/raid1/www/Hosts/bankrupt/TCRLA_Public/170926.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
Tuesday, September 26, 2017, Vol. 18, No. 191
Headlines
A N T I G U A & B A R B U D A
ANTIGUA & BARBUDA: Asks Debt Forgiveness to Help Recovery Process
B A H A M A S
BAHAMAS: Income Tax Jitters Following IMF Recommendation
B R A Z I L
CYRELA COMMERCIAL: Fitch Affirms Then Withdraws BB- IDR
D O M I N I C A
DOMINICA: CCRIF to Make US$19MM Payout for Hurricane Relief
D O M I N I C A N R E P U B L I C
DOMINICAN REPUBLIC: Medina Meet With Officials on Flood Damages
DOMINICAN REPUBLIC: Taiwan Gives Warning on Country's China Ties
DOMINICAN REP: Storm Knocks Out Power In North, East, Spares South
J A M A I C A
JAMAICA: Leaders Give Mixed Reviews Regarding Business Conditions
JAMAICA: BOJ to Introduce Publishing of Midday Forex Rates
JAMAICA: JBA Urges Finance Minister to Help Lower Interest Rates
P U E R T O R I C O
METROPOLITAN INDUSTRIAL: Nugen Group to Provide $230K to Fund Plan
PERFUMANIA HOLDINGS: Shares Will Cease Trading on Nasdaq
PUERTO RICO: Dam Showing Signs of Possible Collapse
PUERTO RICO: Objects to COFINA Agent Bid for Sec. 2125 Protection
SPANISH BROADCASTING: Falls Short of OTC's $5M Market Cap Rule
TOYS "R" US: Taps Prime Clerk as Claims and Noticing Agent
TOYS "R" US: $375M Int'l DIP Facility Has Interim Approval
TOYS "R" US: JAKKS to Report Loss Due to Toys R Us Woes
TOYS "R" US: Bankruptcy No Rating Impact on US CLOs, Fitch Says
T R I N I D A D & T O B A G O
LOLLABEE CELLULAR: Gets Court Order to Pay TT$9 Million Debt
V E N E Z U E L A
VENEZUELA: Trump Adds Country to New Travel Ban List
VENEZUELA: Runs Short of Gasoline
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A N T I G U A & B A R B U D A
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ANTIGUA & BARBUDA: Asks Debt Forgiveness to Help Recovery Process
-----------------------------------------------------------------
Caribbean360.com reports that faced with a bill expected to run
into the millions to rebuild Barbuda which was rendered
"uninhabitable" by Hurricane Irma earlier this month, Antigua and
Barbuda Prime Minister Gaston Browne has made a strong case for
debt relief for the island.
Minister Browne painted a grim picture as he captured the
attention of world leaders and officials at the UN General
Assembly with a reminder that "for the first time in over 300
years, there is no permanent resident of Barbuda," according to
Caribbean360.com.
"The footprints of an entire civilization have been emasculated by
the brutality and magnitude of Irma. Everything that meant
anything to the inhabitants had to be left behind -- their homes,
their possessions, their history," the report quoted Minister
Browne as saying.
Minister Browne Browne said it would cost US$250 million to
rebuild, about 15 per cent of his country's gross domestic
product, and he pleaded for wealthier countries to forgive or
reduce Antigua's US$130 million debt which has been incurred over
decades, the report notes.
"Antigua and Barbuda urgently requires the assistance of the
international community, including the international development
and finance institutions, to accomplish this vital task of
rebuilding Barbuda," he added, reports Caribbean360.com.
Minister Browne also reminded the United States officials
attending the General Assembly that Antigua was still anxiously
awaiting settlement of the more than decade-old online gaming
dispute, the report relays.
"In this time of great need when our sister island of Barbuda was
devastated by a hurricane, the US Government should, in the
interest of fairness, justice and of good conscience, settle the
debt," Minister Browne urged, the report notes.
Back in 2004, the World Trade Organization ruled that Washington
had violated trade agreements by preventing Americans from betting
on online sites based in Antigua and Barbuda, the report recalls.
The WTO had ordered the US to pay US$21 million per year until it
either scrapped its domestic online betting industry or allowed
Antigua-licensed sites access to the US market, the report relays.
To date, the US has done neither, the report notes.
Minister Browne stressed that the US stood to benefit if it
honoured its debt, since 90 per cent of the settlement proceeds
would be spent in the US economy, Antigua's primary source market,
the report adds.
=============
B A H A M A S
=============
BAHAMAS: Income Tax Jitters Following IMF Recommendation
--------------------------------------------------------
Caribbean360.com reports that an International Monetary Fund (IMF)
proposal for The Bahamas to implement a low rate income tax has
drawn a mixture of skepticism, approval and downright rejection.
Following its Article IV consultation with the Hubert Minnis
administration, the Washington-based financial body urged the
Government to implement a "low rate income tax" to improve
taxation system fairness and replace revenue lost, as customs
tariffs are slashed as a result of the Bahamas' international
trade commitments to the European Union (EU) and, possibly, the
World Trade Organization (WTO), according to Caribbean360.com.
It argued that the move would also "make the tax system more
progressive and help protect infrastructure and social spending,"
the report notes.
However, former Finance Minister James Smith has urged the
Government to tread cautiously, warning there must be full
analysis of the proposal, the report relays.
Minister Smith told the Tribune newspaper that the Bahamas is a
country "built on tax evasion" and citizens were not likely to buy
in with enthusiasm, the report notes.
"It's an interesting discussion to have, but the Bahamas -- given
its historical status on taxation -- needs to be very careful on
the way forward," the report quoted Minister Smith as saying.
"There are a lot of issues involved in this, not the least of
which is the administrative machinery. The net effect ought to be
positive once you've taken a decision. You don't want to introduce
a new tax because it's fashionable."
Minister Smith got strong support from Managing Partner of
Deloitte & Touche (Bahamas), Raymond Winder, who said the country
must have a clear understanding of how it would impact the overall
economy, the report notes.
"We need to use taxation as a means of collecting revenue, but
also as a means of incentivizing the development of industries and
certain transactions for the economy. It's also difficult to take
into consideration one aspect of taxation without considering all
the taxes the Bahamas currently uses," the report quoted Mr.
Winder as saying.
"Before we move in that direction [income tax], studies need to be
done; not only to seek additional revenue, but spur momentum in
certain industries. The Government ought to be wise and take a
look at every tax being utilized in the Bahamas before we move in
any one direction," Mr. Winder warned, the report notes.
However, if financial services entrepreneur Paul Moss had his way,
the Bahamas government would introduce the tax, the report relays.
Mr. Moss described the IMF proposal as "spot on", arguing that the
country's "no tax" platform is not working for the Bahamas which
projects itself as a leading financial services jurisdiction, the
report relays.
Insisting tax competition was the way of the future, he suggested
that Bahamas was at risk of losing business to jurisdictions such
as the Cayman Islands, Bermuda and others, the report says.
Key local business players have however rejected the
recommendation, the report relays.
The report notes that Robert Myers, a principal with the
Organization for Responsible Governance (ORG), blasted the idea of
new and/or increased taxes as "short-sighted and irresponsible"
given the Bahamas' present economic and fiscal condition.
"Adding any further taxes ahead of the Government's [planned
fiscal] reform is unacceptable, and the suggestion of it is
downright irresponsible," the report quoted Mr. Myers as saying.
"In effect, what the IMF suggests by this is that if the
Government taxes its citizens more the IMF will lend it more
money. The Government does not need more money; it needs to learn
how to live within its means, like the rest of us," he added.
At the same time, President of the Chamber of Commerce and
Employers' Confederation, Michael Maura charged that the
introduction of an income tax would be disastrous, the report
relays.
"To introduce a new tax at a time when the cost of living is
unbearable, at a time when a small business can hardly keep its
doors open, would be destructive," he added, notes the report.
As reported in the Troubled Company Reporter-Latin America on
July 31, 2017, Caribbean360.com reports that Bahamian Prime
Minister Dr. Hubert Minnis has disclosed harsh cuts in the Bahamas
Government spending as he embarks on a strategy to remedy the
country's fiscal deficit, which is projected to reach $500 million
this year.
===========
B R A Z I L
===========
CYRELA COMMERCIAL: Fitch Affirms Then Withdraws BB- IDR
-------------------------------------------------------
Fitch Ratings has affirmed Cyrela Commercial Properties S.A.
Empreendimentos e Participacoes' (CCP) Long-Term Foreign and Local
Currency Issuer Default Ratings (IDR) at 'BB-'/Stable and its
National Long-Term rating at 'A(bra)'/Stable. At the same time,
Fitch has withdrawn the ratings.
Fitch has chosen to withdraw the ratings of CCP for commercial
reasons. Fitch will no longer provide ratings or analytical
coverage for the company.
KEY RATING DRIVERS
Key Rating Drivers are not applicable as the ratings have been
withdrawn.
DERIVATION SUMMARY
Derivation Summary is not applicable as the ratings have been
withdrawn.
KEY ASSUMPTIONS
Key Assumptions are not applicable as the ratings have been
withdrawn.
RATING SENSITIVITIES
Rating Sensitivities are not applicable as the ratings have been
withdrawn.
LIQUIDITY
CCP's liquidity will improve with the proceeds from the sale of
assets, and part of the proceeds will be used to prepay about BRL1
billion of debt, materially minimizing refinancing pressure during
the next couple of years. As of June 30, 2017, cash and marketable
securities totalled BRL330 million and total debt was BRL2.4
billion. The company has BRL507 million of debt maturing in the
short term and BRL262 million in second-half 2018.
FULL LIST OF RATING ACTIONS
Fitch has affirmed and withdrawn the following ratings:
Cyrela Commercial Properties S.A. Empreendimentos e Participacoes
-- Long-term Foreign Currency IDR at 'BB-';
-- Long-term Local Currency IDR at 'BB-';
-- Long-term National Scale rating at 'A(bra)';
-- Fifth debenture issuance, in the amount of BRL200 million, due
in 2019, at 'A(bra)';
-- Eighth debenture issuance, in the amount of BRL200 million,
due in 2020, at 'A(bra)'.
The Rating Outlook for the corporate ratings was Stable when the
rating was withdrawn.
===============
D O M I N I C A
===============
DOMINICA: CCRIF to Make US$19MM Payout for Hurricane Relief
-----------------------------------------------------------
RJR News reports that Dominica will receive a payout of US$19.29
million under the tropical cyclone policy of the Caribbean
Catastrophe Risk Insurance Facility (CCRIF) following the passage
of Hurricane Maria.
This payout will be made within 14 days of the hurricane,
according to RJR News.
The payout brings the total CCRIF payouts since the start of the
2017 Atlantic Hurricane Season to about US$50.7 million and
CCRIF's payouts since its inception in 2007 to approximately
US$120 million, the report notes.
Networks
Meanwhile, Cable & Wireless Communications disclosed that it has
begun the successful restoration of mobile services to Dominica,
the report relays.
The island's infrastructure, including its communications
networks, suffered significant impact from Category 4 Hurricane
Maria, which made landfall in Dominica, the report says.
As the devastating winds of Hurricane Maria died down, there was
little or no news coming from the island of Dominica to allay the
fears of families and friends overseas, the report relays.
The company's restoration efforts follow on the heels of its
establishment of an engineering hub in Antigua designed to
accelerate the restoration of impacted networks from this year's
highly active hurricane season, the report adds.
===================================
D O M I N I C A N R E P U B L I C
===================================
DOMINICAN REPUBLIC: Medina Meet With Officials on Flood Damages
---------------------------------------------------------------
Dominican Today reports that Dominican Republic President Danilo
Medina was to meet with officials and municipal authorities at the
National Palace Sept. 25, after a tour of several areas affected
by Hurricane Maria, including towns in Montecristi (northeast) and
Duarte (northwest) provinces.
"At nine in the morning we will have a meeting with officials to
seek a final solution," Mr. Medina said, according to Dominican
Today. "Everything has a solution," he added.
Residents of Montecristi request the urgent repairs of the eroded
abutments of several bridges, the report notes.
"I came from the Northwest. Evaluating the damage and seeing how
we will help. It has also done a lot of damage to agriculture
here. The biggest damages we have are flooding, damaged homes.
Also from people who have lost their homes," the report quoted Mr.
Mr. Medina as saying.
According to the government website, Mr. Medina received technical
and accurate information on Hurricane Maria's damage, especially
due to the overflowed Yaque del Norte and Yuna rivers that cut off
several towns, and affected houses and farms, the report relays.
As reported in Troubled Company Reporter-Latin America on July 24,
2017, Moody's Investors Service has upgraded the Dominican
Republic's long term issuer and debt ratings to Ba3 from B1 and
changed the outlook to stable from positive, based on the
following key drivers:
(1) The Dominican Republic's continued robust growth outlook
compared to rating peers, coupled with a reduction in
external risks as current account deficits have declined and
international reserves have increased.
(2) The reduction in fiscal deficits over the last four years and
Moody's expectation that fiscal deficits will remain shy of
3% of GDP, supported by fiscal restraint and reduced
transfers to the electricity sector.
DOMINICAN REPUBLIC: Taiwan Gives Warning on Country's China Ties
----------------------------------------------------------------
Dominican Today reports that Taiwan Foreign Minister David Tawei
Lee, defended his country's diplomatic ties with the Dominican
Republic, and warned of what could occur if Santo Domingo
establishes relations with Beijing.
"I want to clarify that Taiwan does not want anything from the
Dominican Republic, if it does accept China, and if it accepts it,
it will accept thousands and thousands of illegal immigrants; then
think, friends present, in the results," the diplomat told the
Corripio media group during first visit to the country on July 24,
according to Dominican Today.
Minister Tawei said in recent days he has heard that to attract
and establish diplomatic relations with the Dominican Republic,
China has offered "very high figure" projects, the report notes.
"Frankly, it's a very unrealistic dream, promises without solid
fundamentals, like a check without funds," he added.
Minister Tawei said once diplomatic relations were to be
established with Mainland China, the country would be one of its
175 allies, the report relays.
The diplomat noted, however, that Taiwan values its relations with
each one of Taipei's 20 diplomatic allies, the report notes.
Minister Tawei said they'll continue the sincerity with its allies
who agree to maintain relations with this country, the report
relays.
Minister Tawei's remarks came just one month after Panama, one of
Taiwan's key strategic partners in the region, broke ties with
Taipei to establish relations with Beijing, the report discloses.
The Taiwanese official spoke during a meeting with Dominican
Foreign minister Miguel Vargas and a delegation of Taipei
officials, headed by the foreign minister of that Asian nation,
Wang Yi, in the framework of the UN General Assembly, the report
says.
UN Security Council
Mr. Vargas thanked South Korean Foreign minister Kang Kyung-wha,
for his country's support for Dominican Republic's bid for a non-
permanent UN Security Council seat during the 2019-2020 period,
the report says.
Russia, Spain, Turkey and Azerbaijan have also pledged their
support for the Dominican Republic, which consolidates its
aspirations of becoming a new member of the UN body for the first
time, the report notes.
The 33 Latin American and Caribbean Group (Grulac) member
countries have already expressed their support for Santo Domingo,
the report adds.
As reported in Troubled Company Reporter-Latin America on July 24,
2017, Moody's Investors Service has upgraded the Dominican
Republic's long term issuer and debt ratings to Ba3 from B1 and
changed the outlook to stable from positive, based on the
following key drivers:
(1) The Dominican Republic's continued robust growth outlook
compared to rating peers, coupled with a reduction in
external risks as current account deficits have declined and
international reserves have increased.
(2) The reduction in fiscal deficits over the last four years and
Moody's expectation that fiscal deficits will remain shy of
3% of GDP, supported by fiscal restraint and reduced
transfers to the electricity sector.
DOMINICAN REP: Storm Knocks Out Power In North, East, Spares South
------------------------------------------------------------------
Dominican Today reports that the State-owned Electric Utility
(CDEEE) reported that the northern and eastern regions were the
areas most affected by Hurricane Maria, with 100 circuits out of
591 without power, due to breakdowns and precautionary outages.
"Despite the occurrence of breakdowns and the fall in generation,
the supply of the three distributors, including the southern
Edesur, exceeds 80% of the demand of active customers, which has
been achieved thanks to the rapid responsiveness of the brigades
to the problems that have arisen and which do not involve major
suspensions," the utility said in a statement obtained by the news
agency.
It said 86,639 Edesur customers are without of service, or 13.1%,
while EdeEste reported 17.5% without power, the report notes.
The utility has yet to provide figures for the north region
(EdeNorte), the report relays.
As reported in Troubled Company Reporter-Latin America on July 24,
2017, Moody's Investors Service has upgraded the Dominican
Republic's long term issuer and debt ratings to Ba3 from B1 and
changed the outlook to stable from positive, based on the
following key drivers:
(1) The Dominican Republic's continued robust growth outlook
compared to rating peers, coupled with a reduction in
external risks as current account deficits have declined and
international reserves have increased.
(2) The reduction in fiscal deficits over the last four years and
Moody's expectation that fiscal deficits will remain shy of
3% of GDP, supported by fiscal restraint and reduced
transfers to the electricity sector.
=============
J A M A I C A
=============
JAMAICA: Leaders Give Mixed Reviews Regarding Business Conditions
-----------------------------------------------------------------
RJR News reports that Jamaica's business leaders have given mixed
views regarding business conditions in the country.
In the latest Survey of Businesses' Inflation Expectations,
conducted in July by Statin on behalf of the Bank of Jamaica, the
Present Business Conditions Index improved relative to the
previous survey where the Future Business Conditions Index
worsened slightly, according to RJR News.
The Present Business Conditions Index advanced to 213.0 from 196.6
in the previous survey, the report notes.
The index of the Future Business Conditions declined to 167.2 from
169.7 attained in the previous survey, the report relays.
According to the survey, the increase in the Present Index
reflected a rise in the number of respondents of the view that
conditions are better, the report notes.
Additionally, there was a decline in the proportion with the view
that conditions are worse, the report says.
The deterioration in the Future Index mainly reflected a decline
in the number of respondents of the view that conditions will be
better while there was an increase in the proportion of
respondents of the view that conditions will be worse, the report
notes.
The survey captured the perception of Chief Executive Officers,
Managing Directors and Financial Controllers about the future
movement of prices, current and future business conditions and the
expected rate of increase in wages/salaries, the report relays.
The responses assist the Central Bank in charting future policy
decisions, adds the report.
The most recent survey was conducted from July 17 to August 4 and
had 320 respondents, the report relays.
Currency Depreciation
Meanwhile, business leaders have adjusted downward their outlook
for the pace of currency depreciation in the medium term, the
report says.
Respondents to the Survey of Businesses' Inflation Expectations
for July anticipated that the exchange rate will depreciate by 0.1
per cent, 0.5 percent, and 1.3 per cent for the three-month, six-
month, and 12-month horizons, respectively, the report notes.
This compares with the expected depreciations of 1.1 per cent, 1.5
per cent, and 2.3 per cent recorded in June's survey, says RJR
News.
As reported in the Troubled Company Reporter-Latin America on
Feb. 9, 2017, Fitch Ratings affirmed Jamaica's Long-Term Foreign
and Local Currency Issuer Default Ratings (IDRs) at 'B' with a
Stable Outlook. The issue ratings on Jamaica's senior unsecured
Foreign and Local Currency bonds are also affirmed at 'B'. The
Outlooks on the Long-Term IDRs are Stable. The Country Ceiling is
affirmed at 'B' and the Short-Term Foreign Currency and Local
Currency IDRs at 'B'.
JAMAICA: BOJ to Introduce Publishing of Midday Forex Rates
----------------------------------------------------------
RJR News reports that the Bank of Jamaica is to introduce midday
foreign exchange rates starting Sept. 25.
The rates will be published at 1:00 p.m. daily for the US and
Canadian dollars as well as the British pound and euro, the report
notes.
This is part of the Central Bank's push to modernize Jamaica's
foreign exchange market, the report says.
The rates will be used to settle purchases made by the Bank of
Jamaica instead of the previous day's rate which is now used, the
report adds.
As reported in the Troubled Company Reporter-Latin America on
Feb. 9, 2017, Fitch Ratings affirmed Jamaica's Long-Term Foreign
and Local Currency Issuer Default Ratings (IDRs) at 'B' with a
Stable Outlook. The issue ratings on Jamaica's senior unsecured
Foreign and Local Currency bonds are also affirmed at 'B'. The
Outlooks on the Long-Term IDRs are Stable. The Country Ceiling is
affirmed at 'B' and the Short-Term Foreign Currency and Local
Currency IDRs at 'B'.
JAMAICA: JBA Urges Finance Minister to Help Lower Interest Rates
----------------------------------------------------------------
RJR News reports that the Jamaica Bankers Association says Finance
Minister Audley Shaw can assist in lowering interest rates offered
by financial institutions.
President of the Association Nigel Holness was responding to Mr.
Shaw who last month called for banks to lower interest rates to
their customers, arguing that the rates are still too high,
according to RJR News.
However, Mr. Holness asserted that over the last year interest
rates have fallen significantly to single digits including
mortgage rates, corporate rates and consumer credit rates, the
report notes.
Mr. Holness said Mr. Shaw can assist the sector and help the
country in achieving increased growth by encouraging the Bank of
Jamaica (BOJ) to lower the cash reserves on Jamaican dollar
prescribed liabilities, which would create the right environment
for rates to go even lower, the report relays.
Mr. Holness, who is also Managing Director of First Caribbean
International Bank, explained that currently the reserve
requirement for Jamaican dollars allows banks to deploy only 74
cents in each dollar while the remainder of these funds are tied
up in reserves as prescribed by the BOJ, the report says.
As reported in the Troubled Company Reporter-Latin America on
Feb. 9, 2017, Fitch Ratings affirmed Jamaica's Long-Term Foreign
and Local Currency Issuer Default Ratings (IDRs) at 'B' with a
Stable Outlook. The issue ratings on Jamaica's senior unsecured
Foreign and Local Currency bonds are also affirmed at 'B'. The
Outlooks on the Long-Term IDRs are Stable. The Country Ceiling is
affirmed at 'B' and the Short-Term Foreign Currency and Local
Currency IDRs at 'B'.
======================
P U E R T O R I C O
======================
METROPOLITAN INDUSTRIAL: Nugen Group to Provide $230K to Fund Plan
------------------------------------------------------------------
Nugen Group Incorporated will provide $230,000 to fund the plan
proposed by Metropolitan Industrial Food Services Inc. to exit
Chapter 11 protection.
According to the latest restructuring plan, Nugen will advance a
total of $230,000 through the life of the plan, and will grant
Metropolitan Industrial a management agreement for the cafeteria
in the University of Puerto Rico Rio Piedras Campus.
In return for the new value, all equity interests in Metropolitan
Industrial will be cancelled on the effective date of the plan and
new shares will be issued solely to Nugen, according to the plan
filed on September 12 with the U.S. Bankruptcy Court for the
District of Puerto Rico.
A copy of the first amended plan is available for free at
https://is.gd/0nLuNK
About Metropolitan Industrial
Headquartered in San Juan, Puerto Rico, Metropolitan Industrial
Food Services, Inc., filed for Chapter 11 bankruptcy protection
(Bankr. D. P.R. Case No. 15-08302) on Oct. 23, 2015, listing $2.09
million in total assets and $4.62 million in total liabilities.
The petition was signed by Josue V. Navarro, president.
Judge Edward A. Godoy presides over the case. Alexis Fuentes
Hernandez, Esq., at Alexis Fuentes-Hernandez serves as the
Debtor's bankruptcy counsel.
On February 27, 2017, the Debtor filed a disclosure statement,
which explains its proposed Chapter 11 plan of reorganization.
PERFUMANIA HOLDINGS: Shares Will Cease Trading on Nasdaq
--------------------------------------------------------
Perfumania Holdings, Inc. received on Sept. 19, 2017, a letter
from the staff of The Nasdaq Stock Market LLC notifying the
Company that it is not in compliance with Listing Rule 5250(c)(1),
having failed to file its Form 10-Q with the Securities and
Exchange Commission when due in September 2017, and that, in light
of the Company's bankruptcy filing, the staff has determined in
accordance with Listing Rules 5101 and 5110(b), and IM-5101-1,
that the Company's common stock will be delisted from The Nasdaq
Stock Market.
Considering Nasdaq's continued listing requirements and the
Company's intention to emerge from Chapter 11 as a private
company, the Company does not plan to appeal the Nasdaq staff's
determination. Accordingly, trading of the Company's common stock
on Nasdaq will be suspended as of the opening of business on Sept.
28, 2017, and Nasdaq will file a Form 25 (Notification of Removal
from Listing) with the SEC, which will remove the Company's common
stock from listing on Nasdaq.
After the Company's common stock is delisted by Nasdaq, it may be
eligible to be quoted on the over-the-counter market. There is no
assurance that broker-dealers will commence or continue to provide
public quotes of the common stock on this market during the
Company's reorganization or, if so, whether the trading volume of
the common stock will be sufficient to provide for an efficient
trading market.
The Company intends that, following delisting, if its plan of
reorganization is confirmed by the Bankruptcy Court, it will file
a Form 15 (Certification and Notice of Termination of
Registration) with the SEC to deregister its common stock under
the Securities and Exchange Act of 1934. The Company's obligation
to file periodic reports such as Forms 10-Q and 10-K under the
Exchange Act will be suspended immediately upon such filing and
will terminate when deregistration becomes effective 90 days
thereafter.
About Perfumania Holdings
Perfumania Holdings, Inc. (NASDAQ: PERF) --
http://www.perfumaniaholdings.com/-- is a specialty retailer and
distributor of fragrances and related beauty products across the
United States. Perfumania has a 30 year history of innovative
marketing and sales management, brand development, license
sourcing and wholesale distribution making it the premier
destination for fragrances and other beauty supplies. The Company
operates retail stores and e-commerce specializing in the sale of
fragrances and related products across the United States, Puerto
Rico, and the U.S. Virgin Islands. The Company also operates a
wholesale distribution network, selling to mass retail, department
stores as well as domestic and international distributors.
On Aug. 26, 2017, Model Reorg Acquisition, LLC and 18 affiliated
debtors, including perfumania Holdings, Inc., each filed voluntary
petitions in the United States Bankruptcy Court for the District
of Delaware seeking relief under chapter 11 of the United States
Bankruptcy Code. The Debtors' cases are jointly administered for
procedural purposes under the case docket for Model Reorg
Acquisition, LLC (Bankr. D. Del. Case No. 17-11794).
Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal
counsel, Ankura Consulting Group, LLC is serving as financial
advisor, and Imperial Capital is serving as investment banker to
the Company.
The Skadden team includes Corporate Restructuring partners Lisa
Laukitis and J. Gregory Milmoe (Boston), and associates Raquelle
Kaye (Boston), Esther Adzhiashvili and AZ Biazar, as well as
Corporate Restructuring and Bankruptcy Litigation partner Anthony
Clark (Wilmington) and associate Cameron Fee (Wilmington); Banking
partner Sarah Ward and associates Emily Stork, Shan Song (Chicago)
and Katherine Webb; Tax partner Brian Krause and associate Joseph
Soltis; and Corporate partner Richard Grossman (New York).
Epiq Bankruptcy Solutions is the claims and noticing agent and
maintains the Web site http://dm.epiq11.com/perfumania
PUERTO RICO: Dam Showing Signs of Possible Collapse
---------------------------------------------------
EFE News reports that Puerto Rico Gov. Ricardo Rossello said that
the Guajataca dam in the northwestern part of the island is
showing signs of possible "collapse" due to the excess water
contained in its reservoir after the passage of Hurricane Maria,
which dumped at least 15 inches of rain in the area.
At a press conference, Gov. Rossello re-emphasized to the
approximately 70,000 people living near the dam that the
government issued a mandatory evacuation order and that the area
has been declared an emergency zone, according to EFE News.
Gov. Rossello noted that the Toa Vaca dam in southern Puerto Rico
is also being closely monitored because of the high water level in
its associated reservoir, the report relays.
However, Gov. Rossello emphasized that no evacuation of Ponce,
Villalba and Juana Diaz -- cities that could be affected if there
is any failure of the dam -- has been ordered yet, the report
notes.
The Guajataca dam, built in 1920, began to give way due to the
huge volume of water dumped into its reservoir by Maria, which
passed over the island, says EFE News.
The Aqueduct and Sewer Authority has been carefully monitoring the
dam after detecting a crack in it, whereupon the island's
government ordered the evacuation of the nearby zones of Isabela
and Quebradilla, EFE News notes. The National Guard is assisting
in the evacuation.
According to the report, Gov. Rossello also confirmed that
President Donald Trump will visit Puerto Rico in the near future
to view storm damage, although no date for the trip has been set
by the White House as yet. An advance team from the White House
had been due to arrive to help plan the trip, which had been
tentatively scheduled after Hurricane Irma, but that was delayed
by damage to infrastructure and communications difficulties on the
island by Maria.
Meanwhile, the Arecibo radio telescope on the island, one of the
largest such instruments in the world at 305 meters in diameter,
was not damaged during Maria's passage, although the observatory
installations did suffer some damage, according to a report by the
Universities Space Research Association, the report says.
A 29-meter-high antenna at the site was partially broken due to
falling debris, and other auxiliary equipment -- including a
receiver -- were slightly damaged by Maria's powerful winds, the
report relates.
About Puerto Rico
Puerto Rico is a self-governing commonwealth in association with
the United States that's facing a massive bond debt of $70
billion, a 68% debt-to-GDP ratio and negative economic growth in
nine of the last 10 years.
The Commonwealth of Puerto Rico has sought bankruptcy protection,
aiming to restructure its massive $74 billion debt-load and $49
billion in pension obligations.
The debt restructuring petition was filed by Puerto Rico's
financial oversight board in U.S. District Court in Puerto Rico
(Case No. 17-01578) on May 3, 2017, and was made under Title III
of 2016's U.S. Congressional rescue law known as the Puerto Rico
Oversight, Management, and Economic Stability Act ("PROMESA").
The Financial Oversight and Management Board later commenced Title
III cases for the Puerto Rico Sales Tax Financing Corporation
(COFINA) on May 5, 2017, and the Employees Retirement System (ERS)
and the Puerto Rico Highways and Transportation Authority (HTA) on
May 21, 2017. On July 2, 2017, a Title III case was commenced for
the Puerto Rico Electric Power Authority ("PREPA").
U.S. Chief Justice John Roberts has appointed U.S. District Judge
Laura Taylor Swain to oversee the Title III cases. The Honorable
Judith Dein, a United States Magistrate Judge for the District of
Massachusetts, has been designated to preside over matters that
may be referred to her by Judge Swain, including discovery
disputes, and management of other pretrial proceedings.
Joint administration of the Title III cases, under Lead Case No.
17-3283, was granted on June 29, 2017.
The Oversight Board has hired as advisors, Proskauer Rose LLP and
O'Neill & Borges LLC as legal counsel, McKinsey & Co. as strategic
consultant, Citigroup Global Markets, as municipal investment
banker, and Ernst & Young, as financial advisor.
Martin J. Bienenstock, Esq., Scott K. Rutsky, Esq., and Philip M.
Abelson, Esq., of Proskauer Rose; and Hermann D. Bauer, Esq., at
O'Neill & Borges are onboard as attorneys.
McKinsey & Co. is the Board's strategic consultant, Ernst & Young
is the Board's financial advisor, and Citigroup Global Markets
Inc. is the Board's municipal investment banker.
Prime Clerk LLC is the claims and noticing agent. Prime Clerk
maintains a case web site at:
https://cases.primeclerk.com/puertorico
Epiq Bankruptcy Solutions LLC is the service agent for ERS, HTA,
and PREPA.
O'Melveny & Myers LLP is counsel to the Commonwealth's Puerto Rico
Fiscal Agency and Financial Advisory Authority (AAFAF), the agency
responsible for negotiations with bondholders.
The Oversight Board named Professor Nancy B. Rapoport as fee
examiner and to chair a committee to review professionals' fees.
Bondholders' Attorneys
Toro, Colon, Mullet, Rivera & Sifre, P.S.C. and Kramer Levin
Naftalis & Frankel LLP serve as counsel to the Mutual Fund Group,
comprised of mutual funds managed by Oppenheimer Funds, Inc.,
Franklin Advisers, Inc., and the First Puerto Rico Family of
Funds, which collectively hold over $3.5 billion in COFINA Bonds
and over $2.9 billion in other bonds issued by Puerto Rico and
other instrumentalities, including over $1.8 billion of Puerto
Rico general obligation bonds ("GO Bonds").
White & Case LLP and Lopez Sanchez & Pirillo LLC represent the UBS
Family of Funds and the Puerto Rico Family of Funds, which hold
$613.3 million in COFINA bonds.
Paul, Weiss, Rifkind, Wharton & Garrison LLP, Robbins, Russell,
Englert, Orseck, Untereiner & Sauber LLP, and Jimenez, Graffam &
Lausell are co-counsel to the ad hoc group of General Obligation
Bondholders, comprised of Aurelius Capital Management, LP,
Autonomy Capital (Jersey) LP, FCO Advisors LP, Franklin Mutual
Advisers LLC, Monarch Alternative Capital LP, Senator Investment
Group LP, and Stone Lion Capital Partners L.P.
Quinn Emanuel Urquhart & Sullivan, LLP and Reichard & Escalera are
co-counsel to the ad hoc coalition of holders of senior bonds
issued by COFINA, comprised of at least 30 institutional holders,
including Canyon Capital Advisors LLC and Varde Investment
Partners, L.P.
Correa Acevedo & Abesada Law Offices, P.S.C., is counsel to Canyon
Capital Advisors, LLC, River Canyon Fund Management, LLC, Davidson
Kempner Capital Management LP, OZ Management, LP, and OZ
Management II LP (the QTCB Noteholder Group).
Committees
The U.S. Trustee formed a nine-member Official Committee of
Retirees and a seven-member Official Committee of Unsecured
Creditors of the Commonwealth. The Retiree Committee tapped
Jenner & Block LLP and Bennazar, Garcia & Milian, C.S.P., as its
attorneys. The Creditors Committee tapped Paul Hastings LLP and
O'Neill & Gilmore LLC as counsel.
PUERTO RICO: Objects to COFINA Agent Bid for Sec. 2125 Protection
-----------------------------------------------------------------
BankruptcyData.com reported that the Commonwealth of Puerto Rico
and The Bank of New York Mellon filed with the U.S. Bankruptcy
Court separate objections to the motion of Bettina Whyte, the
COFINA agent, for an order (i) confirming that 48 U.S.C. Section
2125 applies to the COFINA agent; (ii) confirming retention of
local counsel and (iii) clarifying payment of fees and expenses of
the COFINA agent and her professionals. The Debtors assert, "The
Oversight Board believes the COFINA Agent and Commonwealth Agent
(collectively, the 'Agents') should only receive the protections
of PROMESA section 105 for acts within their respective scope of
authority, and objects to the extent any protections would extend
to acts outside such scope of authority. Indeed, it appears the
COFINA Agent intends to exceed the scope of her authority. Her
application to retain a financial advisor [ECF No. 1273] explains
the advisor is needed to analyze the Commonwealth fiscal plan.
The COFINA Agent was appointed and authorized to resolve a wholly
legal dispute, namely whether the Commonwealth or COFINA owns
certain sales and use taxes. The COFINA Agent is not authorized
to do anything else. Accordingly, any protection granted by
PROMESA section 105 for acts performed by the Agents should be
limited to those performed within the scope of authority granted
by the Stipulation and Order. The Agents should not receive any
protection for acts that exceed their authorized scope, and all
rights and remedies of the Oversight Board and the Debtors should
be fully preserved with respect thereto."
About Puerto Rico
Puerto Rico is a self-governing commonwealth in association with
the United States that's facing a massive bond debt of $70
billion, a 68% debt-to-GDP ratio and negative economic growth in
nine of the last 10 years.
The Commonwealth of Puerto Rico has sought bankruptcy protection,
aiming to restructure its massive $74 billion debt-load and $49
billion in pension obligations.
The debt restructuring petition was filed by Puerto Rico's
financial oversight board in U.S. District Court in Puerto Rico
(Case No. 17-01578) on May 3, 2017, and was made under Title III
of 2016's U.S. Congressional rescue law known as the Puerto Rico
Oversight, Management, and Economic Stability Act ("PROMESA").
The Financial Oversight and Management Board later commenced Title
III cases for the Puerto Rico Sales Tax Financing Corporation
(COFINA) on May 5, 2017, and the Employees Retirement System (ERS)
and the Puerto Rico Highways and Transportation Authority (HTA) on
May 21, 2017. On July 2, 2017, a Title III case was commenced for
the Puerto Rico Electric Power Authority ("PREPA").
U.S. Chief Justice John Roberts has appointed U.S. District Judge
Laura Taylor Swain to oversee the Title III cases. The Honorable
Judith Dein, a United States Magistrate Judge for the District of
Massachusetts, has been designated to preside over matters that
may be referred to her by Judge Swain, including discovery
disputes, and management of other pretrial proceedings.
Joint administration of the Title III cases, under Lead Case No.
17-3283, was granted on June 29, 2017.
The Oversight Board has hired as advisors, Proskauer Rose LLP and
O'Neill & Borges LLC as legal counsel, McKinsey & Co. as strategic
consultant, Citigroup Global Markets, as municipal investment
banker, and Ernst & Young, as financial advisor.
Martin J. Bienenstock, Esq., Scott K. Rutsky, Esq., and Philip M.
Abelson, Esq., of Proskauer Rose; and Hermann D. Bauer, Esq., at
O'Neill & Borges are onboard as attorneys.
McKinsey & Co. is the Board's strategic consultant, Ernst & Young
is the Board's financial advisor, and Citigroup Global Markets
Inc. is the Board's municipal investment banker.
Prime Clerk LLC is the claims and noticing agent. Prime Clerk
maintains a case web site at:
https://cases.primeclerk.com/puertorico
Epiq Bankruptcy Solutions LLC is the service agent for ERS, HTA,
and PREPA.
O'Melveny & Myers LLP is counsel to the Commonwealth's Puerto Rico
Fiscal Agency and Financial Advisory Authority (AAFAF), the agency
responsible for negotiations with bondholders.
The Oversight Board named Professor Nancy B. Rapoport as fee
examiner and to chair a committee to review professionals' fees.
Bondholders' Attorneys
Toro, Colon, Mullet, Rivera & Sifre, P.S.C. and Kramer Levin
Naftalis & Frankel LLP serve as counsel to the Mutual Fund Group,
comprised of mutual funds managed by Oppenheimer Funds, Inc.,
Franklin Advisers, Inc., and the First Puerto Rico Family of
Funds, which collectively hold over $3.5 billion in COFINA Bonds
and over $2.9 billion in other bonds issued by Puerto Rico and
other instrumentalities, including over $1.8 billion of Puerto
Rico general obligation bonds ("GO Bonds").
White & Case LLP and Lopez Sanchez & Pirillo LLC represent the UBS
Family of Funds and the Puerto Rico Family of Funds, which hold
$613.3 million in COFINA bonds.
Paul, Weiss, Rifkind, Wharton & Garrison LLP, Robbins, Russell,
Englert, Orseck, Untereiner & Sauber LLP, and Jimenez, Graffam &
Lausell are co-counsel to the ad hoc group of General Obligation
Bondholders, comprised of Aurelius Capital Management, LP,
Autonomy Capital (Jersey) LP, FCO Advisors LP, Franklin Mutual
Advisers LLC, Monarch Alternative Capital LP, Senator Investment
Group LP, and Stone Lion Capital Partners L.P.
Quinn Emanuel Urquhart & Sullivan, LLP and Reichard & Escalera are
co-counsel to the ad hoc coalition of holders of senior bonds
issued by COFINA, comprised of at least 30 institutional holders,
including Canyon Capital Advisors LLC and Varde Investment
Partners, L.P.
Correa Acevedo & Abesada Law Offices, P.S.C., is counsel to Canyon
Capital Advisors, LLC, River Canyon Fund Management, LLC, Davidson
Kempner Capital Management LP, OZ Management, LP, and OZ
Management II LP (the QTCB Noteholder Group).
Committees
The U.S. Trustee formed a nine-member Official Committee of
Retirees and a seven-member Official Committee of Unsecured
Creditors of the Commonwealth. The Retiree Committee tapped
Jenner & Block LLP and Bennazar, Garcia & Milian, C.S.P., as its
attorneys. The Creditors Committee tapped Paul Hastings LLP and
O'Neill & Gilmore LLC as counsel.
SPANISH BROADCASTING: Falls Short of OTC's $5M Market Cap Rule
--------------------------------------------------------------
Spanish Broadcasting System, Inc., received a written notice from
OTC Markets on Sept. 15, 2017, advising the Company that its
market capitalization had stayed below $5 million for more than 30
consecutive calendar days and that it no longer met the Standards
for Continued Qualification for the OTCQX Best Market (U.S. Tier)
as per the OTCQX Rules for U.S. Companies. OTC further notified
the Company that a cure period of 180 calendar days to regain
compliance had begun, during which the minimum criteria must be
met for 10 consecutive trading days.
The 180-calendar day grace period expires March 14, 2018. If the
Company's market capitalization has not been at or above $5
million for 10 consecutive trading days by that time, then the
Company has the option to move its Class A common stock from OTCQX
U.S. to the OTC's OTCQB Venture Market, if not, then its Class A
common stock will be moved from OTCQX U.S. to OTC Pink.
About Spanish Broadcasting
Spanish Broadcasting System, Inc. (OTCMKTS:SBSAA) --
http://www.spanishbroadcasting.com/-- is a Spanish-language media
and entertainment company with radio and/or television stations in
the top U.S. Hispanic markets, including Puerto Rico. The
Company's owned and operated radio stations serve markets
representing approximately 35% of the U.S. Hispanic population,
and its television operations serve markets representing over 3.5
million Hispanic households. The Company produces and distributes
Spanish-language content, including radio programs, television
shows, music and live entertainment through its radio stations and
its television group, MegaTV, which produces over 70 hours of
original programming per week. MegaTV broadcasts via its owned
and operated stations in South Florida, Houston, and Puerto Rico
and through programming and/or distribution agreements with other
stations, as well as various cable and satellite providers.
Crowe Horwath LLP, in Fort Lauderdale, Florida, issued a "going
concern" qualification on the consolidated financial statements
for the year ended Dec. 31, 2016, stating that the 12.5% Senior
Secured Notes had a maturity date of April 15, 2017. Cash from
operations or the sale of assets was not sufficient to repay the
notes and other short term obligations when they became due, which
resulted in significant liquidity requirements on the Company that
raise substantial doubt about its ability to continue as a going
concern.
As of June 30, 2017, Spanish Broadcasting had $437.53 million in
total assets, $559.7 million in total liabilities and a total
stockholders' deficit of $122.2 million. Spanish Broadcasting
reported a net loss of $16.34 million for the year ended Dec. 31,
2016, compared with a net loss of $26.95 million in 2015.
* * *
In May 2017, S&P Global Ratings withdrew its 'D' corporate credit
rating and issue-level ratings on Spanish Broadcasting System.
"We withdrew the ratings because we were unlikely to raise them
from 'D', based on SBS' ongoing plans to restructure its debt,"
said S&P Global Ratings' credit analyst Scott Zari. S&P had
downgraded SBS to 'D' on April 21, 2017, following the company's
announcement that it didn't repay its $275 million 12.5% senior
secured notes that were due April 15, 2017.
In April 2017, Moody's Investors Service downgraded SBS's
corporate family rating to 'Ca' from 'Caa2'. SBS's 'Ca' corporate
family rating reflects an elevated expected loss rate following
the recently announced default under the company's 12.5% senior
secured notes due April 2017.
TOYS "R" US: Taps Prime Clerk as Claims and Noticing Agent
----------------------------------------------------------
Toys "R" Us, Inc. and its Debtor-affiliates seek approval from the
U.S. Bankruptcy Court for the Eastern District of Virginia to
employ Prime Clerk LLC as its claims and noticing agent.
Services to be rendered by Prime Clerk are:
(a) prepare and serve required notices and documents in these
chapter 11 cases in accordance with the Bankruptcy Code and the
Bankruptcy Rules in the form and manner directed by the Debtors
and/or the Court;
(b) maintain an official copy of the Debtors' schedules of
assets and liabilities and statements of financial affairs,
listing the Debtors' known creditors and the amounts owed thereto;
(c) maintain (i) a list of all potential creditors, equity
holders and other parties-in-interest, (ii) a "core" mailing list
consisting of all parties described in Bankruptcy Rule 2002(i),
(j) and (k) and those parties that have filed a notice of
appearance pursuant to Bankruptcy Rule 9010, and (iii) all lists
required under any case management order entered by the Court;
update and make said lists available upon request by a party-in-
interest or the Clerk;
(d) furnish a notice to all potential creditors of the last
date for filing proofs of claim and a form for filing a proof of
claim, after such notice and form are approved by the Court, and
notify said potential creditors of the existence, amount and
classification of their respective claims as set forth in the
Schedules, which may be effected by inclusion of such information
(or the lack thereof, in cases where the Schedules indicate no
debt due to the subject party) on a customized proof of claim form
provided to potential creditors;
(e) maintain a post office box or address for the purpose of
receiving claims and returned mail, and process all mail received;
(f) for all notices, motions, orders or other pleadings or
documents served, prepare and file or cause to be filed with the
Clerk an affidavit or certificate of service within seven business
days of service;
(g) process all proofs of claim received, including those
received by the Clerk, check the processing for accuracy and
maintain the original proofs of claim in a secure area;
(h) maintain the official claims register for each Debtor on
behalf of the Clerk; upon the Clerk's request, provide the Clerk
with certified, duplicate unofficial Claims Registers; and specify
in the Claims Registers the following information for each claim
docketed: (i) the claim number assigned, (ii) the date received,
(iii) the name and address of the claimant and agent, if
applicable, that filed the claim, (iv) the amount asserted, (v)
the asserted classification(s) of the claim (e.g., secured,
unsecured, priority, etc.), (vi) the applicable Debtor and (vii)
any disposition of the claim;
(i) provide public access to the Claims Registers, including
complete proofs of claim with attachments, if any, without charge;
(j) implement necessary security measures to ensure the
completeness and integrity of the Claims Registers and the
safekeeping of the original claims;
(k) record all transfers of claims and provide any notices of
such transfers as required by Bankruptcy Rule 3001(e);
(l) relocate, by messenger or overnight delivery, all of the
court-filed proofs of claim to the offices of Prime Clerk, not
less than weekly;
(m) upon completion of the docketing process for all claims
received to date for each case, turn over to the Clerk copies of
the Claims Registers for the Clerk's review;
(n) monitor the Court's docket for all notices of appearance,
address changes, and claims-related pleadings and orders filed and
make necessary notations on and/or changes to the claims register
and any service or mailing lists, including to identify and
eliminate duplicative names and addresses from such lists;
(o) identify and correct any incomplete or incorrect
addresses in any mailing or service lists;
(p) assist in the dissemination of information to the public
and respond to requests for administrative information regarding
these chapter 11 cases as directed by the Debtors or the Court,
including through the use of a case website and/or call center;
(q) monitor the Court's docket in these chapter 11 cases and,
when filings are made in error or containing errors, alert the
filing party of such error and work with them to correct any such
error;
(r) if these chapter 11 cases are converted to cases under
chapter 7 of the Bankruptcy Code, contact the Clerk's office
within three days of notice to Prime Clerk of entry of the order
converting the cases;
(s) 30 days prior to the close of these chapter 11 cases, to
the extent practicable, request that the Debtors submit to the
Court a proposed order dismissing Prime Clerk as Claims and
Noticing Agent and terminating its services in such capacity upon
completion of its duties and responsibilities and upon the closing
of these chapter 11 cases;
(t) within seven days of notice to Prime Clerk of entry of an
order closing these chapter 11 cases, provide to the Court the
final version of the Claims Registers as of the date immediately
before the close of the chapter 11 cases; and
(u) at the close of these chapter 11 cases, (i) box and
transport all original documents, in proper format, as provided by
the Clerk's office, to (A) the applicable Federal Records Center
or
(B) any other location requested by the Clerk's office; and (ii)
docket a completed SF-135 Form indicating the accession and
location numbers of the archived claims.
Prior to the Petition Date, the Debtors provided Prime Clerk a
retainer in the amount of $60,000.
Shai Y. Waisman, CEO of Prime Clerk LLC, attests that neither
Prime Clerk nor any of its partners or employees hold or represent
any interest materially adverse to the Debtors' estates with
respect to any matter upon which Prime Clerk is to be engaged, and
he believes that Prime Clerk is a "disinterested person" as that
term is defined in section 101(14) of the Bankruptcy Code.
The Agent can be reached through:
Shai Y. Waisman
Prime Clerk LLC
830 3rd Avenue, 9th Floor
New York, NY 10022
Tel: (212) 257-5450
Email: swaisman@primeclerk.com
About Toys "R" Us
Toys "R" Us, Inc., is an American toy and juvenile-products
retailer founded in 1948 and headquartered in Wayne, New Jersey,
in the New York City metropolitan area.
Merchandise is sold in 880 Toys "R" Us and Babies "R" Us stores in
the United States, Puerto Rico and Guam, and in more than 780
international stores and more than 245 licensed stores in 37
countries and jurisdictions. Merchandise is also sold at
e-commerce sites including Toysrus.com and Babiesrus.com.
On July 21, 2005, a consortium of Bain Capital Partners LLC,
Kohlberg Kravis Roberts and Vornado Realty Trust invested $1.3
billion to complete a $6.6 billion leveraged buyout of the
company.
Toys "R" Us is now a privately owned entity but still files with
the Securities and Exchange Commission as required by its debt
agreements.
The Company's consolidated balance sheet showed $6.572 billion in
assets, $7.891 billion in liabilities, and a stockholders' deficit
of $1.319 billion as of April 29, 2017.
Toys "R" Us, Inc. and certain of its U.S. subsidiaries and its
Canadian subsidiary voluntarily filed for relief under Chapter 11
of the Bankruptcy Code (Bankr. E.D. Va. Lead Case No. Case No.
17-34665) on Sept. 19, 2017. Judge Keith L. Phillips is the case
judge.
In addition, the Company's Canadian subsidiary voluntarily
commenced parallel proceedings under the Companies' Creditors
Arrangement Act ("CCAA") in Canada in the Ontario Superior Court
of Justice.
The Company's operations outside of the U.S. and Canada, including
its 255 licensed stores and joint venture partnership in Asia,
which are separate entities, are not part of the Chapter 11 filing
and CCAA proceedings.
Kirkland & Ellis LLP is serving as principal legal counsel to Toys
"R" Us, Alvarez & Marsal is serving as restructuring advisor and
Lazard is serving as financial advisor. Prime Clerk LLC is the
claims and noticing agent.
Grant Thornton is the monitor appointed in the CCAA case.
TOYS "R" US: $375M Int'l DIP Facility Has Interim Approval
----------------------------------------------------------
Toys "R" Us, Inc., and its debtor-affiliates filed a motion asking
the U.S. Bankruptcy Court for the Eastern District of Virginia to
authorize Tru Taj LLC and Tru Taj Finance, Inc., to obtain from
consenting beneficial holders of the 12.00% Senior Notes due 2021
of the issuers senior secured postpetition financing on a
superpriority priming lien basis in the aggregate principal amount
of up to $375 million.
Prepetition, on Aug. 16, 2016, Tru Taj LLC and Tru Taj Finance,
Inc. issued $441.2 million of 12.00% senior secured notes due
August 15, 2021 (the "Prepetition Taj Senior Notes"), governed by
a First Supplemental Indenture, dated as of August 26, 2016, with
Wilmington Trust, N.A., as trustee and collateral trustee
("Prepetition Notes Agent"). As of the Petition Date, $583
million in aggregate principal amount of Prepetition Taj Senior
Notes remains outstanding.
An ad hoc group of Taj Noteholders have agreed to provide $375
million in incremental notes to support the Debtors' international
operations (the "International DIP Term Loa"). The group of Taj
Noteholders also agreed to waive certain defaults under the
Prepetition Taj Notes and to forbear from exercising rights and
remedies pursuant to a default against the Debtors (the "Taj
Waiver").
The Debtors commenced the Chapter 11 cases with firm commitments
for approximately $3.125 billion of combined postpetition
financings to support their North American and international
businesses at the most capital intensive, and important, time in
the Debtors' fiscal year.
By this motion, the Debtors request approval of approximately $375
million of postpetition financing and related relief to support
the Debtors' international business and help fund the
administrative expense of the Chapter 11 cases. The Debtors also
seek approval to use cash collateral.
Nov. 24, which is known as Black Friday, is approximately 10 weeks
away, and the holiday shopping season occurs over the following
weeks. During this time of year, the Debtors normally focus on
the capital-intensive process of building inventory and securing
exclusive products in anticipation of the holiday season. This
year, though, the Debtors' supply chain has frozen as vendors
withdrew trade terms in anticipation of the commencement of these
cases. Only the proposed International DIP Facility will thaw
that pipeline and restart the flow of inventory to the Non-Debtor
Subsidiaries' shelves in time to save the holiday season for the
benefit of all of the Debtors' estates, their stakeholders, and
parents and children everywhere.
International Operations
The Tru Taj Debtors determined that they would require access to
both postpetition financing sufficient to provide liquidity to
administer the Tru Taj Debtors' estates during these chapter 11
cases and access to the Cash Collateral securing such postpetition
financing. Among other things, the Tru Taj Debtors' international
affiliates need liquidity to protect the equity value of their
foreign subsidiaries, which include operating entities throughout
Europe, Asia, and Australia. These Non-Debtor Subsidiaries must
pay vendors and other participants in their supply chain ahead of
the important holiday season and maximize the value of all of the
Debtors' entities. The Debtors determined that it was necessary
to obtain financing to support the Non-Debtor Subsidiaries, among
other reasons, because those entities are the ultimate indirect
subsidiaries of Toys "R" Us, Inc., the Debtors' ultimate parent
company. Therefore, any harm to the value of the Non-Debtor
Subsidiaries' estates will directly and negatively affect the
value of the Debtors' estates.
Aside from the Non-Debtor Subsidiaries inability to adequately
fund operations, the costs associated with administering these
chapter 11 cases will also impose significant demands on the Tru
Taj Debtors' liquidity. Immediate access to the International DIP
Facility and Cash Collateral, if any, is essential to not only
meet working capital and business operating needs, but also to
fund the administration of these chapter 11 cases, enabling the
Debtors and their stakeholders to stabilize their business and
develop a consensual and value-maximizing plan of reorganization.
Terms of International Financing
The salient terms of the International DIP Facility are:
* Issuer(s): Tru Taj LLC, Tru Taj Finance, Inc.
* Guarantor(s): Toys "R" Us, Inc., Toys "R" Us, Europe, LLC,
TRU Taj Holdings 1, LLC, TRU Taj Holdings 2 Limited, TRU Taj
Holdings 3, LLC, TRU (Holdings) Limited, and TRU Taj (Europe)
Holdings, LLC
* Lenders: Consenting beneficial holders of the 12.00% Senior
Notes due 2021 of the Issuers.
* Entities with Interests in Cash Collateral: Prepetition
Noteholders
* Term: Stated Maturity Date of 16 months from date of
Issuance.
* Commitments: $375,000,000
* Interest Rates: 11%.
* Milestones: None.
The Tru Taj Debtors will pay to the Prepetition Notes Agent an
amount equal to interest accrued on the principal amount of the
Prepetition Notes Obligations at the applicable non-default rate
set forth in the Prepetition Indenture, commencing on the Petition
Date and payable on the interest payment dates set forth in the
prepetition notes documents.
The Tru Taj Debtors will grant to the International DIP Agent for
the benefit of itself and the DIP Noteholders: (i) valid, binding,
enforceable, non-avoidable, properly perfected liens, and priming
liens as applicable, on the DIP collateral, including all property
constituting cash collateral, if any, which liens will be subject
to the priorities set forth in the DIP court orders and (ii)
allowed superpriority administrative expense claims for all
obligations owing to the International DIP Agent under the
International DIP Documents which DIP Liens and DIP Superpriority
Claims will be junior and subordinate to the carve out and
otherwise subject to the priorities set forth in the DIP court
orders and the applicable International DIP Documents.
The Tru Taj Debtors want to pay the principal, interest, fees,
expenses, and other amounts payable under the International DIP
Documents as such become earned, due, and payable. The Tru Taj
Debtors also want to use the prepetition collateral, including
cash collateral of the Prepetition Noteholders under the
Prepetition Taj Senior Notes.
The Tru Taj Debtors also ask for authorization to use cash
collateral.
The Debtors request that the Court schedule the final hearing
within approximately 21 days of the commencement of these chapter
11 cases to consider approval of this motion on a final basis.
Interim Approval Granted
The Court has granted interim approval to the Motion. The TAJ
Debtors are authorized to borrow not more than $100 million on an
interim basis. A hearing to consider final approval of the entire
$375 million DIP financing package is scheduled for October 3,
2017 at 4:00 p.m.
A copy of the Debtors' Motion is available at:
http://bankrupt.com/misc/veb17-34665-32.pdf
The Supporting Noteholders and the DIP Noteholders tapped Paul,
Weiss, Rifkind, Wharton & Garrison, LLP, Linklaters LLP and
Whiteford Taylor Preston, LLP as counsel.
The lead attorneys of the DIP Noteholders and the Supporting
Noteholders can be reached at:
Paul, Weiss, Rifkind, Wharton & Garrison LLP
1285 Avenue of the Americas, New York, New York
Attn: Brian S. Hermann, Esq.
Samuel Lovett, Esq.
Counsel to the DIP Agent:
Porter Hedges LLP
1000 Main Street, 36th Floor
Houston, Texas 77002
Attn: Eric M. English
Counsel to the Prepetition Notes Agent
Kilpatrick Townsend & Stockton LLP
1100 Peachtree Street NE
Atlanta, Georgia 30309-4528
Attn: Todd C. Meyers, Esq.
About Toys "R" Us
Toys "R" Us, Inc., is an American toy and juvenile-products
retailer founded in 1948 and headquartered in Wayne, New Jersey,
in the New York City metropolitan area.
Merchandise is sold in 880 Toys "R" Us and Babies "R" Us stores in
the United States, Puerto Rico and Guam, and in more than 780
international stores and more than 245 licensed stores in 37
countries and jurisdictions. Merchandise is also sold at
e-commerce sites including Toysrus.com and Babiesrus.com.
On July 21, 2005, a consortium of Bain Capital Partners LLC,
Kohlberg Kravis Roberts and Vornado Realty Trust invested $1.3
billion to complete a $6.6 billion leveraged buyout of the
company.
Toys "R" Us is now a privately owned entity but still files with
the Securities and Exchange Commission as required by its debt
agreements.
The Company's consolidated balance sheet showed $6.572 billion in
assets, $7.891 billion in liabilities, and a stockholders' deficit
of $1.319 billion as of April 29, 2017.
Toys "R" Us, Inc. and certain of its U.S. subsidiaries and its
Canadian subsidiary voluntarily filed for relief under Chapter 11
of the Bankruptcy Code (Bankr. E.D. Va. Lead Case No. Case No.
17-34665) on Sept. 19, 2017. Judge Keith L. Phillips is the case
judge.
In addition, the Company's Canadian subsidiary voluntarily
commenced parallel proceedings under the Companies' Creditors
Arrangement Act ("CCAA") in Canada in the Ontario Superior Court
of Justice.
The Company's operations outside of the U.S. and Canada, including
its 255 licensed stores and joint venture partnership in Asia,
which are separate entities, are not part of the Chapter 11 filing
and CCAA proceedings.
Kirkland & Ellis LLP is serving as principal legal counsel to Toys
"R" Us, Alvarez & Marsal is serving as restructuring advisor and
Lazard is serving as financial advisor. Prime Clerk LLC is the
claims and noticing agent.
Grant Thornton is the monitor appointed in the CCAA case.
TOYS "R" US: JAKKS to Report Loss Due to Toys R Us Woes
--------------------------------------------------------
JAKKS Pacific, Inc. on Sept. 20 disclosed that the Company does
not anticipate any long-term material adverse impact from the Toys
'R' Us bankruptcy filing. The uninsured portion of the amounts
due from Toys 'R' Us represents less than 3% of the Company's
outstanding accounts receivables as of September 18, 2017. The
Company also stated it is not known yet what the recovery will be
on such uninsured receivables. Sales to Toys 'R' Us were
anticipated to account for approximately 5% to 6% of the Company's
net sales for the third and fourth quarters, but the Company does
not know what amount of such sales will be realized.
JAKKS now expects to recognize charges against income for the 2017
fiscal year, including cash charges related to the write-off of
bad debt and minimum guarantee shortfalls, and non-cash charges
related to the impairment of certain assets including goodwill
from acquisitions. The Company is revising its forecast since it
now expects to sustain a net loss and negative earnings per share
for the year, but still expects to have positive EBITDA, as
adjusted, for the year, although not higher than the prior year,
as previously announced. JAKKS otherwise anticipates no
significant impact on its ability to execute on-going corporate
initiatives and business operations.
JAKKS CEO & Chairman Stephen Berman said, "2017 continues to
present a challenging retail environment, which has now been
further disrupted by the Toys 'R' Us Chapter 11 filing.
Nevertheless, the announced availability of DIP financing leaves
us optimistic that we can resume our relationship with Toys 'R' Us
as one of its significant suppliers."
Mr. Berman continued, "For the past 22 years, since the founding
of JAKKS Pacific in 1995, Toys 'R' Us has been one of JAKKS' most
significant business partners. Together, the companies have
brought new and innovative toy products to millions of children
around the world. The Chapter 11 filing by Toys 'R' Us and its
announcement of available financing for its continued operations
is expected to provide the opportunity for Toys 'R' Us, together
with JAKKS, to continue to provide high-quality and exciting toy
products for many years to come. JAKKS appreciates the
relationship that has existed throughout the years and looks
forward to the relationship continuing to grow and flourish."
About JAKKS Pacific, Inc.
JAKKS Pacific, Inc. -- http://www.jakks.com-- is a designer,
manufacturer and marketer of toys and consumer products sold
throughout the world, with its headquarters in Santa Monica,
California. JAKKS Pacific's popular proprietary brands include
BIG-FIGS(TM), XPV(R), Max Tow(TM) and Friends, Disguise(R), Moose
Mountain(R), Funnoodle(R), Maui(R), Kids Only!(R); a wide range of
entertainment-inspired products featuring premier licensed
properties; and, C'est Moi(TM), a youth skincare and make-up
brand. Through JAKKS Cares, the company's commitment to
philanthropy, JAKKS is helping to make a positive impact on the
lives of children.
About Toys "R" Us
Toys "R" Us, Inc., is an American toy and juvenile-products
retailer founded in 1948 and headquartered in Wayne, New Jersey,
in the New York City metropolitan area.
Merchandise is sold in 880 Toys "R" Us and Babies "R" Us stores in
the United States, Puerto Rico and Guam, and in more than 780
international stores and more than 245 licensed stores in 37
countries and jurisdictions. Merchandise is also sold at
e-commerce sites including Toysrus.com and Babiesrus.com.
On July 21, 2005, a consortium of Bain Capital Partners LLC,
Kohlberg Kravis Roberts and Vornado Realty Trust invested $1.3
billion to complete a $6.6 billion leveraged buyout of the
company.
Toys "R" Us is now a privately owned entity but still files with
the Securities and Exchange Commission as required by its debt
agreements.
The Company's consolidated balance sheet showed $6.572 billion in
assets, $7.891 billion in liabilities, and a stockholders' deficit
of $1.319 billion as of April 29, 2017.
Toys "R" Us, Inc. and certain of its U.S. subsidiaries and its
Canadian subsidiary voluntarily filed for relief under Chapter 11
of the Bankruptcy Code (Bankr. E.D. Va. Lead Case No. Case No.
17-34665) on Sept. 19, 2017. Judge Keith L. Phillips is the case
judge.
In addition, the Company's Canadian subsidiary voluntarily
commenced parallel proceedings under the Companies' Creditors
Arrangement Act ("CCAA") in Canada in the Ontario Superior Court
of Justice.
The Company's operations outside of the U.S. and Canada, including
its 255 licensed stores and joint venture partnership in Asia,
which are separate entities, are not part of the Chapter 11 filing
and CCAA proceedings.
Kirkland & Ellis LLP is serving as principal legal counsel to Toys
"R" Us, Alvarez & Marsal is serving as restructuring advisor and
Lazard is serving as financial advisor. Prime Clerk LLC is the
claims and noticing agent.
Grant Thornton is the monitor appointed in the CCAA case.
TOYS "R" US: Bankruptcy No Rating Impact on US CLOs, Fitch Says
---------------------------------------------------------------
The bankruptcy filing by Toys 'R' Us (Toys) has no rating impact
on U.S. broadly syndicated loan (BSL) CLOs, due to the limited
exposure they have to the U.S. retailer and diversified nature of
CLO 2.0 portfolios, according to Fitch Ratings.
Toys is currently held in 37 CLOs of the 333 Fitch-rated BSL U.S.
CLOs and comprises $77.8 million, or less than 0.1% of the total
aggregate underlying collateral balance. The average exposure to
the defaulted issuer is 0.4% across the 37 CLOs, with KVK CLO
2016-1 Ltd. reporting the highest percentage exposure to Toys at
1.2% of the portfolio, according to the Aug. 3 trustee report.
However, KVK CLO 2016-1 exposure is in the form of domestic and
Canadian A-1 tranches expected to have recovery in the 91% to 100%
range.
Twenty-seven CLOs from 11 CLO managers that had gone effective by
Jan. 1, 2017 and held Toys' loans reduced their beginning-of-year
exposure to the current $56.7 million from $66.2 million,
including two CLOs managed by Octagon that sold out of the loans
completely.
At the same time, four CLOs, managed by KVK and Och-Ziff,
increased exposure to Toys in 2017. An additional 12 CLOs now have
some exposure to Toys' loans, including five CLOs that went
effective in 2017.
Trading of Toys' loans across all Fitch-rated CLOs was modest:
$15.6 million of notional was sold across 13 CLOs year to date.
The domestic first-in last-out (FILO) loan A-1, Canadian A-1 FILO
loan and B-4 term loan were sold at average prices of 100.4, 99.9
and 83.7, respectively. On the other hand, a total of $8.3 million
of notional was purchased in 12 CLOs, including the B-3 and B-4,
at average prices of 91.5 and 84, respectively.
The haircuts to CLO overcollateralization (OC) cushions will vary
by a tranche held in a particular CLO, due to the variability in
recovery estimates from rating agencies and market prices. The
recovery value for the purpose of OC calculation is the lower of
the market value and the recovery value assigned by a rating
agency.
Both domestic and Canadian A-1 tranches have RR1 (91%-100%)
recovery ratings from Fitch and currently marked in the mid-90s,
based on Markit data. On the other hand, B-2/B-3 tranches carry
RR4 (31%-50%) recovery rating and are marked in the low 50s, while
B-4 tranche recovery is estimated as RR2 (71%-90%) and marked in
the mid-60s. Canadian and domestic A-1 tranches comprise
approximately $34.1 million in notional value, while B-4 tranches
makes up approximately $30.6 million and B-2/B-3 loans $6.3
million. $6.7 million exposure represents senior unsecured term
loan issued by US Property Co. I, LLC's, which was not part of the
bankruptcy filing, to which Fitch assigns RR1 (91%-100%) and is
currently marked in the low 90s.
The overall retail exposure across Fitch-rated CLO comprises 5.7%
of the aggregate portfolio, down from 7.3% a year ago. Loans of
retail issuers rated 'CCC+' and lower account for 0.6%. These
retail issuers on the Loans of Concern list make up roughly 0.2%
of the overall Fitch-rated CLO portfolio. Despite continuing
struggles of overleveraged brick and mortar retailers, CLO
exposure remains well contained.
================================
T R I N I D A D & T O B A G O
================================
LOLLABEE CELLULAR: Gets Court Order to Pay TT$9 Million Debt
------------------------------------------------------------
Trinidad Express reports that Lollabee Cellular Ltd, which was up
until recently an authorized Digicel dealer, has been ordered by
the High Court to clear an almost TT$9 million debt owed to the
telecommunications giant from in-store bill payments, or risk the
chance of having its assets seized.
The order was made last month, after Lollabee failed to enter a
defence in a breach of contract lawsuit filed against it by
Digicel, after Lollabee did not remit the full sum of monies
collected on the company's behalf for the period December 2016 to
March 2017, according to Trinidad Express.
Even though Lollabee had paid Digicel a total of $5,216,700, prior
to the court action, it is still owing an additional
TT$8,873,953.45. And despite the court making its ruling early
last month, the debt is yet to be paid, the report notes.
According to court documents, on November 21, 2013, by way of a
partner dealer agreement, Digicel appointed Lollabee Cellular as
one of its independent and exclusive dealers, the report relays.
The agreement stated that Lollabee would collect payments for
telecommunications services from Digicel subscribers for six
premises in San Fernando, Point Fortin, West Mall, Trincity,
Princes Town and Siparia, the report adds.
=================
V E N E Z U E L A
=================
VENEZUELA: Trump Adds Country to New Travel Ban List
----------------------------------------------------
The Latin America Herald reports that US President Donald Trump
disclosed new travel restrictions for eight countries, replacing
the previous ban on six Muslim-majority countries.
The countries affected by the new measure are Iran, Libya, Syria,
Yemen, Somalia, Chad, North Korea and Venezuela, Trump said in an
official statement obtained by The Latin America Herald.
The new measures, which will take effect on Oct. 18, are aimed at
"enhancing vetting capabilities and processes for detecting
attempted entry into the United States by terrorists or other
public-safety threats," the report notes.
The first travel ban, which was issued in March and came into
effect in late June, prohibited the entry of all refugees for 120
days and imposed a 90-day ban on the entry of citizens from six
Muslim-majority countries -- Iran, Somalia, Sudan, Syria, Yemen
and Libya, the report relays.
The new restrictions are based on a worldwide review of
information that the affected countries share with the US, and are
neither subject to religion nor race, senior government officials
said in a press conference, the report notes.
"These restrictions are vital to national security," a senior
official said, the report discloses.
Three countries -- Chad, North Korea and Venezuela -- have been
added to the list, while restrictions on Sudan have been lifted
due to improved cooperation with the US authorities, government
representatives said, the report notes.
According to Trump's statement, Venezuela was included on the new
list because "the government in Venezuela is uncooperative in
verifying whether its citizens pose national security or public-
safety threats," the report relays.
The US president explained that the Venezuelan government "fails
to share public-safety and terrorism-related information
adequately," and "has been assessed to be not fully cooperative
with respect to receiving its nationals subject to final orders of
removal from the United States," says the report.
The report relays that President Trump added that the
restrictions, therefore, focus only on "government officials of
Venezuela who are responsible for the identified inadequacies."
The US president announced the first travel ban on Jan. 27, but
had to issue a new version in March after being overturned in
court, the report says.
The second version dropped Iraq from the list and prohibited the
entry of Syrian refugees for 120 days, unlike the original one
which had prohibited them indefinitely, the report adds.
As reported in the Troubled Company Reporter-Latin America on
Sept. 1, 2017, Fitch Ratings has taken the following rating
actions on Venezuela's sovereign ratings:
-- Long-term foreign and local currency IDRs downgraded to 'CC'
from 'CCC';
-- Senior unsecured debt downgraded to 'CC' from 'CCC';
-- Short-term foreign and local currency IDRs affirmed at 'C';
-- Country ceiling downgraded to 'CC' from 'CCC'.
VENEZUELA: Runs Short of Gasoline
---------------------------------
The supply of gasoline in Venezuela, the country with the world's
largest oil reserves, has suffered continuous shortages for
several months in Caracas and throughout the interior, national
media and individuals consulted by EFE said.
The daily El Nacional said that the lines of cars at service
stations in Caracas "diminished slightly due to the arrival of
tanker trucks from PDVSA (the state-run oil company Petroleos de
Venezuela)," according to EFE News.
However, the newspaper said those gas stations were selling only
91-octane gasoline, which has annoyed motorists whose vehicles
require fuel with other octane ratings, the report notes.
EFE notes that in at least three service stations on the
Venezuelan capital's east side, dozens of people were lined up to
fill their gas tanks.
Residents in the states of Trujillo, Zulia and Lara in the west
and Bolivar in the south told EFE that over the last few weeks
they have had to resort to a few specific places to obtain
gasoline, since many service stations are closed while others open
just once a week.
Early this month, the Venezuelan opposition warned about the
shortage of gasoline in the eastern part of the country, and
called on the respective authorities to do something about "this
serious situation," the report adds.
Last March, there was a breakdown in the gasoline supply in four
central Venezuelan states, the report relays. At that time, PDVSA
said the shortages were caused by the "delay in gasoline shipping
along the coast."
As reported in the Troubled Company Reporter-Latin America on
Sept. 1, 2017, Fitch Ratings has taken the following rating
actions on Venezuela's sovereign ratings:
-- Long-term foreign and local currency IDRs downgraded to 'CC'
from 'CCC';
-- Senior unsecured debt downgraded to 'CC' from 'CCC';
-- Short-term foreign and local currency IDRs affirmed at 'C';
-- Country ceiling downgraded to 'CC' from 'CCC'.
***********
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
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latest balance sheets publicly available a day prior to
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definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
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***********
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., Washington, D.C.,
USA, Marites O. Claro, Joy A. Agravante, Rousel Elaine T.
Fernandez, Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A.
Chapman, Editors.
Copyright 2017. All rights reserved. ISSN 1529-2746.
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contact Peter A. Chapman at 215-945-7000 or Joseph Cardillo at
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