/raid1/www/Hosts/bankrupt/TCR_Public/150225.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Wednesday, February 25, 2015, Vol. 19, No. 56
Headlines
ADVANCED MICRO DEVICES: Approves $517K EIP Bonuses
AIR CANADA: Fitch Raises Issuer Default Rating to 'B+'
ALTEGRITY INC: Has Interim Authority to Tap $22.5MM in DIP Loans
ALTEGRITY INC: Hires AlixPartners as Restructuring Advisor
ALTEGRITY INC: Hires Young Conaway as Bankruptcy Co-counsel
ALTEGRITY INC: Taps Debevoise & Plimpton as Attorneys
ALTEGRITY INC: Taps Evercore Group as Financial Advisor and Banker
AMERICAN INT'L: Closing Arguments in Bailout Trial Set for April 22
AMERICAN RESOURCES: Files Liquidating Chapter 11 Plan
ANACOR PHARMACEUTICALS: Venrock Stake Down to 3.8%
ARMSTRONG WORLD: To Separate into Two Public Companies
BAYONNE ENERGY: Moody's Affirms 'B1' Senior Secured Ratings
BRIAN FAHEY: Unpaid Taxes in Late-Filed Return Can't Be Discharged
BROOKLYN NAVY: Moody's Affirms 'Caa1' Senior Secured Debt Rating
C.H.I. OVERHEAD: Moody's Alters Outlook to Stable & Affirms B3 CFR
COLLAVINO CONSTRUCTION: Section 341 Meeting Set for March 23
CRYOPORT INC: Gets $50,000 From Private Placement
DAUGHTERS OF CHARITY: Could Go Bankrupt If Sale to Prime Fails
DAWN DEY: Fabricated Evidence Falls Short of Fraud on Court
DCP MIDSTREAM: S&P Cuts Corp. Credit Rating to 'BB'; Outlook Neg
DELIA*S INC: Files Schedules of Assets and Debt
DOW CORNING: 6th Cir. Says Breast Implant Claim Under NC Law
DREAMWORKS ANIMATION: Moody's Cuts Corporate Family Rating to Ba3
ENERGY TRANSFER: S&P Assigns BB Rating on $500MM Term Loan Due 2019
ERF WIRELESS: Issues 31 Million Common Shares
EVEREST COLLEGES: Files for Bankruptcy
FAIRFAX FINANCIAL: S&P Assigns BB Rating on C$200MM Pref. Stock
FIFTH STREET: Fitch Cuts Long-Term Issuer Default Rating to 'BB+
GARLOCK SEALING: ACC Wants Plan Objection in Solicitation Package
GARLOCK SEALING: Files Disclosure Statement for 2nd Amended Plan
GENERAL MOTORS: Ignition-Switch Death Toll Rises to 57 People
GENERAL MOTORS: Trial Plan Put Forth for Ignition-Swith Lawsuits
GRANITE STATE PLASMA: Selling Assets HMGS; Counterbids Due March 3
GREEN MOUNTAIN: Can File Bankr. Plan Exclusivity Thru May 21
GREEN MOUNTAIN: Lease Decision Period Extended to March 23
HEI INC: Gets Green Light to Sell Two Facilities
HEPAR BIOSCIENCE: Section 341(a) Meeting Set for March 25
HOME LOAN: S&P Puts 'B+' ICR on CreditWatch Negative
IMPLANT SCIENCES: Incurs $6.2 Million Net Loss in Second Quarter
INTERLEUKIN GENETICS: Merlin Biomed Has 5.2% Stake as of Dec. 31
INTERPUBLIC GROUP: S&P Puts 'BB+' CCR on CreditWatch Positive
ITUS CORP: Robert Berman Reports 6.2% Stake as of Feb. 18
IVANHOE ENERGY: Receives Delisting Notice From Nasdaq
KIOR INC: April 3 Hearing on MDA's Bid to Sue KFT Trust
KOSMORS INC: Files for Chapter 11; Sec. 341(a) Meeting on March 16
LEHMAN BROTHERS: LBI Trustee Files Preliminary Realization Report
Lewis Titterton Reports 6.5% Stake as of Feb. 18
LIBERTY TIRE: S&P Lowers CCR to 'CC' on Restructuring
LIFE PARTNERS: Notes of Risks on Appointment of Trustee
LONGVIEW POWER: Plan Confirmation Hearing to Begin March 16
LONGVIEW POWER: Plant to Get Emission-Control Upgrades
MARCK PROPERTIES: Files for Ch 11; Sec. 341(a) Meeting on March 23
MARIETTA AREA HEALTH: Fitch Rates $60MM Series 2015 Bonds 'BB'
MARKWEST ENERGY: S&P Affirms 'BB' CCR; Outlook Stable
MILESTONE SCIENTIFIC: Edward Zelnick Named to Board of Directors
MOBIVITY HOLDINGS: Appoints Christopher Meinerz as CFO
MORGAN STANLEY EASTERN: Stockholders Approve Liquidation Plan
MUSCLEPHARM CORP: Issues 170,000 in Restricted Shares
MUSCLEPHARM CORP: Landes Reports 7.6% Stake as of Dec. 31
NATIONAL MENTOR: Moody's B2 CFR Unaffected by $55MM Add-on Loan
NET DATA CENTERS: Case Summary & 20 Largest Unsecured Creditors
NEXT 1 INTERACTIVE: Michael Craig Quits From Board
NIELSEN FINANCE: $650MM Notes Add-on No Impact on Moody's Ratings
PARAMOUNT RESOURCES: Moody's Affirms 'B2' CFR, Outlook Positive
PARK FLETCHER: Section 341(a) Meeting Scheduled for March 20
PRONERVE HOLDINGS: Case Summary & 30 Largest Unsecured Creditors
PRONERVE: Files Chapter 11 Bankruptcy Petition to Facilitate Sale
QUANTUM FUEL: Capital Ventures Reports 9.9% Stake as of Feb. 12
QUIZNOS: Franchisee Group Optimistic About Co. After Bankruptcy
RAFAIL THEOKARY: 3rd Cir. Affirms Dismissal of Ch. 7 Adversary Suit
REED AND BARTON: Lifetime Brands Enters Into Asset Purchase Deal
REED AND BARTON: U.S. Trustee Objects to Proposed Rockland DIP Loan
RESEARCH NOW: Moody's Assigns B2 CFR & Rates $290MM 2021 Loan Ba3
RESPONSE BIOMEDICAL: Attains Milestone in Co-Development Alliance
RETROPHIN INC: Releases Oversight Committee Findings to Date
REVEL AC: Could be Forced to Liquidation if no Buyer Emerges
REVEL AC: Glenn Straub in New Deal to Buy Casino for $82-Mil.
RIVER CITY: Court Extends Deadline to Remove Suits to June 26
RIVER CITY: March 3 Hearing on Bid to Use Cash Collateral
RIVER PROPERTIES: Files for Chapter 7 Liquidation
ROBERT PLAN: Trustee Can't Pay Fees from 401(k) Plan Assets
S.E.V. INVESTMENTS: Case Summary & 15 Largest Unsecured Creditors
SALADWORKS LLC: Can Hire UpShot as Claims and Noticing Agent
SALIX PHARMACEUTICALS: Moody's Reviews 'B1' CFR for Upgrade
SAMUEL WYLY: Must Pay Ex-Wife $500,000 a Year Despite Bankruptcy
SANUWAVE HEALTH: RA Capital Reports 9.9% Stake as of Dec. 31
SILICON GENESIS: Section 341(a) Meeting Set for March 11
SITEL WORLDWIDE: S&P Lowers CCR to 'CCC+' on Weak Liquidity
SOUTHCROSS ENERGY: S&P Affirms B CCR & Alters Outlook to Negative
STOCKTON, CA: Plans to Exit Bankruptcy Today
TRANSGENOMIC INC: White Pine Reports 5.5% Stake
TURNER GRAIN: Committee Can Hire Lueken Dilks, Wooten as Counsel
UNI-PIXEL INC: Shareholder Suit Settlement Hearing on April 13
US COAL: Feb. 27 Hearing on Committee's Bid to Sue Lenders
UTEX INDUSTRIES: Moody's Affirms 'B3' CFR, Outlook Negative
VALEANT PHARMACEUTICALS: Moody's Affirms Ba3 Corp. Family Rating
VALEANT PHARMACEUTICALS: S&P Puts BB Sec. Debt Rating on Watch Pos.
VANGUARD SYNFUELS: Case Summary & 20 Largest Unsecured Creditors
VERISGOLD CORP: Obtains Extension of CCAA Stay Period
VERITEQ CORP: John Stetson Reports 8.3% Stake as of Feb. 19
VIGGLE INC: Adage Capital Reports Less Than 1% Stake as of Dec. 31
VIGGLE INC: DAG Ventures No Longer a Shareholder as of Dec. 31
VIGGLE INC: Gets $750,000 New Loan From Chairman and CEO
VISCOUNT SYSTEMS: Amends Series A Certificate of Designation
WORLD SURVEILLANCE: Barbara Johnson Quits as VP Gen. Counsel
WPCS INTERNATIONAL: Issues 1 Million Common Shares
[*] S&P Takes Rating Actions on 4 Midstream Energy Companies
[*] Stale Claim Doesn't Violate Fair Debt Collection Practices Act
[] Kaufman, Eisenberg, Victor Bag M&A Advisor Leadership Award
[] PwC's Mandarino Bags Turnaround Consultant of the Year Award
[] Thompson Hine Lawyers Among Georgia Super Lawyers List
*********
ADVANCED MICRO DEVICES: Approves $517K EIP Bonuses
--------------------------------------------------
The Compensation Committee of the Board of Directors of Advanced
Micro Devices, Inc., on Feb. 11, 2015, approved the following
annual cash performance bonuses under the EIP to the named
executive officers:
Annual Cash
Performance
Names Executive Officers Bonuses
------------------------ -----------
Devinder Kumar $169,950
Senior Vice President and
Chief Financial Officer
John R. Byrne $165,825
Senior Vice President and
Former General Manager,
Computing and Graphics Business Group
Mark D. Papermaster $181,500
Chief Technology Officer and
Senior Vice President -
Technology and Engineering
The Board also approved $248,135 in annual cash performance bonus
under the EIP for the Company's President and Chief Executive
Officer Lisa T. Su.
Pursuant to the EIP, the annual cash performance bonuses were based
on the Company's performance during two semi-annual performance
periods as evaluated against the following pre-established
Company-wide financial measures: adjusted non-GAAP net income,
revenue, adjusted non-GAAP free cash flow, and adjusted non-GAAP
gross margin. The First-Half Performance Period was weighted at
33.0% and the Second-Half Performance Period was weighted at 67.0%.
Under the terms of the EIP, the Compensation Committee may in its
sole discretion eliminate or reduce any award payable under the
EIP.
The annual cash performance bonuses under the EIP for 2014 for the
Company's president and chief executive officer and each of the
other Named Executive Officers is 33.0% of their respective 2014
target cash bonus opportunity. The funding and payment of any cash
performance bonuses under the EIP for fiscal 2014 was contingent
upon the Company having a cash balance of at least $600 million on
the last day of each quarter of fiscal 2014. The Company exceeded
this cash balance on the last day of each quarter of fiscal 2014.
These bonus awards will be paid in March 2015.
In addition, as previously disclosed, in October 2014 the Company
entered into a Transition, Separation Agreement and Release with
Rory P. Read, the Company's former president and chief executive
officer. Under the terms of this agreement, the Company agreed to
pay Mr. Read the cash performance bonus he would have received
under the EIP for the 2014 fiscal year had his employment not
terminated. As a result, on Feb. 12, 2015, the Board approved the
cash performance bonus under the EIP for Mr. Read for the 2014
fiscal year of $495,000, which is 33.0% of his 2014 target cash
bonus opportunity. This amount will be paid to Mr. Read in March
2015.
President and CEO Replacement Equity Awards
On Dec. 26, 2014, the full Board, including members of the
Compensation Committee, voided and rescinded (a) performance-based
restricted stock unit awards granted to Dr. Su on Aug. 12, 2014,
and Oct. 31, 2014, covering, in the aggregate, a target number of
1,705,364 shares, and (b) 50,000 of the 173,937 restricted stock
units subject to a restricted stock unit award granted to Dr. Su on
Oct. 31, 2014. The action to void and rescind the Voided Equity
Awards was taken in response to a stockholder derivative action
received by the Company on Nov. 24, 2014, on the grounds that the
Company had granted equity awards to Dr. Su during calendar year
2014 in excess of the per calendar year individual share limit in
the Company's 2004 Equity Incentive Plan. Rather than litigate
this technical issue, the Company believed resolving this
technicality quickly was a better solution for the Company and its
stockholders.
In voiding and rescinding the Voided Equity Awards, the full Board
also determined that the total compensation package provided for in
Dr. Su's employment agreement, including the equity compensation,
was appropriate and aligned with stockholders' interests. Having
reaffirmed that the compensation it had promised to Dr. Su was
appropriate and reasonable, the full Board determined that the
Company intended to return Dr. Su's equity compensation to the
level it should have been prior to the action to void and rescind
the Voided Equity Awards at or near the earliest practicable
opportunity available to the Company, subject to law and the terms
of the 2004 Plan.
On Feb. 12, 2015, the Board approved 500,000 retricted stock units
and 1,475,000 performance-based restricted stock units to Dr. Su
having determined that it was now advisable and in the best
interest of the Company to grant Dr. Su awards of performance-based
restricted stock units and an award of restricted stock units in an
effort to partially return Dr. Su's equity compensation to the
level it was prior to the action to void and rescind the Voided
Equity Awards, subject to law and the terms of the 2004 Plan.
The Board intends to return the remaining Voided Equity Awards to
Dr. Su at or near the earliest practicable opportunity available to
the Company, subject to law and the terms of the 2004 Plan.
About Advanced Micro Devices
Sunnyvale, California-based Advanced Micro Devices, Inc., is a
global semiconductor company. The Company's products include x86
microprocessors and graphics.
For the year ended Dec. 27, 2014, the Company reported a net loss
of $403 million on $5.50 billion of net revenue compared to a net
loss of $83 million on $5.29 billion of net revenue for the year
ended Dec. 28, 2013.
As of Dec. 27, 2014, Advanced Micro had $3.76 billion in total
assets, $3.58 billion in total liabilities and $187 million in
total stockholders' equity.
* * *
In August 2013, Standard & Poor's Ratings Services revised its
outlook on Advanced Micro Devices to negative from stable. At the
same time, S&P affirmed its 'B' corporate credit and senior
unsecured debt ratings on AMD.
As reported by the TCR on June 5, 2014, Fitch Ratings had upgraded
the long-term Issuer Default Rating (IDR) for AMD (NYSE: AMD) to
'B-' from 'CCC'. The upgrade primarily reflects AMD's improved
financial flexibility from recent refinancing activity, which
extends meaningful debt maturities until 2019.
In the Feb. 4, 2013, edition of the TCR, Moody's Investors Service
lowered AMD's corporate family rating to 'B2' from 'B1'. The
downgrade of the corporate family rating to 'B2' reflects AMD's
prospects for weaker operating performance and liquidity profile
over the next year as the company commences on a multi-quarter
strategic reorientation of its business in the face of a
challenging macro environment and a weak PC market.
AIR CANADA: Fitch Raises Issuer Default Rating to 'B+'
------------------------------------------------------
Fitch Ratings has upgraded Air Canada (AC) to 'B+' from 'B.' The
Rating Outlook is Stable. In addition, Fitch has upgraded AC's
senior secured ratings to 'BB+/RR1' from 'BB/RR1' and AC's senior
unsecured ratings to 'B/RR5' from 'B-/RR5'.
Fitch has also affirmed the ratings on the Air Canada 2013-1 Class
A certificates at 'A'. Fitch has upgraded the Air Canada 2013-1
Class B certificates to 'BBB-' from 'BB+' and the Class C
certificates to 'BB' from 'BB-'.
The ratings upgrade is supported by Air Canada's improving
financial results, successful cost cutting initiatives, pension
surplus, adequate financial flexibility, and lower fuel prices.
Fitch believes that lower fuel costs and AC's cost cutting
initiatives could produce notable margin expansion in 2015.
Importantly, Fitch expects AC to use any additional cash generated
in the coming year to improve its credit profile by funding capital
expenditures or addressing debt maturities. The upgrade considers
the recently ratified collective bargaining between Air Canada and
its pilots union which reduces the near-term risk of labor
disruptions. Fitch also notes that the first full year of
operations of its low-cost airline rouge have proven successful.
The launch of rouge was seen as a potential risk, and while the
operation is still in its infancy, Fitch is now has more confidence
that the rouge business strategy may prove successful. The ratings
are also supported by the company's leading market position in
Canada.
While Fitch believes that Air Canada's credit profile is improving,
notable risks still remain. Concerns include significant upcoming
aircraft deliveries that will pressure cash flows and likely drive
debt balances higher beyond 2015, heavy competition from WestJet,
and a fluctuating USD/CAD exchange rate. Other concerns include
those that are typical of the airline industry, such as a high
degree of operating leverage, cyclicality, and an exposure to
exogenous shocks such as disease or acts of terrorism.
Key Rating Drivers:
Improving Financial Performance: Air Canada's financial performance
has improved over the past year as the company makes strides toward
its goal of reducing unit costs by 15% from 2012 levels, a trend
which should continue over the intermediate term. Fitch expects Air
Canada's unit costs to benefit in 2015 from increased flying of
efficient aircraft. AC is scheduled to receive five additional 787s
in 2015 after receiving its first six in 2014. Unit costs will also
benefit from the continued growth of AC's rouge. The rouge fleet is
expected to grow from 28 aircraft to 36 by year-end 2015, with
those incremental aircraft operating at a significant CASM
reduction compared to AC's mainline flying.
Regional operating costs are expected to improve following the
renegotiation of the capacity purchase agreement between Air Canada
and its largest regional operator, Chorus Aviation. The new
contract moves to a fixed fee structure and away from the previous
cost-plus structure. It also calls for a smaller total fleet
featuring larger gauged aircraft.
Air Canada's CASM ex-fuel was down by 2.6% in 2014 reflecting the
benefits of the cost initiatives taken over the past several years.
The company is experiencing the benefit of flying its reconfigured,
high-density, 777s on long-haul routes, as well as the lower
operating costs of the 787s, and the growth of flying at rouge.
Stable Demand Environment: On the revenue side, the demand
environment for air travel in Canada and the U.S. appears stable.
Fitch expects modest macroeconomic growth in those two markets in
2015 which should drive increased traffic in the near term.
Canadian domestic and U.S. transborder operations make up 57% of
AC's passenger revenue. While demand appears steady, unit revenues
are likely to trend lower with both Air Canada and its main rival
Westjet planning to add domestic capacity in 2015. For its part,
Air Canada anticipates some yield pressure as a consequence of
growing long-haul international and leisure passengers. Fitch
expects lower unit revenues to be offset by declining unit costs
from flying aircraft with denser seating arrangements and with the
continued growth of rouge.
System-wide, Air Canada expects to grow capacity between 9%-10% in
2015, which is significantly higher than most other large North
American airlines. While the total amount of growth is substantial,
much of the extra capacity will be added at low incremental costs,
either by adding routes at rouge or by flying larger gauge aircraft
such as the 787 in place of 767s.
Long-term Pilot Contract: Fitch views the ratification of a new
10-year contract with AC's pilot union as a credit positive. The
long-term of the new contract provides some visibility around wage
rates and reduces the risk of possible labor interruptions.
Ratification of a new contract more than a year ahead of the
scheduled expiration date of the previous contract represents a
dramatic change in labor relations compared to the previous round
of negotiations in 2012 that led to work disruptions and ultimately
had to be settled in arbitration. The new contract also provides AC
with some new flexibility as to the narrow body/wide body mix at
rouge and added flexibility in Air Canada's regional operations.
Leverage Remains a Concern: Air Canada remains highly leveraged.
Although Fitch expects AC's total debt balance to increase over the
next two years, leverage may come down as operating margins improve
on decreased unit costs and lower fuel prices. Total adjusted
debt/EBITDAR has decreased to an estimated 4.7x at year-end 2014
from 4.8x the year prior with AC's growing EBITDAR offsetting a
$910 million increase in on-balance sheet debt. Fitch notes that
AC's leverage remains at the high end of its peer group; however,
leverage levels for the industry have come down in recent years.
Financial Flexibility: Air Canada's liquidity is supportive of the
ratings upgrade. At year end the company had a cash and short-term
investments balance of $2.3 billion and an undrawn revolver of $210
million. Total liquidity is equal to 19% of LTM revenue, and is
well above AC's minimum cash target of $1.7 billion. While AC's
liquidity balance is sizeable, Fitch expects that the company will
be required to borrow incrementally over the next two years to fund
upcoming aircraft deliveries.
Fitch expects free cash flow (FCF) to be around zero in 2015 before
likely turning negative next year. Air Canada is making heavy
investments in its fleet after underinvesting between 2009 and
2012. As a result capital expenditures are expected to be high, and
FCF will be pressured. While the heavy upcoming capital
expenditures represent a concern, Fitch believes that AC's fleet
renewal represents an important part of its business plan. The 787s
and 777s coming in to the fleet over the next couple of years will
operate at a lower unit cost, and will further AC's efforts towards
expanding its international footprint.
Reduced Pension Risk: The status of Air Canada's pension plans has
significantly improved over the last two years. AC estimates that
its pension plans are in a surplus position of $780 million on a
solvency basis as of year-end 2014 compared to a deficit of $3.7
billion two years ago. AC is required to make minimum contributions
of $200 million/year based on its current agreement with the
Canadian government. However, if the pension plans remain fully
funded, Air Canada may decide to exit this agreement as early as
this year, which would significantly reduce required cash
contributions. The status of Air Canada's pension plan is a credit
positive compared to carriers like Delta and American that maintain
large unfunded pension deficits.
Recovery Ratings: Fitch's recovery analysis reflects a scenario in
which a distressed enterprise value is allocated to the various
debt classes. The 'RR1' recovery rating on ACs first- and
second-lien secured debt reflects Fitch's assumption that all
secured debtholders would receive superior recovery based on the
estimate of AC's going concern enterprise value. The 'RR5' recovery
rating on AC's unsecured notes reflects an expected recovery at the
high end of the 10%-30% range driven by the notes' subordinate
position within Air Canada's debt structure which primarily
consists of secured obligations.
Key Assumptions:
Fitch's key assumptions within the rating case for AC include:
Stable demand for air travel in Canada and the U.S. in the near
term.
Fitch expects yields to decline marginally through the
forecast period as AC adds capacity focused on leisure travel.
Fitch's forecast includes a conservative fuel assumption for 2015
which is above the current spot rate. Fitch assumes fuel prices
increase thereafter.
Lower fuel prices combined with AC's cost cutting initiatives
are expected to produce notable margin expansion in 2015.
Fitch expects AC's debt balances to rise over the next two years
as the company issues debt to fund aircraft deliveries.
Rating Sensitivities:
Fitch does not anticipate a positive rating action in the near term
as heavy capital expenditures will likely lead to increased
borrowing. However, future actions that may individually or
collectively cause Fitch to take a positive rating action include:
-- Continued leverage reduction with adjusted debt/EBITDAR
sustained around or below 4x;
-- Successful cost control efforts leading to EBITDAR margins
exceeding 15%, EBIT margins improving towards 10%;
-- Better than expected (neutral or positive) FCF generation.
Future actions that may individually or collectively cause Fitch to
take a negative rating action include:
-- Weaker than expected margin performance or higher than
expected borrowing causing leverage to reach or exceed 5x;
-- Weaker than expected financial performance causing FCF
to be notably below Fitch's expectations;
-- A decline in the company's EBIT margin to the low single
digits, EBITDAR margins into the high single digits;
-- A change in management strategy to direct cash to dividends/
share repurchases at the expense of a healthy balance sheet.
2013-1 EETC:
Fitch's senior tranche EETC ratings are primarily based on a
top-down collateral analysis. Since the ratings were previously
reviewed, collateral values for the 777-300ERs in this pool have
depreciated by slightly more than Fitch's initial expectations.
This is based on the most recent data available from Fitch's
independent appraiser. However, the transaction remains
significantly overcollateralized, and comfortably passes the 'A'
category stress scenario. Therefore, the ratings were affirmed at
'A'.
Subordinated tranche ratings are linked to Air Canada's IDR, and
therefore the ratings have been upgraded to 'BBB-' and 'BB' for the
B and C tranches, respectively.
Subordinated tranche ratings are adjusted from Air Canada's IDR
based on three primary factors; (1) affirmation factor, (2)
presence of a liquidity facility, and (3) recovery prospects. Fitch
considers the affirmation factor for this collateral pool to be
high resulting in a plus-3 notch adjustment (maximum is 3) for the
B tranche. The B tranche also features an 18-month liquidity
facility, providing a further plus-1 notch adjustment. The
liquidity facility is provided by Natixis (rated 'A/F1'/Stable
Outlook) No adjustment has been made for recovery, resulting in a
rating of 'BB+', plus-4 notches above Air Canada's IDR. The
two-notch differential between the B and C tranche reflects the C
tranche's subordinate position.
Fitch has taken the following rating actions:
Air Canada
-- Long-term IDR upgraded to 'B+' from 'B';
-- Senior secured first-lien upgraded to 'BB+/RR1' from 'BB/RR1'
-- Senior secured second-lien debt upgraded to 'BB+/RR1' from
'BB/RR1'
-- Senior unsecured debt upgraded to 'B/RR5' from 'B-/RR5'
Air Canada Pass-Through Trust Series 2013-1;
-- Class A certificates affirmed 'A';
-- Class B certificates upgraded to 'BBB-' from 'BB+';
-- Class C certificates upgraded to 'BB' from 'BB-'.
ALTEGRITY INC: Has Interim Authority to Tap $22.5MM in DIP Loans
----------------------------------------------------------------
Judge Laurie Selber Silverstein of the U.S. Bankruptcy Court for
the District of Delaware gave Altegrity, Inc., et al., interim
authority to obtain postpetition secured financing of up to
$22,500,000 from Cantor Fitzgerald Securities, as administrative
agent and collateral agent, for a consortium of lenders.
The DIP Lenders agreed to extend up to an aggregate principal
amount of $90,000,000. After a final hearing on the DIP financing,
the loan can increase to $45 million while the rest of the money
will be available upon the implementation of a Chapter 11 plan,
Bill Rochelle and Sherri Toub, bankruptcy columnists for Bloomberg
News, reported.
The Debtors also obtained interim authority to use cash collateral
securing their prepetition indebtedness. As of the Petition Date,
the Debtors had funded debt facilities in place with a face amount
of approximately $1.8 billion, of which approximately $1.6 billion
is secured debt and $140.2 million is unsecured debt.
Any objections to entry of a final order must be filed with the
Court and actually received by the notice parties by March 3, 2015,
and a final hearing to resolve any of those objections will be
scheduled for March 16, at 11:30 a.m. (ET).
A full-text copy of the Interim DIP Order with Budget is available
at http://bankrupt.com/misc/ALTEGRITYdipord0210.pdf
About Altegrity Inc.
Altegrity Inc. provides background investigations for the U.S.
government; employment background and mortgage screening for
commercial customers; technology-driven legal services and
software
for data management; and investigative, analytic, consulting, due
diligence, and security services. Altegrity is principally owned
by investment funds affiliated with Providence Equity Partners.
Altegrity Inc. and 37 of its affiliates filed Chapter 11
bankruptcy
petitions (Bankr. D. Del. Lease Case No. 15-10226) on Feb. 8,
2015.
Jeffrey S. Campbell signed the petitions as president and chief
financial officer. The Debtors disclosed total assets of $1.7
billion and total liabilities of $2.1 billion as of June 30, 2014.
M. Natasha Labovitz, Esq., Jasmine Ball, Esq., and Craig A.
Bruens,
Esq., at Debevoise & Plimpton LLP serve as the Debtors' counsel.
Joseph M. Barry, Esq., Ryan M. Bartley, Esq.,
and Edmon L. Morton, Esq., at Young, Conaway, Stargatt & Taylor,
LLP, act as the Debtors' Delaware and conflicts counsel.
Stephen Goldstein and Lloyd Sprung, at Evercore Group, LLC, are
the
Debtors' investment bankers. Kevin M. McShea and Carrianne J. M.
Basler, at Alixpartners LLP serve as the Debtors' restructuring
advisors. Prime Clerk LLC is the Debtors' claims and noticing
agent. PricewaterhouseCoopers LLP serves as the Debtors'
independent auditors.
ALTEGRITY INC: Hires AlixPartners as Restructuring Advisor
----------------------------------------------------------
Altegrity, Inc., et al., seek authorization from the U.S.
Bankruptcy Court for the District of Delaware to employ
AlixPartners LLP as restructuring advisor, nunc pro tunc to Feb. 8,
2015.
The Debtors require AlixPartners to:
-- assist the Debtors in developing a short-term cash flow
forecasting tool, variance reporting analysis and related
methodologies and assist with planning for alternatives as
requested by the Debtors;
-- assist in developing and implementing cash management
strategies, tactics and processes. Additionally, size the
Debtors' liquidity requirements in the sizing of a debtor-in-
possession budget;
-- provide assistance to management in connection with the
Debtors' development of their revised business plan and such
other related forecasts as may be required by the bank
lenders in connection with negotiations or by the Debtors for
other corporate purposes;
-- in collaboration with other advisors of the Debtors, assist
the Debtors' management in developing a balance sheet
restructuring strategy;
-- assist the Debtors and counsel in the analysis and strategy
for treatment of unsecured claims and liabilities subject to
compromise;
-- assist the Debtors in the development and implementation of
carve-out strategies and operational wind-down plans for
assets sold prior to or during the chapter 11 process;
-- assist the Debtors in the development and implementation of
potential alternative operational restructuring plans to
reduce costs and improve EBITDA;
-- assist the Debtors' management and professionals specifically
assigned to sourcing, negotiating and implementing any
financing, including DIP and exit financing facilities;
-- assist the Debtors' management in the analysis of foreign
EBITDA and the associated valuation of uncollateralized
Assets;
-- in collaboration with counsel and the Debtors' management,
develop first day motions to support the Debtors' chapter 11
strategy and to minimize the impact of the filing on the
Debtors' vendors, customers, employees and other
Stakeholders;
-- support the development of information for the Debtors'
claims agent to satisfy noticing requirements to the Debtors'
stakeholders;
-- assist with the preparation of the statement of affairs,
schedules, Monthly Operating Reports, Rule 2015.3 filings and
other regular reports required by the Court as well as
providing assistance in such areas as testimony before the
Court on matters that are within AlixPartners' areas of
Expertise;
-- assist as requested in analyzing preferences and other
avoidance actions;
-- assist the Debtors in the development of a strategy to
implement cut-off processes to segregate pre and post-
petition liabilities;
-- manage the claims and claims reconciliation processes;
-- assist in obtaining and presenting information required by
parties in interest in the Debtors' bankruptcy process
including official committees appointed by this Court;
-- assist the Debtors in developing analyses to satisfy plan
requirements, including the development of a multi-year
business plan, a schedule of sources and uses of proceeds to
implement the chapter 11 plan, an analysis detailing the
impact of the implementation of the plan on the Debtors
balance sheet and the development of a liquidation analysis
to satisfy the best interest test;
-- assist the Debtors in other business and financial aspects of
these chapter 11 cases, including, development of a
Disclosure Statement and Plan of Reorganization; and
-- assist with such other matters as may be requested that fall
within AlixPartners' expertise and that are mutually
agreeable.
AlixPartners will be paid at these hourly rates:
Managing Director $915-$1,055
Director $695-$850
Vice President $510-$615
Associate $350-$455
Analyst $305-$335
Paraprofessional $230-$250
Developer $190-$385
AlixPartners will also be reimbursed for reasonable out-of-pocket
expenses incurred.
AlixPartners often works for compensation that includes base fee
and contingent incentive compensation earned upon achieving
meaningful results. In these chapter 11 cases, pursuant to the
Engagement Letter, the Debtors and AlixPartners have agreed that
AlixPartners will earn a success fee of $1,500,000 (the "Success
Fee") if the Debtors (a) confirm a Chapter 11 plan of
reorganization that becomes effective; or (b) complete one or more
transactions that substantially transfer a significant portion
(i.e., more than two-thirds of the pro forma revenues or operating
assets) of the business as a going concern to another entity.
AlixPartners received advance retainer payments aggregating to
$600,000 (the "Retainer"). Pursuant to the Engagement Letter,
invoiced amounts have been offset against the Retainer and payments
on the invoices have been used to replenish the Retainer. During
the 90 days prior to the commencement of these chapter 11 cases,
the Debtors paid AlixPartners a total of $4,421,389.63, incurred in
providing services to the Debtors in contemplation of, and in
connection with, prepetition restructuring activities.
AlixPartners' current estimate is that it received unapplied
advance payments from the Debtors in excess of prepetition billings
of approximately $84,977.46, which is subject to final
determination after all prepetition billings and collections are
reconciled.
Kevin McShea, managing director with AlixPartners, assured the
Court that the firm is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code and does not
represent any interest adverse to the Debtors and their estates.
The Court for the District of Delaware will hold a hearing on the
application on March 10, 2015, at 11:30 a.m. Objections, if any,
are due March 3, 2015, at 4:00 p.m.
AlixPartners can be reached at:
Kevin McShea
ALIXPARTNERS, LLP
2000 Town Center, Suite 2400
Southfield, MI 48075
Tel: +1 (646) 746-2449
E-mail: kmcshea@alixpartners.com
About Altegrity Inc.
Altegrity Inc. provides background investigations for the U.S.
government; employment background and mortgage screening for
commercial customers; technology-driven legal services and software
for data management; and investigative, analytic, consulting, due
diligence, and security services. Altegrity is principally owned
by investment funds affiliated with Providence Equity Partners.
Altegrity Inc. and 37 of its affiliates filed Chapter 11 bankruptcy
petitions (Bankr. D. Del. Lease Case No. 15-10226) on Feb. 8, 2015.
Jeffrey S. Campbell signed the petitions as president and chief
financial officer. The Debtors disclosed total assets of $1.7
billion and total liabilities of $2.1 billion as of June 30, 2014.
M. Natasha Labovitz, Esq., Jasmine Ball, Esq., and Craig A. Bruens,
Esq., at Debevoise & Plimpton LLP serve as the Debtors' counsel.
Joseph M. Barry, Esq., Ryan M. Bartley, Esq., and Edmon L. Morton,
Esq., at Young, Conaway, Stargatt & Taylor, LLP, act as the
Debtors' Delaware and conflicts counsel. Stephen Goldstein and
Lloyd Sprung, at Evercore Group, LLC, are the Debtors' investment
bankers. Kevin M. McShea and Carrianne J. M. Basler, at
Alixpartners LLP serve as the Debtors' restructuring advisors.
Prime Clerk LLC is the Debtors' claims and noticing agent.
PricewaterhouseCoopers LLP serves as the Debtors' independent
auditors.
ALTEGRITY INC: Hires Young Conaway as Bankruptcy Co-counsel
-----------------------------------------------------------
Altegrity, Inc., et al., seek authorization from the U.S.
Bankruptcy Court for the District of Delaware to employ Young
Conaway Stargatt & Taylor, LLP as bankruptcy co-counsel and
conflicts counsel to the Debtors, nunc pro tunc to Feb. 8, 2015.
The professional services that Young Conaway will render to the
Debtors include, but shall not be limited to, the following:
(a) providing legal advice with respect to the Debtors' powers
and duties as debtors in possession in the continued
operation of their business, management of their
properties;
(b) pursuing confirmation of a plan and approval of a
disclosure statement;
(c) preparing, on behalf of the Debtors, necessary
applications, motions, answers, orders, reports, and other
legal papers;
(d) appearing in Court and protecting the interests of the
Debtors before the Court; and
(e) performing all other legal services for the Debtors that
may be necessary and proper in these proceedings.
Young Conaway will be paid at these hourly rates:
Edmon L. Morton $650
Joseph M. Barry $610
Ryan M. Bartley $420
Elizabeth S. Justison $310
Debbie Laskin, paralegal $250
Young Conaway will also be reimbursed for reasonable out-of-pocket
expenses incurred.
In accordance with the Engagement Agreement, Young Conaway received
a retainer in the amount of $350,000 on Jan. 7, 2015, in connection
with the planning and preparation of initial documents and its
proposed postpetition representation of the Debtors. In addition,
on Jan. 29, 2015, the Firm received $65,246 from the Debtors on
account of anticipated filing fees for these chapter 11 cases. A
portion of the Retainer has been applied to outstanding balances
existing as of the Commencement Date. The remainder will constitute
a general retainer as security for postpetition services and
expenses.
Edmon L. Morton, partner of Young Conaway, assured the Court that
the firm is a "disinterested person" as the term is defined in
Section 101(14) of the Bankruptcy Code and does not represent any
interest adverse to the Debtors and their estates.
Consistent with the U.S. Trustee's Appendix B—Guidelines for
Reviewing Applications for Compensation and Reimbursement of
Expenses Filed Under 11 U.S.C. section 330 by Attorneys in Larger
Chapter 11 Cases (the "U.S. Trustee Guidelines"), which became
effective on Nov. 1, 2013, Young Conaway stated:
-- Young Conaway has not agreed to a variation of its standard
or customary billing arrangements for this engagement;
-- None of the Firm's professionals included in this engagement
have varied their rate based on the geographic location of
these chapter 11 cases;
-- Young Conaway was retained by the Debtors pursuant to an
Engagement Agreement dated Dec. 17, 2014. The billing rates
and material terms of the prepetition engagement are the
same as the rates and terms described in the Application,
except with respect to annual adjustments made as of
Jan. 1, 2015; and
-- The Debtors will be approving a prospective budget and
staffing plan for Young Conaway's engagement for the
postpetition period as appropriate. In accordance with the
U.S. Trustee Guidelines, the budget may be amended as
necessary to reflect changed or unanticipated developments.
The Court for the District of Delaware will hold a hearing on the
application on March 10, 2015, at 11:30 a.m. Objections, if any,
are due March 3, 2015, at 4:00 p.m.
Young Conaway can be reached at:
Edmon L. Morton, Esq.
YOUNG CONAWAY STARGATT & TAYLOR, LLP
Rodney Square
1000 North King Street
Wilmington, DE 19801
Tel: (302) 571-6600
Fax: (302) 571-1253
E-mail: emorton@ycst.com
About Altegrity Inc.
Altegrity Inc. provides background investigations for the U.S.
government; employment background and mortgage screening for
commercial customers; technology-driven legal services and software
for data management; and investigative, analytic, consulting, due
diligence, and security services. Altegrity is principally owned
by investment funds affiliated with Providence Equity Partners.
Altegrity Inc. and 37 of its affiliates filed Chapter 11 bankruptcy
petitions (Bankr. D. Del. Lease Case No. 15-10226) on Feb. 8, 2015.
Jeffrey S. Campbell signed the petitions as president and chief
financial officer. The Debtors disclosed total assets of $1.7
billion and total liabilities of $2.1 billion as of June 30, 2014.
M. Natasha Labovitz, Esq., Jasmine Ball, Esq., and Craig A. Bruens,
Esq., at Debevoise & Plimpton LLP serve as the Debtors' counsel.
Joseph M. Barry, Esq., Ryan M. Bartley, Esq., and Edmon L. Morton,
Esq., at Young, Conaway, Stargatt & Taylor, LLP, act as the
Debtors' Delaware and conflicts counsel. Stephen Goldstein and
Lloyd Sprung, at Evercore Group, LLC, are the Debtors' investment
bankers. Kevin M. McShea and Carrianne J. M. Basler, at
Alixpartners LLP serve as the Debtors' restructuring advisors.
Prime Clerk LLC is the Debtors' claims and noticing agent.
PricewaterhouseCoopers LLP serves as the Debtors' independent
auditors.
ALTEGRITY INC: Taps Debevoise & Plimpton as Attorneys
-----------------------------------------------------
Altegrity, Inc., et al., seek authorization from the U.S.
Bankruptcy Court for the District of Delaware to employ Debevoise &
Plimpton LLP as attorneys, nunc pro tunc to Feb. 8, 2015.
The Debtors require Debevoise & Plimpton to:
(a) advise the Debtors with respect to their powers and duties
as debtors in possession in the continued management and
operation of their business and properties;
(b) advise and consult on the conduct of these chapter 11
cases, including all of the legal and administrative
requirements of operating in chapter 11;
(c) attend meetings and negotiate with representatives of the
Creditors and other parties in interest;
(d) take all necessary action to protect and preserve the
Debtors' estates, including prosecuting actions on the
Debtors' behalf, defending any action commenced against the
Debtors and representing the Debtors' interests in
negotiations concerning all litigation in which the Debtors
are involved, including objections to claims filed against
the Debtors' estates;
(e) prepare all pleadings, including motions, applications,
answers, orders, reports and papers necessary or otherwise
beneficial to the administration of the Debtors' estates;
(f) represent the Debtors in connection with obtaining
postpetition financing;
(g) advise the Debtors in connection with any potential sale of
assets;
(h) appear before the Court and any appellate courts to
represent the interests of the Debtors' estates before
those courts;
(i) consult with the Debtors regarding tax matters;
(j) take any necessary action on behalf of the Debtors to
negotiate, prepare on behalf of the Debtors and obtain
approval of a chapter 11 plan and all documents related
thereto; and
(k) perform all other necessary or otherwise beneficial legal
services for the Debtors in connection with the prosecution
of these chapter 11 cases, including (i) analyzing the
Debtors' leases and contracts and the assumptions,
rejections or assignments thereof, (ii) analyzing the
validity of liens against the Debtors and (iii) advising
the Debtors on corporate and litigation matters.
Debevoise & Plimpton will be paid at these hourly rates:
M. Natasha Labovitz, Partner $1,195
Jasmine Ball, Partner $1,160
Craig A. Bruens, Counsel $930
Scott B. Selinger, Associate $840
Partners $900–$1,250
Counsel $850–$1,065
Associates $465–$885
Paraprofessionals $145–$505
Debevoise & Plimpton will also be reimbursed for reasonable
out-of-pocket expenses incurred.
Consistent with the terms of the Engagement Letter, on Oct. 16,
2014, the Debtors paid $400,000 to Debevoise as a classic retainer.
Subsequently, the Debtors paid to Debevoise an additional classic
retainer of $400,000 on Dec. 1, 2014. The Debtors' retainer
balance with Debevoise also increased by approximately $49,976 on
Jan. 15, 2015, and approximately $546,008 on Jan. 20, 2015, on
account of two at-closing payments of counsel fees from the
proceeds of asset sales that were consummated shortly prior to the
Commencement Date.
M. Natasha Labovitz, partner of Debevoise & Plimpton, assured the
Court that the firm is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code and does not
represent any interest adverse to the Debtors and their estates.
Pursuant to the Appendix B Guidelines for Reviewing Applications
for Compensation and Reimbursement of Expenses Filed Under United
States Code by Attorneys in Larger Chapter 11 Cases (the "2013 UST
Guidelines"), Debevoise & Plimpton disclosed:
-- The billing rates and material financial terms for
Debevoise's prepetition engagement by the Debtors are as set
forth herein. Other than ordinary course adjustments to
billing rates in December 2014 applicable to all clients, no
adjustments were made to either the billing rates or the
material financial terms of Debevoise's employment by the
Debtors as a result of the filing of these chapter 11 cases.
-- The Debtors will be approving a prospective budget and
staffing plan for Debevoise's engagement for the
postpetition period as appropriate. In accordance with the
U.S. Trustee Guidelines, the budget may be amended as
necessary to reflect changed or unanticipated developments.
The Court for the District of Delaware will hold a hearing on the
application on March 10, 2015, at 11:30 a.m. Objections, if any,
are due March 3, 2015, at 4:00 p.m.
Debevoise & Plimpton can be reached at:
M. Natasha Labovitz, Esq.
DEBEVOISE & PLIMPTON LLP
919 Third Avenue
New York, NY 10022
Tel: (212) 909-6000
Fax: (212) 909-6836
E-mail: nlabovitz@debevoise.com
About Altegrity Inc.
Altegrity Inc. provides background investigations for the U.S.
government; employment background and mortgage screening for
commercial customers; technology-driven legal services and software
for data management; and investigative, analytic, consulting, due
diligence, and security services. Altegrity is principally owned
by investment funds affiliated with Providence Equity Partners.
Altegrity Inc. and 37 of its affiliates filed Chapter 11 bankruptcy
petitions (Bankr. D. Del. Lease Case No. 15-10226) on Feb. 8, 2015.
Jeffrey S. Campbell signed the petitions as president and chief
financial officer. The Debtors disclosed total assets of $1.7
billion and total liabilities of $2.1 billion as of June 30, 2014.
M. Natasha Labovitz, Esq., Jasmine Ball, Esq., and Craig A. Bruens,
Esq., at Debevoise & Plimpton LLP serve as the Debtors' counsel.
Joseph M. Barry, Esq., Ryan M. Bartley, Esq., and Edmon L. Morton,
Esq., at Young, Conaway, Stargatt & Taylor, LLP, act as the
Debtors' Delaware and conflicts counsel. Stephen Goldstein and
Lloyd Sprung, at Evercore Group, LLC, are the Debtors' investment
bankers. Kevin M. McShea and Carrianne J. M. Basler, at
Alixpartners LLP serve as the Debtors' restructuring advisors.
Prime Clerk LLC is the Debtors' claims and noticing agent.
PricewaterhouseCoopers LLP serves as the Debtors' independent
auditors.
ALTEGRITY INC: Taps Evercore Group as Financial Advisor and Banker
------------------------------------------------------------------
Altegrity, Inc., et al., seek authorization from the U.S.
Bankruptcy Court for the District of Delaware to employ Evercore
Group LLC as financial advisor and investment banker, nunc pro tunc
to Feb. 8, 2015.
The Debtors require Evercore Group to:
(a) review and analyze the Debtors' business, operations and
financial projections;
(b) advise and assist the Debtors in a Restructuring, Financing
and sale transaction, if the Debtors determine to undertake
such a transaction;
(c) if the Debtors pursue a Restructuring, providing financial
advice in developing and implementing a Restructuring,
including:
- assisting the Debtors in developing a Plan;
- advising the Debtors on tactics and strategies for
negotiating with various stakeholders regarding the
Plan;
- providing testimony, as necessary, with respect to
matters on which Evercore has been engaged to advise the
Debtors in any proceedings under the Bankruptcy Code that
are pending before the Court; and
- providing the Debtors with other financial restructuring
advice as Evercore and the Debtors may deem appropriate.
(d) If the Debtors pursue a Financing, assisting the Debtors
in:
- structuring and effecting a Financing;
- identifying potential Investors and, at the Debtors'
request, contacting such Investors; and
- working with the Debtors in negotiating with potential
Investors
(e) if the Debtors pursue a Sale, assisting the Debtors in:
- structuring and effecting a Sale;
- identifying interested parties and potential acquirors
and, at the Debtors' request, contacting such interested
parties and potential acquirors; and
- advising the Debtors in connection with negotiations with
potential interested parties and acquirors and aiding in
the consummation of a Sale transaction.
In consideration of the services to be provided by Evercore, and as
more fully described in the Engagement Letter, subject to the
Court's approval, the Debtors have agreed to pay Evercore the
proposed compensation set forth in the Engagement Letter (the "Fee
Structure"):
-- Monthly Fee: $200,000 per month, with 100% of the first
four monthly fees and 50% of any subsequent monthly fees
credited against the Restructuring Fee.
-- Restructuring Fee: 0.50% of the amount of any restructured
debt, excluding the Zero Coupon Junior Subordinated Notes
due 2022. Provided that, in the event that the debt under
the First Lien Debt Agreements (the "First Lien Debt") is
reinstated, the Restructuring Fee with respect to such First
Lien Debt will be 0.25% of the amount of such First Lien
Debt so reinstated, and if the First Lien Debt is otherwise
restructured (but not reinstated) the Restructuring Fee on
such First Lien Debt will be 0.375% of the First Lien Debt
so restructured.
-- Sale Fee: 0.875% of the Aggregate Consideration of a Sale.
-- Financing Fee: A fee equal to a fixed percentage of the
aggregate principal amount of financing proceeds irrevocably
committed or funded, excluding any proceeds from Providence
Equity Partners or its affiliates, as follows: 1.00%
of the Secured Debt, 3.00% of the Unsecured Debt and 5.00%
of the Equity (together with any Restructuring Fee and/or
Sale Fee, the "Transaction Fees"). Fifty percent of the
Financing Fee will be credited against any Restructuring
Fee.
-- Expenses: Reimbursement of reasonable and documented
out-of-pocket expenses, including fees and expenses of
external counsel, not to exceed an aggregate of $50,000
without the prior consent of the Debtors (such consent not
to be unreasonably withheld or delayed).
Stephen R. Goldstein, senior managing director of the Evercore
Group, assured the Court that the firm is a "disinterested person"
as the term is defined in Section 101(14) of the Bankruptcy Code
and does not represent any interest adverse to the Debtors and
their estates.
The Court for the District of Delaware will hold a hearing on the
application on March 10, 2015, at 11:30 a.m. Objections, if any,
are due March 3, 2015, at 4:00 p.m.
Evercore Group can be reached at:
Stephen R. Goldstein
EVERCORE GROUP LLC
55 East 52nd Street
New York, NY 10055
Tel: +1 (212) 857-3100
Fax: +1 (212) 857-3101
About Altegrity Inc.
Altegrity Inc. provides background investigations for the U.S.
government; employment background and mortgage screening for
commercial customers; technology-driven legal services and software
for data management; and investigative, analytic, consulting, due
diligence, and security services. Altegrity is principally owned
by investment funds affiliated with Providence Equity Partners.
Altegrity Inc. and 37 of its affiliates filed Chapter 11 bankruptcy
petitions (Bankr. D. Del. Lease Case No. 15-10226) on Feb. 8, 2015.
Jeffrey S. Campbell signed the petitions as president and chief
financial officer. The Debtors disclosed total assets of $1.7
billion and total liabilities of $2.1 billion as of June 30, 2014.
M. Natasha Labovitz, Esq., Jasmine Ball, Esq., and Craig A. Bruens,
Esq., at Debevoise & Plimpton LLP serve as the Debtors' counsel.
Joseph M. Barry, Esq., Ryan M. Bartley, Esq., and Edmon L. Morton,
Esq., at Young, Conaway, Stargatt & Taylor, LLP, act as the
Debtors' Delaware and conflicts counsel. Stephen Goldstein and
Lloyd Sprung, at Evercore Group, LLC, are the Debtors' investment
bankers. Kevin M. McShea and Carrianne J. M. Basler, at
Alixpartners LLP serve as the Debtors' restructuring advisors.
Prime Clerk LLC is the Debtors' claims and noticing agent.
PricewaterhouseCoopers LLP serves as the Debtors' independent
auditors.
AMERICAN INT'L: Closing Arguments in Bailout Trial Set for April 22
-------------------------------------------------------------------
Leslie Scism, writing for The Wall Street Journal, reported that
Judge Thomas Wheeler, the Washington, D.C., will hear closing
arguments in the lawsuit challenging the legality of American
International Group's bailout on April 22.
According to the Journal, plaintiff Starr International, run by
former, long-time AIG Chairman and Chief Executive Maurice R.
"Hank" Greenberg, argued that the U.S. government cheated Mr.
Greenberg and other shareholders out of at least $35 billion when
it demanded a 79.9% equity stake in AIG in exchange for providing
$85 billion in an initial emergency loan.
The Justice Department maintains that the government acted lawfully
and that Mr. Greenberg and other AIG shareholders didn't establish
any economic loss, given the alternative to the bailout was a
bankruptcy filing, the Journal related.
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 RESOURCES: Files Liquidating Chapter 11 Plan
-----------------------------------------------------
Bill Rochelle and Sherri Toub, bankruptcy columnists for Bloomberg
News, reported that American Resource Staffing Network Inc.
submitted a liquidating Chapter 11 plan and explanatory disclosure
statement on Feb. 6 in Manchester, New Hampshire, following the
sale of the business to the daughter of the company's principal
after no other bidder emerged.
According to the report, as part of sale approval, the Internal
Revenue Service, a secured creditor, agreed that $200,000 of the
sale proceeds would be carved out, with $66,700 for unsecured
creditors. Other assets, such as lawsuits, will go into a trust
for unsecured creditors, whose claims total about $3.2 million, the
report said, citing disclosure statement. A hearing for approval
of the disclosure statement is on the court's calendar for April 1,
the report added.
About American Resource
American Resource Staffing Network, Inc., and American Resource
Network, Inc., which places hundreds of workers into New England
companies that need temporary help, sought protection under
Chapter 11 of the Bankruptcy Code on July 31, 2014. The lead case
is In re American Resource Staffing Network, Inc., Case No. 14-
11527 (Bankr. D.N.H.).
The Debtors are represented by Deborah A. Notinger, Esq., at
Cleveland, Waters & Bass, P.A., in Nashua, New Hampshire, and
Steven M. Notinger, Esq., at Cleveland, Waters & Bass, P.A., in
Concord, New Hampshire.
ANACOR PHARMACEUTICALS: Venrock Stake Down to 3.8%
--------------------------------------------------
In an amended Schedule 13D filed with the Securities and Exchange
Commission, Venrock Associates IV, L.P., Venrock Partners, L.P.,
Venrock Entrepreneurs Fund IV, L.P., et al., disclosed that as of
Sept. 26, 2014, they beneficially owned 1,632,061 shares of common
stock of Anacor Pharmaceuticals Inc., which represents 3.8 percent
of the shares outstanding. Between Sept. 12, 2014, and Sept. 26,
2014, the Venrock Entities sold an aggregate of 850,000 shares of
the Issuer's Common Stock. A copy of the regulatory filing is
available for free at http://is.gd/LHnKl0
About Anacor Pharmaceuticals
Palo Alto, Calif.-based Anacor Pharmaceuticals (NASDAQ: ANAC) is a
biopharmaceutical company focused on discovering, developing and
commercializing novel small-molecule therapeutics derived from its
boron chemistry platform. Anacor has discovered eight compounds
that are currently in development. Its two lead product
candidates are topically administered dermatologic compounds -
tavaborole, an antifungal for the treatment of onychomycosis, and
AN2728, an anti-inflammatory PDE-4 inhibitor for the treatment of
atopic dermatitis and psoriasis.
The Company's balance sheet at Sept. 30, 2014, showed $159 million
in total assets, $90.2 million in total liabilities, $4.95 million
in redeemable common stock and $63.4 million in total
stockholders' equity.
For the nine months ended Sept. 30, 2014, the Company reported a
net loss of $77.02 million on $11.04 million of total revenues
compared to a net loss of $46 million on $8.74 million of total
revenues for the same period in 2013.
ARMSTRONG WORLD: To Separate into Two Public Companies
------------------------------------------------------
Armstrong World Industries, Inc., on Feb. 23, 2015, announced that
its Board of Directors has unanimously approved a plan to separate
the Company's Flooring business from its Ceilings (Building
Products) business, creating two independent industry-leading
publicly traded companies. The separation is intended to be a
tax-free spin-off of the Flooring business to the Company's
shareholders, and is expected to be completed in the first quarter
of 2016.
Armstrong believes that separating its Flooring and Ceilings
businesses will create two strong companies that are leaders in
their respective markets and that will benefit from increased
strategic focus, streamlined operating structures and improved
capital allocation. Each public company will offer investors a
distinct and compelling investment opportunity based on different
operating and financial models, end-market business cycles and
strategic growth opportunities.
Matthew J. Espe, President and Chief Executive Officer of
Armstrong, commented, "We are committed to taking decisive actions
to deliver shareholder value, and separating our businesses at this
time is the best way to accomplish that goal. We expect both
businesses to improve their industry-leading positions and maximize
their strategic opportunities. There is little existing overlap
between the businesses, and we expect the separation to create
minimal incremental operating expenses and result in no disruption
to our customers, distributors, and suppliers. Both businesses will
remain headquartered in Lancaster and we expect minimal impact on
our employees."
Espe continued, "This separation is a continuation of the Company's
actions since emergence from bankruptcy to create long-term
shareholder value. Since 2008, we have improved margins by
dramatically reducing SG&A, divesting non-core and under-performing
businesses, including the Cabinets and European flooring
businesses, and investing in growth opportunities around the world.
Over the same period, we have returned over $1.5 billion of capital
to our shareholders through dividends and share repurchases. The
time is right for this separation as these two businesses are
well-positioned to deliver value as independent companies."
Two Highly Focused Companies
Armstrong World Industries, Inc. (AWI)
Following the separation, AWI will be made up of the Armstrong
Building Products unit which is the global leader in providing
suspended ceiling solutions for use in renovation and new
construction, both in commercial and residential spaces, with
diverse end-use applications. In 2014, Armstrong Building Products
generated approximately $1.3 billion of revenue. The Company will
continue to strengthen its leadership position in key domestic and
international end markets by leveraging recently completed
investments in expanded sales and manufacturing capabilities. It is
well-positioned to further consolidate the Ceilings market, with
attractive opportunities for enhanced growth and margins. With
3,400 team members worldwide, the Company will operate 22
manufacturing facilities in eight countries including the
Worthington Armstrong Venture (WAVE JV). Vic Grizzle, currently CEO
of Armstrong Building Products, will lead AWI as CEO.
Armstrong Flooring
Armstrong Flooring will continue to lead in the design, manufacture
and sales of high-quality flooring products in North American and
Asian markets. In 2014, Armstrong Flooring generated approximately
$1.2 billion of revenue. Armstrong Flooring's North American
residential franchise is an innovation leader in vinyl, laminate
and hardwood products. The North American and international
commercial segments provide high performance resilient flooring
products including vinyl sheet, linoleum, vinyl composition and
luxury vinyl tile, with significant ongoing investments focused on
LVT leadership. Armstrong Flooring will pursue these markets under
the same trusted brands - which include Armstrong and Bruce - with
the continued strategy to be customers' preferred partner for
flooring solutions. With 3,600 team members worldwide, the Company
will operate 17 manufacturing facilities in three countries. Don
Maier, currently CEO of Armstrong Flooring Products, will serve as
the Chief Executive Officer of Armstrong Flooring.
Transaction Details
The proposed separation is subject to customary conditions,
including an opinion of counsel regarding the tax-free nature of
the separation, execution of intercompany agreements, the
effectiveness of a Form 10 registration statement filing with the
Securities and Exchange Commission, and final approval by the
Company's Board of Directors. The Company expects to provide
additional information on management, governance, capital structure
and other matters with respect to both entities on an ongoing
basis. The Company may, at any time and for any reason until the
proposed separation is complete, abandon the separation or modify
or change its terms.
The company has retained Evercore Partners as financial adviser and
Skadden, Arps, Slate, Meagher & Flom LLP as legal counsel to advise
on the separation process.
Armstrong World Industries, Inc.
Investors:
Tom Waters
Tel: 717-396-6354
Email: tjwaters@armstrong.com
or
Media:
Jennifer Johnson
Tel: 866-321-6677
Email: jenniferjohnson@armstrong.com
About Armstrong World
Headquartered in Lancaster, Pennsylvania, Armstrong World
Industries, Inc. (NYSE:AWI) -- http://www.armstrong.com/--
designs, manufactures and sells flooring products and ceiling
systems around the world. It also designs, manufactures and sells
kitchen and bathroom cabinets. Its business segments include
resilient flooring, wood flooring, building products and cabinets.
On Dec. 6, 2000, it filed a voluntary petition for relief under
Chapter 11 of the United States Bankruptcy Code in the United
States Bankruptcy Court.
An earlier version of Armstrong's Plan was confirmed by the
Bankruptcy Court in November 2003. The District Court for the
District of Delaware did not affirm the confirmation of the Plan,
finding that the proposed distribution of new warrants to the
class of Equity Interest Holders over the objection of the class
of Unsecured Creditors violated the "fair and equitable"
requirement of Section 1129(b)(2)(B)(ii) of the Bankruptcy Code, a
codification of the absolute priority rule. Armstrong lost on
appeal before the Third Circuit Court of Appeals.
Armstrong filed a modified plan in February 2006, revising the
classification and treatment of Equity Interests to eliminate
the distribution of warrants to shareholders of AWI's parent
company, Armstrong Holdings, Inc. Armstrong and the asbestos
constituencies in its case also asked the District Court to
find that the Debtors' present and future liability on account
of asbestos-related personal injury claims is not less than
$3.1 billion, and, therefore, Armstrong's chapter 11 plan does
not unfairly discriminate against commercial creditors and should
be confirmed.
The Plan was confirmed by the District Court on Aug. 14, 2006,
and Armstrong emerged from Chapter 11 on Oct. 2, 2006.
Nitram and Desseaux also filed their Chapter 11 cases on
Dec. 6, 2000. The Bankruptcy Court confirmed their First
Amended Joint Plan of Liquidation on Dec. 17, 2007.
STEPHEN KAROTKIN, ESQ., at Weil, Gotshal & Manges, in New York,
JASON M. MADRON, ESQ., at Richards, Layton & Finger, P.A., in
Wilmington, Delaware, represented the Debtors. STEPHEN J.
SHIMSHAK, ESQ., JOHN F. BAUGHMAN, ESQ., and ANDREW N. GORDON,
ESQ., at Paul, Weiss, Rifkind, Wharton & Garrison, LLP, in New
York, represented the Unsecured Creditors Committee. ELIHU
INSELBUCH, ESQ., and NATHAN D. FINCH, ESQ., at Caplin & Drysdale
Chartered, in Washington, DC, represented the Asbestos Claimants
Committee. JANE W. PARVER, ESQ., at Kaye Scholer, LLP, in New
York, represented Dean Trafelet, the future claimants
representative.
On April 3, 2006, Armstrong World acquired HomerWood Inc. On
May 1, 2006, it acquired Capella Engineered Wood LLC, and its
parent company, Capella Inc. On March 27, 2007, it entered into
an agreement to sell the principal operating companies in its
European textile and sports flooring business segment to
Tapijtfabriek H. Desseaux N.V. and its subsidiaries. These
businesses were classified as discontinued at Oct. 2, 2006.
* * *
The Troubled Company Reporter, on Nov. 27, 2014, reported that
Standard & Poor's Ratings Services said it revised its rating
outlook on Lancaster, Pa.-based Armstrong World Industries Inc. to
stable from positive. At the same time, S&P affirmed its 'BB'
corporate credit rating on the company and its 'BB' issue ratings
on the company's senior secured debt.
BAYONNE ENERGY: Moody's Affirms 'B1' Senior Secured Ratings
-----------------------------------------------------------
Moody's Investors Service affirmed Bayonne Energy Center LLC's B1
senior secured ratings. The rating action was prompted by an
announced change in the ownership of BEC, a 512-megawatt
simple-cycle power plant located in Bayonne, New Jersey. The
rating outlooks remains stable.
Under a transaction announced in February, ownership in BEC,
currently held by a subsidiary of ArcLight Energy Partners Fund
III, L.P. (not rated), is to be sold to an subsidiary of Macquarie
Infrastructure Company LLC (not rated). The transaction requires
various regulatory approvals and is anticipated to be completed in
the first half of 2015. The change in ownership will not impact
the existing terms and conditions of BEC's bank debt nor have a
material impact on day-to-day operation or the financial profile of
BEC and, as such, is viewed as a credit neutral event.
BEC's B1 rating and stable outlook is supported by predictable cash
flows that Moody's expects the project to generate under existing
tolling agreements with a financially sound counterparty and the
attractive location of the project within NYISO Zone J. These
positive credit attributes, however, are balanced by the
significant financial leverage incurred by BEC, uncertainties
relating to future electric and capacity prices, substantial
refinancing risk and key financial metrics that are appropriate for
the B-rating category.
"We expect BEC's debt service coverage ratio and the ratio funds
from operations (FFO) to debt to range from 1.5 -1.7 times annually
and 5-7%, through 2017 respectively, and the term loan balance at
or near the 2021 maturity to be in the range of $340-360 million
(67% of the original loan balance)," Moody's said.
Outstanding currently under BEC's term loan outstanding is $510
million.
The principal methodology used in these ratings was Power
Generation Projects published in December 2012.
BRIAN FAHEY: Unpaid Taxes in Late-Filed Return Can't Be Discharged
------------------------------------------------------------------
The U.S. Court of Appeals for the First Circuit, in an opinion
dated Feb. 18, 2015, concluded that a Massachusetts state income
tax return filed after the date by which Massachusetts requires
those returns to be filed does not constitute a "return" under 11
U.S.C. Section 523(a) so that unpaid taxes due under the return can
be discharged in bankruptcy.
Bill Rochelle and Sherri Toub, bankruptcy columnists for Bloomberg
News, reported that the Denver-based 10th Circuit reached the same
result in December, as did the Fifth Circuit in New Orleans in
early 2012. Circuit Judge Kayatta in the Feb. 18 decision said it
was not unfathomable, draconian or absurd to believe Congress
intended that a debt survive if the bankrupt never paid the tax and
was also late in filing a claim.
The appeals are IN RE: BRIAN S. FAHEY, Debtor, relating to BRIAN S.
FAHEY, Appellant, v. MASSACHUSETTS DEPARTMENT OF REVENUE, Appellee,
No. 14-1328; IN RE: TIMOTHY P. PERKINS, Debtor, relating to TIMOTHY
P. PERKINS, Appellant, v. MASSACHUSETTS DEPARTMENT OF REVENUE,
Appellee, No. 14-1350; IN RE: ANTHONY M. GONZALEZ, Debtor, relating
to ANTHONY M. GONZALEZ, Appellee, v. MASSACHUSETTS DEPARTMENT OF
REVENUE, Appellant, No. 14-9002; and IN RE: JOHN T. BROWN, Debtor,
relating to JOHN T. BROWN, Appellee, v. MASSACHUSETTS DEPARTMENT OF
REVENUE, Appellant, No. 14-9003.
A full-text copy of the Decision dated Feb. 18, 2015, is available
at http://bankrupt.com/misc/FAHEY0218.pdf
BROOKLYN NAVY: Moody's Affirms 'Caa1' Senior Secured Debt Rating
----------------------------------------------------------------
Moody's Investors Service affirmed the Caa1 senior secured debt
rating of Brooklyn Navy Yard Cogeneration Partners L.P. The rating
outlook was revised to stable from negative.
BNY Cogen is a 286 MW dual-fuel cogeneration facility located in
Brooklyn, New York. The project sells nearly 100% of its power and
steam output to Consolidated Edison Company of New York (ConEd; A2,
stable) under a long term sales agreement that expires in 2036.
The Project is 100% owned by EIF United States Power Fund IV L.L.
(EIF USPF IV), having acquired it on March 4, 2013. EIF USPF IV is
managed by EIF Management, LLC (EIF or EIF Management). EIF
Management was itself acquired by Ares Management, L. P. (Ares) on
January 1, 2015.
The affirmation of the Caa1 rating and the change in rating outlook
to stable consider Moody's expectations of continued support from
EIF to enable BNY Cogen meet its debt service, which on a
standalone basis remains below 1.0x. As EIF is not legally
obligated to provide this level of support, concerns remain about
the current level of liquidity and the ability of the Project's
cash flow to service its debt obligations on a standalone basis
over the next year. The Caa1 rating recognizes that the debt
service coverage ratio has been below 1.0 times for several years,
and it is expected to remain below 1.0 times through 2016, until
current above-market natural gas contracts expire. While BNY
Cogen's historical operating performance has been weak and
volatile, it has demonstrated stronger performance since EIF
installed NAES Corporation (NAES) as the operations and maintenance
provider in 2013. However, gas to fuel oil switching remains a
challenge to project operations during cold weather.
The Caa1 rating recognizes BNY Cogen's full draw on its $29.6
million debt service reserve letter of credit facility (DSR LOC)
prior to its expiration and non-renewal in November 2012. Also in
November 2012, an $18 million working capital facility expired and
was not renewed. Since then, BNY Cogen has used its cash balances
together with insurance proceeds from the Hurricane Sandy outage,
cash flow generated from the project and equity investments from
EIF to meet its obligations, including debt service. We understand
that EIF will need to make an additional equity in 2015, owing in
large part to the project repayment obligation of approximately $30
million drawn on the DSR LOC.
Moody's believes that EIF continues to have a long-term economic
interest in maintaining the solvency of this project, given its
purchase in early 2013, its past level of support, and the
expiration of the BNY Cogen's above-market natural gas contracts in
late 2016, which is expected to greatly improve the Project's
economic prospects and coverage starting in 2017. However, if
sponsor support for the Project wanes, we expect the liquidity
profile to deteriorate further as we believe that BNY Cogen lacks
sufficient cash flow to cover its debt service obligations.
The affirmation of the Caa1 rating and the stable outlook further
reflect the high expected recovery value of the BNY Cogen plant in
the event of default. Based upon the value determined for the sale
of similar power plants in the New York City area, Moody's recovery
analysis suggests an implied Project valuation that is nearly
equivalent to the amount of debt outstanding. However, none of
these comparable valuations include plants that have long-term
contracts with ConEd (expiring in 2036) like the one BNY Cogen has.
This additional data point suggests that in the event of a
default, BNY Cogen's recovery prospects are more robust than its
peer New York City plants (none of which have long-term contracts)
and suggests that bondholders would get full recovery or close to
it. Nevertheless, Moody's affirmed the Caa1 rating, which implies
an expected recovery of 90-95 % due to the liquidity constraints on
the project, its inability to cover debt service from cash flow
alone, and the lack of a legal obligation on the part of EIF to
provide cash support to the Project to cover debt service
shortfalls.
The outlook change to stable, however, factors in the expectation
that EIF will continue to support the Project, even if not legally
obligated to do so. This view is largely driven by the long-term
contract with ConEd, the standalone outlook for the project after
the expiration of a natural gas transportation contract (late
2016), and the importance of the plant to ConEd. The outlook
change to stable also reflects the improved operating performance
of the plant, which has seen availability averaging in the 98-99%
range since the spring 2013.
In light of the outlook stabilization, the rating is not expected
to be upgraded in the near term as DSCRs are anticipated to remain
below 1.00 times during 2015 and 2016.
The rating and outlook could come under downward pressure if EIF
fails to provide capital infusions to the Project to meet debt
service shortfalls. In addition, negative pressure could result if
an unforeseen sustained forced outage occurs, which would further
hamper liquidity prospects.
The principal methodology used in these ratings was Power
Generation Projects published in December 2012.
C.H.I. OVERHEAD: Moody's Alters Outlook to Stable & Affirms B3 CFR
------------------------------------------------------------------
Moody's Investors Service changed C.H.I. Overhead Doors, Inc.'s
rating outlook to stable from negative due to improved performance
resulting in better credit metrics. In a related rating action,
Moody's affirmed CHI's B3 Corporate Family Rating and its B3-PD
Probability of Default Rating.
The following ratings are affected by this action:
-- Corporate Family Rating affirmed at B3;
-- Probability of Default Rating affirmed at B3-PD;
-- 1st Lien Senior Secured Revolving Credit Facility due 2018
affirmed at B3 (LGD4); and
-- 1st Lien Senior Secured Term Loan due 2019 affirmed at B3
(LGD4).
The change in CHI's rating outlook to stable from negative results
from the company's improved operating performance, resulting in
better credit metrics. Debt leverage has remained below 6.0x,
which Moody's previously identified as a trigger for stabilizing
the rating outlook. Higher volumes and better pricing have both
resulted in operating performance improvements. The repair and
remodeling end-market, the main driver of the CHI's revenues, is
enjoying robust growth. As of December 2014, The National
Association of Home Builders' Remodeling Market Indices reached
record highs, with the Current Expectations Index improving to 59.6
from 57.7 in the previous quarter and the Future Expectations Index
increasing to 59.5 from 57.5 the prior quarter. CHI is well
positioned to take advantage of these growth trends and Moody's
expects the company to do so over the next 12-18 months.
CHI's B3 Corporate Family Rating incorporates its business profile,
which remains a rating constraint. The company is small based on
its revenues and absolute levels of earnings compared to other
manufacturers, despite its robust EBITA margins. These margins
enhance CHI's interest coverage (measured as EBITA-to-Interest
expense), which Moody's projects to approach 2.7x over the next
12-18 months (all ratios incorporate Moody's standard adjustments).
The ability for CHI to materially reduce balance sheet debt is
limited by its working capital and capital expenditure needs, which
Moody's expects to increase with added demand from CHI's growing
end markets. Debt service requirements also limit free cash flow
generation, which total nearly $23 million per year. Additionally,
the potential for Friedman Fleischer & Lowe, LLC, the primary owner
of CHI, to continue monetizing its original investment constrains
the rating. Friedman Fleischer & Lowe, LLC originally acquired the
company in August 2011.
However, positive actions could ensue if CHI demonstrates a
commitment to improving leverage by generating higher levels of
absolute earnings and using free cash flow towards debt reduction,
resulting in better credit metrics. Debt-to-EBITDA sustained below
4.75x (ratio incorporates Moody's standard adjustments) as well as
an improved liquidity profile could have a positive impact on the
company's credit ratings.
Negative rating actions could ensue if CHI's operating performance
falls below Moody's expectations or if the company experiences a
weakening in financial performance due to a decline in its end
markets. Leverage approaching 6.5x (ratio incorporates Moody's
standard adjustments) or a deteriorating liquidity profile due to
additional dividends could each negatively pressure the ratings.
C.H.I. Doors Holding Corp is the parent holding company of C.H.I.
Overhead Doors, Inc., the primary operating subsidiary (together
referred to as "CHI"). CHI manufactures overhead doors for
residential and commercial applications throughout the United
States and Canada. Friedman Fleischer & Lowe, LLC, through its
affiliates, is the primary owner of CHI. Revenues for the 12 months
through Sep. 30, 2014 totaled approximately $268 million.
The principal methodology used in this rating was Global
Manufacturing Companies published in July 2014. Other
methodologies used include Loss Given Default for Speculative-Grade
Non-Financial Companies in the U.S., Canada and EMEA published in
June 2009.
COLLAVINO CONSTRUCTION: Section 341 Meeting Set for March 23
------------------------------------------------------------
A meeting of creditors in the bankruptcy case of Collavino
Construction Company Limited will be held on March 23, 2015, at
2:00 p.m. at 80 Broad St., 4th Floor, USTM.
This is the first meeting of creditors required under Section
341(a) of the Bankruptcy Code in all bankruptcy cases.
All creditors are invited, but not required, to attend. This
meeting of creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
About Collavino Construction
Family-owned The Collavino Group owns entities that operate in
various sectors of the construction industry in the New York-New
Jersey metropolitan area, Canada, and the Detroit metropolitan
area. With over half a century's experience in the construction
industry, the Collavino Group performs contracts in both the public
and private sectors as a general contractor, design-build
consultant, construction manager and prime subcontractor for
cast-in-place and precast concrete works.
Pursuant to World Trade Center Contract No. WTC-1001.04-1,
Collavino Construction Company Limited ("CCCL") contracted with The
Port Authority of New York and New Jersey on the public
construction project known as the Reconstruction of One World Trade
Center - Freedom Tower. Collavino Construction Company Inc.
("CCCI"), a subsidiary of CCCL, provides all the necessary labor to
CCCL in connection with the performance of work on the WTC
Project.
As a result of, among other things, delays to the progress of work
caused by conditions beyond the control of CCCL and CCCI, and the
Port Authority's unilateral election to terminate the contract with
CCCL for convenience, effective as of Jan. 18, 2013, CCCL incurred
a multi-million dollar damage claim against the Port Authority on
the WTC Project.
CCCI sought Chapter 11 protection (Bankr. S.D.N.Y. Case No.
14-12908) in Manhattan on Oct. 17, 2014, estimating $1 million to
$10 million in assets and debt. CCCL sought Chapter 11 protection
(Bankr. S.D.N.Y. Case No. 15-10344) on Feb. 18, 2015, estimating
$50 million to $100 million in assets and $1 million to
$10 million in liabilities.
Judge Shelley C. Chapman presides over the cases. The Court has
entered an order approving joint administration of the two cases.
The Debtors have tapped Cullen and Dykman LLP as counsel, and
Peckar & Abramson, P.C., as special litigation counsel.
CCCI obtained an order extending by 90 days (a) the exclusive
period during which only the Debtor may file a plan through and
including May 15, 2015, and (b) the exclusive period to solicit
acceptances of a chapter 11 plan for the Debtor through and
including July 14, 2015.
CRYOPORT INC: Gets $50,000 From Private Placement
-------------------------------------------------
Cryoport, Inc., entered into definitive agreements for a private
placement of its securities to an accredited investor for aggregate
gross proceeds of $50,000 (approximately $42,000 after estimated
cash offering expenses) pursuant to a Subscription Agreement
between the Company and the Investor. The Company intends to use
the net proceeds for working capital purposes, according to a
document filed with the Securities and Exchange Commission.
Pursuant to the Subscription Agreement, the Company issued shares
of a newly established Class B Preferred Stock and warrants to
purchase its common stock. The shares and warrants were issued as
a unit consisting of (i) one share of Class B Preferred Stock of
the Company and (ii) one warrant to purchase eight shares of Common
Stock at an exercise price of $0.50 per share, which will be
immediately exercisable and may be exercised at any time on or
before May 31, 2020. A total of 4,167 Units were issued in
exchange for gross proceeds of $50,000 or $12.00 per Unit.
Emergent Financial Group, Inc. served as the Company's placement
agent in this transaction and received, with respect to gross
proceeds received from the Investor, a commission of 10% and a
non-accountable finance fee of 3% of the aggregate gross proceeds
received from that Investor, plus reimbursement of legal expenses
of up to $5,000. Emergent Financial Group, Inc. will also be
issued a warrant to purchase three shares of Common Stock at an
exercise price of $0.50 per share for each Unit issued in this
transaction.
On Feb. 17, 2015, the Company issued to an accredited investor a
2014 Series Secured Promissory Note in the aggregate original
principal amount of $50,000. The Note accrues interest at a rate
of 7% per annum. All principal and interest under the Note will be
due on July 1, 2015. The Company may elect to extend the maturity
date of the Note to Jan. 1, 2016, by providing written notice to
the Note Investor and a warrant to purchase a number of shares of
common stock of the Registrant equal to (a) the then outstanding
principal balance of the Note, divided by (b) $0.50 multiplied by
125%. The Company may prepay the Note at any time without
penalty.
In connection with the issuance of the Note, the Company issued to
the Note Investor warrants to purchase 125,000 shares of common
stock at an exercise price of $0.50 per share. The warrants are
exercisable on May 31, 2015, and expire on Nov. 30, 2021.
The Company did not pay any discounts or commissions with respect
to the issuance of the Note or the warrants.
On Feb. 18, 2015, the Company submitted for filing with the
Secretary of State of the State of Nevada a Certificate of
Designation designating 400,000 shares of the Company's previously
authorized preferred stock, par value $0.001, as Class B Preferred
Stock.
On February 18, 2015, the Company filed the Certificate of
Designation with the Secretary of State of the State of Nevada to
authorize the designation and issuance of 400,000 shares of
Preferred Stock.
About Cryoport
Lake Forest, Calif.-based CryoPort, Inc. (OTC BB: CYRX) provides
comprehensive solutions for frozen cold chain logistics, primarily
in the life science industries. Its solutions afford new and
reliable alternatives to currently existing products and services
utilized for bio-pharmaceuticals and biologics, including in-vitro
fertilization, cell lines, vaccines, tissue and other commodities
requiring a reliable frozen solution.
Cryoport reported a net loss of $19.56 million on $2.65 million of
revenues for the year ended March 31, 2014, as compared with a net
loss of $6.38 million on $1.10 million of revenues for the year
ended March 31, 2013.
The Company's balance sheet at Dec. 31, 2014, showed $1.87 million
in total assets, $2.98 million in total liabilities, and a
stockholders' deficit of $1.12 million.
KMJ Corbin & Company LLP, in Costa Mesa, California, issued a
"going concern" qualification on the consolidated financial
statements for the year ended March 31, 2014. The independent
auditors noted that the Company has incurred recurring operating
losses and has had negative cash flows from operations since
inception. Although the Company has cash and cash equivalents of
$369,581 at March 31, 2014, management has estimated that cash on
hand, which include proceeds from convertible bridge notes
received in the fourth quarter of fiscal 2014, will only be
sufficient to allow the Company to continue its operations into
the second quarter of fiscal 2015. These matters raise
substantial doubt about the Company's ability to continue as a
going concern, the auditors maintained.
DAUGHTERS OF CHARITY: Could Go Bankrupt If Sale to Prime Fails
--------------------------------------------------------------
Tracy Seipel at San Jose Mercury News reports that the Daughters of
Charity Health System officials said they had been prepared to file
for Chapter 11 bankruptcy protection if the deal on its sale to
Prime Healthcare Services for $843 million fell through.
Mercury News relates that while California Attorney General Kamala
Harris on Friday approved the sale after months of review and
several public hearings. The report says that had Ms. Harris
rejected the deal, it would have meant that the Company would
almost certainly have been forced to file for bankruptcy.
Ms. Harris imposed 12 conditions that some observers say Prime
Healthcare may find too taxing, Mercury News states. According to
the report, the requirements include: (i) operating four of the
hospitals as acute care hospitals with emergency rooms for 10 years
and another as a skilled nursing facility for the same time period;
(ii) maintaining current Medi-Cal managed care contracts at all six
hospitals for 10 years; (iii) meeting costly seismic compliance
requirements until 2030 at all six facilities; and (iv) continuing
to provide maternity services and other essential health care
services that are among the least lucrative in the hospital
business. The Medi-Cal managed care contracts are financially
unsustainable if not altered, the report adds, citing the Hospital
Chain and Prime Healthcare.
Prime Healthcare said in a statement that it will need to "evaluate
the viability and future stability" of the hospitals under the
conditions.
Mercury News reports that while the California Nurses Association
had endorsed the deal, Service International Employees Union had
strongly opposed the sale, alleging that Prime Healthcare has a
history of gutting services for low-income patients and slashing
workers' pay and benefits. The report adds that Prime Healthcare
is also under federal probe for improperly diagnosing patients to
receive higher reimbursements.
Santa Clara County, which had sought to acquire the O'Connor and
Saint Louise hospitals from the Daughters of Charity, claimed in a
statement that Prime Healthcare "has a history of eliminating vital
community services".
About The Daughters of Charity Health System
The Daughters of Charity Health System (DCHS) is a regional health
care system of six hospitals and two nursing colleges spanning the
California coast from the San Francisco Bay Area to Los Angeles.
DAWN DEY: Fabricated Evidence Falls Short of Fraud on Court
-----------------------------------------------------------
Bill Rochelle and Sherri Toub, bankruptcy columnists for Bloomberg
News, reported that the U.S. Bankruptcy Appellate Panel for the
10th Circuit in Denver reversed a bankruptcy court's ruling denying
a trustee's preference claim because the trustee hadn't proven the
husband of a bankrupt woman received the alleged payment, instead
relying entirely on the bankrupt's testimony.
According to the report, U.S. Bankruptcy Judge William T. Thurman,
writing for the panel, said "deceptive trial testimony" isn't fraud
on the court. Although the ex-husband may have fabricated his
testimony originally, his conduct didn't impede the trustee, who
hadn't sought the canceled check before trial and "thus failed to
meet his burden of proof."
The case is Hill v. Jankowski (In re Dey), 14-026, U.S. Court of
Appeals for the 10th Circuit (Denver).
DCP MIDSTREAM: S&P Cuts Corp. Credit Rating to 'BB'; Outlook Neg
----------------------------------------------------------------
Standard & Poor's Ratings Services said it lowered DCP Midstream
LLC's 'BBB-' corporate credit rating to 'BB' and the 'A-3'
short-term rating to 'B'. The outlook is negative.
S&P's issue-level rating on Midstream's senior unsecured notes is
'BB'. S&P is assigning a '4' recovery rating to the senior
unsecured notes, indicating S&P's expectation for average (30% to
50%) recovery in the upper half of the range if a payment default
occurs.
S&P's issue-level rating on Midstream's junior subordinated notes
is 'B+'. S&P is assigning a '6' recovery rating to the junior
subordinated notes, which indicates S&P's expectation for
negligible (0% to 10%) recovery if a payment default occurs.
At the same time, S&P lowered its 'BBB-' corporate credit rating on
master limited partnership DCP Midstream Partners L.P. (Partners)
to 'BB' and the 'A-3' short-term rating to 'B'. The outlook is
negative.
S&P's issue-level rating on Partners' senior unsecured notes is
'BB'. S&P is assigning a '3' recovery rating to the senior
unsecured notes, indicating S&P's expectation for meaningful (50%
to 70%) recovery in the upper half of the range if a payment
default occurs.
The downgrade on Midstream stems from the anticipated impact that
weak commodity prices will have on consolidated financial measures.
S&P considers the creditworthiness of Partners to be closely tied
to that of Midstream, and lowered its ratings in conjunction with
those on Midstream. Near-term consolidated credit measures will be
considerably weaker than S&P previously anticipated due to ongoing
weakness in NGL prices and, to a lesser extent, lower-than-expected
throughput levels. S&P projects consolidated leverage to be more
than 8x in 2015, about 6.5x in 2016, and roughly 4.5x in 2017,
which is significantly above S&P's downgrade trigger of 4x. The
improvement in credit measures in the outer years reflects S&P's
expectation of improving commodity prices.
Midstream is a 50/50 joint venture, owned by Spectra Energy Corp.
and Phillips 66. S&P do not ascribe any sponsor support to
Midstream or Partners.
The negative outlook reflects S&P's view that commodity prices are
very fluid and that any slight deterioration can make it difficult
for Midstream to achieve consolidated debt to EBITDA in the 4.5x
area by 2017.
DELIA*S INC: Files Schedules of Assets and Debt
-----------------------------------------------
dELiA*s Inc. filed its schedules of assets and liabilities,
disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $0
B. Personal Property $9,782,595
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $18,520,584
E. Creditors Holding
Unsecured Priority
Claims $0
F. Creditors Holding
Unsecured Non-priority
Claims $5,635,189
----------- -----------
TOTAL $9,782,595 $24,155,773
A copy of the schedules is available for free at:
http://bankrupt.com/misc/dELiAs_SAL.pdf
About DELIA*S INC.
Launched in 1993, dELiA*s Inc., is a retailer which sells apparel,
accessories, footwear, and cosmetics marketed primarily to teenage
girls and young women. The dELiA*s brand products are sold
through the Company's mall-based retail stores, direct mail
catalogs and e-commerce Web sites.
On Dec. 7, 2014, dELiA*s and eight of its subsidiaries each filed
a voluntary petition for relief under Chapter 11 of the United
States Bankruptcy Code (Bankr. S.D.N.Y.). The Debtors have
requested that their cases be jointly administered under Case No.
14-23678.
As of the bankruptcy filing, dELiA*s owns and operates 92 stores
in 29 states.
The Debtors have tapped Piper LLP (US) as counsel, Clear Thinking
Group LLC, as restructuring advisor, Janney Montgomery Scott LLC,
as investment banker, and Prime Clerk LLC as claims agent.
As of the Petition Date, the Debtors had $47.0 million in total
assets and $50.5 million in liabilities.
The Debtors have sought court approval of a deal for Gordon
Brothers Retail Partners, LLC and Hilco Merchant Resources, LLC,
to launch going-out-of-business sales.
The Official Committee of Unsecured Creditors tapped to retain
Kelley Drye & Warren LLP as its counsel, and Capstone Advisory
Group, LLC, and Capstone Valuation Services, LLC, as financial
advisors.
DOW CORNING: 6th Cir. Says Breast Implant Claim Under NC Law
------------------------------------------------------------
In 1988 Pamela Sutherland received breast implants in North
Carolina. She filed suit in the Middle District of North Carolina
five years later, after learning that the silicone in her implants
could be causing a variety of serious medical problems. The
Silicone's manufacturer, Dow Corning, filed for bankruptcy in the
Eastern District of Michigan, and Sutherland's suit was transferred
there. In 2012, 24 years after Sutherland received the implants,
the district court concluded that Sutherland's claim was barred by
Michigan's statute of limitations and granted summary judgment to
the defendant.
The United States Court of Appeals for the Sixth Circuit -- in a 2
to 1 ruling on Friday -- said the district court should have
applied North Carolina's law instead of Michigan's, and should have
concluded that there was a genuine factual issue as to whether
Sutherland's claim was timely-filed under North Carolina law. "We
therefore reverse the district court and remand for proceedings
consistent with this opinion," a majority of the Sixth Circuit
panel said in a February 20, 2015 Opinion.
Circuit Judge Jane Branstetter Stranch delivered the majority
decision.
Jeffrey Stuart Sutton gave a dissenting opinion, insisting that
current Michigan law applies.
The case is, PAMELA D. SUTHERLAND, Plaintiff-Appellant, v. DCC
LITIGATION FACILITY, INC., Defendant-Appellee, No. 13-1497 (6th
Cir.). A copy of the Sixth Circuit majority opinion and the
dissenting opinion is available at http://bit.ly/1FRefxyfrom
Leagle.com.
Ms. Sutherland is represented by:
Mark R. Bendure, Esq.
BENDURE & THOMAS
645 Griswold Street, Suite 4100
Detroit, MI 48226
Tel: (313) 961-1525
Fax: (313) 961-1553
E-mail: bendurelaw@cs.com
The DCC Litigation Facility, Inc., is represented by:
Robert D. Goldstein, Esq.
Timothy J. Jordan, Esq.
GARAN LUCOW MILLER, P.C.
8332 Office Park Dr.
Grand Blanc, MI 48439
Tel: 800-875-3700
Fax: 810-695-3700
E-mail: rgoldstein@garanlucow.com
tjordan@garanlucow.com
About Dow Corning
Dow Corning Corp. -- http://www.dowcorning.com/-- produces and
supplies more than 7,000 silicon-based products and services to
more than 25,000 customers worldwide. Dow Corning is equally
owned by The Dow Chemical Company and Corning Incorporated.
The Company filed for Chapter 11 protection on May 15, 1995
(Bankr. E.D. Mich. Case No. 95-20512) to resolve silicone implant-
related tort liability. The Company owed its commercial creditors
more than $1 billion at that time. A consensual Joint Plan of
Reorganization, amended on Feb. 4, 1999, offering to pay
commercial creditors in full with post-petition interest,
establish a multi-billion-dollar settlement trust for tort claims,
and leave Dow Corning's shareholders unimpaired, took effect on
June 30, 2004.
DREAMWORKS ANIMATION: Moody's Cuts Corporate Family Rating to Ba3
-----------------------------------------------------------------
Moody's Investors Service downgraded DreamWorks Animation SKG,
Inc.'s Corporate Family rating to Ba3 from Ba2, Probability of
Default rating to Ba3-PD from Ba2-PD and its senior unsecured debt
rating to B1 from Ba3. The company's Speculative Grade Liquidity
rating of SGL-3 remains unchanged. The company's ratings remain on
review for downgrade.
Issuer: DreamWorks Animation SKG, Inc.
-- Corporate Family Rating: Downgraded to Ba3 from Ba2, On
Review for Downgrade
-- Probability of Default Rating: Downgraded to Ba3-PD from
Ba2-PD, On Review for Downgrade
-- $300 million 6.875% Senior Unsecured Notes due 08/15/2020:
Downgraded to B1, LGD5 from Ba3, LGD5, On Review for
Downgrade
The rating action is consistent with Moody's previously
communicated expectations and reflects Moody's belief that the
company will be challenged to improve operating performance and
credit metrics to previous levels that support a Ba2 rating.
Consecutive weak box office performances of many of the company's
films over the last two years, along with significant investments
in the television and consumer products businesses, have weighed
heavily on debt protection measures, which we believe will remain
weak and be challenging to materially improve through stronger
earnings growth alone, over the near to intermediate term. The
company's leverage has weakened materially to approximately 6.0x
(as of 09/30/2014, incorporating Moody's standard adjustments) as a
result of continued weakness in revenue growth, with revenues
declining 6% in 2013 and 10% in the first nine months of 2014.
Additionally, significant cash outlays for expansion of the
television and consumer products business units have drained
financial flexibility to sustain its ratings for potentially weak
film performance, resulted in higher debt levels than previously
expected.
Earlier this year, DreamWorks unveiled a new strategic plan aimed
at reducing operating costs and scaling back film production. The
company announced that going forward it will reduce the production
of films from three films per year to two films (its former annual
slate size) and cut 500 jobs across all divisions and locations.
The company expects to incur severance costs (cash) of
approximately $110 million through 2017 and the restructuring
actions are expected to result in pre-tax cost savings of
approximately $30 million in 2015, growing to around $60 million by
2017. Moody's notes that the announcement to realign its cost
structure is a credit positive development for the company but the
cash cost is likely to be funded with additional debt, and expected
cost savings will not be enough to reduce leverage to under 3.0x
(with Moody's adjustments), which is the sustained leverage upper
threshold for the Ba2 CFR. Pro forma for annual cost savings of
$30 million to $60 million, debt-to-EBITDA leverage is in the 3.6x
-- 4.6x range (as of 09/30/2014). Hence, Moody's believes that
even though the restructuring plan will considerably improve credit
metrics from current levels, it will not be sufficient in itself to
restore the credit profile to a level commensurate with a Ba2
rating, and possibly not a "Ba" rating, absent an equity injection
and debt repayments and strong recovery in top-line and cash flows.
Accordingly, the ratings continue to remain on review for
downgrade.
Moody's review will continue to evaluate DreamWorks' ability to
improve operating performance as well as its financial profile to
return to a "Ba" profile within next 12 to 24 months. Key credit
metrics remain weak even for the Ba3 rating and the review process
will focus on the likelihood that revenues and profitability will
grow sufficiently to improve leverage to a more moderate level and
the expected liquidity cushion over the intermediate term. A
review of the company's future slate of theatrical releases, an
assessment of its strategies to grow television and ancillary
revenues and expected liquidity cushion over the intermediate term
will be key factors in the review process.
Expectations for continued weakness in cash flows and credit
metrics such that leverage is expected to be sustained over 3.5x
beyond the 24 month rating horizon could result in a rating
downgrade.
Since the company's ratings remain on review for downgrade, upward
ratings momentum and a positive rating action are unlikely.
DreamWorks Animation SKG, Inc., based in Glendale, California, is
an animation studio that produces animated feature films,
television specials and series, and related entertainment and
consumer products. Consolidated revenues for the twelve months
ended Sep. 30, 2014 were about $655 million.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in December 2014. Other
methodologies used include Loss Given Default for Speculative-Grade
Non-Financial Companies in the U.S., Canada and EMEA published in
June 2009.
ENERGY TRANSFER: S&P Assigns BB Rating on $500MM Term Loan Due 2019
-------------------------------------------------------------------
Standard & Poor's Ratings Services said it assigned its 'BB'
issue-level rating and '4' recovery rating to Energy Transfer
Equity L.P.'s (ETE) $500 million senior secured term loan due 2019.
The partnership intends to use loan proceeds to fund a portion of
the Sunoco Logistics Partners L.P. (SXL) general
partnership/incentive distribution right (GP/IDR) and Bakken
pipeline project exchange, repay borrowings under its revolving
credit facility, and for general partnership purposes. In the
exchange transaction, ETE will receive an additional 40% of SXL's
GP/IDR cash flows (bringing ETE's total to 90%) and ETP will
receive a 45% interest in the Bakken pipeline project plus units
and cash. Pro forma for the term loan, ETE has about $5.4 billion
of reported debt on a stand-alone basis. Dallas-based ETE is a
large publicly traded U.S. midstream energy partnership.
RATINGS LIST
Energy Transfer Equity L.P.
Corp credit rating BB/Stable/--
New Rating
$500 mil sr secd term loan due 2019 BB
Recovery rating 4
ERF WIRELESS: Issues 31 Million Common Shares
---------------------------------------------
ERF Wireless, Inc., issued 31,008,766 common stock shares pursuant
to existing convertible promissory notes from February 14 through
Feb. 20, 2015, according to a document filed with the Securities
and Exchange COmmission.
The Company receives no additional compensation at the time of the
conversions beyond that previously received at the time the
Convertible Promissory Notes were originally issued. The shares
were issued at an average of $0.000352 per share. The issuance of
the shares constitutes 11.897% of the Company's issued and
outstanding shares based on 260,641,435 shares issued and
outstanding as of Feb. 13, 2015.
About ERF Wireless
Based in League City, Texas, ERF Wireless, Inc., provides secure,
high-capacity wireless products and services to a broad spectrum of
customers in primarily underserved, rural and suburban parts of the
United States.
ERF Wireless reported a net loss attributable to the company of
$7.26 million in 2013, a net loss of $4.81 million in 2012, and a
net loss of $3.37 million in 2011.
As of Sept. 30, 2014, the Company had $3.59 million in total
assets, $10.4 million in liabilities, and a $6.84 million
shareholders' deficit.
EVEREST COLLEGES: Files for Bankruptcy
--------------------------------------
Stephanie Gleason, writing for Daily Bankruptcy Review, reported
that the Canadian subsidiary of embattled for-profit education
company Corinthian Colleges Inc. has filed for bankruptcy under
Canada's insolvency law after an Ontario education regulator took
action against the company's 14 Canadian campuses.
According to the report, Everest Colleges Canada Inc. filed for an
assignment under the Bankruptcy Insolvency Act on Feb. 20, which is
Canada's bankruptcy law. Duff Phelps Canada Restructuring Inc.
will administer the case as trustee, according to an announcement,
the report related.
Corinthian Colleges, Inc., offers post-secondary courses in the
areas of health care, business, criminal justice, transportation
technology and maintenance, information technology, and
construction trades. The Santa Ana, California-based Company
currently caters to 81,300 students.
FAIRFAX FINANCIAL: S&P Assigns BB Rating on C$200MM Pref. Stock
---------------------------------------------------------------
Standard & Poor's Ratings Services said that it assigned its
'BBB-' debt rating to Fairfax Financial Holdings Ltd.'s (FFH) C$350
million 4.95% senior unsecured notes due 2025. In addition, S&P
assigned its 'BB' local currency and 'P-3' Canada National Scale
rating to FFH's C$200 million Series M, five-year rate reset
preferred stock offering. S&P based the preferred stock rating on
two notches of subordination to its 'BBB-' long-term counterparty
credit and senior debt ratings on FFH. S&P expects the preferred
stock to qualify as intermediate equity content under S&P's
criteria for hybrid securities.
FFH expects to use the proceeds from the notes and the preferred
stock to partially fund the previously announced proposed
acquisition of Brit plc. The company also plans to fund part of
the acquisition through the recently announced issuance of C$650
million of subordinate voting shares. S&P expects all these issues
to close on or about March 3, 2015. If the acquisition is not
completed successfully, FFH will use the funds to augment the cash
position, increase short-term investments and marketable securities
at the holding company, refinance or retire other outstanding debt
and corporate obligations from time to time, and for general
corporate purposes.
On a pro-forma basis taking into account the debt, preferred stock,
and subordinated voting share issuance, as of the end of December
2014 S&P expects the company's financial leverage to be around 34%
and fixed-charge coverage to be around 2.9x. These metrics are
within S&P's expectations for the group.
RATINGS LIST
Fairfax Financial Holdings Ltd.
Counterparty Credit Rating BBB-/Negative/--
New Rating
Fairfax Financial Holdings Ltd.
C$350 mil. Sr. Unsecured Notes due 2025 BBB-
C$200 mil. Preferred Stock BB
Canada National Scale Preferred Share P-3
FIFTH STREET: Fitch Cuts Long-Term Issuer Default Rating to 'BB+
----------------------------------------------------------------
Fitch Ratings has downgraded Fifth Street Finance Corp.'s (FSC)
long-term Issuer Default Rating (IDR), secured debt rating, and
unsecured debt rating to 'BB+' from 'BBB-'. The Rating Watch
Negative assigned to FSC on July 31, 2014 has been removed. The
Rating Outlook is Negative.
KEY RATING DRIVERS
The rating downgrade reflects FSC's higher leverage levels,
combined with increased portfolio risk, an inconsistent dividend
policy, material portfolio growth in a very competitive
underwriting environment, asset quality deterioration, and weaker
operating performance.
During 2014, FSC increased the upper-bound of its long-term
leverage target from 0.7 times (x) to 0.8x, excluding SBA debt,
which is exempt from regulatory asset coverage calculations, but is
included in Fitch's assessment of FSC's leverage. Including SBA
debt in FSC's leverage calculation translates to total leverage
tolerance of 0.96x. Fitch views the increased leverage target as
aggressive, particularly given the portfolio shift into second lien
securities and increased use of leveraged off-balance sheet
vehicles, including the senior loan fund (SLF) and Healthcare
Finance Group LLC (HFG).
Furthermore, regulatory leverage exceeded the company's new limit
in three of the last four quarters, and amounted to 0.83x at Dec.
31, 2014, or 0.99x including SBA debt. This compares to 0.61x
average leverage for investment grade-rated peers as of Sept. 30,
2014.
On Feb. 20, 2015, FSC's stock was trading at a 21.3% discount to
net asset value, which is likely to restrict the firm from
accessing the equity markets for some time. As a result, cash
generated from portfolio repayments and sales will be needed to
reduce leverage, which could constrain FSC's ability to take
advantage of investment opportunities, relative to the peer group.
The increased leverage target comes as FSC's investment portfolio
has gradually shifted into riskier assets, in Fitch's view.
Although FSC remains a senior lender with 55.9% of the portfolio
invested in first lien positions, at Dec. 31, 2014, this is down
from 70.1% at Sept. 30, 2012. Fitch also calculates an adjusted
measure of first lien exposure, converting investments recorded as
loans to HFG and First Star Aviation to equity, as FSC wholly owns
those companies and is in a first-loss position. On this basis, as
of Dec. 31, 2014, Fitch calculates that FSC's first lien and equity
exposures stood at 49.9% and 15.9% of the portfolio, respectively.
While positions in HFG and the SLF represent investments in
diversified pools of loans, they are akin to equity investments in
lowly-levered CLOs, which incrementally alters the firm's risk
profile. Management has articulated its intention to grow the SLF
and/or add similar programs as an important driver of earnings
growth, which combined with an elevated leverage tolerance, is
viewed by Fitch as consistent with a below investment grade credit
profile.
FSC announced a steep (34.5%) dividend cut in February 2015, citing
a slower-than-expected ramp of the SLF and reduced fee
expectations, given more limited capital available for growth. The
dividend cut followed a 10% increase in the dividend in July 2014;
above run-rate core earnings, which was viewed as aggressive by
Fitch in the face of a still challenging yield spread environment
and unsustainable non-accrual levels. In November 2013, FSC cut its
dividend 13%, a move that was deemed prudent by Fitch. The
inconsistent dividend policy speaks to poor financial planning and
has likely cost the firm some credibility with equity investors; an
important source of growth capital.
FSC's investment portfolio grew 49.6% in 2013, followed by 17.9%
additional expansion in 2014. Fitch remains cautious of outsized
portfolio growth in the current credit environment, which is
generally characterized by tighter yield spreads, higher underlying
portfolio company leverage, and weaker covenant packages. Fitch
believes significant exposure to more recent vintages could yield
outsized asset quality issues down the road.
While Fitch believes industrywide credit metrics are at
unsustainable levels longer term, FSC did stand-out in the fourth
quarter of 2014; moving four investments to non-accrual status,
with one more expected in the first quarter of 2015. Non-accruals
accounted for 4.03% of the portfolio at cost, and 2.33% at fair
value, as of Dec. 31, 2014, compared with the investment grade peer
average of 0.90% at cost, and 0.55% at fair value, as of Sept. 30,
2014. FSC recorded a $17.6 million realized loss and additional
$48.2 million in unrealized losses, which reduced book value by
2.6% and inflated leverage by 0.04x.
The removal of the Rating Watch Negative reflects the decreased
near-term risk of not covering the dividend, as a result of
management's conservative realignment to core earnings. In place of
this near-term concern, however, are longer-term uncertainties
relating to management's fundamental risk appetite regarding
leverage, portfolio risk, growth, and dividend management, which
together support the assignment of a Negative Rating Outlook.
RATING SENSITVITIES
The ratings could be adversely affected by further deterioration in
asset quality, which yields sizeable realized losses and prevents
the firm from reducing leverage to a level commensurate with its
risk profile. A reduction in dividend coverage, a weakening
liquidity profile, and/or an equity market discount that puts the
firm at a competitive disadvantage could also drive negative rating
momentum.
Resolution of the Negative Outlook could develop over time based on
a track record of dividend coverage, solid credit performance of
post-crisis vintages, improved operating consistency, and the
maintenance of leverage at an appropriate level given the asset
risk. The portfolio risk profile will be analyzed in the context of
portfolio mix and diversity and underlying portfolio company
leverage and yields.
Fitch has removed from Rating Watch Negative and downgraded the
following ratings:
Fifth Street Finance Corp.
--Long-term IDR to 'BB+' from 'BBB-';
--Secured debt to 'BB+' from 'BBB-';
--Unsecured debt to 'BB+' from 'BBB-'.
The Rating Outlook is Negative.
GARLOCK SEALING: ACC Wants Plan Objection in Solicitation Package
-----------------------------------------------------------------
The Official Committee of Asbestos Personal Injury Claimants
("ACC") in Garlock Sealing Technologies LLC's Chapter 11 cases says
that the reasons for its recommendation that asbestos claimants
vote to reject the Debtor's plan of reorganization should be
included in the plan solicitation package being sent to creditors.
According to the ACC, the Debtors agree that the ACC should be
permitted to enclose a statement in the disclosure package to be
distributed to creditors, but ask that the ACC be prohibited from
saying there anything other than that the ACC opposes the Plan and
recommends that asbestos claimants vote against it. As the Debtors
concede, the ACC's opposition to the Plan, and its recommendation
that asbestos claimants vote against the Plan, constitute material
information that the asbestos claimants should consider in
determining whether to accept or reject the Plan. The ACC's
reasons for that recommendation constitute equally material
information.
The Debtors contend that the ACC's Statement includes legal
argument (while at the same time complaining that the ACC has not
provided support for its arguments). But the ACC has simply
stated its opinion that the Plan does not comport with Section
524(g) of the Bankruptcy Code and is not confirmable, and that the
Future Asbestos Claimants' Representative ("FCR") lacks legal
authority and capacity to vote on behalf of all future claimants.
It is the Debtors who have devoted much of their proposed
counter-statement to legal arguments regarding the estimation being
"law of the case," the supposed power of the FCR to vote on the
Plan, the nature of Section 524(g), and other confirmation issues.
Each of these issues will be hotly contested, and the Debtors
themselves admit that legal argument on these points has no place
in a solicitation package. The Debtors are free to state in their
belief that the plan can be confirmed, and already have done so in
their Disclosure Statement, in a far more tendentious manner than
the ACC. The ACC is equally entitled to inform the asbestos
claimants of its opposing view that the Plan cannot be confirmed.
Thus, according to ACC, the Court should reject the Debtors'
request, and permit the ACC to include its Statement in the
solicitation package in its entirety. The Court should also reject
the FCR's request that the last section of the ACC's Statement be
deleted. The FCR is correct that the ACC has not previously moved
to disqualify the FCR or his counsel, and the ACC is not making
such a motion now. But the FCR's statement that the ACC has not
previously raised concerns about the Orrick firm's role in
advocating against the interests of current and future asbestos
claimants is mistaken. The Co-Chair of the ACC raised these
concerns privately with the FCR in September 2011, after Mr.
Stengel, the managing director of Orrick's litigation department,
advocated before Congress in favor of measures the ACC believes run
counter to the rights and interests of asbestos victims, present
and future.
The Plan proponents tout the FCR's support as a reason why
claimants should trust that the Plan would serve their best
interests. The FCR has not denied the facts put forth by the ACC
concerning his inexperience in asbestos matters, his reliance on a
law firm closely tied to prominent asbestos defendants, and that
firm's leading role in so-called "reform" efforts aimed at
conferring advantages for asbestos defendants by undermining
traditional rights of plaintiffs in tort litigation. When
claimants are asked to vote on the Plan, those facts should be
called to their attention.
The ACC is represented by:
CAPLIN & DRYSDALE, CHARTERED
Trevor W. Swett III, Esq.
Leslie M. Kelleher
One Thomas Circle, N.W.
Washington, DC 20005
Tel: (202) 862-5000
E-mail: tswett@capdale.com
lkelleher@capdale.com
- and -
MOON WRIGHT & HOUSTON, PLLC
Travis W. Moon, Esq.
227 West Trade Street, Suite 1800
Charlotte, NC 28202
Tel: (704) 944-6560
E-mail: tmoon@mwhattomeys.com
About Garlock Sealing
Headquartered in Palmyra, New York, Garlock Sealing Technologies
LLC is a unit of EnPro Industries, Inc. (NYSE: NPO). For more
than a century, Garlock has been helping customers efficiently
seal the toughest process fluids in the most demanding
applications.
On June 5, 2010, Garlock filed a voluntary Chapter 11 petition
(Bankr. W.D.N.C. Case No. 10-31607) in Charlotte, North Carolina,
to establish a trust to resolve all current and future asbestos
claims against Garlock under Section 524(g) of the U.S. Bankruptcy
Code. The Debtor estimated $500 million to $1 billion in assets
and up to $500 million in debts as of the Petition Date.
Affiliates The Anchor Packing Company and Garrison Litigation
Management Group, Ltd., also filed for bankruptcy.
Albert F. Durham, Esq., at Rayburn Cooper & Durham, P.A.,
represents the Debtor in their Chapter 11 effort. Garland S.
Cassada, Esq., at Robinson Bradshaw & Hinson, serves as counsel
for asbestos matters.
The Official Committee of Asbestos Personal Injury Claimants in
the Chapter 11 cases is represented by Travis W. Moon, Esq., at
Hamilton Moon Stephens Steele & Martin, PLLC, in Charlotte, NC,
Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, in New
York, and Trevor W. Swett III, Esq., Leslie M. Kelleher, Esq., and
Jeanna Rickards Koski, Esq., in Washington, D.C. 20005.
Joseph W. Grier, III, the Court-appointed legal representative for
future asbestos claimants, has retained A. Cotten Wright, Esq., at
Grier Furr & Crisp, PA, and Richard H. Wyron, Esq., and Jonathan
P. Guy, Esq., at Orrick, Herrington & Sutcliffe LLP, as his
co-counsel.
Judge George Hodges of the United States Bankruptcy Court for the
Western District of North Carolina on Jan. 10, 2014, entered an
order estimating the liability for present and future mesothelioma
claims against Garlock Sealing at $125 million, consistent with
the positions GST put forth at trial.
GARLOCK SEALING: Files Disclosure Statement for 2nd Amended Plan
----------------------------------------------------------------
According to the disclosure statement in support of its Second
Amended Plan of Reorganization dated Jan. 14, 2015, Garlock Sealing
Technologies LLC and Garrison Litigation Management Group, Ltd.,
have property that substantially exceeds the costs necessary to
resolve and pay in full all claims.
The Plan will pay all holders of allowed GST asbestos claims and
allowed non-asbestos claims in full. No holders of claims are
impaired under the Plan. Holders of GST and Garrison equity
interests (Classes 10 and 11) are impaired and will be solicited.
Holders of Settled GST Asbestos Claims (Class 3), Current GST
Asbestos Claims (Class 4), Future GST Asbestos Claims (Class 5),
Pre-Petition Judgment GST Asbestos Claims (Class 6), and General
Unsecured Claims (Class 7) will be solicited in the event that the
Court determines they are impaired or the Court determines their
votes are otherwise relevant to confirmation of the Plan.
The Plan provides for (a) payment in full, in Cash, of allowed
amounts of all claims against GST and Garrison and (b) cancellation
of the GST and Garrison equity interests and distribution of new
equity in Reorganized GST and Reorganized Garrison to a newly
formed subsidiary of EnPro Industries, Inc., an Affiliate of the
Debtors.
The Anchor Packing Company, on the other hand, is a dormant entity
that has not had any property or paid any asbestos-related claims
in many years. The Plan accordingly provides for dissolution and
liquidation of Anchor, with no distribution of property to
creditors. The Plan recognizes and addresses four principal
classes of asbestos-related Claims: Settled GST Asbestos Claims
(Class 3); Current GST Asbestos Claims (Class 4); Future GST
Asbestos Claims (Class 5); and Pre-Petition Judgment GST Asbestos
Claims (Class 6). In addition, there are some asbestos personal
injury Claims in the class of Anchor Claims (Class 8).
Allowance of Current GST Asbestos Claims (Class 4) and Future GST
Asbestos Claims (Class 5) and payment of such Claims that are
allowed will take place after the Effective Date. The Claimants
will have the opportunity to elect either the Litigation Option or
the Settlement Option. The Litigation Option fully preserves the
Claimants' rights in allowance litigation pursuant to the
Bankruptcy Code.
Payment of Allowed Settled GST Asbestos Claims will take place on
or after the Effective Date.
The Debtors will create the Settlement Facility, which will assume
sole responsibility for Current GST Asbestos Claims (Class 4),
Future GST Asbestos Claims (Class 5), and Pre-Petition Judgment GST
Asbestos Claims (Class 6) whose Holders elect the Settlement
Option, and the Settlement Facility will pay all such Claims that
are Allowed under the procedures of the CRP. Reorganized Garrison
shall receive and defend Current GST Asbestos Claims (Class 4) and
Future GST Asbestos Claims (Class 5) whose Holders elect the
Litigation Option. The Settlement Facility and Reorganized
Garrison will assume joint responsibility for paying the costs of
defending and resolving such Claims.
Reorganized Garrison will use the Litigation Fund to pay its share
of the costs of managing the Claims allowance process for
Litigation Option Claims, prosecuting objections to Litigation
Option Claims, and paying any such Claims that are Allowed.
Reorganized Garrison will also receive and defend Pre-Petition
Judgment GST Asbestos Claims (Class 6) who elect to complete state
court appeals (or who, after reversal of a judgment that does not
result in Disallowance, elect the Litigation Option), and the
Settlement Facility and Reorganized Garrison will assume joint
responsibility for paying the costs of defending and resolving the
Claims.
Reorganized GST will pay Allowed Settled GST Asbestos Claims
(Class 3).
Finally, Anchor will assume responsibility for Anchor Claims
(Class 8) but Anchor, which has no property, will be liquidated
and dissolved in accordance with the provisions of Article 14 of
Chapter 55 of the North Carolina Business Corporation Act.
A copy of the Disclosure Statement is available for free at:
http://is.gd/aXaMyt
About Garlock Sealing
Headquartered in Palmyra, New York, Garlock Sealing Technologies
LLC is a unit of EnPro Industries, Inc. (NYSE: NPO). For more
than a century, Garlock has been helping customers efficiently
seal the toughest process fluids in the most demanding
applications.
On June 5, 2010, Garlock filed a voluntary Chapter 11 petition
(Bankr. W.D.N.C. Case No. 10-31607) in Charlotte, North Carolina,
to establish a trust to resolve all current and future asbestos
claims against Garlock under Section 524(g) of the U.S. Bankruptcy
Code. The Debtor estimated $500 million to $1 billion in assets
and up to $500 million in debts as of the Petition Date.
Affiliates The Anchor Packing Company and Garrison Litigation
Management Group, Ltd., also filed for bankruptcy.
Albert F. Durham, Esq., at Rayburn Cooper & Durham, P.A.,
represents the Debtor in their Chapter 11 effort. Garland S.
Cassada, Esq., at Robinson Bradshaw & Hinson, serves as counsel
for asbestos matters.
The Official Committee of Asbestos Personal Injury Claimants in
the Chapter 11 cases is represented by Travis W. Moon, Esq., at
Hamilton Moon Stephens Steele & Martin, PLLC, in Charlotte, NC,
Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, in New
York, and Trevor W. Swett III, Esq., Leslie M. Kelleher, Esq., and
Jeanna Rickards Koski, Esq., in Washington, D.C. 20005.
Joseph W. Grier, III, the Court-appointed legal representative for
future asbestos claimants, has retained A. Cotten Wright, Esq., at
Grier Furr & Crisp, PA, and Richard H. Wyron, Esq., and Jonathan
P. Guy, Esq., at Orrick, Herrington & Sutcliffe LLP, as his
co-counsel.
Judge George Hodges of the United States Bankruptcy Court for the
Western District of North Carolina on Jan. 10, 2014, entered an
order estimating the liability for present and future mesothelioma
claims against Garlock Sealing at $125 million, consistent with
the positions GST put forth at trial.
GENERAL MOTORS: Ignition-Switch Death Toll Rises to 57 People
-------------------------------------------------------------
Jeff Bennett, writing for The Wall Street Journal, reported that
the number of deaths attributed to General Motors Co.'s failed
ignition switch rose to 57 people as administrators of the
compensation fund continued examining claims.
According to the report, the number of eligible injury claims
increased to 94 people from 87 the previous week. A final tally
likely won't be known for weeks as Washington D.C. attorneys Ken
Feinberg and Camille Biros continue checking on eligibility, the
Journal related.
About General Motors
General Motors Corporation and three of its affiliates filed for
Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 09-50026) on
June 1, 2009. The Honorable Robert E. Gerber presides over the
Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq.,
and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP,
assist the Debtors in their restructuring efforts. Al Koch at AP
Services, LLC, an affiliate of AlixPartners, LLP, serves as the
Chief Executive Officer for Motors Liquidation Company. GM is
also
represented by Jenner & Block LLP and Honigman Miller Schwartz and
Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing
legal advice to the GM Board of Directors. GM's financial
advisors
are Morgan Stanley, Evercore Partners and the Blackstone Group
LLP.
Garden City Group is the claims and notice agent of the Debtors.
The U.S. Trustee appointed an Official Committee of Unsecured
Creditors and a separate Official Committee of Unsecured Creditors
Holding Asbestos-Related Claims. Lawyers at Kramer Levin Naftalis
& Frankel LLP served as bankruptcy counsel to the Creditors
Committee. Attorneys at Butzel Long served as counsel on supplier
contract matters. FTI Consulting Inc. served as financial
advisors
to the Creditors Committee. Elihu Inselbuch, Esq., at Caplin &
Drysdale, Chartered, represented the Asbestos
Committee. Legal Analysis Systems, Inc., served as asbestos
valuation analyst.
The Bankruptcy Court entered an order confirming the Debtors'
Second Amended Joint Chapter 11 Plan on March 29, 2011. The Plan
was declared effect on March 31.
On Dec. 15, 2011, Motors Liquidation Company was dissolved. On
the
Dissolution Date, pursuant to the Plan and the Motors Liquidation
Company GUC Trust Agreement, dated March 30, 2011, between the
parties thereto, the trust administrator and trustee -- GUC Trust
Administrator -- of the Motors Liquidation Company GUC Trust,
assumed responsibility for the affairs of and certain claims
against MLC and its debtor subsidiaries that were not concluded
prior to the Dissolution Date.
* * *
The Troubled Company Reporter, on Sep. 29, 2014, reported that
Standard & Poor's Ratings Services raised its corporate credit
rating on U.S. automaker General Motors Co. (GM) to 'BBB-' from
'BB+', and revised the outlook to stable from positive. At the
same time, S&P raised its issue-level rating on GM's unsecured
debt
to 'BBB-' from 'BB+' and simultaneously withdrew its '4' recovery
rating on that debt, because S&P do not assign recovery ratings to
the issues of investment-grade companies.
On Oct. 21, 2014, the TCR reported that Fitch Ratings has assigned
a rating of 'BB+' to GM's amended unsecured credit facilities.
Fitch currently rates GM's Issuer Default Rating (IDR) 'BB+'. The
Rating Outlook is Positive. Fitch has also affirmed and withdrawn
the 'BB+' IDR of GM's General Motors Holdings LLC (GM Holdings)
subsidiary, as there is no longer any rated debt at the
subsidiary,
and Fitch does not expect the subsidiary to be an active issuer
going forward. Fitch has also withdrawn GM Holdings' unsecured
credit facility rating of 'BB+' as the subsidiary is no longer a
borrower on the facilities.
The TCR, on Nov. 6, 2014, reported that Fitch Ratings has assigned
a rating of 'BB+' to GM's proposed issuance of senior unsecured
notes. The existing Issuer Default Rating (IDR) for GM is 'BB+'
and the Rating Outlook is Positive.
GENERAL MOTORS: Trial Plan Put Forth for Ignition-Swith Lawsuits
----------------------------------------------------------------
Amanda Bronstad at The National Law Journal reports that U.S.
District Judge Jesse Furman of the Southern District of New York
has put forth a trial plan for the General Motors ignition-switch
litigation.
Law Journal relates that on Feb. 6, 2015, Judge Furman set up
parameters for an initial discovery pool of 18 cases, with each
side allowed to select five cases from the initial pool by June 24,
2015, for a bellwether trial. Each will strike two more cases by
July 1, 2015, narrowing the field to six, the report states.
Judge Furman, according to Law Journal, has restricted the
bellwether process to vehicles recalled over the ignition-switch
defect. Law Journal says that GM attorneys at Kirkland & Ellis had
sought to expand the pool to include cases in which air bags
deployed and to those involving model years 2008 through 2011, some
of which may have had defective ignition switches installed as
replacement parts.
Law Journal reports that on Feb. 17, 2015, Judge Furman ordered
that all the cases fit into three categories suggested by the
plaintiffs attorneys: deaths, severe injuries and moderate
injuries.
Of those that go to trial, "one will be a death case, one will be a
severe injury case, and a couple of them will be moderate-injury
cases, depending on the percentage of those cases," Law Journal
quoted Robert Hilliard, Esq., a partner at Hilliard Munoz Gonzales
and one of three lead plaintiffs attorneys in the ignition-switch
litigation, as saying. According to Law Journal, the first trial
is set for Jan. 11, 2016.
Citing Alexandra Lahav, a professor at the University of
Connecticut School of Law, Law Journal relates that the so-called
"bellwether" trial process is aimed at helping the two sides reach
a settlement of all the cases. "If the parties understand the
shared value of the cases, they can come to the table and have
settlement negotiations," the report quoted Ms. Lahav as saying.
Law Journal says that on Feb. 17, 2015, U.S. Bankruptcy Judge
Robert Gerber of the Southern District of New York heard arguments
on GM's motion to bar lawsuits over accidents that occurred before
July 11, 2009, the date when a reorganized GM acquired old GM's
assets out of Chapter 11. The report says that GM set up an
unlimited fund -- which closed on Jan. 31, 2015 -- to compensate
victims of the defect and their families, and has received more
than 4,300 claims. According to the report, Mr. Hilliard said that
about 950 people -- victims of accidents after 2009, so GM's
bankruptcy motion doesn't apply to them -- are taking their chances
in court, Law Journal relates. Some rejected the amounts offered
by the fund or were ineligible to receive payments because their
cars were recalled for other defects or, during their accidents,
the air bags deployed, the report states.
About General Motors
General Motors Corporation and three of its affiliates filed for
Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 09-50026) on
June 1, 2009. The Honorable Robert E. Gerber presides over the
Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq.,
and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP,
assist the Debtors in their restructuring efforts. Al Koch at AP
Services, LLC, an affiliate of AlixPartners, LLP, serves as the
Chief Executive Officer for Motors Liquidation Company. GM is also
represented by Jenner & Block LLP and Honigman Miller Schwartz and
Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing
legal advice to the GM Board of Directors. GM's financial advisors
are Morgan Stanley, Evercore Partners and the Blackstone Group LLP.
Garden City Group is the claims and notice agent of the Debtors.
The U.S. Trustee appointed an Official Committee of Unsecured
Creditors and a separate Official Committee of Unsecured Creditors
Holding Asbestos-Related Claims. Lawyers at Kramer Levin Naftalis
& Frankel LLP served as bankruptcy counsel to the Creditors
Committee. Attorneys at Butzel Long served as counsel on supplier
contract matters. FTI Consulting Inc. served as financial advisors
to the Creditors Committee. Elihu Inselbuch, Esq., at Caplin &
Drysdale, Chartered, represented the Asbestos Committee. Legal
Analysis Systems, Inc., served as asbestos valuation analyst.
The Bankruptcy Court entered an order confirming the Debtors'
Second Amended Joint Chapter 11 Plan on March 29, 2011. The Plan
was declared effect on March 31.
On Dec. 15, 2011, Motors Liquidation Company was dissolved. On the
Dissolution Date, pursuant to the Plan and the Motors Liquidation
Company GUC Trust Agreement, dated March 30, 2011, between the
parties thereto, the trust administrator and trustee -- GUC Trust
Administrator -- of the Motors Liquidation Company GUC Trust,
assumed responsibility for the affairs of and certain claims
against MLC and its debtor subsidiaries that were not concluded
prior to the Dissolution Date.
* * *
The Troubled Company Reporter, on Sep. 29, 2014, reported that
Standard & Poor's Ratings Services raised its corporate credit
rating on U.S. automaker General Motors Co. (GM) to 'BBB-' from
'BB+', and revised the outlook to stable from positive. At the
same time, S&P raised its issue-level rating on GM's unsecured debt
to 'BBB-' from 'BB+' and simultaneously withdrew its '4' recovery
rating on that debt, because S&P do not assign recovery ratings to
the issues of investment-grade companies.
On Oct. 21, 2014, the TCR reported that Fitch Ratings has assigned
a rating of 'BB+' to GM's amended unsecured credit facilities.
Fitch currently rates GM's Issuer Default Rating (IDR) 'BB+'. The
Rating Outlook is Positive. Fitch has also affirmed and withdrawn
the 'BB+' IDR of GM's General Motors Holdings LLC (GM Holdings)
subsidiary, as there is no longer any rated debt at the subsidiary,
and Fitch does not expect the subsidiary to be an active issuer
going forward. Fitch has also withdrawn GM Holdings' unsecured
credit facility rating of 'BB+' as the subsidiary is no longer a
borrower on the facilities.
The TCR, on Nov. 6, 2014, reported that Fitch Ratings has assigned
a rating of 'BB+' to GM's proposed issuance of senior unsecured
notes. The existing Issuer Default Rating (IDR) for GM is 'BB+'
and the Rating Outlook is Positive.
GRANITE STATE PLASMA: Selling Assets HMGS; Counterbids Due March 3
------------------------------------------------------------------
Edmond J. Ford, Chapter 11 Trustee for Granite State Plasma Cutting
Ltd. Harmony Metal Products North, Inc., and Harmony Land Holdings,
LLC, has filed a Motion to Sell Free and Clear of Liens Pursuant to
11 U.S.C. 363(b) and (f). The Bankruptcy Court in New Hampshire
has scheduled a sale hearing to be held March 17, 2015 at 2:00 p.m.
The sale may include the assumption, cure and assignment of
executory contracts or leases. The list of such assumed, cured and
assigned executory contracts and leases together with cure amounts
were to be filed and served on or before Feb. 12, 2015.
Counterparties to any assumed executory contract or lease must file
any objection to such assumption or such cure on or before March
16, 2015.
The Trustee proposes to sell all of the Transferred Assets and
Titled Vehicles free and clear of liens claims and encumbrances to
HMGS Finance LLC for a purchase price of $1.55 million, subject to
higher and better bids of at least $1.7 million or higher. Such a
sale may, at the Purchaser's option, include Supplemental Assets
and Supplemental Vehicles purchased subject to existing purchase
money or lease financing for an additional purchase price. Payment
will be in cash and must close on or before April 3, 2015.
The 'Transferred Assets' mean all real estate and buildings located
at 1412 NH Route 175, Holderness, NH, all machinery, equipment,
tooling owned by the Debtor, accounts receivable under 90 days in
age, customer list, any intellectual property owned by the Debtor,
any intangibles, purchase orders, any book of business, and any
associated goodwill. The Purchaser will also purchase the Titled
Vehicles for an allocated portion of the Purchase Price of not less
than $35,000 of the overall purchase price.
Qualified Bidders will submit any offers or counteroffers to the
Trustee on or before March 3, 2015.
Notice to all of the counterparties to any executory contract or
lease proposed to be assumed by the Qualified Bidder shall be sent
on or before March 4, 2015.
Only Qualified Bidders who shall have submitted Qualified Offers
may participate in any auction at the hearing on the Motion to Sell
Free and Clear. HMGS Finance may also bid at the auction. If there
are no other Qualified Bidders, the Trustee will seek approval of
the stalking horse bid from HMGS.
Any response or objection to the sale shall be filed with the
Clerk's Office, United States Bankruptcy Court, 1000 Elm Street,
10th Floor, Manchester, New Hampshire 03101 on or before March 3,
2015, with a copy to the undersigned.
Edmond J. Ford, Chapter 11 Trustee, is represented by:
Edmond J. Ford, Esq.
10 Pleasant Street, Suite 400
Portsmouth, NH 03801
Tel: 603-433-2002
Fax: 603-433-2122
E-mail: eford@fordlaw.com
Granite State Plasma Cutting Ltd. filed for Chapter 11 bankruptcy
(Bankr. D. N.H. Case No. 14-12165) on November 6, 2014, listing
under $1 million in both assets and liabilities. A copy of the
petition is available at http://bankrupt.com/misc/nhb14-12165.pdf
William S. Gannon, Esq. -- bgannon@gannonlawfirm.com -- at William
S. Gannon, PLLC, serves as the Debtor's counsel.
GREEN MOUNTAIN: Can File Bankr. Plan Exclusivity Thru May 21
------------------------------------------------------------
Green Mountain Management LLC and its debtor-affiliates convinced
the U.S. Bankruptcy Court for the Northern District of Georgia to
further extend their exclusive period to file a Chapter 11 plan
through and including May 21, 2015. The Debtors' exclusive period
to solicit acceptances of that plan is also extended through July
20, 2015.
About Green Mountain
Green Mountain Management, LLC, filed a Chapter 11 bankruptcy
petition (Bankr. N.D. Ga. Case No. 14-64287) on July 25, 2014. The
petition was signed by Daniel B. Cowart, sole member of Georgia
Flattop Partners, LLC, and chairman of Green Mountain Management,
LLC.
According to the docket, the Debtor's Chapter 11 plan and
disclosure statement are due Nov. 24, 2014.
The Debtor estimated $10 million to $50 million in assets and
debt.
Georgia Flattop Partners, LLC is the managing member and holders
of 93% of the stock.
The case is assigned to Judge Barbara Ellis-Monro.
The Debtor is represented by Sage M. Sigler, Esq., at Alston &
Bird, LLP, in Atlanta.
No official committee of unsecured creditors has been appointed,
and UMB Bank, n.a.'s request for the appointment of a trustee was
resolved consensually pursuant to this Court's order entered on
Nov. 20, 2014.
GREEN MOUNTAIN: Lease Decision Period Extended to March 23
----------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Georgia
entered an order extending the deadline for Green Mountain
Management LLC and its debtor-affiliates to assume or reject
unexpired leases of non-residential real property through and
including March 23, 2015.
The Debtors sought an Aug. 17, 2015 extension of the lease decision
deadline.
At the Feb. 11, 2015 hearing on the Motion, counsel for the Debtors
represented to the Court that the Debtors are continuing to work
with the Solid Waste Disposal Authority of the City of Adamsville,
Alabama ("Lessor") to negotiate the terms of an extension of the
Assumption/Rejection Period through and including August 17, 2015,
but that the Lessor has agreed to extend the Assumption/Rejection
Period through and including March 23, 2015. The Debtors and the
Lessor anticipate submitting an agreed order further extending the
Assumption/Rejection Period through and including Aug. 17, 2015,
prior to March 23, 2015.
Judge Barbara Ellis-Monro in her Feb. 11 order said that the
Court's order will be subject to and without prejudice to the
rights of the Debtors and the Lessor to submit an agreed order
further extending the Assumption/Rejection Period through and
including Aug. 15, 2015, without the need for further notice or a
hearing.
In the Motion, the Debtors told the Court that their only unexpired
lease is the lease dated Aug. 1, 2010, with Solid Waste Disposal
Authority of the City, under which they are the lessee of a
municipal solid waste landfill in Adamsville, Alabama. In
connection with the landfill lease, Green Mountain and the City are
also parties to a host agreement dated Oct. 20, 2010. Their
obligations under the host agreement are the only obligations Green
Mountain owes directly to the City in connection with the landfill
lease. The Debtors assert that to the best of their knowledge,
information, and belief, they have timely performed all of their
postpetition obligations owing directly to the City.
About Green Mountain
Green Mountain Management, LLC, filed a Chapter 11 bankruptcy
petition (Bankr. N.D. Ga. Case No. 14-64287) on July 25, 2014. The
petition was signed by Daniel B. Cowart, sole member of Georgia
Flattop Partners, LLC, and chairman of Green Mountain Management,
LLC. The Debtor estimated $10 million to $50 million in assets and
debt. Georgia Flattop Partners, LLC is the managing member and
holders of 93% of the stock.
The case is assigned to Judge Barbara Ellis-Monro.
The Debtor is represented by Sage M. Sigler, Esq., at Alston &
Bird, LLP, in Atlanta.
No official committee of unsecured creditors has been appointed,
and UMB Bank, n.a.'s request for the appointment of a trustee was
resolved consensually pursuant to this Court's order entered on
Nov. 20, 2014.
HEI INC: Gets Green Light to Sell Two Facilities
------------------------------------------------
Microelectronics maker HEI Inc. received approval from U.S.
Bankruptcy Judge Kathleen Sanberg to sell its two facilities for
more than $4.4 million.
Industrial Asset Corp. and Maynards Industries Inc. offered $1.88
million for HEI's facility in Victoria, Minnesota. Meanwhile,
Cochlear Manufacturing Corp. will purchase the other facility
located in Tempe, Arizona, for $2.55 million.
The companies emerged as the winning bidders at an auction held on
Feb. 5, beating out HT Electronics LLC and several other rival
bidders.
HT Electronics was the stalking horse bidder, offering $1.28
million and $1.525 million for the Tempe and Victoria facilities
respectively. The company will receive a break-up fee of $60,000
for not being selected as the winning bidder, according to court
filings.
The sale previously drew flak from Community Bank Corp., First
Minnetonka City Bank and tech firm Orbotech Inc.
Orbotech, producer of automated optical inspection equipment,
expressed concern that the software it owns would be included in
the sale. Meanwhile, the banks, which have existing leases with
HEI, complained that the company did not meet the requirements to
assume and assign the leases to the buyers.
About HEI, Inc.
HEI, Inc., filed a Chapter 11 bankruptcy petition (Bankr. D. Minn.
Case No. 15-40009) in Minneapolis, Minnesota, on Jan. 4, 2015. The
case is assigned to Judge Kathleen H. Sanberg.
The Debtor estimated $10 million to $50 million in assets and
debt.
The deadline for governmental entities to file claims is July 6,
2015.
The Debtor has tapped James L. Baillie, Esq., James C. Brand, Esq.,
and Sarah M Olson, Esq., at Fredrikson & Byron P.A., as counsel;
Alliance Management as business and financial consultant; and
Winthrop & Weinstine, P.A., as special counsel.
The U.S. Trustee has appointed three members to the Official
Committee of Unsecured Creditors. The Committee is represented by
Fafinski, Mark & Johnson, P.A., as its bankruptcy counsel.
HEPAR BIOSCIENCE: Section 341(a) Meeting Set for March 25
---------------------------------------------------------
There will be a meeting of creditors in the bankruptcy case of
Hepar BioScience LLC on March 25, 2015, at 9:30 a.m. at Suite 300,
314 S Main Ave, Sioux Falls. Deadline to file proofs of claim is
May 26, 2015.
This is the first meeting of creditors required under Section
341(a) of the Bankruptcy Code in all bankruptcy cases.
All creditors are invited, but not required, to attend. This
meeting of creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Hepar BioScience LLC filed a Chapter 11 bankruptcy petition (Bank.
D.S.D. Case No. 15-40057) on Feb. 20, 2015. The petition was
signed by Mark Nylen as authorized individual. The Debtor
estimated assets and liabilities of $10 million to $50 million.
Clair R. Gerry, Esq., at Gerry & Kulm Ask, Prof. LLC, serves as the
Debtor's counsel. Judge Charles L. Nail, Jr., presides over the
case.
The Debtor is in the business of receiving porcine (pork)
by-products (concentrated peptone, a functional pork protein and
animal fat) from its largest supplier (SPLIMobren) and
other meat by-products from other suppliers that are primary used
in the porcine animal nutrition feed industry (concentrated porcine
peptone) and biodiesel or animal feed business (animal fat).
HOME LOAN: S&P Puts 'B+' ICR on CreditWatch Negative
----------------------------------------------------
Standard & Poor's Ratings Services said it placed its 'B+'
long-term issuer credit rating on Home Loan Servicing Solutions
Ltd. (HLSS) on CreditWatch with negative implications.
The CreditWatch placement follows the announcement that NRZ, an
affiliate to Nationstar Mortgage LLC that is externally managed by
a fund of Fortress Investment Group, will acquire all of the
outstanding shares of HLSS for approximately $1.3 billion in cash.
The purchase price is about a 10% premium to the company's stock
price, roughly equal to the company’s $1.277 billion tangible
book value as of Sept. 30, 2014.
NRZ indicated on a public conference call that it will use assets
on its balance sheet to pay the $1.3 billion purchase
price--instead of raising new debt or equity, although it could of
course raise either in the near future. As it stands now, pro
forma leverage at the combined companies would rise materially
compared with the current leverage the two companies reported
individually at Sept. 30, 2014. The companies combined will have
about $16 billion in assets relative to NRZ’s $1.8 billion in
equity.
There is also uncertainty on how the combined company will manage
its funding and liquidity. Currently, HLSS primarily relies on
match-funded securitizations to finance its servicer advances,
which make up about 75% of the company's balance sheet. S&P
believes match-funding assets and liabilities significantly reduce
the likelihood of a liquidity event. A review of NRZ's financial
statements, however, show that the company uses a substantial
amount of short-term repurchase agreements and note payables to
fund its assets--a factor S&P believes hurts the firm's funding and
liquidity position.
HLSS' senior secured term loan contains a change-in-control
provision requiring debt repayment under an acquisition. However,
S&P is uncertain at this time whether NRZ will pay off the debt or
seek some sort of refinancing. S&P is not placing its rating on
HLSS' term loan on CreditWatch because S&P believes NRZ may have to
pay off the debt as part of this transaction.
"We would likely lower the rating on HLSS if we expect higher
leverage at the combined company or a liquidity profile that relied
on a substantial amount of short-term sources," said Standard &
Poor's credit analyst Stephen Lynch.
S&P will likely resolve the CreditWatch listing upon or before the
close of the merger, after meeting with the company's management
team to discuss its action plans for the capital structure and
funding position of the combined company. If S&P takes a negative
rating action based on these discussions, it would likely lower the
rating by only one notch, unless it assess liquidity as weak.
IMPLANT SCIENCES: Incurs $6.2 Million Net Loss in Second Quarter
----------------------------------------------------------------
Implant Sciences Corporation reported a net loss of $6.24 million
on $2.14 million of revenues for the three months ended Dec. 31,
2014, compared to a net loss of $4.38 million on $3.15 million of
revenues for the same period in 2013.
For the six months ended Dec. 31, 2014, the Company reported a net
loss of $11.6 million on $4.04 million of revenues compared to a
net loss of $10.40 million on $4.31 million of revenues for the
same period a year ago.
As of Dec. 31, 2014, the Company had $5.51 million in total assets,
$75.9 million in total liabilities and a $70.39 million total
stockholders' deficit.
William McGann, president and CEO of Implant Sciences, commented,
"During the recently concluded quarter we secured product approvals
in Russia and China, which we believe positions the Company for
consistent and sustainable growth. Coupled with our execution of
an Indefinite Delivery / Indefinite Quantity ("IDIQ") contract with
the TSA for up to $162 million and the receipt of an initial
delivery order under this IDIQ from the TSA for 1,170 QS-B220's and
ancillary services and supplies in November 2014, we have taken
important steps to broaden the markets we serve, increase our
revenue opportunities, and improve our financial stability. We
remain confident about our future prospects."
http://www.sec.gov/Archives/edgar/data/1068874/000106887415000011/imsc150220_ex99z1.htm
A full-text copy of the press release is available at:
http://is.gd/hs6jq9
About Implant Sciences
Implant Sciences Corporation (OBB: IMSC.OB) --
http://www.implantsciences.com/-- develops, manufactures and
sells sensors and systems for the security, safety and defense
(SS&D) industries.
For the fiscal year ended June 30, 2014, the Company reported a
net loss of $21.01 million on $8.55 million of revenues compared
to a net loss of $27.3 million on $12.01 million of revenues
during the prior fiscal year.
Marcum LLP, in Boston, Massachusetts, 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 had recurring net losses and continues to
experience negative cash flows from operations. As of Sept. 23,
2014, the Company's principal obligation to its primary lenders
was approximately $53.4 million and accrued interest of
approximately $10.2 million. The Company is required to repay all
borrowings and accrued interest to these lenders on March 31,
2015. These conditions raise substantial doubt about its ability
to continue as a going concern.
Bankruptcy Warning
"Our ability to comply with our debt covenants in the future
depends on our ability to generate sufficient sales and to control
expenses, and will require that we seek additional capital through
private financing sources. There can be no assurances that we
will achieve our forecasted financial results or that we will be
able to raise additional capital to operate our business. Any
such failure would have a material adverse impact on our liquidity
and financial condition and could force us to curtail or
discontinue operations entirely. Further, upon the occurrence of
an event of default under certain provisions of our credit
agreements, we could be required to pay default rate interest
equal to the lesser of 2.5% per month and the maximum applicable
legal rate per annum on the outstanding principal balance
outstanding. The failure to refinance or otherwise negotiate
further extensions of our obligations to our secured lenders would
have a material adverse impact on our liquidity and financial
condition and could force us to curtail or discontinue operations
entirely and/or file for protection under bankruptcy laws," the
Company stated in its quarterly report for the period ended
Sept. 30, 2014.
INTERLEUKIN GENETICS: Merlin Biomed Has 5.2% Stake as of Dec. 31
----------------------------------------------------------------
Merlin Biomed Private Equity Advisors, LLC, Merlin Nexus IV, L.P.
and Dominique Semon disclosed in a document filed with the
Securities and Exchange Commission that as of Dec. 31, 2014, they
beneficially owned 900,322 shares of common stock of Interleukin
Genetics Inc., which represents 5.20 percent of the shares
outstanding. This percentage is based upon 172,683,343 shares
outstanding as of Dec. 23, 2014, which is the sum of the number of
outstanding shares of Common Stock reported in the Issuer's Form
10-Q filed with the SEC on Nov. 13, 2014, plus an aggregate of
50,099,700 shares of Common Stock issued by the Issuer to certain
purchasers on Dec. 23, 2014, as described in the Issuer's Form 8-K
filed with the SEC on Dec. 23, 2014. A copy of the regulatory
filing is available for free at http://is.gd/PeLbAB
About Interleukin
Waltham, Mass.-based Interleukin Genetics, Inc., is a personalized
health company that develops unique genetic tests to provide
information to better manage health and specific health risks.
Interleukin Genetics incurred a net loss of $7.05 million on $2.42
million of total revenue for the year ended Dec. 31, 2013, as
compared with a net loss of $5.12 million on $2.23 million of
total revenue in 2012.
As of Sept. 30, 2014, the Company had $4.45 million in total
assets, $3.51 million in total liabilities, all current, and
$937,000 in total stockholders' equity.
Grant Thornton LLP, in Boston, Massachusetts, issued a "going
concern" qualification on the consolidated financial statements
for the year ended Dec. 31, 2013. The independent auditors noted
that the Company has incurred recurring losses from operations and
has an accumulated deficit that raise substantial doubt about the
Company's ability to continue as a going concern.
Bankruptcy Warning
The Company warned in its quarterly report for the period ended
Sept. 30, 2014, that if it fails to obtain additional capital by
Feb. 28, 2015, it may have to end its operations and seek
protection under bankruptcy laws.
"We expect that our current and anticipated financial resources
will be adequate to maintain our current and planned operations
only through February 28, 2015. We need significant additional
capital to fund our continued operations, including for the
continued commercial launch of our PerioPredictTM test, continued
research and development efforts, obtaining and protecting patents
and administrative expenses. We have retained a financial
advisor, however, based on current economic conditions, additional
financing may not be available, or, if available, it may not be
available on favorable terms. In addition, the terms of any
financing may adversely affect the holdings or the rights of our
existing shareholders. For example, if we raise additional funds
by issuing equity securities, further dilution to our then-
existing shareholders will result. Debt financing, if available,
may involve restrictive covenants that could limit our flexibility
in conducting future business activities. We also could be
required to seek funds through arrangements with collaborators or
others that may require us to relinquish rights to some of our
technologies, tests or products in development. If we cannot
obtain additional funding on acceptable terms, we may have to
discontinue operations and seek protection under U.S. bankruptcy
laws."
INTERPUBLIC GROUP: S&P Puts 'BB+' CCR on CreditWatch Positive
-------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings, including
its 'BB+' corporate credit rating, on U.S.-based ad agency holding
company Interpublic Group of Cos. Inc. (IPG) on CreditWatch with
positive implications.
The CreditWatch placement reflects IPG's better-than-expected
organic revenue growth of 4.8% for fourth-quarter 2014 and 5.5% for
full-year 2014. IPG also experienced margin expansion of roughly
200 basis points to 17.8% in 2014 due to restructuring and related
costs taken in 2013 but were still up solidly excluding any
one-time items. Excluding one-time items, margins could remain
above 17.5% in 2015, absent a reversal in recent operating trends.
S&P could upgrade the company if it achieves and maintains adjusted
EBITDA margin above 17.5% (the midpoint of the 15%-20% range that
S&P considers average for the industry) and adjusted net leverage
in the low-2x area. S&P makes adjustments to both EBITDA and debt
consisting of pensions, other postemployment benefits (OPEBs), and
capitalized operating leases.
"We plan to resolve the CreditWatch placement in March following
discussions with management regarding the company's prospects for
organic revenue growth and confirmation regarding its financial
policy, as well as a detailed review of the company's most recent
10k report," said Standard & Poor's credit analyst Chris
Valentine.
ITUS CORP: Robert Berman Reports 6.2% Stake as of Feb. 18
---------------------------------------------------------
In an amended Schedule 13D filed with the Securities and Exchange
Commission, Robert A. Berman disclosed that as of Feb. 18, 2015,
he beneficially owned 14,415,104 shares of common stock of
ITUS Corporation consisting of:
(i) 528,650 shares of common stock;
(ii) 13,275,364 shares of common stock underlying options that
are exercisable within 60 days of the Feb. 18, 2015,
granted to the Reporting Person;
(iii) 444,440 shares of common stock underlying options that are
exercisable within 60 days of Feb. 18, 2015, granted to the
Reporting Person pursuant to the Company's 2010 Share
Incentive Plan; and
(iv) 166,650 shares of common stock underlying warrants that are
exercisable within 60 days of Feb. 18, 2015, purchased by
the Reporting Person in a private placement on Jan. 25,
2013. These shares, in the aggregate, represent 6.2% of
the shares of the Company.
A copy of the regulatory filing is available for free at:
http://is.gd/W3tZj0
About ITUS Corporation
ITUS Corp. -- http://www.ITUScorp.com/-- develops and acquires
patented technologies for the purposes of patent monetization and
patent assertion. The company currently has 10 patent portfolios
in the areas of Key Based Web Conferencing Encryption, Encrypted
Cellular Communications, E-Paper(R) Electrophoretic Display, Nano
Field Emission Display ("nFED"), Micro Electro Mechanical Systems
Display ("MEMS"), Loyalty Conversion Systems, J-Channel Window
Frame Construction, VPN Multicast Communications, Internet
Telephonic Gateway, and Enhanced Auction Technologies.
CopyTele changed its name to "ITUS Corporation" on Sept. 2, 2014,
to reflect the Company's change in its business operations.
Itus Corporation reported a net loss of $9.60 million on $3.66
million of total revenue for the year ended Oct. 31, 2014, compared
to a net loss of $10.08 million on $389,0000 of total revenue for
the year ended Oct. 31, 2013. The Company also reported a net loss
of $4.25 million for the year ended Oct. 31, 2012, and a net loss
of $7.37 million for the year ended Oct. 31, 2011.
As of Oct. 31, 2014, the Company had $9.05 million in total assets,
$5.04 million in total liabilities and $4 million in total
shareholders' equity.
IVANHOE ENERGY: Receives Delisting Notice From Nasdaq
-----------------------------------------------------
Ivanhoe Energy Inc. on Feb. 23 disclosed that the company received
a letter, dated February 20, 2015, from the Listing Qualifications
Department of The Nasdaq Stock Market informing the company that,
after reviewing the company's news release dated February 20, 2015
regarding its determination to file a Notice of Intention to Make a
Proposal pursuant to the provisions of Part III of the Bankruptcy
and Insolvency Act and such other information as is publicly
available, and in accordance with Nasdaq listing rules, the
company's securities will be delisted from The Nasdaq Stock
Market.
Accordingly, unless the company requests an appeal of this
determination, trading of the company's common stock will be
suspended at the opening of business on March 3, 2015, and a Form
25-NSE will be filed with the Securities and Exchange Commission,
which will remove the company's securities from listing and
registration on The Nasdaq Stock Market. The company does not
intend to appeal the determination.
Ivanhoe Energy -- http://www.ivanhoeenergy.com-- is an independent
international heavy-oil exploration and development company focused
on pursuing long-term growth using advanced technologies, including
its proprietary heavy-oil upgrading process (HTL(R)).
KIOR INC: April 3 Hearing on MDA's Bid to Sue KFT Trust
-------------------------------------------------------
The hearing to consider Mississippi Development Authority's motion
to sue KFT Trust will be continued on April 3, according to an
agreement approved on Feb. 18 by U.S. Bankruptcy Judge Christopher
Sontchi.
Meanwhile, the agency's bid to convert KiOR Inc.'s Chapter 11 case
into a Chapter 7 liquidation will be considered at a hearing on the
confirmation of KiOR's plan of reorganization.
A copy of the agreement is available without charge at
http://is.gd/RfFbeo
About Kior Inc.
KiOR, Inc., and wholly owned subsidiary KiOR Columbus, LLC, are
development stage, renewable fuels companies based in Pasadena,
Texas and Columbus, Mississippi, respectively. KiOR, Inc., was
founded in 2007 as a joint venture between Khosla Ventures, LLC,
and BIOeCon B.V. KiOR Inc.'s primary business is the development
and commercialization of a ground-breaking proprietary technology
designed to generate a renewable crude oil from non-food cellulosic
biomass.
KiOR, Inc. filed a Chapter 11 petition (Bankr. D. Del. Case No.
14-12514) on Nov. 9, 2014, in Delaware. Through the chapter 11
case, the Debtor intends to reorganize its business or sell
substantially all of its assets so that it can continue its core
research and development activities. KiOR Columbus did not seek
bankruptcy protection.
The Debtor disclosed $58.3 million in assets and $261 million in
liabilities as of June 30, 2014.
The Debtor is represented by Mark W. Wege, Esq., Edward L. Ripley,
Esq., and Eric M. English, Esq., at King & Spalding, LLP, in
Houston, Texas; and John Henry Knight, Esq., Michael Joseph
Merchant, Esq., and Amanda R. Steele, Esq., at Richards, Layton &
Finger, P.A., in Wilmington, Delaware. The Debtor's financial
advisor is Alvarez & Marsal. Guggenheim Securities, LLC, is the
Debtor's investment banker. Epiq Bankruptcy Solutions, LLC, is the
Debtor's claims and noticing agent.
Pasadena Investments, LLC, as administrative agent for a consortium
of lenders, committed to provide up to $15 million in postpetition
financing. The DIP Agent is represented by Thomas E. Patterson,
Esq., at Klee, Tuchin, Bogdanoff & Stern LLP, in Los Angeles,
California, and Michael R. Nestor, Esq., at Young Conaway Stargatt
& Taylor, LLP, in Wilmington, Delaware.
KOSMORS INC: Files for Chapter 11; Sec. 341(a) Meeting on March 16
------------------------------------------------------------------
Kosmors, Inc., filed for Chapter 11 bankruptcy protection (Bankr.
D. Md. Case No. 15-11908) on Feb. 11, 2015.
Charles C. Iweanoge, Esq., at The Iweanoges' Firm, P.C., serves as
the Company's bankruptcy counsel. Judge Wendelin I. Lipp presides
over the case.
Aaron Gregg at The Washington Post reports that the Company
estimated its assets at between $50,001 and $100,000 and
liabilities at up to $50,000. The report says that the Company's
largest unsecured creditor, Tomrus Management LLC, is owed at
32,088.
The Section 341(a) meeting of creditors will be held on March 16,
2015, at 3:00 p.m. at 341 meeting room 6th Floor at 6305 Ivy Ln.,
Greenbelt. Proofs of claim are due by June 15, 2015.
Kosmors, Inc., is headquartered in Brentwood, Maryland.
LEHMAN BROTHERS: LBI Trustee Files Preliminary Realization Report
-----------------------------------------------------------------
James W. Giddens, Trustee for the liquidation of Lehman Brothers
Inc. (LBI) under the Securities Investor Protection Act (SIPA) and
chair of the Hughes Hubbard and Reed Corporate Reorganization and
Bankruptcy Group, on Feb. 23 filed a Preliminary Realization Report
with the Bankruptcy Court that represents a milestone in
winding-down the estate and substantially concludes the Trustee's
SIPA-mandated investigative duties.
The report assesses what assets were available for customers and
creditors on September 19, 2008 (the Filing Date) versus the assets
realized by the Trustee during the course of the liquidation. The
report details the progress made in administering the LBI estate,
including paying customers in full and making substantial
distributions to general creditors. The report also explains why
allowed unsecured creditor claims exceed available assets and will
not be fully satisfied.
"This report signifies that winding-down the estate continues in
earnest and that the liquidation is at a point of substantial
completion," Mr. Giddens said. "Over the course of this
liquidation, we have pursued every legal avenue to recover assets
that we believe belong to the estate. While efforts continue to
marshal assets, unsecured losses have resulted from factors
specific to the historic failure of the Lehman enterprise and
Barclays' acquisition of some but not all parts of LBI's business
and select customer accounts."
By marshaling assets owed to the LBI estate through litigation,
settlements and a careful process of securities sales, the Trustee
has decreased the potential amount of unsecured losses. General
estate assets are at least $15.2 billion less than the assets
available as of the Filing Date, and, pending certain litigation
outcomes, the loss may increase.
The largest cause of existing and potential losses was the
emergency transaction with Barclays negotiated in the days and
hours before the liquidation whereby Barclays acquired a select
group of high-value brokerage accounts and certain parts of the LBI
business. Assets already paid to Barclays and additional assets
potentially owed have significantly diminished amounts available
for additional distributions to unsecured general creditors. In
addition to the Barclays transaction, two additional factors have
contributed to the unsecured losses:
On the Filing Date, LBI's valuation of assets exceeded their
realizable market position. These losses from book values were
exacerbated by forced liquidation of firm positions during the
historically turbulent market of late 2008 when counterparties
availed themselves of the Safe Harbor provisions of the Bankruptcy
Code.
Prior to bankruptcy, LBI was a hub among the 2,600 affiliates of
the worldwide Lehman enterprise. With nearly all affiliates in
bankruptcy or similar proceedings around the world, the realized
value of all investments in affiliates and affiliate receivables
became substantially less than book value. At the same time,
claims from affiliates, with both customer and general unsecured
status, have proven to be far in excess of the anticipated book
value as of the filing date.
As explained in the Report, the Trustee and his team have
reconciled 140,000 claims and administered more than $121.7 billion
dollars. Approximately $117 billion -- nearly all of the assets
administered -- have been or are in the process of being
distributed. Customer, secured, priority and administrative claims
have been 100 percent satisfied.
On February 19, 2015, the Bankruptcy Court approved a second
interim distribution of $2.2 billion to unsecured general creditors
that will bring total distributions to 27 percent for these
claimants. Together, the customer and general creditor
distributions represent the largest distributions across the
worldwide Lehman insolvency proceedings and far exceed the expected
recoveries at the outset of the liquidation.
"When this liquidation began, the possibility of a general estate
was in doubt, and the fact that general creditors now stand to
receive 27 percent of their allowed claims is a significant
achievement," added Mr. Giddens.
The results in this liquidation could not have been achieved
without the oversight of the Court, Judges Peck and Chapman, and
the Securities Investor Protection Corporation, as well as the
advice and support of the United States Securities and Exchange
Commission, the Federal Reserve Bank of New York, the Commodity
Futures Trading Commission, and the Financial Industry Regulatory
Authority.
Realization Reports are often published at the end of a
liquidation. With substantial progress in winding-down the estate,
the Trustee determined a report at this time would be informative
to the Court, creditors, regulators and policy makers.
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 Sept. 15, 2008
(Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition
disclosed 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.
Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC
sought for bankruptcy protection in December 2009.
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.
Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell,
Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as
counsel to the Official Committee of Unsecured Creditors. Houlihan
Lokey Howard & Zukin Capital, Inc., is the Committee's investment
banker.
On Sept. 19, 2008, the Honorable Gerard E. Lynch 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 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.
Lehman emerged from bankruptcy protection on March 6, 2012, more
than three years after it filed the largest bankruptcy in U.S.
history. The Chapter 11 plan for the Lehman companies other than
the broker was confirmed in December 2011.
As of Oct. 2, 2014, Lehman's total distributions to unsecured
creditors have amounted to $92.0 billion. As of Sept. 30, 2014,
the brokerage trustee has substantially completed customer claims
distributions, distributing more than $106 billion to 111,000
customers.
Lewis Titterton Reports 6.5% Stake as of Feb. 18
------------------------------------------------
Lewis H. Titterton Jr. disclosed in a Schedule 13D filed with the
Securities and Exchange Commission that as of Feb. 18, 2015, he
beneficially owned 14,537,365 shares of common stock of
ITUS Corporation, which represents 6.5 percent of the shares
outstanding. A copy of the regulatory filing is available for free
at http://is.gd/befKZb
About ITUS Corporation
ITUS Corp. -- http://www.ITUScorp.com/-- develops and acquires
patented technologies for the purposes of patent monetization and
patent assertion. The company currently has 10 patent portfolios
in the areas of Key Based Web Conferencing Encryption, Encrypted
Cellular Communications, E-Paper(R) Electrophoretic Display, Nano
Field Emission Display ("nFED"), Micro Electro Mechanical Systems
Display ("MEMS"), Loyalty Conversion Systems, J-Channel Window
Frame Construction, VPN Multicast Communications, Internet
Telephonic Gateway, and Enhanced Auction Technologies.
CopyTele changed its name to "ITUS Corporation" on Sept. 2, 2014,
to reflect the Company's change in its business operations.
Itus Corporation reported a net loss of $9.60 million on $3.66
million of total revenue for the year ended Oct. 31, 2014, compared
to a net loss of $10.08 million on $389,0000 of total revenue for
the year ended Oct. 31, 2013. The Company also reported a net loss
of $4.25 million for the year ended Oct. 31, 2012, and a net loss
of $7.37 million for the year ended Oct. 31, 2011.
As of Oct. 31, 2014, the Company had $9.05 million in total assets,
$5.04 million in total liabilities and $4 million in total
shareholders' equity.
LIBERTY TIRE: S&P Lowers CCR to 'CC' on Restructuring
-----------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Pittsburgh-based Liberty Tire Recycling Holdco LLC to
'CC' from 'CCC-'. The ratings remain on CreditWatch, where S&P
placed them with negative implications on Jan. 8, 2015.
S&P also lowered its issue-level rating on the company's $225
million senior unsecured notes due 2016 to 'CC'; the rating remains
on CreditWatch with negative implications. The '4' recovery rating
on this debt, indicating S&P's expectation of average (30% to 50%)
recovery in the event of default, is unchanged.
"The downgrade reflects our view that Liberty's announcement of a
financial restructuring agreement among its financial sponsor,
bondholders, and banks will likely result in a distressed exchange
of the company's senior unsecured notes," Said Standard & Poor's
credit analyst James Siahaan. Under S&P's criteria, it considers
an exchange offer as distressed, or tantamount to default, if (1)
the offer, in S&P's view, implies the investor will receive less
value than the promise of the original securities and (2) the
offer, in S&P's view, is distressed rather than purely
opportunistic. S&P would value an offer at less than the original
promise if the amount offered is less than the original par amount,
the interest rate is lower than the original yield, or if the new
securities' maturities extend beyond the original, among other
factors, without offsetting compensation.
S&P expects the financial restructuring, which is subject to a
number of terms and conditions, to be completed within the next few
weeks. S&P notes that the proposed restructuring agreement, if
completed, will reduce the company's interest burden and will
likely provide the company with additional liquidity for capital
investments and growth.
"Our ratings on Liberty incorporate our assessment of the company's
"vulnerable" business risk profile, reflecting Liberty's exposure
to economic cycles, its limited scope of operations, and
competitive pressures in the tire collection market stemming from
industry overcapacity and stagnation in vehicle-miles driven during
the past few years. Our "highly leveraged" financial risk
assessment reflects the company's high adjusted debt balance
relative to its cash flow, as indicated by an adjusted debt to
EBITDA ratio of 9.5x at Sept. 30, 2014. Our ratings also
incorporate our application of our 'CCC' criteria in light of what
we view as the company's unsustainable leverage and its proposed
financial restructuring," S&P said.
The negative CreditWatch listing reflects S&P's view that Liberty
is likely to undergo a distressed exchange of its senior unsecured
notes within the next three months, as the company has announced
that it has received agreement from certain constituents to a
financial restructuring plan.
If such an exchange is completed, S&P would downgrade Liberty to
'SD' and lower the rating on the senior unsecured notes to 'D'.
LIFE PARTNERS: Notes of Risks on Appointment of Trustee
-------------------------------------------------------
Life Partners Holdings Inc. disclosed that on Feb. 12, 2015, the
Official Committee of Unsecured Creditors in the Company's
bankruptcy case called a witness who has served as a receiver in
several cases for the Securities and Exchange Commission, including
for companies involved in the life settlement business. As a
result of his testimony, the Company determined that it was
appropriate to communicate to its shareholders and the purchasers
of life settlements of certain risks they face in the event of the
appointment of a trustee and the potential liquidation of the
Company, including but not limited to the risks that:
-- the trustee may assert the Company's ownership over the life
settlements purchased on behalf of third party purchasers;
-- the trustee may request that the bankruptcy court pool the
life settlements and strip all beneficial interests of the
purchasers from any singular policy in which they intended to
invest;
-- if pooled, those interests would be treated as assets of the
Company and the expenses of maintaining those policies could become
the responsibility of the Company or the interests could lapse;
-- the purchasers who intended to buy interests in selected
policies would be pooled together with all of the other purchasers
and only be entitled to their respective pro rata share of the
ultimate recovered funds from all of the policies, based on the
amount invested by each purchaser as approved by the trustee;
-- the pooling of the interests in the life insurance policies
may be done for the purpose, among other things, of obtaining debt
financing secured by those interests;
-- the trustee may conduct a bulk sale of the interests, which
would likely be sold at a substantial discount; and the trustee may
liquidate the Company.
As a result, the purchasers of life settlements may see their
investments significantly diminished, and holders of the Company's
common stock may see the value of their shares of the Company's
common stock significantly diminished or even completely lost.
The Company filed a Current Report on Form 8-K with the Securities
and Exchange Commission describing these risks in more detail on
February 23, 2015.
Headquartered in Waco, Texas, Life Partners Holdings, Inc. --
http://www.lphi.com/-- is a financial services company engaged in
the secondary market for life insurance known as life settlements.
Life Partners Holdings, Inc., sought protection under Chapter 11 of
the Bankruptcy Code on Jan. 20, 2015 (Bankr. N.D. Tex., Case No.
15-40289). The case is assigned to Judge Russell F. Nelms.
The U.S. Trustee for Region 6 appointed three creditors of Life
Partners Holdings, Inc. to serve on the official committee of
unsecured creditors. Tracy A. Bolt of BDO USA, LLP, was named as
examiner for the Debtor's case.
LONGVIEW POWER: Plan Confirmation Hearing to Begin March 16
-----------------------------------------------------------
Judge Brendan Linehan Shannon of the U.S. Bankruptcy Court for the
District of Delaware on Feb. 18, 2015, approved the disclosure
statement explaining Longview Power's plan and scheduled a hearing
to consider confirmation of the plan to begin on March 16, 2015, at
11:00 a.m. (prevailing Eastern Time).
Objections to the Second Amended Plan, if any, must be submitted on
or before March 9, 2015. The deadline by which ballots must be
received by the claims agent is March 9. The deadline for
submission of the Certification of Votes will be March 12.
Prior to the approval of the Disclosure Statement, the Debtors
submitted a supplement to include an updated liquidation analysis
and updated financial projections. A full-text copy of the
Disclosure Statement dated Feb. 18, 2015, is available at
http://bankrupt.com/misc/LONGVIEWds0218.pdf
Kvaerner North American Construction Inc., one of the contractors
of the Debtors, asserted that the Second Amended Plan needs to be
amended to provide for the continuation of the indemnification
obligations under the Affidavit of Loss and Indemnity through the
Debtors' reorganization. Kvaerner says it is discussing with the
Debtors the Affidavit of Loss and Indemnity and the required
survival through the Debtors' reorganization. Kvaerner said it
anticipates the issue being consensually resolved prior to or at
confirmation.
The Plan incorporates the settlement among the Debtors, First
American Title Insurance Company, and their contractors Amec Foster
Wheeler North America, Kvaerner, and Siemens Energy, Inc.
Under the settlement, First American will deliver $41 million to an
escrow agent, Longview will deliver $2 million to the escrow agent,
and Siemens will deliver $12.5 million to the escrow agent. The
settlement also provides that the escrow agent will deliver $48
million to Kvaerner and $7.5 million to Foster Wheeler.
The settlement will end litigation between Longview and insurer
First American over the payout of a policy covering the builders'
senior claims. There was an impending trial on whether an
$825 million policy issued by First American is property of
Longview's bankrupt estate and whether this policy can be used to
pay claims of contractors.
Under the Second Amended Plan, general unsecured claims (Class 7)
are impaired and are entitled to vote. If Class 7 votes to accept
the Plan, holders will receive cash in an amount equal to the
lesser of (x) their pro rata share of the unsecured creditor cash
pool or (y) 22.07% of their allowed general unsecured claim. If
Class 7 votes to reject the Plan, they will receive cash in an
amount equal to the lesser of (x) their pro rata share of the
unsecured rejecting creditor cash pool or (y) 5.52% of their
allowed general unsecured claim.
About Longview Power
Longview Power LLC is a special purpose entity created to
construct, own, and operate a 695 MW supercritical pulverized
coal-fired power plant located in Maidsville, West Virginia, just
south of the Pennsylvania border and approximately 70 miles south
of Pittsburgh. The project is owned 92% by First Reserve
Corporation (First Reserve or sponsor), a private equity firm
specializing in energy industry investments, through its affiliate
GenPower Holdings (Delaware), L.P., and 8% by minority interests.
Longview Power, LLC, sought Chapter 11 protection (Bank. D. Del.
Lead Case 13-12211) on Aug. 30, 2013. The petitions were signed by
Jeffery L. Keffer, the Company's chief executive officer,
president, treasurer and secretary. The Debtor estimated assets
and debts of more than $1 billion. Judge Brendan Linehan Shannon
presides over the case. Kirkland & Ellis LLP and Richards, Layton
& Finger, P.A., serve as the Debtors' counsel. Lazard Freres &
Company LLC acts as the Debtors' investment bankers. Alvarez &
Marsal North America, LLC, is the Debtors' restructuring advisors.
Ernst & Young serves as the Debtors' accountants. The Debtors'
claims agent is Donlin, Recano & Co. Inc.
The Debtor disclosed assets of $1.72 billion plus undisclosed
amounts and liabilities of $1.08 billion plus undisclosed amounts.
A committee of unsecured creditors has not been appointed in the
case due to insufficient response to the U.S. Trustee's
communication/contact for service on the committee.
LONGVIEW POWER: Plant to Get Emission-Control Upgrades
------------------------------------------------------
Bill Rochelle and Sherri Toub, bankruptcy columnists for Bloomberg
News, reported that Longview Power LLC negotiated two deals to
repair and upgrade emission-control systems as the power-plant and
coal-mine operator nears a confirmation hearing on March 13 for its
revised Chapter 11 reorganization plan.
According to the report, if the bankruptcy judge in Delaware
approves, Longview will pay $22 million for Southern Environmental
Inc. to upgrade the pulse jet fabric filter. One of the settlement
also provides that Longview will buy a replacement catalyst from
Haldor Topsoe Inc. for an undisclosed price, the report said.
Longview agreed to pay Foster Wheeler North America Corp., now
known as Amec Foster Wheeler North America Corp., about $1.1
million plus one-half of Foster Wheeler's costs for installation,
the report added.
About Longview Power
Longview Power LLC is a special purpose entity created to
construct, own, and operate a 695 MW supercritical pulverized
coal-fired power plant located in Maidsville, West Virginia, just
south of the Pennsylvania border and approximately 70 miles south
of Pittsburgh. The project is owned 92% by First Reserve
Corporation (First Reserve or sponsor), a private equity firm
specializing in energy industry investments, through its affiliate
GenPower Holdings (Delaware), L.P., and 8% by minority interests.
Longview Power, LLC, filed a Chapter 11 (Bank. D. Del. Lead Case
13-12211) on Aug. 30, 2013. The petitions were signed by Jeffery
L. Keffer, the Company's chief executive officer, president,
treasurer and secretary. The Debtor estimated assets and debts of
more than $1 billion. Judge Brendan Linehan Shannon presides over
the case. Kirkland & Ellis LLP and Richards, Layton & Finger,
P.A., serve as the Debtors' counsel. Lazard Freres & Company LLC
acts as the Debtors' investment bankers. Alvarez & Marsal North
America, LLC, is the Debtors' restructuring advisors. Ernst &
Young serves as the Debtors' accountants. The Debtors' claims
agent is Donlin, Recano & Co. Inc.
The Debtor disclosed assets of $1.72 billion plus undisclosed
amounts and liabilities of $1.08 billion plus undisclosed
amounts.
A committee of unsecured creditors has not been appointed in the
case due to insufficient response to the U.S. Trustee's
communication/contact for service on the committee.
MARCK PROPERTIES: Files for Ch 11; Sec. 341(a) Meeting on March 23
------------------------------------------------------------------
Aaron Gregg at The Washington Post reports that Marck Properties
Group LLP filed for Chapter 11 bankruptcy protection (Bankr. D. Ma.
Case No. 15-12020) on Feb. 13, 2015, estimating its assets at
between $1,000,001 and $10 million and liabilities at between
$500,001 and $1 million.
The Company is representing itself in the case, The Washington Post
states. Judge Wendelin I. Lipp presides over the case.
A Section 341(a) meeting of creditors will be held on March 23,
2015, at 9:00 a.m. at 341 meeting room 6th Floor at 6305 Ivy Ln.,
Greenbelt.
Proofs of claim are due by June 22, 2015.
Marck Properties Group LLP is headquartered in North Potomac,
Maryland.
MARIETTA AREA HEALTH: Fitch Rates $60MM Series 2015 Bonds 'BB'
--------------------------------------------------------------
Fitch Ratings has assigned a 'BB' rating to the following revenue
bonds issued on behalf of Marietta Area Health Care d/b/a Memorial
Health System, Ohio (the system) bonds:
-- $60,000,000 Southeastern Ohio Port Authority Hospital
facilities
improvement revenue bonds, (Memorial Health System Obligated
Group
Project) series 2015.
In addition, Fitch has assigned a 'BB' rating to the following
outstanding bonds:
-- $138,935,000 Southeastern Ohio Port Authority Hospital
facilities
revenue refunding and improvement bonds, (Memorial Health System
Obligated Group Project) series 2012.
The series 2015 bonds are expected to be issued as fixed rate debt.
Bond proceeds will be used for various capital projects at Selby
General Hospital (SGH) and Marietta Memorial Hospital's (MMH)
Belpre and Wayne Street locations; reimbursement of approximately
$11 million in prior capital expenditures; refinance a $4 million
note payable; fund a debt service reserve fund, and pay for certain
costs of issuance. The series 2015 bonds are expected to price the
week of March 9.
The Rating Outlook is Stable.
SECURITY
The series 2012 and series 2015 bonds are secured by general
revenues of the obligated group, a mortgage on certain system
facilities and debt service reserve funds.
KEY RATING DRIVERS
STABLE, ADEQUATE OPERATING PROFITABILITY: Memorial Health System's
(MHS) operating performance has been stable and relatively
consistent over the last four years. In fiscal 2014, operating and
operating EBITDA margins were adequate for the rating at 0.5% and
8%, respectively. Operating performance is projected to improve
over the near term as a result of strategic investment in the West
Virginia service area, which Fitch thinks is reasonable. The
benefit of the system's expansion of services in Belpre has been
realized through the first quarter 2015 (quarter ended Dec. 31,
2014) with a 3.2% operating margin compared to the prior year
period's negative 4.7% operating margin.
WEAK AND VOLATILE LIQUIDITY: MHS's light liquidity is a primary
credit concern. At fiscal year-end 2014, MHS had $69.1 million in
unrestricted cash and investments, equaling 80 days cash on hand
(DCOH) and 45.5% cash to debt as compared to Fitch's non-investment
grade (non-IG) medians of 74.8 days and 55.7%. However, MHS's
liquidity position fluctuates significantly throughout the year and
at Dec. 31, 2014 (three-month interim), unrestricted cash and
investments had dropped to $36.8 million, equating to a very light
43.5 days cash on hand, reflecting MHS's unconventional cash
management practices.
DOMINANT MARKET SHARE: The system has strong market share in its
primary service area (PSA), with 65.5% of patient discharges in the
PSA in 2013 compared to the nearest competitor at 12.7%.
SIGNIFICANT DEBT BURDEN: Pro forma debt to capitalization and pro
forma maximum annual debt service (MADS) as a percent of total
revenues at fiscal year end (FYE) 2014 are both above the non-IG
medians at 65% and 4.5%, respectively. However, historical coverage
of pro forma MADS by EBITDA of 2.0x and 1.9x in fiscal 2014 and
2013, respectively, compares favorably to the non-IG median of
1.8x.
STRATEGIC INITIATIVES UNDERWAY: Fitch views the system's physician
alignment efforts and the expansion into the West Virginia market
towards Parkersburg favorably.
RATING SENSITIVITIES
LIQUIDITY POSITION: As part of the series 2015 financing, MHS will
put $11 million back on the balance sheet for prior capital
expenditures, which should help stabilize the cash position.
Further growth in liquidity combined with greater
quarter-over-quarter stability in its liquidity position could move
the rating higher.
CREDIT PROFILE
Marietta Area Health Care, Inc. (d/b/a Memorial Health System)
operates the 199-bed Marietta Memorial Hospital (MMH) and a 25-bed
critical access hospital, Selby General Hospital (SGH), as well as
a continuing care retirement community and nursing home, which will
be divested in fiscal 2015, nine outpatient care centers and 26
medical staff offices and clinical care delivery locations. MHS
reported $335.2 million in total revenues in fiscal 2014 (Sept. 30
year-end).
Located in Marietta, OH, the system delivers services primarily in
Washington County (OH) and Wood County (WV). The obligated group
includes employed physicians and the foundation and accounted for
99% of the total net revenues of the system and 99.8% of the total
assets of the system.
STABLE, ADEQUATE OPERATING PROFITABILITY
MHS's operating performance has been stable and relatively
consistent over the last four years. In fiscal 2014, operating
EBITDA margin of 8% compares favorably to 7.3% for non-IG medians
and operating margin was adequate for the rating at 0.5%, comparing
favorably to Fitch's non-IG median of negative 1.4%. Management has
been able to maintain at least break-even results since 2011
despite flat inpatient volumes and observation case growth.
Performance in the first quarter of fiscal 2015 has been
significantly stronger, with a 3.2% operating margin through Dec.
31, 2014. Quarterly results are favorable to prior year's negative
4.7% operating margin for the same period. Improvement was driven
by the system's free-standing emergency department on its Belpre
campus, which opened in August 2014 across Ohio River from
Parkersburg, West Virginia's third most populous city. Net patient
revenue was up 24.7% for the interim period. Fitch believes that
additional efficiency efforts in the system, including more
flexible staffing levels to meet daily patient volume, have
augmented year-over-year performance.
WEAK AND FLUCTUATING LIQUIDITY
MHS's liquidity position is light with considerable fluctuation in
the level of cash and investment throughout the year, which is a
primary credit concern. At year-end 2014, MHS had $69.1 million in
unrestricted cash and investments, equaling 80 DCOH, 45.5% cash to
debt and 4.6x cushion ratio, against Fitch's non-IG medians of 74.8
days, 55.7% and 5.3x, respectively. Fitch notes that under current
vendors terms accounts payable (AP) is extendable up to 90 days at
Sept. 30 and March 31, which bolsters liquidity at year end.
Liquidity was weaker at Dec. 31 (three-month interim) at 43.5 days,
when AP terms are 30 days and management often pays within 15
days.
As part of the series 2015 financing, MHS will reimburse itself $11
million for prior capital expenditures. The system is budgeting to
finish fiscal 2015 with approximately $103 million of unrestricted
cash and investments, equating to 113 DCOH. This liquidity growth
is expected to be achieved through improved revenue cycle,
participation in the 340B program, (effective Jan. 1, 2015), the
sale of the two senior living facilities and positive 2015
performance. While Fitch believes the growth in liquidity is
possible, it seems somewhat aggressive in light of historical
results.
ACCRETIVE STRATEGIC GROWTH INITATIVES
Fitch believes that the system's recent and forward strategic
initiatives are accretive and support the 'BB' rating. Strategic
initiatives include ongoing physician recruitment, the addition of
two operating rooms at SGH, and the Belpre campus and free-standing
emergency department, which has boosted revenue to-date and is
capturing some of the West Virginia market. The system has
projected 9% net patient revenue growth in 2015 and 3.5% operating
margin for 2015, which Fitch believes is realizable given strong
first quarter performance.
DOMINANT MARKET POSITION
The system had a dominant inpatient market share of 65.5% in its
PSA in 2013 with its nearest competitor at 12.7%. The system's
service area is concentrated in four counties in southeast Ohio and
Wood County, West Virginia. The system is expanding into Wood
County, West Virginia, where it reported a 10.4% market share in
2012 (the most recent information available), and increase from 7%
in 2010.
The system has an unfavorable payor mix with 65.3% of gross
revenues attributable to governmental payors. However, the
expansion of Medicaid eligibility in both Ohio and West Virginia is
a positive credit development. Further, Selby's cost-plus
reimbursement as a CAH helps mitigate concerns about the system's
payor mix.
SIGNIFICANT DEBT BURDEN
The system is highly leveraged, with a 65% pro forma
debt-to-capitalization ratio at FYE 2014, comparing unfavorably
with Fitch's 52.7% non-IG median. Pro forma MADS of $15.2 million
is a high 4.5% of fiscal 2014 revenue and includes approximately
$1.8 million in capital lease payments. Pro forma MADS occurs in
2017. Assuming no significant additional capital leases in the near
term, MADS will decline to $13.8 million in 2019 and $13.4 million
in 2020. Operating profitability is solid and coverage of pro forma
MADS by operating EBITDA was consistent at 1.8x and 1.7x in fiscal
2014 and 2013, respectively. Through the first quarter interim
period coverage by operating EBITDA improved to 2.5x. Fitch
believes that MHS has no room for additional debt after this
issuance at the current rating level.
DEBT PROFILE
Subsequent to the series 2015 bond issuance, the system will have
approximately $198.9 million of total debt outstanding. Total debt
includes approximately $138.9 million fixed rate series 2012 bonds
and the $60 million fixed rate series 2015 bonds. Fitch views the
debt profile as conservative, with all fixed rate debt and no
derivatives.
STRATEGIC DIVESTMENTS
The system is in the process of divesting its continuing care
retirement community and nursing home to focus on its long term
strategy, which Fitch views favorably. $14 million of proceeds from
the sale has been built into management's 2015 budget and forecast.
The two entities have recently been removed from the obligated
group. The buyer is in the due diligence phase and the system
expects closing by the end of May 2015, which will have minimal
impact on overall financial profile of the system.
DISCLOSURE
The system covenants to report on its quarterly results within 60
days and year end results, capital ratios, and coverage
calculations within 150 days. Further, the system covenants to
report in its DCOH covenant calculation within 30 days of each
semiannual calculation date.
MARKWEST ENERGY: S&P Affirms 'BB' CCR; Outlook Stable
-----------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB' corporate
credit rating on MarkWest Energy Partners L.P. The outlook is
stable.
S&P revised the partnership's business risk profile to
"satisfactory" from "fair" and the financial risk profile to
"aggressive" from "significant".
The revision in the financial risk profile reflects S&P's recently
lowered commodity price forecasts and its expectation of a
continued weakness in natural gas liquids (NGL) prices, which will
pressure EBITDA and financial leverage. S&P expects financial
measures to remain above 4x over the next two years.
The "satisfactory" business risk profile reflects the partnership's
strong competitive position in the Marcellus and Utica shale
regions, a solid footprint in the liquids-rich MidContinent region,
increasing scale and geographic diversity, and growing fee-based
cash flow. In S&P's opinion, the partnership's growth over the
past 12 months, specifically in the Marcellus and the Utica regions
strengthens its competitive position in the Northeast. A large
driver for that growth has been the partnership's elevated capital
spending program. At the same time, S&P has noted an improvement
in the percentage of fee-based cash flows, with roughly 85% to 90%
of 2015 margin being fee-based (including hedges) as the
partnership continues to focus its spending on assets that produce
fee-based cash flows.
Despite the significant growth in scale over the past 12 months,
S&P believes the partnership is subject to volume and price risk.
Partly offsetting the NGL price risk is MarkWest's hedging program,
where it uses direct product hedges.
The "aggressive" financial risk profile reflects S&P's assumption
of adjusted debt to EBITDA of 4.75x to 5x for 2015, improving to
the low-4x range in 2016. Despite weaker commodity prices, S&P
expects the partnership to continue to have high levels of growth
capital spending, with more than $1 billion in negative free-cash
flow as it spends roughly $1.8 billion of capital in 2015. S&P's
forecast assumes crude oil at about $50 per barrel in 2015, rising
to about $60 per barrel in 2016. S&P forecasts the partnership
will have an approximate $2 billion discretionary cash flow deficit
in 2015 after capital spending and distributions. S&P would expect
the partnership to fund its capital spending program in a balanced
manner to manage its balance sheet appropriately. S&P also assumes
the partnership will have a distribution coverage ratio of about 1x
in 2015.
The stable outlook reflects S&P's view that MarkWest will have
sufficient liquidity to fund and successfully execute its growth
spending plans in 2015. Despite having total debt to EBITDA of
about 5x in 2015, S&P expects this number to improve to the low 4x
area in 2016.
MILESTONE SCIENTIFIC: Edward Zelnick Named to Board of Directors
----------------------------------------------------------------
Edward J. Zelnick, M.D., was appointed to the Board of Directors of
Milestone Scientific Inc. effective on Feb. 16, 2015. There is no
existing family relationship between Dr. Zelnick and any director
or executive officer of the Company, according to a document filed
with the Securities and Exchange Commission.
About Milestone Scientific
Livingston, N.J.-based Milestone Scientific Inc. is engaged in
pioneering proprietary, innovative, computer-controlled injection
technologies and solutions for the medical and dental markets.
Milestone Scientific reported net income of $1.46 million in 2013,
as compared with a net loss of $870,000 in 2012.
The Company's balance sheet at Sept. 30, 2014, showed $17.3 million
in total assets, $2 million in total liabilities, all current, and
$15.3 million in total stockholders' equity.
Baker Tilly Virchow Krause, LLP, in New York, issued "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
since inception, which raises substantial doubt about its ability
to continue as a going concern.
MOBIVITY HOLDINGS: Appoints Christopher Meinerz as CFO
------------------------------------------------------
The board of directors of Mobivity Holdings Corp. appointed
Christopher Meinerz to serve as chief financial officer of the
Company. In connection with the appointment, the Company entered
into an employment agreement dated Feb. 16, 2015 with Mr. Meinerz.
According to a document filed with the Securities and Exchnge
Commission, the Company has agreed to pay Mr. Meinerz an annual
base salary of $190,000, subject to annual review by the board.
Mr. Meinerz will be eligible for annual performance bonuses of up
to 25% of his base salary for meeting key performance requirements,
quotas, and assigned objectives determined annually by the board.
Also pursuant to his employment agreement with the Company, Mr.
Meinerz is eligible to participate in all benefits, plans, and
programs, including improvements or modifications of the same,
which are now, or may hereafter be, available to other executive
employees of Company. Mr. Meinerz's employment agreement contains
standard provisions concerning noncompetition, nondisclosure and
indemnification.
Pursuant to Mr. Meinerz's employment agreement, the Company has
granted Mr. Meinerz an option to purchase 300,000 shares of Company
common stock, over a five year period from the date of grant, at an
exercise price of $1.30 per share, representing the closing price
of the Company's common stock on Feb. 16, 2015. The options will
vest and first become exercisable at the rate of 1/48th per month
over a 48 month period commencing on the date of grant. Mr.
Meinerz's options shall otherwise be on terms and conditions
contained in the Company's current equity incentive plan.
In the event Mr. Meinerz's employment with the Company is
terminated by the Company without cause, the Company will pay Mr.
Meinerz, in addition to all other amounts then due and payable, six
additional monthly installments of his base salary.
Prior to joining the Company, Mr. Meinerz served as director, chief
financial officer, chief compliance officer, secretary and
treasurer of Spindle, Inc., a mobile marketing and payment
processing company based in Scottsdale, Arizona, from April 2014 to
February 2015. Mr. Meinerz will maintain his Director position
with Spindle, Inc going forward. Prior to his role with Spindle,
Inc., Mr. Meinerz served as chief cinancial officer and chief
compliance officer at Next Generation Insurance Group, a national
specialty insurance marketing firm located in Phoenix, Arizona,
from October 2011 to April 2014. Before his tenure at NGI, Mr.
Meinerz was executive vice president of finance and treasury for
DDi Corp., an Anaheim, California-based provider of circuit board
engineering and manufacturing services, from March 2010 to October
2011. In addition, Mr. Meinerz served as global vice president of
Finance for eTelecare of Scottsdale, Arizona, from January 2006 to
December 2009, where he successfully helped launch that company's
initial public offering in 2007. Mr. Meinerz is a graduate of the
University of Wisconsin with degrees in accounting and finance and
is a Certified Public Accountant. He began his career in public
accounting with BDO Seidman in Chicago, Illinois, and Grant
Thornton in Madison, Wisconsin.
About Mobivity Holdings
Mobivity Holdings Corp. was incorporated as Ares Ventures
Corporation in Nevada in 2008. On Nov. 2, 2010, the Company
acquired CommerceTel, Inc., which was wholly-owned by CommerceTel
Canada Corporation, in a reverse merger. Pursuant to the Merger,
all of the issued and outstanding shares of CommerceTel, Inc.,
common stock were converted, at an exchange ratio of 0.7268-for-1,
into an aggregate of 10,000,000 shares of the Company's common
stock, and CommerceTel, Inc., became a wholly owned subsidiary of
the Company. In connection with the Merger, the Company changed
its corporate name to CommerceTel Corporation on Oct. 5, 2010.
In connection with the Company's acquisition of assets from
Mobivity, LLC, the Company changed its corporate name to Mobivity
Holdings Corp. and its operating company to Mobivity, Inc, on
Aug. 23, 2012.
Mobivity Holdings reported a net loss of $16.8 million in 2013,
a net loss of $7.33 million in 2012 and a net loss of $16.3
million in 2011.
The Company's balance sheet at Sept. 30, 2014, showed $11.4
million in total assets, $3.35 million in total liabilities and
$8.07 million in total stockholders' equity.
MORGAN STANLEY EASTERN: Stockholders Approve Liquidation Plan
-------------------------------------------------------------
Morgan Stanley Eastern Europe Fund, Inc., on Feb. 23 disclosed that
its stockholders, at the Fund's Special Meeting of Stockholders
held on Feb. 23, 2015, approved the plan of liquidation and
dissolution recommended by the Board of Directors. In accordance
with the Plan, the Fund's investment adviser, Morgan Stanley
Investment Management Inc., will commence the orderly liquidation
of the Fund's assets. The Fund will make one or more liquidating
distributions to the Fund's stockholders, which will be paid in
cash.
It is currently anticipated that by the end of the first quarter of
2015 the liquidation will be completed and the Fund's shares of
common stock will cease to trade on the New York Stock Exchange.
The Fund is a closed-end, U.S.-registered management investment
company and seeks long-term capital appreciation through
investments primarily in equity securities of Eastern European
country issuers and in debt securities issued or guaranteed by
Eastern European country government or governmental entities.
Morgan Stanley Investment Management, together with its investment
advisory affiliates, has 585 investment professionals around the
world and $403 billion in assets under management or supervision as
of December 31, 2014. Morgan Stanley Investment Management strives
to provide outstanding long-term investment performance, service
and a comprehensive suite of investment management solutions to a
diverse client base, which includes governments, institutions,
corporations and individuals worldwide.
Morgan Stanley (NYSE:MS) -- http://www.morganstanley.com/-- is a
global financial services firm providing investment banking,
securities, investment management and wealth management services.
With offices in more than 43 countries, the Firm's employees serve
clients worldwide including corporations, governments, institutions
and individuals.
MUSCLEPHARM CORP: Issues 170,000 in Restricted Shares
-----------------------------------------------------
MusclePharm Corporation agreed to issue an aggregate of 170,000
shares of its restricted common stock, $0.001 par value per share
as partial consideration pursuant to that certain Termination and
Mutual Release Agreement entered into by and between the Company
and Worldwide Apparel, LLC, according to a Form 8-K report filed
with the U.S. Securities and Exchange Commission.
In exchange for the consideration, including the Common Stock,
Worldwide agreed to terminate the license agreement entered into by
and between the Company and Worldwide on March 28, 2014.
The Company is obligated to issue 127,500 shares of the Common
Stock to Worldwide within five business days of execution of the
Agreement, and shall issue 42,500 shares of the Common Stock to be
held in escrow by a third-party escrow agent, which shall be
released to Worldwide on the 91st day after the date those shares
are entered into escrow so long as no claim has been made with
respect a lien on certain inventories.
The Company issued the shares of common stock pursuant to the
Agreement in reliance on the exemption from registration under the
Securities Act set forth in Section 4(2) thereof and Rule 506 of
Regulation D.
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 $17.7 million in
2013, a net loss after taxes of $18.95 million in 2012, and a net
loss of $23.3 million in 2011.
Musclepharm's balance sheet at Sept. 30, 2014, showed $79.6
million in total assets, $41.5 million in total liabilities and
$38.08 million in total stockholders' equity.
MUSCLEPHARM CORP: Landes Reports 7.6% Stake as of Dec. 31
---------------------------------------------------------
Joshua Landes disclosed in an amended Schedule 13G filed with the
U.S. Securities and Exchange Commission that as of
Dec. 31, 2014, he beneficially owned 1,000,000 Shares of common
stock of Musclepharm Corp, which represents 7.6 percent of the
shares outstanding. Mr. Landes may be deemed to hold an indirect
beneficial interest in these shares, which are directly
beneficially owned by Wynnefield Partners Small Cap Value, L.P.,
Wynnefield Partners Small Cap Value, L.P. I and Wynnefield Small
Cap Value Offshore Fund, Ltd. because he is a co-managing member of
Wynnefield Capital Management, LLC and a principal executive
officer of Wynnefield Capital, Inc. A copy of the regulatory
filing is available for free at http://is.gd/iaZqga
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 $17.7 million in
2013, a net loss after taxes of $18.95 million in 2012, and a net
loss of $23.3 million in 2011.
Musclepharm's balance sheet at Sept. 30, 2014, showed $79.6
million in total assets, $41.5 million in total liabilities and
$38.08 million in total stockholders' equity.
NATIONAL MENTOR: Moody's B2 CFR Unaffected by $55MM Add-on Loan
---------------------------------------------------------------
Moody's Investors Service said that National MENTOR Holdings,
Inc.'s $55 million add-on to its senior secured term loan is
credit-positive, but does not currently impact the B2 Corporate
Family Rating, B1 rating for the senior secured credit facilities,
Caa1 rating for the company's senior unsecured notes, or stable
outlook.
The principal methodology used in these ratings was Global
Healthcare Service Providers 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.
Headquartered in Boston, MA, National Mentor Holdings, Inc.
(National Mentor), a wholly owned subsidiary of Civitas Solutions,
Inc., provides home and community-based health and human services
to (i) individuals with intellectual/developmental disabilities;
(ii) persons with acquired brain injury and other catastrophic
injuries and illness; and (iii) at-risk youth with emotional,
behavioral or medically complex needs and their families. Most of
the company's services involve residential support, typically in
small group homes, host homes, and small specialized community
facilities. Non-residential services consist primarily of day
programs and periodic services in various settings. For the twelve
months ended December 31, 2014, the company generated net revenue
of approximately $1.3 billion.
NET DATA CENTERS: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Net Data Centers, Inc.
898 Sepulveda Blvd
El Segundo, CA 90245
Case No.: 15-12690
Chapter 11 Petition Date: February 23, 2015
Court: United States Bankruptcy Court
Central District of California (Los Angeles)
Judge: Hon. Sheri Bluebond
Debtor's Counsel: William F Govier, Esq.
LESNICK PRINCE & PAPPAS LLP
315 W. 9th Street, Suite 705
Los Angeles, CA 90015
Tel: 213-493-6496
Fax: 213-493-6596
Email: wgovier@lesnickprince.com
Estimated Assets: $10 million to $50 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by Pervez P. Delawalla, president & CEO.
List of Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
DuPont Fabros Technology Unsecured Note $6,619,151
1212 New York Ave NW,
Suite 900
Washington, DC 20005
Wells Fargo - Garland Building Rent $2,560,238
C/O Charter Holdings. Inc.
Department 887995
Los Angeles, CA 90088-7995
c/o Dan Woods
Musick Peeler &
Garrett LLP
One Wilshire Blvd.,
Suite 2000
Los Angeles, CA 90017
Tel: 213-629-7622
Realty Associates Fund Rent $1,550,508
IX, L.P.
Po Box 848590
Davis Partners, LLC
Los Angeles, CA 90084
Digital 2260 East El Rent $979,434
Segundo, LLC
C/O Digital Realty Trust
2260 E El Segundo Blvd
Los Angeles, CA 90074-8056
Zayo Group LLC Trade Debt $556,924
Po Box 952136
Dallas, TX 75395
Whale Ventures, LLC Rent $551,281
1212 New York Ave NW,
Suite 900
Washington, DC 20005
GIP 7th Street, Inc. Rent $445,703
C/O Digital Realty Trust
2260 E El Segundo Blvd
Los Angeles, CA 90074-8056
Grizzly Ventures, LLC Rent $366,824
1212 New York Ave NW, Suite 900
Washington, DC 20005
Lemur Properties, LLC Rent $307,264
1212 New York Ave, Suite 900
Washington, DC 20005
Fox Properties, LLC Rent $114,347
TW Telecom Trade Debt $113,646
De Lage Landen Equipment Lease $87,489
Western Equipment Finance Equipment Lease $61,810
Stratacore, Inc. Trade Debt $60,104
Tel-X Los Angeles, LLC Trade Debt $57,299
Leaf Equipment Lease $55,993
Summit Funding Group Inc. Equipment Lease $52,450
DB Transit Consulting, LLC Trade Debt $46,843
Equinix, Inc. Trade Debt $36,118
Avant Communications, Inc. Trade Debt $34,950
NEXT 1 INTERACTIVE: Michael Craig Quits From Board
--------------------------------------------------
Michael Craig resigned from his position as a director of Next 1
Interactive, Inc., effective Feb. 17, 2015. The resignation did
not involve any disagreement with the Company, according to a
document filed with the Securities and Exchange Commission.
About Next 1 Interactive
Weston, Fla.-based Next 1 Interactive, Inc., is the parent company
of RRTV Network (formerly Resort & Residence TV), Next Trip -- its
travel division, and Next One Realty -- its real estate division.
The Company is positioning itself to emerge as a multi revenue
stream "Next Generation" media-company, representing the
convergence of TV, mobile devices and the Internet by providing
multiple platform dynamics for interactivity on TV, Video On
Demand (VOD) and web solutions. The Company has worked with
multiple distributors beta testing its platforms as part of its
roll out of TV programming and VOD Networks. The list of multi-
system operators the Company has worked with includes Comcast,
Cox, Time Warner and Direct TV. At present the Company operates
the Home Tour Network through its minority owned/joint venture
real estate partner -- RealBiz Media. As of July 17, 2012, the
Home Tour Network features over 4,300 home listings in four cities
on the Cox Communications network.
The Company incurred a net loss of $18.3 million on $1.56 million
of total revenues for the year ended Feb. 28, 2014, as compared
with a net loss of $4.23 million on $987,000 of total revenues for
the year ended Feb. 28, 2013.
As of Nov. 30, 2014, the Company had $3.91 million in total assets,
$13.8 million in total liabilities, and a $9.91 million total
stockholders' deficit.
D'Arelli Pruzansky, P.A., in Boca Raton, Florida, issued a "going
concern" qualification on the consolidated financial statements for
the year ended Feb. 28, 2014. The independent auditors noted that
the Company has incurred net losses of $18.3 million and net cash
used in operations of $4.59 million for the year ended Feb. 28,
2014, and the Company had an accumulated deficit of $87.6
million and a working capital deficit of $13.5 million at Feb. 28,
2014. These conditions raise substantial doubt about the Company's
ability to continue as a going concern.
Bankruptcy Warning
"If we continue to experience liquidity issues and are unable to
generate revenue, we may be unable to repay our outstanding debt
when due and may be forced to seek protection under the federal
bankruptcy laws," the Company said in its fiscal 2013 annual
report.
NIELSEN FINANCE: $650MM Notes Add-on No Impact on Moody's Ratings
-----------------------------------------------------------------
Moody's Investors Service said that the $650 million add on to the
B1 rated 5.0% Senior Notes due 2022 issued by Nielsen Finance LLC
and Nielsen Finance Co., indirect subsidiaries of Nielsen N.V.
("Nielsen"), has no immediate impact on debt ratings. Proceeds
from the new notes will be used for general corporate purposes
including share repurchases and repayment of revolver advances.
All ratings including the Ba3 Corporate Family Rating and Ba3-PD
Probability of Default Rating as well as the positive outlook are
unchanged.
Nielsen's Ba3 Corporate Family Rating reflects Moody's view that
the company will maintain its leading international positions in
the measurement and analysis of consumer purchasing behavior as
well as in providing media and marketing information given
protection from high entry barriers. Revenue is supported by
long-standing contractual relationships with consumer product
companies, media and advertisers, and benefits from the company's
status as a source of independent benchmark information. We expect
the company will build on its track record to deliver low-to-mid
single digit percentage revenue and EBITDA growth. Ratings
incorporate the challenging operating environment in Nielsen's
'Buy' division due to cyclical spending shifts by clients as well
as exposure, particularly in the 'Watch' division, to a more
competitive landscape in rapidly growing online markets. Risks
include the potential for new technologies to change consumer
buying habits and advertising/marketing delivery channels; however,
we believe Nielsen is positioned to respond to new media channels
by broadening its product and service offerings. Ratings reflect
the company's moderately high leverage and likely increases in
dividend payouts or share repurchases as earnings grow.
Furthermore, Nielsen's increase in quarterly dividends in 2014
(more than $370 million annual payout) and share repurchase
programs consumes cash that could otherwise be used to reduce debt
or fund acquisitions. The proposed increase in debt balances (net
of revolver paydowns) plus the increase in estimated unfunded
pension liabilities at year end 2014, due to lower discount rates
primarily in Europe, will elevate debt-to-EBITDA to roughly 4.5x
pro forma for the new notes (including Moody's standard
adjustments) compared to 4.7x in 2013, despite mid-single digit
percentage revenue growth and some EBITDA margin expansion.
Liquidity is strong with $273 million of balance sheet cash, low to
mid single digit percentage free cash flow-to-debt ratios,
effectively full availability under its $575 million revolver
facility pro forma for repayment with bond proceeds, and no
significant debt maturities until 2017.
The positive rating outlook reflects Moody's expectation that
Nielsen will deliver operating results in line with its recent
guidance for 2015 (4%-6% revenue growth and 29%-31% adjusted EBITDA
margins) and that shareholder distributions and acquisitions are
managed such that the company reduces leverage. Moody's assumes in
the rating outlook that the U.S. and global economies continue to
expand modestly. An upgrade would require steady and growing
earnings performance paired with de-leveraging such that
debt-to-EBITDA moves towards 4.0x and free cash flow generation is
meaningful on a sustained basis. Moody's would need to be
comfortable that Nielsen has the willingness and capacity to manage
to consistently improving credit metrics after incorporating
potential acquisitions or share repurchases. Nielsen would also
need to maintain at least good liquidity. Ratings could be
downgraded if debt-to-EBITDA were to exceed 5.0x (including Moody's
standard adjustments) or if free cash flow generation weakens
through deterioration in operating performance, acquisitions, or
shareholder distributions. The outlook could be changed to stable
if Nielsen adopts more aggressive financial policies including a
move away from its intention to reduce leverage. Additional debt
financed distributions or acquisitions could result in a change in
the outlook to stable given the extended time needed to restore
credit metrics, including leverage and free cash flow ratios, to
levels achieved as of Sep. 30, 2014 (4.2x debt-to-EBITDA including
Moody's standard adjustments). Deterioration in liquidity could
also create downward rating pressure.
Nielsen N.V., headquartered in Diemen, the Netherlands and New
York, NY, is a global provider of consumer information and
measurement that operates in approximately 100 countries.
Nielsen's Buy segment (roughly 56% of FY 2014 reported revenue)
consists of two operating units: (i) Information, which includes
retail measurement and consumer panel measurement services; and
(ii) Insights, which provides consumer intelligence and analytical
services for clients. The Watch segment (44% of reported revenue)
provides viewership and listenership data and analytics across
television, radio, online and mobile devices for the media and
advertising industries. A consortium of private equity firms owns
less than 15% of economic interest and voting control in Nielsen
with remaining shares being widely-held. Reported revenue for the
12 months ended Dec. 31, 2014 was $6.3 billion.
PARAMOUNT RESOURCES: Moody's Affirms 'B2' CFR, Outlook Positive
---------------------------------------------------------------
Moody's Investors Service affirmed Paramount Resources Ltd.'s B2
Corporate Family Rating, B2-PD Probability of Default Rating and B3
senior unsecured notes ratings. The SGL-3 Speculative Grade
Liquidity Rating remained unchanged. The outlook remains
positive.
"The affirmation reflects expected continued growth in production
and reserves, even in a challenging pricing environment," commented
Paresh Chari, Analyst. "Paramount's production and cash flow will
increase rapidly within the next few months once the delayed Keyera
de-ethanizer facility is operational."
Outlook Actions:
Issuer: Paramount Resources LTD
Outlook, Remains Positive
Affirmations:
Issuer: Paramount Resources LTD
Probability of Default Rating, Affirmed B2-PD
Corporate Family Rating (Foreign Currency), Affirmed B2
Senior Unsecured Regular Bond/Debenture (Local Currency)
Dec 4, 2019, Affirmed B3, LGD5
Senior Unsecured Regular Bond/Debenture (Local Currency)
Dec 13, 2017, Affirmed B3, LGD5
Senior Unsecured Shelf (Local Currency), Affirmed (P)B3
Paramount's B2 CFR is supported by liquids-rich production growth
expected as downstream facilities release production behind pipe in
mid-2015. The rating is further supported by the alternate
liquidity from publicly listed equity investments, the company's
willingness and ability to issue equity to support capital
investment, and significant insider ownership (about 50 percent).
The rating is constrained by the delay in getting downstream
facilities operational limiting production growth, and limited cash
flow and revolver availability to fund capital expenditures.
In accordance with Moody's Loss Given Default Methodology the
notching of the senior unsecured notes at B3, one notch below the
B2 CFR, reflects priority ranking debt in the form of the C$900
million secured revolving credit facility, and a one notch upward
override to the model given the positive outlook.
The SGL-3 Speculative Grade Liquidity Rating reflects adequate
liquidity through 2015. At Sep. 30, 2014, Paramount had C$528
million available, after C$57 million of letters of credit, under
the C$800 million Tranche A borrowing base portion of its C$900
million senior secured revolving credit facility. The revolver
terms out in November 2015 and matures one year later. We expect
Paramount to fund 2015 negative free cash flow of roughly C$250
million through the revolver. Paramount has the flexibility to
raise funds from asset sales or by selling shares from its equity
investments (market value of C$350 million) - sources of funds that
it has accessed in the past. Paramount has no upcoming maturities
until December 2017 when the C$370 million senior unsecured notes
are due.
The positive outlook reflects our expectation that production and
cash flow will increase significantly through 2015, considerably
improving leverage and margins.
The rating could be upgraded if retained cash flow to debt appears
likely to remain above 30% and E&P debt to production below
US$35,000/boe, while having sufficient cash flow and revolver
availability to fund 15 to 18 months of capex.
The rating could be downgraded if Paramount's production decreases
materially or if debt funded negative free cash flow leads to
retained cash flow to debt falling below 15% or E&P debt to
production increasing above US$50,000/boe.
Paramount is a Calgary, Alberta-based exploration and production
company with principal properties in Alberta, and about 32,000
barrels of oil equivalent (boe) per day of production (net of
royalties) in October 2014 and roughly 79 million boe of total
proved reserves.
The principal methodology used in these ratings was Global
Independent Exploration and Production Industry published in
December 2011. Other methodologies used include Loss Given Default
for Speculative-Grade Non-Financial Companies in the U.S., Canada
and EMEA published in June 2009.
PARK FLETCHER: Section 341(a) Meeting Scheduled for March 20
------------------------------------------------------------
A meeting of creditors in the bankruptcy case of Park Fletcher
Realty, LLC, will be held on March 20, 2015, at 10:00 a.m. EDT at
Rm 416C U.S. Courthouse, Indianapolis.
This is the first meeting of creditors required under Section
341(a) of the Bankruptcy Code in all bankruptcy cases.
All creditors are invited, but not required, to attend. This
meeting of creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Park Fletcher Realty, LLC filed a Chapter 11 bankruptcy petition
(Bank. S.D. Ind. Case No. 15-00843) on Feb. 15, 2015. The petition
was signed by Shawn Williams as managing member. KC Cohen, Esq.,
at KC Cohen, Lawyer, PC, serves as the Debtor's counsel. The
Debtors estimated assets and liabilities of $10 million to $50
million. Judge Jeffrey J. Graham presides over the case.
PRONERVE HOLDINGS: Case Summary & 30 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor affiliates filing separate Chapter 11 bankruptcy petitions:
Debtor Case No.
------ --------
ProNerve Holdings, LLC 15-10373
7600 E. Orchard Road 200N
Greenwood, CO 80111
ProNerve, LLC 15-10374
Colorado Intraoperative Monitoring, LLC 15-10375
Denver South Intraoperative Monitoring, LLC 15-10376
Eugene Intraoperative Monitoring, LLC 15-10377
ProNerve Technologies, LLC 15-10378
Riverside Intraoperative Monitoring, LLC 15-10379
Topeka Intraoperative Monitoring, LLC 15-10380
Boulder Intraoperative Monitoring, LLC 15-10381
Type of Business: Provides intraoperative neurophysiologic
monitoring services to health systems, acute
care hospitals, specialty hospitals, ambulatory
surgical centers, surgeons, and physician groups
in more than 25 states.
Chapter 11 Petition Date: February 24, 2015
Court: United States Bankruptcy Court
District of Delaware (Delaware)
Judge: Hon. Kevin J. Carey
Debtors' Timothy W. Walsh, Esq.
General Darren Azman, Esq.
Bankruptcy MCDERMOTT WILL & EMERY LLP
Counsel: 340 Madison Avenue
New York, New York 10173-1922
Tel: (212) 547-5400
Fax: (212) 547-5444
Emails: twwalsh@mwe.com
dazman@mwe.com
Debtors' Donald J. Detweiler, Esq.
Local John H. Schanne II, Esq.
Delaware PEPPER HAMILTON LLP
Counsel: Hercules Plaza Suite 5100
1313 Market Street
P.O. Box 1709
Wilmington, DE 19899-1709
Tel: 302-777-6524
Fax: 302-421-8390
Emails: detweilerd@pepperlaw.com
schannej@pepperlaw.com
Debtors' THE GARDEN CITY GROUP LLC
Claims and
Notice Agent:
Estimated Assets: $10 million to $50 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by George D. Pillari, chief executive
officer.
List of Debtor's 30 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Northwest Neurodiagnostics Acquisition $1,000,000
Inc. Earnout
Attn: Sean Anderson
26603 SE 16th Court
Sammamish, WA 98075
PhysIOM Group, LLC Acquisition $263,165
Attn: Richard Flores Earnout
3284 Northside Parkway
Suite 600
Atlanta, GA
Broncor, Inc. Acquisition $224,430
Earnout
Advanced Reimbursement Trade $111,500
Management, LLC
True Partners Consulting LLC Professional $100,233
Services
Ernst & Young LLP Professional $95,000
Services
Max Neuro Supply Inc. Trade $80,946
Cardinal Peak Trade $59,629
Cadwell Laboratories, Inc. Trade $49,263
DeuroDiagnostic Solutions, Inc. Trade $48,000
The Lowenbaum Partnership Professional $42,861
LLC Services
U.S. Monitoring, LLC Trade $36,474
3T Systems Trade $36,133
Wheeler Trigg O'Donnell, LLP Professional $33,804
Services
CliftonLarson Allen LLP Professional $30,510
Services
Computer Technology Trade $30,378
Corporation
Medtronic USA Trade $26,870
Office Team Professional $26,595
Services
Hosting.com Trade $26,176
Sean M. Pughes Trade $24,576
Orchard & Greenwood LLC Trade $21,556
MGMT 3D Trade $18,150
Federal Express Trade $14,125
Rhythmlink International LLC Trade $12,728
Littler Mendelson P.C. Professional $12,145
Services
Pengea Performance Trade $12,000
Consulting Group, Inc.
Douglas Seeley Employee $11,279
Severance
Anton Collins Michell LLP Professional $11,156
Services
Amer NeuroMonitoring Assc. Professional $10,000
Services
S & S Billing Services, Inc. Trade $9,078
PRONERVE: Files Chapter 11 Bankruptcy Petition to Facilitate Sale
-----------------------------------------------------------------
SpecialtyCare, a provider of outsourced operating room clinical
services, and ProNerve, an intraoperative neuromonitoring (IONM)
company, on Feb. 24 disclosed that SpecialtyCare has signed an
asset purchase agreement to acquire ProNerve. Upon completion of
the transaction, ProNerve's nearly 200 associates and almost 350
customers in 31 states will become part of SpecialtyCare. This
transaction will significantly extend SpecialtyCare's capacity to
improve the delivery of healthcare, most particularly as it relates
to ensuring patient health and safety during surgeries in which
neural integrity is often at risk.
The acquisition positions SpecialtyCare as the clear market leader
in the IONM space and provides the Company with an expanded
geographic footprint. ProNerve's strong presence in the Pacific
Northwest, the Mountain States, and the Midwest will enable
SpecialtyCare to increase its annual IONM service activity to more
than 67,000 procedures in 42 states.
Melvin F. Hall, PhD, SpecialtyCare's Chief Executive Officer,
commented, "SpecialtyCare demonstrates and delivers clinical
excellence through its constant focus on improving the delivery of
healthcare. By providing the highest level of care, quality, and
patient safety in an efficient and cost-effective manner, we act as
a vital partner to our customers as they navigate the financial and
operational complexities present in the healthcare industry today.
The acquisition of ProNerve will further extend our capacity to
help hospitals address these challenges while simultaneously
optimizing and improving patient outcomes.
"At SpecialtyCare, our associates are our best assets and the
lifeblood of our business," concluded Dr. Hall. "The same is true
of ProNerve, and we are delighted to welcome this team of skilled
clinicians and professionals on board. Together, we will ensure
the health and safety of the patients we serve and also advance the
art and science of IONM through education and innovation."
The transaction is expected to be completed by April 2015. To
facilitate the sale, ProNerve and its affiliates commenced
voluntary chapter 11 bankruptcy cases on February 24, 2015.
SpecialtyCare will acquire substantially all of ProNerve's assets
pursuant to section 363 of the Bankruptcy Code, subject to
customary closing conditions, including Bankruptcy Court approval.
The agreement affirms SpecialtyCare's commitment to the ProNerve
team and its customers, who will continue to receive uninterrupted
service and care through the continuity and integration plan that
is being executed ahead of the completion of the transaction. The
ProNerve team will begin operating under the SpecialtyCare name
once the acquisition has been finalized.
About ProNerve
Headquartered in Broomfield, Colorado, ProNerve --
http://www.pronerve.com/-- is a provider of intraoperative
neuromonitoring ("IONM") services in the U.S. IONM involves the
use of a variety of electro-physiological monitoring procedures
during surgery to allow early warning and avoidance of injury to
nervous systems structures. ProNerve provides real-time onsite
technologists combined with remote physician oversight to deliver a
comprehensive IONM solution to acute care hospitals, specialty
hospitals and ambulatory surgery centers.
QUANTUM FUEL: Capital Ventures Reports 9.9% Stake as of Feb. 12
---------------------------------------------------------------
Capital Ventures International and Heights Capital Management, Inc.
disclosed in a Schedule 13G filed with the U.S. Securities and
Exchange Commission that as of Feb. 12, 2015, they beneficially
owned 2,827,551 shares of common stock of
Quantum Fuel Systems Technologies Worldwide, Inc., which represents
9.9 percent of the shares outstanding. The Company's Prospectus
Supplement filed on Feb. 12, 2015, indicates there were 27,876,264
Shares outstanding as of the completion of the offering of the
Shares to the Reporting Persons, including the exercise of the
over-allotment option in connection therewith. A copy of the
regulatory filing is available at http://is.gd/CMKCz6
About Quantum Fuel
Lake Forest, Cal.-based Quantum Fuel Systems Technologies
Worldwide, Inc. (Nasdaq: QTWW) develops and produces advanced
vehicle propulsion systems, fuel storage technologies, and
alternative fuel vehicles. Quantum's portfolio of technologies
includes electronic and software controls, hybrid electric drive
systems, natural gas and hydrogen storage and metering systems and
other alternative fuel technologies and solutions that enable fuel
efficient, low emission, natural gas, hybrid, plug-in hybrid
electric and fuel cell vehicles.
Quantum Fuel reported a net loss attributable to stockholders of
$23.04 million in 2013, a net loss attributable to stockholders of
$30.9 million in 2012 and a net loss attributable to common
stockholders of $38.5 million in 2011.
QUIZNOS: Franchisee Group Optimistic About Co. After Bankruptcy
---------------------------------------------------------------
Blue Maumau reports that the Quiznos Franchisee Association is
expressing its optimism on how the Company is moving forward after
Chapter 11 bankruptcy.
Blue Maumau recalls that the Association commenced as a result of
the 2010 settlement of four franchisee class action lawsuits.
According to the report, the Company had forced the franchisees to
pay high kickbacks on food and other products.
Blue Maumau relates that the Company reaffirmed in January 2015 its
commitment to support its franchise owners and turning the brand
around. The report adds that the franchisees were told that
corporate staff had been cut dramatically, and that the Company had
appointed a new CEO, Doug Pendergrast.
The Company, after emerging from Chapter 11 bankruptcy protection,
started work on a replacement supply chain model whereby the
various Distribution Companies would buy directly from suppliers
that the Company approved, Blue Maumau says. According to the
report, transition to the new supply chain model began in December
2014 and consequently, franchise owners are now seeing significant
savings as the old "AFD" priced goods are depleted. The report
states that the Association is optimistic that the savings will
dramatically boost franchisees' profitability, which will further
motivate owners to concentrate more on improving store operations
and investing in local store marketing.
About Quiznos
Denver-based Quiznos -- http://www.quiznos.com/-- is a chain
designed for today's busy consumers who are looking for a high
quality, tasty, freshly prepared alternative to traditional fast-
food restaurants. With locations in 50 states and 30 countries,
Quiznos is one of the world's premier quick-service restaurant
chains and pioneer of the toasted sandwich; Quiznos restaurants
offer creative, chef-created sandwiches and salads using premium
ingredients. Quiznos was founded in 1981 by chefs who discovered
that toasting brought out the best in every sandwich ingredient.
QCE Finance LLC and its affiliates sought protection under Chapter
11 of the Bankruptcy Code on March 14, 2014. The lead case is QCE
Finance LLC (Case No. 14-10543, Bankr. D.Del.). The case is
assigned to Judge Peter J. Walsh.
The Debtors' lead counsel are Ira S. Dizengoff, Esq., Philip C.
Dublin, Esq., Jason P. Rubin, Esq., and Kristine G. Manoukian,
Esq., at AKIN GUMP STRAUSS HAUER & FELD LLP, in New York. The
Debtors' local counsel is Mark D. Collins, Esq., and Amanda
Steele, Esq., at RICHARDS, LAYTON & FINGER, P.A., in Wilmington,
Delaware. The Debtors' investment banker and financial advisor is
Matthew J. Hart of LAZARD FRERES & CO. LLC. Paul Ruh, Mark A.
Roberts, and Jonathan Tibus of Alvarez & Marsal serves as the
Debtors' restructuring advisors. Prime Clerk LLC serves as the
Debtors' claims and noticing agent.
The lead debtor, QCE Finance LLC, scheduled $737,000 in total
assets plus "undetermined amounts". It scheduled $618 million
plus "undetermined amounts" as liabilities.
The U.S. Trustee has appointed a seven-member official committee
of unsecured creditors. The Committee has tapped Cousins Chipman
& Brown LLP's Scott D. Cousins, Esq., and Ann Kashishian, Esq.;
and Otterbourg P.C.'s Scott L. Hazan, Esq., Jenette A. Barrow-
Bosshart, Esq., and David M. Posner, Esq., as counsel.
Avenue Capital Management II, L.P. and its affiliates are
represented by John J. Rapisardi, Esq., and Joseph Zujkowski,
Esq., at O'Melveny & Myers LLP in New York. Fortress Investment
Group and its affiliates are represented by Skadden Arps Slate
Meagher & Flom's Van C. Durrer, Esq. Co-counsel to the Consenting
First Lien Lenders are Milbank Tweed Hadley & McCloy's Thomas R.
Kreller, Esq., and David B. Zolkin, Esq., and Morris Nichols Arsht
& Tunnell's Robert J. Dehney. Counsel to the First Lien Agent is
Ropes & Gray's Mark R. Somerstein. Counsel to the Second Lien
Agent is Pillsbury Winthrop's Bart Pisella, Esq., and Timothy P.
Kober, Esq. Counsel to Vectra Bank Colorado, National
Association, is Kasowitz Benson's Adam L. Shiff, Esq.
Quiznos' Plan of Reorganization was confirmed by the U.S.
Bankruptcy Court in Wilmington, Delaware on May 12, 2014. The
company on July 1, 2014, disclosed that it has successfully
completed its financial restructuring and emerged from Chapter 11.
RAFAIL THEOKARY: 3rd Cir. Affirms Dismissal of Ch. 7 Adversary Suit
-------------------------------------------------------------------
Rafail Theokary appeals the dismissal of an adversary action he
commenced in the course of his Chapter 7 bankruptcy proceedings.
The adversary action was dismissed as a sanction for Theokary's
submission of a fraudulent expert report on damages. Theokary
contends that the Bankruptcy Court exceeded its authority by
dismissing the adversary action in its entirety, rather than just
limiting his damage award.
The U.S. Court of Appeals for the Third Circuit, in an opinion
dated Feb. 5, 2015, found that the Bankruptcy Court acted well
within its inherent authority and did not abuse its discretion in
dismissing the adversary action. Accordingly, the Third Circuit
affirmed.
Bill Rochelle and Sherri Toub, bankruptcy columnists for Bloomberg
News, reported that the opinion doesn't have an analysis of the
U.S. Supreme Court decision last year in Law v. Siegel, in which
the high court said, in the context of a homestead exemption, that
a court's equitable powers can't overcome the mandates of the
statute.
The case is Theokary v. Shay (In re Theokary), 14-1287, U.S. Court
of Appeals for the Third Circuit (Philadelphia). A full-text copy
of the Decision is available at
http://bankrupt.com/misc/THEOKARY0205.pdf
REED AND BARTON: Lifetime Brands Enters Into Asset Purchase Deal
----------------------------------------------------------------
Lifetime Brands, Inc., a global provider of branded kitchenware,
tableware and other products used in the home, on Feb. 23 disclosed
that it has entered into an asset purchase agreement to acquire the
operating assets and to assume certain liabilities of Reed and
Barton Corporation, which has filed for bankruptcy protection. The
agreement provides that Lifetime will purchase the assets pursuant
to Section 363 of the United States Bankruptcy Code. The
transaction is subject to a number of conditions, including
completion of an auction process and bankruptcy court approval.
Jeffrey Siegel, Lifetime's Chairman and CEO, commented, "Reed &
Barton's tableware business in flatware, crystal and serveware fits
nicely with our own and also will immediately establish for us a
strong position in the giftware category."
In addition, the Company announced that it has amended its bank
credit agreement. The amendment provides for a more gradual
reduction in the permitted maximum senior leverage ratio, beginning
March 31, 2015, than previously was the case. The amendment also
revises the definition of EBITDA to exclude expenses incurred in
respect of a financing that the Company chose not to complete due
to adverse market conditions and the acquisition of Reed & Barton,
if not completed. The amendment also includes clarifying language
as to the exclusion of potential earn-out payments related to
certain completed acquisitions. The amendment will be filed today
on Form 8-K.
The Company plans to announce its fourth quarter 2014 results at
7:00 a.m. (Eastern time) on Thursday, March 12, 2015. The Company
has scheduled a conference call for 11:00 a.m., at which time
Jeffrey Siegel, Chairman and Chief Executive Officer, and Laurence
Winoker, Senior Vice President and Chief Financial Officer, will
discuss the Company's financial results and will be available to
answer investor questions.
The dial-in number for the conference call is (877) 703-6109 or
(857) 244-7308 passcode #31412851. A replay of the call will also
be available through Thursday, March 19, 2015 and can be accessed
by dialing (888) 286-8010 or (617) 801-6888, conference ID
#55804783. A live webcast of the conference call will be broadcast
in the Investor Relations section of the Company's web site,
http://www.lifetimebrands.com/
For those who cannot listen to the live broadcast, an audio replay
of the call will also be available on the site.
About Lifetime Brands, Inc.
Lifetime Brands is a leading global provider of kitchenware,
tableware and other products used in the home. The Company markets
its products under such well-known kitchenware brands as
Farberware(R), KitchenAid(R), Cuisine de France(R), Fred(R) &
Friends, Guy Fieri(R), Kitchen Craft(R), Kizmos(TM), La
Cafetiere(R), Misto(R), Mossy Oak(R), Pedrini(R), Sabatier(R),
Savora(TM) and Vasconia(R); respected tableware brands such as
Mikasa(R), Pfaltzgraff(R), Creative Tops(R), Gorham(R),
International(R) Silver, Kirk Stieff(R), Sasaki(R), Towle(R)
Silversmiths, Tuttle(R), Wallace(R), V&A(R) and Royal Botanic
Gardens Kew(R); and home solutions brands, including Kamenstein(R),
Bombay(R),BUILT(R), Debbie Meyer(R)and Design for Living(TM). The
Company also provides exclusive private label products to leading
retailers worldwide.
About Reed and Barton
Founded in 1824, Reed and Barton Corporation is a designer and
distributor of high quality silverware and tableware, along with
flatware, crystal drinkware, picture frames, ornaments, and baby
giftware. Reed and Barton, which sells products with the Reed &
Barton, Lunt, R&B EveryDay, and Williamsburg brands, is based in
Taunton, Massachusetts. The privately held company's stock is
owned by 28 record shareholders who either are descendants of Henry
Reed or trusts for their benefit. Aside from selling its products
in department stores and TV shopping networks, the company has an
on-site factory store in Taunton and a showroom in Atlanta,
Georgia.
Reed and Barton sought Chapter 11 bankruptcy protection (Bankr. D.
Mass. Case No. 15-10534) in Boston, Massachusetts, on Feb. 17,
2015. The case is assigned to Judge Henry J. Boroff.
The Debtor has tapped Holland & Knight, in Boston, as counsel;
Financo, LLC, as investment banker; and Verdolino & Lowey, P.C., as
accountant.
The Debtor estimated $10 million to $50 million in assets and debt.
REED AND BARTON: U.S. Trustee Objects to Proposed Rockland DIP Loan
-------------------------------------------------------------------
William K. Harrington, U.S. Trustee for Region 1, objects to the
interim approval of Reed and Barton Corporation's motion to obtain
postpetition financing from Rockland Trust and granting Rockland
super priority administrative expense status and priming liens
because (i) it provides Rockland relief exceeding that required to
prevent irreparable harm pending a final hearing on the motion, and
(ii) it violates MLBR 4001-2(c).
The U.S. Trustee is represented by:
Eric K. Bradford, Esq.
United States Department of Justice
John W. McCormack Post Office & Courthouse
5 Post Office Square
10th Floor, Suite 1000
Boston, MA 02109-3934
Tel: (617) 788-0415
Fax: (617) 565-6368
Email: Eric.K.Bradford@USDOJ.gov
About Reed and Barton
Founded in 1824, Reed and Barton Corporation is a designer and
distributor of high quality silverware and tableware, along with
flatware, crystal drinkware, picture frames, ornaments, and baby
giftware. Reed and Barton, which sells products with the Reed &
Barton, Lunt, R&B EveryDay, and Williamsburg brands, is based in
Taunton, Massachusetts. The privately held company's stock is
owned by 28 record shareholders who either are descendants of
Henry
Reed or trusts for their benefit. Aside from selling its products
in department stores and TV shopping networks, the company has an
on-site factory store in Taunton and a showroom in Atlanta,
Georgia.
Reed and Barton sought Chapter 11 bankruptcy protection (Bankr. D.
Mass. Case No. 15-10534) in Boston, Massachusetts, on Feb. 17,
2015, with a deal to sell its assets to Lifetime Brands, Inc., for
$15 million in cash and debt, absent higher and better offers.
The case is assigned to Judge Henry J. Boroff.
The Debtor has tapped Holland & Knight, in Boston, as counsel;
Financo, LLC, as investment banker; and Verdolino & Lowey, P.C.,
as
accountant.
The Debtor estimated $10 million to $50 million in assets and debt.
RESEARCH NOW: Moody's Assigns B2 CFR & Rates $290MM 2021 Loan Ba3
-----------------------------------------------------------------
Moody's Investors Service assigned to Research Now Group, Inc. a B2
Corporate Family Rating and B2-PD Probability of Default Rating.
In connection with this rating, Moody's also assigned a Ba3 rating
to the company's proposed $290 million 1st-lien senior secured bank
credit facility due 2021 and a Caa1 rating to the proposed $135
million 2nd-lien term loan due 2022. The 1st-lien facility will
consist of a $35 million revolver under which $5 million will be
drawn at closing, and a $255 million 1st-lien term loan B.
Research Now will utilize the proceeds of the facilities, along
with an equity contribution to finance the acquisition of the
company by Court Square Capital Partners, to pay related fees and
expenses and refinance existing debt. The rating outlook is
stable.
The significant increase in debt and leverage resulting from the
acquisition is credit negative. However, the B2 CFR assignment is
unchanged from the company's prior CFR because debt-to-EBITDA
leverage remains within Moody's expectation for the rating and is
projected to decline. The new debt instruments will initially be
issued by a newly-formed merger subsidiary named RNow Merger Sub,
Inc. Upon closing of the proposed acquisition, the Initial
Borrower will be merged with and into Research Now Group, Inc.,
which will be the surviving entity and borrower under each of the
proposed facilities. The new credit facilities will replace the
current debt capital structure, which consists of a $30 million
revolving credit facility and a $190 million term loan. Moody's
will withdraw the company's existing B2 CFR and B2-PD PDR, as well
as the B2 rating on the existing revolver and term loan upon
closing of the acquisition and retirement of the existing debt.
Moody's assigned the following ratings:
Research Now Group, Inc.
-- Corporate Family Rating assigned B2
-- Probability of Default Rating assigned B2-PD
RNow Merger Sub, Inc. (to be merged into Research Now Group, Inc.)
-- $35 million Sr. Secured Revolving Credit Facility due 2021
assigned Ba3 (LGD3)
-- $255 million 1st-lien Sr. Secured Term Loan B due 2021
assigned Ba3 (LGD3)
-- $135 million 2nd-lien Sr. Secured Term Loan due 2022
assigned Caa1 (LGD6)
-- Rating Outlook is Stable
The B2 CFR reflects Research Now's high pro forma debt-to-EBITDA
leverage of close to 5.5x (all metrics incorporate Moody's standard
adjustments) following the leveraged buyout by Court Square. The
significant increase in debt-to-EBITDA from an adjusted level of
about 2.8x as of Sep. 30, 2014 weakens the company's positioning
within the B2 CFR. Moody's nevertheless projects that
debt-to-EBITDA will improve to under 5.0x over the next 12 to 18
months as a result of growth initiatives and improved operational
efficiency. The rating also incorporates Moody's view that revenue
is vulnerable to cyclical client spending. Research Now's business
is exposed to technology risk due to its concentration in one
segment of market research/data collection -- online and mobile
surveys. The potential for new substitutes to displace the current
online model could introduce competitive pressure in the future.
In addition, as the company continues to progress toward developing
an integrated offering across mobile, tablet and desktop platforms,
higher-than-expected integration costs or process delays could
prolong the realization of full revenue synergies from these
initiatives.
Counterbalancing these risks are Research Now's strong market
position in the online survey sector and a revenue base roughly two
times that of its next largest peer. The company's market position
built on its large pool of active panelists drives a high-teens
EBITA margin and Moody's projection for positive free cash flow
that supports liquidity and debt service. Research Now's global
reach and diverse group of over five million active panelists
worldwide provide a competitive advantage over many of its smaller
peers, allowing the company to conduct surveys covering broad and
local geographic regions, and to target very granular,
"hard-to-reach" demographics. In addition, Research Now has
maintained good relationships and high retention rates among its
clients, who primarily include market research agencies, consulting
firms, media agencies and corporations. Its strategy of leveraging
loyalty-programs to offer attractive rewards as incentives for
consumers and business decision makers to regularly participate in
surveys helps maintain a large pool of active panelists.
Research Now has an adequate liquidity profile, supported by a $35
million revolver due 2021, a pro forma cash balance of $5 million,
and Moody's expectation for $15 to $18 million of positive free
cash flow over the next 12 months. Upon closing of the proposed
transaction, the revolver will have $30 million of remaining
availability. Both the 1st-lien and 2nd-lien facilities will be
subject to a total net leverage covenant, which will be set with
30% and 45% EBITDA cushion, respectively. Moody's expects the
company will maintain sufficient headroom under the covenants to
ensure continued full access to the revolver over the next 12-15
months. Alternate liquidity is constrained, as assets are largely
encumbered to secure credit facility borrowings and the company has
limited assets to liquidate, if necessary. Research Now has no
significant debt maturities until 2021, when the 1st-lien facility
matures, aside from approximately $2.6 million of required annual
term loan amortization that is manageable within the company's cash
and projected free cash flow.
The stable outlook reflects Moody's expectation for continued
revenue growth and healthy margins over the next 12-18 months,
supported by favorable industry conditions and the company's strong
market position in the online sampling sector.
The ratings on the 1st-lien and 2nd-lien senior secured bank credit
facilities reflect the overall probability of default for Research
Now, which Moody's rates B2-PD. The Ba3 ratings on the revolver
and 1st-lien term loan (two notches above the CFR) reflect the
first-priority interest in substantially all assets and stock of
the borrower and its domestic subsidiaries, as well as the
loss-absorption cushion provided by $135 million of second lien
loan. The Caa1 rating on the 2nd-lien term loan (two notches below
the CFR) reflects the second-priority interest in substantially all
assets and stock of the borrower and its domestic subsidiaries, as
well as the lien subordination to the $290 million of first lien
secured credit facilities.
An upgrade may be taken if the company continues to improve
profitability such that adjusted debt/EBITDA is sustained below
4.0x and adjusted EBITA/interest expense is sustained above 2.5x,
while maintaining a good liquidity profile.
A downgrade could result if revenue growth begins to slow
materially or if weak operating weakness, cash distributions to
shareholders or acquisitions increase leverage. Specifically,
adjusted debt/EBITDA approaching 6.0x or adjusted EBITA/interest
expense below 1.75x could pressure ratings. Deterioration in free
cash flow generation or liquidity could also lead to negative
rating actions.
The principal methodology used in this rating was the Business &
Consumer Service Industry Rating published in December 2014. Other
methodologies used include Loss Given Default for Speculative-Grade
Non-Financial Companies in the U.S., Canada and EMEA, published in
June 2009.
Research Now Group, Inc., based in Plano, TX, enables customers to
conduct online and mobile surveys for research studies through its
several million active panelists who are enrolled as members of its
general and specialty survey panels. Research Now is a market
leader in providing online and mobile survey-data collection,
processing, and reporting. The company is being acquired by Court
Square Capital Partners from its current owners through a leveraged
buyout transaction. For the 12 months ended Sep. 30, 2014, Research
Now generated approximately $335 million in total revenues.
RESPONSE BIOMEDICAL: Attains Milestone in Co-Development Alliance
-----------------------------------------------------------------
Response Biomedical Corp. has earned the second milestone of
US$720,000 in the funded technology development agreement with
Hangzhou Joinstar Biomedical Technology Co. Ltd. The milestone was
earned upon the signing of the definitive Collaboration Agreement
to support the co-development by Response and Joinstar of
components and assays that will run on a high throughput rapid
immunoassay analyzer developed by Joinstar. Concurrently, the
companies have entered into a definitive Supply Agreement whereby
Response will provide certain materials to Joinstar required for
Joinstar to manufacture and sell these assays specifically to run
on their new analyzer.
"This is an important collaboration as it allows Response to use
its core capabilities in research and technical development to
create an additional revenue stream from facilities that require a
higher throughput than our RAMP platform and therefore complement
our sales from our current distributors in China," said Dr. Anthony
Holler, interim chief executive officer of Response.
"We are pleased to have reached this second milestone as an
indication of the smooth progress we are making on collaboration in
this project," stated Mr. Xuyi Zhou, general manager of Joinstar.
Under the terms of the Collaboration Agreement and the previously
signed Technology Development Agreement, Response is eligible to
receive cash milestones totaling US$3.8 million over the planned
fifteen month project period. In addition, under the terms of the
Supply Agreement, Response is eligible to receive a guaranteed
US$2.13 million in revenue based payments over the first five years
of commercialization of the co-developed assays. Joinstar related
entities have also purchased 1,800,000 common shares of Response at
a price of $1.21 per share for total gross proceeds of $2,178,000
in December 2014.
About Response Biomedical
Based in Vancouver, Canada, Response Biomedical Corporation
develops, manufactures and sells diagnostic tests for use with its
proprietary RAMP(R) System, a portable fluorescence immunoassay-
based diagnostic testing platform. The RAMP(R) technology
utilizes a unique method to account for sources of error inherent
in conventional lateral flow immunoassay technologies, thereby
providing the ability to quickly and accurately detect and
quantify an analyte present in a liquid sample. Consequently, an
end-user on-site or in a point-of-care setting can rapidly obtain
important diagnostic information. Response Biomedical currently
has thirteen tests available for clinical and environmental
testing applications and the Company has plans to commercialize
additional tests.
Response Biomedical reported a net loss and comprehensive loss of
$5.99 million in 2013, a net loss and comprehensive loss of $5.28
million in 2012 and a net loss and comprehensive loss of $5.37
million in 2011.
The Company's balance sheet at Sept. 30, 2014, showed
$12.3 million in total assets, $15.6 million in total liabilities
and total stockholders' deficit of $3.32 million.
PricewaterhouseCoopers LLP, in Vancouver, British Columbia, issued
a "going concern" qualification on the consolidated financial
statements for the year ended Dec. 31, 2013. The independent
auditors noted that the Company has incurred recurring losses from
operations and has an accumulated deficit at Dec. 31, 2013, which
raises substantial doubt about its ability to continue as a going
concern.
RETROPHIN INC: Releases Oversight Committee Findings to Date
------------------------------------------------------------
The Board of Directors of Retrophin Inc. appointed an oversight
committee consisting of Gary Lyons and Jeffrey Meckler to oversee
and direct the investigation of the Company's former Chief
Executive Officer Martin Shkreli, according to a document filed
with the Securities and Exchange Commission. Each of Messrs. Lyons
and Meckler was not a member of the Board during the period covered
by the Investigation.
In September 2014, the Board requested that the Company's outside
legal counsel conduct an investigation into the circumstances
surrounding the negotiation and execution by Mr. Shkreli of certain
consulting and settlement agreements entered into by the Company.
The Investigation also covered additional agreements and other
matters involving Mr. Shkreli during his tenure as the chief
executive officer of the Company.
On Feb. 20, 2015, the Company provided the following information
regarding the Oversight Committee's conclusions to date:
* Consulting Agreements. Between September 2013 and March
2014, the Company entered into several consulting agreements
and releases with individuals or entities that had been
investors in investment funds previously managed by Mr.
Shkreli, or that otherwise had financial dealings with Mr.
Shkreli. The agreements provided for the issuance of a total
of 612,500 shares of common stock of the Company, and a total
of $400,000 in cash payments by the Company. The Oversight
Committee concluded that the Company should not continue to
treat these agreements as consulting agreements because their
predominant purpose appears to have been to settle and
release claims against the MSMB Entities or Mr. Shkreli
personally, and not to provide meaningful and sustained
consulting services to the Company.
* Settlement Agreements. As previously disclosed, in the
second quarter of 2013 the Company entered into a series of
settlement agreements with individuals or entities that had
been investors in the MSMB Entities, pursuant to which the
Company paid approximately $2.2 million in cash and issued
11,000 shares of common stock of the Company to such
investors, and Mr. Shkreli delivered or caused to be
delivered a total of 47,128 shares of common stock of the
Company to one such investor. The Oversight Committee
concluded that an additional previously disclosed settlement
agreement entered into by the Company (and under which the
Company paid $300,000 in cash) was also with a former
investor in the MSMB Entities, and that the predominant
purpose of this payment was to settle and release the
investor's claims against the MSMB Entities and Mr. Shkreli
personally. The Oversight Committee also concluded that Mr.
Shkreli caused to be delivered an additional 80,000 shares of
common stock of the Company to another former investor in the
MSMB Entities pursuant to a previously undisclosed settlement
agreement to which the Company was a party.
* Litigation Settlements. In the second quarter of 2014, the
Company settled two lawsuits involving individuals who had
formerly performed services for both the Company and the MSMB
Entities. The Oversight Committee concluded that
approximately $200,000 in cash payments made by the Company
as part of these settlements appear to have been made to
cause these individuals to transfer 176,388 shares of the
Company's common stock directly to Mr. Shkreli.
* Other Obligations. During the quarter ended March 31, 2013,
the Company repaid a $900,000 secured promissory note dated
Feb. 1, 2012, together with interest thereon, in favor of one
of the MSMB Entities. The Oversight Committee concluded that
the MSMB Entity originally transferred the $900,000 to the
Company as an equity investment, which was subsequently
reclassified as a loan. It appears that $900,000 of the
Company's payment against the note, together with a $575,000
payment made by the Company to Mr. Shkreli (which appears to
have been a discretionary bonus), was transferred to a third
party in connection with the settlement of an arbitration
proceeding brought against one of the MSMB Entities and Mr.
Shkreli personally. The Oversight Committee also identified
other instances in which the Company paid or forgave monetary
obligations of approximately $1.2 million in the aggregate
for the primary benefit of the MSMB Entities.
The Oversight Committee concluded that certain of the transactions
were consummated without specific Board approval or without the
Board knowing all of the relevant facts.
Impact on Financial Statements
The financial statements contained in the Company's Form 10-Q for
the three months ended Sept. 30, 2013, the Company's Form 10-K for
the year ended Dec. 31, 2013, and the Company's Forms 10-Q for the
quarters ended March 31, 2014, June 30, 2014 and Sept. 30, 2014,
contain errors related to certain of the consulting agreements the
predominant purpose of which appears to have been to settle and
release claims against the MSMB Entities or Mr. Shkreli
personally.
Specifically, the Company previously recognized expense related to
the stock issued pursuant to those consulting agreements over the
term of each such agreement. Had the Company accounted for these
arrangements as settlements, the Company would have recorded, as of
the date of each agreement, an expense and a settlement liability
related to the entire amount of the stock to be issued under such
agreement. The settlement liability would have been revalued at
each reporting period based on changes in the Company's stock price
until the stock had been entirely issued.
On Feb. 19, 2015, the Board concluded that as a result of the
errors related to those consulting agreements, the financial
statements contained in the 2013 Q3 Form 10-Q and the 2013 Form
10-K should no longer be relied upon. The Company's authorized
officers have discussed those matters with Marcum LLP. The Company
said it will correct those errors, including any related
disclosures, in the Company's Form 10-K for the year ended
Dec. 31, 2014.
The Company believes that the errors related to those consulting
agreements in the 2014 Forms 10-Q do not cause the financial
statements contained therein to be misleading, and therefore those
financial statements can still be relied upon. The Company will
correct those errors, including any related disclosures, in the
2014 Form 10-K.
Next Steps
The Oversight Committee is evaluating the Company's alternatives
with respect to the matters identified by the Oversight Committee,
which may include asserting claims for damages against one or more
parties who engaged in the conduct covered by the Investigation.
Stock Option Accounting
As previously announced, the Company held a Special Meeting of
Stockholders on Feb. 3, 2015, at which the Company's stockholders
voted to approve a proposal ratifying the prior issuance of stock
options to purchase 1,928,000 shares of common stock and 230,000
restricted shares of common stock granted to employees between Feb.
24, 2014, and Aug. 18, 2014. The 2014 Forms 10-Q contain errors
related to the non-cash compensation expense recognized in
connection with the Ratified Equity Grants, because the
grant/measurement date of the Ratified Equity Grants for financial
accounting purposes did not occur until their ratification.
The Company previously accounted for the Ratified Equity Awards as
if a grant/measurement date for financial accounting purposes had
occurred upon their issuance date, and recognized compensation
expense for such Ratified Equity Awards based on the
grant/measurement date value, which is amortized ratably to
compensation expense and additional paid-in capital over the
applicable service periods. The Company should have accounted for
the Ratified Equity Awards as equity grants without a
grant/measurement date, which are accounted for as "liability
awards", with compensation expense and an offsetting compensation
liability recorded over the term of the award, and the liability
award revalued at each reporting period based on changes in the
Company’s stock price until it is ratified.
The Company that believes the errors in the 2014 Forms 10-Q related
to the non-cash compensation expense recognized in connection with
the Ratified Equity Grants do not cause the financial statements
included within the 2014 Forms 10-Q to be misleading, and therefore
those financial statements can still be relied upon. The Company
said it will correct those errors, including any related
disclosures, in the 2014 Form 10-K.
Litigation Update
The Company is providing the following update on litigation
matters.
* Huang Litigation. On March 28, 2013, Chun Yi Huang sued the
Company, MSMB Group, MSMB Capital Management, LLC, Retrophin
Pharmaceutical, Inc., Marek Biestek, and Martin Shkreli in
state court in New York (Huang v. MSMB Group, Index No. 152829-
2013). Huang claims that he is owed past due salary and
benefits totaling $36,387. The Company answered the complaint
in April 2013, and the parties have since been engaged in
discovery. In June 2014, Huang's counsel filed a motion
seeking to be relieved as counsel for Huang. The Court denied
that motion in October 2014. In September 2014, Huang noticed
an appeal of a discovery order, which is still pending.
* Schwab Litigation. On June 13, 2014, Charles Schwab & Co.,
Inc. sued the Company, Standard Registrar and Transfer Company,
Jackson Su, and Huang in federal court in the Southern District
of New York (Charles Schwab & Co. v. Retrophin, Inc., Case No.
14-cv-4294). The complaint alleges that the defendants misled
Schwab in connection with its sale of Company stock owned by Su
and Huang. Schwab contends that Su and Huang improperly
advised it that their Company stock was not restricted.
Schwab's claim against the Company is based on an agency
theory. Schwab contends that it has incurred in excess of $2.5
million in damages as a result of the alleged misinformation.
Su and Huang have asserted cross-claims against the Company and
Standard for alleged negligent misrepresentation premised upon
an alleged failure to inform them of restrictions on the sale
of their Company stock. Su and Huang have also impleaded
Katten Muchin Rosenman LLP as a third-party defendant. The
Company has filed motions to dismiss Schwab's claims, as well
as Su's and Huang's cross claims. Those motions are fully
briefed, but have not yet been decided by the court.
* Section 16(b) Litigation. On Sep. 19, 2014, a purported
shareholder of the Company sued Mr. Shkreli in federal court in
the Southern District of New York (Donoghue v. Retrophin, Inc.,
Case No. 14-cv-7640). The Company is a nominal defendant in
this action. The plaintiff seeks, on behalf of the Company,
disgorgement of short-swing profits from Mr. Shkreli under
section 16(b) of the Securities Exchange Act of 1934 (15 U.S.C.
78(p)(b)). The complaint alleges that, based on trades in the
Company's stock between November 2013 and November 2014, Mr.
Shkreli realized short-swing profits in excess of $1.75
million, which belong to the Company. In December 2014, Mr.
Shkreli filed an answer to the operative complaint, in which
he, among other things, admitted to owing the Company over
$600,000 in short-swing profits. The parties are currently
engaged in discovery.
* Section 10(b) Litigation. On Oct. 20, 2014, a purported
shareholder of the Company filed a putative class action
complaint in federal court in the Southern District of New York
against the Company, Mr. Shkreli, Marc Panoff, and Jeffrey
Paley (Kazanchyan v. Retrophin, Inc., Case No. 14-cv-8376). On
Dec. 16, 2014, a second, related complaint was filed in the
Southern District of New York against the same defendants
(Sandler v. Retrophin, Inc., Case No. 14-cv-9915). The
complaints assert violations of Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934 in connection with defendants’
public disclosures during the period from Nov. 13, 2013,
through Sept. 30, 2014. In December 2014, plaintiff Kazanchyan
filed a motion to appoint lead plaintiff, to approve lead
counsel, and to consolidate the two related actions. On
Feb. 10, 2015, the Court consolidated the two actions,
appointed lead plaintiff, and approved lead counsel. Lead
plaintiff's deadline to file a consolidated amended complaint
is March 3, 2015. An initial pretrial conference is currently
scheduled for March 11, 2015.
* Questcor Litigation. On Jan. 7, 2014, the Company sued
Questcor Pharmaceuticals, Inc. in federal court in the Central
District of California (Retrophin, Inc. v. Questcor
Pharmaceuticals, Inc., Case No. SACV14-00026-JLS). The Company
contends that Questcor violated antitrust laws in connection
with its acquisition of rights to the drug Synacthen, and seeks
injunctive relief and damages. The Company has asserted claims
under sections 1 and 2 of the Sherman Act, section 7 of the
Clayton Act, California antitrust laws, and California's unfair
competition law. In August 2014, the Court denied Questcor's
motion to dismiss. The parties are now engaged in discovery.
A trial is currently set for November 2015.
* EDNY Subpoena. In January 2015, the Company received a
subpoena relating to a criminal investigation by the U.S.
Attorney for the Eastern District of New York. The subpoena
requests information regarding, among other things, the
Company's relationship with the MS MB Entities and Mr. Shkreli.
The Company has been informed that it is not the target of the
U.S. Attorney's investigation, and intends to cooperate with
the investigation.
About Retrophin
Retrophin, Inc., develops, acquires and commercializes therapies
for the treatment of serious, catastrophic or rare diseases. The
Company offers Chenodal(R), a treatment for gallstones;
Vecamyl(R), a treatment for moderately severe to severe essential
hypertension and uncomplicated cases of malignant hypertension;
and Thiola, for the prevention of kidney stone formation in
patients with severe homozygous cystinuria.
Retrophin reported a net loss of $33.8 million in 2013 following a
net loss of $30.3 million in 2012.
The Company's balance sheet at Sept. 30, 2014, showed $146 million
in total assets, $156 million in total liabilities, and a
stockholders' deficit of $10.2 million.
"Management believes that the Company will continue to incur losses
for the immediate future. For the nine months ended
Sept. 30, 2014, the Company has generated revenue and is trying to
achieve positive cash flow from operations. The Company's future
depends on the costs, timing, and outcome of regulatory reviews of
its product candidates, ongoing research and development, the
funding of planned or potential acquisitions, other planned
operating activities, and the costs of commercialization
activities, including ongoing, product marketing, sales and
distribution. The Company expects to finance its cash needs from
results of operations and depending on the results of operations,
the Company may need additional private and public equity offerings
and debt financings, corporate collaboration and licensing
arrangements and grants from patient advocacy groups, foundations
and government agencies. Although management believes that the
Company has access to capital resources, there are no commitments
for financing in place at this time, nor can management provide any
assurance that such financing will be available on commercially
acceptable terms, if at all. These conditions raise substantial
doubt about the Company's ability to continue as a going concern,"
according to the quarterly report for the period ended Sept. 30,
2014.
REVEL AC: Could be Forced to Liquidation if no Buyer Emerges
------------------------------------------------------------
Tom Corrigan, writing for The Wall Street Journal, reported that
Revel AC, LLC's chief restructuring officer told a bankruptcy judge
that although no formal offers have been made for the casino
operator, there have been a "lot of inquiries" but that if a buyer
can't be found, the resort could be forced into liquidation.
As previously reported by The Troubled Company Reporter, Revel's
deal to sell its Atlantic City, New Jersey Revel Casino Hotel to
Glenn Straub's Polo North Country Club Inc. failed to close and the
Debtor was allowed by the bankruptcy judge to try to find a buyer
for the third time. According to the Journal, Revel's continued
survival is heavily dependent on primary lender Wells Fargo & Co.'s
willingness to continue to provide funding.
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: Glenn Straub in New Deal to Buy Casino for $82-Mil.
-------------------------------------------------------------
Tom Corrigan, writing for The Wall Street Journal, reported that
the Revel Casino Hotel has struck a new $82 million deal to sell
the beleaguered Atlantic City. N.J., resort to Florida-based
developer Glenn Straub.
"All issues are pretty well resolved," Mr. Straub told The Wall
Street Journal on Feb. 24. "We're buying what we originally
intended to buy, and the dollar figure will reflect that."
As previously reported by The Troubled Company Reporter, U.S.
Bankruptcy Judge Gloria Burns in New Jersey allowed Revel AC,
LLC, to scrap the sale of its casino to Mr. Straub's Polo North
Country Club Inc., giving the bankrupt casino operator a third
chance to find another buyer, various news sources reported.
Michael Bathon, writing for Bloomberg News, Judge Burns gave Revel
permission to cancel its $95.4 million deal with Polo North and
allowed it to keep the bidder's $10 million deposit, which will
be held in escrow. Mr. Straub is weighing an appeal, his attorney
Stuart Moskovitz said in an e-mail, the Bloomberg report said.
Revel has urged the bankruptcy court to allow it to terminate the
sale of its casino to Polo North. The move came as a result of
Polo North's request for an extension of the Feb. 9 sale closing
date, because numerous conditions to closing remain unresolved.
Polo North said in court papers that before it can or should be
compelled to close, there should and must be (i) a full
adjudication of ACR Energy's, IDEA Boardwalk's and the restaurant
Amenity Tenants' possessory rights, if any, in the property; (ii) a
full adjudication on the pending motions pertaining to ACR's rights
to disconnect and shut off power to the Revel building; (iii)
receipt by Polo North of its Gaming Approvals; and (iv)
satisfaction of each of the title conditions contained in the title
commitment so that Polo North receives clear and marketable title
to the properties that are the subject of the Polo North APA.
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.
RIVER CITY: Court Extends Deadline to Remove Suits to June 26
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Virginia has
given River City Renaissance LC and River City Renaissance III LC
until June 26 to file notices of removal of lawsuits involving the
companies.
About River City Renaissance
Richmond, Virginia-based, River City Renaissance, LC, and River
City Renaissance III, LC, sought Chapter 11 protection (Bankr. E.D.
Va. Case Nos. 14-34080 and 14-34081) in Richmond, Virginia, on July
30, 2014. The cases are assigned to Judge Keith L. Phillips.
Robert H. Chappell, III, Esq., at Spotts Fain PC, represents the
Debtors in their cases. River City Renaissance LC disclosed $27.3
million in assets and $29.2 million in liabilities as of the
Chapter 11 filing. Renaissance III estimated less than $10 million
in assets and debts. The Debtors have tapped Spotts Fain PC as
counsel.
RIVER CITY: March 3 Hearing on Bid to Use Cash Collateral
---------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Virginia will
continue the hearing on March 3 to consider River City Renaissance
LC's request to continue to use its cash collateral.
The company requested for an interim access to its cash collateral
in relation to the consummation of the sales of its assets. River
City said it will use the cash collateral to fund its operations as
well as ensure a smooth transition of ownership of its properties.
About River City Renaissance
Richmond, Virginia-based, River City Renaissance, LC, and River
City Renaissance III, LC, sought Chapter 11 protection (Bankr. E.D.
Va. Case Nos. 14-34080 and 14-34081) in Richmond, Virginia, on July
30, 2014. The cases are assigned to Judge Keith L. Phillips.
Robert H. Chappell, III, Esq., at Spotts Fain PC, represents the
Debtors in their cases. River City Renaissance LC disclosed $27.3
million in assets and $29.2 million in liabilities as of the
Chapter 11 filing. Renaissance III estimated less than $10 million
in assets and debts. The Debtors have tapped Spotts Fain PC as
counsel.
RIVER PROPERTIES: Files for Chapter 7 Liquidation
-------------------------------------------------
Aaron Gregg at The Washington Post reports that River Properties
LLC filed for Chapter 7 liquidation (Bankr. D. Ma. Case No.
15-12007) on Feb. 12, 2014, estimating its assets at between
$100,001 and $500,000 and liabilities at between $100,001 and
$500,000.
Judge Paul Mannes presides over the case. Brian V. Lee, Esq., at
Lee Legal serves as the Company's bankruptcy counsel.
Mr. Lee can be reached at:
1250 Connecticut Avenue NW
Second Floor
Washington, DC 20036
Tel: (202) 448-5136
Fax : (202) 640-2097
E-mail: bvlee@lee-legal.com
River Properties LLC is based in Riverdale, Maryland.
ROBERT PLAN: Trustee Can't Pay Fees from 401(k) Plan Assets
-----------------------------------------------------------
Bill Rochelle and Sherri Toub, bankruptcy columnists for Bloomberg
News, reported that the U.S. Court of Appeals for the Second
Circuit ruled that the bankruptcy court lacks jurisdiction to pay a
Chapter 7 trustee's expenses in terminating a 401(k) plan from the
plan's assets.
According to the report, in an unsigned opinion on Feb. 5, the
Manhattan-based Second Circuit said there was no "arising under"
jurisdiction because Section 704(a)(11) of the Bankruptcy Code only
says that a bankrupt must continue as administrator of a plan after
bankruptcy. Similarly, there was no "arising in" jurisdiction
because the payment of an administrator's fees is typically an
issue that arises outside of bankruptcy, the report related.
Finally, there was no "related to" jurisdiction because Section
541(b)(7) explicitly says that plan assets are not part of the
bankrupt estate, therefore, the circuit court said, "the outcome of
the proceeding related to compensation could not conceivably have
had any effect on the debtors' estates," the report further
related.
The case is Kirschenbaum v. U.S. Labor Department (In re Robert
Plan Corporation), 14-1144, U.S. Second Circuit Court of Appeals
(Manhattan).
About Robert Plan
Headquartered in Bethpage, New York, The Robert Plan Corp. --
http://www.rpc.com/-- provided insurance services. Robert Plan
Corp. and its affiliate, Robert Plan of New York Corp., filed
voluntary Chapter 11 petitions (Bankr. E.D.N.Y. Case No. 08-74573)
on Aug. 25, 2008, citing "serious cash flow problems" because of
Lincoln General Insurance's failure to make payments. Harold S.
Berzow, Esq., at Ruskin Moscou Faltischek, served as the Debtors'
counsel. Robert Plan disclosed total assets of $21.9 million and
total debts of $41.1 million.
On Jan. 19, 2010, the cases were converted to Chapter 7. Kenneth
Kirschenbaum, Esq., was appointed as trustee for both cases. By
order entered on Sept. 9, 2010, the Debtors' cases were
substantively consolidated.
S.E.V. INVESTMENTS: Case Summary & 15 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: S.E.V. Investments, LLC
14694 Pipeline Ave.
Chino Hills, CA 91709
Case No.: 15-11640
Chapter 11 Petition Date: February 23, 2015
Court: United States Bankruptcy Court
Central District of California (Riverside)
Judge: Hon. Wayne E. Johnson
Debtor's Counsel: M Jonathan Hayes, Esq.
SIMON RESNIK HAYES LLP
15233 Ventura Blvd., Suite 250
Sherman Oaks, CA 91403
Tel: (818) 783-6251
Fax: (818) 827-4919
Email: jhayes@srhlawfirm.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Vahe Ter-Galstanyan, managing member.
A list of the Debtor's 15 largest unsecured creditors is available
for free at http://bankrupt.com/misc/cacb15-11640.pdf
SALADWORKS LLC: Can Hire UpShot as Claims and Noticing Agent
------------------------------------------------------------
Saladworks, LLC, sought and obtained authority from Judge Laurie
Selber Silverstein of the U.S. Bankruptcy Court for the District of
Delaware to employ UpShot Services LLC as claims and noticing
agent.
As claims and noticing agent, UpShot will perform these services:
(1) Prepare and serve required notices and documents in the
Chapter 11 Case in accordance with the Bankruptcy Code and the
Bankruptcy Rules in the form and manner directed by the Debtor
and/or the Court, including (i) notice of the commencement of the
case and the initial meeting of creditors under Bankruptcy Code
section 341(a), (ii) notice of any claims bar date, (iii) notices
of transfers of claims, (iv) notices of objections to claims and
objections to transfers of claims, (v) notices of any hearings on
motions filed by the Debtor, (vi) notice of the effective date of
any plan and (vii) all other notices, orders, pleadings,
publications and other documents as the Debtor or Court may deem
necessary or appropriate for an orderly administration of the case;
(2) Maintain an official copy of the Debtor's schedules of
assets and liabilities and statement of financial affairs, listing
the Debtor's known creditors and the amounts owed thereto;
(3) Maintain (i) a list of all potential creditors, equity
holders and other parties-in-interest; and (ii) a "core" mailing
list consisting of all parties described in subsections (i), G) and
(k) of Rule 2002 and those parties that have filed a notice of
appearance pursuant to Bankruptcy Rule 9010; update said lists and
make said lists available upon request by a party-in-interest or
the Clerk;
(4) Furnish a notice to all potential creditors of the last date
for the filing of proofs of claim and a form for the filing of a
proof of claim, after such notice and form are approved by this
Court, and notify said potential creditors of the existence, amount
and classification of their respective claims as set forth in the
Schedules, which may be effected by inclusion of such information
(or the lack thereof, in cases where the Schedules indicate no debt
due to the subject party) on a customized proof of claim form
provided to potential creditors;
(5) Maintain a post office box or address for the purpose of
receiving claims and returned mail, and process all mail received;
For all notices, motions, orders or other pleadings or documents
served, prepare and file or caused to be filed with the Clerk an
affidavit or certificate of service within seven (7) business days
of service which includes (i) either a copy of the notice served or
the docket numbers(s) and title(s) of the pleading(s) served, (ii)
a list of persons to whom it was mailed (in alphabetical order)
with their addresses, (iii) the manner of service, and (iv) the
date served;
(6) Process all proofs of claim received, including those
received by the Clerk's Office, and check said processing for
accuracy, and maintain the original proofs of claim in a secure
area;
(7) Maintain the official claims register for the Debtor on
behalf of the Clerk; upon the Clerk's request, provide the Clerk
with certified, duplicate unofficial Claims Register; and specify
in the Claims Register the following information for each claim
docketed: (i) the claim number assigned, (ii) the date received,
(iii) the name and address of the claimant and agent, if
applicable, who filed the claim, (iv) the amount asserted, (v) the
asserted classification(s) of the claim (e.g., secured, unsecured,
priority, etc.), (vi) the applicable Debtor, and (vii) any
disposition of the claim;
(8) Implement necessary security measures to ensure the
completeness and integrity of the Claims Register and the
safekeeping of the original claims;
(9) Record all transfers of claims and provide any notices of
such transfers as required by Bankruptcy Rule 300l(e);
(10) Relocate, by messenger or overnight delivery, all of the
court-filed proofs of claim to the offices of Claims Agent, not
less than weekly;
(11) Upon completion of the docketing process for all claims
received to date for each case, tum over to the Clerk copies of the
Claims Register for the Clerk's review (upon request by the Clerk's
Office and otherwise on a quarterly basis);
(12) Monitor the Court's docket for all notices of appearance,
address changes, and claims-related pleadings and orders filed and
make necessary notations on and/or changes to the Claims Register;
(13) Assist in the dissemination of information to the public and
respond to requests for administrative information regarding the
case as directed by the Debtor or the Court, including through the
use of a case website and/or call center;
(14) If the case is converted to chapter 7, contact the Clerk's
Office within three (3) days of the notice to Claims Agent of entry
of the order converting the case;
(15) Thirty (30) days prior to the closing of this case, to the
extent practicable, request that the Debtor submit to the Court a
proposed Order dismissing the Claims Agent and terminating the
services of such Claims Agent upon completion of its duties and
responsibilities and upon the closing of this case;
(16) Within seven (7) days of notice to Claims Agent of entry of
an order closing the Chapter 11 Case, provide to the Court the
final version of the Claims Register as of the date immediately
before the closing of this case; and
(17) At the closing of this case, box and transport all original
documents, in proper format, as provided by the Clerk's Office, to
(i) the Philadelphia Federal Records Center, 14700 Townsend Road,
Philadelphia, Pennsylvania 19154 or (ii) any other location
requested by the Clerk's Office.
Travis K. Vandell, the chief executive officer with UpShot Services
LLC, assures the Court that UpShot is a "disinterested person"
within the meaning of Section 101(14) of the Bankruptcy Code and
holds no interest materially adverse to the Debtor and its estate.
About Saladworks, LLC
Developed in 1986, Saladworks, LLC, is the first and largest
fresh-salad franchise concept in the United States. From its
beginning in the Cherry Hill Mall, Saladworks quickly expanded to
12 additional locations in area malls and soon thereafter began
franchising. The company has franchise agreements with 162
different franchisees. The equity owners are J Scar Holdings,
Inc., (70%) and JVSW LLC (30%).
Saladworks, LLC, sought Chapter 11 bankruptcy protection (Bankr.
D.
Del. Case No. 15-10327) on Feb. 17, 2015. The case assigned to
Judge Laurie Selber Silverstein.
The Debtor has tapped Landis Rath & Cobb LLP as counsel; SSG
Advisors, LLC, as investment banker; EisnerAmper LLP, as financial
advisor; and Upshot Services LLC, as claims and noticing agent.
The Debtor estimated $10 million to $50 million in assets and
debt.
SALIX PHARMACEUTICALS: Moody's Reviews 'B1' CFR for Upgrade
-----------------------------------------------------------
Moody's Investors Service placed the ratings of Salix
Pharmaceuticals, Ltd under review for upgrade, including the B1
Corporate Family Rating, B1-PD Probability of Default Rating, the
Ba1 senior secured ratings, and the B2 senior unsecured rating.
This rating action follows the announcement that Valeant
Pharmaceuticals International, Inc. has made an offer to acquire
Salix for approximately $14.5 billion including debt. The
Speculative Grade Liquidity Rating is affirmed at SGL-3.
On Review for Upgrade:
Salix Pharmaceuticals, Ltd.
-- Corporate Family Rating at B1
-- Probability of Default Rating at B1-PD
-- Senior secured revolving credit facility at Ba1(LGD2)
-- Senior secured term loan at Ba1(LGD2)
-- Senior unsecured notes at B2(LGD4)
Ratings Affirmed:
Salix Pharmaceuticals, Ltd.
-- Speculative Grade Liquidity Rating at SGL-3
Moody's review will consider the benefits of becoming part of a
larger, more diversified company, as well as Valeant's treatment of
Salix's debt.
Salix's B1 Corporate Family Rating (under review for upgrade)
reflects the company's position as the leading specialty
pharmaceutical company operating in the gastroenterology segment.
Revenue is somewhat concentrated in three key products: Xifaxan,
Glumetza and Uceris. Both Xifaxan and Uceris face high barriers for
generic competitors. Underlying prescription demand for Salix's
key products will be strong. Offsetting these strengths, strong
growth in Xifaxan and Uceris will be necessary to offset upcoming
2016 genericization of Glumetza and Zegerid. Financial leverage
will be extremely high for most of 2015 because sales will be
adversely affected by the wholesaler inventory workdown, with
debt/EBITDA in excess of 8.0 times. The workdown is temporary and
sales will rebound in 2016, resulting in significant improvement in
debt/EBITDA to below 4.0 times. Salix's earnings will improve even
more rapidly in 2016 if the FDA approves Xifaxan for the treatment
of irritable bowel syndrome, potentially in May 2015.
The principal methodology used in these ratings was Global
Pharmaceutical Industry published in December 2012. Other
methodologies used include Loss Given Default for Speculative-Grade
Non-Financial Companies in the U.S., Canada and EMEA published in
June 2009.
Salix Pharmaceuticals, Ltd. is a specialty pharmaceutical company
operating in the US gastroenterology area. Through the recent
acquisition of Santarus Pharmaceuticals, Inc., Salix became the
largest specialty company operating in this market. For the 9
months ended Sep. 30, 2014, Salix reported net product revenue of
approximately $1.1 billion including Santarus revenues from the
Jan. 2, 2014 acquisition date.
SAMUEL WYLY: Must Pay Ex-Wife $500,000 a Year Despite Bankruptcy
----------------------------------------------------------------
William J Rochelle III, writing for Bloomberg News, reported that
U.S. Bankruptcy Judge Barbara J. Houser in Dallas sided with Samuel
Wyly's former wife, Torrie Steele, in her claim that Mr. Wyly's
responsibility to pay her $500,000 a year is a support obligation
that's not wiped out by Chapter 11.
According to the report, the judge prefaced her 27-page opinion by
saying courts view support obligations "more broadly" so that
bankruptcy "does not become a tool to allow debtors to escape
familial obligations." Even though she was required to view the
evidence "in the light most favorable to Sam," Judge Houser said
agreements and rulings by the California matrimonial court "clearly
establish the parties' intent to create an obligation in the nature
of support" that survives bankruptcy, the Bloomberg report
related.
About Samuel Wyly
Samuel Wyly filed for Chapter 11 bankruptcy protection (Bankr.
N.D.
Tex. Case No. 14-35043) on Oct. 19, 2014, weeks after a judge
ordered him to pay several hundred million dollars in a civil
fraud
case. In September, a federal judge ordered Mr. Wyly and the
estate of his deceased brother to pay more than $300 million in
sanctions after they were found guilty of committing civil fraud
to
hide stock sales and nab millions of dollars in profits.
About Caroline Wyly
Caroline Wyly is the widow of business tycoon Charles Wyly. She
and her brother-in-law Sam Wyly sought Chapter 11 bankruptcy
protection as leverage to settle a looming tax bill and a $329
million claim from the Securities and Exchange Commission. Her
bankruptcy is In re Caroline D. Wyly, 14-35074, in U.S. Bankruptcy
Court, Northern District Texas (Dallas).
SANUWAVE HEALTH: RA Capital Reports 9.9% Stake as of Dec. 31
------------------------------------------------------------
In an amended Schedule 13G filed with the U.S. Securities and
Exchange Commission, RA Capital Management, LLC and Peter
Kolchinsky disclosed that as of Dec. 31, 2014, they beneficially
owned 5,019,945 shares of common stock of SANUWAVE Health, Inc.,
which represents 9.9 percent of the shares outstanding. RA Capital
Healthcare Fund, L.P. also owned 4,216,754 shares as of that date.
A copy of the regulatory filing is available for free at
http://is.gd/TJv3lp
About SANUWAVE Health
Alpharetta, Ga.-based SANUWAVE Health, Inc., is an emerging global
regenerative medicine company focused on the development and
commercialization of noninvasive, biological response activating
devices for the repair and regeneration of tissue, musculoskeletal
and vascular structures.
SANUWAVE reported a net loss of $11.3 million in 2013, a net
loss of $6.40 million in 2012 and a net loss of $10.23 million in
2011.
The Company's balance sheet at Sept. 30, 2014, showed $5.91
million in total assets, $6.33 million in total liabilities and a
$421,511 total stockholders' deficit.
SILICON GENESIS: Section 341(a) Meeting Set for March 11
--------------------------------------------------------
The will be a meeting of creditors in the bankruptcy case of
Silicon Genesis Corporation on March 11, 2015, at 9:30 a.m. at San
Jose Room 268. Proofs of claim due by June 9, 2015.
This is the first meeting of creditors required under Section
341(a) of the Bankruptcy Code in all bankruptcy cases.
All creditors are invited, but not required, to attend. This
meeting of creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Silicon Genesis Corporation filed a Chapter 11 bankruptcy petition
(N.D. Calif. Case No. 15-50525) on Feb. 17, 2015. Theodore E. Fong
signed the petition as president and CEO. The Debtor estimated
assets of $10 million to $50 million and liabilities of $1 million
to $10 million. Kevin W. Coleman, Esq., Schnader Harrison Segal
and Lewis LLP represents the Debtor as counsel.
Judge Elaine Hammond is assigned to the case.
SITEL WORLDWIDE: S&P Lowers CCR to 'CCC+' on Weak Liquidity
-----------------------------------------------------------
Standard & Poor's Ratings Services said it lowered its corporate
credit rating on Nashville-based SITEL Worldwide Corp. to 'CCC+'
from 'B-'. The outlook is negative.
At the same time, S&P lowered its issue-level rating on the
company's senior secured credit facilities to 'CCC+' from 'B-'. The
recovery rating remains '3' and indicates S&P's expectation of
meaningful (50% to 70%) recovery in the event of payment default.
Additionally, S&P lowered its issue-level rating on the company's
senior unsecured notes to 'CCC' from 'CCC+'. The recovery rating
remains '5' and indicates S&P's expectation of modest (10% to 30%)
recovery in the event of a payment default.
"We base our downgrade of SITEL on the company's ongoing negative
free cash flow, deterioration in liquidity, and continued tight
covenant headroom," said Standard & Poor's credit analyst Kenneth
Fleming.
For the year ended Dec. 31, 2014, SITEL's cash flow from operations
was negative $45 million and the firm spent $35 million in capital
expenditure, up from $31 million in 2013. The company ended the
year with $9 million in cash on the balance sheet, down from $16
million at the end of the third quarter ended Sept. 30, 2014.
While the company has $27.6 million of availability remaining under
its revolving credit facilities, it drew down $31.7 million during
the fourth quarter and the facility matures in less than 12 months.
Although S&P expects the company's 12-month EBITDA to improve in
the next two quarters, overall covenant headroom is unlikely to
expand materially because of upcoming step-downs in the maximum
senior secured leverage covenant.
The ratings on SITEL are based on the company's "weak" liquidity
assessment, which was revised from "less than adequate". The
"weak" business risk profile assessment reflects SITEL's mid-tier
position in a highly competitive, fragmented market with low
barriers to entry, weak and volatile free cash flow, and below
average profitability compared to that of its peers in the software
and services industry.
The negative outlook reflects the company's ongoing negative free
cash flow, weakened liquidity position, and continued tight
covenant cushion.
S&P would consider a downgrade if the company does not reverse
negative free cash flow in the next year, or if its current minimal
covenant cushion does not appear to be sustainable in light of an
upcoming covenant stepdown.
S&P would consider revising the outlook to stable or raising the
rating if continued improvement in operating performance enables
the company to generate positive free cash flow on a sustained
basis and positions the company to refinance its revolver or if it
receives further support from its parent.
SOUTHCROSS ENERGY: S&P Affirms B CCR & Alters Outlook to Negative
-----------------------------------------------------------------
Standard & Poor's Ratings Services revised its rating outlook on
Southcross Energy Partners L.P. to negative from stable and
affirmed its 'B' corporate credit rating on the company. S&P also
affirmed its 'B' issue ratings, with '3' recovery ratings, on the
company's senior secured term loan and revolving credit facility.
S&P's recovery expectations are in the upper half of the 50% to 70%
range.
The rating action reflects S&P's revised expectations for
Southcross' near-term credit measures following
slower-than-expected growth. EBITDA growth has lagged initial
expectations mainly due to challenges brought about by low
commodity prices. S&P now expects leverage to be above 5x through
much of 2015 and possibly into 2016, which is worse than S&P's
original expectations. In addition, S&P now assess the company's
liquidity as "less than adequate" because it believes the company
may have less than 15% covenant headroom over the next year and
could have difficulty complying with its leverage covenant in the
future if market conditions do not improve.
The negative outlook reflects S&P's expectation that Southcross
will have weaker credit measures due to slower-than-expected
growth. S&P now expects leverage to be above 5x through much of
2015, which it considers high for the rating. S&P projects that
financial measures will improve as the company increases its scale,
which S&P believes could take another 12 to 24 months.
S&P could lower the ratings on the partnership if it believes
leverage will remain above 5x beyond 2015. S&P could also lower
the rating if it expects the partnership to have problems in
continually meeting its financial covenant.
S&P would consider revising the outlook to stable if Southcross can
attain financial leverage below 5x while maintaining adequate
liquidity.
STOCKTON, CA: Plans to Exit Bankruptcy Today
--------------------------------------------
Katy Stech, writing for Daily Bankruptcy Review, reported that the
city of Stockton, Calif., will leave bankruptcy protection today,
Feb. 25, bringing to close years of cost-cutting efforts that
affected bondholders, taxpayers and its retired employees.
According to the report, Stockton leaders said that the
300,000-resident city will leave Chapter 9 protection -- the type
of bankruptcy used by struggling municipalities -- on much sturdier
financial ground. City manager Kurt Wilson said that the milestone
will enable the city, which was hit hard by the housing crash, to
move "forward toward recovery," the Journal cited.
As previously reported by The Troubled Company Reporter, Chief
Bankruptcy Judge Christopher N. Klein, in a Feb. 4 opinion, found
that Stockton's plan of adjustment of debts is feasible and is in
the best interests of creditors and resolved the single objection
to confirmation raised by Franklin Templeton Investments.
"Although pensions may, as a matter of law, be modified by way of
a
chapter 9 plan of adjustment and although a CalPERS pension
serving
contract may be rejected without fear of an enforceable
termination
lien, the City's choice to achieve savings in total compensation
by
negotiating salary and benefit adjustments rather than pension
modification is appropriate. Total compensation, of which pensions
are a component, has been reduced. Indeed, the City's employees
and
retirees have surrendered more value in this chapter 9 case than
the capital markets creditors," Judge Klein said.
A copy of Judge Klein's Feb. 4, 2015 Opinion regarding
confirmation
and the status of CalPers is available at http://bit.ly/1ERCRWr
from Leagle.com. The opinion supplements the Court's oral rulings
rendered in open court on Oct. 1 and 30, 2014.
About Stockton, Calif.
The City of Stockton, California, filed a Chapter 9 petition
(Bankr. E.D. Cal. Case No. 12-32118) in Sacramento on June 28,
2012, becoming the largest city to seek creditor protection in
U.S. history. The city was forced to file for bankruptcy after
talks with bondholders and labor unions failed. Stockton
estimated more than $1 billion in assets and in excess of
$500 million in liabilities.
The city, with a population of about 300,000, identified the
California Public Employees Retirement System as the largest
unsecured creditor with a claim of $147.5 million for unfunded
pension costs. In second place is Wells Fargo Bank NA as trustee
for $124.3 million in pension obligation bonds. The list of
largest creditors includes $119.2 million owing on four other
series of bonds.
The city is being represented by Marc A. Levinson, Esq., and John
W. Killeen, Esq., at Orrick, Herrington & Sutcliffe LLP. The
petition was signed by Robert Deis, city manager.
Mr. Levinson also represented the city of Vallejo, Cal. in its
2008 bankruptcy. Vallejo filed for protection under Chapter 9
(Bankr. E.D. Cal. Case No. 08-26813) on May 23, 2008, estimating
$500 million to $1 billion in assets and $100 million to $500
million in debts in its petition. In August 2011, Vallejo was
given green light to exit the municipal reorganization. The
Vallejo Chapter 9 plan restructures $50 million of publicly held
debt secured by leases on public buildings. Although the Plan
doesn't affect pensions, it adjusts the claims and benefits of
current and former city employees. Bankruptcy Judge Michael
McManus released Vallejo from bankruptcy on Nov. 1, 2011.
The bankruptcy judge on April 1, 2013, ruled that the city of
Stockton is eligible for municipal bankruptcy in Chapter 9.
Judge Klein, in late October 2014, confirmed the debt-adjustment
plan by the city of Stockton, rejecting arguments that it unfairly
discriminated among creditors by chopping a mutual fund's recovery
to near zero while shielding city retirees from any impairment at
all.
* * *
The Troubled Company Reporter, on Sep. 26, 2014, reported that
Moody's Investors Service has affirmed the long-term ratings of
the city of Stockton's (CA) water and sewer enterprises' debts at
Ba1. Moody's have also changed the outlook on the city's water
bond rating to developing from stable, while the developing
outlook on the sewer system's rating remains the same.
The TCR, on Nov. 10, 2014, reported that Moody's Investors Service
has upgraded to Ba3 from Caa3 the City of Stockton's (CA) series
2006 lease revenue bonds and affirmed the city's 2007 pension
obligation at Ca. Moody's have removed the developing outlook from
the Series 2006 bonds and Moody's have removed the negative
outlook from the Series 2007 bonds.
The TCR, on Nov. 14, 2014, reported that Standard & Poor's Ratings
Services raised its long-term rating and underlying rating (SPUR)
to 'B-' from 'CCC' on the Stockton Public Financing Authority,
Calif.'s series 2003A and 2003B certificates of participation
(COPs) and its SPUR to 'B-' from 'CCC' on the authority's series
2006A lease revenue refunding bonds. Standard & Poor's also
affirmed its 'CC' SPUR on Stockton Redevelopment Agency's series
2004 (arena project) revenue bonds. All series are appropriation
obligations of Stockton. The outlook on the series 2003A and
2003B COP long-term rating and SPUR and on the 2006A lease revenue
refunding bond SPUR is stable, and the outlook on the series 2004
revenue bond rating (arena project) is negative.
TRANSGENOMIC INC: White Pine Reports 5.5% Stake
-----------------------------------------------
White Pine Capital, LLC, beneficially owned 403,650 shares of
common stock of Transgenomic, Inc., which represents 5.49 percent
of the shares outstanding, a copy of the regulatory filing is
available for free at http://is.gd/uydQZ9
About Transgenomic
Transgenomic, Inc. -- http://www.transgenomic.com/-- is a global
biotechnology company advancing personalized medicine in
cardiology, oncology, and inherited diseases through its
proprietary molecular technologies and world-class clinical and
research services. The Company is a global leader in cardiac
genetic testing with a family of innovative products, including
its C-GAAP test, designed to detect gene mutations which indicate
cardiac disorders, or which can lead to serious adverse events.
Transgenomic has three complementary business divisions:
Transgenomic Clinical Laboratories, which specializes in molecular
diagnostics for cardiology, oncology, neurology, and mitochondrial
disorders; Transgenomic Pharmacogenomic Services, a contract
research laboratory that specializes in supporting all phases of
pre-clinical and clinical trials for oncology drugs in
development; and Transgenomic Diagnostic Tools, which produces
equipment, reagents, and other consumables that empower clinical
and research applications in molecular testing and cytogenetics.
Transgenomic believes there is significant opportunity for
continued growth across all three businesses by leveraging their
synergistic capabilities, technologies, and expertise. The
Company actively develops and acquires new technology and other
intellectual property that strengthens its leadership in
personalized medicine.
The Company reported a net loss available to common stockholders
of $16.7 million in 2013, a net loss available to common
stockholders of $8.98 million in 2012 and a net loss available to
common stockholders of $10.8 million in 2011.
The Company's balance sheet at Sept. 30, 2014, showed $30.8
million in total assets, $20.6 million in total liabilities and
$10.2 million in stockholders' equity.
TURNER GRAIN: Committee Can Hire Lueken Dilks, Wooten as Counsel
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Arkansas
granted the Official Committee of Unsecured Creditors of Turner
Grain Merchandising Inc. authority to retain Lyndsey D. Dilks,
Esq., of Lueken Dilks Law Firm, and Nick Wooten, Esq., of Nicholas
Wooten LLC as its co-counsel.
As reported in the Feb. 11, 2015 edition of the Troubled Company
Reporter, the services of Lyndsey Dilks, Esq. and Nick Wooten, Esq.
will be paid at an hourly rate of $295. Paralegal Services is
tagged at $105 per hour.
About Turner Grain
Turner Grain Merchandising, Inc., sought bankruptcy protection
(Bankr. E.D. Ark. Case No. 14-bk-15687) in Helena, Arkansas, on
Oct. 23, 2014. Kevin P. Keech, the court-appointed receiver of
the
Debtor, sought and obtained permission to employ Keech Law Firm,
P.A. as attorneys. The Debtor listed $13.77 million in total
assets, and $24.84 million in total liabilities.
The U.S. Trustee for Region 13 appointed three creditors of Turner
Grain Merchandising Inc., to serve on the official committee of
unsecured creditors.
UNI-PIXEL INC: Shareholder Suit Settlement Hearing on April 13
--------------------------------------------------------------
The District Court of Harris County, Texas, has granted preliminary
approval of a settlement in a consolidated shareholder derivative
lawsuit captioned In re Uni-Pixel, Inc., Shareholder Derivative
Litigation (Cause No. 2014-08251), according to a document filed
with the Securities and Exchange Commission.
The Stipulation of Settlement, dated Dec. 22, 2014, was made and
entered into by and among the following Settling Parties, by and
through their respective counsel of record:
(i) Petitioners Jason F. Gerzsenyi and Luis Lim, individually
and derivatively on behalf of nominal defendant Uni-Pixel,
Inc.;
(ii) Reed J. Killion, Jeffrey W. Tomz, Robert J. Petcavich,
Daniel K. Van Ostrand, Seong S. Shin, Bernard T. Marren,
Carl J. Yankowski, Bruce I. Berkoff, Ross A. Young, William
Wayne Patterson, and Anthony J. LeVecchio; and
(iii) nominal defendant Uni-Pixel.
The court has also scheduled a settlement hearing to occur on April
13, 2015, at 11:00 a.m., before the judge presiding over the 165th
Court at the Harris County Civil Courthouse, 201 Caroline, 12th
Floor, Houston, Texas 77002, or at such a date and time as the
Court may direct without further notice.
On Feb. 19, 2014, and Feb. 21, 2014, petitioners Gerzsenyi and Lim
filed their respective shareholder derivative petitions in the
District Court of Harris County, Texas, on behalf of Uni-Pixel and
against the Individual Defendants. On April 16, 2014, the Court
entered an order consolidating the actions as In re Uni-Pixel,
Inc., Shareholder Derivative Litigation, Lead Cause No.
2014-08251/Court: 165 (Tx. Dist. Ct.-Harris Cnty.). Then, on May
12, 2014, the Court entered an order appointing Johnson & Weaver,
LLP as lead counsel and The Wamer Law Firm as Liaison Counsel for
the Petitioners.
On Sept. 9, 2014, the Petitioners filed their consolidated
shareholder derivative petition which alleged causes of action for
breach of fiduciary duty, waste of corporate assets, breach of
fiduciary duty for insider selling and misappropriation of
information, unjust enrichment, and aiding and abetting fiduciary
violations. The Petitioners claimed, among other things, that the
Individual Defendants consciously made or failed to correct
materially false and misleading statements about Uni-Pixel's core
product, UniBoss, specifically with respect to:
(1) the "worldwide commercialization" of UniBoss which was
supposed to lead to both revenue and earnings in 2013;
(2) Uni-Pixel's ability to quickly ramp up UniBoss production
to 60,000 units by the end of April 2013, and then even
more rapidly after that point; and
(3) the standardization of the production process for UniBoss
and the ability for that process to support shipments for
products to be on store shelves in either June 2013 or
September 2013.
The Consolidated Petition also alleges that certain of the
Individual Defendants sold shares of their own stock while in
possession of material undisclosed negative information. The
Defendants have denied and continue to deny each and all of the
claims and contentions alleged by the Petitioners in the Action.
The Petitioners believe that the Action has substantial merit, and
their entry into the Stipulation is not intended to be and will not
be construed as an admission or concession concerning the relative
strength or merit of the claims alleged in the Action.
However, Petitioners and Petitioners' Counsel recognize and
acknowledge the significant risk, expense, and length of continued
proceedings necessary to prosecute the Action against the
Individual Defendants through trial and through possible appeals.
Petitioners' Counsel also have taken into account, inter alia, the
Company's current financial position and the uncertain outcome and
the risk of any litigation, especially in complex cases such as the
Action, as well as the difficulties and delays inherent in such
litigation. Petitioners' Counsel are also mindful of the inherent
problems of establishing demand futility at trial, and the possible
defenses to the claims alleged in the Action.
The Individual Defendants have denied and continue to deny that
they have committed, threatened, or attempted to commit, any
violations of law, or breached any duty owed to Petitioners,
Uni-Pixel, or its shareholders. The Individual Defendants and
Uni-Pixel are entering into the Settlement because it will
eliminate the uncertainty, distraction, disruption, burden, risk,
and expense of further litigation. Further, the Individual
Defendants and Uni-Pixel acknowledge that the Settlement confers
substantial benefits on Uni-Pixel and is fair, reasonable,
adequate, and in the best interests of Uni-Pixel and its
shareholders.
The Notice of Settlement and Stipulation of Settlement are
available for free at:
http://is.gd/ZOqO5p
http://is.gd/yvFxYj
Counsel for Petitioners:
Frank J. Johnson
JOHNSON & WEAVER, LLP
110 West A Street, Suite 750
San Diego, CA 92101
Tel: (619) 230-0063
Fax: (619) 255-1856
E-mail: frankj@johnsonandweaver.com
Counsel for Defendants:
Paul R. Bessette
Michael J. Biles
KING & SPALDING, LLP
401 Congress Ave., Suite 3200
Austin, TX 78701
Telephone: (512) 457-2002
Facsimile: (512) 457-2100
E-mail: pbessette@kslaw.com
mbiles@kslaw.com
About Uni-Pixel Inc.
The Woodlands, Tex.-based Uni-Pixel, Inc. (OTC BB: UNXL)
-- http://www.unipixel.com/-- is a production stage company
delivering its Clearly Superior(TM) Performance Engineered Films
to the Lighting & Display, Solar and Flexible Electronics market
segments.
Uni-Pixel reported a net loss of $15.2 million in 2013, a net
loss of $9.01 million in 2012 and a net loss of $8.56 million in
2011.
The Company's balance sheet at Sept. 30, 2014, showed $39.4
million in total assets, $5.25 million in total liabilities and
$34.2 million in total shareholders' equity.
US COAL: Feb. 27 Hearing on Committee's Bid to Sue Lenders
----------------------------------------------------------
U.S. Bankruptcy Judge Tracey Wise is set to hold a hearing on Feb.
27 to consider the motion of U.S. Coal Corp.'s official committee
of unsecured creditors to sue Dean McAfee Holdings LLC and three
other lenders.
The motion, if granted by Judge Wise, would allow the unsecured
creditors' committee to prosecute claims against Dean McAfee, the
estate of Aubra Paul Dean, and Julia and Carl McAfee on behalf of
the coal producer.
The committee had said that based on its investigation, U.S. Coal
has "substantial claims" against the lenders, including claims to
avoid the liens asserted by the lenders on assets owned by the
company's subsidiaries, which include J.A.D. Coal Company Inc., Fox
Knob Coal Co. Inc., and Sandlick Coal Company LLC.
U.S. Coal acquired ownership of the three companies from the
lenders in 2008, according to court filings.
"The claims are valuable assets of the debtors' estates that, if
pursued, will materially increase the amounts available to pay
general unsecured claims," said the committee's lawyer, Geoffrey
Goodman, Esq., at Foley & Lardner LLP, in Chicago Illinois.
About U.S. Coal and Licking River
On May 22, 2014, an involuntary Chapter 11 petition was filed
against Licking River Mining, LLC, before the United States
Bankruptcy Court for the Eastern District of Kentucky. On May 23,
2014, an involuntary Chapter 11 petition was filed against Licking
River Resources, Inc. and Fox Knob Coal., Inc. On June 3, 2014, an
involuntary Chapter 11 petition was filed against S.M. & J.,
Inc. On June 4, 2014, an involuntary Chapter 11 petition was filed
against J.A.D. Coal Company, Inc. On June 12, 2014, the Court
entered an order for relief in each of the bankruptcy cases.
On June 10, 2014, an involuntary Chapter 11 petition was filed
against U.S. Coal Corporation. On June 27, 2014, the Court entered
an order for relief in U.S. Coal's bankruptcy case.
On Nov. 4, 2014, Harlan County Mining, LLC, Oak Hill Coal, Inc.,
Sandlick Coal Company, LLC, and U.S. Coal Marketing, LLC, filed
petitions in the United States Bankruptcy Court for the Eastern
District of Kentucky seeking relief under chapter 11 of the United
States Bankruptcy Code. The Debtors' cases have been assigned to
Chief Judge Tracey N. Wise. The Debtors are seeking to have their
cases jointly administered for procedural purposes, meaning that
upon entry of such an order all pleadings will be maintained on the
case docket for Licking River Mining, LLC, Case No. 14-10201.
U.S. Coal produces and sells thermal coal purchased primarily by
utilities and trading companies and specialty coal purchased by
various industrial customers and trading companies (known as
"stoker" coal). U.S. Coal operates through two divisions: (1) the
Licking River Division that was formed through the acquisition of
LR Mining, LRR, and S.M. & J., and Oak Hill Coal, Inc. in January
2007 for $33 million., and (2) the J.A.D. Division that was formed
through the acquisition of JAD and Fox Knob, and Sandlick Coal
Company, LLC and Harlan County Mining, LLC in April
2008 for $41 million. Both the LRR Division and the JAD Division
are located in the Central Appalachia region of eastern Kentucky.
The LRR Division has approximately 26.3 million tons of surface
reserves under lease. The JAD Division has 24.4 million tons of
surface reserves, both leased and owned real property. At present,
U.S. Coal has three surface mines in operation between the LRR
Division and JAD Division.
The Official Committee of Unsecured Creditors has tapped Barber Law
PLLC and Foley & Lardner as attorneys.
The Debtors are represented by Amelia Martin Adams, Esq., and Laura
Day DelCotto, Esq. of Delcotto Law Group PLLC; and Dennis J.
Drebsky, Esq., and Christopher M. Desiderio, Esq., of Nixon Peabody
LLP.
UTEX INDUSTRIES: Moody's Affirms 'B3' CFR, Outlook Negative
-----------------------------------------------------------
Moody's Investors Service affirmed the ratings, including the B3
Corporate Family Rating and B3-PD probability of default rating, of
UTEX Industries, Inc. The rating outlook remains negative.
Issuer: UTEX Industries, Inc.
The following ratings were affirmed:
-- Corporate Family Rating, affirmed at B3
-- Probability of Default Rating, affirmed at B3-PD
-- $50 million senior secured first lien revolving facility
due 2019 at B2 (LGD3)
-- $475 million senior secured first lien term loan due 2021
at B2 (LGD3)
-- $200 million senior secured second lien term loan due 2022
at Caa2 (LGD5)
-- Rating outlook, Negative
The B3 corporate family rating reflects UTEX's small size, a high
degree of financial leverage, an aggressive financial policy, and
the company's heavy exposure to the cyclical oil and gas market
which is currently undergoing a major downturn. The rating
benefits from a demonstrated track record of earnings growth,
strong free cash flow generating capabilities, and a good liquidity
profile. The rating is further supported by the customized and
consumable nature of many of the company's products which we
believe will partially mitigate on-going earnings pressure
resulting for the downturn in UTEX's key end markets.
The negative outlook reflects our belief that the recent decline in
crude oil prices will result in an across-the-board weakening of
UTEX's credit metrics. Over the next four quarters, earnings are
anticipated to decline by 20-25% which will lead to a marked
increase in financial leverage with debt-to-EBITDA expected to
exceed 7.0x as compared to 5.7x as of December 2014. The earnings
decline is tempered by expectations that UTEX will maintain a good
liquidity profile with positive free cash flow and solid coverage
metrics with EBITDA-to-interest remaining comfortably above 2.0x.
The relatively low price points and customized nature of many of
the company's products also support the rating and should help
partially mitigate the inevitable OEM pricing pressure that UTEX
and its peers will experience over the coming quarters.
The rating could be downgraded if UTEX's liquidity profile were to
weaken such that free cash flow levels were to weaken materially,
or if the company became reliant on its revolving credit facility,
or if leverage levels were to remain above 7.0x on a sustained
basis.
A ratings upgrade is unlikely in the near-term given expectations
that the low oil price environment will result in a meaningful
weakening of UTEX's earning profile and credit metrics. UTEX's
small size and scale also act as a ratings constraint. The ratings
could be positioned for an upgrade if leverage were to decrease and
be sustained below 4.5 times and if free cash flow to debt were to
remain consistently in the high-single digits range.
The B2 (LGD3) rating and LGD assessment on the 1st Lien secured
credit facility (comprised of a revolver and term loan) is one
notch above the CFR and reflects the facility's first lien position
in the priority of claim waterfall as well as $200 million of
junior capital support from the 2nd Lien facility.
The Caa2 (LGD5) rating and LGD assessment on the 2nd Lien Term Loan
incorporates its subordination to UTEX's 1st lien debt as well as
its size relative to the company's overall liability structure.
The principal methodology used in these ratings was Global Oilfield
Services Industry Rating Methodology published in December 2014.
Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.
UTEX Industries, Inc., headquartered in Houston, Texas, is a
designer and manufacturer of highly engineered specialty sealing
and down-hole products primarily for the oil and gas industry. Key
products include well service packings, custom tailored products,
specialty valves, mining and oilfield products and spring energized
seals. UTEX was acquired by affiliates of Riverstone Holdings LLC
in April 2013.
VALEANT PHARMACEUTICALS: Moody's Affirms Ba3 Corp. Family Rating
----------------------------------------------------------------
Moody's Investors Service affirmed the ratings of Valeant
Pharmaceuticals International, Inc. including the Ba3 corporate
family rating, Ba3-PD probability of default rating, Ba1 senior
secured ratings, and B1 senior unsecured ratings. At the same
time, Moody's lowered the speculative grade liquidity (SGL) rating
to SGL-2 from SGL-1. The outlook remains positive.
This rating action follows the announcement that Valeant has
entered into a definitive agreement to acquire Salix
Pharmaceuticals, Ltd ("Salix") for approximately $14.5 billion
including debt.
Rating Affirmations:
Valeant Pharmaceuticals International, Inc:
-- Ba3 corporate family rating
-- Ba3-PD probability of default rating
-- Ba1 (LGD2) senior secured term loans and revolving credit
agreement
-- B1 (LGD5) senior unsecured notes
Valeant Pharmaceuticals International
-- B1 (LGD 5) senior unsecured notes
-- The outlook on all ratings is positive.
Rating Revisions:
Valeant Pharmaceuticals International, Inc:
-- Speculative Grade Liquidity rating revised to SGL-2 from
SGL-1
The rating affirmation reflects the strategic benefits of the Salix
acquisition, which include a leading gastroenterology business,
good underlying growth in Xifaxan, Apriso and Uceris, and improved
scale and diversity for Valeant. The rating affirmation also
reflects the strong fundamentals of Valeant's own business lines
including good organic growth, limited patent risk, and high
operating margins. Despite an increase in debt/EBITDA to over 6
times, Valeant's strong free cash flow will facilitate rapid
deleveraging. That said, Moody's feels that Salix's EBITDA growth
is uncertain due to factors that include excess wholesaler
inventory, the timing of an approval of Xifaxan in irritable bowel
syndrome (IBS), and the rate of market acceptance once launched.
Valeant's Ba3 Corporate Family Rating reflects its medium albeit
growing scale in the global pharmaceutical industry, its strong
diversity, its high profit margins, and its good cash flow. The
ratings are also supported by low exposure to patent cliff risks,
good near-term organic growth, and a successful acquisition track
record. The combination of Valeant and Salix will result in a
revenue base of over $10 billion. However, the rating also
reflects the risks associated with an aggressive acquisition
strategy, including moderately high financial leverage, integration
risks, rapid capital structure changes, and reliance on cost
synergies. In addition, while 2015 organic growth looks solid for
Valeant, strong organic growth over a multi-year period has yet to
be established given the company's high reliance on acquisitions
for growth.
Valeant's liquidity will remain good, with annual free cash flow of
more than $1 billion and a $1.5 billion revolving credit facility.
However, in the quarters following the completion of the Salix
acquisition, Moody's expects tighter covenant cushions with respect
to the senior secured leverage ratio until the combined company
realizes EBITDA growth and simultaneously reduces debt. For this
reason Moody's is lowering Valeant's Speculative Grade Liquidity
Rating to SGL-2 from SGL-1.
The rating outlook is positive reflecting Valeant's increased size
and diversity following the acquisition, and Moody's expectations
for strong organic growth and improving free cash flow. Valeant's
ratings could be upgraded if Moody's believes debt/EBITDA will be
sustained around 4.0 times while maintaining good organic growth.
Conversely, the ratings could be downgraded if Moody's believes
debt/EBITDA will be sustained above 5.0 times or if other risk
factors emerge, such as low organic growth, pipeline deterioration,
or litigation or regulatory compliance issues.
The principal methodology used in these ratings was Global
Pharmaceutical Industry published in December 2012. Other
methodologies used include Loss Given Default for Speculative-Grade
Non-Financial Companies in the U.S., Canada and EMEA published in
June 2009.
Headquartered in Laval, Quebec, Valeant Pharmaceuticals
International, Inc. is a global specialty pharmaceutical company
with expertise in branded dermatology, eye health, neuroscience
products, branded generics and OTC products. Valeant reported $8.3
billion in total revenue during 2014.
VALEANT PHARMACEUTICALS: S&P Puts BB Sec. Debt Rating on Watch Pos.
-------------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'BB' rating on
Valeant Pharmaceuticals International Inc.'s senior secured debt on
CreditWatch with positive implications. S&P expects to revise the
recovery rating to '1' from '2' and to raise the issue-level rating
to 'BB+', from 'BB' when this transaction is consummated.
At the same time, S&P affirmed its 'BB-' corporate credit rating on
the company. The outlook is stable.
"This transaction is consistent with our expectations for Valeant
to intermittently increase leverage above 5x, as part of its
aggressive acquisition-driven growth strategy," said Standard &
Poor's credit analyst David Kaplan.
The increase in scale from the planned acquisition of Salix is an
incremental positive but not enough to influence S&P's satisfactory
business risk assessment. S&P views the effect on diversification
as marginally negative as the expansion into a new therapeutic area
is more than offset by a significant increase in the concentration
of revenues within a single product (Xifaxan). While the increase
in leverage in 2015 is exacerbated by inventory-related issues at
Salix, S&P's financial risk assessment focuses on the normalized
earnings potential and the company's ability to reduce leverage to
below 5x for 2016.
S&P's 'BB' senior secured issue-level rating is on CreditWatch with
positive implications. S&P believes the recovery prospects for
this debt are helped by the inclusion of certain additional assets,
including the Salix assets that will now serve as collateral. S&P
expects that about 95% of the company's EBITDA will be at
guaranteeing entities (compared with S&P's previous assumption of
about 70% following the Bausch & Lomb transaction). These recovery
prospects are also helped by S&P's expectation that pro forma for
the transaction secured debt will be a smaller proportion of the
total debt.
S&P expects to revise the recovery rating to '1' from '2' and to
raise the issue-level rating to 'BB+' from 'BB' when this
transaction is consummated.
S&P's stable rating outlook on its corporate credit rating on
Valeant primarily reflects S&P's expectation for stable performance
from its existing businesses, and that the company will manage its
aggressive acquisition-driven growth strategy such that leverage
will generally remain between 4x and 5x after adjusting for
acquired EBITDA.
S&P could lower its rating if Valeant increases the pace of
acquisitions such that S&P expects adjusted leverage to be
sustained above 5x. S&P could also lower its rating if organic
revenue or EBITDA starts to decline materially, which could
indicate that cost-cutting efforts are undermining the
sustainability of the businesses.
S&P could consider a higher rating in the unlikely event that the
company changes course to pursue a less-aggressive financial
policy, including either slowing the pace of acquisitions or
adopting a policy to maintain adjusted debt leverage below 4x.
VANGUARD SYNFUELS: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Vanguard Synfuels LLC
429 Murray St., Suite 700
Alexandria, LA 71301
Case No.: 15-80200
Chapter 11 Petition Date: February 23, 2015
Court: United States Bankruptcy Court
Western District of Louisiana (Alexandria)
Judge: Hon. Henley A. Hunter
Debtor's Counsel: Ryan James Richmond, Esq.
STEWART ROBBINS BROWN
620 Florida St. Suite 100
Baton Rouge, LA 70801
Tel: (225) 231-9998
Fax: (225) 709-9467
Email: rrichmond@stewartrobbins.com
- and -
William S. Robbins, Esq.
STEWART ROBBINS & BROWN, LLC
620 Florida Street, Suite 100
P.O.Box 2348
Baton Rouge, LA 70821-2348
Tel: (225) 231-9998
Fax: (225) 709-9467
Email: wrobbins@stewartrobbins.com
- and -
Paul Douglas Stewart, Jr., Esq.
STEWART ROBBINS & BROWN, LLC
620 Florida Street, Suite 100
P.O. Box 2348
Baton Rouge, LA 70821-2348
Tel: (225) 231-9998
Fax: (225) 709-9467
Email: dstewart@stewartrobbins.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $10 million to $50 million
The petition was signed by Darrell Dubroc, manager.
A list of the Debtor's 20 largest unsecured creditors is available
for free at http://bankrupt.com/misc/lawb15-80200.pdf
VERISGOLD CORP: Obtains Extension of CCAA Stay Period
-----------------------------------------------------
VerisGold Corp. on Feb. 23 disclosed that it has obtained an order
from the Supreme Court of British Columbia as of February 23, 2015
extending the period of the Court-ordered stay of proceeding
against Veris and its subsidiaries under the Companies' Creditors
Arrangement Act ("CCAA") up to and including March 31, 2015.
The sales process deadline for a potential bidder to deliver a
qualified bid, as defined in the Sales and Solicitations Procedures
("SSP") included in the Sales Process Order and subsequently
extended, was January 30, 2015. No qualified bids were received by
the deadline, however any subsequent bids that may advance towards
a potential offer will be considered even though the SSP has
effectively come to an end.
The Company has been operating under the protection of the CCAA and
the U.S. Bankruptcy Code since June 9, 2014.
All inquiries regarding Veris' CCAA proceedings should be directed
to the Monitor, Ernst & Young, Inc.: Mr. Rocky Ho at (604)
891-8425. Information about the CCAA proceedings, including copies
of all court orders and the Monitor's reports, is available on the
Monitor's Web site: http:www.ey.com/ca/verisgold/
About Veris Gold Corp.
Veris Gold Corp. is a growing mid-tier North American gold producer
in the business of developing and operating gold mines in
geo-politically stable jurisdictions. The Company's primary assets
are the permitted and operating Jerritt Canyon processing plant and
gold mines located 50 miles north of Elko, Nevada, USA. The
Company's primary focus is on the re-development of the Jerritt
Canyon mining and processing plant. The Company also holds a
portfolio of precious metals properties in British Columbia and the
Yukon Territory, Canada, including the Ketza River Property.
VERITEQ CORP: John Stetson Reports 8.3% Stake as of Feb. 19
-----------------------------------------------------------
In a Schedule 13G filed with the U.S. Securities and Exchange
Commission, John Stetson and HS Contrarian Investments, LLC
disclosed that as of Feb. 19, 2015, they beneficially owned
100,000 shares of common stock of Veriteq Corporation, which
represents 8.3% (based on 1,208,000 shares of common stock
outstanding as of Feb. 17, 2015). A full-text copy of the
regulatory filing is available at http://is.gd/u5SpRn
About VeriTeQ
VeriTeQ (formerly known as Digital Angel Corporation) develops
innovative, proprietary RFID technologies for implantable medical
device identification, and dosimeter technologies for use in
radiation therapy treatment. VeriTeQ --
http://www.veriteqcorp.com/-- offers the world's first FDA
cleared RFID microchip technology that can be used to identify
implantable medical devices, in vivo, on demand, at the point of
care. VeriTeQ's dosimeters provide patient safety mechanisms
while measuring and recording the dose of radiation delivered to a
patient in real time.
Veriteq Corporation reported a net loss of $15.07 million on
$18,000 of sales for the year ended Dec. 31, 2013, as compared
with a net loss of $1.60 million on $0 of sales for the year ended
Dec. 31, 2012.
As of Sept. 30, 2014, the Company had $6.77 million in total
assets, $14 million in total liabilities, and a $7.18 million
stockholders' deficit.
EisnerAmper LLP, in New York, New York, issued a "going concern"
qualification on the consolidated financial statements for the
year ended Dec. 31, 2013. The independent auditors noted that
the Company has incurred recurring net losses, and at Dec. 31,
2013, had negative working capital and a stockholders' deficit.
These events and conditions raise substantial doubt about the
Company's ability to continue as a going concern.
VIGGLE INC: Adage Capital Reports Less Than 1% Stake as of Dec. 31
------------------------------------------------------------------
Adage Capital Partners, L.P., et al., disclosed in an amended
Schedule 13G filed with the U.S. Securities and Exchange Commission
that as of Dec. 31, 2014, they beneficially owned 89,521 shares of
common stock of Viggle Inc. (f/k/a Function(x) Inc.), which
represents 0.56 percent of the shares outstanding.
A copy of the regulatory filing is available for free at:
http://is.gd/p00wH7
About Viggle
New York City-based Viggle Inc. is a loyalty marketing company.
The Company has developed a loyalty program for television that
gives people real rewards for checking into the television shows
they are watching on most mobile operating system. Viggle users
can redeem their points in the app's rewards catalog for items
such as movie tickets, music, or gift cards.
Viggle reported a net loss of $68.4 million on $18 million of
revenues for the year ended June 30, 2014, compared with a net
loss of $91.4 million on $13.9 million of revenues for the year
ended June 30, 2013.
As of Dec. 31, 2014, the Company had $72.1 million in total assets,
$51.02 million in total liabilities, $3.75 million in series C
convertible redeemable preferred stock, and $17.4 million in total
stockholders' equity.
BDO USA, LLP, in New York, 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 suffered recurring losses from operations and at June 30,
2014, has a deficiency in working capital that raises substantial
doubt about its ability to continue as a going concern.
VIGGLE INC: DAG Ventures No Longer a Shareholder as of Dec. 31
--------------------------------------------------------------
DAG Ventures III-QP, L.P., DAG Ventures GP Fund III, LLC,
DAG Ventures III, L.P., DAG Ventures III-A, LLC, DAG Ventures
Management III, LLC, Thomas Goodrich and John J. Cadeddu disclosed
in a document filed with the Securities and Exchange Commission
that as of Dec. 31, 2014, the have ceased to own shares of common
stock of Viggle Inc. A copy of the regulatory filing is available
for free at http://is.gd/5H169W
About Viggle
New York City-based Viggle Inc. is a loyalty marketing company.
The Company has developed a loyalty program for television that
gives people real rewards for checking into the television shows
they are watching on most mobile operating system. Viggle users
can redeem their points in the app's rewards catalog for items
such as movie tickets, music, or gift cards.
Viggle reported a net loss of $68.4 million on $18 million of
revenues for the year ended June 30, 2014, compared with a net
loss of $91.4 million on $13.9 million of revenues for the year
ended June 30, 2013.
As of Dec. 31, 2014, the Company had $72.1 million in total
assets,
$51.02 million in total liabilities, $3.75 million in series C
convertible redeemable preferred stock, and $17.4 million in total
stockholders' equity.
BDO USA, LLP, in New York, 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 suffered recurring losses from operations and at June 30,
2014, has a deficiency in working capital that raises substantial
doubt about its ability to continue as a going concern.
VIGGLE INC: Gets $750,000 New Loan From Chairman and CEO
--------------------------------------------------------
Robert F.X. Sillerman, the executive chairman and chief executive
officer of Viggle Inc. made an unsecured demand loan to the Company
totaling $750,000, bearing interest at the rate of 12% per annum on
Feb. 13, 2015, according to a document filed with the Securities
and Exchange Commission.
Mr. Sillerman made an unsecured demand loan to the Company of
$2,000,000 on Dec. 19, 2014. Mr. Sillerman made an unsecured
demand loan to the Company of $2,000,000 on Jan. 14, 2015. Mr.
Sillerman made an unsecured demand loan to the Company of
$2,000,000 on Jan. 30, 2015. The total principal amount of the
loans is now $6,750,000.
The Company intends to use the proceeds from the New Loan to fund
working capital requirements and for general corporate purposes.
Because Mr. Sillerman is a director, executive officer and greater
than 10% stockholder of the Company, a majority of the Company's
independent directors approved the transaction.
About Viggle
New York City-based Viggle Inc. is a loyalty marketing company.
The Company has developed a loyalty program for television that
gives people real rewards for checking into the television shows
they are watching on most mobile operating system. Viggle users
can redeem their points in the app's rewards catalog for items
such as movie tickets, music, or gift cards.
Viggle reported a net loss of $68.4 million on $18 million of
revenues for the year ended June 30, 2014, compared with a net
loss of $91.4 million on $13.9 million of revenues for the year
ended June 30, 2013.
As of Dec. 31, 2014, the Company had $72.1 million in total assets,
$51.02 million in total liabilities, $3.75 million in series C
convertible redeemable preferred stock, and $17.4 million in total
stockholders' equity.
BDO USA, LLP, in New York, 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 suffered recurring losses from operations and at June 30,
2014, has a deficiency in working capital that raises substantial
doubt about its ability to continue as a going concern.
VISCOUNT SYSTEMS: Amends Series A Certificate of Designation
------------------------------------------------------------
Viscount Systems, Inc. filed on Jan. 26, 2015, an amendment to the
Certificate of Designation, Preferences and Rights of the Series A
Convertible Redeemable Preferred Stock amending certain provisions
of the preferred stock designated as "Series A Convertible
Redeemable Preferred Stock". Pursuant to the Amended Certificate
of Designation, provisions regarding anti-dilution were amended.
The Amended Certificate of Designation was approved by the
requisite holders of A Shares. The Amended Certificate of
Designation became effective upon filing with the Nevada Secretary
of State. The Amended Certificate of Designation, as filed with
the Securities and Exchange Commission, is available for free at:
http://is.gd/vgllE9
About Viscount Systems
Burnaby, Canada-based Viscount Systems, Inc., is a manufacturer,
developer and service provider of access control security
products.
The Company's bank credit facility was suspended on December 30,
2011 due to the bank's assessment of the Company's financial
position. Management has determined that the Company will need to
raise a minimum of C$500,000 by way of new debt or equity
financing to continue normal operations for the next twelve
months. Management has been actively seeking new investors and
developing customer relationships, however a financing arrangement
has not yet completed. Short-term loan financing is anticipated
from related parties, however there is no certainty that loans
will be available when required. These factors raise substantial
doubt about the ability of the Company to continue operations as a
going concern.
Dale Matheson Carr-Hilton LaBonte LLP expressed substantial doubt
about the Company's ability to continue as a going concern, citing
that the Company has an accumulated deficit of C$11.7 million for
the year ended Dec. 31, 2013. The Company requires additional
funds to meet its obligations and the costs of its operations.
The Company reported a net loss of C$3.08 million on
C$4.13 million of sales in 2013, compared with a net loss of
C$2.68 million on C$3.6 million of sales in 2012.
The Company's balance sheet at Sept. 30, 2014, showed $2.14
million in total assets, $5.74 million in total liabilities and a
$3.59 million total stockholders' deficit.
WORLD SURVEILLANCE: Barbara Johnson Quits as VP Gen. Counsel
------------------------------------------------------------
Barbara M. Johnson resigned as vice president, general counsel and
secretary of World Surveillance Group Inc. effective as of
Feb. 20, 2015, for personal reasons, according to a Form 8-K filed
with the Securities and Exchange Commission.
About World Surveillance
World Surveillance Group Inc. designs, develops, markets and sells
autonomous lighter-than-air (LTA) unmanned aerial vehicles (UAVs)
capable of carrying payloads that provide persistent security
and/or wireless communication from air to ground solutions at low,
mid and high altitudes. The Company's airships, when integrated
with electronics systems and other high technology payloads, are
designed for use by government-related and commercial entities
that require real-time intelligence, surveillance and
reconnaissance or communications support for military, homeland
defense, border control, drug interdiction, natural disaster
relief and maritime missions. The Company is headquartered at the
Kennedy Space Center, in Florida.
World Surveillance reported a net loss of $3.41 million on
$559,000 of net revenues for the year ended Dec. 31, 2013, as
compared with a net loss of $3.36 million on $272,000 of net
revenues for the year ended Dec. 31, 2012.
Rosen Seymour Shapss Martin & Company LLP, in New York, issued a
"going concern" qualification on the consolidated financial
statements for the year ended Dec. 31, 2013. The independent
auditors noted that the Company has experienced significant losses
and negative cash flows, resulting in decreased capital and
increased accumulated deficits. These conditions raise
substantial doubt about its ability to continue as a going
concern.
As of Sept. 30, 2014, the Company had $6.14 million in total
assets, $17.3 million in total liabilities, all current, and a
$11.1 million total stockholders' deficit.
Bankruptcy Warning
"We have incurred substantial indebtedness and may be unable to
service our debt.
"Our total indebtedness at September 30, 2014 was $17,292,275. A
portion of such indebtedness reflects judicial judgments against
us that could result in liens being placed on our bank accounts or
assets. We are continuing to review our ability to reduce this
debt level due to the age and/or settlement of certain payables
but we may not be able to do so. This level of indebtedness
could, among other things:
* make it difficult for us to make payments on this debt and
other obligations;
* make it difficult for us to obtain future financing;
* require us to redirect significant amounts of cash from
operations to servicing the debt;
* require us to take measures such as the reduction in scale of
our operations that might hurt our future performance in
order to satisfy our debt obligations; and
* make us more vulnerable to bankruptcy or an unwanted
acquisition on terms unsatisfactory to us," the Company
stated in its quarterly report for the period ended Sept. 30,
2014.
WPCS INTERNATIONAL: Issues 1 Million Common Shares
--------------------------------------------------
WPCS International Incorporated issued 1,000,000 shares of its
common stock, par value $0.0001 per share, from Feb. 17, 2105,
through Feb. 19, 2015, in transactions that were not registered
under the Securities Act of 1933, according to a document filed
with the Securities and Exchange COmmission.
The issuances on Feb. 19, 2015, resulted in an increase in the
number of shares of Common Stock outstanding by more than 5%
compared to the number of shares of Common Stock reported
outstanding in the Current Report on Form 8K filed by the Company
with the SEC of Feb. 17, 2015. The Company has issued a total of
2,100,000 shares of Common Stock to holders of its Series F-1
Convertible Preferred Stock upon the conversion of shares of Series
F-1 Convertible Preferred Stock. The shares of Common Stock issued
upon the conversion of shares of Series F-1 Convertible Preferred
Stock were issued in reliance upon the exemption from registration
in Section 3(a)(9) of the Securities Act of 1933. As of Feb. 19,
2015, the Company has 16,013,164 shares of Common Stock
outstanding.
About WPCS International Incorporated
WPCS -- http://www.wpcs.com/-- operates in two business segments
including: (1) providing communications infrastructure contracting
services to the public services, healthcare, energy and corporate
enterprise markets worldwide; and (2) developing a Bitcoin trading
platform.
As reported by the TCR on Feb. 7, 2014, WPCS appointed Marcum LLP
as its new independent registered public accounting firm.
CohnReznick LLP resigned on Dec. 20, 2013.
WPCS International incurred a net loss attributable to common
shareholders of $11.2 million for the year ended April 30, 2014,
as compared with a net loss attributable to common shareholders of
$6.91 million for the year ended April 30, 2013. As of Oct. 31,
2014, the Company had $17.7 million in total assets, $17.3
million in total liabilities and $397,000 in total equity.
Marcum LLP, in New York, NY, issued a "going concern"
qualification on the consolidated financial statements for the
year ended April 30, 2014. The independent auditing firm
noted that the Company has incurred significant losses and needs
to raise additional funds to meet its obligations and sustain its
operations. These conditions raise substantial doubt about the
Company's ability to continue as a going concern.
[*] S&P Takes Rating Actions on 4 Midstream Energy Companies
------------------------------------------------------------
Standard & Poor's Ratings Services said that it has taken rating
actions on three U.S. gathering and processing midstream energy
companies after completing a review of the sector. The review
follows a decline and continued weakness in crude oil and natural
gas liquids (NGL) market prices and S&P's assumptions for future
prices, which it believes will result in weaker credit-protection
measures for many companies over the next 12 to 24 months.
S&P has taken rating actions on these rated gathering and
processing companies and partnerships:
-- S&P is lowering its corporate credit rating and senior
unsecured ratings on DCP Midstream LLC to 'BB' from 'BBB-'.
The outlook remains negative. S&P is also lowering its
short-term rating on the company to 'B'. The rating actions
reflect S&P's expectations that DCP Midstream LLC's
consolidated financial measures will significantly weaken
due to materially lower NGL prices. S&P projects debt to
EBITDA in excess of 8x in 2015, improving to about 6.5x in
2016 and 4.5x in 2017 (due to S&P's higher crude oil and NGL
price assumptions in later years).
-- At the same time, S&P also lowered its corporate credit
rating and senior unsecured ratings on master limited
partnership DCP Midstream Partners L.P. to 'BB' from 'BBB-'.
The outlook is negative. S&P considers the creditworthiness
of the two DCP entities to be closely tied. S&P is also
lowering its short-term rating on the partnership to 'B'.
-- S&P is revising its rating outlook on Southcross Energy
Partners L.P. to negative from stable and affirming its 'B'
corporate credit rating on the partnership. S&P is also
affirming its 'B' issue ratings and leaving the '3' recovery
rating unchanged on the partnership's term loan and
revolving credit facility. The negative outlook reflects
S&P's expectation that Southcross will have weaker financial
measures and liquidity than originally anticipated.
-- S&P affirmed the 'BB' rating on MarkWest Energy Partners
L.P. The outlook is stable. At the same time, S&P revised
its business risk profile to "satisfactory" from "fair" in
addition to the financial risk profile to "aggressive" from
"significant". The stable outlook reflects S&P's view that
MarkWest will have sufficient liquidity to fund and
successfully execute its growth spending plans in 2015.
Despite having total debt to EBITDA of about 5x in 2015, S&P
expects this number to improve to the low 4x area in 2016.
Midstream energy companies are generally less vulnerable to
commodity price swings due to stable cash flows generated from
fee-based contracts. However, S&P believes a number of gathering
and processing companies, particularly those that incur some direct
commodity price exposure from keep-whole or percent-of-proceeds
contracts, are susceptible to weaker credit measures when oil and
natural gas liquids prices are low. These companies usually manage
their commodity price exposure by employing hedges, but
arrangements typically do not extend beyond 12 to 24 months, which
limits the level of margin protection. S&P also believes most
gathering and processing companies have not hedged meaningful
natural gas liquids equity volumes due to relatively weak prices.
In addition, S&P expects overall gathering and processing volumes,
and thus cash flows, to decline as upstream companies reduce
capital spending and cut back on drilling due to lower commodity
prices.
RATINGS LIST
Ratings Lowered
To From
DCP Midstream LLC
DCP Midstream Partners L.P.
Corp credit rating BB/Negative/B BBB-//Negative/A-3
Senior unsecured BB BBB-
Commercial paper B A-3
Ratings Affirmed; Outlook Revised
Southcross Energy Partners L.P.
Corp credit rating B/Negative/-- B/Stable/--
Senior secured B
Recovery rating 3
Ratings Affirmed
MarkWest Energy Partners L.P.
Corp credit rating BB/Stable/--
Senior unsecured BB
Recovery rating 4
Rating Affirmed; Recovery Rating Assigned
DCP Midstream LLC
Junior subordinated B+
Recovery rating 6
[*] Stale Claim Doesn't Violate Fair Debt Collection Practices Act
------------------------------------------------------------------
Bill Rochelle and Sherri Toub, bankruptcy columnists for Bloomberg
News, reported that U.S. District Judge Manish S. Shah in Chicago
ruled Feb. 3, 2015, that a proof of claim which complies in form
and substance with the Bankruptcy Code and rules doesn't violate
Section 1692e of the federal Fair Debt Collection Practices Act,
although, in a footnote, the judge insinuated it's possible that a
claim based on a stale debt might violate Section 1692f.
According to the report, the case before Judge Shah involved a
credit-card debt of about $600 that was time-barred because the
last activity in the account was more than five years before
bankruptcy. The proof of claim was formally proper because, among
other things, it accurately stated the date of last activity, the
report reported.
The case is Robinson v. Ecast Settlement Corp., 14-cv-8277, U.S.
District Court, Northern District of Illinois (Chicago).
[] Kaufman, Eisenberg, Victor Bag M&A Advisor Leadership Award
--------------------------------------------------------------
The M&A Advisor on Feb. 20 disclosed that Peter S. Kaufman,
President and Head of Restructuring and Distressed M&A at Gordian
Group, Randall S. Eisenberg, Managing Director and Co-Head of the
Turnaround & Restructuring Services practice at AlixPartners, and
J. Scott Victor, Founder and Managing Director at SSG Capital
Advisors, are each recipients of the 2015 M&A Advisor Leadership
Award. Messrs. Kaufman, Eisenberg and Victor are to be honored for
their contribution to and accomplishments in our industry at the
9th Annual Turnaround Awards Gala on Monday, February 23, 2015 in
Palm Beach, FL.
A celebrated industry veteran, Peter S. Kaufman has extensive
experience advising companies, boards of directors and
shareholders, as well as buyers, sellers and governmental agencies.
In addition to his leadership of the restructuring practice at
Gordian, Mr. Kaufman co-manages Bacchus Capital Management. Mr.
Kaufman is also the co-author of two books on distressed
investment, both definitive works in the field, Distressed
Investment Banking: To the Abyss and Back, and the recently
published Equity Holders Under Siege: Strategies and Tactics for
Distressed Businesses. Most recently Peter was ranked the #1
national investment banker in financial restructuring by The Deal.
A certified turnaround professional and a certified public
accountant, Randall Eisenberg is recognized for advising senior
management teams, boards of directors, equity sponsors, and
creditor constituents in the transformation of stagnant or
underperforming companies. Mr. Eisenberg was recently inducted
into the Turnaround Management Association's Turnaround,
Restructuring and Distressed Investing Industry Hall of Fame and is
a recipient of the association's Outstanding Contribution to the
Turnaround Profession Award. Mr. Eisenberg is a fellow of both the
American College of Bankruptcy and the International Insolvency
Institute.
A nationally recognized leader in the restructuring industry for
over 30 years, J. Scott Victor has completed over 150 sales,
refinancing and restructuring transactions in North America and
Europe. Mr. Victor is a Fellow of the American College of
Bankruptcy and Co-Chair of the Investment Banking Committee of the
American Bankruptcy Institute. Mr. Victor is a member of the
Turnaround Management Association serving on the Executive
Committee and Board of Directors of TMA International as well as
Vice President of Chapter Relations.
"We are honored to present Peter S. Kaufman, Randall S. Eisenberg,
and J. Scott Victor with the M&A Advisor Leadership Award for their
contributions to the restructuring industry," stated
David Fergusson, President and Co-CEO of The M&A Advisor. "These
three individuals have and continue to set the bar for
restructuring and reorganization professionals worldwide."
The awards will be presented at a black tie Gala at the Colony
Hotel, in conjunction with the 2015 Distressed Investing Summit.
The Summit is an invitation only assembly, which brings together
200 of the industry's most active dealmakers and other key market
experts -- academics, media, government and policy makers.
Symposium delegates will engage in interactive sessions led by a
faculty of over 35 industry leaders on the key issues facing the
distressed investing and restructuring markets today.
To learn more about the 2015 Distressed Investing Summit visit:
http://is.gd/uyiXiM
About The M&A Advisor
The M&A Advisor was founded in 1998 to offer insights and
intelligence on mergers and acquisitions through the industry's
leading publication. Over the past seventeen years, the Company
has established the world's premier leadership organization of M&A,
Turnaround and Financing professionals.
[] PwC's Mandarino Bags Turnaround Consultant of the Year Award
---------------------------------------------------------------
PwC US on Feb. 24 disclosed that Perry Mandarino was recognized by
M&A Advisor for his outstanding contributions to the restructuring
industry and his clients. He accepted the "Turnaround Consultant
of the Year" award at the 9th Annual M&A Advisor Turnaround Awards
in Palm Beach, Florida on February 23.
"Regarded as a trusted advisor in the restructuring space, Perry is
best known for his excellent track record in providing clients with
strategic counsel during complex restructuring matters," said
Martyn Curragh, Advisory principal and U.S. Deals leader, PwC. "We
congratulate Perry on this well-deserved honor and are proud of the
continued recognition for our Deals professionals and their impact
on our clients and the industry."
A 25 year veteran of the restructuring industry, Mr. Mandarino
leads business recovery services for PwC's Deals business. His
team of recovery specialists advise companies on strategic
solutions and financial alternatives to improve operational
inefficiencies and preserve value during -- and prior to -- times
of crisis. Mr. Mandarino has guided over 400 companies in distress
through various out-of-court and Chapter 11 proceedings, and
specializes in complex debt restructurings and strategic planning.
"It gives us a great pleasure to recognize Perry and bestow upon
him one of our highest honors for distressed investing and
reorganization professionals," said David Fergusson, Co-CEO and
President, The M&A Advisor. "Perry represents the best of the
distressed investing and reorganization industry in 2014 and earned
this honor by standing out in a group of very impressive
candidates."
Mr. Mandarino has advised organizations across a range of
industries including retail, healthcare, real estate,
communications, business services and manufacturing. With
extensive experience in various bankruptcy and state courts, he has
also testified as an expert in matters related to financial
viability, valuation, general reorganization matters and
financing.
PwC -- http://www.pwc.com/us/deals-- helps corporate and financial
sponsors achieve their growth initiatives and optimize deals from
strategy through value capture. PwC's Deals professionals support
clients on a wide range of transactions including domestic and
cross-border acquisitions, alliances, divestitures and spin-offs,
capital events such as IPOs and debt offerings, as well as business
reorganizations.
About PwC US
PwC US -- http://www.pwc.com/US-- is a member of the PwC network
of firms, which has firms in 157 countries with more than 195,000
people. It provides assurance, tax and advisory services.
[] Thompson Hine Lawyers Among Georgia Super Lawyers List
---------------------------------------------------------
Seven lawyers from Thompson Hine LLP were included on the 2014
Georgia Super Lawyers(R) list and two were chosen as Georgia Rising
Stars. Super Lawyers magazine distinguishes the top 5 percent of
attorneys in each state in more than 70 practice areas and
recognizes those who have attained a high degree of peer
recognition and professional achievement. Rising Stars are chosen
by their peers as being among the most recognizable up-and-coming
lawyers in Georgia.
In addition, three lawyers, Tim McDonald, Russell J. Rogers and
John L. Watkins were recognized as Top 100 lawyers in Georgia for
receiving the highest point totals in the Georgia nomination and
research process.
Included in Georgia Super Lawyers:
Peter D. Coffman (Business Litigation) – Mr. Coffman, a partner
and trial lawyer, represents clients in disputes involving business
torts, commercial contracts, fiduciary obligations and creditors'
rights. He has worked extensively in the automotive, real estate,
higher education, communications and media industries.
Gary S. Freed (Business Litigation) – Mr. Freed, a partner and
trial lawyer, focuses on resolving business and ethical disputes,
appearing in state and federal courts, arbitrations and mediations
across the country. He also works with Chinese companies
conducting business in the U. S, as well as domestic companies
looking to do business in China. He handles litigation involving
intellectual property, restrictive covenants and trade secrets,
business divorce and executive employment controversies, labor and
employment, and judicial and attorney ethical issues.
John F. Isbell (Business Restructuring, Creditors' Rights &
Bankruptcy) – Mr. Isbell, a partner, represents secured lenders,
debtors/borrowers, official committees of unsecured creditors,
landlords and other parties in interest in matters including
bankruptcy cases, receivership litigation, workouts,
restructurings, and state court foreclosures and confirmation
proceedings.
Z. Ileana Martinez (Business Litigation, Product Liability
Litigation) – Ms. Martinez, a partner, focuses her practice on
complex business, commercial and mass torts, including cases
involving breach of contract and fiduciary duties, tortious
interference, trade secrets, fraud, civil conspiracy and
noncompete/nonsolicitation covenants. She serves as national,
regional and local counsel for pharmaceutical and medical device
companies and other consumer/commercial product manufacturers in
product liability litigation, including multidistrict and class
action. Ms. Martinez also advises clients on FDA and other
regulatory issues.
Tim McDonald (Labor & Employment) – Mr. McDonald, a partner,
focuses his practice on litigation and counseling related to
employment and employee benefits issues. He defends employers
against class action and individual employment claims nationally,
and advises them on employment practices and benefits issues. He
also represents fiduciaries, benefit plans and employers in
employee benefits litigation encompassing individual and class
action cases throughout the country.
Russell J. Rogers (Business Litigation) – Mr. Rogers, a partner
who focuses on commercial litigation, has extensive experience
litigating complex contract disputes in a wide variety of contexts.
He also defends clients in product liability litigation,
particularly matters involving pharmaceutical products and energy.
John L. Watkins (Business Litigation, Corporate Transactions &
Securities) – Mr. Watkins, a partner, focuses his practice on
complex commercial litigation, insurance coverage and inbound
international business transactions. He has considerable
experience advising companies in the machinery and equipment,
manufacturing, industrial construction, technology, software,
financial and energy sectors.
Included in Georgia Rising Stars:
J. Christopher Fox, II (Business Litigation) – Mr. Fox is a
partner whose practice encompasses a broad range of commercial
disputes, including contractual issues arising in the financial
services arena, matters relating to restrictive covenants and
unfair competition claims, and litigation of patent and trademark
infringement claims, as well as defense and prosecution of claims
for misappropriation of trade secrets.
Garrett A. Nail (Business Restructuring, Creditors' Rights &
Bankruptcy) – Mr. Nail, an associate, handles a variety of
bankruptcy matters, including representing secured and unsecured
creditors, lenders, Chapter 7 and Chapter 11 debtors, asset
purchasers and parties to adversary proceedings. He also has
experience in civil litigation matters, including tort, contract
and receivership cases.
About Thompson Hine LLP
Established in 1911, Thompson Hine LLP --
http://www.ThompsonHine.com-- is a full-service business law firm
with approximately 400 lawyers in 7 offices.
*********
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.
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 nation's bankruptcy courts. The list
includes links to freely downloadable images of these small-dollar
petitions in Acrobat PDF format.
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 2015. 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 202-362-8552.
*** End of Transmission ***