/raid1/www/Hosts/bankrupt/TCR_Public/110310.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Thursday, March 10, 2011, Vol. 15, No. 68
Headlines
20 BAYARD VIEWS: Court Denies Confirmation of Plan
ALLY FINANCIAL: TruPS Sale Nets $2.7 Billion for Treasury Dept.
ALLY FINANCIAL: To Register Preferred Securities on NYSE
ALLY FINANCIAL: Amends GMAC Capital Trust 1 Agreements
AMERICA'S SUPPLIERS: No More Going Concern Doubt in 2010 Results
AMERICAL CORP: Suit v. Legwear Survives Motion to Dismiss
AMERICAN AIRLINES: Moody's Assigns 'B2' Rating to $1 Bil. Notes
AMERICAN INT'L: Pays $6.9-Bil. from MetLife Sale to Treasury
AMR CORP: American Airlines to Sell $1-Bil. of Sr. Secured Notes
AMR CORP: S&P Assigns 'B+' Rating to Proposed $1 Bil. Sec. Notes
AMR CORP: Rajat Gupta Resigns From Board of Directors
APPLETON PAPERS: Incurs $7.79-Mil. Net Loss in Jan. 1 Quarter
ARYX THERAPEUTICS: Begins Wind Down, May File for Chapter 7
BERNARD L MADOFF: Victims in Line for Distribution After April
BERNARD L MADOFF: Distribution to Victims Delayed by Disputes
BLOCKBUSTER INC: Gets Default Notice Under DIP Credit Pact
BLOCKBUSTER INC: Files Non U.S. Stores Report for Jan. 2 Qtr.
BLOCKBUSTER INC: Summit Says Debtor Administratively Insolvent
BLUEKNIGHT ENERGY: Inks Non-Disclosure Pact With Solus
BLUEKNIGHT ENERGY: Inks Non-Disclosure Agreement With Swank
BROADSTAR WIND: Wick Verdict Against Co-Founder
BUILDERS FIRSTSOURCE: Widens Net Loss to $95.5-Mil. in 2010
BUMBLE BEE: Moody's Cuts CFR to 'B2' on Shareholder Distribution
BUMBLE BEE: S&P Cuts Rating to 'B' on Hiked Leverage
CAESARS ENTERTAINMENT: S&P Ups Rating on Ling & Octavius Loan to B
CANO PETROLEUM: Clint Carlson Discloses 9.2% Equity Stake
CAPITOL BANCORP: Amends 10-Q on $11.7-Mil. Add'l Loan Losses
CEDAR FUNDING: Bankr. Judge Won't Review Order Reducing LECG Fees
CHENIERE ENERGY: Sues Centerbridge Over Default Allegations
CHESTER COUNTY PET: Voluntary Chapter 11 Case Summary
CINEMARK USA: Moody's Gives Stable Outlook, Affirms 'B1' Rating
CKE RESTAURANT: Moody's Affirms 'B2' Corporate Family Rating
CLAYTON WILLIAMS: Moody's Gives Positive Outlook, Affirms B3 CFR
CLAYTON WILLIAMS: S&P Assigns 'B' Ratings to $300 Mil. Notes
CLUB VENTURES: Court Extends Schedules Deadline Until April 1
CLUB VENTURES: Has Interim Nod to Obtain DIP Financing From LNB
COLUMBIA RIM: Case Summary & 20 Largest Unsecured Creditors
COMPOSITE TECHNOLOGY: Five Directors Elected at Meeting
CORNERSTONE WORLD: May File for Chapter 11 Absent Deal
CRC HEALTH: Moody's Assigns 'B1' Rating to $120 Mil. Senior Loan
CROSS BORDER: David Crews Discloses 8.4% Equity Stake
CROSS BORDER: Stephen Murchison Discloses 9.0% Equity Stake
CROWN MEDIA: Swings to $7.78-Mil. Profit in 2010
CROWN MEDIA: Appoints Andrew Rooke as EVP and CFO
CTI FOODS: S&P Changes Outlook to Stable, Affirms 'B' Rating
CTI FOODS: Moody's Changes Outlook to Positive, Affirms B2 Ratings
DBSI INC: Bankruptcy Court Confirms Florissant Market Plan
DEBUT BROADCASTING: Patrick Rodgers Appointed as Auditors
DJSP ENTERPRISES: Primary Customer to Cease Practice
DUNE ENERGY: Widens Losses to $75.53 Million in 2010
DYNAMIC BUILDERS: Wins Nod to Sell Olympic Blvd. Property
DYNEGY INC: Posts $234MM Loss in 2010; E&Y Has Going Concern Doubt
E-BRANDS RESTAURANTS: Tavistock Group Acquires Business
ENERGY FUTURE: WSJ Says Default Allegation Rattled Bond Market
ENERGYCONNECT GROUP: To Merge Into JCI for $32.3-Mil. Cash
ENERJEX RESOURCES: CEO Presented at Colorado Research Conference
EURAMAX INTERNATIONAL: S&P Affirms 'B-' Corporate Credit Rating
EXIDE TECHNOLOGIES: Settles Illinois Cleanup Claims for $1.3MM
FN BUILDING: Owner Files Creditor Repayment Plan
FONAR CORP: David Sandberg Discloses 8.41% Equity Stake
FORUM HEALTH: Hearing on Competing Plans Resumes April 26
GB HERNDON: Polsinelli Declaration Fails FRBP 2014(a)
GC MERCHANDISE: Seeks Access to Cash Collateral
GENERAL MOTORS: Court Enters Bench Decision on Plan Objections
GENERAL MOTORS: Court OKs $773MM Environmental Claims Settlement
GENERAL MOTORS: Old GM Settles Debts in Non-Owned Sites for $54MM
GLC LIMITED: Court Extends Filing of Schedules Until April 29
GLC LIMITED: Taps Frost Brown as Bankruptcy Counsel
GLOUCESTER ENGINEERING: Kabra Acquires 15% Ownership Stake
GOTTSCHALKS INC: Plan Declared Effective Feb. 28
GREAT ATLANTIC & PACIFIC: Says Incentive Plan Needed to Keep Value
GREAT ATLANTIC & PACIFIC: Fresh Market Opposes Assets Sale
GREAT ATLANTIC & PACIFIC: Panel Has Klestadt as Conflicts Counsel
GRIFFON CORPORATION: Moody's Assigns 'Ba3' Corporate Family Rating
HARRY & DAVID: S&P Cuts Corporate to 'D' on Missed Payments
HEALTHSOUTH CORP: Completes Public Offering of $120MM Notes
HEALTHSOUTH CORP: Files Prospectus for $120-Mil. Notes Offering
ICOP DIGITAL: Safety Vision Completes Acquisition
IMPLANT SCIENCES: Restates 2009 Financial Statements Due to Errors
IMS HEALTH: S&P Assigns 'BB' Rating to Senior Secured Debt
INFINITE SWANS: Voluntary Chapter 11 Case Summary
INTEGRAL ADVISORY: Voluntary Chapter 11 Case Summary
KRE, LLC.: Case Summary & 7 Largest Unsecured Creditors
LACK'S STORES: Customer Note Payments, GOB Sales Exceed Targets
LACK'S STORES: Signs Sale Contracts for Six Properties
LACK'S STORES: Reaches Settlement With CIT Group on Cash Use
LBI MEDIA: Moody's Assigns 'B2' Rating to Senior Secured Notes
LBI MEDIA: S&P Assigns Ratings to Proposed Senior Notes at 'B-'
LECG CORP: Eagle Boston Discloses 0.05% Equity Stake
LECG CORP: Heartland Advisors Discloses 5.7% Equity Stake
LIMITED BRANDS: Moody's Upgrades Corporate Family Rating to 'Ba1'
M/I HOMES: Fitch Affirms Issuer Default Rating at 'B'
MAM WEALTH: Case Summary & 6 Largest Unsecured Creditors
MANSIONS AT HASTINGS: Plan Filing Deadline Extended to April
MANSIONS AT HASTINGS: Taps Reznick Group as Accountant and Auditor
MAURO PADILLA: Returns to Bankr. Court with Ch. 7 Petition
MCCLATCHY CO: Reports $36.27 Million Net Income in 2010
MEDIACOM COMMUNICATIONS: Fitch Affirms 'B+' Issuer Default Rating
MEDIACOM COMMUNICATIONS: Moody's Affirms 'B1' Corp. Family Rating
MEDIACOM COMMUNICATIONS: S&P Affirms 'B+' Corp. Credit Rating
MESA AIR: Millions of Claims Change Hands in February
MILLAR WESTERN: Moody's Upgrades Corporate Family Rating to 'B2'
MILLWASP REALTY: Case Summary & 4 Largest Unsecured Creditors
MPC COMPUTERS: Court Approves Chapter 11 Liquidation Plan
MSR RESORT: Hearing on Further Cash Collateral Use on March 15
MYDDELTONPARKER BUILDERS: Founders in Chapter 7 Bankruptcy
NEW ULM: Involuntary Chapter 11 Case Summary
NMT MEDICAL: Richard Davis Employment Agreement Kept Confidential
ORLEANS HOMEBUILDERS: All Steel Violated Ch. 11 Stay, Judge Says
PACIFIC ENERGY: Sues Forest Oil for $250 Million Over Sale
PACIFIC INVESTMENT: Case Summary & 2 Largest Unsecured Creditors
PAMELA MATTHEWS: Sallie Mae Assignee May Participate in Suit
PETROFLOW ENERGY: Judge Ruled Against Equal Energy in Dispute
PHILADELPHIA RITTENHOUSE: Files Plan to Deflect Dismissal
PRM REALTY: Court to Consider Fate of Bankr. Case Today
QUANTUM FUEL: Registers 2.67-Mil. Shares for Resale
RADIATION THERAPY: Moody's Raises Ratings on Senior Notes to 'B3'
RADIO ONE: Moody's Assigns 'B1' Rating to $25 Mil. Loan
ROTECH HEALTHCARE: To Offer $290 Million of Sr. Second Lien Notes
ROTECH HEALTHCARE: Moody's Upgrades Corp. Family Rating to 'B2'
ROTECH HEALTHCARE: S&P Puts 'B-' Rating on CreditWatch Positive
SAKS INCORPORATED: Moody's Upgrades Corp. Family Rating to 'B1'
SBARRO INC: New Forbearance Agreement Expires April 1
SCO GROUP: Court Approves Sale of Software Biz to unXis
SEAGATE TECHNOLOGY: S&P Affirms 'BB+' Corporate Credit Rating
SEAHAWK DRILLING: US Trustee Forms Five-Member Equity Committee
SEAHAWK DRILLING: Seeks to Sell Ranch-Related Assets
SKI DMC: Voluntary Chapter 11 Case Summary
SL GREEN: Fitch Affirms Issuer Default Rating at 'BB+'
SPRINGLEAF FINANCE: Fitch Maintains Negative Watch on 'B-' Rating
STHI HOLDING: Moody's Assigns 'B2' Corporate Family Rating
STHI HOLDING: S&P Assigns Corporate Credit Rating at 'B'
SW OWNERSHIP: Taps Munsch Hardt as Bankruptcy Counsel
TAMACH GABLES: Case Summary & 9 Largest Unsecured Creditors
TELECONNECT INC: Adds Details on HEM Acquisition
TELKONET INC: Joseph Mahaffey Resigns From Board of Directors
TERRESTAR CORP: Proposes Blackstone as Fin'l Advisor
TERRESTAR CORP: Harbinger Cites Concerns on Akin Gump Retention
TOYS 'R' US: Fitch Assigns 'B-/RR5' Rating to New $1.1 Bil. Loan
TOYS 'R' US: Moody's Assigns 'B1' Rating to New $400 Mil. Loan
TOYS 'R' US: S&P Assigns 'BB-' Rating to Proposed $400 Mil. Loan
TRIBUNE CO: Court Starts Two-Week Trial on Plan Confirmation
TRIBUNE CO: Proposes Amendment NO. 4 to L/C Agreement
TRIBUNE CO: Debtors, Committee Object to Aurelius Plan
VP CHARLOTTE: Case Summary & Largest Unsecured Creditor
WB SANCTUARY: Can Employ Looper Reed as Primary Bankruptcy Counsel
WESTCLIFF MEDICAL: Can Employ K&E as Special Corporate Counsel
WESTCLIFF MEDICAL: Plan Filing Period Extended to March 15
WHITTON CORP: Can Hire William G Sigeske Accountancy as Accountant
WHITTON CORP: Files List of 20 Largest Unsecured Creditors
WHITTON CORP: Files Schedules of Assets and Liabilities
WHITTON CORP: Simmons Has Final OK to Use Cash Until April 25
WHITTON CORP: Taps Integra Realty as Real Estate Appraiser
* Bankruptcy Trustee Entitled to Most of Tax Refund
* SEC Investigates U.S. Bank Loan Restructuring Practices
* State, Federal Officials Join to Seek Servicing Overhaul
* Bankruptcy Filings May Drop Up to 5%; Boost U.S. Consumer ABS
* Curtis Grabs Kirkland Bankruptcy Atty. in New York
* Skadden, Proskauer Laywers Play Hockey in NHL Charity Event
* Recent Small-Dollar & Individual Chapter 11 Filings
*********
20 BAYARD VIEWS: Court Denies Confirmation of Plan
--------------------------------------------------
Bankruptcy Judge Elizabeth S. Stong issued an order denying
confirmation of the Third Amended Plan of Reorganization, as
modified, filed by 20 Bayard Views, LLC. The Court held that the
Plan cannot be confirmed because it does not satisfy 11 U.S.C.
Sec. 1129(b)'s cramdown requirements. Specifically, the Debtor
has not established by a preponderance of the evidence that the
Plan treats secured lender W Financial Fund LP fairly and
equitably by providing it with the present value of its claim as
required by Sec. 1129(b)(2)(A)(i)(II).
20 Bayard Views developed a 62-unit residential condominium
complex in Williamsburg, Brooklyn, and beginning in 2007, sales of
these luxury units beginning were strong. But as the economy
faltered in the second half of 2008, these sales declined
dramatically. The Debtor shifted its strategy from one based on
sales to one based on rentals, and new financing was put in place.
But this too proved unsuccessful, and in late 2009, the Chapter 11
bankruptcy case followed.
The Debtor's Plan is premised on the sale of 27 of the 37 unsold
condominium units over five years. W Financial Fund, the Debtor's
largest secured creditor, objects to confirmation. WFF argues the
Plan should not be confirmed primarily because it does not satisfy
the cramdown requirements of Sec. 1129(b). WFF also argues the
Plan does not satisfy the feasibility requirement of Sec.
1129(a)(11), and was not proposed in good faith as required by
Sec. 1129(a)(3).
A confirmation hearing was held over 11 days, commencing in
October 2010 and concluding in January 2011, at which the Debtor
and WFF, by counsel, appeared and were heard and evidence was
received. The record was closed on Jan. 4, 2011, and the matter
was submitted for decision on March 7. Plan related matters were
reported in prior issues of the Troubled Company Reporter.
A copy of the Court's March 7, 2011 order is available at
http://is.gd/IUQGJ9from Leagle.com
A full-text copy of the Disclosure Statement is available for free
at http://bankrupt.com/misc/20Bayard_DS.pdf
The Debtor is represented by:
John S. Mairo, Esq.
Robert M. Schechter, Esq.
PORZIO, BROMBERG & NEWMAN, P.C.
P.O. Box 1997
Morristown, NJ 07960
E-mail: jsmairo@pbnlaw.com
rmschechter@pbnlaw.com
Attorneys for W Financial Fund LP are:
Andrew C. Gold, Esq.
Hanh V. Huynh, Esq.
Frederick E. Schmidt, Esq.
HERRICK, FEINSTEIN LLP
2 Park Avenue
New York, NY 10016
Telephone: 212-592-1400
Facsimile: 212-592-1500
E-mail: agold@herrick.com
About 20 Bayard Views
Brooklyn, New York-based 20 Bayard Views, LLC, filed for Chapter
11 bankruptcy protection on Dec. 4, 2009 (Bankr. E.D.N.Y.
Case No. 09-50723). The Company scheduled $21,219,696 in total
assets and $20,976,363 in total liabilities.
ALLY FINANCIAL: TruPS Sale Nets $2.7 Billion for Treasury Dept.
---------------------------------------------------------------
The U.S. Department of the Treasury on March 8 said taxpayers
received a $2.7 billion repayment on Monday from the sale of
Treasury's trust preferred securities in Ally Financial Inc.
On Tuesday, the Treasury also received $6.9 billion repayment from
American International Group Inc. In total, taxpayers have
received $9.6 billion in TARP repayments this week. The Treasury
said taxpayers have now recovered 70% of total TARP disbursements.
About Ally Financial
Ally Financial Inc., formerly GMAC Inc., -- http://www.ally.com/
-- is one of the world's largest automotive financial services
companies. The company offers a full suite of automotive
financing products and services in key markets around the world.
Ally's other business units include mortgage operations and
commercial finance, and the company's subsidiary, Ally Bank,
offers online retail banking products. Ally operates as a bank
holding company.
GMAC obtained a $17 billion bailout from the U.S. government in
exchange for a 56.3% stake. Private equity firm Cerberus Capital
Management LP keeps 14.9%, while General Motors Co. owns 6.7%.
The Company has tapped Goldman Sachs Group Inc. and Citigroup Inc.
to advise on a range of issues, including strategic alternatives
for the mortgage business and repayment of taxpayer funds.
In January 2011, Standard & Poor's Ratings Services raised its
rating on the preferred stock of Ally Financial Inc. (Ally;
B/Stable/C) to 'CC' from 'C'. The ratings firm noted that Ally
improved its liquidity position and alleviated some funding
pressure at its holding Company in recent months, making it easier
to meet obligations on its preferred stock. Nevertheless, the
Company faces significant debt maturities at its holding Company
in 2011 and 2012, which is reflected in the 'CC' rating.
In February 2011, Moody's Investors Service upgraded the issuer
and senior unsecured ratings of Ally Financial Inc. and its
supported subsidiaries to B1 from B3. Concurrently, Moody's
upgraded the senior secured (second lien) and senior unsecured
ratings of mortgage finance subsidiary Residential Capital LLC to
Caa3 and Ca, respectively, from C. The rating outlook for both
Ally and ResCap is stable.
Moody's said the Ally and ResCap upgrades reflect a decline in
ResCap's exposure to portfolio under-performance and mortgage
repurchase risks and an associated decrease in contingent risks to
Ally relating to its support of ResCap. Additional factors
supporting Ally's upgrade include its strengthened liquidity and
capital positions and prospects for continued profitability in its
core auto finance and mortgage businesses based upon positive
asset quality performance trends.
ALLY FINANCIAL: To Register Preferred Securities on NYSE
--------------------------------------------------------
Ally Financial Inc. disclosed in a Form 8-A12B filing with the
U.S. Securities and Exchange Commission that it intends to
register 8.125% Fixed Rate/Floating Rate Trust Preferred
Securities, Series 2 of GMAC Capital Trust I on the New York Stock
Exchange.
Sale Prospectus
GMAC Capital Trust I filed with the Securities and Exchange
Commission a free writing prospectus in connection with the sale
of 106,680,000 of 8.125% Fixed Rate/Floating Rate Trust Preferred
Securities, Series 2.
GMAC Capital Trust I is a Delaware statutory trust, the sole
assets of which are fixed rate/floating rate junior subordinated
deferrable interest debentures -- Series 2 Debentures -- issued by
Ally Financial Inc.
United States Department of the Treasury is the Selling
Securityholder.
The TruPS represents the Treasury's full investment in Ally's
Trust Preferred Securities. After the settlement date, the
Treasury Department will not hold any Ally Trust Preferred
Securities.
TruPS's Expected Issue Ratings are B3 (Stable)/ CC (Stable) / B+
(Stable) from Moody's, S&P and Fitch respectively.
The TruPS' Final Maturity Date is Feb. 15, 2040.
The aggregate principal amount of the TruPS is $2,667,000,000
The Joint Book-Running Managers:
* Citigroup Global Markets Inc.
* Deutsche Bank Securities Inc.
* J.P. Morgan Securities LLC
* Morgan Stanley & Co. Incorporated
* Barclays Capital Inc.
* Goldman, Sachs & Co.
The Co-Managers are:
* Aladdin Capital LLC
* CastleOak Securities, L.P.
* Blaylock Robert Van, LLC
* C.L. King & Associates, Inc.
* Loop Capital Markets LLC
* MFR Securities, Inc.
* Muriel Siebert & Co., Inc.
* Samuel A. Ramirez & Company, Inc.
* The Williams Capital Group, L.P.
About Ally Financial
Ally Financial Inc., formerly GMAC Inc., -- http://www.ally.com/
-- is one of the world's largest automotive financial services
companies. The company offers a full suite of automotive
financing products and services in key markets around the world.
Ally's other business units include mortgage operations and
commercial finance, and the company's subsidiary, Ally Bank,
offers online retail banking products. Ally operates as a bank
holding company.
GMAC obtained a $17 billion bailout from the U.S. government in
exchange for a 56.3% stake. Private equity firm Cerberus Capital
Management LP keeps 14.9%, while General Motors Co. owns 6.7%.
The Company has tapped Goldman Sachs Group Inc. and Citigroup Inc.
to advise on a range of issues, including strategic alternatives
for the mortgage business and repayment of taxpayer funds.
In January 2011, Standard & Poor's Ratings Services raised its
rating on the preferred stock of Ally Financial Inc. (Ally;
B/Stable/C) to 'CC' from 'C'. The ratings firm noted that Ally
improved its liquidity position and alleviated some funding
pressure at its holding Company in recent months, making it easier
to meet obligations on its preferred stock. Nevertheless, the
Company faces significant debt maturities at its holding Company
in 2011 and 2012, which is reflected in the 'CC' rating.
In February 2011, Moody's Investors Service upgraded the issuer
and senior unsecured ratings of Ally Financial Inc. and its
supported subsidiaries to B1 from B3. Concurrently, Moody's
upgraded the senior secured (second lien) and senior unsecured
ratings of mortgage finance subsidiary Residential Capital LLC to
Caa3 and Ca, respectively, from C. The rating outlook for both
Ally and ResCap is stable.
Moody's said the Ally and ResCap upgrades reflect a decline in
ResCap's exposure to portfolio under-performance and mortgage
repurchase risks and an associated decrease in contingent risks to
Ally relating to its support of ResCap. Additional factors
supporting Ally's upgrade include its strengthened liquidity and
capital positions and prospects for continued profitability in its
core auto finance and mortgage businesses based upon positive
asset quality performance trends.
ALLY FINANCIAL: Amends GMAC Capital Trust 1 Agreements
------------------------------------------------------
On Dec. 30, 2009, Ally Financial Inc. entered into a Securities
Purchase and Exchange Agreement with the United States Department
of the Treasury and GMAC Capital Trust I, a Delaware statutory
trust established by Ally, pursuant to which, among other things,
(1) the Trust sold to Treasury 2,540,000 trust preferred
securities issued by the Trust with an aggregate liquidation
preference of $2,540,000,000 and (2) Ally issued and sold to
Treasury a ten-year warrant to purchase up to 127,000 additional
Trust Preferred Securities with an aggregate liquidation
preference of $127,000,000, which was immediately exercised in
full by Treasury. The terms of the Trust Preferred Securities
were established pursuant to the Declaration of Trust dated as of
Dec. 22, 2009, as amended and restated on Dec. 30, 2009, between
Ally, the trustees and the holders, from time to time, of the
Trust Preferred Securities and the common securities issued by the
Trust.
The Trust used the proceeds received in connection with the sale
of the Trust Preferred Securities and the Trust Common Securities
on Dec. 30, 2009 to purchase an aggregate principal amount of
$2,747,010,000 of the 8.0% junior subordinated deferrable interest
debentures due 2040. The Debentures were issued by Ally pursuant
to an indenture dated as of Dec. 30, 2009 between Ally and The
Bank of New York Mellon, as trustee. The Trust Preferred
Securities and the Trust Common Securities represent undivided
beneficial interests in the Debentures. Ally has, pursuant to the
Trust Preferred Securities Guarantee Agreement dated as of
Dec. 30, 2009 between Ally and The Bank of New York Mellon, as
Guarantee Trustee, fully and unconditionally guaranteed, on a
subordinated basis, for the benefit of the holders of the Trust
Preferred Securities, the payment of certain amounts due on those
Trust Preferred Securities to the extent not paid by or on behalf
of the Trust.
Amendment of the Trust
On March 1, 2011, Ally and the trustees of the Trust, with the
consent of Treasury as 100% holder of the Trust Preferred
Securities, executed the Second Amended and Restated Declaration
of Trust amending and restating the First Amended and Restated
Declaration. The Second Amended and Restated Declaration provides
for the continuation of the Trust as a statutory trust organized
in series. Pursuant to the Second Amended and Restated
Declaration, the Trust designated two series: series 1 of the
Trust and series 2 of the Trust. All of the outstanding Trust
Preferred Securities held by Treasury and the Trust Common
Securities held by Ally were designated 8.125% Fixed Rate/Floating
Rate Trust Preferred Securities, Series 2 and 8.125% Fixed
Rate/Floating Rate Common Securities, Series 2, respectively.
On March 1, 2011, Ally and the Indenture Trustee executed an
Amended and Restated Indenture amending and restating the
Indenture. The Amended and Restated Indenture provides for the
ability of Ally to issue securities in series that may vary as to
amount, date of maturity, rate of interest and in other respects
as provided therein. Concurrently with the designation of the
Trust Preferred Securities and the Trust Common Securities as
Series 2 Trust Preferred Securities and Series 2 Common
Securities, respectively, Ally designated the Debentures as 8.125%
Fixed Rate/Floating Rate Junior Subordinated Deferrable Interest
Debentures due 2040 to be held with respect to Series 2. The
Series 2 Trust Preferred Securities and the Series 2 Common
Securities represent undivided beneficial interests in the Series
2 Debentures and payments received from such Series 2 Debentures.
Also on March 1, 2011, Ally executed the Series 2 Trust Preferred
Securities Guarantee Agreement, which amended and restated the
Original Guarantee. The Series 2 Guarantee provides a full and
unconditional guarantee, on a subordinated basis, for the benefit
of the holders of Series 2 Trust Preferred Securities, of the
payment of certain amounts due on the Series 2 Trust Preferred
Securities to the extent not paid by or on behalf of Series 2.
Subject to the receipt of any required regulatory approvals, Ally
may dissolve Series 2 and cause the Series 2 Debentures to be
distributed to the holders of the Series 2 Trust Preferred
Securities and Series 2 Trust Common Securities.
The Second Amended and Restated Declaration bars the trustee of
Series 2 from varying the investment of such series.
Series 2 Trust Preferred Securities
Each Series 2 Trust Preferred Security has a liquidation amount of
$25. Distributions on the Series 2 Trust Preferred Securities
will be cumulative and will be payable on each Series 2 Trust
Preferred Security until redemption at the applicable coupon rate.
From and including March 7, 2011 to but excluding Feb. 15, 2016,
distributions will be payable at an annual rate of 8.125% payable
quarterly in arrears, beginning Aug. 15, 2011. From and including
Feb. 15, 2016 to but excluding Feb. 15, 2040, distributions will
be payable at an annual rate equal to three-month LIBOR plus 5.785
payable quarterly in arrears, beginning May 15, 2016. All
distributions prior to March 7, 2011 were paid to Treasury. Ally
has the right to defer payments of interest on the Series 2
Debentures for a period not exceeding 20 consecutive quarters.
During any such period Series 2 will defer distributions on the
Series 2 Trust Preferred Securities, but such distributions will
continue to accrue and compound through any such deferral period.
The Series 2 Trust Preferred Securities have no stated maturity
date, but must be redeemed upon the redemption or maturity of the
Series 2 Debentures.
In the event of any partial redemption of the Series 2 Debentures,
Series 2 will redeem Series 2 Trust Preferred Securities with a
liquidation amount equal to the principal balance of the redeemed
Series 2 Debentures.
The Series 2 Trust Preferred Securities are generally nonvoting,
other than with respect to certain matters, including, generally,
any amendment of the Second Amended and Restated Declaration that
is adverse to the holders of the Series 2 Trust Preferred
Securities and with respect to certain actions to be taken upon
the occurrence of certain defaults on the Series 2 Debentures.
During any period in which any Series 2 Trust Preferred Securities
remain outstanding, but in which distributions on the Series 2
Trust Preferred Securities have not been fully paid, none of Ally
or its subsidiaries will (i) declare or pay dividends on, make any
distributions with respect to, or redeem, purchase, acquire or
otherwise make a liquidation payment with respect to, any of
Ally's capital stock or make any guarantee payment with respect
thereto; or (ii) make any payments of principal, interest, or
premium on, or repay, repurchase or redeem, any debt securities or
guarantees that rank on a parity with or junior in interest to the
Series 2 Debentures, with certain specified exceptions in each
case.
Series 2 Debentures
Prior to Feb. 15, 2016, interest will accrue on the Series 2
Debentures at an annual rate of 8.125%, payable quarterly in
arrears, beginning Aug. 15, 2011. From and including Feb. 15,
2016 to but excluding Feb. 15, 2040, interest will accrue on the
Series 2 Debentures at an annual rate equal to three-month LIBOR
plus 5.785%, payable quarterly in arrears, beginning May 15, 2016.
Ally may elect to defer interest payments on the Series 2
Debentures for one or more periods, in each case for up to 20
consecutive quarters, provided that no Event of Default with
respect to the Series 2 Debentures has occurred and is continuing,
and provided further that no such deferral may extend beyond the
maturity date of the Series 2 Debentures. During any such
interest deferral period, interest will continue to accrue and
compound on the Series 2 Debentures.
The Series 2 Debentures mature and become due and payable,
together with any accrued and unpaid interest thereon, on Feb. 15,
2040. Ally may not redeem the Series 2 Debentures, in whole or in
part, prior to Feb. 15, 2016, except upon the occurrence of
certain specified events, subject to the receipt of any required
regulatory approvals. On or after Feb. 15, 2016, subject to the
receipt of any required regulatory approvals, Ally may redeem the
Series 2 Debentures at any time or from time to time.
Upon the occurrence of certain specified events of default with
respect to the Series 2 Debentures, the trustee for the Series 2
Debentures or the holders of 25% or more of the principal amount
of the Series 2 Debentures will have the right to declare the
principal amount of the Series 2 Debentures, and any accrued
interest, immediately due and payable.
The Series 2 Debentures are generally non-voting, with the
exception of voting rights in connection with certain changes to
the Series 2 Debentures or the Amended and Restated Indenture, or
with respect to certain actions to be taken upon the occurrence of
certain defaults with respect to the Series 2 Debentures. The
Series 2 Debentures are unsecured and rank equally in right of
payment with all of Ally's other existing and future junior
subordinated indebtedness, junior in right of payment to all of
Ally's existing and future senior or subordinated indebtedness.
During any period in which any Series 2 Debentures remain
outstanding, but in which accrued and unpaid interest on the
Series 2 Debentures has not been fully paid, none of Ally or its
subsidiaries will (i) declare or pay dividends on, make any
distributions with respect to, or redeem, purchase, acquire or
otherwise make a liquidation payment with respect to, any of
Ally's capital stock or make any guarantee payment with respect
thereto; or (ii) make any payments of principal, interest, or
premium on, or repay, repurchase or redeem, any debt securities or
guarantees that rank on a parity with or junior in interest to the
Series 2 Debentures, with certain specified exceptions in each
case.
Guarantee for Series 2
Pursuant to the Series 2 Guarantee, Ally guarantees the following
payment obligations: (i) any accrued and unpaid distributions
required to be paid to the Series 2 Trust Preferred Securities, to
the extent that Series 2 has funds that are legally and
immediately available to pay distributions on the Series 2 Trust
Preferred Securities; (ii) any redemption price required to be
paid to the holders of the Series 2 Trust Preferred Securities, to
the extent that Series 2 has funds that are legally and
immediately available to pay such redemption price; and (iii) upon
a termination, winding-up or liquidation of Series 2 if the Series
2 Debentures are not distributed to holders of the Series 2 Trust
Preferred Securities in exchange for such Series 2 Trust Preferred
Securities, the lesser of the liquidation distribution for the
Series 2 Trust Preferred Securities and the value of assets of
Series 2 remaining available for distribution to holders of the
Series 2 Trust Preferred Securities after the satisfaction of
certain liabilities to creditors of Series 2, as required by law.
Ally's guarantee for the Series 2 Trust Preferred Securities does
not apply to any payment of distributions with respect to the
Series 2 Trust Preferred Securities unless and until Series 2 has
sufficient funds for the payment of such distributions.
The Series 2 Guarantee is an unsecured obligation of Ally, and
will have the same ranking with respect to Ally's other
indebtedness as the Series 2 Debentures.
Underwriting Agreement
On March 1, 2011, Treasury notified Ally of its intent to
distribute Series 2 Trust Preferred Securities by means of an
underwritten offering and Ally accepted this notice. In
connection with the amendments described above, Ally paid Treasury
a $28,170,000 one-time, non-refundable distribution fee, which was
calculated to equal all discounts, underwriting commissions,
transfer taxes and transaction fees applicable to the sale of
Series 2 Trust Preferred Securities.
On March 2, 2011, Ally entered into an Underwriting Agreement
with Series 2, Treasury and Citigroup Global Markets Inc.,
Deutsche Bank Securities Inc., J.P. Morgan Securities LLC and
Morgan Stanley & Co. Incorporated, as representatives of the
Underwriters named therein, pursuant to which Treasury agreed to
sell to the Underwriters 106,680,000 of the Series 2 Trust
Preferred Securities.
The offering is expected to close on March 7, 2011, subject to
customary closing conditions. Ally will not receive any proceeds
from the offering of the Series 2 Trust Preferred Securities.
The offering is being made pursuant to a prospectus supplement and
the accompanying prospectus filed with the Securities and Exchange
Commission pursuant to Ally's Post-Effective Amendment No. 1 to
its previously filed automatic shelf registration statement on
Form S-3ASR (Registration Nos. 333-165608 and 333-165608-01).
A full-text copy of the Underwriting Agreement is available for
free at http://ResearchArchives.com/t/s?7496
A full-text copy of the Second Amended and Restated Declaration of
Trust is available for free at:
http://ResearchArchives.com/t/s?7497
A full-text copy of the Amended and Restated Indenture is
available for free at:
http://ResearchArchives.com/t/s?7498
A full-text copy of the Series 2 Trust Preferred Securities
Guarantee Agreement is available for free at:
http://ResearchArchives.com/t/s?7499
About Ally Financial
Ally Financial Inc., formerly GMAC Inc., -- http://www.ally.com/
-- is one of the world's largest automotive financial services
companies. The company offers a full suite of automotive
financing products and services in key markets around the world.
Ally's other business units include mortgage operations and
commercial finance, and the company's subsidiary, Ally Bank,
offers online retail banking products. Ally operates as a bank
holding company.
GMAC obtained a $17 billion bailout from the U.S. government in
exchange for a 56.3% stake. Private equity firm Cerberus Capital
Management LP keeps 14.9%, while General Motors Co. owns 6.7%.
The Company has tapped Goldman Sachs Group Inc. and Citigroup Inc.
to advise on a range of issues, including strategic alternatives
for the mortgage business and repayment of taxpayer funds.
In January 2011, Standard & Poor's Ratings Services raised its
rating on the preferred stock of Ally Financial Inc. (Ally;
B/Stable/C) to 'CC' from 'C'. The ratings firm noted that Ally
improved its liquidity position and alleviated some funding
pressure at its holding Company in recent months, making it easier
to meet obligations on its preferred stock. Nevertheless, the
Company faces significant debt maturities at its holding Company
in 2011 and 2012, which is reflected in the 'CC' rating.
In February 2011, Moody's Investors Service upgraded the issuer
and senior unsecured ratings of Ally Financial Inc. and its
supported subsidiaries to B1 from B3. Concurrently, Moody's
upgraded the senior secured (second lien) and senior unsecured
ratings of mortgage finance subsidiary Residential Capital LLC to
Caa3 and Ca, respectively, from C. The rating outlook for both
Ally and ResCap is stable.
Moody's said the Ally and ResCap upgrades reflect a decline in
ResCap's exposure to portfolio under-performance and mortgage
repurchase risks and an associated decrease in contingent risks to
Ally relating to its support of ResCap. Additional factors
supporting Ally's upgrade include its strengthened liquidity and
capital positions and prospects for continued profitability in its
core auto finance and mortgage businesses based upon positive
asset quality performance trends.
AMERICA'S SUPPLIERS: No More Going Concern Doubt in 2010 Results
----------------------------------------------------------------
America's Suppliers, Inc. filed its annual report on Form 10-K,
reporting net income of $224,435 on $15.41 million of net revenue
for the year ended Dec. 31, 2010, compared with a net loss of
$848,808 on $12.54 million of net revenue during the prior year.
The Company's balance sheet at Dec. 31, 2010 showed $1.91 million
in total assets, $2.06 million in total current liabilities and
$150,165 in total shareholders' deficit. Total deficit was
$107,096 at Sept. 30, 2010.
As reported in the Troubled Company Reporter on March 26, 2010,
MaloneBailey, LLP, in Houston, expressed substantial doubt about
the Company's ability to continue as a going concern following the
Company's 2009 results. The independent auditors noted that
Company has suffered an accumulated deficit of $6,949,006 as of
Dec. 31, 2009.
MaloneBailey's opinion on the Company's 2010 financial statements
did not include a going concern qualification.
Although the Company has a history of losses and a working capital
deficit at Dec. 31, 2010, the Company has recently achieved
profitability and has generated net income for each of the last
four quarters, the Company noted in its Form 10-K.
A full-text copy of the Form 10-K filed with the U.S. Securities
and Exchange Commission is available for free at:
http://ResearchArchives.com/t/s?74a0
About America's Suppliers
Scottsdale, Ariz.-based America's Suppliers, Inc. develops
software programs that allow the Company to provide general
merchandise for resale to businesses. DollarDays International,
Inc., the Company's wholly owned subsidiary, is an Internet based
wholesaler of general merchandise to small independent resellers
through its Web site http://www.DollarDays.com/. Orders are
placed by customers through the Web site where, upon successful
payment, the merchandise is shipped directly from the vendors'
warehouses.
This concludes the Troubled Company Reporter's coverage of
America's Suppliers, Inc., until facts and circumstances, if any,
emerge that demonstrate financial or operational strain or
difficulty at a level sufficient to warrant renewed coverage.
AMERICAL CORP: Suit v. Legwear Survives Motion to Dismiss
---------------------------------------------------------
Americal Corporation brought a declaratory judgment action against
International Legwear Group, Inc., pursuant to 28 U.S.C. Sec.
2201(a) seeking a declaration of the parties' obligations in
connection with a June 2004 Trademark License Agreement. Legwear
filed a Motion to Dismiss Americal's Complaint for Lack of Subject
Matter Jurisdiction. Pursuant to 28 U.S.C. Sec. 636(b) and the
Standing Orders of Designation of the District Court, United
States Magistrate Judge Dennis L. Howell was designated to
consider the motion and to submit recommendations for its
disposition. On May 14, 2010, the Magistrate Judge filed a
Memorandum and Recommendation in which he recommended denying the
motion to dismiss. The Defendant timely filed objections.
The case is Americal Corporation, v. International Legwear Group,
Inc., Civil Case No. 1:10cv65 (W.D. N.C.). A copy of District
Judge Martin Reidinger's March 4, 2011 order is available at
http://is.gd/9vqcADfrom Leagle.com.
The Court considered the Defendant's objections and conducted a de
novo review of the specific, articulated objections. Accordingly,
the Court rejected the objections and adopted the Magistrate
Judge's recommendations. Legwear's Motion to Dismiss is denied.
Headquartered in Henderson, North Carolina, Americal Corporation
manufactures Peds brand socks and hosiery. The Company filed for
Chapter 11 protection (Bankr. E.D.N.C. Case No. 04-01333) on April
7, 2004. J. William Porter, Esq., at Parker Poe Adams &
Bernstein, LLP, represents the Debtor in its restructuring effort.
When the Company filed for protection from its creditors, it
disclosed $18,753,485 in total assets and $25,825,055 in total
debts.
AMERICAN AIRLINES: Moody's Assigns 'B2' Rating to $1 Bil. Notes
---------------------------------------------------------------
Moody's Investors Service assigned a B2 rating to the planned
offering by American Airlines, Inc., of $1.0 billion of first lien
senior secured notes due 2016 secured by certain of American's
route authorities, airport landing and take-off slots, and rights
to use or occupy space in airport terminals. Moody's expect the
proceeds to be used for general corporate purposes, mainly the
refinancing of some of the $2.5 billion of 2011's debt maturities.
AMR Corporation will guarantee, on an unsecured basis, American's
obligations under the indenture.
Assignments:
Issuer: American Airlines, Inc.
-- Senior Secured Regular Bond/Debenture, Assigned a range of 25
- LGD2 to B2
Loss Given Default Assessments:
Issuer: American Airlines, Inc.
-- Senior Secured Regular Bond/Debenture, Downgraded to a range
of LGD2, 24 % to LGD2, 25 % from a range of LGD2, 23 % to
LGD2, 24 %
-- Senior Secured Regular Bond/Debenture, Downgraded to a range
of LGD2, 24 % to LGD2, 25 % from a range of LGD2, 23 % to
LGD2, 24 %
Issuer: Chicago O'Hare International Airport, IL
-- Revenue Bonds, Downgraded to LGD5, 79% from LGD5, 78%
Issuer: Dallas-Fort Worth Intl. Airp. Fac. Imp. Corp.
-- Revenue Bonds, Downgraded to LGD5, 79% from LGD5, 78%
-- Senior Secured Revenue Bonds, Downgraded to LGD5, 79% from
LGD5, 78%
Issuer: Dallas-Fort Worth TX, Regional Airport
-- Revenue Bonds, Downgraded to LGD5, 79% from LGD5, 78%
Issuer: New Jersey Economic Development Authority
-- Revenue Bonds, Downgraded to LGD5, 79% from LGD5, 78%
Issuer: Puerto Rico Ind Med&Env Poll Ctl Fac Fin Auth
-- Revenue Bonds, Downgraded to LGD5, 79% from LGD5, 78%
Issuer: Raleigh-Durham Airport Authority, NC
-- Revenue Bonds, Downgraded to LGD5, 79% from LGD5, 78%
Issuer: Tulsa OK, Municipal Airport Trust (Ttees of)
-- Revenue Bonds, Downgraded to LGD5, 79% from LGD5, 78%
Ratings Rationale
The last rating action was on January 20, 2011, when Moody's
assigned ratings to the company's 2011-1 Series of Enhanced
Equipment Trust Certificates.
American Airlines, Inc., and its parent AMR Corporation are based
in Fort Worth, Texas.
AMERICAN INT'L: Pays $6.9-Bil. from MetLife Sale to Treasury
------------------------------------------------------------
The U.S. Department of the Treasury said March 8 that, with the
receipt Tuesday of a $6.9 billion repayment from American
International Group Inc., taxpayers have now recovered 70% of
total Troubled Asset Relief Program disbursements.
"We're optimistic that as we continue to wind down TARP, our
temporary investments in private companies will ultimately result
in little or no cost to taxpayers taken as a whole," said Tim
Massad, Acting Assistant Secretary for Financial Stability.
"While cost isn't the primary measure of TARP's success, the fact
that we've already recovered more than two-thirds of the money
disbursed for the program is an important milestone for
taxpayers."
AIG's $6.9 billion repayment brings total TARP repayments and
income to $287 billion -- 70% of the $411 billion that has been
disbursed to date for that program. Treasury currently expects
that TARP investment programs -- including financial support for
banks, AIG, and the domestic auto industry; as well as targeted
initiatives to restart the credit markets -- will result in little
or no cost to taxpayers. The lifetime cost of TARP is likely to
be limited to funds disbursed for Treasury's foreclosure
prevention programs, which were not expected to be recovered.
In the President's FY2012 Budget, the Administration estimated
that the lifetime cost of the overall TARP program will be
approximately $48 billion. When also including AIG common stock
held for the benefit of Treasury outside of TARP -- that projected
cost drops to $28 billion.
AIG used $6.6 billion of the $9.6 billion of proceeds it received
from the March 2, 2011 sale of its equity stake in MetLife to make
the repayment. Additionally, $300 million previously held in
anticipation of expenses related to the sale of ALICO to MetLife
was paid to Treasury, bringing the total amount repaid today to
$6.9 billion. These funds will be used to reduce an equal portion
of Treasury's remaining preferred equity interests in AIG, which,
after today's repayment, stand at $11.3 billion. The remaining
$3 billion of proceeds from the sale of the MetLife equity units
were placed in an indemnity escrow to secure obligations that may
be owed to MetLife, as previously agreed to under the terms of the
ALICO sale. These proceeds will be released according to agreed-
upon minimum holding periods over the next two years and similarly
used to pay down Treasury's preferred equity interests. Based on
current market prices, Treasury estimates that taxpayers will
ultimately recover every dollar that the U.S. government invested
in AIG.
About AIG
American International Group, Inc. -- http://www.aig.com/-- is an
international insurance organization with operations in more than
130 countries and jurisdictions. AIG companies serve commercial,
institutional and individual customers through one of the most
extensive worldwide property-casualty networks of any insurer. In
addition, AIG companies are leading providers of life insurance
and retirement services around the world. AIG common stock is
listed on the New York Stock Exchange, as well as the stock
exchanges in Ireland and Tokyo.
In September 2008, AIG experienced a liquidity crunch when its
credit ratings were downgraded below "AA" levels by Standard &
Poor's, Moody's Investors Service and Fitch Ratings. AIG almost
collapsed under the weight of bad bets it made insuring mortgage-
backed securities. The Company, however, was bailed out by the
Federal Reserve, but even after an initial infusion of
$85 billion, losses continued to grow. The later rescue packages
brought the total to $182 billion, making it the biggest federal
bailout in U.S. history.
AIG has been working to protect and enhance the value of its key
businesses, execute an orderly asset disposition plan, and
position itself for the future. AIG has sold a number of its
subsidiaries and other assets to pay down loans received from the
U.S. government, and continues to seek buyers of its assets.
AMR CORP: American Airlines to Sell $1-Bil. of Sr. Secured Notes
----------------------------------------------------------------
American Airlines, Inc., the principal operating subsidiary of AMR
Corporation, announced the private offering of $1,000,000,000
aggregate principal amount of its senior secured notes. The notes
are expected to be secured by certain of the Company's route
authorities, airport landing and take-off slots, and rights to use
or occupy space in airport terminals, and proceeds from the
offering of the notes are expected to be used for general
corporate purposes. The notes are expected to be guaranteed by
AMR.
The notes are being offered in the United States to qualified
institutional buyers pursuant to Rule 144A under the Securities
Act of 1933, as amended, and outside the United States pursuant to
Regulation S under the Securities Act. The notes will not be
registered under the Securities Act or applicable state securities
laws and may not be offered or sold in the United States absent
registration or an applicable exemption from the registration
requirements of the Securities Act and applicable state law.
About AMR Corporation
Headquartered in Forth Worth, Texas, AMR Corporation (NYSE:
AMR) operates with its principal subsidiary, American Airlines
Inc. -- http://www.aa.com/-- a worldwide scheduled passenger
airline. As of Dec. 31, 2009, American provided scheduled jet
service to approximately 160 destinations throughout North
America, the Caribbean, Latin America, Europe and Asia.
Its wholly owned subsidiary, AMR Eagle Holding Corp., owns two
regional airlines, American Eagle Airlines Inc. and Executive
Airlines Inc., and does business as "American Eagle." American
Beacon Advisors Inc., a wholly owned subsidiary of AMR, is
responsible for the investment and oversight of assets of AMR's
U.S. employee benefit plans, as well as AMR's short-term
investments.
The Company's balance sheet at Dec. 31, 2010, showed
$25.09 billion in total assets, $29.03 billion in total
liabilities and a $3.94 billion stockholders' deficit.
AMR recorded a net loss of $471 million in the year 2010, a net
loss of $1.5 billion in 2009, and a net loss of $2.1 billion in
2008.
* * *
AMR carries a 'CCC' issuer default rating from Fitch Ratings,
'Caa1' corporate family and probability of default ratings
from Moody's, and a 'B-' corporate credit rating from Standard &
Poor's.
In November 2010, Standard & Poor's Ratings Services revised its
outlook on AMR Corp. and its major operating subsidiary, American
Airlines Inc., to stable from negative, based on AMR's improved
operating performance, which has bolstered credit quality. S&P
also affirmed its 'B-' corporate credit rating and most issue
ratings on the two companies and lowered selected ratings on
American's enhanced equipment trust certificates.
AMR CORP: S&P Assigns 'B+' Rating to Proposed $1 Bil. Sec. Notes
----------------------------------------------------------------
Standard & Poor's Ratings Services said that it assigned its 'B+'
rating and '1' recovery rating to AmericanAirlines Inc.'s proposed
$1 billion senior secured notes, a 144A offering without
registration rights. The '1' recovery rating indicates S&P's
expectation of very high (90% to 100%) recovery in a payment
default scenario.
"We base the 'B+' issue rating and '1' recovery rating on the 'B-'
corporate credit rating on the company, as well as S&P's
expectation of very high (90% to 100%) recovery in a payment
default scenario," said Standard & Poor's credit analyst Betsy
Snyder.
International route rights of American and related slots and gates
will collateralize the notes. AMR Corp., American's parent, will
guarantee the notes. The various international routes that will
secure the notes consist of American's routes between the U.S. and
U.K. (to London's Heathrow International Airport), those between
the U.S. and Japan (to both Tokyo airports--Narita International
and Haneda), and those between the U.S. and China (to Beijing and
Shanghai).
In its simulated default scenario, S&P estimates at least 90%
coverage (the minimum for a '1' recovery rating) of the secured
notes, potential add-on notes, six months of interest expense, and
certain other priority claims on the collateral.
Ratings List
American Airlines Inc.
Corporate credit rating B-/Stable/--
New Rating
American Airlines Inc.
Proposed $1 billion senior secured notes B+
Recovery rating 1
AMR CORP: Rajat Gupta Resigns From Board of Directors
-----------------------------------------------------
On March 7, 2011, Rajat K. Gupta voluntarily resigned from the
Boards of Directors of AMR Corporation and its subsidiary,
American Airlines, Inc., effective immediately, the Company said
in a one-sentence announcement with the Securities and Exchange
Commission.
Terry Maxon, reporter at The Dallas Morning News, says Mr. Gupta
resigned after being accused in an insider trading case involving
other companies.
Mr. Gupta first joined the AMR board in 2008.
The SEC, The Dallas Morning News relates, accused Mr. Gupta on
March 1 in a case involving Goldman Sachs and Proctor & Gamble,
two companies on whose boards of directors he had served. He
resigned that day from the Proctor & Gamble board.
About AMR Corporation
Headquartered in Forth Worth, Texas, AMR Corporation (NYSE:
AMR) operates with its principal subsidiary, American Airlines
Inc. -- http://www.aa.com/-- a worldwide scheduled passenger
airline. As of Dec. 31, 2009, American provided scheduled jet
service to approximately 160 destinations throughout North
America, the Caribbean, Latin America, Europe and Asia.
Its wholly owned subsidiary, AMR Eagle Holding Corp., owns two
regional airlines, American Eagle Airlines Inc. and Executive
Airlines Inc., and does business as "American Eagle." American
Beacon Advisors Inc., a wholly owned subsidiary of AMR, is
responsible for the investment and oversight of assets of AMR's
U.S. employee benefit plans, as well as AMR's short-term
investments.
The Company's balance sheet at Dec. 31, 2010, showed
$25.09 billion in total assets, $29.03 billion in total
liabilities and a $3.94 billion stockholders' deficit.
AMR recorded a net loss of $471 million in the year 2010, a net
loss of $1.5 billion in 2009, and a net loss of $2.1 billion in
2008.
* * *
AMR carries a 'CCC' issuer default rating from Fitch Ratings,
'Caa1' corporate family and probability of default ratings
from Moody's, and a 'B-' corporate credit rating from Standard &
Poor's.
In November 2010, Standard & Poor's Ratings Services revised its
outlook on AMR Corp. and its major operating subsidiary, American
Airlines Inc., to stable from negative, based on AMR's improved
operating performance, which has bolstered credit quality. S&P
also affirmed its 'B-' corporate credit rating and most issue
ratings on the two companies and lowered selected ratings on
American's enhanced equipment trust certificates.
APPLETON PAPERS: Incurs $7.79-Mil. Net Loss in Jan. 1 Quarter
-------------------------------------------------------------
Appleton Papers Inc. issued a press release announcing its fourth
quarter and full year 2010 results. The Company reported a net
loss of $7.79 million on $204.22 million of net sales for the
three months ended Jan. 1, 2011, compared with a net loss of
$17.36 million on $188.36 million of net sales for the three
months ended Jan. 2, 2010.
The Company also reported a net loss of $31.66 million on
$849.88 million of net sales for the year ended Jan. 1, 2011,
compared with net income of $23.21 million on $761.81 million of
net sales for the year ended Jan. 2, 2010.
The Company's balance sheet at Jan. 1, 2011 showed $677 million in
total assets, $812.99 million in total liabilities and a
$135.99 million total deficit.
A full-text copy of the press release announcing the financial
results is available for free at:
http://ResearchArchives.com/t/s?74a9
About Appleton Papers
Appleton Papers Inc. is a 100%-owned subsidiary of Paperweight
Development Corp. Appleton Papers Inc. --
http://www.appletonideas.com/-- headquartered in Appleton,
Wisconsin, produces carbonless, thermal, security and performance
packaging products. Appleton has manufacturing operations in
Wisconsin, Ohio, Pennsylvania, and Massachusetts, employs
approximately 2,200 people and is 100% employee-owned.
Appleton Papers carries a 'B' corporate credit rating from
Standard & Poor's.
ARYX THERAPEUTICS: Begins Wind Down, May File for Chapter 7
-----------------------------------------------------------
ARYx Therapeutics, Inc. (NASDAQ:ARYX), said it may be filing a
voluntary petition for Chapter 7 liquidation, as part of the wind-
down of its operations.
ARYx Therapeutics said it was informed by the U.S. Food and Drug
Administration of an additional delay in providing needed guidance
on the Phase 3 development of ARYx's product candidate for the
treatment of various gastrointestinal disorders, naronapride. In
this latest communication with ARYx, the FDA suggested a response
will not be forthcoming until July 2011 at the earliest. As a
consequence, the board of directors has determined that continued
operations of ARYx is not possible due to lack of funding, and the
orderly wind-down of operations is to begin immediately. This
wind-down will be executed in cooperation with ARYx's largest
secured creditors, including Lighthouse Capital Partners V and MPM
Capital.
According to a filing with the Securities and Exchange Commission,
the FDA was initially to respond to the Company's request for the
SPA by Nov. 5, 2010, then said that the response would be delayed
until the end of March 2011, and recently indicated that it won't
provide a response until July 2011 at the earliest. "Due to the
delay in receiving guidance from the FDA and the lack of clarity
as to the path forward for the development of naronapride, on
March 3, 2011, we were advised by our existing principal and
potential new investors that were contemplating a potential
financing arrangement for our company that they would not be
participating in any future funding of our company," the Company
said.
"As a consequence, on March 3, 2011, the Board determined that
continued operations of ARYx is not possible due to our limited
current cash resources and the lack of any additional funding
options, and authorized our management to cooperate with our
secured creditors to effect an orderly wind-down of our operations
immediately. Absent the cooperation and agreement of our secured
creditors to effect an orderly wind-down of our operations and
disposition of our assets, the Board authorized and directed
management to proceed with the filing by us of a voluntary
petition for bankruptcy under the provisions of Chapter 7 of the
U.S. Bankruptcy Code," the Company said.
On March 8, 2011, David Beier, Lars Ekman, Herm Rosenman and Paul
Sekhri resigned as members of the Company's board, including from
their respective memberships on the committees of the Board,
effective immediately.
About ARYx Therapeutics
Fremont, Calif.-based ARYx Therapeutics, Inc. (NASDAQ: ARYX)
-- http://www.aryx.com/-- is a biopharmaceutical company. ARYx
currently has four products in clinical development: a prokinetic
agent for the treatment of various gastrointestinal disorders,
naronapride (ATI-7505); an oral anticoagulant agent for patients
at risk for the formation of dangerous blood clots, tecarfarin
(ATI-5923); an oral anti-arrhythmic agent for the treatment of
atrial fibrillation, budiodarone (ATI-2042); and, an agent for the
treatment of schizophrenia and other psychiatric disorders, ATI-
9242.
The Company's balance sheet as of Sept. 30, 2010, showed
$6.0 million in total assets, $13.7 million in total liabilities,
and a stockholders' deficit of $7.7 million.
As reported in the Troubled Company Reporter on April 9, 2010,
Ernst & Young LLP, in Palo Alto, Calif., expressed substantial
doubt about the Company's ability to continue as a going concern,
following review of the Company's 2009 results, citing the
Company's recurring losses from operations and stockholders'
deficit.
BERNARD L MADOFF: Victims in Line for Distribution After April
--------------------------------------------------------------
Victims of the fraud by Bernard L. Madoff Investment Securities
Inc. could receive a distribution from $2.6 billion of cash on
hand, the Madoff trustee said in a telephone news conference
March 8, according to reporting by Bill Rochelle, the bankruptcy
columnist for Bloomberg News.
According to the report, customers with approved claims have
already received as much as $500,000 for each claim paid from the
fund administered by the Securities Investor Protection Corp. The
$2.6 billion represents so-called customer property that may be
used only for payment to customers with approved claims.
The trustee plans to file a motion to be heard in April for
approval to make a distribution.
Mr. Rochelle relates the trustee received another $7.2 billion
from a settlement with the estate of Jeffrey M. Picower and his
investment funds. An appeal of the settlement is holding up
distribution of the funds from Picower, the trustee said.
Last week, the U.S. Court of Appeals in Manhattan heard oral
arguments on an appeal that will decide the methodology for
calculating the proper amount of a customer's claim. Mr. Rochelle
relates the bankruptcy judge agreed with the trustee and said a
claim should equal the amount of cash invested with Madoff less
the amount taken out. On appeal, some customers argued that their
claims should include profits shown on the last account statement,
although the profits were fictions since no securities were ever
purchased with customers' money.
About Bernard L. Madoff
Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff
orchestrated the largest Ponzi scheme in history, with losses
topping US$50 billion. On Dec. 15, 2008, the Honorable Louis A.
Stanton of the U.S. District Court for the Southern District of
New York granted the application of the Securities Investor
Protection Corporation for a decree adjudicating that the
customers of BLMIS are in need of the protection afforded by the
Securities Investor Protection Act of 1970. The District Court's
Protective Order (i) appointed Irving H. Picard, Esq., as trustee
for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP
as his counsel, and (iii) removed the SIPA Liquidation proceeding
to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789)
(Lifland, J.). Mr. Picard has retained AlixPartners LLP as claims
agent.
On April 13, 2009, former BLMIS clients filed an involuntary
Chapter 7 bankruptcy petition against Bernard Madoff (Bankr.
S.D.N.Y. 09-11893). The case is before Hon. Burton Lifland. The
petitioning creditors -- Blumenthal & Associates Florida General
Partnership, Martin Rappaport Charitable Remainder Unitrust,
Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert
US$64 million in claims against Mr. Madoff based on the balances
contained in the last statements they got from BLMIS.
On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff
Securities International Limited in London under bankruptcy
protection pursuant to Chapter 15 of the U.S. Bankruptcy Code
(Bankr. S.D. Fla. 09-16751).
The Chapter 15 case was later transferred to Manhattan. In June
2009, Judge Lifland approved the consolidation of the Madoff SIPA
proceedings and the bankruptcy case.
Judge Denny Chin of the U.S. District Court for the Southern
District of New York on June 29, 2009, sentenced Mr. Madoff to
150 years of life imprisonment for defrauding investors in United
States v. Madoff, No. 09-CR-213 (S.D.N.Y.)
As of Feb. 18, 2011, a total of US$6.85 billion in claims by
investors has been allowed, with US$791.1 million to be paid by
the Securities Investor Protection Corp. Investors are expected
to receive additional distributions from money recovered by
Mr. Picard from lawsuits or settlements.
BERNARD L MADOFF: Distribution to Victims Delayed by Disputes
-------------------------------------------------------------
The Wall Street Journal's Michael Rothfeld reports that the
distribution of billions of dollars obtained for victims of
Bernard Madoff's Ponzi scheme has been delayed by court
challenges, people involved with the litigation say.
Madoff trustee, Irving Picard, previously said he expected to
begin distributing money obtained through legal settlements by the
end of last year.
According to the Journal, Stephen Harbeck, president of the
Securities Investor Protection Corp., an industry association that
protects customers of failed brokerages and for which Mr. Picard
is serving as trustee, said the "delay is the direct result of
what I would view as improvident appeals." Mr. Harbeck said,
"We're looking at various legal theories that will permit us to go
forward as fast as we can."
The Journal relates Mr. Harbeck said the problem with distributing
money at this stage is that, if appeals prove successful, "you
can't unscramble that egg."
About Bernard L. Madoff
Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff
orchestrated the largest Ponzi scheme in history, with losses
topping US$50 billion. On Dec. 15, 2008, the Honorable Louis A.
Stanton of the U.S. District Court for the Southern District of
New York granted the application of the Securities Investor
Protection Corporation for a decree adjudicating that the
customers of BLMIS are in need of the protection afforded by the
Securities Investor Protection Act of 1970. The District Court's
Protective Order (i) appointed Irving H. Picard, Esq., as trustee
for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP
as his counsel, and (iii) removed the SIPA Liquidation proceeding
to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789)
(Lifland, J.). Mr. Picard has retained AlixPartners LLP as claims
agent.
On April 13, 2009, former BLMIS clients filed an involuntary
Chapter 7 bankruptcy petition against Bernard Madoff (Bankr.
S.D.N.Y. 09-11893). The case is before Hon. Burton Lifland. The
petitioning creditors -- Blumenthal & Associates Florida General
Partnership, Martin Rappaport Charitable Remainder Unitrust,
Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert
US$64 million in claims against Mr. Madoff based on the balances
contained in the last statements they got from BLMIS.
On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff
Securities International Limited in London under bankruptcy
protection pursuant to Chapter 15 of the U.S. Bankruptcy Code
(Bankr. S.D. Fla. 09-16751).
The Chapter 15 case was later transferred to Manhattan. In June
2009, Judge Lifland approved the consolidation of the Madoff SIPA
proceedings and the bankruptcy case.
Judge Denny Chin of the U.S. District Court for the Southern
District of New York on June 29, 2009, sentenced Mr. Madoff to
150 years of life imprisonment for defrauding investors in United
States v. Madoff, No. 09-CR-213 (S.D.N.Y.)
As of Feb. 18, 2011, a total of US$6.85 billion in claims by
investors has been allowed, with US$791.1 million to be paid by
the Securities Investor Protection Corp. Investors are expected
to receive additional distributions from money recovered by
Mr. Picard from lawsuits or settlements.
BLOCKBUSTER INC: Gets Default Notice Under DIP Credit Pact
----------------------------------------------------------
In a regulatory filing with the U.S. Securities and Exchange
Commission filed on March 3, 2011, Blockbuster Inc. revealed that
on Feb. 25, 2011, the Company received a Notice of Event of
Default and Termination Letter, pursuant to which the Lenders
notified the Company that an Event of Default under the DIP Credit
Agreement has occurred and is continuing as of the Termination
Date.
As a result of the Event of Default, the Lenders directed
Wilmington Trust FSB, as the administrative agent and collateral
agent for the Lenders, which direction the Agent carried out by
execution of the Termination Letter, to (i) terminate the
Commitment of the Lenders to make further Revolving Loan Advances,
and (ii) declare all Obligations, including all of the Revolving
Loans, to be due and payable. As a result of the Specified
Remedies, the financing arrangements contemplated by the DIP
Credit Agreement were, pursuant to the Termination Letter,
terminated and the Loans and all other Obligations became
automatically due and payable as of the Termination Date.
Roderick J. McDonald, Esq., Blockbuster Inc.'s vice president,
general counsel, and secretary, says that demand was made of the
Company and each other Credit Party to repay their Obligations to
the Agent or any Lender under the Loan Documents. As of the
Termination Date, there were no outstanding draws under the DIP
Credit Agreement.
On February 25, 2011, the Agent, on behalf of the Requisite
Lenders, delivered a Carve-Out Trigger Notice specifying that (i)
as a result of the DIP Termination, a "Termination Event" has
occurred, (ii) the DIP Obligations have been accelerated, and
(iii) a $5,000,000 cap on all unpaid fees, disbursements, costs
and expenses incurred after the first business day following the
Termination Date by the Professional Persons has been invoked.
Delivery of the Carve-Out Trigger Notice constituted a roll-up
event under the Final DIP Order, Mr. McDonald said. He explained
that under the Final DIP Order, each entity that is both a
beneficial holder of the Company's 11.75% Senior Secured Notes due
2014 and a Lender as of the occurrence of a Roll-Up Event is
entitled to receive all or any portion of the Senior Secured Notes
as roll-up notes, up to an amount of Roll-Up Notes with an
aggregate principal balance equal to the lesser of (i) the total
outstanding principal amount of Senior Secured Notes held by the
entity on the Roll-Up Date, or (ii) the amount of the Lender's
aggregate commitment to make DIP Loans under the DIP Credit
Agreement, determined as of the Roll-Up Date, on the basis of the
then outstanding commitments and after giving effect to all
assignments of commitments under the DIP Credit Agreement and
outstanding Revolving DIP Loans made prior to the Roll-Up Date.
The aggregate principal amount of the Roll-Up Notes will not
exceed $125,000,000. The Roll-Up Notes are secured by the DIP
Liens and the DIP Collateral, excluding Avoidance Action Proceeds,
retroactive to the Petition Date and the entire outstanding amount
of the obligations under the Roll-Up Notes are allowed
Superpriority Claims, as provided in the Final DIP Order, as of
any date of calculation in addition to their continuing claims and
liens as Senior Secured Notes.
The Requisite Lenders have agreed to allow Blockbuster to use cash
collateral to fund operations through March 10, 2011, Mr. McDonald
also disclosed.
About Blockbuster Inc.
Based in Dallas, Texas, Blockbuster Inc. (Pink Sheets: BLOKA,
BLOKB) -- http://www.blockbuster.com/-- is a global provider of
rental and retail movie and game entertainment. It has a library
of more than 125,000 movie and game titles.
Blockbuster Inc. and 12 U.S. affiliates initiated Chapter 11
bankruptcy proceedings with a pre-arranged reorganization plan
in Manhattan on September 23, 2010 (Bankr. S.D.N.Y. Case No.
10-14997). It disclosed assets of $1 billion and debts of
$1.4 billion at the time of the filing.
Martin A Sosland, Esq., and Stephen Karotkin, Esq., at Weil,
Gotshal & Manges, serve as counsel to the Debtors. Rothschild
Inc. is the financial advisor. Alvarez & Marsal is the
restructuring advisor with A&M managing director Jeffery J.
Stegenga as chief restructuring officer. Kurtzman Carson
Consultants LLC is the claims and notice agent.
A steering group of senior secured noteholders is represented by
James P. Seery, Esq., and Paul S. Caruso, Esq., at Sidley Austin
LLP. U.S. Bank National Association as trustee and collateral
agent for the senior secured notes is represented by David
McCarty, Esq., and Kyle Mathews, Esq., at Sheppard Mullin Richter
& Hampton LLP. BDO Consulting is the financial advisor for U.S.
Bank.
Lenders led by Wilmington Trust FSB are providing the DIP
financing. The DIP Agent is represented by Peter Neckles, Esq.
and Alexandra Margolis, Esq., at Skadden, Arps, Slate, Meagher &
Flom LLP, in New York.
The Official Committee of Unsecured Creditors has retained Cooley
LLP as its counsel.
Blockbuster's non-U.S. operations and its domestic and
international franchisees, all of which are legally separate
entities, were not included in the filings and are not parties to
the Chapter 11 proceedings.
In its latest monthly operating report filed with the
Bankruptcy Court, Blockbuster disclosed $1.066 billion in
assets, $422.2 million in liabilities not subject to compromise
and $1.165 billion in liabilities subject to compromise, and a
deficit of $533.8 million as of Nov. 28, 2010.
Bankruptcy Creditors' Service, Inc., publishes BLOCKBUSTER
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by Blockbuster Inc. and its units.
(http://bankrupt.com/newsstand/or 215/945-7000)
BLOCKBUSTER INC: Files Non U.S. Stores Report for Jan. 2 Qtr.
-------------------------------------------------------------
Blockbuster Inc. and its units filed with the Court a periodic
report as of Jan. 2, 2011, regarding value, operations and
profitability of Blockbuster Inc.'s non-Debtor subsidiaries with
non-U.S. store operations.
The Non-debtor subsidiaries consist of non-U.S. store operations
in Canada, United Kingdom, Mexico, Denmark, Italy, Argentina and
Uruguay.
The Report reveals total assets of $436 million, and a net loss of
$17.6 million.
A copy of the Report can be accessed for free at:
http://bankrupt.com/misc/BBI_Report_02282011.pdf
About Blockbuster Inc.
Based in Dallas, Texas, Blockbuster Inc. (Pink Sheets: BLOKA,
BLOKB) -- http://www.blockbuster.com/-- is a global provider of
rental and retail movie and game entertainment. It has a library
of more than 125,000 movie and game titles.
Blockbuster Inc. and 12 U.S. affiliates initiated Chapter 11
bankruptcy proceedings with a pre-arranged reorganization plan
in Manhattan on September 23, 2010 (Bankr. S.D.N.Y. Case No.
10-14997). It disclosed assets of $1 billion and debts of
$1.4 billion at the time of the filing.
Martin A Sosland, Esq., and Stephen Karotkin, Esq., at Weil,
Gotshal & Manges, serve as counsel to the Debtors. Rothschild
Inc. is the financial advisor. Alvarez & Marsal is the
restructuring advisor with A&M managing director Jeffery J.
Stegenga as chief restructuring officer. Kurtzman Carson
Consultants LLC is the claims and notice agent.
A steering group of senior secured noteholders is represented by
James P. Seery, Esq., and Paul S. Caruso, Esq., at Sidley Austin
LLP. U.S. Bank National Association as trustee and collateral
agent for the senior secured notes is represented by David
McCarty, Esq., and Kyle Mathews, Esq., at Sheppard Mullin Richter
& Hampton LLP. BDO Consulting is the financial advisor for U.S.
Bank.
Lenders led by Wilmington Trust FSB are providing the DIP
financing. The DIP Agent is represented by Peter Neckles, Esq.
and Alexandra Margolis, Esq., at Skadden, Arps, Slate, Meagher &
Flom LLP, in New York.
The Official Committee of Unsecured Creditors has retained Cooley
LLP as its counsel.
Blockbuster's non-U.S. operations and its domestic and
international franchisees, all of which are legally separate
entities, were not included in the filings and are not parties to
the Chapter 11 proceedings.
In its latest monthly operating report filed with the
Bankruptcy Court, Blockbuster disclosed $1.066 billion in
assets, $422.2 million in liabilities not subject to compromise
and $1.165 billion in liabilities subject to compromise, and a
deficit of $533.8 million as of Nov. 28, 2010.
Bankruptcy Creditors' Service, Inc., publishes BLOCKBUSTER
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by Blockbuster Inc. and its units.
(http://bankrupt.com/newsstand/or 215/945-7000)
BLOCKBUSTER INC: Summit Says Debtor Administratively Insolvent
--------------------------------------------------------------
As reported in the Feb. 25, 2011 edition of the Troubled Company
Reporter, Blockbuster Inc. responded to the request of Summit
Distribution LLC that the bankruptcy court order immediate payment
or send Blockbuster Inc. to Chapter 7 liquidation. "The Motion is
an inappropriate and untimely attempt by Summit to unfairly
advantage its position vis-a-vis other administrative creditors in
these [Ch]apter 11 cases," Stephen Karotkin, Esq., at Weil,
Gotshal & Manges LLP, in New York, tells the Court on behalf of
the Debtors.
Summit Distribution LLC tells Judge Lifland that through their
recent filings, the Debtors have confirmed precisely what Summit
has alleged in its motion:
(a) that the Debtors are administratively insolvent;
(b) that the Debtors' Chapter 11 cases are being financed
solely on the backs of postpetition administrative
creditors and solely for the benefit of a group of large
hedge funds that own secured and likely undersecured
claims against the Debtors; and
(c) that the Debtors have no intention to comply with their
obligations under their Accommodation Agreement with
Summit or the Court' order allowing payment under certain
accommodation agreements with studios.
Incredibly, the Debtors are now also (i) refusing to allow Summit
to reclaim the goods it was lured into providing to the Debtors
through contemporaneous assurances of payment in the ordinary
course of business, and (ii) adding insult to injury by asking the
Court to bless a sale of all of their assets to their prepetition
secured lenders, without paying Summit or, for that matter,
numerous other administrative claimants, for goods provided,
rather than converting the cases to Chapter 7 of the Bankruptcy
Code, Paul N. Silverstein, Esq., at Andrews Kurth LLP, in New
York, contends.
"This Court should not countenance the Debtors' actions. If the
Debtors continue to refuse to honor the Studio Accommodation Order
and the Accommodation Agreement then, at the very least, law and
equity dictate that the Court order the immediate return to Summit
of the goods it provided to the Debtors," Mr. Silverstein argues.
"Additionally, these cases should be converted to Chapter 7
forthwith to avoid any further injustice to Summit and the
Debtors' other administrative creditors and to stop the
significant administrative 'burn,'" he says.
About Blockbuster Inc.
Based in Dallas, Texas, Blockbuster Inc. (Pink Sheets: BLOKA,
BLOKB) -- http://www.blockbuster.com/-- is a global provider of
rental and retail movie and game entertainment. It has a library
of more than 125,000 movie and game titles.
Blockbuster Inc. and 12 U.S. affiliates initiated Chapter 11
bankruptcy proceedings with a pre-arranged reorganization plan
in Manhattan on September 23, 2010 (Bankr. S.D.N.Y. Case No.
10-14997). It disclosed assets of $1 billion and debts of
$1.4 billion at the time of the filing.
Martin A Sosland, Esq., and Stephen Karotkin, Esq., at Weil,
Gotshal & Manges, serve as counsel to the Debtors. Rothschild
Inc. is the financial advisor. Alvarez & Marsal is the
restructuring advisor with A&M managing director Jeffery J.
Stegenga as chief restructuring officer. Kurtzman Carson
Consultants LLC is the claims and notice agent.
A steering group of senior secured noteholders is represented by
James P. Seery, Esq., and Paul S. Caruso, Esq., at Sidley Austin
LLP. U.S. Bank National Association as trustee and collateral
agent for the senior secured notes is represented by David
McCarty, Esq., and Kyle Mathews, Esq., at Sheppard Mullin Richter
& Hampton LLP. BDO Consulting is the financial advisor for U.S.
Bank.
Lenders led by Wilmington Trust FSB are providing the DIP
financing. The DIP Agent is represented by Peter Neckles, Esq.
and Alexandra Margolis, Esq., at Skadden, Arps, Slate, Meagher &
Flom LLP, in New York.
The Official Committee of Unsecured Creditors has retained Cooley
LLP as its counsel.
Blockbuster's non-U.S. operations and its domestic and
international franchisees, all of which are legally separate
entities, were not included in the filings and are not parties to
the Chapter 11 proceedings.
In its latest monthly operating report filed with the
Bankruptcy Court, Blockbuster disclosed $1.066 billion in
assets, $422.2 million in liabilities not subject to compromise
and $1.165 billion in liabilities subject to compromise, and a
deficit of $533.8 million as of Nov. 28, 2010.
Bankruptcy Creditors' Service, Inc., publishes BLOCKBUSTER
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by Blockbuster Inc. and its units.
(http://bankrupt.com/newsstand/or 215/945-7000)
BLUEKNIGHT ENERGY: Inks Non-Disclosure Pact With Solus
------------------------------------------------------
Effective as of March 1, 2011, Solus Alternative Asset Management
LP entered into a Non-Disclosure Agreement with Blueknight Energy
Partners, L.P. and Solus GP LLC as the general partner of Solus, a
copy of which is available for free at:
http://ResearchArchives.com/t/s?7493
The NDA was entered into in anticipation of a meeting that was
held on March 3, 2011 among the Company, General Partner, Solus
and other major investors of the Company, to discuss the
refinancing and recapitalization of Blueknight. Pursuant to the
NDA, Solus agreed, among other things, to maintain confidential
certain non-public information pertaining to the Company and its
affiliates made available to Solus.
In addition, Solus agreed that for a period of 20 days from the
date of the Refinancing Meeting, unless Company specifically
consents in writing, Solus and its controlled affiliates will not,
directly or indirectly, effect or seek, offer or propose to
effect, or cause or participate in or in any way assist any other
person to effect or seek, offer or propose to effect or
participate in, any sale or acquisition of any equity securities
or acquisition of assets of the Company or its controlled
affiliates.
Solus Alternative Asset Management LP and its affiliates
beneficially own 1,570,000 shares of common stock of the Company
representing 7.2% of the shares outstanding, based upon a total of
21,727,724 common units outstanding as of Nov. 5, 2010 as reported
on the Company's Quarterly Report on Form 10-Q for the fiscal
quarter ended Sept. 30, 2010.
About Blueknight Energy
Blueknight Energy Partners, L.P. (Pink Sheets: BKEP)
-- http://www.bkep.com/-- provides integrated terminalling,
storage, processing, gathering and transportation services for
companies engaged in the production, distribution and marketing of
crude oil and asphalt product. It provides services for the
customers, and its only inventory consists of pipeline linefill
and tank bottoms necessary to operate the assets. It has three
operating segments: crude oil terminalling and storage services,
crude oil gathering and transportation services, and asphalt
services.
The Company's balance sheet at Sept. 30, 2010, showed
$295.96 million in total assets, $444.02 million in current
liabilities, $4.69 million in long-term payable to related
parties, and a partners' deficit of $152.75 million.
* * *
PricewaterhouseCoopers LLP, in Tulsa, Okla., in its report on the
Partnership's financial statements for the year ended December 31,
2009, expressed substantial doubt about its ability to continue as
a going concern. The independent auditors noted that the
Partnership has substantial long-term debt, a deficit in partners'
capital, and significant litigation uncertainties.
BLUEKNIGHT ENERGY: Inks Non-Disclosure Agreement With Swank
-----------------------------------------------------------
Swank Capital, LLC, has entered into a Non-Disclosure Agreement
effective as of March 3, 2011 with Blueknight Energy Partners,
L.P, and Blueknight Energy Partners G.P., L.L.C., a copy of which
is available for free at http://ResearchArchives.com/t/s?74a3
Swank Capital agrees to (i) maintain the confidentiality of
certain "non-public" information relating to Blueknight and
Blueknight GP and (ii) refrain from trading in the securities of
Blueknight or its affiliates without the prior written consent of
Blueknight for a period of 20 days' from the scheduled meeting
between Swank Capital, Blueknight, Blueknight GP and certain other
parties to discuss the refinancing and recapitalization of
Blueknight.
Swank Capital, LLC and its affiliates beneficially own 3,516,315
shares of common stock of Blueknight Energy Partners, L.P.
representing 16.2% of the shares outstanding. As of Nov. 5, 2010,
there were 21,538,462 preferred units, 21,727,724 common units and
12,570,504 subordinated units outstanding.
About Blueknight Energy
Blueknight Energy Partners, L.P. (Pink Sheets: BKEP)
-- http://www.bkep.com/-- provides integrated terminalling,
storage, processing, gathering and transportation services for
companies engaged in the production, distribution and marketing of
crude oil and asphalt product. It provides services for the
customers, and its only inventory consists of pipeline linefill
and tank bottoms necessary to operate the assets. It has three
operating segments: crude oil terminalling and storage services,
crude oil gathering and transportation services, and asphalt
services.
The Company's balance sheet at Sept. 30, 2010, showed
$295.96 million in total assets, $444.02 million in current
liabilities, $4.69 million in long-term payable to related
parties, and a partners' deficit of $152.75 million.
* * *
PricewaterhouseCoopers LLP, in Tulsa, Okla., in its report on the
Partnership's financial statements for the year ended December 31,
2009, expressed substantial doubt about its ability to continue as
a going concern. The independent auditors noted that the
Partnership has substantial long-term debt, a deficit in partners'
capital, and significant litigation uncertainties.
BROADSTAR WIND: Wick Verdict Against Co-Founder
-----------------------------------------------
Wick Phillips Gould & Martin, LLP, disclosed an important verdict
has been issued by a federal judge in the Northern District of
Texas, in a suit filed by Wick Phillips' client, BroadStar Wind
Systems Group, a leading innovator of wind turbine technology
based in Dallas.
In February 2010, BroadStar initiated suit against former officer
and co-founder, Thomas Stephens, alleging that Mr. Stephens was
engaging in activities designed to cripple the business in order
to secure ownership of its AeroCam technology. A unique wind
turbine designed to be mounted on free-standing towers at
commercial and industrial sites, the AeroCam technology is
considered the first truly viable wind energy solution for the
commercial environment.
The suit was filed shortly after BroadStar and its related
entities received a $6 million commitment from a Connecticut
investor with plans to help the company develop and bring the
revolutionary technology to market. As a result of Mr. Stephens's
actions, however, the Company was unable to raise additional
needed capital. Without the needed funding, it was forced to file
for Chapter 11 bankruptcy protection on May 11, 2010.
The bankruptcy and the Stephens lawsuit have proceeded
concurrently, as the outcome of the Chapter 11 case is directly
affected by the resolution of the Stephens litigation. In a
decision issued by U.S. District Judge W. Royal Furgeson, Jr., the
Court ruled that the central technology at issue is the rightful
property of the Company, thus rejecting Mr. Stephens' attempts to
unwind the earlier $6 million transaction.
"This decision is a big victory for BroadStar," said Andrew M.
Gould, lead counsel of the Wick Phillips team representing
BroadStar. "This case is critical for our client. On a broader
scale, the decision reflects that multi-million dollar
transactions negotiated over many months by individuals and
companies represented by counsel will be honored and enforced."
The Wick Phillips team working on the BroadStar case includes
partner Andrew Gould, partner Marcia N. Jackson and associate
Angeleque Linville. The case is BroadStar Wind Systems Group, et
al. v. Thomas G. Stephens, et al., Case No. 3:10-cv-0369-F, in the
U.S. District Court for the Northern District of Texas, appeal
docketed, No. 11-10025 (5th Cir. Jan. 11, 2011)).
About Wick Phillips
A leading business law firm with offices in Dallas and Fort Worth,
Wick Phillips Gould & Martin, LLP provides a full spectrum of
legal services. Andrew Gould heads the firm's Labor and
Employment Practice, is Board Certified in the area of Labor and
Employment Law, and specializes in representing businesses in all
facets of employment law and related litigation.
About BroadStar Wind Systems
Founded in 2004 BroadStar Wind Systems --
http://www.broadstarwindsystems.com/-- is a Dallas-based
engineering and technology firm, comprised of experts in
aerodynamics and turbine physics, which has developed a
breakthrough technology solution for the efficient and affordable
generation of wind power. With its scientifically proven and
aerodynamically efficient AeroCam turbine, BroadStar makes wind-
power generation more accessible and affordable, and delivers a
measurable return on investment more quickly than competitive
solutions.
Engineering and technology firm BroadStar Wind Systems Group LLC
sought Chapter 11 protection (Bankr. N.D. Tex. Case No. 10-33373)
on May 11, 2010, and arranged for a $1.5 million debtor-in-
possession loan at the time of the filing. The Debtor estimated
its assets at less than $50,000 and its debts at more than
$1 million.
Three affiliates of Broadstar Wind Systems Management, LLC, also
sought chapter 11 protection on May 11, 2010: BroadStar
Developments LP (Bankr. N.D. Tex. Case No. 10-33378); Broadstar
Wind Systems LP (Bankr. N.D. Tex. Case No. 10-_____); and
BroadStar Developments Management LLC (Bankr. N.D. Tex. Case No.
10-33375).
BUILDERS FIRSTSOURCE: Widens Net Loss to $95.5-Mil. in 2010
-----------------------------------------------------------
Builders Firstsource, Inc., filed its annual report on Form 10-K,
reporting a net loss of $95.51 million on $700.34 million of sales
for the year ended Dec. 31, 2010, compared with a net loss of
$61.85 million on $677.88 million of sales during the prior year.
The Company's balance sheet at Dec. 31, 2010 showed
$412.80 million in total assets, $253.30 million in total
liabilities and $159.50 million in total stockholders' equity.
A full-text copy of the Form 10-K filed with the Securities and
Exchange Commission is available for free at:
http://ResearchArchives.com/t/s?74a8
About Builders FirstSource
Headquartered in Dallas, Texas, Builders FirstSource Inc. --
http://www.bldr.com/-- supplies and manufactures building
products for residential new construction. The Company operates
in 9 states, principally in the southern and eastern United
States, and has 55 distribution centers and 51 manufacturing
facilities, many of which are located on the same premises as its
distribution facilities.
* * *
Builders FirstSource Inc. carries 'CCC+' issuer credit ratings,
with negative outlook, from Standard & Poor's. It has a 'Caa1'
long term corporate family rating and 'Caa3' probability of
default ratings, with negative outlook, from Moody's Investors
Service.
In July 2010, when S&P revised the rating outlook to negative and
affirmed the ratings, S&P said the 'CCC+' corporate credit rating
reflects what S&P considers to be the company's vulnerable
business risk and highly leveraged financial profile. The rating
also reflects Builders FirstSource's exposure to the new
residential construction market, which is experiencing a prolonged
slump, faces highly competitive markets, and has a limited end-
market focus. In addition, the company's EBITDA loss was
approximately $32 million for the 12 months ended June 30, 2010,
compared with $29 million for the same period a year ago, leading
to its highly leveraged financial profile. Given its weak
earnings, a trend S&P expects to continue in the near term,
combined with low levels of housing starts and highly competitive
market conditions, S&P expects EBITDA to remain negative through
the remainder of 2010.
BUMBLE BEE: Moody's Cuts CFR to 'B2' on Shareholder Distribution
----------------------------------------------------------------
Moody's Investors Service has downgraded the corporate family
rating of Bumble Bee Holdings, Inc., to B2 from B1 following the
company's announcement of plans to make a $145 million
distribution to shareholders. Concurrent with this action,
Moody's assigned a Caa1 rating to the proposed $150 million
senior PIK toggle notes due 2018. Proceeds from the notes
offering will be used to fund the distribution and related fees.
The rating outlook is stable.
These ratings were downgraded:
-- The corporate family rating to B2 from B1; and
-- The probability of default rating to B2 from B1.
This rating was assigned at Bumble Bee Holdco S.C.A.:
-- Caa1 (LGD6, 93%) to the proposed $150 million senior PIK
toggle notes due 2018.
The ratings on the PIK toggle notes have been assigned subject to
review of final documentation.
This rating was affirmed:
-- B2 (LGD4, 52% (from 61%)) on the $605 million 9% senior
secured notes due 2017
Ratings Rationale
The downgrade of the corporate family rating to B2 reflects the
aggressiveness of Bumble Bee's fiscal posture as demonstrated by
its increased financial leverage and meaningful reduction in
sponsor contributed equity following the shareholder distribution.
The B2 rating reflects Bumble Bee's proforma adjusted financial
leverage of 6.8x, aggressive financial policies, limited category
diversification and the commodity-like nature of the North
American shelf stable seafood industry. The rating is supported
by Bumble Bee's large scale, top-tier position in the North
American shelf-stable seafood category, well-established brand
names, and low cost sourcing capabilities. Further, the rating
anticipates that Bumble Bee will continue to generate solid cash
flows, despite the increased interest burden, and reduce its
reliance on its revolver over the next two years with available
cash.
The stable outlook reflects the expectation that Bumble Bee will
continue to generate solid margins despite increasing fish,
aluminum and fuel prices in 2011 given its ability to pass along
price increases, particularly on its albacore tuna products.
Further, ongoing category growth initiatives are expected to
support the company's top line expansion beginning in 2011.
Moody's anticipates leverage to remain high over the next twelve
to eighteen months despite modest revenue growth and Bumble Bee's
plans to reduce ABL borrowings.
The ratings are unlikely to be upgraded in the near term as a
result of Moody's view that Bumble Bee's financial policies will
continue to be aggressive given its private equity ownership. A
demonstrated commitment to maintaining leverage below 5.0x would
be viewed positively assuming the company maintains an adequate
liquidity profile. While leverage is viewed as high, Moody's
would not anticipate lowering ratings absent a meaningful
deterioration in its operating performance, addition of
incremental debt as a result of an additonal distribution or the
tightening of its liquidity profile.
The proposed $150 million PIK toggle notes are expected to be
senior unsecured obligations of Bumble Bee Holdco S.C.A. and will
not be guaranteed by any of the company's operating subsidiaries
or holding companies that guarantee the senior secured notes or
$225 million asset based lending facility (not rated by Moody's).
The notes will contain a PIK toggle feature that will allow the
company to defer interest payments at its discretion by adding the
deferred interest to the notes initial principal obligation.
Bumble Bee, headquartered in San Diego, California, is the largest
producer and marketer of shelf-stable seafood in North America and
maintains a leading share in virtually all segments of the U.S.
and Canadian shelf-stable seafood categories. Revenues for the
twelve months ending October 2, 2010, were $945 million.
BUMBLE BEE: S&P Cuts Rating to 'B' on Hiked Leverage
----------------------------------------------------
Standard & Poor's Ratings Services said that it lowered its
corporate credit rating on San Diego, Calif.-based seafood
producer Bumble Bee Holdings Inc. (formerly known as Bumble Bee
Foods L.P.) to 'B' from 'B+'. The outlook is stable.
"The downgrade reflects Bumble Bee's increased leverage and
S&P's view of management's very aggressive financial policy,
as demonstrated by its plans to issue a debt-financed dividend
following the very recent purchase of the company by financial
sponsor Lion Capital," said Standard & Poor's credit analyst Bea
Chiem.
The ratings on Bumble Bee reflect the company's weak business
profile -- characterized by its narrow product focus, limited
international diversity, mature growth prospects for shelf-stable
seafood products, and relatively low operating margins -- as well
as its highly leveraged financial profile. S&P believes the
company benefits from its leading market positions in shelf-stable
seafood and well-recognized brands sold in a variety of retailers
across North America.
The outlook on Bumble Bee is stable. Although S&P estimates
leverage will increase closer to 6.5x following this transaction,
S&P believes Bumble Bee will reduce leverage to closer to 6x by
the end of 2011. S&P could consider a downgrade if the company's
financial policies become more aggressive, if leverage does not
decline as expected, or if liquidity becomes constrained. S&P
estimates a downgrade could occur in a scenario of low-single-
digit sales decline, an EBITDA margin decline by 100 basis points
or more, and if debt is not substantially reduced. Although
unlikely in the near term, S&P could consider an upgrade if Bumble
Bee is able to reduce leverage to less than 5.5x and financial
policies become less aggressive.
CAESARS ENTERTAINMENT: S&P Ups Rating on Ling & Octavius Loan to B
------------------------------------------------------------------
Standard & Poor's Ratings Services revised its preliminary ratings
on the proposed senior secured term loan of Caesars Entertainment
Corp.'s indirect subsidiaries, currently referred to as Linq
Borrower and Octavius Borrower. Based on conversations with
Caesars management, S&P understands that the terms of the proposed
financing have been revised, including an increase in the proposed
term loan size to at least $450 million from the $400 million
previously contemplated. Given this increase in debt, which will
be offset by a reduction in equity contributed by Caesars, S&P
believes recovery prospects will now be lower for senior secured
term loan lenders in the event of a payment default than under
S&P's previous analysis.
As a result, S&P is revising its preliminary recovery rating on
the senior secured term loan to '2', indicating its expectation of
substantial (70% to 90%) recovery for lenders in the event of a
payment default, from '1' (90% to 100%). S&P has also lowered its
preliminary issue-level rating on the term loan to 'B' (one notch
higher than its preliminary 'B-' corporate credit rating on the
borrowers) from 'B+', in accordance with S&P's notching criteria
for a '2' recovery rating.
S&P's preliminary 'B-' corporate credit rating and stable rating
outlook on Linq Borrower and Octavius Borrower are unaffected by
the proposed revisions to the capital structure. The additional
proposed debt does not meaningfully impair the subsidiaries'
expected credit measures once the projects are fully operational,
which S&P believes could be supportive of a one-notch higher
rating absent the overhang of Caesars Entertainment Corp.'s weak
credit profile.
Ratings List
Linq Borrower
Octavius Borrower
Corporate Credit Rating B-(prelim)/Stable/--
Revised Ratings
Linq Borrower
Octavius Borrower
To From
-- ----
Sr secd term loan due 2017 B(prelim) B+(prelim)
Recovery Rating 2(prelim) 1(prelim)
CANO PETROLEUM: Clint Carlson Discloses 9.2% Equity Stake
---------------------------------------------------------
In an amended Schedule 13D filing with the U.S. Securities and
Exchange Commission, Clint D. Carlson and his affiliated companies
disclosed that they beneficially own 4,181,598 shares of common
stock of Cano Petroleum, Inc., representing 9.2% of the shares
outstanding. There were 45,403,749 shares outstanding of the
Company's common stock, par value $.0001 per share, as of Feb. 14,
2011.
About Cano Petroleum
Cano Petroleum, Inc., is an independent Texas-based energy
producer with properties in the mid-continent region of the United
States. Cano's primary focus is on increasing domestic production
from proven fields using enhanced recovery methods. Cano trades
on the NYSE Amex Stock Exchange under the ticker symbol CFW.
The Company's balance sheet at Sept. 30, 2010, showed
$258.64 million in total assets, $127.59 million in total
liabilities, and stockholders' equity of $131.05 million.
As reported by the Troubled Company Reporter on Sept. 28, 2010,
the Company said if it is unable to successfully execute one
of its strategic alternatives, restructure its existing
indebtedness, obtain further waivers or forbearance from its
existing lenders or otherwise raise significant additional
capital, it is unlikely that it will be able to meet its
obligations as they become due and to continue as a going concern.
As a result, the Company will likely file for bankruptcy or seek
similar protection. Moreover, it is possible that the Company's
creditors may seek to initiate involuntary bankruptcy proceedings
against it or against one or more of its subsidiaries, which would
force it to make a defensive voluntary filing of its own.
CAPITOL BANCORP: Amends 10-Q on $11.7-Mil. Add'l Loan Losses
------------------------------------------------------------
Capitol Bancorp Ltd. filed with the U.S. Securities and Exchange
Commission an amended quarterly report on Form 10-Q for the
quarterly period ended Sept. 30, 2010. The unaudited condensed
consolidated financial statements as of and for the three months
and nine months ended Sept. 30, 2010 have been revised to reflect
an additional provision for loan losses of $11.7 million resulting
from Michigan Commerce Bank's amended regulatory financial
statements as of and for the period ended Sept. 30, 2010 filed in
February 2011. Michigan Commerce Bank is a significant subsidiary
of Capitol.
Michigan Commerce Bank's amendment of its regulatory financial
statements as of and for the period ended Sept. 30, 2010 to
increase its allowance for loan losses and related provision for
loan losses in the amount of $11.7 million, resulted from a
recently-completed joint examination of the bank by the Federal
Deposit Insurance Corporation and the Office of Financial and
Insurance Regulation of the State of Michigan. Such examination
commenced in September 2010. The bank's decision to amend its
interim financial statements was based on discussion with those
regulatory agencies regarding expectations that certain
examination findings, including a change in estimate regarding the
bank's allowance for loan losses as of Sept. 30, 2010, would
require such amendment; however, the bank has not yet received the
related examination report.
The amended statement of operations reflects a net loss of
$57.24 million on $48.41 million of total interest income for the
three months ended Sept. 30, 2010, compared with a net loss of
$128.12 million on $56.32 million of total interest income for the
same period during the prior year.
The amended balance sheet at Sept. 30, 2010 showed $4.23 billion
in total assets, $4.16 billion in total liabilities and
$65.96 million in total equity.
A full-text copy of the Form 10-Q, as amended, is available for
free at http://ResearchArchives.com/t/s?74a5
About Capitol Bancorp Limited
Capitol Bancorp Limited (NYSE: CBC) --
http://www.capitolbancorp.com/-- is a $5.1 billion national
community banking company, with a network of bank operations in 16
states. Founded in 1988, Capitol Bancorp Limited has executive
offices in Lansing, Michigan and Phoenix, Arizona.
In September 2009, Capitol and its second-tier bank holding
companies entered into a written agreement with the Federal
Reserve Bank of Chicago under which Capitol has agreed, among
other things, to submit to the Reserve Bank a written plan to
maintain sufficient capital at Capitol on a consolidated basis and
at Michigan Commerce Bank (as a separate legal entity on a stand-
alone basis); and a written plan to enhance the consolidated
organization's risk management practices, a strategic plan to
improve the consolidated organization's operating results and
overall condition and a cash flow projection.
Certain of Capitol's bank subsidiaries have entered into formal
agreements with their applicable regulatory agencies. Those
agreements provide for certain restrictions and other guidelines
and/or limitations to be followed by the banks.
In 2009, Capitol commenced the deferral of interest payments on
its various trust-preferred securities, as is permitted under the
terms of the securities, to conserve cash and capital resources.
The payment of interest may be deferred for periods up to five
years. During such deferral periods, Capitol is prohibited from
paying dividends on its common stock (subject to certain
exceptions) and is further restricted by Capitol's written
agreement with the Federal Reserve Bank of Chicago. Accrued
interest payable on such securities approximated $18.1 million at
June 30, 2010.
CEDAR FUNDING: Bankr. Judge Won't Review Order Reducing LECG Fees
-----------------------------------------------------------------
Bankruptcy Judge Charles Novack denied LECG LLC's motion for
partial reconsideration relating to the Court's Dec. 12, 2010 oral
ruling which denied, in part, LECG's second, interim fee
application. LECG was retained by the Chapter 11 trustee for
Cedar Funding, Inc., in July 2008 to provide accounting services
and litigation support required by the trustee and his counsel to
address the Ponzi scheme that was at the heart of the Debtors'
operations. The firm's fee application sought $1,384,234 in fees,
which represented more than 5,000 hours of billable time for the
Oct. 1, 2008 to July 31, 2009 time period. The fee application
included more than a hundred project codes, and involved services
ranging from the preparation of the bankruptcy estate's tax
returns, the review and re-creation of the Debtors' bank records,
to litigation support for the Chapter 11 trustee's counsel.
A copy of the Court's March 7, 2011 Memorandum Decision and Order
is available at http://is.gd/TAS7pKfrom Leagle.com.
About Cedar Funding
Monterey, California-based Cedar Funding Inc. --
http://www.cedarfundinginc.com/-- was a mortgage lender. David
Nilsen, the principal, filed for Chapter 11 bankruptcy for Ceder
Funding after the Company stopped monthly payments to its
investors.
Cedar Funding filed a Chapter 11 petition on May 26, 2008 (Bankr.
N.D. Calif. Case No. 08-52709) due to the collapse of its Ponzi
scheme. Cedar Funding accepted many millions of dollars from
hundreds of individuals who believed they were acquiring
fractional interests in loans that were secured by real property.
Many more invested with CFI through a related entity, Cedar
Funding Mortgage Fund LLP, that acquired fractional interests in
the name of the Fund. CFI failed to record assignments of its
deeds of trust that would have provided security interests to most
of its investors, including the Fund.
R. Todd Neilson was appointed Chapter 11 trustee in the case.
Cecily A. Dumas, Esq., at Friedman, Dumas and Springwater, in San
Francisco, represents Mr. Neilson. The Debtor estimated assets of
less than $50,000 and debts of $100 million to $500 million in its
Chapter 11 petition.
As reported by the Troubled Company Reporter on March 7, 2011, the
Bankruptcy Court confirmed the joint Chapter 11 plan of
liquidation proposed by R. Todd Neilson, the Chapter 11 trustee
for the bankruptcy estates of Cedar Funding, Inc., et al., and the
Official Committee of Unsecured Creditors. According to the
disclosure statement explaining the Plan, holders of unsecured
claims aggregating $146,000,000 are expected to recover 5% to 10%
of their allowed claims. Holders of unsecured claims classified
as convenience claims -- expected to total $700,000 -- will each
receive a one-time payment of $2,000 and are projected to recover
100 cents on the dollar.
CHENIERE ENERGY: Sues Centerbridge Over Default Allegations
-----------------------------------------------------------
Dow Jones' DBR Small Cap reports that Cheniere Energy Inc. has
filed a lawsuit against Centerbridge Partners LP, saying the
distressed investment-focused hedge fund disrupted Cheniere's
business with a letter alleging it had defaulted on debt.
About Cheniere Energy
Cheniere Energy, Inc. (NYSE Amex: LNG) -- http://www.cheniere.com/
-- is a Houston-based energy company primarily engaged in LNG
related businesses, and owns and operates the Sabine Pass LNG
receiving terminal and Creole Trail pipeline in Louisiana.
Cheniere is pursuing related business opportunities both upstream
and downstream of the Sabine Pass LNG receiving terminal.
Cheniere is also the founder and holds a 30% limited partner
interest in another LNG receiving terminal.
Cheniere Energy reported a net loss of $40.6 million for the
quarter ended Sept. 30, 2010, compared with a net loss of
$42.5 million for the comparable 2009 period. Revenue was
$68.25 million in the third quarter of 2010 compared with
$56.33 million in the same period in 2009.
The Company's balance sheet at Sept. 30, 2010, showed
$2.61 billion in total assets, $354.40 million in total current
liabilities, $2.59 billion in long-term debt, $74.63 million in
long-term debt - related to parties, $30.73 million in deferred
revenue, $2.31 million in other non-current liabilities, and a
stockholders' deficit of $431.01 million.
CHESTER COUNTY PET: Voluntary Chapter 11 Case Summary
-----------------------------------------------------
Debtor: Chester County PET Associates, LLC
43 Leopard Road
Paoli Executive Green II, Suite 200
Paoli, PA 19301
Bankruptcy Case No.: 11-16897
Chapter 11 Petition Date: March 8, 2011
Court: U.S. Bankruptcy Court
District of New Jersey (Newark)
Debtor's Counsel: Ilana Volkov, Esq.
COLE, SCHOTZ, MEISEL, FORMAN & LEONARD
25 Main Street
Hackensack, NJ 07601
Tel: (201) 489-3000
Fax: 201-489-1536
E-mail: ivolkov@coleschotz.com
Estimated Assets: $1 million to $10 million.
Estimated Debts: $10 million to $50 million*
In its schedules, the Debtor disclosed $10,623,514 in liabilities.
The list of unsecured creditors filed together with its petition
does not contain any entry.
The petition was signed by Ronald J. Lissak, managing member.
Debtor affiliates that filed for Chapter 11 on Feb. 3, 2011.
Entity Case No.
------ --------
Integral Nuclear Associates, LLC 11-13066
Doylestown PET Associates, LLC 11-13067
Imaging Technology Associates, LLC 11-13068
Integral Mobile PET/CT, LLC 11-13070
Integral PET Associates, LLC 11-13072
Integral PET Holdings, LLC 11-13075
Integral PET Holdings II, LLC 11-13076
P&K Equity Group, Inc. 11-13077
Limerick PET Associates, LLC 11-13078
Meadowbrook PET Associates, LLC 11-13080
Mobile PET/CT Associates, LLC 11-13082
Nuclear Management, Inc.
f/k/a Integral PET Center, Inc. 11-13083
Pennsylvania PET Associates, LLC 11-13085
Previous Chapter 11 filings by the debtors and their affiliates:
Entity Case No. Petition Date
------ -------- -------------
Integral Nuclear Associates, LLC 07-15183 04/15/07
Abington Nuclear Imaging, LLC 07-15186 04/16/07
Adirondack PET Associates, LLC 07-15187 04/16/07
Atwood Nuclear Imaging, LLC 07-15188 04/16/07
Chester County PET Associates, LLC 07-15189 04/16/07
Doylestown PET Associates, LLC 07-15190 04/16/07
Englewood PET Associates, LLC 07-15191 04/16/07
Forest Hills PET Associates, LLC 07-15204 04/16/07
Havertown PET Associates, LLC 07-15196 04/16/07
Imaging Technology Associates, LLC 07-15192 04/16/07
Integral Advisory Associates, LLC 07-15194 04/16/07
Integral Financial Corporation 07-15197 04/16/07
Integral Mobile PET Associates, LLC 07-15198 04/16/07
Integral Mobile PET/CT, LLC 07-15215 04/16/07
Integral PET Associates, LLC 07-15200 04/16/07
Integral PET Holdings, LLC 07-15201 04/16/07
Integral PET Holdings II, LLC 07-15203 04/16/07
ITA Holdings, LLC 07-15202 04/16/07
Limerick PET Associates, LLC 07-15205 04/16/07
Meadowbrook PET Associates, LLC 07-15206 04/16/07
Mobile PET/CT Associates, LLC 07-15207 04/16/07
Nuclear Management, Inc. 07-15208 04/16/07
f/k/a Integral PET Center, Inc.
Pennsylvania PET Associates, LLC 07-15209 04/16/07
R.J. Management Associates, LLC 07-15210 04/16/07
Wyoming Valley PET Associates, LLC 07-15213 04/16/07
CINEMARK USA: Moody's Gives Stable Outlook, Affirms 'B1' Rating
---------------------------------------------------------------
Moody's Investors Service revised Cinemark USA, Inc's ratings
outlook to stable from positive while at the same time affirming
the company's B1 corporate family and probability of default
ratings, and SGL-1 speculative grade liquidity rating. Related
instrument ratings were also affirmed. The outlook action was
taken to better align the outlook with underlying industry
fundamentals, the company's consistent credit metrics and
financial policies.
North American industry conditions are, at best, tepid, a
reflection of modest GDP and consumer discretionary income
expansion that will limit revenue and cash flow expansion
opportunities for the cinema exhibitors. As well, there is the
over-hang of weak commercial real estate activity which will limit
organic growth. At the company level, Cinemark has maintained
relatively consistent leverage and coverage and has maintained a
large cash balance. While the large cash position is credit-
positive, the company's reluctance to reduce debt signals that
flexibility is important. Accordingly, with neither industry
fundamentals nor expected management actions likely to modify the
company's leverage and coverage measures, Moody's see no near term
rating migration catalysts and have stabilized the ratings
outlook.
This summarizes the rating actions and Cinemark's ratings:
Ratings and Outlook Actions:
Issuer: Cinemark USA, Inc.
-- Outlook, Changed to Stable from Positive
-- Corporate Family Rating, Unchanged at B1
-- Probability of Default Rating, Unchanged at B1
-- Speculative Grade Liquidity Rating, Unchanged at SGL-1
-- Senior Secured Bank Credit Facility, Unchanged at Ba3 (LGD3,
31%)
-- Senior Unsecured Regular Bond/Debenture, Unchanged at B3
(LGD5, 85%)
Summary Rating Rationale
Cinemark's corporate family rating is B1. The company's
relatively high financial leverage, limited ability to generate
free cash flow, and related limited ability to repay debt from
internally generated cash flow are the key considerations that
constrain the ratings. This is especially relevant as business
conditions evolve. While cinema exhibition has generally been
recession-resistant, limited price elasticity together with
evolving consumer preferences and distribution technologies
suggest that the business is becoming more vulnerable to
substitution from alternative entertainment and delivery conduits.
Cinemark's exposure to the growing South American market, and the
company's ability to fund growth from internally generated cash
flow partially offsets these systemic issues. Notwithstanding the
industry's historic ability to adapt to technological change,
Moody's think that operational risks are mounting. In turn, as
operational risks expand, aggregate risk can be maintained by way
of more conservative financial policies, although Cinemark has yet
to take steps to reduce leverage in the face of these evolving
operational risks. Cinemark maintains very good liquidity
arrangements and, in comparison to other cinema exhibitors, has
displayed good financial discipline, limiting outgoing dividends
to reasonable levels, eschewing significant share buy-backs, and
maintaining a substantial cash balance. The financial discipline
and strong liquidity are credit-positive. Cinemark's recent
financial performance and credit protection measures have been
fairly consistent and are well within the framework of its B1
rating. This is positive given the international growth
initiative and systemic risks.
Rating Outlook
Cinemark's prolonged maintenance of its substantial cash position
signals a desire to maintain flexibility and comfort with leverage
and coverage measures. With tepid industry fundamentals, Moody's
assessment that the business can sustain its existing credit
profile, and with no management predisposition to change it, the
rating is stable.
What Could Change the Rating -- Up
The rating could be upgraded if Moody's expect TD/EBITDA to be
sustained the low-to-mid-5x range, free cash flow being
consistently and materially positive, and industry fundamentals to
be positive. Given current industry fundamentals, TD/EBITDA
closer to 4.5x and FCF/Debt in excess of 5% would be required.
What Could Change the Rating -- Down
Downward pressure on the rating could occur if the company is
unable to consistently generate positive free cash flow.
Additionally, TD/EBITDA leverage above 6x would pressure the
rating.
Corporate Profile
Cinemark Holdings, Inc., which owns (indirectly) Cinemark USA,
Inc., is headquartered in Plano, Texas, is the United States'
third largest motion picture exhibitor with 293 theaters and 3,832
screens in 39 states, and internationally (in 13 countries),
mainly in Mexico, South and Central America, with a further 137
theaters and 1,113 screens. Moody's maintains its ratings in the
name of Cinemark; financial analysis and credit metrics are based
on its ultimate parent, Cinemark Holdings, Inc.'s financial
statements.
CKE RESTAURANT: Moody's Affirms 'B2' Corporate Family Rating
------------------------------------------------------------
Moody's Investors Service affirmed CKE Restaurant, Inc's debt
ratings, including the company's B2 Corporate Family Rating, and
assigned a Caa1 rating to the proposed $175 million PIK Toggle
Notes due 2016 to be issued by its direct parent holding company,
CKE Holdings, Inc. The rating outlook was changed to negative
from stable.
Proceeds from the PIK Notes will be used to fund a distribution to
the equity sponsor, Apollo Management. The Notes will be senior
unsecured obligations of CKE Holdings, and will not be guaranteed
by any entity in the corporate group. Interest on the notes is
payable in cash or payment-in-kind at CKE Holdings' option.
Moody's took these rating actions for CKE Holdings, Inc.:
-- $175 million senior unsecured PIK Toggle Notes due 2016
assigned at Caa1 (LGD6, 91%).
Moody's took these rating actions for CKE Restaurants, Inc.:
-- Corporate Family Rating affirmed at B2;
-- Probability of Default Rating affirmed at B2;
-- $100 million 1st lien senior secured revolver due 2015
affirmed at Ba2 (LGD1, 2%) from (LGD1, 4%);
-- $600 million 2nd lien senior secured notes due 2018 affirmed
at B2 (LGD3, 44%) from (LGD3, 49%);
-- Speculative Grade Liquidity Ratings affirmed at SGL-2
The ratings outlook is negative
Ratings Rationale
The outlook change to negative reflects the increased risk profile
due to higher enterprise-wide debt levels, as well as management's
shift to a more aggressive financial strategy at a time when the
business recovery has not yet gained full traction and may still
be somewhat fragile. Using preliminary results for the fiscal
year ended January 31, 2011, Moody's estimates that pro forma
leverage will exceed 6.5 times with only a moderate level of
improvement expected over the intermediate term.
CKE Holdings' B2 Corporate Family Rating reflects the company's
weak pro forma debt protection metrics and Moody's expectation
that the company's operating performance, particularly its Carl's
Jr. segment, will continue to be adversely impacted by
historically high unemployment within its target demographic and
ongoing intense competition. The rating also reflects CKE's
reasonable scale, multiple concepts which add diversity,
diversified day part which boosts returns on invested capital, and
good liquidity.
The B2 rating on the company's 2nd lien senior secured notes
reflects a one-notch differential from the B1 rating indicated by
Moody's Loss Given Default methodology. Given the negative
ratings outlook, the actual B2 rating reflects Moody's concern for
a near term ratings reversal should operating performance and
metrics not improve. In addition, the proposed notes would result
in an unfavorable debt maturity profile for holders of CKE
Restaurants' $600 million 2nd lien notes due 2018, as the proposed
notes will mature in 2016 (approximately two years ahead of the
2018 notes).
Factors that could result in a downgrade include a material
increase in debt levels beyond what is expected as part of the
proposed transaction, or should debt protection metrics fail to
show improvement over the next year. Specific metrics include
debt to EBITDA remaining above 6.5 times or EBITA coverage of
interest sustained below 1.1 times. The ratings could also be
downgraded in the event liquidity were to deteriorate materially.
While unlikely in the near term, factors that could result in an
upgrade include a sustained pattern of positive same store sales
growth and moderating debt levels resulting in leverage of about
4.5 times and EBITA coverage of interest approaching 2.0 times. A
higher rating would also require ample liquidity that includes
reasonable availability under its revolving credit facility.
Following the completion of the transaction, the Corporate Family,
Probability of Default and Speculative Grade Liquidity Ratings
will be moved to CKE Holdings from CKE Restaurants, Inc.
CKE Restaurants, Inc. owns, operates, and franchises,
approximately 3,159 quick-service restaurants under the brand
names Carl's Jr. and Hardee's. Annual revenues are approximately
$1.3 billion.
CLAYTON WILLIAMS: Moody's Gives Positive Outlook, Affirms B3 CFR
----------------------------------------------------------------
Moody's Investors Service changed Clayton Williams Energy, Inc.'s
outlook to positive from negative. At the same time, Moody's
assigned a Caa1 rating to CWEI's proposed $300 million senior
unsecured notes and affirmed CWEI's B3 Corporate Family Rating and
SGL-3 Speculative Grade Liquidity rating.
Proceeds from the notes offering will be used to fund a tender
offer for CWEI's existing $225 million senior unsecured notes due
2013 and repay revolver drawings.
Ratings Rationale
The positive outlook reflects the favorable oil price outlook,
CWEI's shift to a lower risk development strategy and assumes that
the company is able to continue to grow production and reserves
relative to expected increased debt levels. The ratings could be
upgraded if CWEI is successful in continuing to grow production
and reserves at competitive costs while maintaining sufficiently
conservative financial leverage (production in the 18 Mboe/d range
and debt/production in the $30,000/boe range and trending lower).
CWEI's B3 Corporate Family Rating reflects the company's oil
weighted production and reserves, high level of operating control
of its property base, and a capital budget that is primarily
focused on developmental drilling in order to increase its oil
production. The rating also reflects the company's seasoned
management team, which has operated through numerous sector
cycles.
The B3 Corporate Family Rating is restrained by the company's
small scale as measured by production and reserves, projected
rising costs and the high costs associated with its property base,
and the expectation that debt will increase in 2011 as the company
outspends cash flows.
Over the last couple of years, the company has transitioned from
spending a large part of its capital budget on high-impact
exploration natural gas wells to spending on relatively lower risk
oil development drilling, primarily in the Permian Basin and to a
lesser extent the Giddings Area. Moody's view this transition as
credit positive, as CWEI's prior focus involved substantially more
risk and a higher level of capital intensity per well,
particularly relative to its small size and leveraged balance
sheet. Moreover, limited success and weakness in commodity prices
resulted in a number of years of weak capital productivity and
declining reserves.
In 2010, CWEI was successful in reversing declining reserve trends
and was able to achieve pro forma growth in both production and
reserves at competitive costs. However, with the upcoming
expiration of its fixed price service contracts (expiring in mid-
2011) and generally rising service costs, Moody's expect CWEI's
cost structure will rise in 2011. Additionally, spending to
develop proved undeveloped reserves will also pressure costs.
However, even with rising costs, given expected high oil price
realizations, Moody's expect CWEI will generate sound returns in
2011.
CWEI's pro forma leverage (as adjusted for operating leases)
based on debt/PD reserves and debt/production was approximately
$11.70/boe and $26,900/boe, respectively, at year-end 2010, which
are indicative of the Caa and B rating categories. While Moody's
expect that CWEI will grow production and reserves in 2011,
Moody's also expect that debt levels will increase due to a 31%
increase in capital spending levels in 2011. Even with the
benefit of rising production and strong oil prices, Moody's
expects cash flow from operations to fall $80 to $100 million
short of its capital expenditures. The company anticipates
drawing under its revolver to fund the shortfall.
If CWEI is unable to generate significant production gains and
reserves additions from its capital spending, if leverage on
production increases above $40,000/boe, or as a result of
diminished liquidity, its ratings and/or outlook could come under
pressure.
The Caa1 rating on the proposed notes reflects both the overall
probability of default of CWEI, to which Moody's assigns a
Probability of Default of B3, and a loss given default of LGD 5
(76%). The new senior unsecured notes are rated Caa1, one notch
below the B3 Corporate Family Rating, reflecting the contractual
subordination of the notes relative to the company's secured bank
credit facility. The bank credit facility is secured with
substantially all of CWEI's oil and gas properties. Both the
credit facility and senior unsecured notes are guaranteed by all
of CWEI's wholly owned subsidiaries.
Clayton Williams Energy, Inc., is an independent oil and gas
exploration and production company headquartered in Midland,
Texas.
CLAYTON WILLIAMS: S&P Assigns 'B' Ratings to $300 Mil. Notes
------------------------------------------------------------
Standard & Poor's Ratings Services assigned issue-level and
recovery ratings to Clayton Williams Energy Inc.'s proposed
$300 million senior unsecured notes due 2019. The issue-level
rating is 'B' (the same as the corporate credit rating). The
recovery rating on this debt is '4', indicating S&P's expectation
of average (30%-50%) recovery in the event of a payment default.
"S&P's recovery analysis incorporates Clayton Williams Energy's
plans to use the proceeds from the proposed notes offering to
tender for its $225 million 7.75% senior unsecured notes and to
repay part of its outstanding balances under its secured revolving
credit facility," said Standard & Poor's credit analyst Patrick
Lee.
Please see the updated recovery report to be published on
RatingsDirect following the release of this report. Midland,
Tex.-based Clayton Williams Energy is an oil and gas company
engaged in the exploration and production of crude oil and natural
gas. S&P's corporate credit rating on Clayton Williams Energy is
'B', and the outlook is stable. The ratings reflect the company's
small reserve base, historically aggressive exploration strategy,
weak reserve replacement, and relatively high cost structure. The
ratings also incorporate the company's renewed focus on its
Permian oil assets, improved crude oil prices, and substantial
hedging of 2011 natural gas production.
Ratings List
Clayton Williams Energy Inc.
Corporate Credit Rating B/Stable/--
New Rating
Clayton Williams Energy Inc.
Senior Unsecured B
Recovery Rating 4
CLUB VENTURES: Court Extends Schedules Deadline Until April 1
-------------------------------------------------------------
The Hon. Allan L. Gropper of the U.S. Bankruptcy Court for the
Southern District of New York has extended, at the behest of Club
Ventures Investments LLC, et al., the deadline for the filing of
schedules of assets and liabilities and statements of financial
affairs until April 1, 2011.
The deadline to file the schedules was initially March 16, 2011.
The Debtors asked that the deadline be moved by 30 days saying,
"Given the number of Debtors, the size and complexity of the
Debtors' operations and the critical matters that the Debtors'
management, accounting staff and legal personnel must address in
the initial days of these Chapter 11 Cases, the Debtors believe
that an extension of time to file the Schedules is necessary and
that sufficient cause for an extension exists." To prepare their
schedules, the Debtors must compile information from the Debtors'
books, records and other documents relating to over 250 creditors,
over 40 leases and contracts, and assets of 18 separate Debtor
entities.
About Club Ventures
New York-based Club Ventures Investments LLC, aka DavidBartonGym,
is a boutique gym company. Club Ventures owns DavidBartonGym, an
operator of upscale health clubs in four cities. Founded in 1992
by David Barton, DavidBartonGym has grown to operate health clubs
in New York, Miami, Chicago, and Seattle (Bellevue).
Club Ventures filed for Chapter 11 bankruptcy protection (Bankr.
S.D.N.Y. Case No. 11-10891) on March 2, 2011. It estimated its
assets at $10 million to $50 million and debts at $50 million to
$100 million.
Affiliates Club Ventures II, LLC (Bankr. S.D.N.Y. Case No. 11-
10892), et al., filed separate Chapter 11 petitions.
David B. Shemano, Esq., at Peitzman, Weg & Kempinsky LLP, serves
as the Debtors' bankruptcy counsel.
The Debtors' cases are jointly administered. Club Ventures
Investments LLC is the lead case.
CLUB VENTURES: Has Interim Nod to Obtain DIP Financing From LNB
---------------------------------------------------------------
Club Ventures Investments LLC, et al., sought and obtained interim
authorization from the Hon. Allan L. Gropper of the U.S.
Bankruptcy Court for the Southern District of New York to obtain
junior secured superpriority postpetition financing from LNB
Holding LLC.
David B. Shemano, Esq., at Peitzman, Weg & Kempinsky LLP,
explained that the Debtors need the money to fund their Chapter 11
case, pay suppliers and other parties.
The DIP Lender has committed to provide up to $800,000. The DIP
Facility will mature five months after the Petition Date. A copy
of the DIP financing agreement is available for free at:
http://bankrupt.com/misc/CLUB_VENTURES_dipfinancingpact.pdf
The DIP facility will incur interest at the Applicable Federal
Rate. In the event of default, the Debtors will pay an additional
2.0% default interest per annum. Applicable Federal Rate will
mean, with respect to any month, the interest rate in effect for
the month which would avoid imputation of interest or other items
under Section 7872 of the Internal Revenue Code of 1986, as
amended from time to time.
The DIP Lender is granted automatically perfected, valid and
enforceable junior security interests in and liens on all of the
DIP collateral, including all property constituting cash
collateral. The DIP Lender is granted allowed superpriority
administrative expense claims in the cases for the DIP Facility
and all obligations owing thereunder and under the DIP Documents,
including all indemnification obligations of the Debtors
thereunder. The DIP Superpriority Claim will be subordinate only
to the carve-out and the adequate protection claims granted to
Bank of America, N.A.
The DIP lien is subject to an up to 50,000 carve-out for U.S.
Trustee and Clerk of court fees; fees payable to professional
employed in the Debtors' case; and fees of the committee in
pursuing actions challenging the DIP Lenders' lien.
Each of the DIP Lender and the prepetition lenders will have the
right to credit bid with respect to any sale of assets or equity.
Cash Collateral Use
The Debtors are also allowed, on an interim basis, to use cash
collateral of prepetition secured lenders until May 22, 2011.
Currently, the Debtors are indebted to: (a) Bank of America,
N.A., in the approximate amount of $11,115,000, which indebtedness
is secured by substantially all of the Debtors' assets, (b)
Praesidian Capital Investors, LP, Praesidian II SPV 1 LP and
Praesidian II SPV 2, LP, in the approximate amount of
$30.6 million, which indebtedness is secured by substantially all
of the Debtors' assets, and (c) LNB in the approximate amount of
$22.4 million, which indebtedness is secured by substantially all
of the Debtors' assets. All of the Debtors' existing cash, and
all of the Debtors' forecasted cash receipts, are the cash
collateral of the Prepetition Secured Creditors and cannot be used
without the consent of the Prepetition Secured Creditors or court
order. Each of the Prepetition Lenders consents to the Debtors'
use of the Prepetition Lenders' cash collateral and the priming of
the Prepetition Liens to the extent and solely on the terms and
conditions provided for in the interim court order.
As adequate protection of the interests of the Prepetition Lenders
in the Prepetition Collateral against any diminution in value of
the interests, the Prepetition Lenders are granted continuing
valid, binding, enforceable, non-avoidable and automatically
perfected postpetition security interests in and liens on the DIP
collateral.
As further adequate protection, the Prepetition Lenders are each
granted allowed superpriority administrative expense claim in the
bankruptcy cases.
As further adequate protection, the Debtors will provide adequate
protection to (i) the Prepetition Lenders in the form of ongoing
payment of the reasonable legal fees and expenses incurred after
the Petition Date, and (ii) BofA in the form of payment of accrued
interest at the rate provided for in and pursuant to the terms of
the BofA Note and the BofA Loan Agreement.
Hearing
The Court has set a final hearing for March 24, 2011, at
11:00 a.m. (Eastern Time), on the Debtors' request to obtain DIP
financing and use cash collateral.
About Club Ventures
New York-based Club Ventures Investments LLC, aka DavidBartonGym,
is a boutique gym company. Club Ventures owns DavidBartonGym, an
operator of upscale health clubs in four cities. Founded in 1992
by David Barton, DavidBartonGym has grown to operate health clubs
in New York, Miami, Chicago, and Seattle (Bellevue).
Club Ventures filed for Chapter 11 bankruptcy protection (Bankr.
S.D.N.Y. Case No. 11-10891) on March 2, 2011. It estimated its
assets at $10 million to $50 million and debts at $50 million to
$100 million.
Affiliates Club Ventures II, LLC (Bankr. S.D.N.Y. Case No. 11-
10892), et al., filed separate Chapter 11 petitions.
David B. Shemano, Esq., at Peitzman, Weg & Kempinsky LLP, serves
as the Debtors' bankruptcy counsel.
The Debtors' cases are jointly administered. Club Ventures
Investments LLC is the lead case.
COLUMBIA RIM: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Columbia Rim Construction, Inc.
13023 NE Hwy 99, Suite 7
Vancouver, WA 98686
Bankruptcy Case No.: 11-41720
Chapter 11 Petition Date: March 7, 2011
Court: U.S. Bankruptcy Court
Western District of Washington (Tacoma)
Judge: Paul B. Snyder
Debtor's Counsel: John D. Nellor, Esq.
NELLOR RETSINAS CRAWFORD PLLC
1201 Main Street
P.O. Box 61918
Vancouver, WA 98666
Tel: (360) 695-8181
E-mail: jd@nellorlaw.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A list of the Company's 20 largest unsecured creditors
filed together with the petition is available for free
at http://bankrupt.com/misc/wawb11-41720.pdf
The petition was signed by Michael J. DeFrees, president.
COMPOSITE TECHNOLOGY: Five Directors Elected at Meeting
-------------------------------------------------------
On March 1, 2011, Composite Technology Corporation held its annual
meeting of stockholders.
At the meeting, directors were elected to serve until the next
annual meeting of stockholders or until their successors are duly
elected and qualified. The voting results were:
Name of Director For Withheld
---------------- ---------- ---------
Benton Wilcoxon 29,654,695 3,201,659
Michael D. McIntosh 31,381,160 1,475,194
D. Dean McCormick 31,153,234 1,703,120
Dennis C. Carey 31,634,104 1,222,250
Michael K. Lee 31,212,185 1,644,169
Stockholders also ratified the selection of SingerLewak LLP as the
Company's independent registered public accounting firm for the
fiscal year ended Sept. 30, 2011.
A full-text copy of the Form 8-K is available for free at:
http://researcharchives.com/t/s?74a4
About Composite Technology
Irvine, Calif.-based Composite Technology Corporation (OTC BB:
CPTC) -- http://www.compositetechcorp.com/-- develops, produces,
markets and sells innovative energy efficient and renewable energy
products for the electrical utility industry. The Company was
incorporated in Florida on February 26, 1980, as El Dorado Gold &
Exploration, Inc., and reincorporated in Nevada on June 27, 2001,
and renamed Composite Technology Corporation.
The Company's balance sheet at Dec. 31, 2010, showed $27.5 million
in total assets, $55.2 million in total liabilities, and a
stockholders' deficit of $27.7 million.
* * *
As reported in the Troubled Company Reporter on December 20, 2010,
SingerLewak LLP, in Irvine, Calif., expressed substantial doubt
about Composite Technology's ability to continue as a going
concern, following the Company's results for the fiscal year ended
Sept. 30, 2010. The independent auditors noted that the
Company has suffered recurring losses from operations.
CORNERSTONE WORLD: May File for Chapter 11 Absent Deal
------------------------------------------------------
As widely reported, Cornerstone World Outreach, owner of a 118-
acre property in Sioux City, Iowa, may seek bankruptcy protection.
The Sioux City Journal reports that Cornerstone's new worship
center will go on the auction block in May as part of a sheriff's
sale to settle a dispute between the Sioux City church and an Ohio
building company.
KTIV.com relates that according to a Cornerstone official, Pastor
Doug Daniels, after the sheriff's sale, the church will have six
to 12 months to come to an agreement with a creditor to keep their
land. If an agreement cannot be reached, they will file for
Chapter 11 bankruptcy, which could potentially save their property
from falling into someone else's hands.
The Sioux City Journal says that a Cornerstone official said
Friday that filing for Chapter 11 bankruptcy protection may still
be an option for the church as it tries to pay a $3.65 million
judgment to Cincinnati United Contractors.
According to the Journal, the builder filed a $4.99 million
mechanic's lien on the church's property in April amid allegations
it was not paid for work it did on the worship center.
Cornerstone dedicated and has used the 52,000-square-foot building
since August 2008. Woodbury County District Court Judge Michael
Walsh ruled in November that Cornerstone had until Dec. 10 to
comply with terms of a confidential settlement it reached with
Cincinnati United in August. When the deadline passed, Judge
Walsh ordered the Sioux City church to pay $3.65 million, plus
interest and costs, as a result of failing to meet the deadline.
On Feb. 1, a designee of Court Clerk Craig Jorgensen signed a
document commanding the county sheriff to "levy without delay"
$3.65 million worth of Cornerstone property, plus interest and
costs, and deliver it to the court in 120 days.
CRC HEALTH: Moody's Assigns 'B1' Rating to $120 Mil. Senior Loan
----------------------------------------------------------------
Moody's Investors Service has assigned a B1 rating to the proposed
$120 million senior secured term loan add-on of CRC Health
Corporation. Proceeds from the issuance are to be used to repay
about $89.6 million of senior secured term loan due 2013 and
$30 million of outstanding senior secured revolving credit
facility due 2012. These ratings have been assigned subject to
Moody's review of final documentation following completion of the
offering. Moody's has also affirmed the B3 Corporate Family and
Probability of Default Ratings and the SGL-3 Speculative Grade
Liquidity Rating. The rating outlook is stable.
These instrument ratings and LGD assessments have been affected:
CRC Health Corp.
Rating assigned:
-- $120 million senior secured term loan due 2015 at B1 (LGD 2,
27%)
Ratings Affirmed/LGD assessments revised:
-- Corporate Family Rating, B3
-- Probability of Default Rating, B3
-- $63 million senior secured revolving credit facility due 2015
B1 (LGD 2, 27%) from (LGD 2, 26%)
-- $37 million senior secured revolving credit facility due
2012, B1 (LGD 2, 27%) from (LGD 2, 26%)
-- $309 million senior secured term loan due 2015, B1 (LGD 2,
27%) from (LGD 2, 26%)
-- $176 million senior subordinated notes due 2016, Caa1 (LGD 5,
75%) from Caa1 (LGD 5, 76%)
-- Speculative Grade Liquidity Rating, SGL-3
Ratings to be withdrawn:
-- $89 million senior secured term loan due 2013, B1 (LGD2, 26%)
Ratings Rationale
CRC's B3 Corporate Family Rating reflects the expectation that the
company will continue to operate with very high leverage and
modest interest expense coverage as operating pressures in the
healthy living division have impeded improvements in credit
metrics. While Moody's acknowledges the progress the company has
made in reducing costs through its restructuring efforts, the
operating difficulty has reduced CRC's revenue base and delayed
anticipated improvements in the credit profile of the company.
The stable outlook reflects Moody's expectation that the company
will continue to benefit in the near term from the reduction of
its cost base but could face continued pressure in growing the top
line until broader economic conditions improve. The outlook also
incorporates Moody's expectation that CRC could have difficulty
improving credit metrics in the near term as EBITDA has remained
relatively flat and free cash flow benefitted from a reduction in
capital spending.
If the company experiences further operational pressures resulting
in additional declines in revenue and EBITDA or higher leverage,
the ratings could be downgraded.
Moody's will be looking for a return to positive growth in revenue
and EBITDA and a reduction in leverage before changing the outlook
to positive or upgrading the ratings.
CRC Health Corporation is a wholly owned subsidiary of CRC Health
Group, Inc. Headquartered in Cupertino, California. CRC's
recovery division provides treatment services to patients
suffering from chronic addiction diseases and related behavioral
disorders. The company also, through its healthy living division,
provides therapeutic educational programs for adolescents and
treatment services for eating disorders and obesity. CRC Health
is owned by private equity sponsor Bain Capital Partners, LLC.
CRC recognized revenue of approximately $443 million for the
twelve months ended Sept. 30, 2010.
CROSS BORDER: David Crews Discloses 8.4% Equity Stake
-----------------------------------------------------
In a Schedule 13G filing with the U.S. Securities and Exchange
Commission, David Crews disclosed that he beneficially owns
1,048,221 shares of common stock of Cross Border Resources, Inc.
representing 8.4% of the shares outstanding. As of Dec. 10, 2010,
Doral Energy Corp. had 135,933,086 shares of common stock
outstanding.
About Cross Border Resources
Cross Border Resources, Inc. f/k/a Doral Energy Corp. (OTC BB:
DRLY) -- http://www.DoralEnergy.com/-- is a licensed oil and gas
operator in the state of New Mexico. The Company is headquartered
in Midland, Texas.
The Company's balance sheet at Oct. 31, 2010, showed $2.77 million
in total assets, $2.81 million in total liabilities, and a
stockholders' deficit of $37,846.
As reported in the Troubled Company Reporter on November 23, 2010,
MaloneBailey, LLP, in Houston, Texas, expressed substantial doubt
about Doral Energy's ability to continue as a going concern
following the Company's results for the fiscal year ended July 31,
2010. The independent auditors noted that the Company has
negative working capital and recurring losses from operations.
CROSS BORDER: Stephen Murchison Discloses 9.0% Equity Stake
-----------------------------------------------------------
In a Schedule 13G filing with the U.S. Securities and Exchange
Commission, Stephen Blake Murchison disclosed that he beneficially
owns 1,120,206 shares of common stock of Cross Border Resources,
Inc. representing 9.0% of the shares outstanding. LBA Capital
Partners, LLC, also owns 843,017, for a 6.8% equity stake. As of
Dec. 10, 2010, Doral Energy Corp. had 135,933,086 shares of common
stock outstanding.
About Cross Border Resources
Cross Border Resources, Inc. f/k/a Doral Energy Corp. (OTC BB:
DRLY) -- http://www.DoralEnergy.com/-- is a licensed oil and gas
operator in the state of New Mexico. The Company is headquartered
in Midland, Texas.
The Company's balance sheet at Oct. 31, 2010, showed $2.77 million
in total assets, $2.81 million in total liabilities, and a
stockholders' deficit of $37,846.
As reported in the Troubled Company Reporter on November 23, 2010,
MaloneBailey, LLP, in Houston, Texas, expressed substantial doubt
about Doral Energy's ability to continue as a going concern
following the Company's results for the fiscal year ended July 31,
2010. The independent auditors noted that the Company has
negative working capital and recurring losses from operations.
CROWN MEDIA: Swings to $7.78-Mil. Profit in 2010
------------------------------------------------
Crown Media Holdings, Inc., filed with the U.S. Securities and
Exchange Commission its annual report on Form 10-K, reporting net
income attributable to common stockholders of $7.78 million on
$287.27 million of total revenue for the year ended Dec. 31, 2010,
compared with a net loss attributable to common stockholders of
$22.59 million on $279.56 million of total revenue during the
prior year. Net loss was $37.22 million in 2008.
In a press release, the Company also reported net income of $29.46
million on $90.66 million of revenue for the three months ended
Dec. 31, 2010, compared with net income of $373,000 on $77.61
million of revenue for the same period during the prior year.
"Our solid quarter of results, with strong holiday seasons on
Hallmark Channel and Hallmark Movie Channel, and continued
development of the Hallmark Channel Home programming block, fueled
advertising revenue gains and increased subscriber license fees,"
noted Bill Abbott, President and CEO of Crown Media. "These
revenue gains and careful cost management have enabled us to
realize our bottom-line financial objectives for both the quarter
and the year."
The Company's consolidated balance sheet at Dec. 31, 2010 showed
$678.53 million in total assets, $630.56 million in total
liabilities, $198.93 million in redeemable preferred stock, and
$150.96 million in total stockholders' deficit. Stockholders'
deficit was $171.1 million at Sept. 30, 2010.
A full-text copy of the annual report on Form 10-K filed with the
Securities and Exchange Commission is available for free at:
http://ResearchArchives.com/t/s?749b
Going Concern
KPMG LLP, in Denver, the Company's independent registered public
accounting firm, rendered a going concern opinion in connection
with the financial statements included in the Company's annual
report on form 10-k for the year ended Dec. 31, 2009. The
independent auditors noted of the Company's significant short-term
debt obligations.
KPMG LLP, however, did not issue a going concern opinion in its
report on the Company's 2010 financial statements.
About Crown Media
Studio City, Calif.-based Crown Media Holdings, Inc. (NASDAQ:
CRWN) -- http://www.hallmarkchannel.com/-- owns and operates
cable television channels dedicated to high quality, broad appeal,
entertainment programming. The Company currently operates and
distributes Hallmark Channel in both high definition (HD) and
standard definition (SD) to 90 million subscribers in the U.S.
Crown Media also operates a second 24-hour linear channel,
Hallmark Movie Channel, available in both HD and SD, which focuses
on family-friendly movies with a mix of classic theatrical films,
presentations from the acclaimed Hallmark Hall of Fame library,
original Hallmark Channel movies and special events.
CROWN MEDIA: Appoints Andrew Rooke as EVP and CFO
-------------------------------------------------
Veteran finance executive, Andrew Rooke, joined Crown Media
Holdings, Inc., as Executive Vice President and Chief Financial
Officer. The announcement was made by Bill Abbott, President and
Chief Executive Officer to whom Mr. Rooke will report.
"Andy brings superior financial experience to Crown Media and we
are beyond delighted to welcome him to the company" said
Mr. Abbott. "By joining Hallmark Channel and Hallmark Movie
Channel at this time of exciting growth and opportunity, Andy's
leadership will play an integral role in driving our business
forward."
The EVP & Chief Financial Officer is responsible for planning,
directing and controlling the financial functions of Crown Media
Holdings, Inc. and its correlating networks -- Hallmark Channel
and Hallmark Movie Channel. This integral leadership position
actively participates in decisions pertaining to strategic
initiatives, operating models and operational execution.
Mr. Rooke will lead the development and execution of Crown Media's
strategic business model, operational plans, projects, programs
and systems. He will act as a liaison with the Crown Media Board
of Directors and subcommittees as well as with key finance
executives of Hallmark Cards, Inc., the company's outside bankers,
financial advisors and shareholders. Mr. Rooke will also oversee
essential business departments that include Information
Technology, Technical Operations and Human
Resources/Administration.
Prior to joining Crown Media, Andy worked in top finance positions
at News Corporation's Twentieth Television, MySpace.com and Fox
Entertainment Group, and Time Warner's Warner Bros.
During his tenure as CFO of Twentieth Television, Rooke led the
finance and operations of its television syndication, production
and advertising businesses. Andy began his career with
distinguished organizations including Deloitte & Touche in Los
Angeles, California and London, England and Cape & Dalgleish CA in
London.
Mr. Rooke received a Bachelor of Science degree in Mathematics
from Durham University in England. Andy resides in San Marino,
California, with his wife and four children.
About Crown Media
Studio City, Calif.-based Crown Media Holdings, Inc. (NASDAQ:
CRWN) -- http://www.hallmarkchannel.com/-- owns and operates
cable television channels dedicated to high quality, broad appeal,
entertainment programming. The Company currently operates and
distributes Hallmark Channel in both high definition (HD) and
standard definition (SD) to 90 million subscribers in the U.S.
Crown Media also operates a second 24-hour linear channel,
Hallmark Movie Channel, available in both HD and SD, which focuses
on family-friendly movies with a mix of classic theatrical films,
presentations from the acclaimed Hallmark Hall of Fame library,
original Hallmark Channel movies and special events.
The Company's consolidated balance sheet at Dec. 31, 2010 showed
$678.53 million in total assets, $630.56 million in total
liabilities, $198.93 million in redeemable preferred stock, and
$150.96 million in total stockholders' deficit. Stockholders'
deficit was $171.1 million at Sept. 30, 2010.
A full-text copy of the annual report on Form 10-K filed with the
Securities and Exchange Commission is available for free at:
http://ResearchArchives.com/t/s?749b
Going Concern
KPMG LLP, in Denver, the Company's independent registered public
accounting firm, rendered a going concern opinion in connection
with the financial statements included in the Company's annual
report on form 10-k for the year ended Dec. 31, 2009. The
independent auditors noted of the Company's significant short-term
debt obligations.
KPMG LLP, however, did not issue a going concern opinion in its
report on the Company's 2010 financial statements.
CTI FOODS: S&P Changes Outlook to Stable, Affirms 'B' Rating
------------------------------------------------------------
Standard & Poor's Ratings Services said that it revised its rating
outlook on Wilder, Idaho-based CTI Foods Holding Co. LLC to stable
from negative. At the same time, S&P affirmed all its ratings on
the company, including the 'B' corporate credit rating.
"The outlook revision reflects CTI's timely completion of
construction of its soup plant, modest improvement in operating
performance, and maintenance of adequate cushion on its financial
covenants," said Standard & Poor's credit analyst Bea Chiem.
The ratings on processed food supplier CTI Foods reflect S&P's
expectation that the company's growth will remain modest over the
next year due to S&P's view of continued weak consumer spending in
the food-prepared-away-from-home industry, and that the company
will remain highly leveraged over the intermediate term.
CTI FOODS: Moody's Changes Outlook to Positive, Affirms B2 Ratings
------------------------------------------------------------------
Moody's Investors Service has changed the rating outlook of CTI
Foods Holding Co., LLC's to positive from stable reflecting its
expectation for continued improvement in operating income and free
cash flow generation over intermediate term. Concurrently, the B2
corporate family rating and the B2 rating on the first lien credit
facility were affirmed. These rating actions incorporate CTI's
plans to refinance its second lien debt with $35 million of
incremental first lien borrowings.
These ratings were affirmed:
-- B2 Corporate family rating;
-- B2 Probability of default rating;
-- B2 (LGD4,55% from LGD3, 45%) on the $40 million first lien
revolver due June 2014;
-- B2 (LGD4,55% from LGD3, 45%) on the $180 million first lien
term loan due June 2015; and
-- Caa1 (LGD6, 90%) on the $35 million second lien term loan due
December 2015 (to be withdrawn upon completion of its
proposed refinancing).
The ratings on the $35 million of incremental first lien term loan
is subject to review of final documentation.
The change in outlook to positive reflects the expectation for
continued revenue growth, driven in large part by its soups
business, and the stability of CTI's operating margins despite
increasing commodity pressures. CTI's ability to pass through
increases to the price of beef and chicken to its customers and
reduced growth capital spending requirements is expected to
support solid cash generation in 2011 which will likely lead to
debt reduction and improving credit metrics.
The B2 corporate family rating continues to reflect CTI's
meaningful leverage, 4.3x on an adjusted basis at December 31,
2010 (including 25% of preferred stock in adjusted debt), high
customer and geographic concentration, and modest size. These
factors are mitigated to some extent by CTI's good liquidity
profile, consistent margin performance and longstanding customer
relationships.
Moody's would consider an upgrade over the next 12 to 18 months
following CTI's execution of plans to reduce debt and lower
leverage below 4.0x on an adjusted basis. While customer
concentration is viewed as a constraint on ratings, conservative
financial policies and a solid liquidity profile could mitigate
this risk at the B1 rating. Ratings momentum would likely cease
if CTI were to deviate from plans to repay debt or were to engage
in shareholder friendly activities. Debt-to-EBITDA maintained
above 4.5x would likely result in a ratings stabilization at B2.
The last rating action was the change in outlook to stable from
negative on March 4, 2010.
Headquartered in Wilder, Idaho, CTI Foods Holding Co., LLC,
manufactures food products primarily for the quick service
restaurant industry.
DBSI INC: Bankruptcy Court Confirms Florissant Market Plan
----------------------------------------------------------
The Hon. Peter J. Walsh of the U.S. Bankruptcy Court for the
District of Delaware confirmed the Plan of Reorganization dated
Feb. 8, 2011, proposed by the trustee for Florissant Market Place
Acquisition LLC, an affiliate of DBSI Inc.
Florissant Market Place owns a real property, improvements, and
fixtures commonly known as Florissant Marketplace, 8182 and 8200
N. Lindbergh Blvd., Florissant, Missouri. The Debtor is obligated
to Wells Fargo, N.A., as successor-in-interest to Wachovia
Financial Services, for a loan in the original amount of $11.8
million, used to acquire the property. After entry of the loan
agreement, the Debtor sold undivided tenant-in-common interests,
aggregating approximately 24.6% of the undivided interests in the
Property, to certain unrelated special purpose entities. The
lender did not execute any agreements by which each TIC Investor
assumes its pro rata share of the term loan and by which the
Debtor is released from a portion of the term loan corresponding
to the shares assumed by such TIC Investor.
The Chapter 11 Plan
The Plan is a consensual plan between the Debtor and Wells Fargo
that provides for the satisfaction of Claims against and Interests
in the Debtor through a restructuring of the Debtor's prepetition
loan obligations.
The Plan provides that the Reorganized Debtor and the TIC
Investors will continue to own their respective interests in the
Property and will continue to engage a property manager to operate
the Property, with the long-term objective of marketing and
selling the Property in an orderly manner to maximize the return
for both the Debtor's estate and for the TIC Investors.
The Plan also recognizes that the Lender has a first priority
perfected deed of trust against the entire Property, encumbering
the interests of both the Debtor and the TIC Investors. The Plan
provides that the allowed claim of the Lender will be restructured
and repaid on or before July 1, 2013, based on a 30-year
amortization and a market-based interest rate. The Plan also
provides that the Reorganized Debtor will establish with the
Lender various accounts for operating expenses, taxes, capital
expenditures and other items, to be funded from the cash flow from
the Property. To the extent that monthly cash flow from the
Property exceeds the amount necessary for debt service and the
funding of these reserves, the excess cash flow will be retained
by the Lender as amortizing payments of its restructured loan.
With respect to holders of allowed unsecured claims, the Plan
provides that such holders will receive their pro rata share of
the Reorganized Debtor's interest in the proceeds from the sale of
the Property, after the satisfaction in full of the Lender's
restructured Loan.
Holders of allowed interests will retain their membership
interests in the Debtor but will not receive any payment or
distribution on account of such interests unless and until the
Lender's restructured loan and all Allowed Unsecured Claims have
been paid in full.
The Plan contemplates that it will become effective in stages:
* Upon confirmation and execution of all of the restated loan
documents, the Plan Effective Date will occur and the
Plan will become binding on the Debtor and all parties in
interest.
* Upon the Reorganized Debtor's satisfaction of specific
conditions precedent to the restructuring of the Lender's
Claim (which conditions resemble typical conditions precedent
for closing a real estate loan), then the Restructure
Effective Date will occur and the Lender's loan will be
reinstated upon the terms set forth in the Plan and the
related loan documents.
* If the Reorganized Debtor fails to satisfy the requisite
conditions to restructuring the Lender's loan, then the
Lender may pursue its state law remedies against the Property
or may require the Reorganized Debtor to pursue an auction of
the entire Property. In addition, in the event that the
Reorganized Debtor and TIC Investors have not obtained a
binding contract to sell the Property on or before Jan. 31,
2013 for an amount in excess of the outstanding balance of
the Lender's Loan, then the Reorganized Debtor will initiate
an auction of the Property.
Sale of the Property
In accordance with Article IV, section 4.5 of the Plan, after the
Restructure Effective Date, the Reorganized Debtor will, in
collaboration with the TIC Investors, seek to market and sell the
Property in a commercially reasonable manner by January 31, 2013,
consistent with the objective of maximizing the value of the
Property.
Under Article IV, section 4.5(b) of the Plan, if the Reorganized
Debtor and TIC Investors do not enter into a binding and
unconditional contract to sell their respective interests
in the Property on or before Jan. 31, 2013, such contract being in
form and substance satisfactory to the Lender, or (ii) the
Reorganized Debtor has not entered into a binding and
unconditional contract to sell its undivided interest in the
Property on or before Jan. 31, 2013 for an amount in excess of the
outstanding reinstated loan obligations, such contract being in
form and substance satisfactory to the Lender, and if the
reinstated loan obligations remain outstanding, then the
Reorganized Debtor will initiate an auction of the Property in its
entirety pursuant to 11 U.S.C. Sec. 363(h).
A copy of the Disclosure Statement is available for free at:
http://bankrupt.com/misc/DBSI_Florissant_DS.pdf
About DBSI Inc.
Headquartered in Meridian, Idaho, DBSI Inc. and its affiliates
were engaged in numerous commercial real estate and non-real
estate projects and businesses. On Nov. 10, 2008, and other
subsequent dates, DBSI and 180 of its affiliates filed for
Chapter 11 protection (Bankr. D. Del. Case No. 08-12687). DBSI
estimated assets and debts between $100 million and $500 million
as of the Chapter 11 filing.
Lawyers at Young Conaway Stargatt & Taylor LLP represent the
Debtors as counsel. The Official Committee of Unsecured Creditors
tapped Greenberg Traurig, LLP, as its bankruptcy counsel.
Kurtzman Carson Consultants LLC is the Debtors' notice claims and
balloting agent.
Joshua Hochberg, a former head of the Justice Department fraud
unit, served as an Examiner and called the seller and servicer of
fractional interests in commercial real estate an "elaborate shell
game" that "consistently operated at a loss" in his report
released in October 2009. McKenna Long & Aldridge LLP was counsel
to the Examiner.
On Sept. 11, 2009, the Honorable Peter J. Walsh entered an Order
appointing James R. Zazzali as Chapter 11 trustee for the Debtors'
estates. On Oct. 26, 2010, the trustee of DBSI Inc. won court
confirmation of its Chapter 11 plan of liquidation, paving the way
for it to pay creditors and avoid years of expensive litigation
over its complex web of affiliates. The plan, which was declared
effective Oct. 29, 2010, was jointly proposed by DBSI's unsecured
creditors and the bankruptcy trustee in charge of DBSI and its
170-plus affiliates.
Pursuant to DBSI Inc.'s confirmed Chapter 11 plan, the DBSI Real
Estate Liquidating Trust was established as of the effective date
and certain of the Debtors' assets, including the Debtors'
ownership interest in Florissant Market Place was transferred to
the RE Trust. Conrad Myers was appointed trustee for the RE
Trust.
Mr. Myers is represented by:
Natasha Songonuga, Esq.
GIBBONS P.C.
1000 N. West Street, Suite 1200
Wilmington, DE 19801-1058
Tel: (302) 295-4875
Fax: (302) 295-4876
E-mail: nsongonuga@gibbonslaw.com
- and -
Mark B. Conlan, Esq.
GIBBONS P.C.
One Gateway Center
Newark, NJ 07102-5310
Tel: (973) 596-4500
Fax: (973) 596-0545
E-mail: mconlan@gibbonslaw.com
DEBUT BROADCASTING: Patrick Rodgers Appointed as Auditors
---------------------------------------------------------
The Board of Directors of Debut Broadcasting Corporation, Inc.,
annually considers and recommends to the executive committee, the
selection of independent public accountants. On Aug. 18, 2010,
after an evaluation process of several independent audit firms and
as recommended by Debut's Board of Directors, the executive
committee appointed Patrick Rodgers, CPA, PA as Debut's
independent auditors for the 2010 and 2011 fiscal years, replacing
Unger Silberstein, PLLC.
This action effectively dismisses Unger Silberstein as the
Company's independent auditor for the fiscal year that commenced
on Jan. 1, 2010; however, Unger Silberstein, will continue as the
Company's independent auditor for the fiscal years ended Dec. 31,
2007 through Dec. 31, 2009. The report of Unger Silberstein on
the Company's consolidated financial statements for the year ended
Dec. 31, 2009, did not contain an adverse opinion or a disclaimer
of opinion and was not qualified or modified as to uncertainty,
audit scope, or accounting principles.
For the years ended Dec. 31, 2007 and 2008, and 2009 and through
the date of this Form 8-K, there have been no disagreements with
Unger Silberstein on any matter of accounting principles or
practices, financial statement disclosure or auditing scope or
procedure, which disagreements if not resolved to Unger
Silberstein's satisfaction would have caused them to make
reference to the subject matter of the disagreement in connection
with their reports. For the years ended Dec. 31, 2007, 2008,
2009 and through the date of this Form 8-K, there were no
"reportable events" as that term is described in Item 304(a)(1)(v)
of Regulation S-K.
During the years ended Dec. 31, 2007, 2008, and 2009 and through
Nov. 1, 2010, the Company did not consult PRCPA with respect to
the application of accounting principles to a specified
transaction, either completed or proposed, or the type of audit
opinion that might be rendered on the Company's Consolidated
Financial Statements, or any other matters or reportable events as
defined in Item 304(a)(2)(i) and (ii) of Regulation S-K.
About Debut Broadcasting
Debut Broadcasting Corporation, Inc. (OTC BB: DBTB) --
http://www.debutbroadcasting.com/-- is a radio broadcasting and
syndication company that produces and distributes syndicated radio
programming to radio stations in the United States and Canada.
The company maintains radio syndication in Nashville, Tenn., and
produces and distributes 15 radio programs, which are broadcasted
over approximately 1,400 radio station affiliates. It owns and
operates five broadcast radio stations, which include WIQQ FM
102.3 MHz in Leland, WBAQ FM 97.9 MHz and WNIX AM 1330 kHz in
Greenville, and WNLA FM 105.5 MHz and WNLA AM 1380 kHz in
Indianola, Miss. The company is based in Nashville, Tenn.
The Company's balance sheet at Sept. 30, 2010, showed $4,646,466
in total assets, $4,816,281 in total liabilities, and a $169,816
stockholders' deficit.
According to the Form 10-Q for the quarter ended Sept. 30, 2010,
the continuation of Debut Broadcasting as a going concern is
dependent upon the continued financial support from its
shareholders, the ability of Debut Broadcasting to obtain
necessary equity financing to continue operations, and the
attainment of profitable operations. As of Sept. 30, 2010, Debut
has accumulated losses since inception. "These factors raise
substantial doubt regarding Debut Broadcasting's ability to
continue as a going concern."
DJSP ENTERPRISES: Primary Customer to Cease Practice
----------------------------------------------------
DJSP Enterprises, Inc.'s primary customer, the Law Offices of
David J. Stern, P.A., has announced that it will be ceasing the
practice of law with respect to all pending foreclosure matters in
the State of Florida as of March 31, 2011. As a result, the
Company does not expect to receive any further file referrals from
this customer.
About DJSP Enterprises
Based in Plantation, Florida, DJSP Enterprises, Inc. (Nasdaq:
DJSP, DJSPW, DJSPU) provides a wide range of processing services
in connection with mortgages, mortgage defaults, title searches
and abstracts, REO (bank-owned) properties, loan modifications,
title insurance, loss mitigation, bankruptcy, related litigation
and other services. Its principal customer is The Law Offices of
David J. Stern, P.A. It has additional operations in Louisville,
Kentucky and San Juan, Puerto Rico. Its U.S. operations are
supported by a scalable, low-cost back office operation in Manila,
the Philippines, that provides data entry and document preparation
support for its U.S. operations.
As reported in the Jan. 20, 2011 edition of the TCR, DAL Group,
LLC, a subsidiary of DJSP Enterprises, has obtained waivers on
notes held by these parties for payments due through April 1,
2011:
Amount of Note
--------------
Law Offices of David J. Stern, P.A. $47,869,000
Chardan Capital, LLC, $1,000,000
Chardan Capital Markets, LLC $250,000
Kerry S. Propper $1,500,000
The waivers were sought by DAL as it develops and implements plans
to restructure its ongoing operations to reflect its significantly
reduced revenues and operations and the other changes.
DAL did not make the interest payments due Jan. 3, 2011 for (i)
unsecured term notes in the aggregate principal amount of
$1,600,000 (ii) and a $500,000 term note issued by Cornix
Management, LLC. DAL is seeking waivers from the holders of the
unsecured notes and Cornix of principal and interest payments
otherwise due under these notes, and the default interest rates
under these notes, through April 1, 2011.
DAL has entered into a forbearance agreement with BA Note
Acquisition, LLC, pursuant to which BNA has agreed to forbear from
taking action on a $5.5-million line of credit until March 9,
2011.
DUNE ENERGY: Widens Losses to $75.53 Million in 2010
----------------------------------------------------
Dune Energy, Inc., reported a net loss of $75.53 million on $64.18
million of revenue for the year ended Dec. 31, 2010, compared with
a net loss of $59.13 million on $52.24 million of revenue during
the prior year.
The Company's balance sheet at Dec. 31, 2010 showed $297.38
million in total assets, $371.68 million in total liabilities,
$202.95 million in commitments and contingencies, and a $277.25
million stockholders' deficit.
A full-text copy of the annual report on Form 10-K filed with the
U.S. Securities and Exchange Commission is available for free at:
http://ResearchArchives.com/t/s?749d
About Dune Energy
Dune Energy, Inc. (NYSE AMEX: DNE) -- http://www.duneenergy.com/
-- is an independent energy company based in Houston, Texas.
Since May 2004, the Company has been engaged in the exploration,
development, acquisition and exploitation of natural gas and crude
oil properties, with interests along the Louisiana/Texas Gulf
Coast. The Company's properties cover over 90,000 gross acres
across 27 producing oil and natural gas fields.
The Company's balance sheet at Sept. 30, 2010, showed
$296.72 million in total assets, $343.46 million in total
liabilities, and a stockholders' deficit of $248.48 million.
* * *
Dune Energy carries a 'CCC-' corporate credit rating, with
negative outlook, from Standard & Poor's, and 'Ca' corporate
family and probability of default ratings, with negative outlook,
from Moody's Investors Service.
S&P said in April 2010 that "the company's heavy debt burden makes
the prospects of a distressed exchange or bankruptcy a distinct
possibility."
DYNAMIC BUILDERS: Wins Nod to Sell Olympic Blvd. Property
---------------------------------------------------------
Dynamic Builders Inc. won approval from the U.S. Bankruptcy Court
for the Central District of California to sell its interest in
commercial real property located at E. Olympic Boulevard, Los
Angeles to Falcon California Investment Group, Inc., or its
assignee, subject to overbidding.
Falcon California has offered to pay $4,000,000 for the property
and has made a $100,000 deposit.
The sale to the buyer was subject to higher and better offers.
Initial minimum overbids were required to exceed Falcon's offer by
$100,000. Bids were due two days prior to the March 2 hearing on
the sale.
The Debtor intends to pay, in full, from the proceeds of the sale
the $2,650,000 claim of City National Bank, which is the sole
creditor with a lien on the property.
The Debtor als sought to pay commission -- at the rate of 2.5% oaf
the gross sales price -- to the real estate broker, Magnum
Properties.
About Dynamic Builders Inc.
Dynamic Builders Inc. is a Los Angeles-based real estate
developer. Founded in 1964 by L. Ramon Bonin, Dynamic Builders is
principally involved in the construction of build to suit
commercial/industrial buildings in the Los Angeles area.
Dynamic Builders owns properties in Los Angeles, Carson, San
Leandro, and Commerce, California, with total value of
$130,790,612. Secured lenders who financed the acquisition of the
properties are owed a total of $113,181,128.
L. Ramon Bonin and Patty A. Bonin, the shareholders of the Company
and guarantors of the institutional debt, sought Chapter 11
protection Bankr. C.D. Calif. Case No. 10-14067) on March 31,
2011. James C. Bastian, Jr., Esq., at Shulman Hodges & Bastian
LLP, represent the Bonins in their Chapter 11 case.
The Company filed for Chapter 11 bankruptcy protection on
March 31, 2010 (Bankr. C.D. Calif. Case No. 10-14151). The
Company estimated its assets and debts at $100 million to $500
million as of the Chapter 11 filing. It identified Comerica Bank,
with a claim of $29.6 million, as the largest unsecured creditor.
The Company is represented by:
Todd C. Ringstad, Esq.
Nanette D. Sanders, Esq.
Christopher Minier, Esq.
RINGSTAD & SANDERS
2030 Main Street Suite 1200
Irvine, CA 92714
Tel: (949) 851-7450
E-mail: todd@ringstadlaw.com
becky@ringstadlaw.com
DYNEGY INC: Posts $234MM Loss in 2010; E&Y Has Going Concern Doubt
------------------------------------------------------------------
Dynegy Inc. filed on March 7, 2011, its annual report on Form 10-K
for the fiscal year ended Dec. 31, 2010.
Ernst & Young LLP, in Houston, said that Dynegy projects that it
is likely that it will not be able to comply with certain debt
covenants throughout 2011. "This condition and its impact on
Dynegy Inc.'s liquidity raises substantial doubt about Dynegy
Inc.'s ability to continue as a going concern."
The Company reported a net loss of $234 million on $2.323 billion
of revenues for 2010, compared with a net loss of $1.262 billion
on $2.468 billion of revenues for 2009.
Operating loss for Dynegy was $11 million for the year ended
Dec. 31, 2010, compared to an operating loss of $834 million for
the year ended Dec. 31, 2009.
Operating loss for the year ended Dec. 31, 2010, includes a pre-
tax asset impairment of $134 million related to the Company's
Casco Bay power generating facility and related assets and
$2 million related to the asset impairment of the Company's
Roseton and Danskammer power generation facilities. Operating
loss for the year ended Dec. 31, 2009, was driven, in large part,
by $538 million of asset impairments, a $433 million impairment of
goodwill and a $124 million fourth quarter 2009 loss on the
closing of the LS Power Transactions.
The Company's balance sheet at Dec. 31, 2010, showed
$10.013 billion in total assets, $7.267 billion in total
liabilities, and stockholders' equity of $2.746 billion.
A full-text copy of the Form 10-K is available for free at:
http://researcharchives.com/t/s?74a6
Houston, Texas-based Dynegy Inc. (NYSE: DYN)
-- http://www.dynegy.com/-- through its subsidiaries, produces
and sells electric energy, capacity and ancillary services in key
U.S. markets. The power generation portfolio consists of
approximately 11,800 megawatts of baseload, intermediate and
peaking power plants fueled by a mix of natural gas, coal and fuel
oil.
E-BRANDS RESTAURANTS: Tavistock Group Acquires Business
-------------------------------------------------------
Tavistock Group announced that it has acquired a multi-concept
restaurant company that operates Timpano Chophouse and Martini
Bar, AquaKnox and Taqueria Canonita.
"We continue to look for undervalued assets across the U.S. that
can benefit from Tavistock Group's resources and reach," said
Barry Goff, managing director of diversified acquisitions for
Tavistock Group. "We believe we can drive significant value and
results from these restaurants and locations."
Timpano, an Italian chophouse concept serving dry aged steaks,
chops and veal in an elegant supper club atmosphere, has four
locations in Orlando, Ft. Lauderdale and Tampa, Fla. and
Rockville, Md.
AquaKnox is an elegant, yet casual seafood restaurant that
operates in The Venetian Casino, Hotel & Resort in Las Vegas.
Taqueria Canonita and Canonita Express are also located within The
Venetian. Both offer authentic Mexican fare served in a casual
ambience.
"Timpano, AquaKnox and Taqueria Canonita are tremendous concepts
with highly valued guests," said Bryan Lockwood, president of
Tavistock Restaurants, the restaurant division of Tavistock Group
that will manage the E-Brands concepts. "We look forward to
building upon E-Brands' reputation for exceptional service without
interruption."
About E-Brands Restaurants
Based in Orlando, Florida, E-Brands Restaurants LLC fka E-Brands
Acquisition LLC filed for Chapter 11 bankruptcy protection on July
30, 2010 (Bankr. M.D. Fla. Case No. 10-18282). Judge K. Rodney
May presides the case. Richard C. Prosser, Esq., at Stichter,
Riedel, Blain & Prosser PA represents the Debtor. In its petition
the Debtor estimated Assets of between $500,000 and $1 million,
and debts of between $10 million and $50 million.
ENERGY FUTURE: WSJ Says Default Allegation Rattled Bond Market
--------------------------------------------------------------
The Wall Street Journal's Matt Wirz and Gregory Zuckerman report
that Aurelius Capital Management LP's allegations of a default by
Energy Future Holdings Corp., the Texas power producer formerly
known as TXU Corp., roiled credit markets last week and
intensified scrutiny by investors of the $45 billion deal.
According to the Journal, even owners Kohlberg Kravis Roberts &
Co. and TPG acknowledge the deal has become an albatross. KKR
already has written down the $8 billion equity investment by 80%.
The Journal relates EFH's unsecured bonds tumbled 13% to about 55
cents on the dollar last week, while the price of one-year credit-
default protection tripled. That, the Journal says, reflects
increasing market fears that EFH could default on its debts,
dashing the private-equity firms' hopes to hang on until a
recovery in natural-gas prices.
The Journal relates the bond losses have implications for almost
every high-yield bond fund in the country, as TXU's unsecured
bonds make up about 1% of the overall market and are the ninth-
largest out of more than 1,000 credits in the Merrill Lynch high-
yield bond index. The bonds stand to be wiped out in a potential
restructuring and retain value largely because of the interest
that holders expect to collect before debts are reworked.
According to the Journal, Paul Keglevic, EFH's chief financial
officer, said the Company isn't insolvent and isn't considering a
restructuring, but said leverage is onerous.
Four years ago, KKR and TPG led the purchase of TXU, paying 25%
above its trading price. Natural-gas prices subsequently plunged,
as did the rates the company could charge electricity customers.
The Journal says, before the buyout, that wouldn't have been a
problem. TXU had only $11 billion of debt. Now, it has
$36 billion, $22.5 billion of which matures by 2014. The biggest
leveraged buyout of all time has boiled down to an expensive bet
on the price of a commodity.
The Journal notes natural gas has fallen 43% since TXU's buyout,
and settled at $3.927 a million British thermal units on Monday.
Analysts don't predict a meaningful rebound in prices for at least
two years. According to the Journal, TXU needs natural gas
between $7 and $8 a million British thermal units just to generate
enough earnings to cover its secured loans, which start maturing
in October 2013. With so much new natural gas on the market,
largely collected from shale-gas deposits across the U.S., most
analysts expect prices to stagnate. And if prices stay below
$7.50, refinancing will be nearly impossible, said Chris Taylor,
an energy strategist at FBR Capital Markets, according to the
Journal.
The Journal notes that until recently, the price of TXU bonds and
credit-default swaps reflected expectations that the day of
reckoning wouldn't come until late 2013. But, the Journal
relates, Aurelius' default notice, which accuses EFH's key unit of
defaulting on terms of its $20 billion loan, forced investors to
re-examine whether the day of reckoning might come sooner. The
Troubled Company Reporter ran a story on the default notice on
March 2.
The Journal relates TXU remains current on all debt payments, and
Aurelius's default allegation rests on an interpretation of
intercompany loans between the company and a subsidiary.
Regardless of whether Aurelius wins the legal argument, the fund
has turned the spotlight on TXU's finances.
According to the Journal, trading activity in TXU credit-default
swaps hit a three-month high in the week before the hedge fund
sent a letter detailing its claims to Citibank, the arranger of
its loans. EFH immediately repudiated the allegations, but swaps
pricing soared after the disclosure, hitting $1.8 million to
protect $10 million of debt for one year, up from $430,000.
A person familiar with the matter told the Journal, Aurelius
bought more than $100 million of the TXU subsidiary's loans in the
weeks before it sent the letter, but it remains unclear whether
the fund bought credit-default swaps as well. The Journal relates
that if Citibank sides with EFH on the issue, Aurelius could try
to force a technical default but would need support from a
majority of loan holders, a high hurdle given their number.
According to the Journal, Jim Hempstead, an analyst at Moody's
Investors Service who has been raising questions about TXU's
viability for years, said even if KKR and TPG fend off Aurelius,
others likely will follow. If lenders believe a restructuring is
inevitable, they have good reason to trigger a restructuring
before EFH raises more debt or runs down its cash balance,
Mr. Hempstead said. The secured loans, which would benefit from a
quicker restructuring, rose to 84 cents on the dollar from
82 cents last week, before the Aurelius move.
About Energy Future
Energy Future Holdings Corp. is a privately held diversified
energy holding company with a portfolio of competitive and
regulated energy businesses in Texas. Oncor, an 80%-owned entity
within the EFH group, is the largest regulated transmission and
distribution utility in Texas. The Company delivers electricity
to roughly three million delivery points in and around Dallas-Fort
Worth.
EFH Corp. was created in October 2007 in a $45 billion leveraged
buyout of Texas power company TXU in a deal led by private-equity
companies Kohlberg Kravis Roberts & Co. and TPG Inc.
* * *
As reported by the Troubled Company Reporter on Aug. 19, 2010,
Fitch Ratings downgraded the Issuer Default Ratings of Energy
Future Holdings Corp. and its subsidiaries Energy Future
Intermediate Holding Company LLC, Texas Competitive Electric
Holdings Company LLC, and Energy Future Competitive Holdings
Company by one notch to 'CCC' from 'B-'.
The downgrades of the IDRs of EFH and its non-ring-fenced
subsidiaries reflect large debt maturities occurring in 2014,
over-leveraged capital structure, cash flow dependence on the
forward natural gas NYMEX curve, which has been consistently
moving down since mid-2008, and the likely outcome of future debt
exchanges and amend-and-extend bank facility negotiations. In
Fitch's view, potential defaults in 2011-2012 are considered more
likely to result from coercive debt exchanges and unlikely to
result from payment defaults.
The TCR on Aug. 19, 2010, also reported that Moody's Investors
Service changed the probability of default rating for Energy
Future Holdings to Caa2/LD from Ca following the completion of a
debt restructuring which Moody's views as a distressed exchange.
EFH's Caa1 CFR and SGL-4 liquidity rating are affirmed. The
rating outlook remains negative.
EFH executed a debt restructuring which involved an exchange of
its 10.875% senior unsecured (guaranteed) notes due 2017 and its
11.25% / 12.00% senior unsecured PIK Toggle (guaranteed) notes due
2017 for new 10.00% senior secured notes due 2020 issued at EFIH,
plus approximately $500 million in cash, plus accrued interest.
These events had the effect of allowing EFH to reduce its overall
net debt by approximately $1.0 billion and extend a portion of its
maturities. The transaction crystallized losses for investors of
approximately 30%. Taken as a whole, Moody's views the
transaction as a distressed exchange and has classified this
transaction as a limited default by appending an LD designation to
the PDR.
The affirmation of EFH's Caa1 CFR considers the very weak
financial profile, untenable capital structure, questionable long-
term business plan and material operating headwinds for the
company. Moody's believes EFH has very little financial
flexibility.
In March 2011, Fitch Ratings it does not expect to take any
immediate rating action on EFH's Texas Competitive Electric
Holdings Company LLC or their affiliates based on recent default
allegations from lender Aurelius. Moody's also said said the
default assertion will not, at this time, affect the ratings or
rating outlooks for EFH or its subsidiaries.
ENERGYCONNECT GROUP: To Merge Into JCI for $32.3-Mil. Cash
----------------------------------------------------------
EnergyConnect Group, Inc., signed a merger agreement for Johnson
Controls, Inc., to acquire EnergyConnect for a total cash
consideration of approximately $32.3 million.
"The terms of the merger agreement represent a great outcome for
our shareholders," said Kevin R. Evans, president and Chief
Executive Officer of EnergyConnect. "The $0.2253 per share
acquisition price represents a significant cash premium of
approximately 73 percent over the previous closing share price on
March 2, 2011. Combining forces with Johnson Controls' extensive
market reach would enable us to provide complete end-to-end demand
response solutions to a significantly expanded customer base."
Under the terms of the definitive agreement, which has been
approved by EnergyConnect's Board of Directors, Johnson Controls
would purchase all of EnergyConnect's outstanding shares for
$0.2253 per share in cash. The Board of Directors recommend
EnergyConnect shareholders vote in favor of the transaction in the
proxy anticipated to be filed in approximately four weeks. The
deal is expected to close in the summer of 2011, subject to the
satisfaction of customary closing conditions.
UBS Investment Bank served as financial advisor and Orrick,
Herrington & Sutcliffe LLP as legal advisor to EnergyConnect.
Godfrey & Kahn, S.C. acted as Johnson Control's legal advisor.
A full-text copy of the Agreement and Plan Merger is available for
free at http://ResearchArchives.com/t/s?74ab
About EnergyConnect Group
Campbell, Calif.-based EnergyConnect Group Inc. (OTC BB: ECNG)
-- http://www.energyconnectinc.com/-- is a provider of demand
response services to the electricity grid. Demand response
programs provide grid operators with additional electricity
generation capacity by encouraging consumers to curtail their
electricity usage.
The Company's balance sheet at July 3, 2010, showed $13.95 million
in total assets, $8.40 million in total current liabilities,
$3.64 million in long-term liabilities, and $1.91 million in
stockholders' equity.
RBSM LLP, in New York, expressed substantial doubt about the
Company's ability to continue as a going concern, following the
Company's results for the year ended Jan. 2, 2010. The
independent auditors noted that the Company is experiencing
difficulty in generating sufficient cash flow to meet its
obligations and sustain its operations.
ENERJEX RESOURCES: CEO Presented at Colorado Research Conference
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EnerJex Resources, Inc.'s Chief Executive Officer Robert Watson,
Jr. presented at the Accredited Members Spring 2011 Small Cap/
Micro Cap Investment Research Conference at the Antlers Hilton in
Colorado Springs, Colorado, on March 8, 2011.
A copy of the presentation along with a new corporate profile are
now available for free at http://ResearchArchives.com/t/s?74ac
About EnerJex Resources
Overland Park, Kansas-based EnerJex Resources, Inc., formerly
known as Millennium Plastics Corporation, is an oil and natural
gas acquisition, exploration and development company. The
Company's oil and natural gas acquisition and development
activities are currently focused in Eastern Kansas.
The Company's balance sheet at Sept. 30, 2010, showed
$6.41 million in total assets, $14.05 million in total
liabilities, and a stockholders' deficit of $7.63 million.
As reported in the Troubled Company Reporter on July 21, 2010,
Weaver & Martin, LLC, in Kansas City, Missouri, expressed
substantial doubt about the Company's ability to continue as a
going concern, following the Company's results for the year ended
March 31, 2010. The independent auditors noted that the Company
suffered recurring losses and had negative cash flows
EURAMAX INTERNATIONAL: S&P Affirms 'B-' Corporate Credit Rating
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Standard & Poor's Ratings Services said that it has affirmed the
ratings, including the 'B-' corporate credit rating, on Euramax
International Inc. S&P also assigned its 'B-' issue-level rating
to the company's proposed $375 million senior notes due 2016 with
a recovery rating of '3', indicating S&P's expectation for
meaningful (50%-70%) recovery in the event of a payment default.
The outlook is stable.
"The rating affirmation on Euramax reflects S&P's expectation that
the company is likely to improve its credit measures, which S&P
currently consider to be weak," said Standard & Poor's credit
analyst Dan Picciotto. "However, once the refinancing transaction
is completed, concerns about potentially limited headroom under
financial maintenance covenants will be mitigated. Euramax
remains highly leveraged, but market conditions appear to us
likely to improve in 2011, and S&P believes the restructuring
actions taken over the past couple of years could benefit the
company's operating margins, which S&P considers weak, as revenues
increase."
The ratings on Euramax reflect the company's highly leveraged
financial risk profile and weak business risk profile. S&P
expects Euramax will boost its revenues and EBITDA by more than
10% in 2011. S&P also note that Euramax's parent, Euramax
Holdings Inc. (not rated), filed a Form S-1 with the SEC in 2010
for an IPO.
The outlook is stable. The ratings incorporate S&P's expectation
that the company will be able to improve currently weak credit
measures. If S&P don't consider its liquidity adequate, S&P could
lower the ratings, for example, if the company does not complete
its refinancing transaction and headroom under existing covenants
becomes limited. "We could also lower the ratings if credit
measures do not improve from current levels of more than 7.5x debt
to EBITDA," Mr. Picciotto added. "We could raise the ratings if
improving operating performance results in lower levels of
leverage or if parent Euramax Holdings executes its IPO and uses
proceeds to repay debt. If S&P believes the company is likely to
maintain total debt to EBITDA approaching 5x, adequate liquidity,
and S&P expects it to generate free cash flow, S&P could raise the
ratings."
EXIDE TECHNOLOGIES: Settles Illinois Cleanup Claims for $1.3MM
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Bankruptcy Law360 reports that Judge Kevin Carey of the U.S.
Bankruptcy Court for the District of Delaware on Tuesday approved
a $1.3 million settlement between Exide Technologies Inc. and
several claimants who sought contributions for lead pollution
cleanup at a Granite City, Illinois, Superfund site.
About Exide Technologies
Headquartered in Princeton, New Jersey, Exide Technologies
(NASDAQ: XIDE) -- http://www.exide.com/-- manufactures and
distributes lead acid batteries and other related electrical
energy storage products.
The Company filed for Chapter 11 protection on April 14, 2002
(Bankr. Del. Case No. 02-11125). Matthew N. Kleiman, Esq., and
Kirk A. Kennedy, Esq., at Kirkland & Ellis, and James E. O'Neill,
Esq., at Pachulski Stang Ziehl & Jones LLP represented the Debtors
in their successful restructuring. The Court confirmed Exide's
Amended Joint Chapter 11 Plan on April 20, 2004. The plan took
effect on May 5, 2004. While it has emerged from Bankruptcy,
reorganized Exide is still resolving claims filed against it in
the Bankruptcy Court.
* * *
Reorganized Exide carries 'B' issuer credit ratings from Standard
& Poor's. "The ratings on Exide Technologies reflect what we
consider to be the Company's aggressive financial risk profile,
which incorporates S&P's expectation that sales and profitability
will improve gradually as demand increases," said Standard &
Poor's credit analyst Nancy Messer.
Exide has 'B3' corporate family and probability of default ratings
from Moody's Investors Service. In July 2008, Moody's upgraded
the rating to 'B3' from 'Caa1'. Exide's B3 Corporate Family
Rating continues to incorporate the company's leveraged profile,
cyclical industry characteristics, and raw material pricing
pressure, Moody's said in January 2011.
FN BUILDING: Owner Files Creditor Repayment Plan
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Dow Jones' DBR Small Cap reports that the owner of Detroit's First
National Building has filed a plan describing how it will pay the
creditors and tenants that have fought to install new management
or throw out the company's bankruptcy. FN Building LLC is
proposing to sell its 25-story building located in downtown
Detroit in order to generate the cash it needs to pay down its
debts under a Chapter 11 plan of reorganization, court papers
show, according to the report.
To that end, DBR says, FN Building has teamed up with its mortgage
lender and biggest creditor, FNB Detroit 2010 LLC, to engage in
"very serious discussions" with a potential purchaser. DBR
relates that such talks were made possible once FN Building agreed
to keep a state court-appointed receiver at its helm to appease
creditors like law firm Hongiman Miller Schwartz and Cohn, FN
Building's biggest tenant.
These creditors had sought new leadership or the dismissal the
company's bankruptcy in light of concerns about existing
management, the report adds.
FN Building L.L.C., filed for Chapter 11 protection (Bankr.
S.D.N.Y. Case No. 11-10266) in Manhattan, New York, on Jan. 26,
2011. FN Building is the owner of the First National Building in
Detroit. The Company owes $25.7 million on a mortgage to FNB
Detroit 2010 LLC. The building is said to be worth $5.58 million.
FONAR CORP: David Sandberg Discloses 8.41% Equity Stake
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In a Schedule 13D filing with the U.S. Securities and Exchange
Commission, David Sandberg and his affiliated entities disclosed
that they beneficially own 442,487 shares of common stock of
representing 8.41% of the shares outstanding, based on 5,264,315
shares of common stock of Fonar Corporation outstanding at
Jan. 31, 2011, as reported by the Company on its 10-Q for the
quarter ended Dec. 31, 2010.
About FONAR Corporation
Melville, N.Y.-based FONAR Corporation (Nasdaq: FONR)
-- http://www.fonar.com/-- is a Delaware corporation which was
incorporated on July 17, 1978. The Company conducts its business
in two segments. The first, conducted directly through FONAR, is
referred to as the Company's medical equipment segment. The
second, conducted through the Company's wholly owned subsidiary
Health Management Corporation of America, is referred to as the
physician management and diagnostic services segment.
The medical equipment segment is engaged in the business of
designing, manufacturing, selling and servicing magnetic
resonance imaging, also referred to as "MRI" or "MR", scanners
which utilize MRI technology for the detection and diagnosis of
human disease.
Health Management Corporation of America provides management
services, administrative services, billing and collection
services, office space, equipment, repair, maintenance service and
clerical and other non-medical personnel to diagnostic imaging
centers.
Stockholders' Deficit;
Going Concern Doubt Previously Issued
The Company's balance sheet at Dec. 31, 2010, showed $24.1 million
in total assets, $27.6 million in total liabilities, and a
stockholders' deficit of $3.5 million.
As reported in the Troubled Company Reporter on Oct. 18, 2010,
Marcum, LLP, in New York, N.Y., expressed substantial doubt about
Fonar Corporation's ability to continue as a going concern,
following the Company's results for the fiscal year ended June 30,
2010. The independent auditors noted that Company has suffered
recurring losses from operations, continues to generate negative
cash flows from operating activities, has negative working capital
at June 30, 2010, and is dependent on asset sales to fund its
shortfall from operations.
FORUM HEALTH: Hearing on Competing Plans Resumes April 26
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The Hon. Kay Woods of the U.S. Bankruptcy Court for the Northern
District of Ohio has adjourned until April 26, 2011, at 9:30 a.m.,
prevailing Eastern Time, the hearing to consider adequacy of the
disclosure statements explaining the Plans of Liquidation proposed
by Forum Health, et al., and the Official Committee of Unsecured
Creditors in the Debtor's case. Objections, if any, are due
March 22.
The hearing was originally scheduled for March 15.
At the hearing, the Court will also consider the motion for the
appointment of a Chapter 11 Trustee.
Management Plan
As reported in the Troubled Company Reporter on Feb. 15, 2011,
Forum Health's Plan generally provides for the liquidation of the
Debtors' remaining assets and distribution of proceeds to
creditors in accordance with the Bankruptcy Code. Any remaining
unpaid secured claims will be paid in full under the Debtors'
Plan. Holders of unsecured creditor claims aggregating
$152,000,000 to $167,000,000 are expected to recover 4.88% to
5.36%. Most of the Pension Benefit Guaranty Corp.'s $140,000,000
claim -- on account of unfunded contributions for a pension plan
for 7,132 former employees of Forum Health -- is treated as an
unsecured claim. Holders of equity interests won't receive any
distributions.
The Debtors have ceased operations as a healthcare provider and
the Debtors continue to wind down their affairs.
A copy of the disclosure statement explaining the Debtors Plan is
available for free at:
http://bankrupt.com/misc/ForumHealth_PlanOutline.pdf
Committee Plan
Since November 2010, the Debtors engaged in negotiations with the
Official Committee of Unsecured Creditors regarding a joint
Chapter 11 plan. During the course of those discussions, however,
the Committee raised an objection to the Debtors' proposal to (i)
exclude two affiliates -- Western Reserve Health Foundation and
Trumbull Memorial Hospital Foundation -- Foundations from a joint
plan and (ii) seek dismissal of the Foundations' cases.
The Committee rejected the Debtors' suggestion and, instead, filed
its own plan and disclosure statement. The Committee Plan
estimates that unsecured creditors will recover 15% to 17% of
their claims. A copy of the disclosure statement explaining the
Committee Plan is available for free at:
http://bankrupt.com/misc/ForumHealth_Committee_DS.pdf
The Committee Plan contemplates substantive consolidation of the
all the Debtor entities. The Debtors do not believe that
substantive consolidation as proposed in the Committee Plan is
appropriate.
About Forum Health
Forum Health and its affiliates filed for Chapter 11 protection on
March 16, 2009 (Bankr. N.D. Ohio Lead Case No. 09-40795). In its
petition, Forum Health estimated $100 million to $500 million in
assets and debts.
McDonald Hopkins LLC and Nadler, Nadler and Burdman Co., L.P.A.,
serve as the Debtors' chapter 11 co-counsel. Huron Consulting
Services LLC is the Debtors' Chief Restructuring Officer and
Financial Support Personnel. Houlihan Lokey Howard and Zukin
Capital, Inc. are the Debtors' investment bankers. Ernst & Young
LLP is the Debtors' independent auditor. Baker and Hostetler and
Thompson Hine LLP serve as special counsel. Squire, Sanders &
Dempsey LLP serve as the bond counsel. Kurtzman Carson
Consultants LLC is the claims and notice agent.
Alston & Bird LLP serves as counsel to the Official Committee of
Unsecured Creditors. Grant Thornton LLP is the financial advisor
to the Creditors Committee.
GB HERNDON: Polsinelli Declaration Fails FRBP 2014(a)
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Bankruptcy Judge S. Martin Teel Jr. says GB Herndon and
Associates, Inc.'s amended application to employ Polsinelli
Shughart PC as special counsel includes a declaration that fails
adequately to comply with Fed. R. Bankr. P. 2014(a). The
declaration does state that the law firm has no connection with
the debtor (presumably meaning no connection other than the
prepetition representation of the debtor disclosed earlier in the
declaration). Beyond identifying two creditors the law firm has
represented in the past -- without saying these are all of the
creditors it has represented in the past -- the declaration fails
forthrightly to disclose connections with "creditors, any other
party in interest, their respective attorneys and accountants, the
United States trustee, or any person employed in the office of the
United States trustee" as required by Rule 2014(a). Accordingly,
Judge Teel directs the Debtors to file by March 18 an amended
declaration in support of the Amended Application.
A copy of the Court's March 4, 2011 memorandum decision and order
is available at http://is.gd/gswomMfrom Leagle.com.
GB Herndon and Associates, Inc., filed for Chapter 11 bankruptcy
(Bankr. D. D.C. Case No. 10-00945) on Sept. 24, 2010.
GC MERCHANDISE: Seeks Access to Cash Collateral
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GC Merchandise Mart LLC, the owner of Merchandise Mart in
Denver, is asking the bankruptcy court for permission to use cash
representing collateral for the lenders' mortgage.
American Realty Investors Inc., is the ultimate owner of GC
Merchandise. Bank of New York Mellon Corp., as trustee, is owed
$22 million on a mortgage taken out in 1997. The owner contends
the property is worth $40 million.
Bank of New York, which claims that no payments had been made on
the mortgage since October, is asking the bankruptcy court to
accelerate approval of authorization to take examinations under
oath from executives of American Realty.
Net operating income was $2.6 million in the first 10 months of
2010, according to the bank. American Realty reported a net loss
of $41.9 million during the first nine months of 2010 on revenue
of $122.7 million. Merchandise Mart is located on Interstate 25
north of downtown Denver.
Dallas, Texas-based GC Merchandise Mart LLC filed a Chapter 11
petition (Bankr. N.D. Tex. Case No. 11-31563) in Dallas, on March
1, 2011. The Debtor estimated assets and debts of
$10 million to $50 million as of the Chapter 11 filing.
The Debtor is represented by;
Melissa S. Hayward, Esq.
FRANKLIN SKIERSKI LOVALL HAYWARD LLP
10501 N. Central Expressway, Suite 106
Dallas, TX 75231
Tel: (972) 755-7104
Fax: (972) 755-7114
E-mail: MHayward@FSLHlaw.com
GENERAL MOTORS: Court Enters Bench Decision on Plan Objections
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Judge Robert E. Gerber of the U.S. Bankruptcy Court for the
Southern District of New York issued a bench decision on
March 7, 2011, on the objections to the confirmation of the
Amended Joint Chapter 11 Plan of Reorganization of Motors
Liquidation Company and its debtor affiliates.
"While necessary complex in aspects of its implementation, the
Plan at bottom is a relatively simple, and classic, liquidating
'Pot Plan,'" Judge Gerber said. Under it, the securities of what
is now called General Motors LLC, or "New GM," that were brought
in under Old GM's July 2009 sale of its assets and any further
value brought in will be distributed to Old GM creditors with
allowed claims, Judge Gerber noted. He added that substantial
cash payments will be made to implement environmental settlements
with the U.S. Government and state environmental regulators.
Judge Gerber commented that the Plan is very popular with Old
GM's creditors, having secured the approval of 97% of them in
number and 85% in dollar amount. Confirmation of the Plan was
affirmatively supported on the record by the Official Committee
of Unsecured Creditors; the Official Committee of Unsecured
Creditors Holding Asbestos-Related Claims; the Asbestos Future
Claims Representative; Wilmington Trust Company and Law Debenture
Trust Company of New York, the indenture trustees representing
the $27 billion in principal amount of Old GM bonds; the
governments of Canada and Ontario, through their Export
Development Canada and the U.S. Government, Judge Gerber noted.
Indeed, the strong support of the Plan was made possible by
settlements on which the Plan is premised, Judge Gerber said.
One of Old GM's largest liabilities was its environmental
obligations to the U.S. Government and various states and
sovereigns, like the States of New York and California, and the
St. Regis Mohawk Tribe in upstate New York, Judge Gerber pointed
out. The most major environmental claims have been settled by
two separate agreements: an Environmental Response Trust
Agreement and the Priority Order Site Settlements. The Debtors,
the Asbestos Creditors' Committee and other parties also fixed
the Debtors' asbestos liabilities at $625 million.
Judge Gerber also deemed that the number of objections to
confirmation, from 13 to five objections, was very small in the
context of a case that originally had more than 37,000 claims,
and which, even after claims disallowances, still has almost $50
billion in claims in amount.
The bankruptcy judge noted that the Plan has a feature, which
could be triggered at the Debtors' option, under which the Plan
would be amended to cure any minor impediments to confirmation
that might otherwise exist.
"That enabled me to orally rule, at the conclusion of the
Confirmation Hearing, that the Plan would be confirmed -- though
I'd take under advisement objections that might cause me to
require modifications to the Plan," Judge Gerber said.
Judge Gerber determined that some of the objections require minor
modifications to the Plan. The remainder are lacking in merit,
Judge Gerber ruled.
(1) Lack of Good Faith
Judge Gerber disagreed with the contention raised by
Appaloosa Management, Aurelius Capital Management, Elliott
Management, and Fortress Investment Group and other hedge
funds, as holders of notes issued by General Motors Nova
Scotia and Green Hunt Wedlake, Inc., trustee of GM Nova
Scotia, that the Plan must provide for any payment to them at
this time, and disagrees with the contention that the Plan
was not put forward in good faith.
Judge Gerber mentioned that discovery is on going and he has
yet to rule on the merits of the Creditors' Committee's
objection to the claims of the Nova Scotia Noteholders and
the Nova Scotia Trustee.
Judge Gerber found the objections factually and legally
deficient. Judge Gerber held that the Nova Scotia
Noteholders and the Nova Scotia Trustee give insufficient
attention to the fact that the Plan provision denying
immediate payment on account of disputed claims applies
not just to them, but to every other claimant with a disputed
claim in the Old GM Chapter 11 case. There was no undisputed
portion of either claim that could or should otherwise be
entitled to a distribution under the Plan, Judge Gerber
pointed out.
Judge Gerber further found that the Nova Scotia Trustee has
given no basis in fact, or in law, for its contention that
the Plan was put forward in anything but good faith. Plans
can, and sometimes do, trump the normal statutory scheme and
provide for at least some distributions on claims that have
been objected to, most commonly, where they have been
objected to only in part, according to Judge Gerber.
(2) Unequal Treatment Within Unsecured Claims
Judge Gerber disagreed that the unfair discrimination
alleged by the Nova Scotia Noteholders, the Nova Scotia
Trustee, the States of New York and California, and the Town
of Salina makes the Plan unconfirmable, and, declined to
order the requested changes in the Plan. To address many
claims that are not allowed, but may be allowed in the
future, the GUC Trust provides for reserves, Judge Gerber
noted.
This mechanism protects those whose claims are now disputed,
as it guards against premature or excessive distributions to
those whose claims already are allowed, Judge Gerber said.
Just as that mechanism is not indicative of bad faith, it
does not result in unequal treatment of creditors in the same
class, Judge Gerber found.
Though the Nova Scotia Noteholders' and the Nova Scotia
Trustee's claims are objected to, and they will not get
distributions unless and until their claims are allowed,
reserves have been set up to cover the full $2.6 billion
aggregate amount of their claims. Thus the Plan supporters
have already given those claimants all that the latter
reasonably could demand, Judge Gerber pointed out.
Judge Gerber also did not find any legal impediment to
funding the reserves with New GM Securities That is the only
currency that Old GM received from New GM at the time of the
sale, and the only currency that Old GM has to provide to
its creditors, Judge Gerber related. Equal treatment does
not require establishing additional mechanisms for holders of
disputed claims to track the movements of the stock market,
Judge Gerber said.
Judge Gerber also acknowledged that the Debtors and
Creditors' Committee have offered to put additional language
into the Plan to memorialize that it is intended that the
distributions to be made to holders of resolved, allowed,
general unsecured claims, in accordance with Section 5.3,
will provide those holders as nearly as possible with the
exact same amount of distributions of each asset type, as if
those holders had been holders of initial allowed general
unsecured claims.
(3) Segregated Reserves and Other Special Treatment
Judge Gerber also disagreed with the Nova Scotia Noteholders
and the Nova Scotia Trustee's contention that the Plan must
establish segregated reserves for their benefit alone, from
which their claims will be satisfied if their claims are
allowed. In a large Chapter 11 case, like this one, with
thousands of disputed claims, the burden of that requirement,
if there ever were one, would be obvious, Judge Gerber
asserted.
(4) Wilmington Trust Conflicts
Judge Gerber found that, assuming that the conflict of
interest arising from Wilmington Trust's current and future
roles as alleged by the States of New York and California,
and the Town of Salina would require revisions of the Plan,
no deficiencies that would necessitate any plan revisions.
Upon the effective date of the Plan, Wilmington Trust will be
resigning from its position as a member and the chair of the
Creditors' Committee and will focused on serving trust
beneficiaries in its capacity as GUC and Avoidance Action
Trust Administrators. Thus, the beneficiaries of the two
trusts will be the same -- the unsecured creditors in these
Chapter 11 cases, Judge Gerber said.
At this point, the beneficiary of the Avoidance Trust is
plainly unsecured creditors, of which Wilmington Trust's
bondholders, a subset of the unsecured creditor community,
are an important part, Judge Gerber noted. There certainly
is no conflict, insofar as either the GUC Trust or the
Avoidance Trust is concerned, between Old GM bondholders and
other members of the Unsecured Class, Judge Gerber found.
(5) Other GUC Issues
Judge Gerber also did not find any reason for concerns of
sufficient oversight and controls to protect general
unsecured creditors as asserted by certain objectors. The
GUC Trust Agreement provides for various layers of review for
all actions taken by the GUC Trust Administrator, including
by the GUC Trust Monitor, which is charged with overseeing
the activities of the GUC Trust Administrator and also the
Court, Judge Gerber noted.
Judge Gerber commented that Wilmington Trust, an indenture
trustee for $23 billion in Old GM bonds, has extensive
experience in acting as a fiduciary and in coordinating
distributions to bondholders and other creditor
constituencies. Given its familiarity with the Debtors'
Chapter 11 cases, it would actually be contrary to the
interests of Old GM's unsecured creditors to replace
Wilmington Trust with an alternative entity, Judge Gerber
held.
Judge Gerber also found faulty the premise underlying the
objectors' concern that Wilmington Trust, as the soon-to-be
former indenture trustee for bondholders with liquidated and
Allowed Claims, is focused on disallowing disputed claims, to
their disadvantage, since their claims have not yet been
allowed.
(6) Exculpation Provisions
Per the State of New York, the Town of Salina, and Green Hunt
Wedlake's objections, Judge Gerber held that the releases in
Article 12.5 by the Old GM estate are unobjectionable, but
the releases in Article 12.6 are third-party releases
impermissible under applicable Second Circuit law, and
earlier rulings following the U.S. Court of Appeals for the
Second Circuit's rulings.
Judge Gerber recognized how hard the Debtors, the Chapter 11
Fiduciaries, and their professionals worked on this case, and
how, with thousands of disappointed creditors and
stockholders out there to second guess their actions, they
would like to be protected for their good faith actions in
maximizing value and bringing this case to a successful
conclusion. But Judge Gerber said the exculpation provisions
of Article 12.6 must be fixed. Specifically, Article 12.6
may include language, if Plan supporters wish, requiring
third-party claims of the type now covered to be first
brought before the Court, for a threshold inquiry to confirm
that they actually belong to the third party, and don't
belong, instead, to the Debtors' estates. And it may further
provide that, subject to any applicable subject matter
jurisdiction limitations, the Court will at least initially
have exclusive jurisdiction to be the forum for any covered
litigation brought by any creditor or equity security holder,
so long as the Court is free to abstain and consider whether
that litigation would be better conducted elsewhere.
To the extent other objections were not expressly addressed in
this Decision, they are overruled, Judge Gerber ruled.
For those reasons, the Plan will be confirmed, subject to
inclusion of the Plan revisions announced on the record and as
required under this Decision, Judge Gerber determined.
The Debtors are to settle an order in accordance with this
Decision. The time to appeal will run from the date of entry of
the resulting order, and not from the date of this Decision.
A full-text copy of the March 7 Bench Decision is available for
free at http://bankrupt.com/misc/GM_Mar7BenchDecision.pdf
About General Motors
With its global headquarters in Detroit, Michigan, General Motors
Company -- http://www.gm.com/-- is one of the world's largest
automakers. GM employs 205,000 people in every major region of
the world and does business in some 157 countries. GM and its
strategic partners produce cars and trucks in 31 countries, and
sell and service these vehicles through the following brands:
Buick, Cadillac, Chevrolet, FAW, GMC, Daewoo, Holden, Jiefang,
Opel, Vauxhall and Wuling. GM's largest national market is China,
followed by the United States, Brazil, Germany, the United
Kingdom, Canada, and Italy. GM's OnStar subsidiary is the
industry leader in vehicle safety, security and information
services.
General Motors Co. is 60.8% owned by the U.S. Government. It was
formed to acquire the operations of General Motors Corporation
through a sale under 11 U.S.C. Sec. 363 following Old GM's
bankruptcy filing. The deal was closed on July 10, 2009, and Old
GM changed its name to Motors Liquidation Co. Old GM remains
subject to a pending Chapter 11 reorganization case before the
U.S. Bankruptcy Court for the Southern District of New York.
At Sept. 30, 2010, GM had US$137.238 billion in total assets,
US$106.522 billion in total liabilities, US$6.998 billion in
preferred stock, US$971 million in non-controlling interest, and
US$23.718 billion in total equity.
New GM has a 'BB-' corporate credit rating from Standard & Poor's
and a 'BB-' issuer default rating from Fitch.
About Motors Liquidation
General Motors Corporation and three of its affiliates filed for
Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case
No. 09-50026). The Honorable Robert E. Gerber presides over the
Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq.,
and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP,
assist the Debtors in their restructuring efforts. Al Koch at AP
Services, LLC, an affiliate of AlixPartners, LLP, serves as the
Chief Executive Officer for Motors Liquidation Company. GM is
also represented by Jenner & Block LLP and Honigman Miller
Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is
providing legal advice to the GM Board of Directors. GM's
financial advisors are Morgan Stanley, Evercore Partners and the
Blackstone Group LLP. Garden City Group is the claims and notice
agent of the Debtors.
The U.S. Trustee has appointed an Official Committee of Unsecured
Creditors and a separate Official Committee of Unsecured Creditors
Holding Asbestos-Related Claims. Lawyers at Kramer Levin Naftalis
& Frankel LLP serve as bankruptcy counsel to the Creditors
Committee. Attorneys at Butzel Long serve as counsel regarding
supplier contract matters. FTI Consulting, Inc., serves as
financial advisors to the Creditors Committee. Elihu Inselbuch,
Esq., at Caplin & Drysdale, Chartered, represents the Asbestos
Committee. Legal Analysis Systems, Inc., serves as asbestos
valuation analyst.
Bankruptcy Creditors' Service, Inc., publishes General Motors
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by General Motors Corp. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
GENERAL MOTORS: Court OKs $773MM Environmental Claims Settlement
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Judge Robert Gerber approved on March 7, 2011, a $733 million
environmental response trust consent decree and settlement
agreement entered among Motors Liquidation Company, the U.S.
Government and 15 other parties, said New York Attorney General
Eric T. Schneiderman, in a public statement on March 8, 2011.
The Settlement Agreement was approved as part of MLC's Amended
Joint Chapter 11 Plan of Reorganization, which Judge Gerber said
he will confirm, subject to certain changes. The Settlement
Agreement will dedicate $773 million to 89 sites in 14 states
around the U.S.
Specifically, the Settlement Agreement will provide $154 million
for the environmental cleanup and redevelopment of contaminated
of former GM sites in Massena (St. Lawrence County) and Salina --
just outside (Onondaga County), New York. The funds will not
only clean up pollution that threatens public health and safety
in these communities, but will also make these sites available
and attractive for economic development, Mr. Schneiderman
related. He added that funds have also been set aside to provide
security and pay local taxes for the sites, thus relieving local
communities of further potential burdens.
Both sites addressed by the Court's decision are on the federal
National Priorities List and the State Registry of Inactive
Hazardous Waste Sites. The 270-acre Massena site which is
contaminated with Polychlorinated Biphenyls (PCBs), metals and
other contamination from aluminum die-casting and other
manufacturing activities that took place on the property from
1959 - 2009, will receive $120.8 million for continued
remediation.
The 65-acre Inland Fisher Guide site in Salina, just outside
Syracuse, also suffers from PCB contamination and will receive
$33.2 million. Some of this funding will be used at adjacent
areas including Upper Ley Creek. New York and other states will
be eligible to access an additional $68 million in Environmental
Response Trust funds for any unexpected additional cleanup
activities necessary.
The agreement also creates an Administrative Funding Account to
cover costs normally associated with owning property - including
site maintenance, utilities, local taxes, security, and other
expenses associated with redevelopment at the Massena and Salina
properties. This fund will alleviate some of the impact on the
communities resulting from General Motors' departure.
Mr. Schneiderman stated that the State of New York continues to
negotiate the resolution of claims related to several other New
York sites at which former General Motors /Motors Liquidation has
liability for environmental contamination, but which are not
owned or used by the Company. The cleanup costs associated with
these other sites are estimated to exceed $224 million, he
disclosed.
A formal order on the approval of the Settlement Agreement is not
yet available in the Court dockets.
About General Motors
With its global headquarters in Detroit, Michigan, General Motors
Company -- http://www.gm.com/-- is one of the world's largest
automakers. GM employs 205,000 people in every major region of
the world and does business in some 157 countries. GM and its
strategic partners produce cars and trucks in 31 countries, and
sell and service these vehicles through the following brands:
Buick, Cadillac, Chevrolet, FAW, GMC, Daewoo, Holden, Jiefang,
Opel, Vauxhall and Wuling. GM's largest national market is China,
followed by the United States, Brazil, Germany, the United
Kingdom, Canada, and Italy. GM's OnStar subsidiary is the
industry leader in vehicle safety, security and information
services.
General Motors Co. is 60.8% owned by the U.S. Government. It was
formed to acquire the operations of General Motors Corporation
through a sale under 11 U.S.C. Sec. 363 following Old GM's
bankruptcy filing. The deal was closed on July 10, 2009, and Old
GM changed its name to Motors Liquidation Co. Old GM remains
subject to a pending Chapter 11 reorganization case before the
U.S. Bankruptcy Court for the Southern District of New York.
At Sept. 30, 2010, GM had US$137.238 billion in total assets,
US$106.522 billion in total liabilities, US$6.998 billion in
preferred stock, US$971 million in non-controlling interest, and
US$23.718 billion in total equity.
New GM has a 'BB-' corporate credit rating from Standard & Poor's
and a 'BB-' issuer default rating from Fitch.
About Motors Liquidation
General Motors Corporation and three of its affiliates filed for
Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case
No. 09-50026). The Honorable Robert E. Gerber presides over the
Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq.,
and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP,
assist the Debtors in their restructuring efforts. Al Koch at AP
Services, LLC, an affiliate of AlixPartners, LLP, serves as the
Chief Executive Officer for Motors Liquidation Company. GM is
also represented by Jenner & Block LLP and Honigman Miller
Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is
providing legal advice to the GM Board of Directors. GM's
financial advisors are Morgan Stanley, Evercore Partners and the
Blackstone Group LLP. Garden City Group is the claims and notice
agent of the Debtors.
The U.S. Trustee has appointed an Official Committee of Unsecured
Creditors and a separate Official Committee of Unsecured Creditors
Holding Asbestos-Related Claims. Lawyers at Kramer Levin Naftalis
& Frankel LLP serve as bankruptcy counsel to the Creditors
Committee. Attorneys at Butzel Long serve as counsel regarding
supplier contract matters. FTI Consulting, Inc., serves as
financial advisors to the Creditors Committee. Elihu Inselbuch,
Esq., at Caplin & Drysdale, Chartered, represents the Asbestos
Committee. Legal Analysis Systems, Inc., serves as asbestos
valuation analyst.
Bankruptcy Creditors' Service, Inc., publishes General Motors
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by General Motors Corp. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
GENERAL MOTORS: Old GM Settles Debts in Non-Owned Sites for $54MM
-----------------------------------------------------------------
Motors Liquidation Co. or Old GM and the United States of America
entered into a Non-Owned Settlement Agreement resolving the
Debtors' liabilities in 34 sites in 11 states for $54,424,131.
The settlement agreement will grant the U.S. Environmental
Protection Agency an allowed unsecured claim for $36,290,270 and
cash amount of $4,613,322 with respect to bond requirements and
work up to $10.5 million in accordance with the bond
requirements. Three steering committees will also receive
allowed unsecured claims aggregating $3,020,039.
The U.S. Government, on behalf of the EPA, has alleged that
Motors Liquidation Company or affiliated Debtors are potentially
responsible or liable parties with respect to certain sites. To
that end, the U.S. Government timely filed Claim Nos. 67362 and
64064 against Motors Liquidation Company and Claim Nos. 70254 and
70255 against Remediation and Liability Management Company and
Environmental Corporate Remediation Company, Inc.
Certain potentially responsible parties implementing response
action at the Settled Non-owned Sites have asserted claims for
contribution for response costs from the Debtors at the Casmalia
Resources Superfund Site in Santa Barbara County, California; the
Operating Industries, Inc. Landfill Superfund Site in Los Angeles
County, California; and the Malvern TCE Superfund Site in Chester
County, Pennsylvania.
By this settlement agreement, the Parties agree to these terms:
(1) In settlement and satisfaction of the U.S. Proof of Claim as
to certain sites, the U.S. Government, on behalf of the EPA,
will have an Allowed General Unsecured Claim, which will be
classified in Class 3 under the Debtors' Amended Joint
Chapter 11 Plan of Reorganization. The sites and the amounts
of the EPA's corresponding Allowed General Unsecured Claim
are:
Site Amt. of Allowed Claim
---- ---------------------
Dearborn Refining Site in
Wayne County, Michigan $130,000
"Dearborn Refining Site"
Atlantic Resources Corporation $172,200
Superfund Site in Middlesex
County, New Jersey
"Atlantic Resources Site"
Massena Superfund Site, in $2,741,731
St. Lawrence County, New York
"Central Foundry Site"
Tremont City Barrel Fill Site $7,500,000
in Clark County, Ohio
"Tremont Site"
Valleycrest Landfill Site at $7,000,000
200 Valleycrest Drive in Dayton,
Montgomery County, Ohio
"Valleycrest Site"
Flint West a/k/a Chevy in the $4,200,000
Hole Site at 300 North Chevrolet
Avenue, Flint, Michigan
"Chevy in the Hole Site"
South Dayton Dump & Landfill $4,000,000
Superfund Site in Montgomery
County, Ohio
"South Dayton Site"
Doepke Holliday Disposal $155,000
Superfund Site in Johnson
County, Kansas
"Doepke Disposal Site"
Sealand Restoration Inc. $791,000
Superfund Site in St.
Lawrence County, New York
"Sealand Site"
Lammers Barrel Superfund $1,200,000
Site in Greene County, Ohio
"Lammers Site"
Tonolli Corporation Superfund $50,400
Site in Carbon County,
Pennsylvania
"Tonolli Site"
Tri-Cities Barrel Superfund $40,000
Site in Broome County,
New York
"Tri-Cities Site"
Army Creek Landfill Superfund $300,000
Site in New Castle County,
Delaware
"Army Creek Site"
Chemical Recovery Systems $40,000
Site in Lorain County, Ohio
"Chemical Recovery Site"
Lake Calumet Superfund $14,600
Site in Cook County, Illinois
"Lake Calumet Site"
Jacks Creek/Sitkin Smelting $1,155
Corporation Superfund Site
in Mifflin County, Pennsylvania
"Jacks Creek Site"
Rose Township Dump Superfund $211,108
Site in Oakland County, Michigan
"Rose Dump Site"
Springfield Township Dump $211,108
Superfund Site in Oakland County,
Michigan
"Springfield Dump Site"
Spectron Superfund Site $581,664
in Cecil County, Maryland
"Spectron Site"
Breslube-Penn Superfund Site $1,100,000
in Allegheny County, Pennsylvania
"Breslube Site"
Delaware Sand & Gravel Superfund $1,234,250
Site in New Castle County, Delaware
"DS&G Site"
Ventron/Velsicol Superfund Site $200,000
in Bergen County, New Jersey
"Ventron/Velsicol Site"
Forest Waste Disposal Superfund $495,460
Site in Genesee County, Michigan
"Forest Waste Site"
Reclamation Oil Company Site $253,642
in Wayne County, Michigan
"Reclamation Oil Site"
Mercury Refining Superfund $18,192
Site located in Albany
County, New York
"Mercury Refining Site"
(2) In partial settlement and satisfaction of the Operating
Industries Steering Committee's proof of claim and in full
settlement and satisfaction of the U.S. Proof of Claim with
respect to the Operating Industries Site, the Operating
Industries Steering Committee will have a Class 3 Allowed
General Unsecured Claim for $2,300,000.
(3) In settlement and satisfaction of the U.S. Proof of Claim
with respect to the civil penalty claims resulting from
Resource Conservation and Recovery Act at various automotive
assembly plants owned by GM throughout the U.S., the U.S.
Government, on behalf of EPA, will have a Class 3 Allowed
General Unsecured Claim for $48,260.
(4) In settlement and satisfaction of the U.S. Proof of Claim
with respect to the civil penalty claims under the Clean Air
Act, the U.S. Government, on behalf of EPA, will have a Class
3 Allowed General Unsecured Claim for $875,000.
(5) In settlement and satisfaction of the U.S. Proof of Claim
with respect to the civil penalty claims for failure to
maintain adequate financial assurance for closure, post-
closure and third party liability pursuant to the RCRA, the
U.S. Government, on behalf of EPA, will have a Class 3
Allowed General Unsecured Claim for $353,000.
(6) With respect to the 68th Street Dump Superfund Site in
Baltimore and Rosedale Counties, Maryland, MLC was required
to maintain financial assurance securing its full and final
completion of remedial work. MLC satisfied its financial
assurance obligation by executing a performance bond in the
amount of $122,000 with Westchester Fire Insurance Company,
naming EPA as beneficiary. In partial settlement and
satisfaction of the U.S. Proof of Claim with respect to the
68th Street Site, Westchester will pay EPA up to $122,000, as
directed by EPA, for the cost of remedial work at the 68th
Street Site. The U.S. Government will also receive a Class 3
Allowed General Unsecured Claim for the 68th Street Site for
$2,368,000. The performance bond for $122,000 and the
Allowed General Unsecured Claim for $2,368,000 will be in
full settlement and satisfaction of the U.S. Proof of Claim
with respect to the 68th Street Site.
(7) In partial settlement and satisfaction of the Chemclene PRP
group's proof of claim and in full settlement and
satisfaction of the U.S. Proof of Claim with respect to the
Malvern Site, the U.S. Government, on behalf of EPA, will
have an Allowed General Unsecured Claim for $4,500 and the
Chemclene PRP Group will have an Allowed General Unsecured
Claim for $376,500.
(8) In partial settlement and satisfaction of the proof of claim
of the Casmalia Resources Site Steering Committee and in full
settlement and satisfaction of the U.S. Proof of Claim and
with respect to the Casmalia Site, the Casmalia Resources
Site Steering Committee will have an Allowed General
Unsecured Claim for $344,039.
(9) With respect to the Waukegan Manufactured Gas & Coke Plant
Superfund Site in Lake County, Illinois, which is part of the
larger Outboard Marine Corporation Superfund Site, MLC was
required to maintain financial assurance securing its full
and final completion of remedial work. MLC satisfied its
financial assurance obligation by executing a performance
bond for $10.5 million with Westchester, naming EPA as
beneficiary. In settlement and satisfaction of the U.S.
Proof of Claim with respect to the Waukegan Site, Westchester
will perform remedial work at the Waukegan Site up to the
amount of $10.5 million.
(10) With respect to the H. Brown Company Superfund Site in
Walker, Michigan, MLC was required to maintain financial
assurance securing its full and final completion of remedial
work. MLC satisfied its financial assurance obligation by
executing a performance bond in the amount of $89,000 with
Westchester, naming EPA as beneficiary. In settlement and
satisfaction of the U.S. Proof of Claim with respect to the
H. Brown Site, Westchester will pay EPA up to $89,000, as
directed by EPA, for the cost of remedial work at the H.
Brown Site.
(11) With respect to the Sanitary Landfill Company Superfund
Site, also known as the Cardington Road Superfund Site, in
Montgomery County, Ohio, MLC was required to maintain
financial assurance securing its full and final completion
of remedial work. MLC satisfied its financial assurance
obligation by executing a performance bond for $2,423,000
with Westchester, naming EPA as beneficiary. In settlement
and satisfaction of the U.S Proof of Claim with respect to
the Sanitary Landfill Site, Westchester will pay EPA up to
$2,423,000, as directed by EPA, for the cost of remedial
work at the Sanitary Landfill Site.
(12) With respect to the Maryland Sand, Gravel, and Stone
Superfund Site in Cecil County, Maryland, MLC was required
to maintain financial assurance securing its full and final
completion of remedial work. MLC satisfied its financial
assurance obligation by executing a performance bond for
$1,400,000 with Westchester, naming EPA as beneficiary. In
settlement and satisfaction of the U.S Proof of Claim with
respect to the SG&S Site, Westchester will pay EPA up to
$1,400,000, as directed by EPA, for the cost of remedial
work at the SG&S Site.
(13) With respect to the Ford Road Landfill Superfund Site in
Lorain County, Ohio, MLC was required to maintain financial
assurance securing its full and final completion of remedial
work. MLC satisfied its financial assurance obligation by
executing a performance bond for $589,322 with Westchester,
naming EPA as beneficiary. In settlement and satisfaction
of the U.S Proof of Claim with respect to the Ford Road
Site, Westchester will pay EPA up to $589,322, as directed
by EPA, for the cost of remedial work at the Ford Road Site.
The U.S. will not receive any Allowed General Unsecured
Claim for the Waukegan Site, H. Brown Site, the Sanitary
Landfill, SG&S Site and Ford Road Site under the Settlement
Agreement
(14) In sum, the U.S. Government, on behalf of EPA, will have an
Allowed General Unsecured Claim in the total amount of
$36,290,270, the Operating Industries Steering Committee for
$2,300,000, the Casmalia Resources Site Steering Committee
for $344,039, and the Chemclene PRP Group for $376,500. The
U.S. Government, on behalf of EPA, will also receive a total
cash amount of $4,613,322 from bonds, and work up to the
amount of $10.5 million in accordance with bond
requirements.
Upon Court approval of the Settlement Agreement, the U.S. Proof
of Claim will be deemed fully settled and satisfied as to the
Settled Non-Owned Sites and the Debtors' claims agent will be
authorized and empowered to adjust the claims register
accordingly.
As to those sites not resolved by this or any other settlement
agreement between the U.S. Government and the Debtors, the U.S.
Government is authorized, within 30 days after the Effective
Date, to file a new proof of claim in the Debtors' Chapter 11
cases for those sites. The New Proof of Claim may not be
objected to on the grounds of timeliness. The Debtors reserve
all rights to object to the New Proof of Claim on any grounds
other than timeliness.
The GUC Trust will reduce the distribution reserve amount to be
used by the GUC Trust pursuant to Article VII of the Plan for the
remaining unresolved general unsecured claims against Debtors
asserted in the U.S. Proof of Claim to no less than $250
million.
A full-text copy of the Non-Owned Settlement Agreement is
available for free at:
http://bankrupt.com/misc/GM_Non-OwnedSettlement.pdf
The U.S. Government asks the Court to not approve the Settlement
Agreement at this time. Notice of the lodging of the Settlement
Agreement will be published in the Federal Register, following
which the U.S. Department of Justice will accept public comments
on the Settlement Agreement for a 15-day period. After the
conclusion of the public comment period, the U.S. Government will
file with the Court any comments received, as well as responses
to the comments, and at that time, if appropriate, will ask the
Court to approve the Settlement Agreement.
About General Motors
With its global headquarters in Detroit, Michigan, General Motors
Company -- http://www.gm.com/-- is one of the world's largest
automakers. GM employs 205,000 people in every major region of
the world and does business in some 157 countries. GM and its
strategic partners produce cars and trucks in 31 countries, and
sell and service these vehicles through the following brands:
Buick, Cadillac, Chevrolet, FAW, GMC, Daewoo, Holden, Jiefang,
Opel, Vauxhall and Wuling. GM's largest national market is China,
followed by the United States, Brazil, Germany, the United
Kingdom, Canada, and Italy. GM's OnStar subsidiary is the
industry leader in vehicle safety, security and information
services.
General Motors Co. is 60.8% owned by the U.S. Government. It was
formed to acquire the operations of General Motors Corporation
through a sale under 11 U.S.C. Sec. 363 following Old GM's
bankruptcy filing. The deal was closed on July 10, 2009, and Old
GM changed its name to Motors Liquidation Co. Old GM remains
subject to a pending Chapter 11 reorganization case before the
U.S. Bankruptcy Court for the Southern District of New York.
At Sept. 30, 2010, GM had US$137.238 billion in total assets,
US$106.522 billion in total liabilities, US$6.998 billion in
preferred stock, US$971 million in non-controlling interest, and
US$23.718 billion in total equity.
New GM has a 'BB-' corporate credit rating from Standard & Poor's
and a 'BB-' issuer default rating from Fitch.
About Motors Liquidation
General Motors Corporation and three of its affiliates filed for
Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case
No. 09-50026). The Honorable Robert E. Gerber presides over the
Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq.,
and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP,
assist the Debtors in their restructuring efforts. Al Koch at AP
Services, LLC, an affiliate of AlixPartners, LLP, serves as the
Chief Executive Officer for Motors Liquidation Company. GM is
also represented by Jenner & Block LLP and Honigman Miller
Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is
providing legal advice to the GM Board of Directors. GM's
financial advisors are Morgan Stanley, Evercore Partners and the
Blackstone Group LLP. Garden City Group is the claims and notice
agent of the Debtors.
The U.S. Trustee has appointed an Official Committee of Unsecured
Creditors and a separate Official Committee of Unsecured Creditors
Holding Asbestos-Related Claims. Lawyers at Kramer Levin Naftalis
& Frankel LLP serve as bankruptcy counsel to the Creditors
Committee. Attorneys at Butzel Long serve as counsel regarding
supplier contract matters. FTI Consulting, Inc., serves as
financial advisors to the Creditors Committee. Elihu Inselbuch,
Esq., at Caplin & Drysdale, Chartered, represents the Asbestos
Committee. Legal Analysis Systems, Inc., serves as asbestos
valuation analyst.
Bankruptcy Creditors' Service, Inc., publishes General Motors
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by General Motors Corp. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
GLC LIMITED: Court Extends Filing of Schedules Until April 29
-------------------------------------------------------------
The Hon. Jeffery P. Hopkins of the U.S. Bankruptcy Court for the
Southern District of Ohio has extended, at the behest of GLC
Limited, the deadline to file for the filing of schedules of
assets and liabilities, a statement of financial affairs, a
schedule of current income and expenditures, and a schedule of
executor contracts and unexpired leases for an additional 46 days,
until April 29, 2011.
The Debtor said it has approximately 200 creditors. According to
the Debtor, the conduct and operation of its business operations
requires the Debtor to maintain voluminous books and records and
complex accounting systems. "Given the size and complexity of its
business operations, the number of creditors and other parties in
interest in this Chapter 11 case, and the fact that certain
prepetition invoices have not yet been received or entered into
the Debtor's financial accounting systems, the Debtor has begun,
but has not yet finished, compiling the information required to
complete the Schedules and Statements. Given the numerous
critical operational matters that the Debtor's staff must address
in the early days of this Chapter 11 case, the Debtor will not be
in a position to complete the Schedules and Statements within the
time specified in Rule 1007(c) of the Bankruptcy Rules," the
Debtor stated.
Proctorville, Ohio-based GLC Limited is principally a liquidation
company in the wholesale/retail distribution industry. It offers
large selections of name brand products in many categories. It
distributes its goods through a network of wholesale distributors,
retail chains and discount and surplus centers. It owns four
warehouses for its goods which are located in Proctorville and
Columbus, Ohio and Huntington, West Virginia.
GLC filed for Chapter 11 bankruptcy protection on Feb. 28, 2011
(Bankr. S.D. Ohio Case No. 11-11090). Ronald E. Gold, Esq., at
Frost Brown Todd LLC, serves as the Debtor's bankruptcy counsel.
The Debtor estimated its assets and debts at $10 million to
$50 million.
GLC LIMITED: Taps Frost Brown as Bankruptcy Counsel
---------------------------------------------------
GLC Limited asks for authorization from the U.S. Bankruptcy Court
for the Southern District of Ohio to employ Frost Brown Todd LLC
as bankruptcy counsel, effective as of the Petition Date.
Frost Brown will, among other things:
(a) provide assistance, advice and representation concerning
a plan in this Chapter 11 case, a disclosure statement
relating thereto, and the solicitation of consents to and
confirmation of the plan;
(b) advise the Debtor in connection with any sale of assets;
(c) provide assistance, advice and representation concerning
any further investigation of the assets, liabilities and
financial condition of the Debtor that may be required;
and
(d) represent the Debtor at hearings or matters pertaining to
its affairs as a debtor-in-possession.
Frost Brown will be paid based on the hourly rates of its
professionals:
Members $200-$500
Associates $160-$270
Paralegals $85-$180
Ronald E. Gold, Esq., a member at Frost Brown, assures the Court
that the firm is a "disinterested person" within the meaning of
section 101(14) of the Bankruptcy Code.
Proctorville, Ohio-based GLC Limited is principally a liquidation
company in the wholesale/retail distribution industry. It offers
large selections of name brand products in many categories. It
distributes its goods through a network of wholesale distributors,
retail chains and discount and surplus centers. It owns four
warehouses for its goods which are located in Proctorville and
Columbus, Ohio and Huntington, West Virginia.
GLC filed for Chapter 11 bankruptcy protection on Feb. 28, 2011
(Bankr. S.D. Ohio Case No. 11-11090). The Debtor estimated its
assets and debts at $10 million to $50 million.
GLOUCESTER ENGINEERING: Kabra Acquires 15% Ownership Stake
----------------------------------------------------------
Bill Bregar at Plastics News reports that Indian equipment
manufacturer Kabra Extrusiontechnik Ltd. has purchased a 15%
ownership stake in Gloucester Engineering Co.
As reported in the Troubled Company Reporter on Jan. 6, 2011,
following the exit of Gloucester from Chapter 11 protection, Blue
Wolf Capital Fund II became the majority equity shareholder of the
reorganized company.
Plastics News relates that Kabra's board of directors approved the
proposal to spend more than $4 million to acquire the minority
stake. With the stake, a representative of Kabra will sit on
Gloucester's board.
Kabra is part of Kolsite Group of Cos., which is publicly traded
on the Bombay Stock Exchange and the National Stock Exchange in
India.
Kabra will acquire a stake in Gloucester Engineering's equity and
debt and will provide additional capital resources, officials of
the company based in Gloucester said in a news release.
About Gloucester Engineering Co.
Since its inception in 1961, Gloucester Engineering Company has
been a global leader in advancing quality and production limits in
the plastics extrusion and converting market. GEC offers a range
of innovative system and component solutions, for both new lines
and retrofits, that provide customers a competitive edge in
applications that include bag making, foam and sheet extrusion,
blown and cast film extrusion, and extrusion coating.
GEC manufactures its equipment from its headquarters in
Gloucester, MA, USA and through its joint-venture company in
Damman, India, Kabra Gloucester Engineering.
Gloucester Engineering's Chapter 7 case -- filed on March 23, 2010
-- was converted to Chapter 11 bankruptcy protection on June 25,
2010 (Bankr. D. Mass. Case No. 10-12967). Gloucester emerged from
Chapter 11 on Dec. 31, 2010.
Gloucester Engineering Europe GmbH is the Vienna-based subsidiary
of Gloucester Engineering Co. In August 2010, creditors of
Gloucester Engineering Europe voted to accept a settlement offer
from the Gloucester, Massachusetts-based parent company to pay 30%
of the money owed them, or about EUR360,000 (US$503,000).
GOTTSCHALKS INC: Plan Declared Effective Feb. 28
------------------------------------------------
Gottschalks Inc.'s Chapter 11 plan of liquidation, as modified
Feb. 1, 2011, became effective in accordance with its terms on
Feb. 28, 2011.
The U.S. Bankruptcy Court for the District of Delaware entered an
order confirming the Plan on Feb. 18, 2011.
According to the confirmation notice, holders of administrative
claims arising after Aug. 24, 2009, must file administrative
expense requests not later than March 30, 2011. Holders of fee
claims under 11 U.S.C. Secs. 327, 328, 330, 331, 503(b) or 1103
for services rendered must file requests for payment by April 14,
2011.
The Plan provides for payment in full of administrative claims,
priority tax claims and General Electric Capital Corp.'s
prepetition claims, and leaves the claims unimpaired.
The holders of other secured claims, trade vendor claims, general
unsecured claims and interests and securities subordinated claims
are all impaired. The estimated recovery for the unsecured claims
is 3.8% to 13.3% of their $75.0 million to $105.04 million claims.
Holders of interests and securities subordinated claims will
receive nothing, and the existing stock and interests will be
cancelled.
The Plan was approved by holders of more than 99.5% of all secured
and unsecured claim amounts that voted.
A copy of the Plan, modified on Feb. 1, 2011, is available for
free at:
http://bankrupt.com/misc/GOTTSCHALKSINC_ModifiedPlan.pdf
About Gottschalks Inc.
Headquartered in Fresno, California, Gottschalks Inc. (Pink
Sheets: GOTTQ.PK) -- http://www.gottschalks.com/-- was a
department and specialty store chain in United States that
operated 58 full-line department stores and 3 specialty stories
in 6 western states.
The Company filed for Chapter 11 protection (Bankr. D. Del. Case
No. 09-10157) on Jan. 14, 2009. The Debtor disclosed
$288,438,000 in total assets and $197,072,000 in total debts as of
the Chapter 11 filing.
Stephen H. Warren, Esq., Karen Rinehart, Esq., Alexandra B.
Redwine, Esq., and Ana Acevedo, Esq., at O'Melveny & Myers LLP,
serve as the Debtor's bankruptcy counsel. Mark D. Collins, Esq.,
Michael J. Merchant, Esq., and Lee E. Kaufman, Esq., at Richards,
Layton & Finger, P.A., serve as the Debtor's co-counsel. The
Debtor selected Kurtzman Carson Consultants LLC as its claims
agent.
Attorneys for the Official Committee of Unsecured Creditors and
Post-Effective Date Committee are Lawrence Gottlieb, Esq. and
Michael Klein, Esq., at Cooley LLP, in New York; and Michael
Klein, Esq., at Benesch Friedlander Coplan & Aronoff, in
Wilmington, Delaware.
GREAT ATLANTIC & PACIFIC: Says Incentive Plan Needed to Keep Value
------------------------------------------------------------------
The Great Atlantic & Pacific Tea Co. and its units ask Judge
Robert Drain to overrule objections to the proposed Key Employee
Incentive Plan, saying it is "necessary to preserve stakeholder
value."
The United Food & Commercial Workers Union, the U.S. Trustee and
the Official Committee of Unsecured Creditors earlier opposed the
KEIP on grounds that its approval will adversely affect the
collective bargaining process and that the KEIP is a retention
plan because the performance targets cannot be reached since
business planning is incomplete, and the KEIP may reduce employee
attrition, among other reasons.
Ray Schrock, Esq., at Kirkland & Ellis LLP, in New York, said the
objecting parties did not dispute the Debtors' immediate need to
reverse declining sales growth and maintain top line
profitability.
"The evidence is undisputed that current trends are destructive
to stakeholder value if they go unchecked," Mr. Schrock said in
court papers. "The Debtors may survive if these trends continue,
but an opportunity will be lost and a need will remain."
Mr. Schrock further said that the objecting parties did not also
question the fact that market financial incentives drive employee
outperformance and that the KEIP awards are reasonable. He
pointed out that the KEIP is consistent with short-term
incentives used by the Debtors for more than 25 years and that
incentive compensation formerly made up a significant portion of
management's compensation package.
"Without incentive-based awards, compensation levels for KEIP
participants are currently below market, and the KEIP provides
awards that are in line with compensation opportunities provided
by peer firms," Mr. Schrock argued. He added that the KEIP
awards are also reasonable when measured against the value
created if the performance targets are achieved.
A group of debt holders represented by New York-based Brown
Rudnick LLP expressed support for the approval of the KEIP,
saying the terms of the incentive plan are "reasonable and
appropriately tailored to promote a value-accretive
restructuring."
Employee Wants Bonuses Denied
In a related development, an employee of the Debtors asked the
Court to deny the proposed payment of bonuses to employees under
the KEIP.
In a February 27 letter to Court, Noel Barboe criticized the
payment of $6.8 million worth of retention bonuses under the
KEIP.
"This is simply wasting money that could be more wisely spent to
save this organization," Mr. Barboe said in the letter.
Mr. Barboe also complained that while the Debtors seek to pay
bonuses to the "already high salaried employees" under the KEIP,
many of their employees have not enjoyed wage increases or
received bonuses for the past couple of years.
About A&P
Founded in 1859, Montvale, New Jersey-based Great Atlantic &
Pacific (A&P) is a leading supermarket retailer, operating under a
variety of well-known trade names, or "banners" across the mid-
Atlantic and Northeastern United States. It operates 395
supermarkets, combination food and drug stores, beer, wine, and
liquor stores, and limited assortment food stores in Connecticut,
Delaware, Massachusetts, Maryland, New Jersey, New York,
Pennsylvania, Virginia, and the District of Columbia. "Banners"
include A&P (101 stores), Food Basics (12 stores), Pathmark (128
stores), Super Fresh (57 stores), The Food Emporium (16 stores),
and Waldbaum's (59 stores).
A&P employs roughly 41,000 employees, including roughly 28,000
part-time employees. Roughly 95% of the workforce are covered by
collective bargaining agreements.
The Great Atlantic & Pacific Tea Company, Inc., and its affiliates
filed petitions under Chapter 11 of the U.S. Bankruptcy Code on
Dec. 12, 2010 (Bankr. S.D.N.Y. Case No. 10-24549) in White Plains.
As of Sept. 11, 2010, the Debtors reported total assets of
$2.5 billion and liabilities of $3.2 billion.
Paul M. Basta, Esq., James H.M. Sprayregen, Esq., and Ray C.
Schrock, Esq., at Kirkland & Ellis, LLP, in New York, and James J.
Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois,
serve as counsel to the Debtors. Kurtzman Carson Consultants LLC
is the claims and notice agent. Lazard Freres & Co. LLC is the
financial advisor. Huron Consulting Group is the management
consultant. Dennis F. Dunne, Esq., Matthew S. Barr, Esq., and
Abhilash M. Raval, Esq., at Milbank, Tweed, Hadley & McCloy LLP,
represent the Official Committee of Unsecured Creditors.
Bankruptcy Creditors' Service, Inc., publishes ATLANTIC & PACIFIC
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by A&P and its affiliates
(http://bankrupt.com/newsstand/or 215/945-7000).
GREAT ATLANTIC & PACIFIC: Fresh Market Opposes Assets Sale
----------------------------------------------------------
As reported in the Feb. 21, 2011 edition of the Troubled Company
Reporter, The Great Atlantic & Pacific Tea Company Inc. and its
affiliated debtors seek the Court's approval to implement
procedures for the sale, transfer or abandonment of so-called "de
minimis assets." The de minimis assets include surplus assets and
those assets which the Debtors consider obsolete, non-core or
burdensome. Under the proposed procedures, the Debtors can sell
or transfer their de minimis assets worth less than or equal to
$500,000 to a single buyer or a group without further court order
or notice.
In response, the Fresh Market Inc. asks the Court to deny approval
of the Debtors' motion to the extent it seeks to sell any assets
containing the so-called "Fresh Market designations," free and
clear of the obligation to comply with their settlement
agreement.
Fresh Market entered into the agreement with The Great Atlantic &
Pacific Tea Company Inc. to settle a lawsuit it filed against the
company for federal trademark infringement and unfair
competition.
Under the settlement deal, A&P agreed to cease from and avoid
using the Fresh Market designations including the use of the
terms "Fresh Market" and "Freshest Market" alone or as a part of
any single word when immediately followed by "Market," "Markets,"
or "Mart." The company also agreed to phase out its use of those
designations in connection with its Sav-A-Center supermarkets.
The motion also drew flak from Grays Ferry Partners LP, one of
the Debtors' landlords.
Pathmark Stores Inc., an affiliated debtor of A&P, leases from
Grays Ferry one of its stores located at the Grays Ferry Shopping
Center, in Philadelphia, Pennsylvania.
Grays Ferry criticized in particular the proposed process
governing the abandonment of de minimis assets, saying it
requires the landlord to incur substantial expenses to remove
abandoned assets from the leased facility. It also opposed the
abandonment of any assets at the leased facility.
About A&P
Founded in 1859, Montvale, New Jersey-based Great Atlantic &
Pacific (A&P) is a leading supermarket retailer, operating under a
variety of well-known trade names, or "banners" across the mid-
Atlantic and Northeastern United States. It operates 395
supermarkets, combination food and drug stores, beer, wine, and
liquor stores, and limited assortment food stores in Connecticut,
Delaware, Massachusetts, Maryland, New Jersey, New York,
Pennsylvania, Virginia, and the District of Columbia. "Banners"
include A&P (101 stores), Food Basics (12 stores), Pathmark (128
stores), Super Fresh (57 stores), The Food Emporium (16 stores),
and Waldbaum's (59 stores).
A&P employs roughly 41,000 employees, including roughly 28,000
part-time employees. Roughly 95% of the workforce are covered by
collective bargaining agreements.
The Great Atlantic & Pacific Tea Company, Inc., and its affiliates
filed petitions under Chapter 11 of the U.S. Bankruptcy Code on
Dec. 12, 2010 (Bankr. S.D.N.Y. Case No. 10-24549) in White Plains.
As of Sept. 11, 2010, the Debtors reported total assets of
$2.5 billion and liabilities of $3.2 billion.
Paul M. Basta, Esq., James H.M. Sprayregen, Esq., and Ray C.
Schrock, Esq., at Kirkland & Ellis, LLP, in New York, and James J.
Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois,
serve as counsel to the Debtors. Kurtzman Carson Consultants LLC
is the claims and notice agent. Lazard Freres & Co. LLC is the
financial advisor. Huron Consulting Group is the management
consultant. Dennis F. Dunne, Esq., Matthew S. Barr, Esq., and
Abhilash M. Raval, Esq., at Milbank, Tweed, Hadley & McCloy LLP,
represent the Official Committee of Unsecured Creditors.
Bankruptcy Creditors' Service, Inc., publishes ATLANTIC & PACIFIC
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by A&P and its affiliates
(http://bankrupt.com/newsstand/or 215/945-7000).
GREAT ATLANTIC & PACIFIC: Panel Has Klestadt as Conflicts Counsel
-----------------------------------------------------------------
The Official Committee of Unsecured Creditors in the Chapter 11
cases of The Great Atlantic & Pacific Tea Company Inc. and its
affiliated debtors seeks court approval to employ Klestadt &
Winters LLP as its conflicts counsel effective February 23, 2011.
The Creditors Committee tapped the services of Klestadt & Winters
to provide legal services in matters that are in conflict with
its lead bankruptcy counsel, Milbank Tweed Hadley & McCloy LLP.
Klestadt & Winters will work closely with Milbank and any other
professionals employed by the Creditors Committee to minimize any
unnecessary duplication of services, according to Patrick Healy,
vice-president of Wilmington Trust Company, one of the Creditors
Committee members.
Klestadt & Winters will be paid for its services on an hourly
basis and will be reimbursed of its expenses. The professionals
expected to be involved in the representation of the Creditors
Committee and their hourly rates are:
Professionals Hourly Rates
------------- ------------
Tracy Klestadt $595
Ian Winters $495
John Jureller Jr. $485
Fred Stevens $475
Sean Southard $450
Patrick Orr $425
Joseph Corneau $375
Brendan Scott $375
Carrie Hardman $250
Thomas Szaniawski $195
Meanwhile, the firm's paralegals and legal assistants will be
paid $150 per hour.
Tracy Klestadt, Esq., a partner at Klestadt & Winters, assures
the Court that her firm does not hold interest adverse to the
Creditors Committee and the Debtors' estates or their creditors,
and that the firm is a "disinterested person" as that term is
defined under Section 101(14) of the Bankruptcy Code.
About A&P
Founded in 1859, Montvale, New Jersey-based Great Atlantic &
Pacific (A&P) is a leading supermarket retailer, operating under a
variety of well-known trade names, or "banners" across the mid-
Atlantic and Northeastern United States. It operates 395
supermarkets, combination food and drug stores, beer, wine, and
liquor stores, and limited assortment food stores in Connecticut,
Delaware, Massachusetts, Maryland, New Jersey, New York,
Pennsylvania, Virginia, and the District of Columbia. "Banners"
include A&P (101 stores), Food Basics (12 stores), Pathmark (128
stores), Super Fresh (57 stores), The Food Emporium (16 stores),
and Waldbaum's (59 stores).
A&P employs roughly 41,000 employees, including roughly 28,000
part-time employees. Roughly 95% of the workforce are covered by
collective bargaining agreements.
The Great Atlantic & Pacific Tea Company, Inc., and its affiliates
filed petitions under Chapter 11 of the U.S. Bankruptcy Code on
Dec. 12, 2010 (Bankr. S.D.N.Y. Case No. 10-24549) in White Plains.
As of Sept. 11, 2010, the Debtors reported total assets of
$2.5 billion and liabilities of $3.2 billion.
Paul M. Basta, Esq., James H.M. Sprayregen, Esq., and Ray C.
Schrock, Esq., at Kirkland & Ellis, LLP, in New York, and James J.
Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois,
serve as counsel to the Debtors. Kurtzman Carson Consultants LLC
is the claims and notice agent. Lazard Freres & Co. LLC is the
financial advisor. Huron Consulting Group is the management
consultant. Dennis F. Dunne, Esq., Matthew S. Barr, Esq., and
Abhilash M. Raval, Esq., at Milbank, Tweed, Hadley & McCloy LLP,
represent the Official Committee of Unsecured Creditors.
Bankruptcy Creditors' Service, Inc., publishes ATLANTIC & PACIFIC
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by A&P and its affiliates
(http://bankrupt.com/newsstand/or 215/945-7000).
GRIFFON CORPORATION: Moody's Assigns 'Ba3' Corporate Family Rating
------------------------------------------------------------------
Moody's Investors Service has assigned Griffon Corporation Ba3
Corporate Family and Probability of Default Ratings. Moody's also
assigned a Baa3 rating to the company's $200 million senior
secured revolving credit facility, a Ba3 to the new $500 million
senior unsecured notes offering and a Speculative Grade Liquidity
Rating of SGL-2. The outlook is stable.
The proceeds from the notes offering are intended to refinance all
of the existing funded debt at Clopay Ames True Temper Holding
Corp. As such, upon repayment of the debt, all ratings at Clopay,
including the Corporate Family Rating, will be withdrawn.
Ratings Assigned:
Griffon Corporation
-- Corporate Family Rating at Ba3;
-- Probability of Default Rating at Ba3;
-- $200 million senior secured revolving credit facility
expiring 2016 at Baa3 (LGD 2, 10%);
-- $500 million senior notes due 2019 at Ba3 (LGD 4, 58%);
-- Speculative Grade Liquidity Rating at SGL-2;
The outlook is stable.
These Clopay ratings are affirmed, and will be withdrawn upon
closing of the Griffon transaction:
-- Corporate Family rating at B1;
-- Probability of Default rating at B1;
-- $125 million asset based revolving credit facility due 2015
at Ba1 (LGD 2, 10%)
-- $375 million first lien senior secured term loan due 2016 at
B1 (LGD 4, 53%)
Ratings Rationale
Griffon's Ba3 Corporate Family Rating reflects the company's
leading market position in many of its product segments and
Moody's expectation of moderate free cash flow and good liquidity
over the next year. The restructuring of the borrowing entities
and inclusion of Telephonics business adds additional
diversification as compared to the prior Clopay structure which
excluded Telephonics. Moody's expectations of increased volumes
in the plastics segment on new customer gains should further add
stability to the company's cash flows. The rating also reflects
Griffon's moderately high leverage (which is also high for the
rating category), its high single digit EBITA margins and
relatively modest revenue size within each of its operating
segments. The home and building segment had experienced top line
pressure, impacted by a prolonged slowdown in the housing market,
though volumes are beginning to increase again. The Telephonics
business, which specializes in radar and other surveillance
equipment mostly for US Government military application, faces
uncertain headwinds as the war in Iraq is scaled back gradually
and the government seeks areas for cutbacks in defense due to
deficit pressures.
The stable outlook reflects Moody's view that the company will
face minimal integration issues with Ames True Temper (acquired in
September of 2010), while improving credit metrics to levels more
appropriate for the Ba3 rating category.
An upgrade is unlikely over the near-term, given the company's
small revenue base for the rating category and a history of growth
through acquisitions. Over the medium term, a material expansion
of the revenue base and an improvement in credit metrics leading
to a sustained leverage in the 3 times range could result in a
rating upgrade.
The ratings could face downward pressure if revenues and
profitability weaken over the medium term such that leverage
reaches about 5 times. The rating could also be downgraded if the
company undertakes further debt financed acquisitions that
materially increase leverage.
Griffon Corporation is a diversified management and holding
company that conducts business through wholly-owned subsidiaries.
Griffon is a leading manufacturer of residential garage doors and
non-powered lawn and garden tools, through its operating
subsidiaries Clopay Building Products and Ames True Temper.
Through its Plastic Products Company it manufactures specialty
plastic films and laminates for hygienic, healthcare and
industrial end uses. Lastly, its Telephonics Corporation designs,
develops and manufactures high-technology, integrated information,
communication and sensor system solutions for use in military and
commercial markets worldwide. For the LTM period ending Dec. 31,
2010, the company reported revenue of approximately $1.8 billion
pro forma.
HARRY & DAVID: S&P Cuts Corporate to 'D' on Missed Payments
-----------------------------------------------------------
Standard & Poor's Ratings Services said that it lowered its
corporate credit rating on Medford, Ore.-based Harry & David
Operations Corp. to 'D' from 'CC'. The ratings are unsolicited.
S&P also lowered its ratings on the company's $70 million senior
floating-rate notes and $175 million unsecured fixed-rate notes to
'D' from 'C'. The '5' recovery rating on the notes remains
unchanged and it indicates S&P's expectation for modest (10%-30%)
recovery of principal in the event of a payment default.
The ratings on Harry & David reflect its missed interest payments
due March 1, 2011, on its $70 million senior floating-rate notes
and $175 million senior fixed-rate notes.
Following the release of results below expectations for the second
quarter ended Dec. 25, 2010, the company hired Rothschild Inc. and
Alvarez & Marsal as its financial advisors and Jones Day as legal
advisor to explore recapitalization alternatives.
The company is seeking to restructure its balance sheet and, in
S&P's view, could file for protection under Chapter 11.
This unsolicited rating(s) was initiated by Standard & Poor's. It
may be based solely on publicly available information and may or
may not involve the participation of the issuer. Standard &
Poor's has used information from sources believed to be reliable
based on standards established in S&P's Credit Ratings Information
and Data Policy but does not guarantee the accuracy, adequacy, or
completeness of any information used.
HEALTHSOUTH CORP: Completes Public Offering of $120MM Notes
-----------------------------------------------------------
On March 2, 2011, HealthSouth Corporation and certain of its
subsidiaries, as guarantors, entered into an underwriting
agreement with Merrill Lynch, Pierce, Fenner & Smith Incorporated,
Barclays Capital Inc., Citigroup Global Markets Inc., Goldman,
Sachs & Co. and Morgan Stanley & Co. Incorporated, as
representatives of the several underwriters named therein.
Pursuant to the Underwriting Agreement, the Company agreed to
issue and sell to the Underwriters, and the Underwriters have
agreed to purchase for resale to the public, an additional $60
million in aggregate principal amount of the Company's 7.25%
Senior Notes due Oct. 1, 2018 at a public offering price of
103.25% of the principal amount, and an additional $60 million in
aggregate principal amount of the Company's 7.75% Senior Notes due
Sept. 15, 2022 at a public offering price of 103.50% of the
principal amount. A full-text copy of the Underwriting Agreement
is available for free at http://ResearchArchives.com/t/s?74aa
On March 7, 2011, HealthSouth completed its registered public
offering of the Additional Notes, the terms of which will be
governed by the following previously executed agreements:
(i) the indenture, dated as of Dec. 1, 2009, between the
Company and The Bank of Nova Scotia Trust Company of New
York, as trustee;
(ii) the second supplemental indenture, dated Oct. 7, 2010,
among the Company, the subsidiary guarantors named therein
and the Trustee; and
(iii) the third supplemental indenture, dated Oct. 7, 2010, among
the Company, the subsidiary guarantors named therein and
the Trustee.
The Additional 2018 Notes mature on Oct. 1, 2018 and bear interest
at 7.250% per annum, payable semiannually in arrears on April 1
and Oct. 1, beginning on April 1, 2011. The Additional 2022 Notes
mature on Sept. 15, 2022 and bear interest at 7.750% per annum,
payable semiannually in arrears on March 15 and September 15,
beginning on March 15, 2011. The Additional Notes are jointly and
severally guaranteed on a senior, unsecured basis by all of the
Company's existing and future subsidiaries that guarantee
borrowings under its credit facility and other capital markets
debt. The Additional Notes and related guarantees rank equal in
right of payment to the Company's current and future senior debt
and senior in right of payment to any future subordinated debt.
The Additional Notes are effectively subordinated to the Company's
current and future secured debt, to the extent of the value of the
assets securing such debt, and any liabilities of the Company's
non-guarantor subsidiaries. The indentures relating to the
Additional Notes contain restrictive covenants that, among other
things, limit the Company's ability and the ability of certain of
its subsidiaries to, among other things, incur or guarantee
additional indebtedness; pay dividends on, or redeem or
repurchase, its capital stock; make investments; and merge,
consolidate, or transfer all or substantially all of its assets.
About HealthSouth Corp.
Birmingham, Alabama-based HealthSouth Corporation (NYSE: HLS) --
http://www.healthsouth.com/-- is the nation's largest provider of
inpatient rehabilitative healthcare services. Operating in 26
states across the country and in Puerto Rico, HealthSouth serves
patients through its network of inpatient rehabilitation
hospitals, long-term acute care hospitals, outpatient
rehabilitation satellites, and home health agencies.
The Company's balance sheet at Dec. 31, 2010 showed $2.37 billion
in total assets, $1.99 billion in current liabilities,
$387.40 million in commitments and contingencies, and a
$2.20 million shareholders' deficit.
HealthSouth carries a 'B1' corporate family rating with "stable"
outlook, from Moody's. It has 'B+' foreign and local issuer
credit ratings, with "positive" outlook, from Standard & Poor's.
HEALTHSOUTH CORP: Files Prospectus for $120-Mil. Notes Offering
---------------------------------------------------------------
Healthsouth Corp filed with the U.S. Securities and Exchange
Commission a free writing prospectus regarding its $120 million
notes offering. The Offering is composed of $60 million 7.250%
Senior Notes due 2018 and $60 million 7.750% Senior Notes due
2022.
The Joint Book-Running Managers are:
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Barclays Capital Inc.
Citigroup Global Markets Inc.
Goldman, Sachs & Co.
Morgan Stanley & Co. Incorporated
The Co-Managers are:
RBC Capital Markets, LLC
SunTrust Robinson Humphrey, Inc.
Wells Fargo Securities, LLC
A full-text copy of the prospectus is available for free at:
http://ResearchArchives.com/t/s?749c
About Healthsouth Corp.
Birmingham, Alabama-based HealthSouth Corporation (NYSE: HLS) --
http://www.healthsouth.com/-- is the nation's largest provider of
inpatient rehabilitative healthcare services. Operating in 26
states across the country and in Puerto Rico, HealthSouth serves
patients through its network of inpatient rehabilitation
hospitals, long-term acute care hospitals, outpatient
rehabilitation satellites, and home health agencies.
The Company's balance sheet at Dec. 31, 2010 showed $2.37 billion
in total assets, $1.99 billion in current liabilities,
$387.40 million in commitments and contingencies, and a
$2.20 million shareholders' deficit.
HealthSouth carries a 'B1' corporate family rating with "stable"
outlook, from Moody's. It has 'B+' foreign and local issuer
credit ratings, with "positive" outlook, from Standard & Poor's.
ICOP DIGITAL: Safety Vision Completes Acquisition
-------------------------------------------------
The Kansas City Business Journal reports that Safety Vision LLC
has completed its acquisition of ICOP Digital Inc. and said it
plans to begin serving customers left in the lurch after ICOP
ceased operations in December.
According to the report, ICOP will become a wholly owned
subsidiary of Safety Vision and will allow the larger company to
expand its law enforcement business. ICOP sells video
surveillance equipment to police departments, sheriff's offices,
the Department of Homeland Security and other security agencies.
Safety Vision spokeswoman Melissa Foteh said it was undetermined
whether ICOP will retain a presence in Lenexa or whether the
company plans to rehire any former ICOP employees, the Journal
says.
About ICOP Digital
Founded in 2002, ICOP Digital Inc. sells surveillance equipment
for law enforcement agencies.
Lenexa, Kansas-based ICOP Digital filed for Chapter 11 protection
in Kansas City (Bankr. D. Kan. Case No. 11-20140) on Jan. 21,
2011. In its Schedules of Assets and Liabilities, the Debtor
disclosed assets of $1.67 million and debt of $2.74 million.
The balance sheet as of Sept. 30 had assets on the books for
$6.7 million and total liabilities of $4.3 million, according to
Mr. Rochelle.
Joanne B. Stutz, Esq., at Evans & Mullinix PA, in Shawnee, Kansas,
represents the Debtor.
IMPLANT SCIENCES: Restates 2009 Financial Statements Due to Errors
------------------------------------------------------------------
Implant Sciences Corporation filed with the Securities and
Exchange Commission an amended quarterly report on Form 10-Q for
the quarter ended Sept. 30, 2009, which was initially filed on
Nov. 13, 2009. The amendment is being filed to restate the
Company's consolidated statements at, and for the three months
ended Sept. 30, 2009.
On Oct. 14, 2010, the Audit Committee of the Company's Board of
Directors, in consultation with the Company's management,
determined that the condensed consolidated financial statements
included in the Company's Quarterly Report on Form 10-Q for the
fiscal quarters ended Sept. 30, 2009, Dec. 31, 2009 and March 31,
2010 should no longer be relied on due to issues raised by the
Company's independent accountants, Marcum LLP, regarding errors in
the Company's adoption of Accounting Standards Codification 815-
40-15 "Derivatives and Hedging" related to the non-cash accounting
treatment of financial instruments which are not deemed to be
indexed to the Company's common stock. ASC 815-40-15 requires
issuers to record, as liabilities, financial instruments that
provide for reset provisions as an adjustment mechanism to the
relevant exercise or conversion price, since they are not deemed
to be indexed to the Company's common stock. Further, the Company
is restating the aforementioned quarters to record, as of July 1,
2009 and Aug. 31, 2009, the commitment dates of the Company's
Series F Convertible Preferred Stock, to record the deemed
dividend resulting from the beneficial conversion feature
contained in the Series F Convertible Preferred Stock.
On Dec. 10, 2008, the Company entered into a note and warrant
purchase agreement with DMRJ Group LLC, pursuant to which the
Company issued a senior secured convertible promissory note in the
principal amount of $5,600,000 and a warrant to purchase 1,000,000
shares of the Company's common stock. The promissory note and
warrant were each amended and restated as of March 12, 2009. Both
the promissory note and the warrant contain reset provisions, in
the event that the Company issues additional shares of common
stock at a price below the amended conversion price then in
effect, the conversion price of the promissory note and the
exercise price of the warrant will be automatically adjusted to
equal the price per share at which such shares are issued or
deemed to be issued. The Company determined that the conversion
option and the warrant derivative liability should initially and
subsequently be measured at fair value with changes in fair value
recorded in earnings in each reporting period and will record a
cumulative-effect adjustment to the opening balance of accumulated
deficit at July 1, 2009.
On July 1, 2009, the Company adopted the provisions of ASC 815-40-
15. In accordance with ASC 815-40-15, the cumulative effect of
the change in accounting principle recorded by the Company in
connection with a warrant to purchase shares of the Company's
common issued to DMRJ and the reset provision contained in the
senior secured promissory note the Company issued to DMRJ, was
recorded as an adjustment of the opening balance of accumulated
deficit. Upon adoption of ASC 815-40-15 at July 1, 2009, the
Company recorded a fair value note conversion option liability of
$1,183,000 resulting in a $802,000 adjustment to the opening
balance of accumulated deficit.
On July 1, 2009, in connection with the issuance of the $1,000.000
senior secured note, the Company also issued 871,763 shares of the
Company's Series F Convertible Preferred Stock to DMRJ, and agreed
that, if the Company were unable to obtain net proceeds of at
least $3,000,000 from the issuance of debt or equity securities by
Aug. 31, 2009, the Company would issue 774,900 additional shares
of Series F Preferred Stock to DMRJ. DMRJ later extended this
deadline until Oct. 1, 2009. The Company did not satisfy this
requirement and issued those additional shares to DMRJ. In
accordance with Accounting Standards Codification 470-20 "Debt", a
conversion feature is beneficial, or "in the money," when the
conversion rate of the convertible security is below the market
price of the underlying common stock. The beneficial conversion
feature is treated as a deemed dividend to the preferred
shareholders.
The restated statement of operations reflects a net loss of $1.37
million on $1.82 million of revenue for the three months ended
Sept. 30, 2009, compared with net income of $356,000 on $5.95
million of revenue for the same period during the prior year.
The Company's restated balance sheet at Sept. 30, 2009 showed $7
million in total assets, $13.92 million in total liabilities, $5
million in commitments and contingencies and $11.92 million in
total stockholders' deficit.
A full-text copy of the restated quarterly report is available for
free at http://ResearchArchives.com/t/s?749f
About Implant Sciences
Implant Sciences Corporation (OBB: IMSC.OB) --
http://www.implantsciences.com/-- develops, manufactures and
sells sensors and systems for the security, safety and defense
(SS&D) industries.
The Company's balance sheet at June 30, 2010 showed $4.96 million
in total assets, $30.10 million in total liabilities and $25.14
million in total stockholders' deficit.
The audit report issued by the Company's independent registered
public accounting firm issued on the Company's audited financial
statements for the fiscal year ended June 30, 2010 contains a
qualification regarding the Company's ability to continue as a
going concern. This qualification indicates there is substantial
doubt on the part of the Company's independent registered public
accounting firm as to its ability to continue as a going concern
due to the risk that the Company may not have sufficient cash and
liquid assets at June 30, 2010, to cover the Company's operating
capital requirements for the next twelve-month period and if
sufficient cash cannot be obtained the Company would have to
substantially alter its operations, or it may be forced to
discontinue operations.
IMS HEALTH: S&P Assigns 'BB' Rating to Senior Secured Debt
----------------------------------------------------------
Standard & Poor's Ratings Services said that it assigned its 'BB'
senior secured debt rating to IMS' announced upsizing of both its
senior secured revolver, to $375 million from $275 million, and
its $100 million delayed draw senior secured term loan. The
recovery rating is '2', indicating substantial (70% to 90%)
recovery prospects in the event of a default. The maturity on the
revolver will be extended to Feb. 26, 2016 from Feb. 26, 2015; the
term loan maturity will be extended one year, to Aug. 26, 2017.
S&P also affirmed its existing ratings on IMS Health, including
its 'BB-' corporate credit rating, on the company. The rating
outlook remains stable.
"The ratings on IMS Health reflect the company's aggressive
financial risk profile, highlighted by its adjusted debt leverage
of more than 5x (following its leveraged buyout in 2010) and
uncertain financial policy given the sponsor ownership," said
Standard & Poor's credit analyst Arthur Wong. It also reflects
the difficult, although S&P believes improving, industry
conditions for outsourced pharmaceutical services, especially on
the consulting side of the business. IMS Health's satisfactory
business risk profile, supported by its well-established
leadership position in the pharmaceutical industry information
market, enables it to generate the solid free cash flows that
should enable the company to steadily reduce debt.
IMS is the leading provider of pharmaceutical market intelligence.
The company's offerings are divided into two businesses: the core
information and analytics business (roughly 75% of revenues), and
the newer consulting business (25%). The information and
analytics business primarily measures prescription drug data and
reports a company's effectiveness in its commercialization
efforts, and its market size and share. The consulting business
offers services including maximizing commercial performance of
drugs, optimizing pricing strategies, and conducting analytics
along the entire pharmaceutical chain.
INFINITE SWANS: Voluntary Chapter 11 Case Summary
-------------------------------------------------
Debtor: Infinite Swans, LLC
2062 East Walker Lane
Holladay, UT 84117
Bankruptcy Case No.: 11-22880
Chapter 11 Petition Date: March 7, 2011
Court: U.S. Bankruptcy Court
District of Utah (Salt Lake City)
Judge: R. Kimball Mosier
Debtor's Counsel: Jeremy D. Eveland, Esq.
EVELAND & ASSOCIATES, PLLC
8833 South Redwood Road, Suite C-2
West Jordan, UT 84088
Tel: (801) 676-5506
Fax: (801) 676-5508
E-mail: jeremy@evelandlawfirm.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Company did not file a list of creditors together with its
petition.
The petition was signed by Kerri L. Macey, manager.
INTEGRAL ADVISORY: Voluntary Chapter 11 Case Summary
----------------------------------------------------
Debtor: Integral Advisory Associates, LLC
43 Leopard Road
Paoli Executive Green II, Suite 200
Paoli, PA 19301
Bankruptcy Case No.: 11-16899
Chapter 11 Petition Date: March 8, 2011
Court: U.S. Bankruptcy Court
District of New Jersey (Newark)
Debtor's Counsel: Ilana Volkov, Esq.
COLE, SCHOTZ, MEISEL, FORMAN & LEONARD
25 Main Street
Hackensack, NJ 07601
Tel: (201) 489-3000
Fax: 201-489-1536
E-mail: ivolkov@coleschotz.com
Scheduled Assets: $0
Scheduled Debts: $10,623,514
The list of unsecured creditors filed together with its petition
does not contain any entry.
The petition was signed by Ronald J. Lissak, managing member.
Debtor affiliates that filed for Chapter 11 on Feb. 3, 2011.
Entity Case No.
------ --------
Integral Nuclear Associates, LLC 11-13066
Doylestown PET Associates, LLC 11-13067
Imaging Technology Associates, LLC 11-13068
Integral Mobile PET/CT, LLC 11-13070
Integral PET Associates, LLC 11-13072
Integral PET Holdings, LLC 11-13075
Integral PET Holdings II, LLC 11-13076
P&K Equity Group, Inc. 11-13077
Limerick PET Associates, LLC 11-13078
Meadowbrook PET Associates, LLC 11-13080
Mobile PET/CT Associates, LLC 11-13082
Nuclear Management, Inc.
f/k/a Integral PET Center, Inc. 11-13083
Pennsylvania PET Associates, LLC 11-13085
Previous Chapter 11 filings by the debtors and their affiliates:
Entity Case No. Petition Date
------ -------- -------------
Integral Nuclear Associates, LLC 07-15183 04/15/07
Abington Nuclear Imaging, LLC 07-15186 04/16/07
Adirondack PET Associates, LLC 07-15187 04/16/07
Atwood Nuclear Imaging, LLC 07-15188 04/16/07
Chester County PET Associates, LLC 07-15189 04/16/07
Doylestown PET Associates, LLC 07-15190 04/16/07
Englewood PET Associates, LLC 07-15191 04/16/07
Forest Hills PET Associates, LLC 07-15204 04/16/07
Havertown PET Associates, LLC 07-15196 04/16/07
Imaging Technology Associates, LLC 07-15192 04/16/07
Integral Advisory Associates, LLC 07-15194 04/16/07
Integral Financial Corporation 07-15197 04/16/07
Integral Mobile PET Associates, LLC 07-15198 04/16/07
Integral Mobile PET/CT, LLC 07-15215 04/16/07
Integral PET Associates, LLC 07-15200 04/16/07
Integral PET Holdings, LLC 07-15201 04/16/07
Integral PET Holdings II, LLC 07-15203 04/16/07
ITA Holdings, LLC 07-15202 04/16/07
Limerick PET Associates, LLC 07-15205 04/16/07
Meadowbrook PET Associates, LLC 07-15206 04/16/07
Mobile PET/CT Associates, LLC 07-15207 04/16/07
Nuclear Management, Inc. 07-15208 04/16/07
f/k/a Integral PET Center, Inc.
Pennsylvania PET Associates, LLC 07-15209 04/16/07
R.J. Management Associates, LLC 07-15210 04/16/07
Wyoming Valley PET Associates, LLC 07-15213 04/16/07
KRE, LLC.: Case Summary & 7 Largest Unsecured Creditors
-------------------------------------------------------
Debtor: KRE, LLC.
16 & 26 South 16th Street
Fargo, ND 58103
Bankruptcy Case No.: 11-30227
Chapter 11 Petition Date: March 8, 2011
Court: U.S. Bankruptcy Court
District of North Dakota (Fargo)
Debtor's Counsel: David L. Johnson, Esq.
MCNAIR, LARSON & CARLSON, LTD.
51 Broadway, Suite 600
P.O. Box 2189
Fargo, ND 58108-2189
Tel: (701) 293-9190
Fax: (701) 241-9107
E-mail: david.johnson@mlcfargolaw.com
Scheduled Assets: $839,963
Scheduled Debts: $6,177,396
A list of the Company's seven largest unsecured creditors
filed together with the petition is available for free
at http://bankrupt.com/misc/ndb11-30227.pdf
The petition was signed by Edwin Yeh, manager.
LACK'S STORES: Customer Note Payments, GOB Sales Exceed Targets
---------------------------------------------------------------
As authorized by the bankruptcy court, and with the assistance of
Hilco Merchant Resources, LLC, Lack's Stores Inc. and its
affiliates conducted store closing sales at all 36 Lacks Home
Furnishings, Inc. stores in Texas. The store closing sales lasted
eight weeks and concluded, ahead of schedule, on Jan. 16, 2011.
The Debtor said in a status report filed with the bankruptcy court
on March 8 that cash and credit card receipts during the store
closing sales totaled $34,654,000, exceeding projected receipts by
approximately $12,214,000. The cumulative gross margin was
approximately 28%.
Collection of Customer Notes
Lack's also said in the status report that it has continued its
regular collection of its portfolio of customer notes in the
ordinary course of business. Collections for the 15-week period
ended on Feb. 25, 2011, totaled $29,599,000, placing them
$6,344,000 ahead of projections.
Many of their customers historically made their regular payments
in person at the Debtors' various store locations. Given that the
Debtors have closed all of their store locations, the Debtors have
made arrangements for certain HEB and Wal-Mart locations to
accept, as the Debtors' agent, "in store" payments on customer
notes. Collections from HEB and Wal-Mart locations continue to
improve during the month of March 2011 as more customers become
aware of this payment option.
In addition, the Debtors continue to be proactive in educating
customers on other alternative payment arrangements, including
sending periodic letters to customers educating them on their
various payment options such as payments by direct mail, online,
and by automatic draft. The Debtors are optimistic that these
efforts will enable the level of collections on customer notes to
remain well within or above projections.
Disbursements
The Debtor also said that for the 15-week period ended Feb. 25,
2011, actual operating disbursements totaled approximately
$27,223,000, as compared with projected operating disbursements of
$27,989,000.
Cash Position
As of Feb. 25, 2011, the Debtors' closing cash position was
approximately $13,600,000 ($14,181,000 ahead of the projected week
cumulative cash position). This book cash position is primarily a
consequence of significantly higher than projected merchandise
sales and customer note collections and slightly lower than
projected operating disbursements.
About Lack's Stores
Victoria, Texas-based Lack's Stores, Incorporated, is one of the
largest, independently-owned retail furniture chains in the United
States. Lack's Stores is a chain of 36 retail stores and operates
under the trade styles Lacks and Lacks Home Furnishings. The
Company sells a complete line of furnishings for the home
including furniture, bedding, major appliances and home
electronics. The stores are located in South, Central, and West
Texas.
Lack's Stores and its affiliates filed for Chapter 11 bankruptcy
protection (Bankr. S.D. Tex. Lead Case No. 10-60149) on Nov. 16,
2010. The Debtor estimated its assets and debts at $100 million
to $500 million.
Katherine D. Grissel, Esq., Michaela Christine Crocker, Esq., and
Richard H. London, Esq., at Vinson & Elkins LLP, serve as counsel
to the Debtor. Huron Consulting Group, Inc., is the financial
advisor. Kurtzman Carson Consultants is the claims and notice
agent.
The Official Committee of Unsecured Creditors formed in the
Chapter 11 case is represented by attorneys at Platzer, Swergold,
Karlin, Levine, Goldberg & Jaslow, LLP, and Strong Pipkin Bissell
& Ledyard, L.L.P.
LACK'S STORES: Signs Sale Contracts for Six Properties
------------------------------------------------------
Lack Properties, Inc., a wholly owned subsidiary of Lack's Stores
Inc., is the owner of the real property and improvements
associated with approximately 14 store and warehouse locations
that are leased to Lack's. The Debtors have hired DJM Realty
Services, LLC to act as their real estate consultant and advisor.
The Court has approved bid procedures with respect to the Debtors'
leased and owned real property interests.
According to a status report filed March 8, DJM has been in
contact with numerous potential purchasers with respect to the
sale of real property owned by Lack Properties and has negotiated
(or is in the process of negotiating) proposed sales of multiple
locations. To this end, the Debtors have obtained signed sales
contracts on six properties. Two of those signed contracts are
still in the due diligence stage, and, in accordance with the sale
procedures, the Debtors have filed notices of sale procedures,
auction date, and sale hearing with respect to the properties
relating to the four remaining signed contracts.
Three of the proposed sale transactions were approved at the Sale
hearings on March 2, 2011, and one proposed sale transaction is
set for hearing on March 16, 2011. The three contracts that have
been approved are expected to close this week and next week and
will generate gross proceeds of approximately $4,937,000, with net
proceeds to the bankruptcy estate (after payment of commissions
and of senior liens) of approximately $3,606,000.
The Debtors and DJM are also in discussions with potential
purchasers relating to Lack Properties' other owned real
properties. The Debtors anticipate presenting additional sales to
the Court for approval in the coming months.
About Lack's Stores
Victoria, Texas-based Lack's Stores, Incorporated, is one of the
largest, independently-owned retail furniture chains in the United
States. Lack's Stores is a chain of 36 retail stores and operates
under the trade styles Lacks and Lacks Home Furnishings. The
Company sells a complete line of furnishings for the home
including furniture, bedding, major appliances and home
electronics. The stores are located in South, Central, and West
Texas.
Lack's Stores and its affiliates filed for Chapter 11 bankruptcy
protection on November 16, 2010 (Bankr. S.D. Tex. Lead Case No.
10-60149). The Debtor estimated its assets and debts at
$100 million to $500 million.
Katherine D. Grissel, Esq., Michaela Christine Crocker, Esq., and
Richard H. London, Esq., at Vinson & Elkins LLP, serve as counsel
to the Debtor. Huron Consulting Group, Inc., is the financial
advisor. Kurtzman Carson Consultants is the claims and notice
agent.
The Official Committee of Unsecured Creditors formed in the
Chapter 11 case is represented by attorneys at Platzer, Swergold,
Karlin, Levine, Goldberg & Jaslow, LLP, and Strong Pipkin Bissell
& Ledyard, L.L.P.
LACK'S STORES: Reaches Settlement With CIT Group on Cash Use
------------------------------------------------------------
According to a status report filed March 8, 2011, Lack's Stores
Inc. says that it has continued to work on a regular basis with
the professionals of CIT Group / Business Credit, Inc., the agent
to the senior lenders with respect to their many requests for
financial and operational information and access to the Debtors'
representatives. The Debtors have hosted various representatives
of Capstone Advisory Group LLC, the Agent's financial advisor, in
the Debtors' offices in Victoria.
Lenders led by CIT Group, owed $86,000,000 as of the Petition Date
under a revolving credit facility, assert liens on substantially
all of the Debtors' assets excluding certain real estate.
Since the Petition Date, the Debtors have made payments to the
Senior Lenders totaling $24,405,678 consisting of (a) weekly loan
pay-downs in the amount of $500,000 per week ($7,500,000 aggregate
to date); (b) additional pay-downs in the amount of $5,000,000 on
December 16, 2010, $5,000,000 on Jan. 14, 2011, $3,000,000 on
January 28, 2011, and $2,000,000 on Feb. 18, 2011 ($15,000,000
aggregate to date); and (c) interest payments for the months of
December, January, February, and March.
The Debtors have also spent a significant amount of time in
responding to a motion by CIT to compel payment of cash collateral
pursuant to 11 U.S.C. Secs. 362(d) and 363(e).
In January, CIT filed a motion asking the bankruptcy court to lift
the automatic stay and compel the Debtors to pay the excess
proceeds of the liquidation of the retail locations to CIT. CIT
claims that the Debtors have no equity in the existing proceeds of
the liquidation, as "the senior debt is significantly in excess of
the amount of those proceeds".
The Debtors objected, noting that the Court has previously found
that the senior lenders are more than adequately protected by a
substantial equity cushion. The Debtors noted that they have paid
the Senior Lenders approximately $22.8 million in adequate
protection and interest payments while maximizing the value of
their collateral and converting it to cash, which cash remains the
Senior Lenders' collateral. The Debtors say they are on track
for a successful, orderly liquidation of the estates that will
satisfy in full the Senior Lenders' claims and likely the claims
of all other creditors, with a return available to equity-holders.
In connection with the CIT Motion, depositions were conducted on
March 3, 2011. The CIT Motion is set for hearing on March 9, 2011.
The Debtors said in their March 8 status report that in
consultation with the Official Committee of Unsecured Creditors,
they have reached a settlement on the CIT Motion and the Debtors'
pending motion to use cash collateral. The Debtors said the
settlement will be presented to the Court at the time of the
hearing.
Terms of the Settlement were not disclosed in the March 8 status
report.
Third Interim Order
Judge Jeff Bohm last month entered a third order authorizing the
Lack's Stores Inc. to use cash collateral. The Debtor was
scheduled to hold a final hearing on March 9 to consider access to
cash collateral. The Debtor will have access to cash that
constitute as CIT's cash collateral through the conclusion of the
final hearing. A copy of the four-week cash collateral use budget
ending March 11, 2011 is available at no charge at
http://bankrupt.com/misc/LacksStores_3rdBudget.pdf
About Lack's Stores
Victoria, Texas-based Lack's Stores, Incorporated, is one of the
largest, independently-owned retail furniture chains in the United
States. Lack's Stores is a chain of 36 retail stores and operates
under the trade styles Lacks and Lacks Home Furnishings. The
Company sells a complete line of furnishings for the home
including furniture, bedding, major appliances and home
electronics. The stores are located in South, Central, and West
Texas.
Lack's Stores and its affiliates filed for Chapter 11 bankruptcy
protection on November 16, 2010 (Bankr. S.D. Tex. Lead Case No.
10-60149). The Debtor estimated its assets and debts at
$100 million to $500 million.
Katherine D. Grissel, Esq., Michaela Christine Crocker, Esq., and
Richard H. London, Esq., at Vinson & Elkins LLP, serve as counsel
to the Debtor. Huron Consulting Group, Inc., is the financial
advisor. Kurtzman Carson Consultants is the claims and notice
agent.
The Official Committee of Unsecured Creditors formed in the
Chapter 11 case is represented by:
Clifford A. Katz, Esq.
Sherri D. Lydell, Esq.
PLATZER, SWERGOLD, KARLIN, LEVINE, GOLDBERG & JASLOW, LLP
1065 Avenue ofthe Americas - 18th Floor
New York, New York 10018
Telephone: (212) 593-3000
Fax: (212) 593-0353
E-mail: ckatz@platzerlaw.com
slydell@platzerlaw.com
- and -
S. Margie Venus, Esq.]
STRONG PIPKIN BISSELL & LEDYARD, L.L.P.
1301 McKinney Street, Suite 2100
Houston, Texas 77010
Tel: 713-210-5030
Fax: 713-651-1920
E-mail: mvenus@strongpipkin.com
CIT Group is represented by:
Robert W. Jones, Esq.
Brent R. McIlwain, Esq.
PATTON BOGGS LLP
2000 McKinney, Suite 1700
Dallas, Texas 75201
Tel: 214-758-1500
Fax: 214-758-1550
LBI MEDIA: Moody's Assigns 'B2' Rating to Senior Secured Notes
--------------------------------------------------------------
Moody's Investors Service assigned a B2 rating to LBI Media, Inc's
proposed senior secured note offering. Concurrently, Moody's also
affirmed LBI's Caa1 Corporate Family Rating and the Caa2 rating on
its $229 million of 8.5% senior subordinated notes. LBI plans to
issue up to $240 million of new senior secured notes to refinance
outstanding indebtedness under its existing bank credit facilities
and potentially repay its $42 million of 11% senior discount notes
(unrated). The B1 ratings for LBI's existing revolving and term
loan facilities will be withdrawn upon full repayment of the
facilities at the close of the transaction. The outlook for the
ratings is stable.
Moody's has taken these rating actions:
* Proposed $240 million Senior Secured Notes due 2019 -- Assigned
B2 (LGD3, 31%)
* Corporate Family Rating -- Affirmed at Caa1
* Probability of Default Rating -- Affirmed at Caa1
* $228.8 million of 8.5% senior subordinated notes due July 2017 -
- Affirmed at Caa2 (LGD5, 81%)
* $150 million Revolving Credit Facility due March 2012 --
Unchanged at B1 (LGD2, 21%), to be subsequently withdrawn
* $114.5 million Term Loan Facility due June 2012 -- Unchanged at
B1 (LGD2, 21%), to be subsequently withdrawn
Ratings are subject to the execution of the proposed transaction
and Moody's review of final documentation.
Ratings Rationale
Affirmation of LBI's Caa1 corporate family rating reflects Moody's
view that despite the rebound in financial results in 2010 coupled
with expectations for solid revenue and EBITDA growth in 2011, as
principally driven by expanded coverage for its Estrella TV
network, LBI's credit profile remains constrained by the Company's
very high debt leverage and weak interest coverage (the latter
made worse by higher associated debt service costs under the
proposed refinancing).
The Caa1 primarily reflects LBI's high financial risk stemming
from its highly levered capital structure (pro forma Moody's
adjusted debt-to-EBITDA of approximately 11.7x), thin interest
coverage (EBITDA less Capex to interest expense of under 1.0x),
and negative free cash flows. Additionally, the rating is also
constrained by the Company's modest size relative to much larger
and better capitalized peers and the vulnerability of its
financial results to cyclical advertising spending. The ratings
are supported, however, by LBI's solid rating performance and
audience share within its core Spanish-language radio and TV
markets, and expanded coverage for its Estrella TV network, which
combined with continued favorable growth trends in the U.S.
Hispanic population and advertising spend targeting this
demographic will likely drive revenue and cash flow growth and
ultimately enhance the value of LBI.
The stable rating outlook incorporates Moody's view that despite
Moody's expectation that LBI will benefit from improved macro
conditions and an ongoing rebound in advertising spending, as well
as continued market penetration of its Estrella TV network into
new and existing affiliate markets over the next 12-18 month
period, financial leverage will likely remain very high (above
10.0x) and free cash flow growth prospects will remain challenged
due to increased interest expense under the proposed refinancing.
Moody's notes that to the extent that LBI is unable to
successfully complete the proposed transaction and refinance its
bank credit facilities maturing March 2012 on reasonably
economically attractive terms, the Company's liquidity profile
would arguably be construed as "very weak" and this would likely
lead to a negative outlook and/or potentially negative rating
revisions. Moreover, downward rating pressure could develop if
LBI's liquidity position in general deteriorates and/or its credit
metrics begin to weaken from current levels.
Moody's could consider a positive outlook and/or rating action to
the extent LBI is able to demonstrate through a combination of
revenue and EBITDA growth and permanent debt reduction such that
leverage is sustained comfortably below 8x debt-to-EBITDA (Moody's
adjusted) and is trending towards 7x or lower, interest coverage
(EBITDA -- Capex to Interest) improves to the 1.5x-range, and free
cash flow turns positive and grows to a range approximating 5% of
Moody's adjusted debt.
The last rating action occurred on August 10, 2010 when Moody's
affirmed LBI's Caa1 CFR and changed the rating outlook to stable
from negative.
Headquartered in Burbank, California, LBI Media, Inc, operates
Spanish-language radio and TV stations including 21 radio
stations, nine TV stations, and the Estrella TV Network, a
Spanish-language television broadcast network in the U.S. Its
annual revenues for 2010 were approximately $116 million.
LBI MEDIA: S&P Assigns Ratings to Proposed Senior Notes at 'B-'
---------------------------------------------------------------
Standard & Poor's Ratings Services said it assigned LBI Media
Inc.'s proposed first-lien senior secured notes due 2019 S&P's
issue-level rating of 'B-' (at the same level as the 'B-'
corporate credit rating on the company). The recovery rating on
this debt is '3', indicating S&P's expectation of meaningful (50%
to 70%) recovery for lenders in the event of a payment default.
At the same time, S&P affirmed its existing ratings on LBI Media,
including its 'B-' corporate credit rating. The rating outlook is
stable.
Standard & Poor's 'B-' ratings reflect its expectation that EBITDA
coverage of interest will remain thin pro forma for the
transaction, and that the company will continue to generate
negative discretionary cash flow in 2011 on account of higher
interest expense and the continued ramp-up in the Estrella TV
network. "However," said Standard & Poor's credit analyst Michael
Altberg, "we believe that the company will have adequate liquidity
over the next 12-18 months provided by full availability under the
proposed $50 million revolving credit facility."
Other risks include the company's highly leveraged capital
structure, cash flow concentration in a small number of large U.S.
Hispanic markets, intense competition for audiences and
advertisers from much larger rivals, and financial risk associated
with launching a startup operation while pursuing debt-financed
acquisitions. The company's position as a niche operator of
Spanish-language radio and TV stations, healthy EBITDA margin
relative to peers, upside potential from Estrella TV (which has
good audience ratings for a start-up network), and broadly
favorable Spanish-language advertising trends are modest positive
factors that do not offset these risks.
The stable rating outlook reflects Standard & Poor's expectation
that LBI Media's operating performance is improving, partly
because of Estrella TV's increasing contribution, and that the
company should have adequate liquidity over the next 12-18 months
due to sufficient availability under the revolving credit
facility. "We view a rating elevation as slightly more likely
than a downgrade, but not over the near term," said Mr. Altberg.
"We could upgrade the company if it is able to reduce and sustain
lease-adjusted leverage and increase EBITDA coverage of interest.
Conversely, S&P could lower the rating if the availability under
the revolving credit facility narrows."
LECG CORP: Eagle Boston Discloses 0.05% Equity Stake
----------------------------------------------------
In an amended Schedule 13G filing with the U.S. Securities and
Exchange Commission, Eagle Boston Investment Management disclosed
that it beneficially owns 19,353 shares of common stock of LECG
Corporation representing 0.05% of the shares outstanding.
As of Oct. 29, 2010, there were 38,227,343 shares of the Company
common stock outstanding.
About LECG
LECG is a global litigation; economics; consulting and business
advisory; and governance, assurance, and tax expert services firm
with approximately 1,100 employees in offices around the world.
LECG and certain of its subsidiaries are parties to a Credit
Agreement dated as of May 15, 2007, as amended, with the Bank of
Montreal and the syndicate bank members under the Credit
Agreement. On Feb. 28, 2011, the parties to the Credit Agreement
entered into the Tenth Amendment and Limited Duration Waiver to
the Credit Agreement, which among things waived LECG's failure to
be in compliance with certain representations and warranties and
financial and non-financial covenants under the facility.
The Limited Duration Waiver is the fourth the Company has received
since Nov. 15, 2010. The Term Credit Facility matures on March
31, 2011 and approximately $27.8 million is outstanding under the
facility. The Company said it does not have sufficient resources
to repay amounts outstanding under the facility at this time.
LECG CORP: Heartland Advisors Discloses 5.7% Equity Stake
---------------------------------------------------------
In an amended Schedule 13G filing with the U.S. Securities and
Exchange Commission, Heartland Advisors, Inc., and William J.
Nasgovitz disclosed that they beneficially own 2,180,271 shares of
common stock of representing 5.7% of the shares outstanding.
As of Oct. 29, 2010, there were 38,227,343 shares of the Company
common stock outstanding.
About LECG
LECG is a global litigation; economics; consulting and business
advisory; and governance, assurance, and tax expert services firm
with approximately 1100 employees in offices around the world.
LECG and certain of its subsidiaries are parties to a Credit
Agreement dated as of May 15, 2007, as amended, with the Bank of
Montreal and the syndicate bank members under the Credit
Agreement. On Feb. 28, 2011, the parties to the Credit Agreement
entered into the Tenth Amendment and Limited Duration Waiver to
the Credit Agreement, which among things waived LECG's failure to
be in compliance with certain representations and warranties and
financial and non-financial covenants under the facility.
The Limited Duration Waiver is the fourth the Company has received
since Nov. 15, 2010. The Term Credit Facility matures on March
31, 2011 and approximately $27.8 million is outstanding under the
facility. The Company said it does not have sufficient resources
to repay amounts outstanding under the facility at this time.
LIMITED BRANDS: Moody's Upgrades Corporate Family Rating to 'Ba1'
-----------------------------------------------------------------
Moody's Investors Service upgraded Limited Brands, Inc. Corporate
Family and Probability of Default ratings to Ba1 from Ba2. The
company's senior unsecured guaranteed notes rating of Ba1 was
affirmed. The rating outlook is stable.
Ratings Rationale
The upgrade reflects Limited Brands' very strong operating
performance and Moody's belief that its performance will continue
to improve. For the fiscal year ended January 29, 2011, Limited
Brands' sales grew by 11.4% to $9.6 billion. This was primarily
driven by a 9% increase in comparable store sales. Furthermore,
Limited Brands' operating income grew by nearly 50% to
$1.3 billion and operating margins reached 13.4%.
"We expect Limited Brands' operating performance to continue to be
strong given its leading brands, its expertise in merchandise and
marketing, as well as opportunities for international expansion,"
said Maggie Taylor, a Senior Credit Officer with Moody's.
Ratings upgraded:
-- Corporate Family Rating to Ba1 from Ba2
-- Probability of Default Rating to Ba1 from Ba2
-- Senior unsecured unguaranteed notes to Ba2 (LGD 5, 83%) from
Ba3 (LGD 5, 83%)
-- Senior unsecured unguaranteed shelf to (P) Ba2 from (P) Ba3
-- Subordinated shelf to (P) Ba3 from (P) B1
-- Preferred shelf to (P) Ba3 from (P) B2
Ratings affirmed and LGD point estimates changed:
-- Senior unsecured guaranteed notes at Ba1 (LGD 3, to 39% from
38%)
-- Senior unsecured guaranteed shelf at (P) Ba1
Limited Brands' Ba1 Corporate Family Rating is supported by its
solid credit metrics and very good liquidity. The rating also
acknowledges its expertise in merchandise and marketing as well as
its portfolio of well-recognized brand names. At the same time,
the ratings consider Limited Brands' history of shareholder
friendly financial policy. Although Limited Brands has most
recently only used excess cash to make $1.3 billion in special
dividends, its credit agreement provides it with tremendous
flexibility to make debt financed dividends and share repurchases.
The stable outlook reflects Moody's view that Limited Brands'
earnings will improve over the next twelve months. The stable
outlook also factors in the risk that Limited Brands' financial
policy may revert back to being moderately more shareholder
friendly. However, Moody's believes that the company's current
level of performance provides sufficient cushion for it to still
maintain credit metrics appropriate for the Ba1 rating.
An upgrade would require further comfort on Moody's part that
Limited Brands' financial policies will remain balanced and
prudent such that they would support the company maintaining solid
credit metrics and good liquidity. Quantitatively, an upgrade
would require Limited Brands to maintain debt to EBITDA below 3.0
times and EBITA to interest expense above 4.5 times. Ratings
could be downgraded if Limited Brands' financial policy becomes
more aggressive than currently anticipated. Ratings could also be
downgraded should debt increase or operating performance falter
such that debt to EBITDA approaches 4.5 times or EBITA to interest
expense approaches 2.5 times.
The last rating action for Limited Brands was on April 20, 2010,
when the company's $400 million senior unsecured guaranteed notes
due 2020 were rated Ba1 and its Ba2 Corporate Family Rating and
positive outlook were affirmed.
Headquartered in Columbus, Ohio, Limited Brands, Inc., operates
over 2,900 specialty stores under the Victoria's Secret, Bath &
Body Works, C.O. Bigelow, Pink, La Senza, White Barn Candle Co.,
and Henri Bendel name plates. The company's products are also
available on-line. Annual revenues are about $9.6 billion.
M/I HOMES: Fitch Affirms Issuer Default Rating at 'B'
-----------------------------------------------------
Fitch Ratings has affirmed M/I Homes, Inc.'s ratings:
-- Issuer Default Rating at 'B';
-- Senior Unsecured Notes at 'B+/RR3';
-- Series A non-cumulative perpetual preferred stock at
'CCC/RR6'.
The Rating Outlook has been revised to Stable from Negative.
The Recovery Rating of 'RR3' on MHO's senior unsecured notes
indicates good recovery prospects for holders of this debt issue.
MHO's exposure to claims made pursuant to performance bonds and
the possibility that part of these contingent liabilities would
have a claim against the company's assets were considered in
determining the recovery for the unsecured debt holders. The
'RR6' on MHO's preferred stock indicates poor recovery prospects
in a default scenario. Fitch applied a liquidation value analysis
for these RRs.
MHO's ratings reflect the company's execution of its business
model in the current housing environment, improved 2010 operating
results, healthy liquidity position and better prospects for the
housing sector this year.
The Outlook revision to Stable from Negative takes into account
the diminished near-term liquidity risk associated with debt
maturities MHO had last year. During the last rating review, the
company had not renewed its $150 million revolving credit facility
and had not addressed the refinancing of a $200 million bond
maturing in April 2012. In June 2010, the company entered into a
new three-year secured revolving credit facility with an aggregate
commitment of $140 million. In November 2010, MHO completed the
private placement of $200 million of 8.625% senior unsecured notes
maturing on Nov. 15, 2018. Proceeds from the senior notes
offering were used to redeem $158.6 million of MHO's 6.875% senior
unsecured notes maturing in April 2012. At the end of 2010, the
company had $41.4 million outstanding on its 6.875% senior notes.
The company has sufficient cash and revolver availability to pay-
off this upcoming debt maturity.
MHO successfully managed its balance sheet during the severe
housing downturn, allowing the company to accumulate cash and pay
down its debt as it pared down its inventory. Since the end of
2006, MHO repaid approximately $370 million of debt. After
significantly reducing its owned lot inventory in 2009 (net of
modest land acquisitions), MHO began to focus on growing its
business in late 2009 and during 2010 by investing in new
communities and entering new markets. In 2010, the company
purchased more than double the amount of land and lots that it
had purchased in 2009, opening 41 new communities and increasing
its controlled lot position by 9.2%. (MHO's owned land position
increased 5.8% during 2010.) At the same time, the company
maintained adequate liquidity and ended the year with
$123.1 million of cash (including restricted cash).
MHO maintains an approximately 4.2-year supply of total lots
controlled, based on trailing 12 months deliveries, and three
years of owned land. Total lots controlled were 10,170 lots at
Dec. 31, 2010, 74.8% of which are owned, and the balance is
controlled through options. Historically, MHO developed about 80%
of its communities from which it sells product, resulting in
inventory turns that were moderately below average as compared to
its public peers. During the downturn, MHO had been less focused
on land development.
The company reported higher year-over-year home deliveries during
2010, and homebuilding revenues grew 8.3% compared to 2009. MHO
also reported a 2.7% increase in net orders during the fourth
quarter of 2010 while a majority of the public homebuilders in
Fitch's coverage reported lower orders for the quarter. In 2011,
Fitch expects MHO's home deliveries to increase modestly compared
to 2010 as new housing activity improves moderately this year.
However, higher building material costs as well as weak new home
prices will likely contribute to continued pressure on gross
margins during the year. Additionally, Fitch expects MHO to be
mildly cash flow negative during 2011 as the company continues to
rebuild its land position (through land purchases and development
spending). The company expects land and development spending
during 2011 to be roughly comparable to 2010 levels, which totaled
$153 million for the year. During 2010, MHO was $37.3 million
cash flow negative, which included $29.1 million of tax refunds
during the year.
There has been little upward momentum in housing so far off the
cyclical bottom. As expected, housing metrics (new home sales,
existing home sales, and housing starts) sharply contracted
following the expiration of the national housing credit. Clearly,
the credit 'stole' demand from upcoming months. Fitch anticipated
that the summer and fall months of 2010 would be most affected by
the 'pull forward' of the housing credit and some ratcheting up in
demand (in response to even lower home prices and hopefully better
employment and consumer confidence) may not be apparent until
perhaps later this spring. Fitch currently projects new single-
family housing starts will increase 8.5% in 2011 following a 5.8%
growth in 2010. After falling 14.4% in 2010, new home sales are
forecast to grow about 2% in 2011. Fitch expects existing home
sales will stay flat in 2011 after a 4.8% decline in 2010.
Future ratings and Outlooks will be influenced by broad housing
market trends as well as company specific activity, such as trends
in land and development spending, general inventory levels,
speculative inventory activity (including the impact of high
cancellation rates on such activity), gross and net new order
activity, debt levels and especially free cash flow trends and
uses, and the company's cash position. Negative rating actions
could occur if the anticipated recovery in housing does not
materialize and the company prematurely steps up its land
/development spending, leading to consistent and significant
negative quarterly cash flow from operations. MHO's rating is
constrained in the intermediate term due to weak credit metrics,
but a Positive Outlook may be considered if the recovery in
housing is significantly better than Fitch's outlook and the
company shows further improvement in credit metrics and its
liquidity position.
MAM WEALTH: Case Summary & 6 Largest Unsecured Creditors
--------------------------------------------------------
Debtor: MAM Wealth Management Real Estate Fund 1, LP
11400 W. Olympic Boulevard, Suite 1510
Los Angeles, CA 90064
Bankruptcy Case No.: 11-19976
Chapter 11 Petition Date: March 8, 2011
Court: U.S. Bankruptcy Court
Central District of California (Los Angeles)
Judge: Barry Russell
Debtor's Counsel: M. Jonathan Hayes, Esq.
LAW OFFICE OF M. JONATHAN HAYES
9700 Reseda Boulevard, Suite 201
Northridge, CA 91324
Tel: (818) 882-5600
Fax: (818) 882-5610
E-mail: jhayes@polarisnet.net
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A list of the Company's six largest unsecured creditors
filed together with the petition is available for free
at http://bankrupt.com/misc/cacb11-19976.pdf
The petition was signed by Richard L. Stone, chair of Executive
Committee of general partner.
Debtor-affiliates that filed separate Chapter 11 petitions:
Entity Case No. Petition Date
------ -------- -------------
Navy& HightandL, LC 10-20067 08/16/10
Suzanne Frank Gerbasi 10-64548 12/22/10
MANSIONS AT HASTINGS: Plan Filing Deadline Extended to April
------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas
extended for an additional 60 days Mansions at Hastings Green,
L.P., et al.'s exclusive periods to file and solicit acceptances
for the proposed plan of reorganization.
Absent the extension, the Debtors exclusive period to file a plan
would have expired on Feb. 19, 2011, and its solicitation period
is set to expire on April 20.
The Debtors would use the additional time to finalize the 2009 and
2010 independent audit reports, which are needed to formulate
their respective disclosure statements and proposed plans. It is
expected that the 2010 audits will be completed within 30 days.
About Mansions at Hastings Green
Columbus, Ohio-based Mansions at Hastings Green, L.P., dba The
Mansions at Hastings Green, A Multifamily Community, owns and
operates The Mansions Family Apartment Housing Community located
at 11950 FM 1960 West, Houston, Texas 77065. It filed for Chapter
11 bankruptcy protection on October 22, 2010 (Bankr. S.D. Tex.
Case No. 10-39474).
Affiliate Mansions at Hastings Green Senior, L.P., dba The
Mansions Senior Living Apartment Housing Community, owns and
operated The Mansions Senior Living Apartment Housing Community
located at 11707 Fallbrook Drive, Houston, Texas 77065. It filed
for Chapter 11 bankruptcy protection on October 22, 2010 (Bankr.
S. D. Tex. Case No. 10-39476).
Mansions at Hastings Green and Mansions at Hastings Green Senior
are jointly administered cases.
Edward L. Rothberg, Esq., at Hoover Slovacek, LLP, represents the
Debtors in their restructuring efforts. Reznick Group, P.C. is
performing accounting services for the Debtors. The Debtors each
estimated their assets and debts at $10 million to $50 million.
MANSIONS AT HASTINGS: Taps Reznick Group as Accountant and Auditor
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas
authorized Mansions at Hastings Green, L.P., et al. to employ
Wendy R. Langlais-Tillery, CPA, and Reznick Group, P.C. to perform
accounting services that may be required during the pendency of
the Chapter 11 case.
The Debtors are also authorized to pay Reznick Group a flat fee of
$2,400, per year for the preparation of the 2009 and 2010 state
and federal tax returns, and $10,900 for 2009 and 2010 audit fees,
less amounts previously paid.
The hourly rates of Reznick Group's personnel are:
Ms. Langlais-Tillery, tax principal $400
Linda Rowland, tax senior manager $355
Amy Blocker, audit principal $375
Jason McPherson, audit senior manager $305
Staff $125
To the best of the Debtors' knowledge, the firm is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
About Mansions at Hastings Green
Columbus, Ohio-based Mansions at Hastings Green, L.P., dba The
Mansions at Hastings Green, A Multifamily Community, owns and
operates The Mansions Family Apartment Housing Community located
at 11950 FM 1960 West, Houston, Texas 77065. It filed for Chapter
11 bankruptcy protection on October 22, 2010 (Bankr. S.D. Tex.
Case No. 10-39474).
Affiliate Mansions at Hastings Green Senior, L.P., dba The
Mansions Senior Living Apartment Housing Community, owns and
operated The Mansions Senior Living Apartment Housing Community
located at 11707 Fallbrook Drive, Houston, Texas 77065. It filed
for Chapter 11 bankruptcy protection on October 22, 2010 (Bankr.
S. D. Tex. Case No. 10-39476).
Mansions at Hastings Green and Mansions at Hastings Green Senior
are jointly administered cases.
Edward L. Rothberg, Esq., at Hoover Slovacek, LLP, assists the
Debtors in their restructuring efforts. The Debtors each
estimated their assets and debts at $10 million to $50 million.
MAURO PADILLA: Returns to Bankr. Court with Ch. 7 Petition
----------------------------------------------------------
Patrick Danner at My San Antonio reports that developer Mauro T.
Padilla III is back in bankruptcy court. Mr. Padilla, who is
scheduled to be sentenced April 14 in federal court for lying to a
bank to secure additional funding for a now-failed townhouse
project near the Toyota plant, filed for personal bankruptcy under
Chapter 7.
My San Antonio notes the Chapter 7 filing came about three weeks
after a judge dismissed Padilla's Chapter 11 filing. Mr. Padilla
and his spouse filed a joint Chapter 11 petition (Bankr. W.D. Tex.
Case No. 10-53307) in San Antonio, Texas, on Aug. 31, 2010. The
U.S. Trustee's office, however, sought the dismissal on the
grounds that Mr. Padilla didn't have the "cash flow" to repay
millions owed to creditors.
MCCLATCHY CO: Reports $36.27 Million Net Income in 2010
-------------------------------------------------------
The McClatchy Company reported net income of $36.27 million on
$1.37 billion of revenue for the year ended Dec. 26, 2010,
compared with net income of $54.09 million on $1.47 billion of
revenue during the prior year.
The Company's balance sheet at Dec. 26, 2010 showed $3.13 billion
in total assets, $2.91 billion in total liabilities and
$219.34 million in stockholders' equity.
A full-text copy of the annual report on Form 10-K filed with the
Securities and Exchange Commission is available for free at:
http://ResearchArchives.com/t/s?7494
About The McClatchy Company
Sacramento, Calif.-based The McClatchy Company (NYSE: MNI)
-- http://www.mcclatchy.com/-- is the third largest newspaper
company in the United States, publishing 30 daily newspapers, 43
non-dailies, and direct marketing and direct mail operations.
McClatchy also operates leading local websites in each of its
markets which extend its audience reach. The websites offer users
comprehensive news and information, advertising, e-commerce and
other services. Together with its newspapers and direct marketing
products, these interactive operations make McClatchy the leading
local media company in each of its premium high growth markets.
McClatchy-owned newspapers include The Miami Herald, The
Sacramento Bee, the Fort Worth Star-Telegram, The Kansas City
Star, The Charlotte Observer, and The News & Observer (Raleigh).
* * *
In February 2010, Moody's Investors Service upgraded The McClatchy
Company's Corporate Family Rating to Caa1 from Caa2, Probability
of Default Rating to Caa1 from Caa2, and senior unsecured and
unguaranteed note ratings to Caa2 from Caa3, concluding the review
for upgrade initiated on January 27, 2010. The upgrades reflect
McClatchy's improved liquidity position and reduced near-term
default risk following completion of the company's refinancing,
and its ability to stabilize EBITDA performance through
significant cost reductions. The rating outlook is stable.
Standard & Poor's Ratings Services also raised its corporate
credit on Sacramento, California-based The McClatchy Co. to 'B'
from 'B-'. The upgrade reflects the significant current and
expected moderation in the pace of ad revenue declines in 2010 and
2011 and improving debt leverage and discretionary cash flow.
MEDIACOM COMMUNICATIONS: Fitch Affirms 'B+' Issuer Default Rating
-----------------------------------------------------------------
Fitch Ratings has affirmed the 'B+' Issuer Default Rating assigned
to Mediacom Communications Corporation and its wholly owned
subsidiaries Mediacom LLC and Mediacom Broadband LLC, and has
removed the ratings from Rating Watch Negative. In addition,
specific issue ratings assigned to the company's senior secured
and senior unsecured debt, as listed at the end of this release,
have also been affirmed and removed from Rating Watch Negative.
Approximately $3.4 billion of debt outstanding as of Sept. 30,
2010 is affected by Fitch's actions. The Rating Outlook is
Stable.
Fitch's rating actions follow Mediacom's announcement that the
merger agreement between the company, JMC Communications, LLC,
and Rocco B. Commisso, Mediacom's founder and chief executive
officer, has closed. As a result of the merger, Mediacom will
be a private company wholly-owned by Commisso. This transaction
will not trigger any change of control provisions included in
Mediacom's subsidiary senior secured credit facilities or its
unsecured notes. Fitch estimates that the cash requirements to
close the merger agreement were approximately $390 million
(including merger consideration, fees and expenses) and was funded
through a combination of borrowings under the company's existing
credit facilities and existing cash balances.
Initially, the incremental debt used to facilitate the close of
the merger will weaken Mediacom's credit profile relative to its
current ratings. However a key consideration in Fitch's
affirmation of Mediacom's current ratings is its expectation that
the company will utilize free cash flow generation to reduce
outstanding debt, which when combined with modest operational
improvement will strengthen credit protection metrics to a level
more reflective of the current rating category. Fitch estimates
Mediacom's leverage as of year-end 2010, pro forma for the
incremental debt related to the privatization transaction will be
approximately 6.7 times (x), a marked increase from 6.2x as of the
latest 12-month period ending Sept. 30, 2010. Fitch believes that
Mediacom's leverage will decline to 6.4x by year-end 2011 and will
approach 6.0x by the end of 2012.
On a collective basis the borrowing capacity under Mediacom's two
subsidiary revolving credit facilities totalled approximately
$731 million as of Sept. 30, 2010, which when combined with
$142 million cash (including restricted cash) provides the company
with more than sufficient liquidity to fund the transaction as
currently contemplated and address the its ongoing liquidity
requirements including $26 million of annual amortization during
2011 through 2014. In aggregate, Mediacom has staggered the
expiration of its revolving credit facility commitments with
$79 million expiring in September 2011, $430.3 million in December
2012, and $225.2 million expiring in December 2014.
Overall, Mediacom's ratings incorporate the company's relatively
stable operating profile considering the competitive operating
environment, in addition to weak housing and high unemployment
trends. While Mediacom's service penetration levels and average
revenue per unit profile continue to trail industry leaders as
well as comparable rural-oriented cable operators, Fitch
acknowledges potential growth and operating profile enhancements
that can be captured by increasing service penetration levels.
Rating concerns center on the company's high leverage relative to
its peer group and other larger cable multiple system operators,
Medicom's ability to maintain its competitive position relative to
the threat posed by the direct broadcast satellite operators, and
the limited fiber-to-the-node build by Qwest Communications
International, Inc. Additional concerns center on Mediacom's
ability to maintain an appropriate balance between subscriber unit
growth and promotional discounting to maximize operating margins
and free cash flow generation, as well as growing retail revenues
beyond the company's core 'triple-play' service offering. Fitch
points out that event risks related to how Mediacom intends to use
borrowing capacity existing on its revolvers and free cash flow
generation are elevated within the company's overall credit
profile.
Fitch has affirmed these ratings with a Stable Rating Outlook:
Mediacom Communications Corporation
-- IDR at 'B+'.
Mediacom Broadband LLC
-- IDR at 'B+';
-- Senior unsecured 'B/RR5'.
Mediacom LLC
-- IDR at 'B+';
-- Senior unsecured at 'B/RR5'.
Mediacom Illinois LLC
Mediacom Arizona LLC
Mediacom Indiana LLC
Mediacom California LLC
Mediacom Minnesota LLC
Mediacom Delaware LLC
Mediacom Wisconsin LLC
Mediacom Southeast LLC
Mediacom Iowa LLC
Zylstra Communications Corporation
-- IDR at 'B+';
-- Senior secured at 'BB+/RR1'.
MCC Georgia, LLC
MCC Illinois, LLC
MCC Iowa, LLC
MCC Missouri, LLC
-- IDR at 'B+';
-- Senior secured at 'BB+/RR1'.
MEDIACOM COMMUNICATIONS: Moody's Affirms 'B1' Corp. Family Rating
-----------------------------------------------------------------
Moody's Investors Service affirmed Mediacom Communications
Corporation's B1 Corporate Family Rating, SGL-1 speculative-grade
liquidity rating, and stable rating outlook, as well as the debt
instrument ratings and stable rating outlook of its operating
subsidiaries Mediacom LLC and Mediacom Broadband LLC (Broadband),
following the completion of the privatization of the company led
by Rocco Commisso, the Chairman, CEO and founder. Mediacom funded
the approximate $400 million transaction with drawdowns under its
revolving credit facilities and from existing cash (approximately
$142 million of which $15 million was restricted as of 9/30/10).
The transaction is aggressive and weakens the credit profile as
the incremental borrowings will raise Mediacom's debt-to-EBITDA
leverage by approximately half a turn to an estimated 6.8x (pro
forma FY 2010 incorporating Moody's standard adjustments).
Moody's expects the company will utilize the bulk of its free cash
flow to repay the drawdowns such that leverage falls to a low 6x
range within 12-18 months. The leverage weakly positions Mediacom
within the B1 CFR and provides negligible flexibility for further
aggressive use of cash, cash flow and debt over at least the
intermediate term, although the company continues to have very
good liquidity. The leverage position is a departure from Moody's
prior expectation for a 6x or lower level by the end of 2011.
Moody's is nevertheless maintaining the B1 CFR as the 12-18 months
of additional time the rating agency expects it will take to
reduce leverage to 6x or lower is tolerable within the rating. An
inability or unwillingness to reduce and sustain debt-to-EBITDA to
6x or lower could result in downward rating pressure.
Moody's expects Mediacom will draw down approximately $300 million
under its revolvers in conjunction with the transaction which,
along with the expiration of $79 million of LLC's revolver
commitment on September 30, 2011, will reduce unused capacity
under the existing $734.5 million revolver commitments
($430 million at Broadband and $304 million at LLC). Moody's
nevertheless continues to view the company's liquidity position
as very good (SGL-1) as cash (expected to be over $100 million pro
forma for completion of the transaction in March 2011) and
projected free cash flow in excess of $100 million over the next
12 months comfortably cover the $26 million of required term loan
amortization. The bulk of the cash balance is held at the parent
(Mediacom) level and may be available to support debt at the
borrowers, Broadband and LLC. There is also considerable
restricted payment capacity at Broadband and LLC to permit the
company to move cash around within the legal structure.
Mediacom's cushion within the 6.0x maintenance covenants at LLC
and Broadband will decline, but Moody's projects the cushion will
remain in excess of 15%. The expiration of Broadband's revolver
commitment on December 31, 2012 or meaningful deterioration in
free cash flow generation could create liquidity pressure and a
downgrade of the SGL rating. Moody's expects in the B1 CFR that
Mediacom will maintain market access and will not have difficulty
refinancing its revolvers.
Mediacom's B1 CFR reflects the company's high pro-forma debt-to-
EBITDA leverage and weaker operating performance relative to
higher-rated cable operators, evidenced by the company's below
average revenue per homes passed. Moody's also believes Mediacom
may experience further challenges from increased competition in
future periods. These risks are somewhat mitigated by the
company's strong liquidity profile, underscored by its free cash
flow generation and prospects for further growth. In Moody's
opinion, the company will increase investment in its digital
platform, increase bandwidth and enhance HD-DVR set-top boxes to
drive growth in digital video, broadband and voice telephony as
well as its commercial business. Mediacom's leverage has declined
over the long-term and free cash flow generation has turned
positive and improved, but Moody's believes Mediacom's leverage
would need to continue to transition lower to hold the B1 CFR if
competition intensifies.
The stable rating outlook reflects Moody's expectation that
Mediacom will maintain a good liquidity position, grow revenue and
EBITDA in a low to mid single digit range in 2011 and 2012, and
will not experience a materially weaker rate of subscriber losses.
Moody's also expects in the rating that Mediacom will utilize the
bulk of its free cash flow to repay debt over the next 12-24
months, and will refrain from any additional leveraging
initiatives during that time frame.
The last rating action for Mediacom was on April 15, 2010 when
Moody's assigned Ba3 ratings to LLC's $250 million senior secured
Term Loan E and $225.2 million senior secured revolver due 2014,
as well as Broadband's $600 million senior secured Term Loan F due
2017, and upgraded Mediacom's speculative-grade liquidity rating
to SGL-1 from SGL-2. Proceeds from the offerings were used to
term out existing revolver borrowings and refinance LLC's Term
Loan A due 2012 and Broadband's Term Loan E due 2016.
Headquartered in Middletown, New York, Mediacom Communications
Corporation, through its two wholly-owned subsidiaries Mediacom,
LLC and Mediacom Broadband, LLC, is a domestic cable multiple
system operator serving approximately 1.2 million basic video
subscribers in a wide variety of small to mid sized markets. The
company generated approximately $1.5 billion in revenue over the
twelve months ended 12/31/2010.
MEDIACOM COMMUNICATIONS: S&P Affirms 'B+' Corp. Credit Rating
-------------------------------------------------------------
Standard & Poor's Ratings Services said that it affirmed all
its ratings, including the 'B+' corporate credit rating, on
Middletown, N.Y.-based cable TV operator Mediacom Communications
Corp. At the same time, S&P removed the ratings from CreditWatch,
where they were placed with negative implications on Nov. 15,
2010, following the announcement that the company had reached a
definitive agreement under which its chairman, CEO, and founder
Rocco Commisso would acquire the remaining stock in the company
not owned by him for $8.75 per share in cash -- approximately
$360 million. The take-private transaction was approved by
shareholders and closed on March 4, 2011. The company used
borrowings under its two revolving credit facilities and cash on
hand to finance the transaction. The rating outlook is stable.
"The ratings affirmation reflects S&P's expectations that,
despite the modest increase in leverage," said Standard & Poor's
credit analyst Naveen Sarma, "as a result of the take-private
transaction, adjusted leverage will remain below 7x debt to
latest-12-month EBITDA and that the private owners will not pursue
a financial policy that will lead to leverage exceeding 7x."
MESA AIR: Millions of Claims Change Hands in February
-----------------------------------------------------
On Feb. 1, 2011, the Bankruptcy Clerk recorded the transfer
of these claims:
Claim Amount
Transferor Transferee Number Transferred
---------- ---------- ------ -----------
Manufacturers & Contrarian Funds, 1094 $5,448,601
Traders Trust Co LLC 1464 $5,448,601
U.S. Bank National Contrarian Funds, 1090 $92,601,383
Association LLC
On Feb. 16 and 23, 2011, the Bankruptcy Clerk recorded the
transfer these additional claims:
Claim Amount
Transferor Transferee Number Transferred
---------- ---------- ------ -----------
IBNK Leasing Corp. Corre Opportunities 1345, $5,700,019
Fund, LP 1346
U.S. Bank National Riva Ridge Master 1093 $92,601,383
Association Fund, Ltd.
On February 25 and 28, 2011, the Bankruptcy Clerk recorded the
transfer of claims filed by U.S. Bank National Association, not
in its individual capacity but solely as security trustee to
several entities:
Amount
Transferee Claim No. Transferred
---------- --------- -----------
CAI Distressed Debt 1527 $8,692,484
Opportunity Master 1550 $8,846,430
Fund, Ltd 1552 $8,532,018
1563 $8,692,484
1586 $8,846,430
1588 $8,532,018
Credit Suisse Loan 1580 $12,676,755
Funding LLC 1544 $12,676,755
1564 $12,077,064
1528 $12,077,064
1595 $12,586,840
1559 $12,586,840
D-STAR Ltd. 1527 $3,725,350
1550 $3,791,327
1552 $3,656,579
1563 $3,725,350
1586 $3,791,327
1588 $3,656,579
DG Value Partners, LP 1551 $5,712,911
1556 $5,706,627
1587 $5,712,911
1592 $5,706,627
Marblegate Special 1539 $13,499,414
Opportunities Master 1540 $12,773,511
Fund LP 1542 $12,806,059
1555 $14,590,075
1575 $13,499,414
1576 $12,773,511
1578 $12,806,059
1591 $14,590,075
Momar Corp. 1579, 1543, 1565, $74,782,216
1529, 1584, 1548
SOF Investments, L.P. 1525 $14,590,075
1541 $12,773,337
1549 $12,716,791
1553 $12,736,317
1561 $14,590,075
1577 $12,773,337
1585 $12,716,791
1589 $12,736,317
Special Situations, 1551 $1,142,582
LLC 1556 $1,141,325
1587 $1,142,582
1592 $1,141,325
Special Situations X, 1551 $4,570,329
LLC 1556 $4,565,301
1587 $4,570,329
1592 $4,565,301
WB Claims Holdings, LLC 1535, 1545, 1558 $37,453,777
1571, 1581, 1594 $37,453,777
Some claims were partially transferred to different entities.
On February 28, 2011, the Bankruptcy Clerk also recorded the
transfer of these claims.
Claim Amount
Transferor Transferee Number Transferred
---------- ---------- ------ -----------
Aircraft Services Seaport V LLC 696 $6,256,730
Corp.
General Electric Seaport V LLC 694 $22,090,783
Capital Corporation 695 $19,915,829
Polaris Holding Seaport V LLC 697 $7,831,524
Company
Wells Fargo Bank Seaport V LLC 743 $25,229,148
Northwest, N.A.
About Mesa Air
Mesa Air currently operates 76 aircraft with approximately 450
daily system departures to 94 cities, 38 states, the District of
Columbia, and Mexico. Mesa operates as US Airways Express and
United Express under contractual agreements with US Airways and
United Airlines, respectively, and independently as go! Mokulele.
This operation links Honolulu to the neighbor island airports of
Hilo, Kahului, Kona and Lihue. The Company was founded by Larry
and Janie Risley in New Mexico in 1982.
Mesa Air Group Inc. and its units filed their Chapter 11 petitions
Jan. 5 in New York (Bankr. S.D.N.Y. Case No. 10-10018), listing
assets of $976 million against debt totaling $869 million as of
Sept. 30, 2009.
Richard M. Pachulski, Esq., and Laura Davis Jones, Esq., at
Pachulski Stang Ziehl & Jones LLP, serve as local counsel to the
Debtors. Imperial Capital LLC is the investment banker. Epiq
Bankruptcy Solutions is claims and notice agent. Brett Miller,
Esq., Lorenzo Marinuzzi, Esq., and Todd Goren, Esq., at Morrison &
Foerster LLP, serve as counsel to the Official Committee of
Unsecured Creditors.
Judge Martin Glenn entered a final order confirming the Third
Amended Joint Plan of Reorganization of Mesa Air Group, Inc., and
its debtor affiliates on January 20, 2011. Under the plan, the
reorganized company will issue new notes, common stock and
warrants to creditors. Unsecured creditors that are U.S. citizens
will receive a combination of new notes and new common stock,
while unsecured creditors that are Non-U.S. citizens will receive
a combination of new notes and new warrants. An agreement with US
Airways paved way for the filing of the plan.
Mesa Air's Plan of Reorganization became effective March 1, 2011.
The Company's restructuring accomplishments included elimination
of 100 excess aircraft and associated leases and debt which
contributed to the deleveraging of Mesa's balance sheet in the
approximate amount of $700 million in capitalized leases and
$50 million in debt, and extending the term of the code-share
agreement with US Airways through September 2015.
Bankruptcy Creditors' Service, Inc., publishes Mesa Air Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings undertaken
by Mesa Air Group Inc. and its units.
(http://bankrupt.com/newsstand/or 215/945-7000).
MILLAR WESTERN: Moody's Upgrades Corporate Family Rating to 'B2'
----------------------------------------------------------------
Moody's Investors Service upgraded the Corporate Family Rating of
Millar Western Forest Products Ltd. to B2 from B3. Concurrently,
the rating on the senior unsecured notes was raised to B3 from
Caa1 and Moody's assigned a first-time liquidity rating of SGL-2.
The ratings outlook was changed to stable from negative.
Ratings Rationale
The CFR upgrade to B2 reflects a material improvement in Millar
Western's earnings, liquidity profile, and key credit metrics
and Moody's expectation that consolidated operating results will
be maintained near current levels over the intermediate term.
Strong demand for pulp, along with a balanced supply chain, has
preserved market prices near record highs. That said, pulp
pricing may eventually weaken as additional supply comes on-line,
but Moody's do not expect a significant price decline in the
near-term. Meanwhile, gathering strength in the demand for
lumber, particularly in China, has helped this segment return to
profitability. End market demand for lumber is expected to remain
steady in the near-term, with potential upside if U.S. housing
starts begin to rebound. The ratings continue to be constrained
by the company's relatively small revenue size and the inherent
vulnerability of revenue and earnings to highly cyclical commodity
pulp and lumber prices, fiber costs and exchange rates.
Moody's expects Millar Western to maintain a good liquidity
profile over the next year, as indicated by the Speculative Grade
Liquidity Assessment of SGL-2. Cash on hand (C$45 million at
December 31, 2010) and cash flow generation are projected to cover
seasonal working capital needs and capital expenditures, including
approximately C$34 million allocated to complete the Fox Creek
sawmill rebuild in 2011. Moody's do not anticipate that the
C$50 million revolver (unrated by Moody's) will be drawn over the
next four quarters, and cushion on the facility's financial
covenant is expected to remain ample. However, the SGL rating
could be downgraded if Millar Western's cash flow generation
weakens, the cost of rebuilding the Fox Creek sawmill is higher
than budgeted, or the company becomes reliant on the revolver to
fund operations.
The stable outlook reflects Moody's expectation that consolidated
results will remain fairly steady over the medium term, with a
potential pullback in pulp prices being partly offset by a
favorable hedged position in lumber and the scheduled initiation
of operations at the Fox Creek sawmill in early 2012.
Nonetheless, the ratings or outlook could be pressured if pulp and
lumber prices fall materially, or exchange rates change
considerably, causing a deterioration in the company's liquidity
profile. Additionally, the ratings could be downgraded if the
senior unsecured notes due in 2013 are not refinanced in a timely
manner, the Fox Creek sawmill rebuild is delayed, or the cost of
rebuilding is significantly higher than anticipated. Although not
likely in the medium term due to the inherent volatility in demand
for pulp and lumber, the ratings could be raised if revenue and
earnings grow considerably and enable the company to build a
sizable cash balance to withstand a future downturn.
These ratings were upgraded (and LGD point estimates adjusted, as
noted):
-- Corporate Family Rating, to B2 from B3
-- Probability of Default Rating, to B2 from Caa1
-- US $190 million senior unsecured notes due 2013, to B3 (LGD4,
61%) from Caa1 (LGD3, 42%)
This rating was assigned:
-- Speculative Grade Liquidity Assessment, SGL-2
Millar Western Forest Products Ltd. is privately held and produces
dimension lumber and high-yield pulp. Headquartered in Edmonton,
Alberta, the company reported 2010 revenues of C$292 million.
MILLWASP REALTY: Case Summary & 4 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Millwasp Realty LLC
69-27 66th Road
Middle Village, NY 11379
Bankruptcy Case No.: 11-41783
Chapter 11 Petition Date: March 7, 2011
Court: U.S. Bankruptcy Court
Eastern District of New York (Brooklyn)
Judge: Jerome Feller
Debtor's Counsel: Michelle Labayen, Esq.
LAW OFFICES OF LUTZKY & LABAYEN LLP
420 Lexington Avenue, Suite 300
New York, NY 10170
Tel: (212) 297-6261
Fax: (212) 479-2523
E-mail: info@bankruptcynyc.com
Scheduled Assets: $2,000
Scheduled Debts: $2,058,576
A list of the Company's four largest unsecured creditors
filed together with the petition is available for free
at http://bankrupt.com/misc/nyeb11-41783.pdf
The petition was signed by Jill Sorrentino, partner.
MPC COMPUTERS: Court Approves Chapter 11 Liquidation Plan
---------------------------------------------------------
Bankruptcy Law360 reports that MPC Computers LLC won a Delaware
bankruptcy judge's approval Tuesday for its Chapter 11 liquidation
plan, after resolving an objection from the U.S. Internal Revenue
Service based on a grossly inflated claim. Judge Peter J. Walsh
signed off on the plan at a hearing in the U.S. Bankruptcy Court
for the District of Delaware, Law360 says.
About MPC Corporation
Headquartered in Nampa, Idaho, MPC Corporation --
http://www.mpccorp.com-- sells personal computer and provides
computer software and hardware to mid-size businesses, government
agencies and education organizations. MPC acquired Gateway
Professional Divison from Gateway Inc. and Gateway Technologies
Inc. in October 1, 2007.
MPC and eight of its affiliates filed for Chapter 11 protection on
November 6, 2008 (Bankr. D. Del. Lead Case No. 08-12667). Richard
A. Robinson, Esq., at Reed Smith LLP, represents the Debtors in
their restructuring efforts. The Debtor selected Focus Management
Group USA, LLC, as its financial advisors. The United States
Trustee appointed seven members to the Official Committee of
Unsecured Creditors on November 25, 2008. Hahn & Hessen LLP
represents the Committee. As of June 30, 2008, the Debtors have
$258.3 million in total assets and $277.8 million in total debts
MSR RESORT: Hearing on Further Cash Collateral Use on March 15
--------------------------------------------------------------
Bankruptcy Judge Sean H. Lane will convene a fourth interim
hearing on March 15, 2011, to consider further cash collateral
access by MSR Resort LLC and its affiliates.
On Feb. 28, Judge Lane entered his third interim cash collateral
order, allowing the Debtors to access cash collateral through
March 17.
As of the Petition Date, the Debtors owe Bank of America, National
Association, as mortgage lender, and Midland Loan Services, Inc.,
as special servicer, for $1 billion in financing extended to the
Debtors. The mortgage loan is secured by cross-collateralized and
cross-defaulted first priority mortgages on certain of the
Debtors' properties, including the resorts, and the products and
proceeds, including the cash generated by the resorts' operations.
The Court's order provides that the Debtors will pay out of cash
collateral (a) pre- and postpetition interest, at the non-default
rate, due and owing under the Mortgage Loan and (b) reasonable and
documented pre- and postpetition fees and expenses of each of
Milbank, Tweed, Hadley & McCloy, LLP, and FTI Consulting, Inc.,
professionals retained by, or on behalf of, Midland Loan Services,
Inc. as master servicer and special servicer under the Mortgage
Loan, incurred by Midland through the date of the fourth interim
hearing; provided, however, that in no event shall prepetition and
postpetition fees and expenses of FTI exceed $300,000 and $500,000
($250,000 for each of February and March 2011).
About MSR Resort
MSR Hotels & Resorts, formerly known as CNL Hotels & Resorts Inc.,
owns a portfolio of eight luxury hotels with over 5,500 guest
rooms, including the Arizona Biltmore Resort & Spa in Phoenix, the
Ritz-Carlton in Orlando, Fla. and Hawaii's Grand Wailea Resort
Hotel & Spa in Maui.
On Jan. 28, 2011, CNL-AB LLC acquired the equity interests in the
portfolio through a foreclosure proceeding. CNL-AB LLC is a joint
venture consisting of affiliates of Paulson & Co. Inc. A joint
venture affiliated Morgan Stanley's CNL Hotels & Resorts owned the
resorts before the foreclosure.
Following the acquisition, five of the resorts with mortgage debt
scheduled to mature Feb. 1, 2011, were sent to Chapter 11 by the
Paulson and Winthrop joint venture affiliates. MSR Resort Golf
Course LLC and its affiliates filed for Chapter 11 protection
(Bankr. S.D.N.Y. Lead Case No. 11-10372) in Manhattan on Feb. 1.
The resorts subject to the filings are Grand Wailea Resort and
Spa, Arizona Biltmore Resort and Spa, La Quinta Resort and Club
and PGA West, Doral Golf Resort and Spa, and Claremont Resort and
Spa.
James H.M. Sprayregen, P.C., Esq., Paul M. Basta, Esq., Edward O.
Sassower, Esq., and Chad J. Husnick, Esq., at Kirkland & Ellis,
LLP, serve as the Debtors' bankruptcy counsel. Houlihan Lokey
Capital, Inc., is the Debtors' financial advisor. Kurtzman Carson
Consultants LLC is the Debtors' claims agent.
The five resorts had $2.2 billion in assets and $1.9 billion in
debt as of Nov. 30, 2010, according to court filings.
MYDDELTONPARKER BUILDERS: Founders in Chapter 7 Bankruptcy
----------------------------------------------------------
Rachel Feintzeig, writing for Dow Jones' Daily Bankruptcy Review,
reports that the owners of Florida builder MyddeltonParker
Builders LLC have been forced to seek bankruptcy protection.
Citing the Tallahassee Democrat, DBR relates that MyddeltonParker
had a stint in the ABC reality television show, "Extreme Makeover:
Home Edition" in 2009, where the company worked to build a new
house for a family, whose patriarch was fighting a losing battle
with brain cancer. By November 2010, company owners Jake
Myddelton and John Parker, had filed Chapter 7 petitions with the
U.S. Bankruptcy Court in Tallahassee. The Democrat reported that
Mr. Myddelton reported $981,671 in assets and $4.6 million in
liabilities, while Mr. Parker listed $696,560 in assets and nearly
$4.4 million in liabilities, according to court papers.
Mr. Parker listed his wife -- Sydney Myddelton Parker, who also
happens to be Jake Myddelton's sister -- on his petition as well.
According to the newspaper, the duo owe about $3.4 million in
unsecured claims to more than 100 local businesses. Their lawyer,
Allen Turnage, Esq., told The Wall Street Journal's Bankruptcy
Beat that the pair's financial woes back to the economic downturn,
which hit the housing industry, especially in Florida, hard.
DBR relates, however, that homeowners and subcontractors who lost
thousands of dollars as a result of MyddeltonParker's financial
collapse have another take:
-- Ben Kirbo, a plastic surgeon who hired MyddeltonParker to
begin work on his 4,500 square foot home in 2008, told the
Tallahassee Democrat, said, "The economy had nothing to do
with taking money from one person and not paying the
people it belonged to."
-- Andrea Leishman, the owner of Prestige Painting Partners,
told the newspaper that MyddeltonParker's inability to pay
its bills trickled down to a wide network of
subcontractors in the area. "It was big enough to
definitely affect how workers could provide basic needs
for their families," she said. Her company is still owed
$9,575.
According to DBR, Mr. Turnage declined to comment on the specific
allegations from Kirbo and others, noting that litigation related
to the bankruptcy case in still in the discovery stage. No
lawsuits have been filed yet, he said.
NEW ULM: Involuntary Chapter 11 Case Summary
--------------------------------------------
Alleged Debtor: New Ulm Retail and Development LLC
c/o Ty Kirkpatrick
P.O. Box 741
Cicero, IN 46034
Bankruptcy Case No.: 11-13110
Involuntary Chapter 11 Petition Date: March 7, 2011
Court: U.S. Bankruptcy Court
District of Nevada (Las Vegas)
Judge: Bruce A. Markell
Debtor's Counsel: Pro Se
Petitioners' Counsel: Robert Atkinson, Esq.
KUPPERLIN LAW
10120 S. Eastern Avenue, Suite 202
Henderson, NV 89052
Tel: (702) 614 0600
Fax: (702) 614 0647
E-mail: robert@kupperlin.com
Creditors who signed the Chapter 11 petition:
Petitioners Nature of Claim Claim Amount
----------- --------------- ------------
Clifford Strand Lienholder $276,750
5001 Birch
Newport Beach, CA 92660
Michael Strand Lienholder $92,250
5001 Birch
Newport Beach, CA 92660
Lance Warner Lienholder $41,000
c/o Kupperlin Law
10120 S. Eastern Avenue, Suite 202
Henderson, NV 89052
Tel: (702) 614 0600
NMT MEDICAL: Richard Davis Employment Agreement Kept Confidential
-----------------------------------------------------------------
NMT Medical, Inc., submitted an application under Rule 24b-2
requesting an extension of a previous grant of confidential
treatment for information it excluded from the Exhibits to Form
10-Qs filed on Nov. 9, 2006 and Aug. 10, 2004; Form 8-K filed on
April 16, 2008; and Form 10-K/A filed on April 30, 2003.
Based on representations by NMT Medical, Inc. that this
information qualifies as confidential commercial or financial
information under the Freedom of Information Act, 5 U.S.C.
552(b)(4), the Division of Corporation Finance has determined not
to publicly disclose it. Accordingly, excluded information from
the Amended and Restated Employment Agreement with Richard E.
Davis will not be released to the public until Dec. 31, 2011.
About NMT Medical
Based in Boston, NMT Medical, Inc. (NASDAQ: NMTI) --
http://www.nmtmedical.com/-- is an advanced medical technology
company that designs, develops, manufactures and markets
proprietary implant technologies that allow interventional
cardiologists to treat structural heart disease through minimally
invasive, catheter-based procedures.
The Company's balance sheet at September 30, 2010, showed
$7.78 million in total assets, $9.75 million in total liabilities,
and a stockholders' deficit of $1.97 million.
The Company has incurred losses from operations during each of the
past two fiscal years and has experienced decreasing sales over
those time periods. The Company also incurred a loss from
operations of $10.71 million for the nine months ended
September 30, 2010. The Company has also had negative operating
cash flows over the comparable periods, have approximately
$3.40 million in cash, cash equivalents and marketable securities
as of September 30, 2010, and has an accumulated deficit of
$59.21 million as of September 30, 2010.
ORLEANS HOMEBUILDERS: All Steel Violated Ch. 11 Stay, Judge Says
----------------------------------------------------------------
Bankruptcy Law360 reports that Judge Peter J. Walsh ruled Tuesday
that All Steel Supply Inc. had willfully violated the automatic
stay in Orleans Homebuilders Inc.'s Chapter 11 by removing 800-
pound I-beams, columns and other steel from homesites after
learning of the bankruptcy.
About Orleans Homebuilders
Orleans Homebuilders, Inc. -- aka FPA Corporation, OHB, Parker &
Lancaster, Masterpiece Homes, Realen Homes and Orleans --
develops, builds and markets high-quality single-family homes,
townhouses and condominiums. From its headquarters in suburban
Philadelphia, the Company serves a broad customer base including
first-time, move-up, luxury, empty-nester and active adult
homebuyers. The Company currently operates in these 11 distinct
markets: Southeastern Pennsylvania; Central and Southern New
Jersey; Orange County, New York; Charlotte, Raleigh and
Greensboro, North Carolina; Richmond and Tidewater, Virginia;
Chicago, Illinois; and Orlando, Florida. The Company's Charlotte,
North Carolina operations also include adjacent counties in South
Carolina. Orleans Homebuilders employs approximately 300 people.
The Company filed for Chapter 11 bankruptcy protection on March 1,
2010 (Bankr. D. Del. Case No. 10-10684). Cahill Gordon & Reindell
LLP is the Debtor's bankruptcy and restructuring counsel. Curtis
S. Miller, Esq., and Robert J. Dehney, Esq., at Morris, Nichols,
Arsht & Tunnell, are the Debtor's Delaware and restructuring
counsel. Blank Rome LLP is the Debtor's special corporate
counsel. Garden City Group Inc. is the Debtor's claims and notice
agent. Gerard S. Catalanello, Esq., and James J. Vincequerra,
Esq., at Duane Morris LLP, in New York; Lawrence J. Kotler, at
Duane Morris LLP, in Philadelphia, Pennsylvania; and Richard W.
Riley, Esq., and Sommer L. Ross, Esq., at Duane Morris LLP, in
Wilmington, Delaware, serve as counsel to the Official Committee
of Unsecured Creditors.
The Company estimated assets and debts at $100 million to
$500 million as of the Petition Date.
Orleans Homebuilders, Inc., in February 2011 completed its
financial reorganization and emerged from Chapter 11 protection as
a newly reorganized company. Orleans emerged with $160 million in
new financing, including a $30 million revolving credit facility.
* * *
As reported in the Troubled Company Reporter on Feb. 18, 2011,
Standard & Poor's Ratings Services raised its corporate credit
rating on Orleans Homebuilders Inc. to 'B-' from 'D' and assigned
a 'B-' issue-level rating to the company's $130 million secured
term loan. S&P also assigned a '3' recovery rating on the secured
term loan, indicating its expectation for a meaningful (50%-70%)
recovery in the event of a payment default. The outlook is
stable.
PACIFIC ENERGY: Sues Forest Oil for $250 Million Over Sale
----------------------------------------------------------
Bankruptcy Law360 reports that Pacific Energy Resources Ltd. filed
a $250 million suit Monday in Delaware bankruptcy court claiming
Forest Oil Corp. misled it about the value of energy interests in
Alaska.
The Debtor bought the Cook Inlet assets at issue in 2007 for more
than $453 million, according to the adversary suit in the U.S.
Bankruptcy Court for the District of Delaware, Law360 says.
About Pacific Energy
Headquartered in Long Beach, California, Pacific Energy Resources
Ltd. -- http://www.pacenergy.com/-- engaged in the acquisition
and development of oil and gas properties, primarily in the United
States. The Company and seven of its affiliates filed for
Chapter 11 protection on March 8, 2009 (Bankr. D. Del. Lead Case
No. 09-10785). The Debtor estimated between $100 million and
$500 million in assets and debts in its Chapter 11 petition.
Attorneys at Pachulski Stang Ziehl & Jones LLP, serve as
bankruptcy counsel to the Debtors. The Debtors also tapped Rutan
& Tucker LLP as special corporation and litigation counsel;
Schully, Roberts, Slattery & Marino, PLC, as special oil and gas
and transactional counsel; Devlin Jensen as special Canadian
counsel; Scott W. Winn, at Zolfo Cooper Management, LLC, as chief
restructuring officer; Lazard Freres & Co. LLC as investment
banker; and Albrecht & Associates, Inc., as agent for the Debtors
in the sale of their oil and gas properties. Omni Management
Group, LLC, is the claims, balloting, notice and administrative
agent for the Debtors.
PACIFIC INVESTMENT: Case Summary & 2 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Pacific Investment Advisors, LLC
5754 Stow Canyon Road
Goleta, CA 93117
Bankruptcy Case No.: 11-11056
Chapter 11 Petition Date: March 8, 2011
Court: U.S. Bankruptcy Court
Central District of California (Santa Barbara)
Judge: Robin Riblet
Debtor's Counsel: Eric W. Burkhardt, Esq.
BEALL & BURKHARDT
1114 State Street, Suite 200
Santa Barbara, CA 93101
Tel: (805) 966-6774
Fax: (805) 963-5988
E-mail: castlesb@aol.com
Scheduled Assets: $8,301,000
Scheduled Debts: $2,491,853
A list of the Company's two largest unsecured creditors
filed together with the petition is available for free
at http://bankrupt.com/misc/cacb11-11056.pdf
The petition was signed by Sean Swords, managing member.
PAMELA MATTHEWS: Sallie Mae Assignee May Participate in Suit
------------------------------------------------------------
Senior District Judge Karl S. Forester affirmed a June 3, 2010
bankruptcy court order granting judgment in favor of the
Defendant-Appellee, Educational Credit Management Corporation.
Rather than pursue her appeal before the Bankruptcy Appellate
Panel of the Sixth Circuit Court of Appeals, Plaintiff-Appellant
Pamela Ileen Matthews elected to have her appeal heard before the
District Court.
On July 17, 2009, Plaintiff initiated an adversary proceeding
against Sallie Mae, Inc. seeking to discharge certain student loan
obligations. A default judgment was entered against Sallie Mae on
Sept. 11, 2009. On Sept. 17, 2009, Defendant filed a motion
seeking to intervene in Plaintiff's adversary proceeding against
Sallie Mae as "the assignee of certain student loan debt formerly
owed by [Plaintiff] to Michigan Higher Education Student Loan
Authority, as guarantor." Defendant also stated that Plaintiff's
identification of Sallie Mae as the holder of her student loan
indebtedness was erroneous, as Sallie Mae was never the holder of
Plaintiff's debt. Plaintiff objected to Defendant's motion to
intervene on various grounds, including that the contractual basis
upon which Defendant asserted a right to intervene in the case was
invalid. After a hearing, the Bankruptcy Court entered an Order
granting Defendant's motion to intervene on Oct. 26, 2009. On
Jan. 31, 2010, Plaintiff filed a motion to dismiss Defendant,
again challenging Defendant's standing. After a hearing, the
Bankruptcy Court entered an Order denying Plaintiff's motion. On
April 5, 2010, Plaintiff filed a motion for summary judgment,
challenging Defendant's standing for a third time. After a
hearing, the Bankruptcy Court entered an Order denying Plaintiff's
motion for summary judgment. Although defeated three times,
Plaintiff refused to give up and on May 26, 2010, filed a motion
for judgment as a matter of law, challenging Defendant's standing
yet again. After a hearing, the Bankruptcy Court entered an Order
denying Plaintiff's motion.
The district court case is Pamela Matthews, Appellant/Plaintiff,
v. Educational Credit Management Corp. Appellee/Defendant, Civil
Action No. 5:10-cv-00232-KS (E.D. Ky.). A copy of Judge
Forester's March 4, 2011 Opinion and Order is available at
http://is.gd/cJXAxWfrom Leagle.com.
Pamela Ileen Matthews filed for Chapter 11 (Bankr. E.D. Ky.
09-_____) on March 29, 2009. The case was subsequently converted
from a Chapter 11 case to a Chapter 7 case on June 1, 2009.
PETROFLOW ENERGY: Judge Ruled Against Equal Energy in Dispute
-------------------------------------------------------------
Equal Energy Ltd. disclosed that Judge Christopher S. Sontchi of
the U.S. Bankruptcy Court for the District of Delaware has issued
an order in furtherance of the Court's findings regarding the
trial held before the Court from Dec. 15 to 17, 2010 involving
certain agreements between the Company or certain of its
subsidiaries and Petroflow Energy Ltd. or certain of its
subsidiaries.
The Order quantifies certain material financial obligations owed
by Equal to Petroflow, which were provided for in the Court's
earlier findings and conclusions. The extent and amount of
Equal's claims against Petroflow must still be finalized in order
to quantify its set-off rights and the net amount of the potential
liability. The Company does not know when a full and final
determination of its financial exposure to Petroflow will be made
or whether such final determination will, in fact, have a material
financial affect on the Company. Thus the Company has been
advised that, at this time no payments are required to be made to
Petroflow under the Order. The Company is working diligently with
its legal counsel to determine what its legal rights are in terms
of challenging the Order, including an appeal and with its
auditors to determine the effect on the Company's financial
statements.
Don Klapko, President and Chief Executive Officer of Equal said,
"While the Court's rulings, if upheld, may point to exposure for
the Company that is somewhat above our original expectation, we
remain optimistic that once the matter is finally resolved the
financial impact to Equal will not be material. Furthermore, the
Order does not affect our drilling plans in the Hunton play and we
still anticipate drilling 4 to 6 Hunton wells over the remainder
of 2011."
About Equal Energy
Equal Energy Limited is an exploration and production oil and gas
company based in Calgary, Alberta, Canada with its United States
operations office located in Oklahoma City, Oklahoma. Equal's
shares and debentures are listed on the Toronto Stock Exchange
under the symbols (EQU, EQU.DB, EQU.DB.A, EQU.DB.B) and Equal's
shares are listed on the New York Stock Exchange under the symbol
(EQU). The portfolio of oil and gas properties is geographically
diversified with producing properties located in Alberta, British
Columbia, Saskatchewan and Oklahoma. Production is comprised of
approximately 55 percent crude oil and natural gas liquids and 45
percent natural gas. Equal has compiled a multi-year drilling
inventory for its properties including its new oil play
opportunities in the Cardium and Viking in central Alberta in
addition to its extensive inventory of drilling locations in the
Hunton liquids-rich, natural gas play in Oklahoma.
About Petroflow Energy
Based in Denver, Colorado, Petroflow Energy Ltd. filed for Chapter
11 bankruptcy protection on Aug. 20, 2010 (Bankr. D. Del. Case No.
10-12608). Domenic E. Pacitti, Esq., at Klehr Harrison Harvey
Branzburg LLP, represents the Debtor as its Delaware counsel.
Kirkland & Ellis LLP serves as bankruptcy counsel. Kinetic
Advisors LLC serves as restructuring advisor. Epiq Systems Inc.
serves as claims and notice agent. The Debtor estimated both
assets and debts of between $100 million and $500 million
PHILADELPHIA RITTENHOUSE: Files Plan to Deflect Dismissal
---------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the owner of 10 Rittenhouse Square faces a March 14
hearing where the principal secured creditor will ask the
bankruptcy judge to dismiss the case as hopeless. Alternatively,
the lender, iStar Financial Inc., is seeking to deny use of sale
proceeds or rental income.
Mr. Rochelle relates that Philadelphia Rittenhouse Developer LP
filed a Chapter 11 plan and explanatory disclosure statement on
March 7 to keep IStar's mortgage on the project while selling the
condominium units during the next three to four years, generating
net proceeds of about $225 million. The owner plans to invest
another $2.5 million, according to the disclosure statement.
Mr. Rochelle notes that the owner says that is more than enough to
pay off the $190 million in principal owed on the disputed
mortgage debt. IStar disagrees, contending that the mortgage
balance is about $205 million. It also claims the property can't
be sold without with an additional $25 million investment by the
owner. IStar says the property is worth less than the debt on the
first mortgage. Another $62 million is owing on a mezzanine
loan.
About Philadelphia Rittenhouse
Philadelphia Rittenhouse Developer, L.P. is a joint venture
between ARC Properties, Inc., based in Clifton, New Jersey, and
Philadelphia-based Wheeler Brothers Holdings, LLC. The Company
was formed to develop 10 Rittenhouse Square, a 33-story
condominium building in Philadelphia.
Rittenhouse filed for chapter 11 bankruptcy in response
to an action in Pennsylvania state court seeking to appoint a
receiver for the development project, which was brought by one of
the Company's lenders, iStar Tara, LLC.
Rittenhouse filed a Chapter 11 petition on Dec. 30, 2010 (Bankr.
E.D. Pa. Case No. 10-31201). Albert A. Ciardi, III, Esq., at
Ciardi Ciardi & Astin, P.C., serves as the Debtor's bankruptcy
counsel. The Debtor estimated its assets and debts at
$100 million to $500 million. iStar Tara, LLC is represented in
the chapter 11 case by the firm of Blank Rome LLP.
PRM REALTY: Court to Consider Fate of Bankr. Case Today
-------------------------------------------------------
The Hon. Harlin D. Hale of the U.S. Bankruptcy Court for the
Northern District of Texas will convene a hearing on March 10,
2011, at 9:00 a.m. (Central time), to consider the request to
convert the Chapter 11 case of PRM Realty Group, LLC, to one under
Chapter 7 of the Bankruptcy Code.
As reported in the Troubled Company Reporter on Jan. 10, 2011,
William T. Neary, the U.S. Trustee for Region 6, is asking the
Court to convert the Debtor's case, explaining that there is (i)
diminution of assets of the Debtor's estate with no hope of
reorganization because the Debtor has not yet proposed a plan of
reorganization, (ii) gross mismanagement of the estate because
Debtor paid postpetition loan without court approval, and (ii)
failure to pay taxes because Debtor has not timely paid taxes
owed.
SPCP Group, LLC, supports the U.S. Trustee's motion to convert the
Debtor's case.
SPCP is represented by:
Hugh M. Ray, III, Esq.
Ruth Van Meter, Esq.
MCKOOL SMITH P.C.
600 Travis, Suite 7000
Houston, TX 77002
Tel: (713) 485-7300
Fax: (713) 485-7344
About PRM Realty Group
Chicago, Illinois-based PRM Realty Group, LLC, filed for Chapter
11 bankruptcy protection on January 6, 2010 (Bankr. N.D. Tex. Case
No. 10-30241). The Company's affiliates -- Peter R. Morris; Bon
Secour Partners, LLC; PM Transportation, LLC; Rangeline
Properties, LLC; PRS II, LLC; and Morris Radio Enterprises, LLC --
filed separate Chapter 11 bankruptcy petitions. Gerrit M.
Pronske, Esq., at Pronske & Patel, P.C., assists PRM Realty in its
bankruptcy effort. PRM Realty disclosed $34,054,818 in
total assets and $225,611,600 in total liabilities as of the
Petition Date. No committee of unsecured creditors has been
appointed.
QUANTUM FUEL: Registers 2.67-Mil. Shares for Resale
---------------------------------------------------
In a Form S-1 registration statement with the U.S. Securities and
Exchange Commission, Quantum Fuel Systems Technologies Worldwide,
Inc. disclosed of its stockholders' offer to resale up to
2,672,040 shares of the Company's common stock, consisting of (i)
1,518,737 shares of common stock that were issued in a private
placement on Feb. 18, 2011 and (ii) 1,153,303 shares of the
Company's common stock issuable upon the exercise of warrants that
were issued in the private placement. The Company is not selling
any shares of common stock in this offering and, therefore, will
not receive any proceeds from this offering. The Company will,
however, receive proceeds from the exercise price of the warrants
if and when these warrants are exercised by the selling
stockholders for cash. The Company will bear all of the expenses
and fees incurred in registering the shares offered by this
prospectus.
The Company's common stock is quoted on The Nasdaq Global Market.
On Feb. 8, 2011, the Company implemented a 1-for-20 reverse stock
split. The Company's current symbol is "QTWWD." Prior to
implementation of the stock split, the Company's symbol was
"QTWW." On or around March 10, 2011, the Company's symbol will
again be "QTWW." The last reported sale price of the Company's
common stock on Feb. 28, 2011, was $5.14 per share. The Company's
warrants are not and will not be listed for trading on any
exchange.
A full-text copy of the prospectus is available for free at:
http://ResearchArchives.com/t/s?7495
About Quantum Fuel
Based in Irvine, California, Quantum Fuel Systems Technologies
Worldwide, Inc., is a fully integrated alternative energy company
and considers itself a leader in the development and production of
advanced clean propulsion systems and renewable energy generation
systems and services.
Quantum Fuel and its senior lender, WB QT, LLC, entered into a
Ninth Amendment to Credit Agreement and a Forbearance Agreement on
January 3, 2011. The Senior Lender agreed to provide the Company
with a $5.0 million non-revolving line of credit, which may be
drawn upon at any time prior to April 30, 2011. Advances under
the New Line of Credit do not bear interest -- unless an event of
default occurs, in which case the interest rate would be 10% per
annum -- and mature on April 30, 2011. The Senior Lender also
agreed to forbear from accelerating the maturity date for any
portion of the Senior Debt Amount and from exercising any of its
rights and remedies with respect to the Senior Debt Amount until
April 30, 2011.
The Company recorded a net loss of $28.0 million in fiscal 2009,
compared to a net loss of $86.8 million in fiscal 2008.
RADIATION THERAPY: Moody's Raises Ratings on Senior Notes to 'B3'
-----------------------------------------------------------------
Moody's Investors Service upgraded the rating on the 9.875% senior
subordinated notes of Radiation Therapy Services to B3 from Caa1
following the $66.3 million add-on to the original $310 million
issue amount. The $66.3 million proceeds along with $16 million
equity contribution were used to acquire Medical Developers LLC --
a developer and operator of cancer treatment facilities in Latin
America. In addition, the company's senior secured term loan and
revolving credit facility were upgraded to Ba2 from Ba3 and the B2
corporate family and probability of default ratings were affirmed.
The ratings outlook was changed to negative from stable.
These rating actions were taken:
-- Corporate family rating, affirmed at B2;
-- Probability of default rating, affirmed at B2;
-- $265 million first lien term loan, due 2014, upgraded to Ba2
(LGD2, 18%) from Ba3 (LGD2, 23%);
-- $75 million first lien revolving credit facility, due 2013,
upgraded to Ba2 (LGD2, 18%) from Ba3 (LGD2, 23%);
-- $376.3 million senior subordinated notes, due 2017, upgraded
to B3 (LGD5, 75%) from Caa1 (LGD5, 80%).
Ratings Rationale
The upgrade of the senior secured facilities to Ba2 from Ba3 and
subordinated notes to B3 from Caa1 reflects the relative ranking
of the debt in the capital structure as the percentage of senior
secured debt has decreased as compared to the senior subordinated
debt. The upgrades are consistent with Moody's loss given default
methodology.
The B2 corporate family rating continues to reflect RTS'
considerable debt leverage and the rating also considers the
company's limited absolute scale as well as concentration of
revenues by payor (Medicare) and geography (Florida). In
addition, the rating reflects the company's aggressive acquisition
strategy.
The rating favorably reflects the company's competitive position
as the largest pure-play national provider of radiation therapy to
cancer patients and the longer-term strong underlying industry
demand fundamentals. The rating also considers the near-term
visibility in the reimbursement environment.
The change in the outlook to negative reflects the company's
operating performance including lower margins as ancillary
practices, which are less capital intensive but have inherently
lower margins, are acquired and continued softness in volumes in
the radiation oncology industry as reflected by declines in same
center revenues and EBITDA. Further, the negative outlook
considers RTS' adequate liquidity profile.
The ratings could be downgraded if the company's free cash flow
turns negative on a sustained basis or debt to EBITDA increases to
above 6.0 times on a sustained basis. Further, if the company's
liquidity profile were to weaken further there could be negative
ratings pressure. Also, if there are declines in Medicare
reimbursement for 2012 or beyond Moody's could downgrade the
ratings.
The outlook could be changed back to stable if the company is able
to improve its EBITDA margins, reduce adjusted debt to EBITDA to 5
times (without pro forma acquisition EBITDA adjustments), or
improve its liquidity profile. In addition, for the outlook to be
changed back to stable, same center revenue and EBITDA would have
to show improvement. The ratings could be upgraded if the
company's debt to EBITDA would decline on a sustained basis below
4 times, free cash flow to debt increase on a sustained basis
above 5%, and EBITDA less capital expenditures to interest expense
increase on a sustained basis above 2.5 times. Ratings upgrade
would also have to be supported by stable reimbursement
environment, steady or improving volumes, and good liquidity
position.
Radiation Therapy Services owns and operates radiation treatment
facilities in the US and Latin America. The company's revenues
for 2010 were approximately $544 million.
RADIO ONE: Moody's Assigns 'B1' Rating to $25 Mil. Loan
-------------------------------------------------------
Moody's Investors Service assigned a B1, LGD1, 0% rating to Radio
One, Inc.'s proposed $25 million first out, first lien revolver
due 2015 and a B2, LGD2, 27% rating to the company's new first
lien term loan due 2016. Moody's also raised the company's
Probability of Default Rating to Caa1 (from Caa2) and affirmed its
Caa1 Corporate Family Rating. The outlook remains stable.
The proposed $411 million of new credit facilities replace the
existing $385 million facilities with the increase in the term
loan commitment used to fund the $13.7 million capital call
related to TV One (as discussed in Moody's press release dated
December 8, 2010) as well as to fund transaction fees, add
approximately $13 million to cash balances, and term out revolver
outstandings. The revision of the PDR to Caa1 from Caa2 results
in an upgrade of the 12.5%/15.0% subordinated Notes due 2016 to
Caa2 from Caa3.
Issuer: Radio One, Inc.
These ratings were assigned:
* New $25 million first out, first lien revolver due 2015 -- B1,
LGD1, 0%
* New $386 million first lien term loan due 2016 -- B2, LGD2, 27%
These ratings were upgraded:
* Probability of Default Rating -- Caa1 (from Caa2)
* 12.5%/15.0% senior subordinated Notes due 2016-Caa2, LGD5, 81%
(from Caa3)
This rating was unchanged:
* Corporate Family Rating -- Caa1
These ratings will be withdrawn upon closing of the transactions:
* Amended & restated $38.8 million first lien revolver due 2012 --
B1, LGD2, 12%
* Amended & restated $323.0 million first lien term loan due 2012
(tranche B) -- B1, LGD2, 12%
* $23.7 million first lien term loan (original amount of
$300 million) due 2012 (tranche A) -- B1, LGD2, 12%
Rating Rationale
The Caa1 corporate family rating reflects Radio One's high pro
forma debt-to-EBITDA leverage of approximately 8.0x (incorporating
Moody's standard adjustments) mitigated by recently improved
operating performance as a result of gains in national advertising
in 4Q10. Despite anticipated EBITDA growth and improving net
debt-to-EBITDA leverage ratios for FY2011, debt balances could
increase by approximately $27 million over the next 12 months due
to the potential accretion of the PIK portion of the 12.5%/15%
subordinated notes due 2016. Furthermore, excluding discretionary
dividends from TV One, EBITDA less capex coverage of interest
expense (including PIK portion of the sub notes) is tight at
approximately 1.0x. Incorporated in the rating is Radio One's
large market presence and niche focus targeting the African-
American audience, its reliance on four of its sixteen markets for
approximately half of its revenues, and approximately $17 million
in potential funding requirements scheduled for 1Q2012 related to
the company's ownership in Reach Media. For the 12 months ended
December 31, 2010, the company reported revenues of $280 million,
in line with expectations and 4.8% ahead of revenues for 2009. As
expected, Radio One is refinancing credit facilities in advance of
the 2012 maturities with the proposed new revolver and term loan
facilities. Financial maintenance covenants including maximum
senior secured leverage, maximum total leverage, and minimum
interest coverage, are expected to be set with an approximate 20%
EBITDA cushion as well as with additional limitations on
restricted payments, investments and additional indebtedness.
Radio One's PDR was revised to Caa1 (from Caa2) reflecting Moody's
expectation for an average family level recovery rate. As a
result of the PDR revision, the company's senior subordinated
notes due 2016 were upgraded to Caa2 (from Caa3) and the rating on
the Term Loan B, which Moody's rank below the first out revolver,
was lowered to B2 (from B1).
The stable outlook reflects Moody's expectation that Radio One
will address current challenges in Washington DC and Dallas
markets as a result of management turnover and increased
competition, respectively, and will improve debt-to-EBITDA ratios
as the economy stabilizes, operating performance improves, and
free cash flow is applied to reduce debt or enhance liquidity.
Ratings could be upgraded if debt-to-EBITDA leverage ratios are
sustained below 7.0x (incorporating Moody's standard adjustments)
as a result of an improving economic environment and greater
advertising demand in combination with free cash flow being
applied to reduce debt balances. Ratings could be downgraded if
revenue and EBITDA are negatively impacted by increased
competition in one or more of its four key markets or an
unexpected downturn in advertising resulting in debt-to-EBITDA
leverage ratios greater than 9.50x. Increased debt levels due to
discretionary items including share repurchases or the funding of
increased ownership of current investments could also negatively
impact ratings, particularly if these actions impair liquidity.
The most recent rating action for Radio One was on December 8,
2010, when Moody's confirmed its Caa1 CFR and assigned ratings to
the company's amended and restated credit facilities due 2012 in
addition to its subordinated notes due 2016.
Recent Events
On February 25, 2011, Radio One entered into agreements to
increase its ownership in TV One, an unrestricted subsidiary, to
approximately 50.8% from 36.8%. Purchased interests are expected
to come from certain financial investors, TV One management and
Direct TV. These purchases are to be funded largely with proceeds
from a recent $119 million issuance of 10% notes due 2016 held
entirely by funds of Canyon Capital Advisors LLC, proceeds from
the new term loan, plus cash on hand. Although Radio One may
be in a position to consolidate the financial reporting of TV
One, the 10% notes due 2016 are not an obligation of Radio
One. For 2011, Moody's expect TV One to generate more than
the approximately $107 million of revenue and approximately
$22 million of EBITDA booked in 2010 as a result of its growing
subscriber base and price escalators. Double digit increases in
revenues and EBITDA for 2011 should provide more than sufficient
cash flow to fund annual debt service of approximately $12 million
annually as well as shareholder dividends. The 10% notes due
2016 carry a debt incurrence test of 7.0x debt-to-EBITDA. The
transaction implies a valuation of approximately $534 million for
TV One.
Radio One Inc., headquartered in Lanham, Maryland, is an urban
oriented multi-media company that operates or owns interests in
broadcasting stations (53 stations in 16 markets), a cable
television network, and Internet-based properties, largely
targeting the African-American audience. The Chairperson and
President (Chairperson's son) hold approximately 92% of the
outstanding voting power of the common stock. The company
reported sales of approximately $280 million through the 12 months
ended December 31, 2010.
ROTECH HEALTHCARE: To Offer $290 Million of Sr. Second Lien Notes
-----------------------------------------------------------------
Rotech Healthcare Inc. intends to offer, subject to market and
other conditions, $290 million in aggregate principal amount of
Senior Second Lien Notes due 2018.
Rotech expects to use the net proceeds received from the offering
to repay all of its Senior Subordinated Notes due 2012, for
payment of related fees and expenses and for general corporate
purposes, as applicable, including funding the company's strategic
priorities.
The notes and the related subsidiary guarantees have not been
registered under the Securities Act of 1933, as amended, or
applicable state securities laws. Accordingly, the notes will be
offered only to qualified institutional buyers in reliance on Rule
144A, to persons outside the United States under Regulation S,
under the Securities Act, and to certain accredited investors as
defined in Rule 501(a) under the Securities Act. Unless so
registered, the notes may not be offered or sold in the United
States except pursuant to an exemption from the registration
requirements of the Securities Act and applicable state securities
laws. Prospective purchasers that are qualified institutional
buyers are hereby notified that the seller of the notes may be
relying on the exemption from the provisions of Section 5 of the
Securities Act provided by Rule 144A.
About Rotech Healthcare
Based in Orlando, Florida, Rotech Healthcare Inc. (NASDAQ: ROHI)
-- http://www.rotech.com/-- provides home medical equipment and
related products and services in the United States, with a
comprehensive offering of respiratory therapy and durable home
medical equipment and related services. The company provides
equipment and services in 48 states through approximately 500
operating centers located primarily in non-urban markets.
In October 2010, Standard & Poor's Ratings Services raised its
corporate credit rating on Rotech Healthcare to 'B-' from 'CCC'.
The outlook is positive.
Moody's Investors Service also upgraded Rotech Healthcare's
corporate family rating and probability of default rating to Caa1
from Caa2 following the successful execution of $230 million of
senior secured notes due 2015. In addition, Moody's upgraded
Rotech's senior subordinated notes rating to Caa2 from Caa3 and
confirmed the B1 rating on the senior secured notes. These rating
actions conclude the review for possible upgrade initiated on
September 27, 2010. The rating outlook is now stable.
The Company's balance sheet at Dec. 31, 2010 showed $291.06
million in total assets, $573.75 million in total liabilities and
$282.69 million in total stockholders' deficiency.
The Company reported a net loss of $4.20 million on $496.42
million of net revenue for the year ended Dec. 31, 2010, compared
with a net loss of $21.08 million on $479.87 million of net
revenue during the prior year.
ROTECH HEALTHCARE: Moody's Upgrades Corp. Family Rating to 'B2'
---------------------------------------------------------------
Moody's Investors Service upgraded Rotech Healthcare Inc.'s
Corporate Family Rating and Probability of Default Rating to
B2 from Caa1 in connection with the proposed refinancing of
the company's senior subordinated notes due 2012 with a new
$290 million of senior secured notes offering due 2018. The new
notes will be rated B3. In addition, Moody's upgraded Rotech's
existing 1st lien senior secured notes rating to Ba2 from B1 and
assigned an SGL-2 Speculative Grade Liquidity Rating. The upgrade
of the Corporate Family Rating two notches to B2 reflects the
alleviation of Moody's concerns regarding the Rotech's liquidity
profile as well as its view that the company will be able to grow
profitably despite the challenging reimbursement environment. The
rating outlook is stable.
Ratings Upgraded:
Rotech Healthcare, Inc.:
-- Corporate Family Rating to B2 from Caa1;
-- Probability of Default Rating to B2 from Caa1;
-- $230 million senior secured first lien notes to Ba2 (LGD2,
17%) from B1 (LGD2, 19%);
Ratings Assigned:
-- $290 million senior secured 2nd lien notes due 2018 at B3
(LGD5, 70%);
-- Speculative Grade Liquidity Rating at SGL-2;
Rating Withdrawn:
-- $287 million senior subordinated notes due 2012 at Caa2
(LGD5, 77%);
The outlook is stable.
Ratings Rationale
The B2 Corporate Family Rating reflects Moody's expectation that
the company will continue its trend of improving credit metrics
through better operating performance and small strategic
acquisitions. Moody's expects credit metrics to be relatively
weak, albeit in line with the B2 rating with debt-to-EBITDA
leverage of approximately 4.9 times at the time of the
transaction. However Moody's also expects additional de-
leveraging over time through EBITDA expansion and the generation
of modest free cash flow. Interest coverage is likely to remain
thin given the high cost of Rotech's debt. Debt repayment is not
anticipated due to the all bond debt capital structure which does
not contain pre-payment provisions. Importantly, Rotech's new
capital structure (1st and 2nd lien secured notes due 2015 and
2018, respectively, $10 million revolving credit facility)
alleviates previous concerns regarding the company's maturity
profile and liquidity.
However, the B2 rating also reflects the ongoing uncertainty
regarding reimbursement risk for oxygen and other home medical
equipment service providers, particularly in the current
environment where many healthcare related issues are being
rethought. Nonetheless, the award of contracts in 9 out of 9
competitive bidding areas in Round 1 of Medicare changes adds
clarity to the company's 2011 and 2012 operating performance.
Reimbursement rate cuts remain a longer term risk and will be more
severe in the Round 2 competitive bidding environment slated for
2013.
Although not likely without greater clarity regarding Medicare
reimbursement, an upgrade could be supported by ongoing
improvements in operations and cost cutting which sufficiently
offset the negative reimbursement environment. Specifically,
credit metrics supporting an upgrade would include leverage
sustained below 4 times debt-to-EBITDA and free cash flow to debt
approaching 10%.
If Rotech faces further, significant reimbursement cuts that are
not likely to be offset by additional cost cutting measures or
market share gains, ratings could be downgraded.
The last rating action for Rotech was on October 5, 2010, when
Moody's raised Rotech's Corporate Family Rating to Caa1 and rated
the company's senior secured first lien notes B1.
Rotech's ratings have been assigned by evaluating factors that
Moody's believes are relevant to the company's risk profile,
such as the company's (i) business risk and competitive position
compared with others within the industry; (ii) capital structure
and financial risk; (iii) projected performance over the near
to intermediate term; and (iv) management's track record and
tolerance for risk. These attributes were compared against other
issuers both within and outside Rotech's core industry. Rotech's
ratings are believed to be comparable to those of other issuers
with similar credit risk.
Rotech, headquartered in Orlando, Florida, is one of the largest
providers of home medical equipment and related products and
services in the US, with a comprehensive offering of respiratory
therapy and durable home medical equipment and related services.
Rotech provides equipment and services in 48 states through
approximately 425 operating centers located primarily in non-urban
markets. For the twelve months ended December 31, 2010, Rotech
reported revenue of approximately $496 million.
ROTECH HEALTHCARE: S&P Puts 'B-' Rating on CreditWatch Positive
---------------------------------------------------------------
Standard & Poor's Ratings Services said that it placed its current
'B-' corporate credit rating for Orlando, Fla. based Rotech
Healthcare Inc. on CreditWatch with positive implications, given
the company's proposed debt refinancing. The 'B+' first-lien
senior secured debt rating on the company's existing $230 million
first-lien senior secured notes due 2015 was also placed on
CreditWatch with positive implications. S&P expects to raise its
corporate credit and first-lien senior secured debt ratings on
Rotech following the completion of the company's proposed debt
refinancing. The '1' recovery rating (reflecting expectations for
very high (90%-100%) recovery in the event of default) on the
first-lien notes will remain unchanged.
"We are assigning its 'B' issue-level rating (the same as the
expected 'B' corporate credit rating on the company) to Rotech's
proposed $290 million second-lien senior secured notes due 2018,"
said Standard & Poor's credit analyst Jesse Juliano. The recovery
rating on this debt is '4', indicating S&P's expectation of
average (30%-50%) recovery for lenders in the event of a payment
default.
The rating on Orlando, Fla.-based Rotech Healthcare Inc. reflects
the company's weak business risk profile, incorporating Rotech's
exposure to Medicare reimbursement reductions for its products and
services. The rating also reflects the company's highly leveraged
financial risk profile.
SAKS INCORPORATED: Moody's Upgrades Corp. Family Rating to 'B1'
---------------------------------------------------------------
Moody's Investors Service upgraded Saks Incorporated's Corporate
Family Rating and Probability of Default Rating to B1 from B2.
The rating outlook is positive.
Ratings Rationale
The upgrade reflects Saks' continued growth in operating earnings
and Moody's belief that these improvements are sustainable given
the rebound in the luxury goods market. For the fiscal year ended
January 29, 2011, Saks' sales grew by 5.9% to $2.8 billion. This
was primarily driven by an 6.4% increase in comparable store sales
offset by store closings. Furthermore, Saks' operating income
grew by nearly 30% to $90 million as the company was able to
maintain inventory and expense discipline. As a result, its
credit metrics have improved.
These ratings are upgraded
-- Corporate Family Rating to B1 from B2
-- Probability of Default Rating to B1 from B2
-- Senior unsecured notes to B2 (LGD 5, 75%) from B3 (LGD 5,
72%)
Saks' B1 Corporate Family Rating reflects its low level of funded
debt which results in reasonable leverage, its good liquidity,
and sizable portfolio of unencumbered real estate. The rating
also reflects that the rebound in the luxury goods market is
sustainable and Saks' well recognized brand name. Despite these
strengths, the rating is constrained by Saks' still weak interest
coverage and that its operating margins continue to significantly
lag its industry peers. In addition, Saks' history of erratic
operating performance prior to the recession is another rating
concern.
The positive outlook reflects Moody's view that Saks' earnings
will further improve and that its debt level will likely reduce.
The combination of which may lead to a higher rating over the next
twelve to eighteen months.
An upgrade would require Saks' operating performance to continue
to improve such that reported EBITA margins are sustained above
4.5%. An upgrade would also require Saks' to continue to
demonstrate balanced financial policies and good liquidity.
Furthermore, Saks would need to sustainably maintain debt to
EBITDA approaching 4.0 times and EBITA to interest expense above
1.75 times, for ratings to be upgraded.
Negative rating action could result should debt increase or
operating performance falter. Ratings could be downgraded should
debt to EBITDA rise above 5.0 times or EBITA to interest expense
fall below 1.5 times. Ratings could also be downgraded should
Saks' financial policy become more aggressive.
The last rating action for Saks was on December 9, 2010, when its
Probability of Default Rating was upgraded to B2 and all of its
ratings were placed on review for possible upgrade.
Saks Incorporated, headquartered in New York, NY, operates about
47 Saks Fifth Avenue stores and 57 Off 5th off-price stores, and
saks.com. Revenues are about $2.8 billion.
SBARRO INC: New Forbearance Agreement Expires April 1
-----------------------------------------------------
Dow Jones' DBR Small Cap reports that Sbarro Inc. agreed to a
third forbearance with first lien lenders. The report relates
that the company has been in restructuring talks with creditor
groups and other stakeholders.
The agreement is good until April 1, without any other breaches or
other actions occurring, according to DBR. The report says that
Sbarro didn't meet a cash flow covenant at year-end under its
first lien agreement with lenders including Ares Capital
Management.
In February, DBR notes, it missed an interest payment on its
senior notes. Ares holds a majority of the company's senior
notes; MidOcean holds about 95% of the company's second lien debt,
the report says.
About Sbarro Inc.
Melville, N.Y.-based Sbarro, Inc. -- http://www.sbarro.com/-- is
the world's leading Italian quick service restaurant concept and
the largest shopping mall-focused restaurant concept in the world.
The Company has 1,056 restaurants in 41 countries.
The Company's balance sheet at Sept. 30, 2010, showed
$455.55 million in total assets, $29.98 million in total current
liabilities, $7.47 million in deferred rent, $70.64 million in
deferred tax liabilities, $13.26 million in due to former
shareholders and other liabilities, $341.80 million in long-term
debt, and stockholders' equity of $16.17 million.
* * *
Standard & Poor's Ratings Services in January 2011 lowered its
corporate credit rating on Sbarro to 'CC' from 'CCC-'. The
outlook is negative.
"The ratings on Sbarro reflect S&P's belief that the company's
current capital structure is unsustainable and that it is unable
to service its existing debt," said Standard & Poor's credit
analyst Mariola Borysiak. Sbarro has engaged Rothschild Inc. as
its financial advisor to explore strategic alternatives addressing
its current capital structure.
As reported by the Troubled Company Reporter, on January 11, 2011,
The Wall Street Journal's Mike Spector said people familiar with
the matter indicated Sbarro has hired the law firm Kirkland &
Ellis to advise it on restructuring its balance sheet. As
reported by the TCR on January 10, 2011, Sbarro hired investment
bank Rothschild Inc. for restructuring advice.
SCO GROUP: Court Approves Sale of Software Biz to unXis
-------------------------------------------------------
Bankruptcy Judge Kevin Gross authorized the Chapter 11 Trustee for
The SCO Group, Inc., to sell substantially all of the Debtors'
software product business assets, excluding certain specified
assets over the objections of Novell, Inc.
The Court entered a sales procedure order on August 23, 2010,
pursuant to which the Trustee conducted an auction. unXis, Inc.
was the successful bidder and agreed to pay $600,000 in cash and
warrants. A second bidder submitted a bid of only $18 in cash.
Novell raises these arguments:
1. In litigation between the Debtors and Novell, it was
determined that the Debtors were licensees, not owners, of
UNIX software copyrights. Therefore, if unXis is to
operate the Software Business it is purchasing, the
Debtors must assume and assign the original 1995 asset
purchase agreement which provided the Debtors with the
license. The Debtors must assume the entirety of the 1995
APA, the benefits and the burdens, and all of the
contracts which constitute an integrated transaction.
Before they can do so, the Debtors must cure the breach of
the 1995 APA by paying the $3 million owed Novell.
2. Any assumption and assignment requires Novell's consent.
3. The Trustee must provide adequate assurance of future
performance.
The Trustee responds to the Novell arguments with the assertion
that he is only selling what the Debtors own.
"The Court understands Novell's desire to punish Debtors for years
of expensive and painful litigation. Here Novell's objection to
the Motion will not prevail. The Motion seeks the Court's
approval of what the Court finds is an arm's length, fair and
reasonable transaction in the good faith exercise of Debtors'
business judgment," Judge Gross said.
A copy of Judge Gross's March 7, 2011 Memorandum Opinion is
available at http://is.gd/Lul16Pfrom Leagle.com.
About SCO Group
The SCO Group (SCOXQ.PK) -- http://www.sco.com/-- is a provider
of UNIX software technology. Headquartered in Lindon, Utah, SCO
has a worldwide network of resellers and developers.
The Company and its affiliate, SCO Operations Inc., filed for
Chapter 11 protection on September 14, 2007 (Bankr. D. Del. Lead
Case No. 07-11337).
Paul Steven Singerman, Esq., and Arthur Spector, Esq., at Berger
Singerman P.A., represent the Debtors in their restructuring
efforts. James O'Neill, Esq., and Laura Davis Jones, Esq., at
Pachulski Stang Ziehl & Jones LLP, are the Debtors' Delaware and
conflicts counsel. Epiq Bankruptcy Solutions LLC acts as the
Debtors' claims and noticing agent. As of January 31, 2009, the
Company had $8.78 million in total Assets, $13.30 million in total
liabilities, and $4.52 million in stockholders' deficit.
SEAGATE TECHNOLOGY: S&P Affirms 'BB+' Corporate Credit Rating
-------------------------------------------------------------
Standard & Poor's Ratings Services said that it affirmed its
ratings on Seagate Technology, including its 'BB+' corporate
credit rating. At the same time, S&P removed all the ratings from
CreditWatch with negative implications, where they were placed on
Oct. 15, 2010. The outlook is stable.
"The ratings on Seagate reflect S&P's expectation that the company
will pursue a moderately more aggressive financial policy than it
has in the past two years," said Standard & Poor's credit analyst
Lucy Patricola. S&P believes the company has the capacity to
absorb increased returns to shareholders without impairing current
liquidity and while sustaining leverage within S&P's expectations
of 2x-3x through industry cycles. In S&P's view, the hard disk
drive industry will remain characterized by volatile industry
dynamics, which can include periods of aggressive product pricing
and excess supply, high operating leverage, and technology risk.
S&P expects Seagate to continue to preserve its strong overall
competitive standing despite a number of industry challenges.
SEAHAWK DRILLING: US Trustee Forms Five-Member Equity Committee
---------------------------------------------------------------
Judy A. Robbins, U.S. Trustee for Region 7, formed a five-member
Official Committee of Equity Security Holders in the Chapter 11
cases of Seahawk Drilling Inc. and its debtor-affiliates.
The members of the Equity Committee are:
1) Hal Goldstein - Temporary Chairman
MHR Fund Management, L.L.C.
40 West 57th Street, 24th Floor
New York, New York 10019
Tel: (212) 262-0005
E-mail: hgoldstein@mhrfund.com
2) John Symington
General Counsel
Seadrill Americas Inc.
11210 Equity Drive, Suite 150
Houston, TX 77041-8242
Tel: (713) 329-1164
E-mail: john.symington@seadrill.com
3) Jeff Cate
Hayman Capital Management, L.P.
2101 Cedar Springs Road, Suite 1400
Dallas, TX 75201
Tel: (214) 347-4186
E-mail: jc@haymancapital.com
4) Peter J. Sakon
HSBC Distressed Opportunities Fund
452 Fifth Avenue, 18th Floor
New York, New York 10018
Tel: (212) 525-6780
E-mail: peter.j.sakon@us.hsbc.com
5) Naveen Bhatia
The Keffi Group
500 Fifth Avenue, 44th Floor
New York, New York 10110
Tel: (212) 935-5551
E-mail: naveenbhatia1@gmail.com
The equity committees have the right to employ legal and
accounting professionals and financial advisors, at the Debtor's
expense. They may investigate the Debtor's business and financial
affairs. Importantly, official committees serve as fiduciaries to
the general population of creditors they represent. Those
committees will also attempt to negotiate the terms of a
consensual Chapter 11 plan -- almost always subject to the terms
of strict confidentiality agreements with the Debtors and other
core parties-in-interest. If negotiations break down, the
Committee may ask the Bankruptcy Court to replace management with
an independent trustee. If the Committee concludes reorganization
of the Debtor is impossible, the Committee will urge the
Bankruptcy Court to convert the Chapter 11 cases to a liquidation
proceeding.
About Seahawk Drilling
Houston, Texas-based Seahawk Drilling, Inc., engages in a jackup
rig business in the United States, Gulf of Mexico, and offshore
Mexico. It offers rigs and drilling crews on a day rate
contractual basis. It filed for Chapter 11 bankruptcy protection
on February 11, 2011 (Bankr. S.D. Tex. Case No. 11-20089).
Affiliates Seahawk Drilling LLC (Bankr. S.D. Tex. Case No. 11-
20088), Seahawk Drilling, Inc. (Bankr. S.D. Tex. Case No. 11-
20089), Seahawk Mexico Holdings LLC (Bankr. S.D. Tex. Case No. 11-
20090), Seahawk Drilling Management LLC (Bankr. S.D. Tex. Case No.
11-20091), Seahawk Offshore Management LLC (Bankr. S.D. Tex. Case
No. 11-20092), Energy Supply International LLC (Bankr. S.D. Tex.
Case No. 11-20093), Seahawk Global Holdings LLC (Bankr. S.D. Tex.
Case No. 11-20094), and Seahawk Drilling USA LLC (Bankr. S.D. Tex.
Case No. 11-20095) filed separate Chapter 11 petitions.
Berry D Spears, Esq., and Johnathan Christiaan Bolton, Esq., at
Fullbright & Jaworkski L.L.P., serve as the Debtors' bankruptcy
counsel. Jordan, Hyden, Womble, Culbreth & Holzer, P.C., serve as
the Debtors' co-counsel. Alvarez And Marsal North America, LLC,
is the Debtors' restructuring advisor. Simmons And Company
International is the Debtors' transaction advisor. Kurtzman
Carson Consultants LLC is the Debtors' claims agent.
The Debtors disclosed $504,897,000 in total assets and
$124,474,000 in total debts as of the Petition Date.
SEAHAWK DRILLING: Seeks to Sell Ranch-Related Assets
----------------------------------------------------
Katy Stech, writing for Dow Jones' Daily Bankruptcy Review,
reported that Seahawk Drilling Inc. has asked for the Court's
permission to sell ranch-related assets it owns, including a
storage building, a sleeping quarters, a Polaris ATV and several
Ford F-350 trucks, hunting blinds and two dozen deer-feeding bins.
DBR relates that the assets currently sit on a ranch near Sonora,
Texas, located about three hours northwest of San Antonio. Leases
for that land, which cost $63,200 a year, are set to expire
April 1.
The report says company officials estimate the hunting gear is
worth less than $30,000. Assets so small usually don't require an
auction or call for the typical disclosures.
Seahawk officials said it was probably best to leave the buildings
and gear there, selling them to the land's next leaseholders. It
would cost at least $5,000 to move everything offsite, they
estimate.
As reported in the Feb. 15, 2011 edition of the Troubled Company
Reporter, the Company has filed for Chapter 11 protection to
complete the sale of all assets to Hercules Offshore. A copy of
the Asset Purchase Agreement with Hercules is available for free
at http://bankrupt.com/misc/SEAHAWK_DRILLING_apa.pdf The
aggregate consideration for the Purchased Assets is: (a)
22,321,425 shares of Hercules Common Stock plus (b) cash in an
amount equal to $25,000,012. Using the closing stock price of
Hercules' stock as of Feb. 10, 2011, the Base Aggregate
Consideration would be valued at approximately $105 million before
any adjustments. The Base Aggregate Consideration is to be
payable at closing by the Purchaser to the Debtors.
About Seahawk Drilling
Houston, Texas-based Seahawk Drilling, Inc., engages in a jackup
rig business in the United States, Gulf of Mexico, and offshore
Mexico. It offers rigs and drilling crews on a day rate
contractual basis. Seahawk Drilling Inc. and various affiliates
filed for Chapter 11 bankruptcy protection on Feb. 11, 2011
(Bankr. S.D. Tex. Case Nos. 11-20088 thru 11-20095).
Berry D. Spears, Esq., and Johnathan Christiaan Bolton, Esq., at
Fullbright & Jaworkski L.L.P., serve as the Debtors' bankruptcy
counsel. Jordan, Hyden, Womble, Culbreth & Holzer, P.C., serve as
the Debtors' co-counsel. Alvarez And Marsal North America, LLC,
is the Debtors' restructuring advisor. Simmons And Company
International is the Debtors' transaction advisor. Kurtzman
Carson Consultants LLC is the Debtors' claims agent.
The Debtors disclosed $504,897,000 in total assets and
$124,474,000 in total debts as of the Petition Date.
SKI DMC: Voluntary Chapter 11 Case Summary
------------------------------------------
Debtor: Ski Dmc, Inc.
543 Lincoln Highway
Fairless Hills, PA 19030
Bankruptcy Case No.: 11-11737
Chapter 11 Petition Date: March 8, 2011
Court: U.S. Bankruptcy Court
Eastern District of Pennsylvania (Philadelphia)
Judge: Stephen Raslavich
Debtor's Counsel: Timothy Zearfoss, Esq.
LAW OFFICE OF LAWRENCE J. AVALLONE
525 S. Broad Street, 5th Floor
Philadelphia, PA 19107
Tel: (215) 735-5525
Fax: (215) 545-3817
E-mail: tzearfoss@aol.com
Estimated Assets: $100,001 to $500,000
Estimated Debts: $1,000,001 to $10,000,000
The Company did not file a list of creditors together with its
petition.
The petition was signed by David M. Constantini, president.
SL GREEN: Fitch Affirms Issuer Default Rating at 'BB+'
------------------------------------------------------
Fitch Ratings has affirmed the Issuer Default Rating of SL Green
Realty Corp. and its subsidiaries SL Green Operating Partnership,
L.P., and Reckson Operating Partnership, L.P.
Ratings affirmed:
SL Green Realty Corp.
-- IDR at 'BB+';
-- Perpetual preferred stock at 'BB-'.
SL Green Operating Partnership, L.P.
-- IDR at 'BB+';
-- Unsecured revolving credit facility at 'BB+';
-- Exchangeable senior notes at 'BB+'.
Reckson Operating Partnership, L.P.
-- IDR at 'BB+';
-- Senior unsecured notes at 'BB+';
-- Exchangeable senior debentures at 'BB+'.
In addition, Fitch has upgraded SL Green Operating Partnership
L.P.'s junior subordinated notes to 'BB' from 'BB-'.
The Rating Outlook is Stable.
The affirmations reflect SLG's credit strengths, including its
manageable lease maturity and debt expiration schedules, granular
tenant base and the company's maintenance of leverage and coverage
ratios appropriate for the rating category.
SLG's leverage ratio remains consistent with a 'BB+' rating, as
the company's net debt to recurring operating EBITDA ratio was
9.3 times (x) as of Dec. 31, 2010, up from 8.4x and 8.7x as of
Dec. 31, 2009 and 2008, respectively. However, when annualizing
SLG's December 2010 acquisitions, this ratio declines to the mid-
8.0x's as of Dec. 31, 2010.
SLG's fixed-charge coverage ratio (defined as recurring operating
EBITDA less capital expenditures and straight-line rents, divided
by interest expense, capitalized interest, and preferred stock
distributions) was 1.4x for the year ended Dec. 31, 2010, down
from 1.7x and 1.6x in 2009 and 2008, respectively. Coverage
declined primarily due to free rent periods offered to tenants,
combined with capital expenditure costs related to longer-term
leases signed in 2009 and 2010. Fitch expects coverage to improve
from 2010 levels as free rents decline and recurring capital
expenditure costs level off.
The company's portfolio benefits from tenant diversification with
the top 10 tenants representing only 29.8% of annual base rent.
Further, SLG has a manageable lease expiration schedule with only
30% of consolidated Manhattan rents expiring over the next five
years. While over 60% of suburban consolidated suburban property
rents expire over the next five years, the company's suburban
portfolio represents a fairly limited portion of SLG's total
portfolio.
Further supporting the ratings are the company's manageable debt
maturity schedule. Excluding the SLG's unsecured line of credit,
the company has no more than 10% of its debt maturing in any given
year between 2011 and 2015.
The affirmations are supported by SLG's unencumbered property pool
coverage of unsecured debt, which gives the company financial
flexibility as a source of contingent liquidity. Unencumbered
asset coverage of net unsecured debt (calculated as 2010
unencumbered property net operating income divided by a
conservative 8% capitalization rate) results in coverage of 1.7x,
which is strong for the rating category.
The ratings also point to the strength of SLG's management team
and its ability to maintain occupancy and liquidity and
demonstrate access to various types of capital throughout the
downturn. In addition, the company's ratios under its unsecured
credit facilities' financial covenants do not hinder the company's
financial flexibility.
Offsetting these strengths are Fitch's concerns regarding the
uncertain Midtown Manhattan leasing environment. While the New
York City leasing environment has strengthened over the last year,
the company has incurred significant costs in the form of tenant
improvements, leasing commissions and free rent incentives as
tenant inducements, which has placed pressure on SLG's fixed
charge coverage. In addition, a downturn in space demands from
the financial services industry, which accounts for 39% of SLG's
share of base rental revenue, may result in reduced cash flows or
values of SLG's properties.
The Stable Rating Outlook is driven by SLG's liquidity profile.
For the period Jan. 1, 2011 to Dec. 31, 2012, the company's
sources of liquidity (cash, availability under SLG's unsecured
revolving credit facility after an assumed stressed one-third
reduction in the commitment size upon renewal in 2012, and Fitch's
expectation of retained cash flows from operating activities after
dividends and distributions) covered uses of liquidity (pro rata
debt maturities and Fitch's expectation of recurring capital
expenditures) by 1.2x. However, this stressed analysis assumes
that no additional capital is raised to repay obligations, and SLG
has demonstrated good access to a variety of capital sources over
time. If maturing secured debt were refinanced at a rate of 80%
of current debt outstanding, liquidity coverage would improve to
2.3x.
The upgrade of SLG Operating Partnership's junior subordinated
notes to 'BB' from 'BB-' is based on the noteholders' ability to
demand full repayment of unpaid principal and interest in the
event of default, which generally consist of missed interest
(after allowable deferral periods) or principal payment at
maturity. These notes have no covenants or cross-default
provisions relative to SLG's corporate debt and are explicitly
stated to be subordinate to such indebtedness. The upgrade
results in these obligations being notched down one relative to
SLG's IDR.
The two-notch differential between SLG's IDR and its preferred
stock rating is consistent with Fitch's criteria for corporate
entities with a 'BB+' IDR. Based on Fitch's report, 'Equity
Credit for Hybrids and Other Capital Securities', SLG's preferred
stock is 75% equity-like and 25% debt-like since they are
perpetual and have no covenants but have a cumulative deferral
option in a going concern. Net debt plus 25% of preferred stock
to recurring operating EBITDA was 9.4x as of Dec. 31, 2010,
compared with 8.5x and 8.8x, as of Dec. 31, 2009 and Dec. 31,
2008, respectively.
These factors may have a positive impact on SLG's ratings:
-- Total net debt to recurring operating EBITDA sustaining below
7.5x for several quarters (leverage was 9.3x as of Dec. 31,
2010).
-- Fixed charge coverage sustaining above 2.0x for several
quarters (coverage was 1.4x for the 12 months ended Dec. 31,
2010).
These factors may have a negative impact on SLG's ratings:
-- Leverage sustaining above 8.5x for several quarters.
-- Fixed charge coverage sustaining below 1.5x for several
quarters.
-- A liquidity shortfall (base case liquidity coverage was 1.2x
as of Dec. 31, 2010)
SPRINGLEAF FINANCE: Fitch Maintains Negative Watch on 'B-' Rating
-----------------------------------------------------------------
Fitch Ratings maintains the Rating Watch Negative assigned to the
Issuer Default Ratings and debt ratings on Springleaf Finance,
Inc., and affiliates. Formerly known as American General Finance,
Inc., SPRING adopted its new name effective. Fitch originally
placed the 'B-' long-term IDR on Rating Watch Negative on Aug. 11,
2010.
Fitch maintains these ratings on Rating Watch Negative:
Springleaf Finance, Inc. (f.k.a. American General Finance, Inc.)
-- Long-term IDR 'B-'.
Springleaf Finance Corp. (f.k.a. American General Finance Corp.)
-- Long-term IDR 'B-';
-- Senior debt 'B-/RR4'.
AGFC Capital Trust I
-- Preferred stock 'CC/RR6'.
On Aug. 11, 2010, American International Group, Inc., announced
the sale of SPRING (then known as AGFI) to Fortress Investment
Group LLC (FIG; L-T IDR 'BBB' by Fitch). The sale was completed
on Nov. 30, 2010. The Rating Watch Negative reflected Fitch's
belief that new ownership and existing management may potentially
seek to engage in some type of business reorganization, up to and
including a restructuring of the firm's capital structure at some
point in the future. Such restructurings are often viewed
negatively from a ratings perspective.
The maintaining of the Rating Watch Negative is driven by
continued uncertainty of the future capital structure and
funding profile of SPRING. Resolution of the Rating Watch
will be dependent upon the outcome of capitalization initiatives
by Fortress, and subsequent capitalization structure of SPRING.
Fitch would view negatively prolonged indecision on formalization
of SPRING's longer-term funding plan, since the company faces
substantial debt maturities in 2012.
Albeit improving, operating performance for the first nine
months of 2010 remains weak. SPRING reported a pre-tax
loss of $161 million for the first nine months of 2010 versus
a $595 million loss for the comparable period in 2009 as
provision for loan losses improved to $359 million from
$860 million. Fitch does not expect any major improvement in
operating performance over the near term as the company continues
to manage a predominately real estate secured portfolio in a
challenging economic environment.
High unemployment, depressed real estate values, and portfolio
contraction continued to pressure asset quality metrics for the
first nine months of 2010. Asset quality metrics have begun to
stabilize but it is still early to tell if the positive trend will
continue. Annualized net losses to average owned receivables
decreased to 3.66% for the nine months ended Sept. 30, 2010, from
3.77% for the comparable period in 2009. Fitch expects loss rates
to remain elevated until unemployment declines and housing values
stabilize. Fitch believes non-mortgage portfolios could see
additional deterioration due to the pressure on consumers from a
rising debt burden.
SPRING's funding profile is weak due to reliance on repayments
of current receivables to fund new originations, repay debt
maturities, and fund operations. SPRING has approximately
$2.2 billion of debt maturities coming due for the remainder of
2011, which Fitch views as manageable based on current cash
balances and scheduled repayments of receivables.
Without the implementation of a long term funding plan, meeting
debt maturities of $2.1 billion in 2012 will be challenging.
Fitch expects cash balances on hand to decline significantly by
year-end 2011 (YE11) as current balances will be used to satisfy
2011 maturities and cash flow from amortization of receivables
should be much lower as the majority of short-lived receivables
should have repaid in 2011. Therefore, barring an asset sale,
additional funding facility or securitization, SPRING may have
insufficient flexibility to address debt maturing in 2012.
SPRING was incorporated in Indiana in 1927 as successor to a
business started in 1920. From Aug. 29, 2001, until the
completion of its sale in November 2010, SPRING was an indirect
wholly owned subsidiary of AIG. The consumer finance products of
SPRING and its affiliate include non-conforming real estate
mortgages, consumer loans, retail sales finance and credit-related
insurance.
STHI HOLDING: Moody's Assigns 'B2' Corporate Family Rating
----------------------------------------------------------
Moody's Investors Service assigned a B2 Corporate Family
Rating and a B2 Probability of Default Rating to STHI Holding
Corporation, the parent company of Sterigenics Holdings, Inc., in
connection with its purchase by GTCR, a Chicago based private
equity firm, from current equity sponsors Silverfleet Capital and
PPM America. Concurrently, Moody's assigned a B2 rating to the
proposed $475 million senior secured notes due 2018 that will be
issued, in conjunction with new Class A and Class B equity units,
to finance the acquisition. The leveraged buyout transaction is
expected to close by the end of March 2011, for an estimated total
cash purchase price of $675 million, subject to certain
adjustments. The outlook for the ratings is stable.
The rating actions are subject to the conclusion of the
transaction, as proposed, and Moody's review of final
documentation.
Moody's assigned these ratings:
-- Corporate Family Rating of B2;
-- Probability of Default Rating of B2; and
-- $475 million Senior Secured Notes due 2018, rated B2 (LGD 4,
54%).
The outlook for the ratings is stable.
Upon closing and repayment, these ratings will be withdrawn:
Sterigenics International, Inc.
-- Corporate Family Rating of B3;
-- Probability of Default Rating of Caa1;
-- $30 million Senior Secured Revolver due 2011, rated B3 (LGD
3, 34%); and
-- $290 million Senior Secured Term Loan B due 2013, rated B3
(LGD 3, 34%).
Rating Rationale
The B2 Corporate Family Rating is supported by Sterigenics'
leading position in the contract sterilization market. The
contract sterilization industry has high barriers to entry and
customer switching costs, leading to relatively stable market
shares and long-term relationships with customers. These factors,
along with the company's focus on sterilizing relatively recession
resistant medical devices, have resulted in positive revenue and
EBITDA growth, even through the recent economic downturn. Longer-
term Moody's expects continued growth in the industry as medical
device manufacturers increasingly outsource sterilization
services, particularly as such manufacturers' older facilities
require costly upgrades and investments.
The B2 rating is constrained by the significant financial leverage
that is being taken on in the LBO transaction. Including Moody's
Standard Analytic Adjustments, pro forma debt to EBITDA would have
approximated 7.2 times for the twelve months ended December 31,
2010. This includes 75% debt attribution to the hybrid Class A
and Class B equity units. Excluding the hybrid adjustment,
adjusted debt to EBITDA would have approximated 5.4 times.
Sterigenics' business has very high fixed operating costs and
capital expenditures, which limits free cash flow and can lead to
significant volatility in profit margins based on variation in
revenue. Sterigenics may build sterilization capacity for
customers in anticipation of demand, which carries the risk of
lower than expected returns on capital if volumes do not
materialize as quickly as expected. Other risks include the
company's small absolute size and supplier and customer
concentration. The ratings also reflect the potential for event
risk associated with the highly sensitive nature of the company's
raw materials, including radioactive isotopes and toxic gases.
Because of some of the inherent risks in the business, Moody's
believes available liquidity, such as cash balances and revolver
access, is of particular importance to Sterigenics. While the LBO
transaction results in a considerable increase in leverage versus
recent levels, Moody's believes the liquidity profile will be
good, thus lending support to the B2 rating.
Given the considerable leverage, small absolute size and inherent
business risks, Moody's does not anticipate an upgrade in the
near-term. If over time the company can effectively manage its
growth, achieve reasonable returns on its capital investments, and
achieve better than expected EBITDA growth such that adjusted
leverage can be sustained below 5.5 times (including the hybrid
adjustment) Moody's could upgrade the ratings. An upgrade would
also have to be supported by a very strong liquidity profile.
Moody's could downgrade the ratings if the company experiences a
material reduction of volumes from a significant customer or a
material adverse event related to litigation or business
disruption. In addition, if negative free cash flow is sustained
for more than two quarters or adjusted leverage were to increase
to 7.5 times, Moody's could downgrade the ratings. Further, any
deterioration in liquidity could trigger a negative rating action.
Sterigenics, headquartered in Oak Brook, IL, is a provider
of contract sterilization and ionization services for medical
devices, food safety and advanced materials applications.
The company operates 38 licensed operating facilities in North
America, Europe and Asia. For the twelve months ended
December 31, 2010, the company recognized net revenue of
approximately $277 million.
STHI HOLDING: S&P Assigns Corporate Credit Rating at 'B'
--------------------------------------------------------
Standard & Poor's Ratings Services said that it assigned its 'B'
corporate credit rating to Oak Brook, Ill.-based STHI Holding
Corp., parent company of sterilization services provider
Sterigenics International Inc. The outlook is stable.
At the same time, S&P assigned to the proposed notes of STHI its
'B' credit rating and '4' recovery rating, indicating S&P's
expectation for average (30% to 50%) recovery of principal in the
event of default.
In addition, S&P affirmed its 'B' credit rating on Sterigenics,
along with all ratings on the company's outstanding debt issues.
"The low speculative-grade rating on STHI, a provider of contract
sterilization and ionization services, primarily reflects the
highly leveraged financial risk profile that will result from
GTCR's acquisition of the company," said Standard & Poor's credit
analyst Gail I. Hessol. S&P characterizes STHI's business profile
as weak, taking account of its relatively narrow focus.
As of Dec. 31, 2010, pro forma debt to trailing-12-months EBITDA
was 8.3x. Debt in this calculation includes the new Class A and B
units that will be issued to STHI's owners (GTCR and certain
members of management), the capitalization of operating leases,
and asset retirement obligations. In accordance with S&P's hybrid
capital criteria, S&P views these units as debt-like because S&P
expects them to be refinanced with debt over the medium term.
STHI's debt leverage would still be a high 5.8x if the units were
treated as equity. With minimal required debt amortization over
the next five years and accretion of the units, S&P expects
financial risk to remain high, notwithstanding growth in EBITDA.
SW OWNERSHIP: Taps Munsch Hardt as Bankruptcy Counsel
-----------------------------------------------------
SW Ownership LLC asks for authorization from the U.S. Bankruptcy
Court for the Western District of Texas to employ Munsch Hardt
Kopf & Harr, P.C., as bankruptcy counsel.
Munsch Hardt will, among other things:
a. advise the Debtor of its responsibilities to its creditors
and direct necessary communications with them, including
attendance at meetings and negotiations with
representatives of creditors, their counsel, and other
parties-in-interest;
b. assist the Debtor in negotiations with secured creditors,
including, but not limited to, issues regarding use of
cash collateral, DIP financing, and holders of mechanics'
and materialmens' liens;
c. consult with the U.S. Trustee, any statutory committee
that may be formed, and all other creditors and parties-
in-interest concerning the administration of this case;
and
d. assist the Debtor in analyzing and appropriately treating
the claims of creditors.
Munsch Hardt will be paid based on the hourly rates of its
professionals:
David C. Mattka, Shareholder $540
Joe E. Marshall, Shareholder $440
Jay H. Ong, Shareholder $375
Richard C. King, Jr., Shareholder $350
Cara S. Kelly, Associate $290
Lee J. Pannier, Associate $285
Allen Dickey, Shareholder $465
Shareholders $300-$600
Associates $235-$295
Legal Assistants $190-$235
To the best of the Debtor's knowledge, Munch Hardt is a
"disinterested person" within the meaning of section 101(14) of
the Bankruptcy Code.
Dallas, Texas-based SW Ownership, LLC, is a single member limited
liability company owned by SW Ownership Holdings LLC. It owns an
approximately 1600 acre residential community project known as
Skywater Over Horseshoe Bay that is currently being developed in
Llano and Burnet counties.
SW Ownership, LLC, filed for Chapter 11 bankruptcy protection on
Feb. 28, 2011 (Bankr. W.D. Tex. Case No. 11-10485). The Debtor
estimated its assets at $50 million to $100 million and debts at
$10 million to $50 million.
TAMACH GABLES: Case Summary & 9 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Tamach Gables Square LLC
13615 S. Dixie Highway, Suite 114-513
Miami, FL 33176
Bankruptcy Case No.: 11-15983
Chapter 11 Petition Date: March 7, 2011
Court: United States Bankruptcy Court
Southern District of Florida (Miami)
Judge: A. Jay Cristol
Debtor's Counsel: Ronald G. Neiwirth, Esq.
FOWLER WHITE BURNETT, P.A.
1395 Brickell Ave 14 Fl
Miami, FL 33131
Tel: (305) 789-9200
E-mail: rgn@fowler-white.com
Estimated Assets: $10,000,001 to $50,000,000
Estimated Debts: $10,000,001 to $50,000,000
The petition was signed by Oscar Vega, president of MLB Real
Estate Investment Corp.
Debtor's List of nine Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Sun American Bank Foreclosure $20,000,000
c/o Gregory Grossman proceeding
Astigarraga Davis dated March 2009
Mullins & Grossman PA
701 Brickell Ave.,
13th Floor
Miami, FL 33131
MLB Gables Square LLC $3,150,000
13615 S. Dixie Highway
Suite 114-513
Miami, FL 33176
Frezo Financial $1,900,000
Services, LC
3850 Bird Road
Suite 901
Miami, FL 33146
Poll Real Estate $812,128
Investments Corp.
13615 S. Dixie Highway
Suite 113-514
Miami, FL 33176
Miami-Dade County Tax Real Estate Taxes $422,107
Collector for 2009
140 West Flagler St.
14th Floor
Miami, FL 33130
Miami-Dade County Tax Real Estate Taxes $387,541
Collector for 2010
140 West Flagler St.
14th Floor
Miami, FL 33130
Gables Square Twelve $267,268
Nine Developers
13616 S. Dixie Highway
Suite 114-513
Miami, FL 33176
Infante Zumpano Hudson $49,633
& Milloch, LLC
Carlos Gonzalez Guarantor of bank $25,900
loan
TELECONNECT INC: Adds Details on HEM Acquisition
------------------------------------------------
Teleconnect Inc. filed an amendment to a previously filed Form 8-K
current report filed on Oct. 19, 2010 and the previously filed 8-
K/A report filed on Dec. 28, 2010 related to the purchase of
Hollandsche Exploitatie Maatschappij BV.
On Oct. 15, 2010, Teleconnect Inc. completed the acquisition of
Hollandsche Exploitatie Maatschappij BV. HEM, a Dutch company
established in 2007, that has developed the age validation system
'Ageviewers'. Teleconnect had previously disclosed its intention
to acquire HEM in a Form 8-K current report filing dated May 4,
2010.
The purchase of HEM was subject to an assessment of the viability
of HEM's business plan by Teleconnect's management. Also, a
special written meeting of the stockholders was called and 91.69%
of the shareholders of the Company ratified the Board's decision
to complete this purchase.
The Company's assessment included, but was not limited to, an
analysis of the employed technology and HEM's intellectual
property rights, as well as an analysis of the market. In
addition, a report on the value of HEM and the launch readiness of
Ageviewers were requested from independent third parties. During
the Company's assessment, HEM's management demonstrated the
viability of the Ageviewers solution by entering into contracts
with over 20 alcohol outlets in The Netherlands for a period of 36
months - which was previously defined in HEM's business plan as a
milestone to be achieved before Sept. 30, 2010.
On Oct. 15, 2010, Teleconnect and HEM formalized a contract before
a Public Notary in The Netherlands, whereby Teleconnect has
purchased HEM in exchange for 12% of its outstanding share of
common stock - post issuance - of Teleconnect.
Teleconnect identified risk factors which could affect the success
of HEM's business. For instance, the resistance from commercial
parties that benefit from the sales of alcohol and tobacco is
expected to be well organized. Teleconnect management believes
that despite this possible resistance and other obstacles, an
effective solution such as Ageviewers is likely to be implemented.
Teleconnect expects that in due time, the Ageviewers system can
play a prominent role in the prevention of sales of alcohol and
tobacco to minors by retail businesses.
On Oct. 15, 2010, Teleconnect issued 675,505 shares of its
restricted common stock in connection with its acquisition of
Hollandsche Exploitatie Maatschappij BV in reliance upon the
exemption from registration provided by Section 4(2) under the
Securities Act of 1933. The beneficial owners of HEM, through its
present company Wilroot BV which wholly owned HEM and which was
purchased entirely by Teleconnect, were Sciarone Interim Sales BV,
Marcus Communicatie BV, HITD Information Technology BV, and DLB
finance & consultancy BV., who received 190,830 shares, 236,427
shares, 236,427 shares, and 11,821 shares of common stock of
Teleconnect, respectively. DLB Finance & Consultancy BV was
already the owner of 291,180 shares of common stock before this
new issuance. Mr. Dirk L. Benschop is the owner of DLB Finance &
Consultancy BV and is also a director and the President of
Teleconnect Inc.
A full-text copy of Teleconnect, Inc. Pro-Forma Financial
Statements is available for free at:
http://ResearchArchives.com/t/s?74a7
About Teleconnect Inc.
Based in Breda, in The Netherlands, Teleconnect Inc. (OTC BB:
TLCO) Teleconnect Inc. (initially named Technology Systems
International Inc.) was incorporated under the laws of the State
of Florida on November 23, 1998.
Serving as a telecommunications service provider in Spain for
almost 9 years, the Company never fully reached expectations and
decided late in 2008 to change its course of business. In
November 2009, 90% of the Company's telecommunication business was
sold to a Spanish group of investors, and on October 15, 2010, the
Company completed the acquisition of Hollandsche Exploitatie
Maatschappij BV (HEM), a Dutch entity established in 2007. HEM's
core business involves the age validation of consumers when
purchasing products which cannot be sold to minors, such as
alcohol or tobacco. The Company regards this age validation
business as its new strategic direction. The Dutch companies
acquired in 2007 (Giga Matrix, The Netherlands, 49% and Photowizz,
The Netherlands, 100%) are considered to function complementary to
this new service offering.
Through the purchase of HEM and its ownership in Photowizz and
Giga Matrix the Company now controls all four pillars under its
business model: the manufacturing and leasing of electronic age
validation equipment, the performance of age validation
transactions remotely, the performance of market surveys and the
broadcasting of in-store commercial messages using the age
validation equipment in between age checks.
The Company's balance sheet at September 30, 2010, showed
US$1,936,685 in total assets, US$3,447,165 in total liabilities,
all current, and a stockholders' deficit of US$1,510,480.
Coulter & Justus, P.C., in Knoxville, Tenn., expressed substantial
doubt about the Company's ability to continue as a going concern.
The independent auditors noted that the Company has suffered
recurring losses from operations and has a net capital deficiency
in addition to a working capital deficiency.
TELKONET INC: Joseph Mahaffey Resigns From Board of Directors
-------------------------------------------------------------
Joseph D. Mahaffey submitted his resignation as member of the
Telkonet, Inc. Board of Directors and Audit Committee Chair
effective Feb. 28, 2011.
On March 3, 2011, Telkonet announced the addition of Gerrit
Reinders as Executive Vice President of Global Sales & Marketing.
The move follows Telkonet's recent corporate rebranding and the
release of its new EcoSmart Product Suite. Gerrit will be
responsible for accelerating customer and revenue growth,
overseeing all new customer engagement and acquisition activities,
including sales, marketing and product management for Telkonet's
products and services.
A 20-year industry veteran with a proven track record of driving
profitable revenue growth, Gerrit joins Telkonet from Energy
Focus, Inc where, in 2010, he led the growth of the early stage
company over the prior year by 280% to $35 million. Prior to his
recruitment to Energy Focus, Gerrit held the position of Director
of Global Energy and Sustainability Programs at Johnson Controls
where he was awarded the "Chairman's Award", the highest employee
recognition offered at Johnson Controls, for delivering a new
transformational business model which yielded triple bottom line
results. Having held executive sales & marketing positions with
Invensys, Whisper Communications and multiple roles within Johnson
Controls, Gerrit possesses extensive experience with Clean
Technology, Smart Grid and Performance Contracting. Gerrit is a
long-standing active member of the board of directors of the
National Association of Energy Services Companies and has also
served on the board of the Energy Services Coalition. While at
Johnson Controls, Gerrit was an executive member of the
Environmental Roundtable and the Sustainability Advisory Board and
represented Johnson Controls for the EPA Climate Leaders and
Energy Star programs. Gerrit actively participates as a public
speaker and author in the Clean Technology space contributing to
publications including Building Operating Management, Facilities
Maintenance Solutions, Corporate Real Estate Leader Magazine and
Consulting - Specifying Engineer.
About Telkonet
Milwaukee, Wisconsin-based Telkonet, Inc. is a clean technology
company that develops and manufactures proprietary energy
efficiency and smart grid networking technology.
The Company's balance sheet at Sept. 30, 2010, showed $16.33
million in total assets, $6.15 million in total liabilities, $2.79
million in total long-term liabilities, and stockholders' equity
of $5.95 million.
RBSM LLP, in New York, expressed substantial doubt about the
Company's ability to continue as a going concern, following the
Company's 2009 results. The independent auditors noted that of
the Company's significant operating losses in the current year and
in the past.
TERRESTAR CORP: Proposes Blackstone as Fin'l Advisor
----------------------------------------------------
TerreStar Corporation and TerreStar Holdings Inc. seek the
Court's authority to employ Blackstone Advisory Partners LP as
their financial advisor nunc pro tunc to the Petition Date.
The TSC Debtors and the TSN Debtors previously engaged Blackstone
Advisory in April 2010 after interviewing several other potential
candidates. From April to October 2010, the Debtors paid
Blackstone $1,317,054 in fees and expenses.
On November 18, 2010, the Original Engagement Letter was amended
effective as of October 2010 to provide that Blackstone Advisory
was retained by the TSN Debtors. On November 23, 2010, the Court
approved the TSN Debtors' application on an interim basis and, on
December 22, 2010, on a final basis.
The TSC Debtors contend that they have been working closely with
Blackstone Advisory since April 2010, and thus, the firm has
become intimately familiar with the TSC Debtors' business,
affairs, assets and contractual arrangements. Members of the
firm have worked closely with the TSC Debtors in analyzing their
financial positions and assisting in evaluating various
restructuring alternatives.
Specifically, the TSC Debtors need Blackstone Advisory to perform
these services:
(a) Assist in the evaluation of TSC's and TerreStar Holdings'
business and prospects;
(b) Assist in the development of TSC's and TerreStar Holdings'
long-term business plan and related financial projections;
(c) Assist in the development of financial data and
presentations to TSC's and TerreStar Holdings' Board of
Directors, various creditors and other third parties;
(d) Analyze various restructuring scenarios and the potential
impact of these scenarios on the recoveries of various
stakeholders impacted by the restructuring;
(e) Provide strategic advice with regard to restructuring or
refinancing TSC's and TerreStar Holdings' obligations;
(f) Evaluate TSC's and TerreStar Holdings' debt capacity and
alternative capital structures;
(g) Participate in negotiations among TSC and TerreStar
Holdings and their creditors, suppliers, lessors and other
interested parties;
(h) Value securities offered by TSC and TerreStar Holdings in
connection with a restructuring;
(i) Advise TSC and TerreStar Holdings and negotiate with
lenders with respect to potential waivers or amendments of
various debt and preferred stock instruments;
(j) Advise and assist TSC and TerreStar Holdings in evaluating
a potential financing, contact potential sources of
capital and assist TSC and TerreStar Holdings in
negotiating and consummating financing;
(k) Analyze TSC's and TerreStar Holdings' financial liquidity
and evaluate alternatives to improve liquidity;
(l) Assist in arranging debtor-in-possession financing for
TSC and TerreStar Holdings;
(m) Provide expert witness testimony concerning any financial
advisory services provided by the Advisor;
(n) Provide general advice on asset sale alternatives; and
(o) Provide other advisory services as are customarily
provided in connection with the analysis and negotiation
of a restructuring as reasonably requested.
The TSC Debtors propose to pay Blackstone amounts based on a fee
structure, which provides for:
(a) A monthly advisory fee of $50,000;
(b) A transaction fee equal to $500,000 payable upon
consummation of any restructuring pursuant to a bankruptcy
proceeding;
(c) A DIP financing fee of 1% of the face amount of any new
DIP financing provided by a party that is not an Affiliate
of the TSC Debtors arranged by Blackstone;
(d) A debt financing fee of 1% of the face amount of any new
debt financing provided by a party that is not is not an
Affiliate of the TSC Debtors arranged by the Advisor in
connection with a plan of reorganization;
(e) An equity financing fee of 3% of the total amount of new
equity financing provided by a party that is not an
Affiliate of TSC and TerreStar Holdings and arranged by
the Advisor in connection with a plan of reorganization;
(f) A M&A transaction fee, if requested to pursue a Sale
Transaction, of 1.25% of the amount of the transaction in
excess of $180 million; and
(g) Reasonable out-of-pocket expenses in connection with the
services provided.
The TSC Debtors note that they have paid Blackstone $166,071 for
services rendered from November 8, 2010 through February 16,
2011.
In addition, the TSC Debtors agree to indemnify and hold harmless
Blackstone and its affiliates and their partners, members,
officers, directors, employees and agents and each other person,
if any, controlling the Advisor or any of the Advisor's
affiliates related to, arising out of or in connection with the
retention.
Steven Zelin, a senior managing director of Blackstone, assures
the Court that his firm is a "disinterested person" as the term
is defined under Section 101(14) of the Bankruptcy Code.
About TerreStar Corp. and TerreStar Networks
TerreStar Corporation and TerreStar Holdings, Inc., filed
voluntary Chapter 11 petitions with the U.S. Bankruptcy Court for
the Southern District of New York on Feb. 16, 2011.
TSC's Chapter 11 filing joins the bankruptcy proceedings of
TerreStar Networks Inc. and 12 other affiliates, which were filed
on Oct. 19, 2010 . The October Chapter 11 cases are procedurally
consolidated under TSN's Case No. 10-15446 under Judge Sean H.
Lane.
TSC is the parent company of each of the October Debtors. TSC
has four wholly owned direct subsidiaries: TerreStar Holdings,
Inc., TerreStar New York Inc., Motient Holdings Inc., and MVH
Holdings Inc.
TSC is currently seeking to have its case deemed jointly
administered with the cases of seven of the October Debtors under
the caption In re TerreStar Corporation, et al., Case No. 11-
10612 (SHL). The seven Debtor entities who seek joint
administration with TSC are:
* TerreStar New York Inc.,
* Motient Communications Inc.
* Motient Holdings Inc.,
* Motient License Inc.,
* Motient Services Inc.,
* Motient Ventures Holdings Inc., and
* MVH Holdings Inc.
TSC is a Delaware corporation whose main asset is the equity in
non-Debtor TerreStar 1.4 Holdings LLC, which has the right to use
a "1.4 GHz terrestrial spectrum" pursuant to 64 licenses issued
by the Federal Communication Commission. TSC also has an
indirect 89.3% ownership interest in TerreStar Network, Inc.,
which operates a separate and distinct mobile communications
business. TerreStar Holdings is a Delaware corporation that
directly holds 100% of the interests in 1.4 Holdings LLC.
TerreStar Networks Inc. or TSN, the principal operating entity of
TSC, developed an innovative wireless communications system to
provide mobile coverage throughout the United States and Canada
using satellite-terrestrial smartphones. The system, however,
required an enormous amount of capital expenditures and initially
produced very little in the way of revenue. TSN's available cash
and borrowing capacity were insufficient to cover its funding;
thus, forcing TSN to seek bankruptcy protection in October 2010.
TSC estimated assets and debts of $100,000,001 to $500,000,000 in
its Chapter 11 petition.
Ira S. Dizengoff, Esq., at Akin, Gump, Strauss, Hauer & Feld, LLP,
in New York, serves as counsel for the TSC and TSN Debtors.
Garden City Group is the claims and notice agent. Blackstone
Advisory Partners LP is the financial advisor.
The Garden City Group, Inc., is the claims and noticing agent in
the Chapter 11 cases. Otterbourg Steindler Houston & Rosen P.C.
is the counsel to the Official Committee of Unsecured Creditors
formed in TSN's Chapter 11 cases. FTI Consulting, Inc., is the
Committee's financial advisor
Bankruptcy Creditors' Service, Inc., publishes TerreStar
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by TerreStar Networks Inc. and its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
TERRESTAR CORP: Harbinger Cites Concerns on Akin Gump Retention
---------------------------------------------------------------
Harbinger Capital Partners LLC and certain of its affiliated and
managed funds and Highland Capital Management L.P. and certain of
its managed and affiliated funds, in their capacity as
substantial holders of preferred stock of TerreStar Corporation
and lenders under certain prepetition bridge loans made to TSC,
submitted a limited objection to the Court to ensure that the
order applying Akin Gump Strauss Hauer & Feld LLP's employment
expressly restricts the Firm from representing any of the TSC
Debtors in certain matters as to which the interests of the TSC
Debtors and the TSN Debtors are in conflict.
Debra A. Dandeneau, Esq., at Weil Gotshal & Manges LLP, in New
York, says that the Preferred Stockholders generally have no
objection to Akin Gump's representation of the TSC Debtors; but
nevertheless caution that the interests of the TSC Debtors are
not aligned and are inconsistent with those of the TSN Debtors,
like:
-- the claims asserted against TSC by Elektrobit, Inc., a
supplier of TSN;
-- the claims asserted by Jefferies & Company, Inc. arising
from the engagement letter executed between TSC and
Jefferies; and
-- the prosecution and defense of any intercompany claims
asserted between any of the TSC Debtors, on the one hand,
and any of the TSN Debtors, on the other hand.
Ms. Dandeneau notes that Elektrobit brought a lawsuit against TSC
prior to the Petition Date, which seeks recovery of approximately
$26 million largely on account of amounts allegedly owed by TSN
to Elektrobit under a certain agreement for which TSC was
allegedly liable pursuant to a guarantee. She contends that the
Preferred Stockholders believe that TSC may have defenses to any
Elektrobit Claims asserted that may place TSC at odds with the
TSN Debtors and any strategies of the TSN Debtors in addressing
the Elektrobit Claims.
With regard to the Jefferies Claims, Ms. Dandeneau contends that
Akin Gump has already attempted to pin all liability on TSC while
defending the TSN Debtors from the Jefferies Claims.
Jefferies filed proofs of claim against certain of the TSN
Debtors asserting liquidated fees amounting $1,347,991, and total
unliquidated and contingent fees amounting $5,000,000 and
$7,500,000.
For the Intercompany Claims, Ms. Dandeneau relates that they may
include claims by certain of the TSC Debtors against certain of
the TSN Debtors, and vice versa. They may include a claim
seeking the avoidance of a $32 million capital contribution by
Motient Ventures Holdings, Inc. to TSN within the two years
before the commencement of TSN's Chapter 11 case.
As with the Elektrobit Claims and the Jefferies Claims, the TSC
Debtors should be able to rely upon counsel whose sole purpose is
to further the interests of the TSC Debtors, even at the expense
of the TSN Debtors, Ms. Dandeneau asserts. She argues that any
claims asserted by the Debtors from one group against another
necessarily places Akin Gump on both sides of any claims
litigation, where the interests of the two distinct groups of
Debtors clearly differ.
"Clearly excluding these matters from the scope of [Akin Gump's]
representation of the TSC Debtors at this time will therefore
eliminate any uncertainty about Akin's role going forward in
these matters and afford the TSC Debtors sufficient time to
engage conflicts counsel to address these issues, thereby
mitigating any disruptive and harmful effect a later withdrawal
by Akin [Gump] would have on the TSC Debtors," Ms. Dandeneau
emphasizes.
She adds that "it will also ensure that the representation
received by the TSC Debtors will be provided by a law firm free
from the specter of conflicting interests and divided loyalties."
Akin Gump as Counsel to TSC Debtors
Ira S. Dizengoff, Esq., at Akin Gump Strauss Hauer & Feld LLP, in
New York, submitted to the Court a fourth supplemental
declaration in relation to his firm's engagement in the Debtors'
Chapter 11 cases.
Under his latest declaration, Mr. Dizengoff relates that Akin
Gump is intimately familiar with the business of TerreStar
Corporation and TerreStar Holdings Inc., also known as the
February Debtors as they filed for bankruptcy on February 16,
2011, and their financial affairs; and is well qualified to
provide the services required by the February Debtors in
connection with their Chapter 11 cases.
Akin Gump has served as counsel to certain of the Debtor entities
since 2007, providing a broad array of services including general
corporate, tax, regulatory and securities services, Mr. Dizengoff
relates. He adds that more recently, before the commencement of
their cases, the February Debtors asked Akin Gump to provide
general bankruptcy and restructuring advice, and in the weeks
leading up to the February Petition Date, Akin Gump was actively
involved in the preparation of the February Debtors' cases.
From the Chapter 11 filing of the TSN Debtors and the Other TSC
Debtors on October 19, 2010, Akin Gump has separately tracked the
fees and expenses associated with its representation of the TSN
Debtors and the Other TSC Debtors from those associated with its
representation of the February Debtors, and Akin Gump was paid
directly by the TSN Debtors and the Other TSC Debtors for those
fees and expenses, Mr. Dizengoff reveals. However, he notes,
after the administrative consolidation of the Other TSC Debtors
with the February Debtors, Akin Gump began tracking the fees and
expenses of the Other TSC Debtors with the February Debtors.
Accordingly, Akin Gump believes that it is uniquely situated to
represent the February Debtors and to deal effectively and
efficiently with the potential legal issues and problems that may
arise in the context of their cases. Mr. Dizengoff assures the
Court that Akin Gump is not a creditor of the February Debtors.
In the one year period before the February Petition Date, Akin
Gump has received a $4,873,516 payment for services rendered to
the February Debtors and their affiliates, exclusive of any
amounts received from Akin Gump's representation of the Other TSC
Debtors and the TSN Debtors in their Chapter 11 cases, Mr.
Dizengoff discloses. He adds that at the outset of the
retention, Akin Gump received an advance payment retainer which,
depending upon the final recording of all time and expense
charges, the firm estimates will be remaining in the approximate
amount of $65,000 for additional professional services performed
and to be performed and expenses incurred and to be incurred in
connection with the February Debtors' Chapter 11 cases.
Akin Gump is willing to be retained by the TSC Debtors as their
counsel and intends to apply to the Court for allowances of
compensation and reimbursement of out-of-pocket expenses incurred
after the February Petition Date in connection with their Chapter
11 cases, Mr. Dizengoff says.
Akin Gump will bill for its services at its standard hourly
rates, which currently are:
Professional Hourly Rate
------------ -----------
Partners $525 - $1,150
Counsel $475 - $835
Associates $325 - $600
Paraprofessionals $125 - $290
The current hourly rates for the Akin Gump attorneys with primary
responsibility for this matter are:
Hourly
Professional Rate
------------ ------
Ira S. Dizengoff, Partner for Financial Restructuring $975
Arik Preis, Partner for Financial Restructuring $700
Sarah Link Schultz, Partner for Financial Restructuring $700
Mr. Dizengoff assures the Court that Akin Gump is disinterested
and represents no interest adverse to the Debtors and their
creditors and, therefore, is capable of fulfilling its fiduciary
duty to the Debtors.
About TerreStar Corp. and TerreStar Networks
TerreStar Corporation and TerreStar Holdings, Inc., filed
voluntary Chapter 11 petitions with the U.S. Bankruptcy Court for
the Southern District of New York on Feb. 16, 2011.
TSC's Chapter 11 filing joins the bankruptcy proceedings of
TerreStar Networks Inc. and 12 other affiliates, which were filed
on Oct. 19, 2010 . The October Chapter 11 cases are procedurally
consolidated under TSN's Case No. 10-15446 under Judge Sean H.
Lane.
TSC is the parent company of each of the October Debtors. TSC
has four wholly owned direct subsidiaries: TerreStar Holdings,
Inc., TerreStar New York Inc., Motient Holdings Inc., and MVH
Holdings Inc.
TSC is currently seeking to have its case deemed jointly
administered with the cases of seven of the October Debtors under
the caption In re TerreStar Corporation, et al., Case No. 11-
10612 (SHL). The seven Debtor entities who seek joint
administration with TSC are:
* TerreStar New York Inc.,
* Motient Communications Inc.
* Motient Holdings Inc.,
* Motient License Inc.,
* Motient Services Inc.,
* Motient Ventures Holdings Inc., and
* MVH Holdings Inc.
TSC is a Delaware corporation whose main asset is the equity in
non-Debtor TerreStar 1.4 Holdings LLC, which has the right to use
a "1.4 GHz terrestrial spectrum" pursuant to 64 licenses issued
by the Federal Communication Commission. TSC also has an
indirect 89.3% ownership interest in TerreStar Network, Inc.,
which operates a separate and distinct mobile communications
business. TerreStar Holdings is a Delaware corporation that
directly holds 100% of the interests in 1.4 Holdings LLC.
TerreStar Networks Inc. or TSN, the principal operating entity of
TSC, developed an innovative wireless communications system to
provide mobile coverage throughout the United States and Canada
using satellite-terrestrial smartphones. The system, however,
required an enormous amount of capital expenditures and initially
produced very little in the way of revenue. TSN's available cash
and borrowing capacity were insufficient to cover its funding;
thus, forcing TSN to seek bankruptcy protection in October 2010.
TSC estimated assets and debts of $100,000,001 to $500,000,000 in
its Chapter 11 petition.
Ira S. Dizengoff, Esq., at Akin, Gump, Strauss, Hauer & Feld, LLP,
in New York, serves as counsel for the TSC and TSN Debtors.
Garden City Group is the claims and notice agent. Blackstone
Advisory Partners LP is the financial advisor.
The Garden City Group, Inc., is the claims and noticing agent in
the Chapter 11 cases. Otterbourg Steindler Houston & Rosen P.C.
is the counsel to the Official Committee of Unsecured Creditors
formed in TSN's Chapter 11 cases. FTI Consulting, Inc., is the
Committee's financial advisor
Bankruptcy Creditors' Service, Inc., publishes TerreStar
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by TerreStar Networks Inc. and its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
TOYS 'R' US: Fitch Assigns 'B-/RR5' Rating to New $1.1 Bil. Loan
----------------------------------------------------------------
Fitch Ratings has assigned a 'B-/RR5' rating to Toys 'R' Us,
Inc.'s subsidiary, Toys 'R' Us - Delaware, Inc.'s new $1.1 billion
senior secured term loan ($700 million tranche 1 due 2016 and
$400 million tranche 2 due 2018). Proceeds of the offering will
be used to repay the existing $698 million senior secured term
loan due 2016 and the $500 million 7.625% senior unsecured notes
at Toys 'R' Us, Inc. (holding company) due 2011. Therefore, upon
repayment, Fitch's 'B-/RR5' rating on the $700 million senior
secured term loan and 'CC/RR6' rating on the $500 million 7.625%
senior notes will be withdrawn. Based on the strengthening loan
capital markets in the last six months, Fitch expects the new
senior secured term loan will have better pricing than the
existing term loan.
Fitch's 'B' Issuer Default Rating and issue ratings on Toys
and its various subsidiary entities are currently on Rating
Watch Positive pending the outcome of the company's initial
public offering announced in May 2010, and considering Fitch's
expectation that the company's operating performance will
not deteriorate from current levels, which will result in a
strengthening in fiscal 2011 credit metrics.
The IPO registration is currently active. The estimated size of
the IPO of around $800 million and the expected use of the net
proceeds have not changed. Upon the completion of the IPO, Toys
will pay a termination fee to the sponsors. The remaining balance
of the net proceeds of the offering will be used primarily for
debt repayment, which Fitch expects will result in leverage
(adjusted debt/EBITDAR) decreasing to below 5.5 times for fiscal
2011 ending Jan. 28, 2012. This would be an improvement from 6.1x
in fiscal 2010 (ending Jan. 29, 2011).
The rating on the new issue reflects Fitch's recovery analysis
based on the liquidation value of the company in a distressed
scenario. Applying this value across the capital structure
results in below-average recovery prospects (11%-30%) for the
senior secured term loan. The senior secured term loan is secured
by intellectual property and second liens on accounts receivable
and inventory of TOY-Delaware and the guarantors.
Fitch maintains the Rating Watch Positive for these ratings:
Toys 'R' Us, Inc.
-- IDR 'B';
-- Senior Unsecured Notes 'CC/RR6'.
Toys 'R' Us - Delaware, Inc.
-- IDR 'B';
-- Secured Revolver 'BB/RR1';
-- Secured Term Loan 'B-/RR5';
-- Senior Secured Notes 'B-/RR5';
-- Senior Unsecured Notes 'CCC/RR6';
Toys 'R' Us Property Co. I, LLC (previously known as TRU 2005 RE
Holding Co. I, LLC)
-- IDR 'B';
-- Senior Unsecured Notes 'BB/RR1'.
Toys 'R' Us Property Co. II, LLC (previously known as Giraffe
Holdings, LLC)
-- IDR 'B';
-- Senior Unsecured Notes 'BB-/RR2';
Toys 'R' Us Europe, LLC (previously known as Toys 'R' Us (UK)
Ltd.)
-- IDR 'B';
-- Secured Revolver 'BB/RR1'.
TOYS 'R' US: Moody's Assigns 'B1' Rating to New $400 Mil. Loan
--------------------------------------------------------------
Moody's Investors Service assigned a B1 rating to Toys "R" Us-
Delaware, Inc.'s new $400 million secured term loan due 2018. At
the same time, Moody's downgraded to B3 the senior unsecured
debentures of Toys-Delaware and the senior unsecured notes of Toys
"R" Us Property Company I, LLC. All other ratings for Toys "R"
Us, Inc, including the B1 Corporate Family and Probability of
Default ratings, were affirmed. Toys has an SGL-2 Speculative
Grade Liquidity rating and a stable rating outlook.
New ratings assigned:
Toys "R" Us-Delaware, Inc.
-- $400 million senior secured term loan due 2018 at B1 (LGD 3,
45%)
Ratings downgraded:
-- Toys "R" Us Property Company I, LLC
-- $928 million senior unsecured notes due 2017 to B3 (LGD 5,
78%) from B2 (LGD 5, 74%)
Toys "R" Us Delaware, Inc.
-- $22 million 8.75% debentures due 2021 to B3 (LGD 5, 78%) from
B2 (LGD 5, 74%)
Ratings affirmed and LGD point estimates adjusted include:
Toys "R" Us, Inc.
-- Corporate Family Rating at B1
-- Probability of Default Rating at B1
-- $396 million senior unsecured notes due 2013 at B3 (LGD 6,
95%) from B3 (LGD 6, 93%)
-- $406 million senior unsecured notes due 2018 at B3 (LGD 6,
95%) from B3 (LGD 6, 93%)
-- Speculative Grade Liquidity rating at SGL-2
Toys "R" Us Delaware, Inc.
-- $700 million senior secured term loan due 2016 at B1 (LGD 3,
45%) from B1 (LGD 3, 42%)
-- $350 million senior secured notes due 2016 at B1 (LGD 3, 45%)
from B1 (LGD 3, 42%)
Toys "R" Us Property Company II, LLC
-- $716 million senior secured notes at Ba1 (LGD 2, 13%)
Ratings Rationale
"The affirmation of Toys' B1 Corporate Family Rating acknowledges
that despite the soft sales environment, the company continues to
perform well through a combination of disciplined inventory
management, effective merchandising, and expense control." stated
Moody's Senior Analyst Charlie O'Shea. "It also considers that
the new $400 million term loan is overall leverage neutral as
proceeds will be combined with a $100 million revolver draw to
repay $500 million in unsecured notes."
The B1 rating on the new $400 million secured term loan considers
the credit support provided by the senior unsecured notes below it
in the consolidated capital structure as well as its collateral
package consisting of second liens on assets securing the $1.85
billion unrated asset-based revolving credit facility.
The downgrade to B3 of the Toys Delaware debentures and the Propco
I senior unsecured notes results from their weakened position in
the capital structure due to the repayment of the $500 million in
Toys unsecured notes below, and the increase of $400 million in
secured debt above, these securities.
The stable outlook and SGL-2 Speculative Grade Liquidity rating
reflect Moody's view that Toys continues to be well-positioned in
the toy retailing segment, and incorporates the significant
flexibility provided by its unrated $1.85 billion secured
revolving credit facility that expires in August 2015.
Ratings could be upgraded if debt/EBITDA is sustained below 5
times. This could occur either as a result of improvements in
operating performance, or as a result of a successful IPO and
application of proceeds sufficient to reduce debt. Ratings could
be downgraded if debt/EBITDA was sustained above 5.5 times, which
could occur either as a result of a degradation in operating
performance or the institution of a more aggressive financial
policy.
Toys "R" Us, Inc., is a specialty retailer of toys, with annual
revenues of around $11 billion.
TOYS 'R' US: S&P Assigns 'BB-' Rating to Proposed $400 Mil. Loan
----------------------------------------------------------------
Standard & Poor's Ratings Services said that it assigned its 'BB-'
issue rating and '1' recovery rating to Toys "R" Us Delaware
Inc.'s (a wholly owned subsidiary of Toys "R" Us Inc.) proposed
$400 million tranche B-2 term loan due 2018. Concurrently, Toys
is amending its exiting $700 million term loan due 2016 into a new
$700 million tranche B-1 term loan with essentially the same
terms. The $400 million tranche B-2 term loan ranks pari passu to
the company's $700 million tranche B-1 term loan due 2016 and $350
million senior secured notes due 2016, and benefits from the same
collateral and guarantee package. The company intends to use the
proceeds from the new $400 million B-2 term loan, along with
borrowings from its revolving credit facility, to repay Toys "R"
US Inc.'s $500 million unsecured notes due 2011.
Toys "R" Us Inc.'s ratings remain on CreditWatch with positive
implications. The CreditWatch placement follows the company's S-1
filing, under which it plans to sell up to $800 million in common
stock. Toys plans to use the bulk of the proceeds to repay debt.
If completed, Standard & Poor's expects debt reduction to result
in meaningfully better credit protection measures. S&P estimates
that pro forma debt leverage will improve to the mid-5.0x area,
from current levels of about 6.5x for the fourth quarter ended
Jan. 29, 2011. Furthermore, S&P expects that EBITDA coverage of
interest would increase to about 2.4x on a pro forma basis, from
1.8x.
Toys has achieved adequate operating performance despite sales
pressure due to sharp execution, merchandising, and cost-control
initiatives that have helped mitigate the effects of competitive
pressure and protected profitability. Operating results remain
satisfactory, with sales for the important fourth quarter ended
Jan. 29, 2011, increasing 2%, reflecting new Toys "R" Us Express
stores and 1.8% domestic comparable-store sales growth, partly
offset by a 3.7% decline in the international division. EBITDA
for the quarter remained relatively stable as slight improvements
in gross margin due to a shift in sales mix were offset by
increasing selling expenses to support the store openings.
Liquidity is adequate, supported by $1.1 billion availability
under its revolving credit facility after considering a $125
million minimum availability covenant. S&P expects that the
continued integration of the toy and juvenile businesses and a
focus on operational enhancements should support operating results
in 2011.
S&P plan to resolve this CreditWatch listing when the IPO is
completed, with a likely outcome of a one-notch upgrade to 'B+'
from 'B'. Additional support for an upgrade comes from S&P's
expectation that the company's operating results will remain good
because of management's success with its merchandising strategy
and cost-control initiatives, as well as the positive effect of
the store conversion program. S&P will also review and analyze
the company's business prospects and financial policies in the
future.
Ratings List
Toys "R" Us Inc.
Corporate Credit Rating B/Watch Pos/--
New Ratings
Toys "R" Us Delaware Inc.
$400 mil tranche B-2 term loan
due 2018 BB-
Recovery Rating 1
TRIBUNE CO: Court Starts Two-Week Trial on Plan Confirmation
------------------------------------------------------------
The two-week trial to consider confirmation of the plans of
reorganization for Tribune Company and its subsidiaries commenced
on Monday, March 7, 2011, before Judge Kevin J. Carey of the U.S.
Bankruptcy Court for the District of Delaware.
Pending before the Court are two plans of reorganization proposed
by (i) the Debtors, the Official Committee of Unsecured Creditors,
Angelo, Gordon & Co., L.P., Oaktree Capital Management, L.P., and
JPMorgan Chase Bank, N.A., and (ii) Aurelius Capital Management,
LP, Deutsche Bank Trust Company Americas, Law Debenture Trust
Company of New York, and Wilmington Trust Company. At one time,
there were four competing plans for the Debtors. Two groups of
plan proponents -- one composed of certain holders of "Step One"
Senior Loan Claims and another composed of King Street Acquisition
Company, LLC, King Street Capital, L.P. and Marathon Asset
Management, L.P., on behalf of certain funds and managed accounts,
in their capacity as Bridge Loan Lenders -- dropped their plans
after reaching separate settlement agreements with the Debtors.
The Plan sponsored by the Debtors settles most, although not all,
claims arising from the $13.7 billion leveraged buyout of Tribune
Company in 2007 led by Samuel Zell. Under the Tribune Plan, the
company would emerge under the control of lenders JPMorgan and
hedge funds Angelo Gordon and Oaktree.
The Plan sponsored by Aurelius proposes to continue litigation on
fraudulent transfer claims resulting from the LBO[I interchanged
with the one above]. Criticizing the Tribune Plan, David Zensky,
Esq., at Akin Gump Strauss Hauer & Feld, on behalf of Aurelius,
said the settlement under the Tribune Plan is a "pretty lousy
settlement," according to a March 7 report by Reuters.
Judge Carey May Reject Both Plans
According to a notice filed in Court, the first 10 days of the
confirmation hearing, from March 7 through March 18, will be
dedicated to the presentation of evidence by the parties that have
duly identified witnesses and exhibits in compliance with the
Court-approved discovery scheduling order for plan confirmation
related to why the Plans should be confirmed or not confirmed.
Any party that filed an objection to confirmation of either of the
Plans and who wishes to cross-examine any of the witnesses
presented by the two groups of plan proponents must do so during
the Evidentiary Hearing.
Only opening arguments and ongoing discovery disputes and other
preliminary matters were heard on March 7. Witness examinations
began March 8.
At the March 7 hearing, Judge Carey warned he might reject both
proposals for the Debtors, according to Reuters.
"Both [sides] may be so effective in your objections that you
might convince me that neither [plan] should be confirmed," Judge
Carey said, according to Reuters. "What then?"
Reuters said Judge Carey might have been trying to nudge the two
sides to work things out among themselves rather than slug it out
in court, but there were no immediate signs of compromise.
Parties who filed objections to confirmation of either Plan will
be given an opportunity to present their arguments at a subsequent
hearing before the Bankruptcy Court following the Evidentiary
Hearing at a date and time to be announced with further notice.
Given the possibility of appeal by whoever loses, the judge is
likely to issue a written opinion sometime after the confirmation
hearing ends, Bloomberg News said.
No Influence Over Settlement of LBO Claims
David S. Kurtz, a managing director of Lazard Freres & Co., denied
that a plan to settle claims related to the 2007 LBO was tainted
by the influence of Donald J. Liebentritt, Tribune's chief
restructuring officer, an ally of Mr. Zell.
Mr. Kurtz, who testified today, related that Mr. Liebentritt told
him that, "notwithstanding his relationship with [Mr.] Zell, that
now he was general counsel of Tribune." Mr. Liebentritt said "his
duty was to maximize value for all creditors of the estate," Mr.
Kurtz further related, according to Bloomberg.
About Tribune Co.
Headquartered in Chicago, Illinois, Tribune Co. --
http://www.tribune.com/-- is a media company, operating
businesses in publishing, interactive and broadcasting, including
ten daily newspapers and commuter tabloids, 23 television
stations, WGN America, WGN-AM and the Chicago Cubs baseball team.
The Company and 110 of its affiliates filed for Chapter 11
protection on December 8, 2008 (Bankr. D. Del. Lead Case No. 08-
13141). The Debtors proposed Sidley Austin LLP as their counsel;
Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel;
Lazard Ltd. and Alvarez & Marsal North America LLC as financial
advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As
of December 8, 2008, the Debtors have $7,604,195,000 in total
assets and $12,972,541,148 in total debts. Chadbourne & Parke LLP
and Landis Rath LLP serve as co-counsel to the Official Committee
of Unsecured Creditors. AlixPartners LLP is the Committee's
financial advisor. Landis Rath Moelis & Company serves as the
Committee's investment banker. Thomas G. Macauley, Esq., at
Zuckerman Spaeder LLP, in Wilmington, Delaware, represents the
Committee in connection with the lawsuit filed against former
officers and shareholders for the 2007 LBO of Tribune.
Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy
News. The newsletter tracks the chapter 11 proceeding undertaken
by Tribune Company and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
TRIBUNE CO: Proposes Amendment NO. 4 to L/C Agreement
-----------------------------------------------------
Tribune Company and its debtor affiliates seek authority from
Judge Kevin Carey of the U.S. Bankruptcy Court for the District of
Delaware to enter into Amendment No. 4 to a Letter of Credit
Agreement, amending the Postpetition Letter of Credit dated
December 8, 2008, among Barclays Bank plc, as administrative agent
and issuing bank, and a syndicate of other financial institutions,
and the Debtors. The Amended Letter of Credit Agreement provides
a letter of credit facility in an amount up to $30 million.
The Debtors' letter of credit facility terminates on April 10,
2011. Amendment No. 4 extends the Termination Date of the Letter
of Credit Agreement to (a) April 10, 2012, (b) the effective date
of a plan of reorganization under the Chapter 11 cases, or (c)
other date on which the Commitments terminate. The significant
elements of the Letter of Credit Facility remain largely unchanged
under Amendment No. 4 to the Letter of Credit Agreement, except
for the Termination Date, according to Bryan F. Krakauer, Esq., at
Sidley Austin LLP, in Chicago, Illinois.
The Debtors, Mr. Krakauer says, need to ensure continued access to
the Letter of Credit Facility to adequately support their
insurance programs and business operations. In the absence of the
proposed extension of the Letter of Credit Facility, as amended,
serious harm to the Debtors and their estates could occur, which
may include third parties and insurers declining to conduct
business with the Debtors, he adds.
The preservation, maintenance and enhancement of the going concern
value of the Debtors are significant to the Debtors' successful
reorganization. This facility is important to the Debtors'
ability to maintain workers' compensation and other required
insurance or other obligations in support of their normal business
operations.
The Debtors will continue to perform their reimbursement and other
obligations, and provide the required LC Cash Collateral, under
the Amended Letter of Credit Agreement, in an amount at least
equal to 105% of the aggregate amount of Letter of Credit
Liabilities. The LC Cash Collateral is the amounts deposited into
the collateral account from time to time pursuant to the Amended
Letter of Credit Agreement.
The Debtors will also grant to the LC Agent, the Issuing Bank and
the Lenders priority in payment with respect to the obligations of
Tribune Company and other Debtors under the Amended Letter of
Credit Agreement over any and all administrative expenses of the
kind specified in Sections 503(b) and 507(b) of the Bankruptcy
Code other than in respect of the Carve-Out.
A full-text copy of Amendment No. 4 is available for free at
http://bankrupt.com/misc/tribune08245.pdf
In a separate filing with the Court, the Debtors and Barclays seek
the Court's authority to file under seal a fee letter accompanying
Amendment No. 4. The Fee Letter needs to be filed under seal
because of the harm that would ensure if the highly confidential
information contained in the Fee Letter became public information,
Mr. Krakauer says.
In connection with the provision of the Amended Letter of Credit
Facility, Tribune Co. has, as is customary, agreed to pay certain
fees and expenses to Barclays pursuant to a separate,
confidential, fee letter. Fees Tribune Co. pays in connection
with the financing of its operations would not, typically, be
something that Barclays, as a Lender, would disclose to anyone.
However, recognizing that a certain degree of transparency and
public scrutiny is a necessary part of the bankruptcy process, the
Debtors intend to disclose the Fee Letter to the U.S. Trustee.
The Court will convene a hearing on the Motion on March 22.
Objections are due March 17.
About Tribune Co.
Headquartered in Chicago, Illinois, Tribune Co. --
http://www.tribune.com/-- is a media company, operating
businesses in publishing, interactive and broadcasting, including
ten daily newspapers and commuter tabloids, 23 television
stations, WGN America, WGN-AM and the Chicago Cubs baseball team.
The Company and 110 of its affiliates filed for Chapter 11
protection on December 8, 2008 (Bankr. D. Del. Lead Case No. 08-
13141). The Debtors proposed Sidley Austin LLP as their counsel;
Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel;
Lazard Ltd. and Alvarez & Marsal North America LLC as financial
advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As
of December 8, 2008, the Debtors have $7,604,195,000 in total
assets and $12,972,541,148 in total debts. Chadbourne & Parke LLP
and Landis Rath LLP serve as co-counsel to the Official Committee
of Unsecured Creditors. AlixPartners LLP is the Committee's
financial advisor. Landis Rath Moelis & Company serves as the
Committee's investment banker. Thomas G. Macauley, Esq., at
Zuckerman Spaeder LLP, in Wilmington, Delaware, represents the
Committee in connection with the lawsuit filed against former
officers and shareholders for the 2007 LBO of Tribune.
Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy
News. The newsletter tracks the chapter 11 proceeding undertaken
by Tribune Company and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
TRIBUNE CO: Debtors, Committee Object to Aurelius Plan
------------------------------------------------------
Aurelius Capital Management, LP, Deutsche Bank Trust Company
Americas, Law Debenture Trust Company of New York, and Wilmington
Trust Company filed with the U.S. Bankruptcy Court for the
District of Delaware, on Feb. 25, 2011, a further amended joint
plan of reorganization for the resolution of all outstanding
claims against and interest in all of the Debtors in Chapter 11
cases of Tribune Company and its debtor affiliates.
The Amended Noteholder Plan provides, among other things, these
modifications:
-- The rights or remedies, if any, of Warren Beatty to or
interests in motion picture, television and other rights to
and interests in the Dick Tracy character granted to Mr.
Beatty pursuant to an agreement dated Aug. 28, 1985,
between Mr. Beatty and Tribune Media Services, Inc., will
not be affected.
-- For all federal income tax purposes, all parties will treat
the transfer of the Litigation Trust Assets to the
Litigation Trust, including any amounts or other assets
subsequently transferred to the Litigation Trust for the
benefit of the Holders entitled to receive proceeds from
the Litigation Trust Assets, and those other beneficiaries
as described in the LT Directives (the Litigation
Trust Agreement, the Noteholder Plan, the Confirmation
Order and the Litigation Distribution Orders) as (a) a
transfer of the Litigation Trust Assets directly to the
Distribution Trust Beneficiaries and, to the extent the
Litigation Trust Assets are allocable to Disputed General
Unsecured Claims, to the Distribution Trust DOF, followed
by (b) the transfer by the Distribution Trust Beneficiaries
to the Distribution Trust of the Litigation Trust Assets in
exchange for beneficial interests in the Distribution Trust
in accordance with the Noteholder Plan, followed by (c) the
transfer by the Litigation Trust Beneficiary to the
Litigation Trust of the Litigation Trust Assets in exchange
for a beneficial interest in the Litigation Trust in
accordance with the Noteholder Plan. Accordingly, the
Distribution Trust Beneficiaries will be treated for United
States federal income tax purposes indirectly as the
grantors and owners of their respective share of the
Litigation Trust, and of the Litigation Trust Assets, and
the Distribution Trust directly as the grantor and owner of
the Litigation Trust and of the Litigation Trust Assets.
-- For United States federal income tax purposes, the
Litigation Trust will be treated as a liquidating trust
pursuant to Tax Regulations section 301.7701-4(d) and as a
grantor trust pursuant to IRC sections 671-677. To the
extent consistent with Revenue Procedure 94-45, 1994-2 C.B.
684 and not otherwise inconsistent with this Noteholder
Plan, the Noteholder Plan will be construed so as to
satisfy the requirements for liquidating trust status. The
Distribution Trust will be treated as both the grantor and
the deemed owner of the Litigation Trust and (ii) any items
of income, deduction, credit and loss of the Litigation
Trust will be allocated for federal income tax purposes to
the Litigation Trust Beneficiary. The Litigation Trust
will at all times be administered so as to constitute a
domestic trust for United States federal income tax
purposes.
-- Any claims or causes of action under Chapter 5 of the
Bankruptcy Code previously commenced or that could have
been commenced by or on behalf of the Debtors' Estates
against shareholders arising out of the redemption of their
stock in connection with the Leveraged ESOP Transaction
will, as of the Effective Date, be discontinued without
prejudice, and the Debtors, the Official Committee of
Unsecured Creditors, or the Estates will be deemed, as of
the Effective Date, to have abandoned any and all right to
further pursue those claims and causes of action pursuant
to Section 554 of the Bankruptcy Code.
-- Pursuant to Section 1123(b)(3)(A) of the Bankruptcy Code
and Rule 9019 of the Federal Rule of Bankruptcy Procedure,
and in consideration of the distributions and other
benefits provided under the Noteholder Plan, the Noteholder
Plan implements and incorporates by reference the
Intercompany Claims Settlement for purposes of (i)
allocating the total distributable enterprise value among
Tribune and its Subsidiaries and (ii) setting the Allowed
amounts of Intercompany Claims; provided, however, that
before any Holder of an unsecured Claim against Tribune or
a Guarantor Debtor receives Postpetition Interest on
account of that Claim from any source other than from
recoveries on account of Creditors' Trust Interests, the
prepetition Intercompany Claims against the relevant Debtor
must receive payment in full. The Noteholder Plan
constitutes a request to authorize and approve the
compromise and settlement of all Intercompany Claims
pursuant to the Intercompany Claims Settlement. Entry of
the Confirmation Order will constitute the Bankruptcy
Court's approval, as of the Effective Date of the
Noteholder Plan, of the Intercompany Claims Settlement
and the Bankruptcy Court's finding that the Intercompany
Claims Settlement is in the best interests of the Debtors,
the Reorganized Debtors, their respective Estates, and the
Holders of Claims and Interests, and is fair, equitable and
reasonable.
-- To the extent any of (a) the New York State Department of
Taxation and Finance, (b) the Commonwealth of Pennsylvania
Department of Revenue, (c) the State of California
Franchise Tax Board, (d) GreatBanc Trust Company, (e) the
State of Illinois, Department of Revenue and Employment
Security or (f) the Internal Revenue Service has set-off or
other recoupment rights against the Debtors under the
Bankruptcy Code, those rights are preserved. For the
avoidance of doubt, no provision contained herein shall
operate to preemptively bar the IRS from asserting valid
claims against third parties, including but not limited to
the IRS's claim for excise taxes resulting from the
Leveraged ESOP Transaction.
A full-text copy of the Feb. 25 Amended Plan is available for free
at http://bankrupt.com/misc/Tribune_AureliusPlanFeb25.pdf
A blacklined copy of the Feb. 25 Amended Plan is available for
free at http://bankrupt.com/misc/Tribune_AureliusPlanRed25.pdf
Plan Objections
The Debtors, the Official Committee of Unsecured Creditors,
Angelo, Gordon & Co., L.P., Oaktree Capital Management, L.P., and
JPMorgan Chase Bank, N.A., object to confirmation of the Joint
Plan of Reorganization proposed by Aurelius Capital Management,
L.P., Deutsche Bank Trust Company Americas, Law Debenture Trust
Company of New York, and Wilmington Trust Company.
The DCL Plan proponents assert that the Noteholder Plan fails to
satisfy these requirements of Bankruptcy Code and thus cannot be
confirmed:
(a) A plan must be accepted by at least one class of impaired
creditors.
(b) A plan must satisfy the treatment of impaired classes of
claims and provide adequate means for its implementation.
(c) A plan that is rejected by classes of impaired creditors
must satisfy the cramdown requirements of Section 1129(b)
and, of course, provide the Court with information
sufficient to determine it has done so.
(d) A plan must be proposed in good faith and not as a
litigation tactic that will diminish the value of the
estates and unduly delay creditor distributions.
Norman Pernick, Esq., at Cole, Schotz, Meisel, Forman & Leonard,
P.A., counsel to the Debtors, filed with the Court a declaration
in support of the Joint Objection.
Certain members of the Tribune Company Employee Compensation
Defendants Group join in the Joint Objection of the DCL Plan
Proponents to confirmation of the Noteholder Plan.
About Tribune Co.
Headquartered in Chicago, Illinois, Tribune Co. --
http://www.tribune.com/-- is a media company, operating
businesses in publishing, interactive and broadcasting, including
ten daily newspapers and commuter tabloids, 23 television
stations, WGN America, WGN-AM and the Chicago Cubs baseball team.
The Company and 110 of its affiliates filed for Chapter 11
protection on December 8, 2008 (Bankr. D. Del. Lead Case No. 08-
13141). The Debtors proposed Sidley Austin LLP as their counsel;
Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel;
Lazard Ltd. and Alvarez & Marsal North America LLC as financial
advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As
of December 8, 2008, the Debtors have $7,604,195,000 in total
assets and $12,972,541,148 in total debts. Chadbourne & Parke LLP
and Landis Rath LLP serve as co-counsel to the Official Committee
of Unsecured Creditors. AlixPartners LLP is the Committee's
financial advisor. Landis Rath Moelis & Company serves as the
Committee's investment banker. Thomas G. Macauley, Esq., at
Zuckerman Spaeder LLP, in Wilmington, Delaware, represents the
Committee in connection with the lawsuit filed against former
officers and shareholders for the 2007 LBO of Tribune.
Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy
News. The newsletter tracks the chapter 11 proceeding undertaken
by Tribune Company and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
VP CHARLOTTE: Case Summary & Largest Unsecured Creditor
-------------------------------------------------------
Debtor: VP Charlotte, LLC
dba Stonewall Jackson LLC
5751 Airport Drive
Charlotte, NC 28208
Bankruptcy Case No.: 11-30592
Chapter 11 Petition Date: March 8, 2011
Court: U.S. Bankruptcy Court
Western District of North Carolina (Charlotte)
Judge: George R. Hodges
Debtor's Counsel: Richard M. Mitchell, Esq.
MITCHELL & CULP, PLLC
1001 Morehead Square Drive, Suite 330
Charlotte, NC 28203
Tel: (704) 333-0630
Fax: (704) 333-4975
E-mail: rmmatty@mitchellculp.com
Scheduled Assets: $3,243,000
Scheduled Debts: $2,500,000
The petition was signed by Vilas Patel, manager.
The list of unsecured creditors filed together with its petition
contains only one entry:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Fannie Mae -- $2,500,000
14221 Dallas Parkway, Suite 1000
Dallas, TX 75254-2916
WB SANCTUARY: Can Employ Looper Reed as Primary Bankruptcy Counsel
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas has
granted WB Sanctuary Development Partners, LP, permission to
employ the law firm of Looper Reed & McGraw, P.C, as its primary
bankruptcy counsel, effective as of the bankruptcy petition filing
date.
Looper Reed will, among other things:
a. give the Debtor legal advice with respect to its duties and
powers;
b) assist the Debtor in the investigation of its assets,
liabilities and financial condition, the operation of its
business, and any other matter relevant to the case or to the
formulation of a plan or plans of reorganization; and
c) assist the Debtor in the preparation and filing of its
schedules and statement of financial affairs and any other
pleading or document necessary to be filed, including but not
limited to obtaining entry of a cash collateral order if
necessary.
The Bankruptcy Court is satisfied that Looper Reed has no
connection with the Debtor, Debtor's creditors or any other party
in interest, and that the firm does not hold or represent any
interest adverse to the Debtor or its estate.
About WB Sanctuary
Dallas, Texas-based WB Sanctuary Development Partners, LP, was
organized in 2007 for the purposed of acquiring approximately
67.323 acres of raw land located in Harris County, Texas for the
purpose of building a primarily residential subdivision called
"The Sanctuary." The Company's general partner is WB Sanctuary
GP, LLC. The Company filed for Chapter 11 bankruptcy protection
on December 6, 2010 (Bankr. S.D. Tex. Case No. 10-41169). Micheal
W. Bishop, Esq., at Looper Reed, serves as the Debtor's bankruptcy
counsel. In its schedules, the Debtor disclosed $1,400,005 in
assets and $10,104,446 in liabilities.
WESTCLIFF MEDICAL: Can Employ K&E as Special Corporate Counsel
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California
has approved the amended application of Westcliff Medical
Laboratories, Inc., and BioLabs, Inc., for the employment of
Kirkland & Ellis LLP as their special corporate counsel, effective
as of May 19, 2010.
K&E will, among other things:
* assist the Debtors and Levene, Neale, Bender, Yoo & Brill
LLP, the Debtors' corporate counsel, in drafting documents
and taking actions that may be necessary to consummate the
sale of the Debtors' business;
* assist the Debtors in preparing all documents and taking all
actions necessary for the Debtors to maintain their
Corporate status in good standing; and
* assist and advise the Debtors and LNBYB regarding corporate
matters that arose prior to the petition date and that arise
after the Petition Date.
In the amended application, the Debtors sought to expand the scope
of K&E's employment to include services rendered to Parthenon
Investors II, LP, as the majority shareholder of BioLabs, William
Kessinger, as a member of the board of both the Debtors, FTI
Consulting, Inc., as the provider of CRO and CFO services to the
Debtors, and Matthew Pakkala, as FTI's professional providing CRO
services to the Debtors, in connection with the Federal Trade
Commission's inquiry into circumstances surrounding the sale of
the Debtors' business. FTI had raised concerns that the sale of
the business as a going concern to the Buyer might implicate anti-
competitive issues in the marketplace.
As reported in the TCR on June 4, 2010, Kirkland & Ellis will be
paid based on the hourly rates of its personnel:
Partners $550-$995
Associates $320-$660
Paraprofessionals $155-$280
Ryan Bennett, a partner at Kirkland & Ellis, assured the Court
that the firm is disinterested as that term is defined in Section
101(14) of the Bankruptcy Code.
About Westcliff Medical
Santa Ana, California-based Westcliff Medical was, prior to the
sale of substantially all of its assets, which closed on June 16,
2010, the operator of approximately 170 branded, stand-alone,
patient service center laboratories and STAT labs. Westcliff
filed a Chapter 11 petition on May 19, 2010, in Santa Ana,
California (Bankr. C.D. Calif. Case No. 10-16743). Ron Bender,
Esq., Jacqueline L. Rodriguez, Esq., Todd M. Arnold, Esq., and
John-Patrick M. Fritz, Esq., at Levene, Neale, Bender, Yoo &
Brill, LLP, in Los Angeles, Calif., assist the Debtor in its
restructuring effort. In its schedules, the Debtor listed
$61,210,303 in assets and $66,244,135 in liabilities. Parent
BioLabs Inc. also filed for Chapter 11. The parent has no assets
aside from owning Westcliff.
WESTCLIFF MEDICAL: Plan Filing Period Extended to March 15
----------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California
has extended Wescliff Medical Laboratories, Inc. and BioLabs,
Inc.'s exclusive period to file a plan to March 15, 2011, and
their exclusive period to solicit acceptances of the plan to
May 14, 2011.
About Westcliff Medical
Santa Ana, California-based Westcliff Medical was, prior to the
sale of substantially all of its assets, which closed on June 16,
2010, the operator of approximately 170 branded, stand-alone,
patient service center laboratories and STAT labs. Westcliff
filed a Chapter 11 petition on May 19, 2010, in Santa Ana,
California (Bankr. C.D. Calif. Case No. 10-16743). Ron Bender,
Esq., Jacqueline L. Rodriguez, Esq., Todd M. Arnold, Esq., and
John-Patrick M. Fritz, Esq., at Levene, Neale, Bender, Yoo &
Brill, LLP, in Los Angeles, Calif., assist the Debtor in its
restructuring effort. In its schedules, the Debtor listed
$61,210,303 in assets and $66,244,135 in liabilities. Parent
BioLabs Inc. also filed for Chapter 11. The parent has no assets
aside from owning Westcliff.
WHITTON CORP: Can Hire William G Sigeske Accountancy as Accountant
------------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Nevada has granted
Whitton Corporation and South Tech Simmons 3040C, LLC, permission
to employ William G. Sigesky Accountancy Corporation as the
Debtors' accountant, effective as of Jan. 27, 2011.
Sigeske will provide the requisite accounting services to prepare
and file the Debtors' federal tax returns.
The Court is satisfied that Sigeske does not represent or hold any
interest to the Debtors and their respective estates or creditors,
and that the accounting firm is a "disinterested person" as that
term is defined in Sec. 101(14) of the Bankruptcy Code.
Sigeske's current and customary rates are $275 per hour. Staff's
hourly rates are $75.
Payment of compensation in excess of $24,000 will be subject to
the approval of the Court.
Henderson, Nevada-based Whitton Corporation filed for
Chapter 11 bankruptcy protection on December 5, 2010 (Bankr. D.
Nev. Case No. 10-32680). Brett A. Axelrod, Esq., and Anne M.
Loraditch, Esq., at Fox Rothschild LLP, in Las Vegas, Nev., serve
as the Debtor's bankruptcy counsel. The Debtor estimated its
assets and debts at $10 million to $50 million.
South Tech Simmons 3040C, LLC, filed a separate petition on
Dec. 8, 2010 (Bank. D. Nev. Case No. 10-32857).
WHITTON CORP: Files List of 20 Largest Unsecured Creditors
----------------------------------------------------------
Whitton Corporation the U.S. Bankruptcy Court for the District of
Nevada a list of its 20 largest unsecured creditors:
Creditor Nature of Claim Amount
-------- --------------- ------
Hudson Americas, LLC, as 835 and 855 Seven $8,000,000
servicer Hills Dr.
for Wells Fargo Bank, N.A. Henderson, NV
c/o Robert Kinas, Esq., Snell
& Wilmer
3800 Howard Hughes Pkwy.,
Suite 1000
Las Vegas, NV 89169
Hudson Americas, LLC, as 1000 Stephanie St. $3,672,574
servicer Henderson, NV
for Wells Fargo Bank, N.A.
c/o Robert Kinas, Esq., Snell
& Wilmer
3800 Howard Hughes Pkwy.,
Suite 1000
Las Vegas, NV 89169
Bank of America 26,941 sq. ft. $3,596,743
c/o Rodney M. Jean, Esq. industrial on
Lionel Sawyer & Collins 2.52 acres
300 South Fourth St, Ste. 1700 3950 E. Sunset
Las Vegas, NV 89101 Las Vegas, NV
German American Capital 1220 and 1250
Corporation Glendale Sparks, NV $3,314,710
c/o Aron M. Oliner
Duane Morris LLP
One Market Plaza Spear St.
Tower #2200
San Francisco, CA 94105
Hudson Americas, LLC, as 2455 W. Cheyenne $2,799,294
servicer Las Vegas, NV
for Wells Fargo Bank, N.A.
c/o Robert Kinas, Esq., Snell
& Wilmer
3800 Howard Hughes Pkwy.,
Suite 1000
Las Vegas, NV 89169
Bank of Las Vegas 2475 Cheyenne
c/o Nile Leatham, Esq. North Las Vegas, NV $2,714,213
Kolesar & Leatham, Chtd.
3320 W. Sahara Ave., Ste. 380
Las Vegas, NV 89102
GSMS 2004-GG2 Sparks 1215 and 1275 $2,667,011
Industrial, LLC Kleppe Land and
c/o Philip Wang 1455 Deming Way
Duane Morris LLP Sparks, NV
One Market Plaza, Spear
Tower, #2200
San Francisco, CA
94105-1127
German American Capital 155 Glendale Ave. $2,479,094
Corporation Sparks, NV
c/o Aron M. Oliner
Duane Morris LLP
One Market Plaza Spear St.
Tower #2200
San Francisco, CA 94105
Hudson Americas, LLC, as 5480 S. Valley View $2,178,621
servicer Blvd.
for Wells Fargo Bank, N.A. Las Vegas, NV
c/o Robert Kinas, Esq., Snell
& Wilmer
3800 Howard Hughes Pkwy.,
Suite 1000
Las Vegas, NV 89169
German American Capital 2750 W. Brooks Ave. $2,017,153
Corporation North Las Vegas, NV
c/o Aron M. Oliner
Duane Morris LLP
One Market Plaza Spear St.
Tower #2200
San Francisco, CA 94105
Hudson Americas, LLC, as 7625 Dean Martin $1,977,540
servicer Las Vegas, NV
for Wells Fargo Bank, N.A.
c/o Robert Kinas, Esq., Snell
& Wilmer
3800 Howard Hughes Pkwy.,
Suite 1000
Las Vegas, NV 89169
Hudson Americas, LLC, as 5720 and 5770 $1,815,520
servicer Russell Rd.
for Wells Fargo Bank, N.A. Las Vegas, NV
c/o Robert Kinas, Esq., Snell
& Wilmer
3800 Howard Hughes Pkwy.,
Suite 1000
Las Vegas, NV 89169
ST Mountain Vista Rent $268,354
1999 Whitney Mesa
Suite 120
Henderson, NV 89014
Clark County Treasurer Real Property Taxes $52,217
State of California Sales Tax for $22,963
Purchase of Airplane
Susan Frankewich, Esq. Legal Fees $21,781
Jenkins & Carter Legal services $11,827
501 Hammill Lane
Reno, NV 89511
Riparian Mgmt. Solutions, Financial $9,580
LLC consulting service
Chase Card Services Credit Card $6,747
Secretary of State Annual Filing Fees $4,097
Henderson, Nevada-based Whitton Corporation filed for
Chapter 11 bankruptcy protection on December 5, 2010 (Bankr. D.
Nev. Case No. 10-32680). Brett A. Axelrod, Esq., and Anne M.
Loraditch, Esq., at Fox Rothschild LLP, in Las Vegas, Nev., serve
as the Debtor's bankruptcy counsel. The Debtor estimated its
assets and debts at $10 million to $50 million.
South Tech Simmons 3040C, LLC, filed a separate petition on
Dec. 8, 2010 (Bank. D. Nev. Case No. 10-32857).
WHITTON CORP: Files Schedules of Assets and Liabilities
-------------------------------------------------------
Whitton Corporation filed with the U.S. Bankruptcy Court for
the District of Nevada its schedules of its assets and
liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $19,733,369
B. Personal Property $234,299
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $37,532,383
E. Creditors Holding
Unsecured Priority
Claims $75,280
F. Creditors Holding
Unsecured Non-priority
Claims $341,763
----------- -----------
TOTAL $19,967,668 $37,949,426
A copy of the Debtor's schedules is available for free at:
http://bankrupt.com/misc/WhittonCorp.SAL.pdf
Henderson, Nevada-based Whitton Corporation filed for
Chapter 11 bankruptcy protection on December 5, 2010 (Bankr. D.
Nev. Case No. 10-32680). Brett A. Axelrod, Esq., and Anne M.
Loraditch, Esq., at Fox Rothschild LLP, in Las Vegas, Nev., serve
as the Debtor's bankruptcy counsel. The Debtor estimated its
assets and debts at $10 million to $50 million.
South Tech Simmons 3040C, LLC, filed a separate petition on
Dec. 8, 2010 (Bank. D. Nev. Case No. 10-32857).
WHITTON CORP: Simmons Has Final OK to Use Cash Until April 25
-------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Nevada entered, on
Feb. 24, 2011, its final order authorizing South Tech Simmons
3040C, LLC, to use cash collateral of JPMCC 2006-CIBC 14 Simmons
Street, LLC, to operate and maintain the Simmons Property, through
April 25, 2011, in accordance with a budget.
Simmons is the owner of the real property commonly known as 3040
Simmons Street, North Las Vegas, NV 89032, consisting of
approximately 51,690 square feet of light industrial and warehouse
space.
Lender asserts a lien on the Simmons property and the Rents from
the property, securing obligations of approximately $3.65 million,
plus interest, fees and expenses, as of the petition date. All of
Debtor's cash resulting from the collection of the Rents, whether
held by the Debtor, the Lender, or the Receiver of the Simmons
property (appointed by the Eight Judicial District Court in Clark
County, Nevada), constitutes Lender's cash collateral.
As adequate protection, Lender is granted replacement liens on all
currently owned or hereafter acquired proceeds of the Prepetition
Collateral, including al cash from Rents, to the same extent as
the liens held by the Lender in the Prepetition Collateral.
In addition, Lender's claims will constitute allowed
administrative expense claims with priority in payment over all
administrative expenses of the kinds specified or ordered pursuant
to any provision of the Bankruptcy Code.
Further, Debtor will pay to Lender as adequate protection all Net
Available Cash from the prior month, as set forth in the Monthly
Report for such month.
The Debtor's authority to use cash collateral under this final
order will terminate one business day after the Lender provides
written notice of default that a Termination Event has occurred or
is occurring.
As defined in the Order, a Termination Event means the occurrence
of any of the following:
a) The entry of an order in this Chapter 11 Case granting relief
from the automatic stay so as to allow a third party or third
parties to proceed against any Prepetition Collateral or
Postpetition Collateral; and
b) This Chapter 11 Case is converted to a case under Chapter 7 of
the Bankruptcy Code or is dismissed;
c) A chapter 11 trustee is appointed; and
d) Failure to make a timely Monthly Adequate Protection Payment
subject to right to cure as set forth in this Cash Collateral
Order.
A copy of the Court's Final Cash Collateral Order is available for
free at:
http://bankrupt.com/misc/Whitton.FinalCashCollateralOrder.pdf
Henderson, Nevada-based Whitton Corporation filed for
Chapter 11 bankruptcy protection on December 5, 2010 (Bankr. D.
Nev. Case No. 10-32680). Brett A. Axelrod, Esq., and Anne M.
Loraditch, Esq., at Fox Rothschild LLP, in Las Vegas, Nev., serve
as the Debtor's bankruptcy counsel. The Debtor estimated its
assets and debts at $10 million to $50 million.
South Tech Simmons 3040C, LLC, filed a separate petition on
Dec. 8, 2010 (Bank. D. Nev. Case No. 10-32857).
WHITTON CORP: Taps Integra Realty as Real Estate Appraiser
----------------------------------------------------------
Whitton Corporation and South Tech Simmons 3040C, LLC, ask the
U.S. Bankruptcy Court for the District of Nevada for permission to
employ Integra Realty Resources - Nevada to provide real estate
appraisal services to the Debtors' real estate appraiser.
The Debtors relate that they need assistance in obtaining
valuation of their real estate properties to determine the amount
of the secured claims and unsecured claims of certain of their
creditors for purposes of the Debtors' plan of reorganization.
Integra Realty assures the Bankruptcy Court that it does not hold
or represent any interest adverse to the Debtors, and that it is a
"disinterested person" as that term is defined by Sec. 101(14) as
modified by Sec. 1107(b).
Debtors propose to pay Integra Realty at the hourly rate of $500
for managing director Shelli Lowe's services, $350 for certified
general real estate appraisers and $100 for analysts/researchers,
for attendance at depositions, court proceedings or other
proceedings where testimony is required, and for time and expenses
incurred in preparing for such proceedings.
Debtors request paying Integra Realty retainers totaling $18,250
in the aggregate.
Integra Realty intends to apply to the Court for the allowance of
compensation for post-petition professional services rendered and
reimbursement of expenses incurred in accordance with the
applicable provisions of the Bankruptcy Code, the Bankruptcy
Rules, the Local Bankruptcy Rules and the United States Trustee's
Guidelines.
Henderson, Nevada-based Whitton Corporation filed for
Chapter 11 bankruptcy protection on December 5, 2010 (Bankr. D.
Nev. Case No. 10-32680). Brett A. Axelrod, Esq., and Anne M.
Loraditch, Esq., at Fox Rothschild LLP, in Las Vegas, Nev., serve
as the Debtor's bankruptcy counsel. The Debtor estimated its
assets and debts at $10 million to $50 million.
South Tech Simmons 3040C, LLC, filed a separate petition on
Dec. 8, 2010 (Bank. D. Nev. Case No. 10-32857).
* Bankruptcy Trustee Entitled to Most of Tax Refund
---------------------------------------------------
When a spouse who earned all the family's income files for
bankruptcy, the bankruptcy trustee for the bankrupt spouse is
entitled to almost all of the tax refund, according to March 7
ruling by the Supreme Judicial Court of Massachusetts, the
state's highest court, Bill Rochelle, the bankruptcy columnist for
Bloomberg News, reported. The case turned on Massachusetts law.
The result might be different in another state, Mr. Rochelle said.
The SJC decision is Hundley v. Marsh, SJC-10729, Supreme Judicial
Court of Massachusetts. The case in the U.S. Circuit Court is
Hundley v. Marsh (In re Hundley), 09-1899, 1st U.S.
* SEC Investigates U.S. Bank Loan Restructuring Practices
---------------------------------------------------------
Dow Jones' DBR Small Cap reports that the Securities and Exchange
Commission is scrutinizing U.S. banks that have restructured
troubled loans in order to make them appear healthier than they
really are, according to people familiar with the situation.
Officials at the SEC are seeking information from an unknown
number of regional and community banks with large concentrations
of commercial real-estate loans, these people said, according to
DBR.
The report notes that the agency is zeroing in on a variety of
practices used by financial institutions as they work to clean up
loan portfolios that were bruised by the financial crisis or
recession. DBR relates that while the U.S. banking industry is in
recovery mode, many banks still are weighed down by soured loans.
Among the practices being examined by the SEC is one known as
"extend and pretend" or "amend and pretend," in which a bank gives
a borrower more time to repay a loan, the report adds.
* State, Federal Officials Join to Seek Servicing Overhaul
----------------------------------------------------------
Dow Jones' DBR Small Cap reports that state and federal officials
are pushing to more tightly regulate the way banks and other
mortgage servicers treat struggling homeowners in a bid to stem
foreclosures.
Current government modification programs are largely voluntary,
and there are few rules governing servicers' practices, according
to DBR.
But, the report relates, the nation's largest banks, including
Wells Fargo & Co., Bank of America Corp., and Citigroup Inc.,
received a detailed 27-page proposal from state attorneys general
and federal agencies to force a shakeup in banks' mortgage-
servicing policies.
The report notes that one industry executive familiar with the
document described it as "almost like a wish list."
It is "very prescriptive," this person said, the report says. "It
gets into the minutiae of how this group wants servicers to manage
loans," he added.
* Bankruptcy Filings May Drop Up to 5%; Boost U.S. Consumer ABS
---------------------------------------------------------------
The major segments of U.S. consumer ABS are due to receive some
good news that will boost collateral performance over the course
of the year, according to Fitch Ratings in a new report released.
Fitch projects personal bankruptcy filings to reverse a five-year
trend and fall 3-5% in 2011, which would make it the first such
decline since the Bankruptcy Abuse Prevention and Consumer
Protection Act was passed in 2005.
Bankruptcy filings have risen incrementally since 2005 and put a
strain on ABS collateral, though senior ratings have by and large
have remained well-insulated. Now with the trend likely to
reverse course this year, 'consumer ABS collateral performance is
likely to build on recent improvements throughout the year as the
economic recovery solidifies and filings slow,' said Managing
Director Michael Dean.
That being the case, Fitch expects the ongoing softness in the
labor and real estate markets to temper the positive upside for
the foreseeable future. As such, 'lower default rates for most
consumer related asset classes will still remain above historical
norms throughout 2011,' said Dean.
* Curtis Grabs Kirkland Bankruptcy Atty. in New York
----------------------------------------------------
Bankruptcy Law360 reports that Curtis Mallet-Prevost Colt & Mosle
LLP announced Friday that it had snagged Kirkland & Ellis LLP
bankruptcy attorney Michael Cohen, who joins the firm's New York
office as partner. Mr. Cohen, who represented debtors in formal
bankruptcy proceedings and out-of-court restructuring at Kirkland,
said he was attracted to Curtis by the potential to broaden his
practice.
* Skadden, Proskauer Laywers Play Hockey in NHL Charity Event
-------------------------------------------------------------
Eric Morath, writing for Dow Jones' Daily Bankruptcy Review,
reports that lawyers from Skadden, Arps, Slate, Meagher & Flom LLP
and Proskauer Rose LLP, played hockey in a charity event by the
National Hockey League. DBR says the game between the NHL's two
main outside law firms raised nearly $30,000 for the Ice Hockey in
Harlem, a favorite NHL charity.
Mr. Morath relates that Skadden won, 4-2, allowing the firm's
attorneys to sip beer from a silvery trophy during a post-game
celebration. Mr. Morath notes Skadden has won all four Lawyers'
Cup games, but the firm's margin of victory has narrowed
considerably since its first blowout win.
"We won that one by the skin of our teeth," said veteran Skadden
bankruptcy attorney and Ice Hockey in Harlem board member Greg
Milmoe after the game. "Their goalie made some fabulous saves."
* Recent Small-Dollar & Individual Chapter 11 Filings
-----------------------------------------------------
In Re Carl Brown
Bankr. C.D. Calif. Case No. 11-18266
Chapter 11 Petition filed February 26, 2011
In Re Triumphant Living Ministries Inc.
aka Shreve Ministries
aka Mike Shreve Ministries
aka Deeper Revelation Books
Bankr. E.D. Tenn. Case No. 11-11087
Chapter 11 Petition filed February 26, 2011
See http://bankrupt.com/misc/tneb11-11087p.pdf
See http://bankrupt.com/misc/tneb11-11087c.pdf
In Re The Comedy Showcase, Inc.
dba The Comedy Showcase Defensive Driving
Bankr. S.D. Texas Case No. 11-31701
Chapter 11 Petition filed February 26, 2011
See http://bankrupt.com/misc/txsb11-31701.pdf
In Re Bobby Hamby
Bankr. C.D. Calif. Case No. 11-12676
Chapter 11 Petition filed February 27, 2011
In Re Shagufta Toor
Bankr. D. Conn. Case No. 11-50350
Chapter 11 Petition filed February 27, 2011
In Re Onyx Enterprises, Inc.
Bankr. N.D. Texas Case No. 11-41060
Chapter 11 Petition filed February 27, 2011
See http://bankrupt.com/misc/txnb11-41060.pdf
In Re Olympia Estates II Associates LP
Bankr. D. Ariz. Case No. 11-04888
Chapter 11 Petition filed February 28, 2011
filed pro se
In Re William Hancock
Bankr. D. Ariz. Case No. 11-04959
Chapter 11 Petition filed February 28, 2011
In Re 2455153, LLC
aka Litho Communications
Bankr. C.D. Calif. Case No. 11-18376
Chapter 11 Petition filed February 28, 2011
See http://bankrupt.com/misc/cacb11-18376.pdf
In Re Alan Gan
Bankr. C.D. Calif. Case No. 11-18562
Chapter 11 Petition filed February 28, 2011
In Re Chol Sin
Bankr. C.D. Calif. Case No. 11-18599
Chapter 11 Petition filed February 28, 2011
In Re Hamlet Abnous
Bankr. C.D. Calif. Case No. 11-18592
Chapter 11 Petition filed February 28, 2011
In Re Norman Branyan
Bankr. C.D. Calif. Case No. 11-12718
Chapter 11 Petition filed February 28, 2011
In Re Victoria Lien
Bankr. C.D. Calif. Case No. 11-12458
Chapter 11 Petition filed February 28, 2011
In Re Susan Khaury
Bankr. N.D. Calif. Case No. 11-10729
Chapter 11 Petition filed February 28, 2011
In Re Thomas Lugaresi
Bankr. N.D. Calif. Case No. 11-51825
Chapter 11 Petition filed February 28, 2011
In Re IRI Sun Willows Associates, LLC
dba Sun Willows Golf Course
Bankr. S.D. Calif. Case No. 11-03233
Chapter 11 Petition filed February 28, 2011
See http://bankrupt.com/misc/casb11-03233.pdf
In Re NH Meateas Statutory Trust
Bankr D. Conn. Case No. 11-20494
Chapter 11 Petition filed February 28, 2011
filed pro se
In Re Denis Meurgue
Bankr. M.D. Fla. Case No. 11-03495
Chapter 11 Petition filed February 28, 2011
In Re Salvatore Materia
Bankr. M.D. Fla. Case No. 11-01318
Chapter 11 Petition filed February 28, 2011
In Re Andrew Noack
Bankr. D. Idaho Case No. 11-00474
Chapter 11 Petition filed February 28, 2011
In Re Felicia Haydon
Bankr. D. Md. Case No. 11-13967
Chapter 11 Petition filed February 28, 2011
In Re Douglas Schmidt
Bankr. D. Minn. Case No. 11-41376
Chapter 11 Petition filed February 28, 2011
In Re Dale Schmidt
Bankr. D. Minn. Case No. 11-41377
Chapter 11 Petition filed February 28, 2011
In Re David Schmidt
Bankr. D. Minn. Case No. 11-41378
Chapter 11 Petition filed February 28, 2011
In Re Sharon Schmidt
Bankr. D. Minn. Case No. 11-41380
Chapter 11 Petition filed February 28, 2011
In Re Careaga Engineering Inc.
Bankr. D. N.J. Case No. 11-15668
Chapter 11 Petition filed February 28, 2011
See http://bankrupt.com/misc/njb11-15668.pdf
In Re Dairy Whip
Bankr D. N.J. Case No. 11-15697
Chapter 11 Petition filed February 28, 2011
filed pro se
In Re G & T Food Market, LLC
dba C-Town Supermarket
Bankr. D. N.J. Case No. 11-15684
Chapter 11 Petition filed February 28, 2011
See http://bankrupt.com/misc/njb11-15684.pdf
In Re Frank Gallegos
Bankr. D. N.M. Case No. 11-10849
Chapter 11 Petition filed February 28, 2011
In Re Sandia Title Company, Inc.
Bankr. D. N.M. Case No. 11-10839
Chapter 11 Petition filed February 28, 2011
See http://bankrupt.com/misc/nmb11-10839.pdf
In Re Ryan Dusich
Joan Dusich
Bankr. S.D. Ohio Case No. 11-51904
Chapter 11 Petition filed February 28, 2011
In Re Patrizia Carbonara
Bankr. W.D. Pa. Case No. 11-21062
Chapter 11 Petition filed February 28, 2011
In Re B.P. Old Shepard Property LP
Bankr. E.D. Texas Case No. 11-40624
Chapter 11 Petition filed February 28, 2011
See http://bankrupt.com/misc/txeb11-40624.pdf
In Re ER Gaston LTD
Bankr. N.D. Texas Case No. 11-31397
Chapter 11 Petition filed February 28, 2011
See http://bankrupt.com/misc/txnb11-31397.pdf
In Re Harishbhai Amin
Bankr. N.D. Texas Case No. 11-10074
Chapter 11 Petition filed February 28, 2011
In Re Millicent Properties, LLC
Bankr. N.D. Texas Case No. 11-41096
Chapter 11 Petition filed February 28, 2011
See http://bankrupt.com/misc/txnb11-41096.pdf
In Re Closner Construction Co., LC
Bankr. S.D. Texas Case No. 11-50060
Chapter 11 Petition filed February 28, 2011
See http://bankrupt.com/misc/txsb11-50060.pdf
In Re Construction Depot, LC
Bankr. S.D. Texas Case No. 11-50059
Chapter 11 Petition filed February 28, 2011
See http://bankrupt.com/misc/txsb11-50059.pdf
In Re Garimar Marine, Inc.
dba Bastrop Marina
Bankr. S.D. Texas Case No. 11-31889
Chapter 11 Petition filed February 28, 2011
See http://bankrupt.com/misc/txsb11-31889.pdf
In Re MNG Family, L.P.
Bankr. S.D. Texas Case No. 11-50054
Chapter 11 Petition filed February 28, 2011
See http://bankrupt.com/misc/txsb11-50054.pdf
In Re Tada Ventures, LLC
Bankr. S.D. Texas Case No. 11-31936
Chapter 11 Petition filed February 28, 2011
See http://bankrupt.com/misc/txsb11-31936.pdf
In Re Wrisolve Realty Company, LLC
Bankr. S.D. Texas Case No. 11-31918
Chapter 11 Petition filed February 28, 2011
See http://bankrupt.com/misc/txsb11-31918.pdf
In Re Aziz Shakarzahi
Bankr. W.D. Texas Case No. 11-30365
Chapter 11 Petition filed February 28, 2011
In Re Joseph Bane
Bankr. E.D. Va. Case No. 11-11426
Chapter 11 Petition filed February 28, 2011
In Re Marcus Saenz
Bankr. W.D. Texas Case No. 11-10458
Chapter 11 Petition filed February 28, 2011
In Re George Ventura
Bankr. D. Ariz. Case No. 11-05152
Chapter 11 Petition filed March 1, 2011
In Re Ben Karmelich
Bankr. C.D. Calif. Case No. 11-18722
Chapter 11 Petition filed March 1, 2011
In Re Bilgai Diaz
Bankr. C.D. Calif. Case No. 11-12539
Chapter 11 Petition filed March 1, 2011
In Re Linda Abramian
Bankr. C.D. Calif. Case No. 11-12580
Chapter 11 Petition filed March 1, 2011
In Re Naresh Mehra
Bankr. C.D. Calif. Case No. 11-18778
Chapter 11 Petition filed March 1, 2011
In Re Ramon Montano
Bankr. C.D. Calif. Case No. 11-12850
Chapter 11 Petition filed March 1, 2011
In Re Robert Jones
Bankr. C.D. Calif. Case No. 11-10952
Chapter 11 Petition filed March 1, 2011
In Re Sambria Realty, LLC
Bankr C.D. Calif. Case No. 11-18762
Chapter 11 Petition filed March 1, 2011
filed pro se
In Re Downing Global, LLC
Bankr. D. Colo. Case No. 11-13953
Chapter 11 Petition filed March 1, 2011
See http://bankrupt.com/misc/cob11-13953.pdf
In Re Louis DeFrancesco
Bankr. D. Conn. Case No. 11-50380
Chapter 11 Petition filed March 1, 2011
In Re R&L Investment Property, LLC
Bankr. S.D. Fla. Case No. 11-15508
Chapter 11 Petition filed March 1, 2011
See http://bankrupt.com/misc/flsb11-15508.pdf
In Re Sebastian Balliro
Bankr. S.D. Fla. Case No. 11-15580
Chapter 11 Petition filed March 1, 2011
In Re Douglas Vick
Barbara Vick
Bankr. M.D. Ga. Case No. 11-70335
Chapter 11 Petition filed March 1, 2011
In Re Glenn David
Bankr. M.D. Ga. Case No. 11-30340
Chapter 11 Petition filed March 1, 2011
In Re A & A Automotive Services, Inc.
Bankr. N.D. Ga. Case No. 11-40623
Chapter 11 Petition filed March 1, 2011
See http://bankrupt.com/misc/ganb11-40623.pdf
In Re Brandon Ward
Bankr. N.D. Ga. Case No. 11-40622
Chapter 11 Petition filed March 1, 2011
In Re Ward Rolloff Waste Disposal Services, Inc.
Bankr. N.D. Ga. Case No. 11-40624
Chapter 11 Petition filed March 1, 2011
See http://bankrupt.com/misc/ganb11-40624.pdf
In Re Jin Suk Kim Trust dba La Union Mall
Bankr. D. Md. Case No. 11-14033
Chapter 11 Petition filed March 1, 2011
See http://bankrupt.com/misc/mdb11-14033.pdf
In Re Fili Deligiannidis
Bankr. D. Mass. Case No. 11-11713
Chapter 11 Petition filed March 1, 2011
In Re Arthur Kapetansky
Bankr. D. Nev. Case No. 11-12837
Chapter 11 Petition filed March 1, 2011
In Re Edyta Gryglak
Bankr. D. Nev. Case No. 11-12801
Chapter 11 Petition filed March 1, 2011
In Re Kevin Rohan
Bankr. D. Nev. Case No. 11-50616
Chapter 11 Petition filed March 1, 2011
In Re 300 Woodbury Road LLC
Bankr. E.D.N.Y. Case No. 11-71191
Chapter 11 Petition filed March 1, 2011
See http://bankrupt.com/misc/nyeb11-71191.pdf
In Re Orrin Bailey
Bankr. E.D. Pa. Case No. 11-11563
Chapter 11 Petition filed March 1, 2011
In Re Trinca Development Corp.
Bankr. D. S.C. Case No. 11-01315
Chapter 11 Petition filed March 1, 2011
See http://bankrupt.com/misc/scb11-01315.pdf
In Re Gary Brewster
Bankr. E.D. Tenn. Case No. 11-50501
Chapter 11 Petition filed March 1, 2011
In Re Marhaba Partners Limited Partnership
Bankr S.D. Texas Case No. 11-31962
Chapter 11 Petition filed March 1, 2011
filed pro se
In Re Scott Becker
Bankr. W.D. Texas Case No. 11-10530
Chapter 11 Petition filed March 1, 2011
In Re CE Jones & Son Construction, Inc.
Bankr. E.D. Va. Case No. 11-31332
Chapter 11 Petition filed March 1, 2011
See http://bankrupt.com/misc/vaeb11-31332.pdf
In Re Covenant Outdoor Advertising, LLC
Bankr. N.D. W.Va. Case No. 11-00335
Chapter 11 Petition filed March 1, 2011
See http://bankrupt.com/misc/wvnb11-00335.pdf
In Re Bourbonneux, LLC
Bankr D. Colo. Case No. 11-14043
Chapter 11 Petition filed March 2, 2011
filed pro se
In Re Rock Bottom in Naples, Inc.
dba The Keys Bar and Grille
Bankr. M.D. Fla. Case No. 11-03846
Chapter 11 Petition filed March 2, 2011
See http://bankrupt.com/misc/flmb11-03846.pdf
In Re Cardiovascular Diagnostic Image Inc.
Bankr S.D. Fla. Case No. 11-15648
Chapter 11 Petition filed March 2, 2011
filed pro se
In Re Randi's, Inc.
Bankr. S.D. Ga. Case No. 11-10431
Chapter 11 Petition filed March 2, 2011
See http://bankrupt.com/misc/gasb11-10431.pdf
In Re BDG Associates Of Maryland, Inc.
aka Crossroads
aka Gayle Property Ventures, LLC
aka AMG Associates Of Maryland, Inc.
aka BDG Associates Of Maryland, Inc.
aka BDG
Bankr. D. Md. Case No. 11-14190
Chapter 11 Petition filed March 2, 2011
See http://bankrupt.com/misc/mdb11-14190p.pdf
See http://bankrupt.com/misc/mdb11-14190c.pdf
In Re Highland Parkway Realty, LLC
Bankr. D. N.J. Case No. 11-16229
Chapter 11 Petition filed March 2, 2011
See http://bankrupt.com/misc/njb11-16229.pdf
In Re Ataka Taka Taka, Inc.
aka Park Slope Eatery
Bankr. E.D.N.Y. Case No. 11-41648
Chapter 11 Petition filed March 2, 2011
See http://bankrupt.com/misc/nyeb11-41648.pdf
In Re 624 Upper Court Street Corp.
Bankr. N.D. N.Y. Case No. 11-60364
Chapter 11 Petition filed March 2, 2011
See http://bankrupt.com/misc/nynb11-60364.pdf
In Re Datatech Business Forms, Inc.
Bankr. E.D. Pa. Case No. 11-11585
Chapter 11 Petition filed March 2, 2011
See http://bankrupt.com/misc/paeb11-11585.pdf
In Re Duel Products, Inc.
Bankr. E.D. Texas Case No. 11-40690
Chapter 11 Petition filed March 2, 2011
See http://bankrupt.com/misc/txeb11-40690.pdf
In Re Sports @ the B.U.S., Ltd.
dba B.U.S.
Bankr. S.D. Texas Case No. 11-32041
Chapter 11 Petition filed March 2, 2011
See http://bankrupt.com/misc/txsb11-32041.pdf
In Re Josh Roehling Trucking, Inc.
Bankr. W.D. Wis. Case No. 11-11205
Chapter 11 Petition filed March 2, 2011
See http://bankrupt.com/misc/wiwb11-11205.pdf
In Re David Arnold
Bankr. C.D. Calif. Case No. 11-13031
Chapter 11 Petition filed March 3, 2011
In Re Mark Lebens
Bankr. C.D. Calif. Case No. 11-19111
Chapter 11 Petition filed March 3, 2011
In Re Paul Stanton
Bankr. C.D. Calif. Case No. 11-12733
Chapter 11 Petition filed March 3, 2011
In Re Vladimir Elmanovich
Bankr. C.D. Calif. Case No. 11-12715
Chapter 11 Petition filed March 3, 2011
In Re Griswold Tower, LLC
Bankr E.D. Calif. Case No. 11-25394
Chapter 11 Petition filed March 3, 2011
filed pro se
In Re Joseph Tedesco
Bankr. E.D. Calif. Case No. 11-90779
Chapter 11 Petition filed March 3, 2011
In Re Anna Aquino
Bankr. N.D. Calif. Case No. 11-52041
Chapter 11 Petition filed March 3, 2011
In Re Joseph Williams
Bankr. N.D. Calif. Case No. 11-42299
Chapter 11 Petition filed March 3, 2011
In Re Therese Lynch
Bankr. S.D. Calif. Case No. 11-03557
Chapter 11 Petition filed March 3, 2011
In Re Sheila Desautels
Bankr. M.D. Fla. Case No. 11-03881
Chapter 11 Petition filed March 3, 2011
In Re Jean Ramiro
Bankr. D. Hawaii Case No. 11-00582
Chapter 11 Petition filed March 3, 2011
In Re DCPP, LLC
Bankr. D. Md. Case No. 11-14227
Chapter 11 Petition filed March 3, 2011
See http://bankrupt.com/misc/mdb11-14227.pdf
In Re Mack McCain
Bankr. E.D. Mo. Case No. 11-41836
Chapter 11 Petition filed March 3, 2011
In Re BICE Enterprises, Inc.
Bankr. D. Mont. Case No. 11-60335
Chapter 11 Petition filed March 3, 2011
See http://bankrupt.com/misc/mtb11-60335.pdf
In Re George Bittar
Bankr. D. Nev. Case No. 11-12920
Chapter 11 Petition filed March 3, 2011
In Re 1040 Quick, LLC
Bankr. D. N.J. Case No. 11-16373
Chapter 11 Petition filed March 3, 2011
See http://bankrupt.com/misc/njb11-16373.pdf
In Re Le Blanc Building, LLC
Bankr D. N.J. Case No. 11-16377
Chapter 11 Petition filed March 3, 2011
filed pro se
In Re Trina Tahir
Bankr. W.D. Okla. Case No. 11-10939
Chapter 11 Petition filed March 3, 2011
In Re Joseph Morris
Bankr. D. S.D. Case No. 11-40110
Chapter 11 Petition filed March 3, 2011
In Re Contracting & Technical Services, Inc.
Bankr. E.D. Va. Case No. 11-11528
Chapter 11 Petition filed March 3, 2011
See http://bankrupt.com/misc/vaeb11-11528.pdf
In Re David Parkhurst
Bankr. W.D. Wash. Case No. 11-41635
Chapter 11 Petition filed March 3, 2011
In Re Scott Banchero
Bankr. W.D. Wash. Case No. 11-12340
Chapter 11 Petition filed March 3, 2011
In Re Bradley Goodrich
Bankr. W.D. Wis. Case No. 11-11260
Chapter 11 Petition filed March 3, 2011
In Re John Hamacher
Bankr. D. Ariz. Case No. 11-05477
Chapter 11 Petition filed March 4, 2011
In Re Marvin Scott
Bankr. C.D. Calif. Case No. 11-19455
Chapter 11 Petition filed March 4, 2011
In Re Terry Damerel
Bankr. C.D. Calif. Case No. 11-11007
Chapter 11 Petition filed March 4, 2011
In Re Thomas Naranjo
Bankr. C.D. Calif. Case No. 11-17103
Chapter 11 Petition filed March 4, 2011
In Re Jorge Elizalde
Bankr. E.D. Calif. Case No. 11-90793
Chapter 11 Petition filed March 4, 2011
In Re Catherine Kostlan
Bankr. N.D. Calif. Case No. 11-30865
Chapter 11 Petition filed March 4, 2011
In Re Noriko Belmont
Bankr. N.D. Calif. Case No. 11-52086
Chapter 11 Petition filed March 4, 2011
In Re U Street, Inc.
Bankr D. D.C. Case No. 11-00173
Chapter 11 Petition filed March 4, 2011
filed pro se
In Re Charlotte Jones
Bankr. M.D. Fla. Case No. 11-01464
Chapter 11 Petition filed March 4, 2011
In Re Thomas Hudson
Bankr. M.D. Fla. Case No. 11-01475
Chapter 11 Petition filed March 4, 2011
In Re Georgia Internal Medicine Care Associates, P.C.
Bankr. N.D. Ga. Case No. 11-57058
Chapter 11 Petition filed March 4, 2011
See http://bankrupt.com/misc/ganb11-57058.pdf
In Re Jimmy Stewart
Bankr. N.D. Ga. Case No. 11-20928
Chapter 11 Petition filed March 4, 2011
In Re Clayton Wages
Bankr. D. Idaho Case No. 11-40249
Chapter 11 Petition filed March 4, 2011
In Re Maverick Industries, Inc.
Bankr. N.D. Ill. Case No. 11-09023
Chapter 11 Petition filed March 4, 2011
See http://bankrupt.com/misc/ilnb11-09023.pdf
In Re Industrial Fabrication Corporation
Bankr. W.D. La. Case No. 11-50289
Chapter 11 Petition filed March 4, 2011
See http://bankrupt.com/misc/lawb11-50289.pdf
In Re Phil Pizzolato
Bankr. D. Nev. Case No. 11-13032
Chapter 11 Petition filed March 4, 2011
In Re Underdog Truck Service Inc.
Bankr. D. N.J. Case No. 11-16521
Chapter 11 Petition filed March 4, 2011
In Re 429 Amsterdam Avenue, LLC
dba Taberna
Bankr. S.D.N.Y. Case No. 11-10958
Chapter 11 Petition filed March 4, 2011
See http://bankrupt.com/misc/nysb11-10958.pdf
In Re Whitted Forest Limited Partnership,
a North Carolina Limited Partnership
Bankr. M.D. N.C. Case No. 11-80393
Chapter 11 Petition filed March 4, 2011
See http://bankrupt.com/misc/mtb11-60335.pdf
In Re PRMS Group Inc.
Bankr. D. Puerto Rico Case No. 11-01837
Chapter 11 Petition filed March 4, 2011
See http://bankrupt.com/misc/prb11-01837.pdf
In Re Gagnier Associates, Inc.
dba Another Liquor Store
Bankr. D. R.I. Case No. 11-10813
Chapter 11 Petition filed March 4, 2011
See http://bankrupt.com/misc/rib11-10813.pdf
In Re Gagnier Realty, LLC
Bankr. D. R.I. Case No. 11-10814
Chapter 11 Petition filed March 4, 2011
See http://bankrupt.com/misc/rib11-10814.pdf
In Re Golden Mile Development Co LLC
Bankr D. S.C. Case No. 11-01390
Chapter 11 Petition filed March 4, 2011
filed pro se
In Re Guy Collins
Bankr. D. S.C. Case No. 11-01391
Chapter 11 Petition filed March 4, 2011
In Re William Vaden
Bankr. W.D. Tenn. Case No. 11-10643
Chapter 11 Petition filed March 4, 2011
In Re Denver Merchandise Mart, Inc.
Bankr. N.D. Texas Case No. 11-31615
Chapter 11 Petition filed March 4, 2011
See http://bankrupt.com/misc/txnb11-31615.pdf
In Re Denver Merchandise Mart Employers, Inc.
Bankr. N.D. Texas Case No. 11-31616
Chapter 11 Petition filed March 4, 2011
In Re Hawthorn Lakes Associates, Ltd.
Bankr. N.D. Texas Case No. 11-31617
Chapter 11 Petition filed March 4, 2011
In Re Valley Corporation
Bankr. N.D. Texas Case No. 11-31618
In Re Jet Pressure Washers, Ltd.
Bankr. S.D. Texas Case No. 11-32090
Chapter 11 Petition filed March 4, 2011
See http://bankrupt.com/misc/txsb11-32090.pdf
In Re Ornamental Iron Fence Supply, LLC
aka OIFS
dba Guaranty Fence
dba Texas Commercial Railing
Bankr. W.D. Texas Case No. 11-10556
Chapter 11 Petition filed March 4, 2011
See http://bankrupt.com/misc/txwb11-10556.pdf
In Re Spirit Tours, LLC
Bankr. E.D. Va. Case No. 11-31407
Chapter 11 Petition filed March 4, 2011
See http://bankrupt.com/misc/vaeb11-31407.pdf
In Re The L & B Group, LLC
dba K2 Restaurant and Lounge
Bankr. E.D. Va. Case No. 11-11551
Chapter 11 Petition filed March 4, 2011
See http://bankrupt.com/misc/vaeb11-11551.pdf
In Re Gizella Eman
Bankr. C.D. Calif. Case No. 11-12797
Chapter 11 Petition filed March 5, 2011
In Re Pacific Delivery Service, Inc.
Bankr. W.D. Wash. Case No. 11-12473
Chapter 11 Petition filed March 5, 2011
See http://bankrupt.com/misc/wawb11-12473.pdf
In Re Dwight Millard
Bankr. D. Nev. Case No. 11-50677
Chapter 11 Petition filed March 6, 2011
In Re Lord's Lodging LLC, a New Mexico Domestic Limited Liability
Company
dba Day's Inn and Suites of Lordsburg
Bankr. D. N.M. Case No. 11-10925
Chapter 11 Petition filed March 6, 2011
See http://bankrupt.com/misc/nmb11-10925.pdf
In Re RAMW, LLC
Bankr. D. S.C. Case No. 11-01475
Chapter 11 Petition filed March 6, 2011
See http://bankrupt.com/misc/scb11-01475.pdf
In Re Hall Grading, LLC
Bankr. N.D. Ala. Case No. 11-40605
Chapter 11 Petition filed March 7, 2011
See http://bankrupt.com/misc/alnb11-40605.pdf
In Re George Lanning
Bankr. C.D. Calif. Case No. 11-19760
Chapter 11 Petition filed March 7, 2011
In Re Balaji Management, LLC
dba America's Best Value Inn
Bankr E.D. Calif. Case No. 11-25658
Chapter 11 Petition filed March 7, 2011
filed pro se
In Re Jon Huffine
Bankr. E.D. Calif. Case No. 11-25633
Chapter 11 Petition filed March 7, 2011
In Re Amante Estoesta
Bankr. N.D. Calif. Case No. 11-52162
Chapter 11 Petition filed March 7, 2011
In Re Paula Bruce
Bankr. N.D. Calif. Case No. 11-10822
Chapter 11 Petition filed March 7, 2011
In Re Ronald Korf
Pamela Korf
Bankr. D. Colo. Case No. 11-14436
Chapter 11 Petition filed March 7, 2011
In Re Clifford Benjamin
Bankr. M.D. Fla. Case No. 11-01520
Chapter 11 Petition filed March 7, 2011
In Re David Plummer
Bankr. M.D. Fla. Case No. 11-01486
Chapter 11 Petition filed March 7, 2011
In Re Smith Air Conditioning
Bankr. S.D. Ga. Case No. 11-40503
Chapter 11 Petition filed March 7, 2011
See http://bankrupt.com/misc/gasb11-40503.pdf
In Re Andrew Kuhlemeier
Bankr. N.D. Ill. Case No. 11-80884
Chapter 11 Petition filed March 7, 2011
In Re William Reitzel
Bankr. N.D. Ill. Case No. 11-80865
Chapter 11 Petition filed March 7, 2011
In Re Dimitrios Nikolulis
Bankr. D. Ind. Case No. 11-10638
Chapter 11 Petition filed March 7, 2011
In Re Patros, Inc.
Bankr. E.D. Mich. Case No. 11-45911
Chapter 11 Petition filed March 7, 2011
See http://bankrupt.com/misc/mieb11-45911.pdf
In Re Henry Verastegui
Bankr. D. Nev. Case No. 11-13050
Chapter 11 Petition filed March 7, 2011
In Re Vincent St. Catherine
Bankr. E.D.N.Y. Case No. 11-41762
Chapter 11 Petition filed March 7, 2011
In Re Kareem Motley
Bankr. D. S.C. Case No. 11-01480
Chapter 11 Petition filed March 7, 2011
In Re Sands of Kahala Beach HOA, Inc.
Bankr. S.D. Texas Case No. 11-32119
Chapter 11 Petition filed March 7, 2011
See http://bankrupt.com/misc/txsb11-32119.pdf
In Re Roger Puga
Bankr. D. Ariz. Case No. 11-05729
Chapter 11 Petition filed March 8, 2011
In Re Stephanie Price
Bankr. D. Ariz. Case No. 11-05768
Chapter 11 Petition filed March 8, 2011
In Re Jeffrey Biggins
Bankr. C.D. Calif. Case No. 11-13236
Chapter 11 Petition filed March 8, 2011
In Re Richard Taguinod
Bankr. N.D. Calif. Case No. 11-42496
Chapter 11 Petition filed March 8, 2011
In Re Liquidation Services Trust
Bankr. S.D. Calif. Case No. 11-03729
Chapter 11 Petition filed March 8, 2011
See http://bankrupt.com/misc/casb11-03729.pdf
In Re James Haber
Bankr. D. Colo. Case No. 11-14570
Chapter 11 Petition filed March 8, 2011
In Re Matthew Whetten
Bankr. D. Colo. Case No. 11-14571
Chapter 11 Petition filed March 8, 2011
In Re Georgia Training Alliance, Inc.
Bankr N.D. Ga. Case No. 11-57229
Chapter 11 Petition filed March 8, 2011
filed pro se
In Re Shoreline Condominium Association
Bankr. N.D. Ill. Case No. 11-09622
Chapter 11 Petition filed March 8, 2011
See http://bankrupt.com/misc/ilnb11-09622.pdf
In Re Taycor, Inc.
dba Cooks & Company
dba Fork at 532
Bankr. S.D. Ind. Case No. 11-02339
Chapter 11 Petition filed March 8, 2011
See http://bankrupt.com/misc/insb11-02339.pdf
In Re Juan Rios
Bankr. D. Mass. Case No. 11-11907
Chapter 11 Petition filed March 8, 2011
In Re Brewhouse Tavern, LLC
dba Carmel's Pub
Bankr. D. Nev. Case No. 11-50697
Chapter 11 Petition filed March 8, 2011
See http://bankrupt.com/misc/nvb11-50697.pdf
In Re Michael Feeney
Bankr. D. Nev. Case No. 11-13177
Chapter 11 Petition filed March 8, 2011
In Re Robert Lagana
Bankr. D. N.J. Case No. 11-16812
Chapter 11 Petition filed March 8, 2011
In Re Allstate Gasket & Packing, Inc.
Bankr. E.D.N.Y. Case No. 11-71346
Chapter 11 Petition filed March 8, 2011
See http://bankrupt.com/misc/nyeb11-71346.pdf
In Re Arthur Kill Hillside Development LLC
Bankr. E.D.N.Y. Case No. 11-41810
Chapter 11 Petition filed March 8, 2011
See http://bankrupt.com/misc/nyeb11-41810.pdf
In Re Tensco Inc.
Bankr. E.D.N.Y. Case No. 11-71353
Chapter 11 Petition filed March 8, 2011
See http://bankrupt.com/misc/nyeb11-71353.pdf
In Re Kathleen Lynn
Bankr. S.D.N.Y. Case No. 11-10998
Chapter 11 Petition filed March 8, 2011
In Re Raymond Wynn
Bankr. W.D. Pa. Case No. 11-10395
Chapter 11 Petition filed March 8, 2011
In Re Mark Nixon
Bankr. S.D. Texas Case No. 11-70157
Chapter 11 Petition filed March 8, 2011
In Re James Haldeman
Bankr. W.D. Wis. Case No. 11-11359
Chapter 11 Petition filed March 8, 2011
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers"
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com by e-mail.
On Thursdays, the TCR delivers a list of recently filed
Chapter 11 cases by individuals and business entities estimating
assets and debts or disclosing assets and liabilities at less than
$1,000,000. The list includes links to freely downloadable images
of the small-dollar business-related petitions in Acrobat PDF
format.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
The Sunday TCR delivers securitization rating news from the week
then-ending.
For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911. For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors" Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland,
USA. Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine
Tumanda, Howard C. Tolentino, Joseph Medel C. Martirez, Denise
Marie Varquez, Philline Reluya, Ronald C. Sy, Joel Anthony G.
Lopez, Cecil R. Villacampa, Sheryl Joy P. Olano, Carlo Fernandez,
Christopher G. Patalinghug, and Peter A. Chapman, Editors.
Copyright 2011. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers. Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.
The TCR subscription rate is $775 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same
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are $25 each. For subscription information, contact Christopher
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*** End of Transmission ***