/raid1/www/Hosts/bankrupt/TCR_Public/161103.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Thursday, November 3, 2016, Vol. 20, No. 307
Headlines
261 EAST 78 LOFTS: Seeks to Hire Goldberg Weprin as Legal Counsel
4099 HIGHWAY: Voluntary Chapter 11 Case Summary
500 NORTH AVENUE: Court Allows Cash Collateral Use Until Jan. 31
ALEXIS DUPREY COLON: Banco Popular Asks for Plan Documents
ASHLEY II: Seeks to Hire Colliers as Real Estate Advisor
ATINUM MIDCON: Sandridge Energy Defends Bid for Drilling Portfolio
ATLANTIC CITY MUA: S&P Puts B- Bonds Rating on CreditWatch Dev.
BAHIA SALINAS: Seeks to Hire Jane Whitaker as Special Counsel
BARTELLO PROPERTIES: Case Summary & 20 Top Unsecured Creditors
BERNARD L. MADOFF: Chais Deal Brings Recoveries to $11.4 Billion
BERNARD L. MADOFF: S. Chais Estate to Return $277M to Investors
BUILDERS MECHANICAL: Hires Coplen & Banks as Bankruptcy Counsel
CARDTRONICS INC: Moody's Confirms Ba2 CFR; Outlook Stable
CENTURYLINK INC: Moody's Puts Ba2 CFR on Review for Downgrade
CENTURYLINK INC: S&P Affirms 'BB' CCR; Outlook Stable
CH KIM: Adequate Protection Payments to ReadyCap Lending Ordered
CHENG & COMPANY: MR 619's Bid for Summary Judgment Partly Granted
CIRCLE Z: Seeks to Employ Michael E. Gazette as Counsel
COMMUNITY HEALTH: S&P Affirms 'B' CCR & Revises Outlook to Neg.
COMPASSION IN HEALTHCARE: U.S. Trustee Unable to Appoint Committee
CONSTELLATION BRANDS: Moody's Assigns B2 CFR; Outlook Stable
COSI INC: Court Approves Nov. 28 Bid Deadline, Nov. 30 Auction
CSSH INC: Hires George Jacobs as Attorney
CTI BIOPHARMA: Had $33.2M Net Financial Standing as of Sept. 30
DALE PROPERTIES: Hires Lapp Libra as Attorneys
DALLAS PROTON: Amended Consolidated Plan of Liquidation Confirmed
DAVE 60 NYC: Hires Robinson Brog as Counsel
DAVID GOODRICH: Voluntary Chapter 11 Case Summary
DAVID IRVING PROCTOR: 2nd Modification to Plan Sent for Voting
DELIVERY AGENT: Seeks to Pay To Execs Up to $3M in Bonuses
DIAMOND TANK: Reorganization Plan Set for Dec. 5 Confirmation
DIRECTBUY HOLDINGS: Case Summary & 40 Largest Unsecured Creditors
DIRECTBUY HOLDINGS: Files for Ch. 11 Bankruptcy to Pursue Sale
DIVERSE ENERGY: Lean Tech Plan Set for Dec. 7 Confirmation
DIVERSE ENERGY: Rouly Plan Set for Dec. 7 Confirmation
ENVIGO HOLDINGS: S&P Assigns 'B-' CCR & Rates Revolver Debt 'B+'
ENVIGO LABORATORIES: Moody's Assigns Caa1 CFR; Outlook Stable
EPICENTER PARTNERS: Unsecureds to Get 100%, Plus 5% Interest
ESPLANADE HL: Hires Goldstein & McClintock as Counsel
ETERNAL ENTERPRISE: Can Use Cash Collateral to Repair Boiler
EURO BOUTIQUE: Hires BBA Braulio as Accountant
EURO BOUTIQUE: Taps Hatillo Law as Counsel
EXTREME PLASTICS: Blue Wolf Named Stalking Horse Bidder for Assets
FRAC SPECIALISTS: SSG Acted Co-Investment Banker in Asset Sale
FRESH & EASY: Bid to Compel Arbitration in "Chan" Denied
FUNCTION(X) INC: Borrows Additional $255,000 from Sillerman
FUSION TELECOMMUNICATIONS: Stockholders Elect Eight Directors
GARDA WORLD: Moody's Affirms B2 CFR; Outlook Remains Stable
GARDA WORLD: S&P Affirms 'B' Rating on 1st-Lien Debt
GARDEN OF EDEN: Panel Hires Sullivan & Worcester as Counsel
GATEWAY ENTERTAINMENT: Hires Robert O Lampl as Attorneys
GIBRALTAR -- CHURCH: Case Summary & Unsecured Creditor
GOLFSMITH INT'L: Hires Pope Shamsie as Tax Accountants
HEAVENLY VISION: Seeks to Hire Misrok Law Firm as Special Counsel
HEBREW HEALTH: EisnerAmper's Fee Cap Increased to $100,000
HELLBENDER BREWING: Voluntary Chapter 11 Case Summary
HOUSTON PROPERTY: Peachtree Investments Opposes Cash Use
I.K.E. ELECTRICAL: Hires Gerald Onorata as Special Counsel
IDERA INC: S&P Assigns 'B' Rating on 1st Lien Term & Revolver Loans
IRENE STACY COMMUNITY: Selling Butler Property for $175,000
ITT EDUCATIONAL: Cerberus to Lend $6M for Sale Effort
JAMESTOWN, NY: Moody's Lowers GOLT Rating to Ba1; Outlook Negative
JPS COMPLETION: Selling Equipment and Tools
KAISER GYPSUM: Asbestos PI Claimants Hire Caplin as Counsel
KAISER GYPSUM: Hires PricewaterhouseCoopers as Financial Advisor
KAISER GYPSUM: Hires PricewaterhouseCoopers as Financial Advisor
KAISER GYPSUM: Seeks to Employ Rayburn Cooper as Co-Counsel
KIRK'S FRAMING: U.S. Trustee Unable to Appoint Committee
KIRWAN OFFICES: Shareholder Asks Court to Extend Exclusive Periods
KISSNER HOLDINGS: Moody's Assigns B3 CFR; Outlook Positive
KISSNER HOLDINGS: S&P Assigns 'B' CCR & Rates US$400MM Notes 'B'
L&R DEVELOPMENT: Case Summary & 20 Largest Unsecured Creditors
LEHMAN BROTHERS: Nov. 30 Supplemental Administrative Bar Date Set
LENEXA HOTEL: Case Summary & 20 Largest Unsecured Creditors
LEVEL 3 COMMUNICATIONS: Moody's Affirms Ba3 CFR; Outlook Stable
LEVEL 3 COMMUNICATIONS: S&P Affirms 'BB' CCR; Outlook Stable
LIFE PARTNERS: Bankruptcy Court Confirms Reorganization Plan
LYONDELL CHEMICAL: Court Upholds Reinstatement of Claw Back Suit
MACBETH DESIGNS: Case Summary & 20 Largest Unsecured Creditors
MAX EXPRESS: Seeks Plan Filing Extension Through Jan. 31
MBTI OF PUERTO RICO: Taps Carrasquillo as Financial Consultant
MISSION NEW ENERGY: Incurs A$2.3 Million Net Loss in Fiscal 2016
MLRG INC: Seeks to Hire Lewis Law Group as Legal Counsel
MURRAY ENERGY: S&P Assigns 'B-' Rating on New $175MM Term Loan B-3
NET ELEMENT: Settles Acquisition Agreement Dispute with Maglenta
NEVADA GAMING: Seeks to Hire Bach Law Firm as Conflicts Counsel
NEVADA GAMING: Seeks to Hire Fox Rothschild as Legal Counsel
NEVADA GAMING: Seeks to Hire Henry & Horne as Financial Advisor
NEVADA GAMING: Seeks to Hire Moran Brandon as Special Counsel
NEW CAL-NEVA: Committee Seeks to Hire Pachulski as Legal Counsel
NEW ENGLAND COMPOUNDING: 66 Cases in MDL No. 2419 Remanded
NEW MILLENNIUM: S&P Lowers CCR to 'CCC+'; Outlook Negative
NOVABAY PHARMACEUTICALS: Regains Compliance with NYSE Requirements
OAK ROCK: Committee's Omnibus Motion in Limine Partially Granted
OLIVE BRANCH: Applies to Employ Dahar as Attorney
OPELOUSAS GENERAL: S&P Lowers Rating on 2003 Hospital Bonds to BB+
PAULA SUE WENSTROM: Disclosures Okayed; Plan Hearing Nov. 28
PERFORMANCE SPORTS: Has Asset Purchase Pact with 9938982 Canada
PERFORMANCE SPORTS: Moody's Lowers PDR to D-PD on Chap. 11 Filing
PETROQUEST ENERGY: Reports $23.3 Million Net Loss in Third Quarter
PICO HOLDINGS: RPN Says Hart, Bogue in Suspicious Real Estate Deal
PIONEER HEALTH: Selling Oneida Assets to Rennova for $600,000
PIONEER ROOFING: Seeks to Hire Doug Phelps as Business Consultant
PLASTIC2OIL INC: Grants CFO 5.2 Million Stock Option Awards
PLATINUM PARTNERS: Judge Freezes Assets Amid Plunder Allegations
POST EAST: May Use Connect REO's Cash Until Dec. 31
POSTROCK ENERGY: Trustee Taps Digital Nail to Sell Equipment
POSTROCK ENERGY: Trustee Taps K.E. Andrews to Pursue Refund Claims
PRECISION DRILLING: Moody's Rates New $350MM Unsecured Notes B3
PRECISION DRILLING: S&P Assigns 'BB' Rating on $350MM Unsec. Notes
PRO RESOURCES I: Seeks to Hire Cavazos Hendricks as Legal Counsel
QUOTIENT LIMITED: Reports Q2 Fiscal 2017 Financial Results
QUOTIENT LIMITED: Stockholders Elect Eight Directors
RADIAL HOLDINGS: Moody's Affirms B3 CFR & Changes Outlook to Neg.
REGIS GALERIE: Seeks to Hire Arnstein & Lehr as Legal Counsel
REGIS GALERIE: Seeks to Hire Marquis Aurbach as Local Counsel
RICHARD SCHRAGGER: Selling New York Property to Liu for $775,000
ROCKY MOUNTAIN ACADEMY: S&P Lowers 2010 School Bonds Rating to BB+
ROJESIE INC: Proposes Justiniano Law Offices as Counsel
ROJO ONE: Seeks Court Authorization to Use Cash Collateral
SAILING EMPORIUM: Case Summary & 20 Largest Unsecured Creditors
SBM DEEP: DBRS Confirms BB(high) Rating on 2021 3.5% Secured Notes
SERVICEMASTER CO: S&P Assigns 'BB-' Rating on $1BB Sr. Unsec. Notes
SERVICEMASTER COMPANY: Moody's Rates New Unsec. Notes Due 2024 'B1'
SHEEHAN PIPE LINE: Objections Resolved; Plan Hearing Dec. 6
SIGNAL BAY: Acquires Assets of Green Style Consulting
SIGNAL BAY: Names Catherine Emond as EVIO General Manager
SOUTHERN STATES: Moody's Lowers CFR to Caa1; Outlook Negative
SPRING MEADOW: Case Summary & Unsecured Creditor
ST. VINCENT HOSPITAL: Moody's Affirms Ba2 Rating on Debt
SUNEDISON INC: Canadian Unit Files for Bankruptcy Protection
SUPERIOR LINEN: Committee Taps Morris Polich as Legal Counsel
SUPERIOR LINEN: Seeks to Hire Larson & Zirzow as Legal Counsel
TEAM HEALTH: Moody's Puts Ba3 CFR Under Review for Downgrade
TENET HEALTHCARE: Incurs $8 Million Net Loss in Third Quarter
TOMS SHOES: S&P Affirms 'B-' CCR; Outlook Stable
ULTIMATE AVT: Seeks to Hire Eric A. Liepins as Legal Counsel
UNISYS CORP: S&P Lowers CCR to 'B'; Outlook Negative
UTE LAKE RANCH: Trustee Hires Kaplan & Associates as Accountant
UWAGBOE O. ORU-LAWRENCE: CSNDC Can Purchase Properties, Judge Rules
WAFERGEN BIO-SYSTEMS: Reports Third Quarter Financial Results
WESTERN AUTO: Wants Authorization to Use Cash Collateral
YELLOWSTONE CLUB: Court Dismisses Founder's Suit vs. Byrne, et al.
[*] Milbank Partners Author 2nd Ed. LSTA's Credit Agreement Guide
[^] Recent Small-Dollar & Individual Chapter 11 Filings
*********
261 EAST 78 LOFTS: Seeks to Hire Goldberg Weprin as Legal Counsel
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261 East 78 Lofts LLC seeks approval from the U.S. Bankruptcy Court
for the Southern District of New York to hire legal counsel in
connection with its Chapter 11 case.
The Debtor proposes to hire Goldberg Weprin Finkel Goldstein LLP to
give legal advice regarding its duties under the Bankruptcy Code,
prepare a bankruptcy plan, and assist the Debtor in the sale of its
office building in Manhattan.
The firm's professionals and their hourly rates are:
Partners $495
Associates $250 - $425
Paralegals $90 - $120
Kevin Nash, Esq., disclosed in a court filing that his firm is
"disinterested" as defined in section 101(14) of the Bankruptcy
Code.
The firm can be reached through:
Kevin J. Nash, Esq.
Goldberg Weprin Finkel Goldstein LLP
1501 Broadway, 22nd Floor
New York, NY 10036
Phone: (212) 221-5700
About 261 East 78 Lofts
261 East 78 Lofts LLC owns a six-story medical office building at
261 East 78th Street, New York.
261 East 78 Lofts LLC sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. S.D.N.Y. Case No. 16-11644) on June 3,
2016. The petition was signed by Lee Moncho, manager.
The case is assigned to Judge Sean H. Lane.
At the time of the filing, the Debtor disclosed $20.05 million in
assets and $13.96 million in liabilities.
The Debtor tapped Goldberg Weprin Finkel Goldstein LLP as
bankruptcy counsel. The Debtor also engaged Eastern Consolidated
as broker in connection with the sale of the Debtor's property.
4099 HIGHWAY: Voluntary Chapter 11 Case Summary
-----------------------------------------------
Debtor: 4099 Highway 36 North, LLC
P.O. Box 786
Bellville, TX 77418
Case No.: 16-35555
Chapter 11 Petition Date: November 1, 2016
Court: United States Bankruptcy Court
Southern District of Texas (Houston)
Judge: Hon. Jeff Bohm
Debtor's Counsel: Margaret Maxwell McClure, Esq.
LAW OFFICE OF MARGARET M. MCCLURE
909 Fannin, Suite 3810
Houston, TX 77010
Tel: 713-659-1333
Fax: 713-658-0334
E-mail: margaret@mmmcclurelaw.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Alwin G. Morgan, managing member.
The Debtor did not include a list of its largest unsecured
creditors when it filed the petition.
500 NORTH AVENUE: Court Allows Cash Collateral Use Until Jan. 31
----------------------------------------------------------------
Judge Ann M. Nevins of the U.S. Bankruptcy Court for the District
of Connecticut authorized 500 North Avenue, LLC to use the cash
collateral of Manual Moutinho, Trustee for Mark IV Construction Co
Inc. 401(k) Savings Plan, on an interim basis, from November 1,
2016 through January 31, 2017.
Mr. Moutinho alleges a first and second priority secured claim
against certain real property owned by the Debtor located at
1794-1796 Barnum Avenue, Bridgeport, Connecticut, including the
rents arising therefrom.
Judge Nevins acknowledged that the use of cash collateral on an
interim basis pending a final hearing is necessary to prevent
immediate and irreparable harm to the Debtor's estate in that
without authorization to use cash collateral, the Debtor's ability
to sustain its operations and meet its necessary and integral
business obligations will be impossible.
The approved Budget covers the months of November 2016 and December
2016. The Budget provides for total expenses in the amount of
$22,916.
Mr. Moutinho was granted replacement and/or substitute liens in
post-petition collateral, which will have the same validity,
extent, and priority that Mr. Mountinho possessed as to the same
liens on the Petition Date.
A further hearing on the Debtor's use of cash collateral is
scheduled for January 25, 2017 at 11:00 a.m.
A full-text copy of the Order, dated October 28, 2016, is available
at http://bankrupt.com/misc/500NorthAvenue2014_1431094_299.pdf
About 500 North Avenue, LLC.
500 North Avenue, LLC and Long Brook Stattion, LLC filed chapter 11
petitions (Bankr. D. Conn. Case Nos. 14-31094 and 14-31095) on June
6, 2014. The petitions were signed by Joseph Regensburger, member.
The Debtors are represented by Douglas S. Skalka, Esq., at Neubert,
Pepe, and Monteith, P.C. The case is assigned to Judge Julie A.
Manning.
500 North Avenue, LLC estimated assets at $1 million to $10 million
and liabilities at $10 million to $50 million at the time of the
filing. Long Brook Station, LLC estimated assets at $500,000 to $1
million and liabilities at $1 million to $10 million at the time of
the filing.
ALEXIS DUPREY COLON: Banco Popular Asks for Plan Documents
----------------------------------------------------------
Judge Enrique S. Lamoutte on Oct. 21, 2016, granted a motion by
Banco Popular De Puerto Rico requesting to be served with a copy of
the disclosure statement and plan pursuant to Fed. R. Bankr. P.
3017 that was filed by debtors Alexis Duprey Colon and Sonja A
Alvarez Nazario.
Alexis Duprey Colon and Sonja A Alvarez Nazario filed a Chapter 11
petition (Bankr. D.P.R. Case No. 16-05086) on June 28, 2016. The
Debtor tapped Wanda I. Luna Martinez, Esq., as counsel.
ASHLEY II: Seeks to Hire Colliers as Real Estate Advisor
--------------------------------------------------------
Ashley II of Charleston, LLC seeks approval from the U.S.
Bankruptcy Court for the District of South Carolina to hire a real
estate advisor.
The Debtor proposes to hire Colliers International Charleston LLC
in connection with the proposed sale of the Columbian Nitrogen
Tract.
The firm will be paid a "success fee" of 4% of the gross dale
proceeds and will receive reimbursement for work-related expenses.
J. Hagood Morrison, a member of Colliers, disclosed in a court
filing that his firm is a "disinterested person" as defined in
section 101(14) of the Bankruptcy Code.
The firm can be reached through:
J. Hagood Morrison
Colliers International Charleston LLC
25 Calhoun Street, Suite 220
Charleston, SC 29401
Tel: +1 843-723-1202
About Ashley I and Ashley II
Ashley I, LLC, and Ashley II of Charleston, LLC, sought protection
under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy
Court for the District of South Carolina (Charleston) (Lead Case
No. 16-00559) on Feb. 8, 2016. The petitions were signed by
Prodel, LLC manager.
The Debtors are represented by G. William McCarthy, Jr., Esq.,
William Harrison Penn, Esq., and Daniel J. Reynolds, Jr., Esq., at
McCarthy, Reynolds & Penn, LLC.
At the time of the filing, Ashley I disclosed total assets of $5.17
million and total debts of $18.71 million.
The Office of the U.S. Trustee disclosed in a court filing that no
official committee of unsecured creditors has been appointed in
the Chapter 11 case of Ashley II of Charleston, LLC.
ATINUM MIDCON: Sandridge Energy Defends Bid for Drilling Portfolio
------------------------------------------------------------------
Katy Stech, writing for The Wall Street Journal Pro Bankruptcy,
reported that SandRidge Energy Inc. defended its move to purchase
Atinum Midcon I LLC's oil and gas drilling investments out of
bankruptcy, urging a federal judge to disregard protest from Wells
Fargo Bank N.A. officials who said the bank's proposal to forgive
$75 million is a better offer.
According to the report, in court papers, SandRidge lawyers said
the offer from Wells Fargo, which handles Atinum's loan of more
than $265 million, wasn't valid because it covered only a subset of
Atinum's roughly 1,600 oil and gas wells in northern Oklahoma and
southern Kansas.
Under its offer, Wells Fargo offered to forgive $75 million in debt
owed by Atinum, a Houston energy investor, the report related.
SandRidge's bid is valued about $67 million, made up of $47 million
in cash and about $19 million in forgiven debt, the report further
related.
Wells Fargo officials earlier argued that lawyers who put Atinum
into bankruptcy in U.S. Bankruptcy Court in Houston on July 22
wrongly declared SandRidge's offer as superior, the report said.
They argued in court filings that Atinum officials were motivated
to placate SandRidge and sell the company's portfolio quickly for
insurance reasons: Equity owners could get roughly $240 million on
account of their lost investment if the case is converted to
chapter 7 before the end of 2016, the report added.
About Atinum MidCon I
Headquartered in Houston, Texas, Atinum MidCon I, LLC, owns
non-operated working interests in oil and gas wells and properties
located in Kansas and Oklahoma.
The Debtor filed for Chapter 11 bankruptcy protection (Bankr. S.D.
Tex. Case No. 16-33645) on July 22, 2016, estimating its assets
between $100 million and $500 million and its debts at between
$100
million and $500 million. The petition was signed by Robert E.
Ogle, chief restructuring officer.
Judge Marvin Isgur presides over the case.
Timothy Alvin Davidson, II, Esq., at Andrews Kurth LLP serves as
the Debtor's counsel.
Claro Group LLC is the Debtor's financial advisor. PLS. INC. is
the
Debtor's sales agent. BDO USA, LLP serves as tax service provider.
Judy A. Robbins, the U.S. Trustee for the Southern District of
Texas, informs the Bankruptcy Court that he is unable to appoint
members to the Official Committee of Unsecured Creditors in the
Chapter 11 case of Atinum MidCon I, LLC.
The U.S. Trustee has not solicited committee of unsecured
creditors
as there are not three eligible unsecured creditors.
About SandRidge Energy, Inc.
SandRidge Energy, Inc. -- http://www.sandridgeenergy.com/-- is an
oil and natural gas exploration and production company
headquartered in Oklahoma City, Oklahoma, with its principal focus
on developing high-return, growth-oriented projects in the U.S.
Mid-Continent and Niobrara Shale.
SandRidge Energy, Inc. and 24 of its subsidiaries each filed a
voluntary petition under Chapter 11 of the Bankruptcy Code (Bankr.
S.D. Tex. Lead Case No. 16-32488) on May 16, 2016. The petitions
were signed by Julian M. Bott as chief financial officer.
The Debtors have hired Kirkland & Ellis LLP as general bankruptcy
counsel, Zack A. Clement PLLC as local counsel, Houlihan Lokey
Capital, Inc. as financial advisor, Alvarez & Marsal Holdings, LLC
as restructuring advisor and Prime Clerk LLC as claims and
noticing
agent.
The cases are assigned to Judge David R Jones.
The Office of the U.S. Trustee has appointed five creditors of
SandRidge Energy, Inc., to serve on the official committee of
unsecured creditors. The Official Committee is represented by
Charles R. Gibbs, Esq., Daniel H. Golden, Esq., Abid Qureshi,
Esq.,
and Brad M. Kahn, Esq., at Akin Gump Strauss Hauer & Feld LLP.
An Ad Hoc Committee of Shareholders is represented by Susan C.
Mathews, Esq., Lori Ann Hood, Esq., and Sunil "Neil" Gupta, Esq.,
at Baker, Donelson, Bearman, Caldwell & Berkowitz.
Counsel to the First Lien Credit Agreement Agent are Andrew V.
Tenzer, Esq., Leslie A. Plaskon, Esq., and Michael Comerford,
Esq.,
at Paul Hastings LLP.
Counsel to the Ad Hoc Group of Consenting Unsecured Creditors are
Joseph H. Smolinsky, Esq., and Daniel N. Griffiths, Esq., at Weil
Gotshal & Manges LLP.
Counsel to the Ad Hoc Group of Consenting Second Lien Creditors
are
Damian S. Schaible, Esq., and Eli V. Vonnegut, Esq., at Davis Polk
& Wardwell, LLP.
* * *
SandRidge Energy on Oct. 4, 2016, disclosed that it has emerged
from Chapter 11, having satisfied all the necessary provisions of
its Plan of Reorganization. SandRidge also received approval to
relist on the New York Stock Exchange in conjunction with its
emergence and resumed trading of newly issued common stock on
October 4, 2016, under the ticker symbol "SD".
The Bankruptcy Court on Sept. 9, 2016, entered an order confirming
the Joint Chapter 11 Plan of Reorganization, which will eliminate
$3.7 billion in pre-petition funded indebtedness.
SandRidge Energy, Inc., on Oct. 4, 2016, disclosed that it has
emerged from Chapter 11, having satisfied all the necessary
provisions of its Plan of Reorganization (the "Plan"). SandRidge
received approval to relist on the New York Stock Exchange in
conjunction with its emergence and resumed trading of newly issued
common stock on October 4, 2016, under the ticker symbol "SD".
ATLANTIC CITY MUA: S&P Puts B- Bonds Rating on CreditWatch Dev.
---------------------------------------------------------------
S&P Global Ratings has placed its 'B-' rating on Atlantic City
Municipal Utilities Authority (ACMUA), N.J.'s water system revenue
bonds on CreditWatch with developing implications.
The 'B-' rating primarily reflects S&P's opinion that ACMUA's
ability to support its financial obligations could be severely
weakened depending on the structure and security on water revenue
bonds recently authorized by ACMUA for the purchase of Bader Field,
a city-owned airport, from Atlantic City.
"The CreditWatch Developing status is due to uncertainty regarding
how additional debt will be structured," said S&P Global Ratings
credit analyst Scott Garrigan It is unclear from publically
available documents what the security on the bonds is likely to be,
except for the fact that the ACMUA's bond resolution passed on Oct.
19, 2016, authorizes series 2017 water system revenue bonds to
"acquire from the City of Atlantic City all or portions of Bader
Field."
Another source of uncertainty regarding creditworthiness is S&P's
view that it appears these water system bonds are being issued for
a non-core purpose, which could greatly change operating risk.
According to the ACMUA's website, the goal of ACMUA is to "produce
the highest quality drinking water for all its customers." The
city's recently released recovery plan indicates that it has slated
Bader Field for general redevelopment and recreational uses.
As S&P receives additional information on the security and
structure of the authorized bonds and the Bader Field purchase, our
view of the rating could become either more negative or positive
depending on the specific circumstances.
The authority is the sole provider of potable water within the
city's service area except for a limited number of users who obtain
their water from privately owned wells.
Net revenues of the authority's water system secure the bonds.
BAHIA SALINAS: Seeks to Hire Jane Whitaker as Special Counsel
-------------------------------------------------------------
Bahia Salinas Beach Hotel Inc. seeks approval from the U.S.
Bankruptcy Court for the District of Puerto Rico to hire special
counsel to represent the company in adversary proceedings.
Bahia Salinas proposes to hire Jane Becker Whitaker, Esq., and pay
her an hourly rate of $300 for her services.
In a court filing, Ms. Whitaker disclosed that she is a
"disinterested person" as defined in section 101(14) of the
Bankruptcy Code.
Ms. Whitaker maintains an office at:
Jane Becker Whitaker, Esq.
P.O. Box 9023914
San Juan, PR 00902
Tel: (787) 754-9191
Fax: (787) 764-3101
Email: janebeckerwhitaker@yahoo.com
About Bahia Salinas Beach Hotel
Bahia Salinas Beach Hotel Inc. sought protection under Chapter 11
of the Bankruptcy Code (Bankr. D.P.R. Case No. 16-07573) on
September 22, 2016. The petition was signed by Angel Lopez Nunci,
president.
The Debtor is represented by Maria Soledad Lozada Figueroa, Esq.,
at Lozada Law & Associates, LLC.
At the time of the filing, the Debtor estimated assets of less
than $1 million and liabilities of $1 million to $10 million.
BARTELLO PROPERTIES: Case Summary & 20 Top Unsecured Creditors
--------------------------------------------------------------
Debtor: Bartello Properties, LLC
4558 W. Hacienda
Las Vegas, NV 89118
Case No.: 16-15861
Nature of Business: Single Asset Real Estate
Chapter 11 Petition Date: November 1, 2016
Court: United States Bankruptcy Court
District of Nevada (Las Vegas)
Judge: Hon. Bruce T. Beesley
Debtor's Counsel: David Mincin, Esq.
MINCIN LAW, PLLC
528 S. Casino Center, #325
Las Vegas, NV 89101
Tel: (702) 589-9881
Fax: (702) 589 9882
E-mail: dmincin@mincinlaw.com
Total Assets: $1.70 million
Total Liabilities: $884,437
The petition was signed by Vincent Bartello, manager.
The Debtor did not include a list of its unsecured creditors when
it filed the petition.
A full-text copy of the petition is available for free at:
http://bankrupt.com/misc/nvb16-15861.pdf
BERNARD L. MADOFF: Chais Deal Brings Recoveries to $11.4 Billion
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Irving H. Picard, Securities Investor Protection Act (SIPA) Trustee
for the liquidation of Bernard L. Madoff Investment Securities LLC
(BLMIS), on Oct. 28, 2016, filed a motion in the United States
Bankruptcy Court for the Southern District of New York seeking the
Court's approval of a global settlement with the defendants in
Picard v. the Estate of Stanley Chais, et al. The motion also
seeks Court approval for the creation of a California Restitution
Fund, which is the result of the efforts of California Attorney
General Kamala D. Harris, and the settlement of private California
state court litigation against the Chais-related Defendants.
The settlement agreement will ultimately deliver a benefit of more
than $277 million to the victims of the Madoff Ponzi scheme. The
agreement was made with the Stanley Chais estate, Chais's widow,
and a number of Chais family members, investment funds, trusts,
companies, and other entities associated with Chais. The approval
hearing for this agreement has been set for Nov. 22, 2016 at 10:00
a.m.
Under the terms of the agreement, as soon as a final, unappealable
order is entered by the Court, the BLMIS Customer Fund will receive
a payment of at least $232 million in cash, as well as the
assignment of other non-liquid assets which will be liquidated over
time and which are valued at approximately $30.7 million.
Also under the agreement, a California State Restitution Fund that
will total approximately $15 million will be established, to be
supervised by the California Attorney General's office, for the
administration and payment of claims made by investors in certain
Chais-related partnerships related to the state.
"This outstanding outcome is the result of four years of
negotiation and mediation which addressed and resolved myriad
complex legal issues and underscores the tenacity of the teams who
continue to deliver additional recoveries for Madoff's victims,"
said Tracy Cole, a BakerHostetler partner and lead counsel on the
Chais matter. "The agreement confers a significant, immediate
benefit to the BLMIS Customer Fund, avoids lengthy, burdensome, and
expensive litigation, and represents a fair and reasonable
compromise between the SIPA Trustee and the defendants."
"The agreement . . . brings total recoveries to date to more than
$11.4 billion," said Stephen P. Harbeck, President and Chief
Executive Officer of SIPC. "The work of the SIPA Trustee and his
team continues to drive results toward our shared goal of
maximizing the return of stolen funds to eligible victims as
quickly as possible."
"These milestones are a reminder of the importance of SIPC's
support in liquidations such as BLMIS," Mr. Picard added. "All
administrative costs of the Madoff Recovery Initiative are funded
by SIPC, meaning that 100 percent of recoveries are returned to the
legitimate owners. None of the costs to right the wrongs done by
Madoff are borne by his victims."
As of Oct. 28, the SIPA Trustee has distributed approximately
$9.467 billion, which includes more than $836.6 million in
committed advances from SIPC. Once the agreement is approved by
the Bankruptcy Court and a final unappealable order entered, the
total BLMIS Customer Fund recoveries and agreements to recover will
then total approximately $11.459 billion, or more than 65 percent
of the principal estimated to have been lost by Madoff's defrauded
customers with allowed claims and those claims that are deemed
determined pending the outcome of litigation or future
settlements.
The SIPA Trustee's motion can be found on the United States
Bankruptcy Court's website at http://www.nysb.uscourts.gov/;Bankr.
S.D.N.Y., No. 08-01789 (SMB) / Adv. Pro. No. 09-01182 (SMB). In
addition, the motion – as well as further information on
recoveries to date, other legal proceedings, further settlements,
and general information – can be found on the SIPA Trustee's Web
site http://www.madofftrustee.com/
In addition to Ms. Cole, Messrs. Harbeck and Picard, and David J.
Sheehan, Chief Counsel to the SIPA Trustee, would like to thank the
Securities Investor Protection Corporation's Josephine Wang and
Kevin Bell, as well as BakerHostetler attorneys Thomas L. Long, M.
Elizabeth Howe and Lauren P. Berglin, who assisted with the work on
the global settlement agreement.
About Bernard L. Madoff
Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff
orchestrated the largest Ponzi scheme in history, with losses
topping US$50 billion. On Dec. 15, 2008, the Honorable Louis A.
Stanton of the U.S. District Court for the Southern District of
New
York granted the application of the Securities Investor Protection
Corporation for a decree adjudicating that the customers of BLMIS
are in need of the protection afforded by the Securities Investor
Protection Act of 1970. The District Court's Protective Order (i)
appointed Irving H. Picard, Esq., as trustee for the liquidation
of
BLMIS, (ii) appointed Baker & Hostetler LLP as his counsel, and
(iii) removed the SIPA Liquidation proceeding to the Bankruptcy
Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789) (Lifland, J.). Mr.
Picard has retained AlixPartners LLP as claims agent.
On April 13, 2009, former BLMIS clients filed an involuntary
Chapter 7 bankruptcy petition against Bernard Madoff (Bankr.
S.D.N.Y. 09-11893). The petitioning creditors -- Blumenthal &
Associates Florida General Partnership, Martin Rappaport
Charitable Remainder Unitrust, Martin Rappaport, Marc Cherno,
and Steven Morganstern -- assert US$64 million in claims against
Mr. Madoff based on the balances contained in the last statements
they got from BLMIS.
On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff
Securities International Limited in London under bankruptcy
protection pursuant to Chapter 15 of the U.S. Bankruptcy Code
(Bankr. S.D. Fla. 09-16751). The Chapter 15 case was later
transferred to Manhattan. In June 2009, Judge Lifland approved
the
consolidation of the Madoff SIPA proceedings and the bankruptcy
case.
Judge Denny Chin of the U.S. District Court for the Southern
District of New York on June 29, 2009, sentenced Mr. Madoff to 150
years of life imprisonment for defrauding investors in United
States v. Madoff, No. 09-CR-213 (S.D.N.Y.).
From recoveries in lawsuits coupled with money advanced by SIPC,
Mr. Picard has commenced distributions to victims. As of Oct. 28,
2016, the SIPA Trustee has recovered more than $11.4 billion and
has distributed $9.467 billion, which includes more than $836.6
million in committed advances from the Securities Investor
Protection Corporation (SIPC).
BERNARD L. MADOFF: S. Chais Estate to Return $277M to Investors
---------------------------------------------------------------
Jacqueline Palank, writing for The Wall Street Journal Pro
Bankruptcy, reported that the estate of California money manager
Stanley Chais, who steered numerous investors to Bernard Madoff,
will return some $277 million to those investors under a newly
reached settlement with Irving Picard, the trustee for Mr. Madoff's
investment firm.
According to the report, the settlement will resolve the lawsuit
that Mr. Picard filed seven years ago against the late Mr. Chais,
wife Pamela and other family members for the return of more than $1
billion he said represented false profits from Mr. Madoff's fraud.
The settlement calls for $262 million, from Mr. Chais's estate as
well as "substantially all" of Mrs. Chais's assets, to be paid into
the pot of funds Mr. Picard has gathered in the liquidation to
repay Mr. Madoff's cheated investors, the report related.
The settlement calls for another $15 million to be paid into a
restitution fund for California investors to resolve separate
litigation brought by the California attorney general's office,
which called Mr. Chais a "Madoff middleman," the report further
related.
Of the $262 million that will be paid to Mr. Madoff's investors in
the liquidation proceeding, at least $232 million will be in cash.
The remaining value is expected to come from Chais assets that will
be sold over time, the report further related.
When the latest settlement is approved by the court, it will mean
Mr. Picard has recovered more than $11 billion of stolen funds, the
report said. Much of that has already been returned to Mr.
Madoff's investors, the report added.
The U.S. Bankruptcy Court in Manhattan will hold a hearing on Nov.
22, 2016 to review the settlement.
About Bernard L. Madoff
Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff
orchestrated the largest Ponzi scheme in history, with losses
topping US$50 billion. On Dec. 15, 2008, the Honorable Louis A.
Stanton of the U.S. District Court for the Southern District of
New
York granted the application of the Securities Investor Protection
Corporation for a decree adjudicating that the customers of BLMIS
are in need of the protection afforded by the Securities Investor
Protection Act of 1970. The District Court's Protective Order (i)
appointed Irving H. Picard, Esq., as trustee for the liquidation
of
BLMIS, (ii) appointed Baker & Hostetler LLP as his counsel, and
(iii) removed the SIPA Liquidation proceeding to the Bankruptcy
Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789) (Lifland, J.). Mr.
Picard has retained AlixPartners LLP as claims agent.
On April 13, 2009, former BLMIS clients filed an involuntary
Chapter 7 bankruptcy petition against Bernard Madoff (Bankr.
S.D.N.Y. 09-11893). The petitioning creditors -- Blumenthal &
Associates Florida General Partnership, Martin Rappaport
Charitable Remainder Unitrust, Martin Rappaport, Marc Cherno,
and Steven Morganstern -- assert US$64 million in claims against
Mr. Madoff based on the balances contained in the last statements
they got from BLMIS.
On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff
Securities International Limited in London under bankruptcy
protection pursuant to Chapter 15 of the U.S. Bankruptcy Code
(Bankr. S.D. Fla. 09-16751). The Chapter 15 case was later
transferred to Manhattan. In June 2009, Judge Lifland approved
the
consolidation of the Madoff SIPA proceedings and the bankruptcy
case.
Judge Denny Chin of the U.S. District Court for the Southern
District of New York on June 29, 2009, sentenced Mr. Madoff to 150
years of life imprisonment for defrauding investors in United
States v. Madoff, No. 09-CR-213 (S.D.N.Y.).
From recoveries in lawsuits coupled with money advanced by SIPC,
Mr. Picard has commenced distributions to victims. As of Oct. 28,
2016, the SIPA Trustee has recovered more than $11.4 billion and
has distributed $9.467 billion, which includes more than $836.6
million in committed advances from the Securities Investor
Protection Corporation (SIPC).
BUILDERS MECHANICAL: Hires Coplen & Banks as Bankruptcy Counsel
---------------------------------------------------------------
Builders Mechanical, Inc., seeks authority from the U.S. Bankruptcy
Court for the Southern District of Texas to employ Coplen & Banks,
PC as bankruptcy counsel to the Debtor.
Builders Mechanical requires Coplen & Banks to:
a. advise the Debtor with respect to its powers and duties;
b. advise the Debtor with respect to the rights and remedies
of the Estate's creditors and other Parties in interest;
c. conduct appropriate examinations of witnesses, claimants
and other Parties in interest;
d. prepare all appropriate pleadings and other legal
instruments required to be filed in this case;
e. represent the Debtor in all proceedings before the Court
and in any other judicial or administrative proceeding in
which the rights of the Debtor or the Estate may be
affected;
f. represent and advise the Debtor in the liquidation of its
assets through the bankruptcy court;
g. advise the Debtor in connection with the formulation,
solicitation, confirmation and consummation of any plan of
reorganization which the Debtor may propose; and
h. perform any other legal services that may be appropriate in
connection with the continued operations of the Debtor's
businesses.
Coplen & Banks will be paid at these hourly rates:
Akards $300
Associates $150-$350
Coplen & Banks will also be reimbursed for reasonable out-of-pocket
expenses incurred.
John Akard Jr., Esq., member of Coplen & Banks, PC, assured the
Court that the firm is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code and does not
represent any interest adverse to the Debtor and its estates.
Coplen & Banks can be reached at:
John Akard Jr., Esq.
Coplen & Banks
11111 McCracken Dr., Suite A
Cypress, TX 77429
Tel: (832) 237-8600
Fax: (832) 202-2088
E-mail: jakard@coplenbanks.com
About Builders Mechanical
Based in Tomball, Texas, Builders Mechanical, Inc. offers
installation, service, and maintenance for commercial and
residential heating and air conditioning services.
An involuntary petition for liquidation under Chapter 7 was filed
against Builders Mechanical (Bankr. S.D. Tex. Case No. 16-33833) on
August 1, 2016. On September 19, 2016, the involuntary petition
was approved by the Court and the Chapter 7 petition was converted
to Chapter 11 reorganization.
Bankruptcy Judge Marvin Isgur oversees the case.
The Petitioning Creditors are Lennox Industries Inc, represented by
Heather Helene Jobe, Esq. -- hjobe@bellnunnally.com -- at Bell
Nunnally & Martin, LLP; and Joshua W. Wolfshohl, Esq. --
jwolfshohl@porterhedges.com -- at Porter Hedges LLP; Standard
Supply and Distributing Co., Inc., also represented Bell Nunnally &
Martin; and Goodman Distribution, Inc., represented by Jeffrey D.
Carruth, Esq. -- jcarruth@wkpz.com -- Weycer, Kaplan, Pulaski &
Zuber, P.C.
CARDTRONICS INC: Moody's Confirms Ba2 CFR; Outlook Stable
---------------------------------------------------------
Moody's Investors Service confirmed Cardtronics, Inc.'s credit
ratings including the company's Ba2 Corporate Family Rating, Ba2-PD
Probability of Default Rating, and the Ba3 rating on Cardtronics'
$250 million senior unsecured notes. The rating action concludes
Moody's review of the company's ratings for downgrade initiated on
October 4, 2016 following the announcement of Cardtronics' plans to
purchase DirectCash Payments Inc. Moody's also affirmed
Cardtronics' SGL-2 speculative grade liquidity rating. The ratings
outlook at stable.
RATINGS RATIONALE
Cardtronics will have elevated pro forma leverage of approximately
3x immediately following the completion of the pending DirectCash
acquisition. The confirmation of the Ba2 CFR reflects Moody's
expectation that the company will utilize free cash flow to
gradually repay a meaningful portion of borrowings related to this
purchase in the coming year such that financial leverage improves
to about 2.5x. The Ba2 CFR also reflects the company's inherent
exposure to long term secular risks associated with potentially
limited growth, and possible contraction, in cash-based
transactions. The CFR additionally considers uncertainties
relating to the pending loss of Cardtronics' largest customer in
July 2017, interest rate exposure, and the company's ability to
maintain surcharge and interchange rates. However, the rating is
supported by Cardtronics' established market position as the
world's largest retail ATM owner, a track record of strong business
expansion in recent years, and predictable operating cash flow
derived from transaction-based revenues. The company's growing
scale and investments in infrastructure provide operating leverage
that should largely mitigate the impact of competitive challenges,
potential declines in interchange rates, or lower than expected
surcharge rates.
Cardtronics' SGL-2 speculative grade liquidity rating is presently
supported by an unrestricted cash balance of $59.5 million as of
September 30, 2016 as well as Moody's expectation that the company
will generate solid free cash flow over the next 12 months with no
meaningful debt maturing over this time frame. Additionally, the
company's liquidity is bolstered by an undrawn $375 million
revolving credit facility due in 2021. Moody's expects Cardtronics
to maintain good liquidity following the completion of the
DirectCash acquisition early in 2017, although this view is subject
to change depending on the company's final debt structure upon
closing.
The stable outlook reflects Moody's expectations that Cardtronics'
revenues will decline moderately in 2017 due to the pending loss of
the company's largest customer in July 2017. Pro forma total debt
to EBITDA is expected to decline modestly towards the mid-2x level
during this period as Cardtronics' utilizes free cash flow to
gradually repay borrowings associated with the DirectCash
purchase.
Factors that Could Lead to an Upgrade
The rating could be upgraded if Cardtronics demonstrates consistent
growth in free cash flow driven by organic revenue expansion and is
able to sustain debt to EBITDA leverage below 2x (Moody's
adjusted).
Factors that Could Lead to a Downgrade
The rating could be downgraded if Cardtronics' is unable to
maintain total debt to EBITDA (Moody's adjusted) below 3x and free
cash flow weakens to below the mid-teens percentage of total debt
for a protracted time period. Additionally, Cardtronics' ratings
could be downgraded if the company's sales are materially impacted
by a decline in ATM transactions or increased usage of
non-cash/electronic payment methods or technologies.
Outlook Actions:
Issuer: Cardtronics, Inc.
Outlook, Changed To Stable From Rating Under Review
Confirmations:
Issuer: Cardtronics, Inc.
Probability of Default Rating, Confirmed at Ba2-PD
Corporate Family Rating, Confirmed at Ba2
Senior Unsecured Regular Bond/Debentures, Confirmed at Ba3
(LGD4)
Affirmations:
Issuer: Cardtronics, Inc.
Speculative Grade Liquidity Rating, Affirmed SGL-2
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
Cardtronics, a subsidiary of Cardtronics plc, provides consumer
financial services through its network of automated teller machines
("ATMs") and multi-function financial services kiosks. Cardtronics'
customers primarily include large and small retailers, operators of
facilities such as shopping malls and airports, and financial
institutions. Excluding the impact of pending acquisitions, we
expect Cardtronics' to generate $1.25 billion in sales in 2016.
CENTURYLINK INC: Moody's Puts Ba2 CFR on Review for Downgrade
-------------------------------------------------------------
Moody's Investors Service has placed CenturyLink, Inc.'s ratings
under review for downgrade, including the company's Ba2 corporate
family rating, Ba2-PD Probability of Default Rating, the Ba3 senior
unsecured rating, and all subsidiary debt ratings. The review is
prompted by CenturyLink's agreement to purchase Level 3
Communications, Inc. for $24.3 billion with a mix of 40% cash and
60% equity. Moody's expects CenturyLink's leverage (Moody's
adjusted) to increase from 3.4x as of June 30, 2016, to 4.4x at
FYE2018 as a result of the transaction. CenturyLink's SGL-3
speculative grade liquidity rating is not affected at this time.
The transaction is expected to close by the end of third quarter of
2017 and is subject to approval by CenturyLink and Level 3
shareholders and regulatory approvals.
On Review for Downgrade:
Issuer: Centel Capital Corp.
Backed Senior Unsecured Regular Bond/Debenture, Placed on Review
for Downgrade, currently Ba1 (LGD3)
Issuer: CenturyLink, Inc.
Probability of Default Rating, Placed on Review for Downgrade,
currently Ba2-PD
Corporate Family Rating, Placed on Review for Downgrade,
currently Ba2
Senior Unsecured Regular Bond/Debenture, Placed on Review for
Downgrade, currently Ba3 (LGD5)
Issuer: Embarq Corporation
Senior Unsecured Regular Bond/Debenture, Placed on Review for
Downgrade, currently Ba1 (LGD3)
Issuer: Embarq Florida, Inc.
Senior Secured First Mortgage Bonds, Placed on Review for
Downgrade, currently Baa3 (LGD2)
Issuer: Mountain States Telephone and Telegraph Co.
Senior Unsecured Regular Bond/Debenture, Placed on Review for
Downgrade, currently Ba1
Issuer: Northwestern Bell Telephone Company
Senior Unsecured Regular Bond/Debenture, Placed on Review for
Downgrade, currently Ba1
Issuer: Qwest Corporation
Senior Unsecured Regular Bond/Debenture, Placed on Review for
Downgrade, currently Ba1 (LGD3)
Senior Unsecured Shelf due 2018, Placed on Review for Downgrade,
currently (P)Ba1
Underlying Senior Unsecured Regular Bond/Debenture, Placed on
Review for Downgrade, currently Ba1
Outlook Actions:
Issuer: Centel Capital Corp.
Outlook, Changed To Rating Under Review From Stable
Issuer: CenturyLink, Inc.
Outlook, Changed To Rating Under Review From Stable
Issuer: Embarq Corporation
Outlook, Changed To Rating Under Review From Stable
Issuer: Embarq Florida, Inc.
Outlook, Changed To Rating Under Review From Stable
Issuer: Mountain States Telephone and Telegraph Co.
Outlook, Changed To Rating Under Review From Stable
Issuer: Northwestern Bell Telephone Company
Outlook, Changed To Rating Under Review From Stable
Issuer: Qwest Corporation
Outlook, Changed To Rating Under Review From Stable
RATINGS RATIONALE
CenturyLink has agreed to acquire Level 3 in a cash and stock
transaction for approximately $24.3 billion plus the assumption of
$10.8 billion of Level 3 debt. Level 3 shareholders will receive
consideration of $66.50 per share consisting of $26.50 per share in
cash and $40.00 per share in stock. CenturyLink intends to fund
the cash portion of the transaction with $10.2 billion of senior
secured debt issued by CenturyLink, Inc, including an undrawn $2
billion senior secured revolver. The secured debt will benefit
from guarantees from several material non-regulated CenturyLink
subsidiaries (including Embarq parent) and a new Level 3 holding
company.
Moody's review will focus on the post-close combined company's
leverage and cash flows, as well as its growth potential. Based on
the current proposed transaction structure, Moody's expects any
downgrade of CenturyLink's corporate family rating to be limited to
one notch. Ratings of some of the debt classes within the
CenturyLink structure could fall by two notches due to changes in
the amount and seniority of debt and additional guarantees in the
proposed capital structure.
CenturyLink's corporate family rating would face pressure due to
the higher leverage from the debt incurred to finance the deal,
which would be partially offset by the additional scale and growth
potential from the acquisition of Level 3. If the transaction
closes as proposed, Moody's expects CenturyLink's leverage (Moody's
adjusted) to remain above 4x for several years due to modest
growth, margin pressure, high dividends and high capital intensity.
Pro-forma for the transaction, Moody's projects leverage to
increase from around 3.5x at year end 2016 to 4.4x for FYE2018,
with potential to fall to 4.2x by FYE2019 with EBITDA growth and
debt repayment. Moody's is likely to consider the positive aspects
of the transaction when contemplating the appropriate credit
metrics for CenturyLink, which could translate into slightly higher
leverage tolerance than the prior stand-alone credit. Moody's has
identified leverage of 3.8x as the limit for CenturyLink's Ba2
corporate family rating prior to its planned acquisition of Level
3.
The combination of CenturyLink and Level 3 would create the second
largest provider of telecom services to the enterprise segment
behind only AT&T. CenturyLink's business mix will have an
increased focus on the enterprise segment which will represent 75%
of pro forma revenues. Level 3 and CenturyLink have complementary
local fiber assets and Level 3's advanced services portfolio will
be an asset for CenturyLink. The company estimates it can realize
$975 million in run-rate cash synergies, with 80% within 36 months
of closing. Moody's believes this is achievable due to both
companies' track records of integrating large-scale acquisitions
and meeting, or exceeding, targeted synergies.
The transaction will enable CenturyLink to utilize $9.6 billion of
Net Operating Losses from Level 3, which will offset a portion of
the pro forma consolidated company's taxable income for several
years. However, to finance the transaction CenturyLink will issue
approximately 521,000 new shares and nearly double its annual cash
dividend from $1.2 billion in FYE2015 to $2.3 billion. The tax
assets are a key benefit of the transaction, but this benefit will
accrue to shareholders while bondholders will suffer higher
leverage and, for some layers of the capital structure, significant
additional subordination.
Like many of its peers, CenturyLink's appetite for financial risk
has steadily increased over the past few years. This transaction
is strategically positive, but the benefits are skewed to
shareholders while creditors are exposed to higher financial risk.
Moody's believes that CenturyLink has no flexibility to alter its
capital allocation stance unless it can return to growth, as the
company's generous dividend underpins its equity value. Over the
past 5 years, CenturyLink has gradually sacrificed its credit
strength to sustain its dividend. Although CenturyLink has
sustained strong capital investment levels, which are positive to
its long term competitive position, it has used leverage liberally
to finance its many demands on cash. This track record and
financial policy results in limited upward ratings potential over
the near term.
Structural Considerations
CenturyLink has substantial subsidiary debt in addition to
substantial debt at the parent level, CenturyLink Inc. All of
CenturyLink's parent and subsidiary debt, except for a small amount
of debt at Embarq Opcos, would be subject to at least one notch
downgrade due to the potential corresponding one notch downgrade of
the corporate family rating. The ratings of unsecured debt at
CenturyLink Inc. and Embarq Corp. could be downgraded by up to two
notches due to the additional subordination incurred by the new
guaranteed debt issued to finance the transaction.
The principal methodology used in these ratings was Global
Telecommunications Industry published in December 2010.
CENTURYLINK INC: S&P Affirms 'BB' CCR; Outlook Stable
-----------------------------------------------------
S&P Global Ratings said it affirmed its 'BB' long-term corporate
credit rating and 'B' short-term corporate credit rating on Monroe,
La.-based CenturyLink Inc. The outlook is stable.
CenturyLink plans to finance the $24 billion purchase price with
60% equity and 40% cash and new debt. S&P expects the company will
issue about $7 billion of new secured debt at the parent company
and will use proceeds from the sale of its data center business to
fund the cash portion. It will also issue another $1.2 billion of
secured debt to refinance upcoming maturities and will put in place
a $2 billion senior secured revolving credit facility.
At the same time, S&P placed its rating on CenturyLink's senior
unsecured debt on CreditWatch with negative implications and S&P's
rating on wholly-owned subsidiary Embarq Corp.'s senior unsecured
debt on CreditWatch with positive implications.
"The rating affirmation is based on our favorable view of the
combined business, which is offset by the high pro forma leverage
of about 4.4x (S&P Global-adjusted) based on the purchase price,"
said S&P Global Ratings credit analyst Allyn Arden.
Key business benefits include increased economies of scale from the
combined business, a larger domestic and global reach to better
service enterprise customers, and the enhancement of CenturyLink's
product portfolio to better serve the enterprise market.
Additionally, the combination of Level 3's dense metro and
long-haul fiber assets and CenturyLink's local market facilities
should offer meaningful operating synergies and improved coverage.
S&P's more favorable business risk assessment also incorporates the
increased mix of business customers to 75% of total revenue from
62% and reduced exposure to the highly competitive residential
market because Level 3's base of business is almost entirely
commercial customers. S&P believes that large enterprise customers
are less likely to churn than consumers or small business clients.
Moreover, S&P believes the purchase of Level 3 will alleviate
potential regulatory risk at CenturyLink associated with the FCC's
proposed special access reform, which could result in lower revenue
from the sale of business data service lines to customers, since
Level 3 is a competitive telecom provider and a net buyer of
special access circuits.
The stable outlook reflects S&P's expectation for relatively
limited integration risk despite elevated leverage near term. S&P
expects CenturyLink's revenue on a standalone basis to decline in
the low-single-digit percent area in 2016 due to ongoing
residential access line losses and lower revenue in the SMB market,
which is nearly offset by growth from strategic services, including
the company's fiber-based Prism TV service and high bandwidth based
services for larger enterprise customers.
CH KIM: Adequate Protection Payments to ReadyCap Lending Ordered
----------------------------------------------------------------
Judge Clifton R. Jessup, Jr. of the U.S. Bankruptcy Court for the
Northern District of Alabama denied ReadyCap Lending LLC's Motion
seeking relief from the automatic stay and to prohibit CH Kim, LLC
from using cash collateral.
During the hearing held on ReadyCap Lending's Motion held on
October 17, 2016, the parties announced that they had resolved the
issues set forth in ReadyCap Lending's Motion.
Judge Jessup directed the Debtor to pay ReadyCap Lending monthly
cash payments of $511.60, for six months beginning on November 1,
2016, or until the Court confirms the Debtor's Plan of
Reorganization, whichever occurs first.
A full-text copy of the Order, dated October 28, 2016, is available
at http://bankrupt.com/misc/CHKimLLC2016_1681749crj11_68.pdf
ReadyCap Lending, LLC is represented by:
Matthew M. Cahill, Esq.
BAKER, DONELSON, BEARMAN,
CALDWELL & BERKOWITZ, P.C.
420 North 20th Street, Suite 1400
1400 Wells Fargo Tower
Birmingham, AL 35203
Telephone: (205) 328-0480
Email: mcahill@bakerdonelson.com
About CH Kim, LLC
CH Kim, LLC, dba Calvin's Cleaners, owns a dry cleaning business
with a cleaning plant and several retail locations in North
Alabama. The Debtor sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. N.D. Ala. Case No. 16-81749) on June 16,
2016. The petition was signed by Chan Hi Kim, owner. The Debtor
is represented by Tazewell T. Shepard, Esq., at Sparkman, Shepard &
Morris, P.C. The Debtor estimated assets at $50,001 to $100,000
and liabilities at $500,001 to $1 million at the time of the
filing.
CHENG & COMPANY: MR 619's Bid for Summary Judgment Partly Granted
-----------------------------------------------------------------
In the case captioned In re CHENG & COMPANY L.L.C., Chapter 11,
Debtor, Case No. 15-00014 (Bankr. D.C.),
Judge S. Martin Teel, Jr. of the United States Bankruptcy Court for
the District of Columbia granted in part and denied, in part, the
motion filed by MR 619 H Street Capital LLC for summary judgment on
Cheng & Company L.L.C.'s amended objection to MR 619's claim.
The issues involve a Purchase and Sale Agreement that addressed two
sets of properties, one known as the H Street Property (owned by
Cheng & Company) and the other known as the Eye Street Property
(owned by affiliates of Cheng & Company, the "Eye Street Seller,"
to whose rights Cheng & Company has succeeded).
Cheng & Company filed its Chapter 11 case on January 13, 2015. On
April 14, 2015, MR 619 filed its proof of claim setting forth a
secured claim in the amount of $1,378,245.22 for "Money Loaned
under Note and Deed of Trust." On May 12, 2015, Cheng & Company
filed its objection to MR 619's claim. The basis of the objection
to the claim was an Amended Complaint filed by Cheng & Company and
the Eye Street seller against MR 619 and the Eye Street purchaser
in the Superior Court of the District of Columbia. On June 8,
2015, MR 619 filed a response to the objection to the claim with a
copy of the agreement and all exhibits and amendments thereto
attached as Exhibit 1.
On February 16, 2016, the court held a hearing to address the
Motion. Judge Teel concluded that MR 619 is entitled to a grant of
summary judgment in its favor on the question of whether Cheng &
Company breached the terms of the agreement. The judge further
stated that MR 619 is also entitled to a grant of summary judgment
in its favor on the question of whether a right to repayment arose
in its favor when it invoked its right to terminate its obligations
under the agreement.
Judge Teel, however, held that MR 619 is not entitled to a grant of
summary judgment disposing of the entirety of Cheng & Company's
objection to the claim, because Cheng & Company has asserted a
right of setoff predicated on several tort claims and alter ego
claims with respect to some of which there remain genuine issues of
material fact that must be resolved. Specifically, the judge
pointed out that Cheng & Company has raised genuine issues of
material fact with respect to whether MR 619 can be held liable for
the alleged breach of the agreement by the Eye Street purchaser and
for wrongfully conspiring with the Eye Street purchaser and its
affiliates to deprive Cheng & Company of its rights under the
agreement.
A full-text copy of Judge Teel's October 12, 2016 memorandum
decision is available at https://is.gd/ap3z3T from Leagle.com.
Cheng & Company L.L.C. is represented by:
Ronald Jay Drescher, Esq.
DRESCHER & ASSOCIATES
4 Reservoir Circle, Suite 107
Baltimore, MD 21208
Tel: (410)484-9000
Email: rondrescher@drescherlaw.com
-- and --
Bradshaw Rost, Esq.
TENENBAUM & SAAS, PC
4504 Walsh Street
Chevy Chase, MD 20815
Tel: (301)961-5300
Fax: (301)961-5305
U.S. Trustee for Region Four is represented by:
Bradley D. Jones, Esq.
U.S. TRUSTEE'S OFFICE
115 South Union Street, Plaza Level Suite 210
Alexandria, VA 22314
Tel: (703)557-7176
Fax: (703)557-7279
About Cheng & Company
Cheng & Company L.L.C., based in Washington, DC, filed for Chapter
11 bankruptcy (Bankr. D.D.C. Case No. 15-00014) on January 13,
2015. Cheng said it is a Single Asset Real Estate debtor. The
Hon. Martin Teel, Jr. presides over the case. Ronald Jay
Drescher, Esq., at Drescher & Associates, serves as counsel to the
Debtor.
In its petition, the Debtor listed total assets of $5 million and
total liabilities of $4.98 million. The petition was signed by
Anthony Cheng, member. A list of the Debtor's two largest
unsecured creditors is available for free at
http://bankrupt.com/misc/dcb15-00014.pdf
CIRCLE Z: Seeks to Employ Michael E. Gazette as Counsel
-------------------------------------------------------
Circle Z Pressure Pumping, LLC, asks the Bankruptcy Court for
authorization to employ Michael E. Gazette, Esq., at the Law
Offices of Michael E. Gazette, as counsel.
The Debtor intends to employ Michael E. Gazette as counsel to
appear for, prosecute, and defend in the bankruptcy proceeding,
including providing advice to Debtor; the preparation and filing of
the petition, schedules, and statement of financial affairs; the
preparation and filing of a disclosure statement and plan of
reorganization; negotiation with creditors; review of executory
contracts; review of claims; the response to and appearance at
hearings on contested matters; and for any further matters which
may arise.
The normal hourly billing rate of Michael E. Gazette for Chapter 11
bankruptcy matters is $300 per billable hour for his time as an
attorney, and $50 for the firm's paraprofessionals.
Mr. Gazette assures the Court that his firm has no connections with
the creditors, any other party in interest, their respective
attorneys and accountants, the United States Trustee or any person
employed in the office of the United States Trustee.
The attorney can be reached at:
Michael E. Gazette, Esq.
LAW OFFICES OF MICHAEL E. GAZETTE
100 East Ferguson Street, Suite 1000
Tyler, Texas 75702-5706
Tel: (903) 596-9911
Fax: (903) 596-9922
E-mail: megazette@suddenlinkmail.com
About Cicle Z Pressure Pumping
Circle Z Pressure Pumping, LLC, filed a chapter 11 petition (Bankr.
E.D. Tex. Case No. 16-60633) on Oct. 11, 2016. The petition was
signed by David Powell, member. The Debtor is represented by
Michael E. Gazette, Esq., at the Law Offices of Michael E. Gazette.
The Debtor estimated assets and debt of $10 million to $50 million
at the time of the filing.
The Debtor was originally formed in Texas in 2009. Its corporate
headquarters and home office is located in Longview, Panola County,
Texas. The Debtor's managing member, David Powell, has been with
the Debtor since its formed. The Debtor's business is exclusively
in the oil and gas industry rendering services in the hydraulic
fracturing of formations to enhance the recovery of oil and gas.
COMMUNITY HEALTH: S&P Affirms 'B' CCR & Revises Outlook to Neg.
---------------------------------------------------------------
S&P Global Ratings affirmed its 'B' corporate credit rating on
Franklin, Tenn.-based acute-care hospital operator Community Health
Systems Inc. and revised the rating outlook to negative from
stable. S&P's issue-level ratings on Community Health are
unchanged.
"Our rating action follows Community's preannouncement of very weak
third-quarter operating results, characterized by declining margins
and weakening adjusted admissions trends, even when compared to a
disappointing prior year third quarter," said S&P Global Ratings
credit analyst Shannan Murphy. Moreover, the company has recently
announced that it is reviewing strategic alternatives, and is
speaking to a number of parties, including financial sponsors, who
may be interested in purchasing all or a portion of the company's
assets. While S&P continues to believe that the company can
address some of its capital structure issues through cost cutting
and planned and pending asset sales, S&P believes that there is a
meaningful risk that the company is unable to execute on these
plans.
While many peer acute-care hospital operators reported soft
same-facility adjusted admissions in the third quarter, Community's
1.5% decrease in same-facility adjusted admissions was weaker than
expected, especially when compared to a poor prior year comparison.
In addition to declining volumes, the company was unable to
achieve targeted cost reductions in the quarter, which contributed
to significant margin erosion, with margins down about 170 basis
points on a sequential basis, off weak second-quarter levels.
S&P's negative rating outlook on Community reflects S&P's view that
credit risk has escalated over the past few months, reflecting both
Community's operating issues and its strategic review process.
Based on recent trends, S&P believes that Community is likely to
generate only marginally positive free cash flow over the next
several quarters, and debt leverage is likely to be sustained near
7x. However, S&P recognizes that the company plans to address at
least some of its capital structure issues through cost
restructuring and planned and pending asset sales, though S&P now
sees execution risk associated with this strategy as higher given
recent operating performance.
S&P could lower the rating if Community is unable to stabilize its
operations and generate at least $100 million to $200 million in
positive recurring cash flow. S&P could also lower the rating if
S&P believes the company will be unable to address its covenant
issues (either through improving its operating performance or
getting an amendment) such that it can continue to access its
revolver, given working capital swings inherent in the business.
If S&P become more confident that the company can stabilize its
operations and generate modest positive recurring free cash flow,
S&P could revise the outlook back to stable. In S&P's view, this
would require the company to stabilize EBITDA margins at around
12.5%-13% on an unadjusted basis (just below the level in 2015).
COMPASSION IN HEALTHCARE: U.S. Trustee Unable to Appoint Committee
------------------------------------------------------------------
An official committee of unsecured creditors has not yet been
appointed in the Chapter 11 case of Compassion In Healthcare, Inc.,
as of October 31, according to a court docket.
Compassion In Healthcare, Inc., filed a Chapter 11 petition (Bankr.
M.D. Fla. Case No. 16-05969) on September 7, 2016, and is
represented by represented by Ronald Cutler, Esq.
CONSTELLATION BRANDS: Moody's Assigns B2 CFR; Outlook Stable
------------------------------------------------------------
Moody's Investors Service assigned ratings to Constellation Brands
Canada Inc. (CBC), consisting of a B2 corporate family rating
(CFR), B2-PD probability of default rating, and Ba3 ratings to its
proposed first lien credit facilities (C$40 million revolver,
US$260 million term loan, and C$66 million term loan). The ratings
outlook is stable. This is the first time Moody's has assigned
ratings to CBC.
Net proceeds from new US$260 million and C$66 million first lien
term loans and a new C$136 million second lien term loan million
(unrated), totaling about C$550 million, together with C$510
million in equity from CBC's financial sponsor, Ontario Teachers'
Pension Plan (OTPP), will be used to fund the C$1 billion
acquisition of the company from its prior parent, Constellation
Brands Inc. (Ba1 stable). OTPP's contribution includes C$87.5
million by way of a shareholder loan, the structure of which
Moody's considers to be debt. The new C$40 million revolver is
expected to be undrawn at close.
"Constellation Brands Canada's B2 CFR is driven by it strong market
position in the Canadian wine industry, coupled with its high
leverage", said Peter Adu, Moody's AVP.
Ratings Assigned
Corporate Family Rating, B2
Probability of Default Rating, B2-PD
C$40 million revolving credit facility due 2021, Ba3 (LGD2)
US$260 million first lien term loan due 2023, Ba3 (LGD2)
C$66 million first lien term loan due 2023, Ba3 (LGD2)
Outlook:
Assigned as Stable
RATINGS RATIONALE
CBC's B2 CFR primarily reflects high leverage (pro forma adjusted
Debt/EBITDA of 7.1x), exposure to foreign currency fluctuations,
and small scale relative to alcoholic beverage rated peers, offset
by its market leadership position in the Canadian wine industry, a
portfolio of well-known brands, substantial barriers to entry
driven by favorable regulation, and attractive industry growth
prospects. The rating assumes leverage will trend below 7x in the
next two years as C$25 million per year of estimated free cash flow
is applied to reduce about C$700 million of adjusted debt, while
EBITDA remains flat around C$100 million as the company absorbs the
additional costs of operating as a standalone company.
CBC has good liquidity, supported by full availability under its
new C$40 million revolving credit facility due 2021 and expected
free cash flow of C$25 million through the next four quarters.
These sources are more than sufficient to fund annual term loan
amortizations of about C$4 million. CBC will have no cash when the
transaction closes and will rely on the revolver for immediate cash
needs. The company's revolver will be subject to a springing
maximum first lien net leverage covenant when drawings exceed 35%.
Moody's expects cushion to exceed 25% should the covenant be
applicable. CBC has limited ability to generate liquidity from
asset sales as its assets are encumbered.
The stable ratings outlook presumes that CBC will maintain its
strong Canadian wine industry market position and will reduce its
high leverage through the use of free cash flow to reduce debt.
A ratings upgrade would require CBC to sustain Debt/EBITDA below 5x
(pro forma 7.1x) and EBIT/Interest above 2.5x (pro forma 1.7x). A
ratings downgrade could occur if Debt/EBITDA was sustained above 7x
and EBIT/Interest below 1x. Weak liquidity, possibly from negative
free cash flow generation or engaging in debt-funded distributions
to its financial sponsor could also lead to a downgrade.
The principal methodology used in these ratings was Global
Alcoholic Beverage Industry published in October 2013.
Constellation Brands Canada Inc. produces and distributes a
portfolio of wine brands mostly through provincial liquor boards,
its Wine Rack retail stores and grocery retailers. Annual revenue
is close to C$600 million. The company is headquartered in
Mississauga, Ontario.
COSI INC: Court Approves Nov. 28 Bid Deadline, Nov. 30 Auction
--------------------------------------------------------------
Cosi, Inc., the fast-casual restaurant company, on Nov. 1, 2016,
disclosed that, on Oct. 24, 2016, the U.S. Bankruptcy Court for the
District of Massachusetts (Eastern Division) entered the Order
Establishing Bidding Procedures Relating to the Sale of All or a
Portion of the Debtors' Assets. The Bidding Procedures set forth
the process by which Cosi and its subsidiaries are authorized to
conduct an auction for the sale of all or substantially all of
their assets under Section 363 of the Bankruptcy Code.
The Bidding Procedures are for the purposes of seeking and
evaluating offers for the assets, on the terms and provisions set
forth in such Bidding Procedures, in addition to the bid
contemplated by the proposed stalking horse bidder ("Stalking Horse
Bidder") affiliated with the Debtors' debtor-in-possession lenders,
as set forth in an asset purchase agreement dated as of October 18,
2016, among the Debtors and the Stalking Horse Bidder (the
"Stalking Horse Agreement"), which remains subject to approval of
the Bankruptcy Court. Bids must comply with each of the
requirements set forth in the Bidding Procedures in order to be
considered qualified bids. The Stalking Horse Bidder will be
deemed a qualified bidder.
To participate in the bidding process and to be considered a
qualified bidder, an interested party must deliver an executed
confidentiality agreement and demonstrate financial ability.
Qualified bids must be received on or before Nov. 28, 2016, at 5:00
p.m. Eastern Time, and must provide that the Sale will be
consummated on or prior to Dec. 14, 2016.
If the Debtors receive no qualified bids for the assets (other than
the bid of the Stalking Horse Bidder), the Debtors will not conduct
the auction and will designate the bid of the Stalking Horse Bidder
as the successful bid. If the Debtors receive one or more
qualified bids, other than the bid of the Stalking Horse Bidder,
the Debtors will conduct the auction on Nov. 30, 2016, in
accordance with the Bidding Procedures until the Debtors have
selected the successful bid. The Debtors may consider, among other
factors, the total consideration to be received for the assets as
well as other financial and contractual terms relevant to the
proposed sale, including those factors affecting the speed and
certainty of consummating the sale.
At a hearing to consider approval of the sale of the assets to the
successful bidder (or to approve the Stalking Horse Agreement, as
applicable, if no auction is held), to be held on or before Dec. 8,
2016, at 10:00 a.m. Eastern Time, before the Honorable Melvin S.
Hoffman, at the Bankruptcy Court for the Eastern District of
Massachusetts, Room 2, John W. McCormack Post Office and Court
House, 5 Post Office Square, Suite 1150, Boston, MA 02109-3945, the
Debtors will present the successful bid to the Court for approval.
If a successful bidder fails to consummate a sale because of its
breach after the entry of an Order of the Bankruptcy Court
approving such sale, the Debtors may consummate the sale with any
other qualified bidder without further Order of the Bankruptcy
Court.
Parties interested in the 363 sale process may contact Randy
Kominsky, Cosi's Chief Restructuring Officer, at
rkominsky@allianceffg.com
About Cosi, Inc.
Cosi -- http://www.getcosi.com/-- is an international fast casual
restaurant company. There are currently 45 Company-owned and 31
franchise restaurants operating in fourteen states, the District of
Columbia, Costa Rica and the United Arab Emirates.
Cosi, Inc. and its affiliated debtors filed chapter 11 petitions
(Bankr. D. Mass. Case No. 16-13704-MSH) on Sept. 28, 2016. The
petitions were signed by Patrick Bennett, interim chief executive
officer.
The Hon. Melvin S. Hoffman presides over the case.
The Debtors tapped Joseph H. Baldiga, Esq. and Paul W. Carey, Esq.,
at Mirick, O'Connell, DeMallie & Lougee, LLP, as counsel; O'Connor
Group, Inc., as financial consultant; and Randy Kominsky of
Alliance for Financial Growth, Inc. as CRO.
In its petition, Cosi estimated $31.24 million in assets and $19.83
million in liabilities.
The U.S. Trustee appointed an official committee of unsecured
creditors. Members of the Committee are Robert J. Dourney, Honor
S. Heath of NStar Electric Company and Paul Filtzer of SRI EIGHT
399 Boylston.
CSSH INC: Hires George Jacobs as Attorney
-----------------------------------------
CSSH, Inc. seeks authorization from the U.S. Bankruptcy Court for
the Eastern District of Michigan to employ George E. Jacobs as
attorney.
The Debtor requires Mr. Jacobs to:
(a) give the Debtor legal advice with respect to its rights and
duties in connection with the Chapter 11 proceeding; and
(b) perform all other legal services which may be necessary.
Mr. Jacobs will bill for services at $325 per hour.
Mr. Jacobs will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Carmel Halloun, the president of the Debtor, paid Mr. Jacobs a
retainer of $3,287.
Mr. Jacobs assured the Court that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code and does not represent any interest adverse to the Debtor and
its estate.
Mr. Jacobs can be reached at:
George E. Jacobs, Esq.
BANKRUPTCY LAW OFFICES
2425 S. Linden Rd., Ste. C
Flint, MI 48532
Tel: (810) 720-4333
E-mail: george@bklawoffice.com
CSSH, Inc., filed a Chapter 11 bankruptcy petition (Bankr. E.D.
Mich. Case No. 16-32129) on September 14, 2016, disclosing under $1
million in both assets and liabilities. The Debtor is represented
by George E. Jacobs, Esq.
CTI BIOPHARMA: Had $33.2M Net Financial Standing as of Sept. 30
---------------------------------------------------------------
CTI BioPharma Corp. (CTI Parent Company) reported total estimated
and unaudited net financial standing of $33.2 million as of Sept.
30, 2016. The total estimated and unaudited net financial standing
of CTI Consolidated Group as of Sept. 30, 2016, was $34.9 million.
CTI Parent Company trade payables outstanding for greater than 30
days were approximately $12.4 million as of Sept. 30, 2016. CTI
Consolidated Group trade payables outstanding for greater than 30
days were approximately $13.7 million as of Sept. 30, 2016.
During September 2016, there were solicitations for payment only
within the ordinary course of business and there were no
injunctions or suspensions of supply relationships that affected
the course of normal business.
As of Sept. 30, 2016, there were no amounts overdue of a financial
or tax nature, or amounts overdue to social security institutions
or overdue to employees.
During the month of September 2016, the Company's common stock, no
par value, outstanding decreased by 36,316 shares. As a result,
the number of issued and outstanding shares of Common Stock as of
Sept. 30, 2016, was 282,508,329.
A full-text copy of the press release is available for free at:
https://is.gd/pYtnuS
About CTI BioPharma
CTI BioPharma Corp. (NASDAQ and MTA: CTIC) --
http://www.ctibiopharma.com/-- formerly known as Cell
Therapeutics, Inc., is a biopharmaceutical company focused on
the acquisition, development and commercialization of novel
targeted therapies covering a spectrum of blood-related cancers
that offer a unique benefit to patients and healthcare providers.
The Company has a commercial presence in Europe and a late-stage
development pipeline, including pacritinib, CTI's lead product
candidate that is currently being studied in a Phase 3 program for
the treatment of patients with myelofibrosis. CTI BioPharma is
headquartered in Seattle, Washington, with offices in London and
Milan under the name CTI Life Sciences Limited.
CTI Biopharma reported a net loss attributable to common
shareholders of $122.62 million on $16.11 million of total revenues
for the year ended Dec. 31, 2015, compared to a net loss
attributable to common shareholders of $96.0 million on $60.07
million of total revenues for the year ended Dec. 31, 2014.
As of March 31, 2016, CTI Biopharma had $123 million in total
assets, $68.7 million in total liabilities and $54.7 million in
total shareholders' equity.
The Company's independent registered public accounting firm
included an explanatory paragraph in its reports on its
consolidated financial statements for each of the years ended
Dec. 31, 2007, through Dec. 31, 2011, and for the year ended
Dec. 31, 2014, regarding their substantial doubt as to the
Company's ability to continue as a going concern. The Company said
that although its independent registered public accounting firm
removed this going concern explanatory paragraph in its report on
our Dec. 31, 2015, consolidated financial statements, the Company
expects to continue to need to raise additional financing to fund
its operations and satisfy obligations as they become due.
According to the Company, the inclusion of a going concern
explanatory paragraph in future years may negatively impact the
trading price of its common stock and make it more difficult, time
consuming or expensive to obtain necessary financing, and the
Company cannot guarantee that it will not receive such an
explanatory paragraph in the future.
DALE PROPERTIES: Hires Lapp Libra as Attorneys
----------------------------------------------
Dale Properties, LLC seeks authorization from the U.S. Bankruptcy
Court for the District of Minnesota to employ Ralph V. Mitchell and
the law firm of Lapp, Libra, Thomson, Stoebner & Pusch, Chartered
as attorneys.
Lapp Libra will represent the Debtor in connection with all matters
relating to its Chapter 11 case.
Lapp Libra will be paid at these hourly rates:
Ralph V. Mitchell $495
Joseph D. Roach $340
Rosanne H. Wirth $160
Lapp Libra will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Lapp Libra received $40,000 retainer from the Debtor. From the
retainer, Lapp Libra paid the filing fee of $1,717. Lapp Libra also
paid itself for work done prior to the bankruptcy filing from
September 1 through September 30, 2016 in the amount of $4,325.26.
The balance of $33,957.74 is now being held in Lapp Libra's trust
account.
Ralph V. Mitchell, shareholder of Lapp Libra, assured the Court
that the firm is a "disinterested person" as the term is defined in
Section 101(14) of the Bankruptcy Code and does not represent any
interest adverse to the Debtor and its estate.
Lapp Libra can be reached at:
Ralph V. Mitchell, Esq.
LAPP, LIBRA, THOMSON,
STOEBNER & PUSCH, CHARTERED
One Financial Plaza, Suite 2500
120 South Sixth Street
Minneapolis, MN 55402
Tel: (612) 338-5815
E-mail: rmitchell@lapplibra.com
Dale Properties
Dale Properties, LLC, based in Minnetonka, Minn., filed a Chapter
11 petition (Bankr. D. Minn. Case No. 16-42924) on October 6, 2016.
The Hon. Katherine A. Constantine presides over the case. Ralph
Mitchell, Esq. of Lapp, Libra, Thomson, Stoebner & Pusch,
Chartered, serves as bankruptcy counsel.
In its petition, the Debtor estimated $1 million to $10 million in
both assets and liabilities. The petition was signed by Alan Dale,
chief manager.
DALLAS PROTON: Amended Consolidated Plan of Liquidation Confirmed
-----------------------------------------------------------------
Judge Stacey G. C. Jernigan of the United States Bankruptcy Court
for the Northern District of Texas, Dallas Division, approved and
confirmed Dallas Proton Treatment Center, LLC's amended
consolidated plan of liquidation.
The Official Committee of Unsecured Creditors, a statutorily-formed
committee, filed its Amended Consolidated Plan of Liquidation and
the Amended Disclosure Statement in Support of Amended Consolidated
Plan of Liquidation on August 12, 2016. On the same day, the Court
entered an order approving the adequacy of the Disclosure Statement
in accordance with Section 1125 of the Bankruptcy Code.
Advance Particle Therapy, LLC, filed the only objection to
confirmation of the Plan and this objection was overruled.
Robert Yaquinto, Jr., was appointed as the Liquidating Trustee
pursuant to section 7.3 of the Plan.
A full-text copy of Judge Jernigan's October 14, 2016 findings of
fact, conclusions of law and order is available at
https://is.gd/0KDSfK from Leagle.com.
Dallas Proton Treatment Center, LLC is represented by:
Marcus Alan Helt, Esq.
Mark C. Moore, Esq.
GARDERE WYNNE SEWELL LLP
2021 McKinney Avenue, Suite 1600
Dallas, TX 75201
Tel: (214)999-3000
Fax: (214)999-4667
Email: mhelt@gardere.com
mmoore@gardere.com
Robert Yaquinto, Jr., Trustee, is represented by:
John Mark Chevallier, Esq.
David L. Woods, Esq.
MCGUIRE, CRADDOCK & STROTHER, P.C.
2501 N. Harwood St., Suite 1800
Dallas, TX 75201
Tel: (214)954-6800
Fax: (214)954-6868
Email: mchevallier@mcslaw.com
dwoods@mcslaw.com
-- and --
Robert Yaquinto, Jr., Esq.
509 N. Montclair Ave
Dallas, TX 75208-5450
United States Trustee, U.S. Trustee, is represented by:
Mary Frances Durham, Esq.
UNITED STATES DEPARTMENT OF JUSTICE
Earle Cabell Federal Building
1100 Commerce Street, Room 976
Dallas, TX 75242
Tel: (214)767-8967
Fax: (214)767-8971
About Dallas Proton Treatment Center
Dallas Proton Treatment Holdings, LLC, was formed in January 2010
and is registered as a limited liability company under the laws of
the State of Delaware. Holdings' authorized purpose is to conduct
whatever business is necessary to design, finance, construct, and
manage a licensed, freestanding healthcare center in the Dallas,
Texas, area that provides proton-radiation therapy for patients
with cancerous tumors.
Holdings' wholly owned subsidiary, Dallas Proton Treatment Center,
LLC, was formed in March 2012 for the specific purpose of
developing, owning, and operating the Project. Center is the legal
owner of a tract of land and improvements at 2300 N. Stemmons Fwy,
Dallas, Texas 75207. Center purchased that real estate on or
around Nov. 12, 2013, for approximately $11.60 million. Center has
spent approximately $18 million in additional funds to develop and
start construction of the Project.
Project is the last of a four-facility program to build four
proton-therapy centers across the United States. All four centers
were or are being developed and constructed under the management of
Advanced Particle Therapy, LLC. As of the Petition Date, APT owned
approximately 95% of the Class B equity units, and 96.4% of the
Class A equity units, in Holdings.
Dallas Proton Treatment Center and Dallas Proton Treatment Holdings
sought Chapter 11 protection (Bankr. N.D. Tex. Case Nos. 15-33783
and 15-33784, respectively) on Sept. 17, 2015. The petitions were
signed by James Thomson as chief technology officer/manager.
Mark C. Moore, Esq., at Gardere Wynne Sewell LLP serves as counsel
to the Debtors. Dallas Proton Treatment Center estimated assets at
$10 million to $50 million and liabilities at $1 million and $10
million. Dallas Proton Treatment Holdings estimated assets at $50
million to $100 million and liabilities at $50 million to $100
million.
DAVE 60 NYC: Hires Robinson Brog as Counsel
-------------------------------------------
Dave 60 NYC Inc., sought and obtained authority from the U.S.
Bankruptcy Court for the Southern District of New York to employ
Robinson Brog Leinwand Greene Genovese & Gluck P.C. as counsel to
the Debtor.
Dave 60 NYC requires Robinson Brog to:
a. provide advice to the Debtor with respect to its powers and
duties under the Bankruptcy Code in the continued operation
of its business and the management of its property;
b. negotiate with creditors of the Debtor, preparing a plan of
reorganization and take the necessary legal steps to
consummate a plan, including, if necessary, negotiations
with respect to financing a plan;
c. appear before the various taxing authorities to work out a
plan to pay taxes owing in installments;
d. prepare on the Debtor's behalf necessary applications,
motions, answers, replies, discovery requests, forms of
orders, reports and other pleadings and legal documents;
e. appear before the Court to protect the interests of the
Debtor and its estate, and representing the Debtor in all
matters pending before the Court;
f. perform all other legal services for the Debtor that may be
necessary herein; and
g. assist the Debtor in connection with all aspects of the
chapter 11 case.
Robinson Brog will be paid at these hourly rates:
Shareholders $450-665
Associates $365-$465
Paralegals $175-$300
Robinson Brog will be paid a retainer in the amount of $50,000.
Robinson Brog will also be reimbursed for reasonable out-of-pocket
expenses incurred.
A. Mitchell Greene, member of Robinson Brog Leinwand Greene
Genovese & Gluck P.C., assured the Court that the firm is a
"disinterested person" as the term is defined in Section 101(14) of
the Bankruptcy Code and does not represent any interest adverse to
the Debtor and its estates.
Robinson Brog can be reached at:
A. Mitchell Greene, Esq.
ROBINSON BROG LEINWAND GREENE
GENOVESE & GLUCK P.C.
875 Third Avenue
New York, NY 10022
Tel: (212) 603-6300
About Dave 60 NYC
Dave 60 NYC Inc., filed a Chapter 11 bankruptcy petition (Bankr.
S.D.N.Y. Case No. 16-12146) on July 27, 2016. Judge Michael E
Wiles presides over the case.
DAVID GOODRICH: Voluntary Chapter 11 Case Summary
-------------------------------------------------
Debtor: David Goodrich Properties LLC
27 Clements Road
Milton, VT 05468
Case No.: 16-11465
Nature of Business: Single Asset Real Estate
Chapter 11 Petition Date: November 1, 2016
Court: United States Bankruptcy Court
District of Vermont (Burlington)
Judge: Hon. Colleen A. Brown
Debtor's Counsel: Todd Taylor, Esq.
LAW OFFICES OF TODD TAYLOR, P.C.
PO Box 1123
Burlington, VT 05402-1123
Tel: (802) 863-4384
Fax: (802) 865-6298
E-mail: ttlaw@toddtaylorlawoffices.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by David Goodrich, member.
The Debtor did not file a list of its 20 largest unsecured
creditors together with the petition.
A full-text copy of the petition is available for free at:
http://bankrupt.com/misc/vtb16-11465.pdf
DAVID IRVING PROCTOR: 2nd Modification to Plan Sent for Voting
--------------------------------------------------------------
Judge Frederick P. Corbit (i) granted a motion by David Irving
Proctor and Idamae Deloris Proctor for conditional approval of the
adequacy of the Disclosures incorporated into the Second
Post-Confirmation Modification of the Plan filed by the Debtors,
and (ii) authorized the Debtors to solicit acceptances to the
latest modifications to the Plan.
Judge Corbit also ordered that:
-- Nov. 28, 2016, is fixed as the last day for filing ballots
accepting or rejecting the Second Post-Confirmation Modification of
the Plan.
-- The Debtors will file a ballot summary no later than
Nov. 30, 2016;
-- Nov. 28, 2016, is fixed as the last day for filing and
serving written objections to the Second Post-Confirmation
Modification of the plan.
-- If no objections are filed and if all balloting requirements
are met, a final hearing on the matter of the Second
Post-Confirmation Modification of the Plan is set for Dec. 1, 2016,
1:30 p.m. at the U.S. Bankruptcy Court, 904 W. Riverside Avenue,
Third Floor Courtroom, Spokane, WA.
-- If objections are filed or if all balloting are not met, the
final hearing will be converted to a status conference.
The Debtor submitted a proposed Second Post-Confirmation
Modification of the Plan, which provides:
a. the term of the Plan will be extended two additional years
from Nov. 23, 2016 to Nov. 23, 2018;
b. if there is no pending private sale of the 100 acre parcel
by June 20, 2018, or if that pending sale does not close
prior to Oct. 31, 2018, it will be sold by public auction
with not less than 15 days notice to creditors of the
date, time and place of auction, which will occur no later
than 60 days from the notice of the date, time and place
of auction;
c. the effective date of the second post-confirmation
modification of the Plan will be June 29, 2016; and
d. Newport Equipment Enterprises will be paid in full at
closing from proceeds of property to which its lien
attaches.
Copies of the motion and the Second Post-confirmation modification
of the Plan are available at:
https://is.gd/EheaeU
https://is.gd/MMYeP8
About David Irving Proctor
David Irving Proctor and Idamae Deloris Proctor sought Chapter 11
protection (Bankr. E.D. Wash. Case No. 10-02249) on April 14, 2010.
Judge Patricia C. Williams is assigned to the case. The Debtor
estimated assets and liabilities in the range of $1,000,001 to
$10,000,000. The Debtors tapped Ian Ledlin, Esq., at Phillabaum
Ledlin Matthews & Sheldon PLL as counsel. The petition was signed
by David Irving Proctor and Idamae Deloris Proctor.
DELIVERY AGENT: Seeks to Pay To Execs Up to $3M in Bonuses
----------------------------------------------------------
Sarah Chaney, writing for The Wall Street Journal Pro Bankruptcy,
reported that Delivery Agent Inc., which helps entertainment and
sports operations sell products online, is seeking to pay top
executives up to $3 million in bonuses during its bankruptcy
proceedings.
According to the report, citing papers filed in bankruptcy court,
the e-commerce company outlined a plan to reward six executives,
including Chief Executive Mike Fitzsimmons, with bonuses tied to
the success of its pending sale.
The report related that Delivery Agent said the bonuses will be
granted "only upon the successful closing of a sale or sales of
Delivery Agent's assets, and, therefore, are directly linked to
results."
At a minimum, executives, such as Chief Financial Officer Jeff
Hagan and President of E-Commerce Peter Lai, will be eligible for
bonuses if a winning bidder pays enough to satisfy Hillair's debts
plus an extra $2 million, the report further related. If winning
bidders offer more than that, the bonus payments will increase, for
a maximum payout of $3 million, the report said.
The U.S. Bankruptcy Court in Wilmington, Del. is expected to review
the bonuses at a Nov. 17 hearing, the report noted. Any objection
to the pay proposal plan must be filed with the court by Nov. 10,
the report added.
About Delivery Agent
Headquartered in San Francisco, California, Delivery Agent, Inc.,
turns audiences into revenue generating customers for brands,
device manufacturers, and media companies worldwide. It offers
ShopTV, a technology that allows audiences to engage with and
transact directly from advertisements and television shows through
Web, mobile, and advanced television applications; a cloud-based
shopping platform, which enables omni-channel commerce for its
clients with simplicity; eCommerce platform for omni-channel
shopping; relevant and personalized product offers to viewers
based on the content they are watching with the help of contextual
database; and advertising solutions.
Delivery Agent, Inc., and affiliates MusicToday, LLC, Clean Fun
Promotional Marketing, Inc., and Shop the Shows, LLC, sought
Chapter 11 protection (Bankr. D. Del. Lead Case No. 16-12051) on
Sept. 15, 2016.
The cases are assigned to Judge Laurie Selber Silverstein.
The Debtors hired Pachulski Stang Ziehl & Jones LLP as local
Counsel; Keller & Benvenutti LLP as general counsel; Arch & Beam
Global, LLC as financial advisor; and Epiq Bankruptcy Solutions,
LLC, as claims and noticing agent.
Andrew R. Vara, the Acting U.S. Trustee for Region 3, on Sept. 29
appointed seven creditors of Delivery Agent, Inc., to serve on the
official committee of unsecured creditors.
DIAMOND TANK: Reorganization Plan Set for Dec. 5 Confirmation
-------------------------------------------------------------
Diamond Tank Rentals, Inc., TNT Forklifts, Inc., and Diamond T
Industries LLC, won approval of their Amended Disclosure Statement
dated Oct. 20, 2016, and are now slated to seek confirmation of
their Amended Plan of Reorganization on Dec. 5, 2016.
Judge Russell F. Nelms of the U.S. Bankruptcy Court for the
Northern District of Teas ordered that:
A. The Amended Disclosure Statement filed by the Debtor is
approved.
B. Nov. 30, 2016 is fixed as the last day for filing and serving
pursuant to Rule 3020(b)(1) written acceptances or rejections of
the Plan in the form of a ballot. One copy of the ballot will be
returned on or before said date to counsel of record, Eric A.
Liepins, 12770 Coit Road, Suite 1100, Dallas, TX.
C. Dec. 5, 2016, at 9:30 a.m., is fixed for the hearing on
Confirmation of the Plan in the Courtroom of the Honorable Russell
F Nelms, 501 Tenth Street, 2nd Fort Worth, Texas.
D. Nov. 30, 2016, is fixed as the last day for filing and
serving pursuant to Fed. R. Bankr. P. 3020(b)(1) written objections
to confirmation of the Plan.
Reorganization Plan
As reported in the TCR on Oct. 31, 2016, the Debtors filed with the
U.S. Bankruptcy Court for the Northern District of Texas, Fort
Worth Division, an Amended Disclosure Statement, which describes a
Chapter 11 Plan that proposes to restructure the Debtor's
promissory notes with Security Bank.
The Debtor's Note #1, with an outstanding balance of $1,818,386, as
of the Petition Date, will be paid in full based on a 120-month
amortization. The Debtor will make 47 equal monthly payments with
interest at the rate of 5.5% per annum commencing on the Effective
Date, and one payment on the 48th month following the Effective
Date of all outstanding principal and interest. Based on the Proof
of Claim filed by Security Bank on Note #1 the monthly payment will
be approximately $19,740.
Note #2, in the amount of $319,142, will be restructured and the
Debtors will pay the amount of the Note #2 indebtedness in full on
or before the Effective Date through the sale of the real property
which secures Note #2.
Note #3 in the amount of $1,728,053, will be restructured and the
Debtors will pay the amount of the Note #3 indebtedness in full
based upon a 300-month amortization. The Debtor will make 47 equal
monthly payments with interest at the rate of 5.9% per annum
commencing on the Effective Date, and one payment on the 48th month
following the Effective Date of all outstanding principal and
interest. Based upon the Proof of Claim filed by Security Bank on
Note #3 the monthly payment will be approximately $11,030.
Note #4 in the amount of $187,346 will be restructured and the
Debtors will pay the amount of the Note #4 indebtedness in full
based upon a 300-month amortization. The Debtor will make 47 equal
monthly payments with interest at the rate of 5.66% per annum
commencing on the Effective Date, and one payment on the 48th month
following the Effective Date of all outstanding principal and
interest. Based upon the Proof of Claim filed by Security Bank of
Note #4 the monthly payment will be approximately $1,170.
Note #5 in the amount of $6,027,002 will be restructured and the
Debtors will pay the amount of the Note #5 indebtedness in full
based upon a 120-month amortization. The Debtor will make 47 equal
monthly payments with interest at the rate of 5.04% per annum
commencing on the Effective Date, and one payment on the 48th month
following the Effective Date of all outstanding principal and
interest. Based upon the Proof of Claim filed by Security Bank on
Note #5 and the payments received postpetition, the monthly payment
will be approximately $59,981.
Holders of Allowed Claims of Non-Insider Unsecured Creditors will
share pro-rata in the Unsecured Creditor's Pool. The Debtor will
pay an equal amount necessary each month for a period of 60 months
into the Unsecured Creditors Pool to provide all Allowed Class 8
Creditors are paid in full. The Unsecured Creditors will be paid
quarterly on the last day of each calender quarter. Payments to
the Unsecured Creditors will commence on the last day of the first
full calender quarter after the Effective Date. The Debtor may
pre-pay the Unsecured Creditors at any time. Based upon the
Debtor's Schedules that Class 8 Claims will be approximately
$450,000 making the monthly payment approximately $7,500.
A full-text copy of the Amended Disclosure Statement dated October
20, 2016, is available at:
http://bankrupt.com/misc/txnb16-41547-146.pdf
About Diamond Tank Rentals
Diamond Tank Rentals Inc., Diamond T. Industries LLC and TNT
Forklifts Inc. sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. N.D. Tex. Lead Case No. 16-41547) on April 15, 2016.
The petitions were signed by Roger Turner, president. The Debtors
are represented by Eric A. Liepins, Esq., at Eric A. Liepins, P.C.
The cases are assigned to Judge Russell F. Nelms. The Debtor
estimated assets at $0 to $50,000 and liabilities at $1 million to
$10 million at the time of the filing.
DIRECTBUY HOLDINGS: Case Summary & 40 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor affiliates filing separate Chapter 11 bankruptcy petitions:
Debtor Case No.
------ --------
DirectBuy Holdings, Inc. 16-12435
8450 Broadway
Merrillville, IN 46410
United Consumers Club, Incorporated 16-12436
DirectBuy, Inc. 16-12437
Beta Finance Company, Inc. 16-12438
UCC Distribution, Inc. 16-12439
U.C.C. Trading Corporation 16-12440
National Management Corporation 16-12441
UCC of Canada, Inc. 16-12442
Type of Business: Operates a members-only buying club, offering
savings, selection and service to 178,431
members in the United States and Canada.
Chapter 11 Petition Date: November 1, 2016
Court: United States Bankruptcy Court
District of Delaware (Delaware)
Judge: Hon. Christopher S. Sontchi
Debtors' Counsel: Marion M. Quirk, Esq.
Nicholas J. Brannick, Esq.
COLE SCHOTZ P.C.
500 Delaware Avenue, Suite 1410
Wilmington, DE 19801
Tel: 302.652.3131
Fax: 302.652.3117
E-mail: mquirk@coleschotz.com
nbrannick@coleschotz.com
- and -
Michael D. Sirota, Esq.
Ilana Volkov, Esq.
Felice R. Yudkin, Esq.
COLE SCHOTZ P.C.
25 Main Street
Hackensack, NJ 07602-0800
Tel: 201.489.3000
Fax: 201.489.1536
E-mail: msirota@coleschotz.com
ivolkov@coleschotz.com
fyudkin@coleschotz.com
Debtors'
Financial
Advisor: CARL MARKS & CO.
Debtors'
Noticing
& Claims
Agent: PRIME CLERK LLC
Estimated Assets: $100 million to $500 million
Estimated Debts: $100 million to $500 million
The petitions were signed by Michael P. Bornhorst, chief executive
officer.
Debtors' Consolidated List of 40 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
The Bank of New York Unsecured Notes $10,320,900
Mellon Trust Company, N.A.,
as Trustee and Collateral Agent
BNY Mellon Corporate Trust
2 N. LaSalle Street, Suite 1020
Chicago, IL 60602
Renee Maron
Tel: 312-827-8638
Fax: 312-827-8542
Email: renee.maron@bnymellon.com
Norcraft Company Trade Debt $1,873,137
NW 5683, PO Box 1450
Minneapolis, MN 55485-5683
Cheryl Solosky
Tel: 888-835-0272
Fax: 651-234-3398
Email: cheryl.solosky@norcraftcompanies.com
Signature By Omega Trade Debt $262,768
Email: jschepers@masterbrand.com
Kohler Trade Debt $254,491
Email: martina.mays@ferguson.com
Whirlpool Trade Debt $237,599
Email: allison_vanderveld@whirlpool.com
Daltile - Zone 6 Trade Debt $219,129
Email: Cindy.Callaway@Daltile.com
RKB Distributors Trade Debt $170,026
Email: rkbddirect@comcast.net
Almo Fulfillment Services LLC Trade Debt $135,500
Email: jthorson@almo.com
US Floors Trade Debt $133,425
Email: wsmith@usfloorsllc.com
General Electric Trade Debt $129,711
Email: robert.swank@ge.com
Fire Magic Trade Debt $123,626
Email: derekl@cuiheat.com
Parker House International Trade Debt $116,355
Email: patricia@parker-house.com
Hooker Furniture Trade Debt $113,422
Email: LStephen@hookerfurniture.com
Levolor Trade Debt $108,085
Email: creditdept@newellco.com
Emser Tile - Zone A Trade Debt $104,636
Email: barrydambrowski@emser.com
HM Wallace Incorporated Trade Debt $92,054
Email: j.morales@hmwallace.com
Rowe Furniture Trade Debt $89,467
Email: sherry.lozano@rowefurniture.com
Fairmont Designs Bath Cabinetry Trade Debt $84,972
Email: dnilsson@fairmontdesigns.com
Sony Electronics Trade Debt $80,282
Email: cecredit@techdata.com
Abbyson Living Trade Debt $78,368
Email: vida@abbysonliving.com
Brookwood Cabinetry Trade Debt $77,496
Email: tami.snaza@norcraftcompanies.com
Comfortaire Corporation Trade Debt $76,964
Email: mulrich@comfortaire.com
Diamond - Option 1 Trade Debt $75,104
Email: jschepers@masterbrand.com
American Leather Trade Debt $74,195
Email: ravyn.martinez@americanleather.com
Armstrong Laminate Flooring Trade Debt $72,375
Email: kavatter@armstrongflooring.com
Ultracraft Trade Debt $70,054
Email: janet.lowe@norcraftcompanies.com
Simmons Company Trade Debt $69,254
Email: gshelnutt@sertasimmons.com
Aico Trade Debt $69,237
Email: liz.r@amini.com
Kichler Lighting Trade Debt $68,526
Email: abederman@kichler.com
Homelegance Trade Debt $64,611
Email: AR@top-line.com
Homerwood Hardwood Flooring Trade Debt $64,292
Email: dalward@homerwood.com
Philadelphia Carpet - Div of Shaw Trade Debt $62,846
Email: chris.l.hall@shawinc.com
EuroChef U.S.A., Inc. Trade Debt $62,473
Email: reginas@eurochefusa.com
Kincaid Trade Debt $61,218
Email: alyssa.niese@la-z-boy.com
Palliser Upholstery Trade Debt $55,593
Email: craabel@palliser.ca
Liberty Furniture Industries Trade Debt $54,695
Email: stephaniepaxson@libertyfurn.com
Four Hands Accent Furniture Trade Debt $53,342
Email: pobrien@fourhands.com
Tumi, Inc. Trade Debt $51,694
Email: awilliamson@tumi.com
O.W. Lee Co. Inc. Trade Debt $48,286
Email: BMontoya@owlee.com
Orourke Sales Company Trade Debt $47,230
Email: blyon@orourkesales.com
DIRECTBUY HOLDINGS: Files for Ch. 11 Bankruptcy to Pursue Sale
--------------------------------------------------------------
DirectBuy Holdings, Inc., along with its seven affiliates, has
filed a voluntary petition under Chapter 11 of the Bankruptcy Code,
estimating assets and liabilities in the range of $100 million to
$500 million.
The Chapter 11 cases (Bankr. D. Del. Case Nos. 16-12435 to
16-12442) were commenced on Nov. 1, 2016. Judge Christopher S.
Sontchi has been assigned the cases.
The Debtors sought bankruptcy protection to restructure their
balance sheet through a going-concern sale of their business assets
pursuant to Section 363 of the Bankruptcy Code. According to the
Debtors, their operations (while financially sound) are
insufficient to sustain existing levels of debt or attract a
sufficient amount of refinancing.
Beginning February of 2016, the Debtors, through their financial
advisor Carl Marks Advisory Group LLC, ran a marketing process,
facilitated due diligence and engaged in discussions with potential
buyers. Despite these efforts, the Debtors did not receive any
formal bids from potential buyers.
The Debtors also engaged in discussions with their existing
stakeholders about a possible restructuring of their debt or credit
bid to purchase their assets resulting in their entry into a
purchase agreement.
On Nov. 1, 2016, the Debtors and Derby SPV, Inc., entered into the
Purchase Agreement pursuant to which Derby will acquire the
Debtors' business for $10 million, plus assumption of specified
liabilities, subject to higher or better bids at an auction. The
Debtors propose that the deadline to submit bids be fixed at 5:00
p.m. on Jan. 5, 2017.
Headquartered in Merrillville, Indiana, the Debtors operate a
members-only buying club, offering savings, selection and service
to their 178,431 members in the United States and Canada. The
Debtors provide their members with home furnishings that includes
free at-home design consultation, digital or over-the-phone project
support, seven days per week access to call center support, and
"white globe" delivery services. As of the Petition Date, the
Debtors have approximately 403 employees.
DirectBuy Holdings is owned by Bayside DirectBuy, LLC (69.41%),
Pennant Park Investment Corporation (10.47%), Solar Capital, Ltd.
(7.70%) and various other entities.
As disclosed in the bankruptcy filing, the Debtors have
historically offered their members access to merchandise through
franchised locations. However, as the companies' brick and mortar
model struggled during the last seven years, the Debtors
transitioned into the e-commerce platform.
The Debtors generate revenues from membership sales and renewals,
shipping and handling fees, advertising, and early payment
discounts from vendors. For the fiscal years ended July 31, 2015,
and July 31, 2016, the Debtors generated $70.395 million and
$56.352 million in revenue, respectively, as disclosed in Court
papers.
As of the Petition Date, the total principal and accrued interest
outstanding on the Debtors' Toggle Notes was $144,678,183 and the
principal amount outstanding on the Debtors' Holdover Notes was
$10,320,900, according to Court documents.
The Debtors estimate that they owe trade creditors and other
unsecured creditors approximately $30,000,000.
As of the Petition Date, the Debtors were parties to 15 lawsuits in
the states courts in Indiana, Ohio, Colorado and Florida, United
States Bankruptcy Court for the District of Arizona and the United
States District Courts for the Northern District of Indiana and the
Western District of Washington.
The Debtors have hired Cole Schotz P.C., as bankruptcy counsel;
Carl Marks & Co., as financial advisor; and Prime Clerk LLC, as
claims and noticing agent.
Contemporaneously with the filing of their Chapter 11 petitions,
the Debtors have filed certain first day motions seeking permission
to, among other things, use cash collateral, use existing cash
management system, pay employee obligations, and prohibit utility
companies from discontinuing services.
Separately, 1103743 Ontario Inc., Buyers Group of Mississauga Inc.
and Marlexa Buying Power Inc., the Debtors' Canadian subsidiaries
that are not debtors in the Chapter 11 cases, commenced a proposal
proceedings on Nov. 2, 2016, under the Bankruptcy and Insolvency
Act to obtain order from the Ontario Superior Court of Justice
approving the proposals to be made by them to their respective
creditors under Part III of the BIA.
A full-text copy of Michael P. Bornhorst's declaration in support
of the First Day Motions is available for free at:
http://bankrupt.com/misc/14_DIRECTBUY_Affidavit.pdf
DIVERSE ENERGY: Lean Tech Plan Set for Dec. 7 Confirmation
----------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas on
Oct. 19, 2016, held a hearing to consider approval of the First
Amended Disclosure Statement with respect to the Chapter 11 Plan of
debtor Diverse Energy Systems, LLC, d/b/a Lean Technologies LLC
Having determined that the Disclosure Statement contains adequate
information as such term is defined in Sec. 1125 of the Bankruptcy
Code, on Oct. 20, 2016, Judge Karen K. Brown ordered that:
1. The Disclosure Statement is approved as containing adequate
information;
2. The Debtor is authorized to distribute the Plan and
Disclosure Statement to creditors and parties-in-interest and to
solicit acceptances of the Plan from parties entitled to vote
thereon;
3. The hearing to consider confirmation of the Plan will begin
on Dec. 7, at 2:00 p.m. before the Honorable Karen K. Brown.
4. Any creditor or party-in-interest desiring to object to
confirmation of the Plan must do so pursuant to a written objection
which must be filed with the Clerk of the Court no later than 5:00
p.m. prevailing Central Time on Dec. 2, 2016. A copy of such
objection will be concurrently served on counsel for the Debtor via
e-mail or fax, with a hard copy to be deposited in the U.S. mail
addressed to counsel for the Debtor at this address:
Bobby Forshey
Clarke V. Rogers
FORSHEY & PROSTOK, L.L.P.
777 Main Street, Suite 1290
Fort Worth, Texas 76102
E-mail: bforshey@forsheyprostok.com
crogers@forsheyprostok.com
5. In order to be counted, ballots to accept or reject the Plan
must be received by counsel for the Debtor no later than 5:00 p.m.
prevailing Central Time on Dec. 2, 2016, at this address:
FORSHEY & PROSTOK, L.L.P.
Attn: Linda Breedlove
777 Main Street, Suite 1290
Fort Worth, Texas 76102
Fax: (817) 877-4151
Plan of Liquidation
Lean Technologies has filed a Chapter 11 Plan that provides for the
liquidation of the remaining assets of the company and the
distribution of the proceeds to creditors. Each unsecured creditor
will receive its pro rata share of net cash, all in one or more
distributions made from time to time as may be determined by the
liquidating agent. Recoveries for unsecured creditors, which
assert a total of $28 million in claims, will depend largely on how
much Diverse Energy will recover from the lawsuit it filed against
David Sloan and the law firm of Sloan & Moyer, LLP. A copy of the
First Amended Disclosure Statement dated Sept. 30,
2016, is available at:
http://bankrupt.com/misc/txsb15-34736-512.pdf
About Diverse Energy, et al.
Diverse Energy Systems, LLC, Scribner Industries, Inc., Diverse
Energy Systems, LLC (d/b/a Lean Technologies, LLC) and Rouly Inc.,
filed Chapter 11 bankruptcy petitions (Bankr. S.D. Tex. Lead Case
No. 15-34736 to 15-34739) on Sept. 7, 2015. The jointly
administered cases have been assigned to Judge Karen K. Brown.
Diverse provided integrated solution platforms for upstream and
midstream customers in the natural gas production, oil production,
and water treatment industries. On Oct. 5, 2015, Diverse disclosed
total assets of $15,836,103 and total liabilities of $3,261,959.
Forshey Prostok LLP serves as the Debtors' counsel. SSG Advisors,
LLC is the Debtors' financial and restructuring advisor. The
Debtors tapped Gordon Brothers Asset Advisors, LLC as appraiser.
Diverse is the indirect parent of ITS Engineered Systems, Inc. ITS
filed a voluntary petition for relief under Chapter 11 of the
Bankruptcy Code on April 17, 2015. ITS's bankruptcy case is
currently pending in this Court as Case No. 15-32145.
* * *
The Debtors closed on the sale of certain assets to Cimarron
Acquisition Co. on Jan. 29, 2016.
As part of the bankruptcy cases, the Debtors sold substantially all
of their assets to Cimarron Acquisition Co. n/k/a CE Diverse Energy
Co. This sale was approved by Court order dated Jan. 22, 2016.
Thus, the Debtors are no longer operating as a going concern.
DIVERSE ENERGY: Rouly Plan Set for Dec. 7 Confirmation
------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas on
Oct. 19, 2016, held a hearing to consider approval of the
Disclosure Statement with respect to the Chapter 11 Plan of debtor
Rouly Inc.
Having determined that the Disclosure Statement contains adequate
information as such term is defined in Sec. 1125 of the Bankruptcy
Code, on Oct. 20, 2016, Judge Karen K. Brown ordered that:
1. The Disclosure Statement is approved as containing adequate
information;
2. The Debtor is authorized to distribute the Plan and
Disclosure Statement to creditors and parties-in-interest and to
solicit acceptances of the Plan from parties entitled to vote
thereon;
3. The hearing to consider confirmation of the Plan will begin
on Dec. 7, at 2:00 p.m. before the Honorable Karen K. Brown.
4. Any creditor or party-in-interest desiring to object to
confirmation of the Plan must do so pursuant to a written objection
which must be filed with the Clerk of the Court no later than 5:00
p.m. prevailing Central Time on Dec. 2, 2016. A copy of such
objection will be concurrently served on counsel for the Debtor via
e-mail or fax, with a hard copy to be deposited in the U.S. mail
addressed to counsel for the Debtor at this address:
Bobby Forshey
Clarke V. Rogers
FORSHEY & PROSTOK, L.L.P.
777 Main Street, Suite 1290
Fort Worth, Texas 76102
E-mail: bforshey@forsheyprostok.com
crogers@forsheyprostok.com
5. In order to be counted, ballots to accept or reject the Plan
must be received by counsel for the Debtor no later than 5:00 p.m.
prevailing Central Time on Dec. 2, 2016, at this address:
FORSHEY & PROSTOK, L.L.P.
Attn: Linda Breedlove
777 Main Street, Suite 1290
Fort Worth, Texas 76102
Fax: (817) 877-4151
Liquidation Plan
Rouly's liquidation plan provides that general unsecured creditors
owed $500,000 are slated to have a 20 percent recovery. Holders of
insider claims totaling $2,501,000 will have a 5% recovery. All
interests in the Debtor will be extinguished.
The Debtor has filed the Plan to provide for the orderly
liquidation of its remaining assets and the distribution of the
proceeds to creditors in accordance with the provisions of the
Bankruptcy Code. The Debtor's primary remaining Asset is property
identified as the "Rouly Real Property". The Debtor has retained a
real estate broker to market the Rouly Real Property for sale. The
proceeds from this sale, along with the remaining cash on hand in
the Debtor's estate, will be used to fund the distributions to
Creditors under the terms of the Plan.
The Rouly Real Property is currently listed for sale for a purchase
price of $375,000.
A copy of Rouly's Disclosure Statement is available for free at:
http://bankrupt.com/misc/txsb15-34736_485_DS_Rouly.pdf
About Diverse Energy, et al.
Diverse Energy Systems, LLC, Scribner Industries, Inc., Diverse
Energy Systems, LLC (d/b/a Lean Technologies, LLC) and Rouly Inc.,
filed Chapter 11 bankruptcy petitions (Bankr. S.D. Tex. Lead Case
No. 15-34736 to 15-34739) on Sept. 7, 2015. The jointly
administered cases have been assigned to Judge Karen K. Brown.
Diverse provided integrated solution platforms for upstream and
midstream customers in the natural gas production, oil production,
and water treatment industries. On Oct. 5, 2015, Diverse disclosed
total assets of $15,836,103 and total liabilities of $3,261,959.
Forshey Prostok LLP serves as the Debtors' counsel. SSG Advisors,
LLC is the Debtors' financial and restructuring advisor. The
Debtors tapped Gordon Brothers Asset Advisors, LLC as appraiser.
Diverse is the indirect parent of ITS Engineered Systems, Inc. ITS
filed a voluntary petition for relief under Chapter 11 of the
Bankruptcy Code on April 17, 2015. ITS's bankruptcy case is
currently pending in this Court as Case No. 15-32145.
* * *
The Debtors closed on the sale of certain assets to Cimarron
Acquisition Co. on Jan. 29, 2016.
As part of the bankruptcy cases, the Debtors sold substantially all
of their assets to Cimarron Acquisition Co. n/k/a CE Diverse Energy
Co. This sale was approved by Court order dated Jan. 22, 2016.
Thus, the Debtors are no longer operating as a going concern.
ENVIGO HOLDINGS: S&P Assigns 'B-' CCR & Rates Revolver Debt 'B+'
----------------------------------------------------------------
S&P Global Ratings said that it assigned its 'B-' corporate credit
rating to Envigo Holdings Inc. The outlook is stable.
At the same time, S&P assigned a 'B+' issue-level rating and '1'
recovery rating to Envigo's first-lien revolver and bank loan. The
'1' recovery rating indicates expectations for very high (90%-100%
range) recovery in the event of a default.
S&P also assigned a 'CCC' issue-level rating and '6' recovery
rating to Envigo's second-lien debt. The '6' recovery rating
indicates expectations of negligible (0%-10%) recovery in the event
of a default.
Envigo is a provider of contract research services and research
models related primarily to the safety testing of pharmaceuticals,
chemicals, and agricultural products.
The rating on Envigo reflects the company's adjusted debt leverage
of 6x-7x and its position as a top-three player in both contract
research services and research models. S&P believes that Envigo's
discretionary cash flow will be negligible in 2016, with the
potential for a small cash flow deficit, mainly because of
restructuring and other temporary costs and some cash-conversion
weakness. In coming years, S&P expects the company to have
modestly positive cash flows, consistent with those of 'B-' peers.
S&P views testing for safety, similar research services, and the
related breeding of animals as critical inputs to the
pharmaceutical, chemical, and agriculture industries as well as
academic research organizations. S&P believes that the positive
pharmaceutical funding and development environment and regulatory
requirements for chemical safety testing provide steady demand for
the top global non-clinical CROs. S&P sees Envigo's top-three
position in both of its segments as important to its stability, as
its top customers tend to maintain relationships with multiple
service providers but show a preference for global, large,
established companies. S&P believes the company's customer
concentration is similar to or less than that of other clinical
CROs.
S&P's rating on Envigo is limited by its position as a niche
service provider to much larger companies with significant
bargaining power. The company is also about one-third the size of
the industry leader. S&P believes non-clinical CROs' business is
more cyclical than that of clinical CROs because late-phase
clinical trials, which are more closely tied to revenue creation,
are likely to be prioritized in a downturn. In addition, the
company has a limited track record under its current strategy,
having rebranded under the Envigo name only about a year ago.
S&P believes that leverage will be about 6.5x at the close of the
refinancing transaction and will decline to below 6x in 2017 due to
EBITDA expansion. This is despite a $5 million accretion to debt
from the paid-in-kind (PIK) notes. S&P views any decline in
leverage below 5x as temporary because it expects the company to
prioritize acquisitions and shareholder dividends over debt
repayment due to the controlling position of the company's
financial sponsors. S&P believes that the company will be able to
cover a small cash flow deficit from cash on hand and its $10
million revolver.
S&P's main assumptions are:
-- CROs will grow by 7%-8%, on average, based on trends in
pharmaceutical R&D and outsourcing penetration.
-- Envigo will grow more slowly than the overall group because
its non-clinical services and animal models are more of a
commodity than clinical research services.
-- Demand for research models will be flat to declining and
competition in the non-clinical contract research sector
will be heavy and growing because of increased chemical
testing and pharmaceutical outsourcing.
-- Revenue growth in the low single digits from volume and
pricing growth in the contract research segment and modest
price increases that offset flat to negative volume growth
in the research model segment.
-- Gross margins that improve in the next year from the fall-
off of one-time expenses and an organizational focus on
efficiency.
-- Selling, general, and administrative (SG&A) expenses will
decline significantly in 2016 from integration efforts but
will grow with revenue in the following years.
-- Adjusted EBITDA margins of about 20% in the next year,
staying in the low-20% range in subsequent years.
-- Working capital as a use of cash in 2016 from pension
payments and weak cash conversion, which S&P expects to
improve in 2017.
-- Capital expenditures of about $20 million in 2016, growing
with revenue.
The stable outlook reflects S&P's expectation for low-single-digit
organic growth in 2017 and 2018 and adjusted EBITDA margins in the
low-20% area. S&P expects the company will maintain leverage above
5x because its financial sponsors will likely favor acquisitions
and shareholder returns over permanent debt reduction. S&P
believes that Envigo will generate negligible cash flow in the next
year, but S&P do expect some contract research sales growth and
efficiencies across the business.
S&P could consider a downgrade if, in the next year, adjusted
EBITDA falls to an expected run rate of about $60 million and
leverage increases to the 9x area, consistent with a year-over-year
revenue decline in the mid-single digits and a decline in adjusted
EBITDA margins of about 300 basis points (bps) from S&P's
expectations for about 21%. This could occur if pharmaceutical
companies shift more business to the two largest non-clinical CROs
and if facilities from the Harlan acquisition prove less profitable
than expected. In this scenario, S&P believes that the capital
structure would be unsustainable.
In addition, S&P believes the company has limited capacity for a
debt-funded acquisition, given its limited cash flows, its cost of
capital, and current acquisition multiples above 10x in the CRO
industry.
S&P could consider upgrading Envigo if the company outperforms
S&P's expectations, leading S&P to believe it will generate
stronger discretionary cash flows, in the $15 million to $20
million range. This scenario could unfold if sales in contract
research grow faster than expected due to greater brand recognition
in Europe and an increase in mandated safety testing elsewhere,
like in the U.S. In addition, higher discretionary cash flow could
be achieved from cost cutting in the research models business to
bring margins closer to those of competitors, with an
outperformance of about 300 bps-400 bps translating to adjusted
EBITDA margins in the mid-20% area. Cash flow could also be
boosted by improved working capital management.
ENVIGO LABORATORIES: Moody's Assigns Caa1 CFR; Outlook Stable
-------------------------------------------------------------
Moody's Investors Service assigned a Caa1 Corporate Family Rating
and Caa1-PD Probability of Default Rating to Envigo Laboratories,
Inc. Moody's also assigned a B2 rating to Envigo's first lien
senior secured credit facilities and a Caa2 to its second lien
credit facility. The proceeds of a new $130 million first lien
term loan will be used to refinance existing senior secured notes.
The rating outlook is stable. This is the first time Moody's has
rated Envigo.
Ratings assigned:
Envigo Laboratories, Inc.
Corporate Family Rating at Caa1
Probability of Default Rating at Caa1-PD
$10 million Senior Secured First Lien Revolver due 2021 at B2
(LGD2)
$130 million Senior Secured First Lien Term Loan due 2021 at B2
(LGD2)
$150 million Senior Secured First Lien Term Loan due 2020 at B2
(LGD2)
$130 million Senior Secured Second Lien Term Loan due 2020 at
Caa2 (LGD5)
The outlook is stable
RATINGS RATIONALE
The Caa1 rating reflects Envigo's very high financial leverage,
with pro forma adjusted debt/EBITDA of over 8.0x for the twelve
months ended June 30, 2016. The rating also reflects Envigo's weak
coverage of fixed costs, including interest, capital expenditures
and pension payments. Further, if not refinanced in the next 18
months, Envigo's interest costs will step up considerably, putting
further pressure on the company's ability to generate consistently
positive free cash flow. The ratings are also constrained by the
company's significant concentration of revenue and profits in the
UK, exposing the company to volatility associated with currency
fluctuations and economic risk associated with Brexit. The vast
majority of the company's debt will be denominated in US dollars,
whereas more than half its profits are denominated in British
pounds. The ratings are supported by high barriers to entry and
the defensible nature of the business model. In addition, going
forward, Envigo should benefit from restructuring programs that
have been undertaken over the past several years.
The rating outlook is stable, reflecting Moody's view that earnings
growth will be challenged due, in part, to currency headwinds
(assuming today's exchange rate) over the next 12 months. Further,
while Moody's expects liquidity will be adequate, it may not be
ample enough to absorb an unexpected operating setback.
Moody's could upgrade the ratings if Envigo's earnings and cash
flow benefit from recent restructuring activities. If the company
demonstrates a track record of earnings growth such that Moody's
expects adjusted debt to EBITDA to approach 7.0 times and free cash
flow is positive enough to absorb the scheduled step-up in interest
expense, then the ratings could be upgraded.
Moody's could downgrade the ratings if liquidity deteriorates or if
the company fails to sustainably grow earnings from current
levels.
The principal methodology used in these ratings was that for the
"Business and Consumer Service Industry" published in October
2016.
Headquartered in New Jersey, Envigo is an early stage contract
research organization. The company provides non-clinical safety
assessment services. It also provides laboratory animals (rats and
mice) for use in research by the pharmaceutical, chemical and crop
protection industries, as well as academic and governmental
institutions. Net revenue for the twelve months ended June 30,
2016, approximated $437 million.
EPICENTER PARTNERS: Unsecureds to Get 100%, Plus 5% Interest
------------------------------------------------------------
Epicenter Partners L.L.C., and Gray Meyer Fannin, LLC, filed a
first amended Chapter 11 plan of reorganization and accompanying
disclosure statement, which propose that holders of Allowed
Undisputed General Unsecured Claims will receive 100% of their
Allowed Claims paid as follows: Holders of Undisputed General
Unsecured Claims will receive a $400,000 cash payment distributed
to such Holders on a Pro Rata basis on the Effective Date.
Beginning 30 days after the Effective Date, the remaining balance
of the Undisputed General Unsecured Claims will be paid through
eight quarterly payments at 5% simple interest per annum, with
additional payments being made from the Creditors Trust Proceeds,
if any, as and when received. Any payments (if any) made from the
Creditors Trust will first be applied to accrued interest, and
thereafter to reduce the amounts otherwise due to Class 5A Claims.
No payments will be made on account of the Disputed General
Unsecured Claims until the time that the Disputed General Unsecured
Claims become Allowed Claims. If, and when, the Disputed General
Unsecured Claims become Allowed Claims pursuant to a Final Order,
the Disputed General Unsecured Claims will be paid through 36 fully
amortized monthly payments at four percent simple interest per
annum beginning on the 15th day of the first month after entry of
the Final Order allowing those Claims.
The Class 5C Related Party Unsecured Claims will receive payment of
their Allowed Class 5C Claims only after all Class 5A Claims and 5B
Claims (to the extent Allowed) are paid in full.
All payments under the Plan which are due on the Effective Date
will be funded by : (1) the Plan Contribution to be contributed by
the Plan Sponsor, (2) the Property Development Funds, and (3) the
Creditors Trust Proceeds if and when they are realized and
collected.
A full-text copy of the First Amended Disclosure Statement dated
October 28, 2016, is available at:
http://bankrupt.com/misc/azb16-05493-208.pdf
About Epicenter Partners
Epicenter Partners LLC and Gray Meyer Fannin LLC sought protection
under Chapter 11 of the Bankruptcy Code (Bankr. D. Ariz. Lead Case
No. 16-05493) on May 16, 2016. GMF came into existence in 2001.
It was originally formed for the purpose of providing development
services for affiliates. Epicenter came into existence in 2004. It
was formed for the purposes of acquiring, managing, selling or
holding land for investment. Both Debtors are fully owned by
Gray/Western Development Company and managed, pursuant to that
entity, by Bruce Gray.
The Debtors tapped Thomas J. Salerno, Esq., at Stinson Leonard
Street, LLP, as their Chapter 11 counsel.
Epicenter Partners disclosed $143,212,665 in assets and $66,913,279
in liabilities.
The Office of the U.S. Trustee on June 15, 2016, appointed five
creditors of Epicenter Partners LLC and Gray Meyer Fannin LLC to
serve on the official committee of unsecured creditors. The
Committee is represented by Michael W. Carmel, Ltd., as counsel.
ESPLANADE HL: Hires Goldstein & McClintock as Counsel
-----------------------------------------------------
Esplanade HL, LLC and its debtor-affiliates seek authorization from
the Hon. Carol A. Doyle of the U.S. Bankruptcy Court for the
Northern District of Illinois to employ Goldstein & McClintock LLLP
as counsel, nunc pro tunc to the October 17, 2016 petition date.
The Debtors require Goldstein & McClintock to:
(a) advise the Debtors with respect to their powers and duties
as debtors in possession in the continued management and
operation of their businesses;
(b) attend meetings and negotiate with representatives of
creditors and other parties in interest;
(c) take all necessary action to protect and preserve the
Debtors' estates, including prosecuting actions on the
Debtors' behalf, defending any action commenced against the
Debtors, and representing the Debtors' interests in
negotiations concerning all litigation in which the Debtors
are involved, including objections to claims filed against
their estates;
(d) prepare all motions, applications, answers, orders,
reports, and papers necessary to the administration of the
Debtors' estates and their Chapter 11 Cases;
(e) take any necessary action on behalf of the Debtors to
obtain approval of a disclosure statement and confirmation
of the Debtors' plan of reorganization;
(f) represent the Debtors in connection with obtaining use of
cash collateral and postpetition financing;
(g) advise the Debtors in connection with any potential sale of
assets;
(h) appear before the Court, any appellate courts, and the
United States Trustee and protecting the interests of the
Debtors' estates before those courts and the United States
Trustee; and
(i) perform all other necessary legal services to the Debtors
in connection with the Chapter 11 Cases, including, without
limitation, (i) the analysis of the Debtors' leases and
executory contracts and the assumption, rejection, or
assignment thereof, (ii) the analysis of the validity of
liens against the Debtors, and (iii) advice on corporate,
litigation, and other matters.
Goldstein & McClintock will be paid at these hourly rates:
Harold D. Israel, partner $525
Sean P. Williams, associate $285
Senior Professionals $725
Associates $195
Goldstein & McClintock will also be reimbursed for reasonable
out-of-pocket expenses incurred.
Prior to the commencement of these Chapter 11 Cases, Goldstein &
McClintock received a $55,000 retainer from Rotterdam Private
Equities, LLC, the Debtors' management company, in two payments of
$30,000 and $25,000, respectively. Rotterdam is 100% owned by
William Vander Velde III, each of the Debtors' sole member and
manager. Prior to filing, Goldstein & McClintock applied $40,741.50
of its retainer to prepetition fees and expenses and $8,642.88 to
pay the filing fees and other costs associated with the Chapter 11
Cases. The balance of the retainer will be applied to any remaining
prepetition fees and expenses and the balance will be held to be
applied for post-petition fees and expenses as approved by the
Court.
Harold D. Israel, partner of Goldstein & McClintock, assured the
Court that the firm is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code and does not
represent any interest adverse to the Debtors and their estates.
Goldstein & McClintock can be reached at:
Harold D. Israel, Esq.
Sean P. Williams, Esq.
GOLDSTEIN & MCCLINTOCK LLLP
208 South LaSalle Street, Suite 1750
Chicago, IL 60604
Tel: (312) 337-7700
E-mail: haroldi@goldmclaw.com
About Esplanade HL
Esplanade HL, LLC, 2380 Esplanade Drive, LLC, 171 W. Belvidere
Road, LLC, 9501 W. 144th Place, LLC, and Big Rock Ranch, LLC each
filed chapter 11 petitions (Bankr. N.D. Ill. Case No. 16-33008) on
Oct. 17, 2016. The cases are jointly administered.
The Debtors are represented by Harold D. Israel, Esq. and Sean P.
Williams, Esq., at Goldstein & McClintock, LLLP. The case is
assigned to Judge Carol A. Doyle.
ETERNAL ENTERPRISE: Can Use Cash Collateral to Repair Boiler
------------------------------------------------------------
Judge Ann M. Nevins of the U.S. Bankruptcy Court for the District
of Connecticut authorized Eternal Enterprise, Inc. to use Hartford
Holdings, LLC's cash collateral, to pay for the repair of a boiler
on the Debtor's property.
The Debtor owns property located at 252 Laurel Street, Hartford,
Connecticut. The Debtor contended that the Property's boiler had
been damaged and that the Debtor had received quotes to repair the
boiler.
Judge Nevins authorized the Debtor to use cash collateral of up to
$41,820 to pay for repairs on the boiler. She ordered the Debtor
not to use any rebate received from the installation of a high
efficiency boiler, as that rebate will be the cash collateral of
Hartford Holdings.
A full-text copy of the Order, dated October 28, 2016, is available
at http://bankrupt.com/misc/EternalEnterprise2014_1420292_722.pdf
About Eternal Enterprise, Inc.
Eternal Enterprises Inc. -- http://www.eternalenterprises.net/--
filed a Chapter 11 bankruptcy petition (Bankr. D. Conn. Case No.
14-20292) on Feb. 19, 2014. The petition was signed by Vera
Mladen, president. The Debtor owns and manages eight properties
located in Hartford, Conn. Judge Ann M. Nevins presides over the
case. The Debtor is represented by Irene Costello, Esq., at
Shipkevich, PLLC. The Debtor estimated assets at $50,000 to
$100,000 and debt at $1 million to $10 million at the time of the
chapter 11 filing.
EURO BOUTIQUE: Hires BBA Braulio as Accountant
----------------------------------------------
Euro Boutique Auto Group, Inc. seeks authorization from the U.S.
Bankruptcy Court for the District of Puerto Rico to employ BBA
Braulio Hernandez Cifredo as accountant.
The Debtor requires BBA Braulio to:
(a) supervise the accounting affairs of the Debtor in
Possession and its operations;
(b) prepare and review the Debtor's monthly operating reports,
as well as any other accounting reports necessary for the
proper administration of the estate;
(c) prepare and review state and federal income tax and
property tax return, as required by law; and
(d) prepare the projection and all other analysis required for
the proposal and confirmation of a Chapter 11 Plan.
BBA Braulio will be paid at these hourly rates:
Braulio Hernandez Cifredo $75
Support Staff $25
BBA Braulio will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Braulio Hernandez Cifredo assured the Court that the firm is a
"disinterested person" as the term is defined in Section 101(14) of
the Bankruptcy Code and does not represent any interest adverse to
the Debtor and its estate.
BBA Braulio can be reached at:
Braulio A. Hernandez Cifredo
BBA BRAULIO HERNANDEZ CIFREDO
Condominio Valle De Torrimar, 398
Guaynabo, PR 00966
Tel: (787) 525-2350
E-mail: braulioupr@yahoo.com
Euro Boutique Auto Group Inc., filed a Chapter 11 bankruptcy
petition (Bankr. D.P.R. Case No. 16-07887) on September 30, 2016,
disclosing under $1 million in both assets and liabilities. The
Debtor is represented by Jaime Rodriguez Perez, Esq.
EURO BOUTIQUE: Taps Hatillo Law as Counsel
------------------------------------------
Euro Boutique Auto Group, Inc. seeks authorization from the U.S.
Bankruptcy Court for the District of Puerto Rico to employ Hatillo
Law Office, PSC as counsel.
The Debtor requires Hatillo Law to:
(a) give the Debtor legal advice with respect to its powers and
duties as debtor in possession in the continued operation
of its business and management of its property;
(b) prepare on behalf of the Debtor, necessary applications,
answers, orders, reports and other legal papers; and
(c) perform all other legal services for the Debtor as debtor
in possession which may be necessary;
Hatillo Law will be paid at these hourly rates:
Jaime Rodriguez-Perez, attorney $250
Paralegals $50
Law Clerks $50
Hatillo Law will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Hatillo Law received $5,000 retainer from the Debtor.
Jaime Rodriguez Perez, member of Hatillo Law, assured the Court
that the firm is a "disinterested person" as the term is defined in
Section 101(14) of the Bankruptcy Code and does not represent any
interest adverse to the Debtor and its estate.
Hatillo Law can be reached at:
Jaime Rodriguez Perez, Esq.
HATILLO LAW OFFICE, PSC
Urb. Rexville, BB-21 Calle 38
Bayamo, PR 00938
Tel: (787) 797-4174
E-mail: jaime_rodriguez_perez@yahoo.com
jrlawoffice@gmail.com
Euro Boutique Auto Group Inc., filed a Chapter 11 bankruptcy
petition (Bankr. D.P.R. Case No. 16-07887) on September 30, 2016,
disclosing under $1 million in both assets and liabilities. The
Debtor is represented by Jaime Rodriguez Perez, Esq.
EXTREME PLASTICS: Blue Wolf Named Stalking Horse Bidder for Assets
------------------------------------------------------------------
Blue Wolf Capital Partners LLC, the New York-based private equity
firm, on Nov. 1, 2016, disclosed that Blue Wolf Capital Fund III,
L.P., an affiliate of Blue Wolf, has been named by the U.S.
Bankruptcy Court, District of Delaware as the stalking horse bidder
for the assets of Extreme Plastics Plus ("EPP" or the "Company"),
an environmental containment company that primarily serves the
domestic oil and gas industry. Blue Wolf will participate as the
stalking horse bidder in an auction for the assets of EPP to be
held on Nov. 17, 2016.
EPP was founded in 2007, is headquartered in Fairmont, West
Virginia and has additional locations in Pennsylvania, Texas,
Oklahoma and New Mexico. The Company provides a variety of
environmental containment services, including environmental liner
installation, above ground storage tank rentals and composite mat
rentals, to oil and gas companies operating in the Marcellus,
Utica, Eagle Ford, Permian and Mid-Continent basins. Under the
terms of Blue Wolf's stalking horse bid, current EPP management,
including Founder and CEO Bennie Wharry, will remain with the
Company after the closing of the sale.
Impacted by the cyclical decline in the U.S. energy markets, EPP
filed for Chapter 11 bankruptcy protection on January 31, 2016.
Blue Wolf's bid will allow EPP to exit bankruptcy by the end of
2016 with a clean balance sheet and will position the Company for
an eventual oil and gas market recovery. This investment would
mark the first investment from a partnership Blue Wolf entered into
earlier this year with K2 Energy Capital, LLC ("K2") and its
founder, Kevin W. Kuykendall, to pursue energy services
investments.
Adam Blumenthal, Managing Partner of Blue Wolf, said,
"Environmental protection has been and will continue to be critical
to the U.S. oil and gas industry. EPP has an impressive track
record of providing unique and effective environmental containment
solutions to its customers, and these solutions will be in high
demand as the market recovers. We are excited to partner with K2
on this investment and to work alongside EPP's experienced and
capable management team to improve and grow the business."
Bennie Wharry added, "A partnership with Blue Wolf and K2, combined
with a clean balance sheet upon emergence from Chapter 11, will
position EPP for future growth and profitability. Blue Wolf and K2
have the operational capabilities and industry experience needed to
be extremely valuable partners to our Company. They have shown a
strong commitment to dedicating the full range of resources needed
to set EPP up for long-term success."
Kevin Kuykendall added, "We're extremely pleased to be able to
partner with the management team and employees of EPP. The
Company's Founder and CEO, Mr. Bennie Wharry, is one of the most
recognized and respected names in the environmental lining
industry, having enjoyed a 30-plus year career with several
different environmental lining firms. EPP has also built a strong
operational management team including Wade Holt, Vice President of
Southern Operations. With Blue Wolf's support and continued
leadership from Bennie and Wade, we're confident that EPP will
continue to be the dominant force in providing environmental
containment solutions to the oil and gas industry."
About Extreme Plastics Plus
Founded in 2007, privately-held Extreme Plastics Plus, Inc.,
operates an environmental containment business specializing in
providing environmental lining, above ground storage tanks,
composite rig mats, secondary steel wall containment systems, and
closed loop solids control services, primarily for the oil and gas
industry. Extreme Plastics has six facilities in Fairmont, West
Virginia, Tunkhannock, Pennsylvania, St. Clairsville, Ohio, Moore,
Texas, Odessa, Texas, and Oklahoma City, Oklahoma.
The stock of Extreme Plastics is held entirely by EPP Intermediate
Holdings, Inc. The stock of EPP Intermediate is held entirely by
EPP Holding Company, LLC, a non-debtor.
Extreme Plastics, and affiliate EPP Intermediate Holdings, Inc.,
sought Chapter 11 protection (Bankr. D. Del. Lead Case No.
16-10221) on Jan. 31, 2016, as the ongoing decline in the price of
oil and natural gas negatively impacted demand of the Debtors'
services.
Extreme Plastics estimated $10 million to $50 million in assets and
$50 million to $100 million in debt. EPP Intermediate estimated $1
million to $10 million in assets and $50 million to $100 million in
debt.
As of the Petition Date, Extreme Plastics owes $49.5 million under
a secured facility provided by lenders led by Citizens Bank of
Pennsylvania, as agent. The facility is secured by a lien in
substantially all of the Debtors' assets, as well as a pledge of
100% of the equity in Extreme Plastics and EPP Intermediate.
The Debtors tapped Sullivan Hazeltine Allinson LLC as attorneys and
Epiq Bankruptcy Solutions, LLC, as claims and noticing agent.
The U.S. Trustee has appointed five members to the Official
Committee of Unsecured Creditors. The Committee selected Reed
Smith LLP as counsel.
FRAC SPECIALISTS: SSG Acted Co-Investment Banker in Asset Sale
--------------------------------------------------------------
SSG Capital Advisors, LLC, acted as the co-investment banker to
Acid Specialists, LLC, Cement Specialists, LLC and Frac
Specialists, LLC (individually "Acid", "Cement" and "Frac",
respectively; collectively referred to as the "Company")
culminating in the sale of substantially all assets to Encore
Energy Services, LLC ("Encore"). The sale was effectuated through
a Chapter 11 Section 363 process in the U.S. Bankruptcy Court for
the Northern District of Texas. The transaction closed in
September 2016.
Headquartered in Midland, TX, the Company is a provider of well
site services throughout the Permian Basin. The Company's services
include acid and chemical pressure pumping, cementing and hydraulic
fracturing.
From 2012 through 2014 the Company experienced accelerated growth
with strong financial performance fueled by an expansion of its
Frac division. In order to capitalize on strong industry
conditions at the time, the Company invested heavily in equipment
financed through capital lease agreements. The subsequent and
unexpected decline in oil prices ultimately had a significant
downward impact on oilfield service activity. As a result, the
Company's customer base deteriorated and its liquidity became
constrained leading to a Chapter 11 bankruptcy filing in May 2015.
SSG was engaged by the Company to evaluate strategic alternatives
to help restructure the Company's balance sheet.
SSG and the Company considered a number of potential solutions
including operational initiatives, disposal of non-core assets and
divisions, restructuring through a new capital raise and a sale of
the Company in whole or in parts. Based on the prolonged decrease
in oil prices and oilfield activity, it became evident that
operational initiatives and/or new capital would not be feasible
standalone solutions. The Company and its advisors concluded that
the best option was a combination of (1) returning idle and
underutilized equipment to capital lessors, (2) divesting of excess
owned equipment, (3) implementing operational initiatives to reduce
labor and insurance expenses and (4) selling the remaining core
business to a going concern buyer. These initiatives enabled the
Company to maximize value to the estate while preserving jobs and
maintaining customer loyalty.
Other professionals who worked on the transaction include:
-- Jay H. Krasoff of Chiron Financial Group, Inc., co-investment
banker to Acid Specialists, LLC, Cement Specialists, LLC and Frac
Specialists, LLC;
-- Dennis S. Faulkner and D. Brian Crisp of Lain, Faulkner &
Co., P.C., Chapter 11 Trustee to Acid Specialists, LLC, Cement
Specialists, LLC and Frac Specialists, LLC;
-- Mark J. Petrocchi of Griffith, Jay & Michel, LLP, counsel to
the Chapter 11 Trustee;
-- Jeff Prostok and Lynda L. Lankford of ForsheyProstok, L.L.P.,
counsel to Acid Specialists, LLC, Cement Specialists, LLC and Frac
Specialists, LLC;
-- Cary Grossman of Shoreline Capital Advisors, Inc., Chief
Restructuring Officer to Acid Specialists, LLC, Cement Specialists,
LLC and Frac Specialists, LLC; and
-- William L. Roberts of William L. Roberts Financial Advisory
Services, financial advisor to Acid Specialists, LLC, Cement
Specialists, LLC and Frac Specialists, LLC.
About Frac Specialists
Frac Specialists, LLC, Cement Specialists, LLC, and Acid
Specialists, LLC, are oilfield service providers serving the
exploration and production industry within the Permian Basin. Noble
Natural Resources, LLC, Javier Urias and Alex Hinojos collectively
own 100% of the membership interests in the Companies.
The Companies sought Chapter 11 bankruptcy protection (Bankr. N.D.
Tex. Lead Case No. 15-41974), on May 17, 2015. Larry P. Noble
signed the petitions as manager.
On May 27, 2015, the Court directed the joint administration of the
cases. The Debtors disclosed $61,675,313 in assets and $57,982,488
in liabilities.
Judge Michael Lynn presides over the cases. The Debtors tapped
Lynda L. Lankford, Esq., and Jeff P. Prostok, Esq., at Forshey &
Prostok, LLP, as their counsel. The Debtors hired CBRE, Inc., as
their real estate appraiser.
The U.S. Trustee appointed five creditors to serve on an official
committee of unsecured creditors. The Committee is represented by
Mark E. Andrews, Esq., and Aaron M. Kaufman, Esq., at Dykema Cox
Smith.
Dennis Faulkner has been named the Chapter 11 Trustee for Frac
Specialist, LLC, et al. Mark J. Petrocchi, Esq. of Griffith, Jay &
Michel, LLP serves as the bankruptcy counsel of the Trustee.
FRESH & EASY: Bid to Compel Arbitration in "Chan" Denied
--------------------------------------------------------
Judge Brendan Linehan Shannon of the United States Bankruptcy Court
for the District of Delaware denied Fresh & Easy LLC's motion to
compel arbitration in the adversary proceeding captioned Diana
Chan, Plaintiff, v. Fresh & Easy, LLC, YFE Holdings, Inc., and The
Yucaipa Companies, LLC, Defendants, Adv. No. 15-51897 (BLS) (Bankr.
D. Del.).
Diana Chan worked in the produce department at one of Fresh &
Easy's California distribution centers until her termination on
October 30, 2015. On November 12, 2015, Chan commenced an
adversary proceeding by filing a complaint on behalf of herself and
a purported class of similarly situated former employees against
YFE Holdings, Inc., the Yucaipa Companies, LLC, and Fresh & Easy.
Chan's two-count complaint sought to recover damages on account of
alleged violations of the Worker Adjustment and Retraining
Notification Act, 29 U.S.C. sections 2100-2109, and its California
counterpart, California Labor Code sections 1400-1408.
Fresh & Easy requested the Court to send the matter to arbitration
on an individual basis, expunge Chan's purported class claims, and
stay the adversary proceeding until completion of the arbitration.
Chan opposed the motion on the ground that the arbitration
agreement between the parties is unenforceable under the National
Labor Relations Act (NLRA) because it contains a class-action
waiver provision.
Judge Shannon held that a class-action waiver provision violates
substantive rights at the heart of the NLRA. The judge explained
that Section 7 of the NLRA protects collective actions, and confers
a substantive right to employees to engage in the same; and that
Section 8 renders contractual provisions invalid that violate an
employee's Section 7 rights. Further, Judge Shannon pointed out
that the Federal Arbitration Act (FAA) does not enforce a provision
that is illegal under another federal statute. Therefore, the
judge concluded that the class waiver is illegal and unenforceable
pursuant to both the FAA's savings clause and well-settled case law
holding that a party cannot give up the right to pursue statutory
remedies by agreeing to arbitration.
Judge Shannon also held that the fact that Chan was given an
opportunity to opt out of the arbitration agreement does not alter
the Court's determination that the class waiver is unenforceable.
Lastly, Judge Shannon found that the class waiver cannot be severed
because it was central to the parties' agreement. The judge
explained that while the arbitration agreement does contain a
savings clause that provides that the remaining agreement shall
remain in force if any provision is held to be unenforceable, such
a provision does not override the court's discretion, especially
where an essential piece of the overall contract is illegal. The
judge also noted that the arbitration agreement does not provide a
specific saving mechanism in the event the class waiver is held
unenforceable.
The bankruptcy case is In re: Fresh & Easy, LLC, Chapter 11,
Debtor, Case No. 15-12220 (BLS) (Bankr. D. Del.).
A full-text copy of Judge Shannon's October 11, 2016 opinion is
available at https://is.gd/DaVaoc from Leagle.com.
Fresh & Easy, LLC is represented by:
David William Giattino, Esq.
Norman L. Pernick, Esq.
Marion M. Quirk, Esq.
Patrick J. Reilley, Esq.
J. Kate Stickles, Esq.
COLE SCHOTZ P.C.
500 Delaware Avenue, Suite 1410
Wilmington, DE 19801
Tel: (302)652 3131
Fax: (302)652 3117
E-mail: npernick@coleschotz.com
mquirk@coleschotz.com
preilley@coleschotz.com
kstickles@coleschotz.com
-- and --
Michael R. Nestor, Esq.
Justin H. Rucki, Esq.
YOUNG CONAWAY STARGATT & TAYLOR
Rodney Square
1000 North King Street
Wilmington, DE 19801
Tel: (302)571-6600
Fax: (302)571-1253
Email: mnestor@ycst.com
jrucki@ycst.com
-- and --
Carren Shulman, Esq.
SHEPPARD MULLIN RICHTER & HAMPTON LLP
30 Rockefeller Plaza
New York, NY 10112
Tel: (212)653-8700
Fax: (212)653-8701
Email: cshulman@sheppardmullin.com
U.S. Trustee, U.S. Trustee, is represented by:
Hannah Mufson McCollum, Esq.
OFFICE OF THE UNITED STATES TRUSTEE
844 King Street, Suite 2207, Lockbox 35
Wilmington, DE 19801
Tel: (302)573-6491
Fax: (302)573-6497
Official Committee of Unsecured Creditors of Fresh & Easy, LLC,
Creditor Committee, is represented by:
Kendra K. Bader, Esq.
Kara E. Casteel, Esq.
Alex Govze, Esq.
Brigette G. McGrath, Esq.
Joseph L. Steinfeld, Jr., Esq.
Gary D. Underdahl, Esq.
ASK LLP
151 West 46th Street, 4th Floor
New York, NY 10036
Tel: (212)267-7342
Fax: (212)918-3427
Email: kbader@askllp.com
kcasteel@askllp.com
agovze@askllp.com
bmcgrath@askllp.com
jsteinfeld@askllp.com
gunderdahl@askllp.com
-- and --
L. John Bird, Esq.
FOX ROTHSCHILD LLP
Citizens Bank Center
919 North Market Street, Suite 300
Wilmington, DE 19899-2323
Tel: (302)654-7444
Fax: (302)656-8920
Email: lbird@foxrothschild.com
-- and --
Joshua T. Klein, Esq.
FOX ROTHSCHILD LLP
2000 Market St., 20th Floor
Philadelphia, PA 19103-3222
Tel: (215)299-2000
Fax: (215)299-2150
Email: jklein@foxrothschild.com
-- and --
Mette Kurth, Esq.
FOX ROTHSCHILD LLP
1800 Century Park East, Suite 300
Los Angeles, CA 90067
Tel: (310)598-4150
Fax: (310)556-9828
Email: mkurth@foxrothschild.com
-- and --
Michael A. Sweet, Esq.
FOX ROTHSCHILD LLP
345 California Street, Suite 2200
San Francisco, CA 94104-2670
Tel: (415)364-5540
Fax: (415)391-4436
Email: msweet@foxrothschild.com
-- and --
Gregory S. Schwegmann, Esq.
REID COLLINS & TSAI LLP
1301 S. Capital of Texas Hwy
Building C, Suite 300
Austin, TX 78746
Tel: (512)647-6100
Fax: (512)647-6129
Email: gschwegmann@rctlegal.com
-- and --
J. Benjamin King, Esq.
Eric D. Madden, Esq.
REID COLLINS & TSAI LLP
Thanksgiving Tower
1601 Elm Street, Suite 4250
Dallas, TX 75201
Tel: (214)420-8900
Fax: (214)420-8909
Email: bking@rctlegal.com
emadden@rctlegal.com
About Fresh & Easy, LLC
Fresh & Easy, LLC, a chain of grocery stores in the Southwest
United States, filed a Chapter 11 bankruptcy petition (Bankr. D.
Del. Case No. 15-12220) on Oct. 30, 2015. The petition was signed
by Peter McPhee, the CFO. The Debtor estimated assets of $10
million to $50 million and liabilities of at least $100 million.
Judge Christopher S. Sontchi is assigned to the case.
The Debtor has engaged Cole Schotz P.C. as counsel, Epiq Bankruptcy
Solutions, LLC, as claims and noticing agent, DJM Realty Services,
LLC, and CBRE Group, Inc., as real estate consultants and FTI
Consulting, Inc., as restructuring advisors.
* * *
The Debtor has undertaken the process of liquidating the estate's
assets located at its retail locations and distribution center with
the assistance of Hilco Merchant Resources, LLC, and Industrial
Assets Corp., respectively, has engaged DJM Realty Services, LLC,
and CBRE, Inc., to market its leasehold interests, and has recently
engaged Hilco Streambank to assist with the disposition of its
intellectual property.
As part of the claims process, a bar date of Feb. 19, 2016, was
established by the Court for creditor claims.
FUNCTION(X) INC: Borrows Additional $255,000 from Sillerman
-----------------------------------------------------------
As previously disclosed by Function(x) Inc. in a Form 8-K filed on
June 12, 2015, Sillerman Investment Company IV, LLC, an affiliate
of Robert F.X. Sillerman, the Company's executive chairman and
chief executive officer of the Company, agreed to provide a line of
credit to the Company.
As previously disclosed in Section 2.04 in the First Amendment to
the Company's Current Report Form 8-K filed on Oct. 28, 2016, the
Company had fallen below the Minimum Cash Reserve of $1,000,000 for
a period of more than three trading days, which constituted an
Event of Default under the Debentures. While the Company is taking
steps to secure liquidity so that it can maintain the Minimum Cash
Reserve, if the Company is not able to obtain it from other
sources, the Company is reliant on the immediately due guarantee
requirement of its CEO and advances from his affiliate, Sillerman
Investment Company IV, LLC, to meet this requirement. However, the
Company said there can be no assurances it will be able to do so
nor that it will be a cure for the default. As a result, the
Purchasers of the Debentures will continue to have the remedies as
described in Item 1.01 of the First Amendment.
On Oct. 28, 2016, the Company borrowed an additional $255,000 under
the Line of Credit. The principal amount now outstanding under the
Line of Credit is $1,864,586 and the Company is entitled to draw up
to an additional $4,035,414 under the Line of Credit.
About Function(x)Inc.
Function(x)Inc., formerly known as DraftDay Fantasy Sports Inc.,
offers a high quality daily fantasy sports experience directly to
consumers and to businesses desiring turnkey solutions to new
revenue streams. DraftDay Fantasy Sports Inc. is the largest
shareholder of DraftDay Gaming Group, with a 44% stake. Sportech
owns 35%. By combining and capitalizing on the well-established
operational business assets of DraftDay and Sportech, the new
DraftDay is well-positioned to become a significant player in the
explosive fantasy sports market. DraftDay has paid out over $30
million in prizes with increased player retention and brand
loyalty. DraftDay Fantasy Sports also operates MyGuy and Viggle
Football both of which offer real-time interactive participation
with professional and college football games; Wetpaint, which
offers entertainment and celebrity news; and Choose Digital, a
digital marketplace platform that allows companies to incorporate
digital content into existing rewards and loyalty programs in
support of marketing and sales initiatives.
As of June 30, 2016, Function(x) had $23.03 million in total
assets, $48.21 million in total liabilities, $4.94 million in
series C convertible redeemable preferred stock and a $30.11
million total stockholders' deficit.
The Company incurred a net loss of $63.68 million for the year
ended June 30, 2016, compared to a net loss of $78.53 million for
the year ended June 30, 2015.
BDO USA, LLP, in New York, NY, issued a "going concern"
qualification on the consolidated financial statements for the year
ended June 30, 2016, citing that the Company has suffered recurring
losses from operations and at June 30, 2016, has a deficiency in
working capital that raise substantial doubt about its ability to
continue as a going concern.
FUSION TELECOMMUNICATIONS: Stockholders Elect Eight Directors
-------------------------------------------------------------
Fusion Telecommunications International, Inc., held its 2016 annual
meeting of stockholders on October 28, at which the stockholders:
1. elected Marvin S. Rosen, Philip D. Turits, Matthew D. Rosen,
Jack Rosen, Paul C. O'Brien, Michael J. Del Giudice, Larry
Blum and William Rubin as directors to hold office until the
Company's 2017 Annual Meeting of Stockholders;
2. ratified the selection of EisnerAmper LLP to act as the
Company's Independent Registered Public Accountant for the
year ending Dec. 31, 2016;
3. approved an amendment to the Company's certificate of
incorporation to increase the number of authorized shares of
common stock to 90,000,000;
4. approved the 2016 Fusion equity compensation plan;
5. ratified, for purposes of Nasdaq Listing Rule 5635(b), (i)
the sale of 1,834,862 shares of the Company's common stock
to Unterberg Technology Partners L.P. on Dec. 7, 2015, and
(ii) the conversion by Unterberg Koller Capital Fund, L.P. of
all of its shares of the Company's Series B-2 preferred
stock into shares of the Company's common stock, which
transactions resulted in Unterberg owning more than 20% of
the Company's outstanding voting securities; and
6. approved, on an advisory basis, the Company's executive
compensation.
The Board of Directors has determined to continue its present
practice of submitting proposals to Stockholders to determine the
frequency of non-binding, advisory proposals on executive
compensation every three years. The next non-binding proposal to
determine the frequency of holding non-binding, advisory proposals
on executive compensation will be presented to Stockholders at the
2019 annual meeting of Stockholders.
About Fusion Telecommunications
New York City-based Fusion Telecommunications International, Inc.,
(OTC BB: FSNN) is a provider of Internet Protocol ("IP") based
digital voice and data communications services to corporations and
carriers worldwide.
Fusion reported a net loss attributable to common stockholders of
$9.80 million on $101.69 million of revenues for the year ended
Dec. 31, 2015, compared to a net loss attributable to common
stockholders of $4.31 million on $92.05 million of revenues for the
year ended Dec. 31, 2014.
As of June 30, 2016, Fusion had $100 million in total assets, $90.4
million in total liabilities and $10.1 million in total
stockholders' equity.
GARDA WORLD: Moody's Affirms B2 CFR; Outlook Remains Stable
-----------------------------------------------------------
Moody's Investors Service affirmed Garda World Security
Corporation's B2 corporate family rating, B2-PD probability of
default rating, downgraded the ratings on the company's senior
secured revolver and term loans to B1 from Ba3, and assigned a B1
rating to the proposed US$125 million add-on term loan. Moody's
also affirmed the Caa1 rating on the senior unsecured notes and
withdrew the SGL rating. The ratings outlook remains stable.
Net proceeds from the US$125 add-on first lien term loan will be
used to repay amounts outstanding under the company's revolving
credit facility.
"The ratings affirmation considers that Garda's transaction is
leverage-neutral and adjusted Debt/EBITDA remains around 6.6x,"
said Peter Adu, Moody's AVP. "The downgrade of the secured debt
ratings reflects the increase in the proportion of that debt class
in the capital structure such that there is less loss absorption
capacity provided by unsecured debt beneath them", added Adu.
Rating Assigned:
US$125 mil. add-on secured term loan B due 2020, B1(LGD3)
Ratings Affirmed:
Corporate Family Rating, B2
Probability of Default Rating, B2-PD
US$440 mil. senior unsecured notes due 2021, Caa1 (LGD5)
Ratings Downgraded:
US$150 mil. senior secured revolving credit facility due 2018,
to B1 (LGD3) from Ba3 (LGD3)
US$617 mil. senior secured term loan B (including delayed draw)
due 2020, to B1 (LGD3) from Ba3 (LGD3)
US$107 mil. senior secured delayed draw term loan B due 2020, to
B1 (LGD3) from Ba3 (LGD3)
C$131M senior secured term loan B due 2020, to B1 (LGD3) from
Ba3 (LGD3)
Ratings Withdrawn:
SGL-2 Speculative Grade Liquidity, WR
Outlook:
Remains Stable
RATINGS RATIONALE
Garda's B2 CFR is primarily influenced by its high leverage (pro
forma adjusted Debt/EBITDA of 6.6x for LTM Q2/F17), appetite for
debt-financed acquisitions, reputational risk stemming from
exposure to high-threat projects in the Middle East and Africa, and
low organic growth prospects in its two businesses - cash services
and protective services. Moody's expects recent acquisitions to
support earnings growth through the next 12 to 18 months, and that
leverage should trend down to 6x in this timeframe, but not below,
as the company has limited its debt repayment in the past to the
mandatory requirements in its credit agreement. The rating
considers that tuck-in acquisitions will likely take precedence
over additional debt repayments in the application of free cash
flow. The rating also reflects Garda's relatively stable
businesses with high contract renewal rates and recurring revenue,
strong market positions, and good geographic diversity. Moody's
believes the growing trend towards electronic transactions, which
reduces cash usage, and competition will limit the company's
organic growth prospects in its cash services business in the long
term.
Garda has good liquidity, supported by cash of C$79 million at
Q2/2017 (July 2016), free cash flow of about C$40 million for the
next four quarters, and about C$140 million of availability, after
letters of credit, under its US$150 million revolver due in
November 2018 when the refinance transaction closes. These sources
are sufficient to meet term loan amortization of about C$12 million
per year. Garda has a US$80 million Export Development Corporation
senior secured revolving facility due in November 2018, but its
usage is for investments only and is therefore not a source of
liquidity. The facility will be fully available when the refinance
transaction closes. Aegis' US$30 million revolver facility due in
June 2017, which has about C$4 million used, is current and Moody's
does not assume its renewal. Garda's revolver is subject to a
springing maximum first lien secured leverage covenant when
drawings and letters of credit exceed a certain threshold. Moody's
expects cushion in excess of 10% for the next 4 to 6 quarters.
Garda has limited ability to generate liquidity from asset sales as
most of its assets are encumbered.
The outlook is stable as earnings growth and mandatory debt
repayment will enable leverage to be sustained around 6x through
the next 12 to 18 months.
An upgrade would be considered if Garda maintains good liquidity
and sustains adjusted Debt/EBITDA declines towards 5x (currently
6.8x) and EBITA/Interest above 2.5x (currently 1.2x). The rating
could be downgraded if liquidity worsens, possibly from negative
free cash flow for an extended period or if adjusted Debt/EBITDA is
sustained above 6.5x and EBITA/Interest below 1x.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
Garda World Security Corporation is a provider of cash services in
North America (including armored cars), protective services in
Canada (including airport pre-board screening at 28 of Canada's
airports) and international protective services in high risk
economies. Revenue for the twelve months ended July 31, 2016
totaled C$2.4 billion. Garda is headquartered in Montreal, Quebec
and is owned by Rhone Capital 42%, Management 36%, and Apax
Partners 22%.
GARDA WORLD: S&P Affirms 'B' Rating on 1st-Lien Debt
----------------------------------------------------
S&P Global Ratings said it affirmed its 'B' issue-level rating,
with a '3' recovery-level rating, on Quebec-based Garda World
Security Corp.'s first-lien debt following the company's
announcement that it is seeking to upsize the aggregate principal
amount of its U.S. dollar-denominated first-lien secured term loan
under its existing credit agreement by US$125 million (for a total
of about US$850 million).
All of S&P's other ratings on the company are unchanged, including
its 'B' long-term corporate and unsecured debt ratings on Garda.
The outlook is stable. The company intends to use the net proceeds
from the incremental term loan to repay borrowings under its
revolver, as well as to pay related fees and expenses.
"We base our corporate credit rating on Garda on our assessment of
its operations in a highly competitive and fragmented market, but
having good customer and geographic diversity and a large portion
of revenues that are contracted and recurring. We expect the
company to maintain adjusted EBITDA to interest coverage above 2.0x
over the next two years," said S&P Global Ratings credit analyst
Aniki Saha-Yannopoulos.
S&P assess Garda as having a satisfactory business risk profile and
highly leveraged financial risk profile. S&P expects the company
will continue to maintain a high adjusted debt-to-EBITDA above 7x,
which in S&P's view, limits the upside potential for its corporate
credit rating on Garda. S&P updated its recovery analysis to
reflect the proposed refinancing, with no change in S&P's '3'
recovery rating (50%-70% indicating meaningful recovery, at the low
end of the range) on the company's first-lien debt.
RATINGS LIST
Garda World Security Corp.
Corporate credit rating B/Stable/--
Ratings Affirmed
Garda World Security Corp.
First-lien debt B
Recovery rating 3
GARDEN OF EDEN: Panel Hires Sullivan & Worcester as Counsel
-----------------------------------------------------------
The Official Committee of Unsecured Creditors of Garden of Eden
Enterprises Inc dba Garden of Eden and its debtor-affiliates seeks
authorization from the U.S. Bankruptcy Court for the Southern
District of New York to retain Sullivan & Worcester LLP as counsel
to the Committee, effective October 6, 2016.
The Committee requires Sullivan & Worcester to:
(a) provide legal advice as necessary with respect to the
Committee's powers and duties as an official committee
appointed under section 1102 of the Bankruptcy Code;
(b) assist the Committee in negotiating favorable terms for
unsecured creditors with respect to any proposed asset
purchase agreements for the sale of any of the Debtors'
assets;
(c) provide legal advice as necessary with respect to any
disclosure statement or plan filed in the Chapter 11 Case,
and with respect to the process for approving or
disapproving any such disclosure statement or confirming
any such plan, as appropriate;
(d) prepare on behalf of the Committee, as necessary,
applications, motions, complaints, answers, orders,
agreements, memoranda of law, and other legal papers,
including, without limitation, the preparation and defense
of retention and fee applications for the Committee's
professionals and proposed professionals, including
Sullivan & Worcester;
(e) appear in Court to present necessary motions, applications,
and pleadings, and otherwise protect the interests of those
unsecured creditors who are represented by the Committee;
(f) review the Debtors' schedules and statements;
(g) advise the Committee as to the implications of the Debtors'
activities and motions before this Court;
(h) provide the Committee with legal advice in relation to the
Chapter 11 Cases generally; and
(i) perform such other legal services as may be required and
that are in the best interests of the Committee, the
estates, and creditors.
Sullivan & Worcester will be paid at these hourly rates:
Jeffrey Gleit, partner $725
Gene Schlack, associate $360
Partners of the Firm $550-$1,100
Counsel $465-$990
Associates $360-$575
Paralegals and Assistants $205-$385
Sullivan & Worcester will also be reimbursed for reasonable
out-of-pocket expenses incurred.
Jeffrey R. Gleit, partner Sullivan & Worcester, assured the Court
that the firm is a "disinterested person" as the term is defined in
Section 101(14) of the Bankruptcy Code and does not represent any
interest adverse to the Debtors and their estates.
Sullivan & Worcester can be reached at:
Jeffrey R. Gleit, Esq.
SULLIVAN & WORCESTER LLP
1633 Broadway
New York, NY 10019
Tel: (212) 660-3000
Fax: (212) 660-3001
About Garden of Eden Enterprises
Garden of Eden Enterprises, Inc., Broadway Specialty Food, Inc.,
Coskun Brothers Specialty, and Garden of Eden Gourmet Inc. filed
chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 16-12488,
16-12490, 16-12491, 16-12492, respectively) on Aug. 29, 2016. The
petitions were signed by Mustafa Coskun, president.
The cases are assigned to Judge James L. Garrity Jr.
Doing business as Garden of Eden, the Debtors operate three upscale
full-service specialty-food retail stores at leased premises in New
York. Debtor Garden of Eden Enterprises is the parent operating
company of the Debtors, and maintains its place of business at 720
Anderson Avenue, Cliffside Park, New Jersey 07010.
Clifford A. Katz, Esq., and Scott K. Levine, Esq., of Platzer,
Swergold, Levine, Goldberg, Katz & Jaslow, LLP, serve as counsel
to the Debtors.
At the time of filing, the Debtors disclosed $8.05 million in
assets and $8.29 million in liabilities. A copy of the Debtors'
list of 20 largest unsecured creditors is available for free at:
http://bankrupt.com/misc/nysb16-12488.pdf
U.S. Trustee William K. Harrington on Sept. 15, 2016, appointed
three creditors to serve on the official committee of unsecured
creditors of Garden of Eden Enterprises, Inc., et al.
GATEWAY ENTERTAINMENT: Hires Robert O Lampl as Attorneys
--------------------------------------------------------
Gateway Entertainment Studios, LP, seeks authority from the U.S.
Bankruptcy Court for the Western District of Pennsylvania to employ
the Law Offices of Robert O Lampl as attorneys to the Debtor.
Gateway Entertainment requires Lampl to:
a. assist the administration of the Debtor's Estate;
b. represent the Debtor on matters involving legal issues that
are present or are likely to arise in the case;
c. prepare any legal documentation on behalf of the Debtor;
d. review reports for legal sufficiency;
e. furnish information on legal matters regarding legal
actions and consequences and for all necessary legal
services connected with Chapter 11 proceedings including
the prosecution and/or defense of any adversary
proceedings.
Lampl attorneys who will render services to the Debtor will be paid
at these hourly rates:
Robert O Lampl $450
John P. Lacher $400
David L. Fuchs $375
Ryan J. Cooney $275
Paralegal $150
Lampl will also be reimbursed for reasonable out-of-pocket expenses
incurred.
Robert O Lampl, member of the Law Firm, assured the Court that the
firm is a "disinterested person" as the term is defined in Section
101(14) of the Bankruptcy Code and does not represent any interest
adverse to the Debtor and its estates, and the firm has no
connection with any creditor or any party in interest, their
respective attorneys and accountants, the United States Trustee, or
any person employed in the office of the United States Trustee.
Lampl can be reached at:
Robert O Lampl, Esq.
Law Offices of Robert O Lampl
960 Penn Avenue, Suite 1200
Pittsburgh, PA 15222
Tel: (412) 392-0330
Fax: (412) 392-0335
Email: rlampl@lampllaw.com
About Gateway Entertainment
Gateway Entertainment Studios, L.P., filed a Chapter 11 petition
(Bankr. W.D. Pa. Case No. 16-21628) on April 29, 2016. At the time
of filing, the Debtor listed total assets of $12.15 million and
total debts of $9.87 million. Judge Carlota M. Bohm is assigned to
the case.
When it filed for bankruptcy, Gateway Entertainment tapped Richard
R. Tarantine, Esq., at Tarantine & Associates, as its bankruptcy
counsel. Mr. Tarantine later moved to Jones Gregg Creehan &
Gerace, LLP. Gateway then hired the Law Offices of Robert O Lampl
as counsel.
The U.S. trustee for Region 3 on June 2 appointed three creditors
of Gateway Entertainment Studios, LP to serve on the official
committee of unsecured creditors. The Committee is represented by
Kirk B. Burkley, Esq., at Bernstein-Burkley, P.C., in Pittsburgh,
Pennsylvania.
GIBRALTAR -- CHURCH: Case Summary & Unsecured Creditor
------------------------------------------------------
Debtor: Gibraltar -- Church on the Rock
P.O. Box 543
Tarboro, NC 27886
Case No.: 16-05640
Nature of Business: Single Asset Real Estate
Chapter 11 Petition Date: October 31, 2016
Court: United States Bankruptcy Court
Eastern District of North Carolina
(Greenville Division)
Judge: Hon. Stephani W. Humrickhouse
Debtor's Counsel: John G. Rhyne, Esq.
JOHN G. RHYNE, ATTORNEY AT LAW
P.O. Box 8327
Wilson, NC 27893
Tel: 252 234-9933
E-mail: johnrhyne@johnrhynelaw.com
Total Assets: $1.21 million
Total Liabilities: $444,300
The petition was signed by Michael A. Williams, Sr., pastor.
The Debtor listed WCPS as its largest unsecured creditor holding a
trade claim of $300.
A full-text copy of the petition is available for free at:
http://bankrupt.com/misc/nceb16-05640.pdf
GOLFSMITH INT'L: Hires Pope Shamsie as Tax Accountants
------------------------------------------------------
Golfsmith International Holdings, Inc., et al., seek authority from
the U.S. Bankruptcy Court for the District of Delaware to employ
Pope Shamsie & Dooley LLP as tax accountants to the Debtors.
Golfsmith International requires Pope to:
a. prepare the Debtors' federal, state, and related tax
returns;
b. assist in connection with pending or future audits by
the Internal Revenue Service; and
c. provide tax consulting services in connection with the
prosecution of the chapter 11 cases, including acquisition
tax due diligence.
Pope will be paid at these hourly rates for its tax consulting
services:
Partner $340
Senior Manager $275
Manager $250
Senior $225
Pope will be paid a fixed fee of $46,000 for its tax preparation
services.
Pope will also be reimbursed for reasonable out-of-pocket expenses
incurred.
Rashid Shamsie, member of Pope Shamsie & Dooley LLP, assured the
Court that the firm is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code and does not
represent any interest adverse to the Debtors and their estates.
Pope can be reached at:
Rashid Shamsie
POPE SHAMSIE & DOOLEY LLP
4201 W. Palmer Ln., Suite B-200
Austin, Texas 78727
Tel: (512) 836-1186
About Golfsmith International
Headquartered in Austin, Texas, Golfsmith International Holdings,
Inc., the parent company of Golfsmith International, Inc., is a
holding company. The Company is a specialty retailer of golf and
tennis equipment, apparel, footwear and accessories. The Company
operates as an integrated multi-channel retailer, providing its
customers the convenience of shopping in the retail stores across
United States, through its Internet site,
http://www.golfsmith.com/,and from its catalogs. The Company
offers a product selection that features national brands, pre-owned
clubs and its branded products. It offers a number of customer
services and customer care initiatives, including its club trade-in
program, 30-day playability guarantee, 115% low-price guarantee,
its credit card, in-store golf lessons, and SmartFit, its
club-fitting program. As of Jan. 1, 2011, the Company operated 75
stores in 21 states and 33 markets.
Golfsmith International Holdings, Inc., and 12 affiliates filed
Chapter 11 petitions (Bankr. D. Del. Case No. 16-12033) on Sept.
14, 2016, and are represented by Mark D. Collins, Esq., John H.
Knight, Esq., Zachary I. Shapiro, Esq., and Brett M. Haywood, Esq.,
at Richards, Layton & Finger, P.A., in Wilmington, Delaware; and
Michael F. Walsh, Esq., David N. Griffiths, Esq., and Charles M.
Persons, Esq., at Weil, Gotshal & Manges LLP, in New York.
The Debtors' financial advisor is Alvarez & Marsal North America,
LLC. The Debtors' investment banker is Jefferies LLC. The Debtors'
claims, noticing and solicitation agent is Prime Clerk LLC. Pope
Shamsie & Dooley LLP serves as tax accountants.
At the time of filing, the Debtor had $100 million to $500 million
in estimated assets and $100 million to $500 million in estimated
liabilities.
Andrew Vara, acting U.S. trustee for Region 3, on Sept. 23, 2016,
appointed seven creditors to serve on the official committee of
unsecured creditors. The Committee hires Cooley LLP as lead
counsel, Chaitons LLP as Canadian counsel, Polsinelli PC as
Delaware counsel, Province, Inc. as financial advisor, and A&G
Realty Partners as real estate advisor.
HEAVENLY VISION: Seeks to Hire Misrok Law Firm as Special Counsel
-----------------------------------------------------------------
Heavenly Vision Christian Center Inc. seeks approval from the U.S.
Bankruptcy Court for the Southern District of New York to hire
special counsel.
The Debtor proposes to hire The Misrok Law Firm, LLP to file
applications to obtain approval of an attorney general, which is
required to complete the sale of its vacant lots in Bronx to a
private buyer.
The firm will be paid a flat fee of $5,500 for its services.
Kenneth Misrok, Esq., at Misrok Law Firm, disclosed in a court
filing that his firm is "disinterested" as defined in section
101(14) of the Bankruptcy Code.
The firm can be reached through:
Kenneth I. Misrok, Esq.
The Misrok Law Firm, LLP
30 South Central Avenue
Valley Stream, NY 11580
Phone: 516-825-3025
Fax: 516-825-3531
The Debtor is represented by:
Adam P. Wofse, Esq.
LaMonica Herbst & Maniscalco, LLP
3305 Jerusalem Avenue
Wantagh, NY 11793
Phone: (516) 826-6500
About Heavenly Vision Christian Center
Heavenly Vision Christian Center Inc., dba Heavenly Vision Prayer
Mountain, fka Cristiana Fuente De Salvacion Inc., is a church that
operates out of, and services its community at, the real property
located at 2868 Jerome Avenue, Bronx, New York. It also owns a
retreat property in Westerlo, New York and 2 vacant lots on
Sedgwick Avenue in the Bronx, New York.
The Debtor filed for Chapter 11 bankruptcy protection (Bankr.
S.D.N.Y. Case No. 15-13035) on Nov. 13, 2015. At the time of the
filing, the Debtor estimated its assets and liabilities at between
$1 million and $10 million each. The petition was signed by
Salvador Sabino, pastor and president. Judge Shelley C. Chapman
presides over the case.
Adam P. Wofse, Esq., at Lamonica Herbst & Maniscalco, LLP, serves
as the Debtor's bankruptcy counsel.
HEBREW HEALTH: EisnerAmper's Fee Cap Increased to $100,000
----------------------------------------------------------
The Official Committee of Unsecured Creditors of Hebrew Health
Care, Inc., et al., filed an amendment to its Application to Retain
EisnerAmper LLP as Financial Advisors to increase the requested cap
on EisnerAmper's fees from $50,000 to $100,000. The Connecticut
Bankruptcy Court on Nov. 1 entered an Order Approving the
Application and the Amendment.
As reported by the Troubled Company Reporter on Sept. 28, 2016, the
Committee sought to retain EisnerAmper as financial advisor, nunc
pro tunc to September 1, 2016. As an accommodation to the
Committee, EisnerAmper agreed to provide a 10% discount to its
normal billing. According to the Committee's original application,
EisnerAmper estimated that the total cost of its services in the
case shall not exceed $50,000 subject to an increase in the cap by
Court Order.
According to the TCR report, the Creditors' Committee requires
EisnerAmper to:
(a) analyze the status of current operations and historical
financial information;
(b) assist with an understanding of Debtors' organizational
structure, including non-debtor related party entities;
(c) assess the Debtors' proposed budget and any need for a
DIP
loan;
(d) review the profitability of each facility and recommend
any opportunities for revenue enhancement and expense reductions;
(e) analyze the sale and restructure the strategies and
proposed transactions;
(f) analyze pre-Petition Date transactions with the third
parties;
(g) monitor the Debtors' operations;
(h) assist with the identification of any recoverable assets
which are not in the Debtors' estates; and,
(i) rendering such other assistance as the Committee and its
counsel may deem necessary.
EisnerAmper will be paid at these rates:
Partners/Directors $435 - $610/hr.
Managers $270 - $435/hr.
Seniors $225 - $255/hr.
Staff $190 - $205/hr.
EisnerAmper will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Anthony R. Calascibetta, a partner of EisnerAmper, assured the
Court that the firm is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code and does not
represent any interest adverse to the Debtors and their estates.
EisnerAmper may be reached at:
Anthony R. Calascibetta
EisnerAmper LLP
111 Wood Avenue South
Iselin, NJ 08830-2700
Tel: (732) 243-7389
About Hebrew Health Care Inc.
Hebrew Health Care, Inc., Hebrew Life Choices, Inc., Hebrew
Community Services, Inc., and Hebrew Home and Hospital,
Incorporated, filed Chapter 11 petitions (Bankr. D. Conn. Case Nos.
16-21311, 16-21312, 16-21313, and 16-21314, respectively) on Aug.
15, 2016. The petitions were signed by Bonnie Gauthier, CEO. Their
cases are assigned to Judge Ann M. Nevins.
The Debtors are represented by Elizabeth J. Austin, Esq., at
Pullman and Comley, LLC.
At the time of the filing, Hebrew Health Care, Inc., estimated
assets at $1 million to $10 million and liabilities at $100,000 to
$500,000; Hebrew Life Choices, Inc. estimated assets at $10 million
to $50 million and liabilities at $10 million to $50 million;
Hebrew Community Services, Inc. estimated assets at $500,000 to $1
million and liabilities at $100,000 to $500,000; and Hebrew Home
and Hospital estimated assets at $1 million to $10 million and
liabilities at $10 million to $50 million.
The United States Trustee for Region 2 appointed The Connecticut
Light and Power Company, McKesson Corporation, and Morrison
Management Specialists, Inc. to serve on the Official Committee of
Unsecured Creditors.
HELLBENDER BREWING: Voluntary Chapter 11 Case Summary
-----------------------------------------------------
Debtor: Hellbender Brewing Company LLC
5788 2nd Street, NE
Washington, DC 20011
Case No.: 16-00577
Chapter 11 Petition Date: November 1, 2016
Court: United States Bankruptcy Court
District of Columbia (Washington, D.C.)
Judge: Hon. Martin S. Teel, Jr.
Debtor's Counsel: Lawrence Allen Katz, Esq.
HIRSCHLER FLEISCHER
8270 Greensboro Drive, Suite 700
Tysons, VA 22102
Tel: 703-584-8362
Fax: 703-584-8901
E-mail: lkatz@hf-law.com
Debtor's
Special
Counsel: DAVIS WRIGHT TREMAINE LLP
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Patrick Mullane, vice president.
The Debtor did not include a list of its largest unsecured
creditors when it filed the petition.
HOUSTON PROPERTY: Peachtree Investments Opposes Cash Use
--------------------------------------------------------
Peachtree Investments, LLC informed the U.S. Bankruptcy Court for
the District of Arizona that it did not consent to Houston
Property, LLC's use of cash collateral.
Peachtree Investments relates that it holds a properly perfected
security interest in the Debtor's real property located at 3010
East Main Street, Gilbert, Arizona. Peachtree Investments further
relates that it also holds a properly perfected security interest
in all income generated by the Property.
Peachtree Investments tells the Court that the Debtor is indebted
to it in the amount of $741,188,94, as of October 21, 2016,
pursuant to a Note. Peachtree Investments further tells the Court
that the Debtor defaulted in under the terms the Note and the Deed
of Trust securing the Note, by failing to make all of the required
payments due since March, 2016. Peachtree Investments adds that
despite the Debtor's default and written demand made by it upon the
Debtor, the Debtor had failed to cure the default.
Peachtree Investments contends that all rents and/or proceeds from
the Property paid pre-petition or post-petition to the Debtor by
any person constitutes cash collateral for repayment of the debt
owed to Peachtree Investments. Peachtree Investments further
contends that the Debtor is prohibited from using such cash
collateral without the Peachtree Investments' consent or an order
of the Court authorizing such use.
Peachtree Investments tells the Court that the Debtor should be
required to pay over to Peachtree Investments all rental proceeds
the Debtor has collected. It further tells the Court that in the
alternative, all rents must be segregated into a cash collateral
account.
A full-text copy of Peachtree Investments, LLC's Notice, dated
October 28, 2016, is available at
http://bankrupt.com/misc/HoustonProperty2016_216bk11947epb_8.pdf
Peachtree Investments, LLC is represented by:
Christopher R. Kaup, Esq.
TIFFANY & BOSCO, P.A.
Seventh Floor Camelback Esplanade II
2525 East Camelback Road
Phoenix, AZ 85016
About Houston Property, LLC.
Houston Property, LLC filed a chapter 11 petition (Bankr. D. Ariz.
Case No. 16-11947) on October 18, 2016. The petition was signed by
Mackenzie Randall, member. The case is assigned to Judge Eddward
P. Ballinger, Jr. The Debtor is represented by Blake D. Gunn,
Esq., at the Law Office of Blake D. Gunn, LLC. The Debtor
disclosed total assets of $980,000 and total liabilities of $1.04
million.
I.K.E. ELECTRICAL: Hires Gerald Onorata as Special Counsel
----------------------------------------------------------
I.K.E. Electrial Corporation asks the Bankruptcy Court for
authority to hire Gerard J. Onorata, Esq., as special litigation
counsel.
The Debtor requires legal representation in a proceeding in the
Superior Court of NY in connection with defending an action brought
against the Debtor captioned Cava Co. & Development, Inc. V. Tower
Insurance Co. of New York, I.K.E. Electrical Corp.
The Special Counsel is familiar the Debtor's case and has extensive
experience in complex commercial litigation, chancery, federal
matters, and other contested matters.
Gerard J. Onorata, Esq., assures the Court he has no connections
with the creditors, any other party in interest, their respective
attorneys and accountants, the United States Trustee or any person
employed in the office of the United States Trustee.
The attorney can be reached at:
Gerard J. Onorata, Esq.
70 Grand Ave.
River Edge, NJ 07661
Tel: (201) 343-3434
Headquartered in Closter, New Jersey, I.K.E. Electrial Corporation,
doing business as IKE Electrical Corp., filed for Chapter 11
bankruptcy protection (Bankr. D.N.J. Case No. 16-18212) on April
28, 2016, estimating assets up to $50,000 and its liabilities
between $1 million and $10 million. The petition was signed by
Rebecca S. Adika, president. Judge John K. Sherwood presides over
the case.
David L. Stevens, Esq., at Scura, Wigfield, Heyer & Stevens, LLP,
serves as the Debtor's bankruptcy counsel.
IDERA INC: S&P Assigns 'B' Rating on 1st Lien Term & Revolver Loans
-------------------------------------------------------------------
S&P Global Ratings assigned its 'B' issue-level rating and '3'
recovery rating to Houston-based Idera Inc.'s first-lien term loan
and revolving credit facility. The '3' recovery rating indicates
S&P's expectation of meaningful (50%-70%, upper half of the range)
recovery for first-lien debt holders in the event of default. At
the same time, S&P assigned its 'B-' issue-level rating and '5'
recovery rating to Idera's second-lien term loan. The '5' recovery
rating indicates S&P's expectation of modest (10%-30%, lower half
of the range) recovery for the second-lien debt holders.
The 'B' corporate credit rating on Idera Inc. is unchanged after
the refinancing of its existing debt. The proceeds from the
$360 million first-lien term loan due 2023 and $150 million
second-lien term loan due 2024 will be used, along with cash on the
balance sheet, to repay the debt outstanding and fund a
$100 million dividend distribution to shareholders. The
$25 million revolving facility due 2021 will be undrawn at close of
the transaction.
S&P's adjusted leverage is now expected to reach the high 6x area
by fiscal year-end 2017, up from the mid- to high 5x area as
previously forecast, but this is still within S&P's downside
trigger of 7x leverage. However, in light of the higher leverage
as well as S&P's preference for implemented cost savings to be
recognized in the income statement, S&P maintains the negative
outlook.
RECOVERY ANALYSIS
Key analytical factors
-- S&P values the company on a going-concern basis using a 5.5x
multiple of S&P's projected emergence EBITDA.
-- S&P's simulated default scenario assumes a default occurring
in 2019 due to increased competition resulting in pricing
pressure and lower renewal rates, and due to database
original equipment manufacturers' providing competing
products at no charge to their database customers, eroding
the need for third-party software solutions.
Simulated default assumptions
-- Simulated year of default: 2019
-- EBITDA at emergence: $50 million
-- EBITDA multiple: 5.5x
-- LIBOR at default: 3.25%
Simplified waterfall
-- Net enterprise value (after 5% administrative costs):
$261 million
-- Valuation split in % (obligors/non-obligors): 65/35
-- Collateral value available to first-lien debt claims
(collateral/non-collateral): $229 million/$16 million
-- Secured first-lien debt claims: $387 million
-- Recovery expectations: 50% to 70% (upper half of the
range)
-- Secured second-lien debt claims: $160 million
-- Recovery expectations: 10% to 30% (lower half of the
range)
RATINGS LIST
Idera Inc.
Corporate Credit Rating B/Negative/--
New Ratings
Idera Inc.
Senior Secured
US$360 mil 1st lien term bank ln due B
2023
Recovery Rating 3H
US$25 mil revolver bank ln due 2021 B
Recovery Rating 3H
US$150 mil 2nd lien term bank ln due B-
2024
Recovery Rating 5L
IRENE STACY COMMUNITY: Selling Butler Property for $175,000
-----------------------------------------------------------
Irene Stacy Community Mental Health Center asks the U.S. Bankruptcy
Court for the Western District of Pennsylvania to authorize the
sale of real property located at 115-119 East North Street, Butler,
Pennsylvania, to Nonprofit Development Corp. for $175,000.
The Debtor and the Purchaser entered into Agreement of Sale for the
sale of the property on Oct. 18, 2016.
The sale of the property is conditioned, inter alia, on the entry
by the Court of a final, nonappealable Sale Order, satisfactory to
the Buyer.
A copy of the Agreement of Sale attached to the Motion is available
for free at:
http://bankrupt.com/misc/Irene_Stacy_295_Sales.pdf
The property is subject to a Lease Agreement ("Lease") by and
between the Debtor, as Landlord, and The C.A.R.E. Center, as
Tenant, dated May 5, 2016, for a term of 18 months. The Lease is
subject to an early termination provision, wherein the Tenant
understands that the property is on the market and subject to sale
to a third party. Either party may terminate the Lease 90 days
after written notice of the Landlord's notice of sale.
The parties which may hold mortgages, liens, claims, encumbrances
or an interest against the Real Estate are: (i) NexTier Bank, N.A,
(ii) Commonwealth of Pennsylvania Office of Attorney General, (iii)
Butler County Human Services, (iv) Southwestern Pennsylvania Human
Services, Inc., and (v) The C.A.R.E. Center.
The sale of the property will be in "as is, where is" condition,
without representations or warranties of any kind whatsoever; and
free and clear of all liens, claims, interests and encumbrances.
The Debtor believes that the proposed sale is fair and reasonable,
and acceptance and approval of the same is in the best interests of
the Debtor's estate. Accordingly, the Debtor respectfully requests
that the Court approves the sale of the property, determines that
the Buyer is a good faith purchaser entitled to the protections of
Bankruptcy Code Section 363(m), and provides such other and further
relief as the Court deems to be just and proper.
The Purchaser can be reached at:
NONPROFIT DEVELOPMENT CORP.
212-214 South Main Street
Butler, PA 16001
Attn: Michael P. Robb
About Irene Stacy
Irene Stacy Community Mental Health Center sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. W.D. Pa. Case No.
15-24605) on December 18, 2015. The petition was signed by Brent
Olean, Board president.
The Debtor is represented by Allison L. Carr, Esq., at
Bernstein-Burkley, P.C. The case is assigned to Judge Thomas P.
Agresti.
The Debtor estimated both assets and liabilities in the range of
$1 million to $10 million.
ITT EDUCATIONAL: Cerberus to Lend $6M for Sale Effort
-----------------------------------------------------
Peg Brickley, writing for The Wall Street Journal Pro Bankruptcy,
reported that the bankruptcy trustee mopping up after the collapse
of ITT Educational Services Inc. has lined up $6 million worth of
financing for the cleanup effort.
According to the report, loans are coming from finance affiliates
of Cerberus Capital Management, an existing lender to the failed
for-profit educator, operator of the ITT Tech chain. Lawyers for
bankruptcy trustee Deborah J. Caruso say the cash is desperately
needed, as the trustee can't do much without funding, the report
related. A bankruptcy judge in Indianapolis will review the loan,
the report further related.
Cerberus is conditioning the bankruptcy loan on the sale of at
least $33 million worth of abandoned campuses by the end of March
2017, the report added. ITT Tech's real estate is already being
marketed, and estimates are it could bring from $70 million to $100
million -- more than enough to pay off what Cerberus is owed, about
$22 million, as well as the bankruptcy financing, the report said.
In addition to borrowing power, Cerberus has agreed to allow Ms.
Caruso use of the cash in ITT Tech's coffers during the bankruptcy,
the report added. As secured lender, Cerberus is entitled to claim
the company's cash as collateral for its loans, the report noted.
About ITT Educational
ITT Educational Services, Inc., is a proprietary provider of
post-secondary degree programs in the United States based on
revenue and student enrollment. As of Dec. 31, 2015, ITT was
offering: (a) master, bachelor and associate degree programs to
approximately 45,000 students at ITT Technical Institute and
Daniel
Webster College locations; and (b) short-term information
technology and business learning solutions for individuals.
ITT Educational and its subsidiaries ESI Service Corp. and Daniel
Webster College, Inc. ceased operations and commenced bankruptcy
proceedings by filing voluntary petitions for relief under
Chapter 7 of the Bankruptcy Code (Bankr. S.D. Ind.) on Sept.
16, 2016.
JAMESTOWN, NY: Moody's Lowers GOLT Rating to Ba1; Outlook Negative
------------------------------------------------------------------
Moody's Investors Service has downgraded the city of Jamestown,
NY's general obligation limited tax (GOLT) rating to Ba1 from Baa1.
The par amount of debt affected totals approximately $32.6
million. The outlook has been revised to negative.
The downgrade to Ba1 reflects the city's narrow financial position
and continued structurally imbalanced operations characterized by
the use of one-time revenue sources, limited revenue-raising
ability and the limited recurring expenditure reductions available
to the city. The rating further incorporates the city's
above-average debt and pension burdens and a modest tax base with
weak wealth and income levels.
Rating Outlook
The negative outlook reflects the city's reliance on state and
county assistance to close a large structural budget gap (fiscal
2017) and our expectation that its very narrow financial position
will persist.
Factors that Could Lead to an Upgrade
Established trend of structurally balanced operations
Growth in reserves and liquidity
Significant tax base growth and improvement in wealth and income
levels of residents
Factors that Could Lead to a Downgrade
Further weakening of liquidity and reserves
Failure to achieve a structurally balanced fiscal 2017 budget
Continued reliance on non-recurring revenue sources or one-time
measures to balance operations
Legal Security
The bonds are secured by the city's general obligation pledge as
limited by the Property Tax Cap-Legislation (Chapter 97 (Part A) of
the Laws of the State of New York, 2011).
Obligor Profile
Jamestown is located in Chautauqua County, close to the
Pennsylvania border and 71 miles southwest of Buffalo. The city
has a total land area of 9.5 square miles and an estimated
population of 30,075 residents.
Methodology
The principal methodology used in this rating was US Local
Government General Obligation Debt published in January 2014.
JPS COMPLETION: Selling Equipment and Tools
-------------------------------------------
JPS Completion Fluids, Inc., asks the U.S. Bankruptcy Court for the
Western District of Texas to authorize the sale of downhole motors
and related equipment and tools, plus one trailer ("ETS Sale
Items") to ETS Oil Services, LP for $100,000; flowback and related
equipment ("PICO Sale Items") to PICO Technologies, LLC for
$207,900; and remaining inventory, equipment, and tools ("Remaining
Sale Items"), subject to higher and better offers.
The Debtor's goal in this bankruptcy is to sell all its assets for
the highest and best prices and the expedited Motion reflects
further substantial progress towards achieving that goal.
The Debtor ceased business operations at the end of February 2016,
and has no operations or employees. The Debtor has marshaled the
majority of its equipment and materials at two of its yards near
Mathis, Texas where it is available for sale. Some of the Debtor's
equipment and vehicles located in Colorado are leased to an
insider, G5S, on terms accepted by the Debtor's secured lender,
Texas Champion Bank ("Bank") which has a fully perfected lien in
the equipment and is generally acknowledged to be under secured;
the Colorado-based vehicles are also fully encumbered and of no
value to the estate, and so have been surrendered by the Debtor and
the stay was lifted. G5S is negotiating with the Bank to purchase
the equipment in Colorado and with the other secured lenders
concerning the vehicles there.
Previously the Debtor sold 12 mixers and 6 filter pods to Total
Tank Systems, Inc., and currently has the proceeds of that sale in
its segregated bank account, subject to the liens of San Patricio
County, the Bank, and the IRS, in that order of priority.
The sale of the ETS Sale Items, the PICO Sale Items and the
Remaining Sale Items will be on a "where is, as is basis," with no
warranty or guarantee being provided and with the buyer being
responsible for all shipping costs.
The review of applicable lien documents suggests that no creditor
other than the San Patricio County, the Bank, and the IRS have a
specific security interest in and to the ETS Sale Items, the PICO
Sale Items and the Remaining Sale Items. San Patricio County will
be paid in full from proceeds of the prior equipment sale. As such,
it appears that the Bank has a first-priority, perfected, and
unavoidable security interest in and to the ETS Sale Items,
pursuant to its blanket prepetition lien, and the IRS has a second
lien, however the IRS second lien is entirely unsecured.
The Debtor and the Bank estimate that the Debtor's Remaining Sale
Items has a value less than the remaining balance due by the Debtor
to the Bank.
Because the Remaining Sale Items have a fair market value less than
the remaining balance due to the Bank, the Debtor proposes the
following procedure for the sale of the Remaining Sale Items:
a. Upon receipt of an offer for the purchase of all or
part of the Remaining Sale Items, the Debtor will file a notice of
the offer and serve it on all the following: (i) Texas Champions
Bank, (ii) the IRS, (ii) San Patricio County, (iv) the U.S.
Trustee, (v) Sergio Garza, (vi) Pedro Gonzalez, and (vii) any other
party requesting notice.
b. Each party receiving notice will have 7 business days
to file a written objection to the proposed sale.
c. If no written objections are filed within 7 business
days, then the Debtor will be permitted to sell the Remaining Sale
Items.
The Debtor believes that the establishment of the procedure for the
sale of the Remaining Sale Items is in the best interest of the
Estate in that it will minimize the cost of liquidation and will
enable the Debtor to proceed toward confirmation of a liquidating
Plan at the least expense.
To compensate the Estate for the costs of sale of all the foregoing
items, the Debtor requests a surcharge against all sale proceeds of
10% of gross sale proceeds, to be transferred upon receipt to the
Debtor's operating account for application to allowed claims for
administrative expenses of the estate. The Debtor submits that a
10% surcharge is reasonable, fair, and fully supported by the
Bankruptcy Code and the facts.
The Debtor also requests that the Order be effective immediately by
providing that the 14-day stay is inapplicable and waived, so that
they may proceed as expeditiously as possible with the sales.
The Purchasers can be reached at:
ETS OILFIELD SERVICES, LP
P.O. Box 261080
Corpus Christi, TX 78426
Telephone: (361)767-4200
Facsimile: (361)767-4207
Mohamed Ashraf Soliman
Business Unit Manager
PICO TECHNOLOGIES, LLC
Telephone: (Mex) +52-1-9381527935
(USA) +1-832-302-2214
E-mail: mohamed.ashraf@pico.com.eg
About JPS Completion Fluids
JPS Completion Fluids, Inc., a domestic corporation with principal
place of business in Mathis, San Patricio County, Texas, provided
chemicals and other completion fluids for the oil and gas
industry.
JPS sought Chapter 11 protection (Bankr. W.D. Tex. Case No.
16-51110) on May 11, 2016. The petition was signed by Sergio
Garza, vice president. Judge Craig A. Gargotta is assigned to the
case.
Nathaniel Peter Holzer, Esq., at the Jordan Hyden Womble Culbreth
&
Holzer PC, serves as the Debtor's counsel.
The Debtor estimated assets and liabilities of $1 million to $10
million.
No official committee of unsecured creditors has been appointed in
the case.
KAISER GYPSUM: Asbestos PI Claimants Hire Caplin as Counsel
-----------------------------------------------------------
The Official Committee of Asbestos Personal Injury Claimants for
Kaiser Gypsum Company, Inc., asks the Bankruptcy Court to enter an
order authorizing the retention of Caplin & Drysdale, Chartered, as
its counsel.
The ACC anticipates that Caplin & Drysdale's services in the case
will include, inter alia, the following:
a) assisting and advising the ACC in its consultations with
the Debtors, unsecured creditors' committee, and the
Future Claimants' Representative (the "FCR"), relative to
the overall administration of the estate;
b) representing the ACC at hearings to be held before this
Court or Federal District Court or any appellate courts
and communicating with the ACC regarding the matters
heard and issues raised as well as the decisions and
considerations of this Court and any other courts;
c) assisting and advising the ACC in its examination and
analysis of the Debtors' conduct and financial affairs
and those of its affiliates;
d) reviewing and analyzing all applications, orders,
operating reports, schedules and statements of affairs
filed and to be filed with this Court by the Debtors or
other interested parties in this case; advising the ACC as
to the necessity and propriety of the foregoing and their
impact upon the rights of asbestos-related claimants, and
upon the case generally; and after consultation with and
approval of the ACC or its designee(s), consenting to
appropriate orders on its behalf or otherwise objecting
thereto;
e) assisting the ACC in preparing appropriate legal pleadings
and proposed orders as may be required in support of
positions taken by the ACC and preparing witnesses and
reviewing documents relevant thereto;
f) coordinating the receipt and dissemination of information
prepared by and received from the Debtors' independent
certified accountants or other professionals retained by
them as well as such information as may be received from
independent professionals engaged by the ACC, unsecured
creditors' committee (the "UCC"), and the FCR, as
applicable;
g) assisting the ACC in the solicitation and filing with the
Court of acceptances or rejections of any proposed plan or
plans of reorganization;
h) assisting and advising the ACC with regard to
communications to the asbestos-related claimants regarding
the ACC's efforts, progress and recommendation with
respect to matters arising in the case as well as any
proposed plan of reorganization; and
i) assisting the ACC generally by providing such other
services as may be in the best interest of the creditors
represented by the ACC.
The hourly rates applicable to the professionals proposed to
represent the ACC are:
Elihu Inselbuch Member $1,165
Ann C. McMillan Member $730
Kevin C. Maclay Member $620
Todd E. Phillips Member $525
Kevin M. Davis Associate $375
Sally J. Sullivan Associate $295
Cecilia Guerrero Paralegal $285
Brigette A. Wolverton Paralegal $240
Generally, Caplin & Drysdale's hourly rates are:
Members and Senior Counsel $510 - $1,250
Of Counsel $470 - $930
Associates $270 - $495
Paralegals $240 - $285
Ann C. McMillan, a member of Caplin & Drysdale, assures the Court
that his firm has no connections with the creditors, any other
party in interest, their respective attorneys and accountants, the
United States Trustee or any person employed in the office of the
United States Trustee.
The firm can be reached at:
Ann C. McMillan, Esq.
CAPLIN & DRYSDALE, CHARTERED
One Thomas Circle, NW, Suite 1100
Washington, D.C.
Tel: (202) 862-5080
E-mail: amcmillan@capdale.com
About Kaiser Gypsum
Kaiser Gypsum Company, Inc. and affiliate Hanson Permanente Cement,
Inc. sought protection under Chapter 11 of the Bankruptcy Code
(Bankr. W.D.N.C. Case Nos. 16-31602 and 16-10414) on Sept. 30,
2016. The petitions were signed by Charles E. McChesney, II,
vice-president and secretary.
The companies are represented by Rayburn Cooper & Durham P.A. and
Jones Day.
At the time of the filing, the companies estimated their assets and
liabilities at $100 million to $500 million.
Kaiser's principal business consisted of manufacturing and
marketing gypsum plaster, gypsum lath and gypsum wallboard. The
company has no current business operations other than managing its
legacy asbestos-related and environmental liabilities. The company
has no material tangible assets.
HPCI's primary business was the manufacture and sale of Portland
cement products. It is a wholly-owned, indirect subsidiary of
non-debtor Lehigh Hanson, Inc.
HPCI is the direct parent of Kaiser Gypsum as well as non-debtor
Hanson Micronesia Cement, Inc., and non-debtor Hanson Permanente
Cement of Guam, Inc., the operating subsidiaries. Non-debtor
Permanente Cement Company, which has no assets or operations, is
also a wholly-owned subsidiary of HPCI.
KAISER GYPSUM: Hires PricewaterhouseCoopers as Financial Advisor
----------------------------------------------------------------
Kaiser Gypsum Company, Inc., seeks entry of an order from the
Bankruptcy Court authorizing them to retain and employ
PricewaterhouseCoopers LLP ("PwC"), as financial advisors in the
chapter 11 cases as of the Petition Date.
PwC has provided one or more of the following services:
a) assisting the Debtors with the preparation of project
plans, including advice on timing of key milestones;
b) assisting the Debtors with assimilating information
responsive to discovery and other information requests;
c) assisting the Debtors with cash flow forecasts and budgets
for the proposed debtor-in-possession financing;
d) assisting the Debtors with the preparation of their
schedules of assets, statements of financial affairs, monthly
status reports and Rule 2015.3 reports;
e) assisting the Debtors with the reconciliation of any proofs
of claim filed in these cases;
f) assisting and advising the Debtors concerning the financial
terms and impact of any plan of reorganization proposed in these
cases; and
g) providing any other financial advisory services as may be
agreed upon by the Debtors and PwC from time to time.
Under the fee structure proposed in the Engagement Letter, PwC
professionals involved in this engagement will charge for services
rendered based on their customary hourly billing rates, which rates
are as follows:
Partner/Principal/MD $720 to $796
Director/Senior Manager $619
Manager $471
Senior Associate $387
Associate $334
Additionally, PwC will invoice the Debtors for its reasonable
out-of-pocket expenses incurred during these chapter 11 cases.
John D. Bittner, a partner of PricewaterhouseCoopers LLP, assures
the Court that his firm has no connections with the creditors, any
other party in interest, their respective attorneys and
accountants, the United States Trustee or any person employed in
the office of the United States Trustee.
The firm can be reached at:
John D. Bittner
PRICEWATERHOUSECOOPERS LLP
2001 Ross Avenue, Suite 1800
Dallas, Texas 75201
Tel: (214) 754 5019
About Kaiser Gypsum
Kaiser Gypsum Company, Inc., and affiliate Hanson Permanente
Cement, Inc. sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. W.D.N.C. Case Nos. 16-31602 and 16-10414) on Sept. 30,
2016. The petitions were signed by Charles E. McChesney, II,
vice-president and secretary.
The companies are represented by Rayburn Cooper & Durham P.A. and
Jones Day.
At the time of the filing, Kaiser and Hanson estimated their assets
and liabilities at $100 million to $500 million.
Kaiser's principal business consisted of manufacturing and
marketing gypsum plaster, gypsum lath and gypsum wallboard. The
company has no current business operations other than managing its
legacy asbestos-related and environmental liabilities. The company
has no material tangible assets.
HPCI's primary business was the manufacture and sale of Portland
cement products. It is a wholly-owned, indirect subsidiary of
non-debtor Lehigh Hanson, Inc.
HPCI is the direct parent of Kaiser Gypsum as well as non-debtor
Hanson Micronesia Cement, Inc. and non-debtor Hanson Permanente
Cement of Guam, Inc., the operating subsidiaries. Non-debtor
Permanente Cement Company, which has no assets or operations, is
also a wholly-owned subsidiary of HPCI.
KAISER GYPSUM: Hires PricewaterhouseCoopers as Financial Advisor
----------------------------------------------------------------
Kaiser Gypsum Company, Inc., seeks entry of an order from the
Bankruptcy Court authorizing them to employ PricewaterhouseCoopers
LLP ("PwC"), as financial advisors in the chapter 11 cases,
effective as of the Petition Date.
PwC has provided one or more of these services:
a) assisting the Debtors with the preparation of project plans,
including advice on timing of key milestones;
b) assisting the Debtors with assimilating information
responsive to discovery and other information requests;
c) assisting the Debtors with cash flow forecasts and budgets
for the proposed debtor-in-possession financing;
d) assisting the Debtors with the preparation of their schedules
of assets, statements of financial affairs, monthly status reports
and Rule 2015.3 reports;
e) assisting the Debtors with the reconciliation of any proofs
of claim filed in these cases;
f) assisting and advising the Debtors concerning the financial
terms and impact of any plan of reorganization proposed in these
cases; and
g) providing any other financial advisory services as may be
agreed upon by the Debtors and PwC from time to time.
Under the fee structure proposed in the Engagement Letter, PwC
professionals involved in this engagement will charge for services
rendered based on their customary hourly billing rates, which rates
are as follows:
Partner/Principal/MD $720 to $796
Director/Senior Manager $619
Manager $471
Senior Associate $387
Associate $334
Additionally, PwC will invoice the Debtors for its reasonable
out-of-pocket expenses incurred during these chapter 11 cases.
John D. Bittner, a partner of PricewaterhouseCoopers LLP, assures
the Court that his firm has no connections with the creditors, any
other party in interest, their respective attorneys and
accountants, the United States Trustee or any person employed in
the office of the United States Trustee.
The firm can be reached at:
John D. Bittner
PRICEWATERHOUSECOOPERS LLP
2001 Ross Avenue, Suite 1800
Dallas, Texas 75201
Tel: (214) 754 5019
About Kaiser Gypsum
Kaiser Gypsum Company, Inc. and affiliate Hanson Permanente Cement,
Inc., sought protection under Chapter 11 of the Bankruptcy Code
(Bankr. W.D.N.C. Case Nos. 16-31602 and 16-10414) on Sept. 30,
2016. The petitions were signed by Charles E. McChesney, II,
vice-president and secretary.
The companies are represented by Rayburn Cooper & Durham P.A. and
Jones Day.
At the time of the filing, the companies estimated their assets and
liabilities at $100 million to $500 million.
Kaiser's principal business consisted of manufacturing and
marketing gypsum plaster, gypsum lath and gypsum wallboard. The
company has no current business operations other than managing its
legacy asbestos-related and environmental liabilities. The company
has no material tangible assets.
HPCI's primary business was the manufacture and sale of Portland
cement products. It is a wholly-owned, indirect subsidiary of
non-debtor Lehigh Hanson, Inc.
HPCI is the direct parent of Kaiser Gypsum as well as non-debtor
Hanson Micronesia Cement, Inc. and non-debtor Hanson Permanente
Cement of Guam, Inc., the operating subsidiaries. Non-debtor
Permanente Cement Company, which has no assets or operations, is
also a wholly-owned subsidiary of HPCI.
KAISER GYPSUM: Seeks to Employ Rayburn Cooper as Co-Counsel
-----------------------------------------------------------
Kaiser Gypsum Company, Inc., asks the Bankruptcy Court for entry of
an order authorizing the employment of Rayburn Cooper & Durham,
P.A., effective as of the Petition Date as co-counsel for the
Debtors.
The professional services RCD are to render as co-counsel to the
Debtors include, without limitation:
a. to provide the Debtors legal advice with respect to its
powers and duties as debtors in possession in the continued
operation of its business and management of their properties;
b. to assist in taking all necessary action to protect and
preserve the Debtors' estates, including the prosecution of actions
on the Debtors' behalves, the defense of any actions commenced
against the Debtors, the negotiation of disputes in which the
Debtors are involved, and the preparation of objections to claims
filed against the Debtors' estates;
c. to prepare or assist in preparing on behalf of the Debtors
all necessary schedules, statements, applications, answers, orders,
reports, motions and notices in connection with the administration
of the estates of the Debtors;
d. to appear before this Court and such other courts as may be
appropriate to represent the interests of the Debtors in matters
that require representation and to represent and assist the Debtors
in negotiations with other parties in interests in the cases;
e. to advise and assist in formulating and preparing a plan of
reorganization on behalf of the Debtors, the related disclosure
statement, and any revisions, amendments relating to such
documents, and all related materials; and
f. to perform other legal services for Debtors which may be
necessary in the cases.
RCD has informed the Debtors that its billing rates for the year
2016 vary from:
Partners $290 to $675 per hour
Associates $225 to $255 per hour
Paraprofessionals $160 per hour
RCD will apply for fees on an hourly basis for its professionals
based upon its current schedule of hourly rates for 2016 plus
reimbursement of actual, necessary expenses and other charges that
RCD incurs.
John R. Miller, Jr., an attorney at RCD, assures the Court that his
firm has no connections with the creditors, any other
party-in-interest, their respective attorneys and accountants, the
U.S. Trustee or any person employed in the office of the United
States Trustee.
The firm can be reached at:
John R. Miller, Jr.
RAYBURN COOPER & DURHAM, P.A.
1200 Carillon, 227 W. Trade St.
Charlotte, NC 28202
Tel: (704) 334-0891
About Kaiser Gypsum
Kaiser Gypsum Company, Inc. and affiliate Hanson Permanente Cement,
Inc. sought protection under Chapter 11 of the Bankruptcy Code
(Bankr. W.D.N.C. Case Nos. 16-31602 and 16-10414) on September 30,
2016. The petitions were signed by Charles E. McChesney, II,
vice-president and secretary.
The companies are represented by Rayburn Cooper & Durham P.A. and
Jones Day.
At the time of the filing, the companies estimated their assets and
liabilities at $100 million to $500 million.
Kaiser's principal business consisted of manufacturing and
marketing gypsum plaster, gypsum lath and gypsum wallboard. The
company has no current business operations other than managing its
legacy asbestos-related and environmental liabilities. The company
has no material tangible assets.
HPCI's primary business was the manufacture and sale of Portland
cement products. It is a wholly-owned, indirect subsidiary of
non-debtor Lehigh Hanson, Inc.
HPCI is the direct parent of Kaiser Gypsum as well as non-debtor
Hanson Micronesia Cement, Inc. and non-debtor Hanson Permanente
Cement of Guam, Inc., the operating subsidiaries. Non-debtor
Permanente Cement Company, which has no assets or operations, is
also a wholly-owned subsidiary of HPCI.
KIRK'S FRAMING: U.S. Trustee Unable to Appoint Committee
--------------------------------------------------------
An official committee of unsecured creditors has not yet been
appointed in the Chapter 11 case of Kirk's Framing Inc. as of
October 31, according to a court docket.
Kirk's Framing Inc. filed a chapter 11 petition (Bankr. M.D. Fla.
Case No. 16-03390) on September 6, 2016, disclosing under $1
million in both assets and liabilities. The Debtor is represented
by Thomas C. Adam, Esq.
The Debtor is a Florida corporation based in Orange Park, Florida.
The Debtor is in the business of design and construction of wood
framing of residential real properties in Clay, Duval, St. Johns
and Nassau counties. The Debtor's services include floor joist,
roof, steps, and zipwall installations.
KIRWAN OFFICES: Shareholder Asks Court to Extend Exclusive Periods
------------------------------------------------------------------
Stephen Lynch, a shareholder of Debtor Kirwan Offices S.A.R.L.,
asks the U.S. Bankruptcy Court for the Southern District of New
York to extend the exclusive periods for the Debtor to file a
chapter 11 plan until 14 days after the Court decides on his motion
to dismiss the case.
Lynch asserts that his Dismissal Motion is largely premised on the
ground that the Debtor's involuntary chapter 11 case was filed in
bad faith by the Debtor's Financing Shareholders Lapidem Limited
and Mascini Holdings Limited, so that if the Court dismisses the
case or abstains, a plan will be unnecessary.
Lynch also asserts that he would vigorously oppose any plan that
the Financing Shareholders intend to file since it is a plan to
evade the restrictions contained in the Debtor's Shareholder
Agreement (which preclude them from settling pending litigation in
the Netherlands without Lynch's consent), and to obtain for
themselves and their principals full releases from any liability on
account of their actions, while preserving claims against Lynch for
seeking to enforce those restrictions.
Lynch relates that two days after the Petition Date, the Financing
Shareholders filed a motion to terminate Kirwan's exclusive period
to file a plan, explaining to the Court that they intended to file
a plan that would cancel "all stock in Kirwan" and dissolve
Kirwan's governance structure; terminate its shareholders'
governance rights; settle the Dutch litigation for $137.5 million;
bar "Mr. Lynch and all other persons from pursuing any litigation
against any of the settling parties in any forum on account of any
matter connected to the litigation and/or Kirwan;" and preserve the
Financing Shareholders' right to obtain standing to sue Mr. Lynch
for damages."
Lynch also relates that he filed a Dismissal Motion, seeking six
alternative forms of relief. Lynch adds that although the Court
denied with prejudice some of the relief requested, the Court,
however, expressly reserved its decision on Lynch's request to
dismiss the chapter 11 case under section 1112 of the Bankruptcy
Code and on related section 305 abstention/dismissal grounds.
Lynch also tells the Court that since entry of the Order for
Relief, Lynch has been working with the Financing Shareholders to
prepare a Stipulation of Facts and accompanying exhibits and a
briefing schedule for the remaining issues under the Dismissal
Motion and expect to coordinate a hearing date with the Chambers
soon.
Accordingly, an extension of exclusivity, which would otherwise
expire on Nov. 2, 2016, is necessary to prevent wasteful litigation
over such a plan that dismissal would render moot.
Attorneys for Stephen P. Lynch:
Richard Levin, Esq.
Stephen L. Ascher, Esq.
JENNER & BLOCK LLP
919 Third Avenue
New York, NY 10022-3908
Telephone: (212) 891-1600
Email: rlevin@jenner.com
sascher@jenner.com
About Kirwan Offices S.a r.l.
Kirwan Offices S.A.R.L. is a Luxembourg special-purpose entity
whose principal asset is a participatory (membership) interest in a
wholly-owned Russian subsidiary, OOO Promneftstroy. PNS is
currently involved in Dutch litigation against third parties in
which it seeks to recover assets worth nearly $1 billion. Kirwan's
carefully negotiated Shareholder Agreement requires unanimous
shareholder agreement to settle this litigation, as well as for
"any decision which would result in the Company's liquidation,
placing into receivership or administration of the Company."
Petitioning Creditors, Mascini Holdings Limited and Lapidem
Limited, filed an involuntary Chapter 11 Petition for Kirwan
Offices S.a r.l. (Bankr. S.D.N.Y. Case No. 16-22321) on March 15,
2016.
KISSNER HOLDINGS: Moody's Assigns B3 CFR; Outlook Positive
----------------------------------------------------------
Moody's Investors Service assigned a B3 corporate family rating and
a B3-PD probability of default rating to Kissner Holdings LP.
Moody's also assigned a B3 rating to the proposed $400 million
senior secured notes due 2022. The proceeds of the new notes will
be used to refinance existing debt at Kissner Milling Company
Limited and BSC Holding Inc and to fund a dividend distribution to
the sponsors Metalmark and SilverTree. The action effectively
moves the B3 corporate family rating to Kissner Holdings LP from
Kissner Milling Company Limited and revises the outlook to
positive. The existing B3 corporate family rating of Kissner
Milling Company Limited and other instrument ratings will be
withdrawn after the transaction closes.
Kissner Milling acquired BSC Holdings Inc. (BSC), which includes
the Lyons salt mine in Kansas and a bulk deicing salt business, in
October 2015. Previously, BSC was outside of the restricted group.
Under the new structure, earnings from BSC will be included in the
consolidated financials and will be used to support debt service on
the new notes.
Issuer: Kissner Holdings LP
Assignments:
Probability of Default Rating, Assigned B3-PD
Corporate Family Rating, Assigned B3
Senior Secured Regular Bond/Debenture, Assigned B3 (LGD4)
Outlook Actions:
Outlook, Assigned Positive
RATINGS RATIONALE
The B3 corporate family rating reflects high leverage, small scale
and limited product diversity as Kissner generates almost all of
its sales and earnings from the weather-dependent deicing salt
business. The rating reflects significant variability in earnings
and credit metrics which can be negatively affected by mild winters
in the Great Lakes, Great Plains, Midwest and East Coast regions.
Kissner's EBITDA in the twelve months ended July 31, 2016 has
declined due to a very mild 2015/2016 winter. Pro forma for the
new debt issuance, Moody's adjusted debt/EBITDA is 6.6 times in the
twelve months ended July 31, 2016. Kissner is in the process of
completing a new packaging facility near its Detroit salt mine
which should improve earnings of its packaging business. In
addition, Kissner's bulk deicing salt business is expected to
benefit from insourcing third-party salt purchases. If all
projected earnings improvements from a new packaging facility and
insourcing salt are included, Moody's adjusted debt/EBITDA is
approximately 5.5 times. These initiatives should improve BSC's
margins, which are currently significantly lower than Kissner's
legacy business. Pro forma for the new bond issuance, Moody's
expects debt/EBITDA could range between 4 times and 7 times
depending on winter conditions and the number of snowfall and icing
events. Moody's also expects the company to remain acquisitive,
which entails ongoing event and financial risks. The company is
expected to generate significant free cash flow during harsh
winters, so cash will likely accrue on the balance sheet over time
and ultimately be used for dividends or additional acquisitions.
The rating is supported by the addition of the Lyons Salt Mine and
Central Salt bulk deicing business to Kissner's existing low cost
Detroit Salt Mine and its existing packaging business. The
combination with BSC improves the company's operational, product
and geographic diversity. The rating is also supported by
projected free cash flow generation and good liquidity. Lack of
low cost alternatives to salt for deicing purposes and the need to
apply it during winter conditions ensure underlying demand for
Kissner's product, which supports the rating.
The positive outlook is based on Moody's expectations that Kissner
will be able to extract significant synergies from the combination
of two businesses, which could improve its metrics during mild and
harsh winters.
Moody's could upgrade the ratings if leverage declines below 5
times through a 2-5 year seasonal high/low cycle. The rating could
also be upgraded, if retained cash flow remains sustainably above
10% and the company maintains a conservative financial policy (i.e.
does not continually dividend out excess cash or lever up to take
advantage of improved earnings).
Moody's could downgrade the rating if operating conditions and
liquidity deteriorate such that fixed charge coverage declines
below 1.3 time. Moody's could also downgrade the rating if the
company undertakes a large debt-financed acquisition or another
dividend recapitalization.
Debt capital is currently comprised of an unrated $60 million
asset-based revolving credit facility due 2020 and $400 million
senior secured notes due 2022. The senior secured notes are rated
B3, at the same level as the corporate family rating. The notes
are guaranteed by all of the company's subsidiaries and secured by
substantially all assets including second priority in the
collateral securing the asset-based revolver (i.e. receivables and
inventory) and first priority interest in all other assets of the
issuer Kissner Holdings LP, co-borrowers Kissner Milling Company
Limited, Kissner USA Holdings Inc and BSC as well as all of the
subsidiaries.
Moody's expects Kissner to maintain good liquidity over the next 12
months. The company had approximately $18.5 million of cash on
hand as of July 31, 2016, and a proposed $60 million revolver due
in 2020. The company had approximately $11 million borrowings on
the revolver as of July 31, 2016. The company may borrow on the
revolver to fund seasonal working capital needs. The revolver is
not expected to have financial maintenance covenants. The revolver
and the notes are secured by substantially all assets leaving no
sources of additional liquidity.
The principal methodology used in these ratings was Global Chemical
Industry Rating Methodology published in December 2013.
Headquartered in Overland Park, Kansas, Kissner Holdings LP
operates two salt mines, one in Detroit, Michigan and another in
Lyons, Kansas. It also distributes bulk rock salt and packaged
deicing products in the Great Lakes, Great Plains, Midwest and East
Coast regions. Kissner is owned by an investor group comprised of
Metalmark Capital and SilverTree, a JV between Silverhawk Capital
Partners, and Demetree Salt, LLC. The company generated sales of
approximately $187 million in the twelve months ended July 31,
2016, pro forma for the combination with BSC.
KISSNER HOLDINGS: S&P Assigns 'B' CCR & Rates US$400MM Notes 'B'
----------------------------------------------------------------
S&P Global Ratings said it assigned its 'B' long-term corporate
credit rating to Ontario-based de-icing rock salt producer and
packager Kissner Holdings L.P. The outlook is stable.
At the same time, S&P Global Ratings assigned its 'B' issue-level
rating and '4' recovery rating to Kissner's proposed US$400 million
senior secured notes due 2022. The '4' recovery rating on the
senior secured notes indicates S&P's expectation for average
(30%-50%; at the lower end of the range) recovery under S&P's
simulated default scenario. S&P expects to withdraw its
issue-level and recovery ratings on Kissner Milling's US$220
million secured notes when they have been repaid.
"Our rating action follows the proposed dividend recapitalization
transaction the company announced and the new corporate structure
that now includes Kissner Milling and BSC Holding Inc. as wholly
owned subsidiaries of Kissner, the new rated entity," said S&P
Global Ratings credit analyst Michelle Dathorne. Our assessment of
the group's credit profile, pro forma the proposed debt issue and
dividend recapitalization, estimates leverage would deteriorate
following the transaction; however, we believe cash flow metrics
should remain within our current thresholds for the 'B' rating,"
Ms. Dathorne added.
The 'B' corporate credit rating on parent Kissner reflects S&P's
assessment of its two subsidiaries, Kissner Milling and BSC, as
core entities within the group, and S&P's assessment of the group's
financial risk profile as highly leveraged and business risk
profile as weak.
Although S&P estimates leverage will materially increase from
current levels following the proposed debt refinancing, S&P expects
cash flows to improve in fiscal 2018 and beyond, under S&P's
base-case assumption of normal weather patterns.
S&P assesses Kissner's business risk profile as weak based on the
company's small scale and limited product offering. S&P's highly
leveraged financial risk profile reflects its view that the
company's funds from operations (FFO)-to-debt will remain below 12%
based on the increase in debt following the transaction and S&P's
expectation of limited deleveraging as it believes any positive
free operating cash flow would likely fund increased dividend
payments or capital spending, rather than fund debt reduction.
The stable outlook reflects S&P's opinion that Kissner's cost
structure, EBITDA margins, cash flow generation, and associated
cash flow metrics will continue to support the 'B' rating during
our 12-month outlook period. Although S&P's estimated cash flow
metrics weaken pro forma the proposed refinancing--with fully
adjusted annual FFO to debt deteriorating to just below 5% in
fiscal 2017-- S&P expects cash flow metrics should strengthen in
the next fiscal year. As a result, Kissner should be able to
maintain its five-year, weighted-average FFO-to-debt ratio near
10%, which S&P views to be at the stronger end of the cash flow
ratio range indicative of a highly leveraged financial risk
profile.
S&P could lower the rating if Kissner's weighted-average,
FFO-to-debt ratio trended below 6%, and S&P expected the cash flow
metrics to remain below these levels. Cash flow metrics could
deteriorate due to unexpected dividend payouts or if the company is
unable to adjust its cost base in response to consecutive years of
mild winter weather conditions. S&P could also lower the rating if
Kissner's liquidity position deteriorated to a level S&P viewed to
be less than adequate.
An upgrade in the next 12 months is unlikely because S&P expects
the company will maintain credit measures consistent with a highly
leveraged financial risk profile for at least the next few years.
Nevertheless, S&P could raise the rating if it believed Kissner was
able to increase its five-year, weighted-average FFO-to-debt above
12%, and maintain its cash flow metrics at or above this level.
L&R DEVELOPMENT: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: L&R Development & Investment Corp.
Urb. Altaamonte #264
Camuy, PR 00627
Case No.: 16-08792
Chapter 11 Petition Date: November 1, 2016
Court: United States Bankruptcy Court
District of Puerto Rico (Old San Juan)
Judge: Hon. Brian K. Tester
Debtor's Counsel: Carmen D Conde Torres, Esq.
C. CONDE & ASSOC.
254 San Jose Street, 5th Floor
San Juan, PR 00901-1523
Tel: 787-729-2900
Fax: 787-729-2203
E-mail: condecarmen@condelaw.com
Total Assets: $3.05 million
Total Liabilities: $5.56 million
The petition was signed by Joaquin Lopez, president.
A copy of the Debtor's list of 20 largest unsecured creditors is
available for free at http://bankrupt.com/misc/prb16-08792.pdf
LEHMAN BROTHERS: Nov. 30 Supplemental Administrative Bar Date Set
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York set
Nov. 30, 2016, at 5:00 p.m. (prevailing Pacific Time) as the
deadline for person and entity to file supplemental administrative
proofs of claim for certain administrative expenses against Lehman
Brothers Inc. arising from Sept. 1, 2013, to Oct. 31, 2016.
To obtain a supplemental administrative proof of claim form and for
more information, please visit http://www.lehmantrustee.com. The
form may also be obtained by calling 1-866-841-7868 (domestic) or
1-503-597-7690 (international), or email at
teamlehman@hugheshubbard.com.
Counsel for James W. Giddens, trustee for the SIPA Liquidation of
Lehman Brothers Inc.:
Hughes Hubbard & Reed LLP
One Battery Park Plaza
New York, New York 10004
Tel: (212) 837-6000
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the
fourth largest investment bank in the United States. For more than
150 years, Lehman Brothers has been a leader in the global
financial markets by serving the financial needs of corporations,
governmental units, institutional clients and individuals
worldwide.
Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008
(Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition
disclosed US$639 billion in assets and US$613 billion in debts,
effectively making the firm's bankruptcy filing the largest in U.S.
history. Several other affiliates followed thereafter.
Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC
sought for bankruptcy protection in December 2009.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil,
Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell,
Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as
counsel to the Official Committee of Unsecured Creditors. Houlihan
Lokey Howard & Zukin Capital, Inc., is the Committee's investment
banker.
On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S.
District Court for the Southern District of New York, entered an
order commencing liquidation of Lehman Brothers, Inc., pursuant to
the provisions of the Securities Investor Protection Act (Case No.
08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee
for the SIPA liquidation of the business of LBI.
The Bankruptcy Court approved Barclays Bank Plc's purchase of
Lehman Brothers' North American investment banking and capital
markets operations and supporting infrastructure for US$1.75
billion. Nomura Holdings Inc., the largest brokerage house in
Japan, purchased LBHI's operations in Europe for US$2 plus the
retention of most of employees. Nomura also bought Lehman's
operations in the Asia Pacific for US$225 million.
Lehman emerged from bankruptcy protection on March 6, 2012, more
than three years after it filed the largest bankruptcy in U.S.
history. The Chapter 11 plan for the Lehman companies other than
the broker was confirmed in December 2011.
* * *
According to a report by Wall Street Journal Pro Bankruptcy, the
team winding down Lehman Brothers Holdings Inc. was slated to pay
out $3.8 billion to creditors in October 2016. This is the 11th
distribution since Lehman failed in 2008, and brings the total
payout to more than $113.6 billion. The bulk of the cash -- $83.6
billion -- has gone to pay so-called third-party, or non-Lehman
claims, WSJ related.
Bondholders were projected to receive about 21 cents on the dollar
when Lehman's bankruptcy plan went into effect in early 2012.
According to the WSJ report, Lehman said in a court filing that the
bondholders will have recovered more than 40 cents on the dollar
after the 11th distribution is completed; while general unsecured
creditors of Lehman's commodities unit will have received nearly 79
cents on the dollar following the latest distribution.
LENEXA HOTEL: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Lenexa Hotel, L.P.
730 New Hampshire Ste 206
Lawrence, KS 66044
Case No.: 16-22172
Chapter 11 Petition Date: November 1, 2016
Court: United States Bankruptcy Court
District of Kansas (Kansas City)
Debtor's Counsel: Jeffrey A. Deines, Esq.
LENTZ CLARK DEINES PA
9260 Glenwood
Overland Park, KS 66212
Tel: (913) 648-0600
Fax: (913) 648-0664
E-mail: jdeines@lcdlaw.com
- and -
Shane J. McCall, Esq.
LENTZ CLARK DEINES PA
9260 Glenwood
Overland Park, KS 66212
Tel: 913-648-0600
Fax: 913-648-0664
E-mail: smccall@lcdlaw.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by Stephen J. Craig, president, Ventura
Hotel Corporation, general partner.
A copy of the Debtor's list of 20 largest unsecured creditors is
available for free at http://bankrupt.com/misc/ksb16-22172.pdf
LEVEL 3 COMMUNICATIONS: Moody's Affirms Ba3 CFR; Outlook Stable
---------------------------------------------------------------
Moody's Investors Service affirmed Level 3 Communications, Inc.'s
Ba3 corporate family rating along with ratings of the company's
existing debt instruments, following the announcement of
CenturyLink, Inc.'s proposed acquisition of Level 3 (CenturyLink,
Ba2 under review down), in a cash and stock transaction which
values Level 3 at nearly $35 billion. As part of the same rating
action, Moody's affirmed Level 3's Ba3-PD probability of default
rating (PDR), SGL-2 speculative grade liquidity rating (indicating
good liquidity), and changed the company's ratings outlook to
stable from positive.
Bill Wolfe, a Moody's senior vice president, indicated that "The
ratings affirmation is based on our assessment that CenturyLink's
acquisition is not likely to cause any of Level 3's debt instrument
ratings to change." This followed a separate release in which
Moody's placed CenturyLink's ratings on review for downgrade from
Ba2, citing higher leverage related to the debt financing component
of the proposed transaction. Moody's noted that its review would
focus on the combined entity's leverage and cash flows, as well as
its growth potential and, based on the proposed transaction
structure, a downgrade of CenturyLink's CFR was expected to be
limited to one notch, to Ba3.
Wolfe also indicated that Level 3 would be part of an entity with,
potentially, the same Ba3 CFR as Level 3 has now, and debt holder
access to cash flow and assets would not change. "While Level 3
becomes part of a much larger entity that, given its substantial
scale and improved cost profile after synergies are realized, will
be better able to compete in the fixed-line enterprise
telecommunications market, the related benefits are at least
partially off-set by the likelihood that Level 3 will distribute
cash to its more highly levered parent to help service
acquisition-related debt." Wolfe also indicated that the
transaction will allow Level 3's large pool of net operating losses
to be monetized, augmenting free cash flow of the combined entity.
Level 3's ratings outlook was changed to stable from positive
because Level 3's debt instrument ratings are expected to survive
the acquisition at their prevailing levels and, in the intervening
period, Moody's expects Level 3's solid performance to continue,
thereby substantiating the existing Ba3 CFR as well as related
instrument ratings. Should the transaction proceed, Moody's
expects to withdraw Level 3's CFR, PDR, and SGL-2 speculative grade
liquidity rating concurrent with closing which, pending normal
regulatory approvals, is expected in the third quarter of 2017.
Level 3 Communications, Inc., headquartered in Broomfield,
Colorado, is a publicly traded international communications company
with one of the world's largest long-haul communications and
optical Internet backbones.
CenturyLink, Inc., headquartered in Monroe, Louisiana, is an
integrated communications company that provides an array of
communications services to residential, business, governmental and
wholesale customers.
This summarizes the rating actions and Level 3's ratings:
Issuer: Level 3 Communications, Inc.
Corporate Family Rating, Affirmed at Ba3
Probability of Default Rating, Affirmed at Ba3-PD
Speculative Grade Liquidity Rating, Affirmed at SGL-2
Outlook, Changed to Stable from Positive
Senior Unsecured Regular Bond/Debenture, Affirmed at B2 (LGD6)
Issuer: Level 3 Financing, Inc.
Senior Secured Bank Credit Facility, Affirmed at Ba1 (LGD2)
Senior Unsecured Regular Bond/Debenture, Affirmed at B1 (LGD5)
Outlook, Changed to Stable from Positive
Issuer: Level 3 Escrow II, Inc. (assumed by Level 3 Financing,
Inc.)
Senior Unsecured Regular Bond/Debenture, Affirmed at B1 (LGD5)
RATINGS RATIONALE
Level 3's Ba3 CFR is based on the company's solid business and
financial profile, Moody's expectation of modest margin improvement
as Internet Protocol-based services continue to replace legacy
services, and leverage of debt/EBITDA approaching 3.75x in 2017.
The rating is constrained by a lack of forwards earnings visibility
and off-market liquidity arrangements which rely solely on cash and
free cash flow. In the event of an acquisition by CenturyLink,
Level 3's debt instrument ratings are expected to survive at their
prevailing levels and, in the intervening period, Moody's expects
Level 3's solid performance to continue.
Level 3's liquidity is assessed as good, SGL-2, based on
expectations of free cash flow of about $1 billion over the next
year and the company having a June 30, 2016 cash balance of
$1.3 million. Moody's expects a telecommunications company of
Level 3's stature to maintain liquidity of between 10% and 15% of
its revenues, indicating that Moody's views the entirety of the
company's cash position as being integral to its liquidity. That
said, with no debt maturities until 2018 and with no financial
covenants to comply with, the combination of the cash on hand and
cash to be generated over the next year provide good liquidity.
Rating Outlook
The ratings outlook is stable because Level 3's instrument ratings
are, based on existing deal parameters, expected to remain
unchanged following the company's acquisition by CenturyLink and,
in the intervening period, ratings are supported by Level 3's
ongoing solid performance and leverage of debt/EBITDA trending
towards 3.75x.
What Could Change the Rating -- Up
Continued solid operating performance and margin expansion
Solid liquidity arrangements
Leverage of Debt/EBITDA approaching 3.5x on a sustainable basis
(4.3x at 30Jun16)
Free Cash Flow/Debt approaching 10% on a sustainable basis (7.4%
at June 30, 2016,)
What Could Change the Rating -- Down
Debt/EBITDA sustained above 4.5x (4.3x at 30Jun16)
Free Cash Flow/Debt sustained below 5% (7.4% at 30Jun16)
Deteriorating business performance including elevated churn and
integration set-backs
Weaker liquidity arrangements
The principal methodology used in these ratings was Global
Telecommunications Industry published in December 2010.
Corporate Profile
Headquartered in Broomfield, Colorado, Level 3 Communications, Inc.
is a publicly traded international communications company with one
of the world's largest long-haul communications and optical
Internet backbones. Level 3's 2016 revenue is expected to be
approximately $8.5 billion and annual (Moody's adjusted) EBITDA to
be $3.2 billion.
LEVEL 3 COMMUNICATIONS: S&P Affirms 'BB' CCR; Outlook Stable
------------------------------------------------------------
S&P Global Ratings said it affirmed its 'BB' corporate credit
rating on Broomfield, Colo.-based Level 3 Communications Inc. The
outlook is stable.
At the same time, S&P placed its 'BB+' issue-level rating on Level
3's senior secured debt at wholly owned subsidiary Level 3
Financing Inc. on CreditWatch with positive implications. The '2'
recovery rating on this debt indicates S&P's expectation for
substantial (70%-90%; upper half of the range) recovery of
principal in the event of a payment default.
In addition, S&P placed its 'B+' rating on Level 3 Financing and
Level 3 Escrow II Inc.'s senior unsecured debt on CreditWatch with
positive implications. The recovery rating on this debt is '6',
which indicates S&P's expectation for negligible (0%-10%) recovery
of principal in the event of a payment default.
"The rating affirmation is based on our favorable view of the
combined business, which we expect will have increased economies of
scale, a larger domestic and global reach to better service
enterprise customers, and an enhanced product portfolio offering to
better serve the enterprise market," said S&P Global Ratings credit
analyst Scott Tan.
Moreover, the combination of Level 3's dense metro and long haul
fiber assets with CenturyLink's local market facilities should
offer meaningful operating synergies and improved coverage.
The stable rating outlook reflects S&P's expectation that Level 3
will continue to grow revenue and EBITDA over the next year from
customer growth and the upselling of its existing customer base to
new IP-based telecommunications products and services, as well as
cost synergies from the TW Telecom acquisition, such that adjusted
leverage remains below 4x prior to acquisition close date.
LIFE PARTNERS: Bankruptcy Court Confirms Reorganization Plan
------------------------------------------------------------
H. Thomas Moran II, Chapter 11 trustee for Life Partners Holdings,
Inc. (LPHI), on Nov. 1, 2016, disclosed that the U.S. Bankruptcy
Court for the Northern District of Texas has entered an order
confirming the joint plan of reorganization for LPHI and its
subsidiaries. The plan was sponsored by Mr. Moran and the Official
Committee of Unsecured Creditors in the Life Partners bankruptcy
case.
The confirmation by United States Bankruptcy Judge Russell F. Nelms
follows a contested confirmation hearing that spanned five weeks
and clears the way for implementation of the plan and the creation
of two new entities, Life Partners Position Holder Trust and Life
Partners Creditors' Trust. The plan offers relief for more than
22,000 investors and preserves a $2.4 billion portfolio of life
insurance policies. More than $1.4 billion of investor money
remains at risk.
"[Tues]day's order is a tremendous victory for the investors we
have been working so hard to protect," said Mr. Moran. "We are
delighted to have joined with the Committee in obtaining
confirmation of a plan which projects a substantial recovery for
our investors -- 90 percent of invested capital on average over
time."
"Under the plan, investors have selected among various options for
the recovery of their investments, including options that enable
investors to avoid the financial burden of paying any further
insurance premiums," Mr. Moran continued. "Those investors who
choose to tie their returns to individual policies are permitted to
do so."
The plan will be implemented in collaboration with the Committee
and Vida Capital, Inc., which has agreed to act as the policy
servicer and investor account administrator. Vida has also agreed
to provide exit financing so that the Position Holder Trust can
emerge from bankruptcy and maturity funds can be distributed to
fractional holders as soon as possible.
The Position Holder Trust will oversee the liquidation of the
policy portfolio and distribution of the net proceeds to investors.
The Creditors' Trust will pursue litigation, including claims
previously brought against insiders at Life Partners, certain
individuals and entities who received monies from the fraudulent
enterprise, and others against whom the investors or the company
may have a right to recover. The plan provides recoveries from
such litigation will be distributed to investors and other
creditors.
In early 2015, in the wake of a more than $46.8 million Securities
and Exchange Commission judgment against LPHI and its senior
executives for engaging in securities laws violations, LPHI's
former management put the company in bankruptcy. After a lengthy
and detailed investigation, Mr. Moran concluded in his official
report to the Bankruptcy Court that, prior to the filing of the
bankruptcy case, Life Partners engaged in "one of the largest and
longest standing fraud schemes ever perpetrated in this State."
The LPHI reorganization plan is filed in the United States
Bankruptcy Court for the Northern District of Texas – Fort Worth
Division. For more information, including copies of the confirmed
plan, please visit http://dm.epiq11.com/LFP
The Chapter 11 trustee is represented by David M. Bennett, Richard
B. Roper, and Katharine Battaia Clark of Thompson & Knight LLP.
About Thompson & Knight
Thompson & Knight -- http://www.tklaw.com/-- is a full-service law
firm with more than 300 attorneys. Since its establishment in
1887, the Firm has been providing legal solutions to clients and
communities around the world.
About Life Partners Holdings
Headquartered in Waco, Texas, Life Partners Holdings, Inc. --
http://www.lphi.com/-- is the parent company engaged in the
secondary market for life insurance, commonly called "life
settlements." Since its incorporation in 1991, Life Partners,
Inc., has completed over 162,000 transactions for its worldwide
client base of over 30,000 high net worth individuals and
institutions in connection with the purchase of over 6,500 policies
totaling over $3.2 billion in face value.
LPHI is a publicly traded company incorporated in Texas and its
common stock has been delisted from the NASDAQ (formerly trading
under the symbol LPHI).
Life Partners Holdings sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. N.D. Tex. Case No. 15-40289) on Jan. 20,
2015.
The case is assigned to Judge Russell F. Nelms. J. Robert Forshey,
Esq., at Forshey & Prostok, LLP, serves as counsel to the Debtor.
LPHI disclosed $2,406,137 in assets and $52,722,308 in liabilities
as of the Chapter 11 filing.
The official committee of unsecured creditors formed in the case
tapped Munsch Hardt Kopf & Harr, P.C., as counsel.
Tracy A. Bolt of BDO USA, LLP was named as examiner for the
Debtor's case. At the behest of the U.S. Securities and Exchange
Commission, the U.S. Trustee, and the Creditors Committee, the
Court ordered the appointment of a Chapter 11 trustee. On March
13, 2015, H. Thomas Moran II was appointed as Chapter 11 trustee in
LPHI's case. The trustee is represented by Thompson & Knight LLP.
The Chapter 11 trustee signed Chapter 11 bankruptcy petitions for
LPHI's subsidiaries on May 19, 2015: Life Partners Inc. (Case No.
15-41995) and LPI Financial Services, Inc. (Case No. 15-41996).
Life Partners is estimated to have $100 million to $500 million in
assets and more than $1 billion in debt. LPI Financial estimated
less than $50,000.
LYONDELL CHEMICAL: Court Upholds Reinstatement of Claw Back Suit
----------------------------------------------------------------
Judge Denise Cote of the United States District Court for the
Southern District of New York denied the shareholder defendants'
August 10, 2016 motions for reconsideration and certification in
the case captioned EDWARD S. WEISFELNER, as Litigation Trustee of
the LB Litigation Trust Trustee, v. HOFMANN, et al. Shareholders,
No. 16cv518 (DLC) (S.D.N.Y.).
This case arises out of the 2007 merger of Lyondell Chemical
Company, and an indirect subsidiary of the large publiclytraded
petrochemicals company Basell AF S.C.A., a Luxembourg entity
controlled by billionaire investor Leonard Blavatnik. It is
alleged that, in May 2007, after receiving notice that Blavatnik
had acquired a 10% toehold position in Lyondell, Lyondell's CEO and
Board Chairman, Dan Smith, instructed management to "refresh" the
company's financial projections. Per Smith's instructions,
management improperly added nearly $2 billion of additional total
company earnings before interest, tax, depreciation and
amortization ("EBITDA") to its 2007 Long Range Plan. Smith
presented these inflated projections to the Board and used them as
well to negotiate a higher offer from Blavatnik. Smith presented
Blavatnik's offer to the Lyondell Board for its consideration and
approval in mid-July. The Lyondell Board unanimously voted to
approve the merger.
After the deal closed in December, Lyondell, which had taken on
approximately $21 billion of secured indebtedness from Blavatnik's
creditors, paid its shareholders $12.5 billion (the "Shareholder
Payments"). As a Board member, Smith received over $100 million in
merger-related consideration. In January 2009, after laboring under
negative liquidity, lower oil prices and other adverse
developments, Lyondell filed for chapter 11 protection. In re
Lyondell Chem. Co., No. 09-10023 (Bankr. S.D.N.Y. Jan. 6, 2009).
The bankruptcy court appointed a Trustee to litigate on behalf of
the unsecured creditors. The Trustee now seeks to claw back
Shareholder Payments pursuant to an intentional fraudulent transfer
claim brought under 11 U.S.C. § 548(a)(1)(A).
The bankruptcy court has twice dismissed the Trustee's intentional
fraudulent transfer claim against Lyondell. the Trustee had failed
to plead "the intent of a critical mass of Board members who might
have that [fraudulent] intent on their own" or that Smith or
another, by "reason of the ability to control them, had caused the
critical mass to form that intent."
On July 27, 2016, this Court reversed the bankruptcy court's
Lyondell II decision and reinstated the intentional fraudulent
conveyance claim. After surveying the corpus of Delaware agency
law, as well as relevant Restatement sections, this Court held that
"Smith's knowledge and intent may be imputed to Lyondell." The
Court also found that the Trustee had pleaded facts sufficient to
support its intentional fraudulent conveyance claim.
The defendants filed a motion for reconsideration, or in the
alternative, for certification pursuant to 28 U.S.C. Section
1929(b).
Judge Cote held that the motion for reconsideration fails to point
to any matter or binding authority overlooked by the Court in its
initial disposition of the case, and was denied.
Judge Cote also denied the motion for certification because the
defendants have failed to establish that there is substantial
ground for difference of opinion on a controlling question of law.
A full-text copy of Judge Cote's October 5, 2016 opinion and order
is available at https://is.gd/5WlfcZ from Leagle.com.
Edward S. Weisfelner, Appellant, represented by May Orenstein --
morenstein@brownrudrick.com -- Brown Rudnick LLP.
Edward S. Weisfelner, Appellant, represented by Sigmund Samuel
Wissner-Gross -- swissnergross@brownrudrick.com -- Brown Rudnick
LLP.
Doft and Co., Inc., Elisabeth H. Doft, MJR Partners, RBC Dominion
Securities, HBK Master Fund L.P., Affiliate of Mutual Fund 12,
Affiliate of Broker-Dealer 1, Affiliate of Broker-Dealer 2,
Affiliate of Broker-Dealer 3, Affiliate of Corporation 1,
Corporation 5, Corporation 6, Affiliate of Mutual Fund 7, Fund 5,
Fund 6, Fund 7, Fund 8, Fund 9, Fund 10, Fund 11, Fund 12, Fund 13,
Fund 14, BellSouth Corporation Representable Employees Health Care
Trust- Retirees, BellSouth Corporation RFA VEBA Trust, NBCN, Inc.,
Affiliate of Mutual Fund 10, Bank 3, Bank 4, Bank 5,
Appellees, represented by Philip David Anker --
philip.anker@wilmerhale.com -- Wilmer Cutler Pickering Hale and
Dorr LLP, Ross Eric Firsenbaum -- ross.firsenbaum@wilmerhale.com --
Wilmer Cutler Pickering Hale and Dorr LLP, Andrew Easton Glantz --
andrew.glantz@wilmerhale.com -- Wilmer Cutler Pickering Hale & Dorr
LLP, Ari Joseph Savitzky -- ari.savitzky@wilmerhale.com -- Wilmer
Cutler Pickering Hale & Dorr LLP, Hanna A. Baek --
hanna.baek@wilmerhale.com -- Wilmer Cutler Pickering Hale and Dorr
& Michael A. Guippone -- michael.guippone@wilmerhale.com -- Wilmer
Cutler Pickering Hale & Dorr LLP.
Alfred R Hoffmann Charles Schwab & Co Inc Cust IRA Contributory,
Appellee, represented by Sandra Dawn Grannum --
sandra.grannum@dbr.com -- Drinker Biddle & Reath, LLP.
Alpine Associates, Appellee, represented by Jeanette Rodriguez,
Thompson Hine LLP, Joseph William Muccia --
joe.muccia@thompsonhine.com -- Thompson Hine LLP, Norman Arthur
Bloch -- norman.bloch@thompsonhine.com -- Thompson Hine LLP & Shaun
David McElhenny -- shaun.mcelhenny@thompsonhine.com -- Thompson
Hine LLP.
Arbor Place Limited Partnership, Appellee, represented by William
A. Rome, Robinson Brog Leinwand Greene Genovese & Gluck PC.
Bellsouth Group Life Trust - S& A/K/A Bellsouth Corporation RFA
Veba Trust, BellSouth Healthcare S&P 400 A/K/A BellSouth
Corporation Representable Employees Health Care Trust-Retirees,
Broker-Dealer 1, Broker-Dealer 2, Broker-Dealer 3, Corporation 1,
Appellees, represented by Ari Joseph Savitzky, Wilmer Cutler
Pickering Hale & Dorr LLP, Hanna A. Baek, Wilmer Cutler Pickering
Hale and Dorr, Peter J. Macdonald, Wilmer Cutler Pickering Hale and
Dorr LLP, Philip David Anker, Wilmer Cutler Pickering Hale and Dorr
LLP & Ross Eric Firsenbaum, Wilmer Cutler Pickering Hale and Dorr
LLP.
Bernard v Fultz Trustee U/W Anderson B Kibble, Appellee,
represented by Conrad K. Chiu, Pryor Cashman LLP.
Cato Enterprises LLC Arbitrage Account, Appellee, represented by
Craig Scott Hilliard, Stark & Stark, P.C..
Corporation 2, Appellee, represented by David Barry Schwartz,
Norton Rose Fulbright US LLP.
Corporation 4, Appellee, represented by Brian David Koosed, K&L
Gates LLP, Richard S. Miller, K&L Gates LLP & Robert T. Honeywell,
K&L Gates LLP.
Credit Agricole Securities (USA) Inc. f/k/a Calyon Securities (USA)
Inc., Appellee, represented by Ana M. Alfonso, Willkie Farr &
Gallagher LLP.
Denis Patrick Kelleher, Esq. PLLC, Appellee, represented by Denis
Patrick Kelleher, Jr., Clayman & Rosenberg.
Diane L. Abbey, Appellee, represented by Karin Elizabeth Fisch,
Abbey Spanier, LLP.
Doft & Co., Inc. Firm Account, Appellee, represented by Ari Joseph
Savitzky, Wilmer Cutler Pickering Hale & Dorr LLP, Hanna A. Baek,
Wilmer Cutler Pickering Hale and Dorr, Peter J. Macdonald, Wilmer
Cutler Pickering Hale and Dorr LLP, Philip David Anker, Wilmer
Cutler Pickering Hale and Dorr LLP & Ross Eric Firsenbaum, Wilmer
Cutler Pickering Hale and Dorr LLP.
Donald M Balcuns Living Trust Donald M Balcuns and Jennie Anne
Balcuns, Appellee, represented by Jonathan S. Pasternak, DelBello
Donnellan Weingarten Wise & Wiederkehr, L.L.P..
Douglas Light & Judith Light Trustees of the Douglas M. & Judith A.
Light Rev U/A Dated 02/06/1995, Appellee, represented by Bradley S.
Defoe, Varnum LLP, pro hac vice.
Equity Overlay Fund LLC, Appellee, represented by Richard S.
Miller, K&L Gates LLP, Robert T. Honeywell, K&L Gates LLP & Ryan M.
Tosi, K & L Gates LLP.
F/A/O FNY SEC/HLW Group, also known as First New York Securities
LLC, Appellee, represented by Ari Joseph Savitzky, Wilmer Cutler
Pickering Hale & Dorr LLP, Hanna A. Baek, Wilmer Cutler Pickering
Hale and Dorr, Peter J. Macdonald, Wilmer Cutler Pickering Hale and
Dorr LLP, Philip David Anker, Wilmer Cutler Pickering Hale and Dorr
LLP & Ross Eric Firsenbaum, Wilmer Cutler Pickering Hale and Dorr
LLP.
Family Foundation 2, Appellee, represented by Christopher Charles
Gartman, Hughes Hubbard & Reed LLP, David Parker,
Kleinberg,Kaplan,Wolff & Cohen,P.C., Kathryn Anne Coleman, Hughes
Hubbard & Reed LLP & Matthew J. Gold, Kleinberg,Kaplan,Wolff &
Cohen,P.C..
Farallon Capital, Appellee, represented by David Parker,
Kleinberg,Kaplan,Wolff & Cohen,P.C. & Matthew J. Gold,
Kleinberg,Kaplan,Wolff & Cohen,P.C..
Fifth Third Bank, Appellee, represented by Conrad K. Chiu, Pryor
Cashman LLP & Ronald S. Beacher, Day Pitney, L.L.P..
Financial Advisor 3, Appellee, represented by Anthony Sharett,
Baker & Hostetler LLP, pro hac vice, Jacqueline Matthews, Baker &
Hostetler LLP, pro hac vice & James Kevin Haney, Wong Fleming,
P.C..
First NY Securities / Britally Capital A/K/A First New York
Securities, LLC, Fund 4, Appellees, represented by Ari Joseph
Savitzky, Wilmer Cutler Pickering Hale & Dorr LLP, Hanna A. Baek,
Wilmer Cutler Pickering Hale and Dorr, Peter J. Macdonald, Wilmer
Cutler Pickering Hale and Dorr LLP, Philip David Anker, Wilmer
Cutler Pickering Hale and Dorr LLP & Ross Eric Firsenbaum, Wilmer
Cutler Pickering Hale and Dorr LLP.
Fund 1, Fund 23, Appellees, represented by Bonnie K. Steingart,
Fried, Frank, Harris, Shriver & Jacobson LLP & Julia V.
Smolyanskiy, Fried, Frank, Harris, Shriver & Jacobson LLP.
Fund 33, Appellee, represented by David Steve Mordkoff, Proskauer
Rose LLP, Harry Frischer, Proskauer Rose LLP & Stephen Leonard
Ratner, Proskauer Rose LLP.
Gabelli Associates, Appellee, represented by Andrew J. Entwistle,
Entwistle & Cappucci LLP & Vincent Roger Cappucci, Entwistle &
Cappucci LLP.
Geza Szayer Paulette Szayer, Appellee, represented by William A.
Rome, Robinson Brog Leinwand Greene Genovese & Gluck PC.
Dudley C. Mecum, Family Foundation 1, Fund 2, Harold S. Hook, HTB
Investments LLC, Individual 11, Appellees, represented by John F.
Higgins, Jackson Lewis P.C..
Harvest AA Capital LP, Harvest Capital LP, Appellees, represented
by Brian Theodore Kohn, Schulte, Roth & Zabel LLP.
Individual 15, Appellee, represented by Ari Joseph Savitzky, Wilmer
Cutler Pickering Hale & Dorr LLP, Hanna A. Baek, Wilmer Cutler
Pickering Hale and Dorr, Peter J. Macdonald, Wilmer Cutler
Pickering Hale and Dorr LLP, Philip David Anker, Wilmer Cutler
Pickering Hale and Dorr LLP & Ross Eric Firsenbaum, Wilmer Cutler
Pickering Hale and Dorr LLP.
Individual 13, Individual 17, Individual 20, Individual 21,
Individual 25, Appellees, represented by Christopher Charles
Gartman, Hughes Hubbard & Reed LLP & Kathryn Anne Coleman, Hughes
Hubbard & Reed LLP.
Individual 19, Appellee, represented by Christopher Charles
Gartman, Hughes Hubbard & Reed LLP, David Parker,
Kleinberg,Kaplan,Wolff & Cohen,P.C., Kathryn Anne Coleman, Hughes
Hubbard & Reed LLP & Matthew J. Gold, Kleinberg,Kaplan,Wolff &
Cohen,P.C..
Individual 22, Appellee, represented by Christopher Charles
Gartman, Hughes Hubbard & Reed LLP, John F. Higgins, Jackson Lewis
P.C. & Kathryn Anne Coleman, Hughes Hubbard & Reed LLP.
Individual 23, Appellee, represented by Bonnie K. Steingart, Fried,
Frank, Harris, Shriver & Jacobson LLP, Christopher Charles Gartman,
Hughes Hubbard & Reed LLP, Julia V. Smolyanskiy, Fried, Frank,
Harris, Shriver & Jacobson LLP & Kathryn Anne Coleman, Hughes
Hubbard & Reed LLP.
Individual 24, Appellee, represented by Bonnie K. Steingart, Fried,
Frank, Harris, Shriver & Jacobson LLP & Julia V. Smolyanskiy,
Fried, Frank, Harris, Shriver & Jacobson LLP.
Individual 26, Individual 4, Individual 5, Appellees, represented
by David Parker, Kleinberg,Kaplan,Wolff & Cohen,P.C. & Matthew J.
Gold, Kleinberg,Kaplan,Wolff & Cohen,P.C..
Individual 27, Appellee, represented by Sandra Dawn Grannum,
Drinker Biddle & Reath, LLP.
Individual 3, Appellee, represented by Christopher Charles Gartman,
Hughes Hubbard & Reed LLP, David Parker, Kleinberg,Kaplan,Wolff &
Cohen,P.C., Kathryn Anne Coleman, Hughes Hubbard & Reed LLP &
Matthew J. Gold, Kleinberg,Kaplan,Wolff & Cohen,P.C..
Individual 6, Individual 8, Individual 9, Appellees, represented by
Christopher Charles Gartman, Hughes Hubbard & Reed LLP & Kathryn
Anne Coleman, Hughes Hubbard & Reed LLP.
James Floyd Bisset Charles Schwab & Co Inc Cust IRA Contributory,
Joseph DiBenedetto Jr Trustee of the Joseph DiBenedetto Jr MD Inc
Def Cont U/A Dated 10/01/84 Account 1, Mary B Ord UTA Charles
Schwab & Co Inc IRA Contributory Dated 10/06/91, Michael Jarrett
IRA, Lampost Blue Chip Fund LP, Kermit R. Meade, Appellees,
represented by Sandra Dawn Grannum, Drinker Biddle & Reath, LLP.
James Siegel, Appellee, represented by Jonathan S. Pasternak,
DelBello Donnellan Weingarten Wise & Wiederkehr, L.L.P..
John Deere Pension Trust, Appellee, represented by Richard S.
Miller, K&L Gates LLP & Ryan M. Tosi, K & L Gates LLP.
KDC Merger Arbitrage Fund, LP, Appellee, represented by Guy
Petrillo, Petrillo Klein & Boxer LLP & Daniel Zachary Goldman,
Petrillo Klein LLP.
Kirk E Heyne & Karen A Twitchell Ten/Com, Appellee, represented by
John F. Higgins, Jackson Lewis P.C..
Litespeed Master Fund Ltd., Appellee, represented by David Parker,
Kleinberg,Kaplan,Wolff & Cohen,P.C. & Matthew J. Gold,
Kleinberg,Kaplan,Wolff & Cohen,P.C..
Jennie Anne Balcuns and Donald M Balcuns, Appellee, represented by
Jonathan S. Pasternak, DelBello Donnellan Weingarten Wise &
Wiederkehr, L.L.P..
M Hakan & R Salkin Trustees of the Michael J. Hakan Charitable Re
U/A Dated 12/20/1995, Appellee, represented by William A. Rome,
Robinson Brog Leinwand Greene Genovese & Gluck PC.
Mutual Fund 10, Mutual Fund 12, Appellees, represented by Ari
Joseph Savitzky, Wilmer Cutler Pickering Hale & Dorr LLP, Hanna A.
Baek, Wilmer Cutler Pickering Hale and Dorr, Peter J. Macdonald,
Wilmer Cutler Pickering Hale and Dorr LLP, Philip David Anker,
Wilmer Cutler Pickering Hale and Dorr LLP & Ross Eric Firsenbaum,
Wilmer Cutler Pickering Hale and Dorr LLP.
Mutual Fund 20, Mutual Fund 21, Mutual Fund 22, Mutual Fund 23,
Mutual Fund 24, Mutual Fund 25, Mutual Fund 26, Mutual Fund 27,
Mutual Fund 28, Mutual Fund 29, Appellees, represented by Michael
S. Doluisio, Dechert LLP, pro hac vice.
Mutual Fund 5, Mutual Fund 6, Appellees, represented by Alan W.
Kornberg, Paul, Weiss, Rifkind, Wharton & Garrison LLP.
Mutual Fund 7, NBCN Inc., Appellees, represented by Ari Joseph
Savitzky, Wilmer Cutler Pickering Hale & Dorr LLP, Hanna A. Baek,
Wilmer Cutler Pickering Hale and Dorr, Peter J. Macdonald, Wilmer
Cutler Pickering Hale and Dorr LLP, Philip David Anker, Wilmer
Cutler Pickering Hale and Dorr LLP & Ross Eric Firsenbaum, Wilmer
Cutler Pickering Hale and Dorr LLP.
Neil T Eigen & Patricia S Eigen Jt Ten, Neil T Eigen Charles Schwab
& Co Inc Cust IRA Rollover, Appellees, represented by Eduardo Jorge
Glas, Tseitlin & Glas, P.C..
Noonday Capital Partners LLC, Appellee, represented by David
Parker, Kleinberg, Kaplan, Wolff & Cohen,P.C. & Matthew J. Gold,
Kleinberg, Kaplan, Wolff & Cohen,P.C..
Ohio Carpenters MidCap, also known as Ohio Carpenters' Pension
Fund, Appellee, represented by John Winship Read, Vorys, Sater,
Seymour & pease & Robert Alan Koenig, Shumaker, Loop & Kendrick,
LLP.
OP&F / Intech, Pension Fund 1, Pension Fund 2, Appellees,
represented by Daniel R. Swetnam, Schwartz, Kelm, Warren & Ramirez,
pro hac vice.
Pension Fund 3, Appellee, Pro se.
Pension Fund 4, Pension Fund 5, Appellees, represented by Patrick
Sibley, Pryor Cashman LLP.
Pension Fund 6, Appellee, represented by Paulina Stamatelos, New
York State Attorney General's Office.
Peter Randall Zierhut Gayle M Zierhut Jt Ten, Appellee, represented
by William A. Rome, Robinson Brog Leinwand Greene Genovese & Gluck
PC.
Primevest Financial Services, Appellee, represented by William Hao,
Alston & Bird, LLP.
PSAM Europe Master Fund, Ltd., PSAM World Arbritrage Master Fund
Ltd., Appellees, represented by Ana M. Alfonso, Willkie Farr &
Gallagher LLP.
Rangeley Capital Partners LP, Appellee, represented by Mark Joseph
Hyland, Seward & Kissel LLP.
Redbourn Partners Ltd., Appellee, represented by Richard S. Miller,
K&L Gates LLP & Ryan M. Tosi, K & L Gates LLP.
Robert Emery & Dana Emery, Trustees of the Robert L & Dana M Emery
Family U/A Dated 06/22/1998, Appellee, represented by Sandra Dawn
Grannum, Drinker Biddle & Reath, LLP.
Sacramento Employees Retirement System Russell, Appellee,
represented by Melvin Arnold Brosterman, Stroock & Stroock & Lavan
LLP & Patrick Nicholas Petrocelli, Stroock & Stroock & Lavan LLP.
Sanford Saul Wadler, Appellee, represented by Robert N. H.
Christmas, Nixon Peabody LLP.
Sano Investments LLC, Appellee, represented by Douglas R. Hirsch,
Sadis & Goldberg & Jennifer Amy Rossan, Sadis & Goldberg.
Skylands Special Investment LLC, Appellee, represented by Robert
Anthony Gretch, Kirkland & Ellis LLP.
State Teachers Retirement System, Appellee, represented by Conrad
K. Chiu, Pryor Cashman LLP & Ronald S. Beacher, Day Pitney,
L.L.P..
Sumitomo Trust & Banking, Appellee, represented by Jordan E. Stern,
Becker, Glynn, Muffly, Chassin & Hosinski LLP.
Thomas Gwinford Barton Charles Schwab & Co Inc Cust IRA Rollover,
Timothy Ord & Mary B Ord Jt Ten, Timothy Ord UTA Charles Schwab &
Co Inc IRA Contributory Dated 10/04/91, Timothy Ord UTA Charles
Schwab & Co Inc IRA Rollover Dated 01/14/97, Appellees, represented
by Sandra Dawn Grannum, Drinker Biddle & Reath, LLP.
Timber Hill LLC, Appellee, represented by Guy Petrillo, Petrillo
Klein & Boxer LLP & Daniel Zachary Goldman, Petrillo Klein LLP.
Tinicum Partners, L.P., Appellee, represented by David Parker,
Kleinberg,Kaplan,Wolff & Cohen,P.C. & Matthew J. Gold,
Kleinberg,Kaplan,Wolff & Cohen,P.C..
Touradji Diversified Master Fund Ltd., Touradji Global Resources
Master Fund, Ltd., Appellees, represented by Ana M. Alfonso,
Willkie Farr & Gallagher LLP.
Track Data Corporation, Appellee, represented by Robert P. Bramnik,
Duane Morris LLC.
Trust 1, Appellee, represented by Bonnie K. Steingart, Fried,
Frank, Harris, Shriver & Jacobson LLP & Julia V. Smolyanskiy,
Fried, Frank, Harris, Shriver & Jacobson LLP.
Trust 10, Trust 11, Trust 5, Trust 8, Appellees, represented by
David Parker, Kleinberg,Kaplan,Wolff & Cohen,P.C. & Matthew J.
Gold, Kleinberg,Kaplan,Wolff & Cohen,P.C..
Trust 6, Trust 2, Appellees, represented by Bonnie K. Steingart,
Fried, Frank, Harris, Shriver & Jacobson LLP & Julia V.
Smolyanskiy, Fried, Frank, Harris, Shriver & Jacobson LLP.
Trust 3, Working Womans Home Association, Appellees, represented by
Courtney Elizabeth Scott, Tressler, LLP.
Trust 9, William J Hughes Charles Schwab & Co Inc Cust IRA
Contributory, Appellees, represented by Sandra Dawn Grannum,
Drinker Biddle & Reath, LLP.
Virginia L. Lyon, Appellee, represented by Robert E. Bartkus,
McCusker, Anselmi, Rosen, Carvelli, P.C..
VTrader Pro, LLC, Appellee, represented by Richard Milton Asche,
Litman, Asche Lupkin, Gioiella & Bassin, LLP.
Wabash Harvest Partners LP, Appellee, represented by Brian Theodore
Kohn, Schulte, Roth & Zabel LLP & David Keith Momborquette, Schulte
Roth & Zabel LLP.
William J. Harkinson & Sarah A Harkinson Ten/Com, Sandra A Smith
Ten/Com, Appellees, represented by John F. Higgins, Jackson Lewis
P.C..
Yield Strategies Fund II, LP, Appellee, represented by Richard S.
Miller, K&L Gates LLP, Robert T. Honeywell, K&L Gates LLP & Ryan M.
Tosi, K & L Gates LLP.
ZLP Master Opportunity Fund Ltd., Appellee, represented by David A.
Pisciotta, Troutman Sanders LLP, Hugh M. McDonald, Troutman Sanders
LLP & Jonathan David Forstot, Troutman Sanders LLP.
Coastview Equity Partners, Garth Heitshusen, Stephen HInchliffe,
Appellee, Ann Hinchliffe, Appellees, represented by John F.
Higgins, Jackson Lewis P.C..
Arthur and Nancy Lee, Appellee, represented by Bruce I. Goldstein,
McCusker, Anselmi, Rosen,Carvelli & PC & Robert E. Bartkus,
McCusker, Anselmi, Rosen, Carvelli, P.C..
Taliesin Capital Partners LP, ADR Provider, represented by Dianne
Frances Coffino, Covington & Burling LLP.
About Lyondell Chemical
Rotterdam, Netherlands-based LyondellBasell Industries is one of
the world's largest polymers, petrochemicals and fuels companies.
Luxembourg-based Basell AF and Lyondell Chemical Company merged
operations in 2007 to form LyondellBasell Industries, the world's
third largest independent chemical company. LyondellBasell became
saddled with debt as part of the US$12.7 billion merger. Len
Blavatnik's Access Industries owned the Company prior to its
bankruptcy filing.
On Jan. 6, 2009, LyondellBasell Industries' U.S. operations,
led by Lyondell Chemical Co., and one of its European holding
companies -- Basell Germany Holdings GmbH -- filed voluntary
petitions to reorganize under Chapter 11 of the U.S. Bankruptcy
Code to facilitate a restructuring of the company's debts. The
case is In re Lyondell Chemical Company, et al., Bankr. S.D.N.Y.
Lead Case No. 09-10023). Seventy-nine Lyondell entities filed
for Chapter 11. Luxembourg-based LyondellBasell Industries AF
S.C.A. and another affiliate were voluntarily added to Lyondell
Chemical's reorganization filing under Chapter 11 protection on
April 24, 2009.
Deryck A. Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in
New York, served as the Debtors' bankruptcy counsel. Evercore
Partners served as financial advisors, and Alix Partners and its
subsidiary AP Services LLC, served as restructuring advisors.
AlixPartners' Kevin M. McShea acted as the Debtors' Chief
Restructuring Officer. Clifford Chance LLP served as
restructuring advisors to the European entities.
LyondellBasell emerged from Chapter 11 bankruptcy protection in
May 2010, with a plan that provides the Company with US$3 billion
of opening liquidity. A new parent company, LyondellBasell
Industries N.V., incorporated in the Netherlands, is the
successor of the former parent company, LyondellBasell Industries
AF S.C.A., a Luxembourg company that is no longer part of
LyondellBasell. LyondellBasell Industries N.V. owns and operates
substantially the same businesses as the previous parent company,
including subsidiaries that were not involved in the bankruptcy
cases. LyondellBasell's corporate seat is Rotterdam,
Netherlands, with administrative offices in Houston and
Rotterdam.
MACBETH DESIGNS: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Macbeth Designs, LLC
PO Box 1119
400 Tenafly Road
Tenafly, NJ 07670
Case No.: 16-30967
Chapter 11 Petition Date: November 1, 2016
Court: United States Bankruptcy Court
District of New Jersey (Newark)
Judge: Hon. Stacey L. Meisel
Debtor's Counsel: David Edelberg, Esq.
CULLEN AND DYKMAN LLP
433 Hackensack Avenue
Hackensack, NJ 07601
Tel: 201-488-1300
Fax: 201-488-6541
E-mail: dedelberg@cullenanddykman.com
Total Assets: $72,000
Total Liabilities: $1.50 million
The petition was signed by Margaret Josephs, managing member.
A copy of the Debtor's list of 12 unsecured creditors is available
for free at http://bankrupt.com/misc/njb16-30967.pdf
MAX EXPRESS: Seeks Plan Filing Extension Through Jan. 31
--------------------------------------------------------
Max Express, Inc. and the Official Committee of Unsecured Creditors
ask the U.S. Bankruptcy Court for the Central District of
California to extend the deadline to file a Chapter 11 Plan of
reorganization and disclosure statement, and the exclusivity
periods for three months or until January 31, 2017.
The Debtor tells the Court that it hopes to emerge from bankruptcy
by confirming a plan of reorganization. The Debtor further states
that in order to file a plan and disclosure statement, enough time
needs to pass to:
(1) allow the Debtor to establish a history of financial
performance after its change in business model from independent
contractor truck drivers to hourly employee truck drivers and
utilize the new model to assess profitability and provide
projections supporting feasibility of any proposed plan;
(2) allow the Debtor to resolve the objections it has to the
filed claims; and
(3) allow the port operations to stabilize due to Hanjin
Shipping's bankruptcy and the problems created by it, specifically,
the trucking companies working from the combined Los Angeles/Long
Beach Port, have experienced set-backs in their ability to
operate.
The Debtor filed the extension request on the same day the Court
entered an order extending the previously exclusivity deadline to
Oct. 31. The Debtor contends that while it expects to file a plan
and disclosure statement by January 31, 2017, it is unable to file
a plan and disclosure statement by Oct. 31 deadline.
About Max Express, Inc.
Max Express, Inc., is a trucking company located in Carson,
California that provides trucking services throughout the western
United States. It has approximately 30 trucks and 37 employees,
including the truck drivers and principals of the Debtor. The
Debtor currently rents real property located at 22420 S. Alameda 10
Street, Carson, CA 90810, for the premises used as its place of
business.
The Debtor sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. C.D. Cal. Case No. 16-14868) on April 15, 2016. The
petition was signed by Richard Mo, secretary. The case is assigned
to Judge Deborah J. Saltzman. The Debtor estimated both assets and
liabilities in the range of $1 million to $10 million.
The Office of the U.S. Trustee on June 10, 2016, appointed three
creditors of Max Express, Inc., to serve on the official committee
of unsecured creditors. The Committee retained Levene, Neale,
Bender Yoo & Brill as its counsel.
MBTI OF PUERTO RICO: Taps Carrasquillo as Financial Consultant
--------------------------------------------------------------
MBTI of Puerto Rico Inc. seeks approval from the U.S. Bankruptcy
Court for the District of Puerto Rico to hire a financial
consultant in connection with its Chapter 11 case.
The Debtor proposes to hire CPA Luis R. Carrasquillo & Co., P.S.C.
to assist in the restructuring of its affairs by providing advice
regarding its plan of reorganization and by participating in
negotiations with creditors.
The firm's professionals and their hourly rates are:
Luis Carrasquillo, CPA $175
Marcelo Gutierrez, CPA $125
Other CPAs $90 - $125
Lionel Rodriguez Perez $90
Carmen Echevarría $85
Alfredo Segarra $80
Janet Marrero $45
Iris Franqui $45
Mr. Carrasquillo , a certified public accountant, disclosed in a
court filing that he and the other members of his firm are
"disinterested persons" as defined in section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Luis R. Carrasquillo
CPA Luis R. Carrasquillo & Co., P.S.C.
28th Street, TI-26
Turabo Gardens Avenue
Caguas, PR 00725
Phone: 787-746-4555/787-746-4556
Fax: 787-746-4564
The Debtor is represented by:
Charles Alfred Cuprill, Esq.
Charles A. Cuprill, PSC Law Offices
356 Calle Fortaleza, Second Floor
San Juan, PR 00901
Tel: 787-977-0515
Email: cacuprill@cuprill.com
About MBTI of Puerto Rico
MBTI of Puerto Rico, Inc. sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. P.R. Case No. 16-08091) on October 7,
2016. The petition was signed by Barbara Alozo Vila, president.
The case is assigned to Judge Edward A. Godoy.
At the time of the filing, the Debtor disclosed $12.99 million in
assets and $16.07 million in liabilities.
MISSION NEW ENERGY: Incurs A$2.3 Million Net Loss in Fiscal 2016
----------------------------------------------------------------
Mission NewEnergy Limited filed with the Securities and Exchange
Commission its annual report on Form 20-F disclosing a loss after
tax of A$2.32 million on A$41,960 of total revenue for the year
ended June 30, 2016, compared to profit after tax of A$28.35
million on A$7.27 million of total revenue for the year ended
June 30, 2015.
As at June 30, 2016, the Company had A$6.17 million in total
assets, A$1.4 million in total liabilities, all current, and A$4.76
million in total equity.
BDO Audit (WA) Pty Ltd, in Wayne Basford, issued a "going concern"
qualification on the consolidated financial statements for the year
ended June 30, 2016.
The Group incurred net cash outflows from operating activities of
A$2,077,633. At June 30, 2016, the Group had net working capital
of A$1,116,600.
"The ability of the Group to continue as a going concern is
dependent on securing additional funding through the issue of
further equity or debt, generating positive cash flows from
existing or new operations, and/or realising cash through the sale
of assets.
"These conditions indicate a material uncertainty that may cast a
significant doubt about the Group’s ability to continue as a
going concern and, therefore, that it may be unable to realise its
assets and discharge its liabilities in the normal course of
business.
"Management believes there are sufficient funds to meet the Group's
working capital requirements as at the date of this report, and
that there are reasonable grounds to believe that the Group will
continue as a going concern as a result of a combination of the
following reasons:
* raise additional funding through debt and/or equity;
* generate positive cash flows from existing or new operations;
and
* realise cash through the sale of assets.
"Should the Group not be able to continue as a going concern, it
may be required to realise its assets and discharge its liabilities
other than in the ordinary course of business, and at amounts that
differ from those stated in the financial statements. The financial
report does not include any adjustment relating to the
recoverability and classification of recorded assets or liabilities
that might be necessary should the entity note continue as a going
concern," as disclosed in the filing.
A full-text copy of the Form 20-F is available for free at:
https://is.gd/BNnzMm
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.
MLRG INC: Seeks to Hire Lewis Law Group as Legal Counsel
--------------------------------------------------------
MLRG, Inc. seeks approval from the U.S. Bankruptcy Court for the
Eastern District of Virginia to hire legal counsel in connection
with its Chapter 11 case.
The Debtor proposes to hire The Lewis Law Group, P.C. to give legal
advice regarding the administration of its bankruptcy estate,
pursue legal actions to recover its assets, and provide other legal
services related to its case.
Todd Lewis, Esq., the attorney designated to represent the Debtor,
will be paid an hourly rate of $350. Paralegal services are billed
at $125 per hour.
In a court filing, Mr. Lewis disclosed that his firm is a
"disinterested person" as defined in section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Todd Lewis, Esq. (VSB No. 73732)
The Lewis Law Group, P.C.
2200 Wilson Blvd., Suite 102-50
Arlington, VA 22201
Tel: +1-855-550-9898
Fax: +1-855-680-0888
Email: todd.lewis@tllgpc.com
About MLRG Inc.
MLRG, Inc. sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. E.D. Va. Case No. 16-13634) on October 25, 2016. The
petition was signed by Michael Landrum, president.
At the time of the filing, the Debtor estimated assets and
liabilities of less than $1 million.
MURRAY ENERGY: S&P Assigns 'B-' Rating on New $175MM Term Loan B-3
------------------------------------------------------------------
S&P Global Ratings said that it assigned a 'B-' issue-level rating
(the same as the corporate credit rating) to U.S.-based Murray
Energy Corp.'s new $175 million first-lien term loan B-3 due April
2020. The recovery rating is '3', indicating S&P's expectation for
meaningful (50% to 70%; lower half of the range) recovery in the
event of a payment default. Murray will apply the debt proceeds
toward repaying the outstanding $202 million first-lien term loan
B-1 due April 2017.
The rating on the company's second-lien notes is unchanged at
'CCC', with a '6' recovery rating, indicating S&P's expectation for
negligible (0% to 10%; lower half of the range) recovery in the
event of a payment default.
S&P's 'B-' corporate credit rating and stable outlook on Murray
Energy Corp. are unchanged.
RECOVERY ANALYSIS
Key analytical factors
-- S&P estimates gross recovery value of $1.25 billion,
assuming an emergence EBITDA of $250 million and a 5x EBITDA
multiple.
-- The multiple used is in line with Murray's peers operating
in the metals and mining upstream industry and reflects its
broad enterprise value calculation in a bankruptcy.
-- All debt amounts include six months of prepetition accrued
interest.
Simulated default assumptions
-- Year of default: 2019
-- Emergence EBITDA: $250 million
-- Valuation multiple: 5x
-- Gross enterprise value (EV): $1.25 billion
Simplified waterfall
-- Net enterprise value (after 5% administrative costs and
capital leases): $1.19 billion
-- Estimated collateral value: $1.14 billion (after revolver
priority claim)
-- Estimated first-lien claims: $1.9 billion (term loans B-2
and B-3)
-- Recovery expectations for first-lien claims: 50% to 70%
(lower half of the range)
-- Estimated remaining collateral value for second lien: $0
-- Estimated second-lien claims: $1 billion
-- Recovery expectations for second-lien claims: 0% to 10%
Rating List
Murray Energy Corp.
Corporate Credit Rating B-/Stable/--
New Rating
Murray Energy Corp.
Senior Secured
$175 mil term B-3 bank ln due 2020 B-
Recovery Rating 3L
Ratings Unchanged
Murray Energy Corp.
Senior Secured B-
Recovery Rating 3L
Senior Secured CCC
Recovery Rating 6
NET ELEMENT: Settles Acquisition Agreement Dispute with Maglenta
----------------------------------------------------------------
Net Element, Inc., TOT Group Europe, Ltd. and ТOT Group Russia
LLC, each a subsidiary of the Company, entered into a settlement
agreement with Maglenta Enterprises Inc. and Champfremont Holding
Ltd. related to the Acquisition Agreement dated as of May 20, 2015,
among the Sellers, the Purchasers and certain Target Companies
parties to thereto. The settlement, which was effective Oct. 21,
2016, resolved a dispute among the Company and the Purchasers, on
the one hand, and the Sellers, on the other hand, with respect to
the provision of the Acquisition Agreement pursuant to which, at
the end of the 12-month period following the issuance of restricted
shares of the Company's common stock to the Sellers, the Purchasers
guaranteed that the value of such stock then not sold by the
Sellers would not be less than the value of such at the date of the
issuance of such stock. Pursuant to the Settlement Agreement, the
Company agreed to pay to the Sellers an aggregate of $2,288,667
plus 10% per annum interest accrued from May 20, 2016, in
installments pursuant to the payment schedule set forth in the
Settlement Agreement. To the extent any such amounts are unpaid,
such amount to be convertible by the Sellers at any time into the
Company restricted common shares at consolidated closing bid price
per share for the Company common shares as reported by the NASDAQ
on the day immediately preceding the day of such conversion. Any
such shares (if any are issued should the Purchaser opt to so
convert) would be issuable subject to applicable exemption from
registration under the federal and state securities laws and
subject to piggy-back registration rights if the Company files
after the date of the Settlement Agreement any registration
statements on Form S-1 or Form S-3, in each case subject to
applicable limitations in such forms. Such issuance of shares of
common stock upon any such conversion is capped to 19.99% of the
Company's outstanding shares of common stock as of the date hereof,
unless stockholder approval is obtained to issue more than such
19.99%. Pursuant to the Settlement Agreement, the Company will not
be required or permitted to issue any shares of the Company common
stock if such issuance would violate the rules or regulations of
the NASDAQ.
On Oct. 25, 2016 (but made effective as of Oct. 21, 2016), the
Company and the Purchasers entered into the Amendment to the
Acquisition Agreement with the Sellers and the Target Companies
parties to thereto. Pursuant to the Amendment, the Purchasers
agreed to not terminate, other than for "cause", employment of
certain employees listed on Exhibit A to the Amendment until
$2,288,667 is paid in full pursuant to the Settlement Agreement.
Further, pursuant to the Amendment, the Purchasers agreed to return
the funds in the aggregate amount up to the amount set forth in
Exhibit B to the Amendment for merchant services requested by
merchants within timeframes mutually agreed to between the
Purchasers and those merchants. The Purchasers agreed to the
Sellers against any claims made by those merchants with respect to
the payment of the Maximum Amount. Further, pursuant to the
Amendment, within five business days of the execution of the
Amendment, AnastasiaDate Ltd. or its designee will make all
outstanding payments due to Brosword Holding Limited, an indirect
subsidiary of the Company.
About Net Element
Miami, Fla.-based Net Element International, Inc., formerly Net
Element, Inc., currently operates several online media Web sites
in the film, auto racing and emerging music talent markets.
Net Element reported a net loss of $13.3 million on $40.2 million
of total revenues for the year ended Dec. 31, 2015, compared to a
net loss of $10.2 million on $21.4 million of total revenues for
the year ended Dec. 31, 2014.
As of March 31, 2016, Net Element had $21.6 million in total
assets, $14.1 million in total liabilities and $7.55 million in
total stockholders' equity.
Daszkal Bolton LLP, in Fort Lauderdale, Florida, issued a "going
concern" qualification on the consolidated financial statements for
the year ended Dec. 31, 2015, citing that the Company has sustained
recurring losses from operations and has working capital and
accumulated deficits that raise substantial doubt about its ability
to continue as a going concern.
NEVADA GAMING: Seeks to Hire Bach Law Firm as Conflicts Counsel
---------------------------------------------------------------
Nevada Gaming Partners, LLC seeks approval from the U.S. Bankruptcy
Court for the District of Nevada to hire The Bach Law Firm, LLC.
The firm will provide legal assistance in matters where Fox
Rothschild LLP, the lead counsel, cannot represent the Debtor due
to a conflict of interest.
Anne Loraditch, Esq., the attorney designated to represent the
Debtor, will be paid an hourly rate of $350.
Bach does not hold or represent any interest adverse to the Debtor
or its bankruptcy estate, and is a "disinterested person" as
defined in section 101(14) of the Bankruptcy Code, according to
court filings.
The firm can be reached through:
Anne M. Loraditch, Esq.
The Bach Law Firm, LLC
7881 W. Charleston Blvd., Suite 165
Las Vegas, NV 89117
Tel: (702) 925-8787
Fax: (702) 925-8788
Email: aloraditch@bachlawfirm.com
About Nevada Gaming Partners
Nevada Gaming Partners, LLC filed a Chapter 11 bankruptcy petition
(Bankr. D. Nev. Case No. 16-15521) on October 12, 2016. The Hon
Laurel E. Davis presides over the case. In its petition, the
Debtor estimated $1 million to $10 million in both assets and
liabilities. The petition was signed by Bruce Familian, manager.
Headquartered in Las Vegas, Nevada, Nevada Gaming Partners, LLC, is
a gaming company that focuses on slot route operations, casino
operations and refurbishment of slot machines. The Company
operated 429 slot machines throughout the State of Nevada via its
Slot Routes as of the bankruptcy filing date. The Company is doing
business as Nevada Gaming Partners Management II, LLC, Nevada
Gaming Centers, Nevada Gaming Partners Management II, Sarah's
Kitchen, Nevada Gaming Partners, Evolve Gaming Management and
Klondike Sunset Casino.
NEVADA GAMING: Seeks to Hire Fox Rothschild as Legal Counsel
------------------------------------------------------------
Nevada Gaming Partners, LLC seeks approval from the U.S. Bankruptcy
Court for the District of Nevada to hire legal counsel in
connection with its Chapter 11 case.
The Debtor proposes to hire Fox Rothschild LLP to give legal advice
regarding its duties under the Bankruptcy Code, prepare a plan of
reorganization, and provide other legal services.
The hourly rates for attorneys and paraprofessionals who are
expected to represent the Debtor are:
Brett Axelrod Partner $725
Hal Baume Partner $574
David Faustman Partner $600
Micaela Rustia Moore Partner $510
Tara Popova Associate $330
Patricia Chlum Paralegal $290
Fox Rothschild is a "disinterested person" as defined in section
101(14) of the Bankruptcy Code, according to court filings.
The firm can be reached through:
Brett A. Axelrod, Esq.
Micaela Rustia Moore, Esq.
Fox Rothschild LLP
1980 Festival Plaza Drive, Suite 700
Las Vegas, NV 89135
Phone: (702) 262-6899
Fax: (702) 597-5503
Email: baxelrod@foxrothschild.com
Email: mmoore@foxrothschild.com
About Nevada Gaming Partners
Nevada Gaming Partners, LLC filed a Chapter 11 bankruptcy petition
(Bankr. D. Nev. Case No. 16-15521) on October 12, 2016. The Hon
Laurel E. Davis presides over the case. In its petition, the
Debtor estimated $1 million to $10 million in both assets and
liabilities. The petition was signed by Bruce Familian, manager.
Headquartered in Las Vegas, Nevada, Nevada Gaming Partners, LLC, is
a gaming company that focuses on slot route operations, casino
operations and refurbishment of slot machines. The Company
operated 429 slot machines throughout the State of Nevada via its
Slot Routes as of the bankruptcy filing date. The Company is doing
business as Nevada Gaming Partners Management II, LLC, Nevada
Gaming Centers, Nevada Gaming Partners Management II, Sarah's
Kitchen, Nevada Gaming Partners, Evolve Gaming Management and
Klondike Sunset Casino.
NEVADA GAMING: Seeks to Hire Henry & Horne as Financial Advisor
---------------------------------------------------------------
Nevada Gaming Partners, LLC seeks approval from the U.S. Bankruptcy
Court for the District of Nevada to hire a financial advisor.
The Debtor proposes to hire Henry & Horne, LLP to help prepare
financial documents and plan of reorganization, assist in the sale
or liquidation of assets, and provide other services in connection
with its Chapter 11 case.
The firm will be paid on an hourly basis at rates, which range from
$80 to $355. The Debtor has also agreed to indemnify the firm and
reimburse its expenses.
Henry & Horne does not represent any interest adverse to the Debtor
and is a "disinterested person" as defined in section 101(14) of
the Bankruptcy Code, according to court filings.
The firm can be reached through:
Ted Burr
Henry & Horne, LLP
2055 E. Warner Road, Suite 101
Tempe, AZ 85284
Phone: 480-839-4900
Fax: 480-820-8726
About Nevada Gaming Partners
Nevada Gaming Partners, LLC filed a Chapter 11 bankruptcy petition
(Bankr. D. Nev. Case No. 16-15521) on October 12, 2016. The Hon
Laurel E. Davis presides over the case. In its petition, the
Debtor estimated $1 million to $10 million in both assets and
liabilities. The petition was signed by Bruce Familian, manager.
Headquartered in Las Vegas, Nevada, Nevada Gaming Partners, LLC, is
a gaming company that focuses on slot route operations, casino
operations and refurbishment of slot machines. The Company
operated 429 slot machines throughout the State of Nevada via its
Slot Routes as of the bankruptcy filing date. The Company is doing
business as Nevada Gaming Partners Management II, LLC, Nevada
Gaming Centers, Nevada Gaming Partners Management II, Sarah's
Kitchen, Nevada Gaming Partners, Evolve Gaming Management and
Klondike Sunset Casino.
NEVADA GAMING: Seeks to Hire Moran Brandon as Special Counsel
-------------------------------------------------------------
Nevada Gaming Partners, LLC seeks approval from the U.S. Bankruptcy
Court for the District of Nevada to hire Moran Brandon Bendavid
Moran as special counsel.
The firm will provide legal services to the Debtor in connection
with several gaming and licensing applications pending before the
State of Nevada Gaming Control Board and other local agencies.
John Moran III, Esq., and Matthew Sibert, Esq., the attorneys
designated to represent the Debtor, will be paid $425 per hour and
$300 per hour, respectively.
Moran Brandon does not hold or represent any interest adverse to
the Debtor or its bankruptcy estate, according to court filings.
The firm can be reached through:
John T. Moran III, Esq.
Matthew B. Sibert, Esq.
Moran Brandon Bendavid Moran
630 S. Fourth Street
Las Vegas, NV 89101
Phone: (702) 384-8424
Fax: (702) 384-6858
Email: JT3.moran@moranlawfirm.com
About Nevada Gaming Partners
Nevada Gaming Partners, LLC filed a Chapter 11 bankruptcy petition
(Bankr. D. Nev. Case No. 16-15521) on October 12, 2016. The Hon
Laurel E. Davis presides over the case. In its petition, the
Debtor estimated $1 million to $10 million in both assets and
liabilities. The petition was signed by Bruce Familian, manager.
Headquartered in Las Vegas, Nevada, Nevada Gaming Partners, LLC, is
a gaming company that focuses on slot route operations, casino
operations and refurbishment of slot machines. The Company
operated 429 slot machines throughout the State of Nevada via its
Slot Routes as of the bankruptcy filing date. The Company is doing
business as Nevada Gaming Partners Management II, LLC, Nevada
Gaming Centers, Nevada Gaming Partners Management II, Sarah's
Kitchen, Nevada Gaming Partners, Evolve Gaming Management and
Klondike Sunset Casino.
NEW CAL-NEVA: Committee Seeks to Hire Pachulski as Legal Counsel
----------------------------------------------------------------
The official committee of unsecured creditors of New Cal-Neva
Lodge, LLC seeks approval from the U.S. Bankruptcy Court for the
District of Nevada to hire legal counsel.
The committee proposes to hire Pachulski Stang Ziehl & Jones LLP to
assist in its consultations with the Debtor regarding the
administration of its Chapter 11 case, give legal advice regarding
the formulation of a bankruptcy plan, and provide other legal
services related to the case.
The hourly rates charged by the firm's attorneys and
paraprofessionals are:
Partners $595 - $1,195
Of Counsel $550 - $975
Associates $425 - $550
Paralegals $295 - $325
Pachulski does not represent any interest adverse to that of the
committee, according to court filings.
The firm can be reached through:
John D. Fiero, Esq.
Shirley S. Cho, Esq.
Pachulski Stang Ziehl & Jones LLP
150 California Street, 15th Floor
San Francisco, CA 94111
Tel: (415) 263-7000
Fax: (415) 263-7010
Email: jfiero@pszjlaw.com
Email: scho@pszjlaw.com
About New Cal-Neva Lodge
New Cal-Neva Lodge, LLC, based in Saint Helena, CA, filed a Chapter
11 petition (Bankr. N.D. Cal. Case No. 16-10648) on July 28, 2016.
The Hon. Thomas E. Carlson presides over the case. Jane Kim, Esq.,
and Peter Benvenutti, Esq., at Keller & Benvenutti LLP, serve as
bankruptcy counsel.
In its petition, the Debtor estimated $50 million to $100 million
in assets and $10 million to $50 million in liabilities. The
petition was signed by Robert Radovan, president and secretary.
NEW ENGLAND COMPOUNDING: 66 Cases in MDL No. 2419 Remanded
----------------------------------------------------------
In the case captioned IN RE: NEW ENGLAND COMPOUNDING PHARMACY,
INC., PRODUCTS LIABILITY LITIGATION, MDL No. 2419 (JPML), the
United States Judicial Panel on Multidistrict Litigation issued a
conditional remand order for 66 actions to be remanded to their
respective transferor courts.
The dispute stems from an outbreak of fungal meningitis caused by
contaminated methylprednisolone acetate (MPA) manufactured and sold
by the New England Compounding Pharmacy, Inc., d/b/a New England
Compounding Center (NECC). NECC operated a compounding pharmacy in
Framingham, Massachusetts, that combined and mixed ingredients to
create specific formulations of pharmaceutical products. In the
fall of 2012, health officials traced a number of cases of fungal
meningitis to vials of MPA that had been manufactured by NECC.
NECC initiated a recall of several contaminated batches of MPA
before eventually surrendering its pharmacy license and ceasing
production of all pharmaceutical products. NECC filed for
bankruptcy in December 2012.
The catastrophic outbreak of fungal meningitis resulted in (among
other proceedings) hundreds of individual tort lawsuits that were
eventually consolidated into multidistrict litigation (MDL).
Significant pretrial litigation and discovery has been conducted in
the MDL, and remains ongoing with regard to certain cases. That
said, the transferee court concluded that for 66 cases, the
efficiencies of the MDL mechanism have been exhausted, and it is
time for these actions to go their separate ways. Therefore, the
transferee court suggested that the Judicial Panel on Multidistrict
Litigation remand or transfer each of the 66 actions to its court
of origin for further proceedings.
A full-text copy of the Panel's October 18, 2016 conditional remand
order is available at https://is.gd/wInNhV from Leagle.com.
About New England Compounding Pharmacy
New England Compounding Pharmacy Inc., filed a Chapter 11 petition
(Bankr. D. Mass. Case No. 12-19882) in Boston on Dec. 21, 2012,
after a meningitis outbreak linked to an injectable steroid,
methylprednisolone acetate ("MPA"), manufactured by NECC, killed
39 people and sickened 656 in 19 states, though no illnesses have
been reported in Massachusetts. The Debtor owns and operates the
New England Compounding Center is located in Framingham, Mass. In
October 2012, the company recalled all its products, not just
those associated with the outbreak.
Paul D. Moore, Esq., at Duane Morris LLP, in Boston, has been
appointed as Chapter 11 Trustee of NECC. He is represented by
Jeffrey D. Sternklar, Esq., at DUANE MORRIS LLP.
An Official Committee of Unsecured Creditors appointed in the case
has been represented by BROWN RUDNICK LLP's William R. Baldiga,
Esq., Rebecca L. Fordon, Esq., Jessica L. Conte, Esq., and
David J. Molton, Esq.
NEW MILLENNIUM: S&P Lowers CCR to 'CCC+'; Outlook Negative
----------------------------------------------------------
S&P Global Ratings lowered its corporate credit rating on San
Diego, Calif.-based clinical toxicology testing laboratory services
provider New Millennium Holdco Inc. (Millennium) to 'CCC+' from
'B-'. The outlook is negative.
At the same time, S&P lowered the rating on Millennium's senior
secured term loan to 'CCC+' from 'B-'. The recovery rating on this
debt remains '4', though S&P now expects recovery to be at the low
end of the average (30%-50%) range in the event of payment
default.
"Our downgrade on New Millennium Holdco Inc. follows very weak
second-quarter operating results and negative reimbursement trends
that we expect will cause EBITDA to decline meaningfully below
fixed charges over the next two years," said S&P Global Ratings
credit analyst Shannan Murphy. While S&P believes the company's
very substantial cash balance affords it an extended period of time
to try to improve operations, S&P's rating action incorporates its
belief that the company is unlikely to be able to support the
current level of debt over the long term without favorable
developments.
S&P's negative rating outlook reflects its belief that Millennium's
current debt load may not be sustainable given current
reimbursement dynamics in the company's core urine drug testing
business. However, it also reflects S&P's view that the company's
substantial cash balances make a payment default or debt
restructuring unlikely in the next 12 months.
S&P could lower the rating if the company's cash burn accelerates,
leading S&P to question whether the company can continue to support
its current debt balances over the next 12 months. S&P would
consider a lower rating if cash levels approached
$70 million, either due to a decline in realized revenues on a
per-sample basis by an incremental 15% from levels that already
represent a substantial reduction from prior years, or due to
litigation settlements.
S&P could raise the rating if it become convinced that Millennium
can sustainably generate around $65 million in EBITDA per year,
allowing the company to maintain a modest cash flow cushion after
interest expense, capital spending, and mandatory debt
amortization. In S&P's view, this would require the company to
improve EBITDA margins by around 1,000 basis points from run-rate
levels, most likely through a combination of higher reimbursement
and cost cutting.
NOVABAY PHARMACEUTICALS: Regains Compliance with NYSE Requirements
------------------------------------------------------------------
NovaBay Pharmaceuticals, Inc., announced that it has regained
compliance with the NYSE MKT continued listing standards.
"Our NYSE listing is important as it creates a heightened profile
for our stock and improves our ability to attract high-quality
investors," said Mark M. Sieczkarek, NovaBay's chairman, president
and CEO. "We are delighted to have executed on our plan to regain
compliance and to work with NYSE representatives in maintaining our
listing." On April 28, 2015, NovaBay received notice that the
Company was out of compliance with Section 1003(a) (i) of the NYSE
MKT Company Guide pertaining to shareholder equity requirements.
Since then, through a series of financings, the company has been
able to raise more than $30 million to regain compliance and
maintain its listing on the exchange.
"The recently announced $6 million of warrant exercises and the
previous $24 million that we raised over the past 18 months provide
us with a strong balance sheet and the financial stability to
maintain our liquidity," said Sieczkarek. "The listing is
important to our longer-term growth and provides us with the needed
exposure to the public markets. Funds from our recent financing
and the exercise of warrants were key in meeting the NYSE MKT
requirements and we thank our investors and Board members for their
ongoing confidence and financial support. Our improved capital
structure will support our commercial activities aimed at growing
Avenova sales and we are increasingly confident in our ability to
reach positive adjusted cash flow from operations by the end of
December 2016."
NovaBay defines adjusted cash flow from operations as GAAP cash
flow from operations less changes in operating assets and
liabilities.
About NovaBay Pharmaceuticals
NovaBay Pharmaceuticals is a biopharmaceutical company focusing on
the commercialization of prescription Avenova lid and lash hygiene
for the domestic eye care market. Avenova is formulated with
Neutrox which is cleared by the U.S. Food and Drug Administration
(FDA) as a 510(k) medical device. Neutrox is NovaBay's proprietary
pure hypochlorous acid. Laboratory tests show that hypochlorous
acid has potent antimicrobial activity in solution yet is non-toxic
to mammalian cells and it also neutralizes bacterial toxins.
Avenova is marketed to optometrists and ophthalmologists throughout
the U.S. by NovaBay's direct medical salesforce. It is accessible
from more than 90% of retail pharmacies in the U.S. through
agreements with McKesson Corporation, Cardinal Health and
AmeriSource Bergen.
NovaBay reported a net loss of $18.97 million in 2015, a net loss
of $15.19 million in 2014 and a net loss of $16.04 million in
2013.
As of June 30, 2016, NovaBay had $7 million in total assets, $9.47
million in total liabilities and a total stockholders' deficit of
$2.46 million.
OUM & Co. LLP in San Francisco, California, audited the
consolidated balance sheets of NovaBay Pharmaceuticals, Inc. as of
December 31, 2015 and 2014 and the related consolidated statements
of operations and comprehensive loss, stockholders' equity, and
cash flows for each of the three years in the period ended December
31, 2015. The firm noted that the Company has suffered recurring
losses and negative cash flows from operations and has a
stockholders' deficit, all of which raise substantial doubt about
its ability to continue as a going concern.
OAK ROCK: Committee's Omnibus Motion in Limine Partially Granted
----------------------------------------------------------------
Judge Robert E. Grossman of the United States Bankruptcy Court for
the Eastern District of New York partially granted, and otherwise
denied, the omnibus motion in limine filed by the Official
Committee of Unsecured Creditors in the adversary proceeding
captioned THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS on behalf
of the bankruptcy estate of OAK ROCK FINANCIAL, LLC, Plaintiff, v.
ISRAEL DISCOUNT BANK OF NEW YORK, Individually and as Agent Under
Certain Credit Agreements, BANK LEUMI USA, BANK HAPOALIM B.M. and
CAPITAL ONE, N.A., Defendants. ISRAEL DISCOUNT BANK OF NEW YORK,
Individually and as Agent Under Certain Credit Agreements, BANK
LEUMI USA, BANK HAPOALIM B.M. and CAPITAL ONE, N.A., Third-Party
Plaintiff, v. JAMES N. AGALS, et. al, Third-Party Defendants, Adv.
Pro. No. 8-14-08231-reg (Bankr. E.D.N.Y.).
The Official Committee of Unsecured Creditors filed an omnibus
motion in limine. The motion arose in anticipation of trial in an
adversary proceeding brought by the Committee seeking, inter alia,
to avoid certain transactions between the debtor Oak Rock
Financial, LLC, and Israel Discount Bank of New York (IDB), Bank
Leumi USA, Bank Hampoalim B.M. and Capital One, N.A. (together with
IDB, "the Lenders") as preferential transfers and/or fraudulent
conveyances.
The Motion sought to preclude the Lenders from calling certain
witnesses, introducing documents, raising objections and advancing
theories at trial scheduled to commence on November 1, 2016. The
Lenders opposed the Motion but have agreed to amend their witness
lists by omitting certain witnesses and indicating whom the Lenders
"expect" to call and those whom the Lenders "may" call.
Additionally the Lenders expected to stipulate to the entry into
the record of many of the contested documents.
Judge Grossman pointed out that, as this is a bench trial without a
jury, the need for an advance ruling to exclude evidence has been
deemed by some courts as superfluous and unnecessary. Moreover,
given the contentious nature of the adversary proceeding, the judge
apprehended the parties will ask the Court to revisit any rulings
it might make on the Motion, during the trial.
In addition to these concerns, Judge Grossman also stated that
granting certain portions of the Motion would undercut the Lenders'
legal theories before the Court can fully assess the issues
presented. The judge explained that it is inappropriate to use a
motion in limine to pre-determine theories of the case or to
preclude parties from presenting evidence on underdeveloped issues
in advance of the trial, but rather, these types of questions
should be addressed during trial, where evidence will be offered,
objected to and ruled on in an appropriate factual context. The
judge thus held that the Lenders shall not be precluded from
calling certain witnesses, introducing documents, raising
objections and advancing theories which could prevent the Lenders
from taking positions and strategies they have a right to take
during the trial.
Judge Grossman granted the Motion solely to the extent that the
parties may not challenge the authenticity of, or the applicability
of Federal Rule of Evidence 803(6) to (i) the documents produced by
the Lenders bearing their letterhead or other identifying marks,
and (ii) the documents produced by by IDB's Field Examiner, KDMB
Lender Advisory Services LLC, with their letterhead or other
identifying marks. The Motion was denied as to the remainder.
The bankruptcy case is In re: OAK ROCK FINANCIAL, LLC, Chapter 11,
Debtor, Case No. 8-13-72251-reg (Bankr. E.D.N.Y.).
A full-text copy of Judge Grossman's October 4, 2016 memorandum
decision is available at https://is.gd/yN8nNn from Leagle.com.
Official Committee of Unsecured Creditors on Behalf of Bankruptcy
Estate of Oak Rock is represented by:
Schuyler G. Carroll, Esq.
John D. Penn, Esq.
PERKINS COIE LLP
30 Rockefeller Plaza, 2nd Floor
New York, NY 10112-0085
Tel: (212)262-6900
Fax: (212)977-1649
Email: scarroll@perkinscoie.com
jpenn@perkinscoie.com
-- and --
David Olsky, Esq.
PERKINS COIE LLP
1900 Sixteenth Street, Suite 1400
Denver, CO 80202-5255
Tel: (303)291-2300
Fax: (303)291-2400
Email: dolsky@perkinscoie.com
Oak Rock FInancial LLC is represented by:
Jacqulyn Somers Loftin, Esq.
LAMONICA HERBST MANISCALCO
3305 Jerusalem Avenue
Wantagh, NY 11793
Email: jsl@lhmlawfirm.com
Israel Discount Bank of New York Individually and as Agent Under
Certain Credit Agreements is represented by:
John Bougiamas, Esq.
OTTERBOURG STEINDLER HOUSTON & ROSEN
230 Park Avenue
New York, NY 10169-0075
Tel: (212)661-9100
Fax: (212)682-6104
Bank Leumi USA is represented by:
Robert Fryd, Esq.
WARSHAW BURSTEIN LLP
555 Fifth Avenue
New York, NY 10017
Tel: (212)984-7700
Fax: (212)972-9150
Email: rfryd@wbcsk.com
Bank Hapoalim B.M. is represented by:
Scott S. Balber, Esq.
John Jay O'Donnell, Jr., Esq.
HERBERT SMITH FREEHILLS NEW YORK LLP
450 Lexington Avenue
New York, NY 10017
Tel: (917)542-7600
Email: scott.balber@hsf.com
john.odonnell@hsf.com
-- and --
Andrew C. Gold, Esq.
Two Park Avenue
New York, NY 10016
Tel: (212)592-1400
Fax: (212)592-1500
Email: agold@herrick.com
Capital One N.A. is represented by:
Harvey Alan Strickon, Esq.
PAUL HASTINGS LLP
200 Park Avenue
New York, NY 10166
Tel: (212)318-6000
Fax: (212)319-4090
Email: harveystrickon@paulhastings.com
SHELLY SAFTLER is represented by:
Steven M. Kaplan, Esq.
KAPLAN KRAVERT & VOGEL P.C.
630 Third Avenue
New York, NY 10017
Tel: (212)983-6900
Fax: (212)983-9210
Email: smk@kkvpc.com
North Mill Capital LLC is represented by:
Timothy L. Foster, Esq.
Sam P. Israel, Esq.
SAM ISRAEL, PC
180 Maiden Lane - 6th Floor
New York, NY 10038
Tel: (646)787-9880
Fax: (646)787-9886
Email: timfoster@spi-pc.com
samisrael@spi-pc.com
Medallion Business Credit, a division of Medallion Financial Corp.
is represented by:
Michael L. Schein, Esq.
VEDDER, PRICE, KAUFMAN & KAMHOLZ, P.C.
1633 Broadway, 47th Floor
New York, NY 10019
Tel: (212)407-7700
Fax: (212)407-7799
Email: mschein@vedderprice.com
About Oak Rock Financial
Oak Rock Financial LLC, an asset-based lender, put itself into
Chapter 11 in the U.S. Bankruptcy Court in Central Islip, New York
(Bankr. E.D.N.Y. Case No. 13-72251) on May 6, 2013.
The Debtor put itself into Chapter 11 in response to the Chapter 7
involuntary petition filed by its creditors, including Israel
Discount Bank of New York, Bank Leumi USA, and Bank Hapoalim B.M.,
on April 29, 2013.
The petitioning creditors had claimed the specialty asset-based
lending firm has committed a "massive fraud" against its secured
lenders.
The Debtor disclosed assets of $131.1 million and debt totaling
$99.9 million in the Chapter 11 papers.
OLIVE BRANCH: Applies to Employ Dahar as Attorney
-------------------------------------------------
Olive Branch Real Estate Development, LLC, asks the Bankruptcy
Court to approve its employment of S. William Dahar II, Esq., of
Victor W. Dahar, P.A., as attorney.
The professional services the firm will render will include, but
are not limited to, the filing of a plan and disclosure statement,
motions for relief and post-petition/take-out financing issues,
assumption/rejection of executory contracts, turnover, fraudulent
transfer, preference actions and other avoidance and/or
subordination actions, and other litigation; negotiating with the
creditors committee and creditors, as necessary; and representing
the Debtor in all other matters necessary and proper.
S. William Dahar II, Esq., assures the Court that his firm has no
connections with the creditors, any other party in interest, their
respective attorneys and accountants, the United States Trustee or
any person employed in the office of the United States Trustee.
The firm can be reached at:
S. William Dahar II, Esq.
VICTOR W. DAHAR, P.A.
20 Merrimack Street
Manchester, New Hampshire 03101
Tel: (603) 622-6595
About Olive Branch Real Estate Development
Olive Branch Real Estate Development, LLC, is a real estate
development company with a principal address of 832 Route 3, Unit
#1, Holderness, New Hampshire. It is owned and operated by Gerard
M. Healey. The business has been in operation since 2011.
Olive Branch Real Estate Development filed a Chapter 11 petition
(Bankr. D.N.H. Case No. 16-11444) on Oct. 13, 2016. The petition
was signed by Gerard M. Healey, managing member. At the time of
filing, the Debtor estimated assets at $0 to $50,000 and
liabilities at $100,000 to $500,000.
OPELOUSAS GENERAL: S&P Lowers Rating on 2003 Hospital Bonds to BB+
------------------------------------------------------------------
S&P Global Ratings lowered its long-term rating on Opelousas
General Hospital Authority, La.'s series 2003 hospital revenue
bonds issued for Opelousas General Hospital, doing business as
Opelousas General Health System (OGHS), to 'BB+' from 'BBB-'. The
outlook is stable.
"The lower rating reflects our opinion of OGHS' vulnerable
enterprise profile, highlighted by what we consider low market
share due to substantial outmigration for tertiary services to
nearby competitors, and declining admissions through fiscal 2016,"
said S&P Global Ratings credit analyst Charlene Butterfield. "We
believe our expectation of further improvement in the financial
profile provides stability at the current rating."
S&P Global Ratings' assessed OGHS's enterprise as vulnerable
characterized by low market share in a small primary service area
with weak economic fundamentals, and its financial profile as
adequate characterized by a history of weak financial performance
that has improved in fiscal 2016 and through the first quarter of
fiscal 2017 ended Sept. 30, 2016. OGHS's low leverage and solid
debt service coverage partially offset its low unrestricted
reserves and high average age of plant.
S&P Global Ratings believes the organization will continue to face
operational challenges given its ongoing decline in utilization,
but it expects management's recent measures to reduce expenses,
generally through employee cuts and lowering supply costs, to help
improve operations in the coming year. Additionally, the rating
service believes that management's efforts to recruit additional
physicians could lead to volume growth in the next year.
Combined, S&P Global Ratings believes these credit factors lead to
an initial indicative rating of 'bb'. As S&P's criteria indicates,
the final rating can be within one notch on the indicative credit
level. "In our opinion, OGHS' light debt levels, debt burden and
solid coverage, and sound unrestricted reserves compared with debt,
compare favorably with peers and a final rating of 'BB+'," Ms.
Butterfield said.
PAULA SUE WENSTROM: Disclosures Okayed; Plan Hearing Nov. 28
------------------------------------------------------------
A Third Amended Disclosure Statement filed on Oct. 19, 2016 under
Chapter 11 of the Bankruptcy Code was filed by debtor Paula Sue
Wenstrom with respect to the Debtor's Second Amended Plan of
Reorganization filed on Aug. 11, 2016.
Judge Barbara J. Houser ordered that:
A. The Disclosure Statement is approved.
B. The hearing on confirmation of the Plan is been set for
Monday, Nov. 28, 2016 at 9:00 a.m. Central Time before the
Honorable Barbara J. Houser, United States Bankruptcy Judge,
Northern District of Texas, Dallas Division. The hearing will be
held at 1100 Commerce Street, 14th Floor, Courtroom #2, Dallas,
Texas 75242.
C. Tuesday, Nov. 22, 2016 is fixed as the Voting Deadline.
D. Tuesday, Nov. 22, 2016 is fixed as the last day for filing
and serving written objections to the Disclosure Statement and
confirmation of the Plan.
Third Amended Disclosure Statement
According to the Third Amended Disclosure Statement, the Debtor's
Chapter 11 Plan provides that secured creditor U.S. Bank will
receive upfront payment of $20,000 and then will be paid $1,200 on
the first day of each month, to start after the plan confirmation
date, for three years. The Debtor is paying the holders of general
unsecured claims, in cash, in full, in two equal payments.
A copy of the Third Amended Disclosure Statement in connection with
the Debtor's Second Amended Plan of Reorganization is available
at:
http://bankrupt.com/misc/txnb14-35340-109.pdf
About Paula Sue Wenstrom
Paula Sue Wenstrom owns and operates Cultural Surroundings, also
known as Putsi Inc., a supplier of library furnishings. Cultural
Surroundings was established in 1990. Wenstrom sought protection
under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Tex. Case No.
14-35340) on Nov. 3, 2014. Howard Marc Spector, Esq., at Spector &
Johnson, PLLC, serves as the Debtor's bankruptcy counsel.
PERFORMANCE SPORTS: Has Asset Purchase Pact with 9938982 Canada
---------------------------------------------------------------
In an amended Schedule 13D filed with the Securities and Exchange
Commission, Sagard Capital Partners, L.P., Sagard Capital Partners
GP, Inc., Sagard Capital Partners Management Corp., disclosed that
as of Oct. 31, 2016, they beneficially own 7,721,599 common shares,
no par value, of Performance Sports Group Ltd. which represents
16.9 percent of the shares outstanding.
Sagard Holdings Inc. and 9938982 Canada Inc., both members of the
Group, also reported non-ownership of shares of Performance Sports'
common stock.
On Oct. 31, 2016, Performance Sports and all of its U.S. and
Canadian subsidiaries and 9938982 Canada (the "Purchaser") entered
into an Asset Purchase Agreement, pursuant to which the Purchaser
has agreed to (i) purchase and assume substantially all of the
properties, rights, interests and other assets of the Debtors and
(ii) assume, become responsible for, and discharge and perform when
due certain of the liabilities of the Debtors, in each case subject
to the terms and conditions set forth in the APA, and for aggregate
consideration based on a base purchase price of US$575,000,000.
The foregoing would be accomplished through the sale, transfer and
assignment of the Assets by the Debtors to the Purchaser in a sale
undertaken pursuant to section 363 of the Bankruptcy Code and
Section 36 of the CCAA. As part of that purchase, certain
executory contracts and unexpired leases of the Debtors will be
assumed by and assigned to the Purchaser (or certain of its
designated subsidiaries) pursuant to section 365 of the Bankruptcy
Code. The Assets, contracts and leases would be acquired free and
clear of any and all liens or claims, other than liens permitted
and liabilities expressly assumed by the Purchaser (or certain of
its designated subsidiaries) under the APA.
In connection with the APA, it is expected that the Debtors will
concurrently conduct a competitive process pursuant to bidding
procedures to be approved by the Courts, seeking higher and better
qualified bids for a sale at auction of all or substantially all of
the Debtors' assets pursuant to Section 363 of the Bankruptcy Code
and Section 36 of the CCAA. Upon approval by the Courts, the
bidding procedures will provide that the Purchaser is the "stalking
horse" bidder for the Assets and that the Debtors will pay a
break-up fee to the Purchaser equal to US$20,125,000 upon the
consummation of an alternate transaction involving the sale of
substantially all of the Assets to any person or entity other than
the Purchaser or in certain other circumstances where the
Transactions are not consummated. The APA, subject to the approval
of the Courts, also provides for reimbursement of certain expenses
incurred by the Purchaser in connection with the APA.
The APA is subject to a number of closing conditions, including,
among others, (i) the approval of the Courts, (ii) the accuracy of
representations and warranties of the parties, and (iii) compliance
in all material respects with the obligations set forth in the
APA.
The APA will terminate following the occurrence of certain
termination events set forth in the APA, subject to, in most cases,
a cure period, unless the Termination Event is waived by the
applicable Parties.
The APA requires that the Purchaser deposit a "good faith deposit"
of US$28,750,000 by wire transfer of immediately available funds to
be held in escrow in accordance with the terms of an escrow
agreement.
The APA also includes certain customary representations and
warranties of the parties, as well as a covenant by the Debtors to
use commercially reasonable efforts to operate in the ordinary
course of business, taking into account their status as
debtors-in-possession.
Debtor-in-Possession Financing
The Company has disclosed that Bank of America, N.A. and certain
other of its existing asset-based lenders have agreed to arrange
debtor-in-possession financing to support the Debtors' continued
operations during the pendency of the Chapter 11 cases.
The Purchaser has agreed to arrange debtor-in-possession financing
to support the Issuer's continued operations during the pendency of
the Chapter 11 cases and the CCAA Proceedings. The Term DIP
Financing is evidenced by a Superpriority Debtor-in-Possession
Credit Agreement providing for a secured multiple draw term loan
credit facility of up to US$361,300,000, with US$30,000,000
available to fund working capital needs and US$331,300,000
available to repay in full the Issuer's existing pre-petition term
loan facility. The Term DIP Financing is subject to approval by
the Courts and borrowings thereunder are subject to entry of final
orders by the Courts.
The maturity date of the Term DIP Facility is defined as the
earliest of: (a) 120 days from the Petition Date; (b) the
consummation of the APA or other sale of all or substantially all
of the assets of the Debtors; (c) the occurrence of an event of
default specified under the Term DIP Facility and acceleration of
all term loans and cancellation of commitments thereunder; (d)
three business days after the Petition Date if an interim order
approving the Term DIP Facility is not entered by the Courts; and
(e) 30 days after the Petition Date if a final order approving the
Term DIP Financing has not been entered by the Courts. Interest on
the Term DIP Facility is payable in cash at a per annum rate equal
to 8%. Subject to the entry of a final order approving the Term
DIP Facility and limited carve-outs, the Issuer is expected to draw
on the Term DIP Facility to repay the Issuer’s prepetition
secured term loans and, in connection therewith, the Issuer’s
obligations under the Term DIP Facility will be secured by all
pre-petition and post-petition assets of the Issuer.
The obligations of the Issuer under the Term DIP Facility are
guaranteed by each of the U.S. and Canadian subsidiaries of the
Issuer and secured by all or substantially all the assets of the
Issuer and the Guarantors.
Equity Commitment Letter
As required by Section 3.6 of the APA, the Purchaser has delivered
to the Issuer a copy of an Equity Commitment Letter with the
Purchaser pursuant to which Sagard Holdings and Fairfax have
committed to provide the Purchaser with equity financing of up to
US$475,000,000 in the aggregate for the transactions contemplated
by the APA. Pursuant to the Equity Commitment Letter, subject to
the terms and conditions set forth therein, each Backstop Party has
committed, severally and not jointly, to contribute cash to the
Purchaser up to the respective maximum dollar amounts set forth in
the Equity Commitment Letter, the aggregate amount of which would
be available to enable the Purchaser to fund (i) the Purchaser's
commitment to advance the Term DIP Financing and (ii) the
Purchaser's performance of its obligations under the APA (including
payment of the Deposit).
Exit Debt Financing Commitment Letter
As required by Section 3.6 of the APA, the Purchaser has delivered
to the Issuer a copy of a Commitment Letter pursuant to which
Merrill Lynch, Pierce, Fenner & Smith Incorporated, JPMorgan Chase
Bank, N.A. and Wells Fargo Bank, National Association, and Bank of
America, JPMorgan, Wells Fargo, Royal Bank of Canada and The Bank
of Nova Scotia have committed to the Purchaser, subject to the
conditions set forth therein, to provide debt financing in order to
(x) finance the transactions contemplated by the APA, (y) issue
standby or commercial letters of credit, and (z) finance ongoing
working capital needs and general corporate purposes after the
consummation of the transactions contemplated by the APA, so long
as the transactions contemplated by the APA are consummated
successfully with 9938982 Canada (as opposed to any competing
bidder).
Work Fee Letter
The Issuer has entered into a Work Fee Letter with 9938982 Canada
in connection with the possible pursuit of strategic alternatives
with the Issuer. Pursuant to the Work Fee Letter, the Issuer paid
a fee of $2,500,000 to the Reporting Persons in consideration of
work performed in investigating various strategic alternatives with
the Issuer, including any future due diligence, analyses,
negotiation, preparation and execution of term sheets and final
commitments relating to the foregoing, as applicable. If the
Break-Up Fee becomes due and payable under the APA, the Break-Up
Fee payable to 9938982 Canada shall be reduced by the amount of the
Work Fee actually paid to 9938982 Canada. In addition, the Work
Fee Letter provides that (i) if any Breakup Fee is not due and
payable in accordance with the APA, and 9938982 Canada consummates
the transaction contemplated by the APA, then, contemporaneous with
closing of such transaction, 9938982 Canada is obligated to refund
the Work Fee to the Issuer; or (ii) if any Breakup Fee is not due
and payable in accordance with the APA, and 9938982 Canada does not
consummate the transaction contemplated by the APA by reason of its
breach of the APA, then the amount of any deposit made by 9938982
Canada in connection with the APA shall be reduced
dollar-for-dollar by the amount of the Work Fee and that same
amount shall be released by the applicable deposit escrow agent to
the Issuer.
A full-text copy of the regulatory filing is available at:
https://is.gd/IjRe3f
About Performance Sports
Exeter, N.H.-based Performance Sports Group Ltd. (NYSE: PSG) (TSX:
PSG) -- http://www.PerformanceSportsGroup.com/-- is a developer
and manufacturer of ice hockey, roller hockey, lacrosse, baseball
and softball sports equipment, as well as related apparel and
soccer apparel. Its products are marketed under the BAUER,
MISSION, MAVERIK, CASCADE, INARIA, COMBAT and EASTON brand names
and are distributed by sales representatives and independent
distributors throughout the world. In addition, the Company
distributes its hockey products through its Burlington,
Massachusetts and Bloomington, Minnesota Own The Moment Hockey
Experience retail stores.
On Oct. 31, 2016, Performance Sports Group Ltd. and certain of its
affiliates have filed voluntary petitions under Chapter 11 of the
Bankruptcy Code in the District of Delaware and commenced
proceedings under the Companies' Creditors Arrangement Act in the
Ontario Superior Court of Justice.
The U.S. Debtors are: BPS US Holdings Inc.; Bauer Hockey, Inc.;
Easton Baseball/Softball Inc.; Bauer Hockey Retail Inc.; Bauer
Performance Sports Uniforms Inc.; Performance Lacrosse Group Inc.;
BPS Diamond Sports Inc.; and PSG Innovation Inc.
The Canadian Debtors are: Performance Sports Group Ltd.; KBAU
Holdings Canada, Inc.; Bauer Hockey Retail Corp.; Easton Baseball /
Softball Corp.; PSG Innovation Corp. Bauer Hockey Corp.; BPS Canada
Intermediate Corp.; BPS Diamond Sports Corp.; Bauer Performance
Sports Uniforms Corp.; and Performance Lacrosse Group Corp.
The Debtors have hired Paul, Weiss, Rifkind, Wharton & Garrison LLP
as counsel; Young Conaway Stargatt & Taylor, LLP as co-counsel;
Stikeman Elliott LLP as Canadian legal counsel; Centerview LLP as
investment banker to the special committee; Alvarez & Marsal North
America, LLC, as restructuring advisor; Joele Frank, Wilkinson,
Brimmer, Katcher as communications & relations advisor; KPMG LLP as
auditors; Ernst & Young LLP as CCAA monitor; and Prime Clerk LLC as
notice, claims, solicitation and balloting agent.
PERFORMANCE SPORTS: Moody's Lowers PDR to D-PD on Chap. 11 Filing
-----------------------------------------------------------------
Moody's Investors Service downgraded Performance Sports Group's
(PSG) Probability of Default Rating (PDR) to D-PD from Caa2-PD
following the company's Chapter 11 filing on Oct. 31, 2016.
Performance Sports Group's other ratings were affirmed. The rating
outlook remains negative.
Shortly following this rating action, Moody's will withdraw all
ratings and the rating outlook of Performance Sports Group
consistent with Moody's practice for companies operating under the
purview of the bankruptcy courts wherein information flow typically
becomes much more limited.
Rating downgraded:
Probability of Default Rating, Downgraded to D-PD from Caa2-PD;
Ratings affirmed:
Corporate Family Rating at Caa2;
Term Loan B rating at Caa3 (LGD4);
Speculative Grade Liquidity Rating at SGL-4
RATINGS RATIONALE
The downgrade of the PDR to D-PD reflects Performance Sports
Group's filing under Chapter 11 in the U.S. Bankruptcy Court in
Wilmington, Delaware and a similar court process in Canada on Oct.
31, 2016. The bank waiver for the company to file its Audited
Financial Statements for the year ended May 31, 2016, (which were
originally due on August 15, 2016) expired on Oct. 28, 2016.
As part of the bankruptcy filing, Fairfax Financial Holdings Ltd.
and Sagard Capital Partners have entered into a "Purchase
Agreement" with the company. Pursuant to the agreement, Fairfax
and Sagard would acquire substantially all of the assets of the
Company and its North American subsidiaries for $575 million,
assume related operating liabilities and serve as a "stalking
horse" bidder through the bankruptcy process. The Purchase
Agreement sets the floor, or minimum acceptable bid during the
bankruptcy proceedings. Fairfax and Sagard have also agreed to
provide $386 million of debtor-in-possession financing. As of
February, Performance Sports Group owed $331 under the term loan
and $119 million on its ABL revolver.
The affirmation of the Caa2 Corporate Family Rating and Caa3 term
loan rating reflects the expected strong recovery in the bankruptcy
proceedings, while at the same time recognizing the increased
uncertainty that any bankruptcy filing entails.
The principal methodology used in these ratings was Consumer
Durables Industry published in September 2014.
Headquartered in Exeter, New Hampshire, Performance Sports Group
Ltd., designs, manufactures and distributes high performance sports
equipment for ice hockey, roller hockey, lacrosse, baseball,
softball and related apparel and accessories. Pro forma revenue
approximated $600 million for the twelve months ended February
2016.
PETROQUEST ENERGY: Reports $23.3 Million Net Loss in Third Quarter
------------------------------------------------------------------
PetroQuest Energy, Inc. reported a loss available to common
stockholders of $23.30 million on $17.09 million of oil and gas
sales for the three months ended Sept. 30, 2016, compared to a loss
available to common stockholders of $51.91 million on $26.87
million of oil and gas sales for the three months ended Sept. 30,
2015.
For the nine months ended Sept. 30, 2016, the Company reported a
loss available to common stockholders of $86.58 million on $50.23
million of oil and gas sales compared to a loss available to common
stockholders of $235.2 million on $92.87 million of oil and gas
sales for the same period in 2015.
As of Sept. 30, 2016, PetroQuest had $174.4 million in total
assets, $411.2 million in total liabilities and a total
stockholders' deficit of $236.8 million.
The losses during the quarter and nine months ended Sept. 30, 2016,
and Sept. 30, 2015, included non-cash ceiling test write-downs
totaling $8.665 million and $40.30 million, respectively, and
$40.21 million and $214.6 million, respectively.
Net cash flow provided by (used in) operating activities totaled
($25.67 million) and $18.35 million during the third quarters of
2016 and 2015, respectively. Discretionary cash flow for the third
quarter of 2016 was $207,000, as compared to $4.990 million for the
comparable 2015 period. Net cash flow provided by (used in)
operating activities totaled ($51.74 million) and $23.98 million
during the first nine months of 2016 and 2015, respectively. For
the first nine months of 2016, discretionary cash flow was ($2.994
million), as compared to $22.85 million for the first nine months
of 2015.
Production for the third quarter of 2016 was 5.2 Bcfe, compared to
7.4 Bcfe for the comparable period of 2015. For the first nine
months of 2016, production was 18.9 Bcfe, compared to 27.5 Bcfe for
the comparable period of 2015. The reduction in production volumes
during the 2016 periods is primarily attributable to the sale of
the Company's Arkoma assets in 2015, as well as the continued lack
of capital expenditures.
Stated on an Mcfe basis, unit prices including the effects of
hedges for the third quarter of 2016 were $3.27 per Mcfe, as
compared to $3.62 per Mcfe in the third quarter of 2015. For the
first nine months of 2016, unit prices including the effects of
hedges, were $2.66 per Mcfe, as compared to $3.38 per Mcfe for the
first nine months of 2015.
Oil and gas sales during the third quarter of 2016 were $17.09
million, as compared to $26.87 million in the third quarter of
2015. For the first nine months of 2016, oil and gas sales were
$50.24 million as compared to oil and gas sales of $92.87 million
for the first nine months of 2015.
Lease operating expenses for the third quarter of 2016 decreased to
$6.857 million as compared to $10.07 million in the third quarter
of 2015. Lease operating expenses decreased during the three
months ended Sept. 30, 2016, primarily as a result of the Company's
2015 Arkoma divestiture. LOE per Mcfe was $1.31 for the third
quarter of 2016, as compared to $1.35 in the third quarter of 2015.
For the first nine months of 2016, lease operating expenses were
$1.16 per Mcfe compared to $1.17 per Mcfe in the first nine months
of 2015.
Depreciation, depletion and amortization on oil and gas properties
for the third quarter of 2016 was $1.12 per Mcfe, as compared to
$1.79 per Mcfe in the third quarter of 2015. For the first nine
months of 2016, DD&A on oil and gas properties was $1.21 per Mcfe
compared to $1.88 per Mcfe for the comparable period of 2015. The
decrease in the per unit DD&A rate during the 2016 periods is
primarily the result of recent ceiling test write-downs.
Interest expense for the third quarter of 2016 decreased to $7.737
million, as compared to $8.526 million in the third quarter of
2015. Interest expense for the third quarter of 2016 included the
non-cash write-off of approximately $1 million of deferred
financing costs. During the three month period ended Sept. 30,
2016, capitalized interest totaled $167,000, as compared to
$724,000 during the 2015 period. For the first nine months of 2016,
interest expense was $22.50 million , compared to $24.996 million
for the comparable period of 2015. During the nine month period
ended Sept. 30, 2016, capitalized interest totaled $722,000, as
compared to $4.100 million during the 2015 period. The decrease in
interest expense during the 2016 periods is primarily attributable
a lower debt balance after the completion of the Company's debt
exchange in February 2016 as well as the repayment of the Company's
bank debt in June 2015.
General and administrative expenses during the quarter and nine
months ended Sept. 30, 2016, totaled $8.827 million and $21.297
million, respectively, as compared to $4.686 million and $16.54
million during the comparable 2015 periods. Capitalized general
and administrative expenses during the quarter and nine months
ended September 30, 2016 totaled $1.268 million, and $4.347
million, respectively, as compared to expenses of $1.926 million
and $6.522 million during the comparable 2015 periods. General and
administrative expenses for the three and the nine month 2016
periods included approximately $5.300 million and $10.10 million in
expenses, respectively, related to the Company's two debt exchanges
in 2016.
East Texas Joint Venture
The Company continues to make progress toward a joint venture in
the Cotton Valley and expects to close the joint venture and spud
the first well thereunder before the end of 2016. During the first
quarter of 2016, the Company sold a portion of its 100% owned 6,400
gross acre Cotton Valley position to a potential joint venture
partner for $7 million. The Company expects to re-acquire this
acreage for $5 million prior to closing the joint venture.
Thunder Bayou Update
In the Gulf Coast, the Company's Thunder Bayou well is currently
flowing from the initial completion in the lower section of the
Cris R-2 formation (48 net feet of pay) at approximately 18 MMcfe/d
(NRI-37%). The daily production rate of the well continues to
decline as expected. As a result, the Company's production
guidance for the fourth quarter of 2016 assumes the well will be
shut-in for the month of December due to the Company's planned
recompletion into the upper section of the Cris R-2 formation (154
net feet of pay). Thunder Bayou is forecasted to be back online in
January 2017.
Liquidity Update
The Company recently enhanced its liquidity position through a new
$50 million multidraw term loan and the issuance of debt in the
Company's September 2016 debt exchange that includes a
payment-in-kind feature that is expected to provide approximately
$33 million of cash interest savings over the next 18 months.
During the third quarter of 2016, the Company's cash balance
declined from approximately $69 million at June 30, 2016 to
approximately $34 million at Sept. 30, 2016. The primary uses of
cash during the third quarter of 2016 were $21 million for accrued
interest and fees related to the debt exchange, $4 million in
capital expenditures and payments to reduce accounts payable to
vendors. In October 2016, the Company borrowed $10 million under
its multidraw term loan for additional working capital needs
including payments to reduce accounts payable to vendors.
Management's Comment
"The debt exchange completed in September 2016 has resulted in a
significant opportunity for our team, on behalf of all of our
stakeholders, to capitalize on the value of our attractive
properties in East Texas and Gulf Coast as commodity prices
continue to improve," said Charles T. Goodson, chairman, chief
executive officer and president. "The planned recompletion of our
Thunder Bayou well should be a near-term catalyst of increased cash
flow in the first quarter of 2017 and beyond. We expect to
finalize our East Texas joint venture in the coming weeks, on terms
attractive to both the investors and the Company, and expect to
spud our first well before year-end. We look forward to 2017 as a
year of renewed and significant growth in production, with all
capital expenditures expected to be funded by cash flow."
A full-text copy of the Form 8-K filing is available at:
https://is.gd/JUY1Jq
About PetroQuest
PetroQuest Energy, Inc., is an independent energy company engaged
in the exploration, development, acquisition and production of oil
and natural gas reserves in East Texas, Oklahoma, South Louisiana
and the shallow waters of the Gulf of Mexico. PetroQuest's common
stock trades on the New York Stock Exchange under the ticker PQ.
In its quarterly report for the period ending June 30, 2016, the
Company stated, "Our substantially decreased level of capital
spending has had and is expected to continue to have a negative
impact on our production and cash flow from operating activities.
We expect production to continue to decline throughout 2016 and
when combined with current commodity prices and our existing cost
structure, including 10% interest expense on the $280 million of
debt represented by our 2017 Notes and 2021 Notes, we believe that
we will continue to incur significant losses and negative cash flow
from operating activities for the remainder of 2016. In addition,
$136 million of the indebtedness represented by our 2017 Notes will
mature on September 1, 2017 and would be reflected as a current
liability on our September 30, 2016 balance sheet if not refinanced
prior to the filing of our Quarterly Report on Form 10-Q for the
quarterly period ended September 30, 2016, which would raise
substantial doubt about our ability to continue as a going
concern," the Company stated in its quarterly report for the period
ended June 30, 2016.
"We are evaluating additional sources of liquidity including asset
sales, joint ventures, exchange offers and alternative financing
arrangements to replace the Credit Agreement, but there is no
assurance that these sources will provide sufficient, if any,
incremental liquidity. We are also evaluating various options to
address the September 2017 maturity of our 2017 Notes as well as
assessing our overall capital structure. These options include
additional public or private exchanges of 2017 Notes for new
secured debt and/or common stock, refinancing the 2017 Notes with
unsecured debt and/or common stock as well as a broader
restructuring of our 2017 and 2021 Notes. To assist the Board of
Directors and management team in evaluating these options, we have
retained Jefferies LLC and Seaport Global as our financial advisors
and Porter Hedges LLP as our legal advisor. There is no assurance
that any refinancing or debt or equity restructuring will be
possible or that additional equity or debt financing can be
obtained on acceptable terms, if at all. If we are unable to
improve our liquidity position, and refinance or restructure our
debt, we may seek bankruptcy protection to continue our efforts to
restructure our business and capital structure. As a part of that
process, we may have to liquidate our assets and may receive less
than the value at which those assets are carried on our
consolidated financial statements."
* * *
PetroQuest Energy carries a 'Caa3' corporate family rating from
Moody's Investors Service.
As reported by the TCR on Oct. 26, 2016, S&P Global Ratings raised
the corporate credit rating on Lafayette, La.-based E&P company
PetroQuest Energy Inc. to 'CCC' from 'SD'. "The upgrade reflects
our reassessment of the company's corporate credit rating following
the exchange of the majority of its outstanding 10% senior
unsecured notes due September 2017 at par," said S&P Global Ratings
credit analyst Daniel Krauss. The negative outlook reflects the
company's current debt leverage levels, which S&P views to be
unsustainable, as well as its less than adequate liquidity
position.
PICO HOLDINGS: RPN Says Hart, Bogue in Suspicious Real Estate Deal
------------------------------------------------------------------
PICO Holdings, Inc. (Nasdaq:PICO), based in La Jolla, Calif., is a
diversified holding company reporting recurring losses since 2008.
PICO owns 57% of UCP, Inc. (NYSE:UCP), 100% of Vidler Water
Company, Inc., a securities portfolio and various interests in
small businesses. PICO has $662 million in assets and $426 million
in shareholder equity. Central Square Management LLC and River Road
Asset Management LLC collectively own more than 14% of PICO. Other
activists at http://ReformPICONow.com/(RPN) have taken to the
Internet to advance the shareholder cause.
The bloggers have once again uncovered evidence that may indicate
wrongdoing on the part of PICO CEO John Hart and UCP CEO Dustin
Bogue.
The bloggers wrote, "We believe that John Hart and Dustin Bogue
misappropriated PICO Holdings' shareholder funds for the personal
benefit of Mr. Bogue and to the detriment of PICO shareowners. We
believe that what you are about to read amounts to willful
misconduct that is materially and demonstrably injurious to PICO
Holdings.
"We call on the Boards of both PICO and UCP to conduct a formal
investigation into this matter, complete with independent forensic
experts. We call on both Boards to pursue truth expeditiously and
to communicate that truth to shareowners.
"A few months back, we analyzed UCP's Registration Statement filed
with the SEC on July 8, 2013. On page 180, we noticed something
peculiar:
Release from Guarantee
"In 2012, we acquired 44 finished lots located in Fresno County in
a project known as Red Hawk from a Fresno-based bank, or the Red
Hawk Lender. The Red Hawk Lender acquired Red Hawk through a
foreclosure proceeding related to a $9.4 million land acquisition
and development loan it made to the prior owner of Red Hawk. The
previous majority owners of Red Hawk, including Dustin L. Bogue,
our President and Chief Executive Officer, had each personally
guaranteed the full amount of the loan from the Red Hawk Lender. We
acquired Red Hawk in an open market transaction conducted by the
Red Hawk Lender. In connection with our acquisition of Red Hawk,
the Red Hawk Lender released Mr. Bogue and the other guarantors
from any and all liability relating to their personal guarantees."
The bloggers investigated and discovered a lawsuit related to the
Red Hawk Transaction. "The plaintiff, or the 'Red Hawk Lender,' is
Premier Valley Bank. Mr. Bogue is one of several Defendants. The
case number is 110-CV-176515. The case was filed in the Superior
Court of Fresno in California.
The story begins in 2006. Mr. Bogue, Steven H. Costa, James W.
Hoey, Debra J. Hoey, JS Land Company, Union Community Builders LLC,
Union Community Holdings LLC, were principals in Red Hawk Community
Partners, LLC, which owned the Red Hawk Community property,
comprised of 45 unfinished lots at 12517 East Ashlan Avenue, in
Sanger, California.
Premier Valley Bank underwrote the Defendants, including Mr. Bogue,
a construction and development loan for $9.4 million to develop and
sell the 45 unfinished lots of the Red Hawk Community. The loan was
initiated on July 25, 2006 with a two-year term, to be repaid on
July 25, 2008.
The Defendants, including Mr. Bogue, collateralized the loan by
pledging the Red Hawk Property and providing unlimited personal
guarantees. The Red Hawk Community also served as collateral.
A December 4, 2009 appraisal indicated a significant decline in the
value of the Red Hawk Community to $4,430,000, which was $1,935,000
below the minimum value established by the Loan Agreement. Craig E.
Sandall, Vice President of Premier Valley Bank, stated that the
loan was placed in default. Premier Valley Bank started the
foreclosure process on the Red Hawk Construction Deed of Trust.
The Defendants, including Mr. Bogue, failed to cure the default. In
February 2010, Premier Valley Bank sued the Defendants, including
Mr. Bogue, for Breach of Contract and Specific Performance. Premier
Valley Bank sought $1,935,000 in damages plus attorney's fees and
other costs. David J. Weiland, Esq., of Dowling, Aaron & Keeler,
Inc., represented Premier Valley Bank.
Premier Valley Bank foreclosed on the Red Hawk Community and
subsequently purchased it at the foreclosure sale with a credit bid
of $3.6 million. Premier Valley Bank was now the owner of the Red
Hawk Community.
In July 2011, the Honorable Peter H. Kirwan, set a jury trial date
for January 9, 2012. The trial was expected to last 4-5 days. The
remaining Defendants, including Mr. Bogue, conducted discovery and
prepared for trial. Simultaneously, the parties engaged in
alternative dispute resolution, specifically mediation.
In November 2011, at the request of Mr. Weiland, attorney for
Premier Valley Bank, Judge Kirwan vacated the trial date, as Mr.
Bogue and Premier Valley Bank were making progress towards a
settlement.
On July 26, 2012, the transaction in question took place. Premier
Valley Bank sold the Red Hawk Community to BMCH LLC California, a
subsidiary of UCP, which was then a subsidiary of PICO. The price
and other terms were not disclosed.
According to the bloggers, "We procured this document with the help
of expert real estate attorney, Jean Heinz, Esq., of Heinz &
Feinberg, in San Diego, California. We asked Mrs. Feinberg if the
price and terms of the transaction could be determined through
other public documents. She responded in the negative, "They were
very careful -- see how the transfer tax is not disclosed."
The bloggers find the evidence suspicious and demand an
investigation of the Red Hawk transaction. They worry that PICO
bailed out Mr. Bogue from his underwater personal guarantee
attached to the Red Hawk Loan. "Banks are not in the business of
giving away assets for free. We believe that Premier Valley Bank
made Mr. Hart and PICO pay for the release of Mr. Bogue from the
guarantee, thereby causing PICO to overpay for the Red Hawk
Community. This would be a misappropriation of PICO's shareholder
funds.
The value of the Red Hawk Community deteriorated considerably from
the 2009 appraisal presented in the case file, to when PICO
purchased it in 2012. In 2009, the Red Hawk Community was appraised
at $4.43 million. Residential real estate prices in Sanger dropped
30% between 2009 and 2012, so the Red Hawk Community would would
have been worth only $3.1 million in 2012. If PICO and Mr. Hart
paid more than $3.1 million in 2012, then the Red Hawk Community
was purchased at a considerable premium to market.
The Red Hawk Community has probably destroyed millions of dollars
in value for PICO and UCP shareholders; 35 homes have been sold
between 2013 and 2016 -- or about one per month. That is an abysmal
absorption rate, as the industry average is over 2 per month -- or
double Red Hawk's metric. In order to earn an economic profit, 44
homes should be sold in about 2 years -- UCP has only sold 35 homes
in 3 years!"
The bloggers want to know the answer to one important question:
"How much did PICO pay for the Red Hawk Community in 2012?
Mr. Hart had a fiduciary duty to PICO shareholders to allocate
capital at acceptable returns. He had a fiduciary duty to NOT
purchase the Red Hawk Community if it could not produce an adequate
return for owners.
Is Mr. Bogue fit to be CEO and a Director of a publicly-traded
homebuilder, given that he went bust on a large real estate deal
and, like a child running to mommy, got bailed out by a
publicly-traded company with deep pockets?
"We call on the PICO Directors to conduct an investigation of the
Red Hawk Community transaction, complete with independent forensic
experts. We call on the PICO Directors to expeditiously seek the
truth and communicate results frequently and clearly to the owners
of the business."
PIONEER HEALTH: Selling Oneida Assets to Rennova for $600,000
-------------------------------------------------------------
Pioneer Health Services, Inc., asks the U.S. Bankruptcy Court for
the Southern District of Mississippi to authorize the sale of
substantially all assets of Pioneer Health Services of Oneida, Inc.
outside the ordinary course of business to Rennova Health, Inc. for
$600,000, subject to overbid.
Debtor Oneida purchased its facility and operated it for a period
of time after it was acquired. Despite implementing a range of
strategic initiatives, Oneida continued to generate significant
monthly operating losses. After continuing to lose money,
post-petition, of unacceptable amounts, Pioneer made the decision
to close the hospital effective June 26, 2016.
Prior to closing the hospital, Pioneer held extensive negotiations
with multiple parties about an accelerated sale at a discounted
valuation in order to keep the hospital open. Despite these
efforts, Pioneer was unable to find a Buyer to assume control of
the hospital and it closed on June 26, 2016.
SOLIC Capital Advisors, upon being retained as financial advisor on
July 1, 2016, began compiling an electronic dataroom for Oneida
containing historical operating, financial, legal and regulatory
facility related information. During July and August, SOLIC granted
dataroom access to 13 parties expressing initial interest in
acquiring the hospital and reopening it. SOLIC set a preliminary
bid deadline of August 12 for interested parties to submit a
proposal with an asset purchase agreement.
On August 12, SOLIC received the proposal from Rennova as well as
one other proposal at a substantially lower offer. During the
period when SOLIC was negotiating with Rennova, SOLIC received a
proposal from another party that was substantially similar to
Rennova, SOLIC then begin to negotiate an asset purchase agreement
with both Rennova and the other party; however over the past three
weeks the other party has failed to respond to the comments SOLIC
and Pioneer provided on their Asset Purchase Agreement ("APA").
A copy of the APA attached to the Motion is available for free at:
http://bankrupt.com/misc/Pioneer_Health_1193_Sales.pdf
The salient terms of the APA are:
a. Purchased Assets: All assets of the Sellers, wherever
located and whether or not carried or reflected on the books and
records of Sellers, excluding the "Excluded Assets."
b. Purchase Price: $600,000
c. Purchaser: Rennova Health, Inc.
d. Deposit: 10% of the purchase price
e. Terms: The sale of the assets will be free and clear
of all Interests of any kind or nature whatsoever.
f. Assumption of Liabilities: Purchaser will not assume
or otherwise be responsible for any liabilities of Sellers, except
that from and after the Closing, the Purchaser will assume as and
when due, the "Assumed Liabilities."
g. Assigned Contracts and Cure Amounts: Sellers will
assign to Purchaser, and Purchaser will assume from Sellers, the
Assigned Contracts. The cure amounts, if any, as determined by the
Bankruptcy Court, necessary to allow assumption and assignment will
be paid by Purchaser at closing.
The Debtor and SOLIC will continue to market the Purchased Assets
and conduct a sale process in compliance with a Bid Procedures
Order.
The Debtor agrees to these Bid Procedures and will use its best
efforts to cause such procedures to be adhered to and, if
necessary, approved by the Bankruptcy Court:
a. Initial minimum overbid by a Competing Bid of $100,000
(the Purchaser Termination Fee of $50,000 plus the incremented bid
of $50,000);
b. incremented bids by Qualified Bidders of no less than
$50,000;
c. right of Purchaser to credit bid its Purchaser
Termination Fee;
d. payment of the Purchaser Termination Fee, if
applicable, in accordance with Section 6.5 of the APA;
e. deadline to qualify Competing Bids is Nov. 2, 2016;
f. conducting an auction in the event of any qualified
Competing Bids no later than Nov. 15, 2016; and
g. commencement of a hearing before the Bankruptcy Court
to approve the transaction and seek entry of Sale Order no later
than Nov. 30, 2016.
At this time, the Rennova proposal represent the highest bid
received with both Pioneer and Rennova in mutual agreement on the
terms of the APA. The Rennova proposal represent the best
opportunity for hospital to reopen in the near term while
generating funds to pay administrative expenses resulting from the
hospital's closure. The Debtor requests that its representative
(Scott Phillips, its Chief Restructuring Officer) be authorized and
directed to consummate the transaction pursuant to and in
accordance with the terms and conditions of the APA.
The "Assigned Contracts" assumed by the Debtor and assigned to the
Purchaser at Closing, pursuant to an Order granting the Motion,
will consist of those Assigned Contracts listed in the APA.
Pursuant to Sections 105(a) and 365 of the Bankruptcy Code, and
subject to and conditioned upon the further terms of any Order
approving the Motion and the Closing of the Transaction, the Debtor
requests the assumption and assignment to the Purchaser on the
terms set forth in the APA and of all Assigned Contracts.
The Purchaser:
RENNOVA HEALTH, INC.
Victoria Nemerson General Counsel
400 South Australian Avenue
West Palm Beach, FL 33401
Facsimile: (561) 584-6835
is represented by:
Elizabeth S. Warren, Esq.
BASS, BERRY & SIMS PLC
150 Third Avenue S, Suite 2800
Nashville, TN 37201
Facsimile: (615) 742-7719
About Pioneer Health Services
Pioneer Health Services, Inc., and its debtor-affiliates,
including
Medicomp Inc., filed separate Chapter 11 bankruptcy petitions
(Bankr. S.D. Miss. Lead Case No. 16-01119) on March 30, 2016.
Pioneer Health Services of Early County, LLC, filed a Chapter 11
case on April 8, 2016. The cases are administratively
consolidated.
The petitions were signed by Joseph S. McNulty III, president.
The Debtors provide healthcare services to rural communities, and
own and manage rural critical access hospitals.
Judge Hon. Neil P. Olack presides over the Debtors' cases.
The Law Offices of Craig M. Geno PLLC serves as the Debtors'
counsel, Mintz Levin Cohn Ferris Glovsky and Popeo, P.C., to act
as
special counsel.
Pioneer Health Services estimated $10 million to $50 million in
both assets and liabilities.
Henry Hobbs, Jr., acting U.S. trustee for Region 5, on April 19
appointed three creditors of Pioneer Health Services, Inc. to
serve
on the official committee of unsecured creditors. The committee
hired Arnall Golden Gregory LLP as counsel, and GlassRatner
Advisory & Capital Group LLC as financial advisor.
PIONEER ROOFING: Seeks to Hire Doug Phelps as Business Consultant
-----------------------------------------------------------------
Pioneer Roofing Systems, Inc. seeks approval from the U.S.
Bankruptcy Court for the Eastern District of Virginia to hire a
business consultant in connection with its Chapter 11 case.
The Debtor proposes to hire Doug Phelps to assist in the
preparation of an annual business plan and preparation of a Chapter
11 plan of reorganization. His anticipated fee for assisting in
the preparation of the bankruptcy plan and budget is $8,000.
Mr. Phelps has no connections with the Debtor or any of its
creditors, according to court filings.
Mr. Phelps' address is:
Doug Phelps
P.O. Box 1134
Mauldin, SC 29662
Phone: 386-585-4624
The Debtor is represented by:
John T. Donelan, Esq.
Law Office of John T. Donelan
125 South Royal Street
Alexandria, VA 22314
Tel: 703-684-7555
Fax: 703-684-0981
About Pioneer Roofing Systems
Pioneer Roofing Systems, Inc. sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. E. D. Va. Case No. 15-13518) on October
8, 2015. The petition was signed by Stephen R. Wann, president.
The case is assigned to Judge Brian F. Kenney.
At the time of the filing, the Debtor estimated assets of less than
$1 million and liabilities of $1 million to $10 million.
PLASTIC2OIL INC: Grants CFO 5.2 Million Stock Option Awards
-----------------------------------------------------------
Plastic2Oil, Inc., granted to Rahoul S. Banerjea, the Company's
chief financial officer and secretary, two awards of incentive
stock options to purchase a total of 5,250,000 shares of the
Company's common stock pursuant to the Company's 2012 Long-Term
Incentive Plan. The awards consisted of (i) an award of 2,250,000
option shares, at an exercise price of $0.17 per share, which are
fully vested on the date of the grant and (ii) an award of
3,000,000 option shares, at an exercise price of $0.5 per share
(representing the closing sales price for shares of the Company's
common stock on the OTCQB Capital Market on the date of grant),
which will vest in equally annual installments over a period of
three years beginning on March 18, 2017, subject to acceleration of
certain vesting upon the occurrence of a Change in Control or
termination of employment for Good Reason or without Cause (as such
terms are defined in the relevant Incentive Stock Option
Agreement).
About Plastic2Oil
Plastic2Oil, Inc., formerly JBI Inc., is a North American fuel
company that transforms unsorted, unwashed waste plastic into
ultra-clean, ultra-low sulphur fuel without the need for
refinement. The Company's Plastic2Oil (P2O) is a process designed
to provide immediate economic benefit for industry, communities
and government organizations with waste plastic recycling
challenges. It is also focused on the creation of green
employment opportunities and a reduction in the cost of plastic
recycling programs for municipalities and business. The Company's
fuel products include No. 6 Fuel, No. 2 Fuel (diesel, petroleum
distillate), Naphtha, Petcoke (carbon black) and Off-Gases. No. 6
Fuel is heavy fuel used in industrial boilers and ships. No. 2
Fuel is a mid-range fuel known as furnace oil or diesel. Naphtha
is a light fuel that is used as a cut feedstock for ethanol or as
white gasoline in high and regular grade road certified fuels.
Plastic2Oil reported a net loss of $4.32 million on $16,728 of
total sales for the year ended Dec. 31, 2015, compared to a net
loss of $6.80 million on $59,017 of total sales for the year ended
Dec. 31, 2014.
As of June 30, 2016, Plastic2Oil had $5.08 million in total assets,
$11.4 million in total liabilities, and a total stockholders'
deficit of $6.32 million.
D. Brooks and Associates CPA's, P.A., in West Palm Beach, Florida,
issued a "going concern" qualification on the consolidated
financial statements for the year ended Dec. 31, 2015, citing that
the Company has incurred operating losses, has incurred negative
cash flows from operations and has a working capital deficit. These
and other factors raise substantial doubt about the Company's
ability to continue as a going concern.
PLATINUM PARTNERS: Judge Freezes Assets Amid Plunder Allegations
----------------------------------------------------------------
Patrick Fitzgerald, writing for The Wall Street Journal Pro
Bankruptcy, reported that a federal judge has frozen some $118
million belonging to Platinum Partners, the hedge-fund manager at
the center of a federal fraud investigation, after a bankruptcy
trustee sued the company.
According to the report, Judge Marvin Isgur of the U.S. Bankruptcy
Court in Houston issued a temporary restraining order barring
transfers from certain bank accounts belonging to Platinum hedge
funds and investment vehicles.
Judge Isgur issued the order at the request of Trustee Richard
Schmidt, who is overseeing the remnants of oil platform operator
Black Elk Energy Offshore Operations LLC, the report related. Mr.
Schmidt sued Platinum for $200 million in U.S. Bankruptcy Court in
Houston, alleging that insiders at Platinum's flagship fund engaged
in a scheme to "plunder" Black Elk by siphoning off the proceeds
from the sale of its prime assets before putting the company into
bankruptcy, the report further related.
Judge Isgur said the lawsuit's allegations reflect a pattern of
"fraud and abuse" by Platinum, the report said.
"If the funds are not frozen, the court finds that the funds are
likely to leave the United States and this Court's practical
ability to control them," Judge Isgur said, the report added.
"This would result in a total loss to the Plaintiff and constitutes
irreparable injury."
The lawsuit claims the scheme was engineered by a group of Platinum
executives, among them Mark Nordlicht, who founded Platinum's
flagship hedge fund, and David Levy, who is a nephew of Murray
Huberfeld, one of Platinum's founders, the report related.
About Platinum Partners Funds
Platinum Partners' Platinum Partners Value Arbitrage Fund L.P.
("Master Fund") was registered with and regulated by the Cayman
Islands Monetary Authority as a master fund. Platinum Partners
Value Arbitrage Fund (International) Ltd. ("International Fund")
was registered with and regulated by CIMA as a mutual fund.
The International Fund offered participating shares to prospective
investors. The International Fund's investment objective was to
achieve superior capital appreciation through its indirect
investment in the Master Fund. The Master Fund is a
multi-strategy
hedge fund.
The Master Fund and International Fund each filed a voluntary
petition under Chapter 15 of the Bankruptcy Code in the U.S.
Bankruptcy Court for the Southern District of New York. The
Chapter 15 petitions were commenced on Oct. 18, 2016, by
Christopher Barnett Kennedy and Matthew James Wright, the duly
appointed joint provisional liquidators of Master Fund (in
Provisional Liquidation) and the duly appointed joint official
liquidators of International Fund (in Official Liquidation).
Both Funds are in liquidation pursuant to the orders of the
Financial Services Division of the Grand Court of the Cayman
Islands (cause nos. FSD 131 of 2016 (AJJ) (Master Fund) and 118 of
2016 (AJJ) (International Fund) pursuant to Sections 92 and 104 of
the Companies Law, of the Cayman Islands (2016 Revision) in
relation to the International Fund and Master Fund, respectively.
Contemporaneously with the Chapter 15 petitions, the Liquidators
filed a motion with the Bankruptcy Court seeking the Bankruptcy
Court's recognition of (i) the Cayman Liquidations as "foreign
main
proceedings" and (ii) their appointment as "foreign
representatives" of the Funds.
As of June 30, 2016, the Master Fund had total assets of
$1,092,668,500. The Master Fund's total debt as of May 31, 2016,
was $382,000,000.
Holland & Knight LLP serves as counsel in the Chapter 15 cases.
About Black Elk
Black Elk Energy Offshore Operations, LLC, is a Houston, Texas
based privately held limited liability company engaged in the
acquisition, exploitation, development and production of oil and
natural gas properties primarily in the shallow waters of the Gulf
of Mexico near the coast of Louisiana and Texas.
Black Elk had total assets of $339.7 million and total debt of
$432.3 million as of Sept. 30, 2014.
Judge Letitia Z. Paul of the U.S. Bankruptcy Court in the Southern
District of Texas placed Black Elk under Chapter 11 bankruptcy
protection on Sept. 1, 2015, converting an involuntary Chapter 7
bankruptcy petition by its creditors. Thereafter, the Company
filed with the Court a voluntary Chapter 11 petition (Bankr. S.D.
Tex. Case No. 15-34287) on Sept. 10, 2015.
Judge Paul later recused herself from the case and the matter was
given to Judge Marvin Isgur, according to information posted on
the
case docket on Sept. 14.
The Debtor is represented by Elizabeth E. Green of Baker &
Hostetler. Blackhill Partners' Jeff Jones is the Debtor's Chief
Restructuring Officer.
POST EAST: May Use Connect REO's Cash Until Dec. 31
---------------------------------------------------
Judge Ann M. Nevins of the U.S. Bankruptcy Court for the District
of Connecticut authorized Post East, LLC to use Connect Reo, LLC's
cash collateral from November 1, 2016 through December 31, 2016.
The Debtor was authorized to use cash collateral of up to $11,558
for November and $11,358 for December, to pay for the expenses
contained in the approved Budget. The expenses contained in the
approved Budget include expenses for water, trash removal,
utilities and repairs and maintenance.
The Debtor was directed to make two monthly adequate protection
payments of $5,500 to Connect REO, for each of the months of
November 2016 and December 2016.
Connect REO was granted secured interests in all post-petition
rents and leases as the same may be generated, subordinate to all
Chapter 11 quarterly fees that will be come due pursuant to 28
U.S.C. Section 1930(a)(6).
A continued hearing on the use of cash collateral is scheduled on
December 21, 2016 at 11:00 a.m.
A full-text copy of the Order, dated October 28, 2016, is available
at http://bankrupt.com/misc/PostEast2016_1650848_63.pdf
About Post East, LLC
Post East, LLC, owns real estate at 740-748 Post Road East,
Westport, Connecticut. The property is commercial real estate
which presently has seven leased spaces. The secured creditor is
Connect REO, LLC, which is owed $1,043,000.
Post East, LLC, filed for Chapter 11 bankruptcy protection (Bankr.
D. Conn. Case No. 16-50848) on June 27, 2016. The petition was
signed by Michael F. Calise, member. The Debtor is represented by
Carl T. Gulliver, Esq., at Coan Lewendon Gulliver & Miltenberger
LLC. The Debtor estimated assets and liabilities at $1 million to
$10 million at the time of the filing.
POSTROCK ENERGY: Trustee Taps Digital Nail to Sell Equipment
------------------------------------------------------------
The Chapter 11 trustee of PostRock Energy Corp. seeks approval from
the U.S. Bankruptcy Court for the Western District of Oklahoma to
hire Digital Nail.
Stephen Moriarty, the court-appointed trustee, tapped the firm in
connection with the sale of the Debtor's computer equipment.
The trustee proposes to pay Digital Nail a commission of 50% of the
net sales price. The computer equipment is estimated to be worth
between $3,500 and $7,500.
Ash Nael, owner of Digital Nail, disclosed in a court filing that
the firm does not have any connection with creditors, which is
adverse to the interest of the Debtor or its bankruptcy estate.
About PostRock Energy Corp.
Headquartered in Oklahoma City, Oklahoma, PostRock Energy
Corporation, PostRock Energy Services Corporation, PostRock
MidContinent Production LLC, PostRock Eastern Production, LLC,
PostRock Holdco, LLC, and STP Newco, Inc. are engaged in the
acquisition, exploration, development, production and gathering of
crude oil and natural gas. Their primary production activity is
focused in the Cherokee Basin, a 15-county region in southeastern
Kansas and northeastern Oklahoma. They have approximately 129
employees.
PostRock Energy, et al., filed Chapter 11 bankruptcy petitions
(Bankr. W.D. Okla. Lead Case No. 16-11230) on April 1, 2016. Clark
Edwards signed the petitions as president. The Debtors estimated
assets in the range of $10 million to $50 million and debt of up to
$100 million.
Crowe & Dunlevy, P.C. serves as the Debtors' counsel. Judge Sarah
A. Hall is assigned to the cases.
Stephen J. Moriarty has been appointed as Chapter 11 Trustee of
PostRock Energy.
The Official Committee of Unsecured Creditors of PostRock Energy
Corp. has retained Lowenstein Sandler LLP as counsel, and Hall,
Estill, Hardwick, Gable, Golden & Nelson, P.C. as special and local
counsel.
POSTROCK ENERGY: Trustee Taps K.E. Andrews to Pursue Refund Claims
------------------------------------------------------------------
The Chapter 11 trustee of PostRock Energy Corp. seeks approval from
the U.S. Bankruptcy Court for the Western District of Oklahoma to
hire K.E. Andrews.
Stephen Moriarty, the court-appointed trustee, tapped the firm to
prepare and pursue sales tax refund claims for 2014 to 2016. K.E.
Andrews will get 25% of any refund paid as compensation for its
services.
John Abernathy, Jr., vice-president of K.E. Andrews, disclosed in a
court filing that the firm does not have any connection with
creditors, which is adverse to the interest of the Debtor or its
bankruptcy estate.
About PostRock Energy Corp.
Headquartered in Oklahoma City, Oklahoma, PostRock Energy
Corporation, PostRock Energy Services Corporation, PostRock
MidContinent Production LLC, PostRock Eastern Production, LLC,
PostRock Holdco, LLC, and STP Newco, Inc. are engaged in the
acquisition, exploration, development, production and gathering of
crude oil and natural gas. The Debtors' primary production activity
is focused in the Cherokee Basin, a 15-county region in
southeastern Kansas and northeastern Oklahoma. The Debtors have
approximately 129 employees.
PostRock Energy, et al., filed Chapter 11 bankruptcy petitions
(Bankr. W.D. Okla. Lead Case No. 16-11230) on April 1, 2016. Clark
Edwards signed the petitions as president. The Debtors estimated
assets in the range of $10 million to $50 million and debt of up to
$100 million.
Crowe & Dunlevy, P.C. serves as the Debtors' counsel.
Judge Sarah A. Hall is assigned to the cases.
Stephen J. Moriarty has been appointed as Chapter 11 Trustee of
PostRock Energy.
The Official Committee of Unsecured Creditors of PostRock Energy
Corp. has retained Lowenstein Sandler LLP as counsel, and Hall,
Estill, Hardwick, Gable, Golden & Nelson, P.C. as special and local
counsel.
PRECISION DRILLING: Moody's Rates New $350MM Unsecured Notes B3
---------------------------------------------------------------
Moody's Investors Service assigned a B3 rating to Precision
Drilling Corporation's proposed US$350 million senior unsecured
notes. The majority of the proceeds will be used to tender for
Precision's 2019, 2020 and 2021 senior unsecured notes.
Precision's B2 Corporate Family Rating (CFR), B2-PD Probability of
Default Rating, Speculative-Grade Liquidity Rating of SGL-2, and B3
ratings on the existing senior unsecured notes are unchanged. The
outlook remains negative.
Assignments:
Issuer: Precision Drilling Corporation
Senior Unsecured Regular Bond/Debenture, Assigned B3(LGD4)
RATINGS RATIONALE
Precision's B2 Corporate Family Rating (CFR) reflects expected high
leverage and weak coverage in 2017 resulting from low North
American land drilling rig utilization severely pressuring spot
market margins, together with a rolling off of expiring high margin
contracts. Moody's expects little recovery in EBITDA in 2017 from
a Moody's expected low 2016 level, which will keep debt to EBITDA
above 7x in 2017 and EBITDA to interest around 2x. While Precision
has a solid market position in Canada, with all of its fleet
consisting of high quality Tier 1 rigs and a broad geographic
footprint in the major North American land drilling markets,
neither has protected the company from the downturn. In 2017,
Moody's expects Precision will have less than 20% of its fleet
under contract, which will help to slightly mute the impact of the
downturn, as will its exposure to international land drilling
markets. Moody's expects Precision to generate positive free cash
flow in 2017 as the Kuwaiti new build program ceases and the
company spends only maintenance and upgrade capex.
Precision's SGL-2 liquidity rating reflects good liquidity through
2017. Pro forma for the tender offer and as of Sept. 30, 2016,
Precision will have around C$225 million of cash and an undrawn
US$550 million secured revolving credit facility (but for US$41
million in LCs), due June 2019. Moody's expects around C$50
million of positive free cash flow through the fifteen months to
Dec. 31, 2017. Moody's expects Precision will be in compliance
with its senior debt leverage (less than 2.5x) and interest
coverage covenant (above 1.5x) through this period. Alternative
sources of liquidity are limited principally to the sale of
Precision's existing drilling rigs and completion and well service
rigs, which are largely encumbered.
In accordance with Moody's Loss Given Default (LGD) Methodology,
the senior unsecured notes are rated B3, one notch below the CFR,
reflecting the priority ranking of the US$550 million revolving
credit facility in the capital structure.
The negative outlook reflects Moody's expectation that EBITDA will
remain weak in 2017 keeping debt to EBITDA above 7x and EBITDA to
interest around 2x.
The rating could be downgraded if leverage increases above 8x and
liquidity deteriorates.
The rating could be upgraded if leverage approaches 5x.
Precision is a Calgary, Alberta-based corporation engaged in
onshore drilling and providing well completion and production
services to upstream oil and gas companies in North America.
The principal methodology used in this rating was Global Oilfield
Services Industry Rating Methodology published in December 2014.
PRECISION DRILLING: S&P Assigns 'BB' Rating on $350MM Unsec. Notes
------------------------------------------------------------------
S&P Global Ratings said it assigned its 'BB' issue-level rating and
'4' recovery rating to Precision Drilling Corp.'s proposed US$350
million senior unsecured notes maturing in 2023. A '4' recovery
rating indicates S&P's expectation of average (30%-50%; in the
lower half of the range) recovery in a default scenario.
"We expect proceeds from the bond issue will refinance existing
outstanding debt, so the proposed debt issue should be neutral to
the company's current capital structure," said S&P Global Ratings
credit analyst Michelle Dathorne.
Precision's fully adjusted cash flow metrics have deteriorated in
2015 and 2016, due to both the dramatic decrease in projected
revenues and cash flow and the Canadian dollar's depreciation,
because the company's rated debt is in U.S. dollars. Under S&P's
base-case scenario, it expects Precision's financial risk profile
should remain consistent with S&P's aggressive assessment. S&P
estimates the company's three-year (2016-2018), weighted-average
funds from operations-to-debt in the 12%-15% range, and free
operating cash flow-to-debt in the 7%-10% range. The negative
outlook reflects the potential for a downgrade to 'BB-' if the
company's near-term performance underperforms the assumptions
underpinning S&P's current 2016-2018 base case scenario.
Nevertheless, the 'BB' long-term corporate credit rating on
Precision reflects the company's strong market position in Canada,
diversified operations in the U.S., expanding international
footprint, ability to temper EBITDA margin deterioration during the
current cyclical downturn through effective cost-management, and
ability to curtail costs, limiting balance-sheet debt increases to
the effects of the depreciated Canadian dollar. The continued
deterioration of the company's cash flow and leverage metrics
offsets this somewhat.
RATINGS LIST
Precision Drilling Corp.
Corporate credit rating BB/Negative/--
Rating Assigned
US$350 mil. sr unsec nts due 2023 BB
Recovery rating 4L
PRO RESOURCES I: Seeks to Hire Cavazos Hendricks as Legal Counsel
-----------------------------------------------------------------
Pro Resources I, LLC seeks approval from the U.S. Bankruptcy Court
for the Northern District of Texas to hire legal counsel in
connection with its Chapter 11 case.
The Debtor proposes to hire Cavazos, Hendricks, Poirot & Smitham,
P.C. to give legal advice regarding the administration of its
bankruptcy estate, assist the Debtor in the preparation of a plan
of reorganization, and provide other legal services.
The firm's hourly rates range from $230 to $500 for attorneys and
$100 to $135 for paraprofessionals.
Charles Hendricks, Esq., disclosed in a court filing that he and
his firm have no connections with the Debtor or any of its
creditors.
The firm can be reached through:
Charles Brackett Hendricks, Esq.
Jordan Montgomery Lewis, Esq.
Majeedah Murad, Esq.
Cavazos, Hendricks, Poirot & Smitham, P.C.
900 Jackson St., Suite 570
Dallas, TX 75202
Tel: (214) 573-7302
Fax: (214) 573-7399
Email: chuckh@chfirm.com
About Pro Resources I, LLC.
Pro Resources I, LLC, filed a chapter 11 petition (Bankr. N.D. Tex.
Case No. 16-44041) on Oct. 20, 2016. The petition was signed by
Doug Owens, sole member. The case is assigned to Judge Mark X.
Mullin. The Debtor disclosed total assets at $2.5 million and
total liabilities at $1.8 million as of Sept. 30, 2016.
QUOTIENT LIMITED: Reports Q2 Fiscal 2017 Financial Results
----------------------------------------------------------
Quotient Limited reported a net loss of $17.35 million on $6.14
million of total revenue for the quarter ended Sept. 30, 2016,
compared to a net loss of $4.43 million on $4.27 million of total
revenue for the quarter ended Sept. 30, 2015.
For the six months ended Sept. 30, 2016, the Company reported a net
loss of $33.59 million on $11.86 million of total revenues compared
to a net loss of $14.58 million on $9.12 million of total revenue
for the six months ended Sept. 30, 2015.
Quotient ended 2QFY17 with $19 million in cash and cash equivalents
and $29.4 million of term debt. On Oct. 14, 2016, Quotient
completed a private placement of up to $120 million of 12% Senior
Secured Notes due 2023. Quotient issued $84 million of notes at
the initial closing, receiving net proceeds of approximately $79
million after expenses, and repaid all outstanding obligations
under its existing loan agreement with MidCap Financial Trust,
which amounted to $33.5 million including fees and expenses. So
long as there is no event of default, Quotient will issue an
additional $36 million aggregate principal amount of notes to note
purchasers upon public announcement of successful field trial
results for the MosaiQ IH Microarray that demonstrates greater than
99% concordance for the detection of blood group antigens and
greater than 95% concordance for the detection of blood group
antibodies when compared to predicate technologies for a
pre-defined set of blood group antigens and antibodies.
Product sales in the third quarter of fiscal 2017 are expected to
be within the range of $4.3 to $4.8 million, compared with $4.4
million for the third quarter of fiscal 2016.
Quarterly product sales can fluctuate depending upon the shipment
cycles for red blood cell based products, which account for
approximately two-thirds of current product sales. These products
typically experience 13 shipment cycles per year, equating to three
shipments of each product per quarter, except for one quarter per
year when four shipments occur. The timing of shipment of bulk
antisera products to OEM customers may also move revenues from
quarter to quarter. Some seasonality in demand is also experienced
around holiday periods in both Europe and the United States. As a
result of these factors, Quotient expects to continue to see
seasonality and quarter-to-quarter variations in product sales.
The timing of product development fees included in other revenues
is mostly dependent upon the achievement of pre-negotiated project
milestones.
As of Sept. 30, 2016, the Company had $101.86 million in total
assets, $74.43 million in total liabilities and $27.43 million in
total shareholders' equity.
Progress on the Commercial Scale-up of MosaiQ
Quotient also reported further progress on the commercial scale-up
of MosaiQ and financial results for its fiscal second quarter and
six months ended Sept. 30, 2016.
"Strong progress continues to be made advancing MosaiQ towards
commercial launch, both in terms of MosaiQ Microarray manufacturing
and completion of the final MosaiQ instrument," said Paul Cowan,
chairman and chief executive officer of Quotient. "Customer
feedback regarding MosaiQ continues to be extremely positive,
following yet another successful showing at the AABB Annual Meeting
in late October. While we have experienced a delay in completing
planned internal validation studies for MosaiQ, the prospects for
its successful commercialization remain unchanged."
MosaiQ, Quotient's next-generation automation platform for blood
grouping and disease screening, represents a transformative and
highly disruptive testing platform for transfusion diagnostics,
with an established capability to detect antibodies, antigens and
nucleic acid (DNA or RNA). Through MosaiQ, Quotient aims to
deliver substantial value to donor testing laboratories worldwide
with a unified instrument platform to be utilized for blood
grouping and both serological and molecular disease screening of
donated red blood cells and plasma.
Quotient showcased a working MosaiQ instrument at the 2016 Annual
Meeting of the American Association of Blood Banks (AABB) held in
Orlando, Florida on October 22-25. Over 75 delegates from more
than 40 donor collection agencies and hospitals, mainly located in
the United States, viewed the instrument and received a progress
update on the advancement of the MosiaQ platform.
Considerable progress continues to be made on the commercial
scale-up of MosaiQ, with MosaiQ IH Microarrays for blood grouping
now being manufactured routinely at Quotient's Eysins, Switzerland
facility. In parallel, internal validation and verification of the
MosaiQ instrument has also progressed meaningfully and is nearing
completion. The initial MosaiQ SDS Microarray (serological disease
screen for the detection of CMV and Syphilis) is in the process of
being finalized and ongoing development efforts are focused on
completing the full serological disease screening menu.
Quotient continues to work on completing its initial internal
validation studies for the MosaiQ IH Microarray, which it had
planned to present at AABB. Completion of these studies was
delayed after Quotient identified inconsistencies in the results of
early testing. Quotient is currently conducting a comprehensive
root-cause investigation to identify the reasons for the unexpected
variability. The internal validation studies will recommence
following completion of this investigation and correction of any
issues identified.
Completion of European field trials and the commercial launch of
MosaiQ in Europe are currently planned for the first half of 2017.
Field trials in the United States will commence after the
completion of European field trials. Once licensed for sale,
MosaiQ will be the first fully-automated solution for blood
grouping, providing for the comprehensive characterization of both
donor and patient blood. Quotient intends to simultaneously launch
its MosaiQ IH Microarray into the donor and patient testing markets
with its commercial partner, Ortho-Clinical Diagnostics. Launch of
the initial MosaiQ SDS Microarray into the donor testing market
will coincide with the launch of the MosaiQ IH Microarray. Launch
of the full MosaiQ serological disease screening panel is currently
planned to commence three to six months after the initial MosaiQ
launch.
Conventional Reagent Business Update
"During the second quarter, strong revenue growth was generated by
all key categories of our conventional reagent business, as product
sales grew 13% year-over-year," said Paul Cowan. "Our U.S. direct
business had another exceptional quarter, with product sales
growing 29% year-over-year, driven by the impact of recent product
launches, new customers for our reagent red blood cell products and
better pricing."
A full-text copy of the press release is available for free at:
https://is.gd/VZ84Gb
About Quotient Limited
Quotient is a commercial-stage diagnostics company committed to
reducing healthcare costs and improving patient care through the
provision of innovative tests within established markets. With
an initial focus on blood grouping and serological disease
screening, Quotient is developing its proprietary MosaiQ
technology platform to offer a breadth of tests that is unmatched
by existing commercially available transfusion diagnostic
instrument platforms. The Company's operations are based in
Edinburgh, Scotland; Eysins, Switzerland and Newtown,
Pennsylvania.
Quotient Limited reported a net loss of US$33.87 million for the
year ended March 31, 2016, a net loss of US$59.05 million for
the yera ended March 31, 2015, and a net loss of US$10.16 million
for the year ended March 31, 2014.
Ernst & Young LLP, in Belfast, United Kingdom, issued a "going
concern" qualification on the consolidated financial statements
for the year ended March 31, 2016, citing that the Company has
recurring losses from operations and planned expenditure
exceeding available funding that raise substantial doubt about
its ability to continue as a going concern.
QUOTIENT LIMITED: Stockholders Elect Eight Directors
----------------------------------------------------
The annual meeting of shareholders of Quotient Limited was held on
Oct. 28, 2016, at which 26,016,817 of Quotient Limited's ordinary
shares were represented in person or by proxy, representing
approximately 88% of Quotient Limited's issued and outstanding
ordinary shares entitled to vote. At the Annual Meeting,
resolutions were passed for the re-election of eight directors of
Quotient Limited, namely:
(1) Paul Cowan;
(2) Thomas Bologna;
(3) Frederick Hallsworth;
(4) Brian McDonough;
(5) Sarah O'Connor;
(6) Heino von Prondzynski;
(7) Zubeen Shroff; and
(8) John Wilkerson.
The stockholders approved the Amended and Restated 2014 Plan, which
reflected amendments to the 2014 Plan to increase by 750,000 both
the number of shares authorized for issuance and the maximum number
of shares that may be issued upon the exercise of incentive stock
options and re-appointed of Ernst & Young LLP as auditors from the
conclusion of the Annual Meeting until the next annual shareholder
meeting to be held in 2017 and to authorize the directors to
determine the fees to be paid to the auditors.
About Quotient Limited
Quotient is a commercial-stage diagnostics company committed to
reducing healthcare costs and improving patient care through the
provision of innovative tests within established markets. With
an initial focus on blood grouping and serological disease
screening, Quotient is developing its proprietary MosaiQ
technology platform to offer a breadth of tests that is unmatched
by existing commercially available transfusion diagnostic
instrument platforms. The Company's operations are based in
Edinburgh, Scotland; Eysins, Switzerland and Newtown,
Pennsylvania.
As of June 30, 2016, US$102.08 million in total assets, US$74.22
million in total liabilities and US$27.85 million in total
shareholders' equity.
Quotient Limited reported a net loss of US$33.87 million for the
year ended March 31, 2016, a net loss of US$59.05 million for
the yera ended March 31, 2015, and a net loss of US$10.16 million
for the year ended March 31, 2014.
Ernst & Young LLP, in Belfast, United Kingdom, issued a "going
concern" qualification on the consolidated financial statements
for the year ended March 31, 2016, citing that the Company has
recurring losses from operations and planned expenditure
exceeding available funding that raise substantial doubt about
its ability to continue as a going concern.
RADIAL HOLDINGS: Moody's Affirms B3 CFR & Changes Outlook to Neg.
-----------------------------------------------------------------
Moody's Investors Service affirmed Radial Holdings, L.P.'s B3
Corporate Family Rating, B3-PD Probability of Default Rating and
the B2 and Caa2 ratings, respectively, of its first and second lien
credit facilities, and changed Radial's ratings outlook to negative
from stable.
RATINGS RATIONALE
The negative outlook reflects Moody's expectation that Radial's
revenue and cash flow from operations will decline over the next 12
to 18 months and its free cash flow will be negative in 2017,
significantly below Moody's previous forecast of free cash flow of
10% to 15% of total debt in 2017. Radial's revenues could decline
by about mid-single digit percentages in 2017, largely due to the
accelerated run-off of revenues from the Webstore business, which
the company is exiting, and loss of revenues from a few customers
that filed for bankruptcy protection. The resulting meaningful
decline in EBITDA will cause Radial's total debt to EBITDA ratio
(Moody's adjusted) to increase to near mid 5x by year-end 2017.
Radial's elevated leverage and cash burn in 2017 will reduce the
company's financial flexibility until it generates sustained EBITDA
growth. Elevated leverage will limit Radial's access to its
revolving line of credit when the net secured leverage covenant
steps down in the third quarter of 2017, but Moody's expects Radial
to maintain adequate liquidity from its cash and cash flow from
operations.
The B3 Corporate Family Rating (CFR) reflects Radial's weak
financial profile over the next 12 to 18 months and the challenges
in generating sustained revenue growth as a standalone company. The
company's strategy to increase revenue growth through greater
penetration of small and medium-size retail customers will take
some time to reflect in the operating performance, which is heavily
dependent on the seasonally strong fourth quarter. The company has
also made progress in integrating the operations of Innotrac and
its transition to a standalone entity after its spin-off from eBay
is largely complete. Although Radial's revenues are expected to
decline in the next 12 to 18 months, the rating is supported by
Moody's expectation that Radial's revenue from its core services
comprising logistics, payments and omni-channel operations should
grow modestly over the next 12 to 18 months. Radial's services
enable eCommerce operations of its customers and the strong growth
in eCommerce creates a favorable demand environment. However,
Radial's industry is highly competitive and Moody's expects
continued pricing pressure in its services. Radial's credit profile
benefits from its large scale and geographic footprint relative to
other third-party fulfillment services providers and a high
proportion of revenues that are expected under existing contacts.
Moody's could downgrade Radial's ratings if free cash flow deficits
are larger than currently expected or liquidity becomes weak.
Given the negative outlook, Moody's does not expect to upgrade the
ratings in the intermediate term. The ratings could be upgraded
over time if Moody's believes that Radial can generate sustained
earnings growth, leverage declines to below 4x and free cash flow
increases to over 10% of total debt on a sustained basis.
Moody's affirmed these rating actions:
Issuer: Radial Holdings, L.P.
Corporate Family Rating, B3
Probability of Default Rating, B3-PD
1st lien revolving credit facility, B2 (LGD3)
1st lien term loan facility, B2 (LGD3)
2nd lien term loan facility, Caa2 (LGD5)
Outlook: Changed to Negative, from Stable
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
Radial provides omnichannel commerce and technology services to
retail customers.
REGIS GALERIE: Seeks to Hire Arnstein & Lehr as Legal Counsel
-------------------------------------------------------------
Regis Galerie Inc. seeks approval from the U.S. Bankruptcy Court
for the District of Nevada to hire legal counsel in connection with
its Chapter 11 case.
The Debtor proposes to hire Arnstein & Lehr LLP to give legal
advice regarding its duties under the Bankruptcy Code, negotiate
with creditors, pursue confirmation of a bankruptcy plan, and
provide other legal services.
The attorneys expected to represent the Debtor and their hourly
rates, which have been discounted between 10% and 20%, are:
Michael L. Gesas $600
David A. Golin $493
Kevin H. Morse $350
Meanwhile, the hourly rate charged by the firm's paralegals range
from $190 to $250.
Michael Gesas, Esq., disclosed in a court filing that his firm does
not hold or represent any interest adverse to that of the Debtor's
bankruptcy estate or its creditors.
The firm can be reached through:
Michael L. Gesas, Esq.
David A. Golin, Esq.
Kevin H. Morse, Esq.
Arnstein & Lehr LLP
120 S. Riverside Plaza, Suite 1200
Chicago, IL 60606
Tel: 312-876-7100
Fax: 312-876-0288
Email: mlgesas@arnstein.com
Email: dagolin@arnstein.com
Email: khmorse@arnstein.com
About Regis Galerie
Regis Galerie, Inc., filed a chapter 11 petition (Bankr. D. Nev.
Case No. 16-14899) on Sept. 5, 2016. The petition was signed by
Samuel Dweck, president. The case is assigned to Judge Laurel E.
Davis. The Debtor estimated assets and liabilities at $1 million
to $10 million at the time of the filing.
REGIS GALERIE: Seeks to Hire Marquis Aurbach as Local Counsel
-------------------------------------------------------------
Regis Galerie Inc. seeks approval from the U.S. Bankruptcy Court
for the District of Nevada to hire Marquis Aurbach Coffing.
The firm will serve as the Debtor's local counsel and will assist
Arnstein & Lehr LLP, the lead counsel, in representing the Debtor
in its bankruptcy case.
Bryan Viellion, Esq., the attorney designated to provide the
services, will be paid an hourly rate of $210.
The hourly rates of other attorneys who may render legal services
range from $210 to $500. Meanwhile, the firm's paralegals are paid
between $115 and $175 per hour.
In a court filing, Mr. Viellion that his firm is a "disinterested
person" as defined in section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Bryan M. Viellion, Esq.
Marquis Aurbach Coffing
10001 Park Run Drive
Las Vegas, NV 89145
Tel: (702) 382-0711
Fax: (702) 382-5816
Email: bviellion@maclaw.com
About Regis Galerie
Regis Galerie, Inc., filed a chapter 11 petition (Bankr. D. Nev.
Case No. 16-14899) on Sept. 5, 2016. The petition was signed by
Samuel Dweck, president. The case is assigned to Judge Laurel E.
Davis. The Debtor estimated assets and liabilities at $1 million
to $10 million at the time of the filing.
RICHARD SCHRAGGER: Selling New York Property to Liu for $775,000
----------------------------------------------------------------
Judge Carla E. Craig of the U.S. Bankruptcy Court for the Eastern
District of New York will convene a hearing on Nov. 16, 2016 at
3:30 p.m. (PET), to consider Richard Schragger's sale of real
property located at 100 West 39th Street, New York, New York to
Zova Liu for $775,000.
Objection deadline is Nov. 9, 2016 at 5:00 p.m.
The Debtor is an individual who owns the real property. Ocwen holds
the duly perfected, first priority secured loan in the amount of
$390,611.
On July 6, 2016, after arm's-length negotiations, the Debtor and
the Purchaser executed the Contract of Sale - Condominium
Apartment. Subject to the Court's approval, the Debtor seeks
approval to sell the real property to the Purchaser on the
following terms and conditions:
a. Seller: Richard Schragger
b. Purchaser: Zova Liu
c. Purchase Price: $775,000
d. Down payment: $77,500.00
e. Balance to be paid at closing: $697,500
f. The Monthly Common Charge: $831
g. Purchased Property: 100 West 39th Street, #37A, New
York, New York
h. Closing Date: The closing date shall take place at a
time and place mutually agreeable to the Seller and the Purchaser.
A copy of the Contract of Sale attached to the Motion is available
for free at:
http://bankrupt.com/misc/Richard_Schragger_17_Sales.pdf
The Debtor seeks authority to conduct the sale free and clear of
all liens with the liens to attach to the proceeds of sale (i.e.,
gross proceeds, less expenses). The Purchaser's offer of $775,000
for the Debtor's real property after payment of the first mortgage
will lease approximately $384,388 upon which will be held in
escrow subject to further Court order.
The Debtor also requests that the Court, in its discretion, waive
the 14-day stay imposed by Rule 6004(h).
Zova Liu is represented by:
Andrew Luftig, Esq.
CHAVES & PERLOWITZ LLP
111 John Street, Suite 312
Nevv York, NY 10038
Telephone: (212) 791-5993
Facsimile: (646) 430-8459
Counsel for Debtor:
Lawrence Morrison, Esq.
MORRISON TENENBAUM PLLC
87 Walker Street, Floor 2
New York, NY 10013
Telephone: 212-620-0938
Facsimile: 646-390-5095
E-mail: lfmlawyer@gmail.com
Richard Schragger sought Chapter 11 protection (Bankr. E.D.N.Y.
Case No. 16-44532) on Oct. 6, 2016.
ROCKY MOUNTAIN ACADEMY: S&P Lowers 2010 School Bonds Rating to BB+
------------------------------------------------------------------
S&P Global Ratings lowered its underlying rating to 'BB+' from
'BBB-'on the Colorado Educational and Cultural Facilities
Authority's series 2010 charter school refunding and improvement
revenue bonds issued for the Rocky Mountain Academy of Evergreen
(RMAE). At the same time, S&P placed the bonds on CreditWatch with
negative implications.
"The rating action reflects our view of significant board and
executive director turnover in the last month and a substantial
decline in enrollment in fall 2016," said S&P Global Ratings credit
analyst Debra Boyd. "The CreditWatch action reflects our view of
enterprise instability and the potential for increased operational
pressure when the revised fiscal 2017 budget is adopted, which
should occur within the three-month outlook period," Ms. Boyd
added.
ROJESIE INC: Proposes Justiniano Law Offices as Counsel
-------------------------------------------------------
Rojesie, Inc., asks the Bankruptcy Court for authorization to
employ Gloria Justiniano Irizarry, Esq., from Justiniano Law
Offices, as counsel.
The Debtor requires the assistance of counsel so as to enable it to
perform properly its duties as debtor-in-possession. Specifically,
the retention of counsel is necessary in connection with, but not
limited to the following matters:
a) The examination of documents of the Debtor and other
necessary information to submit schedules and Statement of
Financial Affairs;
b) The preparation of the Disclosure Statement, Plan of
Reorganization, records and reports as required by the Bankruptcy
Code and the Federal Rules of Bankruptcy Procedure.
c) The preparation of applications and proposed orders to be
submitted to the Court;
d) The identification and prosecution of claims and causes of
action assert able by the debtor-in-possession on behalf of the
estate;
e) The examination of proof of claims filed and to be filed in
the case and the possible objections to certain of such claims;
f) Advising the debtor-in-possession and preparing documents in
connection with the ongoing operation of Debtor's business;
g) Advising the debtor-in-possession and preparing documents in
connection with the liquidation of the assets of the estate, if
needed, including analysis and collection of outstanding
receivables; and
h) Assisting and advising the debtor-in-possession in the
discharge of any and all the duties imposed by the applicable
dispositions of the Bankruptcy Code and the Federal Rules of
Bankruptcy Procedure.
The proposed law firm has agreed with Debtor to be compensated on
an hourly rate of $250, plus $125 for associates, and $50 for
paralegals, and the reimbursement of expenses incurred in the
litigation of the Chapter 11 case.
The attorney received from the Debtor a retainer of $5,000 for
services to be rendered in connection with the litigation of all
related matters from its business income.
Gloria Justiniano Irizarry, Esq., assures the Court that his firm
has no connections with the creditors, any other party in interest,
their respective attorneys and accountants, the United States
Trustee or any person employed in the office of the United States
Trustee.
The attorney can be reached at:
Gloria Justiniano Irizarry, Esq.
JUSTINIANO LAW OFFICES
Ensanche Martinez, Calle A. Ramirez Silva # 8
Mayaguez, PR 00680-4714
Tel: (787) 222-9272 & 805-2945
E-mail: Justinianolaw@gmail.com
Adjuntas, P.R.-based Rojesie, Inc., d/b/a Parador Villas Sotomayor,
filed for Chapter 11 bankruptcy protection (Bankr. D.P.R. Case No.
16-08296) on Oct. 17, 2016, estimating assets and liabilities
between $1 million and $10 million. The petition was signed by
Jesus R. Ramos Puente, president. Judge Edward A. Godoy presides
over the case.
ROJO ONE: Seeks Court Authorization to Use Cash Collateral
----------------------------------------------------------
Rojo One, LLC and its affiliated debtors ask the U.S. Bankruptcy
Court for the Eastern District of Michigan for authorization to use
cash collateral.
The Debtors are indebted to these secured creditors:
Rojo One, LLC:
(1) First State Bank
(2) Rewards Network Establishment Services
(3) Michigan Unemployment Insurance Agency
(4) Red River Ridge LLC
(5) Dorset Capital
(6) Michigan Department of Treasury
(7) Internal Revenue Service
(8) L & O Finance, LLC
(9) CT Corporation System
Rojo Two, LLC:
(1) First State Bank
(2) Rewards Network Establishment Services, Inc.
(3) Red River Ridge LLC
(4) Dorset Capital
(5) Internal Revenue Service
(6) Sysco Detroit, LLC
Rojo Four, LLC:
(1) Dorset Capital
Rojo Five, LLC:
(1) Essco of Birmingham
(2) Carmel Capital
(3) Rewards Network Establishment Services, Inc.
(4) Sysco Detroit, LLC
(5) Michigan Department of Treasury
(6) Internal Revenue Service
(7) L & O Finance, LLC
Rojo Six, LLC:
(1) First State Bank
(2) Rewards Network Establishment Services, Inc.
(3) L & O Finance, LLC
(4) Luna Properties Novi, LLC
(5) Corporation Service Company
(6) Sysco Detroit, LLC
The Debtors relate that they intend to use the cash collateral to
fund debt service and related payments to the Secured Creditors, to
pay ordinary and necessary costs and expenses of operating the
Debtors' business and preserving the value of the Secured
Creditors' collateral and operating the Debtors' collateral in the
amounts set forth in the proposed Budget. The Debtors further
relate that they will also use the cash collateral to pay costs of
the Debtors' professionals, as may be approved by the Court. The
Debtors add that they will file and serve a final budget prior to
the final hearing.
The Debtors' proposed Budget covers the months of November 2016 to
April 2017. The Budget provides for total operating costs in the
amount of:
$314,195 for Rojo One, LLC;
$278,919 for Rojo Two, LLC;
$203,260 for Rojo Four, LLC;
$495,580 for Rojo Five, LLC; and
$376,359 for Rojo Six, LLC.
The Debtors propose to grant the Secured Creditors with replacement
liens and security interests on all further accounts receivable,
cash and deposit accounts in the same priority, validity and extent
that the Debtors' interest in the cash collateral existed as of the
Petition Date.
A full-text copy of the Debtor's Motion, dated October 28, 2016, is
available at
http://bankrupt.com/misc/RojoOne2016_1654348mlo_22.pdf
About Rojo One, LLC.
Rojo One, LLC, Rojo Two, LLC, Rojo Four, LLC, Rojo Five, LLC and
Rojo Six, LLC filed chapter 11 petitions (Bankr. E.D. Mich. Case
Nos. 16-54348, 16-54349, 16-54350, 16-54352, and 16-54353,
respectively) on October 20, 2016. The petitions were signed by
Daniel R. Linnen, sole member. The Debtors are represented by
Aaron J. Scheinfield, Esq., at Goldstein Bershad & Fried PC.
Rojo One and Rojo Six's cases are assigned to Judge Maria L.
Oxholm. Rojo Two's case is assigned to Judge Thomas J. Tucker.
Rojo Four's case is assigned to Judge Marci B. McIvor, and Rojo
Five's case is assigned to Judge Mark A. Randon.
The Debtors each estimated assets at $0 to $50,000. All the
Debtors, except for Rojo Five, estimated liabilities at $500,000 to
$1 million. Rojo Five estimated its liabilities at $1 million to
$10 million.
SAILING EMPORIUM: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: The Sailing Emporium, Inc.
P. O. Box 597
Rock Hall, MD 21661
Case No.: 16-24498
Chapter 11 Petition Date: November 1, 2016
Court: United States Bankruptcy Court
District of Maryland (Baltimore)
Judge: Hon. Thomas J. Catliota
Debtor's Counsel: Lisa Yonka Stevens, Esq.
YUMKAS, VIDMAR, SWEENEY & MULRENIN, LLC
10211 Wincopin Circle, Suite 500
Columbia, MD 21044
Tel: 443-569-0795
Fax: 410-571-2798
E-mail: lstevens@yvslaw.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by William Arthur Willis, president.
A copy of the Debtor's list of 20 largest unsecured creditors is
available for free at http://bankrupt.com/misc/mdb16-24498.pdf
SBM DEEP: DBRS Confirms BB(high) Rating on 2021 3.5% Secured Notes
------------------------------------------------------------------
DBRS Limited changed the trend on the 3.50% Senior Secured Notes
due 2021 (the Notes) issued by SBM Deep Panuke S.A. (the Issuer) to
Stable from Negative and confirms the rating of BB (high).
The trend change follows DBRS’s trend change of Encana
Corporation’s (Encana) Issuer Rating to Stable from Negative on
October 7, 2016. Encana is the lessee of the Deep Panuke Production
Facility (the Platform) under a Charter Agreement that extends
beyond the full amortization period of the Notes, which will be
fully amortized by December 2021.
Under the Charter Agreement, Encana is responsible for paying a
fixed lease rate to the Issuer for use of the Platform. If Encana
elects to terminate the Charter Agreement, it must pay a
Termination Fee, which, together with the proceeds of the debt
service reserve account and other cash balances of the Issuer,
would be sufficient to fully repay the Notes. The rating on the
Notes is therefore strongly influenced by Encana’s ratings.
RATINGS
Issuer Debt Rated Rating Action Rating
------ ---------- ------------- ------
SBM Deep Panuke 3.50% Senior Trend Change BB(high)
S.A. Secured Notes
due 2021
SERVICEMASTER CO: S&P Assigns 'BB-' Rating on $1BB Sr. Unsec. Notes
-------------------------------------------------------------------
S&P Global Ratings assigned its 'BB-' issue-level rating to The
ServiceMaster Co. LLC's proposed $1 billion senior unsecured notes
due 2024. The recovery rating is '4', indicating S&P's expectation
of average (30%-50%, on the upper end of the range) recovery in the
event of a payment default. The company (a wholly owned subsidiary
of The ServiceMaster Global Holdings Inc.) intends to use the net
proceeds from this issuance and the previously announced $1.5
billion of first-lien term loan due in 2023 primarily to refinance
its $2.4 billion term loan B due 2021.
All of S&P's other ratings on the company, including its 'BB-'
corporate credit rating, are unchanged. S&P will withdraw its
ratings on the company's existing first-lien credit facility
following termination. The outlook remains negative. Reported
debt outstanding pro forma for the proposed transactions is about
$3 billion.
The proposed transactions will increase ServiceMaster's adjusted
debt-to-EBITDA ratio to 4.9x from 4.6x. S&P expects the company
will maintain debt leverage below 5x over the next 12 to 24 month
from steady profit growth in its American Home Shield (AHS) segment
and Terminix/pest control businesses.
S&P's business risk assessment on ServiceMaster reflects the
company's leading 22% market share in the relatively stable
Terminix business, which provides termite/pest control services, as
well as their exposure to economic cycles via the AHS segment
(which provides home warranty plans). AHS is impacted by housing
prices and household discretionary income levels; in lean times,
consumers may choose to pay for repairs instead of purchasing
warranties. Still, S&P believes the AHS segment is currently
benefiting from the housing market recovery and higher
discretionary income levels.
RATINGS LIST
The ServiceMaster Co. LLC
Corporate credit rating BB-/Negative/--
Ratings Assigned
The ServiceMaster Co. LLC
Senior unsecured
$1 billion notes BB-
Recovery rating 4H
SERVICEMASTER COMPANY: Moody's Rates New Unsec. Notes Due 2024 'B1'
-------------------------------------------------------------------
Moody's Investors Service rated The ServiceMaster Company, LLC's
proposed senior unsecured notes due 2024 at B1.
The net proceeds of the proposed notes and a proposed senior
secured term loan due 2023 will be used to repay ServiceMaster's
existing senior secured term loan B due 2021 and add cash to the
balance sheet.
Assignments:
Issuer: ServiceMaster Company, LLC (The)
Senior Unsecured Regular Bond/Debenture (Local Currency),
Assigned B1 (LGD4)
RATINGS RATIONALE
The Ba3 Corporate Family rating reflects ServiceMaster's moderately
high debt to EBITDA which is expected to remain above 4 times.
ServiceMaster has solid market positions and scale in two business
segments (pest control and home warranty policies). Customer
retention rates of around 80% make revenues predictable. Revenues
at the Terminix division are somewhat seasonal. Disciplined cost
management, new products at Terminix, new contract sales at
American Home Shield ("AHS") and a history of steady price
increases lead Moody's to anticipate steady 5% revenue growth.
Stable and solid profitability and free cash flow, with EBITA
margins above 20% and at least $300 million of free cash flow
anticipated, could expand as non-recurring expenses associated with
legal settlements by Terminix in the U.S. Virgin Islands do not
recur and if currently high spending on infrastructure and
information technology investments abates.
Moody's expects ServiceMaster will use free cash flow to repurchase
its shares, complete acquisitions of regional pest control and home
warranty companies and make investments in new technology to
improve efficiency, but not to repay debt in excess of
contractually required minimum levels. Liquidity from at least
$200 million of available cash, at least $250 million available
under the company's $300 million revolving credit facility and
anticipated free cash flow is considered very good.
All financial metrics cited reflect Moody's standard analytical
adjustments.
The B1 (LGD4) rating on the proposed senior secured notes reflects
the Ba3-PD Probability of Default rating and their priority in
Moody's waterfall of claims at default behind the senior secured
obligations and ahead of the approximately $450 million of
existing, structurally subordinated senior unsecured notes. The
proposed senior unsecured notes benefit from unsecured guarantees
of certain operating subsidiaries. A reduction in the amount of
legacy debt would reduce the first-loss support to the proposed
senior unsecured notes and could lead to a downgrade of the
proposed notes.
The stable ratings outlook reflects Moody's anticipation of 5%
revenue growth, debt to EBITDA below 4.5 times and 10% free cash
flow to debt. The stable outlook also reflects Moody's
anticipation for free cash flow to be used to fund shareholder
returns and acquisitions.
The ratings could be lowered if Moody's expects: 1) little or no
revenue growth; 2) debt to EBITDA will be maintained above 5 times;
3) free cash flow to debt will remain below 8%; or 4) more
aggressive shareholder return or acquisition policies.
The ratings could be raised if Moody's expects: 1) debt to EBITDA
will remain below 4 times; 2) free cash flow to debt maintained
above 12%; and 3) balanced financial policies.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
ServiceMaster, a wholly-owned subsidiary of publicly-traded
ServiceMaster Global Holdings, Inc. based in Memphis, TN, is a
national provider of products and services (termite and pest
control, home service contracts, cleaning and disaster restoration,
house cleaning, furniture repair and home inspection), through
company-owned and franchised operations. Brands include: Terminix,
American Home Shield (AHS), ServiceMaster Clean, Merry Maids,
Furniture Medic and AmeriSpec. Moody's expects 2017 revenues of
over $2.8 billion.
SHEEHAN PIPE LINE: Objections Resolved; Plan Hearing Dec. 6
-----------------------------------------------------------
Sheehan Pipe Line Construction Company filed a Disclosure Statement
on Sept. 14, 2016.
The Court set Oct. 17, 2016, as the final date to object to the
Disclosure Statement. Mid-Central Operating Engineers, R. David
Sheehan, Jr., and Midwestern Manufacturing Company filed objections
to the Disclosure Statement.
On Oct. 19, 2016, the Debtor filed its omnibus response and
submitted certain non-material proposed modifications to Disclosure
Statement and Plan of Liquidation to address those objections.
The Debtor advised the Court of additional non-material
modifications at the Oct. 20 hearing that fully resolved the
objections of Mid-Central, R. David Sheehan, Jr., and Midwestern
Manufacturing.
Judge Terrence L. Michael has ruled that the Disclosure Statement,
as modified and amended, contains adequate information for the
solicitation of acceptance of the Plan of Liquidation of the
Debtor, as contemplated by 11 U.S.C. Sec. 1125, and should
therefore be approved.
Following the hearing on Oct. 20, 2016, the Court ordered that:
A. The Disclosure Statement, as modified and amended, is
approved.
B. Debtor will file unmarked copies of the Disclosure
Statement, as modified and amended, and Plan, as modified and
amended, along with all exhibits, schedules, and applicable
deadlines established by the Disclosure Statement Order, which
shall constitute official documents to be sent to creditors,
interest holders, and parties-in-interest for balloting and
confirmation purposes. These copies of the Disclosure Statement
and Plan will be denominated "Third Amended Joint Disclosure
Statement Submitted by Sheehan Pipe Line Construction Company and
the Official Committee of Unsecured Creditors" and "Third Amended
Joint Plan of Liquidation Proposed by Sheehan Pipe Line
Construction Company, Debtor-in-Possession, and the Official
Committee of Unsecured Creditors," respectively.
C. Nov. 25, 2016, is fixed as the last day for submitting
ballots to accept or reject the Plan of Adjustment. Ballots should
be returned to Chad J. Kutmas, McDonald, McCann, Metcalf & Carwile,
LLP, 15 East Fifth Street, Suite 1400, Tulsa, Oklahoma.
D. A hearing on confirmation of the Plan will be conducted on
Dec. 6, 2016, at 9:30 a.m. before the U.S. Bankruptcy Court for the
Northern District of Oklahoma, Courtroom No. 2, 224 S. Boulder
Avenue, Tulsa, Oklahoma.
E. Any objection to confirmation of the Plan must be set forth
in a written objection, filed on or before Nov. 25, 2016, with a
copy served upon counsel for Debtor, Chad J. Kutmas, McDonald,
McCann, Metcalf & Carwile, LLP, 15 East Fifth Street, Suite 1400,
Tulsa, Oklahoma.
About Sheehan Pipe Line
Sheehan Pipe Line Construction Company, a contractor that
constructs pipelines in various states across the country, filed a
voluntary petition for relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Okla. Case No. 16-10678) on April 15,
2016, listing total assets of $90.2 million and total debt of $68.4
million.
The petition was signed by Robert A. Riess, Sr., as president and
CEO. The case is pending before Judge Terrence L. Michael.
Mary E. Kindelt, Esq., Chad J. Kutmas, Esq., and Gary M. McDonald,
Esq., at McDonald, McCann & Metcalf & Carwile, LLP, serves as
counsel to the Debtor. Lawyers at Foley & Lardner LLP represent
the creditors' committee.
SIGNAL BAY: Acquires Assets of Green Style Consulting
-----------------------------------------------------
Signal Bay, Inc., entered in to an Asset Purchase Agreement with
Green Style Consulting, LLC. Effective Nov. 1, 2016, the Company
will own all assets of Green Style Consulting, LLC d/b/a Green
Style Analytics, including 1,300 client names, analytical testing
equipment, brands/websites, and the vanity toll-free number
844-420-TEST for 210,000 shares of Series "D" preferred stock and a
$70,000 promissory note.
About Signal Bay
Signal Bay, Inc., a Colorado corporation and its subsidiaries
provide advisory, management and analytical testing services to the
emerging legalized cannabis industry.
As of June 30, 2016, Signal Bay had $2.17 million in total assets,
$2.02 million in total liabilities and $150,206 in total equity.
Signal Bay reported a net loss of $1.45 million for the year ended
Sept. 30, 2015. From inception through Sept. 30, 2014, the Company
incurred a net loss of $53,623.
MaloneBailey, LLP, in Houston, Texas, issued a "going concern"
qualification on the consolidated financial statements for the year
ended Sept. 30, 2015, citing that the Company has negative working
capital and recurring losses from operations and likely needs
financing in order to meet its financial obligations. These
conditions raise significant doubt about the Company's ability to
continue as a going concern.
SIGNAL BAY: Names Catherine Emond as EVIO General Manager
---------------------------------------------------------
Signal Bay, Inc., has entered into an employment agreement with
Catherine Emond to become the general manager of EVIO California,
Inc. Catherine Emond was previously co-founder and managing member
of Green Style Consulting, LLC.
On Oct. 26, 2016, the Company formed EVIO California, Inc. to be
the legal entity for all California Operations of EVIO Labs in the
State of California.
About Signal Bay
Signal Bay, Inc., a Colorado corporation and its subsidiaries
provide advisory, management and analytical testing services to the
emerging legalized cannabis industry.
As of June 30, 2016, Signal Bay had $2.17 million in total assets,
$2.02 million in total liabilities and $150,206 in total equity.
Signal Bay reported a net loss of $1.45 million for the year ended
Sept. 30, 2015. From inception through Sept. 30, 2014, the Company
incurred a net loss of $53,623.
MaloneBailey, LLP, in Houston, Texas, issued a "going concern"
qualification on the consolidated financial statements for the year
ended Sept. 30, 2015, citing that the Company has negative working
capital and recurring losses from operations and likely needs
financing in order to meet its financial obligations. These
conditions raise significant doubt about the Company's ability to
continue as a going concern.
SOUTHERN STATES: Moody's Lowers CFR to Caa1; Outlook Negative
-------------------------------------------------------------
Moody's Investors Service downgraded Southern States Cooperative
Inc.'s Corporate Family Rating to Caa1 from B3. The downgrade
results from significant earnings deterioration due to falling
commodity prices and adverse weather conditions that have weakened
volumes and compressed margins. In conjunction with the downgrade
of the CFR, Moody's also downgraded the $130 million senior secured
second lien notes due 2021 to Caa2 and the Probability of Default
to Caa1-PD. The company also has a $300 million ABL revolver due
2018 that is unrated. Southern States' speculative grade liquidity
(SGL) rating was withdrawn. The outlook is negative.
Ratings downgraded:
Southern States Cooperative Inc.
Corporate Family Rating -- to Caa1 from B3
Probability of Default Rating -- to Caa1-PD from B3-PD
$130 million Senior Secured Second Lien Notes due 2021 -- to
Caa2 (LGD5) from Caa1 (LGD5)
Ratings outlook, Negative
RATINGS RATIONALE
Southern States' Caa1 rating reflects the impact of substantially
lower commodity prices and volumes in the agricultural and
petroleum segments, primarily driven by weak agricultural end
markets, inventory destocking and cost cutting initiatives by
farmers, and adverse weather conditions. The rating is also
reflective of the volatility associated with the businesses, which
can lead to significant fluctuations in volume demand as well as
margin compression. The rating also reflects Southern States' weak
credit metrics including, its high leverage at 11.1x Debt/EBITDA,
low EBITDA Margin of 2.8%, and negative Retained Cash Flow/Debt,
that have declined significantly in fiscal year 2016 as a result of
price and volume weakness which compressed margins. The rating also
reflects the high cost of capital (10% fixed interest rate on the
senior secured second lien notes) that prevents debt reduction and
has exceeded its ability to cover interest cost with earnings. In
response to the business challenges over the last couple of years,
the company has undertaken meaningful restructuring initiatives in
an effort to lower costs and improve operating efficiencies, and
will continue to undertake such efforts to restore profitability to
the business.
Due to the seasonal nature of its business the majority of Southern
States' earnings are realized in the four months from March to
June, making the fourth fiscal quarter the most important. For
fiscal year 2016, the low oil pricing has compressed margins in the
Petroleum division while unusually warm weather in the fall and
winter months negatively impacted volumes. Over the same period,
the warm weather also pressured its Feed division as increased
pasture grazing lowered the demand for cattle feed during typical
winter/cold months. In the Agronomy division, lower commodity
prices pressured farmers to cut costs and manage inventories more
prudently. These factors combined to have a negative impact on
earnings year-over-year (yoy).
The rating is supported by the company's good competitive position
as a regional agricultural supplier in the Mid-Atlantic and
Southeastern U.S., its highly diversified customer base, and the
favorable long-term fundamentals of commercial agriculture that
underpin future demand for products, including population growth
and proliferation of industrial applications such as production of
bio-fuels. Despite falling commodity prices, larger corn crop
planting in the 2016 growing season helped maintain volumes in
Southern States' Agronomy division, since corn requires the highest
use of fertilizers and crop protection chemicals. However, these
volumes realized lower margins as a result of the low fertilizer
price environment. While a smaller contributor to earnings, the
companies Farm and Home segment delivered modestly favorable
results in 2016 due to higher sales in products ranging from pet
food, to ice melting, to lawn and garden.
Liquidity
Southern States' liquidity is weak due to its negative free cash
generation and limited availability under its revolver. Liquidity
is supported by June 30, 2016, year-end, cash balances of $18.7
million as well as $106.3 million excess availability under its
asset-based revolving credit facility (ABL).
In periods of rising commodity prices, working capital investment
tends to be a larger use of cash, though operating profits tend to
be enhanced in these periods. Revolver usage has been high over
the past three years due to free cash flow deficits. However,
excess revolver availability has remained positive, and is expected
to remain so. The company typically generates positive free cash
flow in its fiscal fourth quarter, its seasonal peak, which enables
it to repay most of the revolver balances.
The ABL allows for borrowing of up to $262 million, but based on a
seasonal borrowing base calculation (and reduced by $16.9 million
for the sale of assets to Perdue) availability is only $106
million. However, the company is required to comply with financial
covenants if availability under its revolver falls below $35
million, at which point it must comply with a 1.1 to 1.0 fixed
charge coverage ratio which they are unlikely to meet. As a
result, effective availability is currently only $71 million.
Southern States' ABL revolver is due in July 2018.
The company has no near-term maturities, since its second lien
notes are due in 2021, and is expected to have capital expenditures
of roughly $15 to $20 million.
Southern States' negative outlook reflects its elevated leverage,
weakness in agricultural end markets and the continued weakness in
oil prices expected for fiscal year 2017. Additionally the outlook
reflects the uncertainty of its restructuring initiatives and its
exposure to the vagaries of weather. The outlook also reflects the
company's high cost of capital that limits its ability to reduce
leverage, as well as its inability to cover basic expenditures with
earnings.
There is currently limited upside to the rating due to the
company's elevated leverage metrics, inability to cover interest
expense with operating earnings, and continued weakness in the
agriculture industry. upgrade could be considered if the company
were to realize a sustained improvement in price and volumes,
improvement in margins, and generate positive free cash flow such
that Debt/EBITDA fell below 6.0x and its earnings covered interest.
Conversely, further deterioration in volumes and margins, or if
total liquidity erodes further a ratings downgrade could result.
The principal methodology used in these ratings was Global Chemical
Industry Rating Methodology published in December 2013.
Headquartered in Richmond, Virginia, Southern States Cooperative,
Inc. is a retailer and wholesale supplier of a diversified array of
agricultural products and services, such as fertilizer, seed, crop
protectants, animal feed, petroleum, and farm and home supplies.
Revenues for the June 30, 2016, LTM period, was roughly $1.6
billion.
SPRING MEADOW: Case Summary & Unsecured Creditor
------------------------------------------------
Debtor: Spring Meadow Ranch, LLC
PO Box 676221
Rancho Santa Fe, CA 92067
Case No.: 16-19775
Nature of Business: Single Asset Real Estate
Chapter 11 Petition Date: November 1, 2016
Court: United States Bankruptcy Court
Central District of California (Riverside)
Judge: Scott C Clarkson
Debtor's Counsel: Vikrant Chaudhry, Esq.
VC LAW GROUP, LLP
6540 Lusk Blvd., Ste. C219
San Diego, CA 92121
Tel: 858-519-7333
Fax: 858-408-3910
E-mail: vik@thevclawgroup.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Ali Shapouri, managing member.
The Debtor listed Raymond Troll Trust as its largest unsecured
creditor holding an unknown amount of claim.
A full-text copy of the petition is available for free at:
http://bankrupt.com/misc/cacb16-19775.pdf
ST. VINCENT HOSPITAL: Moody's Affirms Ba2 Rating on Debt
--------------------------------------------------------
Moody's Investors Service affirms the Ba2 assigned to the debt
issued by St. Vincent Hospital, PA, d/b/a St. Vincent Health Center
(SVHC), the primary operating entity of St. Vincent Health System
(SVHS). The rating outlook is revised to negative from stable.
The action affects approximately $85 million of rated debt issued
through the Erie County Hospital Authority.
The outlook has been changed to negative from stable following
unexpectedly weak performance in FY's 2015 and interim 2016. The
Ba2 acknowledges SVHS's still meaningfully sized patient platform
which has exhibited recent growth, relatively stable, but modest,
cash and SVHS's affiliation with Highmark Inc. (rated Baa2), a
multi-billion dollar insurance company (debt remains separately
obligated), which offers leverage with payers and operational
efficiencies. The rating remains constrained by a history of weak
and inconsistent operations, intense competition, debt structure
risks, a large unfunded pension liability and weak socio economics
of the greater service area.
Rating Outlook
The negative outlook reflects our expectation that performance will
continue to be suppressed through FYE 2016, though it is our
expectation that operational traction will be gained as the fiscal
year comes to a close. Failure to stabilize financial performance
or maintain the system's cash position will result in pressure on
the rating.
Factors that Could Lead to an Upgrade
Significant operating improvement to level more in line with Ba1
peers, which is sustained
Notable strengthening of liquidity and debt measures and build
of cushion to liquidity covenant
Continued growth in demand
Factors that Could Lead to a Downgrade
Reduced covenant headroom or covenant violation
Failure to improve current margins or further decline in cash
flow
Weakening of liquidity and debt metrics
Disintegration of relationship / affiliation with Highmark
Legal Security
SVHC is the primary entity of SVHS. SVHC is presently the only
member of the Obligated Group. Bonds are secured by a general
obligation of the Obligated Group.
Use of Proceeds
Not applicable.
Obligor Profile
SVHS is a tertiary level medical center located in Erie
Pennsylvania. Effective July 1, 2013, Highmark Inc., Highmark
Health and Allegheny Health Network finalized an affiliation
agreement with SVHS. In accordance with the terms of the
affiliation agreement, Allegheny Health Network is the sole member
of SVHS.
Methodology
The principal methodology used in this rating was Not-For-Profit
Healthcare Rating Methodology published in November 2015.
SUNEDISON INC: Canadian Unit Files for Bankruptcy Protection
------------------------------------------------------------
Tom Corrigan, writing for The Wall Street Journal Pro Bankruptcy,
reported that renewable energy giant SunEdison Inc. has placed its
Canadian arm into bankruptcy while the parent company seeks more
time under court protection in the U.S. to sell off assets and work
out a strategy for repaying billions of dollars in debt.
According to the report, the company's Canadian division, which
also designs and develops renewable energy projects, says it can no
longer fund its operations. It sought protection from both
creditors and lawsuits under Canada’s Companies' Creditors
Arrangement Act, or CCAA, the equivalent of chapter 11 in the U.S.,
the WSJ related.
The Canadian operation, which is concentrated in Ontario, says its
financial woes are largely tied to liquidity issues stemming from
the bankruptcy of its parent company in the U.S., the report
further related. The Canadian unit's businesses listed about $80
million in total assets and about $30 million in liabilities, in
addition to about $90 million in other potential liabilities that
are the subject of pending litigation, the report said.
In court papers filed in New York, SunEdison said it is at a
"critical juncture" in its own chapter 11 case and asked Bankruptcy
Judge Stuart Bernstein to give it until at least Feb. 15 to
formulate a plan that maximizes the value of its assets, the report
added.
About SunEdison, Inc.
SunEdison, Inc. (OTC PINK: SUNEQ), is a developer and seller of
photovoltaic energy solutions, an owner and operator of clean
power
generation assets, and a global leader in the development,
manufacture and sale of silicon wafers to the semiconductor
industry.
On April 21, 2016, SunEdison, Inc., and 25 of its affiliates each
filed a Chapter 11 bankruptcy petition (Bankr. S.D.N.Y. Case Nos.
16-10991 to 16-11017). Martin H. Truong, the senior vice
president, general counsel and secretary, signed the petitions.
The Debtors disclosed total assets of $20.7 billion and total debt
of $16.1 billion as of Sept. 30, 2015.
The Debtors have hired Skadden, Arps, Slate, Meagher & Flom LLP as
counsel, Togut, Segal & Segal LLP as conflicts counsel, Rothschild
Inc. as investment banker and financial advisor, McKinsey Recovery
& Transformation Services U.S., LLC, as restructuring advisors and
Prime Clerk LLC as claims and noticing agent. The Debtors
employed
PricewaterhouseCoopers LLP as financial advisors; and KPMG LLP as
their auditor and tax consultant.
SunEdison also has tapped Eversheds LLP as its special counsel for
Great Britain and the Middle East. Cohen & Gresser LLP has also
been retained as special counsel.
The Debtors retained Ernst &Young LLP to provide tax-related
services. Keen-Summit Capital Partners LLC has been hired as real
estate advisor. Binswanger of Texas, Inc., also has been retained
as real estate agent.
Sullivan & Cromwell LLP serves as counsel to TerraForm Power,
Inc.,
and TerraForm Global, Inc.
An official committee of unsecured creditors has been appointed in
the case. The Committee tapped Weil, Gotshal & Manges LLP as its
general bankruptcy counsel and Morrison & Foerster LLP as special
counsel. Togut, Segal & Segal LLP and Kobre & Kim LLP serve as
conflicts counsel. Alvarez & Marsal North America, LLC, serves as
the Committee's financial advisors.
Counsel to the administrative agent under the Debtors' prepetition
first lien credit agreement are Richard Levy, Esq., and Brad
Kotler, Esq., at Latham & Watkins.
Counsel to the administrative agent under the postpetition DIP
financing facility are Scott Greissman, Esq., and Elizabeth Feld,
Esq. at White & Case LLP.
Counsel to the Tranche B Lenders (as defined in the DIP credit
agreement) and the steering committee of the second lien creditors
are Arik Preis, Esq., and Naomi Moss, Esq., at Akin Gump Strauss
Hauer & Field, LLP.
Counsel to the administrative agent under the Debtors' prepetition
second lien credit agreement is Daniel S. Brown, Esq., at
Pillsbury
Winthrop Shaw Pittman LLP.
The collateral trustee under the Debtors' prepetition second lien
credit agreement and the indenture trustee under each of the
Debtors' outstanding bond issuances, is represented by Marie C.
Pollio, Esq., at Shipman & Goodwin LLP.
Counsel to the ad hoc group of certain holders of the Debtors'
convertible senior notes is White & Case LLP's Tom Lauria, Esq.
SUPERIOR LINEN: Committee Taps Morris Polich as Legal Counsel
-------------------------------------------------------------
The official committee of unsecured creditors of Superior Linen,
LLC seeks approval from the U.S. Bankruptcy Court for the District
of Nevada to hire legal counsel.
The committee proposes to hire Morris, Polich & Purdy, LLP in
connection with the Debtor's Chapter 11 case.
Candace Carlyon, Esq., and Matthew Carlyon, Esq., the attorneys
designated to represent the committee, will be paid $575 per hour
and $350 per hour, respectively.
The hourly rates for other partners range from $450 to $575.
Meanwhile, the firm's associate attorneys and paraprofessionals
are paid $350 per hour and $150 per hour, respectively.
Morris does not hold or represent any interest adverse to the
committee or unsecured creditors, according to court filings.
The firm can be reached through:
Candace C. Carlyon, Esq.
Matthew R. Carlyon, Esq.
Morris, Polich & Purdy, LLP
3800 Howard Hughes Parkway, Suite 500
Las Vegas, NV 89169
Tel: (702) 862-8300
Fax: (702) 862-8400
Email: ccarlyon@mpplaw.com
Email: mcarlyon@mpplaw.com
About Superior Linen
Superior Linen, LLC, doing business as Superior Linen and Laundry
Services, which operates as a commercial laundry and linen rental
company, filed a chapter 11 petition (Bankr. D. Nev. Case No.
16-15388) on Sept. 30, 2016. The petition was signed by Robert E.
Smith, chief financial officer. The case is assigned to Judge Mike
N. Nakagawa. The Debtor estimated assets and debts at $10 million
to $50 million at the time of the filing.
Superior Linen has tapped Larson & Zirzow, LLC as legal counsel.
An official committee of unsecured creditors has been appointed in
the case.
SUPERIOR LINEN: Seeks to Hire Larson & Zirzow as Legal Counsel
--------------------------------------------------------------
Superior Linen, LLC seeks approval from the U.S. Bankruptcy Court
for the District of Nevada to hire Larson & Zirzow, LLC as legal
counsel.
The services to be provided by the firm include advising the Debtor
regarding the sale of its assets, pursuing legal actions to protect
its bankruptcy estate, and preparing its plan of reorganization.
The firm's hourly rates range from $400 to $450 for attorneys.
Meanwhile, paralegals are paid $175 per hour for their services.
Larson & Zirzow does not have any interest adverse to that of the
Debtor's estate, and is a "disinterested person" as defined in
section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Zachariah Larson, Esq.
Matthew Zirzow, Esq.
Larson & Zirzow, LLC
850 E. Bonneville Ave.
Las Vegas, NV 89101
Tel: (702) 382-1170
Fax: (702) 382-1169
Email: zlarson@lzlawnv.com
Email: mzirzow@lzlawnv.com
About Superior Linen
Superior Linen, LLC, doing business as Superior Linen and Laundry
Services, which operates as a commercial laundry and linen rental
company, filed a chapter 11 petition (Bankr. D. Nev. Case No.
16-15388) on Sept. 30, 2016. The petition was signed by Robert E.
Smith, chief financial officer. The case is assigned to Judge Mike
N. Nakagawa. The Debtor estimated assets and debts at $10 million
to $50 million at the time of the filing.
An official committee of unsecured creditors has hired Morris,
Polich & Purdy, LLP as counsel.
TEAM HEALTH: Moody's Puts Ba3 CFR Under Review for Downgrade
------------------------------------------------------------
Moody's Investors Service placed the ratings of Team Health, Inc.
under review for downgrade, including the company's Ba3 Corporate
Family Rating and Ba3-PD Probability of Default Rating. This
action follows the announcement that Blackstone has entered into a
definitive agreement to acquire Team Health, Inc. in a deal valued
at approximately $6.1 billion.
The transaction is expected to close during the first quarter of
2017, subject to regulatory review and customary closing
conditions.
These ratings were placed under review for downgrade:
Team Health, Inc.
Corporate Family Rating at Ba3
Probability of Default Rating at Ba3-PD
Senior Secured Bank Credit Facility at Ba2 (LGD3)
Senior Unsecured Notes at B2 (LGD6)
RATINGS RATIONALE
Moody's review will focus on Team Health's capital structure and
credit profile should the acquisition by Blackstone be consummated.
Moody's expects that should a takeover occur, that financial
leverage would increase from current levels, making a downgrade
from existing rating levels likely.
Excluding the prospects of a Blackstone acquisition, Team Health's
existing Ba3 Corporate Family Rating reflects Moody's expectation
that the company will operate with high financial leverage,
following itsacquisition of IPC Healthcare, yet rapidly delever to
about 4 times over the next 18 months. Moody's also considers the
benefits of the company's strong competitive position in a highly
fragmented industry and stable cash flow. However, risks around
reimbursement and exposure to uninsured individuals could pressure
revenue and earnings growth in the near to medium term. Moody's
also expects that the company will remain aggressive in its pursuit
of acquisitions, but that it will fund transactions in a manner
that maintains the company's ability to deleverage.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
Team Health is a provider of physician staffing and administrative
services to hospitals and other healthcare providers in the U.S.
The company is affiliated with more than 19,000 healthcare
professionals who provide emergency medicine, hospital medicine,
anesthesia, urgent care, pediatric staffing and management
services. The company also provides a full range of healthcare
management services to military treatment facilities. Team Health
recognized approximately $4.1 billion in net revenue for the twelve
months ended June 30, 2016.
TENET HEALTHCARE: Incurs $8 Million Net Loss in Third Quarter
-------------------------------------------------------------
Tenet Healthcare Corporation filed with the Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing
a net loss attributable to common shareholders of $8 million on
$4.84 billion of net operating revenues for the three months ended
Sept. 30, 2016, compared to a net loss attributable to common
shareholders of $29 million on $4.69 billion of net operating
revenues for the same period in 2015.
For the nine months ended Sept. 30, 2016, the Company reported a
net loss attributable to common shareholders of $113 million on
$14.76 billion of net operating revenues compared to a net loss
attributable to common shareholders of $43 million on $13.60
billion of net operating revenues for the nine months ended
Sept. 30, 2015.
As of Sept. 30, 2016, Tenet Healthcare had $24.47 billion in total
assets, $21 billion in total liabilities, $2.30 billion in
redeemable noncontrolling interest in equity of consolidated
subsidiaries and $1.16 billion in total equity.
Tenet Healthcare reported a net loss from continuing operations of
$9 million in the third quarter of 2016, a $19 million improvement
when compared to a $28 million net loss from continuing operations
in the third quarter of 2015. Adjusted EBITDA was $570 million in
the third quarter of 2016, an increase of $4 million, or 0.7
percent, compared to $566 million in the third quarter of 2015.
"Our focus on high-acuity service lines continues to drive growth
in our hospitals and contributed to the 5.3% increase in
same-hospital patient revenues this quarter. Adjusted EBITDA in
our hospital segment increased by a similar amount after adjusting
for acquisitions, divestitures and electronic health record
incentives," said Trevor Fetter, chairman and chief executive
officer. "Conifer and USPI delivered another outstanding quarter,
and our three business segments continue to work together to
enhance our long-term growth."
Hospital Operations and Other Segment
Net operating revenue in the Hospital Operations and other segment
was $4.162 billion, down 0.4 percent from $4.179 billion in the
third quarter of 2015 due to hospitals that have been divested
since that time. On a same-hospital basis, patient revenue
increased to $3.768 billion, up 5.3 percent from $3.577 billion in
the third quarter of 2015. The increase was driven by a 1.4
percent increase in adjusted patient admissions and a 3.9 percent
increase in net patient revenue per adjusted admission.
Adjusted EBITDA in Tenet's hospital segment was $334 million,
representing a decline of 12.8 percent as compared to $383 million
in the third quarter of 2015. The decline was primarily driven by
divestitures in 2015 and 2016 and an expected decrease in
electronic health record incentives, and was partially offset by
acquisitions in 2015. In addition, Tenet's health plan business
lowered EBITDA in the segment by approximately $5 million.
Total hospital segment selected operating expenses, defined as the
sum of salaries, wages and benefits, supplies and other operating
expenses, increased 3.1 percent on a per adjusted admission basis
in the quarter. Approximately one-third of the increase was
attributable to an increase in expense at Tenet's health plans,
which was substantially offset by an increase in health plan
revenues as a result of additional covered lives in 2016.
Exchanges
Tenet's same-hospital exchange admissions were 5,465 in the third
quarter of 2016, up 16.9 percent from the third quarter of 2015.
Same-hospital exchange outpatient visits were 51,015, up 32.0
percent from the third quarter of 2015.
Uncompensated Care
Tenet's provision for doubtful accounts was $367 million in the
third quarter of 2016, representing a ratio of 7.0 percent of
revenues before bad debt, as compared to $371 million in the third
quarter of 2015, or 7.3 percent of revenues before bad debt.
Tenet's uncompensated care costs, defined as the sum of the
provision for doubtful accounts, charity care write-offs and
uninsured discounts, was $1.318 billion and $1.303 billion in the
third quarters of 2016 and 2015, respectively, including $951
million and $932 million, respectively, of charity care write-offs
and uninsured discounts that were offered through Tenet's Compact
with Uninsured Patients. Uncompensated care represented 21.4
percent of revenue before bad debts, uninsured discounts and
charity care write-offs in the third quarter of 2016, down from
21.7 percent in the third quarter of 2015. Nearly all of Tenet's
uncompensated care is associated with the Hospital Operations and
other segment.
Uninsured plus charity admissions increased by 985 admissions, or
10.5 percent on a same-hospital basis in the third quarter of 2016
compared to the third quarter of 2015. Uninsured plus charity
outpatient visits decreased by 3,733 visits, or 2.8 percent, on a
same-hospital basis.
Ambulatory Care Segment
During the third quarter of 2016, the Ambulatory segment produced
net operating revenue of $448 million, representing an increase of
36.2 percent as compared to $329 million in the third quarter of
2015. In addition, the Ambulatory segment generated Adjusted
EBITDA of $157 million, up 28.7 percent from $122 million in the
third quarter of 2015
The results of many of the facilities in which the Ambulatory
segment has an investment are not consolidated by Tenet. To help
analyze the segment's results of operations, management uses
system-wide measures which include revenues and cases of both
consolidated and unconsolidated facilities. On a same-facility
system-wide basis, revenue in the Ambulatory segment increased 9.7
percent, with cases increasing 4.0 percent and revenue per case
increasing 5.5 percent.
Conifer Segment
During the third quarter of 2016, Conifer's revenue increased 14.7
percent to $398 million, up from $347 million in the third quarter
of 2015, and Conifer's revenue from third party customers increased
by 29.9 percent to $239 million. Conifer generated $79 million of
Adjusted EBITDA in the third quarter of 2016, up 29.5 percent from
$61 million in the third quarter of 2015. Conifer's results for
the third quarter of 2016 included $9 million of annual customer
incentives. These incentives may be achieved again in future
years, but will not recur at these levels in the fourth quarter of
2016.
Net Income and Earnings Per Share
Tenet reported a net loss from continuing operations of $9 million,
or $0.09 per share, in the third quarter of 2016 compared to a net
loss of $28 million, or $0.28 per share, in the third quarter of
2015.
After adjusting for certain items, Tenet generated Adjusted net
income from continuing operations of $16 million, or $0.16 per
diluted share, during the third quarter of 2016, as compared to
Adjusted net income from continuing operations of $30 million, or
$0.29 per diluted share, in the third quarter of 2015.
A reconciliation of GAAP net income available (loss attributable)
to Tenet Healthcare Corporation common shareholders to Adjusted net
income from continuing operations and Adjusted diluted earnings per
share from continuing operations is contained in Table #2 at the
end of this release.
Cash Flow and Liquidity
Cash and cash equivalents were $649 million at Sept. 30, 2016,
compared to $656 million at June 30, 2016. The Company had no
outstanding borrowings on its $1 billion credit line as of
Sept. 30, 2016. Accounts receivable days outstanding were 52.9 at
Sept. 30, 2016, compared to 51.1 at June 30, 2016, and 49.5 at Dec.
31, 2015.
Net cash provided by operating activities in the nine months ended
Sept. 30, 2016, was $851 million, representing a $16 million
improvement compared to $835 million in the comparable period in
2015. After subtracting $614 million and $566 million of capital
expenditures in the nine months ended Sept. 30, 2016, and
Sept. 30, 2015, respectively, Free Cash Flow was $237 million in
the nine months ended Sept. 30, 2016, representing a $32 million
decline compared to $269 million in the comparable period in 2015.
Adjusted Free Cash Flow was $368 million in the nine months ended
Sept. 30, 2016, representing a $76 million decline from $444
million in the comparable period in 2015.
Net cash used in investing activities was $150 million in the nine
months ended Sept. 30, 2016, compared to $1.272 billion of net cash
used in investing activities in the comparable period in 2015. Net
cash used in financing activities was $408 million in the nine
months ended Sept. 30, 2016, compared to $694 million of net cash
provided by financing activities in the comparable period in 2015.
Outlook
The Company's Outlook for 2016 includes:
* Revenue of $19.650 billion to $19.800 billion,
* Net loss from continuing operations ranging from a loss of $99
million to a loss of $94 million,
* Adjusted EBITDA of $2.400 billion to $2.450 billion,
* Net cash provided by operating activities of $1.2 billion to
$1.3 billion,
* Adjusted Free Cash Flow of $400 million to $600 million,
* Loss per share from continuing operations ranging from a loss
of $1.00 to a loss of $0.95 per basic share, and
* Adjusted diluted earnings per share from continuing operations
of $1.16 to $1.21.
The Outlook for calendar year 2016 assumes equity in earnings of
unconsolidated affiliates of $120 million to $130 million,
electronic health record incentives of $30 million to $35 million,
net income attributable to noncontrolling interests of $340 million
to $360 million (excluding an additional $19 million of
noncontrolling interests recorded by USPI in the first nine months
of 2016 related to gains on consolidation) and an average diluted
share count of 101 million.
The Company's Outlook for the fourth quarter of 2016 includes:
* Revenue of $4.9 billion to $5.0 billion,
* Net income from continuing operations of $9 million to $14
million,
* Adjusted EBITDA of $600 million to $650 million,
* Earnings per diluted share from continuing operations of
$0.09 to $0.14, and
* Adjusted diluted earnings per share from continuing
operations of $0.17 to $0.22.
The Outlook for the fourth quarter assumes equity in earnings of
unconsolidated affiliates of approximately $40 million, electronic
health record incentives of approximately $10 million, net income
attributable to noncontrolling interests of $94 million to $114
million and an average diluted share count of 102 million.
Additional details on Tenet's Outlook for both the fourth quarter
and calendar year 2016 are available in Tables 4 and 5 at the end
of this press release and in an accompanying slide presentation
that is accessible through the Company's website at
www.tenethealth.com/investors.
Management's Webcast Discussion of Third Quarter Results
Tenet management discussed the Company's third quarter 2016 results
on a webcast held on Nov. 1, 2016. Investors can access the
webcast through Tenet's Web site at
http://www.tenethealth.com/investors
A set of slides, which will be referred to on the conference call,
is available on the Quarterly Results section of the Company's Web
site.
Additional information regarding Tenet's quarterly results of
operations is contained in its Form 10-Q report for the three
months ended Sept. 30, 2016, a copy of which is available for free
at https://is.gd/Ko0t2J
About Tenet Healthcare
Tenet Healthcare Corporation -- http://www.tenethealth.com/-- is
a national, diversified healthcare services company with 110,000
employees united around a common mission: to help people live
happier, healthier lives. The company operates 80 hospitals, 214
outpatient centers, six health plans and Conifer Health Solutions,
a leading provider of healthcare business process services in the
areas of revenue cycle management, value based care and patient
communications.
Tenet Healthcare reported a net loss attributable to the Company's
common shareholders of $140 million on $18.63 billion of net
operating revenues for the year ended Dec. 31, 2015, compared to
net income available to the Company's common shareholders of $12
million on $16.60 billion of net operating revenues for the year
ended Dec. 31, 2014.
Tenet carries a 'B' IDR from Fitch Ratings, 'B' corporate credit
rating from Standard & Poor's Ratings Services and 'B1' Corporate
Family Rating from Moody's Investors Service.
TOMS SHOES: S&P Affirms 'B-' CCR; Outlook Stable
------------------------------------------------
S&P Global Ratings said that it affirmed its 'B-' corporate credit
rating on Los Angeles-based TOMS Shoes LLC. The outlook is stable.
At the same time, S&P affirmed its 'B-' issue-level rating on the
company's $306.5 million senior secured term loan due 2020. S&P
revised the recovery rating to '4' from '3'. The '4' recovery
rating indicates S&P's expectation that lenders could expect
average (30%-50%, lower half of the range) recovery in the event of
payment default.
The company had about $320 million in reported debt outstanding as
of June 30, 2016.
"The rating affirmation reflects our expectation that, despite the
company's currently weak credit metrics, TOMS Shoes' EBITDA and
cash flows should continue to strengthen as the business further
stabilizes under the new management. We expect the company's
debt-to-EBITDA ratio to gradually strengthen to below 10x in 2017,
as management's actions to restore top line growth, improve
operating margins, and generate positive cash flows to reduce debt
take effect," said S&P Global Ratings credit analyst Suyun Qu.
S&P's rating on TOMS reflects its recent operating underperformance
that materially weakened its financial position and left it
burdened by high financial leverage. It also incorporates S&P's
assessment of the company as a small and narrowly-focused player
within the highly competitive casual shoe segment, a challenging
retail sector as key retailers grapple with lower foot traffic and
digital competition. S&P also considers the company's reliance on
one single well-known brand amongst millennials.
S&P believes TOMS' operating performance has improved under its new
management, who have taken the necessary steps to stabilize
performance. For example, the company is restructuring its
manufacturing and supply chain network to support its
diversification into winter and all-weather shoes from its
signature Alpargata style shoe. It is also developing a new retail
channel strategy to encompass full price and off price channels, as
well as its own digital platform. Moreover, management has
implemented working capital initiatives that focus on inventory
management, which has resulted in significantly reduced inventory
balances. Nevertheless, the heavy inventory purchase in late 2015
led to higher-than-expected debt levels, as the company drew on its
revolver to fund the working capital deficit.
Even though TOMS typically generates most of its earnings and cash
flow in the first half of the year, S&P believes the upcoming
holiday season is important, as TOMS has expanded its assortment to
all seasons. However, despite challenges at retailers from falling
foot traffic, S&P believes TOMS should be able to expand its top
line through its broader product offering, a better pricing
strategy, as well as by expanding sales into new channels.
The outlook is stable, reflecting S&P's expectations of gradually
strengthening credit metrics on the back of the company's focus on
actions that lead to modest top line growth, operating margin
improvements, and better working capital management. S&P expects
the company's credit metrics to remain relatively weak, but
gradually improve as the company applies its positive free cash
flow towards debt reduction. This should also allow TOMS to build
more liquidity headroom, as it reduces its revolver borrowings.
ULTIMATE AVT: Seeks to Hire Eric A. Liepins as Legal Counsel
------------------------------------------------------------
Ultimate AVT Inc. seeks approval from the U.S. Bankruptcy Court for
the Northern District of Texas to hire Eric A. Liepins, P.C.
The firm will serve as the Debtor's legal counsel in connection
with its Chapter 11 case.
Eric Liepins, Esq., a shareholder of the firm, will be paid an
hourly rate of $275 while his paralegals and legal assistants will
be paid between $30 and $50 per hour.
In a court filing, Mr. Liepins disclosed that his firm does not
represent any interest adverse to the Debtor's bankruptcy estate.
About Ultimate AVT Inc.
Ultimate AVT, Inc. filed a voluntary Chapter 11 petition (Bankr.
N.D. Tex. Case No. 16-34140) on October 25, 2016. The Debtor is
represented by Eric A. Liepins, Esq., at Eric A. Liepins, P.C.
UNISYS CORP: S&P Lowers CCR to 'B'; Outlook Negative
----------------------------------------------------
S&P Global Ratings said it lowered its corporate credit rating on
Blue Bell, Pa.-based Unisys Corp. to 'B' from 'B+'. The outlook is
negative.
S&P also lowered the issue-level rating on the company's unsecured
notes to 'B' from 'B+'. The recovery rating is unchanged at '4',
indicating S&P's expectation for average (30%-50%; lower half of
the range) recovery in the event of payment default.
S&P's downgrade of Unisys is based on S&P's view that weak demand
for IT services, slower-than-expected margin expansion from
restructuring efforts, and significant required pension
contributions will preclude Unisys from generating sustained
positive free cash flow or reducing S&P Global-adjusted leverage
under 5x for at least the next 18 months," said S&P Global credit
analyst James Thomas.
S&P's negative outlook results from its expectation that the
upcoming August 2017 maturity of its $210 million unsecured notes
will significantly reduce cash balances and limit Unisys's
financial flexibility, absent a refinancing transaction. S&P's
outlook also incorporates the risk the firm may not be able to
improve profitability sufficiently to return to sustainable free
cash flow generation over the longer term as well, as required
pension contributions are projected to increase considerably in
2019.
S&P's negative outlook on Unisys Corp. is based on S&P's
expectation that sizable mandatory pension contributions and
restructuring expenses will constrain the firm's ability to
generate free cash flow over the next 12-24 months in spite of
recent improvements to EBITDA margins and a moderating pace of
revenue decline.
UTE LAKE RANCH: Trustee Hires Kaplan & Associates as Accountant
---------------------------------------------------------------
The Official Committee of Asbestos Personal Injury Claimants for
Kaiser Gypsum Company, Inc., asks the Bankruptcy Court to enter an
order authorizing the retention of Caplin & Drysdale, Chartered, as
its counsel.
The ACC anticipates that Caplin & Drysdale's services in the case
will include, inter alia, the following:
a) assisting and advising the ACC in its consultations with
the Debtors, unsecured creditors' committee, and the
Future Claimants' Representative (the "FCR"), relative to
the overall administration of the estate;
b) representing the ACC at hearings to be held before this
Court or Federal District Court or any appellate courts
and communicating with the ACC regarding the matters
heard and issues raised as well as the decisions and
considerations of this Court and any other courts;
c) assisting and advising the ACC in its examination and
analysis of the Debtors' conduct and financial affairs
and those of its affiliates;
d) reviewing and analyzing all applications, orders,
operating reports, schedules and statements of affairs
filed and to be filed with this Court by the Debtors or
other interested parties in this case; advising the ACC as
to the necessity and propriety of the foregoing and their
impact upon the rights of asbestos-related claimants, and
upon the case generally; and after consultation with and
approval of the ACC or its designee(s), consenting to
appropriate orders on its behalf or otherwise objecting
thereto;
e) assisting the ACC in preparing appropriate legal pleadings
and proposed orders as may be required in support of
positions taken by the ACC and preparing witnesses and
reviewing documents relevant thereto;
f) coordinating the receipt and dissemination of information
prepared by and received from the Debtors' independent
certified accountants or other professionals retained by
them as well as such information as may be received from
independent professionals engaged by the ACC, unsecured
creditors' committee (the "UCC"), and the FCR, as
applicable;
g) assisting the ACC in the solicitation and filing with the
Court of acceptances or rejections of any proposed plan or
plans of reorganization;
h) assisting and advising the ACC with regard to
communications to the asbestos-related claimants regarding
the ACC's efforts, progress and recommendation with
respect to matters arising in the case as well as any
proposed plan of reorganization; and
i) assisting the ACC generally by providing such other
services as may be in the best interest of the creditors
represented by the ACC.
The hourly rates applicable to the professionals proposed to
represent the ACC are:
Elihu Inselbuch Member $1,165
Ann C. McMillan Member $730
Kevin C. Maclay Member $620
Todd E. Phillips Member $525
Kevin M. Davis Associate $375
Sally J. Sullivan Associate $295
Cecilia Guerrero Paralegal $285
Brigette A. Wolverton Paralegal $240
Generally, Caplin & Drysdale's hourly rates are:
Members and Senior Counsel $510 - $1,250
Of Counsel $470 - $930
Associates $270 - $495
Paralegals $240 - $285
Ann C. McMillan, a member of Caplin & Drysdale, assures the Court
that his firm has no connections with the creditors, any other
party in interest, their respective attorneys and accountants, the
United States Trustee or any person employed in the office of the
United States Trustee.
The firm can be reached at:
Ann C. McMillan, Esq.
CAPLIN & DRYSDALE, CHARTERED
One Thomas Circle, NW, Suite 1100
Washington, D.C.
Tel: (202) 862-5080
E-mail: amcmillan@capdale.com
About Kaiser Gypsum
Kaiser Gypsum Company, Inc. and affiliate Hanson Permanente Cement,
Inc. sought protection under Chapter 11 of the Bankruptcy Code
(Bankr. W.D.N.C. Case Nos. 16-31602 and 16-10414) on Sept. 30,
2016. The petitions were signed by Charles E. McChesney, II,
vice-president and secretary.
The companies are represented by Rayburn Cooper & Durham P.A. and
Jones Day.
At the time of the filing, the companies estimated their assets and
liabilities at $100 million to $500 million.
Kaiser's principal business consisted of manufacturing and
marketing gypsum plaster, gypsum lath and gypsum wallboard. The
company has no current business operations other than managing its
legacy asbestos-related and environmental liabilities. The company
has no material tangible assets.
HPCI's primary business was the manufacture and sale of Portland
cement products. It is a wholly-owned, indirect subsidiary of
non-debtor Lehigh Hanson, Inc.
HPCI is the direct parent of Kaiser Gypsum as well as non-debtor
Hanson Micronesia Cement, Inc., and non-debtor Hanson Permanente
Cement of Guam, Inc., the operating subsidiaries. Non-debtor
Permanente Cement Company, which has no assets or operations, is
also a wholly-owned subsidiary of HPCI.
UWAGBOE O. ORU-LAWRENCE: CSNDC Can Purchase Properties, Judge Rules
-------------------------------------------------------------------
A broad coalition of law firms, city agencies and tenant advocacy
groups has secured a precedent-setting win for low-income renters
in Dorchester and Mattapan. Fifty-nine homes in this area will now
be preserved as affordable housing after a Federal bankruptcy judge
ruled that the Codman Square Neighborhood Development Corporation
(CSNDC), a non-profit developer of affordable housing, can purchase
the properties located at 91-101 Waldeck St. and 25-35 Orlando St.
from the bankrupt landlord.
The coalition of supporters working pro bono to secure the sale of
these properties included the Boston Public Health Commission, City
Life/Vida Urbana, the City of Boston, CSNDC, Goulston & Storrs,
Greater Boston Legal Services, Jones Day and Pillsbury Winthrop
Shaw Pittman.
"Ensuring that Boston remains an affordable place to live is
critical to the future of our city," Mayor Walsh said. "I want to
commend the entire team that worked on the acquisition of these
properties for their commitment to the well-being of the tenants
who live on Orlando and Waldeck Streets, and the tenants for their
engagement in the process. Boston is a city that works together to
protect its vulnerable residents, and I am pleased we were able to
assist."
The administration of Major Martin J. Walsh was an active partner
in the acquisition of these properties, bolstering the efforts of
the tenants by filing a supporting affidavit with the court. In
addition, through the City's new Acquisition Opportunity Fund, the
City was able to quickly commit and provide a loan to assist in
both the acquisition of the properties and to make the initial
repairs and improvements needed to address critical health and
safety issues, all in time to meet the strict deadline for the
bankruptcy sale.
City Life/Vida Urbana, the housing justice organization that worked
with the tenants, credits the tenants for catalyzing the successful
campaign. "We all get along, all the tenants get along. So, it's
a good community to me. To all of us, it's a good community. We
have to back each other up," said Dania Rosaria, a tenant on
Orlando St. after an October 5, 2016 bankruptcy court hearing which
cleared the way for the sale.
"This victory helps refine an important anti-displacement strategy
which we call 'the sword, the shield and the offer,'" said Steve
Meacham, Coordinator of Organizing at City Life/Vida Urbana. "The
'sword' was the protests and coalition building. The 'offer' came
from CSNDC. The 'shield' was the energetic legal defense provided
by GBLS and the incredible pro bono hours donated by the three law
firms. We hope to use this model in many other locations where we
have organized tenant associations," Mr. Meacham said.
Jacquelynne J. Bowman, Executive Director of Greater Boston Legal
Services (GBLS), which led the representation of the low-income
tenants with Pillsbury, Jones Day and the Boston Public Health
Commission, noted: "This victory is first and foremost a powerful
demonstration that often, the most creative and effective solution
to critical problems faced by poor people come from the very people
whose lives are impacted." Lauren Song, also of GBLS, who
coordinated the pro bono representation of the tenants, remarked:
"This precedent-setting win was borne out of a deep commitment by
our pro bono community to use its legal expertise to protect the
rights of the City's most vulnerable people. And here, the pro
bono coalition is proud to credit the tenants, organized by City
Life/Vida Urbana, who successfully pursued a court strategy that
achieved so much more than preserve their own housing."
Jim Wallack, a bankruptcy partner at Goulston & Storrs who led the
representation of CSNDC along with real estate partner Amy Moody
McGrath, commented, "The coalition's entire bankruptcy and real
estate legal team worked tirelessly on this case, and we are
thrilled with this outcome for the tenants." Ms. McGrath further
noted, "After years of deplorable living conditions, the tenants
will now have affordable housing that will be maintained in the
manner that it should have been all along."
John D. Hanify of Jones Day observed: "This is a great victory for
the determined residents of Orlando and Waldeck Streets, who
organized and recruited the City, its agencies, GBLS and CSNDC to
forge a partnership that will assure this housing remains
affordable for future generations of City residents. Jones Day was
pleased to play a supportive role."
The owner of the buildings, Uwagboe O. Oru-Lawrence, filed for
Chapter 11 Bankruptcy in 2013 and continued to operate his
properties as debtor-in-possession until July 2016. Earlier this
year, the Inspectional Services Department of the City of Boston
had filed several court actions against the owner to address
violations in connection with health and safety issues at the
Dorchester and Mattapan properties, including electrical and vermin
problems.
Joseph Butler, the Trustee appointed to administer the bankruptcy
case, filed a motion in July 2016 to abandon the Orlando St.
property, essentially allowing the mortgage holder to foreclose on
the property. In early August, CSNDC began discussions with the
Trustee to acquire the Orlando St. property, as well as the Waldeck
St. property, and preserve them as affordable housing. The
Tenants, along with the Boston Public Health Commission, held
claims against the bankruptcy estate in excess of $3,500,000
without duplication; however, they agreed to waive their claims if
the property was sold to a non-profit such as CSNDC with the
agreement that it would be maintained as affordable housing.
On Oct. 5, 2016, the Trustee conducted a sealed bid auction in the
bankruptcy court, and determined that CSNDC's bid was the highest
and best offer due in large part to the claim waivers. Chris
Mirick, a partner at Pillsbury who argued in court on behalf of the
tenants, commented on the bid structure: "It was important to the
tenants that these apartments be preserved as affordable housing.
By waiving their claims, they were able to improve the economics of
the CSNDC bid and achieve this great result." In approving of the
Trustee's decision, Chief Judge Hoffman held that the wishes of the
Tenants, as a large creditor body other than the mortgage holders,
should be taken into consideration in determining the outcome of
the matter. The sale of the properties to CSNDC was approved by
the U.S. Bankruptcy Court for the District of Massachusetts on
October 5, 2016 and the final deal closed on October 27, 2016.
"We are pleased by the judge's ruling, which will provide
much-needed stability for our clients, 12 previously homeless
individuals who had found themselves in our emergency shelter
system. Connecting our clients with permanent housing solutions
such as these is the ultimate goal of BPHC's homeless services, and
is the answer to ending chronic homelessness," said BPHC Executive
Director Monica Valdes Lupi, JD, MPH. "The efforts of our General
Counsel Tim Harrington and Assistant General Counsel Mimi Brown on
behalf of the tenants showcase the mission of BPHC: to protect,
preserve, and promote the health and well-being of all residents,
particularly the most vulnerable."
"The process of working with the coalition -- the attorneys, the
City of Boston, our funding partners, City Life/Vida Urbana and the
tenants of the Waldeck and Orlando St. properties -- represents the
personification of CSNDC's mission of building a cohesive and
resilient community in South Dorchester and developing affordable
housing that is safe and sustainable, and that promotes economic
stability for low- and moderate-income residents," noted Gail
Latimore, Executive Director at CSNDC. "We look forward to
continuing these important partnerships as we renovate these
properties to ensure future stability," said K. Beth O'Donnell,
CSNDC's Director of Real Estate.
Goulston & Storrs -- http://www.goulstonstorrs.com/-- is an Am Law
200 law firm, with offices in Boston, New York, Washington, DC and
Beijing. With nearly 200 lawyers across multiple disciplines,
Goulston & Storrs is a real estate powerhouse with leading-edge
corporate, capital markets and finance, litigation and trust and
estate practices.
The case is In re Uwagboe O. Oru-Lawrence (Bankr. D. Mass. Case No.
13-17250) filed Dec. 19, 2013.
WAFERGEN BIO-SYSTEMS: Reports Third Quarter Financial Results
-------------------------------------------------------------
WaferGen Bio-systems, Inc., announced preliminary, unaudited
revenue for the third quarter ended Sept. 30, 2016.
The Company expects total revenue for the third quarter to be
approximately $2.4 million, which does not include $273,000 in
deferred revenue plus backlog for purchase orders received during
the third quarter which will be booked in the fourth quarter. Total
revenue for the third quarter represents an increase of 20%, when
compared to the $2.0 million reported for the third quarter of
2015. The primary driver of revenue growth was sales of the
Company's SmartChip products and services, including the ICELL8
Single-Cell System, which comprised approximately 72% of total
revenue during the quarter, compared to 63% in the prior year
period. In addition, cash burn was significantly reduced in the
third quarter vs. the second quarter resulting in an estimated
ending cash position of $5.1 million on Sept. 30, 2016.
Year-to-date total revenue through the first three quarters is
approximately $6.8 million, which represents an increase of 42%,
when compared to $4.8 million reported through the third quarter of
2015. The Company is maintaining revenue guidance of $10 million
to $12 million for 2016.
"We are pleased to release these results, which demonstrate we are
on track to achieve consolidated 2016 revenues exceeding $9 million
and provide stockholders with transparency and clarity about the
benefit they will receive from the merger with Takara Bio USA
Holdings, Inc.," said Rollie Carlson, Ph.D., president and chief
executive officer of WaferGen.
As described in the proxy statement for the special meeting called
to approve the merger, the consideration to be paid by Takara Bio
will be determined primarily by a formula based on WaferGen's
consolidated revenues for the year ending Dec. 31, 2016, and on
certain specified deductions. The proxy statement provides
illustrative calculations based on, among other things,
consolidated 2016 revenues of $9.0 million and illustrative
deductions of $7.61 million and $4.20 million, showing, based on
such assumptions, per share consideration payable to WaferGen
stockholders of $1.0000 and $1.1409. Such merger consideration per
share would represent a premium of 82% and 107%, respectively, over
WaferGen's closing stock price of $0.55 on May 12, 2016, the day
preceding the announcement of the merger agreement.
Stockholders who have not yet voted on the merger agreement with
Takara Bio USA Holdings, Inc. are reminded every vote will count no
matter how many shares you own. Stockholders with questions are
encouraged to call WaferGen's information agent and strategic
shareholder services advisor, Kingsdale Shareholder Services at
1-866-581-0512 or contactus@kingsdaleshareholder.com. For further
information about the merger proposal, please see the proxy
statement mailed to stockholders on or around Sept. 23, 2016.
The quarterly financial results included in the press release were
calculated prior to the completion of a review by WaferGen
Bio-systems' external auditors and are therefore subject to
adjustment. Actual revenues for the third quarter of 2016 may
differ materially from our expectations.
WaferGen Bio-systems will announce its third quarter ended
Sept. 30, 2016, financial results after the market close and host a
conference call and webcast on Tuesday, Nov. 8, 2016.
Conference Call & Webcast
Tuesday, November 8th @ 5pm Eastern:
Domestic: 877-407-3982
International: 201-493-6780
Conference ID: 13649371
Webcast: http://public.viavid.com/index.php?id=121844
Replays, available through November 22:
Toll-Free: 844-512-2921
International: 412-317-6671
Conference ID: 13649371
A full-text copy of the press release is available for free at:
https://is.gd/FlrqxA
About WaferGen Bio-systems
Fremont, California-based WaferGen Bio-systems, Inc., engages in
the development of systems for gene expression quantification,
genotyping and stem cell research. Since 2008, the Company's
primary focus has been on the development, manufacture and
marketing of its SmartChip System, a genetic analysis platform
used for profiling and validating molecular biomarkers in the life
sciences and pharmaceutical drug discovery industries.
WaferGen reported a net loss attributable to common stockholders of
$19.99 million on $7.16 million of total revenue for the year ended
Dec. 31, 2015, compared to a net loss attributable to common
stockholders of $10.7 million on $6 million of total revenue for
the year ended Dec. 31, 2014.
As of June 30, 2016, Wafergen had $15.0 million in total assets,
$7.92 million in total liabilities and $7.11 million in total
stockholders' equity.
WESTERN AUTO: Wants Authorization to Use Cash Collateral
--------------------------------------------------------
Western Auto Sales, LLC asks the U.S. Bankruptcy Court for the
District of Idaho for authorization to use cash collateral.
The Debtor is indebted to:
(a) Nextgear Capital, Inc. f/k/a Dealer Services Corporation,
in the amount of approximately $484,023.69. The indebtedness is
secured by 41 vehicles;
(b) Automotive Finance Corporation, in the amount of
approximately $257,219.44. The indebtedness is secured by 33
vehicles; and
(c) Westlake Flooring Company, LLC, in the amount of
approximately $94,141.33. The indebtedness is secured by 11
vehicles.
The Debtor estimates it would be able to liquidate its inventory in
a reasonable time for approximately $1,300,000, which exceeds the
value of the flooring creditors' purchase money security interests
by approximately $420,695.
The Debtor relates that it needs to use cash collateral to provide
for:
(1) Payoffs for vehicles sold pre-petition in order to receive
titles for such vehicles. The Debtor estimates this amount to be a
total of:
(a) Automotive Finance Corporation: $31,536.16
(b) Nextgear Capital: $20,770.50
(2) Payoffs for traded-in vehicles subject to loans. The
Debtor estimates this amount to be $12,750.
(3) Pay Ms. Warner for a vehicle Debtor sold on consignment.
The Debtor estimates this amount to be $6,500.
(4) Payoffs for vehicles sold post-petition in order to
receive titles for such vehicles.
(5) General overhead of the dealership, pursuant to the
Debtor's proposed Budget.
The Debtor's proposed Budget provides for total expenses in the
amount of $363,467 for November 2016, $316,467 for December 2016,
$272,592 for January 2017, $231,217 for February 2017.
The Debtor proposes to make monthly adequate protection payments to
its flooring lenders in the amount of $10,000 on a pro rata basis.
The Debtor contends that it is currently $21,200 short to get "back
in trust." The Debtor further tells the Court that it currently
has a non-floored vehicle for which it has a buyer and believes it
can net near $18,000 just for that vehicle. The Debtor adds that it
has four vehicles, floored with Nextgear Capital, that is prepared
to be sold to another dealer and believes it can net approximately
$14,000 from this sale as well.
The Debtor tells the Court that it needs to be able to sell these
vehicles, and get back in trust, as well as payoff the liens for
each vehicle accepted as a trade-in. The Debtor says that should
it be unable to do so, significant harm could come to pre-petition
customers, and their lenders, who may not receive titles for their
vehicles or have the liens on their trade-in paid.
A full-text copy of the Debtor's Motion, dated October 28, 2016, is
available at
http://bankrupt.com/misc/WesternAutoSales2016_1601375jdp_16.pdf
About Western Auto Sales, LLC
Western Auto Sales, LLC filed a Chapter 11 petition (Bankr. D.
Idaho Case No. 16-01375) on October 25, 2016. The Petition was
signed by Todd Martell, managing member. The case is assigned to
Judge Jim D. Pappas. The Debtor's counsel is Jeffrey Philip
Kaufman, Esq., at the Law Offices of D. Blair Clark PC. At the
time of filing, the Debtor estimated assets at $1 million to $10
million and liabilities at $500,000 to $1 million.
A copy of the Debtor's list of 18 largest unsecured creditors is
available for free at http://bankrupt.com/misc/idb16-01375.pdf
YELLOWSTONE CLUB: Court Dismisses Founder's Suit vs. Byrne, et al.
------------------------------------------------------------------
Judge Richard G. Stearns of the United States District Court for
the District of Massachusetts allowed the defendants' motion to
dismiss the case captioned TIMOTHY BLIXSETH, v. SAMUEL BYRNE ET
AL., Civil Action No. 10-12182-RGS (D. Mass.).
The case is one of many involving the bankruptcy estate of the
Yellowstone Club, a luxury property development near Big Sky,
Montana, and its founders, Timothy Blixseth and Edra Blixseth, long
since divorced. Timothy alleged that the defendants CrossHarbor
Capital Partners, LLC, CIP Yellowstone Lending, and Samuel Byrne
(CrossHarbor's founder and managing partner) conspired with Edra to
ruin him financially. Timothy filed the action in the Central
District of California in April of 2010, asserting ten state-law
claims. That court ordered the case transferred to the District of
Massachusetts in November of 2010.
The defendants moved to dismiss pursuant to Fed. R. Civ. P.
12(b)(6), for want of a claim worthy of adjudication.
Judge Stearns opined that the dispute is ultimately one of limited
academic interest. The judge found that Timothy's complaint is a
hodgepodge of conspiratorial imaginings, conclusory and
contradictory assertions of fact, and overheated rhetoric. Judge
Stearns explained that to cross the plausibility threshold to
defeat a motion to dismiss, a complaint must "plead[] factual
content that allows the court to draw the reasonable inference that
the defendant is liable for the misconduct alleged." "Merely
reciting the elements of a cause of action adorned with the
prediction that each is or will be met during the course of
discovery does not suffice," said the judge.
A full-text copy of Judge Stearns' October 11, 2016 memorandum and
order is available at https://is.gd/K1jg4K from Leagle.com.
Samuel Byrne, Crossharbor Capital Partners, LLC, CIP Yellowstone
Lending LLC, are represented by:
Alan M. Reisch, Esq.
Derek B. Domian, Esq.
Martin M. Fantozzi, Esq.
GOULSTON, & STORRS, PC
400 Atlantic Avenue
Boston, MA 02110-3333
Tel: (617)482-1776
Fax: (617)574-4112
Email: areisch@goulstonstorrs.com
ddomian@goulstonstorrs.com
mfantozzi@goulstonstorrs.com
-- and --
James H. Steigerwald, Esq.
DUANE MORRIS LLP
30 South 17th Street
Philadelphia, PA 19103-4196
Tel: (215)979-1000
Fax: (215)979-1020
Email: jhsteigerwald@duanemorris.com
-- and --
Paul D. Moore, Esq.
100 High Street, Suite 2400
Boston, MA 02110-1724
Tel: (857)488-4200
Fax: (857)488-4201
Email: pdmoore@duanemorris.com
-- and --
Richard L. Seabolt, Esq.
Spear Tower
One Market Plaza, Suite 2200
San Francisco, CA 94105-1127
Tel: (415)957-3000
Fax: (415)957-3001
Email: rlseabolt@duanemorris.com
Does are represented by:
Paul D. Moore, Esq.
100 High Street, Suite 2400
Boston, MA 02110-1724
Tel: (857)488-4200
Fax: (857)488-4201
Email: pdmoore@duanemorris.com
About Yellowstone Mountain Club
Located near Big Sky, Montana, Yellowstone Mountain Club LLC --
http://www.theyellowstoneclub.com/-- is a private golf and ski
community with more than 350 members, including Bill Gates and Dan
Quayle. The Company was founded in 1999.
Yellowstone Club and its affiliates filed for Chapter 11
bankruptcy (Bankr. D. Montana, Case No. 08-61570) on Nov. 10,
2008. The Company's owner affiliate, Edra D. Blixseth, filed
a separate Chapter 11 petition on March 27, 2009 (Case No.
09-60452).
Attorneys at Bullivant Houser Bailey PC and Bekkedahl & Green
PLLC represented Yellowstone. The Debtors hired FTI Consulting
Inc. and Ronald Greenspan as CRO. The official committee of
unsecured creditors were represented by Parsons, Behle and
Latimer; and James H. Cossitt, Esq., as counsel. Credit Suisse,
the prepetition first lien lender, was represented by Skadden,
Arps, Slate, Meagher & Flom.
In June 2009, the Bankruptcy Court entered an order confirming
Yellowstone's Chapter 11 Plan. Pursuant to the Plan, CrossHarbor
Capital Partners LLC acquired equity ownership in the reorganized
Club for $115 million.
Marc S. Kirschner, Esq., was appointed the Trustee of the
Yellowstone Club Liquidating Trust created under the Plan.
[*] Milbank Partners Author 2nd Ed. LSTA's Credit Agreement Guide
-----------------------------------------------------------------
Global Leveraged Finance partners Michael Bellucci and Jerome
McCluskey of Milbank, Tweed, Hadley & McCloy LLP have published a
comprehensively updated manual for the global syndicated credit
market, The LSTA's Complete Credit Agreement Guide, Second Edition,
in conjunction with the Loan Syndications & Trading Association
(LSTA).
Seven years and one global financial crisis after the first edition
of the guide, Messrs. Bellucci and McCluskey and have produced a
one-stop resource, covering all layers of the international loan
market and reflecting the transformations and upheavals that have
shaped syndicated credit agreements since 2009. The first edition
quickly won an industry-wide reputation as the definitive
reference, and the new edition remains the only updated
single-volume guide to navigate the syndicated loan market and its
underlying credit agreements.
Andrew O'Brien, global head of Loan Capital Strategy for JPMorgan
Chase, calls the second edition: "an excellent resource that
provides clear explanation and rationale for the more complex
components of today's credit agreements. It is a very useful tool
for anyone involved in the loan market."
Thomas Finke, CEO of global investment manager Barings LLC, said:
"This is the comprehensive resource for deciphering the
complexities of a syndicated credit agreement. A must-have guide
for today's global loan market that unbundles the intricate layers
of credit terms, market trends, and global forces that together
impact the ultimate deal cut between the corporate borrower and its
lenders."
The book will be available in hardcover and electronically. In
addition to all eRetailers, the book can be purchased from:
-- Amazon
-- Barnes & Noble
The LSTA's Complete Credit Agreement Guide portrays the many
changes that have occurred among lenders as well as borrowers since
the recession and closely covers the evolving regulatory landscape
of credit agreement provisions. Never a simple or an easy process,
structuring and managing credit agreements are now more complicated
than ever -- whether for borrowers or lenders such as banks, hedge
funds, pension funds, insurance companies, and other financial
institutions.
"We believe this book is a cutting-edge resource for loan market
participants," said Mr. Bellucci, "as well as a historical guide to
the evolution of many standard credit agreement provisions and
practices. We are excited for its publication."
Mr. McCluskey added: "Since the last edition of the book was
published in 2009, there has been a tremendous amount of turbulence
and disruption in the syndicated loan markets. The standard credit
agreement has been a great indicator of the substantial changes
that have come to bear and we have tried to make sense of it all.
Our goal was to build upon the excellent foundation provided by the
first edition and to update what I believe is commonly known as the
go-to reference guide for the loan market."
Included among the timely topics in the more than 700-page guide
are:
-- What to look for in large sponsor-driven deals
-- The rise of "covenant lite" agreements for corporate
borrowers seeking fewer covenant restrictions
-- Yankee Loans
-- Commitments, Loans, and Letters of Credit
-- Interest and Fees
-- Amortization and Maturity
-- Conditions Precedent
-- Representations
-- Covenants
-- Guarantees and Security
-- Defaults and Enforcement
-- Interlender, Voting, and Agency issues
-- Defaulting Lenders
-- Assignments, Participations, and Disqualified Lender Lists
-- Borrower Rights
-- Regulatory Developments
About Milbank
Milbank, Tweed, Hadley & McCloy LLP -- http://www.milbank.com/--
is an international law firm that provides innovative legal
services to clients around the world. Founded in New York 150
years ago, Milbank has offices in Beijing, Frankfurt, Hong Kong,
London, Los Angeles, Munich, São Paulo, Seoul, Singapore, Tokyo
and Washington, DC. Milbank's lawyers collaborate across practices
and offices to help the world's leading commercial, financial and
industrial enterprises, as well as institutions, individuals and
governments, achieve their strategic objectives.
About The LSTA
The Loan Syndications and Trading Association --
http://www.lsta.org/-- is the trade association for the corporate
loan market, dedicated to advancing the interests of the overall
marketplace and promoting the highest degree of confidence for
investors in corporate loans. Founded in 1995, the LSTA undertakes
a wide variety of activities to develop policies and market
practices designed to promote a liquid and transparent marketplace
and to encourage cooperation and coordination among the parties
which facilitate transactions in loans and related claims.
[^] Recent Small-Dollar & Individual Chapter 11 Filings
-------------------------------------------------------
In re Charles Edward Bracknell and Sue Roberts Bracknell
Bankr. N.D. Ala. Case No. 16-71853
Chapter 11 Petition filed October 26, 2016
represented by: Herbert M Newell, III, Esq.
NEWELL & HOLDEN, LLC
E-mail: hnewell@newell-law.com
In re Abruzzo IV, LLC
Bankr. D. Colo. Case No. 16-20543
Chapter 11 Petition filed October 26, 2016
Filed Pro Se
In re Nela Josefina Chavez
Bankr. S.D. Fla. Case No. 16-24351
Chapter 11 Petition filed October 26, 2016
represented by: Stan Riskin, Esq.
E-mail: stan.riskin@gmail.com
In re Charles Edward Lincoln, III
Bankr. E.D. La. Case No. 16-12650
Chapter 11 Petition filed October 26, 2016
Filed Pro Se
In re Claudio Tarquinio
Bankr. D.N.J. Case No. 16-30422
Chapter 11 Petition filed October 26, 2016
represented by: Jonathan I. Rabinowitz, Esq.
RABINOWITZ, LUBETKIN & TULLY, LLC
E-mail: jrabinowitz@rltlawfirm.com
In re Holiday Supermarkets, Inc.
Bankr. E.D. Pa. Case No. 16-17541
Chapter 11 Petition filed October 26, 2016
See http://bankrupt.com/misc/paeb16-17541.pdf
represented by: David A. Scholl, Esq.
LAW OFFICE OF DAVID A. SCHOLL
E-mail: judgescholl@gmail.com
In re Empresas Perymar Inc.
Bankr. D.P.R. Case No. 16-08515
Chapter 11 Petition filed October 26, 2016
See http://bankrupt.com/misc/prb16-08515.pdf
represented by: Modesto Bigas Mendez, Esq.
BIGAS & BIGAS
E-mail: modestobigas@yahoo.com
In re Ivan Rene Moore
Bankr. C.D. Cal. Case No. 16-24226
Chapter 11 Petition filed October 27, 2016
Filed Pro Se
In re Brooks Furniture & Design, Inc.
Bankr. D. Colo. Case No. 16-20605
Chapter 11 Petition filed October 27, 2016
See http://bankrupt.com/misc/cob16-20605.pdf
represented by: Robert J. Shilliday, III, Esq.
VORNDRAN SHILLIDAY, P.C.
E-mail: rjs@shillidaylaw.com
In re Fefifo, LLC
Bankr. N.D. Ga. Case No. 16-22175
Chapter 11 Petition filed October 27, 2016
See http://bankrupt.com/misc/ganb16-22175.pdf
represented by: Charles N. Kelley, Jr., Esq.
KELLEY & CLEMENTS LLP
E-mail: ckelley@kelleyclements.com
In re Foggia Real Estate LLC
Bankr. D. Mass. Case No. 16-41832
Chapter 11 Petition filed October 27, 2016
See http://bankrupt.com/misc/mab16-41832.pdf
represented by: James P. Ehrhard, Esq.
EHRHARD & ASSOCIATES, P.C.
E-mail: ehrhard@ehrhardlaw.com
In re Integrity Millwork, Inc.
Bankr. W.D. Mo. Case No. 16-61061
Chapter 11 Petition filed October 27, 2016
See http://bankrupt.com/misc/mowb16-61061.pdf
represented by: David E. Schroeder, Esq.
DAVID SCHROEDER LAW OFFICES, PC
E-mail: bk1@dschroederlaw.com
In re The Millwork Shoppe, Inc.
Bankr. W.D. Mo. Case No. 16-61064
Chapter 11 Petition filed October 27, 2016
See http://bankrupt.com/misc/mowb16-61064.pdf
represented by: David E. Schroeder, Esq.
DAVID SCHROEDER LAW OFFICES, PC
E-mail: bk1@dschroederlaw.com
In re Joseph F. Wiggins, Jr. and Gloria H. Wiggins
Bankr. E.D.N.C. Case No. 16-05606
Chapter 11 Petition filed October 27, 2016
represented by: Trawick H Stubbs, Jr., Esq.
STUBBS & PERDUE, P.A.
E-mail: efile@stubbsperdue.com
In re Robin Renee Blackwell
Bankr. E.D. Pa. Case No. 16-17556
Chapter 11 Petition filed October 27, 2016
Filed Pro Se
In re LP Cleaners, Inc.
Bankr. E.D. Tenn. Case No. 16-33166
Chapter 11 Petition filed October 27, 2016
See http://bankrupt.com/misc/tneb16-33166.pdf
represented by: Keith L. Edmiston, Esq.
EDMISTON FOSTER
E-mail: edmistonfoster@outlook.com
In re MEDSERV Management Services LLC
Bankr. E.D. Va. Case No. 16-13670
Chapter 11 Petition filed October 27, 2016
See http://bankrupt.com/misc/vaeb16-13670.pdf
represented by: Bennett A. Brown, Esq.
THE LAW OFFICE OF BENNETT A. BROWN
E-mail: bennett@pcgalaxy.com
In re MNS Services, Inc.
Bankr. N.D. Ill. Case No. 16-34300
Chapter 11 Petition filed October 27, 2016
See http://bankrupt.com/misc/ilnb16-34300.pdf
represented by: Ben L Schneider, Esq.
SCHNEIDER & STONE
E-mail: ben@windycitylawgroup.com
In re Lindsay Jenkins
Bankr. N.D. Ill. Case No. 16-34314
Chapter 11 Petition filed October 27, 2016
represented by: Ted Smith, Esq.
SMITH ORTIZ PC
E-mail: ted.smith@smithortiz.com
In re Golden Harvest Culinary Homewood, LLC
Bankr. N.D. Ala. Case No. 16-04472
Chapter 11 Petition filed October 28, 2016
See http://bankrupt.com/misc/alnb16-04472.pdf
represented by: Cedrick D Coleman, Esq.
MAY LEGAL GROUP, LLC
E-mail: cdcoleman@maylegalgroup.com
In re Gloria Angelica Garcia
Bankr. C.D. Cal. Case No. 16-13118
Chapter 11 Petition filed October 28, 2016
represented by: Anthony Obehi Egbase, Esq.
LAW OFFICES OF ANTHONY O EGBASE & ASSOC
E-mail: info@aoelaw.com
In re Gerald R. Lowe and Jacqueline Lowe
Bankr. N.D. Cal. Case No. 16-31172
Chapter 11 Petition filed October 28, 2016
represented by: Martha J. Simon, Esq.
LAW OFFICES OF MARTHA J. SIMON
E-mail: mjsimon@mjsimonlaw.com
In re Giuseppi De Risi
Bankr. S.D. Fla. Case No. 16-24575
Chapter 11 Petition filed October 28, 2016
See http://bankrupt.com/misc/flsb16-24575.pdf
represented by: Dean J Trantalis, Esq.
TRANTALIS AND ASSOCIATES
E-mail: brian@trantalis.com
In re Lucrezia Trocchia De Risi
Bankr. S.D. Fla. Case No. 16-24577
Chapter 11 Petition filed October 28, 2016
represented by: Dean J Trantalis, Esq.
TRANTALIS AND ASSOCIATES
E-mail: brian@trantalis.com
In re Paradise Transitional Living Senter, LLC
Bankr. N.D. Ga. Case No. 16-69299
Chapter 11 Petition filed October 28, 2016
See http://bankrupt.com/misc/ganb16-69299.pdf
represented by: Leonard R. Medley, III, Esq.
MEDLEY & ASSOCIATES, LLC
E-mail: leonard@mkalaw.com
In re Lake Walker Community Health, LLC
Bankr. D. Md. Case No. 16-24337
Chapter 11 Petition filed October 28, 2016
See http://bankrupt.com/misc/mdb16-24337.pdf
represented by: Ronald J Drescher, Esq.
DRESCHER & ASSOCIATES
E-mail: ecfdrescherlaw@gmail.com
In re On-Call Staffing, Inc.
Bankr. N.D. Miss. Case No. 16-13823
Chapter 11 Petition filed October 28, 2016
See http://bankrupt.com/misc/msnb16-13823.pdf
represented by: J. Walter Newman, IV, Esq.
NEWMAN & NEWMAN
E-mail: wnewman95@msn.com
In re Elizabeth Chavarria
Bankr. D. Nev. Case No. 16-15818
Chapter 11 Petition filed October 28, 2016
represented by: Gina M. Corena, Esq.
LAW OFFICE OF GINA M. CORENA, ESQ.
E-mail: gina@lawofficecorena.com
In re Best Road View, LLC
Bankr. N.D.N.Y. Case No. 16-11968
Chapter 11 Petition filed October 28, 2016
See http://bankrupt.com/misc/nynb16-11968.pdf
represented by: Michael Leo Boyle, Esq.
TULLY RINCKEY PLLC
E-mail: mboyle@tullylegal.com
In re Rancho Real Grill & Cantina Corporation
Bankr. D.P.R. Case No. 16-08582
Chapter 11 Petition filed October 28, 2016
See http://bankrupt.com/misc/prb16-08582.pdf
represented by: Juan Carlos Bigas Valedon, Esq.
JUAN C BIGAS LAW OFFICE
E-mail: cortequiebra@yahoo.com
In re Hooper Timber Company, LLC
Bankr. W.D. Tenn. Case No. 16-29970
Chapter 11 Petition filed October 28, 2016
See http://bankrupt.com/misc/tnwb16-29970.pdf
represented by: Russell W. Savory, Esq.
BEARD & SAVORY, PLLC
E-mail: russ@bsavory.com
In re Fereydoon Aboosaidi and Shirindokht Aboosaidi
Bankr. W.D. Wash. Case No. 16-15478
Chapter 11 Petition filed October 28, 2016
represented by: Jeffrey B Wells, Esq.
WELLS AND JARVIS, P.S.
E-mail: paralegal@wellsandjarvis.com
In re Alexander David Shohet and Bernadine Francis Fried
Bankr. C.D. Cal. Case No. 16-24333
Chapter 11 Petition filed October 30, 2016
represented by: Sanaz S Bereliani, Esq.
BERELIANI LAW FIRM
E-mail: berelianilaw@gmail.com
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
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.
TCR subscribers have free access to our on-line news archive.
Point your Web browser to http://TCRresources.bankrupt.com/and use
the e-mail address to which your TCR is delivered to login.
*********
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 2016. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers. Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.
The TCR subscription rate is $975 for 6 months delivered via
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are $25 each. For subscription information, contact Peter A.
Chapman at 215-945-7000 or Nina Novak at 202-362-8552.
*** End of Transmission ***