation and David Khidasheli have entered
into a Stock Purchase Agreement dated Sept. 21, 2014, providing
for the issuance to Mr. Khidasheli of 52,966,666 shares of the
Company's Common Stock, at a purchase price of $0.03 per share, in
consideration of $1,589,000 in advances that Mr. Khidasheli made
to the Company during the three-year period ended Dec. 31, 2013.
These advances include $1,000,000 advanced pursuant to a
Memorandum of Understanding dated Oct. 10, 2011, between Mr.
Khidasheli and the Company.
Pursuant to the Khidasheli Agreement, the Company has issued the
Khidasheli Shares to Mr. Khidasheli. In addition, pursuant to a
Stock Purchase Agreement dated Sept. 21, 2014, between the Company
and Carolina Lupascu, the Company issued to Ms. Lupascu 416,666
shares of the Company's Common Stock at a purchase price of $0.03
per share in consideration of an advance of $12,500 that Ms.
Lupascu made to the Company in January 2013. The Khidasheli
Shares and the Lupascu Shares were issued in offshore transactions
in reliance upon Regulation S promulgated under the Securities Act
of 1933.
About Calypte Biomedical
Portland, Oregon-based Calypte Biomedical Corporation develops,
manufactures, and distributes in vitro diagnostic tests, primarily
for the diagnosis of Human Immunodeficiency Virus ("HIV")
infection.
Calypte Biomedical reported a net loss of $1.07 million on
$230,000 of product sales for 2012, as compared with a
net loss of $693,000 on $579,000 of product sales for 2011.
The Company's balance sheet at Dec. 31, 2012, showed $1.76 million
in total assets, $7.02 million in total liabilities and a $5.26
million total stockholders' deficit.
OUM & Co. LLP, in San Francisco, California, issued a "going
concern" qualification on the consolidated financial statements
for the year ended Dec. 31, 2012. The independent auditors noted
that the Company has suffered recurring operating losses and
negative cash flows from operations, and management believes that
the Company's cash resources will not be sufficient to sustain its
operations through 2012 without additional financing. This raises
substantial doubt about the Company's ability to continue as a
going concern.
COLT DEFENSE: Moody's Lowers CFR to Caa2 & Alters Outlook to Neg.
-----------------------------------------------------------------
Moody's Investors Service has downgraded the ratings of Colt
Defense LLC, including its Corporate Family Rating ("CFR") and
Probability of Default Ratings to Caa2 and Caa2-PD from Caa1 and
Caa1-PD, respectively. In addition, its Speculative Grade
LIQUIDITY Rating was downgraded to SGL-4 from SGL-3, denoting a
weak LIQUIDITY profile. Concurrently, the company's UNSECURED
notes due 2017 were downgraded to Caa3 from Caa2. The ratings
outlook was changed to negative from stable.
The ratings downgrade reflects Colt's meaningfully weaker than
anticipated operating results during the first half of 2014
leading to elevated credit metrics and weak near-term liquidity
profile. Colt's ratings downgrade was driven by the lower than
expected operating performance stemming from a sharp decline in
sales of Modern Sporting Rifles, the non-recurrence of certain
international sales reflected in 2013 results and to a lesser
extent, lower sales to the company's core customer for several
years, the U.S. government. Sales to the U.S. government currently
represent less than 10% of total sales versus approximately 60% in
2009.
Ratings downgraded:
Corporate Family Rating, to Caa2 from Caa1
Probability of Default Rating, to Caa2-PD from Caa1-PD
Speculative grade liquidity, to SGL-4 from SGL-3
$250 million senior UNSECURED notes due 2017, to Caa3 (LGD-4, 66%)
from Caa2 (LGD-4, 63%)
Outlook, changed to Negative from Stable
Ratings Rationale
Colt's Caa2 Corporate Family Rating reflects its very high
leverage and weak liquidity position. The company's over 20
percent decline in revenues during the first half of 2014 to $99.7
million from $128.1 million is primarily being driven by a sharp
decline in revenue from modern sporting rifles (long guns)
combined with lower international and U.S. government related
sales partially offset by increased sales in handguns from its
acquisition of New Colt in mid-2013. Sales of modern sporting
rifles declined by over 50 percent during the first half of 2014.
Moody's believes the coming off of a cyclical peak in commercial
firearm sales against the backdrop of continued defense budget
pressures and uncertainty regarding timing of international sales,
will contribute to uncertainty regarding the degree of potential
improvement in the company's credit metrics, if any, over the
coming year. Credit metrics are not likely to improve over the
intermediate term as commercial firearm sales are expected to
continue to moderate off recent peak levels and international
sales vary meaningfully from quarter to quarter. The Caa2 CFR also
incorporates the increasing possibility of a payment default on
the company's term loan given the company's very high debt-to-
EBITDA leverage above 10.0x and weak EBIT-to-interest coverage of
well under 1.0x. Of note, the company's credit agreement was
amended in August providing the company the option to miss the
next three principal payments on its term loan through March 2015.
Any further operating performance deterioration could weaken the
company's liquidity position further and make it more difficult
for the company to make DEBT SERVICE payments on its debt as well
as remain in compliance with recently amended covenants.
The downgrade in the company's SGL rating to SGL-4 from SGL-3 is
based on the Moody's view that the company's near-term LIQUIDITY
profile is weak. Internal free cash flow generation which is
expected to remain negative through the remainder of the year
combined with lower cash balances, standing at $2.2 million at
June 30, 2014 are expected to lead to continued reliance on the
company's revolver. In addition, although financial maintenance
covenants were recently amended, uncertainty regarding any further
weakening of credit metrics makes compliance over the next twelve
to eighteen months less certain.
The negative rating outlook reflects the severity of the recent
earnings decline, and Moody's concern that earnings stabilization
or meaningful improvement is unlikely in the near-term leading to
the increased possibility of missed DEBT SERVICE payments and/or
ability to remain in compliance with covenants over the next year.
Absent a significant improvement in earnings, the company's
capital structure may become unsustainable over the longer-term,
elevating risk of a financial restructuring.
Ratings could be downgraded if operating results further
deteriorate, or there is an increased probability of DEBT payment
defaults or restructuring of the company's debt. The ratings would
be downgraded if the likelihood of a default (in Moody's view)
were to become more certain than not.
An upgrade is unlikely in the near term given the high leverage
and weak operating performance. If the company is able to
stabilize revenue, grow operating profit and cash flow
significantly, leading to a lower debt-to-EBITDA sustained below
7.0x and EBIT-to-interest expense greater than 1.0x, a positive
rating action could be considered.
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.
Colt Defense LLC, headquartered in West Hartford, CT, manufactures
small arms weapons systems for individual soldiers and law
enforcement personnel for the U.S. military, U.S. law enforcement
agencies, and foreign militaries. Post the July 2013 acquisition
of New Colt Holding Corp., the parent company of Colt's
MANUFACTURING COMPANY, the company also has direct access to the
commercial end-market for rifles, carbines and handguns. Revenues
for the last twelve months ended June 30, 2014 totaled $243
million.
CONVERSION CONSULTING: Case Summary & 9 Top Unsecured Creditors
---------------------------------------------------------------
Debtor: Conversion Consulting LLC
now known as Flip Services DBA Bounce and Flip
766 Tenth Avenue
New York, NY 10019
Case No.: 14-12748
Chapter 11 Petition Date: September 29, 2014
Court: United States Bankruptcy Court
Southern District of New York (Manhattan)
Judge: Hon. Martin Glenn
Debtor's Counsel: Rachel S. Blumenfeld, Esq.
LAW OFFICES OF RACHEL S. BLUMENFELD
26 Court Street, Suite 2220
Brooklyn, NY 11242
Tel: (718) 858-9600
Fax: (718) 858-9601
Email: rblmnf@aol.com
Total Assets: $84,210
Total Liabilities: $1.17 million
The petition was signed by Edward Matthews, managing member.
A list of the Debtor's nine largest unsecured creditors is
available for free at http://bankrupt.com/misc/nysb14-12748.pdf
CRUMBS BAKE SHOP: In-House Branded Cupcakes Can Stay in Stores
--------------------------------------------------------------
Sara Randazzo, writing for The Wall Street Journal, reported that
U.S. Bankruptcy Judge Michael Kaplan in New Jersey allowed Coastal
Foods Baking, a commercial bakery that provides cupcakes to Crumbs
Bake Shops, to fill the two new cupcake orders but said any
further production must wait until Coastal and Crumbs' purchasers,
Marcus Lemonis and Fischer Enterprises, come to a solution
regarding Coastal's licensing agreement. According to the report,
the purchasers sent Coastal a cease-and-desist letter to prevent
it from fulfilling new orders for Crumbs-branded baked goods. In
response, Coastal went to court saying it will have to destroy the
food product and eat $45,850 in costs if Lemonis-Fischer doesn?t
back down.
About Crumbs Bake Shop
Crumbs Bake Shop, Inc., and 22 of its affiliates filed separate
Chapter 11 bankruptcy petitions (Bankr. D. N.J. Lead Case No. 14-
24287) on July 11, 2014. John D. Ireland signed the petitions as
chief financial officer. Crumbs Bake Shop estimated assets of $10
million to $50 million and the same range of liabilities.
Cole, Schotz, Meisel, Forman & Leonard, P.A., acts as the Debtors'
counsel. Prime Clerk LLC is the Debtors' claims and noticing
agent. Judge Michael B. Kaplan oversees the jointly administered
cases.
The U.S. Trustee appointed three creditors to serve in the
Official Committee of Unsecured Creditors. Sharon L. Levine,
Esq., at Lowenstein Sandler LLP serves as Committee's counsel.
* * *
On July 7, 2014, the Board of Directors of Crumbs Bake Shop
determined to cease operations effective immediately. The Board's
determination was made after the Company lacked sufficient
liquidity to maintain current operations.
On the petition date, Crumbs entered into an Asset Purchase
Agreement through which Lemonis Fischer Acquisition Company, LLC,
a joint venture created by Marcus Lemonis LLC and Fischer
Enterprises, L.L.C., will acquire the Crumbs' business as part of
the Company's Chapter 11 filing. Lemonis Fischer Acquisition is
represented by Louis Price, Esq., at McAfee & Taft PC.
CSN HOUSTON: Plan Confirmation Trial to Begin Oct. 6
----------------------------------------------------
David Barron, writing for the Houston Chronicle, reported that
testimony in the Chapter 11 bankruptcy case involving Houston
Regional Sports Network has been postponed from Oct. 2, to Oct. 6.
The report said Bankruptcy Judge Marvin Isgur approved the move
Thursday at the request of attorneys, who continue to work on
depositions and evidence discovery in the court dispute involving
the Astros-Rockets-Comcast partnership that owns CSN Houston.
A bankruptcy-exit plan has been filed for CSN Houston that would
see the network being sold to DirecTV Sports Networks and AT&T,
which will rebrand it as Root Sports Houston and make it available
on DirecTV and AT&T U-verse in addition to Comcast Xfiinty cable.
The report recounted that if the Plan is confirmed by the
bankruptcy judge, the teams, who support the plan, and Comcast,
who opposes it, will lose their equity in the network, which at
one point was valued at $700 million. AT&T and DirecTV will
receive the channel for a nominal payment of $1,000 with no liens
attached, and will pay the teams rights fees while providing the
expanded carriage that has eluded the CSN Houston partnership.
The plan also calls for 96 of the 141 CSN Houston employees to be
laid off. If it is not approved, according to attorneys for the
network, the network will be liquidated and all employees will
lose their jobs, the report added.
Attorneys will meet by telephone Oct. 2 to discuss witness lists,
arguments and scheduling for the hearing to begin Oct. 6.
About Houston Regional Sports Network
An involuntary Chapter 11 bankruptcy petition was filed against
Houston Regional Sports Network, L.P. d/b/a Comcast SportsNet
Houston (Bankr. S.D. Tex. Case No. 13-35998) on Sept. 27, 2013.
The involuntary filing was launched by three units of Comcast/NBC
Universal and a television-related company. The petitioners are:
Houston SportsNet Finance LLC, Comcast Sports Management Services
LLC, National Digital Television Center LLC, and Comcast SportsNet
California, LLC.
The petitioning creditors have filed papers asking the Bankruptcy
Judge to appoint an independent Chapter 11 trustee "to conduct a
fair and open auction process for the Network's business assets on
a going concern basis."
Houston Regional Sports Network is a joint enterprise among
affiliates of the Houston Astros baseball team, the Houston
Rockets basketball team, and Houston SportsNet Holdings, LLC --
"Comcast Owner" -- an affiliate of Comcast Corporation. The
Network has three limited partners -- Comcast Owner, Rockets
Partner, L.P., and Astros HRSN LP Holdings LLC. The primary
purpose of Houston Regional Sports Network is to create and
operate a regional sports programming service that produces,
exhibits, and distributes sports programming on a full-time basis,
including live Astros and Rockets games within the league-
permitted local territories.
Counsel for the petitioning creditors are Howard M. Shapiro, Esq.,
at Wilmer Cutler Pickering Hale and Dorr LLP; George W. Shuster,
Jr., Esq., at Wilmer Cutler Pickering Hale and Dorr LLP; Vincent
P. Slusher, Esq., at DLA Piper; and Arthur J. Burke, Esq., at
Davis Polk & Wardwell LLP.
Judge Marvin Isgur presides over the case.
The Network was officially placed into Chapter 11 bankruptcy
pursuant to a Feb. 7 Order for Relief. It has won approval to
hire Haynes and Boone, Charles A. Beckham, Jr., Esq., Henry
Flores, Esq., Abigail Ottmers, Esq., and Christopher L. Castillo,
Esq., as counsel. It also hired Conway MacKenzie, Inc., as
financial advisor.
Harry Perrin, Esq., represents Astros owner Jim Crane. Alan
Gover, Esq., represents the Rockets.
The Astros are represented by Richard B. Drubel, Esq., Colleen A.
Harrison, Esq., and Jonathan R. Voegele, Esq., at Boies, Schiller
& Flexner LLP, in Hanover, NH; and Scott E. Gant, Esq., at Boies,
Schiller & Flexner in Washington, DC. Comcast Corporation and
NBCUniversal Media, LLC, are represented by Vincent P. Slusher,
Esq., Eli Burriss, Esq., Andrew Mayo, Esq., and Andrew Zollinger,
Esq., at DLA Piper; Arthur J. Burke, Esq., Timothy Graulich, Esq.,
and Dana M. Seshens, Esq., at Davis Polk & Wardwell LLP; and
Howard M. Shapiro, Esq., and Craig Goldblatt, Esq., at Wilmer
Cutler Pickering Hale and Dorr LLP. Attorney for McLane
Champions, LLC and R. Drayton McLane, Jr., are Wayne Fisher, Esq.,
at Fisher Boyd & Huguenard, LLP.
CSN HOUSTON: Wants Already-Paid Creditors Blocked From Voting
-------------------------------------------------------------
David Barron, writing for the Houston Chronicle, reported that
lawyers for Houston Regional Sports Network has asked the
Bankruptcy Court to bar about 100 creditors owed about $860,000
from voting on the Plan of reorganization because they have
already received their money and, thus, are no longer creditors.
Most creditors had until Thursday, Sept. 25, to vote on the Plan.
Comcast had until Sept. 29 to vote.
The report also noted that former Astros owner Drayton McLane, who
is a creditor in the bankruptcy case because of a provision in his
2011 agreement selling the team to Jim Crane, said he supports the
reorganization even though it will make it more difficult for him
to recover his claim and could require him to pay his own legal
fees in his court dispute with Crane's Houston Baseball Partners
ownership group.
According to the report, McLane wrote in a submission to the
Chronicle that was slated to appear on the Sept. 26 op-ed page of
the newspaper: "I voted to approve the plan because it represents
the best and maybe only option to revive the network so more
people can watch games. I am hopeful that will happen."
About Houston Regional Sports Network
An involuntary Chapter 11 bankruptcy petition was filed against
Houston Regional Sports Network, L.P. d/b/a Comcast SportsNet
Houston (Bankr. S.D. Tex. Case No. 13-35998) on Sept. 27, 2013.
The involuntary filing was launched by three units of Comcast/NBC
Universal and a television-related company. The petitioners are:
Houston SportsNet Finance LLC, Comcast Sports Management Services
LLC, National Digital Television Center LLC, and Comcast SportsNet
California, LLC.
The petitioning creditors have filed papers asking the Bankruptcy
Judge to appoint an independent Chapter 11 trustee "to conduct a
fair and open auction process for the Network's business assets on
a going concern basis."
Houston Regional Sports Network is a joint enterprise among
affiliates of the Houston Astros baseball team, the Houston
Rockets basketball team, and Houston SportsNet Holdings, LLC --
"Comcast Owner" -- an affiliate of Comcast Corporation. The
Network has three limited partners -- Comcast Owner, Rockets
Partner, L.P., and Astros HRSN LP Holdings LLC. The primary
purpose of Houston Regional Sports Network is to create and
operate a regional sports programming service that produces,
exhibits, and distributes sports programming on a full-time basis,
including live Astros and Rockets games within the league-
permitted local territories.
Counsel for the petitioning creditors are Howard M. Shapiro, Esq.,
at Wilmer Cutler Pickering Hale and Dorr LLP; George W. Shuster,
Jr., Esq., at Wilmer Cutler Pickering Hale and Dorr LLP; Vincent
P. Slusher, Esq., at DLA Piper; and Arthur J. Burke, Esq., at
Davis Polk & Wardwell LLP.
Judge Marvin Isgur presides over the case.
The Network was officially placed into Chapter 11 bankruptcy
pursuant to a Feb. 7 Order for Relief. It has won approval to
hire Haynes and Boone, Charles A. Beckham, Jr., Esq., Henry
Flores, Esq., Abigail Ottmers, Esq., and Christopher L. Castillo,
Esq., as counsel. It also hired Conway MacKenzie, Inc., as
financial advisor.
Harry Perrin, Esq., represents Astros owner Jim Crane. Alan
Gover, Esq., represents the Rockets.
The Astros are represented by Richard B. Drubel, Esq., Colleen A.
Harrison, Esq., and Jonathan R. Voegele, Esq., at Boies, Schiller
& Flexner LLP, in Hanover, NH; and Scott E. Gant, Esq., at Boies,
Schiller & Flexner in Washington, DC. Comcast Corporation and
NBCUniversal Media, LLC, are represented by Vincent P. Slusher,
Esq., Eli Burriss, Esq., Andrew Mayo, Esq., and Andrew Zollinger,
Esq., at DLA Piper; Arthur J. Burke, Esq., Timothy Graulich, Esq.,
and Dana M. Seshens, Esq., at Davis Polk & Wardwell LLP; and
Howard M. Shapiro, Esq., and Craig Goldblatt, Esq., at Wilmer
Cutler Pickering Hale and Dorr LLP. Attorney for McLane
Champions, LLC and R. Drayton McLane, Jr., are Wayne Fisher, Esq.,
at Fisher Boyd & Huguenard, LLP.
CSN HOUSTON: Postpetition Debt Now Totals $103MM
------------------------------------------------
David Barron, writing for the Houston Chronicle, reported that,
according to the most recent operating report filed with the
court, CSN Houston since entering bankruptcy in September last
year, has shown a net loss of $92.2 million, with revenue of $38.7
million, other income and depreciation of $14.3 million and
operating expenses of $116 million. Total post-petition
liabilities now stand at $103 million.
About Houston Regional Sports Network
An involuntary Chapter 11 bankruptcy petition was filed against
Houston Regional Sports Network, L.P. d/b/a Comcast SportsNet
Houston (Bankr. S.D. Tex. Case No. 13-35998) on Sept. 27, 2013.
The involuntary filing was launched by three units of Comcast/NBC
Universal and a television-related company. The petitioners are:
Houston SportsNet Finance LLC, Comcast Sports Management Services
LLC, National Digital Television Center LLC, and Comcast SportsNet
California, LLC.
The petitioning creditors have filed papers asking the Bankruptcy
Judge to appoint an independent Chapter 11 trustee "to conduct a
fair and open auction process for the Network's business assets on
a going concern basis."
Houston Regional Sports Network is a joint enterprise among
affiliates of the Houston Astros baseball team, the Houston
Rockets basketball team, and Houston SportsNet Holdings, LLC --
"Comcast Owner" -- an affiliate of Comcast Corporation. The
Network has three limited partners -- Comcast Owner, Rockets
Partner, L.P., and Astros HRSN LP Holdings LLC. The primary
purpose of Houston Regional Sports Network is to create and
operate a regional sports programming service that produces,
exhibits, and distributes sports programming on a full-time basis,
including live Astros and Rockets games within the league-
permitted local territories.
Counsel for the petitioning creditors are Howard M. Shapiro, Esq.,
at Wilmer Cutler Pickering Hale and Dorr LLP; George W. Shuster,
Jr., Esq., at Wilmer Cutler Pickering Hale and Dorr LLP; Vincent
P. Slusher, Esq., at DLA Piper; and Arthur J. Burke, Esq., at
Davis Polk & Wardwell LLP.
Judge Marvin Isgur presides over the case.
The Network was officially placed into Chapter 11 bankruptcy
pursuant to a Feb. 7 Order for Relief. It has won approval to
hire Haynes and Boone, Charles A. Beckham, Jr., Esq., Henry
Flores, Esq., Abigail Ottmers, Esq., and Christopher L. Castillo,
Esq., as counsel. It also hired Conway MacKenzie, Inc., as
financial advisor.
Harry Perrin, Esq., represents Astros owner Jim Crane. Alan
Gover, Esq., represents the Rockets.
The Astros are represented by Richard B. Drubel, Esq., Colleen A.
Harrison, Esq., and Jonathan R. Voegele, Esq., at Boies, Schiller
& Flexner LLP, in Hanover, NH; and Scott E. Gant, Esq., at Boies,
Schiller & Flexner in Washington, DC. Comcast Corporation and
NBCUniversal Media, LLC, are represented by Vincent P. Slusher,
Esq., Eli Burriss, Esq., Andrew Mayo, Esq., and Andrew Zollinger,
Esq., at DLA Piper; Arthur J. Burke, Esq., Timothy Graulich, Esq.,
and Dana M. Seshens, Esq., at Davis Polk & Wardwell LLP; and
Howard M. Shapiro, Esq., and Craig Goldblatt, Esq., at Wilmer
Cutler Pickering Hale and Dorr LLP. Attorney for McLane
Champions, LLC and R. Drayton McLane, Jr., are Wayne Fisher, Esq.,
at Fisher Boyd & Huguenard, LLP.
CYCLONE URANIUM: Posts $110K Net Loss in July 31 Quarter
--------------------------------------------------------
Cyclone Uranium Corporation filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q, disclosing
a net loss of $110,841 for the three months ended July 31, 2014,
compared to a net loss of $224,722 for the same period last year.
The Company's balance sheet at July 31, 2014, showed $1.45 million
in total assets, $1.64 million in total liabilities and total
stockholders' deficit of $194,667.
The Company has an accumulated deficit of $21.72 million and has a
working capital deficit of $1.59 million at July 31, 2014. The
Company has no current revenue producing operations and is in
default on its $300,000, $150,000 and $35,000 notes payable.
These conditions raise substantial doubt about the Company's
ability to continue as a going concern.
A copy of the Form 10-Q is available at:
http://is.gd/vJYmwZ
Cyclone Uranium Corporation, a junior mineral exploration company,
locates, acquires, explores, improves, leases, and develops
mineral properties. It holds a 100% interest in uranium
properties, which comprise approximately 965 federal claims
covering 19,300 acres and 7 State leases covering 3,600 acres in
Wyoming; and 31 federal lode claims covering 620 acres in Arizona.
The company was formerly known as Fischer-Watt Gold Company, Inc.
and changed its name to Cyclone Uranium Corporation in December
2012. Cyclone Uranium Corporation was founded in 1986 and is
headquartered in Denver, Colorado.
DELIA*S INC: Explores Strategic Alternatives
--------------------------------------------
Stephanie Gleason, writing for Daily Bankruptcy Review, reported
that teen retailer Delia's Inc. announced that its exploring
strategic alternatives after earlier this month saying it could
run short on liquidity during the next year. According to the
report, the company, best known for catalogs that were hugely
popular among teenage girls in the 1990s, said that after
receiving inquiries from potential acquirers, Delia's decided to
evaluate the possibility of a sale or merger of its company. Debt
and equity financings are also on the table, it said, the report
related.
As previously reported by The Troubled Company Reporter, citing
Lisa Allen and Jamie Mason, of The Deal, DELiA*s' turnaround
efforts have taken on a new urgency since the retailer expects to
run out of liquidity to meet its cash requirements during the next
12 months, leading some sources to predict bankruptcy for the
company while others hold out hope that a buyer will come to its
rescue.
dELiA*s, Inc. operates dELiA*s, lifestyle brand catering to
teenage girls. New York-based dELiA*s offers dresses, shoes,
accessories and more at its 101 retail stores in the United
States.
DETROIT, MI: City Council Votes to Keep Emergency Manager
---------------------------------------------------------
Bill Rochelle and Sherri Toub, bankruptcy columnists for Bloomberg
News, reported that the Detroit city council has voted to keep
emergency manager Kevyn Orr in his office until the city's debt-
adjustment plan is approved by the bankruptcy court and
implemented. According to the Bloomberg report, removing Orr
entirely when his 18-month term ended on Sept. 27 would have meant
default on a $275 million financing.
Bloomberg recalled that Orr was appointed by the governor and
largely supplanted Detroit's mayor and city council. Bloomberg
also noted that the Detroit city council has profoundly changed in
bankruptcy as it has initially wanted to oust Orr but was found
negotiating for the continuance of his service.
About City of Detroit, Michigan
The City of Detroit, Michigan, weighed down by more than
$18 billion in accrued obligations, sought municipal bankruptcy
protection on July 18, 2013, by filing a voluntary Chapter 9
petition (Bankr. E.D. Mich. Case No. 13-53846). Detroit estimated
more than $1 billion in both assets and debts.
Kevyn Orr, who was appointed in March 2013 as Detroit's emergency
manager, signed the petition. Detroit is represented by
lawyers at Jones Day and Miller Canfield Paddock and Stone PLC.
Michigan Governor Rick Snyder authorized the bankruptcy filing.
The filing makes Detroit the largest American city to seek
bankruptcy, in terms of population and the size of the debts and
liabilities involved.
The City's $18 billion in debt includes $5.85 billion in special
revenue obligations, $6.4 billion in post-employment benefits,
$3.5 billion for underfunded pensions, $1.13 billion on secured
and unsecured general obligations, and $1.43 billion on pension-
related debt, according to a court filing. Debt service consumes
42.5 percent of revenue. The city has 100,000 creditors and
20,000 retirees.
The Hon. Steven Rhodes oversees the bankruptcy case. Detroit is
represented by David G. Heiman, Esq., and Heather Lennox, Esq., at
Jones Day, in Cleveland, Ohio; Bruce Bennett, Esq., at Jones Day,
in Los Angeles, California; and Jonathan S. Green, Esq., and
Stephen S. LaPlante, Esq., at Miller Canfield Paddock and Stone
PLC, in Detroit, Michigan.
Sharon Levine, Esq., at Lowenstein Sandler LLP, is representing
the American Federation of State, County and Municipal Employees
and the International Union.
Babette Ceccotti, Esq., at Cohen, Weiss & Simon LLP, is
representing the United Automobile, Aerospace and Agricultural
Implement Workers of America.
A nine-member official committee of retired workers was appointed
in the case. The Retirees' Committee is represented by Dentons US
LLP. Lazard Freres & Co. LLC serves as the Retiree Committee's
financial advisor.
* * *
Standard & Poor's Ratings Services, on Sept. 5, 2014, raised its
ratings on five bond CUSIPs of Detroit's outstanding sewerage
disposal and water supply revenue bonds to 'BBB+' from 'D' as S&P
indicated it would do in its report dated Aug. 28, 2014. The
outlook is stable.
DETROIT, MI: Wilmington Trust, Retirees Oppose 7th Amended Plan
---------------------------------------------------------------
Wilmington Trust, N.A. asked U.S. Bankruptcy Judge Steven Rhodes
to deny the latest version of Detroit's proposed plan to adjust
its debts.
In a court filing, Wilmington Trust criticized Detroit's final
settlement with bond insurer Syncora Guarantee Inc. over claims
that could have held up the city's timely exit from bankruptcy
protection.
Wilmington wanted the city to clarify that the settlement won't
impact other holders of certificates of participation issued by
the Detroit Retirement Systems Funding Trust.
Wilmington also complained that the settlement doesn't comport
with the terms of the funding trust agreements and other contracts
regarding the flow of funds and the overall distribution scheme.
Detroit's latest plan also drew flak from a group of retirees who
aren't convinced the plan is feasible. The group is represented
by Jamie Fields, Esq.
The city on Sept. 16 filed a seventh amended plan, which includes
the terms of its settlement with Syncora.
Under the deal, Syncora agreed to support court approval of the
debt adjustment plan and the dismissal of all lawsuits pending
between the bond insurer and the city. The settlement also
requires the city to pay $5 million to Syncora to resolve the bond
insurer's claims under certain swap agreements.
Detroit lawyer, Heather Lennox, Esq., at Jones Day, in Cleveland,
Ohio, said there is no need to re-solicit votes for the plan since
the latest amendments won't affect creditors.
According to the plan, the latest amendments provide improved
treatment to creditors holding Class 9 claims through the addition
of a settlement option more favorable to them than that offered in
the old version of the plan.
Meanwhile, creditors holding claims in Classes 7, 12 and 14 will
receive improved treatment since the settlement makes sure that
those creditors will receive a distribution of additional
unsecured bonds from Detroit when the city officially exits
bankruptcy.
A full-text copy of the 7th amended plan is available without
charge at http://is.gd/R0keST
In a related development, Judge Rhodes overruled more than 80
objections filed by retired employees to the older versions of the
plan, saying they were filed after the July 11 deadline.
Wilmington Trust is represented by:
Kristin K. Going, Esq.
Heath D. Rosenblat, Esq.
Drinker Biddle & Reath LLP
1177 Avenue of the Americas, 41st Floor
New York, New York 10036-2714
Tel: (212) 248-3140
Email: Kristin.Going@dbr.com
Heath.Rosenblat@dbr.com
The retirees are represented by:
Jamie S. Fields, Esq.
Attorney-at-Law
555 Brush #2409
Detroit, Michigan 48226
Tel: 313-570-3906
About City of Detroit, Michigan
The City of Detroit, Michigan, weighed down by more than
$18 billion in accrued obligations, sought municipal bankruptcy
protection on July 18, 2013, by filing a voluntary Chapter 9
petition (Bankr. E.D. Mich. Case No. 13-53846). Detroit estimated
more than $1 billion in both assets and debts.
Kevyn Orr, who was appointed in March 2013 as Detroit's emergency
manager, signed the petition. Detroit is represented by
lawyers at Jones Day and Miller Canfield Paddock and Stone PLC.
Michigan Governor Rick Snyder authorized the bankruptcy filing.
The filing makes Detroit the largest American city to seek
bankruptcy, in terms of population and the size of the debts and
liabilities involved.
The City's $18 billion in debt includes $5.85 billion in special
revenue obligations, $6.4 billion in post-employment benefits,
$3.5 billion for underfunded pensions, $1.13 billion on secured
and unsecured general obligations, and $1.43 billion on pension-
related debt, according to a court filing. Debt service consumes
42.5 percent of revenue. The city has 100,000 creditors and
20,000 retirees.
The Hon. Steven Rhodes oversees the bankruptcy case. Detroit is
represented by David G. Heiman, Esq., and Heather Lennox, Esq., at
Jones Day, in Cleveland, Ohio; Bruce Bennett, Esq., at Jones Day,
in Los Angeles, California; and Jonathan S. Green, Esq., and
Stephen S. LaPlante, Esq., at Miller Canfield Paddock and Stone
PLC, in Detroit, Michigan.
Sharon Levine, Esq., at Lowenstein Sandler LLP, is representing
the American Federation of State, County and Municipal Employees
and the International Union.
Babette Ceccotti, Esq., at Cohen, Weiss & Simon LLP, is
representing the United Automobile, Aerospace and Agricultural
Implement Workers of America.
A nine-member official committee of retired workers was appointed
in the case. The Retirees' Committee is represented by Dentons US
LLP. Lazard Freres & Co. LLC serves as the Retiree Committee's
financial advisor.
* * *
Standard & Poor's Ratings Services, on Sept. 5, 2014, raised its
ratings on five bond CUSIPs of Detroit's outstanding sewerage
disposal and water supply revenue bonds to 'BBB+' from 'D' as S&P
indicated it would do in its report dated Aug. 28, 2014. The
outlook is stable.
DEWEY & LEBOEUF: Former Exec Can't Shake $9 Million Suit
--------------------------------------------------------
Sara Randazzo, writing for The Wall Street Journal, reported that
a bankruptcy judge shut down an attempt by a former Dewey &
LeBoeuf LLP executive to dismiss a lawsuit claiming he owes the
defunct firm's creditors $9.3 million. According to the report,
U.S. Bankruptcy Judge Martin Glenn in Manhattan took issue with
every defense Mr. D'Allesandro raised, saying the allegations
suggest that the transactions between the defunct law firm and the
executive may not have been made at arm's length.
DIGITAL DOMAIN: Unlikely to Keep Bulk of $20-Mil. Tax Credit
------------------------------------------------------------
Law360 reported that a Delaware bankruptcy judge said that the
bulk of the $20 million in Florida tax credits "Titanic" special
effects company Digital Domain Media Group Inc. applied for is
unlikely to remain part of the debtor's estate, but it might have
a shot at preserving roughly $2 million worth. According to the
report, at a hearing in Wilmington, U.S. Bankruptcy Judge Brendan
L. Shannon, without making any rulings, acknowledged that the
official committee of unsecured creditors' bid to preserve a large
portion of $2 million in tax credits associated with the
production of an unfinished film project with the working title
"Sphere in Sphere" could be teed up for a court fight.
About Digital Domain
Port St. Lucie, Florida-based Digital Domain Media Group, Inc. --
http://www.digitaldomain.com/-- engaged in the creation of
original content animation feature films, and development of
computer-generated imagery for feature films and trans-media
advertising primarily in the United States.
Digital Domain Media Group, Inc. and 13 affiliates sought
Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-12568) on
Sept. 11, 2012, to sell its business for $15 million to
Searchlight Capital Partners LP, subject to higher and better
offers. The Company disclosed assets of $205 million and
liabilities totaling $214 million.
The Debtors also have sought ancillary relief in Canada, pursuant
to the Companies' Creditors Arrangement Act in the Supreme Court
of British Columbia, Vancouver Registry.
Attorneys at Pachulski Stang Ziehl & Jones serve as counsel to the
Debtors. FTI Consulting, Inc.'s Michael Katzenstein is the chief
restructuring officer. Kurtzman Carson Consultants LLC is the
claims and notice agent. An official committee of unsecured
creditors appointed in the case is represented by lawyers at
Sullivan Hazeltine Allinson LLC and Brown Rudnick LLP.
At a bankruptcy auction, the principal part of the business was
purchased by a joint venture between Galloping Horse America LLC,
an affiliate of Beijing Galloping Horse Co., and an affiliate of
Reliance Capital Ltd., based in Mumbai. The $36.7 million total
value of the contact includes $3.6 million to cure defaults on
contracts and $2.9 million in reimbursement of payroll costs. As
the result of a settlement negotiated by the unsecured creditors'
committee with secured lenders, there will be some recovery for
the committee's constituency.
DOMUM LOCIS: Receiver Hires Epss & Coulson as Bankr. Counsel
------------------------------------------------------------
Robert C. Warren III, the State Court Receiver and Custodian of
the bankruptcy estate of Domum Locis LLC, seeks authorization from
the Hon. Robert N. Kwan of the U.S. Bankruptcy Court for the
Central District of California to employ Epps & Coulson, LLP as
custodian's legal counsel, nunc pro tunc to Sept. 12, 2014.
The Custodian seeks to employ Epps & Coulson to provide advice on
matters relating to bankruptcy law and otherwise assist and
represent him with the discharge of his duties as receiver and
custodian of the Debtor's estate and in connection with any and
all proceedings in this bankruptcy case.
Epps & Coulson will be paid at these hourly rates:
Dawn M. Coulson $450
Jeffrey A. Cohen $350
Attorneys $275-$450
Paralegal $195-$210
Epps & Coulson will also be reimbursed for reasonable out-of-
pocket expenses incurred.
Dawn M. Coulson, partner of Epps & Coulson, 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.
Epps & Coulson can be reached at:
Dawn M. Coulson, Esq.
EPPS & COULSON, LLP
707 Wilshire Blvd., Suite 3000
Los Angeles, CA 90017
Tel: (213) 929-2390
Fax: (213) 929-2394
E-mail: dcoulson@eppscoulson.com
About Domum Locis
Domum Locis LLC filed a Chapter 11 bankruptcy petition (Bankr.
C.D. Calif. Case No. 14-23301) on July 11, 2014. Michael J.
Kilroy signed the petition as managing member. The Debtor
estimated assets and liabilities of at least $10 million. Cypress
LLP serves as the Debtor's counsel. Judge Robert N. Kwan presides
over the case.
EADGEAR INC: Faces SEC Charges Over Alleged Pyramid Scheme
----------------------------------------------------------
The Securities and Exchange Commission has announced charges
against the operators of an international pyramid scheme that
raised more than $129 million from investors worldwide, primarily
in the U.S., China, and Taiwan. The case follows another against
a separate pyramid scheme that lured investors in the U.S., China,
and Korea with seminars, webinars, and YouTube videos.
The newest case, filed in federal court in San Francisco, charges
Hong Kong-based eAdGear Holdings Limited and California-based
eAdGear, Inc., along with operators Charles S. Wang and Qian Cathy
Zhang, of Warren, N.J., and Francis Y. Yuen, of Dublin, Calif.
According to the SEC complaint, even though eAdGear claimed to be
a successful Internet marketing company, nearly all of its revenue
was generated by investors, not its products or services.
The complaint alleges that eAdGear's operators used money from new
investors to pay earlier investors as well as to repay a personal
loan and purchase million-dollar homes for themselves. It alleges
the operators concealed and perpetuated the scheme by displaying
sham websites on eAdGear's own site to make it appear as if it had
real, paying customers and manipulated revenue distributions to
investors to appear profitable.
"eAdGear and its operators falsely claimed that they were running
a profitable Internet marketing company when in reality, they were
operating a Ponzi and pyramid scheme that preyed on Chinese
communities and caused investors to lose millions of dollars,"
said Jina L. Choi, director of the SEC's San Francisco Regional
Office.
The eAdGear case follows one filed in federal court in Georgia
against Zhunrize Inc. and CEO Jeff Pan for allegedly defrauding
investors of more than $105 million since 2012. Despite its
claims to be a legitimate multi-level marketing company, Zhunrize
derived most of its funds from selling memberships, not products,
according to the SEC complaint.
"Zhunrize claimed to offer investors the opportunity to be an 'e-
commerce Business Owner' selling products to customers through a
website. In fact, it was a pyramid and 'profits' came from fees
paid by later investors," said William Hicks, associate regional
director of the SEC's Atlanta Regional Office.
In both cases, the courts granted the SEC's request for an asset
freeze and issued a temporary restraining order. In the case of
eAdGear, that order bars the defendants from soliciting investors,
including through websites they have used until now ?
www.eadgear.com, www.eadgear.net, www.winteam777.com, and
www.winteam168.com. A court hearing has been scheduled for
October 10.
Jessica W. Chan, John A. Roscigno, and Jason M. Habermeyer of the
SEC's San Francisco Regional Office conducted the eAdGear
investigation. Erin E. Schneider and Cary S. Robnett supervised
the investigation. Ms. Chan and Susan F. LaMarca will lead the
SEC's litigation. The SEC appreciates the assistance of the
United States Attorney's Office for the Northern District of
California and the Federal Bureau of Investigation. It also
appreciates the assistance of the Hong Kong Securities and Futures
Commission, the China Securities Regulatory Commission, the
Ontario Securities Commission, and the Financial Conduct Authority
in the United Kingdom.
Michael E. Mashburn and Kristin Wilhelm of the SEC's Atlanta
Regional Office conducted the Zhunrize investigation, supervised
by Peter J. Diskin. Ms. Wilhelm is leading the SEC's litigation.
EDGENET INC: Has Until Nov. 13 to File Chapter 11 Plan
------------------------------------------------------
Judge Brendan L. Shannon of the U.S. Bankruptcy Court for the
District of Delaware extended the period in which El Wind Down,
Inc., f/k/a Edgenet Inc., and its debtor affiliates have exclusive
right to file a plan through and including Nov. 13, 2014. The
period in which the Debtors have the exclusive right to solicit
acceptances of the plan is extended through and including Jan. 9,
2015.
The Debtors said in court papers that the additional time will
allow for the resolution of the issue of Ernest Han-ping Wu's
alleged security interest and address other pressing issues. The
Debtors initiated an adversary proceeding against Mr. Wu, the
representative of certain owners as defined the an acquisition
agreement and plan of merger among Edgenet Holding Corporation,
Edgenet Acquisition Corp., Edgenet, Inc., and certain owners of
Edgenet Inc., seeking avoidance of a preferential transfer and
avoidance of a security interest. The Debtors add that during the
additional time, they are hopeful the outcome of the Wu Adversary
will be decided, thereby providing them with the necessary
information as to how to structure any plan it may file.
About Edgenet Inc.
Edgenet, Inc., and Edgenet Holding Corp. are providers of cloud-
based content and applications that enable companies to sell more
products and services with greater ease across multiple channels
and devices. Edgenet has three business locations: Waukesha, WI,
Brentwood, TN, and its main office in Atlanta, GA.
Edgenet Inc. and Edgenet Holding filed for Chapter 11 bankruptcy
protection in Delaware (Lead Case No. 14-10066) on Jan. 14, 2014.
Edgenet Inc. estimated assets of at least $10 million and
liabilities of $100 million to $500 million.
Raymond Howard Lemisch, Esq., at Klehr Harrison Harvey Branzburg
LLP, in Wilmington, Delaware, serves as counsel to the Debtors;
Glass Ratner Advisory & Capital Group LLC is the financial
advisor; JMP Securities, LLC, is the investment banker, and Phase
Eleven Consultants, LLC, is the claims and noticing agent.
The U.S. Trustee did not form an official unsecured creditors
committee as no sufficient interest has been generated from
creditors.
Fred Marxer, Timothy Choate and Davis Carr, individuals and
holders of a segment of the promissory notes issued in 2004 that
have been referred to by Edgenet, Inc., et al., requested that the
Court issue an order appointing an official committee of Seller
Noteholders, or in the alternative, an official committee of
unsecured creditors, with members appointed from the Seller
Noteholders who agree to waive any continued security interest
arising from the Seller Notes.
Roberta A. DeAngelis, the U.S. Trustee for Region 3, appointed on
March 13, 2014, five noteholders to serve on the Official
Committee of Note Holders. In May, Bankruptcy Judge Brendan L.
Shannon denied Edgenet Inc., et al.'s motion to disband the
Noteholders Committee.
The Noteholders Committee has retained Morris James LLP's Jeffrey
R. Waxman, Esq.; and Cooley LLP's Cathey Hershcopf, Esq., and
Jeffrey L. Cohen, Esq., as co-counsel to the Committee.
An auction of the Debtors' assets was held on June 6, 2014, and
EdgeAQ, L.L.C., was declared the successful bidder. The
Bankruptcy Court approved the sale on June 12, and the sale closed
on June 16. Edgenet Inc. changed its name to El Wind Down, Inc.,
and Edgenet Holding Corporation to EHC Holding Wind Down Corp.
ELIZABETH ARDEN: S&P Lowers CCR to 'B+' & Removes From Watch Neg.
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on New York-based beauty company Elizabeth Arden Inc. to
'B+' from 'BB-' and removed the rating from CreditWatch, where S&P
had placed it with negative implications on Aug. 29, 2014. The
outlook is negative.
At the same time, S&P lowered the issue-level rating on the
company's senior unsecured notes due 2021 to 'B+' from 'BB-' and
removed the rating from CreditWatch with negative implications.
The recovery rating remains '4', indicating S&P's expectation for
average (30% to 50%) recovery for unsecured debt holders in the
event of a payment default.
"We are lowering our ratings on Elizabeth Arden to reflect the
company's weaker-than-expected operating performance, which
resulted in deteriorated credit metrics during the fiscal year
ended June 30, 2014," said Standard & Poor's credit analyst
Jacqueline Hui. "Soft sales, lower replenishment from its mass
channel, and planned reduction in certain distribution channels,
combined with a highly promotional environment, lower sales in
higher margin business, and higher restructuring charges, led to
EBITDA margin declining by about 800 basis points. As a result,
we estimate adjusted leverage increased of about 18x as of fiscal
year-end 2014 compared with 3x in the prior year."
The negative outlook mainly reflects the risks related to the
company turning its operations around, and to headwinds from a
highly competitive and promotional environment, particularly
during the upcoming holiday season. These will be key determining
factors of how quickly and steadily the company improves its
margins and credit metrics over the next one to two years.
Standard & Poor's could lower the ratings on Elizabeth Arden over
the next year if it believes the company is unable to effectively
execute its strategic initiatives, if competition continues to
intensify, and if operating performance does not improve, such
that S&P's projected credit metrics do not improve and EBITDA
interest coverage remains below 2x, leverage remains above 5x, and
FFO to total debt remains below 12%. S&P could also consider a
lower rating if the company's financial policy becomes more
aggressive, perhaps as a result of its relationship with Rhone
Capital.
Alternatively, S&P could revise the outlook to stable if the
company improves profitability (perhaps through realized cost
savings from its efficiency initiatives) and credit ratios, such
that S&P believes it will sustain leverage below 5x and FFO to
total debt above 12%.
EMANUEL L. COHEN: Wants More Time to File Chapter 11 Plan
---------------------------------------------------------
Emanuel L. Cohen asks the U.S. Bankruptcy Court for the Southern
District of Florida to extend his exclusive period to file a
Chapter 11 plan for ninety days pursuant to the order shortening
time for filing proofs of claim, establishing plan and disclosure
statement filing deadlines.
The Debtor notes its current plan filing deadline will expire on
Oct. 3, 2014.
The Debtor says it is still in the process of formulating a plan.
Part of the foregoing process includes completing discovery with
the main creditor Bank Hapoalim B.M. in the hopes that the
foregoing parties will be able to make further progress towards
resolving the issues between them, the Debtor notes.
Debtor adds it will pursue its claim objections shortly. The
claims bar dates are Sept. 4, 2014 for non-governmental creditors
and Dec. 3, 2014 for governmental creditors.
Debtor further says it is paying all of his bills incurred in the
Chapter 11 as they become due. Debtor has pursued every issue of
its case in an effort to bring about resolution of the problems it
faced going into filing and the development of a confirmable plan.
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.
As reported in the Troubled Company Reporter on July 25, 2014,
the U.S. Trustee notified the Bankruptcy Court that until further
notice, it will not appoint a committee of creditors pursuant to
Section 1102 of the Bankruptcy Court.
EMANUEL L. COHEN: Amends Schedules of Assets and Liabilities
------------------------------------------------------------
Emanuel Louis Cohen filed with the U.S. Bankruptcy Court for the
Southern District of Florida an amended summary of schedules of
assets and liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $3,500,000
B. Personal Property $3,199,546
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $2,600,857
E. Creditors Holding
Unsecured Priority
Claims $0
F. Creditors Holding
Unsecured Non-Priority
Claims $11,500,641
----------- -----------
Total $6,699,546 $14,101,499
A full-text copy of the schedules is available for free
at http://is.gd/0RKsnZ
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.
As reported in the Troubled Company Reporter on July 25, 2014,
the U.S. Trustee notified the Bankruptcy Court that until further
notice, it will not appoint a committee of creditors pursuant to
Section 1102 of the Bankruptcy Court.
ENCANA CORP: Moody's Puts B2 CFR on Review for Upgrade
------------------------------------------------------
Moody's Investors Service affirmed Encana Corporation's Baa2
senior unsecured rating and P-2 commercial paper rating. The
rating outlook remains stable. At the same time, Moody's placed
Athlon Holdings LP's (Athlon Holdings) ratings on review for
upgrade, including its B2 Corporate Family Rating (CFR), B2-PD
Probability of Default Rating (PDR), and B3 senior unsecured
rating. Athlon's rating outlook was previously stable.
Encana and Athlon Energy Inc. (Athlon) have entered into a merger
agreement under which Encana will acquire 100% of the outstanding
shares of Athlon for approximately $7.1 billion, including the
assumption of $1.1 billion of Athlon debt. Encana will use $5.9
billion of its cash and proceeds from announced asset sales to
finance the cash portion of the transaction. The transaction is
expected to close before the end of 2014, subject to finalization
of merger documentation and customary closing conditions and the
approval of Athlon's shareholders.
"The proposed acquisition of Athlon significantly completes
Encana's portfolio transformation from a predominately natural gas
producer to a company that will derive about 80% of its 2015
operating cash flow from oil and natural gas liquids while
maintaining a balanced portfolio of oil and gas development
opportunities," said Terry Marshall, Moody's Senior Vice
President. "With this and other recently completed acquisitions
Encana will have completed its transition entirely from the
proceeds of asset sales while reducing debt."
On Review for Upgrade:
Issuer: Athlon Holdings LP
Probability of Default Rating, Placed on Review for Upgrade,
currently B2-PD
Speculative Grade Liquidity Rating, Placed on Review for
Upgrade, currently SGL-2
Corporate Family Rating, Placed on Review for Upgrade,
currently B2
Senior Unsecured Regular Bond/Debenture, Placed on Review for
Upgrade, currently B3(LGD5)
Outlook Actions:
Issuer: Alberta Energy Company Limited
Outlook, Remains Stable
Issuer: Athlon Holdings LP
Outlook, Changed To Rating Under Review From Stable
Issuer: Encana Corporation
Outlook, Remains Stable
Affirmations:
Issuer: Alberta Energy Company Limited
Senior Unsecured Regular Bond/Debenture, Affirmed Baa2
Issuer: Encana Corporation
Senior Unsecured Commercial Paper, Affirmed P-2
Senior Unsecured Medium-Term Note Program, Affirmed (P)Baa2
Senior Unsecured Regular Bond/Debenture, Affirmed Baa2
Ratings Rationale
Encana's Baa2 rating reflects it significant size and diversity,
with or without the proposed acquisition of Athlon, as Moody's
expects that if that acquisition doesn't occur, Encana will
reinvest its nearly $7 billion of cash into another oil-oriented
asset, resulting in a similar profile. With Athlon, Encana will
derive approximately 80% of its operating cash flow from oil (and
some NGLs), which is a significant transformation from its natural
gas focus a few years ago.
RCF/debt will improve towards 50% in 2016, although
debt/production will worsen somewhat as dry natural gas production
declines. Moody's believes the transition of the company from
natural gas to oil, focused on 4-8 main plays, is largely complete
and that Encana will be able to execute its production plans,
particularly in its two new plays of the Eagle Ford and now the
Permian.
In the absence of a guarantee from Encana, Athlon Holding's notes
will most likely be rated higher than the B3 level, but will not
equalize with Encana's Baa2 senior unsecured rating. Moody's
review of Athlon will focus on: 1) how Athlon is folded under
Encana's corporate structure, 2) whether Encana provides a direct
guarantee to Athlon's bondholders or redeems all or a portion of
Athlon's debt, 3) the implied support and ratings uplift
attributable to Encana, 4) the strategic direction of Athlon post
closing, and 5) whether competing bids for Athlon emerge. Moody's
will also assess whether the level of operational and financial
disclosure available post-closing is sufficient to maintain
Moody's separate ratings on Athlon.
Encana's liquidity is good. Moody's estimate that pro forma for
the closing of the $1.8 billion Bighorn sale to Jupiter Resources
Inc (B2 stable) and the acquisition of Athlon, Encana will have a
nominal cash balance of about $50 million and approximately $4.3
billion available under two undrawn senior unsecured credit
facilities due in June 2018: Encana has no outstanding under its
C$2.5 billion commercial paper program. Anticipated negative free
cash flow through 2015 of about $700 million can be readily
covered from Encana's committed lines. The company will be well in
compliance with its sole financial covenant and has no debt
maturities until 2017. Encana has demonstrated excellent
alternative liquidity through asset sales, with substantial
realizations since January 2011. Moody's expect the pace of
dispositions to slow considerably, but the company continues to
hold assets from which alternate liquidity could be realized.
The stable outlook reflects a degree of risk in Encana executing
its production plans in its new Eagle Ford and Permian plays. If
Encana closes on Athlon and executes its plans such that Moody's
expects RCF/D to approach 50% and the leveraged full-cycle ratio
to trend towards 2X, the rating could be upgraded. However, should
Moody's believe that RCF/D is likely to trend towards 20% or the
leveraged full cycle ratio towards 1.2X, the rating could be
downgraded.
The principal methodology used in these ratings was Global
Independent Exploration and Production Industry published in
December 2011. Other methodologies used include Loss Given Default
for Speculative-Grade Non-Financial Companies in the U.S., Canada
and EMEA published in June 2009.
Athlon Energy Inc. LP is engaged in the acquisition, exploration,
development and production of oil and gas in the Midland Basin of
West Texas.
Encana Corporation, headquartered in Calgary, Alberta is an
independent exploration and production company with primary
operations in Canada and the U.S.
ERF WIRELESS: Issues 3.2-Mil. Shares Pursuant to Conv. Notes
------------------------------------------------------------
From Sept. 13, 2014, through Sept. 26, 2014, ERF Wireless, Inc.,
issued 3,205,000 shares of common stock pursuant to Convertible
Promissory Notes, according to a regulatory filing with the U.S.
Securities and Exchange Commission. The Shares were issued at an
average of $0.035 per share. The issuance of the Shares
constitutes 30.7% of the Company's issued and outstanding shares
based on 10,436,523 shares issued and outstanding as of Sept. 12,
2014.
About ERF Wireless
Based in League City, Texas, ERF Wireless, Inc., provides secure,
high-capacity wireless products and services to a broad spectrum
of customers in primarily underserved, rural and suburban parts of
the United States.
ERF Wireless reported a net loss attributable to the Company of
$7.26 million in 2013, a net loss attributable to the Company of
$4.81 million in 2012 and a net loss attributable to the Company
of $3.37 million in 2011.
The Company's balance sheet at June 30, 2014, showed $3.59 million
in total assets, $11.69 million in total liabilities and a $8.10
million total shareholders' deficit.
EXELIS INC: Moody's Lowers Sr. Unsecured Debt Rating to Ba1
-----------------------------------------------------------
Moody's Investors Service has downgraded the senior unsecured debt
rating of Exelis, Inc. to Ba1 from Baa3, and also assigned a
Corporate Family Rating of Ba1, a Probability of Default Rating of
Ba1-PD and a Speculative Grade LIQUIDITY Rating of SGL-2. The
rating downgrade follows Business Contraction and the Vectrus
spin-off resulting in the expectation of reduced scale, breadth
and cash flow generation. The rating outlook is stable. These
actions conclude the review for downgrade opened December 17,
2013.
Ratings:
Corporate Family, assigned at Ba1
Probability of Default, assigned at Ba1-PD
$250 million global notes due 2016, to Ba1, LGD4 from Baa3
$400 million global notes due 2021, to Ba1, LGD4 from Baa3
Speculative Grade Liquidity, assigned at SGL-2
Issuer Rating, withdrawn at Baa3 under review for downgrade
Commercial Paper, to Not Prime from P-3 (to be subsequently
withdrawn)
Outlook is Stable
Ratings Rationale
The Ba1 corporate family rating reflects weaker than historic
credit metrics after several years of BUSINESS CONTRACTION for
Exelis, and the company's September 27, 2014 Vectrus spin-off.
Exelis' core revenues have been declining since 2011, as the
company has not pursued growth alternatives in a declining defense
environment. Annual revenues were $4.5 billion in 2013, down from
$5.8 billion in 2011. Pro forma for the Vectrus spin off, the
trailing annual revenue base is about $3.3 billion. Excluding
Vectrus, revenues contracted 8% in 2012, 11% in 2013 and 4%, year-
over-year in the first half 2014. Debt to EBITDA which had been
3.6x at June 30, 2014 is anticipated to reach 4.3x by the end of
2014. EBIT to interest will likely end 2014 at the mid 3x level.
The Ba1 recognizes likelihood of steadier operating performance
resulting in credit metrics consistent with other companies also
rated at the same level. Annual Free Cash Flow is likely to be in
the $100 million to $150 million range, because the dividend was
unchanged following the spin-off and required Pension
CONTRIBUTIONS will be at relatively high levels over the next few
years. Moody's expects the global defense market to annually
contract in a mid single digit percentage range for some time.
Exelis is likely to emphasize internally funded growth
initiatives, with cash flow primarily directed towards
acquisitions, capital spending and internal R&D. However, the
comparatively large pension liability and its impact on cash flows
tempers the pace at which growth can be pursued without increasing
debt. The pace of any improvement in metrics will be limited as a
result.
Following the Vectrus spin off, Moody's expects Exelis will
implement operational initiatives to improve performance as well
as raise the prominence of its C4ISR and Systems portfolio (about
$2 billion or two thirds of pro forma annual revenues). Exelis'
Information and Technical Services segment (one third of pro forma
revenues) has achieved impressive operating margin expansion over
the past few years but will probably face compression in the
future as contracts re-compete. Although revenues, excluding
Vectrus, have contracted, the backlog trend has shown greater
traction and Exelis' EBITDA margin percentage rose from the spin-
off.
The Speculative Grade Liquidity, assigned at SGL-2, denotes good
liquidity. Following the spin-off Moody's estimates that the cash
balance exceeded $400 million and no near-term DEBT maturities
exist. The cash gives capacity to cover working capital needs and
Pension Contributions without dependence on the $600 million
revolving credit facility. While good covenant headroom exists
under the revolver, the facility expires in October 2015, making
the cash balance important to the liquidity profile.
Upward rating momentum would depend on improved growth and profit
prospects leading to the expectation of EBITDA margin approaching
the high teens percent level, with higher and more predictable
Free Cash Flow, and debt to EBITDA sustained below 3x. Good
liquidity, a conservative financial policy and greater scale (such
as with annual revenues exceeding $4 billion) would probably
accompany an upgrade. Downward rating pressure would follow weaker
liquidity, debt funded acquisitions, or a material amount of
internal free cash flow being directed toward shareholder
remuneration. If by the end of 2015 debt/EBITDA continues above
4x, or EBIT to interest continues below 4.5x, the rating could
also face pressure.
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.
Exelis, Inc., provides C4ISR (Command, Control, Communications,
Computers, Intelligence, Surveillance and Reconnaissance) related
products and systems as well as information and technical services
to the military, government, and commercial customers in the U.S.
and globally. Annual revenues, pro forma for the September 2014
spin-off of Vectrus, Inc., were about $3.3 billion.
FANNIE MAE & FREDDIE MAC: FHFA Defines Profit as an Asset
---------------------------------------------------------
The Federal Housing Finance Agency is arguing that it properly
transferred Fannie Mae and Freddie Mac's future profits to the
United States Treasury in 2012 because it has the authority to
sell the GSEs' assets. FHFA does not explain how the regulated
entities' future profits fall within the accounting definition of
an asset.
This argument is buried in FHFA's Reply to Continental Western
Insurance Company's Response to FHFA's Motion to Dismiss the
insurers lawsuit challenging the so-called Third Amendment and
Sweep Agreement under which all of Federal National Mortgage
Association and Federal Home Loan Mortgage Corporation's earnings
are paid to the United States Treasury each quarter. A full-text
copy of the court filing is available at no charge at:
http://bankrupt.com/misc/14-cv-00042-0047.pdf
This characterization of Fannie and Freddie's future profits as an
asset that FHFA -- acting as the GSEs' Conservator under the
Housing and Economic Recovery Act of 2008 -- can sell is also
buried in a Motion to Dismiss lawsuits pending in the U.S.
District Court for the District of Columbia that claims:
HERA authorizes the Conservator to "transfer or sell
any asset" of the Enterprises "without any approval,
assignment, or consent." 12 U.S.C. Sec.
4617(b)(2)(G). By executing the Third Amendment, the
Conservator agreed to transfer an Enterprise asset --
potential future profits -- to Treasury in exchange
for relief from an obligation -- 10% dividends -- in
order to minimize the possibility that the Enterprises
would exhaust the Treasury commitment and thereby
maximize the possibility that the Enterprises would
survive and avoid receivership. Section 4617(f) thus
precludes judicial review of that agreement and
prevents the Court from taking any action to "restrain
or affect" that agreement.
A full-text copy of the D.C. court filing is available at
http://bankrupt.com/misc/13-cv-01025-0032.pdfat no charge.
FAIRMONT GENERAL: Alecto Health Completes Purchase of Hospital
--------------------------------------------------------------
The Associated Press reported that Alecto Healthcare Services LLC
has completed its acquisition of Fairmont General Hospital.
According to the report, the hospital is now called Fairmont
Regional Medical Center.
About Fairmont General Hospital Inc.
Fairmont General Hospital Inc. and Fairmont Physicians, Inc.,
which operate a 207-bed acute-care facility in Fairmont, West
Virginia, sought Chapter 11 bankruptcy protection (Bankr. N.D.
W.Va. Case No. 13-01054) on Sept. 3, 2013. The fourth-largest
employer in Marion County, West Virginia, filed for bankruptcy as
it looks to partner with another hospital or health system.
The Debtors are represented by Rayford K. Adams, III, Esq., and
Casey H. Howard, Esq., at Spilman Thomas & Battle, PLLC, in
Winston-Salem, North Carolina; David R. Croft, Esq., at Spilman
Thomas & Battle, PLLC, in Wheeling, West Virginia, and Michael S.
Garrison, Esq., at Spilman Thomas & Battle, PLLC, in Morgantown,
West Virginia. The Debtors' financial analyst is Gleason &
Associates, P.C. The Debtors' claims and noticing agent is Epiq
Bankruptcy Solutions. Hammond Hanlon Camp, LLC, has been engaged
as investment banker and financial advisor.
UMB Bank is represented by Nathan F. Coco, Esq., and Suzanne Jett
Trowbridge, Esq., at McDermott Will & Emery LLP.
The Committee of Unsecured Creditors is represented by Andrew
Sherman, Esq., and Boris I. Mankovetskiy, Esq., at Sills Cummis &
Gross P.C. and Kirk B. Burkley, Esq., Bernstein Burkley, P.C.
Janet Smith Holbrook, Esq., at Huddleston Bolen LLP, represents
the Committee as local counsel.
The Bankruptcy Court has named Suzanne Koenig at SAK Management
Services, LLC, as patient care ombudsman. Ms. Koenig has hired
her own firm as medical operations advisor; and Greenberg Traurig,
LLP, as her counsel.
The Debtors have scheduled $48,568,863 in total assets and
$54,774,365 in total liabilities.
FERRAIOLO CONSTRUCTION: Court Closes Chapter 11 Bankruptcy Case
---------------------------------------------------------------
The Hon. Louis H. Kornreich of the U.S. Bankruptcy Court for the
District of Maine issued a final decree closing the Chapter 11
bankruptcy case of Ferraiolo Construction Inc. effective Sept. 30,
2014, following the approval of the Debtor's final accounting.
As reported in the Troubled Company Reporter in 2013, the Debtor
obtained confirmation of its Plan of Reorganization dated June 7,
2013. A full-text copy of the Disclosure Statement, dated July
19, 2013, is available for free at http://is.gd/G6qGkB
About Ferraiolo Construction
Headquartered in Rockland, Maine, Ferraiolo Construction Inc., fka
Ferraiolo Precast, Inc., Ferraiolo Corp., and Ferraiolo Real
Estate Company, Inc., is a corporation engaged in the businesses
of road construction and commercial construction site work, sale
of asphalt and concrete products, and related businesses. It owns
multiple parcels of real estate as well as machinery and
equipment, that it uses to manufacture gravel, precast concrete
forms and other items utilized in the construction business. It
became the successor by merger with two affiliates, Ferraiolo
Precast, Inc., and Ferraiolo Corp., each of which was engaged in a
unified and integrated business enterprise with the Debtor.
The Debtor filed for Chapter 11 protection (Bankr. D. Maine
Case No. 13-10164) on March 13, 2013, in Bangor, Maine, after
the Bank of Maine sent notices telling the Debtor's customers
to send their payments to the bank. In its Petition, the Debtor
estimated $10 million to $50 million in assets and $10 million
to $50 million in debts.
Judge Louis H. Kornreich presides over the case. George J.
Marcus, Esq., at Marcus, Clegg & Mistretta, P.A., serves
as bankruptcy counsel for the Debtor. The petition was signed by
John Ferraiolo, president and treasurer.
Nathaniel R. Hull, Esq., Roger A. Clement, Jr., Esq., and
Christopher S. Lockman, Esq., at Verrill Dana, LLP, represent the
Committee.
FIRSTPLUS FINANCIAL Lucchese Assocs. Want New Trials
----------------------------------------------------
Law360 reported that four men, including two reputed associates of
the Lucchese crime syndicate, lobbied a New Jersey federal judge
for a new trial on more than 20 charges in connection with a plot
to drain $12 million from a mortgage lender, claiming the Mafia
associations tainted the outcome. According to the report, in a
71-page brief, Salvatore Pelullo requested a new trial after a
jury convicted him of 24 fraud and conspiracy charges for his
involvement in the extortionate takeover and subsequent plundering
of FirstPlus Financial Group Inc., a defunct Texas-based mortgage
lender forced into bankruptcy after its board was infiltrated
through threats of violence. Joined in the motion were three of
Pelullo's convicted co-defendents: Nicodemo "Nicky" Scarfo, a
reputed Lucchese cohort as is Pelullo, Houston-based attorney
William Maxwell and his brother, John Maxwell.
The case is U.S. v. Scarfo et al., case number 1:11-cr-00740, in
the U.S. District Court for the District of New Jersey.
About FirstPlus Financial
Based in Beaumont, Texas, FirstPlus Financial Group, Inc. (Pink
Sheets: FPFX) -- http://www.firstplusgroup.com/-- was a
diversified company that provided commercial loan, consumer
lending, residential and commercial restoration, facility
(janitorial and maintenance) services, insurance adjusting
services, construction management services and a facilities and
restoration franchise business. The Company had three direct
subsidiaries, Rutgers Investment Group, Inc., FirstPlus
Development Company and FirstPlus Enterprises, Inc. In turn,
FirstPlus Enterprises, Inc., had three of its own direct
subsidiaries, FirstPlus Restoration Co., LLC, FirstPlus Facility
Services Co., LLC and The Premier Group, LLC. FirstPlus
Restoration and FirstPlus Facility jointly owned FirstPlus
Restoration & Facility Services Company. Additionally, FirstPlus
Development had one direct subsidiary FirstPlus Acquisitions-1,
Inc.
A subsidiary of FirstPlus Financial Group -- FirstPlus Financial
Inc. -- filed for Chapter 11 bankruptcy in March 1999 before the
U.S. Bankruptcy Court for the Northern District of Texas, Dallas
Division, amid turmoil in the asset-backed securitization markets
and the lack of a reliable, committed secondary take-out source
for high LTV loans. A modified third amended reorganization plan
was confirmed in that case in April 2000.
FirstPLUS Financial Group filed for Chapter 11 protection (Bankr.
N.D. Tex. Case No. 09-33918) on June 23, 2009. Aaron Michael
Kaufman, Esq., and George H. Tarpley, Esq., at Cox Smith Matthews
Incorporated, served as counsel. The Debtor had total assets of
$15,503,125 and total debts of $4,539,063 as of June 30, 2008.
FirstPLUS Financial Group disclosed $1,264,637 in assets and
$10,347,448 in liabilities as of the Chapter 11 filing.
Matthew D. Orwig was appointed as the Chapter 11 trustee in the
Debtor's cases. He is represented by Peter A. Franklin, Esq., and
Erin K. Lovall, Esq., at Franklin Skierski Lovall Hayward LLP.
Franklin Skierski was elevated to lead counsel from local counsel
in the stead of Jo Christine Reed and SNR Denton US LLP, due to
the maternity leave of Ms. Reed. Kurtzman Carson Consultants
served as notice and balloting agent.
FULLCIRCLE REGISTRY: Launches Offering of 21-Mil. Common Shares
---------------------------------------------------------------
FullCircle Registry, Inc., filed a Form S-1 registration statement
with the U.S. Securities and Exchange Commission to register
21,000,000 shares, representing approximately 15.4% of the
Company's outstanding common stock if all shares are sold, for
sale by Kodiak Capital Group, LLC, pursuant to a Stock Purchase
Agreement. The agreement allows the Company to require Kodiak to
purchase up to $1,500,000 of its common stock.
The Company is not selling any shares of common stock in the
resale offering. The Company, therefore, will not receive any
proceeds from the sale of the shares by the selling shareholder.
The Company will, however, receive proceeds from the sale of
securities to Kodiak pursuant to Put Notices under the Stock
Purchase Agreement.
This offering will terminate on the earlier of (i) when all
21,000,000 shares are sold, (ii) when the maximum offering amount
of $1,500,000 has been achieved, or (iii) on the date which is two
years after the effective date, unless the Company terminates it
earlier.
The Company's common stock is registered under Section 12(g) of
the Securities Exchange Act of 1934 and is currently traded on the
OTC Markets Group (OTC.QB Tier) under the symbol "FLCR." The
closing price of the Company's common stock as reported on the OTC
Bulletin Board on [ ] 2014 was $[ ].
A copy of the preliminary registration statement is available at:
http://is.gd/3R1nmf
About FullCircle Registry
Shelbyville, Kentucky-based FullCircle Registry, Inc., targets the
acquisition of small profitable businesses. FullCircle Registry,
Inc., has become a holding company with three subsidiaries. They
are FullCircle Entertainment, Inc., FullCircle Insurance Agency,
Inc. and FullCircle Prescription Services, Inc. Target companies
for future acquisition are those in search of exit plans for the
owners and are intended to continue autonomous operations as
current ownership is phased out over a period of 3-5 years.
FullCircle Registry reported a net loss of $448,102 on $1.88
million of revenues for the year ended Dec. 31, 2013, as compared
with a net loss of $369,784 on $1.86 million of revenues during
the prior year.
As of June 30, 2014, the Company had $5.75 million in total
assets, $6.06 million in total liabilities and a $306,851 total
stockholders' deficit.
Rodefer Moss & Co., PLLC, in New Albany, Indiana, issued a "going
concern" qualification on the consolidated financial statements
for the year ended Dec. 31, 2013. The independent auditors noted
that FullCircle has suffered recurring losses from operations and
has a net working capital deficiency that raises substantial doubt
about the company's ability to continue as a going concern.
GAWK INC: Has $1.15-Mil. Net Loss for July 31 Quarter
-----------------------------------------------------
Gawk Incorporated filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q, disclosing a net
loss of $1.15 million on $nil of revenue for the three months
ended July 31, 2014, compared to a net loss of $5,204 on $nil of
revenue for the same period last year.
The Company's balance sheet at July 31, 2014, showed $2.69 million
in total assets, $2.34 million in total liabilities, and
stockholders' equity of $350,543.
The Company has a net loss for the six months ended July 31, 2014
of $2.21 million, an accumulated deficit of $3.74 million, cash
flows used by operating activities of $2.19 million and needs
additional cash to maintain its operations. These factors raise
substantial doubt about the Company's ability to continue as a
going concern.
A copy of the Form 10-Q is available at:
http://is.gd/3DYVUP
Gawk Incorporated, a development stage company, focuses on the
online distribution of digital content. It intends to distribute
full length feature films, television series, sports,
documentaries, and live events through its proprietary content
distribution network. The company was incorporated in 2011 and is
based in Los Angeles, California.
GENERAL CABLE: Moody's Affirms 'B2' Corporate Family Rating
-----------------------------------------------------------
Moody's Investors Service revised the Speculative Grade Liquidity
assessment of General Cable Corporation to SGL-4 from SGL-3. The
revision follows General Cable's announcement that it has
withdrawn the $250 senior unsecured notes offering announced on
September 22, 2014 due to uncertain and weak conditions in the
HIGH YIELD DEBT market. The Corporate Family Rating of B2 and
other ratings remain the same. The rating outlook is negative.
The following ratings actions were taken:
The Speculative Grade Liquidity assessment, revised to SGL-4
from SGL-3.
The following ratings remain the same:
Corporate Family Rating at B2;
Probability of Default Rating at B2-PD;
Senior Unsecured Notes due 2019 at B3 (LGD-5);
Senior Unsecured Notes due 2015 at B3 (LGD-5);
Senior Unsecured Notes due 2022 at B3 (LGD-5);
Subordinated Convertible Notes due 2029 at Caa1 (LGD-6);
The rating outlook remains negative.
Ratings Rationale
The downward revision of the Speculative Grade Liquidity
assessment to SGL-4 reflects uncertainty surrounding the company's
near-term debt maturities and Moody's view that the company's
liquidity could be challenged over the next 12 months. Moody's
primary concern stems from the 2015 unsecured notes maturity along
with the springing maturity feature imbedded in the company's
Revolving Credit Facility. The Revolving Credit Facility will
automatically become due December 31, 2014 if the 2015 unsecured
notes are not repaid OR REFINANCED within 90 days of the April
2015 maturity. The springing maturity will not be applicable if
there is at least $100 million of availability and the fixed
charge coverage ratio is not less than 1.15 to 1.00, in each case
after giving pro forma effect to the repayment of such notes.
General Cable's B2 Corporate Family Rating reflects the company's
global footprint and broad WIRE AND CABLE product offerings. These
strengths are offset by the company's leveraged capital structure
and low operating margins. Current credit metrics are consistent
with the B2 CFR; however, operating weakness persists. In
addition, Moody's views General Cable's commitment to its
shareholders as a risk to the rating. As of LTM 2Q14, adjusted
debt-to-EBITDA increased to 6.6x from 5.2x at year-end 2013.
Adjusted EBITA-to-interest coverage declined to 1.3x from 1.7x and
adjusted EBITA margin declined to 3.1% from 3.8% over the same
time period. Operating performance during 1H2014 has been impacted
by inconsistent growth in utility and infrastructure spending in
North America and Latin America, as well as ongoing regional
headwinds in Venezuela, Thailand, and Spain.
The negative rating outlook reflects lack of growth in key end
markets, uncertain details and costs associated with the
restructuring program, and the company's stated commitment to
return capital to shareholders in the face of operational
weakness, all of which could lead to weaker credit metrics than we
are currently projecting. The negative outlook also accounts for
the uncertain liquidity profile stemming from the 2015 unsecured
notes maturity along with the springing maturity feature imbedded
in the company's Revolving Credit Facility. The springing maturity
will automatically become due December 31, 2014 if, among various
requirements and thresholds, the 2015 unsecured notes are not
repaid OR REFINANCED within 90 days of the April 2015 maturity.
General Cable is expected to use its credit facility to fund the
upfront restructuring costs which puts additional pressure on
liquidity.
The rating outlook could be returned to stable if General Cable's
operating performance improves such that EBITA-to-interest expense
exceeds 2.0x and debt-to-EBITDA trends below 5.0x (all ratios
incorporate Moody's standard adjustments). A stable outlook would
also be supported by a conservative distribution policy that is
commensurate with the operating performance of the company and
supports the maintenance of stable credit metrics.
Moody's indicated the ratings could be downgraded if General Cable
fails to address its upcoming maturities or if its operating
performance remains weak, specifically if EBITA-to-interest
expense remains below 2.0x and/or debt-to-EBITDA is sustained
above 5.5x (all ratios incorporate Moody's standard adjustments).
Debt-financed acquisitions or significant shareholder-friendly
activities, such as debt-financed dividends or large share
repurchases, could also result in rating downgrades.
General Cable Corporation, headquartered in Highland Heights, KY,
is a global manufacturer of copper, aluminum and FIBER OPTICand
elector power cable products from high-voltage utility lines to
low-voltage residential application sockets. Primary end markets
served include electrical utility, electrical infrastructure, and
construction. Revenues for the 12 months ended June 27, 2014
totaled approximately $6.2 billion.
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.
GENERAL MOTORS: Creditors Say 'New' GM On Hook for Suit
-------------------------------------------------------
Joseph Checkler, writing for Daily Bankruptcy Review, reported
that creditors of "old" General Motors Corp. say "new" General
Motors Co. should be on the hook for any awards tied to a lawsuit
filed by a former GM security guard who says his supervisor helped
frame him for rape, kidnapping and robbery charges that wrongly
sent him to jail for 20 years. According to the report, in a
filing with U.S. Bankruptcy Court in Manhattan, lawyers for a
trust to recover money to creditors of old GM said that because
Roger Dean Gillispie didn't have a claim against GM until after
its 2009 sale to the U.S. government , his fight should be against
the new iteration of GM.
About Motors Liquidation
General Motors Corporation and three of its affiliates filed for
Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 09-50026) on
June 1, 2009. The Honorable Robert E. Gerber presides over the
Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin,
Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges
LLP, assist the Debtors in their restructuring efforts. Al Koch
at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as
the Chief Executive Officer for Motors Liquidation Company. GM
is also represented by Jenner & Block LLP and Honigman Miller
Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP
is providing legal advice to the GM Board of Directors. GM's
financial advisors are Morgan Stanley, Evercore Partners and the
Blackstone Group LLP. Garden City Group is the claims and notice
agent of the Debtors.
The U.S. Trustee appointed an Official Committee of Unsecured
Creditors and a separate Official Committee of Unsecured
Creditors Holding Asbestos-Related Claims. Lawyers at Kramer
Levin Naftalis & Frankel LLP served as bankruptcy counsel to the
Creditors Committee. Attorneys at Butzel Long served as counsel
on supplier contract matters. FTI Consulting Inc. served as
financial advisors to the Creditors Committee. Elihu Inselbuch,
Esq., at Caplin & Drysdale, Chartered, represented the Asbestos
Committee. Legal Analysis Systems, Inc., served as asbestos
valuation analyst.
The Bankruptcy Court entered an order confirming the Debtors'
Second Amended Joint Chapter 11 Plan on March 29, 2011. The Plan
was declared effect on March 31.
On Dec. 15, 2011, Motors Liquidation Company was dissolved. On
the Dissolution Date, pursuant to the Plan and the Motors
Liquidation Company GUC Trust Agreement, dated March 30, 2011,
between the parties thereto, the trust administrator and trustee
-- GUC Trust Administrator -- of the Motors Liquidation Company
GUC Trust, assumed responsibility for the affairs of and certain
claims against MLC and its debtor subsidiaries that were not
concluded prior to the Dissolution Date.
* * *
The Troubled Company Reporter, on Sep. 29, 2014, reported that
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.
GENERAL MOTORS: Says Revstone Trying to Undo Deal on Canadian Sale
------------------------------------------------------------------
Law360 reported that General Motors Co. balked at Revstone
Industries LLC's request to have $6 million held in escrow from
the sale of the equity in a Canadian unit released to the
bankruptcy estate, arguing the move would unravel a settlement
with the auto giant that allowed the transaction to close.
According to the report, in a motion before the Delaware
bankruptcy court, GM says the defunct auto parts conglomerate is
doing an about-face from the agreement it struck with the auto
giant in June in order to complete the $13 million sale of its
equity stake in Wallaceburg Canada Inc. -- parent of Ontario-based
Aarkel Tool and Die Inc. -- to private equity firm Zynik Capital
Corp.
About Motors Liquidation
General Motors Corporation and three of its affiliates filed for
Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 09-50026) on
June 1, 2009. The Honorable Robert E. Gerber presides over the
Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin,
Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges
LLP, assist the Debtors in their restructuring efforts. Al Koch
at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as
the Chief Executive Officer for Motors Liquidation Company. GM
is also represented by Jenner & Block LLP and Honigman Miller
Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP
is providing legal advice to the GM Board of Directors. GM's
financial advisors are Morgan Stanley, Evercore Partners and the
Blackstone Group LLP. Garden City Group is the claims and notice
agent of the Debtors.
The U.S. Trustee appointed an Official Committee of Unsecured
Creditors and a separate Official Committee of Unsecured
Creditors Holding Asbestos-Related Claims. Lawyers at Kramer
Levin Naftalis & Frankel LLP served as bankruptcy counsel to the
Creditors Committee. Attorneys at Butzel Long served as counsel
on supplier contract matters. FTI Consulting Inc. served as
financial advisors to the Creditors Committee. Elihu Inselbuch,
Esq., at Caplin & Drysdale, Chartered, represented the Asbestos
Committee. Legal Analysis Systems, Inc., served as asbestos
valuation analyst.
The Bankruptcy Court entered an order confirming the Debtors'
Second Amended Joint Chapter 11 Plan on March 29, 2011. The Plan
was declared effect on March 31.
On Dec. 15, 2011, Motors Liquidation Company was dissolved. On
the Dissolution Date, pursuant to the Plan and the Motors
Liquidation Company GUC Trust Agreement, dated March 30, 2011,
between the parties thereto, the trust administrator and trustee
-- GUC Trust Administrator -- of the Motors Liquidation Company
GUC Trust, assumed responsibility for the affairs of and certain
claims against MLC and its debtor subsidiaries that were not
concluded prior to the Dissolution Date.
* * *
The Troubled Company Reporter, on Sep. 29, 2014, reported that
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.
GEOMET INC: Preferred Shares to be Delisted From Nasdaq
-------------------------------------------------------
GeoMet, Inc., disclosed with the U.S. Securities and Exchange
Commission that it received a notification letter from the Listing
Qualifications Staff of The NASDAQ Stock Market LLC advising the
Company that the Staff believes that the Company is a "public
shell" and that the continued listing of its Series A Convertible
Redeemable Preferred Stock (NASDAQ: GMETP) is no longer warranted.
The Staff believes that the Company no longer has an operating
business and, as a result, purchasers of the Preferred Stock do
not know definitely what the operating business of the Company
will be in the future. Therefore, in accordance with Nasdaq
Listing Rule 5101, the Staff has determined to apply more
stringent criteria for the continued listing of the Preferred
Stock. Accordingly, unless the Company requests an appeal of the
Staff's determination, the trading of the Preferred Stock will be
suspended at the opening of business on Oct. 2, 2014, and the
Preferred Stock will be removed from listing and registration on
NASDAQ.
After consideration of various factors that it considers relevant
and significant, the Company has determined that it does not
intend to take any action to appeal the Staff's decision.
About Geomet Inc.
Houston, Texas-based GeoMet, Inc., is an independent energy
company primarily engaged in the exploration for and development
and production of natural gas from coal seams (coalbed methane)
and non-conventional shallow gas. Its principal operations and
producing properties are located in the Cahaba and Black Warrior
Basins in Alabama and the central Appalachian Basin in Virginia
and West Virginia. It also owns additional coalbed methane and
oil and gas development rights, principally in Alabama, Virginia,
West Virginia, and British Columbia. As of March 31, 2012, it
owns a total of 192,000 net acres of coalbed methane and oil and
gas development rights.
As of June 30, 2014, the Company had $27.95 million in total
assets, $3.96 million in total liabilities and $45.90 million in
series A convertible redeemable preferred stock and a $21.92
million total stockholders' deficit.
Hein & Associates LLP, in Houston, Texas, issued a "going concern"
qualification on the consolidated financial statements for the
year ended Dec. 31, 2013. The independent auditors noted that the
Company has suffered recurring losses from operations and has a
net working capital deficiency that raise substantial doubt about
the Company's ability to continue as a going concern.
GETTY PETROLEUM: Trustee Strikes $1.4M Deal With AIG
----------------------------------------------------
Law360 reported that AIG will pay Getty Petroleum Marketing Inc.'s
bankruptcy trustee $1.4 million to settle a claim over how much of
more than $10 million in collateral for insurance policies is owed
back, the parties announced, after a filing with a New York
bankruptcy court. The report related that according to the
filing, Getty Petroleum has always said that the $10.4 million of
collateral being held by AIG for general corporate insurance and
"claims made" environmental insurance policies was too much.
About Getty Petroleum
A remnant of J. Paul Getty's oil empire, Getty Petroleum Marketing
markets gasoline, hydraulic fluids, and lubricating oils through
a network of gas stations owned and operated by franchise holders.
A former subsidiary of Russian oil giant LUKOIL, the company
operates in the Mid-Atlantic and Northeastern US states. Getty
Petroleum Marketing's primary asset is the more than 800 gas
stations in the Mid-Atlantic states which are located on
properties owned by Getty Realty. After scaling back the
company's operations to cut debt, in 2011 LUKOIL sold Getty
Petroleum Marketing to investment firm Cambridge Petroleum Holding
for an undisclosed price.
Getty Petroleum and three affiliates filed for Chapter 11
bankruptcy (Bankr. S.D.N.Y. Case Nos. 11-15606 to 11-15609) on
Dec. 5, 2011. Judge Shelley C. Chapman presides over the case.
Loring I. Fenton, Esq., John H. Bae, Esq., Kaitlin R. Walsh, Esq.,
and Michael J. Schrader, Esq., at Greenberg Traurig, LLP, in New
York, N.Y., serve as the Debtors' counsel. Ross, Rosenthal &
Company, LLP, serves as accountants for the Debtors. Getty
Petroleum Marketing, Inc., disclosed $46.6 million in assets and
$316.8 million in liabilities as of the Petition Date. The
petition was signed by Bjorn Q. Aaserod, chief executive officer
and chairman of the board.
The Official Committee of Unsecured Creditors is represented by
Wilmer Cutler Pickering Hale and Dorr LLP. Alvarez & Marsal North
America, LLC, serves as the Committee's financial advisors.
GILES-JORDAN: Galveston Shores Challenges Reorganization Plan
-------------------------------------------------------------
Galveston Shores, L.P., objected to the First Proposed Disclosure
Statement and to the Plan of Reorganization of Giles-Jordan, Inc.,
Debtors, saying the Plan proposes to subordinate the over secured
first lien holder of the Debtor's only asset to allow the Debtor,
which has yet to earn a single penny of income in its existence,
to incur an additional $2.5 million of debt. The Disclosure
attempts to justify this subordination by asserting that by filing
a subdivision plat on the Debtors' only asset, 39.16 acres of
unimproved beach front property, the Debtors have added $8 million
additional value to the property.
The Plan, as disclosed, makes no provision for any periodic
payment to unsecured creditors and presupposes that the Debtor
will accomplish in 18 months what no one has done with this
property in at least 30 years, Galveston Shores said. That is, to
construct subdivision improvements and utilities and then sell and
close on the approximately 52 lots in the subdivision. During this
time, even though the first lien holder, Galveston Shores is
presently oversecured, no adequate protection payments will be
made and the first lien holder will be transformed into an
undersecured second lienholder by virtue of this new "exit
financing."
Galveston Shores said all of these promises are based on bald
assertions without any substantive documentation, budgets, cash
flow or other financial foundation which normally would be
provided creditors at this stage of a bankruptcy proceeding. The
Disclosure Statement is inadequate and the Plan is inherently
unconfirmable and both must be rejected by the Court, it said.
The Debtor was organized in Texas on November 6, 2012, for the
purpose of purchasing from Galveston Shores approximately 39.16
acres of raw land on Galveston Island in Galveston, Galveston
County, Texas, for $4,000,000. The Debtor, through its
principals, paid approximately $550,000 down on the purchase.
Galveston Shores financed the sale with a loan to the Debtor in
the amount of $3,450,000 bearing interest at the rate of 10% per
annum. The Debtor said this loan would only be a bridge loan and
that it would secure permanent financing. That permanent
financing never materialized.
The promissory note became due on its own terms on December 17,
2013. It was not paid. At that point the default rate of interest,
15%, began to accrue. The Promissory Note went into default and
Galveston Shores was forced to post the property for foreclosure
scheduled for May 6, 2014, forcing the Debtor to seek bankruptcy
protection.
The actual current market value of the property is $4.7 million.
Jones & Carter, Inc., meanwhile, filed a Joinder to Galveston
Shores' Objection to the Plan and Disclosure Statement.
Prior to the Petition Date and pursuant to a contract by and
between Jones & Carter and the Debtor, Jones & Carter provided
professional services including, preparation and submission of
construction plans and U.S. Army Corps of Engineering permit
exhibits, and topographic survey work to the Debtor's project
known as The Preserve at Grand Beach, located at 13402 Stewart
Road and 230 East Beach Drive, Galveston, Galveston County, Texas
77554.
Jones & Carter says the Debtor's Disclosure Statement does not
contain adequate information and fails to satisfy the requirements
of Section 1125 of the Bankruptcy Code; and the Plan fails to meet
all of the specified requirements for confirmation under 11 U.S.C.
Sec. 1129(a) and thus, cannot be confirmed.
The Bankruptcy Court had continued until Sept. 22, 2014, at 10:00
a.m., the hearing to consider the confirmation of Giles-Jordan's
Plan of Reorganization. According to courtroom minutes for the
previous hearing on motions for relief from stay and the Plan,
parties tried to resolve the matter and requested for a
continuance of hearing.
As reported by the Troubled Company Reporter, the Debtor said that
it has a commitment from a private investor from Austin, Vince
DiMare, principal of Equity Secured Capital for a development
loan. In order for the loan to work, the current first lien
holder, Galveston Shores L.P. will subordinate to a new first lien
in favor of Equity Secured Capital. The Galveston Shores loan
will be paid its contract interest rate and provide partial
release provisions consistent with the development loan.
A copy of the Disclosure Statement is available for free at
http://bankrupt.com/misc/GILES-JORDAN_42_1ds.pdf
Attorneys for Galveston Shores:
David E. Cowen, Esq.
MCLEOD, ALEXANDER, POWEL & APFFEL, P.C.
802 Rosenberg
P.O. Box 629
Galveston, TX 77553
Tel: 281-488-7150 Ext. 134
409-763-2481 Ext. 134
Fax: 409-762-1155
Attorneys for Jones & Carter:
Joshua W. Wolfshohl, Esq.
Aaron J. Power, Esq.
PORTER HEDGES LLP
1000 Main Street, 36th Floor
Houston, TX 77002
Tel: (713) 226-6000
Fax: (713) 226-6295
About Giles-Jordan, Inc.
Giles-Jordan, Inc., filed a Chapter 11 bankruptcy petition in its
hometown in Galveston, Texas (Bankr. S.D. Tex. Case No. 14-80173)
on May 5, 2014. The Debtor disclosed $12 million in total assets
and $4.81 million in liabilities, including $3.72 million of
secured debt. Its lone asset is a 39.16-acre property at 230 East
Beach Drive, in Galveston, Texas. Galveston Shores, LP, of
Carlsbad, California, is the holder of the secured debt.
The case is assigned to Judge Letitia Z. Paul. The Debtor is
represented by Jeffrey Wells Oppel, Esq., at Oppel & Goldberg,
PLLC, in Houston, Texas.
GLOBAL GEOPHYSICAL: Tannor Objects to Exclusivity Extension Bid
---------------------------------------------------------------
BankruptcyData reported that Tannor Capital Advisors objected to
Global Geophysical Services' motion to extend the exclusivity
periods, saying the current exclusivity period has been abused.
According to the report, TCA requests that as a condition for any
extension of exclusivity, the Debtors must explain in a
supplemental filing whether its declaration showing over $280
million of enterprise value is still valid, and if not, why not,
so that all creditors understand the estates' financial situation
and value.
As previously reported by The Troubled Company Reporter, Global
Geophysical sought extension of the period within which it has the
exclusive right to file a plan of reorganization to December 23,
2014 and the exclusive period to solicit acceptances of the plan
to February 17, 2015. The Debtors said they need extension of the
exclusivity to build on the momentum that the case already have
and to bring them to proper and successful resolution.
About Global Geophysical, Autoseis et al.
Global Geophysical Services Inc., a provider of seismic data for
the oil and gas drilling industry, sought bankruptcy protection,
intending to reorganize on its own with additional capital or
explore a sale or other transaction.
Based in Missouri City, Texas, Global Geophysical disclosed assets
of $468.7 million and liabilities totaling $407.3 million as of
Sept. 30, 2013. Liabilities include $81.8 million on a secured
term loan owing to TPG Specialty Lending Inc. and Tennenbaum
Capital Partners LLC. TPG is the lenders' agent. Global also
owes $250 million on two issues of 10.5 percent senior unsecured
notes, with Bank of New York Mellon Trust Co. as indenture
trustee.
Global Geophysical and five affiliates, including Autoseis, Inc.
(lead debtor), filed Chapter 11 petitions in Corpus Christi, Texas
(Bankr. S.D. Tex. Lead Case No. 14-20130) on March 25, 2014.
The Debtors are represented by C. Luckey McDowell, Esq., Omar
Alaniz, Esq., and Ian E. Roberts, Esq., at Baker Botts, LLP, in
Dallas, Texas; and Shelby A. Jordan, Esq., and Nathanial Peter
Holzer, Esq., at Jordan, Hyden, Womble, Culbreth, & Holzer, PC in
Corpus Christi, Texas. Alvarez & Marsal serves as the Debtors'
restructuring advisors, Fox Rothschild Inc. as financial advisor,
and Prime Clerk as claims and noticing agent.
The U.S. Trustee for Region 7, has selected seven creditors to the
Official Committee of Unsecured Creditors. The Committee tapped
Greenberg Traurig, LLP as counsel; and Lazard Freres & Co. LLC and
Lazard Middle Market LLC, as financial advisors and investment
bankers.
The Ad Hoc Group of Noteholders and the DIP Lenders are
represented by Marty L. Brimmage, Jr., Esq., Charles R. Gibbs,
Esq., Michael S. Haynes, Esq., and Lacy M. Lawrence, Esq., at Akin
Gump Strauss Hauer & Feld LLP.
Prepetition secured lender TPG is represented by David M. Bennett,
Esq., Tye C. Hancock, Esq., and Joseph E. Bain, Esq., at Thompson
& Knight LLP; and Adam C. Harris, Esq., Lawrence V. Gelber, Esq.,
David M. Hillman, Esq., and Brian C. Tong, Esq., at Schulte Roth &
Zabel LLP.
GO BOLLYWOOD: Files for Chapter 11 Bankruptcy
---------------------------------------------
Go Bollywood Tampa Bay Florida Convention, LLC, filed for Chapter
11 bankruptcy (Bankr. M.D. Fla. Case No. 14-11155) on Sept. 23,
2014. Buddy D. Ford, Esq., at Buddy D. Ford, P.A., serves as the
Debtor's counsel. The Convention Center estimated under $50,000
in assets, and $10 million to $50 million in liabilities. The
petition was signed by Chetan R. Shah, managing member.
A list of the Debtor's six largest unsecured creditors is
available for free at http://bankrupt.com/misc/flmb14-11155.pdf
Go Bollywood was formed for the purpose of facilitating the IIFA
Awards coming to Tampa in the spring, according to Pam Huff,
writing for Tampa Bay Business Journal.
The Business Journal reported that the largest creditor holding an
unsecured claim is Arkarsh Kolaparth and 7M Tours for $10 million.
Orlando-based 7M Tours filed a lawsuit in April against Wizcraft,
the Mumbai-based organizers of the IIFA Awards show, and Dr. Kiran
Patel, a well-known figure in Tampa and a major backer of the
event, claiming it was owed $7 million. It is unclear the status
of that lawsuit at this time.
The report also noted that Tampa audiovisual firm AVI-SPL sued Go
Bollywood in April for $11 million, a case that was confidentially
settled, according to AVI-SPL's attorney Paul Watson.
The report said comment from Kolaparth is pending return as he is
traveling in India.
GRANITE ACQUISITION: Moody's Assigns 'B1' Corp. Family Rating
-------------------------------------------------------------
Moody's Investors Service assigned a Ba2 Corporate Family Rating
(CFR) to Granite Acquisition, Inc. In addition, Moody's assigned
a Ba2 rating to Granite's proposed issuance of approximately $1.45
billion of new first lien credit facilities, including a $125
million Revolving Credit Facility (undrawn at close), a $1,250
million First Lien Term Loan ("Term Loan B") and a $75 million
Prefunded LC Term Loan ("Term Loan C"). Moody's also assigned a B1
rating to Granite's proposed $260 million Second Lien Term Loan.
Moody's also assigned a Probability of Default Rating at Ba2-PD
and a speculative grade LIQUIDITY rating at SGL-2. The rating
outlook is stable.
The proceeds from this transaction will be used to finance the
acquisition of Wheelabrator Technologies, Inc. (WTI), a Waste-to-
Energy business, from Waste Management (Baa2 stable). Granite is
acquiring WTI for approximately $2 billion. Granite is an
indirect, wholly-owned subsidiary of Energy Capital Partners.
Ratings Rationale
The Ba2 CFR reflects Granite's stable business model, which will
produce a relatively steady cash flow. The business is supported
by a disposal segment with Waste Management with contracted waste
volumes and prices for a period of seven years. The rating also
reflects Granite's electric generation scale and diversity, with
15 WtE facilities. The rating is constrained by the age of the
generating facilities, but the plants have been well maintained,
and capital maintenance levels should be steady over the next
three to five years.
"WTI compares well with its principal peer, Covanta Holding
Corporation (Covanta, Ba2 CFR stable)," said Jairo Chung, Analyst
"similar to Covanta, WTI benefits from fuel stability through
long-term, fixed contracts but faces merchant energy risk and
market volatility. Its energy margins could improve over time when
the power market fundamentals improve. Given the age of its
facilities, Moody's believe capex and operating expenses will
creep up over time. Also, Moody's do not expect any meaningful
improvements in the market fundamentals of the disposal segment."
With respect to financial policies, the Ba2 CFR reflects a steady
capital expenditure forecast, where maintenance expenditures are
consistent for the next five years. The rating acknowledges a risk
for unexpected major maintenance due to the age of the WfE
facilities but Moody's incorporates a view that management has
indeed managed the facilities in a manner where major unexpected
capital expenditure will remain unlikely, and where the fleet
availability remains above 90%.
Granite's SGL-2 reflects Moody's expectation that WTI will
maintain good liquidity profile over the next 12 months; that WTI
will generate strong, predictable internal cash flows; that WTI
will maintain an adequate cash balance; and that WTI will have
access to committed credit facility. However, Moody's believe WTI
will have limited access to alternative sources of liquidity as
its assets are fully encumbered. Granite's positive free cash flow
and fully available external credit facility is a credit positive.
The expected covenants, while not critical, are seen as a mild
constraint because the maximum total net leverage ratio tested
when the revolver is drawn exceeds 25%. Also, Moody's believe
Granite has limited alternative liquidity as almost all of the
assets are pledged and have a limited pool of potential buyers.
The stable outlook reflects the existing long-term contracts
between WTI and its respective utilities, municipalities and other
parties will not terminate before their expiration dates and that
WTI will be successful in extending or renewing the contracts when
they expire. Although WTI has greater exposure to energy market
volatility compared to Covanta's exposure, Moody's expects WTI to
manage its business risk, including commodity risk, prudently.
Also, it reflects Moody's expectation that WTI's management will
continue to operate the facilities at a fleet availability level
above 90%.
A rating upgrade is unlikely in the near-term based on limited
opportunities to increase volume and pricing in its disposal
segment and potential increase in business risk and in cash flow
volatility in its energy segment. However, an upgrade is possible
if there are significant increases in the re-contracted volume and
pricing of waste and energy, resulting in WTI's key financial
metrics such as CFO pre-WC to DEBT and interest coverage ratios to
be above 20% and 3.6x, respectively, on a sustainable basis.
A rating downgrade is possible if WTI is unsuccessful in extending
or renewing the contracts with the utilities, municipalities and
other parties at competitive terms. A downgrade could be triggered
is the plant operations decline sharply, requiring significant
amount of unexpected capital expenditure and additional leverage.
Also, if the decline in volume and prices of waste and energy
impact WTI's key financial metrics to decline significantly, a
downgrade could be considered. For example, if CFO pre-WC to DEBT
and interest coverage ratios decline to below 12% and 1.9x,
respectively, a downgrade could be triggered.
The methodologies used in these ratings were Unregulated Utilities
and Power Companies published in August 2009. Other methodologies
used include Loss Given Default for Speculative-Grade Non-
Financial Companies in the U.S., Canada and EMEA published in June
2009.
WTI, a wholly-owned subsidiary of Granite, is the second largest
WtE facility operator in the U.S. WTI owns and operates 15 WtE
facilities, operates 4 IPP facilities and 4 ash landfills. It is
currently completing the construction of WtE facility called
Ferrybridge, a joint venture with Scottish & Southern Energy, in
the U.K.
The principal methodology used in this rating was Unregulated
Utilities and POWER COMPANIES published in August 2009. Other
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the U.S., Canada and EMEA
published in June 2009.
GRANITE ACQUISITION: S&P Assigns BB- CCR & Rates $1.25BB Loan BB-
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB-' corporate
credit rating to Granite Acquisition Inc. At the same time, S&P
assigned 'BB-' issue-level ratings and '3' recovery ratings to the
company's $1.25 billion first-lien term loan B due 2021, $125
million revolving credit facility due 2019, and $75 million term
loan C due 2021. S&P also assigned a 'B' issue-level rating and a
'6' recovery rating to Granite's $260 million second-lien term
loan due 2022. The company is using net proceeds to fund the
purchase of Wheelabrator Technologies Inc. (WTI) from Waste
Management Inc. Granite will use the $75 million term loan C as
cash collateral for letters of credit. With no other holdings,
the rating on Granite reflects WTI's credit quality. The '3'
recovery ratings indicate that lenders can expect meaningful (50%
to 70%) recovery of principal if a payment default occurs, while
the '6' recovery rating indicates lenders can expect negligible
recovery. The outlook is stable.
Granite, through its subsidiary WTI, owns and operates 15 waste-
to-energy (WTE) facilities and four independent power production
plants in the Northeast and Mid-Atlantic regions and in Florida,
California, and Washington. WTI also operates four landfill
facilities in New England and Florida. Granite is 100% owned by
U.S. private equity fund manager Energy Capital Partners. S&P's
ratings reflect WTI's "fair" business risk profile and
"aggressive" financial risk profile. S&P's assessment of the
business profile as "fair" reflects WTI's relatively small scale
and exposure to merchant energy markets, which is partially offset
by the company's well-contracted revenue base and strong operating
track record. S&P's assessment of the "aggressive" financial risk
profile reflects its expectation that funds from operations (FFO)
to total debt and total debt to EBITDA will be 11.5% and 5x
respectively in 2015, before improving to 13%-14% and 4.2x-4.4x in
2016. A mandatory 50% excess cash flow sweep supports debt
repayment and should lead to an improvement in financial measures
over time.
The stable outlook reflects S&P's expectation of fairly
predictable cash flows driven by the company's highly contracted
revenue coming from waste disposal, and the company's position in
energy markets that have established capacity markets with
visibility into future pricing. Under S&P's base case, it expects
that FFO to total debt and total debt to EBITDA will improve to
13%-14% and 4.2x-4.4x, respectively, in 2016 from 11.5% and 5x in
2015. S&P expects financial measures to continue to improve over
time as the company pays down debt with excess cash, though S&P
expects financial risk to remain in the "aggressive" category.
S&P may lower the rating if the company fails to meet its base
case forecast, resulting in debt to EBITDA being roughly 0.5x
higher than S&P's base case forecast. This could result from
operating problems, weaker-than-expected merchant energy markets,
or failure to recontract expiring waste disposal contracts at
expected price levels. A downgrade could also occur if the
company's financial policy were to become more aggressive,
reflected by increased leverage or instituting a sponsor dividend.
Any rating upgrade would require a change in the business risk
profile because the financial risk profile is capped at
"aggressive." This is unlikely in the near term, and would
require a substantial increase in scale along with a higher
portion of revenue coming from long-term contracts.
GREEN MOUNTAIN: Hires GlassRatner as Financial Advisor
------------------------------------------------------
Green Mountain Management, LLC and its debtor-affiliates seek
authorization from the U.S. Bankruptcy Court for the Northern
District of Georgia to employ GlassRatner Advisory & Capital
Group, LLC as financial advisor, nunc pro tunc to Aug. 26, 2014.
The Debtors require GlassRatner to provide the following financial
advisory services:
(a) assist the Debtors in fulfilling statutory reporting
requirements, cash flow projections associated with post-
petition financing or cash collateral budgets, cash flow
variance reports, and other reporting as required;
(b) assist the Debtors with the preparation of reports for,
and communications with, creditors and possible creditors'
committee;
(c) as needed, assist the Debtors in preparing and filing
their tax returns, and monitor and report upon tax
issues, including IRS' Claim against the Estates and any
pending tax refund for the Debtors;
(d) monitor litigation matters as needed;
(e) analyze pending claims and assist the Debtors' counsel
in the preparation of objections;
(f) assist the Debtors in the development, evaluation,
negotiation, and execution of any potential plans of
reorganization and associated disclosure statements;
(g) provide testimony at any hearings related to the chapter 11
process, including financial matters relating to a plan or
plans of reorganization, the feasibility of such
reorganization plans, and any valuation opinions rendered;
(h) oversee the Debtors' accounting functions, including
managing bookkeeping duties including review and payment
of vendor invoices, making deposits, and reconciling the
Debtors' bank statements;
(i) assist management in presenting updated business plan and
financial projections;
(j) provide recommendations for revenue enhancement, cost
reduction, or working capital management improvement; and
(k) work with the Debtors and their management to develop an
implementation plan.
As set forth in the GlassRatner Agreement and pursuant to its
terms, upon written request by the Debtors, GlassRatner may also
provide investment banking services to the Debtors, including, but
not limited to:
(a) evaluating prospects for a restructuring transaction,
including a Section 363 asset sale;
(b) manage any restructuring transaction, including a Section
363 asset sale process, that the Debtors decide to pursue;
(c) assist the Debtors in obtaining any required exit
financing;
(d) assist the Debtors, and other advisors, in preparing a
Confidential Offering Memorandum;
(e) assist in soliciting and evaluating potential parties to
one or more transactions;
(f) assist in assembling due diligence materials and managing
the review and evaluation of such materials by parties to a
potential transaction; and
(g) assist in structuring and negotiating the terms of a
potential transaction.
GlassRatner will be paid at these hourly rates:
Principal $495
Managing Director $375
Directors $325-$395
Associates $200-$325
GlassRatner will also be reimbursed for reasonable out-of-pocket
expenses incurred.
In addition to the above fees, if GlassRatner provides the
Potential Investment Banking Services at Debtors' request and
assists in the facilitation of a transaction including but not
limited to, the sale of asset(s) under 11 U.S.C. section 363,
restructuring of debt, and equity recapitalization, GlassRatner
will be entitled to a success fee equal to (i) 1% of any
transaction up to $17MM and (ii) for any amount over $17MM, 2% of
the overage, provided, however, GlassRatner shall not be entitled
to such fee if the transaction is the direct result of an equity
investment by Dan Cowart of funds not obtained from a third party.
Lee N. Katz, principal with GlassRatner, 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.
The Court for the Northern District of Georgia will hold a hearing
on the application on Oct. 15, 2014, at 11:00 a.m. Objections, if
any, are due Oct. 8, 2014.
GlassRatner can be reached at:
Lee N. Katz
GLASSRATNER ADVISORY & CAPITAL GROUP, LLC
Monarch Tower
3424 Peachtree Road, Suite 2150
Atlanta, GA 30326
Tel: (404) 835-8842
Fax: (678) 904-1991
E-mail: Lkatz@glassratner.com
Green Mountain Management, LLC, filed a Chapter 11 bankruptcy
petition (Bankr. N.D. Ga. Case No. 14-64287) on July 25, 2014.
The petition was signed by Daniel B. Cowart, sole member of
Georgia Flattop Partners, LLC, and chairman of Green Mountain
Management, LLC.
According to the docket, the Debtor's Chapter 11 plan and
disclosure statement are due Nov. 24, 2014.
The Debtor estimated $10 million to $50 million in assets and
debt. Georgia Flattop Partners, LLC is the managing member and
holders of 93% of the stock.
The case is assigned to Judge Barbara Ellis-Monro.
The Debtor is represented by Sage M. Sigler, Esq., at Alston &
Bird, LLP, in Atlanta.
GROVE ESTATES: Seeks Authority to Use Cash Collateral
-----------------------------------------------------
Grove Estates, L.P., seeks authority from the U.S. Bankruptcy
Court for the Middle District of Pennsylvania to use cash
collateral securing its prepetition indebtedness so it can meet
its operating expenses.
Susquehanna is the first position lien holder of a security
interest in the Debtor's real estate properties referred to as
"Grove Estates Subdevelopment." Susquehanna is also the first
position lien holder of a security interest in the Debtor's real
estate located at 2394 Arlington Road, in York, Pennsylvania.
Moreover, Susquehanna is the first position lien holder of a
security interest in, among other things, the Debtor's inventory,
chattel paper, accounts, accounts receivable, equipment, contract
rights, documents, deposit accounts, furniture, fixtures,
vehicles, instruments, leasehold improvements, machinery and
general intangibles.
M&T is the first position lien holder of a security interest in
the Debtor's real estate properties referred to as "Cherry Tree
Development."
The Debtor has asked the bankruptcy court to schedule the hearing
on the approval of the Cash Collateral Motion for Oct. 16, 2014.
Grove Estates, LP, an operator of land development business in
York, Pennsylvania, sought protection under Chapter 11 of the
Bankruptcy Code on Sept. 23, 2014 (Case No. 14-04368, Bankr. M.D.
Pa.). The case is assigned to Judge Robert N Opel II.
The Debtor's counsel is Robert L Knupp, Esq., at Smigel, Anderson
& Sacks, LLP, in Harrisburg, Pennsylvania. The Debtor's
accountant is Francis C. Musso, CPA, MPA, P.C.
HAYDEL PROPERTIES: Court Denies Trustee's Plea to Dismiss Case
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Mississippi
denied the fourth request filed by Henry G. Hobbs, Jr., United
States Trustee for Region 5, to dismiss the Chapter 11 case
of Haydel Properties LP or convert the case to a Chapter 7
liquidation proceeding because the Debtor is delinquent in
filing its monthly operating reports.
As reported in the Troubled Company Reporter on Aug. 26, 2014,
the US Trustee stated, pursuant to Section 1112(b), grounds for
cause exist to convert the case to a Chapter 7 proceeding or
dismiss the case include, but not limited to:
a) failure to comply with an order of the Court; and
b) Failure to file monthly operating reports.
The US Trustee reserved the right to provide additional grounds
for cause to convert or to dismiss this case at any hearing on
this matter.
About Haydel Properties LP
Haydel Properties LP, based in Biloxi, Mississippi, filed for
Chapter 11 bankruptcy (Bankr. S.D. Miss. Case No. 12-50048) on
Jan. 11, 2012. Judge Katharine M. Samson presides over the case.
Christy Pickering serves as accountant. The Debtor disclosed
$11.7 million in assets and $6.8 million in liabilities as of the
Chapter 11 filing.
The Debtor is represented by Robert Gambrell, Esq., at Gambrell &
Associates, PLLC, and Patrick A. Sheehan, at Sheehan & Johnson,
PLLC.
The Debtor won confirmation of its First Amended Plan of
Reorganization. The Plan was conceived by management as an
alternative to the more drastic measures available for
restructuring the Company's debt, such as total liquidation of
equipment and properties. The Debtor will continue to operate the
rental business and market numerous parcels of real property.
HEALTHWAREHOUSE.COM INC: Mark Scott Reports 12.3% Equity Stake
--------------------------------------------------------------
In a Schedule 13G filed with the U.S. Securities and Exchange
Commission, Mark Douglas Scott and his affiliates disclosed that
as of Aug. 21, 2014, they beneficially owned 4,509,933 shares of
common stock of HealthWarehouse.com, Inc., representing 12.3
percent of the shares outstanding.
Mr. Scott is the president, sole stockholder and a director of
Cormag Holdings, Ltd., and the president, 50% stockholder and a
director of M&K Holdings, Ltd. Mr. Scott's spouse is the
president, sole shareholder and a director or Conchar Holdings,
Ltd. Accordingly, the shares of common stock owned by Cormag, M&K
and Conchar may be deemed to be beneficially owned by Mr. Scott.
A copy of the regulatory filing is available for free at:
http://is.gd/Ej8OBv
About HealthWarehouse.com
HealthWarehouse.com, Inc., headquartered in Florence, Kentucky,
is a U.S. licensed virtual retail pharmacy ("VRP") and healthcare
e-commerce company that sells brand name and generic prescription
drugs as well as over-the-counter ("OTC") medical products.
Marcum LLP, in New York, issued a "going concern" qualification on
the consolidated financial statements for the year ended Dec. 31,
2012, citing significant losses and the need to raise additional
funds to meet the Company's obligations and sustain its
operations.
The Company reported a net loss of $5.57 million on $11.08 million
of net sales for the year ended Dec. 31, 2012, as compared with a
net loss of $5.71 million on $10.36 million of net sales during
the prior year. As of June 30, 2014, the Company had $1.02
million in total assets, $5.50 million in total liabilities and a
$4.48 million total stockholders' deficit.
HEDWIN CORPORATION: Gets Approval to Award SMR Fee Enhancement
--------------------------------------------------------------
Hedwin Corp. received approval from U.S. Bankruptcy Judge Nancy
Alquist to pay Shared Management Resources, Ltd. a fee enhancement
in the amount of $200,000. Shared Management's managing director,
Charles Deutchman, serves as Hedwin's chief restructuring officer.
About Hedwin Corporation
Founded in 1946, Hedwin Corporation is a manufacturer of
customized industrial plastic packaging, which it sells to
wholesalers and distributors throughout the United States, Canada
and Europe. Its manufacturing facility is located at 1600 Roland
Heights Avenue, Baltimore, Maryland. It has a warehouse facility
at 1700 West 41st Street, Baltimore, Maryland and a warehouse and
assembly facility at 9175 Moya Blvd. (Unit D), Reno, Nevada. All
of the facilities are leased.
As of the fiscal year end Dec. 31, 2013, the Debtor had total
assets of approximately $15 million.
Hedwin filed a Chapter 11 bankruptcy petition (Bankr. D. Md. Case
No. 14-151940) in Maryland on April 2, 2014, to sell its assets to
Fujimori Kogyo Co., Ltd., absent higher and better offers.
The Debtor is represented by Alan M. Grochal, Esq., Stephen M.
Goldberg, Esq., and Catherine K. Hopkin, Esq., at Tydings &
Rosenberg, LLP, in Baltimore, Maryland. Shared Management
Resources, Ltd.'s Charles S. Deutchman serves as chief
restructuring officer.
The U.S. Trustee for Region 4 appointed seven creditors to serve
on the official committee of unsecured creditors.
* * *
At an auction held in May 2014, Fujimori Kogyo Co. ended up the
successful bidder for Hedwin Corp., although an auction forced it
to pay 36% more for the Baltimore maker of industrial packaging.
In a deal reached before the bankruptcy filing, Fujimori agreed to
pay $16.5 million and retain all workers. During the auction,
Interplast Group Inc. offered $22 million, but Fujimori won with a
$22.2 million bid that included its $600,000 breakup fee and
$250,000 in expense reimbursement. Judge Alquist on May 12
approved the sale to Fujimori. The sale was scheduled to close by
the end of May.
INSIGHT PHARMACEUTICALS: S&P Withdraws 'B' CCR over Prestige Deal
-----------------------------------------------------------------
Standard & Poor's Ratings Services withdrew all ratings on Insight
Pharmaceuticals LLC, including the 'B' corporate credit rating on
the company and the 'B' issue-level rating on the company's senior
secured debt. This action follows Prestige Brands Inc.'s
completed acquisition of Insight Pharmaceuticals on Sept. 3, 2014.
INTERNATIONAL TEXTILE: Sells Unit to Asheboro Elastics for $7.4MM
-----------------------------------------------------------------
International Textile Group, Inc., completed the sale of certain
assets related to its narrow fabrics segment, including accounts
receivable, inventories, prepaid expenses, property, plant and
equipment and other miscellaneous assets of Narricot Industries
LLC, to certain subsidiaries of Asheboro Elastics Corp. pursuant
to an asset purchase agreement, dated as of Sept. 23, 2014, by and
between Narricot, the Company and AEC.
In connection with the Disposition, AEC assumed certain trade
accounts payable and accrued liabilities of Narricot. The sale
price under the agreement consisted of $4.2 million in cash and a
three-year, 6.5% promissory note of $3.2 million.
The Promissory Note provides that only interest is payable for the
six months beginning October 2014, and thereafter principal and
interest are payable in equal monthly installments through
September 2017. Amounts due under the Promissory Note are secured
by a first lien on all of the property, plant and equipment of
Narricot sold in the Disposition. The sale price is subject to a
working capital adjustment; the Company does not expect that any
such adjustment will be significant.
Because the sale of the assets and liabilities of the Narricot
Business comprised the entire business operations of Narricot, and
the Company has no significant continuing cash flows from, or
continuing involvement with, those operations, the results of
operations of Narricot will be presented as discontinued
operations in the Company's consolidated statements of operations
for all periods presented in future filings with the United States
Securities and Exchange Commission. Prior years' results of
operations will be recast to conform to the current presentation.
The Company preliminarily expects that it will record a net loss
on the Disposition in the amount of approximately $0.6 million in
the three and nine months ending Sept. 30, 2014, which will be
included in discontinued operations.
Additional information is available for free at:
http://is.gd/Q4TIen
About International Textile
International Textile Group, Inc., is a global, diversified
textile manufacturer headquartered in Greensboro, North Carolina,
with current operations principally in the United States, China,
Mexico, and Vietnam. ITG's long-term focus includes the
realization of the benefits of its global expansion, including
reaching full production at ITG facilities in China and Vietnam,
and continuing to seek other strategic growth opportunities.
International Textile reported a net loss attributable to common
stock of the Company of $10.91 million in 2013, as compared with a
net loss attributable to common stock of the Company of $91.45
million in 2012.
As of June 30, 2014, International Textile had $335.38 million in
total assets, $437.38 million in total liabilities and a $101.99
million total stockholders' deficit.
ISLET SCIENCES: Posts $464K Net Loss for July 31 Quarter
--------------------------------------------------------
Islet Sciences, Inc., filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q, disclosing a net
loss of $464,530 on $nil of revenue for the three months ended
July 31, 2014, compared with a net loss of $1.29 million on $nil
of revenue for the same period in 2013.
The Company's balance sheet at July 31, 2014, showed $3.94 million
in total assets, $3.78 million in total liabilities and total
stockholders' equity of $152,480.
Since inception, the Company has incurred operating losses of
$20.85 million. As of July 31, 2014, the Company had cash of
$457,436. Further, the Company has negative operating cash flows
of $614,121 for the three months ended July 31, 2014.
The Company's future cash requirements will depend on many
factors, including continued scientific progress in its research
and development programs, the scope and results of pre-clinical
and clinical trials, the time and costs involved in obtaining
regulatory approvals, the costs involved in filing, prosecuting
and enforcing patents, competing technological and market
developments, and the cost of product commercialization. The
Company does not expect to generate a positive cash flow from
operations at least until the commercial launch of its first
product and possibly later given the expected spending for
research and development programs and the cost of commercializing
product candidates. The Company's continued operations will
depend on its ability to raise funds through various potential
sources such as debt and equity financing. There can be no
assurance that such capital will be available on favorable terms
or at all. If the Company is unable to raise additional capital,
the Company will likely be forced to curtail its desired
development activities, which would delay the development of its
product candidates.
A copy of the Form 10-Q is available at:
http://is.gd/1hcwS3
Islet Sciences, Inc., a biotechnology company, is engaged in the
research, development, and commercialization of new medicines and
technologies for the treatment of metabolic diseases and related
indications covering unmet medical needs. The company offers ISLT-
P, an implantable suspension of encapsulated insulin-producing
porcine islet cells for the treatment of insulin-dependent
diabetes; ISLT-2669, a novel lead IL-12 small molecule inhibitor
selected for preclinical development for treatment of type 2
diabetes; and ISLT-LSF Analogs, a library of small molecule
lisofylline analogs that block inflammatory actions of cytokines,
which destroy insulin-producing beta cells for diabetes and
diabetes-related complications. It is also involved in developing
ISLT-Bdx, a PCR based molecular diagnostic measuring
hypomethylated beta cell-derived DNA as a biomarker of beta cell
loss for the early detection of type 1 diabetes or onset of
insulin dependent type 2 diabetes. In addition, the company
develops Remogliflozin, a selective SGLT2 inhibitor in Phase II
clinical development for type 2 diabetes and nonalcoholic
steatohepatitis. Islet Sciences, Inc. was founded in 2010 and is
based in Raleigh, North Carolina.
ITR CONCESSION: Objections to Dual-Track Plan Due Oct. 14
---------------------------------------------------------
Objections to the solicitation procedures, the adequacy of the
disclosure statement or confirmation of the Chapter 11 plan of ITR
Concession Company LLC and its debtor affiliates must be submitted
on or before Oct. 14, 2014, so that they can be considered by
Judge Pamela S. Hollis of the U.S. Bankruptcy Court for the
Northern District of Illinois, Eastern Division, during the Oct.
28 combined hearing on the adequacy of the disclosure statement
and confirmation of the plan.
As previously reported by The Troubled Company Reporter, the
Debtors will seek to confirm a chapter 11 plan contemplating
either (a) a sale of substantially all of the Company's assets
following a competitive auction process or (b) a comprehensive
balance-sheet restructuring. Under both transactions, all
outstanding and undisputed general unsecured claims against the
Debtors will be unimpaired and unaffected by the restructuring and
will be paid in full in cash on the effective date of the Plan or
in the ordinary course of business when such claims become due and
owing.
Recoveries by creditors and interest holders under the Plan are
projected as follows:
Estimated Estimated
Class Claims and Interests Status Amount Recovery
----- -------------------- ------ --------- ---------
1 Other Priority Claims Unimpaired $0 100%
2 Other Secured Claims Unimpaired $0 100%
3 Senior Secured Claims Impaired $6.3-Bil. 43.5%-100%
4 Gen. Unsecured Claims Unimpaired $8.0-Mil. 100%
5 Intercompany Claims Unimpaired $0 0%-100%
6 Intercompany Interests Unimpaired N/A N/A
7 Statewide Interests Impaired N/A N/A
Only holders of claims in Class 3 and interests in Class 7 were
entitled to vote on the Plan. As of the Petition Date, Kurtzman
Carson Consultants LLC, the Debtors' proposed solicitation agent,
has confirmed that the master ballot submitted by the
Administrative Agent reflecting the votes of holders of claims in
Class 3, which comprises claims on account of the Loans and Swaps,
and the ballots submitted by holders of interests in Class 7,
which comprises existing equity interests in Statewide,
demonstrate that holders of claims and interests entitled to vote
on the Plan have voted overwhelmingly to accept the Plan.
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.
ITR CONCESSION: Has Interim Authority to Use Cash Collateral
------------------------------------------------------------
Judge Pamela S. Hollis of the U.S. Bankruptcy Court for the
Northern District of Illinois, Eastern Division, gave ITR
Concession Company LLC, et al., interim authority to use cash
collateral securing their prepetition indebtedness.
The Debtors have borrowed $3,855,454,497 in the aggregate amount
under prepetition credit facilities. The Debtors were also
parties to certain secured interest rate swaps, which terminated
prior to the Petition Date. There are $2,152,524,173 in
outstanding termination obligations under the hedging agreements.
The final hearing to consider entry of the final cash collateral
order will be held on Oct. 28, 2014, at 11:00 a.m., prevailing
Central Time. Objections must be submitted no later than five
business days prior to the final hearing.
A full-text copy of the Interim Cash Collateral Order with Budget
is available at http://bankrupt.com/misc/ITRcashcolord0923.pdf
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.
ITR CONCESSION: Seeks to Employ Kirkland as Counsel
---------------------------------------------------
ITR Concession Company LLC, et al., seek authority to employ
Kirkland & Ellis LLP and Kirkland & Ellis International LLP as
attorneys.
Kirkland will render the following legal services:
(a) advising the Debtors with respect to their powers and
duties as debtors in possession in the continued management
and operation of their businesses and properties;
(b) advising and consulting on the conduct of the Chapter 11
cases, including all of the legal and administrative
requirements of operating in Chapter 11;
(c) attending meetings and negotiating with representatives of
creditors and other parties-in-interest;
(d) taking all necessary actions to protect and preserve the
Debtors' estates, including prosecuting actions on the
Debtors' behalf, defending any action commenced against the
Debtors, and representing the Debtors in negotiations
concerning litigation in which the Debtors are involved,
including objections to claims filed against the Debtors'
estates;
(e) preparing pleadings in connection with these Chapter 11
cases, including motions, applications, answers, orders,
reports, and papers necessary or otherwise beneficial to
the administration of the Debtors' estates;
(f) representing the Debtors in connection with obtaining
authority to continue using cash collateral and
postpetition financing;
(g) advising the Debtors in connection with any potential sale
of assets;
(h) appearing before the Court and any appellate courts to
represent the interests of the Debtors' estates;
(i) advising the Debtors regarding tax matters;
(j) taking any necessary action on behalf of the Debtors to
negotiate, prepare, and obtain approval of a disclosure
statement and confirmation of a Chapter 11 plan and all
documents related thereto; and
(k) performing all other necessary legal services for the
Debtors in connection with the prosecution of the
Chapter 11 cases, including:
(i) analyzing the Debtors' leases and contracts and the
assumption and assignment or rejection thereof;
(ii) analyzing the validity of liens against the Debtors;
and
(iii) advising the Debtors on corporate and litigation
matters.
K&E's hourly rates for matters related to the Chapter 11 cases
from September 21, 2013, to December 31, 2013, ranged as follows:
Partners $655-$1,150
Of Counsel $450-$1,150
Associates $430-$790
Paraprofessionals $150-$335
K&E's current hourly rates for matters related to the Chapter 11
cases range as follows:
Partners $665-$1,295
Of Counsel $415-$1,195
Associates $450-$865
Paraprofessionals $170-$355
K&E will also charge the Debtors for necessary out-of-pocket
expenses.
On July 30, 2013, the Debtors paid $250,000 to K&E as a classic
retainer. The Debtors subsequently increased the classic retainer
to $500,000 on October 23, 2013; $1 million on May 23, 2014; and
$6.5 million on July 1, 2014. A balance of approximately $6.11
million remained as of the Petition Date.
Marc Kieselstein, Esq., the president of Marc Kieselstein, P.C., a
partner of Kirkland & Ellis LLP, and a partner of Kirkland & Ellis
International LLP, assures the Court that his firm is a
"disinterested person" as the term is defined in Section 101(14)
of the Bankruptcy Code and does not represent any interest adverse
to the Debtors and their estates.
Pursuant to the U.S. Trustee Guidelines, Mr. Kieselstein said K&E
and the Debtors have not agreed to any variations from, or
alternatives to, K&E's standard billing arrangements for the
engagement. He adds that the rate structure provided by K&E is
appropriate and is not significantly different from (a) the rates
that K&E charges for other non-bankruptcy representations or (b)
the rates of other comparably skilled professionals. Moreover,
Mr. Kieselstein said the hourly rates used by K&E in representing
the Debtors are consistent with the rates that K&E charges other
comparable chapter 11 clients, regardless of the location of the
chapter 11 case.
A hearing on the application will take place on Oct. 28, 2014, at
11:00 a.m. (prevailing Central Time). Objections are due Oct. 14.
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.
ITR CONCESSION: Has Until Oct. 31 to File Schedules
---------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Illinois,
Eastern Division, gave ITR Concession Company LLC, et al., until
Oct. 31, 2014, to file their schedules of assets and liabilities
and statements of financial affairs.
On Sept. 22, the Debtors filed their Schedule F (Creditors Holding
Unsecured Nonpriority Claims) disclosing that each of the Debtor
has no unsecured creditor. The Court has allowed the Debtors to
file modified Schedules F.
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.
J.C. PENNEY: Moody's Affirms 'Caa1' Corporate Family Rating
-----------------------------------------------------------
Moody's Investors Service affirmed J.C. Penney Company, Inc.'s
Caa1 Corporate Family Rating, Caa1 - PD Probability of Default
Rating, and senior unsecured notes. At the same time, Moody's
changed J.C. Penney's rating outlook to stable from negative. The
change in outlook was prompted by the successful closing of $400
million senior unsecured notes which will be used to fund the
partial tender offer for J.C. Penney's $200 million 6.875% notes
due October 2015, $200 million 7.675% notes due August 2016, and
$285 million 7.95% notes due April 2017. At the same time, Moody's
changed the Speculative Grade Liquidity rating to SGL-2 from SGL-3
due to improved operating performance and extension of the debt
maturity schedule.
The following ratings are changed:
Speculative Grade Liquidity rating to SGL-2 from SGL-3
The following ratings are affirmed:
For J.C. Penney Company, Inc.
Corporate Family Rating at Caa1
Probability of Default Rating at Caa1-PD
For J.C. Penney Corporation, Inc.
$1.85 billion asset based revolving credit facility due June
2019 at B1 - LGD 2
$500 million asset based "first in last out" term loan due June
2019 at B2 - LGD 2
$2.2 billion term loan due 2018 at B2 - LGD 2
Senior unsecured notes at Caa2 -LGD 5
Senior unsecured shelf at (P) Caa2
Ratings Rationale
The change in outlook reflects the successful completion of $400
million senior unsecured notes which will be used to fund the
partial tender offer for J.C. Penney's $200 million 6.875% notes
due October 2015, $200 million 7.675% notes due August 2016, and
$285 million 7.95% notes due April 2017. Given the partial tender
offer for the $200 million notes due 2015, Moody's expects J.C.
Penney to carry additional excess cash to address the remaining
$60 million unsecured notes due 2015. Moody's views this financing
as a credit positive event as it will push out J.C. Penney's 2015
maturities and a portion of their 2016 and 2017 debt maturities.
Given the successful refinancing Moody's has also upgraded J.C.
Penney's Speculative Grade Liquidity rating to SGL-2 acknowledging
the elimination of a near dated debt maturity.
Although J.C. Penney sales and gross margins have notably improved
in 2014, its profitability and credit metrics remain very weak.
Further improvement in earnings is required for J.C. Penney to
have a sustainable capital structure. J.C. Penney's Caa1 Corporate
Family Rating reflects Moody's belief that J. C. Penney will
continue to generate operating losses over the next twelve to
eighteen months but that the level of operating losses will abate
further. The rating also incorporates the significant weakness in
J.C. Penney's credit metrics. The rating is supported by J.C.
Penney's good liquidity which provides it with time to grow both
sales, gross margins, and free cash flow. Given J.C. Penney's
reduced level of capital expenditures, better inventory
management, and strengthened performance, Moody's estimate that
J.C. Penney will likely burn less than $50 million of free cash
flow under Moody's base case scenario. Under a downside scenario
there is the potential for it to burn close to $250 million in
free cash flow. Moody's believe J.C. Penney's $847 million in
available cash at August 2, 2014 and its $1.85 billion asset based
credit facility provide it with good liquidity which supports the
potential range of free cash flow burn.
The stable rating outlook acknowledges J.C. Penney's good
liquidity and lack of near dated debt maturities which provides
the company with the time to address its operating losses.
Given the significant weakness is credit metrics, an upgrade is
unlikely at the present time. Over time, ratings could be upgraded
should earnings improve such that it becomes likely that debt to
EBITDA will remain below 7.25 times and EBITA to interest expense
approaches 1.0 time.
Ratings could be downgraded should J.C. Penney's liquidity erode,
should its sales and earnings not continue to evidence signs
improvement, or should the overall probability of default
increase.
The principal methodology used in this rating was Global Retail
Industry published in June, 2011. Other methodologies used include
Loss Given Default for Speculative-Grade Non-Financial Companies
in the U.S., Canada and EMEA published in June 2009.
J.C. Penney Company, Inc. is a U.S. department store operator with
about 1,100 locations in the United States and Puerto Rico. It
also operates a website, www.jcp.com. Revenues are over $12
billion.
JOHN DAVIS TRUCKING: Case Summary & 20 Top Unsecured Creditors
--------------------------------------------------------------
Debtor: John Davis Trucking Company, Inc.
Po Box 457
Battle Mountain, NV 89820-0457
Case No.: 14-51643
Chapter 11 Petition Date: September 29, 2014
Court: United States Bankruptcy Court
District of Nevada (Reno)
Judge: Hon. Bruce T. Beesley
Debtor's Counsel: Jeffrey L Hartman, Esq.
HARTMAN & HARTMAN
510 West Plumb Lane, Ste B
Reno, NV 89509
Tel: (775) 324-2800
Fax: (775) 324-1818
Email: notices@bankruptcyreno.com
Total Assets: $5.71 million
Total Liabilities: $5.64 million
The petition was signed by Shane Davis, president.
A list of the Debtor's 20 largest unsecured creditors is available
for free at http://bankrupt.com/misc/nvb14-51643.pdf
KAHN FAMILY: Wins Court Approval of Reorganization Plan
-------------------------------------------------------
Kahn Family, LLC received bankruptcy court approval of its Chapter
11 plan of reorganization.
U.S. Bankruptcy Judge Helen Burris on Sept. 15 signed off on an
order approving the plan proposed by the company to pay back
creditors and exit bankruptcy protection.
According to Kahn Family's latest disclosure statement, payments
under the restructuring plan will be funded by the sale of its
real properties and by the conversion of certain unsecured claims
to equity in the reorganized company.
The company will also get its funding for the plan from cash
available on the effective date of the plan, and cash flow from
continuing operations.
Kahn Family on Sept. 15 also obtained a court order approving
provisions of the restructuring plan that release certain parties
from potential claims.
The U.S. trustee, the Justice Department's bankruptcy watchdog,
previously objected to the provisions, questioning whether the
releases are in compliance with the Fourth Circuit law. The
agency expressed concern the provisions would release "non-debtor
parties."
In her Sept. 15 decision, Judge Burris said the provisions "do not
purport to bar non-consenting parties from pursuing non-debtor
parties." The bankruptcy judge also said that the provisions "are
more akin to a normal release that parties execute after
negotiating a settlement."
The releases are part of the settlement agreement Kahn Family
entered into with Gibraltar BB4, LLC, the creditor that purchased
the debts of the original lender, BB&T.
Under the settlement, Gibraltar agreed to vote in favor of the
plan, withdraw its bid to appoint a bankruptcy trustee and release
potential claims against the company, Kahn Properties South LLC,
and its managing member Alan Kahn and his family.
In return, Gibraltar will receive payment of $2 million for its
claims under the plan, and another $1.25 million to be paid by the
Kahns directly to Gibraltar.
A full-text copy of Judge Burris' Sept. 15 order is available for
free at http://is.gd/NZVUw3
About Kahn Family
Kahn Family, LLC, and Kahn Properties South, LLC, filed bare-bones
Chapter 11 petitions (Bankr. D. S.C. Case Nos. 13-02354 and
13-02355) on April 22, 2013. Kahn Family disclosed $50 million to
$100 million in assets and liabilities. R. Geoffrey Levy, Esq.,
at Levy Law Firm, LLC, serves as the Debtors' counsel. David G.
Wolff, Esq., at Barnes, Alford, Stork & Johnson, LLP, is the
Debtor's special counsel. Bill Quattlebaum, CPA of Elliott Davis,
LLC, serves as its accountant.
The Debtor's Plan of Reorganization dated Dec. 20, 2013, provides
that payments and distributions under the Plan will be funded by
(1) the sale of certain of the Debtor's real property at fair
market value; (2) the transfer of certain real property of the
Debtor to Gibraltar BB4, LLC; (3) conversion of certain unsecured
claims against the Debtor to equity in the Reorganized Debtor; (4)
cash on hand on the Effective Date; and (5) cash flow from
continuing operations.
LDK SOLAR: NYSE Committee Affirms ADSs Delisting Determination
--------------------------------------------------------------
LDK Solar CO., Ltd., in provisional liquidation, and its Joint
Provisional Liquidators, Tammy Fu and Eleanor Fisher, both of
Zolfo Cooper (Cayman) Limited, announced that The NYSE Regulation,
Inc. Board of Directors' Committee for Review affirmed on
Sept. 22, 2014, the delisting decision of the staff of the NYSE
Regulation, Inc., with respect to the Company's American
depositary shares formerly listed on the New York Stock Exchange.
The NYSE Committee's decision follows a review of submissions made
by the Company and a hearing with the NYSE Committee on Sept. 9,
2014, attended by the Company and its advisors. The ADSs will
remain being quoted on the OTC Pink Limited Information until the
Company qualifies for the listing on an alternate stock exchange.
In addition, upon the application of the Company (acting by the
JPLs) and its subsidiaries, LDK Silicon & Chemical Technology Co.,
Ltd. and LDK Silicon Holding Co., Limited, by originating
summonses filed on Sept. 11, 2014, to the High Court of Hong Kong,
the Hong Kong Court made an order dated and filed on Sept. 23,
2014, to direct the Hong Kong Scheme Companies to convene the
class meetings of their creditors on Oct. 16, 2014 (starting at
8:40 p.m.), Cayman time, and Oct. 17, 2014 (starting at 9:40
a.m.), Hong Kong time, to vote on the Hong Kong schemes of
arrangement. The Hong Kong Court is currently scheduled to hear
the petition in respect of the Hong Kong schemes of arrangement on
Nov. 7, 2014, at which hearing the Hong Kong Court will determine
whether or not to sanction the Hong Kong schemes of arrangement.
Creditors of the Hong Kong Scheme Companies are invited to review
the Scheme Web site at http://ldksolar-provisionalliquidation.com
where further details of the schemes of arrangement may be found,
including details of how to vote at the meetings referred to
above, copies of the schemes of arrangement, the explanatory
statement, and the solicitation packets.
About LDK Solar
LDK Solar Co., Ltd. -- http://www.ldksolar.com-- based in Hi-
Tech Industrial Park, Xinyu City, Jiangxi Province, People's
Republic of China, is a vertically integrated manufacturer of
photovoltaic products, including high-quality and low-cost
polysilicon, solar wafers, cells, modules, systems, power
projects and solutions.
LDK Solar was incorporated in the Cayman Islands on May 1, 2006,
by LDK New Energy, a British Virgin Islands company wholly owned
by Xiaofeng Peng, LDK's founder, chairman and chief executive
officer, to acquire all of the equity interests in Jiangxi LDK
Solar from Suzhou Liouxin Industry Co., Ltd., and Liouxin
Industrial Limited.
The Company's balance sheet at June 30, 2014, showed $3.3 billion
in total assets, $5.23 billion in total liabilities and total
stockholders' deficit of $1.92 billion.
The Company had a working capital deficit and negative equity and
incurred net loss over the past years due to the overall market
decline and its financial performance. Due to the impending
maturity of its Renminbi-denominated US$-settled 10% Senior Notes
due 28 February 2014, with an aggregate principal amount of RMB
1.63 billion, the Company decided to file the appointment of
provisional liquidators in the Grand Court of Cayman Islands on 21
February 2014. Eleanor Fisher and Tammy Fu of Zolfo Cooper
(Cayman) Limited were appointed as joint provisional liquidators
of the Company on 27 February 2014. "These factors raise
substantial doubt as to our ability to continue as a going
concern," according to the Company's regulatory filing with the
SEC.
LEHMAN BROTHERS: Sues Raymond James to Recover Swap Funds
---------------------------------------------------------
Stephanie Gleason, writing for The Wall Street Journal, reported
that Lehman Brothers Holdings Inc. sued Raymond James Financial
Inc. to recover more than $2 million it says it is owed related to
an old swap agreement. According to the report, the lawsuit says
Raymond James took over Iowa Telecom's swap position in late 2008
and "took charge of the process . . . in order to gain a much
larger financial advantage that would leave Iowa Telecom
unaffected?but would directly deprive Lehman of the value of the
terminated interest rate swap."
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)
LEXARIA CORP: Reports $576K Net Loss in July 31 Quarter
-------------------------------------------------------
Lexaria Corp. filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q, disclosing a net
loss of $576,367 on $135,863 of natural gas and oil revenue for
the three months ended July 31, 2014, compared with a net loss of
$57,669 on $251,481 of natural gas and oil revenue for the same
period in 2013.
The Company's balance sheet at July 31, 2014, showed $4.57 million
in total assets, $1.02 million in total liabilities, and
stockholders' equity of $3.55 million.
The Company has incurred an operating loss and required additional
funds to maintain its operations. Management's plans in this
regard are to raise equity and/or debt financing as required.
These conditions raise substantial doubt about the Company's
ability to continue as a going concern, according to the
regulatory filing.
A copy of the Form 10-Q is available at:
http://is.gd/h12xwX
Lexaria Corp. was formed on Dec. 9, 2004, under the laws of the
State of Nevada and commenced operations on Dec. 9, 2004. The
Company is an independent natural gas and oil company engaged in
the exploration, development and acquisition of oil and gas
properties in the United States and Canada. The Company's entry
into the oil and gas business began on Feb. 3, 2005. The Company
has offices in Vancouver and Kelowna, BC, Canada. Lexaria's
shares are quoted in the USA under the symbol LXRP and in Canada
under the symbol LXX.
LIFE UNIFORM: Cousins Chipman Now Known as Chipman Brown Cicero
---------------------------------------------------------------
The law firm of Cousins Chipman & Brown, LLP, counsel for LUHC
Wind Down Corp., et al., notified the Bankruptcy Court that it has
changed its name to Chipman Brown Cicero & Cole, LLP.
The firm's contact details now reflect as:
William E. Chipman, Jr., Esq.
Ann M. Kashishian, Esq.
CHIPMAN BROWN CICERO & COLE, LLP
1007 North Orange Street, Suite 1110
Wilmington, DE 19801
Tel: (302) 295-0191
Fax: (302) 295-0199
E-mails: chipman@chipmanbrown.com
kashishian@chipmanbrown.com
About Life Uniform
Life Uniform was founded in 1965 when Angelica Corporation
decided to enter the retail uniform industry. The first Life
Uniform store opened in 1965 in Clayton, Missouri. At present,
Life Uniform is the nation's largest independently owned medical
professional supplier.
Sun Uniform LLC acquired Life Uniform in July 2004. Since the
acquisition by Sun the company addressed sagging profitability
and overhead issues and quickly drove increases in profitability
through a combination of store rationalization and sensible
corporate overhead initiatives. However, recent performance has
been declining in terms of revenue. This is due to the company's
liquidity issues, which prevented the company from completing its
e-commerce system upgrade, encourage better pricing from vendors,
and maintain sufficient capital.
Life Uniform Holding Corp., Healthcare Uniform Company, Inc., and
Uniform City National Inc. filed Chapter 11 petitions (Bankr. D.
Del. Case Nos. 13-11391 to 13-11393) on May 29, 2013. The
petitions were signed by Bryan Graiff, COO, CFO, VP, secretary,
and treasurer. Life Uniform Holding disclosed $10,695,870 in
assets and $36,821,034 in liabilities as of the Chapter 11
filing.
Life Uniform and Uniform City received court authority on July 26
to sell the business for $22.6 million to Scrubs & Beyond LLC.
There were no competing bids, so an auction wasn't held.
First lien lender CapitalSource Finance LLC is owed on a $11.5
million revolver and $26 million term loan. CapitalSource is
represented by Brian T. Rice, Esq., at Brown Rudnick LLP; and
Jeffrey C. Wisler, Esq., at Connolly Gallagher LLP.
Sun Uniforms Finance LLC is owed $6.1 million in principal on a
second lien note and holds two additional notes, each in the
original principal of $1.08 million. Angelica Corp. holds an
unsecured junior subordinate not in the principal amount of $5.48
million.
Domenic E. Pacitti, Esq., at Klehr Harrison Harvey Branzburg,
LLP, serves as the Debtors' counsel. Epiq Bankruptcy Solutions
acts as the Debtors' administrative agent, and claims and noticing
agent. he Debtors' financial advisor is Capstone Advisory Group,
LLC. rowe Horwath LLP serves as tax accountants and Brown Smith
Wallace LLC as wind-down tax accountants.
Richard Stern, Esq., at Luskin Stern & Eisler LLP, was appointed
independent fee examiner in the case. Luskin, Stern & Eisler LLP
serves as his counsel and The Rosner Law Group LLC, serves as his
Delaware counsel.
The Official Committee of Unsecured Creditors is represented by
Seth Van Aalten, Esq., at Cooley LLP, and Ann M. Kashishian,
Esq., at Cousins Chipman & Brown, LLP as counsel.
The U.S Trustee for Region 3 appointed Boris Segalis of
InfoLawGroup LLP as consumer privacy ombudsman in the case.
LONGVIEW POWER: Insurer Sues to Nix $350M in Mechanics' Liens
-------------------------------------------------------------
Law360 reported that First American Title Insurance Co. launched
an adversary suit in Longview Power LLC's Chapter 11 case, aiming
to negate roughly $350 million in mechanics' liens lodged by
contractors against the bankrupt coal plant operator. According
to the report, First American's complaint seeks a declaratory
judgment that the mechanics' liens asserted by three contractors
who worked on the debtor's West Virginia coal plant do not trump
those of Longview's prepetition lenders and are invalid because
they were not properly enforced.
The adversary suit is First American Title Insurance Co. v.
Longview Power LLC et al., case number 1:14-ap-50744, in the U.S.
Bankruptcy Court for the District of Delaware.
About Longview Power LLC
Longview Power LLC is a special purpose entity created to
construct, own, and operate a 695 MW supercritical pulverized
coal-fired power plant located in Maidsville, West Virginia, just
south of the Pennsylvania border and approximately 70 miles south
of Pittsburgh. The project is owned 92% by First Reserve
Corporation (First Reserve or sponsor), a private equity firm
specializing in energy industry investments, through its affiliate
GenPower Holdings (Delaware), L.P., and 8% by minority interests.
Longview Power, LLC, filed a Chapter 11 (Bank. D. Del. Lead Case
13-12211) on Aug. 30, 2013. The petitions were signed by Jeffery
L. Keffer, the Company's chief executive officer, president,
treasurer and secretary. The Debtor estimated assets and debts of
more than $1 billion. Judge Brendan Linehan Shannon presides over
the case. Kirkland & Ellis LLP and Richards, Layton & Finger,
P.A., serve as the Debtors' counsel. Lazard Freres & Company LLC
acts as the Debtors' investment bankers. Alvarez & Marsal North
America, LLC, is the Debtors' restructuring advisors. Ernst &
Young serves as the Debtors' accountants. The Debtors' claims
agent is Donlin, Recano & Co. Inc.
The Debtor disclosed assets of $1,717,906,595 plus undisclosed
amounts and liabilities of $1,075,748,155 plus undisclosed
amounts.
Roberta A. DeAngelis, U.S. Trustee for Region 3, disclosed that as
of September 11, 2013, a committee of unsecured creditors has not
been appointed in the case due to insufficient response to the
U.S. Trustee's communication/contact for service on the committee.
MADERA ROOFING: Rutan Law Firm Can't Be Paid, Must Return Retainer
------------------------------------------------------------------
Bankruptcy Judge W. Richard Lee denied the request for
compensation filed by the law firm of Rutan & Tucker, LLP, general
counsel for the debtor Madera Roofing, Inc.
The court finds and concludes that Rutan was a prepetition
creditor of the Debtor at the time the petition was filed based on
an open account for unpaid legal services in the amount of
$15,983.28. As the holder of a prepetition claim, Rutan was a
"creditor" of the Debtor, was not disinterested within the meaning
of 11 U.S.C. Sec. 101(14)(A), and was not eligible for employment
under Sec. 327(a).
Although Rutan belatedly offered to waive its prepetition claim,
this does not change the fact that the claim was not disclosed to
the court at any time before and during Rutan's employment, Judge
Lee said. Accordingly, Rutan is not eligible for compensation
pursuant to Sec. 330 and the Fee Application will be denied.
Judge Lee also said Rutan's $50,000 retainer is property of the
bankruptcy estate. Therefore, within 14 days, Rutan shall account
for and turnover to the chapter 11 trustee the entire retainer it
was paid in connection with the bankruptcy case.
The U.S. Trustee filed an objection to the Fee Application on
numerous procedural and substantive grounds. The UST's objection
was based, inter alia, on Rutan's failure to properly disclose its
receipt and use of the Retainer, and inconsistencies in the
pleadings regarding the Retainer.
A copy of the Court's September 25, 2014 Memorandum Decision is
available at http://is.gd/oWy9Avfrom Leagle.com.
Rutan & Tucker, LLP is represented by:
Caroline R. Djang, Esq.
RUTAN & TUCKER, LLP
611 Anton Boulevard, Suite 1400
Costa Mesa, CA 92626-1931
Tel: 714-641-5100
Fax: 714-546-9035
E-mail: cdjang@rutan.com
The chapter 11 trustee, James S. Lowe, is represented by:
Riley C. Walter, Esq.
WALTER & WILHELM LAW GROUP
The Tower
205 E. River Park Circle, Suite 410
Fresno, CA 93720
Tel: 559-435-9800
Fax: 559-435-9868
Madera Roofing, Inc., filed for Chapter 11 bankruptcy (Bankr. E.D.
Cal. Case No. 13-16954) on October 25, 2013, listing under $1
million in both assets and liabilities. A copy of the petition is
available at http://bankrupt.com/misc/caeb13-16954.pdffrom
Leagle.com. The Debtor was represented by Eric J. Fromme, Esq.,
at Rutan & Tucker, LLP. Fromme later submitted a substitution of
counsel after he moved to the law firm of Jeffer Mangels Butler &
Mitchell LLP. Three weeks after the substitution was approved,
Fromme filed a motion on behalf of JMBM seeking to withdraw
completely as counsel for the Debtor. That matter was denied. JMBM
and Fromme remain the Debtor's counsel of record.
MARK OHRINER O.D.: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Mark Ohriner O.D. Ltd.
4675 West Flamingo Road
Las Vegas, NV 89103-3795
Case No.: 14-16545
Nature of Business: Health Care
Chapter 11 Petition Date: September 29, 2014
Court: United States Bankruptcy Court
District of Nevada (Las Vegas)
Judge: Hon. August B. Landis
Debtor's Counsel: Timothy S. Cory, Esq.
TIMOTHY S. CORY & ASSOCIATES
8831 W. Sahara Avenue
Las Vegas, NV 89117
Tel: (702) 388-1996
Email: tim.cory@corylaw.us
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Mark Ohriner, authorized individual.
A list of the Debtor's 20 largest unsecured creditors is available
for free at http://bankrupt.com/misc/nvb14-16545.pdf
MEDICURE INC: Has C$1.64-Mil. Net Loss for FY Ended May 31
----------------------------------------------------------
Medicure Inc. filed with the U.S. Securities and Exchange
Commission on Sept. 11, 2014, its annual report on Form 6-K for
the fiscal year ended May 31, 2014.
Ernst & Young LLP expressed substantial doubt about the Company's
ability to continue as a going concern, citing that the Medicure
has experienced losses and has accumulated a deficit of $127.52
million since incorporation and has a working capital deficiency
of $869,164 as at May 31, 2014.
The Company disclosed a net loss of C$1.64 million on C$5.05
million of net product sales for the year ended May 31, 2014,
compared with a net loss of C$2.57 million on C$2.6 million of net
product sales in 2013.
The Company's balance sheet at May 31, 2014, showed C$3.61 million
in total assets, C$9.48 million in total liabilities, and total
deficit of C$5.88 million.
A copy of the Form 6-K is available at:
http://is.gd/P2OJBw
About Medicure Inc.
Based in Winnipeg, Manitoba, Canada, Medicure Inc. (TSX/NEX:
MPH.H) -- http://www.medicure.com/-- is a biopharmaceutical
company engaged in the research, development and commercialization
of human therapeutics. The Company has rights to the commercial
product, AGGRASTAT(R) Injection (tirofiban hydrochloride) in the
United States and its territories (Puerto Rico, U.S. Virgin
Islands, and Guam). AGGRASTAT(R), a glycoprotein GP IIb/IIIa
receptor antagonist, is used for the treatment of acute coronary
syndrome (ACS) including unstable angina, which is characterized
by chest pain when one is at rest, and non-Q-wave myocardial
infarction.
METRO AFFILIATES: Obtains Order Clarifying Plan Provisions
----------------------------------------------------------
Creditors holding insured claims against Metro Affiliates Inc. do
not need to wait for their claims to be "allowed" before they
could continue litigation in a non-bankruptcy court to liquidate
their claims, according to an order signed by U.S. Bankruptcy
Judge Sean Lane.
In a two-page order, Judge Lane said that creditors holding
insured claims "may immediately proceed or continue with
litigation in non-bankruptcy courts of competent jurisdiction to
liquidate such claims for purposes of the plan."
Judge Sean Lane issued the order to clarify provisions of Metro
Affiliates' plan concerning the liquidation and allowance of
claims that are covered by the company's insurance policies.
The provisions of the plan, when taken together, could be
interpreted as requiring that an insured claim be "allowed" for
purposes of the plan before the holder of such claim could
continue litigation in a non-bankruptcy court, according to court
filings.
About Metro Affiliates
Staten Island, New York-based Metro Affiliates, Inc., and its
subsidiaries sought protection under Chapter 11 of the Bankruptcy
Code on Nov. 4, 2013 (Bankr. S.D.N.Y. Case No. 13-13591). The
case is assigned to Judge Sean Lane. In its schedules, Metro
Affiliates disclosed $14,438,351 in total assets and $163,562,007
total liabilities.
Lisa G. Beckerman, Esq., and Rachel Ehrlich Albanese, Esq., at
Akin Gump Strauss Hauer & Feld LLP, in New York; and Scott L.
Alberino, Esq., at Akin Gump Strauss Hauer & Feld LLP, in
Washington, D.C., represent the Debtors. Silverman Shin & Byrne
PLLC serves as special counsel. Rothschild Inc. serves as the
Debtors' investment banker, while Kurtzman Carson Consultants LLC
serves as their claims and noticing agent.
The Joint Chapter 11 Plan of Liquidation filed by Metro
Affiliates, Inc. and its debtor affiliates embodies a global
settlement among the Debtors, the Creditors Committee, Wells Fargo
and Wayzata for a fair allocation of the Debtors' remaining
assets. Wayzata holds a substantial majority of the Debtors'
Notes. Among other things, the Settlement provides that proceeds
of the Noteholders' Collateral will be used to pay certain
administrative expenses.
The Plan creates a trust for unsecured creditors who are given the
right to pursue lawsuits. Recoveries will be shared, with 70%
going to noteholders on their remaining claim of $14.3 million and
30% earmarked for other unsecured creditors.
On June 11, 2014, the U.S. Bankruptcy Court entered its Findings
of Fact, Conclusions of Law, and Order Confirming First Amended
Joint Chapter 11 Plan of Liquidation for the Debtors.
Wells Fargo Bank, National Association, as agent for a consortium
of DIP lenders, is represented by Jonathan N. Helfat, Esq., at
Otterbourg, Steindler, Houston & Rosen, P.C., in New York.
The Bank of New York Mellon as indenture trustee and collateral
agent for prepetition noteholders, is represented by James
Gadsden, Esq., at Carter, Ledyard & Milburn LLP, in New York.
Certain Noteholders are represented by Kristopher M. Hansen, Esq.,
at Stroock & Stroock & Lavan LLP, in New York.
The U.S. appointed a three-member official committee of
unsecured creditors represented by Farrell Fritz, P.C.
PricewaterhouseCoopers LLP serves as the Committee's
Financial advisors.
This is Metro Affiliates' third trip to Chapter 11. The Company,
together with its subsidiaries, previously sought protection under
Chapter 11 of the Bankruptcy Code on Aug. 16, 2002 (In re Metro
Affiliates, Inc., Case No. 02-42560 (PCB), Bankr. S.D.N.Y.). A
plan in the second Chapter 11 case was confirmed in September
2003. The first bankruptcy was in 1994.
MINERAL PARK: Creditors' Panel Hires Stinson Leonard as Counsel
---------------------------------------------------------------
The Official Committee of Unsecured Creditors of Mineral Park,
Inc. et al., seeks authorization from the U.S. Bankruptcy Court
for the District of Delaware to retain Stinson Leonard Street LLP
as counsel to the Committee, nunc pro tunc to Sept. 9, 2014.
The Committee requires Stinson Leonard to:
(a) assist and advice the Committee in its examination and
analysis of the conduct of the Debtors' affairs;
(b) assist and advice the Committee in the review, analysis and
negotiation of the proposed sale of assets and assistance
to the Committee in the review, analysis and negotiation of
related documents and filings;
(c) assist and advice the Committee in the review, analysis and
negotiation of financing agreements;
(d) take all necessary actions to protect and preserve the
Committee's interests, including possible prosecution of
actions on its behalf; and if appropriate, review and
analysis of claims filed against the Debtors' estate;
(e) prepare on behalf of the Committee of all necessary
motions, applications, answers, orders, reports, pleadings
and papers in support of positions taken by the Committee;
(f) appear, as appropriate, before the Court, the Appellate
Courts and the U.S. Trustee to protect the interests of the
Committee before such courts and before the U.S. Trustee;
And
(g) perform all other necessary legal services on behalf of the
Committee in this case, as instructed by the Committee.
Stinson Leonard will be paid at these hourly rates:
Robert Kugler $620
Alisa Lacey $610
Edwin Caldie $450
Katherine Sutcliffe Becker $450
Gregory Fontaine $575
Amanda Schlitz $385
Phillip Ashfield $370
Aong Moua, Paralegal $255
Partners $325-$800
Of Counsel $260-$590
Senior Counsel $570-$660
Associates $220-$410
Staff Attorneys $220-$345
Paralegals $125-$280
Consultants/Tech Svcs. $150-$395
Stinson Leonard will also be reimbursed for reasonable out-of-
pocket expenses incurred.
Robert T. Kugler, partner of Stinson Leonard, 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.
Stinson Leonard intends to make a reasonable effort to comply with
the U.S. Trustee's requests for information and additional
disclosures as set forth in the Guidelines for Reviewing
Applications for Compensation and Reimbursement of Expenses Filed
Under United States Code by Attorneys in Larger Chapter 11 Cases
(the "2013 UST Guidelines"), both in connection with this
application and the fee applications to be filed by SLS in these
Chapter 11 Cases.
The Committee has approved the budget and staffing plan for the
first budget period from Sept. 9, 2014 through potential
confirmation of the Plan.
Stinson Leonard can be reached at:
Robert T. Kugler, Esq.
STINSON LEONARD STREET LLP
150 South Fifth Street, Suite 2300
Minneapolis, MN 55402
Tel: (612) 335-1645
E-mail: robert.kugler@stinsonleonard.com
About Mineral Park
Mineral Park, Inc., Bluefish Energy Corp. and two affiliates
commenced proceedings under Chapter 11 of the Bankruptcy Code in
Delaware on Aug. 25, 2014. The cases are pending before the
Honorable Kevin J. Carey and are jointly administered under Case
No. 14-11996.
Mineral Park and its affiliated debtors are subsidiaries of
Mercator Minerals Ltd. ("MML"), a mineral resource company engaged
through various subsidiaries in the mining, exploration,
development and operation of its mineral properties in Mohave
County, Arizona, and Sonora, Mexico.
Mineral Park's principal asset is the Mineral Park Mine, a
producing copper-molybdenum mine located near Kingman, Arizona.
Bluefish is the owner and operator of the industrial gas turbine
power generator at the Mine.
British Columbia, Canada-based MML, which has shares trading on
the Toronto Stock Exchange under the trading symbol "ML", is not
included in the bankruptcy filing.
The Debtors have tapped Pachulski Stang Ziehl & Jones LLP as
counsel, Evercore Group LLC as investment banker, FTI Consulting,
Inc., as financial advisor, FTI's David J. Beckman as CRO, and
FTI's Paul Hansen as assistant CRO. Prime Clerk LLC is the claims
and noticing agent.
Mineral Park estimated $100 million to $500 million in assets and
debt.
MINERAL PARK: Creditors' Panel Hires Hiller & Arban as Counsel
--------------------------------------------------------------
The Official Committee of Unsecured Creditors of Mineral Park,
Inc. et al., seeks authorization from the U.S. Bankruptcy Court
for the District of Delaware to retain Hiller & Arban, LLC as
counsel to the Committee, nunc pro tunc to Sept. 10, 2014.
The Committee requires Hiller & Arban to:
(a) advise the Committee with respect to its rights, duties and
powers in these Chapter 11 cases;
(b) assist and advise the Committee in its consultations with
the Debtors in connection with the administration of these
Chapter 11 cases;
(c) review the nature and validity of liens asserted against
property of the Debtors and advising the Committee
concerning the enforceability of such liens;
(d) review the nature and validity of claims of title to
property that may belong to the estates and advising the
Committee concerning litigation of such claims;
(e) assist the Committee in analyzing the claims of the
Debtors' creditors and the Debtors' capital structure, and
negotiating with holders of claims and equity interests;
(f) advise the Committee concerning the actions that it might
take to collect and recover property for the benefit of the
Debtors' estates;
(g) assist the Committee with its investigation of the acts,
conduct, assets, liabilities, and financial condition of
the Debtors, and the operation of the Debtors' businesses;
(h) assist the Committee in its analysis of and negotiations
with the Debtors or any third party concerning matters
related to, among other things, the reconciliation of
claims, the assumption or rejection of certain leases of
non-residential real property and executor contracts, asset
dispositions, financing issues, and the terms of a plan of
reorganization and accompanying disclosure statement, if
any, and related documents;
(i) assist and advise the Committee regarding its
communications to the general creditor body about
significant issues in these Chapter 11 cases;
(j) represent the Committee at hearings and other proceedings;
(k) assist the Committee in preparing pleadings and
applications as may be necessary in furtherance of the
Committee's interests and objectives;
(l) prepare, on behalf of the Committee, any pleadings,
including without limitation, motions, memoranda,
complaints, objections, and responses to any of the
foregoing;
(m) provide information to creditors in accordance with section
1102(b)(3) of the Bankruptcy Code, subject to
confidentiality agreements and orders of the Court; and
(n) perform all other legal services for the Committee that may
be necessary and proper in these Chapter 11 cases, while
minimizing any duplication of effort or redundancy with the
services of other professionals retained by the Committee.
Hiller & Arban will be paid at these hourly rates:
Adam Hiller, Member $375
Johnna M. Darby, Member $350
Brian Arban, Member $325
Michele Gillen, Paralegal $150
Hiller & Arban will also be reimbursed for reasonable out-of-
pocket expenses incurred.
Johnna M. Darby, member of Hiller & Arban, 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.
Hiller & Arban can be reached at:
Johnna M. Darby, Esq.
HILLER & ARBAN, LLC
1500 North French Street, 2nd Floor
Wilmington, DE 19801
Tel: (302) 442-7822
E-mail: jdarby@hillerarban.com
About Mineral Park
Mineral Park, Inc., Bluefish Energy Corp. and two affiliates
commenced proceedings under Chapter 11 of the Bankruptcy Code in
Delaware on Aug. 25, 2014. The cases are pending before the
Honorable Kevin J. Carey and are jointly administered under Case
No. 14-11996.
Mineral Park and its affiliated debtors are subsidiaries of
Mercator Minerals Ltd. ("MML"), a mineral resource company engaged
through various subsidiaries in the mining, exploration,
development and operation of its mineral properties in Mohave
County, Arizona, and Sonora, Mexico.
Mineral Park's principal asset is the Mineral Park Mine, a
producing copper-molybdenum mine located near Kingman, Arizona.
Bluefish is the owner and operator of the industrial gas turbine
power generator at the Mine.
British Columbia, Canada-based MML, which has shares trading on
the Toronto Stock Exchange under the trading symbol "ML", is not
included in the bankruptcy filing.
The Debtors have tapped Pachulski Stang Ziehl & Jones LLP as
counsel, Evercore Group LLC as investment banker, FTI Consulting,
Inc., as financial advisor, FTI's David J. Beckman as CRO, and
FTI's Paul Hansen as assistant CRO. Prime Clerk LLC is the claims
and noticing agent.
Mineral Park estimated $100 million to $500 million in assets and
debt.
MINERAL PARK: US Trustee Appoints Creditors' Committee
------------------------------------------------------
The U.S. Trustee for Region 3 appointed three creditors of Mineral
Park, Inc. and its affiliates to serve on the official committee
of unsecured creditors.
The unsecured creditors' committee is composed of:
(1) Acton Welding, Inc.
Attn: Matt Acton
4765 Interstate Way
Kingman, AZ 86401
Phone: (928) 757-4303
Fax: (928) 757-8195
(2) Freiday Construction, Inc.
Attn: William Freiday
P.O. Box 4267
Kingman, AZ 86402
Phone: (928) 716-4638
Fax: (928) 757-4638
(3) ME Elecmetal
Attn: Tom Vyvyan
Director of Finance
3901 University Avenue NE
Minneapolis, MN 55421
Phone: (763) 201-1802
Fax: (763) 788-2874
Official creditors' committees have the right to employ legal and
accounting professionals and financial advisors, at a debtor's
expense. They may investigate the debtor's business and financial
affairs. Importantly, official committees serve as fiduciaries to
the general population of creditors they represent.
About Mineral Park
Mineral Park, Inc., Bluefish Energy Corp. and two affiliates
commenced proceedings under Chapter 11 of the Bankruptcy Code in
Delaware on Aug. 25, 2014. The cases are pending before the
Honorable Kevin J. Carey and are jointly administered under Case
No. 14-11996.
Mineral Park and its affiliated debtors are subsidiaries of
Mercator Minerals Ltd. ("MML"), a mineral resource company engaged
through various subsidiaries in the mining, exploration,
development and operation of its mineral properties in Mohave
County, Arizona, and Sonora, Mexico.
Mineral Park's principal asset is the Mineral Park Mine, a
producing copper-molybdenum mine located near Kingman, Arizona.
Bluefish is the owner and operator of the industrial gas turbine
power generator at the Mine.
British Columbia, Canada-based MML, which has shares trading on
the Toronto Stock Exchange under the trading symbol "ML", is not
included in the bankruptcy filing.
The Debtors have tapped Pachulski Stang Ziehl & Jones LLP as
counsel, Evercore Group LLC as investment banker, FTI Consulting,
Inc., as financial advisor, FTI's David J. Beckman as CRO, and
FTI's Paul Hansen as assistant CRO. Prime Clerk LLC is the claims
and noticing agent.
Mineral Park estimated $100 million to $500 million in assets and
debt.
MJC AMERICA: Can Access EWB's Cash Collateral Until December
------------------------------------------------------------
The Hon. Sandra R. Klein of the U.S. Bankruptcy Court for the
Central District of California approved an agreement between MJC
America Ltd. and East West bank for interim continued use of cash
collateral until December 2014, pursuant to a projected budget.
Among the conditions under the agreement is the payment of
adequate protection at the rate of $75,000 per month on the 16th
day of each month commencing April 16, 2014.
This is the fourth cash collateral agreement entered by the Debtor
and the bank.
A full-text copy of the projected budget is available for free at
http://is.gd/xUGxde
About MJC America
MJC America, Ltd., doing business as Soleus Air System --
http://www.soleusair.com/-- which sells Soleus-branded air
conditioners and heaters in the U.S., filed for Chapter 11
bankruptcy protection (Bankr. C.D. Cal. Case No. 13-39097) in Los
Angeles on Dec. 10, 2013.
Winston & Strawn LLP serves as special litigation counsel.
MJC disclosed $14.0 million in total assets and $15.9 million
in liabilities in its schedules. Accounts receivable of
$9.22 million and inventory of $4.12 million comprise most of
the assets. East West Bank has a scheduled secured claim of
$2.1 million on a line of credit, and Hong Kong Gree Electric
Appliances Sales, Ltd., is owed $4.07 million, but only $288,000
is secured.
MJC AMERICA: Wants Until June 2015 to File Chapter 11 Plan
----------------------------------------------------------
MJC America Ltd. asks the U.S. Bankruptcy Court for the Central
District of California to extend its exclusive periods to file a
Chapter 11 plan form Oct. 10, 2014, to June 1, 2015.
A hearing is set for Oct. 23, 2014 at 8:30 a.m. at Crtrm. 1575,
255 E. Temple St. in Los Angeles, California.
The Debtor says its related entities are engaged in ongoing high
stakes litigation with Gree USA Sales Ltd., Gree Electric
Appliances Inc. of Zhuhai, and Hong Kong Gree Electric Appliances
Sales Ldt., collectively known as Gree entities. Damage claims on
both side are in the millions or tens of millions. The initial
action was filed by the Debtor's entities, and is still pending
before the United States District Court for the Central District
of California. According the Debtor, the Gree entities have filed
a separate action which is still pending in the Los Angeles
Superior Court. The Debtor's entities filed their own actions
against the Gree entities in that same court.
The Debtor notes two superior court actions, pending as case
number KC 066119 and KC 0266270G, were consolidated and have
recently been stayed pending the outcome of the District Court
action.
The Debtor adds Gree entities filed an action against its lender,
East West Bank. That action has been deemed "related" to the two
to other superior court actions. But is not clear whether the
bank action has been stayed, the Debtor notes. Until parties have
at least some greater information about the likely outcome of
these cases, it will be impossible to formulate any meaningful
plan, the Debtor laments.
About MJC America
MJC America, Ltd., doing business as Soleus Air System --
http://www.soleusair.com/-- which sells Soleus-branded air
conditioners and heaters in the U.S., filed for Chapter 11
bankruptcy protection (Bankr. C.D. Cal. Case No. 13-39097) in Los
Angeles on Dec. 10, 2013.
Winston & Strawn LLP serves as special litigation counsel.
MJC disclosed $14.0 million in total assets and $15.9 million
in liabilities in its schedules. Accounts receivable of
$9.22 million and inventory of $4.12 million comprise most of
the assets. East West Bank has a scheduled secured claim of
$2.1 million on a line of credit, and Hong Kong Gree Electric
Appliances Sales, Ltd., is owed $4.07 million, but only $288,000
is secured.
MONROE HOSPITAL: Files Schedules of Assets and Liabilities
----------------------------------------------------------
Monroe Hospital, LLC, filed with U.S. Bankruptcy Court for the
Southern District of Indiana its schedules of assets and
liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $0
B. Personal Property $14,327,739
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $122,172,103
E. Creditors Holding
Unsecured Priority
Claims $1,500
F. Creditors Holding
Unsecured Non-priority
Claims $14,213,322
----------- -----------
TOTAL $14,327,739 $136,386,925
A copy of the schedules is available for free at
http://bankrupt.com/misc/MONROEHOSPITAL_104_sal.pdf
About Monroe Hospital
Monroe Hospital, LLC, since 2006, has operated a 32 licensed bed
private acute care medical surgical hospital in Bloomington,
Indiana. It leases the land on which the hospital is located from
MPT Bloomington, LLC.
Due to insufficient cash flow as a result of low patient census
and high expenses, the Debtor failed to meet its prepetition
expenses. Thus, it defaulted under the terms of the Lease
Agreement.
Monroe Hospital, LLC, filed a Chapter 11 bankruptcy petition
(Bankr. S.D. Ind. Case No. 14-07417) in Indianapolis, Indiana, on
Aug. 8, 2014. Joseph Roche signed the petition as president and
chief executive officer. The Debtor estimated assets of at least
$10 million and $100 million to $500 million in liabilities.
The case is assigned to Judge James M. Carr. The Debtor is
represented by attorneys at Bingham Greenebaum Doll
LLP. Upshot Services LLC acts as the Debtor's noticing, claims
and balloting agent.
MONROE HOSPITAL: Wants to Fix Oct. 30 as Claims Bar Date
--------------------------------------------------------
Monroe Hospital, LLC, asks the Bankruptcy Court to:
i) establish Oct. 30, 2014 at 5:00 p.m., as the deadline for
all persons or entities other than government units, to file
proofs of claims based on prepetition claims against the Debtor;
ii) establish Feb. 4, 2015 at 5:00 p.m., as the deadline for all
governmental units to file proofs of claims; and
iii) establish Oct. 30, at 5:00 p.m., as the deadline for all
persons or entities to file claim requests based on administrative
priority claims asserted pursuant to Section 503(b)(9) of the
Bankruptcy Code.
About Monroe Hospital
Monroe Hospital, LLC, since 2006, has operated a 32 licensed bed
private acute care medical surgical hospital in Bloomington,
Indiana. It leases the land on which the hospital is located from
MPT Bloomington, LLC.
Due to insufficient cash flow as a result of low patient census
and high expenses, the Debtor failed to meet its prepetition
expenses. Thus, it defaulted under the terms of the Lease
Agreement.
Monroe Hospital, LLC, filed a Chapter 11 bankruptcy petition
(Bankr. S.D. Ind. Case No. 14-07417) in Indianapolis, Indiana, on
Aug. 8, 2014. Joseph Roche signed the petition as president and
chief executive officer. The Debtor disclosed $14,327,739 in
assets and $136,386,925 in liabilities as of the Chapter 11
filing.
The case is assigned to Judge James M. Carr. The Debtor is
represented by attorneys at Bingham Greenebaum Doll
LLP. Upshot Services LLC acts as the Debtor's noticing, claims
and balloting agent.
MORNINGSTAR MARKETPLACE: Court Again Denies Exclusivity Bid
-----------------------------------------------------------
A bankruptcy judge denied Morningstar Marketplace, LTD's motion to
reconsider the Sept. 10 order denying request to extend the
exclusivity period.
Bankruptcy Judge Mary D. France, in an opinion, said that the
Debtor filed the motion after the exclusivity period had expired.
Judge France noted that nothing prevents the Debtor from filing a
plan at any time, even if other parties-in-interest are now also
permitted to file a plan.
The Debtor, in its morion for reconsideration, stated that the
Debtor's mistake must be considered harmless in that it is
inconsistent with the plain language of the quoted statute. It
was the Debtor's intention to request a six month extension of the
time for the filing of a Plan, not an extension of exclusivity.
As reported in the Troubled Company Reporter on Sept. 12, 2014,
Robert L. Knupp, Esq., at Smigel, Anderson & Sacks, LLP, counsel
for the Debtor sought until Feb. 2, 2015, to file a plan of
reorganization.
About Morningstar Marketplace
Morningstar Marketplace, LTD, operator of a flea market business
in St. Thomas, Pennsylvania, filed a Chapter 11 bankruptcy
petition (Bankr. M.D. Pa. Case No. 14-00451) in Harrisburg on
Feb. 3, 2014. Judge Mary D France presides over the case.
Attorneys at Smigel, Anderson & Sacks, LLP serve as counsel to the
Debtor. The Debtor estimated $100 million to $500 million in
assets and liabilities.
NAARTJIE CUSTOM: Wants More Time to Decide on Leases
----------------------------------------------------
The U.S. Bankruptcy Court for the District of Utah has set for
Oct. 6, 2014, at 3:30 p.m. a hearing to consider Naartjie Custom
Kids, Inc.'s motion for a 90-day extension of time to assume or
reject leases of nonresidential real property, through April 11,
2015.
All of the Debtor's unexpired leases are set to be automatically
rejected as of Jan. 10, 2015.
After a history of declining sales and failed refinancing
processes, the Debtor has concluded that the best way to maximize
value for the benefit of all interested parties is to conduct a
prompt and orderly closing of all its 55 retail stores in the U.S
through the retention of a professional liquidator. The Debtor
says in its Sept. 26, 2014 court filing that as part of the
proposed liquidation, the Debtor anticipates that it will close
the retail stores at various times during the liquidation as the
inventory and assets from one retail store is either completely
liquidated or moved to another retail store, as the case may be.
"If the current lease rejection deadline is not extended, then any
further extension of the sale termination date to provide
additional time for liquidation of the Debtor's assets at its
retail stores would not be possible. And, because the Debtor is
not able to determine at this point when each individual retail
store, distribution center or other place of business will be
closed -- which timing is dependent on the success of the proposed
liquidation -- a global 90-day extension of the current lease
rejection deadline is appropriate and will conserve estate and
court resources. In sum, if the Debtor is forced to assume the
leases at this time, the estate may be unnecessarily burdened with
administrative expenses. On the other hand, premature rejection
of the leases may leave the Debtor without a retail store location
to conduct the proposed liquidation, thereby crippling the
Debtor's ability to effectively liquidate its assets to maximize
recovery for the benefit of creditors," the Debtor states.
Objections to the motion must be filed by Oct. 3, 2014.
About Naartjie Custom Kids
Naartjie Custom Kids, Inc., which designs, manufactures and sells
children's clothing, accessories and footwear for ages newborn
through 10 years old, sought protection under Chapter 11 of
the Bankruptcy Code on Sept. 12, 2014 (Bankr. D. Utah Case No.
14-29666). The case is assigned to Judge William T. Thurman.
The Debtor's counsel is Annette W. Jarvis, Esq., Jeffrey M.
Armington, Esq., Benjamin J. Kotter, Esq., and Michael F. Thomson,
Esq., at Dorsey & Whitney LLP, in Salt Lake City, Utah.
NATCHEZ REGIONAL: Judge to Approve $10MM Sale of Hospital to CHS
----------------------------------------------------------------
Natchez Democrat reported that Judge Neil Olack said evening of
Sept. 29 he would approve the sale of the Natchez Regional Medical
Center, saying he did not see another option for the county-owned
hospital.
According to the report, Judge Olack said he should begin
reviewing the official record by midday and have it signed in time
for the sale to close at 11:59 p.m. on Tuesday.
The hospital is being sold by Adams County, Miss., to Community
Health Systems for $10 million. The buyer is also required to
prepay $8 million in ad valorem taxes.
About Natchez Regional
Based in Natchez, Mississippi, Natchez Regional Medical Center is
a full-service hospital offering comprehensive diagnostic and
treatment services for acute, subacute and ambulatory care.
Natchez Regional serves as a referral center for the five
Mississippi counties and two Louisiana parishes it serves, known
locally as the Miss-Lou. The hospital is owned by Adams County.
Natchez Regional Medical Center filed for Chapter 9 bankruptcy
protection (Bankr. S.D. Miss. Case No. 14-01048) on March 26,
2014. Eileen N. Shaffer, Esq., Attorney At Law, serves as
bankruptcy counsel. In its petition, the Center listed total
assets of $27.8 million and total debts of $20.80 million. The
petition was signed by Donny Rentfro, hospital CEO.
At the onset of the case, the 179-bed facility said intends to
have a term sheet outlining a sale of the facility to a "qualified
buyer." The hospital blamed financial problems on "ill-timed and
poorly integrated acquisition of physicians' practices and new
clinical technologies," the report related.
This is the Center's second bankruptcy filing in six years. It
filed a Chapter 9 petition on Feb. 12, 2009 (Bankr. S.D. Miss.
Case No. 09-00477). Eileen N. Shaffer, Esq., also represented the
Debtor as counsel in the 2009 case. The Debtor listed total
assets of between $10 million and $50 million, and total debts of
between $10 million and $50 million in the 2009 petition. Nathcez
Regional exited bankruptcy in December 2009 after a court approved
its plan of adjustment, in which all unsecured creditors owed
$5,000 were to be paid in full.
In the 2014 case, Bankruptcy Judge Neil P. Olack, who presides
over the case, has held that appointment of a patient care
ombudsman is unnecessary.
The U.S. Trustee appointed three creditors to serve in the
official committee of unsecured creditors. Douglas S. Draper,
Esq., and Heller, Draper, Patrick, Horn & Dabney, L.L.C., serve as
lead counsel. David A. Wheeler, Esq., and Wheeler & Wheeler,
PLLC, serve as local counsel.
NATCHEZ REGIONAL: Incurred $1.6MM Legal Tab by Mid-August
---------------------------------------------------------
Kevin Cooper, writing for Natchez Democrat, reported that the
bankruptcy proceedings and sale of Natchez Regional Medical Center
have racked up $1.6 million in professional fees by mid-August,
according to internal hospital records circultated at a recent
board of trustees meeting. Those fees include:
$730,198 by sales consultant firm Healthcare Management
Partners;
$408,924 by Butler Snow law firm;
$152,247 by The Horne Group;
$103,156 by Eileen Shaffer, NRMC's lead bankruptcy attorney;
and
$99,674 by Walter Brown, NRMC's board attorney
According to the news report, NRMC supervisor Mike Lazarus openly
complained about the high fees charged by HMP; and HMP's managing
director, Scott Phillips, denied that his form had charnged more
than $700,000 since the bankruptcy filing. Mr. Lazarus said his
comments came after simply being frustrated by the high fees
charged to the hospital.
About Natchez Regional
Based in Natchez, Mississippi, Natchez Regional Medical Center is
a full-service hospital offering comprehensive diagnostic and
treatment services for acute, subacute and ambulatory care.
Natchez Regional serves as a referral center for the five
Mississippi counties and two Louisiana parishes it serves, known
locally as the Miss-Lou. The hospital is owned by Adams County.
Natchez Regional Medical Center filed for Chapter 9 bankruptcy
protection (Bankr. S.D. Miss. Case No. 14-01048) on March 26,
2014. Eileen N. Shaffer, Esq., Attorney At Law, serves as
bankruptcy counsel. In its petition, the Center listed total
assets of $27.8 million and total debts of $20.80 million. The
petition was signed by Donny Rentfro, hospital CEO.
At the onset of the case, the 179-bed facility said intends to
have a term sheet outlining a sale of the facility to a "qualified
buyer." The hospital blamed financial problems on "ill-timed and
poorly integrated acquisition of physicians' practices and new
clinical technologies," the report related.
This is the Center's second bankruptcy filing in six years. It
filed a Chapter 9 petition on Feb. 12, 2009 (Bankr. S.D. Miss.
Case No. 09-00477). Eileen N. Shaffer, Esq., also represented the
Debtor as counsel in the 2009 case. The Debtor listed total
assets of between $10 million and $50 million, and total debts of
between $10 million and $50 million in the 2009 petition. Nathcez
Regional exited bankruptcy in December 2009 after a court approved
its plan of adjustment, in which all unsecured creditors owed
$5,000 were to be paid in full.
In the 2014 case, Bankruptcy Judge Neil P. Olack, who presides
over the case, has held that appointment of a patient care
ombudsman is unnecessary.
The U.S. Trustee appointed three creditors to serve in the
official committee of unsecured creditors. Douglas S. Draper,
Esq., and Heller, Draper, Patrick, Horn & Dabney, L.L.C., serve as
lead counsel. David A. Wheeler, Esq., and Wheeler & Wheeler,
PLLC, serve as local counsel.
NORD RESOURCES: Extends Cathode Sales Agreement Until Dec. 31
-------------------------------------------------------------
Nord Resources Corporation has entered into an extension agreement
with respect to its replacement cathode sales agreement with Red
Kite Master Fund Limited that covered the period from Jan. 1,
2013, through Dec. 31, 2013, for 100% of the copper cathode
production from the Johnson Camp Mine. The extension runs through
Dec. 31, 2014, with renewable extensions by mutual agreement of
both parties, the Company disclosed in a regulatory filing with
the U.S. Securities and Exchange Commission.
Pursuant to the agreement, Red Kite will accept delivery of the
cathodes at the Johnson Camp Mine, and pricing will be based on
the COMEX price for high-grade copper on the date of sale. Red
Kite is a large metals hedge fund and physical trader.
About Nord Resources
Based in Tuczon, Arizona, Nord Resources Corporation
(TSX:NRD/OTCBB:NRDS.OB) -- http://www.nordresources.com/-- is a
copper mining company whose primary asset is the Johnson Camp
Mine, located approximately 65 miles east of Tucson, Arizona.
Nord commenced mining new ore in February 2009.
On June 2, 2010, Nord Resources appointed FTI Consulting to advise
on refinancing structures and strategic alternatives.
Nord Resources disclosed a net loss of $10.25 million on $8.14
million of net sales for the year ended Dec. 31, 2012, as compared
with a net loss of $10.31 million on $14.48 million of net sales
in 2011. The Company's balance sheet at Sept. 30, 2013, showed
$49.02 million in total assets, $73.40 million in total
liabilities and a $24.38 million total stockholders' deficit.
Mayer Hoffman McCann P.C., in Denver, Colorado, issued a "going
concern" qualification on the consolidated financial statements
for the year ended Dec. 31, 2012. The independent auditors noted
that the Company reported net losses of ($10,254,344) and
($10,316,294) during the years ended Dec. 31, 2012, and 2011,
respectively. In addition, as of Dec. 31, 2012 and 2011, the
Company reported a deficit in net working capital of ($57,999,677)
and ($51,783,180), respectively. The Company's significant
historical operating losses, lack of liquidity, and inability to
make the requisite principal and interest payments due under the
terms of the Amended and Restated Credit Agreement with its senior
lender raise substantial doubt about its ability to continue as a
going concern.
Bankruptcy Warning
"The Company's continuation as a going concern is dependent upon
its ability to refinance the obligations under the Credit
Agreement with Nedbank, the Copper Hedge Agreement with Nedbank
Capital, and the note payable with Fisher, thereby curing the
current state of default under the respective agreements. Any
actions by Nedbank, Nedbank Capital or Fisher Industries to
enforce their respective rights could force us into bankruptcy or
liquidation," according to the Company's annual report for the
year ended Dec. 31, 2012.
NORTEL NETWORKS: Seeks Court Help to Stay out of Rockstar Suit
--------------------------------------------------------------
Peg Brickley, writing for Daily Bankruptcy Review, reported that
defunct telecommunications company Nortel Networks Corp. has asked
a bankruptcy judge to stop a subpoena issued in relation to a big-
ticket litigation over a portfolio of patents the company sold for
$4.5 billion to Rockstar Consortium, a group of technology
heavyweights. According to the report, Nortel said it can't
afford to be dragged into the litigation
As previously reported by The Troubled Company Reporter, the trial
on the long-running fight over how to distribute $7.3 billion
raised in Nortel Networks' liquidation wrapped up on Sept. 24, and
both the U.S. Bankruptcy Court in Delaware and the Ontario
Superior Court of Justice in Toronto will have a say on how to
divide the sale proceeds.
About Nortel Networks
Headquartered in Ontario, Canada, Nortel Networks Corporation and
its various affiliated entities provided next-generation
technologies, for both service provider and enterprise networks,
support multimedia and business-critical applications. Nortel did
business in more than 150 countries around the world. Nortel
Networks Limited was the principal direct operating subsidiary of
Nortel Networks Corporation.
On Jan. 14, 2009, Nortel Networks Inc.'s ultimate corporate parent
Nortel Networks Corporation, NNI's direct corporate parent Nortel
Networks Limited and certain of their Canadian affiliates
commenced a proceeding with the Ontario Superior Court of Justice
under the Companies' Creditors Arrangement Act (Canada) seeking
relief from their creditors. Ernst & Young was appointed to serve
as monitor and foreign representative of the Canadian Nortel
Group. That same day, the Monitor sought recognition of the CCAA
Proceedings in U.S. Bankruptcy Court (Bankr. D. Del. Case No.
09-10164) under Chapter 15 of the U.S. Bankruptcy Code.
That same day, NNI and certain of its affiliated U.S. entities
filed voluntary petitions for relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Del. Case No. 09-10138).
In addition, the High Court of England and Wales placed 19 of
NNI's European affiliates into administration under the control of
individuals from Ernst & Young LLP. Other Nortel affiliates have
commenced and in the future may commence additional creditor
protection, insolvency and dissolution proceedings around the
world.
On May 28, 2009, at the request of administrators, the Commercial
Court of Versailles, France, ordered the commencement of secondary
proceedings in respect of Nortel Networks S.A. On June 8, 2009,
Nortel Networks UK Limited filed petitions in U.S. Bankruptcy
Court for recognition of the English Proceedings as foreign main
proceedings under Chapter 15.
U.S. Bankruptcy Judge Kevin Gross presides over the Chapter 11 and
15 cases. Mary Caloway, Esq., and Peter James Duhig, Esq., at
Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware, serves as
Chapter 15 petitioner's counsel.
In the Chapter 11 case, James L. Bromley, Esq., and Howard S.
Zelbo, Esq., at Cleary Gottlieb Steen & Hamilton, LLP, in New
York, serve as the U.S. Debtors' general bankruptcy counsel; Derek
C. Abbott, Esq., at Morris Nichols Arsht & Tunnell LLP, in
Wilmington, serves as Delaware counsel. The Chapter 11 Debtors'
other professionals are Lazard Freres & Co. LLC as financial
advisors; and Epiq Bankruptcy Solutions LLC as claims and notice
agent.
The U.S. Trustee appointed an Official Committee of Unsecured
Creditors in respect of the U.S. Debtors. Fred S. Hodara, Esq.,
at Akin Gump Strauss Hauer & Feld LLP, in New York, and
Christopher M. Samis, Esq., and Mark D. Collins, Esq., at
Richards, Layton & Finger, P.A., in Wilmington, Delaware,
represent the Unsecured Creditors Committee.
An ad hoc group of bondholders also was organized. An Official
Committee of Retired Employees and the Official Committee of Long-
Term Disability Participants tapped Alvarez & Marsal Healthcare
Industry Group as financial advisor. The Retiree Committee is
represented by McCarter & English LLP as Delaware counsel, and
Togut Segal & Segal serves as the Retiree Committee. The
Committee retained Alvarez & Marsal Healthcare Industry Group as
financial advisor, and Kurtzman Carson Consultants LLC as its
communications agent.
Several entities, particularly, Nortel Government Solutions
Incorporated and Nortel Networks (CALA) Inc., have material
operations and are not part of the bankruptcy proceedings.
As of Sept. 30, 2008, Nortel Networks Corp. reported consolidated
assets of $11.6 billion and consolidated liabilities of $11.8
billion. The Nortel Companies' U.S. businesses are primarily
conducted through Nortel Networks Inc., which is the parent of
majority of the U.S. Nortel Companies. As of Sept. 30, 2008, NNI
had assets of about $9 billion and liabilities of $3.2 billion,
which do not include NNI's guarantee of some or all of the Nortel
Companies' about $4.2 billion of unsecured public debt.
Since the commencement of the various insolvency proceedings,
Nortel has sold its business units and other assets to various
purchasers. Nortel has collected roughly $9 billion for
distribution to creditors. Of the total, $4.5 billion came from
the sale of Nortel's patent portfolio to Rockstar Bidco, a
consortium consisting of Apple Inc., EMC Corporation,
Telefonaktiebolaget LM Ericsson, Microsoft Corp., Research In
Motion Limited, and Sony Corporation. The consortium defeated a
$900 million stalking horse bid by Google Inc. at an auction. The
deal closed in July 2011.
Nortel has filed a proposed plan of liquidation in the U.S.
Bankruptcy Court. The Plan generally provides for full payment on
secured claims with other distributions going in accordance with
the priorities in bankruptcy law.
The trial on how to divide proceeds among creditors in the U.S.,
Canada, and Europe commenced on Sept. 22, 2014.
PACIFIC STEEL: Oct. 31 Fixed as Admin. and EEOC Claims Deadline
---------------------------------------------------------------
Bankruptcy Judge Roger L. Efremsky, in an amended order,
established Oct. 31, 2014, as the deadline for filing:
a. administrative claims which allegedly accrued or otherwise
became due and owing between the March 10, 2014, petition date and
Aug. 29, 2014;
b. claims by former employees for unpaid prepetition vacation
liability as a result of vacation accrual errors and the extent
such vacation liability amounts were not assumed by the buyer
after closing of the sale of assets of Pacific Steel Casting
Company now known as Second Street Properties; and
c. claims by (i) two former employees holding alleged
employment discrimination claims and who had filed complaints with
the Equal Employment Opportunity Commission (EEOC), (ii) two
additional former employees who had filed complaints with the
California Department of Fair Employment and Housing (DFEH), and
(iii) one additional workers' compensation claimant.
Epiq Bankruptcy Solutions LLC, the Debtor's claims agent will
serve notices of the Oct. 31 deadline upon the affected creditors
and parties-in-interest in both estates by first class mail.
The original order was issued on Sept. 16.
The Debtor, in its motion, stated it has recently completed the
sale of Debtor SSP. As part of the approved terms of that sale,
the buyer did not assume responsibility for most of the
administrative expenses which SSP had incurred in the ordinary
course of business.
SSP is represented by:
Michael W. Malter, Esq.
Julie H. Rome-Banks, Esq.
BINDER & MALTER, LLP
2775 Park Avenue
Santa Clara, CA 95050
Tel: (408)295-1700
Fax: (408) 295-1531
E-mail: michael@bindermalter.com
julie@bindermalter.com
About Pacific Steel Casting,
Berkeley Properties
Pacific Steel Casting Company and Berkeley Properties, LLC,
separately filed Chapter 11 bankruptcy petitions (Bankr. N.D.
Cal. Case Nos. 14-41045 and 14-41048) on March 10, 2014. Pacific
Steel's petition was signed by Charles H. Bridges, Jr., chief
financial officer and director. Michael W. Malter, Esq., at
Binder & Malter, LLP serves as the Debtors' counsel. Epiq
Bankruptcy Solutions, LLC, is the Debtors' claims, noticing and
balloting agent. Burr Pilger Mayer, a certified public accounting
firm, serves as financial consultants.
Pacific Steel makes carbon, low-alloy and stainless steel castings
for U.S. and international customers, largely for heavy-duty
trucks and construction equipment.
The U.S. Trustee for Region 17 appointed seven creditors to serve
on the Official Committee of Unsecured Creditors. The Committee
is represented by Ori Katz, Esq., and Michael M. Lauter, Esq., at
Sheppard, Mullin, Richter & Hampton LLP.
PACIFIC THOMAS: Secured Creditors Oppose Approval of Plan Outline
-----------------------------------------------------------------
Pacific Thomas Corp.'s largest secured creditor has filed an
objection to block court approval of the disclosure statement
outlining the company's Chapter 11 reorganization plan.
Summit Bank, which holds an $8.5 million claim, said the proposed
plan cannot be confirmed since the company doesn't have enough
funds to pay creditors.
The bank also criticized Pacific Thomas' proposal to get funds for
the plan from the proceeds of Eagle Group Finance's $14.24 million
refinance loan. Summit Bank cited a previous court ruling that
denied the company's bid to get financing from Eagle Group.
The same objection was echoed by Bank of the West, another secured
creditor which holds $3.18 million claim against the company. The
bank is also convinced that the restructuring plan cannot be
confirmed, saying it "does not provide adequate means for
implementation."
The disclosure statement also drew flak from Bank of America NA.
The bank wants Pacific Thomas to disclose in the document if it
has any interest in a real property securing the bank's claim.
U.S. Bankruptcy Judge M. Elaine Hammond is set to hold a hearing
on Oct. 16 to consider approval of the disclosure statement.
About Pacific Thomas Corp.
Walnut Creek, California, Pacific Thomas Corporation filed a
Chapter 11 petition (Bankr. N.D. Cal. Case No. 12-46534) in
Oakland on Aug. 6, 2012, estimating in excess of $10 million in
assets and liabilities.
The Debtor is related to Pacific Thomas Capital, which specializes
in real estate services, focusing on the investment, ownership and
development of commercial real estate properties, according to
http://www.pacificthomas.com/ Real estate activities has spanned
throughout the Hawaiian Islands as well as U.S. West Coast
locations in California, Nevada, Arizona and Utah. Hawaii based
activities are managed under the name Thomas Capital Investments.
Bankruptcy Judge M. Elaine Hammond presides over the case. Anne-
Leith Matlock, Esq., at Matlock Law Group, P.C., serves as general
counsel. The petition was signed by Jill V. Worsley, COO,
secretary. Kyle Everett was named Chapter 11 trustee of the
Debtor. Craig C. Chiang, Esq., at Buchalter Nemer, P.C., in San
Francisco, Calif., represents the Chapter 11 trustee as counsel.
In its schedules, the Debtor disclosed $19,960,679 in assets and
$16,482,475 in liabilities as of the petition date.
In January 2014, Judge Hammond entered an order holding that
Pacific Thomas Corp.'s Fourth Amended Disclosure Statement, filed
on Dec. 31, 2013, is not approved for the reasons stated on the
record at the Jan. 16 hearing. Pursuant to the Plan, the Debtor
proposes to avail of a loan from Thorofare Capital to pay off some
secured claims. The new loan would be refinanced by the
reorganized company before the loan terms expires. If the
reorganized company fails to do so, the safe storage parcels of
the Pacific Thomas properties will be sold.
PACIFIC THOMAS: PTC Prexy to Appeal Ruling on Comcore Deal
----------------------------------------------------------
Randall C.M. Whitney, president and director at Pacific Thomas
Capital, said he would appeal a federal judge's decision approving
the sale of Pacific Thomas Corp.'s self-storage facility to
Comcore, Inc.
Mr. Whitney filed a notice of appeal earlier this month
challenging an Aug. 18 decision by U.S. Bankruptcy Judge M. Elaine
Hammond, which authorized Pacific Thomas Corp. to sell the
facility as well as the adjacent driveways and parking lots for
$12.95 million.
Secured creditors Bank of the West and Summit Bank, which hold a
lien on the property, have consented to the sale on condition that
Pacific Thomas corp. closes the deal by Nov. 25. Bank of the West
will receive full payment while the other bank will receive $7.9
million at closing of the deal.
About Pacific Thomas Corp.
Walnut Creek, California, Pacific Thomas Corporation filed a
Chapter 11 petition (Bankr. N.D. Cal. Case No. 12-46534) in
Oakland on Aug. 6, 2012, estimating in excess of $10 million in
assets and liabilities.
The Debtor is related to Pacific Thomas Capital, which specializes
in real estate services, focusing on the investment, ownership and
development of commercial real estate properties, according to
http://www.pacificthomas.com/ Real estate activities has spanned
throughout the Hawaiian Islands as well as U.S. West Coast
locations in California, Nevada, Arizona and Utah. Hawaii based
activities are managed under the name Thomas Capital Investments.
Bankruptcy Judge M. Elaine Hammond presides over the case. Anne-
Leith Matlock, Esq., at Matlock Law Group, P.C., serves as general
counsel. The petition was signed by Jill V. Worsley, COO,
secretary. Kyle Everett was named Chapter 11 trustee of the
Debtor. Craig C. Chiang, Esq., at Buchalter Nemer, P.C., in San
Francisco, Calif., represents the Chapter 11 trustee as counsel.
In its schedules, the Debtor disclosed $19,960,679 in assets and
$16,482,475 in liabilities as of the petition date.
In January 2014, Judge Hammond entered an order holding that
Pacific Thomas Corp.'s Fourth Amended Disclosure Statement, filed
on Dec. 31, 2013, is not approved for the reasons stated on the
record at the Jan. 16 hearing. Pursuant to the Plan, the Debtor
proposes to avail of a loan from Thorofare Capital to pay off some
secured claims. The new loan would be refinanced by the
reorganized company before the loan terms expires. If the
reorganized company fails to do so, the safe storage parcels of
the Pacific Thomas properties will be sold.
PALM DRIVE HEALTH: Committee Can Hire Pachulski Stang as Counsel
----------------------------------------------------------------
The Official Committee of Unsecured Creditors of Palm Drive Health
Care District sought and obtained permission from the Hon. Alan
Jaroslovsky of the U.S. Bankruptcy Court for the Northern District
of California to retain Pachulski Stang Ziehl & Jones & LLP as its
counsel.
Pachulski Stang will, among other things, assist, advise and
represent the Committee in investigating the acts, conduct,
assets, liabilities and financial condition of the Debtor, the
operation of the Debtor's affairs and the desirability of the
continuance of any portion of the Debtor's business at these
hourly rates:
Henry C. Kevane $875
Samuel R. Maizel $795
Gail S. Greenwood $650
To the best of the Committee's knowledge, Pachulski Stang is a
"disinterested person" within the meaning of Section 101(14) of
the Bankruptcy Code.
On Sept. 7, 2014, the Debtor filed an objection to the proposed
basis of compensation for Pachulski Stang, which contemplates
compensation from the Debtor's funds without the Debtor's consent,
contrary to applicable Chapter 9 law. The Debtor requested that
any order on the hiring of Pachulski Stang expressly provide that
compensation for Committee counsel from funds of the Debtor may
not in any event exceed the amount as the Debtor expressly
consents to. A copy of the objection is available for free at
http://is.gd/CxlJi8
On Sept. 12, 2014, the Committee requested the Court to overrule
the Debtor's objection and permit Pachulski Stang to request
compensation for services and expenses as an administrative
expense in the case pursuant to sections 503(b) and 943(b)(5).
The Committee stated in the Sept. 12 court filing, "The Debtor
contends that it can set an arbitrary cap on the Committee's
professional fees because Section 330 is omitted from Chapter 9
and Section 903 bars this Court from disagreeing. This argument
is simply wrong. Congress excluded sections 327 through 331 from
Chapter 9 to respect the constitutional mandate not to intrude on
the sovereign power of states except with the municipal debtor's
consent or through confirmation of a debtor's plan of adjustment.
But section 330 is not the sole source of a professional's
entitlement to compensation under the Bankruptcy Code (even though
some courts, in order to implement the overall statutory scheme,
have held that section 330 is indirectly incorporated into Chapter
9). Section 503 also provides a sufficient basis for compensating
statutory committees in Chapter 9 cases. They must be paid by the
Debtor upon confirmation of its plan of adjustment pursuant to
section 943(b)(5), and are subject to objection for reasonableness
in accordance with section 943(b)(3). This outcome is consistent
with the statutory framework of Chapter 9 and fulfills Congress's
expressed intent for creditors' committees to represent the
interests of unsecured creditors in Chapter 9 cases."
A copy of the response is available for free at:
http://is.gd/ry8Jn1
About Palm Drive Health Care District
Palm Drive Health Care District, owner and operator of the Palm
Drive Hospital, in Sebastopol, California, filed a petition under
Chapter 9 of the Bankruptcy Code (Bankr. N.D. Cal. Case No. 14-
10510) amid a "sustained reduction in patient volume and revenue."
In its Chapter 9 petition filed April 7, 2014, in Santa Rosa,
California, the Debtor estimated $10 million to
$50 million in assets and liabilities. The Debtor is represented
by Michael A. Sweet, Esq., at Fox Rothschild LLP, as counsel.
PHOENIX PAYMENT: Oct. 24 Set as General Claims Bar Date
-------------------------------------------------------
Judge Mary F. Walrath of the U.S. Bankruptcy Court for the
District of Delaware issued an order establishing Oct. 24, 2014,
as the last date by which proofs of claim and proofs of interest
against Phoenix Payment Systems, Inc., must be filed. All
governmental units holding claims against the Debtor must file
their proofs of claim on or before Feb. 2, 2015.
About Phoenix Payment
Founded in 2004, Phoenix Payment Systems, Inc., aka Electronic
Payment Systems, aka EPX, is an international payment processor
with corporate headquarters in Wilmington, Delaware, and
technology headquarters in Phoenix, Arizona. It provides
acceptance, processing, support, authorization and settlement
services for credit card, debit card and e-check payments.
Providing processing services at more than 8,700 locations
worldwide, PPS processed, in multiple currencies, 280 million
transactions in 2013 and expects to process 400 million in 2014.
Phoenix Payment Systems sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. Del. Case No. 14-11848) on Aug. 4,
2014, to quickly sell its assets.
As of the Petition Date, the Debtor had total outstanding
liabilities and other obligations of $16.6 million and 9.8 million
shares of outstanding preferred and common stock. Debt to secured
creditor The Bancorp Bank is estimated at $6.2 million.
Judge Mary F. Walrath presides over the case.
The Debtor's attorneys are Richard J. Bernard, Esq., at Foley &
Lardner LLP, in New York; and Mark D. Collins, Esq., Russell
Siberglied, Esq., Zachary I Shapiro, Esq., and Marisa A.
Terranova, Esq., at Richards Layton & Finger, P.A., in Wilmington,
Delaware. The Debtor's banker and financial advisor is Raymond
James & Associates, Inc., while Bederson, LLC, is the Debtor's
accountant. PMCM, LLC, provides advisory services and executive
leadership to the Debtor. The Debtor's claims and noticing agent
is Omni Management Group, LLC.
The U.S. Trustee for Region 3 has appointed three members to the
Official Committee of Unsecured Creditors.
PHOENIX PAYMENT: Panel Taps Alvarez & Marsal as Consultant
----------------------------------------------------------
The Official Committee of Unsecured Creditors of Phoenix Payment
Systems, Inc. asks permission from the U.S. Bankruptcy Court for
the District of Delaware to employ Alvarez & Marsal North America,
LLC as financial consultant to the Committee, nunc pro tunc to
Aug. 21, 2014.
The Committee requires Alvarez & Marsal to:
(a) advise Committee on matters related to its interests in the
sale of the Debtor's assets;
(b) assist with review a review of the Debtor's cost/benefit
evaluations with respect to the assumption or rejection of
executory contracts and unexpired leases;
(c) assist with a review of the business model, operations,
liquidity situation, properties, assets and liabilities,
financial condition and prospects of the Debtor;
(d) assist in the review of financial information distributed
by the Debtor to the Committee, its advisors and creditors
and others, including, but not limited to, cash flow
projections and budgets, cash receipts and disbursements
analysis and analysis of various asset and liability
accounts;
(e) attend meetings with the Debtor, the Debtor's lenders and
creditors, the Committee and any other official committees
organized in this Chapter 11 case, the U.S. Trustee, other
parties in interest and professionals hired by the same, as
requested;
(f) assist in the review and preparation of information and
analysis necessary for the confirmation of a plan in this
Chapter 11 case; and
(g) render such other general business consulting or such other
assistance as the Committee or its counsel may deem
necessary, consistent with the role of a financial advisor
and not duplicative of services provided by other
professionals in this Chapter 11 case.
Alvarez & Marsal will be paid at these hourly rates:
Managing Directors $625-$850
Directors $475-$625
Associates $350-$475
Analysts $225-$350
Alvarez & Marsal will also be reimbursed for reasonable out-of-
pocket expenses incurred.
Kelly Stapleton, managing director of Alvarez & Marsal, 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.
The Court for the District of Delaware will hold a hearing on the
application on Oct. 28, 2014, at 11:30 a.m. Objections were due
Sept. 23, 2014.
Alvarez & Marsal can be reached at:
Kelly Stapleton
ALVAREZ & MARSAL NORTH AMERICA, LLC
600 Madison Avenue, 8th Floor
New York, NY 10022
Tel: (212) 763-9750
E-mail: kstapleton@alvarezandmarsal.com
About Phoenix Payment
Founded in 2004, Phoenix Payment Systems, Inc., aka Electronic
Payment Systems, aka EPX, is an international payment processor
with corporate headquarters in Wilmington, Delaware, and
technology headquarters in Phoenix, Arizona. It provides
acceptance, processing, support, authorization and settlement
services for credit card, debit card and e-check payments.
Providing processing services at more than 8,700 locations
worldwide, PPS processed, in multiple currencies, 280 million
transactions in 2013 and expects to process 400 million in 2014.
Phoenix Payment Systems sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. Del. Case No. 14-11848) on Aug. 4,
2014, to quickly sell its assets.
As of the Petition Date, the Debtor had total outstanding
liabilities and other obligations of $16.6 million and 9.8 million
shares of outstanding preferred and common stock. Debt to secured
creditor The Bancorp Bank is estimated at $6.2 million.
Judge Mary F. Walrath presides over the case.
The Debtor's attorneys are Richard J. Bernard, Esq., at Foley &
Lardner LLP, in New York; and Mark D. Collins, Esq., Russell
Siberglied, Esq., Zachary I Shapiro, Esq., and Marisa A.
Terranova, Esq., at Richards Layton & Finger, P.A., in Wilmington,
Delaware. The Debtor's banker and financial advisor is Raymond
James & Associates, Inc., while Bederson, LLC, is the Debtor's
accountant. PMCM, LLC, provides advisory services and executive
leadership to the Debtor. The Debtor's claims and noticing agent
is Omni Management Group, LLC.
The U.S. Trustee for Region 3 has appointed three members to the
Official Committee of Unsecured Creditors.
POSITIVEID CORP: Issues $150,000 Convertible Notes
--------------------------------------------------
PositiveID Corporation closed a securities purchase agreement
with Union Capital, LLC, providing for the purchase of two
Convertible Redeemable Notes in the aggregate principal amount of
$100,000, with the first note being in the amount of $50,000 and
the second note being in the amount of $50,000.
The first Note was funded on Sept. 22, 2014, with the Company
receiving $45,000 of net proceeds, and the second Note was
initially paid for by the issuance of an offsetting $50,000
secured note issued by Union to the Company.
The Notes bear interest at the rate of 8% per annum; are due and
payable on Sept. 15, 2015; and may be converted by Union at any
time after 180 days of the date of closing into shares of Company
common stock at a conversion price equal to a 40% discount of the
lowest closing bid price calculated at the time of conversion.
The Notes also contain certain representations, warranties,
covenants and events of default, and increases in the amount of
the principal and interest rates under the Notes in the event of
such defaults.
Meanwhile, on Sept. 22, 2014, the Company closed a Securities
Purchase Agreement with Auctus Private Equity Fund, LLC, providing
for the purchase of a Convertible Promissory Note in the principal
amount of $54,750. The Company received net proceeds of $50,000.
Note bears interest at the rate of 8% per annum; is due and
payable on June 19, 2015; and may be converted by Auctus at any
time after 180 days of the date of closing into shares of Company
common stock at a conversion price equal to a 40% discount of the
average of the two lowest closing bid prices calculated at the
time of conversion. The Note also contain certain
representations, warranties, covenants and events of default, and
increases in the amount of the principal and interest rates under
the Note in the event of those defaults.
About PositiveID
Delray Beach, Fla.-based PositiveID Corporation has historically
developed, marketed and sold RFID systems used for the
identification of people in the healthcare market. Beginning in
early 2011, the Company has focused its strategy on the growth of
its HealthID business, including the continued development of its
GlucoChip, its Easy Check breath glucose detection device, its
iglucose wireless communication system, and potential strategic
acquisition opportunities of businesses that are complementary to
its HealthID business.
PositiveID reported a net loss attributable to common stockholders
of $13.33 million on $0 of revenue for the year ended Dec. 31,
2013, as compared with a net loss attributable to common
stockholders of $25.30 million on $0 of revenue in 2012.
As of June 30, 2014, the Company had $1.19 million in total
assets, $6.98 million in total liabilities, all current, $1.21
million in mandatorily redeemable preferred stock and a $6.99
million total stockholders' deficit.
EisnerAmper LLP, in New York, issued a "going concern"
qualification on the consolidated financial statements for the
year ended Dec. 31, 2013. The independent auditors noted that
the Company has a working capital deficiency and an accumulated
deficit. Additionally, the Company has incurred operating losses
since its inception and expects operating losses to continue
during 2014. These conditions raise substantial doubt about its
ability to continue as a going concern.
PROSPECT PARK: Has Until Dec. 5 to Solicit Acceptances of Plan
--------------------------------------------------------------
The exclusive period in which Prospect Park Networks, LLC, may
solicit acceptances of its plan is enlarged through and including
Dec. 5, 2014, according to an order signed by Judge Mary F.
Walrath of the U.S. Bankruptcy Court for the District of Delaware.
As previously reported by The Troubled Company Reporter, the
Debtor filed a plan to liquidate its assets as it continues to
pursue litigation against the ABC television network. Because the
current exclusive period to solicit acceptances of its Chapter 11
plan expires on Oct. 6, 2014, the Debtor asked a further 60-day
enlargement of the exclusive solicitation period through and
including Dec. 5.
About Prospect Park Networks
Prospect Park Networks, LLC, a Los Angeles, Calif.-based talent
and management company, filed for Chapter 11 bankruptcy (Bankr. D.
Del. Case No. 14-10520) in Wilmington, on March 10, 2014,
estimating $50 million to $100 million in assets, and $10 million
to $50 million in debts. The petition was signed by Jeffrey
Kwatinetz, president.
William E. Chipman, Jr., Esq., and Mark D. Olivere, Esq., at
Cousins Chipman & Brown LLP, in Wilmington, Delaware; and John H.
Genovese, Esq., Michael Schuster, Esq., and Heather L. Harmon,
Esq., at Genovese Joblove & Battista, P.A. serve as the Debtor's
bankruptcy counsel. The Debtor also hired Cohn Reznick LLP as an
ordinary course professional.
The U.S. Trustee for Region 3 selected three creditors to serve on
the Official Committee of Unsecured Creditors. Cole, Schotz,
Meisel, Forman & Leonard, P.A., serves as the Committee's counsel.
PROSPECT PARK: Committee Balks at Plan Exclusivity Extension
------------------------------------------------------------
The Official Committee of Unsecured Creditors in the Chapter 11
case of debtor Prospect Park Networks, LLC, is objecting to the
Debtor's second motion for a plan exclusivity extension.
The Debtor is asking the Court to extend until Dec. 5, 2014, the
period by which it has the exclusive right to solicit acceptances
of its plan of liquidation.
As previously reported by the TCR, the Debtor filed a plan to
liquidate its assets as it continues to pursue litigation against
the ABC television network. The Debtor has also filed a motion to
approve the accompanying disclosure statement and establish
procedures with respect to solicitation, ballot tabulation, and
related matters in connection with the Plan. The solicitation
motion is currently scheduled to be heard on Sept. 25.
Because the current exclusive period to solicit acceptances of its
Chapter 11 plan expires on Oct. 6, 2014, the Debtor asks a further
60-day enlargement of the exclusive solicitation period through
and including Dec. 5.
The Committee, in its objection, stated that the Debtor's case is
a simple tiny Chapter 11 case and the Debtor is not operating.
There are approximately $3,600,000 in general unsecured claims and
a single material asset -- the ABC Litigation.
The Committee noted that the Debtor has sufficient time to
establish a bar date, negotiate with creditors and propose a
consensual plan of liquidation.
About Prospect Park Networks
Prospect Park Networks, LLC, a Los Angeles, Calif.-based talent
and management company, filed for Chapter 11 bankruptcy (Bankr. D.
Del. Case No. 14-10520) in Wilmington, on March 10, 2014,
estimating $50 million to $100 million in assets, and $10 million
to $50 million in debts. The petition was signed by Jeffrey
Kwatinetz, president.
William E. Chipman, Jr., Esq., and Mark D. Olivere, Esq., at
Cousins Chipman & Brown LLP, in Wilmington, Delaware; and John H.
Genovese, Esq., Michael Schuster, Esq., and Heather L. Harmon,
Esq., at Genovese Joblove & Battista, P.A. serve as the Debtor's
bankruptcy counsel. The Debtor also hired Cohn Reznick LLP as an
ordinary course professional.
The U.S. Trustee for Region 3 selected three creditors to serve on
the Official Committee of Unsecured Creditors. Cole, Schotz,
Meisel, Forman & Leonard, P.A., serves as the Committee's counsel.
PROSPECT PARK: Cousins Chipman Now Known as Chipman Brown Cicero
----------------------------------------------------------------
The law firm of Cousins Chipman & Brown, LLP, counsel for Prospect
Park Networks, LLC, notifies the Bankruptcy Court that it has
changed its name to Chipman Brown Cicero & Cole, LLP.
The firm's contact details now reflect as:
William E. Chipman, Jr., Esq.
Mark D. Olivere, Esq.
CHIPMAN BROWN CICERO & COLE, LLP
1007 North Orange Street, Suite 1110
Wilmington, DE 19801
Tel: (302) 295-0191
Fax: (302) 295-0199
E-mail: chipman@chipmanbrown.com
olivere@chipmanbrown.com
About Prospect Park Networks
Prospect Park Networks, LLC, a Los Angeles, Calif.-based talent
and management company, filed for Chapter 11 bankruptcy (Bankr. D.
Del. Case No. 14-10520) in Wilmington, on March 10, 2014,
estimating $50 million to $100 million in assets, and $10 million
to $50 million in debts. The petition was signed by Jeffrey
Kwatinetz, president.
William E. Chipman, Jr., Esq., and Mark D. Olivere, Esq., at
Cousins Chipman & Brown LLP, in Wilmington, Delaware; and John H.
Genovese, Esq., Michael Schuster, Esq., and Heather L. Harmon,
Esq., at Genovese Joblove & Battista, P.A. serve as the Debtor's
bankruptcy counsel. The Debtor also hired Cohn Reznick LLP as an
ordinary course professional.
The U.S. Trustee for Region 3 selected three creditors to serve on
the Official Committee of Unsecured Creditors. Cole, Schotz,
Meisel, Forman & Leonard, P.A., serves as the Committee's counsel.
PVA APARTMENTS: Voluntary Chapter 11 Case Summary
-------------------------------------------------
Debtor: PVA Apartments LLC
343 Ridge Avenue
Oakland, CA 94591
Case No.: 14-43966
Chapter 11 Petition Date: September 29, 2014
Court: United States Bankruptcy Court
Northern District of California (Oakland)
Judge: Hon. Roger L. Efremsky
Debtor's Counsel: Sydney Jay Hall, Esq.
LAW OFFICES OF SYDNEY JAY HALL
1308 Bayshore Hwy. #220
Burlingame, CA 94010
Tel: (650) 342-1830
Email: sydneyhalllawoffice@yahoo.com
Estimated Assets: $10 million to $50 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Eric Terrell, shareholder.
The Debtor did not file a list of its largest unsecured creditors
when it filed the petition.
QIMONDA AG: Administrator Reaches EUR260M Deal With Ex-Parent
-------------------------------------------------------------
Law360 reported that German semiconductor maker Infineon
Technologies AG has agreed to pay its bankrupt former subsidiary
Qimonda AG EUR260 million ($334 million) to settle all outstanding
disputes between the two outside of a separate multibillion-dollar
insolvency case pending in Munich. According to the report,
Qimonda's German insolvency administrator Michael Jaffe will
pocket a EUR135 million settlement payment and sell its patent
portfolio back to Infineon for a separate EUR125 million sum,
according to Wednesday statements from both companies.
About Qimonda AG
Qimonda AG (NYSE: QI) -- http://www.qimonda.com/-- was a global
memory supplier with a diversified DRAM product portfolio. The
Company generated net sales of EUR1.79 billion in financial year
2008 and had -- prior to its announcement of a repositioning of
its business -- roughly 12,200 employees worldwide, of which
1,400 were in Munich, 3,200 in Dresden and 2,800 in Richmond, Va.
Qimonda AG commenced insolvency proceedings in a local court in
Munich, Germany, on Jan. 23, 2009. On June 15, 2009, QAG filed
a petition (Bankr. E.D. Va. Case No. 09-14766) for relief under
Chapter 15 of the U.S. Bankruptcy Code.
Qimonda North America Corp., an indirect and wholly owned
subsidiary of QAG, is the North American sales and marketing
subsidiary of QAG. QNA is also the parent company of Qimonda
Richmond LLC. QNA and QR sought Chapter 11 protection (Bankr.
D. Del. Case No. 09-10589) on Feb. 20, 2009. Mark D. Collins,
Esq., Michael J. Merchant, Esq., and Lee E. Kaufman, Esq., at
Richards Layton & Finger PA, in Wilmington Delaware; and Mark
Thompson, Esq., Morris J. Massel, Esq., and Terry Sanders, Esq.,
at Simpson Thacher & Bartlett LLP, in New York City, represented
the Debtors as counsel. Roberta A. DeAngelis, the United States
Trustee for Region 3, appointed seven creditors to serve on an
official committee of unsecured creditors. Jones Day and Ashby &
Geddes represented the Committee. In its bankruptcy petition,
Qimonda Richmond, LLC, estimated more than US$1 billion in assets
and debts. The information, the Chapter 11 Debtors said, was
based on QR's financial records which are maintained on a
consolidated basis with QNA.
In September 2011, the Chapter 11 Debtors won confirmation of
their Chapter 11 liquidation plan which projects that unsecured
creditors with claims between US$33 million and US$35 million
would have a recovery between 6.1% and 11.1%. No secured claims
of significance remained.
RADIOSHACK CORP: Investment Talks With Standard General Ongoing
---------------------------------------------------------------
Standard General has been in discussions with RadioShack Corp.
regarding a proposal on a business operating plan and certain ways
to improve the Company's liquidity position in advance of the
holiday shopping season, according to a regulatory filing with the
U.S. Securities and Exchange Commission.
Proposals under discussion include Standard General and certain
other investors purchasing loans and other commitments under the
Company's asset backed credit facility from its existing lenders.
Under such a proposed transaction, Standard General and certain
other New Investors may propose to subordinate their investment in
the Credit Facility to other investors in order to improve the
near-term liquidity available to fund the Company's holiday
working capital needs. Pursuant to such a proposal, the
investment by the New Investors could be the first step of a
broader recapitalization of RadioShack proposed to be completed by
early 2015, which may include Standard General and certain other
New Investors acquiring preferred equity convertible into common
equity, board nomination rights and corresponding changes to the
Company's structure.
The New Investors have provided draft financing commitments to the
Company to fund such a transaction. Discussions are ongoing among
the Company, the New Investors, and the existing lenders under the
Credit Facility. No assurances can be given that the proposed
transaction will occur, or in the form currently under discussion.
Standard General L.P. and its affiliates disclosed that as of
Sept. 23, 2014, they beneficially owned 10,130,928 shares of
common stock of RadioShack Corp. representing 9.8 percent of the
shares outstanding.
A copy of the regulatory filing is available for free at:
http://is.gd/8PleDn
About Radioshack Corporation
RadioShack (NYSE: RSH) -- http://www.radioshackcorporation.com--
is a national retailer of innovative mobile technology products
and services, as well as products related to personal and home
technology and power supply needs. RadioShack's retail network
includes more than 4,300 company-operated stores in the United
States, 270 company-operated stores in Mexico, and approximately
1,000 dealer and other outlets worldwide.
Radioshack reported a net loss of $400.2 million in 2013, a net
loss of $139.4 million in 2012, and net income of $72.2 million in
2011. The Company's balance sheet at Aug. 2, 2014, showed $1.14
billion in total assets, $1.21 billion in total liabilities and a
$63 million total shareholders' deficit.
* * *
As reported by the TCR on Sept. 15, 2014, Standard & Poor's
Ratings Services lowered its corporate credit rating on Fort
Worth, Texas-based RadioShack Corp. to 'CCC-' from 'CCC'.
"The downgrade comes as the company announced it will seek
capital, and that such a transaction could include a debt
restructuring in addition to store closures and other measures,"
said Standard & Poor's credit analyst Charles Pinson-Rose.
In the Sept. 16, 2014, edition of the TCR, the TCR reported that
Fitch Ratings had downgraded the Long-term Issuer Default Rating
(IDR) for RadioShack Corporation (RadioShack) to 'C' from 'CC'.
The downgrade reflects the high likelihood that RadioShack will
need to restructure its debt in the next couple of months.
The TCR reported on March 13, 2014, that Moody's Investors Service
downgraded RadioShack Corporation's corporate family rating to
Caa2 from Caa1. "The continuing negative trend in RadioShack's
sales and margins has resulted in a precipitous drop in
profitability causing continued deterioration in credit metrics
and liquidity," Mickey Chadha, Senior Analyst at Moody's said.
RESIDENTIAL CAPITAL: Kicks $470M MBS Action to Bankruptcy Court
---------------------------------------------------------------
Law360 reported that a New York federal judge ruled that
litigation alleging a Capital One Finance Corp. unit sold $470
million in defective mortgage-backed securities to Residential
Capital LLC should play out in ResCap's bankruptcy court in the
interests of judicial efficiency. According to the report, U.S.
District Judge P. Kevin Castel sided with ResCap despite finding
that its actions in bringing the case smacked of forum shopping.
The suit is one of 84 launched to hold mortgage originators
accountable for the $8.7 billion allowed claim that ResCap unit
Residential Funding Co. LLC incurred in a 2012 settlement with
hundreds of securitization trusts and other loan purchasers.
About Residential Capital
Residential Capital LLC, the unprofitable mortgage subsidiary of
Ally Financial Inc., filed for bankruptcy protection (Bankr.
S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012.
Neither Ally Financial nor Ally Bank is included in the bankruptcy
filings.
ResCap, one of the country's largest mortgage originators and
servicers, was sent to Chapter 11 with 50 subsidiaries amid
"continuing industry challenges, rising litigation costs and
claims, and regulatory uncertainty," according to a company
statement.
ResCap disclosed $15.68 billion in assets and $15.28 billion in
liabilities at March 31, 2012.
Centerview Partners LLC and FTI Consulting are acting as financial
advisers to ResCap. Morrison & Foerster LLP is acting as legal
adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is
the conflicts counsel. Rubenstein Associates, Inc., is the public
relations consultants to the Company in the Chapter 11 case.
Morrison Cohen LLP is advising ResCap's independent directors.
Kurtzman Carson Consultants LLP is the claims and notice agent.
Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves
as counsel to Ally Financial.
ResCap sold most of the businesses for a combined $4.5 billion.
The Bankruptcy Court in November 2012 approved ResCap's sale of
its mortgage servicing and origination platform assets to Ocwen
Loan Servicing, LLC and Walter Investment Management Corporation
for $3 billion; and its portfolio of roughly 50,000 whole loans to
Berkshire Hathaway for $1.5 billion.
Judge Martin Glenn in December 2013 confirmed the Joint Chapter 11
Plan co-proposed by Residential Capital and the Official Committee
of Unsecured Creditors.
REVEL AC: Four Bidders Emerge at Bankruptcy Auction
---------------------------------------------------
Tom Corrigan, writing for Daily Bankruptcy Review, reported that
four bidders emerged at tha auction to sell Atlantic City, N.J.'s
bankrupt Revel Casino Hotel. The stalking horse bidder is the $94
million offer by Glenn Straub's Polo North Country Club Inc.
According to the report, lawyers for Mr. Straub said he intends to
submit a higher offer than the current bid of $94 million.
Reuters reported that at least two last-minute bids were received
for the Revel casino, in addition to Mr. Straub's bid.
About Revel AC
Revel AC, Inc. -- http://www.revelresorts.com/-- owns and
operates Revel, a Las Vegas-style, beachfront entertainment resort
and casino located on the Boardwalk in the south inlet of Atlantic
City, New Jersey.
Revel AC Inc. and five of its affiliates sought bankruptcy
protection (Bankr. D.N.J. Lead Case No. 14-22654) on June 19,
2014, to pursue a quick sale of the assets.
The Chapter 11 cases are assigned to Judge Gloria M. Burns. The
Debtors' Chapter 11 cases are jointly consolidated for procedural
purposes.
Revel AC estimated assets ranging from $500 million to $1 billion,
and the same amount of liabilities.
White & Case, LLP, and Fox Rothschild, LLP, serve as the Debtors'
Counsel, and Moelis & Company, LLC, is the investment banker. The
Debtors' solicitation and claims agent is Alixpartners, LLP.
The prepetition first lenders are represented by Cadwalader,
Wickersham & Taft LLP. The prepetition second lien lenders are
represented by Paul, Weiss, Rifkind, Wharton & Garrison LLP. The
DIP agent is represented by Milbank, Tweed, Hadley & McCloy LLP.
This is Revel AC's second trip to bankruptcy. The company first
sought bankruptcy protection (Bankr. D.N.J. Lead Case No. 13-
16253) on March 25, 2013, with a prepackaged plan that reduced
debt by $1.25 billion. Less than two months later on May 15,
2013, the 2013 Plan was confirmed and became effective on May 21,
2013.
REVEL AC: Heads to Sale as Late Bids Emerge
-------------------------------------------
Tom Hals, writing for Reuters, reported that at least two last-
minute bids were received for Atlantic City's Revel casino, in
addition to the $90 million bid from Glenn Straub, which bid will
serve as initial or stalking horse bid. According to the report,
citing a person familiar with the bidding process, the last-minute
bids came from a party involved with casino gaming outside New
Jersey and a real estate developer.
About Revel AC
Revel AC, Inc. -- http://www.revelresorts.com/-- owns and
operates Revel, a Las Vegas-style, beachfront entertainment resort
and casino located on the Boardwalk in the south inlet of Atlantic
City, New Jersey.
Revel AC Inc. and five of its affiliates sought bankruptcy
protection (Bankr. D.N.J. Lead Case No. 14-22654) on June 19,
2014, to pursue a quick sale of the assets.
The Chapter 11 cases are assigned to Judge Gloria M. Burns. The
Debtors' Chapter 11 cases are jointly consolidated for procedural
purposes.
Revel AC estimated assets ranging from $500 million to $1 billion,
and the same amount of liabilities.
White & Case, LLP, and Fox Rothschild, LLP, serve as the Debtors'
Counsel, and Moelis & Company, LLC, is the investment banker. The
Debtors' solicitation and claims agent is Alixpartners, LLP.
The prepetition first lenders are represented by Cadwalader,
Wickersham & Taft LLP. The prepetition second lien lenders are
represented by Paul, Weiss, Rifkind, Wharton & Garrison LLP. The
DIP agent is represented by Milbank, Tweed, Hadley & McCloy LLP.
This is Revel AC's second trip to bankruptcy. The company first
sought bankruptcy protection (Bankr. D.N.J. Lead Case No. 13-
16253) on March 25, 2013, with a prepackaged plan that reduced
debt by $1.25 billion. Less than two months later on May 15,
2013, the 2013 Plan was confirmed and became effective on May 21,
2013.
REVSTONE INDUSTRIES: Unit Seeks Exclusive Periods Extension
-----------------------------------------------------------
TPOP, LLC, f/k/a Metavation, LLC, a subsidiary of Revstone
Industries, LLC, asks the U.S. Bankruptcy Court for the District
of Delaware to extend its exclusive plan filing period until
Jan. 22, 2015, and its exclusive plan solicitation period until
March 22, 2015.
TPOP's exclusive filing period expired on Sept. 25, and its
current exclusive solicitation period will expire on Nov. 24. The
Debtor said the additional time will be used to finalize a plan
based on the settlement with the Pension Benefit Guaranty
Corporation. Additionally, the extension will be used to continue
the Debtor's review and analysis of claims filed against the
estate, respond to and oppose requests for payment of
administrative claims and prosecute litigation to recover funds
that were fraudulently transferred for the benefit of the Debtor's
former principal, George Hofmeister.
About Revstone Industries et al.
Lexington, Kentucky-based Revstone Industries LLC, a maker of
truck parts, filed for Chapter 11 bankruptcy (Bankr. D. Del. Case
No. 12-13262) on Dec. 3, 2012. Judge Brendan Linehan Shannon
oversees the case. Laura Davis Jones, Esq., Timothy P. Cairns,
Esq., and Colin Robinson, Esq., at Pachulski Stang Ziehl & Jones
LLP represent Revstone. In its petition, Revstone estimated under
$50 million in assets and debts.
Affiliate Spara LLC filed its Chapter 11 petition (Bankr. D. Del.
Case No. 12-13263) on Dec. 3, 2012.
Lexington-based Greenwood Forgings, LLC (Bankr. D. Del. Case No.
13-10027) and US Tool & Engineering LLC (Bankr. D. Del. Case No.
13-10028) filed separate Chapter 11 petitions on Jan. 7, 2013.
Judge Shannon also oversees the cases.
Duane David Werb, Esq., at Werb & Sullivan, serves as bankruptcy
counsel to Greenwood and US Tool. Greenwood estimated $1 million
to $10 million in assets and $10 million to $50 million in debts.
US Tool & Engineering estimated under $1 million in assets and
$1 million to $10 million in debts. The petitions were signed by
George S. Homeister, chairman.
Metavation, also known as Hillsdale Automotive, LLC, joined parent
Revstone in Chapter 11 (Bankr. D. Del. Case No. 13-11831) on
July 22, 2013, to sell the bulk of its assets to industry rival
Dayco for $25 million, absent higher and better offers.
Metavation has tapped Pachulski as its counsel. Pachulski also
serves as counsel to Revstone and Spara. Metavation also has
tapped McDonald Hopkins PLC as special counsel, and Rust
Consulting/Omni Bankruptcy as claims agent and to provide
administrative services. Stuart Maue is fee examiner.
Mark L. Desgrosseilliers, Esq., Ericka Fredricks Johnson, Esq.,
Steven K. Kortanek, Esq., and Matthew P. Ward, Esq., at Womble
Carlyle Sandridge & Rice, LLP, represent the Official Committee of
Unsecured Creditors in Revstone's case.
Boston Finance Group, LLC, a committee member, also has hired as
counsel Gregg M. Galardi, Esq., and Sarah E. Castle, Esq., at DLA
Piper LLP.
ROCHDALE SECURITIES: Section 341(a) Meeting Set for Oct. 27
-----------------------------------------------------------
A meeting of creditors in the bankruptcy case of Rochdale
Securities, LLC, will be held on Oct. 27, 2014, at 10:00 a.m. at
Office of the UST. Proofs of claims are due by Jan. 26, 2015.
This is the first meeting of creditors required under Section
341(a) of the Bankruptcy Code in all bankruptcy cases.
All creditors are invited, but not required, to attend. This
meeting of creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Rochdale Securities, LLC, filed a Chapter 11 bankruptcy petition
(Bankr. D. Conn. Case No. 14-51485) in Bridgeport, Connecticut, on
Sept. 23, 2014. Daniel J. Crowley signed the petition as
president. The Debtor estimated $10 million to $50 million in
assets and $1 million to $10 million in debt. Zeisler and
Zeisler, PC, serves as the Debtor's counsel. Judge Alan H.W.
Shiff is assigned to the case.
S.B. RESTAURANT: Court OKs Grant Thornton as Committee Advisor
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California
authorized the Official Committee of Unsecured Creditors for S.B.
Restaurant Co. and its debtor-affiliates to retain Grant Thornton
LLP as its financial advisor.
The firm will:
a) assist and advise the Committee in the analysis of the
current financial position of the Debtors;
b) assist and advise the Committee in its analysis of proposed
transactions or other actions for which the Debtor or other
parties in interest seek Court approval including, but not
limited to, evaluation of competing bids in connection with
the divestiture of corporate assets, debtor-in-possession
financing or use of cash collateral, assumption/rejection of
leases, extensions of exclusivity, objections to claims or
liens, and other executory contracts, management compensation
and retention and severance plans;
c) assist and advise the Committee in its analysis of the
Debtors' internally prepared financial statements and
related documentation, in order to evaluate performance
of the Debtors as compared to its projected results; and
d) attend and advise at meetings/calls with the Committee and
its counsel and representatives of the Debtors and other
parties.
The firm's standard hourly rates and discounted hourly rates:
Standard Standard
Classification Hourly Rates Hourly Rates at 85%
-------------- ------------ -------------------
Partner/Principal/ $695 $591
Managing Director
Director $610 $519
Manager $465 $396
Senior Associate $360 $306
Associate $250 $213
Paraprofessional $175 $149
Kenneth Simon, managing director of the firm, assured the Court
that the firm is a "disinterested person" within the meaning of
Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Kenneth Simon
Managing Director
GRANT THORNTON LLP
666 Third Avenue
New York, NY 10017
Tel: 212.542.9890
E-mail: kenneth.simon@us.gt.com
About S.B. Restaurant Co.
S.B. Restaurant Co. dba Elephant Bar Global Grill/Wok Kitchen, now
a chain of 29 restaurants in seven states, filed a petition for
Chapter 11 protection (Bankr. C.D. Cal. Case No. 14-13778) on June
17, 2014, in Santa Ana, California. The case is assigned to Judge
Erithe A. Smith.
The Debtors' counsel is Jeffrey N. Pomerantz, Esq., and John W.
Lucas, Esq., at Pachulski Stang Ziehl & Jones LLP, in Los Angeles,
California. The Debtors' chief restructuring officers are from
Deloitte Transactions & Business Analytics LLP, while their
investment banker is Mastodon Ventures, Inc. The Debtors'
noticing claims and balloting agent is Rust Consulting Omni
Bankruptcy.
An official committee of unsecured creditors was appointed in the
case of S.B. Restaurant Co. Debtors' cases. The panel comprises
of (1) General Growth Properties Inc., c/o Julie Minnick Bowden of
Chicago, IL; (2) The Macerich Company, c/o Bill Palmer of
Pittsford, NY; and (3) Global Media Group c/o Mark Torres of
Rancho Santa Margarita, CA. The Committee retained Cooley LP as
its counsel.
S.B. RESTAURANT: Wants Plan Exclusivity Extended Until February
---------------------------------------------------------------
S.B. Restaurant Co. and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Central District of California to extend
their exclusive periods to:
a) file a Chapter 11 plan until Feb. 11, 2015; and
b) solicit acceptances from creditors for the plan until April
12, 2015.
The Debtors tell the Court that their current plan filing deadline
will expire on Oct. 14, 2014.
The Debtors say they entered into a sale deal with CM7 Capital
Partners LLC, which has a contractual right to direct them to
assume and assign certain of their unexpired real property
leases through Jan. 12, 2015, and up until six months after
closing of that sale deal. They are required to maintain the
designated real property leases and general contracts and not
reject them until the buyer notifies them that it either will
take assignment or that such real property lease or contract
should be an excluded asset, according to the Debtors.
The Debtors note that the Official Committee of Unsecured
Creditors is supporting the request for an extension.
About S.B. Restaurant Co.
S.B. Restaurant Co. dba Elephant Bar Global Grill/Wok Kitchen, now
a chain of 29 restaurants in seven states, filed a petition for
Chapter 11 protection (Bankr. C.D. Cal. Case No. 14-13778) on June
17, 2014, in Santa Ana, California. The case is assigned to Judge
Erithe A. Smith.
The Debtors' counsel is Jeffrey N. Pomerantz, Esq., and John W.
Lucas, Esq., at Pachulski Stang Ziehl & Jones LLP, in Los Angeles,
California. The Debtors' chief restructuring officers are from
Deloitte Transactions & Business Analytics LLP, while their
investment banker is Mastodon Ventures, Inc. The Debtors'
noticing claims and balloting agent is Rust Consulting Omni
Bankruptcy.
An official committee of unsecured creditors was appointed in the
case of S.B. Restaurant Co. Debtors' cases. The panel comprises
of (1) General Growth Properties Inc., c/o Julie Minnick Bowden of
Chicago, IL; (2) The Macerich Company, c/o Bill Palmer of
Pittsford, NY; and (3) Global Media Group c/o Mark Torres of
Rancho Santa Margarita, CA. The Committee retained Cooley LP as
its counsel.
SEARS METHODIST: Caprock Gets Final OK to Incur $2.35MM Loan
------------------------------------------------------------
The Bankruptcy Court authorized Debtor Sears Caprock Retirement
Corporation to obtain postpetition financing in the form of a loan
made available to the Debtor in the principal aggregate amount of
$2,350,000.
The Debtor, in its motion, requested for authorization to
obtain postpetition financing with superpriority claims and first
priority priming liens senior to any prepetition or postpetition
liens in the principal aggregate amount of $1,500,000 from
Santander Bank, N.A., the DIP Lender.
Caprock owns and operates Mesa Springs Retirement Village, a
senior living facility located in Abilene, Texas. In the ordinary
course of its business, Caprock requires cash on hand and cash
flow from Mesa Springs' operations to fund its working capital,
liquidity needs, and other routine payables. In addition, Caprock
requires cash on hand to fund its chapter 11 case and to
successfully reorganize. All of Caprock's cash and cash proceeds
are encumbered by security interests in favor of Santander Bank,
N.A.
Postpetition financing, in addition to the use of cash collateral,
is necessary in order for the Debtor to preserve sufficient
liquidity to maintain ongoing day-to-day operations and fund its
working capital needs.
The terms of the DIP financing include:
Borrower: Sears Caprock Retirement Corporation
DIP Lender: Santander Bank, N.A.
Amount of Facility: $1,500,0005 committed principal amount
multiple draw term loan facility;
provided, however, that not more than
$700,000 is available to be borrowed
until the entry by the Court of a
final order.
Use of Proceeds: To pay ordinary course post-petition
operating expenses of borrower during
the pendency of the Bankruptcy Case in
accordance with the provisions of the
budget.
Security and Priority: (i) to secure all obligations of
borrower under the Facility, DIP
lender would receive a fully perfected
first priority and priming lien and
security interest on all assets of the
Debtor, whether now owned or hereafter
acquired; (ii) the obligations of
borrower under the Facility would have
superpriority status over any and all
other administrative expenses, subject
to carve out on certain expenses.
Maturity: The earliest of, among other things
(a) the termination of the DIP
Facility by lender as a result of an
event of default; (b) the approval and
consummation of a sale of all or
substantially all of borrower's
assets; and (c) Jan. 4, 2015.
Interest Rate: Outstanding obligations would accrue
interest at a per annum rate equal to
LIBOR + 6.50%, subject to a floor of
the Libor Rate of 2%.
Following an event of default, at the
option of lender, outstanding
obligations would accrue interest at a
per annum rate equal to 2.0% above the
then applicable interest rate.
The Committee's Objection
The Official Committee of Unsecured Creditors objected to the DIP
motion to the extent that the proposed final order granted
Santander Bank, N.A., a lien on all avoidance actions belonging to
Caprock's estate.
According to the Committee, avoidance actions must be preserved
for the benefit of Caprock's estate and its creditors. The DIP
lender is the only lender in thee cases seeking a lien on all
avoidance actions.
The Committee is represented by:
Clifton R. Jessup, Jr.
Bryan L. Elwood, Esq.
GREENBERG TRAURIG, LLP
2200 Ross Ave., Suite 5200
Dallas, TX 75201
Tel: (214) 665-3600
Fax: (214) 665-5938
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.
SEAR METHODIST: Greenberg Traurig OK'd as Counsel for Committee
---------------------------------------------------------------
The Bankruptcy Court authorized the Official Committee of
Unsecured Creditors in the Chapter 11 cases of Sears Methodist
Retirement System, Inc., et al., to retain Greenberg Traurig, LLP
as its counsel.
As reported in the Troubled Company Reporter on Aug. 15, 2014,
Greenberg Traurig is expected to, among other things:
(a) consult with the Debtors' professionals or representatives
concerning the administration of these Cases;
(b) prepare and review pleadings, motions and correspondence;
and
(c) appear at and be involved in proceedings before the Court.
Greenberg Traurig will be paid at these hourly rates:
Clifton R. Jessup, Jr. $700 (standard rate is $860)
Nancy A. Peterman $695 (standard rate is $850)
David D. Cleary $595 (standard rate is $595)
Bryan L. Elwood $500 (standard rate is $580)
Paul T. Martin $425 (standard rate is $515)
Rebecca D. Rosenthal $250 (standard rate is $350)
Greenberg Traurig will also be reimbursed for reasonable out-of-
pocket expenses incurred.
While Greenberg Traurig's standard hourly rates are set at a level
designed to fairly compensate Greenberg Traurig for its work and
to cover fixed routine overhead expenses, the Committee requested,
and Greenberg Traurig voluntarily agreed, to provide discounted
hourly rates to the Committee and to cap their blended hourly
rate, solely for purposes of these Cases given that, among other
things, these Cases involve not-for-profit Debtors and to
accommodate the Committee's request for a fee accommodation. With
respect to the blended hourly rate agreement, in the event that
Greenberg Traurig's blended hourly rate (the "Blended Rate"),
computed by dividing the total fees by the total number of hours
incurred during the fee application period, exceeds $500 per hour,
Greenberg Traurig agrees to adjust its requested fees for that
time period to equal the total number of hours incurred multiplied
by $500 (the "Blended Rate Limitation"). Neither the Blended Rate
nor the Blended Rate Limitation shall affect Greenberg Traurig's
requests for reimbursement of actual and necessary expenses and
disbursements.
Clifton R. Jessup, Jr., shareholder of Greenberg Traurig, 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.
The Office for the U.S. Trustee has recently adopted new
Guidelines for Reviewing Applications for Compensation and
Reimbursement of Expenses Filed under 11 U.S.C. Section 330 by
Attorneys in Large Chapter 11 Cases (the "New UST Guidelines").
Unless otherwise agreed or ordered, Greenberg Traurig intends to
make a reasonable effort to comply with the New UST Guidelines
both in connection with this application and the interim and final
fee applications to be filed by Greenberg Traurig in these Chapter
11 Cases. Greenberg Traurig also intends to work cooperatively
with the U.S. Trustee Program to comply with the New UST
Guidelines.
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.
SEARS METHODIST: Sears Plains Approved to Use Cash Until Oct. 2
---------------------------------------------------------------
The Bankruptcy Court approved a stipulation approving third
extension of interim use of cash collateral by Debtor Sears Plains
Retirement Corporation.
The stipulation, entered between the Debtor and lender Prosperity
Bank, N.A., authorize the use of the cash collateral which
includes the reserve funds until Oct. 2, 2014.
A copy of the budget is available for free at:
http://bankrupt.com/misc/SearsMethodist_339_stipCC.pdf
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.
SELECT-TV SOLUTIONS: Posts $1.14-Mil. Loss in July 31 Quarter
-------------------------------------------------------------
Select-TV Solutions, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q, disclosing
a net loss of $1.14 million on $nil of revenues for the three
months ended July 31, 2014, compared to a net loss of $5,044 on
$nil of revenues for the same period last year.
The Company's balance sheet at July 31, 2014, showed $5.15 million
in total assets, $381,340 in total liabilities and total
stockholders' equity of $4.77 million.
The Company has incurred cumulative losses since inception of
$1.64 million. These conditions raise substantial doubt about the
ability of the Company to continue as a going concern.
A copy of the Form 10-Q is available at:
http://is.gd/v3HIM1
Select-TV Solutions Inc., formerly Sedition Films Inc., is an end-
to-end Internet protocol television (IPTV) solutions provider for
the hospitality and telecommunication sectors. The Company's
solutions include EMAGINE hotels, EMAGINE healthcare, EMAGINE
homes and XCREENS signage. Select-TV's EMAGINE Hotels is an
advanced HiTV Solution. Select-TV's EMAGINE Healthcare solution
offers healthcare practitioners the platform and the tools to
enhance patient engagement. EMAGINE Healthcare delivers
continuous patient engagement, patient education and awareness,
and patient comfort and recovery. EMAGINE Homes by Select-TV is
specifically designed to address the challenges faced by
telecommunications and broadband providers. It is designed,
developed and marketed to suit content on demand from Internet,
social networking, and on demand services. Select-TV XCREENS is
an advanced digital signage system leveraging on the same
converged IPTV infrastructure.
SNO MOUNTAIN: Court Okays Gellert Scali as Trustee's Counsel
------------------------------------------------------------
Gary F. Seitz, the Chapter 11 trustee of SNO Mountain, LP sought
and obtained permission from the U.S. Bankruptcy Court for the
Eastern District of Pennsylvania to employ Gellert Scali Busenkell
& Brown LLC as special litigation counsel to the Chapter 11
Trustee.
The Chapter 11 Trustee requires Gellert Scali to:
(a) investigate potential preferential transfers and avoidance
actions against various parties under Chapter 5 of the
Bankruptcy Code;
(b) represent the estate's interest in pursuit of avoidance
actions including the recovery of preferential transfers
and insider transfers;
(c) investigate and pursue potential litigation claims against
insiders in connection with various causes of action
including, but not limited to, breach of contract, breach
of the duty of good faith and fair dealing, fraud,
fraudulent inducement, negligent misrepresentation,
piercing the corporate veil, intentional interference with
a contractual relationship, and breach of fiduciary duties;
and
(d) provide the Chapter 11 Trustee with legal advice with
respect to resolution and possible settlement of any such
litigation.
Gellert Scali agreed to handle the matter on a contingency fee
basis. Gellert Scali proposes to charge a contingency fee of 25%
for all collections obtained on cases settled prior to the filing
of a complaint, 35% of all collections obtained on cases settled
after the filing of a complaint but prior to the earlier of either
four weeks before trial on the merits, a court ordered mediation
session or the entry of a judgment, and 40% of all collections
obtained thereafter. Gellert Scali will charge an additional 5%
for post judgment collection involving the judicial enforcement of
the judgment or for appellate work.
Gellert Scali will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Gary F. Seitz, partner of Gellert Scali, 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.
Gellert Scali can be reached at:
Gary F. Seitz, Esq.
GELLERT SCALI BUSENKELL & BROWN LLC
The Curtis Center
601 Walnut Street, Suite 280 South
Philadelphia, PA 19106
Tel: (215) 238-0010
Fax: (215) 238-0016
E-mail: gseitz@gsbblaw.com
About Sno Mountain
Various parties -- predominated by various limited partners of Sno
Mountan LP, including Richard Ford, Charles Hertzog, Edward
Reitmeyer, who are each guarantors of certain obligations owing by
Sno Mountain -- filed an involuntary Chapter 11 petition against
Sno Mountain (Bankr. E.D. Pa. Case No. 12-19726) on Oct. 15, 2012.
The other petitioning parties include Wynnewood Capital Partners,
L.L.C., t/a WCP Snow Mountain Partners, L.P., and Kathleen
Hertzog.
The Alleged Debtor is the owner and operator of a popular ski
mountain resort and water park known as "Sno Mountain," located at
1000 Montage Mountain Road in Scranton, Pennsylvania. The
Debtor's bankruptcy case is a "single asset real estate" case
within the meaning of 11 U.S.C. Sec. 101(51)(B).
Judge Jean K. FitzSimon oversees the case. Brian Joseph Smith,
Esq., at Brian J. Smith & Associates PC, represents the
petitioning creditors.
Gary Seitz has been appointed as trustee overseeing the bankruptcy
of the Sno Mountain recreation complex. Maschmeyer Karalis PC
serves as counsel to the trustee.
The Trustee has received Court authority to sell substantially all
of the Debtor's assets to Montage Mountain Resorts, L.P., for
$5.125 million.
ST. ANNE RETIREMENT: Fitch Affirms BB+ Rating on $19MM 2012 Bonds
-----------------------------------------------------------------
Fitch Ratings has affirmed the BB+ rating on the following
Lancaster County Hospital Authority revenue bonds, issued on
behalf of Saint Anne Retirement Community (SARC):
-- $19.8 million series 2012.
The Rating Outlook is Stable.
Security
The bonds are secured by a gross revenue pledge, mortgage lien,
and debt service reserve fund.
Key Rating Drivers
Occupancy Pressured: During 2014 overall occupancy was pressured,
particularly in the skilled nursing facility (SNF) and personal
care. As of Sept. 30 2014, the SNF was 84.8% occupied and the
personal care unit (PCU) was 81.4% occupied. This reflects the
impact from converting SNF space to a 51-bed memory support unit
(MSU) during the year, which will be completed in October, and
also reflects the impact from lower inpatient census at area
hospitals. Management has been successful in managing expenses to
census, and independent living unit (ILU) occupancy remained
steady.
Sufficient Operating Profitability: SARC's profitability metrics
are solid for the below investment-grade (BIG) rating category and
adequate against its debt level. Its operating ratio was 93.8% in
fiscal 2014 (year-end June 30) and 95.6% since fiscal 2010, below
Fitch's BIG median of 98.4%. Additionally, reliance on entrance
fees and investment income is minimal.
Capital Plans Progressing: SARC is starting development on an
expected ILU expansion, which will be funded initially from
approximately $5 million in existing bond funds. The project will
progress in phases, with any financing likely outside the next 12-
months. While Fitch believes SARC has bandwidth to absorb a phased
expansion which may include additional leverage, this rating
action does not incorporate the credit impact of such.
Some Debt Capacity: SARC's current debt burden is currently
modest, evidenced by maximum annual debt service (MADS) equal to
10% of total revenue and 7.7x debt to net available. Of note,
SARC's revenue-only coverage has averaged 1.4x since fiscal 2010,
ahead of Fitch's BIG median of 1.2x.
Modest Liquidity: At fiscal year ended June 30, 2014, SARC had
$8.7 million in unrestricted cash and investments, equating to
217.6 days cash on hand (DCOH), 44.6% cash to debt and a 5.4x
cushion ratio compared to Fitch's respective 'BIG' medians of
233.3 DCOH, 36.7% and 4.9x. Fitch believes that this level of
liquidity is solid for a Type C fee-for-service facility at a
'BB+' rating level.
Rating Sensitivities
Capital Plans: As expected, SARC has started pre-development on
its ILU expansion plan, and Fitch anticipates final determination
of size, phasing, and financing to occur sometime in late 2015.
While Fitch believes the rating could absorb this expansion, the
final plans will be reviewed and any necessary rating action taken
within the next 12 months.
Credit Profile
Saint Anne's Retirement Community (SARC) is located outside
Columbia, PA in the township of West Hempfield, approximately 35
miles southeast of Harrisburg and 10 miles west of Lancaster.
SARC is sponsored by the Religious Congregation of Sisters of the
Adorers of the Blood of Christ, United States Province (ASC), and
operates a 112-bed SNF, 53 ALUs, and 71 rental and entrance fee
ILUs. In November 2014, SARC will also open a 51-bed MSU. In
fiscal 2014 (year ended June 30), SARC reported approximately
$15.5 million of total revenues.
Steady Profitability Despite Census
Despite some pressure in overall occupancy during fiscal 2014,
SARC sustained solid operating performance and ended the year very
close to budget. Working quickly to address an over $600K variance
in operating revenues due to below-budget census, management
effectively reduced spending to narrow the operating gap to just
$20K. Further, there were a solid 12 move-ins in independent
living to offset the attrition of 10 residents.
Fitch expects SARC's coverage metrics to remain stable,
particularly revenue-only coverage, supported by consistent
occupancy. The 2015 budget calls for slightly improved 1.7x debt
service coverage by turnover entrance fees, ahead of the 1.6x
produced in 2014. The budget assumes relatively steady total
occupancy near 105 for fiscal 2015, which is in line with year-to-
date performance of 103 through August 2014.
Future Capital Plans
SARC has initiated its plans for development of existing property,
which is likely to include the addition of up to 106 ILU cottages
and apartments. SARC currently has approximately $5 million in
bond funds to apply toward this capital project, and the possible
financing structure, phasing, and final scale is still unknown.
Fitch anticipates reviewing these plans within the next 12 months,
and will take rating action as necessary.
SARC currently has $19.8 million in fixed rate term bonds, and
MADS is $1.6 million and level through 2033. For fiscal 2014, SARC
produced 1.53x coverage per its indenture calculation and ahead of
the 1.2x requirement.
Ongoing Disclosure
Disclosure is provided to bondholders within 120 days following
the fiscal year end, and 60 days following each fiscal quarter
end. Disclosure provided via EMMA, including balance sheet, income
statement, cash flows, occupancy, budget, and covenant compliance.
STAR DYNAMICS: General Dynamics Blocks Sale, Wants Case Dismissal
-----------------------------------------------------------------
Creditor General Dynamics C4 Systems, Inc., asks the U.S.
Bankruptcy Court for the Southern District of Ohio to deny STAR
Dynamics Corporation's request for authorization to sell
substantially all of its assets. General Dynamics believes that
the Debtor's the case to be dismissed, or in the alternative,
converted to Chapter 7.
As reported by the Troubled Company Reporter on Sept. 12, 2014,
the Debtor seeks to sell its assets to Mwagusi, LLC, for the total
purchase price of $5 million, subject to higher and better bids.
Thomas R. Becnel, an insider of the Debtor, holds a purported
secured claim against the Debtor. In May, Mr. Becnel's wholly-
owned corporation, Resort Development of Destin, Inc., purchased
the only other purported secured claim against the Debtor, a claim
previously held by Whitney Bank that Mr. Becnel guaranteed.
General Dynamics claims in its Sept. 12, 2014 objection that
Mwagusi, is an entity related to RDDI (and likewise Mr. Becnel),
stepped forward to purchase the assets in exchange for which
Mwagusi will cause RDDI to reduce the amount of its secured claim
by $5 million. "The estate, which appears to be administratively
insolvent, will receive no meaningful consideration and the rights
of creditors like GD will be detrimentally impacted as Mr. Becnel
seeks to manipulate the 363 sale process by obtaining relief he
could never obtain through a foreclosure sale," General Dynamics
states.
The proposed sale, says General Dynamics, is an abuse of the
bankruptcy process and that there will be no benefit to the estate
by this sale. According to General Dynamics, the sale is a
foreclosure masquerading as a 363 sale, and that it will provide
no benefit to the estate and its creditors will be harmed.
General Dynamics explains that Mr. Becnel proposes to use a 363
sale to deprive General Dynamics of its offset rights, in
contravention of an agreement the Court approved two months ago.
General Dynamics asks that Court that Mr. Becnel, through Mwagusi,
should not be able to manipulate the sale process by favoring
himself over all other creditors and the estate.
"Moreover, given that there is no longer any going concern for
STAR, as evidenced by the fact that there are no willing third-
party purchasers, this case should be dismissed altogether or, at
the very least, converted to Chapter 7," General Dynamics says.
A copy of the objection is available for free at:
http://bankrupt.com/misc/STARDYNAMICS_325_saleobj.pdf
General Dynamics is represented by:
Andrew S. Nicoll, Esq.
Porter Wright Morris & Arthur LLP
41 S. High St. Suites 2800-3200
Columbus, OH 43215
Tel: (614) 227-2107
Fax: (614) 227-2100
E-mail: anicoll@porterwright.com
and
Catherine Steege, Esq.
Melissa M. Hinds, Esq.
Landon S. Raiford, Esq.
Jenner & Block LLP
353 N. Clark Street
Chicago, Illinois 60654-3456
Phone: (312) 923-2952
Fax: (312) 840-7352
About STAR Dynamics
STAR Dynamics Corp. develops, sales, and services instrumentation
radar systems for missile test ranges utilized by the United
States and foreign governments. Located principally in Hilliard,
Ohio, with satellite offices in Herndon, Virginia and Sandestin
Florida, it has 112 full-time employees.
STAR Dynamics filed a petition for Chapter 11 protection (Bankr.
S.D. Ohio Case No. 13-59657) on Dec. 10, 2013, in Columbus, Ohio,
in part to halt a lawsuit by BAE Systems Plc.
According to its first-day motions and as of Nov. 30, 2013, it
has assets of $28,470,788.13, liabilities of $50,892,360.12 and
gross sales of $8,140,140.93. In its schedules, the Debtor
listed $12,138,334 in total assets and $50,740,343 in total
liabilities.
BAE is an American subsidiary of a global-level defense
contractor based in Great Britain, with more than 50,000 employees
world-wide. BAE has its headquarters in Arlington, Virginia, and
like the Debtor, is engaged in the radar range business for the
testing of missiles and other weaponry.
Bankruptcy Judge Charles M. Caldwell oversees the case. Thomas
R. Allen, Esq., Richard K. Stovall, Esq., and Erin L. Pfefferle,
Esq., at Allen Kuehnle Stovall & Neuman LLP serve as the Debtor's
bankruptcy counsel. Michael J. Sullivan, Esq., Russell A.
Williams, Esq., Julie E. Adkins, Esq., Louis T. Isaf, Esq., and
Nanda K. Alapati, Esq., at Womble Carlyle Sandridge & Rice LLP,
serve as special counsel with respect to litigation involving BAE
Systems and with respect to the completion of prepetition patent
work. Sagent Advisors LLC serves as financial advisor.
STAR DYNAMICS: Employee Committee Says Sale Won't Bring in Cash
---------------------------------------------------------------
The Ad Hoc Committee of Employees of STAR Dynamics Corporation
filed with the U.S. Bankruptcy Court for the Southern District of
Ohio an objection to STAR Dynamics Corporation's motion to sell
substantially all of its assets to Mwagusi, LLC, via a credit bid
that the Employee Committee believes will bring no cash into the
Debtor's estate.
The Employee Committee says that it opposes the sale because it
will likely leave the Debtor's estate administratively insolvent
and unable to pay the employees for services they have rendered
post-petition. The Employee Committee claims that while it and
other administrative creditors will bear the burden of that
insolvency, Mwagusi, which is owned and controlled by Thomas R.
Becnel, who together with members of his family owns 90% of the
Debtor, will take the Debtor's most valuable remaining assets.
The Employee Committee believes that Resort Development of Destin,
Inc., which is also controlled by Mr. Becnel, will avoid paying
employee wages and benefits connected with the preservation and
maximization of these assets, even though it has already agreed to
bear the burden of the employee wages and benefits under the cash
collateral orders and related stipulations entered in this case.
A copy of the objection is available for free at:
http://bankrupt.com/misc/STARDYNAMICS_326_saleobj.pdf
About STAR Dynamics
STAR Dynamics Corp. develops, sales, and services instrumentation
radar systems for missile test ranges utilized by the United
States and foreign governments. Located principally in Hilliard,
Ohio, with satellite offices in Herndon, Virginia and Sandestin
Florida, it has 112 full-time employees.
STAR Dynamics filed a petition for Chapter 11 protection (Bankr.
S.D. Ohio Case No. 13-59657) on Dec. 10, 2013, in Columbus, Ohio,
in part to halt a lawsuit by BAE Systems Plc.
According to its first-day motions and as of Nov. 30, 2013, it
has assets of $28,470,788.13, liabilities of $50,892,360.12 and
gross sales of $8,140,140.93. In its schedules, the Debtor
listed $12,138,334 in total assets and $50,740,343 in total
liabilities.
BAE is an American subsidiary of a global-level defense
contractor based in Great Britain, with more than 50,000 employees
world-wide. BAE has its headquarters in Arlington, Virginia, and
like the Debtor, is engaged in the radar range business for the
testing of missiles and other weaponry.
Bankruptcy Judge Charles M. Caldwell oversees the case. Thomas
R. Allen, Esq., Richard K. Stovall, Esq., and Erin L. Pfefferle,
Esq., at Allen Kuehnle Stovall & Neuman LLP serve as the Debtor's
bankruptcy counsel. Michael J. Sullivan, Esq., Russell A.
Williams, Esq., Julie E. Adkins, Esq., Louis T. Isaf, Esq., and
Nanda K. Alapati, Esq., at Womble Carlyle Sandridge & Rice LLP,
serve as special counsel with respect to litigation involving BAE
Systems and with respect to the completion of prepetition patent
work. Sagent Advisors LLC serves as financial advisor.
STAR DYNAMICS: Israel Objects to Sale, Says Settlement Reached
--------------------------------------------------------------
The Government of Israel, acting through the Ministry of Defense,
Mission to the United States, files with the U.S. Bankruptcy Court
for the Southern District of Ohio its limited opposition to STAR
Dynamics Corporation's motion to sell substantially all of its
assets to Mwagusi, LLC, via a credit bid.
IMOD says in its Sept. 17, 2014 objection that it has been
involved with in extensive negotiations with the Debtor relating
to issues between the two parties. According to IMOD, they have
reached a settlement, subject to court approval. The Debtor will
file a motion for authority to compromise under Rule 9019, Federal
Rules of Bankruptcy Procedure and to request a continuance of the
sale hearing in order to effectuate the settlement. IMOD states
that if the compromise motion is approved, IMOD's objections to
the sale motion will be waived. If the compromise is not
approved, the parties agree that IMOD will then be entitled to
file any further or supplemental objections to the sale motion
prior to the final hearing on the sale motion.
The local counsel for the Government of Israel, Ministry of
Defense can be reached at:
Frederick M. Luper, Esq.
William B. Logan, Jr., Esq.
Kenneth M. Richards, Esq.
Luper, Neidenthal & Logan, LPA
50 W. Broad Street, Suite 1200
Columbus, OH 43215
Tel: (614) 221-7663
Fax: (866) 345-4948
E-mail: fluper@lnlattorneys.com
wlogan@lnlattorneys.com
krichards@lnlattorneys.com
and
David R. Kuney, Esq.
Sidley Austin LLP
1501 K Street NW
Washington, DC 20005
Tel: (202) 736-8650
Fax: (202) 736-8711
E-mail: dkuney@sidley.com
About STAR Dynamics
STAR Dynamics Corp. develops, sales, and services instrumentation
radar systems for missile test ranges utilized by the United
States and foreign governments. Located principally in Hilliard,
Ohio, with satellite offices in Herndon, Virginia and Sandestin
Florida, it has 112 full-time employees.
STAR Dynamics filed a petition for Chapter 11 protection (Bankr.
S.D. Ohio Case No. 13-59657) on Dec. 10, 2013, in Columbus, Ohio,
in part to halt a lawsuit by BAE Systems Plc.
According to its first-day motions and as of Nov. 30, 2013, it
has assets of $28,470,788.13, liabilities of $50,892,360.12 and
gross sales of $8,140,140.93. In its schedules, the Debtor
listed $12,138,334 in total assets and $50,740,343 in total
liabilities.
BAE is an American subsidiary of a global-level defense
contractor based in Great Britain, with more than 50,000 employees
world-wide. BAE has its headquarters in Arlington, Virginia, and
like the Debtor, is engaged in the radar range business for the
testing of missiles and other weaponry.
Bankruptcy Judge Charles M. Caldwell oversees the case. Thomas
R. Allen, Esq., Richard K. Stovall, Esq., and Erin L. Pfefferle,
Esq., at Allen Kuehnle Stovall & Neuman LLP serve as the Debtor's
bankruptcy counsel. Michael J. Sullivan, Esq., Russell A.
Williams, Esq., Julie E. Adkins, Esq., Louis T. Isaf, Esq., and
Nanda K. Alapati, Esq., at Womble Carlyle Sandridge & Rice LLP,
serve as special counsel with respect to litigation involving BAE
Systems and with respect to the completion of prepetition patent
work. Sagent Advisors LLC serves as financial advisor.
STAR DYNAMICS: Hearing on Asset Sale to Continue on Oct. 21
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Ohio will
continue on Oct. 21, 2014, at 10:00 a.m. the hearing to consider
STAR Dynamics Corporation's motion to sell substantially all of
its assets.
As reported by the Troubled Company Reporter on Sept. 12, 2014,
the Debtor seeks to sell its assets to Mwagusi, LLC, for the total
purchase price of $5 million, subject to higher and better bids.
The Court previously scheduled a hearing on the motion on Sept.
19, 2014, at 1:00 p.m. (Eastern Time). Electro Rent Corporation
objects to the motion, and asks that the Court condition the
approval of the sale motion on the exclusion of ERC's electronic
and test equipment it provided to the Debtor and the provision of
adequate protection of ERC's interest on the equipment.
On Sept. 17, 2014, Electro Rent withdrew its limited objection to
the sale motion.
The Debtor and the Government of Israel, Ministry of Defense,
informed the Court on Sept. 15, 2014, that it entered a
stipulation with IMOD, giving IMOD through 5:00 p.m. (Eastern
Time) on Sept. 17, 2014, to file an objection or other response to
the sale motion. On Sept. 19, 2014, the Debtor and creditors and
parties in interest, General Dynamics C4 Systems Inc., and the Ad
Hoc Committee of Employees informed the Court that they have
entered into a stipulation giving the Debtor until Oct. 3, 2014,
to file replies to General Dynamics's objection and the objection
of Ad Hoc Committee of Employees.
About STAR Dynamics
STAR Dynamics Corp. develops, sales, and services instrumentation
radar systems for missile test ranges utilized by the United
States and foreign governments. Located principally in Hilliard,
Ohio, with satellite offices in Herndon, Virginia and Sandestin
Florida, it has 112 full-time employees.
STAR Dynamics filed a petition for Chapter 11 protection (Bankr.
S.D. Ohio Case No. 13-59657) on Dec. 10, 2013, in Columbus, Ohio,
in part to halt a lawsuit by BAE Systems Plc.
According to its first-day motions and as of Nov. 30, 2013, it
has assets of $28,470,788.13, liabilities of $50,892,360.12 and
gross sales of $8,140,140.93. In its schedules, the Debtor
listed $12,138,334 in total assets and $50,740,343 in total
liabilities.
BAE is an American subsidiary of a global-level defense
contractor based in Great Britain, with more than 50,000 employees
world-wide. BAE has its headquarters in Arlington, Virginia, and
like the Debtor, is engaged in the radar range business for the
testing of missiles and other weaponry.
Bankruptcy Judge Charles M. Caldwell oversees the case. Thomas
R. Allen, Esq., Richard K. Stovall, Esq., and Erin L. Pfefferle,
Esq., at Allen Kuehnle Stovall & Neuman LLP serve as the Debtor's
bankruptcy counsel. Michael J. Sullivan, Esq., Russell A.
Williams, Esq., Julie E. Adkins, Esq., Louis T. Isaf, Esq., and
Nanda K. Alapati, Esq., at Womble Carlyle Sandridge & Rice LLP,
serve as special counsel with respect to litigation involving BAE
Systems and with respect to the completion of prepetition patent
work. Sagent Advisors LLC serves as financial advisor.
STAR DYNAMICS: Western Equipment Wants Court to Modify Stay
-----------------------------------------------------------
Western Equipment Finance, Inc., asks the U.S. Bankruptcy Court
for the Southern District of Ohio for an order conditioning,
modifying or dissolving the automatic stay based, in part, on STAR
Dynamics Corporation's discontinuance of the adequate protection
payments set forth the agreed order resolving Western Equipment's
previous motion.
On Oct. 21, 2013, the Debtor obtained a loan from Western
Equipment in the amount of $103,620 to purchase software for use
as goods in the Debtor's business operations. The loan was
evidenced by an Installment Payment Agreement dated Oct. 21, 2013.
To secure payment of the Note and performance of the other terms
contained in it, the Debtor executed a Security Agreement in favor
of Western Equipment dated Oct. 21, 2013, which granted a lien on
the software license by the Debtor: Integrity Application
Lifestyle Management Licenses with Professional Services and
Training. The value of the collateral is estimated by Western
Equipment to be $103,620 based on the Debtor's purchase of same
immediately prior to filing bankruptcy for the fair market price.
The Debtor agreed to make adequate protection payments.
On Aug. 28, 2014, the Debtor informed Western Equipment that no
further payments would be made and that the Western Equipment's
Collateral is not part of the scheduled sale of substantially all
of the assets of the Debtor.
Western Equipment says in its Sept. 26 court filing that it has a
valid, perfected, first-priority, purchase money security interest
in software used in the Debtor's operations, which the Debtor had
previously decided to keep and use and now has decided to discard
outside of the proposed asset sale that will dissolve the Debtor.
As a result, Western Equipment is entitled to reclaim its software
collateral, and consequently, to relief from the automatic stay,
Western Equipment states.
On Sept. 18, 2014, a notice was filed with the Court stating that
Western Equipment's first motion for relief from stay, filed on
Sept. 15, 2014, has been scanned and transmitted without complying
with ECF Procedure 5, which requires all transmitted documents to
contain Electronically Generated Text, with certain exceptions not
applicable. The "substitute" motion for relief from stay was
filed on Sept. 26, 2014.
Western Equipment is represented by:
Christopher J. Niekamp, Esq.
Bernlohr, Niekamp & Weisensell, LLP
23 S. Main Street, 3rd Floor
Akron, Ohio 44308
Tel: (330) 434-1000
About STAR Dynamics
STAR Dynamics Corp. develops, sales, and services instrumentation
radar systems for missile test ranges utilized by the United
States and foreign governments. Located principally in Hilliard,
Ohio, with satellite offices in Herndon, Virginia and Sandestin
Florida, it has 112 full-time employees.
STAR Dynamics filed a petition for Chapter 11 protection (Bankr.
S.D. Ohio Case No. 13-59657) on Dec. 10, 2013, in Columbus, Ohio,
in part to halt a lawsuit by BAE Systems Plc.
According to its first-day motions and as of Nov. 30, 2013, it
has assets of $28,470,788.13, liabilities of $50,892,360.12 and
gross sales of $8,140,140.93. In its schedules, the Debtor
listed $12,138,334 in total assets and $50,740,343 in total
liabilities.
BAE is an American subsidiary of a global-level defense
contractor based in Great Britain, with more than 50,000 employees
world-wide. BAE has its headquarters in Arlington, Virginia, and
like the Debtor, is engaged in the radar range business for the
testing of missiles and other weaponry.
Bankruptcy Judge Charles M. Caldwell oversees the case. Thomas
R. Allen, Esq., Richard K. Stovall, Esq., and Erin L. Pfefferle,
Esq., at Allen Kuehnle Stovall & Neuman LLP serve as the Debtor's
bankruptcy counsel. Michael J. Sullivan, Esq., Russell A.
Williams, Esq., Julie E. Adkins, Esq., Louis T. Isaf, Esq., and
Nanda K. Alapati, Esq., at Womble Carlyle Sandridge & Rice LLP,
serve as special counsel with respect to litigation involving BAE
Systems and with respect to the completion of prepetition patent
work. Sagent Advisors LLC serves as financial advisor.
STOHNE RENTALS: Case Summary & 14 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Stohne Rentals LLC
910 South Jackson Street
Frankfort, IN 46041
Case No.: 14-09021
Chapter 11 Petition Date: September 29, 2014
Court: United States Bankruptcy Court
Southern District of Indiana (Indianapolis)
Judge: Hon. James M. Carr
Debtor's Counsel: Eric C Redman, Esq.
REDMAN LUDWIG, PC
151 N Delaware St Ste 1106
Indianapolis, IN 46204
Tel: 317-685-2426
Email: ksmith@redmanludwig.com
Total Assets: $499,800
Total Liabilities: $1.05 million
The petition was signed by Stephen Waggoner, manager.
A list of the Debtor's 14 largest unsecured creditors is available
for free at http://bankrupt.com/misc/insb14-09021.pdf
T-L CONYERS: Taps Valbridge Property as Appraiser
-------------------------------------------------
T-L Conyers LLC, T-L Cherokee South, LLC and its debtor-affiliates
seek authorization from the Hon. J. Philip Klingeberger of the
U.S. Bankruptcy Court for the Northern District of Indiana to
employ Valbridge Property Advisors/Shaner Appraisals, Inc. as
appraiser.
The Debtors seek to employ Valbridge as its appraiser to conduct a
valuation of the commercial shopping center owned by T-L Cherokee
commonly known as Cherokee South Shopping Center, located at the
southeast corner of 95th Street and Antioch Road in Overland Park,
Kansas (the "Property) and prepare an appraisal report based upon
its valuation analysis.
Valbridge will be compensated by the Debtor for the creation of an
appraisal report for the Property in the total amount of $7,500
plus an additional hourly rate of $300 for trial preparation,
deposition, and testimony. Upon execution of the agreement, the
Debtor will be obligated to pay Valbridge the total appraisal fee
of $7,500 as a retainer.
Valbridge will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Laird Goldsborough, president of Shaner Appraisals, Inc., 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.
Valbridge can be reached at:
Laird Goldsborough
VALBRIDGE PROPERTY ADVISORS/
SHANER APPRAISALS, INC.
10990 Quivira, Suite 100
Overland Park, KS 66210
Tel: (913) 451-1451
Fax: (913) 529-4121
About T-L Cherokee
T-L Conyers LLC, T-L Cherokee South, LLC, and two affiliates
sought Chapter 11 protection in Hammond, Indiana, on Feb. 1, 2013.
The Debtors are represented by David K. Welch, Esq., at Crane,
Heyman, Simon, Welch & Clar, in Chicago.
The Debtors own various shopping centers in Georgia and Kansas.
T-L Cherokee South (Bankr. N.D. Ind. Case No. 13-20283) estimated
assets and debts of $10 million to $50 million. T-L Cherokee owns
and operates a commercial shopping center in Overland Park, Kansas
known as "Cherokee South Shopping Center".
The Debtors are entities managed by Westchester, Illinois-based
Tri-Land Properties, Inc., which sought Chapter 11 protection
(Case No. 12-22623) on July 11, 2012.
TACTICAL INTERMEDIATE: Confirmation Hearing Set for Oct. 29
-----------------------------------------------------------
Bill Rochelle and Sherri Toub, bankruptcy columnists for Bloomberg
News, reported that Tactical Holdings Operations Inc. has obtained
approval of the disclosure statement explaining its Chapter 11
plan of liquidation and will come back in court on Oct. 29 to seek
confirmation of the plan.
The Plan, which was originally filed in July, was recently
amended, to reflect an agreement among the Debtors, the
Prepetition Senior Secured Lender, the Secured Noteholder, the
Sponsor, and the Official Committee of Unsecured Creditors,
pursuant to which a cash fund of $300,000 will be provided for
payment of allowed general unsecured claims. In addition, holders
of general unsecured claims will receive their pro rata share of
any recoveries from Third-Party Claims not released under the
Plan. The Prepetition Senior Secured Lender and the Secured
Noteholder have also agreed to waive their right to receive a
distribution on account of their deficiency claims, which totaled
more than $43 million in the aggregate.
Under the Plan, holders of general unsecured claims will recover
approximately 3.3% of the total amount of their allowed claims,
while the Prepetition Senior Secured Claim will recover
approximately 27% of the total amount of its allowed claim.
A full-text copy of the Disclosure Statement for the First Amended
Plan dated Sept. 26, 2014, is available for free at:
http://bankrupt.com/misc/TACTICALds0926.pdf
About Tactical Intermediate
Tactical Intermediate Holdings, Inc., and its affiliates'
operations are comprised of two major lines of business -- a
footwear line, and a fabric and clothing line, including flame
resistant material ("Massif").
Footwear is comprised of the Altama group ("Altama") and the
Wellco Group ("Wellco"). Wellco was founded in 1941 and
manufactures and sells combat boots, primarily for the United
States Military as well as commercial uniform and work boots for a
variety of customers. Altama was founded in 1969 and manufactures
and sells boots for the United States and international militaries
as well as for federal, state and local agencies, military
schools, police, uniform shops and Army/Navy retailers.
Headquartered in Ashland, Oregon, Massif was founded in 1999 by a
group of veteran search and rescue team members and alpine
climbers who believed that the options for sanctioned fire
resistant protective gear at the time were too limited. Massif is
a world leader in supplying flame resistant and high performance
outdoor apparel to the military, law enforcement, search and
rescue professionals, and the wildland firefighting community.
Tactical Intermediate Holdings, Inc., and its affiliates sought
Chapter 11 protection in Delaware on July 8, 2014, with plans to
quickly sell their assets.
Judge Kevin Gross is assigned to the Chapter 11 cases. The
Debtors have requested joint administration of the cases under
Case No. 14-11659.
The Debtors have tapped Klehr Harrison Harvey Branzburg LLP as
counsel, FTI Consulting, Inc., as financial advisor, Houlihan
Lokey Capital, Inc., as investment banker, and PrimeClerk as
claims and noticing agent.
Massif Apparel Enterprises LLC, the entity formed by Sun Capital
Partners Group V LLC, to serve as stalking horse bid for Massif's
assets, is represented by Corey Fox, Esq., Brad Weiland, Esq., and
Gregory F. Fesce, Esq., at Kirkland & Ellis LLP.
Roberta A. DeAngelis, the U.S. Trustee for Region 3, appointed
three members to serve in the official committee of unsecured
creditors in the Chapter 11 cases of Tactical Intermediate
Holdings, Inc., et al.
TACTICAL INTERMEDIATE: Files First Amended Liquidation Plan
-----------------------------------------------------------
Tactical Intermediate Holdings, Inc., et al., filed with the U.S.
Bankruptcy Court for the District of Delaware a first amended
Chapter 11 plan of liquidation and accompanying disclosure
statement.
The Plan reflects an agreement among the Debtors, the Prepetition
Senior Secured Lender, the Secured Noteholder, the Sponsor, and
the Official Committee of Unsecured Creditors, pursuant to which a
cash fund of $300,000 will be provided for payment of allowed
general unsecured claims. In addition, holders of general
unsecured claims will receive their pro rata share of any
recoveries from Third-Party Claims not released under the Plan.
The Prepetition Senior Secured Lender and the Secured Noteholder
have also agreed to waive their right to receive a distribution on
account of their deficiency claims, which totaled more than $43
million in the aggregate.
Under the Plan, holders of general unsecured claims will recover
approximately 3.3% of the total amount of their allowed claims,
while the Prepetition Senior Secured Claim will recover
approximately 27% of the total amount of its allowed claim.
A full-text copy of the Disclosure Statement for the First Amended
Plan dated Sept. 26, 2014, is available for free at:
http://bankrupt.com/misc/TACTICALds0926.pdf
About Tactical Intermediate
Tactical Intermediate Holdings, Inc., and its affiliates'
operations are comprised of two major lines of business -- a
footwear line, and a fabric and clothing line, including flame
resistant material ("Massif").
Footwear is comprised of the Altama group ("Altama") and the
Wellco Group ("Wellco"). Wellco was founded in 1941 and
manufactures and sells combat boots, primarily for the United
States Military as well as commercial uniform and work boots for a
variety of customers. Altama was founded in 1969 and manufactures
and sells boots for the United States and international militaries
as well as for federal, state and local agencies, military
schools, police, uniform shops and Army/Navy retailers.
Headquartered in Ashland, Oregon, Massif was founded in 1999 by a
group of veteran search and rescue team members and alpine
climbers who believed that the options for sanctioned fire
resistant protective gear at the time were too limited. Massif is
a world leader in supplying flame resistant and high performance
outdoor apparel to the military, law enforcement, search and
rescue professionals, and the wildland firefighting community.
Tactical Intermediate Holdings, Inc., and its affiliates sought
Chapter 11 protection in Delaware on July 8, 2014, with plans to
quickly sell their assets.
Judge Kevin Gross is assigned to the Chapter 11 cases. The
Debtors have requested joint administration of the cases under
Case No. 14-11659.
The Debtors have tapped Klehr Harrison Harvey Branzburg LLP as
counsel, FTI Consulting, Inc., as financial advisor, Houlihan
Lokey Capital, Inc., as investment banker, and PrimeClerk as
claims and noticing agent.
Massif Apparel Enterprises LLC, the entity formed by Sun Capital
Partners Group V LLC, to serve as stalking horse bid for Massif's
assets, is represented by Corey Fox, Esq., Brad Weiland, Esq., and
Gregory F. Fesce, Esq., at Kirkland & Ellis LLP.
Roberta A. DeAngelis, the U.S. Trustee for Region 3, appointed
three members to serve in the official committee of unsecured
creditors in the Chapter 11 cases of Tactical Intermediate
Holdings, Inc., et al.
TELEXFREE LLC: Court Waives Attorney-Client Privilege
-----------------------------------------------------
WickedLocal.com reported that U.S. Bankruptcy Judge Melvin S.
Hoffman approved a request to waive attorney-client privilege in
TelexFREE?s bankruptcy case.
According to the report, Chapter 11 Trustee Stephen Darr argued
that waiving the privilege would allow him to more quickly access
information and assets obtained in the U.S.'s civil and criminal
cases against TelexFREE. If left intact, attorney-client
privilege would allow a team of lawyers to go over the materials
first, he said, a process that would take considerable time given
the large amount of data in the case.
The report noted that TelexFREE?s co-owners, James Merrill of
Ashland and Carlos Wanzeler, opposed the request. Both have been
charged with wire fraud and conspiracy to commit wire fraud for
their alleged roles in what authorities claim was a worldwide
pyramid scheme.
About TelexFREE
TelexFREE -- http://www.TelexFREE.com-- is a telecommunications
business that uses multi-level marketing to assist in the
distribution of voice over internet protocol telephone services.
TelexFREE's retail VoIP product, 99TelexFREE, allows for unlimited
international calling to seventy countries for a flat monthly rate
of $49.90. TelexFREE has over 700,000 associates or promoters
worldwide.
The company believes the sales of the 99TelexFREE product, the
TelexFREE "app," and other new products will ultimately prove
successful and profitable. The company is struggling, however,
with several factors that required it to seek chapter 11
protection. First, the Company experienced exponential growth in
revenue between 2012 and 2013 (from de minimus amounts to over
$1 billion), which put tremendous pressure on the Company's
financial, operational and management systems. Second, although
the company revised its original compensation plan to promoters in
order to address certain questions that were raised regarding such
plan, the company believes that the plans need to be further
revised. Finally, the trailing liabilities arising from the
original compensation plan are difficult to quantify and have
resulted in substantial asserted liabilities against the company,
a number of which may not be valid.
TelexFREE LLC and two affiliates sought bankruptcy protection
(Bankr. D. Nev. Lead Case No. 14-12525) on April 13, 2014.
Alvarez & Marsal North America, LLC is serving as restructuring
advisor and Greenberg Traurig, LLP and Gordon Silver are serving
as legal advisors to TelexFREE. Kurtzman Carson Consultants LLC
serves as claims and noticing agent.
TelexFREE, LLC, estimated $50 million to $100 million in assets
and $100 million to $500 million in liabilities.
TelexFREE is facing accusations of operating a $1 billion-plus
pyramid scheme.
In May, the Court approved the motion by the U.S. Securities &
Exchange Commission to transfer the venue of the Debtors' cases to
the U.S. Bankruptcy Court, District of Massachusetts (Bankr. D.
Mass. Case Nos. 14-40987, 14-40988 and 14-40989). The Court
entered an order in relation to the venue transfer stating that
the cases remain jointly administered, and KCC will continue to
serve as claims processing agent.
The Debtors had opposed to the motion, stating that while the SEC
contends that the Massachusetts Bankruptcy Court is more
convenient for the SEC, the SEC has failed entirely to meet its
burden to show that the Massachusetts Bankruptcy Court is better
than the Nevada Bankruptcy Court for administration of the Chapter
11 Cases. The Debtors chose the Nevada Bankruptcy Court because,
inter alia, TelexFREE Nevada, a Nevada entity, is a counter-party
to more than 700,000 contracts governed by Nevada law.
A creditors' committee has not yet been appointed in the Chapter
11 Cases.
THORNBURG MORTGAGE: Judge Dismisses Much of Suit v. Banks
---------------------------------------------------------
Joseph Checkler, writing for Daily Bankruptcy Review, reported
that U.S. Bankruptcy Judge Duncan W. Keir in Baltimore dismissed
some of Thornburg Mortgage Inc.'s lawsuit against J.P. Morgan
Chase & Co. and other big Wall Street banks over margin calls that
the subprime lender says pushed it into bankruptcy five years ago.
According to the report, Judge Keir said the banks, who were
parties to swap agreements with Thornburg, were largely protected
by the so-called safe-harbor provisions of the Bankruptcy Code.
About Thornburg Mortgage
Based in Santa Fe, New Mexico, Thornburg Mortgage Inc. (NYSE: TMA)
-- http://www.thornburgmortgage.com/-- was a single-family
residential mortgage lender focused principally on prime and
super-prime borrowers seeking jumbo and super-jumbo adjustable
rate mortgages. It originated, acquired, and retained investments
in adjustable and variable rate mortgage assets. Its ARM assets
comprised of purchased ARM assets and ARM loans, including
traditional ARM assets and hybrid ARM assets.
Thornburg Mortgage and its four affiliates filed for Chapter 11
bankruptcy (Bankr. D. Md. Lead Case No. 09-17787) on May 1, 2009.
Thornburg changed its name to TMST, Inc.
Judge Duncan W. Keir is handling the case. David E. Rice, Esq.,
at Venable LLP, in Baltimore, Maryland, served as counsel to
Thornburg Mortgage. Orrick, Herrington & Sutcliffe LLP served as
special counsel. Jim Murray and David Hilty of Houlihan Lokey
Howard & Zukin Capital, Inc., served as investment banker and
financial advisor. Protiviti Inc. served as financial advisory
services. KPMG LLP served as the tax consultant. Epiq Systems,
Inc., serves claims and noticing agent. Thornburg disclosed total
assets of $24.4 billion and total debts of $24.7 billion, as of
Jan. 31, 2009.
On Oct. 28, 2009, the Court approved the appointment of Joel I.
Sher as the Chapter 11 Trustee for the Company, TMST Acquisition
Subsidiary, Inc., TMST Home Loans, Inc., and TMST Hedging
Strategies, Inc. He is represented by his firm, Shapiro Sher
Guinot & Sandler.
THORNBURG MORTGAGE: Settlement with Barclays Approved
-----------------------------------------------------
BankruptcyData reported that the U.S. Bankruptcy Court approved
the settlement and compromise between Joel I. Sher, the Chapter 11
trustee assigned to the Thornburg Mortgage case, and Barclays
Capital.
As previously reported by The Troubled Company Reporter, citing
The Wall Street Journal, the trustee reached a deal with Barclays
to settle a subprime-era lawsuit alleging the bank made improper
margin calls that helped drive the mortgage lender into
bankruptcy. Barclays would pay the trustee $23 million for the
benefit of Thornburg's creditors. The trustee sued BarCap, the
investment banking division of British bank Barclays PLC, for $94
million over the margin calls and subsequent seizure and sale of
the mortgage-backed securities that Thornburg financed through
BarCap.
About Thornburg Mortgage
Based in Santa Fe, New Mexico, Thornburg Mortgage Inc. (NYSE: TMA)
-- http://www.thornburgmortgage.com/-- was a single-family
residential mortgage lender focused principally on prime and
super-prime borrowers seeking jumbo and super-jumbo adjustable
rate mortgages. It originated, acquired, and retained investments
in adjustable and variable rate mortgage assets. Its ARM assets
comprised of purchased ARM assets and ARM loans, including
traditional ARM assets and hybrid ARM assets.
Thornburg Mortgage and its four affiliates filed for Chapter 11
bankruptcy (Bankr. D. Md. Lead Case No. 09-17787) on May 1, 2009.
Thornburg changed its name to TMST, Inc.
Judge Duncan W. Keir is handling the case. David E. Rice, Esq.,
at Venable LLP, in Baltimore, Maryland, served as counsel to
Thornburg Mortgage. Orrick, Herrington & Sutcliffe LLP served as
special counsel. Jim Murray and David Hilty of Houlihan Lokey
Howard & Zukin Capital, Inc., served as investment banker and
financial advisor. Protiviti Inc. served as financial advisory
services. KPMG LLP served as the tax consultant. Epiq Systems,
Inc., serves claims and noticing agent. Thornburg disclosed total
assets of $24.4 billion and total debts of $24.7 billion, as of
Jan. 31, 2009.
On Oct. 28, 2009, the Court approved the appointment of Joel I.
Sher as the Chapter 11 Trustee for the Company, TMST Acquisition
Subsidiary, Inc., TMST Home Loans, Inc., and TMST Hedging
Strategies, Inc. He is represented by his firm, Shapiro Sher
Guinot & Sandler.
TOYS 'R' US: Fitch Rates New $350MM Loan 'B' & $1.02BB Loan 'CCC+'
------------------------------------------------------------------
Fitch Ratings has assigned a 'B/RR1' rating to the new $350
million secured FILO term loan and a 'CCC+/RR3' to the $1,025
million secured B-4 term loan that is being launched at Toys 'R'
Us-Delaware, Inc. (Toys-Delaware). The new term loans will be
used to repay the $646 million B-1 term loan and $350 million of
the 7.375% senior secured term loans, both due Sept. 1, 2016. The
company will also refinance up to $380 million of the $580 million
of B-2 and B-3 term loans. Toys-Delaware will seek amendments to
the term loan and asset-backed loan (ABL) credit agreements to
complete these transactions.
Effective this refinancing, Fitch has downgraded the remaining
$200 million B-2 and B-3 term loans to 'CCC/RR4' from 'CCC+/RR3'.
Fitch has also downgraded the $450 million 10.375% senior
unsecured notes due August 2017 and $400 million 7.375% senior
unsecured notes due October 2018 at Toys 'R' Us, Inc. (Toys,
HoldCo) to 'CC/RR6' from 'CCC-/RR5', given the structural
enhancements provided to the new loans discussed under the
'Recovery Analysis and Considerations' section.
The transaction will address all of Toys-Delaware's 2016
maturities and a portion of 2018 maturities. This will push Toy's
next maturities to 2017 when $1.175 billion of debt comes due.
Fitch has affirmed the Issuer Default Ratings (IDRs) on Toys and
its various domestic subsidiaries at 'CCC'. A full list of rating
actions follows at the end of this press release.
Key Rating Drivers
Fitch's ratings on Toys reflects the company's weak top-line and
EBITDA trends and weakening liquidity position given Fitch's
expectation of negative free cash flow (FCF). Toys' adjusted
EBITDA declined materially to $521 million in 2013 from the
average $1 billion range posted in the last few years. Fitch
expects EBITDA to remain depressed at $475 million to $550 million
over the next three years, relative to approximately $800 million
required annually to cover cash interest expense, capex and modest
taxes.
While Toys reported positive comparable store sales (comps) growth
in the first half of 2014, Fitch expects Toys' comps will remain
flat to modestly negative over the intermediate term given the
weakness in its major categories such as juvenile (approximately
30% of Toys' total sales) and sustained weakness in the
entertainment category (11% of total sales) due to low birth rates
and ongoing secular pressure on the category.
The company faces intensified pricing competition from both
discount and online retailers. Despite Toys' multichannel strategy
and series of product and service initiatives, Fitch believes it
will be expensive and difficult for Toys to compete on pricing and
retain its market share without sacrificing margins.
Fitch estimates that Toys would need to grow sales by 1.5% to 2%
and have flat to modestly improved gross margin to generate annual
EBITDA in the $725 million range to cover annual cash interest
expense of $415 million to $420 million post-refinancing, capex of
$250 million and modest cash taxes. However, achieving this level
is likely challenging without significantly lowering its cost
structure and controlling inventory levels.
Fitch expects 2014 EBITDA to be in the $475 million-$500 million
range, assuming flat comps and flat-to-modest lower gross margin
for the second half of the year. Assuming similar trends for
2015/2016, Fitch expects EBITDA to remain at these levels or
modestly better with some modest SG&A reduction given that Toys
will need to make further investments in sharpening its prices,
growing its online business and improving store presentation and
service.
Fitch expects leverage (adjusted debt/EBITDAR) to be mid-9x and
FCF to be negative $300 million, excluding significant working
capital swings in 2014 and 2015. Availability under the ABL
revolver during peak working capital season is expected to be
around $700 million in 2014 and $400 million to $450 million in
2015. This indicates adequate liquidity over the next 24 months
but concerns remain around declining liquidity and significant
debt maturities in 2017 ($1.175 billion) and 2018 ($600 million).
Recovery Analysis and Considerations
For issuers with IDRs at 'B+' and below, Fitch performs a recovery
analysis for each class of obligations of the issuer. Issue
ratings are derived from the IDR and the relevant Recovery Rating
and notching based on the expected recoveries in a distressed
scenario of each of the company's debt issues and loans. Toys'
debt is at three types of entities: operating companies (OpCo);
property companies (PropCo); and HoldCo, with a summary structure
highlighted below:
Toys 'R' Us, Inc. (HoldCo)
(I) Toys 'R' Us-Delaware, Inc. (Toys-Delaware) is a subsidiary of
HoldCo.
(a) Toys 'R' Us Canada (Toys-Canada) is a subsidiary of Toys-
Delaware.
(b) Toys 'R' Us Property Co. II, LLC (PropCo II) is a subsidiary
of Toys-Delaware.
(II) Toys 'R' Us Property Co. I, LLC (PropCo I) is a subsidiary of
HoldCo.
OpCo Debt
Fitch takes the higher of liquidation value or enterprise value
(based on 5.0x-5.5x multiple applied to the stressed EBITDA) at
the OpCo levels - Toys-Delaware and Toys-Canada. The 5.0x-5.5x is
consistent with the low end of the 10-year valuation for the
public retail space and Fitch's average distressed multiple across
the retail portfolio. The stressed liquidation or enterprise value
(EV) is adjusted for 10% administrative claims.
Toys-Canada
Toys has a $1.85 billion ABL revolver with Toys Delaware as the
lead borrower, and this contains a $200 million sub-facility in
favor of Canadian borrowers. Any assets of the Canadian borrower
and its subsidiaries secure only the Canadian liabilities under
the ABL facility. The $200 million sub-facility is more than
adequately covered by the EV calculated based on stressed EBITDA
at the Canadian subsidiary. Therefore, the fully recovered sub-
facility is reflected in the recovery of the consolidated $1.85
billion revolver discussed below.
The residual value of approximately $200 million is applied toward
certain debt at Toys-Delaware.
Toys-Delaware
At the Delaware level, the recovery on the various debt tranches
is based on the: (1)liquidation value of the domestic assets at
the Toys-Delaware level estimated at $1.75 billion; (2) estimated
value for Toys' trademarks and IP assets (which are held at
Geoffrey, LLC (IPCo) as a wholly owned subsidiary of Toys-
Delaware; (3) equity residual from Toys-Canada; and (4) the
benefit to the new B-4 term loan from an unsecured guarantee from
the indirect parent of PropCo I.
The $1.85 billion revolver is secured by a first lien on inventory
and receivables of Toys-Delaware. In allocating an appropriate
recovery, Fitch has considered the liquidation value of domestic
inventory and receivables assumed at seasonal peak (at the end of
the third quarter), and has applied advance rates of 75% and 80%,
respectively. Fitch assumes $1.3 billion or approximately 70% of
the facility commitment is drawn under the revolver. The facility
is fully recovered and is therefore rated 'B/RR1'.
The new financing at Toys-Delaware will consist of a new $350
million FILO term loan and $1,025 million B-4 term loan. The new
term loans will be used to repay the $646 million B-1 term loan
and $350 million of the 7.375% senior secured term loans, both due
Sept. 1, 2016. The company will also refinance up to $380 million
of the $580 million of B-2 and B-3 term loans.
The FILO term loan will be secured by the same collateral as the
existing $1.85 billion ABL facility and will rank second in
repayment priority relative to the ABL. The proposed FILO Tranche
will be governed by the residual borrowing base within the ABL
facility and will benefit from a lien against 50% of the estimated
value of real estate at Toys-Canada. Fitch has assigned a 'B/RR1'
rating to the FILO term loan based on outstanding recovery
prospects (91%-100%) as it benefits from the excess liquidation
value of domestic inventory and A/R and the recovery on the
Canadian real estate.
The new B-4 term loan will benefit from the same credit support as
the existing B-2 and B-3 term loans which includes a first lien on
all present and future IP, trademarks, copyrights, patents,
websites and other intangible assets and a second lien on the ABL
collateral. It will also benefit from an unsecured guaranty by the
indirect parent of PropCo I and will be secured by a first
priority pledge on two-thirds of the Canadian subsidiary stock.
After pro-rating the ascribed value of the IP assets (estimated at
$400 million), the residual equity in Toys-Canada (of which half
was applied to the FILO term loan) and applying the benefit from
the guaranty by the indirect parent of PropCo I, the new loans are
expected to have good recovery prospects (51% to 70%), and are
therefore assigned a rating of 'CCC+/RR3'.
The $200 million in remaining B-2 and B-3 term loans have been
downgraded to 'CCC/RR4' as they are expected to have average
recovery prospects (31% to 50%) mainly from their prorated claim
against the IP assets.
The $22 million 8.75% debentures due Sept. 1, 2021, have poor
recovery prospects (0% to 10%) and are therefore rated 'CC/RR6'.
PropCo Debt
At the PropCo levels-Toys 'R' Us Property Co. I, LLC; Toys 'R' Us
Property Co. II, LLC; and other international PropCos - LTM net
operating income (NOI) is stressed at 20%.
PropCo I and PropCo II are set up as bankruptcy-remote entities
with a 20-year master lease through 2029 covering all the
properties, which requires Toys-Delaware to pay all costs and
expenses related to leasing these properties from these two
entities. The ratings on the PropCo debt reflect a distressed
capitalization rate of 12% applied to the stressed NOI of the
properties to determine a going-concern valuation. The stressed
rates reflect downtime and capital costs that would need to be
incurred to re-tenant the space.
Applying these assumptions to the $725 million 8.50% senior
secured notes at PropCo II and the $985 million senior unsecured
term loan at PropCo I results in recovery in excess of 90%.
Therefore, these facilities are rated 'B/RR1'.
The PropCo II notes are secured by 125 properties. The PropCo I
unsecured term loan facility benefits from a negative pledge on
all PropCo I real estate assets (343 properties). Fitch typically
limits the Recovery Rating on unsecured debt at 'RR2' or two
notches above the IDR level (under its criteria 'Recovery Ratings
and Notching Criteria for Non-financial Corporate Issuers' dated
Nov. 20, 2013). However, in the few instances where the recovery
waterfall suggests an 'RR1' rating and such a Recovery Rating is
supported by the structural and legal characteristics of the debt,
unsecured debt may qualify for an 'RR1' rating. In addition, the
rating also benefits from the structural consideration that Toys
'R' Us has limited capacity to secure debt using real estate given
that there is a limitation on principal property of domestic
subsidiaries at 10% of consolidated net tangible assets under the
$400 million of 7.375% notes due 2018 issued by HoldCo.
As described above, the residual value of $300 million after fully
recovering the $985 million term loan at PropCo I is applied
towards the Delaware B-4 term loan via an unsecured guaranty by
the indirect parent of PropCo I.
Toys 'R' Us, Inc. - HoldCo Debt
The $450 million 10.375% unsecured notes due Aug. 15, 2017, and
the $400 million 7.375% unsecured notes due Oct. 15, 2018 will no
longer benefit from the residual value at PropCo I, as there is no
residual value ascribed from Toys-Delaware or other operating
subsidiaries. Therefore the HoldCo debt and the $577 million
senior notes due to Toys-Delaware that are considered pari passu
with the publicly traded HoldCo notes have poor recovery prospects
(0% to 10%) and have been downgraded to 'CC/RR6' from 'CCC-/RR5'.
Rating Sensitivities
A negative rating action could result if comps trends in the U.S.
and international businesses revert to mid-single-digit declines
and/or gross margins decline by similar rates to 2013 without any
offset from cost reductions. This would indicate more severe
market share losses and lead to tighter liquidity than Fitch's
current expectation over the next 18-24 months.
A positive rating action could result if there is sustainable
improvement in Toys' store and online traffic, indicating improved
market share positioning, and meaningful cost restructuring. Toys
would need to drive EBITDA improvement to a level where it can
meet its obligations of interest expense, capex and taxes and fund
any working capital swings, and manage refinancing of upcoming
debt maturities on a timely basis.
Fitch has taken the following rating action on Toys and its
various subsidiaries:
Toys 'R' Us, Inc.
-- IDR affirmed at 'CCC';
-- Senior unsecured notes downgraded to 'CC/RR6' from 'CCC-/RR5'.
Toys 'R' Us - Delaware, Inc.
-- IDR affirmed at 'CCC';
-- Secured revolver affirmed at 'B/RR1';
-- Secured FILO term loan assigned 'B/RR1';
-- Secured B-4 term loan assigned 'CCC+/RR3';
-- Secured B-2 and B-3 term loans downgraded to 'CCC/RR4' from
'CCC+/RR3';
-- Senior unsecured notes affirmed at 'CC/RR6'.
Toys 'R' Us Property Co. II, LLC
-- IDR affirmed at 'CCC';
-- Senior secured notes affirmed at 'B/RR1'.
Toys 'R' Us Property Co. I, LLC
-- IDR affirmed at 'CCC';
-- Senior unsecured term Loan facility affirmed at 'B/RR1'.
TOYS 'R' US: Moody's Rates $350MM Loan 'Ba3' & $1BB Loan 'B2'
-------------------------------------------------------------
Moody's Investors Service took several rating actions for Toys "R"
Us, Inc., including assigning ratings to two new Toys "R" Us, Inc.
debt issues, a proposed $350 million senior secured FILO term LOAN
and a proposed $1,025 million senior secured term LOAN, both to be
issued by Toys "R" Us-Delaware, Inc. ("Toys-Delaware"), affirming
the B3 Corporate Family rating, and continuing the negative
outlook.
New ratings assigned:
Toys "R" Us-Delaware, Inc.
Proposed $350 million senior secured FILO term loan due October
2019 at Ba3/LGD2
Proposed $1,025 million senior secured guaranteed term loan due
February 2020 at B2/LGD3
Ratings affirmed include:
Toys "R" Us, Inc.
Corporate family rating at B3
Probability of default rating at B3-PD
Speculative Grade LIQUIDITY rating at SGL-2
$400M 7.375% senior notes due 2018 at Caa2/LGD6
$450M 10.375% senior notes due 2017 at Caa2/LGD6
Toys "R" Us Property Company II, LLC
$725M 8.500% senior secured notes due 2017 at Ba3/LGD2
Toys "R" Us Property Company I, LLC
$985M Term Loan at Caa1/LGD5
Ratings downgraded:
Toys "R" Us, Inc.
$200 M senior UNSECURED debentures due 2021 to Caa1/LGD5 from
B3/LGD5
Toys "R" Us-Delaware, Inc.
$400M Incremental secured term LOAN facility due 2018 to B3/LGD3
from B2/LGD3 (potentially to be withdrawn upon closing of proposed
new $1025 million term loan)
$225M Second incremental secured term loan facility due 2018 to
B3/LGD3 from B2/LGD3 (potentially to be withdrawn upon closing of
proposed new $1025 million term loan)
Ratings to be withdrawn upon closing of the new financing:
Toys "R" Us-Delaware, Inc.
$700M senior secured term loan due 2016 at B2/LGD3 (to be
withdrawn upon closing of proposed new $1,025 million term loan)
$350M 7.375% senior secured notes due 2016 at B2/LGD3 (to be
withdrawn upon closing of proposed $350 million FILO term loan)
Ratings Rationale
The B3 Corporate Family rating reflects Toys' weak quantitative
credit profile, which remains hamstrung by the significant levels
of LBO debt that still remain, making reductions IN DEBT/EBITDA to
below 6 times difficult to envision in the foreseeable future. The
rating also incorporates the company's market position, which
while challenged by a formidable set of core competitors such as
Walmart, Target, Amazon, and Best Buy, remains a key positive
rating factor, as are its relationships with key vendors such as
Mattel and Hasbro. The negative outlook reflects Moody's view that
the company will be challenged to improve its operating
performance meaningfully throughout 2014, with these proposed new
debt issuances alleviating the liquidity concern surrounding the
2016 debt maturities. Sequential improvement will be critical to
the maintenance of both the B3 and SGL-2 ratings. To stabilize the
outlook, the company will need to demonstrate the ability to
minimize revenue erosion as well as improve margins, which would
be evidenced by interest coverage exceeding 1 time. An upgrade
would require the company to maintain debt/EBITDA below 7 times
and interest coverage of above 1.25 times. A downgrade could occur
if the company's operating performance were to deteriorate
further, or if liquidity were impaired.
The B2 rating on the proposed $1,025 million senior secured term
loan reflects the added protection it receives from the guaranty
of Toys "R" Us Property I, LLC. The downgrade of the existing
Toys-Delaware term LOANS and the Toys-Inc. debentures reflects the
new positioning of the Ba3-rated proposed $350 million FILO term
loan due its improved collateral support. The company's liquidity
remains good, as reflected in the SGL-2 rating, and will be
improved by the planned new debt issuances and repayments.
The principal methodology used in these ratings was the Global
Retail Industry published in June 2011. Other methodologies used
include Loss Given Default for Speculative-Grade Non-Financial
Companies in the U.S., Canada and EMEA published in June 2009.
Headquartered in Wayne, New Jersey, USA, Toys "R" Us is a leading
specialty toy and juvenile retailer, with annual revenues of
around $12.5 billion, roughly 40% of which are generated through
its International division.
TRIAD GUARANTY: Needs Until Dec. 3 to File Plan
-----------------------------------------------
Triad Guaranty Inc. asks the U.S. Bankruptcy Court for the
District of Delaware to extend until Dec. 3, 2014, its exclusive
plan filing period and until Feb. 3, 2015, its exclusive
solicitation period.
The Debtor said the extension, which is the final extension
available to the Debtor under Section 1121(d)(2) of the Bankruptcy
Code, will afford it an opportunity to develop a plan process
following adjudication of the adversary proceeding relating to
equity interest trading without the risk of the substantial
additional costs and disruption that could follow an expiration of
either the exclusive periods at this critical point.
A hearing on the extension request is scheduled for Oct. 23, 2014,
at 11:30 a.m. Objections are due Oct. 10.
About Triad Guaranty
Winston-Salem, N.C.-based Triad Guaranty Inc. (OTC BB: TGIC)
-- http://www.triadguaranty.com/-- is a holding company that
historically provided private mortgage insurance coverage in the
United States through its wholly-owned subsidiary, Triad Guaranty
Insurance Corporation. TGIC is a nationwide mortgage insurer
pursuing a run-off of its existing in-force book of business.
In December 2012, the Company's mortgage insurer subsidiary, Triad
Guaranty Insurance Corporation, was placed into rehabilitation,
whereby the Illinois Department of Insurance was vested with
possession and control over all of TGIC's assets and operations.
On May 30, 2013, the magistrate judge for the U.S. District Court
of the Middle District of North Carolina issued an order denying
the Company's motion to dismiss a class action lawsuit against the
company and two of its former officers. Shareholders filed the
class action suit in 2009, claiming the company misled investors
about poor financial results caused by improper underwriting
procedures.
Triad Guaranty Inc. filed a Chapter 11 petition (Bankr. D. Del.
Case No. 13-11452) on June 3, 2013. The Company estimated assets
of at least $100 million and liabilities of less than $50,000.
Attorneys at Womble Carlyle Sandridge & Rice, LLP, serve as
counsel to the Debtor.
The Debtor said in court filings that it has no significant
operating activities, and has limited remaining cash and other
assets on hand. The Debtor has been exploring various strategic
alternatives, and will continue to do so from and after the
Petition Date.
The Debtor said that expenses primarily consist of legal fees,
fees paid to its board, annual premiums for directors' and
officers' liability insurance and general operating expenses. The
expenses range from $100,000 to $500,000 per quarter. Unless the
expenses are reduced, the Debtor expects to deplete all of its
remaining cash by the end of 2013 or earlier.
TRIKO LLC: Ch. 11 Case Transferred to Santa Ana Division
--------------------------------------------------------
Judge Thomas B. Donovan of the U.S. Bankruptcy Court Central
District of California, Los Angeles Division, issued an order on
Sept. 25, 2014, transferring the Chapter 11 case of Triko, LLC, to
the Santa Ana Division.
Triko, LLC, commenced Chapter 11 bankruptcy proceedings (Bankr.
C.D. Cal. Case No. 14-28008) in Los Angeles on Sept. 22, 2014, to
stop foreclosure of its property in Fullerton, California.
The Debtor has tapped Michael B. Reynolds and the law firm of
Snell & Wilmer L.L.P. as counsel.
TRUMP ENTERTAINMENT: Icahn May Pump $100MM if Union OKs Cuts
------------------------------------------------------------
Peg Brickley, writing for Daily Bankruptcy Review, reported that
Carl Icahn says he'd consider pumping $100 million into Trump
Entertainment's Taj Mahal if the casino's union workers agree to
another round of cuts. According to DBR, getting a new deal with
Unite Here Local 54 is one component of a last-ditch effort to
keep the Trump Taj Majal in operation, court papers claim. Other
angles include tax concessions and an agreement with Mr. Icahn,
the billionaire who controls Trump Entertainment's $268 million
secured debt, the DBR report said.
Wayne Parry, writing for The Associated Press, reported that Mayor
Don Guardian in Atlantic City said he cannot agree to massive tax
reductions sought by the owners of the Taj Mahal, saying that the
city cannot afford the demands in light of a massive budget
deficit brought on largely by the crumbling of its casino market.
The AP said that the city, plagued by years of successful appeals
by the casinos challenging their tax assessments as too high in
light of the plunging gambling market here, plans to cut $40
million from its budget over the next four years, lay off workers,
and raise taxes on businesses and homes to make up for the lost
revenue.
About Trump Entertainment Resorts
Trump Entertainment Resorts Inc., owner of the Atlantic City
Boardwalk casinos that bear the name of Donald Trump, returned to
Chapter 11 bankruptcy (Bankr. D. Del. Case No. 14-12103) on
Sept. 9, 2014, with plans to close the Trump Plaza by next week,
and, absent union concessions, the Taj Mahal by Nov. 13.
TER and its affiliated debtors own and operate two casino hotels
located in Atlantic City, New Jersey. TER said it will close the
Trump Taj Mahal Casino Resort by Sept. 16, and, absent union
concessions, the Trump Plaza Hotel and Casino by Nov. 13.
The Debtors have sought an order authorizing the joint
administration of their Chapter 11 cases and the consolidation
thereof for procedural purposes only. Judge Kevin Gross presides
over the Chapter 11 cases.
The Debtors have tapped Young, Conaway, Stargatt & Taylor, LLP, as
counsel; Stroock & Stroock & Lavan LLP, as co-counsel; Houlihan
Lokey Capital, Inc., as financial advisor; and Prime Clerk LLC, as
noticing and claims agent.
TER estimated $100 million to $500 million in assets as of the
bankruptcy filing.
The Debtors as of Sept. 9, 2014, owe $285.6 million in principal
plus accrued but unpaid interest of $6.6 million under a first
lien debt issued under their 2010 bankruptcy-exit plan. The
Debtors also have trade debt in the amount of $13.5 million.
The U.S. Trustee for Region 3 on Sept. 23 appointed seven
creditors of Trump Entertainment Resorts, Inc., to serve on the
official committee of unsecured creditors.
TRUMP ENTERTAINMENT: Heads to Court Over Pension Cuts
-----------------------------------------------------
Peg Brickley, writing for Daily Bankruptcy Review, reported that
Trump Entertainment Resorts Inc. will ask the U.S. Bankruptcy
Court in Wilmington, Delaware, to give it authority to get out of
pension obligations it says will destroy its chances to save the
Trump Taj Mahal. According to the DBR report, Trump Entertainment
attorney Kris Hansen told U.S. Bankruptcy Judge Kevin Gross that
ending the pension payments is crucial to the gambling company's
effort to survive bankruptcy.
Bill Rochelle and Sherri Toub, bankruptcy columnists for Bloomberg
News, reported that Trump Entertainment is seeking to terminate
workers? participation in a multiemployer pension plan, giving
them 401(k) plans with matching employer contributions instead.
The company is also asking for court permission to end the
existing health-insurance program for union workers, substituting
participation in the Affordable Care Act, the Bloomberg report
related.
Trump Entertainment, according to Bloomberg, said it will soon
file a reorganization plan for secured lenders to convert some of
their $286 million in old debt into equity and new debt not
requiring cash interest payments. The Bloomberg said that,
assuming everyone else is on board, the lenders will provide $100
million in new capital, but depending on concessions from the
union, New Jersey and Atlantic City.
Carl Icahn, who is owed $268 million in secured debt, said he'd
consider pumping $100 million into Trump Entertainment's Taj Mahal
if the casino's union workers agree to another round of cuts, and
if the state of New Jersey and Atlantic City agree to tax
concessions. Atlantic City Mayor Don Guardian, however, told The
Associated Press, that he cannot agree to massive tax reductions
for Taj Mahal in light of the city's massive budget deficit
brought on largely by the crumbling of its casino market.
About Trump Entertainment Resorts
Trump Entertainment Resorts Inc., owner of the Atlantic City
Boardwalk casinos that bear the name of Donald Trump, returned to
Chapter 11 bankruptcy (Bankr. D. Del. Case No. 14-12103) on
Sept. 9, 2014, with plans to close the Trump Plaza by next week,
and, absent union concessions, the Taj Mahal by Nov. 13.
TER and its affiliated debtors own and operate two casino hotels
located in Atlantic City, New Jersey. TER said it will close the
Trump Taj Mahal Casino Resort by Sept. 16, and, absent union
concessions, the Trump Plaza Hotel and Casino by Nov. 13.
The Debtors have sought an order authorizing the joint
administration of their Chapter 11 cases and the consolidation
thereof for procedural purposes only. Judge Kevin Gross presides
over the Chapter 11 cases.
The Debtors have tapped Young, Conaway, Stargatt & Taylor, LLP, as
counsel; Stroock & Stroock & Lavan LLP, as co-counsel; Houlihan
Lokey Capital, Inc., as financial advisor; and Prime Clerk LLC, as
noticing and claims agent.
TER estimated $100 million to $500 million in assets as of the
bankruptcy filing.
The Debtors as of Sept. 9, 2014, owe $285.6 million in principal
plus accrued but unpaid interest of $6.6 million under a first
lien debt issued under their 2010 bankruptcy-exit plan. The
Debtors also have trade debt in the amount of $13.5 million.
UROLOGIX INC: Incurs $7.61-Mil. Net Loss for FY Ended June 30
-------------------------------------------------------------
Urologix, Inc., filed with the U.S. Securities and Exchange
Commission on Sept. 19, 2014, its annual report on Form 10-K for
the fiscal year ended June 30, 2014.
Baker Tilly Virchow Krause, LLP, expressed substantial doubt about
the Company's ability to continue as a going concern, citing that
the company has suffered recurring operating losses and negative
cash flows from operations, and needs additional working capital
to support future operations.
The Company reported a net loss of $7.61 million on $14.23 million
of sales for the fiscal year ended June 30, 2014, compared with a
net loss of $4.29 million on $16.59 million of sales last year.
The Company's balance sheet at June 30, 2014, showed $5.67 million
in total assets, $12.64 million in total liabilities and total
stockholders' deficit of $6.98 million.
A copy of the Form 10-K is available at:
http://is.gd/QY32Gl
Urologix, Inc., develops, manufactures and markets non-surgical,
office-based therapies for the treatment of the symptoms and
obstruction resulting from non-cancerous prostate enlargement
condition known as benigh prostatic hyperplasia. Based in
Minneapolis, the Company markets its products under the Cooled
ThermoTherapy(TM) and Prostiva(R) Radio Frequency (RF) Therapy
System lines.
USA-CAN 10: Case Summary & 3 Largest Unsecured Creditors
--------------------------------------------------------
Debtor: USA-Can 10 Corp.
8208 Fawncrest Place
Fort Wayne, IN 46835
Case No.: 14-12460
Nature of Business: Single Asset Real Estate
Chapter 11 Petition Date: September 29, 2014
Court: United States Bankruptcy Court
Northern District of Indiana (Fort Wayne Division)
Judge: Hon. Robert E. Grant
Debtor's Counsel: Sarah Mustard Heil, Esq.
Daniel J. Skekloff, Esq.
Scot T. Skekloff, Esq.
SKEKLOFF & SKEKLOFF, LLP
110 W. Berry Street, Suite 2202
Fort Wayne, IN 46802
Tel: (260)407-7000
Fax: (260)420-7072
Email: sarah@skeklofflaw.com
dan@skeklofflaw.com
scot@skeklofflaw.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by George Kotsopoulos, secretary.
A list of the Debtor's three largest unsecured creditors is
available for free at http://bankrupt.com/misc/innb14-12460.pdf
US COAL: Finance Chief's Bonus Nixed by Judge
---------------------------------------------
Bill Rochelle and Sherri Toub, bankruptcy columnists for Bloomberg
News, reported that the U.S. Bankruptcy Judge in Ashland,
Kentucky, barred U.S. Coal Corp. from paying a bonus to its chief
financial officer after the proposal was opposed to by the U.S.
Trustee.
As previously reported by The Troubled Company Reporter, citing
the Bloomberg bankruptcy columnists, the U.S. Trustee complained
that the proposed bonuses' yardstick, which is general unsecured
creditor recoveries under a confirmed Chapter 11 plan, bears
little or no correlation to the CFO's efforts. Even if unsecured
creditors recover nothing under a confirmed plan, the CFO would
get a six-figure bonus, which is tantamount to a payment simply
for staying on through the plan's effective date, the U.S. Trustee
asserted.
The bankruptcy judge, however, allow a combined $150,000 in
bonuses for the controller and assistant controller, who are
responsible for collecting accounts receivable.
About U.S. Coal
Kolmar Americas, Inc., filed an involuntary Chapter 11 bankruptcy
petition for U.S. Coal Corporation (Bankr. E.D. Ky. Case No.
14-51461) in Lexington, Kentucky on June 10, 2014. In its
schedules, U.S. Coal disclosed $56,702,402 in total assets and
$49,970,561 in total liabilities.
Bridgeport, Connecticut-based Kolmar says it is owed by Lexington-
based U.S. Coal roughly $1.36 million on account of a business
debt.
Kolmar sought and obtained dismissal of a duplicate involuntary
petition (Case No. 14-51460) on grounds that it was a duplicate
case.
Kolmar is represented by Daniel I. Waxman, Esq., at Wyatt, Tarrant
& Combs, LLP, in Lexington, Kentucky.
Chief Judge Tracey N. Wise presides over the case.
On June 27, 2014, the Court entered an order directing the joint
administration of the Chapter 11 cases of Licking River Mining,
LLC (Case No. 14-10201), Licking River Resources, Inc. (Case No.
14-10203), S. M. & J., Inc. (Case No. 14-10220), Fox Knob Coal
Co., Inc. (Case No. 14-60619), J.A.D. Coal Company, Inc. (Case
No. 14-60676), and U.S. Coal Corporation (Case No. 14-51461).
Licking River Mining, LLC, Case No. 14-10201, is the lead case.
On June 27, 2014, the Court appointed John Collins as the
individual designated to perform the duties of U.S. Coal
Corporation as a debtor in bankruptcy.
WESTLAKE VILLAGE: Hires Leslie Cohen as Bankruptcy Counsel
----------------------------------------------------------
Westlake Village Property, LP seeks authorization from the Hon.
Deborah J. Saltzman of the U.S. Bankruptcy Court for the Central
District of California to employ Leslie Cohen Law, PC as
bankruptcy counsel, effective Sept. 9, 2014.
The Debtor requires Leslie Cohen to:
(a) advise the Debtor regarding its rights and responsibilities
as a Chapter 11 debtor and a debtor in possession,
specifically including the requirements of the United
States Bankruptcy Code, the Federal Rules of Bankruptcy
Procedure, the Local Bankruptcy Rules, and how the
application of such provisions relates to the
administration of Debtor's estate;
(b) advise and assist the Debtor in connection with the
preparation of certain documents to be filed with the
Bankruptcy Court and the Office of the U.S. Trustee;
(c) represent the Debtor, with respect to bankruptcy issues, in
the context of its pending Chapter 11 case and to represent
the Debtor in contested matters as would affect the
administration of the Debtor's case, except to the extent
that any such proceeding pertains to the excluded services
described above or requires expertise in areas of law
outside of the Firm's expertise;
(d) advise, assist and represent Applicant in the negotiation,
formulation and attempted confirmation of a plan of
reorganization;
(e) render services for the purpose of pursuing, litigating
and settling litigation as may be necessary and appropriate
in connection with this case, including objections to
claims, adversary proceedings to recover preferences and
fraudulent conveyances, and associated matters.
Leslie Cohen will be paid at these hourly rates:
Leslie Cohen $575
Senior Contract Attorneys $350
J'aime Williams $330
Brian Link $240
The Firm received a pre-petition retainer of $40,000 which was
paid from non-Debtor sources. Of this amount, $4,815 was expended
on pre-petition services and the petition filing fee. The balance
of $35,185 has been deposited in a segregated trust account per
the requirement of the U.S. Trustee. An additional $20,000 shall
be paid to the Firm from non-debtor sources by or before Oct. 22,
2014. The Firm will comply with the procedures set forth in the
U.S. Trustee's "Guide to Applications for Retainers, and
Professional and Insider Compensation." The drawdown of fees and
costs incurred will be made in accordance with and subject to the
draw down and fee application requirements of the U.S. Bankruptcy
Court and the Bankruptcy Court's order approving the Firm's
employment.
Leslie A. Cohen, president and sole shareholder of Leslie Cohen
Law, PC, 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.
Leslie Cohen can be reached at:
Leslie A. Cohen, Esq.
LESLIE COHEN LAW, PC
506 Santa Monica Blvd., Suite 200
Santa Monica, CA 90401
Tel: (310) 394-5900
Fax: (310) 394-9280
E-mail: leslie@lesliecohenlaw.com
The Westlake Village, California-based entity, Single Asset Real
Estate as defined in 11 U.S.C. Sec. 101(51B), estimated
$10 million to $50 million in assets and $1 million to $10 million
in debt.
The Company is represented by Leslie A Cohen, Esq., at Leslie
Cohen Law PC, in Santa Monica, California, as counsel.
The schedules of assets and liabilities and the statement of
financial affairs are due Sept. 23, 2014.
An affiliate, Mid-Wilshire Property, LP sought bankruptcy
protection on Sept. 7, 2014 (Case No. 14-11960), which case is
also pending before Judge Saltzman.
WESTLAKE VILLAGE: US Trustee to Hold Creditors Meeting Oct. 9
-------------------------------------------------------------
A meeting of creditors of Westlake Village Property, LP is set to
be held on Oct. 9, at 1:00 p.m., according to a filing with the
U.S. Bankruptcy Court for the Central District of California.
The meeting will be held at the Office of the U.S. Trustee, 128
East Carrillo St., in Santa Barbara, California.
The court overseeing the bankruptcy case of a company schedules
the meeting of creditors usually about 30 days after the
bankruptcy petition is filed. The meeting is called the "341
meeting" after the section of the Bankruptcy Code that requires
it.
A representative of the company is required to appear at the
meeting and answer questions under oath. The meeting is presided
over by the U.S. trustee, the Justice Department's bankruptcy
watchdog.
About Westlake Village
Westlake Village Property, LP, sought Chapter 11 bankruptcy
protection (Bankr. C.D. Cal. Case No. 14-bk-11980) in Santa
Barbara, California, on Sept. 9, 2014.
The case is assigned to Judge Deborah J. Saltzman.
The Westlake Village, California-based entity, Single Asset Real
Estate as defined in 11 U.S.C. Sec. 101(51B), estimated $10
million to $50 million in assets and $1 million to $10 million in
debt.
The Company is represented by Leslie A Cohen, Esq., at Leslie
Cohen Law PC, in Santa Monica, California, as counsel.
The schedules of assets and liabilities and the statement of
financial affairs are due Sept. 23, 2014.
An affiliate, Mid-Wilshire Property, LP sought bankruptcy
protection on Sept. 7, 2014 (Case No. 14-11960), which case is
also pending before Judge Saltzman.
WET SEAL: Incurs $22.01-Mil. Net Loss in August 2 Quarter
---------------------------------------------------------
The Wet Seal, Inc., filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q, disclosing a net
loss of $22.01 million on $121.18 million of net sales for the
thirteen weeks ended Aug. 2, 2014, compared with net income of
$958,000 on $137.25 million of net sales for the thirteen weeks
ended Aug. 3, 2013.
The Company's balance sheet at Aug. 2, 2014, showed $133.46
million in total assets, $108.74 million in total liabilities and
stockholders' equity of $24.73 million.
"If the Company is unable to complete the private placement and
the intended rights offering, return to positive same-store sales
growth and improve its gross margins in the future, and it then
continues to experience negative cash flow from operations, the
Company may deplete all of its cash reserves and be required to
access most, if not all, of the senior revolving credit facility,
and would potentially require other sources of financing to fund
its operations, which sources might not be available, or if
available, may not be on terms acceptable to the Company. In
addition, the Company may need to take various actions, such as
down-sizing, which could include exit costs, or reducing or
delaying capital expenditures, strategic investments or other
actions, and the Company's business could be materially and
adversely affected and could raise substantial doubt about the
Company's ability to continue as a going concern. In this event,
it could have an adverse impact on the Company's relationships
with its merchandise vendors, lenders and other creditors,"
according to the regulatory filing.
A copy of the Form 10-Q is available at:
http://is.gd/SIic5F
The Wet Seal, Inc. -- http://www.wetsealinc.com/-- is a specialty
retailer of fashionable and contemporary apparel and accessory
items. The Company was incorporated in Delaware and is
headquartered in Foothill Ranch, California.
XTREME POWER: Gets Court's Nod to Auction Grove Equipment
---------------------------------------------------------
The Hon. Christopher Mott of the U.S. Bankruptcy Court for the
Western District of Oklahoma has approved the public auction of
the equipment of Xtreme Power Grove, LLC, located in Grove,
Oklahoma, and the bidding procedures in connection with the sale.
A copy of the order and the court-ordered bidding procedures is
available for free at:
http://bankrupt.com/misc/XTREMEPOWER_809_saleord.pdf
On Sept. 12, 2014, Xtreme Power Inc., et al., sought the approval
of their proposed bidding procedures in connection with the public
auction of the XP Owned Equipment, which contemplate an auction
process pursuant to which sealed bids for the XP Owned Equipment
may be subject to higher or otherwise better offers if the Debtors
believe continuation of the auction is appropriate. Copies of the
motion and the proposed bidding procedures are available for free
at:
http://is.gd/q9CN9a
http://bankrupt.com/misc/XTREMEPOWER_793_biddingprocedures.pdf
A potential bidder must first submit an executed confidentiality
agreement in form and substance satisfactory to the Debtors and
their counsel.
The deadline for submitting a qualified bid will be Nov. 7, 2014,
at 4:00 p.m. prevailing Central time. The Court will conduct the
sale hearing at 1:30 p.m. prevailing Central time on Nov. 17,
2014. Objections, if any, to the approval of the sale must be
filed by 12 noon (Central time) on Nov. 12, 2014.
A qualified bidder is obligated to perform as a back-up bidder in
the event the qualified bidder is not the prevailing bidder.
Horizon Batteries, L.L.C., Idling Solutions, L.L.C., and Horizon
Batteries Real Estate L.L.C. objected to the Debtors' proposed
bidding procedures in connection with the sale by public auction
of the XP Owned Equipment. The Horizon Parties requested in a
court filing dated Sept. 26, 2014, that the Court: (a) impose
commercially reasonable protections for Horizon Batteries, the
landlord, (b) cause the Debtors to identify the specific equipment
to be sold pursuant to the Bidding Procedures, and
(c) impose commercially reasonable Bidding Procedures to insure an
open, fair and reasonable auction process, including the Horizon
Parties' participation in the auction process.
The Horizon Parties stated in their Sept. 23 filing that the
parties are still in the process of negotiating the acquisition of
the XP Owned Equipment and the Court has ordered mediation to aid
in that process, which mediation has not been concluded. The
Horizon Parties complained that the Debtors' auction motion have
several misstatements. A copy of the objection is available for
free at:
http://bankrupt.com/misc/XTREMEPOWER_804_saleobj.pdf
The Court has ruled that all objections of the Horizon Parties are
overruled.
On Sept. 9, 2014, the order regarding the sale of assets located
in mainland China was withdrawn. The withdrawn order states that
(i) the persons or entities holding liens in, to or against the
China unit will be forever barred, estopped and permanently
enjoined from asserting the liens against the purchaser, its
successors and assigns or the China Unit after closing; (ii) the
sale of the China unit, pursuant to the order, will vest the
purchaser with good title to the China unit and will be a legal,
valid and effective transfer of the China unit free and clear of
all liens; (iii) entities that are in possession of the unit on
the closing date are required and directed to surrender possession
to the purchaser; and (iv) Younicos will grant Horizon Batteries
the resolution license and also the additional license Horizon
Batteries has requested, if and when XPG's proposed sale to
Horizon Battery closes.
The Horizon Parties are represented by:
J. Michael Sutherland, Esq.
Lisa M. Lucas, Esq.
CARRINGTON, COLEMAN, SLOMAN & BLUMENTHAL, L.L.P.
901 Main Street, Suite 5500
Dallas, TX 75202
Tel: (214) 855-3000
Fax: (214) 855-1333
E-mail: msutherland@ccsb.com
llucas@ccsb.com
- and -
C. Joyce Hall, Esq.
Watkins & Eager PLLC
400 East Capitol Street
Jackson, MS 39201
Tel: (601) 965-1900
Fax: (601) 965-1901
E-mail: jhall@watkinseager.com
About Xtreme Power
Xtreme Power focuses on the design, engineering, installation, and
monitoring of integrated energy storage systems for power
generators, grid operators and commercial and industrial end
users, among others. Xtreme Power to be one of the world's
leading grid-scale power control technology provider capable of
integrating the full spectrum of energy generation sources and
battery technologies.
Xtreme Power Inc. and two affiliates filed Chapter 11 bankruptcy
petitions (Bankr. W.D. Tex. Lead Case No. 14-10096) in Austin,
Texas, on Jan. 22, 2014. Judge Christopher H. Mott presides over
the case. The Debtor is represented by Shelby A. Jordan, Esq., at
Jordan, Hyden, Womble, Culbreth & Holzer, P.C. The Debtors tapped
Baker Botts L.L.P. as special counsel, and Gordian Group, LLC, as
investment banker and financial advisor.
Debtor Power Inc. scheduled $7,004,915 in total assets and
$65,743,283 in total liabilities. Debtor Power Grove scheduled
$5,179,692 in total assets and $31,882,277 in total liabilities.
Power Systems scheduled $4,303,921 in total assets and $87,666,873
in total liabilities.
The Creditors' Committee is represented by Eric J. Taube, Esq.,
Mark C. Taylor, Esq., and Morris D. Weiss, Esq., at Hohmann, Taube
& Summers, LLP, in Austin, Texas.
XTREME POWER: Court Sets Oct. 31 as Plan Filing Deadline
--------------------------------------------------------
The Hon. Christopher Mott of the U.S. Bankruptcy Court for the
Western District of Oklahoma has given Xtreme Power Inc., et al.,
until Oct. 31, 2014, to file their proposed plan of reorganization
and the accompanying disclosure statement.
About Xtreme Power
Xtreme Power focuses on the design, engineering, installation, and
monitoring of integrated energy storage systems for power
generators, grid operators and commercial and industrial end
users, among others. Xtreme Power to be one of the world's
leading grid-scale power control technology provider capable of
integrating the full spectrum of energy generation sources and
battery technologies.
Xtreme Power Inc. and two affiliates filed Chapter 11 bankruptcy
petitions (Bankr. W.D. Tex. Lead Case No. 14-10096) in Austin,
Texas, on Jan. 22, 2014. Judge Christopher H. Mott presides over
the case. The Debtor is represented by Shelby A. Jordan, Esq., at
Jordan, Hyden, Womble, Culbreth & Holzer, P.C. The Debtors tapped
Baker Botts L.L.P. as special counsel, and Gordian Group, LLC, as
investment banker and financial advisor.
Debtor Power Inc. scheduled $7,004,915 in total assets and
$65,743,283 in total liabilities. Debtor Power Grove scheduled
$5,179,692 in total assets and $31,882,277 in total liabilities.
Power Systems scheduled $4,303,921 in total assets and $87,666,873
in total liabilities.
The Creditors' Committee is represented by Eric J. Taube, Esq.,
Mark C. Taylor, Esq., and Morris D. Weiss, Esq., at Hohmann, Taube
& Summers, LLP, in Austin, Texas.
XTREME POWER: Court Lifts Stay, First Wind May Liquidate Claims
---------------------------------------------------------------
The Hon. Christopher Mott of the U.S. Bankruptcy Court for the
Western District of Oklahoma, at the behest of First Wind
Holdings, LLC's, has terminated the automatic stay to: (i) allow
First Wind to have the immediate right to liquidate any and all of
its claims against Xtreme Power Inc., et al., including but not
limited to those detailed in First Wind's proofs of claim, filed
on May 25, 2014; (ii) allow First Wind to apply any proceeds
available under the Debtors' liability policies, including the
liability policies, to First Winds' liquidated claims; and (iii)
enter into any agreed resolution with any of the Debtors'
insurance carriers which resolution may include payment to First
Wind by one or more of the carriers without any further action by
or approval of the Court.
As reported by the Troubled Company Reporter on Aug. 25, 2014,
First Wind's motion for relief seeks permission to pursue
litigation concerning the Kahuku fire that occurred in August
2012. The Debtors objected to the motion, saying that while all
the parties agree that the claims of First Wind must be liquidated
at some point, there is no urgency to proceed with that litigation
now, and open the flood gates to other claimants that may wish to
proceed with litigation in other forums on proofs of claims that
have been filed with the Court.
In an order dated Sept. 25, 2014, the Court stated that it found
that First Wind's rights in and to the proceeds of the insurance
policies and the need to liquidate First Wind's claims constitute
cause for relief from the automatic stay sufficient to grant the
relief as requested in First Wind's motion. The stay does not
apply to prevent First Wind from pursuing the proceeds of the
Debtor's liability policies, including the liability policies
because those proceeds are not property of the Debtors' estates
pursuant to 11 U.S.C. Section 541 because a payment by an insurer
under any of the Debtors' liability policies inures to the benefit
of First Wind and not to the Debtors.
About Xtreme Power
Xtreme Power focuses on the design, engineering, installation, and
monitoring of integrated energy storage systems for power
generators, grid operators and commercial and industrial end
users, among others. Xtreme Power to be one of the world's
leading grid-scale power control technology provider capable of
integrating the full spectrum of energy generation sources and
battery technologies.
Xtreme Power Inc. and two affiliates filed Chapter 11 bankruptcy
petitions (Bankr. W.D. Tex. Lead Case No. 14-10096) in Austin,
Texas, on Jan. 22, 2014. Judge Christopher H. Mott presides over
the case. The Debtor is represented by Shelby A. Jordan, Esq., at
Jordan, Hyden, Womble, Culbreth & Holzer, P.C. The Debtors tapped
Baker Botts L.L.P. as special counsel, and Gordian Group, LLC, as
investment banker and financial advisor.
Debtor Power Inc. scheduled $7,004,915 in total assets and
$65,743,283 in total liabilities. Debtor Power Grove scheduled
$5,179,692 in total assets and $31,882,277 in total liabilities.
Power Systems scheduled $4,303,921 in total assets and $87,666,873
in total liabilities.
The Creditors' Committee is represented by Eric J. Taube, Esq.,
Mark C. Taylor, Esq., and Morris D. Weiss, Esq., at Hohmann, Taube
& Summers, LLP, in Austin, Texas.
XTREME POWER: Dynapower May Pursue Coverage for Liquidate Claims
----------------------------------------------------------------
The Hon. Christopher Mott of the U.S. Bankruptcy Court for the
Western District of Oklahoma has granted Dynapower Company, LLC's
request to terminate, annul, modify, or condition the automatic
stay to allow Dynapower to: (i) liquidate its claims against
Xtreme Power Inc., et al., and to pursue coverage for the
liquidated claims under the Debtors' liability policies;
(ii) enter into any agreed resolution with any of the Debtors'
insurance carriers, which resolution may include payment to
Dynapower by one or more of the carriers without any further
action by or approval of the Court; and (iii) seek contribution
and indemnity from the proceeds of the Debtors' applicable
insurance policies, if any party sues Dynapower related to the
2012 Kahuku Fire.
On Aug. 13, 2014, Dynapower filed a motion for relief from the
automatic stay. In addition, Dynapower joined in support of First
Wind Holdings, LLC's own motion for reilef from stay.
In its motion, Dynapower stated, "The automatic stay likely does
not apply to prevent Dynapower from pursuing the proceeds of the
insurance policies, as such proceeds are not property of the
Debtors' estates. However, Dynapower cannot pursue such proceeds
without first liquidating its claims through judgment or
settlement. Any recovery by Dynapower of insurance proceeds will
reduce its claims against the estates dollar-for-dollar, and thus
is in the best interests of the Debtors' other creditors."
Dynapower said in its Aug. 13 court filing that pursuant to the
terms of the Debtors' insurance policies, Dynapower, as the
injured party (and not the Debtors), would have a right to the
proceeds upon any payment on a claim under the insurance policies.
Dynapower stated that its claims would be prosecuted against the
Debtors and the Debtors' insurers if they fail to pay any adverse
judgment against or satisfy any appropriate settlement with the
Debtors. Dynapower claimed that its rights in and to the proceeds
of the insurance policies and the need to liquidate its claims
also constitutes cause for relief from the stay.
A copy of the motion is available for free at:
http://bankrupt.com/misc/XTREMEPOWER_759_stay.pdf
In the Sept. 25, 2014 order, the Court stated that it found that:
(i) Dynapower's rights in and to the proceeds of the insurance
policies and the need to liquidate its claims constitute cause for
relief from the automatic stay sufficient to grant the relief as
requested in the its motion; and (ii) the automatic stay does not
apply to prevent Dynapower from pursuing the proceeds of the
Debtor's liability policies, including the liability policies
because the proceeds are not property of the Debtors' estates
pursuant to 11 U.S.C. Section 541 because a payment by an insurer
under any of the Debtors' liability policies inures to the benefit
of Dynapower and not to the Debtors.
About Xtreme Power
Xtreme Power focuses on the design, engineering, installation, and
monitoring of integrated energy storage systems for power
generators, grid operators and commercial and industrial end
users, among others. Xtreme Power to be one of the world's
leading grid-scale power control technology provider capable of
integrating the full spectrum of energy generation sources and
battery technologies.
Xtreme Power Inc. and two affiliates filed Chapter 11 bankruptcy
petitions (Bankr. W.D. Tex. Lead Case No. 14-10096) in Austin,
Texas, on Jan. 22, 2014. Judge Christopher H. Mott presides over
the case. The Debtor is represented by Shelby A. Jordan, Esq., at
Jordan, Hyden, Womble, Culbreth & Holzer, P.C. The Debtors tapped
Baker Botts L.L.P. as special counsel, and Gordian Group, LLC, as
investment banker and financial advisor.
Debtor Power Inc. scheduled $7,004,915 in total assets and
$65,743,283 in total liabilities. Debtor Power Grove scheduled
$5,179,692 in total assets and $31,882,277 in total liabilities.
Power Systems scheduled $4,303,921 in total assets and $87,666,873
in total liabilities.
The Creditors' Committee is represented by Eric J. Taube, Esq.,
Mark C. Taylor, Esq., and Morris D. Weiss, Esq., at Hohmann, Taube
& Summers, LLP, in Austin, Texas.
* Lawyer Pays $50,000, Is Held in Contempt for Collecting Fees
--------------------------------------------------------------
Bill Rochelle and Sherri Toub, bankruptcy columnists for Bloomberg
News, reported that the U.S. Court of Appeals in New Orleans
affirmed a lower court's decision directing a consumer bankruptcy
lawyer to pay more than $50,000 in damages to a former client for
collecting $1,200 in fees after the client filed a Chapter 7
bankruptcy.
The report explains that Congress and the U.S. Supreme Court
together created a problem for bankruptcy lawyers who represent
people needing to shed debt under Chapter 7, known as straight
bankruptcy as the law has been interpreted to mean that the lawyer
can't collect a Chapter 7 fee after the petition is filed. In the
case before the Court of Appeals, a former client sued alleging
that collection of the fee after bankruptcy was in violation of
the so-called automatic stay and the injunction barring collection
of a discharged debt.
The case in the appeals court is In re Collier, 14-30887, 2014 BL
261430, U.S. Court of Appeals for the Fifth Circuit (New Orleans).
The lower-court case is Wheeler v. Collier, 11-cv-01670, U.S.
District Court, Western District of Louisiana (Shreveport).
* Companies With Moody's "B3-" or Lower Ratings Increase
--------------------------------------------------------
The number of companies in the bottom third of Moody's rating
scale, indicated by their inclusion on its B3 Negative and Lower
Corporate Ratings List, rose to 171 as of September 1 from 166 at
the beginning of June, the rating agency says in a new report. The
list has slowly increased since the third quarter of 2013 and has
now exceeded its three-month moving average for seven straight
months, but also remains well below its record high of 290, set in
the first quarter of 2009.
Moody's list includes all US non-financial companies with a
probability of default rating of B3 negative or below. Companies
are added to it via a downgrade or rating assignment of B3
negative or below, and are removed from it via an upgrade to B3
stable or higher, or through a default or rating withdrawal. The
list was first published in March 2009.
"The increase during the past three months, though small, brought
the number of companies on Moody's list to its highest level in
two years," says Associate Analyst, Julia Chursin. "This past
quarter 30 companies were added, while 25 fell off, though the
removals this past quarter were due to rating upgrades, rating
withdrawals or outlook revisions as opposed to defaults, as seen
in the prior quarter."
Despite the rise, Moody's other indicators of speculative-grade
credit quality continue to point to benign credit conditions,
Chursin says in "The Upticks Continue but Most Indicators Point to
Calm Conditions Ahead." Both Moody's LIQUIDITY-Stress Index and
its Covenant Stress Index, harbingers of corporate liquidity
weakness and the risk that a high-yield company will breach its
financial covenants, respectively, remain below their historical
averages and peaks. And Moody's predicts the US speculative-grade
default rate will stand at 2.7% in August next year, up from 1.8%
currently but still far from its long-term average of 4.4%.
Moody's B3 Negative List and other proprietary indicators have
proven to be good indicators of credit-quality trends, but in
themselves don't provide insight into the relative value of a
company's DEBT instruments, Chursin says. For this reason, in this
latest report, Moody's includes these companies' market-implied
ratings, specifically bond-implied ratings, when available.
Market-implied ratings, a product of Moody's Analytics, translate
prices for the CDS, bond and LOAN markets into standard Moody's
ratings language and compare the signals for a given company to
market-wide measures.
"When a company's market-implied rating rises but its senior debt
rating remains the same, the underlying securities have
outperformed the broad market, and vice versa," Chursin says.
"Based on this approach, Moody's have identified the
'outperformers' and 'underperformers' on the B3 Negative List over
the past month to find securities that are trading 'cheaply' for
their ratings."
Moody's new report includes the full list of companies rated B3
negative and lower, as well as a map detailing average bond-
implied gaps by sector.
* NewOak Appoints Nguyen as Corporate Solutions Managing Director
-----------------------------------------------------------------
NewOak on Sept. 29 announced the appointment of Triet M. Nguyen as
a managing director in its Corporate and Municipal Credit
Solutions Group. Mr. Nguyen will be a senior member of the team,
helping it to continue building out its capabilities and assisting
clients in fundamental credit assessment, surveillance and
portfolio monitoring.
"NewOak stands at the intersection of two exciting trends in
fixed-income research and risk management: the increasing
application of fundamentally driven corporate and municipal bond
research, modeling and forecasting techniques; and the application
of technology to greatly enhance credit and surveillance efforts
for institutional portfolios. I look forward to helping the
NewOak team develop and implement these pioneering solutions for
our clients," said Mr. Nguyen.
"In the age of big data, reduced liquidity and increasing
complexity, a transparent and efficient fundamental approach to
credit surveillance and portfolio monitoring is going to be
critical for financial institutions seeking to improve credit
oversight, risk and regulatory transparency. Deep knowledge and
critical thinking are powerful assets in leveraging the process
and data needed to achieve this objective. Triet brings a wealth
of fundamental municipal and corporate credit expertise to the
firm and will be a real driver of our expansion in these key areas
going forward," said NewOak Chief Executive Officer Ron D'Vari.
Over his 32 year career, Mr. Nguyen has designed, marketed and
managed every type of buy-side investment product, from mutual
funds (open and closed-end) to managed accounts and hedge funds.
Most recently, he served as managing partner of Axios Advisors
LLC, an independent municipal research and investment advisory
firm he founded in 2002 specializing in high-income strategies and
is the author of Investing in the High Yield Municipal Market,
published by Bloomberg Press.
Prior to that, he was a senior vice president at B.C. Ziegler,
where he traded tax-exempt high-yield and taxable municipal bonds
(including Build America Bonds). From January 2004 to January
2008, he was a managing partner at Saybrook Capital LLC, managing
one of the first-ever municipal hedge funds dedicated to a credit
strategy. As director of information services at ebondUSA.com
between 2000 and 2001, Mr. Nguyen contributed to the development
of a pioneering online municipal bond evaluation system. Prior to
2000, he was a vice president and portfolio manager of the John
Hancock Funds and a senior portfolio manager of the Putnam Funds.
Mr. Nguyen received a B.A. in Economics and an M.B.A. in Finance
and Accounting from the University of Chicago.
About NewOak
NewOak is built for today's global financial markets. Powered by
an experienced team of independent, cross-asset class experts,
NewOak's financial advisory services and litigation consulting
help its clients surmount the unique and demanding challenges in
the critical areas of credit, valuation, risk, compliance and
regulation, enabling them to maximize efficiencies internally and
outperform externally.
Backed by leading-edge analytics and proprietary, customizable
technology solutions, NewOak's veteran market practitioners and
legal professionals collaborate with clients to convert complex
business threats into competitive advantage. Every day.
*********
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.
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S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine
Tumanda, Valerie Udtuhan, Howard C. Tolentino, Carmel Paderog,
Meriam Fernandez, Joel Anthony G. Lopez, Cecil R. Villacampa,
Sheryl Joy P. Olano, Psyche A. Castillon, Ivy B. Magdadaro, Carlo
Fernandez, Christopher G. Patalinghug, and Peter A. Chapman,
Editors.
Copyright 2014. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers. Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.
The TCR subscription rate is $975 for 6 months delivered via
e-mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance thereof
are $25 each. For subscription information, contact Peter A.
Chapman at 215-945-7000 or Nina Novak at 202-241-8200.
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