/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/171121.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, November 21, 2017, Vol. 18, No. 231 Headlines B R A Z I L BANCO VOTORANTIM: S&P Rates New Perpetual Tier 1 Notes 'CCC+' C H I L E SMU S A: S&P Raises CCR to 'B' on Capital Increase, Outlook Stable D O M I N I C A N R E P U B L I C DOMINICAN REPUBLIC: Key Issues a Hurdle to Goal of 10MM Tourists DOMINICAN REPUBLIC: As Fuel Prices Rise So Will Staples DOMINICAN REP: Industrialist Slams Exclusion of SMEs From Council G U Y A N A GUYANA GOLD: Employees Fired as Probe Launched Into Board Scam J A M A I C A DIGICEL GROUP: Records Increase in First-Half Earnings M E X I C O ELEMENTIA SAB: S&P Affirms 'BB' LT CCR, Outlook Remains Stable P U E R T O R I C O MANUEL MEDIAVILLA: Tranferring Humacao Property to PRLP TOYS R US: Wayne RE Taps Crowley Liberatore as Co-Counsel TOYS "R" US: S&P Rates $1.85BB ABL Revolving Credit Facility 'BB' VITAMIN WORLD: Sets Bidding Procedures for All Assets V E N E Z U E L A VENEZUELA: Debt Restructuring Battle is Brewing Over Country - - - - - =========== B R A Z I L =========== BANCO VOTORANTIM: S&P Rates New Perpetual Tier 1 Notes 'CCC+' ------------------------------------------------------------- S&P Global Ratings said that it assigned its 'CCC+' issue-level rating to Banco Votorantim S.A.'s (BV; BB/Negative/B) proposed perpetual Tier 1 notes. Additionally, S&P attributed intermediate equity content to these notes. Amount of the issuance is yet to be defined. "The rating on this Tier 1 hybrid instrument is five notches below our issuer credit rating on the bank, reflecting the notes' subordinated status to the bank's other senior debt, the risk of partial or untimely payment as a result of the potential cancelation of coupon payments, and the principal write-down risk," said S&P Global Ratings' credit analyst Edgard Dias. The notes should represent less than 1% of BV's total funding base, even though the amount hasn't been defined. Therefore, S&P doesn't expect this issuance to change our funding or capital and earnings assessments on the bank. S&P is also assigning intermediate equity content to the Tier 1 hybrid instrument because we believe it can absorb losses on a going concern basis. The central bank could request the mandatory write-off, if required, for the bank to continue operating-- according to Resolution 4,193--and to suspend interest in case of insufficient distributable profits and accumulated profit reserves. Also, the instrument is perpetual and has no step-up clause, and will have Tier 1 regulatory treatment. The bank will use the proceeds primarily for general corporate purposes. The ratings on BV reflect S&P's view that the parent, Votorantim S.A. (BB+/Negative/--), which controls 50.1% of BV, will continue to provide support to the bank if necessary. In addition, the affirmation reflects the bank's stable performance despite the tightening lending conditions in Brazil for the past two years. BV's management was able to maintain profitability thanks to successfully adjusting risk controls in the used-vehicle lending business for the past three years and following the risky decision to renegotiate some large corporate loans. Most of the country's large banks are pursuing the latter strategy, which may require sizable provisions in the future. S&P's analysis also incorporates the ongoing support to BV from Banco do Brasil S.A (BdB; BB/Negative/B), which owns the remaining stake (49.9%) in the bank, through sizable and long-term funding facilities. RATINGS LIST Banco Votorantim S.A. Issuer credit rating BB/Negative/B New Rating Banco Votorantim S.A. Junior Subordinated CCC+ ========= C H I L E ========= SMU S A: S&P Raises CCR to 'B' on Capital Increase, Outlook Stable ------------------------------------------------------------------ S&P Global Ratings raised its corporate credit rating on SMU S.A. y Filiales to 'B' from 'B-'. The outlook is stable. S&P said, "At the same time, we raised our issue-level ratings on the company's senior unsecured bond to 'B', at the same level as the issuer- credit rating because we believe there is no significant structural subordination since priority liabilities represent less than 10% of total consolidated debt." S&P said, "The upgrade reflects our expectation that SMU will reduce its leverage with proceeds from the recent capital increase used to prepay around 50% of its outstanding international bond during 2018. Additionally, the company has recently announced that it has reached an agreement to sell its home improvement subsidiary, subject to due diligence and regulatory approvals, and we expect it will use net proceeds of around $75 million to reduce debt as well during 2018. All in all, we are not expecting faster deleveraging compared to our previous forecasts because, although the company continues to post gradual improvement in operating margins, sluggish domestic demand in Chile, and very low food inflation have limited the expected growth in revenues and cash flow generation. Nevertheless, we believe the asset sale and capital increase are proof of the company's strong commitment to reducing its leverage. Also, such a debt reduction, coupled with refinancing transactions the company has executed throughout the year, will help to reduce interest expense and underpin cash flow generation. Pro forma for the transaction, we expect adjusted debt to EBITDA to fall to about 5.0x-5.5x in 2018 from 6.5x-7.0x by year end 2017 and EBITDA interest coverage to strengthen to closer to 2.5x from around 2.0x. "The stable outlook reflects our expectation that the company will maintain a good market position in the competitive Chilean food retail market and that it will remain committed to gradually strengthening operating efficiency and cash flow generation and reduce its still high leverage. The stable outlook is consistent with adjusted debt to EBITDA of about 6.5x-7.0x in 2017 and between 5.0x and 5.5x in 2018, with adjusted EBITDA interest coverage of close to 2.0x in 2017 and closer to 2.5x in 2018." =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REPUBLIC: Key Issues a Hurdle to Goal of 10MM Tourists ---------------------------------------------------------------- Dominican Today reports that Dominican Republic Tourism mogul Frank Rainieri warned that although president Danilo Medina wasn't wrong to set the goal of 10 million tourists, the current tourism growth won't be sustainable if key issues aren't dealt with. After noting that Medina has taken important steps to boost the growth goal proposed for 2022, such as road construction and amending the tourism incentive law, Mr. Rainieri said it's urgent to strengthen the areas of infrastructure, legal security and tourism promotion, according to Dominican Today. "We have to reach higher levels of institutionalism and control and we lack coherence in the laws related to the sector to achieve sustainable development and growth during the next 20 years," said the CEO of Grupo Puntacana, speaking at an event to mark the 40th anniversary of the Dominican Tourism Press Association (ADOMPRETUR), the report notes. As reported in the Troubled Company Reporter-Latin America on Nov. 20, 2017, Fitch Ratings has affirmed Dominican Republic's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'BB-' with a Stable Outlook. DOMINICAN REPUBLIC: As Fuel Prices Rise So Will Staples ------------------------------------------------------- Dominican Today reports that National Business Council President Pedro Brache stated concern over rising fuel prices, a situation he affirms could force retailers to raise the prices of consumer staples. Mr. Brache said, however, that he expects the prices of goods to remain stable, due to the low inflation and the high competition among imported products, according to Dominican Today. The business leader said that the most recent jumps in fuel prices affect operating costs of companies, "which could be reflected in an upward trend in some commodity prices," the report relays. "Business leaders analyze whether the increase in fuels represents a specific measure of the Industry and Commerce Ministry, or a long-term provision, since some products (prices) would have to be raised." The report relays that Mr. Brache explained, however, that "now raising prices is not as easy as it was before", mainly due to economic stability and the competition of products brought from abroad. "We hope that this is a specific thing and that fuels will go back down, because if not they're going to affect the prices of the products," he added. As reported in the Troubled Company Reporter-Latin America on Nov. 20, 2017, Fitch Ratings has affirmed Dominican Republic's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'BB-' with a Stable Outlook. DOMINICAN REP: Industrialist Slams Exclusion of SMEs From Council ---------------------------------------------------------------- Dominican Today reports that Herrera Industries Association (AEIH) President Antonio Taveras reiterated that the continued exclusion of the SMEs from the National Competitiveness Council (CNC) is unlawful. "Violation of the law is common currency in the country. But those who wish to live in a State of law cannot ignore this ill. 17 days ago we denounced that president @DaniloMedina's executive order conforming the Competitiveness Council violated the law," tweeted Taveras, according to Dominican Today. He said the exclusion violates Law 1-06 "because it doesn't acknowledge 97% of the country's business sector," the report notes. He said despite the omission on the part of the Presidency, the authorities have yet to respond, the report relays. The report discloses that Mr. Taveras said the violation of the measure and ignoring responsible observations not only sends a "double negative" signal to society and investors, but also contradicts each other when promoting competitiveness. "From the @AEIH_RD we will continue to point out all State or private practices that violate the rule of law and affect productive dynamics of the country," he said, the report relays. He added that although the official response has been silence, the industrialists will continue to denounce the practices that affect national production and the wellbeing of the people and the associates, the report adds. As reported in the Troubled Company Reporter-Latin America on Nov. 20, 2017, Fitch Ratings has affirmed Dominican Republic's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'BB-' with a Stable Outlook. =========== G U Y A N A =========== GUYANA GOLD: Employees Fired as Probe Launched Into Board Scam --------------------------------------------------------------- Caribbean360.com reports that the Guyana Gold Board (GGB) has fired two of its longstanding employees allegedly involved in some racket of financial irregularities, even as an internal investigation is ongoing. While the identities of the employees have not been disclosed, the Guyana Gold Board has said their service to the organization spans several decades, according to Caribbean360.com. According to Chairman Gabriel Lall, the board unearthed some improprieties just over a month ago, and they had to be quickly addressed, the report notes. "Without going into any detail, let me say that the documentation is thorough, the evidence is persuasive and comprehensive . . .. We do not know where it will lead even though we have our arms around it to a very satisfactory extent," he told reporters at a press conference, the report notes. The Gold Board, because of the nature of its operations, is always in a state of heightened alert to such incidents, the chairman said, the report relays. And although the system is not 100 per cent safe, some amount of disclosure was made, which sparked the investigation, the report discloses. Following the discovery of the inconsistencies, the Gold Board said it was forced to take its investigation as far back as January 1 this year, the report relays. According to the Acting General Manager, Eondrene Thompson, the breach of policy involves millions of dollars, the report notes. The Board of Directors and senior management have agreed that no effort will be spared to ferret out those persons who, through negligence, willful ignorance, or gross and unacceptable improprieties, represent a threat to the enhancement goals and long-term interests of the GGB, the report adds. ============= J A M A I C A ============= DIGICEL GROUP: Records Increase in First-Half Earnings ------------------------------------------------------ RJR News, citing Irish Times newspaper, reports that that Digicel Group recorded an increase in first-half earnings. It said a source, who asked not to be identified, disclosed that earnings rose two per cent, reports RJR News. However, revenue in the second quarter dropped about three per cent when compared to the corresponding period last year as Digicel Group eliminated lower margin wholesale business, the report notes. Adjusted earnings before interest, taxes, depreciation and amortization were about US253 million in the second quarter, in line with the year-earlier performance, the report relays. Excluding the impact of two hurricanes, it would have risen about two per cent, the report says. Digicel Group earlier this year said it would shed as many as 1,500 workers, 18 months after shelving a share sale, the report adds. As reported in the Troubled Company Reporter-Latin America on May 26, 2017, Fitch Ratings has affirmed at 'B' the Long-term Foreign-currency Issuer Default Ratings (IDR) of Digicel Group Limited (DGL) and its subsidiaries, Digicel Limited (DL) and Digicel International Finance Limited (DIFL), collectively referred to as Digicel. The Rating Outlook is Stable. Fitch has also affirmed all existing issue ratings of Digicel's debt instruments. =========== M E X I C O =========== ELEMENTIA SAB: S&P Affirms 'BB' LT CCR, Outlook Remains Stable -------------------------------------------------------------- Since Elementia acquired Giant in November 2016, the Mexico-based building materials company has smoothly integrated the U.S. operations and reported a consistent deleveraging. S&P expects Elementia's adjusted debt to EBITDA to be close to 3.5x at the end of 2017. S&P Global Ratings affirmed its 'BB' long-term corporate credit rating on Elementia S.A.B. de C.V. The outlook remains stable. S&P said, "At the same time, we affirmed our 'BB' issue-level rating on Elementia's $425 million senior unsecured notes due 2025. Moreover, we revised our recovery rating on the notes to '3' (rounded estimate 50%) from '4', indicating our expectation of meaningful recovery prospect for the bondholders in the event of a payment default." Following the closing of its 55% stake buyout of Giant at the end of 2016 (see "Elementia Downgraded To 'BB' From 'BB+' On Acquisition Of A 55% Stake In Giant Cement; Off Watch; Outlook Stable," published Dec. 16, 2016), Elementia has shown a smooth integration process and stabilization of its U.S. operations. The integration is currently on track and requires annual investments of about $30 million through 2017-2019 to recover its full product quality, regain sale volumes, pricing, and market share. S&P said, "Following Giant's acquisition, Elementia's deleveraging has been slightly slower than our original expectation, given the diverse maintenance works and interruptions of operations at its U.S. facilities that it undertook to bring assets back to industry standards. Nonetheless, we expect deleveraging to continue for the next 12 months, reaching adjusted debt to EBITDA slightly below 3.0x in 2018. This should be supported by higher cement volumes in Mexico following the completion of capacity expansion at Elementia's Tula plant, the reopening of its Indiana facility during the first quarter of 2018, and favorable end market conditions for the building materials industry in the Americas." ====================== P U E R T O R I C O ====================== MANUEL MEDIAVILLA: Tranferring Humacao Property to PRLP ------------------------------------------------------- Manuel Mediavilla, Inc., Manuel Mediavilla, and Maydin Melendez ask the U.S. Bankruptcy Court for the District of Puerto Rico to authorize the transfer of Property No. 17,694 located in Humacao, Puerto Rico ("Property A") to PRLP 201 1 Holdings, LLC or its designee free and clear of liens and encumbrances. Prior to the filing of the bankruptcy petition, the Debtors and Banco Popular de Puerto Rico ("BPPR") entered into a Loan Agreement and various agreements complementary thereto, for financing in the approximate sum of $2,700,000 in 2006. PRLP purchased BPPR's rights (including, but not limited to, security and guarantees for the Loan) in 2011. PRLP filed foreclosure proceedings in Sept. 19, 2012, and obtained an order for attachment of property and receivership in 2013 (prior to the Petition Date) in the case captioned PRLP 2011 Holdings, LLC v. Manuel Mediavilia, Imz, er al., Civil No. HSCI 2012-001150 (206), Puerto Rico Court of First Instance, Humacao Section. In order to avoid the foreclosure of their commercial properties and the garnishment of their assets, the Debtors filed for relief pursuant to the provisions of Chapter 11 of the Bankruptcy Code. After extensive litigation, the Debtors and PRLP reached an agreement for the treatment of PRLP's claims under the Debtors Second Plan of Reorganization ("The Agreement dated Dec. 28, 2015"). Even though such agreement was signed on Dec. 28, 2015, the same was not submitted for approval of the Court due to certain inconsistencies between the parties. Therefore, the Debtor moved forward for the approval of their Second Amended Joint Plan of Reorganization filed on Jan. 29, 2016, which the Court confirmed on Sept. 23, 2016. The Bankruptcy Appellate Panel ("BAP") vacated the confirmation order after PRLP appealed the confirmation on Oct. 7, 2016. The BAP further remanded the case to the Bankruptcy Court for further proceedings consistent with the Opinion and Order, and the Judgment. The Debtors decided to abide by the Order of the BAP due to the high litigation costs and need for these Debtors to conclude these proceedings. Therefore, they've submitted on this same date a Motion Submitting Stipulation for the Treatment of PRLP 2011 Holdings, LLC Under Debtor's Third Plan of Reorganization dated Dec. 28, 2015 ("The Motion Submitting Stipulation"), for the approval of the Bankruptcy Court under the provisions of Fed. R. Bank. P. 9019. The Settlement Agreement provides the treatment to PRLP's claims Nos. 1 and 9, under Secured Class 4 and Unsecured Class 6 of the Debtors' Plan of Reorganization, which will be identified as their Third Amended Plan of Reorganization. Under The Settlement Agreement, the treatment to PRLP under Secured Class 4 will be basically the transfer of Debtor Manuel Mediavilla Inc.'s Property A free and clear of liens and in full payment of any and all debt and Debtor Manuel Mediavilla and Maydin Melendez will retain Property No. 11,471 located in Humacao, Puerto Rico ("Property B"), Property No. 5,531 located in Humacao, Puerto Rico ("Property C"); and Property No. 3,311 located in Humaco, Puerto Rico ("Property D") to free and clear of any and all liens, including those from PRLP. The transfer of Property A will take place immediately after the approval, entry and finality of the Order approving the stipulation, the Order approving the Transfer Motion, the issuance of the Order and Writ of Transfer Motion and the order confirming the Debtors' Third Amended Plan of Reorganization. In exchange and in order to avoid any preference actions due to the transfer of the property under this transaction, on the 91st day after the Transfer Date, PRLP will unconditionally release to the Debtors for cancellation purposes, all the Notes over the properties to be retained by the Debtors, i.e., Properties B, C, and D. In accordance with the terms of The Settlement Agreement, Property A will be transferred to PRLP, or its designee, free and clear of liens and encumbrances, as the same are requested by PRLP, or its designee, as contemplated and under the terms and conditions set forth in The Settlement Agreement, which includes, but it is not limited to, the constitution of a right-of-way easement in favor of (i) Property number 11,741 recorded at page 116 of volume 290 of Humacao, Registry of the Property of Humacao and (ii) Property Number 3,311 recorded at page 221 of volume 414 of Humacao to be retained by the Debtors. Furthennore, all existing leases related to Property A, as represented and disclosed by the Debtors, will be assigned to PRLP, or it designee, as part of the transfer of the title of Property A requested. Manuel Mediavilla, Inc. is the owner in fee simple title of Property A. According to Debtor's Schedules, Property A is valued in the amount of $1,750,000. PRLP filed the following claims: (i) Claim No. 1, as amended, in Case No. 13-02800, and (ii) Claim No. 9, as amended, in Case No. 13-02802. These claims are deemed allowed in full. The principal amount owed under the Loan has been reduced as a result of the adequate protection payments made by the Debtors throughout the case and as of this date the total amount owed under the Loan is approximately $1,815,251. The liens and encumbrances that appear of record over Property A are described in the title search, showing that PRLP, or its designee, has priority liens over the same. The transfer value for Property A, for recording purposes only, is $1,600,000. The transfer of Property A to PRLP, or its designee, under the terms and conditions set forth in The Settlement Agreement and upon compliance by the Debtors of the same, will constitute full payment of Claim No. 1 and Claim No. 9, including any unsecured portion. The transfer of the title of Property A, free and clear of the liens and encumbrances requested by PRLP (or its designee) and the constitution of the easements, as well as the segregations, aggregations, perpetual rights of way easements and cancellation of liens and encumbrances required under the Settlement Agreement, will be under the provisions of 11 USC Section 363(t) and 11 USC Section 1123(a)(5), 1141 and exempt from the payment of taxes, stamps and vouchers, pursuant to the provisions of 11 USC Section 1146(a). In the event that any party objects to the transfer of Property A within seven days from the notice, a hearing on said objection will be scheduled by the Court. Unless a party in interest files a timely written objection, the Court will enter the Order approving the Transfer Motion and the corresponding Writ and Order to the Registrar, and the transfer of Property A to PRLP, or its designee, will be completed free and clear of the liens, interests and the encumbrances. Upon the entry of the Order approving the Transfer Motion under the terms of the Settlement Agreement, and the entry of the Order and Writ, PRLP or its designee, will file the Order and Writ for recordation at the Registry of the Property of Puerto Rico, Section of Humacao and file the corresponding Order and Writ at CRIM and the Treasury Department for the Commonwealth of Puerto Rico to: (i) transfer the title of Property A in favor of PRLP, or its designee; and (ii) request the cancellation of any liens that may exist over Property A, which is identified in CRIM and Treasury under cadaster number 304-018-186-02-901. These liens and encumbrances encumber the Property A that, as of the filing of the Motion, will be subject to cancellation as per PRLP's, or its designee, request, appear identified in the records at the Registry of the Property of Puerto Rico: a. Mortgage to secure the payment of a bearer demand mortgage note in the principal amount of $450,000, constituted pursuant to Deed Number 174 executed before Notary Public Julio Cesar Rivera on Sept. 10, 1990, recorded at page 45 overleaf of volume 399 of Humacao, 2nd inscription. b. Mortgage to secure the payment of a bearer demand mortgage note in the principal amount of $500,000, constituted pursuant to Deed Number 216 executed before Notary Public Julio Cesar Rivera on Oct. 5, 1990, recorded at page 46 of volume 399 of Humacao, 3rd inscription. c. Mortgage to secure the payment of a bearer demand mortgage note in the principal amount of $300,000, constituted pursuant to Deed Number 68 executed before Notary Public Julio Cesar Rivera on April 23, 1991, recorded at page 46 of volume 399 of Humacao, 4th inscription. d. Mortgage to secure the payment of a bearer demand mortgage note in the principal amount of $485,000, constituted pursuant to Deed Number 136 executed before Notary Public Julio Cesar Rivera on Sept. 17, 1993, recorded at page 46 overleaf of volume 399 of Humacao, 5th inscription. e. Armotation of complaint filed at Entry 977 of the Book of Daily Entries volume number 912 of the Registry of the Property of Humacao filed by PRLP under Civil Case No. HSCI-2012-01150 in the amount of $2,476,727. Also, subject to cancellation are any statutory liens in favor of CRIM and Treasury, as applicable, encumbering Property A. The payment in full of the claims, if any, in favor of CRIM will be made by the Debtors on or before the date of the Transfer Payment from the proceeds of the rent of October 2017. After the entry of an Order approving the transfer of Property A in accordance with the terms and conditions of The Settlement Agreement by the Court, the title of Property A, free and clear of the liens and encumbrances including, but not limited to, the liens and any outstanding property tax debt, will be transferred in favor of PRLP, or its designee. Simultaneous with the execution of the documents for the segregations and aggregations, PRLP, or its designee, has agreed to constitute: a. a perpetual right-of-way easement ("servidumbre de paso perpetua") in favor of the Grouped Parcel over the portion of land of Property A wherein the north access road to the parking lot is located; b. a non-exclusive easement in favor of Grouped Parcel (for the use of 15 parking spaces located in Property A (directly behind the Grouped Parcel); and c. a perpetual right-of-way easement ("servidumbre de paso perpetua") in favor of the Grouped Parcel through the back (or south) entrance located in Property A through the area specifically depicted. These perpetual rights of way will be recorded in the corresponding section of the Registry of Property simultaneously with the segregations and aggregations described in the Settlement Agreement. All of these transactions will also be exempt from the payment of taxes, stamps and vouchers, pursuant to the provisions of ll USC Section l146(a). For recording purposes, the right-of-way easements detailed in this section will have a value of $1,000 each. It has also been agreed that on the 91st day after the Transfer of Property A, PRLP will unconditionally release all Mortgage Notes over the properties to be retained by the Debtors Manuel Mediavilla, Inc., Manuel Mediavilla and Maydin Melendez identified as Property B, C and D (Property Nos. 11,471, 5,531 and 3,311) as agreed under The Settlement Agreement. Furthermore, time is of the essence of the integrated transaction agreed between the parties. The Court has granted creditors and parties in interest seven days under the provisions of Fed. B. R. Bankr. P. 9006 to submit any objections in writing to this pleading and if no timely objections are filed within that period of time, the Order approving the Motion and the corresponding Writ be entered without further notice or hearing. PRLP can be reached at: PRLP 2011 HOLDINGS, LLC c/o CPG Island Servicing, LLC 270 Munoz Rivera Ave., Suite 201 San Juan, PR 00918 Telephone: (787) 522-8001 About Manuel Mediavilla Manuel Mediavilla, Inc., a/k/a Muebleria Mediavill, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D.P.R. Case No. 13-02800) on April 11, 2013. Manuel Mediavilla Garcia, president, signed the petition. The Debtor scheduled assets of $2,191,098 and liabilities of $2,484,529. The case is assigned to Judge Mildred Caban Flores. The Debtor's counsel is Carmen D. Conde Torres, Esq., at C. Conde & Assoc., in San Juan, Puerto Rico. The Court confirmed the Debtors' Second Amended Joint Plan of Reorganization on Sept. 23, 2016. The confirmation order was vacated by Bankruptcy Appellate Panel on June 16, 2017. TOYS R US: Wayne RE Taps Crowley Liberatore as Co-Counsel --------------------------------------------------------- Wayne Real Estate Parent Company, LLC seeks approval from the U.S. Bankruptcy Court for the Eastern District of Virginia to hire Crowley, Liberatore, Ryan & Brogan, P.C. Crowley will serve as co-counsel with Klehr Harrison Harvey Branzburg, LLP, another firm tapped by Wayne RE to provide legal services to its independent managers Jonathan Foster and Paul Leand. The firm will advise the managers in all conflicts of interest between the Debtor and its shareholders or affiliates. Crowley's hourly rates are: Partners $350 - $300 Associates $200 Paraprofessionals $90 Karen Crowley, Esq., disclosed in a court filing that her firm is a "disinterested person" as defined in section 101(14) of the Bankruptcy Code. The firm can be reached through: Karen M. Crowley, Esq. Crowley, Liberatore, Ryan & Brogan, P.C. 150 Boush Street, Suite 300 Norfolk, VA 23510 Tel: (757) 333-4502 Fax: (757) 333-4514 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. 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. Grant Thornton is the monitor appointed in the CCAA case. Judge Keith L. Phillips presides over the Chapter 11 cases. Kirkland & Ellis LLP and Kirkland & Ellis International LLP serve as the Debtors' bankruptcy counsel. The Debtors hired Kutak Rock LLP as co-counsel; Alvarez & Marsal North America, LLC as restructuring advisor; Lazard Freres & Co. LLC as investment banker; Ernst & Young LLP as auditor; KPMG LLP as tax consultant and internal audit advisor; Prime Clerk LLC as claims and noticing agent; and A&G Realty Partners, LLC as real estate advisor. On Sept. 26, 2017, the U.S. Trustee for Region 4 appointed an official committee of unsecured creditors. The committee hired Kramer Levin Naftalis & Frankel LLP as its bankruptcy counsel; Wolcott Rivers P.C. as local counsel; FTI Consulting Inc. as financial advisor; and Moelis & Company LLC as investment banker. TOYS "R" US: S&P Rates $1.85BB ABL Revolving Credit Facility 'BB' ----------------------------------------------------------------- S&P has assigned its point-in-time issue-level ratings to various debtor-in-possession (DIP) financings for U.S.-based Toys "R" Us, Inc. (TRU), a toy and baby goods retailer that is currently operating under the protection of Chapter 11 of the U.S. Bankruptcy Code. The DIP financings consist of a $1.85 billion ABL revolving credit facility ('BB') and $450 million FILO ABL term loan ('BB-') extended to Toys "R" Us-Delaware, Inc. and TRU's Canadian subsidiary; Toys "R" Us-Delaware's $450 million term loan ('BB-'); and TRU Taj LLC and TRU Taj Finance, Inc.'s $375 million notes ('B+'). All facilities have received final court approval. S&P Global Ratings assigned the following ratings to the TRU DIP facilities: -- $1.85 billion ABL revolving credit facility ('BB'); $450 million FILO ABL term loan ('BB-').; -- Toys "R" Us-Delaware's $450 million term loan ('BB-'); and -- TRU Taj LLC and TRU Taj Finance, Inc.'s $375 million notes ('B+'). These DIP loan ratings are point-in-time ratings effective only for the date of this report. S&P said, "We will not review, modify, or provide ongoing surveillance of the ratings. We based the ratings on various items, including the court orders and the DIP credit agreements as well as our views on the likelihood of full repayment through the company's emergence as well as recovery prospects in the event of liquidation becomes necessary." -- On Sept. 18, 2017, TRU and certain of its subsidiaries filed for voluntary protection under Chapter 11 of the U.S. Bankruptcy Code. TRU's Canadian subsidiary filed for protection in Canada under the Companies' Creditors Arrangement Act (CCAA). On Oct. 24, 2017, the U.S. bankruptcy court issued a final order authorizing access to the various facilities. The Canadian court has also approved the DIP financing for the Canadian subsidiary, which has the ability to borrow a portion of the ABL revolver. -- The DIP facilities will help support reorganization plans and enable normal post-petition operation of business, including timely payment of employee wages, benefits, store investment and other obligations on an uninterrupted basis. S&P's rating on a DIP facility primarily captures its view of the likelihood of full cash repayment through the company's reorganization and emergence (S&P's "CRE" assessment). The DIP rating also considers the potential for the company to fully repay the DIP facility if it is not successful in reorganizing, and liquidation of the company becomes necessary. -- S&P's rating on each of the DIP credit facilities incorporates a CRE assessment of 'b+'. -- Except for the rating on the TRU Taj DIP, S&P applied upward enhancements to the CRE based on its view of recovery prospects under a liquidation scenario or distressed sale scenario if the company's efforts to reorganize are unsuccessful. VITAMIN WORLD: Sets Bidding Procedures for All Assets ----------------------------------------------------- Vitamin World, Inc., and its affiliates ask the U.S. Bankruptcy Court for the District of Delaware to authorize the bidding procedures in connection with the sale of substantially all assets at auction. The proposed hearing date of the Motion is Nov. 21, 2017 at 10:00 a.m. (ET). The proposed objection deadline is Nov. 20, 2017 at 12:00 p.m. (ET). During 2017, the Debtors' liquidity was constrained by significant supply chain and ingredient availability disruptions, a struggling retail market, above-market rents and underperforming retail stores. They filed their Chapter 11 Cases to pursue a restructuring of their balance sheets and operations. The Debtors' primary assets include inventory, the majority of which consists of vitamins, minerals, and herbal supplements. They also own a significant amount of equipment, including computer software, store equipment, and warehouse equipment. They own numerous trademarks related to the Vitamin World brand that provide the Debtors a competitive edge in the VMHS market. The Debtors do not own any real property. They instead lease retail locations throughout the United States, Puerto Rico, the U.S. Virgin Islands, and Guam, most of which are located in malls and shopping centers, and distribution centers located in New York and Nevada. They are commencing a process of liquidating the inventory in approximately 140 of their stores. That inventory will be excluded from the Assets to be sold pursuant to the Motion. The Debtors are not soliciting and will not accept bids for the assumption and assignment of individual leases other than bids from landlords on individual leases to which such landlord is a party. They have consulted with counsel to the Committee and counsel to Wells Fargo Bank, N.A. and have incorporated their comments in the Motion. The Debtors' goal is to obtain maximum exposure of their Assets to potential buyers as quickly as possible under the circumstances, and they will consider any transaction that will result in obtaining the highest and best value for their Assets. To that end, they've developed the Bidding Procedures to provide potential purchasers with flexibility to propose an acquisition transaction. The Debtors have retained an investment banker, SSG Advisors, LLC to assist them in negotiating with interested parties, preparing for and initiating marketing efforts, and facilitating due diligence by various parties. As part of the negations with Wells Fargo Bank, the DIP Lender, over the terms and conditions of the DIP financing facility, which has been approved on a final basis by the Court, the Debtors agreed to several milestones related to the sale of their Assets. Based on the experience of the Debtors' restructuring professionals, the Debtors believe it would further the goal of maximizing the value of the Assets to designate one or more parties to serve as a Stalking Horse Purchaser for the sale of the Assets. As is customary, they would likely grant a Stalking Horse Purchaser one or more of a limited break-up fee, expense reimbursement, or other limited bid protections. Accordingly, the Debtors are reserving the right to request that the Court approves the Debtors' selection of a Stalking Horse Purchaser and will provide the Court with appropriate notice thereof. The salient terms of the Bidding Procedures are: a. Bid Deadline: Dec. 18, 2017 at 12:00 p.m. (ET) b. Purchase Price: In the event that there is a Stalking Horse Purchaser, and the Qualifying Bidder wishes to bid on the same Assets that are included in the Stalking Horse Agreement, the aggregate consideration proposed by the Qualifying Bidder must equal or exceed the sum of the amount of (i) the purchase price under the Stalking Horse Agreement, plus (ii) any break-up fee, expense reimbursement, or other bid protection provided under the Stalking Horse Agreement, plus (iii) $100,000 of the purchase price under the Stalking Horse Agreement. c. Deposit: 10% of the total consideration provided under the proposed Transaction Agreement d. Credit Bidding: Any party that wishes to submit a credit bid either as a component, or as the entirety, of the consideration for its bid will identify the amount of the claim and the nature, extent, and priority of the lien upon which its credit bid is premised. e. Auction: The Auction will be held on Dec. 19, 2017 at 10:00 a.m. (ET) at the offices of Saul Ewing Arnstein & Lehr LLP, 1201 N. Market Street, Suite 2300, Wilmington, DE 19801. f. Bid Increments: At least more than $100,000 of the Baseline Bid, g. Sale Hearing: Dec. 21, 2017 at 10 a.m. (ET) h. Deadline to object to adequate assurance: Dec. 20, 2017 at 4:00 p.m. (ET) i. Deadline to Object to Conduct of Auction: Dec. 20, 2017 at 4:00 p.m. (ET) j. Outside Closing: Dec. 22, 2017 A copy of the Bidding Procedures attached to the Motion is available for free at: http://bankrupt.com/misc/Vitamin_World_374_Sales.pdf The Debtors propose to sell their Assets free and clear of any and all Encumbrances. To facilitate the Sale, the Debtors ask authority to potentially assume and assign to any acquirer in a Sale the Assumed Contracts in accordance with the Assumption and Assignment Procedures. The Deadline to serve Assumption Notice is Nov. 29, 2017. The Deadline to object to Assumption Notice (other than adequate assurance) is Dec. 8, 2017 at 4:00 p.m. (ET). The Debtors ask the Court to waive the 14-day stay imposed by Bankruptcy Rule 6004(h) and 6006(d), to the extent applicable. About Vitamin World Vitamin World Inc., VWRE Holdings, Inc. ("RE Holdings") and other related entities sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 17-11933) on Sept. 11, 2017. Headquartered in Holbrook, New York, Vitamin World is a specialty retailer in the vitamins, minerals, herbs and supplements market. The Company offers customers products across all major VMHS and sports nutrition categories, including, supplements, active nutrition, multiples, letter vitamins, health and beauty, herbs, minerals, food and specialty items. When it filed for bankruptcy, Vitamin World was operating out of four distribution centers located in Holbrook, New York; Sparks, Nevada; Riverside, California; and Groveport, Ohio; and 334 retail stores that are mostly located in malls and outlet centers across the United States and its territories. Products are also sold online at http://www.vitaminworld.com/ The Company has 1,478 active employees. Vitamin World estimated assets of $50 million to $100 million and debt of $10 million to $50 million. Katten Muchin Rosenman LLP is the Debtors' bankruptcy counsel. Saul Ewing Arnstein & Lehr LLP is the co-counsel. Retail Consulting Services, Inc., is the Debtors' real estate advisors. RAS Management Advisors, LLC, is the financial advisor. SSG Advisors, LLC, is the Debtors' investment banker. JND Corporate Restructuring is the claims and noticing agent. An Official Committee of Unsecured Creditors has been appointed in the case. The Committee retained Lowenstein Sandler LLP as lead counsel; and Whiteford, Taylor & Preston LLC as Delaware counsel. ================= V E N E Z U E L A ================= VENEZUELA: Debt Restructuring Battle is Brewing Over Country ------------------------------------------------------------ Robin Wiggles at The Financial Times reports that battle lines are being drawn in what promises to be the most complex government bankruptcy in history. And in the shadows lurks a secretive Mexican billionaire who might emerge as a pivotal figure in the upcoming fight, according to The Financial Times. Distressed countries usually never lack for advice, with bankers and lawyers desperate for the prestigious, often well-paying jobs of working on government bankruptcies, the report notes. But Venezuela is an usual and complicated case, the report relays. President Nicolas Maduro earlier this month admitted the country needed to restructure its foreign debts, and after an inauspicious initial meeting with creditors, the government has begun hiring advisers to help guide it through what promises to be a messy situation, the report discloses. People in the industry say one person is emerging as a potentially crucial player in the messy situation: a mysterious, art-loving Mexican billionaire called David Martinez, the report relays. Mr. Martinez runs a hedge fund called Fintech Advisory, and has been involved in almost every sovereign debt restructuring in the past quarter century, according to a rare comment piece he wrote for the Financial Times in 2013. People familiar with Mr. Martinez's activities say the Mexican -- who once reportedly contemplated the clergy before turning to high finance -- often works closely but surreptitiously with governments in stricken countries, the report says. They now say he is getting involved in Venezuela, albeit in an unclear role, the report says. "He's trying to coach these guys through it, while defending his own interests," says a person familiar with the billionaire, the report notes. Mr. Martinez had close ties to Nestor and Cristina Kirchner, the former presidents of Argentina during the country's 2005 debt restructuring, the report relays. "He likes to act as an informal adviser in these situations," says another person familiar with Mr. Martinez's tactics, the report discloses. Mr. Martinez did not respond to requests for comment. Another important operator is Arnold & Porter, a distinguished US law firm, which is advising the government, the report relays. Meanwhile, PDVSA, the Venezuelan state oil company, is working with Hogan Lovells, an Anglo-American firm, the report notes. Both have long-term relationships with their clients, the report relates. Venezuela has also appointed David Syed of Dentons, another big law firm, the report says. At face value, this looks like an able, experienced team, the report discloses. But the reality is more complex, the report relays. Venezuela, PDVSA and many officials in the country -- including vice-president Tareck El Aissami, who is leading the debt talks -- have been sanctioned by the US Treasury's Office of Foreign Assets Control (Ofac), the report relays. That precludes Americans from working with them, prompting some law firms and banks to refuse to work with the regime, the report says. Against that backdrop, Mr. Syed abruptly left his former firm Orrick and moved to Dentons, after the former refused to take on Venezuela as a client, the report notes. Dentons, Arnold & Porter and Hogan Lovells declined to comment, while Orrick said: "David Syed has resigned as a partner in our firm for reasons related to client interests." According to the biography on Orrick's website, since deleted, Mr. Syed has seemingly never worked on a sovereign debt restructuring, the report says. Indeed, lawyers in the field say they can never recall hearing his name until last week. But he has seemingly won the confidence of the Venezuelan government and looks set to become an important figure in the looming restructuring talks, especially with doubts over whether Arnold & Porter and Hogan Lovells will get the Ofac exemptions they need to continue to work with Venezuela, the report notes. As a non-American working from London, Mr. Syed might not need one, even though the work is fraught with legal and reputational risks, the report relays. Any Venezuelan debt restructuring is going to be a Herculean task, given US sanctions, the government's refusal to seek help from the International Monetary Fund and a messy $150 billion debt pile issued by different entities and with varied legal clauses, the report notes. That will complicate a holistic restructuring approach, and could lead to creditors splintering into different groups, the report relays. In Venezuela, hedge funds involved in distressed debt -- sometimes dubbed "vultures" -- are circling, the report relays. Greylock Capital, a US hedge fund, is helping organize a bondholder group, and creditors have held talks with the Washington-based Institute of International Finance, which played a major role in co-ordinating Greece's creditors in its EUR200 billion restructuring, the report relays. This grouping is said to have held talks with William Rhodes, a retired banker who enjoyed a five-decade career at Citigroup and was involved in the sovereign debt crises of Latin America and Asia in the 1980s and 1990s, the report says. Investors say Richard Cooper of Cleary Gottlieb and Mark Walker of Millstein are pitching to advise creditors, the report notes. But a rival group is forming in London, under the aegis of Macrosynergy Partners, an emerging markets-focused hedge fund set up by three former BlueCrest fund managers, according to people familiar with the matter, the report relays. People close to the nascent debt talks say more groups could form, the report notes. "We're all just trying to find out what's happening," says Hans Humes, head of Greylock, the report notes. "But we've started to organise bondholders. We have to speak with one voice on this," he added. As reported in the Troubled Company Reporter-Latin America on Nov. 16, 2017, On Nov. 13, 2017, S&P Global Ratings lowered its long- and short-term foreign currency sovereign credit ratings on the Bolivarian Republic of Venezuela to 'SD/D' from 'CC/C'. The long- and short-term local currency sovereign credit ratings remain at 'CCC-/C' and are still on CreditWatch with negative implications. S&P said, "At the same time, we lowered our issue ratings on Venezuela's global bonds due 2019 and 2024 to 'D' from 'CC'. Our issue ratings on the remainder of Venezuela's foreign currency senior unsecured debt remain at 'CC'. Finally, we affirmed our transfer and convertibility assessment on the sovereign at 'CC'." *********** 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. 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., 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. 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$775 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 A. Chapman at 215-945-7000 or Joseph Cardillo at 856-381-8268. * * * End of Transmission * * *