/raid1/www/Hosts/bankrupt/TCR_Public/150904.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Friday, September 4, 2015, Vol. 19, No. 247
Headlines
ACCELLENT INC: S&P Puts 'B' CCR on CreditWatch Positive
AFFIRMATIVE INSURANCE: Paul Zucconi Resigns From Board
ALLIED SYSTEMS: U.S. Trustee, ACE Object to Plan Confirmation
AMERICAN LIBERTY: Hi View Real Estate Apporoved as Broker
AMERICAN POWER: Matthew Steenwyk Reports 23% Stake as of Aug. 24
AMERICAN POWER: Matthew Steenwyk Reports 23% Stake as of Aug. 24
ARXX BUILDING: Files for Bankruptcy; Creditor's Meeting Sept. 16
ATLANTIC & PACIFIC: Attorneys Submit Verified Statements
ATLANTIC & PACIFIC: Elise Frejka Named as C. Privacy Ombudsman
BEAZER HOMES: Fitch Affirms 'B-' IDR, Outlook Stable
BETHEL CATHEDRAL: Voluntary Chapter 11 Case Summary
BIG SKY AUTOMATION: Case Summary & 20 Largest Unsecured Creditors
BOAZ ELDERLY: Moody's Cuts Rating on Series 1978 Bonds to 'Ba1'
BTB CORP: Must Serve Plan Documents to Banco Popular
BUNKERS INTERNATIONAL: Wants to Pay $58,601 in Healthcare Premiums
BUNKERS INTERNATIONAL: Wants to Use $3.18 Million Cash Collateral
CANNON ELECTRIC: Case Summary & 20 Largest Unsecured Creditors
CARBON ENERGY: Noteholders Balk at US Trustee's Conversion Bid
CARSON RDA SUCCESSOR: Moody's Hikes 2006A TABs Rating From Ba1
CLARK RENTALS: Case Summary & 2 Largest Unsecured Creditors
CORINTHIAN COLLEGES: Bank Objects Investigation Extension Bid
CORINTHIAN COLLEGES: Class 1 Claims Temporarily Allowed for Plan
CORINTHIAN COLLEGES: Says Automatic Stay Applies to States' Suits
CRP-2 HOLDINGS: U.S. Bank Has Objection to Levenfeld Application
CUE & LOPEZ CONSTRUCTION: Seeks to Alter Confirmed Plan
DEWEY & LEBOEUF: Defense Says It Won't Call Any Witnesses
DTS8 COFFEE: Settles $248,000 Debt with Former CEO
EDWARD PESTANA: Trial Court Ruling of Judicial Estoppel Affirmed
ESTERLINA VINEYARD: Can File Schedules Until September 18
EZENIA! INC: Obtains Favorable Ruling on Ex-CEO Severance Dispute
FA HUSBANDRY: Pot Businesses in Fin'l Trouble Face Hazy Future
FOUR OAKS: Chief Financial Officer Resigns
FREEDOM INDUSTRIES: Court Sets Plan Confirmation Hearing Oct. 2
FREEDOM INDUSTRIES: Summary of 3rd Amended Liquidating Plan
FREEDOM INDUSTRIES: US Govt Wants Plan Denied Until Returns Filed
GMG CAPITAL: Reorganization Plan Declared Effective
GOODRICH PETROLEUM: S&P Lowers Corporate Credit Rating to 'SD'
GULF PACKAGING: Court Approves UMAC as Collection Agent Banker
HERCULES OFFSHORE: Equity Release Notice Procedures Approved
HRK HOLDINGS: Has Until Nov. 16 to File Plan and Disclosures
INTERNATIONAL TEXTILE: Harvey Tepner Quits as Director
ITUS CORP: Stockholders Elect Five Directors
J. CREW: S&P Revises Outlook to Negative & Affirms 'B-' CCR
KENT C. ELLINGTON DMD: Case Summary & 18 Top Unsecured Creditors
L & W RESEARCH: Case Summary & 20 Largest Unsecured Creditors
LEHMAN BROTHERS: Ex-Employees Don't Warrant Special Status
LIBERATOR INC: To Change Company Name to "Luvu Brands, Inc."
MICHAEL BAKER: Moody's Cuts Corporate Family Rating to B3
MISSION NEW ENERGY: Reports $28 Million Profit for Fiscal 2015
MUSCLEPHARM CORP: Stockholders Elect Seven Directors
OPTIM ENERGY: Third Amended Reorganization Plan Declared Effective
OWENS-ILLINOIS INC: S&P Lowers CCR to 'BB', Outlook Stable
PATRIOT COAL: Committee Taps Blackacre as Coal Consultant
PATRIOT COAL: Retiree Committee Taps Zolfo Cooper as Consultant
PATRIOT COAL: Suitor, Union Reach Deal on New Labor Pact
PATRIOT COAL: Wants Prime Clerk to Serve as Subscription Agent
PETTERS COMPANY: PwC LLP Transfers Forensic Consulting Services
PRIME RENTALS: Case Summary & 20 Largest Unsecured Creditors
PUBLICK HOUSE: Case Summary & Largest Unsecured Creditors
RECOVERY CENTERS: Sale of Beacon Hill, 12th Ave Properties Approved
RELATIVITY MEDIA: "Collide" Backers Hope to End Licensing Deal
RESPONSE GENETICS: Creditors Committee Objects to Sale Process
RICE PROPERTY: Case Summary & 2 Largest Unsecured Creditors
ROSEVILLE RDA SUCCESSOR: Moody's Hikes Rating on TABs From 'Ba1'
ROYAL CARIBBEAN: S&P Assigns 'BB+' Rating on $1.128BB Facility
RYNARD PROPERTIES: U.S. Trustee Withdraws Case Dismissal Bid
SABLE OPERATING: Baker Hughes Files Notice of Lien Perfection
SABLE OPERATING: Section 341 Meeting Set for October 1
SABLE OPERATING: Seeks OK to Pay $12,906 Prepetition Payroll
SAMSON WU: NY App. Div. Directs Mega Bank to Respond to Subpoena
SOUTHEAST MISSOURI HEALTH: Fitch Revises Rating Watch to Evolving
SPENDSMART NETWORKS: Gets $200,000 in Loan From Bank of Lake Mills
SRA INTERNATIONAL: S&P Puts 'B' CCR on CreditWatch Positive
SUSQUEHANNA AREA: Fitch Affirms 'BB+' Rating on $148MM Bonds
T- CONYERS: Cherokee Case Dismissed Pursuant to Settlement
TERRENO REALTY: Fitch Affirms 'BB' Rating on Preferred Stock
TRANSTAR HOLDING: Moody's Cuts Corporate Family Rating to B3
TROCOM CONSTRUCTION: Files Schedules of Assets and Liabilities
TROCOM CONSTRUCTION: Grassi & Co. Approved as Financial Advisor
TROCOM CONSTRUCTION: Has Until Dec. 3 to Assume or Reject Leases
TROCOM CONSTRUCTION: Has Until Dec. 3 to File Chapter 11 Plan
TROCOM CONSTRUCTION: Oct. 1, 2015 Fixed as Gen. Claims Bar Date
USA DISCOUNTERS: Can Employ KCC as Claims & Noticing Agent
USA DISCOUNTERS: Court Issues Joint Administration Order
USA DISCOUNTERS: Seeks to Employ Klee Tuchin as Bankr. Counsel
VICTORY HEALTHCARE: CVMC REIT Re-Leases Hospital to Cumberland
WASHINGTON HEIGHTS: Asset Sale Allows Payment in Full Plus Interest
WESTLAKE VILLAGE: Court Dismisses and Closes Chapter 11 Case
XZERES CORP: Files Amended Certificate of Designation
XZERES CORP: Ravago Holdings Reports 16.8% Stake as of Aug. 28
[*] Robert Katz and Michael DuFrayne Join EisnerAmper
[^] BOOK REVIEW: The Financial Giants In United States History
*********
ACCELLENT INC: S&P Puts 'B' CCR on CreditWatch Positive
-------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on Accellent
Inc., including its 'B' corporate credit rating, on CreditWatch
with positive implications.
The CreditWatch placement follows a signed agreement for Greatbatch
to acquire Accellent for $1.73 billion in cash, stock, and the
assumption of debt.
"We believe Greatbatch's planned acquisition of Accellent is
materially positive for Accellent lenders given that Greatbatch has
significantly lower debt leverage [of about 1.5x]," said Standard &
Poor's credit analyst David Kaplan. S&P estimates that pro forma
for the transaction Greatbatch would have about $1.2 billion of
debt and approximately $240 million to $250 million of EBITDA.
This translates to adjusted debt leverage of approximately 5x, a
significant improvement from 2014 debt leverage at Accellent of
8.7x.
S&P believes the businesses are broadly complementary in their
offering of contract manufacturing services, primarily to medical
device companies, and that the combination increases scale and
diversification and offers customers a broader portfolio of
capabilities.
S&P expects to resolve the CreditWatch placement on Accellent at
the close of its acquisition by Greatbatch Inc., and then withdraw
the ratings on Accellent.
AFFIRMATIVE INSURANCE: Paul Zucconi Resigns From Board
------------------------------------------------------
Paul J. Zucconi tendered his resignation as a director and Chairman
of the Audit Committee of Affirmative Insurance Holdings, Inc.,
effective Aug. 26, 2015, according to a document filed with the
Securities and Exchange Commission.
About Affirmative Insurance
Addison, Tex.-based Affirmative Insurance Holdings, Inc., is a
distributor and producer of non-standard personal automobile
insurance policies for individual consumers in targeted geographic
markets. Non-standard personal automobile insurance policies
provide coverage to drivers who find it difficult to obtain
insurance from standard automobile insurance companies due to
their lack of prior insurance, age, driving record, limited
financial resources or other factors. Non-standard personal
automobile insurance policies generally require higher premiums
than standard automobile insurance policies for comparable
coverage.
Affirmative Insurance reported a net loss of $32.2 million in 2014,
compared to net income of $30.7 million in 2013.
As of March 31, 2015, the Company had $312 million in total assets,
$448 million in total liabilities and a $136 million total
stockholders' deficit.
KPMG LLP, in Dallas, Texas, issued a "going concern" qualification
in its report on the consolidated financial statements for the year
ended Dec. 31, 2014. The accounting firm noted that the Company's
recent history of recurring losses from operations, its failure to
comply with certain financial covenants in the senior secured and
subordinated credit facilities, its need to meet debt repayment
requirements and its failure to comply with the Illinois Department
of Insurance minimum risk-based capital requirements raise
substantial doubt about its ability to continue as a going
concern.
ALLIED SYSTEMS: U.S. Trustee, ACE Object to Plan Confirmation
-------------------------------------------------------------
Andrew R. Vara, Acting U.S. Trustee for Region 3, and Illinois
Union Insurance Company and its affiliates object to confirmation
of ASHInc Corporation, et al.'s joint Chapter 11 plan of
reorganization.
The U.S. Trustee asserts that the Plan is not confirmable for the
following reasons: (1) The Plan does not comply with the applicable
provisions of the Bankruptcy Code; (2) The Plan is not proposed in
good faith because the exculpation provisions are overly broad; (3)
The Plan is not proposed in good faith because the third party
release provisions are improper; (4) The Debtors are delinquent in
filing Monthly Operating Reports and paying Quarterly Fees; and (5)
Based upon the totality of the circumstances, the Plan is not
proposed in good faith.
Illinois Union and its affiliates (collectively called the "ACE
Companies"), complain that the Plan contemplates a settlement with
American International Group, Inc., and provides for the treatment
of the AIG Claims but does not provide for the treatment of other
insurers' claims or the handling of claims covered by other
insurers. Accordingly, the ACE Companies said they cannot
determine how the Plan Proponents propose to treat the ACE
Insurance Program or claims covered under it.
Yucaipa American Alliance Fund I, L.P., and Yucaipa American
Alliance (Parallel) Fund I, L.P., related that on Aug. 12, during a
telephonic hearing, Yucaipa and the Plan Proponents informed the
Court that they had reached a settlement in principle with respect
to Yucaipa's objections to confirmation of the Plan. In reliance
on the settlement as articulated on the record at the August 12
hearing, Yucaipa said it will neither file an objection to the Plan
nor submit a voting ballot by the Plan objection deadline.
However, the settlement is subject to final documentation and
Yucaipa is awaiting a revised draft Plan reflecting the settlement
terms. Accordingly, Yucaipa reserved all rights to object to, or
vote against, the Plan in the event the settlement is not
ultimately finalized.
The U.S. Trustee is represented by David L. Buchbinder, Esq., Trial
Attorney at the Office of the United States Trustee, in Wilmington,
Delaware.
The ACE Companies are represented by:
Richard W. Riley, Esq.
DUANE MORRIS LLP
222 Delaware Avenue, Suite 1600
Wilmington, DE 19801-1659
Tel: (302) 657-4900
Fax: (302) 657-4901
E-mail: rwriley@duanemorris.com
- and -
Wendy M. Simkulak, Esq.
Catherine B. Heitzenrater, Esq.
DUANE MORRIS LLP
30 South 17th Street
Philadelphia, PA 19103-4196
Tel: (215) 979-1000
Fax: (215) 979-1020
E-mail: WMSimkulak@duanemorris.com
Yucaipa is represented by Michael R. Nestor, Esq., at Young Conaway
Stargatt & Taylor, LLP, in Wilmington, Delaware; Robert A. Klyman,
Esq., and Sabina Jacobs, Esq., at Gibson, Dunn & Crutcher LLP, in
Los Angeles, California; and Matthew K. Kelsey, Esq., and Mary Kate
Hogan, Esq., at Gibson, Dunn & Crutcher LLP, in New York.
About Allied Systems Holdings
BDCM Opportunity Fund II, LP, Spectrum Investment Partners LP, and
Black Diamond CLO 2005-1 Adviser L.L.C., filed involuntary
petitions for Allied Systems Holdings Inc. and Allied Systems Ltd.
(Bankr. D. Del. Case Nos. 12-11564 and 12-11565) on May 17, 2012.
The signatories of the involuntary petitions assert claims of at
least $52.8 million for loan defaults by the two companies.
Allied Systems, through its subsidiaries, provides logistics,
distribution, and transportation services for the automotive
industry in North America.
Allied Holdings Inc. first filed for chapter 11 protection (Bankr.
N.D. Ga. Case Nos. 05-12515 through 05-12537) on July 31, 2005.
Jeffrey W. Kelley, Esq., at Troutman Sanders, LLP, represented the
Debtors in the 2005 case. Allied won confirmation of a
reorganization plan and emerged from bankruptcy in May 2007 with
$265 million in first-lien debt and $50 million in second-lien
debt.
The petitioning creditors said Allied defaulted on payments of
$57.4 million on the first lien debt and $9.6 million on the
second. They hold $47.9 million, or about 20% of the first-lien
debt, and about $5 million, or 17%, of the second-lien obligation.
They are represented by Adam G. Landis, Esq., and Kerri K.
Mumford, Esq., at Landis Rath & Cobb LLP; and Adam C. Harris, Esq.,
and Robert J. Ward, Esq., at Schulte Roth & Zabel LLP.
Allied Systems Holdings Inc. formally put itself and 18
subsidiaries into bankruptcy reorganization June 10, 2012,
following the filing of the involuntary Chapter 11 petition.
The Company is being advised by Mark D. Collins, Esq., at
Richards, Layton & Finger, P.A., and Jeffrey W. Kelley, Esq., at
Troutman Sanders, Gowling Lafleur Henderson.
The bankruptcy court process does not include captive insurance
company Haul Insurance Limited or any of the Company's Mexican or
Bermudan subsidiaries. The Company also announced that it intends
to seek foreign recognition of its Chapter 11 cases in Canada.
An official committee of unsecured creditors has been appointed in
the case. The Committee consists of Pension Benefit Guaranty
Corporation, Central States Pension Fund, Teamsters National
Automobile Transporters Industry Negotiating Committee, and
General Motors LLC. The Committee is represented by Sidley Austin
LLP.
In January 2014, the U.S. Trustee for Region 3 appointed a three-
member Official Committee of Retirees.
Yucaipa Cos. has 55% of the senior debt and took the position it
had the right to control actions the indenture trustee would take
on behalf of debt holders. The state court ruled in March 2013
that the loan documents didn't allow Yucaipa to vote.
In March 2013, the bankruptcy court gave the official creditors'
committee authority to sue Yucaipa. The suit includes claims that
the debt held by Yucaipa should be treated as equity or
subordinated so everyone else is paid before the Los Angeles-based
owner. The judge allowed Black Diamond to participate in the
lawsuit against Yucaipa and Allied directors.
Yucaipa American Alliance Fund I, L.P., Yucaipa American Alliance
(Parallel) Fund I, L.P., Yucaipa American Alliance Fund II, L.P.,
Yucaipa American Alliance (Parallel) Fund II, L.P., represented by
Michael R. Nestor, Esq., and Edmund L. Morton, Esq., at Young
Conaway Stargatt & Taylor, LLP; and Robert A. Klyman, Esq., at
Gibson, Dunn & Crutcher LLP.
First Lien Agent, Black Diamond Commercial Finance, L.L.C.,
represented by Adam G. Landis, Esq., and Kerri K. Mumford, Esq.,
at Landis Rath & Cobb LLP; and Adam C. Harris, Esq., Robert J.
Ward, Esq., and David M. Hillman, Esq., at Schulte Roth & Zabel
LLP.
Allied Systems Holdings, Inc., has changed its name to ASHINC
Corporation.
* * *
ASHINC Corporation, f/k/a Allied Systems Holdings, Inc., and its
debtor affiliates filed with the U.S. Bankruptcy Court for the
District of Delaware a joint Chapter 11 plan of reorganization,
co-proposed by the Committee and the first lien agents.
The Plan provides that certain of the Debtors' assets, the
Litigation Trust Assets, will vest in the Allied Litigation Trust,
and the remainder of the Debtors' assets, including the proceeds
from the sale of substantially all of the Debtors' assets, will
either revest in the Reorganized Debtors or be distributed to the
Debtors' creditors.
The start date and time for the hearing to consider ASHINC
Corporation, et al.'s First Amended Joint Chapter 11 Plan of
Reorganization has been changed to Sept. 10, 2015, at 9:30 p.m.
(EDT), before the U.S. Bankruptcy Court for the District of
Delaware.
AMERICAN LIBERTY: Hi View Real Estate Apporoved as Broker
---------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas
authorized American Liberty Oil Company, LP, to employ Hi View Real
Estate, as real estate broker for the bankruptcy estate.
Prior to the Petition Date, the Debtor entered into a listing
agreement with Hi View to sell distinct tracts included within the
Ranch.
According to the Debtor, the bankruptcy estate owns approximately
7500 acres of in East Texas. The Ranch - the most commercial
viable portions of Star Brand Ranch in Kaufman, Texas is encumbered
by a lien in favor of Legacy Land Bank, FLCA in the approximate
amount of $2.4 million and a lien in favor of Michael Morris in the
amount of $1.048 million.
The Debtor's plan to sell a portion of the Ranch property to obtain
sufficient proceeds to pay off all debt, including the debt to
Legacy Bank and Michael Morris in full.
The Debtor said that Hi View will continue its efforts in selling a
portion of the Ranch property, on the same terms as contained in
the listing agreements.
Under the terms of the Listing Agreements, Hi View would be paid a
commission of 6% of the gross sales price at closing of a sale. The
property to be marketed includes 1200 acres located at W. US HWY
175 Kaufman, Texas 75142 with a list price of $5,500,000 and an
additional 1475 acres at HWY 34, Kaufman, Texas 75142 with a list
price of $5,900,000.
An additional agreement between Hi View, the Debtor and Moreland
Properties regarding the listing agreements provides that Hi View
and MP will split a portion of the 6% commission, however, the
Debtor would not be obligated to pay anything more than the 6% of
the sale proceeds despite the additional splitting agreement
between Hi View and MP. Also, the Debtor is filing a separate
application to employ MP.
About American Liberty
American Liberty Oil Company, LP filed a Chapter 11 bankruptcy
petition (Bankr. N.D. Tex. Case No. 15-32019) on May 6, 2015. The
petition was signed by Wreno S. Wynne, Jr., as managing partner of
ALOC LLC. The Debtor estimated assets of $10 million to $50
million and debts of $1 million to $10 million in its petition.
Quilling, Selander, Lownds, Winslett & Moser, P.C., serves as the
Debtor's counsel. The case is assigned to Hon. Stacey G.
Jernigan.
AMERICAN POWER: Matthew Steenwyk Reports 23% Stake as of Aug. 24
----------------------------------------------------------------
In an amended Schedule 13D filed with the Securities and Exchange
Commission, Matthew van Steenwyk, manager of Arrow, LLC, disclosed
that as of Aug. 24, 2015, he beneficially owned 13,590,862 shares
of common stock of American Power Group Corporation, which
represents 23 percent of the shares outstanding. Arrow, LLC also
reported beneficial ownership of 8,087,919 common shares as of that
date.
On Aug. 24, 2015, American Power and its wholly owned subsidiary
American Power Group, Inc. entered into a Secured Financing
Agreement with WPU Leasing, LLC, members of which include Arrow.
Pursuant to the Agreement, the Lender committed to loan APGI up to
$3,250,000 to fund APGI's purchase of wellhead gas processing
systems. APGI made its initial draw of $1,400,000 under the
Agreement on Aug. 24, 2015, of which Arrow funded $430,780. In
consideration of the Lender's commitments under the Agreement, the
Company issued the Lender's members, including Arrow, warrants to
purchase up to the lesser of (i) an aggregate of 3,250,000 shares
of the Company's common stock, $.01 par value per share, or (ii)
one share of Common Stock for each dollar borrowed by APGI under
the Agreement. In connection with the initial draw, Arrow, LLC was
issued a Warrant currently exercisable for 430,780 shares of Common
Stock.
APGI's borrowings are governed by a Secured Loan Agreement with the
Lender and a series of secured promissory notes. The Notes bear
interest at the rate of 22.5% per annum, are secured by security
interests in the purchased equipment and are guaranteed by the
Company. The first Note is repayable in 49 consecutive monthly
installments of principal and interest commencing Aug. 31, 2015.
In the event of any such event of default under the Loan Agreement,
the Lender may, in its discretion, (i) terminate its obligation to
make further advances under the Financing Agreement, (ii) declare
all outstanding obligations under the Notes and the Loan Agreement
to be due and payable, including, in addition to the interest
payable under the Notes, delinquent interest with respect to
amounts due, calculated at a rate per annum equal to the Prime Rate
quoted from time to time in The Wall Street Journal plus 4%, (iii)
seize the equipment securing the Notes, and (iv) exercise all other
rights and remedies provided for under the Uniform Commercial Code.
In any such event, APGI and the Company will be obligated to pay
all of the reasonable costs and expenses, including reasonable
legal fees and expenses, incurred by the Lender in connection with
the enforcement of its rights under the Loan Agreement and the
Notes.
A copy of the regulatory filing is available for free at:
http://is.gd/WymQut
About American Power Group
American Power Group's alternative energy subsidiary, American
Power Group, Inc., provides a cost-effective patented Turbocharged
Natural Gas conversion technology for vehicular, stationary and
off-road mobile diesel engines. American Power Group's dual fuel
technology is a unique non-invasive energy enhancement system that
converts existing diesel engines into more efficient and
environmentally friendly engines that have the flexibility to run
on: (1) diesel fuel and liquefied natural gas; (2) diesel fuel and
compressed natural gas; (3) diesel fuel and pipeline or well-head
gas; and (4) diesel fuel and bio-methane, with the flexibility to
return to 100 percent diesel fuel operation at any time. The
proprietary technology seamlessly displaces up to 80% of the
normal diesel fuel consumption with the average displacement
ranging from 40 percent to 65 percent. The energized fuel balance
is maintained with a proprietary read-only electronic controller
system ensuring the engines operate at original equipment
manufacturers' specified temperatures and pressures. Installation
on a wide variety of engine models and end-market applications
require no engine modifications unlike the more expensive invasive
fuel-injected systems in the market. Additional information at
http://www.americanpowergroupinc.com/
American Power reported a net loss available to common stockholders
of $3.25 million on $6.28 million of net sales for the year ended
Sept. 30, 2014, compared to a net loss available to common
stockholders of $2.92 million on $7.01 million of net sales for the
year ended Sept. 30, 2013.
As of June 30, 2015, the Company had $8.9 million in total assets,
$7.7 million in total liabilities and $1.1 million in total
stockholders' equity.
AMERICAN POWER: Matthew Steenwyk Reports 23% Stake as of Aug. 24
----------------------------------------------------------------
In an amended Schedule 13D filed with the Securities and Exchange
Commission, Matthew van Steenwyk, manager of Arrow, LLC, disclosed
that as of Aug. 24, 2015, he beneficially owned 13,590,862 shares
of common stock of American Power Group Corporation, which
represents 23 percent of the shares outstanding. Arrow, LLC also
reported beneficial ownership of 8,087,919 common shares as of that
date.
On Aug. 24, 2015, American Power and its wholly owned subsidiary
American Power Group, Inc. entered into a Secured Financing
Agreement with WPU Leasing, LLC, members of which include Arrow.
Pursuant to the Agreement, the Lender committed to loan APGI up to
$3,250,000 to fund APGI's purchase of wellhead gas processing
systems. APGI made its initial draw of $1,400,000 under the
Agreement on Aug. 24, 2015, of which Arrow funded $430,780. In
consideration of the Lender's commitments under the Agreement, the
Company issued the Lender's members, including Arrow, warrants to
purchase up to the lesser of (i) an aggregate of 3,250,000 shares
of the Company's common stock, $.01 par value per share, or (ii)
one share of Common Stock for each dollar borrowed by APGI under
the Agreement. In connection with the initial draw, Arrow, LLC was
issued a Warrant currently exercisable for 430,780 shares of Common
Stock.
APGI's borrowings are governed by a Secured Loan Agreement with the
Lender and a series of secured promissory notes. The Notes bear
interest at the rate of 22.5% per annum, are secured by security
interests in the purchased equipment and are guaranteed by the
Company. The first Note is repayable in 49 consecutive monthly
installments of principal and interest commencing Aug. 31, 2015.
In the event of any such event of default under the Loan Agreement,
the Lender may, in its discretion, (i) terminate its obligation to
make further advances under the Financing Agreement, (ii) declare
all outstanding obligations under the Notes and the Loan Agreement
to be due and payable, including, in addition to the interest
payable under the Notes, delinquent interest with respect to
amounts due, calculated at a rate per annum equal to the Prime Rate
quoted from time to time in The Wall Street Journal plus 4%, (iii)
seize the equipment securing the Notes, and (iv) exercise all other
rights and remedies provided for under the Uniform Commercial Code.
In any such event, APGI and the Company will be obligated to pay
all of the reasonable costs and expenses, including reasonable
legal fees and expenses, incurred by the Lender in connection with
the enforcement of its rights under the Loan Agreement and the
Notes.
A copy of the regulatory filing is available for free at:
http://is.gd/WymQut
About American Power Group
American Power Group's alternative energy subsidiary, American
Power Group, Inc., provides a cost-effective patented Turbocharged
Natural Gas conversion technology for vehicular, stationary and
off-road mobile diesel engines. American Power Group's dual fuel
technology is a unique non-invasive energy enhancement system that
converts existing diesel engines into more efficient and
environmentally friendly engines that have the flexibility to run
on: (1) diesel fuel and liquefied natural gas; (2) diesel fuel and
compressed natural gas; (3) diesel fuel and pipeline or well-head
gas; and (4) diesel fuel and bio-methane, with the flexibility to
return to 100 percent diesel fuel operation at any time. The
proprietary technology seamlessly displaces up to 80% of the
normal diesel fuel consumption with the average displacement
ranging from 40 percent to 65 percent. The energized fuel balance
is maintained with a proprietary read-only electronic controller
system ensuring the engines operate at original equipment
manufacturers' specified temperatures and pressures. Installation
on a wide variety of engine models and end-market applications
require no engine modifications unlike the more expensive invasive
fuel-injected systems in the market. Additional information at
http://www.americanpowergroupinc.com/
American Power reported a net loss available to common stockholders
of $3.25 million on $6.28 million of net sales for the year ended
Sept. 30, 2014, compared to a net loss available to common
stockholders of $2.92 million on $7.01 million of net sales for the
year ended Sept. 30, 2013.
As of June 30, 2015, the Company had $8.9 million in total assets,
$7.7 million in total liabilities and $1.1 million in total
stockholders' equity.
ARXX BUILDING: Files for Bankruptcy; Creditor's Meeting Sept. 16
----------------------------------------------------------------
The bankruptcy of Arxx Building Products Inc. occurred on Aug. 25,
2015, and the first meeting of creditors will be held on Sept. 16,
2015, at 3:00 p.m., at the offices of Torys LLP 79 Wellington
Street West, 30th floor, TD South Tower in Toronto, Ontario.
KSV Kofman Inc.
Licensed Trustee in Insolvency and Restructuring
150 King Street West, Suite 2308
Toronto, Ontario M5H 1J9
ATLANTIC & PACIFIC: Attorneys Submit Verified Statements
--------------------------------------------------------
Counsel for parties-in-interest submitted to the U.S. Bankruptcy
Court for the Southern District of New York verified statements of
multiple representation in relation to the Chapter 11 cases of The
Great Atlantic & Pacific Tea Company, Inc., et al.
The statements in accordance with Rule 2019 of the Federal Rules of
Bankruptcy Procedure were filed by:
1. Douglas M. Evans, a principal and lawyer with Kroll,
McNamara, Evans & Delehanty, LLP (KME&D) on behalf of several
landlords;
2. Pepper Hamilton LLP representing various creditors and
parties-in-interest;
3. Saul Ewing LLP representing parties-in-interest;
4. Mickee M. Hennessy Westerman Ball Ederer Miller Zucker &
Sharfstein, LLP, as counsel to certain parties-in-interest;
5. Chiesa Shahinian & Giantomasi PC representing Westchester
Fire Insurance Company in connection with certain surety bonds
issued for the various Debtors, as principal.
6. Russell R. Johson III of the law firm of Russell R. Johnson
III, PLC, representating utilities that provided prepetition
utility goods/services to the Debtors, and continue to provide
postpetition utiity goods/services to the Debtors;
7. Timothy P. Duggan, Esq., at Stark & Stark, P.C., representing
approximately three commercial landlords;
8. Joel R. Glucksman, Esq., at Scarinci & Hollenbeck, LLC
representing more than one creditor and party-in-interest;
9. John E. Westerman, Esq., Thomas A. Draghi, Esq., and Mickee
M. Hennessy, Esq., at Westerman Ball Ederer Miller Zucker &
Sharfstein, LLP, counsel for CJAM Associates, LLC, Vets & Spartan
LLC and Rosmar Holding Company L.P.
About Atlantic & Pacific
Based in Montvale, New Jersey, The Great Atlantic & Pacific Tea
Company, Inc., and its affiliates are one of the nation's oldest
leading supermarket and food retailers, operating approximately
300
supermarkets, beer, wine, and liquor stores, combination food and
drug stores, and limited assortment food stores across six
Northeastern states. The primary retail operations consist of
supermarkets operated under a variety of well known trade names,
or
"banners," including A&P, Waldbaum's, SuperFresh, Pathmark, Food
Basics, The Food Emporium, Best Cellars, and A&P Liquors. The
Company employs approximately 28,500 employees, over 90% of whom
are members of one of twelve local unions whose members are
employed by the Debtors under the authority of 35 separate
collective bargaining agreements.
Then with 429 stores, A&P and its affiliates filed Chapter 11
petitions (Bankr. S.D.N.Y. Case No. 10-24549) on Dec. 12, 2010,
and
in 2012 emerged from Chapter 11 bankruptcy as a privately held
company with 320 supermarkets.
On July, 19, 2015, with 300 stores, A&P and 20 affiliated debtors
each filed a Chapter 11 petition (Bankr. S.D.N.Y.) after reaching
deals for the going concern sales of 120 stores. The Debtors are
seeking joint administration under Case No. 15-23007.
As of Feb. 28, 2015, the Debtors reported total assets of
$1.6 billion and liabilities of $2.3 billion.
The Debtors tapped Weil, Gotshal & Manges LLP as counsel, Evercore
Group L.L.C., as investment banker, FTI Consulting, Inc., as
financial advisor, Hilco Real Estate, LLC, as real estate advisor,
and Prime Clerk LLC, as claims and noticing agent.
The U.S. Trustee for Region 2 appointed seven creditors to serve on
the official committee
of unsecured creditors.
Elise S. Frejka was appointed as consumer privacy ombudsman.
ATLANTIC & PACIFIC: Elise Frejka Named as C. Privacy Ombudsman
--------------------------------------------------------------
William K. Harrington, U.S. Trustee for Region 2, appointed Elise
S. Frejka as consumer privacy ombudsman in the Chapter 11 cases of
The Great Atlantic & Pacific Tea Company, Inc., et al.
The appointment is made pursuant to the Aug. 11, 2015 order of
Judge Robert D. Drain of the U.S. Bankruptcy Court for the Southern
District of New York directing the appointment.
Judge Drain ordered that the ombudsman will:
a) perform the functions set forth in Section 332(b) of the
Bankruptcy Code;
b) at all times comply with Section 332(c);
c) be compensated and reimbursed pursuant Sections 330 and 33;
and
d) if a report or recommendation of the ombudsman is required to
be submitted, any such report or recommendation must be submitted
prior to (a) in cases where the procedures governing a sale provide
for notice and objections, the applicable objection
deadline, or (b) in cases where the procedures governing a sale do
not provide for notice and objections, seven days after the Debtors
provide notice to the ombudsman of the sale.
The Debtor's attorneys can be reached at:
Ray C. Schrock, P.C.
Garrett A. Fail, Esq.
WEIL, GOTSHAL & MANGES LLP
767 Fifth Avenue
New York, NY 10153
Tel: (212) 310-8000
Fax: (212) 310-8007
About Atlantic & Pacific
Based in Montvale, New Jersey, The Great Atlantic & Pacific Tea
Company, Inc., and its affiliates are one of the nation's oldest
leading supermarket and food retailers, operating approximately
300
supermarkets, beer, wine, and liquor stores, combination food and
drug stores, and limited assortment food stores across six
Northeastern states. The primary retail operations consist of
supermarkets operated under a variety of well known trade names,
or
"banners," including A&P, Waldbaum's, SuperFresh, Pathmark, Food
Basics, The Food Emporium, Best Cellars, and A&P Liquors. The
Company employs approximately 28,500 employees, over 90% of whom
are members of one of twelve local unions whose members are
employed by the Debtors under the authority of 35 separate
collective bargaining agreements.
Then with 429 stores, A&P and its affiliates filed Chapter 11
petitions (Bankr. S.D.N.Y. Case No. 10-24549) on Dec. 12, 2010,
and
in 2012 emerged from Chapter 11 bankruptcy as a privately held
company with 320 supermarkets.
On July, 19, 2015, with 300 stores, A&P and 20 affiliated debtors
each filed a Chapter 11 petition (Bankr. S.D.N.Y.) after reaching
deals for the going concern sales of 120 stores. The Debtors are
seeking joint administration under Case No. 15-23007.
As of Feb. 28, 2015, the Debtors reported total assets of
$1.6 billion and liabilities of $2.3 billion.
The Debtors tapped Weil, Gotshal & Manges LLP as counsel, Evercore
Group L.L.C., as investment banker, FTI Consulting, Inc., as
financial advisor, Hilco Real Estate, LLC, as real estate advisor,
and Prime Clerk LLC, as claims and noticing agent.
The U.S. Trustee for Region 2 appointed seven creditors to serve on
the official committee
of unsecured creditors.
Elise S. Frejka was appointed as consumer privacy ombudsman.
BEAZER HOMES: Fitch Affirms 'B-' IDR, Outlook Stable
----------------------------------------------------
Fitch Ratings has affirmed the ratings of Beazer Homes USA, Inc.
(NYSE: BZH), including the company's Issuer Default Rating (IDR),
at 'B-'. The Rating Outlook is Stable.
KEY RATING DRIVERS
Beazer's 'B-' IDR reflects the company's execution of its business
model in the current moderately recovering housing environment,
land policies, and geographic diversity. Risk factors include the
cyclical nature of the homebuilding industry, BZH's tight liquidity
position, the company's high debt load and weak credit metrics
(particularly its high leverage), BZH's underperformance relative
to its peers in certain operational and financial categories, and
its current over-exposure to the credit-challenged entry level
market (approximately 60% of BZH's customers are first-time home
buyers).
The Stable Outlook takes into account the improving housing outlook
for 2015 and 2016, and the expected modest improvement in operating
results and credit metrics during the next 12-18 months.
SLOW START TO FISCAL YEAR 2015
BZH's homebuilding revenues for the first nine months of its 2015
fiscal year (ending June 30, 2015) increased 5.5% to $959 million
as closings fell 4.4% while the average sales price advanced 10.2%
to $307,900 during the period. Land sales totalled $35.6 million
during the 2015 year-to-date (YTD) period compared with $8.6
million last year. Homebuilding gross profit margins (excluding
inventory impairments and lot option abandonments) contracted so
far this year, falling 260 basis points (bps) to 16.9% during the
first nine months of 2015 compared with 19.5% during the same
period last year. The decline in gross margin was due to community
and geographic mix, higher indirect costs, as well as warranty
charges related to Florida stucco issues. SG&A as a percentage of
sales declined slightly to 14.3% during the nine-month period in
2015 from 14.6% last year. BZH reported a pre-tax loss of $8.7
million during the period, which included $13.6 million of charges
related to the Florida stucco issues. Fitch expects BZH will be
slightly profitable during all of FY15.
The company has been expanding its community count over the past
year, which has translated into increased new order activity and
higher backlog during the past two quarters. BZH's average active
community count grew 17.1% year-over-year to 164 communities during
the third quarter of 2015 (3Q'15) from 140 communities during
3Q'14. Net orders during 3Q'15 increased 18.1% and BZH's ending
unit backlog was 25% higher year-over-year (up 35.6% in value).
These positive trends should be reflected in the company's
financial results during 4Q'15 and into FY2016.
TIGHT LIQUIDITY POSITION
BZH ended 3Q'15 with $128.8 million of unrestricted cash and $101.7
million of borrowing availability under its $150 million revolving
credit facility. BZH's liquidity position has lessened over the
past few years as the company has stepped up land and development
spending. Nevertheless, Fitch expects BZH will maintain cash and
revolver availability of at least $200 million - $300 million in
the near to intermediate term, which should allow the company to
fund seasonal working capital needs.
There is some refinancing risk as BZH has $172.9 million of 8.125%
senior notes coming due in June 2016. While the company currently
has sufficient cash and revolver availability to fund this debt
maturity, BZH's liquidity will be meaningfully diminished if the
company is unable to refinance these maturing notes. The company
has in the past demonstrated its ability to access the capital
markets. In April 2014, BZH issued $325 million of 5.75% five-year
senior unsecured notes. Fitch expects the company will refinance
its 2016 notes ahead of the scheduled maturity. BZH is also in the
process of renewing its $150 million secured revolving credit
facility that matures in September 2016 ($130 million matures in
Sept. 2016, and $20 million matures in September 2015), although
the size and structure of the facility has not been finalized.
HIGH DEBT LOAD AND LEVERAGE
BZH had total debt of $1.55 billion at June 30, 2015. Leverage for
the latest 12 months (LTM) ending June 30, 2015 was 12.5x compared
with 12.7x at FYE14 and 17.4x at the conclusion of FY13. EBITDA to
interest coverage is also low at 1.0x for the latest 12 months
(LTM) period ending June 30, 2015 compared with 1.0x in FY14 and
0.8x in FY13. Fitch expects these credit metrics will improve in
the next 12-15 months, although leverage is expected to remain weak
at around 9x-10x and interest coverage is projected to increase to
approximately 1.25x-1.50x at the end of FY16.
GEOGRAPHIC DIVERSITY
BZH is geographically diversified with active operations in 16
states across the country. The company ranks among the top 10
builders in such metro markets as Phoenix, Arizona, Dallas, TX,
Washington DC / Arlington, VA / Alexandria, WV markets, Tampa / St.
Petersburg / Clearwater, FL, Orlando, FL, Las Vegas, NV,
Philadelphia, PA / Camden, NJ / Wilmington, DE markets,
Indianapolis / Carmel, IN, Nashville / Davidson / Murfreesboro /
Franklin, TN, Baltimore / Towson, MD, and Charleston / North
Charleston, Summerville, SC.
IMPROVING HOUSING MARKET
Housing metrics increased in 2014 due to more robust economic
growth during the last three quarters of the year (prompted by
improved household net worth, industrial production and consumer
spending), and consequently acceleration in job growth (as
unemployment rates decreased to 6.2% for 2014 from an average of
7.4% in 2013), despite modestly higher interest rates, as well as
more measured home price inflation. Single-family starts in 2014
improved 4.8% to 648,000 as multifamily volume grew 15.6% to
355,000. Thus, total starts in 2014 were 1.003 million. New home
sales were up a modest 1.6% to 436,000, while existing home volume
was off 2.9% to 4.940 million largely due to fewer distressed homes
for sale and limited inventory. New home price inflation moderated
in 2014, at least partially because of higher interest rates and
buyer resistance. Average new home prices, as measured by the
Census Bureau, rose 6.4% in 2014, while median home prices advanced
approximately 5.4%.
Housing activity is likely to ratchet up more sharply in 2015 with
the support of a steadily growing, relatively robust economy
throughout the balance of the year. Considerably lower oil prices
should restrain inflation and leave American consumers with more
money to spend. The unemployment rate should continue to move
lower (average 5.3% in 2015). Credit standards should steadily,
moderately ease throughout 2015. Demographics should be more of a
positive catalyst. More of those younger adults who have been
living at home should find jobs and these 25-35 year olds should
provide some incremental elevation to the rental and starter home
markets. Through the first seven months of the year, total housing
starts increased 11.3% versus the same period last year, while new
home and existing home sales rose 21.2% and 8.2%, respectively.
Single-family starts are forecast to rise about 12.5% to 729,000 as
multifamily volume expands 7.3% to 381,000. Total starts would be
in excess of 1.1 million (up 10.7%). New home sales are projected
to increase 20% to 523,000. Existing home volume is expected to
approximate 5.152 million, up 4.3%. New home price inflation
should further taper off with higher interest rates and the mix of
sales shifting more to first time homebuyer product. Average and
median home prices should increase 3%-3.5%.
Fitch expects further improvement in 2016, with total housing
starts projected to rise 12.2%, new home sales advances 18%, and
existing home sales grows 5% for the year.
SOME EROSION IN HOME AFFORDABILITY
The most recent Freddie Mac 30 year average mortgage rate
(Aug. 27, 2015) was 3.84%, down 9 bps sequentially from the
previous week and 43 bps higher than the average rate during the
month of January 2013 (3.41%), a low point for mortgage rates.
Current rates are still well below historical averages and help
moderate the effect of much higher home prices during the past few
years.
Income growth has been (and may continue to be) relatively modest
to moderate. Nevertheless, there has been some lessening of
affordability as the upcycle in housing has matured. The Realtor
Association's composite affordability index peaked at 207.3 in the
1Q'12, averaged 176.9 in 2013, 164.3 in 2014 and was 153.1 in June
2015. Erosion in affordability is likely to continue as interest
rates likely head higher in 2015 (as the economy strengthens).
Fitch projects that mortgage rates will average 30-40 bps higher in
2015. Home price inflation should moderate this year reflecting
the higher interest rates and the mix of sales shifting more to
first time homebuyer product. However, average and median home
prices should still rise within a range of 3%-3.5% this year,
further pressuring affordability.
LAND POSITION AND SPENDING
BZH maintains a 5.7-year supply of lots (based on last 12 months
deliveries), 77.6% of which are owned, and the balance controlled
through options. Total lots controlled declined 8.7%
year-over-year and fell 2.2% compared with the previous quarter.
The company has been selling excess land ($53 million during FY14
and $35.6 million YTD) and has also decided to stop reinvesting in
its New Jersey homebuilding operations.
The company has been aggressive in its land and development
spending following the successful execution of its capital markets
transactions in 2012. BZH spent roughly $475.2 million on land
purchases and development activities during fiscal 2013 compared
with $185.6 million expended during fiscal 2012. During fiscal
2014, the company spent $551.2 million during FY14, of which 60%
was directed to new land purchases and 40% for development
activities.
Through the first nine months of fiscal 2015 (ended June 30, 2015),
BZH spent $353.4 million for land and development activities (50%
for new land acquisitions and 50% for development activities). For
all of 2015, the company expects total spending will be $475
million, with roughly 50% directed to new land acquisitions and the
other half for development expenditures. Fitch is comfortable with
BZH's land strategy given the company's liquidity position and
management's demonstrated discipline in managing spending and
pulling back on its land and development activities during periods
of distress.
KEY ASSUMPTIONS
Fitch's key assumptions within the rating case for BZH include:
-- Industry single-family housing starts improve 12.5%, while
new and existing home sales grow 20% and 4.3%, respectively,
in 2015;
-- BZH's homebuilding revenues rise 11%-14% during FY15;
-- The company generates EBITDA margins of 7.5% - 8.5% during
FY15;
-- BZH spends approximately $475 million on land and
development activities this year;
-- BZH reports negative cash flow from operations of
$125 million - $175 million during FY15;
-- The company refinances $172.9 million of debt maturing in
June 2016 and maintains an adequate liquidity position
(above $200 million) with a combination of unrestricted cash
and revolver availability in the intermediate term.
RATING SENSITIVITIES
Future ratings and Outlooks will be influenced by broad housing
market trends as well as company specific activity, such as trends
in land and development spending, general inventory levels,
speculative inventory activity (including the impact of high
cancellation rates on such activity), gross and net new order
activity, debt levels, free cash flow trends and uses, and the
company's cash position.
BZH's ratings are constrained in the intermediate term due to weak
credit metrics and high leverage. However, positive rating actions
may be considered if the recovery in housing is maintained and is
meaningfully better than Fitch's current outlook, BZH shows
continuous improvement in credit metrics (particularly debt to
EBITDA consistently below 8x and interest coverage above 2x), and
preserves a healthy liquidity position.
Negative rating actions could occur if the recovery in housing
dissipates, resulting in revenues and operating losses approaching
2011 levels, and the company maintains an overly aggressive land
and development spending program. This could lead to consistent
and significant negative quarterly cash flow from operations and
diminished liquidity position. In particular, Fitch will review
BZH's ratings if the company's liquidity position (unrestricted
cash plus revolver availability) falls below $200 million.
Negative rating actions could also occur if the company's credit
metrics do not improve much from current levels in a sustained
housing recovery, including debt to EBITDA consistently remaining
above 10x and interest coverage below 1x in the next 12-18 months.
Fitch will also review the company's rating if BZH is unable to
refinance $172.9 million of debt maturing in June 2016 and uses
cash on hand and/or revolver availability to fund the debt
repayment, leading to a diminished liquidity position.
FULL LIST OF RATING ACTIONS
Fitch has affirmed these ratings for Beazer Homes USA, Inc.:
-- Long-term IDR at 'B-';
-- Secured Revolver at 'BB-/RR1';
-- Second lien secured notes at 'BB-/RR1';
-- Senior unsecured notes at 'CCC+/RR5';
-- Junior subordinated debt at 'CCC/RR6'.
The Rating Outlook is Stable.
The Recovery Rating (RR) of 'RR1' on BZH's secured credit revolving
credit facility and second-lien secured notes indicates outstanding
recovery prospects for holders of these debt issues. The 'RR5' on
BZH's senior unsecured notes indicates below-average recovery
prospects for holders of these debt issues. BZH's exposure to
claims made pursuant to performance bonds and joint venture debt
and the possibility that part of these contingent liabilities would
have a claim against the company's assets were considered in
determining the recovery for the unsecured debtholders. The 'RR6'
on the company's junior subordinated notes indicates poor recovery
prospects for holders of these debt issues in a default scenario.
Fitch applied a liquidation value analysis for these recovery
ratings.
BETHEL CATHEDRAL: Voluntary Chapter 11 Case Summary
---------------------------------------------------
Debtor: Bethel Cathedral of Faith Word Center International
1031 MLK Jr Blvd
Grenada, MS 38901
Case No.: 15-13086
Chapter 11 Petition Date: September 2, 2015
Court: United States Bankruptcy Court
Northern District of Mississippi (Aberdeen)
Judge: Hon. Jason D. Woodard
Debtor's Counsel: Robert Gambrell, Esq.
GAMBRELL & ASSOCIATES, PLLC
101 Ricky D Britt Blvd., Suite 3
Oxford, MS 38655
Tel: 662-281-8800
Email: rg@ms-bankruptcy.com
Total Assets: $1.14 million
Total Liabilities: $528,000
The petition was signed by Alex M Turner, chief executive officer.
The Debtor did not include a list of its largest unsecured
creditors when it filed the petition.
BIG SKY AUTOMATION: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Big Sky Automation, LLC
P.O. Box 860023
Plano, TX 75086
Case No.: 15-41611
Chapter 11 Petition Date: September 2, 2015
Court: United States Bankruptcy Court
Eastern District of Texas (Sherman)
Judge: Hon. Brenda T. Rhoades
Debtor's Counsel: Eric A. Liepins, Esq.
ERIC A. LIEPINS P.C.
12770 Coit Road, Suite 1100
Dallas, TX 75251
Tel: (972) 991-5591
Email: eric@ealpc.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Eric Benavides, managing member.
A list of the Debtor's 20 largest unsecured creditors is available
for free at http://bankrupt.com/misc/txeb15-41611.pdf
BOAZ ELDERLY: Moody's Cuts Rating on Series 1978 Bonds to 'Ba1'
---------------------------------------------------------------
Moody's Investors Service has downgraded to Ba1 from Baa3 Boaz
Elderly Housing Corporation's (AL) Housing Development Revenue
Bonds, Series 1978 (Section 8 Assisted - Manor House Project).
$1,350,000 of outstanding debt affected. The outlook has been
revised to negative.
This rating action concludes the review for downgrade initiated on
July 9, 2015 and removes the bonds from review for downgrade.
SUMMARY RATING RATIONALE
The rating is based on the substantial decrease in the surplus
fund, weak financial performance and the rising capital needs of
the project. We maintain the expectation that there will be
sufficient monies from the surplus fund and debt service reserve
fund to pay debt service through bond maturity on 8/1/2019.
OUTLOOK
The outlook on the bonds is negative due to the project's need for
further capital repair and additional funds to meet all
obligations.
WHAT COULD MAKE THE RATING GO UP
-- Several periods of substantial debt service coverage growth.
WHAT COULD MAKE THE RATING GO DOWN
-- Further deterioration of the surplus fund from an increase in
operating expenses or capital needs.
-- Projections demonstrating need to tap debt service reserve
fund to pay debt service
OBLIGOR PROFILE
The Elderly Housing Corporation of Boaz was incorporated in January
1978, as an Alabama not-for-profit corporation for the purpose of
providing decent safe and sanitary housing for elderly and
handicapped persons of low-income in the City of Boaz, Alabama.
LEGAL SECURITY
The bonds are a special obligation of the issuer, secured by rental
revenue, Section 8 HAP payments, and all funds pledged under the
bond indenture.
BTB CORP: Must Serve Plan Documents to Banco Popular
----------------------------------------------------
U.S. Bankruptcy Judge Mildred Caban Flores granted Banco Popular de
Puerto Rico's motion requesting to be served with a copy of the
disclosure statement and plan to be filed by BTB Corporation in its
Chapter 11 case.
According to a court filing, the Debtor expects to file a plan by
Sept. 14, 2015.
Banco Popular's representatives can be reached at:
Banco Popular PR-Special Loans
PO Box 362708
San Juan, PR 00936-2708
Tel: (787) 764-3983
Fax: (787) 281-4140
Migadlia Effie Guasp, Esq.
E-mail: migdalia.guasp@popular.com
July 30 Status Report
Ahead of the status conference scheduled for Aug 5, 2015, the
Debtor on July 30 submitted a status report, disclosing:
a. The Debtor's business is dedicated to the sale of liquid
asphalt;
b. The reason for filing the captioned bankruptcy was the refusal
of the Debtor's secured lender in renewing the line of credit and
the issuance by said bank of letters foreclosing on Debtor's
receivables;
c. The Debtor is not a small business as defined in 11 U.S.C. 101
(51C);
d. Debtor will file a disclosure statement and plan on or before
Sept. 14, 2014;
e. All professional fees are expected to be approximately
$60,000;
f. No significant event is anticipated; and
g. The Debtor does not foresee a need for future status
conferences.
About BTB Corporation
BTB Corporation sought Chapter 11 protection (Bankr. D.P.R. Case
No. 15-03681) in Old San Juan, Puerto Rico, on May 17, 2015.
Samuel Lizardi signed the petition as interim president. The
Debtor disclosed total assets of $16.5 million and total
liabilities of $13.2 million.
BTB said it sought bankruptcy protection as it is unable to meet
obligations as they mature, and creditors are threatening suit and
have threatened to undertake steps to obtain possession of its
assets.
The Debtor tapped Alexis Fuentes Hernandez, Esq., at Fuentes Law
Offices, LLC, as its counsel.
BUNKERS INTERNATIONAL: Wants to Pay $58,601 in Healthcare Premiums
------------------------------------------------------------------
Bunkers International Corp. seeks Bankruptcy Court authority to pay
$58,601 in healthcare premiums as employees' healthcare coverage
could be cancelled and benefits could be rejected.
Subsequent to the Petition Date, Wells Fargo froze the Debtor's
bank account thus the payment of the Debtor's employees' healthcare
premiums due to United Healthcare and Aetna in the amount of
$58,601 did not clear.
About Bunkers International
Based in Lake Mary, Florida, Bunkers International trades and
provides fuel for ships at sea. It provides physical supply,
trading, and brokering services from a number of global locating
including those in the U.S., Singapore, Greece, and the United
Kingdom, and says it is the largest marine fuel supplier in
Colombia through its BunkersOil Colombia joint venture with Vanoil,
S.A. The Company started in Colombia in 1995.
Bunkers International Corp. and three affiliates sought Chapter 11
bankruptcy protection (Bankr. M.D. Fla. Proposed Lead Case No.:
15-07397) on Aug. 28, 2015. The petition was signed by John T.
Canal as president/CEO. The Debtors estimated assets of $10
million to $50 million and liabilities of at least $10 million.
Latham, Shuker, Eden & Beaudine, LLP represents the Debtors as
counsel.
BUNKERS INTERNATIONAL: Wants to Use $3.18 Million Cash Collateral
-----------------------------------------------------------------
Bunkers International Corp., Americas Bunkering, LLC, Atlantic Gulf
Bunkering, LLC and Dolphin Marine Fuels, LLC seek authority from
the Bankruptcy Court to use approximately $3,182,030 of cash
collateral to continue to operate their businesses for the next
four weeks. The Debtors will use the Cash Collateral to make
payroll, purchase inventory, and pay other ordinary course expenses
to maintain the marine fuel supply businesses of AGB and Dolphin
Marine.
The Cash Collateral the Debtors seek to use comprised of cash on
hand and funds to be received that are encumbered by PNC Bank,
N.A.'s lien.
As adequate protection for the use of Cash Collateral, the Debtors
propose to grant PNC a replacement lien to the extent of any
diminution in value, with such lien to have the same validity,
extent, and priority as its pre-petition lien. The Debtors
maintain PNC is over-secured by their combined cash, inventory, and
accounts receivable and they will operate on a positive cash flow
basis during the interim four-week period.
As of the Petition Date, the Debtors owed PNC approximately
$13,000,000 in outstanding principal and interest, which is secured
by a security interest on their combined cash, inventory, and
accounts receivable, among other things.
As of the Petition Date, the Debtors collectively had $372,720 in
cash on hand, and $12,557,000 in accounts receivable. AGB and
Dolphin Marine have inventory of approximately $5,886,496. Bunkers
had no inventory as of the Petition Date.
About Bunkers International
Based in Lake Mary, Florida, Bunkers International trades and
provides fuel for ships at sea. It provides physical supply,
trading, and brokering services from a number of global locating
including those in the U.S., Singapore, Greece, and the United
Kingdom, and says it is the largest marine fuel supplier in
Colombia through its BunkersOil Colombia joint venture with Vanoil,
S.A. The Company started in Colombia in 1995.
Bunkers International Corp. and three affiliates sought Chapter 11
bankruptcy protection (Bankr. M.D. Fla. Proposed Lead Case No.:
15-07397) on Aug. 28, 2015. The petition was signed by John T.
Canal as president/CEO. The Debtors estimated assets of $10
million to $50 million and liabilities of at least $10 million.
Latham, Shuker, Eden & Beaudine, LLP represents the Debtors as
counsel.
CANNON ELECTRIC: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Cannon Electric Company
51619 Industrial Drive, Suite A
Macomb, MI 48402-4027
Case No.: 15-53088
Chapter 11 Petition Date: September 2, 2015
Court: United States Bankruptcy Court
Eastern District of Michigan (Detroit)
Judge: Hon. Mark A. Randon
Debtor's Counsel: Todd M. Halbert, Esq.
24359 Northwestern Hwy., Suite 250
Southfield, MI 48075
Tel: (248) 356-6204
Email: toddmhalbert@msn.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Brian S. Lewis, president.
A list of the Debtor's 20 largest unsecured creditors is available
for free at http://bankrupt.com/misc/mieb15-53088.pdf
CARBON ENERGY: Noteholders Balk at US Trustee's Conversion Bid
--------------------------------------------------------------
James K. Kreutz and Associates Inc. ("trustee") and secured
creditors/noteholders attorneys for The Arthur V. Adams Trust et
al. ("noteholders") tell the U.S. Bankruptcy Court for the District
of Nevada that conversion of Carbon Energy Holdings inc., and
Carbon Energy Reserve Inc.'s Chapter 11 cases to Chapter 7
proceedings will serve no purpose.
The noteholders say the only asset of significance in the Debtors'
jointly administered cases is Carbon Energy Reserve's interest in
the coal assets. The trustee, presumably, has been attempting to
sell the coal assets since his appointment. Even if the trustee
has not actively been marketing the coal assets, no other party in
interest has brought forth and interested buyer for the coal
assets. The conversion of the cases to Chapter 7 will only result
in even more delay, according to the noteholders.
As reported in the Troubled Company Reporter on Aug. 13, 2015,
Tracy Hope Davis, the United States Trustee for Region 17, asked
the U.S. Bankruptcy Court to convert the Chapter 11 cases to ones
under Chapter 7 of the Bankruptcy Code, or dismiss the cases based
on the Debtors' failure to confirm a plan within the time allowed
for small business cases under the Bankruptcy Code.
The U.S. Trustee explained that more than 300 days have passed
since the petition was filed and the Debtors have not filed a plan.
The U.S. Trustee has not appointed an unsecured creditors'
committee and no order has been entered to extend the time periods
for confirmation of a plan in a small business case. In this case,
the deadline for the Debtors to file a plan pursuant to 11 U.S.C.
Section 1121(e)(2) was April 23, 2012, and no order was entered
prior to that date extending the filing deadline. It is now too
late to file a plan, the U.S. Trustee said.
The hearing to consider the conversion request is scheduled for
September 9, 2015, at 2:00 p.m.
The U.S. Trustee is represented by:
Nicholas Strozza
William B. Cossitt
Justice Department, US Trustees Office
300 Booth Street, #3009
Reno NV 89509
Tel:(775) 784-5335
Fax:(775) 784-5531
Email: USTPRegion17.RE.ECF@usdoj.gov
About Carbon Energy Holdings
Based in Wickenburg, Arizona, Carbon Energy Holdings LLC and Carbon
Energy Reserve Inc. filed for Chapter 11 bankruptcy (Bankr. D. Nev.
Case Nos. 11-52099 and 11-52101) on June 28, 2011. Judge Bruce T.
Beesley presides over the cases. Carbon Energy Holdings Inc.
disclosed $0 in assets and $146,270 in liabilities in its schedules
filed in court. Carbon Energy Reserve Inc. scheduled $40,000,000
in assets and $2,009,573 in liabilities. Kolesar & Leatham Chtd.
acts as the Debtors' general counsel.
CARSON RDA SUCCESSOR: Moody's Hikes 2006A TABs Rating From Ba1
--------------------------------------------------------------
Moody's Investors Service has upgraded to Baa1 from Ba1 the
Successor Agency to the Carson Redevelopment Agency's (CA) Tax
Allocation Bonds, Series 2006A, Project Area #4.
On June 24, 2015, in connection with the release of our Tax
Increment Debt methodology, we placed the ratings for nearly all
California tax allocation bonds (TABs) on review for upgrade,
including this successor agency's (SA) TABs. This rating action
completes our review for this SA.
Three years post-dissolution, the administrative risks related to
the payment of debt service have significantly lessened, so we are
now placing greater weight on the fundamental project area
characteristics and some of the positive features of the
dissolution legislation, including the closed lien status of the
debt and the availability of a portion of tax increment (TI)
revenues previously restricted for use on affordable housing to pay
debt service.
SUMMARY RATING RATIONALE
The upgrade to Baa1 takes into account the modestly sized yet
growing incremental assessed value (AV) of the project area which
reflects a healthy growth trend over the last three years, sound
debt service coverage, and above average socioeconomic profile of
area residents. The rating action also incorporates the project
area's weak ratio of incremental AV to total AV and high taxpayer
concentration.
The rating factors in the SA's successful adaptation to post
dissolution processes and administrative procedures and our
expectation that this will continue. The rating also incorporates
our generally positive assessment of the implementation of the
legislation that dissolved redevelopment agencies (RDAs) by most
successor agencies over the last three years, leading to timely
payment of debt service on California TABs.
In 2012, state legislation dissolved all California RDAs, replacing
them with "successor agencies" to serve as fiduciary agents.
Dissolution effectively changed the flow of funds and processes
around the payment of debt service on TABs. Tax increment revenue
is placed in trust with the county auditor-controller, who makes
semi-annual distributions of funds sufficient to pay debt service
on TABs and other "enforceable obligations" approved by the state.
OUTLOOK
Outlooks are typically not assigned to local governments with this
amount of debt outstanding
WHAT COULD MAKE THE RATING GO UP
-- Sizable increase in incremental AV of the project area
-- Improved incremental AV to total AV ratio
-- Material improvement in debt service coverage
WHAT COULD MAKE THE RATING GO DOWN
-- Protracted decline in incremental AV
-- Erosion of debt service coverage levels
-- Additional legislative or administrative changes that create
uncertainty as to the timely payment of debt service
OBLIGOR PROFILE
The Successor Agency to the Carson Redevelopment Agency is a
separate legal entity from the City of Carson. The SA is
responsible for winding down the operations of the former RDA,
making payments on state-approved "enforceable obligations" and
liquidating any unencumbered assets to be distributed to other
local taxing entities.
LEGAL SECURITY
The legal security for the rated bonds is tax increment revenue
from the project area(s) net of housing set asides.
While not legally pledged, the dissolution laws permit TAB debt
service to be paid from TI revenues deposited in the SA's
Redevelopment Property Tax Trust Fund (RPTTF). This includes the
20% of TI revenue previously considered restricted housing set
aside.
The SA is responsible for notifying the county auditor-controller
of any shortfall in TI revenue expected to be deposited in the
RPTTF needed for the payment of TAB debt service that would result
from the disbursal of the monies for subordinated pass-through
payments, so that the necessary subordination can be effected
through changes to the usual flow of funds.
CLARK RENTALS: Case Summary & 2 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Clark Rentals, Inc.
dba Clark Rentals
dba Auto Oasis Car Wash
2995 Cecil Hard Highway
Mahaffey, PA 15757
Case No.: 15-70613
Chapter 11 Petition Date: September 2, 2015
Court: United States Bankruptcy Court
Western District of Pennsylvania (Johnstown)
Judge: Hon. Jeffery A. Deller
Debtor's Counsel: Kevin J. Petak, Esq.
SPENCE CUSTER SAYLOR WOLFE & ROSE, LLC
P.O. Box 280
Johnstown, PA 15907-0280
Tel: 814-536-0735
Fax: 814-539-1423
Email: kpetak@spencecuster.com
- and -
James R. Walsh, Esq.
SPENCE CUSTER SAYLOR WOLFE & ROSE, LLC
400 U.S. Bank Building
P.O. Box 280
Johnstown, PA 15907
Tel: 814-536-0735
Fax: 814-539-1423
Email: jwalsh@spencecuster.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Robert Jeremy Clark, vice president.
A list of the Debtor's two largest unsecured creditors is available
for free at http://bankrupt.com/misc/pawb15-70613.pdf
CORINTHIAN COLLEGES: Bank Objects Investigation Extension Bid
-------------------------------------------------------------
The Bank of America, N.A., as Administrative Agent for the
Prepetition Lenders, objects to the U.S. Trustee's motion to extend
the investigation termination date pursuant to the order
authorizing Corinthian Colleges, Inc., et al., to use cash
collateral.
The Administrative Agent asserts that the requested extension
represents an inappropriate attempt to circumvent the proceedings,
infuse uncertainty into the process and unduly delay closure for
all parties. Granting the U.S. Trustee an extension of the
Investigation Termination Date would penalize the Prepetition
Secured Parties who would be forced to bear the risk and expense
associated with the extended investigation period. The U.S.
Trustee's failure to diligently investigate the Trust Fund
Objections after due notice does not constitute cause for
extension, the Administrative Agent adds.
Bank of America, N.A. is representd by:
Jeremy W. Ryan, Esq.
Etta R. Mayers, Esq.
POTTER ANDERSON & CORROON LLP
1313 North Market Street, Sixth Floor
P.O. Box 951
Wilmington, DE 19899-0951
Tel: (302) 984-6000
Fax: (302) 658-1192
Email: jryan@potteranderson.com
emayers@potteranderson.com
-- and --
Jennifer C. Hagle, Esq.
Anna Gumport, Esq.
SIDLEY AUSTIN LLP
555 West Fifth Street, Suite 4000
Los Angeles, CA 90013
Tel: (213) 896-6000
Fax: (213) 896-6600
Email: jhagle@sidley.com
agumport@sidley.com
About Corinthian Colleges
Corinthian Colleges, Inc., Pegasus Education, Inc., and 23
affiliated entities filed voluntary Chapter 11 petitions (Bankr. D.
Del. Lead Case No. 15-10952) on May 4, 2015, to complete an orderly
wind down of its operations. The cases are jointly administered
Case No. 15-10952.
Judge Kevin J. Carey presides over the case. Richards, Layton &
Finger, P.A., represents the Debtors in their restructuring
efforts; FTI Consulting, Inc., serves as restructuring advisors;
and Rust Consulting/Omni Bankruptcy serves as claims and noticing
agent.
Corinthian Colleges, Inc., disclosed $721,596,789 in assets and
$2,929,448,278 in liabilities as of the Chapter 11 filing.
The U.S. Trustee for Region 3 appointed five creditors to serve on
the official committee of unsecured creditors.
Judge Kevin J. Carey of the U.S. Bankruptcy Court for the District
of Delaware, on Aug. 28, issued an order confirming Corinthian
Colleges, Inc., et al.'s Third Amended and Modified Combined
Disclosure Statement and Chapter 11 Plan of Liquidation.
The Combined Plan incorporates a compromise between the Debtors,
the Official Committee of Unsecured Creditors, the Student
Committee and the Prepetition Secured Parties as to the
Distribution of the Debtors' assets already liquidated or to be
liquidated over time to the Holders of Allowed Claims in
accordance
with the terms of the Combined Plan and Disclosure Statement and
the priority of claims provisions of the Bankruptcy Code.
The Combined Plan provides for the Prepetition Secured Parties to
release any liens they may otherwise have upon, and forgo any
recoveries from, the Student Refund Reserve, thereby enabling the
Debtors to transfer their rights and interest in those funds (in
the approximate amount of $4.3 million) to the Student Trust.
CORINTHIAN COLLEGES: Class 1 Claims Temporarily Allowed for Plan
----------------------------------------------------------------
The United States Bankruptcy Court for the District of Delaware
approved a stipulation between Corinthian Colleges, Inc., and its
debtor affiliates, and the Bank of America, N.A, as Administrative
Agent for the Prepetition Lenders, which agreement gave temporary
authority to the Administrative Agent to vote for the Class 1
Prepetition Lenders Secured Claims and Class 4 Prepetition Lenders
Deficiency Claims on behalf of the Holders of those Claims with
respect to the Second Modified Plan.
The Class 1 Prepetition Lenders Secured Claims and Class 4
Prepetition Lenders Deficiency Claims will be deemed temporarily
allowed, solely for purposes of voting on the Second Modified Plan,
in the following amounts and classifications: (i) with respect to
Class 1 Prepetition Lenders Secured Claims, in an amount of
$6,000,000, and (ii) with respect to Class 4 Prepetition Lenders
Deficiency Claims, in an amount of $91,000,000.
The Debtors assert that the temporary allowance of the Voting
Claims for voting purposes only pursuant to this Stipulation is
without prejudice to each of the Parties' rights and obligations
under and pursuant to the Second Modified Plan, applicable
bankruptcy and nonbankruptcy law, and equitable principles as to
the Class 1 Prepetition Lenders Secured Claims and Class 4
Prepetition Lenders Deficiency Claims.
The Debtors are represented by:
Mark D. Collins, Esq.
Michael J. Merchant, Esq.
Marisa A. Terranova, Esq.
Amanda R. Steele, Esq.
RICHARDS, LAYTON & FINGER, P.A.
920 N. King Street
Wilmington, Delaware 19801
Tel: (302)651-7700
Fax: (302)651-7701
Email: collins@rlf.com
merchant@rlf.com
terranova@rlf.com
steele@rlf.com
Bank of America, N.A. is representd by:
Jeremy W. Ryan, Esq.
Etta R. Mayers, Esq.
POTTER ANDERSON & CORROON LLP
1313 North Market Street, Sixth Floor
P.O. Box 951
Wilmington, DE 19899-0951
Tel: (302) 984-6000
Fax: (302) 658-1192
jryan@potteranderson.com
emayers@potteranderson.com
-- and --
Jennifer C. Hagle, Esq.
Anna Gumport, Esq.
SIDLEY AUSTIN LLP
555 West Fifth Street, Suite 4000
Los Angeles, CA 90013
Tel: (213) 896-6000
Fax: (213) 896-6600
Email:jhagle@sidley.com
agumport@sidley.com
About Corinthian Colleges
Corinthian Colleges, Inc., Pegasus Education, Inc., and 23
affiliated entities filed voluntary Chapter 11 petitions (Bankr. D.
Del. Lead Case No. 15-10952) on May 4, 2015, to complete an orderly
wind down of its operations. The cases are jointly administered
Case No. 15-10952.
Judge Kevin J. Carey presides over the case. Richards, Layton &
Finger, P.A., represents the Debtors in their restructuring
efforts; FTI Consulting, Inc., serves as restructuring advisors;
and Rust Consulting/Omni Bankruptcy serves as claims and noticing
agent.
Corinthian Colleges, Inc., disclosed $721,596,789 in assets and
$2,929,448,278 in liabilities as of the Chapter 11 filing.
The U.S. Trustee for Region 3 appointed five creditors to serve on
the official committee of unsecured creditors.
Judge Kevin J. Carey of the U.S. Bankruptcy Court for the District
of Delaware, on Aug. 28, issued an order confirming Corinthian
Colleges, Inc., et al.'s Third Amended and Modified Combined
Disclosure Statement and Chapter 11 Plan of Liquidation.
The Combined Plan incorporates a compromise between the Debtors,
the Official Committee of Unsecured Creditors, the Student
Committee and the Prepetition Secured Parties as to the
Distribution of the Debtors' assets already liquidated or to be
liquidated over time to the Holders of Allowed Claims in
accordance
with the terms of the Combined Plan and Disclosure Statement and
the priority of claims provisions of the Bankruptcy Code.
The Combined Plan provides for the Prepetition Secured Parties to
release any liens they may otherwise have upon, and forgo any
recoveries from, the Student Refund Reserve, thereby enabling the
Debtors to transfer their rights and interest in those funds (in
the approximate amount of $4.3 million) to the Student Trust.
CORINTHIAN COLLEGES: Says Automatic Stay Applies to States' Suits
-----------------------------------------------------------------
Corinthian Colleges, Inc., and its debtor affiliates, assert that
the automatic stay imposed in their bankruptcy cases apply to
states' actions and ask the United States Bankruptcy Court for the
District of Delaware to continue the hearing on the motions.
The Commonwealth of Massachusetts, the State of California, the
California Bureau for Private Postsecondary Education, and the
State of Wisconsin, filed motions asking the Bankruptcy Court to
declare that the automatic stay do not apply to their actions
against the Debtors.
The Debtors explain that they will distribute all their assets in
accordance with the terms of the Plan of Liquidation, will
immediately thereafter dissolve, and the automatic stay generally
applicable to the Debtors will terminate. Thus, the Debtors
assert, the relief requested under the Stay Motions could be
substantially moot if the Bankruptcy Court confirms the plan and
the plan is thereafter consummated. The ultimate disposition of
the Stay Motions, as well as the completion of the Chapter 11
cases, hinders on the Court’s decision made at or soon after the
Confirmation Hearing, the Debtors argue.
The State of California objects to the Debtors' argument, asserting
that is procedurally improper because it does not comply with the
motion requirements under the Delaware Bankruptcy Local Rules.
Moreover, even if the Request were proper, it should still be
denied because it presents no valid basis for a continuance, the
State of California said. The Debtors' eleventh-hour request for
a continuance of the Stay Motion and extension of their opposition
deadline is improper and baseless, the State of California said.
The Commonwealth of Massachusetts also objected stating that while
Debtors call their filing a "Request to Continue Motions," it is
also a request to continue the stays of the States’ consumer
protection actions against Debtors. These stays are unlawful and
substantially injure the States and Debtors' students, therefore
the Debtors' Request should be denied, the Commonwealth of
Massachusetts argued.
The Debtors are represented by:
Mark D. Collins, Esq.
Michael J. Merchant, Esq.
Marisa A. Terranova, Esq.
Amanda R. Steele, Esq.
RICHARDS, LAYTON & FINGER, P.A.
920 N. King Street
Wilmington, Delaware 19801
Telephone: (302)651-7700
Facsimile: (302)651-7701
Email: collins@rlf.com
merchant@rlf.com
terranova@rlf.com
steele@rlf.com
The People of the State of California is represented by:
Kamala D. Harris, Esq.
Bernard A. Eskandari, Esq.
Nicholas G. Campins, Esq.
DEPUTY ATTORNEYS GENERAL
300 South Spring Street, Suite 1702
Los Angeles, CA 90013
Tel: (213) 897-2652
Fax: (213) 897-4951
Email: bernard.eskandari@doj.ca.gov
The Commonwealth of Massachusetts is represented by:
MAURA HEALEY
PETER LEIGHT
GLENN KAPLAN
ASSISTANT ATTORNEYS GENERAL
One Ashburton Place, 18th Floor
Boston, MA 02108
Tel: (617) 727-2200
Fax: (617) 722-0184
Email: peter.leight@state.ma.us
About Corinthian Colleges
Corinthian Colleges, Inc., Pegasus Education, Inc., and 23
affiliated entities filed voluntary Chapter 11 petitions (Bankr. D.
Del. Lead Case No. 15-10952) on May 4, 2015, to complete an orderly
wind down of its operations. The cases are jointly administered
Case No. 15-10952.
Judge Kevin J. Carey presides over the case. Richards, Layton &
Finger, P.A., represents the Debtors in their restructuring
efforts; FTI Consulting, Inc., serves as restructuring advisors;
and Rust Consulting/Omni Bankruptcy serves as claims and noticing
agent.
Corinthian Colleges, Inc., disclosed $721,596,789 in assets and
$2,929,448,278 in liabilities as of the Chapter 11 filing.
The U.S. Trustee for Region 3 appointed five creditors to serve on
the official committee of unsecured creditors.
Judge Kevin J. Carey of the U.S. Bankruptcy Court for the District
of Delaware, on Aug. 28, issued an order confirming Corinthian
Colleges, Inc., et al.'s Third Amended and Modified Combined
Disclosure Statement and Chapter 11 Plan of Liquidation.
The Combined Plan incorporates a compromise between the Debtors,
the Official Committee of Unsecured Creditors, the Student
Committee and the Prepetition Secured Parties as to the
Distribution of the Debtors' assets already liquidated or to be
liquidated over time to the Holders of Allowed Claims in
accordance
with the terms of the Combined Plan and Disclosure Statement and
the priority of claims provisions of the Bankruptcy Code.
The Combined Plan provides for the Prepetition Secured Parties to
release any liens they may otherwise have upon, and forgo any
recoveries from, the Student Refund Reserve, thereby enabling the
Debtors to transfer their rights and interest in those funds (in
the approximate amount of $4.3 million) to the Student Trust.
CRP-2 HOLDINGS: U.S. Bank Has Objection to Levenfeld Application
----------------------------------------------------------------
The Official Committee of Unsecured Creditors of CRP-2 Holdings AA,
L.P., filed an application to employ Levenfeld Pearlstein, LLC as
its lead bankruptcy counsel, nunc pro tunc to Aug. 3, 2015.
U.S. Bank, National Association, in its capacity as trustee for the
registered holders of J.P. Morgan Chase Commercial Mortgage
Securities Trust 2006-LDP9, Commercial Mortgage Pass-Through
Certificates, Series 2006-LDP9, by and through CWCapital Asset
Management LLC, solely in its capacity as Special Servicer,
submitted a limited objection to the application, stating that the
application sought payment of a retainer of $70,000 without
identifying its source.
U.S. Bank also said that the Debtor failed to meet the conditions
necessary to extend the maturity date and did not exercise its
option to extend the maturity of the loan. The loan matured on
Dec. 1, 2014, the Debtor did not repay the indebtedness and,
accordingly, has been in continuous default since the maturity
date. As of July 21, 2015, the indebtedness owed by the Debtor to
the Trust under the loan documents totals more than $152 million.
The Aug. 25 hearing on the application was continued to Sept. 1.
The hourly rates for Levenfeld Pearlstein's attorneys and legal
assistants are:
Partners $400 - $690
Associates $315 - $395
Paralegals $210 - $275
The two primary attorneys assigned to the case will be Jonathan
Friedland and Elizabeth Vandesteeg, whose discounted hourly rates
for this matter are $550 and $475, respectively.
Levenfeld Pearlstein will also charge its clients for expenses and
disbursements incurred in connection with the client's case.
To the best of the Committee's knowledge, Levenfeld Pearlstein is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
The firm can be reached at:
Elizabeth B. Vandesteeg, Esq.
Jonathan P. Friedland, Esq.
Elizabeth B. Vandesteeg, Esq.
LEVENFELD PEARLSTEIN, LLC
2 N. LaSalle St., Suite 1300
Chicago, IL 60602
Tel: (312) 346-8380
Fax: (312) 346-8434
E-mail: jfriedland@lplegal.com
evandesteeg@lplegal.com
U.S. Bank is represented by:
Faye B. Feinstein, Esq.
Gregory A. Cross, Esq.
Frederick W. H. Carter, Esq.
Catherine Guastello Allen, Esq.
VENABLE LLP
750 East Pratt Street, Suite 900
Baltimore, MD 21202
Tel: (410) 244-7446
Fax: (410) 244-7742
E-mail: gacross@venable.com
fwhcarter@venable.com
cgallen@venable.com
About CRP-2 Holdings
CRP-2 Holdings AA, L.P., a Delaware limited partnership that was
formed in May of 2006 for the primary purpose of acquiring and
managing real property, filed a Chapter 11 bankruptcy petition
(Bankr. N.D. Ill. Case No. 15-24683) on July 21, 2015. Neil
Waisnor signed the petition as vice president. FrankGecker LLP
serves as the Debtor's counsel. The Debtor disclosed total assets
of $171,349,208 and total liabilities of $166,637,095. Judge
Donald R. Cassling is assigned to the case.
The U.S. Trustee appointed two creditors to serve on the official
committee of unsecured creditors.
CUE & LOPEZ CONSTRUCTION: Seeks to Alter Confirmed Plan
-------------------------------------------------------
Cue & Lopez Construction, Inc., won confirmation of its
reorganization plan in October 2014, but the plan has not yet been
substantially consummated. It is now asking the U.S. Bankruptcy
Court for District of Puerto Rico to authorize post-confirmation
modifications to the proposed treatment of Oriental Bank's secured
claim.
The Debtor on June 30, 2014 filed its plan of reorganization. The
Court on Oct. 29, 2014, confirmed the Plan.
On April 29, 2013, notified on August 1, 2013, the Court of First
Instance of the Commonwealth of Puerto Rico, San Juan Section,
pursuant to a stipulation, inter alia, subscribed by Debtor and
Oriental Bank (the "Stipulation"), entered judgment in Case Number
KCD2013-0668, Oriental Bank v. Cue & Lopez Contractors Inc.; Cue &
López Construction Inc. et als., (the "Judgment") providing that
upon default of the Stipulation by Debtor, Oriental Bank could
proceed with the foreclosure of its mortgages on the Debtor's real
properties (the "Properties"). Since Debtor defaulted under the
terms of the Stipulation, pursuant to the Judgment, Oriental Bank
is entitled to foreclose on the mortgages on the Properties.
The Plan provides for this classification and treatment of
Oriental Bank:
(a) Impairment and Voting - Class 3 is impaired under the
Plan and is entitled to vote to accept or reject the Plan.
(b) Distribution- Oriental Bank's Claim, as may be finally
allowed, partially secured by the following collateral:
(i) Residential Unit, Penthouse No. 515, at Hills View
Plaza Condominium, Frailes Ward, Guaynabo, Puerto Rico with an
estimated disposition value of $237,527;
(ii) Residential Unit (Apartment No. 633), at Vistas de
Gurabo, Navarro Ward, Gurabo, Puerto Rico with an estimated
disposition value of $132,434;
(iii) Residential Unit at Urb. Gran Palm II, Sabana Ward,
Vega Alta, Puerto Rico, with an estimated disposition value of
$174,825;
(iv) The remaining retainage for $311,587 corresponding to
the "Casa Maggiore Project;
shall be paid on or before the Effective Date, by the
transfer to Oriental Bank of the above properties, with a combined
estimated value of $856,373, and the assignment of the remaining
retainage set forth above. In addition, the Debtor will pay
Oriental Bank $100,000 arising from the retainage assigned by
Debtor to Oriental Bank as to the Casa Maggiore Project, not
property of Debtor's estate, paid by Casa Maggiore, Inc., to Debtor
and returned by Debtor thereto. The $100,000 will be paid by a
payment of $25,000 on the Effective Date, the balance to be paid
through twelve consecutive equal monthly payments of $3,125 due on
the 30th day of the subsequent twelve month and a balloon payment
for $37,500 on the 30th day of the 13 months after the Effective
Date. Oriental Bank's Class 5 Claim for $4,192,778, which includes
Oriental Bank's deficiency claim under Class 3, and Oriental Bank's
current unsecured claim, will he dealt with under Class 5 of the
Plan.
The Debtor will submit quarterly operating reports to
Oriental Bank detailing Debtor's revenues, expenses, and results of
operations, during the term of the Plan."
The Debtor as the proponent of the Plan, with the consent of
Oriental Bank, wishes to modify Oriental Bank's treatment to
provide the secured claim will be paid on or before the Effective
Date, by the transfer to Oriental Bank of the three real properties
described above, with a combined estimated value of $856,373,
either by deeds of transfers or within 12 months of the Effective
Date through a mortgage foreclosure process in execution of the
judgment issued on April 29, 2013, notified on Aug. 1, 2013, by the
Court of First Instance of the Commonwealth of Puerto Rico, San
Juan Section, in case number KCD2013-0668, titled Oriental Bank v.
Cue & Lopez Contractors Inc. ; Cue & Lopez Construction Inc. et
als., as Oriental Bank shall elect in its sole and absolute
discretion. The transfer of all or either of the three real
properties to Oriental Bank by either method shall have the
benefits of the provisions of 11 U.S.C. Sec. 1146(a). The
automatic stay provisions of 11 USC Sec. 362(a) will be deemed
lifted for the event that Oriental Bank elects to proceed with the
foreclosure of the properties. In addition, Debtor will pay
Oriental Bank $100,000 arising from the retainage assigned by
Debtor to Oriental Bank as to the Casa Maggiore Project, not
property of Debtor's estate, paid by Casa Maggiore, Inc. to Debtor
and returned by Debtor thereto. The $100,000.00 will be paid by a
payment of $25,000 on the Effective Date, the balance to be paid
through 12 consecutive equal monthly payments of $3,125 due on the
30th day of the subsequent 12 months and a balloon payment for
$37,500 on the 30th day of the 13 month after the Effective Date.
Oriental Bank's Class 5 Claim for $4,192,778, which includes
Oriental Bank's deficiency claim under Class 3, and Oriental Bank's
current unsecured claim, will be dealt with under Class 5 of the
Plan.
On July 15, 2015, the Debtor transferred by deed to Oriental Bank,
the Vistas de Gurabo and Grand Palm II properties.
In order to further consummate the Plan as to Debtor's payment of
Oriental Bank's secured claim through the transfer of the
Properties, the Debtor and Oriental Bank agree that in the event
Oriental Bank chooses to proceed with the foreclosure process as to
the Hills View Plaza property and is either (a) the winning bidder
in the mortgage foreclosure process or (b) acquires the same if no
third party bidder bids and prevails, then the transfer of the
Hills View Plaza property will be considered a "transfer" for
purposes of applying the provisions of 11 U.S.C. Sec. 1146(a), as
the definition of transfer under the Bankruptcy Code includes the
voluntary or involuntary disposing of or parting with property or
an interest in property.
Charles A. Cuprill-Hernandez, Esq., at Charles A. Cuprill, P.S.C.
Law Offices, asserts that the proposed modification of the Plan,
does not affect any other creditor or party in interest, meets the
requirements of 11 U.S.C. Sec. 1122 and 1123 and will allow
Oriental Bank the option of either receiving the Hills View Plaza
property, through a transfer by deed or by a mortgage foreclosure
which for all purposes achieves the same results, as provided for
in the Plan.
Counsel for the Debtor can be reached at:
CHARLES A. CUPRILL, P.S.C. LAW OFFICES
Charles A. Cuprill-Hernandez
356 Fortaleza Street, Second Floor
San Juan, PR 00901
Tel: 787-977-0515
Fax: 787-977-0518
E-mail: ccuprill@cuprill.com
Attorneys for Oriental Bank can be reached at:
DE DIEGO LAW OFFICES, PSC
William Santiago-Sastre
PO BOX 79552
Carolina, PR 00984-9552
Tel: (787) 622-3942
Fax: (787) 622-3941
E-mail: wssbankruptcy@gmail.com
About Cue & Lopez
San Juan, Puerto Rico-based Cue & Lopez Construction, Inc., sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. D.P.R.
Case No. 13-08297) on Oct. 4, 2013. The case is assigned to Judge
Brian K. Tester.
Cue & Lopez Contractors, Inc., filed a separate Chapter 11 petition
(Case No. 13-08299) on the same date.
The Debtors are represented by Charles Alfred Cuprill, Esq., at
Charles A Curpill, PSC Law Office, in San Juan, Puerto Rico. CPA
Luis R. Carrasquillo & Co., P.S.C., serves as accountant.
Cue & Lopez Construction scheduled $13.3 million in total assets
and $17.5 million in total liabilities. The Chapter 11 petitions
were signed by Frank F. Cue Garcia, president.
DEWEY & LEBOEUF: Defense Says It Won't Call Any Witnesses
---------------------------------------------------------
Sara Randazzo, writing for The Wall Street Journal, reported that
attorneys for three former Dewey & LeBoeuf LLP leaders accused of
financial fraud told a judge that they won't call a single witness
to bolster their defense and plan to rest their case when the jury
returns on Sept. 7.
According to the report, the decision clears the way for closing
arguments to begin next week in the three-month-old case, which
accuses the now-defunct law firm's ex-managers of falsely inflating
the firm's finances to stay in compliance with $250 million in
debt.
The move comes as prosecutors said they plan to drop dozens of
falsifying business records counts against Dewey's former chief
financial officer, Joel Sanders, as well as counts against Dewey's
ex-chairman, Steven Davis, and former executive director, Stephen
DiCarmine, the report related.
As previously reported by The Troubled Company Reporter, citing The
Wall Street Journal, defense lawyers for three former Dewey &
LeBoeuf leaders accused of committing financial fraud failed get
the case tossed out on Sept. 1, as a judge ruled there was enough
evidence to send the matter to a jury for deliberation.
According to the report, New York state court Judge Robert Stolz
did reserve the right to dismiss some of the 100 counts against the
trio before sending it to the jury.
About Dewey & LeBoeuf
Dewey & LeBoeuf LLP sought Chapter 11 bankruptcy (Bankr. S.D.N.Y.
Case No. 12-12321) to complete the wind-down of its operations.
The firm had struggled with high debt and partner defections.
Dewey disclosed debt of $245 million and assets of $193 million in
its chapter 11 filing late evening on May 29, 2012.
Dewey & LeBoeuf LLP operated as a prestigious, New York City-
based, law firm that traced its roots to the 2007 merger of Dewey
Ballantine LLP -- originally founded in 1909 as Root, Clark & Bird
-- and LeBoeuf, Lamb, Green & MacCrae LLP -- originally founded in
1929. In recent years, more than 1,400 lawyers worked at the firm
in numerous domestic and foreign offices.
At its peak, Dewey employed about 2,000 people with 1,300 lawyers
in 25 offices across the globe. When it filed for bankruptcy,
only 150 employees were left to complete the wind-down of the
business.
Dewey's offices in Hong Kong and Beijing are being wound down.
The partners of the separate partnership in England are in process
of winding down the business in London and Paris, and
administration proceedings in England were commenced May 28. All
lawyers in the Madrid and Brussels offices have departed. Nearly
all of the lawyers and staff of the Frankfurt office have
departed, and the remaining personnel are preparing for the
closure. The firm's office in Sao Paulo, Brazil, is being
prepared for closure and the liquidation of the firm's local
affiliate. The partners of the firm in the Johannesburg office,
South Africa, are planning to wind down the practice.
The firm's ownership interest in its practice in Warsaw, Poland,
was sold to the firm of Greenberg Traurig PA on May 11 for
$6 million. The Pension Benefit Guaranty Corp. took $2 million of
the proceeds as part of a settlement.
Judge Martin Glenn oversees the case. Albert Togut, Esq., at
Togut, Segal & Segal LLP, represents the Debtor. Epiq Bankruptcy
Solutions LLC serves as claims and notice agent. The petition was
signed by Jonathan A. Mitchell, chief restructuring officer.
JPMorgan Chase Bank, N.A., as Revolver Agent on behalf of the
lenders under the Revolver Agreement, hired Kramer Levin Naftalis
& Frankel LLP. JPMorgan, as Collateral Agent for the Revolver
Lenders and the Noteholders, hired FTI Consulting and Gulf
Atlantic Capital, as financial advisors. The Noteholders hired
Bingham McCutchen LLP as counsel.
The U.S. Trustee formed two committees -- one to represent
unsecured creditors and the second to represent former Dewey
partners. The creditors committee hired Brown Rudnick LLP led by
Edward S. Weisfelner, Esq., as counsel. The Former Partners hired
Tracy L. Klestadt, Esq., and Sean C. Southard, Esq., at Klestadt &
Winters, LLP, as counsel.
FTI Consulting, Inc. was appointed secured lender trustee for the
Secured Lender Trust. Alan Jacobs of AMJ Advisors LLC, was named
Dewey's liquidation trustee. Scott E. Ratner, Esq., Frank A.
Oswald, Esq., David A. Paul, Esq., Steven S. Flores, Esq., at
Togut, Segal & Segal LLP, serve as counsel to the Liquidation
Trustee.
Dewey's liquidating Chapter 11 plan was approved by the bankruptcy
court in February 2013 and implemented in March. The plan created
a trust to collect and distribute remaining assets. The firm
estimated that midpoint recoveries for secured and unsecured
creditors under the plan would be 58.4 percent and 9.1 percent,
respectively.
DTS8 COFFEE: Settles $248,000 Debt with Former CEO
--------------------------------------------------
DTS8 Coffee Company, Ltd. entered into a debt settlement agreement
dated Aug. 28, 2015, with Sean Tan, a former director and chief
executive officer, to convert the debts owed by the Company
totalling $248,000, at the fair market price of $0.07 per share,
being the closing stock price at Aug. 28, 2015, for a total of
3,542,857 shares of the Company's common stock. No commissions or
underwriting discounts were paid in connection with the conversion
of the stock.
The shares were issued in reliance on an exemption from
registration provided by Section 4(2) and Rule 506(b) of Regulation
D under the Securities Act of 1933, as amended. The Company's
reliance on Rule 506(b) is based on the fact that there was no
solicitation, and the shares were sold in a private transaction to
a former officer and director of the Company.
About DTS8 Coffee
DTS8 Coffee Company, Ltd. (previously Berkeley Coffee & Tea, Inc.)
was incorporated in the State of Nevada on March 27, 2009.
Effective Jan. 22, 2013, the Company changed its name from
Berkeley Coffee & Tea, Inc., to DTS8 Coffee Company, Ltd. On
April 30, 2012, the Company acquired 100 percent of the issued and
outstanding capital stock of DTS8 Holdings Co., Ltd., a
corporation organized and existing since June 2008 under the laws
of Hong Kong and which owns DTS8 Coffee (Shanghai) Co., Ltd.
DTS8 Holdings, through its subsidiary DTS8 Coffee, is a gourmet
coffee roasting company established in June 2008. DTS8 Coffee's
office and roasting factory is located in Shanghai, China. DTS8
Coffee is in the business of roasting, marketing and selling
gourmet roasted coffee to its customers in Shanghai, and other
parts of China. It sells gourmet roasted coffee under the "DTS8
Coffee" label through distribution channels that reach consumers
at restaurants, multi-location coffee shops, and offices.
DTS8 Coffee reported a net loss of $3.8 million on $369,000 of
sales for the year ended April 30, 2015, compared to a net loss of
$2.3 million on $310,000 of sales for the year ended April 30,
2014.
As of April 30, 2015, the Company had $286,000 in total assets,
$1.10 million in total liabilities, all current, and a $781,000
total shareholders' deficit.
MaloneBailey, LLP, Houston, Texas, issued a "going concern"
qualification on the consolidated financial statements for the year
ended April 30, 2015, citing that the Company has suffered
recurring losses from operations, which raises substantial doubt
about its ability to continue as a going concern.
EDWARD PESTANA: Trial Court Ruling of Judicial Estoppel Affirmed
----------------------------------------------------------------
The Court of Appeals of California, Third District, San Joaquin,
affirmed the trial court's ruling that Edward Pestana was
judicially estopped from pursuing his breach of contract claim.
Michael Kelly, Jr., the successor trustee of Ernest Pestana's
trusts and a special administrator of Ernest's estate, filed a
complaint in San Joaquin County to dissolve Livermore Acres, Inc.,
a corporation owned by the late Ernest and his brother Edward
Pestana. Edward filed a cross-complaint against Livermore Acres
and against Michael and Ernest's widow Irene individually and as
trustees, alleging that Ernest breached a 1999 oral agreement to
pay Edward wages and a commission for certain land development
work.
The trial court in San Joaquin County ruled that Edward was
judicially estopped from pursuing a claim based on the alleged 1999
oral agreement because Edward did not disclose the claim in his
ongoing Chapter 11 bankruptcy proceeding.
The appellate court concluded that the trial court did not err in
ruling that Edward was judicially estopped from pursuing his breach
of contract claim. The appellate court found that the record
supports the trial court's determination that Edward took
inconsistent positions in different judicial proceedings, that his
first position was successful, and that the inconsistent positions
were not the result of ignorance, fraud or mistake.
The case is EDWARD PESTANA, Cross-complainant and Appellant, v.
MICHAEL J. KELLY, JR., as Co-trustee, etc., et al.,
Cross-defendants and Respondents, NO. C072268 (Cal. Ct. App.).
A full-text copy of the August 11, 2015 memorandum decision is
available at http://is.gd/hX98khfrom Leagle.com.
ESTERLINA VINEYARD: Can File Schedules Until September 18
---------------------------------------------------------
Thomas E. Carlson of the U.S. Bankruptcy Court for the Northern
District of California extended, until Sept. 18, 2015, the time
within which Esterlina Vineyard & Winery LLC may file its summary
of schedules, statistical summary, statement of financial affairs,
corporate ownership statement and list of equity security holders.
Esterlina Vineyards & Winery, LLC filed a Chapter 11 bankruptcy
petition (Bankr. N.D. Calif. Case No. 15-10841) on Aug. 12, 2015.
Eric Sterling signed the petition as president. The Debtor
estimated assets of $10 million to $50 million and liabilities of
at least $1 million. The Law Offices of Provencher & Flatt LLP
serves as the Debtor's counsel. The case is assigned to Judge
Thomas E. Carlson.
EZENIA! INC: Obtains Favorable Ruling on Ex-CEO Severance Dispute
-----------------------------------------------------------------
Ezenia! Inc. on Sept. 3 disclosed that the bankruptcy court has
issued a favorable ruling for the Company in its years-long dispute
with former CEO Khoa Nguyen. Specifically, the court (i) denied
Mr. Nguyen's claims for severance benefits and federal income tax
damages, (ii) limited Mr. Nguyen's allowed claims for deferred
compensation, (iii) denied Mr. Nguyen's sanctions motion against
the Company in their entirety, and (iv) granted the Company's
sanctions motion against Mr. Nguyen in the amount of $45,000.
The Company had previously escrowed funds to reserve for the entire
amount of the claims sought by Mr. Nguyen. Following the
bankruptcy court's decision, these funds will now be released from
escrow and used to repay a material portion of the Company's
outstanding indebtedness. The conclusion of this matter and
resulting debt reduction will allow the Company to resume its focus
on developing a next generation platform for insider threat
detection and unified communications.
About Ezenia! Inc.
Ezenia! Inc., filed for Chapter 11 protection (Bankr. D. N.H. Case
No. 11-13664) on Sept. 30, 2011. Judge J. Michael Deasy presides
over the case. Daniel W. Sklar, Esq., at Nixon Peabody LLP,
represents the Debtor.
In updated court filings, the Company disclosed $2.5 million in
assets and $1.3 million in debt. Its largest asset -- worth $2.4
million -- is a prepaid licensing contract with Microsoft Corp.
Ezenia! Inc., has moved its corporate headquarters to Gig Harbor,
Wash., while its finance office is in Salem, N.H. It was
originally based in Nashua, N.H. The company previously disclosed
it was considering moving to Seattle, Wash., to be near Microsoft.
Ezenia stock is traded on the Pink Sheets.
FA HUSBANDRY: Pot Businesses in Fin'l Trouble Face Hazy Future
--------------------------------------------------------------
Kelsey Butler, writing for The Deal, reported that the owner of a
marijuana wholesaler may appeal a decision that booted him from
bankruptcy court and may burn other financially strapped drug
dispensaries.
According to the report, Frank and Sarah Arenas, who had their
Chapter 7 case dismissed in the U.S. Bankruptcy Court for the
District of Colorado in Denver, will likely continue to hash it out
with judges that don't feel they deserve bankruptcy protection.
Judges Tom R. Cornish, Robert E. Nugent and Dale L. Somers of the
U.S. Bankruptcy Appellate Panel of the 10th Circuit said in an Aug.
21 opinion that "possessing, growing and dispensing marijuana and
assisting others to do that are federal offenses," the report
related.
A full-text copy of the Opinion is available at
http://bankrupt.com/misc/ARENAS0821.pdf
FOUR OAKS: Chief Financial Officer Resigns
------------------------------------------
Four Oaks Fincorp, Inc., the holding company for Four Oaks Bank &
Trust Company, announced that on Aug. 31, 2015, Nancy S. Wise,
executive vice president, chief financial officer of the Company
and the Bank, resigned from her positions with the Company and the
Bank, effective as of Sept. 1, 2015, to spend time caring for aging
family members.
The Company intends to initiate a search for a replacement and,
until such time as a new chief financial officer is appointed, Ms.
Deanna W. Hart, the Bank's senior vice president and controller
since January 2014, will serve as acting chief financial officer of
the Company and the Bank.
President and Chief Executive Officer David H. Rupp stated, "We
extend our profound thanks to Nancy for her twenty five years of
dedicated service to the bank and wish her well in caring for her
family."
"Deanna has been a key part of our team for many years and, with
our experienced finance staff, we are well-equipped to handle this
transition and continue on our path toward long-term growth," Mr.
Rupp added.
In connection with Ms. Wise's resignation, the Company proposed
that she, the Company, and the Bank enter a Severance and General
Release Agreement, to be effective on or about Sept. 15, 2015.
Under the proposed Agreement, Ms. Wise will be entitled to receive
severance in an amount equal to 16 months of her current base
salary plus $10,000, less applicable taxes and withholdings. The
Severance Payment will be paid in a lump sum on Sept. 30, 2015. The
Bank will also reimburse Ms. Wise for the premiums she pays to
continue coverage under the Bank's group health insurance policy
pursuant to the Consolidated Omnibus Budget Reconciliation Act of
1985 for the eighteen-month period beginning Oct. 1, 2015. Further,
the Bank will pay Ms. Wise for all of her accrued, unused vacation
and sick time in a lump sum on Sept. 30, 2015. The severance
benefits afforded under the proposed Agreement will be in lieu of
any other compensation or benefits to which Ms. Wise otherwise
might be entitled, including without limitation under the Amended
and Restated Executive Employment Agreement between the Bank and
Ms. Wise dated Dec. 11, 2008, which will be terminated along with
any remaining obligations thereunder upon execution of the proposed
Agreement. The proposed Agreement also contains such release of
claims, confidentiality, and non-disparagement provisions and other
terms and conditions as are usual and customary for agreements of
this type.
About Four Oaks
With $722 million in total assets as of June 30, 2015, Four Oaks
Bank & Trust Company, through its wholly-owned subsidiary, Four
Oaks Bank & Trust Company, offers a broad range of financial
services through its sixteen offices in Four Oaks, Clayton,
Smithfield, Garner, Benson, Fuquay-Varina, Wallace, Holly Springs,
Harrells, Zebulon, Dunn, Raleigh (LPO), Apex (LPO) and Southern
Pines (LPO), North Carolina. Four Oaks Fincorp, Inc. trades
through its market makers under the symbol of FOFN.
Four Oaks Fincorp reported a net loss of $4.18 million in 2014, a
net loss of $350,000 in 2013, a net loss of $6.96 million in 2012
and a net loss of $9.09 million in 2011.
As of June 30, 2015, the Company had $722 million in total assets,
$663 million in total liabilities and $58.8 million in total
shareholders' equity.
FREEDOM INDUSTRIES: Court Sets Plan Confirmation Hearing Oct. 2
---------------------------------------------------------------
After several revisions, Freedom Industries, Inc. finally obtained
approval of the disclosure statement explaining its proposed
reorganization plan, paving the way for the Debtor to begin
soliciting votes on the Plan and scheduling an Oct. 2 confirmation
hearing.
On July 28, 2015, the Court held a hearing to consider approval of
the Disclosure Statement filed by the Debtor and the objection
thereto filed by Arcadis U.S. Inc. Thereafter, on Aug. 7, 2015,
the Debtor filed a modified amended disclosure statement and plan
of liquidation that addressed some of the Court's concerns. The
Court, by order dated Aug. 10, 2015, sustained the Arcadis
objection and required the Debtor to amend the plan and disclosure
statement to conform with the Court's order. On Aug. 12, 2015, the
Debtor submitted another modified amended plan and disclosure
statement that was consistent with the Court's Aug. 10, 2015.
On Aug. 14, 2015, interested party, the West Virginia Department of
Environmental Protection, filed a motion to alter or amend the Aug.
10, 2015 order. On Aug. 25, 2015, the Debtor filed a stipulation
that resolved the issues raised in Arcadis' objection to the
Disclosure Statement along with DEP's objections to the Court's
order sustaining that objection.
The Court finds that modifications to the Amended Disclosure
Statement up to and including the Aug. 12, 2015, modified Amended
Disclosure Statement and such modified as contemplated in the Aug.
25, 2015 stipulation are relatively minor in nature and relate
primarily to parties who are active in the case and who have been
advised of their treatment. Accordingly, the Court finds that the
July 28, 2015 hearing was applicable to the modified Amended Plan
and Disclosure Statement and no further hearing on the Disclosure
Statement is necessary as the disclosure statement now contains
sufficient information to enable creditors to make an informed
judgment about the Debtor's Plan.
The Court, however, found that the Modified Amended Plan and
Disclosure Statement to be so lengthy and complex, that it is
likely to be of no meaning to the majority of parties in the case.
Additionally, the costs associated with the distribution of that
much documentation o that many persons would significantly erode
the funds available to be distributed to the parties in interest.
Instead the Court approved the "Freedom Industries, Inc. Bankruptcy
Summary Overview of the Third Modified Amended Plan of Liquidation
dated Aug. 12, 2015 and the Third Modified Amended Disclosure
Statement dated Aug. 12, 2015" that was filed by the Debtor on Aug.
28, 2015", and authorizes counsel for the Debtor to distribute to
all parties only the Summary of Plan and Disclosure Statement and
the Disclosure Statement Order.
Judge Ronald G. Pearson in his Aug 26, 2015 order ruled that:
-- The Debtor's Modified Amended Disclosure Statement is approved
and the Debtor is authorized to solicit creditors' votes on the
Modified Amended Chapter 11 Plan of Reorganization.
-- Sept. 28, 2015 is fixed as the last day for filing acceptances
or rejections to the Plan.
-- Sept. 28, 2015 is fixed as the last day for filing written
objections to confirmation of the Plan.
-- Sept. 30, 2015 is fixed as the deadline for submission of a
report of balloting and declaration in support of plan confirmation
by the Debtor.
-- A hearing will be held at 1:30 p.m. on Oct. 2, 2015, to
consider confirmation of the Plan.
A copy of the Third Amended Modified Disclosure Statement dated
Aug. 12, 2015, is available for free at:
http://bankrupt.com/misc/Freedom_I_3rd_Am_DS.pdf
A copy of the summary overview of the Third Modified Amended Plan
of Liquidation Dated Aug. 12, 2015, filed on Aug. 26, 2015, is
available for free at:
http://bankrupt.com/misc/Freedom_I_Summ_3rd_Am_Plan.pdf
About Freedom Industries
Freedom Industries Inc. is engaged principally in the business of
producing specialty chemicals for the mining, steel and cement
industries. The Debtor operates two production facilities located
in (a) Nitro, West Virginia; and (b) Charleston, West Virginia.
The company, connected to a chemical spill that tainted the water
supply in West Virginia, sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. S.D. W.Va. Case No. 14-bk-20017) on Jan.
17, 2014. The case is assigned to Judge Ronald G. Pearson.
The petition was signed by Gary Southern, president.
The Debtor is represented by Mark E Freedlander, Esq., at McGuire
Woods LLP, in Pittsburgh, Pennsylvania; and Stephen L. Thompson,
Esq., at Barth & Thompson, in Charleston, West Virginia.
On Dec. 31, 2013, four companies merged under the umbrella of
Freedom Industries: Freedom Industries Inc., Etowah River Terminal
LLC, Poca Blending LLC and Crete Technologies LLC.
As reported in the Troubled Company Reporter on Feb. 20, 2014,
Kate White, writing for The Charleston Gazette, reported that the
Debtor disclosed $16 million in assets and $6 million in
liabilities when it filed for bankruptcy.
On Feb. 5, 2014, the U.S. Trustee appointed an official committee
of unsecured creditors. The Committee retained Frost Brown Todd
LLC as counsel.
On March 18, 2014, the Bankruptcy Court approved the hiring of
Mark Welch at Morris Anderson in Chicago as Freedom's chief
restructuring officer.
FREEDOM INDUSTRIES: Summary of 3rd Amended Liquidating Plan
-----------------------------------------------------------
Freedom Industries, Inc., is slated on Oct. 2 to seek confirmation
of its Third Modified Amended Plan of Liquidation dated Aug. 12,
2015.
There are several settlements involved in the Freedom bankruptcy
case either previously approved by the Bankruptcy Court or set
forth in the Plan that provide the bases for funding of the Plan.
In exchange for these settlements that include either payments to
the Freedom bankruptcy estate or allow Freedom access to funds that
it would not otherwise be able to obtain without significant
litigation, these parties will receive a release of liability from
the Freedom bankruptcy estate. This means that these parties
cannot be sued by Freedom after the bankruptcy case is finalized.
These parties include:
* Chemstream Holdings, Inc. and related parties including J.
Clifford Forrest. Chemstream Holdings is the sole shareholder of
Freedom and J. Clifford Forrest was the sole director of Freedom as
of the date that it filed for bankruptcy protection.
* Dennis Farrell, Charles Herzing and William Tis and related
parties. These parties were the officers and directors of the
entities that were consolidated into Freedom as of the date of the
sale transactions that occurred in mid-December 2013
* Gary Southern and related parties. Southern was the President
of Freedom as of the date of the Incident.
The primary purposes of the Plan is to move forward with finalizing
remediation of the Etowah River Terminal as agreed upon by Freedom
and West Virginia Department of Environmental Protection ("WVDEP")
and to compensate parties with claims in the Freedom case with
funds remaining after payment to the remediation fund called the
ERT Remediation Fund under the Plan. All affected people and
entities are classified by the type of claim they have against the
Freedom bankruptcy estate ("Classes"). All Classes under the Plan
other than equity or ownership interests will receive some
distribution under the Plan.
The holders of Spill Claims of $3,000 or less will receive a
one-time distribution from a total pool of funds of $500,000. It
is estimated that holders of Spill Claims of $3,000 or less will
receive a distribution of approximately 44% of the amount of the
claim that they have filed. It is a goal of the Plan to make
distributions to holders of Spill Claims of $3,000 or less before
the end of calendar year 2015.
The holders of Spill Claims in amounts in excess of $3,000 will
participate in future distributions from an initial pool of funds
of just under approximately $1,600,000 as well as future recoveries
from litigation claims. The timing of return and amount of return
to holders of Spill Claims in excess of $3,000 is uncertain at this
time.
The Plan has been heavily negotiated among Freedom, lawyers for
general trade creditors, the holders of Spill Claims, WVDEP and
other interested parties. The Plan requires a substantial payment
($1,400,000) to a remediation fund that will be used for final
remediation of the Etowah River Terminal in a manner approved by
WVDEP. The Plan also provides for payment of claims entitled under
bankruptcy law to be paid before the holders of Spill Claims.
The Official Committee of Unsecured Creditors, certain holders of
Spill Claims and the WVDEP participated in negotiations relating to
the Plan.
5 Classes Voting on Plan
The Plan proposes to treat claims and interest as follows:
-- Holders of administrative expense claims (Unclassified) will
be paid in full, in cash. Estimated recovery is 100%. The class
is unimpaired. Claim holders are deemed to accept the Plan.
-- Holders of Professional Fee Compensation and Reimbursement
Claims (Unclassified) will Paid pro rata cash in a manner approved
by the Bankruptcy Court plus future payments from certain potential
recovery resources described in the Plan. Arcadis will be paid
pursuant to separate Order of Court. The class will have a
recovery equal to the initial cash estimated of $1,195,983. The
class impaired. The claim holders are not voting on the Plan.
-- U.S. Trustee Fees (Unclassified) payable in the Case under 28
U.S.C. Sec. 1930, as agreed by the CRO or as determined by the
Bankruptcy Court, will, if not previously paid by the Debtor, be
paid in Cash on the Effective Date or as soon thereafter as is
practicable by the Spill Claim Plan Administrator, and will
continue to be paid by the Spill Claim Plan Administrator as
required under 28 U.S.C. Sec. 1930 until such time as an order is
entered by the Bankruptcy Court closing the Case. Estimated
Recovery is 100%. The class is unimpaired.
-- With respect to IRS Secured Claims (Class 1), principal and
interest paid in full, in cash on Effective Date, and all penalties
waived. Estimated recovery is 100%. The class is impaired.
-- Priority Tax Claims (Class 2) will be paid in full, in cash on
Effective Date. The estimated recovery is 100%. The class is
impaired.
-- General Unsecured Claims (Class 3) will receive an Initial
distribution of $350,000 cash on Effective Date, plus future
payments from certain potential sources. Based on the initial
distribution, the estimated recovery is 5%. The class is
impaired.
-- With respect to Holders of Convenience Class Spill Claims
(Class 4), $500,000 will paid in cash on Effective Date to Spill
Claim Administrator for prompt distribution to timely filed spill
claims of $3,000 or less. This payment is a one-time-only payment
and no other or further payments will be made to holders of Class 4
Claims. The estimated recovery is 44%. The class is impaired.
-- With respect to Spill Claims Over $3,000 (Class 5), an initial
payment made in cash on Effective Date to Spill Claim Administrator
who will determine with Spill Claim Oversight Committee how funds
will be used or distributed, plus future payments from certain
potential recovery sources described in the Plan. The initial cash
estimate is $1,595,983, with the timing and amount of recovery
unknown. The class is impaired.
-- Holders of equity interests (Class 6) will receive no
distribution or recovery of any nature. The estimated recovery is
0%. The class is impaired. The equity holders are deemed to
reject the Plan.
All impaired Classes other than equity ownership will receive a
ballot and have a right to vote to accept or reject the Plan
To be counted, the ballot indicating acceptance or rejection of the
Plan must be received by Susan Harding, c/o McGuireWoods LLP, 625
Liberty Avenue, 23rd Floor, Pittsburgh, PA 15222 no later than 5:00
p.m. Eastern Prevailing Time, on Sept. 28, 2015. If you did not
receive a ballot but believe that you should have, call
412-667-6075 or e-mail sharding@mcguirewoods.com
ARCADIS FEEs
By order dated July 2, 2014, ARCADIS US, Inc. was retained by the
Debtor as replacement environmental consultant. ARCADIS is no
longer serving as environmental consultant to the Debtor nor as the
Debtor’s licensed remediation specialist. ARCADIS asserts that
its unpaid fees and expenses should be paid from proceeds of the
ERT Remediation Fund. WVDEP challenges this assertion and the
Debtor intends to do so as well. The Debtor intends for unpaid fees
and expenses of ARCADIS to be treated inconsistent with that
certain order of the Bankruptcy Court dated Aug. 10, 2015, or if
applicable, such other or further order of the Bankruptcy Court or
other court of competent jurisdiction. The ARCADIS Order provides
in pertinent part as follows: "…ARCADIS’ claim should be paid
to the full extent as may be allowed by this Court and that claim
should be paid from the ERT Remediation Fund…as an environmental
expense rather than grouped with other administrative claim
creditors."
About Freedom Industries
Freedom Industries Inc. is engaged principally in the business of
producing specialty chemicals for the mining, steel and cement
industries. The Debtor operates two production facilities located
in (a) Nitro, West Virginia; and (b) Charleston, West Virginia.
The company, connected to a chemical spill that tainted the water
supply in West Virginia, sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. S.D. W.Va. Case No. 14-bk-20017) on Jan.
17, 2014. The case is assigned to Judge Ronald G. Pearson.
The petition was signed by Gary Southern, president.
The Debtor is represented by Mark E Freedlander, Esq., at McGuire
Woods LLP, in Pittsburgh, Pennsylvania; and Stephen L. Thompson,
Esq., at Barth & Thompson, in Charleston, West Virginia.
On Dec. 31, 2013, four companies merged under the umbrella of
Freedom Industries: Freedom Industries Inc., Etowah River Terminal
LLC, Poca Blending LLC and Crete Technologies LLC.
As reported in the Troubled Company Reporter on Feb. 20, 2014,
Kate White, writing for The Charleston Gazette, reported that the
Debtor disclosed $16 million in assets and $6 million in
liabilities when it filed for bankruptcy.
On Feb. 5, 2014, the U.S. Trustee appointed an official committee
of unsecured creditors. The Committee retained Frost Brown Todd
LLC as counsel.
On March 18, 2014, the Bankruptcy Court approved the hiring of
Mark Welch at Morris Anderson in Chicago as Freedom's chief
restructuring officer.
FREEDOM INDUSTRIES: US Govt Wants Plan Denied Until Returns Filed
-----------------------------------------------------------------
The U.S. Internal Revenue Service submitted an objection to Freedom
Industries, Inc.'s Third Modified Amended Plan of Liquidation dated
Aug. 12, 2015. The IRS said the Debtor has not filed its U.S.
Corporation Income Tax Return, Form 1120, for the period of July 1,
2013 to June 30, 2014. This Return was due on Sept. 15, 2014. The
Debtor has no extension for filing the Return.
According to the IRS, until the Debtor either files this Return or
demonstrates that it has no obligation to file, neither the Service
nor the Court can determine whether the Third Modified Amended Plan
provides for the Debtor’s federal tax liabilities in the manner
required by the Bankruptcy Code.
Counsel to IRS can be reached at:
R. BOOTH GOODWIN II
United States Attorney
GARY L. CALL
Assistant United States Attorney
P.O. Box 1713
Charleston, West Virginia 25326
Tel: 304-345-2200
Fax: 304-347-5440
E-mail: gary.call@usdoj.gov
About Freedom Industries
Freedom Industries Inc. is engaged principally in the business of
producing specialty chemicals for the mining, steel and cement
industries. The Debtor operates two production facilities located
in (a) Nitro, West Virginia; and (b) Charleston, West Virginia.
The company, connected to a chemical spill that tainted the water
supply in West Virginia, sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. S.D. W.Va. Case No. 14-bk-20017) on Jan.
17, 2014. The case is assigned to Judge Ronald G. Pearson.
The petition was signed by Gary Southern, president.
The Debtor is represented by Mark E Freedlander, Esq., at McGuire
Woods LLP, in Pittsburgh, Pennsylvania; and Stephen L. Thompson,
Esq., at Barth & Thompson, in Charleston, West Virginia.
On Dec. 31, 2013, four companies merged under the umbrella of
Freedom Industries: Freedom Industries Inc., Etowah River Terminal
LLC, Poca Blending LLC and Crete Technologies LLC.
As reported in the Troubled Company Reporter on Feb. 20, 2014,
Kate White, writing for The Charleston Gazette, reported that the
Debtor disclosed $16 million in assets and $6 million in
liabilities when it filed for bankruptcy.
On Feb. 5, 2014, the U.S. Trustee appointed an official committee
of unsecured creditors. The Committee retained Frost Brown Todd
LLC as counsel.
On March 18, 2014, the Bankruptcy Court approved the hiring of
Mark Welch at Morris Anderson in Chicago as Freedom's chief
restructuring officer.
GMG CAPITAL: Reorganization Plan Declared Effective
---------------------------------------------------
The Second Amended Joint Chapter 11 Plan of Reorganization of
debtors GMG Capital Partners III, L.P., and GMG Capital Partners
III Companion Fund, L.P., was declared effective on Aug. 26, 2015.
All administrative expense claims (other than for professional
fees) accruing through the Effective Date against the Plan Debtors
and not otherwise paid in the ordinary course of business are due
no later than Sept. 26, 2015. The deadline for professional fee
claims is Oct. 25, 2015.
The Court on July 10, 2015, approved the explanatory Disclosure
Statement, allowing the Debtors to solicit votes on the Plan.
Voting creditors in Classes 2A, 2B, 3A, 3B, 4A, 4B, 5A, and 5B
voted to accept the Plan by the majority required by the Bankruptcy
Code for each such Class.
Following a hearing commencing on August 11, 2015, Judge Stuart M.
Bernstein entered an order confirming the Plan. A copy of the
document is available at:
http://bankrupt.com/misc/GMG_Capital_Plan_Order.pdf
On July 30 2015, the Debtors filed a supplement to the Second Joint
Amended Chapter 11 Plan of Reorganization, which is part of the
Plan. A copy of the document is available for free at:
http://bankrupt.com/misc/GMG_Capital_Plan_Supplement.pdf
Athenian Settlement
A court-approved settlement with Athenian Venture Partners I, L.P.
and Athenian Venture Partners II L.P., paved the way for the
confirmation of the Plan. Athenian opposed previous iterations of
the Plan and even sought the conversion of the cases to Chapter 7
liquidation but eventually supported confirmation of the Plan after
reaching a settlement.
Prompting the Debtors' chapter 11 filing was a June 21, 2013
judgment entered jointly and severally against each of the Debtors
in favor of Athenian in Superior Court of the State of Delaware in
and for New Castle County in the case captioned Athenian Venture
Partners I, L.P. et al. v. GMG Capital Investments, LLC et al, No.
08C-04-084. The terms of the Judgment provided that the Debtors
make a payment to Athenian of (i) retroactive to Jan. 1, 2008,
$15,000 per month until the principal of $6 million is paid down
and (ii) certain interest fees and expenses. Because of the
retroactive nature of the Judgment, as of the date of the Judgment
approximately $960,000 of principal was due and payable and over
$1.3 million was due on account of interest, fees and expenses.
Athenian filed general unsecured proofs of claim against each
Debtor, jointly and severally, for $5,163,745 as of the Petition
Date. Athenian's position is that this figure does not take into
account all additional amounts accruing pursuant to the relevant
orders and agreements from and after the Petition Date. Athenian's
claims constitute over 80% of the estimated allowed general
unsecured claims against the Debtors.
The Debtors' chapter 11 cases have essentially been a three-way
contest among the Debtors, Athenian and an ad hoc group of limited
partners of GMG III and GMG Companion represented by King &
Spalding. The Debtors and the Limited Partner Group have
questioned the viability of the Judgment, whether it was subject to
subordination or disallowance and whether asserted rights to fees
and interest were beyond what was required by the Judgment and the
Bankruptcy Code.
In October 2014, the Debtors filed their first plan and disclosure
statement. The Plan provided for reinstatement of the Athenian
judgment to the extent that Athenian's claims were allowed and not
subordinated. The reinstatement and certain other distributions
would be funded by a $4 million to $6 million purchase commitment
by Second Alpha for a portion of the equity interests in one of the
Debtors' holdings. The plan did not consensually resolve issues
between the Limited Partners, the Debtors and the Debtors'
insiders. Moreover, it provided for a distribution to insider
claims ahead of equity. Both the Limited Partner Group and
Athenian objected to the disclosure statement as patently
unconfirmable and not containing adequate information.
On May 11, 2015 with the approval and consent of the Limited
Partner Group, the Debtors filed their second amended plan (the
"Second Amended Plan") and accompanying disclosure statement. The
Debtors believe the plan as filed is confirmable. The Second
Amended Plan is premised on funding of up to $6.5 million led by
certain members of the Limited Partner Group. It resolves the
disputes between the Debtors, their insiders and the Limited
Partner Group by providing for a waterfall distribution between the
limited partner and the Debtors' insiders, and the allowance of a
substantial contribution claim. Athenian took the position that
the Second Amended is not confirmable -- and as such, leaves the
Debtors with no chance at rehabilitation.
The Debtors engaged in heavy settlement negotiations with Athenian
and in June, with approval of the Limited Partner Group, reached a
settlement. On July 21, 2015, the Debtors won approval of the
Settlement, which provides that:
* The Debtors will modify their Second Amended Plan to provide,
inter alia, in full and final satisfaction of each of Athenian's
proofs of claim, a single one-time payment of $5 million in cash
(the "Athenian Full Payment") upon the effective date of the plan.
* Athenian will support confirmation of and vote in favor of the
Second Amended Plan as modified in accordance with the Settlement
Agreement.
* Athenian's pending motions will be dismissed upon its receipt
of the Athenian Full Payment; and
* The Settlement Agreement will become null and void and the
Debtors' cases shall immediately convert to cases under chapter 7
of the Bankruptcy Code should: (i) the exit funding, in an amount
sufficient to make all distributions under the Modified Plan, not
be committed by the exit funder in writing on or before July 9,
2015; or (ii) Athenian not receive the Athenian Full Payment on or
prior to August 21, 2015, provided however that upon the GMG
Parties' written notice to counsel of record for the Athenian
Parties, the GMG Parties may extend the August 21st date one time
for cause, provided further that the period will in no event extend
beyond Sept. 8, 2015.
Michael S. Fox, Esq., at Olshan Frome Wolosky LLP, asserts that the
Settlement Agreement achieves three critical items on the Debtors'
behalf. First, it fixes Athenian's claim at $5 million, even
though Athenian's position is that it should be (when reduced to
present value) at least $6 million. Second, the Settlement
Agreement commits the Debtors' most active adversary and largest
creditor to accept the Debtors' plan. Third, it disposes of the
Conversion Motion.
About GMG Capital Partners
GMG Capital Partners III, L.P., and GMG Capital Partners III
Companion Fund, L.P., sought Chapter 11 protection (Bankr.
S.D.N.Y. Case No. 13-12937 and 13-12939) in Manhattan on Sept. 10,
2013. Stuart M. Bernstein oversees the Debtor's case. Olshan
Frome Wolosky LLP represents the Debtor its Chapter 11 Bankruptcy
Case. GMG Capital Partners III disclosed $21,696,757 in assets
and $7,877,498 in liabilities as of the Chapter 11 filing.
GOODRICH PETROLEUM: S&P Lowers Corporate Credit Rating to 'SD'
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Houston-based Goodrich Petroleum Corp. to 'SD' (selective
default) from 'B-'.
S&P also lowered the issue-level rating on the company's 5% senior
unsecured convertible notes due in 2032 to 'D' from 'CCC'. In
addition, S&P affirmed the 'CCC' issue-level rating on the senior
unsecured notes due 2019 and convertible notes due 2026 and 2029.
The recovery rating on the senior unsecured notes remains '6',
reflecting S&P's expectation of negligible (0% to 10%) recovery in
the event of a conventional default. At the same time, S&P
affirmed the 'CCC+' issue-level rating on the company's senior
secured second-lien notes due 2018. The recovery rating on the
senior secured second-lien notes remains '5', reflecting S&P's
expectation of modest (upper half of the 10% to 30% range) recovery
in the event of a conventional default.
"The downgrade follows Goodrich's announcement that it reached an
agreement with holders of portions of its senior unsecured
convertible notes to exchange the notes for new senior unsecured
convertible notes," said Standard & Poor's credit analyst John
Rogers.
Noteholders agree to receive approximately $27.5 million new senior
unsecured convertible exchange notes due 2032 for approximately $55
million of existing unsecured convertible notes due 2032. Pro
forma for the exchange S&P projects debt to EBITDA to be about 5.5x
at the end of 2015 and reach above 9x in 2016. In addition, S&P
projects FFO/debt to be about 10% at end of 2015 and falling below
5% in 2016.
"We view the transaction as a distressed exchange because investors
will receive less than what was promised on the original
securities," said Mr. Rogers.
S&P expects to review the corporate credit rating and issue-level
ratings when S&P assess the likelihood of further exchanges as low.
S&P's analysis will incorporate the company's modestly improved
liquidity and leverage position, while still taking into account
the challenging operating environment.
GULF PACKAGING: Court Approves UMAC as Collection Agent Banker
--------------------------------------------------------------
The Hon. Pamela S. Hollis of the U.S. Bankruptcy Court for the
Northern District of Illinois authorized Gulf Packaging Inc. to
employ University Management Associates & Consultants Corp. as its
collections agent banker, effective as of Aug. 7, 2015.
The firm will:
a) inspect documentation pertaining to a pool of accounts
receivable from and as identified by the Debtor and determine
whether such documentation is necessary in the collection of the
accounts receivable.
b) dispose of documentation pertaining to the Accounts
Receivable that it deems no longer required or necessary in the
collection of the accounts receivable.
c) communicate with the Debtor's customers in the name of the
firm.
d) maintain confidentiality and refrain from divulging
information received and obtained from the Debtor, unless
disclosure is necessary to resolve any fee disputes that may arise
between the firm and the Debtor.
e) advise the Debtor's customers to remit payments directly to
the Debtor's lockbox.
The firm will be compensated as follows:
a) The Debtor will remit fees owing to the firm no later than
fourteen (14) days after receipt of payment via the Debtor's
lockbox;
b) The firm will be assigned approximately $2.5 Million of the
accounts receivable to collect.
In addition, the firm will be entitled to a fee on only the amount
collected. The firm's compensation for the services will, as set
forth more fully in the Services Agreement and in Paul Rome's
declaration, be: 3% of amounts collected up to $750,000 of Accounts
Receivable; 6% of amounts collected in excess of $750,000 up to
$1,500,000; and 10% on amounts collected in excess of $1,500,000.
To the best of the Debtor's knowledge and belief, the firm is a
"disinterested person" as defined in section 101(14) of the
Bankruptcy Code. Similarly, the firm does not hold any interest
adverse to the Debtor, as a debtor in possession, or its estate in
the matters upon which the firm is to be engaged.
About Gulf Packaging
Formed as a Texas corporation in February 2012, Gulf Packaging Inc.
is a distributor of packaging equipment and supplies, which sells
its product by and through several independent entities. GPI is a
private company, with its equity held in equal parts by the Fleck
Family Partnership, LLC and CWJ Eagle, LLC (which is affiliated
with the Cutshall family).
Gulf Packaging sought Chapter 11 protection (Bankr. N.D. Ill. Case
No. 15-15249) on April 29, 2015. The Debtor disclosed $16,392,403
in assets and $29,764,425 in liabilities as of the Chapter 11
filing.
The case is assigned to Judge Pamela S. Hollis. The Debtor tapped
FrankGecker LLP as counsel; BMC Group Inc. as claims and noticing
agent; and the firm of Gavin/Solmonese to provide Edward T. Gavin
as chief restructuring officer.
The U.S. Trustee appointed nine creditors to serve on an official
committee of unsecured creditors.
HERCULES OFFSHORE: Equity Release Notice Procedures Approved
------------------------------------------------------------
Hercules Offshore, Inc. and its affiliated debtor-entities won
approval of the proposed procedures for soliciting acceptances and
rejections of their Prepackaged Chapter 11 Plan of Reorganization.
The Debtors also obtained approval of the proposed equity release
consent notice.
The procedures used by the Debtors for distribution of the equity
release consent notice and for recording election of equity holders
that opt out of the voluntary releases set forth in Article VII.F
of the Plan are approved, provided that the Debtors are authorized
in their discretion to honor requests for equity holders to revoke
any election to opt out at any time prior to the date of the
confirmation hearing.
Delaware Bankruptcy Judge Kevin J. Carey entered an order
scheduling a Sept. 24 combined hearing to consider approval of the
explanatory Disclosure Statement and confirmation of the
Prepackaged Plan. The judge also approved a Sept. 21 deadline for
objections.
The Debtors commenced solicitation of holders of claims regarding
the Plan prior to the Petition Date. As of the bankruptcy filing,
holders of more than 99% in amount of Class 3 Senior Notes Claims
-- the only class entitled to vote on the Plan -- already have
voted to accept the Plan. Under the Plan, holders of the entire
$1.2 billion in principal amount of the senior notes will be
converted into 96.9% of the New HERO Common Stock.
The amount of the Debtors' liabilities significantly exceeds the
Debtors' enterprise value -- by more than $500 million -- and thus,
holders of HERO Equity Interests are substantially "out of the
money." Consequently, under Article III.D.7 of the Plan, HERO
Equity Interests will be cancelled and discharged and shall be of
no further force or effect, and therefore have been deemed to
reject the Plan.
Notwithstanding, on or as soon as practicable after the Effective
Date, holders of HERO Equity Interests will receive, in exchange
for the surrender or cancellation of their HERO Equity Interests
and for the releases pursuant to section VII.F of the Plan, their
Pro Rata share of (1) the Shareholder Equity Distribution and (2)
the New HERO Warrants. However, any holder of a HERO Equity
Interest that opts not to grant the voluntary releases contained in
Article VII.F of the Plan will not receive its pro rata share of
the Shareholder Equity Distribution and the New HERO Warrants and
shall not receive any consideration or any distribution whatsoever
under the Plan.
About Hercules Offshore
Headquartered in Houston, Hercules Offshore, Inc. --
http://www.herculesoffshore.com/-- operates a fleet of 27 jackup
rigs, including one rig under construction, and 21 liftboats. The
Company offers a range of services to oil and gas producers to meet
their needs during drilling, well service, platform inspection,
maintenance, and decommissioning operations in several key shallow
water provinces around the world.
On Aug. 13, 2015 Hercules Offshore and 14 affiliated debtors each
filed a voluntary petition for relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Del. Lead Case No. 15-11685) in the
U.S. Bankruptcy Court for the District of Delaware. The cases are
pending before the Honorable Kevin J. Carey.
The Debtors tapped Baker Botts LLP as counsel; Morris, Nichols,
Arsht & Tunnell, as local counsel; Andrews Kurth LLP, as general
corporate counsel; Lazard Freres & Co. LLC, as investment banker,
Alvarez & Marsal, as restructuring advisor; and Prime Clerk, LLC,
as claims and noticing agent.
The Steering Group of Holders of Senior Notes is represented by
Akin Gump Strauss Hauer & Feld LLP's Arik Preis, Esq., and Michael
S. Stamer, Esq.
HERO disclosed $546 million in assets and $1.306 billion in debt as
of Aug. 11, 2015.
* * *
The Debtors on the Petition Date filed a pre-packaged Chapter 11
plan that would convert $1.2 billion of outstanding senior notes to
96.9% of new common equity.
HRK HOLDINGS: Has Until Nov. 16 to File Plan and Disclosures
------------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida
extended until Nov. 16, 2015, the deadline of HRK Holdings, LLC,
and HRK Industries, LLC, to file chapter 11 plan and disclosure
statement.
As reported in the Troubled Company Reporter on Aug. 18, 2015,
Barbara A. Hart, Esq., at Stichter Riedel Blain & Postler, P.A., in
Tampa, Florida, told the Court that the Debtors are engaged in
pursuing additional sales of real property, funding for operational
expenses and exit financing and that they are also engaged in
litigation pending in the Circuit Court of the Ninth Judicial
Circuit, in Orange County, Florida. Ms. Hart further tells the
Court that the outcome of additional sales, funding and the
Litigation will affect the Debtors' plan of reorganization. She
said that the Debtors are not seeking a further extension of the
exclusive period to file a plan and submit that cause exists to
grant the extension of time requested.
According to the Debtor's case docket, the Court also:
(i) extended the maturity dates under the long term care line of
credit and under Phosphogypsum Stack System Standby Trust Fund
Agreement to demonstrate closure, water management and/or long-term
care financial assurance filed by the Debtor; and
(ii) authorized the Debtor to obtain additional postpetition
financing and to extend the maturity date under the second arsenal
DIP loan facility filed by the Debtor.
About HRK Holdings
HRK Holdings and HRK Industries LLC filed for Chapter 11 protection
(Bankr. M.D. Fla. Case Nos. 12-09868 and 12-09869) on
June 27, 2012. Judge K. Rodney May oversees the case. Barbara A.
Hart, Esq., and Scott A. Stichter, Esq., at Stichter, Riedel, Blain
& Prosser, P.A., represents the Debtors.
HRK Holdings disclosed $33.4 million in assets and $26.1 million in
liabilities in its revised schedules.
The bankruptcy filing was necessitated by the immediate need to
sell a portion of the remaining property to create liquidity for
(a) funding the urgent management of the site-related environmental
concerns; the benefit of creditors; funding a litigation filed by
the Debtors; and funding of expenses related to additional sales of
the remaining property.
HRK Holdings is selling real property assets to Allied Universal
Corp. and Mayo Fertilizer, Inc. The Court allowed HRK and the
purchasers to enter into any modifications to the agreements
without need of further Court approval, provided that no amendments
will occur without prior consent of Regions Bank.
INTERNATIONAL TEXTILE: Harvey Tepner Quits as Director
------------------------------------------------------
Harvey L. Tepner, a member of the board of directors of
International Textile Group, Inc. since 2012, tendered his
resignation from that position effective as of Aug. 31, 2015,
according to a regulatory filing with the Securities and Exchange
Commission.
The Company expresses its gratitude to Mr. Tepner for his service
and contributions to the Company.
About International Textile
International Textile Group, Inc., is a global, diversified
textile manufacturer headquartered in Greensboro, North Carolina,
with current operations principally in the United States, China,
Mexico, and Vietnam. ITG's long-term focus includes the
realization of the benefits of its global expansion, including
reaching full production at ITG facilities in China and Vietnam,
and continuing to seek other strategic growth opportunities.
International Textile reported a net loss attributable to common
stock of $15.4 million on $595 million of net sales for the year
ended Dec. 31, 2014, compared to a net loss attributable to common
stock of $10.9 million on $600 million of net sales in 2013.
As of June 30, 2015, the Company had $325 million in total assets,
$384 million in total liabilities, and a stockholders' deficit of
$59 million.
ITUS CORP: Stockholders Elect Five Directors
--------------------------------------------
The annual meeting of stockholders of ITUS Corporation was held on
Wednesday, Aug. 26, 2015, at which the stockholders elected Lewis
H. Titterton, Robert A. Berman, Dr. Amit Kumar, Bruce F. Johnson
and Dale Fox to the Board of Directors to serve for a one-year term
that expires at the 2016 Annual Meeting of Stockholders, or until
their successors are elected and qualified. The stockholders also
ratified the appointment of Haskell & White LLP, an independent
registered public accounting firm, as the Company's independent
auditors for fiscal year 2015.
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 $389,000 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 July 31, 2015, the Company had $10.27 million in total
assets, $4.28 million in total liabilities and $5.99 million in
total stockholders' equity.
J. CREW: S&P Revises Outlook to Negative & Affirms 'B-' CCR
-----------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook New
York-based J. Crew Group Inc. to negative from stable. At the same
time, S&P affirmed all ratings, including the 'B-' corporate credit
rating.
"The outlook revision reflects our expectation that operating
performance will continue to be weak in the next several quarters,
resulting in negative free operating cash flow generation in fiscal
2015," said credit analyst Helena Song. "We believe the specialty
apparel industry will remain difficult and highly promotional
because of increased competition and consumer caution and that J.
Crew has not yet been able to adequately navigate these trends.
The company's performance and credit metrics deteriorated
meaningfully in fiscal 2014 and S&P expects the trend to continue
in the remainder of fiscal 2015 and into 2016."
The negative outlook reflects S&P's expectation that operating
performance will remain weak in the remainder of 2015 and into
2016. Although S&P expects liquidity to remain adequate, it
forecasts free operating cash flow will be modestly negative in
each of the next two years and will reduce liquidity. S&P also
forecasts credit metrics to remain very weak, including debt to
EBITDA around 8x in the next 12 months.
S&P could lower the rating if operating performance further
deteriorates beyond its expectations because of highly promotional
activities and continued merchandise/inventory issues, resulting in
material negative free operating cash flow on a sustained basis and
a reduction in the company’s liquidity. A downgrade would also
be triggered by our view that financial commitments had become
unsustainable in the long run. This could occur, for example, if
fashion missteps coupled with a highly promotional environment
result in further gross margin contraction of 500 bps from S&P's
forecast and same-store sales further decline at a 10% pace in
2016.
S&P would revise the outlook to stable if the company stabilizes
and improves its operations with same-store sales gain and some
margin recovery, resulting in consistent positive free operating
cash flow, leading to lower leverage. This could happen if
same-store sales are flat and gross margin improves by 200 bps.
KENT C. ELLINGTON DMD: Case Summary & 18 Top Unsecured Creditors
----------------------------------------------------------------
Debtor: Kent C. Ellington, D.M.D., P.C.
111 John Maddox Drive
Rome, GA 30165
Case No.: 15-42082
Chapter 11 Petition Date: September 2, 2015
Court: United States Bankruptcy Court
Northern District of Georgia (Rome)
Judge: Hon. Mary Grace Diehl
Debtor's Counsel: Leslie M. Pineyro, Esq.
JONES AND WALDEN, LLC
21 Eighth Street, NE
Atlanta, GA 30309
Tel: (404) 564-9300
Fax: 404-564-9301
Email: lpineyro@joneswalden.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Kent C. Ellington, president.
A list of the Debtor's 18 largest unsecured creditors is available
for free at http://bankrupt.com/misc/ganb15-42082.pdf
L & W RESEARCH: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: L & W Research, Inc.
P.O. Box 124
Willimantic, CT 06226
Case No.: 15-21571
Chapter 11 Petition Date: September 2, 2015
Court: United States Bankruptcy Court
District of Connecticut (Hartford)
Judge: Hon. Ann M. Nevins
Debtor's Counsel: Carl T. Gulliver, Esq.
COAN, LEWENDON, GULLIVER & MILTENBERGER LLC
495 Orange Street
New Haven, CT 06511
Tel: (203) 624-4756
Fax: 203-865-3673
Email: cgulliver@coanlewendon.com
Total Assets: $522,654
Total Liabilities: $1.02 million
The petition was signed by Paul H. Leek, president.
A list of the Debtor's 20 largest unsecured creditors is available
for free at http://bankrupt.com/misc/ctb15-21571.pdf
LEHMAN BROTHERS: Ex-Employees Don't Warrant Special Status
----------------------------------------------------------
Patrick Fitzgerald, writing for Dow Jones' Daily Bankruptcy Review,
reported that the trustee winding down Lehman Brothers Holding's
brokerage says hundreds of former employees still waiting to
recover more than $250 million in deferred compensation don't
deserve to jump in front of other unsecured creditors in the
bankruptcy-payout line.
According to the report, lawyers for James W. Giddens, the trustee
in charge of unwinding Lehman's brokerage, want to reclassify the
employees' secured claims, which receive priority under bankruptcy
law's payment scheme, to general unsecured status.
About Lehman Brothers
Lehman Brothers Holdings Inc. 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.
LIBERATOR INC: To Change Company Name to "Luvu Brands, Inc."
------------------------------------------------------------
Liberator, Inc., announced that its majority shareholder and board
of directors have approved a change of the company's corporate name
to Luvu Brands, Inc. to reflect its broader offering of wellness
and lifestyle products designed for mass market channels.
Liberator, Inc. has grown to become both a manufacturing and
product development company and seeks to ensure that its brand
collection continues to thrive and grow by employing strong brand
management, design and marketing teams, with a focus on
resource-smart business practices.
According to the Company's CEO and Founder, Louis Friedman, "Our
new name Luvu Brands will better reflect the company's mission,
values, and corporate strategy. Since our founding in 2002, the
primary focus of the company has been our line of Liberator Bedroom
Adventure Gear products. While that will continue to be our
primary focus going forward, the other wellness and lifestyle
products in our brand portfolio have grown to become significant
drivers of our growth. We also felt that our new name should
connect with our commitment to sustainable business practices and
USA made sewn goods."
Until the renaming is complete, Liberator Inc. will operate
"business as usual' under its current name and brand assets. The
Company will not use its new name and logo commercially until the
rebranding is complete, a process that will take approximately
three months. It is anticipated that the company's ticker symbol
"LUVU" will remain the same.
The name change is subject to the filing of an information
statement with the Securities and Exchange Commission and mailing
of notice to the Company's shareholders which it anticipates to be
delivered by Oct. 15, 2015. The name change would be effective 20
days after the mailing of the information statement and as
determined by the Company's board of directors.
About Liberator Inc.
Atlanta, Georgia-based Liberator is a vertically integrated
manufacturer that designs, develops and markets products and
accessories that enhance intimacy. Liberator is also a nationally
recognized brand trademark, brand category and a patented line of
products commonly referred to as sexual positioning shapes and sex
furniture.
Liberator disclosed a net loss of $376,000 on $14.7 million of
net sales for the year ended June 30, 2014, compared to a net loss
of $288,000 on $13.8 million of net sales for the year ended June
30, 2013.
As of March 31, 2015, the Company had $3.41 million in total
assets, $5.33 million in total liabilities, and a $1.91 million
total stockholders' deficit.
Liggett, Vogt & Webb, P.A., in Boynton Beach, Florida, 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 a net loss of $376,000, a
working capital deficiency of $1.69 million, an accumulated deficit
of $8.42 million and a negative cash flow from continuing
operations of $199,000. These factors raise substantial doubt
about the Company's ability to continue as a going concern.
MICHAEL BAKER: Moody's Cuts Corporate Family Rating to B3
---------------------------------------------------------
Moody's Investors Service has downgraded ratings of Michael Baker
Holdings, LLC, including the Corporate Family Rating to B3 from B2.
The rating outlook is Stable. The rating downgrade results from
weak liquidity, low free cash flow generation and interest
coverage.
RATINGS RATIONALE
The B3 CFR reflects low interest coverage and cash flow generation,
but also good scale and diversity of service offerings that favors
bidding prospects. At Q2-2015 LTM EBITDA less capital expenditures
to interest was 1.4x on a Moody's adjusted basis (which includes
holding company debt) with no free cash flow generation. While
revenue and earnings improved in Q2-2015 sequentially and
year-over-year, performance has been choppy since the leveraged
dividend of April 2014. Free cash flow generation will probably
remain soft until mid-2016 as contracts underway will likely drive
capital spending and working capital growth. Michael Baker's scale
and business integration initiatives may ultimately produce greater
efficiencies, steadier profit/cash flows, but progress is taking
longer than expected. Broad qualifications for construction and
engineering work in developing regions and within the US (federal,
state and local) help the company compete for large contracts and
favor the long-term revenue view.
A liquidity profile that is deemed to be weak also factors into the
CFR. The low free cash flow generation that is envisioned near-term
will likely keep the company heavily dependent on its revolving
credit line. About $75 million of borrowings existed under the
asset-based revolver at June 30, 2015, leaving availability of less
than $50 million, a minimal amount against the company's size and
in light of its working capital swings. Further, a demanding
covenant test could activate later in the year without steady
earnings across July-December. Scheduled debt maturities are
minimal until 2018 which partially lessens pressure on the CFR from
weak liquidity.
The stable rating outlook anticipates improved working capital
efficiency and better free cash flow after mid-2016 as receivable
growth under a large contract should by then stabilize, providing
cash flow to reduce revolver borrowing and improve liquidity.
Downgrades:
Issuer: Michael Baker Holdings LLC
Probability of Default Rating, Downgraded to B3-PD from B2-PD
Corporate Family Rating, Downgraded to B3 from B2
Senior Unsecured Regular Bond/Debenture, Downgraded to Caa2 (LGD6)
from Caa1 (LGD6)
Issuer: Michael Baker International, LLC
Senior Secured Regular Bond/Debenture, Downgraded to B2 (LGD3) from
B1 (LGD3)
Outlook Actions:
Issuer: Michael Baker Holdings LLC
Outlook, Changed To Stable From Negative
Issuer: Michael Baker International, LLC
Outlook, Changed To Stable From Negative
Downward rating pressure would mount with likelihood of a covenant
breach, expectation of low free cash flow across 2016, or
debt/EBITDA approaching 7x (was 6x at Q2-2015). Before the
liquidity cushion expands, the extent to which the operating
company up-streams cash to the holding company will also be
considered. Upward rating momentum would depend on expectation of
free cash flow to debt in the high single digit percentage range,
debt/EBITDA closer to 5x, and steady backlog.
Michael Baker Holdings, LLC ("Michael Baker"), through its direct
subsidiary Michael Baker International, LLC, provides engineering,
development, intelligence and technology solutions with global
reach and mobility. Its clients consist of governments around the
world - including national, state and municipal. Michael Baker
competes for engineering, development, and technology/intelligence
contracts, and is currently building a large airfield in Balad,
Iraq. Revenues for the last twelve months ended June 30, 2015 were
$1.1 billion. The company is majority-owned by DC Capital
Partners.
MISSION NEW ENERGY: Reports $28 Million Profit for Fiscal 2015
--------------------------------------------------------------
Mission NewEnergy Limited filed with the Securities and Exchange
Commission its preliminary report for the year ended June 30,
2015.
The Company reported profit of $28.4 million on $7.27 million of
total revenue for the year ended June 30, 2015, compared to a loss
of $1.1 million on $9.68 million of total revenue for the year
ended June 30, 2014.
As of June 30, 2015, Mission New Energy had $12.6 million in total
assets, $5.85 million in total liabilities and $6.76 million in
total equity.
A full-text copy of the Report is available for free at:
http://is.gd/j6i0ne
About Mission NewEnergy
Based in Subiaco, Western Australia, Mission NewEnergy Limited is
a producer of biodiesel that integrates sustainable biodiesel
feedstock cultivation, biodiesel production and wholesale
biodiesel distribution focused on the government mandated markets
of the United States and Europe.
The Company is not operating its biodiesel refining segment. The
refineries are being held in care and maintenance either awaiting
a return to positive operating conditions or the sale of assets.
The Company has materially diminished its Jatropha contract
farming operation and the company is now focused on divesting the
remaining Indian assets. The Company intends to cease all Indian
operations.
Mission NewEnergy reported a net loss of $1.09 million on $9.68
million of total revenue for the year ended June 30, 2014,
compared to net income of $10.05 million on $8.41 million of total
revenue during the prior year.
The Company's balance sheet at June 30, 2014, showed $4.04 million
in total assets, $15.40 million in total liabilities and a $11.35
million total deficiency.
BDO Audit (WA) Pty Ltd, in Perth, Western Australia, issued a
"going concern" qualification on the consolidated financial
statements for the year ended June 30, 2013. The independent
auditors noted that the Company incurred operating cash outflows
of $3.7 million during the year ended 30 June 2013 and, as of that
date the consolidated entity's total liability exceeded its total
assets by $12.5 million. These conditions, along with other
matters, raise substantial doubt the Company's ability to continue
as a going concern.
MUSCLEPHARM CORP: Stockholders Elect Seven Directors
----------------------------------------------------
MusclePharm Corporation held its 2015 annual meeting of
stockholders on Aug. 26, 2015, at which the stockholders:
1. elected Bradley J. Pyatt, William Bush, Noel Thompson,
Ryan Drexler, Richard Estalella, Michael Doron and
Stacy Jenkins as directors to hold office until the next
annual meeting of stockholders and until their respective
successors have been duly elected and qualified;
2. ratified the appointment of EKS&H LLP as the Company's
independent auditors for the fiscal year ending Dec. 31,
2015;
3. approved the Company's 2015 Equity Incentive Plan;
4. approved the Company's 2015 Employee Stock Purchase Plan;
5. approved a proposal to hold an advisory vote on the executive
compensation; and
6. selected "One Year" as the frequency of future advisory vote
on executive compensation.
On Aug. 26, 2015, the Board of Directors of MusclePharm appointed
its current Chairman of the Board, Mr. Ryan Drexler, as its
executive chairman of the Board to hold office until the next
annual meeting or until his successor is duly elected and qualified
with all the duties as set forth for the position of the chief
executive officer in the Company's Bylaws and other governance
documents duly adopted or that may be adopted by the Company. Mr.
Drexler will receive compensations as further determined by the
Board or the Compensation Committee of the Board.
Subsequent to the Meeting, the Board reaffirmed Brad Pyat as the
chief executive officer, Richard Estalella as the president, John
Price as the chief financial officer and Cory Gregory as the
executive vice president. In addition, as a result of re-election,
the composition of the committees of the Board is reaffirmed. As
such, the Company's Audit Committee is currently comprised of Mr.
Bush as the Chair, Mr. Doron, and Mr. Jenkins. The Company's
Compensation Committee is currently comprised of Mr. Doron as the
Chair, Mr. Thompson and Mr. Bush. The Company's Nominating &
Governance Committee is currently comprised of Mr. Jenkins as the
Chair, Mr. Thompson and Mr. Doron. The Company's Strategic
Initiative Committee is currently comprised of Mr. Thompson as the
Chair, Mr. Estalella, Mr. Doron and Mr. Jenkins.
The Board adopted an amendment to the Company's amended and
restated Bylaws effective as of Aug. 26, 2015. The following is a
summary of changes effected by adoption of the Amendment:
Article IV – Officers
* Various provisions related to officer positions and reporting
relationships are modified to create a position of Executive
Chairman and clarify the powers and duties of the officers.
The Executive Chairmen shall have such powers and perform
such duties as may be assigned by the Board of Directors.
The Chief Executive Officer shall supervise and direct
generally all the business and affairs of the Company. The
President shall have such powers and perform such duties as
may be assigned by the Board of Directors, the Executive
Chairman, or the Chief Executive Officer.
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 Corporation reported a net loss of $13.8 million in
2014, a net loss of $17.7 million in 2013 and a net loss of $19
million in 2012.
As of June 30, 2015, the Company had $75.1 million in total assets,
$56.9 million in total liabilities and $18.1 million in total
stockholders' equity.
OPTIM ENERGY: Third Amended Reorganization Plan Declared Effective
------------------------------------------------------------------
Optim Energy, LLC, et al., notified the U.S. Bankruptcy Court for
the District of Delaware that the Effective Date of their Third
Amended Joint Plan of Reorganization occurred on Aug. 21, 2015.
On May 19, 2015, Reorganizing Debtors Optim Energy Altura Cogen,
LLC and Optim Energy Cedar Bayou 4, LLC filed the Third Amended
Plan. On July 30, the Court confirmed the Third Amended Plan. On
Aug. 21, the Reorganizing Debtors entered into that certain
Technical Modification to Third Amended Plan, and each of the
conditions precedent to the effectiveness of the Plan occurred or
was waived in accordance with the provisions of the Third Amended
Plan.
Pursuant to the Third Amended Plan:
1. Holders of Administrative Claims arising on or after April 1,
2015, will file any request for allowance and payment of such
Administrative Claims by Sept. 21, 2015; and
2. Holders of Professional Claims will file final requests for
allowance and payment of such Professional Claims by Oct. 20,
2015.
The Court also authorized the Debtors to enter and perform under a
plan support agreement.
About Optim Energy
Optim Energy, LLC, and its affiliates are power plant owners
principally engaged in the production of energy in Texas's
deregulated energy market. Optim owns and operates three power
plants in eastern Texas: the Twin Oaks plant in Robertson County,
Texas, the Altura Cogen plant in Harris County, Texas and the
Cedar Bayou plant in Chambers County, Texas. The Altura and Cedar
Bayou plants are fueled by natural gas, and the third is
coal-fired.
Optim Energy and its affiliates sought Chapter 11 protection from
creditors (Bankr. D. Del. Lead Case No. 14-10262) on Feb. 12,
2014.
The Debtors have tapped Bracewell & Giuliani LLP and Morris,
Nichols, Arsht & Tunnell LLP as attorneys; Protiviti Inc. as
restructuring advisors; and Prime Clerk LLC as claims agent.
Optim Energy, LLC scheduled $6.95 million in assets and $717
million in liabilities. Optim Energy Cedar Bayou 4, LLC,
disclosed $184 million in assets and $718 million in liabilities
as
of the Chapter 11 filing. The Debtors have $713 million of
outstanding principal indebtedness.
The U.S. Trustee for Region 3 was unable to appoint an official
committee of unsecured creditors in the Debtors' cases.
Walnut Creek is represented by Michael W. Yurkewicz, Esq., at
Klehr Harrisison Harvey Branzburg LLP, in Wilmington, Delaware;
Paul M. Basta, P.C., Esq., Joshua A. Sussberg, P.C., Esq., and
Matthew Kapitanyan, Esq., at Kirkland & Ellis LLP, in New York;
and
James A. Stempel, Esq., at Kirkland & Ellis LLP, in Chicago,
Illinois.
Cascade Investment, L.L.C., and ECJV Holdings are represented by
Margaret Whiteman Greecher, Esq., Pauline K. Morgan, Esq., and
Patrick A. Jackson, Esq., at Young Conaway Stargatt & Taylor LLP,
in Wilmington, Delaware; and Lindsee P. Granfield, Esq., and Jane
VanLare, Esq., at Cleary Gottlieb Steen & Hamilton LLP, in New
York.
OWENS-ILLINOIS INC: S&P Lowers CCR to 'BB', Outlook Stable
----------------------------------------------------------
Standard & Poor's Ratings Services said that it has lowered its
corporate credit rating on Owens-Illinois Inc. to 'BB' from 'BB+'.
The outlook is stable.
Additionally, S&P lowered all of its issue-level ratings on the
company's debt by one notch.
At the same time, S&P removed all of its ratings on Owens-Illinois
Inc. from CreditWatch, where S&P had placed them with negative
implications on May 13, 2015.
"The downgrade reflects the significant amount of debt that
Owens-Illinois took on for the Vitro acquisition and the revision
of our assessment of the company's financial risk profile to
"aggressive" from "significant"," said Standard & Poor's credit
analyst Liley Mehta.
S&P views Owens-Illinois Inc.'s business risk profile as
"satisfactory" based upon its leading market position in the glass
packaging industry, with leading market shares in each of its four
regions (North America, Europe, South America, and Asia-Pacific),
and its extensive international operations, which include good
positions in emerging markets that have favorable long-term growth
prospects.
S&P's stable outlook on Owens-Illinois reflects S&P's expectation
that the company's credit measures will improve over the next 24
months as management uses its substantial free operating cash flow
to deleverage.
S&P could lower its ratings on Owens-Illinois if more
difficult-than-expected integration challenges or a
lower-than-expected operating performance causes its
FFO-to-total-debt ratio to fall below 12% and its debt-to-EBITDA
metric to increase above 5x. S&P could also lower its ratings on
the company if Owens-Illinois entered into an additional large
debt-financed acquisition that caused the company's credit measures
to deteriorate significantly.
Although unlikely in the next few years, S&P could raise its
ratings on Owens-Illinois if it reduces its leverage beyond S&P's
expectations, such that its FFO-to-total adjusted debt ratio
exceeds 20% on a sustainable basis.
PATRIOT COAL: Committee Taps Blackacre as Coal Consultant
---------------------------------------------------------
The Official Committee of Unsecured Creditors in the Chapter 11
cases of Patriot Coal Corporation, et al., asks the U.S. Bankruptcy
Court for the Eastern District of Virginia for permission to retain
Blackacre, LLC, as its coal consultant, nunc pro tunc to June 23,
2015.
The Court scheduled a hearing on the matter on Sept. 11, at 10:00
a.m. Objections, if any, are due
Blackacre will analyze issues that may arise in the Chapter 11
cases that are specific to the coal and mining industry,
specifically:
a) review and analyze any bid submitted as part of the process
to sell the Debtors' assets;
b) review and analyze the Debtors' disclosure statement and plan
of reorganization; and
c) review and analyze other proposals made by the Debtors in
their cases to determine whether such proposals are feasible and
optimal;
d) develop an expert report and opinion and provide expert
testimony with respect to any bid, disclosure statement, plan of
reorganization, or other proposal put forward by the Debtors.
Blackacre will be compensated as follows:
1. If Blackacre's fees and expenses for a given month are
$15,000 or less, it will submit an invoice for such fees and
expenses to Morrison & Foerster for payment pursuant to the
engagement letter. If Morrison & Foerster, after reviewing the
invoice and consulting with the Committee, determines that the
requested payment is reasonable and appropriate, Morrison &
Foerster may remit payment on account of the invoice and treat such
payment as an expense on Morrison & Foerster's applicable monthly
invoice.
2. If Blackacre's fees and expenses for a given month exceed
$15,000, Blackacre will apply for compensation for professional
services rendered and reimbursement of expenses in compliance with
Sections 330 and 331 of the Bankruptcy Code.
Beginning with the period ending on July 31, 2015, and at three
month intervals thereafter, Blackacre will file an interim fee
application for compensation and reimbursement of expenses sought
during the interim fee period in compliance with Sections 330 and
331 of the Bankruptcy Code and the interim compensation order.
Blackacre currently charges $450 per hour for founder W. Douglas
Blackburn's consulting services, up to $5,000 per day.
Blackacre will also seek reimbursement for all actual out-of-pocket
expenses incurred by Blackacre on the Committee's behalf.
To the best of the Committee's knowledge, Blackacre is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
About Patriot Coal
Patriot Coal Corporation is a producer and marketer of coal in the
United States. Patriot and its subsidiaries control 1.4 billion
tons of proven and probable coal reserves -- including owned and
leased assets in the Central Appalachia basin (in West Virginia
and Ohio) and Southern Illinois basin (in Kentucky and Illinois)
and their operations consist of eight active mining complexes in
West Virginia.
Patriot Coal first sought Chapter 11 protection on July 9, 2012,
and, on Dec. 18, 2013, won approval of its bankruptcy-exit plan
from the U.S. Bankruptcy Court for the Eastern District of
Missouri. The plan turned over most of the ownership of the
company to bondholders that include New York hedge fund Knighthead
Capital Management LLC. The linchpins of the plan were a global
settlement among the Debtors, the United Mine Workers of America,
and two third parties -- Peabody Energy Corporation and Arch Coal,
Inc. -- and a commitment by a consortium of creditors, led by
Knighthead, to backstop two rights offerings that funded the plan.
Patriot Coal Corporation and its subsidiaries commenced new
Chapter 11 cases (Bankr. E.D. Va. Lead Case No. 15-32450) in
Richmond, Virginia, on May 12, 2015. The cases are assigned to
Judge Keith L. Phillips.
Patriot Coal estimated more than $1 billion in assets and debt.
The Debtors tapped Kirkland & Ellis LLP as counsel; Kutak Rock
L.L.P., as co-counsel; Centerview Partners LLC as investment
bankers; Alvarez & Marsal North America, LLC, as restructuring
advisors; and Prime Clerk LLC, as claims and administrative agent.
The U.S. trustee overseeing the Chapter 11 case of Patriot Coal
Corp. appointed seven creditors of the company to serve on the
official committee of unsecured creditors. The Committee is
represented by Morrison & Foerster LLP as its counsel, and Tavenner
& beran, PLC, as its local counsel. Jefferies LLC serves as its
investment banker.
The directed the U.S. Trustee to form an official committee of
retirees at the behest of Patriot Coal Non-Union Retiree VEBA.
* * *
The deadline to file bids for the Debtors' assets is Sept. 4, 2015,
at 5:00 p.m. An auction will take place on Sept. 9, at 10:00 a.m.
Patriot Coal has filed with the Bankruptcy Court a letter of intent
for a proposed sale of a substantial majority of its operating
assets to Blackhawk Mining, LLC, as well as a motion outlining
bidding procedures. Under the terms of the letter of intent,
Blackhawk would issue to Patriot's secured lenders new debt
securities totaling approximately $643 million plus Class B Units
providing them an ownership stake in Blackhawk. In addition,
Blackhawk would assume or replace surety bonds supporting
reclamation and related liabilities associated with the purchased
assets.
PATRIOT COAL: Retiree Committee Taps Zolfo Cooper as Consultant
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Virginia will
convene a hearing on Sept. 11, 2015, at 10:00 a.m., to consider the
request of the Official Retiree Committee of Patriot Coal
Corporation, et al., to retain Zolfo Cooper, LLC, as its bankruptcy
consultants and financial advisors, effective July 9, 2015.
Objections, if any, are due Sept. 4.
Zolfo Cooper will, among other things:
1. advise and assist the Retiree Committee in analyzing certain
financial aspects of retiree benefit plan funded by non-debtors,
financial aspects of welfare benefit plans administrated by the
Debtors but funded by non-debtors;
2. advise and assist the retiree Committee regarding the
expected sale process in the case and impact upon affected
retirees; and
3. advise and assist the Retiree Committee in analyzing any
financial projections of business plans, including supporting
information and assumptions, as provided by the Debtors and the
Debtors' professionals with material focus relating to the any
entities not sold or restructured(if any) by the Debtors.
The billing rates for professionals who may be assigned to the
engagement in effect as of July 1, 2015, are:
Managing Directors $775 - $925
Professional Staff $265 - $770
Support Personnel $60 - $310
Zolfo Cooper also charges for out-of-pocket expenses associated
with the assignment.
To the best of the Retiree Committee's knowledge, Zolfo Cooper is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
About Patriot Coal
Patriot Coal Corporation is a producer and marketer of coal in the
United States. Patriot and its subsidiaries control 1.4 billion
tons of proven and probable coal reserves -- including owned and
leased assets in the Central Appalachia basin (in West Virginia
and Ohio) and Southern Illinois basin (in Kentucky and Illinois)
and their operations consist of eight active mining complexes in
West Virginia.
Patriot Coal first sought Chapter 11 protection on July 9, 2012,
and, on Dec. 18, 2013, won approval of its bankruptcy-exit plan
from the U.S. Bankruptcy Court for the Eastern District of
Missouri. The plan turned over most of the ownership of the
company to bondholders that include New York hedge fund Knighthead
Capital Management LLC. The linchpins of the plan were a global
settlement among the Debtors, the United Mine Workers of America,
and two third parties -- Peabody Energy Corporation and Arch Coal,
Inc. -- and a commitment by a consortium of creditors, led by
Knighthead, to backstop two rights offerings that funded the plan.
Patriot Coal Corporation and its subsidiaries commenced new
Chapter 11 cases (Bankr. E.D. Va. Lead Case No. 15-32450) in
Richmond, Virginia, on May 12, 2015. The cases are assigned to
Judge Keith L. Phillips.
Patriot Coal estimated more than $1 billion in assets and debt.
The Debtors tapped Kirkland & Ellis LLP as counsel; Kutak Rock
L.L.P., as co-counsel; Centerview Partners LLC as investment
bankers; Alvarez & Marsal North America, LLC, as restructuring
advisors; and Prime Clerk LLC, as claims and administrative agent.
The U.S. trustee overseeing the Chapter 11 case of Patriot Coal
Corp. appointed seven creditors of the company to serve on the
official committee of unsecured creditors. The Committee is
represented by Morrison & Foerster LLP as its counsel, and Tavenner
& beran, PLC, as its local counsel. Jefferies LLC serves as its
investment banker.
The directed the U.S. Trustee to form an official committee of
retirees at the behest of Patriot Coal Non-Union Retiree VEBA.
* * *
The deadline to file bids for the Debtors' assets is Sept. 4, 2015,
at 5:00 p.m. An auction will take place on Sept. 9, at 10:00 a.m.
Patriot Coal has filed with the Bankruptcy Court a letter of intent
for a proposed sale of a substantial majority of its operating
assets to Blackhawk Mining, LLC, as well as a motion outlining
bidding procedures. Under the terms of the letter of intent,
Blackhawk would issue to Patriot's secured lenders new debt
securities totaling approximately $643 million plus Class B Units
providing them an ownership stake in Blackhawk. In addition,
Blackhawk would assume or replace surety bonds supporting
reclamation and related liabilities associated with the purchased
assets.
PATRIOT COAL: Suitor, Union Reach Deal on New Labor Pact
--------------------------------------------------------
Jacqueline Palank, writing for Dow Jones' Daily Bankruptcy Review,
reported that Patriot Coal Corp. averted a bankruptcy showdown with
its miners on Sept. 2, after the union representing its workers and
the company's proposed suitor agreed on a new employment pact.
According to the report, Patriot attorney Michael Slade said in
bankruptcy court that talks between the company, the United Mine
Workers of America union and proposed Patriot buyer Blackhawk
Mining LLC yielded an agreement on "material terms" of a new
collective bargaining agreement for Patriot's unionized workers at
what would be the postmerger company.
As previously reported by The Troubled Company Reporter, citing The
Wall Street Journal, Judge Keith Phillips of the U.S. Bankruptcy
Court in Richmond, Va., "strongly" recommended that Blackhawk
Mining and the union representing its miners head back to the
bargaining table one last time to try to reach a deal on the
miners' future employment.
According to the Journal, after presiding over a four-hour trial,
Judge Phillips declined to rule on Patriot's request to reject the
collective bargaining agreements with the United Mine Workers of
America union. Patriot has warned that its pending sale to
Blackhawk Mining -- and the ultimate survival of its business --
depends on its ability to shed the agreements, though the union
says Patriot hasn't made a good-faith effort to negotiate new
deals, the Journal reported.
About Patriot Coal
Patriot Coal Corporation is a producer and marketer of coal in the
United States. Patriot and its subsidiaries control 1.4 billion
tons of proven and probable coal reserves -- including owned and
leased assets in the Central Appalachia basin (in West Virginia
and
Ohio) and Southern Illinois basin (in Kentucky and Illinois) and
their operations consist of eight active mining complexes in
West Virginia.
Patriot Coal first sought Chapter 11 protection on July 9, 2012,
and, on Dec. 18, 2013, won approval of its bankruptcy-exit plan
from the U.S. Bankruptcy Court for the Eastern District of
Missouri. The plan turned over most of the ownership of the
company to bondholders that include New York hedge fund Knighthead
Capital Management LLC. The linchpins of the plan were a global
settlement among the Debtors, the United Mine Workers of America,
and two third parties -- Peabody Energy Corporation and Arch Coal,
Inc. -- and a commitment by a consortium of creditors, led by
Knighthead, to backstop two rights offerings that funded the plan.
Patriot Coal Corporation and its subsidiaries commenced new
Chapter 11 cases (Bankr. E.D. Va. Lead Case No. 15-32450) in
Richmond, Virginia, on May 12, 2015. The cases are assigned to
Judge Keith L. Phillips.
Patriot Coal estimated more than $1 billion in assets and debt.
The Debtors tapped Kirkland & Ellis LLP as counsel; Kutak Rock
L.L.P., as co-counsel; Centerview Partners LLC as investment
bankers; Alvarez & Marsal North America, LLC, as restructuring
advisors; and Prime Clerk LLC, as claims and administrative agent.
The U.S. trustee overseeing the Chapter 11 case of Patriot Coal
Corp. appointed seven creditors of the company to serve on the
official committee of unsecured creditors. The Committee is
represented by Morrison & Foerster LLP as its counsel, and
Tavenner & beran, PLC, as its local counsel. Jefferies LLC serves
as its investment banker.
The court directed the U.S. Trustee to form an official committee
of retirees at the behest of Patriot Coal Non-Union Retiree VEBA.
* * *
The deadline to file bids for the Debtors' assets is Sept. 4, 2015,
at 5:00 p.m. An auction will take place on Sept. 9, at 10:00 a.m.
Patriot Coal has filed with the Bankruptcy Court a letter of intent
for a proposed sale of a substantial majority of its operating
assets to Blackhawk Mining, LLC, as well as a motion outlining
bidding procedures. Under the terms of the letter of intent,
Blackhawk would issue to Patriot's secured lenders new debt
securities totaling approximately $643 million plus Class B Units
providing them an ownership stake in Blackhawk. In addition,
Blackhawk would assume or replace surety bonds supporting
reclamation and related liabilities associated with the purchased
assets.
PATRIOT COAL: Wants Prime Clerk to Serve as Subscription Agent
--------------------------------------------------------------
Patriot Coal Corporation, et al., supplemented its application for
permission to (A) amend the employment and retention of Prime Clerk
LLC as administrative advisor; and (B) authorize the Debtors to
employ Prime Clerk as subscription agent, effective nunc pro tunc
to the Petition Date.
The Debtors, on July 13, 2015, filed the Joint Plan of
Reorganization, and the Disclosure Statement. The Plan is
predicated on, among other things, the agreement of Blackhawk
Mining LLC to purchase certain of the Debtors' assets and assume
certain liabilities through the creation of a new company pursuant
to the asset purchase agreement, dated as of June 22, 2015, by and
Among Blackhawk LLC, Patriot Coal Corporation, the subsidiaries of
Patriot Coal Corporation, and Patriot Coal Corporation, as sellers'
representative. The Blackhawk transaction, if consummated, would
deliver to the Debtors' secured creditors
$650 million of combined company indebtedness plus 30% of the pro
forma combined company equity, and provide for the assumption of
certain other liabilities, including certain surety bonds and
related obligations.
Pursuant to the rights offerings procedures, the subscription agent
is required to assist with certain notice and solicitation
requirements. The subscription agent has various duties,
including, but not limited to:
a. provision and receipt of the prepetition notes eligibility
certificate for those eligible holders of an allowed prepetition
note claim (including a transferee eligible holder of an allowed
prepetition notes claim), seeking to participate in the second lien
rights offering;
b. provision of the combined company's organizational documents
and the LLC Agreement, well as the subscription form, for which the
subscription agent will also be the recipient; and
c. provision and receipt of the rights offerings participant
notice.
To the best of the Debtors' knowledge Prime Clerk is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
As reported in the Troubled Company Reporter on May 20, 2015, the
Debtors requested for authorization to employ Prime Clerk as
notice, claims, and solicitation agent in their Chapter 11 cases,
effective nunc pro tunc to the Petition Date.
For its claims and noticing services, Prime Clerk will charge the
Debtors at these hourly rates:
Hourly Rate
-----------
Analyst $30 to $45
Technology Consultant $60 to $90
Consultant $80 to $130
Senior Consultant $120 to $160
Director $170 to $190
For the firm's solicitation, balloting and tabulation services,
the rates are:
Hourly Rate
-----------
Solicitation Consultant $180
Director of Solicitation $200
The firm will charge $0.09 per page for printing, $0.10 per page
for fax noticing, and no charge for e-mail noticing. Hosting of
the case Web site is free of charge and on-line claim filing
services are free of charge. For data administration and
management, the firm will charge $0.10 per record per month for
data storage, maintenance and security, with the fees waived for
the first three months.
Prior to the Petition Date, the Debtors provided Prime Clerk a
retainer in the amount of $30,000.
About Patriot Coal
Patriot Coal Corporation is a producer and marketer of coal in the
United States. Patriot and its subsidiaries control 1.4 billion
tons of proven and probable coal reserves -- including owned and
leased assets in the Central Appalachia basin (in West Virginia
and Ohio) and Southern Illinois basin (in Kentucky and Illinois)
and their operations consist of eight active mining complexes in
West Virginia.
Patriot Coal first sought Chapter 11 protection on July 9, 2012,
and, on Dec. 18, 2013, won approval of its bankruptcy-exit plan
from the U.S. Bankruptcy Court for the Eastern District of
Missouri. The plan turned over most of the ownership of the
company to bondholders that include New York hedge fund Knighthead
Capital Management LLC. The linchpins of the plan were a global
settlement among the Debtors, the United Mine Workers of America,
and two third parties -- Peabody Energy Corporation and Arch Coal,
Inc. -- and a commitment by a consortium of creditors, led by
Knighthead, to backstop two rights offerings that funded the plan.
Patriot Coal Corporation and its subsidiaries commenced new
Chapter 11 cases (Bankr. E.D. Va. Lead Case No. 15-32450) in
Richmond, Virginia, on May 12, 2015. The cases are assigned to
Judge Keith L. Phillips.
Patriot Coal estimated more than $1 billion in assets and debt.
The Debtors tapped Kirkland & Ellis LLP as counsel; Kutak Rock
L.L.P., as co-counsel; Centerview Partners LLC as investment
bankers; Alvarez & Marsal North America, LLC, as restructuring
advisors; and Prime Clerk LLC, as claims and administrative agent.
The U.S. trustee overseeing the Chapter 11 case of Patriot Coal
Corp. appointed seven creditors of the company to serve on the
official committee of unsecured creditors. The Committee is
represented by Morrison & Foerster LLP as its counsel, and Tavenner
& beran, PLC, as its local counsel. Jefferies LLC serves as its
investment banker.
The directed the U.S. Trustee to form an official committee of
retirees at the behest of Patriot Coal Non-Union Retiree VEBA.
* * *
The deadline to file bids for the Debtors' assets is Sept. 4, 2015,
at 5:00 p.m. An auction will take place on Sept. 9, at 10:00 a.m.
Patriot Coal has filed with the Bankruptcy Court a letter of intent
for a proposed sale of a substantial majority of its operating
assets to Blackhawk Mining, LLC, as well as a motion outlining
bidding procedures. Under the terms of the letter of intent,
Blackhawk would issue to Patriot's secured lenders new debt
securities totaling approximately $643 million plus Class B Units
providing them an ownership stake in Blackhawk. In addition,
Blackhawk would assume or replace surety bonds supporting
reclamation and related liabilities associated with the purchased
assets.
PETTERS COMPANY: PwC LLP Transfers Forensic Consulting Services
---------------------------------------------------------------
Kevin Kreb, Esq., a partner at PricewaterhouseCoopers LLP,
submitted a second supplemental verified statement in support of
the application of Douglas A. Kelley, Chapter 11 Trustee for
Petters Company, Inc., et al., for an order authorizing the
employment of PwC LLP.
PwC LLP is expected to perform forensic accounting, advisory and
tax compliance services to the trustee. On July 1, 2015, PwC LLP
transferred its forensic consulting services operations (including
applicable employees) to a wholly-owned subsidiary, PwC Advisory
Services LLC. Accordingly, the services contemplated by the
Forensic Accounting Engagement Letter will now, technically, be
performed by PwC LLC although, pursuant to the terms of the
Forensic Accounting Engagement Letter, PwC LLP will remain solely
responsible for the provision of the Services contemplated by the
engagement letter.
PwC LLP believes that the foregoing transfer was contemplated by
the other firms provision of the Forensic Accounting Engagement
Letter and, thus, authorized by the retention order. Nevertheless,
out of an abundance of caution, PwC LLP thought it prudent to
disclose these facts to the Court and other parties-in-interest.
Except for the new information contained in the second supplemental
statement, all representations made in the Application and
corresponding verified statements filed in the
Chapter 11 cases remain unmodified.
About Petters Company
Based in Minnetonka, Minn., Petters Group Worldwide LLC is a
collection of some 20 companies, most of which make and market
consumer products. It also works with existing brands through
licensing agreements to further extend those brands into new
product lines and markets. Holdings include Fingerhut (consumer
products via its catalog and Web site), SoniqCast (maker of
portable, WiFi MP3 devices), leading instant film and camera
company Polaroid (purchased for $426 million in 2005), Sun Country
Airlines (acquired in 2006), and Enable Holdings (online
marketplace and auction for consumers and manufacturers' overstock
inventory). Founder and chairman Tom Petters formed the company in
1988.
Petters Company, Inc., is the financing and capital-raising unit of
Petters Group Worldwide.
Thomas Petters, the founder and former CEO of Petters Group, has
been indicted and a criminal proceeding against him is proceeding
in the U.S. District Court for the District of Minnesota.
Petters Company, Petters Group Worldwide and eight other
affiliates filed separate petitions for Chapter 11 protection
(Bankr. D. Minn. Lead Case No. 08-45257) on Oct. 11, 2008. In its
petition, Petters Company estimated its debts at $500 million and
$1 billion. Parent Petters Group Worldwide estimated its debts at
not more than $50,000.
Petters Aviation, LLC, and affiliates MN Airlines, LLC, doing
business as Sun Country Airlines, Inc., and MN Airline Holdings,
Inc., filed separate petitions for Chapter 11 bankruptcy protection
(Bankr. D. Minn. Case Nos. 08-45136, 08-35197 and 08-35198) on Oct.
6, 2008. Petters Aviation is a wholly owned unit of Thomas Petters
Inc. and owner of MN Airline Holdings, Sun Country's parent
company.
The Official Committee of Unsecured Creditors is represented by
David E. Runck, Esq., Lorie A. Klein, Esq., at Fafinski Mark &
Johnson, P.A.
Trustee Douglas A. Kelley is represented by James A. Lodoen, Esq.,
Mark D. Larsen, Esq., Kirstin D. Kanski, Esq., Adam C. Ballinger,
Esq., at Lindquist & Vennum LLP.
PRIME RENTALS: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Prime Rentals, LLC
3500 Depauw Blvd., St. 3102
Indianapolis, IN 46268
Case No.: 15-07473
Chapter 11 Petition Date: September 2, 2015
Court: United States Bankruptcy Court
Southern District of Indiana (Indianapolis)
Judge: Hon. Robyn L. Moberly
Debtor's Counsel: KC Cohen, Esq.
KC COHEN, LAWYER, PC
151 N Delaware St Ste 1106
Indianapolis, IN 46204
Tel: 317-715-1845
Fax: 317-916-0406
Email: kc@esoft-legal.com
Total Assets: $1.01 million
Total Liabilities: $1.22 million
The petition was signed by Brenda Hatfield, managing member.
A list of the Debtor's 20 largest unsecured creditors is available
for free at http://bankrupt.com/misc/insb15-07473.pdf
PUBLICK HOUSE: Case Summary & Largest Unsecured Creditors
---------------------------------------------------------
Debtor affiliates filing separate Chapter 11 bankruptcy petitions:
Debtor Case No.
------ --------
Publick House Holdings LLC 15-26730
111 Main Street
Chester, NJ 07930
Publick House Partners, LLC 15-26732
111 Main Street
Chester, NJ 07930
Chapter 11 Petition Date: September 2, 2015
Court: United States Bankruptcy Court
District of New Jersey (Newark)
Judge: Hon. Rosemary Gambardella (15-26730)
Hon. John K. Sherwood (15-26732)
Debtors' Counsel: Richard Honig, Esq.
HELLRING, LINDEMAN, GOLDSTEIN & SIEGAL
One Gateway Center, 8th Floor
Newark, NJ 07102
Tel: (973) 621-9020
Email: rbhonig@hlgslaw.com
Estimated Estimated
Assets Liabilities
---------- -----------
Publick House Holdings LLC $2.9M-Mil. $3.9-Mil.
Publick House Partners $0 $4.2-Mil.
The petition was signed by Joseph LUbrano, managing member.
A list of Publick House Holdings's four largest unsecured creditors
is available for free at:
http://bankrupt.com/misc/njb15-26730.pdf
A list of Publick House Partners' 22 largest unsecured creditors is
available for free at http://bankrupt.com/misc/njb15-26732.pdf
RECOVERY CENTERS: Sale of Beacon Hill, 12th Ave Properties Approved
-------------------------------------------------------------------
Judge Timothy W. Dore of the U.S. Bankruptcy Court for the Western
District of Washington at Seattle approved Recovery Centers of King
County's sale of real estate located at 1701 18th Ave So., Seattle,
Washington 98144, also known as the Beacon Hill Property, to Valley
Cities Counseling and Consultation for $4,800,000, as well as the
sale of real estate located at 464 - 12th Ave, Seattle, Washington
98122, also known as the 12th Avenue Property, to Meter LLC for
$3,700,000.
Jeffrey B. Wells, Esq., at Wells and Jarvis, P.S., in Seattle,
Washington, reports that the Beacon Hill Property was originally
intended to be sold to BDR Homes, LLC. He says that according to
the declaration of Allan Friedman, Valley Cities has received
financial backing from King County for 30% of the purchase price
for the Beacon Hill Property as well as the property at 505
Washington Ave South, Kent, which sale was already approved by the
Court. According to Mr. Friedman, Valley Cities is seeking
financing for the remainder of the purchase prices from either Bank
of America or HomeStreet Bank. Mr. Friedman indicates that there
is a high likelihood that such financing will be available to
Valley Cities within the 30 day feasibility/financing contingency
period. Because of these developments, Mr. Wells tells the Court
that Recovery Centers now prefers Valley Cities as the buyer.
Mr. Wells reports that Moscatel Family LLC/Blugrass Venture, LLC,
submitted an updated letter of intent for the 12th Avenue Property.
He tells the Court that the refundable nature of the $150,000
earnest money proposed by Moscatel, not to mention the lack of any
reference in the latest letter of intent to feasibility, raise
concerns that there will be contingencies on the Moscatel purchase
and sale agreement. Mr. Wells says that the Meter, LLC, proposal
for the same property, provides for non-refundable earnest monies
of $114,000, which mirrors the Bank of America agreed carve-out of
$115,000 to the estate from the 12th Avenue Property sale proceeds.
He concludes that even if Meter, LLC, does not close the sale,
Debtor's immediate cash flow concerns would presumably be
eliminated from the pass-through earnest monies if Meter, LLC, is
approved as the buyer, which would allow additional time for
continued marketing of the 12th Avenue Property if necessary. Mr.
Wells adds that the non-refundable nature of Meter, LLC's earnest
money gives the Debtor confidence that Meter, LLC is a serious
buyer ready to close on the present terms. He says that for this
reason, the Debtor favors the Meter, LLC, offer even though it is
approximately $76,000 less than the Moscatel letter of intent.
In his Orders approving the sale of the Beacon Hill Property and
the sale of the 12th Avenue Property, Judge Dore recognized Bank of
America, N.A.'s continuing lien on the sale proceeds of the sale of
both properties, through its security interest, as the holder of
the Deeds of Trust encumbering the properties. Judge Dore ordered
the turnover of the net sale proceeds of the sale of both
properties to Bank of America in partial satisfaction of its
secured claim, until such secured claim is paid in full.
Judge Dore further ordered the payment from the sale proceeds at
closing the usual and necessary miscellaneous expenses including
escrow fees, any excise tax, any real estate taxes, and real estate
commissions in the amount of $240,000, for the Beacon Hill
Property, and $185,000 for the 12th Avenue Property,
notwithstanding the amount owing on Bank of America's total lien
which exceeds the sale price of $4.8 million, for the Beacon Hill
Property and $3.7 million, for the 12th Avenue Property, and its
continuing security interest in the sale proceeds for both
properties. He directed that the remaining net proceeds be paid
over to Bank of America and applied against the balance owed in its
secured claims.
The Debtor's attorneys can be reached at:
Jeffrey B. Wells, Esq.
WELLS AND JARVIS, P.S.
502 Logan Building
500 Union Street
Seattle, WA 98101-2332
Telephone: (206)624-0088
Facsimile: (206)624-0086
About Recovery Centers of King County
Recovery Centers of King County -- http://www.rckc.org/-- provided
Central Seattle and South King County residents with a continuum of
care for those who suffer with alcoholism or other drug addiction.
RCKC filed a Chapter 11 case (Bankr. W.D. Wash. Case No. 15-13060)
on May 15, 2015.
Judge Timothy W. Dore presides over the case. The Debtor tapped
Jeffrey B Wells, Esq., at Wells and Jarvis, P.S., in Seattle, as
counsel.
The Debtor's Chapter 11 plan contemplates the sale of its real
estate located at 464 - 12th Ave S, Seattle, Washington, 1701 18th
Ave. S, Seattle, WA and 505 Washington Ave. S., Kent, Washington.
The Debtor will sell real property located at 464 12th Avenue, in
Seattle, Washington, to Low Income Housing Institute for $4.1
million.
Bank of America, N.A., is the Debtor's secured lender.
The U.S. Trustee for Region 18 appointed five creditors to serve
in
the Official Unsecured Creditors Committee. The Committee is
represented by Nagler Law Group, P.S.
RELATIVITY MEDIA: "Collide" Backers Hope to End Licensing Deal
--------------------------------------------------------------
Tom Corrigan, writing for The Wall Street Journal, reported that
the Hollywood company backing "Collide," a thriller directed by
Eran Creevy and starring Nicholas Hoult, Felicity Jones and Anthony
Hopkins, is urging a bankruptcy judge to let it part ways with
Relativity Media LLC, which filed for bankruptcy in July.
According to the report, in court papers filed Sept. 2 with the
U.S. Bankruptcy Court in Manhattan, IM Global Film Fund LLC says
Relativity hasn't held up its end of a distribution deal, which
includes spending at least $25 million to promote the film and
ensuring its release on more than 2,000 theater screens. IM Global
entered into an exclusive licensing deal with Relativity last year,
court papers show, the report related.
About Relativity Fashion
Based in New York, Relativity Fashion LLC dba M3 Relativity --
http://relativitymedia.com/-- is a privately-held entertainment
company with an integrated and diversified global media platform
that provides, among other things, film and television financing,
production and distribution. Relativity was founded in 2004 by
Ryan
Kavanaugh as a films late cofinancier partnering with major
studios
such as Sony and Universal. In addition, the Company engages in
content production and distribution, including movies, television,
fashion, sports, digital and music.
The Company and its affiliates filed for Chapter 11 protection on
July 30, 2015 (Bankr. S.D. N.Y. Lead case No. 15-11989). Judge
Michael E. Wiles presides over the Debtors' Chapter 11 cases.
Craig A. Wolfe, Esq., Malani J. Cademartori, Esq., and Blanka K.
Wolfe, Esq., at SHEPPARD MULLIN RICHTER & HAMPTON LLP, and Richard
L. Wynne, Esq., Bennett L. Spiegel, Esq., and Lori Sinanyan, Esq.,
at JONES DAY, represent the Debtors in the bankruptcy cases.
The Debtors reported total assets of $559.9 million, and total
debts: $1.1 billion as of Dec. 31, 2014.
RESPONSE GENETICS: Creditors Committee Objects to Sale Process
--------------------------------------------------------------
Response Genetics, Inc., asks the U.S. Bankruptcy Court for the
District of Delaware to approve its asset purchase agreement and
authorize the sale of substantially all of its assets. The Debtor
also asks the Court to approve the bid procedures for the sale of
substantially all of its assets outside the ordinary course of
business.
The Debtor seeks to sell substantially all of its assets to Cancer
Genetics, Inc., or in the alternative, the highest or otherwise
best bidder for such assets determined in accordance with the
proposed bid procedures.
The key terms of the asset purchase agreement, among others, are as
follows:
(a) Purchase Price. The total consideration to be paid by
Cancer Genetics to the Debtor for the Assets will be: (a)
$7,000,000 in cash, (b) 788,584 shares of common stock of Purchaser
at a price per share equal to $8.8767, and (c) the assumption of
the Assumed Liabilities, including the assumption of Assumed
Contracts and Assumed Leases, subject to the agreed amount of
related cure costs.
(b) Purchased Assets. The Assets are those assets necessary
to operate Debtors business including, but not limited to, the
Debtor's inventory, fixed assets, the Assigned Contracts,
intellectual property, transferable license agreements and software
agreements, accounts receivable, and avoidance action claims of
the Debtor.
(c) Deposit. Within two business days after the effective
date of the Agreement, Cancer Genetics will deposit into escrow
with escrow holder Pachulski Stang Ziehl & Jones LLP, an amount
equal to $500,000 in immediately available good funds. Within two
business days after the agreement by Purchaser and Seller in
writing upon the form and substance of all Schedules and Exhibits,
Purchaser shall deposit an additional $500,000 in good funds into
the escrow.
(d) Assumption of Executory Contracts and Unexpired Leases.
The proposed sale contemplates that the Debtor may assume and
assign to the Purchaser certain of the executory contracts and
unexpired leases associated with the Assets.
(e) Break Up Fee. Subject to approval of the Bankruptcy
Court, in consideration for the Purchaser having expended
considerable time and expense in connection with the Agreement and
the negotiation thereof and to compensate Purchaser as a
stalking-horse bidder, in the event that the Debtor consummates an
alternative transaction instead of the proposed Sale to the
Purchaser under the terms of the Agreement, the Debtor will pay
Purchaser a breakup fee equal to $560,000 and an expense
reimbursement not to exceed $125,000, plus $60,000 for the fees
arising from the Debtor's auditor to the extent a successful
over-bidder uses the auditor's work-product.
The proposed bidding procedures contain, among others, these
terms:
(a) Bid Deadline. Each bid must be actually received no later
than Sept. 25, 2015 at 4:00 p.m.
(b) Minimum Bid. The amount of the purchase price in any bid
for all of the Assets must provide for value that is at least
$250,000 more than the purchase price contained in the Agreement
plus the amount of the Expense-Reimbursement, the Break-Up Fee, and
the Auditor Fees.
(c) Deposit. A potential bidder for the Assets must deposit
$1,250,000 with an escrow agent identified under the Agreement in
the form of a certified check or wire transfer at least three
business days before the Auction.
The Debtor proposes that the auction take place no later than Sept.
30, 2015, and that a sale hearing be held no later than
Oct. 2, 2015. The Debtor further proposes that objections, if any,
to the Sale Motion be filed on or before 4:00 p.m. on
Sept. 25, 2015.
The Debtor believes that the sale of the Assets as a going concern
to the Successful Bidder is in the best interests of the Debtor's
estate and its creditors. The Debtor further believes that
obtaining the stalking horse bid, marketing the Assets with the
assistance of Canaccord Genuity, Inc., and holding the Auction on
the date specified by the Court, will result in the highest or
otherwise best consideration for the Assets and will provide for
either the payment or assumption of all known claims against the
Debtor.
Objection to Bid Procedures Motion
The Official Committee of Unsecured Creditors of objected to the
Bid Procedures Motion.
Julia Klein, Esq., at The Rosner Law Group LLC, in Wilmington,
Delaware, tells the Court that the sale terms with the stalking
horse bidder will result in a sale that provides no benefit to
general unsecured creditors. She relates that the Committee was
appointed less than 48 hours before the hearing on the Bid
Procedures Motion. Ms. Klein further tells the Court that the
Committee being appointed in such close proximity to the hearing on
the Bid Procedures Motion, the Committee is being forced to raise
objections at the same time it is just starting a dialog with key
constituents in the case. She notes that unredacted schedules to
the proposed stalking horse purchase agreement and other key
information are only now being provided and digested by the
Committee. Ms. Klein asserts that the Bid Procedures Motion should
only be approved if they contemplate a sale process that includes a
baseline recovery for unsecured creditors.
Ms. Klein also states these reasons for the Committee's objection:
(1) The timeline for the sale appears aggressive, but the
Committee has yet to assess whether a minimal incremental
adjustment to current deadlines may generate a real interest in the
assets.
(2) The break-up fee appears to be above-market under the
circumstances, and when combined with the other fees and initial
overbid amount, will chill bidding.
Response Genetics' attorneys can be reached:
Jeffrey N. Pomerantz, Esq.
Ira D. Kharasch, Esq.
James E. O'Neill, Esq.
John W. Lucas, Esq.
PACHULSKI STANG ZIEHL & JONES LLP
919 North Market Street, 17th Floor
P.O. Box 8705
Wilmington, Delaware 19899-8705
Telephone: (302)652-4100
Facsimile: (302)652-4400
E-mail: jpomerantz@pszjlaw.com
ikharasch@pszjlaw.com
joniell@pszjlaw.com
jlucas@pszjlaw.com
The Creditors Committee is represented by:
Frederick B. Rosner, Esq.
Julia B. Klein, Esq.
THE ROSNER LAW GROUP LLC
824 Market Street, Suite 810
Wilmington, DE 19801
Telephone: (302)777-1111
E-mail: rosner@teamrosner.com
klein@teamrosner.com
- and -
Carren B. Shulman, Esq.
SHEPPARD, MULLIN, RICHTER & HAMPTON LLP
30 Rockefeller Plaza
New York, NY 10112
Telephone: (212)653-8700
Email: Cshulman@sheppardmullin.com
- and -
Ori Katz, Esq.
SHEPPARD, MULLIN, RICHTER & HAMPTON LLP
Four Embarcadero Center
Seventeenth Floor
San Francisco, CA 94111
Telephone: (415)434-9100
E-mail: Okatz@sheppardmullin.com
About Response Genetics
Los Angeles, California-based Response Genetics, Inc. (otcqb: RGDX)
-- http://www.responsegenetics.com-- is a CLIA-certified clinical
laboratory focused on the development and sale of molecular
diagnostic testing services for cancer. The Company's technologies
enable extraction and analysis of genetic information derived from
tumor cells stored as formalin-fixed and paraffin-embedded
specimens. The Company's principal customers include oncologists
and pathologists. In addition to diagnostic testing services, the
Company generates revenue from the sale of its proprietary
analytical pharmacogenomic testing services of clinical trial
specimens to the pharmaceutical industry.
Response Genetics, fdba Bio Type, Inc., filed for Chapter 11
bankruptcy (Bankr. D. Del. Case No. 15-11663) on Aug. 9, 2015. The
petition was signed by Thomas Bologna, chairman and chief executive
officer.
The Debtor tapped James E. O'Neill, Esq., at Pachulski Stang Ziehl
& Jones LLP as counsel. Canaccord Genuity, Inc., serves as the
Debtor's investment banker; and Rust Consulting Omni Bankruptcy
acts as its claims and noticing agent.
The Company disclosed total assets of $10.7 million and total debt
of $15.7 million.
RICE PROPERTY: Case Summary & 2 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Rice Property Management, LLC
P.O. Box 861
Brevard, NC 28712
Case No.: 15-10470
Chapter 11 Petition Date: September 2, 2015
Court: United States Bankruptcy Court
Western District of North Carolina (Asheville)
Judge: Hon. George R. Hodges
Debtor's Counsel: Benson T. Pitts, Esq.
PITTS, HAY & HUGENSCHMIDT, P.A.
137 Biltmore Avenue
Asheville, NC 28801
Tel: 828-255-8085
Fax: 828-251-2760
Email: ben@phhlawfirm.com
Total Assets: $2.3 million
Total Liabilities: $1.37 million
The petition was signed by Edwin R. Rice, Jr., member/manager.
A list of the Debtor's two largest unsecured creditors is available
for free at http://bankrupt.com/misc/ncwb15-10470.pdf
ROSEVILLE RDA SUCCESSOR: Moody's Hikes Rating on TABs From 'Ba1'
----------------------------------------------------------------
Moody's Investors Service has upgraded to Baa2 from Ba1 the
Successor Agency to the City of Roseville, California Redevelopment
Agency's (RDA) Tax Allocation Bonds.
"On June 24, 2015, in connection with the release of our Tax
Increment Debt methodology, we placed the ratings for nearly all
California tax allocation bonds (TABs) on review for upgrade,
including this successor agency's (SA) TABs. This rating action
completes our review for this SA," Moody's said.
Three years post-dissolution, the administrative risks related to
the payment of debt service have significantly lessened, so we are
now placing greater weight on the fundamental project area
characteristics and some of the positive features of the
dissolution legislation, including the closed lien status of the
debt and the availability of the 20% of tax increment (TI) revenues
previously restricted for use on affordable housing to pay debt
service.
SUMMARY RATING RATIONALE
The rating upgrade to Baa2 reflects modestly sized incremental tax
base with a significant concentration of taxpayers, strong
socioeconomic measures, satisfactory legal debt service coverage,
and a solid tax increment revenue trend. The rating also factors in
the SA's successful adaptation to post dissolution processes and
administrative procedures and our expectation that this trend will
continue. The rating also reflects our generally positive
assessment of the implementation of redevelopment agency
dissolution legislation by most successor agencies over the last
three years, leading to timely payment of debt service on
California TABs.
In 2012, state legislation dissolved all California redevelopment
agencies, replacing them with "successor agencies" to serve as
fiduciary agents. The dissolution effectively changed the flow of
funds and processes around the payment of debt service on TABs. Tax
increment revenue is placed in trust with the county auditor, who
makes semi-annual distributions of funds sufficient to pay debt
service on tax allocation bonds and other "enforceable
obligations."
As our administrative concerns related to the payment of debt
service have lessened, we are now placing greater weight on some of
the positive features of the dissolution legislation, including the
closed lien status of the bonds.
OUTLOOK
Outlooks are not typically assigned to issuers with this amount of
debt outstanding.
WHAT COULD MAKE THE RATING GO UP
-- Substantial growth in incremental assessed value
-- Decline in taxpayer concentration
WHAT COULD MAKE THE RATING GO DOWN
-- Decline in incremental assessed value
-- Erosion of debt service coverage levels
-- Additional state administrative or legislative changes that
create uncertainty as to the timely payment of debt service
OBLIGOR PROFILE
The Successor Agency to the City of Roseville, California
Redevelopment Agency is a separate legal entity from the City of
Roseville. The SA is responsible for winding down the operations of
the former RDA, making payments on state-approved "enforceable
obligations" and liquidating any unencumbered assets to be
distributed to other local taxing entities.
LEGAL SECURITY
The legal security for bonds is tax increment revenue from the
project area(s) net of housing set asides and senior pass-through
payments.
While not legally pledged, the dissolution laws permit TAB debt
service to be paid from TI revenues deposited in the SA's
Redevelopment Property Tax Trust Fund (RPTTF), less amounts
disbursed for pass-through payments and certain administrative
charges. This includes the 20% of TI revenue previously considered
restricted housing set aside. The SA is responsible for notifying
the county auditor-controller of any shortfall in TI revenue
expected to be deposited in the RPTTF needed for the payment of TAB
debt service that would result from the disbursal of the monies for
subordinated pass-through payments, so that the necessary
subordination can be effected through changes to the usual flow of
funds.
ROYAL CARIBBEAN: S&P Assigns 'BB+' Rating on $1.128BB Facility
--------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB+' issue-level
rating and '3' recovery rating to Royal Caribbean Cruises Ltd.'s
$1.128 billion unsecured revolving credit facility due 2020. The
'3' recovery rating indicates S&P's expectation for meaningful (50%
to 70%; upper half of the range) recovery for lenders in the event
of a payment default. While S&P's estimated recovery on Royal
Caribbean's unsecured revolver would indicate a recovery rating of
'2' (70% to 90% recovery expectation), S&P has capped the recovery
rating at '3' because of the rating cap that it applies to the
unsecured debt of issuers rated in the 'BB' category, based on
S&P's criteria. The cap addresses the fact that these creditors'
recovery prospects are at greater risk of being impaired by the
issuance of additional priority or pari passu debt prior to a
simulated default scenario.
RATINGS LIST
Royal Caribbean Cruises Ltd.
Corporate Credit Rating BB+/Stable/--
Royal Caribbean Cruises Ltd.
$1.128 bil. revolver due 2020
Senior Unsecured BB+
Recovery Rating 3H
RYNARD PROPERTIES: U.S. Trustee Withdraws Case Dismissal Bid
------------------------------------------------------------
The Hon. Jennie D. Latta of the U.S. Bankruptcy Court for the
Western District of Tennessee authorized the U.S. Trustee to
withdraw its motion to dismiss the Chapter 11 case of Rynard
Properties Ridgecrest LP, or, in the alternative, convert case to
one under chapter 7 of the Bankruptcy Code.
Judge Latta also ordered that objection is be deemed moot.
As reported in the Troubled Company Reporter on Oct. 27, 2014,
the Debtor objected to the U.S. Trustee's motion. The Debtor
related that, among other things:
1. it has filed amended reports in order to correct
deficiencies as requested by the Office of the U.S. Trustee;
2. it has truthfully disclosed all transactions and has not
attempted to fail to disclose any disbursement during the case;
3. it is continuing to work with the Office of U.S. Trustee to
correct deficiencies on the monthly operating reports and reverse
any transactions with have been questioned by the U.S. Trustee;
and
4. it is attempting to refinance the project from which all
creditors will be paid in full and ask the case be dismissed.
As reported in the TCR on Oct. 2, 2014, Samuel K. Crocker, the U.S.
Trustee for Region 8, alleged that the Debtor has engaged in gross
mismanagement, which can be a ground for dismissal or conversion
under Section 1112 (b)(4)(B) of the Bankruptcy Code. The U.S.
Trustee explained that he has requested, on multiple times, that
the Debtor follow an important procedure in preparing its Monthly
Operating Report: that the Debtor must disclose critical
information about its disbursements.
In its Monthly Operating Reports, however, the Debtor appended
various documents that bear upon disbursements but none of those
MORs has all of the essential information elicited by Form 2-H,
the U.S. Trustee alleged.
About Rynard Properties Ridgecrest
Rynard Properties Ridgecrest LP is a Tennessee limited
partnership. Its principal place of business is 2881 Rangeline
Road, Memphis, TN 38127, and the Debtor operates a 256 unit
multifamily apartment complex of Section 8 housing named
Ridgecrest Apartments and currently has TESCO operating the
complex as leasing agent.
The Debtor filed a Chapter 11 bankruptcy petition (Bankr. W.D.
Tenn. Case No. 14-22674) on March 13, 2014. John Bartle signed
the petition as secretary/treasurer of Ridgecrest LLC, general
partner of the Debtor. In its schedules, the Debtor disclosed
$16.2 million in total assets and $8.73 million in total
liabilities. Toni Campbell Parker serves as the Debtor's counsel.
Judge Jennie D. Latta oversees the case.
The U.S. Trustee for Region 8 has notified the Bankruptcy Court
that it was unable to appoint an official committee of unsecured
creditors.
SABLE OPERATING: Baker Hughes Files Notice of Lien Perfection
-------------------------------------------------------------
Baker Hughes Oilfield Operations, Inc. gives notice of its
perfection of interests in certain property of the estate of Sable
Operating Company and in the proceeds, products, offspring, rents,
or profits of that property. The Lien Claimant asserts a secured
interest in the properties to the fullest extent allowed by law,
including interest and attorneys' fees.
Sable Operating Company, doing business as Nytex Petroleum, Inc.,
sought Chapter 11 protection (Bankr. N.D. Tex. Case No. 15-33460)
in Dallas on Aug. 28, 2015. The case is assigned to Judge Stacey
G. Jernigan. Joyce W. Lindauer, Esq., at Joyce W. Lindauer
Attorney, PLLC, in Dallas, serves as counsel. Sable estimated $10
million to $50 million in assets and debt.
SABLE OPERATING: Section 341 Meeting Set for October 1
------------------------------------------------------
A meeting of creditors in the bankruptcy case of Sable Operating
Company will be held on Oct. 1, 2015, at at 9:15 a.m. at Dallas,
Room 976. Proofs of claims are due by Dec. 30, 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.
Sable Operating Company, doing business as Nytex Petroleum, Inc.,
sought Chapter 11 protection (Bankr. N.D. Tex. Case No. 15-33460)
in Dallas on Aug. 28, 2015. The case is assigned to Judge Stacey
G. Jernigan. Joyce W. Lindauer, Esq., at Joyce W. Lindauer
Attorney, PLLC, in Dallas, serves as counsel. Sable estimated $10
million to $50 million in assets and debt.
SABLE OPERATING: Seeks OK to Pay $12,906 Prepetition Payroll
------------------------------------------------------------
Sable Operating Company is seeking Bankruptcy Court approval to pay
$12,906 in pre-petition payroll which includes payroll taxes.
The Debtor desires to pay its prepetition payroll for the two-week
period ending Aug. 28, 2015, and due to its employees on Sept. 4,
2015.
"This is an emergency matter as the employees that have provided
their time and talent to the debtor deserve to be paid. There is
substantial harm in not permitting such payments," says Joyce W.
Lindauer, Esq., at Joyce W. Lindauer Attorney, PLLC, counsel to the
Debtor. "The creditors in this case can better absorb any loss or
shortfall than can the employees and their families."
Sable Operating Company, doing business as Nytex Petroleum, Inc.,
sought Chapter 11 protection (Bankr. N.D. Tex. Case No. 15-33460)
in Dallas on Aug. 28, 2015. The case is assigned to Judge Stacey
G. Jernigan. Joyce W. Lindauer, Esq., at Joyce W. Lindauer
Attorney, PLLC, in Dallas, serves as counsel. Sable estimated $10
million to $50 million in assets and debt.
SAMSON WU: NY App. Div. Directs Mega Bank to Respond to Subpoena
----------------------------------------------------------------
The Appellate Division of the Supreme Court of New York, First
Department, affirmed the order of the Supreme Court, New York
County, entered September 9, 2014, which, to the extent appealed
from, granted B & M Kingstone, LLC's motion to direct Mega
International Commercial Bank, Co., Ltd. to fully respond to an
information subpoena.
B & M served an information subpoena on Mega's New York branch, in
order to enforce a more than $39.0 million money judgment obtained
in 2003 against Samson Wu and other individual and corporate
entities. B & M believed that Mega maintains bank accounts for the
judgment debtors and is in possession of asset belonging to the
judgment debtors.
Complying only with demands for information pertaining to its New
York branch, Mega argued, among other things, that New York courts
lack personal jurisdiction over it with respect to information from
its branches outside New York State.
The Appellate Division of the Supreme Court of New York, First
Department held that Mega's New York branch is subject to
jurisdiction requiring it to comply with the appropriate
information subpoenas, because it consented to the necessary
regulatory oversight in return for permission to operate in New
York. The said court added that Mega does not contend that
compliance with the information subpoena would be onerous or unduly
expensive or that the requested information is not available in New
York.
The case is IN RE B & M KINGSTONE, LLC, Petitioner-Respondent, v.
MEGA INTERNATIONAL COMMERCIAL BANK CO., LTD., Respondent-Appellant,
158577/14 (N.Y. Appellate Div.).
A full-text copy of the August 11, 2015 opinion is available at
http://is.gd/a7T4Mtfrom Leagle.com.
Appellant is represented by:
Alun W. Griffiths, Esq.
Susie Kim, Esq.
SATTERLEE STEPHENS BURKE & BURKE LLP
230 Park Avenue Suite 1130
New York, NY 10169-0079
Tel: (212) 818-9200
Fax: (212) 818-9606
Email: agriffiths@ssbb.com
skim@ssbb.com
Respondent is represented by:
Elias C. Schwartz, Esq.
Michelle Englander, Esq.
Sarah A. Chussler, Esq.
THE LAW FIRM OF ELIAS C. SCHWARTZ, PLLC
343 Great Neck Road
Great Neck, NY 11021-4220
Tel: (516) 487-0175
Fax: (516) 773-7706
Email: schwartz@ecslaw.com
englander@ecslaw.com
SOUTHEAST MISSOURI HEALTH: Fitch Revises Rating Watch to Evolving
-----------------------------------------------------------------
Fitch Ratings has revised the Rating Watch to Evolving from
Negative on the following Cape Girardeau County Industrial
Development Authority bonds issued on behalf of Southeast Missouri
Hospital Association (d/b/a SoutheastHealth):
-- $90.5 million hospital revenue bonds, series 2007.
The bonds are currently rated 'B'.
SoutheastHealth also has $60 million (of which $29 million is
outstanding) in direct placement debt (series 2013) which Fitch
does not rate.
SECURITY
The bonds are secured by a pledge of security interest in the
unrestricted receivables of Southeast Missouri Hospital
Association, with additional security provided by a debt service
reserve fund.
KEY RATING DRIVERS
POSSIBLE DEBT ACCELERATION: The Rating Watch reflects the potential
acceleration of the 2013 bonds following a debt service coverage
covenant violation by SoutheastHealth (for the second consecutive
year) evidenced in 2014 unaudited fiscal results. Repayment of the
2013 bonds would significantly deplete SoutheastHealth's liquidity
position. Southeast Health is currently working to obtain a waiver
from the 2013 bondholder (Regions Bank), which is expected within
the next several months.
EVIDENCE OF OPERATING IMPROVEMENT: Through the six-month interim
period ended June 30, 2015 SoutheastHealth generated a solid 8.6%
EBITDA margin and 2.9x coverage by same, with steady results
expected through year end. External reviews by two auditing firms
support the validity of revenue estimates and cash collection rates
in the interim results.
RATING SENSITIVITIES
WAIVER RESOLUTION: The failure of SoutheastHealth to obtain a
waiver of its debt service coverage covenant violation that results
in the acceleration of the 2013 bonds and a cross-default to the
series 2007 bonds would prompt negative rating pressure.
SUSTAINED IMPROVEMENTS: Assuming the execution of an acceptable
waiver of default and resolution of its covenant violation, upward
rating movement is likely should SoutheastHealth sustain improved
operating results through fiscal 2015.
CREDIT PROFILE
Located in Cape Girardeau, MO (approximately 100 miles south of St.
Louis), SoutheastHealth includes an acute care hospital with 230
staffed beds, three regional acute care facilities with a total of
94 staffed beds, home health, hospice, a new cancer center, and
various other ambulatory sites and services across the Southeast
Missouri region. In 2014 (unaudited), SoutheastHealth reported
total revenues of $290.8 million.
SoutheastHealth has a history of delayed disclosure, which is the
case for the fiscal 2014, 2013, and 2012 audited results.
SPENDSMART NETWORKS: Gets $200,000 in Loan From Bank of Lake Mills
------------------------------------------------------------------
Spendsmart Networks, Inc., on Aug. 26, 2015, entered into a
Business Promissory Note and Security Agreement with Bank of Lake
Mills for the principal sum of $200,000. The Note is for a term of
six months with a weekly repayment schedule ending Feb. 22, 2016.
The Note includes standard representations and warranties. The Note
is secured by certain assets of the Company as well as a personal
guarantee by chief executive officer Alex Minicucci. The total
repayment amount including interest and principal is $244,636 to be
paid pro-rata weekly ending Feb. 22, 2016. The Company plans to
use net proceeds from the loan for general working capital.
About SpendSmart Networks
SpendSmart Networks, Inc., provides proprietary loyalty systems
and a suite of digital engagement and marketing services that help
local merchants build relationships with consumers and drive
revenues. These services are implemented and supported by a vast
network of certified digital marketing specialists, aka "Certified
Masterminds," who drive revenue and consumer relationships for
merchants via loyalty programs, mobile marketing, mobile commerce
and financial tools, such as prepaid card and reward systems. We
enter into licensing agreements for our proprietary loyalty
marketing solution with "Certified Masterminds" which sell and
support the technology in their respective markets. The Company's
products aim to make Consumers' dollars go further when they spend
it with merchants in the SpendSmart network of merchants, as they
receive exclusive deals, earn rewards and ultimately build a
connection with their favorite merchants.
SpendSmart Networks incurred a net loss of $12.2 million on $4.03
million of total revenues for the year ended Dec. 31, 2014,
compared to a net loss of $14.09 million on $0 of total revenues
for the year ended Dec. 31, 2013.
As of June 30, 2015, the Company had $9.99 million in total assets,
$3.61 million in total liabilities and $6.37 million in total
stockholders' equity.
EisnerAmper LLP, in Iselin, New Jersey, issued a "going concern"
qualification on the consolidated financial statements for the year
ended Dec. 31, 2014, citing that the Company has recurring net
losses since inception and has yet to establish a profitable
operation. These factors among others raise substantial doubt
about the ability of the Company to continue as a going concern.
SRA INTERNATIONAL: S&P Puts 'B' CCR on CreditWatch Positive
-----------------------------------------------------------
Standard & Poor's Ratings Services said it placed all of its
ratings, including its 'B' corporate credit rating, on Fairfax,
Va.-based SRA International Inc. on CreditWatch with positive
implications.
"The CreditWatch placement follows CSC's announcement that it plans
to combine its government services unit, CSGov, with SRA upon the
spin-off of CSGov from CSC," said Standard & Poor's credit analyst
Peter Bourdon.
CSGov's greater scale, leading market position, and better
financial risk profile will provide greater creditworthiness to the
combined entity than SRA had as a stand-alone firm.
CSC expects pro forma net debt upon consummation of the spin-off
and completion of the combination with SRA to be approximately $2.7
billion, including debt incurred to fund CSC's cash dividend to
CSC's shareholders at the separation, the $390 million of cash
consideration to be paid to SRA's shareholders, and the refinancing
of SRA's existing debt of $1.06 billion ($669 million term loan B
due 2018 and $400 million senior notes due 2019). SRA is owned by
a shareholder group led by a private equity sponsor and SRA's
founder.
The transaction with SRA is targeted to close before the end of
November 2015, upon the separation of CSC's government services
unit.
S&P will monitor developments related to the proposed transaction,
including the combined entity's ultimate capital structure. As a
result, S&P expects to withdraw the corporate credit rating and
issue-level ratings on SRA after the acquisition closes.
SUSQUEHANNA AREA: Fitch Affirms 'BB+' Rating on $148MM Bonds
------------------------------------------------------------
Fitch Ratings has affirmed the Susquehanna Area Regional Airport
Authority's approximately $148 million senior airport revenue bonds
at 'BB+' and the authority's approximately $8 million subordinate
airport revenue bonds at 'BB+'. The Rating Outlook on all bonds is
Stable.
RATING RATIONALE
The 'BB+' rating reflects the airport's small market, high cost per
enplanement (CPE), high leverage and constrained liquidity and
revenue generating capability. Forecasted all-in debt service
coverage ratios are extremely low and below comparable investment
grade peers. The authority faces strong competition from regional
airports which has led to continued recent enplanement declines.
KEY RATING DRIVERS
REVENUE RISK- VOLUME: WEAKER
SMALL ENPLANEMENT BASE WITH SIGNIFICANT COMPETITION: Harrisburg
International Airport serves primarily as an Origination and
Destination (O&D) airport for the state capital region. State
government, corporations, and universities create a small traffic
base which faces significant regional competition particularly from
Baltimore-Washington International Airport, Philadelphia
International Airport, and Dulles International Airport.
REVENUE RISK- PRICE: WEAKER
HIGH COST STRUCTURE: A high passenger cost per enplanement (CPE) of
$13.55 at FYE2014 limits pricing flexibility even though the
airport operates under a new five-year hybrid use & lease agreement
(AUL) which allows the authority to raise rates and charges to meet
rate covenants.
INFRASTRUCTURE DEVELOPMENT AND RENEWAL: STRONGER
MODERN FACILITY WITH LIMITED CAPITAL NEEDS: Updated facilities
allow the Authority to maintain an internally funded five year
capital plan which totals $49.1 million funded primarily by federal
and state grants and no near term debt.
DEBT STRUCTURE: STRONGER (SR), MIDRANGE (SUB)
CONSERVATIVE DEBT STRUCTURE: All senior and subordinate lien bonds
are fixed rate, and aggregate annual debt service is flat through
2038. Debt service on senior lien bonds jumps in 2018 from $7.6
million to $12.4 million once the subordinate lien bonds mature,
and no additional debt is expected near term.
THIN COVERAGE AND HIGH LEVERAGE:
Fitch's all in coverage calculation is 1.11x at FYE2014 which
excludes the coverage account and considers PFCs as revenues rather
than an offset to debt service (FYE2014 coverage was 1.27x with the
coverage account). The Authority has a high debt burden and debt
per enplanement ($227) driven by prior capital spending and is also
highly leveraged at 11.16x total net debt to CFADS. $240,000
unrestricted cash at FYE2014 provides 116 days cash on hand when
including maintenance & operation reserve and capital improvement
reserve.
PEER ANALYSIS: Amongst its closest rating-level peers in the 'BBB'
category, such as Burlington (VT), Fresno (CA) and Pensacola (FL),
the airport demonstrates materially higher leverage and CPE, with
weaker debt service coverage and liquidity.
RATING SENSITIVITIES
NEGATIVE: Measurable contraction or elevated volatility in
passenger traffic as a result of airline service changes or
competition from larger airports operating within the region;
NEGATIVE: Deterioration of the airport's non-aviation revenue that
pressures its CPE levels.
POSITIVE: Material improvement in the airport's traffic base which
generates higher operating revenue and stronger coverage levels may
lead to a higher rating.
CREDIT UPDATE
Fitch notes the enplanement base has been relatively stable during
the recession compared to other small market airports and has
historically remained around 650,000 enplanements, only declining
1.3% during FY2014 to 649,543 enplanements because of continuing
service changes from United Airlines and US Airways. However,
enplanements declined 5.5% FYTD2015 to 301,331 through June because
Frontier left Harrisburg Airport (MDT) in April 2015 and SARAA lost
non-stop service to Denver and Orlando. Low cost carriers have
established markets at nearby airports (PHL, BWI, and IAD) which
are served by Southwest Airlines and are unlikely to serve SARAA
but legacy carries retain a strong presence at MDT. After merging
with US Airways, American Airlines remains dominant and should
provide carrier stability at 38% of FY2014 enplaned passengers.
SARAA started a new five-year Hybrid AUL January 1, 2015 which
includes an extraordinary coverage protection (ECP) from signatory
airlines if SARAA doesn't meet the required 1.00x all-in rate
covenant which Fitch views as a credit strength. The ECP allows
SARAA to increase fees to signatories if the authority foresees a
revenue shortfall and/or increased expenses that will prohibit
meeting the rate covenant.
Per the new AUL, operating revenues FYTD2015 are 4.3% higher than
the same period last year at $13.2 mil. from significant increases
in landing fees as well as concessions, parking, and facilities
rentals following new agreements. Operating revenues declined 1%
during FY2014 to $25.5 mil. from a 12.7% drop in landing fees. In
Fitch's view, the authority is managing expenses well which have
grown at a 1.59% 5yr CAGR and are down 2.4% FYTD2015 to $7.5 mil.
mostly from decreased marketing and supplies.
However, Fitch notes that the authority has thin all-in coverage
with slight flexibility to pass the majority of costs to airlines
due to a high CPE of $13.55 at FYE2014 which considers only
passenger airline revenues. They have a high debt burden and
leverage is expected to remain elevated (around 10x) through the
forecast period due to slow amortizing debt service schedule.
FY2015 Senior coverage is estimated to be 2.33x (true coverage) and
all-in coverage is estimated at 1.25x. The aggregate debt service
schedule is flat, but the subordinate lien debt service will mature
after 2017 and senior debt service will spike.
Fitch's base case and rating case both result in total debt service
coverage near the 1.25x level through FY2020, requiring management
to increase airline rates and charges starting in 2018 to meet the
1.25x all-in coverage requirement. The base case assumes moderate
enplanement growth at a 0.8% five year forecast CAGR and
inflationary cost escalation at 3% per year. The rating case
assumes a near-term enplanement shock consistent with historical
stresses and slightly greater cost escalation testing respective
five year forecast CAGRs to -0.1% and 4%. In the base case, CPE
migrates from $16 to $18 while the rating case's CPE increases
further from $17 to $23. Leverage in both cases remains elevated
at above 10x. Furthermore, the airport's overall performance and
financial metrics with very narrow coverage levels marginally above
1x when excluding the coverage account and treating PFCs as
revenue, preclude an investment grade rating.
SECURITY
The bonds are secured by airport net revenues.
T- CONYERS: Cherokee Case Dismissed Pursuant to Settlement
----------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Indiana
dismissed the Chapter 11 case of T-L Cherokee South LLC pursuant to
a settlement entered among the Debtor, Cole Taylor Bank and related
debtors.
The parties agreed to settle the disputes and issues in the Chapter
11 cases among them.
The related debtors included:
1. T-L Conyers, LLC
2. T- Smyrna, LLC
3. T-L Village Green, LLC
The settlement agreement provides that, among other things:
1. With respect to the Debtor, Conyers and Smyrna, the Bank will
enter into a note purchase and sale agreement (Iron Point PSA) for
the sale by the Bank of the Bank's claims in the Cherokee South
case, in the Smyrna case and in the Conyers case o IP-T Cherokee
South, LLC, IP-TL Symrna, LLC and IP-TL Conyers, LLC.
2. As full and complete payment to the Bank for the purchase of
the claims, the Bank will be paid:
i) $24,000,000 in cash on the closing date;
ii) the amount of the second installment of the 2014 real
estate taxes payable in August 2015 for the VG property,
which amount is estimated at $163,624 on the cosing date
subject to reproration upon receipt of the actual
installment 2014 tax bill;
iii) the amount of existing tenant security deposits for the VG
property, which amount is $65,356; and
iv) the amount of the shortfall in amount collectible from
tenants during the period commencing Jan. 1, 2015, ending
June 30, 2015, on account of real estate taxes on the VG
property relative to one-half of the estimated amount of
2014 real estate taxes payable in 2015, which shortfall
amount is estimated to be $50,611 subject to reproration
upon receipt of the actual second installment 2014 tax
bill.
3. As additional consideration to the Bank, under the settlement
agreement, Village Green will enter into a contract for the sale of
the VG property to the Bank for a purchase price of $12,000,000,
with purchase price payable by the Bank by crediting a like amount
of the Bank's claim in the case of Village Green.
About T-L Cherokee
T-L Conyers LLC, T-L Cherokee South, LLC, and two affiliates
sought Chapter 11 protection in Hammond, Indiana, on Feb. 1, 2013.
The Debtors are represented by David K. Welch, Esq., at Crane,
Heyman, Simon, Welch & Clar, in Chicago.
The Debtors own various shopping centers in Georgia and Kansas.
T-L Cherokee South (Bankr. N.D. Ind. Case No. 13-20283) estimated
assets and debts of $10 million to $50 million. T-L Cherokee owns
and operates a commercial shopping center in Overland Park, Kansas
known as "Cherokee South Shopping Center".
The Debtors are entities managed by Westchester, Illinois-based
Tri-Land Properties, Inc., which sought Chapter 11 protection (Case
No. 12-22623) on July 11, 2012.
TERRENO REALTY: Fitch Affirms 'BB' Rating on Preferred Stock
------------------------------------------------------------
Fitch Ratings has assigned a 'BBB-' rating to Terreno Realty LLC's
$50 million unsecured notes issued through a private placement on
Sept. 1, 2015. The notes have a 7-year term and bear interest at a
fixed rate of 4.23%.
These notes are the first closing in a $100 million private
placement of senior unsecured notes consisting of $50 million with
a seven-year term and $50 million with a 12-year term that the
company announced on Sept. 2, 2015. The company expects the
12-year notes to close on or around Oct. 13, 2015 and bear interest
at a fixed annual rate of 4.65%.
A full list of Fitch's ratings for Terreno Realty Corporation and
its operating partnership Terreno Realty LLC. (Terreno; TRNO or the
company) follows at the end of this release.
The Rating Outlook is Stable.
KEY RATING DRIVERS
Fitch's ratings take into account TRNO's strong portfolio market
concentrations, transparent industrial property-focused business
model, experienced management, and credit metrics that are
moderately strong for the rating. The potential for greater cash
flow volatility stemming from market, asset and tenant
concentration risk and possible missteps surrounding the company's
value added acquisition-led growth strategy balance these credit
positives. Also, the company has a less developed and shorter
track record as an unsecured borrower.
Fitch's Stable Outlook reflects our expectation that TRNO will
maintain credit metrics over the rating horizon (typically one to
two years) that are consistent with the 'BBB-' rating, in the
context of positive near- to medium-term industrial property
fundamentals.
Portfolio Concentrated in Strong Markets
Fitch expects TRNO's portfolio market fundamentals to outperform
the U.S. average over the rating horizon, based on the superior
demographics and barriers to new supply. The company's portfolio
is located in six of the strongest U.S. industrial markets,
characterized by vibrant and growing local and regional economies
with favorable population demographics and meaningful barriers to
new supply.
The above-average occupancies and rents within Terreno's markets
relative to the broader U.S. industrial property base evidences the
strong fundamentals. The institutional investor and lender
interest in TRNO's assets is likely above its peer average given
the desirable market locations supporting the company's contingent
liquidity position.
Terreno owned 137 buildings aggregating approximately 10.5 million
square feet that were approximately 94.4% leased to 317 customers
as of June 30, 2015, as well as two improved land parcels
consisting of 3.5 acres.
Transparent Operating Strategy
Fitch views Terreno's transparent and well-defined operating
strategy as a credit positive. The company targets 100% fee simple
ownership of industrial assets in six key logistics markets that
include Northern NJ/NY (25% of annualized base rent [ABR]),
D.C./Baltimore (24%), Miami (15%), Los Angeles (15%), San Francisco
(13%) and Seattle (8%).
TRNO has not made, nor does its business model contemplate,
investments in ground-up development or unconsolidated joint
venture partnerships (JVs). The absence of these items helps
simplify the company's business model, improve financial reporting
transparency and reduce potential contingent liquidity claims,
which Fitch views positively.
Fitch's rating for TRNO includes some flexibility for selective
ground-up development at existing owned in-fill properties, as well
as a limited amount of JVs if, for example only a partial interest
in an attractive industrial portfolio in its markets was available
for purchase.
Strong Credit Metrics
Fitch expects TRNO's leverage to sustain within a range of 6.0x -
6.5x through 2017, on an adjusted basis that includes a full-year's
contribution from external investment activity. Fitch expects the
company's fixed-charge coverage (FCC) to moderate, but remain
strong over the rating horizon as the company transitions toward
more fixed-rate debt. Fitch's projections show the company's FCC
improving to the mid-3.0x range through 2017.
The company has publicly committed to financial policies through
the cycle that are consistent to moderately strong for a 'BBB-'
rated REIT with TRNO's asset profile. These include maintaining
net debt-to-recurring operating EBITDA below 6.5x and FCC above
2.0x. The company's stated policy is to target a dividend payout
of 100% of its taxable net income.
Solid Liquidity Position
Fitch estimates TRNO's sources of capital cover its uses by 2.5x
for the period July 1, 2015 to Dec. 31, 2016. Limited near-term
debt maturities, full availability under the company's $100 million
revolver and the absence of unfunded development commitments are
key factors that support its liquidity position.
TRNO's unencumbered assets cover its unsecured debt (UA/UD) by
2.5x, pro forma for its $50 million unsecured notes offering. Fitch
calculates unencumbered asset value using a direct capitalization
approach of TRNO's annualized 2Q'15 unencumbered net operating
income (NOI) that assumes a stressed 8.75% through the cycle cap
rate. Fitch expects the company's UA/UD to moderate to the
low-to-mid 2x range as it progresses in its unsecured borrowing
strategy, which would remain appropriate for the.
The company has few near-term maturities; however, it does face a
meaningful amount of debt coming due during 2019 to 2021 when its
three unsecured term loans mature. Fitch expects the company to
refinance these obligations well ahead of their stated maturities,
most likely with proceeds from new unsecured borrowings.
Experienced Management
TRNO has a strong management team with extensive industrial real
estate and capital markets experience. Many of the company's key
executives previously held high level executive positions at AMB
Property prior to its merger with ProLogis.
Portfolio Market and Tenant Concentration
TRNO's concentrated portfolio strategy exposes it to idiosyncratic
market and asset risks and could result in above-average property
income volatility. Examples could include a regional economic
downturn or loss of a significant tenant. Fitch expects the
portfolio's asset and tenant granularity to improve as TRNO
executes on its value-add acquisition-led growth strategy. However,
we do not expect the company to expand beyond its six major
markets.
The company's small size and concentration in markets with higher
per square foot industrial values relative to its peers has
contributed to its below-average asset granularity. Two markets -
Northern NJ/NY and D.C./Baltimore - comprised of 49.2% of the
company's ABR as of June 30, 2015. Moreover, its 10 largest
properties (at cost) accounted for roughly 40% of its total
investment in real estate. The multiple-building nature of many of
its larger assets, as well as their infill locations help to offset
the asset concentration risk.
TRNO's top-20 tenants comprised 42% of ABR at June 30, 2015, which
is meaningfully more concentrated than the comparable 21% median
for its peers. Moreover, the company's largest tenant (FedEx
Corp.) comprised 4.5% of its ABR versus a comparable median of 2.2%
for its peers. Fitch views the company's portfolio tenant
concentration as a credit risk that could lead to greater cash flow
volatility, all else equal. However, the strong tenant credit
quality of many of its largest tenants and multiple leases with
many of these tenants help balance the tenant concentration risk.
Execution Risk in Value-Add Acquisitions
TRNO's external growth strategy centers principally on the
acquisition and stabilization of industrial assets, primarily
through some combination of lease-up and property redevelopment.
Fitch generally views the value-add strategy as being in between
'core' investments and ground-up development in risk/return space.
Value-add acquisitions can entail additional risk given less
familiarity with an asset relative to the repositioning of existing
owned assets. However, Fitch views TRNO management's extensive
industrial property experience and the small dollar value and
homogeneity of industrial assets as risk mitigants.
Improving Unsecured Capital Access
TRNO's sale of $100 million of private placement unsecured notes
(including $50 million under a delayed draw set for Oct. 2015) is
an important milestone in the company's transition to a
predominantly unsecured borrowing strategy that evidences broader
access to unsecured debt capital. Prior to the company's inaugural
private unsecured notes placement, TRNO's unsecured borrowings were
limited to its three term loans, as well as drawdowns under the
company's unsecured revolver. However, Fitch continues to view
TRNO as a relatively unseasoned unsecured bond issuer pending
further private placement issuance.
Preferred Stock Notching
The two-notch differential between TRNO's IDR and preferred stock
rating is consistent with Fitch's criteria for corporate entities
with a 'BBB-' IDR. These preferred securities are deeply
subordinated and have loss absorption elements that would likely
result in poor recoveries in the event of a corporate default.
KEY ASSUMPTIONS
-- GAAP SSNOI growth (excluding redevelopment properties) of
roughly 4% in 2015 and 3% in 2016 and 2017;
-- Acquisitions of $350 million in 2015, 2016 and 2017 at an
approximate 6% stabilized average cap rate;
-- Dispositions of $25 million per annum at cap rates of 5.5%;
-- Unsecured borrowings of $150 million during 2015, $120
million during 2016 and $115 million during 2017 at rates of
4.25%, 4.5% and 4.75%, respectively;
-- Equity issuance of roughly $40 million during 2015,
$200 million during 2016 and $150 million during 2017;
-- TRNO refinances its preferred equity when it becomes
callable in 2017 with new common equity;
-- The company unencumbers assets as mortgages mature with the
proceeds from new unsecured debt and equity raises.
RATING SENSITIVITIES
These factors may have a positive impact on the ratings and/or
Rating Outlook:
-- Further asset and tenant level diversification within the
company's concentrated, six-market portfolio;
-- Demonstrated access to the unsecured bond market;
-- Fitch's expectation of leverage sustaining in the low 6.0x
range (leverage was 4.6x for the annualized quarter ended
June 30, 2015);
-- Fitch's expectation of FCC sustaining above 3.0x (coverage
was 4.1x for the quarter ended June 30, 2015).
These factors may have a negative impact on the ratings and/or
Rating Outlook:
-- Fitch's expectation of leverage sustaining above 7.0x;
-- Fitch's expectation of FCC sustaining below 2.0x.
FULL LIST OF RATING ACTIONS
Fitch currently rates Terreno:
Terreno Realty Corporation
-- Issuer Default Rating (IDR) 'BBB-';
-- Preferred stock 'BB'.
Terreno Realty LLC
-- IDR 'BBB-';
-- Senior unsecured revolving line of credit 'BBB-';
-- Senior unsecured term loans 'BBB-';
TRANSTAR HOLDING: Moody's Cuts Corporate Family Rating to B3
------------------------------------------------------------
Moody's Investors Service downgraded Transtar Holding Company's
Corporate Family Rating (CFR) to B3 from B2, its Probability of
Default Rating to B3-PD from B2-PD, and the ratings of the
company's first and second lien credit facilities to B2 and Caa2,
respectively. The ratings outlook is negative.
The downgrade to B3 CFR reflects Transtar's weaker than expected
operating performance and the risk that the company may not be able
to grow its profitability meaningfully over the next 12-18 months,
leading to sustained weak credit metrics, including debt leverage
of about 6.7 times (Moody's adjusted) as of June 30, 2015. Earnings
have remained weak in fiscal 2014 and in the first half of 2015
driven by lower sales volume and challenges associated with ETX
integration. Moody's believes that despite overall growth in the
industry, poor execution and lack of operating discipline under the
prior management team contributed to the company's underperformance
over the last two years. The negative revenue trend suggests that
Transtar is still losing market share to its competitors, which are
significantly smaller in scale and regionally concentrated.
Moody's is also concerned about Transtar's prospects for earnings
improvement in the near term, in the context of the company's need
to bolster its liquidity. With covenants gradually stepping-down
through October 2017, a lack of material EBITDA improvement may
lead to covenant tightness in the next several quarters.
Moody's took the following rating actions on Transtar Holding
Company
-- Corporate Family Rating, downgraded to B3 from B2
-- Probability of Default Rating, downgraded to B3-PD from B2-PD
-- $50 million first lien senior secured revolving credit facility
due 2017, downgraded to B2 (LGD3) from B1 (LGD3)
-- $370 million first lien senior secured term loan due 2018,
downgraded to B2 (LGD3) from B1 (LGD3)
-- $170 million second lien senior secured term loan due 2019,
downgraded to Caa2 (LGD5) from Caa1 (LGD5)
-- Ratings outlook, negative
RATINGS RATIONALE
Transtar's B3 CFR reflects the company's high debt leverage of
mid-to-high 6 times and weak operating performance as result of
poor execution and higher than expected costs stemming from ETX
consolidation. Moody's expects earnings to grow very modestly over
the next 12-18 months, and, as such, debt leverage is expected to
remain elevated. Transtar's adequate liquidity profile, including
absence of near-term maturities and low capital requirements,
afford the company time to improve operations. However, we expect
cushion under the company's total net leverage ratio to tighten in
the next several quarters, absent material earnings improvement.
While Transtar has significant scale in the highly fragmented
automotive aftermarket driveline parts and components industry, the
rating is also constrained by its modest size compared to the
broader automotive replacement part supplier/retailer peer group.
Transtar's rating is supported by the relatively stable demand for
automotive aftermarket driveline parts and components.
The negative outlook reflects the risk that liquidity may weaken
and debt leverage could increase further. Moody's could stabilize
Transtar's ratings outlook if the company achieves meaningful
revenue and earnings growth and improves its liquidity profile,
including availability of funds under the revolving credit facility
and headroom under its financial covenant.
Transtar's ratings could be downgraded if revenue or EBITDA
continue to decline or liquidity deteriorates further.
Moody's could upgrade Transtar's ratings if the company
demonstrates sustained growth in revenue and earnings, reduces
debt/EBITDA (Moody's adjusted) below 6.0 times and maintains a good
liquidity profile.
The principal methodology used in these ratings was Global
Distribution & Supply Chain Services published in November 2011.
Transtar Holding Company (Transtar) is a distributor of automotive
aftermarket driveline replacement parts, kits and components sold
to the transmission repair and remanufacturing market. The company
also supplies autobody refinishing products to professional
aftermarket automotive refinishers and autobody repair shops. Net
revenue for the twelve month period ended June 30, 2015 was more
than $500 million. The company has been majority-owned by
affiliates of Friedman Fleischer & Lowe, LLC (FFL) since 2010.
TROCOM CONSTRUCTION: Files Schedules of Assets and Liabilities
--------------------------------------------------------------
Trocom Construction Corp. filed with the U.S. Bankruptcy Court for
the Eastern District of New York its schedules of assets and
liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $0
B. Personal Property $32,462,383
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $6,777,598
E. Creditors Holding
Unsecured Priority
Claims $0
F. Creditors Holding
Unsecured Non-Priority
Claims $10,407,239
----------- -----------
Total $32,462,383 $17,184,837
A copy of the schedules is available for free at
http://bankrupt.com/misc/TrocomConstruction_99_July22SAL.pdf
About Trocom Construction
Trocom Construction Corp. was formed in 1969 by Salvatore Trovato.
The Company is in the heavy construction business. Its primary
customer is the City of New York through its various agencies.
The
Company has 75 employees, the majority of whom are members of
various unions. Joseph Trovato is presently the president and
holder of 100% of the voting shares of Trocom.
Trocom commenced a Chapter 11 bankruptcy case (Bankr. E.D.N.Y. Case
No. 15-42145) on May 7, 2015, in Brooklyn.
Judge Nancy Hershey Lord presides over the case. The Debtor tapped
Cullen & Dykman, LLP, as its general bankruptcy counsel.
The Debtor disclosed total assets of $32,462,383 and total
liabilities of $17,184,837 as of the Chapter 11 filing.
TROCOM CONSTRUCTION: Grassi & Co. Approved as Financial Advisor
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of New York
authorized Trocom Construction Corp., to employ Grassi & Co. as
financial advisor.
Grassi is expected to, among other things:
1. assist in the preparation and review of all budgets and
financial analyses required in the Debtor's case;
2. assist in the preparation and review of monthly operating
reports; and
3. assist in the preparation and review of any reports required
by the Debtor's secured lenders and surety.
The Debtor agreed to compensate Grassi as its usual hourly rates
of:
Partners $375 - $400
Managers/Supervisors $225 - $310
Staff Accountants and Bookkeepers $135 - $205
Support Staff $80 - $135
Ron Eagar, the chief operating officer of Grassi, and audit
partner, with an hourly rate of $400, and David Freda, a CPA and
partner at Grassi, with an hourly rate of $375, will have the
primary responsibilities in the engagement.
The Debtor also agreed to reimburse Grassi for expenses, charges
and disbursements.
Grassi, with offices located at, among other locations, 50 Jericho
Quadrangle, Jericho, New York and 488 Madison Avenue, New York
City, is owed $51,298 for prepetition services to the Debtor, which
it agreed to waive.
To the best of the Debtor's knowledge, Grassi is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
About Trocom Construction
Trocom Construction Corp. was formed in 1969 by Salvatore Trovato.
The Company is in the heavy construction business. Its primary
customer is the City of New York through its various agencies. The
Company has 75 employees, the majority of whom are members of
various unions. Joseph Trovato is presently the president and
holder of 100% of the voting shares of Trocom.
Trocom commenced a Chapter 11 bankruptcy case (Bankr. E.D.N.Y. Case
No. 15-42145) on May 7, 2015, in Brooklyn.
Judge Nancy Hershey Lord presides over the case. The Debtor tapped
Cullen & Dykman, LLP, as its general bankruptcy counsel.
The Debtor disclosed total assets of $32,462,383 and total
liabilities of $17,184,837 as of the Chapter 11 filing.
According to the docket, the Chapter 11 plan and disclosure
statement are due Sept. 4, 2015.
TROCOM CONSTRUCTION: Has Until Dec. 3 to Assume or Reject Leases
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of New York
granted Trocom Construction Corp.'s request to extend until Dec. 3,
2015, the time to assume or reject unexpired leases of
non-residential real property.
According to the Debtor, prior to the Petition Date, it entered
into leases agreement with various landlords pursuant to which the
Debtor eases field offices in connection with certain of its open
construction projects with the agencies of the City of New York and
office space from which to operate its headquarters.
The leases, the Debtor noted, are critical to its ability to
operate, as it requires the field office eases to run field
operations on its open construction projects and requires a
headquarters for home office administrative functions.
About Trocom Construction
Trocom Construction Corp. was formed in 1969 by Salvatore Trovato.
The Company is in the heavy construction business. Its primary
customer is the City of New York through its various agencies.
The
Company has 75 employees, the majority of whom are members of
various unions. Joseph Trovato is presently the president and
holder of 100% of the voting shares of Trocom.
Trocom commenced a Chapter 11 bankruptcy case (Bankr. E.D.N.Y. Case
No. 15-42145) on May 7, 2015, in Brooklyn.
Judge Nancy Hershey Lord presides over the case. The Debtor tapped
Cullen & Dykman, LLP, as its general bankruptcy counsel.
The Debtor disclosed total assets of $32,462,383 and total
liabilities of $17,184,837 as of the Chapter 11 filing.
TROCOM CONSTRUCTION: Has Until Dec. 3 to File Chapter 11 Plan
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of New York
granted Trocom Construction Corp.'s request for an extension of its
exclusive periods to file a chapter 11 plan until Dec. 3, 2015 and
solicit acceptances for that Plan until Feb. 3, 2016.
About Trocom Construction
Trocom Construction Corp. was formed in 1969 by Salvatore Trovato.
The Company is in the heavy construction business. Its primary
customer is the City of New York through its various agencies. The
Company has 75 employees, the majority of whom are members of
various unions. Joseph Trovato is presently the president and
holder of 100% of the voting shares of Trocom.
Trocom commenced a Chapter 11 bankruptcy case (Bankr. E.D.N.Y. Case
No. 15-42145) on May 7, 2015, in Brooklyn.
Judge Nancy Hershey Lord presides over the case. The Debtor tapped
Cullen & Dykman, LLP, as its general bankruptcy counsel.
The Debtor disclosed total assets of $32,462,383 and total
liabilities of $17,184,837 as of the Chapter 11 filing.
TROCOM CONSTRUCTION: Oct. 1, 2015 Fixed as Gen. Claims Bar Date
---------------------------------------------------------------
The Hon. Nancy Hershey Lord of the U.S. Bankruptcy Court for the
Eastern District of New York established these dates in relation to
the Chapter 11 case of Trocom Construction Corp.:
1. Oct. 1, 2015 at 5:00 p.m., as the deadline for any individual
or entity to file proofs of claim against the Debtor; and
2. Nov. 4, 2015, as the deadline for proofs of claim filed by
governmental units.
Original proofs of claim must be filed with:
U.S. Bankruptcy Court Eastern District of New York
Conrad B. Duberstein U.S. Courthouse
271-C Cadman Plaza East, Suite 1595
Brooklyn, NY 11201-1800
About Trocom Construction
Trocom Construction Corp. was formed in 1969 by Salvatore Trovato.
The Company is in the heavy construction business. Its primary
customer is the City of New York through its various agencies. The
Company has 75 employees, the majority of whom are members of
various unions. Joseph Trovato is presently the president and
holder of 100% of the voting shares of Trocom.
Trocom commenced a Chapter 11 bankruptcy case (Bankr. E.D.N.Y. Case
No. 15-42145) on May 7, 2015, in Brooklyn.
Judge Nancy Hershey Lord presides over the case. The Debtor tapped
Cullen & Dykman, LLP, as its general bankruptcy counsel.
The Debtor disclosed total assets of $32,462,383 and total
liabilities of $17,184,837 as of the Chapter 11 filing.
USA DISCOUNTERS: Can Employ KCC as Claims & Noticing Agent
----------------------------------------------------------
Judge Chistopher S. Sontchi of the U.S. Bankruptcy Court for the
District of Delaware authorized USA Discounters, Ltd., et al., to
employ Kurtzman Carson Consultants LLC as claims and noticing
agent.
Prior to the Petition Date, the Debtors provided KCC with a
retainer in the amount of $15,000.
According to the services agreement, KCC will charge at these
rates for these consulting services:
Discounted
Position Hourly Rate
-------- -----------
Executive Vice President Waived
Director/Senior Managing Consultant $170
Consultant/Senior Consultant $70 to $155
Project Specialist $50 to $95
Technology/Programming Consultant $35 to $70
Clerical $25 to $45
Weekend, holidays and overtime Waived
For its noticing services, KCC will waive fees for electronic
noticing, and will charge $0.08 per page for facsimile noticing.
For claims administration and management, KCC will charge $0.10 per
creditor per month for license fee and data storage. For online
claims filing (ePOC) services, the firm will waive the fees.
About USA Discounters
USA Discounters was founded in May 1991. in the City of Norfolk,
Virginia, under the name USA Furniture Discounters, Ltd. It sold
goods through two groups of stores -- one group of specialty
retail stores operating under the "USA Living" brand, typically in
standalone locations, and seven additional retail stores operating
under the "Fletcher's Jewelers" brand, typically in major shopping
malls.
USA Discounters, Ltd., and two affiliates sought Chapter 11
bankruptcy protection (Bankr. D. Del. Lead Case No. 15-11755) on
Aug. 24, 2015, to wind down the business.
The Debtors tapped Pachulski Stang Ziehl & Jones LLP and Klee,
Tuchin, Bogdanoff & Stern LLP as attorneys, and Kurtzman Carson
Consultants, LLC, as claims and noticing agent.
USA Discounters estimated $100 million to $500 million in assets
and $50 million to $100 million in liabilities.
USA DISCOUNTERS: Court Issues Joint Administration Order
--------------------------------------------------------
Judge Chistopher S. Sontchi of the U.S. Bankruptcy Court for the
District of Delaware issued an order directing joint administration
of the Chapter 11 cases of USA Discounters, Ltd., USA Discounters
Holding Company, Inc., and USA Discounters Credit, LLC, under Lead
Case No. 15-11755.
About USA Discounters
USA Discounters was founded in May 1991. in the City of Norfolk,
Virginia, under the name USA Furniture Discounters, Ltd. It sold
goods through two groups of stores -- one group of specialty
retail stores operating under the "USA Living" brand, typically in
standalone locations, and seven additional retail stores operating
under the "Fletcher's Jewelers" brand, typically in major shopping
malls.
USA Discounters, Ltd., and two affiliates sought Chapter 11
bankruptcy protection (Bankr. D. Del. Lead Case No. 15-11755) on
Aug. 24, 2015, to wind down the business.
The Debtors tapped Pachulski Stang Ziehl & Jones LLP and Klee,
Tuchin, Bogdanoff & Stern LLP as attorneys, and Kurtzman Carson
Consultants, LLC, as claims and noticing agent.
USA Discounters estimated $100 million to $500 million in assets
and $50 million to $100 million in liabilities.
USA DISCOUNTERS: Seeks to Employ Klee Tuchin as Bankr. Counsel
--------------------------------------------------------------
USA Discounters, Ltd., et al., seek authority from the U.S.
Bankruptcy Court for the District of Delaware to employ Klee,
Tuchin, Bogdanoff & Stern LLP, as counsel.
The professional services that KTB&S will render include, without
limitation, the following:
(a) advising the Debtors with respect to their rights, duties,
and powers in the bankruptcy cases as debtors and
debtors-in-possession in the continued management and
operation of their businesses and properties;
(b) attending meetings and negotiating with representatives of
creditors and other parties-in-interest and advising and
consulting on the conduct of the bankruptcy cases,
including the bankruptcy cases, including all of the legal
and administrative requirements of operating in Chapter 11;
(c) advising and assisting the Debtors with respect to actions
to protect, preserve, and enhance the Debtors' estates,
including the prosecution of actions on their behalf, the
defense of actions commenced against their estates,
negotiations concerning litigation in which the Debtors may
be involved, and objections to claims filed against their
estates;
(d) preparing, on behalf of the Debtors, motions, applications,
answers, orders, reports, and papers necessary to the
administration of their estates;
(e) negotiating and preparing, on the Debtors' behalf, plan(s)
of reorganization or liquidation, disclosure statement(s),
and all related agreements and/or documents, and taking
appropriate action on behalf of the Debtors to obtain
confirmation of that plan(s);
(f) advising the Debtors in connection with the sale of any
assets;
(g) appearing before the Court, any appellate courts on matters
originating before the Court, and the United States
Trustee; and
(h) performing other necessary and appropriate legal services,
within the scope of KTB&S's practice, for the Debtors in
connection with their bankruptcy cases.
KTB&S's hourly rates for 2015 are as follows:
Partners and Of-Counsel $650 - $1,300
Associates $395 - $495
Paralegal $290
The principal attorneys and paralegal presently designated to
represent the Debtors, and their current hourly rates, are:
Michael L. Tuchin, Esq. $1,080
Lee R. Bogdanoff, Esq. $1,080
Whitman L. Holt, Esq. $695
Sasha M. Gurvitz, Esq. $395
Shanda D. Pearson, Esq. $290
The firm will be reimbursed for any necessary out-of-pocket
expenses.
On March 6, 2015, the Debtors paid to KTB&S an initial retainer
amount of $275,000. As of the Petition Date, the amount of the
retainer is approximately $234,398.
Michael L. Tuchin, Esq., a founding partner in the law firm of
Klee, Tuchin, Bogdanoff & Stern LLP, in Los Angeles, California,
assures the Court that it 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.
Mr. Tuchin, however, discloses that KTB&S previously represented
Alvarez & Marsal, Inc.; Herbert and Bui Simon, who may be
affiliated with Simon Property Group, L.P.; in unrelated matters.
Moreover, Mr. Tuchin says a partner at KTB&S, Kenneth N. Klee,
previously served as an expert witness (or consultant) in unrelated
matters for Alvarez & Marsal, Inc.
Pursuant to the U.S. Trustee Guidelines, Mr. Tuchin discloses that
his firm did not agree to any variations from, or alternatives to,
the standard or customary billing arrangements for the engagement
and none of the firm's professionals included in the engagement
vary their rate based on the geographic location of the bankruptcy
case.
Mr. Tuchin disclosed that KTB&S represented the Debtors in the 12
months prior to the Petition Petition Date. The Debtors, KTB&S,
and Pachulski Stang Ziehl & Jones, expect to develop a prospective
budget and staffing plan to comply with the U.S. Trustee's request
for information and additional disclosures, recognizing that in the
course of the Chapter 11 cases there may be unforeseeable fees and
expenses that will need to be addressed by the Debtors, KTB&S and
PSZ&J.
The firm may be reached at:
Lee R. Bogdanoff, Esq.
Michael L. Tuchin, Esq.
Whitman L. Holt, Esq.
Sasha M. Gurvitz, Esq.
KLEE, TUCHIN, BQGDANOFF BL STERN LLP
1999 Avenue of the Stars, 39th Floor
Los Angeles, CA 90067
Tel: (310) 407-4023
Fax: (310) 407-9090
Email: lbogdanoff@ktbslaw. com
mtuchin@ktbslaw.com
wholt@ktbslaw.com
sgurvitz@ktbslaw. com
About USA Discounters
USA Discounters was founded in May 1991. in the City of Norfolk,
Virginia, under the name USA Furniture Discounters, Ltd. It sold
goods through two groups of stores -- one group of specialty
retail stores operating under the "USA Living" brand, typically in
standalone locations, and seven additional retail stores operating
under the "Fletcher's Jewelers" brand, typically in major shopping
malls.
USA Discounters, Ltd., and two affiliates sought Chapter 11
bankruptcy protection (Bankr. D. Del. Lead Case No. 15-11755) on
Aug. 24, 2015, to wind down the business.
The Debtors tapped Pachulski Stang Ziehl & Jones LLP and Klee,
Tuchin, Bogdanoff & Stern LLP as attorneys, and Kurtzman Carson
Consultants, LLC, as claims and noticing agent.
USA Discounters estimated $100 million to $500 million in assets
and $50 million to $100 million in liabilities.
VICTORY HEALTHCARE: CVMC REIT Re-Leases Hospital to Cumberland
--------------------------------------------------------------
Carter Validus Mission Critical REIT, Inc., on Sept. 3 disclosed
that it has successfully re-leased its 25-bed surgical hospital in
San Antonio, Texas to Cumberland Surgical Hospital of San Antonio,
LLC for a 20-year term. The hospital was previously leased to an
affiliate of Victory Healthcare, which filed for bankruptcy in June
2015. "We are excited to enter into a lease with Cumberland
Surgical Hospital, demonstrating our ability to re-position our
assets when needed. We look forward to the facility serving the
San Antonio community for years to come," said Michael Seton,
President of CVMC REIT.
About Carter Validus Mission Critical REIT
CVMC REIT is a real estate investment trust that invests in mission
critical real estate assets located throughout the United States.
Mission critical real estate assets are purpose-built facilities
designed to support the most essential operations of tenants. CVMC
REIT focuses its acquisitions of mission critical assets in the
data center and healthcare property sectors.
About Victory Healthcare
Victory Parent Company, LLC, and 8 affiliated companies sought
Chapter 11 protection in Fort Worth, Texas (Bankr. N.D. Tex.) on
June 12, 2015, in Ft. Worth, Texas. The Debtors are seeking joint
administration for procedural purposes, meaning that all pleadings
will be maintained on the case docket for Victory Medical Center
Mid-Cities, LP; Case No. 15-42373-RFN.
Headquartered in The Woodlands, Texas, Victory Parent Company
manages six medical centers in Texas. Founded in 2005, Victory
now
maintains medical centers offering emergency room services in
through Victory Medical Center Mid-Cities in Hurst, Victory
Medical
Center Plano, Victory Medical Center Craig Ranch in McKinney, and
Victory Medical Center Landmark in San Antonio. The company also
manages its Victory Medical Center Beaumont and Houston-East,
which
are not part of the Chapter 11 filing and will be sold separately.
The Debtors tapped Hoover Slovacek, LLP, as counsel; Epiq
Bankruptcy Solutions, LLC, as claims agent; and Baker, Donelson,
Bearman, Caldwell & Berkowitz, PC, as special counsel.
WASHINGTON HEIGHTS: Asset Sale Allows Payment in Full Plus Interest
-------------------------------------------------------------------
Washington Heights Parking, LLC, has filed a Chapter 11 plan
premised on the private sale of the Debtor's building in 4320
Broadway, New York, to 185 Garage, LLC, for $26,300,000.
The buyer is an affiliate of the existing subtenant who operates
the garage. The contract is for all cash with a 5% down payment
and the balance payable on the closing of the sale. The sale will
be approved when the Plan is confirmed.
The Debtor tried to sell the premises through various brokers. The
offer of $26.3 million is the highest and best offer the Debtor
received. The offer was obtained from the buyer directly without
any real estate commission which would approximate $1 million.
The selling price results in the Debtor being able to pay its
creditors in full with interest, and leave an equity for its equity
holder of over $8 million.
Given that all creditors will be paid in full with interest, the
Debtor's sole equity holder, Jose Espinal, is the primary party in
interest in the sale. Mr. Espianl is wholly supportive of the sale,
which is not subject to a mortgage contingency and where the Debtor
and the buyer are moving to have the sale approved as expeditiously
as possible.
C.W. Capital Asset Management (Class 1), the holder of first
mortgage, has a secured claim in the estimated amount of
$15,400,000, including accrued interest and default interest.
Approximately $3 million of the claim is disputed. The allowed
secured claim of New York City for unpaid real estate taxes (Class
2) is estimated at $19,000. General unsecured creditors (Class 3)
have asserted $310,000 in claims, of which $97,000 is disputed.
The equity holder (Class 4) will receive the remainder of the sale
proceeds after all claims are paid in full with interest.
A copy of the Disclosure Statement filed in support of the Plan of
Reorganization dated July 23, 2015, is available for free at:
http://bankrupt.com/misc/Washington_H_Plan_DS.pdf
About Washington Heights
Washington Heights Parking, LLC, one of 20 companies owned by real
estate developer Jose Espinal, sought bankruptcy protection (Bankr.
S.D.N.Y. Case No. 15-11687) in Manhattan on June 26, 2015.
Washington Heights Parking, a real estate business, owns a building
at 4320 Broadway, New York. It leases the premises to three
tenants who pay annualized rents of approximately $1.4 million.
Washington Heights' case is assigned to Judge Martin Glenn. The
Debtor tapped Sachs & Associates, in Albertson, New York, as
counsel.
Mr. Espinal filed his own Chapter 11 petition (Bankr. S.D.N.Y. Case
No. 10-_____) on Nov. 30, 2010. Mr. Espinal filed a plan of
reorganization in his Chapter 11 proceeding. His plan was
confirmed by an order of confirmation dated Nov. 3, 2014, and his
Chapter 11 proceeding was closed by Court order on March 27, 2015.
WESTLAKE VILLAGE: Court Dismisses and Closes Chapter 11 Case
------------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California
dismissed and closed the Chapter 11 case of Westlake Village
Property, LP. The order only concerns Westlake Property and not
debtor Mid-Wilshire Property, LP.
The Court concluded that no further matters require that the case
remain open, or that the jurisdiction of the Court continue.
On March 12, 2014, creditor Dr. Leevil, LLC, requested that the
Court convert the case from Chapter 11 to Chapter 7, or dismiss the
case.
About Westlake Village
Westlake Village Property, LP, sought Chapter 11 bankruptcy
protection (Bankr. C.D. Cal. Case No. 14-bk-11980) in Santa
Barbara, California, on Sept. 9, 2014.
The case is assigned to Judge Deborah J. Saltzman.
The Westlake Village, California-based entity, Single Asset Real
Estate as defined in 11 U.S.C. Sec. 101(51B), estimated $10
million to $50 million in assets and $1 million to $10 million in
debt.
The Company is represented by Leslie A Cohen, Esq., at Leslie
Cohen Law PC, in Santa Monica, California, as counsel.
An affiliate, Mid-Wilshire Property, LP sought bankruptcy
protection on Sept. 7, 2014 (Case No. 14-11960), which case is
also pending before Judge Saltzman.
On Sept. 26, 2014, the Court approved the joint administration of
the Debtors' cases.
XZERES CORP: Files Amended Certificate of Designation
-----------------------------------------------------
XZERES Corp. filed a current report on Form 8K/A to amend and
supplement the Form 8K filed by the Company with the Securities and
Exchange Commission on June 15, 2015, relating to the Series B
preferred shares of stock.
On Aug. 28, 2015, the Company filed an Amendment to Certificate of
Designation with the Nevada Secretary of State, as permitted by our
articles of incorporation and Nev. Rev. Stat. 78.1955, a copy of
which is available for free at http://is.gd/7UpoGJ
About XZERES Corp.
Headquartered in Wilsonville, Oregon, XZERES Corp. designs,
develops, and markets distributed generation, wind power systems
for the small wind (2.5kW-100kW) market as well as power
management solutions.
Xzeres reported a net loss of $10.7 million on $4.4 million of
gross revenues for the year ended Feb. 28, 2015, compared to a net
loss of $9.5 million on $4 million of gross revenues for the year
ended Feb. 28, 2014.
As of May 31, 2015, the Company had $6.80 million in total assets,
$18.2 million in total liabilities, and a stockholders' deficit of
$11.4 million.
KLJ & Associates, LLP, in Edina, MN, issued a "going concern"
qualification on the consolidated financial statements for the year
ended Feb. 28, 2015, citing that the Company has incurred losses
from operations, has negative working capital and is in need of
additional capital to grow its operations. These factors raise
substantial doubt about the Company's ability to continue as a
going concern.
XZERES CORP: Ravago Holdings Reports 16.8% Stake as of Aug. 28
--------------------------------------------------------------
In an amended Schedule 13D filed with the Securities and Exchange
Commission, Ravago Holdings America Inc. disclosed that as of Aug.
28, 2015, it beneficially owned 12,272,423 shares of common stock
of Xzeres Corp., which represents 16.86 percent based upon
72,768,897 shares of common stock of Xzeres Corp. issued and
outstanding on April 6, 2015. A copy of the regulatory filing is
available for free at http://is.gd/H4noWi
About XZERES Corp.
Headquartered in Wilsonville, Oregon, XZERES Corp. designs,
develops, and markets distributed generation, wind power systems
for the small wind (2.5kW-100kW) market as well as power
management solutions.
Xzeres reported a net loss of $10.7 million on $4.4 million of
gross revenues for the year ended Feb. 28, 2015, compared to a net
loss of $9.5 million on $4 million of gross revenues for the year
ended Feb. 28, 2014.
As of May 31, 2015, the Company had $6.80 million in total assets,
$18.2 million in total liabilities, and a stockholders' deficit of
$11.4 million.
KLJ & Associates, LLP, in Edina, MN, issued a "going concern"
qualification on the consolidated financial statements for the year
ended Feb. 28, 2015, citing that the Company has incurred losses
from operations, has negative working capital and is in need of
additional capital to grow its operations. These factors raise
substantial doubt about the Company's ability to continue as a
going concern.
[*] Robert Katz and Michael DuFrayne Join EisnerAmper
-----------------------------------------------------
EisnerAmper LLP on Sept. 1 disclosed that a team of
Philadelphia-based restructuring and performance improvement
professionals from Executive Sounding Board Associates LLC have
joined EisnerAmper's Philadelphia office. Led by Robert Katz and
Michael DuFrayne, who will join the firm as Managing Directors, the
team will extend and expand the capabilities and scope of
EisnerAmper's Bankruptcy and Restructuring practice.
"Rob, Mike and members of their team are well-known and
well-respected in the industry and will enhance our already strong
bankruptcy and restructuring practice," said Allen Wilen, National
Leader of EisnerAmper's Bankruptcy and Restructuring Group. "Their
expertise will serve to elevate the services we offer that help our
clients maximize performance, improve cash flow and increase
growth. Their national network of clients and contacts will
contribute to the Firm's growth and development throughout the
United States."
Robert Katz has more than 25 years of experience working with
public and private middle-market companies. Through his focus on
performance improvement he has helped healthy companies as well as
under-performing and financially troubled businesses across a wide
variety of industries. Mr. Katz also assists companies in debt
refinancings and has guided clients through strategic acquisitions,
raising equity capital, and divestitures. In a leadership
capacity, Mr. Katz has acted as Interim President, CFO, COO, CRO
and has served as a plan administrator, distribution trustee and
receiver. He also has served as advisor to trustees, creditors'
committees, company management, lenders and private equity funds
and has been named one of the top restructuring consultants in the
country.
Michael DuFrayne is a seasoned restructuring professional with more
than 35 years of financial management and business advisory
experience serving debtors, creditors' committees, banks, funds,
trustees and other parties of interest. He has led the successful
operational and/or financial restructuring of hundreds of companies
facing challenging or complex situations with his unique hands-on
approach. His assignments have included out-of-court
restructurings and liquidations, Chapter 11 and Chapter 15
proceedings with public and privately held companies of all sizes,
post confirmation litigation and/or liquidation trustee, and as an
advisor to trustees and receivers.
"We are excited to have Rob, Mike, and their team join our growing
Philadelphia practice," said EisnerAmper Philadelphia Region
Partner-in-Charge Lori Reiner. "Their experience and reputation
for providing high quality bankruptcy and turnaround services match
well with our existing group, and they will be an invaluable
resource to our clients."
About EisnerAmper
EisnerAmper LLP is an accounting and business advisory services
firm and among the largest in the United States. EisnerAmper
provides audit, accounting, and tax services, as well as corporate
finance, internal audit and risk management, litigation consulting
and forensic accounting, information technology, and other
professional services to a broad range of clients, including
services to more than 200 public companies. The firm features 180
partners and principals and approximately 1,200 professionals.
[^] BOOK REVIEW: The Financial Giants In United States History
--------------------------------------------------------------
Author: Meade Minnigerode
Publisher: Beard Books
Softcover: 260 pages
List Price: $34.95
Order your personal copy today at http://is.gd/tJWvs2
The financial giants were Stephen Girard, John Jacob Astor, Jay
Cooke, Daniel Drew, Cornelius Vanderbilt, Jay Gould, and Jim Fisk.
The accomplishments of some have made them household names today.
But all were active in the mid 1800s. This was a time when the
United States, having freed itself from Great Britain only a few
decades earlier, was gaining its stride as an independent nation.
The country was expanding westward, starting to engage in
significant international trade, and laying the foundations for
becoming a major industrial power. Astor, Vanderbilt, Gould, and
the others played major parts in all these areas. During the Civil
War in the first half of the 1860s, some became leading suppliers
of goods or financiers to the Federal government.
Minnigerode's focus is the highlights of the life of each of the
seven. Along with this, he identifies each one's prime
characteristics contributing to his road to fortune and how his
life turned out in the end. Not all of the men managed to keep and
pass on the fortunes they amassed. They are seen a "financial
giants" not only because they made fortunes in the early days of
American business and industry, but also for their place in laying
out the groundwork for American business enterprise, innovation,
and leadership, and for the notoriety they had in their day.
Minnigerode summarizes the style or achievement of each man in a
single word or short phrase. Stephan Girard is "The Merchant
Banker"; Cornelius Vanderbilt, "The Commodore." "The Old Man of
the Street" summarizes Daniel Drew"; with "The Wizard of Wall
Street" summarizing Jay Gould. Jim Fisk is "The Mountebank."
Jay Cooke, "The Tycoon," was to be "known throughout the country
for his astonishingly successful handling of the great Federal
loans which financed the Civil War." After the War, one of the
leaders of the Confederacy remarked that the South was really
defeated in the Federal Treasury Department thus, even on the
enemy side, giving recognition to Cooke's invaluable work of
enabling the Federal government to meet the huge costs of the War.
After the War, having earned the reputation as "the foremost
financier in the country," Cooke became involved in many large
financial ventures, including the building of a railroad to link
the East and West coasts of America. In this railroad venture,
however, Cooke and his banking firm made a fatal misstep in
investing in the Northern Pacific railway. The Northern Pacific
turned out to be a house of cards. When Cooke's firm was unable to
meet interest payments it owed because of money it had put into
the Northern Pacific, the firm went bankrupt; and this caused
alarm in the stock market and financial circles.
The roads to wealth of the "financial giants" were not smooth.
Like others amassing great wealth, they had to take risks. The
tales Minnigerode tells are not only instructive on how
individuals have historically made fortunes in business and the
characteristics they had for this, but are also cautionary tales
on the contingency of great wealth in some circumstances. Jim
Fisk, for instance, a larger-than life character "jovial and quick
witted [who was also] a swindler and a bandit, a destroyer of law
and an apostle of fraud," was presumably killed by a former
business partner. Unlike Cooke and Fisk, Cornelius Vanderbilt and
John Jacob Astor built fortunes that lasted generations.
Vanderbilt - nicknamed Commodore - starting in the New York City
area, built ships and established domestic and international
merchant and passenger lines. With the government coming to depend
on these with the rapid growth of commerce of the period and the
Civil War for a time, Vanderbilt practically had monopolistic
control of private shipping in the U.S. Astor made his fortune by
developing trade and other business in the upper Midwest, which
was at the time the sparsely-populated frontier of America, rich
in natural resources and other potential with the Great Lakes and
regional rivers as a means for transportation.
Although the social and business conditions in the early and mid
1800s when the U.S. was in the early stages of its development
were unique to that period, by concentrating on the
characteristics, personalities, strategies, and activities of the
seven outstanding businessmen of this period, Minnigerode
highlights business traits and acumen that are timeless. His
sharply-focused, short biographies are colorful and memorable.
This author has written many other books and worked in the
military and government.
*********
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
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The TCR subscription rate is $975 for 6 months delivered via
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are $25 each. For subscription information, contact Peter A.
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*** End of Transmission ***