/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/121206.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Thursday, December 6, 2012, Vol. 13, No. 243 Headlines A R G E N T I N A PARANA BANCO: S&P Affirms 'BB+/B' Global Issuer Credit Ratings * ARGENTINA: Fitch Details Report on Recent Neg. Rating Actions C A Y M A N I S L A N D S KINGSLYNN LTD: Shareholder Receives Wind-Up Report OSMOS PLAN: Shareholder Receives Wind-Up Report PRINCIPALIS LIMITED: Shareholders Receive Wind-Up Report RAWLINS VENTURES: Shareholder Receives Wind-Up Report RESIDENCE 202: Shareholder Receives Wind-Up Report SPRINGDALE INVESTMENT: Shareholder Receives Wind-Up Report WATERFALL NEUTRAL: Shareholders Receive Wind-Up Report WATERFALL VANILLA: Shareholders Receive Wind-Up Report C O L O M B I A BANCO DAVIVIENDA: Fitch Lowers LT Issuer Default Rating to 'BB+' J A M A I C A ALPART: Union Welcomes Planned Reopening M E X I C O SERVICIOS CORPORATIVOS: Fitch Affirms 'B+' Rating on $270MM Notes SIDERURGICA DEL TURBIO: S&P Lowers Corp. Credit Rating to 'CCC-' P A R A G U A Y TELEFONICA CELULAR: Fitch Assigns 'BB' Issuer Default Rating P U E R T O R I C O GULFCOAST IRREVOCABLE: Court Says Puerto Rico Improper Case Venue GULFCOAST IRREVOCABLE: Court Defers Ruling on FDIC Dismissal Bid MICHAEL JOSEPH SCARFIA: Puerto Rico Court Dismisses Case T R I N I D A D & T O B A G O CL FIN'L: Lascelles deMercado Plans Near $1 Billion Distillery X X X X X X X X * Upcoming Meetings, Conferences and Seminars - - - - - ================= A R G E N T I N A ================= PARANA BANCO: S&P Affirms 'BB+/B' Global Issuer Credit Ratings -------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB+/B' global scale and 'brAA' Brazilian national scale ratings on Parana Banco S.A. The outlook remains stable. The ratings on Parana Banco is based on the company's "weak" (as S&P's criteria define the term) business position, "strong" capital and earnings, "adequate" risk position, "below-average" funding, and "adequate" liquidity. "Our bank criteria use our BICRA economic and industry risk scores to determine a bank's anchor, the starting point in assigning an issuer credit rating. Our anchor for a commercial bank operating only in Brazil is 'bbb'. Our economic risk assessment reflects our opinion that economic improvements and cautious fiscal and monetary policies have strengthened the Brazilian economic authorities' flexibility in managing significant external shocks and potential distortions from the current expansionary phase in Brazil. These remain manageable, and a proactive stance from the central bank has contained them. With regard to industry risk, sound regulation and a good track record of regulators, and a high and stable share of core deposits, support the Brazilian banking industry. At the same time, we consider the banking sector's moderate risk appetite as a positive in our assessment," S&P said. "The stable outlook reflects our expectation that Paran Banco will maintain its low market position in Brazil's financial system, as well as its strong capitalization, manageable asset quality, and 'adequate' liquidity during the next two years," said Standard & Poor's credit analyst Cynthia Cohen Freue. "We could raise the ratings if the bank strengthens its capital position, leading to a projected RAC ratio of more than 15. On the other hand, we could lower the ratings if the bank's asset quality or liquidity profile deteriorates significantly, or if its RAC ratio falls to less than 10%," S&P said. * ARGENTINA: Fitch Details Report on Recent Neg. Rating Actions --------------------------------------------------------------- Fitch Ratings issued a special report titled 'Argentina's Weakening Credit Profile' detailing the rationale behind the agency's recent negative rating actions on Argentina. On Nov. 27, Fitch downgraded Argentina's ratings as follows: -- Long-term foreign currency Issuer Default Rating (IDR) to 'CC' from 'B'; -- Short-term IDR to 'C' from 'B'; -- Securities issued under international law to 'CC' from 'B'; -- Foreign and local currency denominated securities issued under Argentine law to 'B-' from 'B'; -- Local currency IDR to 'B-' from 'B' with a Negative Outlook; -- Country Ceiling to 'B-' from 'B'. ========================== C A Y M A N I S L A N D S ========================== KINGSLYNN LTD: Shareholder Receives Wind-Up Report -------------------------------------------------- On Nov. 23, 2012, the sole shareholder of Kingslynn Ltd received the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Commerce Corporate Services Limited Telephone: 949 8666 Facsimile: 949 0626 PO Box 694 Grand Cayman Cayman Islands OSMOS PLAN: Shareholder Receives Wind-Up Report ----------------------------------------------- On Nov. 23, 2012, the sole shareholder of Osmos Plan Limited received the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Commerce Corporate Services Limited Telephone: 949 8666 Facsimile: 949 0626 PO Box 694 Grand Cayman Cayman Islands PRINCIPALIS LIMITED: Shareholders Receive Wind-Up Report -------------------------------------------------------- On Nov. 23, 2012, the shareholders of Principalis Limited received the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Intertrust Corporate Services (Cayman) Limited 87 Mary Street, George Town Grand Cayman KY1-9002 Cayman Islands c/o Jennifer Chailler Telephone: (345) 814 6847 RAWLINS VENTURES: Shareholder Receives Wind-Up Report ----------------------------------------------------- On Nov. 21, 2012, the shareholder of Rawlins Ventures, Ltd. received the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Ogier c/o Michael Lubin Telephone: (345) 815-1793 Facsimile: (345) 949-9877 RESIDENCE 202: Shareholder Receives Wind-Up Report -------------------------------------------------- On Nov. 8, 2012, the shareholder of Residence 202 Ltd. received the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Michael Ryan P.O Box 32319 Grand Cayman KY1-1209 Cayman Islands SPRINGDALE INVESTMENT: Shareholder Receives Wind-Up Report ---------------------------------------------------------- On Nov. 21, 2012, the shareholder of Springdale Investment Fund received the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Ogier c/o Michael Lubin Telephone: (345) 815-1793 Facsimile: (345) 949-9877 WATERFALL NEUTRAL: Shareholders Receive Wind-Up Report ------------------------------------------------------ On Nov. 22, 2012, the shareholders of Waterfall Neutral Offshore Ltd received the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: DMS Corporate Services Ltd c/o Bernadette Bailey-Lewis Telephone: (345) 946 7665 Facsimile: (345) 946 7666 dms House, 2nd Floor P.O. Box 1344 Grand Cayman KY1-1108 Cayman Islands WATERFALL VANILLA: Shareholders Receive Wind-Up Report ------------------------------------------------------ On Nov. 22, 2012, the shareholders of Waterfall Vanilla Master Fund Ltd. received the liquidator's report on the company's wind- up proceedings and property disposal. The company's liquidator is: DMS Corporate Services Ltd c/o Bernadette Bailey-Lewis Telephone: (345) 946 7665 Facsimile: (345) 946 7666 dms House, 2nd Floor P.O. Box 1344 Grand Cayman KY1-1108 Cayman Islands =============== C O L O M B I A =============== BANCO DAVIVIENDA: Fitch Lowers LT Issuer Default Rating to 'BB+' ---------------------------------------------------------------- Fitch Ratings has downgraded and removed from Rating Watch Negative Banco Davivienda (Costa Rica), S.A., Banco Davivienda Salvadoreno, S.A., and Inversiones Financieras Davivienda, S.A.. The Rating Outlooks are Stable. The rating actions follow the completion of the Colombian Banco Davivienda, S.A.'s (Davivienda) acquisition of HSBC's operations in Costa Rica, El Salvador, and Honduras. The acquisition agreement was announced early this year (please refer to 'Fitch Places HSBC's Bank Subsidiaries in Costa Rica and El Salvador on Rating Watch Negative', Jan. 27th, 2012 at www.fitchratings.com). Davivienda is the new source of expected support for its Central American subsidiaries, should it be required. The recently acquired entities are considered by Fitch as Strategically Important to Davivienda, according to Fitch's Criteria: 'Rating FI Subsidiaries and Holding Companies' listed below. Such classification is based on Fitch's view on the role of those subsidiaries to foster the expansion and diversification of Davivienda in Central America, the reputational risk resulting from the shared franchise and commercial name, and the intentions of the new shareholder to promote a well-balanced business plan to the recently acquired operations in order to enhance their contribution to the consolidated business. Fitch expects that these subsidiaries will provide a recurring and meaningful share of revenues to the consolidated entity over the medium-term. Davivienda's current Long-Term Foreign Currency Issuer Default Rating (IDR) of 'BBB-' with a Stable Outlook, is lower than HSBC Holdings plc's 'AA', Negative Outlook. Davivienda's current ratings were not reviewed in this rating action as where affirmed on Jan. 27th, 2012 after the impact of the transaction was assessed by Fitch. Banco Davivienda (Costa Rica), S.A., Banco Davivienda Salvadoreno, S.A., and Inversiones Financieras Davivienda, S.A.'s current ratings are driven by the support they would receive from Davivienda, should it be required, rather than by their intrinsic credit quality. The Stable Outlooks reflect that Fitch does not anticipate substantial changes in Davivienda's ability and propensity to support its new subsidiaries. The Honduran bank's national ratings are unaffected as the potential support it could receive from Davivienda allows it to maintain its long-term rating at 'AA+(hnd)'. Davivienda is the third largest bank in Colombia. It is a universal bank operating across all business segments with a particular strength in the consumer business. The bank is controlled by Sociedades Bolivar, which has interests in the construction and insurance industries in Colombia. After the completion of the aforementioned transactions, Davivienda's new operations in Central America will represent around 18% of its consolidated assets. The subsidiaries in El Salvador, Costa Rica, and Honduras are locally self-funded, with large participation of retail deposits, and sufficient capital according to the regulatory guidelines in each country. Fitch takes the following rating actions as indicated: Banco Davivienda (Costa Rica), S.A. -- Long-term National Rating downgraded to 'AA+(cri)' from 'AAA(cri)'; Outlook Stable; removed from Watch Negative; -- Senior Unsecured Debt Long-term National Rating downgraded to 'AA+(cri)' from 'AAA(cri)'; removed from Rating Watch Negative; -- Short-term National Rating affirmed at 'F1+(cri)'; removed from Rating Watch Negative. Banco Davivienda Salvadoreno, S.A. -- Long-term IDR downgraded to 'BB+' from 'BBB-'; Outlook Stable; removed from Rating Watch Negative; -- Short-term IDR downgraded to 'B' from 'F2'; removed from Rating Watch Negative; -- Support downgraded to '3' from '2'; removed from Rating Watch Negative; -- Long-term National Rating downgraded to 'AA+(slv)' from 'AAA(slv)'; Outlook Stable; removed from Rating Watch Negative; -- Senior Unsecured Debt Long-term National Rating downgraded to 'AA+(slv)' from 'AAA(slv)'; removed from Rating Watch Negative; -- Short-term National Rating affirmed at 'F1+(slv)'; removed from Rating Watch Negative; -- Senior Secured Debt Long-term National Rating affirmed at 'AAA(slv)'; removed from Rating Watch Negative; -- Senior Unsecured Debt Short-term National Rating affirmed at 'F1+(slv)'; removed from Rating Watch Negative; -- Senior Secured Debt Short-term National Rating affirmed at 'F1+(slv)'; removed from Rating Watch Negative. Inversiones Financieras Davivienda, S.A. -- Long-term National Rating downgraded to 'AA+(slv)' from 'AAA(slv)'; Outlook Stable; removed from Rating Watch Negative; -- Short-term National Rating affirmed at 'F1+(slv)'; removed from Rating Watch Negative. ============= J A M A I C A ============= ALPART: Union Welcomes Planned Reopening ---------------------------------------- RJR News reports that the main union representing workers in the mining sector has welcomed news that an announcement will be made soon on the reopening of the Alumina Partners of Jamaica bauxite and alumina plant in St. Elizabeth. Following a meeting with UC Rusal, the majority shareholders and operators of the plant, Minister of Science, Technology, Energy and Mining, Phillip Paulwell, expressed confidence that Alpart will resume operations soon, according to RJR News. The report relates that Mr. Paulwell said it is urgent that the plant is re-opened so that jobs can be provided. President of the National Workers' Union, NWU, Vincent Morrison, is hopeful that Alpart will be up and running in 2013. Alumina Partners of Jamaica, also known as Alpart, is a company that owns and operates a bauxite refinery in Nain, Jamaica. Alpart was founded in 1969 as a joint venture by Kaiser Aluminum, Reynolds Aluminum, and Anaconda. Alpart exports 1.65 million tons of alumina overseas per year, and earned gross revenues of US$1.3 billion in 2007. As of 2008, Alpart is 65% owned by Rusal and 35% owned by Norsk Hydro. * * * As reported in the Troubled Company Reporter-Latin America on May 19, 2009, RadioJamaica said Alpart's mining and refinery operations officially came to a halt on May 15. The report related Alpart said it will send home 900 permanent employees in the process amid a 60% decline in alumina product prices since July 2008. Mr. Fabrini, as cited by RadioJamaica, said the temporary shutdown will allow the plant to prepare for future developments. Although the company took steps to maintain the operations even at reduced capacity, circumstances still left the company with no other choice but to shutdown, Mr. Fabrini added. Mr. Fabrini, RadioJamaica noted, said the company will continue to meet its obligations to employees and the surrounding communities in a timely manner. =========== M E X I C O =========== SERVICIOS CORPORATIVOS: Fitch Affirms 'B+' Rating on $270MM Notes ----------------------------------------------------------------- Fitch Ratings has affirmed Servicios Corporativos Javer, S.A.P.I. de C.V.'s ratings as follows: -- Foreign currency Issuer Default Rating (IDR) at 'B'; -- Local currency IDR at 'B'; -- USD270 million senior unsecured notes at 'B+/RR3'. The Rating Outlook remains Negative. The ratings incorporate the recent announcement that Javer and Empresas ICA, S.A.B. de C.V. (ICA) have entered into a definitive agreement to combine their homebuilding assets in Mexico. Javer will acquire the assets and operating liabilities related to 20 affordable housing development projects being developed by ICA through its ViveICA subsidiary in exchange for newly issued shares of stock representing a 23% ownership interest in Javer. The company will also assume MXN600 million of secured debt associated with the acquired developments. The Negative Outlook reflects the concern that the announced transaction could be negative for Javer's credit quality due to potential deterioration in the company's working capital cycle during the integration process of the acquired developments, and continued declining EBITDA margins. The ratings continue to reflect Javer's regional market position in northeastern Mexico with a firm leadership presence in the state of Nuevo Leon, its consistent business strategy oriented to the low-income housing segment, and adequate land reserve. The ratings are constrained by Javer's incipient capacity to generate free cash flow (FCF) through the economic cycle and high leverage levels. The 'B+/RR3' ratings of the company's unsecured public debt reflect good recovery prospects in the range of 50%-70% given default. Positively factored in the ratings, is the company's FCF trend achieved in the last quarters. During the LTM September 2012, the company maintained a sound financial strategy based on conservative growth targets reducing working capital needs and achieving slightly-positive FCF generation with low levels of short-term debt. The company's LTM September 2012 revenues, FCF generation, and FCF margin reached levels of MXN5.4 billion, MXN88 million, and 1.6%, respectively. The proposed transaction will improve Javer's geographic and asset diversification. Post-acquisition, Javer will consolidate its position as one of the main players in the Mexican homebuilding industry by increasing the numbers of developments to 46 in 11 states nationwide, and reaching annual unit sales of approximately 25 thousand, 7 thousand coming from the acquired developments. The main credit concern is related to the potential deterioration in the company's working capital cycle due to the integration of the acquired operations that could require additional working capital investments as post transaction the company is expected to increase revenues by approximately 40% during the first year of operations. The company is planning to refinance the MXN600 million debt assumed with the transaction through a term loan during the next few weeks. Eventually Javer will be looking - depending on market conditions - to execute another reopening to add this debt to its USSD270 million secured notes. The transaction is not expected to add leverage. Javer had MXN3.5 billion of total adjusted debt as of Sept. 30, 2012, it was composed primarily of the USD270 million unsecured notes due in 2021, this amount included the 18% premium the company paid during the last exchange debt offering that occurred in 2011. During the latest 12 months (LTM) ended Sept. 30, 2012, the company generated MXN906 million of EBITDA, with an EBITDA margin of 16.9%. These figures resulted in Javer's total gross leverage, measured by the debt-to-EBITDA ratio, of 3.9x for the LTM September 2012. The transaction will add incremental revenues, EBITDA, and debt of approximately MXN2 billion, MXN232 million, and MXN600 million, respectively. On a pro forma basis, the company's gross leverage is estimated at 3.6x, consolidated revenues around MXN7.5 billion and an EBITDA margin of 15%. Liquidity and FCF Generation Main Rating Drivers: The ratings are expected to be driven by the development -- during the next quarters -- of the company's liquidity, FCF generation, and gross leverage during the process of integrating the acquired developments. A downgrade could be triggered by a deterioration of the company's credit protection measures and cash position due to weak operational results, deterioration in FCF generation driven by increasing working capital needs, and declining EBITDA margins. Expectations by Fitch of total adjusted debt to EBITDA being consistently at or beyond 4.5x will likely result in a downgrade. Conversely, stable operational performance reflecting a smoothly integration process of the new acquired developments resulting in FCF from neutral to slightly positive, in addition to the expectation that total adjusted debt to EBITDA will remain below 4.0x over time, while maintaining adequate liquidity and a manageable debt payment schedule, can trigger a revision of the Rating Outlook to Stable. SIDERURGICA DEL TURBIO: S&P Lowers Corp. Credit Rating to 'CCC-' ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its long-term corporate credit and senior unsecured ratings on Siderurgica del Turbio, S.A. (Sidetur) to 'CCC-' from 'B-'. "We are also placing our ratings on CreditWatch with negative implications," S&P said. "In October 2012, the government of the Bolivarian Republic of Venezuela (B+/Stable/B) took control of Sidetur's operating assets, but it hasn't announced the amount or time of the compensation. The government also required the transfer of all funds in the company's local currency bank accounts. The U.S. dollar denominated reserve account associated with Sidetur's notes due 2016 was not affected," S&P said. "In our opinion, the expropriation of Sidetur's assets could result in debt acceleration depending on the legal interpretation of either the change-of-control or the sale-of-assets clauses established under the indenture of its notes, but we understand that any conclusion hasn't been reached yet," said Standard & Poor's credit analyst Bernardo Gonzalez. "As of June 30, 2012, the notes' outstanding amount was around $78.8 million. Apart from the notes reserve account, which totaled around $7 million as of June 30, 2012, Sidetur will rely entirely on the compensation from the government to pay down its debt. Furthermore, we believe the level of uncertainty about the company's ability to meet its financial obligations within the next six months is high. However, we understand that the reserve account will cover the next principal and coupon payments-- scheduled for Jan. 20, 2013, and April 20, 2013, respectively-- providing Sidetur with some flexibility to receive the compensation, assuming it's sufficient and the debt is not accelerated before government's payment," added Mr. Gonzalez. "The negative CreditWatch listing reflects the possibility of another downgrade if the company's debt is accelerated before it receives compensation, resulting in failure to meet its obligations. We expect to resolve the CreditWatch as more clarity about amount and time of compensation is obtained, or if Sidetur's debt is accelerated," S&P said. =============== P A R A G U A Y =============== TELEFONICA CELULAR: Fitch Assigns 'BB' Issuer Default Rating ------------------------------------------------------------ Fitch Ratings has assigned the following initial ratings to Telefonica Celular del Paraguay S.A. (Telecel): -- Foreign currency Issuer Default Rating (IDR) 'BB'; -- USD300 million senior unsecured notes due 2022 'BB'. The Rating Outlook is Stable. The proceeds of the issuance will be used to repay a USD150 million bridge loan raised for the acquisition of Cablevision with the balance serving to finance capital expenditures and potential spectrum license costs. Telecel's ratings reflect its strong financial profile, underpinned by low leverage and solid cash flow generation. The ratings also consider the company's leading market position in mobile and Pay-TV services in Paraguay; strong brand recognition; extensive network coverage; diverse service offering; and low regulatory risk. The ratings are constrained by the risks associated with its operation in Paraguay, which are somewhat mitigated by the parent company's (Millicom International Cellular S.A. (MIC)) ability to provide access to hard currency, if required. Telecel's credit quality is also tempered by an increasing competitive environment and limited geographic diversification. The ratings factor in Telecel's relationship with its parent company, which fully owns it. Telecel benefits from synergies related to MIC's larger scale and management expertise, but the ratings also consider Telecel's payment of dividends and management fees to the parent. Positively, MIC presents a solid consolidated financial profile. For the last 12 months (LTM) ended Sep. 30, 2012 MIC had USD4.7 billion in revenues, USD2 billion in EBITDA, funds flow from operations (FFO) of USD1.5 billion, on balance sheet indebtedness of USD2.8 billion and cash balances of USD1 billion. Low Leverage Post Cablevision Acquisition Fitch expects Telecel's net leverage at low level, below 1.0x, even after the acquisition of the Pay-TV company Cablevision in October of 2012. Since 2008 the company has had a positive net cash position or a net debt-to-EBITDA ratio close to zero, despite substantial dividend pay outs in recent years. During the last 12 months (LTM) ended on Sept. 30, 2012, Telecel reported a total debt-to-EBITDA ratio of 0.7x and net debt-to-EBITDA ratio of 0.5x. According to Fitch's calculations, cash did not include the restricted cash of PGY669 billion, which was used in October for the payment for Cablevision. This company was acquired without the assumption of debt, while revenues and EBITDA were USD44 million and USD17 million, respectively, in 2011. Margins Should Remain Strong Fitch expects EBITDA margins to trend downwards towards the 45%- 50% level in the medium term due to the consolidation of the lower margin Pay-TV business and due to the competitive environment. Telecel's EBITDA margin after fees paid to Millicom has ranged between 55%-60% in the last five years, which compares favorably with its peers in Latin America. The company's net revenues have benefited from a growing customer base and increasing value-added services participation. In the LTM ended Sept. 30, 2012, net revenues of PYG2,698 billion were 9.9% higher than in 2011. Following the same increasing trend, EBITDA was PYG1,485 billion in the LTM ended Sept. 30, 2012, with a high EBITDA margin of 55%. Pre-dividend free cash flow is expected to remain positive and sufficient to cover debt service, with the remaining portion to be distributed to shareholders as dividends. In the LTM ended Sept. 30, 2012, cash flow from operations (CFFO) was PYG1,415 billion, with investments of PYG318 billion and higher dividends of PYG1,138 billion leading to a slight negative FCF of PYG41 billion. Annual capital expenditures should increase to approximately PYG450 billion in 2012 and PYG500 billion-PYG650 billion from 2013 to 2016 due to growth opportunities. Leading Market Position; Cablevision Acquisition Boosts Profile Telecel's ratings are supported by its strong market position as the main operator in the Paraguayan telecom sector. The company has extensive network coverage in the country and a diverse service offering. Although competition has increased in recent years and number portability is expected to start on December 2012, market share in the mobile segment remains robust at 57%. Telecel's business position was reinforced after the acquisition of Cablevision, with an 89% market share of Pay-TV and an important fixed broadband operation. The company's strategy in terms of increasing bundle services offerings including mobile, broadband and Pay-TV is positive in terms of client loyalty. Manageable Liquidity Liquidity is underpinned by Telecel's cash balances, strong operational cash generation and a manageable debt maturity profile. As of Sept. 30, 2012, total debt of PYG1,073 billion had a 69% maturity concentration on short-term (PYG739 billion). Once the USD300 million (PYG1,339 billion) bond issuance is concluded and the bridge loan is refinanced, Telecel will present a long- term debt profile, with available cash and marketable of PYG381 billion covering, on a pro forma basis, PYG360 billion of debt maturing until 2016. Although there is an exposure to foreign currency as the debt is dollar-denominated and there is no hedge, the low leverage mitigates this risk. Fitch expects Telecel to remain with strong short-term debt coverage ratios. Key Rating Drivers: A negative rating action could be triggered by leveraged acquisitions, a substantial increase in capital expenditures or deteriorating cash flow generation that turns out in a material change in the company's capital structure. A positive rating action is constrained by its operation only in Paraguay. ===================== P U E R T O R I C O ===================== GULFCOAST IRREVOCABLE: Court Says Puerto Rico Improper Case Venue ----------------------------------------------------------------- Bankruptcy Judge Enrique S. Lamoutte ruled that Puerto Rico is an improper venue for the Chapter 11 cases of Gulfcoast Irrevocable Trust I and its affiliated trusts. Judge Lamoutte, however, declined to transfer the cases to the Middle District of Florida, Tampa Division, upon the behest of the Federal Deposit Insurance Corporation, as receiver for Westernbank Puerto Rico, until the Court has resolved the FDIC's request to dismiss the Debtors' cases. Both the FDIC-R and the Debtors agree that the proper venue of these cases lies in the place which constitutes their principal place of business. The FDIC-R contends that the Debtors' principal place of business is in Clearwater, Florida, as there is where the trustee resides and where most decisions are made. The Debtors take the position that the principal place of business is in Puerto Rico as that is where their affiliates operate. Judge Lamoutte noted that "Courts differ on how to determine the debtor's principal place of business. Many courts have held that the principal place of business is determined by using the `major business decisions' test and not the `operational' test. The former focuses on the place where the major decisions affecting the debtor's business are made, and the latter focuses on where the debtor's day-to-day business is conducted," Judge Lamoutte said, citing Hon. Nancy C. Dreher and Hon. Joan Feeney, Bankruptcy Law Manual Sec.2:35 (5th ed. 2012). According to Judge Lamoutte, in the Trusts' cases, the decisions are made in Clearwater, Florida; and the monthly reports of operation do not reflect any significant operation. Therefore, under either test, Clearwater, Florida, is the principal place of business. "The court concludes that the petitions were filed in an improper venue. However, the final determination as to whether the same should be transferred to the U.S. Bankruptcy Court for the Middle District of florida, Tampa Division, is held in abeyance until a final determination is made on the FDIC-R's motion to dismiss," Judge Lamoutte held in in a Nov. 30, 2012 Opinion and Order available at http://is.gd/sW2Nv5from Leagle.com. About Gulfcoast Irrevocable Trust Three business trusts owned by Michael J. Scarfia filed for Chapter 11 protection in Old San Juan, Puerto, Rico on Aug. 10, 2012. Gulfcoast Irrevocable Trust I (Case No. 12-06338) serves as the holding company and own 100% of the shares of Gibraltar Construction Company, Inc., Gibraltar Development Corp., and Gulfcoast Contractors, Inc. Gulfcoast Irrevocable Trust XIV (Case No. 12-06339) serves as holding company and owns 50% of the shares of Yasscar Caguas Development, Corp. and Yasscar Development, Corp. Gulfcoast Irrevocable Trust XIX (Case No. 12-06340) is the holding company and owns 49.5% of the shares of JM Ponce III, LP, S.E. The corporations owned by the Debtors, as a holding company and owner of shares, do business in Puerto Rico. The Debtors as a separate legal entity are not actually operating as a business as their monthly report of operations on file show no or minimal expenses or cash flow. The Trusts are merely holding companies of affiliates operating in Puerto Rico. Gulfcoast Irrevocable Trust I estimated under $10 million in assets but more than $100 million in debts in its bare-bones Chapter 11 petition. An affiliate, Sabana Del Palmar, Inc., which owns Mirabella Village & Club, filed a Chapter 11 petition (Bankr. D.P.R. Case No. 12-06177) on Aug. 5, 2012. GULFCOAST IRREVOCABLE: Court Defers Ruling on FDIC Dismissal Bid ---------------------------------------------------------------- Bankruptcy Judge Enrique S. Lamoutte deferred ruling on the request of the Federal Deposit Insurance Corporation, as receiver for Westernbank Puerto Rico, to dismiss the Chapter 11 cases of Gulfcoast Irrevocable Trust I and two affiliated trusts. FDIC-R argues the debtors are not valid business trusts and are, thus, not authorized to file a bankruptcy petition. The debtors opposed, alleging that they meet the flexible criteria required to be considered a business trust. Judge Lamoutte said the fact that the Debtors may own the total or a percentage of shares in corporations that have filed for or may be eligible to file a bankruptcy petition does not mean that the Trusts, as holders of the shares, are themselves eligible to file a bankruptcy petition. Notwithstanding, as argued by the debtors, a determination that a trust is or is not a business trust is fact specific and must be based on the totality of the circumstances. Consequently, the Court said FDIC-R has met its initial burden of showing that the trusts are not business trusts based on a reading of the trust agreements. However, the Debtors should be afforded an opportunity to present evidence to the contrary. "At this time the court will not schedule an evidentiary hearing. The court orders the Debtors to file a memorandum detailing what are the facts it would present to rebut the conclusion that debtors are not business trusts. Each factual proffer must include a sworn statement summarizing the testimony of an identified witness or a document in support thereof. ebtors shall file their memorandum and proffer of evidence within 21 days. FDIC-R shall reply within 14 days thereafter," Judge Lamoutte said. "The court may schedule an actual hearing if the duly supported factual proffers so warrant." A copy of Judge Lamoutte's Nov. 30, 2012 Opinion and Order is available at http://is.gd/CPV8nBfrom Leagle.com. About Gulfcoast Irrevocable Trust Three business trusts owned by Michael J. Scarfia filed for Chapter 11 protection in Old San Juan, Puerto, Rico on Aug. 10, 2012. Gulfcoast Irrevocable Trust I (Case No. 12-06338) serves as the holding company and own 100% of the shares of Gibraltar Construction Company, Inc., Gibraltar Development Corp., and Gulfcoast Contractors, Inc. Gulfcoast Irrevocable Trust XIV (Case No. 12-06339) serves as holding company and owns 50% of the shares of Yasscar Caguas Development, Corp. and Yasscar Development, Corp. Gulfcoast Irrevocable Trust XIX (Case No. 12-06340) is the holding company and owns 49.5% of the shares of JM Ponce III, LP, S.E. The corporations owned by the Debtors, as a holding company and owner of shares, do business in Puerto Rico. The Debtors as a separate legal entity are not actually operating as a business as their monthly report of operations on file show no or minimal expenses or cash flow. The Trusts are merely holding companies of affiliates operating in Puerto Rico. Gulfcoast Irrevocable Trust estimated under $10 million in assets but more than $100 million in debts in its bare-bones Chapter 11 petition. An affiliate, Sabana Del Palmar, Inc., which owns Mirabella Village & Club, filed a Chapter 11 petition (Bankr. D.P.R. Case No. 12-06177) on Aug. 5, 2012. MICHAEL JOSEPH SCARFIA: Puerto Rico Court Dismisses Case -------------------------------------------------------- Michael Joseph Scarfia received a double black-eye Friday when a bankruptcy judge in Puerto Rico ruled that his Chapter 11 petition was improperly filed in that district, and that the bankruptcy case should be dismissed. The Federal Deposit Insurance Corporation, as receiver for Westernbank Puerto Rico, sought to dismiss or transfer venue of the chapter 11 proceeding to the U.S. Bankruptcy Court for the Middle District of Florida, Tampa Division. The FDIC-R contends that Mr. Scarfia's principal place of business is in Clearwater, Florida, as there is where Mr. Scarfia resides and where most decisions are made. Westernbank Puerto Rico granted loans to entities controlled by Mr. Scarfia, including roughly $100,000,000 in default. Mr. Scarfia argues that the District of Puerto Rico is the proper venue because the FDIC has sued Mr. Scarfia as guarantor of loans made to corporations engaged as developers in the District of Puerto Rico; and that the loans which he guarantees were executed in Puerto Rico. According to Judge Enrique S. Lamoutte, the fact that there may be entities in Puerto Rico that received loans guaranteed by Mr. Scarfia and that some may be in bankruptcy does not translate in proper venue for Mr. Scarfia. "The filing of a petition by a parent does not have the effect of filing a petition for bankruptcy on behalf of subsidiary corporations.[] Each corporate entity is separate for bankruptcy purposes," Judge Lamoutte cites Hon. Nancy C. Dreher and Hon. Joan Feeney, Bankruptcy Law Manual Sec. 3.4 (5th ed. 2012). "After considering the totality of the circumstances, including debtor's residence, domicile, location of his scheduled assets, scheduled source of his income, and disclosed location of his employer, the court concludes that the District of Puerto Rico is not the proper venue. Furthermore, his asset to liabilities ratio ($108,932/$135,029,020, that is, .08%) moves the court to conclude that dismissal is the appropriate remedy," Judge Lamoutte continued. A copy of the Court's Nov. 30, 2012 Opinion and Order is available at http://is.gd/8fsfd2from Leagle.com. About Michael Joseph Scarfia Michael Joseph Scarfia filed for Chapter 11 bankruptcy (Bankr. D. P.R. Case No. 12-06346) on Aug. 12, 2012. The petition discloses that the debtor is a resident and is domiciled in Clearwater, Florida, and that his principal place of business is "Outside Home State." His Schedule A (Real Property) lists a condominium in Clearwater with a current value of $83,550. Schedule I (Current Income of Individual Debtor) discloses that the debtor has been employed by Gibraltar Group, Inc. for 20 years and is the president of Gibraltar Group, Inc. The address of his employer is 1079 Cephas Drive, in Clearwater. The summary of schedules filed on Aug. 27 shows Mr. Scarfia has total assets of $108,932 and total liabilities of $135,029,020. Schedule F lists unsecured creditors in the amount of $135,020,020, all of which are on account of personal guarantees. Schedule H lists the following as co-debtors: JM Ponce III, LP, SE; MJS Las Croabas Properties, Inc.; Museum Towers, LP; Sabana del Palmar, Inc.; Yasscar Development Corp.; Gulfcoast Irrevocable Trust XIX; Gulfcoast Irrevocable Trust XIV; Gulfcoast Irrevocable Trust VII; Gulfcoast Irrevocable Trust IV; Gulfcoast Irrevocable Trust XI; Gulfcoast Irrevocable Trust XIII; Gulfcoast Irrevocable Trust; Gulfcoast Irrevocable Trust XV; Gulfcoast Irrevocable Trust XXVIII; Gulfcoast Irrevocable Trust XVI; Gibraltar Development Corp.; FB Boswell, Inc.; Isla Completa, Corp.; Puerto del Este, Inc.; SFN Arecibo LP, SE; Yasscar Caguas Development Corp. and SF Ponce II LLC. The co-debtors have the same Clearwater, Florida address. About Gulfcoast Irrevocable Trust Three business trusts owned by Michael J. Scarfia filed for Chapter 11 protection in Old San Juan, Puerto, Rico on Aug. 10, 2012. Gulfcoast Irrevocable Trust I (Case No. 12-06338) serves as the holding company and own 100% of the shares of Gibraltar Construction Company, Inc., Gibraltar Development Corp., and Gulfcoast Contractors, Inc. Gulfcoast Irrevocable Trust XIV (Case No. 12-06339) serves as holding company and owns 50% of the shares of Yasscar Caguas Development, Corp. and Yasscar Development, Corp. Gulfcoast Irrevocable Trust XIX (Case No. 12-06340) is the holding company and owns 49.5% of the shares of JM Ponce III, LP, S.E. The corporations owned by the Debtors, as a holding company and owner of shares, do business in Puerto Rico. The Debtors as a separate legal entity are not actually operating as a business as their monthly report of operations on file show no or minimal expenses or cash flow. The Trusts are merely holding companies of affiliates operating in Puerto Rico. Gulfcoast Irrevocable Trust I estimated under $10 million in assets but more than $100 million in debts in its bare-bones Chapter 11 petition. An affiliate, Sabana Del Palmar, Inc., which owns Mirabella Village & Club, filed a Chapter 11 petition (Bankr. D.P.R. Case No. 12-06177) on Aug. 5, 2012. =============================== T R I N I D A D & T O B A G O =============================== CL FIN'L: Lascelles deMercado Plans Near $1 Billion Distillery -------------------------------------------------------------- Jamaica Gleaner reports that Lascelles deMercado plans to build a new distillery next year at a cost of nearly J$1 billion amid the finalization of its acquisition by the Italy-based Campari Group. Construction will last for two years and offer two decades of useful life, according to Jamaica Gleaner. The report relates that the board of directors of a Lascelles subsidiary, which was not identified, approved the spending of half the funding for the distillery, according to notes accompanying the just-released financials. Wines and spirits operations are conducted by Lascelles' subsidiary J. Wray & Nephew, which produces the trademark Appleton rum. According the financials, the report notes that the board of directors approved but had not committed the capital expenditure of approximately US$5.9 million in respect of phase one of the project, pursuant to meeting certain requirements of the National Environment and Planning Agency relating to its license to operate a distillery. Jamaica Gleaner discloses that this expenditure is expected to be incurred in the next 12 months, it added. "The total capital cost of the project is approximately US$10.8 million, with annual operating costs estimated at J$35 million," according to the financials, Jamaica Gleaner relays. As reported in the Troubled Company Reporter-Latin America on Nov. 22, 2012, RJR News related that Lascelles deMercado said it has now completed the sale of its insurance arm, Globe Holdings, to Guardian Holdings. Lascelles said the sale was completed on Nov. 16, according to RJR News. RJR News noted that the sale comes two months after Lascelles said it had reached an agreement with Guardian to sell the unit for US$38 million. About CL Financial CL Financial Group Limited is a privately held conglomerate in Trinidad and Tobago. Founded as an insurance company by Cyril Duprey, Colonial Life Insurance Company was expanded into a diversified company by his nephew, Lawrence Duprey. CL Financial is now one of the largest local conglomerates in the region, encompassing over 65 companies in 32 countries worldwide with total assets standing at roughly US$100 billion. * * * As reported in the Troubled Company Reporter-Latin America on August 10, 2009, A.M. Best Co. downgraded the financial strength rating to C (Weak) from B (Fair) and issuer credit rating to "ccc" from "bb" of Colonial Life Insurance Company (Trinidad) Limited (CLICO) (Trinidad & Tobago). The ratings remain under review with negative implications. CLICO is an insurance member company of CL Financial Limited (CL Financial), a diversified holding company based in Trinidad & Tobago. According to a TCR-LA report on Feb. 20, 2009, citing Trinidad and Tobago Express, Tobago President George Maxwell Richards signed bailout bills for CL Financial, giving the government the authority to control the company's unit, Colonial Life Insurance Company, and giving the central bank extensive powers to treat with CL Financial's collapse and the consequent systemic crisis. =============== X X X X X X X X =============== * Upcoming Meetings, Conferences and Seminars --------------------------------------------- Dec. 4-8, 2012 AMERICAN BANKRUPTCY INSTITUTE ABI/SJUSL Mediation Training Symposium St. John's University, Queens, N.Y. Contact: 1-703-739-0800; http://www.abiworld.org/ Jan. 24-25, 2013 AMERICAN BANKRUPTCY INSTITUTE Rocky Mountain Bankruptcy Conference Four Seasons Hotel Denver, Denver, Colo. Contact: 1-703-739-0800; http://www.abiworld.org/ Feb. 7-9, 2013 AMERICAN BANKRUPTCY INSTITUTE Caribbean Involvency Symposium Eden Roc Renaissance, Miami Beach, Fla. Contact: 1-703-739-0800; http://www.abiworld.org/ Feb. 17-19, 2013 AMERICAN BANKRUPTCY INSTITUTE Advanced Consumer Bankruptcy Practice Institute Charles Evans Whittaker Courthouse, Kansas City, Mo. Contact: 1-703-739-0800; http://www.abiworld.org/ Feb. 20-22, 2013 AMERICAN BANKRUPTCY INSTITUTE VALCON Four Seasons Las Vegas, Las Vegas, Nev. Contact: 1-703-739-0800; http://www.abiworld.org/ Apr. 10-12, 2013 TURNAROUND MANAGEMENT ASSOCIATION TMA Spring Conference JW Marriott Chicago, Chicago, Ill. Contact: http://www.turnaround.org/ Apr. 18-21, 2013 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting Gaylord National Resort & Convention Center, National Harbor, Md. Contact: 1-703-739-0800; http://www.abiworld.org/ June 13-16, 2013 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort, Traverse City, Mich. Contact: 1-703-739-0800; http://www.abiworld.org/ July 11-13, 2013 AMERICAN BANKRUPTCY INSTITUTE Northeast Bankruptcy Conference Hyatt Regency Newport, Newport, R.I. Contact: 1-703-739-0800; http://www.abiworld.org/ July 18-21, 2013 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Workshop The Ritz-Carlton Amelia Island, Amelia Island, Fla. Contact: 1-703-739-0800; http://www.abiworld.org/ Aug. 8-10, 2013 AMERICAN BANKRUPTCY INSTITUTE Mid-Atlantic Bankruptcy Workshop Hotel Hershey, Hershey, Pa. Contact: 1-703-739-0800; http://www.abiworld.org/ Aug. 22-24, 2013 AMERICAN BANKRUPTCY INSTITUTE Southwest Bankruptcy Conference Hyatt Regency Lake Tahoe, Incline Village, Nev. Contact: 1-703-739-0800; http://www.abiworld.org/ Oct. 3-5, 2013 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Wardman Park, Washington, D.C. Contact: http://www.turnaround.org/ Nov. 1, 2013 AMERICAN BANKRUPTCY INSTITUTE NCBJ/ABI Educational Program Atlanta Marriott Marquis, Atlanta, Ga. Contact: 1-703-739-0800; http://www.abiworld.org/ Dec. 2, 2013 BEARD GROUP, INC. 19th Annual Distressed Investing Conference The Helmsley Park Lane Hotel, New York, N.Y. Contact: 240-629-3300 or http://bankrupt.com/ Dec. 5-7, 2013 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference Terranea Resort, Rancho Palos Verdes, Calif. Contact: 1-703-739-0800; http://www.abiworld.org/ The Meetings, Conferences and Seminars column appears in the Troubled Company Reporter each Wednesday. Submissions via e-mail to conferences@bankrupt.com are encouraged. *********** Monday's edition of the TCR-LA delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR-LA 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-LA constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR-LA editor holds some position in the issuers' public debt and equity securities about which we report. Tuesday's edition of the TCR-LA features a list of companies with insolvent balance sheets obtained by our editors based on the latest balance sheets publicly available a day prior to publication. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Thursday's edition of the TCR-LA. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com *********** 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-Latin America is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland USA, Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez, Valerie U. Pascual, Ivy B. Magdadaro, Frauline S. Abangan, and Peter A. Chapman, Editors. Copyright 2012. All rights reserved. ISSN 1529-2746. 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 Latin America subscription rate is US$625 per half-year, delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Peter Chapman at 240/629-3300. * * * End of Transmission * * *