/raid1/www/Hosts/bankrupt/TCR_Public/141010.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Friday, October 10, 2014, Vol. 18, No. 282
Headlines
AEROSPORT AIRPORT: Moody's Lowers Rating on $350MM Notes to Ba2
ALLIED SYSTEMS: Judge Won't Waste Time on 2013 Settlement
AMERICAN INT'L: Got Billions Without Paperwork, Lawyer Says
AMERICAN INT'L: Bernanke, Paulson, Geithner Grilled over Bailout
AMERICAN SPECTRUM: Gets NYSE MKT Listing Non-Compliance Notice
AMSTERDAM HOUSE: Can Hire Herbert J. Sims as Investment Banker
AOXING PHARMACEUTICAL: To Sell 4.5 Million Shares to Employees
ASSOCIATED WHOLESALERS: Has Final Approval for $193-Mil. Package
BANOS Y PISOS: Case Summary & 17 Largest Unsecured Creditors
BEST TOYS: Case Summary & 6 Largest Unsecured Creditors
BMOC INVESTORS: Should Be Dropped From Bank Suit, Court Says
BRANDYWINE HEALTH: May Recoup $3,200 From Columbus Paper
BLAKE ROUSSEL: Can't Appeal Atty Fee Remand, 8th Circuit Says
BREITBURN ENERGY: Moody's Assigns B3 Rating on $400MM Sr. Notes
CAESARS ENTERTAINMENT: Receives Notice of Default From Trustee
CHARLES KANE: Attys Ask High Court to Discharge $2-Mil. Debt
COASTLINE INVESTMENT: Oct. 28 Hearing on Diamond's Case Dismissal
COMSTOCK MINING: Van Den Berg Stake at 25.3% as of Sept. 30
CROWN HOLDINGS: S&P Affirms 'BB' CCR & Rates Proposed Loans 'BB+'
CRS HOLDINGS: Approved to Sell Blubox to 3S International
CRS HOLDINGS: Oct. 16 Hearing on Bid for Relief from Stay
CRUMBS BAKE SHOP: Seeks Conversion to Ch. 7 Following Asset Sale
DETROIT, MI: Orr Says Settlements Spared City Costly Litigation
DETROIT, MI: Moody's Places COP Ca Rating on Review for Downgrade
EAM ENTERPRISES: Wash. Judge Confirms Exit Plan
ECO BUILDING: Obtains $833,333 Funding From Dominion Affiliate
EDUCATION MANAGEMENT: Gets NASDAQ Listing Non-Compliance Notice
EMPRESAS BT: Case Summary & 20 Largest Unsecured Creditors
ENDEAVOUR INT'L: Enters Into Forbearance Agreements
ENERGY FUTURE: Oncor Bidders Don't Have to Be Disclosed
ENERGY FUTURE: Investors Say Fidelity Broke Deal to Sell in Notes
FIRST SECURITY: Written Pact With Federal Reserve Terminated
FLUX POWER: Incurs $4.3 Million Net Loss in Fiscal 2014
GENERAL CABLE: S&P Withdraws 'B+' Rating on $250MM Sr. Notes
GENERAL CERAMICS: Insurers Defeat Buyer's Suit for Cleanup Costs
GEOMET INC: CrossCap Management Stake at 9.1% as of Aug. 1
GLOBAL COMPUTER: Seeks Court Approval on Employee Incentive Plan
GOLF TOWN: DBRS Lowers Issuer Rating to 'B'
GREAT NORTHERN: Creditors Get Ch. 7 Case Moved to Maine
GREAT PLAINS: 1st Source Rejects Plan; Others Submit Yes Votes
GREAT PLAINS: Ohio Says 5th Plan Excludes Priority Tax Claims
GREAT PLAINS: RBS Awaiting Settlement Balance
GREAT PLAIN: Plan Confirmation Hearing Set for Nov. 13
GT ADVANCED: Asks for Nov. 20 Extension of Schedules Deadline
GT ADVANCED: Proposes to Set Claims Bar Dates
GT ADVANCED: Wants to Keep Issues with Apple Secret
HERCULES OFFSHORE: Director Suzanne Baer Won't Seek Re-Election
HRK HOLDINGS: Withdraws Emergency Motion to Sell Property
INVESTORS GROUP: Dallas Judge Affirms Bankruptcy Case Dismissal
JEFFERIES FINANCE: Moody's Affirms Ba3 Corporate Family Rating
KANGADIS FOOD: Owners Want Out of Labeling Suit
KEYWELL LLC: BofA May Apply Portion of Cash to Expenses
KING CHAVEZ PUBLIC SCHOOL: S&P Alters Ratings Outlook to Negative
KRISTINA LAFERNE ROBERTS: Author Zane Filed for Bankruptcy
L.L. MURPHREY: Appeals Court Green Lights Foreclosure
LEHMAN BROTHERS: Trustee, Barclays Spawn a New $1.2-Bil. Dispute
LEVEL 3 COMMUNICATIONS: S&P Affirms 'BB' Secured Debt Rating
LIGHTSQUARED INC: Top Lenders Abandon Plan to Split Company
MAGNUM HUNTER: Moody's Assigns B1 Rating on $340MM 2nd Lien Loan
MCKEN LLC: Court to Hold Expedited Hearing on Buffington Pact
METALDYNE PERFORMANCE: S&P Retains 'BB-' CCR After Loan Upsize
MIDTOWN SCOUTS: Confirmation Hearing Rescheduled for Oct. 28
MOMENTIVE PERFORMANCE: Expects Plan Effective Date in 4th Quarter
MONTREAL MAINE: DSI Services to Provide Transition Services
MPG HOLDCO: $1.35BB Add-on Loan No Impact on Moody's B1 CFR
MUSCLEPHARM CORP: Appoints Andrew Lupo as Director
MMRGLOBAL INC: To Report Biggest Revenue in Company History
NAARTJIE CUSTOM: Target Ease Part of Creditors Committee
NAKED BRAND: Amends 41.5 Million Shares Resale Prospectus
NATURAL RESOURCE: S&P Affirms 'B+' CCR; Outlook Stable
NORTEL NETWORKS: E&Y Objects to Bondholder Group Deal
OHCMC-OSWEGO LLC: Court Confirms Sale-Based Plan
OPAL ACQUISITION: S&P Affirms 'B' CCR & Revises Outlook to Stable
QIMONDA AG: Justices Empower Ch. 15 Courts on IP Licensing Issues
QUANTUM FOODS: Oaktree Wants Fraud Claims Nixed From Sale Fight
QUICKSILVER RESOURCES: Quicksilver Energy Holds 18.5% Stake
QUICKSILVER RESOURCES: Thomas Darden Reports 22.5% Stake
RADIOSHACK CORP: Investors Acquire ABL Facility From GE Capital
REICHHOLD HOLDINGS: Meeting to Form Creditors Committee on Oct 14
RESIDENTIAL CAPITAL: Claim With 'Outrageous Invective' Nixed
REVEL AC: 4th Interim Order Authorizing DIP Financing Entered
REVEL AC: Order on $110-Mil. Sale to Brookfield Entered
RICEBRAN TECHNOLOGIES: Hires Marcum LLP as New Accountants
RITE AID: Inks Stock Trading Plan With Robert Thompson
ROGER OCHSNER: Minn. Court Flips Ruling in Relco Dispute
SAN JOAQUIN HILLS: Fitch Puts BB+ Debt Rating on Watch Positive
SAN JOAQUIN HILLS: S&P Hikes Toll Road Rev Bonds Rating From BB-
SCIENTIFIC GAMES: Amends Credit Pact to Permit Bally Acquisition
SEARS HOLDINGS: Files Registration Statement for Rights Offering
SHIVA-OM INC: Case Summary & 11 Largest Unsecured Creditors
SOLAR POWER: Agrees to Issue 31.7 Million Common Shares
SOLAR POWER: Intends to Buy 7.4 Billion of Guocang Shares
SIGA TECHNOLOGIES: Court Partially Lifts Stay of ParmAthene Suit
SOUNDVIEW ELITE: Files Schedules of Assets and Liabilities
SPECIALTY PRODUCTS: RPM Reports $99.1MM Net Income in Q1 of 2014
SPRINGLEAF HOLDINGS: Moody's Hikes Corporate Family Rating to B2
STANFORD GROUP: Chadbourne & Parke Wants Ponzi Abetting Suit Axed
STANFORD GROUP: Proskauer Says Ponzi Abetting Suit Is 'Stale'
STILLWATER ASSET: Trust's $50MM Suit Claims Asset-Stripping Plot
TEM ENTERPRISES: Asks Court to Confirm Second Amended Plan
TRIMAS CORP: S&P Assigns 'BB-' Rating to $250MM Loan Due 2018
TRUMP ENTERTAINMENT: Accuses Union of Harassing Customers
U.S. STEEL: CCAA Stay Extended; $185MM DIP Financing Okayed
UNITED GILSONITE: Plan Confirmation Hearing Scheduled for Dec. 8
UNITEK GLOBAL: Moody's Lowers Corporate Family Rating to Ca
VARIANT HOLDING: Bid for Overseer Gets US Trustee's Backing
VAUGHAN COMPANY: Scheduling Order in Clawback Suit Modified
VISTEON CORP: 3rd Circ. Won't Rehear Suit Over Retiree Benefits
WORLDCOM INC: Supreme Court Passes on Verizon's $50M Tax Suit
* Bankruptcy Attorneys Launch New Firm Smiley Wang-Ekvall LLP
* BOOK REVIEW: AS WE FORGIVE OUR DEBTORS: Bankruptcy and
Consumer Credit in America
*********
AEROSPORT AIRPORT: Moody's Lowers Rating on $350MM Notes to Ba2
---------------------------------------------------------------
Moody's Investors Service downgraded Aerostar's $350 million of
senior secured notes rating to Ba2 from Ba1 and changed the rating
outlook to negative concluding the rating review that was
initiated on July 17.
Aerostar Airport Holdings, LLC (AAH) is the project company
selected by the Commonwealth of Puerto Rico (B2 negative) to
operate Luis Munoz Marin Airport (LMM), the largest commercial
airport in Puerto Rico, under a 40 year lease agreement. AAH is
jointly owned by Highstar Capital IV L.P. and Aeropuerto de Cancun
S.A. de C.V. In March 2013, Aerostar issued $350mm of 5.75% Senior
Secured Notes due 2035 (Notes).
Ratings Rationale
The downgrade of Aerostar's notes to Ba2 recognizes that the
airport's creditworthiness cannot be completely de-linked from the
current stresses facing the government, economy and population of
the Commonwealth of Puerto Rico (B2 negative). The region's
current situation makes credit quality more uncertain for
companies operating under government-granted concessions governed
under local law whose cash flow can also be affected by changes in
the economic environment or potentially by interference from the
government. The rating action acknowledges the challenges of
systemic risks for all local credits, particularly those that have
a dependence on the local economy for cash flow. In addition, the
Commonwealth's fiscal distress could impact the ability of the
Puerto Rico Ports Authority (unrated) to make compensation
payments to Aerostar in the event of adverse actions or
termination.
Notwithstanding this relationship, the rating differential between
Aerostar and the Commonwealth of Puerto Rico acknowledges a number
of credit considerations. To begin with, the 15 year Airline Use
Agreement with signatory airlines provides a stable amount of
aeronautical revenues at $62mm per year, roughly 60% of total
revenues, regardless of passenger or enplanement volumes. Aerostar
enjoys a significant share of the island's air travel market.
Aerostar's greater dependence on tourism related travel from the
United States rather than the domestic economy helps support its
business prospects. Another key consideration is, the fact that
Luis Munoz Marin Airport is the first and only major US passenger
airport P3 that has been privatized under the FAA's Airport
Privatization Program. The involvement of the FAA through the
Airport Privatization Program helps to underpin the legal and
operating arrangement between the concession and the government
that potentially reduces the likelihood of interference from the
Commonwealth.
Aerostar has been performing adequately despite flat enplanement
levels in 2013 and a growth of 4% as of September 2014, year-to-
date. Going forward, LMM will have increasing reliance on
variable, non-aeronautical revenue to cover debt service as
debt begins to amortize. Specifically, the concession is focused
on maximizing commercial, parking and other non-aeronautical
revenues, a business strategy that was not the focus of the prior
airport management. While there are risks with respect to the
timing and magnitude of new operating revenues, ultimately the
greater diversification of airport revenues could provide the
airport with more resilience. The growth expansion expected to
spur the non-aeronautical revenue remains on track and the
majority of the works are expected to be concluded by November
2014.
The rating outlook is negative, mirroring the negative outlook on
the B2 rating of the Commonwealth of Puerto Rico, and consistent
with Moody's view of the relationship between the issuers. Thus, a
downgrade on the rating of Puerto Rico's rating may trigger a
downgrade on the rating of Aerostar, particularly if we deem there
is a likelihood increase that the government could take any action
that might impact the project's revenue generation, profitability,
or ability to operate.
Given the negative outlook, Moody's do not expect upward pressure
on the rating. However, if Puerto Rico's outlook on the rating is
revised to stable, Aerostar's outlook may follow suit if Moody's
assess that the current rating already captures linkages described
above. A positive operating history of the non-aeronautical
revenues and a reversal of the currently negative growth rate of
enplanements could also lead to the stabilization of the outlook.
ALLIED SYSTEMS: Judge Won't Waste Time on 2013 Settlement
---------------------------------------------------------
Law360 reported that U.S. Bankruptcy Judge Christopher S. Sontchi
in Wilmington, Del., declined to consider a settlement between
Allied Systems Holdings Inc.'s unsecured creditors and private
equity owners The Yucaipa Cos. LLC, finding little point in going
forward with an agreement that was essentially dead on arrival.
According to the report, Judge Sontchi rejected a request by
Allied's independent directors to schedule a hearing on the year-
old settlement, designed to resolve a $57 million adversary suit
brought by the official committee of unsecured creditors against
the PE firm and the debtor's directors.
About Allied Systems Holdings, Inc.
BDCM Opportunity Fund II, LP, Spectrum Investment Partners LP, and
Black Diamond CLO 2005-1 Adviser L.L.C., filed involuntary
petitions for Allied Systems Holdings Inc. and Allied Systems Ltd.
(Bankr. D. Del. Case Nos. 12-11564 and 12-11565) on May 17, 2012.
The signatories of the involuntary petitions assert claims of at
least $52.8 million for loan defaults by the two companies.
Allied Systems, through its subsidiaries, provides logistics,
distribution, and transportation services for the automotive
industry in North America.
Allied Holdings Inc. first filed for chapter 11 protection (Bankr.
N.D. Ga. Case Nos. 05-12515 through 05-12537) on July 31, 2005.
Jeffrey W. Kelley, Esq., at Troutman Sanders, LLP, represented the
Debtors in the 2005 case. Allied won confirmation of a
reorganization plan and emerged from bankruptcy in May 2007
with $265 million in first-lien debt and $50 million in second-
lien debt.
The petitioning creditors said Allied defaulted on payments of
$57.4 million on the first lien debt and $9.6 million on the
second. They hold $47.9 million, or about 20% of the first-lien
debt, and about $5 million, or 17%, of the second-lien obligation.
They are represented by Adam G. Landis, Esq., and Kerri K.
Mumford, Esq., at Landis Rath & Cobb LLP; and Adam C. Harris,
Esq., and Robert J. Ward, Esq., at Schulte Roth & Zabel LLP.
Allied Systems Holdings Inc. formally put itself and 18
subsidiaries into bankruptcy reorganization June 10, 2012,
following the filing of the involuntary Chapter 11 petition.
The Company is being advised by Mark D. Collins, Esq., at
Richards, Layton & Finger, P.A., and Jeffrey W. Kelley, Esq., at
Troutman Sanders, Gowling Lafleur Henderson.
The bankruptcy court process does not include captive insurance
company Haul Insurance Limited or any of the Company's Mexican or
Bermudan subsidiaries. The Company also announced that it intends
to seek foreign recognition of its Chapter 11 cases in Canada.
An official committee of unsecured creditors has been appointed in
the case. The Committee consists of Pension Benefit Guaranty
Corporation, Central States Pension Fund, Teamsters National
Automobile Transporters Industry Negotiating Committee, and
General Motors LLC. The Committee is represented by Sidley Austin
LLP.
In January 2014, the U.S. Trustee for Region 3 appointed a three-
member Official Committee of Retirees.
Yucaipa Cos. has 55% of the senior debt and took the position it
had the right to control actions the indenture trustee would take
on behalf of debt holders. The state court ruled in March 2013
that the loan documents didn't allow Yucaipa to vote.
In March 2013, the bankruptcy court also gave the official
creditors' committee authority to sue Yucaipa. The suit includes
claims that the debt held by Yucaipa should be treated as equity
or subordinated so everyone else is paid before the Los Angeles-
based owner. The judge allowed Black Diamond to participate in the
lawsuit against Yucaipa and Allied directors.
AMERICAN INT'L: Got Billions Without Paperwork, Lawyer Says
-----------------------------------------------------------
Andrew Zajac, writing for Bloomberg News, reported that the lawyer
for the Federal Reserve Bank of New York said the bank poured
billions of dollars into rescuing American International Group
Inc. in September 2008 without drawing up documents that would
cement the government's control of the giant insurer.
In the trial over the government's bailout of AIG, the bank's
lawyer, Thomas Baxter, said AIG's dire condition required an
immediate infusion of cash, and paperwork memorializing the terms
of the loan wasn't complete.
As previously reported by The Troubled Company Reporter, citing
The Wall Street Journal, Maurice R. "Hank" Greenberg, who built
AIG 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 Journal, Mr. Greenberg asked
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.
The case is Starr International Co. v. U.S., 11-cv-00779, U.S.
Court of Federal Claims (Washington).
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 INT'L: Bernanke, Paulson, Geithner Grilled over Bailout
----------------------------------------------------------------
Leslie Scism, The Wall Street Journal, reported that three of the
architects of the U.S. government's response to the 2008 financial
crisis faced grilling in a trial over the bailout of American
International Group. According to the report, former Federal
Reserve Chairman Ben S. Bernanke, former U.S. Treasury Secretary
Henry Paulson and former Federal Reserve Bank of New York
President Timothy Geithner were questioned by prominent lawyer
David Boies as he pursues a lawsuit brought by former AIG Chief
Executive Maurice R. "Hank" Greenberg, who is challenging the
terms of the 2008 bailout for the company he built into a global
financial-services powerhouse before being pushed out in 2005.
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 SPECTRUM: Gets NYSE MKT Listing Non-Compliance Notice
--------------------------------------------------------------
American Spectrum Realty, Inc., on Oct. 8 disclosed that it had
received correspondence from NYSE MKT LLC notifying the Company
that it was not in compliance with certain of the Exchange's
continued listing standards. The Company has an unpaid balance of
$42,000 in listing fees, and has been given until Nov. 3, 2014 to
pay the fees in full before being subjected to delisting
proceedings. The Company expects to make the required payment
prior to the deadline.
About American Spectrum Realty, Inc.
American Spectrum Realty, Inc. -- http://www.asrmanagement.com--
is a real estate investment company that owns, through an
operating partnership, interests in office, industrial, retail,
self-storage, RV parks, retail, multi-family properties and
undeveloped land throughout the United States. American Spectrum
Management Group, Inc., a wholly-owned subsidiary of the Company,
manages and leases all properties owned by American Spectrum
Realty, Inc. as well as for third-party clients totaling 10
million square feet in multiple states.
AMSTERDAM HOUSE: Can Hire Herbert J. Sims as Investment Banker
--------------------------------------------------------------
The Hon. Alan S. Trust of the U.S. Bankruptcy Court for the
Eastern District of New York authorized Amsterdam House Continuing
Care Retirement Community Inc. dba The Amsterdam at Harborside to
employ Herbert J. Sims & Co. Inc. as its investment banker and
financial advisor in connection with the administration and
prosecution of the Debtor's Chapter 11 case.
The firm will:
a) prepare forecasts of expected financial results and the
sensitivity of those forecasts to changes in key assumptions;
b) outline necessary waivers, amendments, and changes to the
2007 bonds with holders of existing 2007 bonds;
c) present the financial forecasts and waivers and amendments to
the bondholders;
d) negotiate a mutually acceptable restructuring with the
bondholders; and
e) work with the Debtor, Debtor's counsel, and counsel to UMB
Bank, N.A., as successor trustee to the 2007 bonds to
consummate the restructuring of the 2007 bonds.
The Debtor will pay the firm in this manner:
a) a monthly fee of $25,000, due and payable in advance of each
month during the term of the engagement;
b) a completion fee in the amount of $85,000, payable promptly
upon consummation of the restructuring transaction; and
c) the Debtor shall reimburse the firm for all reasonable out-
of-pocket travel expenses arising in connection with the
engagement agreement, provided that the Debtor will not be
obligated to reimburse the firm for travel expenses in excess
of $2,500 in the aggregate during the term of the engagement.
The Debtor told the Court that the firm s has received payment on
account of its prepetition services in the amount of $425,000.
Andrew Nesi, executive vice-president of the firm, assured the
Court that the firm is a "disinterested person" as defined in
Section 101(14) of the Bankruptcy Code. Mr. Nesi added the firm
has:
a) no connections with the Debtor, creditors, other parties in
interest, or their respective attorneys and advisors; and
b) the the firm's executives and professionals who will work on
this matter are not relatives of the United States Trustee
for the Eastern District of New York, or any person employed
in the Office of the U.S. Trustee, or any United States
Bankruptcy Judge of the Eastern District of New York.
A full-text copy of the engagement agreement is available for free
at http://is.gd/3ThzAl
The firm can be reached at:
Andrew Nesi
Executive Vice-President
HERBERT J. SIMS & CO. INC.
2150 Post Rd #301
Fairfield, CT 06824
Tel: (203) 418-9057
Fax: (203) 256-2377
Email: anesi@hjsims.com
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.
AOXING PHARMACEUTICAL: To Sell 4.5 Million Shares to Employees
--------------------------------------------------------------
Aoxing Pharmaceutical Company, Inc., on Oct. 4, 2014, entered into
agreements to purchase AXN Shares with 22 of its employees. The
22 Agreements contemplate that the Company will sell to the
employees a total of 4,527,830 shares of common stock for a total
of $1,177,235 or $0.26 per share.
Included among the 22 employee-purchasers are the following
related parties:
Purchaser Relationship Shares
--------- ------------ ------
Guoan Zhang Acting CFO 356,473
Yujia Yue Niece of CEO 18,762
Yifa Yue Son of CEO 406,504
The remainder of the purchasers are also employees of the Company,
including several non-executive members of management.
The Company is currently not in compliance with the continued
listing standards of the NYSE MKT. The Exchange has granted the
Company extensions of time within which to regain compliance. One
condition of the extensions is that any issuance of additional
shares by the Company during the extension period must be pre-
approved by a management committee of the Exchange. The
Agreements to Purchase AXN Shares provide, therefore, that the
sales will not occur unless the approval of the Exchange has been
granted.
About Aoxing
Aoxing Pharmaceutical Company, Inc., is a Jersey City, New Jersey-
based specialty pharmaceutical company. The Company is engaged in
the development, production and distribution of pain-management
products, narcotics and other drug-relief medicine.
In their report on the consolidated financial statements for the
year ended June 30, 2014, BDO China Shu Lun Pan Certified Public
Accountants LLP expressed substantial doubt about the Company's
ability to continue as a going concern, citing that the Company
continues to incur losses from operations, has negative cash flow
from operations and a working capital deficit.
The Company reported a net loss of $8.63 million for the fiscal
year ended June 30, 2014, compared to a net loss of $17.29 million
last year. The Company's balance sheet at June 30, 2014, showed
$38.07 million in total assets, $42.08 million in total
liabilities and a stockholders' deficit of $4.01 million.
ASSOCIATED WHOLESALERS: Has Final Approval for $193-Mil. Package
----------------------------------------------------------------
Law360 reported that U.S. Bankruptcy Judge Kevin J. Carey in
Wilmington, Del., gave Associated Wholesalers Inc. and its debtor
affiliates final authority to obtain $193 million in debtor-in-
possession financing to fund the cooperative food distributor.
According to the report, Judge Carey gave final approval to the
credit package, turning aside opposition from ad hoc group of
trade creditors who contended the DIP budget improperly ignored
their 503(b)(9) claims. As previously reported by The Troubled
Company Reporter, reported that these trade creditors took issue
with AWI's DIP facility, claiming the credit package as structured
will give a "windfall" to lenders and shut out priority vendor
claims. An ad hoc committee of AWI trade vendors contends the
proposed DIP Facility order makes no allowance for their $3.5
million in 503(b)(9) claims and must be rejected if it does not
include payment of their similarly ranked claims.
Judge Carey, in approving the financing, agreed with the Debtors
which said the facility is crucial to keep the lights on while
they work toward a stalking horse sale later this month.
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 claims agent.
BANOS Y PISOS: Case Summary & 17 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Banos Y Pisos, Inc.
HC-05 Box 52335
Caguas, PR 00725-9204
Case No.: 14-08347
Chapter 11 Petition Date: October 8, 2014
Court: United States Bankruptcy Court
District of Puerto Rico (Old San Juan)
Judge: Hon. Mildred Caban Flores
Debtor's Counsel: Nilda M. Gonzalez Cordero, Esq.
GONZALEZ CORDERO LAW OFFICES
PO Box 3389
Guaynabo, PR 00970
Tel: 787-721-3437
Email: ngonzalezc@ngclawpr.com
Total Assets: $5.38 million
Total Liabilities: $729,066
The petition was signed by Alberto Camayd Freixas, president.
A list of the Debtor's 17 largest unsecured creditors is available
for free at http://bankrupt.com/misc/prb14-08347.pdf
BEST TOYS: Case Summary & 6 Largest Unsecured Creditors
-------------------------------------------------------
Debtor: Best Toys, Inc.
5100 Academy Drive, Unit 300
Lisle, IL 60532
Case No.: 14-36661
Chapter 11 Petition Date: October 8, 2014
Court: United States Bankruptcy Court
Northern District of Illinois (Chicago)
Judge: Hon. Janet S. Baer
Debtor's Counsel: John J Lynch, Esq.
LYNCH LAW OFFICES, P.C.
1011 Warrenville Road, Suite 150
Lisle, IL 60532
Tel: 630-960-4700
Fax: 630-960-4755
Email: jlynch@lynch4law.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Carle R. Wunderlich II, president.
A list of the Debtor's six largest unsecured creditors is
available for free at http://bankrupt.com/misc/ilnb14-36661.pdf
BMOC INVESTORS: Should Be Dropped From Bank Suit, Court Says
------------------------------------------------------------
Bankruptcy Judge Stephani W. Humrickhouse ruled on the motion to
abstain and remand filed by Wells Fargo Bank, N.A. in the
adversary proceeding captioned as, WELLS FARGO, N.A., Plaintiff,
v. BMOC INVESTORS, LLC and JAMES I. ANTHONY, JR., Defendants, Adv.
Proc. No. 14-00009-5-SWH-AP (Bankr. E.D.N.C.). Specifically, the
Court allowed Wells Fargo's motion to abstain and remand as it
applies to defendant James I. Anthony, Jr. This order is
conditioned on Wells Fargo dismissing the debtor, BMOC Investors,
LLC, from the action.
On February 28, 2014, Wells Fargo commenced a civil action in the
Superior Court Division of Alamance County, North Carolina, Case
No. 14 CVS 365, against debtor and Anthony. Wells Fargo sought
damages from the debtor for breaching certain promissory notes,
damages from Anthony pursuant to a guaranty he executed, and the
appointment of a receiver.
On June 4, 2009, the debtor executed a promissory note to Wells
Fargo. The note was subsequently modified by loan modification
agreements on November 30, 2010 and February 13, 2012. The note is
secured by a security interest in certain land, including certain
buildings on such land and all improvements, fixtures, personal
property, leases, licenses, occupancy agreements, rents, income,
revenue, profits, contracts and proceeds arising from such land.
As additional security, Anthony executed a guaranty in favor of
Wells Fargo. Under the note and the guaranty, the outstanding
principal balance on the note was required to be reduced to
$6,500,000 or less by December 13, 2013. This amount was neither
paid nor cured by the debtor or Anthony.
On March 14, 2014, the debtor filed for Chapter 11 bankruptcy.
On May 23, 2014, the Civil Action was removed to the Bankruptcy
court, and was docketed as Adversary Proceeding No. 14-00009-5-
SWH.
Wells Fargo requests that the court abstain from hearing the
removed Civil Action and remand it to state court. Wells Fargo
contends that mandatory abstention is required because it filed a
timely motion to abstain, the action is grounded in state law, the
action is not a core proceeding, the action could not have been
commenced in federal court absent jurisdiction under 28 U.S.C.
Sec. 1334, the action was pending when the bankruptcy was filed
and it can be timely adjudicated in state court. Alternatively,
Wells Fargo requests remand on equitable grounds under 28 U.S.C.
Sec. 1452(b).
The debtor requests that the court deny Wells Fargo's motion to
remand, contending that mandatory abstention is not required
because the action involves a core proceeding. The debtor claims
that equitable remand is likewise inappropriate because Wells
Fargo did not state whether it would dismiss its claims against
the debtor with prejudice, and because Anthony will have
continuing claims against the debtor for exoneration and/or
indemnification.
Anthony also requests that the court deny Wells Fargo's motion to
remand, first contending that mandatory abstention is not required
because this is a core proceeding. Anthony asserts that equitable
remand is inappropriate because separate litigation against him
would adversely affect administration of the bankruptcy estate.
A copy of the Court's Oct. 7 Order is available at
http://is.gd/a7pIL0from Leagle.com.
BMOC Investors, LLC, owner of Burlington Outlet Village in
Raleigh, North Carolina, filed for Chapter 11 bankruptcy (Bankr.
E.D.N.C. Case No. 14-01486) on March 14, 2014. Judge Stephani W.
Humrickhouse presides over the case. The Debtor is represented by
George M. Oliver, Esq., at Oliver Friesen Cheek, PLLC, as counsel.
In its petition, BMOC estimated $1 million to $10 million in both
assets and liabilities. The petition was signed by James I.
Anthony, Jr., member manager. A list of the Debtor's five largest
unsecured creditors is available for free at
http://bankrupt.com/misc/nceb14-1486.pdf
BRANDYWINE HEALTH: May Recoup $3,200 From Columbus Paper
--------------------------------------------------------
Bankruptcy Judge Jason D. Woodard in Mississippi ruled that Henry
J. Applewhite, Chapter 7 Trustee of Brandywine Health Services of
Mississippi, Inc., has established all of the elements necessary
to avoid the post-petition transfer under Sec. 549 of the
Bankruptcy Code, and pursuant to Sec. 550, is entitled to a
judgment against Columbus Paper & Chemical, Inc., in the amount of
$3,245.36. Judge Woodard said Columbus Paper received a post-
petition transfer of estate property after commencement of the
bankruptcy case. There was no court authorization for that
transfer.
A copy of Judge Woodard's Oct. 6 Order is available at
http://is.gd/fTxSuyfrom Leagle.com.
The case is, HENRY J. APPLEWHITE, TRUSTEE OF BRANDYWINE HEALTH
SERVICES OF MISSISSIPPI, INC., Plaintiff, v. COLUMBUS PAPER &
CHEMICAL, INC., Defendant, A.P. NO. 11-01220-JDW (Bankr. N.D.
Miss.).
Brandywine Health Services of Mississippi, Inc., dba Choctaw
County Medical Center, in Ackerman, Miss., filed for Chapter 11
bankruptcy (Bankr. N.D. Miss. Case No. 09-16528) on Dec. 14, 2009.
Judge David W. Houston III was assigned to the case. J. Walter
Newman, IV, Esq., serves as the Debtor's counsel. In its petition,
Brandywine estimated $1 million to $10 million in both assets and
liabilities. The petition was signed by Jeff A. Morse, owner of
the Company.
BLAKE ROUSSEL: Can't Appeal Atty Fee Remand, 8th Circuit Says
-------------------------------------------------------------
Law360 reported that the Eighth Circuit refused to hear a real
estate agent's appeal of a district court decision to saddle him,
in his bankruptcy proceeding, with the attorney fees from a
dispute with his business partner, finding it didn't have
jurisdiction because the remand wasn't a final order.
According to the report, Blake Roussel wanted the appellate court
to hear his case, contending he should be able to discharge the
$88,000 in attorney fees incurred when he was sued by his former
business partner, LuAnn Deere, in their business venture, Clear
Sky Properties LLC, but the three-judge panel found the district
court decision he was fighting wasn't a final order.
The case is Clear Sky Properties LLC et al. v. Blake Roussel, case
number 14-1150, in the U.S. Circuit Court for the Eighth Circuit.
BREITBURN ENERGY: Moody's Assigns B3 Rating on $400MM Sr. Notes
---------------------------------------------------------------
Moody's Investors Service assigned a B3 rating to Breitburn Energy
Partners LP's proposed $400 million senior notes due 2023. These
notes are co-issued by Breitburn Finance Corporation. Net proceeds
from this offering will be used to repay indebtedness outstanding
under its secured revolving credit facility and fund general
partnership purposes. Breitburn's other ratings and stable outlook
were unchanged.
"While this offering will provide some permanent financing for the
pending QR Energy acquisition, it also allows Breitburn to repay
almost all of its existing revolver debt and provides the
partnership with the dry powder to pursue its capital program and
grow production and reserves," said Amol Joshi, Moody's Vice
President.
Ratings Assigned:
$400 million senior notes due 2023, assigned B3 (LGD5)
Ratings Rationale
The new senior notes due 2023 are rated B3, the same as
Breitburn's existing notes given they will rank equally in right
of payment and have the same guarantor arrangement. These notes
are rated two notches below Breitburn's B1 Corporate Family Rating
(CFR) under Moody's Loss Given Default Methodology because of the
priority claim of its relatively large secured revolving credit
facility, which currently has a borrowing base of $1.6 billion
with $1.4 billion in commitments, and is expected to have a
borrowing base of $2.5 billion following the closing of the QR
Energy, LP (QRE) acquisition.
Breitburn's B1 CFR reflects its increased size on both a
production and reserves basis, improved diversification, and
higher liquids mix achieved through the QRE acquisition. The B1
CFR is restrained by Breitburn's already high leverage profile
following last year's acquisitions and the structural risks
inherent in the MLP business model which requires continuous cash
distributions and external funding requirements in order to fund
growth. Pro forma for the QRE acquisition, Breitburn's debt to
average daily production and debt to proved developed reserves
will be roughly $55 -- $60,000 per barrel of oil equivalent (boe)
and about $12.50 per boe, respectively, both quite high for a B1
CFR. Moody's expect the company will continue growing its
production and ensure its growth is funded in a balanced manner.
The issuance of roughly $250 million in net equity proceeds just
prior to this senior notes offering is in line with our
expectation that Breitburn will issue equity to maintain
reasonable availability under its revolving credit facility given
its weak leverage profile, which underpins the company's stable
outlook.
The principal methodology used in this rating was the 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.
Breitburn Energy Partners LP is a publicly traded independent oil
and gas master limited partnership focused on the acquisition,
development and production of oil and gas properties throughout
the United States. Breitburn's producing and non-producing crude
oil and natural gas reserves are located in Michigan, Oklahoma,
Texas, Wyoming, California, Florida, Indiana and Kentucky. In July
2014, Breitburn announced its acquisition of QR Energy, LP, a
publicly-traded upstream MLP headquartered in Houston, Texas.
CAESARS ENTERTAINMENT: Receives Notice of Default From Trustee
--------------------------------------------------------------
Caesars Entertainment Operating Company, Inc., a majority-owned
subsidiary of Caesars Entertainment Corporation, received a
purported Notice of Default and Reservation of Rights from
Wilmington Savings Fund Society, FSB, in its capacity as successor
Trustee for the 10.00% Second-Priority Senior Secured Notes due
2018 issued under the Indenture, dated April 15, 2009, by and
among CEOC, CEC and U.S. Bank National Association, according to a
regulatory filing with the U.S. Securities and Exchange
Commission.
CEOC is party to a Collateral Agreement dated as of Dec. 24, 2008,
by and among CEOC, the subsidiary parties party thereto and
Wilmington Savings Fund Society, FSB, as successor collateral
agent to U.S. Bank National Association. In its Current Report on
Form 8-K filed on Sept. 26, 2014, CEOC disclosed that at the
request of certain holders of CEOC's first priority senior secured
notes, the Pledgors granted Credit Suisse AG, Cayman Islands
Branch, as successor first lien 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 Notice alleges that to the extent the Claims constitute assets
or property of the Pledgors, the failure of the Pledgors to grant
a lien to the Second Lien Collateral Agent for the benefit of the
holder of the Notes constitutes a default under the Indenture and
the Second Lien Collateral Agreement. The Trustee demands that
Pledgors cure the alleged defaults by granting a perfected
security interest or perfected lien in favor of the Second Lien
Collateral Agent on the Claims, to the extent that those claims
are property of the Pledgors. The Notice claims that failure to
cure the alleged defaults within 60 days of the Notice will
constitute an event of default under the Indenture.
There is approximately $3.7 billion of Notes outstanding under the
Indenture. Under certain circumstances, the holders of at least
30% in principal amount of outstanding Notes may accelerate the
Notes upon an actual event of default under the Indenture and may,
after providing the Trustee reasonable security or indemnity
satisfactory to the Trustee against any loss, liability or
expense, cause the Trustee to pursue remedies.
If there were an actual event of default under the Indenture, it
would constitute an event of default under CEOC's senior secured
credit facilities. In addition, if CEOC's obligations with
respect to the Notes are accelerated, it could trigger events of
default under CEOC's other secured and unsecured notes. These
consequences could have a material adverse effect on CEC's and
CEOC's business, financial condition, results of operations and
prospects.
CEOC is in the process of reviewing the Notice and intends to take
required action, if any, within the 60 day period after delivery
of the Notice to the extent required to avoid any event of default
under the Indenture.
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'.
CHARLES KANE: Attys Ask High Court to Discharge $2-Mil. Debt
------------------------------------------------------------
Law360 reported that two bankrupt Florida attorneys facing a
$2 million state court judgment over an attorneys' fee dispute in
an insurance settlement have taken their plea to the U.S. Supreme
Court, arguing that lower courts have mistakenly said the debt is
nondischargeable because of their alleged willful and malicious
injury. According to the report, in a petition for writ of
certiorari filed Sept. 24, Charles and Harley Kane of Kane & Kane
PA said that their case gives the high court an opportunity to
resolve circuit splits on the issue involved in their case.
COASTLINE INVESTMENT: Oct. 28 Hearing on Diamond's Case Dismissal
-----------------------------------------------------------------
The Bankruptcy Court entered an order dismissing the Chapter 11
case of Coastline Investments LLC, effective as of Sept. 30, 2014.
At the hearing held Sept. 30, the Court determined to continue
until Oct. 28, at 10:00 a.m., the hearing to consider dismissal of
debtor Diamond Waterfalls, LLC's bankruptcy case. In the event
that Diamond's bankruptcy case is dismissed prior to Oct. 28, the
continued hearing on Oct. 28, will come off calendar as moot.
The order also provided that the Diamond will be responsible for
outstanding U.S. Trustee quarterly fees until the date of
dismissal of its case; and both Debtors are instructed to pay all
outstanding claims of creditors with the balance of the funds for
equity.
Peter C. Anderson, U.S. Trustee, in a limited opposition to the
Debtors' motion for disbursement of funds to creditors and
dismissal of the bankruptcy cases, said that he does not oppose
Diamond's proposed dismissal of its case. However, the U.S.
Trustee estimates that Diamond owes $20,000 for third quarter U.S.
Trustee fees. Moreover, fees for fourth quarter 2014 continue to
accrue.
As reported in the Troubled Company Reporter on Sept. 30, 2014,
the Debtors sought dismissal of their cases after the Court
authorized the sale of their properties and that transaction
closed. The Debtors owned the Hilltop Hotel and Diamond Hotel in
Pomona, California. At a hearing held on Aug. 7, the Court
authorized the sale of both hotels for the aggregate purchase
price of $19.5 million. On Aug. 29, 2014, the sale closed and all
secured claims and tax claim have been satisfied.
In view of this, Coastline's remaining claims total $157,490, and
Diamond's remaining claims total $88,273. The claims, however,
exclude the Debtors' counsel's attorneys' fees and costs, which
are estimated to be $100,000.
About Coastline and Diamond
Coastline Investments, doing business as Hilltop Suites Hotel, and
Diamond Waterfalls LLC, doing business as Diamond Bar Inn &
Suites, filed Chapter 11 bankruptcy petitions (Bankr. C.D. Cal.
Case No. 14-13028 and 14-13030) in Los Angeles on Feb. 18, 2014.
The cases are jointly administered under Lead Case No. 14-30328.
Coastline Investments is the owner of a hotel located at the top
of a prominent hill with sweeping views in Pamona, California.
The Hilltop Hotel consists of 130 suites located on three acres of
hilltop property by Interstates 10 and 57, Cal-Poly Tech
University, and the Los Angeles County fairgrounds, Fairplex. The
Hilltop Hotel has three hotel floors along with two levels of
parking and features and outdoor pool, spa, exercise fitness
center, sauna, steam room and a full service restaurant, lounge,
meeting spaces and a banquet ballroom to accommodate 300 guests.
Diamond is the owner of a 161-room hotel located in Pomona,
California. The Diamond Hotel is a full-service hotel, which
includes a business center, meeting facilities, pool, spa, fitness
center, steam, sauna and offices.
Debtor Coastline Investments disclosed $12,002,061 in asset and
$8,164,554 in liabilities as of the Chapter 11 filing.
The Debtors acquired both of the hotels through voluntary Chapter
11 bankruptcy court 11 U.S.C. Sec. 363 sales in February 2012.
The Hilltop Hotel was acquired from Shilo Inn, Pamona Hilltop, LLC
(Case No. 11-26270) and the Diamond Hotel was acquired from Shilo
Inn, Diamond Bar LLC (Case No. 10-60884).
The Debtors sought bankruptcy protection after the receiver
appointed for the hotels scheduled a trustee sale for both hotels.
The receiver was appointed at the behest of the investor group
which provided a secured loan of $2,500,000, which the Debtors
defaulted. The Debtors also have loans from First General Bank
each in the amount of $5,250,000.
Shin-Chung Liu is the 100% membership owner and managing member of
both of the Debtors. The Debtors' affairs are managed by Liberty
Capital Management Corporation.
Judge Richard M. Neiter has been assigned to the cases.
The Debtors are represented by David B. Golubchick, and J.P.
Fritz, Esq., at Levene, Neale, Bender, Yoo & Brill L.L.P., in Los
Angeles, California.
No committee of unsecured creditors was appointed in the case.
As reported by the Troubled Company Reporter on Sept. 9, 2014, the
Bankruptcy Court identified the $19.5 million bid of SCG America
Group or its assignees as the successful bidder for the purchase
of both hotels of the Debtors.
COMSTOCK MINING: Van Den Berg Stake at 25.3% as of Sept. 30
-----------------------------------------------------------
In an amended Schedule 13G filed with the U.S. Securities and
Exchange Commission, Van Den Berg Management I, Inc., disclosed
that as of Sept. 30, 2014, it beneficially owned 21,363,727 shares
of common stock of Comstock Mining Inc. representing 25.29 percent
of the shares outstanding. A copy of the regulatory filing is
available for free at http://is.gd/p2f5hI
About Comstock Mining
Virginia City, Nev.-based Comstock Mining Inc. is a Nevada-based,
gold and silver mining company with extensive, contiguous property
in the historic Comstock district. The Company began acquiring
properties in the Comstock in 2003. Since then, the Company has
consolidated a substantial portion of the Comstock district,
secured permits, built an infrastructure and brought the
exploration project into test mining production. The Company
continues acquiring additional properties in the Comstock
district, expanding its footprint and creating opportunities for
exploration and mining. The goal of the Company's strategic plan
is to deliver stockholder value by validating qualified resources
(measured and indicated) and reserves (probable and proven) of
3,250,000 gold equivalent ounces by 2013, and commencing
commercial mining and processing operations by 2011, with annual
production rates of 20,000 gold equivalent ounces.
Comstock Mining incurred a net loss available to common
shareholders of $25.36 million in 2013, a net loss available to
common shareholders of $35.13 million in 2012 and a net loss
available to common shareholders of $16.30 million in 2011.
As of June 30, 2014, the Company had $52.71 million in total
assets, $28.19 million in total liabilities and $24.52 million in
total stockholders' equity.
CROWN HOLDINGS: S&P Affirms 'BB' CCR & Rates Proposed Loans 'BB+'
-----------------------------------------------------------------
Standard & Poor's Ratings Services said it affirmed its ratings on
metal can producer Crown Holdings Inc., including the 'BB'
corporate credit rating. The outlook remains stable.
At the same time, S&P assigned its 'BB+' issue rating and '2'
recovery rating to subsidiary Crown Americas LLC's proposed $675
million senior secured term loan B due 2021 and its additional
$$75 million term loan A.
S&P also revised its recovery rating on the company's existing
senior secured credit facilities to '2' from '1'. The '2'
recovery rating indicates S&P's expectation of substantial (70% to
90%) recovery in the event of a payment default. These changes
reflect the increased facility size and limitations on guarantees
and collateral supporting direct borrowings by Crown Americas LLC.
A loan participation feature would equalize ultimate recovery
rates for all bank tranches notwithstanding better guarantor and
collateral terms for non-U.S. borrowings.
"We also raised our issue rating on Crown European Holdings S.A.'s
EUR650 million unsecured notes to 'BB' from 'BB-' and revised our
recovery rating on the notes to '3' from '5'. The '3' recovery
rating indicates our expectation of meaningful (50% to 70%)
recovery in the event of payment default. These changes reflect
more extensive guarantees supporting this debt, including
guarantees from certain subsidiaries related to EMPAQUE and Mivisa
Envases SAU (Mivisa)," S&P said.
S&P's 'BB' rating on Crown Holdings Inc. is based on its
assessments of a "satisfactory" business risk and "aggressive"
financial risk profile for the company. All modifiers are neutral
for the rating.
The stable outlook reflects S&P's expectation that Crown will
continue to benefit from relatively stable food and beverage end
markets, a consolidated industry structure with production and
pricing discipline, and good cost pass-through.
"We also expect continued growth in emerging markets and
successful integration of the Mivisa and EMPAQUE acquisitions,"
said Standard & Poor's credit analyst Liley Mehta. "As a result
of these factors, we believe Crown will continue to consistently
generate substantial discretionary cash and will prioritize the
cash flows to reduce debt such that the key credit ratios remain
in the appropriate range for the rating, including FFO to debt of
about 15%."
S&P could lower the rating if FFO to debt declines to below 12%,
either because of aggressive shareholder rewards or another
sizable debt-financed acquisition. S&P could also lower the
rating if the market deteriorates because of an exacerbated
decline in noncarbonated beverage consumption, if customers
substitute other packaging substrates for metal containers, or if
Crown loses key customers or contracts. S&P believes FFO to debt
of less than 12% could result from a decline in the EBITDA margin
of 300 basis points or more and if revenues decline 2% or more
from the level pro forma for the Mivisa and EMPAQUE acquisitions.
S&P is unlikely to raise the rating during the next year because
it believes that Crown's financial policies favor acquisition-
driven growth and shareholder rewards.
S&P could raise the rating if the company uses free cash to reduce
debt, in line with a supportive financial policy, such that debt
leverage improves to the low end of the "significant" range with
FFO to debt of 20% to 25% on a sustainable basis. This could
result from an increase in the EBITDA margin of 300 basis points
or more and a 5% or more revenue increase from the level pro forma
for the Mivisa and EMPAQUE acquisitions.
CRS HOLDINGS: Approved to Sell Blubox to 3S International
---------------------------------------------------------
The Bankruptcy Court authorized CRS Holding of America, et al., to
sell Blubox comprising of the BLUBOX machine located in the
Debtor's Elkridge, Maryland facility to 3S International, LLC.
As reported in the TCR on Oct. 8, 2014, the Blubox includes
without limitation, the compressor, shredder, screens and mixer,
and all operational manuals, spare parts and components and
warranty rights, and all other equipment and accessories relating
to such machine.
The Debtors and 3S International have already entered into a
purchase agreement. Among others, the economic term of the
agreement was that the purchaser will pay the Debtors $700,000 for
the Blubox. The sale will be closed within 2 business days
following the approval of the agreement by the Court.
The Debtors, in its business judgment, believe that the purchase
price is fair and adequate, particularly since the sale is not
subject to a financing contingency and has only minimal conditions
precedent to closing. Moreover, the Debtors believe that the
prompt sale will maximize the value of the estate's assets for the
benefit of creditors.
About CRS Holding of America
CRS Holding of America, LLC, operates a full service electronics
recycling business, providing e-waste recycling solutions for
organizations of all sizes. CRS's offerings are designed to meet
customers' demand for data security and environmental compliance.
CRS Holding and 21 subsidiaries sought Chapter 11 protection
(Bankr. M.D. Fla. Case No. 14-bk-10142) in Tampa, Florida, on
August 29, 2014.
CRS estimated total assets of $50 million to $100 million and debt
of $10 million to $50 million. The Debtors' outstanding loan
balances to secured creditors are: Regions Bank, $15 million; JY
Creative Holdings, Inc. $6.8 million; and Intersection, LLC,
$250,000. The Debtors estimate that general unsecured claims
total $5 million.
The cases are assigned to Judge K. Rodney May. The Debtors have
tapped Shumaker, Loop & Kendrick, LLP, as counsel.
CRS Holding of America, LLC, reported $812,470 in total assets,
and $37,560,321 in total liabilities.
CRS HOLDINGS: Oct. 16 Hearing on Bid for Relief from Stay
---------------------------------------------------------
The Bankruptcy Court will convene a preliminary hearing on
Oct. 16, 2014, at 2:00 p.m., to consider JY Creative Holdings,
Inc.'s motion for relief from stay in the Chapter 11 case of CRS
Holding of America, LLC.
On Sept. 23, JY Creative moved the Court for relief from the
automatic stay to permit it to pursue the 11th Circuit Appeal.
According to JY Creative, on July 30, U.S. District Court for the
Middle District of Florida entered an order granting the
receiver's motion for authorization to file bankruptcy. JY
Creative appealed the order authorizing bankruptcy filing to the
11th Circuit Court of Appeals and the appeal is pending. The 11th
Circuit Appeal is limited to the issue of whether or not the
receiver has the authority and standing to file bankruptcy on
behalf of the Debtors.
Seleena Miller of Magnum Management Services, LLC, serves as
receiver in the District Court Case.
About CRS Holding of America
CRS Holding of America, LLC, operates a full service electronics
recycling business, providing e-waste recycling solutions for
organizations of all sizes. CRS's offerings are designed to meet
customers' demand for data security and environmental compliance.
CRS Holding and 21 subsidiaries sought Chapter 11 protection
(Bankr. M.D. Fla. Case No. 14-bk-10142) in Tampa, Florida, on
August 29, 2014.
CRS estimated total assets of $50 million to $100 million and debt
of $10 million to $50 million. The Debtors' outstanding loan
balances to secured creditors are: Regions Bank, $15 million; JY
Creative Holdings, Inc. $6.8 million; and Intersection, LLC,
$250,000. The Debtors estimate that general unsecured claims
total $5 million.
The cases are assigned to Judge K. Rodney May. The Debtors have
tapped Shumaker, Loop & Kendrick, LLP, as counsel.
CRS Holding of America, LLC, reported $812,470 in total assets,
and $37,560,321 in total liabilities.
CRUMBS BAKE SHOP: Seeks Conversion to Ch. 7 Following Asset Sale
----------------------------------------------------------------
Law360 reported that Crumbs Bake Shop Inc. will convert its
bankruptcy from a restructuring to a liquidation in hopes that a
trustee will pursue leftover recovery litigation on the heels of a
$6.5 million asset sale, it told a New Jersey bankruptcy court.
Bill Rochelle and Sherri Toub, bankruptcy columnists for Bloomberg
News, reported that Crumbs said it doesn't have the money to
implement a Chapter 11 plan, and the remaining assets, including
potential lawsuits, will take a long time to liquidate. Creditors
will be best served if the case is converted to Chapter 7, in the
company's judgment, the Bloomberg report related.
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.
On Aug. 29, 2014, Crumbs Bake Shops completed the sale of its
assets for a credit bid of $7,140,000 and the assumption of
various liabilities. There are no cash proceeds and the credit
bid resulted in the repayment of all indebtedness to Lemonis
Fischer Acquisition, which held a first priority security interest
in the assets of the Company. The Company's remaining assets will
be liquidated and the proceeds thereof will be utilized to pay
unsecured liabilities in accordance with applicable law and
certain advisors' fees and expenses. The Company does not expect
that there will be any proceeds available for distribution to
shareholders.
DETROIT, MI: Orr Says Settlements Spared City Costly Litigation
---------------------------------------------------------------
Karen Pierog, writing for Reuters, reported that Detroit's
emergency manager, Kevyn Orr, testified in bankruptcy court that
without a series of settlements the city would face years of
costly litigation from creditors and others, with no guarantee
that the city would win.
According to Reuters, Mr. Orr also defended Detroit's 1,111-page
bankruptcy plan, saying it was crafted in good faith and provides
a framework and resources for the city's renaissance. In addition
to defending Detroit's bankruptcy emergency plan, Mr. Orr also
testified that an art museum would have been irreparably harmed if
the city had tried to sell art to get out of bankruptcy, Fox
Business News reported. Mr. Orr told the bankruptcy court that
selling art would have been perilous for the museum, which relies
on a three-county property tax and the goodwill of powerful
donors, Fox Business News related.
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: Moody's Places COP Ca Rating on Review for Downgrade
-----------------------------------------------------------------
Moody's Investors Service has placed the City of Detroit's (MI)
Certificates of Participation (COPs) Ca rating on review for
possible downgrade. This action follows the recent settlement
announcement between the city and Syncora, which insures a portion
of the city's outstanding COPs. The settlement includes a cash
payment, as well as extended and optional stakes in city owned
assets. In our opinion it is likely that the recovery for
creditors will be below 35% and as a result consistent with a C
rating. The review will be resolved if and when a settlement with
FGIC, the other main insurer of the city's COPs liabilities, is
made public.
Rating Methodology
The principal methodology used in this rating was The Fundamentals
of Credit Analysis for Lease-Backed Municipal Obligations
published in December 2011.
Regulatory Disclosures
For ratings issued on a program, series or category/class of debt,
this announcement provides certain regulatory disclosures in
relation to each rating of a subsequently issued bond or note of
the same series or category/class of debt or pursuant to a program
for which the ratings are derived exclusively from existing
ratings in accordance with Moody's rating practices. For ratings
issued on a support provider, this announcement provides certain
regulatory disclosures in relation to the rating action on the
support provider and in relation to each particular rating action
for securities that derive their credit ratings from the support
provider's credit rating. For provisional ratings, this
announcement provides certain regulatory disclosures in relation
to the provisional rating assigned, and in relation to a
definitive rating that may be assigned subsequent to the final
issuance of the debt, in each case where the transaction structure
and terms have not changed prior to the assignment of the
definitive rating in a manner that would have affected the rating.
EAM ENTERPRISES: Wash. Judge Confirms Exit Plan
-----------------------------------------------
Bankruptcy Judge Frederick P. Corbit confirmed Eam Enterprises
LLC's Plan of Reorganization, as amended, and granted final
approval of the explanatory Disclosure Statement, as amended. The
Plan and Disclosure Statement were filed on August 6, 2014 and
amended/supplemented by amendment filed September 15, 2014. The
Plan has been accepted in writing by the creditors and equity
security holders whose acceptance is required by law.
A copy of the Court's Oct. 1, 2014 Findings of Fact is available
at http://is.gd/UUAN23from Leagle.com.
EAM Enterprises, LLC, based in Ephrata, Wash., filed for Chapter
11 bankruptcy (Bankr. E.D. Wash. Case No. 14-01521) on April 23,
2014. EAM Enterprises is also known as Roadrunner RV Repair &
Supplies. The Debtor is represented by:
Dan O'Rourke, Esq.
SOUTHWELL & O'ROURKE
421 W Riverside Avenue, Suite 960
Spokane, WA 99201
Tel: 509-624-0159
Fax: 509-624-9231
E-mail: dorourke@southwellorourke.com
ECO BUILDING: Obtains $833,333 Funding From Dominion Affiliate
--------------------------------------------------------------
Eco Building Products, Inc., entered into a Securities Purchase
Agreement with Dominion Capital, LLC, pursuant to which the
Company issued to Dominion:
(1) a 10% Original Issue Discount Senior Secured Convertible
Promissory Note in the original principal amount of
$833,333 due Sept. 16, 2015; and
(2) a Common Stock Purchase Warrant for up to 400,000,000
shares of the Company's common stock.
This funding will be used exclusively to purchase lumber and
chemicals and is to be disbursed from an escrow account. On
Sept. 16, 2014, Dominion transferred and assigned the Note and the
Warrant to M2B Funding Corporation, an affiliate of Dominion.
10% Original Issue Discount Convertible Note
In accordance with the Agreement, the Company issued a 10%
Original Issue Discount Senior Secured Convertible Promissory Note
due Sept. 16, 2015, to M2B pursuant to which the Company borrowed
$833,333. The Note bears an interest of six percent (6%) per
annum on the face amount and is payable in full upon maturity.
Interest is payable in cash or shares of Common Stock at M2B's
option. The Note has a fixed conversion price of $0.01. The
Company will repay the Note in monthly installments, with the
final payment due on Oct. 16, 2015. The Company plans on using
the receivables from the sale of lumber and chemicals to comply
with the terms of the repayment schedule. In the event of
default, the Note is subject to an increase in the interest rate
to 24 percent per annum. Subject to certain ownership
limitations, upon issuance of the Note, M2B may elect, in its sole
discretion, to convert all or any portion of the outstanding
principal amount of the Note into shares of Common Stock at the
Conversion Price. M2B may not convert into or otherwise
beneficially own in excess of 4.99% of the number of shares of the
Common Stock issuance upon conversion of the Note held by M2B.
However, M2B, upon not less than 61 days' prior notice to the
Company, may increase or decrease the Beneficial Ownership
Limitation, provided that in no event does the Beneficial
Ownership Limitation exceed 9.99% of the number of shares of the
Common Stock outstanding immediately after giving effect to its
conversion.
Warrant
In accordance with the Agreement, the Company issued a Common
Stock Purchase Warrant, allowing M2B the right to purchase up to
400,000,000 shares of Common Stock at any time on or after
Sept. 16, 2014, and expiring on Sept. 16, 2019. The exercise
price per share of the Common Stock under this Warrant shall be
$0.001. The Warrant may be exercised in whole or in part at such
time by means of a cashless exercise. M2B may not convert into or
otherwise beneficially own in excess of 4.99% of the number of
shares of the Common Stock issuance upon exercise of the Warrant
held by M2B. However, M2B, upon not less than 61 days? prior
notice to the Company, may increase or decrease the Beneficial
Ownership Limitation, provided that in no event does the
Beneficial Ownership Limitation exceed 9.99% of the number of
shares of the Common Stock outstanding immediately after giving
effect to its conversion.
Lock-Up Agreement
The Company and M2B entered into a Lock-Up Agreement whereby M2B
agreed during the Lock-Up Period it will not (1) offer, pledge,
announce the intention to sell, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to
sell, grant any option, right or warrant to purchase, make any
short sale or otherwise transfer or dispose of, directly or
indirectly the Warrants or the Common Stock received upon exercise
of the Warrants (2) enter into any swap or other agreement that
transfers, in whole or in part, any of the economic consequences
of ownership of the Underlying Securities; (3) make any demand for
or exercise any right with respect to, the registration of any
Common Stock or any security convertible into or exercisable or
exchangeable for Common Stock; or (4) publicly disclose the
intention to do any of the foregoing. The Lock-Up Period
commences on Sept. 16, 2014, and expires on Sept. 16, 2015.
About Eco Building
Vista, Calif.-based Eco Building Products is a manufacturer of
proprietary wood products treated with an eco-friendly proprietary
chemistry that protects against mold, rot, decay, termites and
fire.
Eco Building incurred a net loss of $24.59 million on $5.22
million of total revenue for the year ended June 30, 2013, as
compared with a net loss of $11.17 million on $3.72 million of
total revenue during the prior year.
The Company's balance sheet at March 31, 2014, showed $2.71
million in total assets, $46.66 million in total liabilities and a
$43.95 million total stockholders' deficit.
Sam Kan & Company, in Alameda, California, 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 generated minimal operating revenues, losses
from operations, significant cash used in operating activities and
its viability is dependent upon its ability to obtain future
financing and successful operations. These factors raise
substantial doubt about the Company's ability to continue as a
going concern.
EDUCATION MANAGEMENT: Gets NASDAQ Listing Non-Compliance Notice
---------------------------------------------------------------
Education Management Corporation, one of the largest providers of
post-secondary education in North America, on Oct. 8 disclosed
that the company received a standard notice from NASDAQ stating
that the company is not in compliance with NASDAQ Listing Rule
5250(c)(1), which requires timely filing of reports with the U.S.
Securities and Exchange Commission. The Oct. 2, 2014 letter was
sent as a result of the company's delay in filing its Form 10-K
for the fiscal year ended June 30, 2014, which the company
announced on Sept. 16, 2014.
The NASDAQ notice has no immediate effect on the listing or
trading of the company's common stock on the NASDAQ Global Select
Market. Under the NASDAQ rules, the company has 60 days to submit
a plan to regain compliance. The company is resolving comments
raised by the Division of Corporation Finance of the Securities
and Exchange Commission and will file the Form 10-K upon
resolution of the comments. If necessary, the company will submit
a plan to NASDAQ in the event that it does not file its Form 10-K
prior to the expiration of the 60-day period.
As previously disclosed in the company's Form 8-K filed Oct. 2,
2014, the company's directors and management are exploring
voluntarily delisting the company's common stock from NASDAQ and
suspending its reporting obligations under the Securities Exchange
Act of 1934. The company's board of directors has not formally
approved the voluntary delisting.
About Education Management Corporation
With approximately 119,500 students as of April 2014, Education
Management Corporation -- http://www.edmc.edu-- is among the
largest providers of post-secondary education in North America,
based on student enrollment and revenue, with a total of 110
locations in 32 U.S. states and Canada. The company offers
academic programs to students through campus-based and online
instruction, or through a combination of both. The company is
committed to offering quality academic programs and strives to
improve the learning experience for its students. Its educational
institutions offer students the opportunity to earn undergraduate
and graduate degrees and certain specialized non-degree diplomas
in a broad range of disciplines, including media arts, health
sciences, design, psychology and behavioral sciences, culinary,
business, fashion, legal, education and information technology.
EMPRESAS BT: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Empresas BT, Inc.
HC-05 Box 52335
Caguas, PR 00725-9204
Case No.: 14-08349
Chapter 11 Petition Date: October 8, 2014
Court: United States Bankruptcy Court
District of Puerto Rico (Old San Juan)
Judge: Hon. Mildred Caban Flores
Debtor's Counsel: Nilda M. Gonzalez Cordero, Esq.
GONZALEZ CORDERO LAW OFFICES
PO Box 3389
Guaynabo, PR 00970
Tel: 787-721-3437
Email: ngonzalezc@ngclawpr.com
Total Assets: $784,607
Total Liabilities: $1.85 million
The petition was signed by Alberto Camayd Freixas, president.
A list of the Debtor's 20 largest unsecured creditors is available
for free at http://bankrupt.com/misc/prb14-08349.pdf
ENDEAVOUR INT'L: Enters Into Forbearance Agreements
---------------------------------------------------
Endeavour International Corporation on Oct. 8 disclosed that the
Company and certain of its subsidiaries have entered into
extensions of their forbearance agreements with holders of a
majority of its 12% First Priority Notes due 2018, 12% Second
Priority Notes due 2018 and 6.5% Convertible Senior Notes due
2016.
As previously announced by the Company, the Company did not make
the September 2, 2014 interest payments due on the Notes,
triggering a 30-day grace period that ended on October 1, 2014.
Because the interest payments were not made during the grace
period, an event of default occurred under each series of Notes.
Under the terms of the extended Forbearance Agreements, the
noteholders have agreed to forbear from exercising remedies
against the Company arising from such defaults for one additional
day, expiring at 11:59 p.m. on October 9, 2014.
The Company remains engaged in discussions with representatives of
certain holders of its various classes of indebtedness, including
the holders of Notes, regarding a debt restructuring plan that
would be effected by the Company pursuant to a chapter 11 filing.
No assurances can be given, however, that such discussions will
result in an agreement for a debt restructuring plan.
About Endeavour International
Houston-based Endeavour International Corporation (NYSE: END)
(LSE: ENDV) is an oil and gas exploration and production company
focused on the acquisition, exploration and development of energy
reserves in the North Sea and the United States.
Endeavour International reported net loss of $95.47 million in
2013, a net loss of $126.22 million in 2012 and a net loss of
$130.99 million in 2011.
As of June 30, 2014, the Company had $1.55 billion in total
assets, $1.55 billion in total liabilities, $43.70 million in
series c convertible preferred stock and a $41.48 million total
stockholders' deficit.
* * *
As reported by the TCR on Sept. 8, 2014, Moody's Investors Service
downgraded Endeavour International Corporation's Corporate Family
Rating (CFR) to Ca from Caa2. The downgrade follows Endeavour's
decision to not make interest payments on its $404 million 12%
First Priority Notes due March 2018, $150 million 12% Second
Priority Notes due June 2018, and $18 million 6.5% Convertible
Senior Notes due November 2017.
The TCR reported on Sept. 9, 2014, that Standard & Poor's Rating
Services lowered its corporate credit on Endeavour International
Corp. to 'D' from 'CCC'. The 'D' rating reflects missed interest
payments and S&P's expectation that payments will not be made on
the company's 12% first-priority notes due March 2018 and 12%
second-priority notes due June 2018.
ENERGY FUTURE: Oncor Bidders Don't Have to Be Disclosed
-------------------------------------------------------
Peg Brickley, writing for The Wall Street Journal, reported that
U.S. Bankruptcy Judge Christopher Sontchi in Wilmington, Del.,
ruled that Energy Future Holdings Corp. doesn't have to name names
of the contenders as it searches for a lead bidder to open an
auction for rights to its valuable Oncor stake. According to the
report, Judge Sontchi said the identity of bidders and bid details
are off the table, saying letting creditors know the identities of
the bidders would not be appropriate or value-maximizing.
As previously reported by The Troubled Company Reporter, citing
Bill Rochelle, a bankruptcy columnist for Bloomberg News,
CenterPoint Energy Inc., NextEra Energy Inc., Warren Buffett's
Berkshire Hathaway Inc. and Hunt Consolidated Inc. are among at
least 10 prospective buyers who signed confidentiality agreements
allowing them to examine nonpublic information about the Oncor
electric distribution business. First bids are due Oct. 23.
About Energy Future
Energy Future Holdings Corp., formerly known as TXU Corp., is a
privately held diversified energy holding company with a portfolio
of competitive and regulated energy businesses in Texas. Oncor,
an 80 percent-owned entity within the EFH group, is the largest
regulated transmission and distribution utility in Texas.
The Company delivers electricity to roughly three million delivery
points in and around Dallas-Fort Worth. EFH Corp. was created in
October 2007 in a $45 billion leverage buyout of Texas power
company TXU in a deal led by private-equity companies Kohlberg
Kravis Roberts & Co. and TPG Inc.
On April 29, 2014, Energy Future Holdings and 70 affiliated
companies sought Chapter 11 bankruptcy protection (Bankr. D. Del.
Lead Case No. 14-10979) after reaching a deal with some key
financial stakeholders to keep its businesses operating while
reducing its roughly $40 billion in debt.
The Debtors' cases have been assigned to Judge Christopher S.
Sontchi (CSS). The Debtors are seeking to have their cases
jointly administered for procedural purposes.
As of Dec. 31, 2013, EFH Corp. reported total assets of $36.4
billion in book value and total liabilities of $49.7 billion. The
Debtors have $42 billion of funded indebtedness.
EFH's legal advisor for the Chapter 11 proceedings is Kirkland &
Ellis LLP, its financial advisor is Evercore Partners and its
restructuring advisor is Alvarez & Marsal. The TCEH first lien
lenders supporting the restructuring agreement are represented by
Paul, Weiss, Rifkind, Wharton & Garrison, LLP as legal advisor,
and Millstein & Co., LLC, as financial advisor.
The EFIH unsecured creditors supporting the restructuring
agreement are represented by Akin Gump Strauss Hauer & Feld LLP,
as legal advisor, and Centerview Partners, as financial advisor.
The EFH equity holders supporting the restructuring agreement are
represented by Wachtell, Lipton, Rosen & Katz, as legal advisor,
and Blackstone Advisory Partners LP, as financial advisor. Epiq
Systems is the claims agent.
Wilmington Savings Fund Society, FSB, the successor trustee for
the second-lien noteholders owed about $1.6 billion, is
represented by Ashby & Geddes, P.A.'s William P. Bowden, Esq., and
Gregory A. Taylor, Esq., and Brown Rudnick LLP's Edward S.
Weisfelner, Esq., Jeffrey L. Jonas, Esq., Andrew P. Strehle, Esq.,
Jeremy B. Coffey, Esq., and Howard L. Siegel, Esq.
An Official Committee of Unsecured Creditors has been appointed in
the case. The Committee represents the interests of the unsecured
creditors of ONLY of Energy Future Competitive Holdings Company
LLC; EFCH's direct subsidiary, Texas Competitive Electric Holdings
Company LLC; and EFH Corporate Services Company, and of no other
debtors. The Committee has selected Morrison & Foerster LLP and
Polsinelli PC for representation in this high-profile energy
restructuring. The lawyers working on the case are James M. Peck,
Esq., Brett H. Miller, Esq., and Lorenzo Marinuzzi, Esq., at
Morrison & Foerster LLP; and Christopher A. Ward, Esq., Justin K.
Edelson, Esq., Shanti M. Katona, Esq., and Edward Fox, Esq., at
Polsinelli PC.
ENERGY FUTURE: Investors Say Fidelity Broke Deal to Sell in Notes
-----------------------------------------------------------------
Law360 reported that investment managers including Avenue Capital
Management II LP and GSO Capital Partners LP launched an adversary
suit alleging Fidelity Investments reneged on a prepetition deal
to sell $423 million of notes in bankrupt Energy Future Holdings
Corp. According to the report, Avenue Capital and four other
firms contend Fidelity granted them unconditional call rights on
the notes as part of the restructuring support agreement they
entered when EFH sought Chapter 11 protection, and the purchase
rights must be honored even though the energy giant subsequently
scrapped the RSA.
About Energy Future
Energy Future Holdings Corp., formerly known as TXU Corp., is a
privately held diversified energy holding company with a portfolio
of competitive and regulated energy businesses in Texas. Oncor,
an 80 percent-owned entity within the EFH group, is the largest
regulated transmission and distribution utility in Texas.
The Company delivers electricity to roughly three million delivery
points in and around Dallas-Fort Worth. EFH Corp. was created in
October 2007 in a $45 billion leverage buyout of Texas power
company TXU in a deal led by private-equity companies Kohlberg
Kravis Roberts & Co. and TPG Inc.
On April 29, 2014, Energy Future Holdings and 70 affiliated
companies sought Chapter 11 bankruptcy protection (Bankr. D. Del.
Lead Case No. 14-10979) after reaching a deal with some key
financial stakeholders to keep its businesses operating while
reducing its roughly $40 billion in debt.
The Debtors' cases have been assigned to Judge Christopher S.
Sontchi (CSS). The Debtors are seeking to have their cases
jointly administered for procedural purposes.
As of Dec. 31, 2013, EFH Corp. reported total assets of $36.4
billion in book value and total liabilities of $49.7 billion. The
Debtors have $42 billion of funded indebtedness.
EFH's legal advisor for the Chapter 11 proceedings is Kirkland &
Ellis LLP, its financial advisor is Evercore Partners and its
restructuring advisor is Alvarez & Marsal. The TCEH first lien
lenders supporting the restructuring agreement are represented by
Paul, Weiss, Rifkind, Wharton & Garrison, LLP as legal advisor,
and Millstein & Co., LLC, as financial advisor.
The EFIH unsecured creditors supporting the restructuring
agreement are represented by Akin Gump Strauss Hauer & Feld LLP,
as legal advisor, and Centerview Partners, as financial advisor.
The EFH equity holders supporting the restructuring agreement are
represented by Wachtell, Lipton, Rosen & Katz, as legal advisor,
and Blackstone Advisory Partners LP, as financial advisor. Epiq
Systems is the claims agent.
Wilmington Savings Fund Society, FSB, the successor trustee for
the second-lien noteholders owed about $1.6 billion, is
represented by Ashby & Geddes, P.A.'s William P. Bowden, Esq., and
Gregory A. Taylor, Esq., and Brown Rudnick LLP's Edward S.
Weisfelner, Esq., Jeffrey L. Jonas, Esq., Andrew P. Strehle, Esq.,
Jeremy B. Coffey, Esq., and Howard L. Siegel, Esq.
An Official Committee of Unsecured Creditors has been appointed in
the case. The Committee represents the interests of the unsecured
creditors of ONLY of Energy Future Competitive Holdings Company
LLC; EFCH's direct subsidiary, Texas Competitive Electric Holdings
Company LLC; and EFH Corporate Services Company, and of no other
debtors. The Committee has selected Morrison & Foerster LLP and
Polsinelli PC for representation in this high-profile energy
restructuring. The lawyers working on the case are James M. Peck,
Esq., Brett H. Miller, Esq., and Lorenzo Marinuzzi, Esq., at
Morrison & Foerster LLP; and Christopher A. Ward, Esq., Justin K.
Edelson, Esq., Shanti M. Katona, Esq., and Edward Fox, Esq., at
Polsinelli PC.
FIRST SECURITY: Written Pact With Federal Reserve Terminated
------------------------------------------------------------
The written agreement dated Sept. 7, 2010, by and between First
Security Group, Inc., and the Federal Reserve Bank of Atlanta had
been terminated effective Oct. 2, 2014, according to a regulatory
filing with the U.S. Securities and Exchange Commission.
Under the terms of the Written Agreement, the Company was required
to, among other things:
(i) serve as a source of strength to FSGBank, National
Association, its wholly owned subsidiary bank;
(ii) refrain from declaring or paying any dividend, or taking
dividends or other payments representing a reduction in
FSGBank's capital;
(iii) refrain from incurring, increasing or guaranteeing any
debt, directly or indirectly;
(iv) submit to the Federal Reserve a written plan to maintain
sufficient capital at the Company on a consolidated basis;
(v) comply with certain regulatory notice provisions pertaining
to the appointment of any new director or senior executive
officer, or the changing of responsibilities of any senior
executive officer; and
(vi) comply with certain regulatory restrictions on
indemnification and severance payments.
The Company was also required to submit certain reports to the
Federal Reserve with respect to the foregoing requirements.
While the Written Agreement has been terminated, the Company
expects that it will continue to seek approval from the Federal
Reserve prior to paying any dividends on its capital stock and
incurring any additional indebtedness.
About First Security Group
First Security Group, Inc. is a bank holding company headquartered
in Chattanooga, Tennessee, with $1.0 billion in assets. Founded
in 1999, First Security's community bank subsidiary, FSGBank, N.A.
has 26 full-service banking offices along the interstate corridors
of eastern and middle Tennessee and northern Georgia. FSGBank --
http://www.FSGBank.com/-- provides retail and commercial banking
services, trust and investment management, mortgage banking,
financial planning, internet banking.
First Security incurred a net loss of $13.44 million in 2013, a
net loss of $37.57 million in 2012 and a net loss of $23.06
million in 2011.
The Company's balance sheet at June 30, 2014, showed $1.01 billion
in total assets, $926.11 million in total liabilities and $86.56
million in total shareholders' equity.
FLUX POWER: Incurs $4.3 Million Net Loss in Fiscal 2014
-------------------------------------------------------
Flux Power Holdings, Inc., filed with the U.S. Securities and
Exchange Commission its annual report on Form 10-K disclosing
a net loss of $4.29 million on $358,000 of net revenue for the
year ended June 30, 2014, compared to net income of $351,000 on
$772,000 of net revenue for the year ended June 30, 2013.
As of June 30, 2014, the Company had $462,000 in total assets,
$1.24 million in total liabilities and a $784,000 total
stockholders' deficit.
Squar, Milner, Peterson, Miranda & Williamson, LLP, in
San Diego, California, 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
incurred a significant accumulated deficit through June 30, 2014,
and requires immediate additional financing to sustain its
operations. These factors, among others, raise substantial doubt
about the Company's ability to continue as a going concern.
A copy of the Form 10-K is available for free at:
http://is.gd/WmB5Dn
About Flux Power
Escondido, California-based Flux Power Holdings, Inc., designs,
develops and sells rechargeable advanced energy storage systems.
GENERAL CABLE: S&P Withdraws 'B+' Rating on $250MM Sr. Notes
------------------------------------------------------------
Standard & Poor's Ratings Services said it withdrew its 'B+' issue
rating on General Cable Corp.'s $250 million senior unsecured
notes due 2019 because the company withdrew this note offering on
Sept. 29, 2014. S&P also placed its 'BB-' corporate credit and
various issue-level ratings on General Cable on CreditWatch with
negative implications. The CreditWatch negative listing means S&P
could affirm or lower the ratings following its review.
S&P is placing its ratings on General Cable on CreditWatch with
negative implications as a result of the company's decision to
withdraw its $250 million senior unsecured note offering, which
may prompt S&P to revise its liquidity assessment to less than
adequate. Part of the proceeds from the $250 million note
offering were supposed to refinance a $125 million note that must
be addressed by Dec. 31, 2014. Without new financing, S&P expects
General Cable will use its ABL to repay the $125 million notes,
thereby reducing availability to borrow under the ABL such that
the company may no longer meet S&P's 1.2x threshold for liquid
sources over uses. The $125 million notes need to be refinanced
or repaid by Dec. 31, 2014, to avoid acceleration of the ABL's
maturity to that date. S&P do currently expect that General Cable
will be able to meet a two-pronged covenant test for using its ABL
to repay the $125 million note--those covenants being maintenance
of at least $100 million in excess ABL availability and a minimum
1.15x fixed charge coverage ratio pro forma for note repayment.
In resolving the CreditWatch listing, Standard & Poor's expects to
meet with management and assess the company's capital structure,
operating performance, and liquidity by Dec. 31, 2014.
"We could lower the corporate credit rating by at least one notch
if we deem liquidity to be less than adequate. This could occur
if the company uses the ABL to refinance the $125 million notes,
does not renew some of its foreign short-term lines of credit with
outstanding balances, or suffers weakening performance in the
fourth quarter of 2014," said Standard & Poor's credit analyst
Amanda Buckland. "These events could reduce the company's sources
of liquidity to less than 1.2x uses of liquidity, a level that we
consider less than adequate. We could affirm the ratings if the
company has adequate liquidity and adjusted debt leverage remains
less than 5x."
GENERAL CERAMICS: Insurers Defeat Buyer's Suit for Cleanup Costs
----------------------------------------------------------------
Law360 reported that a group of insurers has beat Haskell
Properties LLC's suit in New Jersey seeking cleanup costs based on
the alleged assignment of policies from the carriers' bankrupt
insured, with a judge ruling in an opinion that Haskell couldn't
show the transfer of that environmental coverage. According to
the report, tossing the claims with prejudice, Bergen County
Superior Court Judge Robert C. Wilson said that Haskell couldn't
demonstrate that the policies at issue were the property of
General Ceramics Inc.'s bankruptcy estate or that any such
assignments would be valid, among other findings. Great American
Insurance Co. of New York, American Insurance Co., Fireman's Fund
Insurance Co., and St. Paul Fire & Marine Insurance Co. had sought
the dismissal, the report related.
The case is Haskell Properties LLC v. The American Insurance Co.
et al, case number L-5396-13 in the Superior Court of New Jersey,
Bergen County.
General Ceramics Inc., a New Jersey-based subsidiary of Tokuyama
Corp., a Japanese chemical maker, filed for chapter 11 protection
in 1999. Tokuyama bought the U.S. electronics parts maker in
1989, but the unit has suffered from a drop in orders from the
U.S. defense industry.
GEOMET INC: CrossCap Management Stake at 9.1% as of Aug. 1
----------------------------------------------------------
In a Schedule 13G filed with the U.S. Securities and Exchange
Commission, CrossCap Management, Inc., and its affiliates
disclosed that as of Aug. 1, 2014, they beneficially owned
3,701,000 shares of common stock of GeoMet, Inc., representing 9.1
percent of the shares outstanding. A copy of the regulatory
filing is available for free at http://is.gd/PZOmW4
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.
GLOBAL COMPUTER: Seeks Court Approval on Employee Incentive Plan
----------------------------------------------------------------
Global Computer Enterprises Inc. asks the U.S. Bankruptcy Court
for the Eastern District of Virginia to approve its proposed
incentive plan and payment of employee obligations.
The Debtor says, with the input and guidance from its
professionals, it formulated the key personnel plan (KPP) to
incentivize the management employees to:
1) lead the process to sell the business and transition it to
its buyer; and
2) maximize the sale price and therefore allow for maximum
payment of allowed claims.
According to the Debtor, each person in the KPP is crucial to
realize these objectives. The experience, skill, and level of
institutional knowledge maintained by the employees make them
essential to maximizing the value of the estate.
The management employees include:
a) Michael Freeman:
Mr. Freeman has served as the Debtor's interim chief
operating officer since January 2014. After consulting with
the Debtor's chief executive officer and senior management,
Mr. Freeman initiated various cost-cutting initiatives to
address the Debtor's acute liquidity crisis. Mr. Freeman
was instrumental in retaining an investment banker to
explore options to maximize the value of the Debtor's
assets, initiated negotiations with the Government regarding
the potential purchase of the FMS, and, ultimately, served
as the Debtor's lead negotiator. Mr. Freeman, with input
from the Debtor's senior management, helped structure the
sale transaction in a way that enabled the Debtor to
continue its current services and provide for a smooth entry
into Chapter 11.
b) Matt France:
Mr. France is the Debtor's Chief Financial Officer and, in
that capacity, he manages the day to day finances of the
Debtor and has been critical in preserving the value of the
Debtor. In addition to his normal financial duties, Mr.
France was responsible for organizing due diligence
materials for the Debtor's sale process and participated in
meetings with potential buyers. Mr. France also provides
key input and assistance with the Department of Justice
(DOJ) Investigation for both inside and outside counsel.
c) Whitney Vickery:
During the Debtor's liquidity crisis, Ms. Vickery helped
the Debtor maintain revenue levels and improve its margins
during a period of high attrition by overseeing the
recruitment and hiring of critical staff and managers. In
addition, Ms. Vickery worked with Asgaard Capital, LLC, the
Debtor's investment banker, to generate the teaser and
confidential information memorandum that was circulated to
potential buyers, assisted with the development of a
potential buyer list, communicated with potential buyers to
generate interest in the Debtor's assets, gathered and
culled key documents that were uploaded into the Debtor's
data room, and designed the Debtor's management
presentation. Ms. Vickery also worked to provide the
successful delivery of the Debtor's intellectual property,
software licenses, hardware, and documentation to the
Government.
d) John McCarrick:
Mr. McCarrick has served as the Debtor's General Counsel
since April 7, 2014. When Mr. McCarrick arrived, the
Debtor's only other member of its legal team had resigned,
leaving Mr. McCarrick to respond to two DOJ subpoenas and
review over one million e-mails for privilege and
responsiveness with no support from its outside vendors.
Further, Mr. McCarrick devised a strategy to handle a number
of pending lawsuits in a manner that would not jeopardize
the sale process and effectuated an effective and candid
communication strategy with the Debtor's vendors.
Importantly, Mr. McCarrick worked with the Debtor's landlord
to suspend eviction proceedings and lower the Debtor's
monthly rent payments, both of which were critical to the
Debtor's ability to maintain the FMS.
e) Chris Cullerot:
Mr. Cullerot has provided technical forensic support to the
Debtor's legal teams throughout the DOJ Investigation and
assisted with e-mail and document productions to the
DOJ. Mr. Cullerot was responsible for providing critical
input for various cost build-ups, pricing models, and
presentations for the sale process. Mr. Cullerot was also
responsible for implementing a plan to transition the FMS to
the Government, including a network redesign and migration
of the Debtor's IP address, and worked with the Government
to satisfy delivery and acceptance of the sale assets
including, infrastructure, hardware, and source code.
The Debtor states, if the KPP were paid in full, the maximum
aggregate cost of the KPP would be $1,083,635, or 9% of Available
Proceeds. The KPP has two triggers based upon the objectives:
a) maximizing value in the sale of the Company, which equates
to approximately 60% of the total value of the KPP; and
b) payment of allowed claims, comprising approximately 40% of
the KPP value.
Sale of the Debtor
Each KPP participant will receive incentive payments within three
business days after the latter of the approval of KPP by the
Bankruptcy Court and receipt of payment from the purchaser of the
assets. The table summarizes the bonuses based on the first KPP
trigger, the Sale of the Debtor's assets:
Participant Role Bonus
----------- ---- -----
Michael Freeman Interim COO $390,108
Matt France CFO $113,782
Whitney Vickrey Chief Services Officer $97,527
John McCarrick General Counsel $32,509
Chris Cullerot Chief Security Officer $16,255
Total Bonus $650,181
Payment of Allowed Claims
In addition, the Debtor says it proposes to pay the portion of
the KPP for satisfaction of claims within three days after the
Bankruptcy Court's approval of the final distributions to
creditors under a liquidating plan.
% of Illustrative
Participant Available Proceeds Example Only
----------- ------------------ ------------
Freeman 2.2% $260,072
France 1.0% $119,200
McCarrick 0.5% $54,182
Total 3.6% $433,454
The Debtor says the estimated total cost of the KPP for all five
management employees is $1,083,635.
A hearing is set for Oct. 28, 2014, at 11:00 a.m., at Hon. Robert
G. Mayer's Courtroom, 200 South Washington Street, 2nd Floor,
Courtroom I in Alexandria, Virginia.
About Global Computers
Global Computer Enterprises, Inc., dba GCE, is a cloud-based
"software as a service" provider, commonly referred to as a
"SAAS," offering financial management solutions primarily to
executive departments of the federal government and independent
federal government agencies. GCE sought protection under Chapter
11 of the Bankruptcy Code (Case No. 14-13290, Bankr. E.D. Va.) on
Sept. 4, 2014. The case is assigned to Judge Robert G. Mayer.
The Debtor's counsel is David I. Swan, Esq., at McGuirewoods LLP,
in McLean, Virginia. The Debtor's financial advisor is Weinsweig
Advisors. The petition was signed by Mike Freeman, interim chief
operating officer.
Judge Mayer designated Mike Freeman to perform duties imposed upon
GCE by the Bankruptcy Code.
GOLF TOWN: DBRS Lowers Issuer Rating to 'B'
-------------------------------------------
DBRS Inc. has downgraded the Issuer Rating of Golf Town Canada
Inc. & Golfsmith International Holdings, Inc. (collectively
Golfsmith or the Company) to B from B (high) and the Senior
Secured Second Lien notes to CCC (high) from B (low), with a
recovery rating of RR-6. The trends have also been changed to
Negative from Stable. The downgrade reflects continued weakness
in the Company's sales and earnings, as well as material
uncertainty surrounding the Company's future earnings and
profitability, which remain well below DBRS expectations at the
time of their merger in 2012. The Negative trend reflects DBRS's
concerns over near-term liquidity, as well as the Company's
ability to return earnings and credit metrics to levels
considered acceptable for the current B Issuer Rating. The
ratings continue to reflect the discretionary and cyclical nature
of the golf retail business, intense competition, sensitivity to
weather and risks surrounding longer-term profitability and
growth. The ratings are supported by the Company's well-
established market position, differentiating full-service format,
geographic diversification across North America and sponsorship
from OMERS.
Following a difficult 2013, where EBITDA was below DBRS
expectations of $50 million, primarily due to poor weather
conditions in many regions of North America, the Company's
earnings declined further in H1 2014. This was the result of
harsh winter weather and another delayed start to the golf
season, lower prices due to intense competition and discounting
as a response to high industry-wide inventory levels, a lack of
new manufacturer product introductions, the declining foreign
exchange value of the Canadian dollar and post-merger integration
issues in Canada.
In July 2014, Golfsmith undertook a comprehensive business review
process in response to the mounting pressure on its operating
performance. The review process included identifying initiatives
to help reverse negative sales trends; reduce operating costs (in
central support and in other selling, general and administrative
(SG&A) considered condition-specific); optimize real estate
portfolio renewals, including possible store closures, as a
substantial portion (nearly one-third) of the Company's leased
real estate portfolio matures within three years; and an
immediate reduction in capex and efforts to manage liquidity in
the difficult operating environment.
Going forward, DBRS believes that a meaningful recovery in
Golfsmith's earnings profile will remain challenging, as the
Company is expected to continue to face intense competition and
declining golf participation rates. Golfsmith's earnings could
stabilize in the near term if weather conditions normalize
through the winter and spring of 2015 and benefit in the longer
term if industry rationalization allows Golfsmith to gain market
share. DBRS believes that revenues will continue to decline
modestly through the end of 2014, but should recover somewhat and
increase in the mid-single-digit range in 2015. The increase in
sales in 2015 is expected to be based on low-single-digit same-
store sales growth and mid-single-digit growth in the Company's
direct-to-consumer and APG businesses, combined with a modest
decline in store count. Adjusted EBITDA margins should remain
pressured in the near term due to the industry-wide inventory
position, but should rebound somewhat as inventory levels and
discounting normalize. EBITDA margins should also benefit from
the Company's continued implementation of its strategic
initiatives to drive sales and reduce costs. EBITDA should
therefore remain at current low levels through the end of 2014,
but should begin to improve over the medium term. EBITDA,
however, is expected to remain well below previous forecasts in
the $50 million range over the medium term.
Despite the recent strategic review and the resulting capital
conserving measures undertaken by Golfsmith, the Company's
ratings will remain under pressure until it displays sustainable
growth in operating income and cash flow, alleviating any
liquidity concerns. Cash flow from operations should recover
somewhat with improved operating performance in 2015. Working
capital and capex requirements are expected to decline at least
temporarily due to the Company's recent capital conserving
measures aimed at better controlling inventory positions and
putting on hold all new uncomitted store openings. Capex should
decline toward maintenance capex levels in 2015 as new store
openings are put on hold. The Company is expected to continue to
fund free cash flow deficits with borrowings on its ABL facility
in the near term, as well as potential financing from OMERS if
necessary. Over the longer term, DBRS expects any free cash flow
generated will be used to repay ABL revolver debt. This,
combined with any growth in earnings, could result in improved
credit metrics and may lead to the trend being changed to Stable
from Negative. However, should Golfsmith not be successful in
managing any near-term liquidity concerns, as well as improving
its credit risk profile in terms of same-store sales, operating
income and key credit metrics, a further negative rating action
could result.
GREAT NORTHERN: Creditors Get Ch. 7 Case Moved to Maine
-------------------------------------------------------
U.S. Bankruptcy Judge Mary F. Walrath in Wilmington, Del., agreed
to transfer the Chapter 7 case of Great Northern Paper Co. to its
home state of Maine, agreeing with creditors that many parties
with a stake in the bankruptcy proceeding are in Maine, various
news sources reported.
Law360 reported that Judge Walrath exclaimed at the hearing:
"There is, quite frankly, no substitute for being there in person
at the 341 [creditors meeting] and in court." Judge Walrath
added: "This is not the type of case where the debtor has a
nationwide presence and numerous centers of interest, where
leaving it in Delaware is simply one of a choice of many venues
that would be appropriate," the Law360 report related.
Bill Rochelle, a bankruptcy columnist for Bloomberg News, reports
that the creditors, joined by the Maine Attorney General, a union,
and 20 trade suppliers, wanted the case moved to Bangor, pointing
out that the plant's prior bankruptcy dating to 2002 remains
pending in Maine.
Headquartered in Millinocket, Maine, Great Northern Paper, Inc.,
one of the largest producers of groundwood specialty papers in
North America, filed for chapter 11 protection on January 9, 2003
(Bankr. Maine, Case No. 03-10048). Alex M. Rodolakis, Esq., and
Harold B. Murphy, Esq., at Hanify & King, P.C., represented the
Debtor. When the Company filed for chapter 11 protection, it
listed debts and assets of more than $100 million each. In early
2003, Belgravia purchased substantially all of the Debtor's assets
for approximately $75 million. The Maine Bankruptcy Court
converted the Debtor's case to a chapter 7 liquidation proceeding
on May 22, 2003. Gary M. Growe was the chapter 7 Trustee for the
Debtor's estate. Jeffrey T. Piampiano, Esq., at Drummond Woodsum
& MacMahon represented the chapter 7 Trustee.
GNP Maine Holdings LLC, dba Great Northern Paper Company, filed a
voluntary petition for Chapter 7 bankruptcy on Sept. 22 (Bankr. D.
Del. Case No. 14-12179) in Wilmington, Delaware. The next day,
three of Great Northern's trade creditors filed an involuntary
Chapter 7 petition (Bankr. D. Maine Case No. 14-10756).
GREAT PLAINS: 1st Source Rejects Plan; Others Submit Yes Votes
--------------------------------------------------------------
Great Plains Exploration, LLC, filed a Ballot Summary for the
Fifth Amended Plan of Reorganization Dated August 12, 2014.
1st Source Bank, the lone creditor in Class 3A, with a $485,731
claim, voted to reject the Plan.
SG Equipment Finance USA Corp., the lone creditor in Class 3C,
with a $135,000 claim, voted to accept the Plan. SGEF
conditionally accepted the Plan provided that any confirmation
order entered provides the following: SGEF shall have an allowed
claim of $135,821 to be paid over 18 consecutive monthly
installments of $7,738 representing principal and interest at the
rate of 3 percent per annum, and SGEF shall retain its lien until
such amounts are paid in full.
All five creditors in Class 5 who submitted ballots, with claims
ranging from $559 to $4,393, voted to accept the Plan.
1st Source Bank had filed a confirmation objection, saying that
the Plan is not fair and reasonable. It says the Plan provides
that the Debtors propose to pay 100% of allowed general unsecured
claims prior to paying the full amount of 1st Source's claim,
along with potentially unsecured claim.
In a limited objection, SGEF says the Plan, in its present form,
proposes that its Class 3 claim will be paid over 24 months in
equal monthly installments per the terms of the agreement in place
between Debtor and SGEF. According to SGEF, this does not reflect
the terms that were agreed upon between SGEF and Debtor subsequent
to the Plan, which terms are memorialized in various e-mails
between counsel for Debtor and SGEF. The Debtor's counsel advised
that it would not be filing an amended Plan, but that "We will
draft the correct language into the Confirmation Order to reflect
the exact agreement." Accordingly, SGEF's objection to
confirmation of the Plan is limited to the extent that the Plan
itself does not reflect the latest agreement between Debtor and
SGEF for SGEF's Class 3C claim, and requests that if, and when,
the Plan is confirmed that it include the agreement between SGEF
and Debtor as counsel for Debtor said it will.
SGEF is a secured creditor of Debtor as assignee of a Security
Agreement, dated April 30, 2008, and Promissory Note, dated
September 17, 2009, in the principal amount of $335,232, between
Debtor and Wells Fargo Equipment Finance, Inc.
SG Equipment Finance is represented by:
Erica L. Koehl, Esq.
Mark A. Lindsay, Esq.
Erica L. Koehl, Esq.
BABST | CALLAND
Two Gateway Center
Pittsburgh, PA 15222
Tel: (412) 394-6514
Fax: (412) 394-1054
E-mail: mlindsay@babstcalland.com
ekoehl@babstcalland.com
- and -
THE TSANG LAW FIRM, P.C.
Michael Tsang, Esq.
40 Wall Street, 26th Floor
New York, NY 10005
Tel: (212) 227-2246
Fax: (212) 227-2265
E-mail: mtsang@tsanglawfirm.com
About John D. Oil & Gas;
OZ Gas; and Great Plains Exploration
Mentor, Ohio-based John D. Oil & Gas Co., is in the business of
acquiring, exploring, developing, and producing oil and natural
gas in Northeast Ohio. The Company has 58 producing wells. The
Company also has one self storage facility located in Painesville,
Ohio. The self-storage facility is operated through a partnership
agreement between Liberty Self-Stor Ltd. and the Company.
John D. Oil's affiliated entities -- Oz Gas, LTD., and Great
Plains Exploration, LLC -- filed voluntary Chapter 11 petitions
(Bankr. W.D. Pa. Case Nos. 12-10057 and 12-10058) on Jan. 11,
2012. Two days later, John D. Oil filed its own Chapter 11
petition (Bankr. W.D. Pa. Case No. 12-10063).
On Nov. 21, 2011, at the request of the lender RBS Citizens, N.A.,
dba Charter One, a receiver was appointed for all three corporate
Debtors, in the United States District Court for the Northern
District of Ohio at case No. 11-cv-2089-CAB. District Judge
Christopher A. Boyko issued an order appointing Mark E. Dottore as
receiver. The Receivership Order was appealed to the Sixth
Circuit Court of Appeals on Dec. 19, 2011, and the appeal is
currently pending.
Judge Thomas P. Agresti oversees the Chapter 11 cases. Robert S.
Bernstein, Esq., at Bernstein Law Firm P.C., serves as counsel to
the Debtors. Each of Great Plains and Oz Gas estimated $10
million to $50 million in assets and debts. John D. Oil's balance
sheet at Dec. 31, 2011, showed $6.98 million in total assets,
$13.26 million in total liabilities, and a stockholders' deficit
of $6.28 million. The petitions were signed by Richard M.
Osborne, CEO.
The United States Trustee said a committee under 11 U.S.C. Sec.
1102 has not been appointed because no unsecured creditor
responded to the U.S. Trustee's communication for service on the
committee.
GREAT PLAINS: Ohio Says 5th Plan Excludes Priority Tax Claims
-------------------------------------------------------------
The State of Ohio, Department of Taxation, State of Ohio, Bureau
of Workers' Compensation and State of Ohio, Department of Job and
Family Services, by their attorney, Donn D. Rosenblum, Principal
Assistant Ohio Attorney General, submitted a limited objection to
Great Plains Exploration, LLC's Fifth Amended Chapter 11 Plan of
Reorganization Dated August 12, 2014.
According to Mr. Rosenblum, the basis for the objection is the
Plan appears to inadvertently omit a provision for the payment of
Priority Tax Claims, which renders the plan to be noncompliant
with 11 U.S.C. Sec. 1129(a)(9)(C).
Following the disallowance of the Fourth Amended Disclosure
Statement and Fourth Amended Plan, the Debtor and Ohio Agencies
worked together to resolve all of the objections lodged by the
State Agencies. While the Ohio Agencies' objection concerning the
definitions relating to Priority Tax Claims and Priority Claims
(terms defined in the Plan) has been resolved, the body of the
Plan does not expressly provide for the payment of Priority Tax
Claims.
The Ohio Agencies suggest that the Debtor insert language into the
Plan to provide for payment of Priority Tax Claims in full on the
Effective Date or language similar to the following:
"On the Effective Date, each holder of an Allowed Priority
Tax Claim shall be entitled to receive distributions in an amount
equal to the full amount of such Allowed Priority Tax Claim. At
the option of the Reorganized Debtor, such payment shall be made
by the Reorganized Debtor (a) in full, in Cash, on the Effective
Date, or (b) in accordance with section 1129(a)(9)(C) of the
Bankruptcy Code, in full, in Cash, in equal quarterly
installments, commencing on the first (1st) Business Day following
the Effective Date and ending on or before the fifth (5th)
anniversary of the commencement of the Chapter 11 Case, together
with interest accrued thereon at the rate as determined under
nonbankruptcy law, or (c) by mutual agreement of the holder of
such Allowed Priority Tax Claim and the Debtor or Reorganized
Debtor."
Insertion of language providing for the payment of Priority Tax
Claims set forth in the immediately preceding paragraph would
bring the Plan into compliance with 11 U.S.C. Sec. 1129(a)(9)(C),
Mr. Rosenblum tells the Court.
Mr. Rosenblum can be reached at:
Donn D. Rosenblum (OH 0016552)
Principal Assistant Attorney General
Collections Enforcement
150 East Gay Street, 21st Floor
Columbus, OH 43215
Tel: (614) 728-5754
Fax: (877) 591-5768
About John D. Oil & Gas;
OZ Gas; and Great Plains Exploration
Mentor, Ohio-based John D. Oil & Gas Co., is in the business of
acquiring, exploring, developing, and producing oil and natural
gas in Northeast Ohio. The Company has 58 producing wells. The
Company also has one self storage facility located in Painesville,
Ohio. The self-storage facility is operated through a partnership
agreement between Liberty Self-Stor Ltd. and the Company.
John D. Oil's affiliated entities -- Oz Gas, LTD., and Great
Plains Exploration, LLC -- filed voluntary Chapter 11 petitions
(Bankr. W.D. Pa. Case Nos. 12-10057 and 12-10058) on Jan. 11,
2012. Two days later, John D. Oil filed its own Chapter 11
petition (Bankr. W.D. Pa. Case No. 12-10063).
On Nov. 21, 2011, at the request of the lender RBS Citizens, N.A.,
dba Charter One, a receiver was appointed for all three corporate
Debtors, in the United States District Court for the Northern
District of Ohio at case No. 11-cv-2089-CAB. District Judge
Christopher A. Boyko issued an order appointing Mark E. Dottore as
receiver. The Receivership Order was appealed to the Sixth
Circuit Court of Appeals on Dec. 19, 2011, and the appeal is
currently pending.
Judge Thomas P. Agresti oversees the Chapter 11 cases. Robert S.
Bernstein, Esq., at Bernstein Law Firm P.C., serves as counsel to
the Debtors. Each of Great Plains and Oz Gas estimated $10
million to $50 million in assets and debts. John D. Oil's balance
sheet at Dec. 31, 2011, showed $6.98 million in total assets,
$13.26 million in total liabilities, and a stockholders' deficit
of $6.28 million. The petitions were signed by Richard M.
Osborne, CEO.
The United States Trustee said a committee under 11 U.S.C. Sec.
1102 has not been appointed because no unsecured creditor
responded to the U.S. Trustee's communication for service on the
committee.
GREAT PLAINS: RBS Awaiting Settlement Balance
---------------------------------------------
RBS Citizens, N.A. dba Charter One, filed a limited objection to
the confirmation of the Fifth Amended Plan of Reorganization with
respect to each of Great Plains Exploration, LLC and John D. Oil &
Gas Co.
RBS says in a Sept. 19 filing that the Plans incorporate the terms
of a Settlement Agreement between RBS and the Debtors (among
others), including payment by October 15, 2014 of the settlement
amount. The Settlement Agreement was approved by the U.S.
Bankruptcy Court for the Western District of Pennsylvania.
The Plans incorporate the terms of the Settlement Agreement and
Approval Orders, and provide that the Plans' effective date will
occur only if certain conditions are met, including that RBS will
have received the RBS Extended Settlement Amount on or before the
deadline.
Frederick D. Rapone, Jr., Esq., at Campbell & Levine, LLC, tells
the Court that it is unclear whether the Debtors will be able
deliver the $5,902,174 balance of the RBS Extended Settlement
Amount on or before the RBS Extended Settlement Deadline of
October 15, 2015. If they cannot do so, the conditions precedent
to the effective date of the Plans can never be met.
RBS says the Plans should not be confirmed unless Debtors
demonstrate to the Court that the Settlement Balance will be
received by RBS on or before October 15, 2014.
RBS is represented by:
Frederick D. Rapone, Jr.
CAMPBELL & LEVINE, LLC
310 Grant Street
1700 The Grant Building
Pittsburgh, PA 15219
Telephone: (412) 261-0310
Facsimile: (412) 261-5066
E-mail: fdr@camlev.com
- and -
Andrew C. Kassner, Esq.
Andrew J. Flame, Esq.
DRINKER BIDDLE & REATH LLP
One Logan Square, Suite 2000
Philadelphia, PA 19103-6996
Telephone: (215) 988-2700
Facsimile: (215) 988-2757
E-mail: Andrew.Kassner@dbr.com
Andrew.Flame@DBR.com
About John D. Oil & Gas;
OZ Gas; and Great Plains Exploration
Mentor, Ohio-based John D. Oil & Gas Co., is in the business of
acquiring, exploring, developing, and producing oil and natural
gas in Northeast Ohio. The Company has 58 producing wells. The
Company also has one self storage facility located in Painesville,
Ohio. The self-storage facility is operated through a partnership
agreement between Liberty Self-Stor Ltd. and the Company.
John D. Oil's affiliated entities -- Oz Gas, LTD., and Great
Plains Exploration, LLC -- filed voluntary Chapter 11 petitions
(Bankr. W.D. Pa. Case Nos. 12-10057 and 12-10058) on Jan. 11,
2012. Two days later, John D. Oil filed its own Chapter 11
petition (Bankr. W.D. Pa. Case No. 12-10063).
On Nov. 21, 2011, at the request of the lender RBS Citizens, N.A.,
dba Charter One, a receiver was appointed for all three corporate
Debtors, in the United States District Court for the Northern
District of Ohio at case No. 11-cv-2089-CAB. District Judge
Christopher A. Boyko issued an order appointing Mark E. Dottore as
receiver. The Receivership Order was appealed to the Sixth
Circuit Court of Appeals on Dec. 19, 2011, and the appeal is
currently pending.
Judge Thomas P. Agresti oversees the Chapter 11 cases. Robert S.
Bernstein, Esq., at Bernstein Law Firm P.C., serves as counsel to
the Debtors. Each of Great Plains and Oz Gas estimated $10
million to $50 million in assets and debts. John D. Oil's balance
sheet at Dec. 31, 2011, showed $6.98 million in total assets,
$13.26 million in total liabilities, and a stockholders' deficit
of $6.28 million. The petitions were signed by Richard M.
Osborne, CEO.
The United States Trustee said a committee under 11 U.S.C. Sec.
1102 has not been appointed because no unsecured creditor
responded to the U.S. Trustee's communication for service on the
committee.
GREAT PLAIN: Plan Confirmation Hearing Set for Nov. 13
------------------------------------------------------
The Hon. Thomas P. Agresti of the U.S. Bankruptcy Court for the
Western District of Pennsylvania continued the hearing of th
confirmation of the 5th amended Chapter 11 plan of reorganization
proposed by Great Plains Exploration and its debtor-affiliates to
Nov. 13, 2014 at 9:30 a.m. in the Erie Bankruptcy Courtroom, U. S.
Courthouse, 17 South Park Row Erie, PA 16501.
The hearing was originally set for Oct. 6, 2014.
As reported in the Troubled Company Reporter on Aug. 22, 2014,
according to the Amended Plan, it will incorporate the terms of
the Settlement Agreement with secured lender RBS Citizens N.A.,
and RBS Settlement orders. Any excess proceeds and additional
estate assets will fund the remainder of the payments under the
Plan. The source of the funds will come from the Debtor's
continued business operations post-confirmation. To the extent
there may be a shortfall, plan funding will be contributed by
Richard Osborne, Sr., from other sources, including liquidations
of real estate not liquidated to fund the RBS Settlement.
A copy of the Amended Disclosure Statement is available for free
at http://bankrupt.com/misc/OzGas_707_DS_5thamendedplan.pdf
About John D. Oil & Gas;
OZ Gas; and Great Plains Exploration
Mentor, Ohio-based John D. Oil & Gas Co., is in the business of
acquiring, exploring, developing, and producing oil and natural
gas in Northeast Ohio. The Company has 58 producing wells. The
Company also has one self storage facility located in Painesville,
Ohio. The self-storage facility is operated through a partnership
agreement between Liberty Self-Stor Ltd. and the Company.
John D. Oil's affiliated entities -- Oz Gas, LTD., and Great
Plains Exploration, LLC -- filed voluntary Chapter 11 petitions
(Bankr. W.D. Pa. Case Nos. 12-10057 and 12-10058) on Jan. 11,
2012. Two days later, John D. Oil filed its own Chapter 11
petition (Bankr. W.D. Pa. Case No. 12-10063).
On Nov. 21, 2011, at the request of the lender RBS Citizens, N.A.,
dba Charter One, a receiver was appointed for all three corporate
Debtors, in the United States District Court for the Northern
District of Ohio at case No. 11-cv-2089-CAB. District Judge
Christopher A. Boyko issued an order appointing Mark E. Dottore as
receiver. The Receivership Order was appealed to the Sixth
Circuit Court of Appeals on Dec. 19, 2011, and the appeal is
currently pending.
Judge Thomas P. Agresti oversees the Chapter 11 cases. Robert S.
Bernstein, Esq., at Bernstein Law Firm P.C., serves as counsel to
the Debtors. Each of Great Plains and Oz Gas estimated $10
million to $50 million in assets and debts. John D. Oil's balance
sheet at Dec. 31, 2011, showed $6.98 million in total assets,
$13.26 million in total liabilities, and a stockholders' deficit
of $6.28 million. The petitions were signed by Richard M.
Osborne, CEO.
The United States Trustee said a committee under 11 U.S.C. Sec.
1102 has not been appointed because no unsecured creditor
responded to the U.S. Trustee's communication for service on the
committee.
GT ADVANCED: Asks for Nov. 20 Extension of Schedules Deadline
-------------------------------------------------------------
GT Advanced Technologies Inc. and its affiliated debtors ask the
Bankruptcy Court to extend the deadline to file their schedules of
assets and liabilities and statements of financial affairs by 30
days, up to and including Nov. 20, 2014.
Due to the complexity and diversity of its operations, and the
burdens occasioned by preparing for the chapter 11 cases, GTAT
anticipates that it will be unable to complete its Schedules
within 14 days of the Petition Date. To prepare its Schedules,
GTAT must compile information from books, records, and documents
relating to a myriad of claims, assets, and contracts. This
information is voluminous and is located in numerous places
throughout GTAT's organization. Indeed, due to the difficulty of
this process, GTAT has engaged Alvarez and Marsal North
America, LLC to, among other things, provide a team of
professionals dedicated to the preparation of the Schedules.
Nevertheless, collection of the necessary information has and will
require an enormous expenditure of time and effort on the part of
GTAT and its employees.
About GT Advanced Technologies
GT Advanced Technologies Inc. -- http://www.gtat.com/-- is a
diversified technology company producing advanced materials and
innovative crystal growth equipment for the global consumer
electronics, power electronics, solar and LED industries.
Headquartered in Merrimack, New Hampshire, GT is a publicly held
corporation whose stock is traded on NASDAQ under the ticker
symbol "GTAT."
As of June 28, 2014, the GTAT Group's unaudited and consolidated
financial statements reflected assets totaling $1.5 billion and
liabilities totaling $1.3 billion. As of Sept. 29, 2014, GTAT had
$85 million in cash, $84 million of which is unencumbered.
On Oct. 6, 2014, GT Advanced Technologies and 8 affiliates filed
voluntary petitions for relief under Chapter 11 of the United
States Bankruptcy Code (Bankr. D. N.H. Lead Case No. 14-11916).
GT says that it has sought bankruptcy protection due to a "severe
liquidity crisis."
The Debtors have tapped Nixon Peabody LLP and Paul Hastings LLP as
attorneys and Kurtzman Carson Consultants LLC as claims and
noticing agent.
GT ADVANCED: Proposes to Set Claims Bar Dates
---------------------------------------------
GT Advanced Technologies Inc. and its affiliated debtors ask the
U.S. Bankruptcy Court for the District of New Hampshire to enter
an order establishing bar dates for filing proofs of claim.
GTAT requests that the Court establish 5:00 p.m. (E.T.) on the
date that is 45 days after the date on which GTAT files and serve
its Schedules of Assets and Liabilities as the deadline ("General
Bar Date") for each person or entity, with the exception of
governmental units and Apple Inc. and its affiliates, to file a
proof of claim with respect to any prepetition claim, as defined
in Section 101(5) of the Bankruptcy Code.
For reasons which GTAT has communicated to Apple and which GTAT
will explain to the Court at the hearing on the Motion, GTAT
requests that the Court establish 5:00 p.m. (E.T.) on the date
that is 45 days following the Petition Date as the deadline by
which Apple must file a Proof of Claim for any Claims Apple may
hold that arose on or prior to the Petition Date. The Proposed
Bar Date Order provides that the approval of this Motion will be
without prejudice to the right of Apple to file a motion seeking
an extension of the Apple Bar Date for cause, provided that any
such motion is filed within 14 days of the entry and approval of
the Proposed Bar Date Order.
Section 502(b)(9) of the Bankruptcy Code provides that the "claim
of a governmental unit shall be timely filed if it is filed before
180 days after the date of the order for relief or such later time
as the Federal Rules of Bankruptcy Procedure may provide. . . ."
11 U.S.C. Sec. 502(b)(9). GTAT proposes that the Court establish
April 6, 2015 at 5:00 p.m. (E.T.) as the deadline for all
governmental units to file a Proof of Claim in the chapter 11
cases on account of alleged Claims against GTAT.
In the event that GTAT amends its Schedules to (a) designate a
Claim as disputed, contingent, unliquidated, or undetermined, (b)
change the amount of a Claim reflected therein, (c) change the
classification of a Claim reflected therein, (d) add a Claim that
was not listed on the Schedules, or (e) remove a Claim that was
initially listed therein, GTAT will notify the applicable claimant
of such amendment. GTAT proposes that the deadline for any holder
of a Claim so designated, changed, added, or removed to file a
Proof of Claim on account of any such Claim will be the later of
(i) the General Bar Date or (ii) 5:00 p.m. (E.T.) on the date that
is 30 days after GTAT provides notice to the holder of the
amendment.
Certain entities may assert Claims in connection with GTAT's
rejection of executory contracts or unexpired leases pursuant to
section 365 of the Bankruptcy Code. GTAT proposes that any person
or entity that asserts a Rejection Damage Claim must file a Proof
of Claim based on such rejection by the later of (i) the General
Bar Date or (ii) 5:00 p.m. (E.T.) on the date that is 30 days
following the entry of the order approving the rejection of an
executory contract or unexpired lease pursuant to which the entity
asserting the Rejection Damage Claim is a party.
A Proof of Claim shall be deemed timely filed only if the Proof of
Claim is mailed or delivered by hand, courier, or overnight
service so as to be actually received by the Claims Agent on or
before the applicable Bar Date at the following address:
GTAT Claims Processing Center
c/o KCC
2335 Alaska Avenue
El Segundo, CA 90245
About GT Advanced Technologies
GT Advanced Technologies Inc. -- http://www.gtat.com/-- is a
diversified technology company producing advanced materials and
innovative crystal growth equipment for the global consumer
electronics, power electronics, solar and LED industries.
Headquartered in Merrimack, New Hampshire, GT is a publicly held
corporation whose stock is traded on NASDAQ under the ticker
symbol "GTAT."
As of June 28, 2014, the GTAT Group's unaudited and consolidated
financial statements reflected assets totaling $1.5 billion and
liabilities totaling $1.3 billion. As of Sept. 29, 2014, GTAT had
$85 million in cash, $84 million of which is unencumbered.
On Oct. 6, 2014, GT Advanced Technologies and 8 affiliates filed
voluntary petitions for relief under Chapter 11 of the United
States Bankruptcy Code (Bankr. D. N.H. Lead Case No. 14-11916).
GT says that it has sought bankruptcy protection due to a "severe
liquidity crisis."
The Debtors have tapped Nixon Peabody LLP and Paul Hastings LLP as
attorneys and Kurtzman Carson Consultants LLC as claims and
noticing agent.
GT ADVANCED: Wants to Keep Issues with Apple Secret
---------------------------------------------------
Patrick Fitzgerald, writing for The Wall Street Journal, reported
that GT Advanced Technologies has filed a motion asking the
bankruptcy court overseeing its Chapter 11 case that it wants to
keep its issues with Apple Inc. behind closed doors as there's a
risk it will have to pay $50 million damages "under certain
confidentiality agreements involving a third party, which
agreements themselves are required to be kept confidential."
Daisuke Wakabayashi and Joseph Checkler, writing for The Wall
Street Journal, reported that the abrupt bankruptcy filing of GT
Advanced stunned investors, creditors and partners, including
Apple. The Journal, citing a person familiar with the matter,
said Apple has been working with GT to keep it solvent and has not
demanded repayment of loans as it could have, based on GT's weak
cash position.
About GT Advanced Technologies
GT Advanced Technologies Inc. -- http://www.gtat.com/-- is a
diversified technology company producing advanced materials and
innovative crystal growth equipment for the global consumer
electronics, power electronics, solar and LED industries.
Headquartered in Merrimack, New Hampshire, GT is a publicly held
corporation whose stock is traded on NASDAQ under the ticker
symbol "GTAT."
As of June 28, 2014, the GTAT Group's unaudited and consolidated
financial statements reflected assets totaling $1.5 billion and
liabilities totaling $1.3 billion. As of Sept. 29, 2014, GTAT had
$85 million in cash, $84 million of which is unencumbered.
On Oct. 6, 2014, GT Advanced Technologies and 8 affiliates filed
voluntary petitions for relief under Chapter 11 of the United
States Bankruptcy Code (Bankr. D. N.H. Lead Case No. 14-11916).
GT says that it has sought bankruptcy protection due to a "severe
liquidity crisis."
The Debtors have tapped Nixon Peabody LLP and Paul Hastings LLP as
attorneys and Kurtzman Carson Consultants LLC as claims and
noticing agent.
HERCULES OFFSHORE: Director Suzanne Baer Won't Seek Re-Election
---------------------------------------------------------------
Suzanne V. Baer provided notice to Hercules Offshore, Inc., that
she would not stand for re-election as a director of the Company
at the 2015 annual meeting of stockholders, the Company disclosed
in a Form 8-K filed with the U.S. Securities and Exchange
Commission.
Ms. Baer has served on the Board of Directors of the Company since
2007. Her three-year term as a Class I Director of the Board
expires in 2015, and she will complete her term. Ms. Baer's
decision not to stand for re-election was not a result of any
disagreement with the Company on any matter relating to the
Company's operations, policies or practices.
About Hercules Offshore
Hercules Offshore Inc. (NASDAQ: HERO) --
http://www.herculesoffshore.com/-- provides shallow-water
drilling and marine services to the oil and natural gas
exploration and production industry in the United States, Gulf of
Mexico and internationally. The Company provides these services
to integrated energy companies, independent oil and natural gas
operators and national oil companies. The Company operates in six
business segments: Domestic Offshore, International Offshore,
Inland, Domestic Liftboats, International Liftboats and Delta
Towing.
Hercules incurred a net loss of $68.11 million in 2013, a net loss
of $127 million in 2012 and a net loss of $76.12 million in 2011.
* * *
The Troubled Company Reporter said on April 11, 2013, that
Moody's Investors Service upgraded Hercules Offshore, Inc.'s
Corporate Family Rating to B2 from B3. Hercules' B2 CFR is
supported by its improved cash flow and lower leverage on the back
of increased drilling activity and higher day-rates in the Gulf of
Mexico (GOM)
As reported by the TCR on Nov. 6, 2012, Standard & Poor's Ratings
Services raised its corporate credit rating on Houston-based
Hercules Offshore Inc. to 'B' from 'B-'. "The upgrade reflects
the improving market conditions in the Gulf of Mexico and our
expectations that Hercules' fleet will continue to benefit," said
Standard & Poor's credit analyst Stephen Scovotti.
HRK HOLDINGS: Withdraws Emergency Motion to Sell Property
---------------------------------------------------------
HRK Holdings, LLC and HRK Industries, LLC, have withdrawn their
emergency motion to sell their remaining real property.
The Court on Sept. 8 granted the emergency motion, which set an
auction for Oct. 2, a sale objection deadline for Oct. 3, and a
sale hearing for Oct. 6. The Debtors, however, sent a notice on
Oct. 2 that they are withdrawing the emergency motion.
On Sept. 30, before the Debtor withdrew the sale motion, Mayo
Fertilizer, Inc., in the business of selling dry bulk fertilizer,
filed a limited objection. Mayo said that the motion only made
mention of the Debtor's intent to sell "all or individual parcels"
of their remaining property thus it is unclear as to which
parcel(s) will be sold and what effect the closing documents from
those sales may have on Mayo's property rights.
Mayo recounts that on Nov. 14, 2013, the Court approved the sale
of a parcel of the Debtors' real property to Mayo. On Feb. 26,
2014, this Court entered an order approving the ancillary
agreements to that sale, including an Easement Agreement. The
Mayo Easement Agreement provides Mayo with, inter alia, an
easement over truck and rail scales and rail lying on the Debtors'
real property.
Allied Universal Corp., which is also a party to an easement
agreement with the Debtor, filed a joinder to Mayo's objection.
The Court on Nov. 14, 2013, approved the sale of a parcel of the
Debtors' real property to Allied. On Feb. 26, 2014, the Court
entered an order approving the ancillary agreements to that sale,
including an Easement Agreement.
Mayo Fertilizer is represented by:
John D. Emmanuel, Esq.
Frank S. Harrison, Esq.
BUCHANAN INGERSOLL & ROONEY P.C. | FOWLER WHITE BOGGS
P.O. Box 1438
Tampa, FL 33601
Tel: (813) 228-7411
Fax: (813) 229-8313
E-mail: john.emmanuel@bipc.com
frank.harrison@bipc.com
Allied is represented by:
John J. Lamoureux, Esq.
CARLTON FIELDS JORDEN BURT, P.A.
Post Office Box 3239
Tampa, Florida 33601-3239
Telephone: (813) 223-7000
Facsimile: (813) 229-4133
E-mail: jlamoureux@cfjblaw.com
About HRK Holdings
HRK Holdings and HRK Industries LLC filed for Chapter 11
protection (Bankr. M.D. Fla. Case Nos. 12-09868 and 12-09869) on
June 27, 2012. Judge K. Rodney May oversees the case. Barbara A.
Hart, Esq., and Scott A. Stichter, Esq., at Stichter, Riedel,
Blain & Prosser, P.A., represents the Debtors.
HRK Holdings disclosed $33,366,529 in assets and $26,092,559 in
liabilities in its revised schedules.
According to the Debtors, the bankruptcy filing was necessitated
by the immediate need to sell a portion of the remaining property
to create liquidity for (a) funding the urgent management of the
site-related environmental concerns; the benefit of creditors;
funding a litigation filed by the Debtors; and funding of expenses
related to additional sales of the remaining property.
HRK Holdings is selling real property assets to Allied Universal
Corp. and Mayo Fertilizer, Inc. The Court allowed HRK and the
purchasers to enter into any modifications to the agreements
without need of further Court approval, provided that no
amendments will occur without prior consent of Regions Bank.
INVESTORS GROUP: Dallas Judge Affirms Bankruptcy Case Dismissal
---------------------------------------------------------------
District Judge Sam A. Lindsay in Dallas, Texas, affirmed the
bankruptcy court's August 12, 2013 order dismissing the Chapter 11
proceedings of Investors Group, LLC. Judge Lindsday tossed
Investors Group's appeal from the Dismissal Order with prejudice.
Michael Pottorff and Monica Fabio are two minority equity
investors owning approximately 5% of the equity interests in
Investors Group. Investors Group, originally called WE Investors
Group ("WEIG"), was formed solely to invest in White Energy
Partners, LLC. WEP merged with its subsidiary, WE Inc. WE Inc.
went bankrupt and no longer exists.
Investors Group therefore has no ongoing business. Investors
Group, however, has $3 million from a previous settlement in a
trust account held by Investors Group's former counsel, K&L Gates.
The settlement agreement governing the distribution of the $3
million stipulated that the funds would not be released to
Investors Group until either (1) all of Investors Group's members
released their individual claims in the dispute, or (2) the fifth
anniversary of the settlement. Pottorff and Fabio declined to
release their claims and therefore the $3 million remains in the
trust account.
On January 28, 2011, Pottorff and Fabio filed a derivative suit on
behalf of Investors Group, alleging breaches of fiduciary duty,
usurpation of corporate opportunity, fraud, and a breach of
contract claim against White Ventures, LLC, an entity owned by
Investors Group's sole managing member. Approximately $5 million
is in controversy in the state law suit, which revolves around the
sale of White Ventures's stock that occurred before allowing
Investors Group to exercise its "tag-along" rights.
On May 9, 2013, Investors Group filed for bankruptcy. On June 26,
2013, Pottorff and Fabio moved to dismiss the bankruptcy petition
for bad faith, to which the Debtor responded.
On July 30, 2013, the bankruptcy court conducted a hearing on the
motion and, at the conclusion of the hearing, concluded that
Pottorff and Fabio's Motion to Dismiss should be granted.
Specifically, the bankruptcy court found that the Debtor filed in
bad faith, that is solvent, and that this is essentially a two-
party dispute that can be resolved by the state court. On August
12, 2013, the bankruptcy court issued its order, dismissing the
petition and ordering remand to state court.
The case is INVESTORS GROUP, LLC, Appellant, v. MICHAEL POTTORFF
AND MONICA FABIO, Appellees, CIVIL ACTION NO. 3:13-CV-4265-L (N.D.
Tex.). A copy of the Court's September 30, 2014 Memorandum
Opinion and Order is available at http://is.gd/LrDqdVfrom
Leagle.com.
Investors Group, LLC, fka WE Investors Group, LLC, based in
Addison, Texas, filed for Chapter 11 bankruptcy (Bankr. N.D. Tex.
Case No. 13-32488) on May 9, 2013, in Dallas. Bankruptcy Judge
Stacey G. Jernigan presides over the case. Jason Patrick Kathman,
Esq., and Gerrit M. Pronske, Esq., at Pronske & Patel, P.C., serve
as the Debtor's counsel. In its petition, Investors Group
estimated $1 million to $10 million in assets and liabilities.
The petition was signed by Roscoe F. White, III, manager.
JEFFERIES FINANCE: Moody's Affirms Ba3 Corporate Family Rating
--------------------------------------------------------------
Moody's Investors Service affirmed Jefferies Finance LLC's
("JFin") Ba3 corporate family rating and B1 senior unsecured bond
rating with a stable outlook.
Ratings Rationale
On October 6, 2014, JFin announced its plans to issue $400 million
of additional senior unsecured debt, the proceeds of which will be
used to provide additional liquidity to support the company's
expected increase in syndication volume as well as larger
individual syndications. In addition, the company will
simultaneously be drawing an additional $250 million of the $1.2
billion committed equity from its owners, Jefferies Group
(Jefferies) and Mass Mutual/Babson (Babson), leaving approximately
$230 million of undrawn equity remaining. Moody's expect the net
effect of the capital raise to decrease overall leverage and
improve JFin's capital position, with forecasted TCE/TMA to be
about 18.5%, up from 15.7% as of Q2 2014.
The rating affirmation is driven by JFin's franchise strength
based on its joint venture structure between Jefferies and Babson,
through which JFin sources all of its assets and its strong market
share in U.S. middle market leveraged lending. Also, JFin has
solid pro-forma $1.5 billion of unrestricted balance sheet cash
(adjusted for this most recent debt issuance, equity draw, and
unsettled loan syndications funded with company cash) supplemented
by disciplined approach to loan syndication. This should allow the
firm to continue to manage periodic spikes in syndication volumes.
However, Moody's note that JFin's market share gains have also
been coupled with material increase in the average size of
commitments which increases overall the liquidity risk in the
syndication pipeline. JFin is also increasing the size of its
retained loan portfolio, which is inherently risky as it contains
an average single-B corporate credit rating. Even though the
overall leveraged loan market continues to exhibit highly
competitive dynamics from both market volume growth and relaxation
of underwriting terms, Moody's expect JFin to maintain sound
underwriting standards as well as sustainable financial
performance throughout the cycle, given its increased risk
profile.
The B1 senior unsecured debt rating reflects its subordinated
position to the company's senior secured funding
The following factors could put upward pressure on the ratings:
(a) managing this larger loan syndication platform while
maintaining financial performance and without increasing risk, and
(b) maintaining strong liquidity and market risk management with
respect to the syndication commitment pipeline throughout the
cycle.
The following factors could put downward pressure on the ratings:
(a) severe liquidity stress or a significant increase in
outstanding commitments without a commensurate increase in
liquidity resources, i.e. if liquidity becomes less than half of
the company's outstanding syndication and revolver commitments,
and (b) financial performances deteriorates, i.e. sustained
decline in ROA below 3% or sustained decline in their
capitalization as measured by the company's tangible equity to
average managed assets below 15%.
JFin is a commercial finance company headquartered in New York.
The principal methodology used in this rating was Finance Company
Global Rating Methodology published in March 2012.
KANGADIS FOOD: Owners Want Out of Labeling Suit
-----------------------------------------------
Law360 reported that the owners of bankrupt Kangadis Food Inc.
urged a New York federal judge to nix a class action targeting
them personally for the company's alleged false labeling of its
olive oil as 100 percent pure, arguing the plaintiffs can't pierce
the corporate veil with their derivative claims. According to the
report, the owners -- Aristidis, Andromahi and Themis Kangadis,
along with Kangadis Family Management LLC -- said in their motion
for summary judgment that plaintiffs Joseph Ebin and Yeruchum
Jenkins must first establish liability against the company itself.
The case is Ebin et al v. Kangadis Family Management LLC et al.,
Case No. 1:14-cv-01324 (S.D.N.Y.).
About Kangadis Food
Formed in 2003, Kangadis Food Inc. is an importer of olives and
other European delicacies, and a leading distributor of olive oil.
The Debtor sells its products under the brand names "Capatriti,"
"Porto," "Olio Villa," "Zorba," and "Kivotos". The company is
100% owned by the Kangadis family. The company says that for the
past six years, the popularity of its olive oil product sold under
the brand name "Capatriti" has grown over time, and it is one of
the leading brands in the New York metropolitan area.
As of its bankruptcy filing, Kangadis Food employs 51 people, and
operates from a 75,000 square foot facility located in Hauppauge,
New York, that serves as a warehouse, production facility, and
shipping center.
Kangadis Food Inc. filed a Chapter 11 bankruptcy petition (Bankr.
E.D.N.Y. Case No. 8-14-72649) in the Central Islip division, in
New York, on June 6, 2014. Themistoklis Kangadis signed the
petition as chief executive officer.
As of the Dec. 31, 2013, the Debtor, on an unaudited basis, had
total assets of $12,259,802 and total liabilities of $6,136,456,
which amount does not include any disputed claim relating to the
class action.
Judge Robert E. Grossman presides over the case. Silverman
Acampora LLP, in Jericho, New York, serves as the Debtor's
counsel.
KEYWELL LLC: BofA May Apply Portion of Cash to Expenses
-------------------------------------------------------
The Hon. Eugene R. Wedoff of the U.S. Bankruptcy Court for the
Northern District of Illinois granted the request for relief from
stay filed by SGK Ventures LLC fka Keywell LLC, and by agreement
with Bank of America, N.A., as agent for certain lenders, and the
Official Committee of Unsecured Creditors, modifying the automatic
stay to permit the Agent to apply a portion of the letter of
credit cash collateral to accrued and accruing letter of credit
obligations and to apply a portion of the expense deposit cash
collateral to accrued and accruing agent expenses.
A full-text copy of the stay order is available for free at
http://is.gd/M6jOHs
A full-text copy of the motion for relief from stay is available
for free at http://is.gd/gkdO6F
About Keywell L.L.C.
Keywell L.L.C., a supplier of scrap titanium and stainless steel,
filed a Chapter 11 petition (Bankr. N.D. Ill. Case No. 13-37603)
on Sept. 24, 2013. Mark Lozier signed the petition as president
and CEO.
Keywell LLC first filed schedules disclosing $22,515,017 in total
assets, and $35,025,633 in total liabilities. In its amended
schedules, Keywell disclosed $22,546,386 in total assets and
$39,361,793 in total liabilities. As reported in the Troubled
Company Reporter on May 12, 2014, the Debtor filed an amended
summary of schedules disclosing assets of $22,602,974 and
liabilities of $37,181,354.
Judge Eugene R. Wedoff presides over the case.
Howard L. Adelman, Esq., Chad H. Gettleman, Esq., Henry B. Merens,
Esq., Brad A. Berish, Esq., Mark A. Carter, Esq., Adam P.
Silverman, Esq., and Nathan Q. Rugg, Esq., at Adelman & Gettleman
Ltd. serve as the Debtor's counsel. Alan B. Patzik, Esq., Steven
M. Prebish, Esq., and David J. Schwartz, Esq., at Patzik, Frank &
Samotny Ltd. serve as the Debtor's special counsel. Eureka
Capital Markets, LLC, serves as the Debtor's investment banker,
while Conway MacKenzie, Inc., serves as its financial advisors.
The Debtor's lenders are represented by Steven B. Towbin, Esq.,
and Gordon E. Gouveia, Esq., at Shaw Fishman Glantz & Towbin LLC,
in Chicago, Illinois.
The United States Trustee for Region 11 appointed an Official
Committee of Unsecured Creditors. The panel has hired David A.
Agay, Esq., Sean D. Malloy, Esq., Scott N. Opincar, Esq., Joshua
A. Gadharf, Esq., and T. Daniel Reynolds, Esq., at McDonald
Hopkins LLC as counsel. Alvarez & Marsal North America, LLC,
serves as financial advisors to the Committee.
In December 2013, the Bankruptcy Court formally approved the sale
of the Debtor's assets to KW Metals Acquisition LLC for $15.8
million. The original offer was from Cronimet Holdings Inc. for
$12.5 million cash.
Keywell LLC changed its name and case caption to "SGK Ventures,
LLC" following the sale.
KING CHAVEZ PUBLIC SCHOOL: S&P Alters Ratings Outlook to Negative
-----------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook to negative
from stable and affirmed its 'BB+' rating on the education
facilities revenue bonds issued by the California Municipal
Finance Authority on behalf of King-Chavez Public Schools,
formerly known as King Chavez Academies (the corporation), a
California nonprofit public benefit corporation.
"The negative outlook reflects our view that the corporation's
continued variability in liquidity levels and its use of short-
term borrowing against its per-pupil revenue is a credit weakness
that could continue to create volatility in operations and
coverage in fiscal 2014," said Standard & Poor's credit analyst
Debra Boyd. "While we recognize that the corporation has made
progress in reducing this reliance in fiscal 2014, we believe the
high financing costs associated with its debt will continue to
constrain future operations," added Ms. Boyd. "The negative
outlook also reflects the lease risk associated with the
corporation's property leases for five out of six of its schools,
as they are subject to annual renewal and rental increases. These
increases contributed to growth in the corporation's lease-
adjusted debt service."
The primary source of the lease payments is the corporation's per-
student revenues derived from the corporation's operations, which
include six public charter schools, all in San Diego:
-- King-Chavez Academy of Excellence (Academy of Excellence),
chartered in 2000-2001 and chartered through June 2016;
-- King-Chavez Primary Academy (Primary Academy), chartered in
2005-2006 and chartered through June 2015;
-- King-Chavez Arts Academy (Arts Academy), chartered in 2005-
2006 and chartered through June 2015;
-- King-Chavez Athletics Academy (Athletics Academy), chartered
in 2005-2006 and chartered through June 2015;
-- King-Chavez Preparatory Academy (Preparatory Academy),
chartered in 2006-2007; chartered through June 2016; and
-- King-Chavez Community High School (Community High School),
chartered in 2007-2008 and chartered through June 2019.
KRISTINA LAFERNE ROBERTS: Author Zane Filed for Bankruptcy
----------------------------------------------------------
DeNeen L. Brown, writing for The Washington Post, reported that
Kristina Laferene Roberts, more popularly known by her pen name,
Zane, has filed for bankruptcy in June, while a movie based on one
of her novels was in production. According to the report, Ms.
Roberts for for Chapter 7, listing total assets of more than $1.4
million and total liabilities of more than $3.4 million, including
$337,151 in back Maryland taxes.
L.L. MURPHREY: Appeals Court Green Lights Foreclosure
-----------------------------------------------------
The Court of Appeals of North Carolina tossed an appeal by Lois M.
Barrow, Larry Barrow, and Doris Murphrey from the Order Denying
Motion to Dismiss and Authorizing Foreclosure entered by Judge
Paul L. Jones on October 31, 2013.
The particular real estate security interest being foreclosed was
a North Carolina Deed of Trust entered into on April 23, 1996 by
Doris Murphrey, Lois M. Barrow, Larry Barrow, Connie M. Stocks,
Donald Stocks, and L.L. Murphrey Hog Co. (LLM), a North Carolina
corporation, in favor of Wachovia Bank, N.A., predecessor in
interest to D.A.N. Joint Venture Properties of North Carolina, LLM
(DAN). The deed of trust was recorded in the Greene County
Register of Deeds and the Lenoir County Register of Deeds and
amended over time by certain modification and extension
agreements. To secure the deed of trust, respondents pledged
certain items of real property as collateral. Wachovia also
received a security interest in LLM's fixtures and items of
personal property. The deed of trust secures an indebtedness
evidenced by five promissory notes (the Wachovia notes) executed
by LLM, the borrower, in favor of Wachovia between July 1993 and
March 1999.
LLM filed a voluntary petition for relief under Chapter 11 of the
Bankruptcy Code on June 8, 2000. At that time, LLM was in default
to Wachovia for $12,790,522.36 pursuant to the Wachovia notes. In
LLM's Chapter 11 case, the Bankruptcy Court entered an order
confirming LLM's fourth amended plan of reorganization. Pursuant
to class III of the Confirmed Plan, Wachovia's claims were divided
into Note A and Note B. Note A is an amortizing note in the amount
of $8,000,000; Note B is a cash flow note in the amount of
$3,500,000. Both Notes remained secured by the collateral pledged
to secure the Wachovia notes. Respondents, LLM's principals,
guaranteed Note A and Note B, which both listed a maturity date of
30 September 2011. Upon maturation, the Plan provided that Note A
and Note B would be recapitalized and that the obligations of the
guarantors would be limited to the amount of recapitalized debt.
Wachovia did not execute the Restated Loan Documents referenced in
the Confirmed Plan. Nonetheless, LLM made payments pursuant to the
terms of the Confirmed Plan from 1 October 2001 through 2011.
Post-confirmation, Wachovia sold the Wachovia notes to CadleRock
Joint Venture, L.P., who later sold or assigned the Wachovia notes
to DAN in 2008. DAN filed the necessary notices of assignment,
amendments, and continuation statements with the Greene County
Register of Deeds, the Lenoir County Register of Deeds, and the
North Carolina Secretary of State.
Upon maturity of Note A and Note B, LLM and DAN could not agree to
the amount of the recapitalized debt. Seeking a determination, LLM
reopened the Chapter 11 case and filed an adversary proceeding in
Bankruptcy Court. Bankruptcy Judge J. Rich Leonard in North
Carolina ruled that LLM's total indebtedness due and owing to DAN
was $6,186,362.00. Neither party appealed this judgment.
Thereafter, LLM filed a voluntary petition for relief under
Chapter 7 of the Bankruptcy Code on May 21, 2012. After LLM's
Chapter 7 filing, DAN filed a proof of claim in the amount of
$6,056,645.
In January and February 2013, LLC's bankruptcy trustee filed
motions requesting approval to conduct a proposed public sale of
LLM's real and personal property free and clear of liens. The
trustee submitted a draft of a proposed complaint that he
anticipated filing in an adversary proceeding against DAN. The
complaint alleged that the Wachovia notes and the deed of trust
were avoidable pursuant to 11 U.S.C. Sec. 5444(a)(3) (2013).
The real property that was the subject of the proposed public sale
included five tracts of land in Greene County and one tract of
land in Lenoir County. As DAN asserted liens on all but one of the
tracts of real property, it filed an objection to the trustee's
motion to sell free and clear of liens. DAN asserted that pursuant
to 11 U.S.C. Sec. 363(f)(4), its interest was not subject to a
factual or legal dispute because LLM: (1) did not file any
objection to DAN's proof of claim, and (2) because LLM's
indebtedness was reaffirmed in the bankruptcy court adversary
proceeding.
On June 6, 2013, Judge Leonard entered an order in the Chapter 7
case. The Leonard order reviewed the terms of the Confirmed Plan,
particularly the portions that purported to require Wachovia to
execute Restated Loan Documents to reaffirm the loan. Judge
Leonard determined the terms of the Confirmed Plan were
"unambiguous and impose[d] an obligation on the parties, the
debtor and Wachovia, to execute amended and restated agreements,
instruments and other loan documents consistent with the treatment
provided therein."
Judge Leonard further concluded, "[i]n addition to being
explicitly required, the execution and delivery of the amended and
restated loan documents was a condition precedent for setting the
implementation date for Note A and Note B as October 1, 2001."
Further, Judge Leonard held that in the absence of the Restated
Loan Documents, the description of Note A and Note B and the
recitation of the terms were insufficient to constitute negotiable
instruments.
Accordingly, Judge Leonard found that the trustee established the
existence of a "bona fide dispute" regarding the validity of DAN's
liens. Judge Leonard authorized the trustee to sell the real
property free and clear of the liens asserted by DAN. Notably, the
Leonard order did not terminate DAN's rights to foreclose on the
deed of trust?it merely recognized the existence of a bona fide
dispute between the parties and authorized the trustee to proceed
with the sale of the requisite property.
DAN filed a Notice of Hearing for Foreclosure of Deed of Trust on
September 4, 2013. Based on the Leonard order, LLM filed a motion
to dismiss DAN's foreclosure action on October 2, 2013.
On October 31, 2013, the matter came on for hearing before Judge
Paul L. Jones in Greene County Superior Court. Judge Jones entered
an order denying LLM's motion to dismiss. He also authorized the
Substitute Trustee for DAN to proceed with the foreclosure of the
subject property pursuant to the power of sale granted to him
under the deed of trust.
The Respondents appealed.
"In reviewing the record in its entirety, we hold that DAN
presented competent evidence of: (i) a valid debt of which the
party seeking to foreclose is the holder, (ii) default, (iii)
right to foreclose under the instrument, and (iv) notice to those
entitled as required under N.C. Gen. Stat. [Sec.] 45-21.16(d).
Accordingly, we affirm the trial court's order," the Appeals Court
said in its Oct. 7 decision available at http://is.gd/I6PfTDfrom
Leagle.com.
About L.L. Murphrey
L.L. Murphrey Company was North Carolina corporation engaged in
the swine business, with its principal place of business in Greene
County, North Carolina. LLM filed for chapter 11 bankruptcy
(Bankr. E.D.N.C. Case No. 00-03213) on June 8, 2000. On July 13,
2001, the Court entered an order confirming the Debtor's fourth
amended plan of reorganization. On May 21, 2012, it filed a
voluntary Chapter 7 petition (Bankr. E.D.N.C. Case No. 12-03837).
LEHMAN BROTHERS: Trustee, Barclays Spawn a New $1.2-Bil. Dispute
----------------------------------------------------------------
Bill Rochelle and Sherri Toub, bankruptcy columnists for Bloomberg
News, reported that James W. Giddens, the trustee for the
brokerage unit of Lehman Brothers Holdings Inc., said in papers
filed in court that there is a disagreement over the meaning of
the recent decision of the U.S. Court of Appeals in Manhattan.
As previously reported by The Troubled Company Reporter, citing
Law360, the Second Circuit declined to rehear Mr. Giddens' bid to
reclaim $4 billion in trading collateral that was picked up by
Barclays PLC after the collapse of the brokerage's parent company.
The Second Circuit panel upheld a lower court's interpretation of
the complicated contracts surroundings Barclay's 2008 deal for LBI
denied trustee James Gidden's request for rehearing, and the full
court denied his petition for an en banc rehearing.
According to Mr. Giddens, Barclays interprets the decisions by the
federal district court and the appeals court to mean that it's
entitled to an additional $620 million in cash that didn't secure
derivatives Barclays took when it bought Lehman's North American
investment banking business. Barclays is claiming another $605
million related to derivatives that weren't part of the sale, Mr.
Giddens said, the Bloomberg report related.
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)
LEVEL 3 COMMUNICATIONS: S&P Affirms 'BB' Secured Debt Rating
------------------------------------------------------------
Standard & Poor's Ratings Services said that it revised its
recovery rating on Broomfield, Colo.-based Level 3 Communications
Inc.'s secured debt to '2' from '1', and affirmed the 'BB' issue-
level rating on the debt and removed it from CreditWatch with
positive implications, where S&P placed it on June 16, 2014.
At the same time, S&P assigned its 'BB' issue-level and '2'
recovery ratings to Level 3 Financing Inc.'s $1.5 billion senior
secured tranche B 2022 term loan. The '2' recovery rating
indicates S&P's expectation for substantial recovery (70%-90%; at
the upper half of the range) for the secured lenders in the event
of a payment default.
After the company receives certain state regulatory approval,
which S&P expects to occur over the next few months, the new $1.5
billion term loan tranche will share the same collateral as the
other term loans in the credit agreement.
The 'B+' corporate credit rating on Level 3 and the 'B-' issue-
level rating on its unsecured debt remain on CreditWatch positive.
The affirmation reflects the secured debt's weaker recovery
prospects as a result of the additional $1.5 billion secured debt
issuance to partly fund the pending $7.3 billion acquisition of TW
Telecom. In July 2014, Level 3 issued $1 billion of unsecured
notes to partly fund the $3 billion of debt needed to fund the
$3.6 billion cash consideration for the acquisition (the balance
will be from cash). To address the $2 billion funding gap, on
Oct. 6, Level 3 Financing began marketing a $1.5 billion senior
secured tranche B 2022 term loan--a new tranche under its current
credit facility. The revised recovery rating is based on the
increase in secured debt and indicates S&P's expectation for
weaker recovery prospects for the secured lenders in the event of
a default.
"The affirmation also reflects our expectation for a one-notch
upgrade of the corporate credit rating, offset by weaker recovery
prospects," said Standard & Poor's credit analyst Richard
Siderman. Level 3 intends to raise an additional $500 million of
debt, but S&P don't expect the additional debt, whether secured or
unsecured, to affect the secured debt or the ratings. However, if
the incremental $500 million of debt is secured, the recovery
prospects on the secured debt will be in the lower half of the
70%-90% range. S&P will publish a recovery report when the
company completes the remaining financing for the transaction.
The corporate credit rating and unsecured debt rating on Level 3
remain on CreditWatch positive due to the pending acquisition of
TW Telecom. S&P expects to raise the ratings by one notch when
the transaction closes because TW Telecom's metropolitan fiber
network assets will complement Level 3's long-haul capabilities
and deepen the combined company's reach into local domestic
markets. TW Telecom will also modestly boost the portion of
revenues Level 3's more stable enterprise core network services
segment generates.
"We expect to raise the corporate credit rating on Level 3 to 'BB-
' from 'B+' and the issue-level rating on the company's unsecured
debt to 'B' from 'B-' when the TW Telecom acquisition closes,"
said Mr. Siderman. Although the transaction will have only a
limited impact on Level 3's credit metrics, it is favorable for
the company's business risk profile assessment, which S&P expects
to revise to "fair" from "weak." The acquisition will also deepen
Level 3's reach into metropolitan markets and boost the portion of
revenues the company's enterprise core network services -- its
most stable segment, in S&P's view -- generates.
LIGHTSQUARED INC: Top Lenders Abandon Plan to Split Company
-----------------------------------------------------------
Law360 reported that LightSquared Inc.'s secured bank lenders have
jettisoned a Chapter 11 exit plan that would split the wireless
venture in two and reorganize each estate separately, the group's
attorney said, opting to pursue only a separate plan keeping the
debtor unified. According to the report, Thomas Lauria of White &
Case LLP said that the lenders had concluded that pursuing an LP-
only reorganization plan was too risky given the lack of available
financing for LP to operate as a standalone company out of Chapter
11 and the regulatory complications involved.
About LightSquared Inc.
LightSquared Inc. and 19 of its affiliates filed Chapter 11
bankruptcy petitions (Bankr. S.D.N.Y. Lead Case No. 12-12080) on
May 14, 2012, to resolve regulatory issues that have prevented it
from building its coast-to-coast integrated satellite 4G wireless
network.
LightSquared had invested more than $4 billion to deploy an
integrated satellite-terrestrial network. In February 2012,
however, the U.S. Federal Communications Commission told
LightSquared the agency would revoke a license to build out the
network as it would interfere with global positioning systems used
by the military and various industries. In March 2012, the
Company's partner, Sprint, canceled a master services agreement.
LightSquared's lenders deemed the termination of the Sprint
agreement would trigger cross-defaults under LightSquared's
prepetition credit agreements.
LightSquared and its prepetition lenders attempted to negotiate a
global restructuring that would provide LightSquared with
liquidity and runway necessary to resolve its issues with the FCC.
Despite working diligently and in good faith, however,
LightSquared and the lenders were not able to consummate a global
restructuring on terms acceptable to all interested parties.
Lawyers at Milbank, Tweed, Hadley & McCloy LLP serve as counsel to
the Debtors. Alvarez & Marsal North America, LLC, is the
financial advisor. Kurtzman Carson Consultants LLC serves as
claims and notice agent.
MAGNUM HUNTER: Moody's Assigns B1 Rating on $340MM 2nd Lien Loan
----------------------------------------------------------------
Moody's Investors Service assigned a B1 rating to Magnum Hunter
Resources Corporation's (MHR) proposed $340 second-lien term loan
facility and affirmed the company's B3 Corporate Family Rating
(CFR), B3-PD Probability of Default Rating (PDR), Caa1 senior
unsecured note rating and SGL-3 Speculative Grade Liquidity
Rating. The outlook remains stable.
"While a successful syndication of the contemplated $340 million
amount will increase MHR's leverage, the company will benefit from
improved liquidity that will help fund increased production in
2015, " said Sajjad Alam, Moody's Assistant Vice President.
"However, additional non-core asset divestitures and good drilling
execution will be needed to maintain a stable credit profile."
Issuer: Magnum Hunter Resources Corporation
Assignments:
$340 million senior secured second-lien term loan, Assigned B1,
LGD2
Affirmations:
Corporate Family Rating, Affirmed B3
Probability of Default Rating, Affirmed B3-PD
US$600M 9.75% Senior Unsecured Regular Bond/Debenture, Affirmed
Caa1 (LGD5)
Speculative Grade Liquidity Rating, Affirmed SGL-3
Outlook Actions:
Maintain Stable Outlook
Ratings Rationale
Concurrent with this debt offering, the borrowing base of MHR's
revolving credit facility will be reduced to $50 million from $265
million. Revolver lenders will have a first-lien secured claim to
MHR's assets.
The term loan facility is rated B1, two notches above the CFR
given the significant loss absorption cushion afforded by the
company's $600 million senior unsecured notes. Moody's believe the
priority claim revolver borrowing base will grow over time from
the $50 million level and hence a two notch uplift to the second
lien term loan is more appropriate than the three notch separation
indicated by our Loss Given Default Methodology. The notes are
rated at Caa1 because of their subordinated claim to MHR's assets
behind the second lien term loan and first-lien revolving credit
facility.
MHR's B3 CFR reflects its small scale E&P operations; high
leverage relative to current production and reserves levels
despite some recent debt paydowns; weak capital productivity and
cash margins, and the execution and financing risks surrounding
the company's planned growth through 2015. The B3 CFR is supported
by MHR's significant acreage position in the Marcellus and Utica
Shales, good organic growth prospects and the potential value in
the company's midstream assets.
MHR should have adequate liquidity through 2015 which is captured
in the SGL-3 rating. Pro forma for term loan issue, the company
had $105 million of cash as of June 30, 2014 and has full
availability under the revised $50 million revolving credit
facility. However, over the next several quarters the company will
continue to generate significant negative free cash flow. The
company is looking to divest additional non-core assets in North
Dakota to raise additional cash. The term loan has no financial
covenants but the revolver has two. A maximum total secured net
debt to EBITDAX test of 2.5x (stepping down to 2.25x on March 31,
2015 and to 2x on June 30, 2015) and a minimum current ratio test
of 1x. Moody's expect the company to remain in compliance with
these covenants. Moody's expect limited borrowing base growth this
year as organic reserves additions are largely offset by asset
sales. Moody's note that MHR's midstream assets (Eureka Hunter)
are not pledged to MHR's bank lenders and could provide alternate
liquidity.
The stable outlook assumes that MHR will maintain adequate
liquidity and ramp up production through 2015.
A clear upward trend in production and good liquidity will be pre-
requisites for an upgrade. An upgrade could be considered if
production can be sustained above 25,000 boe per day and the
retained cash flow to debt ratio increases substantially and is
maintained above 30%.
The CFR could be downgraded if MHR is unable to execute the sale
of its non-operated Bakken assets within a reasonable time frame
or acquires significant additional non-producing properties using
debt. A downgrade is also possible if liquidity challenges re-
emerge or if the anticipated production and reserves growth is not
achieved in line with the capital spending and rising debt levels.
The principal methodology used in this rating was the 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.
Magnum Hunter Resources Corporation (MHR) is a Houston, Texas
based publicly traded oil and gas exploration and production (E&P)
company with principal assets in the states of West Virginia,
Ohio, North Dakota, and Kentucky.
MCKEN LLC: Court to Hold Expedited Hearing on Buffington Pact
-------------------------------------------------------------
Bankruptcy Judge Craig A. Gargotta granted the Motion for
Expedited Hearing on debtor McKen LLC's "Application to Compromise
Controversy" With creditors Bob & Beverly Buffington. A copy of
Judge Gargotta's Oct. 3 Order is available at http://is.gd/yZlW9H
from Leagle.com.
McKen, LLC, based in Kerrville, TX, filed a Chapter 11 bankruptcy
petition (Bankr. W.D. Tex. Case No. 14-51309) in San Antonio,
Texas, on May 15, 2014. Judge Craig A. Gargotta oversees the
case. McKen LLC does business as Hill Country RV Park. It is
represented by:
William R. Davis, Jr, Esq.
LANGLEY & BANACK, INC
745 E Mulberry Ave, Suite 900
San Antonio, TX 78212
Tel: (210) 736-6600
Fax: (210) 735-6889
E-mail: wrdavis@langleybanack.com
METALDYNE PERFORMANCE: S&P Retains 'BB-' CCR After Loan Upsize
--------------------------------------------------------------
Standard & Poor's Ratings Services said that its 'BB-' corporate
credit rating and stable outlook on Metaldyne Performance Group
Inc. remains unchanged after the company upsized its proposed
senior secured term loan to $1.35 billion from $1.25 billion and
correspondingly downsized the proposed senior unsecured notes to
$600 million from $700 million. The borrower is MPG Holdco I
Inc., a wholly owned subsidiary of the rated entity, Metaldyne
Performance Group Inc.
The 'BB+' issue-level rating and '1' recovery rating on the
upsized term loan and proposed $250 million revolving credit
facility as well as the 'B+' issue-level rating and '5' recovery
rating on the downsized notes remain unchanged. Despite higher
senior secured claims in S&P's simulated default scenario, it
still anticipates very high recovery (at the lower portion of the
90% to 100% range) of principal for senior secured lenders and
negligible recovery (0% to 10%) of principal for senior unsecured
lenders in the event of payment default.
RATINGS LIST
Metaldyne Performance Group Inc.
Corporate Credit Rating BB-/Stable/--
Ratings Unchanged
MPG Holdco I Inc.
Senior Secured
$1.35B* term loan BB+
Recovery Rating 1
$250M revolver BB+
Recovery Rating 1
Senior Unsecured
$600M* notes B+
Recovery Rating 5
*Following amount changes.
MIDTOWN SCOUTS: Confirmation Hearing Rescheduled for Oct. 28
-------------------------------------------------------------
The Bankruptcy Court entered an order resetting to Oct. 28, 2014,
at 9:30 a.m., the hearing to consider the confirmation of Midtown
Scouts Square Property, LP, et al.'s Joint Chapter 11 Plan. The
hearing was previously set for Oct. 1.
The Debtors have proposed a Reorganization Plan that provides for
these terms:
(1) Allowed Administrative Claims and Priority Non-Tax Claims
will be paid in cash in full;
(2) Allowed Ad Valorem Claims of Taxing Authorities will be
paid in cash full within 30 days of the Effective Date;
(3) Allowed Non-Tax Priority Claims, if any, will be paid in
cash in full within 30 days of the Effective Date;
(4) Allowed Priority Tax Claims, if any, will be paid in full
within 30 days of the Effective Date including interest
at the statutory rate;
(5) Allowed Secured Claim of Bank of Houston secured by liens
on the Office Building will be paid by pursuant to the
terms of the prepetition promissory note, with the unpaid
prepetition amount due added on to the end of the
respective note;
(6) Allowed Secured Claim of Bank of Houston secured by liens
on the Parking Garage will be paid by pursuant to the
terms of the prepetition promissory note, with the
exception that the term of the note will be extended by
60 months with the unpaid prepetition amount due added on
to the end of the respective note;
(7) Allowed Secured Claim of the Debtors' second lien lender
(Mercantile Capital Corporation) will be converted to the
permanent SBA Debenture (504 loan) and will be paid
pursuant to terms of the pre-approved SBA note;
(8) Allowed Non-Insider Unsecured Claims will be paid in full
with interest at 5% over 60 months beginning on the
Effective Date with quarterly distributions thereafter;
(9) The Allowed Claims of Insiders, including any Allowed
Claim of Richey Family Limited Partnership, Todd Richey
and L.E. Richey, will be paid in full with interest at 5%
over 60 months, or in the event the Court determines that
the Richey's hold an equity interest in the Debtors, such
claim will be converted to equity;
(10) In exchange for converting the postpetition financing
claim entitled to priority under Section 503(b)(l), his
prepetition claim of $260,624, and the Equity Infusion,
Atul Lucky Chopra will retain his 100% equity interest in
the Reorganized Debtors, or a reduced equity percentage
if the Court determines that the Richeys hold an equity
interest in the Debtors.
As reported in the TCR on Sept. 9, 2014, the tabulation of
balloting on the Joint Plan showed that for each of the voting
classes, the Debtors got 89% to 100% acceptance of the Plan.
A copy of the Disclosure Statement is available for free at:
http://bankrupt.com/misc/MIDTOWNSCOUTS_148_ds.pdf
About Midtown Scouts Square
Midtown Scouts Square Property, LP, and affiliate Midtown Scouts
Square, LLC, own two commercial properties located in Midtown
Houston, Texas. The first property is a mixed use 36,000-square-
foot two-storey office/restaurant building originally constructed
in 1975, while the second property is a 104,000-square foot eight-
storey parking garage with ground floor retail space, both in
Bagby Street, in Houston.
The two entities sought Chapter 11 protection (Bankr. S.D. Tex.
Lead Case No. 13-32920) on May 9, 2013. The petitions were signed
by Erich Mundinger as president of general partner. Judge Karen
K. Brown presides over the case. In its schedules, MSS Property
disclosed $17,408,328 in assets and $16,666,325 in liabilities.
Edward L. Rothberg, Esq. at Hoover Slovacek, LLP, serves as the
Debtor's counsel. Hawash Meade Gaston Neese & Cicack, LLP, serves
as special litigation counsel.
The U.S. Trustee has not appointed an official committee of
unsecured creditors in the Debtors' bankruptcy cases.
MOMENTIVE PERFORMANCE: Expects Plan Effective Date in 4th Quarter
-----------------------------------------------------------------
Judge Robert D. Drain of the U.S. Bankruptcy Court for the
Southern District of New York approved a timetable for the
substantial consummation of the joint Chapter 11 plan of Momentive
Performance Materials Inc. and its debtor affiliates and entry of
a final decree closing the Debtors' cases. The Debtors anticipate
that the effective date of the Plan will occur in the fourth
quarter of 2014.
Bill Rochelle and Sherri Toub, bankruptcy columnists for Bloomberg
News, reported that although Judge Drain allowed Momentive to
implement its reorganization plan, dissenting bondholders are
trying to keep their appeal alive in the U.S. Court of Appeals in
Manhattan. These dissenting bondholders have appealed the order
confirming Momentive's plan and asked the bankruptcy court to
enjoin the confirmation order pending its appeal. Both the
bankruptcy judge and a district judge refused to block
implementation of Momentive's plan, and the appeals court also
turned down the request to hear the appeal, directing the
bondholder groups to explain how there's jurisdiction, or power in
the circuit court, to grant a stay, the Bloomberg report related.
The bondholders said there are grounds for power to issue a stay
pending appeal, pointing out that the district court effectively
denied an injunction, giving the appeals court jurisdiction under
Section 1292(a)(1) of the Judiciary Code dealing with appeals from
denial or grant of injunctions, and, further pointing out that the
appeals court also has jurisdiction under the so-called All Writs
Act, Section 1651(a) of the Judiciary Code.
The appeals in the circuit court are U.S. Bank NA v. Wilmington
Savings Fund Society FSB (In re MPM Silicones LLC), 14-3536, and
and BOKF NA v. Momentive Performance Materials Inc. (In re MPM
Silicones LLC), 14-3531, both in U.S. Second Circuit Court of
Appeals (Manhattan).
About Momentive Performance
Momentive Performance is one of the world's largest producers of
silicones and silicone derivatives, and is a global leader in the
development and manufacture of products derived from quartz and
specialty ceramics. Momentive has a 70-year history, with its
origins as the Advanced Materials business of General Electric
Company. In 2006, investment funds affiliated with Apollo Global
Management, LLC, acquired the company from GE.
As of Dec. 31, 2013, the Company had 4,500 employees worldwide, of
which 46% of the Company's employees are members of a labor union
or are represented by workers' councils that have collective
bargaining agreements.
Momentive Performance Materials Inc., Momentive Performance
Materials Holdings Inc., and their affiliates sought Chapter 11
protection (Bankr. S.D.N.Y. Lead Case No. 14-22503) on April 14,
2014, with a deal with noteholders on a balance-sheet
restructuring.
As of Dec. 31, 2013, the Debtors had $4.114 billion of
consolidated outstanding indebtedness, including payments due
within the next 12 months and short-term borrowings. The Debtors
said that the restructuring will eliminate $3 billion in debt.
The Debtors have tapped Willkie Farr & Gallagher LLP as bankruptcy
counsel with regard to the filing and prosecution of these chapter
11 cases; Sidley Austin LLP as special litigation counsel; Moelis
& Company LLC as financial advisor and investment banker;
AlixPartners, LLP as restructuring advisor; PricewaterhouseCoopers
as auditor; and Crowe Horwath LLP as benefit plan auditor.
Kurtzman Carson Consultants LLC is the notice and claims agent.
The Court entered an order confirming the Plan on Sept. 11, 2014.
The U.S. Trustee for Region 2 appointed seven members to serve on
the Official Committee of Unsecured Creditors of the Debtors'
cases. Klee, Tuchin, Bogdanoff & Stern LLP serves as its
counsel. FTI Consulting, Inc., serves as its financial advisor.
Rust Consulting Omni Bankruptcy serves as its information agent.
Wilmington Trust, National Association, the Trustee for the
Momentive Performance Materials Inc. 10% Senior Secured Notes due
2020 -- 1.5 Lien Notes -- under the Indenture, dated as of May 25,
2012, by and between Momentive Performance Materials Inc. and The
Bank of New York Mellon Trust Company, National Association, is
represented by Mark R. Somerstein, Esq., Mark I. Bane, Esq., and
Stephen Moeller-Sally, Esq., at Ropes & Gray LLP.
U.S. Bank National Association -- as successor Indenture Trustee
under the indenture dated as of December 4, 2006, among Momentive
Performance Materials Inc., the Guarantors named in the Indenture,
and Wells Fargo Bank, N.A. as initial trustee, governing the 11.5%
Senior Subordinated Notes due 2016 -- is represented in the case
by Susheel Kirpalani, Esq., Benjamin I. Finestone, Esq., David L.
Elsberg, Esq., Robert Loigman, Esq., K. John Shaffer, Esq., and
Matthew R. Scheck, Esq., at Quinn Emanuel Urquhart & Sullivan,
LLP; and Clark Whitmore, Esq., and Ana Chilingarishvili, Esq., at
Maslon Edelman Borman & Brand, LLP.
BOKF, NA -- as successor First Lien Trustee to The Bank of New
York Mellon Trust Company, N.A., as trustee under an indenture
dated as of October 25, 2012, for the 8.875% First-Priority Senior
Secured Notes due 2020 issued by Momentive Performance Materials
Inc. and guaranteed by certain of the debtors -- is represented by
Michael J. Sage, Esq., Brian E. Greer, Esq., and Mauricio A.
Espana, Esq., at Dechert LLP.
Counsel to Apollo Global Management, LLC and certain of its
affiliated funds are Ira S. Dizengoff, Esq., Philip C. Dublin,
Esq., Abid Qureshi, Esq., Deborah J. Newman, Esq., and Ashleigh L.
Blaylock, Esq., at Akin Gump Strauss Hauer & Feld LLP.
Attorneys for Ad Hoc Committee of Second Lien Noteholders are
Dennis F. Dunne, Esq., Michael Hirschfeld, Esq., and Samuel A.
Khalil, Esq., at Milbank, Tweed, Hadley & McCloy LLP.
MONTREAL MAINE: DSI Services to Provide Transition Services
-----------------------------------------------------------
Robert J. Keach, Chapter 11 trustee for Montreal Maine & Atlantic
Railway, Ltd., asks the Bankruptcy Court to enter an order
amending the terms of his retention of Development Specialists,
Inc., as his financial advisor.
In addition to the professional services provided to the trustee
by DSI, the Trustee requests that DSI be authorized to render
transition services to the purchaser in connection with the sale,
on behalf of the trustee, pursuant to these terms:
a. DSI will be authorized to provide financial reporting and
other services to the purchaser in connection with the transition
in ownership and operation of the sale assets;
b. DSI will create a separate time category for providing
financial reporting services or other requested services to the
purchaser;
c. DSI will provide weekly time details to the purchaser for
its review by Friday of the following week;
d. DSI will invoice the purchaser for services rendered on a
monthly basis at the previously-approved rate of $635 per hour,
plus reasonable out of pocket travel expenses to the extent such
travel expenses are approved in advance in writing by
the purchaser;
The Trustee submits that the additional terms and conditions for
the retention of DSI are fair and reasonable and are in the best
interests of all parties.
About Montreal Maine
Montreal, Maine & Atlantic Railway Ltd., the railway company that
operated the train that derailed and exploded in July 2013,
killing 47 people and destroying part of Lac-Megantic, Quebec,
sought bankruptcy protection in U.S. Bankruptcy Court in Bangor,
Maine (Case No. 13-10670) on Aug. 7, 2013, with the aim of selling
its business. Its Canadian counterpart, Montreal, Maine &
Atlantic Canada Co., meanwhile, filed for protection from
creditors in Superior Court of Quebec in Montreal.
Robert J. Keach, Esq., at Bernstein, Shur, Sawyer, and Nelson,
P.A., has been named as chapter 11 trustee. His firm serves as
his chapter 11 bankruptcy counsel, led by Michael A. Fagone, Esq.,
and D. Sam Anderson, Esq. Development Specialists, Inc., serves
as the Chapter 11 trustee's financial advisor. Gordian Group,
LLC, serves as the Chapter 11 Trustee's investment banker.
U.S. Bankruptcy Judge Louis H. Kornreich has been assigned to the
U.S. case. The Maine law firm of Verrill Dana served as counsel
to MM&A. It now serves as counsel to the Chapter 11 Trustee.
Justice Martin Castonguay oversees the case in Canada.
The Canadian Transportation Agency suspended the carrier's
operating certificate after the accident, due to insufficient
liability coverage.
The town of Lac-Megantic, Quebec, has sought financial aid to
restore the gutted community and a civil complaint alleges a
failure to take steps to prevent a derailment.
In the Canadian case, Andrew Adessky at Richter Consulting has
been appointed CCAA monitor. The CCAA Monitor is represented by
Sylvain Vauclair at Woods LLP. MM&A Canada is represented by
Patrice Benoit, Esq., at Gowling LaFleur Henderson LLP.
The U.S. Trustee appointed a four-member official committee of
derailment victims. The Official Committee is represented by:
Richard P. Olson, Esq., at Perkins Olson; and Luc A. Despins,
Esq., at Paul Hastings LLP.
There's also an unofficial committee of wrongful death claimants
consisting of representatives of the estates of the 46 victims.
This group is represented by George W. Kurr, Jr., Esq., at Gross,
Minsky & Mogul, P.A.; Daniel C. Cohn, Esq., at Murtha Cullina LLP;
Peter J. Flowers, Esq., at Meyers & Flowers, LLC; Jason C.
Webster, Esq., at The Webster Law Firm; and Mitchell A. Toups,
Esq., at Weller, Green Toups & Terrell LLP.
After the U.S. Trustee formed the Official Committee, the ad hoc
committee filed papers asking the U.S. Court to have the official
committee disbanded. The ad hoc group said it represents 46
victims of the disaster.
On Jan. 23, 2014, the Debtors won authorization to sell
substantially all of their assets to Railroad Acquisition Holdings
LLC, an affiliate of New York-based Fortress Investment Group, for
$15.7 million. The Bankruptcy Courts in the U.S. and Canada
approved the sale. The Fortress unit is represented by Terence M.
Hynes, Esq., and Jeffrey C. Steen, Esq., at Sidley Austin LLP.
On Jan. 29, 2014, an ad hoc group of wrongful-death claimants
submitted a plan, which would give 75% of the $25 million in
available insurance to the families of those who died after an
unattended train derailed in Lac-Megantic, Quebec, in July. The
other 25% would be earmarked for claimants seeking compensation
for property that was damaged when much of the town burned.
Former U.S. Senator George Mitchell, a Democrat who represented
Maine in the U.S. Senate from 1980 to 1995 and who is now chairman
emeritus of law firm DLA Piper LLP, would administer the plan and
lead the effort to wrap up MM&A's Chapter 11 bankruptcy.
As reported by the Troubled Company Reporter on April 3, 2014,
Judge Kornreich ruled that the unofficial committee of wrongful
death claimants and its counsel have failed to comply with Rule
2019 of the Federal Rules of Bankruptcy Procedure, and as a result
of that failure, the Unofficial Committee and its counsel will not
be heard on any pending matter in the case.
As reported by the TCR on April 11, 2014, Judge Kornreich rejected
the disclosure statement for the Plan filed by the ad hoc group of
wrongful-death claimants, holding that the Plan is flawed and
unconfirmable.
MPG HOLDCO: $1.35BB Add-on Loan No Impact on Moody's B1 CFR
-----------------------------------------------------------
Moody's Investors Service said the upsizing of MPG Holdco I Inc.'s
(Metaldyne) senior secured term loan to $1.35 billion from $1.25
billion does not impact the previously assigned ratings --
Corporate Family and Probability of Default Ratings at B1, and B1-
PD respectively; Metaldyne's $1.6 billion senior secured bank
credit facility at Ba3; $600 million senior unsecured notes at B3;
and stable rating outlook.
The last rating action for Metaldyne was on September 24, 2014
when the B1 Corporate Family Rating and stable rating outlook were
assigned.
The principal methodologies used in rating MPG Holdco I Inc. were
the Global Automotive Supplier Industry published in May 2013, and
the Loss Given Default for Speculative-Grade Non-Financial
Companies in the U.S., Canada and EMEA published in June 2009.
Other methodologies and factors that may have been considered in
the process of rating this issuer can also be found on Moody's
website.
Metaldyne Performance Group Inc., headquartered in Plymouth, MI,
and the parent company of MPG Holdco I Inc. (Metaldyne), focuses
on metal forming technologies. The powertrain portfolio focuses on
transmission, engine, and driveline applications, while its
safety-critical products include steering, suspension, and brake
parts and other specialty products. The company is largely owned
by affiliates of American Securities. Revenues for the LTM period
ending June 2014 approximated $3.1 billion.
MUSCLEPHARM CORP: Appoints Andrew Lupo as Director
--------------------------------------------------
The Board of Directors of MusclePharm Corporation appointed Andrew
Lupo to serve as a member of the Company's Board of Directors and
as Chairman of the Company's Compensation Committee, the Company
disclosed in a Form 8-K filed with the U.S. Securities and
Exchange Commission. The Board of Directors has determined that
Mr. Lupo is an independent director pursuant to the rules of the
NASDAQ Stock Market.
Andrew Lupo is currently the president and chief compliance
officer at UniCredit Capital Markets and the Head of Legal and
Compliance at UniCredit Bank AG's New York Branch, where he has
served since 2001. Mr. Lupo has also served as managing director
of Banking in UniCredit Bank's public finance department. Mr.
Lupo served as the chief financial officer, chief operating
officer and chief compliance officer in the Municipal Securities
Group at FirstUnion Securities, Inc., where he oversaw the
operations of 16 regional offices.
Mr. Lupo is a graduate of the University of Scranton where he
earned his B.S. in Accounting. According to the Company, his 34
years of executive experience in public finance bring to
MusclePharm knowledge of public company management, financial and
accounting understanding, and compliance expertise.
Mr. Lupo will be compensated for his services at the same level as
the other non-employee directors of the Company, pursuant to the
Company's Non-Employee Director Compensation Program.
There is no family relationship between Mr. Lupo and any of the
Company's other officers and directors.
About MusclePharm
Headquartered in Denver, Colorado, MusclePharm Corporation
(OTC BB: MSLP) -- http://www.muslepharm.com/-- is a healthy life-
style company that develops and manufactures a full line of
National Science Foundation approved nutritional supplements that
are 100 percent free of banned substances. MusclePharm is sold in
over 120 countries and available in over 5,000 U.S. retail
outlets, including GNC and Vitamin Shoppe. MusclePharm products
are also sold in over 100 online stores, including
bodybuilding.com, Amazon.com and Vitacost.com.
MusclePharm reported a net loss after taxes of $17.71 million in
2013, a net loss after taxes of $18.95 million in 2012, and a net
loss of $23.28 million in 2011. As of June 30, 2014, the Company
had $66.93 million in total assets, $28.83 million in total
liabilities, and $38.09 million in total stockholders' equity.
MMRGLOBAL INC: To Report Biggest Revenue in Company History
-----------------------------------------------------------
MMRGlobal, Inc., announced that it will report third quarter
revenues from all sources in excess of total revenues from its
biggest year. The Health Information Technology and Biotechnology
Company will report substantially more revenue than the $1.420
million reported from the entire calendar year of 2011, previously
the biggest year in the Company's history and which the Company
has received in cash.
According to MMRGlobal CEO Robert H. Lorsch, "In a letter to
shareholders earlier this year, the Company projected that 2014
would be our year' and at this time it appears that it is."
The Company licenses and sells worldwide Health Information
Technology and Biotech intellectual property rights, including
international patents, vaccine and patient samples and anti-CD20
monoclonal antibodies.
Although MMR's primary focus is as a provider and licensor of
Health IT products and services, the Company also has a growing
list of biotech patents. These include cancer-fighting anti-CD20
monoclonal antibody assets under the title, "Antibodies and
Methods For Making and Using Them," issued in the United States,
Mexico, Australia and South Korea. Additional patents for the
Company's antibody technology are also pending in the U.S.,
Australia, Brazil, Canada, China, Hong Kong, India, Europe, Japan
and Korea. The Company also holds additional patents pertaining
to a B-cell idiotype vaccine worldwide.
Through its wholly owned subsidiary, MyMedicalRecords, Inc., the
Company sells Health IT products and services including its
MyMedicalRecords Personal Health Record and other patented health
information technologies to consumers, physicians, hospitals,
surgical centers and other healthcare professionals, as well as
retailers, employers and professional organizations. MMR also
offers its MMRPro document management and imaging system for
healthcare professionals, and MyEsafeDepositBox, which provides an
online site to securely store legal, financial, insurance and
other important documents, as well as medical and personal health
information.
MyMedicalRecords is a practicing entity whose Health IT patent
portfolio currently consists of 13 issued U.S. patents, 17 pending
U.S. applications, and numerous issued patents and pending
applications in other countries or regional authorities of
commercial interest including Australia, Singapore, New Zealand,
Mexico, Japan, Canada, China, Hong Kong, South Korea, Israel and
Europe. MMR's U.S. patents include U.S. Patent Nos. 8,301,466;
8,352,287; 8,352,288; 8,121,855; 8,117,646; 8,117,045; 8,321,240;
8,498,883; 8,626,532, 8,645,161; 8,725,537; 8,768,725 and
8,775,212, as well as additional applications and continuation
applications involving inventions pertaining to Personal Health
Records, Patient Portals and other Electronic Health Record
systems. The most recently issued U.S. patent, U.S. Patent No.
8,775,212, represents MMR's first Clinical Trials patent and
includes 18 claims directed to methods and systems that provide
for self-reporting being used to create Electronic Health Records
for purposes including Clinical Trials.
About MMRGlobal
Los Angeles, Calif.-based MMR Global, Inc. (OTC BB: MMRF)
-- http://www.mmrglobal.com/-- through its wholly-owned operating
subsidiary, MyMedicalRecords, Inc., provides secure and easy-to-
use online Personal Health Records (PHRs) and electronic safe
deposit box storage solutions, serving consumers, healthcare
professionals, employers, insurance companies, financial
institutions, and professional organizations and affinity groups.
MMRGlobal reported a net loss of $7.63 million in 2013, as
compared with a net loss of $5.90 million in 2012.
As of June 30, 2014, the Company had $2.31 million in total
assets, $10.87 million in total liabilities, and an $8.55 million
total stockholders' deficit.
Rose, Snyder & Jacobs LLP, in Encino, California, issued a "going
concern" qualification on the consolidated financial statements
for the year ended Dec. 31, 2013. The independent auditors noted
that the Company has incurred significant operating losses and
negative cash flows from operations during the years ended
December 31, 2013 and 2012. These conditions raise substantial
doubt about the Company's ability to continue as a going concern.
NAARTJIE CUSTOM: Target Ease Part of Creditors Committee
--------------------------------------------------------
Patrick S. Layng, the U.S. Trustee, served an amended notice of
appointment of members to the Official Committee of Unsecured
Creditors in that Chapter 11 case of Naartjie Custom Kids, Inc.
The new document does not provide for any new membership changes.
Instead, it only listed as member "Target Ease International"
instead of "Target East International" in the original notice.
The Creditors Committee comprises:
1. Simon Property Group, Inc., chairperson
c/o Ron Tucker, Esq.
225 W. Washington Street
Indianapolis, IN 46204
Tel: (317) 263-2346
Cell Phone: (317) 371-1781
Fax: (317) 263-7901
E-mail: rtucker@simon.com
2. Target Ease International
c/o Mona Burton, Esq.
and Engels J. Tejeda, Esq.
222 South Main, Suite 2200
Salt Lake City, UT 84101
Tel: (801) 799-5822
E-mail: mburton@hollandhart.com
ejtejeda@hollandhart.com
francis@targetease.com.hk
3. Soxnet, Inc.
c/o Alex Ryu
235 South 6th Avenue
La Puente, CA 91746
Tel: (626) 934-9400
Fax: (626) 934-8400
E-mail: alex@soxnetinc.com
4. GGP Limited Partnership
c/o Julie Minnick Bowden
110 North Wacker Drive
Chicago, IL 60606
Tel: (312) 960-2707
Fa: (312) 442-6374
E-mail: julie.minnick@ggp.com
5. Inetz
c/o JT Holt or Steve Haymond
1055 East 3900 South
Salt Lake City, UT 84124
Tel: (801) 415-2500
Fax: (801) 415-2501
E-mail: jt@inetz.com
shaymond@inetz.com
6. The Macerich Company
c/o Steve Spector, SVP, GC
and Bill Palmer, AVP Asset Management
401 Wilshire Blvd., Suite 700
Santa Monica, CA 90401
Tel: (424) 299-3348 & (585) 249-4421
Fax: (310) 393-0756
E-mail: steve.spector@macerich.com
The U.S. Trustee is represented by:
Peter J. Kuhn, Esq.
United States Department Of Justice
Office of the U.S. Trustee
405 South Main Street, Suite 300
Ken Garff Building
Salt Lake City, Utah 84111
Tel: (801) 524-5734
Fax: (801) 524-5628
E-mail: Peter.J.Kuhn@usdoj.gov
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.
NAKED BRAND: Amends 41.5 Million Shares Resale Prospectus
---------------------------------------------------------
Naked Brand Group Inc. had amended its registration statement with
the U.S. Securities and Exchange Commission relating to the
offer and sale of up to 41,569,071 shares of its common stock that
may be issued upon exercise of warrants. The Company amended the
Registration Statement to delay its effective date.
The warrants were acquired by Peter or Allison Venditti, Bobby W.
Sandage, Jr., Clemens and Adri Vander Werf, et al., directly from
the Company in private placements that were exempt from the
registration requirements of the Securities Act of 1933.
The selling stockholders may sell all or a portion of the shares
being offered pursuant to this prospectus at fixed prices, at
prevailing market prices at the time of sale, at varying prices or
at negotiated prices.
The Company's common stock is quoted on the OTCQB operated by the
OTC Markets Group under the symbol "NAKD". On Sept. 30, 2014, the
closing price of the Company's common stock on the OTCQB was $0.19
per share.
The Company will not receive any proceeds from the sale of the
shares of its common stock by the selling stockholders. The
Company will, however, receive proceeds upon exercise of the
warrants by the selling stockholders. The Company will pay for
expenses of this offering, except that the selling stockholders
will pay any broker discounts or commissions or equivalent
expenses and expenses of their legal counsels applicable to the
sale of their shares.
A copy of the Form S-1/A is available for free at:
http://is.gd/HXeKHy
About Naked Brand
Naked Brand Group Inc. designs, manufactures, and sells men's
innerwear and lounge apparel products in the United States and
Canada. It offers various innerwear products, including trunks,
briefs, boxer briefs, undershirts, T-shirts, and lounge pants
under the Naked brand, as well as under the NKD sub-brand for men.
The company sells its products to consumers and retailers through
wholesale relationships and direct-to-consumer channel, which
consists of an online e-commerce store, thenakedshop.com. Naked
Brand Group Inc. is based in New York, New York.
The Company's balance sheet at July 31, 2014, showed $4.98 million
in total assets, $35.18 million in total liabilities and a
stockholders' deficit of $30.2 million.
As at July 31, 2014, the Company had not yet achieved profitable
operations and expects to incur significant further losses in the
development of its business, which casts substantial doubt about
the Company's ability to continue as a going concern, the Company
stated in the quarterly report for the period ended July 31, 2014.
NATURAL RESOURCE: S&P Affirms 'B+' CCR; Outlook Stable
------------------------------------------------------
Standard & Poor's Ratings Services said it affirmed its 'B+'
corporate credit rating on Houston-based Natural Resource Partners
L.P. (NRP). The outlook is stable. At the same time, S&P raised
its issue-level rating on the company's $300 million 9.125% senior
unsecured notes due 2018 to 'B+' from 'B'. The company has
proposed a $125 million add-on to the notes. S&P also revised its
recovery rating on this debt to '4' from '5', indicating S&P's
expectation of average recovery (30% to 50%) in the event of
payment default.
The rating affirmation reflects S&P's view that the recent
acquisition of VantaCore Partners L.P. and the pending acquisition
of Kaiser-Francis Oil Co. strengthen NRP's business mix while
reducing its dependence on the coal royalty, transportation, and
processing businesses. S&P expects coal-related revenue to
decline to approximately 40% in 2015 from about 60% in 2013.
However, NRP faces the integration risks of closing two large
acquisitions within a short time frame. S&P also expects NRP to
maintain an aggressive growth strategy focused on acquisitions
that will at times result in elevated debt leverage, but S&P
expects debt to EBITDA to be maintained at roughly 4x to 4.5x in
2015.
"The stable outlook reflects our view that NRP's credit measures
will remain stable over the next 12 months despite weakness in
U.S. thermal coal markets," said Standard & Poor's credit analyst
William Ferara. "We expect debt to EBITDA to remain between 4x
and 4.5x and FFO to debt of 15% to 20%, with acquisitions financed
in a debt-leverage-neutral manner."
S&P could lower the rating on NRP if it expected leverage to
increase and remain above 5x, either because of a debt-funded
acquisition or sustained weakness in U.S. coal markets resulting
in lower production and pricing. S&P could also lower its rating
if the partnership were unable to fund its distribution payments
through distributable cash flow.
S&P could upgrade NRP if debt leverage were to be sustained below
4x and there were further cash flow diversity by business line
that dis not weaken the partnership's business risk profile.
However, S&P views this as unlikely over the next 12 months.
NORTEL NETWORKS: E&Y Objects to Bondholder Group Deal
-----------------------------------------------------
BankruptcyData reported that Ernst & Young, as monitor and foreign
representative of the Canadian Debtors, filed with the U.S.
Bankruptcy Court a supplemental objection to Nortel Networks'
motion for entry of an order approving a postpetition interest
agreement between NII and certain bondholders.
According to BData, the monitor asserts that the proposed
settlement between NNI and the Bondholders is not a settlement
between adverse parties, pointing out that the Bondholder Group,
with the aid of the Debtors, scrambled over the course of a week
starting on July 15, 2014, to construct a purported settlement
that gives the Bondholders $1.01 billion of postpetition interest
through June 30, 2015 -- or nearly $900 million over and above the
post-petition interest they would receive if paid at the federal
judgment rate. While the Debtors represent that the Proposed
Agreement was 'vigorously negotiated,' the evidence obtained
through court-ordered discovery demonstrates that the agreement is
not the result of vigorous, arm's length negotiations among the
parties, E&Y said, BData related.
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.
OHCMC-OSWEGO LLC: Court Confirms Sale-Based Plan
------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Illinois
entered an order confirming OHCMC-Oswego, LLC' Modified Plan of
Liquidation dated June 30, 2014, which contemplates a sale of the
Debtors' assets.
L.B. Anderson Construction, Inc., the stalking horse bidder, is
under contract to purchase the assets for $11,750,000, absent
higher and better offers in an auction.
The Court approved the explanatory Disclosure Statement and
confirmed the Plan following a hearing on Sept. 17.
The Court will convene a post-confirmation status hearing on
Nov. 5, 2014, at 10:30 a.m.
A copy of the confirmation order and the Plan is available for
free at http://bankrupt.com/misc/OHCMC-Oswego_Plan_Order.pdf
Pursuant to the Plan, the Debtor anticipates a sale process that
will allow its real estate broker adequate time to market the
properties to ensure the Debtor receives the highest and best
offer for the properties. The proceeds of the sale of the
properties will be used to satisfy the secured claims of BMO
and PNC. The Debtor will distribute a set sum of money that is
currently held in an escrow account with the Village of Oswego and
totaling $29,408 to unsecured creditors in accordance with the
Bankruptcy Code's priority scheme.
About OHCMC-Oswego
OHCMC-Oswego, LLC, is an Illinois limited liability company that
was formed on July 12, 2005 to, inter alia, acquire, develop and
sell a series of real estate developments. It is wholly owned by
Oliver-Hoffman Corporation. Its principal place of business is
located at 3108 S. Rt. 59, Ste. 124-373, Naperville, Illinois.
OHCMC-Oswego filed a Chapter 11 bankruptcy petition (Bankr. N.D.
Ill. Case No. 14-05349) in Chicago on Feb. 19, 2014, with plans to
sell its assets. Camille O. Hoffmann signed the petition as
president of managing and sole member. The Debtor disclosed
$92,268 plus an unknown amount in assets and $56,782,127 in
liabilities. The Hon. Carol A. Doyle presides over the case. The
Debtor is represented by David C. Gustman,, Esq., at Freeborn &
Peters LLP.
No trustee, examiner or creditors' committee has been appointed in
the case.
OPAL ACQUISITION: S&P Affirms 'B' CCR & Revises Outlook to Stable
-----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B' corporate
credit rating on Opal Acquisition Inc. In addition, S&P revised
the outlook to stable from negative.
"We are revising our outlook to stable from negative based on our
view that Opal's business is performing adequately to support its
substantial debt load and modest liquidity needs," said Standard &
Poor's credit analyst James Sung. "We believe Opal's competitive
position is improving based on its growing size/scale and product
diversity, particularly versus other 'B' rated insurance services
companies."
S&P also affirmed its 'B' debt rating on Opal's $125 million
revolver due 2018 and $1.3 billion term loan due 2020. The
recovery ratings on these issues remain '3, indicating that
lenders could expect a meaningful (50%-70%) recovery in the event
of a payment default. In addition, S&P affirmed its 'CCC+' debt
rating on Opal's $610 million 8.875% senior unsecured notes due
2021. The recovery rating on the senior unsecured notes remain
'6', indicating that lenders could expect a negligible (0%-10%)
recovery in the event of a payment default
S&P's ratings on Opal are based on its "fair" business risk
profile (an improvement versus S&P's previous "weak" assessment)
and its "highly leveraged" financial risk profile.
Opal's operating company One Call Care Management is a leading
player in the specialty managed care industry focusing on workers
compensation. S&P expects the company to generate pro forma
revenues of over $1.4 billion in 2014. Key business strengths
include its No. 1 market shares in most of its various service
lines (diagnostics, physical therapy, home health,
transportation/translation, equipment and device management,
dental) and favorable industry growth prospects. Key business
weaknesses include the company's overall narrow business scope in
a niche industry and several key client concentrations. Financial
risk considerations include the company's private-equity ownership
and the associated very aggressive financial policies.
Opal's business fundamentals are sound though it still faces
ongoing integration/execution risks. Current-year revenue and
EBITDA are performing better than last year. Pro forma revenues
and adjusted EBITDA were both up above 10% through the first half
of 2014. The company is leveraging its broadened product
portfolio to improve business penetration with existing customers,
win new customers, and improve certain provider contracts. In
addition, the company is making some progress in realizing its
targeted acquisition cost synergies. At the same time, the
company still has some integration work ahead through 2015. The
company still needs to translate its improving competitive
position into more significant EBITDA margin expansion over the
long-term.
"From a financial risk perspective, Opal operates at the weaker
end of our "highly leveraged" category. At the time of Opal's LBO
in Nov. 2013, leverage was up above 8x on a pro forma basis and we
had expected it to decrease to 6.5x-7.0x by year-end 2014. We now
project leverage to remain above 8x at year-end 2014 and above 7x
at year-end 2015. In addition, EBITDA interest coverage remains
weak. We expect EBITDA interest coverage to be less than 2x for
2014 and slightly more than 2x for 2015. Leverage has not
decreased as we had expected because the company raised additional
debt to acquire Align Networks Inc. (in Dec. 2013) and GENEX
Services Inc.'s diagnostic/physical therapy businesses (in June
2014). In addition, we no longer expect the company to utilize
free cash flows for debt repayment. Instead we expect the company
to preserve cash for potential acquisitions," S&P noted.
QIMONDA AG: Justices Empower Ch. 15 Courts on IP Licensing Issues
-----------------------------------------------------------------
The U.S. Supreme Court refused to allow an appeal in the Chapter
15 case of Qimonda AG, saying a foreign bankruptcy proceeding
cannot be used to terminate licenses of U.S. patents, various news
sources reported.
Law360 reported that the Supreme Court's decision strengthened the
hand of Chapter 15 debtors' U.S. patent licensees as the high
court refused to question a Fourth Circuit ruling that effectively
denied bankrupt German semiconductor manufacturer Qimonda AG's
efforts to cancel its U.S. patent licensing agreements. Bill
Rochelle and Sherri Toub, bankruptcy columnists for Bloomberg
News, reported that Samsung Electronics Co. was the winner in the
Fourth Circuit, overcoming argument by the German administrator
that Chapter 15 of the U.S. Bankruptcy Code, governing cross-
border insolvencies, "mandates" enforcement of German law in the
U.S., "subject only to a narrow public policy exception" in
Section 1506.
The case in the Supreme Court is Jaffe v. Samsung Electronics Co.
Ltd., 13-1324, U.S. Supreme Court (Washington). The circuit court
appeal is Jaffe v. Samsung Electronics Co. Ltd., 12-1802, U.S.
Court of Appeals for the Fourth Circuit (Richmond).
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.
QUANTUM FOODS: Oaktree Wants Fraud Claims Nixed From Sale Fight
---------------------------------------------------------------
Law360 reported that Raging Bull Acquisition Co. LLC, an Oaktree
Capital Management LP unit, pushed the Delaware bankruptcy court
to throw out claims accusing it of fraud in an adversary action
over the busted $54 million sale of meatpacker Quantum Foods LLC,
arguing the dispute is no more than a simple breach-of-contract
fight.
About Quantum Foods
Founded in 1990 and headquartered in Bolingbrook, Illinois,
Quantum Foods, LLC -- http://www.quantumfoods.com-- provides
protein products made from beef, poultry and pork.
Quantum Foods LLC and its affiliates sought Chapter 11 protection
(Bankr. D. Del. Lead Case No. 14-10318) on Feb. 18, 2014, to
facilitate the sale of substantially all their business to CTI
Foods Holding Co., LLC.
The Debtors' primary secured indebtedness totals $50.2 million,
owing to lenders led by Crystal Financial, LLC, as administrative
and collateral agent.
Quantum Foods is being advised in its restructuring by Daniel J.
McGuire, Esq., Gregory M. Gartland, Esq., and Caitlin S. Barr,
Esq., at Winston & Strawn as counsel; M. Blake Cleary, Esq.,
Kenneth J. Enos, Esq., and Andrew Magaziner, Esq., at Young,
Conaway, Stargatt & Taylor, LLP, serve as local counsel. City
Capital Advisors is the investment banker. FTI Consulting, Inc.
also serves as advisor. BMC Group is the claims and notice agent.
The U.S. Trustee for Region 3 appointed five members to the
official committee of unsecured creditors in the case. The
Committee is seeking to retain Triton Capital Partners, Ltd. as
financial advisor; and Mark D. Collins, Esq., Russell C.
Silberglied, Esq., Michael J. Merchant, Esq., Christopher M.
Samis, Esq., and Robert C. Maddox, Esq., at Richards, Layton &
Finger, P.A. as counsel.
Raging Bull is represented in the case by Van C. Durrer II, Esq.,
at Skadden Arps Slate Meagher & Flom LLP. Crystal Finance LLC is
represented by David S. Berman, Esq., at Riemer & Braunstein LLP.
QUICKSILVER RESOURCES: Quicksilver Energy Holds 18.5% Stake
-----------------------------------------------------------
In an amended Schedule 13D filed with the U.S. Securities and
Exchange Commission, Quicksilver Energy, L.P., and Pennsylvania
Management, LLC, disclosed that as of Oct. 6, 2014, they
beneficially owned 33,330,259 shares of common stock of
Quicksilver Resources Inc. representing 18.5 percent of the shares
outstanding.
As a member of Pennsylvania, Glenn Darden may be deemed to be the
beneficial owner of 33,330,259 shares of QRI common stock held by
QELP, which constitutes approximately 18.5% of the outstanding
shares of QRI common stock. Mr. Darden owns options to purchase
948,159 shares of QRI common stock that were vested or will vest
within 60 days of Oct. 6, 2014. Those options were issued to Mr.
Darden under QRI's equity plans. Together, with QELP's shares,
Mr. Darden's directly held shares, his options to purchase shares
of QRI common stock and his 401(k) plan shares represent 22.2% of
the total issued and outstanding shares of QRI.
As a member of Pennsylvania, Anne Darden Self may, pursuant to
Rule 13d-3 of the Act, be deemed to be the beneficial owner of
33,330,259 shares of QRI common stock held by QELP, which
constitutes approximately 18.5% of the outstanding shares of QRI
common stock. Ms. Self owns options to purchase 122,133 shares of
QRI common stock that were vested or will vest within 60 days of
Oct. 6, 2014. Those options were issued to Ms. Self under the
QRI's equity plans. Together, QELP's shares, Ms. Self's directly
held shares, her options to purchase shares of QRI common stock,
and her 401(k) plan shares represent 21.1% of the total issued and
outstanding shares of QRI.
A copy of the regulatory filing is available for free at:
http://is.gd/8QDUeJ
About Quicksilver
Quicksilver Resources Inc. is an exploration and production
company engaged in the development and production of long-lived
natural gas and oil properties onshore North America. Based in
Fort Worth, Texas, the company is widely recognized as a leader in
the development and production from unconventional reservoirs
including shale gas, and coal bed methane. Following more than 30
years of operating as a private company, Quicksilver became public
in 1999 and is listed on the New York Stock Exchange under the
ticker symbol KWK. The company has U.S. offices in Fort Worth,
Texas; Glen Rose, Texas; Steamboat Springs, Colorado; Craig,
Colorado and Cut Bank, Montana. The Company's Canadian
subsidiary, Quicksilver Resources Canada Inc., is headquartered in
Calgary, Alberta.
Quicksilver Resources posted net income of $161.61 million in 2013
following a net loss of $2.35 billion in 2012.
As of June 30, 2014, the Company had $1.05 billion in total
assets, $2.16 billion in total liabilities and a $1.11 billion
total stockholders' deficit.
* * *
As reported by the TCR on July 2, 2014, Standard & Poor's Ratings
Services revised its rating outlook on Fort Worth, Texas-based
Quicksilver Resources Inc. to negative from stable and affirmed
its 'CCC+' corporate credit rating on the company.
S&P said the outlook revision reflects S&P's expectation that
Quicksilver will continue to burn cash at a run-rate of about $20
million to $35 million per quarter, depleting its cash position
(as of Dec 31, 2013) of about $250 million over the next several
quarters. In addition, the company may face significant springing
debt maturities in October 2015 and January 2016, if more than
$100 million remains outstanding on its subordinated notes due
2016 (currently $350 million outstanding) as of Oct. 1, 2015.
Based on this significant repayment risk, S&P has revised its
assessment of Quicksilver's liquidity to "less than adequate" from
"adequate." However, S&P believes the company still has several
options to avoid the springing maturities, including strategic
transactions such as a joint venture for its major Horn River
Basin project.
QUICKSILVER RESOURCES: Thomas Darden Reports 22.5% Stake
--------------------------------------------------------
In a Schedule 13D filed with the U.S. Securities and Exchange
Commission, Thomas F. Darden, Jr., disclosed that as of Oct. 6,
2014, he beneficially owned 40,843,481 shares of common stock of
Quicksilver Resources Inc. representing 22.5 percent of the shares
outstanding. Mr. Darden currently serves as the co-founder and
chief executive officer of Vermilion Cliffs Partners, LLC. A copy
of the regulatory filing is available at http://is.gd/A49iuh
About Quicksilver
Quicksilver Resources Inc. is an exploration and production
company engaged in the development and production of long-lived
natural gas and oil properties onshore North America. Based in
Fort Worth, Texas, the company is widely recognized as a leader in
the development and production from unconventional reservoirs
including shale gas, and coal bed methane. Following more than 30
years of operating as a private company, Quicksilver became public
in 1999 and is listed on the New York Stock Exchange under the
ticker symbol KWK. The company has U.S. offices in Fort Worth,
Texas; Glen Rose, Texas; Steamboat Springs, Colorado; Craig,
Colorado and Cut Bank, Montana. The Company's Canadian
subsidiary, Quicksilver Resources Canada Inc., is headquartered in
Calgary, Alberta.
Quicksilver Resources posted net income of $161.61 million in 2013
following a net loss of $2.35 billion in 2012.
As of June 30, 2014, the Company had $1.05 billion in total
assets, $2.16 billion in total liabilities and a $1.11 billion
total stockholders' deficit.
* * *
As reported by the TCR on July 2, 2014, Standard & Poor's Ratings
Services revised its rating outlook on Fort Worth, Texas-based
Quicksilver Resources Inc. to negative from stable and affirmed
its 'CCC+' corporate credit rating on the company.
S&P said the outlook revision reflects S&P's expectation that
Quicksilver will continue to burn cash at a run-rate of about $20
million to $35 million per quarter, depleting its cash position
(as of Dec 31, 2013) of about $250 million over the next several
quarters. In addition, the company may face significant springing
debt maturities in October 2015 and January 2016, if more than
$100 million remains outstanding on its subordinated notes due
2016 (currently $350 million outstanding) as of Oct. 1, 2015.
Based on this significant repayment risk, S&P has revised its
assessment of Quicksilver's liquidity to "less than adequate" from
"adequate." However, S&P believes the company still has several
options to avoid the springing maturities, including strategic
transactions such as a joint venture for its major Horn River
Basin project.
RADIOSHACK CORP: Investors Acquire ABL Facility From GE Capital
---------------------------------------------------------------
RadioShack Corporation disclosed that it has entered into
definitive agreements to restructure a portion of its existing
debt, providing additional near-term liquidity and serving as a
first step in a stronger foundation for the Company's continued
business transformation.
Standard General LP and certain other investors have replaced GE
Capital as lead lender under RadioShack's senior secured asset
based credit facility which will allow immediate access to
additional liquidity. Other investors, including RadioShack
shareholders Standard General and Litespeed Management LLC, are
providing $120 million to be used to cash collateralize letters of
credit for the Company. In the coming months, this $120 million
is expected to be converted into equity. Current shareholders
will have the opportunity to participate in a rights offering at
same conversion price.
"We are pleased to complete this important step, which we believe
positions us to continue to progress our operational turnaround,"
said Joe Magnacca, RadioShack's chief executive officer. "We
recognize that we will need to address constraints under our
existing term loan in order to undertake a store base
consolidation program and pursue other measures to reduce our cost
structure. This amended ABL Facility provides time to pursue a
longer-term restructuring. To that end, we are in constructive
discussions with our term lenders, led by Salus Capital, toward
additional steps to recapitalize RadioShack.
"We look forward to continuing to serve our customers with
differentiated products and an upgraded shopping experience as we
move into the Holiday season."
The agreements include two key elements:
* ABL Facility - Standard General and certain other investors have
acquired the loans and agreed to changes affecting the credit
availability under RadioShack's existing ABL Facility. As a
result, RadioShack believes that it will have sufficient credit
capacity under the ABL Facility to fund its inventory build for
the Holiday season. Because borrowing availability under the
amended ABL Facility changes in March 2015, the Company expects
to seek to refinance the facility by that time. In addition,
the amended ABL Facility will be required to be refinanced if
the rights offering is not completed by March 15, 2015.
* New equity - The $120 million investment is expected to be
converted into equity securities representing (together with
related fees payable in equity securities) not less than 50% of
the Company's outstanding equity securities upon satisfaction of
certain conditions. These conditions include the modification
of a supplier contract, at least $100 million of available cash
and borrowing capacity at Jan. 15, 2015, development of a fiscal
2016 plan satisfying certain requirements and the completion of
a rights offering to existing RadioShack shareholders to
purchase equity securities at a price of $0.40 per common share
equivalent.
The percentage of equity securities that Standard General and
other investors will own as a result of this transaction will
depend upon the level of participation, if any, of existing
shareholders in the rights offering. If no shares were purchased
in the rights offering, existing shareholders would own 20% of
RadioShack's equity securities. The voting rights of any person
or group acquiring equity securities in the transaction would be
limited to 34.9% of the total voting power of the Company's voting
stock so long as greater voting power would accelerate Company
debt.
If the $120 million investment is converted into equity, the Board
will be reconstituted to consist of the Company's CEO, two
independent directors selected by RadioShack and four individuals
nominated by Standard General. The new directors must be approved
by the Company's corporate governance committee. At least two of
these directors must be independent.
RadioShack intends to initiate the rights offering late this year
or in early 2015. There can be no assurance that the rights
offering will be completed or that the other conditions to the
equity conversion will be satisfied, nor can the Company be
certain that it will be able to refinance borrowings under the
amended ABL Facility by March 2015.
NYSE Exemption
The stock issuances would normally require approval of
RadioShack's shareholders pursuant to the Shareholder Approval
Policy of the New York Stock Exchange. The audit and compliance
committee of RadioShack's Board of Directors determined that the
delay that would result from securing shareholder approval prior
to the completion of these stock issuances would seriously
jeopardize the financial viability of RadioShack. Because of that
determination, the audit and compliance committee, pursuant to an
exception provided in the Exchange's shareholder approval policy,
expressly approved RadioShack's omission to seek the shareholder
approval that would otherwise have been required under that
policy. The Exchange has accepted the Company's application of
the exception.
In conjunction with the rights offering, RadioShack intends to
initially issue equity securities that would be convertible,
subject to the satisfaction of all applicable conditions, into at
least 400 million shares (and up to 700 million shares) of common
stock. In reliance on the Exchange's shareholder approval
exception, RadioShack will notify its shareholders of its
intention to issue the shares without seeking their approval at
least ten days prior to the issuance of the shares.
Advisors
RadioShack's financial advisor is Peter J. Solomon Company and its
legal counsel is Jones Day. Lazard Feres and Co. is acting as the
financial advisor to RadioShack's Board of Directors. Debevoise &
Plimpton LLP is legal counsel to Standard General. Blank Rome LLP
advised investors of the ABL Facility.
Recapitalization and Investment Agreement
On Oct. 3, 2014, the Company entered into a Recapitalization and
Investment Agreement with General Retail Holdings L.P. The
Recapitalization Agreement provides for, among other things:
* The distribution by the Company to its stockholders of
transferrable rights to subscribe to purchase an aggregate of
150,000 shares of preferred stock of the Company, at a price
of $800.00 per share of Preferred Stock, during a specified
period of time. The Preferred Stock offered pursuant to the
Rights Offering will be convertible in the aggregate into 300
million shares of the common stock of the Company. The
purchase price payable for Preferred Stock upon the exercise
of the rights equates to $0.40 per share of Common Stock.
The rights will entitle the stockholders the option to
purchase their pro rata portion of the Preferred Stock
offered in the Rights Offering. The Rights Offering is
currently expected to be completed in the first quarter of
2015.
* The issuance by the Company to GRH of 150,000 shares of
Preferred Stock, which will be convertible into 300 million
shares of the Common Stock in exchange for (1) the
cancellation of outstanding letter of credit reimbursement
obligations to the extent the Company contemporaneously
reduces or terminates the commitments of GRH to issue (or
cause to be issued) letters of credit under the Amended ABL
Credit Agreement and (2) the right of the Company to receive
all amounts withdrawn by GRH from its cash collateral account
upon any reduction or termination by the Company of the
commitments of GRH to issue (or cause to be issued) letters
of credit under the terms of the Amended ABL Credit
Agreement. This purchase, which will be completed
concurrently with the completion of the Rights Offering, is
referred to as the "Sponsor Conversion."
* In consideration of GRH's obligations under the
Recapitalization Agreement, the Company will issue to GRH an
additional 50,000 shares of Preferred Stock, which will be
convertible into 100 million shares of the Common Stock,
concurrently with the completion of the Rights Offering and
the Sponsor Conversion.
Under the Recapitalization Agreement, the Company is obligated to
enter into a merger agreement with a newly formed, wholly owned
subsidiary of the Company and seek stockholder approval of the
merger promptly after the consummation of the Rights Offering.
The certificate of incorporation of the Company, as the surviving
corporation in the merger, would provide for an increased number
of authorized shares of Common Stock that is at least sufficient
to allow for conversion of all of the shares of Preferred Stock
and for a decrease in the Common Stock par value to $0.01 per
share.
The Recapitalization Agreement contains customary termination
provisions and may be terminated by either party if the
consummation of the Rights Offering and the Sponsor Conversion
does not occur on or before March 15, 2015.
A copy of the Company's Form 8-K report as filed with the U.S.
Securities and Exchange Commission is available for free at:
http://is.gd/OYVvfb
In an amended Schedule 13D filed with the U.S. Securities and
Exchange Commission, Standard General L.P. disclosed that as of
Oct. 3, 2014, it 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/0Zz4al
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.
REICHHOLD HOLDINGS: Meeting to Form Creditors Committee on Oct 14
-----------------------------------------------------------------
Roberta A. DeAngelis, United States Trustee for Region 3, will
hold an organizational meeting on Oct. 14, 2014, at 10:00 a.m. in
the bankruptcy case of Reichhold Holdings US, Inc. The meeting
will be held at:
The Doubletree Hotel
700 King Street
Wilmington DE 19801
The sole purpose of the meeting will be to form a committee or
committees of unsecured creditors in the Debtors' case.
The organizational meeting is not the meeting of creditors
pursuant to Section 341 of the Bankruptcy Code. A representative
of the Debtor, however, may attend the Organizational Meeting, and
provide background information regarding the bankruptcy cases.
To increase participation in the Chapter 11 proceeding, Section
1102 of the Bankruptcy Code requires that the United States
Trustee appoint a committee of unsecured creditors as soon as
practicable. The Committee ordinarily consists of the persons,
willing to serve, that hold the seven largest unsecured claims
against the debtor of the kinds represented on the committee.
Section 1103 of the Bankruptcy Code provides that the Committee
may consult with the debtor, investigate the debtor and its
business operations and participate in the formulation of a plan
of reorganization. The Committee may also perform other services
as are in the interests of the unsecured creditors whom it
represents.
About Reichhold
Founded in 1927, Reichhold, with its world headquarters and
technology center in Durham, North Carolina, USA, is one of the
world's largest manufacturer of unsaturated polyester resins and a
leading supplier of coating resins for the industrial,
transportation, building and construction, marine, consumer and
graphic arts markets. Reichhold -- http://www.Reichhold.com/--
has manufacturing operations throughout North America, Latin
America, the Middle East, Europe and Asia.
As of June 30, 2014, the Reichhold companies had consolidated
assets of $538 million and liabilities of $631 million. In 2013,
the companies generated $1.08 billion in net revenue, and as of
the year-to-date August 2014, $750 million in net revenues.
Reichhold Holdings US, Inc., Reichhold, Inc., and two U.S.
affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case
No. 14-12237) on Sept. 30, 2014.
The Reichhold Companies are pursuing a sale transaction that has
two elements:
(i) a consensual foreclosure by the holders of senior secured
notes on their security interests in the common and preferred
stock in Reichhold Holdings Luxembourg, S.a.r.l. ("RHL"), the
ultimate holding company of all of the non-debtor affiliates that
operate outside the U.S., and
(ii) a purchase of certain assets of the Debtors by Reichhold
Holdings International B.V. through a credit bid pursuant to
Section 363 of the Bankruptcy Code.
Cole, Schotz, Meisel, Forman & Leonard, P.A. (legal advisor) and
CDG Group LLC (financial advisor) are representing Reichhold, Inc.
Latham & Watkins LLP (legal advisor) and Moelis & Company
(investment banker) are serving Reichhold Industries, Inc.
Logan & Company is the company's claims and noticing agent.
The cases are assigned to Judge Mary F. Walrath.
RESIDENTIAL CAPITAL: Claim With 'Outrageous Invective' Nixed
------------------------------------------------------------
Bill Rochelle and Sherri Toub, bankruptcy columnists for Bloomberg
News, reported that U.S. Bankruptcy Judge Martin Glenn knocked out
claims against Residential Capital LLC by a person who called
himself a "state sovereign national." According to the report,
the claimant also said his name was copyrighted so that using it
in the title of court papers entitled him to $500,000 in damages
for infringement.
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: 4th Interim Order Authorizing DIP Financing Entered
-------------------------------------------------------------
Chief Judge Gloria M. Burns entered a fourth amended interim order
authorizing Revel AC, Inc., et al., to access postpetition
financing and use cash collateral.
The bankruptcy judge will consider final approval of the DIP
facility at a hearing scheduled for October 20, 2014, at 10:00
a.m. (EST) at the United States Bankruptcy Court for the District
of New Jersey.
A copy of the Fourth Amended Interim Order is available for free
at http://bankrupt.com/misc/Revel_4th_Interim_DIP_Order.pdf
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: Order on $110-Mil. Sale to Brookfield Entered
-------------------------------------------------------
New Jersey Chief Judge Gloria M. Burns has entered an order
approving the sale of Revel AC, Inc., et al.'s assets to
Brookfield US Holdings LLC for $110 million in cash plus certain
assumed liabilities and additional considerations.
On Sept. 24 and 30, 2014 and Oct. 1, 2014, the Debtors held the
auction at the office of the Debtors' counsel, White & Case LLP,
1155 Avenue of the Americas, New York, New York 10036.
The Debtors, after the conclusion of the auction, selected
Toronto-based Brookfield as the successful bidder, and the bid of
Glenn Straub's Polo North Country Club, Inc., as the back-up
bidder with a $95.4 million offer.
A copy of the sale order is available for free at:
http://bankrupt.com/misc/Revel_Sale_Order.pdf
Glenn Straub, owner of the Palm Beach Polo Golf and Country Club
in Wellington, Florida, challenged the results of the auction. He
said in a court filing that Revel breached an agreement to provide
details about competing bids, and that there was collusion between
the purchaser and the Debtor's counsel.
The Debtors' attorneys denied there was any oral agreement to
provide bidder information, and asked the Court at the Oct. 7 sale
hearing to deny the objections to the sale to Brookfield as Straub
failed to submit a higher offer at the auction.
"The Objection filed by Polo North is entirely baseless. Simply
put, Polo North (through its principal, Mr. Straub) is nothing
more than a disgruntled losing bidder who failed to outbid
Brookfield Brookfield as the winning bidder at the Auction
conducted by the Debtors in these Chapter 11 Cases," John K.
Cunningham, Esq., at White & Case LLP, said in a court filing.
According to Mr. Cunningham, a competitive auction developed
between Polo North and Brookfield. Several rounds of bidding
occurred with Polo North at one point submitting (and the
Debtors accepting) an increased bid of $95.4 million (up from Polo
North's original stalking horse bid of $90 million). He said that
the fact that Polo North bid at the Auction, then elected to stop
bidding at its last submitted $95.4 million bid, belies any
argument that the Auction was unfair or improper. In short,
Brookfield submitted an all-cash bid of $110 million that Polo
North simply chose not to top, he told the Court.
Mr. Cunningham explained that Polo North requested that the
Debtors adjourn the auction six days until Oct. 6, 2014 but the
Debtors opted not to delay the auction as Brookfied's last offer
of $110 million was contingent upon the acceptance of the bid as
the successful bid at or prior to 6:00 a.m. (prevailing Eastern
Time) on Oct. 1, 2014.
Glenn Straub's Polo North Country Club was represented by:
LAW OFFICES OF STUART J. MOSKOVITZ, ESQ.
Stuart J. Moskovitz
819 Highway 33
Freehold, New Jersey 07728
Tel: (732) 431-1413
E-mail: staurtj@moskovitz.org
Oct. 20 Hearing
According to the Sale Order, for the avoidance of doubt, the
trademarks owned by non-debtor Revel Group, LLC (the "Licensor")
and subject to that certain trademark license agreement by and
between debtor Revel Entertainment Group, LLC and the Licensor do
not constitute (i) assets of the Debtors or (ii) Purchased Assets;
provided, however, that nothing in the Sale Order will prevent the
Debtors from assuming and assigning the License Agreement to the
Buyer; provided, further, however, that any assumption and
assignment of the License Agreement will have no impact on any
liability associated with the use of the underlying trademarks
that occurs following the Closing Date.
The objections to assumption and assignment of the License
Agreement set forth in the limited objection of the Licensor are
fully preserved pending further order of the Court, and the Court
will hear and rule on such objections at the omnibus hearing
scheduled for October 20, 2014 at 10:00 a.m.
The Casino Reinvestment Development Authority filed a limited
objection to the sale for purposes of (a) confirming the continued
existence of a recorded restrictive covenant on the Debtors' real
property and (b) confirming that any lien that it may have for
unpaid assessments/taxes attaches to the proceeds of the sale.
The Court ruled that CRDA's objections are fully preserved pending
further order of the Court, and the Court shall hear and rule on
such objections at the omnibus hearing scheduled for Oct. 20.
The Court will also consider at the Oct. 20 hearing, the
objections filed by the parties concerning adequate assurance of
future performance and cure amounts with respect to executory
contracts and unexpired leases. The objectors included, ACR
Energy Partners, LLC, which is a party to an energy sales
agreement with Revel Entertainment Group, LLC, and real property
lease with NB Acquisitions, LLC.
Konami Equipment
Judge Burns' order also provides that pending further order of the
Court or consensual resolution among the parties, nothing in the
Sale Order or the Agreement will constitute approval of, or be
deemed or construed to permit, effect, or authorize the sale,
assumption and/or assignment of any of the following: (i) the
approximately 201 gaming machines that Revel Entertainment Group,
LLC financed from Konami Gaming, Inc. pursuant to Konami
Purchase Equipment Order #JD11-0058-S REV5, (ii) the Konami
Agreement, (iii) the non-exclusive and site specific license to
use the intellectual property embodied in or represented by
computer software, firmware, hardware, mechanical components, and
technical manuals related to the Konami Financed Equipment and the
design, artwork, names and marks contained in the Konami
Financed Equipment or supplied as spare parts, (iv) the Konami
Intellectual Property and/or (v) any of the Debtors' rights in
connection with or attendant to the Konami Financed Equipment, the
Konami Agreement and/or the Konami Intellectual Property.
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 Revel casino cost
$2.4 billion to build and never turned a profit. It closed Sept.
2, 2014, after just over two years of operation.
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.
RICEBRAN TECHNOLOGIES: Hires Marcum LLP as New Accountants
----------------------------------------------------------
Marcum LLP was appointed as the new independent registered public
accounting firm for RiceBran Technologies, according to a
regulatory filing with the U.S. Securities and Exchange
Commission.
Prior to engaging Marcum on Oct. 3, 2014, the Company said it has
not consulted Marcum regarding the application of accounting
principles to a specified transaction, completed or proposed, the
type of audit opinion that might be rendered on the Company's
financial statements or a reportable event, nor did the Company
consult with Marcum regarding any disagreements with the Company's
prior auditor.
Simultaneously with the appointment of Marcum, on Oct. 3, 2014,
BDO USA, LLP, was terminated as the independent registered public
accounting firm for the Company. The decision to change audit
firms from BDO to Marcum was approved by the Audit Committee of
the Company's Board of Directors.
The report of BDO on the financial statements of the Company as of
and for the years ended Dec. 31, 2012, and Dec. 31, 2013, did not
contain any adverse opinion or disclaimer of opinion, and was not
qualified or modified as to uncertainty, audit scope, or
accounting principle, other than expressing substantial doubt as
to the Company's ability to continue as a going concern.
During the Company's years ended Dec. 31, 2012, and 2013, and
through Oct. 3, 2014, there were no disagreements with BDO on any
matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure, which disagreements,
if not resolved to BDO's satisfaction, would have caused BDO to
make reference to the subject matter of the disagreement in its
reports on the Company's financial statements.
About RiceBran
Scottsdale, Ariz.-based RiceBran Technologies, a California
corporation, is a human food ingredient and animal nutrition
company focused on the procurement, bio-refining and marketing of
numerous products derived from rice bran.
RiceBran Technologies reported a net loss of $17.64 million on
$35.05 million of revenues for the year ended Dec. 31, 2013, as
compared with a net loss of $11.13 million on $37.72 million of
revenues for the year ended Dec. 31, 2012.
As of June 30, 2014, the Company had $54.31 million in total
assets, $32.13 million in total liabilities, $5.60 million in
temporary equity and $16.57 million in total equity attributable
to the Company's shareholders.
BDO USA, LLP, in Phoenix, Arizona, 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
resulting in an accumulated deficit of $219 million at Dec. 31,
2013. This factor among other things, raises substantial doubt
about its ability to continue as a going concern.
RITE AID: Inks Stock Trading Plan With Robert Thompson
------------------------------------------------------
Robert I. Thompson, executive vice president, Pharmacy of Rite Aid
Corporation, entered into a pre-arranged stock trading plan to
sell shares of Common Stock already owned by Mr. Thompson for
personal financial management purposes.
The Plan allows for the sale of a maximum of 149,231 shares of
Common Stock already owned by Mr. Thompson if the Common Stock
reaches a specified market price during the period from Dec. 22,
2014, and continuing until all 149,231 shares of Common Stock are
sold, or June 19, 2015, whichever occurs first.
The Plan was designed to comply with the guidelines specified in
Rule 10b5-1 promulgated under the Securities Exchange Act of 1934,
as amended, which permit persons to enter into a pre-arranged plan
for buying or selling Company stock at a time when such person is
not in possession of material, nonpublic information about the
Company. Mr. Thompson will continue to be subject to the
Company's stock ownership guidelines, and the sales contemplated
by the Plan will not reduce Mr. Thompson's ownership of Common
Stock below the levels required by the guidelines.
About Rite Aid Corp.
Drugstore chain Rite Aid Corporation (NYSE: RAD) --
http://www.riteaid.com/-- is a drugstore chain based in Camp
Hill, Pennsylvania.
Rite Aid disclosed net income of $118.10 million on $25.39 billion
of revenue for the year ended March 2, 2013, as compared with a
net loss of $368.57 million on $26.12 billion of revenue for the
year ended March 2, 2012.
The Company's balance sheet at Aug. 30, 2014, showed $6.95 billion
in total assets, $8.86 billion in total liabilities and a $1.90
billion total stockholders' deficit.
* * *
As reported by the TCR on March 1, 2013, Moody's Investors Service
upgraded Rite Aid Corporation's Corporate Family Rating to B3 from
Caa1 and Probability of Default Rating to B3-PD from Caa1-PD. At
the same time, the Speculative Grade Liquidity rating was revised
to SGL-2 from SGL-3. This rating action concludes the review for
upgrade initiated on Feb. 4, 2013.
As reported by the TCR on Oct. 2, 2013, Standard & Poor's Ratings
Services said it raised its ratings on Rite Aid Corp., including
the corporate credit rating, which S&P raised to 'B' from 'B-'.
In the April 21, 2014, edition of the TCR, Fitch Ratings has
upgraded its ratings on Rite Aid Corporation (Rite Aid), including
its Issuer Default Rating (IDR) to 'B' from 'B-'. The upgrades
reflect the material improvement in the company's operating
performance, credit metrics and liquidity profile over the past 24
months.
ROGER OCHSNER: Minn. Court Flips Ruling in Relco Dispute
--------------------------------------------------------
Relco Unisystems Corporation challenges the district court's grant
of summary judgment to its employee Roger Ochsner on his claim for
breach of a shareholder-redemption agreement, arguing that the
agreement contained an offset provision that allowed plaintiff
RELCO, LLC, to withhold payment for Ochsner's stock in the event
that he breached his noncompete or confidentiality agreements.
The Court of Appeals of Minnesota ruled Oct. 6 that Ochsner
effectively assigned the noncompete and confidentiality agreements
to RELCO, thereby allowing it to apply the offset provision.
"We reverse the grant of summary judgment and remand to the
district court to enter summary judgment in favor of Relco
Unisystems consistent with this opinion," the Appeals Court said.
In 2001, Relco Unisystems hired Ochsner as a sales engineer. Relco
Unisystems was engaged in manufacturing processing systems and
equipment for dairy, food, and pharmaceutical companies. During
his employment, Ochsner entered into a series of contracts with
Relco Unisystems. In 2001, Ochsner signed a confidentiality and
noncompete agreement. In 2005, he signed a five-year employment
agreement that incorporated the 2001 agreements and gave him the
option to purchase company stock. Ochsner purchased 1,499 shares
of company stock. In 2007, Relco Unisystems converted its business
from a corporation to a limited-liability company, under the name
of RELCO.
As a result of the corporate restructuring, Ochsner signed two
contracts in September 2007 in exchange for continued employment
with RELCO. The first contract changed any reference of Relco
Unisystems in Ochsner's employment agreement to RELCO. The second
contract stated that as of September 2007, Relco Unisystems and
RELCO were to be considered the same entity in the noncompete and
confidentiality agreements. That same month, Ochsner's employment
transferred from Relco Unisystems to RELCO, but his job duties,
pay, and benefits remained unchanged.
After Ochsner voluntarily left his employment with RELCO in
January 2010 to work for Custom Fabricating and Repair, Inc.
(CFR), he entered into a stock-redemption agreement with Relco
Unisystems to relinquish his outstanding shares of its stock in
exchange for $89,165.13 in two installment payments. The agreement
contained a promissory note that stated if Ochsner breached any of
the terms and provisions of the 2001 noncompete and
confidentiality agreements, Relco Unisystems could offset the
remaining balance it owed Ochsner for his stock. Relco Unisystems
paid Ochsner the first installment, but refused to pay the second
installment, plus interest, of $46,332.65 because it alleged that
he had breached the noncompete agreement as a result of his
employment at CFR and a subsidiary company.
In May 2011, RELCO filed suit against a number of former RELCO
employees, including Ochsner. RELCO's claims against Ochsner
included breach of contract, as it alleged that he had violated
the noncompete and confidentiality clauses of his employment
agreement. Prior to the jury trial, Ochsner filed a complaint
alleging that Relco Unisystems breached the stock-redemption
agreement when it failed to pay the second installment payment for
his stock. In December 2012, Ochsner moved for summary judgment.
RELCO opposed the motion, arguing that Ochsner's employment
agreement and its noncompete obligations had been assigned to
RELCO, and the offset provision allowed it to withhold payment for
Ochsner's stock because he had misappropriated RELCO's
confidential information during his employment with CFR.
The district court granted Ochsner's motion for summary judgment
and entered judgment against Relco Unisystems in the amount of
$46,332.65. The district court reasoned that Relco Unisystems and
RELCO were two separate and distinct entities, and RELCO did not
appear by word or reference in the promissory note or stock-
redemption agreement. Hence, the offset provision of the
promissory note did not apply to RELCO. The district court also
noted that RELCO's claim failed because Relco Unisystems did not
allege any damages from Ochsner's breach.
Following a nine-day trial in October 2013, a jury found Ochsner,
another former RELCO employee, CFR, and CFR's subsidiary jointly
and severally liable to RELCO for $22,780,000. The jury found
Ochsner personally liable to RELCO for $2,000,000 for breach of
contract.
In February 2014, Ochsner filed for Chapter 11 bankruptcy.
The appeal followed.
According to the Appeals Court, "In light of our opinion and the
jury's finding that Ochsner breached the confidentiality
agreements of his employment agreement with RELCO, we reverse the
district court's grant of summary judgment to Ochsner, and remand
to the district court so it may apply the offset of $46,332.65 in
accordance with this opinion and apply the amended judgment
against Ochsner."
A copy of the Appeals Court's decision is available at
http://is.gd/YfWeYBfrom Leagle.com.
The case is Roger Ochsner, Respondent, v. Relco Unisystems
Corporation, Appellant, and RELCO, LLC, Plaintiff, v. A. Kent
Keller, et al., Defendants, NO. A13-2399 (Minn. App.).
Dean A. LeDoux, Esq., and Meghann F. Kantke, Esq., at Gray, Plant,
Mooty, Mooty & Bennett, P.A., Minneapolis, Minnesota, represent
Relco Unisystems.
SAN JOAQUIN HILLS: Fitch Puts BB+ Debt Rating on Watch Positive
---------------------------------------------------------------
Fitch Ratings has assigned 'BBB-(EXP)' and 'BB+(EXP) expected
ratings with Stable Rating Outlooks to San Joaquin Hills
Transportation Corridor Agency (SJHTCA) proposed $761 million
senior and $240 million junior debt. The debit is being issued to
refinance approximately $1,137 million of the authority's existing
$2,055 million senior debt.
Fitch has also placed the 'BB' ratings on the authority's existing
debt on Rating Watch Positive. $1.038 billion of the existing
debt will be maintained within the proposed new debt structure.
The 'BBB-(EXP)' senior lien expected rating reflects the effect of
the smoother debt service profile following this debt
restructuring that, along with robust cash reserving, will leave
SJHTCA dependent on only modest revenue growth to service debt.
The 'BB+(EXP)' junior lien expected rating reflects its
subordination, leaving it more exposed to cash flow stress. The
Rating Watch Positive placed on the existing senior debt reflects
the potential upgrade for existing debt to be rolled into the new
structure once the restructuring is complete.
SJHTCA operates a 15-mile tolled stretch of State Road (SR) 73 in
Orange County, California, that provides congestion relief to the
parallel interstates 5 and 405 and Pacific Coast Highway toll-free
roads. California Department of Transportation (Caltrans) has
title to the road and is responsible for its upkeep. SJHTCA's
responsibilities are as set out in a cooperative agreement between
the two agencies and are limited to toll collection and staff
expenses until 2050.
KEY RATING DRIVERS
Revenue Risk - Volume: Midrange
Traffic Stabilizing Below Peak: SR73 serves as a congestion
reliever to interstates 405 and 5. Annual transactions have
remained broadly flat at around 25 million since fiscal year (FY)
2010, prior to which they had peaked at 31 million in FY2007.
Continuing improvement in the local economy as evidenced by
falling unemployment and recovering housing prices should support
traffic stability and modest growth.
Revenue Risk - Price: Weaker
Limited Pricing Power: The cash toll rate of $0.43 per mile is
among the highest among Fitch-rated US toll roads; Fitch believes
SJHTCA will have limited pricing power for the next few years,
although the ability to recover inflation should strengthen
thereafter.
Infrastructure Development & Renewal: Stronger
Limited Capital Needs: Caltrans is responsible for renewal and
maintenance of the road, with SJHTCA only responsible for
administrative and toll collection functions. Its exposure to
infrastructure risk is therefore limited.
Debt Structure: Senior - Midrange; Junior - Midrange
Escalating Debt Service Profile: Senior and junior debt is fixed
rate and amortizing. However, it is somewhat back-ended,
gradually escalating through FY2041. A strong cash reserve
structure helps mitigate this, as does significantly reduced
maximum annual debt service (MADS) as compared to the previous
structure.
Metrics
Consistent with Criteria: Fitch rating case senior debt service
coverage ratio (DSCR) (average 1.41x and minimum 1.22x) are in
line with criteria guidance for standalone toll facilities in the
BBB-category. The new debt structure requires significantly less
revenue growth over time in order to fully service debt, with
breakeven gross toll revenue compounded annual growth rates (CAGR)
being 1.56% and 1.77% at senior and junior levels respectively.
Peers
New Structure Positions Issuer In-Line with Peers: Project metrics
are broadly in line with standalone facility peers with senior
debt rated in the low-BBB category, such as Foothills/Eastern
Transportation Corridor Agency (F/ETCA) and E-470 Public Highway
Authority.
RATING SENSITIVITIES
Negative - Inability to Increase Tolls: SJTCA being unable to
implement inflationary toll increases without impacting traffic
would have a negative rating effect.
Negative - Increasingly Volatile Demand Profile: traffic demand
proving more volatile than expected would put ratings under
pressure.
Positive - Consistent Financial Outperformance: although near term
positive rating changes are unlikely, a sustained performance in
terms of debt metrics above Fitch's base case could lead to upward
rating pressure on senior lien debt.
TRANSACTION SUMMARY
The senior and junior series 2014 bonds are expected to refund all
callable series 1993 and 1997 bonds, with non-callable series 1997
bonds remaining in place and supported by a sinking fund. The
transaction is expected to close in November 2014. SJHTCA is
restructuring its debt to improve credit stability, currently
constrained by a sharp increase in annual debt service over the
period 2025-2035 that has effectively left the authority in the
position of needing to restructure its debt at some point between
now and that time. The current proposed restructuring extends and
smooths the agency's debt service profile, and should remove need
for further restructurings in the future. It reintroduces a rate
covenant of 1.30x on senior debt and introduces a new rate
covenant of 1.10x on junior debt respectively.
SJHTCA's ability to service debt is supported by a strong
reserving structure that envisages separate debt service reserve
funds (DSRF) at the senior (funded up to 100% of maximum annual
debt service) and junior (funded to the lower of 10% of initial
junior debt par, 100% of MADS or 125% of current period debt
service), a supplemental reserve account funded up to 50% of total
MADS (unfunded at close) as well as a $15 million use and
occupancy fund (fully funded at cloes) available, amongst other
things, to help meet extraordinary maintenance costs.
Despite a 10.2% increase in average toll rates, FY2014
transactions were 26.5MM, 5.91% higher YoY, and gross toll revenue
increased 16.5% to $117.1MM. FY2015 gross toll revenue is
projected to be $122.2MM though transactions are forecast to
decline 2.4% to 25.8MM. For the 2000-2014 period, gross toll
revenue grew at a 6.77% CAGR. Despite this, 2014 transactions were
essentially flat on 2000, with a transactions having experienced a
CAGR of -0.05% over the period. However, over the same period
average toll rates grew at a 6.82% CAGR. Over the intervening
period, transactions have followed the general direction of the
economy with declines in 2001, 2008, 2009, 2010, and 2013.
Transactions peaked at 31.1 million in 2007 before since
stabilizing at approximately 25.5 million annually. The overall
stagnant performance in terms of transactions over the period is
largely a result of the aggressive toll rate increases
implemented, which have served to prime the revenue pump to the
detriment of volume.
Ahead of the proposed restructuring, SJHTCA has obtained an
updated T&R forecast from Stantec Inc. (Stantec), which envisages
a gross toll revenue CAGR of approximately 3.2%, which Fitch views
as being relatively conservative in the context of historical
revenue performance on the toll road as well as continued regional
population growth. Fitch has adopted Stantec's T&R forecast in
its base case, which reflects more conservative assumptions with
respect to ancillary violation, fee and interest earnings income.
In the Fitch base case, the DSCR calculated excluding reserve
drawings averages 1.55x, with a minimum of 1.34x for senior debt,
and averages 1.33x with a minimum of 1.18x for junior debt.
In its rating case, Fitch has adopted a more conservative T&R
projection reflecting the prospect of slower traffic growth (CAGR
of 0.23%). In this scenario, senior DSCR averages 1.41x with a
minimum of 1.20x, while junior DSCR averages 1.22x with a minimum
of 1.15x. Further supporting Fitch's ratings is breakeven
analysis, which suggests that, under the proposed new debt
structure, SJHTCA will have only relatively limited dependence on
toll revenue growth, reflecting the strong cash reserve structure
available to support debt service. The breakeven gross toll
revenue CAGRs at senior and junior levels respectively are 1.56%
and 1.77%, considerably below most long term assumptions for
inflation of 2-2.5%.
SAN JOAQUIN HILLS: S&P Hikes Toll Road Rev Bonds Rating From BB-
----------------------------------------------------------------
Standard & Poor's Ratings Services raised its rating to 'BBB-'
from 'BB-' on the San Joaquin Hills Transportation Corridtor
Agency's (SJHTCA) outstanding 1993 and 1997 toll road revenue
bonds. At the same time Standard & Poor's assigned its 'BBB-'
long-term rating to SJHTCA's $761 million series 2014A senior lien
toll road refunding revenue bonds and a 'BB+' rating to the
SJHTCA's $240 million series 2014B junior lien toll road refunding
revenue bonds. The outlook on all ratings is stable.
"The raised rating is based on the plan of finance to restructure
the outstanding debt issued for the San Joaquin Hills toll road,"
said Standard & Poor's credit analyst Todd Spence. "If the agency
is not able to implement the restructuring as planned, we could
lower the rating," added Mr. Spence.
The raised rating reflects the planned restructured debt service
schedule, which increases from approximately $107 million in 2016
to approximately a peak of approximately $210 million in 2042.
The restructured maximum annual debt service (MADS) debt service
is significantly lower than the previous MADS of approximately
$270 million, and the annual rate of growth in debt service in the
early years, from 2016 to 2026, averages approximately 2.3%. The
restructured debt service extends the final maturity from 2042 to
2050.
SCIENTIFIC GAMES: Amends Credit Pact to Permit Bally Acquisition
----------------------------------------------------------------
Scientific Games Corporation and Bally Technologies, Inc.,
previously announced on Aug. 1, 2014, that they have entered into
a definitive merger agreement whereby Scientific Games has agreed
to acquire all of the outstanding Bally common stock for $83.30 in
cash per share, which represents a 38 percent premium to Bally's
closing stock price on July 31, 2014. The aggregate transaction
value is approximately $5.1 billion, including the refinancing of
approximately $1.8 billion of existing Bally net debt. The
transaction was unanimously approved by the boards of directors of
the two companies.
Completion of the Bally Acquisition remains subject to approval by
Bally's stockholders, receipt of certain gaming regulatory
approvals and other customary conditions. There can be no
assurance that the Bally Acquisition or the contemplated financing
will be completed.
On Oct. 1, 2014, Scientific Games amended its existing credit
agreement, dated as of Oct. 18, 2013, by and among Scientific
Games International, Inc., as borrower, Scientific Games, the
lenders and other agents from time to time party thereto, and Bank
of America, N.A., as administrative agent, collateral agent,
issuing lender and swingline lender, to, among other things:
(i) effective as of Oct. 1, 2014, permit the Bally Acquisition
and the transactions related thereto, including the
incurrence of term loans by SGMS Escrow Corp., a newly
formed, wholly owned subsidiary of Financing Sub; and
(ii) effective as of the consummation of the Bally Acquisition
(and the satisfaction of the other conditions contemplated
by the amendment), (A) increase its revolving credit
facility to $567,589,285, (B) permit Financing Sub to
assume the term loans under the Escrow Credit Agreement as
incremental term loans under the Credit Agreement and (C)
modify the financial covenant applicable to the revolving
credit facility under the Credit Agreement such that it
will be tested each quarter, irrespective of usage of that
revolving credit facility, at modified levels as described
in the Credit Agreement.
In addition, on Oct. 1, 2014, SGMS Escrow Corp. entered into an
escrow credit agreement by and among SGMS Escrow Corp., as
borrower, the lenders and other agents from time to time party
thereto, and Bank of America, N.A., as administrative agent. The
Escrow Credit Agreement provides for $2,000,000,000 of term loans,
the net proceeds of which are expected to provide a portion of the
funds to be used to finance the Bally Acquisition, and upon and in
connection with the consummation of the Bally Acquisition the term
loans under the Escrow Credit Agreement will be assumed by
Financing Sub and become incremental term loans under the Credit
Agreement.
The new term loans incurred under the Escrow Credit Agreement are
scheduled to mature on Oct. 1, 2021.
The term loans under the Escrow Credit Agreement amortize in equal
quarterly installments in an amount equal to 1.00% per annum of
the stated principal amount thereof, with the remaining balance
due at final maturity. Interest on the new term loans is payable
at a rate equal to the eurodollar (LIBOR) rate or the base rate,
plus an applicable margin, in each case, subject to a eurodollar
(LIBOR) rate floor of 1.00% or a base rate floor of 2.00%, as
applicable. The applicable margin for the incremental term loans
(under the Escrow Credit Agreement and, when assumed by Financing
Sub, the Credit Agreement) is 5.00% per annum for eurodollar
(LIBOR) loans and 4.00% per annum for base rate loans.
As a result of the amendment of the Credit Agreement, the
applicable margin for the existing term loans under the Credit
Agreement (i) prior to the consummation of the Bally Acquisition,
will remain as 3.25% per annum for eurodollar (LIBOR) loans and
2.25% per annum for base rate loans, and (ii) from and after the
consummation of the Bally Acquisition, will be 5.00% per annum for
eurodollar (LIBOR) loans and 4.00% per annum for base rate loans.
There will be no change to the borrowing rate applicable to loans
borrowed or to letters of credit issued under the revolving credit
facility after the consummation of the Bally Acquisition.
Borrowings under the Escrow Credit Agreement are solely the
obligation of SGMS Escrow Corp., are not guaranteed by Scientific
Games or any of its other subsidiaries, and are secured by a
pledge of amounts deposited into a secured escrow account of SGMS
Escrow Corp. In the event that the Bally Acquisition is not
consummated, SGMS Escrow Corp. will repay amounts borrowed under
the Escrow Credit Agreement, plus accrued interest thereon, with
amounts deposited into a secured escrow account of SGMS Escrow
Corp. and other amounts that may be contributed by Scientific
Games and its other subsidiaries to SGMS Escrow Corp. and
deposited into that escrow account from time to time. Borrowings
under the Credit Agreement (including the incremental term loans,
after they are assumed by Financing Sub) are guaranteed by
Scientific Games and each of Scientific Games' current and future
direct and indirect wholly owned domestic subsidiaries (other than
Financing Sub), subject to certain customary exceptions as set
forth in the Credit Agreement.
Certain of the lenders under the Credit Agreement and the Escrow
Credit Agreement or their affiliates have provided, and may in the
future provide, various financial advisory, investment banking,
cash management, commercial banking, and other services to
Scientific Games and its subsidiaries, for which they have
received, and may in the future receive, customary fees.
About Scientific Games
Scientific Games Corporation is a developer of technology-based
products and services and associated content for worldwide gaming
and lottery markets. The Company's portfolio includes instant and
draw-based lottery games; electronic gaming machines and game
content; server-based lottery and gaming systems; sports betting
technology; loyalty and rewards programs; and social, mobile and
interactive content and services. For more information, please
visit: www.scientificgames.com.
As of June 30, 2014, the Company had $4.18 billion in total
assets, $3.95 billion in total liabilities and $225.9 million in
total stockholders' equity. Scientific Games reported a net loss
of $30.2 million in 2013, a net loss of $62.6 million in 2012 and
a net loss of $12.6 million in 2011.
* * *
The TCR reported on May 21, 2014, that Moody's Investors Service
downgraded Scientific Games Corporation's ("SGC") Corporate Family
Rating to B1. The downgrade reflects Moody's view that slower
than expected growth in SGC's Gaming and Instant Products segments
will cause Moody's adjusted leverage to exceed 6.0 times by the
end of 2014.
As reported by the TCR on Aug. 5, 2014, Standard & Poor's Ratings
Services lowered its corporate credit rating to 'B+' from 'BB-' on
Scientific Games Corp.
"The downgrade and CreditWatch placement follow Scientific Games'
announcement that it has agreed to acquire Bally Technologies for
$5.1 billion, including the refinancing of about $1.8 billion in
net debt at Bally," said Standard & Poor's credit analyst Ariel
Silverberg.
SEARS HOLDINGS: Files Registration Statement for Rights Offering
----------------------------------------------------------------
Sears Holdings Corporation announced that a preliminary short form
prospectus has been filed in Canada with the Ontario Securities
Commission and a Registration Statement on Form F-10 has been
filed in the United States with the Securities and Exchange
Commission relating to the previously announced rights offering of
up to 40,000,000 common shares of Sears Canada Inc. The
subscription rights are expected to be distributed to all of the
Company's stockholders of record as of Oct. 16, 2014, and the
rights will have a subscription price of U.S. $9.50 per whole
share of Sears Canada. As previously announced, the subscription
price is equal to the closing price (converted from Canadian to
U.S. dollars) of the Common Shares on Sept. 26, 2014, the last
trading day before the Company's Board of Directors requested
Sears Canada's cooperation with the filing of a prospectus
regarding the Rights Offering. Each stockholder as of the record
date will be able to participate in the rights offering on an
equal and pro rata basis. The subscription rights will be
transferable. The expected record date of Oct. 16, 2014, is four
days earlier than the date that the Company previously announced.
Sears Holdings has applied to list the subscription rights on the
NASDAQ Stock Market under the symbol "SRSCR." Listing will be
subject to Sears Holdings fulfilling all of the requirements of
that exchange. However, NASDAQ will not list the subscription
rights unless Sears Canada's common shares are also listed for
trading on NASDAQ. Sears Canada has made application to list its
common shares on NASDAQ under the symbol "SRSC," but there can be
no guarantee that such listing application will be accepted prior
to the commencement of the rights offering, and listing will be
subject to Sears Canada fulfilling all of the requirements of that
exchange.
About Sears
Sears Holdings Corporation (NASDAQ: SHLD) --
http://www.searsholdings.com/-- is an integrated retailer focused
on seamlessly connecting the digital and physical shopping
experiences to serve members. Sears Holdings is home to Shop Your
Waytm, a social shopping platform offering members rewards for
shopping at Sears and Kmart as well as with other retail partners
across categories important to them.
The company operates through its subsidiaries, including Sears,
Roebuck and Co. and Kmart Corporation, with more than 2,000 full-
line and specialty retail stores in the United States and Canada.
Kmart Corporation and 37 of its U.S. subsidiaries filed voluntary
Chapter 11 petitions (Bankr. N.D. Ill. Lead Case No. 02-02474) on
Jan. 22, 2002. Kmart emerged from chapter 11 protection on May 6,
2003, pursuant to the terms of an Amended Joint Plan of
Reorganization. Skadden, Arps, Slate, Meagher & Flom, LLP,
represented Kmart in its restructuring efforts. Its balance sheet
showed $16,287,000,000 in assets and $10,348,000,000 in debts when
it sought chapter 11 protection.
Kmart bought Sears, Roebuck & Co., for $11 billion to create the
third-largest U.S. retailer, behind Wal-Mart and Target, and
generate $55 billion in annual revenues. Kmart completed its
merger with Sears on March 24, 2005.
Sears Holdings reported a net loss of $1.36 billion in 2013, a net
loss of $930 million in 2012 and a net loss of $3.14 billion in
2011. As of Aug. 2, 2014, Sears Holdings had $16.43 billion in
total assets, $15.51 billion in total liabilities and $919 million
in total equity.
* * *
Moody's Investors Service in January 2014 downgraded Sears
Holdings Corporate Family Rating to Caa1 from B3. The rating
outlook is stable.
The downgrade reflects the accelerating negative performance of
Sears' domestic business with comparable sales falling 7.4% for
the quarter to date ending January 6th, 2014 compared to the prior
year. The company now expects domestic Adjusted EBITDA to decline
to a range of ($80 million) to $20 million for the fourth fiscal
quarter, compared with $365 million in the year prior period. For
the full year, Sears expects domestic Adjusted EBITDA loss between
$(308) million and $(408) million, as compared to $557 million
last year. Moody's expects full year cash burn (after capital
spending, interest and pension funding) to be around $1.2 billion
in 2013 and we expect Sears' cash burn to remain well above $1
billion in 2014. "Operating performance for fiscal 2013 is
meaningfully weaker than our previous expectations, and we expect
negative trends in performance to persist into 2014" said Moody's
Vice President Scott Tuhy. He added "While Sears noted improved
engagement metrics for its "Shop Your Way" Rewards program,
Moody's remains uncertain when these improved engagement metrics
will lead to stabilization of operating performance."
As reported by the TCR on March 26, 2014, Standard & Poor's
Ratings Services affirmed its ratings on the Hoffman Estate, Ill.-
based Sears Holdings Corp., including the 'CCC+' corporate credit
rating.
Fitch Ratings had downgraded its long-term Issuer Default Ratings
(IDR) on Sears Holdings Corporation (Holdings) and its various
subsidiary entities (collectively, Sears) to 'CC' from 'CCC',
according to a TCR report dated Sept. 12, 2014.
SHIVA-OM INC: Case Summary & 11 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Shiva-Om Inc.
dba Escondido Lodge
2650 S. Escondido Blvd.
Escondido, CA 92025
Case No.: 14-08030
Chapter 11 Petition Date: October 8, 2014
Court: United States Bankruptcy Court
Southern District of California (San Diego)
Judge: Hon. Margaret M. Mann
Debtor's Counsel: Andrew H. Griffin, III, Esq.
LAW OFFICES OF ANDREW H. GRIFFIN, III
275 East Douglas Avenue, Suite 112
El Cajon, CA 92020
Tel: 619-440-5000
Fax: 619-440-5991
Email: Griffinlaw@mac.com
Total Assets: $2.67 million
Total Liabilities: $3.51 million
The petition was signed by Ketan Patel, chief financial officer.
A list of the Debtor's 11 largest unsecured creditors is available
for free at http://bankrupt.com/misc/casb14-08030.pdf
SOLAR POWER: Agrees to Issue 31.7 Million Common Shares
-------------------------------------------------------
Solar Power, Inc., on Oct. 7, 2014, entered into a purchase
agreement with Smart Range Investments Limited whereby the Company
agreed to issue, and Smart Range agreed to purchase, 21,739,500
shares of common stock of the Company, par value US$0.0001 per
share for an aggregate purchase price of US$30,000,510, pursuant
to the terms of the Smart Range Purchase Agreement and subject to
customary closing conditions.
On Oct. 7, 2014, the Company entered into a Purchase Agreement
with Signet Worldwide Limited whereby the Company agreed to issue,
and Signet Worldwide agreed to purchase 10,000,000 Common Shares
for an aggregate purchase price of US$13,800,000, pursuant to the
terms of the Signet Worldwide Purchase Agreement and subject to
customary closing conditions.
About Solar Power
Roseville, Cal.-based Solar Power, Inc., is a global solar
energy facility ("SEF") developer offering its own brand of high-
quality, low-cost distributed generation and utility-scale SEF
development services. Primarily, the Company works directly with
and for developers around the world who hold large portfolios of
SEF projects for whom it serves as an engineering, procurement and
construction contractor. The Company also performs as an
independent, turnkey SEF developer for one-off distributed
generation and utility-scale SEFs.
Solar Power reported a net loss of $32.24 million in 2013
following a net loss of $25.42 million in 2012. As of June 30,
2014, the Company had $72.84 million in total assets, $56.85
million in total liabilities and $15.99 million in total
stockholders' equity.
Crowe Horwath LLP, in San Francisco, California, issued a "going
concern" qualification on the consolidated financial statements
for the year ended Dec. 31, 2013. The independent auditors noted
that the Company has incurred a current year net loss of $32.2
million, has an accumulated deficit of $56.1 million, has
experienced a significant reduction in working capital, has past
due related party accounts payable and a debt facility under which
a bank has declared amounts immediately due and payable.
Additionally, the Company's parent company LDK Solar Co., Ltd has
experienced significant financial difficulties including the
filing of a winding up petition on Feb. 24, 2014. These matters
raise substantial doubt about the Company's ability to continue as
a going concern.
SOLAR POWER: Intends to Buy 7.4 Billion of Guocang Shares
---------------------------------------------------------
Solar Power, Inc., entered into a memorandum of understanding with
Evergrande Real Estate Group Limited, and Guocang Group Limited,
whereby each of the Company and Evergrande contemplated to
subscribe for and purchase 7,464,114,830 Guocang Shares and
30,813,397,130 Guocang Shares, respectively, and Guocang
contemplated to allot and issue the SPI Subscription Shares to the
Company and the Evergrande Subscription Shares to Evergrande, at
approximately HK$0.03135 per Guocang Share and for an aggregate
purchase price of HK$1,200 million pursuant to the terms and
conditions as set out in the MOU. If the Subscription
materializes according to the terms of the MOU, each of the
Company and Evergrande will own approximately 17.83% and 73.59%,
respectively, of the equity interest in Guocang immediately
following the closing of the Subscription.
Under the terms and conditions of the MOU:
(i) the proceeds of the Subscription will be applied by Guocang
for the development of solar energy business;
(ii) each of the Company, Evergrande and Guocang agreed not to,
and to procure their respective affiliates not to, solicit,
initiate or encourage inquiries or offers from, or initiate
or continue discussion with or furnish any information to,
or enter or agree to enter into any formal or informal,
written or verbal agreement or statement of intent or
understanding or arrangement with any person other than the
other parties to the MOU, for a period of 60 days from the
date of the MOU, with respect to any transactions similar
to the issuance of Guocang Shares or the subscription of
new shares in a listed issuer in Hong Kong which will apply
the proceeds raised in the subscription to the development
of solar energy business;
(iii) each of the Company, Evergrande and Guocang agreed to
negotiate in good faith and facilitate the entry into a
definitive subscription agreement within 60 days from the
date of the MOU or on a later date as determined by the
parties thereto;
(iv) if any beneficial shareholder of Guocang, directly or
indirectly, solicits, initiates or encourages inquiries or
offers from, or initiates or continues negotiations with or
furnishes any information to, or enters or agrees to enter
into any formal or informal, written or verbal agreement or
statement of intent or understanding with any person with
respect to the transfer of any Guocang Shares, and such
contemplated transfer may cause change of control in
Guocang, either the Company or Evergrande will have the
rights to terminate the MOU and any of its obligations
thereunder;
(v) each party to the MOU will be responsible for the costs
incurred by itself in connection with the preparation of
the MOU and the definitive subscription agreement, as well
as the completion of the Subscription; and
(vi) the MOU is governed by the laws of Hong Kong, and each
party to the MOU agreed to submit to the non-exclusive
jurisdiction of the courts of Hong Kong.
The MOU is binding to the parties thereto with respect to, among
other things, the Subscription Price, the number of the
Subscription Shares, exclusivity, confidentiality, costs, and
governing law and jurisdiction provision.
A full-text copy of the Form 8-K report as filed with the U.S.
Securities and Exchange Commission is available for free at:
http://is.gd/JUx7XD
About Solar Power
Roseville, Cal.-based Solar Power, Inc., is a global solar
energy facility ("SEF") developer offering its own brand of high-
quality, low-cost distributed generation and utility-scale SEF
development services. Primarily, the Company works directly with
and for developers around the world who hold large portfolios of
SEF projects for whom it serves as an engineering, procurement and
construction contractor. The Company also performs as an
independent, turnkey SEF developer for one-off distributed
generation and utility-scale SEFs.
Solar Power reported a net loss of $32.24 million in 2013
following a net loss of $25.42 million in 2012. As of June 30,
2014, the Company had $72.84 million in total assets, $56.85
million in total liabilities and $15.99 million in total
stockholders' equity.
Crowe Horwath LLP, in San Francisco, California, issued a "going
concern" qualification on the consolidated financial statements
for the year ended Dec. 31, 2013. The independent auditors noted
that the Company has incurred a current year net loss of $32.2
million, has an accumulated deficit of $56.1 million, has
experienced a significant reduction in working capital, has past
due related party accounts payable and a debt facility under which
a bank has declared amounts immediately due and payable.
Additionally, the Company's parent company LDK Solar Co., Ltd has
experienced significant financial difficulties including the
filing of a winding up petition on Feb. 24, 2014. These matters
raise substantial doubt about the Company's ability to continue as
a going concern.
SIGA TECHNOLOGIES: Court Partially Lifts Stay of ParmAthene Suit
----------------------------------------------------------------
PharmAthene, Inc. on Oct. 8 disclosed that the United States
Bankruptcy Court for the Southern District of New York has
partially lifted the stay of PharmAthene's litigation against SIGA
Technologies, Inc., in the Delaware Court of Chancery. The order
allows the Chancery Court to issue a final judgment and the
parties to pursue appeals thereof. Enforcement of any judgment,
once entered will remain subject to the Bankruptcy Court stay.
Separately, the Company also disclosed that the United States
Trustee has selected PharmAthene to serve on the Official
Committee of Unsecured Creditors of SIGA Technologies, Inc.,
debtor-in-possession. As a member of the Committee, PharmAthene
will play an active role in the bankruptcy proceedings.
In its filings with the Bankruptcy Court, SIGA indicated that it
expects to continue to perform under its contract with the
Biomedical Advanced Research and Development Authority (BARDA) and
is eligible to receive up to an additional $211.5 million in
revenue under this contract, in addition to the $198 million it
has already received.
A copy of the Delaware Court's opinions including the present
decision and order in the case are available on PharmAthene's Web
site at http://www.pharmathene.com/under the "Investor Relations"
tab.
About PharmAthene
PharmAthene -- http://www.PharmAthene.com-- is engaged in the
development and commercialization of next generation medical
countermeasures against biological and chemical threats.
PharmAthene's current biodefense portfolio includes the following
product candidates:
SparVax(R) -- a next generation recombinant protective antigen
(rPA) anthrax vaccine rBChE bioscavenger -- a medical
countermeasure for nerve agent poisoning by organophosphorous
compounds, including nerve gases and pesticides Valortim(R) -- a
fully human monoclonal antibody for the prevention and treatment
of anthrax infection.
About SIGA Technologies
Publicly held SIGA Technologies, Inc., with headquarters in
Madison Avenue, New York, is a biotech/pharmaceutical company that
specializes in the development and commercialization of solutions
for serious unmet medical needs and biothreats. SIGA's lead
product is Tecovirimat, also known as ST-246, an orally
administered antiviral drug that targets orthopoxviruses.
SIGA sought Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case
No. 14-12623) on Sept. 16, 2014, in Manhattan. The case is
assigned to Judge Sean H. Lane.
The Debtor has tapped Weil, Gotshal & Manges LLP, as counsel, and
Prime Clerk LLC as claims agent.
According to the docket, the schedules of assets and liabilities
and the statement of financial affairs are due Sept. 30, 2014.
The Debtor's Chapter 11 plan and disclosure statement are due Jan.
14, 2015. The initial case conference is due by Oct. 16, 2014.
As of June 30, 2014, SIGA reported consolidated assets and
liabilities of $209 million and $198 million, respectively. The
amount of reported liabilities does not include any amount
attributable to the lawsuit filed by PharmAthene, Inc. A total of
$2.50 million is outstanding on a secured term loan with General
Electric Capital Corp. Trade payables total $3.3 million.
SOUNDVIEW ELITE: Files Schedules of Assets and Liabilities
----------------------------------------------------------
Soundview Elite Ltd. and its debtor-affiliates filed their summary
of schedules of assets and liabilities in the U.S. Bankruptcy
Court for the Southern District of New York, disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property
B. Personal Property $20,703,641
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims
E. Creditors Holding
Unsecured Priority
Claims
F. Creditors Holding
Unsecured Non-priority
Claims $16,402,671
----------- -----------
TOTAL $20,703,641 $16,402,671
A full-text copy of the Debtors' schedules is available for free
at http://is.gd/P7XFhz
About Soundview Elite
Six mutual funds originally created by Citco Group of Cos.,
including Soundview Elite Ltd., filed petitions for Chapter 11
protection on Sept. 24, 2013, in Manhattan to avoid undergoing
bankruptcy liquidation in the Cayman Islands, where they are
incorporated.
The funds are Soundview Elite (Bankr. S.D.N.Y. Case No. 13-13098)
Soundview Premium, Ltd. (Case No. 13-13099); Soundview Star Ltd.
(Case No. 13-13101); Elite Designated (Case No. 13-13102); Premium
Designated (Case No. 13-13103); and Star Designated (Case No.
13-13104). The petitions were signed by Floyd Saunders as
corporate secretary. By order dated Oct. 16, 2013, the Court
directed that the Debtors' bankruptcy cases be procedurally
consolidated and jointly administered.
SoundView Elite Ltd. and two similarly named funds were the target
of a winding-up petitions in the Cayman Islands filed in August by
Citco, which had sold its interest in the funds' manager years
before. An investor, who was removed from the funds' board in
June, filed a different winding-up petition in August, aimed at
three funds created later to hold illiquid assets.
Soundview Elite estimated assets and debts of at least $10
million. The funds said in a court filing their total cash assets
of about $20 million are held in the U.S., where the funds are
managed. Court papers list the funds' total assets as $52.8
million, against debt totaling $28 million.
Judge Robert E. Gerber presides over the U.S. cases.
Warren J. Martin, Jr., Esq., Mark J. Politan, Esq., Terri Jane
Freedman, Esq., and Rachel A. Segall, Esq., at Porzio, Bromberg &
Newman, PC, serve as the Debtors' counsel. CohnReznick LLP serves
as financial advisor.
Peter Anderson and Matthew Wright, as Joint Official Liquidators
of the Debtors, are represented in the U.S. proceedings by John A.
Pintarelli, Esq., James J. Beha, II, Esq., William H. Hildbold,
Esq., at Morrison & Foerster LLP.
The U.S. Trustee solicited for the formation of an official
committee of unsecured creditors, but to date one has not been
formed.
SPECIALTY PRODUCTS: RPM Reports $99.1MM Net Income in Q1 of 2014
----------------------------------------------------------------
RPM International Inc. on Oct. 8 said that unusually strong
performance in its prior-year first quarter dampened comparative
results for the fiscal 2015 first quarter ended August 31, 2014,
but that the company is maintaining its full-year earnings
guidance for fiscal 2015 issued July 28, 2014. Full-year guidance
for the fiscal year ending May 31, 2015 anticipates growth in
diluted earnings per share of 9% to 11%, or a range of $2.38 to
$2.42 per diluted share.
First-Quarter Results
Fiscal 2015 first-quarter net sales of $1.204 billion increased
3.4% over the $1.165 billion reported a year ago. RPM's
consolidated earnings before interest and taxes (EBIT) declined
0.2% to $163.7 million from $164.0 million reported in the fiscal
2014 first quarter. First-quarter net income declined 3.9% to
$99.1 million from $103.1 million in the year-ago period, and
diluted earnings per share declined 5.2% to $0.73 from $0.77 in
the fiscal 2014 first quarter.
"As we announced in an 8-K filing on September 4, 2014, we
anticipate that quarterly results during fiscal 2015 will follow a
different pattern compared to fiscal 2014, particularly in the
first quarter. During last year's first quarter, our Synta and
Kirker subsidiaries had exceptionally strong performance due to
highly successful new product introductions and distribution
expansion since being acquired by RPM," stated Frank C. Sullivan,
chairman and chief executive officer. "We expect to resume
improved financial performance for the remainder of this fiscal
year."
Non-recurring costs in this year's first quarter totaled $5.6
million pre-tax, and were related primarily to legal expenses
incurred in conjunction with a Securities and Exchange Commission
investigation of timing of expense accruals in the 2013 fiscal
year, which did not affect full-year earnings, along with the
proposed Specialty Products Holding Corp. (SPHC) settlement, and a
voluntary self-disclosure agreement with the state of Delaware for
unclaimed property.
First-Quarter Segment Sales and Earnings
RPM's consumer segment, which includes both the Kirker and Synta
business units, reported a 0.8% decrease in sales to $430.0
million from $433.4 million in the fiscal 2014 first quarter.
Organic sales declined 2.0%, including favorable foreign exchange
of 0.1%, while acquisition growth contributed 1.2%. Consumer
segment EBIT declined 7.3% to $76.7 million from $82.7 million in
the fiscal 2014 first quarter.
"While performance for both Kirker and Synta during the first
quarter of fiscal 2015 was down significantly from the prior year,
the balance of our consumer segment showed a sales increase in the
mid-single digits, with EBIT growth in the mid-teens, which is
consistent with continued market share gains, and the recovery in
the U.S. housing market," stated Mr. Sullivan. "Clearly, the
tough comparisons to last year for Synta and Kirker had a
significant impact on the segment's overall performance this
quarter."
The company's industrial segment net sales improved 5.8%, to
$773.9 million from $731.2 million reported a year ago, with 4.5%
in organic growth, including 0.1% in favorable foreign exchange,
while acquisitions added 1.3%. Industrial segment EBIT grew 5.0%
to $105.1 million from $100.1 million in the fiscal 2014 first
quarter.
"We continue to see improvement in the U.S. commercial
construction market, which is reflected in solid sales growth in
concrete admixtures, commercial sealants and industrial and
commercial polymer flooring. In Europe, growth has been more
modest in comparison to the rebound in performance last year, as
anticipated," stated Sullivan.
Cash Flow and Financial Position
During the fiscal 2015 first quarter, cash from operations was a
negative $125.2 million compared to a negative $129.5 million a
year ago. Capital expenditures were $12.1 million in the quarter,
compared to $10.7 million in the year-ago period. Depreciation
was $15.0 million during the first quarter of fiscal 2015,
compared to $14.4 million for the same period last year.
Total debt at August 31, 2014 of $1.5 billion compares to $1.4
billion at May 31, 2014 and $1.4 billion at the end of last year's
first quarter. Net (of cash) debt-to-total capital was 46.6%,
versus 49.1% at the end of last year's first quarter and 42.4% at
the end of the prior fiscal year. Liquidity, including cash, was
$893 million, compared to $896 million a year ago and $1.1 billion
at May 31, 2014.
"RPM's strong cash and liquidity position enables us to continue
our support of a growing cash dividend, our acquisition program,
and the first installment of $450 million to fund the 524(g) trust
as part of the SPHC settlement anticipated later this fiscal
year," Mr. Sullivan stated. "RPM's debt-to-total capital ratio
remains within our traditional range, and we continue to pursue
acquisitions that complement our core growth strategies."
SPHC Files Plan of Reorganization
On September 26, 2014, SPHC filed its plan of reorganization in
Delaware Bankruptcy Court. The plan memorializes the settlement
in principle reached with representatives of current and future
asbestos claimants. The financial terms of that settlement were
previously disclosed in an investor communication of July 28,
2014. As previously reported, on the effective date of the plan,
a trust will be established to resolve all current and future
Bondex asbestos claims, an injunction will be issued by the court
that will permanently protect SPHC, RPM International Inc., their
affiliates, and other parties from current and future asbestos
claims, and SPHC will emerge from bankruptcy and will be
reconsolidated with RPM. RPM currently anticipates that the
plan's effective date and the reconsolidation of SPHC's financial
results will occur in RPM's fiscal 2015 third quarter (December
2014 ? February 2015), but the actual timeline could change based
on a variety of factors beyond the control of SPHC and RPM. The
impact of the completion of this transaction on RPM's 2015 fiscal
year will be dependent on specific timing and related transaction
costs. On an annualized basis, SPHC has revenues of approximately
$400 million.
"We look forward to plan confirmation for SPHC and its emergence
from bankruptcy. While the amounts required to fund a 524(g)
trust are substantial from a financial perspective, this
transaction will be good for RPM shareholders, both in terms of
our ongoing operations and as a process which will bring finality
to the Bondex asbestos liability. On a reconsolidated basis,
excluding estimated transaction costs, we believe that RPM will be
in a position to deliver $2.70 to $2.90 in diluted earnings per
share for the fiscal year ending May 31, 2016. We hope to be in a
position to provide greater detail on both the impact of the SPHC
reconsolidation on fiscal 2015 and our guidance for fiscal 2016
when we talk to investors during our second quarter earnings
conference call in January 2015," stated Mr. Sullivan.
Business Outlook
"Our full-year outlook for fiscal 2015 remains the same as
previously announced, with industrial sales increasing 6% to 8%,
consumer sales increasing 5% to 7% and consolidated sales
increasing 6% to 8%, which is expected to translate into net
income and diluted earnings per share growth over the prior year
of 9% to 11%, or $2.38 to $2.42," Mr. Sullivan stated.
About Specialty Products
Cleveland, Ohio-based Specialty Products Holdings Corp., aka RPM,
Inc., is a wholly owned subsidiary of RPM International Inc. The
Company is the holding company parent of Bondex International,
Inc., and the direct or indirect parent of certain additional
domestic and foreign subsidiaries. The Company claims to be a
leading manufacturer, distributor and seller of various specialty
chemical product lines, including exterior insulating finishing
systems, powder coatings, fluorescent colorants and pigments,
cleaning and protection products, fuel additives, wood treatments
and coatings and sealants, in both the industrial and consumer
markets.
The Company filed for Chapter 11 bankruptcy protection (Bankr. D.
Del. Case No. 10-11780) on May 31, 2010. Gregory M. Gordon, Esq.,
Dan B. Prieto, Esq., and Robert J. Jud, Esq., at Jones Day, serve
as bankruptcy counsel. Daniel J. DeFranceschi, Esq., Zachary I.
Shapiro, Esq., Paul N. Heath, Esq., and Tyler D. Semmelman, Esq.,
at Richards Layton & Finger, serve as co-counsel. Logan and
Company is the Company's claims and notice agent. The Company
estimated its assets and debts at $100 million to $500 million.
The Company's affiliate, Bondex International, Inc., filed a
separate Chapter 11 petition on May 31, 2010 (Case No. 10-11779),
estimating its assets and debts at $100 million to $500 million.
Specialty Products Holding Corp, together with Bondex
International, Inc., are referred to as the Initial Debtors.
Counsel to the Official Committee of Asbestos PI Claimants are
Natalie D. Ramsey, Esq., and Mark A. Fink, Esq. of Montgomery,
Mccracken, Walker & Rhoads, LLP, in Wilmington Delaware, and Mark
B. Sheppard, Esq. of the firm's Philadelphia, Pennsylvania
division.
Counsel to the Future Claimants' Representative are James L.
Patton, Jr., Esq., Edwin J. Harron, Esq., Edmon Morton, Esq.,
Sharon Zieg, Esq., and Erin Edwards, Esq. of Young Conaway
Stargatt & Taylor LLP, in Wilmington, Delaware.
Competing bankruptcy exit plans have been filed by the Initial
Debtors, on one hand, and the Official Committee of Unsecured
Creditors and the Future Claimants' Representative on the other.
The Debtors' First Amended Joint Plan of Reorganization and the
explanatory Disclosure Statement, dated Nov. 18, 2013, provides
for an asbestos trust to be established and funded with cash to
pay present and future asbestos-related claims. The trust will be
funded by secured notes, issued by the Debtors and their ultimate
parent, RPM International Inc. ("International"), and the amounts
and terms of the notes will, with one exception, be determined by
the final outcome or settlement of the litigation that will
determine the asbestos claimants' rights in the chapter 11 cases.
The one exception is that the notes will provide for an aggregate
initial nonrefundable payment of $125 million to the asbestos
trust irrespective of the outcome of any litigation. In short,
the Debtors and International have committed to pay to asbestos
claimants the maximum amount to which they are entitled based on
the applicable judgments or rulings in the litigation that will
determine the extent of the claimants' rights in the chapter 11
cases, and to make comparable payments to other similarly situated
creditors.
The PI Committee and the FCR's Third Amended Plan, filed Oct. 15,
2013, provides that: (i) SPHC will be separated from non-Debtor
direct or indirect parent Bondex International; (ii) Reorganized
SPHC will be managed and/or sold for the benefit of holders of all
Claims that are not paid in Cash, subordinated, cancelled or
otherwise treated pursuant to the Plan; (iii) all of SPHC's causes
of action will survive; (iv) Asbestos PI Trust Claims against SPHC
will be channeled to an Asbestos PI Trust; and (v) current SPHC
equity interests will be canceled, annulled, and extinguished.
On May 20, 2013, the Bankruptcy Court entered an order estimating
the amount of the Debtors' asbestos liabilities, and a related
memorandum opinion in support of the estimation order. The
Bankruptcy Court estimated the current and future asbestos claims
associated with Bondex International, Inc. and Specialty Products
Holding at approximately $1.17 billion. The estimation hearing
represents one step in the legal process in helping to determine
the amount of potential funding for a 524(g) asbestos trust.
On Aug. 31, 2014, Republic Powdered Metals, Inc., and affiliate
NMBFiL, Inc. -- the New Debtors -- sought Chapter 11 protection
(Bankr. D. Del. Case No. 14-12028). The New Debtors are indirect
subsidiaries of Bondex International and affiliates of the Initial
Debtors.
Republic Powdered Metal is a leader in the roof coating and
restoration industry which provides exclusive products for roof
and wall restoration, including an extensive line of roof
coatings.
NMBFiL is formerly known as Bondo Corporation. It is a
manufacturer of auto body repair products for the automotive
aftermarket and various other professional and consumer
applications. In November 2007, NMBFiL sold substantially all of
its assets and no longer has business operation.
Republic estimated assets of $10 million to $50 million and debt
of less than $10 million as of the bankruptcy filing.
The New Debtors have been granted, on Sept. 3, 2014, joint
administration of their Chapter 11 cases for procedural purposes
only, with the chapter 11 cases of Specialty Products Holding
Corp. and Bondex International, Inc.
SPRINGLEAF HOLDINGS: Moody's Hikes Corporate Family Rating to B2
----------------------------------------------------------------
Moody's Investors Service upgraded the corporate family rating of
Springleaf Holdings, Inc. ("Springleaf") and the senior unsecured
rating of operating subsidiary Springleaf Finance Corporation
("SFC") to B2 from B3. The rating outlook is stable.
The rating action concludes the review for upgrade initiated on
August 7, 2014.
Ratings Rationale
The upgrade reflects the substantial progress Springleaf has made
in selling a majority of its $8 billion non-core real estate
portfolio, leaving less than $1.5 billion of real estate loans
outstanding (notional amounts). The sales result in substantial
deleveraging, a significantly improved liquidity position, and an
expected reduction in earnings volatility. The company plans to
further reduce its real estate portfolio to approximately $1
billion (notional amount) by year-end through additional sales.
The net proceeds from the completed sales total $2.4 billion,
bringing Springleaf's cash balance to $3.2 billion on a pro-forma
basis. The company has not disclosed its plans for deployment of
the sale proceeds.
The sales transactions deleverage Springleaf's balance sheet by
reducing total debt by $3.6 billion, all of which was related to
the deconsolidation of securitized interests and securitization
trusts. Springleaf's current balance sheet leverage, measured as
the ratio of Total Debt to Tangible Equity, declines to
approximately 4x on a pro-forma basis compared to 6.7x at March
31, 2014. The pro-forma leverage incorporates a $1.1 billion
increase in secured debt resulting from the refinancing of the
asset-backed notes secured by the SpringCastle consumer loan
portfolio.
The upgrade also reflects Moody's expectation that Springleaf's
core operations will demonstrate improving profitability over the
next several quarters. While the sale of the non-core real estate
portfolio, which has generated substantial losses in the past, is
expected to reduce Springleaf's earnings volatility, the company's
total revenues will be reduced as its loan portfolio will decline
by half post-sale. Springleaf will need to generate additional
revenue from other sources, cut operating costs and reduce its
interest expense by further deleveraging to achieve acceptable
profitability. Springleaf's future performance will be driven by
businesses with higher risk-adjusted returns than home lending,
including its branch-based personal lending and new auto lending
businesses. The recently launched auto lending initiative entails
execution risk and high growth objectives, which are constraints
on the firm's B2 rating.
Ratings could be upgraded if Springleaf demonstrates improved and
sustainable profitability, strong liquidity profile, and if growth
in auto lending is accompanied by stable and predictable asset
quality performance. Positive rating pressure could develop if the
company reduces its leverage on a permanent basis.
Ratings could be downgraded if Springleaf's leverage significantly
increases possibly as a result of a debt-financed acquisition or
shareholder distribution, its liquidity deteriorates, or if its
financial performance fails to materially strengthen.
A summary of the action follows:
Springleaf Holdings, Inc.:
Corporate Family: rating upgraded to B2 with a Stable outlook
Springleaf Finance Corporation:
LT Issuer: rating upgraded to B2 with a Stable outlook
Senior Unsecured: rating upgraded to B2 with a Stable outlook
Senior Unsecured MTN Program: rating upgraded to (P)B2
Senior Unsecured Shelf: rating upgraded to (P)B2
AGFC Capital Trust I:
Preferred Stock: rating upgraded to Caa1(hyb) with a Stable
outlook
Springleaf Holdings, Inc., through principal operating subsidiary
Springleaf Finance Corporation, provides consumer finance and
credit insurance products to consumers through a multi-state
branch network.
The principal methodology used in these ratings was Finance
Company Global Rating Methodology published in March 2012.
STANFORD GROUP: Chadbourne & Parke Wants Ponzi Abetting Suit Axed
-----------------------------------------------------------------
Law360 reported that Chadbourne & Parke LLP urged a Texas federal
judge to toss a legal malpractice action in which Stanford
Financial Group's receiver accuses the firm of aiding and abetting
a $7 billion Ponzi scheme through an ex-partner's representation
of Stanford, arguing it is time-barred. According to the report,
in a motion to dismiss, Chadbourne said receiver Ralph S. Janvey's
claims are based on Thomas V. Sjoblom allegedly shielding the bank
from investigators in 2005 and 2006, thus they are blocked by a
two-year statute of limitations for legal malpractice claims.
The case is Ralph S. Janvey v. Proskauer Rose LLP et al., case
number 3:13-cv-00477, in the U.S. District Court for the Northern
District of Texas.
About Stanford Group
The Stanford Financial Group was a privately held international
group of financial services companies controlled by Allen
Stanford, until it was seized by United States (U.S.) authorities
in early 2009.
Domiciled in Antigua, Stanford International Bank Limited --
http://www.stanfordinternationalbank.com/-- is a member of
Stanford Private Wealth Management, a global financial services
network with US$51 billion in deposits and assets under
management or advisement. Stanford Private Wealth Management
served more than 70,000 clients in 140 countries.
On Feb. 16, 2009, the United States District Court for the
Northern District of Texas, Dallas Division, signed an order
appointing Ralph Janvey as receiver for all the assets and
records of Stanford International Bank, Ltd., Stanford Group
Company, Stanford Capital Management, LLC, Robert Allen Stanford,
James M. Davis and Laura Pendergest-Holt and of all entities they
own or control. The February 16 order, as amended March 12,
2009, directs the Receiver to, among other things, take control
and possession of and to operate the Receivership Estate, and to
perform all acts necessary to conserve, hold, manage and preserve
the value of the Receivership Estate.
The case in district court was Securities and Exchange Commission
v. Securities Investor Protection Corp., 11-mc-00678, U.S.
District Court, District of Columbia (Washington).
The U.S. Securities and Exchange Commission, on Feb. 17, charged
before the U.S. District Court in Dallas, Texas, Mr. Stanford and
three of his companies for orchestrating a fraudulent, multi-
billion dollar investment scheme centering on an US$8 billion
Certificate of Deposit program.
A criminal case was pursued against him in June before the U.S.
District Court in Houston, Texas. Mr. Stanford pleaded not
guilty to 21 charges of multi-billion dollar fraud, money-
laundering and obstruction of justice. Assistant Attorney
General Lanny Breuer, as cited by Agence France-Presse News, said
in a 57-page indictment that Mr. Stanford could face up to 250
years in prison if convicted on all charges. Mr. Stanford
surrendered to U.S. authorities after a warrant was issued for
his arrest on the criminal charges.
STANFORD GROUP: Proskauer Says Ponzi Abetting Suit Is 'Stale'
-------------------------------------------------------------
Law360 reported that Proskauer Rose LLP asked a Texas federal
judge to toss the receiver for Stanford Financial Group's legal
malpractice suit accusing the firm of aiding and abetting
Stanford's $7 billion Ponzi scheme, based on its representation of
Stanford, arguing the claims are "stale." According to the
report, Proskauer said receiver Ralph S. Janvey has known about
his claims for years, noting he interviewed Thomas V. Sjoblom
represented Stanford, first as a partner at Chadbourne and then at
Proskauer, and got copies of all of the firm's files on Stanford,
which were referenced in the complaint. The complaint, filed in
2013, falls far outside the two-year statute of limitations, the
firm said, the report related.
The case is Ralph S. Janvey v. Proskauer Rose LLP et al., case
number 3:13-cv-00477, in the U.S. District Court for the Northern
District of Texas.
About Stanford Group
The Stanford Financial Group was a privately held international
group of financial services companies controlled by Allen
Stanford, until it was seized by United States (U.S.) authorities
in early 2009.
Domiciled in Antigua, Stanford International Bank Limited --
http://www.stanfordinternationalbank.com/-- is a member of
Stanford Private Wealth Management, a global financial services
network with US$51 billion in deposits and assets under
management or advisement. Stanford Private Wealth Management
served more than 70,000 clients in 140 countries.
On Feb. 16, 2009, the United States District Court for the
Northern District of Texas, Dallas Division, signed an order
appointing Ralph Janvey as receiver for all the assets and
records of Stanford International Bank, Ltd., Stanford Group
Company, Stanford Capital Management, LLC, Robert Allen Stanford,
James M. Davis and Laura Pendergest-Holt and of all entities they
own or control. The February 16 order, as amended March 12,
2009, directs the Receiver to, among other things, take control
and possession of and to operate the Receivership Estate, and to
perform all acts necessary to conserve, hold, manage and preserve
the value of the Receivership Estate.
The case in district court was Securities and Exchange Commission
v. Securities Investor Protection Corp., 11-mc-00678, U.S.
District Court, District of Columbia (Washington).
The U.S. Securities and Exchange Commission, on Feb. 17, charged
before the U.S. District Court in Dallas, Texas, Mr. Stanford and
three of his companies for orchestrating a fraudulent, multi-
billion dollar investment scheme centering on an US$8 billion
Certificate of Deposit program.
A criminal case was pursued against him in June before the U.S.
District Court in Houston, Texas. Mr. Stanford pleaded not
guilty to 21 charges of multi-billion dollar fraud, money-
laundering and obstruction of justice. Assistant Attorney
General Lanny Breuer, as cited by Agence France-Presse News, said
in a 57-page indictment that Mr. Stanford could face up to 250
years in prison if convicted on all charges. Mr. Stanford
surrendered to U.S. authorities after a warrant was issued for
his arrest on the criminal charges.
STILLWATER ASSET: Trust's $50MM Suit Claims Asset-Stripping Plot
----------------------------------------------------------------
Law360 reported that the liquidating trust for Stillwater Asset
Backed Offshore Fund Ltd. filed a $50 million adversary complaint
in New York bankruptcy court, accusing Net Five Holdings LLC and
others of engaging in a fraudulent scheme to strip the fund and
related entities of their real estate assets without compensation.
According to the report, Stillwater Liquidating LLC named more
than two dozen companies and individuals in the 26-count
complaint, alleging that they helped Bermuda hedge fund Gerova
Financial Group Ltd. carry out a scheme that left the Stillwater
funds with "no assets and no consideration, monetary or otherwise,
for their converted assets."
About Stillwater Asset
Investment funds allegedly owed roughly $35.8 million, filed an
involuntary Chapter 11 petition against Brooklyn-based
Stillwater Asset Backed Offshore Fund Ltd. (Bankr. S.D.N.Y. Case
No. 12-14140) on Oct. 3, 2012. Bankruptcy Judge Allan L. Gropper
oversees the case. The petitioning creditors are represented by
Douglas E. Spelfogel, Esq., Richard Bernard, Esq., Mark Wolfson,
Esq., and Katherine R. Catanese, Esq., at Foley & Lardner LLP
An affiliated entity, Gerova Financial Group, Ltd., a Bermuda-
based financial-services company, is the subject of Chapter 15
bankruptcy proceedings (Bankr. S.D.N.Y. Case No. 12-13641)
commenced on Aug. 24, 2012.
Liquidators of Gerova -- Michael Morrison and Charles Thresh, both
of KPMG Advisory Limited, and John McKenna of Finance and Risk
Service Ltd, Bermuda -- filed the Chapter 15 petition, estimating
up to $100 million in assets and as much as $500 million in
liabilities. A Chapter 15 petition was also filed for Gerova
Holdings Ltd. (Case No. 12-13642), which is estimated to have
under $100,000 in assets and liabilities.
Hamilton-based Gerova Financial, formerly known as Asia Special
Situations Acquisition Corp., was primarily involved, from 2010
on, in the business of investing in and managing certain types of
illiquid financial assets. Gerova planned to then use such assets
as regulatory capital for insurance companies, though this
strategy was not fully implemented.
After lengthy proceedings and over the objections of Gerova's
then-current management, on July 20, 2012, the Bermuda Court
entered an order appointing Morrison, et al., as joint provisional
liquidators of GFG. Morrison, et al., were also appointed
provisional liquidators of GHL on Aug. 20.
Judge Gropper also oversees the Gerova Chapter 15 case. Peter A.
Ivanick, Esq., and lawyers at Hogan Lovells US LLP represent the
Liquidators as counsel.
On Jan. 31, 2013, the Bankruptcy Court has denied a motion filed
by Stillwater Asset Backed Offshore Fund Ltd. to dismiss the
involuntary Chapter 11 petition. Instead, the judge entered an
order for relief under chapter 11 of the Bankruptcy Code (11
U.S.C. Sec. 101 et seq.) against the Debtor effective Jan. 17,
2013. Jack Doueck and Richard I. Rudy are designated as
responsible persons for the Debtor.
ASK LLP serves as counsel for the Debtor, and Foley & Lardner LLP
serves as counsel to the unsecured creditors committee of the
Debtor.
TEM ENTERPRISES: Asks Court to Confirm Second Amended Plan
----------------------------------------------------------
TEM Enterprises dba Xtra Airways asks the Bankruptcy Court to
confirm its forthcoming Second Amended Plan of Reorganization as
all classes of claims that have voted and which are entitled to
vote have accepted the Plan and the Plan is feasible.
On August 25, 2014, the Debtor filed its proposed Plan of
Reorganization and Disclosure Statement. On Aug. 29, the
Bankruptcy Court entered an order conditionally approving the
Disclosure Statement. On Sept. 10, the Debtor filed its First
Amended Disclosure Statement and First Amended Plan of
Reorganization to incorporate its exhibits and to make several
revisions.
The Debtor said in an Oct. 2 filing that it intends to file its
Second Amended Disclosure Statement and Second Amended Plan of
Reorganization to incorporate changes requested by the Department
of Justice and the United States Trustee's Office and to make
other minor changes. Due to ongoing negotiations between the
Debtor and Triton Aviation California which could alter the
information contained in the Disclosure Statement and Plan, the
Debtor intends to file its amendments to such documents as soon as
the issues relating to the Triton lease are resolved.
According to the Debtor, although the Triton lease is the subject
of negotiations between the parties, it is intended to be assumed,
as amended in the Plan, and the parties are currently finalizing
the amendments.
In its amended brief in support of plan confirmation, the Debtor
stated that it has one impaired consenting class voting in favor
of its Plan (Class 3 General Unsecured Claims). The Debtor
received 29 votes from 29 claimants with respect to the Plan. All
but one of the claimants in Class 3 voted to accept the Plan and
99.46% in amount voted to accept the Plan. Holders of priority
claims (Class 1), secured claims (Class 2) and equity interests
(Class 4) did not vote on the Plan; however classes 1 and 2 are
being paid in full and are therefore unimpaired and deemed to
accept the Plan. Class 4 will receive nothing under the Plan and
therefore, is deemed to reject the Plan.
General unsecured creditors will receive a pro rata share of a new
capital contribution to the Debtor and are slated to recover 5% to
10% of their claims.
About Tem Enterprises
Tem Enterprises dba Xtra Airways is an operating charter airline
based in Boise, Idaho and incorporated in the State of Nevada. In
the business for more than 23 years, the company primarily
provides commercial aircraft charter services to third party
charterers including: (a) Bahamas Air, up and down the East Coast;
and (b) U.S. Immigration and Customs Enforcement deporting
illegal immigrants out of the United States from San Antonio,
Texas. It also provides ad hoc charter flight services to various
contracting parties when available.
Tem Enterprises leases four aircraft in its charter operations.
On and prior to June 4, 2014, the company operated charter flights
out of Santiago, Chile, transporting Chilean mine-workers;
however, due to non-payment by the charterer, OneSpa, among other
reasons, the company was unable to pay rent under its lease with
the Vx Lessor. It received a notice of termination from the Vx
Lessor on May 29, 2014. The company was also a party to two other
leases, one with Triton Aviation California and one with AWAS.
The AWAS lease was rejected, and the Aircraft was purchased by
AerLine Holdings LLC and leased back to the company.
Tem Enterprises filed a Chapter 11 bankruptcy petition (Bankr. D.
Nev. Case No. 14-13955) on June 4, 2014. Judge August B. Landis
oversees the case. The Debtor disclosed $6,129,714 in assets and
$18,386,432 in liabilities as of the Chapter 11 filing. Lisa
Dunn, the president, signed the petition.
McDonald Carano Wilson LLP serves as the Debtor's counsel.
TRIMAS CORP: S&P Assigns 'BB-' Rating to $250MM Loan Due 2018
-------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB-' issue-level
rating and '3' recovery rating to Bloomfield Hills, Michigan-based
TriMas Corp. subsidiary's $250 million incremental term loan due
2018. The '3' recovery rating indicates S&P's expectations for
meaningful (50% to 70%) recovery in the event of a payment
default.
S&P's 'BB-' corporate credit rating on TriMas Corp., an industrial
engineered products company, and S&P's 'BB-' issue-level rating on
its senior secured revolving credit facility and existing $175
million senior secured term loan due 2018 remain unchanged
following the company's proposed $250 million incremental term
loan. The company will exercise the accordion feature in its
credit facility to partly fund the acquisition of Allfast
Fastening Systems Inc. for $360 million, with the remaining
funding from borrowings on the revolving credit facility. S&P
expected TriMas to be acquisitive, and although this is a somewhat
larger debt-funded bolt-on acquisition, S&P believes that this
strategic acquisition further complements its leading position in
critical aerospace fasteners. S&P's base case allowed for
sufficient debt capacity for acquisitions, and TriMas' pro forma
cash flow metrics are now more consistent with our "aggressive"
financial risk profile benchmarks when considering the volatility
of the industry.
RATINGS LIST
TriMas Corp.
Corporate Credit Rating BB-/Stable/--
New Rating
Trimas Co. LLC
$250M incremental term loan due 2018 BB-
Recovery Rating 3
TRUMP ENTERTAINMENT: Accuses Union of Harassing Customers
---------------------------------------------------------
Katy Stech, writing for The Wall Street Journal, reported that
Trump Taj Mahal executives are accusing union leaders of
"harassing" their customers who have upcoming conventions and
other big events, telling them they should rebook their parties
with the beleaguered casino's Atlantic City rivals. According to
the report, casino executives want U.S. Bankruptcy Judge Kevin
Gross to fine union leaders at Unite Here Local 54 for telling
customers that attendees could be forced to cross picket lines and
that hotel rooms won't be maintained.
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.
U.S. STEEL: CCAA Stay Extended; $185MM DIP Financing Okayed
-----------------------------------------------------------
U. S. Steel Canada Inc. on Oct. 8 disclosed that it has obtained
an extension of the stay of proceedings, initially granted by
Justice Wilton-Siegel of the Ontario Superior Court of Justice
under the Companies' Creditors Arrangement Act (CCAA) on
September 16, 2014, to January 23, 2015.
The Court also approved a $185 million debtor-in-possession (DIP)
credit facility from U. S. Steel Holdings Inc., which will provide
requisite funding for the Company to carry on business as usual as
it moves through the restructuring process. The DIP financing is
expected to fund the anticipated needs of the Company through the
end of December 2015.
"The extension of the stay period provides time for U. S. Steel
Canada to engage in discussions with stakeholders to explore
restructuring options and reach consensual restructuring solutions
where possible," said William Aziz, Chief Restructuring Officer
for U. S. Steel Canada. "The DIP financing will enable the
Company to carry on business in the ordinary course, continue to
meet its obligations to employees and suppliers, provide payments
for pensions and benefits to retirees, and ensure that customers
have a continuous source of high quality steel supply while the
Company operates under CCAA."
"The extension, together with the DIP Financing announced
[Wednes]day, enhances the prospects for U. S. Steel Canada and its
stakeholders to come together to develop a viable plan of
arrangement for the business," said Michael McQuade, President and
General Manager of U. S. Steel Canada. "In the meantime, we will
continue to manufacture and deliver the high-quality steel
products U. S. Steel Canada is known to produce."
U. S. Steel Canada will continue to carry on business as usual
while it develops and implements comprehensive restructuring
solutions. Ernst & Young Inc., as the Court-appointed Monitor
will continue to oversee the business and financial affairs of the
company during the CCAA process. The Monitor will make
information relevant to the restructuring process available on its
website at www.ey.com/ca/USSC as information becomes available.
About U. S. Steel Canada, Inc.
U. S. Steel Canada's operations are located at Lake Erie Works, a
fully integrated steelmaking facility, and at Hamilton Works, home
to cokemaking and finishing operations including our premier
zinc-coating facility, the world-class Z-Line. U. S. Steel Canada
has the capability of producing approximately 2.6 million tons of
steel annually and employs approximately 2,000 people.
UNITED GILSONITE: Plan Confirmation Hearing Scheduled for Dec. 8
----------------------------------------------------------------
United Gilsonite Laboratories will seek confirmation of its
Modified First Amended Plan of Reorganization at a hearing on Dec.
8. The Plan is supported by the Official Committee of Unsecured
Creditors and the Future Claimants' Representative.
Gibbons P.C. said that individuals or entities holding Trust
Claims, which includes claims for asbestos-related personal injury
or wrongful death, may vote to accept or reject the Plan by
November 21, 2014.
The Bankruptcy Court then will consider whether to confirm
(approve) the Plan at a hearing on December 8, 2014.
A detailed document describing the Plan, called the Disclosure
Statement, and voting materials to be used for voting on the Plan,
approved by the Bankruptcy Court on Sept. 30, 2014, together with
a copy of the Plan itself, were mailed to known holders of Trust
Claims against the Debtor or their lawyers.
The Plan provides for a channeling injunction issued under Section
524(g) of the Bankruptcy Code, applicable to all persons and
entities, that results in (i) the permanent channeling of all
Trust Claims to the Trust for resolution, and (ii) a permanent
injunction enjoining holders of Trust Claims from taking any
action with respect to such Trust Claims against an Asbestos
Protected Party. Proof of an Asbestos Personal Injury Claim or an
Indirect Asbestos Personal Injury Claim does not have to be filed
with the Bankruptcy Court at this time.
The Debtor has identified on Exhibit J to the Plan the holders of
asbestos-related personal injury claims who executed settlement
and release agreements with one or more of the Debtor's insurers
prior to the Petition Date. Only those claimants identified on
Exhibit J to the Plan are holders of Settled Asbestos Claims (as
such term is defined in the Plan) and will be entitled to a
Distribution on the Effective Date of the Plan, payable solely
from the UGL Shareholder Cash Contribution, in an aggregate amount
not to exceed $2.2 million.
The Order Approving Disclosure Statement and Solicitation
Procedures issued by the Bankruptcy Court describes who can vote
on the Plan and how to vote. The Disclosure Statement contains
information that will help you decide whether to vote on the Plan
if you are entitled to do so. Lawyers for holders of Trust Claims
may vote on the Plan on behalf of their clients if authorized by
their clients. If you are unsure whether your lawyer is authorized
to vote on your behalf, please contact your lawyer. Your legal
rights may be affected whether or not you vote on the Plan. To be
counted, a Ballot voting on the Plan must be received by The
Garden City Group, Inc., the Claims and Balloting Agent, by 5:00
p.m. (prevailing Eastern Time), on November 21, 2014 (the "Voting
Deadline"). BALLOTS RECEIVED AFTER THE VOTING DEADLINE WILL NOT BE
COUNTED.
BALLOTS WILL NOT BE ACCEPTED BY THE CLAIMS AND BALLOTING AGENT BY
TELECOPY, FACSIMILE OR OTHER ELECTRONIC MEANS, INCLUDING EMAIL.
A hearing to confirm the Plan will commence at 10:00 a.m.
(prevailing Eastern Time) on Dec. 8, 2014, before the Honorable
Robert N. Opel II, United States Bankruptcy Judge, in the United
States Bankruptcy Court For the Middle District of Pennsylvania,
274 Max Rosenn U.S. Courthouse, 197 South Main Street, Wilkes-
Barre, PA 18701. You may attend the hearing, but are not required
to do so. If you want to object to the Plan, objections must be
submitted in writing and received no later than November 21, 2014
at 4:00 p.m. (prevailing Eastern Time) to be considered.
Objections should be filed with the Clerk of the Bankruptcy Court
at the address listed above and served upon Gibbons P.C., One
Gateway Center, Newark, NJ 07102-5310, Attn: Mark B. Conlan, Esq.
Additional Information about the Plan, the Disclosure Statement
and the Trust (including copies of the Plan and the Disclosure
Statement), may be obtained by contacting the Claims and Balloting
Agent at (888) 425-7006 or UGLTeam@gcginc.com or by visiting the
Debtor's Chapter 11 Web site at http://www.gcginc.com/cases/ugl
About United Gilsonite
Scranton, Pennsylvania-based United Gilsonite Laboratories is a
small family-owned corporation engaged in the manufacturing of
wood and masonry finishing products and paint sundries. United
Gilsonite filed for Chapter 11 bankruptcy protection (Bankr. M.D.
Pa. Case No. 11-02032) on March 23, 2011, to address asbestos-
related claims. UGL is best known for Drylok, a leak-prevention
and waterproofing compound, and Zar wood finish.
Judge Robert N. Opel, II, oversees the case. Mark B. Conlan,
Esq., at Gibbons P.C., serves as the Debtor's bankruptcy counsel.
Joseph M. Alu & Associates P.C. serves as accountants. K&L Gates
LLP serves as special insurance counsel. Garden City Group is the
claims and notice agent. The Company disclosed $21,084,962 in
assets and $3,008,688 in liabilities as of the Chapter 11 filing.
Roberta A. DeAngelis, United States Trustee for Region 2,
appointed five creditors to serve on an Official Committee of
Unsecured Creditors. Montgomery, McCracken, Walker & Rhoads, LLP,
represents the Committee. The Committee retained Legal Analysis
Systems, Inc., as its consultant on the valuation of asbestos
liabilities.
James L. Patton, Jr., has been appointed as legal representative
for future holders of personal injury or wrongful death claims
based on alleged exposure to asbestos and asbestos-containing
products. He retained Young Conaway Stargatt & Taylor LLP as his
attorneys.
Charter Oak Financial Consultants LLC serves as financial advisor
to the Unsecured Creditors Committee and the Future Claimants
Representative.
UNITEK GLOBAL: Moody's Lowers Corporate Family Rating to Ca
-----------------------------------------------------------
Moody's Investors Service downgraded UniTek Global Services,
Inc.'s probability of default and corporate family ratings to Ca-
PD/LD and Ca, respectively. The limited default "LD" designation
appended to UniTek's probability of default rating reflects
UniTek's entering into a forbearance agreement with its lenders on
August 8, 2014 and Moody's view that the company has defaulted
under Moody's definition. The limited default designation will
remain for three business days to reflect Moody's view that a
default has occurred. Thereafter, the LD will be removed. Moody's
also downgraded the rating on UniTek's bank term loan to Ca. The
SGL-4 speculative grade liquidity rating was affirmed. The ratings
outlook is negative.
On October 2, 2014, UniTek entered into amendments to the Term
Forbearance Agreement and the Revolver Forbearance Agreement to
extend through October 9, 2014 the standstill period contained in
such agreements. Per the company's August 13, 2014 8-k filing, the
company took actions including the forbearance to "allow the
company additional time and flexibility to execute on strategic
initiatives related to its capital structure." The continued
extension of the standstill period combined with a weak liquidity
position also underlie the current ratings.
Ratings downgraded:
Corporate family rating downgraded to Ca from Caa2;
Probability of default rating downgraded to Ca-PD/LD from Caa2-PD;
$135 million term loan due 2018, downgraded to Ca (LGD-4, 60%)
from Caa2 (LGD-4, 60%)
Ratings affirmed:
Speculative Grade Liquidity Rating affirmed at SGL-4.
Outlook, negative
Ratings Rationale
The Ca corporate family rating reflects Moody's view that the
forbearance agreement entered into with UniTek's lenders on August
8th would be considered a default under Moody's definition. The
heightened possibility of another default event, continued delays
in the filing of the company's financial statements and
unlikelihood of being able to maintain covenant compliance, if not
already in breach, are also reflected in the ratings.
The affirmation of the SGL-4 rating denotes a weak liquidity
profile. The SGL-4 rating also reflects concerns regarding the
company's ability to maintain compliance with financial covenants.
The negative outlook reflects the uncertainty around the company's
capital structure and financial results.
The ratings could be downgraded if Moody's assessment of the
recovery of UniTek at default erodes further.
A favorable rating action could result if the company becomes
current on its financial statement filings and demonstrates a
sustainable capital structure through a refinancing or debt
restructuring.
The principal methodology used in this rating was Global Business
& Consumer Service Industry Rating Methodology published in
October 2010. Other methodologies used include Loss Given Default
for Speculative-Grade Non-Financial Companies in the U.S., Canada
and EMEA published in June 2009.
UniTek Global Services, Inc. ("UniTek"), based in Blue Bell,
Pennsylvania, provides fulfillment and infrastructure services to
media and telecommunication companies in the United States and
Canada. Revenues for the last twelve month period ended June 28,
2014 approximated $407 million.
VARIANT HOLDING: Bid for Overseer Gets US Trustee's Backing
-----------------------------------------------------------
Roberta A. DeAngelis, U.S. Trustee for Region 3, supports creditor
Beach Point Capital Management LP's request for the appointment of
a Chapter 11 trustee in the bankruptcy cases of Variant Holding
Co. LLC and its debtor affiliates, and objected to the Debtors'
request to employ a chief restructuring officer.
Beach Point requested for the appointment of a Chapter 11 trustee,
saying one was required to protect the estate from Variant's
"rampant fraud" and failure to preserve the underlying real
property essential to the value of the estate. The U.S. Trustee,
according to Bill Rochelle, the bankruptcy columnist for Bloomberg
News, said an independent fiduciary must be appointed in a case in
which Variant agreed there was fraud and dishonesty by recently
displaced management. Hiring a restructuring officer doesn't
mitigate or provide defenses to the appointment of a Chapter 11
Trustee, the U.S. Trustee further told the Court, the Bloomberg
report related.
A hearing on Beach Point's request for appointment of a Chapter 11
trustee and the Debtors' request to employ a CRO is scheduled for
Oct. 15.
About Variant Holding
Variant Holding Company, LLC, commenced bankruptcy proceedings
under Chapter 11 of the U.S. Bankruptcy Code in Delaware (Case No.
14-12021) on Aug. 28, 2014. Tucson, Arizona-based Variant Holding
estimated $100 million to $500 million in assets and less than
$100 million in debt.
The Debtor has tapped Peter J. Keane, Esq., at Pachulski Stang
Ziehl & Jones LLP, as counsel.
Members holding the majority of the interests in the company,
namely Conix WH Holdings, LLC, Conix Inc., Numeric Holding
Company, LLC, Walkers Dream Trust, and Variant Royalty Group, LP,
signed the resolution authorizing the bankruptcy filing.
VAUGHAN COMPANY: Scheduling Order in Clawback Suit Modified
-----------------------------------------------------------
Magistrate Judge Stephan M. Vidmar signed off on a stipulated
order modifying a November 14, 2013 Schedulig Order in the case,
JUDITH A. WAGNER, Chapter 11 Trustee of the bankruptcy estate of
The Vaughan Company, Realtors, Plaintiff, v. RICHARD JOHNSON and
CHERYL JOHNSON, Defendants, NOS. 12-CV-00817-WJ-SMV, 13-CV-00662-
WJ-SMV (D. N.M.). A copy of the Sept. 30 Order Stipulated Order
is available at http://is.gd/uvniixfrom Leagle.com.
About The Vaughan Company Realtors
The Vaughan Company Realtors filed for Chapter 11 protection
(Bankr. N.M. Case No. 10-10759) on Feb. 22, 2010. George D.
Giddens, Jr., Esq., represents the Debtor in its restructuring
efforts. The Company estimated both assets and debts of between
$1 million and $10 million. Judith A. Wagner was appointed as
Chapter 11 Trustee.
Mr. Vaughan filed a separate Chapter 11 petition (Bankr. D. N.M.
Case No. 10-10763) on Feb. 22, 2010. The case was converted to a
chapter 7 proceeding on May 20, 2010. Yvette Gonzales is the duly
appointed trustee of the Chapter 7 estate.
VISTEON CORP: 3rd Circ. Won't Rehear Suit Over Retiree Benefits
---------------------------------------------------------------
Law360 reported that United Auto Workers was denied an en banc
hearing before the Third Circuit, which ruled in August to deny
the union a reinstatement of health care benefits for Visteon
Corp. retirees because a termination of the benefits went
unchallenged in bankruptcy court. According to the report, in a
split decision in August, a Third Circuit panel affirmed a
district court's ruling that Visteon retirees couldn't get
reinstatement of their health care benefits because the UAW failed
to challenge a 2009 bankruptcy court order permitting Visteon to
terminate the benefits.
As previously reported by The Troubled Company Reporter, citing
Law360, Visteon asked a Delaware bankruptcy judge to toss a
proposed class action filed by retirees who sued after their
health benefits were discontinued in the company's bankruptcy
because the matter has been long settled. Visteon said in its
brief that the class action filed on behalf of UAW retirees in a
Michigan federal district court one day before the company had
emerged from bankruptcy is an improper collateral attack and "that
there is no principle of law that permits a losing party to force
its adversaries to continue litigation they have already won."
The case is International Union, United Automobile, Aerospace and
Agricultural Implement Workers of America et al. v. Visteon Corp.
et al., case No. 1:13-cv-01742, in the U.S. District Court for the
District of Delaware.
About Visteon Corp
Headquartered in Van Buren Township, Michigan, Visteon Corporation
(NYSE: VC) -- http://www.visteon.com/-- is an automotive supplier
that designs, engineers and manufactures innovative climate,
interior, electronic and lighting products for automakers. The
Company has corporate offices in Van Buren Township, Michigan
(U.S.); Shanghai, China; and Kerpen, Germany. It has facilities
in 27 countries and employs roughly 35,500 people. The Company
disclosed assets of US$4,561,000,000 and debts of US$5,311,000,000
as of March 31, 2009.
Visteon Corporation and 30 of its affiliates filed for Chapter 11
protection on May 28, 2009, (Bank. D. Del. Case No. 09-11786
through 09-11818). Judge Christopher S. Sontchi oversees the
Chapter 11 cases. James H.M. Sprayregen, Esq., Marc Kieselstein,
Esq., and James J. Mazza, Jr., Esq., at Kirkland & Ellis LLP, in
Chicago, Illinois, represented the Debtors in their restructuring
effort. Laura Davis Jones, Esq., James E. O'Neill, Esq., Timothy
P. Cairns, Esq., and Mark M. Billion, Esq., at Pachulski Stang
Ziehl & Jones LLP, in Wilmington, Delaware, served as the Debtors'
local counsel. The Debtors' investment banker and financial
advisor were Rothschild Inc. The Debtors' notice, claims, and
solicitation agent was Kurtzman Carson Consultants LLC. The
Debtors' restructuring advisor was Alvarez & Marsal North America,
LLC.
The Bankruptcy Court entered an order on Aug. 31, 2010, confirming
the Fifth Amended Plan of Reorganization of Visteon Corporation
and its debtor-affiliates. Visteon emerged from Chapter 11 on
Oct. 1.
* * *
The Troubled Company Reporter, on March 27, 2014, reported that
Moody's Investors Service assigned a B1 rating to Visteon's
proposed $800 senior secured bank credit facility. In a related
action Moody's affirmed the B1 Corporate Family Rating, B1-PD
Probability of Default Rating and the company's existing debt
ratings. Visteon's Speculative Grade Liquidity Rating was affirmed
at SGL-3. The rating outlook remains stable.
The TCR, on the same day, also reported that Standard & Poor's
Ratings Services said that it assigned 'BB-' issue ratings to Van
Buren Township, Mich.-based global auto supplier Visteon's
proposed senior secured debt comprising a $600 million term loan B
maturing 2021 and a new five-year $200 million revolving credit
facility. The recovery rating is '2', which indicates S&P's
expectation for substantial (70% to 90%) recovery for lenders in
the events of a payment default or bankruptcy. The term loan
issuance, along with some cash from balance sheet, will repay the
remaining $400 million 6.75% Senior Notes (rated 'B+', with a '3'
recovery rating) due 2019 and finance the acquisition of JCI
Electronics.
WORLDCOM INC: Supreme Court Passes on Verizon's $50M Tax Suit
-------------------------------------------------------------
Law360 reported that the U.S. Supreme Court declined to review the
Internal Revenue Service's imposition of millions in taxes on a
bankrupt unit of Verizon Communications Inc. that the telecom
giant said could open the door for the agency to apply a decades-
old telephone tax to new technology. According to the report, the
high court denied certiorari to a petition from WorldCom Inc.,
later known as MCI Inc., to review the Second Circuit's 2012
reversal allowing the IRS to impose $26 million in taxes and
interest on a now defunct WorldCom.
The case is WorldCom Inc. v. Internal Revenue Service, case number
13-1269, in the U.S. Supreme Court.
WorldCom, Inc., a Clinton, Mississippi-based global communications
company, filed for chapter 11 protection (Bankr. S.D.N.Y. Case No.
02-13532) on July 21, 2002. On March 31, 2002, WorldCom disclosed
$103,803,000,000 in assets and $45,897,000,000 in debts. The
Debtors were represented by Weil, Gotshal & Manges LLP. The
Bankruptcy Court confirmed WorldCom's Plan on Oct. 31, 2003, and
on April 20, 2004, the Company formally emerged from Chapter 11
protection as MCI, Inc. On Jan. 6, 2006, MCI merged with Verizon
Communications, Inc. MCI is now known as Verizon Business, a unit
of Verizon Communications.
* Bankruptcy Attorneys Launch New Firm Smiley Wang-Ekvall LLP
-------------------------------------------------------------
Smiley Wang-Ekvall, LLP is a newly launched law firm specializing
in insolvency, real estate transactions and business litigation.
Attorneys Evan D. Smiley, Lei Lei Wang Ekvall, Kyra E. Andrassy,
Kraig C. Kilger, Robert S. Marticello, Autumn D. Spaeth and
Philip E. Strok have joined together as partners of the new firm.
Smiley Wang-Ekvall's practice is dedicated to representing
debtors, creditors, creditors' committees, equity committees,
trustees, asset purchasers, professionals and other parties
successfully navigate bankruptcy-related matters and litigation.
With the ability to fully service clients on issues inter-related
between bankruptcy, real estate transactions and business
litigation, firm partners have created an agile, forward-thinking
firm that will operate in a team-oriented environment with a laser
focus on achieving value-added best results for clients.
"Smiley Wang-Ekvall represents the convergence of more than 20
years of top-notch experience with a highly-energized and
knowledgeable team seeking to apply innovative strategies to reach
the ideal outcome for our clients," said Mr. Smiley. "Our ability
to be strategic and creative while we hone in on resolving the
obstacles and issues encountered by our clients sets us apart from
other traditional law firms."
The newly launched firm boasts a highly-knowledgeable, skilled and
resolute team of partners. In addition to holding strong records
of success -- both in and out of the courtroom, each attorney has
served as former federal judicial clerks and/or achieved notable
distinctions and honors during their career.
"Our all-star team of talented attorneys are well-equipped to
guide clients through the challenges that come with insolvency,
real estate transactions and other bankruptcy-related legal
matters by working in collaboration with them and discerning the
best course of action to reach a resolution efficiently and
effectively," said Ms. Wang Ekvall. "By joining our extensive
experience with our passion for the law, we will be able to
provide a new level of focused service, skill and accessibility."
Smiley Wang-Ekvall partners include:
-- Evan D. Smiley, an accomplished litigator, author, speaker
and bankruptcy specialist, has more than 20 years of experience in
bankruptcy law. He was named as a Super Lawyer by Thompson
Reuters for 10 consecutive years, representing the top five
percent of practicing attorneys in Southern California. A strong
leader and community advocate, Mr. Smiley is a fellow of the
Orange County Bar Foundation and currently serves on the Alumni
Board of Directors for Pacific McGeorge School of Law. Mr. Smiley
is AV-Rated by Martindale-Hubbell, the highest possible rating for
ethical standards and legal ability. He is also named as one of
the Best Lawyers in America for Bankruptcy and Creditor Rights in
the 2010-2015 editions of The Best Lawyers in America list
appearing in U.S. News & World Reports. Most recently, Mr. Smiley
was named to OC Metro magazine's 2014 Top Bankruptcy Attorneys
List.
-- Lei Lei Wang Ekvall is a leader in the Southern California
legal community having served several terms on the board of
directors for Orange County Bar Association, including as
president in 2010. She is also a past president of the Orange
County Bankruptcy Forum and the Orange County Asian American Bar
Association. Ms. Wang Ekvall has earned an AV rating by
Martindale-Hubbell, plus the highest possible 10.0 rating from
Avvo, and was most recently named as one of the 2014 Top
Bankruptcy Attorneys by OC Metro magazine and a 2014 Super
Lawyers' Top Women in Bankruptcy list. She is frequently invited
to speak on various topics related to bankruptcy law and she and
Mr. Smiley co-authored the book, "Bankruptcy for Business; The
Benefits, Pitfalls and Alternatives."
-- Kyra E. Andrassy received her Juris Doctorate from Loyola Law
School where she served as an editor of the Loyola Law Review.
She held the distinction of being the only attorney to sit on the
Committee to Revise the Local Bankruptcy Rules of the U.S.
District Court, Central District of California in 2011 and has
been recognized as a Southern California Rising Star six times by
Thompson Reuters. Ms. Andrassy was also named a Super Lawyer by
Thompson Reuters in 2012, 2013 and 2014. Most recently, she was
also selected to be a part of OC Metro magazine's 2014 Top
Bankruptcy Attorneys List.
-- Kraig C. Kilger brings extensive experience in real estate
and business transaction matters as well as an impressive tenure
in business law. Mr. Kilger graduated with honors from University
of California, Davis where he was nominated to the Order of the
Coif, won the American Jurisprudence Award in Constitutional Law
and the Roger J. Traynor California Moot Court Competition.
-- Robert S. Marticello, a past president of the Orange County
Bankruptcy Forum and current treasurer of the California
Bankruptcy Forum, focuses on bankruptcy, workouts and insolvency
matters. Mr. Marticello is rated as a Southern California Super
Lawyers Rising Star by Thompson Reuters and holds magna cum laude
honors from California Western School of Law.
-- Autumn D. Spaeth, a noted litigator, author and speaker,
concentrates her practice on business and insolvency related
litigation. She served as the co-chair of the Central District of
California Lawyer Representatives to the Ninth Circuit Judicial
Conference and chair of the Commercial Law and Bankruptcy Section
and the Legislative Resolutions Committee of the Orange County Bar
Association. Ms. Spaeth was recognized six times as a Southern
California Rising Star by Thompson Reuters and a Super Lawyer for
three years. Most recently, she was named to the 2014 Top
Bankruptcy Attorneys list by O.C. Metro magazine.
-- Philip E. Strok has received much acclaim and recognition for
his accomplishments as a bankruptcy attorney including being named
as one of the Best Lawyers in America for Bankruptcy and Creditor
Rights in the 2010-2014 editions of The Best Lawyers in America
list appearing in U.S. News & World Reports. Mr. Strok is a
member of the American Bankruptcy Institute and a member and past
president of the Orange County Bankruptcy Forum. A magna cum
laude graduate of Southwestern University Law School, Mr. Strok
served as editor of the Southwestern University Law Review.
The firm is headquartered in Costa Mesa and has an office in Los
Angeles to better serve clients around Southern California.
About Smiley Wang-Ekvall, LLP
Smiley Wang-Ekvall, LLP -- http://swelawfirm.com/-- is a premiere
insolvency, real estate and business litigation firm dedicated to
representing debtors, creditors, creditors' committees, equity
committees, trustees, asset purchasers, professionals and other
parties successfully navigate bankruptcy-related matters.
Boasting a team of highly-experienced transactional law litigators
and mediators, Smiley Wang-Ekvall is committed to understanding
client needs and combining critical thinking with innovative
advocacy tactics to achieve the best possible results. As a
specialized boutique firm with seven partners, Smiley Wang-Ekvall
values diplomacy and collaboration among its team, clientele and
industry peers. Headquartered in Costa Mesa and with an office in
Los Angeles, Smiley Wang-Ekvall serves clients locally, regionally
and nationwide.
* BOOK REVIEW: AS WE FORGIVE OUR DEBTORS: Bankruptcy and
Consumer Credit in America
--------------------------------------------------------
Authors: Teresa A. Sullivan, Elizabeth Warren, & Jay Westbrook
Publisher: Beard Books
Softcover: 370 Pages
List Price: $34.95
Review by: Susan Pannell
Order your personal copy today at http://is.gd/29BBVw
So you think you know the profile of the average consumer
debtor: either deadbeat slouched on a sagging sofa with a three-
day growth on his chin or a crafty lower-middle class type
opting for bankruptcy to avoid both poverty and responsible debt
repayment.
Except that it might be a single or divorced female who's the
one most likely to file for personal bankruptcy protection, and
her petition might be the last stage of a continuum of crises
that began with her job loss or divorce. Moreover, the dilemma
might be attributable in part to consumer credit industry that
has increased its profitability by relaxing its standards and
extending credit to almost anyone who can scribble his or her
name on an application.
Such are among the unexpected findings in this painstaking study
of 2,400 bankruptcy filings in Illinois, Pennsylvania, and Texas
during the seven-year period from 1981 to 1987. Rather than
relying on case counts or gross data collected for a court's
administrative records, as has been done elsewhere, the authors
use data contained in the actual petitions. In so doing, they
offer a unique window into debtors' lives.
The authors conclude that people who file for bankruptcy are, as
a rule, neither impoverished families nor wily manipulators of
the system. Instead, debtors are a cross-section of America. If
one demographic segment can be isolated as particularly debt-
prone, it would be women householders, whom the authors found
often live on the edge of financial disaster. Very few debtors
(3.7 percent in the study) were repeat filers who might be
viewed as abusing the system, and most (70 percent in the study)
of Chapter 13 cases fail and become Chapter 7s. Accordingly, the
authors conclude that the economic model of behavior--which
assumes a petitioner is a "calculating maximizer" in his in his
decision to seek bankruptcy protection and his selection of
chapter to file under, a profile routinely used to justify
changes in the law--is at variance with the actual debtor
profile derived from this study.
A few stereotypes about debtors are, however, borne out. It is
less than surprising to learn, for example, that most debtors
are simply not as well-off as the average American or that while
bankrupt's mortgage debts are about average, their consumer
debts are off the charts. Petitioners seem particularly
susceptible to the siren song of credit card companies. In the
study sample, creditors were found to have made between 27
percent and 36 percent of their loans to debtors with incomes
below $12,500 (although the loans might have been made before
the debtors' income dropped so low). Of course, the vigor with
which consumer credit lenders pursue their goal of maximizing
profits has a corresponding impact on the number of bankruptcy
filings.
The book won the ABA's 1990 Silver Gavel Award. A special 1999
update by the authors is included exclusively in the Beard Book
reprint edition.
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com by e-mail.
On Thursdays, the TCR delivers a list of recently filed
Chapter 11 cases involving less than $1,000,000 in assets and
liabilities delivered to the nation's bankruptcy courts. The
list includes links to freely downloadable of these small-dollar
petitions in Acrobat PDF documents.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
The Sunday TCR delivers securitization rating news from the week
then-ending.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine
Tumanda, Valerie Udtuhan, Howard C. Tolentino, Carmel Paderog,
Meriam Fernandez, Joel Anthony G. Lopez, Cecil R. Villacampa,
Sheryl Joy P. Olano, 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.
*** End of Transmission ***